Health Systems (Developing Countries)

Debate between Lord Bruce of Bennachie and Anas Sarwar

Thursday 11th December 2014 Westminster Hall

[Anas Sarwar]

I thank the Minister for that helpful intervention. In the spirit of transparency, and to ensure that we do not darken the name of any Government and that we have the strong trust of the people on every penny spent by the UK Government and by our EU partners, I encourage him to share any information gleaned from those investigations with the House and the Committee.

[Sir Malcolm Bruce]

I am very glad to see the hon. Gentleman back in the international development debate. To clarify how this issue arose, we were told by the Health Department in Liberia that the money had been earmarked for it and that it had not received it—that the Minister of Finance had either held it back or was spending it elsewhere. I am grateful for the Minister’s intervention, and I am interested in his reply that our Government have checked and found that that is not the case. I just want to be clear that this information was given to us in good faith and on the face of it, it was shocking. We just thought it was important, and if it has been checked and it has not happened, that is absolutely fine, but nevertheless, it was a significant factor. When money is given, sovereign Governments can, of course, in the end redistribute it, but the question of whether it went where it was meant to go should really be followed up on.

[Anas Sarwar]

The Chair of the Committee mentions an important issue, and it is right that the Committee raised it and that the Minister has looked into it. I think we would all welcome that information and clarity, but it also highlights an issue in recipient countries, where perhaps that information is not shared between Departments. That undermines both the way in which Departments can operate and the state-citizen relationship in recipient countries. That information should be shared with the Committee, and there should be a way to share that information with a recipient country’s Government, and particularly its Department of Health.

It would be interesting to hear what indicators are in place to measure how much of the money spent through multilaterals is used specifically on strengthening health systems, and in which countries, and how the success of that spending is measured. Transparency is again the key issue, in terms of gaining the public’s trust. That same principle should be reflected in our bilateral agreements, ensuring that where we do give budget support, an emphasis is put on universal health coverage by recipient countries. Aid should never be a blank cheque. Recipient countries must make a commitment to medium-term goals and take responsibility for long-term health system development. We should never be afraid to take a tough line with Governments who do not adhere to that principle.

However, we must not fall into the trap, as we often do, of believing that our biggest impact comes just from the money that we spend and the global influence that we exert. There must also be a recognition, as has been made clear by many Members today, that through our NHS, we have built up expertise, and if we share that, we can help shape global systems. We have the talent among our health workers to develop strategies and plans, to provide professional and personal development, and to manage and learn in a meaningful two-way relationship with recipient countries. That is why we should encourage volunteering, as the hon. Member for Congleton (Fiona Bruce) suggested.

I push the Minister to respond more thoroughly to the Committee’s recommendation to build schemes that are more co-ordinated, structured and scaled up. That should include detail on how the Government would support those people who choose to volunteer with specific benefits and entitlements. Such schemes would help to promote the good work that the Department and this country do on development and would also help build public support and trust at a time of public cynicism.

Linking that to the Ebola crisis, I want to re-emphasise the question that my hon. Friend the Member for York Central asked. We know that 650 NHS front-line staff and 130 public health staff have volunteered to work in Ebola-stricken west Africa, but how many have actually gone? We still do not have a specific figure from the Government, and I hope that the Minister will have an answer for us today. We should not shy away from giving all the support that we can to the people who are bravely volunteering their expertise and putting their lives on the line, in many senses, to go and protect the lives of others. We should absolutely support them.

Constitutional Law

Debate between Lord Bruce of Bennachie and Anas Sarwar

Tuesday 15th January 2013 Commons Chamber

[Sir Malcolm Bruce]

The hon. Gentleman is making a very good point. Does he agree that the evidence is clear that a substantial proportion of the people who voted SNP do not support independence and if they saw the SNP manipulating the question, that could prove counter-productive in two ways? Of course, it would discredit the SNP but it would also lead to a result that people would find unsatisfactory. Does he agree that it is in the interests of the SNP and Scotland for the question to be agreed by, and to have the confidence of, all parties?

[Anas Sarwar]

I agree wholeheartedly and, in fact, I would go further. Polling has shown that 45% of the people who voted SNP in 2011, when the party won that overall majority in the Scottish Parliament, oppose independence and support being members of the United Kingdom. We have seen the launch of the Labour for Independence campaign, which has one or a maximum of two Labour members fronting a campaign led mainly by the SNP. In fact, the SNP should be looking to keep its own support rather than trying to look for voters elsewhere.

The Scottish Government, Yes Scotland and the Deputy First Minister have all said that the debate must be open, transparent, fair and honest. The transfer of powers from this place to the Scottish Parliament and the decisions that the Electoral Commission will make on how to make the referendum fair and open are the first big tests of the rhetoric. This is the first opportunity those bodies will have to show that they will put the people of Scotland first, that they will put the future of Scotland before the future of the SNP and the country’s interests before their own, and that the will of the people of Scotland will come before all else. The people of Scotland deserve nothing less.

I have some concerns. To date, the SNP rhetoric on transparency and fairness has not matched up to the reality of its behaviour. On the very subject of today’s debate, let us not forget that just one year ago the SNP said that it did not need a section 30 order for the referendum to be competent. Alex Salmond said to the Scottish Parliament:

“We have set out in the past how the Scottish Parliament could hold a referendum that we are satisfied would be within its present competence.”—[Scottish Parliament Official Report, 25 January 2012; c. 5605.]

Bruce Crawford, as Minister for Parliamentary Business, said that the SNP Administration had set out their position on the

“right and ability of the Scottish Parliament to hold an independence referendum”.

Both comments were presumably the most factual comments ever made in the history of the Scottish Parliament.

Let us be clear. The leader of the Westminster SNP has welcomed the historic agreement that will transfer these powers—an agreement the SNP said was not needed in the first place. We have also seen the section 30 order being used as an excuse for assertions on other issues. The Deputy First Minister stood up in the Scottish Parliament and claimed that the SNP was now in a position to seek legal advice on the EU because of the content of the Edinburgh agreement, an agreement that her party did not think was needed in the first place. Nothing in the agreement stopped the SNP or the Scottish Government from seeking legal advice on that issue or many others before this point, so none of the debate from the SNP should be skewed in the context of the section 30 agreement.

We have heard from colleagues today, and have already seen from the SNP, a willingness to change the franchise for the referendum by reducing the voting age to 16. Although I agree with that, the SNP’s proposal is based not on any principled view that 16 and 17-year-olds should have the vote for all elections but rather on a belief that they might gain electoral advantage from the inclusion of that group, who were believed to be more likely to support independence. However, that plan appears to have backfired somewhat as a recent poll showed that young people are as against independence as the rest of Scotland.

Let me make some important points about the expansion of the franchise to include 16-year-olds. We need to ensure that not only some 16-year-olds but every 16-year-old gets a vote in the referendum. We must be clear about the work that must be done locally and nationally by the electoral registration officers, where the funds will come from to meet the costs and whether local government will be given the additional finance it needs to deliver on that pledge. We must also be clear about the impact of the UK Government’s insistence on single voter registration on encouraging 16 and 17-year-olds to register for the referendum. Those are all serious issues that must be addressed before we move on to the substance of the question.

There are other areas of concern, too. Perhaps the most obvious is the reluctance of the Scottish Government publicly to commit to accepting the decisions of the electoral Commission. The role of the Electoral Commission is clear and well rehearsed; it is an independent, experienced and trusted body, whose motive is only that of ensuring a fair contest and a fair outcome.

Two areas of consideration are vital. The first is the fairness of the question. Can anything be of greater importance than ensuring that voters have a clear unbiased question? The second is to ensure that the spending limits of the respective campaigns are appropriate to allow a properly robust and informed debate.

There is not universal approval of the wording of the question. Some say it is leading and some say it is likely to skew the result. I say, let the Electoral Commission decide. On our side of the argument, we know the result we want, and the nationalists know the result they want. It should not be for politicians to decide what the question should be; let us take it out of their hands. I am not saying that our question is better than an SNP question; I am saying that we should respect the right of an independent respected body to set the question. All political parties should accept its advice and move on, to give Scotland the debate it deserves.

Future of CDC

Debate between Lord Bruce of Bennachie and Anas Sarwar

Thursday 14th July 2011 Westminster Hall

[Malcolm Bruce (Gordon) (LD)]

I am glad to have the opportunity to open this debate on the future of CDC, and I appreciate the fact that the Secretary of State for International Development has undertaken to respond to it.

CDC is a remarkably important part of our development armoury and it is likely to undergo substantial changes in the coming years, as our Committee recommended in its report. I need not detain hon. Members long by saying that CDC—originally the Colonial Development Corporation, subsequently the Commonwealth Development Corporation, and now just the CDC—is the Government’s development finance institution and the fourth largest in the world. On its own terms, it has been a success, in the sense that it has grown its assets from £1.2 billion to £2.7 billion since 2004. In 2009, which is the last year for which I have figures, it contributed £222 million towards the UK’s official overseas development assistance.

From a personal point of view, I would say that CDC has done well in terms of what it was asked to do, but it needs to do more and differently, and that is certainly the recommendation of the Committee’s report. The Government have reviewed CDC. The Secretary of State said to me that as a fund of funds it is fine, but it needs to be something more—I agree. Indeed, it has been my view for a number of years that CDC is too distant from the Department for International Development and that its full potential for helping to achieve private sector growth and development in our priority areas has not been realised. I welcome the Secretary of State’s statement that he wants CDC to be

“more pro-poor focused than any other development finance institution, doing the hardest things in the hardest places.”

If I may say so, that quote is characteristic of him.

I have often said that the International Development Committee is not the overseas aid Committee. If we are to provide sustainable development that will lift poor people out of poverty and keep them out, we must strengthen the private sector’s ability to support them. As a fund of funds, CDC has levered additional finance, and there is clearly a role for that to continue—indeed, that will probably be its predominant role—but we have suggested that CDC should consider whether it can, for example, attract more capital from diaspora funds. Diaspora finance far outweighs our overseas development assistance to many developing countries, but it is fair to acknowledge that, understandably, much of that money goes back to the families and communities from which the diaspora has come. However, the Committee took the view that there must be scope for a significant part of that finance to be channelled into wealth-focused, pro-poor development funds. We certainly believe that a well-targeted, well-managed fund could unlock a lot more for pro-poor development.

[Anas Sarwar (Glasgow Central) (Lab)]

As a fellow member of the Committee, I praise the Chair and his draft, which we accepted without any amendments. He rightly says that diaspora communities want to invest in their mother countries. One example is the Pakistani community, which invests heavily in Pakistan. However, one regular problem is that the investments are risky and do not give the returns sought. If CDC reformed itself to appeal to diaspora communities, that could lead to much more effective aid and development in their countries.

[Malcolm Bruce]

I thank the hon. Gentleman for that intervention. CDC opens up the opportunity to do a lot of things differently in the future that could unlock funding from a variety of different sources. That will be a mark of its success.

We also recommend that CDC should try to invest funds where private capital otherwise might not go—or not on a scale or on terms that would meet the needs of the poor. There is plenty of evidence throughout the world that some market opportunities do not always attract adequate investment because they are regarded as unfashionable or remote, or because their benefits are counter-intuitive. One example from the not-too-distant past, and from quite close to home for me, is the Highlands and Islands Development Board. An interesting thing about the board is that it invested in its heyday in stimulating new companies and initiatives across the highlands and islands region.

I remember the chairman of the board giving evidence to a Select Committee. When he was asked what return the board made on its investment, how many losses and bad debts it had and how that compared with the private sector, he answered, in summary, “Actually, our rate of return and bad debt is almost exactly the same as in the private sector.” That prompted the question, “Well, why do we need you, then?” and he answered, “Because the private sector wouldn’t go where we went.” That is classically the case with CDC. It will and can go to places where investment might not otherwise be made, but where genuinely positive economic returns can be secured. [Interruption.] I am glad that my hon. Friend the Member for East Surrey (Mr Gyimah) has found his right place in the Chamber. I hope that he might catch your eye in due course, Mr Walker.

It is right that a development finance initiative such as CDC should have, in addition to such priorities, an investment code that meets the Department’s environmental, social and governance standards. That code should be used not as a barrier to attracting funds, but as a means of effectively certifying the quality of investment and attracting money from investors who want to meet certain high standards. There are examples of ethical investment funds in the UK. People with such investments want to invest their money in ways that have particularly beneficial social outcomes. I am certain that people will want to invest in ways that deliver benefits to the poor, but they will also want to know that it is being done in a businesslike and commercial way—not through a charity, but through an organisation designed to create sustainable economic development.

One problem with and criticism of a fund of funds is that, by definition, it creates long lines of communication and limited direct control. Many transactions are happening at a long remove. Given that it is a development finance institution, it is therefore necessary, first of all, to ensure that the impact is properly assessed and measured. We have called on the Government to ensure that that is done more effectively than in the past. A proper assessment should be made of what jobs were created, whether they were quality, permanent jobs, and whether those jobs were adequately paid. That is the essence of sustainability as well as of the pro-poor benefit of the investment. The same applies to transparency. People need to know where the money is being invested and whether it is being invested in appropriate things with which people feel comfortable. They need the assurance that the primary outcome is benefiting poor people.

That point raised a debate in the Committee about what people should be paid. It is somewhat embarrassing that the CDC has suffered criticism for that in the past. Given that its primary purpose is to help the poorest people in the world, high rates of remuneration and bonuses for its executives create an uncomfortable anomaly that needs to be addressed.

[Malcolm Bruce]

I absolutely agree. My view is that that is a good criterion for every form of investment, but especially in this context.

The Committee received interesting evidence on remuneration, which we debated. The standard response on CDC has been, “It has been set up as a market-based model competing for funds in the marketplace, so we have to pay people market-based salaries.” I am not saying that there is no connection between those things, but we received significant evidence that there were people who would be prepared to work for considerably less than the market rate, although not necessarily for peanuts, given that, in the peak year, the chief executive’s package totalled £1 million, which included a salary of several hundred thousand pounds. However, there are people who will work not for £20 a week, but perhaps for £50,000, £100,000 or £150,000 a year, on the grounds that they have an opportunity to give something back from their own career by contributing their experience at a time when they do not need the money. We asked the Government to look at that. I appreciate that that can create tensions, but as long as the process is done openly, the model would draw some of the sting out of the criticism that has been levelled in the past.

Similarly, the Committee had an interesting discussion about the use and role of tax havens. We recognised that things were not as simple as we had thought when we started to look into the situation. The argument for their use is that they create financial efficiency that attracts more money than would otherwise be the case, and that that does not, in fact, mean that taxes are not being paid. Unattached—orphan—money that was not directly related to a particular geographical area or activity could be reinvested in the fund and, in effect, the tax not paid on the tax haven funds represented money available for reinvestment. The Norwegian development finance institution recently took a policy decision to pull out of tax havens, and doing so dramatically reduced the attraction of additional finance. Our view is that we should look at the situation clearly. There should be transparency and institutions should always pay taxes appropriately and properly, but we have asked the Government to consider whether they should provide a rule about the correct role of tax havens. To be frank, the Committee did not feel that there was enough authoritative evidence to make a definitive recommendation.

[Anas Sarwar]

In the spirit of transparency, does the right hon. Gentleman agree that it might be a good idea for the Government to consider whether they should request that CDC publishes what taxes it pays and what profits it makes for every country it works in?

[Malcolm Bruce]

Absolutely, and I obviously hope the Secretary of State can give us that assurance.

In a sense, the organisation needs to be a trailblazer for what an investment model in developing countries ought to be, and a role model not only for other DFIs, but for the well-intentioned private sector. We have concluded that there is scope for clarification at the very least and for the maximum transparency.

We were as shocked as the Secretary of State that despite the sale of Actis, the fund manager, for £373,000 and the fact that the Government were apparently entitled to 80% of the proceeds, not a penny had been paid by the time the Committee took evidence. I know that he was anxious to vent his spleen about that when he gave evidence to us. I do not know whether he will be able to give any indication today of whether the Government can sell their share and, if they do so, whether we will get a fair rate of return—after all, that will be reinvested for the benefit of poor people.

Perhaps the Committee’s most significant recommendation was that the investment model for CDC should be changed. I know that the Government have not entirely accepted our recommendations, but I think that they acknowledge the strength of their principle and the spirit. We recognise that the fund of funds model could unlock a substantial amount and that it does attract investment. Particularly if the report’s recommendations are taken on board, that could be focused in a way that gives real, sustainable, long-term benefits to poor people in poor countries.

We felt that some of the money needed to go into more direct, riskier and more pro-poor investment. That means not that it should be thrown away or invested irresponsibly, but that lower rates of return should be acceptable or that a mix of grants and loans should be applied. We suggested the name “CDC Frontier” to indicate that the body would be operating slightly more experimentally.

One point about our recommendation of having two separate businesses was that because the fund of funds has been very successful at attracting and unlocking substantial extra funding—it has provided very good leverage—we were concerned that a more risk-associated set of investments in the same fund might frighten off some investors who have contributed. I hope that the Secretary of State will reassure us and that his response shows that he has taken our concern on board. As long as the Department and the way in which CDC is established are able to reassure those people, the Committee will be content if our specific model is not adopted. I hope that the Secretary of State understands that the proposal was not a gimmick, but a genuine attempt to ensure that we had the balance of the changing nature of the business right and that we did not have a higher-risk aspect undermining the area with a proven track record.

The Committee felt that there should be some agreement on the sort of sectors within which CDC should operate, but the Government did not entirely accept that recommendation. I appreciate the reason behind the absence of the hon. Member for Stafford (Jeremy Lefroy). He is a valued member of our Committee and has real expertise in agricultural development in east Africa. He was rightly exercised by the view that most countries in which we have the greatest commitment to pro-poor development are rural, and agricultural productivity is a major cause of poverty. The Committee accepts that the world is changing. We have produced a report on urban poverty and increasing urbanisation, so we do not see development as something that happens just in remote parts of rural Africa, which is sometimes the public image. However, it is true that in both the sub-continent and Africa, a high proportion of the poorest people depend on agriculture for their livelihoods, yet the productivity of agriculture is frankly abysmal in many cases.

When the Committee recently visited east Africa, some of us spent a night in a village in the heart of rural Burundi—