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Part of the debate – in the House of Commons at 6:17 pm on 30th March 2009.

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden 6:17 pm, 30th March 2009

I am sure that President Obama is as relieved as I am to know that he has my hon. Friend's support. Those subsidies should of course just go. Their removal is ultimately in the interests of taxpayers in the rich countries and would enable us both to enjoy products better produced abroad and to focus on those things that we are best at producing.

On average, the EU spends almost as much supporting every cow every day as the average income in the poor countries of the low-income group, as defined by the World Bank. That in turn inhibits those countries' ability to compete with us. It is deplorable that the EU should have reintroduced subsidies for, say, milk powder. Milk powder is an important product that is potentially made and consumed in the developing world, but we are undermining that potential through those subsidies.

The fourth step recognises the point that Malcolm Bruce made about the phenomenon whereby the highest tariffs that most African countries face are those that are imposed on them by their equally poor neighbours, and which they likewise impose on those neighbours. One of the reasons why African countries impose those tariffs is that doing so is one of the simplest means of obtaining the revenue to finance their activities. It behoves us in the developed world to help those countries to replace those sources of income with other sources of domestic revenue, so that they can trade more actively with each other. It is significant that 75 per cent. of the exports of European countries go to other European countries, whereas only 10 per cent. of the exports of African countries go to other African countries. The potential for trade growth within Africa is enormous if we can help countries to take that step.

The fifth and final step that we advocate is to focus investment on both physical and administrative infrastructure. In the successful countries of Asia, a high proportion of the population live near the coast, near roads or near navigable rivers. In Africa, the population is highly dispersed and often distant from any means of transport. Without improved transport infrastructure, people will not be able to get their products on to world travel routes and world markets. At present it costs less to get goods from Tokyo to Mombasa than to get them from Mombasa to Kampala. Through our efforts we must help African countries to improve their infrastructure. It is sad that in recent years the proportion of aid that has gone on infrastructure has been declining. We believe that it should be increasing; indeed, something that the Foreign Secretary said in his opening remarks leads me to believe that the Government are also of that view.

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