Development Aid

– in the House of Lords at 3:25 pm on 21st January 2004.

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Photo of Lord Judd Lord Judd Labour 3:25 pm, 21st January 2004

rose to call attention to the role of development aid in tackling world poverty and the part played by the United Kingdom's aid programme; and to move for Papers.

My Lords, I declare an interest as a former director of Oxfam and VSO, and as a trustee, past and present, of NGOs concerned with overseas development and international security matters. My thanks go to the Overseas Development Institute and Saferworld, which, together with Oxfam, have been particularly helpful in the preparation of my thoughts for this debate.

It is significant that my noble friend the Leader of the House will herself reply to the debate. That encouragingly underlines the priority given to overseas development by the Government. The war on poverty has not yet been won. The millennium development goal agreed at the United Nations in 2000 is to reduce poverty by half by 2015. Although the latest estimate by the World Bank is that the target will be met, other agencies are more dubious, not least because of the continuing adverse effect of debt on some of the poorest countries, despite the imaginative and outspoken lead given by our own Chancellor of the Exchequer in trying to mobilise the international will and effort to put that right.

The UN Secretary-General, Kofi Annan, in his 2003 progress report to the UN, reminded us that still 1.2 billion people live on less than a dollar a day; 800 million are undernourished; 153 million children under five are underweight; and in sub-Saharan Africa and western Asia the proportion of people living in poverty has increased since 1990. Nearly 11 million children under five die every year, most of them from easily preventable diseases or treatable causes. In sub-Saharan Africa there was no significant progress on child mortality between 1990 and 2001, and there is little indication anywhere in the developing world of sufficient progress to meet the MDG on improved maternal health. All that is alongside the devastation of AIDS.

I hope that my noble friend will be able to tell us today what are now the Government's forecasts on each of the sectoral MDG targets and what can be done to ensure that they are fulfilled. It would also be helpful to hear her observations on the debt burden of the poorest countries in this context.

Greatly to the Government's credit, aid expenditure has grown by 93 per cent in real terms since 1997. It is expected to reach 0.4 per cent of gross national income by 2006 as compared with its lowest-ever level of 0.24 per cent of gross national product at the end of the 1990s. Nevertheless, it is worth recalling that, when the government in which I served went out of office in 1979, aid stood at 0.51 per cent of gross national product. As long ago as 1970, following the much respected Pearson Commission report, the target of 0.7 per cent of gross national product for aid was adopted by the United Nations General Assembly, and the United Kingdom signed up to that. In 1979, we were making significant progress towards the target, but the successor government went into reverse.

In 2002, Norway had reached 0.89 per cent of gross national income, and is committed to reach 1 per cent by 2005; Sweden stood at 0.83 per cent, the Netherlands at 0.81 per cent and Luxembourg at 0.77 per cent. Ireland is now evidently committed to reach 0.7 per cent by 2007, and Belgium has made a legal commitment to reach 0.7 per cent by 2010.

It would be immensely encouraging if my noble friend could tell the House today when we expect to reach our 0.7 per cent target. Such a commitment, when we next take on the presidency of the European Union in 2005, would greatly enhance the United Kingdom's influence with other members of the Union in this sphere of policy, and would similarly strengthen our position when we host the G8 in the same year. It would also be a powerful lever to mobilise international support behind the Chancellor's proposed international finance facility.

Of course it is not quantity alone that matters; here the evidence is positive. With the end of all the East/West politicking of the Cold War, aid is becoming more effective, and, in many ways, the British Government lead on that. United Kingdom aid is well targeted on low-income countries and is more poverty-focused than that of most other donors. This poverty focus has been given legislative endorsement by the International Development Act.

The present Government have played a leading role in untying aid. In 2002 the UK was one of only two government donors whose aid was 100 per cent untied. The United Kingdom is notable among donor governments in having a single department of Cabinet-level status wholly focused on international development. I hope that my noble friend will confirm that that will remain the position.

The Department for International Development has a proactive, cross-Whitehall remit on policy affecting international co-operation and development and I hope that this will develop. It is indispensable. If the battle is to be won it will inevitably involve financial policy, trade policy, debt policy, environment policy, transport policy, defence policy, foreign policy, immigration policy and much else besides aid itself.

Internationally, the United Kingdom has played a lead role in DAC efforts to increase donor co-ordination and thereby reduce the burden on aid recipients. I believe that in everybody's estimate, DfID has high quality, deeply committed staff who have enjoyed under successive Ministers successful, strong, determined and visionary leadership. The positive, principled personal engagement of the Chancellor on Third World issues has made for a powerful and invaluable alliance between DfID and the Treasury.

In the end, the battle to contain global terrorism will be won in hearts and minds. That is why Guantanamo Bay and comparable arrangements elsewhere are not only profoundly wrong but disturbingly counter-productive. We must always be careful about simplistic assumptions concerning a link between poverty or deprivation and terrorism. The overwhelming majority of poor people in the world would never contemplate an act of terrorism. In my own direct experience I have been repeatedly humbled by the value systems of the poor. They would be horrified if they witnessed an act of terrorism in their neighbourhood. But in the midst of their struggle to survive and to find the next meal for their families, that does not mean that every morning when they awake their priority is the hunting down of extremists capable of terrorist action. Sometimes, in their pain and struggle, they may be tempted to wonder whether, however unforgivable terrorist action may be, the extremists are not perhaps on their side. It is in this constituency of ambivalence that the cynical and manipulative extremists thrive. It is hard to find in history evidence of extremist activities initiated by the poor. They are usually masterminded by the relatively well endowed playing on the disadvantage of the oppressed.

Social and economic progress are not therefore only morally right—and that must always be the driving motivation—they are essential to reduce the number of desperate people open to exploitation. If we want to strive for a viable, peaceful world, redistribution of wealth, redistribution of power, justice and human rights are not just value options, they are inescapably vital. We have effectively to address exclusion and the concentration of power. Order cannot be imposed: that is a self-deception destined to disaster. Order has to be built; it has to be an order in which increasingly everybody has a stake.

Aid and development must never be about buying people for our system. It must be about building a system which belongs to everybody. That is how the rejectionist extremists—and they are there—will be marginalised. In trade policy we have to be certain that the agendas at the World Trade Organisation or wherever, are agendas which belong to the poor as much as to the rich and that they are not at best patronising agendas to which the poor, in what we arrogantly tell them is their own best interests, are being asked to respond.

In environment policy it is a matter of ensuring that we face up to how the poor will once more suffer the worst penalties for the self-indulgence of the rich. Global warming is set to kill very many more people prematurely than terrorism ever will and to displace countless others. In population policy, however essential, it is necessary to be honest about patterns of consumption as much as concerned with patterns of population growth.

As regards migration, it is imperative to recognise the gigantic flaw in the global market by which we set so much store, when we have the free movement of capital and investment, the free movement of goods, but no free movement of people. That is not to argue that the free movement of people is a practical possibility, but it is to accept that its absence presents policy challenges in terms of global, economic and social justice which the flawed market cannot meet.

From Afghanistan we hear calls for more resources for security. These must be answered. But if the obstacles to security are not to be multiplied we have to redouble our efforts and expenditure for economic and social progress, otherwise we shall be like a bad doctor frantically prescribing more and more palliatives to treat the symptoms while failing to come to grips with the disease. If new and hopeful political arrangements are to work, the widest cross-section of people throughout Afghanistan must experience better health facilities, better schools for their children, better water, reliable food supplies and improved housing and transport. To welcome political developments while failing sufficiently to underwrite them with our commitment to development, could quickly prove cynically hollow in effect.

A charge of cynicism could apply in another sphere as well. We speak of justice and the rule of law. These cost a lot of money, for facilities, training and personnel. Whenever we advocate the rule of law we must ensure the wherewithal, and this applies to prisons as well if there is to be any chance of rehabilitation.

The priorities for Iraq are urgently similar. I was frankly disturbed by an Answer to a recent Written Parliamentary Question. The Treasury informed me on 18 December that,

"The Ministry of Defence has drawn down £1 billion in last year's spring Supplementary Estimate from the £3 billion set aside to cover the cost of operations in Iraq. The Chancellor in his pre-Budget Report Statement confirmed that £2 billion has been carried forward into the Special Reserve for 2003–04 and in addition prudently set aside a further £800 million over two years; £500 million in 2003–04 and £300 million in 2004–05 for our international commitments in Iraq and the war against terrorism".

The Answer continued,

"At the Madrid Donors Conference in October the International Development Secretary, Hilary Benn, announced the Government's pledge of £544 million to support the reconstruction of Iraq over the three years from 2003. Of this, £296 million will be for the next two financial years, including bilateral funds and the UK's share of proposed EU contributions to Iraq". —[Official Report, 18/12/03; col. WA 190.]

There is more than £3 billion for military operations but only £544 million for reconstruction. Do we or do we not want to win the peace as well as the war? Furthermore, there is the worrying evidence that funds are already being withdrawn from important humanitarian development projects elsewhere to finance relief and development in Iraq.

Many of us remain deeply concerned about the degree to which the sense of international community and the commitment to the international rule of law were damaged by the way in which war was waged in Iraq. There has been less discussion about the problems faced by the UN in the aid field where funds have stagnated and are becoming increasingly hobbled by special earmarking. In effect, donors who are not happy with the governance of programmes of individual agencies are avoiding the required structural reforms and cherry-picking the projects and programmes they like. The FAO is one such example. This is obviously wrong. We need the UN more than ever to set standards, build consensus, co-ordinate policy and deliver programmes. Kofi Annan has set aside the so-called "quiet revolution", setting up instead the new high level panel on threats, challenges and change. It would be extremely interesting to hear the observations of my noble friend this evening on how the Government are responding to all this and what their priorities are.

There are of course already a number of relevant initiatives. These include the World Commission on the Social Dimensions of Globalisation and the Helsinki Process. Can my noble friend tell us more about the Government's part in these and similar initiatives? Can she at the same time tell us where the Government stand on new proposals for a United Nations-sponsored international treaty on the arms trade, a trade which constantly thwarts development and hampers the fulfilment of NBG goals?

In January last year, the Prime Minister said:

"there can be no new consensus, no new order, no stability, without tackling the appalling poverty that afflicts nearly a half of the world's population. Action to deal with this—possible with the right vision and imagination—is the best investment in its own future the developed world could make".

I, for one, wish the Government well in their commitment. I urge them to accelerate and maximise the momentum that they have generated. I beg to move for Papers.

Photo of Lord Freeman Lord Freeman Conservative 3:40 pm, 21st January 2004

My Lords, it is a great pleasure to follow the noble Lord, Lord Judd. I know that I speak for all on the Benches opposite in congratulating him on initiating this debate and for his very powerful speech. I calculate that this is now the 43rd year during which the noble Lord has been speaking with great energy, passion and authority on the subject of international development. I hope that he will continue to do so for many years to come.

I cannot hope to match the noble Lord's experience or knowledge, but I agree with what he said about the concern that the targets for alleviating world poverty by 2015 by a measurable degree may not be met. The noble Lord was right to raise that concern. Therefore, all noble Lords should be reinvigorating not only in challenging the Government but also in supporting the Government in helping us to meet those targets. This is not a matter of partisan politics. The Conservative Party as a whole—certainly the Conservatives who take an interest in the subject—congratulate the Government on what has happened over the past six or seven years. With increased prosperity in this nation, we have been able to increase the proportion of Government expenditure and GDP spend on aid. The initiatives on debt relief, which I have seen at first hand in a number of countries, have brought real and tangible benefits. This is not a matter of beating up the Government; it is a matter of congratulating the Government on sensible moves in the past few years.

I shall speak briefly about two countries in sub-Saharan Africa where I have practical experience. I hope that my comments will complement the philosophical approach taken, in some respects, by the noble Lord. I speak from an unpaid—disinterested in an economic sense—perspective about both countries. But I deeply care about both Uganda and Sierra Leone, which are good examples of the effectiveness of aid and its shortcomings. Sadly, both countries have experienced very severe civil wars during the past two decades, causing great disruption to their economies and great poverty. Measured by United Nations criteria, Sierra Leone is one of the poorest countries in the world, with the lowest gross national product per head in Africa. To see the poverty, particularly the rural poverty, in Uganda, close to the war zones in, currently, the north-east of the country but in previous years in the north-west, and in Freetown in Sierra Leone, causes anyone who has been to those two countries great distress and a determination to do something about it.

I believe that there are three conditions for effective international aid. The first condition is security; that is, the nation itself must be secure and free from war, conflict, corruption and bad government. The second condition is that the aid that is provided must be focused. I pay tribute to the practice of the British Government's aid programme over the past 20 years, and, in particular, over the past five years. The third condition is that we must have a fair world economic system involving tariffs as well as direct investment and trade, which is compatible with and supplementary to our aid programme.

I turn first to security. Perhaps I may take Sierra Leone as a good example where there are still 13,500 soldiers drawn from mainly Nigeria, Kenya and Bangladesh, but with a significant contribution by the British Armed Forces. I say to the Minister that, from first-hand experience, I very much hope that the United Nations, on the encouragement of the British Government, will not take a precipitous view of the withdrawal of all those troops before the end of this year. If that should happen, the army and police in Sierra Leone will not be sufficiently trained—nor will they have sufficient numbers—to provide internal security.

It is important to have governments who are not corrupt. The British Government should provide the examples from our democracy as to how that should be observed and properly policed. I think that your Lordships will wish to pay credit to President Museveni in Uganda and to President Kabbah in Sierra Leone for setting an excellent example. But it is more important that there is a lack of corruption and distrust throughout society. Part of the problem is the unfair wages that are too low and which are paid, certainly, in local government and in certain industries. In the mining industry in Sierra Leone, poverty wages undoubtedly were a contribution to the export of illegal diamonds to Liberia and thence on to unsuitable—perhaps even terrorist—hands. It will be very difficult in some of these poor countries, but an attempt to raise the wage level should make a real contribution to eliminating corruption and improving good governance.

Secondly, I turn to the focus of aid. The United Kingdom has a good record. The noble Lord, Lord Judd, will know, with more experience than I have, where the examples lie; but it must be said that as regards the international agencies, and even the charities, the aid programme is unfocused. It is bureaucratic. A smaller proportion of the aid than one would wish reaches the poor and helps to develop the economies and societies of these countries. I agree with the noble Lord, Lord Judd, who mentioned a number of examples where focus should continue to be made. The British Government should be encouraging our colleagues in the European Union—let alone international agencies—to encourage an emphasis on health.

The standard of some hospitals in some of the poorer countries in sub-Saharan Africa is an absolute disgrace because people treat life so cheaply, when they should not. Some simple, basic investment in some of those hospitals is essential. There need to be schools for basic literacy. There should be employment for the young men and women who have been involved in conflicts in sub-Saharan Africa, many of whom are now without jobs because either they are physically disabled or there are no jobs available. There should be roads to transport agricultural produce to the ports or airports, which many African countries have relied on in the past for exports. Finally, of course, there should be electricity.

I strongly believe that fair world economic trade is absolutely essential. The sooner that all the parties in this country can unite in calling for a dramatic end to the scandal of the common agricultural policy and the agricultural subsidies the better. I have seen first-hand examples, and the Vice-President of Sierra Leone, who was in the British Parliament last week, underlined the fact that without the unfair subsidies provided by European funds, agricultural output—exports, such as rice, tea, coffee, fruit and vegetables—would increase tenfold if there could be fair trade.

Economic investment is appropriate in certain areas; that is, investment by the United Kingdom and Europe in agriculture, mining and civil engineering. The nations themselves must present sensible and viable suggestions where that can be directly linked to a reduction in poverty because there is an increase in prosperity and jobs. Nations should co-operate, particularly in Africa, more on a regional basis. The markets can be bigger and the economic prospects for European companies can be more attractive.

I conclude by emphasising that good business investment and trade—not all businesses take a jaundiced and unfair view of investment in developing countries—should march, and can march, hand in hand with good development aid. The practices of both complement each other, which I am sure that your Lordships would want.

Photo of Lord Thomson of Monifieth Lord Thomson of Monifieth Liberal Democrat 3:49 pm, 21st January 2004

My Lords, I join with the noble Lord, Lord Freeman, in paying tribute to the noble Lord, Lord Judd, for initiating the debate. He spoke to the House with his usual passion and conviction but, above all, with knowledge of the subject. I have a modest declaration of interest to make as a fellow patron of the Council for Education in the Commonwealth, of which I was the first chairman.

I wish to concentrate on the importance of educational co-operation as a vital element in our total aid strategy, particularly within the Commonwealth. The arrival of two new Ministers, Hilary Benn for development aid and Charles Clarke for education, provides an opportunity for a fresh appraisal of the pattern of priorities. I warmly welcome Charles Clarke's statement at the recent meeting of Commonwealth education ministers in Edinburgh that education must be at the very heart of the Commonwealth.

That conference went on to agree an action plan for Commonwealth education, which was put before the Commonwealth Heads of Government Meeting in Nigeria. After the conference, I was grateful for the assurances from the Leader of the House to your Lordships' House that, despite the many divisive political preoccupations in the Commonwealth, the Government took the Commonwealth dimension in education seriously.

I hope that the Government will now take a lead in maintaining the momentum of those initiatives from the education Ministers and from CHOGM. It is important that DfID, the Foreign and Commonwealth Office and the Department for Education and Skills work closely together in their educational aid strategy. In the past, the Department for Education and Science was too insular and isolationist about the international dimension of education and DfID, for all its worthy work, has been too narrow and ideologically dogmatic in relation to the degree of priority given to primary education and poverty.

The role of universal primary education is, of course, absolutely fundamental, as the noble Lord, Lord Judd, has said, in winning the battle against poverty. If that battle is to be won, educational aid is needed on many fronts, apart from the primary schools of the poorest in the world. Action from technical education through to post-graduate projects, such as the Commonwealth Scholarship and Fellowship Plan, is needed.

To make Britain's aid strategy fully effective we need the three key Ministers in the Government to back a common vision of the role of education in our overseas aid policy. That vision must recognise that ending poverty is not an end in itself, but a means to a more decent society with civilised values. It is here that the educational element in aid policies not only contributes to the ending of poverty, but also contributes to the making of a decent and better society. Of course, for their policies, DfID, the DES and the FCO have to compete for scarce resources within educational aid, whether for poverty and primary education, for Commonwealth fellowships, or for the FCO's Chevening Scholarships, but the Government have a special responsibility to ensure a more coherent educational balance between those various claims.

For historical reasons the Government have a special responsibility to lead the Commonwealth in that area. The FCO's Chevening Scholarships hang on year by year. I would be grateful for any information that the Minister can give the House about their likely future. I understand that the Commonwealth Scholarships and Fellowships Plan has been guaranteed until 2006. I welcome that, but would be glad to have absolute confirmation to that effect. The CSFP, which was, in some ways, the origins of the Council for Education in the Commonwealth that I mentioned, and which has lasted for nearly 50 years, is a success story. I believe that within the Government a directory has been drawn up of the 20,000 holders of the fellowships and scholarships over the years. It makes an impressive list of achievements.

An active profile has been made of 5,000 of the scholarship and fellowship holders and they have made a positive contribution to poverty reduction and to cultural ties. That is something for which Her Majesty's Government and governments of all parties can accept a great deal of credit. The United Kingdom alone has made £12 million available, which exceeds the entire budget of the Commonwealth Secretariat. That is a very striking figure.

On the role of the Commonwealth Secretariat, we welcome the re-election of Don McKinnon as Secretary-General of the Commonwealth. We wish him well in his work during his new term of office. While the education section in the secretariat seems fairly secure for the time being—a welcome change from the clouds overhanging it a year or so ago—it is badly under-resourced. Currently in that section there are only four secretariat finance posts, one of which has been deliberately left unfilled for the moment to save money. The staff have only three professionals working on the main budget, which surely is grossly inadequate to carry out all the mandates from Edinburgh and CHOGM; it contrasts ill with the situation of 10 years ago when there were as many as nine professional posts in education. That is an area where, because of Britain's special position within the Commonwealth, the Government can give a lead.

In world affairs the Commonwealth remains a very remarkable organisation that bridges the gaps between all the various economic groups in the international community from the richest to the poorest. As a former Secretary of State for Commonwealth Affairs, I am bound to say that, as the years have gone by, the Commonwealth has not been at its most successful in dealing with historical legacies of empire and colonialism. The Commonwealth is at its best when it uses its common language—a tremendous asset in terms of a more peaceful and decent world—in other fields of co-operation and particularly in the area of education.

I hope that the Government will be able to take a lead in building on the education action programme of the Edinburgh Commonwealth Heads of Government Meeting and at the follow-up conference in Nigeria. I also hope that they will be able to report positive progress when the education Ministers meet next in Malaysia and when CHOGM meets next in Malta.

Photo of Baroness Jay of Paddington Baroness Jay of Paddington Labour 3:58 pm, 21st January 2004

My Lords, I follow other noble Lords in congratulating my noble friend most warmly on the vigour and passion with which he introduced the debate. I declare an interest as the honorary chair of the council of the Overseas Development Institute, on which council my noble friend served with great distinction for many years. I am very grateful to him for raising issues in the way that he has. He is right that in recent years the United Kingdom has had a very good record in international development. We have made good progress both financially and institutionally at home and on the ground in developing countries.

My special interest as chairman of the Overseas Development Institute, and indeed, through my work in HIV/AIDS, has been recently in southern Africa, and I shall be visiting there again next week. It is clear that, however strong our record has been in the past, we need to do even more with even greater vigour. After all, in sub-Saharan Africa half the population still lives on less than one US dollar a day, and only half of all primary school children attend a school, even when it is there. Even in South Africa, which is formally and technically described as a middle-income country, 3 million people live on less than one US dollar, and 10 million people—23 per cent of the population, or almost a quarter—live on two US dollars a day.

We now know a great deal about the huge health care, economic and other impacts on those countries of the HIV/AIDS pandemic, although unfortunately we know too little about how to deal with them. We are beginning to understand the long-term social, psychological and community problems that are being thrown up by the enormous impact of HIV/AIDS. I shall illustrate that, to make it possible to understand in human terms.

A small research project in which the Overseas Development Institute has been involved in rural KwaZulu-Natal shows that in one village 66 per cent had experienced more than one family member death from HIV/AIDS in the past three years. Tragically, of the 178 children who were included in the village survey, more than 100 played a role as the primary care giver in families in which the adults were already dead.

The consequences of that kind of social and community disaster will clearly resonate for many generations, however generous and well directed the aid programmes of this country and others may be. That kind of stark prediction must not deter us from being ambitious today. That is why I congratulate the Government on their determination. They must go ahead with raising expectations with our allies and friends in other countries on what strong leadership, the right vision and the necessary resources can achieve. We must use our hard-won influence with countries, especially the United States, to ensure that they understand our vision and our expectations of what we should all do.

As my noble friend Lord Judd has already said, next year the United Kingdom will hold both the presidency of the European Union and the chair of the G8, which are both positions from which we can exert our considerable influence. I am sure that the Government are considering how to use those opportunities, and I want to make two suggestions.

First, we need to infuse the donor commitment to Africa with a more concrete vision of how poverty is to be dealt with. We see our own political commitment from the evident leadership of the Prime Minster, the Chancellor of the Exchequer and, of course, my noble friend Lady Amos. We must congratulate her on her roles in both the Foreign and Commonwealth Office and on her short tenure as Secretary of State in the Department for International Development. Her leadership in this area has been enormous, and it is splendid that we can continue to hear her speaking from the Front Bench on these issues, even though she is now Leader of the House.

I raise a note of caution for my noble friend and other colleagues in the Government, which, again, is one to which my noble friend Lord Judd referred. We must be careful not to allow our current and understandable concern with security to become so dominant that other development issues take second place. I do not think either that we must consider giving poverty reduction a very high profile and high priority only when we think it may help to reduce international security risks.

It would be helpful to have an assurance from my noble friend that development issues will remain high on the agenda that will be established and created in the international fora in the next 18 months. It is important that worthwhile aid budgets to countries such as South Africa, which are regarded technically as middle-income countries, are not threatened by the huge additional expenditure that the Government are undertaking in security and defence.

It is true that after the Monterrey meeting on financing for development in 2001, and the Canadian summit of the G8 in the same year, the long-term decline in global world aid has begun to be reversed. DfID has pledged £1 billion for Africa by 2006, and other donors have been similarly forthcoming. The Bush Administration's Millennium Challenge Account is currently underfunded, but in my view the existence of the account is an example of a new commitment from what some of us might consider a surprising quarter. US aid to Africa as a whole is expected to double in 2004, and sub-Saharan Africa already receives some 20 US dollars per capita in aid. None the less, we must remember the context of that against the extremely low incomes of that region. There is absorbable capacity for more aid and, collectively, we should be striving to provide it. My noble friend Lord Judd was right to raise the question of whether there will be a new initiative on debt relief.

We are all aware that the issues of development go well beyond financial assistance. The problem, and our concern about how to address it, is how to achieve economic growth in Africa, since growth—growth with equity and growth with human development—is necessary to achieve sustainable development for the African population.

Again, the UK Government have a good record. We have rightly highlighted good governance, and have embraced those countries that are committed to democracy and the rule of law. Our important support in these areas to NePAD—the New Partnership for Africa's Development—is admirable. Again, the leadership of my noble friend Lady Amos, has been particularly good. The United Kingdom has emphasised health and education as underpinning development, in the way in which the noble Lord, Lord Thomson, suggested was important. We have strongly supported those governments committed to the universal access goals of the Millennium Declaration.

We have also encouraged participatory processes and the preparation of poverty reduction strategy papers—the main vehicle for debt relief and the framework for disbursing additional funds in the poorest countries. All of those policies that the United Kingdom has developed support appropriate development, and the Government should be congratulated on pursuing them. However, we still need to look clearly, carefully and with great energy at the continuing difficulties in the productive industries, such as agriculture. Africa still finds many barriers to trade, which also exist in industrial areas.

My second concern is about European development co-operation, which is another topic on which the Overseas Development Institute is engaged, and on which this House is currently conducting an inquiry in Sub-Committee C of the European Select Committee. If we look to 2005, which will be during our presidency of the European Union, a decision must be made as to the shape of the new Commission. I hope that the Government will exert pressure to influence, and ensure, that one senior commissioner is responsible for development policy that is independent and separate from foreign policy within the EU. The current balance of responsibilities between the Commissioner for Development and Chris Patten, the Commissioner for External Affairs represents a compromise that does not necessarily work.

The other key outstanding issue in the run-up to and during the UK presidency will be the settlement of the financial perspective, which will fix European budget spending from 2007 to 2013. I hope that we can work to ensure that the European Development Fund provides that the funds destined for the poorest countries are protected, and that we do not simply, through the European Union, concentrate entirely on those countries where we have primarily strategic interests. If we can use our influence internationally to achieve collaborative work—I echo the noble Lord, Lord Thomson, in focusing on the Commonwealth activity in this field, and through our presidency and interests in the European Union—I am sure that the Government's very good record will continue.

Photo of Lord Griffiths of Fforestfach Lord Griffiths of Fforestfach Conservative 4:08 pm, 21st January 2004

My Lords, like others, I congratulate the noble Lord, Lord Judd, on introducing this subject. It is a privilege to follow the noble Baroness, Lady Jay, who brought together the financial and non-financial aspects of aid, as well as her experience on HIV/AIDS in Africa and her tremendous commitment in doing something about it.

The debate is about development aid, and in particular, its relationship with tackling world poverty. It comes at a time when globally—not only in the UK—we have seen a tremendous increase in aid. In the latter half of the 1990s there was an initiative to reduce or forgive debt in developing countries. Then, in 2002 there was the Monterrey meeting from which we had a commitment, as mentioned by the noble Baroness, from the US and Europe to increase aid by some 16 billion US dollars a year by 2006. If aid amounting to roughly 50 billion dollars a year is moving from the rich to the poor countries, that represents an increase in the order of 30 per cent.

In addition, we have had the proposal from the Chancellor of the Exchequer, one which I have publicly supported on a number of occasions from these Benches, to use the private international capital markets to raise funds and supercharge the process of giving aid in order to meet the 2015 millennium development goals.

However, I should tell noble Lords that a great deal of scepticism is being expressed in the circles in which I move on exactly how aid reduces world poverty. That is because aid is simply money given by the UK Treasury to the treasuries of developing countries. Either that money can be consumed with little resultant increase in growth or it can be invested, with the potential of producing a high yield. In making the case for aid, the World Bank has stated that:

"Over the last 40 or 50 years, aid has been highly effective, highly ineffective and somewhere in between".

So it is not obvious that higher levels of aid are automatically effective.

Let us look at the statistics for aid given to sub-Saharan Africa over the past 30 years. Aid as a percentage of the GDP of sub-Saharan countries has risen from around 5 per cent to more than 15 per cent. The rates of growth in those countries have reduced from 2 or 3 per cent annually to zero or even negative rates. Last month the respected economic think-tank, the Institute of Economic Affairs, expressed its scepticism about this:

"Ultimately aid fails miserably owing to its corrupting psychology and politics. It inculcates the belief that development comes from outside and not through sustained domestic effort. It focuses energies on distributing the spoils of politics rather than on productive wealth creation. It allows elites to extract funds through beggary or blackmail while perpetuating damaging policies at home. Aid delays rather than promotes much-needed policy reform".

I fundamentally disagree with that and I want to use my time this afternoon to explain why I do so and why there is a sound basis for using aid to reduce poverty.

The starting point is to acknowledge that the only way to reduce world poverty is through an increase in world economic growth. The dramatic examples of the past 10 to 15 years are China and India. For more than a decade China has achieved an economic growth rate of 8 per cent and has seen the percentage of its people living on a dollar or less per day falling from 33 per cent in 1990 to 16 per cent in 2000. India has achieved a less dramatic growth rate of just over 4 per cent, which has resulted in a noticeable reduction of poverty. If economic growth is the key to reducing poverty, how do we achieve it?

I turn to the Treasury proposal for an international finance facility and the chapter headed, A New Approach to Aid, and reports from the World Bank. Both argue that growth in developing countries depends fundamentally on the policies that they follow: macro-economic stability, transparency in government, a sound investment climate, trade liberalisation and the local ownership of reform programmes. I offer one statistic to support those observations. The World Bank has looked at low, middle and high-income countries to see how many days it would take to start up a business. In the low-income countries the average is 70 days; in middle-income countries it is 50 days, while in Canada and New Zealand it is two days. Against the background of economic growth causing poverty reduction and growth arising from the policies adopted by developing countries, we can argue the case for aid.

I believe that aid is particularly effective in two areas: first, in helping poor countries to build up capacity in public administration and in the private sector so that they can operate market economies, generate economic growth and attract foreign investment; and, secondly, when countries are moving in that direction, we should acknowledge that it will be decades before they have clean water, universal primary education, public health and a proper transport infrastructure. At this stage, laissez-faire is not enough. A strong case can be made for giving financial aid to those countries which have chosen reform because it will yield a high return.

This is a very different case for aid from that made in the 1960s, 1970s and 1980s, when aid was linked to market failure, protectionism, state planning and expanding public sector corporations. Along with other speakers, I strongly believe in the case for aid. The reason I do so is that if we can encourage developing countries to introduce reforms in the direction I have indicated, we shall see a high pay- off. As I have said, against that background laissez-faire is not enough.

But we still have a trusteeship responsibility to taxpayers in our own countries. We must ask whether we can do more to ensure that aid is used effectively. I should like to suggest three things that we could do. First, where possible, development aid should be allocated on the basis of measurable outputs and not just on the money given. I realise that that may not be possible in certain areas such as capacity building, but we could do more to specify performance criteria such as the number of children vaccinated, reading and writing targets met in schools, miles of roads built, kilowatts of electricity generated and the ease with which new businesses can be created. That would build on the criteria already set out in the Treasury and DfID paper I mentioned earlier. Further, the International Financing Initiative has made the position clear by stating that recipient countries are expected to pursue anti-corruption policies, to improve transparency in public sector management and to lay out their poverty reduction strategies. However, I believe that we could go one step further.

Secondly, in terms of the delivery mechanisms in recipient countries, the private sector and the institutions of civil society rather than simply government could and should be asked to do more.

Thirdly, development aid needs to be the subject of greater external scrutiny. The effectiveness of funds given should be verified by independent external auditors and their reports published. Too often there is a lack of post-aid donation auditing and publication.

In conclusion, the scale of global poverty outlined by the noble Lord, Lord Judd, in opening the debate remains a scandal. We cannot simply stand back and adopt a posture of laissez-faire. Reducing world poverty demands a substantial additional boost in development aid. For those countries which choose to reform, it will yield high returns. But we in the rich countries must also act responsibly. The challenge is this: do we have the political will to act, and to act now? I sincerely hope that we do.

Photo of Lord Dubs Lord Dubs Chair of Labour Peers 4:18 pm, 21st January 2004

My Lords, I join in the tributes paid to my noble friend Lord Judd for initiating this debate and for having spoken with his usual authority based on a great deal of experience in this issue. I should also declare an interest in that I have served as a trustee of or on the committees of a number of development agencies.

I find it deeply shocking that one and a half billion people in the world live on less than two dollars a day. Many of them are in Africa, although desperate poverty is also found on other continents. The disparity between the affluent West and the poverty in particular of sub-Saharan Africa presents a challenge to us all. It lays on us an enormous responsibility to act decisively and, as the noble Lord just observed, to show proper political will.

Looking at it in the round, the UK has a good record. Not long ago the Prime Minister expressed a passionate commitment to tackling poverty in Africa, and in DfID we have an excellent department, one of the best among the richer countries of the world in dealing with these issues. We have taken the initiative by writing off the debts of the poorest countries of the world. We have also initiated schemes whereby our aid is not tied to trade. So, all in all, our record is good.

As my noble friend Lady Jay said a moment ago, by 2005 we will have increased our bilateral aid to Africa to £1 billion per year. And yet we still have not reached our target of 0.7 per cent of GDP. I join my noble friend Lord Judd in asking my noble friend on the Front Bench whether the Government can give an indication of the year by which we will feel able to meet that target.

Of course, it is not an issue just of aid in isolation. We must also achieve fairer trade. It is no good just giving aid to poor countries and helping them to improve their infrastructure for developing and selling more products if we then slam the door on our markets while subsidising our own producers. That does not make sense and it is not right. In the fullness of time, we must properly appreciate that trade and the opportunity to earn more money are essential if poor countries are to raise their living standards.

We were all desperately disappointed at the failure of the WTO talks in Cancun. We had hoped that further talks and initiatives would be possible by December, but I fear that that has not been the case. It has been quoted on many occasions that the average EU cow receives more financial support than 1.5 billion people—perhaps even more—in the world today. We simply cannot go on accepting a system where we subsidise agriculture through the CAP. I know that British government policy is against the CAP for that reason, but the CAP continues to have that major flaw. We cannot go on supporting a system that penalises poor countries by denying them markets in the West and making it difficult for them to compete, unsubsidised, against subsidised western producers.

It is not only subsidies through the CAP, but also market forces that work against poor countries. We will all have read at great length in the newspapers how coffee producers are receiving ever-smaller returns, while coffee prices in restaurants and coffee houses in the West continue to go up. That disparity is not to do so much with subsidy as with an imbalance of market forces. That also works to the detriment of the poor.

I shall refer briefly to the EU aid programme. It has improved in recent years, but I would still like to see it as focused on tackling poverty as is the British aid programme. Too much of the EU aid programme is still disbursed on political issues rather than on poverty.

It is important that any programme to eradicate poverty focuses on children. Every year, more than 10 million children under five die of preventable illnesses. That is 30,000 children per day. More than 500,000 women a year die in pregnancy and childbirth. Such deaths are 100 times more likely in sub-Saharan Africa than in high-income, OECD countries. That is a scandal.

Children need more support and help. I was assisted in visiting Bangladesh by a leading development agency, Plan UK, to look at programmes to improve the health and education of children in Dhaka and in some poor villages. I was impressed by the effectiveness of a development agency programme aimed at involving children themselves in tackling their own situation. Initially, I was a little sceptical, but having seen the programme in action in the field, I was most impressed. Both in an urban slum in Dhaka and in villages, the programme was helping to improve the health and education of children and, through children, of the families themselves.

I visited a village school where the children were particularly concerned. They called an emergency meeting because one of the children had been taken out of school to get married at the age of 14. The children were developing a programme to alert families in the area that that was not a good idea. I also saw an enterprising way of improving educational attainment among children by running a supplementary education programme alongside that in the state schools.

My noble friend Lady Jay spoke about AIDS in Africa. She covered that topic well. I understand that AIDS is now the biggest single threat to African development. In some areas, the infection rates are as high as 30 per cent. It is estimated that 2.3 million people died of AIDS in 2003 in sub-Saharan Africa alone. That is a tragedy not only for the families that are directly affected; the HIV/AIDS epidemic is also cutting economic growth by more than 1 per cent a year, because some of the most productive members of the workforce are affected. Another problem results from the epidemic; that is, the social crisis caused by the large number of children orphaned by AIDS and the need for programmes to help them and their families as their parents reach death.

Although the figures in some sub-Saharan African countries are very high, there is hope to be gleaned from the situation in Uganda. Largely due to prevention programmes, HIV prevalence there has fallen to 8 per cent. I understand that that is the best record in Africa.

I shall conclude by repeating what I said a moment ago. The support of children who have become AIDS orphans is a particular problem in many parts of Africa. I am pleased both that DfID has accepted that as part of its work and that many development agencies working with children are making a particular point of supporting those unfortunate children and helping them to develop their lives.

I give the Government a great deal of credit for their work in development aid. I would like them to promise to meet the 0.7 per cent target.

Photo of Lord Soulsby of Swaffham Prior Lord Soulsby of Swaffham Prior Conservative 4:27 pm, 21st January 2004

My Lords, the House should be grateful to the noble Lord, Lord Judd, for giving it the opportunity to debate an important issue. I congratulate him on his forceful speech.

Other noble Lords have painted broad pictures of the AIDS situation and of the need for action. I shall concentrate on three issues that are part of the overall poverty situation: malaria; HIV/AIDS, to which reference has been made; and agriculture, especially livestock agriculture. We are part of a global village and we should take care of our poorer neighbours in it.

Malaria is one of the major problems of the developing world. I shall focus particularly on sub-Saharan Africa, but it is a major problem throughout the world. The vast majority of deaths occur in Africa, with 300 million new cases occurring every year and 1 million deaths. Ninety per cent of all malaria occurs in children in sub-Saharan Africa. Malaria is a disease of poverty and a cause of poverty. It is estimated to cost Africa more than 12 billion dollars per year, and yet it could be controlled for a fraction of that cost by using insecticide-impregnated bed nets and insect control. Economists estimate that malaria is responsible for a growth penalty of up to 1.3 per cent per year. When that is aggregated over a period of years, it makes a major difference to the GNP in malaria-affected countries when compared with those without malaria.

Apart from its lethal effects, malaria has the indirect effect of sapping the energy of the workforce. It also saps initiative, hampers schooling and damages the social structure of a country.

Malaria comes with other major problems such as HIV/AIDS and tuberculosis. Those three diseases form the major health problems for mankind in the poverty world. I shall not touch on tuberculosis but I would like to identify HIV/AIDS as a problem—not only because of the medical difficulties it causes but for its fundamental effect on the workforce, agriculture and the fight against poverty.

The growing political commitment of African leaders to action against malaria is boosted by the "Roll Back Malaria" programme, a partnership developed in Abuja in Nigeria. A declaration was signed in 2000 endorsing a strategy of halving the number of cases of malaria by 2010. The strategy will include simple measures such as the use of insecticide-impregnated bed nets, vector control, prevention and management programmes and an increase in education.

However, the resources needed to reach that goal by 2010 cannot be provided from the local countries alone—only 20 per cent can be provided in that way—and there is a major need for donor assistance to help the sub-Saharan countries to achieve it. One hopes that the United Kingdom will be able to help.

The problem of HIV/AIDS has been referred to by the noble Baroness, Lady Jay, and other noble Lords. It is of course a major issue. It was effectively reviewed by POST in December 2003. It is a stark fact that in sub-Saharan Africa 28 million people are living with HIV/AIDS, with new infections running at 3.5 million per year—and the infection rate is growing. In Nigeria, for example, it is projected that 10 million to 15 million cases will occur by 2010 and in Ethiopia up to another 10 million.

There is a desperate need for anti-viral drugs. The current ones are expensive—costing between 10,000 and 15,000 US dollars per completed course—and the emergence of drug-resistant viruses complicates the whole issue. Education is woefully inadequate—only one in four people have access to AIDS education—and only one in 20 have access to anti-AIDS drugs which would prevent the transmission of the AIDS virus from mother to child.

The amount of aid for HIV/AIDS is substantial. The US Congress is asking for 15 billion US dollars over a period of five years to deal with the problem. The United Kingdom is following closely on the USA in donor funding through the Global Fund, donating £3 million in 2003 and £6 million in 2004. So we are playing our part. In addition, DfID is funding anti-viral and vaccine research to the tune of £16 million per year. Although these are substantial sums, they are still not enough and more needs to be done. I repeat, the issues of malaria and HIV/AIDS are problems for the global village to which I referred. They are "next door" problems and they need to be attended to.

Finally, much of the agriculture in sub-Saharan Africa is made up of small rural farmers, who are beset with poverty and disease. If we are to improve the whole of agriculture—which has massive potential—in sub-Saharan Africa, there must be a change in the per capita reward of farming. Over the past 30 years, there has been only a 4 per cent increase in productivity in rural farming in Africa compared with 20 to 30 per cent in other parts of the world.

In recent years, much of this has been due to the change in the population profile as a result of the AIDS epidemic. The people who would normally work on the farms are no longer there or are suffering severely from the AIDS epidemic. There has been a depletion in the workforce, a depletion in food productivity and an increasing dependence on older people.

Much of agriculture is dependent on animals and the role of animals in the provision of draught power. I am particularly supportive of a DfID initiative to bring together Canadian, British, United States and Australian scientists to develop vaccines and anti-viral and anti-infectious disease drugs for the treatment of livestock diseases affecting farmers in Africa under what is known as the Global Alliance for Livestock Vaccine. It is a very good example of international co-operation and action. I hope that similar programmes will be encouraged by DfID in the future.

Rural agriculture has a particularly important part to play in curing the massive problem of poverty in sub-Saharan Africa. Much will depend upon our handling it in a most effective way.

Photo of The Bishop of Southwark The Bishop of Southwark Bishop 4:37 pm, 21st January 2004

My Lords, I add my thanks to the noble Lord, Lord Judd, for introducing the debate and for the wealth of information contained in his speech. With his long involvement with NGOs it might be appropriate for me to concentrate today on the part that voluntary agencies, such as Church-related groups, play in supplying aid to developing countries.

The strengths of voluntary agencies are many. They can respond swiftly to need; they can raise funds directly from the general public; their overheads are small as much of the work is carried out by individuals; they can use networks developed for other purposes, such as local church congregations around the globe, so that there is a network of both information and delivery.

There are, however, related difficulties. The general public are notoriously fickle in giving money to good causes. They respond well to urgent and immediate disasters, particularly if pictures are being dramatically shown on TV screens. They are less willing to give regularly for long-term aid unless the money is tied to a particular person or project. School fees for Mary in a village in Zambia can be raised from individuals here; money to meet the ongoing costs of teachers' salaries is more difficult to find. So voluntary organisations are wont to make their appeals in dramatic terms or in ways calculated to pull at human heart-strings.

The small administrative costs of charities are to be welcomed but this means that they are often operating on a shoestring, and mistakes can be made through the lack of adequate professional staff. A host of enthusiastic volunteers is a great blessing but they need organising and co-ordinating, and nurturing their time and talents can be a skilled job.

An evaluation of the way in which 12 large British charities responded to the food crisis in southern Africa in 2002 has just been published. The report well illustrates these strengths and weaknesses. The 12 charities together raised more than £16 million from the public and spent millions of pounds more of official aid from the Government. But in doing this it seems that they overstated the seriousness of the situation to the public, comparing it to the 1984 Ethiopian catastrophe in which at least 800,000 people died. It was not on that scale.

However, there was something new about the 2002 appeal. It was the first time British charities had tried to avoid a full-scale humanitarian crisis rather than respond to one after it had happened. Instead of waiting for people to die, the agencies moved beforehand to prevent catastrophe. In other words, the charities were trying to build a fence around the top of the cliff of hunger rather than pick up the bodies at the bottom of the cliff after they had fallen.

In addition, the evaluation reported that the charities had learned quickly how to work on a larger scale than previously and had co-ordinated their responses well. They were found to have been sensitive to local cultures and to have supported local groups. Most of the charities worked with local Church groups in Africa but the report found that some of these were totally out of their depth.

On strengths and weaknesses, the noble Lord, Lord Griffiths, pressed for more scrutiny and accountability in the donation of aid. We cannot fault these charities for seeking to be open and accountable in a world and continent where neither is always common. The agencies hope that their openness to independent evaluation will encourage the public to support future appeals in the confidence that their money will be well spent; and I echo that hope. It will be of interest to hear from the noble Baroness the Leader of the House how Her Majesty's Government plan to strengthen their relationships with aid charities in the years to come.

Africa is like the man who has been hit by 16 bullets, and they still keep coming. He is hurt; he is staggering; but he is still alive. The bullets of HIV/AIDS, political corruption, failed harvest, malaria, ignorance and disease continue to take their toll. The task of combating them is one in which both government and NGOs have their part to play. But this is not merely a question of the best way of managing aid; it is also a moral question.

The noble Lord, Lord Griffiths, led us into the philosophy of aid for good or ill. Perhaps I may add my reflections to his. We live in a world of greed, self-indulgence, rising debt and false prosperity, yet with no real strength or self-confidence, where the gap between rich and poor both within and between nations continues to increase. We urgently need a globalisation of moral responsibility.

There are those, some holding senior office, who say that this widening gap between rich and poor is of no significance. But decades ago, J K Galbraith warned us of the danger of breaking the social contract which held that while some might be richer and some poorer all could expect both protection and a chance in the social system.

That is what development aid is basically about. It seeks to restore life and health, not only for their own sake, but as a sign that every person matters, every person has a value in society and can expect protection and opportunity. Unfortunately, protection for all can become protectionism for the wealthy and powerful and opportunity for all becomes hollow without access to food, health, education and markets.

I am not always uncritical of Her Majesty's Government, or any government. But I believe that they are to be congratulated on taking the lead in seeking to persuade western governments to be more generous in providing development aid. We have a Chancellor of the Exchequer whose prudence does not prevent his being personally committed to this work; and we have been well served by a succession of equally committed International Development Secretaries.

The money that a government such as ours can generate and deliver makes the resources of charities seem trivial but there is a symbiotic relationship. The more people are involved in giving of their time and money to development aid through the charities, the more the social climate is formed and generated which enables governments to be generous with the public purse. And the more committed the Government are to development aid and the eradication of poverty, the more the charities feel that they are not giving their all in some kind of social vacuum but are part of a resilient and sustainable partnership.

I congratulate the noble Lord, Lord Judd, on enabling us to have this important debate. However, there is, of course, another side to the development aid coin: the eradication of debt and the manipulation of markets to which the noble Lords, Lord Judd and Lord Freeman, referred in their speeches. In 1776, Samuel Johnson made what we might call the green pea argument when he said that he was prepared to pay half a guinea for a dish of green peas. Why? I quote him:

"You are much surer that you are doing good when you pay more to those who work as the recompense of their labours than when you give money to charity".

The radical American theologian Jim Wallis uses different words to make the same point, when he says:

"Stop asking what you can give to the poor—just stop taking from them".

Photo of Baroness Whitaker Baroness Whitaker Labour 4:46 pm, 21st January 2004

My Lords, it is a pleasure to follow the right reverend Prelate whose views on voluntary organisations, as a member of several, I very much appreciate.

In the context of the comprehensive and penetrating survey by my noble friend Lord Judd, I want to underline that the purpose of development aid is to do itself out of a job. In time, as the noble Lord, Lord Griffiths, suggested, growth should take over and attract investment to take the place of aid. The noble Lord, Lord Soulsby of Swaffham Prior, who has expertise, of course, in the area emphasised agriculture. I very much want to follow that and ask: can agriculture be the engine of growth? Our Department for International Development thinks so, and has put over £145 million into direct support for agriculture. Its new document Agriculture and poverty reduction: unlocking the potential sets out a strong case for backing agriculture which is very timely. The United Nations Food and Agriculture Organisation says in its latest report:

"countries which succeeded in reducing hunger were characterised specifically by more rapid growth in their agricultural sectors".

The New Partnership for Africa's Development (NePAD)—I join the tribute of my noble friend Lady Jay to the leadership of my noble friend Lady Amos in support for NePAD—has now published a Comprehensive African Agriculture Development Programme, half of which is to be funded from within Africa.

The advantages of focusing on agriculture are that first of all, it is at the heart of where poverty is deepest. Three quarters of the 1.2 billion people who survive on less than a dollar a day live and work in rural areas. Agriculture can best meet their most immediate needs: its product, food, is their first essential; in general in Africa it provides two thirds of employment; and it is also half of exports. So growth in agriculture will benefit the poor most. But whereas in sub-Saharan Africa agricultural production declined and the absolute number of people going hungry increased between 1980 and 2001, in south-east Asia rapid agricultural productivity gains lifted millions out of poverty. To learn from that success is really necessary if our international goal of halving the number of people living on less than a dollar a day by 2015 is to be met. What are the challenges to development aid for agricultural production?

Agriculture-led poverty reduction relies on small farms. How viable are small farms? They certainly can be. I was in Vietnam over the new year and saw its astonishing record in growth, now 7 per cent of GDP, halving the proportion of people living in poverty to 29 per cent. Agriculture is its big success story. It is now the second largest exporter of rice, by volume, in the world. It does this mainly with small farms, buffaloes rather than tractors, and very expert hard-working farmers. DfID is set to be the biggest donor in the country and it well repays the British taxpayer's funding. But networks of small farms need underpinning.

Crucial is access to credit, even on a small scale. I am a great supporter of micro-finance—that is, small loans where peer pressure is substituted for collateral—and I declare an interest as an associate of Opportunity International; and I see that the World Bank announced a pilot last June for grants of 225 million dollars over three to four years to improve the financial services available to small and medium-sized enterprises, including expanding and regularising micro-finance institutions. Can my noble friend the Leader of the House tell me whether our government support this initiative and encourage its application to agriculture?

Tied up with access to credit is land title. In Ethiopia—and I ought to declare an interest as the vice-chair of the British-Ethiopia All-Party Parliamentary Group—the Derg regime took land into state ownership, and one result was that there was almost no investment in marginal land. Forests were stripped and topsoil was lost, contributing to drought and famine. Now the Government are creating a form of title to land which can be inherited. I hope my right honourable friend the Secretary of State for International Development can encourage them to provide for at least a three-generation period, so as to create strong incentives for improving land value. The Economist, in an article last week, failed to give the Ethiopian Government credit for land reform. This was not as misleading as the BBC's concentration on the sensational famine of the 1980s and emergency food aid, also last week, which ignored what would really lift Ethiopia out of aid dependency, namely investment in Ethiopia's emerging agricultural production units, which such a programme can only deter. I very much commend John Vidal's article in the Guardian on 15 January, setting the record straight.

Land title, of course, is more than an incentive to improvement. It is the most common collateral for asset-backed lending—the next step up from micro-credit. As the Economist says, asset-backed lending is one of the engines of growth, but, perhaps only one in 10 in Africa owns the title to their property. DfID has some very successful programmes of training in governance expertise such as tax collection systems. I wonder if it also works in helping countries to develop land surveying, land registries and pro-poor property law?

Asian agriculture has also benefited from genetically modified crops. The kind of farming which does not require heavy chemical expenditure is pro-poor and it would be interesting to know what research in innovatory agricultural techniques DfID puts at the service of the developing world. One of the aims of the NePAD agricultural programme is to promote agricultural research such that spending doubles over 10 years. However, it is no use having efficient agriculture if there are no proper trade prospects, as several noble Lords have said. Can my noble friend say how the Doha round is now progressing?

The other big external issue, as my noble friend Lord Dubs said, is commodity price fluctuation. How does DfID's commitment to rapid liberalisation of agricultural trade take account of the need to shelter fledgling sectors against external shocks like abrupt changes in terms of trade?

Finally, I would like to raise an awkward issue. This concerns middle-income countries, not the poorest. For instance, in India, a middle-income country with good growth rates, there is a very large number of poor people. The number of those going hungry there rose by 19 million from 1995 to 1997. But once a country has enough resources to create satisfactory growth and attract investment, donors might well conclude that their aid should be transferred to poorer countries, even though the poorest of the poor are still there. It is national redistribution that is the problem. How can donors—should donors—intrude on sovereignty with their own views on redistribution, or insist that national and federal governments get more of a grip on their own local administrations? What can donor governments do?

Photo of Lord Brennan Lord Brennan Labour 4:57 pm, 21st January 2004

My Lords, it is the moral duty of the peoples of the developed nations to make reasonable provision for the poor peoples of the world. The objectives that accompany that noble duty are well established and are interdependent: that there be more aid; that it be effectively used; and that poor countries be assisted to make economic and institutional progress towards self-sufficiency.

The key issue raised by my noble friend Lord Judd in this timely debate is: how can the United Kingdom best pursue those objectives in the foreseeable future? Our Government, particularly when my noble friend was a Minister at DfID, had and continue to have an excellent record, both in the amount and the quality of development aid for which they are responsible. The commitment of the Government and the country is well encapsulated in the International Development Act 2002. Its brevity bespeaks the clarity of our national purpose, which is to provide development assistance likely to reduce poverty by furthering sustainable development and improving the welfare of populations to achieve lasting benefits. Within that new statutory framework, I commend to the House and the Minister three interrelated policy objectives for the future.

First, that there should be more aid. The initiative of the Chancellor of the Exchequer through the international financing facility is innovative, beneficial to all and should be implemented. It should be a complement to current development aid, not become an alternative, which so many people in the developing world fear may happen. Moreover, it should provide continuity and consistency, so that poor countries are not subject to the vagaries of national or international political pressure. Furthermore, it should alleviate the debt burden. I therefore hope that in the coming year, 2005, when we have the presidency of the G8 and the European presidency, the maximum amount of international persuasion and pressure will be exercised by our Government to introduce the IFF or an acceptable variant of it.

I said that that proposal was complementary to and not alternative to existing aid. Many in the developing world are very anxious indeed about the impact of expenditure on the reconstruction of Iraq on their development aid budgets. One understands the political realities that require such large amounts of money to be spent in that country, but let us not forget that it is an oil-rich country. It has the capacity in the long term to fend for itself and, presumably, to pay back some if not all of the money put into it by us in the near future.

I raised that point for my noble friend to deal with for a reason which I can illustrate by way of example. Because of Spain's redistribution of its development aid towards Iraqi redevelopment—and Spain was an ally of ours and the US in Iraq—the total national Spanish development aid budget to the rest of the world is now 0.03 per cent of GDP. That is an incredible statistic from a wealthy European country in the light of the declared objective of 0.7 per cent for us all. I understand the realities, but the world needs reassurance. How will budgets be distributed for the future? I invite the Government—if not in this debate then at a prompt occasion in the near future—to make a policy statement on their financial structure and system for development aid over the next few years.

The second objective is to let the aid be used effectively. I should like to make two policy points here, one about the world outside and one about here in our country. To prevent famine is vital; the relief of starvation is the primary object of much development aid; no one can deny its importance. However, in order to achieve that and in order to balance budgets, surely the position cannot be that we should stop providing aid to countries where people are not starving but suffer poverty of the spirit.

Where nations do not function well, there is no future in sight and no progress to be made. In Peru, for example, our Government and the British Council have for years run a radio programme, several times a week, all over the country, educating ordinary people in that country, especially indigenous Indians, about the simple things of life—how a community works, how legislation operates, how to deal with your councillor, how to go to the doctor, how to survive in a functioning society. Its budget in Peru is dependent on us. Our programme may or may not continue. Its value is inestimable; its cost modest. So in attempting to end poverty, let us not give up on the poverty of the spirit.

Internally, whatever we say here, the young of this country—the idealists of this country, who are indifferent to our political and legislative process at the moment—are not indifferent to the fate of the poor of the world. It stimulates them. It enthuses them. It makes them think that government and society have got worth. So I call upon the Minister and the department in the future to ensure that DfID's work is properly advanced in this country, and thereby to increase the budget up to the 0.7 per cent objective.

Finally, let there be good, progressive governance in poor countries. I fully endorse the views of the noble Lord, Lord Griffiths. In the 21st century there should be no more excuses and no more irresponsibility from some of the self-ruling elites of poor countries. It cannot be accepted any more. The message has to be clear: "First, you introduce in your countries proper financial systems in which commerce and business, macro and micro, can function. Secondly, you apply simple basic standards to work, business and the environment embodied in the United Nations Global Compact. Thirdly, you stamp out corruption". There is no more insidious barrier to progress in reducing poverty than corruption. We should fully endorse and campaign for the United Nations Convention Against Corruption. We therefore seek from the Government a commitment to make countries change for the better in so far as we can.

I opened by saying that development aid is a moral duty. To provide it well is a virtue, a virtue that not only gives succour to the poor but adds to the strength of our national spirit, which is imbued in this country with decency, generosity and a respect for worthy ideals—all of which mean development aid.

Photo of The Earl of Sandwich The Earl of Sandwich Crossbench 5:07 pm, 21st January 2004

My Lords, I, too, am grateful to the noble Lord, Lord Judd, for this chance to speak about development in the Arab world, a region with which Britain has had a long relationship. Unfortunately that has been tarnished by recent events and our Government's conversion to regime change in Iraq. Two years ago we were still stunned by the events of 9/11. While Ministers and defence analysts were devising new measures against terrorism, diplomats, academics and civil servants began to look for positive ways of both explaining and responding to the so-called "clash of civilisations". As I shall mention, the two aims do not live together happily.

The aid community was slow to catch up. It was only after the second intifada in Israel/Palestine and during sanctions against Iraq that NGOs began to realise how little they knew about the Arab world—for half a century the province of travellers, oil men and devotees in the Foreign Office. There was a general belief, except among a minority, that all Arab countries were oil rich and could look after themselves. This is only a cameo, but it shows how wrong we were. Events have proved that it has been our lack of awareness and commitment towards the Arab world in the West—especially the Anglo-Saxon West—as much as socio-economic conditions in the region itself which have contributed not to the acts of terrorism in themselves but to the anger and prejudice against the West which has allowed them to happen.

There has been a spate of reports on this dilemma, from the UN's excellent Arab Human Development Reports, to the papers given to the FCO conference last April; from the British Council's survey, to policy documents including DfID's latest regional assistance plan for the Middle East and North Africa. That carefully worded document, which I commend, takes the UN report a stage further and bravely sets out a framework for poverty reduction—which is what DfID is all about; it is not primarily about changing attitudes.

In the past decade our aid through DfID and the EU has been deliberately more concentrated on the poorest countries. That has meant that the range of programmes has been diminishing. Only Yemen in this region now falls into the category of poorest. I hope that this is not a firm trend in our policy towards the Arab world, where there is much inequality and where some countries deserve special attention. I shall leave Iraq aside, as mentioned by the noble Lord, Lord Brennan, because it has obviously become a special case. Large sums have somehow been found for its reconstruction, which would have been unheard of before the war.

Jordan is a good example of a country where the UK could have a greater impact, but the DfID programme is small and winding down on the grounds that Jordan is a middle income country. The same is true in Egypt. Yemen, where we now have an active role, the West Bank and Gaza seem to be the only programmes in which DfID can have complete confidence. Britain's firm support for UNRWA and the EU programme "Protecting Palestinian Institutions" has been admirable, however frustrating the political background.

Another government initiative in the Arab world is the new Global Opportunities Fund. Only launched by the FCO in May 2003, it has a budget of £120 million over three years, mainly in support of a hotchpotch of anti-terrorism, environment, democracy and other global objectives. Hidden inside it is a tiny £1.5 million programme called "Engagement with the Islamic World". This encompasses economic reform in Morocco, human rights in Egypt, the development of a Syrian money market, capacity building for women in Lebanon and training in journalism through the BBC World Service Trust. The FCO describes it as a systematic strategy across government for engaging with the Islamic world and promoting peaceful political and social reform in Arab countries. This is an encouraging development, which deserves much more prominence. Perhaps the Minister could confirm that the budget is to be doubled during the coming year, and that eventually it will be somehow more closely related to DfID's programme. To launch such a programme in the FCO alongside anti-terrorism looks like phoney diplomacy and not true development.

The Global Opportunities Fund also works through organisations such as the Westminster Foundation for Democracy, and the British Council. Besides its main programme, the British Council has brought young people together through its admirable "Connecting Futures" programme and continually looks into ways to support local initiatives.

My concern in this debate is that while these programmes are undoubtedly doing good work, much more needs to be done to encourage organisations in the Arab world to carry out development themselves. One of the themes of the UNDP report has been labour migration; the way in which Western universities and institutions have drawn off skilled labour that the Arab world cannot afford to lose. Over 130,000 Arabs are currently studying in the EU or in the US, some 85 per cent of those under postgraduate programmes. Many of them are unlikely to return home at all. A reversal of this trend is urgently needed, through a thorough rethinking of our scholarships programme.

The noble Lord, Lord Griffiths of Fforestfach, mentioned the buzz words such as "capacity building" and "an enabling environment". The aim must be to create stronger networks of knowledge and in-country training in such fields as financial services, small-and-medium-sized enterprises, local government and institutional development, so that planners and accountants as well as engineers and doctors do not feel driven to join the brain drain. Much of this work is already undertaken by the private sector, particularly the large accountancy firms. Here, there are problems of corporate responsibility and accountability. I mention, as a trustee of Christian Aid, a report on this subject published today.

The Liberal Democrats rightly called attention recently to the role of the Adam Smith Institute. Apart from the considerable cost, the insertion of privately contracted consultants and specialists into fragile ministries or to avoid elites in developing countries can inhibit rather than reinforce what is being done. It would be much better to create shorter-term assignments, which build in training in, say, banking services online in harmony with established financial institutions to avoid the need for outside intervention.

There is a long tradition of charity in Islam, which contains the seed of civil society. Community and consultation are important tenets of Islam and they chime in with our more formalised notions of democracy. An exchange of skills within different sectors of charitable work, such as education and health, could transform attitudes and enable changes to take place, such as the setting up of new NGOs. There are always political risks that such charities may become too exposed, but these risks must be judged according to the society concerned.

My visit to Palestine gave me an insight into the quality of Palestinian NGOs. Here, one finds experienced, young aid workers who feel so much frustration when they are capable of dealing with problems but cannot either cross the check points or find resources to do their work and form links with other societies where similar work is going on.

I shall end with an unfashionable suggestion. Let us not apply the middle income rule too harshly in the Arab world. I happen to know that even Saudi Arabia has poverty, not only geographical but also in its health and education sectors. We tend to think of large hospitals in the capital cities there, but there is a new interest in charitable outreach work and the development of civil society. I declare an interest, since my wife is one of the few people who have done research on this. Several health charities there require a range of management skills which could be provided by Britain or other countries in the region. Our approach to aid in the Arab world, like in so many areas, needs much more flexibility and original thinking if it is to have the required impact to help strengthen civil society and prevent an increase of Islamic extremism by small minorities fostered by social inequalities.

Photo of Lord Rea Lord Rea Labour 5:16 pm, 21st January 2004

My Lords, I thank my noble friend Lord Judd, who launched the debate in his usual eloquent style. I share the view of the right reverend Prelate the Bishop of Southwark and my noble friend Lord Brennan; that is, to allow abject poverty to persist into the 21st century is immoral, because we have the means to remove it. Instead, we use these means for selfish or destructive purposes, towards levels of consumption that are bad for our health and the world's health and we spend vast sums for wars and preparations for future possible wars. To eliminate gross poverty from the world would improve our lives too, and not only in a moral sense. I quote from page 12 of the most recent DfID report, with an introduction by my noble friend the Leader of the House. Talking about poverty, it states,

"We ourselves cannot escape its impact, as events over the past year have continued to show. We have to improve the lives of people around the world if we are to live free from war and disease . . . to address the causes of environmental degradation, illegal migration or the trade in illicit drugs, or take advantage of the economic benefits that increased demand in the developing world would create for workers in the UK".

That last part of the paragraph deserves emphasis. Not mentioned in the DfID report is the relationship of poverty to terrorism. It is not a direct relationship, as my noble friend Lord Judd pointed out. Poor people may become bitter and desperate, and they are easy recruiting material for extremist movements.

As well as aid, we must consider the world economic backdrop, as other noble Lords have pointed out. The economic playing field is tilted sharply against the south in three main ways. The first of these is the persistence of the debt problem, despite HIPC. I gather that Uganda's debt has increased from £2 billion to £2.2 billion since some of its debts were written off. Uganda and other poor indebted countries often still must pay more to service their debts than they spend on health and education. The total debt servicing costs of the developing world are 343 billion dollars annually, which is 6.5 times the total development assistance, which is 52 billion dollars.

The second adverse tilt consists of the terms of trade. As many noble Lords have mentioned, there are still persistent tariffs against imports from the south, particularly agricultural products, which are its mainstay as my noble friend Lady Whitaker mentioned. That is especially so if the products are value-added. Oxfam has calculated that those barriers cost the south 100 billion dollars a year. In contrast, developing countries are required to lower their tariffs against imports from the north as part of liberalising their economies—a pre-condition for receiving loans or grants from the World Bank or the IMF. That allows subsidised cheap food and cotton, for example, to be imported from the north, which undermines the prices of local agricultural products and sends many farmers into bankruptcy.

Thirdly, as mentioned by my noble friend Lord Dubs, the prices of stable commodities such as coffee are now at rock bottom, sometimes making it hardly worth the effort of harvesting them.

I hope that the Minister will be able to update us on the steps that the Government are taking to make trade more equitable by tackling some of the issues that I have mentioned, and to make the HIPC initiative more effective. A suggestion by development NGOs is that debt-servicing costs should never be greater than 10 per cent of any national budget. Would it not be fair for unpayable debts to be written off when total servicing payments reached or surpassed the amount of the original debt? It has always seemed unfair to me that an individual or firm can be declared bankrupt, but that that is not an option for a nation.

The work of DfID on the ground is widely respected, as all noble Lords have mentioned. However, I am still somewhat doubtful about how it was justifiable to pay the Adam Smith Institute 70-odd million dollars to privatise the public services of Andhra Pradesh. I still have some problems with that, despite George Monbiot's article in the Guardian being answered by the Secretary of State, Hilary Benn. I agree with the noble Lord, Lord Griffiths, that the decision to work in co-operation with governments to strengthen their effectiveness is very good in principle. And a good example of much appreciated assistance is the operation in Vietnam—which my noble friend Lady Whitaker discussed—and which I have also just visited. Vietnam has a stable government and already has a good record in poverty reduction. We are helping there in the health, education and rural transport sectors.

Many countries present far greater difficulties because corrupt or ineffective government prevails. Even more difficult are countries involved in conflict, the most prominent at the moment being Iraq, of course. I am sure that my noble friend will give us an update on how the DfID operation there is progressing in the current difficult security situation, and what the total costs are likely to be.

In many other countries with poorly functioning governments, there is still a strong role for international and local partner NGOs that know their communities and ensure that donors' money is well spent. That is not always the case if it is given to central government, as other noble Lords have mentioned. Those NGOs often co-operate with and strengthen government-run services at a community level and are very well trusted. That is certainly the case with the two NGOs with which I am most closely associated, ICROSS in Kenya, and Healthlink Worldwide, which I am glad to say is funded in part by DfID and has an ongoing programme in the occupied territories of Palestine, in partnership with local organisations.

I hope that DfID takes care—I am sure that it does—to assess whether resources given to failing governments, or any governments for that matter, are not wasted when non-governmental organisations and other organisations in civil society can do the job of eliminating poverty, if they are supported more effectively, at a local level. They assist rather than replace government services such as dispensaries or schools, which are almost always desperately underfunded.

I ask my noble friend to consider the vital importance of continuing and, I hope, increasing support for reproductive and family-planning services. She will be aware of the Ottawa commitment of November 2002 on the issue, which recommended that 5 to 10 per cent of national development budgets be used for reproductive health. In the United Kingdom's case, that would be between £200 million and £400 million. I am told that £270 million is spent by DfID on HIV and reproductive health together, which falls within the range. However, I suspect that most of that money goes to HIV programmes. Can my noble friend say how the sum is allocated between the two, as I am sure that she will describe our important HIV/AIDS initiatives?

How well are those initiatives integrated with reproductive health? The two are really inseparable and integration makes both more effective, but I fear that the concentration on the prevention and treatment of HIV/AIDS may tend to be at the expense of reproductive health, which is already suffering because of the withdrawal of American funds. In the long term, it will be equally important in the fight against poverty.

Photo of Lord Hunt of Chesterton Lord Hunt of Chesterton Labour 5:27 pm, 21st January 2004

My Lords, I congratulate the noble Lord, Lord Judd, on his passionate and serious introduction to the debate, and join others in commending the Government on their remarkable commitment to reducing poverty. A striking part of their policies has been to aid countries to focus on poverty and then to provide resources. I am confident that that programme will continue, especially the debt cancellation, and one hopes that it will rise to the desired level that the noble Lord set out.

My comments will be on the barriers preventing poverty reduction caused by environmental and technical problems. Others have raised the issues of law and order and medical problems, which are also important. I want to mention the ways in which UK expertise, both inside and outside government, could be used more effectively. I declare an interest as president of ACOPS, a non-governmental body, and of the Advisory Committee for Natural Disaster Reduction.

Questions have been raised about the allocation of resources of different departments in Whitehall, so I begin by asking whether there are genuine inter-departmental reviews about the relative effectiveness of expenditure by different departments on projects related to poverty reduction. I have not seen any. Many departments spend money on such projects, as is touched on in general terms in DfID's annual report. However, cost-effectiveness and relative importance are not reviewed. That relates to an issue before the Science and Technology Committee, which is reviewing the effectiveness of international agreements and the UK's involvement. As I shall explain, DfID may not take as much interest as it should in its own expenditure and that of other departments. That may be a curious statement, but I shall come back to it.

As the World Summit on Sustainable Development concluded, and as the executive director of UNEP explained in his Callaghan lecture recently, environmental pressures, fighting environmental degradation and mitigating environmental disasters are an essential part of dealing with poverty. There was very strong support for that by the then Secretary of State, Clare Short, in Johannesburg. Those factors impact most strongly on the poorest communities. Rich people and communities could often get by, but the effects are worst for the poorest communities.

Through many techniques, it is possible to make better predictions—warnings—and provide better education, better specialist advice and better infrastructure investment to deal with some of those problems. The British Government contribute importantly through the work of DfID, but also through the work of other agencies such as the Met Office, Defra and the Department of Transport. However, whereas resources for the DfID budget have increased considerably—the figure of 90 per cent was cited—resources for other departments have not increased in proportion. Why not?

For example, those departments are helping countries to provide warning of natural disasters and training local staff. In developing countries with poor living conditions and vulnerable communities, disasters have a disproportionate effect. However, as one sees in Asia, devoting resources to those areas, through better local organisation and technology, can greatly reduce the devastating impact. For example, we saw that it was the poorest people who suffered greatly in the recent Iranian earthquake. People who live in well-built housing in Los Angeles do not suffer.

Even in Africa, one can see big differences in how countries are making progress in that area. A devastating environmental impact on poverty is the destruction of habitats and, I regret, the environmental piracy, to use a strong term, of the richer countries, whose fishing fleets have destroyed fish stocks and coastal habitats, especially off Africa. For example, modest help from the UK Maritime and Coastguard Agency to African countries is helping them to police those areas, but the amount of money available is extremely limited. More resources devoted by the UK—and, as my noble friend Lady Jay pointed out, European Union policies to reduce European piracy—could make a great difference.

In Africa, more than half the population live on coasts. The World Bank reported that by 2050 not only will most people be living in cities—70 per cent—but most of them will be living in coastal cities. Under NePAD, a new African centre for dealing with the coastal environment has been set up in Nairobi—a concrete achievement of the NePAD initiative. Some of the worst features of poverty in those cities are diseases caused by shortage of clean water, poor sanitation and, as a West African Minister commented last week, abuse of those facilities.

As a Seychelles Minister explained when he addressed the All-Party Group on Africa in October, it is vital that education for those countries—and perhaps more widely—should be based on environmental understanding. We should begin not with, "The cat sat on the mat", but by reading and talking about the water, the beaches and the plants, because they are the essence of life. The UK can contribute more in the way that it is already contributing to help the environment of the Seychelles, but also more widely through that concept of education and the environment.

Technology, especially recently, has a bad reputation in relation to poverty—dams, big power stations and so on have been commented on—but I am confident that technology is undergoing great transformation. It will play a vital part in future. What efforts are being made by the DTI and DfID to exploit new, sustainable local electricity generation using photovoltaic systems, for example, which will enable people to provide local water purification? In the same way, mobile phones have provided vital communication where other networks do not exist. In fact, with the Internet, that has enabled some rural communities to choose the best crops to plant—which can vary greatly with the seasons—and how to market them.

That brings me to the World Bank's Global Environmental Facility, which is a great initiative by the international community to involve both developing and donor countries in environmental projects aimed at sustainable development and poverty reduction. Billions of dollars have been and continue to be spent. The United Kingdom, the United States and other leading countries recently increased their contribution to that agency.

DfID is the department responsible for ensuring that the UK contribution is spent wisely. However—I have experience of this, having heard about some projects—because the UK does not contribute as a bilateral donor to some of those projects, it has little influence on them, although it is funding them to a considerable extent. Therefore, UK expertise cannot be involved. Given that supporting the Global Environmental Facility is a major plank in the UK Government's aid and environment policy, which I strongly support, can my noble friend comment on whether the current arrangements for management and monitoring are entirely satisfactory?

That should be one of the best ways forward, especially as it should lead to the more effective participation of the private sector in solving environmental and poverty problems. I join the noble Lord, Lord Griffiths, in hoping that that can be given more emphasis in future.

Photo of Baroness Northover Baroness Northover Liberal Democrat Lords Spokesperson (International Development) 5:34 pm, 21st January 2004

My Lords, I, too, thank the noble Lord, Lord Judd, for introducing this important debate on an area in which he has such expertise and such a proven record. Time and again, he challenges us all, not simply those on his own Benches.

I start by picking up one point from the debate. As the noble Baroness, Lady Jay, mentioned, Sub-Committee C of the Select Committee on the European Union is currently undertaking an investigation into EU international development assistance, a subject that is certainly germane to this debate. Our chairman, the noble Lord, Lord Bowness, regrets that he cannot be here today, because he is attending a meeting in Brussels. Aid channelled through the EU accounts for one quarter of UK development aid. Whether that is being put to good use is clearly relevant here. However, I will not today prejudge our findings, which we look forward to presenting to your Lordships shortly.

Therefore, let me confine myself to the remaining 75 per cent of UK aid. Developing countries account for 80 per cent of the world's population—5 billion people. By 2050, that proportion will be 90 per cent of the world's population. It is thus clear not only for moral reasons, as the noble Lords, Lord Brennan and Lord Rea, pointed out, but for economic reasons how important it is that the developed world assists our less well-off neighbours.

Doing what we can to reduce conflict around the world; removing trade barriers among the rich nations, as the noble Lords, Lord Freeman and Lord Dubs, said; and investing in education and training, as the noble Lords, Lord Thomson and Lord Judd, said, are all essential if poorer countries are to prosper. As the noble Lord, Lord Griffiths, and the noble Baroness, Lady Whitaker, emphasised, it is economic progress that will best tackle poverty. However, we all agree that aid still has a major role to play. The Government have done a great deal in the field of international development, and their expansion of aid, to which other noble Lords have referred, is most welcome.

Nevertheless, as the noble Lords, Lord Judd and Lord Dubs, emphasised, it is surely time that the UK had a timetable for moving to the UN-agreed level of 0.7 per cent of GDP spent on aid. Belgium, Ireland, France and Finland have all adopted such timetables. The Netherlands and the Scandinavian countries have already met that target. As ActionAid pointed out, reaching the target would cost only half of the extra £5.5 billion mobilised for the war and reconstruction effort in Iraq.

Here, I reiterate what we have said from these Benches many times before and perhaps strike a discordant note in what has been a debate containing much agreement. I emphasise how deeply we regret the fact that the Government took us into war in Iraq. Not only has that had a most damaging effect on Britain's position in the world, it has also served as a terrible distraction from major global problems.

In the autumn, it became evident that not only had it proved to be such a distraction, it had also siphoned off aid money, as was mentioned by the noble Lords, Lord Judd and Lord Brennan, and by the noble Earl, Lord Sandwich. The noble Baroness, the then Secretary of State, Clare Short, and the Prime Minister all promised in advance of the war in Iraq that such action would not result in the diversion of funds from poor countries. Those promises were broken.

As Oxfam pointed out last October:

"The Prime Minister assured us in a letter sent in April this year that in order to fund reconstruction in Iraq, no aid would be diverted from other emergencies or from programmes supporting poor people anywhere else in the world".

It points out that the announcement of those cuts,

"means that he is breaking his promise and letting down the poor people in those countries that rely on that funding".

The noble Baroness herself explained on 10 November last year that,

"Over the next two years, funding for the reconstruction of Iraq includes £50 million reallocated from planned programmes".—[Official Report, 10/11/03; col. WA 156.]

All of this was caught up in DfID's decision to redirect its budget from so-called middle income countries to the poorest countries around the world. In some ways that may seem reasonable enough. But this obscures the fact that some of the world's poorest people may well live in so-called middle income countries. A strategy that addresses poverty around the world should, surely, look at the poorest people wherever they are to be found.

As the noble Baroness, Lady Jay, pointed out, South Africa—now plagued with HIV/AIDS, and also receiving many refugees from Zimbabwe—counts as a middle income country. Does that mean that we should now turn away from South Africa? All but a handful of countries in Latin America count as middle income countries, and DfID's Latin American programme has suffered as a result. As CAFOD has put it, to take money from so-called middle income countries to fund the reconstruction of Iraq is,

"robbing Peter to pay Paul, when Peter is as poor as Paul".

I now turn to what seems to me to be the most major crisis facing us in development terms today: the problem of HIV/AIDS. If we thought that, up until now, Africa faced major developmental, economic and social problems, that is surely as nothing compared with what it now faces. The noble Lords, Lord Dubs and Lord Soulsby, and the noble Baroness, Lady Jay, have most cogently addressed this issue. HIV is the pressing problem at the moment.

In some areas, HIV/AIDS is affecting 60 per cent of the working population. It is estimated that there will be 25 million AIDS orphans by 2010. Those are children who are not likely to be in education and who have no social stability or preparation for a stable economic future. Their future is very bleak.

Some 40 to 50 million people may well now be infected. I welcome the move to extend the availability of cheap drugs in developing countries. These drugs have dramatically reduced the death toll in affluent countries—we have certainly seen that in the United Kingdom. It thus becomes ever more vital that we now help to get cheaper drugs to people in poorer countries so that their life spans can be extended and so that we can help to keep families together. Worst hit is sub-Saharan Africa, but there is also great concern for China, the former countries of the Soviet Union and many other areas.

Can the noble Baroness tell us in what ways the Government seek to tackle this matter? As the noble Lord, Lord Judd, and the noble Baroness, Lady Jay, have also asked, what priority will they give to this when they chair the G8 summit and when they hold the presidency of the EU? If they say that they are to give this matter a high priority, how do they see that translating into actions?

While the WHO programme of 3 million people on anti-retroviral treatment by 2005 is to be welcomed, this is surely too little, too late. What expansion of this programme do the Government anticipate—not simply to meet its requirements, but to expand it? What progress is being made to develop health care systems to deliver what is needed? How is the care of orphans going to be placed at the centre of policies in those countries? Will DfID seek to have a continued role in HIV prevention treatment programmes in developing countries?

Before concluding, I shall pick up on a couple of issues that have been mentioned in this debate. Can the Minister say what is happening with the International Finance Facility? Welcome though it may be, does she agree that it is not a substitute for reaching the 0.7 per cent target? Is she aware that other European countries have signalled their reluctance to support it unless the UK adopts a timetable for reaching 0.7 per cent? Can it flourish if the United States does not back it? How does she feel it can be co-ordinated with other large bilateral and multilateral initiatives like the Global Fund and the US AIDS Initiative?

Secondly, can she tell me how debt relief is to be included in the aid budget?

In conclusion, I say again how much I appreciate the introduction of the debate by the noble Lord, Lord Judd. While I welcome much that the Government have done, I fear that some of their very laudable efforts have been knocked off course by their activities in the Middle East. I look forward to the assurances that the noble Baroness can give us today.

Photo of Lord McColl of Dulwich Lord McColl of Dulwich Conservative 5:45 pm, 21st January 2004

My Lords, perhaps I, too, may add my thanks to the noble Lord, Lord Judd, for initiating this debate. I agree with him that the UK aid programme has been a success for many years. It is probably one of the best aid programmes in the world. But there are bound to be failures. It is not always helpful to find someone to blame when things go wrong. In fact, one might go further and postulate that, if there are no failures, then not enough risks have been taken and not enough courage shown in initiating bold entrepreneurial projects.

As many speakers have said, one of the best ways of giving aid to help in the fight against poverty in developing countries is to give financial support to reputable charities that have a good track record of giving effective aid, and which have had success in the all-important activity of capacity building.

My wife and I have just returned from one of our many visits to west Africa, where we operate on a hospital ship that has three operating theatres and 70 beds in two wards. This is a charity called Mercy Ships, which provides operations that are not usually available free of charge. We work with local surgeons, introducing them to new techniques and treatments. One of the many attractive features of this charity is that none of the 300 crew is paid: we all have to pay for our own food and keep on board—and that includes the captain. As a Scot, this use of charitable money appeals to me very much.

As several noble Lords have already mentioned, one of the major problems in giving aid is ensuring that it gets to those who need it. Ann Gloag of Stagecoach generously set up several hospital units in Africa, but, being a canny Scot, she soon realised that too much of her money was leaking away into the wrong hands. She decided that the answer was to have her own ship. This led her to Mercy Ships, and resulted in her buying a 20 year-old Danish rail ferry that is currently being converted into another hospital ship in Newcastle. This will be completed by the end of the year, provided that we can raise the outstanding £8 million.

Over the past 25 years, volunteers from Mercy Ships have operated on over 8,000 patients with advanced dental problems, cataracts, hare lips, huge jaw tumours and goitres, hernias down to their knees and women rendered incontinent through childbirth. Many of those women were outcasts, but successful treatment resulted in them being accepted back into their homes and the villages from which they had been expelled.

I emphasise that we could never have done any of this work in Sierra Leone had it not been for the 2,000 British troops who did such a great job in restoring and maintaining peace. They also did many other invaluable jobs such as training the police and army and undertaking building and engineering projects. Great credit is due to them, as my noble friend Lord Freeman has already mentioned.

When charities such as Mercy Ships come to one of the developing countries for a period of up to six months it is a great help. But what is needed is capacity building. We need to help them to build up and maintain these services themselves. To that end, we have established permanent land bases, run mainly by local people, to supply splints, orthoses, wheelchairs and artificial limbs for those disabled by diseases such as poliomyelitis and by the atrocities of war. We provide building materials and equipment to teach local people to dig wells and build clinics.

We have supplied 40 goats, 80 sheep and seeds to the farmers in Sierra Leone who lost everything in the war, on condition that they give the firstborn lamb and some of their harvest to their neighbours. Last week, I noticed that our Chief Whip was wearing a silver model of a little goat in this lapel. He told me that it represented a charity called Kids for Kids, which loans six goats to a poor family for two years, providing them with milk for the children and allowing the family to keep the kid goats produced.

In west Africa, perhaps the most lasting legacy will be the dental school that we are planning to set up to train dental assistants for a period of three months, which will enable them to carry out the most straightforward treatments. In the fistula hospital in Ethiopia I met an outstanding lady who had been taught to operate on fistulas. She underwent the operation herself 25 years previously. She has now carried out more than 2,000 such operations and must be the best fistula surgeon in the world. She can neither read nor write. In Togo, in west Africa, a local man in a mission hospital was taught how to do hernia repairs. He has now carried out more than 1,000 of those procedures and is probably the best hernia repairer in west Africa. He, too, can neither read nor write.

The other great advantage of having lay surgeons is that they will not emigrate as so many doctors do. In fact, many noble Lords sitting in the House could be taught to carry out a straightforward operation. So long as their victims—I mean their patients—knew that they had no medical qualifications, that would be legal. Of course, one cannot operate on an animal without a licence.

Teaching lay people to carry out operations in Africa is an unusual but highly effective kind of capacity building. But some politicians, professionals and liberal idealists resent that approach because they see it as providing second-class care to developing countries. But it should be seen as providing more care, and more appropriate care—in fact, it is the best care available under the present conditions.

The United Nations recently inspected some of the capacity-building projects and found that little capacity was achieved in the long term. Its conclusion was that capacity-building efforts are best if they are demand-led—the people must want to do it. We must avoid capacity-building projects that we are sure that they need, when the people do not actually want them.

Clear five-year objectives must be set with clear time frames for their achievement. It must be possible to increase the ability of local people at all levels to organise and set goals and performance targets effectively, and to do that with decreasing dependence on external support. As my noble friend Lord Griffiths of Fforestfach emphasised and the noble Baroness, Lady Whitaker, neatly expressed, in giving aid to developing countries, we should be trying to do ourselves out of a job in the long term—but what a long term it is.

When it comes to HIV/AIDS, the role of heads of state has been crucial. Those presidents who have denied the problem have presided over disasters, whereas those who have been honest and given real leadership are well worth studying. Perhaps Africa has most to learn from President Museveni, whose campaign has led to a significant reduction in the incidence of HIV/AIDS, as mentioned by the noble Lord, Lord Dubs: from 31 per cent to 7 per cent among pregnant women. President Museveni's leadership and his close liaison with schools, Churches and NGOs has been inspiring. At the centre of his campaign has been the slogan "ABC"—abstinence, be faithful in marriage and condoms.

The Overseas Development Agency, under my noble friend Lady Chalker, was a great supporter of NGOs and gave £3 million to the Mildmay AIDS hospice in Hackney to build a similar centre in Uganda at the invitation of President Museveni. My noble friend very wisely advised me, as the chairman, that the centre should concentrate on teaching as well as on out-patient care. As many as 90 orphans can be seen there in a day. They are all dying of AIDS, but their lives are improved by treating them and their many complications, as well as giving them a good square meal. We also encourage patients by lending them £50 to set up small businesses, which helps to relieve their poverty, feed the children and boost their morale.

I visited Ugandan prisons and saw inmates acting in short four-minute plays, which were very powerful and demonstrated the appalling effects of AIDS and how it can be prevented. Local people seem to be much more effective than foreigners at getting the message across in their own way. Before leaving the subject of HIV/AIDS, perhaps I may also pay tribute to the noble Baroness, Lady Jay, and her husband for all their work in tackling the AIDS problem, and also the noble Earl, Lord Sandwich.

In summary, capacity building is the order of the day, but it is much more likely to work if we listen to the people we are trying to help and concentrate on what they want, rather than patronising them with our views on what we think they need.

Photo of Baroness Amos Baroness Amos President of the Council, Privy Council Office, Lord President of the Council and Leader of the House of Lords (Privy Council Office) 5:57 pm, 21st January 2004

My Lords, I thank my noble friend Lord Judd for introducing an excellent debate. His experience and expertise is greatly valued in this House. I thank the other noble Lords who participated in this debate for their very positive comments about the Government's development policy. However, noble Lords made it very clear that a great deal remains to be done. I shall return to the challenges in a moment.

This Government have much to be proud of in the arena of international development. Spending has risen steadily, and, by 2006, we will be spending £4.6 billion on overseas development assistance. One billion pounds of that will be allocated to Africa, underlining our commitment to the continent. My noble friends Lord Judd and Lord Dubs and the noble Baroness, Lady Northover, pressed me to give a date for reaching 0.7 per cent. I cannot confirm a date today, but our commitment to reaching that goal remains firm.

We have written off 100 per cent of debt owed to the UK by the poorest countries in the world. We have proposed a radical new international finance facility designed to raise the extra 50 billion dollars needed each year to achieve the millennium development goals, and we have untied all our aid so that recipient countries can spend it wherever they get greatest value for money.

Over the past six years, a quiet revolution has been under way in British development policy, and its effects have rippled around the world. The Department for International Development is today one of the most respected donor organisations in the world. It is respected, not just for the reductions in poverty that have been delivered in developing countries, but also for the quality of its ideas. Above all, I believe that the department has come to be respected because it represents the next wave in development thinking and, in particular, the importance of having an integrated approach to development and globalisation. My noble friend Lord Judd spoke of the importance of a joined-up approach. In particular he spoke about a cross-Whitehall approach. We saw this recently in our approach to the negotiations in Cancun. But we have also seen it in our conflict prevention work, the creation of the conflict prevention pool, which brings together the Ministry of Defence, the Foreign and Commonwealth Office and DfID; our work on aid effectiveness with the Treasury and the sustainable development agenda with the Department of the Environment, Food and Rural Affairs.

My noble friend Lord Hunt asked me specifically about the nature of inter-departmental reviews on poverty. I can say to him that where we have joint targets these reviews take place.

In a speech in Chicago in 1999, my right honourable friend the Prime Minister set out a new agenda on inter-dependence in foreign policy. We have come to realise that borders are of decreasing relevance in the world today because we have moving across those borders capital flow, migrant workers and refugees, infectious diseases and invasive species, trade and information and viruses both real and virtual. So we have come to recognise that the national interest and the global interest need to be aligned.

It is this recognition which is at the heart of our development strategy. We face immediate security challenges in today's interconnected world and these are threats to which we must remain alert and respond to them. But there are development challenges which also pose a threat to our world. For example, there is the growing prevalence of HIV/AIDS to which I shall return. In sub-Saharan Africa Botswana has a 39 per cent infection rate.

I agree with the noble Lord, Lord Freeman, when he said that security and stability are essential for development. That includes tackling corruption, focusing on governance and creating an environment to attract investment.

The United Kingdom has worked hard with its international partners to get the entire international development effort to focus on achieving the millennium development goals. But on current trends we will meet only two out of the 18 targets by 2015, the headline target of halving absolute poverty and the target to halve the proportion of people without access to safe water. Other targets including universal primary schooling, gender equality in schools, reductions in child and maternal mortality and combating the global HIV/AIDS epidemic will require a significant increase in effort if they are to be met.

But achievements in individual countries with substantial reductions in income, poverty in China and India, mentioned by the noble Lord, Lord Griffiths, demonstrate that progress can be made with the right political will and the right environment.

My noble friend Lord Judd asked what we are doing to help to fulfil the sectoral millennium development goals. We are committed to maximising the opportunities offered by the 2005 UK presidency of the G8 and the EU to push for faster progress on development.

We have three priorities, which are: accelerating progress towards achieving the millennium development goals, including taking forward proposals for mobilising additional finance; tackling the global HIV/AIDS epidemic; and addressing the challenges faced by Africa.

As regards the finance facility, I say to the noble Baroness, Lady Northover, that the UK Government do not see the IFF as a substitute for reaching 0.7 per cent growth.

I turn to some of the specific issues raised by noble Lords. I begin with health and HIV/AIDS. The noble Lord, Lord Soulsby of Swaffham Prior, spoke in particular about the 2 million who will die of tuberculosis and the 1 million from malaria. Over the past 50 years there has been enormous progress in improving global health but there remains a staggering scale of death and ill-health in developing countries. The links between health and poverty are clear. Poor people suffer greater ill health, which pushes people into poverty and they may be unable to escape. As the noble Lord made clear, poor health affects national economies and household income directly through decreased productivity and, importantly for the poorest, through significant out-of-pocket expenditure. So poor people need to be able to access good quality essential health services.

We have committed over £l.5 billion to strengthen health systems since 1997 ensuring access to trained staff, reliable supplies of drugs and health commodities and building effective management systems to deliver and measure progress. We have played a critical role in the development of, and worked closely with, Roll-Back Malaria, Stop TB, the global fund to fight HIV/AIDS, TB and malaria, the global alliance for vaccines and immunisation and the global initiative to eradicate polio.

HIV/AIDS was mentioned by a number of noble Lords, including my noble friends Lord Dubs, Lady Jay and the noble Lord, Lord Soulsby of Swaffham Prior. We have taken a leading role over the past few years both in pushing the issue up the world agenda and in giving financial and practical help. The noble Baroness, Lady Northover, asked specifically about the action that we will be taking. On World Aids Day last year we published our call for action, which re-emphasised our commitment to tackling the global epidemic and highlighted the need for stronger political direction, better funding, donor co-ordination and better HIV/AIDS programmes. We shall continue to offer the leadership required to get the world to focus on what we must do together because there is no individual country that can tackle the issue.

A number of noble Lords, including my noble friends Lord Judd, Lord Dubs and Lord Rea and the noble Lords, Lord Griffiths and Lord Freeman, spoke about the importance of a fair world economic system and trade. There is no doubt that Cancun was a setback. The continuing stalemate at the WTO meeting in December was a further disappointment.

My noble friend Lady Whitaker asked how the Doha round is progressing. We are absolutely committed to getting the Doha development agenda back on track. Looking ahead to our presidencies in 2005, we will be working to create the right conditions for the WTO negotiations to resume in a constructive atmosphere and to ensure real development gains from the round. We have committed over £160 million to trade-related capacity building since 1998. The money is targeted at the existing poorer countries to develop their own policies, participate fully in the negotiating processes and seize the opportunities that arise from trade liberalisation.

The noble Lord, Lord Rea, in particular pressed me on what support we are giving and have given. We contributed financial support to assist the African Union, the Africa, Caribbean and Pacific Group and the least developed countries to come together to discuss their common agenda for the round. At Cancun, 62 WTO members found their voice and exerted their influence by forming a new alliance.

There is no doubt that the burden of debt has played a major role in holding countries back from development. The right reverend Prelate the Bishop of Southwark, my noble friends Lord Judd, Lady Jay and Lord Rea and the noble Baroness, Lady Northover, all alluded to that. We have made progress since HIPC's launch. Some 70 billion dollars debt relief has already been agreed for 27 countries, reducing their debt by two-thirds on average and freeing up resources for spending on poverty reduction.

Our aim is that HIPC should provide poor countries with a permanent exit from unsustainable debt burdens. We have therefore been pushing for additional relief or topping up for countries which risk exiting the initiative with debts above the HIPC threshold. We are pleased that this was agreed for Burkina Faso and will continue to press to ensure that all countries with unsustainable debt receive top-ups.

The noble Lord, Lord Griffiths, made an important speech underlining the need for developing countries themselves to put the right macro-economic policies in place. The noble Lord made the point that we need to increase world economic growth. I agree. We in the Department for International Development have changed our approach, which is a result of acknowledging that reality. Where partner governments demonstrate a genuine, strong commitment to poverty reduction and where circumstances are appropriate—for example, where fiduciary risks are assessed as acceptable—we are moving our development assistance away from individual projects to providing assistance directly to partner government budgets.

Direct budget support allows us to support the implementation of a government's own poverty reduction strategy. I can assure my noble friend Lord Rea that we achieve better financial management of donor funds and the government's own funds. Perhaps I may also say to the noble Lord, Lord Griffiths, that not only do we measure output, but we also measure outcomes. We need to look at the quality of life of poor people and we need to look at the way that it has changed as a result of our support.

I could not agree more on the point about evaluations and external scrutiny. That is why the OECD peer review process and other evaluation mechanisms are so important. I also agree with the noble Lord, Lord Griffiths, my noble friends Lord Brennan and Lord Judd, the noble Lord, Lord McColl of Dulwich, and other noble Lords, about the importance of ensuring the effectiveness of our aid programmes. We have worked with the Treasury on that and, in advance of the Monterrey conference, have published a document that looks at the issue of aid effectiveness.

Agriculture was raised by my noble friend Lady Whitaker and the noble Lord, Lord Soulsby of Swaffham Prior. We are committed to supporting agriculture as a means of reducing poverty and achieving the millennium development goals. Achieving our goal of halving the number of people living on less than one dollar a day by 2015 will need a dramatic improvement in the performance of agriculture, particularly at the small and medium-scale level.

In response to my noble friend's particular question about the World Bank's micro-finance initiatives, we are one of the largest contributors to the World Bank. We work with the World Bank at the policy and country level to support micro-finance. Many times the noble Lord, Lord Thomson, has raised the issue of education in this House. The noble Lord's concern is that the focus is on primary education. Of course, that is our focus because of the relationship between primary education achieving universal primary education and tackling poverty.

I can say to the noble Lord that our support for the Commonwealth Scholarships and Fellowship Plan continues. In 2003, more than 700 awards were made at a cost of £11.7 million. The noble Lord will be pleased to know that we are also supporting, for example, the Kigali Institute of Science and Technology in Rwanda in developing science and technology courses. So there is some work that we are doing in the higher education arena.

The right reverend Prelate the Bishop of Southwark, my noble friend Lord Rea and the noble Lord, Lord McColl, referred to the importance of working with NGOs. We recognise the key role that NGOs play in development and the elimination of poverty. We have ongoing debate and discussion with representatives of the NGOs. Since 1996, support for UK NGOs has increased by 32 per cent to £222 million in 2002–03. The right reverend Prelate made reference to the recent Disasters Emergency Committee report on the humanitarian crisis in southern Africa, and the NGOs' response to that crisis. Perhaps I may say that NGOs are to be congratulated on undertaking that evaluation and the learning that will come from it.

On the matter of capacity building and the importance of capacity building being demand-led, raised by the noble Lord, Lord McColl, I absolutely agree. That is why we support country-led strategies. Developing country governments are involved in the choice of any consultants that are used as part of their poverty reduction strategy processes.

My noble friend Lord Hunt raised issues connected to the environment. The key outcome of the World Summit on Sustainable Development—the Johannesburg Plan of Implementation—recognises the importance of protecting and managing the natural resource base for economic and social development, and that that should be integrated into,

"country owned poverty reduction strategies . . . which should reflect the priorities of the poor and enable them to increase access to productive resources".

But challenges still remain. Many countries have little capacity to establish monitoring and information systems, or to develop appropriate macro-economic frameworks, or to devise suitable growth strategies. That is why DfID has identified a number of key sectoral areas in which we are giving support.

My noble friend Lord Rea asked me specifically about Iraq; I shall come on to points made by my noble friend Lord Brennan and the noble Baroness, Lady Northover, in relation to Iraq. Progress is being made in Iraq. Security remains a major challenge, but the coalition has launched more than 17,000 reconstruction projects of which more than 13,000 have now been completed.

As regards financing, at the Madrid Donors' Conference in October 2003, the international community demonstrated its commitment by pledging more than 33 billion dollars in grants and concessional loans, as well as trade credits and assistance in kind. The UK's total financial commitment of £544 million for three years was announced at that meeting. While on the subject of Iraq, I should reassure my noble friend Lord Judd that the commitment to Iraq has not affected our humanitarian or our emergency programmes. I should like to make that point clear to the noble Baroness, Lady Northover. I have made this clear to noble Lords in the past. We have not diverted funds from the poorest countries or from our humanitarian emergency strategy, and our commitment to 90 per cent of our funding reaching the poorest countries by 2006 remains.

My noble friends Lord Judd and Lady Jay were concerned that a simplistic analysis would be made in relation to terrorism, security and poverty. The noble Earl, Lord Sandwich, was also concerned about our strategy in the Middle East. My noble friend Lord Rea was concerned about a possible connection between terrorism and poverty. The Government's approach takes on board the complexity of the issue. We want to tackle poverty and support fragile and emerging economies. But, at the same time, we are grappling with how best we can seek to influence those countries where the state has collapsed.

I can tell the noble Earl that our strategy for the Middle East is to help governments, civil society and the private sector, across the region, to drive the economic, political and social change needed to enable progress towards achieving the millennium development goals. While we need to take a strategic approach to middle-income countries, we cannot just look at the fact that poverty exists in a country. I would remind the noble Earl that poverty exists in the United States—the richest country in the world.

I am very conscious of time, so I shall try to move to a conclusion. The challenges facing developing countries are huge. Africa has been mentioned several times in this debate. During our presidency of the G8, we intend to focus on areas where we believe that concerted action in Africa can have real results. That includes getting more girls enrolled in primary school, where we are aiming for 70 per cent by 2005; addressing the HIV/AIDS epidemic; and enhancing African peace-keeping capacity, because conflict has had a major impact on development opportunities in sub-Saharan Africa.

My noble friend Lord Judd asked specifically about the arms trade. The Government welcome the arms trade treaty for the contribution that it makes to international debate. But if such a treaty is to have an impact we must gather support from a wider range of countries, not just those that already practise responsible policies. We are working with overseas countries to set up regional and sub-regional meetings to discuss and agree arms transfer controls.

I have said many times in this House that despite the many challenges that continue to face us, achievement of the millennium development goals is still possible with political leadership and political will. In this Government we have that political will and we have that leadership. We will continue to work in partnership with the IFIs, with partner governments in developed and developing countries, with the NGOs and the business community to keep these issues high on the international agenda.

Photo of Lord Judd Lord Judd Labour 6:19 pm, 21st January 2004

My Lords, I sincerely thank all those who have contributed to the debate. In particular, I thank my noble friend for her characteristic, thorough and detailed response. We are altogether fortunate to have the Leader of the House insisting on demonstrating her personal and ministerial commitment to the subject.

Perhaps I may just say that this has been an important debate. There is a great deal for us to digest, such as the macro-micro dimensions, the importance of discipline within the developing countries themselves, which is absolutely essential to success, the multilateral dimensions and the rest. Many vivid points have been made. Perhaps one endearing point that will remain with all of us was that fleeting moment of the picture of the Opposition Whip with a goat in the lapel of his jacket. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.