Leading Article: Aid, trade and Great Britain plc

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BOTH Westminster and Whitehall seem split over the rationale behind Britain's aid policy. On one side are humanitarians such as Baroness Chalker, Minister for Overseas Development, who accept that it is meant to help poor people. On the other are those ministers whose ears are bent by businessmen and arms dealers. Some of these politicians seem to believe that the aid budget is, at least in part, a slush fund for greasing the palms of those abroad who might buy British weapons or whatever else our industry can offer them. In other words, they subscribe to the mistaken view that what is good for Great Britain plc is aid money well spent.

The Malaysian dam scandal demonstrates the ascendancy of those who would corrupt British aid policy. The fact that the dam is uneconomic and that it will not help the poor did not sway them. They were happy to promote Britain's largest single aid project on the grounds that it clinched a massive arms deal.

There were voices of dissent. Baroness Chalker had her doubts, as she made clear during yesterday's hearing before the Commons Foreign Affairs Select Committee. She has distinguished herself as an advocate of aid focused on the poorest countries. But her voice - and that of her officials - was drowned out by gung-ho ministers more interested in an arms deal.

It might be expected that exposure of the decision to fund the Pergau project would have humbled the perverters of British aid policy. Far from it. As reported today, there is pressure to shift some aid-granting powers away from the Overseas Development Administration to the Department of Trade and Industry. It is not difficult to see how this would make it easier in future to abuse the aid budget. DTI officials and ministers are more likely to turn a blind eye than are conscience-ridden civil servants at the ODA.

Baroness Chalker has fought her corner in the past. A rule change announced by the ODA last June means that Malaysia would in future be judged too wealthy for a Pergau-style project. The ODA plans to concentrate such aid on some of the 61 countries where per capita income is below pounds 450 a year. Unfortunately, principle at the ODA can too easily be out-gunned by other ministries.

Parliament should intervene in this battle and pass legislation requiring a clear separation of export subsidies and aid. Subsidising British trade is not necessarily wrong. But support must be transparent and should not be made at the expense of people in the world's poorest countries.