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11 June 2011

Getting loud about aid

The government should keep giving aid because it is the right thing to do.

By Jonathan Tench

Following the furore over frontpage splashes and leaked letters around the government’s decision to ringfence aid spending, a loud applause (even whooping I’m sure) was heard in Westminster on Thursday in support of the UK’s overseas aid target.

It’s not every day that over 1,400 ordinary men and women, a coalition of pensioners, students, Nuns and atheists – some who traveled from as far away as Isle of Skye – come together in London to meet MPs and tell the government that they’re doing something right.

That’s what happened when over 131 MPs (that’s a fifth of parliament, roughly) were given credit for the cross-party consensus over aid, and reminded about what else the UK should be doing for poverty on the world stage. Andrew Mitchell left the building with a thunderous round of applause for the government’s decision to face down its aid critics and stick to a plan to increase overseas aid. In case he needed a reminder of who his friends were, Harriet Harman reminded the Development Secretary that she was “on his side – and on his case”.

In a frantic afternoon of lobbying I saw MPs from opposite ends of the political spectrum, from John Redwood MP to Jeremy Corbyn MP, lobbied by their constituents over the UK’s role in tackling global poverty. Supporters from ActionAid, Oxfam, Christian Aid, Save the Children, Cafod and Tearfund thanked MPs for their support for aid and urged them to call on the UK to tackle the other key obstacles facing developing countries. Chief among them: tax dodging by multinational companies.

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ActionAid Ghana’s Adwoa Kwateng reminded the rally of the achievement of development aid spending, which in Ghana is helping spur that country towards middle income status. In fact across Africa, thanks to UK taxpayers’ money children from east to west Africa enjoy free universal primary education. The number of people on lifesaving anti-AIDS drugs has increased from 400,000 in 2003 to more than four million in 2008. Aid is working, so let’s keep it going, was the message MPs heard.

But there’s still a huge gap in funding needed to meet the UN Millennium Development Goals to halve global poverty by 2015. Without aid, we’d see little progress. But we should also look beyond aid and at what else could plug the gap. ActionAid wants to aim for a world where developing countries are less, not more, dependent on aid and start talking about “exit strategies”. Poor countries could go some way to achieving this with more money from tax.

For example, over the last few years, DfID has spent £20 million on improving Rwanda’s tax collection – resulting in tax revenue there quadrupling to over £240 million since 1997. Crucially, this helps Rwanda become less reliant on aid needed to build the schools and hospitals it desperately needs. This is aid as a hand-up, not a hand-out.

So what more needs to happen? We need concerted global action, and leadership from the UK, to call time on the tax avoidance practices that deprive developing countries of a vital stream of revenue. At this year’s G20, world leaders should match the 2009 London Summit with a clear call for global rules to make sure companies are transparent about the taxes they pay to governments. As ActionAid’s report on SAB-Miller reveals it is too easy for companies to hide their profits – and avoid taxes, through a complex web of secrecy involving tax havens. ActionAid estimates the company is dodging up to £20 million in taxes owed to developing countries.

So a good day all round. Let’s hope the MPs we met today step up to their constituents challenge: to make sure the government maintains aid spending and tackles the ease with which the rich and powerful avoid their responsibility to the world’s poor.

Jonathan Tench is Government Relations Adviser for ActionAid UK