International Aid

– in the House of Lords at 2:30 pm on 14th June 2004.

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Photo of Baroness Whitaker Baroness Whitaker Labour 2:30 pm, 14th June 2004

asked Her Majesty's Government:

Whether they have plans to increase their international aid budget.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, UK development aid has doubled since 1997. It has risen from £2 billion to more than £4 billion and will increase from 0.26 per cent of gross national income in 1997 to 0.4 per cent by the end of the current spending round in 2006—the highest level since 1981. This will be higher than the EU target average for member states of 0.39 per cent. In addition, as the Chancellor announced in the Budget, the Government will not cut aid in the next spending round, but will continue to increase the resources that we provide to the world's poorest countries.

Photo of Baroness Whitaker Baroness Whitaker Labour

My Lords, I thank my noble friend for that Answer, on which, indeed, I congratulate him. But does he agree that although, due to our right honourable friend the Chancellor's achievements, Britain has the strongest economy in Europe, many other countries in Europe are ahead of us in that they have either reached, or found timetables for reaching, 0.7 per cent of GNI, which was agreed 34 years ago? Will he undertake to set a timetable to reach the agreed goal in the next Parliament, as the report of the All-Party Group on Africa asks?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, I gave the figures for the existing spending round and I gave an indication, which is rather unusual, of the Chancellor's intentions for the next spending round. It would be difficult to go further than that, but I point out to my noble friend that the 0.7 per cent target, even if it were pursued by everyone, would not deliver the resources for the millennium development goals that the United Nations said would be necessary and which would require, it says, £50 billion a year. The Government have set up the international finance facility to bridge the gap between pledges and the millennium development goals. That is a more realistic and helpful target than setting a timetable.

Photo of Baroness Rawlings Baroness Rawlings Shadow Minister, International Affairs

My Lords, following the debate last week on the DfID annual report, when the Minister's noble friend ran out of time to answer all of the questions raised, could I press the Minister on one of those unanswered questions? We note with interest that DfID is involved in a 100 million dollar loan to provide schooling for 2.4 million children in China. Will that amount grow? Perhaps the Minister could enlighten the House on the reasoning behind a loan to support education in one of the fastest growing economies in the world.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, I do not think that the criterion for aid should be, or is, whether a country has a fast growing economy. By World Bank definitions, China, like India, for example, is a low income economy and a feature of our policy has been to give a high proportion of our aid to low income economies. That applies to China as well.

Photo of Baroness Northover Baroness Northover Shadow Minister, International Development, Liberal Democrat Lords Spokesperson (International Development)

My Lords, is the Minister aware that £544 million has been pledged to the reconstruction of Iraq up to March 2006? Does the noble Lord feel that it is right that DfID should carry so much of the burden of that policy? What will he do to ensure that the poorest people in the world do not lose out as a result?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, I must say, first, that Iraq is a low income economy. I know that that should not be the case—it has all the resources; gross mismanagement and bad government over many years are to blame. However, I assure the noble Baroness that the money going to Iraq is not taken from the rest of the DfID budget—90 per cent of which will go to the poorest countries by 2006.

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

My Lords, is there any positive news about defeating corruption? One of the Government's aims has been to see that money really reaches those poor people. Has there been any real progress in that respect?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, that is a huge problem and is the reason why the Government, to some obloquy, did not agree with those who argued that we should be cancelling all the debts of the heavily indebted poorest countries immediately. It would not be a proper use of the money if it fuelled corruption or conflict, but we are doing much work in countries such as Sierra Leone to ensure that corruption is reduced. Money is available if corruption is reduced and if we are sure that the help will reach those people who really need it.

Photo of Lord Dholakia Lord Dholakia Shadow Minister, Home Affairs, Party Chair, Liberal Democrats

My Lords, as the Minister said, in his reply to my noble friend Lady Northover that the money would be taken out of DfID's budget, will he confirm that there will be no adverse impact on DfID's budget?

Photo of Baroness Whitaker Baroness Whitaker Labour

My Lords, my noble friend said that the International Financing Facility was a better means of increasing aid for the world than the target of 0.7 per cent. However, as he said that at 0.7 per cent there was not enough to reach the millennium development goals, will he not agree that we need both the IFF and the target of 0.7 per cent?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

No, my Lords, there is a failure of logic there. We are saying that in both the current and next spending rounds we will make significant increases in our overseas aid. That is the way in which we run our finances and we do not make particularly long-term commitments. Combining that with the Chancellor's initiative—the international finance facility, which was largely his idea—bridging the gap between the pledges and the millennium development goals and doing that with the aid of the international financial community, is the right way to proceed.

Photo of Lord Avebury Lord Avebury Shadow Minister, Foreign & Commonwealth Affairs

My Lords, the Minister acknowledged that more resources would be available for development if we could stamp out corruption. What progress has been made on the Prime Minister's initiative: the extractive industry's transparency initiative? How many countries have signed up to that?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, I do not have that figure on the tip of my tongue. I will write to the noble Lord, Lord Avebury, about it. I apologise.