HC Deb 14 July 1993 vol 228 cc1040-82
Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Madam Speaker has selected the amendment in the name of the Prime Minister.

7.14 pm
Mr. Michael Meacher (Oldham, West)

I beg to move, That this House, noting that the indebtedness of the Southern world now exceeds £1,000 billion, which both cripples their development and holds back economic growth in the Northern world, and noting the failure of the G7 Summit to agree any new significant programme of debt relief or to ensure any adequate place for developing countries in future world trading patterns via the GATT Uruguay Round, calls upon the Government to prepare a new British and international initiative for debt write-off for the poorest countries, and also to take the lead in setting out a trading framework which will ensure that developing countries can play their full share in the world trading system and will promote environmentally sound development. For the developing countries throughout the world, the G7 summit in Tokyo last week was not merely a disappointment; it was a cause for real despair. The situation in most of the third world, and certainly the poorest parts of it, is extremely serious and getting worse, not better. The G7 summit merely washed its hands of it.

It is not simply that indebtedness in the southern world now exceeds the astronomic level of £1 trillion—£1,000 billion; it is rather that debt levels are not falling, but increasing at an accelerating rate. According to the World bank, the increase in indebtedness in the past two years alone has been nearly £300 billion, which is equal to almost half Britain's entire gross national product.

It is not simply that the share in world trade of the poorest continent, Africa, has been falling over the past decade; it is rather that the protracted depression in world commodity prices, on which the poorest countries absolutely depend, makes their economic recovery impossible.

It is not simply that aid-flows from western nations—most notably Britain—have fallen sharply over the past decade and are continuing to fall, with overall resource flows to sub-Saharan Africa, for example, the poorest part of the world, estimated at 8 per cent. lower last year than in 1989; it is much rather that the flow of funds has gone into reverse. The southern world now pays Britain more in debt repayments than it receives in aid, with a net inflow into the United Kingdom in 1990 of £2.5 billion.

On all three counts—debt, trade and aid—the situation of the third world is clearly rapidly deteriorating and must now be a priority for international action. However, the indifference of the G7 summit to the steadily evolving disaster in the south, despite the fact that it also holds back recovery in the north, is matched only by the unreadiness of the British Government to deal effectively with any of those looming disasters.

I take debt first and foremost as it is the most important. I make it clear that I commend the Prime Minister on his initiative as Chancellor in 1989 in proposing the Trinidad terms for a two thirds write-off of debts for some of the poorest countries. I say that without qualification. It was a very useful initiative. But we must put that in perspective. It has applied to only 14 countries.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd)

It applies to 17 countries. I shall clarify that later.

Mr. Meacher

I am grateful for the correction. That is a marginal and welcome improvement.

The £1 billion write-off that it has secured, of which the United Kingdom's share is just £65 million, represents less than 0.1 per cent. of total third world debt. That puts it into perspective. Since the Prime Minister originally proposed it, £1 billion has been written off, but the total debt burden has increased by some £400 billion. The effect of the Prime Minister's initiative has, therefore, been extremely limited. No one could deny that. Some might say it has been infinitesimal. Indeed, the British Government have been far more concerned with paying money to British banks to protect them against possible default on their world debt than they have been to provide debt relief to third world countries. According to the Government's figures, between 1987 and 1992 the Government handed out £2.25 billion—more than the entire annual aid budget—in tax relief to United Kingdom banks against the possibility that debtor countries might default on their debt service obligations, although in fact they have not done so.

As a result of the Finance Act 1986, British taxpayers have been forced to pay huge sums to bail the banks out of a crisis which, frankly, was partly of the banks own making, when not a penny of that money has been passed to third world countries to relieve their debt. We now have the totally indefensible situation in which the Government are heavily subsidising United Kingdom banks against possible debt default, and none of that money is helping the poverty-stricken indebted countries. Yet, as the Minister said in answer to one of my questions on 15 February, from 1987 to 1991 net payments to United Kingdom banks from developing countries over the last five years"—[Official Report, 15 February 1993; Vol. 219, c. 5–6.] totalled £4.8 billion. That is an absolutely stunning figure. How can the Minister and the Government conceivably justify it? I do not know whether the Minister wishes to intervene to answer that. I do not want to go through what happened the other night, but I shall give him the opportunity to respond if he wishes to do so. He obviously does not wish to respond, but we will expect an answer later.

Although the Trinidad terms make a tiny contribution, they do not begin to match the enormity of the problem. Over the past decade, Africa's debt has more than tripled from 28 per cent. of GNP to 109 per cent. In other words, Africa now owes more than its entire annual income. Many sub-Saharan countries, the poorest of all, and including those now embarking on post-war reconstruction and which need assistance, such as Mozambique, Ethiopia and Eritrea, owe three times their national incomes, or more. Zambia, for example, where the average wage is $300 a year, owes $1,000 in debt for every man, woman and child.

When debt reaches those astronomical levels—and they are astronomical—it is patently unrepayable. Yet for the G7, including Britain, to ignore that not only snuffs out indefinitely the prospects for recovery for much of the southern world but undermines growth prospects and job opportunities for the northern world.

For the past four years—I do not think that this statement needs qualification—the Government have done nothing new to deal with the mounting debt catastrophe. In trade, the G7, including Britain, is scarcely serving the third world any better. The protection of northern markets by northern countries costs third-world countries an estimated £100 billion a year. That, of course, does not count the damage caused by common agricultural policy food exports being offloaded on to world markets. The sums for trade greatly exceed the total of official aid.

Of course, I am the first to accept that the Uruguay round of GATT will bring benefits to the third world, but the poorest countries under the existing arrangements are still likely to be worse off. They will often be unable to take advantage of new market opportunities, yet they have to open up to foreign competition. The relative value of their current trade preferences will be reduced, and fledgling service sectors in the third world may be wiped out. New rules on intellectual property will make technology transfer and economic development more difficult.

Above all, I emphasise the fact that GATT will not tackle the commodity crisis, which is at the heart of the developing countries' problems. Their indebtedness escalated in the late 1980s because they were caught in the trap between plummeting commodity prices and soaring interest rates. What is unforgivable is that Government policy, like that, I admit, of other donor countries, makes the problem a great deal worse by supporting structural adjustment programmes which hinge on making poor countries export more. When, under pressure, they export more, they of course contribute to oversupply and thus drive prices down still further. How can the Government continue to support trade policies which reinforce the vicious spiral of poverty and decline, which is what has been happening for several years?

On aid, the G7 summit agreed that development assistance should be enhanced. I welcome that conclusion, but the Government have made no commitments to respond. I do not think it is difficult to see why. Britain's record on aid—to put it no finer—is thoroughly depressing. Since 1979, Britain's official development assistance has fallen from 0.5 per cent. to 0.3 per cent. of GNP. Last year, the Government spent less than the Development Assistance Committee average and less than half the United Nations target of 0.7 per cent. of GNP. I am well aware that the Government insist that they will hit that target as, I suppose, the English cricket team does, although the latter are more honest about their likelihood of reaching the target.

The Government's aid budget is still being cut, and it fell last year. I can give the Minister the figures if he is in any doubt. These are Government figures. Last year, the aid budget fell 4 per cent. in real terms and is now only three-quarters of the level of aid spending in 1979. Worse still, of course, is that the Government are proposing a two-year freeze on aid which even the Overseas Development Administration admits will knock a further £150 million off the aid budget. When the lower purchasing power of the pound after the black Wednesday devaluation is taken into account, it is more probable that the cut will be nearer to £250 million.

Mr. Lennox-Boyd

I am always amazed by some of the statistics with which the hon. Gentleman is briefed, because they are always at complete variance with my figures. I wish to make two points. The aid programme has risen in real terms by 10 per cent. since 1987–88.

Mr. Tony Worthington (Clydebank and Milngavie)

What about the past 14 years?

Mr. Lennox-Boyd

I said since 1987–88.

Mr. Meacher

What about last year?

Mr. Lennox-Boyd

The hon. Gentleman says last year, but I am talking about the previous six years. Let me answer. The budget for the financial year 1993–94 has risen 1 per cent. in real terms when compared with last year.

Mr. Meacher

Listening to the Minister's weasel words, one might assume that the Government came to power in pieces and that the ODA only gained power in 1987. I remind him that the Government came to power in 1979. Since then there has been a large fall in aid levels of about 17 per cent. in real terms. The Government have done just about everything in the book to downgrade the aid programme. They have pensioned off the Minister with responsibility for aid to another place and have left the hon. Gentleman in charge in this House. After his performance in the debate two evenings ago, I will forbear to comment further as it is all there to read in the record.

The aid programme has been almost halved. It is now being frozen. In the next decade, up to 40 per cent. of it will be passed to the European Community's aid programme, which the Government have always said is inferior in quality. Much of the rest is now being transferred from the dirt-poor south to the much better-off eastern Europeon and former Soviet Union countries, and the remainder is subject to an increasingly restrictive political and economic conditionality, which is often counter-productive. Short of demanding that, in future, aid be given only in exchange for donations to the Tory party, I do not see what more the Government could do to downgrade their aid programme.

If the Tories were really concerned about aid and development, if they really cared about a vision of one world, there is a very great deal that they could and should do now.

On debt, they should prepare a new debt relief package for the annual meeting of the International Monetary Fund and the World bank and for the meeting of Commonwealth Finance Ministers. This should propose debt write-off of 80 to 100 per cent. for the very poorest countries, whose debt, in any case, is manifestly unrepayable. The Trinidad terms should be revised to grant debt relief on the whole stock of debt—not just, as at present, on the debt falling in the next three years or incurred before a cut-off date. The Government should come forward with a strategy to reduce multilateral debt. I might add that 91 per cent., I think, of the indebtedness of sub-Saharan Africa is multilateral, not bilateral. Thus, this is a very important area, in respect of which we need a new strategy. We need a strategy to halt what is now a net transfer of resources to the IMF—either through a new issue of special drawing rights or through the sale of IMF gold stocks.

On trade, the Government certainly should, and could, be much more helpful in the renegotiation of international commodity agreements in order to tackle what I have described as the worst aspects of the commodity crisis. They should, and could, explore ways of helping to compensate the developing countries for the losses that they face under the GATT agreement, and they should support the African diversification fund, as proposed under the United Nations programme of action for African recovery, with a view to promoting the desperately needed switch into processing.

On aid, the Government should support the demand of the non-governmental organisations that official development aid to sub-Saharan Africa in 1994–95 be increased by at least £100 million. If the Minister is concerned about where the money might come from, I suggest that the aid could well be paid for by reducing the subsidy to the banks against non-existing default. The Government should also give a commitment that United Kingdom aid to sub-Saharan Africa—the poorest part of the world—will continue to increase, in real terms, during the life of this Parliament.

Finally, if the Government are really concerned about aid and development, as the Labour party is, they will drop this dog's breakfast in the Foreign and Commonwealth Office and set up a Cabinet-level department of international development, as Labour is pledged to do. That would give the handling of these issues the political clout and the administrative weight that they urgently need. It is on those grounds that I strongly commend the motion to the House.

7.33 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd)

I beg to move, to leave out from 'House' to the end of the motion, and to add instead thereof: 'noting the problems of indebtedness and restricted trade access in hampering the growth of developing countries, welcomes the agreement by the G7 countries in Tokyo to consider improved debt reduction terms for the poorest and most indebted countries, including the possibility of earlier action on reducing the stock of debt on a case by case basis in accordance with the Prime Minister's Trinidad Terms initiative, to make all efforts to enhance development assistance, and to seek to achieve a successful Uruguay Round before the end of the year.'. I try to take the comments of the hon. Member for Oldham, West (Mr. Meacher) seriously, but so often I find that his gift for exaggeration and his thrashing about in so many directions completely destroy the impact of any point he might be trying to make. I shall make a few overall comments, during the course of which I hope to give some reply to the hon. Gentleman's words. As he said, I am the Minister responsible for defending the Government in respect of aid matters. However, as hon. Members know, this debate is not just about aid; it is very much about trade and debt and about sensible policies in the developing world as well. As it is about trade as well as aid, my hon. Friend the Minister for Trade, who is responsible for these matters, will reply to the debate. He will be able to give the House some enlightenment in addition to my comments about the recent Tokyo summit and the prospects for the GATT round.

The Tokyo summit paid very close attention to the problems of the developing world. Quite contrary to the emphasis that the hon. Gentleman sought to attribute, the fruits are contained in the economic declaration. I strongly advise the hon. Gentleman to read that declaration more carefully than he can have done so far, so that he may recognise the force of what I am saying. In any case, I shall illustrate the point by further argument in the course of my remarks. First, I should like to say a few words about the Tokyo breakthrough on trade liberalisation, which is also of great importance to the developing world.

For the past four years the G7 summits, in their communiques, have called on the international community to work for the early completion of the Uruguay round. In previous years that call had gone unanswered. This year the situation was different: the summit acted as a catalyst for the consensus on market access in certain key areas reached by the trade negotiators in the four areas known as the Quad—the United States, Canada, Japan and the European Community. This was a great sticking point in the whole process of the GATT round. To have overcome it means that the prospects for agreement on the GATT round by the end of the year are greatly enhanced. That will be enormously to the benefit of the developing world.

This is a crucial building block of the elements that will need to be put in place in Geneva by all the participants to ensure a successful conclusion to the Uruguay round. As I have indicated, that success is crucial to the developing world. The reason—and this is the context in which the debate should be placed—is that developing countries earn three times as much income from trade flows as from aid. Trade is essential to the developing world. [HON. MEMBERS: "Of course."] Hon. Members say, "Of course." They too are stating the obvious. Let me say what I think is very important, even if they find it obvious.

Success would give a terrific boost to the world economy. There would be renewed confidence in investment overseas. In specific terms for the third world, the restrictions placed on subsidised agricultural exports would give developing countries a better chance to compete at home and abroad. Such a prize will be within our grasp in Geneva in the coming months, and we intend to keep up the momentum until there is a successful resolution.

Mr. John Battle (Leeds, West)

Will the Minister give way?

Mr. Lennox-Boyd

I shall give way very briefly, but I am conscious of the fact that many hon. Members want to speak.

Mr. Battle

The truth, which did not come out at the summit, is that the GATT round will leave the poorest countries worse off. As the relative value of their trade preferences declines, they will be forced to open up their markets to foreign competition, but they will not be in a position to enjoy the advantages. Therefore, their trade flows will be in the opposite direction. Why was that not appreciated at the G7 summit?

Mr. Lennox-Boyd

If Opposition Members truly believe that, it is clear that there is a fundamental divide between us. I utterly reject that sort of thinking. Let me explain why. [Interruption.] I do not simply assert that. If I am given a chance, I will explain why.

I reject that thinking because the annual volume of world aid to the developing world is $60 billion. The annual volume of world trade to the developing world is worth three times that amount, $180 billion. The GATT round will increase world trade benefit to the developing world by $90 billion. That is half the trade figure that I just quoted and it represents a gigantic boost to the trading and economic prospects of the third world.

If we pursue that point any further we shall end up arguing about matters that we shall unable to resolve and all that we shall be able to do is to identify that there is a disagreement between us.

Mr. Worthington

Will the Minister give way?

Mr. Lennox-Boyd

Yes, but for the last time.

Mr. Worthington

This is a crucial point. Can the Minister tell us whether the manufactured or processed products of the third world will now be allowed into our markets without any problems? At present, tariffs must be paid on processed goods from the third world. Have those restrictions been swept away by the G7?

Mr. Lennox-Boyd

The G7 is not an implementing body, but a debating one. We have, however, carried the argument about trade restrictions a stage further. The hon. Gentleman must accept that Britain, and the Conservative Government in particular, cannot be faulted in wanting to relieve the world of restrictions in trade. At every forum and at every opportunity, we seek to reduce the restrictions on world trade.

The multi-fibre arrangement was discussed at the Tokyo summit. We are arguing for further liberalisation of that arrangement, which will help the third world. I will say more about that if I can get on with my speech.

Mr. Worthington

So the answer to my question is no.

Mr. Lennox-Boyd

The answer to the hon. Gentleman's question could not be yes. Of course all restrictions were not removed by that meeting in Tokyo. As I said, the G7 is not a decision-implementing body, but one in which matters are debated and arguments taken further forward.

Mr. Jim Lester (Broxtowe)

May I recommend to Opposition Members that they read the book prepared by the Overseas Development Institute, which provides detailed information about the GATT round and is extremely careful in its assessment of the impact of that round? It came to the conclusion that the third world would benefit from the GATT round.

Mr. Lennox-Boyd

I am grateful to my hon. Friend for that extremely helpful intervention, which will enable some Opposition Members to learn rather more about the subject. Even if they do not agree with the judgment given, they will come to appreciate that a large body of extremely respectable opinion shares my view—a view that my hon. Friend the Member for Broxtowe (Mr. Lester) has also confirmed.

Mr. Derek Enright (Hemsworth)

Will the Minister give way?

Mr. Lennox-Boyd

I am not frightened of giving way, because I have given way every time I have been requested to do so, but if I continue to do that I shall deprive hon. Members of sufficient time for debate. I will give way just once more.

Mr. Enright

Which commodities coming from the least developed countries will benefit from GATT?

Mr. Lennox-Boyd

I intend to say something about the multi-fibre arrangement in a moment.

It is the view of the Government and of many thinkers on the subject that increased trade is the central key to development. It enables developing countries to increase their own living standards. Development involves a partnership between the developed and the developing world and a comprehensive approach is needed.

Four essential elements are required to help the poor of the world. As the hon. Member for Oldham, West highlighted, it is important that aid is well targeted. A debt strategy is also important. I hope that I shall be able to demonstrate to the House that that strategy was taken a stage further by discussion at Tokyo. The other overwhelmingly important element is trade and investment by other countries in the poor countries. [Interruption.] The figures demonstrate how important that is. That is not my blind assertion—it is backed up by the figures that I gave the House just a few moments ago.

The hon. Member for Oldham, West could have tabled a question at any stage to find out how many countries had benefited from the Trinidad terms. He asserted that 14 countries had benefited, but, so far, 17 countries have. I believe that the hon. Gentleman also said that $1 billion of debt had been written off, but in fact $2 billion has been written off.

Mr. Meacher

About £500 million quid.

Mr. Lennox-Boyd

The hon. Member for Oldham, West was kind enough to congratulate the Prime Minister, and I am grateful to receive the compliment on my right hon. Friend's behalf. I should like to go further, because without a shadow of doubt Britain has led the way in promoting international agreement on debt relief for the poorest developing countries. That debt relief was at the personal initiative of the British Prime Minister and, as a result, $2 billion of debt has been written off. What was significant at Tokyo, however—

Mr. Worthington

What about commercial debt?

Mr. Lennox-Boyd

I shall come on to that, but give me a chance. I shall not shirk the questions that I have been asked, but, as always in such debates, there is an awful lot of chuntering coming from those on the Opposition Front Bench. I am hardly being given a chance to answer the questions that I am asked.

We have long argued that more needed to be done and we are therefore delighted that the Tokyo summit called on the Paris Club of Government creditors to reconsider the issue. I am especially pleased to note that, for the first time, the possibility of action, case by case, on reducing the stock of debt was raised, again in line with the Prime Minister's original proposal at Trinidad in 1990. The stage is therefore set for building on the consensus of the seven participants at the summit for further concrete proposals within the Paris Club.

I am glad that the hon. Member for Oldham, West has been reasonably patient because I am about to discuss two issues that he raised—net flows and commercial debt. The figures from the OECD—[Interruption.] Opposition Members are always grinning. If only they would get some facts—listen and get some facts.

The figures from the OECD, which are much more comprehensive than those from any other source, for net resource transfers show that developing countries received £31.4 billion more in 1991 than they paid out. That figure confirms the encouraging recovery of recent years in resource transfers to developing countries.

The hon. Member for Oldham, West referred to the southern world. I do not know whether he was referring to sub-Saharan Africa or to the more general region. Sub-Saharan Africa is repaying the IMF more than it receives in new money at the moment. The IMF is not withdrawing from Africa, however, because it plays a vital part in catalysing financial flows from elsewhere. It is anxious to help the countries of sub-Sahara to meet their technical and financial needs. The IMF flows are only a small part of the total aid.

Sub-Saharan Africa has consistently received more than it pays out when aid, foreign direct investment and other sources are included. In 1991 it received £6.95 billion, nearly £7 billion, according to World bank figures.

Mr. Worthington

They cannot be true.

Mr. Lennox-Boyd

I will write to the hon. Gentleman with the references so that he can check the figures in the relevant publications. If he does not have a copy of them, they are, of course, in the Library.

Some developing countries, particularly in Latin America, owe a significant proportion of their debt to commercial banks. It is not for our Government, or any other Government, to encourage, much less force, banks to cancel debt. That would deter them from lending to developing countries ever again in the future.

Nevertheless, a tremendous amount of progress has been made multilaterally in reducing those debts. Some 90 per cent. of major debtor nations' bad debt is now covered by a commercial debt relief deal. The hon. Member for Oldham, West will be aware of the Brady plan, for which the United Kingdom has provided its share of finances, which helps debtor countries and banks to reach voluntary agreements on commercial debt reduction.

The International Development Association also helps low-income countries to reach agreements with banks on commercial debt reduction. We are an important contributor to the IDA, which also gives concessional loans and uses IDA reflow to meet debt service obligations on old World bank loans. I am happy to have answered the hon. Gentleman's points in that regard.

Mr. Meacher

Will the Minister give way?

Mr. Lennox-Boyd

No, I shall not give way again. I have given way four times in this short debate. Not only Opposition Members but several Conservative Members want to contribute to the debate and I do not see why I should prevent them from doing so.

The summit considered measures to help eastern and central Europe and the former Soviet Union in their transformation from command to market economies. That matter is of great importance for world stability, which is affected by any instability in the former Soviet Union and eastern and central Europe. The summit welcomed Russia's renewed commitment to economic reform, which has made possible a $1.5 billion drawing facility from the IMF's new arrangement, called the Systemic Transformation Facility. A new programme worth $3 billion to promote privatisation and restructuring was also put in place.

As my hon. Friend the Member for Croydon, South (Mr. Ottaway), who takes an interest in population, is in the Chamber, I register the importance of population. It should be registered on every occasion, but not dwelt on as I have already debated it with him. That issue was raised in Tokyo and I am pleased that the importance of helping developing countries to deal with the problems of population growth was recognised. The international conference on population and development taking place in Cairo next year will provide an opportunity to address those issues again.

The hon. Member for Oldham, West made much of the need to help the poorest in the world and I appreciate his concern. In our efforts to promote development, the poorest have been the focus of our attention. Action on trade and debt is essential for developing countries' prospects but many of them, especially the poorest and most vulnerable, will continue to need access to concessional finance for the foreseeable future.

Our aid is part of an overall international effort and has helped to bring about progress—[Interruption.] The hon. Member for Oldham, West must look at the facts, not simply assert what he wishes or believes to be true. No one wants to be complacent about the matter, but let us get some facts clear. In the past 25 years, many developing countries such as Korea, Malaysia and Sri Lanka have seen a substantial rise in their per capita income. We do not give aid to Korea or Malaysia, but the aid that we give to Indonesia always irritates the Labour party. Those countries have improved the lot of their people. Life expectancy has risen and adult literacy has increased.

The hon. Member for Oldham, West described the Tokyo summit as an event not of disappointment but of despair, which overlooks the progress that has been made and should be recognised, even though the picture is not completely bright.

The problem of sub-Saharan Africa is a cause for concern. The hopes of many African countries have not been realised, but even there progress has been made with countries such as Botswana, Mauritius and Ghana, which reap the benefits of the right policies. I am pleased that Africa's problems were fully recognised at the summit. We now look ahead to the international conference on African development taking place in Tokyo in October, which will consider the problems and solutions in more detail. Africa is a priority in our aid programme and nearly 50 per cent. of our bilateral aid goes there.

It is important that developing countries should have the right policies to combine with the liberalisation of trade and the aid that we give them. To be effective, aid must be properly targeted and used in the right context, which means that developing countries must get their policies right. Those policies must support economic growth, encourage enterprise and allow their citizens to play a full part in economic and political life. That is why the focus of UNCED in Rio last year, on a national commitment to sustainable development, was so important.

The hon. Member for Oldham, West mentioned the problem of commodity prices. Of course a problem exists in commodity prices, but I support the Government's opposition to commodity price support stabilisation measures, which set artificially high prices, or in other cases distort market trends. There is no easy solution to commodity prices in developing countries, but the solution must remain diversification and not continued over-reliance on volatile commodities.

The effectiveness of our aid programme has been widely recognised, even if the hon. Member for Oldham, West is not prepared to give it that credit. Elements of quality include its focus on the poorest: 80 per cent. of bilateral aid goes to countries with per capita incomes of less than $700 a year—[Interruption.] I cannot take sedentary interventions the whole time. I have responded to many of them—

Dr. Lynne Jones (Birmingham, Selly Oak)

Will the Minister give way?

Mr. Lennox-Boyd

No, I cannot allow any more interventions. I have given way four or five times and I shall not do so again.

Our programme is highly concessional. All new aid to the poorest is on grant terms, which avoids adding to their debt burden. We have the most rigorous criteria—economic, technical and environmental—to ensure the quality of the programmes and projects that we support. Our aid is well targeted on areas of key relevance to the central aim of sustainable development, as was recognised at UNCED.

Long-term aid has helped some developing countries to create the right climate for economic growth and investment by providing incentives and support for reforms. Aid cannot do it all, however. It is enormously important to accept the argument that a comprehensive approach to the problems is needed—an argument that was stressed at the summit. A comprehensive approach bringing together trade, debt relief and well-targeted bilateral and multilateral aid is the way to help the developing world.

I was deeply disappointed with the speech of the hon. Member for Oldham, West. I was also deeply disappointed with the terms of his motion. So far as I am aware, the motion was received only very late last night, but it looked as though it had been written long before anyone went to Tokyo. It is remarkable that the objectives that the motion complains were not achieved in Tokyo were in fact achieved in Tokyo.

Mr. Meacher

Such as?

Mr. Lennox-Boyd

I will tell the hon. Gentleman. As I said, the economic summit is not a decision-making organisation, but the Prime Minister secured agreement on the call to the Paris Club to reconsider introducing improved debt reduction terms for those countries in greatest need. The hon. Member for Oldham, West states in his motion that the G7 summit failed to agree any new significant programme of debt relief". He is wrong. He goes on to state that the G7 summit failed to ensure any adequate place for developing countries in future world trading patterns via the GATT Uruguay Round". Developing countries stand to gain from increased and fairer flows of trade, which will result from the Uruguay round. The hon. Member further states that the Government should prepare a new British and international initiative for debt write-off for the poorest countries". We have no need for new initiatives as we have the Trinidad terms—the initiative launched by the Prime Minister. The rest of the world is beginning to accept the arguments that we have deployed over the years for an extension of the Trinidad terms. We are taking the initiative. We have pressed for that initiative. The hon. Member's motion is absurd.

Mr. Meacher

Will the hon. Gentleman give way?

Mr. Lennox-Boyd

Do not spoil my speech. I shall not give way as I have given way to the hon. Member several times.

The hon. Gentleman said that the Government should take the lead in setting out a trading framework which will ensure that developing countries can play a full part in the world trading system. The key to achieving that aim is to pursue with vigour the chance to conclude the GATT process and to increase the trade of the poor world by $90 billion per year.

The British Government have pushed for some time for the phasing out of the multi-fibre arrangement, and the incorporation of trade in textiles into the general agreement on tariffs and trade as part of the Uruguay round. That will improve developing countries' access to our textile markets.

I urge the House to consider those matters. It should consider the context of the aid in the correct dimension of a wider context which contains all the factors involved, and reject the motion.

8 pm

Sir David Steel (Tweeddale, Ettrick and Lauderdale)

I shall start by confessing to the House that during my long time here I have never discovered how to be in two places at once. I have an engagement which will prevent me from listening to the entire debate, but my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) has kindly offered to do so. Therefore, I owe the House the courtesy of being brief. I shall deal with the issues of aid, trade and debt in that order.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs is one of the most exasperating Ministers to follow in any debate. I have listened for 38 minutes to a speech which had, at the most, 18 minutes' worth of content. The Minister is so nice that he keeps interrupting himself—the asides and diversions prolonged his speech. He asked Opposition Members to stop asking questions, to stop chuntering and to stop grinning. He stopped short of asking them to stop breathing. Everything that the Opposition did appeared to prolong the speech. The Minister's most revealing aside was when he confided in us that he agreed with Government policy. That fact is worth highlighting in yellow in Hansard.

There was an exchange of statistics on aid and, as so often happens in this place when the Government and the Opposition exchange statistics, both were correct, but they were trading different ones. Sadly, in 1992 our official development assistance fell from 0.32 per cent. to 0.31 per cent. of gross domestic product. We moved away from the United Nations target, instead of moving towards half the United Nations target. That fact is incontrovertible.

As the hon. Member for Oldham, West (Mr. Meacher) said, since 1991 our overseas development aid budget relay assistance budget has fallen by 4 per cent. The Minister countered that by saying that the budget for 1993–94 shows an increase of 1 per cent., which is splendid, and if we add the two together there is a net decrease of 3 per cent. He asked the Opposition if they would at least agree on the basic figure. Even my elemental arithmetic allows me to work out that one plus minus four equals minus three. The Minister produced a figure for 1987.

The Government's record on overseas aid since they came to power in 1979 has been lamentable and the fault for that lies with the previous Prime Minister. It has to be said in favour of the present Prime Minister that he has changed the record so that it is no longer totally disgraceful, but rather poor. That is all that can be said about it.

I am glad that the Minister for Trade is present and is to sum up the debate—I shall be back to hear what he has to say. I want to ask him a specific question on the future aid budget. It is a question raised by the House of Lords in the report published last month by the Select Committee on European Communities. We are committed to an increase in the European Community's aid programme. The Lords report makes interesting reading as it commends the European Community's aid programme. On page 22, paragraph (b), it states: We are concerned about the potential serious effect on the United Kingdom's own bilateral programme because of the decision to increase EC aid without knowing whether there will be a corresponding increase in the ODA budget which finances both our share of the EC's programme and also our own bilateral programme. There is a risk of an unacceptable squeeze on our bilateral programme. I hope that we can be told what the effect will be of our commitment to join in the share of the increased EC budget as well as enduring the current public expenditure squeeze on our budget.

It remains my party's firm view that we should not just make a general commitment—as the Government have—to the United Nations target on overseas aid without setting a date, but have a specific programme. No political party, even one which has been out of power as long as mine, can promise to do that tomorrow, but we should have a committed programme over a full Parliament to reach the United Nations target of 0.7 per cent., which is attainable and reasonable and should be met.

Two propositions were made, one by the Government and one by the Opposition, on which no agreement was reached across the Floor of the House. As the Minister said, there is no doubt that the developing world as a whole will benefit from increased liberalisation of trade. However, it is equally true, as one or two Opposition Members said, that the very poorest countries do not stand to benefit. Both propositions are correct. We are entitled to ask the Government what approach they take to future GATT talks—that is a direct question for the Minister for Trade. It seems that the GATT will not tackle the commodity crisis. The poorest countries naturally have to rely heavily for income on their own primary products, but the price of those products has been falling—it fell 30 per cent. in the 1980s.

The EC tariff on cocoa beans is 3 per cent., but if the beans are processed into cocoa butter in the country of origin the duty is 12 per cent. If they are further processed into chocolate it rises to 16 per cent. Such a policy discriminates against the economic development of primary products in the developing world. We are entitled to ask what the Government will do about such issues in future trade negotiations because such policies operate against countries that have few resources other than primary products that they wish to develop.

The Government must pay special attention to the commodity problem. They should consider compensation for the losses that the poorer countries would face under GATT agreements. They must consider some support to enable such countries to continue to benefit from some of their current trade preferences.

The Minister for Trade (Mr. Richard Needham)

I am sure that the right hon. Gentleman appreciates that GATT trade negotiations are conducted through the Commission. Given the right hon. Gentleman's federalist tendencies, I am sure that he is happy for that to remain the case. There is a limit to what the Government can do, but we shall take account of the commodity issue and press for a solution.

Sir David Steel

If that is a form of commitment, I welcome it. Of course, the decisions are made by the Community as a whole. I said that we are entitled to ask what the Government are doing in the Community to have those policies changed. Inasmuch as my party has any influence with Ministers and similar parties elsewhere, I assure the Minister that we shall press exactly the same issues. We do not speak with two voices on this matter.

Debt is the most serious of the three issues facing the developing world. I accept that the G7 leaders had a healthy debate on the debt burden, especially that of Africa, but the figures given by the hon. Member for Oldham, West are correct and show the huge increase in debt in the past half dozen years. Although my figure on Zambia's debt is different from that of the hon. Gentleman, it shows that every man, woman and child in that country owes more than twice the national income. That is intolerable.

The fact that some of us were a bit disappointed by what happened in Tokyo is illustrated by the text that I read in the Library of the detailed communique and the Prime Minister's statement. I shall contrast what he said about the aid to Russia with what he said about aid to the poorest countries. He said that the Group of Seven had put together an unprecedented set of measures to help Russia. He went on: We set out a programme worth some $3 billion to help privatisation and restructuring. I am not in any way against those firm and specific proposals. However, later in the statement when the Prime Minister dealt with debt reduction, he said I secured agreement that improved debt reduction terms should be considered for the poorest and most indebted countries. I hope this will carry implementation of the Trinidad terms further. The Chairman of the Select Committee on Foreign Affairs, the right hon. Member for Guildford (Mr. Howell), the hon. Member for Oldham, West and I went to see the Prime Minister before he left for Tokyo. Therefore, I am aware of that hope. However, the G7 summit did not produce the firm commitment to relieve debt in the poorest countries that it produced on the issue of aid to Russia.

Mr. Lennox-Boyd

I think that the right hon. Gentleman gives us credit for trying. Success will be achieved by taking consensus forward. The alternative might be to have some sort of unilateral concession by the United Kingdom on some debt, but that would be nothing like as effective for the poor world as one that had the agreement of the other parties to the Paris Club.

Sir David Steel

When the Minister reads Hansard he will see that I thanked the Prime Minister for his efforts. We should not get carried away simply because G7 countries are considering the matter. As democratic politicians we are entitled to press for more specific action. The Minister tempts me to digress a little.

In the House and privately to us, the Prime Minister said that the Japanese Government, who are one of the major players, are philosophically reluctant to engage in debt write-off. I raised that with a Japanese Government representative a few days ago. He said that that was true, but that they would compensate for that by greatly increasing grants to the developing world so that it could pay off debt. I do not know the scale of that, but if the Japanese Government are pursuing that policy, at least they are not proving an obstacle to greater agreement among the G7 countries on the debt question.

Pressure on the commercial banks should not be passed over as lightly as the Minister did. If my memory serves me right, there was a measure in last year's Finance Bill to help the banks to write off debt. I am not a Treasury expert and someone from the Treasury would be needed to speak about that. Moreover, many commercial banks have made provision in their accounts for writing off debt but have not written it off. Surely the Government should have a word with the commercial banks to persuade them to do more on this issue.

Secondly, what is the Government's strategy towards the multilateral agencies on debt? The IMF and World bank meeting will be held in September. What stance will the Government take at that meeting to try to get the agencies to do more? As we have heard, the Commonwealth Finance Ministers meeting and the international conference on African debt will be held in October. All those meetings are scheduled to be held shortly and there is scope for the Government to continue to take a high profile on debt relief. Yes, we shall thank them for trying, but we shall thank them even more when they succeed.

8.16 pm
Mr. Bowen Wells (Hertford and Stortford)

I congratulate my right hon. Friend the Prime Minister on his achievements at the G7 summit in Tokyo. He has returned from all three recent summit meetings—in Copenhagen, Edinburgh and Tokyo—with the consistent message that he wishes to see measures that will encourage economic development in the industrial world and in the third world.

At the Tokyo summit, there was major progress on debt, on the GATT talks and on world trade and unemployment. Those are the problems that will beset the world and we must try to deal with them in the third world, Russia, Asia, Europe and the Americas. The theme of the Prime Minister's message to the House on Monday was that he believed that more trade produced more jobs and that economic development was the way to deal with debt issues and the alleviation of poverty, to which we are all devoted.

One of the major issues in economic development in Africa and the third world is debt. The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) rightly said that African debt is largely to the international financial institutions and not to the commercial banks or to Governments.

Therefore, the debt problem in Africa, and especially in Zambia about which the hon. Member for Oldham, West (Mr. Meacher) was concerned, is a matter for the international financial institutions. To clear that debt, we must consider complete debt forgiveness. In that context, the Japanese example is important, but without debt forgiveness interest continues to mount. Debt forgiveness is needed from the Japanese and I am afraid that we shall have to press them still further, because just giving grants to repay debt will not be sufficient to pay the capital let alone the interest that has accrued on much African debt. That is especially true of the highly indebted Zambia.

Therefore, there has to be bilateral action by the member states of the G7 and others to write off debt in the Trinidad terms to which every hon. Member has referred. It was pioneered by my right hon. Friend the Prime Minister when he was Chancellor of the Exchequer and he has continued to press it throughout all the international conferences he has attended.

We have to take further initiatives and consider all the debts in each country—private debts, commercial debts, trading debts and debts to international financial institutions—make an overall settlement with each country and arrange for repayments to be made over an extended period. Some 35 years or more may be necessary for those countries to be able to afford to repay the debts on a controlled basis without taking too much of their export earnings or their gross domestic product which in some countries in Africa is entirely hypothecated to the repayment of debt.

Considerable progress has been made in debt repayment. One can point immediately to Mexico which was one of the major indebted countries when we were considering these matters in the early 1980s and when the Brady plan came into existence. A great deal of effort has gone into Mexico, and Mexican debt has now been stabilised. We are seeing inward investment into Mexico and the stopping of capital flight from Mexico which is becoming a focus for inward investment. That represents a great international success in dealing with debt worldwide. The same story applies to many countries in South America.

The international community, with Britain playing a leading role, has had considerable success which we should not underestimate or denigrate. However, we have to go further; it is never enough—but that always applies to all aid issues.

Our own aid budget, of course, is not, and never will be, enough to deal with all the problems, but I should like to make one or two suggestions. Our aid programme now, which is of high quality, is probably stretched too tightly over too many objectives to become as purposeful and effective as we should like.

The objectives for overseas aid in Command Paper 2202, the Foreign and Commonwealth Office's departmental report, list a whole set of aims, which include the adoption of economic policies that reduce price distortions and rely more on the market; encouragement of the private sector as a source of wealth creation; investment in economic and social infrastructure; improvements in women's status; higher standards in political systems, public administration and the legal sector; projects and programmes which have a positive impact on the lives of the poorest people; and investment and planning to help protect the economy from natural disasters. That is not a full summary of what the Overseas Development Adminstration does, but it is a considerable programme to try to implement in any country, particularly in the large number of countries to which our aid budget is devoted.

I do not believe that we should cut out aid to any particular country except those with a hostile economic and governmental structure which makes economic development impossible. To use President Reagan's expression, we must concentrate more on developing measures by which we can give people in these countries the means to cure their economic problems. We should give them more of the fishing rod and less of the fish.

For example, we must reduce our concentration on health matters, education matters and technical assistance, which involves sending executives and civil servants to help with administration or central banking functions. We have to reduce those activities and concentrate more on economic development and encouraging those countries to adopt economic policies and introduce Government measures to encourage economic development. That means that we have to encourage the private sector to develop in those countries and help them to take out public sector mismanagement. For example, appalling waste can be seen in many of the Zambian parastatals which are inefficient and corrupt. We need to take them out of that inefficient management and help them get back into prosperous and efficient operations in the private sector.

The Overseas Development Administration is to be congratulated as it has started to develop some of its programme towards that end, but it must be taken very much further forward. One of the ways in which the Overseas Development Administration is immensely successful is through the Commonwealth Development Corporation and I shall say a few words about the problems that now face that corporation which I had the honour to serve in a junior capacity before I entered the House.

At present, as a result of the public expenditure survey settlement, the corporation has been left without access to the aid programme's budget and therefore to low-interest loans. If that programme continues, the Commonwealth Development Corporation will have to come out of the very places that we need to support, such as Africa. Those countries are the most difficult places in which to get economic development started. It will become exceedingly difficult for the CDC to invest in those countries, repay the loans with interest to the Government and pay tax on those loans, which are its current terms of reference and method of operation.

If, on the other hand, the Government renew their support for the Commonwealth Development Corporation, the CDC can get beneath Government level, into the wealth-creating sectors of the economy and invest in profitable operations, including, of course, those producing commodities.

We have heard about the problem of prices. We have to recognise that GATT is a very important issue for the third world countries and begin to address the problem of low and falling commodity prices which have created many problems in the third world over the past decade.

If we begin to eliminate agricultural surpluses by the elimination of subsidy in our over-subsidised northern agriculture arenas in commodities such as sugar, we will stop exporting to the world markets. The European Community exports more than 3 million tonnes of sugar to world markets with what effect? Of course, it reduces the world price of sugar and third world countries are exporting their sugar at world prices.

If we stop subsidised sugar and other commodities coming on to the world market, we will raise the prices that third world countries get for their commodities and begin the process of enriching those countries and enabling them to buy products from our countries, thus benefiting from world trade. That would benefit third world countries and enable them to help themselves. Quite frankly, that is the only way in which those countries will begin to be able to repay debt and improve their standards of living. I am forced to conclude that we must concentrate on third world countries' wealth-creating sectors, support them through aid, and reduce or write off their debts—or at least make them capable of repaying them, so that further investment by private banks and international financial institutions is not inhibited.

Those institutions have a problem in Africa, and I hope that my hon. Friends will ensure that it is raised at the World bank meeting in September. I am concerned particularly about repaying international financial institu-tion debt without reducing the inward flow of moneys from those institutions and investment in the economic cycle of which I have spoken.

Further progress has been made in finding a way in which the world economy can begin to work to the benefit of countries in not only the north—which we desperately need, if we are to be able to employ more people—but the third world. Only a beneficial relationship between the two will bring success in addressing world poverty problems.

8.30 pm
Mr. Mike Watson (Glasgow, Central)

I did not intend to refer specifically to aid agencies—which are always helpful in providing up-to-date information on their activities and advice for the purposes of such debates. However, the Under-Secretary of State for Foreign and Commonwealth Affairs reacted like a wounded animal to the comments of my hon. Friend the Member for Oldham, West (Mr. Meacher) on the success or otherwise of the Tokyo summit, and the hon. Member for Hertford and Stortford (Mr. Wells) also seems to think that the summit was a success and that the G7 ought to be congratulated.

I will quote briefly from comments by professional agencies in the field which put aid programmes into effect, and which have regular contact with many of the countries in question. ActionAid stated: The tariff cuts agreed at the summit last week are unlikely to provide many benefits for developing countries. It is disappointing that the failure to include tariffs on agricultural products may postpone agreement at the GATT talks on areas (such as agriculture) essential for the future of developing countries. Christian Aid commented: The G7 Tokyo Summit Economic Declaration…does little to promote debt relief for the Third World; it merely reaffirms the status quo. Oxfam stated: Following the failure of the G7 meeting yet again to address the problem of debt, HMG must redouble its efforts to get the issue firmly on the international agenda. Those comments counter the claims made by the Minister and Conservative Members in tonight's debate. I know which side I am on in reaching my conclusions.

I am in no doubt that, not for the first time, the G7 summit promised little and delivered even less to the developing world. The declaration does little more than maintain the status quo, while the Prime Minister's performance did not enhance his poor aid record, or that of this country over the past decade.

In 1989, when the Prime Minister was Chancellor of the Exchequer, he told the G7 summit that the Trinidad terms ought to be introduced with a view to easing the third world's crippling debt burden. We sought to support that initiative, and we continue to do so. I would have preferred a 66 per cent. write-off rather than the 50 per cent. for which the Toronto terms provided.

Four years later, even that modest improvement has not been delivered. That write-off would not itself be sufficient to counter the crippling effects of debt repayment, yet the Prime Minister—despite the fine words of Conservative Members—was unable to deliver even that pledge, far less his new proposal for 80 per cent. write-off.

Only last month, the Economic Secretary to the Treasury, addressing the One World Action conference on debt, claimed that Britain would press for improved debt reduction terms for poor and heavily indebted countries.

He said: for some of them, particularly those in sub-Saharan Africa, much more needs to be done…We in the UK would like to see the Trinidad terms improve so that they conform more closely to the proposals John Major put forward in Trinidad in 1990. I am sorry that the Under-Secretary of State has left the Chamber, presumably to take his evening meal—although he has every right to do so. I wanted to put to him a question, of which his advisers will no doubt inform him when he returns to reply to the debate.

Where is the evidence that the good intentions espoused by the Prime Minister, the Economic Secretary to the Treasury and other Ministers were vigorously pursued at Tokyo? It is no use the Under-Secretary praising the Prime Minister. What did the British initiatives at Tokyo actually produce for the poor?

Mr. Needham

I shall be winding up the debate.

Mr. Watson

Then I hope that the Minister for Trade will answer that question.

The summit at least acknowledged the particular needs of sub-Saharan Africa, but the Under-Secretary of State made no commitment to respond to those needs. One way would be to announce additional assistance from the current public spending round. Without such a commitment, this country's already poor record of aid spending will at best remain at current levels. My hon. Friend the Member for Oldham, West spelt out that the freeze will amount to a 4 per cent. reduction in real terms.ODA funding is already in reverse, at 0.31 per cent. of gross domestic product this year, compared with 0.32 per cent. last year, which is well short of the United Nations figure.

I wholly endorse the view of the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel). that that should be an achievable target of a Parliament. Labour made a commitment to the United Nations target in its aid proposals at the last general election, and the United Nations figure is clearly endorsed by the Liberal Democrats. If the Government had a clear commitment to aid, they would at least announce a timetable to implement the United Nations target.

How do the Minister and the Government expect us to take them seriously when they are back-peddling and making no real attempts to acknowledge or to deal with the mountain of debt that is weighing down and stunting the growth potential of the third world?

The Minister for Overseas Development, Lady Chalker, constantly talks up her Department's relatively modest aid to countries such as Ethiopia, Somalia and Sudan. The briefings that emanate from the ODA refer to £20 million of food aid here or £20 million of humanitarian assistance there. I do not mean to belittle those valuable efforts, which I commend if they meet their objectives, but they pale into insignificance alongside the crippling debt burden of many African countries.

This ought to be a time of hope for Africa. Things are looking better in terms of developing democracies in a number of countries. Ethiopia, Eritrea and Mozambique—which are populated by some of the world's most vulnerable people—have seen peace established and maintained after decades of armed conflict. However, of necessity, they remain fragile and are seriously under-mined by lack of support from the international community, which allows their debt burden to rise.

Nowhere is the legacy of accumulated debt more threatening than in Ethiopia. It is estimated that its economy shrunk 6 per cent. last year, and that it will need to find £1 billion annually over the next three years just to cover debt service payments. It is surely important that such a sum should be used to develop Ethiopia's economy, feed its people in the short term, and ensure that it can sustain itself in the long term. That is more important than servicing debts which, no matter how much is repaid, seem to grow ever larger.

From the threadbare section on aid that emerged from the Tokyo declaration, it is clear that the world's richest nations failed to grasp the fundamental point. That statement was vague and complacent: We will continue to strengthen our support for their self-help efforts based on the principles of good governance. We will also encourage them"— the developing countries, that is— to follow sound and open economic policies to create a solid base for sustainable economic growth. "Encourage" is the key word. Many of the countries concerned have been effectively strangled by structural adjustment programmes, mainly through the World bank.

The declaration continues: we will make all efforts"— there is nothing more precise than that— to enhance development assistance in order to respond to ongoing needs as well as new requirements. Although the Prime Minister and the other G7 leaders may have achieved some successes, I venture to suggest that tackling the issues of aid, trade and debt in the developing world was not one of them.

The massive wave of debt repayment that washes over the poorest countries every year hits Africa hardest. Between 1985 and 1992, the continent repaid more than £80 billion in servicing its debt, diverting Government spending from desperate social need and choking at birth any real chance of recovery. To concentrate on Africa—in which I have taken a particular interest—is not to ignore the need to assist other developing countries; I accept that need exists much further afield. It merely reflects the priorities at a time of scarce economic resources throughout the world.

Of course, everything is relative. In Latin America, external debt amounts to an average of 37 per cent. of gross domestic product; in the United Kingdom, the figure is about 6 per cent. In Africa, the average exceeds 100 per cent., and is much higher than that in many of the poorest nations. Zambia has already been mentioned.

The stark fact that must be spelt out repeatedly until it is both grasped and acted on is that sub-Saharan Africa owes more than it earns, and cannot hope to repay that debt in the foreseeable future. The only way in which those countries can be enabled to recover and build up their economies is the writing off of debt. The sole question should be what percentage is written off.

It could be argued that the write-off should be total, although in the past the Government have argued that full write-offs encourage debtor countries to ignore their repayment requirements. That is all very well, but to apply such a stricture to the poorest countries while applying different criteria to assistance to Russia—or the writing off of most of what Egypt and Poland owed—is to employ double standards that invite cynicism when issuing from the mouths that call for the implementation of the Trinidad terms while failing to deliver.

That tendency to cyncism is hardly diminished when we consider the performance of British banks in regard to third world lending. Most shy away from Africa, concentrating instead on Latin America—but not Lloyds and the Midland, which have done very well out of the debt built up by the developing world. Over the past three years, the developing countries have propped up the Midland, subsidising its United Kingdom operations. In 1991, without profits from third world debt, the bank would have recorded a loss of about £50 million rather than a profit of £36 million. Last year, £82 million of its operating income came from developing countries' activities.

Recently, Ben Jackson of the World Development Movement said: It is unacceptable for the banks to enjoy tax holidays at the expense of British taxpayers without passing a penny of that relief onto the world's poor and then, when it suits them, to write those debts back into their accounts". For the Midland, third world debt has turned into a nice little money earner. Its shareholders may be satisfied, but the world's poor certainly are not. Debt repayments continue to flood out of the third world. I invite the Minister to condemn the banks' self-seeking approach, and to endeavour to close any loopholes that permit such an approach.

There are two main reasons why the world's poorest countries should have been offered a major programme of assistance last week. First, they have generally done their best to repay their debts, but have simply been unable to do so. For instance, 10 years ago, the total external third world debt amounted to about £550 billion; in the intervening decade, debtor countries have paid back nearly £1,000 billion more, but they now owe £1,100 billion. They are not merely running fast to stand still; they are being propelled backwards at a rate of knots. That cannot be allowed to continue.

Secondly, the crisis is not of the debtor countries' own making. I do not deny that there are examples of economic mismanagement, largely because Governments are running economies for the first time; but a cocktail of plummeting commodity prices and soaring interest rates has caused Africa's debt burden to spiral out of all control. As a result of the diversion of scarce resources, Africa now spends four times as much on debt repayments as it spends on health care. The House has already debated the dreadful health problems on that continent.

I agree with the Minister about the need to use trade as a means of assisting such countries. Certainly, there is far more to be gained from trading with them than from simply doling out aid. Trade links provide a potential lifeline for developing countries. I think the Minister said that trade with the developing world amounted to three times the value of aid; I believe that the figure is higher, but I will not quibble. The point is that most developing countries rely on a small number of primary commodities. The World bank's commodity price index has plummeted by some 30 per cent., with all-too-predictable results for the poorest countries.

As has been pointed out, the tariff cuts agreed at last week's summit are unlikely to provide many benefits for developing countries. None of the aid agencies considers that anything meaningful has emerged from Tokyo. It was a lost opportunity for the G7 nations. Of course we in the developed world have our own problems, but it is simply not good enough to pass up the opportunity to help the developing countries, instead producing a few bland paragraphs in a subsequent announcement.

Oxfam is one of the aid agencies that called for full implementation of the Trinidad terms. It was supported by a recently formed all-party parliamentary group called Africa Caucus, whose members include the hon. Member for Broxtowe (Mr. Lester), my hon. Friend the Member for Oldham, West, the hon. Member for Southwark and Bermondsey (Mr. Hughes)—who was present earlier—and myself. We urged the G7 leaders to give serious consideration to debt write-off at the summit: it would allow developing countries to gain the breathing space necessary to enable their economies to recover and begin the inevitably slow climb towards sustainable recovery.

Although that approach proved ineffective, Africa Caucus will continue to campaign for at least a year to highlight the serious plight of African countries, and to seek the support of the developed nations.

ActionAid, not being content with dwelling on the past, has targeted the future, referring to the annual meetings of the International Monetary Fund and the World bank in the autumn and the international conference on African development which will take place in October. Although the declaration refers to that, and also to the population conference to be held in Cairo in 1994, it does not suggest a link between those events to help the poor. As things stand, they will prove no more significant than the Tokyo summit—perhaps even less significant.

The Government must play a much more vigorous role in ensuring that the plight of the debt-burdened nations is treated seriously at such fora, and that that consideration is translated into meaningful action. So far, that has not happened.

If both the Ministers present today—and the Prime Minister—expect to be taken seriously in regard to aid, trade and debt, I suggest that they make firm commitments. First, although it stresses the need to alleviate poverty, the ODA does not measure the amount that it spends for that purpose; it is impossible to obtain a figure showing the effects of that spending. I understand that no benchmarks are available to assess the ODA's performance. That gap ought to be filled. I ask the Minister to make attempts to get the ODA quickly to introduce indicators and benchmarks so that its record can be evaluated.

I mentioned earlier that the Government should also revoke the decision to freeze between now and 1996 the official aid figure that has already been announced. I referred to the effect that that will have. It amounts to de facto cuts, which represent a further betrayal of the developing world. Those cuts should not be forced on them after the empty hand that was shown to them at Tokyo.

The Minister should also commit additional assistance from the current public spending round to the poorest nations. Apart from increasing the assistance given to them, it might also act as an incentive to Britain's G7 partners, who are clearly in need of, shall we say, a vigorous prod in that direction. If that is not done, nothing will change.

Can the Minister assure us that the British Government will match their good intentions with tangible evidence of their determination to bring about the implementation of the Trinidad terms? They are taken along to the G7 and other summits, but nothing really meaningful seems to emerge. If the Government do not do that, I fear that, for the world's poor, it will be a case yet again—and I am sick and tired of this—of jam tomorrow. Many of those people do not have the ability to get the bread on which any jam, whatever form it might take, could be spread at any future time. It is time to act. We really must provide something more tangible than what was produced at last week's G7 summit.

8.50 pm
Mr. Jim Lester (Broxtowe)

It is a pleasure to follow the hon. Member for Glasgow, Central (Mr. Watson), whose views and expertise we recognise. However, the motion on the Order Paper amounts to shadow boxing by the shadow Cabinet. Most people realised that this G7 summit was perhaps the least fortuitous for a long time. The world is faced with many economic problems. The Japanese in particular were in difficulties, due to their elections. It was wrong to imagine, therefore, that one could go along to the G7 and find that people were prepared to find a way of resolving the problems faced by developing countries.

As the hon. Member for Glasgow, Central said, we saw the Prime Minister before he went to the G7 summit. His commitment is as strong as it was when he was Chancellor of the Exchequer. His recognition of the debt problem is still as complete as it was when he made those voluntary moves. He did not make them for any other reason than his own interest in the subject and his commitment to it. I suspect that if it were not for the Prime Minister, this issue would not have been raised at the G7 summit, that it would not have featured in the communiqué and that there would have been no commitment to follow it up.

Furthermore, no one should underestimate the views of the new Chancellor of the Exchequer, who was also in Tokyo and with whom I have had the opportunity to discuss briefly what happened. His commitment to international order equals that of the Prime Minister. I am sure that at future international meetings the Chancellor of the Exchequer will use his influence to cajole, persuade or, dare I say it, bully other nations which do not hold the same view about some of the poorest parts of the world, or about debt that can never be repaid.

The right hon.Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) referred to the fact that the Japanese do not believe in forging debt. My research work in Tanzania showed me that when that country borrowed money from the Intenational Monetary Fund about 15 years ago it borrowed a basket of currencies, most of which consisted of Japanese yen. Tanzania borrowed that money at a time when interest rates were low. Nobody told Tanzania that 10 years later, when it would have to repay the debt, it would be obliged to go on to the world market and buy yen when the interest rate was something like 350 per cent.

No one should doubt, either, the commitment of the Foreign Secretary and the Minister for Overseas Development to finding a solution to the problems that we are debating. They have shown consistent concern and they have immense practical experience of those problems. They understand the need to provide high levels of support through a combination of debt relief, better trade terms and multilateral and bilateral aid programmes.

Many of the G7 countries are concerned about the overall gap in aid levels, which continues to widen. More and more countries, under economic pressure, are reducing and redirecting their aid programmes—for example, Canada, the United States and Sweden—at a time when the needs of sub-Saharan Africa and other parts of the world have never been greater. We should be concerned about the whole international aid effort and the way in which it is moving against the incredible demands for aid, in particular from sub-Saharan Africa.

I am sure that all hon. Members who are now in the Chamber have signed my early-day motion 2099, which calls on Her Majesty's Government to find an extra £100 million for sub-Saharan Africa. I think that 124 hon. Members have already signed it. This country has particular knowledge of Africa. If we are not to the fore in arguing the case for Africa, no one else will. We must encourage the positive changes that we see taking place in southern Africa, Mozambique and Ethiopia.

Those of us who take a close interest in Africa, however, are always worried about Africa taking three steps forward and three steps back. Recent events in Angola, Nigeria and Zaire are very unwelcome. It is nevertheless in the long-term interests of those countries to know that the support of this country and of this Administration, and, I hope, more encouraging support from the Opposition than has been shown hitherto, is one way to get the richer nations of the world to recognise their plight.

I recognise how committed the non-governmental organisations are to finding the solution to these problems. It is easy to say that the G7 was a write-off if one does not appreciate how hard the negotiations can be. I have negotiated with NGOs at various international meetings and I cannot say that they are always brilliant when it comes to producing results. When I say that, I have to declare an interest. I am a member of the overseas committee of the Save the Children Fund. I am also on the board of Christian Aid—unpaid, of course.

The hon. Member for Glasgow, Central referred to Poverty Focus. I was at the conference at which Action Aid initiated Poverty Focus. Those of us who have experience of overseas development find it difficult to be exact about precisely what it is that relieves poverty. I could take hon. Members to a place in Kenya where a road has done more to relieve poverty than any seemingly positive Poverty Focus programme. It led to a large number of villages having access to the market and has lifted the burden of poverty from those places. One would not necessarily say, though, that a road programme was a Poverty Focus issue. One must be careful about trying to define the criteria too closely.

I support the ODA programme, 80 per cent. of which goes to the 50 poorest countries. It is the right one. We should keep a constant eye on that sort of programme to ensure that it goes a long way to relieving poverty. I am not as convinced as others that one can define a "poverty-related programme"—one cannot say that a programme is poverty related and that is where we should be targeting our bilateral aid.

I have always supported the Government's commit-ment to quality aid. Like my hon. Friend the Member for Hertford and Stortford (Mr. Wells), I have always argued that it should be more. In the present circumstances, I recognise that the Prime Minister is pursuing the uprating of the debt terms from what are now accepted universally and known as the enhanced Toronto terms to get to the original Trinidad terms. That would be a major step forward. I do not understand why we should go beyond the Trinidad terms in terms of international acceptance until we have the Trinidad terms. That is what the Prime Minister is pushing for and it is the direction in which we should be going.

I shall raise some concerns that are important in terms of examining the way in which aid programmes are developing. One of those concerns is the incredible pressure that the state of the world is putting on emergency relief. I am sure that not everyone recognises that emergency relief in the ODA budget has increased five-fold since 1987—it was £34 million in 1987 and is £171 million in 1992–93.

Many of us recognise that that is essential humanitarian aid. It repairs damage caused by civil wars and breakdowns in society. It is for refugees, food and immediate relief of disaster situations. If we look at what that money could do and if we look at some of the people who are causing the problems for others in their countries, there is a significant increase in development and sustainable aid if that is where it should be targeted.

I recognise that ODA has a special reputation for disaster relief. It has done that successfully for as long as I have been in the House—it goes back further than 1987 when we had the original famines in Ethiopia and other parts of Africa. We should draw more attention to the fact that the money is being diverted from sustainable developmental aid. It is not being wasted, because it is essential to protect human life, but it is being used for the opposite to what the ODA programme should be about. It is the opposite to what we believe long-term sustainable development and the money that we vote for that head should be used for.

Mr. Simon Hughes (Southwark and Bermondsey)

I share the hon. Gentleman's view entirely. When there is a disaster at home, we find money from a contingency fund which we do not otherwise call on and which is not under that budget head for the year. Does he agree that the money that has often been diverted for international relief operations, which comes out of the ODA budget pocket, should be regarded as a separate head, a contingency, when we come to the rescue of fellow human beings in the world? If we did that, the ODA budget could be geared to and directed at the sustainable, long-term progressive work for which the hon. Gentleman is arguing.

Mr. Lester

I agree with the hon. Gentleman. It is greatly to the credit of the Prime Minister that, for the first time, the Government's contingency fund has been used to restore to ODA money that has been used for humanitarian relief. It was not true of the previous Prime Minister, but it is certainly true of this one. I know that that recommendation will be supported by the Select Committee on Foreign Affairs, which is currently drafting a report on the expenditure of the Foreign Office and the ODA.

Another pressure on the ODA budget that we should understand is the proportion of multilateral aid that is taken for peacekeeping and the proportion that goes to the European Development Fund. Like the right hon. Member for Tweeddale, Ettrick and Lauderdale, I support that principle. It has always seemed to be absolutely right that the strength of the European Community can do far more for developmental assistance than individual countries picking off a little bit here and a little bit there, however important that is.

As we see an increasing proportion of our aid budget going through multilateral agencies and the European Development Fund, we need a keen evaluation of the schemes that are taken at that level. We must take seriously the fact that that is where our aid programme is increasingly being used. We should be ensuring that everything that we do through those multilateral agencies is every bit as good as the bilateral programmes for which we are responsible.

Another concern is the increased assistance to the former Soviet Union. In the case of this Government, that is in addition to the moneys originally voted for overseas assistance. That is not true of many other countries in the European Community.

When considering overall percentages of aid, it must be remembered that aid given to the Soviet Union and to central Europe does not appear as overseas development. It comes on top of and is no part of the overseas development assistance, yet it is included under that budget.

The balance between multilateral and bilateral aid is changing fundamentally and it will not be many years before multilateral aid will be greater than our bilateral aid programme. It is therefore important that the Government and all of us who take an interest in such matters should ensure that we first look for quality and effectiveness of those multilateral programmes and, when there is an increase in the ODA budget. that we also ensure that it goes to our bilateral programme to achieve the sustainable development to which we are committed.

The Government—especially the Prime Minister and the Chancellor—must remain acutely conscious of all the concerns that are expressed internationally and nationally and by the NGOs. I am sure that the Prime Minister and the Chancellor will follow the progress made at the G7 summit in all the areas about which we are concerned and in all the places where it is most effective—debt, trade and development.

9.7 pm

Miss Joan Lestor (Eccles)

I shall begin by agreeing with my namesake, the hon. Member for Broxtowe (Mr. Lester). He commented on the major crisis among the main aid donors and the reductions in aid given. That does not let this country off the hook. For a long time, we have ranked as one of the lowest main donors of aid. That is a tragedy for the developing countries and the world as a whole.

It is unfortunate that a Minister is not present for such a debate as this—not because I doubt the competence of those who are present, but simply because it downgrades the whole stature and nature of such a debate and rather gives the impression that we regard overseas aid as second class, which of course we do not.

Most of us who have fought elections I have—fought and won more than most—know that one of the biggest meetings held during election campaigns is on aid, development and peace, and is usually organised by the church. There is no question but that the general public want to support more aid, development and trade in the developing world. Surveys have shown that over half the people in the country are prepared to pay higher taxes if it would help to alleviate the poverty and the terrible problems of the third-world countries that they have seen depicted on their television screens.

Even though it is obvious, it needs to be restated that the examples of famine and starvation in developing countries and the pictures of floods and drought that we have all seen are much more to do with wars, with arms sales, and with debt and trade restrictions than with the indigenous problems.

Trade restrictions especially lock countries into a vicious circle of growing and unending misery. For every £1 given in aid, £2 is taken back as interest repayments on debt. The third world loses more through the trade policies of the rich north and war, often sadly fuelled by arms sales—and we seem to be at it again—which robs those countries of the resources they need, robs the children of their future and leaves behind a trail of misery.

The hon. Member for Broxtowe referred in passing to the briefing of other hon. Members by overseas aid agencies. I am not implying that he was disparaging about it, but he certainly questioned it. I do not believe that all the agencies can be wrong in their briefing or on what they have said about the recent summit and about GATT. Indeed, I pay tribute to those agencies, and to all those who work in aid and development. They often work under appalling conditions and some of them lose their lives, as we have recently seen.

Those workers obviously brief hon. Members. They want more aid and are concerned about what is happening. We have to listen to them because, although we may have an opportunity from time to time to go to those countries to see the problems for ourselves, we can never have the breadth of vision, understanding and experience that the people working there have.

Much attention has been paid to the Trinidad terms and to the whole question of trade. Those terms were welcomed by all in the House. I remember writing at the time that I was pleased that the Government had made a move in that direction. However, the matter does not end there. That is where it began, and things should have developed from there and have gone on apace.

The Prime Minister told the world leaders in Rio—no one would disagree— No one who has come here can plead ignorance. More people than ever before, one billion, live in abject poverty. In the same year, our aid budget for developing countries was frozen until 1996–97. That is disgraceful for a country that is still as rich as ours is.

One of the big problems which has already been mentioned is debt. That problem enormously undermines the development and growth of third-world countries. The difficulty about debt is that, unless there is a thorough and fundamental shift from the way in which we look at it and what we do about it, the position of third-world and developing countries will not change very much.

It is estimated that as much as 42 per cent. of the developing world's debt is a result of the deteriorating terms of trade, and that the servicing of that debt accounts for as much as one third of the foreign exports won by African and Latin American countries. The Minister was right to stress the importance of trade, but as long as those countries have to pay off the debt burden at the present level, the benefits of trade are swallowed up and many of them will never be able to repay those debts. That is a tragedy.

One of the comments made by my hon. Friends was challenged by Conservative Members. The Government were right in 1991 to switch aid so that 81 per cent. of United Kingdom bilateral aid went to the poorest 50 countries, after a great deal of pressure from many agencies and others. Yet focusing on poor countries does not go hand in hand with targeting the poorest communities.

The United Nations Children's Fund has pointed out that just 9.1 per cent. of bilateral aid was spent on basic needs in 1989. I welcome the shift to the poorest countries, but I believe that we must have a means of monitoring where the aid goes and its effectiveness if we are to reach the world's poorest people. Sadly, we are not reaching them.

We all agree that trade is vital, but I do not think that we can say that, because we have cut aid, we can now go to trade as an alternative. Debt, trade and aid all hang together. Trade produces six times more income for poor countries than aid does. We all want to reach a position where aid is not necessary because trade is doing the trick for developing countries.

Sadly, since the early 1970s, the prices paid for developing countries' primary exports have declined by more than 20 per cent., which is a tremendous decline. Over the past two decades, the share of trade of sub-Saharan Africa, about which we are all concerned, has shrunk by almost three quarters to a mere 1 per cent. of world trade. That compares to 19.3 per cent. for developing countries as a whole. Yes, we want to see trade, but we want it to be in a context beneficial to the countries involved.

The tariff cuts agreed at the G7 summit last week are unlikely, as has been said, to provide many benefits for developing countries. As my hon. Friend the Member for Glasgow, Central (Mr. Watson) said, it is disappointing that the failure to include tariffs on agricultural products may postpone agreement at the GATT talks on such areas, which are vital for the development of many countries.

We all agree that trade is important, and the recent Uruguay round will bring some benefits for developing countries. In agriculture, some protectionism and some subsidies will fall, but the poorest countries are likely to be worse off. They will be unable to take advantage of new market opportunities, yet they will have to open up to foreign competition. They will see the relative value of their current trade preferences being undermined.

Developing service sectors in the third world could be wiped out, and new rules on property will make technology transfer and economic development more difficult. In other words, the poorest countries will be unable to benefit from the good results of many of the recent talks.

GATT will have a very limited impact on the common agricultural policy, which has been mentioned in the House again, and again because it discriminates against third-world products. The dumping of European subsidised agricultural products pulls down world prices, creates instability and wipes out markets for poor farmers. It creates dependence on food imports and develops tastes for goods that people can ill afford. The Trinidad terms were welcome, but what took place at the summit recently did very little for the world's poorest people.

The short and longer-term outlooks for Africa are very bleak. The proportion of debt has increased from the equivalent of 28 per cent. in 1982 to 108 per cent. in 1992. In effect, Britain's bilateral aid and development resources are being diverted back to donor countries through the International Monetary Fund and the World bank in the form of debt repayments. Africa's attempts to extricate itself from that burden are having terrible consequences for the world economy, and are bankrupting low-income families.

Most of Africa faces a debt service to export ratio of more than 30 per cent., and for some it is more than 100 per cent. Debt servicing is leading to investment starvation, the flight of foreign capital, mounting trade deficits and mass unemployment, and is undermining Africa's ability to repay. The continent avoids defaulting on its debt obligations only by continually rescheduling them, which often undermines the very things and services for which the debt was incurred in the first place. That is the tragedy.

The Minister referred to population. Of course population control is important. I support it because it liberalises women, who should have the right to liberalise themselves from one pregnancy after another from the time they are 15 until they are 50. But do not let us kid ourselves that population is the cause of poverty in the third world. When we have our dinner tonight, we shall eat more in one meal than many a village in parts of Africa will have in a week. We should not allow it to be said that the third world is consuming too much of the world's resources. It is not true.

Although population is important from other points of view, I remind all hon. Members that children represent some security for the future. Although population control and family planning can be introduced and should be made available, it will be difficult to persuade people to reduce their families until they are sure that their children will survive and grow up and that they will have some security, and until one deals with the economic problems in developing countries. We consume more in the Tea Room every day than a family in a developing country does in a week, and we should never forget that. The world's resources are very unfairly distributed.

I wonder whether HIV and AIDS in developing countries have been discussed in any depth, but I do not believe that it was appropriate for them to be discussed at the summit, and therefore make no complaint. What is taking place, in Africa particularly, is heart-breaking and worrying, not only because of the AIDS epidemic among adults, but because thousands of children are being born, and will be born, with the HIV virus. They will be orphaned, and what is to become of them?

The Government underestimate the effect of AIDS in this country, and have cut the grant to some charities—but that is another story. At some time, however, the developing nations must consider what is happening to AIDS in developing and third-world countries and take it seriously. I am pleased that some organisations, backed by the Rockefeller Foundation, have co-operated to develop a programme, working with non-governmental organisa-tions in those countries to give them the benefit of the information that we and others have on HIV in order to tackle that grave and frightening problem.

Anyone who has seen a country in that situation knows that any discussion about third-world development, especially in relation to Africa, cannot go on without taking into consideration what is happening in this respect.

Finally, I was glad to get some information today to show that my friends in the Baby Milk Action Campaign disrupted the annual general meeting of Nestle to point out its disgraceful campaign to persuade mothers in developing countries not to breast-feed their children, but to feed them Nestle products. We used to call it "Nessels" when I was a child, but I believe that it is "Nessleys" these days.

Yes, there has been some progress through the World Health Organisation to stop the advertising. We were all sickened to see healthy, beautiful black women with babies sucking a bottle when those babies should be breast-fed because it is better for babies anyway. I am delighted that my friends disrupted the meeting and tried to get Nestle—it is not the only company, but it is the main one—to explain why it continues to provide and promote its milk products in developing countries. It is an absolute scandal that that should take place.

How can UNICEF and all the organisations that are doing so much to immunise and protect children against disease possibly work against that background? They are trying to persuade mothers to breast-feed because of the protection it gives, yet as a result of advertising, babies are dying. It is estimated that hundreds of babies are dying because they are not being breast-fed, but instead are being put on milk products when there is no clean water, and water and even bottles cannot be sterilised. It is a disgrace, and I hope that all hon. Members condemn it.

I congratulate my hon. Friend the Member for Oldham, West (Mr. Meacher) on raising this subject today. We cannot separate one item from another. We cannot say that it does not matter so much about aid, that yes, we have cut it, but look what we are doing on trade, and that we have done a little to reduce debt, so let us congratulate ourselves. Congratulation does not come into it. All these items hang together. Unless those of use who are fortunate enough to live in rich countries look at it in that way, one item will be set off against another. I welcome the debate, but I hope that in future we recognise that we are slipping badly in the aid stakes, and that we do something about it.

9.21 pm
Mr. Richard Page (Hertfordshire, South-West)

I start by expressing my appreciation to the Opposition for choosing this matter for debate this evening. The subject cannot arise too often. I regret the slight slant in the motion. It should not be forgotten that, in the late 1980s, this Government and the noble Lord Lawson, as he now is, led the way on debt repayment. This country wrote off more than £1 billion-worth of debt and raised the profile of debt write-off with the rest of the industrial world. That should not be forgotten in the House or the country.

I am aware of the time, and the fact that others wish to speak, so my contribution will be much shorter than I should have liked it to be. I welcome the wording of the Government amendment. It puts the truth of the position. It does no harm to see it put firmly on the record that the Government welcomes the agreements by the G7 countries in Tokyo to consider improved debt reduction terms for the poorest and more indebted countries, including the possibility of earlier action on reducing the stock of debt on a case by case basis in accordance with the Prime Minister's Trinidad Terms initiative. In the past, this country and others have given money on various repayment terms to countries that have mishandled it. We have wasted our money in trying to help. It has gone to people and into accounts that it should not have got near. I should like to think that today we are much more careful in giving taxpayers' money to help bridge the gap between the industrial world and third-world countries.

Far too often, industrial countries muddle the differentiation between support for home industry and overseas aid. We need a vigorous debate to differentiate between grant support for third-world countries and boosts that are necessary from time to time to help home industry engaged in exporting or in need of some inducement to expand.

My hon. Friend the Member for Hertford and Stortford (Mr. Wells) spoke most tellingly about the difference between the industrial world and the third world, and the way in which that gap is expanding. In military terms, it is almost like people with bows and arrows trying to compete with those with machine guns. It is the duty of the industrial world to try to ensure that that gap does not become an unreasonable and unacceptable difference.

We have a duty to decide when our help is to be a grant, and when it is to be a loan. We should not muddle that. We should not give loans and then decide that they should be grants. We must make that decision right at the start. We must be far more caring and differentiating about where we give that support, and in that way show an example to other countries. We have heard quotations already this evening about how some of them operate. We must lead the way in the third world countries by giving the money as a grant. We should not expect to get the money back at a later stage.

I should mention again the slight confusion that has emerged over the Commonwealth Development Corporation. It developed substantial funds over the years. It has a capital base of nearly £800 million, and can recycle its surpluses every single year. It does not require net new capital every year to sustain its programme. It should be able to sustain gross new lending of some £200 million a year.

I suggest that it is misleading to give the impression that the Government have somehow cut its support. It will provide new loans in the years to come, and while its lending will not exceed the levels of past loan repayments, it will certainly help us go on into the future.

As a moment of mild chiding, I should like to take up the point made by the hon. Member for Glasgow, Central (Mr. Watson), who made various comments about the banks. Some of those written-off debts have come back, but I suggest that many of our banks have loaned considerable sums of money on an ill-advised basis to the third world and have written off billions of pounds, which is paid for today by many British account holders and taxpayers. Should we dismiss that lightly? The banks are getting some money back, but they have had to bear tremendous pain in writing off ill-advised debts in the past.

Those who have had the forbearance to listen to me in the past on trade and industry will know that I believe that we should help our exporters and our various industrial activities. However, to come back to my original point, we should not muddle the difference between the giving of aid and our support for our exporting and internal industries. If we make that division clearer, we shall benefit the whole world.

9.27 pm
Mr. John Battle (Leeds, West)

It is appropriate that this debate on the G7 summit, on which I congratulate my hon. Friend the Member for Oldham, West (Mr. Meacher), should follow yesterday's debate. Within the past 24 hours we have debated clause 42 of the Finance Bill, which would force through VAT on fuel and thus create real poverty in Britain. What concerns me is that there are real connections to be made between the economic, social and political projects undertaken by the Government here and what is happening throughout the third world as a result of the economic and political policies pursued by the industrial nations.

I refer particularly to the pursuit of economic policies worldwide that have deliberately generated high levels of unemployment, lowered wages levels and undermined collective trade union rights. There has also been the build-up of massive public and private debt, pressure to reduce direct taxation, switches to regressive indirect taxation, drastic reductions in welfare state provision and the privatisation of essential common services.

I do not have much time in which to speak in the debate. However, I once had the privilege of meeting the Economics Minister for Benin, who was invited to go to the Paris Club meeting to renegotiate IMF terms on behalf of his country. He expressed surprise to me that at that meeting people from the western world, people from Britain, should ask why Benin did not do as Britain had done and privatise the water supply. Benin did not have a water supply, so it was a most inappropriate policy. In other words, the free market economic agenda is wrapped up by the IMF and the World bank in the language of structural adjustment, but it is the same ideological model superimposed at home and internationally.

Others have spoken about the needs of Africa and they should be high on our agenda. I shall not repeat what has been said about the needs of Africa, but we need some fresh, new, imaginative strategic thinking. I simply quote the President of Ireland, Mary Robinson, who, at her press conference at the end of her visit to Somalia last October, said: There needs to be a great deal more urgency about the situation. It is not acceptable that human beings are in the degrading, humiliating situation in which they find themselves, because we really have to stand back and say: 'it diminishes all of us as human beings'. I felt shamed by what I saw. Shamed. Shamed. On behalf of the European world, and the American world, and the developed world generally. What are we doing that we have not got greater conscience for it? She went on: Not only Somalis, but also the Horn of Africa in general, need new strategies, need new lateral thinking about our relationship with the continent of Africa. They need not just the United Nations and their international organisations and governments to be engaged, but women's groups, business associations, and others, to have a direct linkage of accepting responsibility. I reiterate that plea for lateral thinking and for an injection of imagination and urgency.

Recently, a small African country, Eritrea, became independent. There was and still is great international pressure for good governance. But weeks after that country's independence a conference on the programme for the reintegration of refugees and the rehabilitation of the resettlement areas of Eritrea was held in Geneva on 6 July under the auspices of the United Nations. Apart from support for food aid and repatriation, Eritrea received pledges of only $16 million towards the $77 million requested for development.

In other words, if the promising movement towards peace and democracy now being developed in several African countries is to be supported and sustained, the flow of aid for development must be maintained and we must not move in the opposite direction. The British Government have been one of those pushing hardest for good government and democracy and are, accordingly, under a moral obligation to back the pressure with positive development aid.

9.32 pm
Mr. Tony Worthington (Clydebank and Milngavie)

It is a particular pleasure to follow my hon. Friend the Member for Leeds, West (Mr. Battle). His reference to the words of Mary Robinson reminds us that the fact that I billion people in the world simply do not have the means to exist from day to day diminishes us all.

It is impossible to explain Somalia without remembering who armed that country. It is impossible to explain the problems of Brazil without bearing in mind the demands for tropical hardwoods. It is wrong of us to think that our actions are simply benign. It is wrong for us simply to say that, because the IMF and the World bank were set up with good intentions, they automatically have a good impact now.

During the past year, the idea that has struck me most comes from the writings of Susan George on the debt boomerang. She says that if we do not tackle these problems we may think that we are just casting off part of the world, but it will come back and hit us. It will come back and hit us on the population, the migration, the debt and the drugs fronts. If we do not turn our minds more consistently to the problems of the third world, we shall live to regret it.

What is Britain's record in this area? I want first to consider our aid record. We cannot ignore the most tangible fault, which is that there was a public commitment to 0.7 per cent. of GDP from which we ares retreating year by year. The level is now 0.31 per cent. compared with 0.1 per cent. when Labour was in power. The fact that the Government have the worst growth record of any Government since the war means that the developing world is even worse off. In fact, I suspect that there is a cunning plan by the Government to attain the 0.7 per cent. target by shrinking the economy.

The developing world is threatened even more by the presence of the needy in the east of Europe. It is clear from the Foreign Secretary's choice of budget that he prefers to increase the contribution to eastern and central Europe and to cut the contribution to the developing world during the next three years. The Foreign Secretary must defend that.

The Government's defence of their aid record is extraordinary—it is that this country's aid is good. Therefore, apparently, the Government are to cut it. I could understand the defence being that they did not want to put good money after bad. But to cut aid because this country does it well is a strange defence indeed. That is especially true as the Government now distribute a higher and higher proportion of aid in a less and less efficient way. A higher proportion goes to the World bank and the IMF.

We have heard much about the damage that is done by the debt policies of those institutions, with more going through the EC. There is widespread concern that directorate-general VIII of the EC under Mr. Marin is less than efficient—even perverse—in its distribution.

Why is more and more of our aid to be deployed in a less and less efficient way? We have heard, if not convincingly, from the Prime Minister that the most vulnerable in this country will be protected from the public expenditure cuts that are on their way. We need to know from the Minister whether the poorest people in the world will be protected, or will they suffer from the dreadful hole which the Government is in?

What else have the Government done in terms of aid and development? They have disappointed many people by their failure to take the lead in many areas. The hon. Member for Broxtowe (Mr. Lester) reminded us of that. Africa regards this country as the pre-eminent European power, and the people of Africa look to us for guidance, certainly with regard to the World bank and IMF. The British director of that organisation holds enormous power over development policies in Africa. It is in Africa, however, that the World bank and IMF policies have failed the most. My hon. Friend the Member for Oldham, West (Mr. Meacher) pointed out that more money comes out of Africa now than is put in.

The hon. Member for Broxtowe valuably pointed out, as he usually does, the amount of money that is spent on emergency relief. The reason for that is that we failed in many cases to take preventive steps early enough by diplomatic initiatives. [Interruption.] Well, I went to Somalia last year and they had plenty of water and plenty of problems. The world was deaf to Somalia for a whole year because our diplomats in Nairobi did not go to Somalia. They were forbidden to go by the Foreign Office.

If we cannot get accurate information, how can we take preventive action? The tragic situation in Somalia today, with the military intervention going wrong, has resulted from our failure to act in time. We failed to encourage the UN to take the necessary diplomatic initiatives, and we must look to the United Kingdom to take the lead in the matter.

As the Minister knows, I am also fearful about the situation in Sudan, where there is a 10-year-old civil war. I compliment the action of the Foreign Office in that case, and also the action by our ambassador in Sudan. But we should take preventive action by taking the issue to the United Nations Security Council. I am pleased that the Minister who has responsibility for foreign trade is to answer the debate, as it gives the House a chance to bring some of the issues together. He will be able to explain what the poorest of the world have gained or will gain from the G7 and GATT.

There are several major worries. Very painfully, a series of Lomé conventions—we are now up to Lomé 4—negotiated trade concessions for the poorer countries, but there are fears that GATT will wipe them out. I hope that the Minister will tell us that it is this country's objective to stop putting higher tariffs on value added goods from the third world.

Perhaps the Minister will also tell us what GATT will do about the present shameful situation whereby, through the World bank, we demand that developing countries stop subsidising their food, but we then dump subsidised EC food on them, which is what happens with beef in west Africa. The hon. Member for Hertford and Stortford (Mr. Wells) mentioned the destruction of the sugar cane industry in that way.

If we agree that trade is more important than aid, why, under the British presidency, was an EC development policy produced which did not mention the common agricultural policy or trade policy in general?

Mr. Mike Gapes (Ilford, South)

Is it not a fact that successive Ministers have, through our aid budget, committed us step by step to EC programmes which lead to long-term reductions in available resources for bilateral programmes? We are being locked in incrementally so that we may not even be able to reverse the process unless there is a drastic change in the near future.

Mr. Worthington

Indeed, and that point has already been made. The reason we are locked in is that our aid is shrinking. It would be possible to increase our contribution to other organisations if we were expanding the overall amount of aid.

It has been generally agreed that debt is a matter of the utmost importance. I, too, compliment the Prime Minister on the Trinidad terms which we agree is a valuable initiative. However, as was said by my hon. Friend the Member for Oldham, West and confirmed by the hon. Member for Broxtowe, 91 per cent. of the debt of sub-Saharan Africa is to the international financial institutions, to the World bank and the International Monetary Fund. What can we do about that, when the constitution of those bodies forbids them to cancel debt? All that they can do is to roll over the debt from year to year. We have to ask what is going to happen to the great burden of debt which is owed to the IMF and the World bank, which now take out far more than they put in.

The World bank and the IMF are in a crisis. What can we do to make their policies more transparent? Why can we not know how our director at the World bank has voted? The Americans can. Why should an unknown civil servant and the International Development Association, which we debated on Monday evening, be allowed to spend £620 million of taxpayers' money without accounting for it? Why can we not know what is being done to increase accountability in the World bank? Why can we not know how the British director is voting on issues concerning where sustainable development is being damaged by World bank projects? What safeguards are being put in place?

The Government must surely learn from the recent scandal surrounding the International Bank for Reconstruction and Development. It was an organisation which went out of control, ran amok and became self-serving. How do we know that that is not happening in the World bank or the IMF? The World bank has admitted that an increasing proportion of its projects are failing. What are we going to do to put that right?

Perhaps the Minister will tell us the World bank's philosophy, which we are supporting. It is clear that a struggle is going on in the World bank. I should like to refer to two points that have been made recently. One of them came from Larry Summers, who was previously the chief economist at the World bank—obviously a very influential person. What he said contradicted a point made by the hon. Member for Hertford and Stortford. Summers said that investment in the education of girls provides far the best possible economic return through World bank activities.

The ironic thing is that the World bank and the IMF, because of their programmes, are seen as having so substantially damaged the education and health of people in the third world. Are we supporting that, or are we supporting the structural adjustment programmes?

Which side does the Minister take on the question of the struggle within the World bank with regard to debt? Does he take the side of Mr. Edward Jaycox, the vice-president for Africa, who said that the policies of the bank have been disastrous in terms of building up the capacity of Africa to solve its own problems"? The bank, he said, had completely failed to build up Africa's trained and skilled manpower and its institutions. The amount going into the salaries of expatriate advisers, of whom there are 100,000 in sub-Saharan Africa, was $4 billion. Do the Government agree with Mr. Jaycox?

What is the World bank policy that the Minister supports? Why cannot we be told what philosophy the Government adopt when they go to the World bank? Debt is by far the most crushing problem facing sub-Saharan Africa.

Unless the Government can give us some optimism about new thinking—lateral or of whatever other type—on how the debt burden on sub-Saharan Africa might be lifted, we will have wasted our words in this Chamber today.

9.46 pm
The Minister of Trade (Mr. Richard Needham)

I do not intend to go into the debate that took place on Monday night, the report of which I read with great interest. I have a short time to wind up for the Government, but if I am unable to cover particular points that have been raised I shall write to the hon. Members concerned.

As this is an Opposition Supply day, the Government are entitled not only to defend their position but to look into some of the polices behind the Opposition's attitude to the whole question of debt, trade and development. I say to the hon. Member for Glasgow, Central (Mr. Watson) that we have taken the lead on debt relief for the poorest, most heavily indebted countries. I am glad that Opposition Members have given the Prime Minister credit and support for what he has done. We are taking a lead with our targeted aid programme and we have taken the lead on expanding world trade—a matter to which I shall come in a moment. In all these areas, our strategy is the same: to give developing countries as much of a stake as possible in the world economy. This matter was well referred to by my hon. Friend the Member for Hertford and Stortford (Mr. Wells).

I accept that the debt crisis is not over—not least for many countries in Africa. We recognise this, as did the Tokyo summit. It is clear that there will be further financial assistance to help these countries. However, the Government have a good story to tell about debt relief for the poorest, most heavily indebted countries. We have constantly led the way in promoting international agreement on debt relief—through Toronto terms in 1988, through Trinidad terms in 1991, and now in our push for improved Trinidad terms. As my hon. Friend said, the current terms have so far benefited 17 of the poorest countries, to the tune of nearly $2 billion. I am glad that, on the question of the number of countries, the hon. Member for Oldham, West (Mr. Meacher) is getting his arithmetic corrected.

Mr. Meacher

Will the Minister give way?

Mr. Needham

No. I did not put any question to the hon. Gentleman, but I should like to put one to Opposition Members generally.

We are constantly asked about the 0.7 per cent. of GNP contribution to aid. It was referred to today by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel). It is the aim of all of us to reach that contribution level, but how do we get to it? It is easy to call for more aid, as the hon. Member for Oldham, West did, but it is much less easy to balance that against calls for more spending on health, education, social services, transport and every other area of public expenditure. The hon. Member for Oldham, West and his hon. Friends must face up to that difficulty.

How does the hon. Member for Oldham, West envisage that that contribution will be made in the light of the remarks of the hon. Member for Dunfermline, East (Mr. Brown)? He has said that the Labour party is not proposing to raise income tax, national insurance, VAT or current borrowing. How does the hon. Member for Oldham, West square his call for an increased aid budget with the Leader of the Opposition? He has said that the Labour party will oppose the tax increases that are being imposed by the Government. He has also made it clear that the Opposition are not in favour of cuts in public expenditure when public services are in straitened circumstances.

Where is the hon. Member for Oldham, West going to find the extra £2 billion for his aid budget over the course of a Parliament if he intends to follow the advice given by the hon. Member for Dunfermline, East and the Leader of the Opposition? As the hon. Gentleman knows, the figures do not add up. However important we may say the aid budget is, the hon. Gentleman cannot stand at the Dispatch Box and pretend to us that his policy is credible.

The hon. Gentleman spoke about the Uruguay round and the Tokyo summit and how they had failed the developing world. He said that they were a disaster. The hon. Gentleman acknowledged, however, that ActionAid has said that trade produces six times more income for the poor countries than aid. What would the hon. Gentleman have said if the Tokyo summit had failed to reach an agreement on GATT? That would have been a true disaster.

I do not underestimate the importance of the problems of Africa and sub-Saharan Africa, but did the hon. Member for Oldham, West ever mention China? No. Indonesia was mentioned only by one of my hon. Friends. Vietnam, India, Pakistan, the Philippines—some of the poorest countries in the world, which stand to benefit most from improved trade—were never mentioned by Opposition Members.

Mr. Geoffrey Dickens (Littleborough and Saddleworth)

Does my hon. Friend agree that, on top of restructuring debt to assist the poorest nations, Great Britain is the first to respond to famine, drought and disease all over the world? Our Hercules are in the air with surplus supplies straightaway. We can be very proud of our overseas aid. We lead the world.

Mr. Needham

I agree with my hon. Friend. Wherever disasters occur, British support and British service personnel are there.

The hon. Member for Clydebank and Milngavie (Mr. Worthington) asked whether all tariffs will be abolished under the Uruguay round. He referred specifically to commodities. The hon. Gentleman knows full well, however, that not all tariffs will be abolished through negotiations under the Uruguay round. The important point is that those tariffs will be slashed and that will do a great deal to benefit the poorer countries of the world.

The hon. Gentleman also asked me about the effect of the GATT round on the developing world. The OECD study for 1992 estimated that the increase in developing countries' annual income from a successful Uruguay round could be more than $90 billion per year. The hon. Gentleman knows that that is more than the total aid budgets of the OECD countries. We do not underestimate the importance of aid, but we agree with the hon. Member for Eccles (Miss Lestor) that trade is much more important than aid.

The Opposition's policy on that will have exactly the opposite effect to what they intend because, although the hon. Member for Clydebank and Milngavie talks about the need to open markets and ensure that goods from developing countries can be freely traded in this country, a short time later some Opposition Members come to see me, leading delegations of people who want to stop goods coming here from developing countries on the basis of social dumping. I could give the hon. Gentleman a list—I shall not do so tonight—of delegations led by his hon. Friends saying that they do not want goods from China, the Philippines, or the poorer parts of north Africa because it is social dumping. The hon. Gentleman cannot have it both ways.

Mr. Worthington

Which of the countries with structural adjustment programmes still have tariff barriers? Apart from the multi-fibre arrangement—eventually—will any EC barriers come down as a consequence of the Tokyo summit?

Mr. Needham

Of course EC barriers will come down as a consequence of the GATT round. They will come down across the whole range. Once we achieve an agreement on GATT, there will be massive tariff reductions.

The hon. Gentleman asked about the multi-fibre arrangement. We agree that textiles, as a commodity, should be phased out. Naturally, that should be done over a reasonable time, but it is one way to remove barriers to developing countries' exports. We would not deny them the opportunities to compete in that sector, which is why the United Kingdom supports the phasing out of textiles as a commodity and better access to our markets.

However, that was not always the view of Opposition Members. I have articles, admittedly from 1985, entitled Labour's plan to save the textile makers and Labour aims to curtail flood of textile imports"— [Interruption.] The hon. Gentleman asked about the multi-fibre arrangement and I am saying what the Leader of the Opposition's view was on that. The Labour party will find themselves in a muddle when trying to devise a policy to help developing countries because of their economic policy at home.

The Government believe that we must assist companies to invest in the third world. British companies know better than Opposition Members about the benefits of United Kingdom investment in the developing world. Direct investment by United Kingdom companies in the developing world is very large. In 1991, our companies invested £1.4 billion in developing countries, representing some 16 per cent. of foreign direct investment. That is how to create jobs, develop the industrial base, transfer technology and enhance economic capacity.

Opposition Members still prefer to talk about handouts instead of persuading British companies to provide long-term jobs because the effect of the Opposition's economic policy at home is to increase costs and deny developing countries the opportunity to send their products here. Last Monday the hon. Member for Bolsover (Mr. Skinner) showed the true colours of his party. He said that we should reintroduce exchange controls and introduce import controls".—[Official Report, 12 July 1993; Vol. 228, c. 681.] The hon. Member for Oldham, West laughs. He may disown those views, but if Opposition Members stand for the minimum wage and the social chapter of the Maastricht treaty, and then say that they want free trade, what are the consequences for workers in this country? What does that add up to for the workers in this country? What will happen to the workers of the developing world who want to export their goods into a country where such additional add-on costs will put our people out of work? The result will be that ever-larger numbers of delegations of hon. Members will come to my office to try to ensure that the goods stop coming in.

The choice before the House is clear: do we offer developing countries investment, training, technology, jobs and an opportunity to buy and sell in the markets of the world—as the Government believe—or do we follow the Opposition path of minimum wages, minimum hours and maximum trade barriers, which will be the inevitable consequences of their policy?

I urge my hon. Friends to reject the Opposition's contradictory position, reject protectionism, and reject an approach which encourages continued dependency for developing countries. I urge the House to support our policy of enabling developing countries to support themselves through the tools of overseas investment and free trade.

Mr. Don Dixon (Jarrow)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 256, Noes 314.

Division No. 334] [10 pm
Abbott, Ms Diane Dunnachie, Jimmy
Adams, Mrs Irene Dunwoody, Mrs Gwyneth
Ainger, Nick Eagle, Ms Angela
Ainsworth, Robert (Cov'try NE) Eastham, Ken
Allen, Graham Enright, Derek
Anderson, Donald (Swansea E) Etherington, Bill
Anderson, Ms Janet (Ros'dale) Evans, John (St Helens N)
Ashton, Joe Fatchett, Derek
Banks, Tony (Newham NW) Faulds, Andrew
Barnes, Harry Field, Frank (Birkenhead)
Barron, Kevin Fisher, Mark
Battle, John Flynn, Paul
Bayley, Hugh Foster, Rt Hon Derek
Beckett, Rt Hon Margaret Foulkes, George
Beith, Rt Hon A. J. Fraser, John
Bell, Stuart Fyfe, Maria
Benn, Rt Hon Tony Gapes, Mike
Benton, Joe Garrett, John
Bermingham, Gerald George, Bruce
Berry, Dr. Roger Gerrard, Neil
Betts, Clive Gilbert, Rt Hon Dr John
Blair, Tony Godman, Dr Norman A.
Blunkett, David Godsiff, Roger
Boateng, Paul Golding, Mrs Llin
Boyce, Jimmy Gordon, Mildred
Boyes, Roland Gould, Bryan
Bradley, Keith Graham, Thomas
Bray, Dr Jeremy Grant, Bernie (Tottenham)
Brown, Gordon (Dunfermline E) Griffiths, Nigel (Edinburgh S)
Brown, N. (N'c'tle upon Tyne E) Griffiths, Win (Bridgend)
Burden, Richard Gunnell, John
Byers, Stephen Hain, Peter
Caborn, Richard Hall, Mike
Callaghan, Jim Hanson, David
Campbell, Mrs Anne (C'bridge) Hardy, Peter
Campbell, Menzies (Fife NE) Harman, Ms Harriet
Campbell, Ronnie (Blyth V) Harvey, Nick
Campbell-Savours, D. N. Hattersley, Rt Hon Roy
Canavan, Dennis Henderson, Doug
Cann, Jamie Heppell, John
Chisholm, Malcolm Hill, Keith (Streatham)
Clapham, Michael Hinchliffe, David
Clark, Dr David (South Shields) Hoey, Kate
Clarke, Eric (Midlothian) Hogg, Norman (Cumbernauld)
Clarke, Tom (Monklands W) Home Robertson, John
Clwyd, Mrs Ann Hood, Jimmy
Coffey, Ann Hoon, Geoffrey
Cohen, Harry Howarth, George (Knowsley N)
Connarty, Michael Howells, Dr. Kim (Pontypridd)
Cook, Frank (Stockton N) Hoyle, Doug
Corbett, Robin Hughes, Kevin (Doncaster N)
Corbyn, Jeremy Hughes, Robert (Aberdeen N)
Corston, Ms Jean Hughes, Roy (Newport E)
Cousins, Jim Hughes, Simon (Southwark)
Cox, Tom Hutton, John
Cryer, Bob Illsley, Eric
Cummings, John Ingram, Adam
Cunliffe, Lawrence Jackson, Glenda (H'stead)
Cunningham, Jim (Covy SE) Jackson, Helen (Shef'ld, H)
Dafis, Cynog Jamieson, David
Darling, Alistair Janner, Greville
Davidson, Ian Jones, Barry (Alyn and D'side)
Davies, Bryan (Oldham C'tral) Jones, Ieuan Wyn (Ynys Môn)
Davies, Rt Hon Denzil (Llanelli) Jones, Jon Owen (Cardiff C)
Davies, Ron (Caerphilly) Jones, Lynne (B'ham S O)
Davis, Terry (B'ham, H'dge H'I) Jones, Martyn (Clwyd, SW)
Dewar, Donald Jones, Nigel (Cheltenham)
Dixon, Don Keen, Alan
Dobson, Frank Kennedy, Jane (Lpool Brdgn)
Donohoe, Brian H. Khabra, Piara S.
Dowd, Jim Kilfoyle, Peter
Kirkwood, Archy Prescott, John
Leighton, Ron Primarolo, Dawn
Lestor, Joan (Eccles) Quin, Ms Joyce
Lewis, Terry Radice, Giles
Litherland, Robert Randall, Stuart
Livingstone, Ken Raynsford, Nick
Lloyd, Tony (Stretford) Redmond, Martin
Llwyd, Elfyn Reid, Dr John
Loyden, Eddie Rendel, David
Lynne, Ms Liz Richardson, Jo
McAllion, John Robertson, George (Hamilton)
McAvoy, Thomas Robinson, Geoffrey (Co'try NW)
Macdonald, Calum Roche, Mrs. Barbara
McKelvey, William Rogers, Allan
Mackinlay, Andrew Rooker, Jeff
McLeish, Henry Rooney, Terry
McMaster, Gordon Ross, Ernie (Dundee W)
McNamara, Kevin Rowlands, Ted
McWilliam, John Ruddock, Joan
Madden, Max Sedgemore, Brian
Mahon, Alice Sheerman, Barry
Mandelson, Peter Sheldon, Rt Hon Robert
Marek, Dr John Shore, Rt Hon Peter
Marshall, David (Shettleston) Short, Clare
Marshall, Jim (Leicester, S) Simpson, Alan
Martin, Michael J. (Springburn) Skinner, Dennis
Martlew, Eric Smith, Andrew (Oxford E)
Maxton, John Smith, C. (Isl'ton S & F'sbury)
Meacher, Michael Snape, Peter
Meale, Alan Soley, Clive
Michie, Bill (Sheffield Heeley) Spearing, Nigel
Milburn, Alan Steel, Rt Hon Sir David
Miller, Andrew Steinberg, Gerry
Mitchell, Austin (Gt Grimsby) Stott, Roger
Moonie, Dr Lewis Strang, Dr. Gavin
Morgan, Rhodri Straw, Jack
Morley, Elliot Taylor, Mrs Ann (Dewsbury)
Morris, Rt Hon A. (Wy'nshawe) Tipping, Paddy
Morris, Estelle (B'ham Yardley) Vaz, Keith
Morris, Rt Hon J. (Aberavon) Walker, Rt Hon Sir Harold
Mowlam, Marjorie Walley, Joan
Mudie, George Wardell, Gareth (Gower)
Mullin, Chris Wareing, Robert N
Murphy, Paul Watson, Mike
Oakes, Rt Hon Gordon Wicks, Malcolm
O'Brien, Michael (N W'kshire) Wigley, Dafydd
O'Brien, William (Normanton) Williams, Rt Hon Alan (Sw'n W)
O'Hara, Edward Williams, Alan W (Carmarthen)
Olner, William Wilson, Brian
O'Neill, Martin Winnick, David
Orme, Rt Hon Stanley Wise, Audrey
Paisley, Rev Ian Worthington, Tony
Patchett, Terry Wray, Jimmy
Pendry, Tom Wright, Dr Tony
Pickthall, Colin Young, David (Bolton SE)
Pike, Peter L.
Pope, Greg Tellers for the Ayes:
Powell, Ray (Ogmore) Mr. Jack Thompson and
Prentice, Ms Bridget (Lew'm E) Mr. John Spellar.
Prentice, Gordon (Pendle)
Ainsworth, Peter (East Surrey) Bates, Michael
Aitken, Jonathan Batiste, Spencer
Alexander, Richard Beggs, Roy
Alison, Rt Hon Michael (Selby) Bellingham, Henry
Allason, Rupert (Torbay) Bendall, Vivian
Amess, David Beresford, Sir Paul
Arnold, Jacques (Gravesham) Biffen, Rt Hon John
Arnold, Sir Thomas (Hazel Grv) Blackburn, Dr John G.
Ashby, David Body, Sir Richard
Aspinwall, Jack Bonsor, Sir Nicholas
Atkins, Robert Booth, Hartley
Atkinson, David (Bour'mouth E) Boswell, Tim
Atkinson, Peter (Hexham) Bottomley, Peter (Eltham)
Baker, Rt Hon K. (Mole Valley) Bottomley, Rt Hon Virginia
Baker, Nicholas (Dorset North) Bowden, Andrew
Baldry, Tony Bowis, John
Banks, Matthew (Southport) Boyson, Rt Hon Sir Rhodes
Banks, Robert (Harrogate) Brandreth, Gyles
Brazier, Julian Gorst, John
Brooke, Rt Hon Peter Grant, Sir Anthony (Cambs SW)
Brown, M. (Brigg & Cl'thorpes) Greenway, Harry (Ealing N)
Browning, Mrs. Angela Greenway, John (Ryedale)
Bruce, Ian (S Dorset) Griffiths, Peter (Portsmouth, N)
Budgen, Nicholas Grylls, Sir Michael
Burns, Simon Gummer, Rt Hon John Selwyn
Burt, Alistair Hague, William
Butcher, John Hamilton, Rt Hon Archie (Epsom)
Butler, Peter Hamilton, Neil (Tatton)
Carlisle, John (Luton North) Hampson, Dr Keith
Carlisle, Kenneth (Lincoln) Hanley, Jeremy
Carrington, Matthew Hannam, Sir John
Carttiss, Michael Hargreaves, Andrew
Cash, William Harris, David
Channon, Rt Hon Paul Haselhurst, Alan
Chapman, Sydney Hawkins, Nick
Churchill, Mr Hawksley, Warren
Clappison, James Hayes, Jerry
Clark, Dr Michael (Rochford) Heald, Oliver
Clarke, Rt Hon Kenneth (Ruclif) Heathcoat-Amory, David
Clifton-Brown, Geoffrey Hendry, Charles
Coe, Sebastian Higgins, Rt Hon Sir Terence L.
Colvin, Michael Hill, James (Southampton Test)
Congdon, David Hogg, Rt Hon Douglas (G'tham)
Conway, Derek Horam, John
Coombs, Anthony (Wyre For'st) Hordern, Rt Hon Sir Peter
Coombs, Simon (Swindon) Howard, Rt Hon Michael
Cope, Rt Hon Sir John Howarth, Alan (Strat'rd-on-A)
Cormack, Patrick Howell, Rt Hon David (G'dford)
Couchman, James Howell, Sir Ralph (N Norfolk)
Cran, James Hughes Robert G. (Harrow W)
Currie, Mrs Edwina (S D'by'ire) Hunt, Rt Hon David (Wirral W)
Curry, David (Skipton & Ripon) Hunt, Sir John (Ravensbourne)
Davies, Quentin (Stamford) Hunter, Andrew
Davis, David (Boothferry) Hurd, Rt Hon Douglas
Day, Stephen Jack, Michael
Deva, Nirj Joseph Jackson, Robert (Wantage)
Devlin, Tim Jenkin, Bernard
Dickens, Geoffrey Jessel, Toby
Dicks, Terry Johnson Smith, Sir Geoffrey
Dorrell, Stephen Jones, Gwilym (Cardiff N)
Douglas-Hamilton, Lord James Jones, Robert B. (W Hertfdshr)
Dover, Den Jopling, Rt Hon Michael
Duncan, Alan Key, Robert
Duncan Smith, Iain King, Rt Hon Tom
Dunn, Bob Kirkhope, Timothy
Durant, Sir Anthony Knapman, Roger
Dykes, Hugh Knight, Mrs Angela (Erewash)
Eggar, Tim Knight, Greg (Derby N)
Elletson, Harold Knight, Dame Jill (Bir'm E'st'n)
Emery, Rt Hon Sir Peter Knox, Sir David
Evans, David (Welwyn Hatfield) Kynoch, George (Kincardine)
Evans, Jonathan (Brecon) Lait, Mrs Jacqui
Evans, Nigel (Ribble Valley) Lang, Rt Hon Ian
Evans, Roger (Monmouth) Lawrence, Sir Ivan
Evennett, David Legg, Barry
Faber, David Leigh, Edward
Fabricant, Michael Lennox-Boyd, Mark
Fenner, Dame Peggy Lester, Jim (Broxtowe)
Field, Barry (Isle of Wight) Lidington, David
Fishburn, Dudley Lilley, Rt Hon Peter
Forman, Nigel Lloyd, Peter (Fareham)
Forsyth, Michael (Stirling) Lord, Michael
Forth, Eric Luff, Peter
Fowler, Rt Hon Sir Norman Lyell, Rt Hon Sir Nicholas
Fox, Dr Liam (Woodspring) MacGregor, Rt Hon John
Fox, Sir Marcus (Shipley) MacKay, Andrew
Freeman, Rt Hon Roger Maclean, David
French, Douglas McLoughlin, Patrick
Fry, Peter McNair-Wilson, Sir Patrick
Gale, Roger Madel, David
Gallie, Phil Maitland, Lady Olga
Gardiner, Sir George Malone, Gerald
Garnier, Edward Mans, Keith
Gill, Christopher Marland, Paul
Gillan, Cheryl Marlow, Tony
Goodlad, Rt Hon Alastair Marshall, John (Hendon S)
Goodson-Wickes, Dr Charles Marshall, Sir Michael (Arundel)
Gorman, Mrs Teresa Martin, David (Portsmouth S)
Mates, Michael Spencer, Sir Derek
Mawhinney, Dr Brian Spicer, Sir James (W Dorset)
Mayhew, Rt Hon Sir Patrick Spicer, Michael (S Worcs)
Mellor, Rt Hon David Spink, Dr Robert
Merchant, Piers Spring, Richard
Milligan, Stephen Sproat, Iain
Mills, Iain Squire, Robin (Hornchurch)
Mitchell, Andrew (Gedling) Stanley, Rt Hon Sir John
Mitchell, Sir David (Hants NW) Steen, Anthony
Moate, Sir Roger Stephen, Michael
Monro, Sir Hector Stern, Michael
Montgomery, Sir Fergus Stewart, Allan
Moss, Malcolm Streeter, Gary
Needham, Richard Sumberg, David
Neubert, Sir Michael Sweeney, Walter
Newton, Rt Hon Tony Sykes, John
Nicholls, Patrick Tapsell, Sir Peter
Nicholson, David (Taunton) Taylor, Ian (Esher)
Nicholson, Emma (Devon West) Taylor, John M. (Solihull)
Norris, Steve Taylor, Sir Teddy (Southend, E)
Onslow, Rt Hon Sir Cranley Temple-Morris, Peter
Oppenheim, Phillip Thomason, Roy
Ottaway, Richard Thompson, Sir Donald (C'er V)
Page, Richard Thompson, Patrick (Norwich N)
Paice, James Thornton, Sir Malcolm
Patnick, Irvine Thurnham, Peter
Pattie, Rt Hon Sir Geoffrey Townend, John (Bridlington)
Pawsey, James Townsend, Cyril D. (Bexl'yh'th)
Peacock, Mrs Elizabeth Tracey, Richard
Pickles, Eric Tredinnick, David
Porter, Barry (Wirral S) Trend, Michael
Porter, David (Waveney) Trotter, Neville
Portillo, Rt Hon Michael Twinn, Dr Ian
Powell, William (Corby) Vaughan, Sir Gerard
Rathbone, Tim Viggers, Peter
Redwood, Rt Hon John Waldegrave, Rt Hon William
Renton, Rt Hon Tim Walden, George
Richards, Rod Waller, Gary
Riddick, Graham Ward, John
Rifkind, Rt Hon. Malcolm Wardle, Charles (Bexhill)
Robathan, Andrew Waterson, Nigel
Roberts, Rt Hon Sir Wyn Watts, John
Robertson, Raymond (Ab'd'n S) Wells, Bowen
Robinson, Mark (Somerton) Wheeler, Rt Hon Sir John
Roe, Mrs Marion (Broxbourne) Whitney, Ray
Rowe, Andrew (Mid Kent) Whittingdale, John
Rumbold, Rt Hon Dame Angela Widdecombe, Ann
Ryder, Rt Hon Richard Wiggin, Sir Jerry
Sackville, Tom Wilkinson, John
Sainsbury, Rt Hon Tim Willetts, David
Scott, Rt Hon Nicholas Wilshire, David
Shaw, David (Dover) Winterton, Mrs Ann (Congleton)
Shaw, Sir Giles (Pudsey) Winterton, Nicholas (Macc'f'ld)
Shephard, Rt Hon Gillian Wolfson, Mark
Shepherd, Colin (Hereford) Wood, Timothy
Shepherd, Richard (Aldridge) Yeo, Tim
Shersby, Michael Young, Rt Hon Sir George
Sims, Roger
Skeet, Sir Trevor Tellers for the Noes:
Smith, Sir Dudley (Warwick) Mr. David Lightbown and Mr. James Arbuthnot
Smith, Tim (Beaconsfield)
Speed, Sir Keith

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments) and agreed to.

MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House, noting the problems of indebtedness and restricted trade access in hampering thegrowth ofdeveloping countries, welcomes the agreements by the G7 countries in Tokyo to consider improved debt reduction terms for the poorest and most indebted countries, including the possibility of earlier action on reducing the stock of debt on a case by case basis in accordance with the Prime Minister's Trinidad Terms initiative, to make all efforts to enhance development assistance, and to seek to achieve a successful Uruguay Round before the end of the year.