House of Commons - International Development

Select Committee on International Development Second Report

1 Changes to Government machinery

1. In June 2007, machinery of government changes made by the new Prime Minister saw a shift in the Government's management of trade policy, including giving the Department for International Development (DFID) a clear formal role in this policy area for the first time. In addition, a new Cabinet sub-Committee was created to oversee trade policy across Government.

2. A stated aim of the changes is to ensure greater policy coherence for development.[2] DFID defines such coherence as,

"the need to consider the implications relevant government policies have for development and the reduction of poverty. It is important to ensure that broader UK policies do not have an adverse effect on the development prospects of poor countries."[3]

We have frequently stated that international trade is a policy area with clear implications for development and this led us to inquire further into these new arrangements.

Changes to ministerial responsibilities

3. Until recently, the Government's trade portfolio was the preserve of a single Minister for Trade and Investment under the supervision of the Secretary of State for Trade and Industry. Mirroring the lines of responsibility for the trade promotion body, UK Trade and Investment (UKTI), this Minister had, since 2001, been a joint Minister between the former Department of Trade and Industry (DTI) and the Foreign and Commonwealth Office (FCO). The June 2007 changes saw the trade portfolio split into two parts: trade policy and trade promotion.

4. Trade policy is now the responsibility of one Minister, Gareth Thomas MP, who is shared between DFID and the new Department for Business, Enterprise and Regulatory Reform (BERR), the successor department to the Department for Trade and Industry, rather than being joint between the DTI and the FCO. DFID told us that the Minister leads on:

the UK's positions on EU and international trade policy and operational issues (e.g. market access, import restrictions, WTO rules and trade defence);

current trade negotiations, for example the Doha Development Round, regional trade agreements and Economic Partnership Agreements (EPAs) between the EU and African, Caribbean and Pacific (ACP) countries;

building the capacity of developing countries to utilise the benefits of trade to reduce poverty through aid for trade, capacity building, policy development and research.[4]

5. In addition to these, the Minister has further responsibilities in both departments, including: EU competitiveness, the single market and the EU services directive, consumer affairs and competition in BERR; and climate change, water and the Environmental Transformation Fund in DFID.[5] Two further Ministers were appointed to DFID roles in the same machinery of Government changes, increasing its ministerial complement to four.[6]

6. We welcome the increase in the number of DFID ministers, which reflects the new roles and responsibilities that the Department has taken on. However, we are concerned that the Trade Policy Minister's brief may be too wide, including as it does areas as varied as consumer affairs and climate change. We recommend that the Secretary of State review the alignment of ministerial resources and departmental priorities within one year of the new arrangements having taken effect.

7. A separate minister, Lord Jones of Birmingham, is now responsible for trade promotion and inward investment, including UKTI. As previously, this remains a joint post between BERR and the FCO. Appearing before the Trade and Industry Committee in July, Lord Jones said that he saw his role as promoting British business abroad and that he had plans for extensive and frequent overseas visits.[7]

MINISTERIAL TITLES

8. The new arrangements appear to have brought a degree of confusion in official use of ministerial titles. For example, while the Government's written evidence uses the title Minister for Trade Policy for Gareth Thomas, the BERR website uses Parliamentary Under Secretary of State for Trade and Consumer Affairs.[8] The Minister also recently referred to himself as the Minister for Trade and Development in correspondence with a national newspaper.[9] The Minister told us that he was "clear that my prime responsibilities are in the trade and development area" and that his "title is the Minister for Trade and Development."[10]

9. Similarly, the Government's evidence refers to Lord Jones as the Minister for Trade Promotion, and Lord Jones himself used this title in oral evidence.[11] However, the BERR, FCO and UKTI websites all refer to the Minister for Trade and Investment, while the Ministers List in Hansard uses the title Trade Promotion and Investment Minister.[12]

10. We are concerned that there is inconsistent use of ministerial titles in official materials. While some variation may be unavoidable, we believe that it is important that Ministers' titles should correctly reflect their roles and responsibilities, and that these should be used consistently across Government. This is particularly true during a period of change and transition when stakeholders and the public need to be given clarity and certainty. We therefore recommend that the Ministers review the use of their titles by their departments and resolve any confusion quickly.

Cabinet Sub-Committee on Trade

11. With two Ministers with trade responsibilities across three departments, co-ordination between them and their departments will be essential. A cross-departmental Cabinet subCommittee on trade has been established to "bring all the interests in terms of trade around the table" and to "give strategic direction and political oversight to UK trade policy".[13] We were told that the sub-Committee had met twice since its creation, with the Doha Round at the World Trade Organisation (WTO) and Economic Partnership Agreement (EPA) negotiations being discussed.[14] The sub-Committee is chaired by the Secretary of State for International Development, Rt Hon Douglas Alexander MP. In addition, its membership is the Minister for Trade and Development, the Secretary of State for Business, Enterprise and Regulatory Reform, the Secretary of State for Environment, Food and Rural Affairs, the Foreign Secretary and the Chief Secretary to the Treasury.[15] Despite the International Development Secretary's chairmanship, the Minister told us that the Secretary of State for International Development and the Secretary of State for Business, Enterprise and Regulatory Reform "are equals".[16]

12. The Government's evidence stated that the subCommittee would "oversee all the work of Government on Trade Policy and Promotion", but the sub-Committee membership as outlined in the Government's written evidence seemed to suggest that Lord Jones did not attend its meetings.[17] In his evidence to the Trade and Industry Committee in July 2007, Lord Jones appeared to exclude himself, saying the sub-Committee was "on the trade policy side, not on what I am doing."[18] We raised these concerns with Gareth Thomas, who noted that while the subCommittee was "predominantly for trade policy issues", the Trade Promotion Minister could attend its meetings and indeed had taken part in one.[19] He also said that he would welcome his counterpart's feedback on any trade policy issues raised during trade promotion visits.[20]

13. The Trades Union Congress (TUC) raised concerns about the Trade Promotion Minister's involvement in trade policy. The TUC told us that it was "unclear how much this will be a roving ambassadorial role promoting British exports and inward investment compared to how much the post will be involved in trade policy formulation", and called for the role to "be fully integrated into the development objectives of the trade agenda."[21]

14. We welcome the Minister's assurances regarding the coordination of trade policy formulation and trade promotion activities. We recommend that the Trade Promotion Minister be invited to attend all meetings of the Cabinet sub-Committee on trade to ensure that overall trade and development coherence is not undermined by divergent approaches.

15. Another concern raised by the TUC was the lack of clarity over which Minister would lead on different trade matters.[22] We were told that the sub-Committee's 'lead interlocutor' would vary according to the issue at hand. The International Development Secretary would lead on matters "where there is a very clear and very strong development dimension", including the World Trade Organisation Doha Round and EU Economic Partnership Agreements.[23] The BERR Secretary would lead on "some of the original trade agreements" and "trade defence issues".[24]

16. We are concerned that ad hoc decisions made by committee on which Minister is leading on which issues could result in a less responsive system, undermining any coherence benefits of the new arrangements. We recommend that the Government publish a comprehensive list of which Minister has lead responsibility for each individual issue or negotiation to increase transparency and minimise confusion.

Joint Trade Policy Unit

17. The Ministerial-level changes are to be supported at official level by a new single, but "dually-located", Trade Policy Unit (TPU) with "some teams based in DFID and others in BERR" and joint teams on "issues with a strong development focus.[25] Others throughout Government are to be consulted on specific issues.

18. The Government says that the TPU brings together around 70 officials working on trade and development in both BERR and DFID and that it will "bridge the two departments, tapping into the best skills, networks and resources available to promote this agenda at home, internationally and through activities in partner countries."[26] The Director of the TPU, who was formerly the UK's lead trade negotiating official, told us that he would be spending approximately one day a week in DFID's TPU office and four in the BERR office, and that,

"some people from BERR […] will be spending most of their time in DFID and a few people from DFID […] will be spending most of their time in BERR. The net effect is more people working in DFID than was previously the case and the precise working arrangements will be for the teams themselves to sort out."[27]

19. The Confederation of British Industry (CBI) was critical of the TPU's formation but said that,

"while we would question the value of merging the DFID and BERR trade teams in the first place, we are pleased to note that the new team will be headed by the senior BERR official who has had the policy lead in the former Department of Trade and Industry."[28]

20. We support the concept of a joint Trade Policy Unit as a component of improved trade and development policy coherence, and we hope that the Government can make the Unit work in practice. We recommend that the Minister for Trade Policy monitor closely the impact on coherence and effective team-work of the Head of the Trade Policy Unit spending the large majority of his working week at BERR and only one day a week at DFID.

21. In his evidence to us, Professor Winters of the University of Sussex noted a "lack of transparency over the last three months" after the changes were announced, a view shared by Traidcraft.[29] We regret that interested parties have had to wait until mid-October, more than 100 days since the changes took effect, to gain a better understanding of how the changes and new structures are likely to work in practice. We are concerned that there continues to be a lack of clarity and transparency over the mechanics of trade policy decisionmaking. We believe the Government should have been—and should in future be—more transparent and pro-active in setting out clearly the implications of such changes.

22. One example of this lack of transparency was that, prior to the evidence sessions for this inquiry, there was no mention of the TPU on the DFID website, and only a single reference on the BERR website, despite over three months having elapsed since the machinery of government changes were announced.[30] The Minister said that the TPU was "established and it is doing an awful lot of work", and assured us that this matter would be looked into.[31] We are pleased to note that the Minister has quickly ensured that the BERR and DFID websites both now feature new pages and sections on the Trade Policy Unit and its work, in response to our call for the out-dated material previously available to the public to be replaced. This matter is of particular importance given the role of departmental websites in informing the public of how Government works.

The changes in practice: ensuring improved coherence

23. Professor Winters noted that, under the previous departmental arrangements, there had been a tension between DTI's remit to promote British business and UK international development priorities.[32] The Government's evidence said that development was "at the heart of UK trade policy" and that the new arrangements would give "more joined up working and shared leadership will promote even more policy coherence", "reinforce the role of trade in our development policy and programmes" and "bring more trade expertise into our development discussions".[33] The Minister said the changes "will lead to much better coherence across Government."[34]

24. Views on whether the new arrangements would be an improvement were mixed in the evidence we received. Christian Aid suggested that the "shift in responsibility" from DTI to DFID "should mean an international development lead in all external trade negotiations and trade policies affecting developing countries […] So far this development priority has been lacking."[35] However, the CBI saw "no reason at all why these changes should shift the direction of UK trade policy and expect it not to do so."[36] Indeed, they took the view that it was "difficult to conceive how much more development-friendly the UK's trade policy could be", raising concern about the risk that the changes could be interpreted as a sign that the UK "now views development as the engine of trade policy, rather than trade the engine of development policy."[37] Traidcraft, along with the "NGO community broadly", saw the new arrangements as "a good thing".[38] Traidcraft also said that if attempts were made to lock DFID into trade policy processes "then there is a greater chance of actually bringing about this rather difficult thing of making trade and development work together."[39] Both Traidcraft and Professor Winters believed it to be too early to tell what the outcome of the changes would be.[40]

25. The Trade and Development Minister said that it was his responsibility "to make sure that a ball is not dropped between the two departments in trade policy terms".[41] Traidcraft proposed a "work plan, some kind of accountability for how this new role is going to be played."[42] One World Action suggested that a "common DFID/DBERR cross-departmental position on sustainable and equitable development and trade justice" be elaborated.[43] As regards departmental annual reporting, the Minister suggested that trade issues would be reported on by BERR (as previously by the DTI), although he also seemed to leave open the possibility of DFID also doing so.[44] DFID is required by the International Development (Reporting and Transparency) Act 2006 to report on policy coherence.

26. We broadly welcome the machinery of Government changes, though we have some reservations about the way in which these have been carried out. We believe that the development emphasis, the new lines of responsibility, and new Cabinet and official-level structures have the potential to improve trade and development policy coherence to the benefit of developing countries. We are concerned, however, that excessive complexity and new layers of bureaucracy may have the effect of undermining any improved coherence resulting from the changes. We remain unclear as to how the changes will be evaluated for their ability to deliver a more coherent trade policy and more effective 'joined up Government'. We support suggestions for a clear work plan for DFID under the new arrangements and for a publicly elaborated cross-departmental strategy for the future of UK trade policy. We hope to see far greater visibility of the new structures than has been hitherto the case. We recommend that the Government ensure that both DFID and BERR include trade in their annual departmental reporting.

2 Ev 32 [DFID] Back

3 Department for International Development, Annual Report 2007, page 192 Back

4 Ev 31 [DFID] Back

5 BERR, Ministerial responsibilities page; http://www.dti.gov.uk/about/ministerial-team/page40355.html and DFID, Ministerial responsibilities page; http://www.dfid.gov.uk/aboutdfid/organisation/DFIDdirectory-resp.asp Back

6 On 12 June 2007, the Chairman of the International Development Committee wrote to the then Chancellor, Rt Hon Gordon Brown MP, to call for an increase in the ministerial complement of the Department for International Development. Back

7 Oral evidence taken before the Trade and Industry Committee on 16 July 2007, HC 923, Q 79 [Lord Jones] Back

8 Ev 31 [DFID]; and BERR, Ministerial responsibilities page, http://www.dti.gov.uk/about/ministerial-team Back

9 [Letter] "Saving Congo's forests", The Guardian, 9 October 2007 Back

10 Qq 73 and 74 [Mr Thomas] Back

11 Ev 32 [DFID]; and oral evidence taken before the Trade and Industry Committee on 16 July 2007, HC 923, Q 71 [Lord Jones] Back

12 BERR Ministerial Team page, http://www.berr.gov.uk/about/ministerial-team/index.html; FCO Lord Jones page http://www.fco.gov.uk; UKTI Minister's Office page, https://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/aboutus; and HL Deb, 22 October 2007, page i Back

13 Q 86 [Mr Thomas]; and new Trade Policy Unit pages on BERR site: http://www.dti.gov.uk/europeandtrade/Trade%20Policy%20Unit/page41941.html Back