Commonwealth Development Corporation Bill

Tommy Sheppard Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Tuesday 29th November 2016 Commons Chamber

[Tommy Sheppard (Edinburgh East) (SNP)]

It is a pleasure to follow the right hon. Member for Cities of London and Westminster (Mark Field). It is quite pleasant to be in the Chamber listening to the debate, because even though we appear to have differences over tactics and policies, there does seem to be some agreement on the overall objectives that we are trying to achieve, and I very much welcome that.

As far as I can recall this is, as my hon. Friend the Member for Glasgow North (Patrick Grady) said, the first opportunity we have had in this Parliament to discuss the wider strategic direction of the Department. I welcome the fact that the Government have achieved the 0.7% target. I commend them for doing so and providing an example to the rest of the world, particularly to our partner nations, to encourage them to do better with their aid budgets. Now that the Secretary of State is back in her place, I congratulate her and welcome her conversion to supporting her Department’s aims, rather than continuing with her previous attitude.

I was first exposed to the idea of international development as a kid at school in the late ’60s and early ’70s, when my mum was an enthusiastic participant in Christian Aid Week. I remember her spending a lot of time trying to raise money for Christian Aid to support projects in southern and eastern Africa. That was a long time ago, when I was very young, but I thought it was remarkable that, despite the fact that many people in my community lived in straitened circumstances, there was a common decency—people understood that there were always others who were worse off and that they had a common humanitarian responsibility to make some effort to assist, no matter how small.

Even in those days, there were critics of aid—of Christian Aid, Oxfam and all the others—who took a less selfless and more parsimonious attitude. Their criticism was twofold. They questioned whether the aid was actually going to the people in the destination countries who needed it most, and there was a continual suggestion that the people working in aid and organising the efforts were lining their own pockets.

Many of our NGOs—Christian Aid, Oxfam and others—have had to work for the last 40 years under the veil of those accusations. They make quite sure that they can counter those accusations and demonstrate that they are directly involved in projects in the countries that need it and that they work with the people in those countries to achieve sustainable development. They have also had to make public details of their organisation and cut their administrative costs to the core, so that they can demonstrate that they are delivering the maximum number of pennies per pound for the purposes for which that money was given.

I commend all those NGOs for doing so, but here is the problem with the CDC that we need to address. This does not apply to the majority of the projects in which the CDC is engaged, and it is not the CDC’s objective, but in quite a few cases, and not just occasional instances, public money—taxpayers’ money—has been used for purposes that people such as my mum would have difficulty comprehending. How can we justify, for example, the use of $3.5 million to support the development of a gated community in El Salvador for the super-rich? How can we justify the development in Nairobi of the Garden City Village and the shopping malls—$24 million, in that instance? How can we justify the development in Mauritius of the ocean village, with apartments costing a minimum of half a million dollars? It is difficult to hold those examples up and say that we are doing the right thing.

We need to make sure that that does not happen again. I have had arguments with people who justify such projects on the basis of the trickle-down theory. They say, “It may be a five-star hotel in an area of desperate deprivation, but look at the jobs that are being created.” Anyone who seriously thinks that an investment of $20 million or $30 million to create 50 low-paid service jobs in a hotel is an efficient use of aid money needs to re-examine their priorities. Let us assume that we do not have to engage with that neo-con argument.

I am not simply talking about things not being achieved; the situation is worse than that. By spending money on such projects and making mistakes with them, we may replicate and ingrain some of the structural problems that prevent us from raising the lot of the mass of the population in the first place. We need to be absolutely clear that such projects should not be some sort of international welfare scheme for capitalism, where we allow people to get super-rich while the poorest stay where they are or, in relative terms, possibly become even worse off.

In that context, I want to mention the whole question of salaries and remuneration within the CDC. This is not to criticise or castigate any individual in any way, but I thought the Secretary of State did well to keep a straight face earlier in the debate when she talked about the chief executive’s salary being reduced to just £300,000 per year. Most people would question whether it is right that someone leading an organisation whose ostensible role is to combat global poverty should get that level of reward in that job. I accept that part of the game is to play the private equity markets and to try to lever in funds, and we need to let people play such games. However, I welcome the education from the right hon. Member for Sutton Coldfield (Mr Mitchell), who described the renationalisation of a part of government that was privatised under the Blair Administration. That was right because, while these people are engaged in private equity schemes and trying to play capitalism at its highest level, they should remain public servants. Their ethos and their remuneration—how they are rewarded—should be as part of the Government operation that is working for such people on behalf of this Parliament. They should not be cut loose and allowed to pretend that they can operate like private bankers. I very much hope that we can have a solid look at the level of remuneration that operates in the CDC.

As my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) has mentioned, yesterday’s National Audit Office report says a number of things. I was struck by the fact that it says—the right hon. Member for Sutton Coldfield remarked that people working in the organisation looked over their shoulder with some apprehension when the Department’s officers came to call—there is a need to clarify that the Department should not be involved in individual project decisions and should distance itself. I agree: you do not own a dog and then bark yourself. If we are to hire people to do the job, particularly where it entails taking risks, we should let them get on and do it. I accept that, but the corollary is that we need to be much more hands-on in determining the strategy within which they operate and about the objectives that they are trying to achieve with their individual decisions. I therefore think it is probably putting the cart before the horse to have a discussion on this Bill before we have seen the CDC’s strategy for 2017 to 2021, which I presume is in preparation somewhere. Will the Minister tell us in his response whether we will be able to look at the strategy when it comes to the House?

The other point I want to make is about transparency. In 2013, three quarters of all the money going through the CDC’s accounts went to fund projects in the top 20 least transparent countries, where we are trying to improve things. Back when we discussed the Panama papers earlier in the year, the then Prime Minister and Government were very explicit about how we would try to clean up this mess and about how Britain would lead a campaign for financial transparency throughout the world. The absence of such transparency of course creates the conditions for illegality and for corruption in many of the target countries that we are trying to get aid to. I presume that that attitude has not changed and that we are still trying to lead a campaign for financial transparency. I therefore think it is very important, through the realm of the CDC, to make sure that when we try to lever in deals in these countries, we do so in a completely transparent way. We could start by making a commitment that the CDC will pay all the taxes due on projects in the countries in which it operates. We should also make sure that we use whatever pressure we can apply through third parties to advance the campaign for transparency.

That is pretty much all I have to say, except that we still live in a world where we have tremendous challenges and problems of extreme poverty, malnutrition, disease and illiteracy. I accept the need to play international capitalism at its own game and to try to lever in funds—to operate in the way that the CDC has been doing—but the end objectives must always be to make that situation better: eradicating poverty, combating illiteracy, eradicating disease. When we come back to look at the strategy document, we must set ourselves the challenge of making sure that everything the CDC does—every project it gets involved in—can, at the end of the day, be justified by attaining those objectives.

Commonwealth Development Corporation Bill

Tommy Sheppard Excerpts

Programme motion: House of Commons & 3rd reading: House of Commons & Report stage: House of Commons
Tuesday 10th January 2017 Commons Chamber

I am therefore keen to see new clause 7 put to a vote. It enjoys support among Members from a number of parties. I hope the Minister will be able to answer some of the concerns raised on Report before we move further with the Bill. It is right that we ask these questions. This is a large sum of money: this is not a little increase of a few million pounds here and a few millions there; this is potentially billions of pounds of spending, and a significant proportion of the international development budget, and it is only right that it receives the appropriate scrutiny.

[Tommy Sheppard (Edinburgh East) (SNP)]

I shall speak in support of a number of the measures on the amendment paper, but first I want to make a couple of comments about the political context in which this debate is taking place. I turned on the television over the weekend to see on the tickertape at the bottom of the news channel screen the information that our Government had stopped funding a girl band in Africa. I was shocked by this—I did not realise we were funding girl bands or bands of any other kind in Africa or elsewhere—so I thought I would look into the matter a little more. Of course, on doing so, I discovered that that was not the story at all.

The story was loosely based on a project in Ethiopia called Girl Effect, which is a huge programme that is aimed at empowering young women throughout that country. It has 500 direct participants and more than 10,000 participants online, and it operates from 8,000 schools throughout the country. It is designed to use music and performing arts to give young women in that country confidence so that they can take part in Ethiopian political and social life. It is undeniably a good thing. It was set up by DFID in 2011, and every time that DFID has reviewed it, it has been given an A* rating. It is exactly the type of project that we should be supporting, but it is unusual and unconventional. It is not the same as handing out food to people who are starving, so the case needs to be made for it. We also need to be aware of how these things can be caricatured and used to argue against the provisions that we are talking about today.

That entire Girl Effect project was described in the Daily Mail as the British Government funding the equivalent of the Spice Girls. The implication was quite clear: millions of pounds of our taxpayers’ money was being used not to feed the poor, the starving or the illiterate, but to fund five young women and turn them into rich pop stars. That was not true. The reporting was a good example of what we might call fake news—I believe that that is the term used these days. It was connected to reality by the thinnest threads of truth, yet for many people reading the Daily Mail and the other papers that took up the story, or looking at the tickertape along the bottom of their screen, it created the impression that they were given.

Lots of people, including some in this Chamber who ran to the press to comment on that story, will use these caricatures to denigrate and oppose any foreign aid activity by this country. They use the ridiculous argument that we should be spending money at home before we spend it abroad, as though the poverty and inequality in this country, which we must tackle, was on a par with the hell in sub-Saharan Africa, where poverty, oppression and the daily grind are the normal way of existence for the mass of people in those countries. Knowing that those caricatures exist and that we need to be careful about how we present these arguments brings me to the new clauses and amendments before us today.

[Andrew Bridgen (North West Leicestershire) (Con)]

The hon. Gentleman makes a good case, but considering that a third of all Ethiopian girls do not go to school, would it not be better for female empowerment if the money were spent on giving them an education? Would that not be more empowering than promoting a pop group?

[Tommy Sheppard]

I do not want to have a big discussion about the project, but I will respond by saying that we should do both. Of course we should also try to put money into formal education, but the importance of that project was that it understood that digital communication was a much more effective way of reaching young people in Ethiopia than the bricks and mortar of a formal educational establishment. It also understood that music and lyrics can sometimes be better than formal texts at getting through to people, educating them and inspiring them with big ideas. That is true in this country as well. Those things have contributed to the social education of young women in Ethiopia. As I said, the Department for International Development itself said that the project was worth supporting.

The important point in all these debates is that we can win public support for foreign aid and rally the public behind the 0.7% contribution, provided that we are transparent about what we are doing, and that we demonstrate at every turn that the people who are getting the money are those who really need it. It is therefore important that those criteria are demonstrated through the work of CDC Group and others, and that evidence is produced.

I am not sure which amendments and new clauses will be pressed to a Division, but I will vote for whichever ones are, because they would all strengthen the Bill. In my 20 months in this Chamber, this is the first time that I have seen a Bill come back on Report without a single Government amendment. I find that surprising. I know that the Bill is concise and brief, but given the concerns that were expressed on Second Reading about the work of CDC Group, I would have thought that the Bill could have been tightened up a little. I hope that the Government will consider supporting some of the new clauses and amendments because they would make the Bill more efficacious in achieving its objectives.

New clause 6 states that before CDC Group gets a major uplift in funding, the case will have to be made that it is meeting the sustainable development goals and tackling poverty and inequality in the country in which the money is deployed. Let me put it another way. If a project was not tackling poverty or combating inequality, and not contributing to achieving the sustainable development goals, why on earth should we fund it? When it comes to prioritising when money is tight, we have to make sure that it is spent on what it is supposed to be spent on.

On Second Reading we discussed some of the—shall we say?—past mistakes in a number of CDC’s decisions. We talked about the shopping malls, luxury hotels and other inappropriate projects in which CDC Group invested, and we were assured—by the Minister of State, I think—that those things were in the past, that we had learned from them and that they would not be repeated in the future. Well, if that is the case, what is the difficulty in building such a provision into the Bill so that when CDC gets a budget uplift, it will have an obligation to demonstrate that what that uplift is spent on will contribute to meeting these goals and fulfilling these criteria? That is self-evidently a way of ensuring that we do not rely on hope by instead writing down what, as a matter of policy, we want.

Amendments 3 and 4, to which I have put my name, would link an uplift in CDC Group’s funds to the overall ODA budget. It is important to look at doing that; the formula that has been suggested is not onerous and is perfectly achievable. There is an idea abroad that what might be happening is the outsourcing or privatisation of our foreign aid activity, and that pre-eminence is given to a market approach. We will have problems if that impression is not countered, because the truth of the matter is that there is a role for spending public money to try to support the creation of a small business sector in developing countries, to invest in such sectors and to create jobs, but let us not kid ourselves. The vast bulk of our priority aid should be directed at people who need it in order to combat the malnutrition, illiteracy, poverty and starvation that are present throughout such countries. That cannot be done by setting up a small business; it needs to be done through direct state and NGO intervention. That is why we should make it clear that the vast bulk of our foreign aid effort will remain in that sphere.

Although CDC Group and the market have a contribution to make, particularly in countries that are some stages along the process of development, that will not be the primary way in which we do things. I commend amendments 3 and 4 to the House because if we were to agree to them, we would strengthen the Bill and demonstrate to people what our intentions really are: to ensure that the hard-earned taxes that they pay—people politically agree that a small slice should be deployed for foreign aid—are spent doing the things that they want to be done. Those things are combating poverty and inequality in the developing world, and making sure that we get to a more equal world society, which of course is in our long-term interest, too.