International Development (Official Development Assistance Target) (Amendment) Bill [HL]

Lord Lipsey Excerpts

2nd reading (Hansard): House of Lords
Friday 18th November 2016 Lords Chamber

Moved by

[Lord Lipsey]

That the Bill be now read a second time.

[Lord Lipsey (Lab)]

My Lords, this is a simple Bill that I can simply precis. In the last Parliament, legislation was passed committing Britain to spending at least 0.7% of GNI on official development assistance. Ministers are to report to Parliament if they miss this target. However, by making the target an annual one, the Government run the risk of having to rush through expenditure at the end of each financial year to meet their target. The National Audit Office has pointed out examples where precisely this may have happened. This Bill, therefore, intends to make the target one that applies over a five-year period, not one year, which would allow much greater flexibility.

Looking around the Chamber, I see very good representation of what I might call “the aid crew”—people who know a great deal more about aid than I do. My knowledge of aid is confined to a short period on the Economic Affairs Committee, during which time we wrote a report on the subject, to which I will return. However, I do claim perhaps a little knowledge of another subject, and that is how best to manage the public finances. I wrote a book, The Secret Treasury—there were not many secrets, but that is what it was called—and it was mostly about how you sensibly control public expenditure under our system. That is the main motivation behind my Bill today.

I should say straight away that it is not in any way an anti-aid Bill. You could substitute defence, education or health for aid throughout the Bill. If an annual target had been set in those areas, I would have said that that also should be changed to a five-year target—it is mere good sense.

It will be apparent to most noble Lords that this is a re-run of a debate that we had in the last Parliament. I, along with the noble Lord, Lord Forsyth, moved amendments to the Bill from the noble Lord, Lord Purvis, which would have had the effect of bringing in this five-year target. Noble Lords will have their own opinions as to who won the argument, but no amendment was made. Yes, this is a replay, but it is a replay under very different circumstances. To stretch the football analogy, we are now on a pitch that slopes the opposite way to the one on which we played last time.

Then, David Cameron was the Prime Minister in No. 10, in coalition with the Lib Dems. Mr Cameron was—how shall I put this in “lordly” language?—not known for his strong beliefs. But one belief that he did adhere to was giving a higher priority to aid. Some will think that this was for high moral reasons and others that it was to appease liberal voters so that they would not go back to thinking that the Conservative Party was the nasty party. As is often the case with politicians, I should think it was a bit of both. However, he was adamantly in favour of spending on aid. Today, Theresa May is the Prime Minister. It may be my failing, but I cannot find in her reported words any reference whatsoever to aid. But sometimes actions speak louder than words, and her appointment to DfID of Priti Patel, who has previous as a critic of aid, perhaps says more about where this Prime Minister stands than any words she might have uttered.

The Lib Dems, and I pay tribute to them, supported the Bill, partly for moral reasons and partly no doubt to show their supporters that they were having some influence on the Tory Government. However, that argument was dissolved with the election and the Lib Dems reduced to a rump in the Commons, although it is delightful to see them in such hefty numbers here. There is a new Prime Minister, a new Government and a new Commons with a new mandate. If this Bill has its way, there will be a new, less harmful way of putting in place the 0.7% target for aid.

The Economic Affairs Committee that reported in March 2012 was chaired by the noble Lord, Lord MacGregor, and included two ex-Chancellors and a bevy of heavy hitters, not including me. We were against having targets. The arguments that persuaded us are set out clearly in paragraph 15 of the summary and conclusions of that report, and I will save the House’s time by not reading them out now. I do not really want to go over water that has flowed under the bridge. We have a target of 0.7% a year and it would be way beyond a modest Private Member’s Bill to get rid of that. My Bill would simply change a series of one-year targets to a five-year target, again, of 0.7%. Incidentally, there has been some speculation because the Bill sometimes changes a single calendar year to multiple years. That was a mistake in my drafting. It could easily be amended on Report so that it referred only to calendar years.

This change will be relevant quite soon. Over the past couple of years, Britain has been meeting the Purvis target. However, under the new methodology for calculating gross national income about to be introduced, we would have fallen short. The excellent briefing prepared by our Library suggests that over the last few years we have not been spending what we should have been spending. We do not yet know what the outcome will be for 2016, but with a further shortfall looming, we can guess at the temptation of DfID to shove the money out of the door as fast as possible to meet the target. However, I am not confident that all that money will be well used and my confidence has been further eroded by the Government’s shifting of money from the DfID budget to the Foreign Office budget to make it look as though they are making their target whereas in fact aid money is being used for wholly different purposes.

But it is not my judgment that matters, but the judgment of more objective and more informed observers. Therefore, we have very seriously to consider the report, which was available even last time we debated this subject, from the National Audit Office. It said—not I said—that, when it was unlikely that the ODA target would be met, DfID increased its spending and quickly added activities to its plans, which made it,

“difficult to achieve value for money”.

Achieving value for money is the sole aim of my Bill. The report cited the way that the department had brought forward £300 million of activity planned for 2015 to 2014 to meet the target and then the department asked the Treasury for extra cash to meet the target in the following year. That is the kind of inflation that occurs.

“Never mind”, the defenders of the 0.7% aid target might say, “as this will mean more money for aid, which is what we want”. That is a judgment. My judgment is different. This kind of fiddling the figures is bad for aid and bad for the level of aid. The British public are not, for better or worse, supporters of aid spending. A poll in 2015 showed that 67% of the public made aid their number one target for public expenditure cuts—way out at the top of the list of potential public expenditure cuts. The British public, rightly or wrongly—and, in my view, sadly—are not aid fans.

I am sure that a great deal of shaping the opinion of the public is reflective of a kind of reporting in the press. I do not mean reporting in any pejorative sense because there was an excellent series last year by Dominic Kennedy, the investigations editor at the Times. It revealed examples of where we were using aid to prop up corrupt police forces or for cultural projects of one kind or another. That is not the kind of thing that aid fans like me want to see—projects that alleviate poverty on the ground. The new development secretary has inveighed eloquently about the abuse of multilateral aid programmes, but before she goes on too long about that she would be well advised to get the beam out of her own eye.

Aid will never be a vote winner, but if we continue with a set of rules that make waste all but inevitable, we may face a backlash from taxpayers that renders the whole programme vulnerable. Anyone who thinks that that is fantasy should look at what happened in Ireland. In Ireland they legislated for precisely this target. The Irish people got crosser and crosser and step by step they backed away from it so that they do not have such a target today.

Let me be clear with the House one final time. I am a passionate supporter of development aid. I know that there are great projects going ahead with Britain’s support. By most standards, I would call DfID a competent department. I am proud of that and I am even willing to pay my share of taxes to support that. But I am not happy to pay those taxes—and here I exaggerate to make my point—to go down various toilets of DfID’s devising as the Government try desperately to fulfil the daft mandate given to them by Parliament. I do not actually favour a five-year target, but I prefer it to the one-year aid target that the last Parliament, mistakenly in my view, legislated for. I beg to move.

--- Later in debate ---

[Lord Lipsey]

My Lords, I thank the Minister for that reply. I should correct one misunderstanding, which is probably my fault. I did not mean to say that Cameron was doing this for wicked motives; in fact, I said that he might be doing it for high moral motives. However, my more than 40 years in politics, including working for a Prime Minister and a Foreign Secretary, have persuaded me that it is not a good idea to think that you can tell exactly what motive lies behind politicians’ utterances. They nearly always have mixed motives, and we should consider their pronouncements on their merits rather than think that they are doing something for this or that reason. On that basis I do not think that I would make a very good popular journalist, but that is my view.

I also thank all those who have spoken in this debate and, because this has been a remarkably full House for a Friday morning, all those noble Lords who have sat through the speeches, listening carefully and grappling with a real, if limited, issue. I will not use the phrase “House of Lords at its best” because that comes out three or four times a day, but I think we have a good claim to that this morning.

At the same time, there were moments when I felt that we were ships passing in the night and that, in particular, some noble Lords felt that in some way I was up to something, which I was not. I heard the phrase “slippery slope”, and the noble Lord, Lord Bruce, referred to a “Trojan horse”. My noble friend on the Front Bench spoke of the “thin end of the wedge”. I shall therefore use a cliché of my own: “give them an inch and they’ll take a mile”. I may be wrong about this but I believe that, if the Bill were to become law, the aid programme would be more soundly planned, more soundly based and more likely to survive the vicissitudes of public debate. So whether it turns out to be a Trojan horse or a galloping thoroughbred that carries us through to an even better system of aid in the future, only time will tell—but I do refute the proposition that I am in any way aiming to cut the level of aid.

The other thing that strikes me very much is how we would benefit from a Committee stage, where we could narrow things down a bit more. Some very intelligent suggestions were made for better ways of achieving the same objectives that I have. The noble Lord, Lord Blencathra, suggested 5% flexibility either way, and the noble Viscount, Lord Eccles, had some very good ideas on this, too. With a further stage of the Bill we might be able to progress the debate until we reached a consensus on both sides, provided that the bottom line is observed, which is that whatever emerges does not result in a penny less than 0.7% of GNI being spent on aid—not a penny, because I would not countenance that.

Bill read a second time and committed to a Committee of the Whole House.

International Development (Official Development Assistance Target) Bill

Lord Lipsey Excerpts

Friday 27th February 2015 Lords Chamber

Moved by

[Lord Lipsey]

2: Clause 1, page 1, line 5, leave out from “Kingdom” to end of line and insert “over the period 2015/16 to 2019/20 and each subsequent five year period”

[Lord Lipsey (Lab)]

My Lords, I very much regret that I was not able to be here to move this amendment in Committee, but I am delighted to say that the noble Lord, Lord Forsyth—as I would have expected—did that job much better than I could have done. I certainly do not intend to detain the House for longer than I need, as it would be a better use of its time to read his magnificent speech.

The amendment is designed to increase the flexibility of the one-year programme so as to avert the danger that the money will be rushed out to hit the target in one year and that there will not be enough to hit the target so easily the year after. It is intended to avoid waste, to provide ministerial flexibility and to help in the management of our national budgets.

As I said, I do not intend to expand on that theme for long but I want to deal with one argument which was put very powerfully this morning by my noble friend Lord McConnell and which appeared very much in the debate at Second Reading. The argument is that the Bill will set the quantity of aid, enabling us then to focus on the quality. I will not address the second half of that—the quality, which comes up in other amendments. I just caution the House against thinking that the Bill will in practice set the quantity, and I do so by reference to Ireland. A report states that at the millennium summit in 2000, the Taoiseach announced a framework for reaching the UN target. It was to be attained by the end of 2007. In 2005, the target was adjusted to 2012. According to a subsequent OECD peer review, that deadline was extended again to 2015, but this has also been missed. Now, according to that authoritative source, the 2015 target is also going to be missed.

In other words, you can set these targets, and you can even enshrine them, as the Bill does, in legislation. You can insist that each year the Secretary of State gives an explanation to the House if the target has not been met; nevertheless, the targets do not easily hold, and if economic imperatives dictate otherwise then we will find that they do not hold. I would be pretty willing to have a fair bet with anyone in this House that within the next 10 years there will be one or more such occasions when they do not hold. The debate over quantity will inevitably persist while there is pressure on public expenditure and there are competing programmes.

I am realistic enough to know that this amendment is unlikely to be accepted today. However, it would be comforting and would help to bring the House together if the Minister could indicate that the Government are not without sympathy on the point about flexibility. It would help if they could indicate that, within the terms of the legislation, they will be prepared to look at this flexibly and will not allow something stupid such as a last-minute rushing out of the money through the door—as I am afraid happened last year, according to the independent National Audit Office reports—and that they will manage the Bill so as to minimise any possible ill side-effects from what is generally agreed to be a desirable thing; namely, effective overseas aid.

[Lord Lamont of Lerwick]

My Lords, I support the amendments in this group, which give effect to the target being achieved over a five-year rather than an annual period. I do so because I believe that that would give much needed flexibility in meeting the target. If there were flexibility, that would lessen what some of us perceive as the perverse incentive of the target—rushing projects towards the end of a year in order to meet the target within a year. It is much more likely that the money will be more effectively spent if that happens over a period of years.

The noble Lord, Lord McConnell, has already rather anticipated these arguments. He said that—this was his reason for voting as he did on the previous amendment —he felt that the target of 0.7% of GDP gave greater certainty. That was, to some extent, supported by the arguments of my noble friend the Minister. However, I am deeply puzzled by the argument that having a target of 0.7% creates certainty or will give greater confidence about how the money will be spent. Meeting the target of GNI or GDP will not be that easy. It would be easy if we were certain what GNI and GDP were going to be. However, as everybody knows, economic data are subject to constant revisions. There is uncertainty about the future during the year when you are trying to determine what your target is a percentage of and you have to rely on economic forecasts. However, there is not just uncertainty about the future; there is uncertainty about the present and—dare I say it?—about the past. These statistics are constantly being revised. Noble Lords will recall our famous double-dip recession—there was great excitement on that side of the House that it was occurring. A few months later it had been revised out of existence by the statisticians.

--- Later in debate ---

[Lord Purvis of Tweed]

I was going to come back and clear up that point. However, I will finish this element first. The Bill provides for the very form of independent evaluation that can take into consideration external factors that may have been at play if the target has not been met. That independent evaluation then reports to Parliament.

I am glad that the noble Viscount intervened because he pre-empted exactly how I was going to conclude. Ultimately, the framework provided by the Bill allows for Parliament to have the powers to do its job and hold the Government to account when they make a promise. I hope that that would be sufficient not only for those people in the Black Bull but for Parliament. There is important evaluation and monitoring of these programmes. I hope that the explanation from the Permanent Secretary of DfID showing the deficiency of moving to the programme that the noble Lord, Lord Lipsey, has argued for is sufficient for the noble Lord to withdraw the amendment. I am not in a position to accept it.

[Lord Lipsey]

My Lords, I thank all noble Lords who participated in this debate. I am sure that the political history of the Brooke family will be required reading whenever experts assemble to discuss aid issues for many years to come.

This debate has established one thing, which is that there is no UN resolution requiring annual aid targets, and the fact that it happened to be mentioned in the Pearson report seems to me a very feeble response to that point. However, there is a second issue, which goes to the Minister’s reply, too. Yes, we have to report annually, but “report” is not the same as “attain”. Nearly all the reports coming to the OECD are from countries which have had to say that they have not attained the target. The target will, this year at least, be attained by the United Kingdom, but nearly every other country has failed to attain it. A reporting requirement should not be confused with a requirement to spend the money.

There is more business to get through. I will have to draw what comfort I can from the Minister’s favourable references to flexibility, for which I thank her. With that, we should leave this issue until the repeal Bill for this Bill is introduced, which I confidently predict it will be within the next few years. I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

--- Later in debate ---

[Baroness Northover]

My Lords, the amendment of the noble Lord, Lord Butler, seeks to put in place a further hurdle before this legislation can come into force. I am afraid that we cannot support his amendment. It would take the commencement of the Bill out of the hands of this Parliament—he has made that clear, even though this Parliament has extensively debated and supported the Bill—and into the hands of Ministers in a future Government. In particular, if this amendment were carried, it would give power to a future Government to decide when to lay the necessary secondary legislation for consideration by Parliament.

This Bill has significant cross-party consensus and support. That has been evident during debate in both Houses and in the votes this morning in this House. The importance of the UK meeting its commitment to invest 0.7% of GNI and enshrining that commitment in law was in the manifestos of all the major parties which fought the 2010 election. None of the major parties has indicated that it would move away from that after the next election.

It would be entirely within the power of future Parliaments to bring forward legislation that sets out an alternative position towards the aid budget. However, this Parliament, in both Houses, has debated the Bill, supported it in the majority of votes at each stage so far, and will, I hope, ensure that the Bill passes through to Royal Assent. As noble Lords will know, to have the very act of commencement require an affirmative resolution is extremely unusual. I was going to ask my noble friend Lady Thomas whether she could think of any instances. This amendment is not in keeping with the Bill. I call on the noble Lord to withdraw it and—

[Lord Lipsey]

My Lords, I am slightly surprised by the “extremely unusual”. The House will recall that at the end of the Brown Government both Houses passed a Bill to make care of elderly people in their own homes free. Following discussion between both Houses, it was agreed that, given that the Bill was passed on the eve of the general election, it should require a resolution before it was put into effect. In normal circumstances, that sort of process would not make much sense because it would be the same Government. However, this would be a different Government. Last time this occurred, quite sensibly the Government of the day agreed to it.

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.

EAC Report: Development Aid

Lord Lipsey Excerpts

Monday 22nd October 2012 Lords Chamber

[Lord Lipsey]

My Lords, in view of the Whips’ guidance earlier, I will reduce my blog-length contribution to a tweet—which means that I will not be able to say all I would like to say about the committee chairmanship of the noble Lord, Lord MacGregor.

On the afternoon that we published the report, I was walking through the Lobby when a colleague and good friend came up, eyes blazing, and said: “David, you have signed the report condemning the 0.7% target. Do you not realise that it is party policy?”. I was not a very good target for that particular argument. I have spent more hours of my life than I care to recollect sitting in the kind of committees that create party policies—with a few eager but ignorant young researchers, the representatives of a pressure group or two, and the statutory mad professor. Quite often, what they come out with is stark, staring bonkers.

It would be quite wrong to argue that the 0.7% is stark raving bonkers. However, before we get too high-minded, we should remember how it came to be party policy. In 2005 in the Labour Party, we were rightly worried that Tony Blair’s Iraq policy was costing us the internationalist vote, to which we felt we were naturally entitled. The 0.7% commitment was partly in answer to that. When producing the 2010 Tory manifesto, David Cameron made it clear that the Tories were seen by some as the “nasty party”, and the 0.7% commitment was his answer to that. That is politics; I have been in it long enough to understand it. However, we should not elevate something that came about at least partly as a matter of politics into a great principle; we should look at the merits of the target, not at the fact that it is party policy or at the way in which it became party policy.

I will not go over all the arguments in the committee’s report; they are rather conclusive. I will emphasise just one point. To achieve this target, spending on aid will have to increase from £8.4 billion in 2010 to £12 billion in 2013—an increase of nearly 50% in three years. We know what happens when you increase public expenditure programmes very rapidly. We saw it with the health service. I strongly supported what the Labour Government did in greatly expanding spending on the health service—but now the evidence is in and it shows that what the increased spending greatly increased were the salaries of doctors and what it somewhat decreased was the productivity of the National Health Service.

If we were to abide by the 0.7% target, precisely the same thing would happen. Our aid programme—which, contrary to the view of the noble Lord, Lord Lawson, I believe to be a great force for good—would contain more corruption and more “get the money out of the door somehow and never mind what it is spent on”, and would do less for growth. It would supply opponents of aid with ammunition that they could scarcely dream of. What will the Daily Mail do when it gets into how that money is spent?

If I supported the view of aid of the noble Lord, Lord Lawson, which I do not, and if I were Machiavellian—and neither of us are—I would say that we should go to the 0.7%, because it would so discredit aid that no Government would dare to spend poor taxpayers’ money on that scale again. What is needed with aid is a gradual, well directed and well controlled increase at a speed that the countries and the projects receiving the aid can absorb. It can then be demonstrated that it has done good to those countries and the poor people in them. It is because I fear for the effects of this unrealistic target on aid and I fear even more for its effects on the likely public perception and attitude to aid that I believe it is mistaken.