International Development (Official Development Assistance Target) Bill Debate
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David Nuttall
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International Development (Official Development Assistance Target) Bill
David Nuttall Excerpts(9 years, 11 months ago)
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Mr David Nuttall (Bury North) (Con)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
New clause 2—Reduction of Cabinet members’ salaries if 0.7% target not met—
“If an annual report laid before Parliament in 2016 or any subsequent calendar year shows that the 0.7% target has not been met in the report year, salaries provided for under Section 1 and Part 1 of Schedule 1 to the Ministerial and Other Salaries Act 1975 shall each be reduced by £1000 in the following financial year.”
New clause 3—Annual reporting: relevant period—
“(1) The International Development (Reporting and Transparency) Act 2006 shall be amended by leaving out section 1(2) and inserting—
“(2) In this Act, “relevant period” means a period of 12 months ending with 31 March in the case of information which is normally produced by reference to financial years.”’
New clause 4—Independent International Development Office—
“(1) There shall be established an independent body known as the Independent International Development Office (referred to in this Act as “the IIDO”).
(2) The Schedule [The Independent International Development Office] makes provision about the IIDO.”
New clause 5—Calculation of ODA for the purposes of section 1—
“An amount equivalent to the following annual payments, or estimates thereof, shall be included in the calculation of annual UK ODA for the purposes of section 1—
(a) the amount payable by the United Kingdom to the European Union.
(b) Welfare benefits paid to foreign nationals.
(c) Welfare benefits paid to UK nationals living abroad.
(d) The administrative costs of the Department for International Development and its agencies and associated public bodies.”
New clause 6—Calculation of Gross National Income for the purposes of section 1—
“Adjustments to the figure provided to Parliament as the UK’s gross national income as at the end of the financial year shall not change or invalidate the UK’s performance against the target under section 1.”
New clause 7—Applicability and expiry of the provisions of this Act—
“(1) This Act shall come into force on such a day appointed by the Secretary of State by an order contained in a statutory instrument.
(2) An order under subsection (1) shall not be made unless a referendum has taken place in the United Kingdom and more than 50% of those casting a vote do so in favour of meeting the target.
(3) This Act shall only have effect in those years where the United Kingdom records a budget surplus.
(4) The Secretary of State may vary the target mentioned in section 1 by an order contained in a statutory instrument in response to the UK leaving or joining a multilateral organisation which itself disburses ODA.
(5) This Act shall expire on the anniversary of its coming into force in the fifth year of its being so in force.”
Amendment 16, in clause 1, page 1, line 4, leave out “gross national income” and insert
“final gross national income of the preceding year.”
Amendment 20, page 1, line , leave out “met” and insert “progressed toward”.
Amendment 18, page 1, line 5, leave out “calendar” and insert “financial”.
Amendment 5, page 1, line 5, at end insert
“when the central government net cash requirement is in surplus.”
Amendment 21, page 1, line 6, leave out “the 0.7% and insert “a 0.35%”.
Amendment 6, page 1, line 7, leave out from “by” to end of line 9 and insert
“the Office for Budget Responsibility.”
Amendment 19, page 1, line 13, at end insert
““financial year”, for the purposes of this Act, includes a period which begins with the day on which this Act comes into force and ends on the following 31 March.”
Amendment 22, in clause 2, page 1, line 16, leave out “the 0.7% and insert “a 0.35%”.
Amendment 7, page 1, line 17, leave out
“as soon as reasonably practicable”
and insert
“, no more than 10 days during which both Houses of Parliament are sitting,”.
Amendment 8, page 1, line 18, leave out from “statement” to end of line 19.
Amendment 23, page 2, line 2, leave out “the 0.7% and insert “a 0.35%”.
Amendment 24, page 2, line 5, leave out “the 0.7% and insert “a 0.35%”.
Amendment 9, page 2, line 7, leave out from “State,” to end of line 8 and insert
“need take no action on the basis of such a revision.”
Amendment 10, page 2, line 8, leave out from “statement” to end of line 9.
Amendment 11, page 2, line 10, leave out subsections (3) and (4).
Amendment 25, page 2, line 10, leave out “the 0.7% and insert “a 0.35%”.
Amendment 26, page 2, line 19, leave out “the 0.7% and insert “a 0.35%”.
Amendment 1, page 2, line 25, leave out clause 3.
Amendment 15, page 2, line 36, leave out clause 5.
Amendment 2, in clause 5, page 2, line 39, at end insert
“and is relevant, sustainable and capable of having a measurable impact.”
Amendment 37, in clause 6, page 3, line 4, leave out subsection (2).
Amendment 3, page 3, line 4, leave out “1 June 2015” and insert “1 January 2016”
New schedule 1—The Independent Commission For Aid Impact—
“Accountability and Reporting
1 (1) It will be the responsibility of the Secretary of State for International Developent to lay responses to reports of the ICAI before Parliament.
(2) The ICAI shall carry out all other duties as established.
Finance
2 (1) The budget of the ICAI for the purpose of section ( ) will be agreed by the Secretary of State for International Development.
(2) The Department for International Development may make to the ICAI such payments out of money provided by Parliament as the Department for International Development considers appropriate for the purposes of enabling the ICAI to meet its expenses arising under this Act.
(3) Payment are to be made at such times, and subject to any such conditions, as the Department for International Development considers appropriate.”
New schedule 2—The independent International Development Office—
“Membership—
1 The IIDO is to consist of a member to chair it and six other members, appointed by the Secretary of State for International Development following apre-appointment hearing by, and with the consent of, the International Development Committee of the House of Commons.
Employees
2 (1) The IIDO may employ staff.
(2) Staff are to be employed on such terms as to remuneration and other matters as the IIDO may, with the approval of the Minister for the Civil Service, determine.
(3) Service as a member of staff of the IIDO is employment in the civil service of the State.
(4) The IIDO must pay to the Minister for the Civil Service, at such times as the Minister may direct, such sums as the Minister may determine in respect of the increase in the sums payable out of money provided by Parliament that is attributable to the provision of pensions, allowances or gratuities under section 1 of the Superannuation Act 1972 payable to or in respect of persons who are or have been members of staff of the IIDO.
Duties
3 (1) The IIDO will have the responsibility to carry out independent evaluation of the relevance, impact, value-for-money and sustainability of ODA.
(2) The IIDO will develop systems to verify the extent to which ODA is spent efficiently and effectively.
Annual report
4 (1) The IIDO must prepare a report of the performance of its functions in each financial year.
(2) The report relating to a financial year must be prepared as soon as possible after the end of the financial year.
(3) The report must be sent to the Department for International Development.
(4) The Department for International Development must lay the report before Parliament.
(5) “Financial year” means—
(a) the period which begins with the day on which this Schedule comes into force and ends with the following 31 March;
(b) each successive period of 12 months.
Accountability and Reporting
5 (1) It will be the responsibility of the Secretary of State for International Development to lay responses to reports of the IIDO before Parliament.
(2) The International Development Committee of the House of Commons may provide parliamentary oversight of the work of the IIDO and report annually on its current and future work programme.
Finance
6 (1) The budget of the IIDO will be agreed by the Secretary of State for International Development.
(2) The Department for International Development may make to the IIDO such payments out of money provided by Parliament as the Department for International Development considers appropriate for the purpose of enabling the IIDO to meet its expenses.
(3) Payments are to be made at such times, and subject to any such conditions, as the Department for International Development considers appropriate.
Accounts and audit
7 (1) The IIDO must—
(a) keep proper accounts and proper records in relation to its accounts, and
(b) pre pare in respect of each financial year a statement of accounts.
(2) Each statement of accounts must comply with any directions given by the International Development Committee as to—
(a) the information to be contained in it and the manner in which it is to be presented,
(b) t he methods and principles according to which the statement is to be prepared, and
(c) the additional information (if any) which is to be provided to Parliament.
(3) The IIDO must send a copy of each statement of accounts to—
(a) the Secretary of State for International Development, and
(b) the Comptroller and Auditor General, before the end of the month of June next following the financial year to which the statement relates.
(4) The Comptroller and Auditor General must—
(a) examine, certify and report on each statement of accounts, and
(b) send a copy of each report and certified statement to the Secretary of State for International Development.
(5) The Secretary of State for International Development must lay before Parliament a copy of each such report and certified statement.
(6) “Financial year” has the same meaning as in paragraph 4(5).
(7) The IIDO must keep under review whether its internal financial controls secure the proper conduct of its financial affairs.
References to International Development Committee
8 (1) Any reference in this Schedule to the International Development Committee of the House of Commons—
(a) (a) if the name of that Committee is changed, is to be treated as a reference to that Committee by its new name, and
(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, is to be treated as a reference to the Committee by which those functions are exercisable.
(2) Any question arising under sub-paragraph (1) is to be determined by the Speaker of the House of Commons.”
Amendment (a), to new schedule 2, line 3, leave out “six” and insert “four”.
Amendment (b), line 4, leave out “for International Development”.
Amendment (c), line 5, leave out from “of,” to end of line 6 and insert
“a committee in the House of Commons and an equivalent committee in the House of Lords”.
Amendment (d), line 6 after “Commons” insert
“and equivalent committee in the House of Lords”.
Amendment (e), line 12 leave out sub-paragraph (3).
Amendment (f), line 19 at end insert—
“2A All costs associated with the IIDO shall count towards the target set out in section 1 of this Act.”
Amendment (g), line 38 leave out “for International Development”.
Amendment (h), line 72 leave out “for International Development”.
Amendment (i), line 78 leave out paragraph 8.
Mr Nuttall
As the House will have seen on the amendment paper this morning, there are seven new clauses, two new schedules and several amendments. I propose to divide the amendments into several sub-groups, although others may choose to deal with them in a different way. For the sake of clarity, it might be helpful if I draw together a number of different threads. I will start with new clause 1 and new schedule 1.
Sir Peter Bottomley (Worthing West) (Con)
For context, and for those who read our debates, perhaps we should remind ourselves that we are talking about whether, from every £100 of our wealth, we should give 70p each year to those who will use it well. It is important for people to know that some Conservatives—probably most—want the Bill to go through and some oppose it, and some of these discussions help to delay the passage of the Bill.
Mr Nuttall
I do not want to be drawn immediately off target. We are considering some rather detailed provisions this morning. I accept that there are different views. There are many on the Government Benches who think it would be a good thing to use some of our public money—moneys that we have taken from the taxpayer—to pay for international aid. To a large extent, I go along with that, but what the Bill does is entirely different. It tries to enshrine in statute one particular area of Government spending, which no other areas of Government spending enjoy. It could be argued that it is better for a Government to spend whatever they want, be it 0.7% or 0.8%, of their own free will, rather than being obliged by statute to do so. There is another point. There may be those who, once they see that the 0.7% target has been enshrined in statute, think the job is done.
The people of this country have a long and proud history of giving generously to charity, and long may that continue, but is not there a danger that some—although not all—might think that, because 0.7% is enshrined in statute, the Government are doing that job for them? I for one do not wish to go down that road. I would like people to feel that it is also their responsibility, as an act of charity, to contribute to international aid.
Mr Chope
Is not the problem with the Bill highlighted by the autumn statement? GDP is forecast to increase by more than 3%, which means more than £400 million extra will have to be spent on overseas aid next year in order to meet the target. At the same time, the Chancellor is saying that we are still in the age of austerity.
Mr Nuttall
My hon. Friend makes a good point. Several newspapers have today reported that that would indeed be the effect of an after-the-event revision in gross national income. Some of the amendments that we will consider today attempt to deal with that problem.
Philip Davies (Shipley) (Con)
Is it not worse than that, though? Given what the Chancellor said in the autumn statement, and given the OBR’s projections, Government spending as a proportion of GDP will have to come down. As the OBR has highlighted, even health spending will have to come down as a proportion of GDP. If the Bill goes through unamended, the percentage of Government spending that goes on overseas aid would have to keep rising, rather than remaining constant. Our amendments are designed to deal with that anomaly.
Mr Nuttall
My hon. Friend is absolutely right. That is one of the reasons why we are attempting to change the definitions in the Bill.
As I mentioned, there are several new clauses, two new schedules and 22 amendments. I propose to speak first to new clause 1 and new schedule 1 and then to contrast them with new clause 4 and new schedule 2, together with several amendments thereto that have been tabled by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). I will then deal with the proposed changes to the definitions in the Bill and one or two stand-alone amendments that do not fit into the other categories. I will deal with the accounting period at the same time. I will then speak to a series of amendments that would reduce the figure from 0.7% to 0.35% and explain how that proposal arose.
Philip Davies
My hon. Friend mentioned our hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). Perhaps I should point out that he has been detained as one of his children is performing in a Christmas event at school, but he will be dashing here as soon as he can to speak to his amendments. I thought that I ought to put that on the record.
Mr Nuttall
I am extremely grateful for that intervention, because I was looking towards where our hon. Friend normally sits in the Chamber and was somewhat concerned by his lack of presence. I am relieved that he will be able to deal with amendments 8, 9, 10, 11 and 37, which stand in his name. I will touch on those briefly at the end of my remarks. Before that, I will deal with the definitions of the accounting period, the 0.35% proposal, the issue of enforcement, which is dealt with in new clause 2, and amendments 1, 2 and 3, tabled by my hon. Friend the Member for Christchurch (Mr Chope).
Concerns were raised on Second Reading about the original Bill’s provision for a new body that was to be known as the independent international development office. That had been provided for in clause 5. Although the clause was relatively short, the related detail in the schedule to the Bill was extensive. Subsection (1) simply stated that there should be established an independent body, known as the independent international development office—I shall refer to it from now on as the IIDO—and subsection (2) provided that the schedule should make provision for it. The schedule provided a lot of details about the membership of the IIDO, including who its employees were going to be, its duties, its annual report, its accountability and reporting requirements, its financial arrangements, and its internal financial accounting and audit requirements. It was a comprehensive statement of what was to be required of the new body.
Philip Davies
My hon. Friend is making a powerful case for new clause 1. Given that the proponents of the Bill say that the proposals in new clause 4 received overwhelming support when they formed part of the Bill on Second Reading, does he not think that those people should have the opportunity to vote for the Bill that they voted for on Second Reading rather than for a Bill that a few individuals decided to change in Committee? Is new clause 4 not, therefore, helpful because it would allow people to vote for the Bill that they thought they were voting for the first time around?
Mr Nuttall
I certainly hope that the House will have the opportunity to choose between the options that are available. The will of the House may well be for a new body to be established, but I have concerns about that. A new quango will need staffing; it will need to find new premises, probably at great expense—perhaps in London, or perhaps in another part of the country; it will need to set up a new website; and it will need to set up its own accounting functions. It will need to start from scratch, whereas the ICAI is already up and running. In Committee, my right hon. Friend the Member for Eddisbury (Mr O’Brien) said of the ICAI that
“we have been extremely pleased with the members who have served on it under an expert chairmanship.”
Of course, my right hon. Friend was a DFID Minister back in 2010 when this body was being established. He went on to say:
“They were able to make their own selection of the projects they wanted to examine, after looking at a menu of options. None of that was steered by or in any way discussed with Ministers or the Department. It was entirely an opportunity for ICAI to make its own judgment; indeed, that is precisely what it has done over the years. I think everyone would agree that that has had a good and beneficial effect, in terms of scrutiny and ensuring real accountability for the massive aspirations that are tied to this public money reaching the intended destinations and public goods. ICAI now has a track record.”––[Official Report, International Development (Official Development Assistance Target) Public Bill Committee, 11 November 2014; c. 36.]
My right hon. Friend clearly thinks that there may be a role for the ICAI and I hope it will find favour with the House.
Philip Davies
Clause 5 states:
“The Secretary of State must make arrangements for the independent evaluation of the extent to which”
the aid
“provided by the United Kingdom represent value for money”.
The Bill does not say how that will be achieved, so without either new clause 4 or new clause 1 Members will potentially be voting for a pig in a poke.
Mr Nuttall
My hon. Friend is absolutely right. I hope that when the Minister addresses this sub-group of amendments he will explain exactly how the provision in the version of clause 5 that was inserted in Committee—it is not the same version that the House agreed on Second Reading—will be achieved in practice. It is all very well to say that the Secretary of State
“must make arrangements for the independent evaluation of the extent to which ODA”
represents value for money, but it would be helpful to know exactly how that particular provision will be delivered.
Philip Davies
Is not the danger with the Bill as crafted that, in effect, the Government will be responsible for deciding what constitutes an independent evaluation and for marking their own homework? Surely it is the duty of this House to set up the basis on which we think the Government should be scrutinised, rather than leave it to them to decide for themselves what constitutes independent evaluation.
Mr Nuttall
My hon. Friend is right. Indeed, more suspicious minds than mine may wonder why the Government are reluctant to include a provision to enable either the ICAI or my hon. Friend’s proposed body to carry out independent evaluation and oversee the Department’s work. There may be a good answer to that and I look forward to hearing the Minister’s explanation.
Jacob Rees-Mogg
It is always one of life’s great pleasures to be in the Chamber, and it is always a sadness to be away from it.
My hon. Friend is making an interesting point, and I wonder whether it brings us to the underlying tokenism of the Bill: without any proper mechanism for checking whether the money is well spent, it is merely a grandiloquent expression of intent, rather than proper legislation.
Mr Nuttall
That is the core problem, which some of us have pointed out since the Bill’s inception: it is a Bill without teeth. One of the new clauses tabled by my hon. Friend the Member for Shipley shows how the Bill might be given more teeth, or enforcement powers.
The ICAI would be the perfect body to carry out the role of scrutiny and evaluation because it operates on the basis of the following core values. It is independent: it undertakes its work without fear or favour, and reports the facts as it finds them. It has professional rigour and uses the highest professional standards to gather and evaluate evidence. It is transparent in that it places on its website all its reports and, crucially, the supporting analysis, as well as its records of costs and activities. It is responsive in that it takes into account public and parliamentary opinion in selecting its work programme and undertaking its work. It is innovative in that it makes the most of its new status to experiment with new ways of working, reporting and interacting with its stakeholders. Its last core value is to operate with the greatest integrity by ensuring that its operations are characterised by value for money, high ethical standards, transparency, and accountability to Parliament and the public.
The ICAI is a fairly small body. It consists of just four commissioners, who are led by the chief commissioner and supported by a small secretariat. We are not talking about some large, burgeoning bureaucracy. I accept that it has not been going for many years, but it has been around for most of this Parliament. As I said, it has been well received. Its work has been praised by former Ministers of the Department and the International Development Committee.
The ICAI is the ideal body to take on this role. It will have to be undertaken by somebody, because clause 5 states that the Secretary of State “must”—it does not say “may”—
“make arrangements for the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money”.
If the ICAI is not going to carry out that work, who is? It is vital work on behalf of this House and, indeed, the country.
I will go through the other proposals in passing. New clause 5, tabled by my hon. Friend the Member for Shipley, gives us a flavour of what I have loosely termed the definition amendments. It sets out that
“An amount equivalent to the following annual payments, or estimates thereof, shall be included in the calculation of annual UK ODA for the purposes of section 1—
(a) the amount payable by the United Kingdom to the European Union
(b) Welfare benefits paid to foreign nationals
(c) Welfare benefits paid to UK nationals living abroad
(d) The administrative costs of the Department for International Development and its agencies and associated public bodies.”
There was some discussion on the last point in Committee on whether the cost of running the Department should be included in, or excluded from, the target. It seems entirely sensible to include the cost in the target for the simple reason that it gives those involved in the work of international development programmes the desire to help themselves. The more they cut down on administration, the more they can put towards the cost of helping the people around the world we all want to see helped. I am sure my hon. Friend will have more to say about the quite astonishing figures relating to the amount of welfare benefits that go around the world. Without new clause 5, they will not be included in the definition of what constitutes overseas development assistance.
Jacob Rees-Mogg
Before my hon. Friend moves on, he mentioned payments to the European Union being included. As most of those payments go to poorer countries in the EU, is it not perverse that they do not count as overseas aid?
Mr Nuttall
My hon. Friend, as ever, is absolutely right. That is one reason why new clause 5 should be included in the Bill. As we all know, a substantial part, if not the largest part, of EU funds are disbursed in regional grants to the poorer parts of the EU.
Philip Davies
Just to give an illustration, the overseas aid Department gives aid to Moldova, which is the poorest country in Europe. If Moldova were to become a member of the EU, we would be expected to make higher contributions to the EU to pay for all the work that would need to be done to bring Moldova up to scratch. The money we currently give to Moldova in overseas aid would then have to go somewhere else. In effect, the money would be spent twice.
Mr Nuttall
I am grateful to my hon. Friend for that example, which is a perfect reason why it would make sense to accept new clause 5.
New clause 6, also tabled by my hon. Friend the Member for Shipley, concerns the calculation of gross national income for the purposes of section 1. As has already been touched on briefly in an intervention by my hon. Friend the Member for Christchurch, some difficulty has arisen this week concerning national statistics. As often happens, to be fair, they are subject to revision as more information comes in and more firms send their statistics to the Office for National Statistics.
New clause 6 therefore proposes:
“Adjustments to the figure provided to Parliament as the UK’s gross national income as at the end of the financial year shall not change or invalidate the UK’s performance against the target under section 1.”
Together with the other amendments that are being proposed, that would go some way towards dealing with the problem we have seen this week.
Amendment 16 proposes:
“Clause 1, page 1, line 4, leave out ‘gross national income’ and insert ‘final gross national income of the preceding year.’”
It would also deal with the problem of changes being made to the gross national income after the figures had been reported.
Amendment 5 is slightly different. It was tabled by my hon. Friend the Member for North East Somerset, who has disappeared for the moment. It proposes:
“Clause 1, Page 1, line 5, at end insert “when the central government net cash requirement is in surplus.””
That is an important change, given the overall position of our nation’s finances, and I am sure that my hon. Friend will have more to say about this and his other amendments before the House today.
Amendment 20 would
“leave out “met” and insert “progressed toward”.”
That would cut down on the number of times the Secretary of State has to account for not having met the target.
Amendment 6, which would amend clause 1, page 1, line 7, deals with the inclusion of a role for the Office for Budget Responsibility. This is perhaps one of the most important amendments being proposed this morning, because rather than leaving matters as are currently provided for in the Bill it would be much better if the responsibility for determining whether the target had been met was decided by the independent OBR.
The OBR has been much in the news this week, as it has given its report on the nation’s finances. Again, rather than having the current provision in the Bill, it would be much more sensible if this task was given to the independent OBR. It would not be much of a further imposition on its resources. It is the organisation that has these figures, and each week, each month and each year it has to report to this House. It will be the first organisation to know whether the figure—0.7% or any other figure that the House may decide upon—has been met.
New clause 7, also in this sub-group, was tabled by my hon. Friend the Member for Shipley and is entitled, “Applicability and expiry of the provisions of this Act”. Subsection (1) reads:
“This Act shall come into force on such a day appointed by the Secretary of State by an order contained in a statutory instrument.”
Mr Chope
I have not signed new clause 7, but its heart seems to be that the Bill will have effect only in years when the UK records a budget surplus. Does my hon. Friend agree that without such a provision the Bill will require the Government to increase borrowing to fund overseas aid?
Mr Nuttall
My hon. Friend is absolutely right. While we are in deficit we are undoubtedly borrowing money to pay for the overseas aid budget. There is no getting away from that. It is a fact of economic life. Some might think it a good idea to borrow money with one hand and give it away with the other; others might not take that view. It would be an interesting referendum were one to be held on that question.
In one way or another, new clause 3 and amendments 18 and 19 deal with the accounting period in the Bill. I might have missed it—I am happy to stand corrected—but nowhere in our proceedings have I seen a convincing explanation of why the accounting period by which our success in meeting the target is to be assessed is a calendar year, rather than a financial year, which we all deal in. The new clause and amendments would change the relevant accounting period from a calendar year to a financial year, bringing to the Bill much greater clarity, openness and transparency, because all the Government’s accounts are done in financial years. I cannot see why this aspect of Government expenditure should be any different. I hope that those amendments find favour with the House.
Mr Nuttall
My hon. Friend is absolutely right. It makes sense for those who want to see the United Kingdom making the maximum impact with the money available for international aid, including some who have tabled amendments, to make the reporting requirements—everyone accepts we need some means of evaluation so there must be reporting requirements—as simple as possible. I cannot understand why we make them so complicated by putting them on a different basis from all the other Government accounts. It seems to me logical and common sense to assess the accounting period on the same basis as for all other annual accounts.
Amendments 21 to 26 would reduce the figure of 0.7% to 0.35%. Before anyone jumps up to say that this will mean cutting our aid in half, let me say that that is not necessarily so. This issue reveals the problem with the Bill. At the end of the day, the Government could continue to spend more than 0.35% on international aid; they could continue to spend 0.7% or even 0.8% on it if they were so minded. It is worth while considering why this figure of 0.7% has achieved almost mythical proportions.
Philip Davies
Does my hon. Friend agree that we need some flexibility around what is affordable for the country? Simply having a very high target every year, irrespective of the country’s financial circumstances, is ludicrous. These amendments would thus allow some flexibility to take much more account of the nation’s finances.
Mr Nuttall
My hon. Friend is absolutely right. I will not go into all the detail, but other countries have realised this point. If the suggestion of 0.35% were adopted and the Government decided on it—I do not think for one second that they will—it would put us in the pack rather than being second in the list, as we are at the moment. We would not be behind the rest of the world. It is worth looking at the detail of the figures. Anyone who does so will see that, rather bizarrely, for most of the last two or three decades we have spent around 0.35% and that it is only in the past three or four or probably five or six years—and incredibly since the financial crash—that there has been a huge increase at a time when the country can arguably least afford it.
I am conscious of the fact that there are many amendments, so I shall move on quickly to deal with the final two groups. My hon. Friend the Member for Christchurch has tabled three amendments, one of which is amendment 2. It sets out one of the criteria for evaluation of the policy and provides that it should be
“relevant, sustainable and capable of having a measurable impact.”
I look forward to hearing my hon. Friend’s explanation of the definition of “sustainable”. Perhaps he will convince me that that can be easily assessed. Amendments 8, 9, 10, 11 and 37 were tabled by my hon. Friend the Member for North East Somerset. I should mention in passing that any Member who looked at the Notices of Amendments in the Table Office yesterday should bear it in mind that at that stage amendment 37 appeared as amendment 10. The second “amendment 10” should have been “amendment 37”. I am sure that my hon. Friend will set out in convincing detail his reasons for believing that the amendments should be accepted.
It is right and proper for the Bill to be scrutinised this morning. Millions of people outside the House support this country’s aim and ambition to do all that it can to help those around the world who are starving and need help—no one denies that—but I do not think that giving special status to our aid programme has universal support in this country, and I think it important in a democracy for all sides of the argument to be put.
As I have attempted to say during the last few minutes, the amendments would not wreck the Bill. In fact, they would make it more understandable. If they were implemented, more rather than less money would be available for international development. They would make the Bill more straightforward and transparent, and would increase the funding available for international aid.
Gavin Shuker (Luton South) (Lab/Co-op)
I hope that we shall make good progress today, and respond to the concerns of those who have tabled amendments, new clauses and new schedules. Given the number that have been tabled, I shall not speak to each one; instead, I shall address the broad themes into which they can intuitively be grouped.
The first of the themes that I can discern is independent evaluation—the independent oversight of the duties for which the Bill provides. This group includes proposals for the evaluation to be overseen by, variously, the Independent Commission for Aid Impact, the Office for Budget Responsibility, and a newly created independent international development office—as well as, confusingly, a proposal that there should be no independent evaluation at all.
The hon. Member for North East Somerset (Jacob Rees-Mogg) has called for the creation of an independent international development office. The hon. Gentleman’s late conversion to the quangocracy is a surprising development, which is somewhat at odds with his own preference for
“Parliament regulating things rather than handing them out to random bodies.”—[Official Report, 12 July 2013; Vol. 566, c. 720.]
I look forward to hearing his views.
I can reassure Members that
“the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money”
was debated extensively in Committee—
Philip Davies
The hon. Gentleman says “absolute rubbish” from a sedentary position, but there is lots of evidence that that does happen. In fact, he makes my case for me. If he thinks it is rubbish, then let us set up a body to prove that it is a load of rubbish. What his party and the Government fear is a body that points out that these things are happening, and so they have done away with it, because it may be embarrassing for all these things to be out in the open. We should have a body, which this House voted for on Second Reading, to scrutinise objectively what the Government are doing to ensure that the money is being spent wisely. How on earth can anyone disagree with that? What is there to disagree with about ensuring that the money is spent wisely and for the purposes for which it was intended? Why does no one have the nerve to stand up and disagree with it? They would rather slouch in their seats and try to railroad this Bill through Parliament.
My hon. Friend the Member for Bury North mentioned the Independent Commission for Aid Impact. Chief Commissioner Graham Ward said:
“We saw very little evidence that the work DFID is doing to combat corruption is successfully addressing the impact of corruption as experienced by the poor.”
When the hon. Member for Cardiff South and Penarth (Stephen Doughty) says “rubbish”, he is at odds with what the ICAI chief commissioner said about corruption. Indeed, the chief commissioner went on to say:
“Indeed, there is little indication that DFID has sought to address the forms of corruption that most directly affect the poor: so called ‘petty’ corruption. This is a gap in DFID’s programming that needs to be filled.”
When we have the ICAI making that point for us, it is perfectly obvious that signing up to a blank cheque of overseas spending needs to be properly monitored. The ICAI has made it clear that the Government are not doing that effectively at the moment. Now it seems that the Government do not want anybody to judge how well they are spending the money. It is completely unacceptable to taxpayers to expect them to hand over money without any proper scrutiny.
New clause 5 requires a calculation of overseas aid spending for the purposes of clause 1 and asks that the calculation of ODA includes the amount paid by the UK to the EU, welfare benefits paid to foreign nationals and welfare benefits paid to UK nationals living abroad. All those things should be included in the 0.7% target, as I do not see how they could not be described in one way or another as overseas aid.
Let me give an example to illustrate. We as a country hand over to the EU just short of £20 billion every year and I think that we receive back about £8 billion a year, although my hon. Friend the Member for Bury North is the expert in these matters. One purpose of the money that comes back to the UK is for it to be spent in the areas of greatest deprivation in the UK. That is what the European Union does and, fortunately I guess, the UK clearly does not have that many areas of mass deprivation in an EU context, which is why we get so little back compared with what we put in. The extra money that we have put in is then diverted around the rest of the EU, in effect to prop up the poorest countries and to try to bring their economies up to a level similar to that of the rest of the EU. That is the purpose of how the EU is funded: it is about taking money from the richest countries and handing it over to the poorest. If that does not constitute overseas aid, I do not know what does.
If the Minister had had the courtesy to speak for more than five seconds flat, we might have known his opinion on this, but I thought that the purpose of overseas aid was to take money from the richest countries in the world and transfer it to the poorest. That is exactly what our funding to the EU does on a European basis. That seems to me to be overseas aid, without any controversy. It therefore seems quite extraordinary that everybody now argues that that is not overseas aid, that it should not be counted as such and that it should be paid on top of it. That means that our overseas aid spending will be not 0.7% but considerably higher— probably 2% of GDP by the time we add in all these other factors.
There is a clear case that our money to the EU should be classed as overseas aid and therefore form part of this target. Then, of course, we have welfare payments paid to foreign nationals. In recent years, far too many people from other countries have come to this country and, to be honest, migration is at levels that we cannot cope with. We are regularly told by people who are in favour of all this immigration that all these people will not stay here but will go back so we should not worry about it at all. I do not believe that, but I am humouring those people. That is their argument, but if that is the case it is perfectly clear that people are coming over here to get some of our British money, as we might want to describe it, to take back to their much poorer country. That seems to me to qualify as overseas aid by anybody’s standards, because in some cases the money is passed back to the country of origin while the person is in the UK. We are basically handing our money out to benefit the economies of those much poorer countries and we give a considerable amount in that way.
The third part of the new clause involves welfare benefits paid to UK nationals living abroad. Again, this is a considerable amount. I cannot find the figures offhand, but from recollection I would say that in the region of £3.8 billion a year is given by the Department for Work and Pensions to UK nationals living in countries around the world. That money does not benefit the UK economy in any shape or form. It benefits the economy of the country where those people reside, so that is clearly UK taxpayers’ money going out to benefit the economy of the other countries around the world. It seems to me that that is also overseas aid according to anybody’s reasonable definition.
Mr Nuttall
Does my hon. Friend find it astonishing that jobseeker’s allowance is included in those benefits? It is difficult to understand why the country is paying people jobseeker’s allowance when they are not even in the country.
Philip Davies
My hon. Friend is absolutely right. You would not let me get sidetracked into discussing the definitions of benefits and how they should be paid, Mr Speaker, and I do not want to do so either, but it is worth mentioning in passing that £1 million a year of jobseeker’s allowance goes to people who live abroad. Like my hon. Friend, I am not entirely sure how they can qualify as a jobseeker, but that is a slightly incidental point.
I have the figures now for your benefit, Mr Speaker. In 2013-14, £3.6 billion of DWP money was given to people living abroad. That is a considerable amount of taxpayers’ money that benefits those countries and I do not really see why it should not count in the overseas aid budget. On all three counts, the Minister might want to explain why his Department does not think that that is the case, because he has given no indication of that at all.
New clause 5 also covers the administrative costs of the Department for International Development, its agencies and its associated public bodies. My hon. Friend the Member for Bury North touched on this and I am grateful to him for his support for my new clause in that regard. I am not entirely clear where the administrative costs for DFID and its agencies stand, and if people did not rattle through their speeches so fast, we might all actually learn something. Are administrative costs counted as overseas aid or do we say that overseas aid is paid over and above them? I am not entirely clear. I am clear, however, that they should be included in the overseas aid budget because, as my hon. Friend said, that gives the best possible guarantee that the Department will cut its cloth to ensure that as much money as possible is handed over to the people who need it most rather than being spent on self-serving bureaucracy. We are none the wiser today, but perhaps that might be clarified at some point in the future.
Philip Davies
My hon. Friend is right. Nobody could deny that if the recalculation means that we have underspent, everyone will be clamouring for the extra money to be found for a non-existent project somewhere in the world just to satisfy themselves, but if the GDP figure is downgraded, there will not be many in the House calling for some of the money to be clawed back. The Bill, in effect, sets a minimum target for spending, not an amount. That is not what most people have in mind. The public will be confused about why they have to spend an extra £550 million—I have no idea where the money would come from—to meet this arbitrary target because it did not happen to match the projection that was made. That is ridiculous.
My new clause 6 means that none of those adjustments would be made. If the calculation was wrong but the money was spent in good faith on a good-faith calculation, that should be that. There should be no end-of-year recalculation of the budget based on an upgrade or a downgrade—it could work either way and I cannot predict which way it would go. It strikes me as ridiculous that the Treasury should have to dig out money from nowhere just to hit a particular target. That is why the new clause is so important.
The way in which GNI is calculated is changing: 0.7% of the old GNI is quite different from 0.7% of the new GNI. For no reason other than statisticians deciding to calculate things differently, the taxpayer will have to find hundreds of millions of pounds extra in order to hit the 0.7% target.
Mr Nuttall
Will my hon. Friend make it clear that the Office for National Statistics has had to change the way national income is measured because the ONS was required to bring it into line with the rest of the EU? It is because we are members of the EU that we have to do this.
Philip Davies
I am grateful to my hon. Friend for that. I am sure everybody in the country will be pleased to know that the taxpayer has been stuffed because of the European Union—not for the first time and, no doubt, not for the last time.
The fact remains that we have a new calculation. This is not a pledge that was made in the 1970s or even when the proponents of the Bill first wanted to enshrine it in law. We are being asked to sign up to something entirely different from what we were originally told, and it will cost the British taxpayer more. If 0.7% of the old calculation was good enough, why can we not stick to that figure and that calculation? Why do we have to move to the new calculation? What evidence is there that that is necessary? What is the thinking behind it? We have had no explanation of that. Nobody has even touched on the issue. The taxpayer is expected to hand over a few extra hundreds of millions of pounds. Some in the House do not care that they are spending other people’s hard-earned money willy-nilly, but I care about people’s hard-earned money and the taxes that they pay, and I want to make sure that those are spent properly. It is just an accountancy figure to many Members, who do not care.
The GNI figure is essential. By passing the Bill unamended and without my new clause, we are at the whim of any future recalculation of GNI which requires the Government to hand over even more to hit the arbitrary 0.7% target. We should not allow that to happen. My new clause 6 would put in place safeguards for the taxpayer.
New clause 7 is also extremely important. It deals with one of the assertions from the Opposition. It provides that the Bill would take effect only after a referendum had taken place and had resulted in more than 50% of the people voting in favour of the target. I am constantly told that the target is extremely popular out in the country, that everybody wants to see it met, and that only a few reactionaries do not. I am prepared to take my case to the country and have it tested in a referendum. If more than 50% of people vote to spend all that money on overseas aid, I will be the first to accept that. I will try to make sure that the money is spent as well as possible, and I will accept the will of the people in a referendum.
Mr Nuttall
Is my hon. Friend aware that, in an August 2012 report specifically on the introduction of targets in legislation, the Institute for Government made it clear that having no teeth or penalties to back them up
“brings into question the point of putting a target into law in the first place”?
Philip Davies
I absolutely agree with that. Apparently this ridiculous Bill is very important, but there is no sanction if the Government do not deliver on it. Surely there must be some sanction available. If I understand the Bill correctly, the only sanction is that the Government would have to make a statement to the House—and that’s it! It does not even have to be an oral statement; it could be a written statement. What a complete joke! This is a piece of joke legislation and I am afraid that the Government are treating us with contempt by having no sanction in place if they do not deliver on it.