Frank Field MP
Your MP for Birkenhead
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A sovereign wealth fund is the way to rein in overseas aid

19 April 2017
The Times

The parties now have only days to decide on their general election manifestos. One key area will be the proposal to merge the defence and overseas aid budgets. Parties would be wise to question the wisdom of such a move.

There are two issues here, and both centre on how well taxpayers’ money is spent. Are we spending the existing defence budget wisely, given the mounting terrorist threat we face? And likewise, given sustained exposure in The Times of fraudulent spending of the aid budget, could that not be better spent?

Our security services have done extraordinarily well in protecting the public from terrorist attacks. But the question the defence establishment has to answer is whether it has got the balance right between intelligence gathering and military hardware.

My guess is that it has not, and that combining its budget with that of overseas aid would fail to address the underlying problem.

International Development is one of the few departments where budgets are growing. One area of misspending exposed by The Times is “cleaning up” at the end of the year, when huge amounts of taxpayers’ money are tipped into overseas aid projects which pay salaries to senior staff that are only eclipsed by those paid to football stars, just to ensure that the government meets its pledge to spend 0.7 per cent of GDP on aid.

A new contract must be struck with the electorate. First, the old Gladstone proposition of always spending in a year money allocated to that year must end. Second, to achieve this, a sovereign wealth fund should be established into which the international development secretary can refer monies which he or she believes could be better spent further down the line.

This would give us our first sovereign wealth fund. It would be the first one for overseas aid anywhere, and the next government should promise the electorate that it is not prepared to waste another penny of taxpayers’ money to hit the target introduced by David Cameron.

The resulting wealth fund should be designated for the Commonwealth and should be used for investment programmes that begin to build up clear job gains for local populations. Jobs will therefore begin to fight poverty in a way that aid handouts — however crucial in a crisis — can never do.

Frank Field is Labour MP for Birkenhead and chairman of the work and pensions select committee


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