International Development (Official Development Assistance Target) Bill

Lord Forsyth of Drumlean Excerpts

Friday 6th February 2015 Lords Chamber

[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.

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[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.

[Lord Forsyth of Drumlean]

My Lords—

[Baroness Northover]

Perhaps I may make some progress.

[Lord Forsyth of Drumlean]

My Lords—

[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.

[Baroness Northover]

I am extremely happy to endorse that.

[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.

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[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.

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[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—

[Noble Lords]

No, you have diverted.

[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?

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[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 Forsyth of Drumlean]

My Lords—

[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—

[Lord Forsyth of Drumlean]

My Lords—

[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 McConnell of Glenscorrodale]

My Lords—

[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.

[Noble Lords]

Oh!

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[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]

My Lords, my noble friend mentioned climate change—

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Moved by

[Lord Forsyth of Drumlean]

27: After Clause 6, insert the following new Clause—
“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.

[Noble Lords]

Oh!

[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.

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[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.

Amendment 27 withdrawn.