I am glad to be able to introduce this important debate, because in the face of difficult economic times, a hitherto united front in favour of the Government’s international development programmes is perhaps beginning to crack—not, I hasten to add, in Parliament, but among the public at large. As all politicians look towards cutting the vast budget deficit that we have run up in the past couple of years, some of our constituents—I suspect that this applies as much to Harrow, West as it does to the Cities of London and Westminster—are beginning to ask why we are reducing significantly assistance to British citizens when we continue to channel taxpayers’ money into international development.

I have received several letters from constituents asking why this country continues to provide aid to countries such as South Africa—£78.5 million last year—to India, which received more than £400 million last year and to China, which received £118 million, particularly when the latter two nations are running huge budget surpluses. This is an apposite time to have the debate, because it is appropriate in these times that British taxpayers demand full value from our international development budget.

This is a very important debate. Like the hon. Gentleman’s constituents, my constituents question why we give aid to India when it is buying up British companies such as Jaguar and British Steel or Corus. Does he now suggest that the policy should be that we withdraw from giving aid to India?

On the contrary. I hope that my speech will make this clear. I think that it is all the more important that the case for international development and, more specifically, for microfinance is strongly made, in the light of what I suspect is becoming a more conventional view among many of our constituents across the country. People are entitled to question whether Britain should continue to have the same duties to the developing world now that our own economy is under pressure, and whether, in a new global landscape, developing nations’ regional partners should perhaps bear slightly more of the brunt.

Politicians from these shores should not shy away from that emerging debate. For that reason, I am particularly delighted that my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell), who has spoken so effectively for my party in the shadow Cabinet on these issues during the past four years, is here personally to reply to this debate. That is the clearest possible indication of the Conservatives’ commitment in this area.

If we are to make the case that international development remains vital to our national interests, we need to show that Department for International Development money is being channelled to effective projects and that our people overseas work vigorously to reduce the flaws in existing programmes, rather than hiding behind a shield of good will that has until now shamed people into not asking tough questions. Aside from that, the Department might also consider the expertise that it could bring to poverty reduction in this country, where people living in poor communities might benefit from some of the techniques used to help those in the developing world.

A good place to start much of that debate is in the field of microfinance. Despite the debilitating effects of the financial crisis on the developed world, I believe that broadly, the growth of financial institutions has done more than anything to spread wealth across the globe. The most pronounced poverty continues to be in the communities that are most excluded—indeed, excluded entirely—from the financial system. Microfinance can help poor people to protect themselves from risk, to escape debt and to live sustainably by creating small enterprises. It is not and cannot be a cure-all. It has not even proved sustainable or effective in all the communities in which it has been used. However, as a development technique that encourages responsibility and independence, microfinance is a form of assistance that is more likely to garner the support of the British taxpayer, especially, as I said, if it is put to work in some of the UK’s own poorest communities.

Many commercial activities in the developing world are not monetised, with trade conducted through means of exchange such as livestock. Banks are rarely tempted to change that. There is always a break-even point in providing loans or deposits, below which banks will lose money on every transaction. With poor people depositing or borrowing only small amounts, banking operations in such areas can quickly become commercially unviable. The poorest people also tend to have the fewest assets that can be secured by a bank as collateral in the event of default. That can leave the poorest ill prepared for life’s day-to-day risks. Paying for education, weddings, childbirth, health care and the impact of natural disasters—as we have seen particularly in the past two or three weeks with the terrible events in Haiti—can be an unbearable struggle, particularly in countries where there is no established welfare system. When forced to borrow, the poorest are often left to rely on family members or local moneylenders with extortionate interest rates. In those circumstances, microfinance can play a crucial role in preventing the development of a downward spiral.

Although the idea of small-scale credit as a means of poverty alleviation is a relatively old concept, it was properly developed by a Bangladeshi economist, Muhammad Yunus, in the 1970s after he discovered that very small loans to poor women in the village of Jobra could make a disproportionate difference to their lives. Yunus found that, given the chance, the poor tended to repay borrowed money, often by establishing micro-enterprises. By 1983, a pilot for a fully fledged microcredit bank was established and, in October 2007, the Grameen bank could claim to have distributed $6.5 billion in loans, boasting a loan recovery rate of 98 per cent.

The microcredit movement has tended to loan mainly to women, who are thought to be more likely to use the money to benefit their families. Since the concept’s expansion in Bangladesh, microfinance has been used as a tool to reduce poverty in developing countries worldwide, often to great effect. Let us go to another continent. After years of struggling to support seven children by working as a seamstress, Jennifer from Uganda took out a small loan in 1997 to buy her own sewing machine. That enabled her to expand her sewing business, which in turn led her to diversify into other areas—first, opening a motorcycle taxi business and later purchasing land to build rental properties. Today, she employs 57 people and has taken on the care of five AIDS orphans. Meanwhile, her natural leadership skills led to her election to the town council.

I first became interested in the idea of microfinance—as is often the way for Members of Parliament—when a constituent approached me about the concept as long ago as 2003, spurring me to write a paper on free trade and aid that made the case for distinguishing free trade from fair trade. I wrote at the time:

“The way forward should be the way of free and fair trade where the word ‘free’ (or perhaps I should say ‘open’) is as important as ‘fair’. There is a strong ethical case for supporting trade in preference to aid in promoting development in poorer countries because it makes each nation sustainable. However, I believe that where aid is the right solution, we should support direct, locally distributed aid, such as micro-finance, that preserves incentives for the citizens of those countries to achieve self-sufficiency.”

More than six years later, microfinance has returned to my consciousness by virtue particularly of the efforts of two constituents involved in the field: Louise Holly, who works for RESULTS UK, and Rev. George Bush of St. Mary-le-Bow in the City of London. RESULTS was started more than 25 years ago in the United States to empower and encourage ordinary citizens to create the political will for change in international development. Today, there are RESULTS organisations in seven countries, with the UK branch co-ordinating groups across the country from a little national office just off Regent street in my constituency.

Rev. George Bush, whose politics, I should add, are about as far removed as possible from those of his slightly more famous namesake, is involved in the establishment of a microfinance fund in the City called Arcubus. The fund aims to raise £1 million by issuing a five-year social investment bond with a zero interest coupon that will return donors’ money while channelling the interest from the collective pot into four microfinance non-governmental organisations. They will consider providing formal banking services and micro-loans to those unable to access mainstream bank loans; expand and enhance existing microfinance operations by improving efficiency and sustainability; and arrange short-term placements for City professionals at microfinance institutions in Africa.

At his ministry at St. Mary-le-Bow on Cheapside, Reverend Bush is putting in place a phenomenally important way to help people who might not otherwise understand the connections between microfinance and finance in the City of London, and the initiative provides a tremendous opportunity to open the eyes of opinion formers. Ideally, projects under the Arcubus initiative will eventually create a mixed portfolio of complementary microfinance initiatives that British individuals, companies and Churches can support.

Only three weeks ago, I returned to the home of modern microfinance, Bangladesh, to lead a delegation in my role as the vice-chairman of the all-party group on Bangladesh. We visited Dhaka, the capital, and Sylhet, from which many Bangladeshi Britons hail. One of our stops was the national football academy, which is sponsored by Canary Wharf and none other than the Grameen bank—a mark, again, of the expansion of Muhammad Yunus’s vision.

I also met our high commissioner in his residency. Having spoken to him, I am concerned that we are trying, perhaps perversely, to do too much with the £150 million annual development budget that DFID spends in Bangladesh, and if the Minister will hear me out, I will try to explain what I mean.

We currently invest in 40 different schemes in Bangladesh, but given the obvious constraints on manpower in DFID’s organisation there, it is difficult to see how we can properly supervise all those schemes. We should perhaps look to spend our DFID money in a slightly more concentrated, accountable way on fewer, higher-profile projects. I accept that political issues, and particularly regional issues, in Bangladesh perhaps make it easy for us to spread ourselves a little too thinly, but if we are to get as much of a bang for our buck as we can and derive a benefit from the taxpayers’ money that we spend, we must try to do a little less through smaller and, in some cases, longer-term schemes that we can see through to the end—currently, schemes tend to last for about three years. Despite the guarantee of a large pot of £150 million a year, there is a worry that we are not making as much of our money as we should be, and I hope the Minister will consider that.

As a way of maintaining public support for the Government’s microfinance initiatives abroad, we could adhere to the adage that charity begins at home and show that tools such as microfinance can help British people who are unbanked.

Is the hon. Gentleman aware of organisations such as Street Cred, which works with the Bangladeshi population in the east end?

It is very rare for me, as a Conservative MP, to be accused of anything to do with street cred, but the organisation that the hon. Lady mentions has just recently come on to my horizon. Obviously, I know of the tremendous amount of work that the hon. Lady does on this issue, and I hope she will understand when I say that we need to link microfinance to what we do in this country so that it is regarded as being not only of relevance overseas, but of great relevance—particularly, but not exclusively—in inner-city communities in this country.

Thanks in part to our welfare system, very few people, in truth, live in absolute poverty in this country. When it comes to accessing finance, however, the problem is different. It is estimated that almost 8 million people are unable to access mainstream credit and often find themselves turning to informal moneylenders, who can frequently charge exorbitant rates of interest. Three million people do not have a bank account. Our average household debt, excluding mortgage payments, stands at £9,500, and Citizens Advice has been dealing with 7,200 new debt problems every working day. Although we have more material wealth than ever before, poverty has become more concentrated and inequality has become more marked, with some communities heavily dependent on charitable giving and public money, whether in the form of welfare benefits or grants. People in such communities are also more likely to be preyed on by doorstep lenders owing to financial illiteracy, poor credit ratings, a sense of exclusion from mainstream financial lending, past family experience and confusion over the financial products available.

I do not want to sound hysterical, but a headline that appeared only yesterday—it was quite shocking for me as a London MP—said that 19 per cent. of London’s children are being brought up in severe poverty, which is a great worry. We see that poverty even in my constituency, cheek by jowl with a lot of wealth. As I say, it is wrong to be hysterical, but we need to recognise that there are quite significant problems in this country, which are partly down to the fact that too many people are unable to access more mainstream finance. Introducing microfinance initiatives into such communities will help to challenge the perception of risk that attaches to the poor’s ability to repay loans, and it will help to support entrepreneurs who are considered unbankable.

Community development finance institutions are a fast-growing sector and provide finance and support to new and growing businesses in disadvantaged communities, which in turn creates jobs and services where they are most needed. I was contacted only last week by a constituent, Richard Matthews, who is looking to establish a credit union in the Covent Garden and Leicester Square districts of my constituency, something that is proving particularly popular with the Chinese community there.

CDFIs, which combine elements of the private and charitable sectors, promote a culture of self-help and combat poverty and social exclusion from the bottom up. Although they are not conventional sources of finance, they provide finance to viable enterprises and seek financial and social returns on their investments. In 2007-08, the last year for which we have reliable figures, CDFI lending totalled £76 million, levering £35 million of additional finance into unserved markets such as black and minority ethnic businesses, women’s businesses and small start-up businesses.

In London, a new drive to assist people through microfinance projects is being spurred by Fair Finance, an organisation that offers loans and advice to those who have been excluded from accessing mainstream services. Launched in 2005, Fair Finance has grown incredibly rapidly, expanding from its original base on a council estate in Stepney, just four miles east of here, to cover half of London. It has helped hundreds of excluded women to create businesses and it has saved many hundreds more from eviction. Its managing director, Faisel Rahman, has a background in international development and experience at Grameen bank and the World Bank, where he focused on the development of microfinance.

A client who borrows from Fair Finance tends to save £20 to £100 per month in reduced interest payments alone, compared with what they would pay to doorstep lenders, who have been known to charge interest rates of up to 4,000 per cent. annual percentage rate. By opening bank accounts and establishing credit histories for its clients, Fair Finance helps them to access cheaper products and services, helping them, for example, to pay utility bills by direct debit and to obtain longer-term contracts for mobile phones. Importantly, it also advises clients on managing their finances, which will, one hopes, introduce the habit of saving.

Unfortunately, Mr. Rahman believes that the biggest barrier to micro-entrepreneurs who take Fair Finance loans is the structure of the benefits system, which makes it unlikely that someone starting a business will be able to make enough money to cover council tax, rent and living costs, and there is obviously an issue with housing benefit, which is a particular problem in the capital. Micro-entrepreneurs also have to fill out a self-certification form every time their income changes, potentially leading to a damaging reassessment of their benefits. Such difficult short-term prospects may have an impact on whether they wish to remain part of the initiative. Obviously, there are other pitfalls in the application of microfinance here and abroad. Unfortunately, we have to accept that microfinance is not a panacea. As with all other development interventions, it is important that we constantly ask questions about its effectiveness.

Access to financial services has undoubtedly permanently improved the lot of some poor people, but is it unclear whether microfinance reduces poverty on average. There are few studies of its effectiveness, and it has been difficult to use a correlation to prove a causation. For instance, if affluence and microcredit go hand in hand, does that mean that the better-off borrow more or that borrowing makes people better off? That is a potentially circular argument.

Microfinance does not work as well in every country and it has great difficulties in large parts of Africa, for instance, where a lack of basic resources, a dearth of customers and difficulties with health make it particularly hard to be entrepreneurial. A disparate population can also make microfinance unsustainable owing to high operational costs, and loan books concentrated in a specific geographical area can be vulnerable to natural disasters or downturns in the local economy. Some women have also reported that their money has been stolen by their husbands or others, or that it has been lost to the demands of corrupt officials or village elders. For many, microfinance alone cannot be an alternative to direct aid, and I am not suggesting for one minute that it should be.

Critics of microfinance also point to high interest rates charged by lenders, but equally, interest rate caps can harm the poor, as they prevent institutions from covering their costs, often choking off supply. Furthermore, few institutions are held accountable for their performance, which leads to significant inefficiencies and market distortions. At worst, borrowers have on occasion effectively become wage labourers for a local microfinance bank. In places where microfinance is in operation, traditional moneylenders are often found to flourish too. Such lenders offer quick loan disbursement, confidentiality and flexibility. By contrast, the poor do not always find the lower rates of interest from microfinance institutions to be an adequate compensation for the time it takes to attend meetings and training courses, and the financial cost of monthly contributions.

Such criticisms tend to be valid, in my view, only when microfinance is considered in isolation. Its proponents have never claimed that it is a cure-all, and it should be kept in mind that microcredit and training are designed to offer a hand up rather than a long-term handout. It is also about more than just loans. The most successful microfinance institutions are increasingly providing access to other financial tools such as savings, insurance, training and financial education, as an economy becomes more sophisticated. As I have said, I would continue to promote free trade as the best tool to alleviate poverty, but in its absence microfinance can play an integral role in a comprehensive economic development process by generating local economic activity and stimulating demand for goods and services.

Microfinance has dispelled the notion that those on the lowest rungs of the income ladder are worthy only of aid, not the assistance of financial services. It has also helped to shoot down the idea that the poor are not able to follow basic rules of commerce. In much of Asia and Africa, the rural poor have proved that they can be entrepreneurial, and can launch a business and earn money. Even if the loans fail, the amounts of money involved are so small that that form of support for poverty alleviation may still be more effective than traditional aid. Donors should now focus on capacity building, particularly when it comes to obtaining strong managers to run microfinance institutions. We should also cast aside prejudice about traditional moneylenders, although we should not of course support lenders who charge extortionate rates. The poor have diverse needs and therefore need a range of lenders that can operate in any market: traditional banks, microfinance institutions, credit unions and even some doorstep lenders.

At a time when Government budgets are under strict scrutiny as never before, it will become even more important for each Department to articulate the benefits of its work. That is one reason why I wanted today’s debate. If global development budgets are to be ring-fenced, the Department for International Development must prepare to explain its work in terms that demonstrate value to the taxpayer and tangible results for the poor communities being served. In microfinance, DFID has a form of aid that has more chance than most of becoming self-sustaining and long lasting, and which will echo the themes of responsibility and independence that will become ever more important as our own nation negotiates the tough times ahead. Microfinance is insufficient alone to eradicate poverty and is second best to free trade, but if it is implemented alongside complementary policies, there is every opportunity for it to promote long-term growth in the poor communities that it serves. That applies equally to the slums of Nairobi, to rural Sylhet in Bangladesh, or to a council estate in Stepney.

I congratulate the hon. Member for Cities of London and Westminster (Mr. Field) on securing the debate. It is some time since we had an informed debate on microfinance, so I am delighted that we have the opportunity today. I apologise to all hon. Members who are present, because I must be at the first sitting of a Bill Committee and must leave early.

It is important, as the hon. Gentleman outlined, to consider the full range of what microfinance involves. We think about it as the provision of financial services to those who are traditionally excluded, but it is important to remember that it goes far further than providing small loans to set up a business. It is important for access to savings accounts and insurance, in particular. As the hon. Gentleman said, it is important to think about microcredit in this country, as well as its role as an international development tool. Clearly it has great scope, particularly in marginalised communities such as the one that I mentioned in an intervention. I am sure that especially in the current economic climate we want to do as much as we can to support our local credit unions.

Much of my work on microcredit has involved observing overseas projects. There is a self-help aspect to it—it is bottom-up. It is not about someone coming along and telling people how to do things, but involves employing local people in local organisations. It is about development at a rate that is compatible with local cultures and what the people choose to do with their lives. I agree that evaluation throughout is important and it can never be said that every project is a huge success; but we need to consider all the different dimensions. I want briefly to touch on some personal experiences, to bring out some general points.

Several years ago I was very impressed by the work that I saw in Kibera in Nairobi. It was amazing to people who visited it. People were lifting themselves out of extreme poverty and terrible living conditions. The fragility of that, however, was shown after the elections in Kenya, when there were riots in Kibera. There were many people with debts, whose businesses were smashed. We can never stand back, thinking that there is the power to make things sustainable in such extreme conditions.

I visited a project in Malawi with Opportunity International. The Opportunity International banks in Malawi are primarily savings institutions. They have a savings to loan ratio almost the opposite of ours, and many of us might feel more comfortable with that. The provision of that savings facility is all-important. The bank provides a smartcard, with an identifier using fingerprints to access money from machines and deposit it in mobile vans in the villages. The strength of the arrangement is that the people involved, who are primarily women, can get their money safely into the bank as soon as possible. That is crucial to enable them to move forward and protect their money to use on the things they want it for. That is an interesting savings model. Loans are made, but the model is primarily about savings.

I was fortunate enough to visit some projects that came from both the Grameen bank and BRAC in Bangladesh where another aspect of microfinance was demonstrated. We went to a village and heard how a group of women had used their money. The loans were predominantly to buy goats and animals. It could be argued that the basic loans had not led to any further growth, beyond survival and life being made a little more comfortable. However, one of the women introduced us to her son who had just completed his master’s degree. That was one of the add-ons that are such an important aspect of microfinance. Because of the predominance of women in using it, there is a tendency for it to be used to promote the family’s future. It is difficult to measure that as an impact of microfinance, but it seems to me to be one of the most sustainable aspects of it. It tends very much towards the improvement of educational opportunities for the next generation, and beyond. There are so many wonderful stories about that.

I now touch on a more recent experience.

The hon. Lady reminds me of a lasting thought about my trip to Bangladesh at the beginning of January. I noted a sense of positivity among middle-aged Bangladeshis, as the prospects for their children and grandchildren were going to be markedly better than theirs had been. The hon. Lady rightly says that elements of microfinance and of a growing economy are central to the Bangladeshis’ sense of optimism for the future of their country.

I thank the hon. Gentleman for that intervention. That is why we must always look at the bigger picture when it comes to the impact of microfinance.

I now refer to a totally different situation. I have visited Chennai, an area affected by the 2004 tsunami, to see some microfinance projects there. Rebuilding was not complete, but it was well under way. That was of great interest, as it showed the enormous importance of microfinance as part of what I would call a regeneration project. What I witnessed there was a good example of the empowerment of women through microfinance.

In the area that I visited, the male occupation was predominantly fishing. However, there were problems with alcoholism and domestic violence. The women in the microfinance group explained that when they identified someone, or if somebody came to them to say that they were experiencing domestic violence, the women as a group would challenge the perpetrator. That was an amazing example of the empowerment of females.

In that brief run around the world, I have tried to illustrate how microfinance can make a contribution to a large number of the millennium development goals.

I am grateful to the hon. Lady for giving way. Almost single-handedly, she has led on this issue for many years, and I congratulate her on her work.

The hon. Lady says that she has run around the world, but she has not touched on Afghanistan. She may be aware that 65 per cent. of the £4 million loans given for microfinance use over the past five years in Afghanistan went to women, to empower them. Does she think that that was a more effective use of our taxpayers’ money than the £4 billion spent over that time on the war?

I shall not be drawn into that. The important point is that although microfinance is never the only tool it makes an important contribution. I am aware of the microfinance projects in Afghanistan. Indeed, I have spoken to the Bangladesh rural advancement committee—BRAC. Straying slightly, it is staggering that such a country should have produced two enormous NGOs. BRAC, in particular, has reached out worldwide. I am sure that other organisations are operating there, but I am well aware of the work that they are doing. As for the social issues in Afghanistan, most of us believe that it is not only the fighting that needs to be tackled but the social structures, and microfinance does indeed have a role.

I have touched indirectly on the millennium development goals, which include alleviating extreme poverty and everyone having access to primary education. On the latter, where microfinance is operating, it is going much further up the scale than primary education. For example, the Grameen bank is giving support for children to go to secondary school, and members of the bank are able to access loans to send their children to university. It is absolutely incredible. As for the health goal, most of the projects that I have seen involve a lot of health education; they are running with support—and obviously the empowerment of women.

We often say that microfinance is targeted particularly at women. Of course, there are men who benefit, and I do not wish to exclude them, but the fact is that 83 per cent. or more of clients are women. If there is something that women can do, they can quickly get direct benefits.

As I said, evaluation and capacity building is all important. I have seen many projects that I thought would provide no further movement up the scale for the individual. However, as in the examples given by the hon. Member for Cities of London and Westminster, I have also seen projects that are at the point of employing 40 or 60 people. The range is extreme. Then, of course, some clients move on to owning umpteen businesses and become very entrepreneurial.

We have to appreciate that there is a big range, but for those whose businesses are not going to expand greatly we should look at the wider education and health benefits when evaluating projects. Of course, we must ensure that funds are used as efficiently as possible, and learn from good examples. It is interesting to note how similar projects can be in different continents, but we must reflect on the differences. That, however, is a separate question.

I was pleased to see that the multi-donor facility for Africa has been set up. I keep asking about it because it is important that we consider the social impact; we need a strong set of social goals and a robust project design. The fund must build in safeguards and systems to promote appropriate micro-models within the structure of the fund. That is important, and the all-party group on microfinance is most interested in pursuing the future of the fund there. That is particularly appropriate for Africa; although there are some amazing examples of microfinance, we are not breaking in percentage-wise given the overall situation there.

Finally—this was meant to be a brief contribution—the all-party group is taking a particular interest in the wider issue of micro-insurance. We have always been keen on insuring for weddings, funerals and other events, but we need to consider micro-insurance on the larger scale, as part of our adaptation to climate change. It is a really important future agenda. We have raised questions with the Minister before, but it would be interesting to have an update on his view of DFID’s position on the matter. Clearly, we cannot predict natural disasters, nor where or when climate change will have an impact. Having an international fund that ties in with micro-insurance would be of enormous benefit.

A lot of work needs to be done. When in Africa, I heard that as many weather stations as possible are needed in order to track what is happening to the climate there. Proof will be needed in order claim against the fund. The country is working with farmers to plot variations in climate—and looking to farmers to plan their payments. Farmers in Africa often sell their produce in advance at a low price. That is obviously devastating for them, as they never escape from the trap, but by using the financial system they could even out their incomes and outgoings in a rational way.

A lot of groundwork is needed, particularly with agriculture, working with farmers not only in Africa but globally. Supporting micro-insurance in countries that may be particularly affected by climate change is really important.

I am delighted to follow my hon. Friend the Member for Mid-Dorset and North Poole (Annette Brooke). Moreover, I wish to congratulate the hon. Member for Cities of London and Westminster (Mr. Field) on securing this debate and on introducing it in such a comprehensive and measured way. He is right to address the debate that exists in the country about why we contribute so much to international development—I know that some argue that we are not doing enough, but that is part of the wider debate. I was pleased, too, to hear him explore the impact that microfinance can have in this country. The hon. Gentleman raised some broader points about international development, including this poor-countries-versus-poor-people argument about where we should target our assistance, particularly in the context of India and China. I appreciate that it is legitimate to explore such an area in the widest terms, but if we use, for example, the poverty of the country as a whole, we can quickly find other reasons, such as human rights records and behavioural patterns of Governments, to remove such countries from the equation as far as international development is concerned. We should therefore concentrate on the alleviation of poverty for the people rather than focusing on the country exclusively. In countries such as China, though, we should consider what the Department for International Development is doing, because important technical assistance work on climate change is under way. It is a two-way street in which we are learning from them and they are learning from us. Although we need to critically evaluate such important work, we should also continue to support it.

The financial crisis to which the hon. Member for Cities of London and Westminster referred—he also mentioned it in his helpful article on his website—has been truly awful, and we have seen it at first hand in our own constituencies. The impact on the developing world, however, has been stark. The World Bank estimates that, as a result of the credit crunch, the finance gap for 2009 is around $635 billion, some $40 billion of which is in Africa. The priority that has been given to saving the western banking system has meant that Africa and parts of Asia have been left to fend for themselves. For example, 82 per cent. of the International Monetary Fund’s emergency resources has gone to European countries, and only 1.6 per cent. has been allocated to African countries.

Any debate on development has to be seen in the context of the dreadful events that occurred in Haiti a fortnight ago. It is a truly shocking catastrophe and highlights the need for urgent humanitarian assistance, which must be backed up in the long term by really serious development attention. Many people have been talking about getting Haiti back on its feet, only for Paul Collier to pull us up short and point out that it was never on its feet in the first place. I hope that we will be debating Haiti’s needs before long. Few could argue with the premise that it will need direct development assistance on a large scale for many years to come, and it is not alone in that.

In whatever part of the developing world we focus our attention on, the demands for development assistance are huge. Alongside the many channels of direct aid, which we debate and scrutinise in this House, we must not forget the importance of wealth creation as a key way to alleviate poverty. In that respect, microfinance plays an important part, which has been recognised by policy makers on the international stage for a long time. In 2005, the G8 at Gleneagles stated:

“African countries need to build a much stronger investment climate: we will continue to help them do so through the promotion of a stable, efficient and harmonised legal business framework...and increased access to finance including strong support for the development of micro-finance in Africa.”

The DFID White Paper committed the UK to support the creation of the new multi-donor facility, to which my hon. Friend referred, which has a goal of delivering microfinance to an additional 10 million clients over five years. Last year, DFID provided £250,000 towards the Consultative Group to Assist the Poor, which is a multi-donor partnership that works to expand access to finance and that monitors the success of microfinance projects worldwide. That is important work, which we support.

Today, the UK development finance institution, CDC, announced that it is to invest an additional $10 million in the ShoreCap II microfinance fund. Neatly timed to coincide with this debate, the CDC announcement reminds us that 160 million people are supported through microfinance institutions, and that 3 billion people across the world remain unbanked and without proper access to financial institutions and the products that they offer. The scale, therefore, is vast and it is a chasm that we would do well to cross.

Boosting the proportion of our official development assistance that is dedicated to microfinance programmes will barely make up the substantial gap in investment that has emerged as a result of the current economic crisis. However, it is important to ensure that those at the bottom of the pile across the world will be in a position to join in the recovery.

As others have already said, the development benefits from microfinance touch on not only poverty and hunger reduction, but a number of the millennium development goals, particularly for women. A whole body of research suggests that women’s participation in microfinance programmes has helped them to break free of traditional gender roles and contribute to their local communities and families. In Nepal, for example, a local women’s empowerment programme found that more than two-thirds of those participating were making decisions on buying and selling property, the education of their families and negotiating marriages. All those tasks were traditionally performed by the men in the community.

Between 2002 and 2009, DFID invested more than £40 million in microfinance in Afghanistan, more than 60 per cent. of which went to women. Other benefits have been seen in areas such as child mortality. A Ghanaian study showed that “Freedom from Hunger” clients had better breastfeeding practices and that their one-year-old children were of a healthier weight and height than non-client children.

In 2009, there were more than 3,500 microfinance organisations in the world and significantly more than 50 per cent. of their borrowers were women. According to RESULTS UK, half a billion people are now involved in microfinance, which is indicative of the success of the movement globally. However, there are some issues about microfinance that must be addressed. The amount that is being invested in microfinance institutions is increasing—the CDC fund might be seen as an example of that—and there is still some way to go. However, the scheme has become so successful that people are beginning to question the motivations of those who are investing in such funds. I am not against people making a decent return, but let me highlight a recent example that was brought to my attention.

A Mexican microlender with more than 840,000 customers went public in 2007, and raised $450 million for a group of backers who had originally invested about $6 million, which is the sort of return that most of us would like to see. In the analysis of that particular case, it emerged that the bank involved routinely charged annual interest rates of more than 100 per cent and that the overall return on equity enjoyed on the project was three times the 15 per cent. delivered by traditional lenders. So we can understand why the non-governmental organisations sometimes get a little uneasy about that type of finance and I hope that the Minister can offer some reassurance about how we are tackling what are perhaps the excesses at the margins of microfinance. Nevertheless, with pressure on public spending in the developing world becoming more severe, it seems to me that a proportion of any increase in the resources available for development assistance will certainly have to come from microfinance initiatives.

We will have to tackle the different issues that were raised by the hon. Member for Cities of London and Westminster. For example, he raised the issue of the evidence that has emerged from different studies, which does not always seem to conclude that microfinance is a good thing. However, in anticipation of today’s debate, my hon. Friend the Member for Mid-Dorset and North Poole and I were discussing this issue yesterday and she used a very good example of a woman who had enjoyed the use of microfinance. That woman herself had not seen a huge change in her income, but she had received a good, stable income, which enabled her children to receive proper schooling. Indeed, one of her children is now able to study for a master’s degree, which would otherwise not have been possible. So the impact of microfinance might not be immediately obvious, but through the generations it certainly becomes obvious.

In today’s headlines in the United Kingdom, we are hearing the heralding of the end of the great recession, although, as with everything that is advanced, we will wait to see the detailed figures before we start celebrating. As parliamentarians, we are inevitably and rightly preoccupied with the impact of what until recently we were calling “the credit crunch” on our constituents and focusing on the policy responses that we need to see to help many of our constituents to get out of the difficulties that they are in. However, in doing so I strongly believe that we must not lose sight of the wider impact of the downturn on the developing world. Private finance plays a critical role in alleviating that impact and it is currently drying up. If ever there was a moment for us to focus on the importance and the potential of microfinance, it is right now.

It is a great pleasure to appear under your chairmanship once again, Mr. Gale.

I should perhaps explain to the House that my hon. Friend the Member for Cotswold (Mr. Clifton-Brown), who is the shadow Secretary for international development and for trade, is on a campaigning visit to Sunderland and I am appearing, as it were, in his place.

First, I wanted to respond to the point made by the hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore), the Liberal spokesman, about Haiti. I hope that we will be discussing Haiti again in the House before too long and I completely echo the hon. Gentleman’s sentiments. Having said that, of course there will be a time for us to look at the way that the international community has co-ordinated the relief operation in Haiti and at the lessons that need to be learned from that operation. Indeed, my party has made it clear that if we were to win the next election, we would immediately set up a review of the way that Britain makes its contribution in this area of relief work. In the much-used words of Douglas Hurd, it is an area where Britain punches “above our weight” and we have a very big contribution to make, to ensure that the necessary lessons from the tragedy in Haiti are learned.

For now, of course, the main effort must be on bringing some hope and relief, particularly in providing shelter, food and medicine for the poor people in Haiti who are still, so many days after the earthquake struck, in desperate conditions. I am sure that we are all immensely proud of the contribution that British fire service personnel and NGOs are making to that effort.

The Minister would be expected to praise the staff of the Department for International Development. None the less, may I suggest that we add them to the list of staff that the hon. Gentleman has just cited, to pay tribute to the work that they are doing on the ground in Haiti too?

The hon. Gentleman is absolutely right. I am usually the first to pay such tribute and I happily do so again today.

I want to refer to the speech by my hon. Friend the Member for Cities of London and Westminster (Mr. Field) on the very important area of microfinance. Together with the hon. Members for Mid-Dorset and North Poole (Annette Brooke) and for Berwickshire, Roxburgh and Selkirk, he has done a great service to the cause of microfinance, highlighting the importance with which it should be viewed. It is perhaps not surprising that my hon. Friend, who is the Member of Parliament for the centre of the world’s financial services industry, should speak with such eloquence and knowledge on this vital extension of financial services to some of the poorest people on our planet.

In his opening remarks, my hon. Friend made some general comments about the support for development in the downturn that we are experiencing at the moment and about the countries that Britain seeks to support, which was a point picked up both by the hon. Member for Chorley (Mr. Hoyle) in an intervention and by the hon. Member for Berwickshire, Roxburgh and Selkirk, in a comment about China.

I just wanted to say a word or two about my hon. Friend’s comments about the countries that we support. As our right hon. Friend the Member for Witney (Mr. Cameron), the leader of the Conservative party, has said—I paraphrase his remarks—“At a time of economic hardship, now is not the time to turn our back on the poorest in the world, who are hit first and hardest and who are least able to cope with these circumstances, but to reaffirm our promises to them.” I am sure that my hon. Friend and indeed the whole House would join me in saying that those sentiments are absolutely right. In view of the economic climate that my hon. Friend rightly identified, it is worth making the point that this approach to these matters is not sentimental but very hard-headed, which explains why, in these times of economic difficulties, we say that we should ring-fence the international development budget and reaffirm our commitment to reaching the target of giving 0.7 per cent. of gross national income to international development by 2013.

There are, above all, two reasons why my hon. Friend referred to the importance of giving this support. The first is that it is morally right to do so. Our generations have a real opportunity to make a big impact in this area. Because of globalisation and because of what we know, the discrepancies of opportunity and wealth around our world today are obscene and we have the ability to do something about those discrepancies. That is, if you like, the moral case.

However, the second point is that it is absolutely in our national self-interest to support strongly the cause of development in some of the poorest and most difficult parts of the world. I want to make that point very clearly; this is not only an issue of morality, although that in itself is a sufficiently important reason for many of us to give support, but an issue that is of absolute importance to our national self-interest.

The document that I have given a hard copy of to the Minister of State is the Conservative party’s Green Paper on development, “One World Conservatism”; I should point out that he is handling it with a pair of tongs, as it were, in his seat. I hope that it eloquently makes the two points that I have made about the importance of international development. However, it also makes the point that we will only maintain public support for this spending if we are able to demonstrate through independent evaluation that the money is really well spent—that for every 100p we take from the hard-pressed British taxpayer, they are receiving £1 of real value. Independent evaluation, which I have been banging on about tediously for the last four years, is absolutely essential if we are to maintain public support for this vital development budget. We need value for money and transparency. Transparency is important, because we need to hold ourselves accountable not only to the British taxpayer but to the poor people in the developing world who we are trying to help. That is why transparency, as well as value for money and independent evaluation, is so vital.

The second point that my hon. Friend made in his opening remarks was about the countries to which we are giving support. I think that DFID is currently giving support to 102 countries around the world. We have made it clear that if we were to win the general election, we would immediately set up a review of every country that is receiving support from the British taxpayer through the development budget, to ensure that that money is well-focused.

My hon. Friend was asked about India after he mentioned China, which the hon. Member for Berwickshire, Roxburgh and Selkirk discussed as well. The Conservatives said some time ago that if we are elected, we will stop aid to China, which recently spent £20 billion on the Olympics and which, thanks to the international trading system, is roaring out of poverty. India seems to be a different case. There are, after all, more poor people in India than in all of sub-Saharan Africa. It is a country with which we have deep historical links through the Commonwealth, and it is in a different position. In the event of a Conservative victory at the election, that would be a matter for discussion under review.

Turning directly to my hon. Friend’s comments about the importance of microfinance, I associate myself entirely with what the hon. Member for Mid-Dorset and North Poole said. She and my hon. Friend spoke eloquently about the vital importance of microfinance in poor countries as well as in less poor ones, where the principles of microfinance can be enormously valuable. Not only does it help people to help themselves, as my hon. Friend said, but it goes directly to women. As I hope to explain in my remarks, it is women in every sphere of activity who bear the brunt of poverty throughout the developing world and who are particularly helped by microfinance.

In terms of our support for microfinance, I draw my hon. Friend’s attention to page 40 of the Conservative Green Paper on international development, where we say strongly that the lessons learned about how to make microfinance as effective as possible are important, and that we will embrace them and do everything that we can to help spread microfinance’s beneficial effects.

Professor Yunus, the father of microfinance, first became heavily involved in it three decades ago and founded the Grameen bank. Some 160 million people in the developing world now benefit, but I should point out that according to a recent World Bank report, 3 billion people in developing countries have no access to formal financial services. We need to ensure that we do everything possible to spread that access to help people increase their incomes and improve their lives.

In his excellent book “Banker to the Poor”, Yunus wrote about how he started the approach that led him to set up his bank, which demonstrates many of the most important aspects of how microfinance works. I had the pleasure of spending a day with Professor Yunus some time ago at the Grameen bank in Bangladesh, where I saw many of the characteristics that have made the bank and his approach to microfinance such a tremendous success. The bank has 6.5 million borrowers, 96 per cent. of whom are women, lends more than £2.5 billion and achieves a recovery rate of 98 per cent. Before the current financial crisis, I used to point out that that was a higher recovery rate than that of Barclays bank, but in view of recent events, I think that it is no longer appropriate to make that point.

My hon. Friend made the critical point that microfinance helps people to help themselves, empowers women, is self-sustaining and provides financial services to the poorest. He also said that it underlines an eternal truth about development: although conflict, dysfunctional societies and bad leaders are the key reasons why people remain mired in poverty, wealth creation, private enterprise, property rights, the rule of law, contracts and an independent judiciary, as the Liberal spokesman also said, all help lift people out of poverty.

My hon. Friend’s point about the importance of free trade reminds us that we should not give up on the Doha trade round, which was originally conceived in the aftermath of the terrible events of 9/11 and was always meant to be a development round. We are close to making significant progress on it. In my view, Ministers should redouble their efforts to ensure that the Doha round gains are not lost. There is no authoritative survey that does not show that success in the Doha round would make everyone in the world—rich and poor alike—richer. Perhaps the Minister of State, in replying to this debate, will say a word or two about where the Government stand in respect of the Doha round. The negotiations are carried out not bilaterally but through the European Union, of course, but I am sure that the House would welcome his comments on where we are.

Some of us have seen microfinance in action. In Bangladesh, I saw how microfinance can reach even the poorest of the poor with considerable effect. I saw the work of BRAC, still the biggest non-governmental organisation in the world. A couple of weeks ago, in Athar village in the Punjab, I saw the direct results of microfinance on the community. It has allowed the start-up of small enterprises, some of which I sampled, and lifted the standard of living in that poor community. There is now clean water for all the local population, and 100 per cent. of the children attend primary school. That is a direct effect of the microfinance approach.

Other innovative approaches are being taken as well, not least by RESULTS UK, a brilliant British organisation. Kiva.org offers peer-to-peer loans to entrepreneurs in developing countries. It is a model of transparency and public engagement. Some $170 million of loans have been made through Kiva, with 661,000 lenders and 290,000 recipient entrepreneurs. It achieves a repayment rate of 98.27 per cent., and 83 per cent. of loans are made to women. Hon. Members might be interested to know that that remarkable endeavour’s youngest lender is one year old and its oldest is 101.

Through GlobalGiving.org.uk, members of the public can choose where they invest, including in microfinance. My hon. Friend referred to the Arcubus bond, and the Liberal Democrat spokesman mentioned the CDC announcement and the recent International Finance Corporation aim to raise money for microfinance. A bond issue targeted at Japanese investors to support microfinance programmes has made $300 million. The IFC is considering raising funding in the European bond markets as well. New delivery technologies such as branchless banking through mobile phones are highly innovative efforts to take forward the microfinance agenda and reach the poorest in communities throughout the world.

I congratulate my hon. Friend the Member for Cities of London and Westminster on an interesting contribution to an important debate and on reminding us of the importance of the international development budget and the absolute importance of the private enterprise, free market development agenda, which is so important in helping people lift themselves out of poverty.

In the usual way, I congratulate the hon. Member for Cities of London and Westminster (Mr. Field) on securing this debate. I also congratulate my hon. Friend the Member for Chorley (Mr. Hoyle), the hon. Members for Castle Point (Bob Spink) and for Mid-Dorset and North Poole (Annette Brooke) and the Opposition spokesmen, the hon. Members for Berwickshire, Roxburgh and Selkirk (Mr. Moore) and for Sutton Coldfield (Mr. Mitchell), on their contributions.

I will reply to a number of the observations made by the hon. Member for Cities of London and Westminster before I come to the substance of his remarks. I have been interested in microfinance for a considerable period, starting in part with my chairmanship of the UK Co-operative party. The Co-op party has a long-standing interest in credit unions and social enterprises that can help enable access to low-cost finance for people in the UK.

The hon. Gentleman made some interesting remarks that, in a sense, highlighted the continuing potential for microfinance, not only in developing countries, but here in the UK. I hope he will forgive me if I draw the attention of my right hon. Friend the Secretary of State for Work and Pensions and her ministerial team to his remarks about the potential for microfinance in the UK. For a short period, I was responsible for consumer affairs as well as development—an interesting mix if ever there was one—and as part of that I considered what else we could do to crack down on illegal moneylending. That involved helping to ensure not only that responses from the police, housing associations and so on were clear and united, but that effective alternatives to the use of illegal moneylenders became increasingly available. I was delighted that the Treasury made additional finance available for cheap loans, but I suspect that my right hon. Friend will be able to do more justice to the potential for microfinance in the UK than I can during this short debate.

Some time ago, I had the privilege of meeting Professor Yunus and sharing a platform with him. There is no doubt that the work of the Grameen bank has inspired a considerable interest in microfinance and its potential across the developing world. As other hon. Members have described, microfinance has been taken up by organisations such as RESULTS UK, which does an excellent job.

However, I must part company a little with the hon. Gentleman: I do not think there is a choice between aid and trade. That is a false choice. There is both a role for aid to encourage trade and a role for trade—indeed, trade must be the long-term route out of poverty for developing countries. We can use aid budgets to do many things to help accelerate the development of trade, and we are considering exactly that. I would not want the House or those who follow our proceedings to run away with the notion that the Department for International Development does not face tough questions. We are regularly examined by the Public Accounts Committee and the National Audit Office, and there are a series of different ways in which our various programmes are evaluated. As a Minister in DFID, I have certainly never felt that I am not under scrutiny all the time—I know my officials have a similar view.

The hon. Gentleman raised the interesting subject of the debates taking place in some quarters about whether we should continue to give aid at current levels. The hon. Member for Sutton Coldfield pointed out that, of course, there is a very strong moral case, of which Haiti is the latest reminder. However, in the past five or 10 years alone, the notion that we can stay within our island and not worry about what happens in countries around the world has disappeared, if it were ever true before.

The hon. Member for Castle Point brought home the truth of that with his reference to Afghanistan. We know that drug lords in Afghanistan have occasionally been the only source of credit in local communities and that 90 per cent. of the heroin that ends up on Britain’s streets starts off in the opium poppy fields of Afghanistan. To bring us back in a circular route to the debate, the microfinance programme that we are supporting in Afghanistan, which has helped more than 440,000 Afghans to get access to loans, is just one way that aid for another country can help to make a difference and protect the UK. So there is both a moral case and a case in terms of our self-interest for continuing to invest in development assistance.

The hon. Member for Cities of London and Westminster made a number of comments about Bangladesh and the size of the aid programme there. I do not accept that our aid programme in Bangladesh is in some way unaccountable, but I accept his point that we must keep the number of programmes we have under review at all times. I will obviously draw his remarks to the attention of the Under-Secretary of State for International Development, my hon. Friend the Member for Worcester (Mr. Foster), who has responsibility for our programmes in Bangladesh. However, I suspect that the nature of the hon. Gentleman’s visit meant that he did not have a chance to have a lengthy conversation with staff in Bangladesh. That might have given him more reassurance about the way in which we are keeping what we do in that country under close review.

Nevertheless, I welcome the opportunity that this debate provides to raise awareness of the difference that microfinance can play in transforming the lives of so many of the world’s poorest people. Roughly 2.7 billion people have no access to formal financial services and instead depend on an income that is both irregular and unreliable. As other hon. Members have said, those people sometimes also depend on risky informal financial services, such as rogue moneylenders.

Across Africa, fewer than one in five people use formal banking, and in countries of particularly acute poverty the figure is fewer than one in 10. As other hon. Members have said, that makes it harder for such people to start businesses or to contribute to their country’s economic growth, and it makes them particularly vulnerable to natural disasters. For many people, a small loan and a savings account can make all the difference. As we have said, access to those things can prevent a farmer from being forced into opium cultivation, a child from being sent out to work instead of getting a proper education or, indeed, a local business from having to stay small rather than expand and create more jobs.

We need to recognise the potential and the limits of microfinance. Microfinance is not the only type of financial service that we need to increase the reach of, but nevertheless it is an important one, which can lead us to recognise that poverty and risk do not have to go hand in hand. The real challenge for those involved with microfinance is one of sheer scale, and in order to achieve depth and breadth of reach a number of things must happen. First, banks and investors must get more involved in the sector. In recent years, there has been some positive progress in that direction and many international banks have already increased their participation in the sector—more than 100 microfinance investment funds have been set up—but we need more of that to meet the level of demand.

Secondly, Governments and regulators have a responsibility to remove any unnecessary policy or legal barriers to the expansion of financial services. Through our funding of the financial sector reform and strengthening initiative, DFID is providing help on regulatory issues in the financial services sector to more than 60 countries. Governments are also in a position to test new technology, such as using branchless banking to pay wages and pensions, which can help the extent of the reach of microfinance initiatives. There is no reason why branchless banking—perhaps using mobile phone technology—could not be extended to microfinance. Customers would benefit from the speed and ease of access, and banks themselves would enjoy greater flexibility.

Thirdly, Governments can encourage the private sector to set targets for extending access to financial services to more poor people. For example, in India, just four months after the Government had urged banks to offer no-frills accounts to low-income people, 500,000 such accounts had been opened. That needs to be replicated across the developing world although, of course, we must recognise that no two countries have identical requirements and the solution must always be tailored to meet specific needs.

Fourthly, we need to teach more people about financial services. Some people can feel ill-informed, anxious or confused when dealing with financial matters. That is particularly relevant when talking about people in the developing world who may be using financial services for the first time. However, it is also relevant to people here in the UK, which is one of the points the hon. Gentleman implicitly made. With regard to the developing world, that is why we set up a financial education fund over a year ago to help people across Africa to understand better the financial choices available to them.

The provision of financial services brings its own challenges, and microfinance businesses might need help and guidance as they expand their reach, so the Department, together with the World Bank, is currently developing a fund, to which the hon. Member for Berwickshire, Roxburgh and Selkirk alluded, to support microfinance providers in Africa. We want that fund to invigorate approaches to microfinance, encourage innovation and ensure that people have the training they need. Ultimately, that should mean that financial services become more widely available to those who have traditionally been considered unbankable. I have already discussed that initiative with the all-party group on microfinance, chaired then by the hon. Member for North Poole (Mr. Syms), and I remain ready and willing to listen to comments from any Members who have an interest in the matter.

I will now respond to some of the specific points that other hon. Members have made. The hon. Member for Mid-Dorset and North Poole, who usually chairs the all-party group that I mentioned, highlighted the important contribution that microfinance can make to the achievement of the millennium development goals, and I completely agree with her point. If we want to achieve the principal millennium development goal of halving the number of people living on less than a dollar a day, we must substantially increase access to financial services. Microfinance has a key role to play in that. She also made an important point about micro-insurance. That is one small part of helping communities and the world’s poorest to be better able to withstand the rising impact of climate change globally, and that is one of the areas that we are working on.

The hon. Member for Berwickshire, Roxburgh and Selkirk mentioned the work that the Department is doing with CGAP, which is effectively the world’s think-tank on microfinance. We are co-operating with 32 other donors on CGAP’s work. He rightly drew attention to the impact of the global financial crisis on the world’s poorest people. As Members of Parliament, we of course will focus first on the needs of our own constituents, but he is right to remind us that almost 100 million people, according to the World Bank’s estimate, have been pushed into extreme poverty by the global financial crisis, the vast bulk of them in developing countries. Microfinance is clearly one part of our response to help get back on track to achieving the millennium development goals.

The United Nations Secretary-General is convening in September at the UN General Assembly a review of our progress internationally towards meeting the millennium development goals. Ten years in to that 15-year ambition to achieve those goals, that will clearly be a hugely important summit. I hope that by then we will have put into legislation our commitment to spend 0.7 per cent. of our national income on development assistance, because that will send a powerful signal to the international community.

On that point, may I say how much we welcome the publication of the draft Bill? Now that we have seen it, and seen that it is relatively short, can we not get it through before the election?

I welcome the hon. Gentleman’s support for the Bill and hope that the International Development Committee, whose job it will be to scrutinise it, and before which I will be lucky enough to appear, will be similarly supportive. We will wait to see what it says. I cannot speculate on when the general election will be called, and we have a series of other pieces of legislation to get through the House. If we cannot get the Bill through before the election, and if we have gone through the scrutiny process, why cannot all parties in the House commit to putting it on the stature book in time for the UN summit?

We have looked at the Bill and are happy to support it, as we have obviously made clear our strong support for the 0.7 per cent. commitment, so let there be no question about that. I wish to ask the Minister a question that the International Development Committee might wish to pick up. The Bill, which I have read carefully, states that if the Government do not bring forward 0.7 per cent. of spending by 2013, the sanction upon them is that they should come to Parliament and report, under three different headings, why that target has not been reached. That does not sound to me like a very strong commitment to the 0.7 per cent. target. Why is the Bill not much clearer, more succinct and tougher than that, in accordance with the commitment that the Prime Minister made to the House?

I am not sure what amendments the hon. Gentleman is suggesting, but I will be happy to listen to specific suggestions from him or the International Development Committee. We have made clear our determination to achieve the 0.7 per cent. target, but I have never been entirely convinced that his party, when in power—not that I think it will get into power anytime soon—would follow through on that commitment.

That brings me to several points that the hon. Gentleman made. I will start with his questions about the Doha development round. As he knows, in July 2008 we were very close to getting an agreement on the headlines—the modalities—of a trade deal. Pascal Lamy, the head of the World Trade Organisation, estimates that we were 75 per cent. of the way towards a deal, and we have come close several times to being able to see Trade Ministers meet. We secured agreement in the G20 meetings that there would be a stocktake in early 2010, and we await word from Pascal Lamy on when that will take place. There was a ministerial meeting of the WTO in Geneva in late 2009, and while the Doha round was not formally discussed at that meeting, it was discussed in a series of bilateral talks in which we and other countries pushed for further progress. Meetings of officials continue to take place in Geneva and I hope that Pascal Lamy will feel sufficiently confident about the progress that has been made to bring Ministers back to Geneva to try to reach the final part of the agreement that we need.

As the hon. Member for Sutton Coldfield rightly said, there are huge potential benefits for not only developed countries, but developing countries. The example of cotton is perhaps the most graphic. Countries such as Mali and Burkina Faso, which depend on cotton exports, could see huge potential increases in the level of cotton exports if we could only make progress on getting cotton tariffs brought down, particularly in the US, in some parts of Europe and in other OECD markets.

The hon. Gentleman also rightly mentioned Haiti. As the Prime Minister said at questions last week, we clearly need a review of how the aid effort has worked in Haiti. I humbly recommend to the hon. Gentleman a recent speech I made on that issue at the Central Emergency Response Fund conference in New York last December on average, we see disasters of the magnitude of that which has struck Haiti once a year, as well as a series of other emergencies, so we clearly need to look at what else we can do to increase the effectiveness of the international aid system. I am grateful to the hon. Gentleman for giving me a copy of his Green Paper—it will continue to be a useful guide for him when he is still doing the same job in opposition after the election.