Why is this such a significant problem in my constituency compared with some other areas in the country? As I noted earlier, there has been a surge of low pay and insecure work in this country over the past few years, and that has particularly been the case in my constituency. I know, from speaking to my constituents, that it tends to be women who have to work two or three different jobs, often on casual or zero-hours contracts, because they receive such low pay. Since 2010, one in three women’s jobs has come from women registering as self-employed. That is a problem that, again, the Equal Pay Act cannot address. On average, self-employed

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women earn less than half the money earned by self-employed men. Women are far more likely to be in jobs that pay less than the living wage. We heard my hon. Friend the Member for Birmingham, Yardley (Jess Phillips) talking at length and most passionately about the fact that the labour undertaken by women is given such scant value by our society.

Chris Stephens: The hon. Lady has made a number of excellent points, but another factor in decreasing wages has been the substantial reduction in collective bargaining in the UK since 1979. In Scotland, for example, 81% of workers’ pay was decided by collective bargaining in 1979, whereas that figure is now 23%.

Melanie Onn: I agree absolutely. We have seen the demise of collective bargaining in many different areas and employers are now moving further away from those agreements.

Previously, for example, the Labour Government had agreed a national arrangement for teaching assistants, but the coalition decided not to continue with the national pay negotiating body. Teaching assistants are, obviously, largely women, largely part time and largely low paid, and on term-time-only contracts. I know from my constituency and from people I have represented as an official of Unison that some earn as little as £5,000 or £7,000 a year, working in our schools and supporting our children when they most need additional support. That problem is being exacerbated by the move away from collective bargaining and those people are more prone to being exploited and having their wages squeezed.

Graham Jones (Hyndburn) (Lab): My hon. Friend is making some powerful points in a strong speech. She has mentioned the living wage and many local authorities are trying to elevate the circumstances for low-paid workers, particularly the women workers about whom we have heard, by becoming living wage councils. Surely that is a step forward that all councils should look to take.

Melanie Onn: I shall come to that point shortly.

If I can just make some progress—I have been dying to say that—to tackle unequal pay, it is imperative that we tackle the low-skill, low-wage economy that is particularly detrimental to women. Much of the success of the previous Labour Government was down to the introduction of the minimum wage. With 27% of women earning less than the living wage, the Government must do more to raise wages. If they will not do that by raising the minimum wage, they must commit actively to support SME businesses to pay the living wage and legislate for FTSE 100 companies to do the same. The forthcoming cuts to tax credits will only make the problem of low pay worse. If the Government want tax credits to be replaced by higher wages, they need to be active in making that happen and should not simply cut, and cross their fingers.

I completely concur with the point made by my hon. Friend the Member for Hyndburn (Graham Jones) about living wage councils. I have been active in securing living wage agreements in four different local authorities. That needs to be championed across the board and we

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must ensure that when those councils make arrangements for any contractors to undertake services on their behalf those companies should also be living wage employers.

The Government need to accept that many zero-hours contracts are exploitative and that people cannot properly manage their household budget if they do not know what they will be earning from one week to the next. The change to exclusivity clauses is welcome, but it ignores the wider problem. Something needs to be done to make the lives of people in insecure work more manageable. I will always believe that when a job exists, a proper contract of employment should be provided. The Conservative Government claim to be on the side of working people, yet when they are presented with an opportunity such as this genuinely to improve people’s working lives, they squirm about like a worm at the end of a line.

It is simply not good enough. People need change and they need it now. Take the Government’s commitment to 30 hours of free childcare for working parents. First, I am pleased to see that they have adopted another of the previous Labour Government’s pledges to support working families. In the race to win votes ahead of the general election, they made a commitment they cannot afford. It is massively underfunded. It costs on average £4.53 an hour to provide the care, but the Government are offering only £3.88 an hour. Perhaps the Minister can tell us where the rest of the money is coming from. If it comes at the expense of child tax credit or working families tax credit, the Government are merely giving with one hand but taking away with the other.

I want to finish by saying that I recently met representatives of a local charity in my constituency called Care, which provides emergency food aid in Grimsby, and they told me that the number of meals that they provide to children has increased by 27% this year alone. Unfair wages for women is a problem of basic fairness, but the fact that working women are being pushed into poverty and insecurity to the extent that they can no longer afford to feed their children is a crisis that surely demands urgent action.

6.30 pm

Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op): First, I welcome the new Under-Secretary of State for Women and Equalities and Family Justice, the hon. Member for Gosport (Caroline Dinenage) to her place and look forward to hearing from her shortly.

It has been an excellent debate today and we have heard many thoughtful and passionate contributions, on which I will reflect shortly, but I begin by paying tribute to all those in the House and in our country more broadly who have fought for gender justice, equality and equal pay. I refer to the former Member for Blackburn, Barbara Castle, whom I was privileged to meet a number of times—in fact, I wrote my first political letter to her when I was eight or nine years old—and to those who have campaigned in recent years on pay transparency, particularly my hon. Friends the Members for Ashfield (Gloria De Piero), for Rotherham (Sarah Champion) and for Feltham and Heston (Seema Malhotra), and many others.

We have heard some shocking statistics today that show us just how far we have to go 45 years after the Equal Pay Act: the 81p on average that women earn for

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every male £1, the disparity in the proportion of women who study the law yet do not end up as judges and the 68% fall in the number of equal pay claims since the introduction of the new tribunal fees. Given that we are at the start of Wimbledon, which has had its own equal pay concerns over many years, and the fantastic football match that we are all expecting this evening—I wish my very best to the women’s England football team—we have heard from many hon. Members about the disparity in sport. We heard a number of such contributions just a few moments ago. It is a sad fact, as a recent BBC study showed, that men get more prize money than women in 30% of sports—the disparity could not be shown more starkly.

I want to turn to some of the excellent speeches that we have heard today, including a number of excellent maiden speeches. First, the SNP spokesperson, the hon. Member for Lanark and Hamilton East (Angela Crawley), was clearly passionate about and committed to these issues. There seemed to be a dispute about the statistics on Scotland. They are from the Office for National Statistics and show that the gender pay gap in Scotland has grown from 17.2% in 2011 to 17.4% to 2014. We all need to do a lot better, whatever part of the United Kingdom we are from, and we all need to take a good look at ourselves given that we have so much progress to make 45 years on from the Equal Pay Act.

The right hon. Member for Basingstoke (Mrs Miller), who is not in her place but is the new Chair of the Women and Equalities Committee, spoke of the irony of girls outperforming boys for many years and said that, effectively, we were selling the country short, as she put it, by not using their talents, and I could not agree more.

We heard a very passionate speech from my hon. Friend the Member for Rotherham, who introduced a ten-minute rule Bill on the gender pay gap last year. She quite rightly asked why companies are scared to make pay information more readily available. That is the question we all ought to ask. She powerfully said that equality is not a women’s issue; it is an issue for society and we must do much better.

The hon. Member for Bury St Edmunds (Jo Churchill) made an excellent maiden speech, which I found particularly interesting as my family is historically linked to her constituency. She was the first of three hon. Members who spoke today who are the first female Members of Parliament for their constituencies. She spoke powerfully about Magna Carta’s link to her constituency. I was proud to join her recently on the armed forces parliamentary scheme—another area of our society where the progress of women has been slower than we would have liked. Progress is now being made, and it will be great to work with her on that scheme in the months ahead.

We had another maiden speech from my hon. Friend the Member for Bermondsey and Old Southwark (Neil Coyle), who spoke about the position of women in his constituency, particularly the justice for cleaners campaign, and the fight against inequality in his career and his family experience before coming to this place. Like him, I am only the third MP from my constituency since world war two to have made a maiden speech. I look forward to going to Borough market again shortly; I very much like the coffee there, as well as the many other delights that are on offer.

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We heard an excellent speech from the hon. Member for Bexhill and Battle (Huw Merriman), who spoke about his three daughters, but also, powerfully, from his legal experience—the challenges for women in the legal profession. The tone of the debate has been that we need to unite as a House around the issue and perhaps not look for some of the semantic differences, which I shall come to.

My hon. Friend the Member for Feltham and Heston, who is an experienced advocate on these issues, proudly spoke about our party’s record and the pressure we applied during consideration of the Small Business, Enterprise and Employment Bill—I was a member of the Committee—on the issue of transparency. She also spoke powerfully about the perception of jobs and gender stereotypes, on which a number of hon. Members touched.

The hon. Member for Derby North (Amanda Solloway), who is also the first female MP for that constituency, spoke authoritatively, and my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) spoke powerfully about the potential need for a new Act. She said that the 1970 Act simply has not stood the test of time and that we cannot have reactive legislation, especially in the context of fees and the changes in tribunal law. That needs to be considered holistically: as my hon. Friend the Member for Lewisham, Deptford (Vicky Foxcroft) said, we cannot deny people access to justice on this crucial issue through the imposition of those fees. She also powerfully said that women might have left the kitchen, but many have not gone very far. That is a stark reminder to us all.

The hon. Member for Portsmouth South (Mrs Drummond) spoke about the four strong women who now represent constituencies around Portsmouth harbour. She spoke passionately about the prospects of women in her constituency and, like the hon. Member for Bury St Edmunds, has joined the armed forces parliamentary scheme. I know she will do her best to speak up for the role of women in the armed forces.

The hon. Member for Inverclyde (Ronnie Cowan) made an excellent maiden speech. Clearly, he is incredibly passionate about the people and the industrial history of his constituency. There are many links between my constituency and the Clyde’s industries, and I share the inspiration he has taken from the Apollo programme.

The hon. Member for Taunton Deane (Rebecca Pow) spoke strongly from her experience as a woman in business. Again, she is the first female Member of Parliament for her constituency. That is a significant reflection of how things are starting to change in this Chamber, although, as we have all said, that has not gone far enough.

My hon. Friend the Member for Lancaster and Fleetwood (Cat Smith) essentially asked us the question, “How long do we have to wait?” We have had 45 years since the Equal Pay Act, so how long will it be before we close the gender pay gap? The hon. Member for Faversham and Mid Kent (Helen Whately) asked the good question, “Is there a different dynamic in the debate today?” That is an important point to raise, and one that I note.

It is also important that men have spoken up in the debate. I am proud to be speaking today. As my hon. Friend the Member for Rotherham said, this is not a women’s issue; it is an issue for all society and all Members of the House.

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The hon. Member for Stirling (Steven Paterson) made an excellent maiden speech and spoke warmly of his illustrious predecessors, whether it was Campbell-Bannerman or my former friend in this place, Anne McGuire, who did such an incredible job championing the cause of equality for disabled people. The hon. Gentleman also spoke passionately about his history and the history of his constituency.

We heard a strong speech, which perhaps struck a more discordant tone, from the hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips), but he took it in his stride. My hon. Friend the Member for Cardiff Central (Jo Stevens) followed up with an excellent speech, made from her experience as a director of a major company, in which she highlighted the situation of part-time workers.

My hon. Friend the Member for Birmingham, Yardley (Jess Phillips) spoke honestly about her own marital pay gap and, importantly, about the recent history of the gender pay gap in Birmingham. She challenged us all, quite rightly, about our commitment to feminism and standing up for equalities in this place. I will certainly join her later and declare that I am a feminist, whether in this place or in the bar.

We also heard powerful speeches from my hon. Friend the Member for Neath (Christina Rees), who was an advocate for women in sport before coming to this place, and my hon. Friend the Member for Cambridge (Daniel Zeichner), who spoke about the widening gender pay gap in local government since 2010. My hon. Friend the Member for Great Grimsby (Melanie Onn) rightly highlighted the fact that progress is slowing down, which should ring alarm bells with us all and which is disappointing, given the progress we have seen in recent years.

I do not disagree with the Secretary of State that the causes of the gender pay gap are complex. That is all the more reason why we need the comprehensive report that we call for in the motion to identify the key trends and what we might do about them, particularly as the welcome progress that was made has slowed. Given the common ground and the support that has been expressed on all sides for the principles of the motion, I implore the right hon. Lady not to let semantics get in the way of allowing the motion to pass. She commented on the technicality of the use of the term “equal pay” in the motion and in the law, as opposed to the term “gender pay gap”, but I gently remind her that she has used the terms interchangeably herself, most recently in an article in The Guardian in November last year, when she stressed the importance of equal pay day which, as we all know, is the day in the year when women start working for free compared with men—a shocking indictment.

Although the terms may be used interchangeably in the motion, they expose the same injustice to women across the country which, for many and diverse reasons, still blights our economy and society. The facts are clear. It is 45 years since the Equal Pay Act, yet women still earn on average 81p for every pound earned by men. The average woman will lose more than £200,000 in the course of her working life as a result of the gender pay gap. Women’s wages fell by around £30 a year last year before inflation. The pay gap exists not only in low-wage jobs—we heard much about that

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today—but across the board, especially at higher levels of management. We have seen a shocking fall in the number of equal pay claims.

The gender pay gap is not only morally wrong and an affront to our sense of equality in this House and in the country, but bad for our economy. If women were paid the same as men across the board, our GDP, on one projection, would be up by 13%. There is also an impact on parents and families. The unequal pay challenge means that parental leave will always be seen as primarily for women, even when men want to be with their children, because of the cost of raising children, even with a partner. We need to recognise the moral and economic costs and the costs for families.

I cannot participate in the daughters race as I do not have any daughters, but I have three goddaughters and I want them to have the same opportunities and chances in life as my godsons. As a man I am honoured to wind up the debate today. As my hon. Friend the Member for Rotherham said, this is an issue for all of us, so we need to get on and deal with it. Let us have the transparency, assess the data properly, remove the barriers to justice from tribunal fees, take action on childcare, education, elderly care, low wages and representation in board rooms, and let us get equal. I commend the motion to the House.

6.43 pm

The Parliamentary Under-Secretary of State for Women and Equalities and Family Justice (Caroline Dinenage): It is a great pleasure to take part in the debate. I start by thanking the hon. Member for Ashfield (Gloria De Piero) for securing this important debate on equal pay and the gender pay gap. It has been a fantastic debate and we have had some excellent contributions from across the House and some outstanding maiden speeches. I have listened with great interest to all the points that were made. I thank the hon. Member for Ashfield and the hon. Member for Cardiff South and Penarth (Stephen Doughty) for their kind words of welcome.

We all know that equal pay and the gender pay gap are entirely different but equally important. Discrimination is, sadly, just one of a number of factors behind the gender pay gap. Even if there was never a single incident in which a woman was paid less than a man for the same job, there would still be a gender pay gap. That is why this debate is so important, as it gives me the chance to remind the House how much progress we have made, and how this Government strive to continue to tackle all the causes of disparity between what men and women earn.

Hon. Members asked lots of questions in the debate today and made many specific points. The hon. Member for Lanark and Hamilton East (Angela Crawley) said that she regretted that a debate on this subject was needed in this day and age—a sentiment we all share across the House.

I am proud that my right hon. Friend the Member for Basingstoke (Mrs Miller), who will be the first Chair of the Women and Equalities Committee, was able to speak today. She speaks with great power and authority on these matters. She said that every woman has the right to a job that does not marginalise them because of their gender or penalise them because they have caring responsibilities, which I think we can all unite behind. She also mentioned the importance of flexible skilled

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working and asked about the progress on collecting data. The recent extension of the right to request flexible working means that more than 20 million employees will now have that right. We know that total requests just before the extension were running at about 182,000 a year, with about 144,000 agreed to. We will of course be monitoring the post-extension data.

The hon. Member for Rotherham (Sarah Champion), who has long been a great champion of this important issue, spoke about the importance of tackling the pay gap nationally and internationally. She also talked about the devastating impact that violence against women and girls can have, both at home and overseas, on their ability to reach their full potential, both in the workplace and in the rest of their lives.

My hon. Friend the Member for Bury St Edmunds (Jo Churchill) made a fantastic maiden speech, taking us on a sumptuous and spellbinding tour of the places and people of her constituency. Her remarkable life and business experience made quite an impression and, I think, will make her not only an excellent champion for her corner of Suffolk, but a first-class addition to the House.

The hon. Member for Bermondsey and Old Southwark (Neil Coyle) spoke generously about his predecessor, who incidentally is also my predecessor in the Ministry of Justice. He spoke with enormous knowledge about his constituency and made all our mouths water as he talked about the delights of Borough market and the plethora of breweries and gin distilleries in his patch. Indeed, he might need his predecessor’s taxi to get us all home.

My hon. Friend the Member for Bexhill and Battle (Huw Merriman) spoke with experience about the economic benefits of flexible working and highlighted the importance of data collection, echoing what many business people have said: what gets measured gets managed, and what gets published gets managed even better.

The hon. Member for Feltham and Heston (Seema Malhotra) rightly pointed out that we need to tackle the jobs that are deemed to be either men’s jobs or women’s jobs. We need to get rid of that myth from our everyday parlance and everyday thinking. Unfortunately, she also felt the need, along with the hon. Member for Lancaster and Fleetwood (Cat Smith), to criticise the coalition Government for being slow to move away from a voluntary reporting system. She should remember that, contrary to what has been said, the previous Labour Government had no plans to move forward with section 78 of the Equality Act 2010; they proposed three years of voluntary compliance first, although I completely understand why the Labour party might want to erase parts of its more recent political history.

My hon. Friend the Member for Derby North (Amanda Solloway) represents one of the 20 or so seats where there is actually a positive gender pay gap. We should certainly be hotfooting it to the streets of Derby to find out how they are making such magnificent progress.

The hon. Member for Islington South and Finsbury (Emily Thornberry), who is no longer here—[Interruption.] Oh, she is here but has moved, just to try to fool me on my first day out of the blocks. I welcome her contribution. She always speaks with enormous knowledge and conviction on this subject. She led a Westminster Hall debate in March in which she called for a new equal pay Act, and now she is proposing a new equality Act. We

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expect shortly to publish a post-legislative scrutiny memorandum on the 2010 Act as a Command Paper, and we now have the Women and Equalities Committee to receive it. It strikes me that the Committee, ably chaired by my right hon. Friend the Member for Basingstoke, might wish to consider the important issues that the hon. Lady raised in relation to the need for a new Act.

It was particularly great to hear from my hon. Friend and neighbour, the Member for Portsmouth South (Mrs Drummond), who rightly pointed out the importance of encouraging girls to fill the skilled engineering and defence jobs that our neck of the woods, with such a proud Navy heritage, always demands. She makes it 100% female representation for the Portsmouth harbour area, and that is to be celebrated.

I congratulate the hon. Member for Inverclyde (Ronnie Cowan) on an educational and enlightening maiden speech that brought his constituency to life as the birthplace of James Watt, with a remarkable geography, and highlighted his long history of winning elections for the SNP.

My hon. Friend the Member for Taunton Deane (Rebecca Pow) spoke about the success of women in SMEs, not least in her constituency, which has an award-winning bull semen business—the mind boggles. That reminds me that if women were starting businesses at the same rate as men, we would have 1 million more small businesses in this country. My hon. Friend the Member for Faversham and Mid Kent (Helen Whately) highlighted the importance of the role of men in addressing this issue and how powerful they can be as agents of change.

The hon. Member for Stirling (Steven Paterson) made an excellent maiden speech giving a brief summary of his area’s history and making an early pitch for Stirling castle as an alternative location should we ever have to leave this building; I hope everybody has noted that.

My hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) spoke with his trademark eloquence about girls’ educational dominance and rightly urged us not to forget their male peers who sometimes get left behind. He highlighted the impact of motherhood on women’s ability to fulfil their career ambitions and abilities.

The hon. Members for Cardiff Central (Jo Stevens), for Birmingham, Yardley (Jess Phillips) and for Neath (Christina Rees) made a series of powerful, passionate and engaging speeches that underlined the importance of tackling this issue for a whole host of reasons. I note carefully what the hon. Member for Birmingham, Yardley said about the travails of Birmingham City Council in the face of equal pay claims, although I find it hard to square that evidence with the statements made by others in her party that equal pay law is ineffective and should be replaced.

The hon. Member for Cambridge (Daniel Zeichner) spoke about the local government pay gap, as did the hon. Member for Great Grimsby (Melanie Onn). The Government do not seek to set pay rates for local government, as all local authorities are covered by the public sector equality duty, which requires them to have due regard to equality considerations in carrying out their functions, including decisions about their own workplaces. The hon. Member for Cambridge asked

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whether bonuses will be covered in the regulations. The great thing about the consultation is that it will explore exactly what should be published, how it should be published, and what more can be done to tackle this issue.

The hon. Member for Great Grimsby asked how we will fund 30 hours of free childcare. We will talk to the childcare sector and conduct a review of funding for this entitlement. We must strike the right balance between being fair to providers and delivering value for money for the taxpayer. I would gently say to her that as a mother of two children that I put through childcare under the previous Government, when it was the most expensive in Europe, anything we can do to improve opportunities for parents in this regard is very important.

The good news is that there are more women in work than ever before, and we have one of the highest women’s employment rates in the EU, with 14.5 million women employed, 8.3 million of whom are working full time. It is encouraging to see that there are now no all-male FTSE 100 boards. We have strongly promoted and championed the work of the Women’s Business Council and implemented Lord Davies’s review of women on boards. As a result, women now make up 23% of FTSE 100 boards and 34% of managing directors and senior officials. Let us not forget that 20% of SMEs are now majority led by women—that is nearly 1 million small businesses.

Too many women have told us that they were unable to develop their careers due to lack of affordable childcare and limited flexibility in balancing work and family responsibilities. We have taken action to ensure that the workplace meets women’s needs and to give them a fair chance to get to the top by extending to all the right to request flexible working, introducing shared parental leave, and extending free childcare to 30 hours a week for working families with three and four-year-olds, with a tax-free childcare scheme that will save a working family up to £2,000 per child.

We need to break down the barriers that say that one sort of job is more suitable for women and another for men. That needs to start with our young people, which is why we are broadening the career aspirations for girls and young women by encouraging them to consider careers in science, technology, engineering and maths through the “Your Life” campaign.

Many hon. Members have mentioned the great ladies from the Ford Motor Company in Dagenham—the spiritual home of the fight for equal pay—and I was there last week, seeing how they are inspiring the next generation of female engineers. Opening up those highly skilled and better paid careers ensures that women are less concentrated in sectors that offer narrower scope for reward and career progression.

As my right hon. Friend the Member for Basingstoke has said, we need to make sure that older women are supported to reach their full potential. We have built on the success of the older workers champion by rolling out a regional scheme across the country. We have also started a project with a £1.6 million pot, exploring how carers can be supported to remain in employment if they wish by using flexible working arrangements and improving technological access to information and resources.

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Under this Government, the gender pay gap is the narrowest it has ever been, but at 19.1% we still have work to do. All parties agreed in the last Parliament that the way forward was to introduce section 78 of the Equality Act 2010, requiring mandatory pay reporting by employers with at least 250 employees. Our manifesto underlined our commitment to that. We are serious about reducing the gender pay gap further, and because we understand business we want to bring business with us as we do so. We are delivering that as a priority. In line with our commitments from the last Parliament, we will shortly launch a public consultation on gender pay reporting and introduce regulations in due course.

The Opposition’s motion mentions the Equality and Human Rights Commission and the Low Pay Commission. Of course, we are already working closely with the EHRC on equal pay, and there is nothing to stop it, as an independent body, analysing pay gap information in any way it likes. The EHRC is already under a duty to monitor the effectiveness of the equality enactments, which include regulations made under section 78, and to give advice and recommendations to the Government about them. Therefore, the EHRC will already be under a under a duty to monitor the effectiveness of section 78. Given that the EHRC will already be under such a duty, and given that the only way it could be mandated would be by Parliament changing the Equality Act 2006, which sets out its functions and remits, the Opposition’s motion seems a little muddled. Where there is evidence of actual pay discrimination, we introduced legislation requiring employment tribunals to order the employer to complete an equal pay audit.

Stephen Doughty: Will the Minister give way?

Caroline Dinenage: I have very little time left, so I am going to try to get to the end of my speech, if the hon. Gentleman does not mind. [Interruption.] If the hon. Gentleman will give me time, I will offer a full explanation.

In conclusion, this Government are already strongly building on the record of the coalition, both in tackling the gender pay gap and, more widely, in promoting policies that will ensure that women can play their full part in our economic growth. I am proud to be a member of this Government—we are taking forward that work—and delighted to have this opportunity so early in the new Parliament to present our record to the House. However, we should never be complacent about equal pay and addressing the gender pay gap.

Sadly, although I share so much of the sentiment of the motion, all of its suggestions, apart from a formal laying of the annual document before Parliament, could already be done by the EHRC without any change to legislation or any instruction by Government, which we could not in any case give to an independent body. I therefore call upon the House to reject the motion as a muddled and unnecessary add-on to what this Government are already committed to taking very seriously.

Question put.

The House divided:

Ayes 261, Noes 312.

Division No. 37]


6.58 pm


Abrahams, Debbie

Ahmed-Sheikh, Ms Tasmina

Alexander, Heidi

Ali, Rushanara

Allen, Mr Graham

Anderson, Mr David

Arkless, Richard

Ashworth, Jonathan

Austin, Ian

Bardell, Hannah

Barron, rh Kevin

Beckett, rh Margaret

Benn, rh Hilary

Berger, Luciana

Betts, Mr Clive

Black, Ms Mhairi

Blackford, Ian

Blackman, Kirsty

Blackman-Woods, Dr Roberta

Blenkinsop, Tom

Blomfield, Paul

Boswell, Philip

Brake, rh Tom

Brennan, Kevin

Brock, Deidre

Brown, Alan

Brown, Lyn

Brown, rh Mr Nicholas

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Burgon, Richard

Butler, Dawn

Byrne, rh Liam

Cadbury, Ruth

Cameron, Dr Lisa

Campbell, rh Mr Alan

Campbell, Mr Ronnie

Champion, Sarah

Chapman, Douglas

Chapman, Jenny

Cherry, Joanna

Clwyd, rh Ann

Coaker, Vernon

Coffey, Ann

Cooper, Julie

Cooper, Rosie

Cooper, rh Yvette

Corbyn, Jeremy

Cowan, Ronnie

Cox, Jo

Coyle, Neil

Crausby, Mr David

Crawley, Angela

Creagh, Mary

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Dakin, Nic

Danczuk, Simon

David, Wayne

Davies, Geraint

Day, Martyn

De Piero, Gloria

Docherty, Martin John

Dodds, rh Mr Nigel

Donaldson, Stuart

Doughty, Stephen

Dowd, Jim

Dowd, Peter

Dromey, Jack

Dugher, Michael

Durkan, Mark

Eagle, Maria

Elliott, Julie

Ellman, Mrs Louise

Esterson, Bill

Evans, Chris

Farrelly, Paul

Fellows, Marion

Ferrier, Margaret

Field, rh Frank

Fitzpatrick, Jim

Flello, Robert

Fletcher, Colleen

Flynn, Paul

Fovargue, Yvonne

Foxcroft, Vicky

Gapes, Mike

Gardiner, Barry

Gethins, Stephen

Gibson, Patricia

Glass, Pat

Glindon, Mary

Godsiff, Mr Roger

Goodman, Helen

Grady, Patrick

Grant, Peter

Gray, Neil

Green, Kate

Greenwood, Lilian

Greenwood, Margaret

Griffith, Nia

Gwynne, Andrew

Haigh, Louise

Hamilton, Fabian

Hanson, rh Mr David

Harman, rh Ms Harriet

Harpham, Harry

Harris, Carolyn

Hayes, Helen

Hayman, Sue

Healey, rh John

Hendry, Drew

Hepburn, Mr Stephen

Hillier, Meg

Hodgson, Mrs Sharon

Hoey, Kate

Hollern, Kate

Hopkins, Kelvin

Hosie, Stewart

Howarth, rh Mr George

Hunt, Tristram

Huq, Dr Rupa

Hussain, Imran

Irranca-Davies, Huw

Jarvis, Dan

Johnson, Diana

Jones, Gerald

Jones, Graham

Jones, Helen

Jones, Mr Kevan

Jones, Susan Elan

Kane, Mike

Kaufman, rh Sir Gerald

Keeley, Barbara

Kerevan, George

Kerr, Calum

Khan, rh Sadiq

Kyle, Peter

Lavery, Ian

Law, Chris

Leslie, Chris

Lewell-Buck, Mrs Emma

Lewis, Clive

Long Bailey, Rebecca

Lucas, Ian C.

Lynch, Holly

MacNeil, Mr Angus Brendan

Mactaggart, rh Fiona

Madders, Justin

Mahmood, Mr Khalid

Mahmood, Shabana

Malhotra, Seema

Mann, John

Marris, Rob

Marsden, Mr Gordon

Maskell, Rachael

Matheson, Christian

Mc Nally, John

McCabe, Steve

McCaig, Callum

McCarthy, Kerry

McDonagh, Siobhain

McDonald, Andy

McDonald, Stewart

McDonald, Stuart C.

McDonnell, Dr Alasdair

McFadden, rh Mr Pat

McGarry, Natalie

McGinn, Conor

McGovern, Alison

McInnes, Liz

McLaughlin, Anne

Meacher, rh Mr Michael

Meale, Sir Alan

Mearns, Ian

Miliband, rh Edward

Monaghan, Carol

Monaghan, Dr Paul

Moon, Mrs Madeleine

Morris, Grahame M.

Mullin, Roger

Nicolson, John

O'Hara, Brendan

Onn, Melanie

Onwurah, Chi

Oswald, Kirsten

Owen, Albert

Paisley, Ian

Paterson, Steven

Pearce, Teresa

Pennycook, Matthew

Perkins, Toby

Phillips, Jess

Phillipson, Bridget

Powell, Lucy

Pugh, John

Qureshi, Yasmin

Rayner, Angela

Reed, Mr Jamie

Rees, Christina

Reynolds, Jonathan

Rimmer, Marie

Robertson, Angus

Robinson, Mr Geoffrey

Ryan, rh Joan

Salmond, rh Alex

Saville Roberts, Liz

Shannon, Jim

Sharma, Mr Virendra

Sheerman, Mr Barry

Sheppard, Tommy

Sherriff, Paula

Shuker, Mr Gavin

Siddiq, Tulip

Skinner, Mr Dennis

Slaughter, Andy

Smith, rh Mr Andrew

Smith, Angela

Smith, Cat

Smith, Jeff

Smith, Nick

Smith, Owen

Smyth, Karin

Spellar, rh Mr John

Starmer, Keir

Stephens, Chris

Stevens, Jo

Streeting, Wes

Stringer, Graham

Stuart, Ms Gisela

Tami, Mark

Thewliss, Alison

Thomas, Mr Gareth

Thomas-Symonds, Nick

Thompson, Owen

Thomson, Michelle

Thornberry, Emily

Timms, rh Stephen

Trickett, Jon

Turley, Anna

Turner, Karl

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, rh Keith

Vaz, Valerie

Weir, Mike

West, Catherine

Whiteford, Dr Eilidh

Whitehead, Dr Alan

Williams, Hywel

Williams, Mr Mark

Wilson, Corri

Winnick, Mr David

Winterton, rh Ms Rosie

Wishart, Pete

Woodcock, John

Wright, Mr Iain

Zeichner, Daniel

Tellers for the Ayes:

Jessica Morden


Phil Wilson


Adams, Nigel

Afriyie, Adam

Aldous, Peter

Allan, Lucy

Allen, Heidi

Amess, Sir David

Andrew, Stuart

Ansell, Caroline

Argar, Edward

Atkins, Victoria

Bacon, Mr Richard

Baker, Mr Steve

Baldwin, Harriett

Barclay, Stephen

Baron, Mr John

Barwell, Gavin

Bebb, Guto

Bellingham, Mr Henry

Benyon, Richard

Beresford, Sir Paul

Berry, Jake

Berry, James

Bingham, Andrew

Blackman, Bob

Blackwood, Nicola

Boles, Nick

Bone, Mr Peter

Borwick, Victoria

Bottomley, Sir Peter

Bradley, Karen

Brady, Mr Graham

Brazier, Mr Julian

Bridgen, Andrew

Brine, Steve

Brokenshire, rh James

Bruce, Fiona

Buckland, Robert

Burns, Conor

Burns, rh Sir Simon

Burrowes, Mr David

Burt, rh Alistair

Cameron, rh Mr David

Carmichael, Neil

Cartlidge, James

Cash, Sir William

Caulfield, Maria

Chalk, Alex

Chishti, Rehman

Chope, Mr Christopher

Churchill, Jo

Clarke, rh Mr Kenneth

Cleverly, James

Clifton-Brown, Geoffrey

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Costa, Alberto

Cox, Mr Geoffrey

Crabb, rh Stephen

Davies, Byron

Davies, Chris

Davies, David T. C.

Davies, Glyn

Davies, James

Davies, Mims

Davies, Philip

Davis, rh Mr David

Dinenage, Caroline

Djanogly, Mr Jonathan

Donelan, Michelle

Dorries, Nadine

Double, Steve

Dowden, Oliver

Drax, Richard

Drummond, Mrs Flick

Duncan, rh Sir Alan

Duncan Smith, rh Mr Iain

Dunne, Mr Philip

Ellis, Michael

Ellison, Jane

Elphicke, Charlie

Eustice, George

Evans, Graham

Evans, Mr Nigel

Evennett, rh Mr David

Fabricant, Michael

Fallon, rh Michael

Fernandes, Suella

Fox, rh Dr Liam

Francois, rh Mr Mark

Frazer, Lucy

Freeman, George

Freer, Mike

Fuller, Richard

Fysh, Marcus

Gale, Sir Roger

Garnier, rh Sir Edward

Garnier, Mark

Gauke, Mr David

Ghani, Nusrat

Gibb, Mr Nick

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Gove, rh Michael

Graham, Richard

Grant, Mrs Helen

Gray, Mr James

Grayling, rh Chris

Green, Chris

Green, rh Damian

Greening, rh Justine

Grieve, rh Mr Dominic

Griffiths, Andrew

Gummer, Ben

Gyimah, Mr Sam

Halfon, rh Robert

Hall, Luke

Hammond, rh Mr Philip

Hammond, Stephen

Hancock, rh Matthew

Harper, rh Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Haselhurst, rh Sir Alan

Hayes, rh Mr John

Heald, Sir Oliver

Heappey, James

Heaton-Harris, Chris

Heaton-Jones, Peter

Henderson, Gordon

Herbert, rh Nick

Hinds, Damian

Hoare, Simon

Hollingbery, George

Hollinrake, Kevin

Hollobone, Mr Philip

Holloway, Mr Adam

Hopkins, Kris

Howarth, Sir Gerald

Howell, John

Howlett, Ben

Huddleston, Nigel

Hunt, rh Mr Jeremy

Hurd, Mr Nick

Jackson, Mr Stewart

James, Margot

Javid, rh Sajid

Jayawardena, Mr Ranil

Jenkin, Mr Bernard

Jenkyns, Andrea

Jenrick, Robert

Johnson, Boris

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kennedy, Seema

Kirby, Simon

Knight, rh Sir Greg

Knight, Julian

Kwarteng, Kwasi

Lancaster, Mark

Latham, Pauline

Leadsom, Andrea

Lee, Dr Phillip

Lefroy, Jeremy

Leigh, Sir Edward

Leslie, Charlotte

Letwin, rh Mr Oliver

Lewis, Brandon

Lewis, rh Dr Julian

Liddell-Grainger, Mr Ian

Lidington, rh Mr David

Lilley, rh Mr Peter

Lopresti, Jack

Lord, Jonathan

Loughton, Tim

Lumley, Karen

Mackinlay, Craig

Mackintosh, David

Main, Mrs Anne

Mak, Alan

Malthouse, Kit

Mann, Scott

Mathias, Dr Tania

May, rh Mrs Theresa

Maynard, Paul

McCartney, Jason

McCartney, Karl

McLoughlin, rh Mr Patrick

McPartland, Stephen

Menzies, Mark

Mercer, Johnny

Merriman, Huw

Metcalfe, Stephen

Miller, rh Mrs Maria

Milling, Amanda

Mills, Nigel

Milton, rh Anne

Mitchell, rh Mr Andrew

Mordaunt, Penny

Morgan, rh Nicky

Morris, Anne Marie

Morris, David

Morris, James

Morton, Wendy

Mowat, David

Murray, Mrs Sheryll

Murrison, Dr Andrew

Neill, Robert

Newton, Sarah

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

Offord, Dr Matthew

Parish, Neil

Patel, rh Priti

Paterson, rh Mr Owen

Pawsey, Mark

Penning, rh Mike

Penrose, John

Percy, Andrew

Perry, Claire

Phillips, Stephen

Philp, Chris

Pickles, rh Sir Eric

Pincher, Christopher

Poulter, Dr Daniel

Pow, Rebecca

Prentis, Victoria

Prisk, Mr Mark

Pritchard, Mark

Pursglove, Tom

Quin, Jeremy

Quince, Will

Raab, Mr Dominic

Redwood, rh John

Rees-Mogg, Mr Jacob

Robertson, Mr Laurence

Robinson, Mary

Rosindell, Andrew

Rudd, rh Amber

Rutley, David

Sandbach, Antoinette

Scully, Paul

Selous, Andrew

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Simpson, rh Mr Keith

Skidmore, Chris

Smith, Chloe

Smith, Henry

Smith, Julian

Smith, Royston

Soames, rh Sir Nicholas

Solloway, Amanda

Spelman, rh Mrs Caroline

Spencer, Mark

Stephenson, Andrew

Stevenson, John

Stewart, Bob

Stewart, Iain

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stuart, Graham

Sturdy, Julian

Sunak, Rishi

Swayne, rh Mr Desmond

Swire, rh Mr Hugo

Syms, Mr Robert

Thomas, Derek

Throup, Maggie

Timpson, Edward

Tolhurst, Kelly

Tomlinson, Justin

Tomlinson, Michael

Tracey, Craig

Tredinnick, David

Trevelyan, Mrs Anne-Marie

Truss, rh Elizabeth

Tugendhat, Tom

Turner, Mr Andrew

Tyrie, rh Mr Andrew

Vaizey, Mr Edward

Vickers, Martin

Walker, Mr Charles

Walker, Mr Robin

Warburton, David

Warman, Matt

Watkinson, Dame Angela

Wharton, James

Whately, Helen

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, rh Mr John

Wiggin, Bill

Williams, Craig

Williamson, rh Gavin

Wilson, Mr Rob

Wollaston, Dr Sarah

Wood, Mike

Wragg, William

Wright, rh Jeremy

Zahawi, Nadhim

Tellers for the Noes:

Guy Opperman


Jackie Doyle-Price

Question accordingly negatived.

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1 July 2015 : Column 1596

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Business without Debate

Welsh Grand Committee



(1) the matter of the Legislative Programme as outlined in the Queen’s Speech and the Budget Statement as it relates to Wales be referred to the Welsh Grand Committee for its consideration;

(2) the Committee shall meet at Westminster on Wednesday 15 July at 9.30am and 2.00pm to consider the matter referred to it under paragraph (1) above; and

(3) the Chair shall interrupt proceedings at the afternoon session not later than two hours after their commencement at that sitting.—(Kris Hopkins.)

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Sub-Saharan Africa (Corruption and the Economy)

Motion made, and Question proposed, That this House do now adjourn.—(Kris Hopkins.)

7.12 pm

Stephen Phillips (Sleaford and North Hykeham) (Con): Let us begin our journey in almost any country—certainly far too many countries—on the world’s poorest continent, a continent bordering Europe: that of Africa. We sit in the office of the procurement manager of a Government Department—it matters not which one, for they are all much the same. Outside, not 100 feet away, a mother sits in the stifling heat with her children engaged in whatever business she has, selling mangoes, or coconuts, or smoked fish to passers-by perhaps. She survives and provides for her family on an income of less than a dollar a day. There is no father, for he passed away some time ago from a virus with which many in the developed world live full and long lives. Whether the mother has HIV, whether she will survive to see her sons grow to manhood, neither she nor we know. But our world, and even the world of our procurement manager, is a world wholly unknown to her experience.

In the office in which we sit, the procurement manager, who is tasked with spending donor funds from the developed world, is negotiating a contract for the supply of expensive photocopiers to the Department in which the brother who appointed him is the Minister. His salary is a few thousand dollars a year, a fortune to the vast majority of the citizens he is supposed to serve. Yet below the cuff of his crisp white shirt, we find the essential element of the uniform of the Government procurement manager in any sub-Saharan African country: the gold, diamond-encrusted Rolex, yours for only $40,000 at any good airport en route to the nation in which we find ourselves. How on earth was it paid for? Was it perhaps a gift? No. It was paid for by the official himself from cash given to him, which secured another lucrative Government contract for another supplier—funds paid not to the Government, but to the official himself. It is, we are told, something we must accept; it is the way things are. But it is the way things have been for far, far too long.

Across sub-Saharan Africa, if you want to do business, you must pay to oil the wheels. You must pay if you want to avoid the consequences of laws designed to protect the most vulnerable from the exploitation of the natural resources that lie adjacent to homes. You must pay if you want to drive unmolested past makeshift roadblocks manned by real police officers employed by the state. You must pay for almost any interaction with the officials of the state. For if you do not, you will find your life much more difficult than it needs to be—if, that is, you are fortunate enough to have the cash to ease your path.

If you are rich enough, you can change that; if you are rich enough and you want to—and many businesses do—you can change the laws that inconveniently prevent you from exploiting the resources Africa possesses and, even better, from paying tax on your profits. If you are rich enough, you can always buy yourself out of any trouble you find yourself in.

Corruption in sub-Saharan Africa is therefore endemic; it is part of the way of life; it is how things are. But—and this is the point with which the House needs

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to be troubled—corruption stifles legitimate investment, kills economic growth, maintains and supports poverty, and because it does all those things, it also threatens the security of this country and of the developed world as a whole.

The poorest people—and it is the very poorest and the most vulnerable in our world that we are talking about—will risk all in an attempt to make their way to the developed world. And some of them, seeing the quality of life we have and they do not, are also ripe for a radicalisation that endangers the security of our citizens overseas and, as we have seen, here at home as well.

Jim Shannon (Strangford) (DUP): I sought permission beforehand to intervene. Does the hon. and learned Gentleman feel that there is perhaps a need for Department for International Development projects that come from the backing of this Government—my and his Government—to be monitored in respect of project delivery for the people on the ground to ensure that they are correct? Does there need to be oversight of DFID projects by the Government to stop corruption?

Stephen Phillips: I am grateful to the hon. Gentleman for his intervention, and he is absolutely right. I shall come on to his point in due course.

Corruption in the developing world has been a hidden problem for too long, though it is now beginning to be brought home to us by the constant threat to our security and by an untrammelled immigration that sees fires set at the entrance to the channel tunnel in France. It is something that requires effort from every Government across the world to challenge, but it is also something that I fear is still too far down the political agenda across the world to be effectively tackled.

Nothing much is changing in terms of advancing the anti-corruption agenda. On 9 December 2013, on international anti-corruption day, the UN Secretary-General pointed out that

“corruption suppresses economic growth by driving up costs, and undermines the sustainable management of the environment and natural resources. It breaches fundamental human rights, exacerbates poverty and increases inequality by diverting funds from health care, education and other essential services. The malignant effects of corruption are felt by billions of people everywhere.”

Pauline Latham (Mid Derbyshire) (Con): Does my hon. and learned Friend agree that until all Governments have zero tolerance of corruption, they will never be able to invest what they need to invest in health and education, as he said? They should take a leaf out of Rwanda’s book, as that is what it has done, and it is investing consistently, which other countries are not.

Stephen Phillips: My hon. Friend is right. I cannot speak specifically about Rwanda, but unless and until all countries bear down on corruption, this will be a problem that endures.

Very little progress has been made since the Secretary-General made those remarks two years ago. Still the procurement managers sit in their air-conditioned offices marking the passage of time on their gold Rolexes; still corporate interests buy their way out of laws designed to protect the environment and to ensure that they pay proper amounts of taxation; still wealthy individuals and businesses ease their passage through difficult lawsuits

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by ensuring that the judiciary across Africa knows which side is more likely to pay more for the “right” result.

Let us take but one area. In its report “Making a Killing”, published this year, Save the Children estimated that the lost tax revenues to developing countries in sub-Saharan Africa due to illicit financial flows was in the order of $15 billion—a figure that dwarfs this country’s annual aid budget and would pay for 1.8 million healthcare workers. That is a loss of revenue to sub-Saharan Africa in just one area, which is largely made possible by a corruption that allows the maintaining of tax laws and treaties that favour rich corporations which are prepared to bribe Governments and parliamentarians to secure their favoured status. The report fails to take account of perhaps even larger revenues that are lost because a blind eye is turned—once it has been paid for—to direct tax evasion. That is morally wrong. It sustains endemic poverty, and, as I have said, it threatens our own security.

We are not without an international framework within which to deal with the issue. In 2003, the United Nations opened for signature the international anti-corruption convention, which the majority of countries in the world have now ratified. It established some common standards in relation to, for example, criminalisation and law enforcement in chapter III, and international co-operation in chapter IV. However, although monitoring finally began in about 2010, it has been patchy and inconsistent. It also suffers from the major failing that review takes place principally “in region”, thus opening up a whole new field to corruption as non-compliant countries with mutual interests are able to score one another for compliance. One issue that the Minister could usefully discuss with his counterparts in the Foreign and Commonwealth Office is how the convention can be updated to ensure proper monitoring.

I believe that the OECD anti-bribery convention has been ratified by only 41 countries. What efforts are the Government making to ensure not only that it is more broadly adopted, but that it is actually enforced by those who have signed it? In its most recent report on the implementation of the convention in 2015, Transparency International found that there was “little or no enforcement” of it in many states, including the Republic of Ireland. There was “active enforcement” only in the United Kingdom, the United States, Germany and Switzerland.

The conventions are, however, only part of the solution. They assist in establishing common international standards, but without enforcement—or, for that matter, the institutions that are necessary to ensure enforcement—they are essentially meaningless.

Richard Fuller (Bedford) (Con): My hon. and learned Friend has mentioned the Foreign Office and other Departments. Is he satisfied with the current position, or does he believe there is an opportunity for greater understanding and co-operation between the Foreign Office and the Department for International Development when it comes to tackling some of the problems that he is outlining?

Stephen Phillips: Co-operation between the two Departments is obviously critical. Indeed, the Government as a whole must focus on the need to bear down on corruption where it exists, whether here or anywhere else in the world.

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One of the problems is that very little effort appears to have been devoted to ensuring that institution building is carried out by donors who too often prefer to focus on the sexier aspects of development, such as education and health—funding areas that are, in any event, losing more money than they are receiving because of the corruption that pervades the region. So it is, although he may not know it, that the Minister is funding education programmes which pay teachers who do not exist; so it is that he is paying for the planting of crops which cannot grow in soil that cannot be maintained; and so it is that he funds programmes as a result of which money routinely finds itself in the hands of the governing class, despite the best efforts of those in his Department who work so hard to ensure that that does not happen.

Unless and until there is an unrelenting focus on changing the institutional environment throughout sub-Saharan Africa, which at present there is not, very little will change. As Dr John Mukum Mbaku argued in his 2007 book on corruption in Africa,

“the institutional environment, not cultural norms, determine a society’s propensity to engage in corruption and other forms of opportunism ...The incentive structures that a country’s market participants face—which are determined by the country’s institutional arrangements, may create opportunities for corruption and provide an environment in which even honest and highly ethical individuals may be forced to engage in corrupt activities in order to survive. Such perverse incentive structures can be changed or modified through democratic constitutional reforms.”

Patrick Grady (Glasgow North) (SNP): May I take up that point about “getting our own house in order”? Does the hon. and learned Gentleman accept that, while some of the corruption that he is describing may not exist in this country, we operate certain systems of patronage about which we must be very careful in view of the example that they might set developing countries?

Stephen Phillips: I think that I agree with the hon. Gentleman, although unless he gives some specific examples it is a bit difficult for me to know. However, corruption plainly does not exist in this country to the extent that it exists in large parts of Africa. I would not want to equate the two, or, indeed, give solace to those who engage in corruption in Africa on the basis that there is anything similar going on here, for the simple reason that there is not.

What steps is the Minister taking in this area—not just because it is the right thing to do, but because it is essential for our own security—to ensure there is institution building within sub-Saharan Africa to discourage individual Government officials from engaging in corruption? What structural reforms do the Government intend to make our aid dependent on, in order to root out those who enrich themselves at the expense of those they are supposed to serve? To what extent is our international aid delivered in a manner designed to ensure that it does not find itself in the wrong places and, more importantly, in the wrong pockets?

DFID’s role is crucial. Having met, indeed enshrined in law, our commitment to spend 0.7% of GNI on international aid—a decision not always popular, but again essential for our national security—DFID’s efforts in stamping out corruption, while well meaning, none the less give cause for concern in some areas. As the

1 July 2015 : Column 1602

Independent Commission for Aid Impact pointed out in its 2014 report “DFID’s Approach to Anti-Corruption and its Impact on the Poor”,

“DFID’s anti-corruption activities have demonstrated certain achievements but have had little success in reducing the effects of corruption, especially as directly experienced by the poor.”

The report went on to point out that DFID had

“little understanding of what is working with respect to its anti-corruption activities”


“does not fully understand which of its activities are addressing corruption or how they will make a difference.”

I appreciate that the Minister is new to his job, and that the Department is always well meaning and more often than not effective in delivering its objectives, but he has to tell the House how it is that, rather than merely paying lip service to the anti-corruption agenda, he now intends to bear down on something that hits the very poorest people in the world the hardest. More bilateral aid must, I say to him, go to the anti-corruption effort. All bilateral aid must be conditional on corruption, in all its forms, being stamped out in the countries to which it is given. If we really want to tackle poverty in the developing world and improve our security, adopting the sustainable development goals this year is all well and good, but part of that effort has to focus, in a way in which it has seemingly not to date, on the eradication of corruption as a way of life, and as a way of government, across the whole of Africa.

Why is that? Let me end where I began, for I must tell the House that the procurement manager and the mother with whom I began my speech are real people. I have spoken to them. I have witnessed the wealth of one and the poverty of the other, and I have played football with the sons. Like other boys across the developing world, theirs will not be an easy life, but it will be a great deal easier and more likely to be worth while if, in growing up, they do not need to bribe their way through school, university and into a job, paying teachers, university professors, lawyers, policemen, judges, healthcare workers and managers to perform the functions for which the state in which they live is already paying on their behalf.

Morally, we owe such boys an obligation to do all we can to stamp out the corruption that robs them and their fellows of their futures, and keeps them in poverty. Lest it be thought that it is not in our interests or not our problem, I end merely by pointing out that, if we do not act, it is they a future Home Secretary will be dealing with at Calais or, worse, on the beaches of some foreign shore where a poverty of existence made possible by corruption has given rise to a radicalisation which is at once both perverse and avoidable.

7.28 pm

The Minister of State, Department for International Development (Grant Shapps): I congratulate my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) on securing the debate on this important subject and on the incredibly powerful way in which he has framed his arguments. He is absolutely right to say that corruption, fraud, tax avoidance and evasion pose serious challenges in the developing world. They put an economic brake on development and help to ensure that nations fail to develop at the speed that we would all want to see. What is more, they

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are matters of direct interest to this House because of our impressive record in international development. However, he is right to highlight the issue of corruption. I want to turn to his speech and to other comments made in the debate.

As my hon. and learned Friend will know, the Department for International Development works in some of the poorest countries in the world, where governance arrangements are often extremely weak. He highlighted that in his passionate speech. Corruption and fraud are often commonplace. Often, there is a highly sophisticated patronage network of elite engagement. I want to outline DFID’s approach to combating corruption and fraud in sub-Saharan Africa while trying to achieve our development goals for some of the poorest people in the world.

First, however, I want to highlight the extent of the challenge facing us. My hon. and learned Friend is absolutely right that in some countries and locations the problem is endemic. That can even be the case in really good countries. Last week I was in Malawi, a functioning democracy that has been free of war for the last 51 years. Even there the President was telling me that it is difficult to get things done and the state moves at a slow pace. Although he did not mention this, we know corruption is part of that problem.

Although there is evidence that some countries in east Asia have achieved high levels of growth in spite of high levels of corruption, the evidence for sub-Saharan Africa reinforces what our common sense tells us: that corruption has a hugely negative effect on investor confidence in a country. My hon. and learned Friend mentioned $15 billion in lost revenue. In fact the World Economic Forum reported that corruption undermines prosperity by imposing a cost equivalent to 5% of global GDP, or $2.6 trillion, every year.

Corruption is ranked as one of the top two barriers to doing business in two thirds of DFID’s main partner countries, so this is a massive problem. It creates barriers to market entry. Two thirds of foreign bribery cases occurred in just four sectors related to infrastructure: 19% in the extractives sector; 15% in construction; 15% in transport and storage; and 10% in information and communication. That illustrates that corruption is huddled around specific sectors.

There is also increasing uncertainty for investors, to the detriment of long-term investment. The World Bank reports that bribery can add up to 10% to business costs globally. Corruption also limits the potential of business. It limits the growth and productivity of private sector firms, with small and medium-sized enterprises experiencing the most difficulties. Many do not even bother to show up in the first place because it is just too difficult to operate in those markets.

A corrupt society and state puts an unduly negative burden on the poorest. That is why the Prime Minister has gone to such lengths to talk about what he calls the golden thread of development. The idea is that a country can try to do everything else—build the infrastructure, put the right processes in place, sort out its health and education systems—but if it does not deal with corruption, it will never enfranchise its citizens, thereby making them all better off.

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The scale and breadth of the challenge is enormous. DFID does three things to stop corruption: we work in countries to help Governments track and trace activities and funds; we build the capacity of institutions to stop behaviours; and we apply pressure on our international partners to ensure they raise their game. Most importantly—this is possibly the one respect in which I diverge from what my hon. and learned Friend said in his excellent speech—we would be wrong to inadvertently characterise the DFID budget as disappearing into some hole of corruption, for one simple reason. In the year 2013-14, DFID spent £9.791 billion—nearly £10 billion—on international development. Of that, 4% was what is known as sector support—it might be for education, for example—whereas just 1% was to general support. In other words, although my hon. and learned Friend is right to point out these problems, we are engaged in the task of making sure we do not give money to Governments who cannot, through their own procurement, be trusted to spend it.

Stephen Phillips: I understand that point, but let us consider the 4% we spend on education. When we build a school, DFID rightly secures three tenders, but they are essentially agreed between the tendering companies, and the British taxpayer ends up paying probably 10 times more than the actual cost. That form of corruption is hidden in the DFID budget.

Grant Shapps: Once again, my hon. and learned Friend is right to point out these problems, which indeed exist in many places in the world, and particularly in some of these markets. Last week, however, I was in a school in Zomba in Malawi announcing £11.6 million in DFID budget. In that case we have chosen to work with USAID, because it has an established programme. It has the contractors in place and we can be certain, as it is properly audited, that the money is being well spent. He is right to point out these issues and it is right that the Department works to clamp down on all these practices. Clearly, we must protect British taxpayers’ funds and we must, for the reasons he outlined, ensure that the worst-off people in the world—Malawi is in the world’s bottom five for income, with an average income of £179 a year—are not being subsidised, through corruption, by one of the wealthiest countries in the world, which we are fortunate enough to live in.

Jeremy Lefroy (Stafford) (Con): Does the Minister agree that some of the most effective international development work is often done by small, local, community organisations? We may be talking about building schools, working in community health centres or other such things. One problem they find is accessing the funds that DFID or others provide. We often hear people say, “We would like to work with these people but we cannot do so because the grant size is too small.” Yet these organisations are probably the least corrupt and often the most effective.

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

Let me turn to some of the things we are doing to combat these problems of corruption. First, we track and trace activities and funds. DFID works in and with developing countries to ensure that public bodies and

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

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

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

It is, however, important to continue raising our game and it goes without saying that we also take our responsibilities very seriously. All DFID offices must

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complete and regularly refresh anti-corruption and counter-fraud country strategies that highlight the critical barriers. I can provide my hon. and learned Friend with the assurance that as a result of this evening’s debate I will be taking even more interest in that matter over the coming weeks and months.

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

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

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

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

Question put and agreed to.

7.41 pm

House adjourned.