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Clare Short: I am open to any views and I respect people who disagree with me, but it was clear from his intervention that the hon. Member for Reigate (Mr. Blunt) had not listened to my speech, and that was irritating. He was telling me that I had not said things that were clearly there and on the record.
Mr. Faber: I thank the Secretary of State. We will leave the matter there.
In a typically informed speech, my hon. Friend the Member for Hertford and Stortford (Mr. Wells) made a passionate defence of free trade; it is the surest way to help the poorest countries to develop and prosper. Trade brings in three times more money than aid alone and it is therefore essential that the United Kingdom continues to play a leading role in international efforts to bring down trade barriers.
There is no doubt that, in recent decades, tariffs have decreased and trade has increased accordingly, bringing prosperity to many developing countries; but other forms of protectionism have increased, even in supposed free trade zones such as the European Union and the North American Free Trade Agreement area. If we are genuinely to help less well-off countries to develop, we must continue vigorously to resist protectionist moves by other Governments to shield their national industries from foreign competition. I hope that the Minister will confirm that it is the Government's intention to achieve free trade by 2020.
There is a moral argument for being involved in the international development effort, but it also serves our own interests. The quality of that aid is as important as the quantity. Aid given to the wrong regimes can simply be a way of transferring money from poor people in rich countries to rich people in poor countries. It should therefore be focused on countries with a genuine commitment to democracy and to market economics; indeed, the two are closely linked.
The prospects for economic reform and for development more generally will always be poor if Governments do not meet basic standards of popular consent, accountability and competence. I hope that the Minister will confirm that we need to create an enabling climate that promotes a partnership between the Governments of the donor countries and those of the developing countries that they are seeking to help.
The importance of the voluntary sector has been stressed this evening. Non-governmental organisations can often deliver aid more effectively, efficiently and imaginatively than Government institutions. They give
the taxpayer good value for money and are less likely to use the resources given to them for other purposes. We have heard tributes to many such organisations today, and I should like to mention one to which the Under-Secretary drew attention last week--the Grameen bank in Bangladesh, which specialises in providing small loans to women. As he pointed out last week, the loans are, by and large, repaid. The work of the bank, and other similar organisations, is invaluable. I know a great deal about it from the strong support given to such organisations by local aid groups in my constituency.
Many of the people who run such organisations are volunteers and have a high level of commitment and excellent local knowledge, as my hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe) described. I hope that the Government will give them the help and support they deserve.
We have heard a lot from Labour Members about the record of the previous Government on overseas aid. Let us be clear--I believe that we have a record of which we can be rightly and justifiably proud. Britain gives generously to support overseas development. In 1996-97, we were the sixth largest donor in the world, with an overseas aid budget of £2.2 billion. The United Kingdom spent 0.27 per cent. of its gross domestic product on Government aid, above the average of 0.25 per cent. for aid-giving countries. When that is added to private sector money, the United Kingdom's record is even more impressive--1.38 per cent. of gross national product. We spend more as a percentage of GDP on private and public development aid than any country bar the Netherlands. What is more, the quality of aid is universally reckoned to be high, as has been recognised by Organisation for Economic Co-operation and Development reports.
Labour Members have made much of their party's commitment to meeting the target set by the UN that developed countries should spend 0.7 per cent. of GDP on overseas aid. Can the Under-Secretary tell us the timetable that the Government have set for that? In a debate last year in which I took part, Labour motion's pledged to make "steady and sustainable progress" towards that target, but as my hon. Friend the Member for Wycombe (Sir R. Whitney) said, that commitment seems to have vanished. As recently as 1992, Labour's election manifesto pledged to achieve the target within five years. Why are the Government now refusing to set a timetable?
It has been argued by one or two hon. Members that debt owed by third-world countries should be written off. We believe such a policy to be misguided. It would not encourage those countries to adopt sensible or sustainable economic policies or convince them of the need to push through market reforms. It would send the wrong message to a number of countries with abysmal human rights records, and could cost the taxpayer millions of pounds. It is for those reasons that we do not support the Jubilee 2000 initiative--well intentioned though it is.
The solution to the problem of third-world debt is twofold. First, we need international action to help countries service and reduce their debt. In office, we cancelled £1 billion of debt owed by the poorest countries. That was the single biggest contribution to resolving the debt crisis. In December last year,
Britain pledged up to £250 million to help some of Africa's poorest and most indebted countries. My right hon. Friend the Member for Huntingdon (Mr. Major) put this issue at the top of the international agenda when he set out the Trinidad terms in 1990--as the Secretary of State generously acknowledged.
Secondly, we need action by the countries themselves to ensure that they live within their means. That is why we have devoted great energy to improving the quality of public spending programmes in poor countries. Over time, that will raise the quality of services provided by those countries to poorer people.
My hon. Friend the Member for Arundel and South Downs (Mr. Flight) spoke of the need for fiscal rectitude--low taxation, low inflation and tightly controlled Government spending--to create the right conditions for economic growth. These are the policies that the IMF has done much to promote and, as my right hon. Friend the Member for Eddisbury said, the Secretary of State has been quick to attack. The policies have brought prosperity to the developed world and will bring prosperity to the developing world.
The Government have made much of their review of the Department of International Development, but it is difficult to see what will be reviewed, given the fact that--as we have heard from several hon. Members this evening--such a review was carried out three years ago. Where will the review of defence spending leave our emergency aid operations? Britain's armed forces have contributed to disaster relief operations around the world. They have saved thousands of lives. I can do no better than to add nothing to the excellent speech of my hon. Friend the Member for Mid-Sussex (Mr. Soames). As he reminded us, at this very moment HMS Liverpool is helping to deal with the problems in Montserrat.
Yesterday, I asked the Minister whether he would give a commitment that the Government will maintain the West Indies guard ship after the defence review. Can he at least pledge today to make forceful representations on that to the Secretary of State for Defence and the Chancellor of the Exchequer? My hon. Friend the Member for Banbury (Mr. Baldry), who speaks with great knowledge and experience of the matter, described the aid that we have given in the past. I hope that the aid that the previous Government gave to Montserrat will be adequately recognised, as we recognise the aid that the present Government are giving. We will continue to support the Government in bringing relief to that stricken island.
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