International Development

Andrew Mitchell Excerpts

Thursday 18th June 2020 Commons Chamber

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I welcome these orders and agree that they should be taken together. We will not be opposing them. I welcome the support that they indicate for tackling poverty and disease and removing the burden of debt in Africa and elsewhere across the world.

However, in the context of the Prime Minister’s announcement earlier this week and the urgent question answered by the Foreign Secretary today, it is very important that we recognise that the decision taken will have an impact on our relationship with the African Development Bank and the World Bank institutions, including IDA. It is sad to have to contrast the positive impact of these orders with some of the ill-informed rhetoric that we heard from the Prime Minister on Tuesday on a decision that fundamentally risks undermining our relationship and influence with IDA and the African Development Bank in terms of the impact and oversight of these replenishments, and the debt relief. This decision has been criticised from many quarters, including by Members on both sides of the House and by some of the world’s leading experts. One of those, of course, is the former Prime Minister, David Cameron, who said that it

“will mean less expertise, less voice for development at the top table”—

that is, the top table of these institutions. Gayle Smith, the former administrator of USAID, also said that it was a dangerous step backwards. Does the Minister agree that in fact, and in contrast to what the Prime Minister said earlier this week, in the majority of contexts there has always been close co-operation and co-ordination between the different arms of UK international policy, including in Africa, and in relation to the IDA part of the World Bank and its other institutions, as well as the African Development Bank?

It has been particularly concerning, given that we are focusing so much on Africa in these orders, to see the false dichotomy that was set up by the Prime Minister’s comments. He spoke about Zambia and Tanzania, for example, and contrasted them with priorities in places like Ukraine and the Balkans. This is particularly concerning because Zambia and Tanzania have been supported by funds from the African Development Bank and IDA in the past, and of course by DFID’s bilateral programmes. They are both long-standing members of the Commonwealth and countries with which we have had very constructive partnerships over many decades.

This is particularly relevant in relation to the impact of the covid-19 pandemic on Africa and elsewhere, which the Minister spoke about. He and I have discussed that issue outside the House. I want to thank him for the courtesy that he has shown me since my taking on this role in discussing a number of matters on which there is no division across this House. For example, the African Development Bank has been supporting the One WASH programme in Ethiopia. The bank and other partners’ funding has been supporting that ambitious national programme to serve 110 million people in Africa’s second most populous country. As well as the ADB, key partners include the World Bank, the Department for International Development, the Government of Finland, and UNICEF. The programme has been embracing safe water development systems, including boreholes, hand pumps, diesel pumps, gravity pumps and electric grid power to bring safe, potable water to Ethiopians. Water development commissioner Mogesse said recently:

“The One WASH National Program did not plan for the COVID-19 pandemic. But it has prepared us to fight the pandemic better than we would have been without the program, especially in the unserved rural communities.”

That example highlights the sort of impact that the ADB and other funding the UK has provided to the multilaterals has had, not only on tackling covid but on tackling wider water and sanitation issues.

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

rose—

[Stephen Doughty]

I happily give way to the former Secretary of State.

[Mr Mitchell]

I am most grateful to the hon. Gentleman for giving way. May I take him back to his point about Zambia and Tanzania, and the Prime Minister’s point about how he would rather spend money in Ukraine? Did it not strike him as rather odd that the Prime Minister—he is, after all, the Prime Minister—needs to abolish the Department for International Development to achieve that? Surely he simply needs to pick up the phone to the Secretary of State for International Development, hold a meeting of the National Security Council and say he has decided that those are to be the priorities.

[Stephen Doughty]

Indeed, and it did strike me as very odd and very concerning, and it will no doubt have been noted with concern in the capitals of many of those countries that we have enjoyed strong partnerships with for many years.

On that note, can the Minister assure our partners in countries across Africa, and indeed across the developing world, including Ethiopia, Tanzania and Zambia, that we will continue to partner with them and their citizens, to tackle the coronavirus pandemic and continue our long-term work to tackle poverty, disease and inequality, tackle gender injustice and urgently deal with the climate change crisis?

The UK role on the boards of the multilateral financial institutions has often been such that we have been able to influence the direction of those institutions, which have not always had the right focus or agenda, for the better. The former Secretary of State will know that well; I know he took a keen interest in these matters, and I am sure the Minister does, too, and I too have seen that at first hand.

I want pay tribute to the officials and successive Ministers across the parties that have seen Britain’s role as one for global good in these institutions, contributing to multilateral action, so that we can achieve a bigger impact than the mere sum of our parts. That very much, for me, was global Britain in action, and not the Britain that I fear we now seem to be heading towards. So can the Minister confirm: who will determine the future role of executive directors at the World Bank and the African Development Bank, and who will they take their orders and policy steer from in future? Will they still have the same mandate to focus efforts on poverty reduction, or do we risk seeing them go the way of, for example, the badly run Newton Fund, overseen by a non-DFID Department, which was recently criticised heavily by the Independent Commission for Aid Impact and the Sub-Committee on the Work of the Independent Commission for Aid Impact—and indeed the Chair of that Sub-Committee, the hon. Member for Stafford (Theo Clarke), who is not in the Chamber at the moment, but I know takes a keen interest in these matters?

Turning to the two specific institutions and the replenishments, the record of global Britain in action is reflected in a history of partnership with the African Development Bank, and we have contributed over many years to programmes and initiatives such as the African water facility, the Congo Basin forest fund, the sustainable energy fund for Africa and, indeed, the actions on covid that I have just described in Ethiopia. The Minister spoke about the “high five” focus points of the African Development Bank—power Africa, integrate Africa, feed Africa, industrialise Africa and improve the quality of life in Africa, and I hope that he, in his remarks, can confirm that that will continue to be a UK priority for our role in those funds.

On development for women and girls, we were very happy to see that 80% of the new African Development Bank operations were categorised as having gender-informed design; of course, developments cannot succeed without economic development, health and education for women and girls. So will the Minister and his Department continue to negotiate with the African Development Bank and ADF to ensure that funds go to women-led and women-and-girl-directed programmes? I also understand that the pledge rightly includes an element of performance-based funding dependent on positive results reported at the mid-term review, so will he clarify how much was disbursed or held back at the same point in the last replenishment round? It is important that we hold these institutions fully to account.

On the IDA part of the World Bank—a crucial institution, in which we have played a key role in over many decades—for every £1 of grant finance that the United Kingdom and other donors put in, IDA is expected to deliver more than £3 in development commitments for its clients, and we remain one of the largest donors—in fact, the largest donor in 2019. with an appropriate share of the budget. Could the Minister outline how we will seek to ensure that IDA programmes focus on issues like climate change, public health and education, and women and girls. Given some of the discussions that the Minister and I have had about fragile states, what focus will the new funding round have on investment in those? What performance-related measures will be taken in relation to the replenishment?

I want to ask a specific question about the World Bank’s private sector arm, the International Finance Corporation, because that has delivered a proportionate share of its profits as grants to IDA in the past, but in the past few years we have seen the pattern reverse, with IDA now effectively helping to fund IFC shortfalls. I understand that in 2020 it will be a net recipient of $2 billion-worth of IDA-financing-supported investments. How does he expect IFC returns to be further affected by the global economic crisis relating to the pandemic, and does he expect them therefore to be a greater draw on IDA resources even than was perhaps expected for the year ahead?

I have already mentioned one example of a programme that helps Ethiopia prepare for and mitigate the impacts of covid 19. Over the past few weeks, my Labour colleagues and I have met and been listening to senior experts and African voices from the Africa Centres for Disease Control and Prevention, the World Health Organisation and other national agencies and Governments and, indeed, workers on the frontline in countries from Sierra Leone to Zimbabwe. Some of the stories that they have shared with me have obviously been of great concern, and I have discussed those with the Minister. The effects of covid-19 are already having a significant impact on the continent. That impact is on health—whether directly or indirectly—but also on the economic prospects and stability of many countries and regions, although it appears to be diverse and heterogeneous across the continent. That is also the case when we look at who is affected within countries because, like in this country, covid-19 is often a disease of poverty and disadvantage. The worst affected are likely to be: the low paid; the marginalised; women and girls; those in conditions exposing them to greater risk, such as care workers, workers in health services, people who provide security, food processing and transport, and those who work in places with low ambient temperatures and poor ventilation such as ships, and prisons; and, of course, people who live in the slums and dense settlements that we see in many locations across the global south.

I have been impressed and inspired by the clear and growing African solidarity and leadership on tackling the virus, as in so many other things. We could learn much from that, but it is also clear that there are going to be substantial short, medium and long-term challenges. Global solidarity and support—for example, through this funding and replenishment—is not only a moral duty, but in our common global interests. Would the Minister say a little bit about what he understands about how both IDA and the African Development Bank will seek to focus their programming to deal not only with the immediate short-term needs—obviously there have been substantial changes, which he mentioned, particularly in relation to IDA—but with long-term needs? Has he had discussions with them about how they might facilitate investments that support the roll-out of any vaccine treatments and critical medical supplies on an equitable basis?

Reform is crucial with these institutions, so it is crucial that we continue to seek these reforms. The multilateral aid review rated the African Development Bank and IDA as good—very good, in some cases—but there are areas where they were ranked as weak. Will the Minister say a little bit about how he is going to use our position on the boards of both those institutions to continue to push a reform agenda?

On debt relief, it is almost 15 years ago to the week that I helped to co-ordinate the historic march of a quarter of million people around the streets of Edinburgh in a white band as part of the Make Poverty History movement, which called for life-changing aid, debt cancellation and justice. I know that the right hon. Member for Sutton Coldfield (Mr Mitchell) was a strong supporter of that campaign, which happened in the run-up to the historic Gleneagles G8 summit. It was a true example of what global leadership can achieve both for our country and for our fellow human beings.

The multilateral debt relief initiative was one of the proudest achievements of the last Labour Government, and has enabled us to make substantial progress towards the global goals—both the millennium development goals and their successor, the sustainable development goals. Will the Minister tell us how much debt UK support has enabled IDA and the African Development Bank to cancel over the recent accounting period, and what expectations he has in relation to these orders, given the changed global economic output?

We will not oppose these orders today, but I reiterate that the speech that I had hoped to make, which would have been full of positivity and support for the measures, has unfortunately been tempered by the announcement by the Prime Minister earlier this week and the many unanswered questions, particularly in relation to our influence and role in institutions such as the African Development Bank, IDA and the World Bank. I fear that the past global leadership that we have shown—for example, on debt relief—may now be in jeopardy.

--- Later in debate ---

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

On that point, as we are not allowed to have points of order at this time, may I just say that there has been a statement and an urgent question in the last week on the dismantling of DFID, neither of which, for slightly different reasons, I was able to contribute to under the current rules of the House? Let me say through you, Madam Deputy Speaker, that I would hope Mr Speaker might keep those rules under strict review and perhaps introduce some discretion if they are to persist in their current form for very much longer. Having said that, I thank you, Madam Deputy Speaker, for allowing me to contribute to this debate.

I draw the attention of the House to my interests, which are laid out in the Register of Members’ Financial Interests, including that I am a strategic adviser to the African Development Bank—something that I do for the sum of £1 a year in order that there should be a contract. The House will no doubt have differing views on whether the bank gets value for money for that sum.

In recent years, the bank has been massively reformed, first by Donald Kaberuka, the highly respected former Finance Minister from Rwanda and, I think, the first elected president of the bank. Those reforms have been continued by his successor, Dr Akin Adesina, whom I advise and who I think will shortly be elected for a second term. During that time, the bank has made huge progress, as set out by both Front-Bench speakers. I wish to add a little colour to the comments that have been made and to explain why this is such good expenditure and why the UK is absolutely right to focus on building up the African Development Bank and helping it to be ever more effective.

The Minister mentioned the basic programme of the bank, which is encapsulated in the High 5s, which are: first, lighting up Africa; secondly, feeding Africa; thirdly, industrialising Africa; fourthly, integrating Africa, on which the Department for International Development has been extremely good at advising across the continent, where time spent at borders massively disrupts trade—Britain has been good at addressing that; and fifthly, improving the quality of life of African people.

The results over the past five years of President Adesina’s time in office have been spectacular. If we take them all together, we see that 18 million more people have access to electricity; 141 million more people have access to better farming techniques, food security and advice; 13 million people have access to finance from private sector investment programmes; 101 million people have had access to better transport, partly for the reasons I described; and 60 million people have access to water and sanitation—in our world today, nearly 2 billion people do not have access to clean water, and that has dire effects. The direct impact of the bank on the lives of a third of a billion Africans over that period is clear: there has been a higher rate of progress than at any time since the bank was established in 1964. The bank has retained its triple A status from all five global rating agencies, thus maintaining financial probity as well.

The Minister’s announcements today will ensure that the UK is able to help with the expanding capital base of the bank to accelerate all its objectives. That is the reason for the 125% increase in its capital. Once the money has landed in the African Development Bank, we will see those five key endeavours continue to be built on: 105 million more people will get access to electricity; 204 million people will be able to benefit from better farming technology; 23 million people will benefit from investments in private sector companies; 252 million people will gain access to improved transport and integration; and 128 million will gain access to improved water and sanitation. Those are very important changes to the quality of life of some of the poorest people in the world. The bank directly helps to support low-income countries.

In addition to that, the bank has shown a strong leadership response to the coronavirus crisis, managing to get together $10 billion to help African countries with support. It has raised $3 billion to fight covid-19, through a social bond on the global capital markets. It is the largest ever US dollar-denominated social bond listed on the London stock exchange, underlining how development links in some of the great British institutions that are not immediately seen as part of international development, and it is now over-subscribed, with orders of $4.6 billion. The Fight Covid-19 bond and the other funds that the bank has managed to bring together will be a huge boost to help private companies—particularly, pharmaceutical companies, which the bank intends to do everything it can to assist, for very obvious reasons—to survive after the crisis is over.

I wish to mention two or three other matters. In the last year, the bank has set up the Desert to Power Initiative, which will ensure that there are 10,000 MW of solar power across 11 countries in the Sahel, that belt of middle Africa. That will result in electricity for 250 million of the poorest people in the world, of whom 90 million are off grid. It is a $20 billion investment and will be the world’s largest solar zone.

There has been very strong input from the United Kingdom, with expertise from specialists at DFID made available to help the bank, and a very good relationship exists between DFID and the bank in making all of that happen.

The work on affirmative action for women in Africa is extremely important, and $3 billion is now available for financing women’s businesses, which is the largest ever such initiative. Publish What You Fund lists the African Development Bank as one of the four most transparent institutions of 45 global institutions.

The AFDB has had very strong support from the United Kingdom, as I have tried to set out. DFID has sent some of its cleverest and most effective officials to work in Abidjan to help build up the bank. We want the African Development Bank, rather than the World Bank, to be seen as the Africa bank that brings everything together. Under the leadership of both Donald Kaberuka and Akin Adesina, we are seeing that before our eyes.

I hope the Minister will consider any way in which we might increase our shareholding in the bank, because our influence is much greater than our very small shareholding. It would be helpful to have a continuous presence at the bank in Abidjan, rather than a rotating executive director role. That is not an easy ask, because of the way the bank is set up, but I think the bank would benefit from having the expertise of a British executive director all the time.

Finally, I hope that, just as we have with the World Bank, we will be able to see a much greater use within the African Development Bank of the trust fund structure. That would enable Britain to put money into a particular project or meet a particular ask where we want the bank to have a catalytic effect. The trust fund mechanism is now in common use elsewhere, and greater use of it would greatly benefit the African Development Bank and Britain’s desire to drive forward such objectives.

Thank you very much, Madam Deputy Speaker, for giving me the opportunity to address these points, to support what those on the Front Benches have said and, most importantly of all, to support this replenishment. It will do nothing but good for the overall aims that Britain so clearly has in wanting to do something about the appalling discrepancies of opportunity and wealth that disfigure our world today.

--- Later in debate ---

[Rob Butler (Aylesbury) (Con)]

There is a saying that charity begins at home, and over the past few months we have witnessed extraordinary acts of charity and kindness across the United Kingdom. Confronted by coronavirus, people have volunteered to help neighbours who are shielding, donated to food banks to help the hungry and contributed to appeals raising funds. We have truly seen the best of British. However, charity does not end at home. Our help is needed not just here, but in other countries and on other continents—perhaps nowhere more so than in Africa. That is why I whole- heartedly support these measures and will speak specifically to those affecting the African Development Bank.

The bank is, as we have heard, an important player in African nations’ development, and crucial in the reduction of poverty. Right now, there is a pressing need for the bank to help African countries cope with coronavirus. Many of them do not have the resilience that exists here in the UK. A considerable number have to cope with malaria, and Congo is tackling an outbreak of Ebola. There are fears that covid-19 could lead to a wider food and health crisis, and deep concerns of lasting damage to economies that are already fragile. Although there has undoubtedly been considerable progress in economic development over the past 10 years or so, there is a real risk of that being undone. The African Development Bank is being called on to ensure that that does not happen and to provide immediate help in many parts of the continent.

That underlines the role that the African Development Bank has built in recent years. Its High 5s initiative focuses on providing infrastructure through prioritising the needs that are most pressing across the continent: sanitation and water, energy, transport, finance and agriculture. Those are ultimately all about enabling and equipping the people of Africa to improve their own lives.

The UK’s contribution to the replenishment of the African Development Fund will undoubtedly have a marked beneficial impact on the objectives of inclusive and green growth. The greater focus on climate and gender in designing projects agreed as part of this replenishment are extremely welcome reforms to the bank. I am also pleased to see a commitment to speedier delivery of project funds. Similarly, it is encouraging to see that approximately £100 million is dependent on a positive mid-term review, underlining the need for contributions from the UK to be based on effective performance. I look forward to hearing more from the Minister about how that will be assessed.

On the instrument on further payment to capital stock, it is worth highlighting the beneficial impact that a relatively modest immediate payment for shares brings, as the increased capital stock then enables the bank to leverage its balance sheet on the capital markets to mobilise private sector financing for projects. It is a matter not simply of giving money, but of demonstrating confidence and thus building even greater capability.

The instrument on the multilateral debt relief initiative honours our commitment to cancelling the debt of some of the poorest nations in the world, and I fervently hope that the UK’s financial assistance to the African Development Fund will make a material difference to those countries’ ability to tackle poverty and develop economically now that the burden of unmanageable debt has been relieved.

Although the UK’s shareholding in the African Development Bank is relatively small, I know from conversations with senior members of staff at the bank that we are seen as a very important stakeholder. Our commitment at this time sends a strong message to other shareholders and donor nations. That is surely welcome.

One reason I was keen to speak on the African Development Bank is that, among multilateral development banks, it is in a unique position. It is headquartered and based in Africa and has teams on the ground that really understand African nations and can interact with Governments to help both public finance management and governance. With technical and financial expertise, it is able to mobilise resources and improve capacity so that countries can reduce their dependence on donor funding.

These instruments today are a reminder of the potential for the UK and African nations to forge closer and stronger relations, especially as we leave the transition period following our departure from the EU. Our historical relationship and, in the case of many African countries, shared membership of the Commonwealth also provides opportunities. The president of the African Development Bank himself said on a visit to London in January:

“As wealth grows in Africa, it leads to wealth growth for the UK.”

He pointed out that our strong trading and cultural ties give British investors a head start in Africa, where, as he put it, there are

“huge markets, brimming with enormous investment opportunities.”

It is therefore perhaps something of a pity that foreign direct investment from the UK to Africa has fallen by a third since 2015, but I hope that the Government’s commitment to the African Development Bank, as demonstrated by this new funding, will provide at least a nudge to investors to consider the potential for imaginative and bold action that could bring mutual benefit.

It is important that the British taxpayer has confidence that the money devoted to development is spent wisely and carefully. There have been too many cases in the past of waste, profligacy and worse. Wherever our development funds are sent, there must be thorough auditing of projects and robust analysis of their real-world impact on the people in greatest need.

[Mr Mitchell]

Does my hon. Friend agree that the prime way of ensuring that there is really good value for money, apart from all the structures that have been put in place, is the Independent Commission for Aid Impact, which was set up by the coalition Government in 2010? It is the taxpayer’s friend. It is independent of Government; it reports not to the Executive or to the Department but to Parliament and, at the moment, to a Sub-Committee of the International Development Committee. Does he agree that it is very important, for precisely the purpose he set out, that ICAI should be retained in full?

[Rob Butler]

I do indeed, and I take the point that my right hon. Friend makes. I was going to mention that I am indeed pleased that the Independent Commission for Aid Impact is currently conducting a review of the effectiveness of DFID’s support for the African Development Bank Group. It is perhaps a pity that it was not able to report before the decisions that will be taken today, but that is understandable given the limitations caused by coronavirus. As a general principle, it surely makes a lot of sense to have the independent scrutiny that my right hon. Friend refers to.

Additional scrutiny of how we spend development money is inevitable. As here in the UK we confront the worst recession we have known, it will be vital to demonstrate how supporting development initiatives is beneficial to us all. I feel confident that Ministers will ensure that that is the case with the moneys we are discussing. The Minister may even wish to provide me with some reassurance on that momentarily.

It is right that, even in difficult economic times at home, we continue to support those elsewhere who are much worse off. These funds for the African Development Bank and those for the International Development Association of the World Bank illustrate how Britain can be a force for good by making solid financial and political commitments that contribute towards economic development and social progress around the globe.