On 11th November 2015 the House of Lords debated a motion from Lord Sheikh: “To ask Her Majesty’s Government what plans they have to encourage more bilateral trade between the United Kingdom and African countries.” The Bishop of Southwark, Rt Revd Christopher Chessun, spoke in the debate, raising the situation of Zimbabwe and the tax treaty between the UK and Senegal.
The Lord Bishop of Southwark: My Lords, I am grateful to the noble Lord, Lord Sheikh, for a debate so pertinent to the times in which we live. I, too, look forward to the maiden speech of the noble Lord, Lord Oates. Although my knowledge of Africa at large is somewhat limited, I am a regular visitor to Zimbabwe, with my diocese having close links to four of its five Anglican dioceses: those of Central Zimbabwe, Manicaland, Matabeleland and Masvingo. The bishops, clergy and people of those places share a good deal of the reality of their lives and faith with me, and demonstrate remarkable resilience and strong hope in the face of adversity.
Zimbabwe has achieved a fragile economic stability through the abandonment of its currency in favour of internationally traded currencies—principally, the US dollar. This is undoubtedly of great significance for commerce and trade and there are goods in the shops, but most of the population are shut out from any prosperity springing from state and private investment. Unemployment is estimated to be well over 80% of the working-age population. Most people, in consequence, have few or no choices beyond the bartering of goods and subsistence farming—in other words, working directly to consume.
Thus, when referring to an entire continent and its welfare, a good deal is to be said for the place of particularity, politics and aid, on which Her Majesty’s Government have an impressive record. Much is changing, but in many places issues around governance, rule of law and infrastructure are key to any future improvement. The wisdom of a focus on trade is telling, but even then one should ask, “On what terms?”. Economic relationships are not always equally balanced.
I will cite one example: the tax treaty between Senegal and the United Kingdom. In the ActionAid briefing in September, the charity highlighted what it believed were the unfair provisions on Senegal that, it claims, are not typical of such tax treaties. We are told that the treaty provides that,
“activities associated with a building site in Senegal conducted by a British firm will not be taxable in Senegal”.
Similarly, ActionAid claims that,
“royalties paid to the UK for radio and TV programmes broadcast in Senegal”,
are not taxable. There are other examples. In many such scenarios, one should therefore ask: who benefits?
One might ask a further question: who lobbies? Who lobbies on such tax treaties that have a bearing on trade? So I ask the Minister: is it not time for the Department for International Development to work more proactively to discourage large UK companies from avoiding tax in developing African countries? This would accord to our international trading partners the same dignity and scrutiny that Her Majesty’s Government are promoting within our own national boundaries.
The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Maude of Horsham) (Con): [extract]… It is important to stress that there is no conflict between the role of DfID in promoting home-grown, private sector-led growth in those less well developed countries, with a relentless focus on reducing poverty, and our broader aim of increasing trade and investment in countries that we support with unprecedentedly generous levels of development aid. I am grateful to the right reverend Prelate the Bishop of Southwark for his generous acknowledgement of the scale of that aid. The Conservative Party was committed in its manifesto in 2010 to be the most significant country to meet its UN commitment to spend 0.7% of GDP on aid, and the coalition Government implemented it, at a time of great financial stringency, as he will recall. We should also accept that that brings a great deal of good will in its train….