Select Committee on International Development Minutes of Evidence

Examination of Witnesses (Questions 260 - 274)



Hugh Bayley

  260. There are really two final points. You have covered the field well. You said that you do not have a strong view one way or the other on whether the EDF should be brought within the budget. A cynic might say, that's because you are on the Council of Ministers so you can have a say over it, but the Parliament does not. Now, do you see the Parliament as an ally, generally speaking, with regard to getting a tougher, sharper poverty focus for the developing world and, if so, would it not be a good idea to give the Parliament the ability to scrutinise the EDF?
  (Clare Short) On the first question, it is not a cynical position about excluding the Parliament. People argue about it very passionately and when Rosemary Stevenson was doing Anthony's job, I asked her to do an assessment and I think we could share that note with you, so there are both, "Is it desirable?" and "Is it politically going to happen?" questions. If the UK changes its view, if others will not, then it is worth debating, but it is not going to lead to any change. I think there is an argument about desirability and it is very unlikely in the short term. I think Germany is adamantly against, though I am speaking from memory. I think we should share the note with you because also it is a complex issue and what is this funny phrase? You will know, Ann, because of your time in the Parliament. There is some funny word. "Comitology" comes into this.

  Ann Clwyd: It was not there when I was there.

Chris McCafferty

  261. What does it mean?
  (Clare Short) It is in this note. People have passionate arguments about comitology which is all part of this, but the short answer to your question is that the Parliament has not been an ally. The Parliament has got geographical blocs that tend to speak to the geographical bloc pressures of the Commission and the progressives within the Parliament have tended to go for a budget line for NGOs, for HIV/AIDS, and of course one understands that, but that is just even more complexity of little amounts of money and not getting any reform in the fundamental money. So we are working on it. It is not sort of bad faith so much as the debate has never been deep enough and there has not been an alliance of Members of the European Parliament who have attended to this argument in depth and got behind a reform agenda. That is what we need and we have been trying to work on it, but we are not there yet by any means.

Hugh Bayley

  262. Can I just add one thing. I think we would find it very helpful to see the note to understand the pros and cons from a variety of perspectives[4]. We have been told that the ACP countries themselves are concerned about the prospect of budgetisation. I do not know if your note covers that, but if it does not, could we have a further note on that? I suppose the question that that poses would be a fear that if all the EU development spend was put into a single pool, maybe even more money would be robbed from programmes in poor countries, so is that a danger?

  (Clare Short) I think there is no imminent proposal that it will be, so it is not a danger to which I have addressed myself. On the ACP countries, you will know that Cotonou also has a sort of political layer and there are big meetings of ACP ambassadors in Brussels and you have periodic meetings—we went to that one in Barbados—and it is said that this makes the development relationship more equal and it is good to have a political process and I think in theory that is true. In practice, I do not think the processes are very impressive or lead to better deployment of aid, but many ACP countries are very attached to those political processes and I think would be hostile to a suggestion of budgetising that took away their political input. Certainly, to be fair to the political process, when we were renegotiating the Lomé into Cotonou and trying to get some reform and commitments on trade, it was important that the ACP countries were at the table. They were part of the negotiation and we could not change the agreement without their agreement, so that cuts across the budgetisation argument, but let me let you have the note and then you will be able to decide for yourselves how you think that argument flows, but I think change is not imminent, so we need to have a reform agenda in the meantime.

Ann Clwyd

  263. We have been told about the central role of the Commission delegations in making reforms of development assistance work and other people have raised some question marks over this, whether they are adequately staffed and whether they have the skill and the expertise to carry out this role. I wonder what is your view of that.
  (Clare Short) I think my sort of anecdotal view, because deconcentration is taking time to roll through, as you know, but where there has been more discretion given to the people operating in developing countries, there has been some improvement. Obviously you get variable quality of people across the world, but in the past they could not do anything anyway. Everything was so controlled by a bureaucracy flowing back to Brussels that even when you got someone who was really progressive and wanted to deploy the money well, they just had to keep sending messages back to Brussels, which was enormously frustrating, so obviously deconcentration means that they can operate with other countries, representing their country and negotiating directly with the governments. There has been some improvement, that is my anecdotal sense of it and the feedback from our officials around the world. I do think here we need to pause and be careful. We should not make every development agency a replica of each other, but we should have some degree of specialisation between us. The EC has traditionally done lots on roads. Does everyone want them to sack all the engineers and do only health and education or if we are doing health and education and if the Scandinavians are doing health and education, could not the deconcentrated staff with some discretion, where the UK or Sweden or whatever had done a lot of work on education, put some money in, and you do not need another heap of specialists going all over it to see if it works, and then decide a bit more where the EC will concentrate its effort? I personally think they should stick with roads and improve roads. Rural roads are fantastically important to the livelihoods of rural people. Subsistence farmers will not grow more than they can eat if they cannot get everything to market. There are really good studies which show that good rural roads, and you can employ people building them, can lead to people growing more, getting their produce to market, increasing their family income, being able to get their children to school and so on. So I think it is fair to say that the EC is now employing more people because it has been enabled as part of the reforms to pay for some specialists out of the funds for development itself, but I think what we must do is decide where the niche and the expertise should be so that we have complementary bundles of skills rather than all replicating each other. There is this piggy-backing, they call it, do they not, the possibility of the discretion being at the local level and the EC delegation being able to decide to put some of the money into other reform efforts that Member States are helping to drive and know that the money will be well spent. I think we should do that too.

  264. I know your views on increasing staff numbers in the EU and that your response was, "Over my dead body!"
  (Clare Short) Because my worry then was that everything was appalling and then they say, "We need more staff to spend it better", so we were going to throw an even bigger resource away. "My dead body" has sort of emerged to life a bit behind the reform agenda and improving its ability to employ some specialists out of the funds in order to get reform because obviously you need to redeploy staff behind a reform agenda. My fear was that it was an excuse for no reform agenda and then there was just going to be a whole bunch of new staff, so it was even more having good money thrown after bad, good staff thrown after bad money.

Mr Robathan

  265. I have to say that I am delighted about the deconcentration to delegations because it is obviously sensible and the co-ordination one is also a very valuable one. What concerns me, and it comes back to what you refer to as the system being bad and, if I might put it a different way, the culture being bad in the delegations. We have seen it around the world, though I do not want to condemn every one because of course they vary, but there is a rather sleepy feeling in the offices I have been to that it is all rather difficult and actually very often people have been put there to retire comfortably. Now, this was borne out when we saw EuropeAid in Brussels two weeks ago when the chap we saw there, whose name for the moment escapes me, said that they had a lot of trouble, and I paraphrase, turfing comfortable bureaucrats out of their comfortable offices in Brussels and getting them out into the field. Do you believe that the culture will change with the system?
  (Clare Short) We talked a little bit about better management of public finances and more focus on outputs which is a challenge across the world. I think the motivation and morale of people who work in the public services is also part of quality services and it is not surprising there has been a lot of demoralised people running this poor programme with very rigid bureaucratic systems, being criticised quite reasonably because it is such a bad system, and then people who are out in country offices, when they have really tried, having no discretion, and endlessly sending messages back to Brussels and not being able to produce any effect. That is likely to demoralise the staff who work for reorganisation and I think that has been the case, and then reorganisation is always threatening, though necessary, and I am told, and I will ask Anthony to come in, that there is quite a demoralised atmosphere, but I repeat, and this is just dependent on where I travel and when I ask, that some of the deconcentrated offices are getting some live sparks who are really starting to use the discretion that they have been given and to join up with others, so I see signs of improvement. Would you comment on the broader picture?
  (Mr Smith) I think that is right. Our offices overseas have told us that of course there is variable quality and there are real problems in some countries, but there are also some very good examples of committed people out in Commission offices. I think that what they are doing with deconcentration by giving people more responsibility and discretion should encourage people, plus they are doing two other things on staffing for deconcentration. One is recruiting more development experts, and people who are committed to development and that is their career and who have not really been able to join the Commission to work with them properly before because of limitations on contracts now should be able to be employed for five years or so in a country and that will bring fresh blood. Finally, they are getting more local staff, not just drivers, but policy analysts, specialists and advisers as well, and that should also increase levels of activity and commitment.

Tony Worthington

  266. When we were in Brussels, we saw the list of offices to which there had been deconcentration. There did not seem to be a strategy about it in terms of where they said, "It's important that we do that first". For example, if I was looking at Africa, I would start with Nigeria as a big programme, big country, key to the area, but there was no sign of an office there, and yet there are a few small Francophone countries that have offices in them. Have you a view about that?
  (Clare Short) I do not know how the decisions were made. Do you?
  (Mr Smith) It was an internal Commission decision based on, I think, some assessment of where, if their programmes were employed, they could make a difference, but Kenya is one of the countries.

  267. I said Nigeria.
  (Mr Smith) I am sorry, I thought you said Nairobi. Their programme in Nigeria has actually been rather smaller, though it is growing, but—
  (Clare Short) And in danger because of course Nigeria is not reforming. We have got a democracy in Nigeria, but no reform and no improvement in the life of the poor which is partly why we are getting all this tension and conflict, so I think they are talking about budgetary aid and we need to be a bit careful that the EC money is deployed in a way which will help reform rather than prop up bad systems, so we have got that one in Nigeria. I think we should ask Poul Nielson how the countries were chosen. Pound to a penny, there were politics in it, but I cannot see the politics in that decision.

Ann Clwyd

  268. We have heard, not for the first time, that DG Development is going to disappear in a subsequent round of reforms. If it does disappear, what do you think will happen to its functions? Will they be amalgamated with DG External or what do you see happening?
  (Clare Short) I think it would be a disaster if DG Development disappeared in a round of reforms. There are also questions about councils because of course as the Union widens and we get more and more Member States, the existing structures are not going to work and there is going to have to be a lot of reform, otherwise the whole organisation will be just so blocked up, it will not be capable of making decisions, so it is quite right to look at the structures and see how they can be made more efficient. Certainly the Development Council, because it meets only twice a year, tends to have good generalised policy debates, but then the General Affairs Council meets monthly and ends up deploying the money and it is part of the problem, so there is room for a debate about whether the Development Council and the General Affairs Council ought to merge or whatever. I am not saying they should, but how can we get the development perspective more thoroughly into the month-by-month decision-making? This argument has gone on in many countries of whether you do development out of a foreign ministry or whether you have a stand-alone development department and lots of countries have experimented with different structures. My view is that it is better to be stand-alone as we are because it is not only the foreign ministry that you need to influence; it is also the trade ministry, it is also the view of your country on sustainable development, thinking about poor countries, it is also your treasury and their influence on the IMF and the World Bank, unlike in our case, so I think to get coherence and to get the development perspective into all areas of policy, you need a unit whose job it is to look at the world from the perspective of the developing countries and how you can get more equitable rules into the system. If the proposal is, and again I do not think we currently think that this is decided by any means, to get rid of DG Development and to see it all as part of broadly foreign policy, I think we would be going further down the road that we are on at the moment and getting less effective development.

Mr Colman

  269. We were very interested to see how EuropeAid was shaping up and particularly this board structure with conceptually Chris Patten as the Chair and the Chief Secretary being Poul Neilson, but then the other members of the board, you have got DG Trade, DG Monetary Affairs, Agriculture. They meet, we were told by Poul, once a week and they discuss the overall approach of the European Union in terms of poverty-focused assistance and this was a very positive way forward for assistance. Do you see a situation where this is really bearing fruit in terms of how Pascal Lamy, the Chef de Cabinet, who reaffirmed what Poul said, how Pascal Lamy is looking through, if you like, a poverty focus? Do you think this is happening with, say, DG Agriculture and is it a situation where you—
  (Clare Short) Certainly not.

  270.—are getting a move forward? Well, let's talk about the one maybe that is there which is in fact DG Trade having a very strong poverty focus. This is one of the very positive things that is coming out of setting up EuropeAid.
  (Clare Short) We did not particularly favour EuropeAid because we integrate the management of our programmes in the UK, but many others, the Scandinavians and so on, have an agency to deliver after the policy decisions are made separately, but given that it is in place, I think we strongly think we should go with it. You cannot stop in the middle of a reform effort and change your mind or you waste another couple of years. I think it is too early to say whether the fact is that all those Commissioners sit on the board percolating a development perspective through the Commission. I think it is too early to say and I do not think the evidence is strong that it is. Pascal Lamy had an interest in development before he went to the Commission when I first met him at IDS in Sussex when he was at one of the events there, so I know it was not just a theoretical interest, but he was engaged, and of course the truth is on Doha that there would not have been agreement on the Round without developing countries getting involved. That is the beauty of the WTO, that they are there now at the table and they get something or they would not agree to another trade round, so Pascal Lamy does have a commitment to development personally and that is very welcome. I do not see any signs or hints that DG Agriculture has thought about an interest in developing countries, and they have got complicated things to think about, so we will see whether it has the optimistic effect, but I think we should stick with the structure and drive it forward and try and make it work and not suddenly change it all again.

  271. Are there areas of budget lines within, say, DG Trade and other ones where in fact help is being given to developing countries where in a sense that is something which we know nothing of? For instance, it does surprise me in a sense that help for developing countries who were working at the WTO is coming out of our budget in a sense perhaps and not out of the DTI. Is there a situation within DG Trade that they are actually helping developing countries deal with, if you like, the real possibilities of globalisation working on their behalf.
  (Clare Short) No. When we moved with others, which cost a fortune, to get advice about whether the WTO Rules were being breached in their regard, we had a fantastic fight, and this was before Lamy's time, with DG Trade who said, "You can't fund developing countries to take action against us", to which we said, "We have legal aid for murderers in our country". It was a very passionate argument and they tried to block us, so you can see how far DG Trade has moved. They were absolutely opposed to the funding of the legal advisory service so that the poorest countries would have the capacity to use the WTO Rules just to get their entitlements under the rules of the system. There has been change both because there had to be change post-Seattle to get a deal at Doha and Pascal Lamy's interest and the decision that the trade part of DG Development was taken over into DG Trade. That was argued about at the time, but obviously you need the trade department to think about development and maybe it was desirable. There was agreement at Doha that there should be more commitment to capacity-building on trade and we have done quite a lot in our Department, but there has been not much of it across the world and I think there is now a commitment to put more resources into it so that countries both can negotiate their interests in the Doha Round and apply the rules to their own country and get the benefits because some of the trade rules are very complicated rules of origin and phyto-sanitary conditions. You could think you have got trade access and then you cannot get through some of those rules, so I believe it was agreed at Doha that the EC would put considerably more resources into this, but they have not been a leading player up to now.
  (Mr Smith) It goes back to the Cotonou negotiations as well where it was agreed that for ACP countries there should be a capacity-building programme, though it was a bit slow to get going.

  272. Is there any budget line within DG Trade or their budget which would actually be over and above what is available within DG Development, particularly, as you point out, there has been this transfer across to DG Trade?
  (Mr Smith) The budget lines do not belong to particular DGs.

  273. You misunderstand what I am saying. Is there new money on the horizon?
  (Mr Smith) I think that for the trade capacity-building activities which are focused on ACP countries, they come out of the European Development Fund. I think in effect the management of the programmes is conducted jointly by DG Development and DG Trade.
  (Clare Short) Under the Cotonou Agreement it was agreed that regional free trade agreements would be negotiated. I saw the pain of the negotiations of South Africa with the EU, and that is a sophisticated country with lots of capacity, so imagine some of the poorer regions of the world negotiating a trade deal with the EU and we have yet to enjoy that experience.


  274. Secretary of State, thank you very much for all your help. I think the most alarming information that you have shared with us today is the 70, 52, 38 and 70 per cent and, as you rightly say, that is actually, I must say, a naked political argument, as it were. As you have also explained, there are obviously various people within the European Union, and we heard Chris Patten yesterday and we can understand where he was coming from within his own terms of reference and you have made clear why Member States like Spain have their own agenda and indeed the complexities of the European Parliament's agenda. I think what we probably need to have is a better understanding, and I can see this cannot be done in public, of who our allies are on this, who we need to win over, what the process is for that and how we get there. We in the not too distant future are going to be doing an inquiry into the financing of the development in the run-up to Monterrey and so on and I just wonder whether in the context of that maybe at some time you could spare us some time privately in an private, informal session. I think one of the things that struck us when we went to Brussels is that it is not just a question of my getting in touch firstly with the chairmen of various committees, but I think we were very conscious that we needed to do a lot more to get in touch with colleagues in the European Parliament who often have access to other people both in the development and co-operation committees and budgetary committees, but between all of us we actually have a good range of contacts with political parties elsewhere in the European Union and so on and so forth and there may well often be opportunities which may be missed because we just do now know that we should be taking them. You do go to the councils and you know what is happening on the General Affairs Council and so on and so forth, so if we could just request some of your time privately some time, and I can see it is not something one can say publicly as to who is unco-operative, difficult and so on, so thank you for that in anticipation and thank you for introducing us to the joys of comitology which I think is a new source of potential study for this Committee.

  (Clare Short) Thank you. Could I just say I would be delighted to have that meeting, but I think in financing for development, finance ministers become potential allies and they would come at it differently. The study said that EC spending could be 50 per cent more effective in poverty reduction affairs if it was deployed differently, so they should be our allies.

  Chairman: And we are hoping to get the Chancellor to give evidence to us, but it just seemed an absolutely convenient opportunity of taking some of your time. Thank you very much.

4   Not printed. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 23 April 2002