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Aid Programme

Volume 268: debated on Monday 11 December 1995

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To ask the Secretary of State for Foreign and Commonwealth Affairs what representations have been received on the overseas aid programme arising from the "Financial Statement and Budget Report" proposals. [3313]

We have had no formal representations, but my right hon. and noble Friend the Minister for Overseas Development has met senior representatives of the non-governmental organisations' community to discuss the broad implications of the financial statement proposals.

Does the Minister accept that organisations such as Oxfam which are much involved in overseas aid criticise the claim that Britain is the fifth biggest contributor? In relation to national wealth we are joint 13th with Italy. Is it not time that we stopped hovering at 0.31 per cent. of GNP and moved towards the 0.7 per cent. target set by the United Nations?

Our aid programme is extremely effective. Other G7 donors are finding that, in difficult economic circumstances, they are unable to move towards the target. Italy's aid expenditure fell by 36 per cent. last year; Canada is reducing its aid by 20.5 per cent.; and the United States, which contributes only 0.15 per cent. of GNP to aid, is reducing its programme still further, but the Government have consciously avoided cuts of a similar magnitude. The hon. Gentleman might like to know that the United Kingdom's ODA-GNP ratio in 1994 was 0.31 per cent. That is higher than the average for all development assistance committee donors, which is 0.29 per cent. and the UK is likely to remain at or near the DAC average.

Although any reduction in our overseas aid budget must be a matter for concern, does my right hon. Friend agree that the figures should be put into perspective and that the planned expenditure for next year is only about £90 million less than the expected outturn of more than £2,150 million this year? As the expenditure outturn is always varied by the degree to which programmes have been completed, will my right hon. Friend confirm that next year's planned expenditure should in no way be inhibited by the very small reduction?

I agree entirely with my hon. Friend. The programme for next year is still very large and the money will be extremely effectively spent. The problem that, I suppose, has given rise to some of the comments about the ODA is that our bilateral programme will shrink over the next three years compared with our multilateral programme. There is no doubt that the bilateral programme will be reduced over the survey period, but much of the reduction in 1996-97 will be accommodated by lower than previously forecast spending on multilateral programmes, especially on the European development fund, and that will help to offset the pressures on the bilateral programme.

Will the Minister cast his mind back to what the Chancellor said in his Budget statement and not play around with figures? The right hon. and learned Gentleman said that

"the planned allocation for bilateral aid is likely to be little different from that set out in last year's departmental report."—[Official Report, 28 November 1995; Vol.267, c.1060-61.]
Will the Minister confirm that the figures in the report show that bilateral aid was scheduled to fall anyway from £1,100 million in 1995-96 to £1,019 million in 1996-97 —a cut of 7 per cent. or £81 million, which is no mean figure at all? On that basis, will not the bilateral aid budget, far from being protected or little different, as the Chancellor implied in his statement, be cut next year, the year after and the year after that on the basis of the figures announced on 28 November?

I am surprised that the hon. Lady criticises the reduction in the bilateral programme, which is due almost entirely to the increase in the multilateral programme. I thought that her party was the party of Europe and that it believed in multilateral donations at the cost of national interest. To consider the bilateral aid programme alone is to be dishonest because, after all, the budget will be £2,154 million in 1996-97. Yes, that is an overall 5.4 per cent. reduction in cash terms, hut the budget is planned to rise by £47 million to £2,201 million in 1997-98 and by a further £69 million to £2,270 million in 1998-99. That is, therefore, a substantial aid budget.

I will take it at the end: I take points of order after questions. [Interruption.] I will deal with this. All hon. Members must be treated equally in this respect.