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Overseas Aid

Volume 590: debated on Monday 1 June 1998

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What progress they have made towards the objective of untying aid in overseas development co-operation programmes.

My Lords, we strongly support multilateral untying of aid. Some progress is being made. There is now agreement in the Development Assistance Committee of the OECD, which was endorsed by the G8, that we should work towards a recommendation on untying aid to the least developed countries. The intention is to propose a text to the 1999 high level meeting of the Development Assistance Committee.

My Lords, will my noble friend accept that we find that reply extremely encouraging? Has he seen the analysis which indicates that if all OECD donors were to untie their aid, that would amount to an increase in value of the total aid programme of some £2.5 billion? Is the Minister aware that there are good indications that if there were a general untying of aid there could be considerable benefits for the British economy and British jobs? Can we perhaps move ahead practically by starting with binding reciprocal agreements with like-minded governments—for example, the Netherlands—to ensure that at least we can start the process of phasing out mixed credits to follow up the move that has already been made on the aid-and-trade provision?

My Lords, as my noble friend indicates, the British Government have made some progress in ending the trade-for-aid arrangements. We are seeking as wide agreement as possible through the G8 and our partners in that group. I have seen figures indicating the benefit that would accrue were we to untie substantial amounts of aid. The UK has made more progress in that respect than many other countries. We are below the average for the OECD in terms of tied aid. We hope to make progress in that forum by the time of the 1999 high level meeting.

My Lords, I welcome the robust defence of the Secretary of State and of the noble Lord of the multilateral approach to untying aid and its repetition in the international development White Paper. This, alongside the eventual elimination of export subsidies, should have been one of the main items on the agenda of the group of industrialised nations when it met in Birmingham this May. I am sorry that greater progress was not possible. Can the Minister say when the Secretary of State will raise these matters with her German and Japanese counterparts, and whether we can expect a statement on tied aid to be included as part of Britain's EU presidency?

My Lords, these matters are being pursued from time to time in the Development Council of the EU. However, the main forum for reaching agreement is the OECD, which includes the Americans, the Japanese, the Canadians and so forth. As my main Answer indicated, it will be at the high level meeting next year that we expect the most progress to be made rather than through the EU, although we are attempting to get maximum agreement among our EU partners in this respect.

My Lords, in the light of my noble friend's answers, does he agree that if we are to be true to the commitment which the Secretary of State repeatedly emphasised—that our aid programme must be concentrated on the elimination of poverty—and if we accept that through having tied aid we may be building inconsistencies into the economies of developing countries which are compelled to purchase other than on sound market criteria, we should avoid waiting until everyone has agreed? As I asked in my earlier supplementary question, will he consider the possibility of moving ahead, with reciprocal agreements, with those governments who are prepared to do so?

My Lords, that may be an option which we can explore. However, our main effort at the moment is to try to reach agreement at the OECD. The total bilateral aid programme of the United Kingdom now is only 14 per cent., which is substantially ahead of most of the other countries that we hope to persuade to go down the same road. However, we see possibilities of extending the agreement, which has already been made in principle at the G8, to further countries and achieving a major step forward over the next 12 months in that respect.

My Lords, will the Minister take this opportunity to clarify the Secretary of State's attitude to emergency humanitarian aid? Unfortunate publicity was given to a recent speech which suggested that reaction to a public response to an emergency such as that in the Sudan was not the right approach. Does the Minister agree that for the people and the aid agencies concerned it was an emergency which had to be responded to and which could not to be caught up in longer-term aid planning?

My Lords, to some extent the remarks made by my right honourable friend the Secretary of State, and the response to them, were misrepresented in the press. The department has always supported the efforts made by NGOs in bringing urgently needed humanitarian aid to where it is required. Last week we announced a doubling of our assistance to NGOs working in southern Sudan, so our commitment is clear. The point that the Secretary of State was making was that television seems to show only negative pictures of the developing countries and, distressing though they may be, we ought to focus more on the positive aspects of development aid and the progress that is being made in terms of improving the lot of the people in developing countries, outside the crisis areas, as a result of government aid, private investment and NGOs. Notwithstanding that, we support the humanitarian appeals and should like others to support them also.

My Lords, will the noble Lord give the House some indication of whether, after due consideration of the G8 proposals, we can expect any detailed proposals from the European Commission?

My Lords, as regards the untying of aid, as my earlier answers indicated, we see the main forum for that as the OECD, which involves a wider range of donor countries. The whole question of the EU's development programme is shortly to be considered in the context of the new Lomé arrangements. Those negotiations will start shortly and there will be announcements on the progress that is made in the coming months.