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Mr. Peter Lilley (Hitchin and Harpenden) (Con): I am grateful for the opportunity to participate in this debate. It is also a privilege to follow the hon. Member
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for Calder Valley (Chris McCafferty) and I congratulate her on selecting an issue on which she has obviously made herself an expert. She focused on that issue and contributed thoughtfully to the debate. I hope that she will excuse me if I do not follow her on that issue.

I am not a rock star, so I do not bring the particular expertise that membership of that profession brings to the economic problems of Africa, but I am one of few MPs—if not the only one—to have devoted the best part of a decade before becoming an MP to working on aid and development projects, mostly in Africa. I hope that I can draw on that experience to contribute to this debate. I worked in countries as diverse as Ethiopia, Zaire, the Republic of the Congo—the former French Congo—Kenya, Tanzania, Uganda and Cameroon at a time when they were full of hope and enthusiasm and it seemed that the possibility of progress from poverty to    prosperity was real. Subsequently, I saw the heartbreaking decline and reversal in many of those countries into deeper poverty, greater disease, conflict and distress. No one is more passionately committed than I am to seeing poverty made history and to seeing the goals of that campaign achieved. I recognise the good faith of those who support that campaign— and especially the Secretary of State in the contribution he made today. I also recognise the genuine support that has welled up in the country as a whole.

However, I hope that I have earned from my past work the right to puncture some of the complacent endorsement that has perhaps been a characteristic of this debate—certainly of the debate outside—of everything that has been done in the name of making poverty history. I am concerned that as well as supporting many genuine and desirable objectives, the campaign could become a vehicle for anti-free trade, anti-free market and anti-globalisation attitudes and policies that, if pursued, would be damaging to Africa, and all too often embody a patronising attitude towards Africans that in some cases borders on racism.

Those anti-free market and often patronising attitudes were prevalent within the aid agencies when I worked for them in Africa many years ago. However, all my experience of working with Africans, who became friends and valued colleagues, convinced me that those attitudes are wrong. Africans have the same number of grey cells as any other race. They have the same desire to better themselves, their families and their communities. They have the same capacity for hard work, ingenuity and enterprise as any other country. It is sad that, for example, the advertisement that appears today in many newspapers has a headline that implies that eight white men in a room in one day can solve the problems of Africa, with the implication that 680 million Africans are effectively relegated to the status of recipients of the largesse, wisdom and power of those eight gentlemen. In my view, that is nonsense and, in my experience, it is incorrect.

I did many studies for the UN Economic Commission for Africa and the UN Industrial Development Organisation, in which I identified a viable project located in a country where its inhabitants were free to invest. In many instances, that project was duly implemented by local entrepreneurs, often before the aid agencies had finished processing the report or the local government had got round to seeing whether it wanted the project to happen or not. Where African
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people have the freedom in their own countries and the access to foreign markets to prosper, they will take those opportunities, and they will prosper. So our first demand should be to open up access to our markets to African people who want to trade with us and export to us.

I do not know how many people have read the manifesto of Make Poverty History, but I was astonished to find that it contains no call to open up access to the markets of the EU or other developed countries. It rightly calls for an end to export subsidies, which can be damaging in African markets, but rather than attacking the protectionism of western markets, it calls for the right of African countries to protect their own agriculture and farmers.

Obviously, those countries are free to take their own decisions, but I believe that there is hardly anything less designed to be helpful to the elimination of poverty in developing countries than raising the price of food for poor people. If those countries must indulge in protection, let it be on cosmetics and Cadillacs, rather than on anything that makes their food more expensive; but, anyway, our aim should be to open up our markets to Africa's goods.

Making Poverty History's second aim, with which I entirely concur, is to drop the debt. I am proud to have belonged to a Government who wrote off all aid debt to African countries—although we did not make a song and dance about it at the time—thus leaving only Government guaranteed trade and multilateral debt to be dealt with.

Some free-marketeers, who would agree with me in other ways, are suspicious of debt relief. They are mistaken. It is what happens in free markets. If we lend to someone for a project that fails to make a profit and a return, the debt has to be written off. If we lend to someone who, through unwisdom or otherwise, is unable to pay back the loan, we have to write it off. The only reason why there is a problem about debt relief for Africa is that the debts are not free-market debts made freely between someone investing in those countries or lending to those people, but debts that have been guaranteed by Governments or Government agencies.

Some people say that writing off debts will reward corrupt dictators and plutocrats, but let us remember that it is not the corrupt dictators and plutocrats who will pay back those debts, if we insist on their repayment, but the poor peasants and the impoverished people who live in the townships of Africa. Whoever's fault it was that those bad loans were made, it was not the fault of poor people in Africa, and they should not be required to repay their loans. So I entirely endorse the objective of writing off debts that cannot be repaid, but we should not start again down the path of Government-guaranteed debts and Government-channelled lending to those countries. We should encourage private investment and lending wherever possible because that results not only in the better targeting of investment, but in better managed investment and better monitored investment. That brings me to aid.

Where famine, destitution, draught or disaster exists, we have a straightforward humanitarian, Christian obligation to aid those people. There is a good case, too, for giving aid to finance hospitals, schools and the
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training of teachers, nurses and doctors—rather than the reverse: their training our teachers, nurses and doctors—especially if that aid is delivered directly to the project and audited transparently. But in all my experience, aid that was designed to finance projects of an industrial nature to contribute to development was unnecessary. There was no project that I ever saw that would not have occurred in the absence of subsidies.

In the UK, we have abandoned our belief that we can make ourselves richer by Government subsidising business, picking winners and selecting industries, so why are we so patronising towards Africa as to think that Africans need those outdated methods of industrial development to prosper? They do not. Our role should be to remove the obstacles to their trading in our markets, to lift the burden of debt that hampers them and to help with their humanitarian needs. If we do that, I have faith and confidence that, given good governance, the people of Africa will move from poverty to prosperity; but it will be they who lift the burden of poverty, not eight men in Gleneagles.

4.20 pm

Hugh Bayley (City of York) (Lab): I congratulate the right hon. Member for Hitchin and Harpenden (Mr. Lilley) on a thoughtful and in some ways provocative speech, but I agree with the provocation; it needs to be said that the private sector has a vital role in the development of Africa. If we protect African countries from private investment or the private sector, we will impoverish them.

I congratulate the Government on making Africa a priority for the G8 and EU presidencies; on giving Africans a voice in developing the agenda that they take to the G8 since more than half the members of the Commission for Africa Africans; and on setting their sights high in the goals that they seek. In the Chamber, we inevitably talk about theoretical constructs, such as aid, trade and debt, but they are means to an end: empowering human beings to live decent lives.

From what has already happened in the preparations for the G8, we know what the summit will deliver. Although it will not achieve the millennium development goals in Africa, it will lift hundreds of thousands of people out of poverty. It will get many, many more children into school, and provide clean water supplies in many villages and towns that would not have obtained them otherwise. The Gleneagles summit will agree the debt write-off that has been mapped out by the G7 Finance Ministers. It will endorse the EU agreement on a timetable for reaching 0.7 per cent. of gross national income for development assistance.

Those decisions would not have been made had it not been for the leadership that our Government have given internationally to prioritise Africa. We shall see real progress on debt and aid at Gleneagles. More will be needed, and I shall be speaking at one of the rallies in Edinburgh demanding more, as will many other people. But there will be insufficient progress at the G8 on trade, so we must see Gleneagles not as a high watermark but as a staging post. We must use the time between now and the World Trade Organisation ministerial meeting in December to create a political basis internationally for agreement at the WTO.
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The main stumbling blocks to a trade agreement are the agricultural subsidies in developed countries, so we in the Chamber should turn our attention from the G8 to the UK presidency of the EU, which starts tomorrow, and talk about what our priorities for our six-month presidency will be. We take over the presidency at a difficult time. The EU is suffering growth pains from enlargement. The European constitution has been rejected by France and the Netherlands in referendums. There is deadlock on the EU budget and the UK rebate. There is high unemployment in many EU member states and a need for economic reform to meet the challenges from emerging economies, but no consensus in the EU on how to deal with those problems.

The problems of the budget, the UK rebate and CAP reform will not go away. The CAP is a barrier to progress at the WTO, and many Members on both sides of the House have said during the debate that trade reform can deliver more towards lifting people out of poverty than more help through aid or debt write-offs.

The UK rebate was negotiated by Margaret Thatcher because it was recognised that the CAP imposes an unjustifiably large burden on the UK. I hope that we can build a cross-party consensus in the UK that if we can get CAP reform, the UK's net contribution to the EU will come down as the cost of the CAP comes down, so the rebate can come down, too. If we can get consensus in the UK on opening up debate about the rebate and the way in which we could allow ourselves to reduce it, we should be able to make progress on CAP reform.

I would like to suggest six planks for the reform of the CAP that our Government could take forward during their presidency. First, we should of course avoid undermining the current reforms such as the decoupling process and the proposals on ending EU export subsidies. The progress that has been made in those fields must be consolidated.

Secondly, the Government should consider relaunching a proposal that the Germans made several years ago to devolve rural policy and spending decisions to member states—I think that the EU jargon is "nationalisation". In other words, the subsidy rules would be agreed at EU level, but the subsidies themselves would be paid from the national budgets in all the 15 original EU member states. I have often wondered why France needs to pay its farmers twice as much in aid as it gives in aid to people in developing countries. If we adopted the nationalisation approach on agricultural subsidies, we would create an incentive for all the EU 15 to reduce subsidies overall.

Thirdly, we need to propose a new EU development mechanism to replace the CAP and structural funds, which would permit budget transfers to be made from richer to poorer states without tying those transfers only to agriculture. We have heard many times that the CAP absorbs 40 per cent. of the EU budget, yet agriculture represents a tiny percentage—less than 5 per cent.—of the EU economy. Such a mechanism would give receiving states greater freedom to set their own development priorities and decide how money should be spent.
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Fourthly, we need to set out a realistic timetable for reform. We could introduce the new regime—the end of CAP and the structural funds, and the introduction of the EU development mechanism—in 2010. We could offer to introduce it on the basis of the existing share of contributions as long as we also had an agreement on a transitional period in which we would move from the current mix of contributions to a rational method of burden sharing based on the gross national income per capita of each member state.

Fifthly, as the EU cuts agricultural subsidies, we should refocus those resources on external aid. We could support accession states such as Romania, Bulgaria and Turkey so that they can make the reforms necessary to allow them to join the EU at a future date. The resources could be used to stabilise the "near abroad"—to use the European jargon—of the middle east and north Africa. They could also be used to address the problems of global poverty, especially in Africa.

Sixthly—I stress this point—we need to retain EU control of the subsidy rules at Commission and Parliament level because that would be the only way in which we could reassure the WTO that a downward path of agricultural subsidies would be achieved.

I welcome the strong cross-party agreement that we have seen during the debate. However, if we are really serious about making a difference for the poorest of the poor in Africa, we must reach cross-party consensus on reform of the CAP and on the UK rebate from the EU. We will not get CAP reform unless we move on the rebate.

We need to recognise that negotiating change in the EU budget will require give and take. At the end of the process, the UK will remain a net contributor because we are one of the richest countries, not least because of the economic success of the Labour Government. The contribution that we and other rich member states, such as Germany, France and Italy, make should be structured on a rational basis, relating to gross national income per capita in each country, and not on the anarchic basis of the CAP.

4.30 pm

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