Budget Resolutions — Amendment of the Law

Part of the debate – in the House of Commons at 5:54 pm on 17 April 2002.

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Photo of John McFall John McFall Chair, Treasury Committee, Chair, Treasury Committee 5:54, 17 April 2002

I have never been to the right hon. Gentleman's constituency, but I am happy to acknowledge that there has been a problem with waiting lists. However, the Chancellor acknowledges the problems and is putting in place a structure whereby huge changes can be effected. That is the reality of the situation. I well remember the manifold problems under the right hon. Gentleman's Government. The internal market was a disaster and it took the Labour Government their first four years to correct that. The debate in the NHS will go on and will reverberate over the next few years.

As my hon. Friend Mr. Harris said, the shadow Secretary of State for Health has four themes and the big issue behind them is to convince people that the NHS cannot and will not work. What a cynical ploy. That adds up to playing about with people's lives. That will not work and we must counter that argument head on. I am delighted that Mr. Kennedy and his colleagues will join us in doing that.

I come now to the international stage and the important work of the Chancellor and the Secretary of State for International Development. I applaud the Chancellor's Marshall plan speech in Ottawa and his proposal that the international community should provide an extra £50 billion a year. I also applaud the 2015 targets that were agreed. Already, in Uganda, the Government have doubled primary school enrolment and cut class sizes.

However, in other areas we have not been so successful and we must engage in the great debate in the IMF and the World Bank about the future of aid and development. The Treasury Committee was in Washington in January when we met representatives of the IMF and the World Bank. The United States proposes that we give countries grants not loans. Development agency representatives spoke to us on that subject, but we should not get hung up on the issue of loans as opposed to grants. In many ways I agree with the United States that we must have effective change on the ground, but the plan on which we should concentrate is developing a long-term approach to investment in developing countries. That is the big issue to which the Chancellor and the Secretary of State for International Development should turn their minds.

I see one of my colleagues on the Treasury Committee in the Chamber and we have expressed concerns about the effectiveness of the IMF and the World Bank. In the next few months, we will have the opportunity of questioning Horst Kohler, the managing director of the IMF, on that issue. However, we must remember that those institutions combined have annual expenditure of more than $30 billion. We have a seat at that table and it is important that we should put our point of view across.

One of the big surprises for me in the past four or five years has been how much interest ordinary people have in the subject of writing off international debt. In my constituency I communicate reasonably regularly with about 2,000 people who have written to me on the subject and want to be kept informed. That is a cross-party issue. The work of the Select Committee on International Development and others on that has been good and I look forward to continuing that work with them.

However, the big issue facing the Chancellor and the Secretary of State for International Development is trade. We should be considering using trade as a force for poverty reduction. The rich countries spend $1 billion every day on agriculture subsidies and the resulting surpluses are dumped on world markets, undermining the livelihoods of millions of small farmers in poor countries. When developing countries export to rich countries they face tariff barriers four times higher than those encountered by rich countries.

Those barriers cost the poorer countries $100 billion a year—twice as much as they receive in aid. We are giving with one hand and viciously taking away with the other. The rules of the World Trade Organisation on intellectual property, investment and services which protect the interests of rich countries must be looked at again and I ask the Chancellor to take that matter up when he meets his colleagues in the international forum. Most of us who have travelled abroad in the poorer countries realise that many of them have one commodity that keeps them going, but that the international community has failed to address the problem of low and unstable commodity prices that have consigned millions of people to poverty. For example, coffee prices have fallen by 70 per cent. since 1997, costing exporters in developing countries $8 billion in lost foreign exchange earnings. We must tackle trade if we are to bring everyone into the global economy.

I shall finish on that issue. It is always said that we have a global economy, but I contend that we do not, as half the people in the world are excluded. Half of them live on less than $2 a day, and a quarter cannot have a glass of clean water. Every minute, a woman dies during childbirth in developing countries. That is the reality that we face. If we are to tackle the issue of globalisation and bring people into the global economy, we must start with the other half of the world population.

We must also recognise that globalisation and terrorism are linked. As ex-president Bill Clinton said in his Dimbleby lecture last year, we can look forward to our children growing up and growing old—say, to 90 years of age—but we do not want them to grow up behind barbed wire. Globalisation has taken the walls down, which means that there will be less security if we do not collectively pursue proper policies. That is our big responsibility, which is why I welcome the Chancellor's statement and urge him to maintain a stable economy, give us high-quality public services, provide fairness to families and increase employment in this country. I urge him to ensure that our voice on the international stage is recognised and that we as a country do a lot for the other half who are not included in the globalisation process.