International Development (Official Development Assistance Target) (Amendment) Bill [HL]

Lord Bates Excerpts

2nd reading (Hansard): House of Lords
Friday 18th November 2016 Lords Chamber

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, I thank the noble Lord, Lord Lipsey, for this timely debate on international development. It does not often happen in your Lordships’ House, but last business yesterday was the debate on international development in Africa in the name of the noble Lord, Lord Chidgey, and this is first business today. It is a welcome opportunity to flesh out, look again at and rigorously test the Government’s policies on international development.

It is absolutely right to place this in context. This is not a new debate; it goes back some time. My noble friend Lord Eccles referred to the history of the CDC going back 70 years. This particular pledge goes back to the UN General Assembly in 1970 and remained a commitment. I had not appreciated the point about the Liberal manifesto, but I do know that the 1974 Labour Government were the first to adopt it as an aspiration that they were seeking to achieve. However, it was not until the UN conference on financing for international development in Monterrey that serious impetus began to be given to that target. It was not until 2013, under the coalition Government led by David Cameron, that the pledge was met.

It is in the nature of good-quality debate that there will always be contributions that make one feel less comfortable and that nudge and challenge. I may be a member of the “aid crew”, as the noble Lord, Lord Lipsey, put it, but it is there because of the conviction that the best route out of poverty is economic development and education. It does not matter whether you are from Gateshead in Tyne and Wear or growing up in Tanzania, Kenya or any other part of the world, the facts are the same: economic development is based on education and that leads to less conflict. The more trade there is in the world the less conflict there will be. That is what we are focused on.

If I may say so, the noble Lord, Lord Lipsey, was a little uncharitable towards the role played by David Cameron. As a former Treasury Minister, the noble Lord may have a great deal of knowledge of the Treasury and he has written about those times. I will look up his book and take a closer interest in it. However, I was around the table when these policies were being developed when David Cameron first took over as leader of the Conservative Party and I can tell noble Lords that they were heartfelt. He initiated Project Umubano, a social action project in Rwanda, which many candidates from the Conservative Party went on. My noble friends Lady Hodgson and Lady Jenkin, who are in their seats, were part of it. Hundreds of people went on that project and saw at first hand what was being delivered there and it had a transformational effect. Led by the work of Andrew Mitchell, it resulted in a policy document called One World Conservatism. Whether you like the title or not, this was a genuine, deep and heartfelt recognition of the work which needed to be done by Government to fulfil our responsibility—in our enlightened self-interest—to the world’s poor. I have immense pride that it was David Cameron, supported by George Osborne, Andrew Mitchell and William Hague—now the noble Lord, Lord Hague—who delivered on that pledge as part of the coalition. It continues to be a Conservative Party manifesto pledge and we do not want to consider the notion that we might not be living up to that.

Additional legal rigour was given to this by the tremendous initiative undertaken by the noble Lord, Lord Purvis, in this House and Michael Moore in the other place. This brought forward the extra bit of steel needed to ensure that we live up to the obligations which were, as my noble friend Lady Hodgson outlined, “hard fought for”. Having been involved in some of those fights, I believe we are in a better place now. Having established and settled the argument over funding levels, we can now move our attention and gaze to the effectiveness with which those resources are being deployed and we welcome that.

I will set out our position on the Bill and then address some of the points raised in the debate. The UK’s Official Development Assistance investment is creating a safer, healthier and more prosperous world and is something Britain can be proud of. It is not in Britain’s interests to allow states to become ungovernable or unstable, nor allow their paths to development to be blocked. The noble Lord, Lord Hollick, referred to it having a “catalytic” and “enabling” impact. We believe that, at its best, that is exactly what it should be. It should also apply to all other programmes.

With more fragile states across the Middle East and Africa vulnerable to insecurity and terrorism and protracted crises, driving people from their homes in search of a better life—as the noble Baroness, Lady Sheehan, mentioned—the world is rapidly changing. The notion that this is the time to withdraw or back off, whether diplomatically, militarily or through our development programme, is flying in the face of reality. This is a time when this country needs to be more outward-looking and globally engaged than ever before. In many ways that is the argument I use to my noble friend Lord Blencathra. Britain’s strategic leadership on the global stage is more important. We cannot sit back and wait for international problems to arrive on our doorsteps. An outward-looking and globally engaged nation must take action to tackle these issues at source. The UK’s leadership in responding to global challenges is critical for eliminating extreme poverty and firmly in the UK’s national interest.

Delivering 0.7%, alongside our world-class Diplomatic Service, is a very important commitment. Sometimes there is argument and contention around the 0.7% figure. However, the Government also have a 2% commitment on defence expenditure. I do not hear many noble Lords, including on the Benches behind me, questioning that commitment. They think it is absolutely right in a world that is less safe that the safety of this country and of other people around the world is a priority, so we make that commitment of 2%, and 0.7% is part of our aid policy on that. We have, of course, our permanent seat at the UN Security Council and our historic relations with the Commonwealth. It has enhanced Britain’s role in the world as a global leader on development, as the noble Baroness, Lady Nicholson, said. We have a hugely influential voice in this field. I was particularly interested in her suggestion that we ought to look at ways of giving our aid greater visibility.

Many noble Lords spoke of their visits to different countries. The noble Lord, Lord Judd, talked about his experiences in Mozambique and the noble Baroness, Lady Hodgson, talked about the Bekaa valley. The noble Lord, Lord Purvis, spoke of his experiences and the noble Lord, Lord Bruce, talked about his extensive work and travelling during his time as the distinguished chairman of the International Development Committee in the other place. The right reverend Prelate the Bishop of Winchester talked about east Africa. When we visit these places, we may ask why there is not greater visibility for the UK taxpayers’ contribution in these areas. Of course, sometimes that is due to safety concerns for the staff working in an area delivering the aid. However, in certain cases I think we could do better in projecting our soft power in the way the noble Baroness suggested. I undertake to look at that.

Aid had a significant impact in transforming the lives of the world’s poorest people between 1990 and 2010. In the world today, 88% of people have enough food to eat and lead healthy lives—up from 76% in 1970. Fifty-four million more children started going to school in sub-Saharan Africa between 1999 and 2011. Millions more women now have access to family planning, and the number of women dying due to complications during pregnancy and childbirth fell by 47% between 1990 and 2010. Britain’s own aid programmes have already delivered education for 11 million schoolchildren and provided 69 million people with crucial financial services to work and trade their way out of poverty. On that point I again come back to my noble friend Lady Hodgson, who asked about some of the microfinancing initiatives, which those of us who have looked at this area consider are often the most effective, yet sometimes it seems as if the funding is biased towards the huge organisations with great delivery capacity. While that may of necessity be the case, a lot of those large organisations are working with small communities in small villages, and with individuals within those villages, particularly with women, to bring about transformational change.

Meeting the internationally recognised—OECD-wide—approach to calculating 0.7% gives us the moral authority to hold others to account for failing to meet their own promises. This is critical in convincing others to step up and contribute more to often underfunded humanitarian crises. I was particularly struck by references to this moral authority and how it is developed. It was most visibly in evidence at the regional conference in London to secure support for Syria held in February 2016, which secured pledges of more than $12 billion, the largest amount raised in one day for a humanitarian crisis. At the conference, the then Prime Minister David Cameron announced that the UK would double its own pledge to the Syrian crisis from £1.2 billion to £2.3 billion. The best kind of leadership you can ever have on the world stage is leadership by example. I believe that that is what happened there.

I am very grateful to the noble Lord, Lord Collins, for recognising the unequivocal commitment of the Secretary of State, Priti Patel, to overseas aid and to the 0.7% target, which she reiterated as a manifesto pledge. I know from the visits that she has made in recent weeks to Kenya, and last week to Sierra Leone, what a profound impact those countries have had on her as she has seen the effectiveness of DfID’s work around the world, as the noble Lord Hollick, mentioned. If the Bill were to be passed it could be perceived that, if we are to hit an average figure rather than an annual figure, certain years will be under the average. Therefore in those years we would fail to meet the obligation which has resulted in our having such a great effect on the world stage. That point was excellently underscored by the noble Lord, Lord Purvis, who said that there was a considerable downside to the proposals in the sense that we would lose the authority conferred by being a 0.7% committed donor. He also said that there is no visible upside, certainly in years three, four and five, as he rightly described the effect that procedure would have. As I have already noted, the five-year average target implies that in some years we will not meet that 0.7% figure. However, we are committed to ensuring that that happens.

In terms of annual reporting, the noble Viscount, Lord Eccles, said that living with two different year ends is something that has to be done in meeting an OECD DAC commitment. I was particularly interested in that not least because of my noble friend’s great experience in this area, having previously been for many years the general manager—as I think it was called then —of the CDC, or chief executive, as we would now term it. I was particularly interested when he asked whether we were doing too much reporting, overdelivering and duplicating. I am happy to look at that again. We will be able to examine the reporting requirements in the CDC Bill, which is now going through the other place, and debate whether they are too onerous.

DfID is one of the most effective aid delivery organisations in the world. It is widely respected. It spends around 1% of its budget on administration. It is rigorous in the way that it delivers its work. There are welcome elements to this Bill, which, if it is your Lordships’ will that it proceeds to Committee, we could explore further. For example, we could explore the right reverend Prelate’s comments on outputs and outcomes. We could also look at the work done by the Independent Commission for Aid Impact and its reports in this area and the work and scrutiny of the Select Committee. We believe that the work achieved through having this 0.7% target, and the impact that enables us to have on the world stage, are something we ought to cling on to and build on. I undertake to write to noble Lords and consult officials to see whether there are any issues I have not dealt with. I am grateful to the noble Lord for giving us the opportunity to talk about this issue and the reasons why we have got to where we are. As the noble Lord, Lord Collins, said, we should not for one minute be complacent. We need to recognise that we are dealing with UK taxpayers’ money and we need to make the case for what we are doing, as so many have done this morning and will continue to do. We are grateful to them.

[Lord McColl of Dulwich]

Would it be possible to have an arrangement whereby, if the budget is not completely spent in one year, it could be carried over to the next year for agreed, acceptable projects? The reason I suggest this is because when the consultants took over the running of Guy’s Hospital some years ago, we had a legal agreement that any money not spent could be carried over but only for agreed, acceptable projects.

[Lord Bates]

That is an interesting point. In reality, when the allocation is made a lot of the funding goes to multiyear projects, because these are often more effective than one-off events. They are multiyear, which is important—so in a sense, as part of the overall commitment, there is a carrying-over of programmes. We believe that the 0.7% commitment needs to be met. To do that, we need to stand by the OECD DAC rules, and we committed to doing that both in legislation and in our manifesto.

Africa: European Union Economic Partnership Agreements

Lord Bates Excerpts

Thursday 17th November 2016 Lords Chamber

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, I thank all who have contributed to this excellent debate, particularly the noble Lord, Lord Chidgey, for leading it off. I also pay tribute to his work as the co-chair of the all-party parliamentary group. He has done a lot of work in this area, including his undertakings and research into the overall effectiveness of EPAs. We will certainly be following that very closely and welcome the opportunity to have dialogue with the noble Lord. I will begin by making some general remarks and then, in five minutes or so, deal with some of the key points that were raised during the debate.

Free, fair and open trade is fundamental to the prosperity of the United Kingdom and the world economy. Trade is a driver of growth and development, and growth is one of the most effective means of raising incomes, creating jobs and reducing poverty. More than a decade of fast economic growth has helped cut poverty rates in sub-Saharan Africa from 56% in 1990 to 43% in 2012. This growth benefits sub-Saharan Africa, but also British business, as it gives opportunities for investment. It is for these reasons that the UK is committed to ensuring developing countries can reduce poverty through trading opportunities. The right reverend Prelate the Bishop of Winchester spoke about the importance of education and economic development. We would say the combination of those two elements is the surest possible route out of poverty.

Agriculture, which several noble Lords referred to—particularly the noble Lord, Lord Boateng, based on his personal experience—will be a major source of growth in many countries, accounting for an average 15% of GDP and 30% of employment, 60% of which is women’s. We are taking an increasingly commercial approach to the development of agriculture in Africa by strengthening the commercial viability of smallholders and accelerating investment in agribusiness. We are working to ensure that women—a particular concern raised by the noble Lord, Lord Boateng—are economically empowered across the sector, that land tenure and other property rights are secured, that investments are responsible and resilient to climate change, and that our support across the food system is helping to deliver our nutrition goals. Domestic and foreign investment in agriculture is growing, but more is needed for sub-Saharan Africa to realise its potential. Trade can help unlock that potential.

The noble Lord, Lord Boateng, also talked about the historic poor yields in African agriculture. African countries rightly aspire to add more value and to raise those yields by investing in the latest technology. This will require greater integration into global trading systems. Regional and global value chains, especially for horticulture, which the noble Lord, Lord Collins, mentioned, function on the basis of quick and efficient trade logistics, and for most of Africa this will require substantial improvement. By providing additional access to the markets of developed countries to sell their produce to, and access to global and regional supply chains, we can create vital opportunities for the world’s poorest people to work their way out of poverty.

UK leadership has ensured that the EU offers the world’s most generous package of market opening for developing countries. Some 75 countries, 44 in Africa, currently enjoy duty-free access to the EU market of half a billion people through the EU’s Everything But Arms trade preference scheme provided for the least developed countries, as mentioned by the noble Lord, Lord Collins, or the negotiated economic partnership agreements. The UK is a long-standing supporter of the EU’s EPAs as development-focused trade deals. They can put our trading relationship with African partners on a more equitable, mature and business-like footing, immediately opening up EU markets on a permanent basis, providing support to help countries use the advantages and, over time, opening up access to quality products and technology from European firms.

However, as the noble Lord, Lord Chidgey, rightly pointed out, these negotiations have taken too long. For now, EPAs are applicable to only 13 of the 48 candidate countries, with eight having been finalised only in the last couple of months. The noble Lord, Lord Boateng, said that the jury was still out. One of the reasons why the jury is still out is that it has just gone out. A lot of these deals have only just come into effect in the past couple of months. We need to keep their benefits under review but the length of time is clearly a concern. Concerns have also been expressed, as the noble Lord, Lord Chidgey, mentioned, about the fear of negative impacts of EPAs in Africa, but the UK Government believe that where these agreements are correctly implemented and supported they can provide a lasting framework in support of sustainable growth and poverty reduction.

The World Bank estimates that over recent decades, income grew three times faster in developing countries that opened up their markets than in those that maintained barriers to trade. I welcome the noble Baroness, Lady Sheehan, to her new role; we are both new to the issue, but we both care passionately about it. She talked about the importance of evidence, and asked where the evidence was that the increase in living standards that we want is actually being delivered. We believe it exists in the fact that the economies that opened up grew faster. Greater access to EU intermediary goods, equipment and machinery will help African firms’ competitiveness. A reduction in fertiliser tariffs, for instance, should help to support agriculture efficiency. African businesses can benefit from lower input prices to help to realise a net increase in profits.

At the same time, we must of course be mindful of the different stages of development that our partners face, a point made by the noble Lord, Lord Collins. That is why the EPAs allow 12 to 20 years for the gradual and controlled removal of our African partners’ tariffs, a point that the right reverend Prelate the Bishop of Winchester was particularly concerned about, and rightly so. These are not directly comparable; they are asymmetric, with a bias to development from the poorest countries. It is right and proper that that should be so. Even more, the EPAs exclude agricultural products and other strategically important sectors, as chosen by our partners, from any requirements to lower tariffs at all. For example, west African negotiators chose not to lower tariffs to EU products such as meat, poultry, fish, dairy, vegetables, cocoa, apparel, pharmaceutical products, cars and many more. The noble Baroness, Lady Sheehan, referred to the trade imbalance between west Africa and the EU, but within the EPAs there are certain guarantees that in our opinion will help.

EPAs also contain safeguards against possible excessive EU competition; the noble Lord, Lord Chidgey, went somewhat further and talked about the strong, almost threatening approach that was taken. African Governments can take actions such as temporarily raising tariffs or applying quotas to protect domestic businesses, producers and food security. In addition, the EU has agreed not to subsidise any of its agricultural exports under an EPA. African states have agreed to extend to each other the same levels of liberalisation as the EU and EPA, aiming to encourage regional integration and prevent increased imports from the EU displacing imports from neighbouring economies.

In addition, EPAs provide for further co-operation on issues such as customs, standards, trade and services, agriculture, fisheries, investment and business environment. Opening dialogue in these areas allows EPAs to provide greater depth and scope for wider benefits than one-way trade preference schemes.

I turn to the EU referendum, which was rightly raised by many noble Lords. Leaving the EU offers a major opportunity—in fact, I think that term was used by the noble Lord, Lord Boateng—for the UK to send a positive signal that our markets are open and that we are determined to promote business with the developing world. The noble Baroness, Lady Sheehan, asked me to reference this, but we now have a Department for International Trade, which is charged with promoting UK exports in goods and services to support a growing economy that creates wealth for all. That is its job remit; we have a department for that. It will obviously be taking the lead in ensuring that these types of trade arrangement happen.

In similar vein, several noble Lords, including the noble Lord, Lord Collins, referenced the importance of the Commonwealth. We recognise that many Commonwealth countries are current or potential members of EPAs, with nine currently in Africa, such as South Africa, Botswana, Ghana, Cameroon and Mauritius. If the EPAs in east and west Africa are implemented, that number will rise to 15. We have set as a priority to increase Commonwealth trade and investment. Commonwealth trade is estimated to surpass $1 trillion by 2020, but it could be more, and we believe that EPAs could be part of that.

On the specific point about the process, of course, at the moment the UK remains part of the EU and we therefore remain governed by the EPA arrangements that are in place. The EU still supports the EPAs, and while the UK is still a member of the EU, all rights and obligations will apply, including our commitments to developing countries through the EPAs. The UK enjoys strong trading relationships with many developing countries, and we will look to strengthen those ties in future. That will be part of the negotiation package as we move forward.

Time is moving quickly, but let me deal with a couple of issues which I have not yet touched on. We accept absolutely that partnerships have been literally at the heart of EPAs. They must be partnerships: the right reverend Prelate was right to mention that. The Cotonou partnership agreement in 2000 was the start of this, and it is essential that the spirit of partnership continues. We believe that tax revenues lost can be raised through increased exports to the EU, which will increase the revenue into the area. In relation to the Africa Free Trade initiative raised by the noble Baroness, Lady Sheehan, the All-Party Parliamentary Group on Trade Out of Poverty launched its inquiry in March 2016, and Ministers have been asked to participate. The final report was issued in October, we support it and DfID intends to keep working in each of the main thematic areas—primarily cutting trade costs, connecting markets, enhancing productive capacity and using trade to drive inclusive economic growth.

Time has gone. I undertake to read the debate very carefully with officials to ensure that we have adequately addressed the points raised. I again thank the noble Lord, Lord Chidgey, for giving us the opportunity for this timely explanation of this very important economic and development relationship with Africa.

House adjourned at 6.54 pm.

St Helena: Airport

Lord Bates Excerpts

Monday 17th October 2016 Lords Chamber

[Lord Foulkes of Cumnock]

To ask Her Majesty’s Government when they now expect commercial flights to start at the airport in St Helena.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, scheduled commercial flights will begin when the conditions are considered safe to do so and the St Helena Government are able to contract an airline with the right aircraft and regulatory approval so that St Helena can develop its tourism industry and become less dependent on UK financial support.

[Lord Foulkes of Cumnock (Lab)]

My Lords, I warmly welcome the noble Lord back to the House—

[Lord Foulkes of Cumnock]

I understand he has raised a huge amount of money for charity, which we all commend him for. I also welcome him to the Front Bench. It gives me hope—and I hope it will not be shattered. I want to help him today. Is he aware that Atlantic Star Airlines is willing to start a commercial air service with British Aerospace Avro RJ100 jets—a British company with British jets? It is sending a test plane this week and it reckons it can start the service within weeks. Will the Minister look into it and, if it is possible, get the service started as quickly as possible?

[Lord Bates]

First, I thank the noble Lord for his warm welcome. As he is a distinguished alumnus of the Department for International Development, as a Minister in that department, I particularly appreciate his praise. I know he has taken a great interest in the specific point he raised, and we are grateful for that. He mentioned Atlantic Star Airlines. We are aware that that flight is heading out from Zurich and is due to arrive on Friday this week. It is a kind of test flight, I suppose. The contracting of the commercial arrangements is a matter for the St Helena Government, but Her Majesty’s Government have made it very clear that we want to find an operator as soon as possible so that the airport can begin commercial flights and improve tourism on that island which we both care so much about.

[Lord Forsyth of Drumlean (Con)]

My Lords, I welcome my noble friend back to the Front Bench and to the service of the House. I suggest to him that, given the assiduous nature of the noble Lord, Lord Foulkes, on this matter, it might be a good idea to arrange for him to be sent to St Helena on the first commercial flight.

[Lord Bates]

I think that exile is a matter for the Foreign and Commonwealth Office and negotiated through the usual channels.

[Lord Shutt of Greetland (LD)]

My Lords, I, too, welcome the noble Lord to his new role. It is now nearly six months since the announcement that the airport was not going to open. It has been a disastrous six months for St Helena, not knowing about the airport or whether the sea service was going to continue. Bearing in mind that the first call on the overseas aid budget is to look to the overseas territories, does the Minister agree that it would be right for some of those extra resources for overseas aid to be used to assist people who are trying their best in the tourism industry in St Helena, which was bereft of tourists this summer, so that those businesses can be kept afloat?

[Lord Bates]

Those specific points about compensation are a matter for the St Helena Government, and representations should be made there. But the Government are committed to this. That is why, when asked about the flight, I said Her Majesty’s Government would be looking to provide a subsidy during the initial period to ensure that that flight can operate. That is why we have also said that we are committed to ensuring that the Royal Mail Ship “St Helena” continues in service until June next year and why we have also commissioned these additional pieces of research to look particularly at the issue of wind shear—which, of course, is stopping some of those flights from coming in. I totally agree with the noble Lord on the importance of this.

[Lord Collins of Highbury (Lab)]

My Lords, a fully functioning airport is absolutely vital, but there is an important lesson to be learned here. I asked the previous Minister about the contract for the airport and what risk assessments were undertaken. We were assured originally by the last Government that the contract would shift all the risk to the private contractor. It is important for the future that we learn the lessons from this huge and important investment so that we do not make the same mistakes again. Can he assure us that that will happen?

[Lord Bates]

I have read the remarks that the noble Lord made in the debate in, I think, June 2014, about the contract with Basil Read. It is important to say that the problem is not necessarily with the airport—the structure is good, strong and sound—but with the wind shear. It is important, particularly in areas of international development, that we ensure that British taxpayers’ money is spent wisely. That is why the Major Projects Authority and now the Infrastructure and Projects Authority have undertaken gateway reviews every year. The noble Lord may also be aware that the National Audit Office looked into this airport in June this year and published a report to say that the business case put forward by the previous Labour Government was in fact sound.

[Lord Spicer (Con)]

My Lords, if they can build a runway on St Helena in the wrong place, why can we not build one over here in the right place, at Heathrow Airport?

[Lord Bates]

Discuss the term “the right place”.

[Lord Anderson of Swansea (Lab)]

My Lords, I join in the chorus of praise and welcome for the noble Lord. He actually tries to answer questions, which is a major benefit. In respect of the contract, a major mistake has potentially been made. Everyone knew that the winds were extremely fierce around the islands, so why was nothing done? What lessons have been learned and was anyone held responsible for what clearly was a failure of preparation?

[Lord Bates]

The noble Lord says that, but the wind was tested by the technical advisers and advice was taken from the Met Office. The issue came to light only when flights attempted to land in April, and of course we have to have the highest regard for public safety. It has been approved by Air Safety Support International as a category C airport, which is the same as London City Airport or Gibraltar Airport, for example. It is possible to see that it is used. Lessons need to be learned, of course, which is one of the reasons why, at the instigation of the noble Lord, Lord Foulkes, we are having a meeting for all interested Peers on 25 October between 1 pm and 2 pm in Committee Room 10A. I am very happy to extend that invitation to the noble Lord.