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.
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.
Malik: For a number of reasons, we believe that the Lisbon
treaty, in aggregate, was good for development. First, and crucially,
poverty is now a primary focus of
EU development assistance. Secondly, European policies are now more
aligned with development goals. Thirdly, we have some legally binding
principles on EU development assistance. Fourthly, and crucially, the
Lisbon treaty makes it clear that aid is intended solely for reducing
poverty. In that context, Lisbon is good for development and for the
developing
world.
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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