International Development (Official Development Assistance Target) Bill

Lord Cormack Excerpts

Friday 6th February 2015 Lords Chamber

[Lord Howell of Guildford]

This is a sensible change proposed by my noble friend Lord Tugendhat. It would obviously put the Bill, which we want to improve and strengthen, on to a less wobbly basis. There is an enormous debate going on in the economic world and, indeed, in the international scene generally about the nature of GNI. Colleagues will recall, certainly in the last year, or less than a year ago, that the British suddenly found that their budget contribution to the EU budget jumped by the most enormous amount. That was related directly back to redefinitions of our national wealth, product and income. The ONS redefined our national GNI as including various illegal activities and grey and black market activities—and I think, although I may be corrected, on prostitution as well. It made some assessments, which vastly increased our national figure. Instantly we were charged an extra several hundred million—was it even a billion?—for the EU budget. This is dangerous ground. It would be enormously sensible for those who want to see this Bill in place and have an effect to get a better, less shaky basis for it.

There is of course the additional point that if the 0.7% figure rose as a result of GNI rising by these slightly controversial means—I do not think this point has found favour in the House but I beg your Lordships to try to look at it—it would take resources away and put them into ODA, which, as we recognise, is a decreasingly relevant part of the development driver process. That would deprive areas where we want to see development, such as the technology to reduce energy costs, which are crucifying developing countries. We want money to be spent there and on all sorts of technological improvements, which will bring development. We want money to go into defining the law on property ownership, which Hernando de Soto has said is the key consideration in enabling developing societies to develop.

These are the things for which we feel quite passionate. To see money diverted into areas that are not promoting development, even if they add to the aid budget, is not good for this country, our pride and our development power, and it is taking the wrong turning. This is a small but sensible amendment, which I hope will be accepted without demur.

[Lord Cormack (Con)]

My Lords, I sat through virtually the whole of the Second Reading debate, as my noble friend Lord Purvis knows. He also knows why I was not able to take part in that debate. It was a very good-humoured debate, which saw this House very much at its best. I regret that the hallmarks of our debates—courteous good humour and willingness to listen to the other point of view—have not been the defining characteristic of this morning’s debate. That is a great pity.

The fact that we can all accept a principle as being wholly desirable and good does not mean that we all have to accept that every particular is also wholly desirable and good. My noble friend Lord Tugendhat moved this amendment with precision and brevity, clarity and force. He made an extremely powerful argument. I hope it is an argument that will be recognised as such by my noble friend Lord Purvis and that he will feel that an amendment of this sort—although I sincerely hope there will be no pressing to a Division today—would not in any sense invalidate or undermine his admirable Bill, but would strengthen it in the ways that have been indicated. I hope that the rest of today’s debate can be conducted in a way that is more reflective of the good humour and good temperament of your Lordships’ House than the debate on the first amendment was.

[Lord Hamilton of Epsom]

I very much support my noble friend Lord Tugendhat’s amendment. In the spirit of my noble friend Lord Cormack, I certainly do not intend to speak for very long.

The first point that my noble friend Lord Tugendhat made was one of transparency. He made the point, quite rightly, that we measure everything else in terms of GDP rather than GNI. If we want to take the public with us it seems to me to be very sensible to use GDP rather than GNI. Let us be honest: the reason why people support this Bill with the enthusiasm they do is because they want to be seen to be generous with other people’s money. We all like people to be generous with their own money; it is slightly different when they are being generous with other people’s money. As that is the purpose of the Bill, we might as well make it as clear as we possibly can by using GDP rather than GNI.

My noble friend Lord Tugendhat also made the point that the difference between GNI and GDP is very small at the moment. In that case, this is a unique and wonderful opportunity to use GDP instead of GNI before the two indices start to part from each other. We have no idea what might happen in the future; the economy of this country may change and it may well be that we start getting less money if GNI starts to increase above GDP.

If we really want to nail this down, I say to my noble friend the Minister that this is a wonderful opportunity to embrace the amendment and get it on GDP, which everybody understands. That also means that we then guarantee that the 0.7% figure means something in the future, if that is what the Bill and the House desire.

--- Later in debate ---

[Baroness Northover]

Certainly. GNI became the preferred method of measuring a country’s wealth. As I said, we are meeting an international target.

[Lord Cormack]

I do not dispute the truth of what my noble friend said, but could she tell us when and why this change came about?

[Baroness Northover]

I think I just said when this change occurred. I emphasise too that the budget is subject to annual scrutiny, as my noble friend Lord Purvis said in the debate on the previous amendment.