[Philip Davies in the Chair] — International Development (India)

– in Westminster Hall at 12:00 am on 26 January 2012.

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[Relevant documents: Eighth Report of the International Developmen t Committee. The Future of DFID’ s Programme in India HC 616 and Seventh Special Report HC 1486 (Government reply).]

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Newmark.)

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee 2:30, 26 January 2012

It is good to initiate this debate under your chairmanship, Mr Davies, and to have the opportunity to debate the United Kingdom’s important relationship with India across a range of areas, of which development is just one key facet.

I am pleased to see one current and one former Committee member present. Our Committee decided to undertake a review of the UK development relationship with India against a background of critics of aid—those who either do not believe in it at all or want it cut—homing in on the India dimension as a target for demonstrating that, somehow, it was not justified. Those critics used various arguments saying that, for example, “India is a middle-income country”, “India has significant economic growth”, “India has more billionaires than the UK” and “India has a space programme”. Those are true facts, but they need to be qualified. I hope and believe that the Committee dealt with these issues constructively.

The range of income for middle-income countries is from a little more than $1,000 to $13,000. India is right at the bottom end of that spectrum and in reality Britons are 20 times richer than Indians or, put the other way round, Indians are 20 times poorer than Britons.

Photo of Virendra Sharma Virendra Sharma Labour, Ealing, Southall

The right hon. Gentleman may agree that although India is middle-income—quite high and rising every day—at the same time it still has as many people below the poverty line as the whole of Africa. Poverty is also a major factor.

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

The Committee addressed that argument head-on. It is worth putting on record that the implication of their criticism is that some critics resent the fact that India has billionaires, success and growth. That is what we hope development will bring; that is the whole idea of promoting development. In reality, the UK has partnered India in a constructive way throughout a lot of different dimensions.

It is worth dwelling on the question of space for a minute. India’s supposedly extravagant space programme has absorbed $6 billion in total over 50 years, which has been used mostly to give India the capacity to launch its own satellites. A country that is a subcontinent in itself, with a border dispute with China and in Kashmir, a Maoist uprising over many years in Nepal, a civil war in Sri Lanka and problems across the region, has every reason to want information to protect its own national interest. Indeed, there are many socio-economic benefits, such as being able to monitor the path of monsoons and the impact of development. One Minister said, “If somebody comes to me and says that we have completed a school in X or Y, I can check whether that school has been built without leaving my office, because we have the benefit of these things.” That is perfectly legitimate, proper and proportionate. Developing countries should not be denied aspirations because they have to deal with poverty.

More to the point, it is a fact that in spite of this success India faces substantial challenges in terms of poverty reduction. As Mr Sharma, a former Committee member, said, there are still 350 million people in India living on less than $2 a day, which is more people in that degree of poverty than in the whole of sub-Saharan Africa.

The focus of the UK’s development programme across the piece is poverty reduction and achievement of the millennium development goals. India needs to be able to deal with those issues in spades, in a sense. It is off-track on MDG 1 on reduction of poverty and on MDG 4 on infant mortality, and badly off-track on MDG 5 on maternal mortality. In these circumstances it is, in the Committee’s view, right and proper that we determine whether the UK’s development assistance can help resolve those issues.

The Department for International Development’s operation report, drawn up since we completed our report, makes it clear that the UK regards development as part of its strategic relationship with India. We should acknowledge that we have a shared history with India, which is contentious but is a fact that has engaged both our countries for several hundred years and, if one parks the fact that they have not all been good and that there have been mistakes and memories that we would rather not have to recall, it is also true that we have achieved a depth of understanding in that relationship about culture, a common language, the same sense of humour and a shared interest in cricket.

There is a natural affinity between the two countries, which is borne out by the scale of the diaspora in the UK and the scale of trade and investment. It is interesting to note that investment between India and the UK is greater than between India and the rest of the European Union put together. These significant, positive benefits reinforce the case made by many hon. Members, who believe that the purpose of development is to deliver poverty reduction and the MDGs and, in the long term, also to create viable states that can develop economically and can and will become development, trade and investment partners. That is precisely what is happening between the UK and India.

In the press release accompanying the publication of the report, which focused on the key issue—I do not often quote myself—I said:

“The test of whether the UK should continue to give aid to India is whether that aid makes a distinct, value-added contribution to poverty reduction which would not otherwise happen. We believe most UK aid does this.”

The other issue that critics raise is that India has a responsibility, as its income rises and economic performance improves, to deliver its own poverty reduction. That is true. The fact is that India is doing a huge amount to achieve that. The transfer of wealth from the rich to the poor and the programmes on health, education and work, which are raising people out of poverty, cost tens of billions of dollars and are funded by internal resources managed through the Indian Government. By comparison, the £230 million a year of UK aid is a small amount. Is it so small that it does not matter? We concluded that, qualitatively, that aid was able to help Indian authorities and agencies achieve a faster reduction in poverty and an aspiration to deliver off-track MDGs faster than would otherwise be so and that it was, therefore, beneficial. That is also the view of the Indian Government, which is why they welcome the UK as a partner. It is clear that in these circumstances the relationship is right and proper and should continue.

We looked at DFID’s priorities to try to assess whether we believe that it matched the needs as the evidence presented to us suggested. We found, first, from objective evidence, that India is an unequal society—tackling that inequality is clearly a challenge and a responsibility for Indian politicians and Ministers—and that the contrast between the richest and poorest states is huge. Some of the poorest states in India are poorer than some of the poorest states in Africa. In that context, DFID had identified that it would concentrate a high proportion of the development in four of the poorest states in India: Bihar, which the Committee visited, Madhya Pradesh, which the Committee also visited, Orissa and West Bengal, which has changed its name to one that I cannot now recall. Those are the poorest states, where a relationship has already been established and where there is evidence that DFID’s engagement can accelerate the action to meet the challenge of reducing poverty.

One thing that shocked the Committee, although perhaps those of us who know India well should not be so shocked, was the appalling state of sanitation across large parts of India and, indeed, the acceptance of the appalling state of sanitation. Committee members were genuinely shocked by the figures: 500 million or 600 million people are practising open defecation every day, without any access to the basics of hygiene. That is one of the most fundamental problems that India has to face and one of the reasons why it is off-track on some MDGs.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I compliment the right hon. Gentleman on the report and his speech. During the Committee’s deliberations, was it aware of the disproportionate use of bad sanitation by the Dalit peoples and the discrimination against the Dalit peoples throughout the country? That leads to lower life expectancy and worse health outcomes for them than for the rest of the population.

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

We were, and I will come to precisely that point. I am grateful for the intervention.

Let me give hon. Members the example of a meeting that Committee members had in a village in Bihar. There was a discussion about sanitation. It was about the extent to which people there had a problem because the surface water was so badly polluted that they could not use it, so they had started drinking from wells polluted with arsenic and iron. When we got into the discussion, it became apparent that there was no shortage of surface water, but it was heavily polluted because there was no orderly way of managing sanitation. People just went to the toilet wherever they wanted to go—anywhere, anytime—and were polluting their own water supply. Indeed, some of them said, “We’re killing ourselves and one another by the way we behave.”

There was a huge divide, I have to say, between the attitude of men and the attitude of women. The women said, “The least we should do is designate certain areas for sanitation and manage them. That will enable us to have clean areas.” The men said that that was sissy, namby-pamby nonsense, that they had always done it wherever they wanted to and that that was what they should always do. It is very difficult for outsiders to get involved in that, but we did watch the argument and concluded that it showed that community-led health and education programmes were as vital as anything.

As a result, the Committee recommended that DFID give a higher priority in its programme to sanitation. We very much welcome the Government agreeing to double the resource that they will put into sanitation in the programme. To be honest, the Committee might want to go even further, but we appreciate the fact that the Government have done that. We welcome it entirely. I will not detain hon. Members by looking for the exact quote in the operational report because I do not have it to hand, but I think that I am right in saying that the expectation is that DFID’s programme will give 5.5 million or 6 million people access to proper sanitation. Proper sanitation usually means pit latrines and associated things. That is 5 million or 6 million people who do have not such sanitation now, but it still leaves about 550 million people who will not have been reached. Of course, there are other people engaged in that work, but the provision is a long way short of what is needed.

The second issue that we were especially concerned about was malnutrition. Those who follow the progress of developing countries will know that as poverty falls and incomes rise, there is a correlation with a reduction in malnutrition, especially in children. However, in India, that is not happening. There, malnutrition is decreasing at only a quarter of the normal rate. Again, there appear to be quite a lot of social awareness problems. It is customary, for example, for women to diet during pregnancy in order to have small babies, which are easier to deliver. No one points out to them that they may be small babies, but they are likely to be severely malnourished and, indeed, at risk of not surviving. It is said that the word “nutrition” and the concept of nutrition do not even translate into quite a number of indigenous local languages. We welcome the fact not only that nutrition is a target area for DFID, but that the particular target is the first 1,000 days of a child’s life, because all the evidence is that that is critical to whether children survive beyond the age of five and grow up.

The connection between the issues that I have mentioned and maternal and child health is pretty self-evident. That is clearly an important priority, because the maternal health MDG is the one that is most off-track in India. The fact that that is an area where DFID can make a contribution is extremely welcome.

I will now deal with the intervention by Jeremy Corbyn. Social exclusion was an issue on which there absolutely was focus. It is a slightly delicate issue, but one on which DFID and the Indian Government can to some extent work to reinforce each other. It is evident that the poorest people, the people whose communities are furthest off-track in relation to MDGs, are those who are socially excluded: the Dalits and other low castes, the hill tribes and minority religious groups. When one talks to the Indian Government, they say, “Our constitution and our political drive is to include these people,” but given that, culturally, they have been excluded from the community, it is very difficult to enforce that. Sometimes it is helpful for a development partner to identify with statistics and information why the problems persist and the practical measures that could be taken to tackle them. I think that DFID has said that it will prioritise that.

The final issue, on which we would welcome an update from the Minister, was the commitment by the Government, which is entirely consistent with the idea that India is in transition out of being a development recipient to becoming perhaps a development partner, that 50% of the UK programme in India should, by the end of the programme, be targeted on private sector development. In principle, the Committee wholly supported that, because ultimately development is about generating a viable private sector that can generate a tax base, wealth and everything else to sustain the public services.

However, we were not entirely convinced as to whether DFID had any idea about how it would deliver on the target and with what partners. That is not to say that it was an illegitimate target, but I think that we are entitled to say to DFID that it needs to flesh out what it intends to do. I therefore ask the Minister these questions. How can the Government ensure that that private sector development reaches the poorest states and the poorest communities, rather than the low-hanging fruit, which are easier to reach and for which the market might deliver anyway? What might be the role of CDC in its newly revamped format; will it be part of that? What about the role of UK Trade & Investment? We discovered that it is very active in places such as Mumbai, Hyderabad and so on, but does not get to Bihar, Orissa and so on. The question is whether that needs to change.

We accepted, once we had discounted the critics, who simply want to discredit aid and development altogether, that there were legitimate issues about a country such as India, which is developing and creating substantial wealth, technology and innovation of its own, as well as having an aid and development programme. However, when we look inside that, there are two things that absolutely justify the maintenance of the partnership. What I am talking about is entirely in the spirit of the International Development Act 2002, which is focused on poverty and the MDGs.

First, the Indian Government are putting very substantial resources into redistribution and raising taxes to fund their own poverty reduction programme; and they are lifting millions of people out of poverty each year. However, the pace at which they are doing that needs to be accelerated. The UK is important as a partner less because of the resource that we are putting behind that and more because of the expertise and technical help and support, backed by resources, that we can put in. That will help to achieve a situation whereby hopefully by 2015 India will have made material progress towards eradicating poverty, the off-track MDGs will be coming back on-track and we can move from a relationship whereby India is a client state for development to one whereby we are states that are co-operating on partnership and development. Indeed, that is already happening in third countries—for example, in parts of Africa.

The Committee’s conclusion was that to have terminated the aid programme in India prematurely would have deprived millions of people in India of an opportunity to be lifted out of poverty, and Britain and India of developing a relationship that could be mutually beneficial to the poor people not just in India but in Asia, Africa and elsewhere in the world.

On that basis, I am happy to say that the Government are fundamentally right to stay in India. We have made some constructive suggestions about what the priorities should be, some of which they have accepted. We also have some questions which the Government will need to answer over time if they are to fulfil their own stated ambitious objectives.

Photo of Michael McCann Michael McCann Labour, East Kilbride, Strathaven and Lesmahagow 2:50, 26 January 2012

I endorse everything that has been said by Malcolm Bruce in his position as Chairman of the Select Committee.

Over Christmas and new year, I started reading the Max Hastings tome, “All Hell Let Loose: The World at War 1939-1945”. In his introduction, he explains that one of the most important truths about war, as in all human affairs, is that people can interpret what happens to them only in the context of their own circumstances. The fact that objectively and statistically, the sufferings of some individuals are less terrible than those of others elsewhere in the world is meaningless to those concerned. The same logic can be applied in the case of India and aid.

I am a relatively new member of the Select Committee, and India was my first overseas experience. Since then, the Committee has visited the Democratic Republic of the Congo, Rwanda, Burundi, and, in December, South Sudan. It is when one visits these places that the relativities of poverty strike home.

In New Delhi, we visited a slum inhabited by third-generation Bangladeshi immigrants; children as young as two and three were rummaging through bins to find waste to recycle. They were paid 1 rupee for a kilo of glass. The community had hooked in—dangerously and, needless to say, illegally—to the electricity supply with the most primitive devices that I have ever seen. In Burundi, the prospect of electricity for a local community is a pipe dream. People must interpret what happens to them in the context of their own circumstances, which is why India must be placed in context. It has a population of 1.2 billion people, 400 million of whom live on less than $1.25 a day, and 800 million of whom live on less than $2 a day. I am pleased that the Government and the Select Committee are not far apart in their assessment of India, which was pored over in some detail by the Chairman just a few moments ago.

I want to highlight just three issues from the report: sanitation, which has already been covered; private investment; and discrimination and social exclusion. On sanitation, the Government agree with the Select Committee’s view. The right hon. Member for Gordon mentioned Bihar. On our visit, the Committee split into two groups; one visited Bihar and the other visited Madhya Pradesh. I did not visit Bihar, but when we all joined up together, we discussed our experiences.

In Bihar, a state of 90 million people, public defecation is routine. In some parts of the state, toilets are available but people still choose not to use them because they are considered unhygienic. Water supplies beneath the ground are contaminated with minerals, while above-ground supplies are contaminated with waste. I am therefore pleased that the Government agree with the Select Committee’s view that the emphasis must change from health to water and sanitation. Put simply, poor sanitation is creating a huge number of health problems in the country.

On social exclusion and discrimination, despite the fact that untouchability was outlawed by article 17 of the Indian constitution, it is none the less alive and well. In Madhya Pradesh, we visited a Dalit village and had the opportunity to talk to some women and girls. We asked for examples of discrimination, and two were offered immediately. Manual scavenging, which has been outlawed, is still rife. For anyone who does not know what it is, let me explain. People who are in lower castes have to carry the night waste of people from a higher caste, and they are paid 8 rupees a month per household. One lady explained that she carried out that task for 100 houses. It led to skin infections and miscarriages.

Another example is of a young girl who, because of her under-nourished state, looked about six or seven, when in truth she was about 13 years old. She explained to us that when she went to season her food at school, she was told by the teacher to stop. She was not allowed to put her hand in the same salt as the other children. When she pluckily replied, “I am a human being, too,” the teacher said, “No, you are not.” That is utterly extraordinary and demonstrates that discrimination is still alive and well. There is much work that needs to be done in that area. As the right hon. Gentleman said, it is good that that is recognised, both in our report and in the Government’s response.

The third element is the Government’s private sector investment policy. I must declare that I am a sceptic. I agree wholeheartedly that jobs and growth take people out of poverty, but I remain unconvinced by the Department for International Development’s approach. I direct Members’ attention to paragraph 75 of the report. In an evidence session, I asked the Secretary of State for more details about how the investment would take place. He replied that

“you do not have to have a prescriptive line on this.”

I disagree. This is British taxpayers’ money, and it is the Select Committee’s job to ask the difficult questions. It is the Secretary of State’s role to provide the answers, and he could not do so, as the record demonstrates.

The Government’s formal response puts a little more flesh on the bone. Like the right hon. Member for Gordon, I want the Minister to give us more detail on what investments will take place. When we were in one of the villages in India, we met a woman who had bought a buffalo. She then bought another buffalo through a micro-finance project. When she paid off the loan, she said of her work-shy husband, “He now thinks that it is his business,” which demonstrates that those types of subtleties take place across the globe. Half of the money from the Government programme will go to private investment. We must be told how that investment will take place, because not everyone can buy buffaloes to provide milk for the local communities and repay the loans. I therefore remain sceptical, but I would be delighted to be proved wrong.

In conclusion, there is a widespread recognition that the development relationship with India has to change, but I urge caution. The Daily Mail would have us believe that the Indian Government are building space shuttles, which is certainly not the case. In truth, the satellite technology that they are using is more about putting in place communications systems for their vast country, not space exploration.

India is a nation of extremes—wealth and poverty, and freedom and oppression. There is one issue that we must not forget. If we believe that the millennium development goals are the benchmarks by which we will eradicate global poverty, India must be part of the solution. With 400 million people living on less than $1.25 a day, and a further 800 million people living on less than $2 a day, we will never achieve our goals unless India is part of the solution. On that cautionary note, I will end my contribution.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham 2:58, 26 January 2012

It is a pleasure to serve under your chairmanship, Mr Davies, to follow Mr McCann, and to talk in a debate initiated by my right hon. Friend Malcolm Bruce, whose expertise in this field is second to none in this Parliament. Moreover, he has been an enormous help to me in my role as chair of the Liberal Democrat committee on international affairs, although I realise that today he is speaking in a less partisan role.

I also bring a little bit of personal experience to this debate. I worked for a development agency in India during the 1990s. I was seconded by Oxfam in the UK to the fledgling organisation, Oxfam India, which already had a locally registered charity and an overwhelmingly Indian staff force. Indeed, we had a Hindi slogan, milka hum garibe per pa sekte heh vijay; if my Hindi is not too rusty, that means that together we can overcome poverty. It was an important message that that was not a western import, but something that mattered to all the citizens of India. With your indulgence, Mr Davies, and because I am sure that it is within the terms of the debate, as Oxfam is a DFID partner, perhaps I may congratulate Oxfam on the 60th anniversary this year of its presence in India, and congratulate Oxfam India on its admission as a full member of Oxfam International with an Indian board and a completely Indian staff. That changing relationship is, in microcosm, an illustration of the changing relationship between Britain and India.

Traditionally, India has been the largest recipient of UK aid, and the Select Committee and many other people, as my right hon. Friend said, have raised questions about the continuing nature of Britain’s aid programme with India. India is now a middle-income country, but it still has more people living below the notional poverty line of $1.25 a day than the whole of sub-Saharan Africa. The future DFID programme will focus on many of the poorest states in India. States such as Bihar and Orissa are among the poorest in the world, and would certainly be low-income countries if they were separate nations.

On nutrition, the Select Committee’s report draws attention to some remaining alarming facts. India scored 23.7 in the 2009 global hunger index, putting it in a category where levels of hunger are considered to be alarming; it is at a level comparable to that in Burkina Faso and Zimbabwe. Almost half of Indian children are undernourished, which amounts to one third of the world’s undernourished children. As my right hon. Friend the Member for Gordon said, India is far from on track to achieve some of the millennium development goals.

Recent research by Andy Sumner of the Institute of Development Studies shows that 70% of people around the world who live below the poverty line live in middle-income countries, where income may be badly distributed, and there may be issues of equality as well as development and superficial growth. It may be attractive superficially to withdraw aid from middle-income countries, but it must be done carefully and gradually, because there are existing commitments to anti-poverty programmes, many of them involving, as my right hon. Friend said, public health, education and empowerment, and not simply providing goods and structures.

The Select Committee’s report rightly noted the scale of the Indian Government’s expenditure on things such as nuclear and space programmes, which have been controversial, but they identified them, rightly in many cases, as an essential part of India’s development. They are fundamental to India’s development of energy infrastructure, and to telecommunications infrastructure, and flood monitoring, which is a direct benefit to some of the poorest people in India. Without a satellite system and the so-called space programme, it would be difficult for India accurately to monitor the impact of flooding, and to map flood-risk areas. It may as well be criticised for developing a telephone system or solar energy. I am glad that the Select Committee agrees.

There seems to have been a large measure of agreement between the Select Committee and DFID; not only does the Committee support many of the emerging priorities for DFID, but the Government, in their response to the report, agreed with a large number of the Committee’s recommendations—the focus on poorer states, sanitation, nutrition, and the priority given to maternal and child health, social exclusion, and working with the private sector.

I heard the comments of the hon. Member for East Kilbride, Strathaven and Lesmahagow on the relationship with the private sector, but when I lived in India and worked for a development agency there, I became aware that the contribution that organisations such as Oxfam, and even Government programmes the size of DFID’s, make to poverty on a grand scale was dwarfed by the potential for the private sector to impact on people’s lives, for good or ill. There are good examples of Indian corporations such as Tata pursuing effective social responsibility programmes that are much more developed than anything we in this country tend to call corporate social responsibility. The reality of poverty is often staring them in the face every day, and the Indian corporate sector has a proud record of poverty alleviation.

At the same time, other companies go in recklessly, especially to the poorest states, and exploit natural resources without properly consulting local populations, causing immense damage, sometimes environmental, often social and often costing many lives. The biggest and most famous example is Bhopal, but there have been others on a smaller scale since. Wearing my hat as chair of the all-party group on tribal peoples, I know that some of those examples involve tribal people in states such as Orissa, where companies such as Vedanta Resources were exploiting aluminium potential through bauxite mining, and could easily have trashed the local environment that was precious to the tribal people there.

We must be cautious in our approach to the private sector, but DFID’s instincts are absolutely right, and the private sector can sometimes bring light-footedness, flexibility and imagination to development, with an overall potential that is much greater than simple Government-to-Government development aid. That high level of agreement between the Select Committee and the Government is very welcome.

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

It is important to note that the Committee is responsible for holding DFID to account for Parliament, and I want to make it clear to my hon. Friend that we take evidence, and we are prepared to address criticism, but that includes backing a Department—particularly when it is under attack for what it is doing—addressing some of the critics, and helping to confront some of the arguments the other way. It is not that we instinctively want the Department to work, but we have a constructively critical approach. The agreement is based on a thorough analysis of the evidence, not some sycophantic, cosy relationship. It is important that that is understood.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

My right hon. Friend makes an important point. I did not mean to imply even that the Committee had not found fault with DFID’s programme. It has given a clear direction on things that in many cases must change, but it is welcome that the Government have accepted many of the Committee’s recommendations straightforwardly.

The Secretary of State has said that the UK is in the final mile of its aid relationship with India, and that represents an honest assessment of Britain’s maturing relationship with one of the world’s leading new powers. Increasingly, the way in which countries such as Britain will help to alleviate poverty in India is not necessarily through aid, but through fair and open trade. The European Union’s proposed free trade agreement with India—it might even be mentioned at the forthcoming European Council if we are lucky—is important.

India and Britain are allies on climate change and the ongoing United Nations framework convention on climate change, and I think both appreciate the risk to the poorest people in the world, including those in India, and the need to emphasise adaptation to climate change as well as mitigation in the international climate finance fund, and Britain’s climate finance programme. They are collaborators on international peace and security, and they have shared experience on development issues, which could be valuable to countries around the world.

The time is coming when the last vestiges of a colonial relationship should be laid gently to rest and handed over to the historians. India and the United Kingdom now need to stand side by side in the world, standing up for shared values of democracy, respect for the rule of law, and human rights, and with deep concern for the world’s poor and how to help them in practical and cost-effective ways through development assistance. Both countries have an enormous amount to teach the rest of the world about development. The eventual end of

Britain’s aid programme to India, when it comes, will be a proud moment to be celebrated by both parties, but it should not be the end of the story.

Photo of Barry Gardiner Barry Gardiner Labour, Brent North 3:09, 26 January 2012

I am delighted to take part in this well-informed debate, and I pay tribute to Malcolm Bruce, who chairs the Select Committee, for initiating it. He spoke with great knowledge and tact, and he put his questions and criticisms in a probing rather than a partisan way. I hope the Minister will be able to respond to many of them when he sums up.

I would like the Minister to clarify the Government’s position on aid to India somewhat in the aftermath of the Select Committee report. India is home to one third of the world’s poor and to more than 20% more poor people than all of sub-Saharan Africa. Across India, a child dies every 15 minutes from a preventable disease, one in three people remain illiterate and more than 400 million Indians have no access to electricity.

As the right hon. Gentleman outlined, poverty is largely focused in four Indian states: Bihar, Madhya Pradesh, Orissa and Paschim Banga—the state whose name I think he was looking for, which used to be known to us as West Bengal. Between them, they are home to nearly one fifth of the world’s poor.

In 2009-10, Britain spent £295.1 million on development projects in India. Of that, 45% went to the Indian national Government, while 48% was spent in partnership with those four states, which are the poorest in India. Britain’s aid targets were health, education, rural poverty, trade development and civil society. Its projects are achieving quite significant progress, providing 9 million slum dwellers with access to water and sanitation last year, putting 30 million more children in primary school since 2003, saving 17,000 lives per year by improving health care and lifting 2.3 million people out of rural poverty since 2005.

The Indian federal Government no longer believe themselves to be an appropriate recipient of development aid—at least not since our Government asked whether they thought they should receive it. Previous Governments had adopted a different approach, saying that that was not a question they would ask the Indian Government and that they simply wished to provide aid to achieve the millennium development goals for the world. Of course, once we ask the question, it is difficult for a proud federal Government such as India’s to say that they still want aid. I think the Government made a mistake in asking that question, but it is on the record, and both countries have set out their position, so it has to be respected.

The International Development Secretary gave a mixed message on the future of DFID’s Indian programme in his speech on Christmas eve, and we should probe this further. He defended the Indian aid programme, highlighting the fact that

“India is a place where there are more poor people than the whole of sub-Saharan Africa” and stressing the success the Indian Government have had. However, he went on to say:

“Now is not the time to stop the programme in India but I don’t think we will be there for very much longer.”

The Secretary of State is an eminently reasonable man, for whom I have tremendous respect, and he has done a first-class job since he arrived in the Department. He is a reasonable man and he speaks reasonably, but others do not always speak reasonably, and the right hon. Member for Gordon outlined their argument. Indeed, in yesterday’s debate on UK-India trade, which took place in this hall, Tony Baldry put things rather differently. He spoke of India’s economic growth of 7% a year, and said that, with its nuclear and space programme, it had the responsibility to ensure that the benefits of that growth were more evenly shared among its people.

I want to take this opportunity to echo the words of the right hon. Member for Gordon and to address that distortion. India is on course to reduce poverty from 55% in 1990 to just 22% in 2015. No other country has ever managed such a sustained reduction in poverty, taking one third of its population out of poverty in a mere quarter of a century. India has put huge resources, proportional to its budget and its GDP, into poverty reduction. It spends a higher percentage of its budget on education than we do in the UK, its free food programme is the largest hunger-alleviation program in the world and the employment guarantee scheme has been incredibly successful at getting people into work wherever possible. Since 2004, India has increased the percentage of GDP it spends on health, education and social services from 5.35% to 7.2%. As I say, it spends a higher proportion of its annual budget on education than we do in the UK—12.7%, compared with 11.5%.

Despite India’s impressive growth and her progress on infrastructure and urban development, and despite the fact that her middle classes have quadrupled in size in the past decade, India simply could not afford to alleviate her poverty on her own, even if she poured all her resources into it. A 2009 World Bank report noted that even if India legislated for a 100% marginal tax rate, the funds raised would plug only one fifth of its poverty gap. The idea has been peddled that India just needs to tax its flowering industries and its billionaires a little more, but that is a myth, and I am delighted that the Chairman of the Select Committee has nailed it this afternoon.

We must continue to support India in alleviating poverty. That is an international responsibility, and we must meet it. Will the UK Government commit to tying our aid to India to net reduction reductions in poverty and to India’s increasing ability to pay for poverty reduction itself? In that way, any decision to stop helping some of the world’s poorest people out of poverty would be based on facts on the ground, which can be established and quantified, rather than on what sometimes seem to be the whims of the populist press in the UK.

Those who argue for an end to aid should consider how things would be if Britain bordered the world’s next superpower and was surrounded on all sides by failed and unstable states, some with nuclear capacity. Would they then be so critical of relatively high spending on defence and space?

While I welcome the renewed focus on the three poorest states, I think we need clarity. As yet, we have had no comprehensive plan for how DFID will work with the private sector, but only a small number of specific examples. There are hints that much of this work will involve microfinancing, but will the Minister clarify the situation and perhaps expand on what is being done?

The Select Committee has criticised DFID’s internal knowledge of, and experience with, the private sector, particularly in-country. The delivery of such a large fund will require a far greater specialist team, but DFID has announced no plans to implement one. In total, DFID has only 58 private sector specialists, divided between all its projects across the globe. Does the Minister propose to enlarge that team to deliver the micro-level projects that such private sector funding may require?

In his Christmas comments, the Secretary of State described the fund as returnable to the taxpayer, but neither the India project plan nor individual project descriptions give any explanation of what he actually meant. The most likely explanation is that he was alluding to the fact that a large percentage of the funding will be delivered through microfinancing, which is repayable to the fund, and which can then be reinvested. If that is the case, describing it as returnable to the taxpayer in the UK may be misleading. If it is not the case, and the money will literally be repaid to DFID and then the Treasury, will the Minister tell us? We need a guarantee that when these funds are returned, they will be reinvested in full in India to alleviate poverty there.

Another area of concern is the long-term future of the India programme. The Secretary of State has guaranteed funding until 2015. We should certainly support that, but he has also said that he does not think it will continue for much longer, and that he sees it as a short-term programme. That troubles me for two reasons: first, insecurity of funding streams makes planning budgets at national, state and local levels nearly impossible. Deliverers need to be able to count on funding streams in the medium to long term to plan budgets efficiently and effectively. Secondly, although India has made progress in combating poverty, as I outlined, by 2015, 22% of the population will still be living in poverty. We need a guarantee that any reductions will be tied firstly to the rate of reduction in poverty, and, secondly, to increases in India’s capacity to bear that burden itself.

I welcome the tightening of focus on the three poorest states, but not if it comes at the expense of the many millions of people living in poverty in other Indian states. For example, Orissa, which was the fourth bilateral partner state with DFID, has, in large part through DFID’s work, succeeded in reducing the poverty rate from 21% of its population in 2006 to 4% in 2011. That is a phenomenal achievement. However, the population of Orissa is 36 million, so that the remaining 4% means that there are more than 1.5 million people still below the poverty line. That is a population equivalent to the whole of Gabon, Gambia or Botswana. Yet the Department appears to be shifting its focus to sub-Saharan Africa.

The Government are, I think, pushing in the right direction on their India aid programme, but we need clarity about the detail, and we do not have that clarity yet. Will the Minister flesh out what the increased private sector focus will look like, and how and by whom it will be administered? The Government need to provide a sense of security to central and state Governments in India by guaranteeing that any cuts to the programmes will be made for the right reasons, and they need to stop playing up to the hysterical and factually incorrect opinions that too often come from their Back Benches.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North 3:22, 26 January 2012

I welcome the fact that we are having a debate on India and on human rights; I also welcome the Select Committee reports and the responses by DFID and the Foreign Office. However, it is unfortunate that two debates are being conflated into one afternoon. Traditionally, for the past 10 years or so, there has been a specific one-day debate here on human rights. I hope that what has happened today is not a harbinger of a future when the human rights debate will be added to something else, rather than being given a stand-alone debate. That is not something for Members at this sitting to decide, but I hope the message will get back to the Backbench Business Committee that an undertaking was previously given that human rights would take up a whole day throughout this Parliament. I hope that that will be adhered to in future.

I want, if I may, to refer to both human rights and India in the debate, which I understand goes on for three hours and can cover both subjects. Am I correct on that, Mr Davies?

Photo of Philip Davies Philip Davies Conservative, Shipley

The first half is about India. The second half is about human rights.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

So why does the Order Paper say they are together?

Photo of Philip Davies Philip Davies Conservative, Shipley

One follows the other. The next debate is about human rights.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

And at what time are we concluding this one?

Photo of Philip Davies Philip Davies Conservative, Shipley

We conclude this first and the next debate will be about human rights.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

So I am half right; I have got half the time.

Photo of Philip Davies Philip Davies Conservative, Shipley

The hon. Gentleman can speak in the next debate—I think he indicated that he wanted to speak in it.

Photo of Philip Davies Philip Davies Conservative, Shipley

Human rights should wait for the next debate, but if the hon. Gentleman wants to speak about India he can do so now.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I shall briefly make a couple of points on India. My points will be half made, because, as I said, time is restricted and it should not be.

I welcome what has been said about the enormous poverty in India, and the number of people involved. I do not agree with the view in the popular press that we should not give aid to India; I think we should. I want to draw attention, as I did when I intervened on Malcolm Bruce, to the treatment of Dalit peoples. I say that because I am chair of the trustees of the Dalit Solidarity Network.

Dalits are the largest group of people in the world who are systematically discriminated against on the basis of their descent and caste. They perform the worst jobs in the dirtiest conditions, and have the shortest life expectancy, the lowest level of education, the worst housing and the lowest pay and employment levels of any group in India or, indeed, the rest of the world. After numerous meetings with DFID, I accept that its assurance that British aid is tied; the Department makes the point that we are not going to be involved unwittingly or otherwise in discrimination against Dalit peoples through our aid programmes, and that several projects and programmes enhance the lifestyle, values and opportunities of Dalit peoples. I welcome and support that aspect of what is happening.

I want to draw attention to the issue on a wider scale. It was raised at the Durban millennium summit in 2000 and will no doubt continue to be raised elsewhere. It cannot be right that a country with India’s aspirations to modernity and to taking its place in the world, including a permanent place on the UN Security Council—a country that is obviously a major power in every aspect—can allow such discrimination to continue. Whenever I have raised that matter with Ministers or politicians in India, during visits to India, or with the high commission here, those concerned always point to the Indian constitution, which was written by the great Dr Ambedkar, who was himself a Dalit, although he later changed his faith from Hindu to Buddhism. Dr Ambedkar’s constitution is a remarkable document and clearly outlaws discrimination on the basis of caste or descent. However, it is equally clear that in reality Dalit people’s opportunities to get access to justice do not exist in many parts of the country. Denial of access to the law, discrimination against them by the police and by employers, and the traditions that are continued in many villages, are inimical to the interest of Dalit people.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

The hon. Gentleman is right to draw attention to discrimination against Dalits, and not just Hindu Dalits. There is continuing discrimination even among people who identify themselves as Christians, or even Buddhists or Muslims, who are from Dalit families and communities. However, he must acknowledge the long-standing campaign by the Government of India to reduce discrimination and provide work opportunities. The Government should take considerable credit for the progress that they have tried to make with an admittedly enormous social problem.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

The hon. Gentleman makes a reasonable point, and I accept and understand that, because of the constitution and pressure from leaders of the Dalit community—which he rightly points out is not entirely Hindu but includes many different faiths—for a long time the Government of India have established reserved occupations and employment levels for people of Dalit descent. There is therefore a certain level of public employment of Dalit peoples, which is often the only access to any kind of normal, sustainable employment. The discrimination operates through the informality of other work, and through discrimination by a large number of private sector employers—but, interestingly, not usually the international ones; it is much more likely to be the smaller, local businesses. Some progress has been made, but the protection of a proportion of employment in public service for Dalit people often enables Governments to feel satisfied that they are doing their bit. However, it does not address the wider issues of the fundamental discrimination that goes on elsewhere.

I know that the Minister is fully aware of the matter, and I hope that the Select Committee on International Development, and the rest of the world, will keep its eye on it. The way in which 200 million people in India and in some other countries, such as Tibet, are treated because of discrimination by caste and descent is simply wrong. Apartheid in South Africa was wrong, and Dalit discrimination is equally wrong anywhere in the world.

Photo of Rushanara Ali Rushanara Ali Shadow Minister (International Development) 3:29, 26 January 2012

I pay tribute to Malcolm Bruce and to the Foreign Affairs Committee for its inquiry. I also welcome the contributions to this debate.

A range of issues have been cited, including sanitation, health, tackling discrimination and exclusion, and the continued need for a focus on poverty reduction, given the changes proposed by the Government in respect of the important role that the private sector needs to play in Indian development. We must consider how we make such a transition in a way that maintains focus on alleviating poverty and tackling inequality.

India is a hugely important country for our aspirations in meeting the millennium development goals, for the future of international development and for economic development and growth. As the right hon. Member for Gordon and others have pointed out, our two countries not only have historical links—as shown by the success stories of the UK’s Indian population—but a strong future to look forward to and be optimistic about, if we play our cards right, both in terms of our work in international development and in terms of our economic relationships. Those relationships include the strengths that we have through our diaspora communities here in this country and their trading and family links with India, as well as their interest in alleviating poverty in India. Of course, the diaspora communities play a key role by providing remittance aid and support to India. We have a rich array of mechanisms for contributing to India in order to see it thrive and, in time, we ourselves will benefit from helping India; indeed, we are already benefiting.

We can rightly be proud of the progress that we have all worked for in making our contributions through the UK aid programme and other links towards India becoming a middle-income country. Although India takes the credit for getting to that stage of development, our relationships with and contributions to India should not be underestimated.

As right hon. and hon. Members have pointed out, 72% of the world’s poor now live in middle-income countries and, given that fact, we must change the way that we provide development aid. Once India was squarely in the group of developing countries, but now it is a roaring economic success story. The three decades following India’s independence saw minimal progress, but that legacy was cast aside in the next three decades, as India enjoyed staggering growth figures. India is one of the fastest growing economies in the world, even at a time of global economic crisis. Its economic growth has topped 7% in just about every year since 1980. As President Obama said during his 2010 visit to India:

“India is not emerging, it has already emerged.”

What is remarkable about India’s growth is that it has not just been dependent on labour-intensive, low-priced exports to the west. Instead, it has been driven by a new middle class consuming domestically produced goods, the rise of service industries and a focus on high-tech manufacturing. Innovation and entrepreneurship have been central to the birth of the new India, which many of us are very excited about, especially those who have an origin there. I myself do not claim to have an origin in India, but many people in my constituency and in other Members’ constituencies do. Their presence in Britain is a positive example of the links between Britain and India.

As the former colonial power, Britain has had a long, if sometimes chequered and challenging, relationship with India, which several Members have pointed out. As we look to the future—not only the future of India, but the future of Britain—we have a unique opportunity to build a new and special relationship between the two countries, which will provide a significant opportunity for the UK economy in the years ahead. We can already see the benefits of that relationship, and in the years to come there is no reason why we should not continue to see them.

Although our aid programme is not about promoting economic opportunities, as several Members have pointed out, if we can establish an appropriate aid strategy, there will be great dividends, not only for our economy but for India’s. It will be of mutual benefit for the two countries.

Having said that, there are two Indias and that has been reflected in the Select Committee’s report and in the contributions to this debate. One India is vibrant, innovative and at the forefront of a new political and economic powerhouse, but the other India looks much less inspiring. The testimonies that have been given in the Select Committee’s report, some of which were given to the members of the Select Committee on their visit to India, show that there are two Indias. There are references in the report to human rights violations and discrimination, which are faced by particular groups, such as the Dalits, women and other religious minorities. There are also concerns about lack of freedom of speech and other human rights violations, and we should maintain our focus on those issues.

The reality is that, behind India’s story of success, there is also deep poverty, which all the Members who have contributed to this debate have highlighted. There are 800 million people in India living on less than $2 a day, half of whom—400 million people—live on only $1.25 a day.

A third of the world’s poor live in India. As several hon. Members have pointed out, there are more poor people in India than in sub-Saharan Africa. Tackling such poverty and inequality must be the focus of our development programme.

Regarding the work that we have already done, when Labour was in power, there was a great focus on reducing maternal mortality in India. Huge progress has been made in that area, but much more needs to be done, given that India still accounts for a fifth of all maternal deaths globally. Child mortality in India has also fallen, but each year 1.83 million children in India still die before the age of five. The Select Committee’s report highlights many of these continuing challenges and, in essence, points to the need for a continued or even renewed focus on alleviating poverty.

Although the promotion of the private sector’s role in providing aid to India is significant, and builds on some of the work done under the last British Government, there are major issues that need to be addressed, as has been pointed out already in this debate. If we are to channel 50% of our aid to India through private sector development, it would be valuable to see precisely how that will be done. What kind of programmes will be beneficial for pro-poor development? It is also important that there is sufficient monitoring and evaluation of the programmes and their funding, including programmes that are in the private sector. Just as we set tests for non-governmental organisations when we channel aid through them, it is vital that the same standards of measurement and transparency are applied to aid that is channelled through private sector organisations.

There are great opportunities for developing the private sector’s role in providing aid. We can see the impact that microfinance has already had in many parts of the world, including in India, Bangladesh and many other countries. However, although we welcome the role that the private sector can play in tackling poverty in India, there is a real need to ensure that our focus remains on poverty alleviation. Right hon. and hon. Members have highlighted the need for that focus on poverty to remain, and it would be valuable to see more detail in the Department for International Development’s plans, to build on the detail that has already been provided.

I want to highlight a couple of other issues, one of which relates to monitoring. We believe that the Department should provide further information on the significant investment being channelled through the private sector, including details of the kinds of investment and of how it will focus on poverty. The second issue relates to gender, on which there has been some emphasis. How precisely could programmes such as microfinance be used to support women and create economic opportunities for them?

I welcome the contributions made by the members of the Select Committee and, in this debate, the focus on ensuring that we continue to provide assistance to India. Looking forwards to 2015, we must consider how best Britain can maintain its focus and act as a catalyst through its aid programme, but we must also ensure that we have a way of exiting that ensures that India can be genuinely self-sufficient. We must leverage our influence and resources in such a way that over the coming years—post 2015—India is genuinely in a position to itself provide the welfare systems and support needed to tackle poverty and is no longer dependent on aid, from Britain or anywhere else. The facts and numbers show, however, that we are a long way from that, and Britain must therefore continue to maintain its commitment to the aid programme until such time as India is genuinely in a position to lift the millions who remain in poverty and who require our assistance.

Photo of Stephen O'Brien Stephen O'Brien The Parliamentary Under-Secretary of State for International Development 3:41, 26 January 2012

I congratulate the Chairman of the International Development Committee, Malcolm Bruce, on securing this important debate, and I thank him for his excellent speech, which reflected the combined work of him and his Committee members. It not only focused on the India programme, but set it in a context that had a huge read-across to the justification and principles that underlie where we should place our UK effort to be partners in aid, and then to graduate to development and to securing a better future for people who have many disadvantages. His comprehensive, thorough, thoughtful and evidence-based speech got the debate off to a most respectful and useful start. Our timing happily coincides with the Foreign Secretary making, as we speak, a keynote speech to launch the King’s India Institute at King’s College, on what is India’s republic day and the 62nd anniversary of the signing of its constitution, so there is some poignancy to the debate.

Let me put the debate into context. When the coalition Government came into office in 2010, we made it clear that we wanted to build a different style of international development, one based on dynamic partnerships that reflected our networked world and focused on a relentless pursuit of results and value for money in the Department for International Development’s work. Our vision acknowledges the prominence and value of Britain’s involvement in the alliances on development that were so important in the past, but also looks to the relationships and international forces that will shape the future.

Engagement with the emerging powers is a cornerstone of the policy, as the Secretary of State for International Development set out in a speech at Chatham House in February last year. I am sure that Members will have noted, as did the Secretary of State in that speech, that in the space of a few short decades the world has become a very different place. Whether we are talking about the BRIC countries—Brazil, Russia, India and China—the Asian dragons, the tiger economies or the gulf giants, the new powers will influence world affairs in the future, and it is therefore in our interests to engage with them now.

Of all the emerging powers, it is India with which we will have the most multidimensional relationship and partnership. Our shared history, and political and personal links, all mean that India is important to the United Kingdom, and the Prime Minister’s visit so soon after the election in 2010 reflected the importance we attach to the relationship.

As the right hon. Member for Gordon is aware, in the last year we have completed a root-and-branch review of the aid programme to ensure that our spend is targeted where it can achieve the greatest results. The review made it clear that we can achieve real results for poor people in India. Why? Because the Indian Government are ploughing record tax revenues into poverty reduction programmes, and in that environment, our development expertise can ensure that the impact of those resources is maximised for the benefit of the poorest in Indian society. Indeed, we estimate that the United Kingdom’s aid has lifted 2.3 million people out of poverty in rural India in the past five years and put an additional

1.2 million Indian children into primary school since 2003, demonstrating that there has been a succession of Administrations with a shared responsibility.

The value of these efforts received cross-party endorsement when the International Development Committee completed its assessment of the UK’s development programme in India and concurred with our decision to continue our funding until 2015. I recognise the right hon. Gentleman’s perfectly legitimate, well-articulated and constructive criticism, and his constructive approach to holding a Department of State to account—through his Select Committee, in this case—and I hope it is noted that DFID delayed finalising the 2011 to 2015 operational plan for India until after his Committee had made its recommendations. We were then able to take the recommendations into account before publishing the operational plan on the DFID website in October 2011.

The pace of India’s transformation to date has been remarkable, as hon. Members have noted. Although economic growth has slowed in recent months, India is still achieving enviable rates of growth—rates we would give our eye teeth for—lifting 15 million people out of poverty every year. But we know that the benefits of the growth are not being shared equally and the scale of Indian poverty remains massive. India’s poorest states—each of them larger than most African countries, as has been well noted—still face huge development challenges. More than half the girls in Madhya Pradesh do not yet go to secondary school, more than half the young children in Bihar are undernourished, and one quarter of all pregnancies are unwanted or mistimed.

Our decision to maintain our programme in India was coupled with a very clear conviction, well picked up by the Select Committee, that the programme should also be radically different. Because of India’s economic growth and its own increasing resources, we are bringing the development partnership up to date. Since the publication of the International Development Committee’s report on the future of aid to India, we have agreed a new approach with the Government of India, and I think that the right hon. Member for Gordon importantly wanted to ensure that that had happened.

The approach has three main pillars. The first is an innovative new private sector programme, using returnable capital to promote pro-poor private investment in India’s poorest states. Rather than just read out the bullet points, I will give a bit more detail, to pick up on some of the points raised, particularly by the hon. Members for East Kilbride, Strathaven and Lesmahagow (Mr McCann) and for Brent North (Barry Gardiner). It is in the interests of the poor and the UK taxpayer that resources are used sparingly and only where most needed, attracting private capital where possible, but it makes good value-for-money sense, and it is certainly good for poverty reduction, to use our resources over and over again if we can. So the answer is yes, the resources will be reapplied for India. I say “if we can,” because we must ensure that we preserve at all times the ability to apply rigour.

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

Is my hon. Friend able to say what the CDC’s role will be? The CDC is being revamped, and it seems that some of this returnable kind of capital would be appropriately delivered through that body. Is there an active dialogue between DFID and the CDC about how the private sector funding will develop in India?

Photo of Stephen O'Brien Stephen O'Brien The Parliamentary Under-Secretary of State for International Development

The right hon. Gentleman makes a very important point. In many degrees, this is a question of a stratified approach. It is really to do with the risk appetites and the profile of the funding instruments that lie behind it. I can certainly confirm that we hope that the revamped CDC will be able to take a greater interest in applying its patient capital approach, particularly to some of the infrastructure support that lies behind economic development, not least in the poorest states. But let us be absolutely clear, with the DFID instruments, we are able to put forward the funding that we do because our capital can take bigger risks in riskier places than even that of the CDC. We have to recognise that there is a connection, but not necessarily an overlap.

Photo of Barry Gardiner Barry Gardiner Labour, Brent North

I am particularly grateful to the Minister for addressing the point about the returnability of capital, because it is an important one to clear up. Will he state absolutely categorically that “returnable to the taxpayer”, which I believe is the phrase the Secretary of State used, does not mean that the capital should be returnable to the British taxpayer but that it should go back to the fund, and then, as the Minister said, be reapplied for the alleviation of poverty?

Photo of Stephen O'Brien Stephen O'Brien The Parliamentary Under-Secretary of State for International Development

I confess that, in all my briefings, I have not seen the phrase “returnable to the taxpayer” used by anybody. Let me be clear: this is returnable in relation to the repeated use of the resources for the application of their purposes in India. That is the idea. The International Development Act 2002 allows us to use returnable capital instruments, such as equity investments, guarantees and other hybrid forms—combined loans and equities—that promote development and poverty reduction.

There are entrepreneurs who improve the delivery of basic services. For instance, Irfan runs mobile clinics that provide a comprehensive range of outpatient medical services to poor people who are left out. He needs capital to buy the mobile vans and operate a professionally managed unit to provide quality service and make a profit. We can help entrepreneurs like him to do both, so that we have development and the sustainability provided by a profitable business. That is an example of a private sector programme.

The second pillar that we have agreed with the Government of India is a programme to help women and girls break the cycle of poor nutrition, poor education and early pregnancy that traps so many in India in poverty. That will focus our programme on the poorer states of India, particularly Bihar, Orissa—which has been renamed Odisha—and Madhya Pradesh.

A good example of transformation relates to some of the basic issues identified not only by the right hon. Member for Gordon, but by the hon. Member for East Kilbride, Strathaven and Lesmahagow. Mention has been made of manual scavenging—people cleaning toilets with their hands—which is not something that any of us could easily contemplate. The Department of International Development is supporting the Indian civil society organisations and there has been a series of successful local campaigns on the issue. We hope that, soon, this shameful practice will no longer exist.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I am glad that the Minister is addressing this issue. What monitoring is taking place of private sector organisations that might be in receipt of equity capital via Britain or public sector organisations, in order to ensure that there is no discrimination anywhere on the basis of caste and descent? We should support the Dalit civil rights organisation and others, as the Minister has rightly said, to lift them out of the poverty and discrimination from which so many of them suffer.

Photo of Stephen O'Brien Stephen O'Brien The Parliamentary Under-Secretary of State for International Development

I listened carefully to the hon. Gentleman’s speech. He focused in particular on the Dalit population, and the third pillar that we have agreed with the Indian Government directly addresses his point. It is a new programme of co-operation with India on global issues, such as climate change, trade and food security. Linked to that is addressing full-on social exclusion. We have agreed with the Government of India and Odisha to set up a conditional cash transfer scheme to help more than 220,000 tribal and Dalit girls who are currently in the last year of upper primary school get the opportunity of secondary education.

Our civil society programmes in India are consistent and directly target the poorest and most vulnerable people, particularly the Dalits. They also target tribal people, Muslims, women and disabled people in order to get them to organise, understand their rights and get access to services and opportunities that they have often been denied. In direct response to the International Development Committee’s recommendation, we will increase the funding available to civil society organisations to work with the poorest and most excluded people in the poorest states. That will cover 120 of the poorest districts in India. DFID’s poorest areas civil society programme—PACS—focuses explicitly on tackling social exclusion, discrimination and inequality. The hon. Gentleman rightly mentioned monitoring and evaluation, which are crucial because otherwise we would not receive any feedback. They are designed into the programmes, so we will be able to report on them as they develop and make sure that we are held to account on their performance.

Photo of Michael McCann Michael McCann Labour, East Kilbride, Strathaven and Lesmahagow

On pro-poor private investment, one of the Committee’s issues was how that would be scaled up so that half the budget could go on those types of projects. We have witnessed microfinance projects, but the scaling up of those would mean thousands, if not hundreds of thousands, of individual projects. We are most concerned about how that would be managed. Will the Minister provide more detail on whether he expects microfinance projects to be the foundation of how the money will be spent?

Photo of Stephen O'Brien Stephen O'Brien The Parliamentary Under-Secretary of State for International Development

I hope that I will have enough time to answer that question. I have a great slug of information to add on the private sector but, given the topic of the debate, I want specifically to cover the recommendations of the IDC’s report. The IDC has made a valuable contribution to the new shape of our programme in India and its recommendations encompass the points highlighted by the Opposition spokesman, Rushanara Ali.

As the Committee noted, UK aid matters in the poorest states, where there are the fewest donors and where growth has not yet made a significant impact on poverty. We are therefore focusing on those poorest states, and we will help states access India’s own resources, improve the environment for business and investment, make sure that the public get a better deal from public services, improve financial procedures and reduce corruption.

We have taken note of the Committee’s recommendation to concentrate more resources on needy sectors, and we plan to double our support—this is an important point, first raised by the Chairman of the Committee—for water and sanitation over the next four years, giving 5 million people access to better sanitation. We want to increase the amount of burden-share that others may assist us with, but let us be clear that, through community approaches, for every pound we spend on sanitation, we expect Government partners to spend approximately £20. We are piloting community-led total sanitation in Bihar and, assuming that it proves effective, will roll it out.

The Prime Minister of India recently described child malnutrition—another point raised by the Committee Chairman—as a national shame. Over the next four years, DFID aims to reach more than 3 million children through nutrition programmes, including—not least over the first 1,000 days and with the Governments of Madhya Pradesh, Bihar and Odisha—a programme on child-feeding, micronutrient supplements and diarrhoea management. Trained community health workers are very much part of that programme. Our energies are focused on delivering the results expected of our programmes. For instance, 447,000 births between 2011 and 2015 will be delivered with the help of nurses, midwives and doctors in those three states, but it is too early to finalise our plans for post-2015.

I appreciate the interest of the Committee, but let us be clear that we will not be in India in a development relationship for ever. Our aim over time is to move from an aid-based relationship to one based on shared contributions to global development issues, not least climate change.

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

Will the Minister acknowledge that, according to our discussions with the Indian Government, they themselves see the relationship changing and coming to an end? It is not just a decision for the United Kingdom Government; it will be a joint decision between the UK and the Indian Government.

Photo of Stephen O'Brien Stephen O'Brien The Parliamentary Under-Secretary of State for International Development

I appreciate that. It has to be a progressive partnership throughout. There will be some gradations of transfer. As I think the right hon. Gentleman recognises, in the past it was not appropriate to draw a line and there will be no absolute cut-off in the future.

We all know how important the private sector will be. The Secretary of State visited India recently. We believe in helping entrepreneurs who have innovative and creative ideas get access to some form of funding—above and beyond microfinance—to help them have a lasting impact on poor people. That is demonstrated by the increasing numbers of staff in our Indian office who are focused on these matters. The Secretary of State also secured the Government’s approval of a new programme promoting investment in India’s poorest states. The Samridhi partnership is the first private sector development project, and it will be delivered in partnership with the Small Industries Development Bank of India. He also supported the expansion of microfinance plus patient capital to entrepreneurs. Such projects will be developed and we will have to monitor and evaluate them, but the important thing is to make sure that they deliver the necessary profitable, sustainable businesses, as well as the pro-poor development goals that we all want to achieve.

As the Secretary of State found on his visit, we have made progress on the transformation of our programme. Our challenge now, as noted by the Committee Chairman, is to press ahead with work to achieve ambitious results. We plan to deliver for India’s poor and to work together with India to secure development outcomes on a global scale and in the context of a gradual but important process of graduation from aid to, ultimately, a truly global partnership based on trade.

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee 3:59, 26 January 2012

I thank all hon. Members who have contributed to the debate, which has been extremely positive and constructive. The Committee’s mood and the Minister’s response is that we are working in partnership with the Government and the people of India. Indeed, what we are doing, we are doing together and in full participation. The fundamental concern and objective is to ensure that the poorest of the poor people in India get the support that they need to stop being poor as fast as possible. The UK’s ability to accelerate that process will be the most positive measure and judgment of our engagement.