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Lord Judd: In eager anticipation, I beg leave to withdraw my objection to Clause 5.

Clause 5 agreed to.

Clause 6 [Financial assistance]:

Baroness Rawlings moved Amendment No. 22:

"( ) The value of loans made available to a country by way of financial assistance shall not, in each year, amount to more than 10 per cent. of development assistance to that country."

The noble Baroness said: This amendment seeks to prevent countries running up substantial debts to the UK Exchequer by limiting the proportion of

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development assistance provided to them in the form of loans. This amendment would seek to ensure that development aid is mostly provided in the form of grants.

We are concerned that a new drive to grant loans to developing countries could see them get into debt again. That is why we want to ensure that DfID is limited in the proportion of grant aid and loans that it is able to give to any one country. In government the Conservatives cancelled £1.2 billion of loans owed to DfID from developing countries to help relieve their burden of debt. We are concerned that a new push to provide loans to projects could mean that the debt burden again becomes an issue.

We are also concerned that the British taxpayer should get value for money from these loans. That means that the Government must be sure that payment is forthcoming and guaranteed and that a proper risk assessment is undertaken by Government before projects are considered.

We are also concerned about the countries eligible for DfID loans. Do the Government plan to lend to projects in countries which have failed to pay back debts owed to the UK? Will the Government be supplying loans to heavily indebted poor countries? I beg to move.

Baroness Amos: Amendment No. 22 would place a limit on the ability of the Secretary of State to provide development assistance to a country by way of loans. Clause 6 sets out the kinds of financial assistance that may be provided under the Bill.

I do not believe that we should set out in the Bill limits on the amounts or nature of the assistance that the Secretary of State can provide. One of the principles on which the Bill is built is that the needs of poor people in developing countries must be the driving force behind the choice of form of assistance; otherwise the primacy of the overarching requirement of poverty reduction and the two development purposes will be compromised.

The amendment would require that no more than 10 per cent of financial assistance provided to a country be in the form of loans. The ceiling of 10 per cent is arbitrary. I cannot conceive of any absolute limit being appropriate for the range of countries and circumstances with which we now deal and will deal in the future. For emerging credit-worthy countries such as India and South Africa a higher ceiling might at some point be appropriate.

That said, I recognise the noble Baroness's concern that the Government should not allow developing countries once again to build up unsustainable debt burdens. We share that concern and have been working with the international community to ensure that any loans for HIPC countries are provided only for productive expenditure. Currently DfID's financial aid is in the form of grants. In line with our policy in this area, there is no intention to initiate a new push to provide loans. All the Bill does is to retain the power to provide loans which is in the 1980 Act. This

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will ensure that the Secretary of State has the discretion to act in circumstances which we cannot necessarily predict.

In the light of that explanation, I hope that the noble Baroness will feel able to withdraw the amendment.

Baroness Rawlings: I thank the Minister for her explanation. It was an interesting answer. It is an important matter. I am grateful to the noble Baroness for her concern. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 6 shall stand part of the Bill?

Lord Judd: I have given notice that I shall oppose the Question whether Clause 6 shall stand part. It is again in the hope that my noble friend's response will make any action on that proposition unnecessary.

I seek examples and illustrations. They would be helpful for future interpretation of the Government's intentions. Perhaps I may add to what I said on whether Clause 5 shall stand part. With regard to Clause 6, I seek examples and case studies which illustrate how Ministers view the specific relationship to the impact on poverty. I am struck by what my noble friend Lord Brennan said. There is a tremendous potential and important contribution to be made by the private sector. However, in adopting fairly widespread provisions, it would be helpful if the Government could spell out how they envisage that power working.

I refer to the grouping; I hope that that is in order. It is suggested that we might speak at the same time to several other amendments. I wish to speak briefly to Amendments Nos. 29, 32 and 33.

Lord Brennan: Perhaps I may interrupt my noble friend and through him ask for some advice for those who are less experienced in this House. I saw the grouped list. We now appear to be embarking on a consideration of 12 different amendments to four different clauses. Some of us do not know the order and sequence. Perhaps someone could help us.

Baroness Amos: I shall try to assist. In speaking to a group of amendments, the mover of the first amendment speaks first and any other noble Lords who have either put their names to amendments or have a point to make then speak in turn.

Lord Judd: I hope that my noble friend finds that helpful.

Lord Avebury: Perhaps I may ask a further question. I was not aware that one spoke to a group of amendments when discussing whether a clause shall stand part. A number of amendments may be grouped together on different clauses. However, the debate on whether a clause shall stand part is taken by itself. I am somewhat surprised that the Minister tells us that we can consider whether the clause shall stand part and at

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the same time a number of amendments to later clauses. Perhaps the noble Baroness will confirm that that is the case.

The Deputy Chairman of Committees (Baroness Nicol): On the list of groupings it is clear that if any noble Lord objects he may ask for the amendments to be degrouped. However, failing that, we must deal with them in the order shown.

Lord Alton of Liverpool: I support the point that the noble Lord, Lord Avebury, made about the undesirability of having amendments to Clause 7 in the same group as stand part debates on Clauses 5 and 6. That has led to some confusion. We have disposed of Clause 5 stand part and are now dealing with Clause 6 stand part. Once that has been dealt with, we should go on to Clause 7 and consider the remainder of the amendments in this group.

Lord Brennan: I thank the Committee for those contributions. My state of confusion has now reached a much better educated level.

Lord Judd: I am happy to proceed as the Committee decides, but in the absence of any decision, I had better proceed with the grouping as it is. It is therefore appropriate to say a few words about Amendments Nos. 29, 32 and 33.

Amendment No. 29 is self-evidently vital. The effectiveness and standing of the NGOs, for which we rightly have so much respect, depends on their perceived independence and integrity. They must be demonstrably free of any influence or manipulation that might be interpreted as in any way undermining their unique and special status. I hope that the amendment would help to achieve that objective.

I imagine that Amendment No. 32 is more controversial. For a long time, governments of different persuasions have said that they are committed to the UN target of 0.7 per cent. Progress is now being made towards that objective, but in the second phase of a government with a very large majority it would be timely to establish some yardsticks by which we measured our success in achieving that ultimate target. The indications that I have given in the amendment do not seem unreasonable. We should be able to stop talking about the target being our ultimate objective and actually achieve it, as a number of other countries already have, by 2004-05.

In development debates these days we hear a great deal about targets, especially the 2015 targets and mid-term targets, and about the obligations that developing countries must fulfil to be eligible for more aid. The amendment spells out the obligations on the rich with the same disciplines that we require of the poor.

On Amendment No. 33, I recognise the nature of the statutory bodies listed in the schedule, but I am a little perturbed that, although the clause refers to sustainable development and welfare, somehow the commitment to poverty has dropped out. Notwithstanding the specialised nature of the bodies

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listed in the schedule, whatever they are doing in the context of sustainable development or welfare should also be in the context of the reduction of world poverty. It would be good to ensure that that overarching objective--to use my noble friend's language--of the reduction of poverty was specifically mentioned in that context.

Clause 6 agreed to.

6.45 p.m.

Clause 7 [Terms on which assistance is provided]:

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