EU: Budget

Baroness Northover Excerpts

Thursday 17th January 2013 Lords Chamber

[Lord McConnell of Glenscorrodale]

To ask Her Majesty’s Government what position they will take on the European Development Fund and other European Union aid budgets in the current negotiations on future European Union funding.

[Baroness Northover]

My Lords, the UK’s top priority in negotiations for the EU budget for 2014-20 is budgetary restraint. We oppose increases beyond inflation in any area of EU expenditure, including the European Development Fund. However, it is important at least to maintain or increase the proportion of official development assistance within restrained EDF and overall EU budgets.

[Lord McConnell of Glenscorrodale]

I thank the Minister for her Answer. It would be an absolute scandal if those who lived in the poorest countries in the world were made to pay for the deficits that exist in the richest part of the world. In addition, will the Government address this technical point? Any reductions in the EU aid budget will simply have to be made up again in the national aid budgets of the member states. In the United Kingdom, where we have agreed to meet the 0.7% international target, that will mean that any reduction in the EU aid budget is simply transferred to the DfID budget because the EU aid budget contributes to that 0.7% target. The only countries that will benefit from a reduction in the EU aid budget will be those that wish to reduce their aid contributions by the back door and do not replace that money in their national budgets. Will the Government look again at this issue and ensure that the EU aid budget is preserved so that those countries that wish to reduce their aid contributions by the back door are not allowed to do so, and ensure that we make a contribution to that multilateral development assistance?

[Baroness Northover]

I thank the noble Lord for his question. He is well aware that the United Kingdom is increasing its own spending because it recognises the importance of supporting the poorest in the world, even when we are in financial difficulties. As far as the EDF and the EU budget are concerned, we scrutinise them very carefully for their poverty focus. We are encouraged by the direction they are heading in, so perhaps I can reassure the noble Lord in that regard. However, we will continue to keep up the pressure, as it needs to be poverty-focused. I point out that we are fifth in the league, as it were, in terms of ODA in the EU, behind Sweden, Luxembourg, Denmark and the Netherlands, all of which have gone beyond the 0.7%. The evidence is not quite as he indicated in terms of other countries. For example, there are increases from Germany, Italy and Sweden, so the picture here is not quite as he portrays it.

[Lord Chidgey]

Is my noble friend aware that the European Court of Auditors has just reported on its study of 48 EDF schemes—road transport programmes totalling over something like 2,500 kilometres—in the Sahel? It shows that, while it is by far the European Commission’s financially most important sector, it has been only partially effective in promoting policy reform that would ensure the sustainability of this massive road infrastructure investment. What is the Government’s response to the court’s recommendations that the European Commission should better focus European Development Fund resources and make better use of the conditions that it attaches to the programmes?

[Baroness Northover]

This report was published a couple of days ago, on Tuesday. DfID will produce a considered response, which will be scrutinised by Parliament. It is worth flagging up that, as my noble friend rightly points out, this looks at aid since 1995 in terms of road building and at whether the balance between road maintenance and road building has been sustained as it should have been. In the United Kingdom we know that when you are in constrained financial circumstances a balance must be struck between those two areas. I am sure that we can learn many lessons; nevertheless, it is not as though the balance between those issues is not also felt in other countries.

[Lord Pearson of Rannoch]

My Lords—

[Baroness Kinnock of Holyhead]

My Lords, is the Minister aware that if current proposals made by the President of the European Council to freeze the levels of spending on EU development aid are implemented, aid will suffer a larger reduction than absolutely any other area of the EU budget and that the UK will see a decrease in its current contribution to the European Development Fund? These are two very important factors. Would it not be perverse if the effect of a commendably ring-fenced UK development budget was diminished by a huge 11% cut in the EU development budget?

[Baroness Northover]

As I said to the noble Baroness’s noble friend, the noble Lord, Lord McConnell, the EDF has clearly been a very effective measure in this regard. DfID is extremely keen to make sure that that is protected and that the EU’s aid contributions are poverty-focused. Within the EU budget there is clearly also a focus on near neighbours. We need only look at what has happened across the Middle East and north Africa to see how the security, stability and economic progress of those near neighbours are important. The new accession countries are also important. However, we are keenly aware of the importance of the EDF and its poverty focus, and we are seeking to increase its focus on the poorest.

[Lord Collins of Highbury]

My Lords—

--- Later in debate ---

[Lord Pearson of Rannoch]

My Lords, I am grateful to the noble Lord. Do the Government agree with the think tank, Open Europe, that only 46% of EU aid reaches really poor countries compared with 74% of our own aid? Have the Government worked out the cost of churning our aid through Brussels? Are we really incapable of controlling it all ourselves?

[Baroness Northover]

I have just given an answer saying that the EDF is very poverty-focused. What the EU is doing is looking somewhat wider, but that is a worthwhile project as well.

[Lord Collins of Highbury]

My Lords, DfID’s own multilateral aid review published in March last year rated the European Development Fund and ECHO among the top performers. It also identified clear reform priorities in order to demonstrate results and deliver greater value for money from the UK aid that is channelled through the EU. Can the Minister provide an update of the department’s assessment of the EU’s progress on achieving those reforms?

[Baroness Northover]

DfID is closely engaged in this area and I have met Commissioner Piebalgs a number of times. We are sure that they are heading in the right direction.