Overseas Development Aid

Earl of Sandwich Excerpts

Tuesday 9th October 2018 Lords Chamber

[Lord Bates]

An example is impact funds, many of which already exist within the City of London; many civil society groups and organisations such as the UN Global Compact scrutinise how that is accounted for in accounts. With the CDC it is a different process. We were quite specific when we discussed the raising of the threshold—the capitalisation of the CDC—as the legislation went through this House, that no investments could be made under that without a business case being prepared, which then has to be signed off and reviewed at the end of it to ensure that the outputs it was envisaged would be delivered were achieved, and if not, why not? These are therefore all important elements in the exploration of these issues. More can be done, but again, it needs to be done transparently.

[The Earl of Sandwich (CB)]

My Lords, I concur very much with what the noble Lord, Lord Collins, was saying, and I well remember the CDC Bill and the criticisms that we made then. One can raise a slightly different issue about the CDC. Does the Minister recall the comments of ICAI—the Independent Commission for Aid Impact— about the impact of aid? You can put in the rubric that poverty alleviation is a purpose, but what about the measurement of that purpose, and where is the evidence of impact? We still have to wait for this to come from the CDC.

[Lord Bates]

The impact comes in three levels that we specifically target. One is the amount of money which catalyses money to come in from the private sector: if we invest £1, does it bring in £10 of private investment? We look at it in terms of the taxation it generates for revenue in the country where the investment is taking place, and we look at the number of jobs that are created by that. In alignment with the SDG requirement on this for aid, this is for decent work, so I accept all that. That is how we do it. The point which the noble Earl was right to highlight was addressed substantially by the change in the new investment strategy, which the CDC was required to have alongside the new investment. That has a much greater focus on the most fragile and most affected states, because we do not want it—not that it has ever done this in its illustrious, 70-year history—to cherry pick the investments. We want it to go where no private sector capital is going so that it can make the greatest impact. That impact and that change in the investment strategy will see results in the years to come.