My hon. Friend Meg Munn has instigated a timely debate on the important matter of air access to St. Helena.

I use my remarks today to present a wider perspective on the issues that have been raised and to elaborate a little on the statement that the Government made yesterday on how we wish to proceed. Although I have not had the experience of visiting the island myself, my immersion in the subject over recent months makes me feel almost as if I had been there. Because of the interest shown in the project, and expressed on both sides of the House, I feel rather as Napoleon must have at one time—that there is no getting away from St. Helena.

I want to reassure my hon. Friend that, at root, there is no difference between us on a long-term commitment to St. Helena. However, in facing the challenges before us today, the Government must be responsible and take stock if circumstances change to the extent that they have. That is what we are doing. That is why we announced the consultation exercise yesterday; we want to ensure that all views will have been heard when we come to decide on the way forward. I shall speak on that in more detail in a moment.

Hon. Members will be aware that on 8 December last year we announced that there would be a pause in negotiations over the St. Helena airport contract. We decided that it was necessary in the light of the changed economic climate, which has been changing for the worse for many months but which intensified quite dramatically in the autumn. The Government had a responsibility to take a step back and to review whether it was right to proceed with the project in such circumstances.

I hope that all hon. Members will agree that present circumstances present a very different setting from those of 2007, when the project was tendered for, and even more different from when the initial announcement was made in 2005. We have a responsibility to be absolutely sure that levels of expenditure that the project could incur remain appropriate. I met the Governor of St. Helena on his recent visit to the United Kingdom to explain how matters stand and to hear his views. I have also met Impregilo, the bidding company, to explain our position. I am, of course, aware of its decision to maintain the validity of its bid until the end of April. It is for the company to judge its response in the light of yesterday's announcement, which presents a longer timeline before a final decision is made.

As my right hon. Friend the Secretary of State said recently, the present economic conditions are unlike any that we have seen for generations. The medium and long-term consequences are uncertain at present. However, those conditions significantly affect the Government's ability to achieve all their international development objectives. Therefore, the reality is that we must revisit the choices before us, although we recognise the special place that our overseas territories have in our aid programme.

At this point, I should correct my hon. Friend—the overseas territories do not have first call on DFID's funds per se, but first call for reasonable development needs. It must be seen in that wider context. Inevitably, part of the consideration is what is reasonable in the present circumstances. Other overseas territories are also experiencing difficulties in the current climate, and we must recognise those new pressures too when coming to a decision.

The impact of the crisis is being felt in the developing world already. Aid and private finance flows are already falling, remittances are dropping and demand for trade exports is slowing. It is estimated that by December 2010 about 90 million more people will be living on less than $1.25 a day, because of the financial crisis. Progress towards delivering the millennium development goals will slow significantly, and there is already evidence from Ethiopia, Bangladesh, India and Pakistan suggesting that the poor are taking their children out of school to save money.

Developing countries are being hit, and in different ways. The volume of our aid has been adversely affected by the sharp depreciation of sterling against most other currencies. Our UK aid pound is not going as far as it used to. Export markets are reducing and the level of world trade is falling for the first time in 25 years. Remittances sent by individuals back to developing countries are expected to fall by up to 6 per cent. this year alone. Capital flows to emerging economies are predicted to fall by 80 per cent. in 2009, compared with 2007 levels. The prospects, therefore, for millions of people in developing countries are changing rapidly for the worse.