Strategy for International Development

Investment partnerships are becoming a more dominant feature of UK aid. British International Investment will receive a further £200 million in capital from the FCDO, and the amount of funding channelled through BII is set to increase dramatically over the next two years. Economic and investment-led development certainly has a place in any coherent development strategy, but it tends to benefit those who are engaged, or are able to engage, with the formal labour market. I am not convinced that this approach will help the poorest and most marginalised groups around the world. I am just not convinced that it will help them to achieve their potential or create long-lasting development in their communities.

Putting all of the UK’s development eggs in the economic basket will mean that swathes of people are left behind: disabled people, minorities, and women and girls. How does the FCDO’s approach help them to reach their potential and enrich their communities? I have no doubt that UK investments can fund and support some truly transformative projects. However, we need to get the basics right first, otherwise how will those projects succeed?

Investing in new roads does not help a girl who cannot access clean water. A new telecoms network is not much use to a boy who cannot get vital vaccines. We need basic support in place first, before those investments can succeed. Get the foundations right, and then development will flourish. Under DFID, it was clear how UK aid was working towards the attainment of the UN sustainable development goals—the map to lifting people out of poverty and keeping them out of it—but this strategy barely refers to the SDGs.

It is hard to know whether we are on the right path to development without the map that the SDGs provide. With the integration of development and wider foreign policy objectives, helping the poor increasingly seems to be seen as a by-product of British foreign policy, rather than an end in itself. In fact, this Government strategy has no qualms about UK aid being “overtly geopolitical”. The strategy seeks to actively draw lower income countries away from the influence of authoritarian regimes, and to promote freedom and democracy around the world.

However, what about the communities living in countries that are not a pressing priority for achieving a foreign policy aim, or whose Governments do not share UK objectives? Are we leaving those communities behind? What happens to their potential? In my Committee’s work, we have heard that different types of development problems require different approaches. Sometimes spending through bilateral programmes is effective, and sometimes putting funds through multilaterals—such as Gavi, the Vaccine Alliance, or the World Food Programme—is more effective. We need to use the right tools for the job.

The UK is stepping back from its commitment to multilateral co-operation and placing more emphasis on bilateral spending. The Foreign Secretary told my Committee that, in 2022-23, £3.7 billion of UK aid funding will be spent through multilaterals. By 2024-25, it will be £2.4 billion—a 35% reduction in just two years. The UK’s contribution to major multilateral institutions means that we generate goodwill and we also have a huge influence over the way global institutions spend tens of billions of dollars each year.

Our multilateral investments are also a lever in investments from elsewhere, meaning that they have a multiplier effect, but the UK will be reducing its contribution to the World Bank by an astonishing 54%. If the UK is looking to increase its influence on the global stage, it seems counter-intuitive to step away from that leadership role.

I will make two further points on the money. I do not think I will carry the Chair of the Select Committee with me here, although I pay tribute to her leadership of her Committee and the very good work that the Committee is doing, but my advice to the Foreign Secretary, given the complete mess on Britain’s development policy, was to find the money from the multilateral programmes and not from the bilateral programmes. If she is forced to make that decision, a decision she should never have had to make, it is clearly right to take the money from the multilateral programmes, for the same reason that Bonnie and Clyde robbed banks: that is where the money is.

The big multilateral programmes such as the World Bank are where the money is, and the Foreign Secretary is therefore in my view right to take it from there, but that is not a decision she should have had to make.

All international development spending is about Britain’s national interest. It is spent largely in areas where we have a historical connection. When I was DFID Secretary, the Foreign Office always had a view, which we always accepted, about where was the best place in which British influence through development could and should be exerted. The aim of international development policy, which Britain drove forward so successfully under both political parties for so very many years, was to build safer and more prosperous communities overseas. It was to make sure that we helped countries, through partnership, to deal with conflicts—to stop conflicts starting, or, once a conflict had started, to eliminate it and reconcile people who had been torn apart by it, and then to build prosperity and help to promote economic activity to ensure that people had the tools to lift themselves out of poverty. It was hugely in our national interest to pursue those policies because it made us safer in Britain and more prosperous as well. The world is a small place and we are all increasingly dependent on each other. That is an eternal truth.

Furthermore, building stronger and safer societies over there helps to stop the high level of migration, which is now being fuelled by starvation and famine, climate change emergencies, and the ease of travel. The whole burden of British development policy was to try to help to resolve that by building those safer and more prosperous societies overseas.