Douglas Alexander, then international development secretary, and Ed Miliband, then climate change secretary, during their trip to India and Bangladesh in 2009. Photograph: Richard Darlington.
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Labour needs to turn up the volume on international development

Why is Labour not yet talking about responsible capitalism in a global context?

Ed Miliband doesn’t talk about international issues very often. Who can blame him? The perceived wisdom is that there are no votes in foreign affairs. But at times of crisis, opposition politicians can project gravitas and statesmanship, as Miliband did on the vote over military action in Syria. Whatever you think about the issue, that Parliamentary moment turned the political tide at the end of a difficult summer for Labour and cleared the political decks for his successful energy freeze conference speech.

Miliband was due to visit India earlier this year but cancelled his trip because of the flooding of southern England. I was with Miliband the last time he visited India, back in 2009. We visited a slum in West Bengal and flooded villages in Bangladesh. I know he "gets it". But there is a group of progressive activists in development, diplomacy and defence (dubbed "Labour 3D") who are still waiting to hear from him. Their perception is that he hasn’t spoken out since the UK hosted the G8 last year and they feel that he did so then because he had to, rather than because he wanted to. They say none of his party conference speeches have had an international section.

David Cameron also cancelled a trip that week and was forced to respond to a joint Daily Mail-UKIP offensive on the UK aid budget. Rather than defend aid, in its own terms, he made a throw-away remark at a hastily arranged press conference that turned into a hostage to fortune. By saying that "money was no object", he addressed the call for the overseas aid budget to be spent on flood victims at home in a way that turned his austerity narrative on its head. No longer was there "no alternative" and nor were we "all in this together". On the door step, voters contrasted the bedroom tax on "people like us" to a "blank cheque" for people like him.

That domestic political minefield might well be why mainstream politicians steer clear of talking about international aid and why UKIP talk it up endlessly. Last week DFID announced that they had spent 0.72% on aid, but blink and you’d have missed it. The announcement came on the day that the Telegraph described as "a good day to bury bad news".

Yet Labour has a good story to tell about achievements on the global stage, a proud record to defend and an internationalist narrative that would fit comfortably with their domestic one. Tomorrow, the shadow international development secretary, Jim Murphy, speaks at the ONE campaign. It’s another opportunity for Labour to reaffirm their commitment to locking in 0.7, something no Labour politician has done since Ed Balls suggested there was a political consensus on the overall level of aid spending back in 2012.

Labour talks a lot about "responsible capitalism" but activists sometimes feel that is an exclusively domestic agenda, rather than an international one. As well as talking about "One Nation", will Labour also talk about "One World"? It could serve the dual purpose of locking UKIP out of a political consensus on the amount of overseas aid but also give Labour a dividing line with the Tories on the objective of overseas aid.

The policy community’s big critique of Cameron’s contribution to the 2015 Post-Millennium Development Goals framework has been his blind spot on the issue of inequality. There are now more poor people living in countries that are no longer poor. This week Action Aid publish a report warning of the dangers of involving the private sector in development without ensuring that the benefits of growth are shared by the poorest. Why is Labour not yet talking about responsible capitalism in a global context?

The economic development agenda, as advanced by Justine Greening, was brought to DFID by Douglas Alexander before the financial crisis. Again, this is something that the policy community point out. One of the most successful achievements of using UK aid for economic development - access to finance via mobile money (M-Pesa) - featured in the FT and on Newsnight last week. Greening’s embrace of this agenda is an important one because it potentially opens up a wider coalition for the politics of development on the right. But the agenda also carries risks that Labour are perfectly placed to highlight. The risk that a rising economic tide will not necessarily lift all boats. Markets need to be managed if the poor are to prosper.

If there is to be a big tent consensus among the three main parties come election time, they need to start staking out both their common ground and their detailed differences. If the mainstream parties retreat on UK aid, UKIP win by default. But to quote Frankie Goes to Hollywood, when two tribes go to war, a point is all that you can score.

Richard Darlington was Special Adviser at DFID 2009-2010 and is now Head of News at IPPR - follow him on twitter: @RDarlo

Richard Darlington is Head of News at IPPR. Follow him on Twitter @RDarlo.

Photo: Getty
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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.