Commonwealth Development Corporation Bill

Lord Judd Excerpts

2nd reading (Hansard): House of Lords & 3rd reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords & Report stage (Hansard): House of Lords
Thursday 9th February 2017 Lords Chamber

[Lord Judd (Lab)]

My Lords, I thank the Minister for that clear introduction to the Bill. I am glad he is in the post that he is in, because he is a man who has taken our responsibilities in this sphere very seriously during his life. I am also very glad indeed that the noble Viscount, Lord Eccles, will be speaking in the debate, as he made a distinguished contribution to the history of the CDC when he was leading it.

I declare an interest because, for a short while in the mid-1970s, I was the sponsoring Minister for the CDC and I took great interest in it. What I liked about the CDC in those days was that it took very seriously the issue of the development of human capacity. When I visited, the staff took great pleasure in telling me how they were developing hands-on capacity.

That was important to see in the context of the Conservative Party’s own record. I was frankly rather impressed in the 1960s, when the Conservative Government took the initiative in setting up government machinery to meet third-world commitments. They called the department the Department of Technical Cooperation. Indeed, I do not mind telling the House that I spent a certain amount of time at our party headquarters trying to argue that it was a good title; if we were going to have a great emphasis—as we did, thank God—on the central role of overseas development in our programmes, then we ought to look seriously at the title the Conservatives had used. I never felt that the Ministry of Overseas Development quite got to the heart of the concept as the notion of technical co-operation did. I saw the CDC as fulfilling the spirit that says, “Nothing will succeed unless we are developing human capacity”.

I am therefore rather sad that, given the history of the CDC, it has now gone down the road of becoming, in effect, just another merchant bank. It seems to me that the emphasis, originality and creativity that was there has been lost. I do not believe that responsibility for this development can be laid entirely at the feet of the party opposite. Whether it was inadvertent, or however it happened, we were not as vigilant on this point as we should have been.

The Minister has explained the origins of the Bill. It is true that in the informed constituency in this country—a very real and good one on these matters—there is and has been a certain amount of concern. Here I declare an interest as a former director of Oxfam. We are well blessed to have the quality of NGOs we have operating in this sphere, and we should take their concerns very seriously.

What are those concerns? Some are centred on the real development impact of the CDC as it is today and whether recent reforms have adequately improved its effectiveness. It continues to face challenges relating to transparency, monitoring and reporting on its development impact, as well as on routing its investments through tax havens. The Bill provides us with our first opportunity since 1999 to shape the legislative framework for government oversight of the CDC and update it to clarify the purpose of public funding for the CDC, a suitable level for future public funding and the conditions under which it is to be provided and utilised; how the CDC will address the UK Government’s priorities for aid, such as transparency, value for money and achieving development results; and how the CDC can improve its investment standards—for example, on the use of tax havens.

More specifically, concerns have been centred on an overconcentration on the higher rates of returns on its investments. A focus on large formal enterprises, the use of narrowly defined impact indicators, and minimal investment in sectors such as agriculture and manufacturing raise concerns about its development impact for ordinary human beings. The National Audit Office’s recent review of the CDC reported that it,

“remains a significant challenge for CDC to demonstrate its ultimate objective of creating jobs and making a lasting difference to people’s lives in some of the world’s poorest places”.

That observation cannot be cast lightly aside.

As for transparency, the CDC was assessed as poor, with 22.5%, in the Aid Transparency Index, and there have been no major improvements in its transparency since then—or none that I can detect. I acknowledge that the Government and the CDC itself take these concerns seriously but, as late as 2013, 75% of the CDC’s investments were routed through jurisdictions that feature in the top 20 of Tax Justice Network’s financial secrecy index.

During deliberations on the Bill in the other place, Ministers failed to provide a clear and robust case for why the CDC required the level of additional funding and whether it had the capacity and opportunities to invest it effectively. This therefore remains a major question, especially as in DfID’s business case for the £735 million in funding committed to the CDC in 2015 it stated that the CDC had assessed that it had the capacity to invest an additional £1 billion and would require additional funding from DfID only in 2019.

I conclude by putting specific questions to the Minister. I do not want to overdo it, but I repeat the points because I have very great respect for the present Minister and I am sure he will take these questions seriously. First, why have the Government introduced the Bill before publishing the CDC’s investment strategy for 2017-21? Why does the Bill allow the Government to utilise the ceiling of £6 billion to £12 billion for funding the CDC, given that in 2015 it assessed it could invest an additional £1 billion for the Government? Why have the Government not included in the proposed Bill standards that the CDC should meet in order to address the Government’s commitment to transparency, value for money and tracking development results, as well as on issues such as the CDC’s use of tax havens for its investments? How will the CDC be asked to improve its functioning and contribution to development results as a condition of future funding increases? How will the CDC be asked to improve its transparency and reduce the volume of investments it routes through tax havens as a condition of future funding? Finally, how have DfID’s investment plans for the CDC been informed by assessing other options for investing these resources and comparing their value for money and potential for development impact?

As somebody who worked in this sphere for a good deal of my life and who continues to work in an honorary capacity in many ways since becoming a Member of this House, I have difficulty with the term “development impact”. I believe the real heart of the challenge of our co-operation with communities across the world is their empowerment. It is about their taking control themselves. It is about enhancing their capacity. “Impact” suggests it is us bringing something to the country, which we are then evaluating. Our evaluation needs to concentrate far more on how the local community appreciates and benefits from what happens.

My other point, and it is not a popular one in the age of the market, is that in real human terms very often the real effect of this co-operation will not be judged until perhaps decades later. The constant pressure to produce immediate evidence of impact sometimes distorts lasting effective development. I ask the Minister to consider these matters seriously and I look forward greatly to his reply.

--- Later in debate ---

[Lord Bates]

That is right. The noble Baroness refers specifically to India, which is of course itself a signatory to the sustainable development goals and the eradication of poverty by 2030. That will have to be its focus.

A number of other questions and particular points were raised. I will review the record, particularly with reference to the points made by the noble Lord, Lord Judd, at the beginning, and where there are gaps or I can add anything, if it will be convenient for the House, I will write to noble Lords. I reiterate my commitment to continue to engage with the House as the CDC progresses with its strategy and we finalise the new business case.

[Lord Judd]

I am grateful to the Minister for what he has said and the fact that he will write to me, although it is a pity that, because this is a money Bill, we do not have the opportunity to go into these things in Committee. However, will he agree with what has been said by quite a number of noble Lords in this debate, that the CDC, which of course has a lot of admiration, must remember that job creation and the eradication of poverty are not synonymous? Job creation can play an important part, but the eradication of poverty is a greater issue. We must not let one become a substitute for the other.

[Lord Bates]

I defer to the noble Lord’s great experience in this area. He is right. He is also right to say that it must not be perceived as an imposition. This must be something that comes from the ground up. It must be about strengthening capacity within the countries. That is why education, healthcare and all the other things that we are doing in terms of infrastructure are so critical to the overall success. I accept that.

The CDC is the oldest development finance institution in the world. It is a great British institution that reflects the values of the British public, who consistently demonstrate their concern for and generosity towards the poorest. We will make sure that we can all continue to be proud of the life-changing, pioneering work that this institution does. With that, I ask the House to give the Bill a Second Reading.

Bill read a second time. Committee negatived. Standing Order 46 having been dispensed with, the Bill was read a third time and passed.

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

Lord Judd Excerpts

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

[Lord Judd (Lab)]

My Lords, first I thank my noble friend most warmly for introducing this Bill. It is on an important subject and it is good that we are going to consider it in the House. It will need very careful attention in Committee. Perhaps I may also say that having known my noble friend for many years, his faith and commitment to our aid and development responsibilities are very real and he has evidenced them consistently.

What the noble Baroness has just said about the danger of slippage must be in the mind of anyone who has held ministerial responsibility. Slippage can begin to accumulate like a snowball. This is a difficult issue that I have never totally resolved intellectually. Having been a defence Minister and a development Minister, I do not think it is altogether satisfactory to have a defence policy or an aid policy that relies heavily on its percentage of the GNP. What you must have is an effective defence policy and an effective development policy. It is the quality and quantity of what is being done that is really important, and that ultimately is how an aid programme will be judged.

But the world is not quite like that. Why I supported without qualification all the energy that went into ensuring that the 0.7% commitment is enshrined in our legislation is because I know, from having held ministerial office in that area, that what the noble Baroness has just said is terribly important: the pressures coming from all sorts of different quarters might mean that in the end, while you might have an impressive aid programme to address the challenges of world poverty, suffering and injustice that gives you a lovely shining halo because you have a perfect project, it would not realistically add up to much of a contribution to world justice, peace and stability. From that standpoint, therefore, the target is important.

On annual or five-yearly reporting, there are issues that would need to be examined. A general election would almost certainly ensue within a five-year period, so would the outgoing Government really be held to account in the general election as fully as they should be? The other issue is how to ensure that results are being produced, and therefore some discipline about annual performance is important. However, there is a complication. I have no hesitation in saying, having been a development Minister, that I was subsequently director of Oxfam. During my time with Oxfam I learned an important lesson: the pressure to produce tangible results within short timescales can actually be distorting in terms of genuine and lasting development. Long-term development extends over a number of years, and there is an argument that in some situations you can judge what has been contributed only many years later, when you can see what has happened in that society. It may not always be exactly what you had hoped for, predicted would happen or stated as your objective, but it might be very interesting. Development is about not just producing results, but contributing to a process that belongs to the people of the country concerned and the communities with which you are working. It is about what they can gain in self-confidence, skills and abilities, and building them up over a lasting and sustained period. A lot of details will need to be looked at in Committee.

I hope I will not be accused of being sentimental—this House is very harsh on sentimentality, and rightly so— but I have a mind jammed full of vivid, real anecdotes I have encountered at first hand that have regenerated my commitment to this very important issue. I will share with the House just one. It was during that awful, bitter, cruel civil war in Mozambique. I could get to my destination only by hitching a lift on a relief plane. My heart was in my mouth during that flight. A merrier band of cowboys flying a plane I had never encountered. Furthermore, the state of the plane needed some attention, but it was carrying relief supplies and it got there.

What struck me when we arrived—I am sure many of us saw the situation on television and elsewhere—was this quiet murmuring from the huge crowd that had assembled. There were thousands of people. Some had lost absolutely everything. I was introduced to a family who, just a few days ago, had watched their village and home burn to the ground, and their seven year-old child be chopped to death and burned in the house. Here were these people. I was glad that I could come home and say to Oxfam supporters, the wider public and my colleagues, “It is worth it. We aren’t getting it all through because it’s a war situation”—one must be realistic; not all does get through—“but a very substantial amount is getting through and it makes the operation worth while”.

But that was not the main message that came home to me. This is the point at which the House may feel I am testing credibility, but it is true. What I experienced then had a great deal to do with my decision, when asked, to join this House, which is an experience I have always valued. Yes, the blankets, the soap, the salt, the food was getting through, but within days of those people getting into that camp, they were asking for spades, for shovels, to start growing their own food again. I thought of my home community in Oxford and of my own family. If we had been through a fraction of this experience, we would be totally broken. Yet here were these people, already physically and committedly rebuilding their lives.

I came home saying that I really had to do something about getting this message across. It is not these people’s privilege to be helped by us. That is a moral responsibility that we cannot escape. It is our privilege to work with people of so much dignity, courage and drive. Therefore, I hope that in the deliberations on the Bill, as in every debate we have on this subject, we remember that we are not generous, wealthy people saying, “We must give some of our wealth to the poor”. There may be people who say that, but that does not switch me on. Rather, we should say, “How exciting, how challenging to have the opportunity to work with people in these desperate conditions, in desperate plight, to build a more secure, just future”. Have no fear: we will not have a secure, peaceful world unless there is effectively growing social justice in the world.

Gaza: Electricity Supply

Lord Judd Excerpts

Tuesday 19th April 2016 Lords Chamber

Asked by

[Lord Judd]

To ask Her Majesty’s Government what immediate consultations they are having with their European Union partners and at the United Nations about how to respond to the breakdown of electricity generating capacity in Gaza and its consequences for water distribution.

[The Parliamentary Under-Secretary of State, Department for International Development (Baroness Verma) (Con)]

My Lords, we are concerned by the electricity shortage in Gaza and the serious impact it is having on the humanitarian situation. We are in regular dialogue with Israel, the Palestinian Authority and other development actors, specifically the EU and the UN, on the extension of the 161 power line and the conversion of the Gaza power station to gas. Close to £475,000 in DfID funding is being used to support planning for the Gaza desalination plant.

[Lord Judd (Lab)]

My Lords, I thank the Minister for that reply, but does she not agree that the people—the men, women and children—of Gaza have had enough? With this latest total breakdown in generating capacity, the water supply for drinking is at minimal, hazardous levels, and the water that is available is far from guaranteed to be pure. Does she also agree that we are in a situation where sewage is now just not being treated but is being pumped in increasing amounts into the sea—and that behind all this lies the complete failure within Gaza of an economy in any meaningful sense with which order can be established, services can be properly provided and the future can be carried forward? It is not just the humanitarian situation, which is bad enough. Surely this is a festering point for instability in the area and a playground for extremists, and it has implications way beyond Gaza itself.

[Baroness Verma]

My Lords, the noble Lord raises a series of very important points but ultimately, as he and other noble Lords will be aware, we need to encourage a two-state peace-process solution. That is what we, the UK Government, and others are encouraging. Ultimately, however, it is down to the two parties to make sure that they are fully engaged.

Syria

Lord Judd Excerpts

Monday 8th February 2016 Lords Chamber

[Baroness Verma]

My noble friend makes an important point about the talks and making sure that they do not stall. They have come to a pause. The UN special envoy decided to pause the talks until 25 February as it was apparent that there was little prospect of progress being made at this time. But my right honourable friend the Foreign Secretary will be in Munich on Thursday 11 February and will press the Russians, who I am sure will be attending, too, to ensure that they put pressure on the Assad regime, so that the conditions allow unfettered humanitarian access across Syria and that we have an end to the violations of international humanitarian law, as set out under the UN Security Council Resolution 2254.

My noble friend is absolutely right to ask that we keep the House updated and we absolutely commit to do so. He also mentioned Daesh—and of course our goal is to defeat Daesh so that it no longer presents a threat to the UK or to international stability. As he rightly says, we are dealing with very complex circumstances. He asked about the troops on the ground in the countries that he mentioned. I shall have to write to him, because I do not have that answer at hand—so if he will allow me to, I shall write to him and place a copy in the Library.

[Lord Judd (Lab)]

My Lords, I am sure that many of us in all parts of the House will want to express our appreciation to the Government for the successful work last week. It was very important. Does it not illustrate beyond doubt that, with all the tragedies that confront us now and in future, international co-operation and effective international arrangements are absolutely indispensable, and that, unless we work on foreign policy as a priority and build these up all the time, we shall be sticking our fingers in the dyke?

The Minister talked about the importance of education, and that of course is right. But if we are going to talk about reconstruction and the long-term future of these young people, it is not just a matter of getting children into schools; it is also a matter of further and higher education. Can she reassure us that there are plans in hand for adequate access to higher and further education, as well as to schools?

[Baroness Verma]

The noble Lord is absolutely right—it will not be just about primary and secondary education; it will be about vocational skills and higher education. Often, the length of time a person is a refugee is around 17 years, so he is absolutely right that we need to make sure that we are addressing not just children’s needs but wider needs, including making sure that people are being trained up with the right skills. That is why I am really pleased that we have doubled our efforts to give support in Jordan and Lebanon. We have put extra money there to ensure that people get that training and investment, and get the help that will help them to go on and rebuild Syria.

International Development Policies

Lord Judd Excerpts

Thursday 19th November 2015 Lords Chamber

[Lord Judd (Lab)]

My Lords, yet again we express our appreciation to the noble Earl, Lord Sandwich, for providing the opportunity for a debate on this important subject. As a former Minister for Overseas Development myself, perhaps I may say how good it is to see the noble Baroness in her place, and how much I wish her well in her immense responsibilities. It is one thing having 0.7% of GDP to spend, but spending it well and effectively is a huge challenge. Of course, it need not be only 0.7% because one has always to measure oneself against the size of the challenge.

I have just a couple of points that I should like to raise. First, with all the pressure to demonstrate results, there can be a contradiction between long-term development and immediate results. I wonder how carefully that is being watched in the evaluation. Long-term development must not be distorted.

My other, very specific, point in this context is that in military operations—I am not one of those purists who say there is no role to be played by official aid—the military will inevitably have, for example in Afghanistan, huge pressures to demonstrate results and concrete evidence of change to the local population before the extremists come back. However, that may not always be what is really needed in terms of long-term development. I know there was active interface between the two departments at one stage on this issue, and I wonder how it has been resolved and how it is progressing.

Another issue I want to raise briefly is how successful the Ministry is being in growing tax bases. Of course, tax is terribly important to the revenue of Governments in their ongoing programmes. How is that going in our own Overseas Territories and in the Crown dependencies? How many of them have produced public registers of beneficial ownership? By the same token, it would be good to hear something about the progress being made in this country in demanding responsible tax policies in the countries in which we are working by companies that get contracts from us—and indeed from other companies in the world.

What is DfID learning from its work and how far is that enabling it to discover the spheres of the private sector in which it can be most effective? Finally, obviously, as always, the big issue is strengthening governance and furthering human rights as an essential part of that. I wish we could slip away from talking about our impact and talk about our contribution, which seems much more in the spirit of self-generating growth.