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Hilary Benn: We have had an interesting debate. The hon. Member for Billericay (Mr. Baron) did the House a great service by drawing attention to the decline in the poverty focus of EU development spending, which is a real problem. We are well aware of that. As my hon. Friend the Member for City of York (Hugh Bayley) said, these problems have been going on for some time. They are a product of the priority that has been given to the foreign policy interests of EU member states—these decisions are taken collectively—instead of focusing on poverty. The Government have succeeded in persuading the EU that its development aid programme should have a poverty focus.

As the Chairman of the International Development Committee, the hon. Member for Banbury (Tony Baldry), said, the process of reform has begun. We had an extremely good debate this morning in European Standing Committee B—hon. Members will be pleased to hear that I do not propose to repeat my contribution. We talked at some length about the progress that is being made, but we also recognised that there is a lot more to be done.

Norman Lamb: I recognise that the process of reform has started. However, I read in the Library research paper on the Bill that, back in November 2000, the Development Council made its declaration that the principal aim must be the reduction of poverty. It decided that there must be an action plan and constant monitoring of progress through an annual report. Today, I rang up the man in

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charge, Mr. Eliopoulos, to find out where these annual reports were, and I discovered that there is no annual report for 2000 or 2001. Nothing has yet been published. That does not make me very confident that progress is being made, certainly not on monitoring. Can the Minister tell us what will happen with those reports, and how much progress has been made?

Hilary Benn: My recollection is that there was a first shot at a report that went to the Development Council in November, but the Commission recognised that it was an incomplete and imperfect document. One of the practical steps we are taking is to work with officials in the Commission to find ways in which effective monitoring of the spending of EU aid can be undertaken in future and be reported to future Council meetings. There is not the experience that there might have been. We have something to offer, along with other member states that share our concern about the lack of a poverty focus, and we are interested in practical steps to make progress.

Mr. Baron: Will the Minister give way?

Hilary Benn: Yes I will, but I want to make progress.

Mr. Baron: I have taken the Minister's points on board, but why are we waiting until 2006 to get a progress report on these new policy initiatives and reforms, when we could ask for such a report in a year's time? Why do we not speed things up? Why are we waiting another four years?

Hilary Benn: We are not waiting, because the Government are actively involved in supporting the European Union and the Commission in carrying forward the reform process. I was interested by the remarks of the hon. Member for Banbury, who has been with the Select Committee in Brussels for two days. We will see what the International Development Committee report actually says. The hon. Gentleman recognised that progress is being made. I am however almost the first—my right hon. Friend the Secretary of State would be ahead of me in the queue—to recognise that the proof will be in the delivery of the change. We think the commitment is there, and the mechanisms have begun to be established; but all of us, in all parts of the House, want to see the change take place.

I do not know about the reports in the papers to which the hon. Member for Meriden (Mrs. Spelman) referred, but I can confirm what my hon. Friend the Member for City of York said. The £200 million in the bilateral contribution to aid for Afghanistan will come from the DFID budget; the EC is making its own contribution from resources for Afghanistan's reconstruction. Only our contribution to the European development fund comes within the purview of the Bill. The EC development aid budget category 4 and pre-accession spending—also raised in the debate—are subject to the European Communities Act 1972.

We share, unquestioningly, the objective of a greater focus on poverty, but the new clause is both unnecessary and undesirable. It is unnecessary because any assistance provided by the Secretary of State under clause 1 and

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any contribution made under clause 4 are subject to the requirement that she be satisfied of the likelihood of their contributing to a reduction of poverty. That is so whether she acts herself or through third parties, under clause 4 or clause 8. The Bill therefore provides for the test sought by the hon. Lady.

As for the undesirability of the new clause, the most important point is that the Secretary of State's power to provide assistance in response to a disaster or other emergency is not constrained by the poverty requirement, and should not be so.

Mrs. Spelman: May I put to the Minister the question put to me by the hon. Member for Wimbledon (Roger Casale)? If the Secretary of State was not satisfied that the criteria in clause 1 were being met, would she be prepared to withhold funds on a multilateral basis if they did not accord with the focus?

Hilary Benn: The Secretary of State could do that under the Bill as it is currently worded, although contributions to the European Union involving moneys covered by the European Communities Act 1972 are not subject to its provisions.

The real difficulty is that the new clause would impose a constraint, in that whenever the Secretary of State gave assistance to third parties in response to a disaster or other emergency—and I am afraid that "third parties" includes non-governmental organisations—she would have to be satisfied that the granting of that relief would contribute to the reduction of poverty. I cannot believe that that was the hon. Lady's intention. Such legislation would mean, for instance, that before deciding to authorise the granting of emergency relief following the volcanic eruption in Goma, the Secretary of State would have had to ask herself whether it would contribute to the reduction of poverty. Such deliberation might cause delay, which is of course wholly undesirable.

There are other examples. In 1999, there was a mudslide in Venezuela. We gave support through third parties to assist humanitarian relief. Some of the mudslide affected wealthier districts of the capital. If the new clause were adopted, it would mean, in effect, that the Secretary of State should not give such support through third parties, because it would be hard to prove that it favoured the reduction of poverty. Another instance is the help that we gave, again through third parties, following the Turkish earthquake. Turkey is not a low-income country.

Another unintended effect of the new clause is that any aid given to overseas territories by third parties would be subject to the poverty test, which we have specifically excluded from the aid that we give overseas territories under the Bill because other factors need to be taken into account. Again, I am sure that the hon. Lady would not intend the new clause to have this effect, but the overseas territories would be alarmed to hear that any aid or support that they received from third parties, multilateral institutions and international financial institutions was subject to the poverty requirement.

Finally, as other hon. Members have said, the new clause would create difficulties by constraining the Secretary of State's ability to honour our obligations to pay contributions and subscriptions to multilateral financial institutions.

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We accept the principle. The Bill seeks to give the Secretary of State the necessary power to ensure that she can carry that principle through but, with great respect, the new clause is defective because it would have all those adverse consequences. For that reason, I hope that the hon. Lady will decide not to press it.

Mrs. Spelman: It is not until we debate new clauses in this way that we are able to place on the record the principles that we are trying to defend and our good intentions in tabling them, and to dispel any myths about those intentions. I hope that we have succeeded in achieving that.

I am sure that the Minister is under no illusions. We feel strongly about acting on the warnings following the Select Committee investigations into the way in which multilateral aid is disbursed by, among other third parties, the European Union. It is perhaps worth putting on record the fact that there is no desire to fall into the trap of adversely affecting NGOs, whose work in relation to international development we support.

The unforeseen consequence exposed by the hon. Member for Wimbledon (Roger Casale) may lead to a myth being perpetrated that there is an intention on the part of Conservatives to repatriate our multilateral funding. I hope that that has been scotched effectively, but lest there should be any doubt left, and to make it impossible to place that interpretation on our intentions, and to avoid the unforeseen consequences that the Minister has set out and which arise from humanitarian assistance being referred to under new clause 3, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Order for Third Reading read.

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