House of Commons Hansard Debates for 14 Jul 1993

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Debt, Trade and Development

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse) : Madam Speaker has selected the amendment in the name of the Prime Minister.

7.14 pm

Mr. Michael Meacher (Oldham, West) : I beg to move,

That this House, noting that the indebtedness of the Southern world now exceeds £1,000 billion, which both cripples their development and holds back economic growth in the Northern world, and noting the failure of the G7 Summit to agree any new significant programme of debt relief or to ensure any adequate place for developing countries in future world trading patterns via the GATT Uruguay Round, calls upon the Government to prepare a new British and international initiative for debt write-off for the poorest countries, and also to take the lead in setting out a trading framework which will ensure that developing countries can play their full share in the world trading system and will promote environmentally sound development. For the developing countries throughout the world, the G7 summit in Tokyo last week was not merely a disappointment ; it was a cause for real despair. The situation in most of the third world, and certainly the poorest parts of it, is extremely serious and getting worse, not better. The G7 summit merely washed its hands of it. It is not simply that indebtedness in the southern world now exceeds the astronomic level of £1 trillion--£1,000 billion ; it is rather that debt levels are not falling, but increasing at an accelerating rate. According to the World bank, the increase in indebtedness in the past two years alone has been nearly £300 billion, which is equal to almost half Britain's entire gross national product.

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

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

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

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

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd) : It applies to 17 countries. I shall clarify that later.

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

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

As a result of the Finance Act 1986, British taxpayers have been forced to pay huge sums to bail the banks out of a crisis which, frankly, was partly of the banks own making, when not a penny of that money has been passed to third world countries to relieve their debt. We now have the totally indefensible situation in which the Government are heavily subsidising United Kingdom banks against possible debt default, and none of that money is helping the poverty-stricken indebted countries. Yet, as the Minister said in answer to one of my questions on 15 February, from 1987 to 1991 "net payments to United Kingdom banks from developing countries over the last five years"--[ Official Report, 15 February 1993 ; Vol. 219, c. 5- 6. ]

totalled £4.8 billion. That is an absolutely stunning figure. How can the Minister and the Government conceivably justify it? I do not know whether the Minister wishes to intervene to answer that. I do not want to go through what happened the other night, but I shall give him the opportunity to respond if he wishes to do so. He obviously does not wish to respond, but we will expect an answer later.

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

When debt reaches those astronomical levels--and they are astronomical--it is patently unrepayable. Yet for the G7, including Britain, to ignore that not only snuffs out indefinitely the prospects for recovery for much of the southern world but undermines growth prospects and job opportunities for the northern world. For the past four years--I do not think that this statement needs qualification--the Government have done nothing new to deal with the mounting debt catastrophe. In trade, the G7, including Britain, is scarcely serving the third world any better. The protection of

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northern markets by northern countries costs third-world countries an estimated £100 billion a year. That, of course, does not count the damage caused by common agricultural policy food exports being offloaded on to world markets. The sums for trade greatly exceed the total of official aid.

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

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

On aid, the G7 summit agreed that development assistance should be enhanced. I welcome that conclusion, but the Government have made no commitments to respond. I do not think it is difficult to see why. Britain's record on aid--to put it no finer--is thoroughly depressing. Since 1979, Britain's official development assistance has fallen from 0.5 per cent. to 0.3 per cent. of GNP. Last year, the Government spent less than the Development Assistance Committee average and less than half the United Nations target of 0.7 per cent. of GNP. I am well aware that the Government insist that they will hit that target as, I suppose, the English cricket team does, although the latter are more honest about their likelihood of reaching the target. The Government's aid budget is still being cut, and it fell last year. I can give the Minister the figures if he is in any doubt. These are Government figures. Last year, the aid budget fell 4 per cent. in real terms and is now only three-quarters of the level of aid spending in 1979. Worse still, of course, is that the Government are proposing a two-year freeze on aid which even the Overseas Development Administration admits will knock a further £150 million off the aid budget. When the lower purchasing power of the pound after the black Wednesday devaluation is taken into account, it is more probable that the cut will be nearer to £250 million.

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

Mr. Tony Worthington (Clydebank and Milngavie) : What about the past 14 years ?

Mr. Lennox-Boyd : I said since 1987-88.

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Mr. Meacher : What about last year ?

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

Mr. Meacher : Listening to the Minister's weasel words, one might assume that the Government came to power in pieces and that the ODA only gained power in 1987. I remind him that the Government came to power in 1979. Since then there has been a large fall in aid levels of about 17 per cent. in real terms. The Government have done just about everything in the book to downgrade the aid programme. They have pensioned off the Minister with responsibility for aid to another place and have left the hon. Gentleman in charge in this House. After his performance in the debate two evenings ago, I will forbear to comment further as it is all there to read in the record. The aid programme has been almost halved. It is now being frozen. In the next decade, up to 40 per cent. of it will be passed to the European Community's aid programme, which the Government have always said is inferior in quality. Much of the rest is now being transferred from the dirt-poor south to the much better-off eastern Europeon and former Soviet Union countries, and the remainder is subject to an increasingly restrictive political and economic conditionality, which is often counter- productive. Short of demanding that, in future, aid be given only in exchange for donations to the Tory party, I do not see what more the Government could do to downgrade their aid programme.

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

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

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

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

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

7.33 pm

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd) : I beg to move, to leavout from House' to the end of the motion, and to add instead thereof :

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

I try to take the comments of the hon. Member for Oldham, West (Mr. Meacher) seriously, but so often I find that his gift for exaggeration and his thrashing about in so many directions completely destroy the impact of any point he might be trying to make. I shall make a few overall comments, during the course of which I hope to give some reply to the hon. Gentleman's words. As he said, I am the Minister responsible for defending the Government in respect of aid matters. However, as hon. Members know, this debate is not just about aid ; it is very much about trade and debt and about sensible policies in the developing world as well. As it is about trade as well as aid, my hon. Friend the Minister for Trade, who is responsible for these matters, will reply to the debate. He will be able to give the House some enlightenment in addition to my comments about the recent Tokyo summit and the prospects for the GATT round. The Tokyo summit paid very close attention to the problems of the developing world. Quite contrary to the emphasis that thethat he may recognise the force of what I am saying. In any case, I shall illustrate the point by further argument in the course of my remarks. First, I should like to say a few words about the Tokyo breakthrough on trade liberalisation, which is also of great importance to the developing world.

For the past four years the G7 summits, in their communiqu es, have called on the international community to work for the early completion of the Uruguay round.

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

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

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

Mr. John Battle (Leeds, West) : Will the Minister give way?

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

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

Mr. Lennox-Boyd : If Opposition Members truly believe that, it is clear that there is a fundamental divide between us. I utterly reject that sort of thinking. Let me explain why. [Interruption.] I do not simply assert that. If I am given a chance, I will explain why. I reject that thinking because the annual volume of world aid to the developing world is $60 billion. The annual volume of world trade to the developing world is worth three times that amount, $180 billion. The GATT round will increase world trade benefit to the developing world by $90 billion. That is half the trade figure that I just quoted and it represents a gigantic boost to the trading and economic prospects of the third world.

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

Mr. Worthington : Will the Minister give way ?

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Mr. Lennox-Boyd : Yes, but for the last time.

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

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

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

Mr. Worthington : So the answer to my question is no.

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

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

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

Mr. Derek Enright (Hemsworth) : Will the Minister give way?

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

Mr. Enright : Which commodities coming from the least developed countries will benefit from GATT?

Mr. Lennox-Boyd : I intend to say something about the multi-fibre arrangement in a moment.

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

Four essential elements are required to help the poor of the world. As the hon. Member for Oldham, West highlighted, it is important that aid is well targeted. A debt

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strategy is also important. I hope that I shall be able to demonstrate to the House that that strategy was taken a stage further by discussion at Tokyo. The other overwhelmingly important element is trade and investment by other countries in the poor countries. [Interruption.] The figures demonstrate how important that is. That is not my blind assertion--it is backed up by the figures that I gave the House just a few moments ago.

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

Mr. Meacher : About £500 million quid.

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

Mr. Worthington : What about commercial debt?

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

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

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

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

The hon. Member for Oldham, West referred to the southern world. I do not know whether he was referring to sub-Saharan Africa or to the more general region. Sub-Saharan Africa is repaying the IMF more than it receives in new money at the moment. The IMF is not withdrawing from Africa, however, because it plays a vital part in catalysing financial flows from elsewhere. It is

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anxious to help the countries of sub-Sahara to meet their technical and financial needs. The IMF flows are only a small part of the total aid.

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

Mr. Worthington : They cannot be true.

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

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

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

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

Mr. Meacher : Will the Minister give way?

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

The summit considered measures to help eastern and central Europe and the former Soviet Union in their transformation from command to market economies. That matter is of great importance for world stability, which is affected by any instability in the former Soviet Union and eastern and central Europe. The summit welcomed Russia's renewed commitment to economic reform, which has made possible a $1.5 billion drawing facility from the IMF's new arrangement, called the Systemic Transformation Facility. A new programme worth $3 billion to promote privatisation and restructuring was also put in place. As my hon. Friend the Member for Croydon, South (Mr. Ottaway), who takes an interest in population, is in the Chamber, I register the importance of population. It should be registered on every occasion, but not dwelt on as I have already debated it with him. That issue was raised in Tokyo and I am pleased that the importance of helping developing countries to deal with the problems of population growth was recognised. The international conference on population and development taking place in Cairo next year will provide an opportunity to address those issues again.

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

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

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

The problem of sub-Saharan Africa is a cause for concern. The hopes of many African countries have not been realised, but even there progress has been made with countries such as Botswana, Mauritius and Ghana, which reap the benefits of the right policies. I am pleased that Africa's problems were fully recognised at the summit. We now look ahead to the international conference on African development taking place in Tokyo in October, which will consider the problems and solutions in more detail. Africa is a priority in our aid programme and nearly 50 per cent. of our bilateral aid goes there. It is important that developing countries should have the right policies to combine with the liberalisation of trade and the aid that we give them. To be effective, aid must be properly targeted and used in the right context, which means that developing countries must get their policies right. Those policies must support economic growth, encourage enterprise and allow their citizens to play a full part in economic and political life. That is why the focus of UNCED in Rio last year, on a national commitment to sustainable development, was so important.

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

The effectiveness of our aid programme has been widely recognised, even if the hon. Member for Oldham, West is not prepared to give it that credit. Elements of quality include its focus on the poorest : 80 per cent. of bilateral aid goes to countries with per capita incomes of less than $700

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a year-- [Interruption.] I cannot take sedentary interventions the whole time. I have responded to many of them

Dr. Lynne Jones (Birmingham, Selly Oak) : Will the Minister give way?

Mr. Lennox-Boyd : No, I cannot allow any more interventions. I have given way four or five times and I shall not do so again. Our programme is highly concessional. All new aid to the poorest is on grant terms, which avoids adding to their debt burden. We have the most rigorous criteria-- economic, technical and environmental--to ensure the quality of the programmes and projects that we support. Our aid is well targeted on areas of key relevance to the central aim of sustainable development, as was recognised at UNCED.

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

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

Mr. Meacher : Such as?

Mr. Lennox-Boyd : I will tell the hon. Gentleman. As I said, the economic summit is not a decision-making organisation, but the Prime Minister secured agreement on the call to the Paris Club to reconsider introducing improved debt reduction terms for those countries in greatest need. The hon. Member for Oldham, West states in his motion that the G7 summit failed

"to agree any new significant programme of debt relief". He is wrong. He goes on to state that the G7 summit failed "to ensure any adequate place for developing countries in future world trading patterns via the GATT Uruguay Round".

Developing countries stand to gain from increased and fairer flows of trade, which will result from the Uruguay round. The hon. Member further states that the Government should

"prepare a new British and international initiative for debt write-off for the poorest countries".

We have no need for new initiatives as we have the Trinidad terms--the initiative launched by the Prime Minister. The rest of the world is beginning to accept the arguments that we have deployed over the years for an extension of the Trinidad terms. We are taking the initiative. We have pressed for that initiative. The hon. Member's motion is absurd.

Mr. Meacher : Will the hon. Gentleman give way?

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