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Tony Worthington (Clydebank and Milngavie): The hon. Lady refers to an editorial in The Times of India suggesting that we should withdraw aid from India. Is that her position?

Mrs. Spelman: I thought that I had made it clear that I am not in favour of ceasing to provide aid to India. The question is how it is given. In fairness to the Government, there has been considerable refocusing of the way in which the Department for International Development is working in India. I met DFID's head while I was in Delhi. We are now focused on four of the approximately 30 Indian states. My concern after visiting that country is that although there is no doubt that we can achieve greater effectiveness through backing politically reforming states such as Andhra Pradesh, where there is a state Government with a zeal to modernise agriculture, one of the consequences is that the poorer states, such as Bihar, will fall further and further behind.

Tony Worthington: The hon. Lady raises these questions, but she is a politician. She is supposed to be putting forward policies. What is her policy on India?

Mrs. Spelman: With respect to the hon. Gentleman, it is for the Government to propose and implement their policy, and it is the role of the Opposition to ask questions. This is the one debate a year in which we get the chance to ask a series of questions.

As the Secretary of State said, there is no room for complacency. One glance at the graphs in the annual report showing progress towards millennium development goals reveals an appalling picture for sub-Saharan Africa. All the performance indicators are right off target. In addition, it is almost impossible to factor into such an assessment the terrible question of how HIV and AIDS will affect those poor regions of the world. My experience of visiting India teaches me that the full scale of that epidemic is about to strike another region.

Mr. Piara S. Khabra (Ealing, Southall) rose

Mrs. Spelman: I shall move on now, if I may, to discuss trade.

I was taken to India by Oxfam, as part of its fair trade fortnight campaign, to see one of those fair trade projects outside Vellore. The women involved in the project are

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earning only 70p a day from palm weaving, but with their profits they have already managed to provide sanitary facilities in their village. That is an example of how development policy can be made even more effective.

Our strategy in India, as I said, has been to back the reforming states, but an important question is: what makes a good donor and what makes a good recipient? The relationship between donor and recipient entails responsibilities on both sides. In India we have succeeded in finding good recipients, and I hope that we have demonstrated the skills of a good donor—but enabling the very poorest states to become good recipients is the fundamental challenge for us. The irony of our strategy is that it will leave poorer states lagging behind.

That problem is writ large in sub-Saharan Africa, where the combination of political chaos, conflict and corruption holds us back from helping the most needy. We must develop a model of development assistance for failing states that may go on to become rogue states. As 11 September taught us, we cannot afford to neglect them.

Hugh Bayley: I am pleased to hear the hon. Lady speaking of the need to define a good recipient of aid. We must ask what kind of Government or regime allows aid to be used cost-effectively to implement the millennium development goals. The reason for raising that question, and the reason why I raised it in the International Development Committee earlier this week, is that if we make a distinction between good and poor recipients of aid, we need different policies for our aid relationship with each type. How would the hon. Lady use different policies for good recipients and poorer recipients?

Mrs. Spelman: Again, we are not at the stage of the parliamentary cycle when we have formulated our full plans for the future of international development—[Interruption.] None the less, as the hon. Member for City of York says, we are thinking about it.

In the short term, one of the things that I want to impress on the aid agencies that work in many of those failing states is that it is perfectly reasonable for the donor to expect the recipient to take responsibility, as well as the assistance that is given. The writing of a blank cheque without an emphasis on such responsibility is unlikely to be as effective in the long run as if the recipient state could be incentivised to move closer and closer to good governance.

That is my line of thinking, without yet giving specific policies that would bring that about.

At times, we are worse than unhelpful to the developing world. That is shown most clearly by our policy on trade. For decades now, we have been talking about reforming the common agricultural policy, but, with some minor changes, it continues to deprive developing countries of access to our markets. It is even failing to provide a reasonable income for our own farmers. Of course we accept that they need to make a fair living, but the subsidies that we pay to dump agricultural surpluses in world markets are, frankly, iniquitous.

It may surprise the House to know that India is the largest producer of milk and the second lowest cost producer after New Zealand. India aspires to a new regional market in the middle east, but EU subsidies price it out of that market. In 2000, America's subsidies to its farmers were six times the amount that it spent on

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overseas development aid. The EU spends nine times more on agricultural support and export subsidies than it does on aid. That is entirely inconsistent with the political rhetoric following the events of 11 September.

We understand the need to address inequalities, and the head of the International Monetary Fund, Horst Kohler, seems to agree. He said in a television interview:

Britain should provide that leadership for change and advocate the fair trade model.

Mr. Robathan: May I say how much I agree with my hon. Friend? As someone who has a farm, I have a personal interest. I agree with her about the pernicious effect that export subsidies have on markets in developing countries, but does she see any tangible evidence that there will be reform in the near future?

Mrs. Spelman: My hon. Friend will recall that the Secretary of State has said that reform will be brought about only by getting parliamentarians throughout Europe to agree to, and press for, it. We cannot do it on our own. We can provide leadership because Britain is uniquely placed, given our history of trade and our relationship with many developing nations, together with the fact that our agriculture is highly efficient. I would expect the Government to provide leadership to build an alliance for real change.

Mr. David Drew (Stroud) rose

Mr. John Battle (Leeds, West) rose

Mrs. Spelman: I think that the hon. Member for Stroud (Mr. Drew) was first.

Mr. Drew: I could not agree more with what the hon. Lady says, so will she join the Government in getting entirely behind the Curry commission report and taking forward what we need to say through the various farm organisations—not just in this country, but across Europe—as well those involved in international development? Of course that report refers to the way in which we would want to move towards modulation in this country, which will help.

Mrs. Spelman: The hon. Gentleman will know that I have 15 years' experience of working in agriculture, so I am fully aware that we have got—

Clare Short: Subsidised agriculture.

Mrs. Spelman: As the Secretary of State says, agriculture is subsidised, but that has brought our own farmers to their knees; it is not working for farmers in this country. Reform is long overdue, but I am sure that the hon. Gentleman will appreciate that we must push hard for reform that is not only fair and does not disadvantage our farmers, but—given this brief in particular—allows a fair opportunity for the developing world. That is the vision for which we must strive.

The Secretary of State may be aware that Oxfam put the EU at the top of the double-standards index—a measure of the gap between the free-market principle and

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protectionist practice. I was interested to see on page 64 of the annual report a picture of the Secretary of State and the Prime Minister in Ghana with some cocoa producers, but Ghana is excluded from the everything but arms initiative. Why do not we help Ghana by offering it better access to European markets? Again, there is an opportunity for real improvement.

Debt relief is the final issue that I want to raise where we can make a real difference. We have heard today that 27 nations have had their debt relieved, but does that reflect reality? What is the recipients' indebtedness now? What about the countries that do not qualify under the tortuously complicated HIPC rules?

Ethiopia, for example, expects a 47 per cent. reduction in debt under the World Bank-initiated HIPC programme, despite which it will have to spend the same amount on the remaining debt as it spends on health. As I speak, 42 countries that could be included in the programme have not even reached the first rung of the criteria required before they can expect some interim relief on their debt service payments.

The IMF warns that the HIPC initiative is likely to fail in many countries and that eight to 10 countries will still be in debt by the end of the programme, so I just hope that, on debt, the Secretary of State is not saying to herself, "That's it. No more needs to be done now." The Jubilee 2000 campaign was one of the most effective campaigns in recent times. Those of us who took part in the human chain around Birmingham during the G8 summit will not let this rest. We are a rich nation. We must find more and better ways to prevent the cycle of indebtedness. We can will the means to the end.

Annual reports from school always contained a series of platitudes, but parents learn to read between the lines. This annual report shows that the Government must work harder if they are to prove next year that they mean what they say about helping the world's poorest. Old relationships built around foreign aid, welfare and donor-driven goals are finally being challenged and re-evaluated. The future is about establishing partnerships and enhancing the situation, so that developing countries take ownership of events in their own countries and use that to go forward.

We do not doubt the Secretary of State's sincerity, but she must ask herself some hard questions about the pattern of British development assistance and its effectiveness, the CDC's retreat from rural Africa, our thinning patience over EU aid reform, and the failure to get it right in Tanzania. To use the scholastic euphemism, there is room for improvement, but I am delighted that the Secretary of State said that we have to do things better.

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