International Development (Official Development Assistance Target) Bill

Countess of Mar Excerpts

Friday 6th February 2015 Lords Chamber

[Lord Lawson of Blaby (Con)]

My Lords, I regret and apologise for the fact that I was unable to be here in the House for the Second Reading of this Liberal Democrat Private Member’s Bill. However, my regret is somewhat tempered by the fact that contributions were limited to five minutes. This is a very important subject; it is an extremely complex subject; and there is no way that justice can be done to it in five minutes. So I hope that we shall have a little bit more time today.

It is a thoroughly bad Bill. It represents the triumph of gesture politics over good government.

[The Countess of Mar (CB)]

My Lords, I hope that the noble Lord will not mind me interrupting, but this is Committee stage and, although the noble Lord did not come for the Second Reading, I hope that he is not going to make a Second Reading speech and that he will attend to the amendment in hand.

[Lord Lawson of Blaby]

I am speaking to the amendment. It is a very modest amendment: it just introduces the word “a”. The purpose of the amendment is to give the Secretary of State slightly greater flexibility which can be used in the light of changing circumstances as they evolve in the future. That is clearly desirable.

It is one of a number of amendments and I must explain to the noble Countess why it is necessary to look more broadly. A large number of amendments are down on the Marshalled List, which noble Lords will have recognised. None of them is a wrecking amendment. They are all designed to make the Bill somewhat less bad. I hope that that is a proper exercise for this Committee to be engaged in.

Noble Lords will have noticed that pretty much all the signatories to the amendments on the Marshalled List were members of the Economic Affairs Committee of this House under the excellent chairmanship of my noble friend Lord MacGregor when we produced our report in 2012 on the economic effectiveness of development aid. We produced a unanimous, all-party report based entirely on the evidence, which was overwhelming. I reassure the noble Countess that I am not going to make this speech on each of the amendments, but this is the first one and it is necessary to explain why we have put down all these different amendments to try to make the Bill slightly less bad.

The Economic Affairs Committee report had a number of findings. First, it found that the 0.7% target should not be a plank, let alone the main plank, of British aid policy. Secondly, it found that the,

“Government should therefore drop its commitment”,

to establish in law the requirement to spend 0.7% of GNI on aid. Thirdly, it found that,

“the evidence that aid makes a contribution to growth in recipient countries is inconclusive”.

But aid certainly makes a great contribution to corruption in recipient countries. This is a major problem which comes up time and again and was most recently identified in the report of the House of Commons Public Accounts Committee earlier this week.

Since this is a Liberal Democrat Bill, if the Committee will allow me, I will quote from a letter written to me by—

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[Lord Lawson of Blaby]

I am making a speech which puts the context, which is essential for all the amendments on the Marshalled List. I am sorry that noble Lords are terrified of the argument. They realise that this is an absurd Bill. They are not prepared to listen to any arguments against it. Noble Lords will want to read the report of the Economic Affairs Committee. We have ample evidence of all the corruption there is.

Let me make two things absolutely clear. First, we are not discussing humanitarian aid. My view is that it would be good for us to do more than we do at present in humanitarian aid, but 90% of the British aid programme is so-called development aid, and that is what we are debating today in this Bill. Secondly, I am not at all opposed to the great cause of alleviating poverty in the poorest countries of the world. Indeed, I have always been strongly supportive of that and was lucky enough to be in a position to do something about aid. Some noble Lords will remember the so-called Toronto terms of 1988, which were called the Toronto terms because they were finally agreed at the G7 summit in Toronto. Their aim was to give debt relief to the poorest of the poor countries.

[The Countess of Mar]

The noble Lord is not listening to the Committee. Will he please address whichever “the” or “a” it is in line 2, give us a reason to change it and then sit down?

[Lord Lawson of Blaby]

The reason for changing the Bill in this way to make it less bad is the contents of the Bill. The contents of the Bill are highly relevant. If I may quote—

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[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.

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[The Countess of Mar]

The Committee has been very patient. This is a Second Reading speech and these are arguments that should have been developed at that stage, not in Committee. May I ask the noble Lord to cut short his speech and just to attend to the amendment on the Marshalled List?

[Noble Lords]

Hear, hear!

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[Lord Forsyth of Drumlean (Con)]

My Lords, with some trepidation I rise to speak to this amendment. Perhaps I should make it absolutely clear that I am not against the Government spending 0.7%, 0.8% or 1% of gross national income on aid. I am not opposed to aid; indeed, I have raised quite a lot of money for women in India. For me, the central argument is what we are trying to do here. I hope that I can avoid the noble Countess calling me to order in speaking to this amendment.

By the way, I do not know why there is confusion about which “the” it is. The amendment says:

“Page 1, line 2, leave out first ‘the’ and insert ‘a’”.

We are talking about “a” duty of the Secretary of State rather than “the” duty.

[The Countess of Mar]

I apologise to the noble Lord, but his noble friend sitting next to him said that he got the wrong “the”.

[Lord Forsyth of Drumlean]

Very occasionally, my noble friend gets things wrong. I thought that we should speak to the amendment on the Marshalled List. If the noble Countess wishes me to speak to the other amendment, I can make the same speech because I want to focus on what duty we are placing on the Secretary of State and what is the target.

[The Countess of Mar]

The noble Lord’s noble friend—the noble Lord, Lord Skelmersdale—reminded the noble Baroness, Lady Farrington, that the Lord Speaker said the second “the” when she proposed the amendment. Would the noble Lord, Lord Forsyth, like to speak to that one?

[Lord Forsyth of Drumlean]

In which case my noble friend got it right and that is what we will discuss. If we are to talk about the target, that is what I want to address. My understanding of the Bill and its genesis—the idea was included in our manifesto as something that we would do in the first Session of this Parliament; the timetable has slipped a little—was that we wanted to enshrine in statute the UN target of 0.7%. That is what I thought we were trying to do. The UN resolution made in 1970 in respect of the target that we are apparently signing up to said:

“In recognition of the special importance of the role which can be fulfilled only by official development assistance, a major part of financial resource transfers to the developing countries should be provided in the form of official development assistance. Each economically advanced country will progressively increase its official development assistance to the developing countries and will exert its best efforts to reach a minimum net amount of 0.7 per cent of its gross national product at market prices by the middle of the Decade”.

That would have been in 1975, so we are some 40 years behind that deadline. I point out that the target was 0.7% of “gross national product”, but the Bill before us sets a target for a percentage of gross national income. That is not the same thing.

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[The Countess of Mar]

No.

[Lord Forsyth of Drumlean]

The noble Countess says no. I could go through the whole of the report strengthening the point about targets. I am picking up only headline points. For example:

“The Department added activities at short notice in 2013 which constrained choice … The activities the Department added in 2013 reduced its available budget at the start of 2014, and contributed to the delay of some of its planned activities”.

What that means is that the fact that it had been given a statutory target meant that some people in desperate need around the world had their projects cancelled because of the financial management difficulties imposed by having a target.

The NAO also found:

“The limited flexibility in the target led to the Department rescheduling payments in 2013, first to increase outturn, and then to reduce it … The Department phased its contributions to 2 key multilateral organisations to increase 2013 ODA”.

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[Lord Ramsbotham]

All I would say is that if we are talking about 0.7%, it should include every contribution made by every ministry.

[The Countess of Mar]

My Lords, before we go any further, can I just get something clear? Are we talking about “a” duty of “a” Secretary of State for “a” target, because we seem to be debating all three at the moment, or just one of those “a”s, and if so, which one? Can we have that made absolutely clear?

[The Chairman of Committees (Lord Sewel)]

My Lords, I recognise that it is unusual for the Chair to make an intervention in Committee like this, but I understand that clarification is needed. The advice that I have received is that the amendment before us should read:

“Page 1, line 2, leave out the third “the” and insert “a””.

I hope that is of help to the Committee.

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[Lord Lawson of Blaby]

My Lords, we have had an interesting debate so far. I would like to reply to some of the points that have been made, not least by my noble friend Lord Purvis, who has just sat down. First, though, I thank the noble Lord the Lord Chairman of Committees for his very helpful clarification of precisely what it is that we are debating in this amendment. The question of the amendment goes deeper, though, because what it is about—some of the later amendments are also about this—is introducing a degree of flexibility into the Bill. The reasons why that is necessary have been set out very well by the noble Lord, Lord Butler, and my noble friend Lord MacGregor.

It is quite impossible to debate this amendment without explaining why it is that, for a good Government, a degree of flexibility is necessary. The fact is that the 0.7% target is an anachronism. As my noble friend Lord Purvis mentioned, it was set in 1970, but the world has changed dramatically since then. What has changed it most is, in a word, globalisation: that is to say, the huge increase in both trade flows, which are the most important aspects for the developing world—I am strongly in favour of reducing barriers to imports from the developing world; that is what it needs and that is what we should do for it—and the huge increase in private capital flows, which my noble friend Lord Howell mentioned, and which are vital. Today, totally unlike the case in 1970, ODA is only 1/10th of the total amount of capital flows to the developing world. As the distinguished development economist Paul Collier said in evidence to us, aid is now “almost a sideshow”, although as my noble friend Lord Forsyth and others, and indeed our report, have pointed out, it has a much bigger effect on the extent of corruption in the developing world, for which the evidence is incontrovertible. One noble Lord has already mentioned the report by the House of Commons Public Accounts Committee on the so-called Private Infrastructure Development Group, which was produced this week in only the latest example.

There is a more fundamental problem about the 0.7% target, and it is development aid. I should respond to the very impassioned contribution from my noble friend Lord Fowler: this is not about humanitarian aid. As I said in my opening remarks, I believe that the case for increasing humanitarian aid is strong. This is about so-called development aid, aid for economic development, which is 90% of the DfID budget while humanitarian aid is a tiny part. Humanitarian aid needs the support of Governments; it is not exclusively for them, as charities and churches do good work in this area, but it is still a very strong responsibility of government, whereas capital flows, as my noble friend Lord Howell said, are now overwhelmingly private capital flows. The 0.7% target is therefore completely obsolete. That is no doubt why no other major country has the slightest intention of observing it. The G7, which consists of the major economies of the world—

[The Countess of Mar]

My Lords, I am afraid the noble Lord is slipping into Second Reading mode again. Would he kindly address the amendment?

[Lord Lawson of Blaby]

This is the necessary background to the amendment. I repeat what my noble friend Lord MacGregor said: it is not my intention to go over this in the course of subsequent amendments. If it is felt better to take more time in subsequent amendments—if that is the will of the House—I will do so, but that is not my intention. I think it is more coherent, a more efficient use of time and more helpful to the House if the argument is made on this, the first amendment that we are discussing today.

As I say, I know that the noble Countess obviously does not want to hear this, but I am afraid that it is a fact that in the G7 countries, the amount of aid that the other six give ranges from 0.4% in the case of France and Germany to 0.2% in the case of Italy and the United States. None of them has the slightest intention of increasing that, and certainly they have no intention of making it legally binding.