House of Commons Hansard Debates for 19 Jun 1995

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We routinely finance local costs for projects, such as many of those in the social sectors, which depend on such funding. Where Britain is not a competitive supplier, we are perfectly willing to purchase from third countries. But the Government believe that it is right and proper that, until such time as the donor community as a whole unties bilateral aid, Britain should similarly give first crack to its own firms and suppliers.

The Government wish to see the international aid agencies to which we contribute address the problem of poverty following the same principles that I have outlined, and to do so with increased efficiency. In that context, the reform agenda set out by the Halifax summit is of major significance. As my right hon. Friend the Prime Minister said in his statement to the House, we have now drawn up a series of specific proposals to strengthen the Bretton Woods institutions and the United Nations. Revitalised international institutions will play a vital role in tackling poverty and creating the conditions for sustained development.

We agreed in particular to encourage better use of all existing World bank and International Monetary Fund resources, to tackle the substantial burden of multilateral debt faced by some of the world's poorest countries. The United Kingdom has taken a lead in that area in pressing for action, and reducing the debt burden will make a major contribution to alleviating poverty.

The number of people in abject poverty is a challenge to us all. Simplistic solutions do not work, and merely throwing money at problems is always ineffective. Time and again we have seen that sustained reductions in poverty come from broad-based growth grounded on the steady application of sound economic policies, better government and investment in people. Success does not come instantly. Aid donors can speed the process by facilitating reforms and strengthening programmes to alleviate poverty. Britain has demonstrated time and again its capacity to provide finance and know-how in ways that contribute to that goal.

For me, the speech of the hon. Member for Eccles was rather like flicking through an old album of yellowing sepia-tinted photographs of a bygone era of Stalinist neo-colonialism: looking at well-meaning figures facing the camera, staring life straight--if unseeingly--in the face. The poorer countries do not want hand-wringing from the Labour party. They want concrete measures to help them to become more self-reliant.

The Government have led the way and transformed the global aid debate. First, we have led the drive for free trade and trade access. We must never forget that trade brings three times as much revenue to the developing world as aid. Secondly, the Prime Minister has consistently led the way on debt relief with the original Trinidad terms and their subsequent extension through the Paris Club. Thirdly, we have introduced the idea of good government, using aid to promote sensible economic policies, democratic institutions, the rule of law and respect for human rights. We have pioneered the use of dedicated technical aid through our know-how funds.

The Labour party is a very long way behind the game. If it has begun to shift away from the old left-wing orthodoxy of never criticising third- world Governments, I welcome that. It still puts all the emphasis on the symbolism of large transfer payments instead of looking

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at how aid resources are used. The objective must be not to make ourselves feel good, but to help the populations of the world's poorest countries.

Today's debate is an opportunity for Opposition Members to posture, as their spokesmen do every day in the media with every conceivable pressure group, irrespective of whether their sums, if they have done them at all, add up. Labour's commitment to reach the United Nations target of 0.7 per cent. of GNP does not add up to a row of beans unless Labour is prepared to put a precise time scale on it and say how it will finance it. Will it be by higher taxes or by cuts in education, health or social security funding? If so, I am sure that Labour Members will have cleared their statements with the shadow Chancellor, and we shall note them very carefully.

Such pledges are an irrelevance unless they form part of a strategy for economic growth that will generate new economic resources. Thanks to Conservative policies, Britain's economic performance is second to none in Europe and is set to remain that way. That is the key to a serious long- term aid commitment.

I invite the House to reject Labour's irresponsible motion and to support our amendment.

8.13 pm

Mrs. Gwyneth Dunwoody (Crewe and Nantwich): A group of women from all over the Commonwealth came together in the House last week. They were members of the Commonwealth Countries League. Their patron is our most honoured Speaker and their function is to raise money for the education of women throughout the Commonwealth. They do so not in a showy way but in a consistent attempt throughout the year to raise cash. A small group of them do all the administration and take control of the money, which is sent to some Asian countries and, largely, to Africa.

I was able to tell that group of women that, a short time previously, I had been honoured to go to Ghana with a delegation under the leadership of the right hon. Member for Conwy (Sir W. Roberts). He distinguished himself with that wonderful Welsh hwyl that made him dearly loved throughout the country and his ability to recognise instantly and identify with the problems that we met. When I hear some of the undoubtedly very uncomfortable cliche s that Ministers trot out from the Dispatch Box, I am reminded of the reality of life for many women and children in Africa: the lack of decent clean water and the shortage of education and health provision. Indeed, in some Commonwealth countries there has been a reversal of existing health programmes so that people's access to clinics and to the support that they had had through trained village nurses has been reduced rather than increased.

When the Government know that the money committed by the United Kingdom is becoming less every year, I wonder that Ministers can still seriously talk about our reputation, experience and commitment to overseas aid. In reality, we are always seeking ways of expanding our commercial opportunities. While there is nothing wrong in that, it is not what aid is for. It does not improve the income or opportunities of many of the people who are most in need. Moreover, it is clear that the Government's commitment to aid and trade is positively damaging some of the things that the House regards as most important.

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I wish to deal briefly with the Government's commitments to Ghana in respect of supporting the electoral commission as it illustrates the problems that we have. We were told in Ghana that the electoral commission, which is independent of the Government, is seeking to set out in considerable detail the new registers for the coming election. It is working on an extremely tight timetable. If it fails to do the job efficiently, Ghana's belief in democracy will be severely damaged. It is therefore very important that the electoral commission should be given every known support.

The Government were therefore prepared to look at the available machinery and the modern equipment that would enable the electoral commission to produce an accurate electoral register containing the names of all the people who needed to vote. That is tremendously important because, as we were told, large numbers of people did not vote in the last general election because they believed that there were problems with the existing machinery.

The fact that people boycotted those elections produced a Parliament which, although it impressed us with its vigour and its intent efficiently to bring democracy once again to the parliamentary system, clearly left some large sections of the community in Ghana feeling that they were not properly represented. It is therefore vital that we help the electoral commission to get the whole business of preparing its register right. If that fails, the whole system will be blown out of the water, not least because people will not believe that there is a genuine, accurate register. Hon. Members know how important it is that such elementary machinery should be available. I have no intention of naming names, but a British company did a great deal of development work with the electoral commission and said that it thought that it was capable of producing equipment which would not only make it possible to scan at tremendous speed the relevant information but to produce detailed and positive benefits. Certainly, that would involve a great deal of expense but it would produce a reliable and efficient register. It worked with the director of the electoral commission over a long period on the sort of information and the general level of expertise that was needed, using a system which was reasonably well known in Government circles in Ghana because it had been used by some people in education. Then, apparently, London determined that everything should be put out to open tender, and the contract went not to the people who had done the development work but to someone else, using a different system which is probably not compatible and certainly has not been used in that context and that manner. I am not prepared to argue the rights and wrongs of whether one unknown system will be any better than another which is equally unknown, but I am alarmed at the political implications of taking the wrong decision.

If the register is not correct, Ghana--the one west African country capable of producing stable parliamentary democracy--will find that democracy is put at risk because the voters will think that the results are not genuine. There can be nothing more damaging than the voters believing, for one reason or another, that the register is not correct.

When one realises that there is no register of deaths in Ghana, the sort of problems that the electoral commission will face become apparent. The commission was not allowed to accept the carefully noted information kept by

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traditional chiefs, because the law would not allow it. The inflexible attitude in London is causing major problems. I do not expect Ministers to comment tonight, but I ask them to think seriously about the matter and to be prepared, even at this late stage, to consider the alternatives.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tony Baldry): It is not clear whether thehon. Lady is saying that such projects should not be put out to competitive tender. She has been in Ghana recently--I understand that she and others are coming to see me about that tomorrow--so she must appreciate that there is no question of the ODA ever seeking to impose a particular solution on another country with regard to any aid project. Any aid that we give is given co- operatively and with the full support of the country receiving it. The project to which the hon. Lady refers will only and could only go ahead with the full support of the electoral commission in Ghana. Without that support, there would be no point in proceeding.

Mrs. Dunwoody: That would be very reassuring if the Minister did not know that the only way that the equipment is ever going to be paid for is through tied British aid. While I am happy to have his assurance that nothing will be foisted on the electoral commission, I have to ask him to think again, even if not tonight, because if we get it wrong the results could be dangerous.

One of the problems is that the Government are not clear about their own attitude to overseas aid. It is certainly not clear to us whether they have the commitment to the African continent that they should have. I do not know whether this is a correct but only this weekend I read that the Foreign Secretary said:

"The commitments we face to multilateral agencies--notably the programmes of the European Community--are reducing what we have available for aid that is recognisably British."

Was he saying that our European commitments are leading to difficulties? If so, and if he is saying that there is pressure on the ODA to reduce its trained staff, the programmes that it is undertaking or the various support systems that it uses at times of emergency, the House has reason to be seriously worried.

I was approached by a member of the medical profession when there were considerable difficulties in Rwanda. It was pointed out to me that this country had large amounts of sterilisation equipment and straightforward medical aids for barrier nursing which could have been transported by the planeload to those at risk from hepatitis and other diseases, but that we were not transporting it in the amounts or with the speed and urgency necessary to turn the situation around.

Barrier nursing is one way in which we can stop the spread of dangerous diseases among many Africans. That is doubly true of HIV. We know that many AIDS patients are removed from hospital by their families, who have no clear idea of how disease is transmitted and certainly no clear idea of how to protect themselves. That in itself can lead to more infection.

Mr. Baldry: The Government and the British people have given more than £90 million of relief to Rwanda to help with its recent disaster. How much more does the hon. Lady think should have been given? Is there 1p of that £90 million that she thinks has been spent on a project that was not worth while?

Mrs. Dunwoody: The Minister was clearly not listening. I am not responsible for the overseas aid budget.

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The Conservative Government are responsible for the budget, and they are spending less than they were. They have access to medical equipment that could be sent by the planeload. If the Minister wants to know whether I think that, in an emergency, we should send immediate medical support and aid, the answer is that I do. If he wants to know whether I think that we should commit more money than we have in the past, I do. If he wants to know whether that is a generally held view among members of his party as well as mine, I can tell him that it is. If he thinks that he has scored some clever political point, I have to disabuse him of that notion.

Many people outside the House, of every religion and type, understand what we could do if we had the necessary commitment and political will. They also understand that only in the House is overseas aid regarded as one of the least important topics. It is debated only in Opposition time because it is not convenient for the Government to discuss in any detail what we are doing with our existing aid and trade budget.

I do not have the great and unalloyed admiration for the European aid projects expressed by some of my colleagues. I served on the African, Caribbean and Pacific countries committee for four and a half years. I believe that the inability to introduce flexible banana quotas between one country and another is contributing to the poverty of the West Indies right now. The inability of the British Government to push through some protective measures is revealed every time one goes into a supermarket and sees nothing but German and South American bananas on display rather than those from Commonwealth supporters.

I believe that institutions are becoming so rigid that they are not producing the necessary results in terms of their own development programmes. The Government's apparent ambivalence is probably a reflection of the fact that they are now waking up to the reality of what is happening in the Community. However, if we are not going to use those mechanisms, we must expand what we are doing bilaterally and put a great deal more effort into Africa and accept that that is where the major problems lie. We must also be genuinely prepared to tackle at source the matters with which we can deal, and deal with them with the expertise that we have but which we sometimes seem loth to demonstrate.

8.28 pm

Mr. Jim Lester (Broxtowe): I always enjoy speaking in such debates. I have great respect for the hon. Member for Eccles (Miss Lestor), because I remember that, in a previous incarnation, she resigned her position over the reduction if the previous Labour Government's aid budget in 1976.

Miss Lestor: I must correct the hon. Gentleman--I hate to do so, because I am being flattered. In fact, I resigned because of the cuts in nursery school education. There would have been no need to resign over the overseas budget, because it increased throughout the life of the previous Labour Government.

Mr. Lester: It was reduced by, I think, 50 per cent. in 1976 according to my figures, but that is in the past.

One gets the impression that the motion is a scattershot motion that nitpicks about everything. The only line with which I agree is that which states:

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"one billion people throughout the world live in abject poverty". During the years that I have been in the House, I think that I have visited most of the poorest countries in both south-east Asia and Africa. I have seen changes for the better as a result of our aid programme. I am second to none in my belief that the transfer of resources, of which aid is one important element, is essential as a moral imperative and is in Britain's self-interest--for those who consider matters only in terms of self-interest--in terms of the development of our economy as a major trading nation and of the movement of people.

It is often forgotten that television works in two ways. We see situations in the rest of the world that cause our constituents and ourselves great concern, but, equally, people see our world. Having just been to the Caribbean with the Select Committee on Foreign Affairs, one was conscious of the fact that, in every island one went to, people complained about the endless diet of American television, which was the only thing they could get. It shows them a level of affluence and creates pressures that, inevitably, people will want to remove if their position in their country is not likely to improve. We have always had the argument about the level of aid. My right hon. Friend the Minister mentioned one or two countries that have reduced their aid budget. In the present world situation, according to the latest figures from 1992-93, the British Government have held, and in fact increased, their budget. That is a matter for congratulation, not condemnation.

I say this with no pleasure. Looking through, one finds that aid has been reduced by Austria, Belgium, Canada, Finland, France, Germany, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland and, most serious of all, the United States of America. Britain is one of the four countries in the group that increased its budget. That should be a matter for congratulation, not condemnation.

We need to ensure that some colleagues and others do not latch on to the idea that reducing the aid budget is a good idea. Having just come back from Washington, which I visited before we went to the Caribbean, I am deeply concerned about the discussions on Capitol hill about what overseas aid should be. There is real concern among American officials that, if the present discussions come through, they will not be able to claim that they have an aid budget of any description.

The hon. Member for Eccles mentioned aid and trade provision, and the Select Committee report in 1987. I happened to be on the Committee at the time and a party to that report. We have always agonised about aid and trade, the way it should be organised and whose budget it should come from. We are about right in terms of the 5 per cent. figure that we have reached.

It is difficult to know, but I suspect that, if they were honest, Opposition Members would admit that, if a constituency company told them that it had won a contract, wherever in the world, but that lack of British Government support, as opposed to support by the French, German or Italian Governments, had lost it the order and therefore it could not succeed, those Members would go to the Minister with that company and argue that we should at least have a same level of support as other companies in other parts of world. It is a bit of a

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double-take to argue against aid and trade provision but then not to accept the consequences in terms of international competition. I have always thought that aid and trade provision should be argued for by the Department of Trade and Industry, but we cannot honour the general agreement on tariffs and trade rules if we do it that way. The Select Committee on Foreign Affairs felt that it was important to maintain this minimal aid and trade provision. A small proportion of our total overseas aid budget, which again was not mentioned by Opposition Members, is basically given on grant terms. I think that, in Britain, a higher proportion of the aid budget is given as a straight grant, which affects neither loan nor any other support, than in any other country.

Brief mention has been made of the Pergau dam. Again, as someone who has studied it carefully on the Select Committee, I believe that it is a grave mistake not to recognise that electricity is an important element in poverty relief. Places such as north Malaysia that have no electricity, and villages that cannot operate after dark or that do not have any basic machinery, should all be taken into account. I do not want to go further down that road, because others want to speak, and I want to talk about other issues.

The hon. Member for Eccles mentioned debt, as did my right hon. Friend the Minister. I genuinely cannot understand why the Opposition cannot produce some enthusiasm for the British Government on the issue of debt. Of all countries in the world, we have given the foremost lead.

When he was Chancellor of the Exchequer, the Prime Minister started with the Trinidad terms. He pushed it again at Naples. Again, his statement on the Halifax summit shows that he is one of the front runners, along with the Chancellor of the Exchequer, who used the Commonwealth Finance Ministers meeting to put forward the terms of selling International Monetary Fund gold, investing it and writing off the debt of sub-Saharan Africa. He spoke out clearly, and, for once, Oxfam was thoroughly delighted because that was its policy; it is not often that it feels that a Chancellor of the Exchequer argues for its policy, but he believes it strongly, and he argued for it. I understand from a brief conversation about Halifax that we were the front runners in pushing other countries--we must act in partnership--to move forward. It is not the British Government who are resisting the sale of gold and the investment of that money; at least three other partners continue to do so. The British Government and the British Prime Minister are trying the hardest to bring that policy about by one means and another.

We all accept that the debt level of some sub-Saharan African countries is unacceptable. The all-party group on overseas development produced a report on that issue, to which Opposition Members were party on an even basis. We are clear on what needs to be done and how it needs to be done, but one must move along with other countries; we cannot do it single-handed.

We have also led the way in debt reduction and on grant terms. I occasionally wonder whether some faint words of praise from the Opposition for the way in which the Government have given the lead on this issue might be helpful and encouraging in terms of both the Prime

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Minister and Chancellor of the Exchequer continuing their excellent work, which is widely recognised by third-world countries, about which we all share a concern.

Recently, the hon. Member for Eccles and I were signatories of a letter to the World bank over its attitude on poverty relief. In Washington, I saw the figures of the signatories from different Parliaments when that letter was presented. It would not surprise Opposition Members--it might, judging from the number of people listening to the debate--that the United Kingdom Parliament had by far the most people signing that letter.

Miss Lestor: It was all the work we did in getting the signatures.

Mr. Lester: From memory, I believe that we got more than 337 signatures, and that will have an effect.

Mr. William Cash (Stafford): On the question of the World bank, does my hon. Friend, who is a great expert in these matters and is recognised in the House as such, realise that it may be a good idea to change the charter of the World bank to ensure that the arrangements for debt reduction can be reflected not merely in what we want to do but in the provisions of the charter? I understand that Mr. Cadmessus is somewhat sympathetic to that point of view. Would my hon. Friend want to give him every encouragement, and would he want the Government to give every encouragement to a change in the charter, so that we can achieve something rather than merely say that we want it?

Mr. Lester: As I said earlier in relation to debt reduction, one must recognise that one must work with many partners in these issues. At Halifax, we have reinforced the fact, as the Prime Minister said today, that we need to look hard at the Bretton Woods institutions. People have all sorts of ideas about how they can be improved, but the real point is that the only way in which we can improve them is to carry our other major donors with us.

The hon. Member for Southampton, Itchen (Mr. Denham) and I attended a hearing on Capitol hill on behalf of the all-party group on overseas development, in which we had before us the deputy both of the IMF and the World bank. That was an international effort to show those eminent and important people the depth of concern that many of us have about the level of poverty and the way in which World bank loans can be used.

Over recent years, we have seen a total change in the World bank's attitude. One change is for the bank to recruit some of its most persistent critics from the World Development Movement, from Oxfam and from some of the non-governmental organisations in this country to advise how it can reach and involve the people who share the greatest concern.

The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) mentioned the Commonwealth and the Commonwealth ladies. Britain gives a unique input. We cannot do any other, because we are unique in having the Commonwealth, with 51 nations at all levels of development. At any Commonwealth gathering, we learn directly from people we know and trust precisely what the individual problems are.

I have just been to Jamaica, Barbados and St. Lucia, three islands in the West Indies which are at quite different stages of development-- [Hon. Members:--

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"Bananas."] I learned quite a lot about bananas, and I now know that there are big differences in the views on bananas held in the Windward Islands, in St. Lucia and in Jamaica. There is not necessarily an overall solution for helping each country. Having the Commonwealth makes us unique in the world, and therefore able to make a much greater contribution in aid and development.

We are also unique in having the Commonwealth Development Corporation. The agencies that are available to other countries must envy us the CDC. It has £1.5 billion of investment, 40 per cent. of which is in sub-Saharan Africa. I suspect that most hon. Members here have seen Commonwealth Development Corporation schemes in countries that would otherwise get no inward investment.

The corporation's schemes prove that one can have a successful, profitable investment in countries that would not attract private investment. The corporation can give the lead in how to invest, and because it has extended terms and does not demand immediate commercial returns, it can encourage the people in those countries and those who work on the projects to see that they can make a real success of a whole range of issues.

There is an endless debate about how best to focus one's aid programme. The Labour party has focused on personal services, which are important. However, time after time, one has seen schemes in different countries, such as health schemes in Tanzania and in Ethiopia, which are not sustainable by the country's economy once the aid programme has finished. One has seen operating theatres and drug schemes that cannot be sustained unless one continuously gives aid. We must strike a balance between direct personal services which can be sustained by the country concerned--that does not necessarily mean building a western-type hospital--and infrastructure which, in my judgment, is even more important in enabling a country to produce for itself.

In Kenya, a road that many who work with the aid budget would argue was not poverty relief has linked a series of villages and farms to the airport in Nairobi. That has resulted in us being able to get Kenyan beans at any time from any supermarket in Britain. The Kenyans have been able to utilise their climate for a wider development of agriculture, to their overall benefit.

Anyone who knows Mozambique, for which we cannot claim any responsibility as we were not the colonial power, knows that infrastructure is essential. One can waste so many resources in trying to get from A to B. One cannot go from the north to the south in Mozambique without taking to the sea, taking to the air or driving through three other countries. It is an important element of poverty relief to look at how one can design a basic economy that enables people to succeed.

Sub-Saharan African countries are often impoverished because of their inability to trade with one another. Apart from Nigeria and Ethiopia, most of the 55 countries in Africa have small populations and cover huge areas. Most have a distinct inability to trade with the others. The overall level of trade between one sub-Saharan African country and the others is about 5 per cent., whereas in this country and the rest of Europe, the equivalent figure is nearer 70 per cent.

We need to look critically not just at the micro-level of personal services, but at the macro-level, and at how one develops an infrastructure which allows sub-Saharan

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Africa, about which we all care because it is the worst part of the world and the one that is slipping back, to develop. We need to balance personal services and the sustainability and development of the economy in which we are interested, so that the people can re-direct their own resources, having got the debt relief. From our know-how fund to eastern Europe, we can see that, once one has the infrastructure, the transfer of know-how can be enormously beneficial and easy, thus giving a great deal of added value for a relatively small amount. Harare in Zimbabwe is twinned with my town, and as a result, we are able to give direct technical assistance in all sorts of ways which produces a higher standard for Harare, with relative ease. All those issues need to be looked at carefully. The hon. Member for Eccles also did not mention our reputation for disaster relief. This country gives a higher proportion of its aid in disaster relief than other countries do, mainly because we are good at it. We can act quickly and effectively in all sorts of situations.

Last month, we gave assistance for fire victims in Burma, food distribution to survivors of a volcanic eruption in Cape Verde, flood relief in India, and even 15,000 goats for the agricultural rehabilitation programme in Eritrea, a country that has caused us concern for a long time. We should give credit to the Overseas Development Administration for its disaster relief programme, and we should recognise, yet again, that we give a lead. We should be proud of that, and should not niggle about it.

Hon. Members have referred to the proportion of aid that goes to the poorest countries. Over the years, it is remarkable how aid has helped the development of countries that have the potential to become countries that can give. I am sure that the aid we are currently giving to Vietnam and Cambodia will fall into that category. The combined resources of the 15 countries of the European Union, through the European development fund, can do a great deal more in terms of infrastructure than can be done by 15 bilateral programmes. Again, Britain gives a lead, because of its experience and because of its links with the Commonwealth, in directing the aid programme and in giving an input of knowledge that will, one hopes, make the programme better.

The Select Committee on Foreign Affairs produced a report on the balance of European aid, multilateral aid and bilateral aid. Of course we support the quality of our bilateral aid programme, but we should realise that it is essential that our Ministers should ensure that the money that goes to the European Union has a similar, but greater, effect, because there is an accumulation of funds from 15 countries. Exactly the same point applies in the United Nations, where we are among the strongest supporters of the multilateral programmes for which the UN is responsible.

Britain gives a lead in all these issues, and we shall continue to give a lead. Many of us recognise that the transfer of resources and aid is an essential element of Britain's leadership and international position. We shall be vigilant in ensuring that the British Government, whichever party is in power, maintain an effective and good aid programme. To many of us, that programme has great significance, and we have devoted a great deal of our parliamentary careers to supporting it.

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8.48 pm

Mr. Matthew Taylor (Truro): This is an important and welcome debate, which has been treated seriously, as befits a subject addressing the needs of a very large number of people across the world. In every speech so far, we have heard that more than 1 billion people in the third world live in absolute poverty, but we should not forget that 1.5 billion people lack access to health care, and 1.75 billion people are without clean water.

Those figures illustrate the depth of poverty we need to address in our policies on overseas aid. We must remember, however, that behind those unimaginably vast figures lie individual people--families, children, men and women with the same human feelings as our constituents and our own family members. We have to hold on to that thought in addressing these issues, because, in a way, the very large figures that we put about almost mask the reality of what happens to those individuals in their own communities.

It has been said that, although we do what we can to alleviate such abject poverty, at the end of the day it is not our problem. I suspect that all hon. Members have heard constituents--albeit a minority of them--make that case. It is simply not true, and I shall give three examples why.

First, to put it in brutal economic terms, poor people cannot provide new markets for our goods. Secondly, third-world problems also feed first-world problems. For example, I do not believe that we can expect a country such as Colombia to be able to stop effectively the narcotics trade when its farmers cannot afford to grow other crops and the state cannot afford to tackle a multi-million--indeed, multi-billion--pound international trade.

Thirdly, poverty breeds war. Increasingly in the modern world, war can touch all of us economically, but--potentially even more important--it can also touch us through the use of nuclear, chemical or biological weaponry. Yet it remains the case that the struggle of developing countries to overcome such problems is too often overwhelmed by the struggle to repay debt to the developed world, and to maintain essential trade.

So overseas aid is crucial. Indeed, it would be better if we talked about it as overseas investment in the future--an investment to turn countries round, to our mutual advantage--and not as aid which, in some sense, is charitable and which we could withdraw if we so chose. Overseas aid is fundamental to the interests of this country as well as crucial to the fight against poverty.

Appropriately and sensitively targeted and delivered aid, often through non -governmental organisations, and always--I hope--delivered in co-operation with the people in need, can be of substantial benefit. As such, the British public have again and again showed their support for helping the world's poor.

The public's generous response to famine and poverty has been contrasted too often, although not always--I do not deny that the Government have measures of which they can be proud and it would be foolish and unhelpful to deny that--with the self-interested attitudes of the UK Government, which have undermined the overseas aid effort. Britain's record of overseas aid has not been the endless story of good news that Ministers have suggested.

The truth is that neither Conservative nor Labour Governments have kept their commitment to move towards the United Nations target of 0.7 per cent. of gross

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national product for official development assistance. Instead, we have consistently managed a figure lower than the European Union average and, in 1993, British aid amounted to just 0.28 per cent. of GNP.

I say to Ministers--and, indeed, to the Labour Front-Bench team--that, if they have no intention of delivering the commitment, they should have the honesty to say so, and the courage to explain it. I do not think that it does anybody any good if it is a mythical target that is so far from being achieved, and which is utterly impractical, given present Government policy and decisions in the spending round. It certainly does not help to feed those people who need feeding. While the figures are important, I agree with the Minister that the quality as much as the quantity of aid is crucial. I want to concentrate on the effectiveness of British aid.

Too often, Governments, especially this Government, have elevated commercial objectives above humanitarian and development objectives: first, by tying two thirds of aid to purchases from Britain; secondly, by failing to target aid sufficiently on the poorest nations; thirdly, by linking aid to arms purchases and failing to encourage good Government; fourthly, by failing to promote sustainable development. I shall illustrate why I believe that that is the case. There is plenty of evidence to support those claims.

Much British aid is tied to purchases from Britain. The OECD analysis in 1991 showed that 72 per cent. of British aid was tied, compared to an international average of 33 per cent. Similarly, in 1992, 67 per cent. of British bilateral aid was tied, compared to an international average of 40 per cent. In being tied to purchases that the developing country often does not need--indeed, sometimes has no use for--such assistance fails to reduce poverty or promote sustainable development.

Mr. Baldry rose --

Mr. Taylor: I shall develop that point and give way to the Minister in a moment. I wanted to refer to the 1993 OECD report, which said:

"tied aid procurement can mean that recipients pay on average 15 per cent. above prevailing prices for goods that may not correspond to development priorities."

Mr. Baldry: I was wondering whether the hon. Gentleman could cite any overseas development project announced in the past year which he thinks should not have been allowed. Will he tell the House, and make it clear which projects the ODA has taken forward in the past year and he feels should not have been taken forward?

Mr. Taylor: The first part of my answer to the Minister is that I am looking at the history of this Government. If he is conceding that mistakes have been made in the past and that errors are now being corrected, I would agree with him. As the Minister knows, the essential issue is the competing options, and to give the Minister the answer that he is asking for would be to say that one project in itself had no value.

That may not be the case, but there are opportunities to make still better use of resources, in particular for aid to be targeted at local communities --for example, to support non-governmental organisations' pioneering work in

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helping women within those communities. They bear many of the problems to which I have referred in developing countries.

Lady Olga Maitland (Sutton and Cheam): The hon. Gentleman has cast a gross slur on British companies, which have done such useful and excellent value-for-money work in third-world countries. It is incumbent upon him to state the exact name of a company that he believes is ripping off a third- world country. I do not accept that he could name one.

Mr. Taylor: If the hon. Lady is suggesting that aid and trade have never been abused, I cite the examples of helicopters sold to India and the Pergau dam. The simple fact is that there are plenty of such examples, but I will not bore the House with them. The hon. Lady has missed the point if she thinks that I am attacking British companies, which understandably take advantage of whatever opportunities they can. I am attacking Government policy. The hon. Lady should understand that.

The aid and trade provision, which is part of our aid programme, was established under the previous Labour Government. It gives a small number of British companies subsidies to compete for contracts in developing countries. That provision has been particularly destructive. ATP accounted for 9 per cent. of Britain's bilateral aid in 1993 and lay behind the Pergau dam scandal. That scandal exposed the fundamental problem with ATP, because it is dominated by the needs of British business, but funded from the ODA budget. That reveals an internal conflict. The needs of British business should be removed from the ODA budget.

Tying aid to trade does not necessarily benefit either the donor or even the recipient economy. The "ATP synthesis evaluation study", conducted by the ODA and the Department of Trade and Industry, found that

"none of the projects evaluated in 1990 benefitted the poorest social groups directly to any great extent."

That is my point. Those projects may have provided some benefits, but they were not directed at those most in need, who were not placed high enough up the priority scale.

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