Examination of Witnesses (Questions 340
- 360)
TUESDAY 20 APRIL 2004
RT HON
HILARY BENN
MP AND MS
SHARON WHITE
Q340 Chairman: Can I just ask in
parenthesis where the Development Research Centre is based?
Ms White: It is based in Sussex.
Q341 Chairman: This is something
we can take up with the Permanent Secretary when he comes to give
evidence, but Judith Hart set up the Institute of Development
Studies at Sussex, which I think now receives no core funding
from DFID at all. We do have some centres of excellence like Sussex
in some of these areas, and I was hoping we would be building
on them, which is what you are clearly doing. That is very good
news. One of the things that we have learned during this inquiry
is the concept of the migration hump. I suspect few of us knew
anything about the migration hump before we started this inquiry,
but we are now a bit more informed. Essentially, I think we understand
it. The poorest people do not migrate simply because they do not
have the resources or the wherewithal even to migrate, but as
the development levels take off, so people tend to migrate. That
could have some really significant ramifications for a number
of countries. If one takes, for example, China, where there is
a lot of evidence of internal migration, a country with a large
population, we are probably going to meet the Millennium Development
Goals simply because of the impressive way in which China is expanding,
and other countries such as India, has DFID done any modelling
on what might happen in some of these countries such as China,
India and indeed parts of Africa, as they become more prosperous,
as to the numbers of people that may want to migrate as a consequence
of that, and where they are likely to want to migrate to? The
same applies to eastern Europe and other parts of the world. In
other words, to what extent has any modelling been done on future
likelihoods of large-scale migration as countries become wealthier?
Hilary Benn: As I understand it,
the concept of the migration hump is the subject of quite lively
debate, with some arguing that there is not the kind of correlation
that the migration hump theory suggests. What I would say is that
I think we recognise that migration is the consequence of a number
of factors. To answer your very specific question, I do not know
whether we are doing any modelling in relation to flows that might
result from countries getting better off, but since a lot of the
migration that we see, particularly south-south, is the consequence
of conflict or violence, obviously that creates difficulties as
far as modelling for the future is concerned because it requires
you to make an assumption about conflicts that may happen. It
would have been hard to predict that Iran and Pakistan were going
to end up with getting on for 4 million people as a result of
what happened in Afghanistan, unless you assumed that that was
going to be the case. It is difficult to make forecasts as far
as the future is concerned. I do not pretend to have a view as
to whether I think the migration hump is the right explanation
for what is going on, because there is a lot of debate and it
is an area in which this complex interrelationship of factors
in the end determines what actually happens.
Ms White: We have not done any
detailed modelling of that kind. The World Bank are thinking,
as part of their research programme, of perhaps picking some of
this up. We have a paper planned on migration and poverty links
towards the end of this year. We want to try to reflect whatever
the best forecasts are that have been done, but I think it is
an inherently problematic exercise because of the conflict situation.
Q342 Chairman: Just so we can be
clear, is the Department's line to take on the migration hump
that there is not a migration hump, there is a migration hump,
or you are still waiting for the Development Research Centre at
Sussex to tell you? If that is the case, you might have a bit
of a problem because I think we are getting into a slightly incestuous
relationship as the Special Adviser to this report also comes
from Sussex. What is the Department's line to take on migration
hump?
Ms White: Our view based on the
evidence available is that there does appear to be a hump. We
will have better information, as I say, probably following the
World Bank's studies. We are not ourselves likely to do any detailed
work on this in the next few months.
Q343 John Barrett: I would like to
return to these jumbo jets of nurses flying around from Ghana
to New York or wherever. The NHS has a code of practice to stop
the active recruitment of doctors and nurses from developing countries
which cannot afford to lose them. I just wondered whether this
has been successful. Has your Department looked at, for instance,
the knock-on effect to neighbouring countries, where country A
cannot afford to lose doctors and nurses so we have stopped recruiting
there, but there may be a flow on to a neighbouring country? Are
there loopholes in the current code of practice? Has it been successful
and how could it be improved? Or are they all flying to Leeds?
Hilary Benn: I do not think they
are all flying to Leeds. As I think I indicated earlier, we are
in the process, with the Department of Health, of trying to review
the impact of the code of practice. Clearly, it applies to direct
recruitment by the NHS and given that is what the Department of
Health has signed up to, that is what one expects to happen. Where
it clearly does not work to the same extent, as I indicated earlier,
is in the activities of private recruitment agencies. That is
something I think we need to reflect upon. Let us take perhaps
Malawi as an example of a country where the problems of capacity
are particularly acute, especially because of the impact of HIV/AIDS.
In the case of Malawi, it has lost about 100 public health workers
in each of the last two years. The UK is the most favoured destination,
and that is the result of decisions that Malawians have taken
to come to the UK, but there has also been some leakage for example
to South Africa. The governments themselves in those circumstances
are going to be most concerned to understand the process that
is taking place and what they can do about it. I must say, in
the case of Malawi, the capacity constraints, the sheer shortage
of people to do things, is so acute that collectively, together,
we need to think quite creatively about how we can just help to
keep the show on the road, given the impact that HIV/AIDS is having.
In Zambia, as far as I understand, only 50 of more than 600 physicians
trained since independence are still in Zambia's health system.
That just gives you one example of the extent of the movement.
I think the code of practice has some effect but, as I indicated
in answer to the very first question, it is very difficult to
design a system or code of practice which is in the end going
to be in a position to say to individuals, "Because you happen
to be a doctor or a nurse, and you come from this country, you
are not allowed to come here at all" because I think that
raises some genuinely difficult questions, from the developing
country point of view, but also from the individual person's point
of view, who says, "Hang on. I've trained and I want to better
my career and my professional qualifications and experience. Why
exactly is it that you want to stop me from coming to work in
your country?" I think there is a genuine tension there—I
will be very frank—and how exactly do we resolve this?
Q344 Mr Battle: One of the witnesses
that we had, the Commonwealth Deputy Secretary-General, Winston
Cox, actually made a suggestion that to compensate developing
countries for the loss of their trained, skilled personnel, it
may be worth the UK paying to train, for example, nurses in developing
countries up to UK standards and then giving them internships
for one or two years after they have done training in Britain
before they return home again. Has the Government considered the
suggestion that it pay for or contribute to the training of nurses
in developing countries, who would then complete internship in
the UK and return home, as a way of contributing to develop education
in its fullest sense?
Hilary Benn: I am, of course,
aware of the proposal. I am not convinced that it would deal with
the problem because the fundamental circumstances that give rise
to nurses having qualified then choosing to move abroad would
not necessarily be changed by the fact that a donor country was
choosing to pay for the training of yet more nurses. If the push
factors remain in place, namely, people do not want to work in
rural communities where there is a shortage of drugs or poor working
conditions or the pay is bad or they are still attracted by professional
career development in another country, training more would not
deal with the problem. Developing countries themselves have tried
mechanisms, bonding schemes, to keep people in the country having
trained them, and the experience has been, as I understand it,
not terribly successful in those circumstances. Therefore, I think
the question is what we can do, working with ministers of health
in those countries, to try and help them to address those push
factors, which would be a more productive use of time, effort,
energy and money, than the particular proposal of just training
yet more nurses, who may then disappear if you do not do the other
things.
Q345 Mr Robathan: This is an important
issue, Secretary of State. If the boot were to be on the other
foot—and indeed, of course, when I was a child we had a
lot of talk of the "brain drain" from the UK to the
USA—it is not unreasonable for a state to wish to benefit
from the education which it has paid for for its citizens. Actually,
this is a direct correlation with student fees, that students
should pay for their education after they graduate from the amount
they earn because of the education that they have received. It
seems to me that is perhaps somewhere where we could assist states
in some way, and perhaps there could be some mechanism whereby
nurses or doctors that come here, very understandably, to
benefit themselves economically—and they benefit our state
by working, for instance, in the National Health Service—and
we could assist by payments back to the Ghanaian or whatever state
for the benefits that we have received via the people that have
received the benefits.
Hilary Benn: As I understood it,
there were two separate ideas that you were trying to pursue there,
Mr Robathan. One was the idea of some kind of bonding scheme.
My understanding is that states have tried those and that they
have not been terribly successful. The second idea that you were
positing just at the end of your question was that if people come
and work here, we should make some payment back.
Q346 Mr Robathan: We should assist
those people who have come here perhaps to pay back for their
education.
Hilary Benn: If we have a rising
development aid programme in the particular country in question,
we are contributing to a range of activities in that country.
The most productive thing that we could do is to work with those
developing country governments to try and build their health services,
because if the push factors are a lack of decent working conditions,
a lack of drugs, a lack of professional development within their
own country, a lack of an opportunity to practise the skills,
and lack of pay, then through our development aid programme, working
on a sector-wide approach in health—through direct budget
support if we have that kind of relationship with the government—is
the best contribution that we can make in the long term to try
to address those factors. In the end, it seems to me, that is
going to have the best prospect of persuading people to stay,
or if they go for professional development for a period of time,
to then return, using the skills that they have gained, rather
than what might appear to be quicker fixes, which I am not sure
would work.
Q347 Chairman: Maybe we would be
slightly more credible on that if we followed the French example
of a clear commitment to 0.7% by 2012.
Hilary Benn: As you know, Mr Chairman,
the Government remains committed to the 0.7% target. We will reach
0.4% by 2005-06 and the Spending Review that is currently beginning
will determine the further progress that we are going to make.
Do we as a world need to raise more development finance for all
of these things, including developing health systems? Yes, we
do, and one of the ways we can increase the impact of the development
aid which we are giving currently, of course, is through the Chancellor's
International Finance Facility, which we are busy trying to encourage
our colleagues around the world to support, because it is a way
of raising more money now to do these and other things that the
Committee and I care about.
Q348 Chairman: If they all sign up
to the IFF, we will have to see whether collectively we can encourage
the line to take on the 0.7 to become a bit more adventurous.
Secretary of State, one of the other things we have learned in
the course of this inquiry is the UN Convention on the Protection
of Rights of all migrant workers and members of their families.
That is quite a mouthful but Anti-Slavery International in their
submission to us argue that if you are going to have migrant workers,
then obviously remittances are important, and if the UK signed
up to this Convention, remittances would be increased by improving
migrants' rights. In the Department's submission the Government
argued that it did not want to sign this particular UN Convention,
and it said "The Government has already struck the right
balance between the need for immigration control and the protection
of the interests and rights of migrant workers, who already have
the protection of the UK's existing commitments under international
law." I am not sure that it is immediately clear that there
is a trade-off or balance between the rights of migrants once
they are in the UK and immigration control, and I think it would
be helpful if you could just explain what the phrase "striking
the right balance" means in this context and how the Government
came to the decision that it had struck the right balance, or
were there other reasons for which you simply did not want to
sign the UN Convention and this was a form of words which squared
that particular circle?
Hilary Benn: I think there are
25 countries which have ratified the Convention but, as I understand
it, no EU member state is a signatory. The words that were contained
in our submission do try and describe as best we can the position
the Government has taken. We think the framework we have through
our domestic law currently is the right one. We do not think that
signing the Convention is the right thing to do. We have no plans
to do so. Its scope would be wider than the provision that we
currently make, and it is for that reason that we think we have
got the right balance currently and have no plans to sign the
Convention.
Q349 Mr Robathan: You have already
touched on this, Secretary of State, when we were talking about
assisting in providing better facilities in, for instance, health
care and professional development in health care in developing
countries. My real question is, what more can developed countries
such as the UK do to encourage the voluntary return of skilled
migrants to their home countries which have maximised the development
benefits there? Perhaps you might like to comment on aid being
used to support or initiate projects which would provide employment
opportunities for returnees. You have touched on this, but perhaps
you might like to develop that further.
Hilary Benn: Yes, undoubtedly
returning migrants bring with them the skills, the know-how, and
the resources that they have gained from their period of working
in other countries. I think the truth here is that officially
sponsored return schemes have had mixed results. That would be
the straight way of saying it. There is growing interest in schemes
which can better tap into the skills of the diaspora, and I also
think that there is a growing awareness that there is not this
permanent condition that you either live in one country or another;
there are people who live their lives in two countries. People
may have a business that they run in another country and they
tend to that from time to time but they also spend part of their
time living in another country. It is a continuum rather than
a condition that is one or the other. There are some programmes,
which we have been offering some support to. There is the MIDA
programme, which is the International Organisation for Migration's
Migration for Development in Africa, with a pilot scheme, I understand,
both in Ghana and Sierra Leone, which has some EU funding and
which we are supporting. I think you have taken some evidence
from organisations that are running similar schemes during the
course of this inquiry. One of the other things that we are seeking
to do is to work better with the diaspora community, because in
the same way that remittances have increased in attention and
profile as we have come to understand the impact that they can
have, so, speaking for the Department, I think we realise that
we could do more work with diaspora communities. In some senses
the diaspora communities are more or less better organised here
in the UK, and there is a vehicle called "Connections for
Development", which is a network of ethnic minority groups
that was launched in December of last year. We have commissioned
internally a paper to better inform the work that we feel we can
do with diaspora communities. I think this is an area of increasing
interest both to the Committee and to ourselves, and one that
I am looking forward to us pursuing.
Q350 John Barrett: I would like to
explore one or two other aspects of the Temporary Mobility schemes
and the potential win-win arrangements that can be developed.
We have found from evidence in previous sessions that it is very
difficult to know when a migrant moves as to whether this is a
cost to the leaving country, whether this is a gain to the country
that they are moving to, where they have a skill. Going back to
health workers, as has been mentioned earlier on, whether that
skill then increases in the country they migrate to, and that
country benefits from their skill or whether the money they maybe
send back in remittances is a net benefit to the country they
have left. It is complicated depending on when people move but
one aspect of this which has not really been explored is that
when people are paying tax, national insurance, in this country,
if it is their eventual plan to return to their original country,
has any work been done on the potential repayment of those contributions
they have made over here if they are not planning to stay on,
to retire, to live long-term in this country? Has the Department
looked at the longer term cost of contributions that have been
made in this country and as to whether migrants will be leaving
in the long term?
Hilary Benn: The straight answer
to the question is no, not that I am aware of.
Q351 Mr Battle: Could I ask a question
about remittances? What strikes me is it is obvious that if a
person comes from a developing country as a worker in Britain,
just on exchange rates alone, the straight rate, if they earn
£50 in Leeds, that could go a long way in Malawi. The problem
seems to me to be that the person in Leeds sending that money
back to Malawi may in some cases only get £10 back home because
£40 is taken out in transaction costs, which is a scandal.
While we are campaigning on loan sharks and the rest of it in
Leeds, it seems a scandal that remittances are not reaching the
poor in developing countries. Does the Government see any role
for itself in encouraging remittances and in helping to reduce
those transaction costs on remittances?
Hilary Benn: I think we do see
a role, yes. We organised a conference on remittances during the
course of last year, I think, and one of its purposes was to highlight
this very question of the transfer costs. I know it is an issue
on which the Committee, and Mr Davies in particular, has taken
an interest previously. I think there are a number of things that
can be done. One is to raise awareness of the issue to hope that
competition between different banks and financial institutions
will help to bring the costs down. There are some quite innovative
schemes which I know have been operated. I remember at a previous
evidence session drawing attention to an example in one country
in South America—and I cannot quite remember which one it
was—where those receiving the remittances, even though they
did not have bank accounts themselves, were given ATM cards, if
they were living in the city, so that they could access the cash
when it was sent through by their relatives. There may be things
that host countries themselves can do, such as tax breaks on remittances,
or special bond issues, which I think they have been exploring
in India. We are certainly keen to encourage every step that can
be taken to reduce those costs because it is unfair if you are
sending back that amount of money, which should have a great big
impact, and a large proportion of it is being taken by someone
who is transferring it. There are also of course the informal
schemes, the Hawala schemes, that work very effectively in enabling
these transfers to occur.
Q352 Mr Battle: I am mindful of the
fact that the Director of the UN Population Division, I think
it was, reminded us that remittances are personal financial transactions.
If you are sending money home to your family, it is your business.
On the other hand, let me propose this to you: if we were to look
at remittances as a major contributor to development, Roger Ballard,
who was in Leeds for some time as well, and is now at Manchester
University, was describing that the trickle-down effect is not
quite reaching the parts it needs to—the great Heineken
theory of economics—and it creates "islands of wealth
in a sea of poverty". Remittances to one village could enable
that village to get things that the next village cannot. What
if we were to look at remittances as if they themselves were part
of development aid and that they were regarded, for example, as
charitable donations and made tax-free at this end, never mind
at the end of the receiving country? Is that a possibility?
Hilary Benn: Long experience has
taught me when the word "tax" is mentioned to steer
well clear of proffering an opinion on the grounds this would
be treading on the territory of my esteemed colleague, the Chancellor
of the Exchequer. I shall draw his attention to the question.
Q353 Mr Robathan: Secretary of State,
leading on from that, remittances are of course very much a private
matter, and you would not expect me to think the Government should
dig its fingers in there in any way at all, but there is the problem
that very often remittances go back to building a home somewhere
in a village, and indeed, I know people that have done exactly
that; they have built a property in Ghana from the work they have
done here, and that is not just creditable and laudable but that
is what happens, but of course, it does not therefore have the
impact on poverty reduction that it might, which is your particular
focus. Really, leaving aside the charitable donation aspect, which
I think you have no chance of getting, if I might say so, what
might the UK Government do to encourage or enable the voluntary
channelling of remittances into programmes for poverty reduction,
education, health care, whatever it might be? Of course, some
migrants already do this anyway, and will build a school or whatever
it might be, but do you think there is anything the Government
or DFID could do to maximise the poverty reduction impact of remittances
within developing countries, or do you think it is beyond the
scope of government?
Hilary Benn: I think that is a
very interesting question, because you began your question by
saying these are private flows of money and it seems to me that
in the end it is for the individuals passing the money on and
those receiving it to make decisions between themselves as to
how the resources are used. Having said that, the emerging evidence
that we have about remittances shows that there are members of
the diaspora communities who contribute in order to support the
process of development maybe in the community that they came from.
It is a way of paying back for the opportunities they have now
found themselves with. I think the principal responsibility rests
with the diaspora communities here, and as they become more organised
and can better publicise schemes and projects that are available,
that is a way in which more members of that community could tap
into using the resources for development benefit. I would also
say that the sum total of all of those individual transfers to
individuals back home also has a development benefit. It is not
evened out in the way that some people might like, but the sum
total of it does have an impact. If a home is being built with
remittances that have been sent, presumably local labour is employed
and materials purchased and so on, and that has a real development
impact. So one should not underestimate the effect that all this
has as well as the more formal schemes that you were alluding
to.
Q354 Mr Battle: I am not willing
to give up on you making a stronger and more robust approach to
the Chancellor. The reason is he does it here; he lets people
give through Gift Aid for development here. What is the difference,
instead of someone building a private bungalow with it, giving
their money to building a hospital or maybe contributing to a
clinic, and that money attracting some tax relief as Gift Aid?
I cannot see why it should be a massive problem. You could actually
include it in your 0.7% target.
Hilary Benn: Since it has provoked
a lively discussion, I happily undertake—and it may come
out as a recommendation, depending on what you decide—on
an appropriate occasion to draw it to the attention of the Chancellor.
Q355 Chairman: It would be interesting
to see the conclusions that came out of the conference organised
by the Department on remittances. You said the Hawala system is
working well. Our experience when we went to, for example, Somaliland,
was that the Hawala system, the Muslim system of transferring
money, post 9/11 has actually become much more difficult. This
is a serious point. Even now, when I want to instruct solicitors
on something, I have to physically go in with my passport, to
a firm of solicitors in my own constituency with whom I have done
business for years and they know me—I am not quite sure
of the added benefit of presenting my passport, but that is a
box that has to be ticked. If you are trying to move money from
the UK to Hargeisa now, it is going to become increasingly difficult.
One gets the impression that this is an area of policy that DFID
is working up and doing more on, and one of the issues is going
to be how can one ensure that in developing countries there are
financial services, banks and other institutions, that actually
work? There is not a bank in Hargeisa. All that has tended to
happen is that in many Muslim countries there have been offshoots
from various institutions in Dubai in various places. I just wondered
what thought DFID had given to countries like Pakistan and elsewhere,
with the Muslim bankers and others, as to how the Hawala system
can work post 9/11.
Hilary Benn: Firstly, the conference
report, the background papers, and the presentations are accessible
on the internet. If it would be helpful, we can drop you a note
to tell you where they can be found.[1]
Secondly, we are planning to follow up the conference with a website
to share more information about remittances, good practice, and
action to improve the availability of data on remittance flows.
I hope that will be useful to the Committee in seeing the follow-up
work to what I know was a very important event. You are absolutely
right, Mr Chairman, that there is a balance, I suppose, for governments
to strike between on the one hand, facilitating free flow and
movement of money, and on the other hand, the requirement to deal
with potential money laundering, either for criminal or for terrorist
purposes. Could you just repeat the third question? You gave the
example of Pakistan.
Q356 Chairman: The Hawala system
operates primarily in Muslim countries and DFID obviously has
some large development programmes in countries like Pakistan and
some other Muslim countries, and I just wondered—because
this is clearly an area of policy in migration increasingly—to
what extent you could discuss with Muslim bankers and others ways
in which there could be a post-9/11 Hawala system, Muslim banking
system, because there are going to be many poor Muslim countries
which are finding remittance flows much more difficult now than
they did pre-9/11.
Hilary Benn: May I ask if you
have had evidence?
Q357 Chairman: We can physically
see it. Hargeisa, as you know, a de facto state, exists
on remittances very largely, and it is much harder now post 9/11.
Hilary Benn: The straight answer
is I do not know to what extent we have had discussions with Pakistan.
Can I reflect on this point and drop you a note[2]?
Q358 Chairman: It seemed to me, if
you are doing follow-up work, there is a whole area here of how
remittances work, particularly in Muslim states, post 9/11.
Ms White: I have two very quick
points. One, we have been discussing this, particularly immediately
after September 11, when we were involved in quite active discussions
with the Treasury as part of the new set of regulations imposing
closer restrictions. We have come out with what we think is a
better compromise than the opening position in terms of the balance
that the Secretary of State mentioned between wanting to limit
money laundering but also maintaining open access and free route
of money. We have a team within my division looking at financial
sector reform and in particular the establishment of banking systems,
especially in rural areas. What we have not yet done though is
to link those two together and to begin to have an explicit discussion
with some of the key countries, but that is something we will
take away with us and reflect on and get back to you.
Q359 John Barrett: Is there a danger
or has it been suggested that there ought to be a linking of aid
to migration management, in that, where there were problems on
the domestic agenda about immigration/migration, overseas development
aid could be used as a lever for a recipient country to comply
with what we would like to see at a domestic level?
Hilary Benn: There is not a danger,
because it would not be allowed under the International Development
Act.
Q360 Chairman: Secretary of State,
those are all the questions we want to ask, but is there anything
else in your briefing that we have not touched on?
Hilary Benn: If I may say so,
I think you have comprehensively mined my brief, but genuinely,
I have found the exchanges interesting. I meant what I said at
the beginning about this being an area in which, if I may say
so, both the Committee and myself and the Department are developing
our thinking and our understanding, which is why the inquiry is
timely. I think a lot of things will flow from the inquiry that
you have undertaken, and I hope you will have heard in the course
of our answers some of the things that we are doing to take these
issues forward, because we recognise the importance of this issue
to the work that we are all concerned with.
Chairman: I would not want our comments
about the 0.7 to in any way indicate that we do not support what
the Chancellor is doing on the IFF. To indicate that, we and the
Treasury Select Committee have agreed that we will write jointly
to every Member of Congress urging support for the IFF, because
actually, we take the view that one has got to maintain the political
momentum on this initiative to take us beyond the presidential
election. Hopefully, we can prompt Members of Congress to think
about it. We will do our bit by topping and tailing letters. Thank
you.
1 See http://www.livelihoods.org/hot_topics/migration/remittances.html Back
2
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