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Mr. Simon Thomas: Clearly, the sums agreed at Monterrey and under the comprehensive spending review are significant and important. Nevertheless, does the hon. Gentleman recall the Secretary of State's intervention on the hon. Member for Richmond Park (Dr. Tonge) when, as I understand it, she confirmed that debt relief was included in the figure as a percentage of GDP? Although such sums show increasing progress in this country, we cannot say that we have met our UN targets until we hit 0.7 per cent. in overseas aid.
Hugh Bayley: The hon. Gentleman is absolutely right. He could have been reading the next line of my speech. I thank him for that—I need not read that particular line; it can be taken as read.
Very significant progress has been made, and it has been led by this country. However, we are nowhere near the 0.7 per cent. target, or the Zedillo target of an additional $50 billion a year. The world's current official development assistance spend is some $54 billion, and
Zedillo proposes a doubling of official development assistance to some $100 billion or £105 billion a year, in each year between now and 2015, if we are to meet those goals. The Monterrey pledges by the United States and by all the member states of the European Union acting together will provide an additional $12 billion—an increase of some 20 or 25 per cent. That is a significant amount, but it is by no means enough to attain those development goals.That was acknowledged by the Chancellor of the Exchequer in the Red Book that he issued on Budget day, as my hon. Friend the Member for Leeds, West pointed out. The Red Book states that, because the Monterrey pledges have not met the target set by the UN or by the World Bank,
- "The UK will continue to seek further progress, to ensure that no developing country genuinely committed to good governance, economic reform and poverty reduction will be denied the chance to achieve the Millennium Development Goals through lack of finance."
We should also consider the proposals made by George Soros and others to allocate additional special drawing rights to developing countries. The last time that the Bretton Woods institutions allocated additional SDRs was, I think, in 1981. Those institutions are in a position to issue further SDRs, and we should consider that seriously.
I agree with my hon. Friend the Member for Putney (Mr. Colman) that we should consider the Tobin tax, which is gaining greater international recognition. There are some problems, however, with seeking to generate revenue for development by taxing currency transactions. International trade might slow as a result, which could be harmful to developing countries. Furthermore, the euro zone might see a competitive advantage in placing a tax on currency transactions for those trading partners that have to exchange currencies to trade, as it would not apply within the euro zone. To put those fears at rest, if the Tobin tax were introduced, perhaps the euro zone should propose an additional contribution of its own. Nevertheless, the Tobin tax is an important proposal, and we should consider its potential for contributing to development.
If we are to bridge the Zedillo financing gap, we need to consider reforming the terms of trade. Most hon. Members touched on that. I hope that the debate gives my right hon. Friend the Secretary of State the clear and direct message that hon. Members on both sides of the House think that the development agenda needs to focus sharply on how the Doha trade round delivers for poor people in poor countries.
We know that private sector financial activity contributes far more to the GDP of even sub-Saharan Africa than aid does. We also know that the least
developed countries provide and receive a declining share of trade. The World Bank estimates that had Africa maintained the share of trade that it had in the late 1960s, its income would be higher by some $70 billion a year, and the Zedillo gap would not exist.Trade has the potential to narrow the financing gap if there is a greater volume of trade between developed and developing countries. However, if it is to provide benefits for poor people in those countries, the terms of trade need to change. We need to focus in particular on agricultural subsidies, as the hon. Member for Banbury said, and on intellectual property rights, which have acted as a barrier to the purchase of certain medicines in developing countries.
In addition to measures such as special drawing rights and the Tobin tax, we should try to create a goal—or, better still, a financial instrument—that provides an incentive to increase aid and at the same time to lower trade barriers, so that we increase trade between the least developed countries and developed countries. The first thing to address is the need to lower export subsidies from rich countries, which cost us some $1 billion a day. Rich countries spend five times as much on export subsidies as they do on development assistance. Oxfam's report "Rigged Rules and Double Standards", published a couple of weeks ago, makes the point that export subsidies do not just cost us money, but cost developing countries about $100 billion a year, which is twice as much as they receive in aid.
We need to liberalise our economy to get rid of export subsidies, because they harm development. We also need to encourage developing countries to liberalise their economies. The Tinbergen Institute estimated for the World Bank that developing countries would stand to gain up to $155 billion a year if they further liberalised their economies, which is three times the amount they receive in aid.
Perhaps alongside the 0.7 per cent. of GDP development goal, a second development goal could aim to increase the volume of trade to least developed countries by a certain percentage by 2015. Perhaps we should even increase the level of overseas development assistance and decrease export subsidies so that by 2015, or some other date, they are in balance. If we agreed such a goal, it would provide an incentive for people involved in trade in all developed countries to address the difficult issues, such as agricultural subsidies and textile tariffs, which need to be addressed if there is to be a prospect of meeting the millennium development goals.
We should consider also not only where the money comes from but where it should go. We should be guided by the Secretary of State's excellent report, which, like other Members, I welcome. It shows that the Government have a strong record of achievement and of global leadership on international development. It shows also, with commendable clarity, where the international donor community is falling down.
Globally, although we may be moving towards achieving the millennium goals, we are not moving fast enough to achieve them by 2015. At page 59 of my right hon. Friend's report, a graph shows with great clarity that in sub-Saharan Africa we are making progress on primary education enrolment, an issue on which the hon. Member for Richmond Park (Dr. Tonge) touched, but that virtually no progress has been made on moving towards the
poverty alleviation goal. It shows also that the public health measures are worse now than they were in 1990. Infant mortality in sub-Saharan Africa is worse than in 1990, and becoming worse still. The percentage of births attended by a trained and skilled health worker is also declining.The lessons that I draw from the graphs in the report are that a greater proportion of our aid should go to sub-Saharan Africa. Other Members have mentioned the Select Committee's report on EU aid, which shows that over the past decade the proportion of aid going to low-income countries has fallen from 76 to 39 per cent. in 2000. I know that my right hon. Friend the Secretary of State is as keen as any member of the Select Committee to increase the proportion of EU aid that goes to the least developed countries.
I believe that the slide away from aid to the poorest countries has been tolerated within the EU because it has not been clear enough where EU aid is going. That is because, unlike each member state, the EU itself does not report how it spends development assistance money according to the OECD's development assistance committee criteria. We in the UK know how much of our aid goes on primary health care, on clean water and on trying to meet primary education enrolment goals. People in the Netherlands, Sweden and France know the same. However, if such questions are put to Mr. Poul Nielson, the EU Development Commissioner, he has to say, "I am sorry, I don't know the answers. Our reporting systems do not provide that information."
To the EU and the Commissioner's credit, they have agreed that they should be able to answer those questions. However, the single most important reform that the EU could make in order to show that it realises that what is happening now is wrong and must change, is to create mechanisms that show where EU development assistance goes. As EU development spending will increase substantially over the next few years as a result of a deal won by my right hon. Friends the Chancellor of the Exchequer and the Secretary of State at the financing for development conference, it is all the more important to ensure that the increased stream of funding goes to help the poorest people in the poorest countries. If it does not, we shall not meet the millennium development goals.
I shall quickly highlight two other points. There is the need to tackle conflict prevention in Africa, which my hon. Friend the Member for Lancaster and Wyre (Mr. Dawson), having just returned from the Sudan, will want to discuss. I welcome especially the appointment of Alan Goulty as the special representative of my right hon. Friend the Prime Minister. I met him when I went to the Sudan six years ago. He is an excellent diplomat, an Arabist through and through, and he is totally committed to the future of the Sudan. If anybody can act as a bridge and enable the peace process to move forward, it is Alan Goulty.
Secondly, on health, we had some very good analysis of the public health problems in developing countries from the independent commission on macro-economics and health, and we had two good proposals from the Chancellor in the Red Book: first, to create a tax credit for research and development of vaccines and medicines to prevent and treat malaria, TB and AIDS, which I warmly welcome; and, secondly, a relief for responsible donations of medical supplies by UK companies. Those are good initiatives, which I am delighted to see.
Access to necessary and cost-effective drugs should not be discretionary. There should be a right of access to basic health care for poor people in poor countries, just as there is a right of access to health care for richer people in a country such as ours. That means that we need to amend the TRIPS agreement—the World Trade Organisation's agreement on trade-related aspects of intellectual property rights—in a way that retains the patent protection of pharmaceutical drugs in developed countries, without which pharmaceutical companies will not continue to invest in researching and developing the new drugs that we all, in the developed as well as the developing world, want, but which also extends to poorer countries the opportunity to purchase cheaper copies of patent- protected drugs.
That opportunity should be available to all countries, not just to those manufacturing copies under licence. If we fail to resolve this issue in the Doha negotiations, it will be unethical. The trials of drugs to tackle AIDS, TB and malaria must by their nature take place in Africa, where there is a large concentration of people suffering from those diseases, and it would be medically unethical to use Africa to trial drugs for use in other parts of the world and not to make those drugs available to people living in Africa.
Finally, I propose the creation of an international panel on medical ethics, from which the pharmaceutical industry should seek ethical clearance both for trials of drugs in developing countries, and for the licensing of the manufacture and distribution of pharmaceutical drugs in the developing world. I urge my right hon. Friend the Secretary of State to ask her health officials to examine the practicality of such a proposal, and to discuss it with Gro Harlem Brundtland, Director-General of the World Health Organisation.
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