You're currently in the eye of the storm over ring-fencing: people on the right say charity starts at home.
My argument is that charity does indeed start at home but it doesn't stop there, and the ring-fencing imposes on all of us a double duty to ensure that, for every pound that is spent on the development budget from hard-pressed taxpayers, we really get a hundred pence of value. In the long term you will never maintain support for Britain's development budget unless you can demonstrate that.

That is why we made clear three or four years ago that if we won the election we would introduce independent evaluation of British aid. We need independent evaluation reporting to parliament, not to ministers. It is quite a testing pledge -- it's the sort of thing you say in opposition then rather regret in government -- but we've made absolutely clear that that is what we are going to do. Our plans to set up an evaluation system started on the day I entered this department and are proceeding well.

The other key point about this budget is that we are not, of course, immune from the cuts in departments' administrative spending which affect all of Whitehall. We will be taking out approximately a third of all of our administrative costs, along with all other Whitehall departments, and we do this not because we want to but because we have to. The very difficult economic situation the coalition government has inherited means that it is essential.

There are really two reasons for the ring-fencing. The first is moral: it is outrageous that 4,000 people die every day from malaria, and that 75 per cent of those are children under five. Future generations will look back on us in much the same way as we look back on the slave trade, with a mixture of incredulity and astonishment, and they will say: "Wasn't it extraordinary that 235,000 people died every day of diseases that we have the power to prevent?" So there's a very strong moral argument, which frankly is enough for many of us.

But there is then the second argument, which is that it is in our national interest to prioritise international development. Paul Collier, the Oxford don, has rather changed the way we think about development. We used to think about development as being one billion of us who are developed and live in America and so forth, and five billion people who are developing. That's not correct: in fact, there are five billion of us who are developing and one billion caught at the bottom, often trapped in conflict-ridden, insecure, badly governed states. These are countries that export this weight of people, who put themselves into the hands of the modern-day equivalent of the slave trader. They cross hundreds of miles of ocean in a leaky boat in the hope of tipping up on a European shore.

These are not feckless benefit-seekers, making their way to the Haringey benefit office; they are often the brightest and the best in those societies, who are seeking a better life for themselves and their families. How better to persuade them that there's a future for them there than through building international development and support for their own country?

The countries with the bottom billion that I describe are often exporters of violence, conflict and misery, and may well be exporters of disease internationally, because they don't have the health systems that we take for granted in the developed world. So, tackling these difficulties upstream, where you are addressing the causes, rather than having to deal with the symptoms as they break out into much more significant trouble later on, is very much in our national interest.

There was an interesting paper I was reading a couple of weeks ago which argues that the cost of dealing with these things upstream is 25 per cent of the cost of dealing with them downstream. It is in our national interest; it is good value for money; and the fact is that aid, where it is spent well, achieves miracles. So there's a moral argument and a national-interest argument. There are two million girls in school in Afghanistan today who were not in school before, and wouldn't be in school now, were it not for the international aid effort. We have eradicated smallpox; we are well on the way to eradicating polio; the number of children in school increases every year.

And consider this one statistic, in answer to your first comment: Britain today educates 4.8 million primary school children in Britain. We educate five million primary school children around the developing world, at a cost of 2.5 per cent of what we spend on British children. In other words, for those people who say this development money that we spend on education should be spent in the UK -- it would deliver only one laptop per class in Britain. That is the incredible importance and value of [this department's] budget.

Some commentators like Madeleine Bunting [in a 26 July column on the Department for International Development for the Guardian] have characterised you as being in a dilemma -- on the one hand having to accept good work done by the last government and on the other making a clean break.
Yes, good point. First of all, the fact that it is common across all the political parties to support the 0.7 per cent commitment [richer countries' pledge to spend 0.7 per cent of their national income every year on international development assistance] takes development out of party politics to a large extent, which, in my view, is very welcome. I am not a particularly tribal beast, and I am absolutely determined to drive forward Britain's development aims with as much support as I can across the political spectrum.

I pay tribute to the work that [Labour's] Clare Short did -- I think she sometimes had suboptimal relations across Whitehall, but she was a brilliant development minister, and she advanced the cause of development in her time as secretary of state in this department. She and we can be very proud of what she did. I also think her successor Hilary Benn was an exceptionally good development minister. I shadowed his job for five years -- he was secretary of state when I started -- and it was an absolute nightmare . . . because he was extremely good at the job and a very nice guy, which makes opposition a hard task. And I thought that much of what Gordon Brown said [at the African Union summit] in Kampala at the weekend was extremely sensible.

On the other hand, there is a big change which I think Labour politicians have been slow to grasp, and it is this: that for the past ten years, the metric of development has been inputs -- it has been putting money on the table, like day trips to Maputo to announce half a million dollars for education in the development world, or the Gleneagles summit. Inputs are very important. But much more important are outputs and outcomes. By "output" I mean how many schools you build, how many teachers you train. And even more important than that is outcomes -- how many kids get a quality education. Just as the metric for the last ten years was inputs, the metric for the next ten years, where we are doing development in a cold climate economically, is the output -- what you achieve with that money, the results that you get.

It goes back to my point earlier that you won't maintain support for this project unless you can demonstrate the outcomes and the results. That is why we are completely changing the way in which the department focuses on this.

Let me give you an example: when I first went to Pakistan in January this year, I asked to see the last few DfID press releases. Almost all of them started: "Britain to give £20m to Pakistan . . ." Not, you know, that this is not going to happen any more -- but we are now going to focus on what the money is buying, and on the results. When I was in Peshawar [in Pakistan] recently, I had an announcement to make to a bunch of journalists there, which was that Britain would get 300,000 girls into school in what used to be called the North-West Frontier Province and is now called Khyber Pakhtunkhwa, and that we will provide three million textbooks. Not a single journalist asked me about the money -- we focused on the outputs and the outcomes throughout.

In the bilateral aid review which is at the heart of changes that we are making in this department, we are looking at the results in each and every country where DfID is involved.

We are first asking the question: "Should we be in this country?" We have already announced that we would stop aid to China and to Russia, and we will bring those programmes to an orderly conclusion as rapidly as we can. We ask whether we should be there and then we ask: "What are we getting for the taxpayer's hard-earned development pound?" And we look at the results.

Already in this department, offices are talking to each other overseas about what it costs to get a child into school, what it costs to take forward the maternal mortality agenda, and so forth. The focus will be on the results, and that's a very big change, a very big change indeed. It's a cultural change in this department, too. And in every single programme we will embed two key results criteria that we want. The first is on the fight against malaria, because, as I said to you earlier, it is outrageous that so many children are dying needlessly from this. We want to see the battle against malaria taken forward, in every programme where it is relevant. It is a commitment of this government announced by George Osborne when he was shadow chancellor that we would spend up to £500m a year in the fight against malaria. Our generations can take this fight forward and make real progress. So, in every single programme, we require to see what results we can get for what spending on malaria.

The second area, which I've spoken about a lot -- at the Carnegie Institution in Washington, at the UN Assembly in New York, and I majored on this in my first speech to Oxfam after I was appointed -- is that we will embed greater choice for women over whether and when they have children. It is outrageous that only 23 per cent of women in sub-Saharan Africa have access to contraception. Giving women choice about when and whether they have children is incredibly important in development terms as well as women's rights terms, and we will champion it everywhere we possibly can.

Some on the Labour side say there may be too much spending on malaria: £500m against a £700m health budget.
It's more -- it's £1bn, I think.

Right, but wouldn't this lead to neglect of other areas?
The point is that they are guilty of old thinking. That cannot happen because of the results focus: we will focus on what we are getting for our money. If you think about it, it is an incredibly different way of thinking about things.

Once the multilateral and bilateral reviews are over, instead of saying to the hard-pressed British taxpayer, "I'm going to spend £4bn of your hard-earned money next year on development," which leads to the desire to kick the front of the television in, I'll be able to say: "Thanks to the commitment of the British taxpayer, next year we are going to get an extra one and a half million children into school."

We are going to focus on outcomes, and I think people will not only see the value of what we are doing and the importance of what we are doing, they'll see why it matters so much, which they don't see under the input metric.

Coming to Afghanistan . . .
One other point on Madeleine Bunting. I feel that she misunderstood two key points in her <itals>Guardian<end itals> article. First of all, she said: Why are they announcing money for Afghanistan when they are supposed to be focusing on output? If you look at the statement I made in parliament, you will see there isn't a single figure in it; it's all about the outputs we'll achieve. But clearly you know if you're asked you can't be irresponsible about budgeting, so we've said there will potentially be a 40 per cent uplift. But every single thing in the statement is about outputs, so she is completely wrong about that.

The second point that she makes is: What on earth are we doing giving an airport to St Helena? I've just been speaking to the legislative assembly in St Helena on the video conference system. We're doing it because we have an obligation to the people of St Helena, and second, because it is in the interests of the British taxpayer. The only way St Helena will have a sustainable future is if we sort out their communications, for which they need an airport. The Labour Party recognised this and then they dithered. They were going to do it, then they weren't, then they were, then they weren't -- the worst example of paralysis in government, couldn't persuade the Treasury.

The coalition government has looked at the issue, worked out what our obligations are to the islanders, worked out what is in the best interests of the taxpayer, and made the decision and done it. So she is completely wrong on that front as well.

Is Lord Ashcroft behind it?
Lord Ashcroft is a sort of Lord Voldemort figure for the Labour Party -- they think he is behind everything. He's got nothing to do with the decision on St Helena.

What do you say to those who argue that DfID should be merged with the Foreign Office, among them John Major and Douglas Hurd?
David Cameron made it clear when he was a leadership candidate and when he was leader of the opposition that this was a decision that had been made -- we would keep development separate from the Foreign Office. That does not mean we should not work extremely closely together.

William Hague and I worked closely together for five years in opposition; we have talked about all the issues of importance, we agree on practically everything and we work extremely closely together. But it is sensible that development should be done by the development specialists and there is a very, very powerful argument for keeping the two departments separate -- it's part of the reason why DfID has an excellent reputation around the world.

There are two distinct roles. The example I always use is of Zimbabwe. I hope at some point that things will move in Zimbabwe, but that is a matter for a decision in the British government, with the Foreign Office in the lead. At the point where there is movement politically and development issues arise, it will be this department which will make the decisions. I hope that at the point where things move in Zimbabwe we will be able to lead an international and a Commonwealth development effort to help and assist in the rapid rehabilitation of the country. That is the division of responsibilities; we've made that absolutely clear.

I've had the huge good fortune of being able to shadow this department for five years in opposition. There's nothing to be said for opposition; you can only talk about things and you can lay your plans, but you can't actually achieve very much -- you have to be in government for that. But, having had the opportunity, we produced our green paper, which I think sets out very well the approach we take. And we have the coalition agreement.

I visited 38 countries while I was in opposition and we were able to work out what we want to do, so we've hit the ground running in the department and the lights have been burning late here as we implement our new agenda.

What are the bands on your wrists?
This is Darfur. David Cameron and I first went to Darfur in 2006 and I've worn it ever since. I intend to wear it until the appalling situation there is resolved. And this one here is from Rwanda. It says "Genocide Never Again".

On Afghanistan, what about Douglas Alexander's criticism of the uplift in spending, given the corruption? Are you confident about that money and where it's going?
Again, he is focused on the inputs not the outputs. We've set out very clearly what those outputs are, and actually the Kabul Conference communiqué focuses on the specific targets over the next six months and year which the government now needs to meet.

Part of the programme is to focus on corruption in ten departments and make progress on that. The issue is how you spend the money. We were critical in opposition of Labour ministers shelling out money to the United Nations Development Programme when they had already had reports that money was not being well spent. You've got to follow the quality of the spend: that's the results focus.

I was able to go to a village about an hour and a bit out of Kabul to see some of the work that we are doing there to build up accountability and service delivery based on the needs and the aspirations of the people who live there. We need to bolster that progress and take it forward significantly in the next year.

In terms of the other part of what you asked about Afghanistan, much of our money goes through the World Bank trust fund, which means it is only paid out on the basis of reimbursable receipts. That gives the British taxpayer some confidence that the money is being properly spent. There was that story of $1.5bn being shipped out in briefcases which led to a great frisson. I am confident that is not British money; that is probably American money paid to Afghans as part of getting trucks and lorries bringing stuff into the country. That's much more likely to be the source than anything else.

Don't the WikiLeaks leaks demonstrate that our position makes it hard to win hearts and minds?
I don't think that's clear, but we must focus, as the people responsible for Britain's development effort, on making sure the British taxpayer's money is really well spent, and that we have achieved the results that we have set down at the Kabul Conference, which are laid out in my written statement to parliament last week. You know, we've been working very closely with the cluster ministers -- the lead ministers in the different clusters of ministries in Kabul -- and we've been very impressed by their determination and commitment.

Interview conducted 27 July 2010

Read: Charity must not stop at home [2]