Serious questions remain for Andrew Mitchell on aid to Rwanda

Why did he choose to reinstate aid to Rwanda on his last day as International Development Secretary?

A month of feverish speculation about one of Andrew Mitchell’s first actions as Chief Whip – the infamous incident at Downing Street – eventually led to his decision to resign the post.

Yet there has been much less focus on one of his final actions as Secretary of State for International Development – despite far more serious ramifications. As he prepared to leave his post in the Department for International Development, Mr Mitchell ended a freeze on aid to Rwanda. As a result, £16m was granted to the country in a move which left the UK internationally isolated.

While the move received some coverage – including by the New Statesman here, it did not receive widespread coverage.

It reversed a previous decision made by Andrew Mitchell, in common with allies in the European Union and beyond, following intensification of fighting in Eastern Congo - fighting in which the M23 rebel group played a substantial role.

It is not clear why the UK government made the decision to reinstate aid on the day Mitchell left the department, why it made the decision alone and what, if any, consultation took place with European Union countries who, increasingly, co-ordinate policies and payments with the UK government.

It is also a puzzle that any Secretary of State should make such a sensitive decision on his last day in the job, since the issue was not especially time sensitive and could have been considered, with appropriate discussion with allies, by his successor.

The decision became more sensitive still within a month. A Reuters news report said that concerns have been set out by UN experts in a report due out in November that Rwanda’s defence chief is effectively leading a rebel group against its neighbour’s Government. The M23 rebels have been fighting government forces in the Democratic Republic of Congo for much of the year, a key factor in the initial suspension of aid in July. Rwanda has strongly denied the suggestions.

Andrew Mitchell’s actions in restoring aid moved against the tide of international opinion and left Britain isolated.

The question is: why?

In a parliamentary answer last month, the government confirmed they remain “very concerned by continuing reports of Rwandan support for the M23 rebels, by the humanitarian situation, and by reports that the M23 rebels are setting up a parallel administration, and are committing human rights abuses.”

Asked by Cardiff West Labour MP Kevin Brennan why aid was restored despite those concerns, the Prime Minister said: “We should be very frank and firm with President Kagame and the Rwandan regime that we do not accept that they should be supporting militias in the Congo or elsewhere. I have raised that issue personally with the President, but I continue to believe that investing in Rwanda’s success, as one of those countries in Africa that is showing that the cycle of poverty can be broken and that conditions for its people can be improved, is something we are right to do.”

This response does not sit well with the decision to suspend aid in July.

Certainly, the Foreign Office is sensitive to continued concern on the matter. Minister Hugo Swire, speaking in a debate on the Democratic Republic of Congo on 23 October said in reponse to me pressing him on the matter:

The decision to disburse £8m of general budget support while reprogramming the remaining £8 million to targeted programmes on education and food security took account of the fact that withholding the money would impact on the very people we aim to help. By reprogramming some of the general budget support, we signalled our continuing concern about Rwanda’s actions in eastern DRC.

I am sure that the honourable gentleman was not trying to make some kind of cheap political point about the issue. The point is that we are committed to helping the poorest people in the world and we believe that there are people in Rwanda who are still deserving of our support. The decision to continue that support was taken across Government.

Andrew Mitchell’s decision to reinstate aid amended the package to Rwanda: part of the aid was “reprogrammed” to targeted programmes. This indicates worries that the funding could have been use inappropriately had a simple reinstatement of aid been made.

It is very welcome that Andrew Mitchell will be giving evidence to the House of Commons Select Committee on International Development on 8 November on his decision to reinstate aid to Rwanda. Substantial questions remain for him to answer.

Ian Lucas is Shadow Minister for Africa and the Middle East and the Labour MP for Wrexham

Andrew Mitchell photographed after his resignation as Chief Whip. Photograph: Getty Images

Ian Lucas is the Labour MP for Wrexham.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.