International Development Committee - UK Aid to Rwanda - Minutes of EvidenceHC 726

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House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

International Development SELECT Committee

UK Aid to Rwanda

Tuesday 13 November 2012

RighT Hon Justine Greening MP

Evidence heard in Public Questions 79 - 135

USE OF THE TRANSCRIPT

1. This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2. The transcript is an approved formal record of these proceedings. It will be printed in due course.

Oral Evidence

Taken before the International Development Committee

on Tuesday 13 November 2012

Members present:

Sir Malcolm Bruce (Chair)

Fiona Bruce

Richard Burden

Pauline Latham

Jeremy Lefroy

Fiona O’Donnell

Mark Pritchard

Chris White

________________

Examination of Witness

Witness: Right Hon Justine Greening MP, Secretary of State for International Development, gave evidence.

Q79 Chair: Good morning, Secretary of State, and welcome to what is your first appearance formally in front of the Committee, although we have met informally. Thank you very much for agreeing to come to give us evidence in our short inquiry on the suspension of budget support to Rwanda. I wondered if we could ask you briefly about the announcement you made last week about India. I think we are seeing you next week, so we could explore it a little more fully then, but it would help the Committee if you could give us a little bit of context. While you think about that, the Committee obviously did our own Report on aid to India earlier in the Parliament. We concluded that aid was effective, but we also recognised that by 2015 the relationship should change, without determining how it should change. We would be interested to know what you have concluded and what the practical implications are, both between now and 2015 and thereafter? Obviously this is not the main point of our being here, but it seemed appropriate, given the timing.

Justine Greening: Thank you. Given that it is my first formal appearance at the Committee, I wanted to say that I am obviously delighted to have this job, and as part of it I am very much looking forward to working with the Committee. I know it is a very active Committee, and having looked at the Reports that have been produced by the Committee in recent months and years, it rightly plays a very constructive role in working with the Department. I can assure the Committee that I will pay very close attention to the work you will do, and the conclusions that you reach.

In relation to aid to India, I think the Committee is absolutely right to look into this matter. It is certainly one that has been questioned by the British public. The outcome that we reached was a process that began under my predecessor. He had initiated discussions with the Indian Government, but it was finished, obviously, by me when I came into this role. Where we got to was that we, alongside the Indian Government, want to see a transition of our role on to one that is essentially based around technical skills and helping the Indian Government to grow its economy so that we can create more jobs in the private sector. It very much reflects the fact that India itself has evolved dramatically and is successfully developing; our development programme needs to match that change.

Between now and 2015, we will therefore not sign off, as of now, any new financial aid grants. However, for any programmes that are already running or had already been approved, we will absolutely honour those commitments to the Indian Government. Those programmes will continue as planned. Essentially we will see a gradual runoff of those programmes and a gradual shift of this relationship towards one that is predominantly based on technical assistance and skill sharing.

If I had to put it in a nutshell, the issue is this: we have an aid budget for India that currently stands at £280 million. In 2011, the Indian Government themselves spent £40 billion on health and education. What they really want assistance on is the value added that the UK Government can bring in helping them to get the most out of their budget, and that is essentially the relationship to which we will be transitioning. We have done some excellent work with India in the past. We very much value our relationship with that Government, and we will continue that relationship. It will simply take a different form.

Q80 Chair: So will we continue to have a DFID office in India post2015?

Justine Greening: We will have a DFID office that is essentially colocated with the Foreign Office, and I think that very much reflects the fact that the kind of technical assistance we will be giving the Indian Government-and indeed at the state level, too-will increasingly see British experts from both the Foreign Office and DFID working together in one team.

Q81 Chair: Secondly, would some of the money used for technical assistance support, or however it is described, be classed as Official Development Assistance?

Justine Greening: Where appropriate, yes. We think that just under £30 million of technical assistance will be spent in around 2015 and onwards. The remainder of the financial relationship with India, as it were, will be in the form of socalled "returnable capital". This will be seed investment, which sees us working with venture capital and investment funds in order to try to drive private sector growth in some of the poorest parts of India, where the communities can really benefit from that.

Q82 Chair: Where we are operating in India, it is in the poorest states. The point is often made that if those poorer states were sovereign countries, they would be some of the poorest in the world. They have tens of millions of people. Some of us have been to Bihar and some to Madhya Pradesh. Would not those state governments feel somewhat abandoned if we do not continue the programme post2015, given the challenges they face?

Justine Greening: I did have the chance to go to Bihar, which as you point out is a state of over 100 million people. There is some incredibly effective work being done there on the ground, not just through national programmes but also through state programmes, some of which has had technical assistance from DFID. I had a chance last week to meet a range of state and national key politicians, and the overwhelming message that we got from both state level and national level is that they want our advice and our support. They have their budget. We understand that there are clearly issues around transitioning relationships from more of a money and aid base to a technical assistance and trade base.

However, the outcome we reached has been reached with the Indian Government, and I think we are all happy that this is the right time to make that transition, and that we are doing it over the right time period. Also, as you point out, these are large states, but India itself is a democracy. They have their elections and, as a country, they make decisions on their priorities.

Q83 Richard Burden: Welcome to the Committee. When we produced our Report, I remember there was a lot of press comment on it. I cannot remember the exact quotes, but some newspapers ran with headlines saying, "Committee says, ‘End Aid to India’", and other papers ran with headlines saying, "Committee Defends Aid to India". Essentially what we were saying was that the nature of the relationship with India was changing. There are still huge needs there. It will transition up to and beyond 2015, but we did not think that those people who were saying at that time, "Just chop it," made a lot of sense. You need to transition, and you need to be fairly pragmatic about how you do that-where you employ grants, where you employ loans, where you employ a technical relationship. It is about what works.

Again, very broadly, that appeared at that stage to be the path the Government was taking. There was a lot of press comment on your announcement last week, and I am interested to know whether you were saying that it is the next stage of that same strategy but actually there is no particular change in what is going on, or whether you were saying there was a change. I would rather know that from you than from the newspapers.

Justine Greening: It was the end of a process that had been started by my predecessor. In the same way that we are about to go on and talk about Rwanda, whenever there is a changeover of a person in a role, there are some decisions that the predecessor takes and some decisions that the successor gets to take. As it turns out, I was the person in the role for the end of the process that my predecessor began, so it is difficult to say whether we have ended up in a different place from where he would have ended up. I think it is broadly the right place. I think it does reflect exactly your point, which is that we needed to have a very thoughtful and structured approach to how you transition from where we are today, which is perhaps more aidbased, to where we want to be, which is more technical assistance and tradebased. I think that is better for India and what the Indian Government wants.

I think it is right to be able to say that, as of now, we will not be signing off any new financial aid grants to India, and, as the Committee knows, I am very keen to make sure that we get the very most out of this budget in terms of its development impact. Therefore, I think it is important that as countries successfully develop, and indeed as issues and themes that we are concerned about in relation to poverty are gradually tackled-such as the Millennium Development Goals-that we use them as a catalyst to keep challenging ourselves to get the most out of what is a substantial budget.

Chair: I will only allow two more questions, because I think we can return to this next week. We need to go on to discuss Rwanda.

Q84 Fiona O’Donnell: Secretary of State, this is the first opportunity I have had to welcome you to your new role. You talked about the development of the private sector in India, and you may have seen our Report on tax in developing countries. I do not expect a full answer to this, because I would like to talk to you about it next week, but I wondered whether you thought that companies listed on the London Stock Exchange that operate in India declaring what taxes they are paying in that country would be helpful to the Indian economy and this gradual process of aid being withdrawn.

Justine Greening: DFID’s involvement in countries to help them build up a sustainable tax base is one of the areas where I am keen to see whether we can do more work. To take another example, look at Afghanistan: the work that has been done with the Afghanistan Government to increase the tax base has been incredibly effective. I think it has gone up from something like $200 million in 2004 to $2 billion now. If you look at the Indian papers, they are having a debate about what is a fair share of tax that ought to be paid by wealthy people in industry and by companies. In many respects one of the things that struck me going to India is that, as ever, people are people the world over. Wherever they are in the world, they want to see tax being paid fairly. I am sure we can talk about this in more detail when I come back to the Committee. It is absolutely fundamental, and DFID has been engaged in what I think have been very worthwhile projects in giving advice, particularly to state governments in India, on how they can broaden their tax base. It is one of the ways in which we can continue to provide very beneficial help.

Q85 Mark Pritchard: Secretary of State, you mentioned a structured transition. In your discussions with the Indian Government, what assurances did you seek, and what assurances did you obtain, with regard to the Indian Government ensuring that they have their own transition plans, so that they backfilled their own aid and support for those communities that will be directly affected by our decision?

Justine Greening: We have talked it through with them. Obviously they understand what programmes are currently ongoing and those that have been signed off and will happen, and they can then match that against what is a sizeable and growing investment that they make themselves. As I said, in health and education alone, in 2011 they spent £40 billion. I think the other role for DFID, increasingly, is to focus on technical assistance and to use our influence to ensure, where we can, that budget has the biggest impact in terms of poverty reduction. As you point out, our role will change over time, and I think we are keen to continue to work with the Indian Government.

I met the Cabinet Minister responsible for rural development, Minister Ramesh, last week. He is very clear about how he sees his role and how committed he is to making sure he can continue to lift Indians out of poverty. I think it is worth pointing out that in recent years we have seen 50 million Indians lifted out of extreme poverty. Clearly there are a significant number of people in India who still live in extreme poverty, but it is a country that is moving in the right direction, and Britain wants to continue being a partner with India to help lift more and more people out of poverty. The difference in the future is that, rather than using our budget, we will be helping the Indians get the most out of their budget to do that.

Q86 Chair: Thank you very much, Secretary of State. I think we will want to return to this, because it is a significant change, perhaps, in the relationship we will have with development, particularly in middleincome countries, in the future. Those members of the Committee who have not asked questions today may want to come back to it next week. Thank you for that. Perhaps we could now move to the evidence on Rwanda. As you know, we had Andrew Mitchell here last week, who explained how he took the decision, and the circumstances in which he took it.

Obviously we want to discuss with you what happens next, and what the process is likely to be. On the memorandum of understanding, there are four partnership principles. For the record I should just say that they are: poverty reduction and the MDGs; respecting human rights and other international obligations; improving public financial management, promoting good governance and transparency, and fighting corruption; and strengthening domestic accountability. That is mutually agreed. In relation to those, what progress do you think Rwanda has made since the decision to resume budget support in September was announced? There are four principles there, and I think the question that arises is, "Is it really committed to all four of them?"

Justine Greening: That is a question we are in the process of establishing the answer to. When Andrew Mitchell, my predecessor, was here last week, he gave his perspective on the partnership principles. It is probably too early, Mr Chairman, for me to conclude on where I feel Rwanda has and has not made progress on the partnership principles in the last month. Clearly there is a lot of debate and evidencegathering happening at the UN level but also at donor country level. What I would say, though, is that the partnership principles are very important. I think they matter. They are very clearly set out in the memorandum of understanding. The challenge for me will be to look at progress but also, where there is less progress or indeed no progress, whether I believe that is something that is temporary in nature and therefore is not necessarily fundamental, or whether I believe it is more permanent in nature, in which case it may be something that I want to consider more carefully before we make any decisions on future general budget support. Obviously it sits alongside a range of other pieces of evidence that I will look at.

Q87 Chair: Can I just clarify the decision you will be making? Under the current agreement, there is another tranche of budget support due to be paid in December. Are you deciding whether to withhold it or whether to apply it differently?

Justine Greening: I guess it is both of those things.

Q88 Chair: You could withhold it, or you could spend it differently?

Justine Greening: There is a range of options, from the ultimate option, which is to withhold it entirely, to maybe concluding that I want further evidence before I am happy to disburse anything further.

Q89 Chair: You could delay it, yes.

Justine Greening: That is possible, if I feel that I have not reached the end of a satisfactory process in the level of detail I believe I need to be able to make a decision. As I think my predecessor concluded when you met him, alternatively there are other ways in which we could end up with a more refined decision on providing support but perhaps in a different form from what had originally been intended. One thing is clear: I will be prepared to look across the piece at what my options are, and I will very carefully reflect on progress against partnership principles.

Q90 Chair: Thank you for that. Andrew Mitchell also gave us his letter to the Prime Minister, which I think is now published or available to be published. He set three separate conditions in that letter, which were partially met. That was his basis for signing off the £16 million in two different tranches. Where do they fit in? Are you still using those tests agreed between Andrew Mitchell and the Prime Minister as part of the determinant?

The first condition was that the Rwandan Government engage constructively in the peace talks, and presumably that they continue to do so would be the condition that Andrew Mitchell said had been met. The second was that there be a continuing ceasefire in the Kivus, and that practical support to the M23 end. There was some debate about what the evidence was for that. The third was that there be public condemnation by Rwanda of the M23 group, and there had been none. In other words, are you seeking evidence, either directly or through the UN process, as to whether or not Rwanda has withdrawn any practical support for the M23, and are you still asking them publicly to condemn the M23?

Justine Greening: I think, as far as I am concerned, those conditions are still relevant, and therefore I will want to look at whether they have been met.

Q91 Fiona O’Donnell: I have a quick question, Secretary of State. Can I ask when and how the Prime Minister set out these three conditions?

Justine Greening: Maybe that would have been a question better directed to Andrew Mitchell, but I believe it was part and parcel of the British Government discussions around how best to take a decision on financial support for Rwanda at the time that my predecessor was initially looking at this. I think that was absolutely a sensible approach. The overriding issue for me is action, and what action is happening on the ground.

Q92 Fiona O’Donnell: That probably was not fair of me, but would it be possible to write to the Committee just to confirm where and how the Prime Minister set those out?

Justine Greening: I am sure we can provide details of at what stage those principles were assessed.

Chair: For the record, it says in Andrew Mitchell’s letter to the Prime Minister on 31 August, "You recently set three conditions," so we are looking for the context of where that happened, whether it was in a Cabinet discussion, or a Sub-Committee, whenever it was.

Mark Pritchard: Chairman, just on that point, I thought in the last Committee meeting we saw a letter from the Prime Minister, which set out the three conditions.

Chair: There is a letter to him.

Q93 Mark Pritchard: Yes, but it was in response to a conversation with the Prime Minister, obviously. Secretary of State, on M23, where do you think we are today? You have obviously mugged up and read all your briefings. Your predecessor took a view, and you have obviously taken soundings from the ground-from various Government agencies, nonGovernment agencies, and other external agencies. You perhaps have more information than anybody else in this room, and certainly your predecessor. How would you judge the activities of the M23 today?

Justine Greening: Clearly at the moment there seems to be a continued lull in the fighting, which is very welcome, but I think there is no doubt the lull is possibly temporary. It seems to be an ongoing situation that remains very fragile. The M23 is essentially the result of a mutiny that happened earlier this year. When you look at some of the reports of what has happened in relation to the M23-child soldiers, sexual violence against women-it is incredibly disturbing. That is why it formed a clear part of the Prime Minister’s conditions that we set as part of our general budget support assessment. I think that is absolutely right. Obviously, in terms of M23, we will also have to wait and see the conclusion of the UN Group of Experts’ final report, and the whole process of the UN Sanctions Committee and the UN Security Council.

Q94 Mark Pritchard: You mentioned a lull. As you have set out, the Prime Minister has set those three conditions for the resumption of budget support. Turning it around, what progress do you think the Rwandan Government is making itself, either proactively or just as a matter of fact as it is the Government?

Justine Greening: It has been involved in the Ugandanled discussions. Ultimately it will need to be a DRCled solution to this conflict. Rwanda has been part of those regional peace talks, but in terms of what we are discussing today, I recognise that things can change. I will be looking at the situation as we get to December to say what is happening then. I have talked about this issue of assessing whether something is temporary or permanent, and I will want to see an ongoing engagement of Rwanda in those regional peace talks. That is an incredibly important part of reaching any sustainable solution.

Q95 Mark Pritchard: Indeed. Finally, a lot of the focus, for a variety of reasons, has been on President Kagame. I wonder what your view is on President Kabila, and whether he has a proactive role to play in all of this.

Justine Greening: All regional leaders have an important role to play, but ultimately, as in any military conflict, it will be diplomacy and talks around a table that reach a conclusion. That is why it is important we make sure we see groups like the M23 cease their military activities.

Q96 Fiona O’Donnell: I just wondered what discussions you had had with the Foreign and Commonwealth Office, given that last month one of the Ministers of State called on the Rwandan Government to stop all support. They clearly believe it has been ongoing.

Justine Greening: I have had discussions with the Foreign Secretary. As I am sure you can imagine, our officials have ongoing discussions with both the Foreign Office and, of course, Number 10, and a range of other stakeholders, whether it is multilateral organisations or other donor countries. We will all get a sense of our different perspectives on what is happening on the ground and share that knowledge wherever we can.

Q97 Richard Burden: I would like to ask you a little bit about the baseline from which you will measure what progress is being made. Have you reached any conclusions about whether the Government of Rwanda has been funding and providing practical support to M23 this year at all?

Justine Greening: The short answer to that is, in terms of the situation on the ground at the moment, we are at a stage in our process where we are gathering evidence. We will have the evidence from the UN Group of Experts’ report. I am aware of the evidence that suggests there has been external involvement regarding the M23. I cannot conclude on that at the moment, because we continue to look at what evidence there is. Clearly, however, it has been concerning.

Q98 Richard Burden: We can come on to what they are doing now and what they may do in the future, but in terms of what has happened so far, have you reached any conclusion about whether they have been, or do you see the allegation that there has been practical support provided by Rwanda to the M23 as unsubstantiated?

Justine Greening: That is what we are looking into right now. Clearly there was a piece of work done by the Group of Experts in order to inform a UN view of this, and we as a Government will look at that final report when it is published, and look at what the UN’s assessment of it is, and indeed the implications in terms of any sanctions. That will be one of the pieces of evidence that we consider as I reach my conclusions. I do not think it would be right of me now to conclude on an overall question like that when I have not finished going through the process of gathering all the evidence. I am not trying at all to avoid answering your question, but I recognise that this is an incredibly serious question you have asked, and it would not be right of me to conclude on answering it until I have gone through the whole process and satisfied myself that I can give you a fulsome response based on all the evidence I think I should have.

We can talk about this perhaps later in the evidence session, but the other key part of this is the impact of any UK Government decision in relation to budget support on poverty reduction. Of course we can have a discussion about what is a deeply concerning question on a regional issue, and indeed an involvement in a military conflict within the Democratic Republic of Congo, but ultimately what I am seeking to do is take a sensible decision on what the appropriate involvement of our UK development budget can be to lift people in Rwanda out of poverty. I will look at things through that lens as well.

Q99 Richard Burden: Last week, when your predecessor gave evidence to us, he said that he had seen reports that had led him to conclude that the resumption of budget support, on the terms that he decided, was justified. Have you asked about and have you yet seen all the reports that your predecessor saw and based his decision on?

Justine Greening: I have been fully briefed on the process and the evidence base that my predecessor used to reach his decision. Obviously it is also fair to say, after the event, that what I did not have were those conversations that my predecessor had with particular stakeholders. I can be briefed on the black and white content of what they concluded. I am aware of the nuts and bolts of the processes that have been gone through to date. My job, obviously, is to make sure that I have a similarly robust process going forward to reach a conclusion.

Q100 Richard Burden: Annexe 8 of the revised memorandum of understanding lists indicative sources for informing partnership principle reviews. It is a list of bodies and organisations, and things like that, that both Governments will look at when working out whether the partnership principles have been followed. Are those organisations a pretty good description of the sources that, from what you have seen so far, you will be looking to, or your predecessor has looked to, in order to make decisions about the appropriateness or nonappropriateness of the resumption of budget support?

Justine Greening: I think it is part of the fact base. In addition to this, we need to take account of other processes that will produce further evidence, not least the UN Group of Experts’ report and the UN process to conclude on a) what that report says, and b) what the implications of it are. However, I will myself no doubt want to have my officials and make my own calls and have meetings with other donor stakeholders. Also my plan is that I will have a more structured engagement with human rights organisations, so that I can understand what their views are about this situation, and indeed more broadly in relation to DFID programmes. I will aim to be more formally part of the human rights assessment process that the FCO has set up, which I think is a very good one, and involves a twiceyearly meeting of the key human rights organisations. I will also seek, in a more structured way, to have those organisations brief me on key issues-for example this issue-when I am forming a decision, because I think it is important that I hear from relevant partners.

Q101 Pauline Latham: How credible do you think the interim UN report is, which alleges the involvement of the Governments of Rwanda and Uganda in arming and training the M23 rebels and any other armed groups?

Justine Greening: Clearly any reports of that sort of external involvement are deeply concerning. We are closely monitoring what we think is happening on the ground ourselves. As the Committee knows, there was a meeting of the UN Sanctions Committee last night, I think, in New York. It is not clear what the outcome of that meeting is, and whether there will need to be further meetings, or what their recommendations will ultimately be over the next few weeks to the UN Security Council. Clearly, we take all those reports extremely seriously, and we will be keen to see the outcome of that UN assessment.

Q102 Pauline Latham: That will affect where you go from here, presumably.

Justine Greening: It will obviously be an important part of my consideration, alongside our own criteria and the partnership principles that we have set out ourselves as a Government in terms of being clear about the kind of collaborative relationship we want and expect to have with the Rwandan Government. Obviously it is a Government that has been very successful in tackling what have been very difficult development issues in Rwanda. Therefore, we are keen to ensure we build on that huge progress that has been made, but clearly we also have some principles on which we want that development relationship to be based.

Q103 Pauline Latham: I should have prefaced that by declaring an interest: the fact that I have been four times on Project Umubano, as I mentioned last week, which in my view has been successful in helping the poorest people in the area. I would just like to put that on the record. Have you found any other reports like the UN report that you would consider credible?

Justine Greening: We are always keen to look at any information from sources we can rely on that gives us more detail about what is happening on the ground. I do not think it would be sensible of me to go into any details with the Committee on what form those reports have taken. Suffice it to say, there are a number of donor countries involved, working alongside us and indeed with the Rwandan Government. There is obviously this Group of Experts, and I think we are all keen to share our own views and information that we have on what is happening on the ground.

I should also point out that I did Project Umubano in 2008 and spent two weeks training teachers to teach English, and I felt it was an extremely worthwhile project.

Q104 Pauline Latham: Yes. I have done that one three times. In terms of recent evidence, I do not know if you saw The Sunday Times at the weekend, but you talked about working with Governments. Do you feel it is right that you should work with a President who allegedly spent £10,000 a night on a room in New York? When we are trying to make cutbacks here on our Government expenditure, that seems to me rather excessive.

Justine Greening: I think our relationship, in terms of the development partnership work that we have done with the Rwandan Government, has been very successful in its results. We have been very explicit about what we think those results need to be, and what we can achieve. We believe that there are clear accountability and audit trails in place, so that when we work through the Rwandan Government budget support systems, if you like, we are confident that money is getting to the right people on the ground.

Obviously in Rwanda, as a democracy, that question is probably one as much for the electorate of Rwanda as anyone else, in terms of what they think is appropriate for their President, but of course different countries may take different views on what they think is appropriate. As I know from being a Minister, some Ministers have no ministerial cars. In some countries, some Ministers have cavalcades. I myself have a Prius. It is all relative.

Q105 Jeremy Lefroy: Two questions: the interim UN report also alleges involvement from Uganda. Will you be taking the same critical look at the situation with Uganda as with Rwanda?

Justine Greening: As you know, I have already suspended our budget to the Office of the Prime Minister in Uganda because of our concerns, and there is a forensic audit that has been instructed and is already under way from DFID. Also, I think the AuditorGeneral in Uganda himself is carrying out work to understand exactly what has happened, and therefore we will continue to look at that situation, as to whether there is any further action that is appropriate to take.

Q106 Jeremy Lefroy: We have received evidence from a Dr Phil Clarke, who questions the accuracy of the Group of Experts’ research. I wondered if you had any views on the methodology of obtaining the information in particular.

Justine Greening: We will look carefully at some of the points that have been made about the way in which that work was carried out. It is important to understand how much weight you can place on any report you look at. Nevertheless, there is no doubt that the Group of Experts’ report, when it comes out in its final form, will be an important document to which we will want to pay very close attention.

Q107 Jeremy Lefroy: I should also declare that I have worked with Umubano three times, as I said last Thursday. On the timing of this, when is the final report due from the UN, and will it be made public, as far as you are aware?

Justine Greening: My understanding is that the UN Sanctions Committee had their meeting last night to look at the Group of Experts’ report. It is not clear whether they will think that one meeting is sufficient in order to be able to make recommendations to the Security Council, or whether they will feel they need one or indeed further meetings to reach a series of recommendations. However, my understanding is that we would expect those recommendations to come in the next month. I do not believe we are talking about many weeks. It is an important part of the process that I am going through.

Q108 Fiona O’Donnell: You have already really answered the first part of my question, Secretary of State, in that you have confirmed that when you come to make the decision about the tranche of budget support in December, the UN report will form an important part of that. Your baseline, where you are starting from, is an important part of that decisionmaking process. In his letter to the Prime Minister, your predecessor said that "reports show that practical support to the M23 has now ended", which therefore implies it had started at some point. Also, in a Westminster Hall debate, the Minister of State at the Foreign and Commonwealth Office has called upon the Rwandan Government to cease supporting M23. That is clearly the view of the FCO. Is it also your view that there has been support from the Rwandan Government for M23 in the past?

Justine Greening: I think Andrew Mitchell’s letter sets it out-that it was his assessment that support had ended, and, as you say, by implication that suggests that there had been support there in the first place. I know you have asked me about my baseline, and I think that is important, but the most important thing for me is where I finish up on my assessment of what is happening in relation to the M23 and the other partnership principles and criteria that we are looking at. I think it is a key plank of how I will take the decision.

Q109 Fiona O’Donnell: Do you agree with Mr Mitchell? That was the substance of the question.

Justine Greening: I will not disagree with Andrew Mitchell. I think it is very difficult for me to agree or disagree with him. I read through the transcript of the evidence he gave to the Committee. I think he was very clearcut about the basis on which he had taken his decisions. I think he had clearly been through a very robust process. I think that was absolutely the right thing to do, and I do not think it is appropriate for me to secondguess whether he got it right or wrong. Ultimately, my job is to take over from now and make sure the process going forward is one that I am happy with.

However, I believe he did a full and sound and proper job in his role, in taking what I think was a very, very difficult decision, and that is symptomatic of why getting the development agenda to change people’s lives on the ground is often complicated and needs to be handled with real care. It does not always have black and white situations, and it does present decisionmakers, as he was at that time, with difficult decisions to make. I believe he approached it in a completely responsible way.

Q110 Fiona O’Donnell: It would not have been just Mr Mitchell who would have got it wrong; it would have been the Prime Minister and the FCO. However, you rightly mentioned that we should not lose sight of the fact that there are people living in poverty in Rwanda, and the impact that will have on your decision. But there are also hundreds of thousands of people in the DRC who I hope are part of your decisionmaking process, who have been displaced as a result of the conflict. Do you have any plans to visit the DRC to see the situation on the ground before you make your decision?

Justine Greening: We are just looking at what my travel plans will be for 2013. I hope I will get a chance to go to that part of Africa. I have had the chance already to visit one part of East Africa. Having said that, there are a lot of country programmes next year that I want to manage to get to see. There are lots of places where I think it is important for me to see for myself the work we are doing. I hope that I will get a chance to go to the DRC, but we need to see how I can fit that in to my travel arrangements while also, of course, being here in the UK an appropriate amount of time as well.

Q111 Chair: I think to back that up, Secretary of State, the spillover of eastern DRC into Rwanda, Burundi and Uganda is such that the Committee would take the view that you really, really should go.

Justine Greening: You are right to point out that this is a regional matter we are discussing. As I said, I have no doubt we will try to find the time to make sure that I have the chance to travel to that part of Africa.

Q112 Fiona O’Donnell: Finally, Secretary of State, can I ask what conversations you have had with other donor countries, and with President Kagame, to help you to come to a decision in December?

Justine Greening: A lot of the conversations at the moment have happened at official level, although I was in Luxembourg, and I think increasingly Development Ministers themselves, when they have the chance to see each other, are taking the opportunity to discuss this situation. I believe that once we are at a stage in the process where we have far more of the evidence base gathered and assessed, those conversations will become incredibly important. They will help me to understand what other donors’ impressions are of the situation, and essentially compare, contrast and understand them in relation to the UK Government’s view.

Q113 Fiona O’Donnell: Have you spoken to President Kagame since taking-?

Justine Greening: I have not spoken to President Kagame.

Q114 Fiona Bruce: May I also declare that I have been on Project Umubano. Secretary of State, in September your predecessor, when he restored the budget support for Rwanda, divided it into £8 million for general budget support and then £8 million for sector support for education and agriculture. I wonder if you could tell us how you have reviewed the impact of that decision, particularly on what you have called the priority: lifting people out of poverty in Rwanda. I understand you are part-way through a process; we appreciate that.

Justine Greening: Obviously DFID in Rwanda have worked on the basis of the reprogrammed amounts, and hopefully we will continue to deliver the maximum that we can but through different channels from the ones we had originally planned at the beginning of the year. I do not think there is a dramatic change as a result of that. I am happy to write to the Committee with more information if we can provide it.

Q115 Fiona Bruce: I think that would be of interest. We are also interested to know, for example, your thinking looking forward to the next tranche, and how you are considering the impact on lifting people out of poverty of any decision to disburse funds differently.

Justine Greening: I think it is twofold. One is whether general budget support is appropriate. A lot of the questions have so far focused on that backdrop of whether that is appropriate. If you then get over that hurdle and say, "It can be," then the next question is, "In what form? Is it general budget support or more sector budget support, for example?" The question is, as ever, "Which is the best mechanism for achieving the results we want on the ground? What is the most appropriate mechanism?" I will go through that process alongside this evidencegathering process that we are engaged in at the moment.

Q116 Fiona Bruce: I think your predecessor said to us in his evidence last time that you follow the money, even in general budget support. I would be interested to know how that process works.

Justine Greening: I think he was very clear that generally, in any instance where we provide general budget support, we will want to see some strong fiduciary arrangements in place-in fact, that is one of our partnership principles-so that we can track the money.

Q117 Fiona Bruce: If you withhold, say, general budget support in the next tranche, will you at least be considering disbursing the same amount to Rwanda, if through different delivery channels?

Justine Greening: All of those options are on the table to me. I will take a pragmatic look at what I think is the right thing to do in terms of making sure our partnership principles have been reviewed and all the criteria of understanding what is happening and the assessment of what is happening in relation to the DRC, but of course then understanding what the best thing to do is in terms of reducing poverty. They are sequential decisions, but absolutely we will look at what we think the best mix of investment is.

Q118 Fiona Bruce: Within this process that you are going through now, how much have you talked to other donors about funding they have withheld and withdrawn? Do you have any further information to what we have already had on the kinds of amounts we are speaking of, in terms of withheld or withdrawn funding from other donors since July?

Justine Greening: Having looked at the briefing you had from Andrew Mitchell last week, there is no further information. I think it is very transparent who has taken what decisions in which countries. I asked officials for an update about whether we had any further news, as it were. There is no further news at the moment. I think all countries, similar to the UK in many respects, and indeed organisations like the World Bank, are looking at what the UN process comes out with, and no doubt they will take decisions that in part reflect that process. Of course, they will also have their own broader decision-making process to go through.

Q119 Fiona Bruce: A last question on the timing: how long do you think this process will take before you reach a conclusion?

Justine Greening: We have always said that our next decision point comes in December, and I would hold to that. I think at the same time, though, as I flagged up to the Committee earlier, I am determined to make sure I get this decision right. Therefore, if I feel I do not have the right amount of fact base and that actually with a bit more time I can get those facts that give me the information I want to be able to take a decision, I will do that. However, my intention would be to try to reach a decision in December, as planned.

Q120 Chair: Is there a working date? "No decision" is a decision because it is a decision to delay, isn’t it? Do you have a date whereby you need to tell the Government of Rwanda that either you are delaying, implementing, or changing the basis of it?

Justine Greening: If we are going to get funding by the end of year-and obviously the MoU talks about calendar years in terms of what we are committed to-you would probably have to take a decision by sometime in midDecember or so. I do not believe there is ultimately a hard and fast date.

Q121 Chair: Thank you for that. The trigger for suspending the budget support was the allegation or accusation that Rwanda was interfering in the DRC and supporting M23. That was what prompted it. However, on the back of that, a lot more issues have come out about human rights abuses within Rwanda, and indeed the nature of the current regime. As you rightly say, it is a very complicated situation. When you are in Rwanda, they will tell you that there are elements in the DRC who are seeking to overthrow the Rwandan Government. When you are in the DRC, they say that these Rwandans are destabilising the DRC and causing trouble. It is a very fluid border, and there is the same mix of people on both side, etc.

Do you accept that the dilemma in Rwanda is that it is absolutely fantastic at delivering poverty reduction with the development assistance given to it-probably the best in the world, as Andrew Mitchell said-but there are serious questions about the lack of pluralism, lack of freedom, abuse of human rights, and even accusations of torture? To what extent is this situation that we are now in an opportunity, and indeed a condition, to open up discussions with the Rwandan Government about how they might start to give the regime more political space, or give Rwanda itself more political space, and indeed to respect human rights more fundamentally?

Justine Greening: Human rights are one of the partnership principles for a reason, because they are incredibly important. Therefore, to the extent that significant progress can be made by Rwanda and the Rwandan Government on human rights, we will always want to push to make sure that partnership principle is adhered to. I think you are right that there is an opportunity to have that debate and that discussion. It certainly is one that, in my role, I want to be able to play a part in helping to move it forward. It is why, as I said, my plan is to have a more structured approach within DFID, and working with the Foreign Office, to assessing human rights, but critically also to getting the views of key human rights organisations as to what they think is happening in particular parts of the world where we have particular concerns, and where those concerns are relevant to our decisions on funding.

Q122 Chair: Do you have any plans to meet President Kagame yourself?

Justine Greening: Not at the moment, but this is an important decision and I have no doubt that whatever the outcome of this process, and whatever my ultimate decision, we will want to have those discussions with the Rwandan Government. I am sure that at some point I will have those discussions face to face.

Q123 Richard Burden: You have not yet reached a decision; you have said that the range of options before you in December will range from suspension of budget support right the way through to starting it up again full whack, and all options in between. Given the fact that everybody wants to keep the focus on poverty reduction and helping poor people in Rwanda, is the Department preparing contingency plans to ensure that the poor of Rwanda do not suffer in the event of budget support being suspended or modified again?

Justine Greening: We are looking at what our alternatives are, and what the implications are of all the options that we are faced with. The short answer is yes; we are looking at what we can do.

Q124 Richard Burden: Again, just to clarify, because there was some discussion last time as to exactly what criteria were being looked at, and what the basis would be on which decisions were made, am I right in thinking you are saying that when you make a decision, it will be on the basis of both the partnership principles and the three conditions laid down by the Prime Minister in August of this year?

Justine Greening: Yes, and of course a range of other sources, for example the UN process. That is a core part of it, and it will sit alongside other key assessments that flow in.

Q125 Richard Burden: I was going to ask in a minute about the sources on which you base that, but the issues would be both partnership principles and the conditions. They include a range of issues, but on the question of human rights, would it include both a consideration of the human rights situation inside Rwanda and the question about whether there is or is not support for the M23 in the DRC?

Justine Greening: Yes. Clearly they are covered by the things you have already mentioned, which are the partnership principles and then, as you have said, the additional criteria set out in Andrew Mitchell’s letter to the PM.

Q126 Richard Burden: You have also said, if I understand you correctly, that the sources you will rely on will include those listed in the memorandum of understanding but also others, including independent human rights organisations. Would you have any plans to meet with human rights organisations, for example, Human Rights Watch, before making those decisions?

Justine Greening: We are discussing right now how I can make sure that I have had the relevant engagement that I would like with some of those stakeholders. Whether it is a facetoface meeting or a discussion, it is something I am keen to do.

Q127 Richard Burden: On the Group of Experts’ report, the leaked interim report was part of the picture, we were told last week, on the basis of which the decision to delay or suspend budget support was taken. It was not the only part of the picture, but it was part of the picture. Andrew Mitchell said last week that in terms of December decisions, "It seems to me that the sensible thing to do is to wait for the interim report of the Group of Experts to turn into a final report that is accepted by the United Nations. That will give us the best view of questions like that." The question he is referring to is the question of practical support for the M23.

We also know that some say the Group of Experts report is itself unreliable. Dr Phil Clarke, for example, says there are "significant methodological and substantive problems". Surely we do not want to reach December and go through exactly the same process. We do not want to wait for a report, and when it comes out, say, "The methodology is all wrong." Do you have concerns about the methodology of the process the Group of Experts is now going through? If the answer to that is yes, what are we doing to ensure the methodology is okay? If the answer to that is no, then it is fine.

Justine Greening: Essentially that is a question that needs to be resolved by the UN Sanctions Committee and the UN Security Council. They need to conclude on whether they feel the evidence base provided by this Group of Experts is a sound one or not. It will be important, but it will be one of a number of sources of evidence that we hopefully will be able to look at in concluding whether or not we feel external support for the M23 is ongoing or has ceased. I do not think we would look at it totally in isolation from anything else.

Q128 Richard Burden: You have been very clear that it will be an important part of the evidence you look at but it will not be the only source you will look at.

Justine Greening: At the end of the day, we will look at the UN’s conclusion on that report, including their conclusion on whether they feel that methodologically it had any weaknesses. That will be what I take into account once I reach a decision in the round.

Q129 Richard Burden: We have already had a leaked interim report. There is now a leaked final report. They are out there; people have read them. Do you, or does the Department, have concerns about the methodology? Have you heard that the UN has concerns? If there are those concerns, it is important we know it now. If there are not, at least we can put that one to bed and say, "We will look at that as a thoughtthrough report, although we will look at other things as well."

Justine Greening: I do not think it is fair for me to say that we especially have concerns with the report. It is difficult for me to comment on something that is leaked and not finalised, and is going through the UN itself. You are asking me to comment on a report that technically does not exist in its final form at the moment and has not been finalised. I do not really think I can say whether or not I think the approach in the report that has not been finalised is appropriate or not. What I am saying is that I believe the UN is well placed to make that assessment themselves when they look at it, which they have now begun doing as of last night.

Q130 Richard Burden: My last question is in relation to other donors. Clearly the UK will make its own decision, but will you be consulting with other donors before making your decision?

Justine Greening: Our officials-and indeed I-will no doubt want to understand what other countries’ opinions and views are on the current state of play as I make my decision. However, ultimately I will be guided by what I think is the right thing to do, and no doubt a decision will be reached across the British Government about what the Government feels is the right thing to do. That will be something that we decide ultimately on our own.

Q131 Richard Burden: I suppose what I am asking is whether you talk to them before you make the decision, or whether you talk to them after you make the decision.

Justine Greening: Discussions continue at official level at the moment. I think everybody is keen to get an understanding of what the UN process is likely to conclude, and to understand when other Governments are likely to be taking decisions, as well. However, ultimately I will do and propose what I think is appropriate for the UK; it will be of interest to me to see other Governments’ assessments, but it will be our Government that makes our assessment and reaches our decision.

Q132 Fiona O’Donnell: I should perhaps put on record my declaration that I am a member of Amnesty International. I do not know, Secretary of State, if you have seen the report-not leaked-that they issued in October. It is about torture and illegal detention. They tried to engage and get a response to some of the accusations in this report before publishing, and indeed wrote to the Minister of Defence and the Director of Military Intelligence back in March of this year. They have still not had a response. Have you or your officials had any discussions with these agents of the Rwandan Government about the serious accusations in this Amnesty International report?

Justine Greening: The short answer to that is that I cannot say whether or not they have raised the specific report accusations. I have not had a chance to see that report. I would be quite happy to look at it, but I know that whenever we receive reports and accusations of human rights abuses, they are raised with the Rwandan Government, and we will continue to do that.

Q133 Chris White: I have a couple of broader questions to finish off with. In your new post, have you had the opportunity to think yet about whether there should be changes more generally to the way that aid and budget support is delivered? I think there is a view held by previous Secretaries of State that the poor should not be punished for the sins of their masters. Specifically, do you think that the political conditions for budget support should be made stricter?

Justine Greening: One of the things this Government did on coming into office, and my predecessor did, that I think was very valuable was to strengthen those partnership principles as an approach to sit alongside decisions to give general budget support. The original memorandum of understanding with Rwanda was originally set up, of course, in 1999. One of the things Andrew Mitchell did that was quite appropriate was to strengthen that partnership principles approach to general budget support.

However, I think he was also right to recognise that overall, we see general budget support as a declining part of our portfolio of spend within DFID. It has declined, I think, by 38% in the two years since we came into power. As a Government we have wanted to channel our investment more directly, and less through general budget support-and indeed sector budget support-than we have done in the past. It is fair to say that around about 15% of our budget goes in some kind of budget support direct to Governments, and of that 15% the majority of it is sector budget support, so even that is earmarked for particular aspects of Government spend.

Q134 Chris White: My final question is: in terms of bilateral aid programmes, do you think DFID should take greater account of the human rights record of recipient countries?

Justine Greening: I would like to see human rights become perhaps a more important part of our consideration. I think it matters; I think it is an important building block for countries to be able to develop successfully. I also recognise some of the challenges of seeing that change happen on the ground. It is very easy for me to say here that that is what I think should happen. Delivering it is something far more difficult. I can do a number of things. First of all, I can publicly, as I am doing now, state that I think it matters hugely. Secondly, I can make sure that I reach out to organisations involved in this area to find out what they think is happening on the ground, and to make them understand that my door will be open to hearing from them, as Secretary of State for International Development, where they feel things are not working and where they want to see improvements made-and, indeed, where they think things are going well.

I will be prepared to look at how I can weave that into development policy going forward. To stress the point, I understand the complexities of doing this, and to go back to Rwanda, for example, this is a Government that has very successfully used development investment to lift people out of poverty, although 5 million still remain in extreme poverty. Clearly it is not a black and white picture, but the partnership principles approach that was solidified by Andrew Mitchell was absolutely right to include human rights, and that is something that the last Government was of course right to have as part of its agenda as well.

Q135 Chair: Do you see any risk that the Rwandan Government may turn the tables and say, "If you impose certain conditions on us, we would rather not have your development assistance"?

Justine Greening: Any development relationship with a country needs to be one that is trying to reach some common goals. Otherwise people are pulling in different directions, and that does not create the right ingredients for being successful. That is why the partnership principles are correct, because they essentially set out what those common goals are. We have set out what we think those common goals are. We have a memorandum of understanding with the Rwandan Government, and I think that is something we approach in good faith but also something that we take seriously. Our two Governments have signed a memorandum of understanding, and I think it is what it is; we certainly see it as something that needs to be adhered to.

Chair: That is a perfectly fair answer. Secretary of State, thank you very much indeed. I think it has been very interesting and worthwhile. It is an important issue, and it is not just about Rwanda but about the whole partnership relationship, as you said right at the end. We as a Committee have to make a decision about what we will do with this evidence-in other words, whether or not we produce a Report in advance of your decision or not. You might or might not find that helpful. We will make that decision next week. One other small point: I think in answer to Fiona Bruce you gave some indication of the impact you felt budget support had on poverty reduction. I do not know whether you are in a position to give us a short note on what that is in practical terms. It would be helpful.

It also reinforces the point, which has been made on numerous occasions, that Rwanda does a fantastically good job with the money. I do not think anybody should dispute that, and the Committee has seen for itself really excellent poverty reduction programmes and a remarkable land registration system, which is really very impressive. I do not think anybody should be left in any doubt that the one thing about Rwanda is that when it gets development assistance, it uses it in ways that really do drive down poverty. There are many other countries that are much less effective than Rwanda in doing that. I think it is important that we balance our Report with that information.

Thank you very much indeed. We will see you next week.

Justine Greening: Thank you. I will write you the note as you just requested.

Prepared 30th November 2012