Power source

Ray Collins on challenging the root causes of inequality in the world

Whilst I am disappointed that the Government has failed to meet its pledge to legislate on the issue, I welcome the achievement in reaching the UN’s target of spending 0.7% of Gross National Income on aid. I hope this commitment will become an enduring political consensus.

We need however, to do far more to persuade many of the public: to make the case strongly and at every opportunity that development changes and saves lives. We also have to make the argument that development is also in Britain’s best interests. Our country would be much better off growing and trading within a strong global economy with a sustainable climate, supported governments and secure borders. 

The worldwide improvement over the last 50 years has been widespread but too many people have been left behind. Inequality is growing. Seven out of ten people live in countries where economic inequality has increased in the last 30 years. Too often, a choice is set up between the interests of richer countries and those in the developing world; but we know improving tax fairness benefits both. 

Climate change too affects us all. The World Bank and UN both outline the serious impact it is already having on achieving our international development goals. The Coalition said it would be “the greenest government ever” yet now says little on the matter. Indeed, in advance of the two major UN conferences next year on climate change and international development, it would be good to know how our government is co-ordinating its engagement on those two opportunities, the outcomes of which are clearly so dependent on one another.

The issue is less about how much we spend, and more about how we spend it. Legislation to introduce a public register of beneficial ownership is a positive step. It is really important that we increase transparency in company ownership. Best recent estimates suggest that between $21 and $32 trillion in private assets alone are held in tax havens, an estimated 25-30% from developing countries. In fact, developing countries lose $120-£160bn annually in lost tax revenue due to illicit financial flows – a sum larger than the entire global aid budget. Greater transparency in company ownership will make a huge difference in stopping money from being illicitly taken away.

Labour is committed to restructuring our existing support for developing countries, by first of all doubling the £20 million DfID currently gives to help governments build up their own tax collecting capabilities. If successful, we will also look at going further. This is development for the long-term which can pay for itself. 

But if we are to challenge the root causes of inequalities it means changes for working people too. Decent jobs under decent conditions for decent pay is also vital. Press revelations of the brutal abuse of migrant labour in the name of profit and cheaper food is truly shocking, and must stop. That’s why we will reverse the Coalition’s decision to withdraw funding from the ILO, and we will work with international partners like the ITUC to ensure that those with the will to work hard also have the power to get on.

Empowering the powerless. That’s what we can do, and under Labour that’s what DfID will stand for.

Lord Ray Collins of Highbury is Shadow DfID Minister in the House of Lords

Published 11th June 2014