Clause 1 - Development Assistance

International Development Bill – in a Public Bill Committee am 11:00 am ar 13 Mawrth 2001.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of John Butterfill John Butterfill Ceidwadwyr, Bournemouth West

With this, it may be convenient to consider the following amendments: No. 2, in page 1, line 16, at end insert

`or—

(c) promoting good governance in one or more such countries'.

No. 3, in page 1, line 16, at end insert

`or—

(d) reducing conflict or the potential for conflict in one or more such countries'.

No. 4, in page 1, line 16, at end insert

`or—

(e) putting in place the framework necessary to attract private and foreign direct investment in one or more such countries'.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development)

The four amendments go to the heart of the Bill, which is substantially contained in clause 1, do I hope that the Committee will bear with me while I comment on each amendment in turn.

Our reason for tabling amendment No. 1 is to allow the Secretary of State to provide development assistance to a country or countries provided that he or she is satisfied that the action will lead ``directly or indirectly'' to a reduction in poverty. Inserting those words would enable the Secretary of State to provide assistance to organisations, projects or others who seek to lay the foundations for poverty reduction. In other words, assistance could be provided for economic development, governance or other matters that I will discuss in relation to the other amendments. We think that such matters cannot be described as directly contributing to a reduction in poverty, but we all know that they will form part of the total effort to reduce poverty. The desire to reduce poverty is not at issue between us; the aim of clause 1 is one to which we all subscribe.

The ``Oxford English Dictionary'' provides a definition of poverty, which is crucial to a reading of the Bill. It describes poverty as

``the state of being poor ... want of necessities''

of life. There is no definition of poverty in the Bill—I hope that the Minister will tell us the reasoning behind the omission of such a definition; even though I can probably guess what he will say, it would be nice to have explained the thinking behind the Bill's drafting. There is a danger that the term ``poverty reduction'' will be used to mean a small number of policies to alleviate poverty in the short term, rather than the broad multi-sectoral approach that is needed to change systems of government, establish political stability and so create an environment in which poverty can be driven.

The Minister will know that the United Nations Development Programme highlighted the fact that some agencies used a narrow definition of poverty in their programmes. The UNDP ``Poverty Report 2000'' stated that some anti-poverty plans continue to treat poverty as though it were a sectoral issue. I hope that the Minister will comment on that and explain the Government's reasons for wanting to legislate. If clause 1 does not formally recognise indirect ways of reducing poverty, the Government could be constrained to a narrow set of policies that would treat the effects of poverty rather than attack its causes. The UNDP explains in its report that poverty is a multi-dimensional problem that requires comprehensive multi-sectoral programmes. That is why the Bill should mention that many policies will be directly and indirectly necessary to reduce global poverty.

The Government's programmes would have to satisfy a want in poor and developing countries of the necessities of life, as defined in the ``Oxford English Dictionary'', and generally make their people more wealthy. However, it is difficult to imagine that all Government aid programmes, particularly programmes on governance and other more technical matters, would be able to do that beyond a shadow of doubt. That is why the Bill should state that some of the Government's work in trying to reduce poverty might be done far away from the lives of the poor themselves.

It is vital that all the programmes meant to lay the foundations for a reduction in poverty should be mentioned in the Bill. It should include all the Government's programmes that are intended to strengthen government institutions and the rule of law, which should lead indirectly to better government, better policies and a participation in the democratic process—and consequently to political stability and economic growth.

The UNDP ``Poverty Report 2000'' states that a study of aid donors undertaken by the Organisation for Economic Co-operation and Development found that the overriding goal of the UNDP, the World Bank and such bilateral donors as Canada, Denmark, the Netherlands, Sweden and the UK was poverty reduction. That report was published on 3 April 2000, so I must ask whether the Bill is absolutely necessary. Are we not over-egging the pudding? If the UNDP believes that poverty reduction is the overriding goal, is it not a piece of gratuitous legislation? Is not the Secretary of State unnecessarily binding her hands behind her back by legislation when, according to an outside auditor, she is already acting within that framework? What difference the Bill will make to the Government's work and how, if at all, will it change the nature of poverty reduction?

Amendment No. 1 is coupled with our questions about the definition of poverty. Second Reading was well attended—indeed, I believe that more hon. Members than could be fitted in wanted to speak on Second Reading—and hon. Members on both sides of the House mentioned the absence of a definition in the Bill. If the definition applies to the poverty of a country, do we base our judgment on gross national product per head of population? Do we consider the country's potential? Will the Minister and the Secretary of State be able to draw a line in the sand and if so, where? What is the Department's understanding of the meaning of poverty, and how do we judge it? Do we consider individuals' poverty or the country's poverty?

In the Budget a few days ago, the Chancellor boasted that he had lifted X number of children in this country out of poverty, which provides another example of the use in the House of the word ``poverty''. In the absence of a definition of poverty in the Bill, how do we judge whether the Department's focus will be on specific individuals, groups, countries or organisations? I hope that the Minister will reflect on that and tell us about the arguments deployed within the Department, as that will be of great interest to all members of the Committee.

We tabled amendment No. 2 for the same reason as we did all the amendments in the group, which is to introduce more certainty into the Bill. The amendment is not intended to do anything other than what it says. If the Minister were gracious enough to accept the sense of any of our amendments, we would allow their wording to be altered slightly. If he thought that any of our suggestions were helpful and wanted to act on them, I should be delighted to hear it and would follow whatever procedures were necessary to enable Government amendments to be made.

The amendment stresses the importance of good governance in developing countries as a key to poverty reduction. It would allow the Secretary of State to provide assistance to projects or programmes that could not be described as contributing to a reduction of poverty, but focus on good governance or are designed to lay its foundations. It is not outwith anyone's imagination that the Government will sometimes want to take such action.

The encouragement of good governance is an indispensable part of our aid programmes and those of many other countries. Several agencies have stressed the major impact of good governance on poverty reduction. I went to Indonesia with the Westminster Foundation for Democracy to see in action a project relating to that country's elections. We tried to shape improvements in Indonesia's democratic system and thus to lay the foundations for the general economic health, well-being and stability of the area. We spent time in discussion with members of the Australian aid agency, which, unsurprisingly, put considerably greater funds into that part of the world than we did. The Australians emphasised the importance of political stability and good governance in raising people's quality of life. The UN Development Programme has stated:

``Effective governance is often the ``missing link'' between national anti-poverty efforts and poverty reduction''— and thus it makes the point that anti-poverty efforts are useless without responsible and effective governance.

The executive summary of ``Overcoming Human Poverty: the UNDP Poverty Report 2000'', stated:

``For many countries it is in improving governance that external assistance is needed''.

That is fundamentally right. Good governance needs to be at the heart of the Government's aid and development policy. I do not mean that a poverty focus is worse, and a good governance focus is better; rather, I mean that the poverty-reduction focus is not possible without good governance, which should, therefore, be at the foundation of all our work in this sphere.

The World Bank World development report 2000 states that poorly functioning public sector institutions and weak Governments were major constraints on growth and equitable development in many developing countries. On page 11, which refers to reforming public institutions and strengthening Governments, the importance of good governance to poverty reduction is stated. We receive constant and continuing endorsement from organisations at the forefront of development of the necessity for good governance as the foundation stone on which effective development projects are built.

The Government have already said in the 1997 White Paper, ``Eliminating World Poverty: A Challenge for the 21st Century'':

``Some countries will make more rapid progress towards the international development targets than others. Those most likely to succeed will have effective government, enlightened legislation, prudent budgeting and an efficient administration''.

The Secretary of State has said:

World Bank research shows that if aid is focused where the poor are and where the national Governments are committed to reform, the effectiveness of the US $50 billion or so in the international development system is increased by 50 per cent.'' —[Official Report, 6 March 2001; Vol. 364, c. 159.]

If the Government truly believe that good governance is a key element in the battle against poverty, they should make that explicit in the Bill. If countries that have good governance make the most rapid progress towards poverty elimination, surely Government resources need to be ploughed into good governance?

The focus on the importance of good governance should be reflected in the Bill. That would give great comfort to many people and improve the Bill without detracting from it at all. What I propose is among our key amendments, and I hope that the Minister will seriously consider it. My hon. Friend the Member for South-West Devon (Mr. Streeter) focused on that issue on Second Reading. Even in the White Paper ''Eliminating World Poverty: Making Globalisation Work for the Poor'', the Government said that effective Governments are essential if developing countries are to reap the benefits of globalisation and to make that process work for poor people.

I offer the Minister a chance to reflect in the Bill aims that we share in a way that should improve the legislation. There is nothing new about it. In the course of research, I saw work that had been done by the former Minister of State for Overseas Development, now Baroness Chalker. Back in 1991, she was speaking powerfully about good governance and practical ways to promote good government. On 25 March 1991, she said that promoting good government was a critical part of the Government's foreign policy agenda. They had made it clear that they would use all the levers available to encourage respect for human rights, free markets, sensible economic policies and efficient public administration. She asserted that millions of people remained trapped in a dismal cycle of poverty, hunger and depression, not knowing where to turn, but that the collapse of communism and the failure of many brands of socialism had given us more opportunities to help them.

I do not think that there has ever been a quarrel about this issue. It would, therefore, be wise to incorporate in the Bill the amendment or, if the Government do not like the wording, a variation on the theme. In that way, we would enshrine the key elements of good government in legislation. We would be able to manoeuvre around mechanisms to encourage competence, sound economic policies, the effective use of resources, the stamping out of corruption and the avoidance of excessive military expenditure. We could examine legitimacy and accountability, freedom of expression, political pluralism, broad participation in the development process and, lastly, the key issues of human rights and the rule of law.

Good government is essential in any country, because it allows economic growth and leads to sustainable development—which we all welcome—and the effective use of resources, whether domestic or provided by aid donors. In addition, it encourages enterprise and allows benefits to be widely shared. The poor must not be excluded from the process. By including it in the Bill, we demonstrate the mood of realism in discussions about international development.

There is increasing recognition that good government attracts donors and inward investment. It lays the foundations for countries that have been on an downward path to regain their momentum onwards and upwards. Conservative Members believe that real change can only come about in a developing country when there is political stability. There needs to be a framework of competent and responsible government, accountable institutions and a strong civil society.

It is crucial that developing countries establish a strong rule of law and an effective and honest legal system. Our aid programme should empower them to do that. We have written into our international development policy that we will increase the focus on strengthening the democratic framework in those countries that we help. There should be prioritising of resources and technical expertise toward that objective, which I am not entirely sure can be achieved within the parameters of the Bill as drafted.

We need to find new ways to make specific areas of British expertise available to developing countries. For example, we must build on the success of the know-how fund. When I used to do what I laughingly describe as a proper job before entering the House of Commons, I was privileged to work for one of our major companies, Ernst and Young, on developing contacts and offices, taking its clients into the former Soviet Union. I saw at first hand how aid going to former Soviet satellites brought about extremely beneficial changes in those countries—so beneficial that many of them are now reaching the economic standards that will allow them to join the family of the European Union. Finding new ways to build on the successes of such programmes might not be excluded by the Bill as drafted, but it should be explicitly acknowledged in it.

Photo of Mr Andrew Rowe Mr Andrew Rowe Ceidwadwyr, Faversham and Mid Kent 11:15, 13 Mawrth 2001

Is my hon. Friend aware that there would be widespread support—especially, as I understand it, from certain elements in the Foreign Office—for the export of Elizabeth Filkin to provide advice overseas?

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development)

I am grateful to my hon. Friend for that ingenious intervention; he will forgive me if I choose not to comment on it, but we all know what he meant. [Interruption.] If you do not know what he meant, you do not deserve to be in the Whips' Office.

Photo of John Butterfill John Butterfill Ceidwadwyr, Bournemouth West

Order. I am not in the Whips' Office.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development)

I apologise, Mr. Butterfill, no disrespect was intended.

I think that it is now clear to all members of the Committee—it is certainly our firm belief—that when developing countries make a commitment to good governance, aid money is better spent and foreign direct investment is encouraged. Foreign aid alone will never be sufficient to lift a country out of poverty; it is by encouraging the private sector and foreign investment that economies will grow and living standards will increase. Our development policy would help to lay the foundations of stability on which developing nations can build.

We want to empower developing countries that are committed to change to be able to govern responsibly for all their citizens. If I thought for one moment that the Minister did not think the same, I would not be labouring that point with amendment No. 2, but I know that there is a glimmer of hope. I know that he is surrounded by an able team of officials and I appeal through him to those responsible for drafting the Bill that if any amendment to the Bill is to be accepted, it should be amendment No. 2.

Including that provision in the Bill would mean that we had contributed to improving the Secretary of State's position, manoeuvrability and the way in which her actions on aid would be viewed. When my hon. Friend the Member for South-West Devon becomes the new Secretary of State following the election, he will be most happy that the provision has been included in the Bill to frame his actions.

I shall not move on from amendment No. 2 without saying a word about the British Council—as the Minister knows, I have a bit of a bee in my bonnet about the British Council—because, especially in the context of good governance, the British Council's contribution to stability in countries around the world has been invaluable. The Labour party manifesto ``A Fresh Start for Britain: Labour's Strategy for Britain in the Modern World'' stated that, in the global context outlined, the BBC World Service and the British Council would not be marginal instruments but the spearhead of Labour's policy. The document stated that, in office, Labour would work to maintain and build up the success of the front-line services of those organisations. That has not happened, but I am not sure that that is the Minister's fault, as he is new to the Department.

One factor contributing to the decline of the British Council is the shift in DFID's use of it to deliver contracts, on which I have still not received satisfactory replies. At the same time as the British Council is forced to close offices, the Department is increasing its stand in some areas, especially Africa, and also its staffing and presence.

Photo of John Butterfill John Butterfill Ceidwadwyr, Bournemouth West 11:30, 13 Mawrth 2001

Order. We all share the hon. Lady's enthusiasm for the work of the British Council, but she is going wide of the amendment.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development)

I am so sorry. I shall drag my speech back to the amendment. It is in the promotion of good governance in other countries that the work of the British Council has been so exemplary on the world stage, so far as development practice and procedure is concerned. If use the of the British Council as a delivery mechanism for aid contracts has been dramatically withdrawn—indeed, slashed—that will have a knock-on effect on its other programmes, such as the delivery of good governance.

Photo of John Butterfill John Butterfill Ceidwadwyr, Bournemouth West

Order. The amendment clearly relates to the promotion of good governance, but we cannot use it to debate the work of the British Council.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development)

I hear what you say, Mr. Butterfill. Please accept my unreserved apologies, but I could never forgive myself if I did not mention the British Council in this context.

Photo of John Butterfill John Butterfill Ceidwadwyr, Bournemouth West

The hon. Lady has made her point.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development)

Amendment No. 3 seeks to put into the Bill a provision on which there will not be a cigarette paper between members of the Committee, and my hon. Friend the Member for Blaby will want to speak to it as he has special expertise on the matter. The amendment seeks to give the Secretary of State the power to provide financial or technical assistance in an attempt to reduce ``the potential for conflict'' in developing countries. That could include the provision of assistance to countries in central and eastern Europe, to assist with controlling the supply of small arms from them to areas of conflict. We are all concerned about that, on which action has not been taken in the lifetime of this Government.

The amendment would also bolster the Secretary of State's position, and allow her to provide assistance for holding a consultation exercise for setting up, for example, a register to monitor the activities of UK arms brokers, or to take any other action to reduce the potential for conflict. We are trying to strengthen the Secretary of State's arm, so I hope that the Minister will not dismiss the amendment out of hand.

It is vital that no measure to prevent the potential for violent conflict in developing countries is made illegal by the narrow terms of poverty reduction in the Bill. We believe that the Bill should make explicit reference to conflict, as it is often the root cause of poverty and political instability. I know that the Government agree with that. Indeed, in the globalisation White Paper, they said that the promotion of peace and stability is indispensable if countries are to attract investment and trade and promote ``pro-poor'' development. Violent conflict is one of the biggest barriers to development in many of the world's poorest countries. We have it from the horse's mouth—the Government wrote it into the White Paper—but the amendment would give a little more power to their elbow by putting it in the Bill.

On that matter, the Secretary of State has an ally. She does not have many in the Cabinet; she is a valiant and doughty fighter—I take my hat off to her—but she is sometimes very isolated and out on her own. I see the hon. Member for Wolverhampton, South-East (Mr. Turner) nodding, so he does not think that she is a doughty fighter.

Photo of Mr Dennis Turner Mr Dennis Turner Labour/Co-operative, Wolverhampton South East

Oh no, we are all great supporters of her.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development)

So the right hon. Lady's parliamentary private secretary and I agree; we could not fit a cigarette paper between us. She is a doughty fighter, but she needs allies in the Cabinet—as we all do.

I pray in aid the Chancellor of the Exchequer, who was quoted in the Glasgow Herald last year as saying that countries will struggle to make the necessary commitments to poverty reduction and economic growth if they are affected by conflict. There we have it: Gordon Brown agrees with the Secretary of State. That another senior and powerful member of the Cabinet agrees is an even more powerful reason to include the amendment in the Bill.

It is important also to recognise that action taken to prevent the proliferation of small arms in developing countries could legitimately mean British aid money being used to strengthen Customs and Excise or to help economic diversification in the countries from which those arms originate. As the Minister knows, such arms often come from the countries of central and eastern Europe. We are worried that the Bill's poverty focus may render such assistance illegal. If the Minister will not accept the amendment, will he at least reassure us that such a poverty focus would not render such assistance beyond the pale and outwith the scope of the Secretary of State?

The nature of conflict in the 21st century has changed dramatically. Conflict is now largely within states rather than between them. That presents unique difficulties when trying to broker international peace settlements. We in the United Kingdom always play our part in preventing and resolving violent conflict. The amendment would help by giving a voice to those policies. The Opposition are keen to initiate concerted international action to crack down on the proliferation of small arms, which undoubtedly perpetuates conflict in developing countries.

The matter is routinely a subject of debate in our Back-Bench committees when considering such conflicts. Indeed, some Committee members have been present at meetings where it has been acknowledged that the inflow of small arms has been directly responsible for some of the worst conflicts, especially in Africa. Most light arms used in such conflicts originate from eastern Europe. They are trafficked via arms brokers operating from western countries. Conservative Members believe, and I am sure that the Minister would agree, that we should consult widely and introduce a new scheme to control the activities of British arms brokers overseas. That may fall within the scope of the legislation if the amendment were accepted.

I am asking for some comfort from the Minister because, in the absence of such a provision, we need to know what will happen to other programmes. For example, what will happen to funding for something like Patrol Task (North), the West Indies guard ship in the Caribbean, which is fighting the drugs trade that, in turn, is helping the violent conflict in Colombia? Would funding of such an operation be deemed to be poverty reduction within the terms of the Bill or would it fall outwith the legislation and therefore not be allowed?

What about sending in military trainers or observers for elections? What about education programmes on building democracy? What about peace projects such as the one in Zimbabwe? What will happen if no Government Department is willing or able to spend on such projects? I am especially exercised about what will happen to organisations such as the HALO Trust and to action on land mines. There is no doubt that there has been an increase in spending on de-mining. I was reading in the report ``Turning words into action'' by the UK working group on land mines that, between 1991 and 1998, we spent about £35 million on humanitarian de-mining. We are now spending as much as £10 million a year. What is the position regarding de-mining?

Photo of Mr Andrew Rowe Mr Andrew Rowe Ceidwadwyr, Faversham and Mid Kent

Is not one of the key issues whether de-mining is helping the poor or the rich? There have been disturbing stories that a great deal of de-mining expertise is diverted away from helping the poor by corruption. For example, people who want to build a hotel will pay to have that part of the land cleared of mines by experts who should be clearing the land of poor peasants.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development)

My hon. Friend makes a point about which I have no substantive knowledge, but it does not take much to extrapolate from what he says that there are two ways of looking at the issue. It must be a good thing if, by clearing the land, building a hotel and encouraging tourism, the economy is lifted and people are provided with gainful employment and taken out of poverty. However, it certainly would not be a good thing if it meant that an area of hardship was abandoned. We have all seen pictures of what happens as a result of the indiscriminate laying of mines. Indeed, when I was last in the Falkland Islands, I was moved to see that vast areas that are still covered in mines have merely been fenced off and abandoned because it is impossible to remove the mines.

Photo of Mr Andrew Rowe Mr Andrew Rowe Ceidwadwyr, Faversham and Mid Kent 11:45, 13 Mawrth 2001

I hesitate to interrupt my hon. Friend again, but I do not want her to miss my obscure point. It seems to me that transparency is required. No one minds if a transparent decision is taken that, in the longer term, the poor will benefit more from the employment possibilities provided by a hotel than they will from de-mining a small peasant farming area. What is worrying is when that decision is not transparent and it is perfectly clear that somebody in the de-mining organisation is taking a back-hander in order to distort the priorities.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development)

Yes, that point was so subtle that I had missed it; my hon. Friend makes it clear. I thank him for providing more detail.

I am conscious that I have been on my feet for some time, but, as I said at the start, a substantial part of the Bill is encompassed by clause 1 and the four amendments, which are of great importance. I move swiftly to amendment No. 4, which is intended to allow the Secretary of State to provide assistance for measures designed to attract foreign direct investment. That is based on the assumption that attracting foreign direct investment and private investment is a major purpose of development aid, because it helps to provide more tax revenue for Government to boost the local economy, to create jobs and to bear the risk if projects fail.

All experience shows that attracting foreign direct investment into developing countries is an essential element of poverty reduction. In chapter 1, page 18, the globalisation White Paper states:

``over the last few decades in reducing the proportion of people living in poverty has been largely the result of economic growth: raising incomes generally, including those of poor people. Economic growth is an indispensable requirement for poverty reduction.''

Taking those words at face value, we suggest that we add that objective to clause 1, to give voice to the Secretary of State's aspirations in the White Paper.

Foreign direct investment by multinational companies in developing countries boosts the local economy, creates jobs and helps to alleviate poverty. Foreign direct investment is far more important in the long term to developing countries than small increases in development aid. Foreign direct investment helps to remove some of the financial risks that Governments of developing countries face when they borrow from banks; companies bear the risk if their investments fail. If investment is successful, the host Government benefits from increased tax revenues and the investor benefits from the resulting profits.

I have seen that process at first hand. I referred to my experience of the former Soviet Union. It is a great pleasure to see how former satellite countries of that state have attracted foreign direct investment, boosted their economies and raised their standards of living. I am sure that we will hear anecdotes from many members of the Committee today, because many are well travelled and will have seen that process for themselves. That is not mind-blowingly new; it is received wisdom shared by all members of the Committee, so I encourage the Minister to consider including it in the Bill.

The Government themselves stress the importance of foreign investment in the globalisation White Paper. It states:

``The attraction of capital inflows is an essential element of a strategy to speed up sustainable development and poverty reduction.''

The document also states:

``A central feature of globalisation has been the substantial increase in movement of capital around the world. Foreign direct investment...to developing countries increased from US$36 billion in 1992 to US$155 billion in 1999, more than three times the level of development aid.''

Think of the contribution that that has made. Attracting foreign direct investment is vital to development.

If the Government have seized a window of opportunity to introduce the Bill, it would be foolish of them not to seize the opportunity to add this provision to it. It would send a signal to private investors that the Government and a future Conservative Government would positively welcome foreign direct investment and private investment in the countries to which we deliver development assistance.

I have taken some time and pains to speak to the four amendments. Notwithstanding the comments of some Labour Members, my hon. Friend the Member for South-West Devon—he has devoted great time and effort to his brief—my hon. Friends in Committee and I genuinely want to boost the Bill. I ask the Minister, in some way, to accept the amendments or acknowledge the issues that I have raised. I do not believe that he dissents from my point of view. I do not ask him to perform a difficult task, and it is not outwith the realms of possibility. The Opposition would bend over backwards to allow him to accede to our requests. In the spirit of co-operation, I ask him to accept our suggestions.

Photo of Dr Jenny Tonge Dr Jenny Tonge Democratiaid Rhyddfrydol, Richmond Park

I was interested to hear the hon. Lady talk about definitions of poverty. I suppose that it is difficult for those of us who have been to developing countries to compare poverty there with poverty in this country. I do not know why she is so puzzled, however. The international financial institutions were clear about which countries to class as highly indebted poor countries, and suggested clear guidelines to define a poor country. The United Nations did the same job for income per head per day. It was a little irrelevant to spend 20 minutes of debate trying to decide what poverty was. What we are talking about is perfectly obvious, even to those of us who, like me, have spent only four years on international development matters.

The Bill is necessary to prevent aid from being used for purposes other than alleviating poverty. We know that the previous Conservative Government were extremely good at diverting aid to other purposes, especially to promote the United Kingdom's trade and manufacturing industry. It is obvious to most hon. Members in my party what the Bill is for, and we welcome it.

The hon. Lady said that the causes of poverty were, to use her word, multifactoral. That goes without saying, so why single out three factors? It is extremely dangerous to do that.

We all want good governance, but it is not difficult to define. Does Uganda have good governance? Some of us who have been there think that Uganda is doing a pretty good job for its people, by alleviating poverty and bringing them into the modern world.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

The hon. Lady and I visited Uganda together and we both took the view that Uganda was doing a good job. It now appears that good governance is becoming more of an issue in Uganda. Perhaps the Bill should be saying that good governance will always be at the top of the issues that we address. If it starts impacting adversely on development, as appears to be the case, Uganda, which is the example chosen by the hon. Lady, will suffer as a result.

Photo of Dr Jenny Tonge Dr Jenny Tonge Democratiaid Rhyddfrydol, Richmond Park

Uganda is beginning to consider whether it wants to carry on as a no-party state. The reason why it has been so stable for so many years is because political parties have been banned, which may have been a good thing for Uganda for a while. I am uneasy when I think of how many years it has taken us in western Europe to have a semblance of good governance, and how long it has taken to work out what parliamentary democracy means. Some of us still believe that we have not yet worked it out correctly.

We have taken a long time, but we dictate to developing countries, having abandoned them after colonial rule, how they should govern themselves. We should be a little more humble in the face of other methods of governance. It is difficult to say who is doing a good job.

Financial corruption is always mentioned when considering how much aid money and the money earned by a poor country goes towards alleviating poverty and how much goes into the back pockets of dictators. Western politicians could really teach them a thing or two about financial corruption. We know all about it. Organisations such as Transparency International, which the Select Committee met in Bangladesh, try to prevent financial corruption. However, we should be careful when dictating the system of governance of a country. The system has to evolve and it has to suit the specific country. It is extremely difficult to define.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development)

I am not sure what the hon. Lady meant when she said that we in the west can teach other countries all about corruption. Notwithstanding current events, this country is relatively corruption-free by anybody's standards. Is the hon. Lady saying that my amendments prescribe a system of governance? That is not the point of them at all. They would give the Secretary of State the liberty to put a system of good governance at the forefront. Without such a system, it would be almost impossible for the general population to lift itself out of poverty and to drive out the forces of corruption. A system of good governance would also lead to the development of the rule of law.

Photo of Dr Jenny Tonge Dr Jenny Tonge Democratiaid Rhyddfrydol, Richmond Park

I was about to say that good governance depends on many other factors that the hon. Lady has not mentioned, such as education, for example. There cannot be good governance without education, so why has no amendment on education been tabled? There cannot be a high level of education in a country unless there is good health care, and that cannot happen unless there is clean water. Where are those amendments?

Photo of Dr Jenny Tonge Dr Jenny Tonge Democratiaid Rhyddfrydol, Richmond Park 12:00, 13 Mawrth 2001

No. I shall not give way again. To single out only three factors from all those that contribute to poverty is na—ve in the extreme.

It is a bit rich for the Conservative party to talk about conflict prevention when we consider what went on under the previous Government. Selling arms to Saddam Hussein springs to mind. Was that preventing conflict? What about mines in the Falkland Islands? I remember trouble there during the previous Government's term of office.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

Will the hon. Lady give way on that point?

Photo of Dr Jenny Tonge Dr Jenny Tonge Democratiaid Rhyddfrydol, Richmond Park

No. I get tired of the hypocrisy of the official Opposition. We had 18 years of Conservative Government, and it is now someone else's turn. Let them have a go to see whether they can do better. The Conservative Government made an abysmal mess of the world.

The causes of poverty are multifactoral. Where is an amendment to cover the AIDS epidemic, which is the scourge of developing countries at present, and which will spread to the west if we are not careful? Where is an amendment calling for money to be ploughed into a vaccine for AIDS? What about saying that education is more important than ever in the AIDS epidemic? What about promoting the position of women? We know that educating women does more for the economic progress of a country than any other factor, so where is an amendment to cover that? What about the trade agreements that are skewed against developing countries all the time? I could go on.

Let us not single out three factors that contribute to poverty. If we do that, it looks as if the others are not as important, which is an extremely dangerous thing to do.

Photo of Mr Andrew Rowe Mr Andrew Rowe Ceidwadwyr, Faversham and Mid Kent

I rise to support the amendments, and shall start with amendment No. 1. It is vital that we do not, either intentionally or inadvertently, create problems. For example, a country may make considerable progress, and be within discernible distance of becoming independent of development systems. It would, by definition, not be among the poorest of the poor, so it would be extraordinary to withdraw international assistance just at the point when it was likely to become a success. I hope that the Minister will reassure me that there is nothing in the Bill that will prevent the continuation of a programme of assistance to make a country self-sustaining when it ceases to be among the poorest of the poor.

It is not clear whose poverty we are talking about. Let me give an extreme example of a scholarship for one young man or woman. That would ensure the training required to become immensely successful, thereby reducing the person's poverty, but it might do nothing for the country from which the person came.

I know how the Secretary of State feels about that situation. I think that she goes too far and undermines higher education in countries that desperately need it by her insistence that it is only for the elite. I have seen the university in Rwanda, and believe that it is a mistake that it should be allowed to continue in that state because it is believed that only the elite enjoy such services in a corrupt society. Students are desperate to learn agricultural and other skills. Nevertheless, we need to look carefully at whose poverty we are talking about.

Some of my colleagues on the Select Committee and I went to a Cambodian village. We were taken there by an NGO, which was operating an excellent project, the main thrust of which was to help peasant families with very poor land and too little land to sustain a family to make more of what they had. It came as a rude shock to discover that about 44 per cent. of those living in that village had no land at all. The development assistance was well targeted and effectively implemented not to the poorest of the poor, but to the stratum above. That is an important issue.

We must make it clear that under amendment No. 1, which would insert the words ``directly or indirectly'', indirect assistance would include helping NGOs, but we should be much tougher and insist that they provide evidence that they are giving senior positions to people from the countries concerned. Some NGOs are good at that, but some are not. Some of the countries that shame us with the amount of assistance that they give--for example, some of the Scandinavian countries--are poor at involving indigenous people, and a huge proportion of the aid provided by northern countries to southern countries is returned to their nationals in salaries, and so on. That is an improper use of money and long out of date.

A colleague on a project in Zimbabwe, who was once an ex-pat in Ethiopia, told me that when he was working on a Scandinavian project--it could have been a British project--in Ethiopia, an ex-pat specialist would fly in for a fortnight to provide the benefit of his advice. The Scandinavian ex-pat treated my colleague as if he too were an Ethiopian illiterate who required assistance, when he was an ex-pat working for an NGO because of his own expertise.We must give serious consideration to channelling our aid through people who live in the countries concerned and not just through ex-pats.

I said on Second Reading that we should have an effective accounting mechanism to examine progress. I have no doubt that there is an accounting mechanism. DFID has been good at monitoring whether money is being wasted, so I am sure that that is well accounted for, but how do we determine whether the money is effectively spent? Some client countries of DFID have made nugatory progress over the years. They may be good reasons for that, but is it wise to pump money into countries where very little progress can be demonstrated when the same amount of money given to another country might achieve a great reduction in poverty? Those are difficult issues.

The Bill implies that money should not be ineffectively spent, but should be spent in places where poverty can be reduced. That raises questions, to which I am sure the Minister will refer when he responds, concerning the other pressures on development assistance. In addition to the poor, there is also the question of political and humanitarian pressures. Should one continue to pour money into, say, Nepal, where there is little evidence of serious success, or should one invest in a country for which the statistics are improving sharply, even though to do so would be difficult politically?

Good government is central to, among other things, the new sector-wide approach. As the International Development Committee Chairman powerfully argued, if we do not take care we shall swiftly return to the bad old days of giving money to Governments. Such a newcomer am I to this field that it was not until I visited the World Bank with the Select Committee that I understood the remarkable concept of fungibility, which I now feel as if I have known for my entire life. The idea is simple: if one provides a Government with money to buy, say, a brand new hospital, money is freed up to buy machine guns or fast cars for Cabinet Ministers. In other words, although UK taxpayers' money in theory buys a hospital, it can be argued that in practice it buys six Alfa Romeos.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

While my hon. Friend was temporarily absent from the Room, the hon. Member for Richmond Park said that the Government should not dictate the rating of good governance in countries to which we give aid. However, we must ensure that aid is directed in a manner of which we approve—indeed, that is surely the point of the Bill. We must therefore have some say not in the structure of government in a particular country, but in the way in which the money is spent through good governance. The case of Malawi, to which my hon. Friend alludes, is particularly pertinent, but it is replicated in a dozen different countries.

Photo of Mr Andrew Rowe Mr Andrew Rowe Ceidwadwyr, Faversham and Mid Kent

There is a balance to be struck. It is vital that we do not try to tell Governments how to run their affairs, but it is reasonable to tell them that British taxpayers expect transparency in the handling of their money.

Photo of Dr Jenny Tonge Dr Jenny Tonge Democratiaid Rhyddfrydol, Richmond Park

The trouble with singling out good governance—which I did not in fact mention—is that it implies that aid should not be distributed to a country that is not governed well. That is a very dangerous concept. In many cases, aid is for the alleviation of poverty, regardless of the Government in question.

Photo of Mr Andrew Rowe Mr Andrew Rowe Ceidwadwyr, Faversham and Mid Kent 12:15, 13 Mawrth 2001

That goes to the heart of the new sector-wide approach. Until now, the programme has by and large been project-based. When implementing such a programme, it is easy to believe that one is directly affecting the lives of those for whom the project was developed, that that is a good thing to do, and that it does not matter terribly what the Government in question are doing while one is providing, say, drinking water or irrigation for a particular cluster of villages. Indeed, that has proved a reassuring way in which to deliver aid. However, as I understand it, the new approach adopted by DFID and the Secretary of State is to say that that is all very well, but at the end of the day it only puts sticking plaster over the situation. They argue that we must engage the Government in the expenditure of our assistance so that their practice improves and they begin to see the leverage that our money can effect on their central programmes.

When that stage is reached there is the serious philosophical problem whether one can continue to deliver aid to a Government who are manifestly non-transparent, incompetent, corrupt and showing few signs of improvement. That is one paradox of moving to a sector-wide approach. During the next 20 years we shall find ourselves soldiering on with a project-based approach in countries where we shall be frightened of abandoning some of the poorest people on earth because their leaders are corrupt.

We must ensure that good governance is delivered from the bottom up and the top down—everybody believes and repeats that like a mantra, but it does not always happen. It is important to assist countries to improve their customs and excise services, to increase their capacity to collect taxes and to stamp out corruption. However, that takes a long time and is vulnerable to shifts in the political climate. In country after country, organisations such as Transparency International have demonstrated that the poor are the main victims of corruption and they want to get rid of it. When we discuss good government, we must ensure that we work with such organisations to strengthen the eradication of corruption at the commune level, which is the bottom level of society.

When I visited a village in Cambodia, I was distressed to find that many peasants had sold their land for ridiculous sums such as $200. A Chinese entrepreneur, who was wondering whether to build a factory, had bought the land. The peasants would have been better off if he had built a factory, but he showed no signs of doing any such thing. I discovered that the head man of the village had probably taken his cut. Good government starts at that level as well as at the top.

Photo of Tom Clarke Tom Clarke Llafur, Coatbridge and Chryston

Will the hon. Gentleman develop his thinking on transparency in light of his various visits? When, for example, I visited Uganda with the former leader of the Liberal party, David Steel, we found that the Government were working hard to balance their budget, but 50 per cent. of their revenue was spent servicing debt. They were dealing with the World Bank, which they did not consider to be as transparent as they would have liked. They had several questions about structural adjustment, but as they sought to make progress they felt that they were obtaining less transparency than they wanted from it. Its impositions on structural adjustment made their objectives on issues such as women's education and health more difficult to attain.

Photo of Mr Andrew Rowe Mr Andrew Rowe Ceidwadwyr, Faversham and Mid Kent

I have considerable sympathy with that point. Under Jim Wolfensohn the World Bank has taken great strides towards being more transparent, but it must go further. One benefit of the new World Trade Organisation is that, because it has so many members, it is potentially much more transparent than the Group of Eight, which used to take such decisions on behalf of the rest of the world. The big international organisations should be profoundly transparent. I have great sympathy with the view that Governments, especially if they have reached a level of sophistication whereby they can recognise an organisation's failings, should be listened to when that organisation is restructured. There is still a danger of rich countries taking the de haut en bas attitude that they are responsible for restructuring international organisations. That is not so. There should be an equal partnership between the recipients of the organisation's money and the people who put the money in.

It is tremendously important to remember that good governance cuts both ways. Why are we so backward in this country at controlling international crime? I know that the Government are taking the matter seriously, but we still have not seen the results of that. Money laundering has been in the newspapers again this week. Why is the UK apparently the only developed country that is capable of absorbing the Abacha millions and incapable of freezing the account? That is an important question for the Government to answer.

Democracy worldwide is being undermined by the cost of elections—a phenomenon that is as important in developed countries as it is in developing countries. The other day, I heard that it costs a minimum of $25 million to become an American senator. There is no doubt that that is highly corrupting. The extent of that corruption was well demonstrated during the banana war, when the evidence suggests that one of the driving forces in upsetting the quota arrangements that had protected the Caribbean producers was the large donations that the American banana companies gave to both the main political parties.

In this country, in Germany and in many other countries, the cost of elections is undermining democracy. Yesterday, when I met a group of Members of Parliament at a meeting of the Commonwealth Parliamentary Association, I explained to them that I had won a CPA fellowship to consider elements of the problem. With one accord, those people from all over the world said that it was an enormously important issue, and several told me that they would like to help. I had thought that I would have difficulty in persuading them to give me any information. Far from it—they were keen to do so. When we say things like, ``It's disgraceful for a Member of Parliament to receive money from a constituent'', they say, ``Get real: we're talking about our having to find election costs that no-one else will bear and none of us can afford—how are we ever going to pay for them? Somebody has to give us the money.''

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development)

Like my hon. Friend, I have been involved in some of the Commonwealth events that are taking place around Commonwealth day, which was yesterday. A huge Commonwealth seminar is taking place in London. On Saturday, in Colchester, I was asked by a parliamentarian from Africa, ``How do you deal with the problem of the constant demands on your purse?'' When I asked him what he meant, he said, ``People come to me and say that they need money to buy a house or for treatment for their sick child, and I have to give it to them because that is how I retain my position as an elected Member.'' The problem cuts both ways. Good governance encompasses major issues in terms of helping countries to move on from appalling situations.

Photo of Mr Andrew Rowe Mr Andrew Rowe Ceidwadwyr, Faversham and Mid Kent

I thank my hon. Friend. She is right. It is important that clause 1 should cover good governance because it is such a central issue. Corruption affects the poor more than the rich. In many countries, land distribution is dominated by a corrupt system. Whatever the rules may be, most countries have no land registration system; even in this country our system is not complete. In other countries, people are constantly made homeless by the rich who pay them a bribe and evict them from the land.

My colleagues on the Select Committee on International Development and I were shocked by evidence from some UK companies that suggested insouciance about paying ``hastening money'' if the climate of the country in which they were operating made that appear to be a sensible approach. I am glad to report that one witness turned on the others and said that he thought that that behaviour was ridiculous: his organisation believed that corruption was corruption. None the less, the situation is worrying. The idea that developed countries are somehow different from developing countries in that respect is nonsense. The rules in developed countries are often effective, but that does not mean that the behaviour of individuals is any better.

The reduction of conflict is essential to sustainable development. It is no coincidence that a high proportion of the poorest nations are either in conflict or emerging therefrom. It may be difficult, but we must give high priority to the rehabilitation of former members of armed forces through a comprehensive programme. It is no good paying off guerrillas or soldiers with a lump sum, thanking them for their services and telling them to go away if they have no job to go to nor land to farm and all they have is the rifle in their hand, because they will revert to terrorising their neighbours so that they can live.

We underestimate the enormously destabilising effect of using children in inappropriate roles—we all need to think hard about that. I was appalled when I visited the genocide museum in Cambodia and was told that it was Pol Pot's policy to use eight to 12-year-olds to torture of adults. The variety, ingenuity and sheer horror of the ways in which children tortured adults makes the work of Hieronymous Bosch look like a kindergarten illustration. It was awful and depressing. When I asked some Cambodians where those now 35-year-olds are today, I was told that they are in the villages. They have never had a chance to think about what they did or talk it through, except in the in the privacy of their own lives. Apparently, violence in the villages is very high, partly as a result of those damaged individuals returning to the countryside.

We have been told about children in Sierra Leone that 10-year-olds who had been cheerfully shooting people cannot now think of anything else to do. NGOs that work with handfuls of those children have stories to tell that would dismay anyone; I am sure that the same is true of the Army of God in Sudan. Within those damaged people lie the seeds of the next conflict. As an international community we need to think hard about how we deal with that appalling, large-scale problem. It will not be easy.

Does the Bill allow the Secretary of State to support mediation efforts by Governments or NGOs? There has been an interesting growth in mediation efforts and projects among NGOs. I have no idea whether those are good, bad or indifferent, but it must, prima facie, be a good thing to get people into a room to talk about their problems, conflicts and difficulties. I am sure that some NGOs are good at that, yet some tell me that it is extraordinarily difficult to obtain financial support for the work. I am somewhat sceptical of the colossal growth of the counselling industry in the UK, which I think might be slightly out of kilter, but to learn that people who give up a great deal of time, effort and resource in trying to broker a peace in Sudan—assuming that they are doing a good job—cannot obtain support for their next conference disturbs me. That is another issue that the amendment raises.

Private and foreign direct investment are important and should be included in the Bill. We should direct attention to not allowing foreign countries and firms to choke the growth of indigenous activity. There is disturbing evidence that if a local entrepreneur, either with the support of development assistance or by some other means, manages to form a successful company, some of the NGOs in the same field behave as they might towards a competitor in the developed world and do quite a lot to squeeze the enterprise out of business. That disgraceful phenomenon must be dealt with.

It is important to give as fair a wind as we can to the welcome growth in this and many other countries of fair trade initiatives. The ability of local producers, manufacturers or small-scale craftsmen to achieve a realistic price for what they make is indispensable to progress. With our well known propensity for buying food as cheaply as possible and allowing the real cost of that policy to be borne by the general taxation budget when we are struck by foot and mouth or some other affliction, we are only too ready—I am as guilty as anyone—to go round the supermarket and, if we spot a cheap jar of coffee, buy it, even though that deprives people whose coffee crop is their only means of sustaining a proper living.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby 12:30, 13 Mawrth 2001

It will not have escaped anyone's notice that my name is not appended to the amendments. I claim no ownership of them, but I think that they are good amendments which would improve the Bill.

The hon. Member for Richmond Park made an extraordinary speech. Instead of trying to improve the Bill she devoted her speech to attacking the Conservative party. If that is how she feels, perhaps she should be sitting on the other side of the Committee. My question is, where are the Liberal Democrat amendments?

Photo of Tom Clarke Tom Clarke Llafur, Coatbridge and Chryston

Will the hon. Gentleman answer a simple question? Does he believe that good governance and pluralism go together?

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

Of course they go together, although the circumstances of each country may vary from time to time. The hon. Member for Richmond Park mentioned Uganda, where there is currently no pluralism. In general, we agree that pluralism is important in politics, as it allows for differences. However, the purpose of the Committee is to examine the Bill, not to say ``Gosh, everything in it is marvellous,'' when it is a mere five and a half days since Second Reading and the Bill was printed only recently. The right hon. Member for Coatbridge and Chryston (Mr. Clarke) has a good record on international development. In his heart, he must be slightly embarrassed by the way in which this Bill has been rushed through and by the silence of his fellow Labour Members.

Photo of Dr Jenny Tonge Dr Jenny Tonge Democratiaid Rhyddfrydol, Richmond Park

Indeed, they were, and I apologise for that. However, it is extraordinary that the official Opposition should expect me always to agree with them, especially when they table amendments that do not add to the Bill. In fact, the amendments would detract from the Bill because they highlight matters that should not be given greater importance than others that cause poverty.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

First, the hon. Lady says that she has tabled amendments. However, they were too late, which reinforces my point that the Bill has progressed with unseemly haste. Secondly, she says that our amendments are not perfect, but no Conservative Member would pretend that they are. The purpose of a Committee is to determine how a Bill might be improved. I do not say that the official Opposition are always right; clearly they are not—but nor are the Government.

Mr. Tony McNulty (Harrow, East) indicated dissent.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

The Government Whip disagrees, but all Committee members, even those who were elected to Parliament at the last general election, are aware that legislation that is not examined closely and is passed in haste tends to be poor legislation. Surely, that is a reason for discussing the amendments.

May I pick up the hon. Member for Richmond Park on an extraordinary thing that she said about Argentina, or rather the Falkland Islands? I feel involved because I once spent four dull months sitting on the Falkland Islands contemplating the snow. To suggest that the last Conservative Government was responsible for the conflict in the south Atlantic is stretching credulity to astonishing lengths, not least because if one speaks to any honest Argentine, one will find that his countrymen greatly appreciate the fact that the British action in the south Atlantic led to the fall of the extremely corrupt and unpleasant dictatorship of President Galtieri. There is now, for good or ill, a democratic Government in Argentina. Indeed, the whole of southern and Latin America appreciates the fact that the British stood up to a dictatorship. Whether the islands should be called the Falklands or Las Malvinas is another matter. Our action reinforced freedom—

Photo of John Butterfill John Butterfill Ceidwadwyr, Bournemouth West

Order. The hon. Gentleman is beginning to stray.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

My apologies, Mr. Butterfill. I care deeply about the issue, not least because one of my friends was killed out there, but I shall now address the amendments in detail.

In the debate of 6 March, the Secretary of State said:

``The flexibility of our current arrangements makes the United Kingdom one of the most effective development organisations in the world.'' —[Official Report, 6 March 2001; Vol. 364, c. 167.]

I agree with her on that, as on many other issues. Her comment begs the question, if flexibility is so effective, why do we need the Bill? However, I shall not stray on to that because we are discussing amendments, and it is flexibility that the amendments are designed to create. I am sure that the Minister will say that the amendments will make the Bill less flexible rather than more so, but it is important to understand that we must not hamstring the Government or the next Conservative Government. It has been said that the Bill is designed to bind the next Administration, whomsoever they may be, but no Parliament may bind its successors, and there may be further legislation.

My first point, which was also made on Second Reading, relates to judicial review. It is not a simple point. The Secretary of State said that she had had advice that there would be no judicial review, but, regrettably, during the past 15 or 20 years, judicial review has really taken off and the Government are perpetually being judicially reviewed—the previous Government and the current ones have both been subjected to that process. That is a serious matter, but the amendments may give the Government greater flexibility. The words ``directly or indirectly'' which amendment No. 1 would add would allow the Government broader scope.

My second point relates to good governance, which has been discussed at some length. It is ridiculous to suggest that good governance should not be a priority; it must be at the heart of development and of a sector-wide approach, as my hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe) said. I cannot quote the Secretary of State's words on that subject, but I am almost sure that in evidence to the Select Committee she said that good governance is at the heart of good development.

Photo of Dr Jenny Tonge Dr Jenny Tonge Democratiaid Rhyddfrydol, Richmond Park

As a member of the Select Committee on International Development, can the hon. Gentleman honestly say that good governance is more important than education? Are they not of equal importance?

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

My answer is no. To develop that answer slightly, without good governance, the chances of getting good education diminish.

Photo of Dr Jenny Tonge Dr Jenny Tonge Democratiaid Rhyddfrydol, Richmond Park

I have to take the point a little further. If we do not have education, we have neither people who are equipped to govern, nor people who are capable of sensibly choosing others to govern them.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

As I was trying to explain, the Select Committee is just completing an inquiry into the question of corruption—good governance and corruption are one and the same, to a large extent. We heard evidence on Nigeria, for example. Nigeria, God wot, is a rich country with tremendous resources of oil and the like, but development in Nigeria has gone down the plughole during the past 15 years or thereabouts—I cannot quite remember in which year Abacha came to power—because all the resources of the country, far from being devoted to good education, health, or other worthy ends, went straight into the pockets of the military and Abacha. That is why good governance is so central to good educational and health policy.

When discussing governance, many people have told us that it is the poor who suffer most from corruption: they suffer when they cannot get their child into school, or when they have to buy a place in hospital that should be free; they are the ones who fall into debt, with all the ghastly implications that that has for their families. That is why the Government place such store on public sector reform—a point that the Secretary of State developed at great length when she came before the Select Committee during our inquiry into corruption and gave us some most reassuring evidence. I have to say that I do not have much problem with the Government's international development policy—the Minister and his Parliamentary Private Secretary know that, because we have discussed it.

Public sector reform means that policemen get paid enough, so that they do not put up a road block and fine every poor peasant who goes down the road to market to try to make some money a sum equal to the entire profit that he would have made during the day. That is fundamental and it ties in with security reform, which the Secretary of State mentioned. Security sector reform encompasses police and army and addresses the problem of too many guns on the streets, which my hon. Friend the Member for Chesham and Amersham mentioned.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development) 12:45, 13 Mawrth 2001

My hon. Friend makes an important point. I remember immediately after the wall came down that western executives in Moscow who were working to bring new companies into Russia would regularly have their cars stopped by the police. Initially one would have to have 10 roubles ready, and later 100 roubles. The problem escalated to the point where two police cars would move up behind any car that carried foreign number plates. Such practices cause great concern to right hon. and hon. Members on both sides of the Committee.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

It is neither here nor there in terms of my long-term life plan if someone comes up to me and suggests that I might like to give him $10, but to someone who earns $20 a month, that suggestion represents half the household's food going down the plughole. The point is that it is the poor who suffer from poor governance.

During its investigations, the International Development Committee met various business people. The Secretary of State spoke on Wednesday, at column 166, of the need to expand economies and attract inward investment. The Select Committee has been told by large companies—some of which, I regret to say, pay so-called facilitating payments, which are small bribes—that the biggest disincentive to inward investment in a developing country is poor rule of law, which is the same as bad governance, because it means paying bribes to get anywhere. Companies do not like paying bribes. Theirs is not merely a moral objection; it is also that the bribes come out of their balance sheets.

I want good governance to be referred to in the Bill because it is at the heart of good development. We hear that message time and again. An organisation called CIET—which seems to change its name depending on where it is operating; some Select Committee colleagues may be able to remind me of its title—is an NGO that asks for the opinion of local people. Instead of asking a country's Government or its so-called opinion formers what they think about an issue, it asks people in villages or the users of services what they think. It is similar to a focus group, which will strike more of a chord with people in this place—a focus group for developing countries, where there are not so many of them. Time and again, CIET finds that when asked what most worries them, local people reply that it is having to pay for services that should be provided free.

Photo of Mr Andrew Rowe Mr Andrew Rowe Ceidwadwyr, Faversham and Mid Kent

There is an interesting comment to be made on the obverse. When in Vietnam, we asked about the biggest difference that clean irrigation water had made to a village. The unexpected response was that people paid their water dues, which they had not done before. That shows another aspect of good governance: once the way in which things work is transparent and people see a clear benefit, they do not mind paying.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

I am grateful to my hon. Friend for pointing that out, because it reminds me of what we have seen around the world. The hon. Member for Richmond Park did not come with the Select Committee to Pakistan. While we were there, the electricity system did not work, because no one pays electricity bills. It is cheaper to bribe the electricity company's man so as not to have to pay the bill, than to pay it.

As for grand larceny or grand corruption, I take issue with some of what has been said. Of course it is not for us to dictate a country's Government, or method or structures of government, provided that the people there have the freedom to choose those things. However, if a country wants its development to be supported by us, it is up to us to ensure that that development is transparent, honest and to the good of the poor.

Photo of Dr Jenny Tonge Dr Jenny Tonge Democratiaid Rhyddfrydol, Richmond Park

In speaking about corruption, the hon. Gentleman puts tremendous emphasis on good governance. That is extremely important, but other factors are equally important. Does he believe that we and the international community could take action to prevent corruption? It is not necessarily a matter of the bad governance of the countries concerned, but of our banks' money-laundering and bribery, with laws not being enforced and so on.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

The hon. Lady and I have agreed about so many things in the past so I am glad to say that I agree with her now about money laundering and the behaviour of the banks, to which my hon. Friend the Member for Faversham and Mid-Kent also referred. Homing in on grand corruption—perhaps a corrupt Government taking money from the inward investment made by an oil company—I recall a meeting that the Select Committee had in 1998, which my hon. Friend and I attended, with the Finance Minister of Kenya. That country has serious problems regarding good governance, if I can put it that way.

Photo of Mr Andrew Rowe Mr Andrew Rowe Ceidwadwyr, Faversham and Mid Kent

That is a very reasonable way to put it.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

I thought so. The Finance Minister was outspoken, not being an ally of the President. I cannot remember his name, but as he has probably been dismissed, he probably will not mind me quoting him. We were breakfasting with him—in fact, we did not have breakfast, but it was breakfast time. The Finance Minister—Kenya's equivalent to our Chancellor—said, ``Don't give us more money. Ask us what we have done with the money that you have already given us.'' He was an honest and decent politician.

Photo of Dr Jenny Tonge Dr Jenny Tonge Democratiaid Rhyddfrydol, Richmond Park

The hon. Gentleman must agree that the problems were as much the fault of the International Monetary Fund as of the Kenyan Government.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

No, I do not agree that the misspending or pocketing of the money that had been given to that Government was the fault of an international organisation. I accept that the controls might have been lax, but someone was putting the money in his pocket and we should all deprecate that. The cold war provided encouragement to poor governance because both sides in the cold war supported regimes that we would not support now for reasons of geopolitics or realpolitik. I shall not continue in that vein, however; we have been rather distracted by interventions.

Amendment No. 3 deals with conflict, another issue on which the Select Committee has published a report. If one were to name a country of grinding poverty, one would almost be able to point to a war, because where there is conflict, there is grinding poverty. When money is spent on arms, people are killed or dispersed. It has happened in southern Sudan, in which the hon. Member for Richmond Park takes an interest; it has happened in the Congo, in which the hon. Member for Bethnal Green and Bow takes an interest; it has happened in Burundi, Rwanda, Uganda and many other places, including Cambodia, which the Select Committee has just visited. Conflict causes enormous problems and grinding poverty follows in its wake. Conflict creates orphans and disabled people; it destroys infrastructure, which leads to an absence of economic growth. We must concentrate on conflict, and I look forward to the Minister's response on whether it should be included in the Bill. I am not the author of the amendments, but it is a fundamental point.

I am a member of the HALO Trust, not because I get paid, but because it is an interest of mine. The Department for International Development, and the Overseas Development Agency before it, have been immensely helpful to the trust in its work of landmine clearance. The landmines that remain have a fundamental effect on the poor people who have to live with them—those who have lost their legs, or the family breadwinners who cannot till their land because they do not want their legs blown off. Conflict has caused that problem, which is why I want the Minister to say what the Bill can do, if anything, to tackle conflict. The Government have an honourable record on the matter and I want to see it continue.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development)

Is it not also important that the Minister reassures us that nothing in the Bill will prevent the Secretary of State or her successor from continuing with programmes that are a vital part of our aid but do not fall directly within the definition of efforts to reduce poverty? That is why we have tabled the amendments, which I hope are helpful: they might protect the Secretary of State from challenges to her authority to continue expenditure on those vital programmes.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

I am grateful to my hon. Friend. That is exactly what I was about to say. Does one define the clearance of anti-personnel mines as poverty reduction? It is difficult to say that one can in the baldest terms, although it is possible in the broadest terms. I do not think that anyone is especially likely to make the Government subject to judicial review on that issue, but it could happen. The strangest things happen, as we have seen in the courts recently and in the more distant past. I want a Bill that prevents restrictions being placed on the good work of the Department for International Development.

Photo of Ian Davidson Ian Davidson Labour/Co-operative, Glasgow Pollok

Speaking of the reduction of conflict and the potential for conflict, does the hon. Gentleman accept that the amendment, if accepted, could easily be used to justify arms sales? It could be argued that the potential for conflict is often owed to an imbalance in armaments between two sides. To help the side that was less well armed would reduce the potential for conflict, which could result in an escalating arms race. Some countries with which we co-operate, including those in the European Union, are less scrupulous than we are about arms sales to the third world. They could use the provision to justify their actions and argue that some of our money should be used for that purpose as well.

Photo of Andrew Robathan Andrew Robathan Ceidwadwyr, Blaby

I do not accept that point, although it is serious and needs to be hoist aboard. I do not think that the amendment is perfect, but it raises an important issue. I generally applaud the decision to untie aid from trade, but some of our European partners are less scrupulous than us in that respect. The arms for Iraq scandal sprung up because a company was shipping out the supergun; it was not meant to be done with the then Government's connivance—the whole incident was extremely confused and came to nothing in the end. I agree in part with the hon. Gentleman, as it is important that we do not supply arms in a bid to reduce conflict. I do not think that we can reduce it by doing so, although there is sometimes a good diplomatic reason to assist one side in a struggle, as two sides are not always equal.

In connection with amendment No. 4, I shall again quote the Secretary of State. She said:

``When we say that poverty reduction is our main objective, it should be borne in mind that that means helping countries to create modern and efficient states that will enable their economies to grow and ensure that good-quality services can be provided to all their people.''—[Official Report, 6 March 2001; Vol. 364, c. 162.]

The right hon. Lady also spoke of the need for inward investment. I am not sure that provisions in that respect should be in the Bill, but she mentioned the fact that overseas development aid can do only so much. Economic growth will do more for the poor and ODA can help. If we want it to do so, we should say so more explicitly—

It being One o'clock, THE CHAIRMAN adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Four o'clock.