HL Deb 17 March 2005 vol 670 cc13-4WS
The Lord President of the Council (Baroness Amos)

My right honourable friend the Secretary of State for International Development has made the following Statement.

I have placed in the Libraries of both Houses a copy of a new UK policy paper, Partnerships for poverty reduction: rethinking conditionality.

The policy has been developed jointly by DfID, the Treasury and the Foreign and Commonwealth Office. It is the result of substantial consultation over the past year with the UK public, NGOs, the World Bank and other donors.

The UK Government believe that an effective aid partnership is based on shared commitment to poverty reduction, human rights and strong financial management. The policy outlines four changes in our approach to conditionality:

Developing Country Ownership—the UK will use aid to support developing countries' own poverty reduction plans—based on solid evidence and wide consultation, and taking account of the views and concerns of poor people. We will not use conditions to influence the policy choices made by partner countries. We will instead agree benchmarks with partners to assess progress in reducing poverty.

Predictability—developing countries can use aid most effectively if they can rely on it as part of their long-term budget plans; for example, to recruit more teachers and health workers, or to put more people on anti-retroviral treatment for HIV/AIDS. The UK will move to long-term aid commitments, and will seek to make aid more predictable by being clear in advance about how much aid will be given and the basis on which funds will be reduced or interrupted; for example, if countries move away from agreed poverty reduction programmes, abuse human rights or misuse the funds through corruption.

Accountability—this changed approach to aid, with transparently agreed benchmarks rather than conditions imposed by donors, means that developing countries and donors will be accountable to each other, and to their own citizens, for their contribution to the shared effort on poverty reduction. The UK aims to increase transparency around the conditions and the decision-making process relating to aid. We will publish our conditions on the DfID website.

Harmonisation—the UK will press the World Bank and the IMF to monitor and streamline their combined terms and conditions, and will work with donors to limit the overall burden of conditions.

The "Make Poverty History" campaign is calling on donors to provide "more and better aid" to help developing countries to achieve the Millennium Development Goals. I see the principles in this paper as central to both objectives. By supporting policy leadership in developing countries, donors will make their aid more effective. And by ensuring that aid is effectively used for reducing poverty, donors will give their own countries confidence that more aid will be worth while.