House of Lords
International Development (Official Development Assistance Target) Bill
(9 years, 9 months ago)
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Lord Lawson of Blaby
Lord Lawson of Blaby (Con)
My Lords, I regret and apologise for the fact that I was unable to be here in the House for the Second Reading of this Liberal Democrat Private Member’s Bill. However, my regret is somewhat tempered by the fact that contributions were limited to five minutes. This is a very important subject; it is an extremely complex subject; and there is no way that justice can be done to it in five minutes. So I hope that we shall have a little bit more time today.
It is a thoroughly bad Bill. It represents the triumph of gesture politics over good government.
The Countess of Mar (CB)
My Lords, I hope that the noble Lord will not mind me interrupting, but this is Committee stage and, although the noble Lord did not come for the Second Reading, I hope that he is not going to make a Second Reading speech and that he will attend to the amendment in hand.
Lord Lawson of Blaby
I am speaking to the amendment. It is a very modest amendment: it just introduces the word “a”. The purpose of the amendment is to give the Secretary of State slightly greater flexibility which can be used in the light of changing circumstances as they evolve in the future. That is clearly desirable.
It is one of a number of amendments and I must explain to the noble Countess why it is necessary to look more broadly. A large number of amendments are down on the Marshalled List, which noble Lords will have recognised. None of them is a wrecking amendment. They are all designed to make the Bill somewhat less bad. I hope that that is a proper exercise for this Committee to be engaged in.
Noble Lords will have noticed that pretty much all the signatories to the amendments on the Marshalled List were members of the Economic Affairs Committee of this House under the excellent chairmanship of my noble friend Lord MacGregor when we produced our report in 2012 on the economic effectiveness of development aid. We produced a unanimous, all-party report based entirely on the evidence, which was overwhelming. I reassure the noble Countess that I am not going to make this speech on each of the amendments, but this is the first one and it is necessary to explain why we have put down all these different amendments to try to make the Bill slightly less bad.
The Economic Affairs Committee report had a number of findings. First, it found that the 0.7% target should not be a plank, let alone the main plank, of British aid policy. Secondly, it found that the,
“Government should therefore drop its commitment”,
to establish in law the requirement to spend 0.7% of GNI on aid. Thirdly, it found that,
“the evidence that aid makes a contribution to growth in recipient countries is inconclusive”.
But aid certainly makes a great contribution to corruption in recipient countries. This is a major problem which comes up time and again and was most recently identified in the report of the House of Commons Public Accounts Committee earlier this week.
Since this is a Liberal Democrat Bill, if the Committee will allow me, I will quote from a letter written to me by—
Lord Lawson of Blaby
We will see about the support. I am sure my noble friend is right that there different views in different parts of the Committee, but it is significant—and I repeat this since perhaps she did not hear—that the Economic Affairs Committee of this House, which took extensive evidence on this, produced a unanimous all-party report with the conclusions that I summarised a moment ago.
Lord Purvis of Tweed (LD)
I apologise for intervening on my noble friend. After five minutes he is obviously gearing up to begin his arguments. His amendment states,
“leave out first “the” and insert “a”.
That would change the wording of the Bill to:
“It is a duty of the Secretary of State to ensure that the target for official development assistance”.
Does he actually mean to delete the second “the” in that sentence rather than the first “the”. Can he clarify that for the benefit of the Committee?
Lord Lawson of Blaby
My noble friend is absolutely right. It is the second “the” that I seek to change. I am most grateful to him and I will be grateful for any further interventions that he may wish to make.
I will for his benefit read out a letter from the former Liberal Democrat mayor of Guildford. He is interesting in this context because he was for many years a senior official in the ODA, which was the predecessor of DfID, and he has maintained a continued interest since his ODA days in the aid programme in its reality. He writes:
“I would be prepared to brief anyone who needs to be convinced that there is a now a massive misuse of our aid programme—most recently in Ghana, Mozambique, Nepal, Malawi, Uganda, Rwanda—not to mention Nigeria, Kenya or Pakistan—to which must be added the transfers to the IBRD and other organisations in excess of our obligations to them”.
The corruption issue—
Lord Avebury (LD)
The noble Lord said that he was not going to make a Second Reading speech, and that is exactly what he is doing.
Lord Lawson of Blaby
I am making a speech which puts the context, which is essential for all the amendments on the Marshalled List. I am sorry that noble Lords are terrified of the argument. They realise that this is an absurd Bill. They are not prepared to listen to any arguments against it. Noble Lords will want to read the report of the Economic Affairs Committee. We have ample evidence of all the corruption there is.
Let me make two things absolutely clear. First, we are not discussing humanitarian aid. My view is that it would be good for us to do more than we do at present in humanitarian aid, but 90% of the British aid programme is so-called development aid, and that is what we are debating today in this Bill. Secondly, I am not at all opposed to the great cause of alleviating poverty in the poorest countries of the world. Indeed, I have always been strongly supportive of that and was lucky enough to be in a position to do something about aid. Some noble Lords will remember the so-called Toronto terms of 1988, which were called the Toronto terms because they were finally agreed at the G7 summit in Toronto. Their aim was to give debt relief to the poorest of the poor countries.
The Countess of Mar
The noble Lord is not listening to the Committee. Will he please address whichever “the” or “a” it is in line 2, give us a reason to change it and then sit down?
Lord Lawson of Blaby
The reason for changing the Bill in this way to make it less bad is the contents of the Bill. The contents of the Bill are highly relevant. If I may quote—
Lord Spicer (Con)
I have a question which is directly relevant to the amendment. Yesterday, I was told that we cannot ring-fence the defence budget. What is the difference between that and ring-fencing the foreign aid budget?
Lord Lawson of Blaby
That is a question for the promoters of this Bill, not for me. However, it is certainly a good question. I am not in favour of any kind of ring-fencing, whether it is aid, defence or anything else.
In defence of my own record, let me refer to the definitive IMF study published in 1999 entitled, From Toronto Terms to the HIPC Initiative: A Brief History of Debt Relief for Low-Income Countries. There it states—
Baroness Royall of Blaisdon (Lab)
This has absolutely nothing to do with the Bill. The noble Lord may have a very fine record—I would question some of it—but it has nothing to do with the Bill before us today.
Lord Lawson of Blaby
I am talking about debt relief for low-income countries. This is just prolonging the debate. I do not wish to prolong it but it is being prolonged as a result of the interventions. The IMF study states:
“1987 marked a watershed in the financing of LICs. In April, Nigel Lawson, then UK Chancellor of the Exchequer, launched the first of what proved to be a series of UK LIC debt Initiatives by arguing that Paris Club rescheduling for the LICs should be at below market rates of interest. Thus, for the first time it was proposed that reschedulings of commercially priced ECA debt should involve a reduction in the present value of the debt outstanding”.
Lord Foulkes of Cumnock (Lab)
The noble Lord, Lord Lawson, and I used to be Members of the other place. Does he recall that if he had tried this tactic there, the Speaker would have ruled him out of order?
The Lord Speaker (Baroness D'Souza)
Amendment proposed, “Page 1, line 2, leave out the second “the” and insert “a”.
Lord Butler of Brockwell (CB)
My Lords, I support the amendment, the purpose of which is to remove a fixed target—“the”—and to replace a flexible target, “a”. That is the purpose of the amendment and it seems desirable.
I contribute to this debate as a former Permanent Secretary of the Treasury in charge of public expenditure, where the noble Lords, Lord Lawson and Lord MacGregor, who have put their names to the amendment, were my bosses. However, I support the amendment not out of Treasury niggardliness but because, like other noble Lords, I believe that this country has both an economic and moral interest in promoting the growth of the developing world.
However, there are good Treasury and government reasons against hypothecation of expenditure against a rigid target. The reasons are set out in the report of the Economic Affairs Committee. However, one reason that is not in the committee’s report is that at each public expenditure review departments have to come to the Treasury to make a case for the expenditure for which they are bidding. If there is a rigid amount hypothecated in this way, it relieves departments of having to make that case for expenditure. The removal of that discipline is likely to have the result that the expenditure would not be as effective as we would all like it to be. It would be a mistake to remove that discipline from DfID’s expenditure on development aid.
This is a matter for each Government to decide. There should not be a rigid amount and, therefore, I support the amendment to substitute the second “the” with the word “a”.
Lord Howell of Guildford (Con)
My noble friend Lord Lawson made an interesting speech. It did not command the total agreement of your Lordships in every aspect but it focused on some important points. It is a small, very neat, amendment but it raises implications. I beg those who are bringing forward and supporting the Bill, with the noblest intentions, to heed some of the points that are made because it will result in a better Bill.
I also apologise for not being able to join in at Second Reading—I had other commitments—and for the fact that, although I spoke frequently on Foreign Office and Commonwealth Affairs aspects of development aid from both sides of the Dispatch Box over a period of 10 years, I have not spoken on these issues from the Back Benches. However, I have been deeply concerned with development issues over a period of 50 years, going back to the era of the Colonial Development Corporation, the original CDC, before its efforts were later wrecked, I am sorry to say; and with the founding of the first Overseas Development Institute, before we even had a department of development. I regard development as the highest priority for this country and anything which gets in its way concerns me. We ought to try to clear out the obstacles. I am proud that we have become what Sir John Major called the development hub. It is a marvellous role for this country and we should pursue it in the smartest, cleverest and most effective way we can.
It worries me that without this amendment, by making it “the” duty—the first priority, in effect—of the Secretary of State to adhere to this 0.7% target, we are distorting and damaging the development cause, which has moved into a completely new phase. I read with great care the Second Reading debate—
The Countess of Mar
I understood the noble Lord, Lord Lawson, to say that he meant to say that it was the second “the” that was being changed, not the first one. So it would still be the duty of the Secretary of State.
Lord Howell of Guildford
I appreciate what the noble Countess is saying but the point is central regardless of which “the” the noble Lord, Lord Lawson, intended to remove. This is the sensible debate we should to have.
Baroness Farrington of Ribbleton (Lab)
My Lords, I have been listening very carefully but I have yet to hear any justification for the actual amendment that is on the Marshalled List.
Lord Howell of Guildford
We are trying to have, I hope, a sensible, analytical debate in your Lordships’ House on how we can strengthen this Bill and make it more effective. I have tried to speak to the amendment and I am sorry that the noble Baroness feels that she does not want to hear what I have got to say. However, I do have some important things to say on this matter.
Baroness Farrington of Ribbleton
I understood the mover of the amendment to accept that it was not what he intended to achieve. He was corrected by the noble Lord who moved this part of the Bill. It is therefore wrong for people to speak to what they wished the amendment to say rather than what it does say.
Lord Skelmersdale (Con)
I wonder whether the noble Baroness was listening when the Lord Speaker put the question. She put it very clearly that what we are discussing is the second “the” and not the first.
Lord Howell of Guildford
I am sorry if the noble Baroness is worried about this because she has some extremely valid and important commitments to development and aid. If it was the first “the”, it would be “a duty” or “the duty”; if it is the second “the”, it is “a target” or “the target”. We could slice this very thinly. Behind this lies the consideration that I beg the Committee to examine: that is whether, given today’s context where all the important thinking about development is that overseas official aid assistance is a less important instrument for aid, it should be “the target” or “the duty”. I believe that it is wrong to urge the Secretary of State through legislation to stick to the “the’s” rather than the “a’s”.
I say that not just because the excellent committee report by my colleagues—I did not serve on that committee—gave a whole series of very substantial reasons why one should be cautious about making it “the” target, but because of some important further reasons which are developing all the time and can be analysed by looking at the extremely learned and focused thinking going on today about how to promote development and how our United Kingdom can make its maximum effort towards promoting development in the developing world. I want to give two reasons which I hope the Committee will accept are relevant to changing from an absolute priority target; that is, from “the” to “a”. I hope that noble Lords will tolerate me giving the reasons, and indeed I will be rather sad if people are not prepared even to examine these issues.
The first is this. Most economists who have studied the issue and most of the reports that are coming out today recognise that ODA is only one component of the development effort and that ODA’s relevance to development, in today’s conditions, is declining. Other instruments that require resources are very much more important in promoting development. I mention just overseas security finance, other expenditures which may not be ODA-able such as debt relief, disease research and obviously trade promotion, a range of innovative financing and impact developments. There is also an enormous new range of impact investment that requires resources, while obviously anything that can assist with lower cost green energy is helpful. Indeed, the fall in the oil price is a huge help to developing countries in a way that ODA could not possibly compete with. These are all far more effective—
The Countess of Mar
The Committee has been very patient. This is a Second Reading speech and these are arguments that should have been developed at that stage, not in Committee. May I ask the noble Lord to cut short his speech and just to attend to the amendment on the Marshalled List?
Lord Howell of Guildford
I hesitate to disagree with the noble Countess, but the Committee stage is where we should look at the details that will make a Bill better. I do not see why the noble Countess finds that so objectionable and keeps interrupting speeches. I am not sure that that is the right way in which we should proceed if we want a better Bill.
There is a school of thought called Beyond Aid, which has been looked at very closely in an excellent report in the other place on the future of UK development aid. It brings home the point that if we focus on development in this context, we have to look at other areas of ODA, which is the traditional area of budget assistance. I notice that the Japanese are planning to include aid to armed forces in their definition of ODA; I am not sure whether that is something we want to encourage at all. That is the first reason why I think that this is a good amendment and I hope that we can develop it.
The second reason derives from practical experience. For two or three years recently I was involved at the Foreign Office in dealing with what was and was not ODA, and therefore where the priorities should lie. There is no doubt in my mind that if we have a fixed percentage, it will create huge problems for aid management between the partners. My noble friend referred to the points made by the National Audit Office on that. I beg noble Lords to understand that it is not just a question of accounting methods or a difference arising from data disputes about what is or is not ODA—which are enormous—and it is not just a question of moving the goalposts, which several donor countries are interested in doing. It is a question of whether this target prevents us from prioritising the development tools that really matter. Those tools today are increasingly to be found outside ODA. I am sorry if that is a Second Reading point, but it is also a central point to this debate, and I believe that we should look at it fairly and squarely, without trying to push it aside.
We need to consider far more the spread of power to developing countries rather than just budgetary aid in cash. There are vast new networks that should be developed in order to promote development, which we are not doing. Your Lordships will not be surprised if I mention the Commonwealth network as one of them. It provides a huge flow of trusted and valued investment in a way that ODA never can. I must apologise if the following sounds like a point for Second Reading, but unfortunately DfID recently made some accidental cuts into the Commonwealth budgets, which have now been restored. I congratulate the Secretary of State for International Development on removing those cuts to the Commonwealth budgets because they have been far more helpful to development than merely dishing out cash.
I believe that this amendment will help the Bill, which otherwise could fall victim—
Lord McConnell of Glenscorrodale (Lab)
I wrote to the noble Lord when he left the Foreign Office because I had so much respect for the contribution he had made to this House. However, I find his attempt to filibuster this Bill really quite disappointing. Not only has there been a Second Reading debate where a clear majority of noble Lords spoke in favour of the Bill rather than against it, there has also been a debate on the report last year of the Economic Affairs Committee in which a clear majority of noble Lords spoke against its conclusions based on their experience and on evidence that perhaps was not heard by the committee. The noble Lord is simply filibustering this Bill, making speeches that are inappropriate, and he is losing the respect that he once had from many on this side of the Chamber.
Lord Howell of Guildford
I appreciate the contribution that the noble Lord makes, but I have not spoken against the Bill; I am speaking in favour of it. I am saying that here is a Bill full of excellent intentions but which could, if we allow it to go unamended by this kind of amendment and the amendments that we will go on to debate today, fall to the danger of being bound by the thinking of yesterday. I beg noble Lords to understand that modern thinking about development takes us away from making it the prime duty—if it is the first “the”, or the prime target, if it is the second “the”—to increase overseas development assistance or pin it to 0.7% of GNI.
Lord McConnell of Glenscorrodale
Will the noble Lord accept that the clause does not use the word “prime”, either with the first “the” or the second “the”? It does not say “prime” in the way he is quoting.
Lord Howell of Guildford
I am sorry; I am not quite sure what point the noble Lord is making. I am trying to deliver the last sentence of my contribution and I do not understand why the noble Lord feels that it is right to keep interrupting.
I am sure that your Lordships’ House is the place that can refine and improve a Bill and will not try to knock down or contain attempts to improve it, as I believe this amendment does. We have heard from the noble Lord, Lord Butler, and we have heard many wise voices from our Back Benches. We have heard from major committees in other countries, from the Dutch and German ministries and from House of Commons committees that there is a danger of too much emphasis being put on overseas development assistance as “the” target and “the” duty, which could badly distort our development priorities. Today, we need new priorities, and the Bill should reflect them and not reject them. That is why I am grateful to those noble Lords who are prepared to hear some doubts about an otherwise noble and well intentioned Bill.
Lord Anderson of Swansea (Lab)
My Lords, I want to make one observation, which alas may be deemed to be going for the man rather than the ball on the eve of a rather important rugby game. I listened to the noble Lord, Lord Lawson, proudly setting out his credentials as an advocate of aid. Had he been in his place at Second Reading, he would have heard the noble Baroness, Lady Chalker, for whom I have immense admiration, stating that, to her shame, during his time as Chancellor the proportion of our aid contribution fell to 0.28% of GNI. Perhaps that is something we should bear in mind when he sets out his credentials so proudly.
Viscount Eccles (Con)
My Lords, perhaps I could make a very brief intervention. My noble friend referred to the Colonial Development Corporation. In my time it was the Commonwealth Development Corporation—now called CDC. It may come as some surprise to your Lordships that it is still 100% owned by the taxpayer, but that is now a well kept secret. When I was fortunate enough to be its chief executive, we were much interested in income as well as in expenditure. One of the difficulties and the need for flexibility in this target is that if you are interested in income as well as expenditure, you cannot very well set the figure before the beginning of the year with any great accuracy. You need some flexibility.
That leads me on to a thought that is also a very strong reason for there being flexibility, as the noble Lord, Lord Butler, said. Life moves on. Things change very rapidly. Without the flexibility to adjust to those changes, you can be in great trouble. It has always seemed strange to me that, ever since the great days of Lord Bauer and Lord Balogh debating aid seriously in this House, in the 15 years that I have been in this House I have not yet heard a really serious debate about third world, second world or whatever world development—not one. In those days, there were serious debates on the subject and they got down into the depths of it, as indeed my noble friend Lord Howell was trying to indicate—much, I think, to the disappointment of the House.
I end by saying that I hope your Lordships will not regard the whole business of overseas development as a shut subject: “There is nothing more to say about it, we all know the answers and so we set this fixed, rigid target”. Finally, I think the structure when ODA came under a Minister of State within the Foreign Office was a much better structure than the one we have today.
Lord MacGregor of Pulham Market (Con)
My Lords, I was not able to attend Second Reading because of long-term commitments in Norfolk. The noble Lord, Lord Lipsey, who has his name on some of the amendments today, is unable to attend because of other commitments, and asked me to give his apologies.
I would like to say at the outset that there are two themes in the amendments that we have put forward. One is the issue that the noble Lord, Lord Butler, raised, which I entirely agree with, and this amendment is relevant to that. The other is to do with making sure that aid is effective and that it deals with corruption and things of that sort. Those are the two themes. If we are to have this argument about this amendment, we shall go on all day. I want to make my point on this amendment in relation to the first theme and I do not want to repeat it afterwards, so that we can go swiftly through the remainder of the amendments. But if we are not even able to do that on this amendment, I have to say that I do not think that this House is performing its function of scrutinising legislation in detail. I say to those who fear a filibuster—and there is not; we have a number of objections for a number of purposes—that I intend to make most of my arguments on this amendment so that I do not have to repeat them. But if I am not allowed to do so, I have to ask: who is preventing this Bill going forward?
We all know that there is a tight timetable. It should have been a government Bill but it is a Private Member’s Bill, which adds to the difficulties, and we all know we are coming right up to the end of the Parliament. I want to try to make the Bill more effective, as I believe this House should do, and I hope I will be allowed to develop my argument on this amendment; otherwise, I shall have to repeat it on all the other amendments. Let me make my position on that clear.
I congratulate the noble Lord, Lord Purvis of Tweed, on his very impressive speech at Second Reading—of course, I have read the whole debate—and his recognition of some of the concerns we have. I am in total agreement with him about the importance of development aid and I am proud of the contribution this Government make and the lead they give internationally. But I have some concerns about the Bill. The first set is all about the points that the noble Lord, Lord Butler, made. I hope I do not have to repeat them on the later amendments.
Lord Low of Dalston (CB)
Perhaps the noble Lord might be able to help me and in so doing, I hope, help the House. I understand very well the argument that he is making. He has put it very clearly that he is against hypothecation of any proportion of GNI for any particular purpose. However, I am not quite clear on how this amendment assists that argument. If the noble Lord objects to the hypothecation of 0.7% of GNI for development aid, it matters not whether it is “the” target or “a” target; it is still a target. This amendment would not get rid of that hypothecation.
Lord MacGregor of Pulham Market
My Lords, there are two themes to all our amendments: hypothecation is one and the other is value for money et cetera. This is not the most important amendment to deal with hypothecation but it happens to be the first. That is the point. A lot of the other amendments—which I hope we can deal with much more swiftly because we will have dealt with the general arguments—are more designed to ease the target so as to deal with problems such as, for example, having in one given year to go on spending to meet the target when it might have been better to spread that over a few years. We have other amendments on those themes to deal with that problem. This is not the most important amendment but it happens to be the one where we can make the general case.
Lord Forsyth of Drumlean (Con)
My Lords, with some trepidation I rise to speak to this amendment. Perhaps I should make it absolutely clear that I am not against the Government spending 0.7%, 0.8% or 1% of gross national income on aid. I am not opposed to aid; indeed, I have raised quite a lot of money for women in India. For me, the central argument is what we are trying to do here. I hope that I can avoid the noble Countess calling me to order in speaking to this amendment.
By the way, I do not know why there is confusion about which “the” it is. The amendment says:
“Page 1, line 2, leave out first ‘the’ and insert ‘a’”.
We are talking about “a” duty of the Secretary of State rather than “the” duty.
The Countess of Mar
I apologise to the noble Lord, but his noble friend sitting next to him said that he got the wrong “the”.
Lord Forsyth of Drumlean
Very occasionally, my noble friend gets things wrong. I thought that we should speak to the amendment on the Marshalled List. If the noble Countess wishes me to speak to the other amendment, I can make the same speech because I want to focus on what duty we are placing on the Secretary of State and what is the target.
The Countess of Mar
The noble Lord’s noble friend—the noble Lord, Lord Skelmersdale—reminded the noble Baroness, Lady Farrington, that the Lord Speaker said the second “the” when she proposed the amendment. Would the noble Lord, Lord Forsyth, like to speak to that one?
Lord Forsyth of Drumlean
In which case my noble friend got it right and that is what we will discuss. If we are to talk about the target, that is what I want to address. My understanding of the Bill and its genesis—the idea was included in our manifesto as something that we would do in the first Session of this Parliament; the timetable has slipped a little—was that we wanted to enshrine in statute the UN target of 0.7%. That is what I thought we were trying to do. The UN resolution made in 1970 in respect of the target that we are apparently signing up to said:
“In recognition of the special importance of the role which can be fulfilled only by official development assistance, a major part of financial resource transfers to the developing countries should be provided in the form of official development assistance. Each economically advanced country will progressively increase its official development assistance to the developing countries and will exert its best efforts to reach a minimum net amount of 0.7 per cent of its gross national product at market prices by the middle of the Decade”.
That would have been in 1975, so we are some 40 years behind that deadline. I point out that the target was 0.7% of “gross national product”, but the Bill before us sets a target for a percentage of gross national income. That is not the same thing.
Lord Purvis of Tweed
I apologise to the noble Lord. With that point, is he now addressing Amendment 2, which is in a separate group?
Lord Forsyth of Drumlean
No, but I will do so at length—I keep being interrupted—when we get to Amendment 2. I am simply making the point that the target set in the Bill is not the target set by the UN. On a later amendment, we can discuss the implications of that.
My second point is that if we are to put “a” duty on the Secretary of State or whether the Secretary of State has “the” duty in respect of “a” target or “the” target—
The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)
I apologise, but just point out that the second “the” would make it the duty of “a” Secretary of State.
Lord Forsyth of Drumlean
If ever I am on a charge, I will make sure my noble and learned friend is there to defend me. If we are to look at the operation of a target and what its effect would be, I draw the House’s attention to the report of the National Audit Office published on 15 January this year. I do not know how many noble Lords have read the report but I very much hope that those who feel that they wish to support the Bill in the present form will take the opportunity to do so. The report, Managing the Official Development Assistance Target, is about how practical it is to have a target and what the management problems relating to it are. I hope that the noble Countess will accept that I am speaking very closely to the amendment.
I should apologise that I did not speak at Second Reading. I was here for it, but we were limited to five minutes at Second Reading to discuss this important Bill, and I felt that I should make way to let others have a little more time.
Lord Forsyth of Drumlean
I am sorry that the noble Lord does not seem to accept my word on that.
Anyway, to the findings reached by the National Audit Office. It said:
“Assessing whether the Department has met the target is made more difficult by changes in the calculation of gross national income”.
In fact,
“the Department published 4 values for the ratio of ODA spending to gross national income, ranging from 0.67% to 0.72% depending on how gross national income is calculated”.
We need to be very careful about what we mean by a target, because even the department found itself wrestling with four different numbers.
The NAO also found:
“The government’s specification of its aid target and international reporting rules present the Department with challenges for managing its budget and spending. The requirement to hit, but not significantly exceed, aid spending equal to 0.7% of gross national income every calendar year means the Department has to hit a fairly narrow target against a background of considerable uncertainty. In addition, it has to manage its finances around a December and a March year end; use latest economic forecasts to predict the level of ODA required to meet 0.7%; monitor and forecast other departments’ ODA; and adjust its spending to reflect changing forecasts”.
In other words, the effect of “a” target or “the” target is to present the department with, in effect, having two financial years: one the calendar year and the other the financial year. That means that it would be half way through the calendar year at the start of a new financial year, trying to work out how it will meet the target.
The NAO also said:
“The Department’s spending forecasts for 2013 had weaknesses, making it more difficult for the Department to manage delivery of the ODA target”.
In addition, it said:
“To achieve the target and manage its budget the Department had to quickly add some activities to its 2013 plans but delay others set for 2014, making it more difficult to achieve value for money”.
That is an independent view of the effect of having a target. It has nothing whatever to do with whether or not you think that the Government should spend roughly 0.7% of our gross national income on development aid; it is about the effect of specifying a target.
The NAO states:
“The Department added activities at short notice in 2013 which constrained choice”.
I could go through the whole of the report—
Lord Forsyth of Drumlean
The noble Countess says no. I could go through the whole of the report strengthening the point about targets. I am picking up only headline points. For example:
“The Department added activities at short notice in 2013 which constrained choice … The activities the Department added in 2013 reduced its available budget at the start of 2014, and contributed to the delay of some of its planned activities”.
What that means is that the fact that it had been given a statutory target meant that some people in desperate need around the world had their projects cancelled because of the financial management difficulties imposed by having a target.
The NAO also found:
“The limited flexibility in the target led to the Department rescheduling payments in 2013, first to increase outturn, and then to reduce it … The Department phased its contributions to 2 key multilateral organisations to increase 2013 ODA”.
Baroness Farrington of Ribbleton
My Lords, I am now puzzled. Usually, I can follow the logic of the noble Lord, Lord Forsyth. The obvious logic, the House may feel, would have been to group together a whole lot of amendments, because that would have led to clarity about what we were discussing.
However, in my experience over the years, all departments and all Governments have set a financial limit for the year. I do not recognise the world that the noble Lord is speaking of, in which projects are not deferred because the department is coming to the end of the financial year without money. I well remember the noble Lord, Lord Heseltine, as Secretary of State, allowing youth services to spend money providing that they committed to it within a week. An officer in Lancashire had to follow me down the railway station platform so that I could sign the application. This is managing budgets. The noble Lord must accept that all budgets are fixed and that there are management difficulties at the end of the year with that. I wish that noble Lords who are confusing the issue of how the budget is set—
Lord Forsyth of Drumlean
I apologise to the noble Baroness, but I think that she is making a Second Reading speech with that intervention. I have to ask her whether she has read the report.
Lord Forsyth of Drumlean
No, she has not, because if she had read the report she would not have made that intervention. The problem arises because the target of 0.7% is over a calendar year, so from January to December it is necessary to reach 0.7%, but the department’s budget period runs from April. Therefore, it is trying to manage programmes in respect of one financial year against a target set over a different financial year. The reason for that is because the Government are trying to set an example to other countries by meeting what they believe to be the UN target, which is measured over the calendar year in order to get equivalence.
The effect of that is that the unfortunate civil servants in DfID find themselves having to organise the budget with those two financial years. Even then, it is further complicated by the fact that only 82% of that budget is within the control of the department, because another bit of the budget is spent on environmental measures and another is spent by the Foreign Office, over which it has no control, so the civil servants have to find out what is happening in those other departments. The effect is that they end up shuffling money or writing cheques to multilateral organisations to meet the target when they should be concentrating on using the available resources efficiently and effectively to do the best for people in abject poverty around the world.
I know that the noble Baroness and others think that this is some kind of exercise to try to stop the Bill. I do not wish to stop the Bill, but I wish it to operate in a way that ensures value for money for the taxpayer and that projects around the globe are properly supported, not subject to some last-minute financial juggling in order to meet a ridiculous, but no doubt well intentioned, target in the Bill.
The amendment which my noble friend Lord Lawson was trying to move—the House was very discourteous to him over that—draws attention to that. The very same point was made two years ago by the Economic Affairs Committee unanimously, with all-party support—
Lord Foulkes of Cumnock
We have already heard that on a number of occasions, and this repetition is becoming tedious.
Lord Forsyth of Drumlean
I defer to the noble Lord, who is the absolute expert, as acknowledged by everyone in the House, on tedious repetition.
That is why I believe that the House and my noble and learned friend and the noble Lord, Lord Purvis of Tweed, need to consider the amendment seriously, because I do not believe that what they intend to happen will be achieved.
Lord Ramsbotham (CB)
My Lords, I make a very brief intervention in support of the word used by my noble friend Lord Butler and the noble Viscount, Lord Eccles: flexibility. I came to support the amendment to substitute “a” for “the” because it introduces flexibility. I cite two examples. One was in the Select Committee on Soft Power, chaired so expertly by the noble Lord, Lord Howell. One of our recommendations was that consideration should be given to the lack of tie-up between DfID, the Foreign Office and the Ministry of Defence in Afghanistan, and the need to pool cross-government contributions to aid. Secondly, to pick up a point made by the noble Lord, Lord MacGregor, in relation to the Armed Forces, something that always worried me is the overcharging of overseas cadets coming to places such as Sandhurst, which forces them to go elsewhere. If we allowed some aid to subsidise their attendance here, it might encourage them on to our side in future, with future benefits for this country.
Lord Hamilton of Epsom (Con)
Will the noble Lord comment on whether it might be better if some aid projects were managed by the military? Would that not cut down on corruption?
Lord Ramsbotham
All I would say is that if we are talking about 0.7%, it should include every contribution made by every ministry.
The Countess of Mar
My Lords, before we go any further, can I just get something clear? Are we talking about “a” duty of “a” Secretary of State for “a” target, because we seem to be debating all three at the moment, or just one of those “a”s, and if so, which one? Can we have that made absolutely clear?
The Chairman of Committees (Lord Sewel)
My Lords, I recognise that it is unusual for the Chair to make an intervention in Committee like this, but I understand that clarification is needed. The advice that I have received is that the amendment before us should read:
“Page 1, line 2, leave out the third “the” and insert “a””.
I hope that is of help to the Committee.
Lord Fowler (Con)
My Lords, perhaps I may make a short intervention arising from the comments of my noble friend Lord Forsyth and that of the noble Lord, Lord Lawson, when he said that we are not talking in this debate about humanitarian aid. It is of course true that only part of the budget goes to humanitarian aid, but it is a vital part and we cannot just turn our backs upon it. My noble friend Lord Forsyth talked about the National Audit Office report, which I have read, and last-minute financial juggling, but I think that is entirely unfair where DfID is concerned, and I will tell him why.
The majority of that money went to the Global Fund to Fight AIDS, Tuberculosis and Malaria. It was entirely vital that it went to that fund, because around the world there are 3.5 million deaths a year, so I hope at any rate that all those who have spoken today, including those in favour of this amendment, would agree that that was worthwhile expenditure. The idea that—
Lord Fowler
Let me go on, if I may, because we have just heard the noble Lord. If he will just be patient, then I will let him in. The noble Lord said that this was rushed out in March. To my knowledge, and as far as the Global Fund contribution was concerned, it was anything but rushed out in March. It was in fact previewed and promised by the previous Secretary of State. It has been on the books now for the last two years. The fact that it came out in March does not mean that the Secretary of State had a sudden rush of blood to the head and said, “Right, I’m going to give half a billion pounds to the Global Fund”; it meant that there was a process of careful consideration. It concerns me that that position should have been misstated. That is the reality of much of the aid money that we are talking about. Apart from development, which my noble friend Lord Howell spoke about, we are also talking about these issues.
Lord Forsyth of Drumlean
I am most grateful to my noble friend. When I used the phrase “the money had been rushed out”, I was not quoting directly. My source was Margaret Hodge, who is chairman of the Public Accounts Committee. She concluded that it appeared that cash has been “rushed out” to meet the 0.7% target, and added:
“This raises questions about value for money which Parliament will be keen to look into”.
Lord Fowler
I am grateful, but not for the first time I think that Margaret Hodge is wrong. When my noble friend talks about last-minute financial juggling, he is overstating the case very substantially indeed. The reality that lies below what we have heard at the moment is that we are also talking about underresourced hospitals where drugs run out and patients die, and around the world where births are taking place on concrete floors. I know that my noble friend agrees with the point that I have just made.
Lord Forsyth of Drumlean
When my noble friend says that I am wrong to say that it was rushed out, does he acknowledge that 40% of the budget was spent in November and December 2013, December being the year end? Surely that points to a justification for what I said.
Lord Fowler
No, I do not think it does and for the reasons I have just stated. Untypically, I do not think that my noble friend is listening to my argument, because this has been in preparation for at least two years, to my knowledge. That cannot be denied. My noble friend talked about people not reading the reports, but he should read some of the statements made by previous Secretaries of State. It is totally unfair to talk about DfID financially juggling the figures. That is not right; it is responding to a need from around the world because there is a need for consistency. If you are going to develop a vaccine, for example, you need consistency in the money and support that come forward.
I will make one last point. My noble friend started his speech by saying disparagingly that this is a Liberal Democrat measure. It is a Liberal Democrat measure but it is one that is, and has been, supported by all three parties. We have a bipartisan position here. I say to my noble friends who have spoken in favour of this amendment that while that is obviously their view, which I respect—I respect my noble friend Lord MacGregor, for example, and my other colleagues—they are the minority in this debate. The majority in the other place overwhelmingly supported this provision. It would be my guess and estimate that if this ever came to a vote in this House on the principle, it would be supported here overwhelmingly in just the same way.
Lord Hamilton of Epsom
Can my noble friend comment on the point made by the noble Lord, Lord Butler, about hypothecation? Is he quite comfortable about slabs of government expenditure being hypothecated so that there is no flexibility at all on behalf of the Treasury?
Lord Fowler
I am, in fact, comfortable in this position, because I think that we have a particular duty as far as the developing world is concerned. I would not be happy to have hypothecation in every government measure, but here we have a particular responsibility. There is a lack of imagination about what is happening out there in Africa and in the rest of the world. That is the point. If we have a duty, it is a duty in this respect. I am therefore entirely happy with hypothecation in this respect.
Lord Purvis of Tweed
My Lords, as the sponsor, I will attempt to sum up this short debate. Perhaps the House will offer me a degree of forbearance as I find myself in the rather difficult position of having to respond to almost a second Second Reading debate, as well as to an amendment that was not moved by the mover but proposed by another noble Lord, an amendment which was then changed by the Chairman of Committees as we were debating it. To respond directly to my noble friend Lord MacGregor, his contribution, I think, got to the core of what this short debate is about. If this is about the essence of the Bill, let us consider whether a “the” should be replaced by an “a” and get to the core of it. The noble Lord, Lord Butler, and others may have been more accurately covering other amendments in other groups, but I will try to address them briefly with this point.
The United Kingdom has an international obligation which it has undertaken to meet over many decades; that is, the 1970 target. I do not consider it a ridiculous target, as my noble friend Lord Forsyth described it; I consider it a target that has been undertaken by the United Kingdom for many decades and under many previous Governments.
Lord Forsyth of Drumlean
The noble Lord referred to me but he has misrepresented what I said. I did not say that the UN target was ridiculous. I said that the target in the Bill is not the UN target because the UN target is related to GDP and not to gross national income. If that sounds like a ridiculous point—which we can deal with later in our consideration of the Bill—I would offer an example. Luxembourg might be held to have met the target on the basis of GNI, but on the basis of GDP it would have met 50% of the target.
Lord Purvis of Tweed
Yes; and indeed that seems a very tempting preview of the debate on the next amendment. My noble friend Lord Forsyth will no doubt make that point then.
The United Kingdom has given an undertaking to meet the 0.7% target. In 1970, that related to gross national product; now, it relates to gross national income. The target has been further developed by the OECD Development Assistance Committee, which recognises that this is indeed the international standard to meet. It is therefore a mature, settled and respected target in an undertaking which the United Kingdom has given over many decades to meet. It is with considerable pride that we have met it.
Lord Purvis of Tweed
I will give way to my noble friend in just a moment. The questions about the undertaking we have given are, first, whether it is appropriate to have an annual target; and, secondly, how we can best monitor whether the spend within that budget is being delivered appropriately. These were thoroughly rehearsed in the Second Reading debate. They have been, and continue to be, analysed by the Commons International Development Committee. They have been reviewed by the OECD Development Assistance Committee in its peer review report in 2014, which I quoted at Second Reading. Furthermore, as my noble friend Lord Fowler has indicated, the National Audit Office report has been thoroughly investigating this. I will come to my noble friend Lord MacGregor’s point in a moment after giving way to my noble friend Lord Trimble.
Lord Trimble
I am not going to quibble with 0.7%, nor with the idea of the target. However, will the noble Lord address the question about putting a statutory target down and the problems that then arise from the inflexibility of that? The target itself, if you just think of the concept of a target, contains the notion of flexibility. That is the issue that is at stake here: putting down a target that is inflexible and the consequences that follow from that.
Lord Purvis of Tweed
I not only respect my noble friend but acknowledge the point that he makes. However, I will refer him to the Hansard of the Second Reading debate; I feel that I covered his point in detail there. I refer him not only to my speech but to that of his noble friend Lady Chalker of Wallasey. She said that,
“it is critical that people know from year to year how they are going to be able to finance projects. One of our great nightmares was that we never knew how much we were going to have”.—[Official Report, 23/1/15; col. 1523.]
Not only does the UK’s acceptance of the obligation mean that we have continual year planning; now that we have met the target, the question is its effective delivery, not concern about the level of support for the international aid budget in future. Because we have this international obligation and undertaking as a proportion of GNI, we have worked in recent years to ensure that our processes can be as robust as possible and that meeting the target can also be done in a sustainable way, with predictability for those who we need to provide support for, and with proper public and parliamentary scrutiny. Since my noble friend’s report in 2012, a considerable level of work has been done, not only on parliamentary scrutiny but on the functioning of the Independent Commission for Aid Impact, now with over 40 reports, some of them critical of the department but many of them constructive. That is how we would expect an independent commission to carry out this role.
I do not think that anyone who supports the Bill would query at any stage that it is a complex budget in a circumstance where many areas of its delivery are the worst scenarios that you could possibly imagine for delivering a budget—war zones, areas where Governments are not functioning and so on. However, the NAO report, the OECD peer review, the Commons committee and the Independent Commission for Aid Impact all now have a serious body of work, done since 2012, that I genuinely think addresses the main considerations of my noble friends’ reports.
The question of whether it should be “a” or “the” in the first element is for the mover of the amended amendment to address. However, the substantive points made by my noble friends Lord Howell and Lord MacGregor have been addressed since the report. That is why, while of course we would value his contributions later in the debate, if we take him at his word that these assurances and the work that has been done since his report have been taken into consideration, I respectfully ask him not to press his amendments, and I ask my noble friend Lord Lawson not to press his.
Lord Lawson of Blaby
My Lords, we have had an interesting debate so far. I would like to reply to some of the points that have been made, not least by my noble friend Lord Purvis, who has just sat down. First, though, I thank the noble Lord the Lord Chairman of Committees for his very helpful clarification of precisely what it is that we are debating in this amendment. The question of the amendment goes deeper, though, because what it is about—some of the later amendments are also about this—is introducing a degree of flexibility into the Bill. The reasons why that is necessary have been set out very well by the noble Lord, Lord Butler, and my noble friend Lord MacGregor.
It is quite impossible to debate this amendment without explaining why it is that, for a good Government, a degree of flexibility is necessary. The fact is that the 0.7% target is an anachronism. As my noble friend Lord Purvis mentioned, it was set in 1970, but the world has changed dramatically since then. What has changed it most is, in a word, globalisation: that is to say, the huge increase in both trade flows, which are the most important aspects for the developing world—I am strongly in favour of reducing barriers to imports from the developing world; that is what it needs and that is what we should do for it—and the huge increase in private capital flows, which my noble friend Lord Howell mentioned, and which are vital. Today, totally unlike the case in 1970, ODA is only 1/10th of the total amount of capital flows to the developing world. As the distinguished development economist Paul Collier said in evidence to us, aid is now “almost a sideshow”, although as my noble friend Lord Forsyth and others, and indeed our report, have pointed out, it has a much bigger effect on the extent of corruption in the developing world, for which the evidence is incontrovertible. One noble Lord has already mentioned the report by the House of Commons Public Accounts Committee on the so-called Private Infrastructure Development Group, which was produced this week in only the latest example.
There is a more fundamental problem about the 0.7% target, and it is development aid. I should respond to the very impassioned contribution from my noble friend Lord Fowler: this is not about humanitarian aid. As I said in my opening remarks, I believe that the case for increasing humanitarian aid is strong. This is about so-called development aid, aid for economic development, which is 90% of the DfID budget while humanitarian aid is a tiny part. Humanitarian aid needs the support of Governments; it is not exclusively for them, as charities and churches do good work in this area, but it is still a very strong responsibility of government, whereas capital flows, as my noble friend Lord Howell said, are now overwhelmingly private capital flows. The 0.7% target is therefore completely obsolete. That is no doubt why no other major country has the slightest intention of observing it. The G7, which consists of the major economies of the world—
The Countess of Mar
My Lords, I am afraid the noble Lord is slipping into Second Reading mode again. Would he kindly address the amendment?
Lord Lawson of Blaby
This is the necessary background to the amendment. I repeat what my noble friend Lord MacGregor said: it is not my intention to go over this in the course of subsequent amendments. If it is felt better to take more time in subsequent amendments—if that is the will of the House—I will do so, but that is not my intention. I think it is more coherent, a more efficient use of time and more helpful to the House if the argument is made on this, the first amendment that we are discussing today.
As I say, I know that the noble Countess obviously does not want to hear this, but I am afraid that it is a fact that in the G7 countries, the amount of aid that the other six give ranges from 0.4% in the case of France and Germany to 0.2% in the case of Italy and the United States. None of them has the slightest intention of increasing that, and certainly they have no intention of making it legally binding.
Lord McConnell of Glenscorrodale
Will the noble Lord accept that the noble Lord who is proposing the Bill showed some respect to the House in summing up the debate very briefly and not repeating arguments that had been made at an earlier stage—instead referring noble Lords to read those arguments from the report of the Second Reading and other debates. Will he please show the same respect?
Lord Lawson of Blaby
I was not repeating myself in the slightest. I was making a number of additional points which are highly relevant to the Bill, to this amendment and to subsequent amendments. However, I will draw to a conclusion to allow other noble Lords to take part, if they wish to, in the debate.
The question is, which is more important: good intentions or good outcomes? I know that those who are keen on the Bill as it stands have the best intentions—I do not deny that for a moment. I know that people who support it are certainly well intentioned. Alas, however, as Members of one of the two Houses of Parliament, we have to consider not what the intentions are—I think we are all well intentioned; most of us have good intentions, whatever side of the House we are on—but what are the likely outcomes. If the outcomes are damaging—which they are in the Bill as it stands—the fact that they are well intentioned is no help at all.
In conclusion, we are very privileged to have the noble and right reverend Lord, the former Archbishop of Canterbury, among us. He knows what the road to hell is paved with.
It is the custom in this House for there to be few Divisions on amendments—they can come at a later stage, when we come to Report. At this stage, I beg leave to withdraw the amendment.
Lord Tugendhat
Lord Tugendhat (Con)
My Lords, this amendment stands in my name and in the names of my noble friend Lord Forsyth and the noble Lord, Lord Lipsey. It would replace the words “national income” with the words “domestic product” on page 1, line 4 of the Bill. I hope that, in view of the exchanges in the previous debate, we can all agree that that is what we are debating on this occasion.
Before coming to the substance of the amendment, I want to make it absolutely clear that, as I said in the Second Reading debate, I support the British aid budget, I am quite prepared to see it increased further in the light of economic circumstances, and I admire the achievements of DfID, which, as the result of our examination in the Economic Affairs Committee, I recognise is held in high esteem across the world. I hope that there is no misunderstanding on that point and that noble Lords do not mistake criticisms of the Bill as it stands as being criticisms of the aid project. It is very important to clarify that.
My objection is to a legally enforceable annual expenditure target and my views on that subject are very close to those enunciated by the noble Lord, Lord Butler of Brockwell, speaking from his great experience. I not only oppose a legally enforceable limit in respect of the aid budget but would do so in respect of any budget, because I believe that it will lead to the misallocation of resources and distortions of various kinds. If it is adopted in its present form for the aid budget, that will in due course bring the aid budget into disrepute.
However, as the Government want to go down this road, and as the development community very much supports that, it is our task in this House, as far as possible, to save them from the consequences of that folly by improving the Bill. This amendment would go a small way—not more than that—towards doing that. I say that because the Bill confers on the aid budget, as others have pointed out, a unique privilege: it gives it a guaranteed share of national wealth, something that is denied to the National Health Service, education, defence, and other very important programmes. Therefore we must be sure, both for that reason and because of the legal obligation of the expenditure target, that the expenditure can be measured in the most precise and accurate way. I hope that no one would disagree with that.
The Bill defines the 0.7% in terms of a percentage of GNI and defines the period as a calendar year. Of course, as the House very well knows, the vast bulk of UK public expenditures are recorded as a percentage of GDP and on the basis of the financial year. This amendment would have the effect of enabling aid expenditure to be measured and recorded on the same basis as the overwhelming bulk of the budget. This is not a question of quantity—I am advised that the change from GNI to GDP would make virtually no difference on that score—but it would greatly increase transparency, which is something that in general the House approves of, and it might also avoid problems in future. Although there is not very much difference, as I understand it, between GNI and GDP at present, one has only to look at what happens with cost of living indices, whereby the differences between RPI and CPI can fluctuate quite markedly and lead to a great deal of misunderstanding. In that sphere, pensions, index-linked bonds and so on are measured by RPI, while other things are measured by CPI—and distortions arise. I suspect that distortions would also arise in relation to the difference between GNI and GDP.
If, as I suspect, this amendment is rejected, I think that the proposer of the Bill and the Minister—I emphasise “and the Minister”—should answer three questions. First, why use GNI? Presumably, it is being used for international reasons, but can we have an explanation as to precisely why it is GNI? Secondly, how will the aid expenditure figures and those relating to other programmes be reconciled? It is very important that the Government answer that question at the Committee stage. Thirdly, have the Government sought advice from the OBR or the NAO on this matter, and what did they say?
Let me just repeat the point about the Minister. Noble Lords will remember that about a year ago we debated the European Union (Referendum) Bill. I found myself at that time closer to the Liberal Democrat party and the Labour Party than to my own party. My noble friend Lord Dobbs, who proposed the Private Member’s Bill, summed up at the end of each amendment debate but the Minister on the Front Bench also intervened because of the implications for government policy. I have asked three absolutely relevant and explicit questions, which lie not in the province of my noble friend who proposes the Bill but in the province of the Government. I very much hope that the Minister will be able to answer the questions that I have put forward. I beg to move.
Lord Forsyth of Drumlean
My Lords, I rise to support my noble friend’s amendment. It may seem a nitpicking point to distinguish between GDP and GNI—the noble Baroness on the Front Bench says, “Yes, it is”. But I suspect that that is because she does not know the difference between them, because if she did know the difference she would know that it was not a nitpicking point.
Lord Forsyth of Drumlean
Well, I have been on the receiving end of a certain amount of abuse, and this is a very important point. As my noble friend has indicated, the difference between GDP and GNI for the United Kingdom is limited. But in support of the United Kingdom being in the van and being ahead of virtually every other OECD country in committing itself to a target of 0.7% of GNI, the proponents of that policy have argued that other countries—I think that there are five—have set an example. One of those countries is Luxembourg. The difference between GDP and GNI is that, for a country such as Luxembourg, which appears to meet the target very generously, the GNI is considerably higher than the GDP, because the GNI includes revenues that are repatriated from the country to outside. So if you set a target that is based on GNI, it gives anywhere that is a tax haven a huge advantage in meeting the target as opposed to countries that are not—and I thought that Members opposite were rather against tax havens and making life easier for tax havens. I cannot give the exact figure, but I would estimate that, if we take into account the moneys going through Luxembourg through multinational companies and going back to the United States and elsewhere, instead of more than meeting the target, I suspect that it is less than halfway towards it. This is not a nitpicking point. It is an important point. It is important because, as I said earlier—I am not going to repeat the argument—when the target was originally set by the UN, it was for GDP.
Lord Howell of Guildford
This is a sensible change proposed by my noble friend Lord Tugendhat. It would obviously put the Bill, which we want to improve and strengthen, on to a less wobbly basis. There is an enormous debate going on in the economic world and, indeed, in the international scene generally about the nature of GNI. Colleagues will recall, certainly in the last year, or less than a year ago, that the British suddenly found that their budget contribution to the EU budget jumped by the most enormous amount. That was related directly back to redefinitions of our national wealth, product and income. The ONS redefined our national GNI as including various illegal activities and grey and black market activities—and I think, although I may be corrected, on prostitution as well. It made some assessments, which vastly increased our national figure. Instantly we were charged an extra several hundred million—was it even a billion?—for the EU budget. This is dangerous ground. It would be enormously sensible for those who want to see this Bill in place and have an effect to get a better, less shaky basis for it.
There is of course the additional point that if the 0.7% figure rose as a result of GNI rising by these slightly controversial means—I do not think this point has found favour in the House but I beg your Lordships to try to look at it—it would take resources away and put them into ODA, which, as we recognise, is a decreasingly relevant part of the development driver process. That would deprive areas where we want to see development, such as the technology to reduce energy costs, which are crucifying developing countries. We want money to be spent there and on all sorts of technological improvements, which will bring development. We want money to go into defining the law on property ownership, which Hernando de Soto has said is the key consideration in enabling developing societies to develop.
These are the things for which we feel quite passionate. To see money diverted into areas that are not promoting development, even if they add to the aid budget, is not good for this country, our pride and our development power, and it is taking the wrong turning. This is a small but sensible amendment, which I hope will be accepted without demur.
Lord Cormack (Con)
My Lords, I sat through virtually the whole of the Second Reading debate, as my noble friend Lord Purvis knows. He also knows why I was not able to take part in that debate. It was a very good-humoured debate, which saw this House very much at its best. I regret that the hallmarks of our debates—courteous good humour and willingness to listen to the other point of view—have not been the defining characteristic of this morning’s debate. That is a great pity.
The fact that we can all accept a principle as being wholly desirable and good does not mean that we all have to accept that every particular is also wholly desirable and good. My noble friend Lord Tugendhat moved this amendment with precision and brevity, clarity and force. He made an extremely powerful argument. I hope it is an argument that will be recognised as such by my noble friend Lord Purvis and that he will feel that an amendment of this sort—although I sincerely hope there will be no pressing to a Division today—would not in any sense invalidate or undermine his admirable Bill, but would strengthen it in the ways that have been indicated. I hope that the rest of today’s debate can be conducted in a way that is more reflective of the good humour and good temperament of your Lordships’ House than the debate on the first amendment was.
Lord Hamilton of Epsom
I very much support my noble friend Lord Tugendhat’s amendment. In the spirit of my noble friend Lord Cormack, I certainly do not intend to speak for very long.
The first point that my noble friend Lord Tugendhat made was one of transparency. He made the point, quite rightly, that we measure everything else in terms of GDP rather than GNI. If we want to take the public with us it seems to me to be very sensible to use GDP rather than GNI. Let us be honest: the reason why people support this Bill with the enthusiasm they do is because they want to be seen to be generous with other people’s money. We all like people to be generous with their own money; it is slightly different when they are being generous with other people’s money. As that is the purpose of the Bill, we might as well make it as clear as we possibly can by using GDP rather than GNI.
My noble friend Lord Tugendhat also made the point that the difference between GNI and GDP is very small at the moment. In that case, this is a unique and wonderful opportunity to use GDP instead of GNI before the two indices start to part from each other. We have no idea what might happen in the future; the economy of this country may change and it may well be that we start getting less money if GNI starts to increase above GDP.
If we really want to nail this down, I say to my noble friend the Minister that this is a wonderful opportunity to embrace the amendment and get it on GDP, which everybody understands. That also means that we then guarantee that the 0.7% figure means something in the future, if that is what the Bill and the House desire.
The Parliamentary Under-Secretary of State, Department for International Development (Baroness Northover) (LD)
My Lords, I intervene briefly at the invitation of my noble friend Lord Forsyth. Amendment 2, proposed by the noble Lords, Lord Tugendhat, Lord Lipsey and Lord Forsyth, seeks to change the 0.7% target from GNI to GDP. If my noble friend Lord Forsyth was addressing me in seeking a reaction from the Front Bench—he did say “she”—he must have misheard. I made no comment. I would not have dreamt of doing so as a comment on what he was saying, even though I have found that reading economics textbooks to my dyslexic son has helped to inform me.
Lord Forsyth of Drumlean
I apologise if my noble friend thought I was referring to her. I was referring to the Opposition.
Baroness Northover
Being somewhat short, I could not see who was over there and who my noble friend might have been addressing.
Obviously I take very seriously what my noble friends have put forward. I emphasise that the commitment to invest 0.7% of GNI in ODA is an international commitment that is reported to and monitored by the Development Assistance Committee of the OECD. The UK reports on this basis to the DAC, allowing comparison across donors. To aim at an alternative ODA target for the United Kingdom based on GDP would not only lead to multiple definitions, but create confusion. It would also undermine our intention to fulfil our international commitments. This is an international target; it would reduce our credibility and moral weight that our commitment to the 0.7% target carries with our international partners—I have encountered widespread support for the move to the 0.7% target that we have taken—which would limit our ability to press other donors to meet their obligations, for example, to the Global Fund, which my noble friend Lord Fowler mentioned. This would not be helpful or in the spirit of our commitment to the world’s poorest. Gross national income became the preferred measure of measuring a country’s wealth in 1993.
Lord Forsyth of Drumlean
I think my noble friend would acknowledge that the target originally set by the UN was GDP. This is a genuine question: could she explain to the House when and why it was changed from GDP to GNI on an international basis and why it is necessary for us to adopt GNI, given the implications that that would have in future, as my noble friend pointed out, of possibly less money being available and less certainty?
Baroness Northover
Certainly. GNI became the preferred method of measuring a country’s wealth. As I said, we are meeting an international target.
Lord Cormack
I do not dispute the truth of what my noble friend said, but could she tell us when and why this change came about?
Baroness Northover
I think I just said when this change occurred. I emphasise too that the budget is subject to annual scrutiny, as my noble friend Lord Purvis said in the debate on the previous amendment.
Lord Purvis of Tweed
My Lords, I regret that I cannot accept my noble friend Lord Tugendhat’s amendment. Let me explain why. In doing so, perhaps I may correct my noble friend Lord Forsyth and address specifically the point from my noble friend Lord Cormack.
Paragraph 43 of UN Resolution 2626 from 1970 is the target that we have been debating consistently in this country. Indeed, it is the foundation of the Bill. I shall quote from it and perhaps that will answer the question. It states that each economically advanced country,
“will exert its best efforts to reach a minimum net amount of 0.7 per cent of its gross national product at market prices by the middle of the Decade”.
It does not say “gross domestic product”. As the Minister clarified, the UN system of national accounts adopted by the United Kingdom in 1993, during which I think my noble friend Lord Forsyth was a Minister in the Government, had GNI as the successor of GNP as the accepted international comparator of national economic activity. He will know, as he indicated to the Opposition Front Bench, the difference between GDP, which includes foreign economic activity within the territorial area of Britain but excludes those operations owned by Britain externally, and GNI, which includes those and has therefore been considered to be the standard economic comparator. To address the point raised by the noble Lord, Lord Tugendhat, that was adopted by the United Kingdom in 1995—I think that my noble friend was in the Cabinet at that point—for European Union payments and as a standard for European Union classifications. I think that he may well have been commenting on that late last year.
As that is now the adopted framework within the OECD and a successor to the obligation that we made in 1970, any change to the Bill would be a retrograde step, as the Minister explained, because under our obligations in the OECD we would still have to report on GNI anyway.
With that explanation, and having answered the noble Lord’s specific point, I hope that he will withdraw his amendment.
Lord Forsyth of Drumlean
What are we doing here? Are we passing law that affects what the United Kingdom will do in terms of its contribution to overseas aid, making that as stable a target as possible, or are we using legislation to make some declaratory statement about what we are doing internationally? It is very important to recognise the difference between the two. As the mover of this Bill, is my noble friend really saying that he prefers a measure that enables countries such as Luxembourg to appear to meet the target, whereas if they were subject to GDP they would have to contribute almost twice as much? Is he really saying that he is happy with that situation?
Lord Purvis of Tweed
We are making law and debating an amendment that proposes a change to the Bill. I have explained why that would not be appropriate and why we operate under our system of national accounts, which we adopted 20 years ago when my noble friend was a Cabinet Minister. On that basis, I invite my noble friend to withdraw his amendment.
Lord Tugendhat
My Lords, I thank those noble Lords who have participated in the debate. I also thank the proposer, who, in so far as he is responsible for the Bill, sought to meet the points that I raised. However, I have to confess that I am slightly disappointed with the Minister’s reply, and I hope very much that the Government will be able to put up a better performance on Report.
First, the noble Baroness explained, as did my noble friend who introduced the Bill, the external considerations that have led to the adoption of GNI, and I understand those. However, I raised—I think talking about British budgetary procedures is quite legitimate in the British Parliament—the difficulties that will be caused by measuring this expenditure against other public expenditure programmes. That is something that the Government ought to be very much concerned with. Of course, they ought to be concerned with international considerations, but they ought also to be concerned with domestic budgetary considerations. I raised specific questions in relation to those, which the Minister simply did not answer. She did not address the points at all. I also asked whether the Office for Budget Responsibility and the NAO had been asked for their opinions and what they had said. Again, answer came there none.
As I made quite clear when I introduced the amendment, I support the aid programme and its objectives. I have no problem with its increase in relation to national circumstances. However, it will be very dangerous if the aid budget is put into a uniquely privileged position. It is already having privileges lavished on it by a guaranteed share of the national income. That is one big privilege that I think will lead to it coming into disrepute. Now, the Minister compounds the problem by completely failing to take any account of the questions that I raised about the interaction between this budget and the domestic budget.
I very much hope that the Government will be able to put on a better show on Report and, for the sake of clarity, answer the specific questions that I have raised. First, what steps are they taking to reconcile these different measurements in terms of the domestic and international considerations? Secondly, have they consulted the NAO and the OBR, which they certainly should have done? If they have, what did the NAO and the OBR say? If they have not, why not?
In the—I hope not forlorn—hope that the Government will come back with a better answer on Report, I currently beg leave to withdraw the amendment.
Lord Forsyth of Drumlean
Lord Forsyth of Drumlean
My Lords, the amendment seeks to leave out the provision for meeting the aid target annually and replace it with “five year period”. Its purpose is to try to get over some of the difficulties caused by having a fixed target that has to be met within a calendar year with, as I explained earlier, a Government who are budgeting on the basis of a financial year, and to allow some flexibility. I am sorry that my noble friend Lord Fowler, who I know feels passionately about these matters, is not in his place—he has arrived. In his excellent speech he made a number of points that relate directly to this issue and which I shall try to deal with.
The amendment seeks to change the timeframe within which the 0.7% target applies. The Bill currently places a duty on the Secretary of State to ensure that public spending reaches 0.7% of GNI every year. I should just like to point out that the UN resolution did not actually require 0.7% to be achieved each and every year, so my amendment is not in conflict with the original UN resolution. For some reason, “every year” has been added in the nature of this Bill, and I believe that that greatly adds to the impracticalities and difficulties that the Bill presents. The amendment would mean that public spending on international aid would be required to reach 0.7% of GNI across a five-year period, and that would avoid the need to rush or defer spending on aid programmes.
I shall resist the temptation to take the Committee through the whole NAO report, which was published on 15 January and which I referred to earlier, but it deals with the real concerns and difficulties that the department has had in managing what it is being asked to do by government.
Lord McConnell of Glenscorrodale
At the risk of provoking the noble Lord to read out the whole of the NAO report, I hope that he will accept that during the Second Reading debate, which he listened to very carefully, a number of alternative versions and impressions of that report were described by noble Lords, including the very positive comments made in the report about the way the department was preparing for this eventuality. It was not a one-sided report and the version that the noble Lord gave earlier was not the only version described during Second Reading.
Lord Forsyth of Drumlean
I am not seeking to take sides with anyone. If the National Audit Office and the Chairman of the Public Accounts Committee draw our attention to the very serious difficulties which the department has had to meet, and to the serious implications for getting the best value for money in the aid programme, we need to take account of that.
Lord McConnell of Glenscorrodale
The report, which I have read in great detail, praises the department for the way in which it sought to achieve those objectives.
Lord Forsyth of Drumlean
And rightly so. The department is absolutely heroic. It has been given an impossible task. If the noble Lord has read the report, he will see that it had to juggle its budgets and go to the Treasury for extra cash. My noble friend on the Front Bench is shaking her head. If she wants to intervene and contradict me, I would be happy to give way, because it is clear from the report that it has had to do so because of the Government’s policy.
By the way, the Government do not need this Bill to decide to spend 0.7%, 0.8%, 0.9% or 2% of GDP on development aid. This is not a sine qua non as far as the Government’s policy is concerned. Indeed, without the Bill the UK’s international aid budget has grown exponentially over the past few years. In absolute terms, the UK ODA spending increased from £3.8 billion in 2003 to £11.4 billion in 2013. That is an increase of £8 billion over a 10-year period. The most recent rise in spending is particularly striking; it increased by £2.67 billion between 2012 and 2013. That is a 33% increase in spending, which is a lot to take account of in one year.
The National Audit Office report, which I shall paraphrase and summarise—I hope the noble Lord will accept that it is a fair assessment—said that DfID spent an extra £1 billion in international aid in just eight weeks towards the end of 2013 to satisfy the 0.7% target. Spending an extra £1 billion in eight weeks before the year end reminds me of the bad old days of local government when all the roads started getting dug up in March because the local authorities were trying to spend their budgets. All kinds of projects that would not have made the cut if considered on a priority basis and a sensible basis suddenly got done. This is the very situation that we are creating by having this inflexible target over a limited period of time, and it is what the amendment seeks to address.
My noble friend Lord Fowler chided me for using words such as “rush”. He is absolutely right; one of the beneficiaries of the rush to spend was indeed the AIDS programme—and a very worthwhile programme that is. I do not know which programmes lost out the following year when they had to be throttled back in order for the target to be met, but of DfID’s spending in 2013, around 40% occurred in November and December. If that does not say that this is a department trying to spend the money and struggling to meet a target, I do not know what it says. Why did it take until the last two months of the calendar year, the year in which the target is assessed, to spend 40% of the budget? The National Audit Office outlined a number of concerns relating to the 0.7% target and its impact on efficiency of aid spending. These include DfID having to,
“quickly add some activities to its 2013 plans but delay others set for 2014, making it more difficult to achieve value for money”.
One of the arguments that we have heard this morning was used by the noble Lord, Lord McConnell, as I recall, in his Second Reading speech. He said, “If we have this target, we can stop talking about the quantity of aid and start thinking about the quality of aid”. I paraphrase him and am relying on memory; I hope I have not misrepresented him.
Lord McConnell of Glenscorrodale
I am delighted that the noble Lord has repeated my argument.
Lord Forsyth of Drumlean
The noble Lord’s argument is no good if we stick with the provisions in the Bill, because, as he said himself, the National Audit Office report says that the target resulted in some activities having to be rushed in. They had to be ready to be implemented and other activities had to be delayed. That is not providing certainty or long-term planning; it is substituting for long-term planning the shifting of particular programmes, such as the AIDS programme that my noble friend Lord Fowler referred to. “What can we do? What can we spend this money on? Right, let’s do the AIDS thing because that is ready to fly, and we will defer this other one because we will not then be able to afford it”. Everything is geared towards meeting the 0.7% target.
Lord Cashman (Lab)
My Lords, I am grateful to the noble Lord for giving way, but I want to introduce a degree of realism that is somewhat missing. The comparisons that he is making, and where they are being made, bear no relation to the suffering and needs of people in other parts of the world. No matter how we dress these words up, outside this House it will be read as an intention to deny and delay the very projects and needs which the poorest of the world are calling out for. Think only of this: not of the child that needs to go to bed with food in its stomach but of the woman who loses her life and her child in childbirth because not enough money is going into that maternity service. Think of that and then choose your words.
Lord Forsyth of Drumlean
I am grateful to the noble Lord for making my argument, because if he really is concerned about these people, he will be concerned about what the NAO report says.
Lord Forsyth of Drumlean
I will, if I may, reply to the noble Lord’s noble friend first. This is the National Audit Office. It has no partisan view. Its report says that rescheduling had to take place, leading to,
“£250 million … of planned activity”—
meaning the very people the noble Lord is talking about—being moved from the first three months of 2014 into 2014-15. It was delayed. The NAO claims that the rescheduling,
“is likely to have delayed some of the benefits those activities were designed to provide”.
If the noble Lord is sincere in what he is saying, as I am sure he is, he is on my side of this argument.
Lord Cashman
I am again grateful to the noble Lord, and this, I promise your Lordships, will be my last intervention, but with all due respect he cannot represent my argument and I do not believe that he ever could. Audits are there to look at something through a particular lens. The economic arguments that we have heard have been dressed up as an exact science. If that is so, I would be interested to hear why economists and certain Treasuries have got it wrong for so long. At the heart of the debate is making sure that commitments that we have made globally are met and that we imagine that we are the poorest, not that we sit in this noble House and go home and afford ourselves the services that we do. I will not intervene again but, with all due respect to the noble Lord, he does not and could not make my arguments.
Lord Forsyth of Drumlean
I agree that I could not make the noble Lord’s arguments because they are confused. He is confusing two things: the desire to ensure that we have effective programmes to deal with poverty and the desire to meet a particular target and implement it in a legislative form that will have the effect of programmes being delayed and of money being spent unwisely because of the constraints that are being put on the very excellent people in DfID. We are very lucky; in DfID, we have one of the best organisations in the world. Why on earth are we shackling it in a way that prevents it from setting priorities, doing its job effectively and getting the long-term certainty and commitment which the noble Lord, Lord McConnell, who I see is about to intervene again, has talked of so eloquently in his speech.
Lord McConnell of Glenscorrodale
I thank the noble Lord for allowing me to respond to his reference to my Second Reading speech. I wish to make two points. First—I hope that the noble Lord accepts this—the National Audit Office report makes clear that it does not believe, and has no evidence to suggest, that any of the money that was spent on projects in that financial year was wrongly spent or that the projects were not worth while. That is very clear in the National Audit Office report. Secondly, that report was specifically commissioned because this was the first year of meeting the new target and clearly there were going to be timescale issues in meeting the target in the first year. The point that noble Lords are making—including the noble Lord, Lord Purvis, in bringing forward this Bill—is that bringing consistency and predictability to meeting this target year after year will help deal with those timescale issues, not exacerbate them.
Viscount Astor (Con)
My Lords, before my noble friend replies to the noble Lord, will he confirm that he is speaking to all the amendments in the group as it is a large group? I say to the noble Lord, Lord McConnell, that it is normal in Committee to allow the mover of the amendment to make his speech. There is plenty of opportunity to respond afterwards. Indeed, the mover of the amendment can then respond at the end of the debate.
Lord Forsyth of Drumlean
It is true that there are a lot of amendments in the group but they are consequential on the concept of creating a five-year period. The noble Lord, Lord McConnell, and I are old sparring partners and old habits die hard for him. In response to his intervention, and at the risk of being accused of repetition—I note that the noble Countess, Lady Mar, is not present—I stress that the National Audit Office report said that DfID was having to,
“quickly add some activities to its 2013 plans but delay others set for 2014, making it more difficult to achieve value for money”.
What does that mean if not that it was not getting the best bang for the buck? The noble Lord said that 2013 was the first year for meeting the relevant target. He is absolutely right about that. However, the report goes on to say:
“The Department’s plans for delivering the 2015 ODA target require it to rapidly increase its investments, which could be difficult for it to achieve”.
If that is not saying loud and clear that we are unnecessarily putting the department in a straitjacket, I do not know what is. My amendment would prevent that and I hope that the noble Lord, Lord Purvis, will accept it.
The noble Lord opposite is clearly not persuaded by the National Audit Office report. My noble friend Lord Fowler was very unkind to Margaret Hodge, the chairman of the Public Accounts Committee, who I think in many respects has done a great job in chairing that committee. Indeed, she has said that it appeared that the cash has been “rushed out” to “meet the 0.7% target”.
She added:
“This raises questions about value for money which Parliament will be keen to look into”.
I do not think we can ignore that. Just to show that I am being balanced and fair, Sir Peter Luff, a very distinguished colleague, who many of us in this House remember with great affection, said:
“The committee must grill Dfid very carefully to make sure this money was spent wisely and well. This proves the folly of binding targets which set out how much you have to spend irrespective of need”.
Neither of these parliamentarians is noted for holding extreme views.
However, as the noble Lord is not happy with National Audit Office’s view, I turn to the International Development Committee, which was also concerned about the impact of the 0.7% target on the effectiveness of aid. It stated in its annual report of May 2014:
“2013 was an exceptional year. DFID’s expenditure increased rapidly as UK ODA rose from 0.56% to 0.7% of GNI. Nevertheless, it does seem surprising that DFID should spend over a quarter of its budget in December and almost 40% of its budget in November and December. DFID should provide the reassurance that its expenditure is rational and costeffective and not rushed out at the end of the year, which is the impression that can be given by its spending profile in 2013. We recommend that DFID carefully monitor its ability to meet the 0.7% target given uncertainties about both its own spending and that of other Departments and the GNI figure, which is itself subject to regular revision”.
As regards that latter point on regular revision, to which my noble friend Lord Howell referred, suddenly, it is decided that we need to take account of illegal drugs activity and prostitution and, as a result of that, we have to find an extra several hundred million pounds to spend on the aid budget. Does that make sense? It may be a bonus for the department, but it will certainly not be part of a planned approach.
I feel strongly about this issue as I was a member of the Economic Affairs Committee, under the splendid chairmanship of my noble friend Lord MacGregor, which took evidence on this issue. The evidence is there for people to see. It highlighted the problems, including that of wrongly prioritising the amount that is spent rather than the results that are achieved. Throughout the morning we have talked about how much is spent rather than how to get the best value for money from what is spent, as I said when we discussed the earlier amendment of my noble friend Lord MacGregor. We thought that a single-year target,
“makes the achievement of the spending target more important than the overall effectiveness of the programme”.
That was one of the conclusions of this House’s distinguished committee. We also said that,
“the speed of the planned increase risks reducing the quality, value for money and accountability of the aid programme”.
That is what we concluded a few years ago and that view is supported by the NAO and the International Development Committee.
A further point that has not been touched on this morning is that reaching the target increases the risk that aid will have a corrosive effect on other political systems by creating aid dependency. That, again, points to what DfID is doing very successfully—that is, looking at more targeted and sophisticated ways of providing aid and support and involving the private sector. I sense that the House has probably heard enough of this argument. I beg to move.
Lord Finkelstein (Con)
My Lords, unfortunately, I was not able to speak in the Second Reading debate, even though I was present, as I could not be certain that I could attend the whole debate. However, I assure the Committee that I intend to speak briefly and only to the amendment.
I write a football column each week for the Times, and have done for more than a decade. The column is concerned with the quality of football teams and helps readers to distinguish between noise and signal. A team that wins 50% of its games will not do so by regularly winning, then losing, winning then losing; it will do it in clusters. When statisticians assessed those clusters, they discovered that they are randomly distributed. In other words, a team will win a cluster but that may be just because it has a run of random results and then it will win, win, win, draw, draw, lose, lose in that cluster. There is a trophy that is awarded entirely for randomness: it is called the Barclays Manager of the Month. When a team’s cluster of wins coincides with a calendar month, its manager becomes Barclays Manager of the Month. In the following month, when that team loses its games, something occurs that is called regression to the mean, and the manager gets fired. This is a perfectly simple statistical concept that ought to be applied to the Bill.
It is not a very good idea to try to set a target in law, on which Parliament must report, that is attached to a single year’s variable data. It is much better to try to find a period that might represent some sort of significance over a long period of time. A single year cannot do that and five years can attempt to do that. Even five years is quite a short period but it is certainly a great deal better than a single year.
This is a technical objection to the Bill, even though others may think it goes to the heart of the argument for it, but the Bill would certainly be greatly improved if a simple concept of randomness was agreed so that we do not have a law for randomness in the same way that we have a cup for it.
Lord Tugendhat
My Lords, I had not intended to speak a second time, but I feel that I cannot allow the words of the noble Lord, Lord Cashman, to go unanswered. I and a number of other noble Lords have made it clear that we support the British aid programme and its objectives and we understand that DfID is a very good administrator in these fields. The suggestion that in trying to improve the Bill one is in some way trying to deny the needy or trying to take food from the hungry is quite unjustified. I very much hope that he was not uttering those words in a personal sense.
Let me continue, because there has been a certain amount of moral indignation, which I find very difficult to take. Noble Lords, including two former Chancellors of the Exchequer and a former Chief Secretary to the Treasury—I am a former Budget Commissioner in the EU and have had a lot to do with large expenditure programmes in the private sector and the public sector—owe it to the House to draw on our experience to seek to improve the legislation that comes before us. I recognise that, as my noble friend Lord Fowler says, we are in a minority. I also recognise that although the Economic Affairs Committee, which is made up of members from all parties, reached a unanimous conclusion, its view is in a minority in this House.
However, the fact that one is in a minority does not mean that one should be constrained from drawing on one’s experience in trying to improve legislation. I believe that this Bill is flawed and that the amendments will improve the Bill. If the Bill can be improved, it will be more effective. However, if the Bill falls, that will in no way interrupt the flow of British aid or inhibit the Government’s ability to spend 0.7% or 0.8%. I hope that noble Lords, such as the noble Lord, Lord Cashman, and others who think like him, will accept that we are speaking with good intentions.
Lord Cashman
I thank the noble Lord. I am happy to go back to the record but I think that it will show that I stated to your Lordships that that is how this debate will be reviewed and viewed outside this House.
Lord Tugendhat
Perhaps I may ask the noble Lord whether he believes that the way in which one’s words are viewed and reviewed should be an inhibiting factor in drawing on one’s experience in order to seek to improve legislation.
Lord Cashman
My Lords, I have always believed that we must speak in defence of our principles without hesitation and bring to that our wisdom. However, one must also be aware of the weight of one’s words and how those words will be represented. In terms of one’s experience, I also said that economics is being viewed as a science. If it is such a science, how come economists and Chancellors have got it so wrong for so long?
Lord Tugendhat
I am afraid that the way in which human beings are constructed means that error is endemic in all our assessments, but that should not be an inhibition in drawing on our experience to try to improve the proposals before us. I quite accept the point made by the noble Lord about how statements may be viewed and reviewed. I would also say to him that there is a danger of them being misrepresented and that what he has said will encourage that.
Lord Brooke of Sutton Mandeville (Con)
My Lords, I have very few qualifications for speaking in these debates, although I had the extreme privilege, thanks to my noble friend Lord Lawson of Blaby, of serving as the British Minister on the Budget Council of the European Union for the four years when I was in the Treasury—I suspect that that is about as long as anyone has ever done that job. During that time, we had to deal with problems that were, effectively, intractable. The Budget Council is a body with which the noble Lord, Lord Cashman, will be familiar. I am delighted to say that it was this Government who found solutions that meant that we did not have a continuous repetition of the failure of the process at the end of the year in arriving at a budget, which, in the final analysis, was determined by the European Parliament. It was a rich and pleasurable responsibility to hold and we earned the respect of our confrères on the Budget Council—rather as DfID is earning respect—for our concentration on solutions rather than on argument.
The second thing that I wish to say—there is an enormous amount to read on this subject, particularly in the short space of time between Second Reading and Committee stage—relates to the extreme utility, on the subject that we are discussing, of the footnotes in small print in the NAO report. It propounds issues that the International Development Committee might wish to consider. At least 11 out of 15 such issues apply directly to this as a way of making what may also be relatively intractable problems easier to solve.
Lord Howell of Guildford
My Lords, I listened almost with amusement to the last forceful intervention of the noble Lord, Lord Cashman. He summed up in an excellent, succinct phrase exactly the content of my maiden speech in this House in 1997—namely, that economics is not a science, as many of its proponents insist, but an art, and a very ambiguous art at that, which is full of subjective views. To look back, frankly, at the development activities of the past 40 and 50 years, post the Second World War, the economists have not done a very good job. They have applied all kinds of economic rulings to the proposed triggers for development and have found that they have not worked. Of course, far more than economics is involved. There is a whole range of psychological and particularly local factors in all the countries that all of us have visited over the years—I have visited dozens of them—which are operating not to the laws of economics. I say “Well done” to the noble Lord, Lord Cashman. That is exactly the truth of the matter. We do not want to be guided too much by economists.
What we want is flexibility and room in which we can look to the future for once rather than the past and see the ways in which development can be triggered and promoted in the future. As my noble friend Lord Lawson said, the world has changed totally in the last 40 years. The developing countries are looking for new priorities and new ways of assistance. They are looking for ways in which they can graduate away from official development systems à la 20th century into new forms of support and development in the 21st century.
All sorts of distinguished reports from the other place and your Lordships’ House emphasise that. The latest report from the excellent House of Commons International Development Committee on the future—not the past—of UK development co-operation states:
“The impact of DFID’s support … depends less on the volume of financial support and more on its ability to act as a purveyor of development excellence, helping its partner countries to identify innovative solutions”.
Your Lordships’ House should be thinking about innovative solutions and not the past. The committee also states:
“As grants of aid become less appropriate in some countries, so new forms of development co-operation are necessary”.
It goes on to identify the evidence that it had gathered in the various countries that it had visited. That is the reality of the moment. New forms are required to promote development. If we glue ourselves into the old ways of thinking, we will deny ourselves the flexibility of this kind of goal, which our superb staffs in DfID, the Foreign and Commonwealth Office and other areas will seek to be guided by, and we will do a disservice to development on a massive scale.
Lord Hamilton of Epsom
I follow my noble friend Lord Howell on the remarks of the noble Lord, Lord Cashman. He is absolutely right that economists indulge themselves in a form of science that is not exactly reputable. Some noble Lords may remember the letter written to the Times by, I think, in excess of 360 economists, who said that the Thatcher economic policies were absolutely doomed to pitch this country into constant recession. That was the turning point for the economy in the United Kingdom, and things really took off from there. We are very much at home with him on that.
The noble Lord also spoke about how we should feel enormous compassion for those in great need in places in Africa and so forth. We all very much sympathise with where he comes from there, but the point has already been made in this debate that only 10% of what goes to these countries comes from development aid programmes. The rest comes from investments made in these countries. Let us face it: what is really going to make a difference in a desperately backward country such as the Democratic Republic of Congo is the fact that the Chinese are prepared to put in extensive railway and road networks in return for copper and cobalt concessions in that country. These are the things that will really make a dramatic difference in a country such as the DRC. In terms of relativity, development aid programmes are merely a pinprick compared with what is being invested in return for mineral resources.
To return to the amendment, the noble Lord, Lord Cashman, is right that this is not about economics. This is much more about accountancy. Some people will argue that accountancy is one of these other rather faulty arts, rather than a science, but I think it comes nearer to being a science than an art. What we are talking about here is how you manage money effectively. It must surely be right that you can take somewhat longer to meet a programme, rather than restricting yourself to 12 months. People who support this Bill have not really answered my noble friend Lord Forsyth’s point about 40% of the budget being spent in November and December of a year because it is bumping up against the end of the financial year. This should strike an enormous amount of disquiet in people’s minds, because it suggests to anybody that the expenditure of this money is being rushed. No control is being put in—we are just trying to meet targets to show that we spent all this money, and where the money goes is of much less concern.
I spent a certain amount of my youth in the army in Kenya. After independence, one of the famous elements of Kenyan politics was the Wabenzi, people in government who drove around in Mercedes-Benzes, many of which had been paid for of course by development aid money. One has to recognise that, in these sub-Saharan African countries, the elements of corruption are very great indeed and there is no respect for development aid programmes. People do not say, “This is being brought into my country to aid the poor, therefore I will not put my hands on it”. The fact is that those in charge manage to get hold of an awful lot of that money, which is why so many of them are driving around in Mercedes-Benzes today.
Baroness Northover
My Lords, in considering this group of amendments, I hear what my noble friends are saying about seeking to help the Government to manage our spending on official development assistance in a more flexible and predictable manner. However, these amendments, if carried, would have significant disadvantages, in our view, not least in terms of the flexibility and predictability noble Lords are seeking to promote.
First, as has been made clear previously, there is a need for an internationally consistent approach. The OECD DAC is made up of 29 members, and to ensure that monitoring and reporting of DAC members’ budgets is consistent and can be reported transparently, the DAC has decided to monitor ODA on the basis of single calendar years. If the UK moved to a five-year average, the UK would still have to submit annual ODA information to the OECD DAC. The need for consistency and clarity is essential. Importantly, using an alternative definition would also undermine the weight that our commitment to 0.7% carries with our international partners, as I mentioned before.
It is also important to note that the department already manages to an annual target, as does any other government department—as the noble Baroness, Lady Farrington, mentioned—in order to deliver within annual budgets. Therefore—
Baroness Northover
I think I had better continue. I am sure the noble Lord will wish to come in later. Therefore, a five-year target would not add additional flexibility. We have had reference to spending at the end of the 2013. I underline what my noble friend Lord Fowler said about the commitment to the Global Fund. I know how long it took to get that decision made and out, and the importance of that decision and the commitment that we made. I would also add, as I did at Second Reading, that it seems, perhaps, to have been set aside.
Baroness Northover
I am not going to give way. I will carry on in the interests of time. We also faced Typhoon Haiyan and an unexpectedly high increase in the number of refugees fleeing violence in Syria and facing the winter in the open. I have read the NAO report. The NAO, in its scrutiny, found no evidence that the department failed to follow its normal business processes—and it looked very carefully indeed at those. For example, the report says:
“The Department took positive steps to prepare for the 33% increase in its budget in 2013-14”.
It also says:
“The Department’s decision to issue more notes to”,
the Global Fund and the World Bank,
“in 2013 did not alter the total value of notes it planned to provide them and did not affect the content and timing of the programmes”.
Lord Forsyth of Drumlean
I am most grateful to my noble friend for giving way. I think that her argument is that, if the department spent, say, 0.8% one year, 0.6% another year and 0.9% the year after that but it met the 0.7% target over the five years, that would not be acceptable because it would look odd in the OECD statistics. As the vast majority of OECD members are nowhere near 0.7%, why is that a problem?
Baroness Northover
My noble friend has made his case very clear and others have, too, but we are managing the budget over a longer period in a way that it can hit those targets in those specific years. We have mechanisms to ensure that we spend our money in a strategic and long-term way. Noble Lords are very familiar with that—not least my noble friend Lord Fowler—and it does not require that kind of potential splurging at the end of the year in order to hit the target. We make annual contributions to a number of multilateral bodies and those are organised using the notes system that I have just mentioned, which allows a note to be counted as aid when issued but it is not cashed until the money has been properly spent in the fullness of time. This means that the department has the flexibility that it needs, as other government departments do, to arrange its accounting to fulfil its obligation to spend at the 0.7% target.
My noble friend Lord Tugendhat, in withdrawing the previous amendment, clearly did not feel that I had adequately answered his question about the OBR. I apologise if I did not answer adequately, and I will look very carefully at what he said and write to him if I need to clarify anything further. However, I hope that I answered his question on whether GNI is an international standard, as I went into that in some depth. Clearly, the target does not change the way that departmental budgets are reconciled with each other—that is not a challenge that we encounter. The ODA GNI figure is a national statistic and the methodology has been agreed by the Office for National Statistics. We are bound by that methodology, which is agreed and overseen by the ONS, which is the appropriate body to deal with that.
I remind noble Lords that the International Development (Reporting and Transparency) Act 2006 established a duty on the Secretary of State to lay before each House of Parliament an annual report about the UK’s development efforts and spending, including reporting on progress towards meeting the 0.7% GNI target for ODA. Therefore, there is such an annual accounting in law anyway. Maintaining DfID’s accountability for tracking and reporting on its own spending to Parliament is more appropriate, both from a governance and a practical point of view, than putting such a responsibility on the Office for Budget Responsibility. If we were to do that, this would seem to be outside the current mandate of the OBR and might require revision of the 2006 Act.
Clearly, spending needs to be fully scrutinised, as the right honourable Margaret Hodge and the honourable Peter Luff said, and my noble friend Lord Purvis has outlined the very thorough and independent way in which that happens. I thank my noble friends Lord Howell, Lord Brooke and others for their wonderful tributes to DfID on the way that it manages this. Indeed, DfID is at the forefront of how best to assist in developing countries, which will undoubtedly change, and needs to change, over time.
Although I understand the intentions behind these amendments, I urge noble Lords to reject them.
Lord Howell of Guildford
Before my noble friend sits down, one point on which it would be helpful if she could come back—possibly we could discuss this on Report—is the question of what is “ODA-able”, to use an ugly phrase. The Development Assistance Committee of the OECD is in constant debate, even now as we are debating this Bill, about the new definitions that are required of what is “ODA-able”, or acceptable within the targets, and what is not. How does that link in with the concept in this Bill of the one-year, annual discipline? How will we enable the Bill to be effective in the light of the debates on changing the rules on “ODA-ability” that are raging on in the Development Assistance Committee—and, I suppose, in Whitehall—as she very well knows?
Baroness Northover
I do not need to come back on Report, because I hope that I can answer my noble friend now. I find it immensely helpful that there is a definition of ODA. My noble friend is right that there is discussion of whether the definition needs to be updated, but the definition as drawn at the moment, which is what we answer to, is a very useful device because it makes clear that you cannot spend money on, for example, tanks or whatever someone might feel would be a useful way of spending the money. Therefore, from my perspective, it is a very useful discipline. There are certain things you can do within ODA, and it has to support the poorest and development. The noble Lord has probably seen the definition of what is excluded, as have I, and I frequently look at it. That serves as a useful discipline because, should DfID be asked to pass money to some department to do something which it feels is not appropriate, it is easy to point out that that does not fit within ODA and it would therefore mean that we would not meet the 0.7% target.
It is true that the OECD is at the moment giving consideration to whether we need to update this given the involvement, not in military offensives and so on but in what is now done internationally in terms of peacekeeping. However, that has not yet been decided. I am glad that the OECD is looking at what might be appropriate but I do not believe that any conclusion that the OECD comes to will be at variance with the basic commitment to support development in the poorest countries and of the poorest people.
Lord Forsyth of Drumlean
As I understand the Bill, it places a duty on the Secretary of State to meet the target. If the target is not met, there has to be a report to Parliament. Clause 3 states:
“The only means of securing accountability in relation to the duty in section 1 is that established by the provision in section 2 for the laying of a statement before Parliament … Accordingly, the fact that the duty in section 1 has not been, or will or may not be, complied with does not affect the lawfulness of anything done, or omitted to be done, by any person”.
Does that mean that the impact of the Bill is that, if the target is not met, all the Secretary of State has to do is lay a Statement before Parliament and then there is no further sanction against the Government? Or am I missing something?
Baroness Northover
I am sure that my noble friend Lord Purvis will address this issue. It is a Private Member’s Bill and the Government support it as it stands, unamended.
Lord Lawson of Blaby
I hope very much that my noble friend Lord Purvis will give a full and complete answer to the important question which my noble friend Lord Forsyth has just put. As to what the Minister said, I find myself wholly unconvinced. She did not seem to understand the purpose of these amendments.
Before I comment on that, I must respond to the impassioned interventions of the noble Lord, Lord Cashman. He was concerned about how the reluctance to pass the Bill, almost sight unseen, will be considered outside the House. He made an emotional speech. It is true, as I said, that the Bill is a triumph of gesture politics over good government. How it is seen outside the House I do not know, but I am not aware of overwhelming popular support in the country for the Bill. Indeed, my impression is that it has minority support. However, leaving aside the question of whether you believe gesture politics is more important than good government, our responsibility as a House is with good government and we should not be diverted from that. Whatever misleading remarks the noble Lord, Lord Cashman, may care to make, it is our responsibility to promote good government, and that is the purpose of these amendments.
Lord Forsyth of Drumlean
On the point of creating impressions, my noble friend might be interested to know that the noble Lord, Lord Cashman, has just tweeted:
“Lord Forsyth clearly enjoys fillibustering and denying with weasel words the needs of the poorest”.
Lord Lawson of Blaby
That is disgraceful. No doubt the noble Lord, Lord Cashman, will want to withdraw his tweet. I am not sure how you “untweet” or “detweet”, but I am sure he will wish to do so. I am afraid I am not sufficiently technologically proficient to advise him on this matter, but I am sure he knows all about it.
Turning now to the remarks of the Minister, I wish to deal with three points in particular. First, she made a great defence of her department, DfID. I have to say that she has half a point here. If one looks at the various aid agencies around the world, DfID is probably one of the best. However, part of the problem is that a large proportion of British overseas aid is handled not by DfID but by multinational institutions, in particular the United Nations and the European Union—and all the evidence we have indicates that neither of those institutions has anything like the robust high standards to which DfID aspires. That is a major problem, and of course the more ODA is increased, the greater the problem becomes.
Lord Taylor of Holbeach (Con)
My Lords, I think it might be sensible if we adjourn for five minutes, if that is the wish of the Committee.
Lord Lawson of Blaby
My Lords, I am very sorry for the cause of the disturbance. I hope the noble Baroness who had the slight accident is making a full recovery.
I will close by saying that I cannot accept for a moment what my noble friend the Minister said about how, if we had a five-year flexibility, that would put us at odds with the rest of the world, which accepts a one-year thing. The rest of the world is not doing 0.7%, as I pointed out. It is doing very much less. It does not want to make it legally binding. I have to say of my noble friend’s final remark—that we have to do this to influence and persuade the rest of the world to follow our example—that this is a post-imperial spasm of the worst kind. There is no way that the United States, to take one country at random, will say, “My goodness me, look at this wonderful Bill that the British Parliament has enacted. Therefore, we will do the same”. It has not the slightest intention to do that. Our leadership must be based on a number of factors—rather, our influence; alas, it is not as much leadership as it once was. But one thing our influence must not be based on is other countries saying that because we have passed this Bill they will do the same. That is nonsense. It is as well that we live in a world of reality and not the pipe dreams which evidently are the world in which DfID lives.
Lord Purvis of Tweed
My Lords, I also reinforce the concern for the noble Baroness. We have had an hour on this group and even after that hour I am not any clearer as to what the movers of these amendments mean by “spread” or “average” over that five-year period. Indeed, after the very detailed explanation by the Minister, it is perfectly clear that these amendments would inhibit our ability to have better annual budgeting and programming, not only as part of the OECD DAC mechanisms but also with the relationship between DfID, the Treasury and those that, on our behalf, scrutinise their work in the NAO and publish data in the ONS.
Indeed, the long contribution on the NAO report—it seemed that this was a debate on that report rather than the amendment—fundamentally conflated two aspects of it. Paragraph 7 of the NAO report clearly indicated that the report is in two parts. One is the ODA target and the second is the large increase in its budget for us to meet our historic obligation to satisfy that. What stretched from that was a false conclusion that diluting the Bill would somehow enhance that ability.
Two points were specifically raised in the debate, so let me address them. One was: do we have an annual obligation and is that appropriate? As noble Lords who may not have been here for Second Reading but who have had the opportunity to read the debate will know, I was perfectly clear in citing the Pearson commission more than five decades ago, which analysed the benefit of both the concessional and direct flows of aid which was then replicated in an annual obligation.
Lord Lawson of Blaby
I have just one very small point. I simply do not understand why my noble friend cannot grasp that a five-year target must allow more flexibility than one for one year. Does he think that if we have a six-month target, that would not mean less flexibility, or would it mean more, by his argument?
Lord Purvis of Tweed
My noble friend again conflates two aspects. One is that we are not dealing with annual programmes or annual work. Much of our work with multilateral partners is long term. Long-term programmes require long-term funding. Secondly, we operate within parliamentary budgets, so we have to have annual reporting in the Budget to Parliament to scrutinise it. Having the two together is not easy. Michael Moore and I accept that that is not easy. I cannot do any better than refer back to the speeches of my noble friend Lord Fowler and the Minister.
The final technical point made by my noble friend Lord Forsyth concerned the legal duty on Ministers. I think that the Bill is perfectly clear. It was outlined in the Commons scrutiny of the Bill. It is perfectly clear what the duties on Ministers are. It is also clear in Clause 3, entitled “Accountability to Parliament”, what are the duties on Ministers of accountability to Parliament.
Lord Purvis of Tweed
I have obviously not satisfied my noble friend, but with the clarification provided on the first element, I will give way to him.
Lord Forsyth of Drumlean
I am rather alarmed by that, because I thought that I must be misreading the Bill, because I asked: am I right that all the Bill does is require the Secretary of State to reach a particular target, and if he does not reach the target, to come to Parliament to say, “I have not reached it because actually, the economy is in a bad way”, but then there is no redress for those outside? If you had a Government who did not wish to meet the 0.7% target, all that the Minister has to do is to come along and say, “I am not going to meet the target, because I think that the economy is in great difficulty”. If that is what the Bill says, I do not think that that is what the noble Lord has put on the tin.
Lord Purvis of Tweed
It is not just what is on the tin but what is in the Bill. I am a proud parliamentarian. I take very seriously my role of scrutinising and holding government to account. It is the duty of Ministers and DfID to bring information to Parliament and for Parliament to do its job. Parliament is perfectly capable of calling Ministers to account; it has in the past, and I am proud to be part of the process to do that in future. On that basis, I hope that the noble Lord will not press his amendment.
Lord Forsyth of Drumlean
My Lords, we have had a very interesting debate, particularly that last confirmation from the proposer of the Bill. Many people outside—indeed, many people in both Houses—believed that the Bill guaranteed that 0.7% of GDP would be spent on overseas development aid. Many of those who spoke on Second Reading appeared to believe that that was the case. This is a public relations exercise to tell us that that is what the Bill does. If, as many of us do, we want considerable resources to be made available for development aid, it seems to me perverse as part of that exercise to put in place a system of targets which need to be met in one year rather than five years which, as we have argued at great length this morning, would result in damage to ensuring value for money and proper accountability.
In his response the noble Lord, Lord Purvis, pointed out that much of the development aid goes into multilateral programmes. That is true; a minority of the aid goes on emergency relief and disaster—less than 10%, I believe. It is a small proportion. Many people believe that that is what we are discussing when we talk about £11 billion being spent, when only just more than £1 billion is actually going on that purpose. We are talking about development aid here, and a large part of that goes to other agencies such as the European Union.
Lord Forsyth of Drumlean
The noble Baroness, for whom I have the highest regard, says, “Good”. I have to say that the European Union does not have a terribly good record in accountability for public money. Indeed, one of DfID’s objectives is to improve accountability and be less dependent on multilateral programmes.
However, as has been pointed out by the noble Lord, Lord Purvis, and indeed the Minister, in her short intervention in the debate, the way in which you solve the problem of not being able to reach the target is to put money into multilateral programmes. For accounting purposes—I am sure that the Minister will intervene if I am wrong about this—if the department writes a cheque to a multilateral organisation, it counts as expenditure in year, whereas if it actually supports a bilateral programme, the expenditure accrues as the programme continues. So the perverse incentives will be to put more and more into multilateral programmes or those run by other agencies such as the EU and the UN, where the degree of accountability which I think all of us in the Committee believe we should have would not be delivered.
Lord Hamilton of Epsom
It was some years ago now that I went to visit my noble friend Lord Patten of Barnes when he was commissioner for overseas aid in the European Union. He spent quite some time complaining about how few staff he had in comparison with the number that he had when doing the same job in London. I do not know whether that situation has improved but I suspect that it probably has not—and my noble friend was saying quite clearly that he did not have the resources to manage the programmes under his control.
Lord Forsyth of Drumlean
Indeed, and while I do not particularly wish to detain the House, that is also an issue for DfID. When we took evidence from the body set up to monitor the spending, it had four commissioners and a very small staff to deal with a programme which was being increased in size by more than a third. Similarly, DfID itself—although it is common ground that it has done a great job—is having a huge increase in its budget and, at the same time, a 40% reduction in the size of the department.
Lord Forsyth of Drumlean
I do not know whether the noble Baroness shares my concern, but she is quite right that it was a government decision—and I think it is a foolish government decision to say that we are going to hugely increase the money and the programmes being provided while greatly reducing the people who are going to be responsible for seeing that the money is well spent. Perhaps we might come on to that at a later stage.
The noble Lord, Lord Cashman, made an impassioned plea and told the House that he was very concerned that the discussions which we are having about accountability and value for money would be misrepresented outside this House. I have to say that for him to have tweeted that,
“Lord Forsyth clearly enjoys fillibustering and denying with weasel words the needs of the poorest”,
is really unworthy of him. I think that I have raised nearly £100,000 for women in India. The noble Lord should not question our motives. It should be obvious from the speeches made and the amendments which are being considered that the intention here is to provide flexibility for the department to use scarce resources wisely.
Lord Forsyth of Drumlean
In a second. Indeed, the promoter of the Bill at Second Reading in the other place, Michael Moore, said that it was a duty to all constituents, who he pointed out were struggling in the current economic climate, to advocate what is in the best interests of our country—and I agree with that.
I remind people, when they are talking about spending 0.7% of GDP, that this is not money that we have—it is money that we are borrowing. The proposition here is that we borrow money in order to make a commitment. If you are borrowing money in order to spend it, at the very least you should be absolutely certain that you are getting a sensible return on it, and recognise that you are passing on the burden to the next generation—because borrowing is simply taxation deferred. I beg leave to withdraw my amendment.
Lord Newby (LD)
My Lords, in view of the fact that we have two Second Readings on the Order Paper, I beg to move that the House be now resumed to enable them to take place, and that the Committee stage of the Bill resume at the conclusion of the two Second Reading debates.
Health and Social Care (Safety and Quality) Bill
(9 years, 9 months ago)
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Lord Ribeiro
That the Bill be read a second time.
Relevant document: 16th Report from the Delegated Powers Committee.
Lord Ribeiro (Con)
My Lords, I declare an interest as a past president of the Royal College of Surgeons and current chairman of the confidential reporting system for surgery, CORESS, the aim of which is to record near misses during surgery in a similar way to how the confidential reporting programme for aviation contributes to airline safety. I am grateful to the honourable Member Jeremy Lefroy, MP for Stafford, for inviting me to sponsor his Private Member’s Bill in this House. The Bill has the support of the Government, the opposition Members who spoke in all stages of the Bill in the House of Commons and, in particular, the honourable Member Jamie Reed, MP for Copeland.
“First, do no harm” is a guiding principle that all doctors embrace as they start their medical careers. It comes from the Hippocratic oath, which many newly qualified doctors still take, which says:
“With regard to healing the sick, I will devise and order for them the best diet, according to my judgment and means; and I will take care that they suffer no hurt or damage”.
As a young doctor starting my first surgical house job in January 1968, I was made all too aware by my consultants that my first duty was to ensure the safety of my patients.
Jeremy Lefroy was motivated to introduce the Bill because of the concerns of his constituents, Julie Bailey of the Cure the NHS Campaign, who challenged the care given to patients at Mid Staffordshire NHS Foundation Trust, and Ken Lownds, a champion of patient safety. The subsequent two inquiries by Sir Robert Francis identified appalling failures at the trust, which became apparent only after visits by the Healthcare Commission. The findings from Mid Staffordshire and Winterbourne View confirmed that harm to patients was occurring across health and social care services. Many of Sir Robert Francis’s 290 recommendations have been adopted and are part of the new inspection process adopted by the Care Quality Commission. One would hope that that would be the end of it. However, how many times have we heard after such an event, “Never again” and “Something must be done”?
The Bill arises from a determination to see that what happened at Mid Staffordshire and Winterbourne View will never happen again. It seeks to put the safety of patients at the very front of all inspection processes by the CQC. As Jeremy Lefroy stated at Second Reading:
“Of course, legislation on its own will not guarantee safe and high-quality care—leadership, culture and resources are all vital elements—but by making it clear in law what is expected of those providing health care, the Bill will go a long way to doing so”.—[Official Report, Commons, 7/11/14; col. 1080.]
Thus, Clause 1 amends the Health and Social Care Act 2008 to make it clear in legislation that it is the duty of the Secretary of State to ensure that patient safety should be a priority at the forefront of any inspection of hospitals, GP practices and care homes by the CQC. It makes explicit what is implicit. Clause 1 changes the Secretary of State’s power to a duty, replacing “may” with “must” to ensure that all health and social care providers have one objective: the avoidance of harm to patients and members of the public in their care.
Clause 1 refers, in new subsection (5B)(b), to avoidable and unavoidable harm. It might be helpful to explain that to noble Lords by reference to a surgical procedure with which I am more familiar. During surgery for trauma to the abdomen, it may prove impossible to repair collateral damage to the spleen, which it is possible to do in an elective operation. However, in an emergency, removal of the spleen may be unavoidable in order to save life. A notable case of avoidable harm is that which befell Sir Anthony Eden—the Earl of Avon—when, in the course of gall bladder surgery, his bile duct was damaged. The complications that followed blighted his health and subsequent political career.
A test of reasonableness rightly applies in assessing whether harm is avoidable. For instance, before undertaking a colonoscopy, a patient is always warned of the risks of bowel perforation—about one in 500 when I was practising. The patient has a right to expect that the hospital will have the necessary systems in place to deal with any problems immediately, should unavoidable harm occur. New subsection (5B)(b) recognises that dilemma and makes allowance for it. As the Explanatory Notes observe,
“a test of reasonableness applies in assessing whether or not harm is avoidable, to acknowledge the risk intrinsic in many clinical treatments”.
Clause 1 will ensure that all health and social care providers create systems to reduce the incidence of avoidable harm. “Zero harm” is a laudable aspiration, but we received many emails, particularly from the Health Foundation and others, which stressed that zero harm is not achievable. However, as the 2014 NHS England report on “never events” demonstrates, such incidents continue to occur. In 2012-13 there were 329 reported incidents: 83 from wrong site surgery; 42 from wrong implants or prostheses; and 130 from retained foreign objects. Other examples of avoidable harm can be found on the wards, with patients left without food or water—which may be there, but out of reach—low staffing levels which lead to patient neglect, and instances of actual physical harm such as those reported at Winterbourne View. We still have a way to go, but Clause 1 will encourage us to do so by ensuring that there is a legal duty to hold providers to account for the safety of care to patients and service users for years to come.
Clauses 2, 3 and 4 are intended to encourage integration between health and social care services by utilising a consistent identifier of patients and the sharing of information for direct care purposes where that is in an individual’s best interests.
In the debate in the House of Commons on 10 December 2014, Dr Poulter, the Minister for Health, stated that it was the Government’s intention to specify the consistent identifier as the NHS number. That will come as some comfort to the patients who move from hospital to hospital, collecting different hospital numbers along the way, which can often lead to delays in transmitting information. Greater use of the NHS number would make it easier to share information on patients between the various systems in the NHS and the social services, to improve the care given.
As a clinician, I know all too well the vital importance of accurate and timely information to the delivery of care. I am strongly of the view that these clauses, requiring as they do the sharing of information about patients in support of their direct care, and in their best interests, will improve the safety and quality of that care. Requiring the use of the NHS number will facilitate sharing, helping to ensure that information follows the patient, so that information is there when it is needed. This is important whenever care is delivered, but is particularly crucial in the delivery of urgent care, and for patients with complex care needs, when several organisations are working together to deliver the best possible care. Not only will this save doctors and nurses valuable time which could be better spent on caring for patients, it will also reduce the risk of errors caused by a lack of information about a patient’s history. Furthermore, it will spare patients the frustration of having to tell their story over and over again, leading to a smoother, more joined-up experience of care. I am sure that the Minister will comment on this.
In Clause 2, it is important to recognise that there will be vulnerable people and sensitive health services which depend on anonymity to encourage attendance. The duties to use the NHS number and to share information for direct care purposes would not apply when an individual objects or would be likely to object. Dame Fiona Caldicott, who enshrined the six Caldicott principles in 1997 for information governance has, in the recent information governance review for 2013, added a seventh principle:
“The duty to share information can be as important as the duty to protect patient confidentiality. Health and social care professionals should have the confidence to share information in the best interests of their patients within the framework set out by these principles”.
Getting the balance right is important, and Dame Fiona Caldicott noted that after the second Francis report she was struck by the need for cultural change in the NHS. She said:
“A re-balancing of sharing and protecting information is urgently needed in the patients’ and service users’ interests, which is supported by those citizens with whom we discussed these issues”.
Education and training to ensure that staff show respect, compassion and dignity in their dealings with patients, particularly with an ageing population, is crucial if the risk-averse attitude to sharing information is to be overcome. As the newly appointed National Data Guardian, we can rely on Dame Fiona Caldicott to ensure that data are protected.
On 11 March 2013, the noble Lord, Lord Patel, who is not in his place today, introduced a short debate on the Mid Staffordshire Foundation Trust. In my contribution, I referred to the role of the Royal College of Surgeons in providing two reports commissioned by the Mid Staffordshire Foundation Trust following an invited review of clinical services. The RCS was criticised by Sir Robert Francis for not sharing its findings beyond the trust, even though the report, once delivered, was the property of the trust that commissioned it. I had suggested previously a mechanism for reporting concerns about patient safety, following college visits, to Sir Ian Kennedy when he was chairman of the Healthcare Commission and I was president of the college. The role of the Royal College of Surgeons would be to oversee the training of surgeons in hospitals, while the Healthcare Commission would deal with any patient concerns we identify. Sadly, this did not happen as college visits were not reinstated and the CQC took over the role of the commission in 2009. It then overturned a robust system of inspection, which had identified the problems at Mid Staffordshire hospital.
It is worth noting that, following the Francis report, CQC inspection teams now have a larger clinical component. In highlighting the problem of Mid Staffordshire, we must recognise—as the noble Lords, Lord Patel and Lord Warner, did in their contribution to the debate—that there are many excellent NHS hospitals employing staff who should not be tarred with the same Mid Staffordshire brush.
Clause 5 and the schedule set out consistent overarching objectives relating to the Professional Standards Authority and regulators of health and care professions. These are based on a consistent overarching objective of public protection, furthered by three individual objectives of protecting, promoting and maintaining health, safety and well-being of the public; promoting and maintaining public confidence in the profession; and upholding professional standards and conduct. The regulators’ fitness to practise panels and committees, as set out in the schedule, would also be required to consider these objectives. Consistent with this Bill’s theme of safety and quality, this will help confirm that these regulators are able to act to ensure public protection in its widest sense.
The BMA has expressed concerns about the inclusion of maintaining public confidence as an objective for regulators, fearing the use of this consideration as a pretext for initiating the investigation of health professionals through fitness to practise proceedings. It has raised with me the issue of guidance for regulators, declaring how the overarching objective and, in particular, the elements related to public confidence and well-being will be applied in practice. I believe that this is an important issue and I am sure that my noble friend the Minister will be able to give assurances on it.
I have made no reference to the Law Commission’s draft Bill on the regulation of health and social care professionals, which recommends that a single statute for all regulatory bodies should be established to provide an overarching duty to protect the public. I know that the noble Baroness, Lady Pitkeathley, will wish to comment as chairman of the Professional Standards Authority. I will defer to the Minister to deal with the noble Baroness’s concerns.
The Royal College of Surgeons proposed two amendments, taking forward aspects of the Law Commission’s review of the regulation of health care professionals during the Commons stages. My honourable friend Jeremy Lefroy responded that these would not be included in the Bill and that the Government will take these issues forward as part of their response to the Law Commission. I have received emails from the Nursing and Midwifery Council, the General Pharmaceutical Council and others that would wish to see the Law Commission’s proposals introduced as a government Bill. Would my noble friend the Minister confirm the Government’s commitment to legislation? Following the many reports post-Francis on patient safety, including those by Don Berwick and Sir Bruce Keogh, it really is time to put into legislation measures that will make it possible to achieve harm-free care and to ensure that patient information can be identified and shared for the specific purpose of improving care for patients who consent for this to be done.
In conclusion, I thank Jeremy Lefroy MP for introducing this Private Member’s Bill and for his deft hospital pass; the noble Earl and the Bill and policy team at the Department of Health for their many meetings with me; and other Peers and the professional organisations with concerns. I beg to move.
Baroness Pitkeathley (Lab)
My Lords, I congratulate the noble Lord, Lord Ribeiro, on his introduction of his Private Member’s Bill and on the clear explanation that he has given of its contents. Although it is a Private Member’s Bill, it has strong support from the Government—such strong support, in fact, that in another place the Minister was reprimanded by the Deputy Speaker for speaking at unusual length on a Private Member’s Bill. Even if the Deputy Speaker in your Lordships’ House had such powers, I am sure such reprimands to the Minister would be unnecessary today.
It is perhaps unfortunate that the wide-ranging Bill that many in the regulation world were hoping for, expecting and working towards has not found parliamentary time in this Session, although the Law Commission and Department of Health officials continue to focus on a Bill for a future Session, as the noble Lord, Lord Ribeiro, reminded us. Such a Bill with adequate parliamentary time would have given us the opportunity to discuss the whole regulatory framework, but that discussion will be for another Parliament.
I now declare my interest as chair of the Professional Standards Authority for Health and Social Care. I emphasise that it is in that capacity that I address the issues in this Bill, so I will confine my comments to Clause 5. The Professional Standards Authority for Health and Social Care promotes the health, safety and well-being of patients, service users and the public by raising the standards of regulation of people working in health and social care. We are an independent body working to Parliament and accountable to Parliament. We oversee—“audit” might be a good word—the work of the nine statutory bodies that regulate health professionals in the United Kingdom and social workers in England. We review the regulators’ performance and scrutinise their decisions about whether the people on their registers are fit to practise. We have other functions, but those are not the concern of this Bill.
The Professional Standards Authority is concerned that there is a misunderstanding of our functions and that the Bill will make our objectives unclear and contradictory and narrow the scope of our work, thus reducing our ability to promote the health, safety and well-being of patients, service users and other members of the public. I fear this is because the Bill conflates the authority’s role with the role of the regulators. The Professional Standards Authority is not a regulator; it is an oversight body and has no direct relationship with the professionals regulated by the nine regulators. In fact, I do not think it is too strong to say that the Bill muddles the role of the Professional Standards Authority with the role of the regulators, and in doing so is likely to provide less public safety and quality rather than more, which is its aim. Let me expand on that a little.
The authority’s current objective requires it to promote the health, safety and well-being of patients, service users and other members of the public. This formulation provides a helpful clarity that our focus should be on patients and service users first and foremost. This emphasis, of course, reflects the findings of former and recent inquiries—Bristol, Shipman and Francis—and it is vital to maintain that emphasis. Indeed, the noble Lord who introduced the Bill has also emphasised how important that emphasis is. This is particularly helpful given that “the public” includes, of course, the professionals whom the regulators regulate. We have to think about the impact of decisions and policies on individuals, as well as take account of the impact on the wider public. In our Section 29 work, for example, when we review a regulator’s decision about a case we consider it in relation to the individual patients treated or seen by the health professional, and we also consider the wider public interest implications of the case.
I do not understand why it is considered necessary for Clause 5 to refer to “the public” rather than to patients, service users and other members of the public, or what additional benefit would be gained. It seems an unnecessary and unhelpful contraction that reduces our focus from individuals and population to population alone. I would be glad to receive an explanation from either the Minister or the noble Lord of why that is considered necessary. I must seek a strong assurance from the Minister that this change will never take the focus of the Professional Standards Authority away from patients and veer it towards the interests of professionals. When the Council for Healthcare Regulatory Excellence was established, and since then in launching the Professional Standards Authority, we have constantly emphasised the patient and user focus of our work, and we do not wish to put that focus at risk in any way.
I have further concerns about the Bill setting up competing objectives for the authority when we identify a poorly performing regulator, which is what our performance process aims to do. Currently, the authority has no role in promoting and maintaining public confidence in the professions regulated by the regulatory bodies. That is for the regulatory bodies themselves to do. Here again, I am concerned that the Bill conflates the role of the authority with that of the regulators. If the Professional Standards Authority is required to protect, promote and maintain the health, safety and well-being of the public by reporting the poor performance, followed, we hope, by improvement in the regulators, as proposed new subsection (2B)(a) requires, could it not also be said that the public would be better protected if the regulators’ poor performance was not reported, because highlighting it might harm public confidence in the profession it regulates and consequently increase the risk of people not seeking and trusting treatment and care when they need to do so? If a conflict between these two objectives arises, we need to be assured by the Minister that the Professional Standards Authority’s priority will always be understood to be to protect, promote and maintain the health, safety and well-being of patients and public, not that of the professionals who deliver the care.
Under current legislation our role is clear, as I have set out. I am sorry that the Bill raises questions about the clarity of that role, and I repeat that I think this has occurred because of muddling the role of the authority with that of the regulators. My aim is to ensure that the authority’s role is entirely understood to be for the benefit of patients, users and members of the public. I seek the Minister’s reassurance on the points I have raised.
That is all that I wish to say about Clause 5, but I cannot sit down without registering my dismay at the way in which the Bill is being handled in your Lordships’ House. We are all realistic enough to know about government hand-out Bills, but a government “take it or leave it” Bill is another matter. It is not acceptable to be told by officials, not Ministers, not only that the Bill cannot be amended but that we cannot have a Committee stage for the discussion, negotiation and scrutiny that is such a proud tradition in your Lordships’ House. There are some complex and difficult issues in the Bill that could affect patients for years to come. The parliamentary process should not be short-circuited for the convenience of business managers. We would be failing in our duty as a revising Chamber if we agreed to that.
Lord Willis of Knaresborough (LD)
My Lords, I am conscious of the late hour and will try to keep my remarks to a minimum. The noble Baroness, Lady Pitkeathley, raised a number of issues that I should like to deal with but was not going to. I should like to thank Jeremy Lefroy for bringing the Bill into the Commons, and my noble friend Lord Ribeiro for the excellent way in which he introduced it. He introduced a number of the issues in a very balanced way, particularly those relating to Clause 1, which are clearly going to cause some concern.
I fundamentally disagree, however, with the noble Baroness. One of the things that has bedevilled us, and which Clause 5 tries to deal with, is that our regulators in particular have operated in individual silos, as indeed has the PSA. To say that the regulator—particularly, the one that I know best, the Nursing and Midwifery Council—does not have as its first priority protecting the public is to underplay not only that regulator but every other regulator. She is quite right to say that we have moved away from that mark and that the professions themselves have been the main source of the regulators’ work. I have a great deal of sympathy for that view but, as my noble friend said in his opening remarks—indeed, what was said in the other place on Clause 5 —it is clear that, following Francis, Winterbourne View et al, we have to get this back in balance and that throughout our health and care system it is the patient who comes first, second and, indeed, last. The professionals and the regulator are there to serve that interest. I hope that my noble friend the Minister will say that from the Government’s point of view that is the case. I am pretty sure that that has been the case from the Labour Front Bench. In particular, during the passage of the Health and Social Care Bill and the Care Bill, which are now Acts, in our arguments, it was very strongly the role of the Front Bench constantly to put the patients at the heart of the agenda.
I should declare some interests. I am chairman of the Association of Medical Research Charities, and our interests interface. Not one of our members has given a notification that they are unhappy with this Bill. As the noble Baroness quite rightly said, that is not to say that they would not have liked a different Bill or a government Bill or a Bill which came in on the back of the Law Commission report in 2014. Having said all that, we are not getting a particular difficulty from that. I also declare an interest as the independent chair of Shape of Caring, which has been set up by Health Education England to shape the nursing and care workforce over the next 10 to 15 years. A lot of what is in this Bill will directly affect the work of nurses and care assistants, in particular, and I will come back to that.
I do not regard this Bill as perfect. It is far from perfect. I share the concerns that we are rushing through at the fag-end of this Parliament a Bill which has significant importance in terms of patient care and public safety. Having said that, when I decided late yesterday to speak in this debate, my argument is “Is the Bill worth the effort?”. I think that it is worth the effort. Members of this House will know full well, and established Members of the other House with us today will also understand, that to try to get this sort of legislation at the beginning of any Parliament and in the first Queen’s Speech is very difficult. If there is to be a strange coalition and perhaps then another Government, we may not see legislation of this sort for some considerable time. It is better to get something on the statute book and to start working on it. There are elements of this which are very important.
The Bill has the backing of the Government and the Labour Front Bench, which I hope is still the same. I am pretty sure that it has the backing of many Cross-Benchers. The purpose of the Bill is quite simple and clear. Its first priority is to link registrations with the CQC to a statutory body to prevent avoidable harm where there are regulated health and social care services. Secondly, it has to establish a consistent identifier for patients or clients through the whole of their healthcare journey, allowing information relevant to their care or treatment to be shared appropriately. Thirdly, it has to ensure greater consistency across and between regulators of health and social care with the primary objective of public safety. I do not think that there is anyone in this House or in the broad public who would not agree that it is right and proper that Parliament addresses those three priorities.
My only questions are: does this Bill say that? Does it do what it says on the tin? Is there a reality that those three objectives can be met? I am a layman in these matters but someone who works with the nursing and care sector at the moment. I believe that the answer is yes. The Bill is proportionate, logical and deliverable but it is only one step forward. It is part of a journey to create a more dynamic rather than a stationary regulatory system. The trouble with our regulatory systems is that they are stuck in time and do not move with the times. They need to be far more dynamic.
Clause 1 appears to have caused some problems with the BMA, certainly with the Berwick advisory group—or some members of it—and with the Health Foundation. I know that the noble Lord, Lord Turnberg, will address some of those concerns in his contribution so I will leave him to do it. While I fully accept the concerns which have been raised about Clause 1, there is, as the noble Lord, Lord Ribeiro, said, some exaggeration of what the Bill is trying to do.
The Bill, rightly in my view, seeks to make it a duty of the Secretary of State to require the CQC to impose regulations which cause no avoidable harm to patients. The Bill states just that; what it does not state, nor do the Explanatory Notes, is that we are trying to go for a legalisation of zero harm. There is no healthcare system in the world that could have zero harm framed within legislation—that is impossible. I hope that my noble friend will make it clear that that is not the intention. I hope, too, that he will go on to say that the current regulations from the CQC, which if I am not mistaken are about to come before the House—perhaps they have already gone through the House and I have missed them—have already put into statute exactly what we want to see happen in this Bill. So I do not think that there is a problem from the CQC either.
Clauses 2, 3 and 4, although again eminently sensible in their changes, cause one or two issues which I hope the Minister will be able to respond to. The idea of a common identifier is so obvious that you wonder why we did not put it into the Health and Social Care Act in the form that it is in. The idea of using of one’s national insurance number to deliver that seems sensible, but I am delighted that the Bill does not have it on its face because modern technology is moving so fast that there may well be within a very short time a totally different concept of a common identifier. The Bill will allow that to come in very effectively. Who knows? In future, babies might be chipped at birth so that there is a way of barcoding them as they go along their journey. Before the noble Lord, Lord Hunt, puts out a tweet somewhere, I should say that that is not a Liberal Democrat idea for the next election.
On data sharing, the latest response from Fiona Caldicott is right. The duty to share important information is as important as the duty to protect it. Getting that balance right is important. The fiasco over our attempts to share research data, which nearly derailed that important initiative, is in our minds. The fact that we constantly hear reports of data being lost or put in the post to somebody is something else that we have to take care of.
The area of the Bill that I am particularly concerned about and want to see through is Clause 5. I want to devote the last few moments of my speech to the work of the Nursing and Midwifery Council, which is faced with an impossible task at the moment. It spends an inordinate amount of its time dealing with disputes about people who have reported nurses or midwives for unprofessional conduct; it is mired in a morass of cases. The difference is this: the GMC has roughly 10,000 complaints about doctors each year. In 2013-14, 2,371 of them were investigated, and only 241—about 2.4%—were brought to full hearings. Compare that with the NMC where there were roughly 4,000 referrals last year, 75% of which have gone to full hearings. The NMC is spending an inordinate amount of time dealing with hearings, no matter how important or trivial they are, simply because that is the way the legislation is formed. Clause 5 allows us not only to have a comprehensive framework across all the regulators but gives them powers to streamline the way in which they deal with complaints. It is far more important to deal with the key point of keeping patients safe than with the huge amount of trivia which comes through the regulators.
All in all, this is not a perfect Bill, but is a Bill well worth putting on the statute book, and I hope that noble Lords will support it and give it a Second Reading.
Lord Turnberg (Lab)
My Lords, I, too, congratulate the noble Lord, Lord Ribeiro, on introducing this Bill in a characteristically clear and balanced way. I very much enjoyed hearing him. I find myself in the odd position of being extremely enthusiastic about the provisions of one part of the Bill and rather less than enthusiastic about other provisions, where I feel that there is a desperate need for amendment. I hope that the suggestion that we will lose the Bill if we think about amendments is not true and that we can see our way through that.
I shall begin with the bad news and say straightaway that I do not think it a good idea to try to avoid harm to patients by legislating for it. Of course, few can argue against the idea that we should do all that we can to avoid harm to patients by poor practice, neglect or abuse, least of all me, after a life in clinical practice. Certainly, after the Mid Staffs scandal, I can well understand the desire of the noble Lord, Lord Ribeiro, and the Government to be seen to be taking action, but there are three questions to be asked first. Is it necessary to enshrine this in law? Would such a law be effective? Would it have a negative effect on harm reduction?
The Health Foundation believes that the Bill might have a negative effect. It points out that if we want to avoid harm, which everyone does, the best way is through the intrinsic motivation and dedication of staff and senior leaders rather than through legal or regulatory levers. It prays in aid the Berwick advisory group, headed by Don Berwick, a significant figure in this field in anyone’s book. His group included extremely well qualified individuals whose views should at least give us reason to pause before going ahead with this legislation. It says that “zero harm”—its expression—is an impossible aspiration and to try to legislate for it is too simplistic.
Reduction in harm requires a continuing progressive process involving education, training and motivation from the top permeating through every part of an institution. Bringing the law into that at this stage is not terribly relevant and seems to be a knee-jerk response to the Mid Staffs inquiry, which is never a good basis for attempts at quick resolution. What we should be aiming at is better education and training and better supervision by those in charge. That at least has been shown to be effective in reducing harm. The Bill also talks of excluding harm that cannot be reasonably avoided, but we are then into the whole difficult business of trying to define reasonable avoidance. That needs time and expertise that is not readily available. We need to think that through more carefully.
Now for the good news: the part of the Bill that is very welcome is the desire to see a single identifier introduced for all patients in the NHS. I agree entirely with the noble Lord, Lord Willis, on this. The idea that the identifier will be used across the service so that information about a patient can be shared between all those in the NHS and social care who have to deal with that patient makes enormous sense. It makes for increased safety, too, if Doctor A knows what Doctor B has been treating his patient with. It is a common good. For example, when someone turns up in the accident and emergency department, doctors can find out rapidly what illnesses they have had and what treatment they have been given. However, there is a question about how we can include patients treated in the private sector. I hope that we will hear more about that at some point. I strongly urge that the national insurance number be used as the identifier. It makes more sense to use an existing number for the great majority of the population rather than dreaming up a new numbering system. However, of course, that does not have to be in the Bill itself.
It is of interest that the new National Information Board’s framework for action, which was published last November, states that the use of the NHS number as the primary identifier in clinical correspondence and for identifying all patient activities will be mandated in healthcare. The Independent Information Governance Oversight Panel will play a key role as national data guardian for health and care. This will ensure that proper scrutiny and challenge can be seen to be operating and will reassure those who feel that patient confidentiality will be threatened. A single patient identifier will also be extremely valuable as, hopefully, we move forward with care.data. As that gets off the ground, with the robust safeguards that we hope will be in it on patient confidentiality, the use of those data for medical research and clinical trials will be essential.
Here I declare my interest as scientific adviser to the Association of Medical Research Charities, of which my friend, the noble Lord, Lord Willis, is chairman. Our members are desperate to see research into advances in the treatment of the many diseases that they cover being aided by the use of patient data. As the noble Earl has stressed on many occasions, research is a key and central role for the NHS. There is little doubt that a single identifier, the NHS number, will be a valuable tool in achieving that desirable aim.
Returning to my concern about the difficulties of allowing the Bill to pass without amendment, I should say—in case I am seen as a maverick spoiler—that I am not alone in my view. Apart from the Health Foundation, I know that the Academy of Medical Royal Colleges, the BMA, the Medical Protection Society and, I fear, the Royal College of Surgeons have all raised aspects where amendments may be required. I know that the noble Baroness, Lady Masham, who cannot be here today, is unhappy with the Bill as it stands. I hope that we will be able to look at the Bill again and that the Government will come up with a mechanism by which we can consider amendments to the Bill. I have suggested one possible mechanism to the powers that be, but of course it is not up to me.
Lord McColl of Dulwich (Con)
My Lords, I thank Jeremy Lefroy for starting this Bill and the noble Lord, Lord Ribeiro, for bringing it here so expertly.
I would like to address one or two aspects and look back to how we dealt with them in the past. First, on the issue of protecting the public from avoidable harm, as a young house physician, the first problem I came across was a situation where a number of young ladies had attempted suicide—which of course was a criminal offence in those days. I was astonished to see the police hovering around, insisting on interviewing them. I explained to the police that the patient was not completely compos mentis and was in no fit state to be interviewed by anyone, certainly not the police. This created a great deal of trouble for me and I was summoned before the senior superintendent of the hospital and the local inspector of police. They harangued and shouted at me. I realised that they were just common bullies—and that one of my jobs was to protect patients from bullies.
We then came across the problem of operating on the wrong patient or operating on the wrong side. As a young surgeon I thought that there must be a way of preventing this, so I used an indelible pen to write the name of the operation at the site of the operation. Sometimes this presented problems, and arrows had to be put in to show roughly where it was, but it worked well. However, one day I went into the operating theatre and the anaesthetist said, “I wish you’d make up your mind which operation you’re doing on this patient”. I replied, “Look, I have written on his groin ‘right inguinal hernia’”. He said, “Yes, but look at this”, and he pulled the sheet down to reveal a dotted line across the front of the patient’s neck with a big arrow pointing at it, and on his chest, in big letters, were the words, “Cut here”. It was a tattoo that he had had put on 20 years before. Apart from that, the system worked very well indeed.
We developed at Guy’s Hospital something that had been done in many other hospitals. We would meet every week to discuss all the complications and deaths that had occurred in the previous week. Surgeons, junior staff, students, nurses and even some administrators would come. It was the most amazing and enjoyable meeting of the whole week, and it was relevant to what was going on. You could not hide anything because people knew what was going on. Complications would be presented, and we were very fortunate in having a very senior surgeon to chair these meetings. He had a good sense of humour and he was both brilliant and humble. When some poor junior surgeon would stand up and explain a complication for which he was responsible, the chairman would say, “That’s nothing, old chap. Only the other week…”, and he would go on to describe a complication for which he had been responsible. What he was cleverly doing was creating an atmosphere that was friendly and unthreatening, thus encouraging people to be absolutely honest. It was a great learning experience. It became rather like the general confession and was just as therapeutic.
We are all fellows of the Royal College of Surgeons, the Royal College of Physicians, the Royal College of General Practitioners and so on—but what is fellowship? Fellowship is sharing experiences, both good and bad. That is part of the fun of medicine. Another thing about those meetings was that they did not cost anything and we did not have bureaucrats from above directing and inspecting us. Local accountability is the answer.
The second thing I want to talk about is the appropriate sharing of information and the question of identification of patients. Years ago, I suggested that one solution to the problem of sharing information would be to give the patient his or her medical records. This was objected to on the basis that people could not be trusted and that they would lose them. A friend of mine gave away 20,000 medical records over a period of 20 years, and only three were lost. One was lost in a fire, one in a flood, and the third was eaten by the dog. That is a pretty good loss rate when we consider that some medical records departments were losing around 20% of their records at any one time.
Another thing we started doing was inviting patients to keep their operation note so that they could take it with them. One day I had to operate on a patient who had been operated on in Edinburgh in 1935. It was a complicated operation in the abdomen. I asked the patient if he had any idea what the surgeon had done. “Yes, I do”, he said, and he pulled from his pocket a piece of paper with the most beautiful diagram of all the plumbing that had been operated on inside his abdomen. The patient had kept the piece of paper safe for all those years.
The third thing I would like to talk about is something that has been aired quite a bit: will the Bill leave healthcare workers reluctant to treat or operate on poor-risk patients? Some years ago we conducted a big research project in four London hospitals. We measured the quality of care by what the doctors were doing to the patients—process—and the outcome of that. The third method was to ask a friendly, knowledgeable person in each of the four hospitals to put the consultants in order of merit. The three systems gave the same answer. People in a hospital know what is going on.
To make it fair, we measured 12 variables to find out whether the patient’s contribution to his illness would have any effect on the result of the operation. We recorded blood pressure, anaemia and other things, including marital status—whether they were married or had a stable relationship. Strangely enough, the only one of those variables that had any effect on the outcome of treatment was whether or not they were married or had a stable relationship. That was not an original finding; it had been established for some time.
The fourth thing I will talk about is the whole culture of blaming other people for what is going on. Of course, in medicine we have been guilty of this. If we could not establish the diagnosis in a patient, there was a tendency to say, “Ah well, it is in the mind. It is psychiatric”. Of course, that is quite wrong. Psychiatric diagnosis should be a positive thing, not a diagnosis of exclusion. We must not blame the patients for what is going on.
Of course, one thing that has happened in recent years is the obesity epidemic, and what have they done? They have blamed the people who closed the playing fields for children not getting enough exercise. But of course the obesity epidemic is simply due to people eating too much. That is perfectly straightforward.
The Bill concentrates on the vital overarching duty to protect the health, safety and well-being of the public —and these things we must continue to fight for.
Lord Warner (Lab)
My Lords, it is a pleasure to follow the noble Lord, Lord McColl. I reassure him that before my NHS hernia operation two or three years ago I was very appropriately marked up in indelible ink as to where it should take place. To my pleasure, I found that it had taken place at that same spot—there may be others who thought that perhaps the surgeon should have moved somewhere further north and east.
I had originally told the noble Lord, Lord Ribeiro, that although I wanted to raise issues relating to children in the Bill, I was unlikely to want to table amendments. However, that was before I had read the Bill as carefully as I should have done and certainly before I had considered the amount of briefing that we have had, particularly about Clause 1, which I did not read until yesterday evening. These concerns have been enhanced by the points made by my noble friends Lord Turnberg and Lady Pitkeathley.
First, I will say a few words about children. In doing so, I declare an interest as the Secretary of State for Education’s children’s commissioner in Birmingham City Council. I should make it clear that my remarks are not based on that experience, although it has brought home to me the growing volume of children in need and at risk that many local authorities, health bodies, police and schools are having to deal with. It has brought home the importance of the flow of information between those agencies if children are to be protected.
I very much welcome the provisions in the Bill on consistent identifiers across health and adult social care. However, if this is being done for adults, why are children left out of the Bill? It is yet another example of how often, under all Governments, children get lost sight of in terms of the needs that must be addressed. They are less able to answer back and pressurise for change in some of these areas. It is of great concern, given what we know about children in need and at risk, that we have again in this piece of legislation forgotten about or failed to address the needs of a common identifier in the area of children’s services. I recognise that some progress has been made with the child protection information-sharing project which, if properly done and developed, would enable healthcare staff to see whether a child attending unscheduled care services had a child protection plan or looked-after children status. That is progress: it is better than where we were. Yet it is a long way from what is promised in the Bill—a single identifier for adults. It is a long way from that for children.
It is worth reminding the House of a sterling report by the noble Lord, Lord Laming, in 2003, after the Victoria Climbié disaster. In recommendation 18, he said there should be a proper, common identifier database of all children under 16 in the country, which agencies could know about and have access to when they came across children. This Government decided to abort the work taking place on that. That was a mistake. We are now, yet again, failing to deal with the issue of a common identifier for children that enables all agencies—not just health and care ones—who have a duty to protect children at risk and in need to do so. We need to think a lot more about why, if we are to do this for adults, we will not do it for children.
A number of bodies working in this area have already said to parts of the government machine, “In this age of digital technology, why do we not even consider producing a web-based database for children that could use a unique identifier to help the agencies do a better job?”. It is no good wringing our hands over child protection and exhorting agencies to work better together in this area if we then neglect to provide them with the tools and ability to access those data that would protect children. I regard that as a missed opportunity in this particular legislation.
I turn briefly to Clause 1, with particular reference to the letter and briefing mentioned by other noble Lords that came from the Health Foundation, drawing very much on the work of the Berwick advisory group. I recognise that the intentions of the architects of the Bill are entirely well meant. However, the duty in Clause 1 would, I suggest, go against all the evidence of what is required in the delivery of safe health and care services. I do not want to quote at length from that letter, which other noble Lords have mentioned. But I will put two quotes from it on the record because they summarise the problems with Clause 1.
The first quote is from the report of the Berwick advisory group, which concluded:
“While ‘Zero Harm’ is a bold and worthy aspiration, the scientifically correct goal is ‘continual reduction’. All in the NHS should understand that safety is a continually emerging property, and that the battle for safety is never ‘won’; rather, it is always in progress”.
The second quote is from a recommendation:
“To introduce this new law would not be supportive of the Berwick Advisory Group’s key recommendation for ‘the NHS … to become more than ever, before a system devoted to continual learning and improvement of patient care, top to bottom and end to end’”.
If we are not going to listen to people who put a lot of effort into study in this area and take account of what they say in framing legislation, that is a poor show. If we do not think that it is worth giving the time to scrutinise the legislation and pay attention to views being offered in a very professional and politically independent way, that is an even poorer show. We cannot rush through legislation when we choose not to give enough time to draw on that expertise and use that information.
It is a shame that we are trying to rush on with the Bill in this way. We need to stand still and think about how we can give proper time to a well intentioned piece of legislation. If not, if people want to rush on with this, they should consider taking out of the Bill the provisions that are controversial and not generally agreed.
There is a lot of support for a common identifier, if the Government want to put that on the statute book. I say “the Government” because although the Bill is a Private Member’s Bill, it is being given every encouragement by the Government. Like my noble friends, this is the first time that I have ever been approached by a civil servant to encourage the progress of a Private Member’s Bill, almost implying that I am somehow failing in my duty if I do anything to impede it. That is not the way to proceed. The Minister needs to give us some assurances about what is the Government’s position on and attitude to the Bill and whether the Government want to provide some of their time to give us proper scrutiny of the legislation in Committee.
I hope that the noble Lord, Lord Ribeiro, will not take that as a personal attack on him; it is not. He is honourably trying to progress the Bill for good reasons, but we must ask some questions about the Government’s position and whether they will provide the time to enable us to have proper scrutiny of all parts of the Bill.
Lord Elton (Con)
My Lords, I am the least qualified contributor to the debate, so I shall make my speech suitably short as an act of humility in deference to those who are so much my senior in this field. It was the Mid Staffordshire disaster and the reports following it which focused public attention on the risks to patients in the health service in this country. It is appropriate that it was my kinsman, Jeremy Lefroy, the honourable Member for Stafford, who brought the Bill to the other place. I congratulate him and my noble friend on the style in which they have done it.
I share the anxiety of many of your Lordships about the fact that it has to be debated in a truncated form. We are diminishing the effectiveness of this House if we do not give it the full treatment. On the other hand, we have to balance the possibility that there will be no opportunity in the next Parliament—depending on what political colour emerges from the election—and that it is better to take what we can get than to hope to get a lot more.
In trying to express that, I was looking for a simile. When my eye fell on the mammoth legislation proposed by the law commissions, I realised that the simile for me is that the Bill is like a dolphin leaping just under the bows of a mammoth tanker. We need the mammoth tanker but the dolphin has its own value, in ways which my noble friends have already so adequately explained.
Two phrases caught my attention in the debate. The first was the need for a culture change. I am not actually sure what the other was. However, it seems that we are looking at the mechanisms to regulate people in the health service but not looking at the people themselves. What is needed for the prevention of harm is that first of all qualities laid down by the lady with the lamp, Florence Nightingale: tender loving care.
When I read stories of elderly people and demented people being brutally treated, I recall my very short time as a Minister in the Department of Health, when I was given special responsibility for mental health—for only six months, which was probably a good thing. I visited a large number of hospitals and wards specialising in mental health and what astounded me was the patience of the people looking after the affected ill. When I hear of the very different treatment of people with mental afflictions now, particularly in old people’s homes and nursing homes but elsewhere as well, it strikes me that that conduct could not have been perpetrated by the people whom I saw nursing in those institutions.
Apart from these mechanisms for regulating people in the service, what we need is some procedure to identify those who are fitted for particular parts of that service. The person who is perfectly adequate, even brilliant, as a theatre nurse might find that her patience snaps after six months looking after people who are doubly incontinent, incapable of speech or intermittently violent. That must go also for those dealing with people with dementia, who are unable to recall who or where they are and ask the same question 75 times a day. That requires very special characteristics, which need to be identified, and the people who have them need to be directed where the work is most difficult.
I hope that the Bill gets on to the statute book. While I understand the enthusiasm of those who want to make it perfect, I repeat my position: it is very much better than leaving it to chance. All the authorities should be singing from the same hymn sheet in the coming years, and the enormous legislation proposed by the law commissions should be enacted as soon as possible. I have detained your Lordships long enough. I might say that I have come to the place where there is a dotted line on my paper, which says “Cut here”—and, unlike my noble friend, I will.
Lord Young of Norwood Green (Lab)
My Lords, I do not usually enter these debates because I do not necessarily feel that I have the knowledge to do so. I was impelled to do so—I must admit that it was a fairly late impulse—by the Bill’s title and then having a cursory glance at its substance. I was not expecting much humour in this debate but I am indebted to the noble Lord, Lord Willis, for the idea of chipping at birth. I have recently had that done to a cocker spaniel; I never thought of introducing it to my children when they arrived. It might not be a bad idea to keep track of them but I doubt that it will get through.
I wanted to speak in this debate because, apart from the matter of my own personal interaction with the NHS—I say to the noble Lord, Lord McColl, that I do not know whether they used indelible ink, but thank goodness they got the hip implant on the correct side, the left—whether or not the Bill goes through, there are still fundamental changes that all of us want to see take place in the health service, and which have been touched upon throughout the debate. To return to the noble Lord, Lord McColl, it strikes me as important to identify best practice, and I cannot help wondering why it takes so long for it to permeate. The noble Lord gave his example of how to ensure that accidents do not happen in the operating theatre. One that I have heard about recently is a tick-list system, rather like the one that they use when flying aircraft. It says that everyone in the operating theatre identifies who they are—I think that probably helps—and knows the nature of the operation, and so on; I shall not go through all of it.
Why is best practice not being extended at a more rapid rate throughout the health service? After all, we know where some of the best hospitals are; we can identify their performance. When I as a lay person enter hospital, perhaps because, as I have been recently, I am looking after an aged relative, I can see best practice. I can see when they are paying attention to whether their patient is eating his food or getting enough liquids. I can see whether they attempt to get a patient who has been immobile out of bed and exercised regularly, so that he or she does not leave hospital in a worse state than when they entered it. There is a danger of that, after all: they go into hospital still in control of their bodily functions but sometimes leave with a catheter and, if they are really unlucky, with double incontinence. It is so difficult to get this right.
I also have experience of some hospitals where one ward is operating to perfection but in another you wonder whether you are in the same hospital. Why does that come about? My view, and I think that my noble friend Lord Turnberg identified some of the issues, is that, apart from the intrinsic dedication of staff, which we hope we will experience, training and supervision are key. If the people in charge are just talking the talk and not walking the walk—if the ward sister or matron is not actively engaged in going around their ward, talking to patients and observing the culture—it will not happen.
Someone talked about changing culture. Anyone who has studied organisations knows that changing culture is the hardest thing to achieve, and in an institution as large as the NHS it is doubly so. I hope that the Minister will give us some assurance on the inculcation of best practice. The noble Lord, Lord Ribeiro, talked about wrong sites and wrong implants. The thing that I reflected on was not only the poor patients but the sheer cost to the NHS of such claims. We dealt with that recently in an Oral Question. I hope that the Minister will consider that.
I could not help but identify with my noble friend Lord Turnberg when he talked about the non-inclusion of children. I had not carefully looked at that measure before I realised that that was the case; I was thinking about NI numbers as an identifier when I suddenly thought, “Well, that won’t apply to children anyway, unless I’m mistaken”. I think that he is right about that criticism.
I do not feel qualified enough to say whether the overall impact of the Bill would be either negative or positive; I can see the positive points in it, but do not want to get caught up in the semantics of whether there was zero harm or reduction of harm because I do not feel qualified to be able to distinguish between them. We all share the same common objective that is in the Hippocratic oath: “Do no harm”. As a general dictum, if you like, I embrace the point made by the noble Lord, Lord Elton, about the perfect being the enemy of the good. As a trade union negotiator I have embraced more compromises, which sometimes I have described as “shoddy”, than have most of us—although most of us here have engaged in that. However, I never really regarded them as shoddy but as a natural part of any negotiation. Therefore I will leave it up to the experts to determine that.
I will say only one thing to the Minister: it is a worry that somehow, despite the excellent intentions of the Bill, we have not created enough time to ensure some amendment that might make it much more acceptable to the whole House.
Lord Hunt of Kings Heath (Lab)
My Lords, I declare an interest as president of GS1, which is the bar-coding association of the United Kingdom. I am sure that the suggestion made by the noble Lord, Lord Willis, will be given every consideration it deserves. I, too, congratulate the noble Lord, Lord Ribeiro, on bringing the Bill to your Lordships’ House. He knows that the Opposition support the Bill, and we will adopt a constructive approach to it.
However, I would like the noble Lord and the noble Earl, Lord Howe, to clear up this point about the remaining stages of the Bill in your Lordships’ House. My noble friend Lady Pitkeathley made a very important point. I do not understand why there is not time to give the Bill proper scrutiny. This is essentially a government Bill; it is therefore up to the Government to find the time. We know that this House has plenty of time until Prorogation on 26 March. At the moment, the noble Earl and I are enjoying many Questions for Short Debate, and I understand that there are many more to come. That is because there is virtually no legislation left. The Government say there is not time, but that is not so. I offer our good offices through the usual channels to see whether we cannot find time for a proper Committee and Report stage. That would be the right path. I understand what the noble Lord, Lord Elton, said—that in the past he has been very strong about the role of the House of Lords in the scrutiny of legislation, and has criticised the way in which Governments have tried to get legislation through. We have to be cautious about this. I want to see the noble Lord get his Bill by the end of this Parliament, and we will do everything we can to help, but the evidence that has come particularly from the Berwick committee shows that there should at least be some debate, especially on Clause 1, although there are other issues as well.
Some debate on Clause 1 would be helpful. Although we support the clause, it would be helpful to hear a little more from the noble Lord about what is meant by “zero harm”. The noble Lord, Lord Willis, says that those words are not actually used in the Bill. The problem is that those words were used in the briefing on the Bill, and now it has come to be known as “zero harm” in the health service. It may be that that is part of the issue around Clause 1—not so much what it contains as how it is perceived. I hope that we can clear that up as well as we go through the Bill.
I have one question for the noble Earl. As he knows, I and the noble Lord, Lord Patel—he cannot be here today but will be for later stages—have both chaired the National Patient Safety Agency. We encouraged NHS bodies to report near misses and patient safety incidents. I assume that many of those incidents would come within the definition of “avoidable harm”. Given that, can the noble Earl say whether that means that, once the legislation is passed, almost every NHS body in this country would fall foul of the provision? If that is so—and it might be argued that it should be so—does he think that there is a potential perversity in that people will try to hide these incidents in the future, whereas our whole learning experience, which came from the airline industry, is to encourage people to own up to mistakes? It is a very important point. I think it lies at the heart of what the noble Lord, Lord McColl, said earlier and, indeed, the evidence which we have received from the Berwick advisory group.
My noble friend Lord Young made a very important point about good practice, and I am not sure whether the Bill helps one way or another. He mentioned the WHO checklist in dealing with wrong-site surgery, which has a lot of support from various institutions, including the Royal College of Surgeons. We know that not every surgeon is prepared to do it; there is no question but that some surgeons refuse to take part in those checklists and that sometimes, if they do, they do not take part with wholehearted enthusiasm. Whether this Bill helps that or not, I would be interested in hearing from the Minister how he thinks we can encourage very powerful clinicians who, I suspect, think that it is beneath them to take part in what they call a box-ticking exercise. How can we encourage them to do so? My noble friend is absolutely right—one of the besetting sins of the health service is its inability to spread good practice quickly. That is why we invented NICE.
I find it really disappointing that, in relation to NICE technology appraisals, as an example, even now many clinical commissioning groups refuse to implement them, despite a legal requirement to do so, and have set up their own silly little committees to try to second-guess what NICE is doing. I know that that goes outside the Bill, but it does answer my noble friend on a really important issue that we need to tackle. We all know that we have excellence and we have problems in the health service, and the scale of transfer of excellence to the health service is just too slow.
On the subject of data-sharing, as the Minister knows, the Opposition are very supportive of the sharing of patient information, which is clearly in the best interests of patients. Indeed, we took through the original provision in, I think, the 2003 health Act, although there were many others that we might have taken it through in, to allow for this to happen. The care.data project ran into a few problems, as we know, and has now been rolled out in a kind of pilot way in order to secure public confidence. But I think that it would be fair to say that there are still concerns about whether, in the end, the public and GPs are going to be prepared to sign up to this. As he will know, we think that the National Data Guardian must be made a statutory post. It was the subject of amendments in the other place. I am delighted that Dame Fiona Caldicott has become the National Data Guardian; that is an excellent appointment, and the Government should be congratulated on making it. We know that the Secretary of State for Health has said that her appointment would be put on a legal footing at the earliest opportunity—and this is the earliest opportunity. Surely, this is the time to do it.
Noble Lords will have received briefing from Mencap —I certainly have—about the information-sharing clauses. Mencap wants Clause 4 amended so that the health information includes the person’s communication needs, which means that professionals are more aware of the ways in which people can communicate their health and care needs. Perhaps the noble Lord, Lord Ribeiro, could give some consideration to that.
On the issue of children and why they are not included in terms of a national identifier in the Bill, I assume this is because of the split in government responsibilities between the Minister’s department and that of another department. Perhaps that is not the case, but it would be interesting to know about that. On national insurance numbers, as my noble friend Lord Young whispered to me, children of course do not have national insurance numbers until I think the age of 16. That may be a problem.
I come back to Clause 5. A number of noble Lords have raised the issue of why provisions have not yet been brought forward relating to the Law Commission’s draft Bill. We all know why the Government was not prepared to bring forward a health Bill in the fifth Session—not even a draft Bill—which is why the noble Lord, Lord Ribeiro, has very kindly taken on a Private Member’s Bill. It has been very disappointing; at the very least we could have had pre-legislative scrutiny, which would have been very helpful. I am not going to suggest that we amend the noble Lord’s Bill with 300 clauses suggested by the Law Commission, but I hope that the noble Earl, Lord Howe, will be able to say something about what the Government are going to do with those clauses.
My noble friend Lady Pitkeathley raised some interesting points on the PSA and the new provisions. I take what the noble Lord, Lord Willis, said, but I hope that the noble Lord, Lord Ribeiro, will answer my noble friend’s point about whether there has been some misunderstanding of the PSA’s role. Next Wednesday we debate the Deregulation Bill. I have tabled an amendment that seeks to take a number of health regulators out of the economic growth provisions because I believe that they will inhibit the effectiveness of those health regulators. From meetings we have had with the Department of Health it has been made clear that the PSA is included, but not the regulators—the GMC, the NMC et cetera. I wonder whether there is some confusion in the noble Earl’s department about what the role of the PSA is. My noble friend Lady Pitkeathley pointed that out very well.
We support the principle of the Bill. I congratulate the noble Lord, Lord Ribeiro, on bringing it to your Lordships’ House. I wish to see it make progress, but we need to have proper scrutiny as well.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, I very much welcome the debate on this important Bill. I thank my honourable friend in another place, Jeremy Lefroy, and my noble friend Lord Ribeiro for their stewardship of this Bill to improve the safety of patients and protection of the public. A productive debate was had in the House of Commons, with support for the Bill from all sides. Parliamentary time is limited. Speaking for the Government, I hope that we can get this Bill on to the statute book as soon as possible.
We must never forget the terrible events that occurred at the former Mid Staffordshire NHS Foundation Trust, which demonstrated what can happen when providers put other priorities before safety. As highlighted by the Francis inquiry report, we have much to improve in patient safety and to avoid a repetition of those tragic events. The Government have thrown their full support behind this Bill in our continuing efforts to improve patient safety and the quality of care. I turn now to the Bill and each of its clauses. I will address most of the concerns from noble Lords; I will write on the others that I am not able to cover.
Safety of care must be the focus of healthcare providers at all times. Regulation by the CQC plays a vital role in assuring that providers are focused on safety and are taking steps to reduce avoidable harm. Section 20 of the Health and Social Care Act 2008 currently provides the Secretary of State with a power to include safety in registration requirements with the CQC, but this is no more than a discretion. It would equally be in the gift of the Secretary of State to put a regulatory system in place for providers of health and adult social care that did not cover safety. The first clause in the Bill will remove that discretion and instead place a duty on the Secretary of State to make CQC registration requirements include safety of care. This is consistent with the Government’s continuing effort to reduce avoidable harms and to ensure services are provided in a safe way.
Parliament has recently passed new requirements for registration with the CQC, which include new fundamental standards. Regulation 12 of the fundamental standards states that,
“care and treatment must be provided in a safe way”,
and it sets out a number of steps that providers have to take in order to reduce the risk of unsafe care. Where a provider fails to meet this registration requirement in a way that results in avoidable harm to a service user, the CQC will be able to bring a prosecution against that provider. It is the Government’s sincere intention that the CQC will make use of this important power to hold providers to account for the most serious failings in care.
It is the Government’s view that this new fundamental standard, which comes into force in April, already meets the requirement of the Bill that we are considering. It is important to emphasise that the Government do not intend to amend the registration requirements in response to Clause 1.
I am aware that concern has been expressed regarding the use of the phrase “avoidable harm” in this clause. The Health Foundation, for example, as we have heard, has argued that Clause 1 will draw time away from understanding risk and preventing harm. I do not share that view. Part of being able to assess the risks of receiving care and treatment in order to prevent harm in future involves examining past performance and understanding the causes of past incidences of harm. It is vital that an organisation can learn from its errors in order to improve services to patients and service users.
Furthermore, I say to my noble friend Lord Willis and to other noble Lords that whatever the perceptions, “avoidable harm” equates not to “zero harm” but to harm that can reasonably be avoided. For example, where harm is an inherent part or risk of a regulated activity and it is in the best interests of the patient to receive that regulated activity, this clause would not seek to prevent that activity. However, in providing the service in question, the provider should still take reasonable steps to prevent any harm that is avoidable, such as harm from the use of unclean instruments. I say to the noble Lord, Lord Warner, that this is exactly about providers seeking a continual reduction in harm, given the intrinsic risk that exists in many treatments.
I hope that noble Lords will support the objective enshrined in this clause of causing no avoidable harm. This clause places a duty on the Secretary of State to impose requirements that he,
“considers necessary to secure that services provided in the carrying on of regulated activities cause no avoidable harm to the persons for whom the services are provided”.
The duty on providers is not imposed by this clause: rather, it will be imposed by the regulations that are issued under this clause. I perhaps need to emphasise that to the noble Lords, Lord Turnberg and Lord Hunt. The regulatory levers are already in operation through the CQC registration requirements on the safety of care. The duty set out in the Bill will not change those regulatory requirements. Indeed, from April a regulated provider may be prosecuted by the CQC if the way in which it provides care or treatment causes avoidable harm to a patient or service user, so this is already the case.
The noble Lord, Lord Young, referred to following best practice. The CQC can take relevant best practice into account when assessing a provider’s performance against registration requirements and in reaching a judgment about rating services. Indeed, the CQC’s guidance to registered providers of health and adult social care about complying with the regulations will point to such best practice.
Turning to Clauses 2, 3 and 4, the sharing of relevant information in a timely and accurate manner facilitates the provision of integrated care and treatment, tailored to an individual’s needs and wishes. This information sharing is essential to the delivery of safe and high-quality care. Dame Fiona Caldicott, in her review of information governance, found a culture of anxiety that prevents information sharing, and the current legislative landscape was found to be a contributory factor. The review recommended that the duty to share information should be as important as the duty to protect patient confidentiality. The information-sharing provisions in the Bill seek to create parity between the need to protect information and the need to share it as part of care.
The second clause in the Bill will place a duty on providers and commissioners of publicly funded health and adult social care to record and use a consistent identifier in health and care records and correspondence. This duty will apply only in the best interests of the individual patient and in the direct provision of their care. A long-standing priority of the Department of Health has been to establish the universal use of the NHS number as a consistent identifier when individuals move between care providers. This will support the integration of medical records, reduce errors and facilitate the co-ordination of care. It is our intention that the NHS number will be specified in regulations as this consistent identifier. Others in the debate referred to the national insurance number, but the NHS number is already a well established identifier and the proportion of people in England without an NHS number is very small. Of course, the number of those without a national insurance number is rather greater.
The noble Lord, Lord Turnberg, asked whether this should not apply also to the private sector. The duty to use the NHS number applies only to providers and commissioners of publicly funded health and adult social care. This means that it will apply to NHS commissioners, local authority commissioners and providers of health or adult social care that are public bodies, or are contracted by an NHS or local authority commissioner. Private sector providers would be subject to the duty only in respect of care they provide that is made pursuant to contracts with NHS commissioners.
The third clause in the Bill would place a duty on providers and commissioners to share information. Where it is in the patient’s best interests, providers and commissioners within scope will be required to share relevant information with staff within their organisation, and with other providers and commissioners directly involved in that person’s care. As my noble friend Lord Ribeiro explained, this will reduce the burden of moving between care settings and having to tell your story over and over again. This is especially true in the case of older people, and people with dementia and other complex conditions. It is the intention of these clauses that using a consistent identifier, and having a duty to share information, will help to ensure that health and care professionals will have the information they need to deliver high-quality care. I must stress that the duties within the Bill are strictly limited to the sharing of information for the purposes of direct care and only in the individual’s best interests.
Turning to Clause 4, these duties will not extend to providers and commissioners of children’s social care or the providers and commissioners of children’s healthcare, for which the Department for Education is responsible. I know that concern has been expressed about this exclusion, not least by the noble Lord, Lord Warner. I understand those concerns. Requiring children’s education and social care settings to use a single identifier would extend the scope beyond that of the Health and Social Care Act 2012, which this Bill seeks to amend. As the noble Lord knows, the statutory framework for children’s social care is different, with the DfE the lead department and Ofsted the regulator. Responsibilities have already been placed on professionals and agencies working with children to share information, particularly where there are safeguarding concerns.
There may be benefits in extending the use of a common identifier from the NHS to wider children’s services but, as yet, these benefits have not been assessed against the costs and burdens on local authority children’s services. Implementing a duty to use the NHS number could create significant burdens on schools, which would have to collect and record NHS numbers from all pupils when they enrol in the school. That is why the Department for Education has committed to undertaking an evidence-gathering exercise to fully understand what the impact of using a consistent identifier would be for these types of provision. This exercise is expected to report by the end of the year.
I now come to the fifth clause and the schedule, which will bring in a consistent overarching objective for both the Professional Standards Authority and the regulators of certain health and care professionals, including dentists, nurses, midwives and opticians. This will ensure that public protection is at the heart of what the Professional Standards Authority and these professional regulators do. This overarching objective of public protection will involve the pursuit of objectives in relation to protecting, promoting and maintaining the health, safety and well-being of the public, and promoting and maintaining public confidence in the professions covered by the Bill and proper professional standards and conduct for members of those professions. This measure will also ensure that regulatory body panels dealing with the disposal of fitness to practise cases—that is, making a final decision or considering appropriate sanctions—will have regard to that overarching objective.
The noble Baroness, Lady Pitkeathley, and my noble friend Lord Willis expressed disappointment at the lack of a government Bill on professional regulation, and I think that that disappointment is widely shared. We of course welcome the law commissions’ 2014 report but, in the absence of a government Bill to implement its recommendations in this Parliament, we have taken the opportunity to consider the report and to work closely with the regulatory bodies and the PSA to build on the important work that the law commissions have done. We accept the vast majority of the recommendations and the Government remain committed to legislate on this important issue at the earliest opportunity when parliamentary time allows. I am therefore particularly pleased to throw the Government’s full support behind this Bill, which seeks to implement in part and for some of the regulators two of the law commissions’ recommendations.
The noble Baroness, Lady Pitkeathley, asked how the PSA can have an objective to promote confidence in the professions when one of its functions is to uncover poor performance. Let me explain this a little further. Under the new overarching objective, the PSA and the regulators will have to act in the interests of public protection. The reference to maintaining public confidence is bounded by this overarching objective of public protection and does not mean that the PSA or the regulators should be actively promoting the reputation of the professions, as this does not necessarily serve public protection. Rather, it is concerned with conduct, performance or behaviour of individual members of a registered profession in so far as this threatens to undermine confidence in the profession as a whole, to the extent that people may be deterred from seeking the treatment or care that they need.
It is clear to me that a robust and transparent way to challenge regulators’ decisions, while it may call into question decisions in individual cases, can only contribute to maintaining wider public confidence in the professions as a whole. In some instances, that may mean that poor performance is uncovered. Sometimes it is necessary to do this to increase public confidence in the professions—and of course that is only right. This is not about requiring the PSA to maintain public confidence in individual professionals or even in the regulators, but confidence in the professions. I hope that that is helpful to the noble Baroness.
The overarching objective does not create any additional functions for the PSA. The PSA is an independent body which oversees the work of the nine regulators of health and social care professionals. Its functions remain unchanged and include auditing investigation stage decisions of the regulators’ fitness to practise procedures, referring final fitness to practise disposals to the relevant High Court where necessary and reporting on the performance of the regulators.
Under this Bill, while discharging particular functions in relation to the regulators—that is, promoting best practice in professional regulation, formulating principles relating to good self-regulation and encouraging co-operation between the regulators, and between them and other bodies that exercise corresponding functions—the PSA must have in mind the overarching objective of public protection. This may involve the PSA, in its role as overseer of the regulators, taking such appropriate actions as may be available to them in the circumstance that regulators have not acted in accordance with their own overarching objectives.
I know that the PSA is particularly concerned with consistency in the legislation governing regulation of health professionals. Ensuring consistency of purpose in professional regulation and how it is overseen through the introduction of a consistent overarching objective was a key recommendation made by the law commissions in their review of regulation of health professionals published last year.
I also know that the department and the PSA share the common principle that any legislative change must have public protection at its core. I would just say that the definition of “public” in the Bill encompasses patients, users of healthcare and social care, and,
“other members of the public”,
as defined in the PSA’s existing objective. I say to the noble Baroness, Lady Pitkeathley, that my officials are happy to continue the discussions which I know have been conducted recently in order to give any further clarification that might be helpful. As the Government set out in our response last week, we support this principle and we hope to see public protection placed clearly and firmly at the heart of professional regulation through this Bill and through parallel secondary legislation for the GMC, which will shortly come before this House.
I should like to clarify the effect of Clause 5 and the schedule for my noble friend Lord Willis. The Bill introduces a duty on regulators’ panels and committees. It does not affect the regulators’ fitness-to-practise processes. My noble friend mentioned the NMC’s fitness-to-practise caseload. I reassure him that the department has recently taken forward secondary legislation in relation to the NMC to help it to carry out its fitness-to-practise and registration functions more effectively. I am happy to write to my noble friend if he would like further and better particulars.
At the risk of overstaying my welcome at the Dispatch Box, I hope that I may be allowed to cover briefly a point which arose as the Bill passed through the House of Commons and which I know is of concern. The BMA has raised concerns about the requirement for fitness-to-practise panels and committees to consider “public confidence” when making final decisions about the application of the term “well-being”. I understand that the BMA recently had productive discussions with my honourable friend the Parliamentary Under-Secretary of State for Health, Dr Dan Poulter, and has been much reassured by the intention for the overarching objective to be set out in secondary legislation for the GMC and in this Bill for other regulators. Indeed, the BMA wrote to my honourable friend yesterday to confirm this and to seek further assurances about the form that guidance might take and how it might clarify how regulators’ panels and committees should apply the overarching objective in practice, particularly the interpretation of the terms “public confidence” and “well-being”. These concerns relate particularly to issues raised by a recent GMC consultation on sanctions guidance.
Noble Lords will understand that the GMC’s handling of fitness-to-practise cases is not within the scope of this Bill. However, these issues are likely to be relevant to the other regulators who will be subject to the new, overarching objective. Of course, I cannot say on behalf of the regulators how they should give guidance on their internal processes, but I will ensure that my officials raise these issues with the professional regulators when considering the implementation of the objectives, as part of both this Bill and the GMC legislation, and can confirm that the GMC will seek views on implementing its secondary legislation through a public consultation.
I think that that is enough from me. I will of course write to noble Lords, as I have promised, on other matters.
Lord Warner
Will the Minister clarify something that he said in relation to what I said in my speech? He said that the Bill cannot cover children in relation to health and social care. I have just read the Long Title and the Title. I can see nothing there that specifies particularly adults or excludes children. I would welcome it if he could write to me to explain what the legal judgment is as to why an amendment that relates to health and social services only—not police, not education—should not be included in the Bill in respect of children.
Lord McColl of Dulwich
Before the Minister sits down, could I ask him about the WHO checklist? When I go into an operating theatre, the operation cannot start until that list is completed by the surgeon, the anaesthetist and the nurses. Could that be put into regulations?
Lord Rea (Lab)
Perhaps I may be the third Member of the House to ask the Minister to answer a question before he sits down. There has been a lot of talk about there being no government time properly to discuss many issues that have been brought up in this debate. The Minister did not answer the point made by my noble friend Lord Hunt, but there is very little government legislation in the pipe now and time could almost certainly be found. I accept that Private Members’ Bills are normally considered only on Fridays—there are not very many Fridays left—but, as this Bill is a quasi-government Bill, I feel that perhaps the Government could make time for it.
Earl Howe
My Lords, I am sure that the noble Lord is aware that the timetabling of business is not a matter for the Government. My understanding from the usual channels is that Private Members’ Bills cannot be given government time or priority treatment. However, I have no doubt that, having listened to the comments made in this debate from all sides of the House, the usual channels will wish to have further discussions.
Lord Ribeiro
My Lords, I thank all noble Lords who have taken part in this interesting debate. I very much hope that the Minister has addressed most of the questions that have been raised. I know that the concerns of the noble Baroness, Lady Pitkeathley, have been addressed. She made a clear case on the confusion about the role of the PSA as an auditor as opposed to a regulator. That needs to be borne in mind.
The noble Lord, Lord Willis, was clear that this Bill is proportionate, logical and deliverable. That is the point—it is deliverable. We have heard a lot about the Berwick advisory group, which has flown the kite of zero harm. It probably has not helped that in the immediate period after Mid Staffs we were keen on some sort of zero harm. Earlier, I referred to Mr Ken Lownds and his interest in patient safety. He has been one of the champions of zero harm. As a surgeon, I know that it is an aspiration that ultimately, if the systems are in place, it is possible to head towards. Although the Berwick advisory group says that,
“zero harm is a bold and worthy aspiration”—
not an intention but a “worthy aspiration”, I say to the noble Lord, Lord Turnberg—it is about timing and the pace of change. It is something that we should aim for, but in order to get there we have to make sure that when hospitals are inspected by CQC it finds that the systems are in place to ensure that harm does not occur. That is the whole purpose of the Bill. The noble Lords, Lord Turnberg and Lord Warner, were very exercised by this area and I hope that we have gone some way to address it.
The noble Lord, Lord Young, raised a good issue. I meant to put it in my speech, but I thought that my speech would be too long—I think that I said to the health team that it might take anything up to 20 minutes, but when I heard what was going on this morning I decided to reduce it. The noble Lord made a good point and I am glad that he did, because those who listened to Dr Atul Gawande, the 2014 Reith lecturer, know that he was the architect of the checklist, which he introduced with the WHO. I remember being approached by Sir Liam Donaldson when I was president of the Royal College of Surgeons to see whether the college could sign it off. I thought that it was something to be used in developing countries, not in the UK, but typically the NHS instituted it. There is a question of whether it should be legislated for. In answer to my noble friend Lord McColl, in surgery it is the recommendation of the college and all the specialist associations that surgeons and anaesthetists should follow the checklist. The difficulty always comes with emergencies, which is where legislation may be difficult—if somebody is bleeding to death, there is not time to sit and have a chat about whether we have everything that we need before we start, which is what that involves.
The noble Lord, Lord Hunt, referred to Clause 1 and zero harm. We have dealt with that and the near misses and I think that that deals with the point about the checklist, too. As I said, I am chairman of CORESS, which is to do with having confidential reporting of near misses so that we can advise surgeons on how to avoid them happening again, using the airline industry as a template of how to avoid harm. That is what all this is about: avoiding harm.
Finally, the noble Lord, Lord Hunt, made a point about Mencap. I take on board the fact that Mencap would like see to see an amendment so that the health information of all those who are poor communicators can be taken into account, as we tend to look at people in terms of the information that they give rather than how they give that information. I wonder whether that could be put in guidance when the legislation comes through. Certainly it will be looked at.
I again thank everyone who has taken part in the debate for their contributions, which have been most helpful. I ask the House to give the Bill a Second Reading.
Self-build and Custom Housebuilding Bill
Lord Best (CB)
My Lords, I am grateful to noble Lords for their presence on this late Friday afternoon to consider this Private Member’s Bill, which comes to us from the other place. I congratulate the Member for South Norfolk, Richard Bacon, on bringing this Bill forward. He has been a passionate supporter of self-build and custom housebuilding, which this Bill seeks to promote. He has played a pivotal role as chairman of the All-Party Parliamentary Group on Self-Build, Custom-Build and Independent Housebuilding in connecting Westminster with this fledgling industry.
The Bill, which passed, happily, through all its stages in the other place and comes to this House unamended, is intended to boost the number of homes which people create for themselves as an alternative to buying properties off the shelf, already fully fitted out. The participation of the future occupier may range from close engagement in the whole process on a greenfield site, through to taking on an empty shell—a concrete box, with no bathroom, unplastered walls and only the drainage and electricity laid on—and kitting it out to their own specification. Whatever the format, this co-production process is likely to involve a partnership between the customer and a builder, developer, housing association or a specialist firm, such as Inhabit, which has given me helpful information for this debate.
This way of producing new homes contrasts with the usual model in the UK, where a small number of volume housebuilders, such as Barratt and Taylor Wimpey, build the vast majority of homes. The nation needs the skills of these major players to help us generate the significant number of extra homes required each year. However, the housebuilding industry, prior to the banking crisis and the credit crunch, also comprised many smaller builders working at the local level. To increase present output from some 150,000 homes a year to at least 200,000, it is imperative that we bring back these SME builders. These are the organisations best equipped to take on awkward, smaller sites which do not suit the big national firms. Custom housebuilding could be hugely significant in creating the opportunities for additional supply over and above the efforts of the handful of huge housebuilding companies. Self-build and custom housebuilding not only generates an alternative and additional source of supply, it also brings variety, diversity of design and innovative practice into the industry. Surveys indicate substantial appetite for engagement in the housebuilding process by its future occupiers, and very high levels of satisfaction for those who solve their housing needs through this route.
It is revealing to note that the UK differs from its European neighbours and from the USA, Australia and elsewhere in its low levels of self-build and custom-built homes. While they have accounted for 5% to 10% of completed housing in the UK over the past decade, they have comprised more than 50% of all new homes in Germany, France, Sweden, Italy, Belgium, Ireland, Austria, Switzerland and others. We are clearly missing out on a significant stream of extra and much appreciated new homes. It is worth adding that this approach to building new homes also saves the future occupiers up to 25% on the cost of the equivalent home on the open market. Savings can come from the input of actual labour by the self-builders or from shopping around for goods and services. I heard of the purchaser of a basic shell who bought all the kitchen units second-hand on eBay, saving a small fortune in the process. There are fantastic examples of groups of people working together to create the homes they want, often through the vehicle of a community land trust, and indeed including affordable rental accommodation in the mix of homes.
I am glad to report that the Bill had strong cross-party support in the other place. In introducing the legislation, Richard Bacon pointed to the serious issue of underprovision of housing that has not been solved for a generation. He said:
“I contend that if we open up choice and empowerment to the customer—I mean ‘customer’ in the broadest sense, including those in the market for affordable rental properties—we will start to make a significant difference”. —[Official Report, Commons, 24/10/14; col. 1167.]
For the Opposition, Emma Reynolds, the shadow Housing Minister, expressed her party’s backing for the Bill, saying that it would increase choice and quality in the market and promote self-build to a “wider range of people”. Brandon Lewis, the Minister for Housing and Planning, said that the Government strongly believe that custom and self-build housing can play a crucial role,
“in securing greater diversity and helping to deliver the homes people actually want”.—[Official Report, Commons, 24/10/14; col. 1181.]
Turning to the details of the Bill, the legislation aims to engage all relevant local authorities with this route to new housing. It would require the authority to establish, maintain and promote a register of persons, whether individuals or associations of individuals, who wish to acquire serviced plots of land in the authority’s area to build or commission their own homes. While there are some great examples of local authorities supporting initiatives of this kind in their areas, the requirement will raise the profile of self-build and custom housebuilding in every area. The Bill will then require local authorities to have regard to the demand for custom and self-build on the new register when the council carries out its plan making, housing, regeneration and land disposal functions. Through the creation of the register and the requirement on authorities to have regard to it, the Bill addresses the key problem of land supply for the growth of this emerging sector. It makes self-builders and custom builders more visible when local authorities are allocating land for housing in their local plans, regenerating their areas and disposing of surplus public land.
It does not, I am glad to say, impose any significant cost on local authorities, with the Government funding any net cost burden, which is estimated at up to £5 million a year, across the whole of local government. I have also been very pleased to see the Government bring forward a repayable loan fund to assist projects by providing on-site infrastructure; that is, funding the services and utilities for these homes. Some £150 million was set aside last June and this fund is being administered by the Homes and Communities Agency.
I think that noble Lords will be heartened, as I was, to hear about examples of support for custom and self-build by vanguard local authorities such as Cherwell District Council, which is developing some ex-MoD land to include custom-built projects where owners design their homes and employ local contractors to build them. Stoke-on-Trent City Council has created new access, drainage and utility service connections to make a development site “shovel-ready” for buyers to build their dream homes on six plots. Another of the so-called vanguard authorities, Teignbridge District Council, is including a specific custom-build policy in its adopted local plan to require a proportion of self- build plots in all large developments. Oldham Council is working with a community build group to develop 37 homes on land previously in the council’s ownership, and so on. My hope is that the Bill will stimulate similar engagement by all relevant councils up and down the country.
I know that your Lordships’ Delegated Powers and Regulatory Reform Committee has criticised the drafting of the Bill in two places. I completely understand the points being made. I feel sure that the Minister will wish to comment on these criticisms; namely, that the definition of a “serviced plot of land” in Clause 5 ought to be in the Bill, not in regulations; and that guidance about the register in Clause 3(1) and (2) ought itself to be laid in draft before Parliament and subject to parliamentary scrutiny. I would just make the comment that there seems to be some rather exceptional justification for the approach taken by the Bill. The definition of a serviced plot has to take on board the views arising from the extensive and welcome consultation process just recently concluded and ought to await the feedback from the 11 vanguard local authorities that are due to report in the spring. The definition is likely to benefit from the refinements which that evidence should provide; for example, it is not yet clear whether a derelict building ripe for conversion could fall within the definition. The agreed definition will then go through the negative resolution procedure in both Houses of Parliament.
In relation to the guidance from central to local government, I know that the idea is to have a full consultation period with all interested parties before any guidance is formulated. I am sure that copies of the draft guidance will be deposited in our Library and that of the other place. But it is also envisaged that the guidance will then evolve over a year or two, with variations in that guidance for the relevant authorities, which are as different as the City of London and very rural national parks. It would be difficult, I can see, to satisfy requirements for statutory consultation taking a minimum of 12 weeks each time for each part of this emerging guidance. I am sure that the Minister will be able to add to this and I hope your Lordships will agree that the circumstances justify the way forward taken by the Bill.
In conclusion, this is a modest Bill that will not overnight change the way we create new homes, nor make sufficient difference to the chronic shortage of homes in so many parts of the country. But what it could do—and I believe it will—is start a process which, bit by bit, could prove of fundamental importance in raising the quality and quantity of much-needed new homes. I underline my indebtedness to Richard Bacon MP for his invaluable commitment to self-build and custom housebuilding, and for bringing this potentially very significant Bill forward. I strongly commend it to your Lordships’ House. I beg to move.
Lord Young of Norwood Green (Lab)
My Lords, I will do my best to act as a stand-in for my noble friend Lord McKenzie. I do not profess to be an expert on this subject but it is one that I have a lot of enthusiasm for.
It will be clear from the deliberations in the other place that we support and welcome the Bill. As we have heard, it aims to make it easier for prospective self-builders and custom builders to seek a suitable plot of land for their homes. We offer our congratulations to Richard Bacon MP on using his place in the Private Members’ Bills ballot to address this important issue and on his skilful steering of the Bill through the Commons. It is a particular pleasure to see that the noble Lord, Lord Best, has taken the responsibility of steering the measure through your Lordships’ House. His engagement in matters of housing we see as a quality assurance mark, which noble Lords can see from the quality of the contribution we have just heard.
It is also important that the Bill has the full support of the Government, who are focused on the right to build and see its provisions as enacting the first element of the right: that is, the establishment by local planning authorities of a register of prospective custom builders who are seeking a suitable serviced plot of land. The Minister may wish to say something about the timing of later stages, given how close we are to the end of this Parliament.
We support the Bill for a number of reasons, but fundamentally because we see self-build and custom housebuilding as being able to make a more significant contribution to meeting housing needs than hitherto and because, in part, it would give opportunities to those who believe themselves shut out of home ownership —a considerable number of people these days.
Of course, this is not just about first-time buyers. It is as much about existing homeowners wanting a bigger—or even smaller—property than the one they currently own. Evidence submitted to the independent housing commission chaired by Michael Lyons suggested that it would be possible to contribute a further 10,000 to 20,000 units per year—a reasonable ambition. The two strands of this—self-build and custom build—are becoming distinct, the first being more hands-on and the latter where the individual is more reliant on a specialist developer or expert. But each leads to the prospect of better design and quality, greater focus on energy efficiency and more regard to what the surrounding environment will be. In particular, custom build can act as a catalyst for more diversity of providers and more opportunities for smaller housebuilders. I cannot help but reflect that it will also mean that a greater group of people will acquire skills that they did not previously possess. Who knows, it might even enhance the number of apprenticeships.
Our briefing note tells us that there is no conclusive figure for the number of self-build and custom-build properties completed each year but that the sector generally accounts for between 7% and 10% of new housing across the UK. The UK Self-Build Market Report suggested that the second quarter output for 2013 represented around 8% of all new housing completions and 28% of new detached homes. Indeed, as my honourable friend Emma Reynolds said in the other place when the Bill was discussed, research by the University of York found that the market is dominated by an older, asset-rich demographic. This underlines the need to promote custom and self-build to a wider range of people. Having said that, we know that there are good examples of custom build being used to create social housing—a point made by the noble Lord, Lord Best. He also stressed the added advantage of better participation and satisfaction. He gave some very interesting statistics showing that the UK is missing out in this vital area.
We are building about half the number of homes we need to keep up with demand. The shortfall has not only arisen under this Government. We know that home ownership is continuing to decline. A record number of young people in their 20s and 30s live at home with their parents. Some 9 million people live in the private rented sector—with some difficulty, given the rising cost of rents. Of course, this Bill will not fundamentally change all that, but it can make a difference. We need a comprehensive and sustainable plan to tackle our housing crisis. We need specific measures to help self and custom housebuilding, where some of the more general problems are more acute. Those problems are, as we know, access to suitable sites and appropriate funding, the challenges of the planning system and the capacity of smaller developers.
The Lyons review offered prescriptions, some following the experience of European countries, which include encouraging local authorities to act as master developer on assembled sites, local authorities having a more proactive role in site assembly, and giving some form of priority to the use of surplus public land. Each should be taken forward. The noble Lord, Lord Best, gave really good examples of proactive local authorities having real impact and making a difference in this area. I hope that the Minister will address this; surely we should encourage that kind of approach.
It is acknowledged that the Government have and are looking at a variety of initiatives, but we are faced with uncomfortable statistics suggesting that fewer people are building their own homes than at any time in the past 30 years. This is attributed in part to the slow recovery of the self-build mortgage market. Our briefing also makes reference to the limited impact on actually increasing the number of additional homes because the self-built home is built on brownfield land where existing dwellings have been demolished.
As to the specifics of the Bill, we support the duty to keep and publicise a register of those who seek to acquire serviced plots for individuals to build properties that must be homes. It would become a mandatory requirement and would help better understand levels of demand. That raises a number of issues which are explored in the Right to Build consultation and the experience of the 11 Right to Build vanguard authorities. These would feed through via regulations and statutory guidance. The consultation quite properly explores some of the detail that might emerge in those regulations and guidance, particularly around the scope of preferences that can be expressed and a local connection test.
Of course, the other leg of the Bill addresses the supply side—the requirement for local planning authorities to have regard to the register when exercising relevant functions, which include housing, planning, land disposal and regeneration. We recognise that “having regard to” is a somewhat imprecise requirement on local authorities, and suggest that future legislation might impose a new statutory duty to bring forward land to meet the demands of the register when it is reasonable to do so—a debate for another day, perhaps.
This is a worthy Bill that demands our support. The timetable may prevent its further advance during this Parliament, but it has caused a necessary focus on an important element of housing provision and helped to raise its profile. The political consensus that it has demonstrated should encourage further action in the next Parliament.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)
My Lords, first, I join in thanking the noble Lord, Lord Best, for bringing the Bill to the House and for his contribution to developing the custom and self-build housing sector. We are indeed fortunate in your Lordships’ House, and it is entirely fitting, that someone with a lifetime’s experience in housing is taking the Bill forward, and I am extremely grateful that it will benefit from his expertise through its progress.
It is always a pleasure to welcome the noble Lord, Lord Young, to the Dispatch Box. He said that he perhaps did not know the in-depth detail of the issue, but enthusiasm is always a welcome addition to any debate. I am encouraged by the fact that we may have aspiring self-builders in the House, as the House is beginning to attract some attention from noble Lords who are entering it.
It would be remiss of me not also to pay tribute to my honourable friend Richard Bacon, the Member for South Norfolk, as did the noble Lord, Lord Best, for his handling of the Bill in the other place. As many know, he has been a passionate advocate of custom and self-build, not only through the Bill but in his sterling work for the all-party parliamentary group, where he has fostered cross-party support. We have seen that in evidence in the debates on the Bill in the other place and in your Lordships’ House today. As the noble Lord, Lord Best, rightly said, there was consensus in the other place that the Bill is a tremendous opportunity to develop the custom build sector and increase housing supply. He made a strong case for the Bill, and I take this opportunity briefly to explain why the Government are pleased to support it.
The Government are committed to increasing and diversifying housing supply and helping more people to own a home of their own. We have worked hard to speed up housing delivery, which was at its lowest levels since the 1920s when we came into office. More than 500,000 new homes have been built since April 2010, and the number of starts on new homes is at its highest since 2007.
We also want greater diversity in the housing market. More competition, more new entrants and more new development should mean not only more new homes but improved standards of design and sustainability.
We are indeed actively supporting small and medium-sized house builders—a point well made by the noble Lord, Lord Best—and encouraging them further. The custom and self-build housing market provides the means for diversifying the market and delivering more high-quality homes.
As we heard from the noble Lord, Lord Best, only 10% of homes in the UK are custom or self-built compared with more than 80% in Austria, 50% in the United States, and almost 60% just across the way in Ireland. That is despite research showing that 1 million people want to build their own home in the next year.
We heard the noble Lord talk about eBay. Perhaps that is another area to explore, but at present the market is relatively undeveloped, contributing about 12,000 self and custom-built homes a year in the UK. This is a direct result of three identified key barriers: limited availability of suitable land, access to finance, and access to advice. We have worked with the industry to overcome those barriers, and we are encouraging more land to be made available by requiring authorities to assess and plan for housing need, including for custom and self-build. As noble Lords will know, we have launched the £150-million serviced plots fund to finance up to 10,000 plots. We are also engaging with lenders to improve the number of mortgages available.
The Self Build Portal now provides advice for prospective custom builders, local authorities and industry as a whole. Exemptions from the community infrastructure levy and additional changes to Section 106 affordable housing contributions will potentially save self-builders thousands of pounds and, of course, speed up developments. These policies are having an impact. There are now more than 5,000 new plots in the pipeline. We want to go further and double the output of the sector over a decade so that more than 20,000 homes are built each year, but people struggle to access suitable plots of land.
The Government consulted in the autumn on a new right to build. We are working with 11 vanguard authorities to test how the right will work across the country. These vanguards, and learning from the consultation, will further inform the regulations from this Bill. I assure your Lordships that we are legislating only for the first element of the right today: the requirement for authorities to establish a register. I also assure the noble Lord, Lord Young, that our intention is to take forward the full right in the next Parliament. We want to ensure that the right builds on existing planning policy, including protections for precious landscapes, and that we have fully considered the role of local authorities in bringing forward land without creating unnecessary burdens.
The noble Lord, Lord Best, rightly pointed to the report published yesterday by the Delegated Powers Committee. We will in due course reply as appropriate to that report, with the input of the noble Lord’s expertise and that of my honourable friend. Let me say briefly in response that the regulations that we are seeking to build on will learn from the parliamentary debates, the consultation responses and the vanguards. The guidance will of course support local authorities in interpreting and applying complex and technical issues contained in regulations about the operation of the register, and provide a steer about how local authorities should have regard to the register when exercising their planning and other functions so that their response is proportionate. I assure the House, and the members of that committee, that the department is totally committed to consulting local government and other partners about the content of the first guidance.
In conclusion, the Bill provides an opportunity to take the first step in mainstreaming custom and self-build. The Government support this Bill, and we thank the noble Lord, Lord Best, for taking it forward. I hope that it will have a speedy passage on to the statute book.
Lord Best
My Lords, I am very grateful to the Minister and the noble Lord, Lord Young of Norwood Green, for their input to this debate and for demonstrating that there is absolutely cross-party support for this legislation. My hope is that we can fit within the timetable by taking this forward, and see it on the statute book within this Parliament. That is our aim and I hope that the foot is on the accelerator now. I know that the noble Lord, Lord Young, delivered a speech prepared initially by the noble Lord, Lord McKenzie of Luton, who I thank for his work. The noble Lord, Lord Young, added his own enthusiasm in that helpful contribution, which was greatly appreciated.
The Minister underlined the Government’s support for this and I congratulate the Government on the steps already taken to take forward self-build and custom housebuilding. It is good to know that this is just a first step and that there is a firm intention, as I think there is on all sides, to take this concept forward to a full right to build in the next Parliament. That is something to look forward to, but at this stage I conclude by asking the House to give the Bill a Second Reading.
Bill read a second time and committed to a Committee of the Whole House.
International Development (Official Development Assistance Target) Bill
(9 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord MacGregor of Pulham Market (Con)
My Lords, before the noble Lord, Lord Best, leaves the Chamber it is highly appropriate that this debate follows the Second Reading of the housing Bill, which he has just introduced. That Bill originated in the House of Commons and was led, designed and carried through by my very good friend Richard Bacon MP, who is not only an admirable MP but was my successor as Member of Parliament for South Norfolk. I know him and his housing interests very well. I am delighted that the Bill is making such good progress, and I am delighted to see Richard Bacon here with us now. It is also highly appropriate that he listens to some of our debates now: he is an admirable member of the Public Accounts Committee as well as the House of Commons, has written an extremely well researched book about getting value for money and avoiding waste in whole sectors of government departments, and is a very strong advocate of value for money. In fact, that is what quite a lot of our debates are about today.
The amendment that I am dealing with now is straightforward and probing. Clause 1(2) says:
“Whether the 0.7% target has been met by the United Kingdom in any year is to be determined for the purposes of this Act by reference to the amounts specified for that year in an annual report”.
Subsection (3) says what an annual report means, but it does not say who determines whether that 0.7% has been met, and it must do so. Is it just the department, or is it underpinned and independently verified from outside? We believe that it should be the latter, and that this is best done by the Office for Budget Responsibility, which has established its independent position for establishing and verifying such issues. I beg to move.
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
I must advise the Committee that if this amendment is agreed, I am not able to call Amendment 7 by reason of pre-emption.
Lord Purvis of Tweed (LD)
My Lords, I am grateful to the noble Lord for keeping his word this morning when he said that his subsequent contributions would be brief. I am not willing to accept his amendments because I do not think that the OBR is the appropriate body to carry out this function. The OBR has four main objectives, which are perfectly clear: to provide five-year forecasts on public finances, to use public finance forecasts to judge the Government’s performance on fiscal targets, to scrutinise costings of tax and welfare plans, and to assess the long-term sustainability of public finances. It also has an additional role: to assess the performance on the welfare cap.
The fundamental role of the OPR is for future forecasting and to have a relationship with, and report to, Parliament on that basis. However, thanks to the Independent Commission for Aid Impact—reporting to Parliament, as has been indicated previously in today’s proceedings—we now have a wealth of 40 reports, informed not least by the more recent work of the Office for National Statistics. Indeed in the latest report, which I am sure my noble friend has looked at, the ONS is quite clear that there is now a straightforward way of the ONS doing its work, informed by information from the Treasury and DfID and having clear reporting as to whether the UN target has been met. Reporting mechanisms have already been established in law. In addition, the International Development (Reporting and Transparency) Act 2006 is already on the statute book, providing, I hope, much of the satisfaction that the noble Lord seeks.
Given that explanation, and the fact that not only does the Bill offer a framework to be used but existing statutory reporting mechanisms have been in place for nearly a decade, I ask the noble Lord to withdraw his amendment.
Lord MacGregor of Pulham Market
I thank my noble friend Lord Purvis for that response. It is very helpful to have it on the record, and I beg leave to withdraw the amendment.
Lord Lawson of Blaby
“Exceptions
The provisions of this Act will cease to apply for the following year if—(a) spending on ODA as a percentage of gross national income in any year is above one-eleventh of spending on health,(b) spending on ODA as a percentage of gross national income in any year is above one-eighth of spending on education, (c) any shortfall in meeting the 0.7% target could only be met by increasing spending on ODA in any one year by more than 5% in real terms, or(d) the United Kingdom Government is running a budget deficit that is higher than 5% of gross domestic product.”
Lord Lawson of Blaby (Con)
My Lords, this amendment is also in the name of my noble friends Lord McGregor and Lord Tugendhat, as well as the noble Lord, Lord Lipsey, who, as we have heard, unfortunately is unable to be with us today.
A number of the earlier amendments were concerned, as I should think all helpful amendments are in practice, to create a degree of flexibility, which is necessary for good government and in particular for the control of public expenditure. I regret that even though it is customary for this House to rise at 3 pm on a Friday, it is now 4 pm and we are still going. The Bill does not seek emergency powers or anything like that; it should have been tabled for the very first Session of this Parliament, as I think was promised, but we have had to wait until now. That is highly undesirable and somewhat disreputable conduct along the line.
Lord McConnell of Glenscorrodale (Lab)
In response to that point, it is important for noble Lords and for the noble Lord himself to note that the Bill was carried on a Friday, shortly before a general election, with Members of all Houses turning up in large numbers. The Conservative Members of Parliament in the other House voted 58 votes to six; Labour Members 70 to zero; and Liberal Democrats 30 to zero. It is clearly the will of the elected Chamber in the other place, so it is entirely appropriate that this House helps to expedite and not block the Bill.
Lord Lawson of Blaby
It is our job to do our duty. That argument could have been used by the noble Lord and the noble Lord’s office opposite when the European Union referendum Bill came to this place. I did not hear any of them saying that we should accept it because it had gone through by a large majority in the other place. Therefore that disposes of the noble Lord’s objection.
I will say a little more about what this amendment is about. Earlier amendments have been designed to create an area of flexibility which is necessary for good government and for the proper control of public expenditure and conduct of public expenditure, and as I was about to say before I was interrupted, the noble Lord, Lord Butler, who has great expertise in these matters, was very strong on the need for flexibility. This has nothing to do with aid in particular but is necessary for public expenditure overall.
This amendment points to particular forms of flexibility. For example, paragraphs (a) and (b) of this proposed new clause relate spending on ODA to the amount of spending on health and education respectively. People in this country feel very keenly about spending on health, and the party opposite speaks almost of nothing else at present. The people of this country feel very keenly about spending on education. There needs to be some comparison of priorities—some connection between the spending on ODA and on other departments. Here we single out health and education, but of course the question of spending on defence was already raised earlier in our debate. There is a 2% NATO target, which of course is not legally binding but is an aspiration; this goes much further. At a time when there is great danger to this country and the world has become a much more dangerous place, that also should be compared with it. However, I will confine myself to spending on health and on education.
There are two other paragraphs in the proposed new clause. The third paragraph says that if the,
“target could only be met by increasing spending on ODA in any one year by more than 5% in real terms … the target should be set aside”.
It is a massive amount, and it is almost certain that we would not get value for money if there were a huge increase in spending in any one year. That would get the Secretary of State and the Government of the day off the hook.
The fourth paragraph to give the Government the flexibility to get off the hook is if there is a budget deficit of above,
“5% of gross domestic product”.
We all know that the budget deficit is too high. All parties are agreed that it has to come down. If, for whatever reason, it is not coming down satisfactorily, that is a serious business, and it should be a reason why in that particular year the Government are not on the hook of the 0.7% aid target.
On the status of the target, questions were put which were not really answered by the Minister, nor by my noble friend behind me who proposed the Bill in this place to questions asked by my noble friend Lord Forsyth about the precise nature of the legally binding commitment. Legally binding sounds, to me, like legally binding. It sounds similar to the Climate Change Act, where there are legally binding targets for the reduction of carbon dioxide emissions. Apparently, it is legally binding—and, no doubt, my noble friends Lady Northover and Lord Purvis will answer specifically on this point. When my noble friend Lord Forsyth raised it, it was not adequately answered, but scrutiny of the Bill seems to make it the case that it is not really legally binding at all. All the Government are bound to do is to lay a report to Parliament saying why the target has been missed.
I hope that this proposed new clause will be accepted, as it is very reasonable and designed to be helpful. I hope, in addition to that, the question of the nature of whether the legislation is legally binding can be clarified. I beg to move.
Lord Forsyth of Drumlean
I support my noble friend in respect of this amendment. Our GDP is forecast to increase by more than 3%, which will mean that more than £400 million extra will have to be spent on overseas aid next year to meet the target. That is at the same time as the Chancellor saying that we are in an age of austerity. Given what the Chancellor said in his Autumn Statement and given the OBR’s projections, government spending as a proportion of GDP—or gross national income, if you prefer that terminology—will have to come down. So, as the OBR has highlighted, even health spending will come down as a proportion of GDP. If the Bill goes through unamended, the percentage of government spending that goes on overseas aid will have to keep rising rather than remain constant. Is that the intention—that the spending on overseas development aid not only should be ring-fenced and given special status but should always rise as a proportion of overall government spending? I believe that my noble friend’s amendment addresses that particular anomaly, and I look forward to hearing from the sponsor of this Bill, the noble Lord, Lord Purvis, as to whether that is indeed his intention.
I do not want to detain the House. I just say to the Front Benches that I think that it is absolutely outrageous that the business was changed and that we are dealing with these very important matters at 4 pm on a Friday afternoon, particularly since this is apparently a Private Member’s Bill. I look forward to citing these precedents in future regarding other Private Members’ Bills. If the Government think that this will in some way prevent the House from having an opportunity for all Members to be here to debate these matters, they have another thing coming. There is another stage, Report, when I hope we will be able to discuss these matters more fully. On that basis, I leave it at that in respect of this amendment.
Lord Purvis of Tweed
My Lords, the whole concept of seeking to add legislative exceptions to the UK meeting its international obligations, in comparison with other levels of expenditure choices that any Government of the day may make, is not consistent either with our undertaking to meet the 0.7% target or with the Bill. That alone would be sufficient reason for me not to accept the amendment, but there are two others.
The first is that the amendment does not make clear what “health spending” means. Is it health spending in England? Is it United Kingdom health spending? Is it health and social protection? Is it health and social care? Is it current health expenditure or health capital expenditure? The second proposed new paragraph of the amendment refers to education: is it education across all nations of the United Kingdom? I need not go on, other than to highlight the deficiency of the amendment.
The second reason is that the amendment is slightly confusing. I suspect that if I had accepted previous amendments for only one report over a five-year period, this amendment could not have been moved because it calls for annual reporting, which the mover of the amendment said was not an appropriate way to go forward because there should be a single five-year report.
Lord Purvis of Tweed
My noble friend will have an opportunity to sum up this short debate. I am sure that, in his argument, he will do the best he can to defend what is an indefensible amendment.
Our legislation needs to be robust. Therefore, I think that the amendment is deficient in comparison with the 2006 Act and its reporting mechanisms—to which no one putting forward amendments has yet referred—and with the OECD DAC’s clear areas of reporting.
Finally, I addressed the points that my noble friend Lord Forsyth made before the break in proceedings today. Just because noble friends do not agree with my propositions, it does not necessarily mean that I have not answered the questions. Nevertheless, with what I hope is clarification regarding the deficiencies of the amendment and why I cannot accept it, in that spirit, I hope the mover will withdraw it.
Lord Forsyth of Drumlean
The noble Lord has been asked two specific questions. One was asked by my noble friend, which was whether the Bill is a paper tiger and there is no sanction on any Secretary of State if they do not meet the target, other than that they must produce a report explaining why. With respect to the noble Lord, I do not think he answered it. All he has to say is, “Yes, that’s right”.
The second question I put to him was: is he really content to have the effect of this Bill in an era where public expenditure is being restrained? We hope that the economy will start to grow; the effect of the Bill will be that spending on development aid will rise as a proportion of overall government expenditure, unlike any other programme.
Lord Purvis of Tweed
In maintaining our target of 0.7% of GNI, it is perfectly clear what profile GNI will have with the profile of expenditure. That is part of our undertaking. That is not being introduced by the Bill. This is where my difficulty is with my noble friend. The Bill is not introducing that concept; the United Kingdom has adopted that concept over many years and Governments, including the Government of which he was a member. As referred to earlier, it is regrettably the case that while my noble friend was Chancellor of the Exchequer the United Kingdom was meeting only 0.26%, as my noble friend Lady Chalker indicated at Second Reading. Indeed, in the Government that my noble friends were part of, the United Kingdom was the sixth largest contributor to aid. We are now the second largest. I consider that something that the United Kingdom should be proud of, but maybe the noble Lords are in sincere disagreement on that.
I turn to the second aspect of the legislative basis. I said to my noble friend that the legislative basis is clear on the duties on Ministers in the Bill and the duty of accountability that Ministers have to Parliament. That is perfectly consistent with, for example, the legislation that my noble friend supported—the Budget Responsibility and National Audit Act 2011. That established the Charter for Budget Responsibility and placed duties on Ministers to report to Parliament, with Parliament holding them to account and the electorate deciding whether Parliament was doing its job. The Bill does not deviate from that approach; it is consistent with parliamentary accountability and ministerial duties.
Lord Forsyth of Drumlean
Again, can the noble Lord answer the question that I asked him? Is he content to have a situation as a consequence of the Bill where the proportion of government expenditure that goes on overseas aid rises while it does not rise for other programmes? That would be the effect of what he is proposing.
Lord Purvis of Tweed
I referred to the very useful Library paper which shows that the UK’s contribution to development aid since the 1980s has gone up in absolute terms and, of course, as a proportion of overall expenditure. That is clear and it is something of which I, as a Liberal Democrat, am proud. It means that we have met our international obligations that were set many years ago, and we can now see a more reliable and predictable trend for that expenditure going forward. I take delight in answering my noble friend’s question because it is something that I am proud of.
Lord Lawson of Blaby
My Lords, that most recent exchange between my noble friends Lord Forsyth and Lord Purvis has been quite illuminating. I want to mention two points that came up in the discussion but, before I do so, I want to go back to the earlier remarks of my noble friend Lord Purvis. He was completely muddled and I would like to straighten him out. He said that this amendment was inconsistent with the amendment that sought to look at aid expenditure over a five-year period in connection with the target. Even if you look at it over five years, in this country, as in most countries, there is an annual Budget, an annual Autumn Statement, figures for public expenditure and figures for taxation, and they are all, and will continue to be, produced annually, even if the amendment relating to the five-year period, which was withdrawn, had been passed. So that does not change anything at all and there is no conflict whatever.
I now turn to the two matters that my noble friend Lord Forsyth and I raised, and my first point may be what lies, to some extent, behind the question put by my noble friend Lord Forsyth. At the moment, expenditure on aid is running at more than £11 billion a year. That is not far short of what we spend on the police. The police are not a protected programme and therefore, inevitably, given the overall policy to curb public expenditure, spending on the police will go down and spending on aid will go up. It will not be long before we are spending more on aid than on the police. No doubt my noble friend Lord Purvis will be, to use his own words, very proud of that, but that cannot go on for ever. You cannot have this ratchet effect year in, year out. We have the danger of terrorism in our midst and the police have all their other duties of catching and prosecuting criminals. We cannot have public expenditure on aid going up and up indefinitely, irrespective of the needs of other heads of expenditure. The technicalities of what education spending and health spending mean do not wash; they are just nitpicking. There is a fundamental point here that needs to be addressed.
However, on the other point that was raised, I am less dissatisfied because the noble Lord, Lord Purvis, has admitted that if a future Government—we know where the present Government stand—take seriously the problems of spending on the police, the health service and education, and take the view that they cannot properly continue to increase aid spending, the term “legally binding” does not amount to a row of beans because all they have to do is present a statement to Parliament explaining why they are not increasing aid spending and are falling short of the 0.7% target. That is a great relief, and it will be a great relief to the people of this country. The commitment is a bit of a paper tiger. With that, I beg leave to withdraw the amendment.
Viscount Astor
“( ) the fact that expenditure on a programme has been rolled over into a future year.”
Viscount Astor (Con)
My Lords, my amendment is, I hope, a modest and helpful one that might find some favour with the noble Lord, Lord Purvis, and which addresses some concerns that I raised at Second Reading.
Perhaps I should say again that I support the principle of our foreign aid budget being 0.7% of GDP. I hope that that is clear enough to the noble Lord opposite so he will not have to address his Twitter account about those of us who are speaking from this side of the Committee. The issue has always been whether that figure should be a target or enshrined in law. The Government have encouraged the Private Member’s Bill that the noble Lord, Lord Purvis, has brought forward, which indeed enshrines the percentage in law. We therefore have to consider the Bill, what it achieves and whether it can be improved or amended during its passage through your Lordships’ House.
My main concern is that in order to achieve the spending required, the department will not always be able to have a reserve for emergencies, particularly humanitarian emergencies, or be able to account for programmes that go over from one year to the next. Emergencies are always important, whether they are due to war, famine or disease. As we have heard, humanitarian aid is a very small part of the total budget of the department. There must be funds available for the expected and the unexpected; there must be a reserve fund.
The Minister also wrote to me about the difficulties of having two year-ends—the calendar year-end and the financial year-end. She said in her letter that,
“it is not unusual for accounts to be converted from calendar to financial years across a range of public and private sector activity”.
That is entirely true, but what is not usual is for them to be converted on an annual basis. That would be an auditor’s nightmare.
What my modest amendment is designed to do—I accept that it might not be as well drafted as it should be—is give the department some flexibility in the way it operates without in any way affecting the aims of the Bill. Although the Minister was kind enough to write to me, one issue that she did not address—perhaps she can do so today—was answering the question I asked at Second Reading about what portion of our contribution to the EU budget is spent on aid. It is substantial and is something we should perhaps be proud of. Why should the amount not be stated in the report that the Secretary of State brings before Parliament?
My amendment relates to Clause 2(3); and your Lordships will see that in the Statement that has to be made to Parliament if the target has not been met, various reasons have to be given, which include,
“(a) economic circumstances and, in particular, any substantial change in gross national income … (b) fiscal circumstances and, in particular, the likely impact of meeting the target on taxation, public spending and public borrowing”,
or,
(c) circumstances arising outside the United Kingdom”.
My amendment would add a small extra paragraph saying,
“the fact that expenditure on a programme has been rolled over into a future year”.
That would allow the department, when looking at its budget, to say, “We haven’t spent all the money this year. We will roll it into the following year”, which means that it does not have to engage in what has been described as the “ugly rush” to spend all its money before the year end, and thus would have flexibility. I hope that the Minister will be able to answer my question and that the noble Lord, Lord Purvis, will consider that the amendment is helpful to both the aims of the Bill and the way that the Secretary of State will report to Parliament. I beg to move.
Lord Howell of Guildford (Con)
My Lords, as we are looking at page 2 of the Bill and the amendment of my noble friend Lord Astor, which seeks to add a further paragraph to the three issues listed in paragraphs (a), (b) and (c), one or more of which might lead the report to explain why the target has not been hit, may I ask a question of my noble friend Lord Purvis, or perhaps the Minister, about paragraph (c), which refers to,
“circumstances arising outside the United Kingdom”?
Would that include the views of the proposed recipient countries of overseas aid saying that they no longer want the aid? We had this situation with India recently, where India reviewed its relationship with Britain, felt that the relationship should mature and that far better outcomes for development and escaping from poverty would be achieved through other fiscal changes such as two-way investment flows, impact value investment and a whole range of new techniques, and therefore it did not want to go on receiving old-fashioned official aid because official aid, as a large part of the world has discovered—not, I fear, everybody in your Lordships’ House—is not the main instrument, or even the most effective instrument, for lifting people out of poverty, ending real suffering and accelerating economic growth. So if countries come forward and say, “We do not actually want this assistance”, would that be one of the,
“circumstances arising outside the United Kingdom”,
which might disembarrass the Secretary of State and enable him to explain why the target had not been hit?
The Parliamentary Under-Secretary of State, Department for International Development (Baroness Northover) (LD)
My Lords, I shall respond to the questions put to me. I apologise to my noble friend Lord Astor if I did not adequately answer in my letter to him all the questions that he raised. We will get back to him with further answers.
The EU came up in discussion on earlier groups of amendments of multilateral organisations generally. I expect, or at least hope, that noble Lords will be aware that when we came into government, we undertook a bilateral aid review of every programme, which included what was then taken forward as far as India was concerned, and a multilateral aid review. We pulled back from those organisations that did not score well in the multilateral aid review. I know that the party opposite was concerned, for example, that we pulled back from the ILO on the basis of that, although it is aware that we are engaged with the ILO in Bangladesh. However, many multilateral organisations came out of the aid review extremely well, and so did the EU budget.
Earlier, noble Lords referred to what my noble friend Lord Patten of Barnes—Chris Patten—said many years ago, after which he took forward the most formidable reform programme of what EU aid did. Since then, others have built upon that, which has been extremely welcome and no doubt has brought us to the situation that we are in. I hope that I can reassure noble Lords that we remain closely engaged in trying to ensure that we get value for money from that and that all is scrutinised.
Long discussions and negotiations with the Indian Government came from the bilateral review. The aid programme in India continues to 2015. It continued over a long period and then moves to technical support. It is not something which suddenly happened. If anything, countries tend to say, “Please don’t go”, rather than “Do go”. I hope that I have reassured noble Lords in that regard.
Lord Forsyth of Drumlean
My Lords, on that point about the use of multilateral organisations, does the Minister agree with the National Audit Office report? It states:
“The Department phased its contributions to 2 key multilateral organisations to increase 2013 ODA. The Department has used the flexibility it has over when it issues promissory notes to fund some multilateral organisations to help manage ODA. In line with OECD rules the notes count as ODA when they are issued, which is typically 2 years before they are cashed”.
Baroness Northover
I mentioned earlier the way in which the notes promising the assistance were carried through. Obviously, with something like the Global Fund, one might make the kind of commitment to which my noble friend Lord Fowler referred in a particular year, which then is programmed in. A programme is constructed, which we carefully monitor, to carry forward the spending of that. I would think that the noble Lord would welcome that strategic way of doing things.
Baroness Northover
I would like to make some progress. I am sure that the noble Lord will come back in again. I assure noble Lords that there is flexibility in DfID’s programming and budgeting. I should like to reassure my noble friend Lord Astor of that point. It is why at the end of 2013 it was possible to respond to a typhoon, which we had not anticipated any more than anyone else had, and to the unexpected level of displaced people coming from Syria who needed to be assisted over the winter. Part of the way in which DfID responds is to have that flexibility built in.
Lord Forsyth of Drumlean
I am most grateful to my noble friend. I do not mean to harass her, but she did not really deal with the point that I was making. I am not making a point that the department does not give money to multilateral organisations, often for very good causes. I was asking her to confirm that the department uses multilateral organisations where the rules on what constitutes expenditure, which in this case was two years ahead of the programme being achieved, are driven by the need to balance the budget and not by the merits of the programme and that that arises because of the lack of the flexibility for which my noble friend’s amendment would provide.
Baroness Northover
I understand what my noble friend is saying. I can totally refute that. If the noble Lord were to look carefully at what the Global Fund manages to achieve, because it is a large-scale operation that is able to assist in the poorest of countries with the greatest need, or if he were to look at Gavi, which deals with vaccines and vaccine research, he would see that our supporting vaccinations directly through our bilateral programmes may not be the best way to go. Working with Gates and others in a very large enterprise brings down the prices, invests in research and takes forward vaccination, which has saved millions and millions of children’s lives.
Lord Fowler
Would my noble friend also agree that the Global Fund is probably one of the most cost-effective organisations in the world in bringing aid? That is value for money that the British taxpayer gets.
Lord Forsyth of Drumlean
My Lords, I was not really intending to speak on this amendment, but I want to get to the bottom of this point. I entirely agree with my noble friend Lord Fowler about the importance of that programme and I pay tribute to the work that is done all over the globe in combating AIDS and to the organisations involved.
This is not about the merits of particular programmes; it is about the means by which the money is managed because of the lack of flexibility, which the amendment would provide for. Paragraph 15 on page 8 of the summary of the NAO report says:
“The need to increase spending was a factor the Department considered when it decided in autumn 2013 on the size of promissory notes it subsequently issued in December 2013 to the World Bank’s International Development Association and to the Global Fund to Fight AIDS, Tuberculosis and Malaria. The Department’s decision to issue more notes to both organisations in 2013 did not alter the total value of notes it planned to provide them and did not affect the content and timing of the programmes”.
So we are not talking about the programmes; we are talking about what happens as a result of having to find programmes in year where you have no flexibility. The advantage of going to multilateral organisations is that the expenditure counts towards the target when it is issued, even though it might not be incurred until two years down the line. That does not apply to bilateral programmes. Therefore, it creates a bias against bilateral programmes in circumstances where the budget needs to be managed. It is not about the merits of the programmes; it is about how the rules and the corset that is being imposed by the provisions in this Bill result in bad decisions potentially being made.
Baroness Northover
That was what I was refuting. The NAO report that the noble Lord quoted—I have read every word of it—found no evidence that the department had failed to follow its normal business processes. I can assure the noble Lord that business cases are put as to why DfID should support one thing rather than another. If the most cost-effective and effective way of supporting, let us say, the vaccination of children is to go through Gavi, it makes sense to do so. To have some artificial emphasis on bilateral programmes, which then reached fewer children, would be perverse. What I am saying to the noble Lord, and I hope that he will understand this, is that very thorough procedures are gone through before decisions are made. In many instances, depending on what DfID is trying to achieve, it may well be that a multilateral organisation can deliver more for the money that we put in and which we then lever also from others. I think that we have probably covered this matter sufficiently.
Lord Forsyth of Drumlean
Before my noble friend sits down, perhaps I may get absolute clarity on this. The reports states, on page 8, paragraph 15:
“The need to increase spending was a factor the Department considered when it decided in autumn 2013 on the size of promissory notes it subsequently issued in December 2013 to the World Bank’s International Development Association and to the Global Fund to Fight AIDS, Tuberculosis and Malaria”.
Is she saying that that is not correct?
Baroness Northover
What I am saying—I hope that it is clear—is that DfID needs to decide how it is going to spend its money. It was always known from 2010 what the trajectory was of that DfID budget. I think that the noble Lord was a member of the Economic Affairs Committee that reported in 2012 and took its evidence in 2011. At that point, that escalation had not occurred and the committee rightly expressed concern about that. However, all the reports thereafter have looked very carefully at whether that escalation was effective and value for money. It has been found to be a rigorous process.
We are now at 0.7%. We are not into escalation, but these multilateral organisations, which were stress-tested through the multilateral aid review in 2010-11, were judged to be value for money for the reasons that I have given. Bilateral programmes can be very limited in a very limited number of countries. What Gavi can do in sourcing vaccines, investing in research and so on and in involvement in many different countries can be much more effective. That is why DfID is a strong supporter of such organisations.
Lord Purvis of Tweed
My Lords, I thank my noble friend Lord Astor for his amendment, for being consistent with the points he raised at Second Reading and for the manner in which he did it. I am most grateful for that, and I will attempt very briefly to address his points. In so doing, I wish to put on record my appreciation for the points that the Minister made. There are two aspects to this: forward expenditure, which is part of wider plans in existence, and the possibility of other factors which mean that, outwith the scope of the responsibility of DfID, the international target would not have been met. I suspect that that gets to the core of my noble friend’s amendment.
On the first point, paragraph 15 of the NAO report has been cited. I am sure it was an oversight that paragraph 16 was not referred to. That states:
“Promissory notes accounted for 19% of the Department’s ODA in 2013, similar to the level in 2012”.
Given the NAO’s findings, I do not think that this is an issue that needs to take up much more of our time in Committee.
Let me address the point made by my noble friend. The question is whether elements of this Bill complement the International Development (Reporting and Transparency) Act 2006 and the existing mechanisms through which DfID, the Treasury and the ONS report on information to do with programme profiling, budget decisions and external factors and provide sufficient information to allow Parliament to understand why a target has not been met. With the mechanisms that we already have in place—including, importantly, Section 6 of the International Development (Reporting and Transparency) Act 2006 on the methods for transparency, where there is provision to specify future allocations of aid, in addition to all the other reporting mechanisms, the work of the Office for National Statistics and the external peer review by the OECD—I believe there is sufficient work within the programme on reporting, accountability and transparency to satisfy my noble friend.
My noble friend Lord Howell made a point about potential external factors and gave an interesting reason. The Minister responded very clearly with regard to that specific case. The Bill affords freedom for external impacts to be reported and then, through Parliament, to be scrutinised fully and for Parliament to determine the justification. On that basis, I respectfully ask my noble friend to withdraw his amendment.
Viscount Astor
My Lords, I am grateful to the noble Lord, Lord Purvis, for his response. Obviously I do not have Section 6 of the International Development Act at hand but I will look at it carefully and read what he said in Hansard. He certainly gave a considered response, for which I am grateful.
I am also grateful to the Minister. She said, importantly, that there was flexibility in the department, and we are all grateful for that. I would have been happier if she had been able to say that, should the Bill go through, there will still be flexibility in the department. That is the important thing that we all want and are trying to achieve.
Baroness Northover
I can assure my noble friend that that will still be the case: there will be flexibility.
Viscount Astor
I am pleased to hear that. It certainly satisfies one of my concerns. I still think that the department will have a difficult time with its two year ends. The working out will be one of the games for the accountants, if nothing else.
I am grateful to my noble friend Lord Forsyth for joining in the debate. He did something that even Lloyd George was not able to do for my great-grandfather, when he referred to me as a noble Earl as opposed to a mere Viscount. I am grateful for his support for that. I beg leave to withdraw the amendment.
Lord MacGregor of Pulham Market (Con)
My Lords, the noble Lord, Lord Hollick, is very sad that he cannot be here—his name is on the amendment as the prime mover—because with his business interests he has a very strong concern about value for money. Unfortunately he has had to go because we are now at a quite late stage of a Friday afternoon for considering Bills.
The amendment is all about value for money. The clause to which it refers states:
“The Secretary of State must make arrangements for the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money in relation to the purposes for which it is provided”.
The amendment queries why the Secretary of State has been given in the legislation the task of making arrangements for the independent evaluation and why it is not clear in the legislation where that independent evaluation has to take place. We believe that it should be the Independent Commission for Aid Impact.
Let me explain exactly why we believe it should be the Independent Commission for Aid Impact, and why that should be described in legislation and not left to the discretion of the Secretary of State. I will simply quote a number of passages from a report that came out very recently—indeed, I think it was on 19 January—from the House of Commons Committee of Public Accounts, chaired by the right honourable Margaret Hodge. It is a report on the oversight of the Private Infrastructure Development Group and graphically illustrates why it is important to have an independent evaluation of value for money on aid and not leave it simply to the Secretary of State to make the arrangements.
The report is absolutely devastating. It states, first:
“The Department’s oversight of PIDG”—
the Private Infrastructure Development Group—
“has not been sufficiently ‘hands on’. We are concerned that the Department has insufficient assurance over the integrity of PIDG’s investments and the companies with which it works and the Department has not done enough to put a stop to PIDG’s wasteful travel policies and poor financial management … the Department should do more to make sure PIDG takes a robust approach to the assessment and management of these risks. The Department was not well briefed on the specifics of individual investments which had attracted public concern”.
The committee therefore recommended:
“The Department must ensure that PIDG has a robust and appropriate approach to due diligence in general and that it receives detailed briefings when concerns are raised about specific investments”.
Next, the committee says:
“The Department’s weak oversight of PIDG means that some of PIDG’s operational decisions are at odds with the Department’s objectives”,
and therefore recommends that:
“The Department should review its oversight mechanisms for PIDG to make sure that it has an appropriate level of visibility of operational matters, and that sound financial controls are in place and that money is appropriately spent”.
Next, the committee says:
“The Department’s poor oversight of PIDG allowed money to sit idle in a bank account rather than funding projects … The Department is not using its position as the dominant funder to drive improvements in PIDG’s performance”.
It therefore recommends:
“The Department should use its 2015 multilateral aid review to develop a proportionate and risk-based approach to how it funds and oversees multilaterals, with a clear focus on whether its level of influence in multilaterals is commensurate with its level of funding, both in absolute terms and relative to other donors”.
Next, the committee says:
“Public confidence on spending on overseas aid through PIDG requires robust and independent information on the impacts achieved, which is currently lacking … While the Department has commissioned some independent evaluation of PIDG’s performance, it is too reliant on information from PIDG itself in making judgements about performance.
It therefore recommends:
“The Department should push PIDG to have a robust system to monitor and evaluate impacts using the Department’s own expertise to gain assurance over the adequacy of PIDG’s approach”.
Next, the committee says:
“The Department has failed to draw sufficiently on the insight of its country teams to influence the investment decisions PIDG is making. PIDG represents a major investment by the Department”.
I could go on.
That is not me; that is the Public Accounts Committee. That is why I believe that the department should not be responsible for deciding how value for money is evaluated but should give it to the independent committee that I suggest. I beg to move.
Lord Lawson of Blaby
My Lords, I support my noble friend Lord MacGregor. There should be no difficulty whatever in the Government, and indeed the promoter of the Bill, accepting this amendment. The issue relates to Clause 5, which is headed:
“Independent evaluation of official development assistance”.
When the Bill was first introduced in the other place, the Government and Mr Michael Moore, the promoter in the other place, were absolutely clear that how this independent evaluation was to be done and by whom needed to be specified. As I am sure noble Lords are well aware, there was a three-page schedule headed:
“The Independent International Development Office”.
The schedule would have set up that office specifically for this purpose, considering that it is so important. However, mysteriously, or at least semi-mysteriously, when the Bill emerged from its Committee stage the promoters of the Bill and the Minister of State from DfID moved an amendment to delete this schedule, which had been an integral part of the Bill.
Now all the Bill says is:
“The Secretary of State must make arrangements for the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money in relation to the purposes for which it is provided”,
but it does not say how that should be done. As I say, they had decided that it should be done by this new body, which was incorporated in the form of a three-page schedule to the Bill.
When explaining why that schedule was to be removed, the Minister of State gave two reasons. The first was that there was no need to create a new body. The other was that the schedule would provide many opportunities for amendments that might have delayed the passage of the Bill. That second reason is probably the real reason, and it is completely discreditable. There is a point to the first reason: there is no need to create a new body because there is an existing one that can do the job, and that is the Independent Commission for Aid Impact. That is why our amendment says that the independent commission should do the job. At the moment, however, the whole thing has been left in limbo. No one is doing it, which leaves it up to DfID to do it itself, and in effect it is saying that it is independent when it is only a charade of independence. There is a need for some proper body to do this, which had originally been accepted in a schedule to the Bill setting up this new body, but that has now gone.
So I hope that the Independent Commission for Aid Impact doing the job will satisfy the complaint of the Minister in the other place that we do not need to set up a new body, and that this amendment can be accepted.
As my noble friend Lord MacGregor said, this is something about which the noble Lord, Lord Hollick, felt particularly strongly and he is very regretful that he cannot be here today at this late hour, but of course if it is not accepted now by the Government it can come back on Report—as many other amendments, I suspect, might come back on Report—when I hope that the noble Lord, Lord Hollick, will be able to move it with his customary eloquence and expertise. I support very strongly this amendment and I cannot think of a single good reason why it cannot be accepted.
Lord Forsyth of Drumlean
My Lords, I, too, support this amendment. Like my noble friend, I was very surprised that the provisions for scrutiny were withdrawn from the Bill in the other place.
I have to say that when the Independent Commission for Aid Impact gave evidence to the Economic Affairs Committee before our report, we were less than impressed with it. We felt that it was rather extraordinary that there were four commissioners to deal with a huge budget that was going to be increased very substantially. But having read the NAO report and various other reports in preparation for the consideration of this Bill, it would seem that it has in fact done a good job. Perhaps the committee’s worries on that score were taken on board.
I still worry, of course, that we are dealing with a programme that is being increased enormously and a department that is being reduced enormously. In business, in the private sector, if I saw a company that was reducing its back office by 40% while increasing its balance sheet by 30%, I would sell the shares pretty rapidly. But once again, we must put our faith in the ability of the officials at DfID to cope with this stress.
Having said that, it seems that an earlier amendment was withdrawn because it proposed setting up an entirely different body to carry out the scrutiny. It was not proposing that the Independent Commission for Aid Impact should be that body so I assume that it was taken out of the Bill in line with our policy of having a bonfire of the quangos and reducing the number of public bodies that are a burden on the taxpayer. Perhaps the Government had the thought that the Independent Commission for Aid Impact might be that body. But of course, as we have seen, even though this is a Private Member’s Bill, the Government seem absolutely determined to rush the Bill through both Houses without proper scrutiny. The Independent Commission for Aid Impact seems to be the obvious body to carry out that scrutiny.
However, that body is in a bit of an odd position. It is a creature of the department but it is supposedly independent. I would have thought that my noble friend Lord Hollick’s amendment would have been even more effective and the Government might wish to take it on board, as might the noble Lord, Lord Purvis, if it was a statutory body and had statutory independence. It is an absolute nonsense to have a body that does not have statutory independence scrutinising a programme that is a third of the size of the defence budget. It is an enormous amount of money being spent. I would have thought that any person wanting to ensure that the least amount of controversy surrounded our overseas development aid would welcome having in place mechanisms that would avoid any future scandals or disquiet on the part of what is, in the opinion polls, a rather uncertain and dissatisfied public.
Baroness Northover
To start, I agree with noble Lords that the principle of independent evaluation is extremely important. It is important that ODA provided by the United Kingdom represents value for money. That is key to this legislation. Of course, the Independent Commission for Aid Impact is independent: it decides what it wishes to do. We heard some important criticisms from my noble friend Lord MacGregor of some of DfID’s work, which should reassure noble Lords that DfID will not go unscrutinised. However, the effect of the amendment could be to limit the current range of scrutiny options available, including the National Audit Office—which the noble Lord quoted extensively.
The Bill already asks the Secretary of State to include in each annual report a statement as to how he or she has complied with the duty under this clause. The annual report is already subject to scrutiny by both the National Audit Office and the International Development Committee in the House of Commons. The Independent Commission for Aid Impact also scrutinises what DfID does. Noble Lords are right that the duty to ensure independent evaluation is an important part of this legislation. However, we do not feel that tying that function to one particular agency is the answer.
As noble Lords will know, the IDC holds public hearings to take evidence—for example, on every ICAI report. In addition, it holds inquiries every year into ICAI’s annual reports, which again are held in public. The IDC’s recommendations are then published. Of course, the NAO has statutory responsibility for doing value for money studies on DfID’s work. The NAO reports to the PAC, which also makes recommendations about DfID’s work, in addition to ICAI.
Lord Lawson of Blaby
I was puzzled when my noble friend said she does not believe that there should be a particular organisation responsible for this. The Bill as originally published specifically set out an independent organisation to do this job. That is very important. When the amendment to remove that was discussed in the other place, at no time did my noble friend’s counterpart there say that the reason it was being removed was because they did not want just one body doing it. They said they did not want to set up an additional body. What we suggest is not an additional body but an existing one. Clearly the job needs to be done and it needs to be specified in the Bill how it is done.
Lord Forsyth of Drumlean
Could the noble Baroness help me in respect of this amendment? Clause 5 says:
“The Secretary of State must make arrangements for the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money in relation to the purposes for which it is provided”.
My noble friend thinks—and I agree—that that is somewhat inadequate. Then, subsection (2) says:
“The Secretary of State must include in each annual report a statement as to how he or she has complied with the duty under subsection (1)”.
I presume that means subsection (1) of this clause, which says that she must make arrangements for the independent evaluation. Is the idea that the arrangements for the independent evaluation are subject to some kind of annual review? Surely the arrangements for independent evaluation should mean the creation of some kind of authoritative body to carry it out. The fact that Clause 5(2) says that you must have an annual report on this suggests that we will never get there.
Baroness Northover
When the Bill was introduced, there was considerable concern about duplication because ICAI existed. It is highly likely that ICAI will be the body that undertakes the reviews. My concern is simply to ensure that we do not exclude the operation of the other bodies that I mentioned—in particular, the NAO, which the noble Lord seems very much to appreciate.
Lord Forsyth of Drumlean
I am most grateful to my noble friend, but what then does Clause 5(2) mean when it states:
“The Secretary of State must include in each annual report a statement as to how he or she has complied with the duty under subsection (1)”?
By the way, I do not know why we have “he or she”, because the rule is laid down that you do not need to provide for both genders in statutory legislation.
Baroness Northover
As a former Equalities Minister, perhaps we should take through some legislation saying that it is perfectly possible to have “he or she”.
Lord Forsyth of Drumlean
I am just saying that the guidance given does not provide for that. If she wants to change the guidance, I would be very happy to support that; I am just making the point that it is not consistent with other legislation.
Very cleverly, my noble friend has diverted me from my main point—
Lord Forsyth of Drumlean
Yes, very stupidly, I have diverted from my main point. As we are here discussing not equality legislation but overseas aid, can my noble friend explain why it is necessary for the Secretary of State in each annual report to include a statement about how the Secretary of State has complied with the duty under subsection (1)? Surely that duty should be complied with immediately, not subject to some annual review.
Baroness Northover
I think that we are talking about equality legislation here—greater equality between well-off and less well-off countries and, in particular, the position of women and girls.
Lord Forsyth of Drumlean
That is a very important point, but can my noble friend answer my question, which is: why is it necessary to have in each annual report a statement as to how the Secretary of State has made,
“arrangements for the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money in relation to the purposes for which it is provided”?
Surely she should have those arrangements in place, or is the intention that they should go on for ever and never be completed?
Lord Lucas (Con)
I would like an answer to that perfectly sensible question. What is that subsection doing there? My noble friend has several people in a Box who do not seem to be rushing the information to her. Either she or the Box has the answer. What is that subsection doing there?
Baroness Northover
Noble Lords can be totally reassured that DfID will continue to be fully scrutinised. My noble friend, who is the owner of the Bill, is about to explain that in detail.
Lord Purvis of Tweed
My Lords, as I hope that the House will appreciate, the sponsors of the Bill are responsible for drafting. I know that my noble friends will have read the report of both Committee and Report in another place, where those points were raised and responded to. My right honourable friend Michael Moore was perfectly clear in another place when he said that when he first proposed the Bill and consulted on it, it was an open, public consultation. At that time, he said in another place:
“I said on Second Reading that I thought the independent international development office proposed to fulfil the important function set out in the Bill was a good model, but that I was open to suggestions as to how it might be improved”.—[Official Report, Commons, International Development (Official Development Assistance Target) Bill Committee, 11/11/14; col. 35.]
Far from it being either mysteriously changed or rushed, there was proper parliamentary scrutiny in another place at Second Reading, in Committee and on Report, where the Government did not accept the amendments proposed by Mr Nuttall, et cetera, because it was felt that there was a more effective way to answer the valid points that my noble friend Lord MacGregor has cited. Let me turn to them.
What is the fundamental question that the Bill is asking? In addition to the 2006 legislation, is there for the first time independent evaluation of the value for money of United Kingdom ODA? The Bill will afford that. It goes further. It states that there is a duty on the Government to come to Parliament to explain annually how that independent evaluation is being carried out. That answers the second question raised: not only is there provision for independent evaluation but Parliament will be receiving from government, on an annual basis, how that independent evaluation is carried out. Subsection (2) is a considerable safeguard to Parliament for effective scrutiny of the independent evaluation.
This means that we come to whether a new body is created or ICAI is put on a statutory footing. When we look at all the consideration of how this independent evaluation can be carried out, not necessarily but potentially by one body and informed by the National Audit Office or other bodies, I think it is right that the Bill simply states that the principle for that evaluation will be carried out with flexibility as to what body or bodies will carry out that function. It is important that Parliament should have the ability to scrutinise properly that independent evaluation and how it is carried out. As the sponsor in this place, I cannot accept the amendment but I understand why my noble friend spoke to it. I believe that the elements in the Bill afford that protection.
Lord Purvis of Tweed
It has been a pleasure to allow my noble friend to intervene on me today, so I would be churlish to prevent that pleasure.
Lord Forsyth of Drumlean
I am most grateful to the noble Lord for answering the question which the Minister did not answer in respect of Clause 5(2). He is saying that the Secretary of State will produce an annual report on how he or she is being evaluated. That is not independent scrutiny and reporting. What is needed is an independent body which looks at the department and reports to Parliament, not to the Secretary of State. It is very helpful that the noble Lord should have answered this point because he is saying that Clause 5 effectively says, “The Secretary of State will decide who is going to hold him or her accountable for the programme of overseas development aid, then the Secretary of State will on an annual basis report to Parliament on how well the people reporting on him are doing”. That is a nonsense.
Baroness Northover
Do noble Lords have the Bill here? Perhaps my noble friend might bear in mind that the Secretary of State already has to make an annual report to Parliament, under previous legislation. Clause 5(1) says that:
“The Secretary of State must make arrangements for … independent evaluation”,
which is what we have been talking about and is indeed extremely important. Clause 5(2) says that:
“The Secretary of State must include in each annual report”—
the annual report that the Secretary of State is giving to Parliament—
“a statement as to how he or she has complied with the duty under subsection (1)”;
in other words, that the independent scrutiny of ODA has been carried out and that it is 0.7%. I think that the noble Lord is missing the point about the annual report, which is already in legislation and which the Secretary of State must lay before Parliament.
Lord Purvis of Tweed
My Lords, I will of course allow my noble friend to intervene on my noble friend who intervened on my noble friend intervening on me.
Lord Forsyth of Drumlean
I am most grateful to the Minister. She says that the Secretary of State has to make an annual report, which is correct, and that the annual report will enable people to look at how well they are complying with the 0.7% and the rest.
Baroness Northover
No, I am bringing my noble friend back to the fact that the Secretary of State makes an annual report to Parliament anyway, under the 2006 Act. That is an annual report not about how they have been independently scrutinised but about what DfID has done. I am sure that the noble Lord has seen those reports.
Lord Forsyth of Drumlean
And very good they are too. My issue is: how do you make an annual statement about how the Secretary of State has complied with the duty under Clause 5(1)? Clause 5(1) states:
“The Secretary of State must make arrangements for the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money in relation to the purposes for which it is provided”.
My point, which is my noble friend’s point, and was the original intention of the noble Lord, Lord Hollick, had he been able to be here, is that to determine whether there is value for money in these programmes, it is necessary to have a powerful independent body that reports to Parliament. However, what the clause provides for in subsection (2) is for the Secretary of State to put in the annual report, which the Minister has mentioned, a statement about how the Secretary of State has complied with the duty to make arrangements for the independent evaluation.
The noble Lord, Lord Purvis—I am sure he is anxious to get back on his feet—in his explanation of this clause, said something completely different. He seemed to say that what was being proposed here was that the Secretary of State would indicate in the annual report how well he had complied with the duty to ensure the independent evaluation of the programme. I am saying that that is a nonsense, and that what my noble friend’s—
Lord Forsyth of Drumlean
In a second. My noble friend’s amendment seeks to have an independent body that reports to Parliament and says, “Look, the Secretary of State’s programme has gone wrong here and has gone well there”, and then Parliament holds the Secretary of State to account. The problem with this arrangement is that the independent body is the creature of the Secretary of State, and the Secretary of State reports in his annual report on how it is doing. That is all I am saying.
Lord McConnell of Glenscorrodale
With all due respect to the noble Lord, Lord Forsyth, I suspect that most other Members in your Lordships’ Chamber both understand and accept the explanation that has been given by both the noble Lord, Lord Purvis, and the Minister. In fact, the noble Lord, Lord Purvis, made a very good point about comparing aspects of this legislation with previous legislation in this Parliament on the parliamentary scrutiny of ministerial financial expectations. I implore the noble Lord, Lord Forsyth, to accept—or at least allow the rest of us to accept—the explanations and understandings that have been given, and allow us to move on.
Lord Forsyth of Drumlean
If the noble Lord understands it so well, perhaps he could explain it to me.
Lord Purvis of Tweed
My Lords, I wonder if I may draw this to a conclusion from my point of view before my noble friend sums up his amendments, without going down the sidetrack that some have gone down. As the Minister has indicated, Section 1(1) of the International Development (Reporting and Transparency) Act 2006 states:
“It shall be the duty of the Secretary of State to lay before each House of Parliament each year a report about international aid pursuant to the provisions of this Act”.
It is only Section 3 of that Act that is subsequently repealed by the measure before the House, and indeed that annual report will include a statement about how the arrangements for the independent evaluation of the extent to which ODA provided by the UK represents value for money. That is perfectly clear.
I am satisfied that the arrangements that need to be carried out to provide for independent evaluation should be carried out with the duties provided for under this legislation. It provides flexibility so that it is not constrained with regard to the body that carries that out. It is perfectly clear why that is the position of my right honourable friend Michael Moore, and I hope that that satisfies my noble friend.
Lord Purvis of Tweed
Not this noble friend; I meant my noble friend Lord MacGregor.
Lord Lawson of Blaby
Yes. I think that we have had sufficient discussion for the day about Clause 5(2), but we have still not had a satisfactory answer about the rather important Clause 5(1), which says:
“The Secretary of State must make arrangements for the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money in relation to the purposes for which it is provided”.
What the arrangements are should be and must be in the Bill. They were originally, because there was a schedule setting up a new body to do it. The schedule was taken out, and there is now a vacuum. We are not told in the Bill what these arrangements are, which body will ensure and evaluate the extent to which the ODA provided gives value for money, and so on.
My noble friend suggested in this amendment, “Why not use the ICAI and put it on a statutory basis?”, and that can be done. That seems very sensible, and I am rather suspicious about the rejection of this amendment, because it suggests that they are trying to weasel out of any effective independent evaluation. If they are not, what are the arrangements for the evaluation? Why not the ICAI, or why not restore the other body that was there originally? That must be in the Bill. I suspect, having heard the noble Lord’s obduracy on this point, that we will have to come to this again on Report. However, it is a very real point. No satisfactory answer of any kind has been given, either by the Minister or by the noble Lord, Lord Purvis.
Lord MacGregor of Pulham Market
My Lords, I share my noble friend’s concerns about this. We have been given very inadequate answers on this today, particularly from the Minister, and we will simply have to return to this on Report. It is a very important issue, because the size of the budget now, as my noble friend Lord Forsyth pointed out—about one-third of the defence budget—is huge. The taxpayer needs to be satisfied that the tasks have been properly and effectively carried out. It is one thing to set up an independent evaluation, which in the Secretary of State’s mind is an independent evaluation, and another thing to have one that is effective and that can convince us all that the department will undertake to get proper value for money.
That PAC report, which is probably one of the worst I have ever seen, does not give me a great deal of confidence that the Secretary of State is given total entitlement to set up the organisation that will reassure him about value for money. There are therefore some important distinctions here, and we have not yet had a satisfactory answer. As I said, it is a very important issue, and we shall have to return to it on Report. However, on that basis, I beg leave to withdraw the amendment.
“( ) The Secretary of State shall set up an independent inquiry into the independence, efficiency and effectiveness of the Independent Commission for Aid Impact.”
Lord MacGregor of Pulham Market
My Lords, it may seem a little odd, having been somewhat critical of how independent the Independent Commission for Aid Impact might be, to suggest that the Secretary of State should rely on that commission to set up an independent inquiry into independence, efficiency, and effectiveness. I do not wish to press this amendment; I am just seeking answers from the Minister.
In our Economic Affairs Committee report in March 2012—I accept that quite a lot could have changed since then—we were a bit concerned about the effectiveness of the Independent Commission for Aid Impact. It had only just been set up, so it was very early days, but I wanted to mention one or two of the points we made then, to enable the Minister to give us assurances that the concerns we had then should no longer be concerns.
We said that we were,
“concerned that the Commission is not in practice fulfilling the role which it has been given”.
That was largely based on the oral evidence that we received at the time in our inquiry, which failed to convince the committee that it was appropriately resourced for the work with which it was charged. That is a very important issue as regards our discussion on the previous amendment. How much the independent evaluating body is resourced is crucial. We went on to say that,
“it could be relied on adequately to fulfil its role. These are early days for ICAI, but we recommend that both Parliament and DFID monitor ICAI’s own effectiveness closely, and”—
this is the point—
“take steps necessary to ensure that both its work and its staffing are sufficient both in quality and in quantity for it effectively to discharge its duties”.
Therefore, the reason for tabling this amendment is to enable the Minister to reassure us on those points. I beg to move.
Baroness Northover
My Lords, I reassure my noble friends in relation to ICAI that it already reports to Parliament via the International Development Select Committee in the House of Commons. The International Development Committee scrutinises ICAI’s work; it holds a public hearing every year to consider ICAI’s annual report, and a special sub-committee has been set up to take evidence after the publication of each ICAI report. The committee also approves ICAI’s work plan. Noble Lords may also be aware—and this would have happened after my noble friend’s Select Committee reported—that a triennial review of ICAI was published in December 2013 and a further review is scheduled for 2016. Triennial reviews are designed to consider whether public bodies such as ICAI are meeting good standards of corporate governance, and so on, and whether they are still needed.
In addition to the above, the National Audit Office and International Development Committee can, of course, already review the independence, efficiency and effectiveness of ICAI if they wish to do so, and also provide regular assessments of value for money within DfID to the Public Accounts Committee of the House of Commons. I hear what my noble friend says about his previous concern being somewhat ameliorated, and I hope that this will give him further reassurance.
Lord Purvis of Tweed
My Lords, I have nothing to add from the point of view of the sponsors of the Bill to the reassurances that the Minister has provided. They are satisfactory, and I request that my noble friend withdraw his amendment.
Lord MacGregor of Pulham Market
I am grateful for that response, and it encourages me that the discussion that we had on the previous amendment on the role that we were giving to the independent commission is proper and correct, and that we need not have fears on that score. I am grateful to my noble friend for that answer, and I beg leave to withdraw the amendment.
Lord Tugendhat
“( ) The Secretary of State must include in each report an explanation as to how the implementation of the 0.7% target has influenced the following—
(a) the quality and effectiveness of UK Overseas Development Programmes;(b) the Department for International Development’s oversight of UK Overseas Development Programmes;(c) reported corruption relating to UK Overseas Development Programmes.”
Lord Tugendhat
My Lords, I think that we are nearing the end—I hope so—of what, to me, has been a deeply depressing day. Time and again my noble friends and I have come forward with suggestions designed to improve the Bill. Others have intervened to support these suggestions and to share some of the concerns that we have raised. I think particularly of the notable contribution of the noble Lord, Lord Butler of Brockwell, whose knowledge, authority and understanding in these matters must be second to none.
However, the proposer of the Bill and the Minister have both refused to countenance any change; they have been unable or unwilling to meet a number of the concerns that have been raised—we saw an example of that in the debate before last—but they have been unable to accept that the Bill is capable of any improvement. That is their position, but I have been around longer than they have and suggest to them that, if they look at some recent political history, those Bills that are driven through regardless of the opinion of the House, against the advice of a number of people who know what they are talking about and in defiance of any suggestion for improvement, generally run into a great deal of trouble down the track. I think that the noble Lord the proposer and the noble Baroness the Minister will find—perhaps along with other noble Lords on the other side of the House, if they find themselves in government—that a number of the points raised in the debate today come back to haunt them at Select Committee meetings and other meetings in future.
That said, I commend both the proposer of the Bill and the Minister for their courtesy, good humour and patience. They have treated the House with great respect. I regret the fact that the noble Lord, Lord McConnell, has left us, because what he and others must understand is that not only does Parliament have the right and duty to consider legislation thoroughly, but when a particular item is put into a privileged position—but the noble Lord has now returned, so I withdraw the point that I just made.
What must be understood is that when an item of expenditure—a budget—is put in a very privileged position on a particular pedestal, it must expect particularly rigorous examination, which does not mean hostile examination. Rigorous examination is required when large amounts of public money are being spent in areas that are themselves often very controversial. It serves no good purpose and is of no benefit to the budget concerned to call into question the good faith of those who raise those questions. That is a very important point to remember. The more that good faith is called into question, the more difficult things become for the programme under discussion.
Lord Purvis of Tweed
I am grateful to my noble friend for giving way. With regard to this specific amendment, could he inform the House which of the annual reports that have been laid before Parliament under the 2006 Act, and which cover aid effectiveness, policy effectiveness and transparency, does he feel are deficient and have not provided this information?
Lord Tugendhat
If I felt it was sufficient, I would not be suggesting the three propositions put down in the amendment. I think that each is valid.
Lord Purvis of Tweed
Is the noble Lord saying that the reports, or the information in them, have been insufficient? Could he perhaps give us the years for the reports that he is referring to?
Lord Tugendhat
I am saying that the Secretary of State must include in each report an explanation of how the implementation of the 0.7% target has influenced the following—and then the words in the amendment. I am looking to the future. I think that that is perfectly clear. In the past we did not have a legally enforceable target and in the future we will.
Lord Purvis of Tweed
My noble friend has just told the House that the reports so far, which have already been provided under the 2006 Act, have been insufficient. For which years were those reports? If he has not read them and if he is not aware of them, that is a problem with the information that he is providing to the House.
Lord Tugendhat
I am talking only about the future. The amendment refers quite explicitly to the future. I hope I am repeating myself correctly; I said that if it was suggested that the present arrangements are sufficient, then that would imply that the introduction of the new legally enforceable target made no difference. That is what I was saying. I am not talking about whether the report was insufficient in the past. We did not have a legally enforceable target in the past but we are going to in future. That is why I suggested that new arrangements would be required. So we are looking to the future, not the past, and I should be very interested to know why the proposer and the Minister—if indeed they are not going to accept the amendment—think that new arrangements should not be required in the future.
Lord Forsyth of Drumlean
My Lords, I support my noble friend and very much agree with his remarks in respect of the conduct of the business today. The only thing in his excellent remarks on which I disagree with him is that he kept referring to a legally enforceable target. On my reading of the Bill, there is no legally enforceable target; there is a requirement for the department to try to spend exactly 0.7% of GDP in any one year, and a failure to do so simply requires it to produce yet another report to Parliament explaining why it has failed to do so. It is very important that we are clear on that because in the outside world it is being sold as something else, and the damage that is being done is the implementation of the 0.7% target.
The noble Lord, Lord Purvis, suggested that my noble friend go back and read the reports but that is not the point. This amendment is about seeking to ensure that we are aware of the influence of the 0.7% target on the quality and oversight of, and the opportunities for corruption from, UK aid. That is a really important point. The system is being changed. Until now, the department has had a budget. Part of the overseas development budget has been with other departments, including the Foreign Office—some of it might be associated with climate change, which I find a great mystery—and these departments have been able to spend on their programmes accordingly. The fact that between them all they now have to reach the target of 0.7% within a calendar year, as opposed to a financial year, will create and—the evidence is quite clear—has already created substantial problems.
Therefore, it is very important that we look at the impact of the inclusion of this target on the quality and effectiveness of the ODA programme and, similarly, at the degree to which DfID has been able to provide oversight of the other departments. If, as we discussed earlier, the effect of the target is that more has to be given to other organisations over which it has no control and from which there is no accountability, that will have an impact on proposed new paragraph (b) in the amendment, which concerns,
“the Department for International Development’s oversight of UK Overseas Development Programmes”.
I do not want to go over the same arguments at this hour but, as my noble friend Lord Lawson pointed out, there have recently been some quite disturbing reports from the NAO suggesting that money for programmes is being used by criminal elements on an international scale.
I think that the amendment is very sensible. If the Minister or the noble Lord, Lord Purvis, feel unable to accept it, we may have to return to this matter in rather more detail on Report because the impact of the department having a target of 0.7% will, in my view, have a seriously deleterious effect on the effectiveness of the overseas aid programme, and that needs to be monitored.
Lord Lawson of Blaby
It is particularly relevant to what we are debating today, and I very much hope that the Minister will address it. I am opposed to the climate change policy of this Government because its purpose is to procure worldwide decarbonisation. That means getting the poor people in the developing world, whom we have been discussing, to move away from the cheapest form of energy and, instead, to embrace, at present and for the foreseeable future, much more expensive energy. In other words, it is a policy to impoverish poor people in the developing world. That is why I am opposed to it. It seems a bizarre and odd way in which to run a whelk stall having a Bill that is intended to relieve the poverty that we intend to create. I should be grateful if my noble friend can explain that.
Baroness Northover
I say to my noble friend Lord Tugendhat that I never expected anything other than full scrutiny of the Bill in this House. He can be assured that I made that extremely clear within my department, as I have done on other Bills in other departments in other instances.
The key issue here is that the Bill is about ensuring that the UK continues to meet its commitment on aid, which it has finally met. I am incredibly heartened by the cross-party agreement on this. As we heard at Second Reading, we know how much this is needed. However, underlying this debate is a sense that this is not the case and that there may not, therefore, be value for money. I emphasise that the Government have a clear commitment to ensuring value for money. I know that the Economic Affairs Committee in 2012 was concerned about the planned scale-up to meet the target because there was a significant increase in the budget. Clearly, the committee was right to raise that issue. However, we have now completed the scale-up to 0.7% and a number of external bodies have looked at this, including the December 2014 DAC external peer review, which said of our scale-up that our,
“Well planned … implementation was carefully monitored … and at the same time, strong efforts were made to avoid compromising the quality of the ODA programme, and progress towards results was regularly reviewed”.
In addition, we have strengthened the evidence base and procedures for project investment decisions. All proposals must have a business case, with proposals for projects of £40 million and above being subject to review through the department’s quality assurance unit. We have invested in strengthening programme management processes, capability and systems to transform the way in which we deliver programmes so that we are better able to tackle the underlying causes of poverty and conflict. We have introduced tighter spending controls. The threshold for ministerial approval of project business cases was reduced from £40 million to £5 million, with Ministers also approving supplier contracts worth more than £1 million. We have increased the use of payment by results. Under this approach, the department makes payments only after pre-agreed results are achieved, rather than up front. We have launched a development tracker online tool to provide more public information on UK development investment in projects. The department has also been commended for its openness. We have also talked in other amendments about the external scrutiny that occurs. I therefore hope that noble Lords are reassured about the level of scrutiny and what we have put in place within DfID.
There may be, at heart, disagreement here. Does the world still need this assistance or not? In terms of value for money, the assumption that because the budget has increased it would therefore be poor value for money needs to be challenged. As to the comments of my noble friend Lord Lawson, I am happy to engage on climate change, but perhaps not now.
Lord Purvis of Tweed
My Lords, I am grateful for the opportunity to respond to the points that have been made. I hope that my noble friend considers that there has been proper consideration of all these issues in Parliament and that he does not feel that some Members of this House have a greater right than others to take part in any of the proceedings—whether because of age, experience or anything else.
The Bill repeals only one section of the 2006 Act, which is why I was exploring the existing duty within that Act on Ministers to report. The section that would be repealed requires,
“each annual report to include an assessment of the year in which the 0.7% target is expected to be met”.
However, as I have said on a number of occasions today, because this Bill maintains the position that the target will be met, it will, in addition to the provisions in the 2006 Act, be the mechanism for reporting going forward. Therefore, is it appropriate to include the noble Lord’s amendment in the Bill, or are the provisions in the 2006 Act and in this Bill the correct mechanisms for reporting?
I believe that the mechanisms in the Bill, in addition to those already on the statute book, are appropriate and that the criteria on effectiveness, potential corruption, whether the ODA budget is meeting the UN development goals and all the undertakings that we have made to international organisations—and, indeed, on value for money—are already covered by the 2006 Act and the independent evaluation that will be provided in the relevant reports. On that basis, I invite the noble Lord to withdraw his amendment.
Lord Tugendhat
I will make just two points. First, as regards participation in the debate, I was very pleased to hear what my noble friend had to say. I gained the distinct impression this morning, and in the debates we had before the break, that a number of Members of this House seemed to feel that there was something improper about intervening in the debate to suggest changes to the Bill. That was certainly the impression which I felt a number of noble Lords gave—although not my noble friend himself or the Minister. But that impression certainly came through very strongly from the other side of the Committee.
Secondly, the noble Lord made some very interesting points. I want to make it clear that value for money means two things. It means value for money for the recipients of the aid programmes and value for money for the British taxpayers who are putting up the money. It is more difficult to ensure value for money for the recipients of the programmes, because in some of the countries in which the programmes take place administrations are rather exiguous and the vested interests to which the noble and right reverend Lord the former Archbishop of Canterbury drew attention at Second Reading are more powerful. As we discussed at Second Reading, DfID is quite rightly shifting the emphasis of its programmes towards the more fragile and poorer states. But, by definition, it is in the more fragile and poorer states that administrations are weakest and that vested interests that may oppose the Government, or may indeed control the Government, are strongest. I emphasise that point.
I cannot pretend that I am entirely reassured, but now is not the time to pursue the matter further. Like so many other things, we will come back to this on Report. I beg leave to withdraw the amendment.
Lord Forsyth of Drumlean
“Duration
The provisions of this Act shall cease to have effect after 31st December 2020.”
Lord Forsyth of Drumlean
My Lords, at last we are getting to the end of these amendments—long after sunset, I suspect.
This amendment seeks to introduce a sunset clause. It would enable the Bill’s provisions to apply for a reasonable period of time—that is, to 2020. There has been sometimes quite vigorous disagreement in this Chamber about the merits of the Bill, and a number of anxieties have been expressed about the 0.7% target and the impact that it is likely to have on value for money, the decisions that are taken by DfID and other government departments, the impact on aid programmes themselves, on the relationship with the multilateral organisations and on accountability. Some believe that having a declaratory target in the Bill will somehow encourage other countries in this regard. I believe that the United States, for example, which is still the richest country in the world, spends less than 2% of GDP or GNI—I am not sure what the GNI figure is—on overseas development aid.
I think that these arguments will be tested once the Bill reaches the statute book. There will be an opportunity for people to look back after five years to see whether all these other countries were inspired and moved forward. It is rather like the argument that we used to get from CND: if we gave up our nuclear weapons, everyone else would give up theirs. It is quite interesting that many of the people who have faith in this idea are the same as those who were advocating that we should give up our nuclear weapons not so long ago.
Lord Forsyth of Drumlean
I hear gasps from the back. It is exactly the same argument. The argument by CND was that if we gave up our nuclear weapons, everyone else would follow suit. That is the argument that was put. The argument put now is that if we enshrine 0.7% in law, all these other recalcitrant countries will follow our example. Interestingly, many former Treasury Ministers and Chancellors of the Exchequer have put their name to this, as have people who have taken evidence. The argument is that those fears that have been expressed are misguided and that none of the disadvantages we have pointed to will come about. Let us test it. If, after five years, we find that those of us who have been a bit concerned were wrong, the Bill can be enshrined again. Indeed, if those who have argued for the Bill are right, it will no longer be a matter of controversy and we will not need a Bill which says that the Secretary of State has to tell Parliament why these proposals fail to meet the target, and that will be the end of the matter. Perhaps we might need a Bill that has a proper penalty and creates a legally enforceable duty on the Secretary of State, which is how this Bill has been sold erroneously to the public, as we have discovered this afternoon.
I believe that the sunset clause is a way to unite us all, end the division over this and give the proponents of the Bill an opportunity to show that their arguments are valid. I have to say that I have my doubts. I beg to move.
Lord Howell of Guildford
I disagree slightly with my noble and tireless friend Lord Forsyth in that he talks about the other countries that have not set upon this kind of fixed target as being recalcitrant. I do not think that that is quite right. They are innovative. If one makes a study of where the Netherlands and Germany are going, and where the advanced thinking in America is going, they are going in a slightly different direction from those who are urging that we must have a fixed amount of official development assistance. They are saying that the whole scene for development is changing. I know that I am coming at this from a slightly different angle from my noble friends and many of your Lordships.
Lord Forsyth of Drumlean
I apologise for interrupting. I was not advancing that view: I was just repeating the view put earlier in our debates, which was held by those who argued that it was necessary to have the target to encourage the others. I agree with my noble friend.
Lord Howell of Guildford
Of course, the implications are that this is not the kind of encouragement that will move them because they are already advancing in different and, in many cases, more advanced directions than we appear to be stuck in at the moment. As we wind up this debate, I fear that this has been an afternoon of sadly missed opportunities. I fully accept that aid still matters intensely. It is notably for humanitarian purposes to support poverty reduction and human development in low-income countries. It is important. Many of us have fought for it over the years and we are a good development power, which gives me pride.
However, it is of increasingly limited help in building partnerships with the emerging powers and with the low to middle-income countries. The point has been forgotten that the thrust of 40 years of development thinking and aid development is to enable these countries to graduate away from development assistance, which in many cases they do not like. It does not fill them with the esteem and the power that they need to get development going.
As grants of aid become less appropriate in some countries, we should be thinking about the new forms of development co-operation that are necessary. Over the next five years, where we could have this sunset clause, all kinds of new perspectives will emerge on development; that I can promise your Lordships. As they develop, this commitment to a fixed percentage of old-fashioned ODA-able kind of aid will look more and more inappropriate. That is why I simply say I hope that, on Report, we will have a little more imagination and understanding that the world has changed. In the mean time, it would be nice to have a sunset clause of this kind. That is why I support this amendment.
Lord Purvis of Tweed
My Lords, on a number of occasions today I have referred noble Lords to the Second Reading debate. In that debate I said that if this Bill passes, it will be because it is based on an entrenched and wide consensus across the three main political parties, external groups and the public, and it will become an enduring law. If a future Parliament chooses to repeal this legislation it will also be repealing that high degree of consensus. It would also have to be accountable to the electorate, and to some extent, constitutionally, that would be proper.
Therefore I end, with regret, by having to disappoint my noble friend Lord Forsyth. At the end of a long day, I record my appreciation for noble Lords whose support for the legislation Hansard will not be able to reflect—including the noble Lord, Lord Collins of Highbury, on the Opposition Benches, and my noble friend Lady Hodgson and other noble Lords on the Conservative Benches. Hansard does not always reflect the level of support or accurately reflect the opinions of Members in Committee. I hope I have corrected that. In that spirit, I hope that, after sunset, my noble friend will withdraw his amendment.
Lord Lawson of Blaby
My Lords, the hour is late so I shall be brief. My noble friend Lord Purvis made a point about this being agreed by all three political parties. That is true. That makes me worry. In my long experience, in most cases—not all, but most—when all three parties agree on something, they are wrong. There is a very good reason why that should be so. It means that the issue has not been properly examined. If there is not a proper political argument back and forth, there is not adequate examination. So I am afraid that the statement he made does not reassure me in the slightest.
As for the amendment before us, although my noble friend Lord Howell said that he disagreed with my noble friend Lord Forsyth, I think there was no conflict; I certainly agree with both of them. As far as my noble friend Lord Forsyth is concerned, I believe that we need to look at this new, greatly expanded aid programme and how it is working out. One of the problems, which has been alluded to briefly, is that the focus of aid is changing and more and more is going to fragile states and to what are often described as failed states. In those states the amount of corruption is absolutely appalling and there is nothing that DfID can do to eliminate that corruption, although it would like to. So one of the things that we will need to examine if there is a sunset clause and we want to renew this is whether we have, not deliberately, produced a machine that has significantly increased the amount of corruption, which is one of the great evils in these countries and, indeed, is one of the great reasons why they cannot lift their people out of poverty in the way that, happily, so many countries in the emerging world have done over the past few years. But there are others that have not, and that is where we are focusing our aid.
One of the most important things is the separation of economic and political power. This is fundamental to development. If people want to enrich themselves they go into the economic sphere; or they go, for different motives, into public service and the political sphere. If you do not have this separation and people go into politics in order to enrich themselves, which happens in a large number of countries, that is where it is so damaging and where aid will not help. That is why it needs to be reviewed at the end of five years.
Another valid point made by my noble friend Lord Forsyth is that the Minister said explicitly that one of the main purposes of the Bill was to set an example to the rest of the world. Fine. Actually, I do not think that is fine; it is not a proper reason for legislation. But leaving that aside, if that is the reason, after five years we can see whether the United States, Germany, France and Italy have followed suit. I am willing to have a modest wager with the Minister that in five years’ time—if I am still alive in five years’ time, which is unlikely—they will not have followed suit. Our efforts to get other countries to follow our example will prove to have failed, and that is another reason why Parliament should have positively to re-enact this legislation, if it wants to do so.
The final and important point made by my noble friend Lord Howell is that the world has changed—a point that I also made in an earlier amendment—and that there are better ways of trying to creating a better world than dishing out development aid. If that is so and we find that other countries are doing a better job by other means—we do not have time to discuss them now, but my noble friend has sketched them—that is another reason why Parliament should be required to take stock at the end of five years rather than ploughing on with this.
This is not chickenfeed: we are already spending well over £11 billion a year on aid. As a result of this Bill, this amount is scheduled to go on rising inexorably, year in, year out, if the economy is growing. We all hope that the economy will grow—even my noble friend the Minister wishes to see the economy grow—and, if it does, this will get bigger and bigger, year in, year out. However, if this is not the best way to achieve a better world in which there is less poverty and more economic development, we certainly do not want to continue with it.
If this Bill becomes an Act, its first five years will be a test bed. We want a provision that Parliament is obliged to address this issue anew at the end of five years. I strongly support my noble friend’s amendment.
Lord Forsyth of Drumlean
My Lords, of course, if Labour wins the next general election there will be a massive cut in the overseas aid budget because our GDP will fall. I do not know if that is the intention behind the Bill, but it is a curious way of deciding priorities.
I am not going to rehearse the arguments and I am most grateful to my noble friends for their support. I thought, just for a nanosecond, that the noble Lord, Lord Purvis, was going to accept the amendment when he said that by the end of the next Parliament there will be such a consensus across the political parties that no one would dare to repeal this Bill. I thought he would say, “I have the confidence to accept the amendment because the position will be that crowds will be cheering in the streets at the prospect of this legislation being renewed”, based on the fantastic experience that the noble Lord predicts. I have to say to the noble Baroness, Lady Falkner, as she says, “Hear, hear”, that she does not seem to have the courage of her convictions. But I am not going to be tempted into making party-political points. If noble Lords who support the Bill believe that it is going to be so successful, then the very point made by the noble Lord, Lord Purvis, in his remarks would make them open to accepting this amendment.
I sense that people have probably had enough of the Bill for today, and we look forward to returning to it on Report, hopefully after we have had a long rest and everyone has had an opportunity to read all the reports which have been referred to. They provide overwhelming evidence that the Bill should go forward, but that it is in need of amendment. I beg leave to withdraw the amendment.