International Development (Official Development Assistance Target) Bill

Lord Howell of Guildford Excerpts

Friday 6th February 2015 Lords Chamber

[Viscount Astor (Con)]

My Lords, my amendment is, I hope, a modest and helpful one that might find some favour with the noble Lord, Lord Purvis, and which addresses some concerns that I raised at Second Reading.

Perhaps I should say again that I support the principle of our foreign aid budget being 0.7% of GDP. I hope that that is clear enough to the noble Lord opposite so he will not have to address his Twitter account about those of us who are speaking from this side of the Committee. The issue has always been whether that figure should be a target or enshrined in law. The Government have encouraged the Private Member’s Bill that the noble Lord, Lord Purvis, has brought forward, which indeed enshrines the percentage in law. We therefore have to consider the Bill, what it achieves and whether it can be improved or amended during its passage through your Lordships’ House.

My main concern is that in order to achieve the spending required, the department will not always be able to have a reserve for emergencies, particularly humanitarian emergencies, or be able to account for programmes that go over from one year to the next. Emergencies are always important, whether they are due to war, famine or disease. As we have heard, humanitarian aid is a very small part of the total budget of the department. There must be funds available for the expected and the unexpected; there must be a reserve fund.

The Minister also wrote to me about the difficulties of having two year-ends—the calendar year-end and the financial year-end. She said in her letter that,

“it is not unusual for accounts to be converted from calendar to financial years across a range of public and private sector activity”.

That is entirely true, but what is not usual is for them to be converted on an annual basis. That would be an auditor’s nightmare.

What my modest amendment is designed to do—I accept that it might not be as well drafted as it should be—is give the department some flexibility in the way it operates without in any way affecting the aims of the Bill. Although the Minister was kind enough to write to me, one issue that she did not address—perhaps she can do so today—was answering the question I asked at Second Reading about what portion of our contribution to the EU budget is spent on aid. It is substantial and is something we should perhaps be proud of. Why should the amount not be stated in the report that the Secretary of State brings before Parliament?

My amendment relates to Clause 2(3); and your Lordships will see that in the Statement that has to be made to Parliament if the target has not been met, various reasons have to be given, which include,

“(a) economic circumstances and, in particular, any substantial change in gross national income … (b) fiscal circumstances and, in particular, the likely impact of meeting the target on taxation, public spending and public borrowing”,

or,

(c) circumstances arising outside the United Kingdom”.

My amendment would add a small extra paragraph saying,

“the fact that expenditure on a programme has been rolled over into a future year”.

That would allow the department, when looking at its budget, to say, “We haven’t spent all the money this year. We will roll it into the following year”, which means that it does not have to engage in what has been described as the “ugly rush” to spend all its money before the year end, and thus would have flexibility. I hope that the Minister will be able to answer my question and that the noble Lord, Lord Purvis, will consider that the amendment is helpful to both the aims of the Bill and the way that the Secretary of State will report to Parliament. I beg to move.

[Lord Howell of Guildford (Con)]

My Lords, as we are looking at page 2 of the Bill and the amendment of my noble friend Lord Astor, which seeks to add a further paragraph to the three issues listed in paragraphs (a), (b) and (c), one or more of which might lead the report to explain why the target has not been hit, may I ask a question of my noble friend Lord Purvis, or perhaps the Minister, about paragraph (c), which refers to,

“circumstances arising outside the United Kingdom”?

Would that include the views of the proposed recipient countries of overseas aid saying that they no longer want the aid? We had this situation with India recently, where India reviewed its relationship with Britain, felt that the relationship should mature and that far better outcomes for development and escaping from poverty would be achieved through other fiscal changes such as two-way investment flows, impact value investment and a whole range of new techniques, and therefore it did not want to go on receiving old-fashioned official aid because official aid, as a large part of the world has discovered—not, I fear, everybody in your Lordships’ House—is not the main instrument, or even the most effective instrument, for lifting people out of poverty, ending real suffering and accelerating economic growth. So if countries come forward and say, “We do not actually want this assistance”, would that be one of the,

“circumstances arising outside the United Kingdom”,

which might disembarrass the Secretary of State and enable him to explain why the target had not been hit?

[The Parliamentary Under-Secretary of State, Department for International Development (Baroness Northover) (LD)]

My Lords, I shall respond to the questions put to me. I apologise to my noble friend Lord Astor if I did not adequately answer in my letter to him all the questions that he raised. We will get back to him with further answers.

The EU came up in discussion on earlier groups of amendments of multilateral organisations generally. I expect, or at least hope, that noble Lords will be aware that when we came into government, we undertook a bilateral aid review of every programme, which included what was then taken forward as far as India was concerned, and a multilateral aid review. We pulled back from those organisations that did not score well in the multilateral aid review. I know that the party opposite was concerned, for example, that we pulled back from the ILO on the basis of that, although it is aware that we are engaged with the ILO in Bangladesh. However, many multilateral organisations came out of the aid review extremely well, and so did the EU budget.

Earlier, noble Lords referred to what my noble friend Lord Patten of Barnes—Chris Patten—said many years ago, after which he took forward the most formidable reform programme of what EU aid did. Since then, others have built upon that, which has been extremely welcome and no doubt has brought us to the situation that we are in. I hope that I can reassure noble Lords that we remain closely engaged in trying to ensure that we get value for money from that and that all is scrutinised.

Long discussions and negotiations with the Indian Government came from the bilateral review. The aid programme in India continues to 2015. It continued over a long period and then moves to technical support. It is not something which suddenly happened. If anything, countries tend to say, “Please don’t go”, rather than “Do go”. I hope that I have reassured noble Lords in that regard.

--- Later in debate ---

[Lord Forsyth of Drumlean]

I hear gasps from the back. It is exactly the same argument. The argument by CND was that if we gave up our nuclear weapons, everyone else would follow suit. That is the argument that was put. The argument put now is that if we enshrine 0.7% in law, all these other recalcitrant countries will follow our example. Interestingly, many former Treasury Ministers and Chancellors of the Exchequer have put their name to this, as have people who have taken evidence. The argument is that those fears that have been expressed are misguided and that none of the disadvantages we have pointed to will come about. Let us test it. If, after five years, we find that those of us who have been a bit concerned were wrong, the Bill can be enshrined again. Indeed, if those who have argued for the Bill are right, it will no longer be a matter of controversy and we will not need a Bill which says that the Secretary of State has to tell Parliament why these proposals fail to meet the target, and that will be the end of the matter. Perhaps we might need a Bill that has a proper penalty and creates a legally enforceable duty on the Secretary of State, which is how this Bill has been sold erroneously to the public, as we have discovered this afternoon.

I believe that the sunset clause is a way to unite us all, end the division over this and give the proponents of the Bill an opportunity to show that their arguments are valid. I have to say that I have my doubts. I beg to move.

[Lord Howell of Guildford]

I disagree slightly with my noble and tireless friend Lord Forsyth in that he talks about the other countries that have not set upon this kind of fixed target as being recalcitrant. I do not think that that is quite right. They are innovative. If one makes a study of where the Netherlands and Germany are going, and where the advanced thinking in America is going, they are going in a slightly different direction from those who are urging that we must have a fixed amount of official development assistance. They are saying that the whole scene for development is changing. I know that I am coming at this from a slightly different angle from my noble friends and many of your Lordships.

[Lord Forsyth of Drumlean]

I apologise for interrupting. I was not advancing that view: I was just repeating the view put earlier in our debates, which was held by those who argued that it was necessary to have the target to encourage the others. I agree with my noble friend.

[Lord Howell of Guildford]

Of course, the implications are that this is not the kind of encouragement that will move them because they are already advancing in different and, in many cases, more advanced directions than we appear to be stuck in at the moment. As we wind up this debate, I fear that this has been an afternoon of sadly missed opportunities. I fully accept that aid still matters intensely. It is notably for humanitarian purposes to support poverty reduction and human development in low-income countries. It is important. Many of us have fought for it over the years and we are a good development power, which gives me pride.

However, it is of increasingly limited help in building partnerships with the emerging powers and with the low to middle-income countries. The point has been forgotten that the thrust of 40 years of development thinking and aid development is to enable these countries to graduate away from development assistance, which in many cases they do not like. It does not fill them with the esteem and the power that they need to get development going.

As grants of aid become less appropriate in some countries, we should be thinking about the new forms of development co-operation that are necessary. Over the next five years, where we could have this sunset clause, all kinds of new perspectives will emerge on development; that I can promise your Lordships. As they develop, this commitment to a fixed percentage of old-fashioned ODA-able kind of aid will look more and more inappropriate. That is why I simply say I hope that, on Report, we will have a little more imagination and understanding that the world has changed. In the mean time, it would be nice to have a sunset clause of this kind. That is why I support this amendment.