International Development (Official Development Assistance Target) Bill

Lord Davies of Stamford Excerpts

Friday 27th February 2015 Lords Chamber

[Lord Lawson of Blaby (Con)]

My Lords, I give my full support to the amendment that the noble Lord, Lord Butler, has just moved. He pointed to the names of noble Lords who have put their names to this amendment, all of them former Permanent Secretaries to the Treasury, Cabinet Secretaries or, in some cases, both. In all my 23 years as a Member of your Lordships’ House, I cannot remember this ever occurring before, and it may well be that it is unprecedented. There is a reason for that.

I pay tribute personally to the noble Lord, Lord Butler. I have known him for many years. When I first became Chancellor, he was Permanent Secretary in charge of public expenditure at the Treasury, a duty that he fulfilled impeccably and has done over the years. We are very lucky in our senior Civil Service. He has been an outstanding public servant in a number of ways over a large number of years, and we ignore what he says at our peril.

The amendment is fundamentally about good government. I do not know whether this is still the case, but in my day the Treasury used to be known as “the central department”. It was called that because it had a responsibility that went beyond the question of the management of the economy, in so far as one is capable of doing so; it also had a responsibility for good government. We in this House also have an overarching and overriding responsibility for good government. However well intentioned, the Bill, for the reasons outlined by the noble Lord, Lord Butler, is the antithesis of good government. It is gesture politics. Good government really matters, and the amendment from the noble Lord, Lord Butler, goes to the heart of that issue. I warmly support it.

[Lord Davies of Stamford (Lab)]

My Lords, the noble Lord, Lord Butler, in his normal way, spoke extremely powerfully. His arguments are extremely strong, his logic is irrefutable and his experience is something that no one would wish to challenge.

The trouble is that I think he has missed the essential point of the Bill, which is that it is a quite exceptional measure designed to send an exceptional message to the world. First, it says to the developing world, the poor countries containing the 4 billion or 5 billion people in this world who live on less than $1,000 a year per capita income, that we care about inequality and are making a fundamental qualitative change in order to demonstrate the authenticity, the reality, of that commitment and a desire to make a new move in that direction. The second reason is of course to send an equally unmistakable signal to other developed countries and to set an example that we hope they may follow.

The trouble with the amendment from the noble Lord, Lord Butler, for all the quite sincere compliments that I have just paid it, is that it undermines completely that sense of authenticity. If it is clear that at any time the Treasury can decide in a given year that our obligation to spend 0.7% of GDP on international development no longer applies, then the whole commitment that we are trying to make will simply be emptied of its content. The message will not have any strength at all for either the developing world or the rest of the developed world, and that is the basis on which, very sadly, I feel I have to oppose the amendment.

[Lord Lamont of Lerwick (Con)]

My Lords, I know that the mere appearance on the Marshalled List of the dread words “the Treasury” will send a shiver through most of my former colleagues and a very large part of the House. None the less, I feel that this amendment might be more persuasive if people unconnected with the Treasury supported it. I feel an obligation to support the proposal of my noble friend Lord Butler, and I strongly disagree with what the noble Lord, Lord Davies, said, which was that this amendment is incompatible with the 0.7%.

There is no reason, as I shall explain in a minute—I shall speak very briefly— why the 0.7% should not be compatible with rigorous examination by the Treasury of the budget of the department. One of the fears that have been expressed by those who are sceptical about this Bill is that it creates a perverse incentive to spend money so that the whole focus is on the quantity, not the quality, of expenditure. There is a risk that we may be jet-hosing the programme with money, with the only objective being to meet the 0.7%.

The noble Lord, Lord Davies, quite rightly reminded us of our obligations to the poor, and he made the point that there are huge numbers of people in this world who survive on tiny incomes. There are 2.8 billion people surviving on less than $2 a day, and 20% of those people survive on less than $1 a day. That fact makes it very important that we see that this expenditure is economically and properly spent, because every bit that is saved, every bit that is not wasted, can be the difference between life and death for people living on the poverty line.

Exempting overseas aid from the public expenditure process is the removal of the process. The process of the public expenditure round is that departments have to make a case for spending money, not just for the global total. There is examination in advance of the major items that make up the totality of the programme. Getting rid of that entirely removes the discipline that a spending department, or in this case DfID, has to make for the money that it wishes to spend.

There a provision in the Bill for examining the expenditure retrospectively, but that is not the same as examining it in advance. Surely the department would benefit from having the effectiveness of its programme examined not just retrospectively, when nothing can be done about it, but in advance, when people can be warned and when projects can be examined by people outside the department. It is a great pity that there is no single body in the Bill, as far as we can see. At previous stages, the noble Baroness, Lady Northover, made the point that they did not want to have one department looking at this, but that re-emphasises the need for the Treasury to have a look at this in advance. That is compatible with the 0.7%, because all that would be involved would be the Treasury examining it and saying, “We would like you to look at this project”, and, “We think this project is better than that project”.

Incidentally, Clause 2(3)(b) refers to how, if the Government fail to meet the target of 0.7%, they have to explain how it may be due to fiscal circumstances. If you are going to have fiscal circumstances involved in the calculation of the 0.7%, it seems very sensible that the Treasury should be involved. Who else would know about the likely fiscal circumstances? Indeed, it is implied in the Bill that the Treasury would have to be involved because nobody else can talk very persuasively about the fiscal circumstances.

I believe that in order to make the Bill effective and to make sure that expenditure reaches the poorest of the world, this amendment ought to be supported.

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[Lord Tugendhat (Con)]

My Lords, the Minister will recall that at Second Reading and in Committee I stressed my support for the aid programme and that I have also supported the 0.7% target. The points made by my noble friend Lord Forsyth and the noble and gallant Lord, Lord Stirrup, are central to the debate we are having. Although I and other colleagues doubt the wisdom of guaranteeing a particular share of the national budget to one particular spending programme for exactly the reasons that the noble and gallant Lord, Lord Stirrup, emphasised, the Government are arguing that that is the right thing to do in the case of this programme, as distinct from any other, partly because of its international nature, partly because of the commitments we have entered into, partly because of their belief that we would be setting an example to other people and partly because of their belief that others will follow that example.

Given that that is the Government’s position, the Minister owes it to the House to explain why what is sauce for the development goose is not sauce for the defence gander. I recognise that she is not a member of the Conservative Party, but she is speaking on behalf of the Government in this House and the Prime Minister, who leads the Government of which she is a member, has been emphasising very strongly in recent days the importance of other nations following our example in relation to the 2% target set for NATO. We have recently received evidence that the British Government may not be able to meet that target next year. If this idea of setting targets and guaranteeing a share of national expenditure is so important in one field, the Minister must be able to argue, for the reasons set out so eloquently by my noble friend Lord Forsyth and the noble and gallant Lord, Lord Stirrup, why they should not apply in the case of defence.

I hope she will also be able to accept that while the problems of the developing world are of a continuing nature, problems in the case of defence wax and wane, and at the moment, when we look at what is happening in Ukraine and the Middle East, problems in the defence sphere are certainly waxing. Therefore, if the Government are going to be able to defend on a rational basis the reasons why they are privileging the development budget in his way, it is essential that they are able to explain why they do not wish to do so for defence. I know defence is not the Minister’s department, but she is proposing this Bill and doing so on a particular set of grounds which apply to the defence area, where we are also committed to a particular target.

[Lord Davies of Stamford]

My Lords, the noble Lord, Lord Forsyth, invited me to be consistent in my attitude towards this amendment and the first amendment we debated this morning. I think it might have been a slightly rhetorical invitation, so I will probably surprise him when I say that I propose to be exactly that. The way in which the amendment is worded, making public expenditure in one department a function of public expenditure in another, is a rather peculiar way to go about managing public expenditure. I rather doubt whether the noble Lord and his colleagues, including my noble friend, plan to put this amendment to the vote, but I certainly share the aspirations and inspiration behind this initiative.

Earlier, I said, and I stand by it, that one of the two major points of this Bill is to set an example in the world and therefore to achieve something of a leverage effect so that, where we spend more money, we may succeed in persuading others to spend more money in the same way and the same direction and thereby greatly promote the cause we have in mind. That applies, in my view, to the 0.7% target in international aid. It would also apply in the case of the 2% of GDP defence spending target that NATO has formally adopted. As the noble and gallant Lord, Lord Stirrup, just said, that is the only other field in which such an international target exists.

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[Baroness Northover]

I have just given the Government’s commitment. Interestingly, I also have here the figures for defence spending year on year—which I am assured the noble Lord is extremely well aware of—from 1990 up to the present. One of the things that strikes me, coming out of DfID, is how steady it is. Yes, it went up, in particular between 2007 and 2011, but generally speaking it has been remarkably steady over that period from 1990 to the present, in contrast to the aid budget. Noble Lords can look at those figures. That brings me back to my point.

[Lord Davies of Stamford]

May I give the noble Baroness another chance to answer the question from my noble friend Lord West, which she did not do? Did she or did she not say that the Government are committed to maintaining defence spending at more than 2% of GDP after the next financial year?

[Baroness Northover]

I remind the noble Lord that we have a general election between now and then, and although we are not standing for election many of our colleagues are. The new Government will no doubt take a decision as to what they say their spending should be. However, I set that in the context of a continuity here, as regards defence spending, which you do not see in the DfID budget.