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3. Dr. Vincent Cable (Twickenham): If she will make a statement on the IMF and World Bank assessments of the contributions to Tanzania's development of air traffic control equipment supplied from the UK. 
The Secretary of State for International Development (Clare Short): It is clear that Tanzania needs a civilian air traffic control system to ensure safety in the country's air space. The issue is whether the proposed system meets Tanzania's needs, and represents value for money. The Government of Tanzania and the World Bank await the report of the International Civil Aviation Organisation on whether the BAE system best meets Tanzania's needs.
Dr. Cable: First, may I acknowledge the Secretary of State's role in resisting pressure from the defence industry and from her own colleagues on that project? Will she confirm that at present £80 million of aid to Tanzania is being withheld because of her reservations about the project? Will she explain how the financial promoters, Barclays and BAE Systems, managed to circumvent very strict IMF rules on commercial lending to seriously indebted countries?
Clare Short: I have been looking at the figures for total UK arms sales to Africa. In 1999, the value of those sales was some £60 million, and in 2000 it was £120 million, out of total British arms sales of about £6 billion. We could afford to tighten up our scrutiny of arms sales
The aid that I have withheld from Tanzania is £10 million. I hope that once we have the report from the International Civil Aviation Organisation, and assuming that Tanzania responds to it in the best way and in the interests of the country and of poor people, we will be able to give it more help to solve its problem.
The hon. Gentleman is right: under the HIPC initiative, countries cannot borrow unless the loan is concessional. Somehow a loan from Barclays Bank, which is funding the projectthere is no way that Barclays can provide concessional fundinghas been reported to the IMF as being concessional, so the project squeaked through, which is very odd.
Mr. Michael Connarty (Falkirk, East): Will my right hon. Friend give the House an assuranceso squashing some of the rumoursthat the civil aviation air traffic control system will not be used for the control and movement of military aircraft?
Clare Short: We have not seen the new International Civil Aviation Organisation report, but an interim report suggested that the system is dual use. Much of the expense on it is military, and the system does not cover the whole country. Tanzania does not have many military aeroplanes, and that is part of the problem.
Mr. Stephen O'Brien (Eddisbury): Is the Secretary of State optimistic that aid to Tanzania will be resumed relatively soon? Looking forward, does she agree with Dr. Janet Hemingway, the director of the Liverpool school of tropical medicine, who came to speak to the all-party Tanzania group on Monday, that the biggest blight on the people of Tanzania, malaria and HIV/AIDS, is best dealt with by channelling that aid into building many local diagnostic centres and training doctors? For every three doctors trained, only one lives to be in practice because the other two die of AIDS in the meantime.
Clare Short: Tanzania is doing very well. It really is reforming; inflation is down and economic growth is up. It is beginning to move forward on universal primary education and to make schooling free so that many poor children can enter school. Apart from the blight of the BAE system, then, Tanzania is making progress. We are the biggest provider of aid to the country, and we have provided large funds this year. We are holding back the £10 million so that we get a decent outcome once we have the report from the International Civil Aviation Organisation.
I agree with the hon. Gentlemanmore children die of malaria in Africa than of any other illness. There is a great deal that we could do. If people slept under impregnated bed nets, that would save a lot of lives and prevent a lot of ill health. We have to build up local systems to deal with malaria and HIV/AIDS, and we must train people to work locally, rather than inciting doctors to leave their country when it has too few of them.
Clare Short: No, I am afraid the hon. Lady does not yet properly understand development. If countries have weak procurement systems and they purchase projects that do not give value for money and are not beneficial to their country, they undermine their economic development.
One of the consequences and benefits of the argument is that Tanzania has tightened up its procurement systems. When it completed its debt-relief process, Tanzania gave an undertaking to the World Bank board that it would review the contract, but the Government of Tanzania came under pressure to break that undertaking. We have said that we will hold back the £10 million and that when we have the report and if we can get a good outcome for Tanzania, we will assist Tanzania to take forward the process. That is the right thing to do. We do not give aid unconditionally where there are bad procurement and bad contracts and so end up using aid money to subsidise a bad contract that is damaging a country.
The Secretary of State for International Development (Clare Short): I meet Commissioner Patten and his colleagues regularly. He and Commissioner Nielson are committed to reforming the EC development systems to increase their effectiveness, but they are not convinced that budget funds should be allocated to reduce poverty. EC spending in Asia, where two thirds of the poor live, is therefore very small.
Tony Baldry: Does the Secretary of State agree that if EU aid were properly focused it could be an enormous power for good, but that a system in which more money is given to Poland than to the whole of Asia is simply unsustainable? We have a collective responsibility to persuade political colleagues in Europe, whether they are Christian Democrats, Liberals or Socialists, that EU development aid must now be poverty-focused. We all know the problem; it is time that we all collectively shared responsibility for work to find a solution.
Clare Short: I agree completely. The EC spends 3.38 euros per head in the Mediterranean, but only 0.15 in Asia. That is a disgraceful misallocation of resources, but we need co-operation across the EU and across all parties to put it right. I agree also that if Europe, which is the world's largest single market and the biggest destination for developing countries' exports, and which accounts for 60 per cent. of the world's development
Mr. Simon Thomas (Ceredigion): The Secretary of State knows that 15 per cent. of the EU's money goes to the middle east even though only 1 per cent. of the world's poorest people live there. None the less, when working on reform of the system, will she bear in mind the fact that some of that money is vital to rebuild the Palestinian Authority and repair the damage done to Palestinian refugee camps? Will she state the Government's ongoing commitment to ensuring that EU aid continues to be received by the Palestinian Authority and that the money is used to rebuild and to further peace in the area?
Clare Short: Yes, I can give the hon. Gentleman that absolute undertaking in respect of both my Department's budget and that of the EU. We must help the Palestinian people to survive and provide the humanitarian relief that is needed, but how much better it would be to direct those resources to building the new Palestinian statea competent state that cares for its people, manages its resources well and is a good neighbour to Israel. That is the work that we all want to undertake.
Mr. Tom Clarke (Coatbridge and Chryston): When my right hon. Friend meets Commissioner Patten, might she not find that he is a little envious, given that, although he was a Minister responsible for international development, he was never appointed to the Cabinet because the then Prime Minister did not regard the matter as seriously as today's Prime Minister rightly does? However, as Commissioner Patten is a fair man, will my right hon. Friend encourage him to encourage European nations and those who seek membership of the EU to set a date for the achievement of the 0.7 per cent. of GDP UN aid target?
Clare Short: Mr. Patten was later appointed to the Cabinet, but not in his role as Minister for Overseas Development, which he said was the best the job that he had ever had in politics. I should not be telling the House that, but it is a fine job. We can do a lot and it matters enormously. I am sure that my right hon. Friend the Chancellor has heard what my right hon. Friend just said about UK resources for development.
Mrs. Caroline Spelman (Meriden): The Select Committee report is intensely critical of the European overseas aid programme, and the Secretary of State shares in the criticism about the priorities upon which the money is spent, yet her Department is set to increase the amount that we spend through Europe to more than £1 billion by 200304. Does the right hon. Lady agree that although the Council disposes decisions in Europe, the decisions are made by the member states? If the Secretary of State maintains that she has a strong voice in Europe, it appears that Europe is simply not listening.
Clare Short: No, I would not agree. There has been agreement in the EU that present practices are inefficient and that there has to be major reform, and a major reform agenda has been set in place. At the last review of the amount of EU development assistance, we kept the rise to