Overseas Aid (Private Sector Contracts)

Ivan Lewis Excerpts

Monday 11th March 2013 Commons Chamber

[Mr Ivan Lewis (Bury South) (Lab)]

(Urgent Question): To ask the Secretary of State for International Development to make a statement on her Department’s policy on tied aid, and the criteria applied to private sector contracts in the light of briefings over the weekend and her recent speech to business leaders at the London stock exchange.

[The Secretary of State for International Development (Justine Greening)]

I am delighted to update the House on my speech today. There is no change on the Government’s policy on tied aid. I was clear in my speech on 7 February, and again this morning when I said:

“I am not talking about tied aid. I do not believe that is the way to achieve good, sustainable development...It’s the wrong way to go about things.”

That answers the hon. Gentleman’s first point.

Department for International Development contracts are awarded in line with EU procurement regulations. The vast majority are subject to competitive tender. The evaluation process for large contracts includes an assessment of technical and commercial criteria, which are published at the outset of the tender. That answers his second question.

In relation to today’s speech on pursuing poverty reduction and an end to aid dependency through jobs, it is clear that economic growth is vital in developing countries. Wherever long-term per capita growth has been higher than 3%, we have seen significant falls in poverty. Sustainable public services in the developing world, as here in the UK, need a funding stream of tax receipts, and that means a thriving private sector. Today, therefore, I have been discussing how DFID will put increased emphasis on economic development, including through reducing overall barriers to trade and investment; unlocking the ability of entrepreneurs and business people in developing countries to drive economic growth through their own businesses; and fostering greater investment by business in developing countries and those in the UK. I want more businesses, including those in the UK, to join the development push with DFID. We all have the opportunity to help build up responsible trade with developing countries.

Finally, may I welcome the positive response from organisations such as CARE International and the Overseas Development Institute? The former said that

“it’s no longer an option for development agencies to view business as operating in a parallel universe”.

[Mr Lewis]

I would say to the Secretary of State that economic growth matters in all countries, although I thank her for her response, despite the fact that these policies should have been announced to the House first.

This year should have been a source of unity and pride for decent Members on both sides of the House and many campaigners across the country. This year, Britain should once again have been a light unto the nations, with the Government honouring Labour’s historic 0.7% commitment. Instead, over the past fortnight, we have seen two cynical interventions that threaten to undermine the UK’s global reputation for progressive development: first, the Prime Minister’s suggestion that holes in the defence budget would be plugged by aid money; and, secondly, the Secretary of State’s ill- advised briefings over the weekend, ahead of her speech today.

We support the private sector’s central role in stimulating jobs and growth in developing countries and welcome the fact that UK companies are seeking to access growing markets, but we are vehemently against tied aid, trickle-down economics and growth that has no focus on inequality or sustainability. I have several questions for the Secretary of State, therefore: first, why did she brief a return to tied aid over the weekend yet deny it today? Secondly, will she assure the House that no company engaged in tax dodging will receive any funding or support from DFID? Thirdly, will she confirm whether companies that are to receive DFID support will have to demonstrate decent employment practices, including acceptable levels of pay to workers in developing countries, throughout their supply chain? Fourthly, under what circumstances does she think that a British company should be awarded a contract in a developing country without having to compete in a fair and transparent tendering process?

As a substantial increase in the DFID budget is set to take effect, these interventions have nothing to do with the national interest or our commitment to the world’s poorest, but are an act of desperation by a Prime Minister who once earned cross-party respect for making the moral case for aid. He is now so weak that he is reduced to misleading the British people that UK aid in the future will largely be devoted to defence and UK business. The big society is gone, the green agenda is gone and now sound development policy has been undermined to satisfy the Tea party tendency in his party. It is the same old Tories.

[Justine Greening]

The Member asking an urgent question normally has some additional questions, but I do not think the hon. Gentleman asked any. He talked about the Daily Mail. We know from his time with the shadow Culture, Media and Sport brief that he is keen on muzzling the press. I noticed that, in spite of all his rhetoric, ultimately he supports what I am saying about getting business more involved in the development push. I must remind him, however, that it was this Government, not the previous Government, who set up a private sector department within DFID. He had 13 years to do that, but failed.

I also noticed how quickly the hon. Gentleman turned to highlighting the risks of businesses getting involved in development. The Government seek to mitigate those risks and are working hard on initiatives on transparency and governance. He will be aware of the ethical trading initiative, which looks at how we can ensure that companies get involved responsibly. I want to set out today not only how we can take steps to mitigate those risks, but how we can tap into the huge opportunities that business, particularly UK business, can offer developing countries to help them develop and, in doing so, lift the poorest people out of poverty. I believe that is not just in the UK national interest—although frankly it is in our national interest to be market-making and to see more economies in this world that we can trade in—but in those people’s interest too. Men or women in developing countries say they have one top priority: to get a job. We can work with business on that.