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8 p.m.

Lord Desai: My Lords, we have been debating the Queen's Speech since three o'clock and we have heard some fascinating speeches. We have also heard two excellent maiden speeches. I enjoyed in particular the speech of the noble Baroness, Lady Rawlings, who was able to interconnect issues of heritage, identity and foreign affairs.

Foreign affairs, overseas development and defence are intimately interconnected. They are not separate, as was implied by the noble Lord, Lord Mayhew. Interconnections are sometimes virtuous and sometimes vicious and I wish to point out some examples. In many parts of the world, human rights, humanitarian assistance, development and armaments interconnect either to create or to solve problems. We know that a number of countries have had to ask for humanitarian assistance from the United Nations. Those countries have suffered enormous problems of poverty and discrimination on the grounds of ethnicity or tribal differences. No matter how poor in terms of per capita income, some regimes have found the means to buy large amounts of armaments. Indeed, some of the governments providing humanitarian assistance have also sold them armaments.

Perhaps I may also point out one or two virtues of interconnections. In our recent debate on the defence estimates, it was agreed that one of the welcome aspects of the UK defence policy has been the steady reduction of the share of defence in our budget and GDP. I welcome that; it has been carefully done. However, I should like to see some of the peace dividend directed into overseas aid. We always complain that there is not enough money and that there are other things to do, but

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in terms of our GDP and the need that exists we give too little to overseas aid. As was urged by the Human Development Report of 1994, it would be desirable to have some of the peace dividend directed to the urgent issues of development.

In that respect, the peace dividend should come not only from the developed countries of the West but from the developing countries. One of the principles that should guide us in giving aid is to ask whether the countries are using their resources successfully. For example, are they spending more money on defence while cutting their social welfare expenditures? We should also ask whether there are more soldiers than teachers in those countries and, if so, why should they receive aid.

The right reverend Prelate the Bishop of Worcester, who is no longer in the Chamber, commented on structural adjustment and the role of the World Bank in that. Many people blame the World Bank, but some structural adjustments have been virtuous and countries have protected their social welfare programmes and adjusted. There have also been structural adjustment programmes for which countries have seen fit to blame the World Bank or the IMF. Those countries have continued in their bad habits and visited the costs of structural adjustments on the poor.

We can no longer take the view that the Third World is passive, exploited and somehow innocent; that all evil comes from here and goes there. We must carefully differentiate within the third world. Some countries are newly industrialising and rapidly developing. Indeed, some are prospering so much that they hold out large potential markets to us. If a large contract is to be given for defence purposes it is easy not only for the UK but for other countries to forget or to suspend the issue of human rights. Indeed, often the left hand does not know what the right hand is doing--it certainly does not admit that it does.

I have the greatest respect for the noble Baroness, Lady Chalker. However, I thought she was a little too casual in denying any connection between our defence sales and development. We must make up our minds about this matter once and for all. We must say either, "Yes, there is a connection. So what! We are creating jobs"; or, if there is no connection, we must be scrupulous in providing full and complete evidence of that. The noble Baroness referred to a lack of pattern and correlation.

A single instance of interconnection between defence and development if it is not intended by us should be censured. In that respect, I recall the previous occasion on which we discussed the Pergau dam, thanks to the efforts of the noble Lord, Lord Redesdale. The noble Lord, Lord Prior, spoke in that debate and declared an interest as being involved with GEC in Malaysia and a former Cabinet Minister. He said:

    "What are the facts? I shall try to give them as I see and know them. First, Malaysia indicated that it wished to place large defence orders with Britain of about £1 billion, which it would pay in cash. In fact, the orders have amounted to about £1.5 billion and the Malaysians have paid in cash. Quite understandably, Malaysia said at the same time, 'If we place this order with you, will you aid us in a major project that we badly need?'. It is not surprising that the Malaysians asked for that and it is not surprising that the British

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    Government said, 'Yes, we'll give you some aid'. If there was a 'tangle', to use the Foreign Secretary's words, about whether the two issues were contingent upon each other, it is a perfectly legitimate and reasonable cause for inquiry by the press and Opposition".--[Official Report, 2/3/94; col. 1039.]

The inquiry was made. If the noble Lord, Lord Prior, said that he knew that such an interconnection existed, why was something not done about that? When the noble Baroness, Lady Chalker, summed up the debate, she referred to the speech but she did not deny what the noble Lord, Lord Prior, said.

The noble Viscount, Lord Weir, who spoke in the same debate said:

    "Our aid budget is puny compared to the problems of the less-developed world, and there is little chance of it being increased; our balance of trade is horrible; our unemployment is high and much of industry is working below capacity; and, finally, the competition for international business is fierce".
He ended by saying:

    "Frankly our economic circumstances today are such that, sadly, I believe we can only really afford such forms of economic aid as give our industry some measure of benefit in return".--[Official Report, 2/3/94; col. 1047.]

That is fine. I do not mind that. Let the DTI do that. I am not against giving subsidies to British industry because that may create jobs but let us not pretend that that is being done for some purpose other than giving development aid.

The Government should be clear in their mind, if not in public, as to what is the purpose of the aid. It is no good saying that it is only 10 per cent. of our budget. It is not a question of size but a question of principle and we must be clear about it.

Some noble Lords have mentioned Indonesia. Perhaps there is no connection; who knows? We shall have to wait until another NGO takes a case to the High Court before we find out because there is no other way in which to do so. Whether or not there is a connection, I am concerned about the current human rights violations in Indonesia. I should like to mention in particular the fate of a fellow academic, Dr. Aditjondro, who has been threatened with arrest by the Government because he pointed out that a number of newspapers were suppressed and that a number of NGO workers had been threatened with arrest just before the recent APEC conference in Indonesia. I urge the Government to protest against such human rights violations. Again, there is no quid pro quo. It is a matter of principle. But we must make it extremely clear that human rights violations should not be tolerated.

The question of European integration and the expansion of European markets is not just a problem of European foreign policy; it is a problem of development policy, especially the reform of the common agricultural policy. I agree with the noble Lord, Lord Cockfield, who knows more about that than any of us. It may be that in 1996 we shall not be able to make any new initiatives with regard to policy, but the agricultural policy reform process, which has already started, should be strengthened and accelerated.

The CAP is a great drag on third world agriculture. It not only harms us, it harms the world at large. It was extremely shocking that the GATT negotiations were held up before they were completed in order to gain a

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concession with regard to the dumping of agricultural exports that France regularly undertakes. In order to accommodate that dumping we had to make special concessions within the common agricultural policy. Such interconnections--what I call the vicious interconnections--between foreign policy development and humanitarian assistance should be warned against.

Finally, I was fascinated by the speech of the noble Viscount, Lord Waverley. I have always thought that I should never speak on Kashmir unless I could speak for at least five hours because it is a vast subject and I know quite a lot about it. I should point out that the problem did not start in 1947. It started long before that and is connected with a rather arcane doctrine of paramountcy which we had during the time of the empire. That made the status of native kingdoms rather peculiar. Of the many native kingdoms which signed up with Pakistan or India, only Kashmir was an exception and that was connected with that problem of paramountcy before and after independence.

I should say to the noble Viscount that, as he pointed out although he did not follow his own advice, it is not helpful to go back over the history of such cases. In such cases history is an obstacle rather than a help to solving the problem. We have had the Irish problem for a long, long time and it is still not solved. When Americans tell us how to solve the problem, we do not like that. I do not believe that India and Pakistan would like somebody from outside telling them how to solve their problem.

I believe that the Kashmir problem will be tackled when the people within India and Pakistan, people in a civilised society, rise up and say, "We do not like our countries doing those things to the people who are, after all, our brother citizens". That is the one hope that I have with regard to Kashmir.

This has been a fascinating debate which I have enjoyed greatly.

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