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The Select Committee revisited the question of European effectiveness more recently. The report that I have mentioned was published in 1999, but the Committee subsequently considered the effectiveness of the European Union's development assistance in a progress report undertaken last year. It found that while there had been significant improvements in the policy framework, they had yet to penetrate the legal, political and policy instruments governing European programmes in developing countries.

For the first time, poverty reduction has been identified as a central objective of development programmes. Improved communication between the directorates of the European Commission, the simplification of procedures and longer planning horizons are all part of the reform process that is being put in place by Commissioner Patten. One of the most radical new ideas is deconcentration—a word that, like all European jargon, needs unpacking. It is used to describe the process of delegating authority and staff to Commission offices overseas. However, it has given rise to concern among NGOs that they in turn will have to increase their numbers of staff in the field, which will present an additional administrative cost that they are reluctant to bear.

We welcome all those initiatives for reform, but we recognise the Select Committee's assertion in its progress report that it may be several years before we see significant improvement. We advocate that, during that time, we should not entrust the European Union with a greater share of our multilateral development assistance. Let the Commission demonstrate that it can do a better job with the money that we already give it. In that regard, we were surprised to learn this week of the Secretary of State's decision to allow £120 million of reconstruction aid for Afghanistan to be channelled through the EU. For someone who described the EU as the

that looks like a Damascene conversion.

In answer to a written question tabled by my hon. Friend the Member for Surrey Heath (Mr. Hawkins), the Secretary of State said only on Monday that she remained concerned that even NGOs were being kept waiting for payment for work they had completed for the European Union. She said that delays

It seems even more strange that she is willing to give the EU more money to play with.

Tony Cunningham: For clarification, are we talking about the European development fund, the European

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Parliament's development committee budget, which is about 2.8 billion euro, or the European Community Humanitarian Office's humanitarian aid budget?

Mrs. Spelman: I am talking about the decision taken by the Secretary of State at this week's Tokyo conference in respect of reconstruction money. Rather than being given bilaterally and directly by Britain to Afghanistan over the next five years, a significant proportion is to be channelled through the European Union's collective effort for reconstruction. I am sure that the hon. Gentleman will understand that it is difficult to comprehend why the Secretary of State has taken that decision, given the reservations that she expressed as recently as Monday, when she said in the written answer to which I have referred that she remained concerned about the way in which the European Union treats NGOs that undertake work on its behalf, but which they must initially fund themselves. Some of them are kept waiting for their money for as long as 18 months. I am sure that British donors would be anxious to know that the money that they raise or donate directly for humanitarian purposes may yet have to be used by some of these aid agencies to pay bank loans while they are waiting to be paid by the European Union for the work that they have completed. That is an untenable situation.

Hugh Bayley: I think that the hon. Lady is mistaken on that point. What happened in Tokyo is that Britain pledged money from its DFID resources: £200 million for the reconstruction of Afghanistan. The European Union has pledged additional money for that purpose from its budget, to which we contribute. It is not that our Secretary of State has decided to channel some of her money through the EU—it is an EU decision. The reason why the EU has pledged so much is that we are there saying that this is an important priority and money is then pledged by other EU member states. Surely she would support the policy.

Mrs. Spelman: The Minister may well be able to clarify the situation. As the Secretary of State has not yet returned from Tokyo, it is difficult for us to be absolutely clear about what she has and has not pledged to do. On Monday, press reports stated explicitly that £120 million of the total sum that the British Government have decided to allocate to the reconstruction of Afghanistan will be channelled through the European Union. That is what is causing disquiet among Opposition Members. We are not satisfied that the European Union makes the best fist of disbursing the money that it already receives from our Government and we are extremely uncomfortable about the prospect of more being given for the same purpose.

Hugh Bayley: I share the hon. Lady's concern about the need for the European Union to improve the efficiency and effectiveness of its distribution of development assistance, but I do not believe that we should renationalise such assistance and allow all other member states to do so. In other words, I do not believe that we should take development assistance away from the EU. Is she suggesting that EU member states should stop channelling money through the EU or not?

Mrs. Spelman: For the benefit of the hon. Gentleman, who for some reason may not have been listening to what

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I said about five minutes ago, I shall re-read the relevant section of my speech. I said that I should point out that the Conservatives recognise the value of multilateral aid, and that we do not think that Britain should act alone on international development. I do not think that I could be more explicit. There is no question of repatriating multilateral aid. We would like only to be satisfied that the taxpayers' money that is given in that way is used efficiently and effectively. The Select Committee report decided pretty definitely that it is not used in such a way and that substantial improvements could be made.

In good faith, we believe that Commissioner Patten is doing his best to achieve reform. However, the Select Committee progress report indicated that progress was extremely slow. My meeting with Commissioner Patten a few days before Christmas confirmed that there was no small frustration on his part about the slow progress of reform, for which there are two principal reasons. The Cresson affair and past fraud sullied the reputation of the European Commission. That led to the introduction of procedures that require no less than 22 different signatures on each individual project. I saw the files sitting on Commissioner Patten's desk. As he pointed out, with the best will in the world, getting 22 different people to sign an individual project causes a certain amount of delay. Surely, it is not beyond the wit of man to design a reform that is strong in cracking down on any possibility of fraud and financially rigorous, but does not cause disproportionate delay. The Opposition would certainly like to see such reform. We remain concerned that progress is so slow and believe that we should not be increasing the aid that we provide in such a way.

Dr. Tonge: I, too, am confused about what the hon. Lady is saying. Is she suggesting that we should suspend all our contributions via the European Union until it is more efficient at disbursing the money? If not, what is her argument? If she does not believe that, surely she is saying that we should carry on making our contributions through the European Union, despite the fact that she is worried. I do not understand what she is saying.

Mrs. Spelman: I hope that you, Mr. Deputy Speaker, understand what I am saying. For the sake of clarity—this is the third time that I have spelled out this point—let me say that we accept the giving of British aid multilaterally and the purpose of doing so. However, we think that it is responsible for both the Opposition and the Government to satisfy themselves that that aid is given efficiently and effectively. Plenty of evidence from the Select Committee report shows that that has not been done as efficiently and effectively as the Committee would like, and I add my name to that sentiment.

Earlier, I specifically stated that we accepted the need for continued multilateral aid. However, we do not support an increase in such provision through the European Union until significant progress has been made on the reforms. The Secretary of State has not yet been able to return to the House to make a statement on the precise decisions that she has made at the Tokyo conference. However, we are disquieted by press reports, which are perhaps misleading. They led those of us who have to depend on them as a source of information to believe that it has been decided to channel £120 million of British taxpayers' money for the reconstruction of

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Afghanistan through the EU. Perhaps the Minister can confirm whether that is the case. I am sure that I am not alone in experiencing disquiet about that.

The Bill aims to ensure that aid is spent to reduce poverty and not primarily for political reasons. Yet a proportion of UK development money to Europe is spent on pre-accession aid to enable countries in central and eastern Europe to join the EU. We support enlargement, but the requirement always to consider whether aid disbursed by the EU focuses on poverty reduction is fair.

The new clause is not intended to stop the UK providing funds to the EU aid budget. I hope that that is explicitly clear for the benefit of those who failed to understand that the first time that I said it. The Secretary of State may believe that, for all its flaws, the European aid budget has the required poverty focus. Some of the bodies that we fund heavily do not share our view of the way in which development money should be spent.

The new clause is in the spirit of the Bill. It would extend the high standards that we expect from our bilateral expenditure to multilateral expenditure. It is a reasonable amendment that contradicts nothing in the Bill. I hope that everyone who believes that our budget should be used to reduce poverty in the developing world will support it.

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