HC Deb 25 May 1993 vol 225 cc751-2
Q5. Mr. Luff

To ask the Prime Minister if he will make a statement on the Government's policy on the relative importance of trade and aid in assisting the economic development of the poorest nations.

Mr. Newton

I have been asked to reply.

Worldwide trade liberalisation and measures to encourage the private sector are critical for developing countries, but many countries, particularly the poorest and most vulnerable, will continue to need concessional finance for the foreseeable future. Further debt reduction along the lines of the proposals that my right hon. Friend the Prime Minister made in Trinidad in 1990 will also be required for the poorest, most heavily indebted countries.

Mr. Luff

I thank my right hon. Friend warmly for what he has just said. Does he agree that the major objective of our aid policy should be to encourage the promotion of private sector enterprises in the developing world? In that context, will he pay tribute to the work of the Commonwealth Development Corporation? Does he further agree that we have a fine record as a Government for fighting for free trade, which brings advantages to the developed and the developing world? Can he give an assurance that that fine record will be enhanced at the G7 summit in Tokyo in July this year?

Mr. Newton

Certainly I acknowledge, as I think the whole House would, the leading role that my right hon. Friend and other colleagues have played in advancing the cause of free trade and the successful outcome to the GATT round. My hon. Friend is also right about the part played by the Commonwealth Development Corporation which is the main instrument in our aid programme for the direct promotion of private investment in developing countries. As it happens, United Kingdom direct private investment in developing countries was estimated to be some £3 billion in 1991. That is half the overall total for the whole European Community. It is a record of which we can be proud.

Mr. Worthington

If the Minister is in favour of free trade, when will we abandon the practice of demanding that developing countries drop their import tariffs and when will we stop dumping subsidised CAP food on them?

Mr. Newton

The hon. Gentleman will be aware that the Government have always taken the view that trade is as important as aid in advancing the circumstances of developing countries. I think he will agree that we have a better record than many in promoting those objectives.