Financial Inclusion: New Technology

Lord Bates Excerpts

Thursday 6th July 2017 Lords Chamber

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, I join other noble Lords in paying tribute not only to the address of my noble friend Lord Holmes and to his securing this timely debate but to the productivity and passion that he brings to the topic.

Normally, we have a set speech and then we come to some of the questions raised in the debate, and invariably we run out of time. Therefore, perhaps I may go straight to some of the questions and then come to some of the set remarks that I have before me.

I will start with the Financial Exclusion Select Committee. Its report was widely acknowledged as a very thorough, detailed and comprehensive look at this area. It is a classic example of the use of the ad hoc tool within your Lordships’ House to produce a really worthwhile and stimulating report. Its timing was not necessarily perfect in the sense that it was published on 25 March, just ahead of the announcement of the general election, and therefore there was a slight hiatus during the period of purdah that followed. However, as the noble Lord, Lord Stevenson, mentioned, it contained 22 substantial recommendations, which are being taken very seriously. They are the subject of discussion across Whitehall and we will respond to them very shortly. Perhaps we might have a debate on them when the response has been published, but it seems to me that the report will be an essential piece of work.

This debate also comes immediately after the Financial Guidance and Claims Bill had its Second Reading in your Lordships’ House. The noble Lord, Lord Kirkwood, served on the Financial Exclusion Committee, along with my noble friend Lord Holmes, and he also spoke in yesterday’s Second Reading debate, which I read. A number of points have been raised in this debate which I will feed back to my noble friend Lady Buscombe, who is the lead Minister on the Bill, to see whether we can move forward.

We were blessed with two brief interventions, from my noble friends Lady Stedman-Scott and Lady Stowell. They focused on young people and the financial inclusion initiatives. One of the great advantages of responding to the debate is that I was able to look up on my smartphone the Government’s digital strategy to see whether it mentions young people. I was relieved to find that, even in the executive summary, there are a number of mentions of young people, with digital skills being placed alongside numeracy and literacy as key skills that people need for the future.

On my noble friend Lady Stowell’s point, the Government introduced financial education to the secondary school curriculum in England in 2014. It is for the devolved Administrations to talk about what is happening there. However, we can follow through on some additional elements of the efforts to include young people, because I share my noble friend Lady Stedman-Scott’s view that this has the potential to be a real leveller, as young people have great aptitude already in this technology. The E in PHSE stands for economics, and when it is well taught it increasingly involves fintech. We hope that that will be a key element, and we welcome that the issue was raised.

The noble Lord, Lord Kirkwood, asked about Verify being developed with the Cabinet Office. We are working with the Cabinet Office on this, but identity in financial services can be tough to crack. However, we look forward to following up on that.

The noble Lord, Lord Stevenson, referred to the G20 high-level principles. It is worth noting for my noble friends Lady Stowell and Lady Stedman-Scott that principle 6 refers to the strengthening of digital and financial literacy. The noble Lord, Lord Kirkwood, referred to my two hats, one of which is from DfID. One area in the G20 that we are following very closely is that of remittances. Remittances are a major part of economic development, amounting to around $420 billion per year—twice as much as overseas development assistance. Yet the cost of remitting money back to countries can vary between 3% and 17%. There is a great deal that we can help with there. The Government’s position on the G20 high-level priorities is that they are working closely with the Global Partnership for Financial Inclusion, or GPFI, which supports the implementation of the high-level principles on financial inclusion.

I go back now to some of the points raised by the noble Lord, Lord Holmes. He asked about the FCA’s role, and I was pleased that he recognised it as an excellent and innovative regulator in this area. Its role in financial inclusion was raised by the Select Committee report and the Government will respond to that. As for the single financial guidance body, it will provide information and guidance, and help people manage their finances.

The noble Lord, Lord Kirkwood, asked whether the Government should amend the Financial Services and Markets Act 2000 to create a requirement on the FCA to set out a reasonable duty of care for financial services providers to exercise towards their customers. Issues of duty of care are for financial services providers, as a requirement of the FCA. The Government will respond to this recommendation as soon as possible. In the FCA’s mission document, published in April, and in its response to the Lords’ Select Committee on Financial Exclusion report, sent to the noble Baroness, Lady Tyler of Enfield, in June, it committed to publishing a discussion paper to explore the duty of care further.

The noble Lord, Lord Holmes, asked about the DWP proof of concept, and he is right to say that this received positive feedback. It is examining this issue and will conduct further work before taking a decision on pushing these ideas forward.

I turn now to some of the key messages that we are seeking to get across in this debate about our position at the moment. As I have said, the Government will publish their response to the Select Committee’s report shortly. The pace of change—which was referred to I think as “innovative and disruptive” by the noble Lord, Lord Holmes—in this sector is frenetic. We are witnessing the emergence of a new wave of general purpose technology: big data, analytics, machine learning, peer-to-peer lending—that term probably needs to be qualified in your Lordships’ House—networks and distributed ledger technology, each of which can bring potentially far-reaching changes for people traditionally excluded from financial services.

We should think, for example, how much online budgeting tools can help to give people unprecedented control over their finances—empowerment, as the noble Lord, Lord Holmes, said. Indeed, the Department for Work and Pensions is exploring ways to give tenants more control over their spending via smartphones. This could include not actually paying rent monthly. If it is digital, why not pay it daily or weekly, which is sometimes easier to manage? The Government believe strongly that a flourishing fintech sector will lead to further innovations that will help reduce financial exclusion across the UK. It is worth noting that the development of fintech is not limited to London. There are strong fintech centres in Leeds, Manchester and Edinburgh, and across the UK.

In terms of how we will approach this, we suggest three pillars. First, we will create the most welcoming regulatory environment in the world for fintech, without compromising financial stability or consumer protection. The Financial Conduct Authority’s Project Innovate, which has been referred to in the debate, is recognised around the world as a gold standard in this field. Secondly, we will ensure that the legislative and regulatory framework is fit for purpose as new fintech products and services emerge. The Government are taking action. We have overhauled the regulatory and tax regimes to accommodate new peer-to-peer lending models and we are taking steps to ensure that customers have the option to share their financial data with fintechs safely and efficiently. Finally, we are promoting UK fintech at home and abroad. We have created fintech bridges with Singapore, China and Hong Kong. In April the Chancellor and the Governor of the Bank of England hosted the inaugural international fintech conference.

Several studies have ranked the UK as a leading global hub for fintech development and the Government are committed to building on this to make sure that UK fintech goes from strength to strength. However, this debate is specifically about how to use the UK’s success in fintech as a lever towards financial inclusion and capability. I can point to some early successes. The FCA has led the way globally. It has provided direct support and access to its sandbox to a number of firms focusing on social inclusion, such as Oval, an app that helps users build up savings by putting aside small amounts of money every week.

Beyond the regulatory sphere, the Government are also acting directly to stimulate exploration of potential fintech support for financial inclusion and capability. In March of this year, the Government’s digital strategy announced that we would launch a competition, to be run by Tech City UK, to encourage digital approaches to support financial inclusion. There is a clear need to ensure that we reduce the number of those who do not have any kind of account—the so-called “unbanked”. A financially inclusive society is one that allows its citizens to manage their money more effectively, securely and confidently. For their part, the Government aim to boost inclusion and ensure the widest possible free access to basic bank accounts.

I have some additional data which noble Lords may be interested to receive. In the first half of 2016 alone, nearly 500,000 basic accounts were opened in the UK. There are just under 8 million basic bank accounts open now in the UK, and 4.1 million basic accounts were completely fee-free at the end of 2016.

I move to my conclusion. The Government have two separate objectives. We are creating the conditions for fintech to flourish in the UK in general, but we are also taking specific action to ensure that these technologies are harnessed to tackle the problem of financial exclusion. These twin strategies will help us in the mission we all share of equipping everyone in our society, young and old, with the financial tools they need to live the lives they want. I finish by thanking once again the noble Lord, Lord Holmes, for introducing this debate and all those who have contributed so well to it.

[Lord Holmes of Richmond]

My Lords, I thank all noble Lords who contributed to the debate, not least my noble friend the Minister. It seems harsh to pull him up on one tiny detail, but I feel I must. He said that the timing of the publication date of the report from the ad hoc Financial Exclusion Select Committee was not perfect. The timing was perfect; perhaps the timing of the general election was less so. For different reasons, everybody around the House might share that sentiment.

We have a phenomenal opportunity in this country if we get fintech and financial inclusion right. We will not just have a world-leading, world-beating fintech sector, but through the financial inclusion that that will deliver we will address perhaps one of the most pernicious, iniquitous elements of our society: that all too often those on benefits and those who have the least find themselves having to pay the most, not least for the most essential utilities. If we can address that, it would be a profoundly positive element—one of many that can come from the excellent connection between fintech and financial inclusion. I thank again all noble Lords who participated.

Public Sector Pay Cap

Lord Bates Excerpts

Wednesday 5th July 2017 Lords Chamber

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, with permission, I will now repeat in the form of a Statement an Answer to an Urgent Question given by my right honourable friend the Chief Secretary to the Treasury in another place earlier today. The Statement is as follows:

“We all recognise that public sector workers do a fantastic job. Over the past seven years, we have seen major improvements in our public services: crime is down, with a greater proportion of police on the front line; more children are achieving higher standards at school and going on to apprenticeships and university; and our NHS is looking after more people than at any time in its history. Government pay is designed to be fair to public sector workers who work so hard to deliver these strong public services, but we must also ensure we are able to provide those public services on a sustainable basis for the future.

In many services, workers have received additional pay to the 1% national increase: teachers had an average pay rise of 3.3% in 2015-16; more than half of nurses and other NHS staff had an increase of over 3% in 2016; and military service personnel saw an average additional increase of an average 2.4%. Salaries in the public sector remain comparable to those in the private sector and, in addition, many benefit from higher pension entitlements. They also benefit from the rise in the personal tax allowance, worth £1,000 a year to a basic rate taxpayer.

We are currently completing the pay review process for 2017-18. The Government have set the remit for the pay review bodies and they have made recommendations. We have accepted the pay review recommendations made for doctors and NHS staff and the Armed Forces. We will be looking very carefully at the recommendations on the remainder, and making determinations in the usual way. As the Chancellor said on Monday, our policy on public sector pay has always been designed to strike the right balance of being fair to our public sector workers and fair to those who pay for them. That approach has not changed and the Government will continually assess that balance”.

[Lord Tunnicliffe (Lab)]

My Lords, I thank the Minister for repeating that Answer, although I regret its tone and what it shows about the Government’s attitude towards public sector workers. This is clearly an extensive and complex issue and I am therefore delighted that my noble friend Lord Haskel has managed to secure a debate on this very matter next Thursday, when we will have an opportunity to go into it in more detail.

The specific question that I put to the Minister today relates to the terms of reference of pay review bodies. Can the Minister tell the House whether those bodies are required to have regard for government policy with its 1% cap? If the answer is yes, surely the publication of such reports is little more than a publicity stunt.

[Lord Bates]

The answer to the question is yes, but it is not a publicity stunt. These are serious matters that are considered very carefully, as has been the case on many occasions for a long time. Public sector pay is set out in the Budget and that advice is contained in recommendations that are sent to the independent pay review bodies. They make their recommendations and then the Government respond, normally by way of Written Ministerial Statement, as we have done already. The situation in which we find ourselves is one of significant debt. It is worth remembering that the interest that we pay on our debt would cover the NHS pay bill in its entirety each year. These are not therefore inconsiderable matters; we ought to bear them in mind and, at the same time, try to strike the balance between fairness to those public sector workers who do so much in our society and country and having regard for the taxpayers who are paying their salaries.

[Baroness Kramer (LD)]

My Lords, lifting the 1% public sector pay cap has been Liberal Democrat policy since 2015. Does the Minister agree that the pay cap was brought in to prevent losses and deflation at a time of fiscal crisis? It was never intended to be prolonged and to continue into a period of high employment and inflation and, therefore, should be ended.

[Lord Bates]

I seem to remember that when we were in coalition with the noble Baroness’s party, there was in fact a pay freeze for two years, which was then loosened to a 1% cap. We now want to move forward: there needs to be public sector pay restraint but we want to make sure that, through progression pay and other benefits, public sector work is recognised and rewarded.

[Lord Howell of Guildford (Con)]

Does my noble friend agree that the surest way to higher pay for all, including in the public and the private sectors, must be through higher growth and lower inflation? Is not the quickest way to higher growth efficient and systematic control of all public expenditure programmes and lots of new enterprise and new investment? Is it not time for some new language to explain that simple fact?

[Lord Bates]

My noble friend has explained it rather well. Maintaining a good solid economy is good for the economy. It controls inflation and interest rates, which are at an historic low. It has contributed to the fact that we have record levels of employment and has also enabled us to cut taxes for some of the lowest paid, taking 1.3 million people out of tax altogether.

[Lord Clark of Windermere (Lab)]

My Lords, the Minister says that public pay is a balance between the pay to the individual in the service and what the individual citizen feels is fair. How have the Government assessed what the view of the citizen is as regards National Health Service staff?

[Lord Bates]

On that specific point, the Institute for Fiscal Studies has reported that public sector workers earn on average 13% more than those in the private sector. Secondly—this is very important—the purpose of the pay review body is to make sure that we continue to attract people into the public services and deal with employment. That is why it is interesting and helpful to note that a public sector pay review body has said:

“We do not see significant short-term nationwide recruitment and retention issues that are linked to pay”.

[Lord Cormack (Con)]

My Lords, as one who has from time to time found himself at odds with government policy, will my noble friend tell his colleagues in the Cabinet that we do not expect them to have their debates in public?

[Lord Bates]

I was just about to say that was above my pay grade and then I realised that was probably not the right term to use. The Chancellor set out the policy on public pay in the Budget. That continues to be the case. We listen very carefully to what the review bodies say and watch very carefully to see the impact that has on recruitment. That policy will continue.

[Lord Howarth of Newport (Lab)]

My Lords, further to the excellent question by the noble Lord, Lord Cormack, when you have the Health Secretary, the Environment Secretary and even the Foreign Secretary publicly campaigning against the policy of the Chancellor of the Exchequer, what does that do for the authority and standing of the Government? Is not the Cabinet a rabble?

[Lord Bates]

Certainly, the Cabinet is not as the noble Lord describes. The reality of all these things is that we do not have a Cabinet of clones; we have a Cabinet of individuals—a lot of individuals who care very passionately about the areas for which they are responsible. I declare an interest as a Minister for International Development, about which I care very passionately and on which I might occasionally be prepared to make my case. But the fact of the matter is that the collective government policy is as set out by the Chancellor in the Budget. We listen carefully to the independent pay review bodies.

[Lord Tugendhat (Con)]

My Lords, does my noble friend agree that there is a great deal of support for the view implied in the question of my noble friend Lord Cormack? However, does he agree that perhaps we are moving towards a moment when it might be right to consider raising taxation to deal with some of the problems being discussed today?

[Lord Bates]

I am not sure that I agree with my noble friend in that respect because the way that we have raised tax thresholds, particularly for lower-paid workers, has meant that on average they have benefited by an additional £1,005, which is a significant increase to their salary. Further, there is the increase in the living wage, with the equivalent of a 4.2% increase for the lowest paid. Therefore, I think there are other mechanisms by which we can ensure that people’s pay and conditions improve without resorting to raising taxes.

[Lord Cunningham of Felling (Lab)]

My Lords, is it sensible for the Government to continue to put their faith in growth in the economy when today’s abysmal news about productivity demonstrates that it is bound to fail? Our productivity now is lower than it was a decade ago.

[Lord Bates]

That is why we have said that productivity is a key target. But just last year we had the fastest-growing economy in the G7. We have seen incredible growth, otherwise we would not have employment at record levels in this country, with an additional 3 million people in work. Part of the reason is because we have kept a tight grip on the public finances and have seen the deficit reduced by two-thirds. These are important contributions towards maintaining confidence in the economy going forward. However, I accept that we need to work much harder on the area of productivity.

[Lord Watts (Lab)]

What would the Minister say to the public sector workers who are told that there is not enough money to pay them a decent wage, while at the same time the Government can find £1 billion to give to the DUP?

[Lord Bates]

We would say to those people that we have independent pay review bodies which look at these matters. On Northern Ireland, there are historical challenges. Personally, I think that securing stability for the Government going forward is an important part of maintaining that path to growth, enabling us to pay down on the debts and ensure that salaries for both the public and private sectors increase in the future.

[Lord Tebbit (Con)]

My Lords, I am afraid that my noble friend omitted to correct the noble Lord opposite, who talked about £1 billion being given to the DUP. No such sum is being given to the DUP—it is being given to the people of Northern Ireland, to improve standards of living in Northern Ireland.

--- Later in debate ---

[Lord Bates]

Not for the first time, I am happy to stand corrected by my noble friend Lord Tebbit.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I will return to the Minister’s point about productivity. I have raised questions previously about the extent to which public servants are being encouraged to work and change their productivity and to find ways in which they might be rewarded. Can the Minister say whether any instructions are being sent to the pay review boards about this, to search for better productivity? There may be an opportunity for more money to be paid to public servants if productivity can be linked to their performance, and this may be a way out of the impasse we find ourselves in.

[Lord Bates]

We look at that constantly. When I was at the Home Office we looked at that with regard to the police, as reducing bureaucracy improves practices and efficiency within the police force. We were able to maintain levels of front-line policing while at the same time we saw crime falling to record lows. So all these things can be looked at and improved.

Overseas Development Assistance

Lord Bates Excerpts

Tuesday 4th July 2017 Lords Chamber

[Lord McConnell of Glenscorrodale]

To ask Her Majesty’s Government how much United Kingdom Overseas Development Assistance is currently spent in co-operation with, or through, the European Union.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, the UK contributed £935 million in overseas development assistance to the EU budget in 2015 through core funding. In addition, DfID contributed £392 million to the European Development Fund. Overall, these contributions to the EU made up 10.9% of the UK’s overseas development assistance.

[Lord McConnell of Glenscorrodale (Lab)]

My Lords, that is a significant contribution. The Government’s own analysis indicates that European Union development funds are among the most effective from any multilateral organisation. In the current atmosphere, perhaps there will be some let us say knee-jerk reactions from time to time about the way in which Brexit happens in relation to specific powers. Can we get a guarantee that on these programmes, which are ultimately about saving lives and about people who are in very vulnerable positions, the Government will seek a proper transition period to ensure that these programmes are not left on the edge of a cliff?

[Lord Bates]

I am certainly happy to give that assurance. Of course, it was the multilateral development review that we undertook last year that the EDF scored so well in. Around the world we work in partnership with the EU and through its funds, and I cannot envisage a situation where we could do that effectively in the future without working very closely with the European Union. With regard to the fund itself, decisions on whether we want to contribute or stay out will be made as part of the process of exiting the European Union. Now at least we have a choice.

[Lord Deben (Con)]

Will my noble friend the Minister tell me how much it is going to cost to disentangle ourselves from these arrangements in the European Union? Can I have his undertaking that none of that money will come from our overseas aid budget? If he does not have a figure, perhaps I might point out that it is the habit of this House to want to know the cost before we agree to action.

[Lord Bates]

A number of organisations oversee that important element of the budget. There are the Independent Commission for Aid Impact and the National Audit Office—all these organisations will be scrutinising the amounts of money that go out. In relation to the European Development Fund in particular, which is the focus of the Question, that amount is an annual supplement and therefore it should not be that difficult to make a decision on an annual basis, along with other multilateral partners, about how much we put in.

[Lord Collins of Highbury (Lab)]

My Lords, the Government’s new approach to trade policy towards developing countries has just been released by DfID. The proposals are welcome, but they are not as generous as they may appear. The strategy addresses the EU’s “Everything But Arms” agreement, which allows for the UK to negotiate agreements unilaterally, but does not address the economic partnership agreements, which are vital to many developing countries in terms of trade going into the UK and the EU. How are the Government going to address this issue in negotiations for Brexit?

[Lord Bates]

The partnership agreements to which we are party will continue until we exit the European Union. The Secretary of State for International Trade and the Department for International Development announced an indication to say that with 48 countries in particular we wanted to ensure that that duty-free, tariff-free access to our markets—which is so crucial for them, as well as beneficial for us—continues. The details with regard to the other countries, again—I am sorry to keep repeating this—will be handled as part of the exiting the European Union strategy.

[The Earl of Sandwich (CB)]

My Lords, the problem is that we are having to think the unthinkable. It is unthinkable, for example, that we will not be beside the EU in rescuing refugees from the Mediterranean and putting them into Italian ports. Has the department made any plans for the biggest humanitarian programme, which is ECHO, and how we are going to relate to that?

[Lord Bates]

I share the noble Earl’s view that it is inconceivable. Wherever I travel around the world, the EU is there, represented in force. We have to remember that wherever we operate, particularly in development, we are always working in partnership. We are working in partnership with the G20—for example, at the Hamburg summit this weekend. We are working in partnership with the African Union and the UN agencies; the whole thing is about partnership. That is one of the reasons it is so effective.

[Baroness Sheehan (LD)]

My Lords, the Asia-Latin America programme is funded from the European budget. Therefore, the UK would no longer make direct contributions. However, the programme, particularly in Latin America, is a major source of influence in a region where we do not have a major bilateral presence, and there may be advantages in remaining part of the programme. Will the Minister assure us that some thought has been given to maintaining arrangements for the UK to remain associated with the programme?

[Lord Bates]

We continue to work to the UK’s strategy, which is a cross-government, cross-Whitehall approach about where our priorities should be, in consultation with our international partners. In relation to Asia, we have some bilateral programmes. One of the areas where we work quite closely is with the new Asian Infrastructure Investment Bank which has been established. We were a founder investor in that. We will continue to keep all these things open and will continue to work in partnership.

[Baroness Berridge (Con)]

My Lords, in a debate this morning in Westminster Hall, a number of MPs highlighted the correlation between the fragile states in which DfID spends much of its money and high levels of persecution of people on the grounds of faith or belief. I would be grateful if the Minister could assemble a meeting of interested MPs and Peers, particularly with his counterpart the right honourable Alistair Burt, the DfID and FCO Minister for the Middle East and North Africa region, so that we could discuss in detail how DfID’s priorities and programming could support increasing religious tolerance in these fragile countries.

[Lord Bates]

I am very happy to do that and also to invite along my noble friend Lord Ahmad, who leads on religious freedom in these areas at the Foreign Office. Human rights are a fundamental building block of human development. We all appreciate that. Therefore, Article 18 of the universal declaration is a key element. I was looking at the Prime Minister’s words on 28 February when she spoke at a reception in Downing Street. She said:

“It is hard to comprehend that today people are still being attacked and murdered because of their Christianity. We must reaffirm our determination to stand up for the freedom of people of all religions to practice their beliefs in peace and safety”.


We stand by that.

[Lord Bruce of Bennachie (LD)]

Together the member states and the EU collectively deliver more than half the world’s official development assistance. This will not be the case when Britain leaves the European Union, yet we rate the EU as one of our best partners. It is not just about transition. Is it not about having a long-term commitment to work with allies across Europe who share the same values, including the only countries that have actually delivered 0.7%?

[Lord Bates]

I agree that there has got to be that essential partnership. There has got to be an essential partnership with the US as a major deliverer of international aid. We have to work with the Commonwealth, which is a major recipient and also an important partner in resolving a lot of the conflicts. We work with the Nordic Plus states in the development arena. We have to work in partnership. We have an overarching aim, whether we are in the EU or not, and that is the sustainable development goals. That is our target: the eradication of extreme poverty by 2030. We are all working towards that wherever we are.

[Lord Tebbit (Con)]

My Lords, is my noble friend aware that, unlike some noble Lords who have spoken on this Question, I have at least as much confidence in our very good Secretary of State, Priti Patel, as I have in the bureaucrats of the European empire?

[Lord Bates]

I share my noble friend’s absolute confidence in our Secretary of State on these matters because she has been strong in emphasising that it is not just the amount that we contribute to overseas development that determines its effectiveness but how it is spent and focused. That is a key target and a key aim of reform, which she has avowed, not only in our department but in the UN institutions.

[Lord Tomlinson (Lab)]

My Lords, does the Minister agree that his view on the Secretary of State is a view on her present pronouncements about development, not on her former pronouncement that the department ought to be abolished?

[Lord Bates]

I think it is always best to judge politicians by their actions. When you look at what the Secretary of State is doing, what she has announced, the places she has been and the focus she has given to economic development, disability rights and family planning, in all these areas she has been at the forefront of humanitarian aid. The fact that she does so with an edge of demanding realism rather than sentimentality in approaching these things strengthens the delivery of the product.

Overseas Development Assistance

Lord Bates Excerpts

Monday 3rd July 2017 Lords Chamber

[Lord Collins of Highbury]

To ask Her Majesty’s Government how they intend to consult non-governmental organisations and development aid charities regarding the commitment in their manifesto to work with like-minded countries to change the rules relating to overseas development assistance.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, we are consulting with civil society organisations to hear what rule changes they believe would be beneficial in helping us deliver the sustainable development goals. NGOs have been invited to share with us their thoughts and indications as to what changes might be envisaged as part of a wide consultation process.

[Lord Collins of Highbury (Lab)]

I thank the noble Lord for that response but the question was about what the Government are thinking. In 2016, Justine Greening sought from the DAC changes to accommodate the SDGs. What more changes do this Government want? They should come clean about that and then consult properly. Does the Minister not accept that if the United Kingdom went alone on these changes it would break the international rules-based agreements we have, which would have severe consequences for international development?

--- Later in debate ---

[Lord Bates]

Of course we are not talking about going it alone. The OECD and DAC process is made up of 30 countries. It is a consensus operation and we have to work with colleagues to bring about the changes that we seek. The Secretary of State convened a meeting of 18 NGO leaders in the department last Wednesday, which I attended. It was a very productive session. The first thing it recognised was that the existing rules were not perfect. The second thing, which we are absolutely sure about, was that it was essential to preserve the primary purpose of aid; namely, economic development. That will remain our focus as we consult colleagues on the DAC, NGOs and other parties here.

[Baroness Hodgson of Abinger (Con)]

My Lords, it is often the small organisations working at grass-roots level that can really make a change and a difference to the poorest communities around the world, but they find it very hard to apply for these grants; there are often very complicated procedures to get the money. Will my noble friend please tell me what is being done to help these small organisations access funds?

[Lord Bates]

My noble friend is absolutely right. Small organisations often bring innovation to the process, passion and low overheads, which are deeply needed in the way that we develop aid. As part of that process, the Secretary of State has announced that we are going to launch a small charities challenge fund aimed particularly at small organisations with a turnover between £25,000 and £250,000 for accountable grants of £50,000 each. We will be making an announcement about that next week but I will certainly make sure that all Members of your Lordships’ House, who I know follow these matters closely and have good links to many small charities doing amazing work around the world, have details of that fund.

[Lord McConnell of Glenscorrodale (Lab)]

My Lords, as part of this consultation will the Government publish an assessment of the impact of the changes that were made in 2016—they were indeed made to accommodate the sustainable development goals, as well as the UK priority of investment in conflict-affected and fragile states—before then asking for more?

[Lord Bates]

That is certainly something that we will look at once we figure out the exact routes that we are going down. We have identified a number of areas. For example, development assistance is available post-conflict to rebuild countries but when it comes to peacekeeping, only a small percentage of that budget is attributable to development assistance. When we want to help with training militaries in how to prevent sexual violence in conflict, we find difficulties in getting that element there. When we want to look at refugees providing vocational assistance here in the UK, that is deemed to be a benefit to the national economy and therefore is not allowed. So there are a few things here but the essential point, which the noble Lord is absolutely right about, is that we have to work together on this to resolve those differences with the primary purpose in mind.

[Baroness Sheehan (LD)]

My Lords, I would like to press further the point that the noble Lord, Lord Collins of Highbury, made. Will the Minister share with your Lordships’ House a definition of ODA that the Secretary of State will be content with, bearing in mind that she is on record as saying that she would like to see the department that she now leads abolished?

[Lord Bates]

She is also on record as a passionate defender of the 0.7% target. That was in the Conservative manifesto; it was secured under a coalition Government and maintained under a Conservative Government, and it is something that we are extremely proud of. The fact that we have a 0.7% commitment does not mean that everything to do with reform should stop there. We want to make sure that every single penny and pound of that is directed to the people who are in the greatest need because we cannot afford to leave them behind when there is so much need visible around the world.

[Baroness Hayman (CB)]

My Lords, the Minister referred to the prime aim of aid as economic development. We have discussed before in this House how economic development cannot take place without investment in health and in the empowerment and education of women. The UK is a respected global leader in many of these areas: malaria, neglected tropical diseases, maternal and child health, and the education of women and girls. Can the Minister assure the House that any changes that are made will not be to the detriment of continuing investment in the areas in which we have proved to be effective and successful?

[Lord Bates]

I can certainly give that assurance. In fact, health is one of the key areas in which we have been investing heavily. I know that the noble Baroness has taken a great interest in neglected tropical diseases. We announced a further £200 million for that cause, which is saving hundreds of thousands of lives, just a few months ago.

Development Aid Budget

Lord Bates Excerpts

Monday 3rd July 2017 Lords Chamber

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, I join other noble Lords in paying tribute to the noble Baroness, Lady D’Souza, for securing this debate. It has been extremely useful and one of those occasions when you look at the wealth of expertise both in and outside this House and are not quite sure whether at the end of it you are supposed to give a speech or should have been taking notes. Of course, it has been a combination of both as I have gone through this debate.

The noble Baroness, Lady D’Souza, has a distinguished track record in this whole area. She outlined, rightly, the need for evidence-based analysis of what is working here. We also heard during the course of the debate from my predecessor, my noble friend Lady Verma, who left a tremendous legacy from her time as Minister. I publicly thank her for that. Many of the areas in which I now deal simply continue excellent initiatives that she began. I also join others in welcoming my noble friend Lady Sugg to the Front Bench as Whip. She will be a tremendous support because, again, she has such experience and expertise in this area.

If I were to try and answer all the questions presented to me, we would exceed the two-and-a-half hour cut-off line—perhaps even the two-and-a-half hour cut-off line for my speech. I have a limited amount of time, but I am very keen that we are able to draw on the wealth of expertise in this House. I will look for an opportunity, I hope before the recess, to continue some of these discussions we have had today.

UK aid plays a vital role in helping the world’s poorest and most vulnerable. That is both morally right and in our enlightened self-interest, as we were reminded. One of the other themes of the debate has been that the world has changed. The noble Lord, Lord McConnell, referred to that in particular. We talked about the changing nature of some of the pressures. I want to dive straight in to the ODA issue mentioned by so many. It is an area of focus.

The rules of the OECD’s Development Assistance Committee were set up some 40 years ago, when the world was a very different place. They have been changed only once in the past 40 years. That process of changing them, once, in March 2016—as the noble Baroness, Lady Sheehan, and the noble Lord, Lord Collins, referred to—took a period of four years to agree. This is a slow-moving area because the Development Assistance Committee works by consensus. We have been very keen to say that we want to share our concerns with our friends. That has literally just begun through our communication process. At this stage, I cannot give a run-down of who our friends are in these particular areas or what each of them are coming to us to say are the areas they would like to see changed and improved.

However, they have looked at particular areas such as climate change. That is something on which 40 years ago there was perhaps not the same focus so we need to look at it. Some elements of research that you can do into climate change are not ODA eligible, yet they benefit, as many have mentioned, the poorest on the planet. There is also violent extremism and countering terrorism—the new threats we face. Do the rules allow and capture all that has been done in this particular area? There is migration on a huge scale around the world, almost unprecedented in our history—certainly post-war—and that raises new challenges. So when, for example, we deploy Border Force cutters in the Mediterranean to intercept the people-traffickers who make fortunes out of other people’s misery and put their lives at risk, and when we work with the Libyan coastguard to try and improve their security and safety, are these not areas that we ought to be able to consider as part of our overall effort?

There is also trade. We talk about trade and development. The only way we are able to achieve that aspiration set out by the former archbishop of not creating dependency—referred to by the noble Lord, Lord Judd—is by trade. Look at the number of people in extreme poverty, which reduced by 50% between 1990 and 2010. What was the reason for that—was it the levels of aid? No, it was the levels of trade, so those are very important to us. That is also the reason why the Secretary of State for International Trade and the Secretary of State for International Development jointly announced that one of our ambitions is to maintain and build upon the preferential trade arrangements for the 48 countries in Africa to be able to trade into the United Kingdom tariff-free. We recognise that that is incredibly important to us.

The noble Earl, Lord Sandwich, referred to the issues of monitoring. Many noble Lords referred to the level of monitoring that goes on. He referred to the possibility that there might even be an excess of monitoring in some respects. Of course, at the moment overseas aid is, in the UK, probably one of the most scrutinised of any spends that happen anywhere in the world. That is one reason the noble Lord, Lord Purvis, was right to point to the International Aid Transparency Initiative’s rating of DfID as world-class and world-leading in the way that it does aid. We have nothing to fear from transparency because that is part of the way we learn and gather information about this. I direct noble Lords to the website “devtracker”. It is a bit of a catchy name, but the Development Tracker is an incredible resource, enabling you to see exactly, in real time, what is actually happening on which programmes and who is delivering them. You can read the independent evaluation reports carried out and see how much money has been paid—as I say, in real time. These are ground-breaking methods of transparency that are recognised internationally. Of course, then we have our own quality assurance, and that has been added to a whole new—

[Lord Purvis of Tweed]

I do not wish to interrupt the Minister’s flow, but he has quite substantially moved on from the area of the DAC and OECD. With the greatest respect, I was waiting for him to answer the point that a number of noble Lords across the Chamber asked about the line in his party’s manifesto that, if there were no agreement within the OECD and DAC, the Government would propose unilateral action and bring forward legislation to change the criteria for ODA in the UK. All of us asked him to reflect on that and perhaps move away from it, especially in the context that he no longer has a majority in either House. This would be a good example of listening to a great deal of concern that moving unilaterally would not be in the best interests of the UK in this area.

[Lord Bates]

I do not want to parallel or parody debates taking place on other aspects of government policy and exiting the European Union, but I can assure the noble Lord that we have no red lines. We are still developing what the issues are that we would like to address. We began that process talking to the NGOs. I would like to continue by talking to Members of your Lordships’ House about what the issues are, citing some of the problems and talking it through with officials. Of course, then we need to present that to colleagues. So it is not a firm, baked plan, which we are demanding or otherwise we will go out on our own. We have said we are quite determined that there are some issues that need to be addressed and we want to share that with people and work together in a consensual way.

Returning to the point about examination and monitoring, of course we have our own internal quality assurance. We also have the National Audit Office. We have the Independent Commission for Aid Impact, which has been cited. The noble Baroness, Lady Sheehan, asked about the CSSF. That was one of the ICAI reports that the noble Earl, Lord Sandwich, referred to, where that scrutiny is beginning to happen. There is also the International Development Committee in the other place, of which the noble Lord, Lord Bruce, was a distinguished chair for 10 years. Again, we have a very good working relationship with that committee. It is rigorous, but there is a partnership because we all want the same thing—namely, to eradicate extreme poverty.

Then we have the sustainable development goals, which a number of noble Lords, including the noble Lord, Lord Collins, and my noble friends Lady Verma and Lady Jenkin, referred to. They are going to introduce a whole new level of scrutiny. Again, it comes back to the point about the Development Assistance Committee. Forty years ago, we did not have the millennium development goals, never mind the sustainable development goals. Now we have these new goals that introduce whole new categories—such as beneath the ocean or peace and conflict, which the noble Lord, Lord Alderdice, referred to—that we need to work on.

I was asked what the Government are doing in respect of the SDGs. We published our Agenda 2030 in March. That was the cross-government response to that. The Office for National Statistics has announced a consultation looking at the best way of producing data and statistics in these matters so that we can track our progress towards the SDG aims. It has some very important elements in it. The noble Baroness, Lady Warwick, was concerned about how those data might be connected. There is a huge new initiative taking place across the UN institutions about collecting data, particularly on the sustainable development goals—what actually works and how it should operate. That is being done by the UN Statistical Commission. We have representation on that and we will follow that, and publish routinely and regularly, in accordance with the requirements of the SDGs, how we are progressing. We will also be able to see online how other countries are progressing towards them. I think this is going to be a major step forward—to reassure the noble Baroness, Lady D’Souza, among others—because once we see countries’ own self-assessment of where they are lagging behind and where they are progressing, we will have an additional level of data to help us ensure that our resources are directed to those who are in greatest need.

The noble Lord, Lord Bruce, also asked why BEIS is the second-highest ODA spender. Of course, that is because the primary objective of BEIS ODA is research and innovation—to reduce poverty by generating and putting into use knowledge and technology to address development challenges and advance development for the poorest in the world. The noble Baroness, Lady Warwick, gave the example of King’s College working in partnership with the Government of Sierra Leone on Ebola. What has been achieved through this, and more widely through development, is incredible, but we still have a long way to go. We have rigorous ways of monitoring the impact and communicating the achievements.

I know that at this point the noble Lord, Lord Judd, will be flinching in his seat, but I ask him to bear with me on impact because it is leading to the subject of effectiveness. We can see that development aid is changing the lives of the world’s poorest. Just today we read about the outbreak of cholera in Yemen, and there is the World Health Organization with 1 million cholera vaccines, desperately trying to get safe access. It is true that you cannot separate the security elements from the humanitarian need in this respect. The noble Lord, Lord McConnell, referred to this as well. Without the security elements, we will not be able to get those vaccines to those who need them.

Just last week, I returned from South Sudan. I was delighted to hear the analysis and the experiences of the right reverend Prelate the Bishop of Truro. I saw the terrible situation there. Were it not for the World Food Programme and DfID’s contribution to that, 1.6 million people who are relying on airdrops of food, through a completely man-made conflict—this is not to do with climate change but entirely to do with the civil war which is raging on the ground—would have their lives put at risk. Therefore, to say that you can somehow separate the security dimension from the humanitarian dimension is not correct.

I will speak about other government departments. The noble Lord, Lord McConnell, referred to the Building Stability Overseas Strategy. Of course, we now have the UK aid strategy—Command Paper 9163—produced in 2015. I do not want to quote extensively from it but that is our new marching point for this and includes significant elements on how we are going to work with global peace, security and governance. I commend it to noble Lords. It says:

“All departments spending ODA will be required to put in place a clear plan to ensure that their programme design, quality assurance, approval, contracting and procurement, monitoring, reporting and evaluation processes represent international best practice”.


It is also right and absolutely fair to say that other government departments are not quite at the level of DfID at the moment. We do not want to crow too much about that because they have not been doing it for as long. My noble friend Lady Chalker is in her place. There is a long tradition and expertise in that area in government, which we want to retain. But that cannot be any reason not to aspire to the highest standards. We have said that we want all government departments that are delivering ODA to be rated either good or very good within five years. An ODA senior officials’ group now meets regularly across government to ensure that lessons are learned and we can assist other government departments in doing that.

The noble Lord, Lord Bruce, mentioned disability. Again, this is part of the SDGs and leaving no one behind, which is a key part of what we are doing. Looking again at our disability strategy is also something that the Secretary of State, Priti Patel, has made a personal passion of. We will be putting additional resources towards that.

The noble Baroness, Lady D’Souza, and the noble Lord, Lord Alderdice, mentioned small grants. I covered this subject in the exchanges in Questions about the small charities challenge fund.

The right reverend Prelate also spoke about what churches could be doing in this area. I will be meeting him tomorrow. Again, I turn to the example of South Sudan. When I was in South Sudan, I met Archbishop Deng—a very gracious man—the Archbishop of South Sudan and Sudan. There are 100,000 churches in South Sudan. What an incredible network that we could be using for peace and reconciliation. I also met Bishop Anthony Poggo, who I am sure is well known to the right reverend Prelate.

The noble Lord, Lord McConnell, mentioned the catalytic impact of private sector investment and the £2.5 trillion gap in private financing. We need to get much more private capital in there. Governments cannot do this alone through ODA. It needs to be through trade, private investment and, increasingly, government assistance providing a catalytic role in that.

Without doubt, UK aid is making a significant contribution to tackling the global challenges of our time. The Government agree wholeheartedly on the importance of measuring its impact so we can fully understand and continue to improve on the very significant contribution the UK is making to the world’s poorest, to stability and prosperity here and to eliminating extreme poverty by 2030. I look forward to continuing these discussions as weeks go on.

United Nations Sustainable Development Goals

Lord Bates Excerpts

Wednesday 26th April 2017 Lords Chamber

[Lord McConnell of Glenscorrodale]

To ask Her Majesty’s Government what action they plan to take to deliver the United Nations Global Goals for Sustainable Development by 2030.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, the Government are firmly committed to delivering the global goals, both at home and internationally. Our public report, Agenda 2030, of 28 March this year outlines our approach and provides examples of how we are contributing to the global goals.

[Lord McConnell of Glenscorrodale (Lab)]

My Lords, the UK and indeed this Government led internationally on the establishment of the global goals, and in particular on the fact that they should be universal and that their implementation should be monitored with accurate, up-to-date data. It is therefore disturbing that today’s report by the House of Commons Environmental Audit Committee highlights that there is a suggestion that the Government will stop the Office for National Statistics establishing the data on which the implementation could be measured inside the United Kingdom. Will the Minister assure us that that is not the case and that the UK will continue to show global leadership, both abroad and at home, and practise what we preach?

[Lord Bates]

First, I pay tribute to the work of the noble Lord in his chairmanship of the all-party parliamentary group on the SDGs. Certainly, he is right to acknowledge that we have been at the forefront of the negotiating of the global goals and that we will be at the forefront of their implementation. On his specific point about data, we have passed that across to the Office for National Statistics. There are 17 goals and 240 measures. It is quite a big task to undertake. The ONS has come up with a consultation document. Initially it was delayed from October to 9 May; that was its own decision. Now, unfortunately, that 9 May announcement has been delayed by the purdah rules of the general election, so I would expect it go ahead soon after. It is very important that civil society organisations and business groups participate in that because, as the noble Lord suggests, data will be critical to ensuring that the goals are monitored and delivered.

[Baroness Sheehan (LD)]

My Lords, SDG 16 commits the Government to tackling illicit financial flows, which lose developing countries an estimated $100 billion a year. That is why it is all the more disappointing that the Government have blocked any talk of transparency in our overseas territories as part of the Criminal Finances Bill. Following the Panama papers leak, does the Minister agree with me that the Government must get a grip and set up public central registers of beneficial ownership, ensuring the same transparency in our overseas territories as we have in the UK?

[Lord Bates]

I do not know whether the noble Baroness was present last night, as I was, when we had the debate on this issue. The Government brought forward an amendment which commanded the support of this House—including the Liberal Democrat spokesman. I am sure that the noble Baroness will be very happy to speak with her colleague about that if she has any disagreement.

[Lord Alton of Liverpool (CB)]

My Lords, does the Minister agree that one of the things that jeopardises sustainable development is a combination of conflict, where there is the need to bring conflict resolution, and corruption? In the light of the Government’s welcome announcement that they will sustain development programmes and funding for development overseas, will he tell us what priority a new Government are likely to give to combating conflict in situations such as South Sudan, where famine has come as a direct result of it, and dealing with corruption, where aid money can be embezzled and misused?

[Lord Bates]

The noble Lord is absolutely right. We have said that the 0.7% commitment stands, but we are also absolutely resolute that there needs to be reform of the international aid system to ensure that that hard-earned money, provided by British taxpayers and other taxpayers from around the world, gets to where it is most intended. That is why we are behind arguing for global goal 16 on peace and security—because, without peace and security, there can be no development or growth. That is also why we have committed the large sum of money—£100 million—to South Sudan and to the other areas which are touched by famine at present.

[Lord Collins of Highbury (Lab)]

The Minister mentioned the recent DfID report setting out the priorities, which gave examples of all the targets and goals. I am really disappointed that, on goal 8, “Decent work”, and goal 10, “Reduced inequalities”, no mention is made of civil society. In particular, no mention is made of trade unions, nor the work of the ILO in addressing the appalling labour standards in our supply chain. Can the Minister explain this omission?

[Lord Bates]

I can—or will certainly attempt to. What is happening with the SDGs is that they not only apply internationally—we are bound to them internationally as collective goals; 193 nations signed up to them—but are very much targeted at what we will do domestically to implement them. One recognition we made through that on goal 8, which is crucially important, is that employment is now at record levels in the UK. It is at the highest level since records began in 1971. One thing we are saying is that that is a good example of where UK labour market reforms have brought about changes that can increase growth and achieve the target of global goal 8, to which the noble Lord referred.

[The Lord Bishop of Southwark]

My Lords, like the noble Lord, Lord Alton, I welcome the Prime Minister’s pledge to maintain the commitment of 0.7% of GDP for overseas aid. But I would be glad to know the Minister’s views on the usefulness of targeting aid in support of the goals not solely through large organisations but through more local partners such as those highlighted in the West Bank and Gaza by the right reverend Prelate the Bishop of Leeds on 21 March.

[Lord Bates]

We are absolutely of the opinion that we should work closely with civil society organisations and that we are part of a global partnership to leave no one behind, which applies and cuts across all the goals. We will engage with local partners, who are in the best position to deliver the improvements and the targets that we seek on the ground. We will continue to do that and I know that many religious organisations, including church organisations, also have a crucial role to play in that around the Middle East and in Africa.

[Lord Foulkes of Cumnock (Lab)]

My Lords, some of us are a little more sceptical about what the Prime Minister said about the 0.7%. Can the Minister clarify whether that 0.7% will be spent according to ODA principles by a separate department that is not linked to any other department in Whitehall?

[Lord Bates]

The 0.7% was a commitment made in 1970 and it was first brought in under a Conservative-led Government—and it has been sustained under a Conservative Government. What we have said is that the 0.7% commitment was never in doubt and will remain continuously. But we are absolutely committed to saying that we want to look very carefully at where and how that money is spent, to ensure that every single penny given goes to the people who are most in need. That is our commitment and we will stand by it.

[Lord Low of Dalston (CB)]

My Lords—

Brexit: United Kingdom-Africa Trade and Development

Lord Bates Excerpts

Tuesday 25th April 2017 Lords Chamber

[Lord Oates]

To ask Her Majesty’s Government what measures they intend to take to promote United Kingdom–Africa trade and development co-operation in the transitional and post-Brexit periods.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, unlocking barriers to trade to reduce poverty is an important part of our economic development strategy. As we leave the EU, our priority is to ensure that we do not disrupt vital trading relationships, including with our African partners.

[Lord Oates (LD)]

I thank the Minister for his reply. I hope he is aware of the Africa All-Party Group’s report on UK-Africa trade, which underlines the potentially damaging impact of Brexit on African economies. Will the Government consider carefully the report’s recommendations, in particular the need to prioritise a transitional regime to maintain preferential, non-reciprocal market access to the UK for those African economies?

[Lord Bates]

I thank the noble Lord for his Question, but I do not accept his pessimistic outlook. We have said that the economic partnership agreements we have in place through the EU are working well and we want them to continue. We set that out in the exiting the EU White Paper. Our intention is to have other measures in place by the time that exiting happens. The great benefit of this is that we will not be bound or limited to the trade preferences currently through the EU. We can have a broad new arrangement that will benefit African countries as well as our own.

[Baroness Royall of Blaisdon (Lab)]

My Lords, I am glad that the Prime Minister has made clear her commitment to the 0.7% figure. That is terribly important. As the House will be aware, while there is global growth, poverty is growing in Africa, where there is increasing inequality. What are the Government doing to ensure that trade and development policies are inclusive and pro-poor? Will the noble Lord agree that, as we step up our trade relationships, we must ensure that they enhance sustainable and inclusive development?

[Lord Bates]

That is right. All those points were made by the Secretary of State when she launched the economic development strategy in Ethiopia in January. We have taken this matter forward seriously. No country has ever successfully defeated poverty without economic development and economic growth. We want to be at the forefront of ensuring not only that there is FDI but that those countries can have access to our markets on the most preferential terms.

[Lord Hannay of Chiswick (CB)]

My Lords, does the Minister recognise that the relationship with the African, Caribbean and Pacific countries which we have as a member of the EU covers a lot more than just trade and aid? It also covers guaranteeing the export receipts from primary materials and sugar. What plans do the Government have to look after those aspects when we have left the European Union?

[Lord Bates]

Those are all important points, as the noble Lord will know, which is why we want to make sure that arrangements relating to all matters covered by the EPAs continue not just until the point at which we leave but beyond. We want also to take the opportunity to discuss with our bilateral partners in Africa, the Caribbean and elsewhere how we can improve on the current arrangements so that they might work better for those in poor countries.

[Viscount Ridley (Con)]

My Lords, further to the point that my noble friend the Minister has just made, can he confirm that African exporters to Britain face the high EU external tariff and that, after Brexit, there will an opportunity to review that and therefore to increase trade between the UK and Africa?

[Lord Bates]

My noble friend is right to raise that point. The lowest-income countries are able to come in duty free and tariff free under the Everything but Arms agreement, but there is more to be done on the middle-income countries. There is now more flexibility: we are leaving the EU, but we are still embracing the world. We want to put free trade at the heart of everything that we do—that has been set out clearly. The opportunity for free trade to lift ever more people out of poverty around the world is something that we will grasp with full measure.

[The Lord Bishop of Southwark]

The Minister may know that I am a regular visitor to Zimbabwe, where my diocese has links with four of the five Anglican dioceses there. How do Her Majesty’s Government propose to respond to the preponderance of Chinese investment both there and in other African nations, both in infrastructure and major economic undertakings?

[Lord Bates]

I do not think that we see investment in Africa by any country as a problem. We see a significant gap in finance and investment, which Africa needs. The gap to meet the global goals is some $2.5 trillion per year whereas aid flows amount to only some $150 billion. The gap has to be filled by private investors. We welcome them from wherever they come. As the right reverend Prelate will know, we are certainly playing our part in Zimbabwe to encourage investment and to identify investment opportunities in both directions.

[Lord Chidgey (LD)]

My Lords, in January this year, Dr Rob Davies, the South Africa Minister of Trade and Industry, reminded the Government that the United Kingdom is the major destination among EU nations for South African investment. It invests more here than in any other EU country. The UK also accounts for 20% of South Africa’s wine exports and 30% of its fruit exports under the current EU economic partnership agreements. What specific actions are the Government taking to allay South African concerns and to maintain the strength of what is a key strategic market post Brexit, when the UK will be excluded from some of those treaties?

[Lord Bates]

That conversation happened when Liam Fox, the Secretary of State for International Trade, was in South Africa talking about how we could enhance trade co-operation between our two countries. It is important that we do that. We also need to see Africa as a tremendous opportunity—I know that the noble Lord shares my view on this. Africa will be a market of some $30 trillion by 2050 and will have a middle class the size of Europe. It is in our enlightened self-interest to build those strong links and maintain free trade.

[Lord Lea of Crondall (Lab)]

Does the noble Lord accept that the elephant in the room in this debate is a country called China? China is growing very fast in Africa and says quite explicitly that it thinks it very important that the main Chinese relationship will be with the EU. Instead of saying that everything in the garden will be lovely, would not the Minister find it more useful to think how the constructive relationship with EU countries and the EU as such will continue?

[Lord Bates]

I totally agree but refer to the point I made before that the problem in the crisis we face at the moment, particularly in sub-Saharan Africa, is a shortage of investment rather than too much. All the investments made by other countries and private investors are of course a matter between that particular country and the investor making those decisions. We do not want to get in the middle of that. We want to encourage as much investment as possible in that area so that growth can happen.

[Lord Collins of Highbury (Lab)]

My Lords, the key to what the noble Lord said is that there are opportunities here but principles must govern them. The most important principle is a pro-poor and pro-development policy. Can the Minister assure the House that his department will be heavily involved in future trade negotiations with Africa? I do not have confidence in the Minister responsible for international trade to carry through those principles.

[Lord Bates]

That is the reason we set up a cross-government programme including the prosperity fund to build economic trade and development. It is why we hosted the Commonwealth Trade Ministers’ meeting here last year. It is the reason the Secretary of State for International Trade is travelling round the world with his other Ministers, trying to put in place the groundwork for these trade agreements in future. We all recognise that free, unfettered trade is one of the best routes out of poverty ever known and we need to do more to encourage it so that people get the opportunity to come off aid dependency and into a self-sustaining economic future.

[Baroness Hayman (CB)]

My Lords, today is World Malaria Day. I do not expect the Minister to have read and digested the report published today, Global Britain and Ending Malaria: The Bottom Line, compiled by Malaria No More and Ernst & Young, but it sets out that malaria costs this country £765 million in lost trade opportunities with the most affected countries. Does he agree that investment in malaria control not only saves lives and improves the economies of the affected countries but is a major benefit to this country in terms of life sciences investment and boosting British trade?

[Lord Bates]

I am very happy to do that on World Malaria Day. I have not seen that particular report but the World Health Organization’s annual report, published in December, pointed to the fact that malaria-related deaths have reduced by some 60%, which means about 6 million lives have been saved as a result. That was why the Secretary of State announced in September that we will invest a further £1.1 billion in the global fund to tackle AIDS, TB and malaria, which is another demonstration of this Government’s commitment to the poor.

Neglected Tropical Diseases

Lord Bates Excerpts

Monday 3rd April 2017 Lords Chamber

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, this has been an excellent debate, with 14 contributions. At the last minute, those were allowed to increase from two to five minutes; I am reliably informed by the Whips that my contribution cannot increase in the same proportion, and therefore I am limited to 12 minutes. There are a number of important issues to cover, but if I can, I will go through this at some pace.

Like the noble Lord, Lord Collins, I can trace the antecedents of raising these issues back a number of years—not quite back to 2013, but to 6 February 2014, when I responded from the Front Bench to the debate in the name of the noble Baroness, Lady Hayman, on this issue. The noble Lord, Rea, is right to say that the noble Baroness, Lady Hayman, deserves a great tribute for ensuring that neglected tropical diseases are not neglected in your Lordships’ House. We thank her for that and commend the work of the very active APPG on Malaria and NTDs, of which she is vice-chair.

NTDs affect 1.6 billion of the world’s poorest people, as the noble Baronesses, Lady Hayman and Lady Northover, reminded us, and they result in disability and have a tremendous impact on people. They cause a great economic burden for people, as the noble Baroness, Lady Sheehan, reminded us, as well as creating stigma and hardship, which were also mentioned.

Reference was made by the noble Baronesses, Lady Hayman and Lady Warwick, and the right reverend Prelate the Bishop of St Albans to the progress that has been made. The number of people at risk from NTDs fell from 2 billion in 2010 to 1.6 billion in 2015. In the 1950s, before programmes started, one in four people over the age of 40 went blind from river blindness in some of the highest endemic areas. Blindness caused in this way has now been virtually eradicated.

The noble Baroness, Lady Northover, who served as a Minister in the department during the coalition Government, reminded us of the visit to the House of Lords by President Carter, who spoke in the Robing Room—an event that I, too, attended. He spoke about Guinea worm eradication. Only three countries reported a total of 25 cases of guinea worm disease in 2016—down from 3 million cases a year when the programme started in 1986. This is well on the way towards the target that has been set and shows what can be achieved in this area.

A number of noble Lords referred to the high-profile London declaration event in 2012, when the UK committed an additional £195 million to tackle these diseases. The UK, along with the US, is a world leader on NTDs. We are meeting our commitments. The UK supports high-performing programmes tackling a range of NTDs, and these programmes are delivering results. DfID programmes delivered more than 136 million treatments for NTDs in 2016. We have supported over 60,000 surgeries to prevent blindness due to trachoma, and over half a million people have been screened for kala-azar, a disease that is invariably fatal if not treated.

Much of our support for the implementation of NTD programmes is through our world-class British institutions. The noble Lords, Lord Stone and Lord Alton, referred to many of these, particularly the Liverpool School of Tropical Medicine, and I pay tribute to the expertise that is to be found there. I am delighted to accept the invitation from the noble Lord, Lord Stone, to meet the SCI group at Imperial and would be very interested to find out more about its work.

Many noble Lords, including the noble Baronesses, Lady Warwick and Lady Barker, referred to the importance of research. This is at the heart of what we do. DfID is committed to spending approximately 3% of its annual budget on research, and of course that also impacts on the NTD process. We also support research into new drugs, diagnostics and better vector control, as well as operational research into the best ways to implement programmes. I very much recognise the point made on vectors by the noble Baroness, Lady Barker, as I do the very important point about prevention made by the noble Baroness, Lady Sheehan. The UK Government have a strong track record of supporting successful product development research through public-private product development partnerships, such as the Drugs for Neglected Diseases initiative and the Foundation for Innovative New Diagnostics.

Tackling NTDs is highly cost effective, as the noble Lord, Lord Stone, reminded us. The average cost of treating one person for a range of commonly occurring NTDs is about 50 US cents. The noble Lord, Lord Alton, described it as a “best buy”, which it very much is. NTDs are an excellent example of a unique public-private partnership: most of the medicines are donated by pharmaceutical companies, which have pledged drugs valued at $17 billion between 2014 and 2020—a point made by the noble Baroness, Lady Masham. Without this very generous support there would be far less progress and considerably higher costs.

A number of noble Lords referred to the London declaration. I am pleased to report that there will be a very high level of representation at the event taking place on 19 April. I do not in any way want to undermine the importance of NTDs, but when we discussed this as a ministerial team, we realised that so many important meetings are taking place this very month: this week on Syria, and in a couple of weeks’ time on Yemen and the wider humanitarian crisis in Africa. However, I will certainly convey to the department and the Secretary of State the importance that your Lordships attach to this initiative and the gathering that will occur on 19 April.

The noble Baroness, Lady Barker, referred to the interconnectivity of scientific research with the attempts we are making. That is a point I recall being made by David Nabarro, who is a very strong candidate to be the next director-general of the World Health Organization.

The noble Lord, Lord Rea, the noble Baroness, Lady Sheehan, and my noble friend Lady Chalker raised the importance of WASH. This very much links to what the noble Baroness, Lady Sheehan, said about prevention. WASH is the best form of prevention that we know for NTDs. There is strong cross-sectoral working on this, in particular on increasing access to water and sanitation. My noble friend asked what commitment we have made in this area. We have a very strong manifesto commitment to increase clean water access to 60 million people during the lifetime of this Parliament, which is sustainable development goal 6. That is a major programme which we are working on.

My noble friend also raised the importance of engineers. I am delighted that through the Commonwealth Scholarship Commission we are giving access to many students from sub-Saharan Africa to come and study at our world-class universities and take that expertise back with them.

The noble Viscount, Lord Simon, raised the importance of co-infections. He particularly focused on malaria. The noble Baroness, Lady Masham, referred to TB, and the noble Lord, Lord Collins, referred to collaboration on HIV-TB. We fully understand and stress that these are all very important areas.

A key element is the availability of good quality data and the disaggregation of those data in connection with the SDGs. We want to ensure that programmes collect and analyse data on how we are making progress against targets and disaggregate those data to ensure that we are reaching girls, women and other vulnerable groups—an issue that the noble Lord, Lord Collins, asked us to work on.

The right reverend Prelate the Bishop of St Albans raised the strong partnerships that we have with faith groups. Through our faith partnerships we work very closely with those groups in a number of parts of the world. He talked about Sierra Leone and, in the past week, I have been looking at what the Anglican community is doing in the terrible situation in South Sudan, where the conflict is making the treatment of neglected tropical diseases and the effects of famine incredibly difficult. That is a real manmade tragedy.

We are making efforts to work with other donors, in particular USAID. I take the important points that were made about the USA, with which we are working very closely. The draft budget was prepared by the President and will be turned into a formal budget to be announced in May. It then, of course, has to work its way through Congress. We are looking very closely at his nominee for USAID. The United States, through its private foundations and as a Government, has played a critical role in this and I very much hope we will be able to work with it in the future in delivering this absolute best-buy for development investment.

Our efforts to map the NTDs have helped to determine the geographical distribution of diseases, a point made by the noble Lord, Lord Alton, so that we can target resources where they are most needed. We are now expanding access to treatment. As countries are now able to stop mass drug administration for some diseases, it will be critical to carry out the surveillance necessary to ascertain progress and to ensure that low infection levels are sustained. However, we must not forget that while some countries are reaching that stage, others are only just starting in their efforts to tackle NTDs.

On this point I echo the urging of the noble Baroness, Lady Hayman, in introducing the debate, that there is no question of us regarding this as “steady as she goes” or, in the phrase of the noble Baroness, Lady Barker, taking our foot off the pedal. This is absolutely essential to the sustainable development goals. It is a treatment programme that works and we want it to continue.

The noble Lord, Lord Rea, the right reverend Prelate the Bishop of Peterborough, and the noble Baronesses, Lady Northover and Lady Masham, asked what progress was being made on leprosy. According to the World Health Organization, there were over 210,000 new cases of leprosy reported in 2015. We need to increase progress. In 2016, the World Health Organization launched a global leprosy strategy for 2016-20 and UK aid match is supporting work to improve the lives of people affected by leprosy and other NTDs in Mozambique and other countries.

At the conclusion of my remarks I come back to that very important summit. While the UK across a number of levels—from our great research base to the work that many people have been doing through medical science in this area—is advancing the cause and has made great progress, it is vitally important that we use the occasion and the platform of the World Health Organization joint summit on NTDs on 19 April to ensure that other donors come forward and meet their responsibilities towards eradicating these diseases and meeting the sustainable development goals in these areas.

As to the consequential nature of the SDGs, I have been ticking them off and I think we have covered all 17 of the goals, from partnerships, to conflict in number 16, to eradicating poverty in number 1, to education in number 4, to gender equality in number 5. It is a real point of endorsement as to how the SDGs are rightly a lens through which we judge our progress on this.

I again thank all noble Lords who have contributed to the debate. I shall reflect further on it and feed the messages back to my colleagues at the department as we move forward.

House adjourned at 8.22 pm.

East Jerusalem: Access to Emergency Care

Lord Bates Excerpts

Tuesday 28th March 2017 Lords Chamber

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, the Palestine Red Crescent Society reported in 2015 that 84% of transfers from West Bank to East Jerusalem hospitals underwent back-to-back transfers. The UK has consistently called on the Israeli Government to ease restrictions that reduce access to medical care for Palestinians.

[Baroness Sheehan (LD)]

I thank the Minister for his reply. A number of noble Lords have asked me about back-to-back ambulance transfers. Basically, when somebody in the West Bank is critically ill—it is an emergency case—there are no tertiary hospitals in the West Bank and the referral is made to one in East Jerusalem, which is on the other side of the barrier. So the person will get into an ambulance in the West Bank but then be made to get out at the checkpoint and either be wheeled or have to walk through, regardless of whether he is having a heart attack or she is in a difficult labour. They will then have, on average, a 27-minute wait at the checkpoint, before transferring to an ambulance on the Israeli side to be taken, finally, to the hospital. This is an enormous barrier to the coexistence funding programme that DfID has announced to ensure better outcomes for Palestinians needing emergency care. Will the Minister confirm that he will make the strongest possible representations to his counterparts?

[Lord Bates]

We will certainly continue to make our representations. More importantly, we fund the UN Access Coordination Unit, which helps in this area. We agree that the waiting times are unacceptable. Of course, the long-term solution lies in the resumption of peace talks.

[Lord Polak (Con)]

My Lords, does my noble friend the Minister agree that the first responsibility of a Government is to protect their citizens? Sadly, ambulances have been used by terrorists a number of times in the region. As we understand only too well, difficult decisions have to be made. Is my noble friend also aware that in 2015 more than 190,000 Palestinians entered Israel from the West Bank to receive medical treatment in Israeli hospitals?

[Lord Bates]

That latter point is well worth underscoring, but it does not take away from the distress that is caused to people who have to transfer from ambulance to ambulance at the border, with these three distinct medical areas: the West Bank, Gaza and East Jerusalem. We think there is a way forward. If the same spirit that has been shown in the offer of medical services by the State of Israel could be addressed to this issue, I am sure that a way could be found.

[Baroness Deech (CB)]

Does the Minister agree with me that Israel deserves praise for organising a system of volunteers who help the injured people in the ambulances get to Israeli hospitals? Moreover, those hospitals are treating thousands of injured Syrians. They deserve praise for ensuring that there is a safe haven at least somewhere in the Middle East for wounded Syrians.

--- Later in debate ---

[Lord Bates]

A tremendous amount of work is going on with Syrians, not least that which DfID is supporting through its work with the UNRWA. We support 22 clinics which are providing essential medical treatment. This situation, in any circumstance, cannot be justified, but it needs to be resolved in a peaceful, constructive way which recognises the legitimate security concerns of the State of Israel.

[Lord Anderson of Swansea (Lab)]

Of course it is distressing and the people of the West Bank and Gaza deserve the very best medical treatment, but will the Minister confirm the point that has already been made—that on many occasions in the recent past, ambulances have been used to convey terrorists and explosives for use in Israel?

[Lord Bates]

We recognise that and of course we acknowledge the absolute right of the State of Israel to defend itself against terrorist attacks. We believe that with good will on both sides, it will be possible to come to a situation where innocent patients are not ending up as the victims of terrorist activities being perpetrated in Gaza or elsewhere.

[The Lord Bishop of Winchester]

My Lords, we have heard how the people of the Occupied Territories continue to face challenges accessing emergency care. The diocese of Jerusalem provides hospitals and health centres across this area, but many of the vital facilities and services are not fully operational because the equipment cannot be calibrated and staff lack accreditation. What conversations have Her Majesty’s Government had with the Israeli Government to facilitate the necessary inspections to ensure that these and similar facilities become operational and therefore reduce the reliance of Palestinian people on reaching hospitals in East Jerusalem?

[Lord Bates]

We tend to raise these issues whenever we meet officials. My colleague Rory Stewart was in the Occupied Territories last weekend. It is a constant issue that we raise with them. We think there are legitimate concerns about the use of some materials, but we believe that there is a way forward on this to make sure that innocent people do not suffer.

[Lord Collins of Highbury (Lab)]

My Lords, DfID provides substantial budget support to the Palestinian Authority. Picking up the point made by the right reverend Prelate, when giving that budget support, how much pressure does DfID put on the Palestinian Authority to ensure that money is spent properly on medical care and hospitals?

[Lord Bates]

The noble Lord makes a valid point. The Secretary of State has taken a leading role in this by changing the way in which we do that. The £25 million that we provide to the Palestinian Authority now needs to go to vetted individuals for specific programmes that have been announced. We work with our EU partners through the PEGASE arrangement to ensure that it ends up in the right hands, but more could be done, and I am happy to undertake to make those representations to ensure that it happens.

[Lord Wallace of Saltaire (LD)]

In situations like this Palestinian, Israeli and international non-governmental organisations play a very important role. Is DfID satisfied that the Israeli Government make life sufficiently easy for non-governmental organisations to play a role in assisting Palestinian healthcare and other areas like that?

[Lord Bates]

We would like to see more. We do not think that the NGO Bill which is currently before the Knesset goes down that route. We think we need to do more.

East Africa: Famine

Lord Bates Excerpts

Thursday 23rd March 2017 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as a trustee of the Disasters Emergency Committee.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, the scale of the humanitarian crises facing the world in 2017 is unprecedented. The UK is leading the way on the response, stepping up life-saving emergency assistance for those affected by food insecurity in east Africa, and calling on the international community to urgently step up its support before it is too late.

[Baroness Hayman]

My Lords, I thank the Minister for that reply and for the work that his department is doing. The humanitarian crisis in east Africa is, as the Minister said, of horrifying proportions, with 16 million people on the brink of starvation and cholera a growing threat. But lives are being saved as we speak thanks to the work of British humanitarian agencies on the ground in east Africa, funded by the £30 million that has been raised already in the DEC appeal. Will the Minister join me in acknowledging the generosity of the British public, who always respond very generously to appeals like this? The theme of the DEC appeal is “Don’t delay, donate”. Does the Minister agree that that is a message not only for individuals—who might think about their winter fuel payment, in fact—but for Governments? Will Her Majesty’s Government agree to continue to urge other nations to replicate the generosity that the UK has shown and to keep the UK contribution under review?

[Lord Bates]

I am very happy to do that. I also pay tribute to the work of the Disasters Emergency Committee in this instance. The immediate response to the crisis and the generosity of the British people in raising £20 million, which was then aid matched by DfID, is typical of the character of the British people, to which the most reverend Primate referred earlier, and their humanitarian concern for their neighbours. That commitment is there and is being built upon by the £100 million that has been announced for South Sudan and Somalia. We are keeping those numbers constantly under review because the situation is at crisis point.

[Baroness McIntosh of Pickering (Con)]

Will my noble friend look closely at the work that Nestlé and other multinational companies have been doing in countries such as South Africa? Will he inform the House of what we believe to be the underlying causes of the famine and whether we can use technical assistance from companies in this country to improve irrigation in east Africa to enable it to secure its crops against future droughts and floods?

[Lord Bates]

Certainly, part of the cause is the drought that is affecting many countries because of the record level of the El Niño effect in the region. However, overwhelmingly this is a man-made crisis; this is because of conflict. If it was not for the conflict we would be able to reach people in the same way we are able to reach people in Ethiopia and Kenya. It is the fighting and insecurity in South Sudan, Yemen, north-east Nigeria and Somalia that are causing the difficulty, and people are dying as a result. The fighting has to stop.

[Lord McConnell of Glenscorrodale (Lab)]

My Lords, the Disasters Emergency Committee has done a fantastic job over recent years in focusing the attention of the British public on particular crises as they happen. However, one of the knock-on effects of that focus can be to reduce the donations going to other humanitarian problems, in some cases happening nearby. North-east Nigeria, mentioned by the Minister, may be a case in point. It is not covered by this appeal but the situation there is desperate at the moment. Can we be reassured that the Government will do what they can in the international arena to ensure that the global community, while perhaps focusing for the moment on east Africa, do not forget the other humanitarian problems close by, and ensure a balanced approach over time to make sure that even more lives are saved?

[Lord Bates]

I can give that assurance; the noble Lord is absolutely right. As the noble Baroness, Lady Hayman, will recognise, there is great thought and soul searching about whether to launch a second appeal on the back of Yemen so soon—normally there is a one a year. This reflects the fact that the situation is extraordinary. Stephen O’Brien referred to the situation in 2017 as being the greatest humanitarian challenge that the United Nations has ever faced. These are huge issues when Syria is included, and our response has to be there. There also has to be a recognition of the wider response needed in Nigeria.

[Lord Collins of Highbury (Lab)]

My Lords, the UN estimates that £4.5 billion is needed to address urgent needs, but only 2% of that is in the pipeline. The noble Lord mentioned the need to mobilise the international community. He also responded to my noble friend a few weeks ago about taking up the idea of working within the European Union. Surely the time is now for the G7, the G20 and the World Bank to convene an urgent financial summit. Will the Minister commit the Government to making that call?

[Lord Bates]

I have taken my opportunity to do so. I was grateful to the noble Lord, Lord Foulkes, for his excellent suggestion. I attended the EU Foreign Affairs Council for Development last week and made exactly those points and the plea. The Secretary of State also wrote to High Representative Mogherini on the same issue. Later today, the Foreign Secretary will be chairing the Security Council on this issue at about 8 pm GMT. That will be an opportunity to reinforce the need for the international community to do more—and do it quickly.

[Baroness Sheehan (LD)]

My Lords, I commend the Government on their high-profile response to the famine in east Africa, which has helped to galvanise not just public support but support among the international community. DfID’s hunger safety net programme in Kenya provides small, regular cash transfers through secure biometric systems and has been shown to be very effective in reducing extreme hunger. Notwithstanding attacks from the Daily Mail, are there plans to extend this proven programme to other countries in east Africa—and if not, why not?

[Lord Bates]

Certainly this is a tool that has been used to get relief to the people who need it most, but often there is a scarcity of food supplies. To come back to insecurity, when there are terrorist organisations, conflicts and civil wars, sometimes just handing out cash to individuals fuels the conflict because the money finds its way to the terrorist organisations. We need to be extremely careful in these areas that we provide relief to those who need it and not resources to those who are causing the conflict.