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24 July 2007 : Column 767

Global Poverty

Mr. Deputy Speaker (Sir Michael Lord): The next motion is on global poverty. I must advise the House that Mr. Speaker has selected the amendment that stands in the name of the Prime Minister and that there will be a 10-minute limit on all Back-Bench speeches in the debate.

7.57 pm

Mr. Oliver Letwin (West Dorset) (Con): I beg to move,

This topic is, by common consent, probably the most important one that the world currently faces. Probably the worst feature of our world is that so many people live in dire poverty. That is a matter of consensus among not just ourselves and Government Members, but Liberal Members and, indeed, I am glad to say, the whole political establishment in Britain, but I wonder whether it is as keenly felt by all our fellow citizens as it might be.

I certainly admit that, over a number of years, the Conservative party, although it shared the consensus on spending, for example, and has done for many years in this field, did not pay the subject the attention it was due. One of the very first things that happened when my right hon. Friend the Member for Witney (Mr. Cameron) became leader of the party is that we asked my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley), who is in his place, to chair a policy review group to look into how we might propose sensible, robust and effective policies to improve Britain’s performance in this area.

Stephen Hesford (Wirral, West) (Lab): The right hon. Gentleman mentions the right hon. Member for Witney (Mr. Cameron). Does he agree with me and the Daily Mail that the right hon. Member for Witney would be better placed in his own constituency, looking after the flood victims, rather than chasing a photo opportunity in Rwanda?

Mr. Letwin: I hope that, as we proceed with what I, at least, intend to be a serious debate on the most pressing problem of the world, we will not descend to partisan repartee. In fact, over the years, it will be seen that the commitment of my right hon. Friend the Member for Witney to this subject and his willingness to continue with his engagement, notwithstanding the considerable political pressure to the contrary, is a sign of the same kind of commitment that is displayed by the fact that the group chaired by my right hon. Friend the Member for Hitchin and Harpenden has now
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produced what is, by common consent of those who are expert in the field, a very serious piece of work. Today we met a large number of representatives of the non-governmental organisations, who had many good and useful things to say in support of much of what is in the report. I hope that the debate will be the beginning of a prolonged national discussion of the propositions in the report. We certainly intend that discussion to inform our policy as it emerges.

The report does much more than merely commit to a seriousness in relation to the relief of global poverty. It refocuses the discussion of the relief of global poverty. In particular, it offers a clear view of what the route out of global poverty is and has to be. In a way, what it says on that ought to have been obvious, but, over the past 20 or 30 years—this is not a partisan point; it is a point about the trend of British government over many years—it has not been followed up as if it were obvious. The report says that the way out of poverty is economic development and growth. It points out that our policies as a country have been, to a degree, deficient, in that we have failed to do as much as we could have done for growth in low-income countries.

In particular, the report points to two parts of our policy that have been, to a degree, deficient: first, our policy on trade and, secondly, our policy on aid. The report makes a bold proposition about trade, which it describes under the heading of a “real trade campaign”. It proposes that Britain and our partners in the European Union should join together and seek to achieve a unilateral disarmament in our barriers against trade from low-income countries. I stress the word “unilateral”. The report does not propose that we should merely demand a reciprocal reduction in barriers on the part of low-income countries. On the contrary, it proposes that we should tear down the barriers and offer what is built on the everything-but-arms basis. But, more than that, it involves a significant change in the rules of origin. It proposes that that should be offered to low-income countries on a unilateral basis, from the European Union. That is a major potential step forward in the thinking about how we can open ourselves up to trade that may benefit us, but, much more importantly, offers the prospect of growth and economic development in parts of the world that do not have it in sufficient quantities.

It is of course critical that the report deals not just with unilaterally tearing down barriers against trade from low-income countries, but with the need to encourage and foster south-south trade—trade between low-income countries. It makes a number of proposals about how that too can be encouraged. Nor is it the case that the report deals merely with tearing down barriers to trade. It also makes it clear that aid itself needs to be oriented more firmly towards the promotion of trade. I will come on to that as I describe the report’s propositions on aid. This is an important step forward in thinking about trade, and the ability of the UK and our partner countries to promote trade from low-income countries.

The report is equally committed to improvements in our aid programme. I stress that the report does not suggest that our aid programme is a disaster or that the Department for International Development does nothing right. As the Secretary of State will see if he chooses to read the report at some stage, it provides a
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fair-minded and balanced analysis of the advantages and disadvantages of the way in which DFID has been going about its business.

The report suggests that our aid programme could be improved significantly if various things happened. First, our aid programme could be more devoted to economic development than has recently become fashionable. The report notes that, a couple of decades ago, aid for economic development began to acquire a bad name—partly because of tied aid, which by common consent we now do not believe in, and partly because of large-scale projects that did not work out right. The Secretary of State is nodding his head, but if he thinks that it was merely one set of Governments that failed in those respects, rather than many, he is wrong. It was a common failing, both across different Administrations in the UK and across other Administrations in other countries. The report argues that, as a result of all that, aid aimed at economic development acquired an unduly bad name.

Secondly, the report notes that not only did aid have attached to it for a considerable period the wrong conditionality of being tied to our exports, but, following that period, it had attached to it—and still has attached to it—what the report regards as an excessively prescriptive view of how the aid is to be used. The report argues for a different form of conditionality. It argues that aid can do serious things—if it is the right kind of aid, rightly delivered—for the development of agriculture and of the economy as a whole in low-income countries. It argues that microfinance institutions and demand-led funding can make a significant difference to the development of those countries.

The report argues that the conditionality that needs to apply is transparency. It argues for the much wider use of expenditure tracking surveys, independent accounting and efforts to make sure that outcomes match inputs. The report argues that DFID and Britain would be better served if there were an independent evaluation group, reporting to a Select Committee and looking into the outcomes achieved by DFID. The report notes that the public service agreements and the objectives of DFID are wide in nature and not sufficiently related to the outcomes achieved by aid.

Ann McKechin (Glasgow, North) (Lab): The right hon. Gentleman is certainly presenting an interesting argument. Given the fact that a great deal of British aid is spent through multilateral institutions such as the World Bank and the development banks, how does he propose that we would track the outcomes and hold those organisations properly to account?

Mr. Letwin: The hon. Lady asks an interesting question. The report does offer a route to achieving that. The route has another advantage as well. The report suggests that—this is something of which I have had a good deal of personal experience in the various African countries in which I have worked—the often fragile governmental organisations in low-income countries suffer from an excess of bureaucratic requirements from a range of well-meaning donor countries and well-meaning multilateral donors. It
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points to the extent to which the bureaucracies in those countries can be forced to complete a huge number of forms and responses for those many donors.

As a way of dealing with that—this would also do what the hon. Lady and I both seek—the report suggests the formation of what it calls partnership trusts. They would be bodies in the recipient countries that would be co-operatives, or partnerships, involving a range of donor countries with aid programmes in those countries, and multilateral institutions. On their boards would also sit, perhaps as observing rather than voting members, various local non-governmental organisations, governmental observers and so forth. In that way, the aid programmes from many different sources could be co-ordinated more efficiently and be made subject more effectively to expenditure tracking and independent accounting.

The report proposes that the process that I have described would enable one to envisage encouraging the media and other organisations of civil society in recipient countries to invigilate the effectiveness with which the aid reaches the schools, hospitals, farms and infrastructure projects to which it was directed. It argues that that is likely to provide a more sustainable basis for checks and balances against corruption and poor governance than present arrangements.

Malcolm Bruce (Gordon) (LD): The right hon. Gentleman is making an interesting case and I welcome the contribution to the debate on global poverty. Does he accept that building up the capacity of the local finance ministry is the ultimate priority for many developing countries? Is there not a danger that setting up a parallel structure would put pressure and strain on their resources that they could not sustain? To be fair to the Department for International Development, one of the benefits of budget support is that the Department has to work with the local finance ministry to deliver that accountability. Setting up a parallel structure poses risks, whereas establishing a successful finance ministry would be a good start.

Mr. Letwin: I wholly agree with the right hon. Gentleman, as I think would my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell), the shadow Secretary of State. Building up the capacity of finance ministries is a crucial component, and the report makes that very point. That is why it favours direct budgetary support, rather than highly prescriptive aid on one side. Indeed, it goes further, arguing that support for health programmes would be better achieved by giving direct budgetary support that is then passed on to the health system as a whole than by minutely targeting specific health initiatives that turn out not to have the infrastructure and support that is needed to maintain them.

Neither I nor the report suggests that a parallel structure that undercuts a recipient country’s finance ministry be established. On the contrary: the report suggests setting up a partnership trust of donors whose board could discuss its programmes with the local finance ministry, and that that could enable the finance ministry to do better at finding ways to render transparent how the money is used. It could also enable civil society in the recipient country to invigilate the
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finance ministry. The idea is to create a sustainable process in that country, and not impose a parallel process from outside.

Mr. William Cash (Stone) (Con): I do not know whether my right hon. Friend is familiar with my International Development (Anti-Corruption Audit) Bill, which I introduced early last year. In it, I suggested a mechanism by which, in countries where it was transparent that corruption was rife, the finance ministries and public accounts committees could have an independent, external audit carried out by Parliaments and international institutions such as the International Monetary Fund and the World Bank. Does he think that that proposal should be pursued, as a way of making sure that children no longer die at the present rate? For example, poor water and sanitation mean that one child dies every 15 seconds. I know that the report is excellent, but we must not underestimate the importance of external audit when the countries concerned are simply not listening to what we say.

Mr. Letwin: I hope that my right hon. Friend the Member for Hitchin and Harpenden will succeed in catching your eye, Mr. Deputy Speaker, and be able to speak for himself. However, I think that I can say on his behalf that he was indeed aware of my hon. Friend’s contribution, as was I. If the proposed measures are to be effective, independent audit will be an important component. In the report, there is considerable discussion of the need for independent audit, although it suggests that it should be conducted under the local finance ministry and not be imposed from outside.

However, I can go further. The report also makes immensely important suggestions about the need for a new corruption Act in the UK., and about the need to do better at tracking our unwitting participation in corruption abroad as a result, for example, of activities that may be going on in the financial centre that is London.

I know that many colleagues want to speak, so I shall summarise my argument. The report is not conceived in a partisan spirit. It is the product of an immense amount of consultation and work—with NGOs, recipient country Governments, and experts from across the world. It has a remorselessly growth-oriented focus, and argues that both trade and aid can make colossal contributions to promoting growth in low-income countries. It argues for a radical proposal across the EU to remove barriers to trade, and for aid that is provided on a basis that is less prescriptive but more transparent. It believes that such aid is more likely to be effective and better directed at promoting the growth permitted by the removal of trade barriers.

I believe that the report will form the basis of a considerable, ongoing discussion. I hope so, as that may assist the Government—and the Opposition, as we formulate our policy responses in this critical area.

Before I close, I want to say one other thing. I welcome the Liberal Democrat amendment, although I know that Mr. Speaker did not select it for debate. If Liberal Democrat colleagues read the relevant sections of the report, they will find them penetrated throughout by a recognition of the critical significance of adaptation to climate change in low-income
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countries, and the necessity to pass the aid programme through what it calls the “filter” of its effects on climate change.

Hugh Bayley (City of York) (Lab): On several occasions, the right hon. Gentleman has said that there is growing basis of cross-party support in this area of policy, and I am very pleased by what is a very welcome change. However, does he see anything in the Government amendment to the Opposition motion with which he disagrees? Is the level of cross-party support such that there is no need to divide the House at the end of the debate?

Mr. Letwin: I would have welcomed it if the Government had not tabled an amendment, although I did not expect that. I am not sure that our motion contains anything with which the Government particularly disagree. The Government amendment essentially agrees with much of the substance of the motion, but adds congratulations, on a considerable scale, to the Government. It is, so to speak, a “Toad of Toad Hall” amendment: there is nothing amiss with that and I can quite understand the principle but, if the hon. Gentleman supposes that we would vote for a mass of unnecessary congratulation, he is stretching my impartiality and non-partisan nature a mite too far.

8.19 pm

The Secretary of State for International Development (Mr. Douglas Alexander): I beg to move, To leave out from “House” to the end of the Question, and to add instead thereof:

Two weeks ago, the United Nations published a report showing progress towards the millennium development goals. The scale of the remaining challenge is clear: every minute, a woman dies in pregnancy or childbirth, and as we have heard, every 15 seconds a child dies because they did not have access to clean water and sanitation. Each year, malaria claims 1 million lives, tuberculosis nearly 2 million lives, and AIDS 3 million lives. It is seven years since the world pledged to “spare no effort” to free men, women and children from extreme poverty, yet only one of the eight regions of the world cited in the UN report is on track to achieve all the millennium development goals.

However, we can—and we must—make a difference. The Department for International Development’s work is rightly respected around the world. The Development Assistance Committee of the Organisation for Economic Co-operation and Development said that the United Kingdom

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The Canadian Institute of International Affairs said that the Department is

development agency—

The Leader of the Opposition was perhaps rather more charitable than Opposition Front Benchers have been this evening: he was willing to make the point forcefully last year that

and he described it as

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