International Development (Official Development Assistance Target) Bill

Debate between Baroness Northover and Lord Purvis of Tweed

Friday 27th February 2015 Lords Chamber

[Baroness Northover]

I can inform my noble friend that the DAC measures this on an annual basis. That is why the UK needs to report its ODA spend to the OECD in that way. Making this amendment to the Bill would have no bearing on our international reporting requirement, and it is crucial for clarity, consistency and transparency that we continue to report to the OECD in this way.

Secondly, regardless of this amendment, DfID will still have an annual budget, allocated by the Treasury, as we discussed in much detail in the last amendment, which it will plan to spend according to agreed forecasts. DfID will continue to seek funding from the Treasury that would enable the UK to meet the 0.7% ODA target from year to year. This amendment would serve only to risk reducing somewhat the predictability and consistency of the size of the annual budget, again something we addressed in the last amendment. I can assure the House that annual limits and measurements do not prevent long-term planning, which is what I think noble Lords are seeking to do in their amendments. As I said in response to the last amendment, delivering 0.7% GNI as ODA annually provides the United Kingdom with a relatively steady ODA budget each year. This allows for better long-term planning and more effective use of resources over multi-year periods, providing greater certainty over funding levels than would happen if this same target were measured over a five-year period.

DfID has a flexible portfolio of programmes and all of DfID’s spend is subject to a rigorous value-for-money assessment. Due to the dynamic nature of DfID’s portfolio, it is reasonable for programmes to be accelerated and decelerated to accommodate emerging priorities such as the crisis within Syria, for example. In its reporting on managing delivery of the 2013 ODA target, the National Audit Office found no evidence that DfID had failed to deliver value for money in the programmes contributing to the delivery of the ODA target.

My noble friend Lord Lamont expressed concern about measuring the ODA:GNI ratio. There is a clear and agreed statistical process which is overseen by the Office for National Statistics for reporting the ODA:GNI ratio. This enables a final figure to be reported in the year following the year in question. Of course, GNI estimates can and do vary. However, estimates are updated on a quarterly basis during the year in question and the method for assessing 0.7% allows for a reasonable level of statistical rounding to accommodate modest last-minute changes.

The noble Lord, Lord Lipsey, and my noble friend Lord Lamont were also concerned about a potential rush to spend at the end of the calendar year. This is something that we addressed both at Second Reading and in Committee. I would like to reassure noble Lords once more that this is not the case and that there are mechanisms which the department uses to ensure that it spends its money in a strategic and long-term way. As noble Lords will be aware, the spending around the end of the calendar year 2013 was in part because there are some bills which always come in during December. Our bill for the EC attribution always comes in in December. Deposits of promissory notes for the Global Fund to Fight AIDS, Tuberculosis and Malaria and the World Bank are concentrated at the end of the year. I would dispute the suggestion that contributions to the global fund would be a less effective use of resources. I am sure that my noble friend Lord Fowler would certainly dispute that. Reaching the poorest through an organisation like that is often the best use of such funding. The NAO and the OECD DAC have recognised this good practice and have given their assurance that the Government have robust processes and mechanisms in place to manage those budgets.

My noble friend Lord Howell mentioned ways of making sure that we are contributing to development other than through grants. He will be well aware, for example, of the CDC and the contribution that DfID can make through that organisation. The Government are able to invest in a wide range of activities of which I am sure he would be supportive. They lead to wider development and can also contribute in terms of ODA. I will be very happy to give my noble friend all the details of what DfID does in that regard. As I said in response to the last amendment, giving 0.7% of GNI as ODA annually provides a steady budget.

I was extremely glad to hear about the family background of my noble friend Lord Brooke, which rather differs from my own. However, that said, I hope that noble Lords will be prepared not to press these amendments. I understand what they are arguing for, but I would like to reassure them that there is a strategic long-term plan, and adopting 0.7% enables us to deliver it more effectively. We report on it on an annual basis, but that does not mean to say that it is simply an annual budget. It is a longer-term, strategic approach to what we wish to achieve through development. On the basis of that, I hope that the noble Lord will withdraw his amendment, but if he decides that he wishes to test the opinion of the House, I should make it very clear that we will oppose it.

[Lord Purvis of Tweed]

My Lords, I do not think that any new arguments have been put forward on Report on these amendments, which are identical to those we debated in Committee. I do not think that the case has been prosecuted, but let me respond to some of the points that have been raised. I believe that far from improving financial management or making the delivery of ODA more effective, these amendments would actually create a worse situation. In addition, they do not acknowledge that we would have to continue to report annually in accordance with the OECD Development Assistance Committee requirements along with what has not been mentioned, which is the International Development (Reporting and Transparency) Act 2006. These would carry on, quite rightly, because the annual target, which is based on the UN annual target for the number of annual transfers that are direct from government, and the OECD DAC annual reporting mechanisms are both there.

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[Baroness Northover]

The noble Lord has it absolutely right. I am saying that there is no dichotomy between them. It is clear that economic development is transformative; the issue is how you underpin it and take it forward. I was indicating that Jim O’Neill puts that emphasis on human development to have the economic transformation that the noble Lord and my noble friend seek. There is no dichotomy. That is why we approach it in terms of both human development and taking economic development further forward.

[Lord Purvis of Tweed]

My Lords, I thank my noble friends for their amendment and the case that they made, which I understood clearly and which was sincerely made. However, I cannot accept the amendment and shall explain briefly why. In doing so, I hope to give satisfactory answers to the points that they made.

As I understand it, the amendment would place a duty on the Secretary of State to report to Parliament if they had not met the target because the budget was low at the start of the year, they had no ability properly to deliver the expenditure towards the end of the year and this mismanagement would persist in future years. However, not only are there other parts of the Bill that provide for independent evaluation of the impact of the aid in the widest terms, but this Bill complements the 2006 Bill, which also requires statistical reporting that addresses many of those aspects, too. Together, they provide a proper reporting mechanism on the proper delivery of the budget that DfID will have. Therefore, it is a quite distinct issue from whether there are factors that mean that it is hard for DfID to deliver its budget from year to year. That is a slightly wider aspect to which the Minister responded to very properly.

The NAO report was cited again. It is worth stating that I agree with the report and have sympathy with its finding at paragraph 12, which states:

“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”.

That is of course the case. Indeed, the delivery of aid has often been one of the more difficult aspects in different circumstances around the world. That is why there are a number of tools available to government for the proper delivery of it, either through multilateral organisations or from the promissory note mechanism. They are a positive means of delivering proper budget management. In responding to the previous group of amendments, the Minister indicated, for example, that towards the end of a calendar year DfID provides a £1 billion contribution to EC ODA. That is drawn down in December after approval, funnily enough, by the Treasury. Deposits on promissory notes, the Global Fund to Fight AIDS, TB and Malaria and the World Bank contributions are concentrated at the year end. What this Bill affords is the ability for the UK now to enter into a different form of discussions with its multilateral partners, because we will be moving from a situation where we are seeking to reach the target to one where we have met it and are seeking to sustain that. Not only will we be striving to have better delivery of our own aid programme, but we will have a much stronger standing internationally to deliver this for our partners around the world.

Even in the circumstances where we were meeting the target, as we were discussing in Committee, the NAO report recognised the work of DfID in delivering this. I think that the Bill addresses what my noble friends are seeking to achieve, which is that all factors with the proper delivery of aid will be reported to Parliament and will be afforded proper parliamentary scrutiny. Together with the 2006 Act, this legislation will provide for that ability. On that basis, I hope that my noble friend will withdraw his amendment.

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[Baroness Northover]

That is an interesting point. The problem with the aid budget is that you do not see the level of continuity and predictability that you see in other government departments, so, in some ways, the noble Lord has put his finger on why we have this Bill.

Several noble Lords have linked aid and defence. Of course, we recognise that conflict is development in reverse, with no fragile low-income country meeting a single millennium development goal. Helping rebuild fragile states will help tackle the root causes of global problems such as disease, drugs, migration and terrorism, and is far less costly than military interventions. The United Kingdom is, and has long been, a global leader in promoting a “whole of government” approach to international peace and security. The establishment of a new, more than £1 billion Conflict, Stability and Security Fund in 2015-16 will support a larger and more integrated UK effort in National Security Council priority countries.

The noble Lord, Lord Reid, rightly pointed to the outstanding contribution that the military has provided in supporting civilian efforts to combat Ebola in Sierra Leone. I welcome, as we all do, that close working and am sure that we will need to develop it further in the future. Some ODA is, of course, spent by the MoD as well as by the FCO, DECC, Defra, DoH and the Department for Education. I come back to my main point: we are trying to ensure that aid is predictable. It should not be tied to the entirely laudable aim of ensuring that defence or other areas are properly addressed. That is why we cannot support this amendment and I hope that the noble Lord will be willing to withdraw it.

[Lord Purvis of Tweed]

My Lords, if the House will forgive me, I will focus on the specific amendment as it affects the Bill. However, in so doing, I should say that I have respect for, and have been highly impressed by, the quality of this important debate, to which the Minister referred, and its imperative going forward.

I believe that a similar debate is taking place in another place today on the resumed Second Reading of the Defence Expenditure (NATO Target) Bill introduced by Mr Christopher Chope. It will be interesting to see whether Mark Francois, the Minister of State for the Armed Forces, responds to that debate. He will no doubt reinforce his opposition to the Bill in the Commons today, and my noble friends may correspond with him to discover his reasons for that.

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[Baroness Northover]

I think that my noble friend has missed the elements where I mentioned the way in which the Secretary of State will be held to account for how our aid budget is properly and independently scrutinised.

[Lord Purvis of Tweed]

My Lords, Amendment 22 is in similar terms to an amendment tabled in Committee, and Amendments 24 and 27 are new. Noble Lords will recall that in Committee we debated an amendment—at that point Amendment 25, tabled by the noble Lords, Lord MacGregor of Pulham Market, Lord Hollick, Lord Lawson of Blaby and Lord Lamont of Lerwick—which called for an independent inquiry into the independence, efficiency and effectiveness of the Independent Commission for Aid Impact. We then debated their concerns about the operation, and we now return to their call for that to be the statutory body. I do not believe that they have made a strong case to reconcile the two aspects of it today, either.

Let me address the contribution of the noble Lord, Lord Hollick, because I actually agreed with a large amount of what he said about the need for proper scrutiny. The Minister responded to all those points. The purpose of the Bill, however, is to create a requirement not only that there is independent evaluation—it is important for that to be in the Bill anyway—but that it is the duty of the Secretary of State to report how that independent evaluation is being carried out. These are two very significant powers that the legislation will be providing. They strengthen the existing process for the 2006 Act, which is now on the statute book. We have seen a number of the annual reports presented under the basis of that Act; they will be even stronger.

As the Minister indicated, the mechanism that we wish to assume would be in place is ICAI. The question is whether ICAI can carry out its functions as an advisory NDPB, answerable to this specific sub-committee of the Commons International Development Committee, or whether it is required to be on a statutory footing for the exclusive purpose of this evaluation. From my own position, I believe that it is not flexibility but good governance which allows the structure in place to be taken forward—with of course the view, as the noble Lord, Lord Collins of Highbury, indicated, that there is sufficient scope in future to improve that process even more. That will of course have to take place anyway in May 2015 because the memorandum of understanding between the Department for International Development and the Independent Commission for Aid Impact is due to be renewed, as is the framework agreement under which it operates and is accountable to Parliament.

I think that I should highlight this, because it may address some of the points which I think have been erroneously cited about whether DfID is effectively being judge and jury when it comes to evaluating this. The memorandum of understanding states very clearly that under its principles, in paragraph 2.1, ICAI should:

“Ensure independence of staff, decision-making and the process of undertaking evaluations, reviews and investigations”.

Further, in paragraph 2.5, the memorandum says that DfID should:

“Respect the independence of ICAI staff, decision-making and reports”.

Any change to that would have to be brought to Parliament—to the Commons IDC—which I have no doubt would be scrutinising it, in addition to the very fact that the renewal of this memorandum and the framework will be brought to Parliament anyway.

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[Baroness Northover]

As I say, this Bill, unlike the discussion on care, which I remember very clearly, has had overwhelming support. There were a lot of Divisions over how best to take care forward, as the noble Lord, Lord Lipsey, acutely knows. Given the overwhelming support within the other place and, thus far, in this place, I hope that the noble Lord, Lord Butler, will withdraw his amendment. If he chooses not to do so and to test the opinion of the House, I hope that the House will reject his amendment.

[Lord Purvis of Tweed]

My Lords, this is a sunrise clause amendment before we debate a sunset clause amendment, neither of which I would accept. Commencement orders come with legislation, usually through secondary legislation to do with the administrative implementation of agreed primary legislation, but usually to do with technical aspects of proper timing for administrative or technical purposes. That is quite different from this measure. The Bill has now had more than 25-and-a-half hours of parliamentary scrutiny. It has gone through the House of Commons and has been tested by Division in both Houses. Once it is on the statute book in this Parliament the proper parliamentary manner in which this would be repealed would be for a measure to be put forward in the next Parliament to repeal it. That would have to be done in the full glare of public opinion after significant debate and, one hopes, after a degree of consensus. Funnily enough, all those aspects are why this Bill was presented to Parliament. All those aspects are there, and that is why I believe it is strong. I know that the noble Lord who put forward this amendment is not like other noble Lords who have indicated very clearly that they oppose the 0.7% target in principle. They have said that it is gesture politics and a dishcloth of a proposal. I know that the noble Lord does not hold those views, but nevertheless I do not believe that this is appropriate. Parliament will have expressed its view on the Bill. I hope that it will be enduring legislation but the proper course would be for a future Parliament to repeal it, if it so chose. Therefore I hope that the noble Lord will withdraw his amendment. If he does not do so, I would ask the House not to accept the amendment.

International Development (Official Development Assistance Target) Bill

Debate between Baroness Northover and Lord Purvis of Tweed

Friday 6th February 2015 Lords Chamber

[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.

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[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.

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[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—

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[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.

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[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.

International Development (Official Development Assistance Target) Bill

Debate between Baroness Northover and Lord Purvis of Tweed

Friday 6th February 2015 Lords Chamber

[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.