British aid and the defence of internationalism

By Pablo Yanguas, Honorary Research Fellow, Global Development Institute, The University of Manchester. Disclaimer: The views expressed here are those of the author and do not necessarily represent the views of LCID. LCID is a strong supporter of the 0.7% aid target and our views on the future of the UK aid budget can be read here.

Britain’s aid system is full of paradoxes. It benefits from a decades-long consensus amongst elites about the intrinsic and instrumental value of aid; it has been afforded billions of pounds to tackle some of the world’s thorniest problems; and it is led by the OECD’s premier bilateral agency, a ministry that often defines the transnational development agenda by combining expertise, accountability, and vision. None of this can be said of any other donor, bilateral or multilateral. And yet DFID’s ecosystem is tragically misunderstood or neglected by the British public; it faces recurrent attacks from tabloid hacks less interested in development than in scoring cheap rhetorical victories; and it is subject to a level of scrutiny and control that can easily stifle creativity and risk-taking.

DFID and the broader UK Aid system are something to be proud of. They are worth fighting for. But the fight to keep Britain’s leadership hangs on the edge of a knife as the aid community faces two existential challenges going forward – one technical, the other political.

In technical terms, the world of aid is getting smaller, and harder. After the uncertain decades of the late 20th century, developing countries have decidedly entered a new phase in their economic, social, human, and political development. Absolute poverty is on the decline, average incomes are rising, private sectors are flourishing, and a new middle class is beginning to feel a deeper sense of ownership over their countries’ destinies. Governments can now find in financial markets the credit that was long denied them. When loans are too costly, grants and other transfers from rising Southern power are matching – and, in some cases, surpassing – traditional ODA flows coming from bilateral donors or international financial institutions.

All of these trends are a net positive for the world, but they do not reach everywhere. There remain still plenty of countries that are too remote, destitute or unsafe for markets to take an interest. Where that neglect overlaps with a lack of geopolitical relevance one finds the intractable places of the world: Chad, Democratic Republic of Congo, Honduras, or Afghanistan. But more stable and prosperous low- and middle-income countries also face challenges that cannot be met with financial transfers alone. Intractable problems like corruption, market regulation, and public service reform call for savvy technical assistance and coalition-building efforts. These are contentious issues where reform may take decades to come to fruition, due to vested interests or deeply-rooted social norms.

Luckily, a host of committed and creative actors within the aid community – and increasingly the broader development community – have spent the better part of two decades breaking down these challenges, taking an honest look at business as usual, and developing new concepts, frameworks, and modalities for making aid impactful in intractable places or intractable problems. It is a nascent agenda, an inchoate insurgency that cuts across bilateral agencies like DFID and USAID but also think tanks, charities, and private providers. There is no shortage of good ideas, or people willing to test them. What this community lacks, crucially, is political coverage.

It is unclear whether the foreign aid system as we know it can survive in a time of populism. Identity populism has legitimized the moral discrimination between nationals and foreigners, undermining the fundamental humanitarianism that led to the establishment and expansion of the aid system. Economic populism, in turn, has undermined the fundamental internationalism that underpinned the liberal, rules-based world order that emerged from the ashes of World War II. Humane internationalism was for decades the underlying moral vision of foreign aid, in Britain as in other OECD countries. However, the current crisis of public confidence in aid is but a sideshow in a much larger struggle between internationalism and populism.

There is little that the aid community can do by itself to stem the tide of morally and intellectually suspect yet emotionally persuasive populist claims. DFID has defaulted to a reactive modus operandi in which Daily Mail scandals are met with meek press releases. The charity world has internalised a siege mentality that responds to criticism with an impossible commitment to the highest ethical standard, while still peddling the kind of poverty porn that breeds popular resentment and plants the seed of populist backlash. The firms that implement DFID projects around the world are terrified of headlines and reputational costs in a world where accountability is often understood in a strictly contractual sense. And academia has grown increasingly distant from the realities of aid practice, gladly taking ODA funds without bothering to understand the very hand that feeds them. Only ICAI dares to question some of the worst excesses of the aid counterbureaucracy, despite having been set itself to keep an eye on the aid system.

An isolated aid community pins all its hopes on the promise of enlightened leadership. Practitioners yearn for a minister who truly believes in aid, instead of someone for whom a DFID appointment is merely a stepping stone towards better, more important things. They look to Parliament for understanding, succour, and protection. But their insularity has propelled them into a downward spiral, retreating to the safe and comforting camp of Guardian readers, instead of reaching out to fellow internationalists in business, religious congregations, or the free-trade wing of the Conservative movement. It is, by all appearances, a self-defeating strategy. But it is what short-term incentives allow.

Seen in this light, the aid system poses a much larger and more fundamental question for Labour (and the other parties): will our leaders fight to protect and expand the kind of humane internationalism that advances peace, prosperity, equity, and dignity for all? Or will they bow down to our worst instincts, let Britain sleepwalk into a new era of populism, and thereby jeopardise one of the world’s best aid systems?

It’s essential for our NHS that we end the era of the British tax haven

mike kaneThis article first appeared on LabourList on Tuesday 1 November

By Mike Kane,  Shadow Minister for International Development and Labour MP for Wythenshawe and Sale East – @MikeKaneMP

Theresa May has pledged a crackdown on tax havens. She should start by cleaning up our own backyard – the secretive network of UK-linked tax havens like the British Virgin Islands, Bermuda and the Cayman Islands.

Today and tomorrow’s summit of overseas territories leaders, taking place in London, provides the perfect opportunity to kickstart that process. They are our very own treasure islands, stuffed full of booty from around the world: entire economies set up to help wealthy people and unscrupulous companies to avoid paying their fair share of tax. That is money that could be spent on public services like schools and hospitals.

Over the past few years the Tory government has talked a tough game on tax dodging, decrying bad practice and demanding alleged tax avoiders like Starbucks “wake up and smell the coffee”. Ongoing scandals like that which engulfed Apple, and a wilful blind spot when it comes to UK-linked tax havens, tell a different story.

And it is the world’s poorest countries that are the worst affected by this inaction. Corporate tax avoidance is estimated to cost developing countries an astonishing $200bn every year more than they receive in aid. Much of that is siphoned off via tax havens like Mauritius and the British Virgin Islands. Money needed to tackle poverty, cure disease and promote education disappears offshore never to be seen again. That is a gross injustice.

Back in April the Panama Papers leak blew a hole in tax haven secrecy. Those with the means to do so were bending or breaking the rules on a huge scale, benefiting at the expense of ordinary people in the UK and in the world’s poorest countries.

In response, 300 top economists including Thomas Piketty and Nobel laureate Angus Deaton, told world leaders that tax havens “serve no useful economic purpose“. They also argued that the UK is uniquely placed to lead a crackdown, because it has sovereignty over around a third of the world’s tax havens through its overseas territories and crown dependencies.

Our involvement cannot be understated: more than half of the 214,000 firms named in the Panama Papers were registered in the British Virgin Islands, a UK overseas territory. Make no mistake – the UK sits at the heart of a global web of tax havens.

David Cameron came up woefully short on his promises to fix this problem, culminating in the refusal of many overseas territories to even attend his much touted anti-corruption summit earlier this year, much less make the kind of commitments that are needed.

That’s not to say others aren’t trying.  The anti-poverty charity ActionAid has called for greater transparency from UK-linked tax havens; the tightening up of global rules; and reform of the UK’s tax treaties with poor countries – another tool big companies use to avoid paying tax.

Caroline Flint and her colleagues on the public accounts committee secured an amendment to the finance bill which could compel all UK companies to declare the tax they pay everywhere they do business – including tax havens. Ministers must now find the courage to implement the law.

The new prime minister talks a good game on tax dodging, but she can no longer ignore the glaring issue of the overseas territories: our single biggest contribution to the global tax system.

Transparency is a vital first step. We need to know who own the countless anonymous shell companies registered offshore. That’s why ActionAid and others are campaigning for registers of beneficial ownership. Only by tackling secrecy can we know who is hiding their money, and hold them to account.

All of us are expected to pay tax – we should demand no less of the wealthy and big corporations. Tax is the key building block of our public services. Without it there is no NHS, no police, no schools, no welfare state. Everyone should pay their fair share.

We are accountable for the overseas territories and they are accountable to us. And when it comes to cleaning up tax dodging, they are our greatest weakness and our greatest strength. They have a corrosive impact on the global tax system, eating it from the inside. But we have the power to change that. By acting to sort out our tax havens we could set an example to the world.

Theresa May must put the UK’s British treasure islands on notice. It’s time to end the age of the British tax haven.

Owen Smith MP – my commitment to tackling poverty at home and abroad

owen-smith-2Owen Smith MP, candidate in the 2016 Labour Leadership contest, blogs for LCID on his commitment to international development – @OwenSmith_MP

Anyone in any doubt about the right-wing agenda of this new Tory government should take a look at two of Theresa May’s lesser commented-on appointments over the summer – that of Priti Patel as International Development Secretary, and her Special Adviser Robert Oxley – formerly of the Brexit campaign and the ideological Taxpayer’s Alliance.

Both Patel and Oxley have spent years attacking the very department that they now lead, arguing for the aid budget to be redirected, cut or even scrapped – and even at one point suggesting that DFID should be abolished or reformed. Even more shockingly they appear to be willing to undermine the cross-party consensus on the 0.7% aid target to spend a small but guaranteed proportion of our income on supporting education, health and responding to disasters around the world. They must be stopped.

Establishing DFID, leading the way on both the quality and quantity of our development assistance, and while abandoning the type of policies that led to the Pergau dam scandal – was one of the proudest achievements of the last Labour government. An achievement that literally saved lives around the world, and showed the type of outward looking internationalism that Britain and Labour should represent.

It is clear that there is a moral case for international development assistance – and focusing this on those who need it the most. Who can say that we should turn by and walk on the other side when so many children remain unable to go to school, when millions face the threat of HIV/Aids, Malaria or TB, and when women and girls often bear the brunt – not least in conflict zones. And as we see the effects of climate change and disorganised war and conflict impacting on many more – we also have to prepare for the challenges of the future.

It’s why the agreement of the Sustainable Development Goals was so important – recognising that tackling poverty and injustice requires concerted action in many areas, and in the richest countries domestic policies as well as their international action – not least when it comes to sustainability, climate change, taxation and corporate behaviour overseas. I want to see a Labour government that leads the way in delivering the goals domestically and internationally.

But as well as the moral case – international development is clearly in our national interest. Whether it is the tragedy of poverty and conflict driven thousands drowning in boats in the Mediterranean – or the threat of instability and poor governance in countries across Africa and the Middle East leading providing the space for extremism to grow – we ignore these challenges at our own peril. There is no zero-sum game between our Defence, Development and Diplomatic efforts around the world. We must ensure there is coherence and collaboration to ensure a safer, fairer and more just world for all.

But I believe there is something more fundamental at stake. Many understand the need for charity – but only Labour has historically recognised the need for justice – whether for garment workers in Bangladesh, women fleeing rape in the DRC or the refugees of Syria. We need to address the immediate impacts – but also the economic and political structures that drive injustice, poverty and conflict – for example through global tax transparency or fair trade. DFID and our aid budget have been at the heart of that fight for justice since 1997, and I will fight tooth and nail as Labour’s Leader to ensure the Tories don’t take an ideological axe to its work – and pledge to put tackling poverty at home and abroad at the heart of my programme as Labour’s next Prime Minister.

 

Owen Smith

Owen Smith MP signs LCID pledge for Leadership candidates

owen-smith-mpAs with previous leadership contests in 2010 and 2015, LCID will not be endorsing a leadership candidate in the current contest.

However we have asked candidates to sign the International pledge for 2016 Leadership candidates.

We are delighted that Owen Smith MP has signed the pledge and agreed to uphold the principles it contains.

We are awaiting a response from Jeremy Corbyn MP.

 

International pledge for 2016 Leadership candidates:

 

  1. I believe tackling poverty and inequality is what Labour governments are for. Any government I lead will take a ‘whole government’ approach to global justice, ensuring that our policies on tax, trade, climate change, home affairs, education, business regulation, defence, and security deliver for the world’s poorest people.

 

  1. I back British aid. I will ensure we spend 0.7% of GNI on aid and spend it well, focusing our aid exclusively and explicitly on tackling poverty and inequality, even in the hardest to reach places.

 

  1. I want DFID to be a development department, not just an aid administrator. I will ensure DFID is an innovative, independent department with a seat at the cabinet table and representation on all the relevant cabinet committees

 

  1. The Government I lead will pursue an ethical foreign policy and champion a progressive approach to humanitarian intervention in line with our international obligations, such as the UN’s Responsibility To Protect Civilians commitment.

 

BREXIT: A threat to tackling global poverty

mike kaneBy Mike Kane,  Shadow Minister for International Development and Labour MP for Wythenshawe and Sale East – @MikeKaneMP

 

Whatever side of the EU Referendum Debate you sit on it is hard to deny that being able to work collaboratively with some of the world’s strongest economies, to pool financial, institutional and technological resources enables us to make much more significant inroads into tackling global poverty than it would if the UK simply acted alone.

As ActionAid UK’s Chief Executive, Girlish Menon said in a recent blog on the subject: “To end poverty we need stronger, not weaker collaboration.”

I am proud of the UK’s commitment to International Development over many years and successive Governments. The last Labour government helped 3 million people out of poverty a year, and 40 million children into education, tripled aid, dropped the debt, and built international coalitions to secure agreements that were right for Britain and the world. Had we sat outside the EU would those achievements have been possible on the same scale?  I do not believe they would.

As a Shadow Minister for International Development I was involved in the campaign to enshrine in law our 0.7% commitment to development aid spending. British aid makes a huge difference to millions. But it is amplified by being a member of the European Union which is the world’s largest aid donor. An example of how working collaboratively with the EU increases the effectiveness of our aid budget is in relation to global reach. The UK has aid agencies which operate in 28 countries around the world – include our partners in the European Union and that figure rises to 150.

Kevin Watkins, Executive Director of the Overseas Development Institute is right to point out in his recent article for The New Statesman that the EU Referendum debate so far as failed to address some of the important questions about our role and place in an increasingly interconnected world.  Even those who don’t adhere to the view that we have a moral obligation in relation to international development understand than in an increasingly unstable and insecure world efforts to tackle global poverty and end conflict have positive benefits beyond the countries in which they are made, including for the UK.

It’s not just about money, cooperation and global reach, of equal importance is the ability to pursue shared policies which go beyond international development yet impact significantly on the developing world. Progress on global tax justice has been led by the European Union but there is still much to do. We need to rework broken OECD tax rules and mandate the UN to develop a set of rules that ensure big businesses pay their fair share of tax in every country they do business in. Achieving this without the influence and leverage of the European Union is highly unlikely.

For me personally, as a former CEO of an organisation that built movements that mobilise the power of people to take action, I fear the impact of a UK exit on the influence of Civil Society.  Through the European Union the UK’s excellent network of NGOs have built the capacity of Civil Society across Europe. This has enabled civil society influence over key decision in relation to issues like climate change and tax transparency.

It’s time the debate on the EU Referendum dealt with the reality of the world as it today. A world that if we fail to address the challenge of global poverty will become increasingly unstable. A challenge that we will be much less able to address whilst sitting on the outskirts of the European Union.

 

Invitation: Join LCID MPs in discussion of ‘Brexit’

In conjunction with the Labour Movement for Europe (LME) and Labour’s Environmental Campaign Group (SERA), LCID is hosting to an exclusive Panel Q&A on the evening of June 14th, 19.00-21.00, at UNITE Head Quarters in London.

The evening’s discussion, entitled “Brexit: A danger to security, tackling climate change and international development”, will be addressed by Mary Creagh MP, Stephen Doughty MP, Glenys Kinnock and speakers from across the Labour Party. Our panellists will make the environmental, security, human rights and international development case for remaining in the European Union on June 23rd.

LCID is pleased to provide 50 free tickets for the evening, on a first-come-first-serve basis. This will provide access to UNITE, the right to ask questions of our panellists, and after-talk refreshments with MPs.

The event will take place in the Diskuss Room at Unite the Union, Unite House, 128 Theobald Road, Holborn, London, WC1X 8TN. The closest tube station is Holborn, accessible from the Central and Piccadilly Lines

If you are interested in attending, please email aaron@lcid.org.uk with your contact details as soon as possible. We anticipate high demand for tickets so encourage members to get in touch sooner rather than later!

Please bring identification with you on arrival.

David Miliband makes the case for Britain in Europe

david milibandToday in London David Miliband, the former Foreign Secretary and current CEO of International Rescue Committee, delivered a speech making the case for the UK to remain in Europe, including why the EU matters for international development.

Some of his comments are reproduced below:

 

 

At the heart of our British success story in the post-war period – not just as a fringe component or some add-on extra – has been our membership of the European Union. Europe is not an alternative to a global Britain; it is the foundation for our role and reach internationally, which is good for us, and I would argue good for stability and security around the world.

The very same outward-looking attitude that took us into Europe, and has kept us in Europe, is the attitude that makes us credible and influential in the wider world. Rather than limit or diminish us, the European Union multiplies British power, British ideas and British values in very direct ways.

  • The EU multiplies British defence policy. We could never tackle Somali pirates, who were holding the coast of Africa to ransom, on our own. As part of the EU, we despatched a highly successful naval force to do just that – the Atalanta force led by the Royal Navy. In 2011, there were 176 attacks; last year, none.
  • Europe multiplies British diplomacy. We sought, on a cross-party basis, across successive governments, a negotiated resolution to the Iranian nuclear program through the EU, which was ahead of the US on this issue, and which convened and drove forward the process to achieve that hugely important goal. When I went to argue in Beijing for Chinese support for sanctions that would help support a negotiated settlement, progress was achieved in part because of the united European position I was able to put forward.
  • Europe multiplies support for British values. We saw the consequences of break-up in the Balkans in the 1990s before the EU had a common foreign policy. It is thanks to the EU’s diplomatic pressure and economic pull that there is now relative peace and stability in the Balkans, despite the refugee crisis. An independent Kosovo, stable Serbia, growing Croatia exist because of agreed EU foreign policy. This is an area where the EU has thrown its weight around, and to good effect.
  • Europe multiplies our development policy. We know the UK overseas aid budget has gone up – but with a British contribution, the EU’s humanitarian aid budget is the largest in the world, and together we are pioneers in good practice. Britain’s membership of the EU has been good for EU humanitarian aid policy, and in the process good for millions of people helped around the world because of the Union’s clout and commitment in this field.
  • Europe massively multiplies our environmental clout. The UK cares about climate change, but we can hardly tackle it alone. Our EU membership has allowed us to drive and deliver a cross-party UK priority on a European scale, and now a global scale.

Where Europe has been weak, and failed to multiply British interests, for example in its dealings with Russia, it is not because Europe has been too united in its policy, but too divided. The answer to a revanchist Russia seeking to flex its muscles around the world is not a weaker EU, but a stronger one.

So Europe multiplies British power, rather than diminishing or constraining it.

The fact is that Britain needs Europe, and Europe needs Britain. That is the patriotic case for us to not just to remain in the EU, but to develop a positive vision for European cooperation for the 21st century.