International Development (Official Development Assistance Target) Bill

Lord Lipsey Excerpts

Friday 23rd January 2015 Lords Chamber

[Lord Lipsey (Lab)]

My Lords, as the first dissident to speak in this debate, I start by saying that I agree with north of 90% of what has been said so far, particularly the moving remarks of the noble Lord, Lord Fowler, about the impact of the aid programme. I am unambiguously for aid, and I am unambiguously in favour of a highish level of public expenditure on aid; the sole question is whether we assist effective aid by setting this 0.7% target. Last time I spoke on this, I had hardly got to my feet before somebody popped up and said, “Do you not realise that 0.7% is party policy?”. I know, but in this House I do not think we should put party policy first. We put first our own assessment of what is in the interests of, in this case, not only our country but people in poorer countries whom the aid programme is designed to assist.

The House’s Economic Affairs Committee, chaired then by the noble Lord, Lord MacGregor, looked into the development aid target in its 2012 report. I must say that the noble Lord, Lord MacGregor, is profoundly upset that he is unable to be here today. He hopes to participate in later stages of the Bill. If he were here, he would outline better by far than I the arguments that persuaded the committee—every member, left, right and centre—that the 0.7% target fails the test of helping poor countries and is bad for our country. I will not go over the arguments in the report today, but simply ask that noble Lords read it. It is in the revised Library brief circulated last night.

I shall add two points that have emerged since the committee studied this subject. The first is quite general. The evidence accumulates that singling out particular items of public expenditure for special treatment has disastrous results. Modern government cannot help itself: we say that health expenditure must remain the same in real terms at least, and education; we ring-fence this, we hypothecate that—anything to please the voters, anything to please the pressure groups. This is making the management of public finances almost impossible.

I will take a salient concrete example. Health spending is protected but social care spending is not, so we have people going to hospitals in droves because services are available there while we are slashing community services, which are where those people could most economically and best be treated. The Institute for Fiscal Studies recently drew out the implications of this. Because of all the protected programmes, we are going to see cuts of 30% or 40% in the unprotected programmes. We will be looking very hard around the streets to find a policeman if the government cuts go through. This is a mad way to run public finances, and this Bill seeks to add another item to the protected pile.

Secondly, we no longer have to gaze into the crystal to see the damaging effects of the Bill; we can read the book. Last week, the authoritative National Audit Office—I know that the noble Lord, Lord Fowler, with all his experience disagrees with it—published a report on aid. It was a very judicious report and showed how the ODI, in a desperate attempt to get past 0.7%, rushed out money in the last two months of the year as if it grew on Whitehall trees. That is taxpayers’ money and much of it is going straight into the pockets of the elites in developing countries. That is the trouble you get when you have a target. People do stupid things in order to meet those targets. Margaret Hodge said that Parliament is going to have to look at this; we are going to have to look at that every year, because it is going to happen every year.

I hope that the House will not divide on the Bill today. The right course is to consider it in Committee with sensible ameliorative amendments. If we do not make such amendments, the Bill will go down in history as a piece of gesture politics whose adverse effects will be felt. Development aid in principle has my strong support, as it does the support of every Member of this House, bar only a few—but this Bill in practice will aid only those who want to discredit aid.