HC Deb 14 December 1990 vol 182 cc1233-97

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]

[Relevant document: European Community Document No. 7059/90 on a Research and Development Programme for Life Sciences and Technologies for Developing Countries.]

9.36 am
The Minister for Overseas Development (Mrs. Lynda Chalker)

I am delighted to introduce this debate on the all important issues of development aid. Development is a complex process, and so is managing an aid programme, but there is a single theme underlying our programme. It is to achieve a continuing and sustainable reduction In the grinding poverty in which so much of the developing world lives.

The solutions are not simple; nor can they be imposed. If we are to achieve our aim, we must work in partnership with not only our fellow donors, but, most of all, the people of the developing countries themselves.

The key development issues for the 1990s are: support for effective Government policies in developing countries, built around open, accountable government and sound economic management; tackling specific needs through well-designed and well-managed projects; and a commitment to environmental sustainability, combined with a realistic approach to population issues.

The agenda for the 1990s is a challenging one, but I believe that Britain is well equipped to respond to it. Last month, we announced plans for gradual continued real growth in the aid programme for developing countries over the next three years. The new plans envisage a 17 per cent. cash increase, equivalent to around 2 per cent. in real terms. Entirely separately from this, we have also announced provisions for assistance to eastern Europe and the USSR, and, for the first time, global environmental assistance. This shows that our help for eastern Europe has not been at the expense of aid for developing countries.

Britain continues to take the lead in proposing further debt relief for the poorest. In September this year my right hon. Friend the then Chancellor of the Exchequer launched new proposals—the Trinidad terms—designed to reduce by two thirds the debt owed by the poorest countries to creditor Governments. These are now under active discussion in the Paris Club.

Successful development is not only about transfer of resources. It is equally about quality and effectiveness. The Overseas Development Administration is well regarded by many donors not only for the high quality of its own staff, but for being able to call on the services of a wide range of British non-Governmental Organisations, academic institutions and the private sector, with whom we continue to work so closely.

The first of our key development challenges—is support for effective government. The attack on poverty requires, first, sustained economic growth and, secondly, a determination to ensure that the developing world's poor share in the benefits of that growth.

Following the poor economic performance of many developing countries in the 1970s, it was increasingly recognised that the old prescriptions had failed to deliver. The task in the 1980s has been to restore the basis for economic growth through policy and institutional reform.

Reform can be painful, but those who blame reform programmes for the present plight of developing countries confuse the disease with the cure. More and more countries have themselves realised the need for reforms. Sixty-two countries had sought and received assistance for economic reform from the World bank by the end of 1989.

As in so much of our work, international co-operation is essential. No single donor can provide all the support required by developing country Governments in designing and implementing their reform programmes. It is right that the international financial institutions, particularly the International Monetary Fund and the World bank, should take the lead, but they need to be supported by bilateral donors. The British Government have been in the forefront in providing the intellectual, practical and financial support to adjustment programmes.

The House will be aware that our support is of two types—politically to persuade countries in need of reform to adopt sensible policies and financially to support countries who have undertaken reform programmes. We provided more than £400 million in balance of payments support to sub-Saharan Africa between 1984 and 1989. This year we expect to spend about £130 million in this way.

We have co-operated with the bank and fund on the design of adjustment programmes, for example on civil service reform in Ghana, on assistance to reform the Tanzanian banking system and on private sector policy reform in Uganda. We have also provided essential technical expertise in key posts, such as that of the general manager of the central bank in Gambia.

I have already emphasised the importance of donor co-ordination in support of economic reform. A particularly important multi-donor initiative was launched in 1987 called the special programme of assistance to Africa. It is co-ordinated by the World bank and it has mobilised $6 billion to support poor countries in Africa which had excessive debt burdens and were pursuing a viable adjustment strategy. Currently, 21 countries are eligible for assistance under this facility.

Britain pledged £250 million to the first multi-donor SPA programme—more than 9 per cent. of total bilateral pledges. A successor to the SPA is currently being negotiated, with a target of $8 billion—about a one third increase on the previous level. Our contribution will be at least at the level of SPA 1.

It is still early days, but the results of economic reform programmes are encouraging. The economies of the countries participating in the special programme of assistance have grown by an average of 3.5 per cent. per year since 1985. That compares with less than 1 per cent. per annum in the early 1980s.

Ghana adopted a reform programme in 1983 after years of decline. As a result, real gross domestic product has grown by 5 per cent. per annum, real investment by 13 per cent. per annum and exports by 19 per cent. per annum —a highly creditable performance. The economy is more efficient, manufacturing capacity has been brought back into operation, and inputs and consumer goods are more widely available.

The reforms help the poorest by shifting the terms of trade in favour of the rural sector, where most of the poor live. In addition, an essential part of our approach to economic reform is to help the poorest people to take advantage of the opportunities which the reforms present. Extra help is given in practical and specific ways agreed between us and the recipients. For example, we are contributing £1.5 million in Ghana for non-formal education aimed at improving female literacy. All such education, wherever it takes place, helps a country to build up its strength.

Female literacy is a great need throughout the world. Nearly two thirds of the world's illiterates are women, and they number over 1,000 million people. In Malawi, we are assisting programmes to increase income-earning opportunities for women and poor urban families. Wherever one looks, there are specific, closely designed programmes to help the need of the country and of the specific area of the country.

Sound economic management is not the whole picture. Only last week, the annual high level meeting of the development assistance committee of the Organisation for Economic Co-operation and Development reaffirmed its conviction that There is a vital connection between open, democratic and accountable political systems, individual rights and substantial reductions in poverty. The same message was earlier endorsed by both donors and recipients at the conference on the least developed countries in Paris in September. Underlying this is the belief that, for successful development, the people of the developing world need to have a stake in their countries' development. That has complex implications for our aid management. The challenge is to achieve effective and accountable institutions, so vital for development, but each country needs to be considered individually.

Two cases where the scales have tipped negatively are Sudan and Somalia, where we and others have judged that we can no longer provide effective long-term aid. For most countries, however, our task is to help them in the right direction. This is not a crusade. It is about helping those who want to help themselves. We have therefore particularly welcomed the recommendations of the recent conference in Kenya on political reform. The reforms proposed, taken together with the recent announcement that security of tenure for the judiciary would be restored, mark an important step in the right direction.

We can help the process towards better government in many ways. First, we must send a clear message of support to those committed to better government. We have been at the forefront of discussion on this among donors and recipients. Secondly, we can provide more practical assistance. We have just agreed to provide electoral assistance for Nepal, together with training for members of its parliamentary secretariat.

In Uganda, we are funding the appointment of judges, training court staff and providing legal text books. In Namibia, one of our senior Clerks from this House has been providing advice on parliamentary procedures. In addition, we have provided advice on civil service structures and other matters.

Better government is not just about the institutions and the people at the centre of government. It is about what happens at a local level. This brings me to another aspect of our approach—good project design and management.

The key to that is to have the right systems in place and the right people to apply them. A case in point is our approach to slum improvement projects in the subcontinent. From Dr. Khan in the Orangi slum in Karachi, we learned a lot about the approach needed if improvements were to be effective and sustainable. Our slum improvement projects in India now cover health, education and income generation, as well as infrastructural improvement.

Another new and central element is the involvement of people living in the slum communities in the decision taking about new facilities and their maintenance. That called for the municipal authorities to acquire new skills and reorganise their priorities. The concept is being replicated in ODA-funded slum projects in Pakistan and five Indian cities.

Another good example of the encouragement of local participation is our support for the Bangladesh rural advancement programme. The aims of the programme are to alleviate poverty with special emphasis on the landless poor. It operates through a village network to provide training in management skills and to make available a revolving loan fund for income generation activities. Among other things, our help will establish a self-supporting bank that will help to maintain the programme on a sustainable basis.

In Gokwe in Zimbabwe, we are supporting a programme to strengthen the institutional capacity of district and provincial planners. The programme is modelled on similar ODA-supported schemes in Zambia. It tackles the chronic problems of management and implementation capacity, which are major constraints on development, particularly in the social sectors. By encouraging the participation of local people, it generates not only commitment, but greater local accountability.

We have achieved what we have in our projects and programmes only because we have been well served by British expertise in research and design. I pay tribute to all those, from many walks of life, who have worked for years, particularly in the past 10, to improve our programmes. Without them, we would not be so effective in delivering our aid.

Although the GATT negotiations are not an essential part of this debate, they are essential for the life of the developing world. I greatly regret that we did not achieve a successful outcome of the GATT negotiations in Brussels. That was no fault of my right hon. Friends the Minister for Agriculture, Fisheries and Food and the Secretary of State for Trade and Industry. Our developing countries need trade just as much as they need aid—they get three quarters of their income from trade and only one quarter from aid. In January, when the talks are resumed, our efforts will be absolutely critical for the future of the developing world. I hope that our American colleagues, and some of our European ones, take to heart what the outcome could be if those GATT negotiations do not liberalise trade for the sake of the developing world.

It is important to consider problems associated with the environment and the population. Most environmental problems know no boundaries; therefore, more than almost any other challenge, the environment requires a truly collaborative international effort. This decade, environmental diplomacy will become a key theme of international politics—of that there is no doubt, especially as we work towards the major UN conference on environment and development that will be held in Brazil in 1992. It is vital that developing countries participate fully in the international effort, and we are assisting them to do so.

The Government's commitment to environmental issues is plain from our White Paper, "This Common Inheritance", published in September, which makes clear our commitment to sustainable development. That means living on the earth's income rather than its capital. That way, we may hand down to future generations the natural and man-made wealth they will need if living conditions are to improve.

We have made much progress in the past three years. The British aid programme is now as green as any. More than 300 of the ODA's staff at home and overseas have been trained to use our environmental assessment manual. Our procedures are recognised by the German aid agency and the European Commission, both of which use our manual. They are recognised by organisations such as the United Nations Industrial Development Organisation, which sends its staff on our training courses. In other words, we have made some first and critical steps towards improving environmental acceptability of the projects needed in the developing world.

Our environmental appraisal procedures apply equally to projects under the aid and trade provision. We recognise that such projects need careful environmental assessment and I am glad to say that the ODA's procedures have improved dramatically in that respect compared with 10 years ago.

Global environmental problems, like climate change, pose special problems for everyone. I mentioned earlier the Government's plans for the growth of the aid budget for developing countries. In addition, we have just created a separate new item of public expenditure for global environmental assistance. From this, we will make our contribution to the new global environment facility. The GEF will be managed by the World bank, the United Nations Development Programme and the United Nations Environment Programme. It is designed to help developing countries tackle global environmental problems such as climate change and the loss of the biological diversity of our plant and animal species.

The facility will be different from traditional aid programmes. It will fund only projects which, while they have significant global benefits, would not be justified by the national benefits to the country concerned. Two weeks ago, we announced that Britain would contribute £46 million to the facility. That makes us one of the first and leading contributors.

We want the GEF to become the funding mechanism to help developing countries comply with proposed conventions on climate change and biodiversity that we hope to see agreed by 1992. It will fund projects such as one to cap flaring from natural gas in Nigeria, which alone accounts for 0.2 per cent. of man-made global CO2 production. Another project under consideration is one to establish 15 conservation areas in Mexico, to ensure that the protection of Mexico's unique plant and animal species is maintained.

It is now clear that the developing world is likely to be the first, and worst, affected by climate change. The livelihoods of millions could be wrecked by the effects of rises in sea level. One has only to think of the beautiful but low-lying Maldive islands to appreciate the problem. We must also plan to help the hundreds of millions, especially in Africa, who could suffer from changes in rainfall and the loss of agricultural productivity. I shall deal with the special and desperate situation in the Horn of Africa and elsewhere later. The first priority is to help developing countries to understand the threat and to plan to deal with it. We are already helping Bangladesh to deal with existing flood problems. In December 1989 we hosted the major international pledging conference for the Bangladesh flood action plan. In addition, we are financing seminars for Ministers from developing countries on the results of the Intergovernmental Panel on Climate Change. The first one takes place in Mauritius on Monday. We have also offered the Governments of Kenya and Ghana finance for studies on the impacts of climate change on their countries.

We will be helping developing countries to play a full part in the preparation of a global convention on climate change when negotiations begin in February.

We are also helping developing countries limit their contribution to global warming. That is one of the key aims of our energy efficiency initiative, under which we are indentifying a number of countries such as India, China, Ghana and Nigeria for increased assistance. We have already made a grant of £50 million to India to help improve its energy efficiency.

Perhaps the gravest environmental threat facing the developing world is deforestation. The main responsibility for managing tropical forests rests with the governments of the countries which house them, but we can help and are helping. Two years ago, we were financing 80 projects at a cost to the taxpayer of £45 million. Now, there are over 200 projects in progress or in preparation at a cost of £160 million.

Our contribution is part of an overall international effort, so I shall comment on developments in strengthening international action. A number of hon. Members have rightly been concerned at the need to reform the tropical forestry action plan, the TFAP. It is more than a year since I called for a real reform of the TFAP. An independent review was established, which made recommendations in June. Good progress was made at the governing council of the United Nations Food and Agricultural Organisation in Rome three weeks ago.

Britain's chief natural resources adviser has been asked to advise on the establishment of an independent new consultative group to guide the work of TFAP. Therefore, we are right in there, ensuring that reform takes place. That will help to make TFAP more open, effective and accountable, and we expect 1991 to deliver these reforms. More than 80 tropical countries are voluntary parties to TFAP, and that is why the mechanism needs to be made effective and to work.

The International Tropical Timber Organisation also has a key role to play, especially in making sure that traded timber comes from well managed sources. My Department has taken over the lead on the ITTO in Whitehall, because ITTO is increasingly concerned with the better management of forests. We are working towards the next meeting of the ITTO council in May, which will be looking, in particular, at incentives to help developing countries to manage their forests sustainably.

At the Worldwide Fund for Nature symposium this week on sustainably managed timber, I committed us to a roundtable discussion to look at incentives. We are already funding a key study on labelling, and there is more that I hope we shall be able to do in that matter.

On many environmental problems, we are learning by doing. We are also carrying out major natural resources research programmes, now running at £25 million a year. The twin pillars of sound science and sound economics underpin our work. That is why we play an integral part in the decision-making process on the European Community's science and technology development programme for developing countries.

I pay particular tribute to the outstanding British organisations with which we work, such as the ODA's own Natural Resources Institute, the Oxford Forestry Institute, the International Institute for Environment and Development, the Institute of Hydrology and many others. The British expertise that is being contributed to sustainable environmental development across the world is nothing short of outstanding. ODA funds much of that, but the British effort, in institutes and universities, is remarkable.

The environment will remain fragile and in danger if we do not tackle the other great problem ahead. If the world's population continues to grow at its present rate, there is no way that environmental resources can fulfil our needs. The world's population has doubled since 1950. It will double again, to 10 billion or more, during the next century, by about the year 2050. About 95 per cent. of that increase in population will occur in developing countries.

Most developing country Ministers whom I meet recognise that rapid population growth is an important problem. Many are committed to trying to tackle it. There are some positive signs. Over 40 per cent. of couples throughout the world now try to plan whether or not they will have children; 300 million more want to do so, but have no access to family planning services.

We know of many societies where, despite intense health education, couples do not want to take action to limit family size. That may be for religious or cultural reasons, but once the benefits of a planned family are well understood, surprisingly good progress can be made. Dr. Mechai of Thailand has proved that.

A central issue in population planning is the role and status of women and their ability to contribute successfully to stable family development. Women must have better education and employment opportunities. They must have access to better health care, with high quality services for infertility and sexually-transmitted diseases. The AIDS epidemic, with which we must also deal, heightens the urgency. But men have health responsibilities, too. Frequently, women in the Third world must rely on them to ensure that they get a fair deal.

I described the way in which our emphasis on good government has shaped the way we work with developing countries on new projects. The same applies to population. We have developed firm principles to guide our aid for population. We believe that every child should be a wanted child and that each couple should have the right of access to means for regulating fertility.

The British Government do not support the use of any forcible measures to limit family size or increase the use of contraception. It must be up to couples to decide their actions on the basis of choice, which must be available to all.

All the ODA's health advisers now look for opportunities to do more work on population and women's health. We are training our other advisers and administrators to find similar opportunities. That is all part of our programme to increase support for population activities. We have already helped to increase the availability of family planning services in Bangladesh, India, Pakistan and Kenya. We have plenty more to do in the years ahead. We often achieve the best results through working more closely with multilateral population agencies, including the United Nations population fund and the International Planned Parenthood Federation. I am discussing how we can increase our support for them.

The NGOs, the private sector and the academic community have a major role to play in our bilateral work. This year, we agreed a five-year programme of increased support to the Liverpool and London schools of tropical medicine. Early next year we intend to meet major British NGOs, to share ideas on population assistance and to draw on their experience and strength. We expect to do more in partnership with the private sector. We want to do more to ensure that we get the best British brains and energy to back us in this important task.

I come to the dreadful prospect of famine in Africa, a subject which is of great concern to the whole House. We are all aware of the deteriorating situation in the Horn of Africa and particularly the threat of famine in Ethiopia and Sudan. We and the NGOs have been fully alive to this prospect during 1990 and have been working steadily at our programme of assistance throughout the year.

As a result, the Government have so far this year provided over £23 million in emergency aid to Ethiopia and Sudan. We are now well advanced in preparing our emergency programmes for next year. Crucial in this planning are the reports coming in from the World Food Programme and FAO crop assessment missions to Ethiopia and Sudan.

It is clear already that there will be severe famine and widespread loss of life in Ethiopia and Sudan next year unless action is taken by the international community to help those desperate people. If those nations were free of war, their chances of survival would improve. With our NGO partners, we shall, in the coming few days, decide exactly what further assistance to provide in the Horn of Africa to help avoid a similar catastrophe to that which occurred in 1984–85.

Apart from the crisis in the horn of Africa, there are crises in countries such as Angola and Mozambique. I assure the House that we have not lost sight of those and the many other humanitarian problems that are to be faced across the world. We shall be doing all we can to provide the necessary emergency aid. The development challenges of the 1990s reflect a fast changing world.

Mr. Dennis Skinner (Bolsover)

The Minister said that she was anxious to help the people of the horn of Africa. She should be telling the Prime Minister and the rest of her colleagues in the Government that that area will not be greatly helped if we take part in an all-out assault in a war in the middle east. Action of that type would certainly not help the countries in need to which she has referred.

May I offer the right hon. Lady some advice about money? We do not need hypocrisy from Administrations who have cut overseas aid by about a half since the Conservatives came to office and who have bailed out the four national clearing banks in Britain—National Westminster, Midlands, Lloyds and Barclays—to the tune of£ billion in the last four years. Why do they not——

Madam Deputy Speaker (Miss Betty Boothroyd)


Mrs. Chalker

The development challenges of the 1990s reflect a fast-changing world. We need to respond flexibly to those changes, which means that we must address them country by country, sector by sector. Britain alone cannot solve the problems of the developing world. We do not try to—we try to work with our partners in the Community, the World bank and all the other organisations in which, together, we can begin to solve some of the problems and find new ideas that will help the developing world. We have been doing that solidly during the past five years, and I am determined that we shall continue to make a real and major contribution. I am delighted to be doing this job, because I am committed to an improvement in the state of the people of the developing world, as well as the lives of the people of Britain.

10.10 am
Mrs. Ann Clwyd (Cynon Valley)

My colleagues and I welcome the opportunity to debate the Government's claimed progress in promoting economic refonn and addressing population growth and the environment in developing countries. Those are vital issues and I only wish that we had the opportunity to debate the Government's development policy more often, in their time, rather than ours. This is the first debate on development policy initiated by the Government in a year and a half. There has not been a statement to the House by a Minister for Overseas Development since 1984, which is a disgrace. It is a sign of how little the Government care about development.

I welcome the Minister's comments this morning about her proposals to look urgently and in detail at the current famine in Africa—we realise that, in five African countries, the position is dire and that millions of people will die soon unless emergency aid is provided by the developed world. I hope that there will be an opportunity to debate that subject in more detail as soon as possible. Those of us who have been to countries like Ethiopia know how desperate are the needs of those countries.

For Africans in particular, this decade has been a disaster. In developing Africa, average income per person fell by 1.7 per cent. each year. Investment, export, imports and commodity prices also fell. Meanwhile, debt doubled to $256.9 billion. By the end of the 1980s, there were more than 150 million people severely hungry and undernourished in Africa. Despite all that, in 1988, Africa paid the industrialised countries $21.7 billion—more than we gave them in aid or loans. That is the reality. It is one of the reasons for the current famine, which is due not only to the weather, but to the fact that Africa is being bled dry by the developed world.

Before discussing the three main issues of economic reform, environment and population, I shall put the Government's policy and contribution to overseas development in context. The 1980s were a disaster for development. The progress of previous decades was rolled back in Africa, Asia and Latin America. Since 1979, the British Government have slashed the aid budget. This year, problems have been compounded by the Gulf crisis, increased oil prices, loss of remittances from the Gulf, the cost of resettlement of refugees, slower world economic growth and the diversion of attention from poverty in the Third world to the needs of eastern Europe.

In response, the Government have refused extra help to compensate for higher oil prices, and have dipped into the Third world's meagre pot to help out Egypt, Jordan and Turkey. Development is affected not only by the policies of the ODA but by the policies of the Foreign and Commonwealth Office, the Departments of Trade and Industry, of Energy and of the Environment, and the Treasury. The present Government seem unaware of that. We have rarely heard other Ministers even refer to the implications of their policies for overseas development. The insensitivity of Ministers may be because the Government do not have a coherent policy on overseas development. Where is the policy?

The new east-west relationship has changed the position of developing countries enormously, but there has been no reassessment of development policy by the Government. They have never even produced a White Paper on development. Surely they cannot still be relying on the last Labour Government's 1978 paper, "More Aid for the Poorest". When can we expect to see such a policy document?

The title of today's debate is typical. The Government have picked three of the most important issues in development, affecting millions of people's lives, and thrown them together in one debate. Why not have a debate on the alleged success of all the Government's development policies, on their overall strategy? I expect the difficulty arises because there is no such strategy. One might be expected to find details of the Government's strategy for overseas development in the British overseas aid annual review for 1990, but that fails to provide any sign of overall strategy.

The Minister should take credit that her Department has, during the past year, produced many glossy publications with nice pictures, but she may take some of the blame for the Government's lack of vision and strategy. But perhaps the priority assigned to development is best illustrated by its miserly aid budget. Not only has British aid fallen dramatically as a percentage of gross national product since 1979, but in real terms, by whichever expenditure measure one uses, Britain is still spending considerably less on overseas aid than it was in 1979.

As for the quality of aid, British aid last year went to more than 130 countries, including several that are not in the poorest category, such as Turkey, Portugal and Israel. The National Audit Office report published earlier this year gave several examples of how commercial considerations have frequently taken precedence over development needs in shaping aid policy under the Government. I do not want to repeat the many criticisms of the quantity and quality of aid that I have made in previous debates initiated by the Opposition, so I shall consider today's topics of environment, population and economic policy.

A new Government vision is needed most on environmental issues but, sadly, that is the sphere where it is most lacking. The only document that could possibly be called a policy document is the green glossy one produced in May, which lists project after project, sector after sector, and the many agencies and institutions with which the ODA works. It witters on about the importance of sustainable development, but totally fails to provide a vision of what it is and how to achieve it. It fails to emphasise that sustainable development requires a total change in the way we live and plan our lives, as well as an overhaul of the process of development in developing countries, and thus an overhaul of policy of development agencies such as the ODA.

If anything is to be done about poverty, world industrial production must, according to the Brundtland report, increase by five or ten times over the next 50 years. If that increase in production is to be sustainable, the technologies employed must be at least five to 10 times more efficient in their use of natural resources. There is no sign that any Government Department is responding to that challenge.

Let us examine the record. The Government proudly proclaimed a contribution of £9 million to enable countries such as India and China to phase out CFCs in compliance with the Montreal protocol. Developing countries certainly need financial help if they are to meet their global obligations, and I welcome the fact that aid for global environmental projects is separate from and additional to the aid budget for development projects. But while allocating that £9 million the Government in 1989 spent £80 million on energy projects and £30 million on mining in developing countries. These are projects which, if the record is anything to go by, will destroy the land and pollute the atmosphere in the countries concerned.

As the Minister said this morning, the Government recently announced that they will contribute £46 million to the new global environmental fund of the World bank —the United Nations Environment Programme and United Nations Development Programme. I welcome that pledge and the fact that it is additional to the aid budget; but closer inspection reveals that the £9 million for CFC substitutes will be taken out of the £46 million contribution to the new environmental fund.

This is not surprising. The £100 million for tropical forests announced by the former Prime Minister and frequently boasted about by other Ministers was not new money either. The £46 million is less than half what the Government are spending on the aid and trade provision projects this year. ATP projects too often work in direct opposition to environmental goals because they often subsidise the export of out-of-date technologies which are no longer in demand in the United Kingdom and are no longer allowed in many European Community countries.

The old-fashioned equipment used at the Rihand power station in India, with no flue gas desulphurisation, is typical. The Minister claimed this morning that ODA procedures have improved dramatically since. I remind her that the ODA's power sector mission in India reported in 1986 that additional energy would be most cost-effectivelly provided by the improved repair and maintenance of existing power stations and by more effective distribution, not by building new power stations.

Mrs. Chalker

I remind the hon. Lady that that is exactly why we have given £50 million to India for energy efficiency—to use existing equipment but to make it more efficient and to stop the waste of energy caused by some of the technology put in during the 1970s. It is wasteful technology, and we have to put it right. That is why we are tackling the problem job by job—to ensure that the money is wisely used to improve what is already there.

Mrs. Clwyd

I thank the Minister for that explanation. Can she explain why the ODA has carried on targeting aid on new power stations as well? Phase 2 of the Rihand power station is going ahead, I believe—

Mrs. Chalker

indicated dissent.

Mrs. Clwyd

—and I believe that flue gas desulpherisa-tion is still the order of the day on phase 1 of that power station.

Mr. Bowen Wells (Hertford and Stortford)


Mrs. Clwyd

I shall give way in a moment.

New power stations mean more jobs for the boys back home and more prestige for the recipient Government, whereas, as the power sector mission pointed out, repairing and maintaining existing systems involve high local costs and militate against the use of tied aid.

So, with only 10 per cent. of British aid untied—one of the lowest percentages of all OECD donors—it is easy to see why the ODA is still funding power stations, despite all its protestations to the contrary. It is fine to support British industry, but not at the expense of the third world.

Mr. Wells

One of the principal reasons for supporting the further production of electricity in India is the conservation of the environment. The unavailability of electricity for rural and urban populations means that the source of cooking heat has to be trees or wood. The construction of power stations in India will be a major conservation measure for the environment.

Mrs. Clwyd

I know the hon. Gentleman well enough to know that he would not claim that polluting the atmosphere in India, in the interests of providing people with electricity—I do not accept that that is the way to provide them with it—is the way forward. The massive pollution caused by phase 1 of the Rihand power station complex was heavily criticised by the National Audit Office in its report on aid to India. I do not believe that even Conservative Members would claim that the station has been an enormous environmental success.

It is not surprising that recipients suspect the ODA of funding forestry projects overseas for our own benefit rather than for their development. Let us take the example of the Karnataka—the so-called social forestry—project in India. It is heralded as an example of local participation. I understand that the Minister hopes that it will become a showcase of a reformed tropical forestry action plan, but the main community group in the area, Fevord Karnataka, has been unable to find details of the proposed project. The local forestry office refused the group documents. It wrote to the Minister for Overseas Development but she has apparently not replied. The suspicions seem well founded, since half the forest will be designated zone 2, a no-go area for local people. I hope that no Conservative Member will claim that this is an example of good practice.

People in the area think that the Government are funding a sink for the carbon emissions that Britain produces, and cloaking that as development. I remind the House that we are major polluters. United Kingdom citizens emit 2.64 tonnes of global warming gases each year, whereas Indians emit one tenth of that. If this is the best the Government can do to involve local people in forestry projects, they should give up right now. If they can do better, perhaps the Minister will tell us how.

It is essential for the sake of millions of people in the Third world, as the Minister said, to take immediate action to prevent or limit global warming. The thought that 68 million people would lose their land if the sea rose by one metre in Egypt, Bangladesh, Vietnam and China alone should be enough to spur the industrialised countries into action. Millions more farmers would be devastated by the effect of a warmer climate, particularly in arid lands. With 10 million people facing famine in Ethiopia and Sudan, and millions more in Angola, Liberia and Mozambique, the potential disaster is barely imaginable.

The Government's inaction on Britain's carbon emissions and their foot dragging in European and international talks makes it clear that the voice of the Third world is not getting through. Perhaps that is because no one around the Cabinet table cares enough to make their point on their behalf.

To return to the new global environmental facility, I am delighted that the World bank has realised the need to finance environmental improvements, but the new environmental fund will undermine long-term sustainable development if it means that the bank can once again ignore the environmental effects of the rest of its work. Over the years, there has been a litany of environmentally disastrous projects backed by the World bank. There is increasing evidence that some structural adjustment programmes harm the environment as well as the poor. It is essential for the bank to review all its lending policies if it wants to promote sustainable development.

In their green glossy, the Government claim that the ODA encourages and supports the efforts of multilateral agencies to incorporate environmental objectives in structural adjustment programmes. I doubt whether the Minister can give much evidence of that. It is ironic that, in the week in which we are debating the lack of a Government strategy on sustainable development, the Dutch parliament has approved its Government's new White Paper on sustainable development.

The Dutch are not just tinkering. The environment and ecology unit is expanding from two people to 14, and its budget is to increase fivefold, from 50 million guilders this year to 275 million guilders in 1994. The Dutch White Paper does not talk just about aid but deals with every issue affecting developing countries, including trade, the new east-west relationship, and the international economy. It seeks out a whole new definition of welfare, because GNP growth, the traditional objective of policy and the indicator of success, simply ignores the status of the environment and hence the real welfare of the people and the planet.

The Dutch White Paper recognises the enormous impact that trade can have on the environment. Our Government also understood the connection, when they promised at the Bergen conference to take environmental considerations into account in trade negotiations. In the GATT talks over the past few months, that promise has been broken, and British negotiators have pushed the environment to the bottom of their in-trays or dumped it in the nearest wastepaper basket.

The Minister rightly emphasised the important negotiations for the Third world, but was the Minister a t those negotiations? The GATT proposals would severely limit the ability of Third world Governments to regulate foreign companies involved in logging, dumping toxic waste, or mining. Legislation to protect scarce resources, such as the bans on the export of unprocessed tropical timber in Indonesia and the Philippines, would have to be repealed, because such legislation affects trade. Again, the Government have put free trade above environmental protection.

At last the Government have recognised the link between environmental damage and population growth. It is ironic that that priority received just 1 per cent. of aid expenditure in 1989. The Development Assistance Committee tables released this week show that Belgium, Denmark and Finland all spend more than 10 per cent. of their aid on health and population. On average, DAC donors spend 6.7 per cent. on that crucial sector but Britain spends only 2.9 per cent.

The planet will simply not be able to support 15 billion people. For the past 12 years, food production per person has fallen by 1.3 per cent. each year, and in several African and Asian countries, the population already exceeds the carrying capacity of the land. The demand for water is already growing several times faster than population. In the middle east, disputes over water underlie much of the tension and strife.

We must not forget the other reason for population issues being so important. Women need access to family planning for their own good health and their children's health and to give them the power to control their lives. That is why the issue of population cannot be considered in isolation. In 31 countries, women have virtually no access to family planning. That is why it has to be part and parcel of projects to improve women's health, education and status.

One of the clearest lessons of the last decade is that investment in women improves not only the quality of life, but is the best and quickest way to reduce the growth of population. Therefore, it is all the more disgraceful that the Government have failed to reach out to women and have failed to emphasise the kind of education that Third world women need.

One of the saddest parliamentary answers that I received from the ODA was on the percentage of women who are beneficiaries of ODA projects. The answer was 50 per cent., and it was based on the assumption that, as 50 per cent. of the population are women, therefore 50 per cent. of the beneficiaries must be women. If all the literature on women and development has taught us one thing, it is that women are systematically excluded from the development process unless their participation is actively sought.

The only multilateral organisation that actively works with women is UNIFEM, but the United Kingdom's contribution to that has sunk by three quarters in real terms since 1979. The Minister stresses the importance of female literacy. Literacy is vital in enabling women to control their own lives, to care for their families, to deal with the rest of the world and to improve their status. UNIFEM figures show a clear link between women's education and the reduction in infant mortality. However, the Government have refused to spend a single extra penny in international literacy year which aims to help the world's one billion illiterates to read.

The world conference on education for all in Thailand in March seems to have passed the ODA by. The Minister has stressed the importance of literacy. Why do the Government not undertake a new initiative on education, become leaders in the education-for-all strategy and set out to discover just how fast the birth rate can be reduced while producing innumerable other benefits?

I shall now deal with the Government's progress in promoting economic reform. In the 1980s, the ODA vigorously pursued the cause of structural adjustment, tying aid funds to World bank and IMF adjustment programmes. Meanwhile, other more enlightened donors were realising the devastating effects of traditional structural adjustment on people, especially the poor, and began using their money to cushion the worst effects of adjustment on the poor. Our Government have not done that but continue to view structural adjustment as the magic key to development.

The evidence of the 1980s has raised some fundamental questions about adjustment. The most important question is how to avoid the social and environmental damage that adjustment programmes have so far produced. Although the need for adjustment with a human face is increasingly recognised, in most cases compensation for the poor is simply added on after the economic squeeze. Even the programme to mitigate the social costs of adjustment accounts for only 6 per cent. of the estimated total cost of Ghana's adjustment programme.

We need a fundamental review of the adjustment formula. That does not mean shirking tough financial decisions or avoiding change: it means adjustment based on investment in people, the best resource that most countries have. Now even the World bank realises that structural adjustment must itself be adjusted. More than 1 billion people live on less than $1 a day. This year's world development report makes it clear that to reduce that number to even 825 million will require major changes in the policies of developing country Governments and industrialised country donors.

In September, the president of the World bank stated in his report to the development assistance committee that real progress in poverty reductions could be achieved through the adoption by developing countries of coherent national strategies. He says that that is the kind of policy reform that agencies should promote and he described two basic elements of such strategies. The first are policies to promote efficient and sustainable growth. That may sound old hat, but there is a new definition of efficient. It means growth that uses intensively poor people's most abundant resource, labour, thus creating income-earning opportunities for the poor. Is that the kind of efficiency that British aid will promote from now on?

The second basic element of a national anti-poverty strategy is the extension of basic services—health care, education and access to family planning. This investment in human capital not only benefits the poor but boosts the prospects of growth. In future, will the ODA restrict support for structural adjustment only to those programmes that protect and extend expenditure on social services? The World bank has recognised that sound macro-economic policies are important only as the one part of a national strategy to reduce poverty through efficient and sustainable economic growth. Will Government policy to promote economic reform also recognise this from now on?

The IMF world bank paper also makes clear the importance of external economic conditions. It says: Sustained growth in developing countries is dependent on stable real prices of traded goods, steady expansion of foreign markets, and the availability of foreign financing on appropriate gate terms. External economic conditions are grim—third-world debt stands at $1,200 billion, commodity prices are at an all-time low, exchange rates in the United Kingdom remain high, the oil price has soared and, now, plans to open up world trade have collapsed.

A recent World bank report of the effect of industrial countries' policies on developing countries estimates that industrial country protectionism reduces developing country national income by roughly twice the amount provided by official development assistance. I simply do not understand how the Government can argue for structural adjustment in developing countries while ignoring the desperate need for adjustment of the global economy.

Mr. Conable recommended that donors increase their aid and focus it more clearly on poverty-reducing activities, saying again that bilateral donors should give much greater weight to an assessment of recipients' efforts to foster sustained reduction of poverty when deciding upon the allocation and composition of the development aid programme. Are the Government willing to give more aid to Governments who invest in the poor and give only carefully targeted anti-poverty aid to Governments who do nothing for the poor?

I have to assume that the answer is no, because, for all the talk of good governance and aid conditionality, this year not a single British Minister has mentioned anti-poverty strategies in the definition of good governance. In his speech on Africa in June, the Foreign Secretary said that Governments who tend towards pluralism, public accountability, respect for the rule of law, human rights, market principles, should be encouraged. He did not mention policies to reduce poverty. Nor were such policies mentioned in his article on aid conditionality, in his party magazine, "Crossbow".

The Minister for Overseas Development, in an answer to a parliamentary question, stated: Economic and social progress depends to a large degree on effective and honest government, political pluralism, observance of the rules of law and sound market-based economic policies."—[Official Report, 11 July 1990; Vol. 176, c. 269.] Again, there is no mention of poverty. Many of these goals are worthy, as I am sure my hon. Friends will agree, but good governance must include policies for the poor. The Conservative party does not mention them, but we believe they are essential.

What of the other aspects of good governance, particularly political reform? The political changes in Africa and in eastern Europe and the moves towards the multi-party system are welcome. However, I question how much we can thank the ODA for this. Human rights are new in the rhetoric of this Government, but they are a long-standing concern of the Labour party. For years, we have been demanding, but with little success, that the ODA and other Government Departments stop supporting tyrannical Governments with arms sales, trade deals and lavish diplomatic support.

Nevertheless, I cannot give a whole-hearted welcome to the Government's apparent change of heart in the Foreign Secretary's speech in June. I do not trust them to support these principles consistently, because the record shows that they will always put politics before people. They proved that in Nicaragua, where, having given millions to the dictator Somoza, they refused aid to the first Government of, for and by all the people. They used the excuse of human rights abuses, among others, to maintain an aid embargo on Vietnam and Cambodia. Vietnam, one of the poorest and most war-devastated countries, is now struggling to achieve its own version of perestroika. Neither country has a spotless human rights record, but they are a long way from being the worst.

Meanwhile, the Government provided free military training to the Filipino presidential guard, despite evidence of brutal torture and execution carried out by it in 1988. The Government sold military equipment to the Chinese after Tiananmen square, to Pinochet's regime in Chile and to Iraq.

Mrs. Chalker

This has nothing to do with the aid programme.

Mrs. Clwyd

The Foreign Secretary thinks that it has a lot to do with the aid programme. Whatever the Minister thinks, she has mentioned it many times as one of the conditions of aid.

How has this new policy been implemented since June? It has been applied to the Sudan and Somalia, but human rights abuses in Kenya and Ghana, two British favourites, have studiously been ignored. Kenya was the second largest recipient of British aid last year, and Ghana the fourth. The Minister mentioned civil service reform in Ghana, but that is not the only reform that should be pursued there. After the riots and mass arrests and the Government crackdowns in Kenya in July of this year, President Moi thanked the former Prime Minister in public for refraining from criticising his suppression of dissent and for ignoring those who were urging her to criticise Kenya. As for Ghana, where the PNDC regime has maintained political repression and widespread abuse of human rights for nine years, the ODA appears to be as supportive as ever, as the Minister told us this morning. She has visited Ghana several times, but could not find time to talk to representatives of the Movement for Freedom and Justice in Ghana, who wanted to meet her in London.

If the Government cannot apply their principles consistently, they will achieve nothing but resentment and strife among both Governments and peoples of developing countries. What is lacking throughout the aid programme is consistency. Small changes have been made for the sake of having been seen to be green. There is much rhetoric about reaching the poor and women, but the reality is that the aid programme is too small, too commercial, too distorted, too irrelevant to other departments, too conservative—with a small and a capital C—to meet the real needs of the third world.

This week, the financial institutions made a profit of £1 billion from giveaway electricity privatisation—two thirds of the entire aid budget. Only when a British Government devote at least 0.7 per cent. of GNP to fighting poverty, and ensure that the needs of the developing countries are taken into account by all Government Departments, will they be able to claim progress in tackling the root causes of environmental degradation and rapid population growth and in promoting development for the world's poor. I have little hope that this Government will, at this late stage in their fortunes, come to realise their obligations, but I assure the House that the next Labour Government will.

10.48 pm
Sir Charles Morrison (Devizes)

Fortunately, we shall have to wait a long time for the eventuality suggested by the hon. Member for Cynon Valley (Mrs. Clwyd).

My right hon. Friend the Minister ranged widely and comprehensively over the subject of the debate, and in doing so, reflected the great extent of the work of the ODA and her deep knowledge of her subject. What she said amounted to a remarkable demonstration of the success that the Government are having in applying their development policy.

The hon. Member for Cynon Valley drew attention, not unnaturally, to the amount of work that still needs to be done. Like her, I am always delighted to ask for more. I am sure that the Government will respond whenever possible. The hon. Lady should have given the Government more credit for some of their achievements. She criticised them for not doing more about third-world debt. I am sure that some of my hon. Friends will refer to that later. However, it is worth mentioning that Britain has led the way by cancelling the aid debts of 22 of the poorest countries, at a cost of almost £1 billion, with £263 million of that from African countries. In addition, my right hon. Friend the Prime Minister, when he was Chancellor, announced in September important new proposals for debt relief for the poorest countries that were pursuing economic reform. And Britain is the largest single contributor to the subsidy account of the enhanced structural adjustment facility of the International Monetary Fund, which lends £4.5 billion to low-income countries at highly concessionary rates.

It is ridiculous to pretend that the Government have a poor record on overseas debt. Of course, there continue to be huge problems, and they must be overcome, but the Government are tackling them with great energy.

Mr. Skinner

Amid all the hon. Gentleman's talk about cancelling the debt repayments of the third world, why does not he recognise the fact that since 1987 the Government have given £3 billion in tax relief to the top four clearing banks? Some banks are up to ther necks in debt from third-world countries. Rather than give such relief to the top four clearing banks, which make massive profits, why not give that money to third-world countries so that they can clear their debts? The Government would then be doing the decent thing, for a change.

Sir Charles Morrison

I do not think that the hon. Gentleman could have been listening to what I have been saying. The Government have a remarkable record. He may think that the record should be even more remarkable, but fortunately the electorate have consistently concluded for a long time, and will do so again, that the pie-in-the-sky policies suggested by the hon. Gentleman are not practicable. I shall continue to make my speech in the way that I intended.

I wish especially to refer to what my right hon. Friend the Minister called the other great problem—population growth. She should be congratulated on having initiated the debate. For the first time, it specifically links enonomic reform, the environment and population growth. She referred to the United Nations conference on the environment and development, which is to be held in Brazil in 1994. I am concerned that, to date, population growth has been left off the agenda. A preparatory meeting of western countries was held in May in Bergen, and a joint communique that followed that included only one reference to population in 21 pages of text. I hope that my right hon. Friend will do everything in her power to ensure that the issue of population growth is put on the agenda for the Brazil conference. Likewise, the environment should be considered for inclusion on the agenda for the next United Nations conference on population in 1994, which follows earlier conferences in 1974 and 1984.

The facts about world population growth have been repeated often, but it does no harm to repeat some of them again. I find it remarkable that during my lifetime the world's population has risen from 2 billion to almost 6 billion. As my right hon. Friend said, the population may stablise towards the end of the next century, but by then it will have doubled at least once more. It is estimated that before it stabilises, the population will be somewhere between 10 billion and 14 billion.

The reality of the current population position is somewhat worse than we assume. For example, a recent census in China showed that the population is 14 million higher than was originally estimated. It is difficult to grasp the scale of population growth. An editorial in The Lancet on 15 September stated: Global population grows by a remarkable 1 million more births than deaths every four days. If a bomb as destructive as the one that destroyed Hiroshima had been dropped every day since 6 August 1945, it would not have stabilised numbers. The British Medical Journal of 3 October commented: The population bomb has exploded already. Twice as many people are alive in 1990 as were in 1950. In fact, the world's population is increasing by three people every second. That is 250,000 a day.

The national and local scene is even more frightening than the global scene. For example, the population in Kenya doubles every 17 to 20 years, and the side effects of population growth are equally enormous. I and a number of other hon. Members visited India some two years ago. When we were in Bombay we were told that the rate of migration to that city—and this has nothing to do with internal population increases—was 1,500 people a day, 10,500 a week or 546,000 a year. I know that those statistics are staggering, but that is what is happening.

The impact of population growth on the environment, both urban and rural, is enormous. In particular, there is great pressure on croplands, forests and grasslands, which together with the sea supply our food and raw materials. Some 11 per cent. of the 13 billion hectares of the land on the world's surface is grassland; 25 per cent. is pasture for feeding animals; 31 per cent. is forest; and the remaining 33 per cent. is either wasteland—largely desert—or it has been built on or paved over. The area of cropland increased until 1981, but since then it has been diminishing as the newly reclaimed land is offset by that lost to degradation or converted to non-farm use.

Grassland has been shrinking since the mid-1970s, as overgrazing has converted it slowly to desert, particularly in the southern Sahara region. Forests have been shrinking for centuries, but that trend swiftly accelerated from the middle of the present century, and particularly from 1980 onwards.

Population is undoubtedly the greatest cause of those effects. The increasing number of livestock needed to match population growth places extra demand on grassland. In Africa in 1950, 238 million Africans relied on 272 million livestock. By 1987, the human population had increased to 604 million, the livestock numbers to 543 million. It is easy to appreciate the effect of that on soil.

The estimated population growth is responsible for about two thirds of deforestation in developing countries, most of which is due to forest clearance to provide more arable land. At the same time, the increase in non-agricultural land in the 15 years to 1986 was 58.7 million hectares, to meet the need for dwellings, factories, roads and so on. Population growth is, therefore, having a continuing and major effect on the appearance of the world's surface.

I visited Nepal as well as India two years ago, and clearly saw the effect of the clearance of trees from the hillsides to provide small patches of land on which to grow food. The consequence was that nothing remained to soak up the water, which, together with the soil, swiftly went down the hills and increased floods downstream, in Bangladesh—to which my right hon. Friend also referred. Work must be done there to cope with flooding, but it is equally important to cope with the population growth that is the cause of increased flooding in that country each year.

The hon. Member for Cynon Valley—

Mrs. Clwyd

On a point of order, Madam Deputy Speaker. Perhaps I can help the hon. Gentleman. As Cynon Valley has the highest male unemployment in Wales, and the highest overall unemployment rate, it is called sign-on valley by some people, but the correct pronunciation uses a hard "c".

Sir Charles Morrison

I am extremely grateful to the hon. Lady. I shall try to get it right in future. I used the pronunciation that I have heard from time to time on the radio and television, but I am delighted to be put right.

The hon. Member for Cynon Valley referred to carbon dioxide, as did my right hon. Friend, and population growth has undoubtedly had an effect on greenhouse gases. It is estimated that worldwide emissions of carbon dioxide rose from 2,349 million tonnes in 1950 to 6,793 million tonnes in 1985, and it is calculated that population growth accounted for almost two thirds of that increase. Sheer numbers of people, together with their consumption of goods, food and raw materials and the technology that they use, has a major environmental effect.

Given that background, perhaps it is not surprising that the head of the United Nations Fund for Population Activities, Dr. Nafis Savik, has written: The next 10 years will decide the shape of the 21st century. They may decide the future of the earth as a habitation for humans. Therefore, slowing down the rate of population growth is an essential factor in any lessening of environmental damage.

What is to be done? Total United Kingdom aid in the current year is £1,620 million and next year will be £.1,720 million, with continuing increases thereafter. Those sums may not be enough, but they are huge none the less—and in total, amount to a very generous contribution by not the Government but the British people and the British taxpayers. Aid for population programmes increased from £6.5 million in 1981 to £17.2 million in 1989. Even so, that amounts to only a little more than 1 per cent. of the total aid budget. Such is the importance of population aid, that that percentage should be much higher.

For some years past, the rate of population growth in a number of developing countries has been so high that, despite reasonable economic growth, standards of living have been falling. That must be contrary to the underlying philosophy of foreign aid. Instead of more people being enabled to live a better life, more are living a worse life —despite the fact that the overall wealth of their countries may be improving. There must be a greater effort to slow population growth rates, with still greater emphasis being placed on population programmes.

It strikes me that there is a certain hesitancy in a number of developing countries about asking for population aid. There could be a variety of reasons, but in some cases perhaps it is just that the countries feel that they should not seek aid for that particular purpose. But there is also a hesitancy on the part of some donor countries to provide sufficient aid for population programmes. Both donors and recipients should remember that vast numbers of people want smaller families— seeing that as a short cut to a better education and greater wealth.

In Bangladesh, where the family planning services have been available for a considerable time, not only did the total fertility rate fall from seven children to five between 1975 and 1989 but the present generation of women want only three children. If there is hesitancy about giving aid to Governments for population programmes, perhaps it will be possible for the British Government to give more aid to non-governmental organisations. Under the umbrella of the International Planned Parenthood Federation, there is a comprehensive, international network of family planning associations run by dedicated and enthusiastic staff. They need a huge increase in support for their work on health programmes, women's education, community development, and women's rights —all of which are undertaken as part of their family planning programmes. It should be remembered that NGOs allocate their resources more economically and effectively than Governments. For example, when I attended a conference in Quito in Ecuador last spring, one Latin American Member of Parliament told me that he reckoned that in some countries up to 90 per cent. of the money set aside for population programmes was used up by bureaucracy rather than for the provision of services. There is a great deal to be done and time is certainly not on our side.

In almost every respect, the quality of United Kingdom aid is high and it is well administered. Population aid should be increased steadily from the present proportion of about 1 per cent. to about 5 per cent. of the total. If that can be done, not only will it be enormously beneficial in controlling population growth but, as a consequence, it will be beneficial by sustaining the environment and helping to ensure economic development in the developing world.

11.10 am
Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

At this time of year, one of the joys for grandparents is to join in the excitement and the nativity plays in schools. This week, one of the littlest Dunwoodys was appearing in a nativity play. I do not know whether it was typecasting, but he was playing a black sheep. I thoroughly enjoyed the play, except that at the back of my mind was a comparison between it and the nursery group which I had visited two weeks before, in a township in Namibia.

With other women from Socialist International I had the opportunity of travelling to meet women of the front-line states. We exchanged views and, I hope, useful plans for the future. I also had a chance to see some of the degradations and horrors that still exist throughout southern Africa.

One thing which saddens me about this morning's debate is that it is thought adequate for the House to debate the future health and happiness of vast populations all over the world on a Friday morning in a rather relaxed fashion, as though, when we leave here and go to our constituencies, we will have done our duty. Yet, because we are a developed country, and because we spend so little of our overall budget in ways that will change the quality of life and allow such children to have any future, I believe that we have a greater responsibility than we are demonstrating today.

Throughout the debate, it has been clear that the Government believe that as long as they are prepared to talk about the amounts of money that can be channelled into direct commercial arrangements, they have somehow fulfilled their task. There is a deep and underlying hypocrisy in the attitude of the European Economic Community and of Governments like our own, which believe that we can somehow or other look at overseas aid as though it were independent of other Government policies. Too much of our aid is directly tied to commercial objectives. Too much of our aid is undermined by other Government policies.

I was delighted to hear what my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) said about new commitment by the Dutch Government. I should be more delighted if that commitment was represented in a more positive way at Community level.

The African, Caribbean and Pacific countries' arrangements are almost automatically undermined by the Community's attitude to trade. Let us be clear what that means. The restrictive and protectionist policy of the European Economic Community act against the very trade policies of the countries that they most seek to help under the African, Caribbean and Pacific arrangements.

The Community views too many of its overseas partners as an easy means of generating minerals and money-making projects for developed European countries. The Community sees no illogicality in erecting barriers against the trade products of the third world, while pretending that it is seeking to assist with development budgets. That deep and underlying divergence of view makes it difficult to take seriously the suggestion that the Government want an extension of development elsewhere in the world.

I acquit the present Minister of any responsibility for the policies of many of her colleagues, but it is important for us to understand the poverty and misery about which we are talking. The women at the conference in Namibia —women from the front-line states—talked all the time about the realities of what is happening to them and the political dangers to which they are subjected every day. The women of Angola highlighted the fact that many of their children have run away, not only from the everyday violence of war, but from the dangers of conscription and pressure from both sides to join a war which is not of their making and which they wish to end.

Many children who live in the streets in towns in Namibia have run away from the hunger and death in their own countries. They are almost all young boys and they have no means of support. There is no easy way for the Namibian Government to incorporate them, and inevitably they live by crime and are constantly at risk.

The Namibian Government have been given little assistance by other countries to deal with the problem of their returnees. I was horrified to learn that 50,000 white civil servants, many of them young and almost all South African, remain in place in Namibia. If the Government want to take an immediate practical step in job creation and attacking poverty in Namibia, they could offer a positive resettlement scheme and assistance for those civil servants in South Africa and a training system to enable the black population to fill the jobs immediately. It is ridiculous for the incoming Government to have to face that situation.

For many African women, reality is violent—violence in the townships, and in the day-to-day problems that they face. I wish that there were some way in which one could organise a day of anger for the mothers of the world—a scream of fear and frustration for those women who know that they cannot feed or clothe their immediate families, and who know that the problem cannot be deferred until tomorrow. No matter how genuine and real our concern, when we talk about population control, we are not dealing with the problems that they have to deal with now.

During our meetings we also heard stories from the Angolans and representatives of other front-line states of the problems continually facing them. For example, the South African Government are still deliberately involved in political destabilisation and there are great pressures in the South African townships upon people with political problems. In many cases they are clearly exacerbated by the South African Government.

The Minister must understand that the Government should not support the removal of sanctions against South Africa before there is clear evidence of a change of mind by that Government. If she does not do so, she will contribute to the very anarchy and destabilisation that will wipe out all hope of a civilised life for those women and children.

When the women talked about the attacks that they face in their townships, their fears for their children and the lack of education and training, they were talking about something that they had to face day after day without any clear evidence of support from outside. We came from nine different European nations and they asked us to take back this message to not just our Governments but our people: that those who forget that we are not islands and that we have brothers and sisters who require our assistance are doing themselves little good in terms of creating a balanced society.

We were lucky in that we had with us the Swedish Trade Minister. She understands the close relationship between development and trade. Members of other European Parliaments and members of front-line states—women who had been elected to office—were also there. The one thing that we had in common, whatever our colour or religion—or, indeed, our girth—was our commitment to the creation of a movement that would make the urgency of the problems of the children of Africa clear to those who believe that one can talk of development in terms of gross domestic product, commitments or glossy pamphlets. The women of Africa require more than gestures; they require money, education and immediate support to feed and clothe their children and to put decent water into their townships.

When I went to the nativity play with my grandson, I thought, "I am privileged. I wish that I could bring that to every other mother in Africa."

11.21 am
Mr. Bowen Wells (Hertford and Stortford)

May I say how wonderful it is to have such a tremendous Minister for Overseas Development still in her job, despite various other ministerial changes, and how very much I continue to welcome her energetic, enthusiastic and professional approach to her job. I am glad that my right hon. Friend did not move on. She succeeded another excellent Minister for Overseas Development. That excellence and drive have resulted in an increase in real terms in the aid programme since 1983 of which we can all be proud.

That approach can be sharply contrasted with the approach of the hon. Member for Cynon Valley (Mrs. Clwyd). Her approach to this subject is sour, misleading and wrong. I am surprised by that, because I know the hon. Lady personally and she does not exhibit that quality, but she has introduced that sour note into debates on the subject since she took up her present post.

Mrs. Dunwoody

What a load of nonsense.

Mr. Wells

The hon. Lady may consider it nonsense, but I feel that it is the case.

It is in order for the Opposition to criticise when the Government deserve criticism—perhaps in terms of the volume and direction of the aid budget. The hon. Member for Cynon Valley partly covered that, but not in the sense of being constructive. She was trying to destroy any such activity not just by the Government but by this country through the overseas development programme. A much better approach which was exhibited by her predecessors, would be to look on it creatively and constructively.

I should like to point out one little matter where the hon. Member for Cynon Valley was wrong. She claims that poverty was not mentioned in the official documentation issued this year on the British Government's aid programme. Under the heading "British aid policy", the 1990 annual review states: Aid priority: British aid comes in a variety of forms and its purpose is only too clear: the overriding aim is to help poor countries to help themselves in achieving self-sustaining growth and developing their societies in their own way. That is a statement of British aid policy and its direction. Britain's aid programme is distinguished by the fact that 80 per cent. is given, donated or lent to poor countries —those countries where the per capita income is less than $700. That aid programme is helping in major ways in many countries.

I should have liked to cover several points—debt, aid quality, private investment, economic and political reform, aid administration and trade under the general agreement on tariffs and trade—but I do not believe that the House would tolerate my taking time to deal with all of them. I shall deal with just some.

My hon. Friend the Member for Devizes (Sir C. Morrison) dealt with one of the overriding problems— population growth. When I was with the Foreign Affairs Select Committee in Zambia, I was depressed by the results of a survey of women to find out when they wanted to get married and how many children they wanted to have. More than 90 per cent. wanted to get married before they were 20, and they wanted to have more than 10 children as soon as they could after marriage. If that is the perception of the young women in Zambia, we are facing a problem in terms of lack of education and ignorance of population control measures and the way in which their behaviour will affect their lives and the lives of many other people in Zambia. I support my right hon. Friend the Minister—a serious programme is needed, backed by the British aid programme and the international community, to change those perceptions, and to provide the education that will do that.

The other major overriding issue which we cannot avoid is that of debt, particularly in sub-Saharan Africa and Latin America. The debt situation is getting worse. I welcome what I must call the Chalker-Major initiative, which follows the Lawson initiative and tries to help the most indebted and impoverished countries. The Toronto terms were agreed first but, as my right hon. and hon. Friends will have noticed, we need a further initiative. The Trinidad terms are the beginning of that further initiative.

It is worth reminding the House that our Prime Minister had experience in the third world during his training and service with the Standard Chartered bank. He served in Jos in Nigeria, and has personal knowledge of the problems of the impoverished people of that country and a great deal of sympathy for those who suffer similar impoverishment in other countries. That bodes well for efforts to push forward a sensible and constructive programme dealing with the debt issue.

I ask my right hon. Friend the Minister to press the new Chancellor and my right hon. Friend the Prime Minister to make the new Trinidad terms endure longer, and to make certain that we take into account all the debts of a country and create a sort of debt mortgage, which, in many countries, will have to be combined with debt forgiveness. The amount that should be paid by indebted countries should be manageable and an amount that we can expect them to realise from their export earnings, leaving sufficient for them to continue to import the necessary spare parts and obtain support from outside to get their economies going.

Not only individual bilateral debts between one country and another but private sector debts, usually acquired through banks, must be renegotiated. We should roll up with those debts trade credits. The Export Credits Guarantee Department and other trade financing institutions in other countries have a major role to play in that. All debts must be taken together and a programme for a 25- to 30-year period must be worked out so that Ministers of Finance do not constantly parade in and out of Paris and London to reschedule their countries' debts.

My right hon. Friend the Minister must address the problem of indebtedness to international financial institutions. Before I deal with that, I congratulate her on the major part that she has played in finding a way round the rigidity of the international financial system as it affected Guyana. The British Government put in over £30 million to repay Guyana's outstanding indebtedness to the World bank and the International Monetary Fund. Canada also provided money and the United States of America provided a minuscule sum. The money went to repay the country's debts and its outstanding interest, and the lending programme at the IMF and World bank was started again. That was a constructive, and a risky move to take in Guyana, but I hope and pray that it will bear fruit in that devastated country.

We cannot apply the solution used in Guyana to many other countries. If we did, a large proportion, if not all, of our aid budget would be absorbed by such gestures. That is why we must persuade the international financial institutions to take a more responsible position on debt. They cannot continue to lend to such countries, particularly for project aid but also for programme aid. If underlying projects fail, the institutions cannot then demand that countries repay their debts in full, with interest, on time. The institutions must take responsibility for their investment programmes. A way must be developed to reschedule debts and probably revolve them so that the money is invested in creative projects to enable the country to earn the foreign exchange it needs eventually to repay its debts.

The current position of the World bank and the IMF is that they will not reschedule or forgive debt. They are resisting change in that position. The IMF has lent money from special funds to countries in sub-Saharan Africa over inappropriately short periods. The period is now seven years, which is a great advance on three years but it is still not sufficient to enable the countries to restructure.

The IMF is now demanding repayment. The only way in which that can be done is through the grant window of the International Development Association, but that money should not be used for that purpose. It should be used for constructive and badly needed social projects such as housing, population control and health programmes. Repayment of debts is the wrong use of the IDA money, although I welcome the new IDA 9 settlement, which shows an increase over IDA 8. Nonetheless the settlement is far short of what is needed, particularly if it is to be used as a fund to repay international financial institutions.

I now turn to aid quality. I congratulate my right hon. Friend on the excellent programme that she has initiated and supported in South Africa to assist the black population. She boosted the programme enormously in 1986. The budget has reached a total of £8 million, £4 million of which is spent directly on African education, which badly needs further support not only from Britain but from the international community if South Africa is to make the transition from an apartheid state to one which can run its affairs effectively and well.

Education under the Bantu Education Act is so deplorable that even able people come to universities without the necessary qualifications to enter them. The universities have tried desperately to raise the education of those people to standard university entry level. That effort costs enormous sums of money which the universities do not have. Our contribution to the programme is greatly appreciated, but it needs to be boosted and put on an international footing if we are to obtain sufficient money to help South Africa to catch up with what it should have been doing for many years.

The sensitivity of the programme in South Africa is fascinating. It has generated the most enormous enthusiasm in our embassy and on the part of our most excellent ambassador Sir Robin Renwick. Embassy staff are working hard in the townships producing admittedly tiny schools made out of corrugated iron in shack towns. Nevertheless, they are the first schools in those areas.

Our people are there helping the teachers to organise, teaching them and giving them time off to learn new techniques. They are equipping the schools with toys and learning equipment which otherwise would not be available. There would be no books, pencils, paper or other items of necessary and basic equipment if it were not provided by the British aid programme.

The British aid programme is also working in Alexandria, a most appalling township just outside Johannesburg. We have given money for the construction of houses for old age pensioners who do not have a home. We are supporting a home for old people, the director of which gave each one of the Members of Parliament who visited it, including my right hon. Friend the Member for Guildford (Mr. Howell), a big hug and a kiss on both cheeks.

The programme is immeasurably well received and respected by all who benefit from it. Several people attended a reception to tell us how it needed to be boosted. They spoke with great enthusiasm about the aid programme and told us about the politics of the African National Congress, the Pan-Africanist Congress and the Azanian People's Organisation. As a result, we have a political contact with the black population of South Africa which will prove invaluable in building up the confidence of the whole population in southern Africa and re-establishing proper trade, social and cultural relationships with it.

I should like to see that quality of aid extended to our whole aid programme. We have a problem, in that we have always been wary of being called neo-colonialists. Government aid programmes are rigidly Government to Government. The administration of both British programmes and European development fund programmes run by the directorate general VIII needs to be more flexible. Programmes are dominated far too much by what the host Government believe should be done and too little by what we regard as the priorities in that country. Particularly when we are dealing with Governments which have failed, are corrupt or have "inappropriate economic policies"—in the jargon of the aid programmes—the wisdom of continuing to support such programmes is questionable.

For example, in Zambia we support the education programme, when the Government themselves are not prepared to put money into it. The result is that the whole education programme is spiralling downwards into an unacceptable quality. If the Zambian Government refuse to put their money in but demand that we put our money in, we should say no. We must tell them that they must put their money in. We want to help but we cannot do so if they refuse to put money in and use it instead to build huge party headquarters or headquarters for the Government copper company, while denying it adequate money for investment to enable it to compete with other copper-producing countries worldwide.

We cannot and should not tolerate that kind of distortion. We must rethink our aid programmes so that they are well directed to the poorest people and have aid objectives with which we agree. Obviously, they must be agreed with the host country too, but they should deal with matters about which we are enthusiastic, and they should go in the direction that we think is right.

That requires stopping the administration of the aid programme as it is done at present. The three-year rolling programme is pre-set and inflexible. Each country gets a little bit. A country received so much previously, so it gets the same sum this year, plus a little extra for inflation. That aid framework programme must be revised. We must be able to respond more easily not only to immediate problems, such as hurricanes and famines, but to the changing picture within those countries and our perception of them.

The aid programme must be strongly connected to private enterprise and investment. When private investors go to the aid programme administrator, they must not hear, "Our money is wholly committed for three years. We do not have any. Go away and find somebody else to help with your project." In the past two months, when I was in Southern Africa, I was told that the private sector had nothing to do with the programme of the Overseas Development Administration. That attitude must change.

I am delighted that we are beginning to change the attitude between the ODA and the Commonwealth Development Corporation. As hon. Members will see from publications, when the ODA is asked what the private programme is, it says that it has the CDC. Indeed, it has, and the CDC does excellent work. However, there is competition between the ODA and the CDC for funds from the aid budget. As a result, instead of boosting and developing CDC-ODA programmes, the CDC is starved of the money necessary to do the work. The sum needs to be doubled or trebled. I am surprised that a Government who are as devoted as I am to private enterprise as the engine of growth in third-world countries have not done more.

I am delighted that CDC and ODA representatives are now meeting and beginning to plan joint projects. For example, one would normally expect a forestry project to have roads, telephone systems, electricity and so on. ODA grant money is needed to provide the electricity, housing, roads and infrastructure, and CDC investment is needed for a properly conducted timber project which does not destroy but harvests the forests, and which continues to encourage its redevelopment. I hope that we shall see much more of that sort of combined project, which has just begun.

We must ask the ODA to think about its programmes in relation to private investment. It is only the resumption of private investment which will address the poverty problems. It is only with private investment and private initiative on the part of the inhabitants of the host country and with inward investment from abroad that we shall begin to see the economic development which is vital, if those countries are to recover any economic prosperity and to provide schools, education and health care for women and children. In that way, they can begin to help themselves, which is an objective stated in the ODA's report.

It is vital to get the politics right. In his speech in June to the all-party group on overseas development and the Overseas Development Institute, the Foreign Secretary set a new tone when he said that we cannot go on lending to countries with Governments who are not accountable to the people, where the rule of law does not apply, where there is no freedom of the press and where we are confronted with trade barriers. Those countries must lower their barriers to allow trade, just as we must under the general agreement on tariffs and trade, which we failed to do in December, but which I hope we will succeed in doing in January.

Restrictions on trade, for example in textiles, are incredibly damaging to the ability of those countries to recover and to begin to earn their own living. We must lower our barriers, so that we in turn can ask them to lower their barriers to allow trade to flow, develop and grow. Failure to do so will plunge us into a 1930s–1940s depression. People will not be able to trade with each other and we shall not be able to get the growth which is vital if we are to have any chance of dealing with the increased population, which my right hon. Friend outlined so ably to us.

Although our aid programme is not sufficient and although we may need to adjust its direction and emphasis, it is a most valuable contribution to many countries throughout the world. We should be proud of the increase in real value terms. Let us encourage the Government to increase it further. Let us encourage the Government and the Opposition to be constructive, so that we can be proud of what our country is doing.

11.46 pm
Sir David Steel (Tweeddale, Ettrick and Lauderdale)

It is always a pleasure to follow the hon. Member for Hertford and Stortford (Mr. Wells) in these debates. I have always regarded him as one of a small minority of Conservative Members who speak with great knowledge and genuine concern on this subject. In particular, I agree with him about the excellent programme organised by our embassy in South Africa which I have seen. He will agree that some of the structural lessons from it do not apply to conditions other than those in South Africa. Would that they did. However, he is right that there are some lessons to be learnt from the effective nature of that modest but invaluable programme.

Before I turn to the main subject of today's debate, I wish to pick up what the Minister said about the famine in the Horn. There is a sense of public disquiet, nay outrage, that four or five years after the great emotional public response to the famine in Ethiopia, we should again ask people to dip into their pockets. It is not that they are reluctant to do so again, but they are asking what we have done since that great appeal to put right the situation in that and other parts of Africa. I have two suggestions to make to the Government.

First, as the Minister said, civil war exacerbates conditions of famine. That is true not just of Ethiopia, but of Mozambique, Angola and other countries. Those wars would not continue if we could starve the countries of their supply of arms. Now that we have a politically more effective United Nations organisation, it is time to revive the proposal of Hans Dietrich Genscher, the German Foreign Minister, for a United Nations-organised, international arms sales register. We in the west cannot continue to allow our private companies to profit from massive arms sales to all parts of the world and then wring our hands when civil wars continue. I should like the Government as a matter of policy to take action in the United Nations to stop the supply of arms to those areas, so that resources that are wasted on armaments may be put to peaceful uses. The figures are appalling. In the past few years the Governments of developing countries have spent double on arms what they have spent on health and education. We cannot be surprised that tragedies such as that in Ethiopia continue year after year while some people profit from the arms trade. The Government should make that issue a priority in their mission in the United Nations.

I do not know of the experience of other hon. Members, but I am struck by the number of young people in our country who want to find an outlet for their idealism and energy through service in the third world. Although the Government support Voluntary Services Overseas, it is aiming to increase its volunteers to a modest 1,500 next year. We should return to the spirit that was prevalent in the mid-1960s in Britain and America. Then there was a great well of organised support and qualified young people to go out to help the third world. Such voluntary work is cost-effective. People are willing to increase knowledge about the growing of crops, and organise irrigation schemes, engineering works, water supplies, immunisation programmes and family planning programmes. We should do a great deal more to harness the desire of so many people to undertake such voluntary work. Official Government-to-Government programmes are welcome, but voluntary assistance has a great role to play.

This debate is welcome, despite its thin attendance. It is held against the continuing background of the disproportionate allocation of resources and population on the globe. One quarter of the world's population lives in the rich north and we enjoy four fifths of the world's income —three quarters of the world's population lives in the poor south and they are saddled with just one fifth of the world's income.

The Minister gave us the now-familiar figures of projections for population growth. Since 1950 the population has doubled and it is forecast to double again by the middle of next century. The Minister will also be aware, however, of more authoritative and gloomy reports, and I am glad that the hon. Member for Devizes (Sir C. Morrison) devoted his speech to that important topic. He quoted from the report of United Nations Fund for Population Activities, which said: The next 10 years will decide the shape of the 21st century. They may decide the future of the earth as a habitation for humans. If we took those words seriously the Chamber would be full today as we tried to tackle the problem. Unfortunately, the global population explosion and its link to threats to the world environment is far more serious than our people and the general political debate appreciate.

We have already heard that the developing countries have enough problems providing for their current populations, let alone trying to tackle the problems caused by substantially increased ones. The environmental consequences of a failure to tackle the population explosion will result in problems relating to food, fuel, water and land supplies as poorer countries make a desperate attempt to provide for their unacceptably increasing populations.

This country has a responsibility to lead on population and environmental issues. Last year Britain hosted the conference that agreed to phase out all CFC emissions from the European Community by the end of this century. I was disappointed, however, that we did not back the German and Danish Governments who were pressing for earlier targets. We are a little complacent about the scale of the destruction of the ozone layer which we shall allow to continue through the next decade. The fact is that 80 per cent. of greenhouse gases originate in the developed countries and, therefore, the responsibility lies with us to make a greater effort to reduce those emissions.

Just as the new political muscle of the UN should be used to control arms sales, so we should beef up the United Nations Environment Programme to make it the appropriate body to administer an international global climate fund to monitor and enforce CO2 reductions. It should co-ordinate the necessary international action to achieve that. For that to happen, however, UNEP must be given greater political and financial backing.

I do not want to make a long speech, but I must take issue with the hon. Member for Hertford and Stortford who said that we should be proud of our aid budget. When I visit schools I discover that the one thing that is fixed in people's minds is that, many years ago, the UN agreed that we should aim to devote 0.7 per cent. of our gross national product to overseas aid. People may not know much about overseas development, but that target figure is firmly in their minds. During the lifetime of the Government, we have never reached that target. The Select Committee on Foreign Affairs has called on the Government to set a timetable for achieving that target, but it has not materialised; nor have we had an acceptance of that target in principle.

Mrs. Chalker

The Government have always accepted the target in principle. We cannot stipulate a timetable, but we shall work towards it as fast as we reasonably can, taking into account what all the other donors are doing.

Sir David Steel

I withdraw my claim that the Government have not accepted that target in principle, but such acceptance is no good if one looks at the facts. In 1979, when the Government came to office, we were spending 0.5 per cent. of GNP on overseas aid. We were still short of the target, but from then on our contribution went down and down. The lowest contribution to overseas aid came in 1987—after eight years of Conservative Government—when we contributed 0.28 per cent. of GNP to overseas aid. Our contribution has increased a bit since, but it is no good for the Government to say, "Oh, haven't we done a wonderful job of turning the economy round? We are such an effective Government." That means nothing when one considers the pathetic slide in our contributions to overseas aid.

I also understand that we are well below the average European Community contributions. The Minister referred to other donors; she should be aware that EC member states have set varying targets for achieving the 0.7 per cent. contribution. This year, the average contribution from the EC is 0.52 per cent. of GNP—well above our contribution.

I certainly would not say that we should be proud of our overseas aid budget. I hope that the Minister will not take offence, but I am trying to give her greater power in the counsels of the Government. For that reason, and not because of her sex, I wish that she had been admitted to the Cabinet in the recent reshuffle as she might have had even more leverage in getting a more generous contribution from the Treasury.

Mr. Wells

I appreciate the constructive way in which the right hon. Gentleman has approached the argument, but he would agree that it is fair to point out that the statistic based on GNP per head will vary if the GNP goes up quickly. As a result of that a country could be spending more money but spending less on trade and provision. In the interests of fairness it is also worth remembering that the British aid budget is the sixth largest in the world.

Sir David Steel

Yes, but the whole point of the original UN target was to link it to GNP so that as a nation's prosperity increased so did its contribution to the less fortunate. As we are, in relative terms, comfortably off and, as our standard of living has increased in the past decade, it is a shame that we have also watched our contribution to overseas aid decline.

Mr. John Battle (Leeds, West)

The point of the GNP figure was to establish a base line. For example, Japan now gives more aid than any other country, although in GNP terms it is lower. Our problem is that we are giving less as a percentage of GNP than other countries which claim that their economies are worse off than ours, and we have had a booming economy for 10 years.

Sir David Steel

The hon. Gentleman is agreeing with my point.

I want, at the same time, to compliment the Government, and I can do that by agreeing with what the hon. Member for Hertford and Stortford said about debt. The Government's record on official debt has been good.

The decision to write off £16 billion for 22 or 23 countries has been generous and imaginative, and they are to be congratulated on it.

I now ask the Minister to go further by bringing pressure to bear on the private sector banks. The hon. Member for Hertford and Stortford spoke about institutional lending, and I agreed with him. But there is also a great deal of bank debt owed to this and other countries. The banks lent on an irresponsible scale at a time when interest rates were lower than they are now. Many countries which borrowed are in great difficulty now because of the increase in world interest rates and the lack of success of their economies.

Whereas a few years ago when one made this type of suggestion the banks wrung their hands and said, "We must be careful not to set off a banking crisis," they have since set aside, and organised their structural internal funds to cope with, bad debts. Instead of allowing those funds to lie fallow, waiting for bad debts to happen, the Government should, in a dialogue with the banks, urge them to follow the Government's example and write off some of the longstanding debts of the poorest countries.

We have seen a few welcome changes of attitude from the Government since the change of Prime Minister. We note the decision, for example, on compensation to haemophiliacs. There is another change of attitude which I hope the new Prime Minister will introduce, and that is to reverse the disastrous and hasty decision that was made when the Conservatives took office in 1979 to charge increased fees for overseas students. Not only was that policy short-sighted from the point of view of the needs of the developing world, but it was lamentably short-sighted from the point of view of Britain's national interest and influence in the world.

It would not be costly to reverse that decision. I urge the Minister to get back at the Treasury and, in particular, to bite hard on the ear of the new Prime Minister and say, "Here is another gesture which would make a big difference to Britain's standing in the world at relatively little cost." I urge her to take that action.

12.2 pm

Mr. George Gardiner (Reigate)

I join in the congratulations that have been extended to my right hon. Friend the Minister on her comprehensive speech in introducing the debate and for the diligence that she brings to her office.

The hon. Member for Cynon Valley (Mrs. Clwyd) made some disparaging comments about a speech by the Foreign Secretary last June to the Overseas Development Institute in London. I wish at the outset to acknowledge the significant contribution that that speech made to thinking on this subject. To many of us, it came like a fresh breeze across many of the stale old arguments on overseas development aid that we have heard over the years. Indeed, I was glad to detect gusts of that fresh breeze in the Minister's speech today.

The speech of the Foreign Secretary was given under the title, "Prospects for Africa in the 1990s", and it is on the experience of sub-Saharan Africa that I shall dwell today. The countries of that region, many of them Commonwealth countries, have been recipients of heavy British development aid, yet any observation must lead to the conclusion that all that aid has done almost nothing to elevate the economic condition of the ordinary people in those countries. Indeed, often the reverse has been the case.

In the last 20 years, the real per capita income in many sub-Saharan African states has actually dropped. For example, 10 per cent. of Tanzania's entire GNP is made up of overseas aid, yet its economic condition continues to deteriorate.

What has gone wrong? Why has all our development aid over the years not had its intended effect? Could it be that we are supplying it in the wrong way? In his speech to the Overseas Development Institute, the Foreign Secretary drew some comparisons between the experience over the last 30 years of countries in sub-Saharan Africa and many in south-east Asia around the Pacific rim. Many of the countries in both regions, he said, were once ruled by colonial powers. Both had had the advantages and disadvantages of that experience. Many in south-east Asia have fewer natural resources than countries in Africa, yet over those decades the standard of living of those Pacific rim countries has leapt ahead, while in sub-Saharan Africa it has stagnated.

The Foreign Secretary was careful about drawing easy comparisons, yet he put his finger on the essential difference. By and large, those Pacific rim countries have had good government and, just as important, an open economic system developing free market economies. On the other hand, too many in Africa have suffered from bad government, often in dictatorial one-party states, with highly interventionist and collectivist economies.

The hon. Member for Cynon Valley was selective in quoting from the Foreign Secretary's speech. My right hon. Friend also said: Economic success depends to a very large extent on effective and honest government, political pluralism and, I would add, observance of the rule of law, freer and more open economies. These are choices for Africans, not for us to make. But aid donors can help where the will is there by providing assistance and training to strengthen legal, financial and other institutions which help form the fabric of a healthy society. Today, the Minister gave examples of that.

The Foreign Secretary continued: And they should consider potential recipients of aid in the light of certain criteria. Countries which tend towards pluralism, public accountability, respect for the rule of law, human rights, market principles, should be encouraged. Governments which persist with repressive policies, corrupt management, wasteful discredited economic systems should not expect us to support their folly with scarce aid resources which could be used better elsewhere. He went on to point out that those were precisely the tests that we were now applying in eastern Europe. I believe that that approach should be made a watershed in British development aid policy.

That gives rise to some interesting lines of thought, many of which were developed in a stimulating report issued last month by the United Kingdom branch of the International Freedom Foundation under the title: "Recommendations for the Future Conduct of British Government Aid and Development Policy." I will not ask the Minister today to comment on the report's proposal that the Overseas Development Administration should be disbanded and replaced by a new overseas enterprise agency within the Department of Trade and Industry. I have a sneaking feeling that she would not agree with that suggestion. That is an idea worth pursuing, although perhaps not in the context of the debate.

I have a couple of thoughts that I shall develop in the light of my right hon. Friend the Foreign Secretary's analysis. The first is perfectly summarised in the report of the International freedom Foundation: Traditional aid policy has served to reinforce the dirigiste, highly interventionist, economic policies of many Third World states and has not contributed to the political liberalisation of these societies. By failing to tie the continuation of aid to massive economic and political restructuring, western governments have, in effect, rewarded the pursuit of authoritarian administration in the underdeveloped world. The undemocratic regimes of countries such as Zambia, Tanzania, Uganda, the Seychelles and elsewhere have been given no incentive to change their ways. That is certainly borne out by my own observations in Zambia, which has not only a one-party constitution, with all the stagnation and wasted talent that goes with it, but an economic system dominated by parastatal organisations, with all their managerial posts entirely within the patronage of the central party organisation. It is small wonder that Zambia has a basket-case economy, with many elements distressingly similar to those experienced within the Soviet Union today.

However much development aid one tips in at the top, it will all be frittered away long before it serves to raise the living standards of ordinary people at the bottom. For years, the excuse has been made of the apartheid regime next door and the armed struggle waged by the African National Congress. But that will not wash any more. The fault for Zambia's economic stagnation lies fair and square within its own political and economic structure.

But at last the light is dawning. Zambians have been promised multi-party elections next year. We welcome that, although we wait to see how fair and free they will be. I submit that all sub-Saharan African countries must be told that, unless pluralistic political systems are instituted and the market system encouraged, they can expect development aid to tail off. What goes for eastern Europe must go for southern Africa too.

The second thought prompted by the speech of my right hon. Friend the Foreign Secretary is that we should look again at the practice of pouring so much development aid in at the top of the still collectivist economies. Instead, we should direct more to the bottom and help individuals and families in the third-world countries to pull themselves up by their bootstraps. That would mean not going for ambitious infrastructure schemes, although they are often important, but giving individuals the basics to improve their own economic conditions and serve as points of growth in their economies at the grass roots. That policy is the very reverse of collectivism, but experience suggests that it would have a far more potent effect.

The ODA has experience of such a system in several parts of the world, as we heard earlier in the debate. I have seen it at work in South Africa—in the squatter camps around Cape Town, where groups of women have been given sewing machines to develop their own dressmaking businesses. Machines to make wire fencing or building bricks have been given to small co-operatives, which in turn have spawned other small industries around them. Tools have been given to make furniture and sheds to serve as factories. It is from such acorns that third-world economies can grow, but to do so they must have a free, non-collectivist economic environment.

I welcome the remarks of my right hon. Friend the Minister today about the need to involve local people. Often good development policies require direct contact with such people. We should not always rely on what are often inefficient Government agencies in some of the third-world countries.

Many more thoughts flow from the speech of my right hon. Friend the Foreign Secretary last June. We can only hope that the logic of his diagnosis will be followed through in the Government's future aid policies.

12.15 pm
Mr. John Battle (Leeds, West)

We should check what could be described as the looseness with which we use language when discussing policies. When I reflect on the title of the debate, which refers to progress in assisting economic reform … in the developing world", I challenge the word "progress". Evidence suggests that there has not been much. I also challenge, somewhat controversially, the phrase "developing world". Signs seem to suggest that some countries are developing rapidly, while others are going downhill.

Another phrase that should not be lightly slid over, is "economic reform", which can mean many different things in different contexts. Even within this Government's lifetime the instruments of economic reform change and take on different characters and contents.

This year the World bank produced the "World Development Report 1990", its 13th annual report on world development indicators. What was striking about it was the word "poverty" haunting the cover. It was exactly the same word as haunted the cover of the 1980 report. The 1990 report states: The world economy enjoyed moderate growth in the closing year of the decade. But the auspicious picture was not uniform. The industrial countries saw favourable developments in growth, trade and investment. Real per capita incomes grew (and poverty declined) in South Asia and, even more markedly, in East Asia. But in some countries of Latin America and in most of sub-Saharan Africa, real per capita incomes, living standards, and investment have slipped. For the poor in these countries, the 1980s was a lost decade. The report goes on to spell out that the number of poor people will increase in the years to come, given the present signs of world development.

A similar report was published by the International Labour Office in 1987. It said: The world labour situation has deteriorated further since the first two volumes of the World Labour Report were published in 1984 and 1985. Real incomes from work, the principal source of income for most households, have fallen in many countries. The great majority of workers in sub-Saharan Africa and Latin America, both wage workers and the self-employed, have suffered a drop in real income of as much as 30 to 40 per cent. or more since the beginning of the 1980s. It seems that all the analyses show that people have been getting poorer in the past decade. In recent months we have heard estimates of between 5 million and 10 million people facing starvation in the Sudan and Ethiopia. Only yesterday, we heard that as a result of crop failure in Eritrea and parts of Tigray, 6 million people could face widespread disaster.

The United Nations Food and Agriculture Organisation report states: With reserve stocks virtually depleted after last year's poor harvest in Eritrea and Tigray, widespread loss of life is inevitable unless further emergency relief and logistic support for its distribution are mobilised. It is absolutely plain that the international position has been getting demonstrably worse in terms not only of emergency relief and aid, but of the relationship between trade and development. The spiral of world economy is working against, not in favour of, the poor countries.

What is Britain's response? Sadly, I suspect that our reponse to the latest statements of the projected famine in Africa will be that people will wait for the pictures of famine camps to appear on television again. Perhaps we become anaesthetised by television pictures. It is as though we leave to information technology and the mysteries of satellites the ability to make the only connections. We can see what is happening in our front rooms but we are reduced to passive spectators—almost voyeurs of what is happening on the world scene. Our emotions are challenged, but we do not believe that we need to work through our interdependence or to think about the causes of world hunger and poverty. It is as though we are being reduced to passive subjects and if we are subjected to too much we switch it off and hope that the poor will go away.

The result is a lack of analysis of the complex nexus of relations that the modern economy weaves around the world. There is a lack of awareness that small actions and decisions that we make, when compounded, have consequences for millions of other people throughout the world, who suffer or celebrate as a result of what we do.

I have been reminded of a letter written and signed by young people in Latin America: The crops in Argentina, the American embargo of wheat to the USSR, the European Common Market, the crop surplus in France, and hunger in India are all part of the same web. A transistor radio made in Korea, which I buy here at a low price, involves the low salary of the workers, the repressive regime in Korea, Japanese economic policies, American capital … nemployment in my own country, and problems which will involve my children and grandchildren. That is why I suggest that aid and trade and activities in other areas of economic policy and commerce must be related to each other when assessing the Government's aid programme.

We are also experiencing a new environmental awareness in an interdependent world. The Minister said that environmental problems know no boundaries., but rather than facing up to the shared responsibilities that we should adopt to the environment, there are some who assume that they should take over those responsibilities. There are even people abroad who claim that the Amazon rain forest belongs to them, and there are others who put the unequal restraints on pollution across boundaries to their own commercial advantage.

I offer an example of this from my constituency. In Armley in Leeds people are dying of a deadly disease known as mesothelioma because they worked in a factory that produced asbestos. When they went home dust was blown out of the factory at night and lay like snow on the streets and on school playgrounds. So people in the neighbourhood contracted the disease. The factory closed in 1956, but years later people are still dying.

After the factory closed in Leeds it was transferred, lock, stock and barrel, to India, where it opened again without the same restrictions and continued to pollute beyond the reach of the controls implemented here. The irony is that some of the families that I represent in Leeds have relatives in India who will go through the same suffering and death as their relations in Armley. This is a classic example of exporting pollution and of economic injustice on an international scale, using boundaries to commercial advantage instead of tackling environmental problems as shared responsibilities.

Just as our neighbours are nearer to us than we sometimes like to think, so the causes of international injustice are nearer than we are preapred to face up to. I remember the Band Aid concert in 1985. Late that night a promoter was asked what he thought of the money that had been coming in. People had been ringing in with donations all night, and he said that there had been an excellent response but that we needed to shift away from private charity and start demanding public justice. We need to move from private compassion to questioning international economic, commercial and political structures. We need to replace emergency relief work with genuine development work.

Many of the young people who took part in Band Aid are now surprised to hear that famine is again threatening in Ethiopia and the Sudan. They really believed that they had solved the problem. The title of this debate suggests progress, but the evidence shows that little progress can be reported back to these young people.

During the whole of the past decade official Government policy has been to reduce the aid budget. Official development assistance is down 24 per cent. since 1979, when it was £2,091,000, Today the figure is £1,579,000. Aid programmes for developing countries were cut by 15 per cent. between 1979 and 1989. Gross public expenditure on overseas aid has fallen by 7 per cent. in the same period. At the same time as challenging this reduction, we must insist that the Government acknowledge the crucial role of trade. I remember a cartoon produced in Mexico which showed a huge man handling a Mexican peasant. He held out a teaspoon in one hand. In the teaspoon was a little pile labelled "Aid". But the other hand was holding the peasant by the throat and on the huge man's arm was enblazened the word "Trade". So, as the teaspoon of aid is offered the trade structures are strangling its recipient.

An example from our corner of the world is the fact that the trade share of developing countries with the EEC has dropped. Their exports to the Community have fallen by 10 per cent. since 1984. That is why the GATT talks are so crucial. If there is only one economic model, as suggested by the hon. Member for Reigate (Mr. Gardiner), it seems to have come up against ultimate breakdown—the deadlock that is holding up the talks. As the world moves towards new bloc politics, with President Bush suggesting in south America recently that north and south America could form a trading block as a bulwark against the EEC linking up with eastern Europe, we could end up with a world divided between the Americas, Europe and the Pacific rim countries. Then there would be a danger of the three major blocs squeezing out two thirds of the developing world. We must work to facilitate the genuine incorporation of developing countries in the multilateral trade system. Systems such as general system of preferences must be made more effective for developing countries.

We also need a wider internationalist vision in politics and economic decision-making in Britain. It is necessary in our trade, aid, cultural exchanges and diplomatic relations.

For years the non-governmental organisations have led the way and have had insufficient Government backing. The Minister spoke about Government aid supporting those who are committed to better government. I hope she does not mean that we should impose a single political and economic outlook on other countries. We should not say, as has been said, that there is no alternative to the market economy. Some people in America suggest that recent developments have changed history. I hope that in their arrogance the Government will not suggest to the rest of the world that economic history as we know it has come to an end and that there is only one model for the economy.

Mrs. Chalker

It is important to correct the hon. Gentleman on two matters. I have never said, and the Government will never say, that only one model of government or economic reform should be imposed on any developing country. Economic reform should be sustainable. It should attract investment and encourage countries to spend within their limits. In my winding-up speech I shall deal with the matters raised by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel). The hon. Member for Leeds, West (Mr. Battle) spoke about non-governmental organisations. I am frequently accused of speaking too much about those organisations, so I shall be brief. In 1989–90 we spent more than £65 million with the voluntary sector on the work that it carried out. I am totally devoted to the joint funding scheme and my hon. Friend the Member for Reigate (Mr. Gardiner) spoke about the good work of the NGOs. We have more than quadrupled their funding over the past five years and I shall again increase the contribution this year.

Mr. Battle

I have never had such a long intervention from a Minister and I take it as a compliment. I accept that the Government support NGOs. I hope that the policy implications of the work of some NGOs and their comments will be borne in mind by the Government.

Although the Minister did not refer to the single model economy, the hon. Member for Reigate certainly spoke about it. The Minister spoke about spending within limits. I hope that the Government will not define those limits for other countries or set parameters. It is not only our Government who support the single economic model; the policy is beginning to infect other countries.

The European Community recently published guide-lines for co-operation with developing countries in Latin America and Asia. It was published on 19 June in Brussels and contains this interesting passage: Economic co-operation consists, essentially, of activities aimed at establishing a 'common language' with our partners in the fields of technology and economics. We should not start from a common language but should seek a common understanding based on mutual respect. We should not seek to promote a single discourse based on the free market model but should move in the direction of respecting different cultural and economic traditions and languages. Such respect leaves space for the development of economic and political imagination elsewhere. There is no such thing as the best single economy. The debate is the starting point for the issues that I have raised. To ensure that the policies adopted by the Minister's Department are for the benefit of the world's poor, the debate needs to continue in the formulation of Government policy.

The real challenge of the 1980s is to work towards a new world order with the practical objective of eliminating poverty at its core. The best way to tackle poverty is to promote the long-term development of the poor because that will reduce their vulnerability to emergencies and natural disasters. Some good project work is being carried out and there has been some late-in-the-day response to the need for emergency relief. However, that is a piecemeal approach. Tackling poverty should be at the heart of a positive and integrated policy that addresses the links between trade and industry, the environment and poverty. Such a policy should be backed by real budget commitments.

The integrated policy response that I have outlined is sadly lacking. British overseas trade and commerce from arms sales to tied-aid contracts are undermining an effective aid programme. The Minister may think that the export drives by the Ministry of Defence have nothing to do with the aid programme. I hope she will at least admit that they can undermine it by absorbing resources that are needed elsewhere.

While the Government use their newly discovered language of compassion, they lack the international vision to realise that the world needs to look forward to the 21st century. Late-in-the-day, piecemeal projects cannot be a substitute for positive international strategies that address the workings of what we must all acknowledge is a global economy. Tackling structural injustice on that scale must be done on the basis of co-operation and mutual respect. That will be the task for the new Labour Government of the 1990s.

12.34 pm
Mr. David Atkinson (Bournemouth, East)

Before I concentrate on my main theme, the Palestinian refugees, I shall say something about the crisis of food shortages in the Soviet Union, especially in the major cities. As the House will know, this is one of the many issues for debate at the Rome summit that is taking place this week. It is strange that the Soviet Union should be facing such a food crisis, as this year it has enjoyed a record harvest. As we know, one of the principal problems is that there is a failure in the organisation, transportation and distribution of that food from the points of production to the shops in the cities. I believe that some 20 to 30 per cent. of all the food that is harvested in the Soviet Union fails to get to the shops; it remains rotting in the fields and by the roadside. A lot more is hijacked by the Red Army, the KGB and the various Mafia-style organisations that are becoming more prolific in the cities.

The worry is that the same may happen to the food aid to be donated by the international community and the voluntary organisations. Earlier this week, a small delegation representing three religious-based voluntary organisations—the Women's Campaign for Soviet Jewry, the Jubilee Campaign and the Movement for Christian Democracy—led by the hon. Member for Liverpool, Mossley Hill (Mr. Alton) met Mr. Zamyatin, the Soviet Ambassador in London, to discuss how food aid and other humanitarian donations being raised by such organisations will be able to reach those for whom it is being donated.

According to Alexander Ornorodnikov, chairman of the Christian Democratic Union, which is organising the distribution of this voluntary aid in Moscow, among the people for whom it is organised and to whom it will be distributed are those who are so elderly and frail that they simply cannot stand in the inevitable queues in the food shops. Such elderly people have been found dead in their flats because they dare not risk their health standing in those queues.

There are also an estimated 600,000 refugees in the Russian Republic, about 65,000 of whom are in Moscow. Over 200 of them are living in tents outside a hotel near Red square. Many have fled from the Islamic republics. Alexander Ognorodnikov has a list of 800 families in urgent need and on a priority list for help.

There are 1,000 orphans in two orphanages in Moscow to whom this food will be personally distributed. There are 1,000 known disabled people on the list of those who are potentially unable to help themselves and who are consequently victims of the food crisis, but who will be helped in this way. There are categorised poor families, the elderly, the sick, the widows, one-parent families and the housebound, who will be helped through the Christian Democratic Union in the Soviet Union.

According to the hon. Member for Mossley Hill, the ambassador's response was positive. He has promised that an Aeroflot flight will be made available every week to transfer to the Soviet Union whatever food and humanitarian aid is raised in this country. However, we must remain concerned about ensuring that that aid will reach the people for whom it is being donated. That also applies to whatever international aid is agreed at the Rome summit. I look forward to my right hon. Friend's response to those points.

I hope that, at Rome, we will insist that the Soviet Union continues to implement its commitment to economic and political reforms, such as private ownership, the market economy, and a pluralistic society. That will do much to ensure that food shortages, like the communism that has caused them, will be confined to the dustbins of history.

As the House knows, one of the most depressed areas in the world for economy, jobs, and quality of life is Palestine. Since the armistice of 1949, Palestine has received billions of dollars of aid through the United Nations and through direct donations to sustain the refugees who were displaced by the Israeli war of independence, many of whom have experienced subsequent displacement because of further conflicts. I referred to their position in some detail during a summer Adjournment debate on 29 July 1988, following a visit to the area to prepare a report for the Council of Europe. Last month, I followed in my own footsteps to prepare a new report, which I want to share with the House today.

I hope that the House will agree that, after 42 years, it is an international scandal that 2.4 million registered refugees continue to be stateless and displaced. We all know why—it is the continued failure of Israel and its Arab neighbours to make a peace settlement possible. I shall refer to that again during my concluding remarks.

It is frequently suggested that it suits both sides to have so many Palestinians in the temporary conditions of camps in Lebanon, Syria, Jordan, and the west bank of Gaza. Of course, the original communities of tents and shacks for those who fled in 1948 have since been replaced by more permanent structures. All 61 camps enjoy infrastructures to varying degrees, such as the provision of education, health services, a sense of community, and special help for hardship families. However, that is due only to the commendable work of the United Nations Relief and Works Agency—UNRWA—in the near east and other international agencies.

This year, the United Kingdom donated £5.64 million to UNRWA for direct aid, and £56 million has been donated since 1979. That is money well spent. Despite the frequent frustrations and the crises in the provision of adequate resources to match the basic needs of refugees, UNRWA is probably achieving the most cost-effective service possible under the circumstances. It compares extremely well with all the other humanitarian services provided by the United Nations. It is my view that no donor nation could have cause to complain that its money was being misspent.

Of particular importance, but consistently overlooked, is the valuable contribution that UNRWA makes to the political stability of the region, where such stability is conspicuously fragile. Without UNRWA there would undoubtedly be more confrontation, casualties, and hardship in Lebanon, Jordan and the occupied territories.

Equally overlooked is Israel's attempt through its defence force, which has acted as the civil administration since 1967, to resettle permanently the refugees in the Gaza strip in neighbourhood communities having a proper infrastructure and municipal services. Although more than 80,000 refugees—some 12,000 families—have been rehoused in that way, most refuse, having been encouraged by the United Nations to believe that it would prejudice their rights pending the outcome of a permanent solution to their situation. It would be surprising if Israel did not now decide that it had other housing priorities to fund.

When I visited the west bank and Gaza in March 1988, the intifada was three months old. It is now three years old, and there is no sign of it coming to an end, despite 858 Palestinians killed, 30,000 injured, 10,000 imprisoned, and 58 deported. Not one of the Palestinians to whom I spoke held out any expectation that that form of demonstration and unarmed resistance against continued Israeli occupation would cease, unless there was real hope of progress to self-determination.

Three years of violence, curfews, strikes and destructive retaliation by the Israeli defence forces have reduced once attractive biblical towns to war-torn communities where squalor and graffiti are rife. Schools are closed so regularly that it is impossible to provide proper education. Municipal services are breaking down, as is the infrastructure—including roads and drainage—and there is disruption of the provision of medical services.

The physical and psychological effect of that on the people has been devastating. They no longer live, but exist. There can be no quality of life under such conditions, and a whole generation of young people have lost their childhood because they are influenced no longer by their elders or the notables of their Arab communities, but by more shadowy factions both within and without—and they are then eager to act as fodder for the visible resistance.

Since making recommendations in 1988, there have been some notable increases in the contributions to UNRWA's budget—in particular, from the Netherlands, Norway, Sweden and Italy. The United Kingdom's contribution has increased by some 15 per cent. over the past two years. The recent encouraging trend towards peace in Lebanon has resulted in the return of UNRWA's field office in Beirut, and it may yet pave the way for the return of the organisation's head office from Vienna. Thanks to the Llewelyn-Davies feasibility study into UNRWA's organization—funded by my right hon. Friend's Department, for which we are most grateful to her—a more effective performance is likely to emerge, although as that report stesses, a long-term commitment to capital expenditure will be required if its recommendations are to be completely successful.

I commend my right hon. Friend and her Department also for the grant and loan aids that they are giving to projects designed to discourage dependency and to encourage responsibility, enterprise, and income generation. My right hon. Friend is in regular contact with a number of non-governmental organisations, particularly Co-operation for Development. I was particularly impressed on my visits to two such projects. One was a television aerial manufacturer near Ramallah, who is now successfully selling his products to the Israeli market, and the other was a dental surgery in Nablus.

Palestinians are extremely entrepreneurial and will quickly produce a return on investment, and create new prosperity and jobs, if they are allowed to do so. It is to be regretted that, far from encouraging the establishment of such an economic base in its occupied territories, Israel actively discourages Palestinian enterprise in many ways, as I detailed in my report to the Council of Europe.

There have been two new developments of great significance for the situation of the Palestinian refugees since my 1988 report. The first is the effect of the Gulf crisis. For decades, refugee families have relied on incomes sent back to them by tens of thousands of Palestinians who have found work in Kuwait and other oil-producing countries—it has been estimated that between $130 million and £150 million is remitted to their families every year. But because of the crisis, that has ceased and Palestinians are returning home jobless. Not only is that resulting in an immediate end to such income, and a consequent increase in hardship cases for UNRWA to deal with; it has also added to unemployment and thus to instability in Jordan and the occupied territories.

In September, the Commissioner general of UNRWA issued a special appeal to major donors for immediate and generous assistance to overcome the shortfall in funding the emergency related programme. I look forward to learning from my right hon. Friend this afternoon of the Government's response to the Commissioner general's appeal. The second new development, which has far more serious long-term consequences for the region, is the recent. current and anticipated influx of so many Soviet Jews into Israel. Following the opening of the floodgates in October 1989, 120,000 have arrived in the first year, and the Jewish Agency, with which I had meetings—I also visited an absorption centre for Soviet Jews—expects that more than 3 million Soviet Jews will come in the foreseeable future. It is possible that the figure will be higher, as there are 11 million Jewish people living in the Soviet Union. Therefore it is understandable that Palestinian refugees fear that such an influx will prove to be at their expense in terms of jobs, housing and the resources that Israel currently makes available in the occupied territories.

In discussions that I had with four Israeli Ministers —it was my privilege to meet four Ministers in one day —including Mr. Sharon, the Housing Minister, it was suggested that there were no grounds for such fears, and that, in any case, Israel has assured the United States of America, as its major donor, that there will be no settlement of Soviet Jews in what is termed Judaea and Sumaria—the west bank.

I fear that I have found clear evidence that Soviet Jews are settling beyond the green line in east Jerusalem, and on the west bank. It must be obvious that, with the enormous numbers to come, a great deal many more will do so. Labour-intensive Palestinian refugee jobs will also be lost to Soviet Jews, not least because of the frequent imposition of night curfews, which prevent Palestinians from commuting daily into Israel to those jobs.

The aim of my report to the Council of Europe is humanitarian. It is not to recommend political solutions which will result in a just resolution of the refugee problem. Last Tuesday's debate on the Gulf crisis demonstrated once again that, even though there must be no linkage with that peaceful withdrawal from Kuwait which the entire world is urging on Iraq, the opportunity provided by such an outcome should be used to resolve other outstanding problems in the region. They include a resolution of the Kurdish problem, to which the entire world has turned a blind eye during the past 50 years and which will not go away. I see the hon. Member for Islington, North (Mr. Corbyn) in his place. He has championed the Kurdish cause for many years.

I was reminded of that cause by the reply by my right hon. Friend the Minister to my question which was published yesterday. I asked how much aid Her Majesty's Government have provided to Kurdish refugees for each year since 1979". My right hon. Friend replied: two grants totalling £550,000 to assist Iraqi Kurds in Turkey and ethnic Turkish refugees from Bulgaria."—[Official Report, 13 December 1990; Vol. 182, c. 480.]

Mr. Jeremy Corbyn (Islington, North)


Mr. Atkinson

I see that the hon. Gentleman wants to catch my eye. I suspect that I am anticipating what he wants to tell me, but I gladly give way to him.

Mr. Corbyn

I thank the hon. Gentleman for giving way and for his reference to me. I very much agree with what he said. Is he aware that some of the 30,000 Kurdish people who fled from Iraq to Turkey in 1988 are still living in three camps in Turkey? They are not recognised as refugees by the Turkish Government. So far as I am aware, none of the aid which has been allocated has got through to the camps—it has been blocked by the Turkish Government. I am sure that the hon. Gentleman agrees that that is scandalous. Does he agree that the instability in the region is caused partly by the Palestinian issue and partly by the long-term issue of the rights of Kurdish people in Turkey, Iran, Iraq and Syria? Until that problem is resolved, there will be no peace in the region.

Mr. Atkinson

I am grateful to the hon. Gentleman for what he says. I shall pursue this matter further in the opportunity which is provided on Tuesday 29 January, when the Council of Europe is to debate a report and will inquire into precisely what has happened to the Kurdish refugees in Turkey and to the international aid which has been given to them.

We are talking about the Kurdish refugees from Iraq who are fleeing from the poison gas attacks of Saddam Hussein's air force in 1988, when 3,000 to 5,000 of them were killed. I have a moving account by a 19-year-old boy who saw what happened when those gas bombs were dropped. I shall quote it, because it should be on the record: The bombs dropped and a green smoke arose. The people scratched their eyes, and then shook. They screamed out and then fell to the ground and shook again. Then they were still. We went down into the gorge and found a slime over their eyes and also running from their nose and mouth. The next day, men with goggles and gloves came and piled up the bodies. Some were still alive, but were piled on anyway, and then set on fire. There were screams coming from the burning bodies. They will be with me for the rest of my life. That is Saddam Hussein. How right we are to show that man up for what he is.

The Kurdish people populate five countries—Iran, Iraq, Syria, Turkey and the Soviet Union. Their right to self-determination deserves recognition by the rest of the world, now and certainly when the Gulf crisis is over, or they will continue to be persecuted, continue to be refugees and continue to be tempted into terrorism—some are members of the PKK in Turkey.

Another outstanding problem in the region to be resolved, I hope, after the Gulf dispute is over is that of restoring sovereignty to Lebanon, with the withdrawal of all occupying forces from that country. But the principal outstanding issue to be resolved is the Palestinian problem.

I was encouraged during my discussions with both the Israelis and the Palestinians to find that there is a far narrower gulf between their views than I expected. Their views are defined in the Shamir peace plan produced 18 months ago and the Palestinian National Council declaration of November 1988. Each recognises the rights of the other, in the case of the PLO for the first time. Israel has always maintained that it does not want or need an international conference at which bilateral negotiations can take place such as those which succeeded in the case of Egypt at Camp David. But Israel stands condemned for the current stalemate.

I suggest to my right hon. Friend the Minister and to her colleagues in the Foreign Office that there is no reason why, now or following the resolution of the Gulf crisis, two simultaneous initiatives could not be urged on Israel and the Palestinians. Such initiatives could transform the climate and allow negotiations to commence. The first should be a requirement on Israel to commit itself to negotiate when the intifada has come to an end. The second should be a requirement on the Palestinians to bring the intifada to an end if Israel has made a commitment to negotiate. I have no doubt, that that strategy will be regarded as too simple by half, but I commend it to my right hon. Friend in the hope that it will resolve 42 years of displacement of 2.25 million Palestinian refugees.

1.1 pm

Mr. Alan Williams (Swansea, West)

Even today's newspapers report that over 10 million people are at risk again in Ethiopia and Sudan from famine and starvation. That pinpoints the complexity and difficulty of resolving the problem that we face. We are continually beset by new short-term demands to meet the symptoms of the problem while at the same time we need to tackle the fundamental causes.

I recognise that the difficulty of Governments is not only the complexity but the scale and inter-relationship of the problems. Low food productivity, climatically induced famine, starvation and death, population growth, illiteracy and lack of birth control are all interrelated. The problem is knowing where to start and which problem should be given priority.

We must also recognise that events in the developing world are taking place too far away for many people in the industrial and developed world. They can dip into their pockets and feel good occasionally about helping with an individual problem, but the problems of Africa, Asia and south America do not impinge all that directly on their lives except by pricking their consciences occasionally.

As my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) said, the problems of developing countries matter to everyone in a way of which we are only just beginning to become aware. She referred to the problem of global warming. The West is beginning to turn its political and social attention to that problem. If the world's population expands at the rate expected between now and 2025, the amount of carbon dioxide produced by mankind will double during that time. The amount has already trebled since 1950.

We are all aware that the forests are an important factor in the levels of carbon dioxide but it is not appreciated that the difference between the United Nations low-case projection of population growth and its medium-case projection is so great that if the higher projection is accurate, the extra carbon dioxide produced in the world will be the same amount as that which has resulted from deforestation.

We must face the reality that although humanitarian appeal has not led us to divert the resources necessary to deal with the problem, self-interest may well force Governments to do just that. It may be cheaper to deal with the problems than to deal with the consequences of ignoring them. The whole of mankind will pay, if helping the third world is not seen, as a matter not just of good works—I wish that that were sufficient appeal—but of good economic sense for the industrialised countries. It is also a matter of survival for the children of those who are making the decisions in those countries.

In her opening comments, the Minister said that Britain could not solve the problems alone and, indeed, we cannot. On the other hand, we can play our full part and, clearly, we are not doing that. My hon. Friend the Member for Cynon Valley showed the scale of the inadequacy of the help given by the British Government. Recently in another place in a debate on a similar subject, the Minister said that the Government accepted in principle the target of 0.7 per cent. of gross national product laid down by the United Nations as the aid target from developed countries to the third world.

In 1987 and 1988 our contribution was way under half of that. In each of those years we gave more than £1.5 billion less than we would have done, had we conformed to the UN target. In the past five years we have not contributed between £8 billion and £9 billion because the Government have refused to meet the United Nations target, which they accept "in principle". If the Government can accept the target in principle, but only in principle, when we are oil-rich, what hope is there of the Government ever attaining it when our oil wealth diminishes or disappears? We are giving a smaller percentage of our GNP in aid than we did in 1979.

Too many pressures are pulling in the opposite direction. My hon. Friend referred to debt repayment.

Limited state aid is being massively offset by the private exploitation of the very areas that we say we want to help. My hon. Friend dealt with the financial aspects of that.

One part of the third-world problem, as it is called, which stirs us most deeply, particularly at Christmas when we enter a period of overt sentimentality and high spending, is the pictures and prospect of children dying in third-world countries. We are fortunate in that only 11 children in 1,000 die in the first five years of life. In the poorest countries the figure is 20 and in Ethiopia it is more than 30.

Diarrhoeal diseases are the biggest killer of children worldwide.

Mrs. Chalker

indicated assent.

Mr. Williams

The Minister nods her head in approval.

Mrs. Chalker

Not in approval.

Mr. Williams

Not in approval, but in agreement.

Of the 5 million children who die a year, a quarter die from diarrhoeal diseases. The Lancet says that the risk of dying from such diseases is 14 times greater for children who are bottle-fed, while UNICEF states that children who are bottle-fed are 25 times more likely to die from any illness than those who are fed natural milk. Far too many children are dying from diseases that are exacerbated by foodstuffs that substitute for natural milk.

The paradox is that while our Government are trying, albeit inadequately, to reduce infant mortality, western companies are contributing to it enormously. Nestlé, for example, provides free dried milk for hospitals. It does so to trap mothers on to a feeding regime despite the fact that the vast proportion of mothers in the developing countries are illiterate and are therefore unable to read or understand the instructions. Those countries' water supplies are also contaminated, so when mothers use that dried milk it adds to the likelihood of their children dying from illnesses. Such free dried milk is given despite the fact that natural lactation has a contraceptive value for the mother when breast feeding.

Recently a documentary was shown on Australian television entitled "The Formula Fix". The subject was Nestlé but that company has not dared to sue the television company. The programme concerned the code that relates to milk products. The world health authorities and UNICEF drew up that code in 1986, but the documentary revealed that, two years after that, it had evidence that Nestlé had deliberately tried to find its way around the code. In the Philippines the code relating to free milk had applied for two years, but the documentary recorded: Nestlé also implemented a scheme to circumvent the provision in the Code banning free supplies. Nestlé representatives asked hospital personnel to sign requests for supplies which are then delivered as a credit purchase to the hospital or clinic, with a tacit understanding that collection of payments will not be pursued. These 'sales' are then written off as uncollected debts or bad debts, and Nestlé not only escapes charges of giving away free supplies but also used the bad debts to reduce income taxes. That is one way in which a major western company is peddling products that increase the likelihood of death among children in the third world. One may ask why that company gives free food to the hospitals and whether it is worth it. The charity, however, ends the moment the mother leaves hospital. When we realise how much it costs those families to sustain the supply of milk products, we begin to understand where Nestlés charity originates and why medical authorities say that it would be far better if the same money were spent on nourishing the mother rather than on buying those food products.

It takes 18 per cent. of the annual wage in Botswana to buy 40 kg of Nestlé's formula. For that money, the family could buy 62 kg of milk plus 36 kg of beef and 208 kg of sorghum. In Zimbabwe, 21 per cent. of the annual wage is spent on milk products. That is equivalent to 124 litres of sour milk plus 37 kg of beans and 207 kg of maize meal. The family is giving up that amount of nutrition to sustain the feed regime that Nestlé established in hospital. In Kenya the figure is as high as 47 per cent. of the annual wage.

Mr. Corbyn

A problem in Zimbabwe is not that the feed regime for babies is often imposed by Nestlé and its ilk, but that the soft drinks regime for the whole population is imposed by the Coca-Cola corporation. Hardly any fruit juices are available for children to drink, despite the nature of the country, which could be prolific in growing fruit.

Mr. Williams

I am grateful to my hon. Friend for that intervention. I am citing one example to demonstrate the way in which companies in the west are working against the aid programmes of western Governments, paradoxically often with the support and subsidy of those same Governments. In other words, families in the third world who have so little are being expected to provide the dividends for the shareholders in the west who already have so much. As my hon. Friend says, it is the same with soft drinks and tobacco.

Consider the hypocrisy of the west. We in the EC have laid down targets for tobacco products, and products that do not meet the tar ceilings imposed by the Commission cannot be sold in the west. Instead, they are going to the third world. According to the World bank, 80 per cent. of the world's population will be in what we call third-world countries by the turn of the century. Confronted with concern about health and restrictions imposed in the west—especially in Europe, but particularly in the United States—the companies concerned are selling their products in the third world.

BAT Industries, our fifth-largest company, like its American competitors, is trying fiercely to build up its share of third-world markets. In Kenya, for example, BAT had sales of £50 million in 1985. By last year the figure had reached £89 million, an increase of 80 per cent., representing a 20 per cent. per year growth rate.

Even more evil and unforgiveable, we in the EC are shipping our high-tar, unacceptable tobacco output—the output is forming a tobacco mountain—to those countries. The European taxpayer is subsidising the companies involved to the tune of £740 million a year, which is half of what the British Government are giving in aid to the third world. The European Economic Community is paying half of the subsidy to the tobacco manufacturers to enable them to sell, in the third world, products that are banned in this country. The British taxpayer is paying £100 million a year of those subsidies, so British money is contributing to the build-up of that disgusting trade by the tobacco manufacturers.

I referred to the hypocrisy of the west, the EC and the Americans. The Americans have gathered their might in Iraq—I support our troops there—but America is taking on another deadly foe, Thailand, which was a threat to the American way of life because it had a ban on the import, the advertisement, point of sale promotion and general promotion, of tobacco products. Mighty America could not actually send in its aircraft carriers and air force., which was preoccupied, so it used a different sledgehammer—the general agreement on tariffs and trade and the threat of unilateral trade sanctions against Thailand. That is the scale of hypocrisy in America and this country.

The tobacco companies have enlisted the subsidies of the EC and the diplomatic power of the American Government to secure their markets. When America gains those markets, it gears its advertising to women who are deemed to be particularly vulnerable and to the young. In most of those countries, unlike in the west, there are no age limits on the sale of tobacco. Therefore, we are providing aid on a diminutive scale to appease the public conscience, while bleeding those countries commercially and risking destroying the health of their population simply for the financial benefit of a limited number of western shareholders.

I shall conclude with three brief quotations to demonstrate the problem that we face. The first is from The Sunday Times of 13 May. A BAT spokesman said: BAT's policy is very clear. Our view is that smoking has not been established to he the cause of disease. The second quotation is from the firm handling the advertising, which states: Our view is that if you can buy something freely, the manufacturers should be able to advertise it. The third quotation is from Britain's chief medical officer, Sir Donald Acheson who, when told of the situation, said: I fail to understand how anyone can bring themselves to continue to promote this deadly habit. Such hypocrisy, disregard and contempt for human life typifies the commercial practice that is completely undermining and swamping the attempts of western Governments to help the problems of the third world. Since appeals to conscience and humanitarianism have failed, I only hope that when the west recognises the link between the problems of the third world and the crisis of global warming, it will do, in self-interest, what it failed to do out of charity and good will.

1.24 pm
Mr. Peter Bottomley (Eltham)

Wouldn't you cut down a tree to cook your next meal if there was no other option? The environment is a luxury; only those who have enough food already have the time to worry about it. You eat the chocolate biscuits—you people who have never seen a cocoa tree. We pick the cocoa beans—we people who have never tasted chocolate biscuits. You worry about the environment. We cut down trees. I tell you: there is only one way to solve the threat to the environment. Poverty must be eliminated. How? You must have less. We must have more. You must not give of your surplus. You must sacrifice to give. You must not give out of pity or guilt. You must give out of love. We need your help. But we want to be treated like fellow children of God, not animals on whom you dump food. If you will listen, I will tell you how to do it".

Those words are by Bernard Guri, the co-ordinator of agriculture and development for the Catholic church in Ghana, as quoted in a book called "Bad Samaritans" by Paul Vallelly.

If we are to deal with the four elements of development —relief, development itself, justice and empowerment— we must start with various imperatives, which will not work for all of us at the same time but which are all relevant.

We live in a country that expects to double its standard of living twice in the lifetime of each person. In the past 10 years there have been changes in the level of aid. We hold slightly repetitive debates, in which Conservative Members say that the aid budget has increased and Opposition Members—and occasionally Conservative Members—claim that we have not met the 0.7 per cent. target. Changes in trade have taken away three or four times as much in foreign exchange earnings from developing countries as have the changes in the amount of aid.

At the Africa Centre a few days ago, when the book "Bad Samaritans" was discussed by my right hon. Friend the Member for Bath (Mr. Patten) and by Dr. Charles Elliott, Dean of Trinity Hall, Cambridge and former director of Christian Aid, I asked how we might double or redouble our loving. Dr. Elliott suggested that it might be by increasing our vulnerability. One of the problems with our developed world is that we try to erect defences against any sort of risk. We put up military defences to stop countries being threatened or overrun. We try to create economic barriers so that no one from outside can threaten our jobs. Dr. Elliott was probably right to suggest that we need to share some of the experiences and risks of people in other countries.

My hon. Friends the Members for Bournemouth, East (Mr. Atkinson) and for Reigate (Mr. Gardiner) rightly said—I think that the Front-Bench speakers agreed with them—that we must try to ensure that the benefits of flexible political and economic processes are not only available to others but are advertised as essential to the idea of empowerment.

During the past 10 or 20 years more people have suffered because of wars between countries and within countries than have suffered from changes in trade. We should be proud that more countries in the past 10 or 15 years have chosen political systems in which the Government can be changed without resort to the bomb and the bullet or to exile. This has happened in the European Community—in Spain, Portugal and Greece. It has happened in some of the countries of Africa, and now it has happened in middle and eastern Europe and, although imperfectly, in central and south America. We must never forget that.

In 1978 the then Minister for Overseas Development acknowledged in response to a report by the Select Committee on Overseas Development that when renegotiating the Lomé convention it was important to recognise that aid would not work effectively in repressive or chaotic countries. In those days the prime example was Uganda, but there are other examples in the world today.

These sort of debates work best when we reduce the partisan element in them as much as possible. I sometimes get fed up with the idea that there was a golden world under the last Labour Government. I was elected in a by-election in June 1975 soon after Dame Judith Hart stepped down as Minister of Overseas Development—a post which seemed to be in and out of the Cabinet at the time. Between 1974 and 1979 we saw the reverse of what we have seen under the present Government.

In the Government response to a report from the Select Committee on Overseas Development the first Minister for Overseas Development in the present Government said that because of economic circumstances it would not be possible to exempt overseas aid from the cuts in public spending. That may or may not have been appropriate in 1980, but it is certainly not appropriate now after eight years of the most significant economic growth in the European Community. We must join the Opposition to attain the 0.7 per cent. programme. Such partnership has been mentioned often by Labour and Liberal Democrat Members.

The Government and Conservative Members cannot take much pride in the good things that are happening in overseas development unless the commitment to the 0.7 per cent. programme is either scrapped, which I hope is inconceivable, or met. It would be far better to meet it. These issues do not need to be stressed to my right hon. Friend the Minister for Overseas Development, but they need to be brought to the attention of my right hon. Friends the Prime Minister and the Chancellor of the Exchequer and my right hon. and learned Friend the Chief Secretary to the Treasury.

People must show a greater and more consistent interest in overseas aid, and that requires action at local community level. We need to develop individual responses from a significant minority of our constituents. That must be developed by communal action at parish level and by those who are not church-linked. Local developments matter most.

When the Brandt committee report was published in 1981 or 1982 the World Development Movement organised a lobby. It called for a voluntary donation of what I once said was £20 a head, but I was recently reminded that it was £6 a head. Only 600 people responded to that appeal and that is not a very good way to raise £60 each from 56 million people by Government decision. Work must continue with voluntary organisations also to increase voluntary gifts which can then be matched by what I hope will be the product of the work of the European Community on agricultural and medical research. The Community can help in other ways. There is a residual question about when the Community will have a presence in South Africa. My hon. Friend the Member for Reigate spoke about some developments in that country and it is good to note that more hon. Members propose to see what can be done even while South Africa is in the middle of its very welcome transition.

I hope that the Community will not continue its sterile debate between directorate-general I and directorate-general VIII on whether South Africa should have a diplomat or someone involved in development, because it is quite apparent that South Africa needs a development expert now. In time perhaps it may have the first European Community directorate-general I representative as a delegate, but to begin with we should opt for the development expert.

The European Commission should try to find someone who knows about the Southern African Development Co-ordinating Committee and who has had experience in Namibia, where European Community help has been well absorbed. The relationships between South Africa and the states around and within it should be patched up, and for that job it is important to have someone who will be respected by the South Africans. He must not be a patsy but someone who has been willing to stand up to them in the past and has worked with South African representatives in Windhoek. That is a matter for the Community and for Governments, but I suspect that what I have said will be echoed by parliamentarians in Germany, France, the Netherlands, Denmark and in most of the other Community countries.

There is a need for education in world citizenship and I am glad to see a small Government grant to the council for education in that subject. I think that that organisation was born as a result of the efforts of the grandfather of my hon. Friend the Member for Surrey, South-West (Mrs. Bottomley). One of the results of young men working and living at Toynbee hall was that not only did the first Earl Attlee go on to become leader of the Labour party and Prime Minister, nor that Beveridge produced in the early 1940s his report that led——

Mr. Brian Sedgemore (Hackney, South and Shoreditch)

It was 1944.

Mr. Bottomley

I am grateful to the graduate from Oxford for giving me the date. It also produced Max Garnett, who went on beyond national politics into developing the concept of world citizenship, referred to by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel). The right hon. Member spoke about the benefits of experience in the Voluntary Services Overseas. I am not sure that he is right to say that another country will gain much from a young British person aged 21 going to it. Far more, such a young person will come back enthused for the rest of his working life.

I know that the hon. Member for Islington, North (Mr. Corbyn) did VSO. Anthony Bevins, a distinguished correspondent, who is not observing the debate, is another. People in advertising, the Civil Service and many other organisations have carried the benefit of their service overseas into their work. The Select Committee on Overseas Development took evidence in India in 1978 which showed how civil servants such as Michael Jay of the High Commission and Dick Alford of the British Council, having done similar work, have risen up through the Civil Service with an enthusiasm that helped to infect their work and our thinking.

World citizenship matters, and I hope that the Council for Education in World Citizenship will, on a limited scale, continue to make contact with teachers and pupils so that others will realise that the third world is not just a place to go for rest and recreation. It is a place to go to develop a sense of solidarity with the peoples of the world.

I should like to raise a number of points made in the book "Bad Samaritans—First World Ethics and Third World Debt", but other hon. Members wish to speak, so I shall sum up in two ways. First, justice and righteousness need to flow. We cannot put up a barrier and keep them to ourselves. We need to allow the flow, to learn and to give—that is what sharing is all about. Secondly, we need to help people to grow their own prosperity, as we did with all the help that we got after the war with Marshall aid and from the IMF when it was necessary to borrow. As happens in India, the vast majority of resources, both human and capital, must be generated within the countries themselves. Even 10 years ago, 95 per cent. of capital investment in India came from its own resources.

We need to find ways to work with countries. Most recipients have a grant management department that tries to match what is on offer to what is needed so that projects are not determined by the donor countries—as other people may think.

I shall end with two short quotations from the book. One is from Pope John Paul II, who said: Anyone wishing to renounce the difficult yet noble task of improving the lot of … all people, with the excuse that the struggle is difficult and that constant effort is required, or simply because of the experience of defeat and the need to begin again, that person would be betraying the will of God the Creator. If people start asking for a practical thing to do, I need quote only the concluding words of the book: The first step to a global conversion must be global acknowledgement that wrong is being done. Our new knowledge is a cause for optimism and a spur to action. Are those of us with two coats now prepared to give one away?

1.38 pm
Mr. Jeremy Corbyn (Islington, South)

I apologise to the House for not having been here for the Minister's speech and for part of the speech by my hon. Friend the Member for Cynon Valley (Mrs. Clwyd), but I had a 9 o'clock engagement in my constituency. What I heard of my hon. Friend's speech—the last part of it—was excellent. She put forward a serious case about the problems of the world, how the Labour party sees them and how a Labour Government will tackle them. We live in a world on the brink of environmental disaster. It will not happen suddenly one day but is growing apace. It will arise out of the worsening environmental problems.

The world is not just divided by poverty and by the misuse and misallocation of resources—it is increasingly divided by poverty and there is an increasing misallocation of resources. We must examine the quality of life for large numbers of people on our planet. There is a general north-south distinction, but there are also enormous imbalances within the economic systems of countries in western Europe and north America. The quality of life for people living in cardboard boxes under the theatres of the south bank is similar to that for people living in shanty towns in third-world countries. The system allows those people to live like that.

In general, for the majority of the world's population life is short, life expectancy is very short, income levels are low—and, in many places, declining—and the prospect for many people living in the poorest countries in Africa and Latin America does not include the opening of new schools, new hospitals and new social services centres and an improvement in social facilities—it is a prospect of hospital closed, school class sizes increased and of the quality of life constantly deteriorating.

Far from there being a constant flow of resources and aid from northern countries to southern countries, the opposite is the case, and has been for most of the past 200 years. Colonialism was not about exporting civilisations; it was not about improving the lot of people in the poorest countries—it was driven by greed and avarice and a determination to control other people's lives. It was about ensuring that the work, the raw materials and the food of the poorer countries flowed out to the richest parts of the world. That is the legacy of colonialism and imperialism that we have to deal with today. I honestly believe that the role of the world's twin financial institutions, the International Monetary Fund and the World bank, is essentially to reassert that old-world order so that once more a minority of northern, predominantly rich countries dominate the majority of southern, predominantly poor countries.

We frequently raise the issue of environmental destruction. I wish to quote from an article by S. M. Mohamed Idris in the current issue of Third World Resurgence, a magazine produced by Third World Network, of Penang in Malaysia. It produced excellent research material on the problems of third-world countries. The article is headed: What green really means for the Third World. It states: As political leaders compete to show concern on the environment, confusion reigns on what is 'ecological'. Ecologists define sustainable development as a harmonious relationship between humanity and nature, preserving the integrity of the ecology whilst enabling healthy human survival. But political and commercial elites think sustainable development merely means sustaining the supply of raw materials to continue the existing production systems. That article well amplifies much of the problem.

People in the north are rightly concerned about the environment and rightly want changes to the environmental protection measures in this and in other countries, but they are not prepared to do anything about the economic system that brings about so much environmental destruction. The article also states that the effect of so-called development measures, the effect of economic restructuring in so many countries in the third world, is riot to preserve and protect the environment, but is to finance and encourage environmental destruction.

A magazine produced by Survival International states: The Brazilian Union of Indigenous Nations … and … Ailton Krenak, has been awarded the Greek 1990 Onassis Prize for Man and Society. In receiving that prize, people referred to their experience of life in the Brazilian rain forests and to their friends and compatriots who have been killed by the armed forces, which have gone into the Brazilian rain forests to clear the way for logging and mining companies and for road development. They said: All of us carry the memory of the day when the world supported all of its people—feeding us, taking care of us, putting us to sleep with the songs of the birds, rivers, waterfalls and forests. Were we an undeveloped world then? Were the international development institutions created to silence the birds, and to cut down the forests … When we transform the planet into a large desert—is that the day when we will be truly developed? They have an understanding of life that many people in this country find hard to imagine.

The destruction of the rain forests by logging companies, of savanna grassland, and of so many other aspects of our environment that are essential to continuing ecosystems, together with the overfishing and pollution of the seas, have been brought about by an economic system that encourages not development but dependence on an international trade system that essentially benefits the northern countries, and their multinational corporations in particular.

The relationship between aid, trade, development and environment is very important. I fully support, of course, the donation by the richer countries of 0.7 per cent. of their gross national product as part of their aid programmes. It is important that aid should be of good quality. However, for all the aid that is given there is a return not of onefold or fivefold, but tenfold and more in debt repayments by the poorest countries. Their total debt is currently $1.3 trillion and, frankly, it is unpayable. It was incurred because those countries were encouraged to borrow large sums at the time of the petrodollar boom in the early 1970s, to meet the cost of industrial development programmes. At the same time, they were encouraged to produce more of their basic commodities—cocoa, rice, tea, coffee, minerals, and tin in particular. The problem is that they control neither the interest rates at which that debt is fixed nor the prices that they receive for their commodities.

The present crisis of debt repayment means that many countries are forced to borrow more money—and to pay the interest on the new debt, they borrow more money still. To meet the interest on that debt, they borrow yet again. It is rather like mortgaging one's house six times over, every time that one falls into arrears with mortgage repayments. I seem to be losing the attention of some of my hon. Friends, but I hope that they too understand that remortgaging and remortgaging leads ultimately to disaster.

That disastrous situation was met by the west, with the Latin American countries united in threatening non-repayment of their debts, with the Baker and Brady plans, which imposed on those Latin American countries an economic model that ensured not that they paid less, but that they incurred more debt for deregulation of their economies, cuts in public expenditure, and passing poverty on to the poorest of their people.

British banks say that they have suffered as as result of the debt crisis, yet in 1989 alone, they achieved tax write-offs of £1,700 million in respect of debt non-repayments, which is considerably more than the British aid programme.

United States aid to Latin America over the next period is likely to be $2 billion, yet debt repayments by those countries to the United States over the same period are likely to total $20 billion—tenfold the value of the aid. If we are to redress world imbalances, we must confront the question of commodity prices. The GATT round is being treated as an argument between the United States and western Europe. That round, and the economic model behind it, is disastrous for the poorest people in the poorest countries of the world. It encourages multinational agribusiness into third-world countries, and discourages food self-sufficiency. It encourages environmental destruction and discourages environmental protection. There has to be a real interest in the prices paid for basic commodities rather than the present system.

Unless we address those problems from the point of view of a world where development is genuinely sustainable, where protection of the environment is vital, where the earth's wealth is redistributed in favour of the poorest people in the poorest countries, in the next few years we shall face a growing imbalance between north and south. Ever-increasing numbers of people will flee from environmental destruction—from rain forest destruction, increased desertification and the increased flooding linked to that. Millions of people will have to flee from the places where they grew up and live and there will be growing imbalances in the world, and growing poverty. There has to be a change in the relationship. That means that higher prices must be paid for commodities. It means that there must be an increased aid programme, and an understanding that we are all in this together, rather than the reassertion of the economic models that are being imposed upon us and upon other countries at present.

For many people the problems that they face are summed up in an answer to a question put to a Sri Lankan Minister at a United Nations meeting. A journalist asked him why third-world countries went to the UN with monotonous regularity to complain about the same problems of debts, restructuring, aid, development and the environment. He answered that it was quite simple—it was because we all have the same Finance Minister, the International Monetary Fund.

I am delighted that we are having this debate today. I suspect that the House will have to return to this subject more often. If we do not, we shall be reneging on our responsibilities to consider the world globally and internationally, rather than in the selfish way in which the current economic doctrines of the IMF and the World bank insist that we consider it.

1.51 pm
Mr. Dennis Skinner (Bolsover)

I could not agree more with what my hon. Friend the Member for Islington, North (Mr. Corbyn) has said. He is very knowledgeable on this subject and he is right that we will have to return to it again.

As my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) said, it is remarkable that this is one of the rare occasions when there has been a debate on overseas aid. Most of the time such debates have been in Opposition time. Contrast that with the fact that only the other day, a full day's debate was devoted to destroying the environment in the middle east. That was what we were about when we discussed in an Adjournment debate the question of supporting American troops in the Gulf, under the guise of discussing the United Nations.

We all know what the score is. I find it remarkable that the Minister or any other hon. Member on the Tory Benches can consider the problem of aid to the Third world and the underdeveloped world, while on 15 January or thereafter they will take part in helping to destroy large areas of the middle east. They have even talked about the use of nuclear weapons. Now it is the practice to fight wars in the Third world. Since the second world war, most wars have been in underdeveloped countries. They say, "We have some new technology, equipment and munitions, let us try them out." They had eight years of practice in Iran and Iraq. The Government, along with the Americans, Russians, Germans, French and all the rest, used that eight-year war to test their new technology.

The Government have a cheek. "Goody Two-Shoes," the Minister, comes along today in her hunting jacket, and tells us that she feels sorry about the Third world and its problems, yet the Government are going to blast some of them off the face of the earth. It really does show the Government up.

Arms are being sold all the time. More is being spent on arms than is being spent to feed little kids in Ethiopia and the Sudan, with their little pot bellies and spindly legs. Every so often we see them on television and everyone is supposed to feel sorry. Here we have a Government who have had £100 billion in oil revenue—never before have we had such riches in this country—but they cannot find enough money to help the Third world, or an amount equivalent to that paid out by the Labour Government in 1979, although that was not enough.

What do the Government do next? They say that they will give aid through the Common Market—the great wonderful Common Market that they talk so much about. What a joke. I remember what the Tories were saying in 1971—"Join the Common Market. We will have the Lomé convention and we will feed the third world." What has happened since? They have piled up all the food. There are wine lakes and all sorts of other things—there was no wine lake when Lord Jenkins was around, because he supped it all. They have all this food, and what happens? They destroy it. They introduce schemes and say to farmers, "For God's sake, don't produce any food." They say that they will have a set-aside scheme, and they pay farmers £80 an acre to watch the grass grow.

Millions of people in Africa, central and south America and other parts of the world, including little babies, have to rely on Terry Wogan and one or two others on the BBC. The Government try to salve their conscience by setting up some little scheme that might help for the day. We are talking about 12 countries in the Common Market, some of the richest in the world. If they wanted, they could feed all those people without any problem.

This country has a greater responsibility than most. When I was a kid at school, people said, "All these pink pieces belong to Britain. We have India, Canada, Australia and all these countries in Africa." What was the game? The colonial masters of yesteryear, the Tories of their day, were ripping off those countries to take all their minerals, food and God knows what else. We have a bigger responsibility than even some of the other countries in the tinpot Common Market. The Lomé convention did not deliver the goods. It could not do so because it dealt with capitalist nations. They are not in the business of helping anyone; they are in the business of making profits. If they have too much food, someone says, "You are producing too much. We are not making profits. Get rid of it. Burn it." But Ministers tell us that they have a heart.

The Minister spoke about debts. As I said, this is a scandal. The impoverished countries want their debts written off, as my hon. Friends said, but in the past three years since the 1987 general election, the Government have written off debts for the top four clearing banks in Britain —National Westminster, Midland, Barclays and Lloyds —amounting to £3 billion. Why? The Government did so because those banks overreached themselves in the third world. The Government have allowed their tax liabilities to be written off, but that money should have gone to write off the debts of the impoverished third-world countries. The banks have made massive profits during the past 11 years under the Government.

The Minister talked about help from the International Monetary Fund and the World bank. What do we expect from them? Most of the time the IMF and the World bank say, "We will give you a few bob if you behave yourself." What does "Behave yourself mean? In political terms, it means adopting privatisation measures—

Mr. Corbyn

Closing hospitals.

Mr. Skinner

—closing hospitals and accepting tobacco. That is what it is about. We are not likely to get anywhere in that regard.

The Minister did not mention the Export Credits Guarantee Department because she was too embarrassed to do so. That insurance company stood the test of time until recently. What is more, its purpose was to enable third-world countries to buy goods on tick, sometimes writing off debts. That great insurance scheme was solvent under all previous Governments. What happened under this lot—the Government of entrepreneurs, the Cabinet full of business men and one woman, who reckon that they are smarter than anyone else and that they know the answers to all the economic problems? They have Chancellors of the Exchequer coming out of every pore. The Government get the ECGD bankrupt and then sell it off.

It staggers me that the Government have the nerve to talk about giving money to the third world. My hon. Friend the hon. Member for Cynon Valley put the case in a nutshell: the amount of money going to the third world in overseas aid is almost half what it was. My right hon. Friend the Member for Swansea, West (Mr. Williams) said that much of that is linked with private enterprise. The third-world countries have to buy those goods or they will not receive the money.

Then the Minister mentioned parliamentary democracy. Apparently one of the things that we have which is valuable is our democratic system. We are told that we should go out to third-world countries and tell them to adopt the great system that we have here. Well, they would be happy on a Friday when only 10 Members of Parliament turn up for the debate. A lot of hon. Members on the Tory side are moonlighting in the City making money hand over fist. Five or six of them have about nine jobs apiece and 19 former Tory Cabinet Ministers have 59 directorships between them. Yet we tell third-world countries, "We want you to have parliamentary democracy on British lines." What a joke. We offer them the House of Lords rolled in. We have a wonderful tribal system. We tell them, "You have a tribal system in Africa. But we have one that is better." The Lords all get fetched up in fancy frocks and there are witch doctors and all the rest of it. They do not have to be elected. They are like tribal chiefs and they last for ever. If they are not lords, people can have a baronetcy and become a knight. What a joke. Yet the Government tell us that this is the mother of Parliaments and that we have to spread the system all over the world. Am I supposed to buy that?

Mrs. Chalker

This is not relevant to the debate.

Mr. Skinner

Everything that I am referring to is in response to what the Minister said in her opening speech. She talked about spreading this democracy.

Of course, the third world could have the royal family, too. Well I would be happy for it to have the royal family, but I am not too sure that the royals would want to go to the Third world. They might have to pay taxes if they went somewhere else.

Remarkably, the Minister gave advice on slum projects in India and Pakistan. What a cheek. The Government have developed cardboard city on a grand scale. There are thousands of homeless people in London littered round the streets and the stations. Yet the Minister comes here and says that she is telling the Indians and Pakistanis how to deal with the problem of slums. By God, the Indians and Pakistanis want some help with that problem, but the Government have a cheek to talk about solutions when they refuse to build public sector houses. Hardly any public sector houses have been built in the past few years with the result that all these people are without a roof over their heads.

I shall come to my last point because other hon. Members want to speak. It is about the environment. I detect that this entrepreneurial, market-forces Government are giving a nod and a wink to the third world and saying, "We have got problems with the ozone layer." The Government have just discovered that they cannot patch up the ozone layer with market forces. As I told the previous Prime Minister, that problem cannot be resolved with a man, a bike, a ladder and an enterprise allowance. It will have to be done by collective action.

What are the Government doing? We have caused the problems but they say to the third world, "For God's sake don't you cause that problem. We will tell you how not to create problems for the planet." What a cheek. All the industrialised nations, mainly in the northern, temperate zone have despoiled the planet and caused havoc. Now they have the cheek to go round the world pontificating and telling Third-world countries that they had better not do the same. The industrialised nations destroyed the rain forests and everything else to feed and look after people in this part of the world.

By and large the debate should have been headed "Hypocrisy by the Tory Government" because that is roughly what it was. My right hon. Friend the Member for Swansea, West referred to that earlier. The Government come here on a Friday and talk about giving peanuts to the people who are starving. Yet we are part of a group of nations including the Common Market, America, Japan and all the rest which, if it had the will and took collective action, could feed the people in Africa and all the other third-world countries. We could feed them 10 times over, but we would have to get rid of the capitalist system if we really wanted to do it well.

2.4 pm

Mr. Harry Cohen (Leyton)

I endorse the comments of the previous two contributors to our debate. My hon. Friend the Member for Bolsover (Mr. Skinner), in his inimitable way, pointed to the double standards and hypocrisy surrounding the debate. He could have mentioned the so-called sweeteners from British Aerospace to Rover. That £80 million—nearly £1 billion —could have been transferred directly to the aid budget where it would have been put to much better use. Tribute has already been paid to my hon. Friend the Member for Islington, North (Mr. Corbyn) for his work for the Kurds. He consistently argues about the enormity of the disaster which faces the world and needs to be addressed, and his arguments are often ignored. The truth is that the underdeveloped world will face even more misery than it does now.

The debt problem has not been resolved. Interest repayments mean that the poor pay for the rich. Those repayments amount to more than $15 billion a year, which means lives lost. That money could be spent on food and the economy. Those debts should be written off. France has written off large chunks of debt. We have not and it is a scandal.

Mrs. Chalker

What about the £1 billion that has been written off?

Mr. Cohen

The Minister will have a chance to reply.

The recession will make matters much worse. Already developing countries are desperately worried about eastern Europe which, rightly, will need aid to feed its people, preserve its environment and build up the various national economies. The underdeveloped countries are worried that that will take aid from them. 1992 will mean protection barriers around the rich western European countries. That, too, will adversely affect the under-developed world.

One of the lesser obscenities in the Gulf crisis is the United States asking Saudi Arabia, Germany, Japan and other countries for money to pay for the war effort it is promoting there. In the end third-world countries are the most impoverished by what is happening in the Gulf.

On top of that we have foolish restrictions. I shall mention just one. The American war in Vietnam and the sanctions which it has effectively imposed worldwide have impoverished Vietnam. Vietnam has now found oil, which could save it. There is natural gas on top of the oil. Because of the stupid boycott which America is enforcing throughout the world, Vietnam will have to burn off the natural gas to reach the oil. That is a scandal. The Minister has said that aid arrangements to Vietnam are under review. They have been under review for ages. In the words of the Prime Minister, the Minister should be "her own woman" and tell the United States to scrap the stupid boycott.

I have just come back from a trip to Bangladesh. This is a historic time for it with the political upheavals and struggle for democracy which are taking place and which, I hope, will succeed. I shall mention the aid issues, not the political ones. Dhaka university needs an aid project to help it to improve education. Experts told us that there had not been exams for seven years—that in a country which is trying to establish compulsory schooling and which needs middle managers. There have been some brutal assaults on students of Dhaka university—just like those in Tiananmen square, but on a smaller scale. We should provide aid now, so that educational opportunities are improved at the university, in an attempt to stop such brutality. That funding is also vital for improving the country's infrastructure.

Aid should also be provided for the heritage of that country. The tribal people of the Chittagong hill tracts have suffered a mass migration as their way of life has been threatened. Worse is to come for those people, so we must preserve their culture.

We should establish business links with Bangladesh. The most important thing, however, is for the infrastructure to be improved so that there is proper sanitation—a comprehensive, modern sewerage system —and a plentiful supply of clean water. The profits from one day's arms trade could pay for clean water not just for Bangladesh, but everywhere. It is a scandal that that priority is slipping further down the agenda rather than remaining at the top.

Primary health care and hospital development should be funded in Bangladesh as the capitalist system in that poor country cannot provide for it. At this stage there is no profit to be gained from initiating such developments. One of the saddest things has been the spread of Thatcher's privatisation ethos to Bangladesh. The state has sought to disengage itself from its responsibilities and that has contributed to Bangladesh's decline. At best, privatisation is an absolute irrelevance to Bangladesh as it is elsewhere.

People in Bangladesh told me that the donor countries should monitor the provision of aid to ensure that there is no corruption. Rumours are rife about the misuse of funds, but I am sure that such corruption occurs in other countries. If donor countries provide such monitoring, however, the British Government, as a key donor, must take control and insist that there is no corruption and misuse of funds. They must take responsibility.

Aid must be linked to democratic development, especially in Bangladesh, where the army should be kept out of power. If that does not happen, aid should be stopped. We should seek to help that country's burgeoning democracy by offering to send observers from the Commonwealth, the European Parliament and the United Nations to ensure that its democracy can develop. The way forward for Bangladesh is through democracy and development.

2.12 pm
Mrs. Clwyd

With the leave of the House I shall speak again. One thing that this debate has proved has been hon. Members' anxiety to put their views on aid and development. We do not have enough opportunity to make our views known. Given that the Government do not have a heavy legislative programme for the new year, they should make prime time available—not an Adjournment debate—to debate this important issue. In the past year and a half the Government have not made available any time to debate it. All the time allocated has come from the Opposition because we give this subject its rightful priority.

My hon. Friends the Members for Crewe and Nantwich (Mrs. Dunwoody), for Leeds, West (Mr. Battle), for Islington, North (Mr. Corbyn), for Bolsover (Mr. Skinner) and for Leyton (Mr. Cohen) and my right hon. Friend the Member for Swansea, West (Mr. Williams) spoke with great passion. However, the hon. Member for Hertford and Stortford (Mr. Wells) said that he detected a note of sourness in our speeches. Any sourness is due to the fact that we are angry because the Government have slashed aid to some of the poorest people in the world. In 1979, when Labour left office, Britain spent 0.51 per cent. of GNP on aid. We are angry because during the past 11 years under the Conservatives we have witnessed large cuts in aid. The Minister for Overseas Development has seen the level of aid drop to 0.32 per cent. of GNP. From being one of the most generous donors in Europe, we have become one of the most miserly, however the figures are presented, ranking 14th out of the 18 OECD countries. That is why Opposition Members feel strongly about it, and we are not afraid to say so.

The hon. Member for Hertford and Stortford talked in emollient terms about the need to increase aid. We appreciate his concern for the third world, but throughout the years of Conservative rule he has allowed aid levels to fall. He has had every opportunity to defeat the Government on aid issues. I cannot recall many occasions when he has voted with the Opposition in an endeavour to increase British aid. He uses many nice words when speaking about British aid. No doubt he has used many more in the past 11 years trying to persuade the Government to increase the proportion of our GNP devoted to overseas aid. None of that has had any effect, to the point where today the aid budget is stagnant, however the figures are presented.

The Minister disagreed with some of the figures given by my hon. Friend the Member for Leeds, West. He was talking about the budget in real terms, not in the terms in which the Minister will no doubt reply to the debate. No wonder we are angry, for we recall the former Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher), saying in 1983 that when economic circumstances permitted, we would move towards the UN target of 0.7 per cent. of GNP going to overseas aid.

Last year the Government said that we had a higher standard of living than we had ever known. The problem is not that we cannot afford to give the third world more aid but that the Government do not want to give more. Had the Government maintained Labour's commitment to the third world from 1979 onwards, the third world would be better off by £8 billion.

The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) spoke about the amounts spent on arms by the developing countries. Anyone who has been to Ethiopia must deplore the fact that 40 per cent. of its budget goes on military equipment.

Mr. Wells

The figure is 70 per cent.

Mrs. Clwyd

I hear the hon. Gentleman's intervention. If, like other Conservative Members who have spoken, he is serious about achieving the target of 0.7 per cent. of GNP, he should accept, with the hon. Member for Eltham (Mr. Bottomley), that the best way to get it is through a Labour Government.

All hon. Members, including Conservative Members, have talked about poverty in the third world. The Government cannot claim that the ODA targets the poorest people. After the Minister made that claim at the refugee conference, I asked her to set out the evidence on which it was based. She could say only that in India alone, £130 million went on poverty alleviation. But as she has revealed in countless written answers to me, India is the only country for which the ODA compiles statistics of aid devoted to poverty alleviation.

Many of my hon. Friends have spoken of the importance of tackling the debt problems of third-world countries. Developing countries cannot possibly grow their way out of the debt crisis as debt payments are made to the rich. Those sums totalled $52 billion last year. Debt repayments leave no money for investment in growth.

As my hon. Friend the Member for Islington, North said, Labour Members have been pushing for United Kingdom banks to contribute to debt relief by a change in the tax law. Some Labour Members tabled an amendment to that effect to the previous Finance Bill. At present banks receive tax relief on the provisions they set aside against bad third-world debts. They invest the subsidy at a hefty profit, but have no obligation to pass on any of the tax relief as debt relief, which is ridiculous and ludicrous. Tax relief in 1988, the latest year for which figures are available, is estimated at £1.7 billion—more than the entire aid budget. If hon. Members are serious about doing something to resolve the problem, they should have voted for our amendment to the Finance Bill.

I am anxious to hear the Minister's reply to our questions. The Opposition have definite proposals—we would like a White Paper on development and an educational initiative from the Government. We want the Government to adopt the World bank's constructive proposals on tackling poverty and we would particularly like them to raise the aid budget to 0.7 per cent. of the gross national product. However, I doubt whether any of those steps will be taken under this Government.

The Labour party's policy is clear: we intend to put the overseas aid portfolio in the Cabinet. That is why we were pushing so hard in our support for the Minister. We did so not because she is a woman but because she has considerable ability—none of us would take that away from her—and we want her and her portfolio to take their rightful place in the Cabinet, not merely to be an arm of the Foreign Office. If that were the case, as it will be under a Labour Government, overseas development will have its rightful place among the other Government Departments and we shall be able to argue much more vigorously for the needs of the third world than the Minister is able to do at present.

2.22 pm
Mrs. Chalker

With the leave of the House, Mr. Deputy Speaker, until about 40 minutes ago I was going to say that we were having an interesting and worthwhile debate, and I shall concentrate on what happened during the first four hours of the debate.

I noted that the hon. Member for Bolsover (Mr. Skinner) made a contribution from the Opposition Dispatch Box at the beginning of the debate. From his ranting and raving a few minutes ago, we might gather that that was a sign of how overseas policy will be put in future if the hon. Member for Cynon Valley (Mrs. Clwyd) does not get on top of the problem, which means controlling the hon. Member for Bolsover.

The approach of the hon. Member for Cynon Valley to the challenging task of development and aid was, as ever, highly partial. It is not just a matter of money, but persuading recipient Governments to implement the critically necessary reforms. Proper use of aid money is essential and it has to be used imaginatively. That means encouraging developing countries' Governments to break away from their bureaucratic, old socialist ideas if they are to succeed. I did not see much evidence that many of the Opposition speakers had been able to break away from those bureaucratic, old socialist ideas.

As the excellent speech of my hon. Friend the Member for Hertford and Stortford (Mr. Wells) clearly implied, if developing countries are to overcome their poverty, they must be able to attract investment and get on with their own business through firm economic reforms. If they do not do so, they will not be able to succeed, despite the Government helping them to do so.

There have been a number of strange comments about net resource transfers. Net flows to Africa are substantially positive. In 1989 the inflows to sub-saharan Africa exceeded outflows by $14 billion. Those are not my figures, but figures from the Organisation for Economic Co-operation and Development. It is clear that the countries classified by the United Nations as the least developed are receiving more—$13 billion more—in new loans and grants than the interest and principal they repaid. This country has not only written off £1 billion of debts, but ensured that all our aid to the poorest countries is on grant terms.

Our thinking has moved on a long way since 1975—not 1978—when the Labour Government produced their White Paper. We have a development strategy, clearly outlined in the Government's reply to the Foreign Affairs Select Committee's report on bilateral aid in 1987. That set out our view on how best to secure sustainable growth. It also set out our concern about poverty. I and my predecessor have reiterated those ideas in speech after speech in the past five years.

The hon. Member for Cynon Valley suggested that our approach in the ODA to structural adjustment was out of tune with that of other donors. That is not true. It is a major achievement of the past five years that the thinking of the international community on adjustment issues has converged. The special programme of assistance to Africa shows how effectively those views have converged. I share the World bank president's view that efficient development must enable the poor to use their main asset—their labour. That is why we have supported price reforms that give peasant farmers the incentive to produce more, and why we argued for less protection so that countries plentiful in labour do not invest in capital-intensive socialist-style industries. It is also why we are financing slum improvement programmes with the help of local people who seek to help poor people to use their labour productively to generate greater income.

The hon. Members for Cynon Valley and for Leeds, West (Mr. Battle) claimed that my colleagues in charge of other Government Departments were not concerned about the effect of their policies on development issues. They could not be more wrong. I have already made it clear that we are fully aware that international trade liberalisation is crucial for the developing countries.

The hon. Member for Cynon Valley also spoke about tied aid. The proportion of tied aid to total United Kingdom bilateral aid, which includes CDC and local costs, both of which are untied, has been about 70 per cent. over the past four years. The DAC average, about which the hon. Lady seemed pleased, is only 51 per cent.

My hon. Friend the Member for Hertford and Stortford referred to the IMF and the World bank playing a leading role in negotiated reform programmes, which we support. We are prominent on those bodies' boards and we work hard to ensure that the reforms are properly and thoughtfully implemented. We know of the problems that some developing countries face because of debts to those organisations, but in general multilateral debt is only a small part of total developing country debt. For the poorer countries, for which multilateral debt is a problem, the IMF's enhanced structural adjustment facility provides the way forward. It is a £4.5 billion facility and it offers an interest rate of 0.5 per cent. As such it is one of the best ways of helping countries such as Guyana to get out of the difficulties that they have faced. The United Kingdom is the largest single contributor to the interest subsidy costs of the ESAF, but we are also seeking to help indebted countries by ensuring that all new World bank lending is on highly concessional terms. We must preserve the financial integrity of those institutions—that is in the interests of the whole developing world.

The House is well aware of our policy towards official debt. We have been generous; we have forgiven £1 billion in the past. But I want to make one more point about the Trinidad terms, which my right hon. Friend the Prime Minister initiated when Chancellor. They would provide substantial debt relief for the poorest countries pursuing reform. I hope that we shall obtain the support of all the donor countries, including Japan, for the Trinidad terms initiative because it can do more than anything else to help those countries.

The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) referred to the problems of private debt. He knows that we have supported the Brady plan, which allows IMF and World bank resources to be used directly for debt reduction in deals with private banks. Six countries have already benefited from that.

My hon Friend the Member for Reigate (Mr. Gardiner) made an interesting speech. I welcome the fact that the private sector—the CDC or any of the other organisations —plays a large part in helping the Third world. In most developing countries farmers are the largest private sector element and we seek to help them with training, better seeds and better crops.

Good government has two dimensions, political and economic. We are making it quite clear to every recipient country what we expect in terms of human rights and good government. We are encouraging countries in which things have been wrong in the past to put them right. We welcome Zambia's decision to adopt multi-party political systems. My hon. Friends are right to say that Zambia has a long way to go with its economy, but it is critical for us to help Zambia to do the right thing. We do that by training its judges and policemen and by helping it to have the right sort of organisations. Not only will the people of Zambia learn from us, but the country will have a better outlook.

It being half-past Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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