Lord Fowler
To ask Her Majesty’s Government, further to the Written Statement by the Chancellor of the Exchequer on 12 July (HCWS172) setting out the fiscal circumstances under which they will return to spending 0.7 per cent of Gross National Income on Overseas Development Assistance, as stipulated in the Official Development Assistance Target Act 2015, whether they intend to bring forward primary legislation in this area; and if not, why not.
The Minister of State, Cabinet Office and the Treasury (Lord Agnew of Oulton) (Con)
My Lords, the Government remain committed to the International Development (Official Development Assistance Target) Act 2015 and to spending 0.7% of gross national income on official development assistance. The decisions taken are in line with the spirit and framework of the Act, which envisages situations in which departure from the 0.7% may be necessary. Yesterday’s vote provided the House of Commons with a further opportunity to consider the return to 0.7%. In the light of that and our continued commitment to the 2015 Act, there is no need to bring forward additional legislation.
Lord Fowler (CB)
I am afraid that that reply does not convince me. Surely the vote yesterday means that an Act of Parliament passed by both Houses has been overturned by a last-minute Motion passed by just one House, in spite of clear government commitments in November that they would bring forward proper legislation. I will make one short point: I hope the Minister recognises that the vote yesterday does not represent the view of this Parliament.
Lord Agnew of Oulton (Con)
My Lords, I can reassure my noble friend that the 2015 Act had provision for suspension of the 0.7% depending on major events such as the one we have just experienced with Covid. I politely remind him that we have seen the largest drop in our economy with regard to our GDP in 300 years, and the Act made provision for adjustments to the rate in light of such events.
Lord McConnell of Glenscorrodale (Lab)
My Lords, I drew attention to my entries in the Lords’ register. When the Government confirmed the withdrawal of military support in Afghanistan they stressed, rightly, the critical importance of advocacy of the rule of law, democracy and our support for development in that country as an alternative way forward. Yet, as just one example of these cuts, a project for rural women in Afghanistan has been cut in the third year of its four-year programme, resulting in thousands of women who will no longer receive literacy training or vocational educational training, or be able to complete their courses. Do not the Government think the Taliban will be cheering this decision, delighted that we took it yesterday in the House of Commons? Do they really think that we promote the rule of law and democracy by breaking our own laws in the way that has just been announced by the Chancellor and Prime Minister?
Lord Agnew of Oulton (Con)
My Lords, I respectfully disagree with the noble Lord. We have not broken our own laws. As I pointed out in my supplementary answer to my noble friend, this is a suspension of the current percentage which is allowed under the original Act. We have committed through the debate yesterday that we will revert to the original Act’s commitment when the economy allows us to do so.
Lord Purvis of Tweed (LD)
My Lords, as the sponsor of the legislation through this House, I calmly say to the Minister that, when he refers to the spirit of the legislation, that spirit was based on a two decades-long consensus that we should not only meet our obligation to the world’s poorest but sustain it. We have enshrined it in a law that the Government are now moving away from, using executive authority. If the Government wish to bring forward changes, they should bring forward legislative changes and not simply Motions. My question to the Minister is very simple and he will have the answer because it is in his briefing pack, I am sure. If the new fiscal tests are linked to the pandemic, it follows that they would have been met when we did not have a pandemic. Under which calendar year in the past have those physical tests been met?
Lord Agnew of Oulton (Con)
Just to restate the point, Section 2 of the 2015 Act envisages circumstances in which the 0.7% target is not met due to
“economic circumstances and, in particular, any substantial change in gross national income”
and
“fiscal circumstances and, in particular, the likely impact of meeting the target on taxation, public spending and public borrowing”.
We last met those requirements in 2018-19.
Lord Judge (CB)
Please can the answer to this question not be that the law has not been broken? We had that last week and it was not an answer to my question. Is it consistent with the sovereignty of Parliament that an obligation or duty imposed on the Government by primary legislation can be expunged or suspended by Ministerial Statement?
Lord Agnew of Oulton (Con)
My Lords, at the risk of being tedious, we have not in any way expunged the Act. We have suspended it in line with the section that I cited in the previous answer.
Lord Bates (Con)
My Lords, for many years Her Majesty’s Government have taken great pride in regularly publishing reports on the impact of overseas aid in terms of the millions of lives saved, children educated and jobs created. Will my noble friend say whether any similar impact assessment of the likely effect of this reduction in our aid budget has been carried out by the Treasury or the FCDO using the same established methodology? If so, can it be shared to inform future debates and votes, and if not, why not?
Lord Agnew of Oulton (Con)
My Lords, as my noble friend will know, we are undergoing a rationalisation by moving DfID into the FCDO. The Foreign Secretary has agreed that he will focus all of government’s investment and expertise on issues where the UK can make the most difference and achieve the maximum strategic coherence. The FCDO is working through what this means for individual programmes, in line with the priorities identified. We will of course report in detail when those arrangements are concluded.
The Lord Bishop of Worcester [V]
My Lords, the Chancellor’s Statement published on Monday finally outlined the meaning of the much-repeated but undefined government line that 0.7% aid spending would be restored when the fiscal situation allows. Will the Minister accept that to many working in the field of international development, these criteria point to a permanent rather than a temporary cut in overseas development, which in any case was due to change and has changed because it is a percentage of gross national income? Does the Minister recognise that this decision represents a terrible sentence, probably of death, for thousands of children and risks doing untold reputational damage to Britain’s leadership in international development?
Lord Agnew of Oulton (Con)
I respectfully disagree with the right reverend Prelate on that assertion. We will absolutely be prioritising the budget for the programmes of the most urgency and impact, so I do not accept that. I also point out to him that we have made considerable investments during the Covid crisis by helping other countries through our large investment in COVAX and, indeed, the Prime Minister’s commitment at the G7 to make a large number of vaccines available outside this ceiling of 0.5%.
Lord Collins of Highbury (Lab)
My Lords, this decision goes against a long-standing consensus across Parliament. It is against the Conservative Party’s manifesto and against the law and, most importantly, it is against the national interest. As a direct result of these cuts, more people will be forced to flee their homes and more people will turn to extremism in a less secure and stable world. To pick up the point the noble Lord, Lord Bates, made, we have been told in this House that officials carried out an equalities impact assessment which looked at our bilateral country spending. Can the Minister give us a guarantee this afternoon that this will be made public, and quickly?
Lord Agnew of Oulton (Con)
My Lords, it is important to remind the House that we have done this in the largest crisis to affect our country since the war and the largest recession in 300 years, with borrowing of £300 billion—14% of GDP—to deal with the crisis. It means that there has had to be some give in the system. We are committed to re-establishing it as soon as the economy allows it, and I am sure that the information the noble Lord asked for will be available soon.
Baroness Northover (LD)
As the Minister who took the Bill through the House, I can tell the noble Lord that this is totally contrary to the spirit, let alone the letter, of the law. Has the Treasury made an impact assessment of its new policy on the validity of the integrated review and the UK’s ability to deliver a successful COP 26?
Lord Agnew of Oulton (Con)
My Lords, I respectfully disagree with the noble Baroness that it is in breach of the Act. The Act provides for accountability to Parliament in the form of a Statement in the event that the Government do not meet the 0.7% target, to include the fiscal reasons on which the Government rely at that time. This week we have set out clearly and transparently how the Government will approach that task.
Baroness Sugg (Con)
My Lords, I struggle to understand how this new policy can be described as temporary. In response to the question asked by the noble Lord, Lord Purvis, my noble friend the Minister referred to one part of a financial year in the past 20 years, and that was only one. The Written Ministerial Statement refers to “a sustainable basis”. Given the implication of this new policy, it is important to be exact, so can my noble friend define exactly what is meant by “sustainable”?
Lord Agnew of Oulton (Con)
My Lords, that will be for when we have re-established a fiscal position that allows us to meet our commitments without having to borrow money on a day-to-day basis. That is the position we are in now, and I respectfully remind noble Lords that it will be the next generation who will pick up the tab for this huge amount of borrowing, and something has to give. That is what has happened in this situation.
Lord Berkeley of Knighton (CB) [V]
My Lords, given what the Minister has just said, I wonder how he would respond to the devastating observation by John Major yesterday that we seem prepared to build an expensive national yacht—which I would describe as a floating embassy—that we neither need nor want, while cutting back support for thousands of malnourished and starving people around the world who we could and should be further helping to feed.
Lord Agnew of Oulton (Con)
I disagree with the noble Lord. The vessel to which he refers will be to promote Britain and trade and lead to wealth creation. The cost—some £200 million, I understand, has been mooted—should be amortised over the life of that vessel. The running costs will be covered by the companies using it. It will bring wealth to this country, and wealth creation is a high priority for us at the moment.
Lord Parekh (Lab) [V]
My Lords, 0.7% of gross national income is a moral obligation, it is an international institutional obligation because of our membership of the United Nations, and it is also a statutory obligation, so supersession of this obligation requires enormously compelling circumstances. I cannot see why it has to give way to others, especially when the amount involved is no more than £4 billion out of a total of more than £600 billion that we are going to have to raise. The Government say that this constraint in expedient and temporary. What measures are we taking to make sure that what is temporary does not become permanent? The Government say that they will return to 0.7% when the fiscal situation is established on a sustainable basis. That is a very vague term. How do we decide what is a sustainable basis? It takes a long time to work it out and, more importantly, it is a term which can be understood in several different ways. How can we be sure that the Government will return to 0.7% and what reassurance can be given to people who are deeply worried about the step that the Government are about to take?
Lord Agnew of Oulton (Con)
I disagree with the noble Lord that this is a small sum of money when it would be 1p on income tax and is something like four times the amount committed to hiring 50,000 more nurses and four times the amount committed to hiring 20,000 more police officers. We have set out, as agreed in the Commons yesterday, the criteria for re-establishing it and committed to re-establishing it when they are met.
Baroness Nicholson of Winterbourne (Con)
Does the Minister agree that, given that the amount of funding is a little smaller than earlier, despite the fact that it is extremely generous in global terms, this is the moment to look more carefully at the way in which these funds are spent? Might it be possible, for example, to introduce open tendering rather than automatic disbursements of funds before there is any open competition, as is happening at the moment and has been happening for a long time? Might he also be willing to consider some successful monitoring? There are many ways of monitoring, but at the moment the funding does not seem to be subject to such things and certainly it is not published. Will the Minister consider those two items crucial when he delivers the outcomes of this slightly lower sum of money being spent?
Lord Agnew of Oulton (Con)
I strongly agree with my noble friend. We need to be much more stringent in our assessment of how the money is spent. We saw from the St Helena Airport incident, for instance, that money can be wasted. I am sure that with less money available there will be much more scrutiny. That tends to be a natural reaction in organisations. I will take back my noble friend’s useful suggestions to the Treasury.