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Sub-Saharan Africa (Corruption and the Economy)

Part of the debate – in the House of Commons at 7:28 pm on 1st July 2015.

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Photo of Grant Shapps Grant Shapps The Minister of State, Department for International Development 7:28 pm, 1st July 2015

My hon. Friend will be interested to hear that we were having that conversation in the Department only yesterday, and he is right to highlight it.

Let me turn to some of the things we are doing to combat these problems of corruption. First, we track and trace activities and funds. DFID works in and with developing countries to ensure that public bodies and public funds are serving the people. Over recent months, DFID country teams have been undertaking analyses of some of the constraints to growth, and the message is clear: corruption negatively influences investor confidence, as we have already established. To address that, we fund track and trace activities to shine a light on corruption and recover stolen assets. DFID has been supporting the extractives industry transparency initiative since 2002, working in 23 sub-Saharan African countries. DFID supports the International Centre for Asset Recovery, which provides practical legal assistance to countries trying to track, trace and recover funds; it has cases worth potentially $235 million in Kenya, $227 million in Tanzania, which I visited and where I discussed some of this just a few weeks ago, and $30 million in Malawi, which I was in last week. An awful lot of work is going on in track and trace.

We have also built capacity to stop behaviours and reduce the opportunities for corruption. We work with partners on the ground to build the capacity of civil society organisations and partner agencies. For example, in Nigeria, DFID has worked to reduce government funds being lost or stolen. That has resulted in some £1.5 billion of assets being recovered, and DFID is supporting 2,670 investigation cases. My hon. and learned Friend will rightly point out that that must have something to do with the scale of the problem, but none the less he will be pleased to know that UK-based police and intelligence units, and many other organs of the British state, are helping in the swift recovery of assets.

Thirdly, we are applying pressure to our international partners, and that is at the heart of this matter. We are working on that UN convention against corruption in partner countries and with the World Bank and the International Monetary Fund on strengthening financial action taskforces around the globe. We have been taking real leadership in these areas. DFID works with other G8 and G20 members, and through the UN, to strengthen the international architecture to combat corruption and illicit financial flows. I remind the House that the United Kingdom took the lead when we chaired the G8 in 2013, implementing a number of measures which have put the UK in a leadership position.

It is, however, important to continue raising our game and it goes without saying that we also take our responsibilities very seriously. All DFID offices must complete and regularly refresh anti-corruption and counter-fraud country strategies that highlight the critical barriers. I can provide my hon. and learned Friend with the assurance that as a result of this evening’s debate I will be taking even more interest in that matter over the coming weeks and months.

My hon. and learned Friend mentioned the ICAI report on DFID’s work in this area in 2014, when DFID’s resources on counter-fraud and anti-corruption were said to have been “fragmented”. We have taken a number of steps since then to address these things, but because of a lack of time I will not produce the entire list.

I want to touch on tax—the issue of tackling tax avoidance and tax evasion in developing countries—to which my hon. and learned Friend referred. As I mentioned, the UK led on the issue during its G8 presidency. What I did not mention was that more than 90 countries have now signed up to principles such as automatic tax information exchange and helping to tackle offshore tax evasion. We are working to champion the OECD’s base erosion and profit-shifting project. This is in relation to multinational companies moving profits in order not to pay tax where it should be paid.

A huge amount of work is going on across Whitehall. The Minister of State, Department for International Development, my right hon. Friend Mr Swayne, sits on a body that is responsible, across Whitehall, for trying to build the capacity to monitor these areas. The body has done a huge amount of work already in Britain to prevent corruption, and it is now turning its attention internationally.

Tackling global poverty is the right thing to do, and it is also in Britain’s interests. We will continue to insist that every Department and organisation that we fund adopt a zero-tolerance approach to corruption. We will also continue with our focus on tackling tax avoidance and tax evasion in the developing world. As I mentioned to the House a moment ago, as a product of this debate, my own attention will be more highly focused on the matter.

Question put and agreed to.

House adjourned.