Treaty of Lisbon (No. 6) — [6th Allotted Day]

Part of Business of the House (Lisbon Treaty) (No. 5) – in the House of Commons at 5:42 pm on 25th February 2008.

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Photo of Gary Streeter Gary Streeter Conservative, South West Devon 5:42 pm, 25th February 2008

The hon. Gentleman anticipates my second point, which is that of course enlargement has natural limitations. We can count the number of countries that we know could fit comfortably in the European Union. Of course, enlargement must happen at a pace that the whole enterprise can cope with, but it is membership and the journey towards membership that brings the benefits. My thesis is that when the EU starts to undertake a different kind of development—external development—it does not do it very well. That triggers a debate on whether it should do it at all, in the way that it is trying to do it, or whether external development is better left to member states or other agencies. If I have time, I hope to develop those thoughts.

Putting aside the great success of enlargement, my observation is that the performance of EU development over the past decade or two has been woeful. We have considered statistics on the performance of the EU. In the three years in which I shadowed Clare Short, then Secretary of State for International Development, there were a number of international humanitarian crises and disasters. On every single occasion, the aid that DFID was able to provide was immediate, proportionate, relevant and helpful, but the assistance that I saw ECHO try to provide was nearly always far too late, was bureaucratic, did not work or did not arrive. There was a huge gap between the assistance that the UK could provide in a humanitarian crisis, and what the EU was able to deliver.

I do not want to taunt Labour Members, but we used to say that they did not understand the difference between spending money and making an impact on the ground. I am sure that they would deny that that is the case now, if it ever was—Members might have their own observations to make on the subject—but there is a huge difference between the EU spending money on development, aid and assistance and making an impact on the ground. Having visited various parts of the world, I have not seen the impact that the combined dollar spend and the euro spend by the EU should have made. We have heard that the focus is on the wrong countries, and that can be demonstrated with a startling statistic: 81 per cent. of the UK aid budget goes to the lowest-income countries, as we heard earlier, but the proportion of the EU institutions' budget that does so is 32 per cent.

It is not just that the EU has spent money in the wrong places, but that, as I said, it has tended to spend money slowly and bureaucratically. A number of international NGOs are desperate for finance for projects, and often come to us to discuss those things. Someone may suggest, "Why not apply to the EU for some money?" and the reaction is nearly always: "It's just too complicated. It's too long-winded, we never get there, and it's just not worth it." Interestingly, DFID looked into what was going wrong with EU aid some years ago, and it found out that some of the delays were due to

"the inner workings of a Byzantine bureaucracy with a procedure-driven ethos."

A study by the European Commission itself found that 40 per cent. of delays to aid projects were due to

"the administrative processes of the EU".

Only 25 per cent. were due to administrative problems in the developing countries that received the aid.

Some 35 per cent. of aid from all other donors arrived on time, but for the EU, the figure was a miserable 14 per cent. On average, 3 per cent. of aid from all other donors arrived over a year late, but the EU has managed over the past 10 years to hit a staggering figure of 21 per cent. What is the point of DFID giving the EU £1 billion a year if it helps to fund such a bureaucratic, slow and unfocused performance? That is not the only problem. DFID has reported that it spends 5 per cent. of its total budget on administration. The EU has various development budgets and departments—we know that it is complicated—and it has a much larger budget, so the percentage spend on administration should be lower, but in fact, the administrative cost is 8.7 per cent., which is a huge amount of money.

EU aid is not effective in far too many cases, and it is right to conclude that EU development aid and the institutions that seek to deliver it are often not fit for purpose. That is not to say that everything they do is bad or wrong, but the disadvantages and disbenefits outweigh the benefits. What is the solution? I am not an isolationist—I do not want us to withdraw from active involvement in the European Union—but there is a case for one of two alternatives. It is disappointing that in the run-up to the Lisbon treaty those alternatives were not more actively pursued by the Government. First, there is a case for bringing more of the spend back to the member states so that we can spend it more effectively. We should not spend it on other things, but we can spend it more effectively on bilateral aid, where needed, around the world. The fact that some countries do not have much of a bilateral aid programme does not undermine the general thesis that the United Kingdom and many other countries, including Germany and France, have significant bilateral aid programmes, and the money would be better spent that way than by pushing it through the EU's coffers, where much of it is wasted and misplaced.

The first point that should have been more actively discussed in the run-up to the Lisbon treaty is that member states should have more control of the way in which that money is spent. Secondly, the Government should consider the fact that the US spends most of its aid money through USAID—the United States Agency for International Development—which is independent. If I am right that the EU institutions and aid departments are not fit for purpose, what is wrong with the prospect of setting up a new EU international aid agency? It should be semi-detached, not lost in the corridors of that astonishing bureaucracy in Brussels, and it should operate as something through which the EU can channel its aid. It would be a multilateral effort, but it would be done in a more effective and focused way.

I know that the Minister is concerned about some of the EU's decisions on its development budget, so will he say in his winding-up speech how much longer the Government will wait for the EU to improve its performance before taking a more radical approach? The Prime Minister made an important speech in India just before Christmas—it may have been just after Christmas; I am not entirely sure—in which he discussed the importance in the globalising world of the 21st century of multilateral organisations. I agree with him. We are living in a time of interdependence and globalisation, and we need to tackle some of our problems in collaboration with other states and multilateral organisations. He mentioned in particular the UN, the World Trade Organisation and the World Bank. Interestingly, he did not mention the EU. The problem with the multilateral approach is that it works only if those organisations are properly organised and deliver what they intend to deliver. My theory is that the EU does not do so, so it is time for a rethink.

Finally, the aid agenda is changing rapidly, and rightly so. If one goes to almost any African country and asks people what is the biggest problem in their country, they hardly ever say that it is poverty—they say it is corruption, which at every level is endemic to those societies. There is corruption in government, and corruption throughout civil society. We need to focus more on the democratic capacity of institutions in those countries, and bring to them values and benefits that we enjoy in this country and take for granted. Our aid and development focus should underpin and promote such values in every country that is open to receiving that message. The UK can play an important role by working to develop democratic institutions, whether through the rule of law or by helping political parties to become stronger and make a more coherent case for running their country more appropriately. The work by the Westminster Foundation for Democracy and party-to-party work are incredibly important. I remember attending a conference on democracy in Istanbul about two years ago, and the NGOs and some of the bureaucrats seemed to assume that one could do democracy without politicians. We cannot: we need people who are prepared to put their head above the parapet.

The EU is not well placed to promote democratic values. It certainly cannot promote party politics and underpin the important role that parties and politicians play in the developing world. If I am right that we need a greater focus, not a lesser one, on governance and democratic issues, the EU is not the institution to provide such a focus. It should let the member states spend that money more wisely, or set up a new agency that can do so effectively.