Overseas Development Aid: Budget

Lord Purvis of Tweed Excerpts

Wednesday 27th October 2021 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, I too commend the noble Baroness, Lady Ritchie, for bringing this debate to us and introducing it so powerfully. She gave a perfect testament to the consensus that existed in Parliament during the passage of that Bill, a consensus which unfortunately has been dashed. This is not the only debate in which the only Member who speaks in favour of the unlawful ODA cut will be the Minister, so a degree of consensus remains, and we will still campaign for its restoration.

Bringing the target down to 0.5%, which has no basis in law, will see a further £15 billion of cuts before its potential or possible restoration in 2025. Can the Minister confirm whether what the Chancellor said today or whether the Written Ministerial Statement from the previous Minister is the basis on which 0.7% will be restored? That Statement said that the OBR forecast in the immediate previous year would be the trigger for restoration in the following year. The impression that we got from the Chancellor today is that he is using the long-term forecast. So which is it?

If it is the long-term forecast, are we able to start planning now for what could well be an extra £5 billion in one year towards the end of this Parliament? There is no reference, of course, to the weasel word in the Written Ministerial Statement—“sustainable”—because that means that there is a get-out clause for the Government when it comes to this.

The cuts of partnership and assistance from one of the richest countries in the world to the poorest is a scarring and shaming stain on this Government. As the noble Baroness, Lady Hodgson, said, the disproportionate impact on women and girls is perhaps the most scarring. The figure of 20 million women and girls affected by this struck me. Nine million of those are girls who will not have access to clean water and sanitation. In 2018, the UNICEF and World Health Organization report said that 620 million children lacked adequate or any toilet facilities at all. I think any parent who sends their children to school will see the relevance of the impact of this when they imagine the UK cutting 9 million opportunities for children to have proper sanitation in their school life.

In the debate we had on 24 June, the noble Baroness, Lady Sugg, I and others called for a public impact assessment on this. The Deputy Leader, the noble Earl, Lord Howe, said of the gender impact assessment:

“The Foreign Secretary is considering carefully whether to put the central overarching assessment into the public domain.”—[Official Report, 24/6/21; col. GC 156.]


That was a long time ago, so can the Minister clarify whether that assessment is being made public for us to see?

We have also debated the impact of Covid on the developing world. In that debate, a number of noble Lords asked the Minister—the noble Lord, Lord Parkinson of Whitley Bay—about the Government’s intentions on the draw-down rights they have from COVAX. The UK Government have draw-down rights of 27 million doses which would then not be available for developing countries. I asked whether the Government intended to use this draw-down, which would be shameful in the current situation when so many developing countries are struggling to vaccinate their populations. The noble Lord, Lord Parkinson, said to me in the debate in September that

“I will certainly take his questions and those from other noble Lords back to the Vaccine Taskforce and will ensure that all noble Lords who have taken part in the debate get the answer to that.”—[Official Report, 9/9/21; cols. 1049-50.]

We have not had the answer to that, so will the Minister provide the answer or, if not today, ensure that we do get a response? It is not just the case that we ask questions in these debates, which is their purpose; it is that we should get answers and, at the very least, receive the courtesy of ensuring that we get the relevant answers when those questions relate to the most deprived and poorest people in the world.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

My Lords, I thank, first of all, the noble Baroness, Lady Ritchie, for introducing this important debate. We have heard many passionate and eloquently made arguments today on this subject, and I will do my best to address the many questions raised. However, we are united, I believe, on one fundamental point: the belief that the UK should dedicate 0.7% of our GNI to official development assistance. As the Prime Minister himself said in July:

“This is not an argument about principle. The only question is when we return to 0.7%.”—[Official Report, Commons, 13/7/21; col 173.]


I start by welcoming back the noble Lord, Lord Londesborough. As the House will know, he replaces the redoubtable noble Countess, Lady Mar, who has retired. How extraordinary it is that it has been 22 years since the noble Lord addressed this House last; even more so perhaps that, as he mentioned to me before this debate, he spent a mere 10 days here in this House before the exit of so many hereditary Peers in 1999—well before my time. I applaud his remarks in his—how shall I put it?—non-maiden speech, and we look forward to hearing from him a lot in the future, I am sure. I will address the question he has raised later in the debate.

Temporarily reducing the aid budget was not an easy path to take. But, as a Government, we do not have the luxury of avoiding difficult choices. In fact, the reverse is true; we face them head-on. Given the hugely difficult economic and fiscal situation, this was a decision that we were quite right to take. Coronavirus is an unprecedented crisis, and in turn it has required an unprecedented response. That is why decisions taken by this Government have provided around £400 billion of direct support to the economy this year and last year—considered one of the largest and most comprehensive packages globally. I am sure the House will acknowledge that.

Our strong recovery, combined with necessary tax rises, has strengthened our public finances. However, let me remind your Lordships that our national debt this year is set to pass £2.3 trillion or, to put it another way, 98.2% of gross domestic product—the highest level as a percentage of GDP since the early 1960s. Indeed, a sustained increase in interest rates and inflation of one percentage point would cost £22.8 billion by 2026-27.

High debt leaves us vulnerable to shocks and we need to rebuild a cushion, if you will, to safeguard the economy against future challenges. In just over a decade, the UK has faced two major economic shocks: the 2008 financial crisis and the 2020-21 pandemic. Developing fiscal buffers ensures that Governments will be able effectively to support the economy in future crises, and provides space to allow the Government to address long-term challenges.

It is fiscally responsible for us to bring debt under control and rebuild so-called fiscal space. We have already made the tough decisions needed to get debt under control through a small number of focused and progressive tax rises. As I mentioned earlier, this has meant some difficult but necessary decisions, including temporarily reducing ODA spending from 0.7% to 0.5% of GNI.

Let me address a question asked by the noble Baroness, Lady Ritchie, about our legal commitments—an area also touched on by the noble Lord, Lord Purvis. I reiterate that we are acting in line with the International Development (Official Development Assistance Target) Act 2015, which explicitly envisages that there may be circumstances where the 0.7% target is not met. The decisions we are taking and our approach to the spending review and annual reviews, based on clear fiscal tests, are all in line with that Act.

Section 2 of the 2015 Act envisages circumstances in which the 0.7% target is not met due to

“economic circumstances and, in particular, any substantial change in gross national income”

and

“fiscal circumstances and, in particular, the likely impact of meeting the target on taxation, public spending and public borrowing”.

The Act provides for accountability to Parliament in the form of a Statement in the event that the Government do not meet the 0.7% target.

I turn to the specific circumstances for the return to 0.7%; I would like to be more positive. We have always been clear in our commitment to international development, and that the UK would return, as I said earlier, to spending 0.7% of GNI when the fiscal circumstances allowed. As your Lordships will recall, earlier this year we said that this would happen when the independent Office for Budget Responsibility confirmed that, on a sustainable basis, we are not borrowing for day-to-day spending and underlying debt is falling. I remind noble Lords that the House of Commons voted in support of these fiscal tests for returning to 0.7%.

I hope to provide some reassurance to the noble Baroness, Lady Ritchie, and the noble Lord, Lord Purvis, on the return to 0.7%. Given the Government’s careful stewardship of the public finances and the strength of the recovery, as the Chancellor outlined today, the ODA fiscal tests are now forecast to be met in 2024-25, which is earlier than the OBR forecast in March. As such, the 2021 spending review provisionally sets aside additional unallocated ODA funding for 2024-25, on top of departmental ODA settlements, to the value of the difference between 0.5% and 0.7% of GNI. This delivers on the Government’s commitment, made to Parliament, to return to spending 0.7% of GNI on ODA when it can be on a sustainable basis.

Of course, the Government will continue to monitor future forecasts closely and, each year over this period, will review and confirm, in accordance with the 2015 Act, whether a return to spending 0.7% of GNI is possible against the latest fiscal forecast. Should future forecasts deteriorate, however, decisions on the provisional ODA funding for 2024-25 will be made through the annual review of the ODA budget.

[Lord Purvis of Tweed (LD)]

I am grateful to the Minister for giving way. No matter how many times Ministers assert, from the Dispatch Box, that they are acting in accordance with the legislation that I took through this House, it does not mean it is the case. Can the Minister refer to the other element of the Act which says that if, in the preceding year, the target had not been met, the statement has to indicate what measures will be taken to meet the target in the following year? That is still the law. That the Chancellor is now putting unallocated funds four years down the line is an absolute breach of the legislation.

[Viscount Younger of Leckie (Con)]

The noble Lord interprets it as he does, but I have been clear that we are acting within the law. I will write to the noble Lord with chapter and verse on why we are stating the position that we are.

As time is short, I will move on to the implications of the temporary reduction, because this was raised in particular by the noble Baroness, Lady Ritchie. I stress that we remain an open nation that is globally engaged. As the Chancellor outlined earlier today, departments have been provided with an ODA budget that rises to £12.3 billion in 2024-25, which is a 23% increase compared to the £10 billion allocated at the spending review last year.

I will address the point raised by the noble Lords, Lord Londesborough and Lord Collins, and my noble friend Lord Balfe about impact assessments. Officials considered any impacts on women and girls, the most marginalised and vulnerable, people with disabilities and people from other protected groups when developing advice to Ministers. We carried out an equalities impact assessment, which looked at our bilateral country spending. This central assessment showed no evidence that programmes targeting those with protected characteristics are more likely to be reduced or discontinued. I reassure the House that, as we move through this spending cycle, we will review the impact of projects and our spend to inform future spending decisions and policymakers.

The noble Baroness, Lady Ritchie, asked about the world’s poorest, and the right reverend Prelate the Bishop of Bristol indicated that we might be turning our backs on the poorest. We have a difficult balance to make, but I do not believe that that is what we are doing, because, by spending 0.5% of GNI, we will be spending over £10 billion this year, making us one of the largest ODA donors in the world and the second highest in the G7. We are committed to leading the global fight against poverty.

The noble Baroness, Lady Ritchie, and the right reverend Prelate also talked about vaccines, on which I have some brief comments. The spending review provides continued support for Covid and global health, in line with the UK’s ground-breaking role, providing equitable access to Covid-19 vaccines, therapeutics and diagnostics. It funds the donation of the remaining 70 million doses of Covid-19 vaccines to meet the Prime Minister’s commitment to donate 100 million doses by June 2022. These vaccines are being rolled out to countries beyond our borders on a non-profit basis.

I will answer the brief point raised by the noble Baroness, Lady Ritchie, about Sudan. The departmental ODA budget is already increasing significantly, from the £10 billion that was allocated to over £12 billion in 2024-25, but I acknowledge the point that she made about Sudan.

To answer the noble Baroness, Lady Hodgson, we are increasing funding for women and girls to help achieve the global target to get 40 million girls into school and have 20 million more girls reading by the age of 10. I will write to the noble Baroness, as there is more that I can say about this.

Time is running out and I know that I have a long letter to write, because I have not managed to address a number of questions. In winding up, I thank noble Lords for their important contributions to what is, I acknowledge, and as the noble Baroness said at the beginning of the debate, an important subject. I reiterate that the Government remain committed to international development and the return to spending 0.7% of GNI on ODA, but when the fiscal situation allows us to.