EU Document 8403/08 and Addenda 1 to 5 relating to The EU—a Global Partner for Development—Speeding up progress towards the Millennium Development Goals.

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The Chairman: Order. Questions should be brief and to the point.
Mr. Lancaster: How can the Minister reassure the Committee that we will meet the target of 0.7 per cent. by 2013?
Mr. Malik: I will not take the bait offered by the hon. Gentleman, other than to say that we will hardly take lectures from a party that, when in government, proved incompetent on the economy. I could spend half an hour talking about Labour’s economic track record, which could be quite embarrassing for the hon. Gentleman, but knowing that you would rule me out of order if I did so, Mr. Atkinson, I will focus on the point at issue.
I will give the hon. Gentleman more detail if that helps. We are very confident that we are on track to hit 0.43 per cent. by 2008, 0.48 per cent. by 2009 and 0.56 per cent. by 2010 and, ultimately, to meet the objective of 0.7 per cent. by 2013. I am pleased that the Opposition support our commitment to hitting ODA of 0.7 per cent. of GNI. That is welcome. The dip was projected. Time will tell, but at the moment we are very confident that we will meet our commitments.
Mr. David S. Borrow (South Ribble) (Lab): Following on from that last point, will the Minister enlighten the Committee on the Government’s approach to another issue? The current spending review includes projections for what DFID will have to spend on development to reach the figure of 7 per cent. of GDP by 2013 rather than 2015? That figure is obviously based on a certain level of economic growth. Should economic growth be somewhat less than expected, would the percentage of GDP available for spending on international development be greater than 0.7 per cent. or would it be kept in line with it in the various Budgets between now and 2013?
Mr. Malik: Let me stress to my hon. Friend that the target is not 7 per cent., but 0.7 per cent.—he had me worried there for a second, and I should make it clear that I am not committing to 7 per cent. of GNI by 2013. There is perhaps a bit of confusion, because we are speaking about a percentage of GNI, not in absolute terms. We are confident that we will meet the target of 0.7 per cent. of GNI. If the economy does not grow as quickly as was perhaps forecast, we will still hit 0.7 per cent. of GNI. All that that will mean is that we will perhaps not have as much money in absolute terms. The commitment to 0.7 per cent. should not be thrown off track by economic turbulence.
Mr. Michael Moore (Berwickshire, Roxburgh and Selkirk) (LD): That was a very elegant answer, which completely skipped the point made by the hon. Member for South Ribble, who was trying to get some kind of guarantee that the levels suggested by the Government’s assumptions about economic growth and ODA figures in a few years’ time will hold. As the hon. Member for North-East Milton Keynes highlighted, the predictability of aid is one of the central aims of the Commission documents, and it is one that the Government and others are trying to ensure that we achieve. How can they do that, however, if there is some uncertainty in the economy. To help the Committee, could the Minister set out the growth assumptions for the years until the 2013 target? What will the ODA be for each of those years? In addition, the papers that the Government submitted to the Committee talk of “innovative financial mechanisms” to increase the predictability and sustainability of financial flows. Will the Minister give us more detail on what those innovative financial mechanisms will look like?
Mr. Malik: I am afraid that I do not have the growth figures that the hon. Gentleman—
Mr. Lancaster: Yes you do.
Mr. Malik: With respect, Mr. Atkinson, it is my job to respond. The hon. Gentleman might wish that he was in my position, but he is not at the moment, and long may that remain the case.
The hon. Member for Berwickshire, Roxburgh and Selkirk will be aware that funding is agreed on the basis of a three-year comprehensive spending review. In that sense, we have given the figures for the next three years. We can give a very accurate projection in absolute terms for the next three years of the comprehensive spending review. Beyond that, it is obviously more difficult to commit, but the process is far enhanced compared with the previous one, which did things on an annual basis. I do not think that that will give him the total satisfaction that he requires, but it is where we are currently.
Mr. MacNeil: One of the issues that jumps out at me from what I have read and what I have heard the Minister say is biofuels. Most crops grown for biofuels attract subsidies. Given that a moratorium on biofuel production may be associated with the Gallagher review, could it be the case that crops grown for biofuels are attracting too much subsidy compared with the crops grown for food? Is that adding to global problems such as those that we have seen in Cairo, Haiti and other places?
Mr. Malik: The hon. Gentleman asks a good question. I do not want to pre-empt the Gallagher review, whose results are imminent, but there is genuine concern about biofuels. That is why the Prime Minister said that we do not intend to go beyond 5 per cent. biofuel use. We are currently at 2.5 per cent. of transport fuels, which is likely to increase to 3.75 per cent. and to 5 per cent. by 2010. We think that the Gallagher review will inform that.
With respect to the biofuels debate, some food crops can be used efficiently and some less efficiently. Brazilian sugar cane, for example, can be used very efficiently to make ethanol. US maize is highly inefficient, because the inputs on fertiliser and food add cost. More importantly, in terms of climate change, it contributes to carbon emissions. A lot of research is being done on the issue of subsidy, but from our perspective, by the end of June, the Gallagher review will give us a clear indication of where biofuels are in the debate about sustainability. Some of the causes of many of the problems that we face in terms of the wider food debate include the awful harvest in Australia; fuel and fertiliser inputs on the supply side; the fact that people are eating more meat, which requires grain; and, to some extent, biofuels. The importance of biofuels will be clearer by the end of the month.
Mr. Borrow: One of the key international failures since 2000 has been the failure of the Doha round to deliver a level playing field and the sort of trading system that the world’s poorer and developing countries need. Where does the Minister think we are up to in terms of the Doha round, and how does it fit in with the achievement of the millennium goals by 2015?
Mr. Malik: Doha is incredibly important. It was the follow-up to the Monterey consensus. In terms of the Doha trade round, early and successful negotiations with the aspiration to scale up aid for trade are under consideration and are important. To be honest, progress on Doha has been disappointing. It is an issue of concern, and we are working on it, as it is crucial to achieving the millennium goals. I share my hon. Friend’s concerns.
Mr. Borrow: Given the key role that the United States will play in any agreement on the Doha round, does my hon. Friend agree with the EU Trade Commissioner Peter Mandelson, who expressed concern over the weekend about the protectionist policies of the two main contenders for the US presidency?
Mr. Malik: Fortunately, my remit does not extend to the US presidency. However, we are all concerned about unnecessary protectionism, whether it is through subsidy or whether it is through tariff. We recognise the need for reform, not least within the common agricultural policy.
Mr. MacNeil: “Aid for Trade” has a laudable aim, and its streamlining of future aims and efforts is a massive improvement, but how do we know that we are stimulating the right parts of the economies of third-world or developing countries? The danger is that donor countries will invest in the wrong areas, giving the wrong stimulation to the wrong parts of the economy. I accept that the situation involves searching in the dark for an answer, which is not easy, but I would like to know what oversight has been put in place.
Mr. Malik: We believe in a country-led approach, which is the key to everything that we do. We believe that Governments and civil society—and, indeed, the private sector—are best placed to identify the priorities that will lead to a poverty reduction strategy, and we will buy into that.
Reviews of how effective aid may be—in this case, aid for trade—are built into the system. However, there are concerns whether some of the targets will be met. There is a target of €1 billion for the European Union, and a target of €1 billion for EU member states collectively. In 2006, member states had contributed some €639 million and the European Commission had made €941 million available. The volume is crucial, but that does not answer the hon. Gentleman’s specific point. It is important that member states do much more, and we are working within the EU to get agreement on doing more.
As for whether we are investing in the right areas, the country-led approach has again proven to be the most effective, with people taking responsibility for their own destiny. We would certainly considering investing in a poverty reduction strategy that was country-led, and the same is true for “Aid for Trade”.
Mr. Burns: In the context of the documents before us, the Under-Secretary of State for International Development, the hon. Member for Harrow, West (Mr. Thomas), has said that it is vital that the Accra process delivers concrete measures to accelerate progress on aid effectiveness. Will the Minister comment on the points made by the Under-Secretary and on the downside if such progress is not realised, which relates to the letter that the Under-Secretary sent to the Chairman of the European Scrutiny Committee?
Mr. Malik: The obvious downside would be the adverse impact on the millennium development goals, which we all want to see achieved. Accra is one piece of the jigsaw. Financing for development is another part of the jigsaw, but that is about more aid. Finally, there is the call to action that the Prime Minister launched late last year. It will culminate at the UN in New York on 20 September, and it focuses on better results. All three elements are crucial to ensuring that we meet the millennium development goals. The important thing about Accra is that an ambitious set of proposals is agreed from 2 to 4 September.
Mr. Burns: The only trouble is that the Minister did not refer to the main issues raised by the Under-Secretary of State for International Development, the hon. Member for Harrow, West, namely scepticism and the impact on the wider public. Will he do so now?
Mr. Malik: Unfortunately, I do not have the letter to hand.
Mr. Burns: Really.
Mr. Malik: Really—I am not in the business of saying things that are not true.
Mr. Burns: Extraordinary.
Mr. Malik: With respect, I do not think that that is extraordinary. Which page is the hon. Gentleman looking at?
Mr. Burns: Try page 3, towards the top, line six.
Mr. Malik: I wonder whether we are looking at the same page.
Mr. Burns: On a point of order, Mr. Atkinson. I am talking about the letter of 2 June from the Under-Secretary of State for International Development, the hon. Member for Harrow, West, to the Chairman of the European Scrutiny Committee regarding the documents before us? I am looking at lines four to six of the top paragraph on page 6.
The Chairman: Order. The Minister is dealing with the issues raised in the point of order.
Mr. Malik: There would, of course, be scepticism if there was not a good round in Accra, and it is crucial that we keep the pressure on. That is exactly why the Prime Minister said that we face a development emergency that requires emergency action. We are off-track on some of the MDGs, and it is patently obvious that there would be scepticism if those international agreements were not as ambitious as they need to be.
Mr. Meale: I am really pleased that the hon. Member for West Chelmsford is so adept at pinpointing the plethora—
The Chairman: Order. The hon. Gentleman must ask the Minister a question.
Mr. Meale: I wonder whether the Minister should tell the hon. Gentleman that he will write to him, which might be the appropriate way forward.
Mr. Malik: That would perhaps have been a better course of action, but the hon. Member for West Chelmsford got the response that he deserved.
Mr. Lancaster: The Lisbon treaty removes the reference to the most disadvantaged developing countries as a focus for EU development co-operation policy. How will that improve the quality of EU aid?
Mr. Lancaster: How, specifically, will removing the reference to “the most disadvantaged” improve the quality of EU aid? I understand the Minister’s broad answer, but I want to home in on that specific reference.
Mr. Malik: My response deals with that specific point. Surely the issue is whether there is a negative impact on the poorest in the world. I have just said that the treaty overall has a net positive impact. We may agree to disagree, but the Lisbon treaty aggregate is hugely beneficial for the developing world. The treaty is a great opportunity, and we welcome the four elements of it that I have outlined.
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