The Rt Hon Malcolm Bruce MP

Debate on Aid Transparency in the House of Commons: 13th Nov 2008

Malcolm Bruce (Gordon) (LD): I certainly do not intend to try to follow that pub rant from the hon. Member for Monmouth (David T.C. Davies), which seems to be considerably at odds with the views of the hon. Member for Sutton Coldfield (Mr. Mitchell) and gives a degree of discomfort to the idea that we have a modern, reformed, liberal-minded Conservative party that wants to engage in these issues. Of course, there is an entirely reasonable debate to be had about how DFID should deploy its staff and its resources and in how many countries, and what its priorities are. My Committee, the International Development Committee, regards its prime function as to call the Department to account, challenge it on its policies and make constructive recommendations, which I hope that we do.

Transparency is one of those issues that is very easy to talk about and a lot more difficult to deliver. It is not always possible to turn every expenditure of cash into a

measurable result, but we must try to do it, as far as possible, for exactly the reasons that have been stated-to reassure taxpayers at home that the money is being spent effectively to achieve the objectives and to reassure people in the countries on the receiving end that their Governments are using the money to good effect.

As I understand it, a significant aspect of providing direct budget support is to try to enable the developing country to build up the capacity to control its own budget and expenditure and to deliver services, ultimately to the point at which the revenues that are generated allow the development support to be phased out and withdrawn. Whenever my Committee and I visit DFID offices in various countries, we always ask the staff to what extent their budget is being distributed under direct budget support, and what engagement they have with the people with whom they are working in government to ensure that as far as possible-allowing for the fact that it is their choice, not ours, what the money is delivered for-it is being spent properly. That is a difficult ask, and the situation needs to be consistently and constantly monitored and improved. Several of the Government's initiatives represent at least an attempt to put in place processes and procedures that will improve the quality of that process. I do not think that they will be offended if I say that we have some way to go, but that is not necessarily to suggest that we are doing the wrong things.

The hon. Member for Sutton Coldfield expressed concern about some of the countries that are receiving direct budget support and suggested that our Committee might investigate that, and we are happy to discuss whether and how we might do so in future. I assure him that we continually discuss and ask about direct budget support. We are going to visit Kenya and Tanzania in pursuit of our inquiry into sustainable development in a changing climate, but also with an awareness that Tanzania is the largest recipient of direct budget support in Africa. The Committee will want to ask about that and try to provide reassurance, which I hope might be helpful to the Department as well.

The new Administration in the United States should not be lost sight of in this context. The US Congress and the present Administration have argued that they do not approve of direct budget support and will not give it. It is sometimes argued that they are hiding behind the idea that congressional rules will not allow it, but Congress has the capacity to change its rules. It has been suggested that under the new Administration the United States might be willing to move, albeit gently, towards giving direct budget support in partnership and co-ordination with other donors, and we must not say anything that deters them from doing that. We should not say that it is fundamentally wrong, only that it is challenging and that we must ensure that it is effectively delivered.

Indeed, it is in that context that co-ordination among donors is important. If we can get all the European donors, the United States, Canada and perhaps even Japan to agree to a set of rules, or even to channel aid through the same vehicles, as we are trying to do in Afghanistan, there will be a much greater chance of delivering better accountability, better transparency and better quality aid, and we will do so in such a way that the country on the receiving end will have the capacity to absorb aid more effectively.

Mr. Clifton-Brown: Will the Chairman of the Select Committee make two particular inquiries about direct budgetary support transparency? First, my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) mentioned substitution, whereby giving aid to a country allows their leaders to spend money on jets, for example, which is undesirable. Secondly, will the right hon. Gentleman examine how much money is getting to the projects it is supposed to support on the ground, rather than being creamed off in corruption at the centre?

Malcolm Bruce: I am perfectly happy to do that, but I can also assure the hon. Gentleman that those are the sort of questions that we have asked. On Uganda, about which questions have been raised, it is interesting that the Ugandan Government had an agreement with the community about money being spent on education in which they undertook to nail on the school door a breakdown of the budget allocated, where it was coming from and how it would be spent so that the community could monitor the situation.

That brings me to my second point: we have to develop countries' capacity to monitor their own expenditure effectively. That means working with Parliaments and with civic society. When we have a debate about ownership of aid and development by developing countries, we have to understand clearly that we are talking about ownership not only by the Government, but as far as possible, by the people. We need to give Parliaments information that allows them to call their Governments to account, and work with civic society to challenge MPs and inform the public. That is probably the best defence against money being misappropriated, although we have to accept that in many cases it will take many years for a strong and sophisticated capacity of that sort to develop.

It has sometimes been argued that there is a sort of perverse, inverse relationship between aid and development. Professor Collier calls it the Dutch disease; he asserts that in some cases, the more aid a country is given, the less responsive it is-the poorer it gets, in other words. His argument is that the purchase of local currency creates a drain, which cannot be offset if there is no strong economy. To counter that, I would say that his is an argument for ensuring that the aid is of high quality and is well targeted, not an argument for not giving the aid.

Mr. Tom Clarke: The right hon. Gentleman is making an interesting speech. On Uganda, I remind him that during the visit I mentioned earlier, we had the opportunity to meet the Minister of Finance. He opened the books, and one of the most glaring aspects of what he told us was debt repayment. It was absolutely astonishing. We found that developed countries were already benefiting a great deal from the poorest countries in the world, and given the right hon. Gentleman's experience, I am sure that he would want to acknowledge the progress that we have made in that field.

Malcolm Bruce: I do. It is always difficult when one gets drawn into a detailed debate about an individual country, because of the complexity within. It is absolutely true that debt repayment, and in some cases the liquidation of that debt, has been a key part of the process. At the end of the day, it is important that future arrangements

do not sink into that sort of relationship. Countries should be able to borrow, but on their own terms, not unfair terms, and with debts that can be properly serviced, not what might be called odious debt. We must avoid returning to that situation.

Two or three topical concerns have already been raised, but one has not been, and it is one on which I suspect the Minister cannot make any immediate comment. I was somewhat horrified, just before I came into the Chamber, to see John Ging being interviewed live from Gaza on BBC News 24, saying that 750,000 people there are desperately in need of food aid from the United Nations Works and Relief Agency, and that they have had no supplies delivered since yesterday. He says that the food is on the Israeli side of the border and that the Israelis are refusing to allow it to pass, which is contrary to their international obligations and the law, which permits humanitarian relief.

I hope that the Under-Secretary will at least use his good offices to ensure that the UK applies appropriate pressure so that the food gets through. Those who need it are mostly destitute women and children and unemployed men, who have no other form of income in a small territory where there is no other food to be had. That is not usually the case-even in the poorest countries, it is amazing how food can sometimes be obtained. However, given that Gaza is shut in, the problem is serious.

Yesterday, members of the Committee had the opportunity to ask the Secretary of State about the Democratic Republic of the Congo. We did not get a clear answer-he undertook to write to us-about the reason for the extent of the delay in reaching some people, or even identifying them. It was disturbing to read about and see television pictures of people who had had no food for two or three days, and sometimes up to six days. Clearly, the consequences do not require stressing in the Chamber.

Mr. Andrew Mitchell: The problem is that people are not fleeing to semi-established or established camps. They are fleeing, in the clothes that they stand up in, into a most inhospitable jungle territory. That is why it is taking so long to get desperately needed support to those who are suffering.

Malcolm Bruce: I understand, and I am grateful for that intervention. I am simply trying to say that we can imagine the consequences if we cannot reach those people soon.

Several of us attended the round-table briefing about Afghanistan, which brought us up to date, at the Foreign Office this morning. The results of a BBC poll, based on a stark and rather silly question, were published yesterday and showed that 68 per cent. of the British people wanted our troops to be withdrawn within a year. The question did not provide any context, but revealed a problem. Liberal Democrat Members-and, I believe, most Members-believe that engagement with Afghanistan is necessary. It is in the interests of British security and right for the people of Afghanistan, even if it is a difficult and challenging place to be. There are concerns about the way in which we communicate that.

It is understandable, given that the United Kingdom's military commitment is in Helmand and that significant numbers of men and women in our armed forces are dying in that engagement, that the British people question the reason for putting our troops in harm's way to that extent in such a far-away place. That tends to lead to an exclusive focus on what happens in Helmand, and does not take into account the fact that Afghanistan is a substantial country, and that not everywhere is in the same position as Helmand. Indeed, approximately 75 to 80 per cent. of British aid and development expenditure happens in other parts of the country through the national Government to help achieve important development objectives, such as getting children, including more than 2 million girls, back into school, and impressively providing at least basic health care throughout the country. Other objectives include improving communications and roads and are mostly financed by the United States. In other words, the picture is not all negative and bad.

The nature of society in Afghanistan means that it has never had a unified Government and bureaucracy running the entire country. It has always been run through some form of agency-local leaders, warlords, tribal chiefs and so on. It is therefore not surprising that that continues to happen to some extent. It does not mean that the country is not being governed, that state money is not being properly spent or that services are not reaching the people. However, as our Committee found when we visited, the people of Afghanistan are all too often unaware of what is happening. It is simple for a local governor to pretend that all the largesse-it is not much largesse; we are considering a very poor country-is somehow his creation rather than something that has come from the central Government. Similarly, central Government want to claim the credit, rather than admit that the help comes from the international community.

That is a dilemma. It is a problem if we cannot win the Afghan people's hearts and minds and show them that we are in a genuine partnership-a partnership between the international community and the people, to try to achieve the stability and ability to develop that they want, and between the people of our country and Afghanistan to enable it to build up a viable state.

That is a challenge for us, but we all have a responsibility to fulfil it, at least so that the great sacrifices of our forces will have been made not in vain or for a failed project, but for one that, however difficult, might ultimately be achieved. I suggest-I say this with the Secretary of State in his place once more-that there is scope for more explanation of the interaction between the military and DFID in Afghanistan and of how things work. Those of us who are engaged in the debate understand that, but even in the House and certainly among the wider public, there is a lack of understanding about how those aspects interact. There is a form of transparency that is not about just money, but about understanding aims and objectives and what is happening.

The Secretary of State quite understandably mentioned the undertakings that were made in Accra and has probably read, as I have, Simon Maxwell's blog. Having honestly said that he was not sure what Accra was all about when he went, Simon Maxwell paid tribute to the Secretary of State for the energy that he had expended in trying to secure an agreement that contained real commitments, rather than just platitudinous statements, which is what people told the Committee they feared it

would contain when we visited earlier in the year. I am happy to share that acknowledgment. As Simon Maxwell also said, it is fine to get a lot of countries signing up to a big commitment, but people will want to see what that means in terms of ownership and buy-in.

That leads me back-I am happy to conclude on this point-to the relationship between the donors and the developing countries and the people living there. The reason why DFID was created as a distinct Department was to separate foreign policy from development and to focus on poverty reduction, so that development policy would not be compromised by being an instrument of foreign policy or by commercial interests. That has been a success, both in persuading the British people that our aid programme is worthy of support and in determining our approach, which has helped DFID to achieve a position of leadership throughout the world.

I must also echo what the Under-Secretary said. The entire staff of DFID comprise about 2,500 people, which includes foreign nationals employed in overseas office. That core-the UK part of it, at least-is under the same strictures of staff reduction as staff in other Departments are. That is a challenge for the Department and there is no doubt a shortage of expertise. There are ways around the problem, ingenious or not, that need to be pursued. There are also questions about how one might prioritise-in terms not only of money, but of staff-what we do and do not do, both sectorally and in individual countries.

Although I did not take too much to the style of the speech that the hon. Member for Monmouth made, it is always perfectly possible to conduct a proper review of the number of countries we engage in and how effectively we do so, although I understand that a significant number of offices have been closed this year.

Mr. Andrew Mitchell: The right hon. Gentleman makes a good point about the constraints on numbers that operate across Whitehall, including DFID. Let me reiterate that we think it is absolutely absurd that DFID staffing figures are being restricted at a time when the budget is rising significantly. The staffing level should be set to meet that rising budget, not the reverse.

Malcolm Bruce: I take the hon. Gentleman's point. The Committee has not completed its report this year, but we certainly acknowledge the pressures and have expressed our concerns. The permanent secretary is obviously constrained by the rules across Government, but she conceded that the Department was struggling. That is something that we should take to heart.

I want to pick up the point made by the hon. Gentleman about the website, which I believe has some merit, and to ask the Department to consider it. Perhaps the Secretary of State could give some thought to the exact purpose of the website. Whenever our Committee visits countries in which we have an engaged programme, we visit DFID. I am sure that other Committees visit their relevant Departments. We usually get an extremely thorough, detailed briefing from the DFID office, showing what is being spent, what the priorities are, the breakdown, and an honest question and answer session. A lot of that information could be in the public domain. It would help if we could go to the website and find out exactly what the budget is and what the priorities are in more detail and in a more up-to-date way. That would make the website more interactively beneficial and the Department more transparent. It could address some of the concerns: it is not that people are against what is being done; they just do not know what is being done, which makes them either suspicious or inclined to ask questions. Will the Secretary of State consider whether more could be done to make the information more accessible and transparent?

The Committee's report looked at how we as a country and the international donor community could work more effectively together. It became clear in that process that how effectively we can work depends on whom we are working with. The Committee, in choosing which of our European partners to have a dialogue with, made a journey from Rome to Berlin to Copenhagen and then, via video link, to Stockholm. Not to put too fine a point on it, I am glad that we did it in that order, because the reverse process would have been deeply depressing.

The reality, as far as I can see, is that the Italians have pretty well opted out of supporting the commitment to international aid and development. The previous Italian Government were in the process of setting up their own development agency; the present Italian Government have abandoned it. I am grateful that they are continuing to support the multi-national organisations, but that is probably about saving face among their peers. They support the Rome-based institutions but, beyond that, there is very little commitment.

I do not want to do a qualitative analysis, but there is a group of countries that we, the Foreign Office and DFID call the northern liberals, and which the Scandinavian countries refer to as the Nordic-plus countries-basically, the Scandinavian countries, plus the Netherlands, the UK and Ireland. We are definitely like-minded and work together. Doing so can have a huge impact in driving the right kind of development. By that, I mean development that is designed to reduce poverty, to give poor people in developing countries a degree of ownership and control over the quality of aid and development, and to help them to call their Governments to account. In that way, they can be part of the process of lifting themselves out of poverty and achieving the success and development that they have been denied for so long, but which they richly deserve.