Oral Answers to Questions

Debate between Lord Bruce of Bennachie and Stephen O'Brien

Wednesday 1st February 2012 Commons Chamber

[Mr O’Brien]

My right hon. Friend the Secretary of State has just returned from the African Union summit that was held in Addis Ababa last weekend, and he is fully seized of that issue. He had direct discussions on this matter with the chairman of the commission, with President Mbeki and with Prime Minister Meles. People are focused on the question of an appropriate mandate, but the current position is that it is better to deploy into the right places the troops who have been mandated, rather than distract ourselves with a review of the mandate itself.

[Malcolm Bruce (Gordon) (LD)]

The Select Committee is looking forward to having an extended exchange with the Secretary of State on South Sudan this afternoon. In the light of the disruption of oil supplies, and the fact that the South Sudan Government are 98% dependent on oil revenues, will the Minister tell us what steps our Government and the international community are taking to resolve the dispute and to support the South Sudan Government in regard to that financial constraint?

[Mr O’Brien]

Extensive meetings took place in Addis Ababa over the weekend, in which my right hon. Friend the Secretary of State was involved at the highest level. The straight fact is that, while the oil dispute is outstanding, progress is going to be impeded. We call on all parties to acknowledge that it is in their mutual interest to pull back from the brink and reach an agreement, with the north getting the ships to sail and the south to release oil from the wells again.

International Development (India)

Debate between Lord Bruce of Bennachie and Stephen O'Brien

Thursday 26th January 2012 Westminster Hall

[The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien)]

I congratulate the Chairman of the International Development Committee, the right hon. Member for Gordon (Malcolm Bruce), on securing this important debate, and I thank him for his excellent speech, which reflected the combined work of him and his Committee members. It not only focused on the India programme, but set it in a context that had a huge read-across to the justification and principles that underlie where we should place our UK effort to be partners in aid, and then to graduate to development and to securing a better future for people who have many disadvantages. His comprehensive, thorough, thoughtful and evidence-based speech got the debate off to a most respectful and useful start. Our timing happily coincides with the Foreign Secretary making, as we speak, a keynote speech to launch the King’s India Institute at King’s College, on what is India’s republic day and the 62nd anniversary of the signing of its constitution, so there is some poignancy to the debate.

Let me put the debate into context. When the coalition Government came into office in 2010, we made it clear that we wanted to build a different style of international development, one based on dynamic partnerships that reflected our networked world and focused on a relentless pursuit of results and value for money in the Department for International Development’s work. Our vision acknowledges the prominence and value of Britain’s involvement in the alliances on development that were so important in the past, but also looks to the relationships and international forces that will shape the future.

Engagement with the emerging powers is a cornerstone of the policy, as the Secretary of State for International Development set out in a speech at Chatham House in February last year. I am sure that Members will have noted, as did the Secretary of State in that speech, that in the space of a few short decades the world has become a very different place. Whether we are talking about the BRIC countries—Brazil, Russia, India and China—the Asian dragons, the tiger economies or the gulf giants, the new powers will influence world affairs in the future, and it is therefore in our interests to engage with them now.

Of all the emerging powers, it is India with which we will have the most multidimensional relationship and partnership. Our shared history, and political and personal links, all mean that India is important to the United Kingdom, and the Prime Minister’s visit so soon after the election in 2010 reflected the importance we attach to the relationship.

As the right hon. Member for Gordon is aware, in the last year we have completed a root-and-branch review of the aid programme to ensure that our spend is targeted where it can achieve the greatest results. The review made it clear that we can achieve real results for poor people in India. Why? Because the Indian Government are ploughing record tax revenues into poverty reduction programmes, and in that environment, our development expertise can ensure that the impact of those resources is maximised for the benefit of the poorest in Indian society. Indeed, we estimate that the United Kingdom’s aid has lifted 2.3 million people out of poverty in rural India in the past five years and put an additional 1.2 million Indian children into primary school since 2003, demonstrating that there has been a succession of Administrations with a shared responsibility.

The value of these efforts received cross-party endorsement when the International Development Committee completed its assessment of the UK’s development programme in India and concurred with our decision to continue our funding until 2015. I recognise the right hon. Gentleman’s perfectly legitimate, well-articulated and constructive criticism, and his constructive approach to holding a Department of State to account—through his Select Committee, in this case—and I hope it is noted that DFID delayed finalising the 2011 to 2015 operational plan for India until after his Committee had made its recommendations. We were then able to take the recommendations into account before publishing the operational plan on the DFID website in October 2011.

The pace of India’s transformation to date has been remarkable, as hon. Members have noted. Although economic growth has slowed in recent months, India is still achieving enviable rates of growth—rates we would give our eye teeth for—lifting 15 million people out of poverty every year. But we know that the benefits of the growth are not being shared equally and the scale of Indian poverty remains massive. India’s poorest states—each of them larger than most African countries, as has been well noted—still face huge development challenges. More than half the girls in Madhya Pradesh do not yet go to secondary school, more than half the young children in Bihar are undernourished, and one quarter of all pregnancies are unwanted or mistimed.

Our decision to maintain our programme in India was coupled with a very clear conviction, well picked up by the Select Committee, that the programme should also be radically different. Because of India’s economic growth and its own increasing resources, we are bringing the development partnership up to date. Since the publication of the International Development Committee’s report on the future of aid to India, we have agreed a new approach with the Government of India, and I think that the right hon. Member for Gordon importantly wanted to ensure that that had happened.

The approach has three main pillars. The first is an innovative new private sector programme, using returnable capital to promote pro-poor private investment in India’s poorest states. Rather than just read out the bullet points, I will give a bit more detail, to pick up on some of the points raised, particularly by the hon. Members for East Kilbride, Strathaven and Lesmahagow (Mr McCann) and for Brent North (Barry Gardiner). It is in the interests of the poor and the UK taxpayer that resources are used sparingly and only where most needed, attracting private capital where possible, but it makes good value-for-money sense, and it is certainly good for poverty reduction, to use our resources over and over again if we can. So the answer is yes, the resources will be reapplied for India. I say “if we can,” because we must ensure that we preserve at all times the ability to apply rigour.

[Malcolm Bruce]

Is my hon. Friend able to say what the CDC’s role will be? The CDC is being revamped, and it seems that some of this returnable kind of capital would be appropriately delivered through that body. Is there an active dialogue between DFID and the CDC about how the private sector funding will develop in India?

[Mr O'Brien]

The right hon. Gentleman makes a very important point. In many degrees, this is a question of a stratified approach. It is really to do with the risk appetites and the profile of the funding instruments that lie behind it. I can certainly confirm that we hope that the revamped CDC will be able to take a greater interest in applying its patient capital approach, particularly to some of the infrastructure support that lies behind economic development, not least in the poorest states. But let us be absolutely clear, with the DFID instruments, we are able to put forward the funding that we do because our capital can take bigger risks in riskier places than even that of the CDC. We have to recognise that there is a connection, but not necessarily an overlap.

--- Later in debate ---

[Mr O'Brien]

I hope that I will have enough time to answer that question. I have a great slug of information to add on the private sector but, given the topic of the debate, I want specifically to cover the recommendations of the IDC’s report. The IDC has made a valuable contribution to the new shape of our programme in India and its recommendations encompass the points highlighted by the Opposition spokesman, the hon. Member for Bethnal Green and Bow (Rushanara Ali).

As the Committee noted, UK aid matters in the poorest states, where there are the fewest donors and where growth has not yet made a significant impact on poverty. We are therefore focusing on those poorest states, and we will help states access India’s own resources, improve the environment for business and investment, make sure that the public get a better deal from public services, improve financial procedures and reduce corruption.

We have taken note of the Committee’s recommendation to concentrate more resources on needy sectors, and we plan to double our support—this is an important point, first raised by the Chairman of the Committee—for water and sanitation over the next four years, giving 5 million people access to better sanitation. We want to increase the amount of burden-share that others may assist us with, but let us be clear that, through community approaches, for every pound we spend on sanitation, we expect Government partners to spend approximately £20. We are piloting community-led total sanitation in Bihar and, assuming that it proves effective, will roll it out.

The Prime Minister of India recently described child malnutrition—another point raised by the Committee Chairman—as a national shame. Over the next four years, DFID aims to reach more than 3 million children through nutrition programmes, including—not least over the first 1,000 days and with the Governments of Madhya Pradesh, Bihar and Odisha—a programme on child-feeding, micronutrient supplements and diarrhoea management. Trained community health workers are very much part of that programme. Our energies are focused on delivering the results expected of our programmes. For instance, 447,000 births between 2011 and 2015 will be delivered with the help of nurses, midwives and doctors in those three states, but it is too early to finalise our plans for post-2015.

I appreciate the interest of the Committee, but let us be clear that we will not be in India in a development relationship for ever. Our aim over time is to move from an aid-based relationship to one based on shared contributions to global development issues, not least climate change.

[Malcolm Bruce]

Will the Minister acknowledge that, according to our discussions with the Indian Government, they themselves see the relationship changing and coming to an end? It is not just a decision for the United Kingdom Government; it will be a joint decision between the UK and the Indian Government.