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Mr. Tom Watson (West Bromwich, East): Can the hon. Lady enlighten us on how big the budget for that fund would be? Would it be greater than the £60 million that was cut from the aid budget in 1995, which was five times more than the annual income of Oxfam for that year?

Mrs. Spelman: I construe from that intervention that the hon. Gentleman does not think that it is a good idea to provide developing countries with equal representation and that he does not believe that rich nations have a shared responsibility to create a level playing field.

Mr. Stephen O'Brien (Eddisbury): I applaud my hon. Friend's speech and the policy announcement of the advocacy fund, which has been hugely welcomed—not least because it would give developing countries the choice when it came to accessing the appropriate advice to be on terms at the WTO. The Chancellor and other Ministers seek to ensure that they have continued all-party support for many of their international initiatives, so does she agree that it is disappointing that when we

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seek such support for our policy, the Government remain significantly silent? That shows that they do not care about equal-terms advocacy.

Mrs. Spelman: I thank my hon. Friend for that intervention. As he will know, there is usually a remarkably high level of consensus on the subject of international development. My right hon. and learned Friend the shadow Chancellor has welcomed the increased spending on international development that the Government have announced. Therefore, I too find it disappointing that the practical suggestion set out by my hon. Friend has not been taken up so far. Perhaps the Minister will have an opportunity this afternoon to correct that—or perhaps the Government have something else in mind.

Although the WTO is a relatively new organisation, it must be seen to operate fairly if it is win the trust and confidence of those countries that feel poorly served by it at present. I was rather intrigued by something that the Secretary of State for Trade and Industry said in her article in the The Guardian this week. She said that the Government would create new institutions to deal with unfair trade. Perhaps the Minister will tell the House what she has in mind.

Mr. Simon Thomas (Ceredigion): I thank the hon. Lady for giving way. I welcome the motion before the House, and the spirit in which she is speaking to it. She mentioned trade liberalisation, and the failure to increase the amount of trade in which developing countries can take part. Although supporters of the Trade Justice Movement would accept much of what she has said so far, they also believe that developing countries should have the ability to grow their own economies to the point where they are strong enough to take part in the WTO. What ideas does she have for allowing that to happen and ensuring that trade liberalisation does not mean simply that large multinational companies exploit developing countries?

Mrs. Spelman: I thank the hon. Gentleman for that intervention, but he may not understand the important fact that trade liberalisation has brought benefits to developing countries. I shall be discussing later whether or not, on balance, trade liberalisation has been good for developing countries.

That is an important question. In last week's edition of The Big Issue, an overwhelming case was made for the benefits of trade liberalisation. The magazine set out what globalisation can do to improve the prospects of a developing country by reducing poverty and boosting its economy.

As the UN's development programme has observed, global poverty has declined more in the past 50 years than in the previous 500. In those five decades, there has been substantial trade liberalisation. Indeed, the number of absolute poor—people who live on less than $1 a day—has fallen by 200 million in the past two decades, even though the world's population has grown by 1.5 billion.

Globalisation is a buzz word that anti-capitalist protestors have seized on. They have attacked it as the source of the world's ills, but globalisation—which is capitalism, if Labour Members can screw up their

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courage to use the word—is what the Government now believe in. The right hon. Member for Birmingham, Ladywood (Clare Short) has said that

It is a key driver of economic growth, but—and this may be of interest to the hon. Member for Ceredigion (Mr. Thomas)—it needs to go hand in hand with good governance and effective institutions that channel its power for good.

The world is an unequal place. Resources are not distributed evenly, but it is what Governments do with what they have that makes all the difference. With certain exceptions such as Burma and North Korea, the open-market policies of the Asian continent have brought huge progress. Several African countries with a pro-market approach, such as Botswana, Uganda and Mauritius, have achieved economic growth, but others remain mired in the deepest misery. They suffer from conflict, corruption, sickness and—all too often—from hugely burdensome bureaucracies that hold them back.

Mr Gary Streeter (South-West Devon): I am grateful to my hon. Friend for giving way, and I am certainly enjoying her excellent speech. Does she agree that in the past 20 years it has been shown that good governance, the rule of law and a market-based economy are the key ingredients to a developing nation becoming prosperous and providing for its people? Does she consider that that ought to be more of a focus for Government policy than is currently the case?

Mrs. Spelman: I thank my hon. Friend for that intervention. He knows the subject well, having preceded me effectively in this post. He is right. India, because it is so populous, is probably the largest of many examples of a nation that realised that it was losing its competitive position and that trade liberalisation would unleash real opportunity. That is one of the best examples with which to encourage other developing nations to take the same steps.

The International Development Act 2002 focused on poverty reduction, which we support. During the scrutiny of that measure, my hon. Friend the Member for South-West Devon (Mr. Streeter), who spoke for the Opposition, pointed out that we must not lose sight of the importance of fostering good governance—something that was reflected in the words of the right hon. Member for Birmingham, Ladywood. Good governance and effective institutions are essential to help to ensure trade liberalisation. Together, they bring real development and progress in those countries.

Mr. Andrew Robathan (Blaby): The point that my hon. Friend made, backing up our hon. Friend the Member for South-West Devon (Mr. Streeter), is right and I agree with everything that she has been saying. In essence, the aims of the Trade Justice Movement are pretty good and, in some ways, we can support them. However, when one visits a country such as Angola, as I did last month, and discovers that the president is pocketing $1 billion of oil revenue every year, while our aid programme is but £12 million a year, it puts everything into perspective. Does my hon. Friend agree?

Mrs. Spelman: My hon. Friend touches on an important point. Politicians, whatever our persuasion,

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represent our electorate and make choices on their behalf. We try to provide leadership on policy, but the bad news stories, such as the one that my hon. Friend highlighted, create much public scepticism about the effective use of taxpayers' money. That is why it is so important to encourage and foster good governance and to stamp out corruption. We can then be confident that our taxpayers' money is being used to maximum effect to help the poorest countries in the world.

I do not want to stand in this place next year bemoaning the lack of progress on international trade reform. As the Prime Minister said, the biggest thing happening in the next six months is world trade: Cancun represents a milepost, yet nothing prevents progress on CAP reform but the selfishness of those who do not want change. Meanwhile, coffee farmers in Ethiopia are dying in their huts and throughout the world people's livelihoods are being ruined.

In his 2001 conference speech, the Prime Minister said that we must practise the free trade that we are so fond of preaching. In this country, we are so tired of his rhetoric that no one believes him any more. People in other countries see little benefit from that rhetoric in their livelihoods. I urge the Government and all hon. Members to seize the opportunity to bring about a fair deal in world trade for our fellow citizens throughout the world.

4.38 pm

The Minister of State, Department for International Development (Hilary Benn): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

First, I welcome the debate and the Opposition's choice of subject, not least because it gives the House the chance to discuss development and trade in the week of the Trade Justice Movement's lobby of Members of Parliament. Secondly, I offer a warm welcome to the Treasury Bench and to the Department for International Development to the Under-Secretary of State for International Development, my hon. Friend the Member for Harrow, West (Mr. Thomas), who will reply to the debate. I am sure that I speak for the whole

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House in wishing him well in his post. My right hon. Friend the Secretary of State for International Development and I already enjoy working with him.

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