It is reported that Justine Greening was not altogether enthusiastic when offered the job of International Development Secretary. Whether or not that is true, on the podium yesterday she gave a sense of a new broom in a department which, under Labour, seemed to have become more like an excitable branch of the aid lobby.
Much as I like Andrew Mitchell, he took on the job with a messianic fervour that sometimes reminded me of an Oxfam field worker. Rather than reel off statistics about the number of lives she has saved, Justine placed a welcome emphasis on the importance of trade and and showed a new rigour in accounting for the vast sums her Department spends.
DfID’s budget is the only one still soaring in the downturn. It is rising 50% during the term of the Coalition, from £7.8bn in 2010 to £11.5bn by 2015. Defenders of this policy like to pretend these are small sums. They are not, as anyone fighting against the closure of a hospital ward or a public library in a marginal seat knows well. So it was also good to hear Justine say she was reducing the size of a project needing ministerial approval from £40m to £5m and taking a close look at spending on consultants (which has risen from £348m three years ago to £513m this year).
All of this was welcome – but I must take issue with the general thrust of her message in the International Development session at conference. Here are my ten responses to what she said:
1) The British public is very generous by nature
Yes, this is right. As I know from my involvement with many brilliant charities, the British are a remarkably generous people. And as Justine pointed out, they are already giving vast sums each year to disaster appeals and international development. But as every Conservative knows, there is a huge difference between the actions of the state and the actions of the individual. Private philanthropy is not the same as compulsory state funding through taxes, which is too often lost to corruption or otherwise wasted.
2) Wasted potential
Justine said it was tragic to think of the wasted potential of children who might have become the next Steve Jobs if they had not lost the lottery of life. Emotive words. But a recent report by the Independent Commission for Aid Impact – our official watchdog – revealed Britain has poured more than £1bn into education in three east African countries but, such was the inattention over the programmes, these huge sums of money failed to improve pupils’ basic literacy and numeracy.
3) Stability and security
“It is in all our interests for countries around the world to be stable and secure”, said Justine. Absolutely right. Unfortunately, as has been shown by study after study, by report after report, by country after country, handing out vast sums of free money to governments of developing nations fuels both conflict and corruption. To pluck just one example from many, the House of Lords was told recently that Paul Collier, the celebrated development economist, found that about 40% of Africa’s military spending was financed by aid – hardly promoting stability and security.
This east African country is one of the continent’s most beautiful places, with a fast-growing economy and vibrant society. But to hail it as an example of how aid can boost development and good governance was bizarre. The last election there shook the entire nation by descending into terrible post-poll tribal violence, and there are already worrying signs that the next election in a few months' time may dissolve into similar murderous mayhem. It is a place ruled by some of the world’s most kleptocratic politicians, as a series of massive financial scandals have shown. It is so corrupt one British ambassador spoke out publicly against thieving officials in the most colourful language, while the UK has suspended direct payments after the latest corruption incident, involving education aid.
5) Aid as an arm of diplomacy
Justine urged party members not to underestimate how DfID’s work boosted Britain’s diplomatic clout alongside the Foreign Office. "They’ll be dealing not with two departments, but with one government." There was something slightly Orwellian about this. Ever since Tony Blair established DfID as a separate department there have been justified concerns that its work has impeded the more sober, painstaking work of the Foreign Office. This greatly angers many of our diplomats. However you cut it, these are two departments who often have competing aims; far better to mend the damage done by New Labour and fold DfID back into the Foreign Office under William Hague.
6) Quality, not just quantity
Spot on. But this gets to the root of our current approach, something I find distressing to observe as a businessman. Each year the budgets go up drastically, yet the number of people controlling it stay more or less the same. This is why we are spending so much more on consultants – and why we hand cash direct to some of the world’s more unpleasant regimes. The emphasis within Whitehall is on doling out this money – the determination of the political class to hit the UN target of giving away 0.7% of national income means that the whole policy revolves around quantity. Can you think of any other area of government where the primary aim is to increase spending as an end in itself?
7) Stop giving money to richer countries
Justine said her department was cutting aid to countries as they became richer. She rightly pointed out that 18 countries previously classified as "low-income" had graduated to "middle income" over the past 20 years. You might expect me to be pleased by the idea that we move from a relationship based on aid to one based on trade with an emerging economic powerhouse like India. In many ways I am. But then again, this shows the muddled thinking that underlines politically-driven aid: the "poverty paradox" is that four in five people struggling on under $2 a day live in these middle-income countries. So even if you accept the arguments of the aid lobby, British aid is missing many targets.
Here was something at last to make Conservative hearts beat a little faster: tough talk on making the EU deliver aid in ways that matches British priorities. This is much needed. Of course, the only reason we even hear about the 16% of British aid that goes to Brussels is thanks to exposés in the Daily Mail and Sunday Telegraph. But will we really be able to divert these huge sums from going to Europe, where they are handed on to prosperous European countries such as Turkey wanting to join the club? Even when our aid money is directed towards more deserving targets, there is so much bureaucracy that the bodies doling it out would be ineligible to receive aid under our own national rules. I look forward to real reform here – but I won’t be holding my breath.
9) Investing in what works
Again, fine sentiments from Justine. But the reality is that much aid does not work either in principle or in practice. Her response is to say she will rely on high quality research into development. Yet there is an uncomfortable smell about the way in which many of the prominent think tanks, consultants and players in the aid world take substantial funds from DfID. Our taxes even fund research organisations in Washington. So how critical or independent can all this work really be?
10) Not a penny wasted
This familiar refrain, frequently heard from Andrew Mitchell, is that DfID will ensure "every pound spent has the biggest possible impact" on the ground. Yet even charities admit only 40p in the pound reaches the intended targets, while the emergence of a vast global aid industry distorts local priorities as the recipients twist to serve the demands of donors. So while there is excellent talk this week in Birmingham of breaking welfare dependency at home, we are – as one prominent critic has pointed out – encouraging welfare dependency abroad. Just one more way in which our current aid policies betray the basic tenets of Conservatism, which is to be genuinely caring and compassionate without letting our hearts rule our heads, while all the time being judicious custodians of public money.
So where do we go from here? I wish Justine well in the difficult task ahead. She has a chance to take on the vested interests, change the culture and make her mark as a reforming Secretary of State.