Global Poverty

Hugh Bayley Excerpts

Thursday 1st July 2010 Commons Chamber

[Mr Mitchell]

I think that the right hon. Gentleman can do a lot better than that. He will have to wait until we issue our proposals ahead of the Kabul conference, and then he will be able to judge them on their merit.

In addition, our aid budget should be spent where it is needed and where it can be best used. We have therefore started a review of all our bilateral aid programmes so that we can be clear that money is being properly targeted and worthwhile results obtained. We have already announced that we will end aid to China and Russia as soon as it is practical to do so. We want to work with them as partners, not as donors and recipients. We cannot justify giving taxpayers’ hard-earned money to a country that has just spent billions hosting the Olympics or is a member of the G8. In that context, my hon. Friend the Member for Bournemouth East (Mr Ellwood) raised India. We will be looking very carefully at the Indian budget, and we will issue any new proposals as part of our bilateral review.

[Hugh Bayley (York Central) (Lab)]

When the International Development Committee wrote its most recent report about aid to India, which is currently our biggest bilateral aid receiving partner, we did not call for an immediate end to the aid programme in India but proposed that between now and 2015—the millennium development goals date—the aid programme should be changed so that there was no longer a cash transfer after that date. The Secretary of State’s remarks suggest that he has not decided to go along with the Committee’s recommendation. What are his plans, and why has he taken that decision?

[Mr Mitchell]

I understand the hon. Gentleman’s interest in India; he was a distinguished member of the International Development Committee. I have seen that report, which makes a very valuable contribution and will be considered as part of the bilateral review of our India programme.

We are conducting a similar review of our multilateral aid budget. There are good reasons for working through international bodies, but I want to be certain that all our funding is being used to support programmes that align with our priorities, and that operational efficiency is as strong as it should be. In New York on Monday, in meetings with the heads of the United Nations Development Programme, UNICEF and the United Nations Population Fund, I had the opportunity to set out the reasons for this review. I have also spoken to the heads of other multilateral agencies, including the World Food Programme. At the Foreign Affairs Council in Luxembourg, I took the opportunity to discuss our plans with Commissioner Piebalgs of the European Union. Multilateral organisations that are performing well for the world’s poorest people stand to gain from this review, but if such agencies are not performing we will scale down funding, or even stop it altogether. Our duty to the world’s poorest people, as well as to the British taxpayer, demands nothing less.

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[Hugh Bayley (York Central) (Lab)]

It is almost five years to the day since the Gleneagles summit, which was a high point in the UK’s influence in global development policy. We led by example and we secured commitments from the other G7 members to double their aid and reach the UN’s 0.7% contribution target. Allied to that, the European Union gave a parallel commitment in the same year. I therefore deeply regret that the Gleneagles commitments were dropped from this year’s G7 communiqué, because that has given the impression, at least to some non-governmental organisations—the shadow Secretary of State mentioned Oxfam and Save the Children—that our country’s development policy under the coalition Government has fallen at the first hurdle.

I will say that the Prime Minister is right to lay continuing emphasis on the millennium development goals, as Tony Blair and my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) did before him. However, I say to the Secretary of State that that is not an alternative to doubling aid, because the Gleneagles commitment on doubling aid was a means to an end; it was designed to get the world’s major donors to provide the resources to make meeting the MDGs possible. We simply will not get all children in least developed countries into primary schools if that doubling of aid commitment is not met; nor will we be able to reduce by three quarters the ratio of mothers dying in childbirth—that MDG is the most off track.

I therefore wish to focus on what I believe the Government should do to re-engage other G7 and European Union countries in order to get them to honour their commitments, and to build a continuing profile for our country as a development leader. There are two opportunities to do that over the next six months. The first is to use the negotiations within the World Bank on the 16th round of the replenishment of International Development Association funding—IDA16—to persuade donor countries to increase their financial commitments to the World Bank’s next three-year IDA period. IDA is the World Bank’s window for lending to least developed countries. This matter is important because the World Bank is the world’s biggest multilateral development agency and, for all its faults, we will not achieve the MDGs unless IDA has increased resources to do the work it does. The United Kingdom is in a particularly strong position to influence others on commitments to IDA, because in the current IDA round—IDA15—we were the world’s largest donor.

IDA16 will doubtless be discussed at the annual meeting of the World Bank in October and will probably be finalised at the spring meeting next year. IDA16 is particularly important in relation to the MDGs, because it will cover the last three-year period leading up to 2015, which is the target date for implementing the MDGs. Ending up with an IDA16 with less money pledged than in the current IDA round would limit the opportunity of donors to ensure that the MDGs are met. So I hope that the Minister of State’s response will set out the Government’s plans to talk to their opposite numbers in other G7 and EU countries and to seek from them the assurance that they will make commitments to IDA.

I chair an international parliamentary body called the Parliamentary Network on the World Bank, which is a network of some 1,200 parliamentarians, roughly half from developing countries and half from developed countries. We seek to hold the World Bank and the International Monetary Fund to account, especially to parliamentarians.

[Mr Andrew Mitchell]

May I ask the hon. Gentleman a serious question on this point? On what basis does he believe the Government should decide on the amount of funding for the IDA replenishment? What is his view on the mechanisms by which we should reach that conclusion?

[Hugh Bayley]

I would like our Government to contribute to IDA16 at least the same proportion of their development finance during the three-year period in question as the UK contributed to IDA15. In other words, it would be more money in real terms but the same proportion of UK aid overall. That would be a good starting point. If the UK were to make such a commitment, implying an increase in our contribution to IDA for the crucial three-year period leading up to 2015, we would be in a strong position to seek commitments from other development partners. I know that, in reality, some G7 countries—Italy, for instance—have made very negative decisions on development spending. There are others, however—including France, which was broadly on track, although it might have slipped back a bit now—that we ought to be able to persuade to make a firm commitment in relation to IDA.

I can make an offer to the Secretary of State. Through the Parliamentary Network on the World Bank, I have been one of the architects of a campaign among parliamentarians in countries north and south to raise the question of the IDA16 replenishment in their Parliaments, and to seek commitments from donor country Governments to debate the financial commitment they will make to IDA16. We are also seeking a serious debate in the Parliaments of developing and developed countries on what can be done to improve the aid effectiveness of the World Bank’s IDA programmes, building on the Paris declaration, the Accra programme of action and the findings of the World Bank’s own mid-term review of IDA15. That review contained some good proposals about how the World Bank could achieve more with the money that it already has.

I would also like to see the introduction of a peer review mechanism, so that one World Bank office can review the performance of another, in order to drive up aid effectiveness. I would like parliamentarians in each country to have a role in these processes. In Ghana, for example, one would expect the country office of the World Bank to report to parliamentarians in Ghana. That is not to say that the constitutional relationship should change. The World Bank is owned by its shareholders, and they are Governments. In relation to achieving greater aid effectiveness, however, we want to see more openness and transparency.

We are going to run the campaign as well as we can and in as many Parliaments as possible, in the north and the south, during the period of discussion on the IDA replenishment. I hope that the UK Government will support us. I have already written to the Secretary of State to ask him to come to the Parliamentary Network on the World Bank’s annual conference in December as a keynote speaker. We are also about to launch a call to action to publicise what we are doing. If he were able to provide some sponsorship and support for that in July, or some time soon, we would welcome that.

[Malcolm Bruce]

The hon. Gentleman is a valued member of the Committee, and his work with the Parliamentary Network on the World Bank is also valuable. Does he agree that the effectiveness of such a campaign will be dependent on the amount of information that is published and made available to Members of Parliament, especially in the developing countries? Does he welcome in principle the Secretary of State’s commitment to publishing the detail of the funding on the website? Will he reinforce my request to the Secretary of State for as much detail as possible, in order to illuminate what is going on and enable parliamentarians to be more effective?

[Hugh Bayley]

Yes, I do welcome that commitment, and I very much endorse what the Chairman of the Select Committee says. I should perhaps acknowledge that one of the reasons that the Parliamentary Network on the World Bank is able to launch its campaign is that the Department for International Development has supported the core cost of running our Paris-based secretariat, which is developing the campaign.

A second opportunity for the UK to re-engage with our G7 and EU partners and win commitments from them in the next few months will be in the work leading up to the September UN summit on achieving the millennium development goals. Again, it would be helpful if the UK Government were to set out their plans for any bilateral conversations with other EU and G7 Heads of Government and to seek to influence the statements those Governments will make at the UN summit on the level of their aid funding. There will certainly be an anticipation in the developing world that donors will come up with the resources to back up the conclusions of the summit on achieving the millennium development goals.

The Secretary of State said that the Government intended to legislate to commit the United Kingdom to providing 0.7 % of its gross national income for development aid. The Chairman of the Select Committee reminded the House that the Committee had examined the draft Bill and made a number of recommendations. The first of those was that the millennium development goals summit is an important opportunity to renew commitments to aid allocations. The Committee’s report also identified the real danger that, as aid levels increase to meet the 0.7 % target already agreed, more official development assistance will be spent through other Government Departments that are not subject to the UK’s International Development Act 2002. I agree with the Chairman of the Select Committee that we need greater clarity from our Government if a proportion of the increased aid to which they are committed is going to be spent by Departments other than DFID. We need reassurance that the goals of that spending will remain similar to those of DFID, and that poverty alleviation remains the key goal, whether the money is spent in DFID or any other Department. There has been a great deal of interest in this point among the NGO community.

We live in a globalising world. I do not need to remind hon. Members how much the world economy, environmental challenges and migration bind us all together; that is well understood. The centre of gravity of global politics is moving from west to east. In that context, “east” does not just mean Japan, China, Korea and India; it also means the Pacific basin as a whole, including California and British Columbia. Were there more time, I could say a lot about the UK and Europe’s need to recast their foreign and defence policy—to some extent, the UK Government will be doing that in their strategic defence review—but I shall just say a few words before I sit down about EU policy.

The European Union as a whole still has the world’s largest GDP—some $16.5 trillion a year, compared with $15 trillion for the United States, $5.5 trillion for China and $5 trillion for Japan. The UK’s share of that is some $2.5 trillion. The EU remains economically a big player on the world stage, but the UK on its own is rather less so. I believe that the EU punches below its weight. I am not in any sense a federalist, but I want the new European External Action Service, under Baroness Ashton, to deliver a great deal more for people living in Europe than the old directorate-general for external relations. I want to see a comprehensive approach whereby the European Union’s common foreign and security policy and common security and defence policy, as well as its development policy, EU aid policy and trade policy, all pull in the same direction to ensure that long-term development, state building, peace building, trade, foreign relations and reform of international institutions such as the UN also all pull in the same direction better to co-ordinate the development policies of the European Union and member states and to strengthen the poverty focus.

We have a strong poverty focus in this country, whereas the EU has a much less stronger one. Only half of EU aid goes to the least developed countries compared with about two thirds among donors as a whole. We need to minimise duplication and wasteful competition between individual bilateral donors, reduce red tape and increase the effectiveness and cost-effectiveness of our aid. Now, 60% of all the world’s aid—some €50 billion out of a total €80 billion—comes from Europe, both from EU member states bilaterally and from the EU acting on behalf of the Union as a whole. If the world is to succeed in achieving the millennium development goals by 2015, the EU and its member states must deliver more with the resources that are already committed to development as well as increase their spending to meet the commitments given at Gleneagles.

The Government are in a position to use the EU to multiply the value and effectiveness of aid from member states. It would be wrong, in my view, to back away from the EU or to reduce the UK’s contribution to EU development programmes. Our aid alone, however well spent, will not be enough to ensure that the least developed countries achieve the millennium development goals. Glorious isolation would make us less influential and less effective than concerted action to get the new European External Action Service to improve the EU’s performance.