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Rev. Martin Smyth (Belfast, South): As I understand the briefing that I have received, $1 a day was an income target at an earlier stage and there was no significant change in the number of people living on that income over the 20 years following the start of that development programme in 1960. How can the Secretary of State be confident that that situation can be so dramatically improved today when the proportion of those in poverty—living on less than $1 a day—was similar in the 1980s to that in the 1960s? We must also bear it in mind that $1 a day purchased more in the 1960s than it does today.

Clare Short: In the past 30 years, there has been great progress in poverty reduction across the world and more human beings have made the journey out of extreme poverty to a better life in the past 50 years than in the previous 500 years of human history, but world population has grown massively, from 1 billion in 1960 to 3 billion in 1990 and 6 billion now, and we are moving towards 9 billion.

Although we have made progress, there has also been massive population growth. That is partly because we have made progress: people live longer and children survive, so there are more human beings living in extreme poverty. There is a paradox—we have made great progress, but there is more human suffering. From our progress, we can learn how to scale up our efforts and take them to more people. The only way to reduce human suffering and to stabilise world population is to improve people's lives and give them a chance to get their children, particularly the girls, educated.

The measure relating to $1 a day was worked out on purchasing power parity in 1988—I am speaking from memory—so that one could compare, country by country, what people bought with the equivalent of $1 in their country with what could be bought for $1 in the US. It is a tiny amount, but that information is updated by comparative studies made across the world.

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In 1990, we set the target of halving by 2015 the proportion of people living in extreme poverty, and we are on track to achieve that. By then, 1 billion people will have made that great journey, but millions will still be living in abject poverty. We shall not have finished the task by 2015, but we will have shown that we can pull the whole international system together to improve its performance and that we have in our hands the capacity to work systematically towards the elimination of abject poverty from the human condition. That is what we are trying to achieve with our current efforts.

To achieve this aim, we need to improve the way in which international development assistance is provided. Old-fashioned aid is provided by funding large numbers of well intentioned but disconnected projects, which leave little sustainable impact, and which, through the accounting and evaluation requirements of large numbers of individual donors, use up the capacity of frail administrative systems to improve the quality and effectiveness of their own administration.

Clearly, that old-fashioned system was well intentioned—it took some money, set up charitable projects and brought relief to the suffering poor—but when the money runs out, the projects collapse and there is no sustainable improvement in the effectiveness of Government services in the countries that receive such assistance.

We are working with others to focus the international approach to development assistance on backing up poverty reduction strategies drawn up by the Governments of developing countries in full consultation with their people. Those strategies seek to combine macro-economic and social policy objectives to ensure that resources from tax revenues, debt relief and aid funds can all be directed towards a much stronger effort to improve services and economic management. When the economy grows, revenue levels rise and better sustainable services can be provided by those countries' own government systems to supply education and health care for everyone.

Such refocusing will require international development efforts to have systematic poverty reduction as their objective, as enshrined in the Bill. That is a big shift in the use and effectiveness of development assistance, which we are trying to drive through the international system to increase our achievements.

As everyone knows, the House has approved a reversal in the decline of the UK development budget that occurred during the 1980s and much of the 1990s. Since 1997, the UK effort has increased from 0.26 per cent. of gross national product to 0.33 per cent., and my budget has increased from £2.2 billion to £3.6 billion. That increase has been provided on the basis that the resources will be spent on poverty reduction. It is right, therefore, that the legislation that underpins spending that money should entrench the requirement that those funds be used to contribute to poverty reduction, not on other objectives.

Tony Baldry (Banbury): It is a welcome fact that UK development aid is increasing. For the first time in 40 years, our development aid budget is larger than that of France, but, in percentage terms, the United States still has a tiny aid budget—0.1 per cent. What can we do

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collectively to persuade the United States that it is in its interest and that of the international community to engage further in development aid?

Clare Short: That is a very important point. There is $55 billion in the international development system, and we need that money to invest in giving Governments the capacity to run their economies and social sectors better so that they can grow their economies and liberate their people. Although this country is raising its aid budget to £3.6 billion, we spend £100 billion on our social security system, so increasing those resources should not be difficult for us. The US has the lowest aid budget of any OECD country.

Two steps can be taken. First, we should show that we are using aid more effectively. Many people stopped believing in aid when it was used to prop up corrupt regimes; that undermined commitment. If we can show that aid is being used effectively—that poverty is systematically being reduced and that more children are in school—we can re-engage the public in believing.

Secondly, the other side of the coin as regards what happened in the US is the hope that something good comes out of the bad of 11 September. The mood of the United States was turning inwards, but there is now a growing understanding that the only way to make any country safe is to make the world more equitable and safe. That means reaching out to the poorest countries and giving them the capacity to offer hope for their people, rather than the hopelessness that sometimes inspires people to join ugly movements. Hopelessness is never an excuse, but it is a breeding ground.

I agree with the hon. Member for Banbury that this matter is a priority. We hope that we can get the international community to concentrate on international development, because that is right and because it is the only way to make the world safe. If we all work together, we may be able to make progress.

Mr. Edward Leigh (Gainsborough): On the subject of priorities, the Bill focuses on the eradication of poverty. When the right hon. Lady decides which countries are granted aid and how much, to what extent is she motivated by their human rights record, particularly as regards the persecution of religious and other minorities?

Clare Short: We must first realise that the UK's direct bilateral budget, which is about half our effort, is part of an international system. Rather than trying to make our budget perfect, we must make the whole system work internationally so that historical patterns are complemented by others. So long as we ensure that everyone is adequately provided for, that makes sense. However, all the research shows that the most effective way to use aid is to focus it on reformers and where there are large numbers of poor people. Then, penny for penny or dollar for dollar, it is more effective in driving up standards and reducing poverty.

On respect for human rights and minorities, which the hon. Gentleman asked about, when one looks across the world one sees that minorities tend to be the poorest. Therefore, focusing on the poor and giving them a better chance necessarily focuses on the needs of minorities, whether in Vietnam, China, India, parts of Africa or elsewhere.

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So a focus on poverty automatically leads one to a focus on minorities.

The universal declaration of human rights specifically mentions political, civil, social and economic rights. It establishes, for example, every child's right to an education. Although the declaration was written in 1948, it also states that primary education should be free. If we focus on human rights, we must focus not only on people's right to speak, to be free from political persecution and to practise their religion, but, for example, on their children's right to go to school.

The truly difficult question, which I think that the hon. Member for Gainsborough (Mr. Leigh) has asked me before, is what to do in the most badly governed countries, where some of the poorest and most depressed people live. We cannot provide resources to their Governments because they would be mis-spent. We are working, therefore, not only to improve our ways of getting humanitarian relief to people but to strengthen people's capacity to demand change. That is difficult, but we have to do it; otherwise, we shall simply be turning our backs on the poorest and most needy countries and people. That would not do either.

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