Job Creation: Developing Countries

Alison McGovern Excerpts

Tuesday 24th June 2014 Westminster Hall

[Alison McGovern (Wirral South) (Lab)]

Mr Hollobone, I think I express the views of everybody in this debate in offering my thanks to you for stepping into the breach and chairing so ably. I also congratulate the hon. Member for Stafford (Jeremy Lefroy) on securing the debate and on his contribution. It was my pleasure to serve with him for a time on the Select Committee on International Development; his contributions then were always thoughtful, considered and expert. I have learned even more about the subject by listening to him just now.

Harold Wilson, who went to school in my constituency—in fact, he went to the boys’ school near the girls’ school I went to—said:

“Unemployment more than anything else made me politically conscious.”

In that regard, I want to make a few remarks to take forward the comments the hon. Gentleman concluded with.

The hon. Gentleman talked about economic development in its broadest sense and about the interconnected nature of what makes an economy work. It did my Merseyside heart good to hear him talk about the vital importance of ports to our infrastructure. That is not a glamorous thing to say—when we talk about infrastructure, people often think of big bits of railway—but ports are vital, in this country and others. However, I want to restrict my remarks to aspects of job creation that relate to the work DFID does and to the work I think it should do more of. In that regard, I have a few comments to make and some questions to put to the Minister.

I think we all start from the assumption that private sector growth is a good thing. It is especially good if it represents a structural shift in a country’s ability to feed its population and to take care of itself. In that regard, the hon. Gentleman’s comments about infrastructure capital expenditure are vital. However, although private sector growth is necessary, it is not sufficient in itself for development to occur. People in a poor country will have greater freedom only if other conditions are fulfilled.

Does growth help the poorest? For those in work that is vulnerable, there is a clear link between the insecurity and threats a country faces and the extent to which economic growth helps those closest to the bottom. It stands to reason that those who do not have much to live for would risk their lives by engaging in military combat. The more we can do to give people the possibility to develop themselves and their families, the safer the world will be.

Does growth reduce inequality? Not necessarily. However, we must surely seek to ensure it does, if we are to have a fairer and more just world. In that regard, it is important that we see no return to aid conditionality—to the old days of aid as a byword for helping so-called British companies do business in other countries. I am afraid there has been a slightly worrying return to language referring to the UK as an aid superpower, as if our international development work with other countries is purely about self-interest, rather than an enlightened self-interest that reflects the virtues of being on a more even playing field with others.

Does growth involve the diaspora? Okay, DFID has done some work with FTSE 100 companies, but what about businesses in this country owned by people from poor countries in Africa and elsewhere?

My final condition in terms of determining whether private sector growth is good enough to bring about true development relates to environmental sustainability. If infrastructure investment is done in the right way, it can be absolutely crucial—solar farms have been mentioned. The world can choose whether to grow in a way that is healthy; some of the mood music from parts of the Government has been less than positive about the green agenda. I would not dream of using the kind of words that have been used about it, but I am sure the Minister knows what I am referring to.

To conclude, I have some specific questions. On job creation, the Minister will realise there is a serious risk of deadweight loss if projects that work with the private sector create jobs that would have been created anyway. What research is DFID undertaking to ensure that any investment in or for the private sector is genuinely additional and does not simply move jobs geographically or recreate ones that would have been created anyway?

Secondly, what policies is DFID pursuing to help meet the decent work indicators in the millennium development goals? It is clear that we need to reduce the number of people who are working and in poverty and, specifically, that we need to help young people and women. Half the world’s labour force is in vulnerable employment, so the agenda could not be bigger. Leading on from that, in how many DFID projects with the private sector does the Department monitor the quality, quantity and precariousness of the work created?

The Dutch Government require private sector use of their development funds to adhere to OECD guidelines for multinationals, including on industrial rights and workers’ rights. I would be grateful if the Minister commented on whether we intend to adopt the same standards as the Netherlands.

I would be grateful if the Minister told us whether there is any move in DFID to reconsider the short-sighted decision taken earlier in this Parliament to de-fund the International Labour Organisation. In some of the work I have done on the situation of garment workers in Bangladesh, the contribution made by the ILO’s advice and work has been irreplaceable, but the Government have decided on behalf of the nation to de-fund that organisation. Of course, the Minister may respond by saying that DFID Bangladesh has worked with the ILO, but that is not the same as the contribution we used to make to it. Will the Government reverse that short-sighted decision?

To conclude, I congratulate the hon. Gentleman again on raising this issue, which is vital to poor people who work hard and earn little, wherever they may be, as well as to the broader security of the world.

--- Later in debate ---

[Lynne Featherstone]

My hon. Friend makes an excellent intervention. CDC has gone from strength to strength. Not that long ago there were some question marks over it, but it has moved well away from that. As he says, because it works in the most fragile, conflict-affected and poorest of countries, its success is all the more remarkable. It has created more than 68,000 new jobs.

[Alison McGovern]

On that point, would the Minister be so good as to respond to my question about deadweight loss and what research DFID is undertaking to ensure that none of those new jobs represents such loss?

[Lynne Featherstone]

I will respond to the hon. Lady in a moment on the issue of deadweight loss.

Moving on from CDC, in the long term, the key to mass job creation is improving the environment for domestic and other businesses to invest and grow. DFID is focused on these long-term determinants of job growth.