More than just a bar on a chart in New York: Why the MDGs matter

The good news is, we're reaching them.

This time of year always seems particularly hectic for the ONE Campaign and others in the movement against extreme poverty. The run-up to the annual G8 summit, which this year is hosted by David Cameron near Enniskillen in mid-June, is our equivalent of Sir Alex Ferguson’s "squeaky bum time". Within a few weeks we’ll know what we’ve won and what we’ve lost, and the implications will be felt for a long time.

Yesterday I wrote up on my office wall nine big moments for ONE in this period. The first is today, with the launch of our 2013 DATA Report. The report shows that while aid and investment from wealthier countries is critically important, perhaps its greatest value is in leveraging and supporting resources closer to home – the resources that developing countries themselves can provide - which will ensure that one day, aid from outside will be rarely needed.  

We’ll continue to push governments in Europe and beyond to stick to the commitments they’ve made. But African governments have made promises too, and in the DATA report we look at some of the big ones.  

Overall, things are getting better. The report explodes the myth that all advances against poverty and disease are thanks to China; in fact, in six of the eight MDG targets, at least half of sub-Saharan African countries are fully or partially on-track. However the performance of leading countries like Ethiopia, Malawi, Ghana, Benin and Burkina Faso is undermined by persistent underperformance by a handful of others, including the Democratic Republic of the Congo, Zimbabwe, Chad and Burundi.  

There is also a clear correlation between countries that are allocating a greater share of government spending to health, education and agriculture over the past decade and improved progress in those areas. From 2000 to 2011, Ethiopia lifted an estimated 10 million people out of extreme poverty, and over the same period the government spent nearly 45 per cent of its total budget on health, education and agriculture, a third more than the average in sub-Saharan Africa. The fact that increased resources go hand in hand with better results might be considered a statement of the obvious. But in these sceptical times, it’s helpful that a hard-headed look at the numbers demonstrates the link is strong.  

However, no African government is on course to meet the promises it has made for investment in all three of these sectors. In the next three years as the 2015 MDG deadline approaches, sub-Saharan Africa as a whole could add $243bn to its health, education and agriculture efforts. The difference this could make is clear in one country after another: for example, by meeting its health spending commitment between now and 2015, Nigeria could provide an anti-malarial bednet for every citizen, vaccinations against killer diseases for every child and life-saving treatment for everyone who is HIV positive in Nigeria – and still have billions to spare in its health budget.  

As the G8 leaders meet in Enniskillen this report should remind the world’s decision makers of the task immediately ahead. On Friday, David Cameron delivers the report of the High Level Panel he has co-chaired, on what should replace the MDGs after 2015, to the UN Secretary General in New York. It’s important of course. But it’s hard to avoid the feeling that if there were the same level of interest in the pre-2015 agenda, the world could get a lot closer to achieving the goals we already have. That’s not just a bar on a chart in New York: it means kids in school, small farmers with more chance to work their way out of poverty, people alive in 2015 who would otherwise die if we fail to act. There are less than a thousand days left until the end of 2015 – we need to make every one of them count.

In the days before the G8 summit, leaders of a wider group of countries will meet for a “Nutrition for Growth” event, dedicated to tackling the scourge of malnutrition. If this event is to succeed, it will need to drum up resources from both developed and developing countries, as well as companies, foundations and charities. ONE’s report couldn’t be clearer on this: you get out what you put in.  

But the G8’s core agenda is also hugely relevant. David Cameron has called for a “transparency revolution”. With greater transparency – whether in the extractives industries, aid, public spending, company ownership or tax information – governments and citizens in developing countries will be able to ensure that funds intended for the fight against extreme poverty do not end up in the wrong hands. If that revolution succeeds, developing countries will be able to claim more of what is rightfully theirs – and have more resources to build a better future for all, accountable to all.

All of this requires leadership. David Cameron’s government has been resolute thus far. It has built on the excellent work of its predecessors and finally met the historic 0.7 per cent GNI spending target. But this test is a different one. In the coming weeks, as the UN High Level Panel delivers its report and Cameron hosts the series of gatherings culminating in the Enniskillen summit, he has a real opportunity to be remembered as a true global leader on development. It will require determination and vision. I hope he will find both.

Adrian Lovett is the Europe Executive Director of The ONE Campaign

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.