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Members on the other side of the House have mentioned the scepticism about aid in some quarters among the British public, but I suggest that only a significant minority are concerned about Britain spending money on aid while we are also cutting back at home. It would be unjustifiable for Britain to take any other course. If we do not do everything that we can to try to take people out of poverty in other parts of the world, we-and they-will have to live with the consequences. We are already seeing the impact on human rights in those countries, with significant amounts of unrest because of long-term increases in economic inequality within countries as well as between countries.
We have already seen, for example, an increase in the number of trade unionists being killed. In a recent report, the International Labour Organisation, which is part of the UN, said that there had been a 30% increase between 2008 and 2009 in the number of trade unionists killed. Similar figures are being recorded relating to other aspects of human rights.
Several hon. Members have mentioned the position of women, and I welcome the fact that the Government have said that they want to put women at the heart of development issues. Several colleagues have talked about the figures on, and the concerns about, maternal mortality. United Nations millennium development goal 5 was aimed at reducing maternal mortality by 75%, and I urge the Government to maintain the previous Government's strategy of putting women at the centre of their policies.
We need to consider other ways of providing further funding for aid. However, I ask the Government to consider not just aid, but some of the suggestions from the various non-governmental organisations campaigning on this issue, particularly the suggestions for a Tobin tax and international forms of taxation, the funding from which could be earmarked for, and directed towards, trying to do something to bridge the huge gap in the world between rich and poor, both within and between countries. I have heard the comments about providing aid to relatively well-off countries, but although countries such as Colombia are relatively well-off in international terms, they still have huge inequalities of wealth and millions of people still living in shanty towns. Even for relatively well-off countries, where there is abject poverty and where people are living in squalor, it is appropriate that the British Government take a stance and look for ways to provide assistance.
It has been a pleasure to make a contribution to this important debate. I hope that all Members will do all they can to hold the new coalition Government to account on this issue and maintain the politic pressure that clearly exists in the country to ensure that Britain is at the forefront of efforts to address global poverty.
4.41 pm
Damian Hinds (East Hampshire) (Con): It is a privilege, if a little daunting, to speak in the same debate as my hon. Friends the Members for Wirral West (Esther McVey) and for Stevenage (Stephen McPartland) and the hon. Member for Rochdale (Simon Danczuk), who made outstanding and passionate maiden speeches.
As my right hon. Friend the Secretary of State said, aid is not the final answer. Nations become sustainably prosperous not through our charity or redistribution, but when they can create their own wealth. My hon.
Friend the Member for Castle Point (Rebecca Harris) mentioned the letters and e-mails that a number of hon. Members are getting from people who are unhappy that, at a time when the Government are having to cut back severely on spending programmes, we are still committed to spending money on aid. I do not know whether, as the hon. Member for North Ayrshire and Arran (Katy Clark) said, those people constitute a small or a significant minority, but they certainly exist, and we have to work hard to carry them with the programme.
The line "charity begins at home" holds a certain attraction, but, as we see again and again from the generosity of the British people when called upon, charity here certainly does not end at home. The moral and altruistic argument for aid is strong, but as politicians we can, and must, do better than hitherto in explaining to, and convincing, people why aid can also be in our own interests when properly targeted and as long as we know that other wealthy nations are also making their proper contribution alongside ours. A larger world gross domestic product benefits not just newly developing countries, but the entire world economy, through bigger markets, specialisation and trade. It ensures that the world's scarce resources, including human resources, are put to better use, and through the promotion of stability in otherwise volatile parts of the world, it contributes to our security. Furthermore, there are benefits in terms of climate change, economic migration and so on, and often direct benefit can be had from strategic bilateral relationships, which of course are competitive exercises between countries.
Private enterprise is the single most important driver of development. It creates jobs, wealth and opportunities. It also harnesses the talents and the enterprise of entrepreneurs, who in turn, through their ingenuity and drive, will create opportunities for their countrymen and women to prosper. However, in the world's developing economies, just as here at home, that hinges on access to credit.
Like everybody else, poor people need money if they are going to start businesses. However, mainstream banks often do not want to deal with them, because the sums of money involved are so small and because it is difficult to find an attractive return once the full operating costs have been factored in. A key to successful development is microfinance, providing loans to some of the world's poorest people and playing a key role in generating a real private sector. In some countries, such as India and Bangladesh, the microfinance sector is already well established. The Grameen bank, which is the best-known example, having pioneered the sector in 1983, has since made loans to more than 8 million borrowers. In other countries, however, there is still a lot of work left to do.
My introduction to microfinance came in Rwanda in 2008. Like a number of my hon. Friends this afternoon, I have had the opportunity a couple of times to join my right hon. Friend the Secretary of State on two of the volunteering projects that he has organised in that country, to which my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) referred earlier. In the short time spent on such a project, the contribution that one can make is tiny. However, although one's contribution may be modest, it is fair to say that what we learned could hardly be overstated.
One of the things that I learned about was microfinance. I had the opportunity while in Rwanda to pay a short visit to the country's largest microfinance institution, the Urwego Opportunity microfinance bank. We saw the two extremes of that organisation's operation. The first was the bank's flagship city branch, which looked a bit like a small branch of Barclays and was very high-tech, with all sorts of fingerprint identification technologies. The second example, at the other extreme, was what one might call the field operation-quite literally-in a market on the edge of the city, where no such technology would be available. Instead, gathered on a patch of ground were the 30 or so members-most, but not all of them, women-of a microfinance circle. The majority were sole traders in that market.
Microfinance there works in cycles of four months. People get the money at the start of the period and, so long as they pay it off at a rate of 3% a month, they can borrow again in the next four-month period. Critically, each member of the circle vouches for the others, and if someone defaults, the other members have to pick up the slack. The system is therefore largely self-policing, and before someone joins a circle, Mr Deputy Speaker, you can bet that the other members will ensure that their business is viable.
In that circle and that cycle, a lot of money changed hands. For example, 9.6 million Rwandan francs, which is almost £10,000, was brought to the circle by a female Urwego employee in a paper bag-it is quite astounding that there is not more theft on such occasions. The biggest borrower-a lady called Veronique-had borrowed almost £800, which, when we consider that this would be almost £2,500 over the three cycles in a year, is quite a lot of money. She uses that money to finance her bar and pay for the satellite television service, so that she can charge keen Rwandans to watch English premiership football teams-notably, I am pleased to say, the Arsenal-on her television set.
The sums of money involved in such projects are now such that one could say that they straddle microfinance and mainstream finance. Indeed, one needs credit at all levels to finance the development of such an economy. In rural areas of Rwanda, there are much smaller-scale operations, sometimes involving loans as small as just £1. Around the world, microfinance programmes have shown again and again that poor people can and do have a strong repayment record-in most cases over 95%. However, according to the World Bank, the industry is not even close to meeting the demand for its services. There could be up to 500 million poor people in the world for whom a small business loan would be a great opportunity, while two thirds of the world's population have no access to a bank account at all. The problem is particularly acute in sub-Saharan Africa.
The chance to witness microfinance in progress in Rwanda left a great impression on me. People talk about developing market economies, but there was a market economy developing before our eyes. I hope and trust that, in our programme of help for the poorest of the world, we will focus very much on those helping-hand programmes, which enable people to help themselves. I also hope that more airtime is given to those programmes, so that the British public can increasingly see aid as an investment in the future and in a rising rate of world growth, and not just as money spent.
4.50 pm
Mr Tobias Ellwood (Bournemouth East) (Con): I begin, like others, by paying tribute to three excellent maiden speeches. It was delightful to hear those speeches and I am sorry that the Members who delivered them are no longer in the Chamber to hear my speech. They are probably celebrating in the Tea Room, having got through the first milestone here in Parliament. I pay tribute to the hon. Member for Rochdale (Simon Danczuk), who spoke passionately and with great knowledge about his constituency; to my hon. Friend the Member for Stevenage (Stephen McPartland), who is clearly going to be a great contributor to the field of defence and, indeed, international development; and, last but not least, to my hon. Friend the Member for Wirral West (Esther McVey). Those of us slightly older in the tooth on the Government side-and that might include yourself, Mr Deputy Speaker-might recall her giving a passionate speech at the annual conference in Blackpool on the theme of "What is a girl like me doing in the Tory party?" That was a fantastic speech, and from her performance here again today, we can see why a girl like her is in this place. I am sure that she will represent her constituents well.
Before moving on to my main theme, I would like to respond to the hon. Member for Glasgow North (Ann McKechin), who made a passionate plea to keep funding based in the UK, which has been stopped by my right hon. Friend the Secretary of State. [Interruption.] Let me quote to that hon. Member-
Mr Ellwood: Let me finish the point.
Ann McKechin: It was my hon. Friend the Member for Glasgow Central (Anas Sarwar) who said this, not me.
Mr Ellwood: I stand corrected; I mean the hon. Member for Glasgow Central (Anas Sarwar). What it says on the tin-I presume that this was true from when the Department for International Development was created-is that DFID is
"the part of the UK Government that manages Britain's aid to poor countries and works to get rid of extreme poverty."
That is not in line with what the hon. Gentleman was pleading for-for funding to remain in his constituency-so perhaps he wants to see the definition of DFID change. I will come back to the definition and its importance later in my speech.
What do we mean by poverty? It is not just about an individual, a community or a country being poor; it is about being economically challenged. Poverty is multidimensional. It is lack of food and water, yes, and it is a lack of shelter; it is also the lack of health and access to medical support. Poverty is also about the lack of education and the inability to read, not having a job, and fearing for the future, living one day at a time. In essence, poverty is about powerlessness, lack of representation and lack of freedom.
I am pleased that we are having this debate so early in this Parliament in order to discuss the issues and the role Britain can play in the future. It is an important debate. I-like many other Members, I am sure-was
challenged during the election about why we were ring-fencing funding for international development when there was so much economic pressure on all the other Departments. I am glad that my right hon. Friend the Secretary of State spelled out the importance of keeping aid working and of making sure that we are able to support the countries that need it so that they can help themselves. Otherwise, immigration issues and environmental issues will grow, and the problem will become much bigger in the long term.
The causes of poverty can be broken down, crudely, into two areas-the natural and the man-made. On the natural side, there is the swell of population in places like India, or crop failure in places like Sudan or indeed disease and epidemics such as HIV/AIDS in places like South Africa and southern Africa. On the man-made front, equally affecting, we have things like corrupt leadership as we see in Somalia, or civil war as we see right across Africa and particularly in places like Angola. Then there is economic failure or even the deliberate denial of funding to poor communities for necessary projects.
Climate change can also be seen to be man-made as well. If sea levels continue to rise, places like Bangladesh would be hugely threatened. What is called water stress would be the result, and the lack of drinking water is estimated to affect 1 billion to 3 billion people. These are issues that we in the developed world need to debate, even though they may affect more people in the developing world.
The yardstick for our debates is now the millennium development goals, put forward in September 2000 by the United Nations with eight clear aims. The first is the eradication of extreme poverty and hunger. Unfortunately, we are a long way from achieving our 2015 target in that respect. The second is the achievement of universal primary education. The number of children receiving primary education has risen to 89% in the developing world, but we are still short of our millennium goal target. The third is the promotion of gender equality and the empowerment of women. That remains out of reach, as, indeed, do the reduction of child mortality and improvement in maternal health, which are the fourth and fifth goals.
The sixth goal is the combating of HIV and AIDS; the situation seems to have stabilised in many regions. The seventh is the ensuring of environmental stability, and the eighth is the development of a global partnership for development, which involves developing open trading and financial systems. My hon. Friend the Member for East Hampshire (Damian Hinds) spoke passionately about his attempts to establish and promote such systems in Rwanda.
Those are the eight themes that we will use as our benchmarks. When the countries meet for the summit in New York in September there will be much to discuss and much food for thought, given the huge shortfall between where we are now and where we would like to be by 2015.
What is our role in all this? What can the United Kingdom do to tackle the problems, either individually or with other countries, and how should we contribute? I believe that there are many ways in which the UK can make its mark. We often put our hand up when other countries do not, and it is fantastic that we continue to be willing to step forward and encourage other developed countries that may be reticent.
As I said in an intervention on the shadow Secretary of State, the G8 and the G20 are new organisations that have been able to bring in many voices that may have been excluded in the past. They make decisions and agreements, and issue challenges. Older organisations such as the United Nations, the World Bank and the International Monetary Fund, which were created when life was very different during or just after the war, have to pick up the pieces and deal with the details of those challenges.
The older organisations are out of date, and are in dire need of modernisation. While we have renewed and are reinvigorating the methods with which we distribute aid to ensure that we receive value for money, I do not believe that the same can be said for those major organisations. That is why I am pleased that my right hon. Friend the Secretary of State has been hesitant about handing over money before he has guaranteed to ensure that it will be well spent.
Ann McKechin: Let me gently suggest to the hon. Gentleman that confusing Glasgow and Edinburgh is not a practice that he should try to repeat. However, he has made an interesting point about the current management of the World Bank and the IMF. Does he agree that we should try to ensure that donee nations have a much bigger say in management and decision making than they do at present?
Mr Ellwood: The purpose of the debate is to enable ideas such as that to be put into the pot. In this instance, we are not taking about minutiae, but about the need for a root-and-branch change in the way in which organisations both operate individually and interconnect. Afghanistan is a good example of the failure of huge organisations to co-ordinate their activities sensibly in order to assist with post-conflict reconstruction.
As long as conflict continues in developing areas, poverty will thrive. Only when it ends can peace flourish, which will allow support and investment to move in, and business and trade to flourish as well. That is our role. It is dual-faced. We can use what Joe Nye used to call soft and hard power, or soft and hard influence. On the soft side there are, for instance, the Fairtrade initiatives, and ensuring that we support businesses in developing countries in the knowledge that buying a product in the supermarket will genuinely help people in need rather than corrupt organisations. The setting of tariffs can also help, as can targeted investment and funding-which has already been mentioned-and choosing support responsibly.
Any of us who have travelled to African countries will have observed that China is taking full advantage of those countries' desire for hard currency, but I am afraid that it is doing so in an irresponsible way. The Chinese are not allowing local skills to be developed. They bus in their own people, rob the country of its minerals, drain it dry and then go home or move on to another area. That is happening on a huge scale, and no one seems to want to challenge it.
I will finish my contribution by discussing conflict and the relationship between DFID and other organisations. For 10 years, DFID has been waking up to the fact that it has had to do something very different from what it
was set up to do. It does tackle poverty well, and it has been congratulated on that, but it has had to develop a new role in working in insecure and dangerous environments. I am pleased to say that the stabilisation unit and the other work being done are working well, but we took an awful long time to get there. For the first year in Afghanistan the budget was £47 million but the current budget is £5 billion a year. Had we bothered to get the reconstruction and development right when there was a small window of opportunity to win over the hearts and minds of the locals, we would have been out of Afghanistan by then. I am pleased that DFID has moved forward, I am glad that the new management have pledged to ensure that there is better scrutiny, and I wish the new team well.
Mr Deputy Speaker (Mr Nigel Evans): Order. Four Members are trying to catch my eye and half an hour is left before I call for the wind-ups, so if those Members could divide the time among themselves, everyone will get a fair crack of the whip.
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