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Aid Target

Volume 294: debated on Wednesday 21 May 1997

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6.

To ask the Secretary of State for International Development when she expects the Government to meet the United Nations target of 0.7 per cent. of gross national product in their contribution to overseas aid; and if she will make a statement. [315]

9.

To ask the Secretary of State for International Development when she estimates that spending on overseas aid will reach the target of 0.7 per cent. of gross domestic product. [318]

We remain committed to the 0.7 per cent. United Nations aid target and to reversing the decline in United Kingdom spending. As we said during the election campaign, however, we shall work within existing ceilings this year and next. I am currently reviewing expenditure plans and putting in place a coherent strategy to tackle global poverty, which will be published in the White Paper promised in the Queen's Speech. As we demonstrate progress, additional resources will be made available.

I welcome the right hon. Lady to her position and congratulate her on her strong commitment to and understanding of development issues. Does she share my concern that this country now contributes just 0.28 per cent. of GDP in overseas aid compared with 0.51 per cent. in 1979? The rich in this country have had tax cuts, but the poor in many countries have lacked basic food and shelter.

Given the right hon. Lady's strong commitment, is she capable of persuading her colleagues—particularly the Chancellor of the Exchequer—to ensure that, despite the stringent financial conditions that he has imposed on the Cabinet, sufficient funds will be made available to meet the United Nations target of 0.7 per cent.? Will she set a time scale for that?

The hon. Gentleman is absolutely right: Labour's record on aid is a proud one—we reached 0.51 per cent. of GDP and rising towards the target. The Conservative Government, who so rightly have lost office, left us with a contribution of 0.27 per cent. of GDP—even worse than the figure that the hon. Gentleman gave.

We need a higher aid spend, but we need to spend our aid money better. We need coherence across all our policies on debt, at the International Monetary Fund, the World bank, the European Union and the Lome renegotiations. In that way, we can focus our efforts on the measurable eradication of poverty.

While I can hardly change the Department's aid spend this year—although I can do so at the margins—because it takes so long to work up sensible and strong projects, I am busy working to redirect our energies next year. It is in the year after that, however, that I shall need more resources because we shall have plans in place to spend the money properly. I hope and intend that that will be so.

In adding my voice to the general welcome that has been extended to the right hon. Lady in her new role, may I ask if I am right in interpreting her previous answer by suggesting that while the Chancellor of the Exchequer may or may not have a warm heart, he is most unlikely to have an open purse? If those are the circumstances that she faces, can she give any clearer indication of how she will make the aid spend more effective?

I am grateful to the hon. Gentleman, but I thought that I had been talking about that for some considerable time this afternoon. Too much of the current aid spend goes on projects which are worth while in themselves but are not focused on the eradication of poverty. I am very supportive of the plans outlined in the Organisation for Economic Co-operation and Development Assistance Committee report, which stated that the world should set itself targets including that of halving world poverty by the year 2015. All the donor countries would then work in partnership with developing countries to reach measurable progress.

If we work in such a way, we may then begin to believe that in the new millennium we shall see the end of abject poverty in the world. Currently, poverty affects one in four people. The aid spend is an important part of that plan, but it must be based within strategies which deliver progress; otherwise, money may be spent on good causes, but we shall not reach progress.

My right hon. Friend the Chancellor of the Exchequer cares very deeply about that agenda and I am extremely optimistic that he and I will work beneficially together to get the progress that we want.

Will my right hon. Friend assure Labour Members that a Labour Government will never repeat the cut imposed by the Tory Chancellor in his Budget this year, when he reduced overseas aid by £180 million? That deliberate cut imposed untold hardship and misery on hundreds of thousands of African and Asian families so that the price of gin and whisky in this country could be reduced by 27p. Such was the motive behind that attempt at general election popularity.

The Conservative party fought the election on a commitment to move to an aid spend of 0.7 per cent. of GDP, but year upon year the Conservative Government cut the aid budget. As I said earlier, they also gave up to 40 per cent. of our spend to the EU and thus lost control of it. Their record is poor. We fought the election on a commitment to halt the decline and to increase the aid spend and we intend to keep all our manifesto commitments.

When my right hon. Friend conducts her expenditure review, will she examine closely the way in which Brussels officials manage the know-how and PHARE funds? In terms of devolution, surely Britain's contributions to the funds should be managed by my right hon. Friend and her Department.

The know-how fund is managed from Britain by my Department, with the Foreign Office co-operating. The PHARE fund is a European Union programme; it therefore has to be managed differently, but it should be complementary. The spending on that fund, like that on all other funds, must be reviewed to make it more effective than under the previous Administration.

The Secretary of State was correct when she said that we need to spend all our money better. Is she aware that Oxfam says that 19 water tanks, providing 28,500 people with 10 litres of clean water a day, could have been provided through our aid budget for the absurd cost of the Foreign Secretary's glitzy presentation of the mission statement? Was that money well spent?

I have to say that that is an extremely cheap point—[Interruption.] The hon. Gentleman served as a Minister in a Government who have just been booted out of office and who consistently cut, cut and cut the aid budget to give tax cuts to their wealthy friends. The new Administration will ensure that our aid spending eradicates poverty as effectively as possible, but it is also our duty to announce the priorities of our foreign policy—and that is what my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs did.