Government Overseas Aid Commitment: Private Investment

Desmond Swayne Excerpts

Tuesday 9th October 2018 Commons Chamber

[Penny Mordaunt]

I gave a lengthy speech this morning and there is plenty of detail in there. [Interruption.] It is online, so the hon. Lady can read it.

Let me be very clear about the rule changes we would explore. Currently, when we capitalise an investment instrument, we count it as official development assistance. When we make the investment, we do not. We are very happy with that—we have argued for it—and that is what happens now. In future years, however, once we have capitalised those instruments, we may wish to change the way we do it. [Interruption.] It is not double-counting; it is allowing the returns we make on those investments to be used more flexibly. We are very happy and it suits us at the moment to do this. The issue is that if we then reinvest those funds in development, they do not count towards the 0.7%, and if we take them out, to spend on the NHS or another domestic priority, it counts negatively. What we are arguing for is exploring, at this stage, changing the rules to allow us to do that.

In addition, we have to accept that, even with the combined total of our budget and those of other nations, we will not deliver the global goals unless we let the private sector do more. Currently, the £8 trillion in the City could be put to better use and may actually deliver higher returns for pension funds. They will do a huge amount of good in the developing world.

The hon. Lady asks me for examples. CDC, which I understand she wishes to abolish, is the oldest development financial institution in the world. Last year, it made investments of over £1 billion, which created 735,000 jobs. We need to create 18 million jobs every year until 2035 just to keep up with population growth in Africa, and that is what we need to do to eradicate extreme poverty. If the hon. Lady has a better suggestion on how to raise $2.5 trillion I would be very interested to hear it.

I am here not to make us feel good about spending aid money; I am here to eradicate extreme poverty. We cannot do that without business and we cannot do that without the private sector. Dogma has no place in this debate.

[Sir Desmond Swayne (New Forest West) (Con)]

If we are to avoid a growing army of underemployed, desperate and angry young people, we need 600 million new jobs over the next decade. Does the Secretary of State imagine that that can be provided without an enormous mobilisation of private sector investment in the developing world?

[Penny Mordaunt]

My right hon. Friend is right. We are entering into the final decade and the last push towards the global goals. We have to be realistic. If we are going to achieve them, and I want to achieve them, we have to let other people help.