The British Government has denied making a link between its aid policy for India and trade with the country.
“All UK aid, including in India, is untied from UK commercial interests,” Mr Andrew Mitchell MP, UK Secretary of State for International Development, said in response to a query from Business Line . “Our completely revamped programme is in India's and Britain's national interest and is a small part of a much wider relationship between our two countries.”
Under pressure
Mr Mitchell has faced pressure to explain his position, following comments made on a trip to India last year, where he appeared to suggest there was a link between British aid policy and trade relations between the two countries, including the Eurofighter contract.
“The focus is also about seeking to sell Typhoon. The relationship is a relationship you have to take in the round,” Mr Mitchell said during a visit to India in December, referring to the strategic goals of the £1.2-billion aid project, according to British newspaper
His remarks have been strongly criticised by the Opposition Labour party. “Following his comments in Delhi before Christmas, Mr Andrew Mitchell now needs to urgently clarify whether it remains UK Government policy not to tie aid with trade,” said Shadow International Development Minister, Mr Ivan Lewis, MP. “Now and in the future Andrew Mitchell should refrain from linking aid to trade.”
Linking trade with aid is a contentious issue “and potentially illegal” in Britain following a 1994 court ruling in Britain, on aid for a Malaysian dam.
The British Government wanted to spend £234 million on the Pergau Dam, a project the charity the World Development Movement (WDM) believed had little economic benefit for the country, but was more a sweetener in the effort to secure future trade deals. The court agreed, ruling that the Minister had acted “unlawfully”.
“Following the Pergau dam scandal in 1994, nobody should be in any doubt that tying aid to trade is illegal under British law. But Mr Andrew Mitchell's comments around the Typhoon bid suggest the coalition Government is straying dangerously close to prioritising trade expectations in its aid commitments to India,” said Ms Hannah Griffiths, the head of campaigns and policy at the WDM.
“The Government would be well advised to revisit the legal precedent set by the Pergau dam case, which made it clear that the primary purpose of aid must be the economic benefit of the recipient country and the welfare of its people. Aid is certainly not about selling fighter jets.”
Direct link
Despite this clear distinction some MPs have drawn a direct link between the two issues, calling on the Government to urge India to revisit the MMRCA contract.
Mr David Davis MP, a former Minister and contender for the Conservative Party leadership, urged the Prime Minister “in the wake of Britain giving many times more aid to India than France did” to use the “full force of the Government” to persuade India to opt for the Eurofighter.
The Government denies it has ever made such a link, insisting that in December Mr Mitchell “was making the point that aid is just one part of Britain's wider relationship with India, which includes trade. The relationship is good for both Indian and British prosperity.”