The Bridgetown Bill | Liam's speech to the House of Commons

Mr Speaker

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to publish proposals for increasing the on-lending of UK Special Drawing Rights via the IMF, for transferring the capital returned to the UK by the European Investment Bank to the World Bank, and for increasing the UK’s support for the African Development Bank, for the purpose of reducing debt burdens and the cost of capital and contributing to the implementation of the Paris Agreement on climate change.

I start by declaring an interest as chair of the international Parliamentary Network on the World Bank and International Monetary Fund, which brings together 2,000 parliamentarians from 140 countries to argue for the changes that I will put before the Government today.

If anything, this Bill is overdue. Eight years ago, the world came together to agree an ambitious plan to spread freedom, security and justice to every corner of the planet. The sustainable development goals agreed in New York in September 2015 offered hope, progress and a better life to billions of people. Months later, we came together again, not in New York but in Paris, to agree the climate change agreement that would help us guarantee that there would be a planet left on which to make those goals a reality.

However, the truth is that such ambitions are in deep trouble. There are just 10,000 days to go before the Paris climate agreement deadline. A perfect storm is now threatening the world’s potential to deliver on the goals that we agreed just eight years ago. In fact, seven giants now stand in the way of progress: want, hunger, disease, lost learning, conflict, debt and climate change. They are a cascading, connected set of challenges with lethal force.

Extreme poverty has risen for the first time this century, with 600 million people now forecast to be living on less than $2.15 a day by 2030. Globally, 200 million people now wake up without enough to eat, and 300 million children will need humanitarian assistance this year. On current trends, we will not meet our goal of ending hunger by 2030. That scarcity is fuelling violence. About half of the world’s extreme poor are expected to live in conflict-affected areas by 2030. In turn, those conditions are threatening our ability to make good children’s lost learning during covid, which could cost $21 trillion over the course of their lives. Poorer nations have now exhausted their reserves. In fact, debt in developing countries is now the highest it has been for 50 years, and levels are rising.

Looming deadly over all of that are the changes in our climate and the chaos of extreme weather. Across half the world and most of Africa, the seasons are simply no longer predictable. The sun which once brought life now brings death because it burns so ferociously. The rains, when they fall, fall with such force that life-giving water floods and destroys the land it once nourished. Against that murderous maelstrom, low and middle-income countries need to mobilise some $6 trillion between now and 2030 to hit their Paris climate targets.

Poor countries did not cause climate change, but the world’s poorest are somehow expected to pick up the pieces. We cannot go on like this and, as President Macron said in Paris last week, we must not go on like this. If the world fails to act—if we fail to act—all of us may fall prey to those who preach that the rules-based order is not fit for purpose. New institutions outside the World Bank, the IMF, and perhaps even the United Nations, will come forward beyond our influence, so we must change.

That is why my Bridgetown Bill calls on the Government to lead, to take the initiative and to help champion the agenda set out with such passion, force and eloquence by Prime Minister Mia Mottley. The whole House should salute her work. She has helped to galvanise the biggest shake-up of global development finance since the World Bank and IMF were created in 1944. Her Bridgetown initiative is a pragmatic collection of ideas with radical implications for the World Bank’s mission and model, the resources deployed by the IMF, and the goal that richer countries must step up to and meet.

Reforms are under way and the agenda is moving. I am grateful for the Government’s support, such as it is, but our best estimates are that the Bretton Woods institutions must at least triple the finance that they supply. That is why the UK should lead and help to champion this debate internationally. The Bill is needed because it is a matter of regret that the once-proud record of our country—once lauded as a leader in global development—is now much reduced. It is a matter of regret that the Prime Minister found time to enjoy the company of Mr Murdoch in London last week and declined to join President Macron in Paris, with 50 other leaders from around the world. It is a matter of regret that the UK is not leading the debate on green development finance, but lagging behind.

Important steps forward were taken last week in Paris. The World Bank, under its brilliant new president, Ajay Banga, committed to an expanded crisis toolkit, replete with new types of insurance to backstop development projects, and crucially, to a pause in debt repayments so that countries can focus on what matters when crisis strikes without worrying about the bill. Kristalina Georgieva, the head of the IMF, gave us some reassuring news about how we may now be on track to meet the target of sharing $100 billion in special drawing rights. However, there is still a gap in what needs to be accomplished, which is why the UK needs to rediscover the lost art of leading, and that is what this Bill proposes.

First, we should be increasing the on-lending of special drawing rights and following Japan’s lead. We have £19 billion-worth of new special drawing rights, and they are sitting there gathering dust in the exchange equalisation account. We have said that we will share 20%, but Japan said it will share 40%. If we match that target, we could supply nearly £4 billion of extra resource to the poorest countries. I have been asking Foreign Secretaries and Treasury Secretaries for two years why we are not matching the ambition of countries such as Japan and, frankly, I am yet to receive a good and coherent answer.

Secondly, we should be using some of those special drawing rights to support the work of the African Development Bank. If we lent £500 million-worth of special drawing rights, the ADB could quadruple it in new concessional lending to countries across Africa.

Thirdly, we should be helping to build a bigger World Bank. The World Bank remains the most efficient and effective way of mobilising development finance. A $20 billion increase in its capital base would unlock $200 billion in concessional lending over the course of the decade. If the UK contributed to that kind of increase, our share might be about $1 billion—$200 million a year over five years—but we could step up to that challenge. We will get £3.5 billion back from the European Investment Bank—I suppose some in this House would call that a Brexit dividend—between now and 2030. We should recycle that money into the World Bank to help it radically expand lending to some of the world’s poorest countries.

Nobody can be more eloquent in debates such as this than a hungry child, so let me conclude with the words of a young boy, a 10-year-old lad at a Primary School in rural Narok County, Kenya. I had the privilege of meeting him at his school with the hon. Member for Erewash (Maggie Throup), and I want to thank the Esmée Fairbairn Foundation, World Vision and the Coalition for Global Prosperity for helping to make that visit possible. This is what that boy had to say:

“I like coming to school because I have many friends who I play with and learn together. My teachers always teach us how to read, write and many other new things. They are good to us.”

But he also says:

“Sometimes we eat once in a day because there is no food and we don’t have enough water to drink. Despite all these challenges we still come to school to learn.”

The children of that school have the same dreams as our children. They want to be lawyers, doctors and teachers, and some—so help them—want to be politicians. Yet such is the drought, such is the poverty, and such is the desperation that many families struggle to survive. Girls as young as 11 are sent to get married, and boys are sent to work even younger. Children are not in school because they are hunting for water all day. If we do not step up and solve these challenges, there will be not just an opportunity gap for those children, but an opportunity cost for all of us. That is a price we cannot afford, so I call on His Majesty’s Government to act.

Question put and agreed to.

Ordered,

That Liam Byrne, Sarah Champion, Sir Stephen Timms, Tony Lloyd, Sir George Howarth, Clive Efford, Debbie Abrahams, Mr Virendra Sharma, Mike Amesbury and Patrick Grady present the Bill.

Liam Byrne accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 24 November, and to be printed (Bill 336).