International Development (Official Development Assistance Target) Bill

Debate between Lord Hamilton of Epsom and Baroness Northover

Friday 6th February 2015 Lords Chamber

[Lord Hamilton of Epsom]

I very much support my noble friend Lord Tugendhat’s amendment. In the spirit of my noble friend Lord Cormack, I certainly do not intend to speak for very long.

The first point that my noble friend Lord Tugendhat made was one of transparency. He made the point, quite rightly, that we measure everything else in terms of GDP rather than GNI. If we want to take the public with us it seems to me to be very sensible to use GDP rather than GNI. Let us be honest: the reason why people support this Bill with the enthusiasm they do is because they want to be seen to be generous with other people’s money. We all like people to be generous with their own money; it is slightly different when they are being generous with other people’s money. As that is the purpose of the Bill, we might as well make it as clear as we possibly can by using GDP rather than GNI.

My noble friend Lord Tugendhat also made the point that the difference between GNI and GDP is very small at the moment. In that case, this is a unique and wonderful opportunity to use GDP instead of GNI before the two indices start to part from each other. We have no idea what might happen in the future; the economy of this country may change and it may well be that we start getting less money if GNI starts to increase above GDP.

If we really want to nail this down, I say to my noble friend the Minister that this is a wonderful opportunity to embrace the amendment and get it on GDP, which everybody understands. That also means that we then guarantee that the 0.7% figure means something in the future, if that is what the Bill and the House desire.

[The Parliamentary Under-Secretary of State, Department for International Development (Baroness Northover) (LD)]

My Lords, I intervene briefly at the invitation of my noble friend Lord Forsyth. Amendment 2, proposed by the noble Lords, Lord Tugendhat, Lord Lipsey and Lord Forsyth, seeks to change the 0.7% target from GNI to GDP. If my noble friend Lord Forsyth was addressing me in seeking a reaction from the Front Bench—he did say “she”—he must have misheard. I made no comment. I would not have dreamt of doing so as a comment on what he was saying, even though I have found that reading economics textbooks to my dyslexic son has helped to inform me.

--- Later in debate ---

[Lord Hamilton of Epsom]

I follow my noble friend Lord Howell on the remarks of the noble Lord, Lord Cashman. He is absolutely right that economists indulge themselves in a form of science that is not exactly reputable. Some noble Lords may remember the letter written to the Times by, I think, in excess of 360 economists, who said that the Thatcher economic policies were absolutely doomed to pitch this country into constant recession. That was the turning point for the economy in the United Kingdom, and things really took off from there. We are very much at home with him on that.

The noble Lord also spoke about how we should feel enormous compassion for those in great need in places in Africa and so forth. We all very much sympathise with where he comes from there, but the point has already been made in this debate that only 10% of what goes to these countries comes from development aid programmes. The rest comes from investments made in these countries. Let us face it: what is really going to make a difference in a desperately backward country such as the Democratic Republic of Congo is the fact that the Chinese are prepared to put in extensive railway and road networks in return for copper and cobalt concessions in that country. These are the things that will really make a dramatic difference in a country such as the DRC. In terms of relativity, development aid programmes are merely a pinprick compared with what is being invested in return for mineral resources.

To return to the amendment, the noble Lord, Lord Cashman, is right that this is not about economics. This is much more about accountancy. Some people will argue that accountancy is one of these other rather faulty arts, rather than a science, but I think it comes nearer to being a science than an art. What we are talking about here is how you manage money effectively. It must surely be right that you can take somewhat longer to meet a programme, rather than restricting yourself to 12 months. People who support this Bill have not really answered my noble friend Lord Forsyth’s point about 40% of the budget being spent in November and December of a year because it is bumping up against the end of the financial year. This should strike an enormous amount of disquiet in people’s minds, because it suggests to anybody that the expenditure of this money is being rushed. No control is being put in—we are just trying to meet targets to show that we spent all this money, and where the money goes is of much less concern.

I spent a certain amount of my youth in the army in Kenya. After independence, one of the famous elements of Kenyan politics was the Wabenzi, people in government who drove around in Mercedes-Benzes, many of which had been paid for of course by development aid money. One has to recognise that, in these sub-Saharan African countries, the elements of corruption are very great indeed and there is no respect for development aid programmes. People do not say, “This is being brought into my country to aid the poor, therefore I will not put my hands on it”. The fact is that those in charge manage to get hold of an awful lot of that money, which is why so many of them are driving around in Mercedes-Benzes today.

[Baroness Northover]

My Lords, in considering this group of amendments, I hear what my noble friends are saying about seeking to help the Government to manage our spending on official development assistance in a more flexible and predictable manner. However, these amendments, if carried, would have significant disadvantages, in our view, not least in terms of the flexibility and predictability noble Lords are seeking to promote.

First, as has been made clear previously, there is a need for an internationally consistent approach. The OECD DAC is made up of 29 members, and to ensure that monitoring and reporting of DAC members’ budgets is consistent and can be reported transparently, the DAC has decided to monitor ODA on the basis of single calendar years. If the UK moved to a five-year average, the UK would still have to submit annual ODA information to the OECD DAC. The need for consistency and clarity is essential. Importantly, using an alternative definition would also undermine the weight that our commitment to 0.7% carries with our international partners, as I mentioned before.

It is also important to note that the department already manages to an annual target, as does any other government department—as the noble Baroness, Lady Farrington, mentioned—in order to deliver within annual budgets. Therefore—