International Development Bill

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Mr. Rowe: I hope that the Minister will not become a tad complacent about the general welcome for the Bill. Several small organisations and consultancies, and some university departments, are deeply exercised about the effect of a move to a sector-wide approach on the operation of forward-looking or innovative small projects. That is just one aspect of the matter about which there is unease.

Mr. Mullin: I look forward to discussing that issue at the appropriate point in the Bill. The hon. Gentleman is right; there are serious issues to discuss. However, the hon. Member for Chesham and Amersham underestimates her ability, and that of her colleagues, if she thinks that the time available is not enough for proper scrutiny of the Bill. I repeat that it was agreed through the usual channels.

Mrs. Gillan: The Minister seems to want to have his cake and eat it. It has been four years since the Government promised legislation. They could have presented the Bill at any time in those four years and at a much more suitable point in the legislative programme, when it would not have been rushed through with indecent haste.

The Minister has given himself away by saying that the Government grabbed a window of opportunity.

Mr. Mullin: I did not use the word ``grabbed''.

Mrs. Gillan: They seized a window of opportunity. They plucked it out of the ether. What he said meant that, finally, the Secretary of State's Cabinet colleagues and the Government Whips woke up to the fact that little besides a publishing exercise had been accomplished with respect to international development, and the Bill is the result. At the 11th hour an important Bill is being presented, and its scrutiny is being rushed through in three days. That is regrettable. It is a great shame that something as significant as the Bill should have been introduced in the dying embers of a Parliament.

Mr. Tom Clarke (Coatbridge and Chryston): The hon. Lady spoke very well on Second Reading, but I hope that she will forgive me for saying that, like many others who have been involved for a long time in international development, I have never heard such appalling sourness in a debate as I have this morning. I ask the hon. Lady in all candour whether she is preparing the Committee for the kind of undignified ambush that happened last week, which the House had to rectify this morning.

Mrs. Gillan: I shall not dignify that intervention with a response. I thank the right hon. Gentleman for his kind remarks. He has much more experience than I do of the subject. I hope very much to hear from Labour Members in Committee. They include people who have done work that I admire, with respect to international development. The Labour Benches will, sadly, probably remain silent, or make transitory comments, but, of course the Whip—

The Chairman: Order. The time for discussion of the programming resolution has now expired.

Question put and agreed to.

11 am

The Chairman: I remind the Committee that there is a financial resolution connected to the Bill, copies of which are available in the Room. I should also remind the Committee that I and my co-Chairman will not normally accept starred amendments.

Clause 1

Development Assistance

Mrs. Gillan: I beg to move amendment No. 1, in page 1, line 10, after `contribute', insert `directly or indirectly'.

The Chairman: With this, it may be convenient to consider the following amendments: No. 2, in page 1, line 16, at end insert


    (c) promoting good governance in one or more such countries'.

No. 3, in page 1, line 16, at end insert


    (d) reducing conflict or the potential for conflict in one or more such countries'.

No. 4, in page 1, line 16, at end insert


    (e) putting in place the framework necessary to attract private and foreign direct investment in one or more such countries'.

Mrs. Gillan: The four amendments go to the heart of the Bill, which is substantially contained in clause 1, do I hope that the Committee will bear with me while I comment on each amendment in turn.

Our reason for tabling amendment No. 1 is to allow the Secretary of State to provide development assistance to a country or countries provided that he or she is satisfied that the action will lead ``directly or indirectly'' to a reduction in poverty. Inserting those words would enable the Secretary of State to provide assistance to organisations, projects or others who seek to lay the foundations for poverty reduction. In other words, assistance could be provided for economic development, governance or other matters that I will discuss in relation to the other amendments. We think that such matters cannot be described as directly contributing to a reduction in poverty, but we all know that they will form part of the total effort to reduce poverty. The desire to reduce poverty is not at issue between us; the aim of clause 1 is one to which we all subscribe.

The ``Oxford English Dictionary'' provides a definition of poverty, which is crucial to a reading of the Bill. It describes poverty as

    ``the state of being poor ... want of necessities''

of life. There is no definition of poverty in the Bill—I hope that the Minister will tell us the reasoning behind the omission of such a definition; even though I can probably guess what he will say, it would be nice to have explained the thinking behind the Bill's drafting. There is a danger that the term ``poverty reduction'' will be used to mean a small number of policies to alleviate poverty in the short term, rather than the broad multi-sectoral approach that is needed to change systems of government, establish political stability and so create an environment in which poverty can be driven.

The Minister will know that the United Nations Development Programme highlighted the fact that some agencies used a narrow definition of poverty in their programmes. The UNDP ``Poverty Report 2000'' stated that some anti-poverty plans continue to treat poverty as though it were a sectoral issue. I hope that the Minister will comment on that and explain the Government's reasons for wanting to legislate. If clause 1 does not formally recognise indirect ways of reducing poverty, the Government could be constrained to a narrow set of policies that would treat the effects of poverty rather than attack its causes. The UNDP explains in its report that poverty is a multi-dimensional problem that requires comprehensive multi-sectoral programmes. That is why the Bill should mention that many policies will be directly and indirectly necessary to reduce global poverty.

The Government's programmes would have to satisfy a want in poor and developing countries of the necessities of life, as defined in the ``Oxford English Dictionary'', and generally make their people more wealthy. However, it is difficult to imagine that all Government aid programmes, particularly programmes on governance and other more technical matters, would be able to do that beyond a shadow of doubt. That is why the Bill should state that some of the Government's work in trying to reduce poverty might be done far away from the lives of the poor themselves.

It is vital that all the programmes meant to lay the foundations for a reduction in poverty should be mentioned in the Bill. It should include all the Government's programmes that are intended to strengthen government institutions and the rule of law, which should lead indirectly to better government, better policies and a participation in the democratic process—and consequently to political stability and economic growth.

The UNDP ``Poverty Report 2000'' states that a study of aid donors undertaken by the Organisation for Economic Co-operation and Development found that the overriding goal of the UNDP, the World Bank and such bilateral donors as Canada, Denmark, the Netherlands, Sweden and the UK was poverty reduction. That report was published on 3 April 2000, so I must ask whether the Bill is absolutely necessary. Are we not over-egging the pudding? If the UNDP believes that poverty reduction is the overriding goal, is it not a piece of gratuitous legislation? Is not the Secretary of State unnecessarily binding her hands behind her back by legislation when, according to an outside auditor, she is already acting within that framework? What difference the Bill will make to the Government's work and how, if at all, will it change the nature of poverty reduction?

Amendment No. 1 is coupled with our questions about the definition of poverty. Second Reading was well attended—indeed, I believe that more hon. Members than could be fitted in wanted to speak on Second Reading—and hon. Members on both sides of the House mentioned the absence of a definition in the Bill. If the definition applies to the poverty of a country, do we base our judgment on gross national product per head of population? Do we consider the country's potential? Will the Minister and the Secretary of State be able to draw a line in the sand and if so, where? What is the Department's understanding of the meaning of poverty, and how do we judge it? Do we consider individuals' poverty or the country's poverty?

In the Budget a few days ago, the Chancellor boasted that he had lifted X number of children in this country out of poverty, which provides another example of the use in the House of the word ``poverty''. In the absence of a definition of poverty in the Bill, how do we judge whether the Department's focus will be on specific individuals, groups, countries or organisations? I hope that the Minister will reflect on that and tell us about the arguments deployed within the Department, as that will be of great interest to all members of the Committee.

We tabled amendment No. 2 for the same reason as we did all the amendments in the group, which is to introduce more certainty into the Bill. The amendment is not intended to do anything other than what it says. If the Minister were gracious enough to accept the sense of any of our amendments, we would allow their wording to be altered slightly. If he thought that any of our suggestions were helpful and wanted to act on them, I should be delighted to hear it and would follow whatever procedures were necessary to enable Government amendments to be made.

The amendment stresses the importance of good governance in developing countries as a key to poverty reduction. It would allow the Secretary of State to provide assistance to projects or programmes that could not be described as contributing to a reduction of poverty, but focus on good governance or are designed to lay its foundations. It is not outwith anyone's imagination that the Government will sometimes want to take such action.

The encouragement of good governance is an indispensable part of our aid programmes and those of many other countries. Several agencies have stressed the major impact of good governance on poverty reduction. I went to Indonesia with the Westminster Foundation for Democracy to see in action a project relating to that country's elections. We tried to shape improvements in Indonesia's democratic system and thus to lay the foundations for the general economic health, well-being and stability of the area. We spent time in discussion with members of the Australian aid agency, which, unsurprisingly, put considerably greater funds into that part of the world than we did. The Australians emphasised the importance of political stability and good governance in raising people's quality of life. The UN Development Programme has stated:

    ``Effective governance is often the ``missing link'' between national anti-poverty efforts and poverty reduction''—

and thus it makes the point that anti-poverty efforts are useless without responsible and effective governance.

11.15 am

The executive summary of ``Overcoming Human Poverty: the UNDP Poverty Report 2000'', stated:

    ``For many countries it is in improving governance that external assistance is needed''.

That is fundamentally right. Good governance needs to be at the heart of the Government's aid and development policy. I do not mean that a poverty focus is worse, and a good governance focus is better; rather, I mean that the poverty-reduction focus is not possible without good governance, which should, therefore, be at the foundation of all our work in this sphere.

The World Bank World development report 2000 states that poorly functioning public sector institutions and weak Governments were major constraints on growth and equitable development in many developing countries. On page 11, which refers to reforming public institutions and strengthening Governments, the importance of good governance to poverty reduction is stated. We receive constant and continuing endorsement from organisations at the forefront of development of the necessity for good governance as the foundation stone on which effective development projects are built.

The Government have already said in the 1997 White Paper, ``Eliminating World Poverty: A Challenge for the 21st Century'':

    ``Some countries will make more rapid progress towards the international development targets than others. Those most likely to succeed will have effective government, enlightened legislation, prudent budgeting and an efficient administration''.

The Secretary of State has said:

    World Bank research shows that if aid is focused where the poor are and where the national Governments are committed to reform, the effectiveness of the US $50 billion or so in the international development system is increased by 50 per cent.'' —[Official Report, 6 March 2001; Vol. 364, c. 159.]

If the Government truly believe that good governance is a key element in the battle against poverty, they should make that explicit in the Bill. If countries that have good governance make the most rapid progress towards poverty elimination, surely Government resources need to be ploughed into good governance?

The focus on the importance of good governance should be reflected in the Bill. That would give great comfort to many people and improve the Bill without detracting from it at all. What I propose is among our key amendments, and I hope that the Minister will seriously consider it. My hon. Friend the Member for South-West Devon (Mr. Streeter) focused on that issue on Second Reading. Even in the White Paper ''Eliminating World Poverty: Making Globalisation Work for the Poor'', the Government said that effective Governments are essential if developing countries are to reap the benefits of globalisation and to make that process work for poor people.

I offer the Minister a chance to reflect in the Bill aims that we share in a way that should improve the legislation. There is nothing new about it. In the course of research, I saw work that had been done by the former Minister of State for Overseas Development, now Baroness Chalker. Back in 1991, she was speaking powerfully about good governance and practical ways to promote good government. On 25 March 1991, she said that promoting good government was a critical part of the Government's foreign policy agenda. They had made it clear that they would use all the levers available to encourage respect for human rights, free markets, sensible economic policies and efficient public administration. She asserted that millions of people remained trapped in a dismal cycle of poverty, hunger and depression, not knowing where to turn, but that the collapse of communism and the failure of many brands of socialism had given us more opportunities to help them.

I do not think that there has ever been a quarrel about this issue. It would, therefore, be wise to incorporate in the Bill the amendment or, if the Government do not like the wording, a variation on the theme. In that way, we would enshrine the key elements of good government in legislation. We would be able to manoeuvre around mechanisms to encourage competence, sound economic policies, the effective use of resources, the stamping out of corruption and the avoidance of excessive military expenditure. We could examine legitimacy and accountability, freedom of expression, political pluralism, broad participation in the development process and, lastly, the key issues of human rights and the rule of law.

Good government is essential in any country, because it allows economic growth and leads to sustainable development—which we all welcome—and the effective use of resources, whether domestic or provided by aid donors. In addition, it encourages enterprise and allows benefits to be widely shared. The poor must not be excluded from the process. By including it in the Bill, we demonstrate the mood of realism in discussions about international development.

There is increasing recognition that good government attracts donors and inward investment. It lays the foundations for countries that have been on an downward path to regain their momentum onwards and upwards. Conservative Members believe that real change can only come about in a developing country when there is political stability. There needs to be a framework of competent and responsible government, accountable institutions and a strong civil society.

It is crucial that developing countries establish a strong rule of law and an effective and honest legal system. Our aid programme should empower them to do that. We have written into our international development policy that we will increase the focus on strengthening the democratic framework in those countries that we help. There should be prioritising of resources and technical expertise toward that objective, which I am not entirely sure can be achieved within the parameters of the Bill as drafted.

We need to find new ways to make specific areas of British expertise available to developing countries. For example, we must build on the success of the know-how fund. When I used to do what I laughingly describe as a proper job before entering the House of Commons, I was privileged to work for one of our major companies, Ernst and Young, on developing contacts and offices, taking its clients into the former Soviet Union. I saw at first hand how aid going to former Soviet satellites brought about extremely beneficial changes in those countries—so beneficial that many of them are now reaching the economic standards that will allow them to join the family of the European Union. Finding new ways to build on the successes of such programmes might not be excluded by the Bill as drafted, but it should be explicitly acknowledged in it.

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