HL Deb 02 July 2001 vol 626 cc699-749

7.8 p.m.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Amos)

My Lords, I beg to move that this Bill be now read a second time. In the debate on the gracious Speech last week, a number of noble Lords spoke about the importance of the development agenda. This Government have a proud record on development. Since 1997, spending has increased from just under £2.1 billion to £2.9 billion last year and is expected to rise to £3.6 billion in 2003–04. We are now the fourth largest aid donor and we have refocused the whole of our development effort on the reduction of extreme poverty and achievement of the international development targets.

My right honourable friend the Secretary of State for International Development has worked tirelessly with our international partners to move development up the global agenda and, with my right honourable friend the Chancellor of the Exchequer, has been at the forefront of the changes to the heavily indebted poor countries initiative, which has delivered fast and deeper debt relief. We have argued the case for changes to multilateral institutions such as the UN and the EU, and, most recently, my right honourable friend the Prime Minister has restated his personal commitment to development issues, particularly in Africa.

As we debate the Bill today, more than 1 billion people live in abject poverty, without adequate food, water, healthcare or education for their children. This Government believe that we have a moral duty and a direct interest in doing all that we can to reduce and eventually eliminate such poverty. That is why we are re-introducing the International Development Bill.

The 1997 White Paper on international development, Eliminating World Poverty—A Challenge for the 21st Century, set out the strategies and policies which the Government, alongside the international development community, needed to pursue to meet the challenge of world poverty. The 2000 White Paper, Eliminating World Poverty: Making Globalisation Work for the Poor, reaffirmed this focus and considered the challenges and opportunities presented by globalisation. The International Development Bill will establish this poverty elimination focus in law. The reduction of poverty will become the central aim of the United Kingdom's international development assistance.

The genesis of the Bill can be traced back to the 1997 White Paper. This committed the Government to consider the need for a new Act that would reflect the Government's intention to re-focus their international development assistance on the elimination of poverty. The issue was debated in the series of development policy forums which DfID ran between 1998 and 2000. The consensus among the country's development community was that we should have a new Act to better reflect and support the Government's commitment to poverty elimination and the international development targets.

This Bill was introduced into Parliament in the other place in the previous Session. All parties supported the principle behind the Bill, if not all the detail of it. It completed its passage there without amendment and was introduced into this House on 23rd April. My right honourable friend the Secretary of State for International Development and I met with interested Peers to discuss the content and implications of the Bill at that time. Unfortunately, the Bill fell on the prorogation of Parliament. The Bill introduced now is identical to the one which fell then.

During the course of the Bill's first passage through Parliament, DfID officials met with representatives of the major UK development NGOs to brief them on the main issues in the Bill. I believe that there is strong support from NGOs for the Bill.

This is a short, straightforward but important Bill. Its purpose, as I say, is to establish the reduction of poverty as the central aim of the United Kingdom's international development effort. The Secretary of State will be able to provide assistance only if she or he is satisfied that such assistance is likely to contribute to the reduction of poverty through furthering sustainable development or improving the welfare of the people. This clear "poverty test" is set down in Clause 1 of the Bill.

There are two exceptions to this test. The first relates to assistance given to the Overseas Territories. The Government recognise the special relationship that the UK has with the Overseas Territories and our continuing obligations to them. These obligations go beyond our moral duty to tackle poverty in other countries. Even though none of the Overseas Territories is among the poorest countries in the world, the Bill will ensure that DfID is able to continue to work with them. It does this by allowing that assistance to the Overseas Territories is not subject to the poverty test set down in Clause 1. Assistance to the Overseas Territories need not be likely to contribute to a reduction in poverty. It must, however, be provided for the purposes of furthering sustainable development or improving the welfare of their populations. This formulation will allow the Secretary of State to continue to provide all kinds of support, including, for example, direct budgetary support and support for the construction of infrastructure to the Overseas Territories.

The second exception relates to assistance provided in response to man-made or natural disasters or emergencies. It is vital that the Secretary of State's ability to react flexibly and speedily in the first vital hours and days after disaster strikes is not constrained by any concern over whether the assistance which is needed is likely to contribute to a reduction of poverty, or to be "development assistance" as defined by the Bill. These requirements are therefore set aside. I know that all noble Lords recognise the importance of speed of response when there is a humanitarian crisis. It is something that we have discussed in this House.

I should like to draw your Lordships' attention to one important implication of the new aim and purposes for assistance set down in the Bill. By establishing the reduction of poverty as the central aim of British development assistance, the Bill will ensure that such assistance can no longer be used to further improper commercial or political ends—the so-called "tied aid". Under the Bill, there is none of the ambiguity which allowed a previous Secretary of State to support the Pergau Dam. There is no basis for the re-establishment of the aid and trade provision, or, indeed, for any improper links between aid and trade. Indeed, the Government announced that all aid would be untied from April this year. So any Government wishing to re-establish the link between aid and trade or aid and political influence would need to return to Parliament and argue their case.

The Bill will provide new powers to achieve this new central aim of poverty reduction. Under the Bill, the Secretary of State will be able to support civil society organisations undertaking development awareness and advocacy activities. The Secretary of State will also be able to engage more effectively with the private sector by taking shareholdings in companies and using convertible instruments, options and guarantees. This will ensure that we are able to take full advantage of the massive contribution that civil society and the private sector can make to the reduction of world poverty.

The basis for the provision of most United Kingdom development assistance is the Overseas Development and Co-operation Act 1980. This Act provides that a Secretary of State can furnish assistance for the purposes of, promoting the development or maintaining the economy of a country or territory outside the United Kingdom, or the welfare of its people". These purposes are broadly cast and have not greatly constrained the Government's ability to re-focus this country's development effort on the reduction of poverty. But the Government believe that it is not enough for development legislation merely to allow the implementation of a development programme. We believe that it should reflect the Government's and the international community's shared commitment to reduce and eventually eliminate poverty, and ensure that the United Kingdom can make the most effective contribution possible to this work. The International Development Bill includes provision for the repeal in its entirety of the Overseas Development and Co-operation Act 1980.

I should at this point clarify the scope of the 1980 Act and of the new Bill, particularly in relation to European Community development programmes. The European Community is, of course, a major development partner, with some 25 per cent of DfID expenditure being channelled through its agencies and programmes. Our contributions to all bar one of the Community's programmes are determined by various European Community treaties. As treaty commitments, these contributions are covered by the European Communities Act 1972 and not by the Overseas Development and Co-operation Act 1980. So our contributions to, for example, European Community development programmes in central and eastern Europe, the Mediterranean, Asia and Latin America are, and will continue to be, covered by the European Communities Act 1972. Over the past five years, programmes covered by the 1972 Act have accounted for over 70 per cent of DfID's expenditure on the European Community. This expenditure will not be affected in any way by the Bill.

The one European Community development programme covered by the 1980 Act, and which will be covered by the Bill, is the European Development Fund. The EDF has the clearest poverty focus of all the Community's programmes. It provides development assistance for 77 African, Caribbean and Pacific countries, all but one of which are developing countries.

I should like to make one further point on the scope of the Bill. It is primarily concerned with the purposes for which assistance can be provided. It is not concerned with the detailed policies and priorities which should be implemented to achieve these purposes. It does not place any constraint on the types of activities or on the particular organisations or funds that a Secretary of State can support in order to achieve these purposes. The principle behind this approach is an important one. It is that our priorities and the nature and scale of our support should be determined in consultation with the people who are in need of our help. That is a principle that runs through our entire development effort, and one which I am sure your Lordships will endorse.

Nor does the Bill constrain the Secretary of State to support only activities and organisations that tackle poverty directly. Poverty is a complex phenomenon and the measures needed to reduce it will necessarily be varied. Some activities will impact on poverty indirectly and some will impact on poverty only over the medium or long term. The Bill will not constrain a Secretary of State's ability to support such activities. So it will, for example, allow us to continue to support security sector reform where such support is likely to prevent violent conflict and increase stability, thereby decreasing suffering and poverty. It will also allow us to continue to support reforms which increase revenue flow to a government where we are confident that a proper proportion of those additional funds will be used to reduce poverty in the country concerned. It will allow us to continue to commission research, even when we may not know at the outset exactly who will benefit from it.

I turn briefly to the clauses in the Bill. Clause 1 allows a Secretary of State to provide development assistance to countries and territories outside the United Kingdom if she or he is satisfied that such assistance is likely to contribute to a reduction in poverty. We anticipate that most assistance will be given under the powers conferred by the clause. This power can, therefore, be said to be the "core power" of the Bill.

Clause 2 sets out a modified form of the core power, to allow a Secretary of State to continue to support the economic and social progress of the United Kingdom Overseas Territories.

Clause 3 enables a Secretary of State to provide humanitarian assistance in response to disasters and other emergencies.

Clause 4 enables a Secretary of State to prepare for and facilitate the use of the powers set out in Clauses 1, 2 and 3. It also enables a Secretary of State to support organisations and funds whose mandates and constitutions may not be strictly or exclusively focused on the reduction of poverty but which nevertheless can, in particular areas or on particular issues, make a valuable contribution to the reduction of poverty. We shall, therefore, be able to continue to contribute to organisations such as UNESCO and funds such as the European Development Fund and the Global Environment Facility.

Clause 4 also enables a Secretary of State to support organisations undertaking development awareness and advocacy activities. Such activities are currently funded under the Appropriation Act.

Clause 6 lays down the financial instruments that would be available to the Secretary of State; namely, grants and loans, securities such as share holdings and convertible instruments, options and guarantees.

Clauses 9 and 10 relate to the interest of the devolved administrations in respect of international development matters. DfID has consulted closely with all the devolved administrations in the drafting of the Bill, and all have confirmed their support for it.

The Bill will confer some limited functions on Scottish Ministers, and under the Sewel convention these provisions require the consent of the Scottish Parliament. The Scottish Parliament has passed an appropriate Motion confirming that it is content for Westminster to legislate in this area.

In conclusion, the Bill demonstrates the Government's continuing commitment to reducing and eventually eliminating poverty. That was the objective set out in the 1997 and 2000 White Papers on international development. It is an objective which, I believe, commands support from all sides of the House and from the wider development community. I commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Baroness Amos.)

7.26 p.m.

Baroness Rawlings

My Lords, I thank the Minister for her clear and explicit description of the Bill. In opening, I wish to make it clear that we on this side of the House agree with the spirit of the Bill and welcome the fact that it comes before us so early in the Government's legislative programme rather than being rushed through at the end of last Session. It is now possible to have a serious debate on what should be considered a serious subject. I greatly look forward to hearing the maiden speech of the noble Lord, Lord Hannay, who has great knowledge of these matters.

As your Lordships have heard, the International Development Bill is intended to replace the 1980 Act and will provide the legal framework for development assistance. Britain has always had a strong record on aid and development. We on these Benches welcome this opportunity to discuss the framework of international development policy and will use it to outline some of our concerns.

We supported the Bill at every stage during its previous passage through the Commons and sought to improve it. We do not oppose the broad thrust of the Bill. However, there are several issues of concern which we were previously unable to raise and which we shall seek to highlight during the course of our debates.

We, too, seek a more stable world in which every person has access to basic living standards, a basic education and primary healthcare; a place where children are free from involvement in violent conflict. In every country in the developed world responsibility to the developing world is becoming more and more politically mainstream. That is in part a result of the impact of our globalised and interdependent world and in part because more and more people are taking an interest in this vital subject.

We share a common objective with the Government; namely, to seek to alleviate world poverty in any way possible. But we must not forget that charity deals with the symptoms instead of dealing with the causes. I agree with the Secretary of State that international development is becoming a centre-stage concern, and that the system may sometimes lag behind the new realities. It is good to see so many names on the list of speakers for this debate.

British aid and development enjoy a high reputation all over the world. British aid charities often lead the way and the newly branded Department for International Development has built on the impressive achievements of the previous administration. I should like to pay a genuine tribute to my noble friend Lady Chalker of Wallasey for all the work that she has done in this area over the years. Labour Members sometimes give the impression that history began on 1st May 1997 and that they invented overseas aid on that date. Britain has always had a strong record on aid and development—unlike the impression given in the words of Sydney Smith: Man is certainly a benevolent animal. A never sees B in distress without thinking C ought to relieve him directly". For many years under the previous Conservative government, and under this Government, Britain has also led the world in debt relief. Part of our historic and strategic role in the world is to play our full part in relieving global poverty and working for global stability. Under Clause 1 of the International Development Bill, the Secretary of State can provide development assistance, if he [or she] is satisfied that the provision of the assistance is likely to contribute to a reduction in poverty". However, the Bill contains no definition of "poverty". It seeks to limit the capacity of the Secretary of State to provide development assistance for economic or political reasons. The nature of assistance will not be altered by the Bill for UK Dependent Territories, now renamed "Overseas Territories".

For the first time, the Bill gives the Government powers to provide humanitarian relief, although a time-scale for humanitarian assistance is not given and there is no requirement for such assistance to contribute to poverty reduction. Provisions will be made for the Secretary of State to issue guarantees and to hold securities in overseas companies. The Bill says that it does not envisage these being widely used. It also gives the Secretary of State the ability to fund development education, currently carried out under the Appropriation Act.

Under the previous Parliament, however, as I mentioned earlier, Labour failed to make sufficient time for a Second Reading debate on the Bill in the House of Lords before dissolution. This meant that a number of Conservative amendments could not be debated. That it was not passed in no way affected the way that our aid is delivered. In no way were the poorest people in the world negatively affected by the failure to pass the legislation.

We were concerned by the way that the Bill was pushed through the House of Commons in less than two months, with inadequate time for debate. We shall call for charities and NGOs to be given a greater role in development. The Government have been severely criticised for ignoring charities in policy making and for being antagonistic towards them. We shall be pressing for the voice of NGOs to be heard under the new Bill. However, I welcome, again, the Government's reviewed policy regarding the financing of NGO activities that involved UK nationals in countries like Afghanistan.

We shall table amendments to make certain that encouraging "good governance" is at the very heart of UK aid programmes. Unfortunately, Labour has failed to do this. Instead it intends to increase aid to countries like China over the next five years, despite a deterioration of human rights and an increase in military spending. We do not want aid to be the sad story that I recently heard, of poor people in rich countries only giving to rich people in poor countries". Labour promised to be tough on corruption. Despite saying on 10th April 2000 in another place that legislation would follow "as soon as possible", Labour has failed to pass legislation to enforce the Organisation for Economic Co-operation and Development Convention on bribery, which makes it a criminal offence for a UK national to bribe a foreign public official.

Labour is now introducing legislation, but has failed to explain why it would not do so during the previous Parliament. Government have sat on their hands while corruption has abounded. Transparency International, a well-known and much-respected body, has said: This Government can find time to ban foxhunting, but cannot make time to crack down on international corruption". Where is the anti-bribery Bill? It is not good enough for the Secretary of State to say that she wished another department had introduced it. Where is the joined-up thinking? Ministers promised in April 2000 that it would be introduced as soon as possible, but the Queen's Speech came and went; and Bill came there none.

We support the steps that the Government have taken to reduce the debts of the poorest countries. However, Labour has failed, yet again, to deliver the faster and deeper debt relief that it promised. At the Gilbert Murray Memorial Lecture at Oxford on 11th January 2000, Gordon Brown said: By the end of 2000, our target is to have more than 25 countries receiving debt relief". However, when it came to the end of the year 2000, only 22 countries had qualified. Chad has now qualified, thus bringing the total to 23. The heavily indebted poor countries initiative (HIPC) has fallen short of expectations. The Conservative Party believes that a radical and fundamental revision of the rules governing HIPC is needed with criteria that are foward looking, not prescriptive. We shall insist on a rigorous audit and that money saved from debt repayments should be spent on healthcare and education.

Labour promised that it would react quickly and effectively to international disasters. However, over the past three years there has, yet again, been a failure to deliver "joined-up" government in the British response to humanitarian emergencies. This has led to delays and infighting between government departments. The severe flooding in Mozambique in March 2000 highlighted flaws in the British response to natural disasters, as well as those of the international community. The Select Committee inquiry into the events in Mozambique severely criticised the co-ordination between the MoD and the DfID. The committee's report of 3rd May 2000 stated that, there needs to be joined up government". Labour has failed to tackle the waste and mismanagement of the EU aid budget. With a third of all British aid money channelled through the European Union, there should be more accountability and less bureaucracy. We believe that member states should be able to deliver more aid bilaterally in a more effective way. On 10th January of this year, the European aid watchdog, the Court of Auditors, found the management of EU aid programmes to have serious "weakness" and "shortcomings". It also criticised the Commission for "cumbersome" procedures and "overly centralised" decision making. The backlog of outstanding commitments for certain programmes is equivalent to more than 8.5 years' payments.

I turn, finally, to Aid Direct. As suggested by Mr Gary Streeter in another place, Aid Direct will be dedicated to offering advice on how best the British people can help those in developing countries. It will help to match needs in the developing world with willing helpers in the United Kingdom. Aid Direct will be set up in partnership with the NGO community, with constant input from NGOs and embassies throughout the world. It will empower the British public and small aid charities to make a real difference to communities in the developing world.

Harnessing the enthusiasm of the British people will not only help developing countries, it will also raise the profile of development in the United Kingdom. We shall focus on good governance, do more to back the excellent work of British charities, and sort out European Union aid.

7.38 p.m.

Lord Redesdale

My Lords, I begin with an apology regarding a fundamental truth: toddlers, baby food and computers do not mix. Therefore, my well-prepared speech is locked in my computer and noble Lords will have to listen to my "scrawls" this evening. Perhaps I may, first, congratulate the noble Baroness, Lady Amos, on her recent promotion. This can be but to the good of the standing of the department that she represents.

It is rare for the House to have an opportunity to return to international development so quickly after the debate on the gracious Speech in which many noble Lords took part, including the noble Baroness, Lady Whitaker, and the noble Earl, Lord Sandwich. That debate took place just a few days ago and we were lucky to be included in that marathon nine-hour session, which covered so many topics. I should also like to welcome the maiden speaker in tonight's debate. I very much hope that he will join the small, but happy, band of Peers who regularly visit the subject of international development.

The history of the Bill is well known. I, for one, am extremely pleased that it should return to us as a priority and as one of the first Bills to be considered this Session. On the previous occasion the Bill fell because of the political machinations of the "wash-up" period in the last Session.

While it is tempting to score political points and to attach blame, the Bill will be all the better for having had due time for consideration in your Lordships' House. However, as the Bill has been reintroduced in the same form, will it still have to go through all its stages in the Commons once more? The Commons must be looking forward to that.

The Bill reflects the Government's priorities, as set out in the White Paper. On reading the Bill I was reminded of a meeting which took place a few years ago at the advisory council of the know-how fund. It was one of the first meetings of the know-how fund advisory board after an election. We were given a paper prepared by civil servants littered with phrases such as "poverty reduction" and "aimed at the poorest". It was so unlike many previous papers that I questioned the civil servant who had written the paper about the language. I was told that the language met the requirements of the Secretary of State. I commend that attitude of the Secretary of State. We now take such language for granted. We would question any Bill that was not focused on reducing the poverty of the poorest. Such language is now a feature of every Bill that is presented in Parliament.

The Minister said that Clause 1 is concerned with the poorest people. However, I am interested to note that it does not refer to the poorest states. Is there a distinction between the poorest countries and the poorest people? That is an important point as certain countries such as South Africa have a well developed, first world infrastructure but off the beaten track there are deprived areas without even basic amenities. In some countries certain groups have not benefited from the wealth of the country. I refer to women and minority groups. Therefore, although such countries may be in the middle income bracket, they should still be eligible for funding under the Bill. Is that possible under the terms of Clause 1?

The Bill sticks to the target of reducing poverty by 2015. During the election campaign our leader Charles Kennedy raised the issue of international development. It was also raised in a number of fora. I hope that the Government will promote that issue. As the Bill states, manmade and natural disasters are becoming more frequent. Global warming will also affect us although not, I hope, earthquakes. I hope that the Government will consider increasing funding for groups such as World Aware. I declare an interest as a vice-chairman of World Aware, as is the noble Lord, Lord Judd. I hope that the Government will not cut back funding for groups that promote development education.

An issue which is not included in the Bill and which constitutes a glaring omission is that of tied aid. Having read the relevant debate in another place I understand that the inclusion of tied aid on the face of the Bill might cause major problems as regards some of the smaller companies which seek to secure grants for small projects. However, I very much hope that the Minister will hold a meeting before the next stage of the Bill to consider tied aid. My noble friend Lady Williams is interested in that topic. Although we have a good record in this area and the Government are doing all they can to diminish tied aid, according to an OECD report in 1999 some 13 per cent of our aid was tied. However, our record in that regard is better than that of some of our European partners. I believe that Spain's aid is 100 per cent tied. However, Portugal's aid is not tied at all.

There is great anxiety that some of the consequences of the legislation might be missed if it is not thoroughly examined. I am particularly concerned about the Commonwealth Development Corporation. We had high hopes for its future and hoped that it would continue to invest in the poorest people. However, I was concerned to read in the 16th June edition of The Economist that, The CDC offices in Uganda, Malawi, Ghana and maybe Mozambique—some of the countries the department is most concerned about—are to be closed. Of the four regions that the CDC now invests in, Africa, the poorest, comes bottom of the list for any new investments". That is not the future for the CDC that the Government intended. They wanted it to continue to invest in the poorest countries to help those who do not receive investment from other sources. The article in The Economist suggests that the CDC is becoming a venture capital organisation which seeks the highest rather than the most ethical returns.

It is traditional—this always used to happen in the past—for many speakers to concentrate on the sums devoted to overseas development. The figures are interesting. Although Britain is one of the highest contributors in cash terms, we are low in the league table as regards spending as a percentage of GDP. It would be wrong not to commend the reversal of the reduction in spending on development that the Government have undertaken which we on these Benches support. However, rather than thinking of spending 0.3 per cent of GDP on development—I believe that that is our current spending—we must consider the UN target of 0.7 per cent as the ultimate goal.

The noble Baroness, Lady Rawlings, mentioned international debt. We should consider a fundamental reform of the Bretton Woods institutions. I realise that they have been considered untouchable. The very concept of the World Bank or the IMF writing off debt has always been considered unthinkable. However, it is now time to think the unthinkable given the fact that the developed nations are the directors of these institutions and given the aims and objectives of the institutions when they were established after the Second World War.

I have listed many other points. However, I shall not raise them at this hour of the night. Having focused my remarks on Africa, I end by referring to an interesting article that I read recently in an African newspaper, the title of which I cannot remember. The argument that the article proposed sticks in my mind. It suggested that the richer countries face the very real prospect of being labelled genocidal due to their almost indifference to the AIDS pandemic which is now increasingly out of control. Those countries have drugs which can halt the progression of the disease. That, linked with the effects of global warming and the fact that such a large proportion of the population will go hungry tonight, means that international development is an issue to which we shall return.

7.50 p.m.

The Earl of Sandwich

My Lords, we all look forward to the maiden speech of my noble friend Lord Hannay and I shall not detain the House for long. I welcome the noble Lord to these Benches. We look forward to his contribution to development debates as well as those on foreign affairs. I am sure he will use all his experience on that.

During the debate on the gracious Speech, I welcomed this eminently sensible Bill. I shall not repeat what I said. I am only sorry that the debate comes at the end of a rather long afternoon of what I call over-indulgent and unnecessary self-examination. For the first time we have a statutory basis for providing assistance and a clearly stated intention of reducing poverty through sustainable development. That is a cause for celebration.

My enthusiasm is a little tempered by a concern that the public is unlikely to learn about the debate or its implications. Does that matter to the Government? Knowing the Government's support for development education, I ask the Minister whether the department has made any effort to publicise what might otherwise be thought to be a parochial Westminster affair. It is important that the public are kept up to date with the UK's achievement in international development over the long term. This Bill is a landmark.

In the same context, I am delighted that development education and the promotion of global citizenship have become a priority in the Bill under Clause 4(2)(c) as well as within the DfID budget. It is a particular pleasure for me to say this as I have spoken for several years on the subject of development education. The subject is primarily concerned with awareness of development, but some noble Lords will know that racism awareness is an important aspect of development education. I think that we shall return to that subject many times.

This is also the moment for me to congratulate Mr Hilary Ben n on his appointment which refers specifically to citizenship education and liaison with non-governmental organisations. The many organisations throughout the country in schools, colleges, churches and aid agencies which carry out development education will be delighted with the appointment. Does it also signify a joined-up initiative, a formal link with the DfES? Can the Minister say what Mr Benn's precise connection will be with the Department for Education and Skills?

I suspect that the Government would like the Bill to pass without too much delay. It is tempting at Second Reading to set out a wish list of improvements to the overseas programme. I am tempted by, first, the noble Baroness. Lady Rawlings, on debt relief and the noble Lord, Lord Redesdale, on the quantity of aid, a subject to which we shall certainly return. However, I limit myself to only one suggestion and a final comment.

The Minister has heard me previously on the subject. I suggest that the term "civil society" should be introduced somewhere in Clause 4 to spell out the partnership which donor and recipient governments now enjoy alongside non-governmental organisations, community-based organisations, trade unions and many other voluntary associations, as the noble Baroness emphasised.

I know that NGOs can he irritating to governments, but that is precisely the point. In many countries the NGOs, churches and agencies work very closely with government, even enabling government to carry out their function. Perhaps more than any other sphere of government they are now, in my view, actors in the drive towards good governance. Having listened to the noble Baroness, I know that good governance should be in the Bill. It is a phrase which is hard to interpret. The Minister used a different euphemism, reform; that is another way of talking about governance. Perhaps that is one reason why it has been decided to leave it out of the objectives of the Bill.

However, governments owe an enormous debt to the growing role of civil society, and their partnership with civil society is a distinct element of policy, especially in the poorest countries. There is no reference to that partnership in the Bill. I am sure the noble Baroness will have an answer, but I give notice that I intend to put down an amendment so that the issue can be examined more fully.

While I am all for change taking place in developing countries, I hope that I have no illusions about the potential of civil society to influence government. Representation will always be a problem. There is a huge disparity between the NGOs which can afford advocacy programmes and those which are simply carrying out development—and why not? In a number of countries—Malawi is a good example—groups which are attempting to monitor poverty reduction strategies, the PRSP process, are already finding the going uphill. A new DfID report is, thankfully, monitoring the extent of civil society participation. It is another indication of the Government's very close interest in the subject.

Few governments encourage the growth of civil society organisation. Uganda is one. In the coming years many more will see the advantages of a plural society. Like sustainable development, the development of good governance and civil society is a worthy objective which the UK in particular emphasises. I hope that that justifies the simple statement which I shall propose.

Finally, the issue of tied aid, mentioned by the noble Lord, Lord Redesdale, was debated in the House of Commons recently. I support the important comment made by Mr Bowen Wells, MP, who has made a major contribution as chair of the International Development Select Committee in another place. In his concluding speech Bowen Wells said that the abolition of tied aid must not deter UK companies, with their extensive experience, from tendering for and winning contracts. I think that the noble Baroness will confirm that that will not happen, but it would be helpful to hear from her. How many other OECD countries are genuinely following suit?

7.57 p.m.

Lord Hannay of Chiswick

My Lords, I make my maiden speech in this House perhaps a little on the early side—less than a week after my introduction. But I did not wish to lose the opportunity to speak on the Second Reading of the International Development Bill, a measure with whose broad thrust I am very much in sympathy and which covers ground with which I became familiar during my time at the United Nations.

Before mentioning development issues, perhaps I may say a word of thanks to all those Members and staff of the House who have made my arrival in this new world so trouble free and agreeable, and I also thank those who have made kind remarks, in particular the noble Baroness, Lady Rawlings, whose work in the European Parliament I used to admire from afar some years ago. If I commit any solecisms it will be my fault. To the extent that I avoid them, it will be to the credit of those who are helping me along this path.

The importance of delivery is as great in development policy as in more domestic areas, where it gets discussed a good deal at present. I touch briefly on three themes: trade, the United Nations family of agencies and the European Union's development effort, and on each focus on the need for more effective delivery.

One of the most important international decisions to be taken this year will be whether or not to begin a new trade round. The decision will be taken at the World Trade Organisation's ministerial meeting at Doha this autumn. I believe that it is strongly in the interests of this country and of the European Union that the decision be a positive one. But it will only be a positive one if we can convince the developing countries that this time, unlike on previous occasions, we shall actually ensure that they benefit in deed, not just warm words, from the negotiations. Too often in the past we have promised much but in the event have delivered too little. We have been particularly ungenerous in matters such as agriculture and textiles, which are of particular interest to developing countries.

If we are to win the support of developing countries for the new trade round, we shall have to avoid overly explicit linkages with labour and environmental issues, which caused the shipwreck at Seattle and which the developing countries, not entirely wrongly, regard as covert means of retaining protection against their exports.

Secondly, I shall say a little about the United Nations and its sprawling family of development agencies, including the United Nations Development Programme, the World Health Organisation, the World Food Programme and many others. They are at the heart of development policy, but their record for delivery is not always brilliant. The United Nations Secretary-General, Kofi Annan—whose re-election last week for a further term I salute—has done much to restore the UN's battered image during his first term. He has been a firm reformer, but his power to reform the UN agencies on his own is not great. The role of the member states in those intergovernmental organisations is crucial. I hope that our Government will give him their full backing in further efforts at reform of the UN agencies and that if reform is carried out effectively, we will reward it with increased financial commitments. Too often we have cut back our commitments with the laudable aim of achieving reform but then failed to reward reform when it is achieved. Such behaviour breeds cynicism and resistance to reform even when it is urgently needed.

Thirdly, the European Union's development effort, to which other noble Lords have referred, has had a poor reputation in the past. Some of the criticism has certainly been valid. However, that programme will not wither away and it is not in our interests that it should do so because it mobilises the resources of many of the smaller European countries that have no way of supporting a bilateral programme and of some among them who have not traditionally been aid donors. That will be even more the case when the European Union is enlarged. Here, too, the challenge is for the Government to support effective reform and delivery. We need to back the efforts being made by Commissioner Patten which have already begun to improve the quality and delivery of aid to the Balkan countries.

The theme of delivery has run through all my remarks. All the Bills in the world, worthy as they are and worthy as this one is, are to little avail if we cannot achieve the effective delivery of our development policies. On delivery, let us face it, an awful lot remains to be done.

8.3 p.m.

Lord Tomlinson

My Lords, I am sure that I reflect views in all parts of your Lordships' House when I say how privileged we have been to hear the excellent maiden speech of the noble Lord, Lord Hannay, who served his country with distinction over many years as a member of the diplomatic service. I remember first meeting him about a quarter of a century ago, when I was appointed a junior Minister in the Foreign and Commonwealth Office. At that time he had already held a number of important posts, including playing a crucial role from 1970 to 1972 in the negotiations over our membership of the European Community. Over the years, he proceeded onward and upward. The list of his appointments is so extensive that reading it out would probably stretch your Lordships' patience, but after serving as the head of a number of departments in the Foreign Office, he then had possibly the most difficult task that any member of the diplomatic service has to face as our ambassador and permanent representative to the European Union, after which he went on to be our permanent representative and ambassador to the United Nations.

The noble Lord retired a few years ago, but his has been an active retirement, with his appointments by the Prime Minister as a special envoy to Turkey and by the European Union presidency as a special envoy to Cyprus. He has also served with great distinction the cause in which he and I have a common interest—that of higher education in the city of Birmingham. He brings depth and breadth of experience to the House and I am sure that I speak on behalf of all Members of the House when I say that we look forward to hearing from him on many future occasions.

Before I deal with the Bill, I shall indulge myself by addressing a brief remark to the noble Baroness, Lady Rawlings, who claimed, in her interesting speech, that the Conservatives had always had a strong record on development when in government. The empirical example of percentage of gross domestic product devoted to development co-operation, as referred to by the noble Lord, Lord Redesdale, shows that from 1979 to 1997, this country's record went consistently in one direction. From that appalling base, we now have a figure that, although going in the right direction, is still regarded as substantially too low by most of us who are concerned about development co-operation. If we had continued the trend that the Conservative Government inherited in 1979, perhaps this country would have had a fighting chance by now of attaining the United Nations target of 0.7 per cent.

I shall deal briefly with the Bill. The core power is necessarily drawn much more tightly and concisely than the current legal basis in the Overseas Development and Co-operation Act 1980. We can look forward with confidence to the fact that never again will a Secretary of State be so unsure about the scope of their power that they allow themselves to be seduced into another Pergau dam project.

The Bill has a wider range of powers, but it also has a more focused aim. Like many of those who have already spoken in the debate, I believe that we are right to support a Bill with those extra dimensions such as support for organisations supporting civil society, the process of support for development awareness and education and a more effective engagement with the private sector. I was pleased to hear the Minister spell out the detail of that through shareholdings, convertible instruments, options and guarantees. It would be interesting to have it spelled out further in Committee.

The poverty focus must be capable of wider interpretation than just direct aid to the poor. An interesting editorial in the current edition of Choices, the journal of the United Nations Development Programme, looks in some detail at the role of information and communications technology in development. I shall quote two short paragraphs from that editorial. It said: Certainly ICT cannot by itself bring an end to world poverty. ICTs are simply tools. And no single set of tools can solve a global problem with such multiple and complex causes. But while ICTs are not a magic bullet, they do provide powerful ammunition in the fight against poverty. As with all tools, the usefulness of ICTs depends upon how they are employed. And there is now a body of cost-effective, country-differentiated and empowerment-oriented solutions, which use digital opportunities to address basic development goals. New technologies offer potent support to efforts to address the divides in health care, human rights and education". I hope that my noble friend will confirm that when we talk about poverty-focused aid programmes, we are not talking simply about basic programmes; we are talking about imaginative programmes that will use state-of-the-art technology to produce the very delivery that the noble Lord, Lord Hannay, so rightly emphasised.

I turn briefly to two other small points in the Bill. The noble Lord, Lord Redesdale, worried me slightly when he expressed concern that there was no reference to tied aid. I had always understood clearly that, when the Government said that they would not allow the use of aid funds for improper political or commercial ends, that was intended to be a direct reference to tied aid. Therefore, I ask my noble friend a specific question in that area. Will she confirm that tied aid is an improper use of development funds and that any government who wish to re-establish the link between aid and trade or aid and political influence will need to return to Parliament to argue their case and obtain parliamentary approval?

I turn briefly to the question of European Community development programmes. In this regard I believe that we see one of the weaknesses of the Bill, although I understand the reason for it. We are seeing a new Bill applying itself to the European development funds. However, it is applying itself to those which are not budgetised or subject to parliamentary scrutiny in the European Parliament through the normal budgetary processes but which exclude from the process 70 per cent of DfID's expenditure. There may be vast concern about increasing proportions of that 70 per cent being directed to strategies which are not poverty focused or poverty related.

Therefore, although I understand and welcome the expressions of hope, perhaps I may say to my noble friend that, as we approach the Bill in Committee, it may be important to spell out further how we propose to translate our hopes to improve the effectiveness and poverty focus of EC development programmes into some kind of reality.

My final point in relation to the Bill concerns the question of good governance. I have a predisposition to want to see specific reference in the Bill to good governance. However, I recognise the differences of views and the cogency of some of the arguments behind the differences of views. But I want to make it clear to my noble friend that I shall listen with care to points raised on this issue during further stages of the Bill because I believe that a great deal of persuasion is still to take place if noble Lords are to believe that there should not be explicit reference to good governance in the Bill.

This is a useful Bill. It will not resolve all the problems, especially those concerning EU development aid. However, it takes clear steps forward. It places a better range of powers at the disposal of the Secretary of State, and it provides a basis for a more focused policy. I believe that the poverty focus is in; I hope that tied aid is out. On that basis, I welcome the Bill and look forward to our being able to discuss it in more detail at further stages.

8.14 p.m.

Lord Judd

My Lords, perhaps I may be permitted to add a word about the outstanding maiden speech of the noble Lord, Lord Hannay. During my own brief time as a Minister at the Foreign Office, I worked with the noble Lord and came to form a very high regard for his ability and talent. I am sure that those will be put to great use in this House.

I also want to say how good it is to see my noble friend Lady Amos in her dual role on the Front Bench. Perhaps I may be allowed to make one exhortation to her as she takes on her enlarged responsibilities. I hope that she will see her role as carrying the flag of DfID into the Foreign Office and not the other way around.

At the outset of my remarks, I declare an interest because I am deeply involved, voluntarily and professionally, in this sphere of work. Specifically, I mention my role as a member of the Oxfam Association and my trusteeship of Worldaware and the Overseas Development Institute. In my professional work, I deal with the think-tank, Saferworld.

It strikes me that this Bill is an international development assistance Bill. It deals with the authority to spend rather than with the wider policy of cohesion, which is essential to successful international development. That cohesion must be about trade, environment, migration, defence and foreign policy. It must be about multilateral institutions, the UN system, about which the noble Lord, Lord Hannay, spoke, about G7 and the OECD, as well as the World Bank, the International Finance Corporation and the IDA. And it should certainly be about the European Union, with its immense potential, whatever its still disturbing shortcomings at present.

The Bill endeavours to spell out purpose. But why is there talk of reduction of poverty? Why should there not be reference to the elimination of poverty? What, in the end, does reduction of poverty amount to? It may be difficult to eliminate world poverty, but if we have that as the objective, we have something against which to measure the progress that we are making in the reduction.

The Bill deliberately does not define "poverty". I believe that that is mistaken. Do the Government have in mind a money-metric measure, a multidimensional measure and empowerment, Professor Sen's ideas of capability and functioning, or the human development approach, as advocated by UNDP? Perhaps my noble friend the Minister will enlighten us in her reply. Similarly, there is a need for more clarification about what exactly is intended by the term "sustainable development".

However, I turn to specifics. There has been mention of untied aid. It is difficult to overstate the relief and gladness with which the Government's decision to untie aid was greeted by those of us who have repeatedly seen the folly, counterproductivity and damage caused by tied aid. It is therefore disappointing that the Government, for whatever internal Whitehall reasons of compromise, have failed to make clear in the Bill that tied aid is finished—banished, indeed. I believe that many of us fear a creeping, sinister rationalisation and the erosion of commitment away from the resolve to untie.

Then there is Clause 5(1). What is really envisaged as, assistance in any form or of any nature", apart from the financial aid, technical assistance and supply of materials to which the clause refers? The clause raises potentially significant issues, but frankly it is rather vague.

In Clause 6(3) is a reference to buying shares. What exactly is all that about? Is it simply another obligatory genuflection to the market which seems to have become required of all legislation in our ideological age, or does it have a thought-through purpose? I look forward to the Minister telling us more. How does the clause relate to the Commonwealth Development Corporation and the International Finance Corporation?

In Clause 9(1) why is there no mention of poverty? I recognise the nature of the statutory bodies identified in the schedule, but should not their role explicitly be part of the general purpose, as spelt out in Clause 1(1)?

I turn now to the subject of humanitarian aid. We all know of the pressures that can be brought to bear to use the allocation of humanitarian aid to promote particular foreign policy objectives. But two questions arise. Is that ethical or, indeed, is it effective? In 1999, in the follow-up to what was called its Principles for a New Humanitarianism, DfID made an explicit link between humanitarian aid and conflict management objectives. Its policy statement said: It is essential that the humanitarian response takes into account the wider context. In some circumstances intervention may not help resolve the problem or may even prolong conflict. When considering its humanitarian response, DfID's policy is to look at the conditions that have brought about the conflict and assess what can be done to reduce violence and bring lasting peace". That proved to be controversial. Some NGOs were unhappy about its implications. They even saw such a policy as potentially jeopardising their work. In contrast, in February last year, at the time of the reorganisation of the conflict and humanitarian aid department, the Secretary of State was unequivocal. She said: Whilst humanitarian aid must always take account of the political context in which it is given it should never be used as a lever in an attempt to achieve political aims or manage a conflict". Nevertheless, not all of the anxieties of those concerned in the UK and abroad have been dispelled. In 1986, the International Court of Justice gave its judgment in a case involving military and paramilitary activities in Nicaragua. It argued that if humanitarian assistance is to escape condemnation as involving political—I stress that—intervention in the internal affairs of a country, its objective and methodology must conform to the standards that are laid down by the Red Cross. Two central imperatives have to be observed: impartiality and humanity. The principle of impartiality is defined by the ICRC as making, no discrimination as to nationality, race, religious beliefs, class or political opinions. It endeavours to relieve the suffering of individuals, being guided solely by their needs and to give priority to the most urgent cases of distress". Whatever the misgivings within DfID or the pressures that were put on it by others within government, a more precise definition of humanitarian aid in the Bill would have clear advantages. It would underline in law DfID's determination to uphold international law and humanitarian principles. It would be central to the Government's commitment to a rights-based approach to development. The principles of impartiality and humanity are cornerstones of human rights law and international humanitarian law. It would complement what I hope is a continuing ethical dimension to our foreign policy. It would provide a statutory base for a robust policy by DfID and free it of charges of having soft or sentimental subjective preoccupations. It would meet the public's expectation of what humanitarian assistance should be. For all of those reasons and others, I trust that the Government will look at the matter again and put it right in Committee.

Like others, I am sorry that the Bill missed an opportunity to follow the example of the Netherlands, which legislated that aid will be 0.8 per cent of GNP. That would protect aid from any future opportunistic cuts. We hear a great deal about development targets, especially those for 2015, and about mid-term targets. We also hear a lot about partnerships and the obligations that must be fulfilled by developing countries if they are to receive more aid. But what about our obligations as a developed wealthy country, one of which must involve increased aid? On reflection, is it not unfortunate that the Bill fails to incorporate clear short-term, mid-term and long-term goals for the achievement of the 0.7 per cent figure?

I cannot conclude without commending the Bill on its commitment to the Commonwealth Scholarship Commission. I am a patron of the Council for Education in the Commonwealth. Education is indispensable to development, but it is a two-way benefit. If our own higher education is to meet the challenges of glohalisation, we would be insane not to ensure that it is pursued invariably in communities of scholars that are demonstrably representative of the wider world.

We love our Secretary of State. We admire all her gutsy but intellectually muscular drive. My noble friend the Minister is an invaluable asset to the team and to the cause. However, I must say that uncharacteristically the Bill is a little weary and middle aged. It does not challenge in the way in which it should do or set the pulse racing. We are, after all, fighting for humanity. Worthy the Bill may be, but it is hardly the inspiration for which we are looking if we really are to be a new Britain in a new millennium. Perhaps we can sharpen it up a little in Committee.

8.24 p.m.

Lord Freeman

My Lords, from the Conservative Back Benches, I welcome and congratulate the noble Lord, Lord Hannay. He will make many distinguished contributions to our debates. He demonstrated in his maiden speech an amazing command of brevity, which was obviously born in reaction to his long experience of United Nations debates.

I support the comments of my noble friend Lady Rawlings on the Bill. It should be supported in its principles, which deal with the alleviation of poverty. It is indeed time to end tied aid. The time for us to move on from that basis of distributing aid has long since passed.

The kind comments of the noble Earl, Lord Sandwich, on my long-time friend, Mr Bowen Wells, who has now left the other place, were much welcomed. He was a distinguished chairman of a Select Committee in the other place on international development.

The powerful speech of the noble Lord, Lord Judd, was based on his long experience of large NGOs such as Oxfam. I want to make a brief contribution on behalf of the smaller NGOs, which have played an important part in the alleviation of poverty, particularly in Africa. I want to talk briefly about Uganda, which was the recipient last year of the largest proportion of aid from DfID. Such aid was very welcome. I also want to discuss the development of new sources of water and the digging of wells to provide clean, convenient and regular supplies of water for some of the poorest parts of the Ugandan countryside. There are 200 NGOs, not all of which are British, active in that field. They have brought a welcome alleviation of poverty over many years.

I declare an interest as the unpaid chairman of the trustees of the Busoga Trust, which is active in the Busoga and Luwero provinces north of Kampala. We have dug more than 800 wells over the past 20 years. We are a Christian charity and we were helped in a major way by DfID during the past five years. I pay tribute to the department and thank it for its assistance.

There has been a change of policy in this regard by Her Majesty's Government. I do not seek to criticise them for that, but the Government no longer directly fund many NGOs, particularly the smaller NGOs. Funding in Uganda, for example, goes directly to the Government. Debt relief—following the Cologne Summit in 1999, when the G7 agreed on its importance—and direct aid are no longer paid directly to NGOs; they are paid directly to the Government. The theory is that a government possess greater resources and can place direct contracts with NGOs to alleviate poverty through, for example, the digging of wells. I understand the reason for that change of policy—in the long run it is more sustainable for the relevant countries because governments in Africa must learn through their experience of administering those programmes directly.

The EU still funds NGOs directly and decisions are expected imminently about the next programme, which will commence in the autumn. Many NGOs in Britain have applied under the programme, which has an allocation over the next two or three years of about 1 million euros per application. However, it is heavily oversubscribed and many NGOs that were previously directly funded by DfID are now looking to the EU.

I have three brief points to make to the Minister. She is now no longer a "non-person" but a true Minister in her own right, and I congratulate her on that. Perhaps she would be kind enough, if she cannot cover these points this evening, to write to me. That would be much appreciated.

My three concerns follow on from the Government's change of policy. The first is about the fact that charities have to find working capital in order to undertake poverty alleviation programmes when they bid for contracts from the Government. No longer can a charity rely on using donations or grants that are made up-front. They have to perform the work under contract and get paid at the end. Larger contracts requiring funding of tens of thousands of pounds have to be financed from a charity's own resources, which has proved to be difficult this year. I forecast that it will also prove to be difficult during the next two or three years.

My first question, therefore, is: will the Government contemplate, under the clauses of this Bill, the granting of repayable loans to some of the charities active in fields supported by DfID, enabling them to continue their work as I outlined?

Secondly, whether or not we like it, we are now faced with the difficult problem of commissions. Because governments in Africa operate through local organisations, that problem inevitably presents itself, not only to my charity, but also to many others. It is a difficult ethical issue. One can understand why the distributors of government money seek some sort of participation fee. It is understandable in the circumstances of the poverty that exists in many parts of those countries. But it is an issue on which I hope DfID will provide guidance and encouragement to local governments in Africa and throughout the world, advising very strongly that such payments should not be solicited and that those active in this field should not make them.

Thirdly, and finally, other sources of aid are not referred to directly in the Bill but are referred to in publications of DfID; for example, the Civil Society Challenge Fund, to which the noble Lord, Lord Redesdale, and the noble Earl, Lord Sandwich, referred. I look forward to policy decisions about the distribution of what I believe to be the £4 million available this year and ongoing. My specific question in that regard is whether some of that money can be used to help empower local communities in Africa. For example, it is important to educate local communities as to how they can use the newly constructed water sources to ensure that the health of their families and communities is improved.

The lottery, under its community fund, may be able to provide some funds for charitable acts abroad and any comments the noble Baroness can make on that point will be appreciated. Speaking on behalf of some of the small NGOs, we hope that the Government will keep under review the way in which they are supported and the role that they can play in an extremely important mission. I congratulate the Government and the Minister on the production of this Bill.

8.32 p.m.

Baroness Whitaker

My Lords, we do not often get an International Development Bill so I feel privileged to welcome it and to add my congratulations on my noble friend's well-deserved appointment.

As my noble friend said, this is a simple Bill with one big idea; that is, that the purpose of aid is to reduce poverty. Your Lordships may think that reducing poverty is the obvious purpose of development aid and that it does not need saying. But as my noble friend Lord Tomlinson said, that did not prevent the Pergau Dam misuse of aid, nor will it prevent a different government retying British aid to goods in kind, thus distorting best aid practice as well as fair competition.

I disagree with my noble friend Lord Judd and the noble Lord, Lord Redesdale—which hardly ever happens—that it is necessary to specify in the Bill that aid must not be tied. Indeed, it is preferable to rely on the big idea of poverty reduction as the measure of admissible aid since, to define too closely what kinds of aid are illegal, is implicitly to recognise others which may still not be primarily aimed at reducing poverty.

Similarly, to specify how aid should be handled by receiving governments—the good governance stipulation—singles out that criterion as more worthy than others, quite apart from any difficulties of definition. Of course, good governance is essential for the relief of poverty, but as long as the big idea is maintained, good enough governance will be part of the context of development aid.

However, if it would suffer from over-specification of means, the big idea of reducing poverty needs some underpinning. Poverty reduction is achieved most strikingly from a base of national investment in health and education, particularly for girls, a proven stimulus for economic growth. In turn, economic growth assists investment in health and education and is itself a necessary, though not sufficient, condition for general stability and prosperity.

Private sector investment accellerating economic growth is essential for developing countries to make a success of poverty reduction, and so it is important, as noble Lords said, for the Bill to enable the Government to take part in and influence efforts by companies to invest through shares, options, convertible loans, guarantees and so forth. For instance, one of the more successful ways of giving people the wherewithal to improve their earning capacity is micro-credit. But micro-credit organisations cannot easily obtain capital from the capital markets and banks. Commercial banks are often averse to helping organisations which give such small returns. Under the Bill, DfID could guarantee a bank loan to a micro-credit organisation, or take a shareholding, or enable financing in other ways. That is the modern way to enable the private sector to act as a partner in creating economic growth without compromising its modus operandi.

The Bill also clarifies government support for organisations which undertake development awareness and advocacy, which currently needs recourse to the Appropriation Act. In that way, people's understanding of and support for British development aid can be improved, which makes government policy more transparent and easier to access. The Bill, in its simplicity, sends a clear signal to all the partners in development—developing countries themselves, other governments and donors—that the UK is committed to sustainable poverty reduction and that that is the purpose of aid. But we are entitled to ask exactly how the Secretary of State will be able to continue to support activities whose impact on poverty may be long term. My noble friend mentioned conflict prevention. There is also police training and strengthening honest and effective tax-gathering capacity. I should be grateful if my noble friend could clarify that.

Finally, aid is only a start, though it is a lifeline, in eliminating poverty. Poor economies need access to markets without the unfair imposition of tariffs and the unfair competition of subsidised western produce, as touched on by the noble Lord, Lord Hannay, in his notable maiden speech. To reach economic take-off, countries need direct investment beyond that which the Bill can facilitate. But direct investors will not come when efficiency and effective administration are betrayed by corruption. To make this Bill inaugurate the end of absolute poverty, we also need to put our missing bit of the jigsaw in the OECD anti-corruption regime in place, as promised in the Queen's Speech, through a speedy, separate anti-corruption law. I hope that my noble friend can persuade her colleagues of the importance of that. I warmly support the Bill.

8.39 p.m.

Lord Hughes of Woodside

My Lords, at the risk of being labelled a nameless crony, I offer my sincere congratulations to my noble friend Lady Amos on her promotion from the Whips' Office to being a full Minister at the Foreign Office with special responsibility for Africa. We are all delighted, not simply because of her own personal qualities. We know that her intelligence and thinking will be an asset to the Foreign Office.

I welcome the Bill, particularly as it emphasises priority on reduction in poverty. I remind noble Lords that that should apply to both the urban and rural poor. There is not just one poor. People can be poor in all sorts of different ways.

The Labour Party manifesto, which for once I did not have to stand and defend during the election, states: Labour will continue to focus Britain's development effort on the achievement by 2015 of the International Development Targets—including halving the proportion of the world's population living in extreme poverty, reducing child and infant mortality by two-thirds; primary education for all children and sustainable development plans in every country". That is a fairly ambitious programme and certainly one which should inspire people to support it. The manifesto continues: With Labour, the aid budget will rise to 0.33 per cent of GNP by 2003–04, reaching £3.6 billion—a 45 per cent increase in real terms since 1997 level. We remain committed to the UN target of 0.7 per cent of national income devoted to development and will make further substantial increases over the next Parliament. We remain committed to [that figure]". If my memory is correct, it is salutary to remind ourselves that a target of 0.7 per cent was set in 1970, well over 30 years ago. It might be another 20 years before that target is reached. We should certainly try to increase that target as much as possible. However, one must add that when it was set in 1970 there was no mention of the huge programme for the reduction and abolition of debt. The picture must be looked at in the round.

I especially welcome the stated intention of Clare Short that DfID should engage more fully in ensuring that DfID is the voice for development and poverty eradication across all areas of the UK Government, not just in terms of aid. The key issues are debt—where Britain's role in pressing for relief is welcome—and trade. However, it is critical that DfID develops a coherent and proactive strategy within government to ensure that poverty is at the heart of HMG's overall policy in areas such as trade rather than being an afterthought after the "real" trade interests are considered.

I agree with DfID's arguments that a full strategy in HIV/AIDS and other communicable diseases must be multi-faceted. This is not just about drugs. Britain should have been much stronger and more vocal in support of the South African Government's medicines control Act, which was a model of World Trade Organisation compliant but poverty-focused legislation to increase access to medicines for the poorest, providing a balance to purely commercial-driven policy. South African won the case, but I am sorry that we were not as strong in our criticism of the drug companies as our colleagues in the German and Danish governments.

If we are to be certain that globalisation helps the poor and does not increase inequalities, Britain's development policies, especially for Africa, will have to take precedence, sometimes over vested interests. We must ensure that that is the case.

I also welcome and encourage stronger support by Britain and the rest of the G8 developed countries for the Millennium African Plan (MAP), the idea being taken forward by President Mbeki of South Africa and a number of other African leaders for a kind of compact between Africa and the West for reform, good governance and so forth by Africa, with the West giving concessions in areas such as trade. It is critical that the MAP gets strong support; Clare Short and the Prime Minister have both voiced theirs.

We must ensure that we get action and that words do not get in the way, as with so many other plans and initiatives for Africa which have been meaningless because they have simply drifted along. Meaningful action on issues such as trade will be key, especially in agricultural and related processed products where EU policy and the CAP still cause great damage. Despite the recent EU rhetoric there will be strong resistance to change. This will be a key measure in knowing whether these countries are serious in tackling poverty. The late Archbishop Trevor Huddleston used to say words to the effect of: "Words, words, I am tired of words. What we need is action".

I turn to Angola where, frankly, I am unhappy with DfID's policy of giving only emergency aid apart from one NGO product in Luanda. There are tentative signs of hope in some areas, where displaced people have been able to settle. It is critical that donors are prepared to support those efforts with seeds, tools, resettlement grants and so forth, otherwise the painful faltering steps towards a lasting peace will not be given reality at grass roots level. That is important in building popular hope in the possibility of peace. Britain and NGOs have excellent expertise and experience in such areas. I hope that DfID will review its policy on reconstruction and development aid to Angola as a matter of urgency.

There is a tendency in our debates on international development to concentrate on matters upon which we agree almost entirely. I turn to one area which is not strictly a development Bill area but nevertheless is affected in terms of poverty reduction. Where do we stand in relation to the provision of dams? I notice in yesterday's Observer that the Ilisu dam in Turkey has again come to the fore. The headline stated. "Turkish dam to lose UK support. Report raises human rights concerns". I love the way in which newspapers print that sort of declamatory headline when nothing has been decided.

I am ambivalent about the provision of dams. I have read the report from the world commission on dams from cover to cover. It is a substantial document and makes gloomy and dismal reading. So many of the dams provided over the past 50 or 60 years have not lived up to the promise made when they were built. The detailed cold economic analysis conducted by that commission leads one to conclude that there would not have been any dams built in the past 50 to 60 years. It may well be that the great project of building dams in America might not have happened if we had applied to them those rigid tests.

The objection to the Ilisu dam appears to be not so much economic as social. Here, the figures keep changing. Initially it was estimated that there would be 12,000 to 15,000 Kurds displaced. According to recent reports, that figure has now risen to between 70,000 and 75,000. Friends of the Earth state that that would be terrible for the Kurdish people and the environment. Where does one draw the balance? How do countries which are deficient in energy make up the shortfall? We say quite vehemently and adamantly, "You are not getting nuclear power; you cannot have that". Then we say, "You cannot burn fossil fuels either because that is bad for the environment". How are they to make up the deficiency? It is easy for us sitting at home with a microwave, washing machine, dishwasher, television and video recorder. I have no doubt we have all sorts of other such things in our home, including light bulbs. However, we say, "You really cannot have that". I take a hard line—which sometimes gets me into trouble; I have no doubt it will do so tonight—on how we deal with people who have had a cultural history for many hundreds of years.

I am in favour of cultural history. However, when I go abroad as a tourist I am offended when I see people handing over tiny sums of money to bare-breasted black women, who are shuffling about and dancing, and being careful not to give them too much money in case that upsets the local economy. I have never had a vision of the noble savage kept in his place for the rest of time. How do we grapple with such issues? Sometimes we must face up to them and, on balance, I would now say—it is not a final view—that the Government should stick by the view they took two years ago; that they were minded to give export guarantee credit to have the dam built.

We shall never reach a position in which such matters are dealt with without controversy. We shall never reach a position in which every decision taken in terms of development has no knock-on effect one way or another. However, I hope that when we can examine these issues we can accept that the denial of modernisation to people because of our prejudices is just as bad as forcibly changing people's way of life. We must try to balance that equation and I hope that we can do so. Otherwise, much of what we do may be peripheral.

I believe that the Bill is worth having and that it requires rapid progress and implementation. I believe that at the Foreign and Commonwealth Office and the Department for International Development we have the Ministers and civil servants to do just that. I commend the Bill to the House.

8.51 p.m.

Lord Joffe

My Lords, perhaps I may first declare an interest as chair of Oxfam. It is a privilege to have listened to the maiden speech of the noble Lord, Lord Hannay, who during his term at the United Nations was a good friend to Oxfam and the development agencies. I, too, congratulate the noble Baroness, Lady Amos, on her new appointment.

I welcome the Bill and congratulate the Secretary of State on introducing it and on the powerful and inspirational leadership she has shown in the battle to eradicate poverty. The untying of aid and trade is an issue on which the development agencies have been campaigning for a number of years. I am delighted that the Bill implicitly entrenches the principle of untying. It is also reassuring that the Opposition, in their policy paper First Things First, take an equally firm line on this vital issue.

I do not agree with two points which the noble Baroness, Lady Rawlings, made in her thoughtful speech. I do not believe that any Chancellor of the Exchequer could have done more to push for debt relief than Gordon Brown. He has taken a remarkable lead in this regard not only in the United Kingdom but internationally. Indeed, much of the progress internationally has been due largely to his efforts and commitment to this important cause. As regards the speed of delivery of humanitarian assistance, there have been delays but more recently the department has moved with exceptional speed, having made a number of decisions literally within hours of dispatching relief to areas of natural disaster.

I support the views of the noble Lord, Lord Redesdale, about the amount of international aid. I also support the proposal put forward by the noble Lord, Lord Judd, that clear targets should be set by government to increase our aid to the agreed levels. Without such targets, it will be a long time before we reach the levels to which we are committed. Finally on this aspect, I share the concern of the noble Lord, Lord Freeman, about NGOs being bypassed, with funds going directly to government.

The Bill deals also with the Commonwealth Scholarship Commission. These scholarships have the potential to make a significant contribution to developing countries, provided—and I emphasise this proviso—that the students to whom they are awarded return to their homelands after they graduate. If, however, they remain in the United Kingdom or move on to another developed country, it is the developed world which benefits rather than the developing world, for which the scholarships are intended.

This important issue stretches well beyond the Commonwealth scholarships. Current government policy appears to be to seek to attract nurses, teachers, IT experts and other skilled professionals from outside the United Kingdom, including from the developing world, in order to fill skills shortages in this country caused by our failure to invest sufficiently in the training of such professionals.

To the extent that such professionals are attracted from the developing world, it does great harm to those countries which have invested considerable sums out of their limited budgets in their education. All who work in the field of development know that education is the key factor in enabling developing countries to create wealth and to eliminate poverty.

To deprive such countries of the very people they desperately need in order to develop their economies is unacceptable. It makes no sense, on the one hand, to grant scholarships to people from developing countries and to provide development assistance to them aimed at improving standards of education and, on the other hand, to deprive the countries in question of the benefits which derive from such scholarships and development assistance by luring away the very people they need.

I sincerely hope that the Government will consider this issue and take appropriate action to ensure that it is addressed.

8.57 p.m.

Lord Haskel

My Lords, I, too, welcome my noble friend Lady Amos to her new job at the Dispatch Box. I congratulate earlier speakers on their practical contribution to international development. I know of the work of my noble friend Lord Judd, of the noble Earl, Lord Sandwich, and of the noble Lord, Lord Joffe, but I am sure that there are others.

I welcome the Bill. welcome it as a further step by the Government in the reduction of world poverty. I, too, thought that the noble Baroness, Lady Rawlings, was a little grudging about the role of the Chancellor. As the noble Lord, Lord Joffe, told us, the Treasury has been particularly active in debt reduction and I have little doubt where that inspiration came from. Those of us who had the privilege of knowing the Chancellor's father, a Scots clergyman, knew that he often spoke of the moral duty that we all have to reduce world poverty among our fellow men and women. I have little doubt that the Chancellor absorbed that at his father's knee.

I also congratulate my right honourable friend Clare Short. I agree with other noble Lords that she has been a gutsy and powerful warrior for poverty reduction.

In our modern world, what is it that reduces poverty most? It is trade and the equal sharing of its benefits. This is why fair trade schemes which help develop products and their markets on an equitable basis are an effective form of aid. I am glad that my noble friend the Minister told us that the Bill will enable the Government to guarantee loans and other financial instruments to help support these schemes.

The "Everything But Arms" scheme, giving the world's poorest countries access to the rich European Community market, is another way of helping trade on a fair basis.

But fair trade requires rules and their enforcement. Without that corruption creeps in. I hope that the Minister will be able to reassure noble Lords that this Bill will also help to defeat corruption. Why is that important? It is important because it is the poor who suffer most from corruption, and they are the very people whom we try to help. It is easy to say that if the culture of a country demands it the payment of money to accelerate business is not corrupt. The noble Lord, Lord Freeman, mentioned commissions. I am not sure that this Bill will deal with those matters. I agree with the noble Baroness, Lady Rawlings, that the Government should seek to incorporate into UK law the OECD convention on bribery. I realise that to give UK courts jurisdiction over offences committed abroad creates problems, but I believe that the convention deals with that.

The noble Lord, Lord Hannay, in his perceptive maiden speech, mentioned textiles. When I was a very young engineer I was sent to a developing country to install a textile process. In order to complete the necessary bureaucratic process in that transaction I had to visit a government official. I was rather nervous and wondered how I would communicate. When I arrived at the official's office I was delighted to see that his bookshelves contained the complete works of Shakespeare, large volumes of the works of Dickens and Chambers Twentieth Century Dictionary. I complimented the official on his love of the English language. He looked a little surprised. He handed to me his copy of Chambers Twentieth Century Dictionary and invited me to open it. When I did so I found inside a cut-out which fitted exactly the size of US dollar treasury bills. When I discussed this matter with my advisers back home I was told not to worry because bribing foreign officials was tax-deductible and that made it all very respectable.

Corruption, visible and invisible, takes many form. It can take the form of overlarge armed forces in developing countries, unnecessary extravagance, or enriching the elite. Aid can enrich UK companies if it is used to back commercially unsound projects. These forms of corruption are easy to see, but there are less visible forms. Sometimes tax incentives are offered to encourage foreign investors into a developing country. Those tax breaks may be legitimate, but it is not legitimate for a developing country to become a tax haven for prosperous companies in the hope that the tax forgone will be made up by overseas aid. There is plenty of advice on tax efficient schemes involving developing countries available from the tax avoidance industry here in Britain and I hope that the Government have taken note of it in preparing this Bill.

I agree that the Government should encourage business and industry to accept the standards proposed by Transparency International on these matters as a code of practice. The old idea of linking aid to trade facilitated corruption. By breaking the link the Government have gone some way to reduce the possibility of corruption. To help countries help themselves to reduce poverty through trade and humanitarian aid is a fine ideal and deserves every support. At the same time, I hope that the Government will not allow it to become corrupted by short-term commercial, political and private interests.

9.4 p.m.

Lord Desai

My Lords, I welcome this Bill. I said nice things about my right honourable friend the Secretary of State on Thursday. Therefore, I have to say nice things only about my noble friend Lady Amos, about whom we are always saying nice things. I am glad to repeat what many others have said. Welcome, at last you have escaped the Whips' Office, which is a good liberation to celebrate.

I should like to praise one matter in the Bill. The Bill contains a definition of sustainable development which is better than anything I have read in a long time. The whole notion of sustainable development became trapped after the Brundtland report way back in 1987 by references to the environment and handing future generations a world as good as that we inherited. That is a noble notion, but operationally it is very difficult to define. I am very glad that this Bill contains a more direct definition of sustainable development—not that the Secretary of State can define it—namely, the likelihood of it generating lasting benefits for the population of the country or countries in relation to which it is provided". I believe that the notion of "lasting benefits for the population" rather than making a distinction in the population is very good; otherwise, we may fall foul of all kinds of environmental issues in giving development aid.

I do not agree with my noble friends who have talked about the target of 0.7 per cent. I do not disagree because I like governments to be mean, but when the target was set in 1970 the world in which we lived was very different. Today, official government-to-government aid totals about 50 billion dollars, give or take a couple of billion, and the private flow of capital, which was non-existent in 1970, is 250 billion. For countries that can get it, it is the private flow of capital which is a much better and swifter motor of development than development aid that goes from government to government. Therefore, the role of official government-to-government aid is very different from what it used to be in the 1970s and 1980s. Aid provides leverage for private flows. A number of countries in sub-Saharan Africa which have not been receiving any private capital flow need official aid to lever themselves into position so that, with good governance, education and health, they can become attractive havens for indirect investment.

That is a very different world from the one in which the original target was set. In that world there was no hope that private capital would flow from rich to poor countries. From that point of view I am not all that distressed that we have not reached a target; but of course more money is always preferable. What we really should be emphasising is that countries should prepare themselves in a way that they can become recipients of foreign direct investment.

I welcome what the noble Lord, Lord Hannay, said in his brilliant maiden speech about the negotiations for the WTO. That is another example of how poverty alleviation may have nothing to do with official aid but may very much have to do with rules which are set in the global economy about how trade takes place.

The Bill mentions development awareness. One awareness that I should like to see in this country is how much we need to have free trade so that poor countries will benefit. We have a reluctance to admit that some jobs will disappear because they will go off to poorer countries. We should not be protecting our declining industries but starting to invest in new ones. When one talks about globalisation and benefits of trade there are costs, but we are better equipped to bear the costs of structural change than poor countries. We want to educate the people that globalisation is beneficial. However, it will benefit the poor only if the rich countries do not stand in their way by following protectionist policies.

I very much welcomed what the noble Lord, Lord Hannay, said about the labour and green clauses. They are very well meaning issues and many people like them, but, from a developing country's point of view, they are very suspicious.

I do not, however, agree with the noble Lord, Lord Joffe. I am a prime example of brain drain, although I did not come with a Commonwealth scholarship. I believe that the noble Lord has a very antiquated view of development. Development happens when people go wherever they want to go and where they will be better off. Just because they come from a poor country they should not be nailed down. One would not put such a condition on someone with a Rhodes scholarship. Why penalise people? They may go somewhere else. They may stay in America. They may stay here. They may go back and benefit. All may benefit by being abroad. Think of Kofi Annan. He went from Ghana to America for a degree. He stayed in America. How terrible. Should he have gone back? Of course not. People should do whatever they can do to the best of their ability whenever they can do it.

Development and poverty alleviation take place by individual poor people becoming not poor. Forget about countries and statistics. Basically, poverty is alleviated when poor people get not poor. One reason why poor people get not poor is by migration. One-third of the European population migrated in the 19th century to North America. That was the biggest ever poverty alleviation divide.

We, today, are obstructing movements of labour. We are all for free capital movements, but when it comes to labour movements we suddenly become very territorial. I believe that if there are talented people and they want to move, let them move. There will be more talented people. If one looks at the history of Ireland, it gained in both ways. The many people who left the Irish shores to go to America were better off. The people who remained behind were better off because there were fewer people for the remaining jobs. Therefore, from that point of view we should not think that just because someone comes from a poor country he is sold in slavery to the country and does not have to go back. Let the person do whatever he can do, wherever he can. He will remit more money back by staying here, than he would ever earn there.

Lastly, I was a little worried about what the noble Lord, Lord Freeman, said. The noble Lord mentioned that official aid is increasingly not going to NGOs but to governments. I remember when the noble Baroness, Lady Chalker of Wallasey, was Minister for Overseas Development, I was arguing very strongly that governments should give their money to poor countries via NGOs because that is a better way of reaching the poorest people than going government to government. One of the oldest known problems in development aid is that if it becomes government to government aid it takes a long time to trickle down. One has to have good governance and all those things. If at all possible, we should devise ways of giving such money as we have to NGOs which work closer to the grass roots and know what the people need. They can therefore get good value for the money we give them.

One thing we should have learnt in the last 30 years is that governments of poor and rich countries do not always look after the well-being of their citizens. Sometimes they can be completely antagonistic. The history of post 1960s Africa is full of those examples. What we really want to say is that we want to alleviate poverty of the people not poverty of countries. We should de vise ways of getting aid to them as directly as possible. I should like to hear what my noble friend has to say about the observations of the noble Lord, Lord Freeman, on the difficulty of getting aid directly to NGOs.

This is an excellent Bill. However, Clause 6 worries me a little. It is about financial assistance. While it is laudable, it may give rise to problems. In the modern world it is often the case that one buys equity in a company only to discover later on that the company is either part of a larger conglomerate or has been taken over by a larger conglomerate. One then ends up aiding people other than those one thought one was aiding. In exercising their rights under Clause 6, I hope that the Government are careful to find out whose equity they are buying.

9.15 p.m.

Lord Swinfen

My Lords, I shall begin with one or two comments on the speech of the noble Lord, Lord Desai. I agree with some of the noble Lord's points and disagree with others. I agree with him that it is useful when workers in the West from the developing world send money home. But I disagree with him when he suggests that workers who come here and acquire skills should stay in the West and not necessarily go home. I know he did not suggest that all should stay in the West. Not all of those who acquire great skills in the West will necessarily go back to their developing countries.

Although I am not a medic, my experience is in the medical world. In the developing countries I have visited the need for skilled doctors and nurses is very great indeed. There are not enough people in those countries to treat all those who need that help. Those who acquire medical skills need to go back not only to use those skills themselves but to teach others. In some of the hospitals I have visited I have seen people, particularly those with some form of paralysis, become very much worse because their families are feeding them and looking after them but do not know how to nurse them. I have seen pressure sores the size of dinner plates and meat dishes. I do not know how they manage to survive, but some of them do when they eventually receive proper medical assistance.

I declare an interest. I run a small charity that provides telemedical links to remote hospitals in the developing world and keeps them in touch with medical consultants in this country and in other parts of the developed world.

I welcome the principle behind the Bill but I would like to see less of our aid being available through the EU. I agree with the noble Lord, Lord Hannay, that, by making some available through the EU, countries that have not given overseas aid in the past are brought in and we therefore increase the pool of overseas aid generally. I think that we as a nation manage our overseas aid well and probably better than most other countries. I may be biased but that is my view.

I know that following the inter-community strife the Solomon Islands are in extreme difficulty. It is the only nation in the world I know of that has to pay in advance for fuel supplies as its economy is in such a bad state. The telephone system has virtually broken down and until recently it was unable to get medical supplies because the companies supplying them would give no further credit. I understand that a trickle is getting through. I know that a number of the hospitals had to lay off all but very essential—not just essential—staff and could admit only patients who were genuine emergencies. The hospitals were not receiving the money to pay the staff or to do any work. I understand that the aid to the Solomon Islands is provided by a committee of people from various countries. We have our own High Commission in the capital, Honiara, where there are DfID representatives.

I feel certain that, if we supplied aid directly rather than through the channel of the EU, it would get to the right places much sooner than has been the case and would be dealt with far more efficiently. We know that there have been scandals regarding corruption in connection with EU aid. That is our money that is being used corruptly. It is our duty to make certain that our funding is used properly and honestly; that it reaches the right people at the right time and in the right places.

However, we are not perfect. One of the hospitals with which I work applied for a grant from DfID. The department sent out from the United Kingdom three individuals—I am told that they were experts—to undertake a gender audit on the hospital, which was run by an NGO. The hospital was told that it would not receive its grant because only 25 per cent of its beds were reserved for women. The other 75 per cent were reserved for men. That was not what the hospital wanted. I know that it looks after some women for the rest of their lives because their families will not take them back.

The job of the gender audit could have been handled by DfID representatives on the spot, without sending people out from the UK at a cost of many thousands of pounds. The local representatives would have been able to advise DfID in the United Kingdom that, because of the culture of the country, women who are seriously injured or have become dangerously ill are simply not taken to hospital. The situation is unfortunate. In this country we take our female relatives to hospital, but in that part of the world they do not. Women are just not important enough. We cannot, simply by wishing to do so, change the mores of another culture.

We need to be sensible about how our aid is handled. We must take advice, not only from DfID representatives on the ground, but also from local NGOs and charities. Very often, their representatives have been in place for many more years than the DfID representatives. They have managed to build up considerable funds of knowledge and expertise which ought to be used.

The noble Lord, Lord Haskel, and other noble Lords mentioned the problems surrounding bribery and corruption. I think that we should introduce measures in this Bill to reduce the incidence. In some parts of the world, great difficulties are caused to NGOs as well as to commercial organisations, when essential goods are held up in customs for weeks or even months. The duty has been paid and the correct import permits have been completed. Often those goods deteriorate so that sometimes, when they are released from customs, they are no longer fit for use. That applies in particular in regard to medical supplies which have a short shelf life. This occurs because charities are not prepared to pass something under the table.

We can deal with the problem by making it a part of the contract that, when DfID gives a grant for aid to an NGO or a charity, their accounts for how the money has been spent must be extremely detailed. It must be made clear that if bribes are paid those organisations will not receive any further funding, or that their funding will be cut off at that point. I know that this is a difficult problem. In some cultures, the salaries of individuals are extremely low because it is expected that they should make a little on the side. But that is not our way. We should not encourage it. If we can do something in the Bill about this issue, I should like to see it done.

As has been mentioned, the Bill separates aid from trade. I am in favour of that. A direct exchange of aid in return for trade is a mistake and is wrong. But will that mean that DfID cannot help small organisations in the developing world to start businesses that will give people employment and allow them to feed their families? In some developing countries, one individual in a family will be working and supporting 30 or more people. The more people we can get working, the greater the reduction in poverty and the greater the chance of feeding everyone. If we can feed people properly—particularly the children—we will be building a healthier generation for the future.

I hope that we will be able to improve the Bill slightly as it passes through the House, but generally I welcome it.

9.26 p.m.

Lord Brennan

My Lords, poverty in all its forms is the greatest challenge facing the international community. So said the world's leaders at the spring meeting here in London which was designed to combat world poverty. One of the successes of the first term of this Government was trying to meet that challenge. This Bill is a further opportunity to improve on what has already been done. I commend the appointment of my noble friend Lady Amos as a Minister well equipped to help in that task.

One may say that this Bill marks a coming of age for international aid from this country. We started with charity, mostly from church organisations; we developed to tied aid in the 1960s, 1970s and 1980s; and now we have come of an age where we can confidently give aid without it being charity or without it being tied solely to our commercial advantage. The Bill seeks to put that picture of the past firmly out of the way.

I agree with my noble friend Lord Desai that one should look at Clause 1. The Short Title—International Development Bill—has to be defined, as it is in Clause 1, in an expansive way. "Development assistance" is that which is likely to help reduce poverty. But what is development assistance? It is that which furthers sustainable development; that which improves the welfare of people. It is not only about the alleviation of poverty; it is about its elimination, albeit down the avenue of reduction. As my noble friend Lord Desai pointed out, it is significant that in Clause 1 there is special mention of that kind of assistance which will generate lasting benefits.

When my noble friend, in opening the debate, said that poverty is a complex phenomenon and that the ways of solving it must be varied, she was right. I regret to say that I disagree with my noble friend Lord Judd when he complains about the lack of precision in the Bill. As a lawyer, I welcome that. I treat Clause 1 of the Bill as being in the widest terms; and rightly so. It has maximum flexibility to meet every circumstance. I will be very dismayed indeed if any Minister in future tells us that Clause 1 has some limited meaning. It has nothing of the sort. The only limitation is practicality and expense.

The Bill is wide in its intent. Perhaps I may address three features of it that merit development, if not in committee, then later by ministerial statement. The first is the role of multinational companies in the reduction of global poverty.

As Peter Hain said in a pamphlet published a month or two ago, globalisation of opportunity demands globalisation of responsibility. He was right. Profit involves people. When we look at international development, the analysis is not merely donor governments, donee governments, NGOs and the people of the donee countries. It includes the commercial enterprises that make development work.

The 100 largest multinational companies account for one-third of the world's direct investment. That is mighty power. It deserves to be harnessed in part for the common good. Therefore, the provisions of Clause 4 enabling the Government to subscribe to, contribute to or promote organisations that will work to reduce world poverty and to make us more aware of the problem must include multinational companies—with two particular objectives. The first is innovation—they preach it; let us use it. At the Okinawa G8 summit a special programme was set up to produce cleaner forms of energy. It is marvellous that Shell is involved in a programme in South Africa to produce local energy by solar power. It is doing what it can do best technically. That could be used as a source of development aid in a critical area of development problems; namely, shared water resources. Also, companies which are innovative in international affairs should surely agree to work with our Government and others on regionally based programmes to avoid national sentiment frustrating initiatives that could be of regional benefit.

I turn, secondly, to the conduct of multinational companies in development work. Out of the 30 or so codes that presently exist, I want to give a few powerful examples. Such companies should raise corporate awareness of global poverty. They should identify broad-based common values, especially in the field of anti-corruption. They should provide special assistance for the social and environmental effects of their development programme. Where they fail, they should be accountable—but in order to ensure that such a problem does not arise, business schools should include in their programme regular tuition on the values of corporate efforts.

Why is all this so important? It is the antithesis of tied aid. II expects sympathetic free aid as a peripheral cost of major profit-making activity. Let us see, from the values that the companies preach and the codes that they produce, co-operation with the Government pursuant to Clause 4.

I turn briefly to the subject of children and their place in global poverty. My noble friend the Minister mentioned a figure of 1 billion people living in extreme poverty, many of whom are children. They would regard it a s intellectually patronising in the extreme to be required to define their condition. It is obvious. If it is that great a problem, each country involved has a special obligation to help its children.

Therefore, under the parts of the Bill that deal with "financial assistance", I invite the Government to consider requiring any government who benefit from debt relief or from a development programme to ensure that in some way children, in particular, benefit from savings made or extra moneys invested. It is a little more than that requested by the noble Baroness, Lady Rawlings, as regards health and education: it must be targeted at children. At that February meeting, Gordon Brown put it well when he said: There is a virtuous circle of debt relief, poverty reduction and sustainable development"; at the heart of that circle are the children of the developing world.

The Commonwealth countries still show toward us a tremendous sense of affinity and, I emphasise, expectation. Gone are the days when people trained here, went back to their countries and there was a permanent tie. These days we should bring them here. In the clauses that deal with Commonwealth scholarships, I hope that the emphasis that appears to be solely on the educational is a misreading on my part. The 1980 Act properly provided for exchanges of health workers, police and teachers. I hope that this legislation will continue in the same way when it becomes law.

However, as well as Commonwealth scholarships at Oxbridge, red-brick, or wherever, why should there not be short-term visits to this country of, say, three weeks or a month? That could apply to nurses, teachers, environmental workers, civil servants, poor lawyers and accountants—people who are running the future of those countries with which we are concerned. Those people could come to this country for a month or so and, I hope, be dignified with the title of "Commonwealth scholars".

I close my remarks by reminding the House of that challenge which was said to be so great. We have the good fortune to have a Minister for international development who says what she thinks and who tries to do what she promises—a happy coincidence in a Minister for international development. We have a Government who, by the re-introduction of this Bill so early in the Session, show commitment to the cause. But, above all, we have a country that expects a moral obligation to be fulfilled to the people who need help. Everything that I have suggested tonight—multinationals, children, as well as educational and other exchanges—involves the people of those countries, or of our own country. When it becomes law, this Bill should improve the poverty problem of this world.

9.38 p.m.

Lord Hunt of Chesterton

My Lords, it is always a pleasure to follow my noble friend Lord Brennan. I hope that my contribution will be seen as complementary to his remarks. I welcome this Bill on international development following the excellent White Paper, and the inspiring work of the present Secretary of State. Perhaps I may add my congratulations to those already expressed to my noble friend Lady Amos, with whom I share an education at the University of Warwick. I also congratulate the noble Lord, Lord Hannay, on his maiden speech. I look forward to discussing with him the prospect of increasing the understanding in this House of the importance of the United Nations.

My career has touched on aspects of this subject from the time when I was an engineering student and visited both modern and ancient irrigation schemes in Pakistan. At the Met Office I worked with developing countries on forecasting natural disasters. At present, I work with academic, charitable and consulting groups; and, accordingly, I declare my interests.

Bills on international development are rare but important events in the work of this House. Therefore, we need to examine the Bill closely to see whether it meets all the Government's objectives. We recall that this Bill relates to the work of an excellent department which over the years has transformed itself from a department of technical co-operation with such famous Ministers as the noble Baroness, Lady Castle, and the noble Lord, Lord Carr. I hope that the current focus of the department on the reduction of poverty will not lead to a lesser appreciation of the contribution of science and engineering to that task. I shall return to that issue later.

In considering the legislation which deals with an overarching theme, the House should be on its guard against passing a purely departmental Bill. Regrettably, departments find it easier to propose legislation which deals only with their department, or even one part of a department, rather than dealing with the more complex task of involving the whole government and the wider community as well. We saw that par excellence with the Transport Act in the previous Parliament which needed some crucial amendments on the environmental aspects of transport. I hope that this House will have the courage to do that again with this Bill. Although I support the Bill, at present in my opinion it is framed too narrowly.

Clauses 1 and 3 are excellent in that they include the three objectives of a reduction in poverty, sustainable development and alleviation of the effect of natural and manmade disasters. My point is that international development is a task which should be led and stimulated by the Secretary of State, but it is far too broad an objective to be her sole responsibility. Other government departments and agencies, including European intergovernmental agencies, need to be involved. My suggestion is that those organisations should be explicitly instructed in the Bill to have as one of their measured objectives contributions to international development paid for out of their budget to some extent. Those departments and agencies know better than the Secretary of State how best to meet those three objectives in a number of situations.

A strict reading of the Bill would imply that such work in government is to be done only if it is the express wish of the Secretary of State. Let me explain. The present Secretary of State has quite rightly emphasised that poverty reduction is effective only where conflict is eliminated and there is law and order. Sadly, the events in Sierra Leone and South America suggest that one of the causes of conflict is trading in legal and illegal commodities. I heard from a US official recently that oil trading is affecting the Indonesian situation. At the same time, of course, the UK and other countries sell arms for internal security. Those matters are handled by the Department of Trade and Industry and the Foreign and Commonwealth Office. One should read in the annual reports of those departments how their policies contribute to international development.

My own expertise is concerned with science and technology and how that can contribute to international development. Although it is not an explicit objective of many departments and agencies, nor of European intergovernmental agencies, the responsible civil servants in those bodies not only include that work as part of their regular tasks but also report on it in their annual reports. The list of such organisations goes far beyond those listed in Schedule 1. The list is bizarre in my view. As usual in the British public service, demanding and unusual tasks are taken on by civil servants without asking permission from higher levels and therefore without thanks or recognition and with the distinct possibility of being shot on the quarter-deck or a public accounts inquiry if things go wrong.

The Meteorological Office regularly reported on its work to improve hurricane warnings to some of the poorest and most vulnerable communities in the world, such as fishermen in Mauritius and in Andhra Pradesh on the coast of India. Farmers in north east Brazil and Africa utilise the three month seasonal forecast to decide which crops to plant. European intergovernmental agencies provide out of their regular budgets help with satellite forecasts and movement of pollution over the Indian Ocean.

More could be done. Why, one might ask, is it quite possible to use advanced technology to warn a Grand Prix driver in Sao Paulo to change his tyres because of an impending thunder storm when it is not possible to find funding to improve the expensive and erratic aviation services in central America? That point has been made by international banks. The legal, administrative point I am making is that current practice is ad hoc and may not necessarily continue unless such contributions are properly budgeted and agreed to in government as part of the overall responsibility of departments and agencies.

When that point was put to her, the Secretary of State commented that in emergencies she could call up fire officers from local brigades or helicopters from MoD. That is essential but it is only one part of interdepartmental collaboration. I am talking about the long-term programmes which are necessary for the long-term goal of sustainable development.

Another powerful example was made by James Wolfensohn of the World Bank who explained how the Internet now enables cocoa farmers in West Africa to arrange their sowing and trading. But the telecoms' arrangements in the developing world are very unsatisfactory and far too expensive. Are the DTI, the telecommunications agencies and the UN agencies for telecoms facing the problem? I am not sure. Is the City of London being used to help those farmers do their commodity trading?

The scientific community could also contribute much more to this goal. I have been on the Natural Environment Research Council and a holder of numerous research grants. At present, research proposals even regarding a quite fundamental topic in the UK have to explain how they could contribute to "wealth creation" and "the quality of life". Surely if the Government could communicate their serious commitment to poverty reduction and sustainable developments to the science agencies and research councils, they could urge them to include those objectives in their equally important if more parochial goals and to devote a proportion of their research budget to that end.

I hope that the Minister for Science, the noble Lord, Lord Sainsbury, will support such a measure. Recently at the European Energy Laboratory at Petten in the Netherlands I saw research on photo-voltaic plastic sheets which in five years or so may provide cheap and practicable forms of electricity for the humblest dwellings all over the world, thereby obviating the ruinous deforestation which one sees everywhere. This research began in the laboratory of Professor Friend at Cambridge. It was originally applied to high-tech Piccadilly Circus type of lighting schemes. Noble Lords can see the implication.

To summarise, I believe that Clause 8 should be extended to require government departments and agencies to devote a certain small percentage of their budget to poverty reduction and sustainable development, to report on it and for the Secretary of State to ensure its wider effectiveness. One need hardly add that such a report from H M Treasury would have an up-to-date account of the outstanding initiative of the Treasury to reduce the debt of developing countries.

Finally, in line with the remarks of many noble Lords, I believe that Clauses 7 and 8 which empower the Secretary of State to fund activities for poverty reduction and sustainable development need amending to ensure that those arrangements are reasonably transparent. It is important that the public have a clear understanding of the relative effectiveness of those funding arrangements, whether with UN or EU agencies, the private sector, other governments or non-governmental organisations. Such comparisons need to be sensitive and sensible, but they are needed. I warmly welcome the Bill.

9.48 p.m.

The Lord Bishop of Southwark

My Lords, from these Benches we add our congratulations to the noble Baroness, Lady Amos, on her new responsibilities. We are also delighted that the International Development Bill has been reintroduced so early in the life of the new Parliament. We see this as a sign that the Government intend to continue to work for a more effective global effort to reduce poverty. We would wish to give it our full support.

Like many others, we continue to be involved in the campaign to reduce the debt of the poorest countries. I agree with noble Lords who have indicated that one of the most heartening aspects of this campaign has been the personal commitment of a son of the manse, the Chancellor of the Exchequer. If the international fruits of this campaign have been modest, as they have, we support the Chancellor in putting pressure on his counterparts in Japan and other prosperous countries so that the poorest of people on earth are no longer shackled in this modern form of slavery. We feel that there is genuine support at the financial and political heart of our own Government. We in our turn would wish to give general support to the Government's objective on development aid expressed in the Bill.

Within this general support, however, we express some more critical comments. I suppose that the Biblical word most appropriate to our deliberations is "tZED A KAH". That is sometimes translated "charity". However, a better translation would be "righteous benevolence". That contains the strong element of justice. Charity awaits the cry of distress and then acts. Justice anticipates the cry of distress. We view the provisions of the Bill through the spectacles of justice, not of charity. Seen through those spectacles, it falls short.

Any Bill that makes poverty reduction and sustainable development pivotal issues deserves support, but there must be concern that the Bill will make little impact without additional financial provision. I welcome the fact that the Government's commitment to overseas aid is increasing, but it still remains inadequate when compared with the challenges set out in their two international development White Papers. At current rates, it will be 50 years before the UK reaches the UN target.

As it happens, the General Synod of the Church of England will be debating international development concerns at the end of this week. Among other things, the General Synod will be asked to endorse a set of policy commitments prepared by Global View 2001, which is an alliance of 25 human rights and development organisations, including Christian Aid and our own Board for Social Responsibility.

We, too, have our wish list of specific policies. We will encourage the Government to take action in five areas on overseas development assistance. First, we would like an annual increase in the aid budget, with the aim of reaching the UN target of 0.7 per cent of gross national product within 10 years. Secondly, we want the proportion of aid that is spent on basic social services such as health and education to be increased to 20 per cent of the total budget. Thirdly, we would like the Government to improve the quality of European Union development assistance and increase its poverty focus by ensuring that 70 per cent is spent in the poorest countries. Fourthly, we ask them to use aid procurement and contracting to build southern capacity and to untie all aid, including technical co-operation. Fifthly, we want the Government to ensure the swift and effective delivery of humanitarian assistance to all civilians affected by conflict and natural disasters.

However, we want to play our own proper part in bringing aid to those most in need. Clause 4 makes provision for the Secretary of State to support activities or organisations likely to promote awareness and understanding of world poverty. I have no doubt that faith communities fall within that provision. On that point I disagree slightly with the noble Lord, Lord Brennan. The Church has not just been involved with the eradication of poverty in the past; it is still very much involved in the present—and not just the Church.

I chair a national organisation called the Interfaith Network. As it happens, it has had its annual meeting today in Birmingham. Sadly, I had to leave it early to be in your Lordships' House this evening. However, before I left I heard from a young Sikh who, together with some of his friends, has formed an organisation to take emergency aid to regions in crisis. It all started from the Kosovo atrocities. In 10 days, that young man raised £25,000 from the Sikh community in Slough and took a lorryload of food and medicine across Albania to the war zone. There are not many Sikhs in Kosovo, but there are people in human need. The young man was responding to that need, as he and his friends have since done for those suffering as a result of the earthquakes in Turkey and Gujarat, where they helped to cremate bodies.

That is just one young man and a few friends—a drop in the ocean. But from such drops the wave of human concern can transform lives. All the great world faiths are rooted in local community developments. For example, the Church of England, which is part of the global Anglican communion, with nearly 70 million members, is well placed to encourage a deeper awareness and understanding of world poverty through our global action.

I saw a typical example of that on a Sunday morning in a Tanzanian village a few years ago. I was accompanying the local bishop to one of his visits to a far-flung village. There was no church building, so we worshipped in the open air. When the prayers had been prayed and the songs had been sung, the holy table was cleared of its sacred vessels and it immediately became a development table where basic medicines, nutritious milk biscuits for children and fish from the diocesan fish farm were all made available, together with illustrative leaflets on how to combat malaria or AIDS. Such is the stuff of grass-root development, and it is repeated hundreds of thousands of times through faith networks around the globe.

I hope that the Secretary of State will bear in mind such faith communities as she seeks to build the broad coalition of which she spoke when she addressed the General Synod in November 1998. We certainly want to play our part in this great enterprise and we shall listen with interest to what the Minister says when she responds to the debate. In particular, we would be interested to hear anything that the Minister might have to say on the role of faith communities.

9.56 p.m.

Baroness Wilkins

My Lords, I join other noble Lords in congratulating the Government on bringing forward this important Bill. I also congratulate my noble friend Lady Amos on her new ministerial post. The Government's commitment to the reduction of world poverty is one in which we can take a deep pride.

The World Bank has estimated that around one-fifth of the world's poorest people are disabled. And disabled people are the poorest of the poor. Their literacy rates are considerably lower than those of the rest of the population, with recent UNESCO studies suggesting that only 1 to 2 per cent of disabled children in developing countries receive an education.

There are known to be 300 million disabled people in developing countries, but the enormity of their situation is rarely obvious because they are so often hidden away. That led Howard White, the author of the 1999 Africa Poverty Status Report, to conclude that disability was, the hidden face of African poverty". Disability is a cause of poverty and poverty can cause disability. This vicious cycle, clearly described in DfID's March 2000 issues paper, Disability, Poverty and Development, shows how the social and cultural exclusion and stigma of disability lead to denial of opportunities for economic, social and human development. In turn, that leads to a lack of economic, social and cultural rights, and on the cycle goes to reduced participation in decision-making and the denial of civil and political rights.

It is on the matter of the promotion and protection of human rights that the International Development Bill is disappointing. The 1997 government White Paper, Eliminating World Poverty: A Challenge for the 21st Century, has a clear rights-based approach. It states that poverty reduction can take place only in a climate of rights and non-discrimination. Moreover, it takes a rights-based approach in relation to market economies.

DfID has been working on a rights perspective to all its aid and development policies. But this Bill gives no support to ensuring that that approach will continue into the future. All the rights which this Government and disability development organisations, such as Disability Awareness in Action and Action on Disability and Development, have fought so hard to achieve could be jeopardised by a future, less-understanding government.

There needs to be a clear commitment on the face of the Bill to protect and promote human rights. That is all the more important as the Bill gives considerable powers to the Secretary of State. An explicit commitment would prohibit any other government or Secretary of State from making suggestions that would contravene rights and, by implication, discriminate. And, most importantly, it would ensure that all the groups which traditionally have been left out of development assistance could be included.

I am not arguing that specific groups, such as disabled people or women, should be mentioned in the Bill. They should not. However, the Bill must tacitly recognise that those groups exist and that they should be included in programmes, projects and policies that are committed to poverty reduction. That is why an explicit commitment to a rights-based agenda is essential to disabled people.

Although there has been a major shift in recent years from the traditional approach to development and aid, traditional habits die hard so far as disability is concerned. Disability projects are still predominantly medically based, exclusive and controlled by non-disabled people. Less than a year ago, the chair of a major aid agency articulated his belief that disability should not be part of his organisation's policy because disability was a, special issue and had to he dealt with by specialists". An explicit commitment to rights in the Bill is all the more important because the UK has yet to support the call for a UN convention on the rights of disabled people. In 1993 the UN General Assembly adopted the standard rules on the equalisation of opportunities for disabled persons, but those rules have no teeth. The standard rules put no compulsion on member states, they are not tied to the human rights monitoring mechanism of the UN and they do not have any regular UN funding.

Eighteen months ago, Disability Awareness in Action set up a database to document violations of disabled people's human rights since 1990. It has already recorded cases against 2 million disabled people worldwide. It collected appalling evidence, such as the family in Spain who kept a disabled woman in a stinking six-foot hole for 40 years and the six disabled children who starved to death at a hospital in the Ukraine because staff stole their food.

Alongside those atrocities exists the unremarked acceptance that most public buildings and transportation systems throughout the world are inaccessible. Solutions to the violations of rights and discrimination can happen only through enforceable, comprehensive legislation that results in concrete social change. There are more than half a billion disabled people in the world today, 80 per cent of whom live in developing countries. While a UN convention would not make an immediate improvement to their lives, it would provide an important lever with which to push the rights of disabled people up the national and international political agendas. That in itself can result in important changes, not least in the writing and scrutinising of government reports and legislation and in changing the focus of legislative bodies and NGOs.

At a recent conference organised by International Service, Macline Twimukye was the speaker from Uganda, where disabled people have achieved a greater level of political representation than in any other country. The new Ugandan constitution provides for the representation of the disability movement at all levels of the political administration. Five seats are reserved for disabled people in Parliament, representing the four regions of Uganda and the interests of disabled women. In each local election at all levels of government there must be at least one representative who has a disability. However, Macline Twimukye, who heads the National Union of Disabled Persons of Uganda, made the telling point that all of that progress could be lost with a change of government. For that reason she advocated strongly for a United Nations convention on disability to provide her organisation with a powerful tool to continue to lobby governments for the rights of disabled people to be recognised.

I urge the Government to support the call for a UN convention on the rights of disabled people. Equally, I hope that my noble friend the Minister will accept that an explicit commitment to protect and promote rights needs to be part of the Bill in order that this Government's outstanding achievements will not be jeopardised in future.

10.5 p.m.

Baroness Amos

My Lords, I begin by thanking all noble Lords for the constructive and insightful debate we have had this evening. I thank noble Lords also for the broad welcome given to the Bill across the Chamber. In particular, I thank noble Lords for their positive comments about the work of the Department for International Development, and about the energy and enthusiasm of my right honourable friend the Secretary of State who has made such a difference in this area of work.

I pay particular tribute to the noble Lord, Lord Hannay. His was a notable maiden speech, and the noble Lord's experience and knowledge will be greatly appreciated in this House.

I thank noble Lords too for their kind remarks on my promotion. It is a privilege to cover both the Foreign and Commonwealth Office and the Department for International Development. I hope that this is an example of real joined-up government—I look to my noble friend Lord Judd. In a characteristically robust speech my noble friend asked: why poverty reduction rather than poverty elimination? I can reassure him that we are committed to poverty elimination and to the international development target of halving the proportion of people living in abject poverty by 2015.

I do not want to indulge in political point-scoring, but I must remind the noble Baroness, Lady Rawlings, as did my noble friend Lord Tomlinson, that the ODA GNP ratio fell from 0.5 per cent in 1979 to 0.2 per cent in 1997. I need say no more on that point. But I say to the right reverend Prelate the Bishop of Southwark that we are reversing that trend. By 2003–04 our ODA GNP ratio will be 0.33 per cent. That shows this Government's strong commitment. I am also pleased to say that we are making good progress in all the areas mentioned by the right reverend Prelate and I shall touch on them later.

My noble friends Lady Whitaker and Lord Tomlinson recognised the balance in the Bill; that it tightens the purposes for which development assistance can be provided but allows the Secretary of State to use a wider range of instruments and powers to achieve those purposes. That clear focus will have the effect of making the use of development assistance for further improper political and commercial ends unlawful. I welcome my noble friends' support for the Government's position on that issue.

The term "poverty" is not defined in the Bill, for good reason. As I said in opening, we are dealing with an extremely complex area. But, as my noble friend Lord Desai made clear, Clause 1(3) defines "sustainable development".

The noble Lord, Lord Redesdale, asked specifically about the difference between "poorest state" and "poorest people". The Government recognise that serious pockets of poverty exist in middle income and transition countries. The Bill is premised around providing development assistance to tackle poverty, not around providing development assistance to poor countries. It will therefore allow the Government's efforts to contribute to the elimination of poverty in middle income countries and in countries in transition.

I wish to make two further general points. My noble friend Lord Hunt of Chesterton made a plea for government departments to report on activities which contribute to the international development agenda. We are taking a more proactive and integrated approach across government; for example, the Conflict Prevention Fund. There are other areas of work but I agree that more remains to be done.

My noble friend Lady Wilkins raised the important issue of poverty and disability. The Government realise that that is an area which is not often recognised; that is why we published a paper. Social justice and equality are at the heart of our development effort and I can assure my noble friend that we take a rights-based approach extremely seriously.

I turn to some core themes which emerged during the debate. The noble Baroness, Lady Rawlings, my noble friend Lord Tomlinson, the noble Lord, Lord Hannay, the noble Lord, Lord Swinfen, and the right reverend Prelate the Bishop of Southwark, among others, raised the question of UN and European Union reform.

It is important to say from the outset that we get additional leverage from our work through the multilateral institutions. The UN and EU both have the potential to make a huge impact on world poverty. Both are making genuine and significant efforts to become more efficient and more effective, in particular under the guidance of Secretary-General Annan and under Commissioners Patten and Kinnock.

DfID will continue to work with the UN and the EU to support and reward reform. The noble Lord, Lord Hannay, will be interested to note that last year we established an international policy and performance fund to reward improvements in the performance of multilateral organisations and to provide support for their reform efforts. Major recipients in 2000 and 2001 were the UN Fund for Children and the United Nations Development Programme (UNDP).

I turn to debt relief, which was mentioned by a number of noble Lords, including the right reverend Prelate the Bishop of Southwark. Other noble Lords referred to the tone of the remarks made by the noble Baroness, Lady Rawlings, in that respect. Twenty-three countries have qualified for debt relief under the enhanced HIPIC initiative with more than 50 billion dollars of relief being agreed.

Debt relief is agreed on the basis of poverty reduction strategy papers which are drawn up and owned by national governments. They set out how governments will tackle poverty and specify how the debt relief savings and other development resources will be used. They are public documents drawn up with the participation of civil society groups and international donors. Perhaps I may also say to the noble Lord, Lord Redesdale, that we have worked hard to ensure that the World Bank and the IMF appreciate and understand the need for a poverty elimination focus.

The noble Baroness, Lady Rawlings, chided us for reaching only 22 countries by the end of last year rather than 25. Perhaps I may remind her that conflict is a fundamental obstacle to many countries qualifying for HIPIC debt relief. We are working with our partners, including in G8 and the UN, to strengthen international and regional efforts to prevent and resolve conflict. For example, we are seeking to curb the use of diamonds to fuel conflict. We are working closely with the UN to improve its handling of crisis and conflict management following the Brahimi report on UN peace operations.

My noble friend Lord Brennan suggested that countries should be required to use debt relief savings to lift children out of poverty. Child poverty is a particular priority. However, it cannot be eliminated in isolation from the poverty of the community in which the child lives. Therefore, we must take an holistic approach.

The noble Baroness, lady Rawlings, and my noble friend Lord Tomlinson, among others, talked about the importance of good governance. There has been some debate over whether the Bill should contain reference, either as an aim or purpose, or even a precondition of development assistance, to good governance.

The quality of governance is critical for the eradication of poverty. Where governments are unrepresented, unrepresentative and ineffective or where corruption is endemic, economic growth and sound development suffer. For those reasons, we are clear that under the Bill the Secretary of State will be able to continue to support good governance activities. To add good governance as an additional aim or purpose of development assistance is therefore unnecessary. The quality of governance is important, but so are health, education, water, the environment, human rights and the empowerment of women. The list could continue. All those aspects of development are inter-dependent.

This is a good point to move on to corruption. It was raised by my noble friends Lord Haskel and Lady Whitaker, the noble Baroness, Lady Rawlings, and the noble Lord, Lord Swinfen. My noble friend Lord Haskel spoke of the enormous cost of corruption. He was right to highlight the problem. Corruption affects all areas of development and the poorest suffer the most.

However, I am pleased to say that the prospects for progress have never been better. Corruption is no longer a taboo subject. Governments everywhere are exposed to pressure to bear down on corrupt practices and increasingly appreciate the benefits of doing so. DfID's strategy is to support countries which are genuinely determined to crack down on corruption and we are currently spending £350 million each year on programmes in this area. We are also collaborating with other development agencies and contributing to multilateral efforts, in particular through supporting the strengthening of financial intelligence units and regional and anti-money laundering mechanisms.

The noble Baroness, Lady Rawlings, accused the Government of sitting on their hands with respect to corruption. Where governments are not committed to tackling corruption we have taken strong action in partnership with other donors, including, for example, the withdrawal of government-to-government aid in Kenya, Malawi and Zambia. But given what has been said tonight about the nature of poverty, that is clearly not a long-term solution and such actions can hit the poorest hardest. We need to engage with such governments in order to influence them.

The Bill will allow us to continue to support activities which help the fight against corruption in all its forms and I hope that this addresses the serious concerns outlined by the noble Lord, Lord Freeman, when he was talking about the particular case in Uganda.

My noble friends Lord Haskel and Lady Whitaker and the noble Baroness, Lady Rawlings, were interested to know when the Government would demonstrate their compliance with the OECD convention on the bribery of foreign officials. I am pleased to say that the Government plan to introduce a criminal justice Bill into Parliament in the current Session.

My noble friends Lord Brennan and Lord Judd and the noble Lord, Lord Joffe, raised the Commonwealth scholarships scheme. The scheme should be seen in the context of DfID's wider work in education. Our efforts are focused on the attainment of two international development targets for education: to achieve universal primary education by 2015; and gender equality in primary and secondary education by 2005. Within that framework, we are investing heavily in skills development. A key challenge is to address the education skills and development demands of the poorest, especially those who are completely excluded from educational opportunity. Skills to improve livelihoods are particularly important, and literacy is the major issue.

My noble friend Lord Brennan raised the question of engagement with multinational companies. The Government support and encourage socially responsible business practice by multinational companies in their activities in developing countries, believing that this is one way in which the private sector's every-day activities can also work to decrease poverty further than is already the case.

I turn to tied aid. The noble Earl, Lord Sandwich, the noble Lords, Lord Redesdale, Lord Freeman and Lord Joffe, my noble friends Lord Judd and Lord Tomlinson and the right reverend Prelate the Bishop of Southwark all mentioned tied aid. The Government intend that the new Bill will make the use of aid funds for improper political or commercial ends—so-called "tied aid"—unlawful.

We have been persuaded by legal arguments that the most effective way to ensure that aid cannot be used for improper political and commercial purposes is to rely on the clear statement in the Bill of the principles and purposes of development assistance which are set down in Clause 1. Under that clause the Secretary of State may provide development assistance only if he or she is satisfied that it is likely to contribute to a reduction in poverty through furthering sustainable development or promoting the welfare of people.

It is entirely reasonable to ask why we have not chosen to make an explicit reference in the Bill to tied aid or improper commercial and political purposes with a view to making them unlawful. The straightforward answer is that, despite a good deal of effort, we have been unable to develop a convincing and useful definition of these terms. We concluded that tied aid could not be defined by the mechanism or form of assistance but only the motivation behind it. The question of motivation is dealt with in Clause 1 of the Bill which is the core power.

We also welcome the agreement at OECD that all financial aid to least developed countries will be untied with effect from 1st January 2002. Not only will that help to reduce the proportion of tied aid globally but it also sends an important political message on which we intend to build. Other bilateral donors are considering whether to follow our example of unilateral untying. We are working with developing countries to push for further untying at next year's Financing for Development Conference.

I turn to humanitarian assistance. I am surprised by the comments of the noble Baroness, Lady Rawlings. We are often the first on the ground with our emergency response teams and through our support for NGOs. We should be proud of that. I thank the noble Lord, Lord Joffe, for his positive remarks. The noble Baroness also spoke about the need for the voice of NGOs to be heard. The Government are committed to a partnership approach. We consult extensively and engage in robust discussions with NGOs about our priorities.

The noble Earl, Lord Sandwich, referred to NGOs being an irritant—quite rightly so given that we live in a democracy. I agree with the noble Earl and the right reverend Prelate the Bishop of Southwark that civil society, including faith communities, both in the United Kingdom and in partner countries have an important role to play in supporting the elimination of poverty in a globalising world. The Government channel a substantial proportion of their resources through them. I do not have time to go into the details.

I say to the noble Lord, Lord Freeman, that there has been no change in our policy which prevents DfID providing financial support directly to UK NGOs, but we take a sector-wide approach in our bilateral programmes and work with reforming governments to bring fundamental long-term sustainable change to specific sectors like health or education. I also confirm that projects which seek to empower local communities are in principle eligible for Challenge Fund support.

As to the funding of development education, we believe that if we are to succeed in meeting international development targets we need to build greater awareness and understanding of development issues across the United Kingdom and internationally, and we are working with NGOs on that matter.

The noble Lord, Lord Hannay, and my noble friend Lord Desai spoke of the importance of trade, investment and development. Trade has a vital role to play in helping developing countries to boost their economic growth and generate the resources necessary to reduce poverty. We are working to strengthen the WTO and particularly the voice of developing countries within it. We are also working for the launch of a broad-based trade round at the WTO ministerial conference in November, although noble Lords will be aware that that remains a challenge.

My noble friend Lord Hughes of Woodside referred to Africa, a continent where we are in danger of not meeting the targets. I agree that we need to support the millennium plan for Africa which is about African leaders taking a leadership role in resolving that continent's problems.

I shall write to noble Lords on other questions which I have been unable to cover. For example, the noble Lord, Lord Redesdale, asked me specifically about the CDC; my noble friend Lady Whitaker asked me about long-term impact and security sector reform; and my noble friend Lord Hunt of Chesterton raised the important point about science. I shall of course write on other points which I have omitted to answer.

Parliament's approval of the International Development Bill would send a clear signal to our partners in developing countries in the donor community and within Britain that we are serious about developments and intend to continue to play a major part in tackling the challenge of world poverty.

On Question, Bill read a second time, and committed to a Committee of the Whole House.