Developing Nations: Technical and Vocational Education
Lord Howell of Guildford Excerpts(9 years, 1 month ago)
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Baroness Verma
My Lords, I will not specifically go into that programme, because we should be proud of our programme across DfID. That is about increasing employment—productive employment—for women. As I said, they start from school, where we give them the opportunity to gain an education and skills. We can then develop to ensure that they are both productive economically and, where they are unpaid, able to use those skills to develop entrepreneurialism outside their workplaces. I read in a recent report that if we give women opportunities, we can add $28 trillion-worth of value to our global GDP.
Lord Howell of Guildford (Con)
Is my noble friend aware that the Commonwealth is giving the highest priority to gender equality and full employability of women? That is based on the simple proposition that countries that do not give absolute equality to half their labour force will simply not develop—growth goes with gender equality. Is she aware that in Malta, at the Commonwealth Heads of Government Meeting in November, there will be a major conference on gender equality lasting four days which will be attended by all 53 nations of the Commonwealth?
Baroness Verma
I absolutely agree with my noble friend, and I will be attending to ensure that we again participate in those important debates. My noble friend makes the poignant point that unless we have everybody involved in economic productivity, we lose the value of 50% of the world’s population.
Gender Equality: Developing Nations
Lord Howell of Guildford Excerpts(9 years, 8 months ago)
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Baroness Northover
There is inequality for women everywhere. The Foreign Office, as part of its work particularly on International Women’s Day, is engaging with those countries where these problems are particularly acute. In the case of Bahrain, the ambassador is holding a round table with a number of Bahraini women from all walks of life to discuss these issues.
International Development (Official Development Assistance Target) Bill
Lord Howell of Guildford Excerpts(9 years, 8 months ago)
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Lord McConnell of Glenscorrodale (Lab)
My Lords, I fully endorse and support the two important points made by the noble Lord, Lord Davies, which were both about our values as a nation, our leadership and our use of soft power, the importance of which was so ably described in the recent report of your Lordships’ Select Committee on Soft Power, which I hope we will debate in the near future.
I want to add one point that addresses precisely the point just made by the noble Lord, Lord Lawson. He raised the issue that is at the heart of the debate on this Bill; it is that this Bill, above all else in my view, allows us to move from a debate on the quantity of aid from this country to the developing world to a debate on the quality of that aid. For 40 years, we have debated only the quantity of our international aid. This Bill allows us once and for all to move on from that debate on quantity to debate the quality of that aid year after year, as the budget for the Department for International Development or any successor department comes in front of Parliament.
Therefore, contrary to the point that was just made by the noble Lord, Lord Lawson, I think that at its heart this Bill allows us to move from the debate on quantity to a debate on quality, and that is why your Lordships’ House should support it.
Lord Howell of Guildford (Con)
My Lords, I rise to support this amendment for non-Treasury reasons, which may be a relief to noble Lords. We all know that the Treasury is full of very clever people, but frankly the Treasury is not always right and therefore there would have to be good reasons, other than the very fine reasons put forward by noble Lords who have already spoken, for urging that there should be an extra annual check on this programme and target.
My reason is simply that other, more effective, ways of promoting overseas development, eradicating poverty and meeting development goals are emerging all the time. The concept of ODA was invented 30 or 40 years ago, possibly more, and many new ideas have developed for promoting development and for contributing to development in more effective ways since then. The truth is that in looking at this Bill and the idea of the 0.7%, your Lordships are really dealing with an old agenda. These were fashionable views 20 or 30 years ago. Aid and development techniques have moved on rapidly.
Official development assistance—the ODA concept that we are dealing with—is rapidly becoming irrelevant. The complex challenges the world is now facing require a radically different financing model, one that requires a comprehensive approach to financing, embracing all sources of public and private finance available to developing countries. Tying the development effort unconditionally and without annual review into an “ODA-able” programme is bound to divert resources from far more productive ways of helping the poorest and encouraging development in today’s conditions.
One of the major contributions developing countries need is peace and security through military assistance, techniques and training, none of which is “ODA-able”. We are deliberately limiting our capacity to help the development process in the conditions of the 21st century, so the case for annual review and revision by the Treasury to keep our development spending programmes up to date and effective seems unanswerable.
Lord MacGregor of Pulham Market (Con)
My Lords, I am very much aware of ex-Treasury Ministers speaking, but nevertheless I want strongly to reinforce the points made by the noble Lord, Lord Butler. Before I go on to my arguments, I state for the record that I wholly support the commitment and proud record of the UK on humanitarian and development aid. We are one of the world leaders. I do not agree with the noble Lord, Lord Davies, that it has to be enshrined in law to make that point, because our record and the level of spending to which we commit ourselves demonstrate that. This amendment in no way detracts from that.
I shall make four points in favour of this amendment, and I shall repeat very briefly what the noble Lord, Lord Butler, said. It all stems from my years of experience in dealing with public expenditure, in particular as Chief Secretary when the noble Lord, Lord Butler, was leading the programme in the Treasury under my noble friend Lord Lawson as Chancellor.
The Parliamentary Under-Secretary of State, Department for International Development (Baroness Northover) (LD)
My Lords, I thank noble Lords for bringing this amendment before us and welcome the level of attendance in the Chamber.
The noble Lords who have tabled this amendment have a formidable track record in the Civil Service and in government, not least in the Treasury, as the House will recognise, and are supported by very experienced voices. I value enormously their input and insights. It is extremely important that we take what they say very seriously. Nevertheless, I am afraid that, on behalf of the Government, I must resist this amendment. Perhaps I can explain why.
The Bill places a duty on the Secretary of State for International Development to meet the 0.7% GNI ODA target in 2015 and each subsequent year, and to lay a statement before Parliament in the event of it not being met. This proposed amendment in effect places the decision, though not the responsibility, to meet the target first and foremost with the Treasury at each spending round. It therefore provides the possibility for the Treasury to decide that 0.7% is no longer a priority, and for budgets to be accordingly adjusted downwards.
Of course, I am certain that the Treasury will fully scrutinise what DfID does, as, I assure the noble Lord, it does now. The department will, of course, still be subject to scrutiny through the spending review process in terms of how it spends the money. The department is scrutinised not only by the Treasury through the spending review process, as are all departments, but also through the Treasury approval of individual programmes within an agreed regime of delegated authority. I assure noble Lords that this Bill does not affect the role of the Treasury. What it does is send a clear message from this Parliament of its expectations in regard to the aid programme. As the noble Lord, Lord Anderson, put it, it would be wrong to interpose the Treasury into this arrangement through writing it into legislation. The Treasury’s role remains unchanged. Therefore, the proposed amendment of the noble and learned Lord, Lord Brown, is not needed either because of the scrutiny I mentioned, and it too should be resisted, if it were put.
The allocation of public expenditure is already a primary Treasury function. The Treasury’s role in the spending review is to ensure that the Government’s limited resources are allocated in the best way possible to DfID and other government departments to deliver government objectives, including enabling the UK to meet the 0.7% target—a commitment which this Parliament has debated and on which it has come to a settled view in the other place, and may yet in this place.
One of the challenges of the ODA level has been its huge variation, dropping sometimes to around 0.2%, and at other times moving up to 0.5% and now to 0.7%. That is not the pattern for other departments. Stability and long-term commitment are required. As the noble Lord, Lord McConnell, pointed out, this Bill enables us to move beyond the quantity to the quality of aid. We would not reach 0.7% if we did not already have formal Treasury approval in the spending round. This amendment proposes an additional legislative requirement to do what the Government are already required to do: tell Parliament how they propose to allocate public expenditure.
The noble Lord, Lord Butler, and other noble Lords expressed concerns that legislation of this nature relieves departments of having to make a case for expenditure. The noble Lord was particularly concerned about the impact that the commitment to 0.7% would have on value for money, as he said in Committee. I reassure him that the commitment to 0.7% is in fact having the opposite effect to that which he fears. It has resulted in a great increase in scrutiny, not a reduction. The Government have stepped up scrutiny and value for money. We have set up the Independent Commission for Aid Impact, which enables strong parliamentary oversight. All DfID spend is subject to a rigorous value for money assessment. A recent review by the OECD’s Development Assistance Committee said that the scaling up of the UK’s aid budget was planned in a way to ensure that the extra money was well spent and had the greatest possible impact. We are now ranked second in the world in transparency on aid finance.
In conclusion, I am afraid we do not feel that this proposed amendment is in the spirit of the Bill. The Bill allows Parliament to send a clear message to the Government about the spending expected on ODA from year to year. Most accept that the need is there. I thank the noble Lord, Lord Butler, and others for their recognition of that. Most accept that we can be very effective in helping to meet that need, for which I thank them. One day, of course, we all hope that this assistance will not be needed, but we are still very far from that place. Of course, as my noble friend Lord Howell said, we also harness many other means to assist development, including working with very fragile states such as Somalia and Syria.
Lord Howell of Guildford
I am extremely grateful to my noble friend. Before she sits down, will she address the point that the noble Lord, Lord Reid, made, and which I tried to make, about outcomes? Will she comment on the fact that ODA and “ODA-able” expenditure is of less relevance in promoting development and overseas assistance to eradicate poverty than it was in the past? That is a rather important consideration on which I would value her views.
Baroness Northover
Outcomes and results are a major focus of what DfID does; I hope that will reassure the noble Lord. We recognise the complexity of working in developing countries. The very fact that we focus on fragile states, and use all sorts of other means to try to assist their development, stability and security, shows that we understand how complex this environment is. However, it would be contrary to the aims that we are talking about if we made a provision that the Treasury, however laudable the institution, organisation and department may be, can effectively switch the target on and off at will.
The amendment has the potential to undermine the clear message that Parliament is sending and the consistency and predictability that the Bill, in its essence, seeks to achieve. It also has the potential to undermine the authority of Parliament itself by placing the Treasury in the role of gatekeeper between Parliament and government.
I have given a great deal of thought to the noble Lord’s amendment. Even if he does not agree with my position and is therefore unwilling to withdraw it, I hope that he will accept the argument that I make. If he wishes to test the opinion of the House, I make it clear to those who support the essence of the Bill that we oppose the noble Lord’s amendment.
Lord Howell of Guildford
My Lords, this amendment, like the last one, is about more than public expenditure control, important though that is. It is, as my noble friend has just emphasised, about flexibility. Why is there an essential need for flexibility? Because the fundamental views about the relationship between ODA, development and the eradication of poverty are changing fundamentally all the time—and certainly will change radically over a five-year period.
The worry of many of us who have worked for years in development and overseas aid issues—almost half a century in my case—is that the promotion and thinking behind this Bill, and behind the reluctance to have more flexibility, is blind to the entirely new thinking that has been developed in the OECD and other areas about the way in which development assistance should be contributed by the richer countries of the world. The concept of what is called “country programmable aid” has now been introduced. This is generally recognised to be a far more effective measure and a real contribution to aid from richer to poorer countries than the old ODA definition. The other very powerful new tool that has come along is impact investment, which would not be included under ODA at all because there is no grant element in it, and it would have to have a grant element to be ODA.
It is sad that we should be ignoring flexibility and insisting on a rigidity that will exclude development of the most effective new instruments for the eradication of poverty and for helping poor people and development processes throughout the world. That is why this amendment, like the last one, would give flexibility and help in our aid efforts and not hinder them.
Viscount Eccles
My Lords, Clause 3(2) states:
“Accordingly, the fact that the duty in section 1 has not been, or will or may not be, complied with does not affect the lawfulness of anything done, or omitted to be done, by any person”.
It seems to me that this means that the promoter of the Bill recognises that there has to be some flexibility. If this clause does not provide flexibility, I am not sure what it is for. I would be grateful if I could be told how I am expected to explain this in the bar of the Black Bull, if I am asked, without the other members in the bar of the Black Bull saying, “Oh well, that is typical political behaviour. Now you see it, now you don’t. Now you’re going to do it, now you’re not. All you do is put a provision in a Bill and then in an Act of Parliament which lets you completely off the hook”.
International Development (Official Development Assistance Target) Bill
Lord Howell of Guildford Excerpts(9 years, 9 months ago)
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Viscount Astor (Con)
My Lords, my amendment is, I hope, a modest and helpful one that might find some favour with the noble Lord, Lord Purvis, and which addresses some concerns that I raised at Second Reading.
Perhaps I should say again that I support the principle of our foreign aid budget being 0.7% of GDP. I hope that that is clear enough to the noble Lord opposite so he will not have to address his Twitter account about those of us who are speaking from this side of the Committee. The issue has always been whether that figure should be a target or enshrined in law. The Government have encouraged the Private Member’s Bill that the noble Lord, Lord Purvis, has brought forward, which indeed enshrines the percentage in law. We therefore have to consider the Bill, what it achieves and whether it can be improved or amended during its passage through your Lordships’ House.
My main concern is that in order to achieve the spending required, the department will not always be able to have a reserve for emergencies, particularly humanitarian emergencies, or be able to account for programmes that go over from one year to the next. Emergencies are always important, whether they are due to war, famine or disease. As we have heard, humanitarian aid is a very small part of the total budget of the department. There must be funds available for the expected and the unexpected; there must be a reserve fund.
The Minister also wrote to me about the difficulties of having two year-ends—the calendar year-end and the financial year-end. She said in her letter that,
“it is not unusual for accounts to be converted from calendar to financial years across a range of public and private sector activity”.
That is entirely true, but what is not usual is for them to be converted on an annual basis. That would be an auditor’s nightmare.
What my modest amendment is designed to do—I accept that it might not be as well drafted as it should be—is give the department some flexibility in the way it operates without in any way affecting the aims of the Bill. Although the Minister was kind enough to write to me, one issue that she did not address—perhaps she can do so today—was answering the question I asked at Second Reading about what portion of our contribution to the EU budget is spent on aid. It is substantial and is something we should perhaps be proud of. Why should the amount not be stated in the report that the Secretary of State brings before Parliament?
My amendment relates to Clause 2(3); and your Lordships will see that in the Statement that has to be made to Parliament if the target has not been met, various reasons have to be given, which include,
“(a) economic circumstances and, in particular, any substantial change in gross national income … (b) fiscal circumstances and, in particular, the likely impact of meeting the target on taxation, public spending and public borrowing”,
or,
(c) circumstances arising outside the United Kingdom”.
My amendment would add a small extra paragraph saying,
“the fact that expenditure on a programme has been rolled over into a future year”.
That would allow the department, when looking at its budget, to say, “We haven’t spent all the money this year. We will roll it into the following year”, which means that it does not have to engage in what has been described as the “ugly rush” to spend all its money before the year end, and thus would have flexibility. I hope that the Minister will be able to answer my question and that the noble Lord, Lord Purvis, will consider that the amendment is helpful to both the aims of the Bill and the way that the Secretary of State will report to Parliament. I beg to move.
Lord Howell of Guildford (Con)
My Lords, as we are looking at page 2 of the Bill and the amendment of my noble friend Lord Astor, which seeks to add a further paragraph to the three issues listed in paragraphs (a), (b) and (c), one or more of which might lead the report to explain why the target has not been hit, may I ask a question of my noble friend Lord Purvis, or perhaps the Minister, about paragraph (c), which refers to,
“circumstances arising outside the United Kingdom”?
Would that include the views of the proposed recipient countries of overseas aid saying that they no longer want the aid? We had this situation with India recently, where India reviewed its relationship with Britain, felt that the relationship should mature and that far better outcomes for development and escaping from poverty would be achieved through other fiscal changes such as two-way investment flows, impact value investment and a whole range of new techniques, and therefore it did not want to go on receiving old-fashioned official aid because official aid, as a large part of the world has discovered—not, I fear, everybody in your Lordships’ House—is not the main instrument, or even the most effective instrument, for lifting people out of poverty, ending real suffering and accelerating economic growth. So if countries come forward and say, “We do not actually want this assistance”, would that be one of the,
“circumstances arising outside the United Kingdom”,
which might disembarrass the Secretary of State and enable him to explain why the target had not been hit?
The Parliamentary Under-Secretary of State, Department for International Development (Baroness Northover) (LD)
My Lords, I shall respond to the questions put to me. I apologise to my noble friend Lord Astor if I did not adequately answer in my letter to him all the questions that he raised. We will get back to him with further answers.
The EU came up in discussion on earlier groups of amendments of multilateral organisations generally. I expect, or at least hope, that noble Lords will be aware that when we came into government, we undertook a bilateral aid review of every programme, which included what was then taken forward as far as India was concerned, and a multilateral aid review. We pulled back from those organisations that did not score well in the multilateral aid review. I know that the party opposite was concerned, for example, that we pulled back from the ILO on the basis of that, although it is aware that we are engaged with the ILO in Bangladesh. However, many multilateral organisations came out of the aid review extremely well, and so did the EU budget.
Earlier, noble Lords referred to what my noble friend Lord Patten of Barnes—Chris Patten—said many years ago, after which he took forward the most formidable reform programme of what EU aid did. Since then, others have built upon that, which has been extremely welcome and no doubt has brought us to the situation that we are in. I hope that I can reassure noble Lords that we remain closely engaged in trying to ensure that we get value for money from that and that all is scrutinised.
Long discussions and negotiations with the Indian Government came from the bilateral review. The aid programme in India continues to 2015. It continued over a long period and then moves to technical support. It is not something which suddenly happened. If anything, countries tend to say, “Please don’t go”, rather than “Do go”. I hope that I have reassured noble Lords in that regard.
Lord Forsyth of Drumlean
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.
International Development (Official Development Assistance Target) Bill
Lord Howell of Guildford Excerpts(9 years, 9 months ago)
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Lord Butler of Brockwell (CB)
My Lords, I support the amendment, the purpose of which is to remove a fixed target—“the”—and to replace a flexible target, “a”. That is the purpose of the amendment and it seems desirable.
I contribute to this debate as a former Permanent Secretary of the Treasury in charge of public expenditure, where the noble Lords, Lord Lawson and Lord MacGregor, who have put their names to the amendment, were my bosses. However, I support the amendment not out of Treasury niggardliness but because, like other noble Lords, I believe that this country has both an economic and moral interest in promoting the growth of the developing world.
However, there are good Treasury and government reasons against hypothecation of expenditure against a rigid target. The reasons are set out in the report of the Economic Affairs Committee. However, one reason that is not in the committee’s report is that at each public expenditure review departments have to come to the Treasury to make a case for the expenditure for which they are bidding. If there is a rigid amount hypothecated in this way, it relieves departments of having to make that case for expenditure. The removal of that discipline is likely to have the result that the expenditure would not be as effective as we would all like it to be. It would be a mistake to remove that discipline from DfID’s expenditure on development aid.
This is a matter for each Government to decide. There should not be a rigid amount and, therefore, I support the amendment to substitute the second “the” with the word “a”.
Lord Howell of Guildford (Con)
My noble friend Lord Lawson made an interesting speech. It did not command the total agreement of your Lordships in every aspect but it focused on some important points. It is a small, very neat, amendment but it raises implications. I beg those who are bringing forward and supporting the Bill, with the noblest intentions, to heed some of the points that are made because it will result in a better Bill.
I also apologise for not being able to join in at Second Reading—I had other commitments—and for the fact that, although I spoke frequently on Foreign Office and Commonwealth Affairs aspects of development aid from both sides of the Dispatch Box over a period of 10 years, I have not spoken on these issues from the Back Benches. However, I have been deeply concerned with development issues over a period of 50 years, going back to the era of the Colonial Development Corporation, the original CDC, before its efforts were later wrecked, I am sorry to say; and with the founding of the first Overseas Development Institute, before we even had a department of development. I regard development as the highest priority for this country and anything which gets in its way concerns me. We ought to try to clear out the obstacles. I am proud that we have become what Sir John Major called the development hub. It is a marvellous role for this country and we should pursue it in the smartest, cleverest and most effective way we can.
It worries me that without this amendment, by making it “the” duty—the first priority, in effect—of the Secretary of State to adhere to this 0.7% target, we are distorting and damaging the development cause, which has moved into a completely new phase. I read with great care the Second Reading debate—
The Countess of Mar
I understood the noble Lord, Lord Lawson, to say that he meant to say that it was the second “the” that was being changed, not the first one. So it would still be the duty of the Secretary of State.
Lord Howell of Guildford
I appreciate what the noble Countess is saying but the point is central regardless of which “the” the noble Lord, Lord Lawson, intended to remove. This is the sensible debate we should to have.
Baroness Farrington of Ribbleton (Lab)
My Lords, I have been listening very carefully but I have yet to hear any justification for the actual amendment that is on the Marshalled List.
Lord Howell of Guildford
We are trying to have, I hope, a sensible, analytical debate in your Lordships’ House on how we can strengthen this Bill and make it more effective. I have tried to speak to the amendment and I am sorry that the noble Baroness feels that she does not want to hear what I have got to say. However, I do have some important things to say on this matter.
Lord Skelmersdale (Con)
I wonder whether the noble Baroness was listening when the Lord Speaker put the question. She put it very clearly that what we are discussing is the second “the” and not the first.
Lord Howell of Guildford
I am sorry if the noble Baroness is worried about this because she has some extremely valid and important commitments to development and aid. If it was the first “the”, it would be “a duty” or “the duty”; if it is the second “the”, it is “a target” or “the target”. We could slice this very thinly. Behind this lies the consideration that I beg the Committee to examine: that is whether, given today’s context where all the important thinking about development is that overseas official aid assistance is a less important instrument for aid, it should be “the target” or “the duty”. I believe that it is wrong to urge the Secretary of State through legislation to stick to the “the’s” rather than the “a’s”.
I say that not just because the excellent committee report by my colleagues—I did not serve on that committee—gave a whole series of very substantial reasons why one should be cautious about making it “the” target, but because of some important further reasons which are developing all the time and can be analysed by looking at the extremely learned and focused thinking going on today about how to promote development and how our United Kingdom can make its maximum effort towards promoting development in the developing world. I want to give two reasons which I hope the Committee will accept are relevant to changing from an absolute priority target; that is, from “the” to “a”. I hope that noble Lords will tolerate me giving the reasons, and indeed I will be rather sad if people are not prepared even to examine these issues.
The first is this. Most economists who have studied the issue and most of the reports that are coming out today recognise that ODA is only one component of the development effort and that ODA’s relevance to development, in today’s conditions, is declining. Other instruments that require resources are very much more important in promoting development. I mention just overseas security finance, other expenditures which may not be ODA-able such as debt relief, disease research and obviously trade promotion, a range of innovative financing and impact developments. There is also an enormous new range of impact investment that requires resources, while obviously anything that can assist with lower cost green energy is helpful. Indeed, the fall in the oil price is a huge help to developing countries in a way that ODA could not possibly compete with. These are all far more effective—
Lord Howell of Guildford
I hesitate to disagree with the noble Countess, but the Committee stage is where we should look at the details that will make a Bill better. I do not see why the noble Countess finds that so objectionable and keeps interrupting speeches. I am not sure that that is the right way in which we should proceed if we want a better Bill.
There is a school of thought called Beyond Aid, which has been looked at very closely in an excellent report in the other place on the future of UK development aid. It brings home the point that if we focus on development in this context, we have to look at other areas of ODA, which is the traditional area of budget assistance. I notice that the Japanese are planning to include aid to armed forces in their definition of ODA; I am not sure whether that is something we want to encourage at all. That is the first reason why I think that this is a good amendment and I hope that we can develop it.
The second reason derives from practical experience. For two or three years recently I was involved at the Foreign Office in dealing with what was and was not ODA, and therefore where the priorities should lie. There is no doubt in my mind that if we have a fixed percentage, it will create huge problems for aid management between the partners. My noble friend referred to the points made by the National Audit Office on that. I beg noble Lords to understand that it is not just a question of accounting methods or a difference arising from data disputes about what is or is not ODA—which are enormous—and it is not just a question of moving the goalposts, which several donor countries are interested in doing. It is a question of whether this target prevents us from prioritising the development tools that really matter. Those tools today are increasingly to be found outside ODA. I am sorry if that is a Second Reading point, but it is also a central point to this debate, and I believe that we should look at it fairly and squarely, without trying to push it aside.
We need to consider far more the spread of power to developing countries rather than just budgetary aid in cash. There are vast new networks that should be developed in order to promote development, which we are not doing. Your Lordships will not be surprised if I mention the Commonwealth network as one of them. It provides a huge flow of trusted and valued investment in a way that ODA never can. I must apologise if the following sounds like a point for Second Reading, but unfortunately DfID recently made some accidental cuts into the Commonwealth budgets, which have now been restored. I congratulate the Secretary of State for International Development on removing those cuts to the Commonwealth budgets because they have been far more helpful to development than merely dishing out cash.
I believe that this amendment will help the Bill, which otherwise could fall victim—
Lord McConnell of Glenscorrodale (Lab)
I wrote to the noble Lord when he left the Foreign Office because I had so much respect for the contribution he had made to this House. However, I find his attempt to filibuster this Bill really quite disappointing. Not only has there been a Second Reading debate where a clear majority of noble Lords spoke in favour of the Bill rather than against it, there has also been a debate on the report last year of the Economic Affairs Committee in which a clear majority of noble Lords spoke against its conclusions based on their experience and on evidence that perhaps was not heard by the committee. The noble Lord is simply filibustering this Bill, making speeches that are inappropriate, and he is losing the respect that he once had from many on this side of the Chamber.
Lord Howell of Guildford
I appreciate the contribution that the noble Lord makes, but I have not spoken against the Bill; I am speaking in favour of it. I am saying that here is a Bill full of excellent intentions but which could, if we allow it to go unamended by this kind of amendment and the amendments that we will go on to debate today, fall to the danger of being bound by the thinking of yesterday. I beg noble Lords to understand that modern thinking about development takes us away from making it the prime duty—if it is the first “the”, or the prime target, if it is the second “the”—to increase overseas development assistance or pin it to 0.7% of GNI.
Lord McConnell of Glenscorrodale
Will the noble Lord accept that the clause does not use the word “prime”, either with the first “the” or the second “the”? It does not say “prime” in the way he is quoting.
Lord Howell of Guildford
I am sorry; I am not quite sure what point the noble Lord is making. I am trying to deliver the last sentence of my contribution and I do not understand why the noble Lord feels that it is right to keep interrupting.
I am sure that your Lordships’ House is the place that can refine and improve a Bill and will not try to knock down or contain attempts to improve it, as I believe this amendment does. We have heard from the noble Lord, Lord Butler, and we have heard many wise voices from our Back Benches. We have heard from major committees in other countries, from the Dutch and German ministries and from House of Commons committees that there is a danger of too much emphasis being put on overseas development assistance as “the” target and “the” duty, which could badly distort our development priorities. Today, we need new priorities, and the Bill should reflect them and not reject them. That is why I am grateful to those noble Lords who are prepared to hear some doubts about an otherwise noble and well intentioned Bill.
Lord Anderson of Swansea (Lab)
My Lords, I want to make one observation, which alas may be deemed to be going for the man rather than the ball on the eve of a rather important rugby game. I listened to the noble Lord, Lord Lawson, proudly setting out his credentials as an advocate of aid. Had he been in his place at Second Reading, he would have heard the noble Baroness, Lady Chalker, for whom I have immense admiration, stating that, to her shame, during his time as Chancellor the proportion of our aid contribution fell to 0.28% of GNI. Perhaps that is something we should bear in mind when he sets out his credentials so proudly.
Lord Howell of Guildford
This is a sensible change proposed by my noble friend Lord Tugendhat. It would obviously put the Bill, which we want to improve and strengthen, on to a less wobbly basis. There is an enormous debate going on in the economic world and, indeed, in the international scene generally about the nature of GNI. Colleagues will recall, certainly in the last year, or less than a year ago, that the British suddenly found that their budget contribution to the EU budget jumped by the most enormous amount. That was related directly back to redefinitions of our national wealth, product and income. The ONS redefined our national GNI as including various illegal activities and grey and black market activities—and I think, although I may be corrected, on prostitution as well. It made some assessments, which vastly increased our national figure. Instantly we were charged an extra several hundred million—was it even a billion?—for the EU budget. This is dangerous ground. It would be enormously sensible for those who want to see this Bill in place and have an effect to get a better, less shaky basis for it.
There is of course the additional point that if the 0.7% figure rose as a result of GNI rising by these slightly controversial means—I do not think this point has found favour in the House but I beg your Lordships to try to look at it—it would take resources away and put them into ODA, which, as we recognise, is a decreasingly relevant part of the development driver process. That would deprive areas where we want to see development, such as the technology to reduce energy costs, which are crucifying developing countries. We want money to be spent there and on all sorts of technological improvements, which will bring development. We want money to go into defining the law on property ownership, which Hernando de Soto has said is the key consideration in enabling developing societies to develop.
These are the things for which we feel quite passionate. To see money diverted into areas that are not promoting development, even if they add to the aid budget, is not good for this country, our pride and our development power, and it is taking the wrong turning. This is a small but sensible amendment, which I hope will be accepted without demur.
Lord Cormack (Con)
My Lords, I sat through virtually the whole of the Second Reading debate, as my noble friend Lord Purvis knows. He also knows why I was not able to take part in that debate. It was a very good-humoured debate, which saw this House very much at its best. I regret that the hallmarks of our debates—courteous good humour and willingness to listen to the other point of view—have not been the defining characteristic of this morning’s debate. That is a great pity.
The fact that we can all accept a principle as being wholly desirable and good does not mean that we all have to accept that every particular is also wholly desirable and good. My noble friend Lord Tugendhat moved this amendment with precision and brevity, clarity and force. He made an extremely powerful argument. I hope it is an argument that will be recognised as such by my noble friend Lord Purvis and that he will feel that an amendment of this sort—although I sincerely hope there will be no pressing to a Division today—would not in any sense invalidate or undermine his admirable Bill, but would strengthen it in the ways that have been indicated. I hope that the rest of today’s debate can be conducted in a way that is more reflective of the good humour and good temperament of your Lordships’ House than the debate on the first amendment was.
Lord Brooke of Sutton Mandeville (Con)
My Lords, I have very few qualifications for speaking in these debates, although I had the extreme privilege, thanks to my noble friend Lord Lawson of Blaby, of serving as the British Minister on the Budget Council of the European Union for the four years when I was in the Treasury—I suspect that that is about as long as anyone has ever done that job. During that time, we had to deal with problems that were, effectively, intractable. The Budget Council is a body with which the noble Lord, Lord Cashman, will be familiar. I am delighted to say that it was this Government who found solutions that meant that we did not have a continuous repetition of the failure of the process at the end of the year in arriving at a budget, which, in the final analysis, was determined by the European Parliament. It was a rich and pleasurable responsibility to hold and we earned the respect of our confrères on the Budget Council—rather as DfID is earning respect—for our concentration on solutions rather than on argument.
The second thing that I wish to say—there is an enormous amount to read on this subject, particularly in the short space of time between Second Reading and Committee stage—relates to the extreme utility, on the subject that we are discussing, of the footnotes in small print in the NAO report. It propounds issues that the International Development Committee might wish to consider. At least 11 out of 15 such issues apply directly to this as a way of making what may also be relatively intractable problems easier to solve.
Lord Howell of Guildford
My Lords, I listened almost with amusement to the last forceful intervention of the noble Lord, Lord Cashman. He summed up in an excellent, succinct phrase exactly the content of my maiden speech in this House in 1997—namely, that economics is not a science, as many of its proponents insist, but an art, and a very ambiguous art at that, which is full of subjective views. To look back, frankly, at the development activities of the past 40 and 50 years, post the Second World War, the economists have not done a very good job. They have applied all kinds of economic rulings to the proposed triggers for development and have found that they have not worked. Of course, far more than economics is involved. There is a whole range of psychological and particularly local factors in all the countries that all of us have visited over the years—I have visited dozens of them—which are operating not to the laws of economics. I say “Well done” to the noble Lord, Lord Cashman. That is exactly the truth of the matter. We do not want to be guided too much by economists.
What we want is flexibility and room in which we can look to the future for once rather than the past and see the ways in which development can be triggered and promoted in the future. As my noble friend Lord Lawson said, the world has changed totally in the last 40 years. The developing countries are looking for new priorities and new ways of assistance. They are looking for ways in which they can graduate away from official development systems à la 20th century into new forms of support and development in the 21st century.
All sorts of distinguished reports from the other place and your Lordships’ House emphasise that. The latest report from the excellent House of Commons International Development Committee on the future—not the past—of UK development co-operation states:
“The impact of DFID’s support … depends less on the volume of financial support and more on its ability to act as a purveyor of development excellence, helping its partner countries to identify innovative solutions”.
Your Lordships’ House should be thinking about innovative solutions and not the past. The committee also states:
“As grants of aid become less appropriate in some countries, so new forms of development co-operation are necessary”.
It goes on to identify the evidence that it had gathered in the various countries that it had visited. That is the reality of the moment. New forms are required to promote development. If we glue ourselves into the old ways of thinking, we will deny ourselves the flexibility of this kind of goal, which our superb staffs in DfID, the Foreign and Commonwealth Office and other areas will seek to be guided by, and we will do a disservice to development on a massive scale.
Lord Hamilton of Epsom
I follow my noble friend Lord Howell on the remarks of the noble Lord, Lord Cashman. He is absolutely right that economists indulge themselves in a form of science that is not exactly reputable. Some noble Lords may remember the letter written to the Times by, I think, in excess of 360 economists, who said that the Thatcher economic policies were absolutely doomed to pitch this country into constant recession. That was the turning point for the economy in the United Kingdom, and things really took off from there. We are very much at home with him on that.
The noble Lord also spoke about how we should feel enormous compassion for those in great need in places in Africa and so forth. We all very much sympathise with where he comes from there, but the point has already been made in this debate that only 10% of what goes to these countries comes from development aid programmes. The rest comes from investments made in these countries. Let us face it: what is really going to make a difference in a desperately backward country such as the Democratic Republic of Congo is the fact that the Chinese are prepared to put in extensive railway and road networks in return for copper and cobalt concessions in that country. These are the things that will really make a dramatic difference in a country such as the DRC. In terms of relativity, development aid programmes are merely a pinprick compared with what is being invested in return for mineral resources.
To return to the amendment, the noble Lord, Lord Cashman, is right that this is not about economics. This is much more about accountancy. Some people will argue that accountancy is one of these other rather faulty arts, rather than a science, but I think it comes nearer to being a science than an art. What we are talking about here is how you manage money effectively. It must surely be right that you can take somewhat longer to meet a programme, rather than restricting yourself to 12 months. People who support this Bill have not really answered my noble friend Lord Forsyth’s point about 40% of the budget being spent in November and December of a year because it is bumping up against the end of the financial year. This should strike an enormous amount of disquiet in people’s minds, because it suggests to anybody that the expenditure of this money is being rushed. No control is being put in—we are just trying to meet targets to show that we spent all this money, and where the money goes is of much less concern.
I spent a certain amount of my youth in the army in Kenya. After independence, one of the famous elements of Kenyan politics was the Wabenzi, people in government who drove around in Mercedes-Benzes, many of which had been paid for of course by development aid money. One has to recognise that, in these sub-Saharan African countries, the elements of corruption are very great indeed and there is no respect for development aid programmes. People do not say, “This is being brought into my country to aid the poor, therefore I will not put my hands on it”. The fact is that those in charge manage to get hold of an awful lot of that money, which is why so many of them are driving around in Mercedes-Benzes today.
Baroness Northover
My noble friend has made his case very clear and others have, too, but we are managing the budget over a longer period in a way that it can hit those targets in those specific years. We have mechanisms to ensure that we spend our money in a strategic and long-term way. Noble Lords are very familiar with that—not least my noble friend Lord Fowler—and it does not require that kind of potential splurging at the end of the year in order to hit the target. We make annual contributions to a number of multilateral bodies and those are organised using the notes system that I have just mentioned, which allows a note to be counted as aid when issued but it is not cashed until the money has been properly spent in the fullness of time. This means that the department has the flexibility that it needs, as other government departments do, to arrange its accounting to fulfil its obligation to spend at the 0.7% target.
My noble friend Lord Tugendhat, in withdrawing the previous amendment, clearly did not feel that I had adequately answered his question about the OBR. I apologise if I did not answer adequately, and I will look very carefully at what he said and write to him if I need to clarify anything further. However, I hope that I answered his question on whether GNI is an international standard, as I went into that in some depth. Clearly, the target does not change the way that departmental budgets are reconciled with each other—that is not a challenge that we encounter. The ODA GNI figure is a national statistic and the methodology has been agreed by the Office for National Statistics. We are bound by that methodology, which is agreed and overseen by the ONS, which is the appropriate body to deal with that.
I remind noble Lords that the International Development (Reporting and Transparency) Act 2006 established a duty on the Secretary of State to lay before each House of Parliament an annual report about the UK’s development efforts and spending, including reporting on progress towards meeting the 0.7% GNI target for ODA. Therefore, there is such an annual accounting in law anyway. Maintaining DfID’s accountability for tracking and reporting on its own spending to Parliament is more appropriate, both from a governance and a practical point of view, than putting such a responsibility on the Office for Budget Responsibility. If we were to do that, this would seem to be outside the current mandate of the OBR and might require revision of the 2006 Act.
Clearly, spending needs to be fully scrutinised, as the right honourable Margaret Hodge and the honourable Peter Luff said, and my noble friend Lord Purvis has outlined the very thorough and independent way in which that happens. I thank my noble friends Lord Howell, Lord Brooke and others for their wonderful tributes to DfID on the way that it manages this. Indeed, DfID is at the forefront of how best to assist in developing countries, which will undoubtedly change, and needs to change, over time.
Although I understand the intentions behind these amendments, I urge noble Lords to reject them.
Lord Howell of Guildford
Before my noble friend sits down, one point on which it would be helpful if she could come back—possibly we could discuss this on Report—is the question of what is “ODA-able”, to use an ugly phrase. The Development Assistance Committee of the OECD is in constant debate, even now as we are debating this Bill, about the new definitions that are required of what is “ODA-able”, or acceptable within the targets, and what is not. How does that link in with the concept in this Bill of the one-year, annual discipline? How will we enable the Bill to be effective in the light of the debates on changing the rules on “ODA-ability” that are raging on in the Development Assistance Committee—and, I suppose, in Whitehall—as she very well knows?
Baroness Northover
I do not need to come back on Report, because I hope that I can answer my noble friend now. I find it immensely helpful that there is a definition of ODA. My noble friend is right that there is discussion of whether the definition needs to be updated, but the definition as drawn at the moment, which is what we answer to, is a very useful device because it makes clear that you cannot spend money on, for example, tanks or whatever someone might feel would be a useful way of spending the money. Therefore, from my perspective, it is a very useful discipline. There are certain things you can do within ODA, and it has to support the poorest and development. The noble Lord has probably seen the definition of what is excluded, as have I, and I frequently look at it. That serves as a useful discipline because, should DfID be asked to pass money to some department to do something which it feels is not appropriate, it is easy to point out that that does not fit within ODA and it would therefore mean that we would not meet the 0.7% target.
It is true that the OECD is at the moment giving consideration to whether we need to update this given the involvement, not in military offensives and so on but in what is now done internationally in terms of peacekeeping. However, that has not yet been decided. I am glad that the OECD is looking at what might be appropriate but I do not believe that any conclusion that the OECD comes to will be at variance with the basic commitment to support development in the poorest countries and of the poorest people.
Overseas Aid
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Baroness Northover
I thought that the Prime Minister was extremely clear in his support. I can also point out that we have spent £3.1 billion on flood management and protection. However, I think that the noble Lord is right and I welcome the cross-party support. This is a false choice. I received an e-mail this morning from Justin Forsyth of Save the Children. He said:
“To raid this money that literally saves millions of lives would be immoral”.
Surely he is right.
Lord Howell of Guildford (Con)
My Lords, is it possible to press the authorities which decide the ODA definitions to provide a wider definition that would allow, for instance, the expenditure by the Foreign and Commonwealth Office in support of the BBC World Service—or however it is to be supported in the future—to be included in the overall figure? Can these definitions be changed to extend in that direction?
Baroness Northover
The ODA definition, as the noble Lord probably knows, is relatively wide. To seek to change that requires international agreement, and there are risks to that. That said, we fully recognise the contribution that the BBC World Service makes.
International Development (Gender Equality) Bill
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Baroness Hodgson of Abinger (Con)
My Lords, I, too, thank my noble friend Lord McColl for having introduced the Bill. I pay tribute to him for all his work. Of course, we owe a debt of gratitude to Bill Cash, the honourable Member for Stone, who piloted this important Bill so ably through the House of Commons.
I welcome the Bill enormously because, as the right honourable Alan Duncan, the Minister of State for International Development, said, the Bill can have a lasting impact on generations of girls and women around the world. Still today, in the 21st century, there is not one country where women have the same socio- economic and political opportunities as men. Still today, too many countries have a patriarchal culture and this, together with discriminatory practices, leads to the disempowerment of women and gender inequality.
The Bill addresses gender equality in the context of providing both development assistance and humanitarian assistance, resulting from both natural disasters and the terrible effects of conflict. Development assistance addresses reducing poverty. According to GADN’s recent report, it is estimated that women account for two-thirds of the 1.4 billion people currently living in extreme poverty. They also make up 60% of the 572 million working poor in the world. In reality, the situation for women is probably even worse, as there is likely to be a significant number living in poverty within households that are officially categorised as non-poor.
Women’s poverty is, in part, caused by gender inequality. According to the UN System Task Team on the Post-2015 UN Development Agenda, this discrimination impairs progress in all other areas of development. Unequal distribution of income, lack of control over resources, lack of decision-making power, unequal distribution of household tasks, the care-giving role assigned to women and gender-based violence all contribute to compounding women’s poverty.
As we have already heard from my noble friend Lady Hussein-Ece, violence affects women in every part of the world. Seven in 10 women report that they have experienced physical and/or sexual violence at some point in their lifetime. Although 125 countries have laws that penalise domestic violence, for 603 million women today domestic violence is still not a crime in their country.
A number of reviews of the MDGs over the past five years have noted that women are less likely to benefit from progress than men in some regions. For example, they may lack the resources, time and freedom of movement to travel to access health, legal or social services due to their enforced roles within the household, or they are restricted by partners, family or society. In times of humanitarian crisis, when natural disasters such as the earthquake in Haiti occur, state institutions collapse, law and order breaks down, food and medical care are scarce and violence prevails, thus making women particularly vulnerable.
Wars today have shifted from battlefields to communities, impacting on civilians, especially women and children, who make up 75% of all those killed in modern warfare. It is not just by the enemy that women will be attacked. We all know that where a conflict starts, levels of domestic violence escalate hugely, spiralling out of control. In war, women frequently become targets of sexual violence. Raping a woman in front of her family is one of the most effective ways of disarming the men, and sometimes this is used as a weapon of mass destruction.
Although women in conflict bear a disproportionate burden of suffering, and despite UN Resolution 1325 having been passed more than 10 years ago, they are usually absent from negotiations at the peace table and from decision-making in the aftermath of war. Over the past 25 years, only one in 40 peace treaty signatories has been a woman, and only 12 out of the 585 peace accords referred to women’s needs. Thus, women may continue to suffer violence and abuse because no one is listening to them or taking account of how really to protect them. I pay tribute to the Foreign Secretary, who spoke up to insist that women in Syria were at Geneva II.
In terror, women often flee to take their families to a safer place. Of the 42 million refugees and internally displaced people today, 80% are women and children. No accurate data exist on the millions of widows and “wives of the disappeared”, who often have no means of support and may be targeted within their families and the wider community. According to Widows for Peace through Democracy, there are more than 2 million widows in Iraq; more than 50% of all women in eastern Congo are widows; and there are 2.5 million widows in Afghanistan, with 80,000 in Kabul alone, who often have to resort to begging on the streets. I echo everything that my noble friend Lady Hussein-Ece said about the situation for women in Afghanistan and how we need to support them.
The Commonwealth is the world’s greatest pressure group for gender equality, and I welcome enormously the fact that Her Majesty’s Government recognise the injustices to women today, and are trying to address them and improve lives for women around the world in a number of ways, as we have heard from my noble friend Lady Jenkin.
Lord Howell of Guildford (Con)
Perhaps I may briefly reinforce the remarks that my noble friend has just made about the Commonwealth. It is indeed one of the world’s great pressure groups for gender equality. That fact is embedded in the new Commonwealth charter—the so-called maxima carta—which this House has approved and which commits 54 nations to driving a long way forward to beat gender inequality, although of course there is a long, long way to go.
Baroness Hodgson of Abinger
The Prime Minister has said that Britain will “absolutely lead the charge” to promote equality for women around the world during 2014 because, as Phumzile Mlambo-Ngcuka, the new director of UN Women, said this week at the eighth open working session on sustainable development:
“A safe and sustainable world demands women’s rights, women’s empowerment and gender equality”.
The Bill contributes greatly to this agenda and thus is important legislation. I very much hope that noble Lords will resist tabling amendments to it, because if they do I understand that, due to time constraints, it may mean that the Bill will fall. I have great pleasure in supporting the Bill and very much hope that the House will give it its Second Reading.
Philippines: Emergency Aid
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Lord Howell of Guildford (Con)
My Lords, my noble friend mentioned the noble Baroness, Lady Amos, the former Leader of the House. Will she accept how many of us appreciate the immensely valuable work that she is doing in her post at the United Nations, particularly in this crisis? My noble friend Lady Falkner also mentioned the current Commonwealth meeting in Colombo. Is she aware, as I am sure she is, that the Chinese and the Japanese—not members of the Commonwealth, of course—are sending enormous delegations to the business forum in Colombo? Will that be an opportunity to remind them that, as aspiring world powers and key players in the international landscape, they too have a task—which I am sure they can be encouraged to perform—to bring the maximum help of their enormous economic power to the Philippines, to which they are considerably nearer than we are?
Baroness Northover
My noble friend makes some very important points. We owe a great deal to the noble Baroness, Lady Amos. She is formidable in making sure that she gets assistance from wherever she requires it, as she has sought to do in the case of Syria. I am sure that the points that he has made will be picked up.
Overseas Aid: GDP Target
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Lord Howell of Guildford
My Lords, I think we all applaud the dedication and enthusiasm of my noble friend Lord Bates, but does the Minister accept that while these great global targets may bring satisfaction to some, the actual aim is development, not merely volumes of aid, and the real drivers of development are entrepreneurship and ownership raising the prosperity of the peoples and the countries concerned and eradicating poverty? As has been set out very clearly by great experts such as Hernando de Soto, these are the things that will make development work. Will she assure us that her colleagues are fully aware of this view about how aid can lead to development rather than in some cases actually block it?
Baroness Northover
I assure my noble friend that DfID is very seized of that and is well aware of the importance of entrepreneurship and ownership. We are also, of course, aware that the stories of China and India show that trade and economic development have powered those countries.
Queen’s Speech
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Lord Howell of Guildford
My Lords, I will concentrate on two points. There has been a lot of talk about what was missing from the Queen’s Speech, mostly focusing on aspects of the European debate. However, my concern is with another word that was missing: it is “Commonwealth”. It was mentioned briefly by the Minister when she spoke but it did not appear in the Queen’s Speech, which is a great pity. Last year, we managed to get it in, but I notice that it is not there this year. The Queen is a worldwide figure, respected, with vast influence across the whole planet. She makes a speech before all the high commissioners, covering a vast area of 53 nations and encompassing a third of the human race.
This is not just sentiment. The Commonwealth network is growing rapidly, at 3.7%. It is the gateway to all the new markets, all the areas in which this country must succeed to survive. I am not saying that it is an alternative to the European Union, but the fact is that the EU is flat-lining and struggling with its unending problems over the euro, which will go on for many years; we need that to be repaired, of course. However, the truth is that all our success, all the statistics and a growing volume of evidence show that all the growth in the next 17 to 20 years will be in Asia, Latin America and, particularly, in Africa. These are the areas that the Commonwealth spreads across and to which it gives us access, along with gateways to the great markets of China, Brazil and so on.
It is a great pity that the word “Commonwealth” did not occur in Her Majesty’s Speech. It should have been there. I know that there are problems over the heads of Government meeting at Colombo, and I am very glad that my right honourable friends the Prime Minister and the Foreign and Commonwealth Secretary are going, and also that His Royal Highness Prince Charles is going. They will no doubt all speak out very clearly on the causes of human rights and liberty, as they should in Colombo because there are clearly matters to be dealt with there.
However, the links between Commonwealth Governments do not matter so much. It is the vast range of links beneath, the latticework of networks between every profession—education, science, schools at every level, universities, professions, the accountancies, the legal professions—which spread out through the Commonwealth and give this country a legacy which we have so far neglected and yet which provides us with just the access we need precisely to the markets where we have to succeed.
I mentioned that the Commonwealth is growing at 3.7%, which is good by European standards. The Commonwealth countries are not just the old countries in difficulties. It is a vast range of the fastest-growing high-tech economies; the obvious ones are of course India, Malaysia, Singapore, Australia, Canada and so on. These are leading nations with, in many cases, a higher income per head than us. On top of those is the new range of Commonwealth countries coming into the prosperity league either side of Africa, as they find through the shale gas revolution that they have fantastic raw energy resources and prospects. They are increasingly setting up their own sovereign wealth funds, from which we in this country will be borrowing. Rather than helping them, we will be borrowing from the sovereign wealth funds of the Commonwealth in order to finance our dilapidated infrastructure. Therefore, to leave the Commonwealth out of the story is a big mistake, and the word should have been there in Her Majesty’s speech. That is all I want to say about that.
I turn to the European Union issue. It makes one gasp to think of the naivety of some of my colleagues—some quite senior people—and the oversimplifications they make when they speak about the European Union as though it were a sort of canoe you could pop in and out of. My noble and good friend Lord Heseltine tells us that we will be irrelevant and marginalised if we get out, while my noble and very good friend Lord Lawson, sitting here, says the opposite—that we will be irrelevant and marginalised if we stay in. In fact, of course, both of them are gloriously wrong, and I am afraid that they are looking at a world that no longer exists.
The concern of the noble Lord, Lord Heseltine, about outside isolation is quite wrong. In fact, if we were out of the European Union, we would still not be in an independent state but in an interdependent state. We are totally interdependent and bound up closely with the concerns of almost every other country in the globe, because this is a network world with super, instant, continuous connectivity. That is what changes the whole nature of international relations. There is no question of being independent. Even the rogue states find that they have to bow to international pressures. We would be bound by a thousand treaties; we would not be independent at all but interdependent—so we would not be isolated.
Pro contra, if we stay in—and that that is the route I prefer, contrary to my noble friend—it is not true that we would be irrelevant and powerless, because the European Union is itself in total flux. It is undergoing a complete re-examination of its philosophy of integration, and the eurozone is the place where the divisions lie. People talk about Europe divided as though it were divided between the eurozone core and the countries that are somehow left out, including Britain. That is not where the division lies. The division goes straight through the middle of the eurozone. That is the slice through the middle of the apple. Half of the eurozone is made up of countries with one kind of approach and half of countries with another, and they will continue to be in trouble and to have difficulties for years to come. They have not even succeeded in getting as far as a bankers’ union. Italy has one idea on that, and Spain, Greece, Portugal, Cyprus and the other small countries all have other views. There is no combined view, whatever Mr Schäuble says in Berlin, on what a banking union should actually do, let alone a fiscal or a political union. None of these things is going to happen.
Europe needs a vast range of reforms; that will happen, and that, of course, is precisely what my right honourable friend the Prime Minister sought to set in motion with his superb speech back in January at Bloomberg, when he said that we are trying to reform, we need to reform, and that Britain must take an intellectual lead in reforming the whole European structure. That is what he said in the first line of his speech. I know that a lot of the media has said, “No, this is all about party politics; it’s all about grabbing things back for Britain. It is all very narrow”. That is not true. The whole speech was couched in terms of how Europe can be, in a sense, reunited, despite the divisions within the eurozone. That is what he was trying to do.
That is the right course. Frankly, it requires more than speeches. It requires enormous work in gaining allies all over Europe for European reform, because the present chaos throughout the Union has so many unsatisfactory features, and those allies must be worked for. It requires huge intellectual efforts to redesign the kind of united Europe we want to meet the conditions of hyperconnectivity and the cyberworld we now live in, which are quite different from those of the 20th century. That is what we have to get on with.
The other day, the IMF said that by 2017 the European Union will have shrunk to about 17% of the world’s GNP, and the eurozone will have shrunk to about 11% of the world’s GNP, compared with the Commonwealth, which will be more like 20% to 25%. Of course it is important; it is our neighbourhood and we must be good Europeans. However, we have to settle that matter and move beyond it to where our real interests lie, which is in the Commonwealth network, in the neighbourhood next door to the Commonwealth, and in the developing countries, many of which have huge new resources. That is where our real interests lie. It is a shame that the Commonwealth was not mentioned in Her Majesty’s Speech. The policy machine that puts out these speeches and creates their text needs to wake up and realise where our future and our destiny lie.