International Development (Official Development Assistance Target) Bill

Lord Howell of Guildford Excerpts

Friday 27th February 2015 Lords Chamber

[Lord McConnell of Glenscorrodale (Lab)]

My Lords, I fully endorse and support the two important points made by the noble Lord, Lord Davies, which were both about our values as a nation, our leadership and our use of soft power, the importance of which was so ably described in the recent report of your Lordships’ Select Committee on Soft Power, which I hope we will debate in the near future.

I want to add one point that addresses precisely the point just made by the noble Lord, Lord Lawson. He raised the issue that is at the heart of the debate on this Bill; it is that this Bill, above all else in my view, allows us to move from a debate on the quantity of aid from this country to the developing world to a debate on the quality of that aid. For 40 years, we have debated only the quantity of our international aid. This Bill allows us once and for all to move on from that debate on quantity to debate the quality of that aid year after year, as the budget for the Department for International Development or any successor department comes in front of Parliament.

Therefore, contrary to the point that was just made by the noble Lord, Lord Lawson, I think that at its heart this Bill allows us to move from the debate on quantity to a debate on quality, and that is why your Lordships’ House should support it.

[Lord Howell of Guildford (Con)]

My Lords, I rise to support this amendment for non-Treasury reasons, which may be a relief to noble Lords. We all know that the Treasury is full of very clever people, but frankly the Treasury is not always right and therefore there would have to be good reasons, other than the very fine reasons put forward by noble Lords who have already spoken, for urging that there should be an extra annual check on this programme and target.

My reason is simply that other, more effective, ways of promoting overseas development, eradicating poverty and meeting development goals are emerging all the time. The concept of ODA was invented 30 or 40 years ago, possibly more, and many new ideas have developed for promoting development and for contributing to development in more effective ways since then. The truth is that in looking at this Bill and the idea of the 0.7%, your Lordships are really dealing with an old agenda. These were fashionable views 20 or 30 years ago. Aid and development techniques have moved on rapidly.

Official development assistance—the ODA concept that we are dealing with—is rapidly becoming irrelevant. The complex challenges the world is now facing require a radically different financing model, one that requires a comprehensive approach to financing, embracing all sources of public and private finance available to developing countries. Tying the development effort unconditionally and without annual review into an “ODA-able” programme is bound to divert resources from far more productive ways of helping the poorest and encouraging development in today’s conditions.

One of the major contributions developing countries need is peace and security through military assistance, techniques and training, none of which is “ODA-able”. We are deliberately limiting our capacity to help the development process in the conditions of the 21st century, so the case for annual review and revision by the Treasury to keep our development spending programmes up to date and effective seems unanswerable.

[Lord MacGregor of Pulham Market (Con)]

My Lords, I am very much aware of ex-Treasury Ministers speaking, but nevertheless I want strongly to reinforce the points made by the noble Lord, Lord Butler. Before I go on to my arguments, I state for the record that I wholly support the commitment and proud record of the UK on humanitarian and development aid. We are one of the world leaders. I do not agree with the noble Lord, Lord Davies, that it has to be enshrined in law to make that point, because our record and the level of spending to which we commit ourselves demonstrate that. This amendment in no way detracts from that.

I shall make four points in favour of this amendment, and I shall repeat very briefly what the noble Lord, Lord Butler, said. It all stems from my years of experience in dealing with public expenditure, in particular as Chief Secretary when the noble Lord, Lord Butler, was leading the programme in the Treasury under my noble friend Lord Lawson as Chancellor.

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

My Lords, I thank noble Lords for bringing this amendment before us and welcome the level of attendance in the Chamber.

The noble Lords who have tabled this amendment have a formidable track record in the Civil Service and in government, not least in the Treasury, as the House will recognise, and are supported by very experienced voices. I value enormously their input and insights. It is extremely important that we take what they say very seriously. Nevertheless, I am afraid that, on behalf of the Government, I must resist this amendment. Perhaps I can explain why.

The Bill places a duty on the Secretary of State for International Development to meet the 0.7% GNI ODA target in 2015 and each subsequent year, and to lay a statement before Parliament in the event of it not being met. This proposed amendment in effect places the decision, though not the responsibility, to meet the target first and foremost with the Treasury at each spending round. It therefore provides the possibility for the Treasury to decide that 0.7% is no longer a priority, and for budgets to be accordingly adjusted downwards.

Of course, I am certain that the Treasury will fully scrutinise what DfID does, as, I assure the noble Lord, it does now. The department will, of course, still be subject to scrutiny through the spending review process in terms of how it spends the money. The department is scrutinised not only by the Treasury through the spending review process, as are all departments, but also through the Treasury approval of individual programmes within an agreed regime of delegated authority. I assure noble Lords that this Bill does not affect the role of the Treasury. What it does is send a clear message from this Parliament of its expectations in regard to the aid programme. As the noble Lord, Lord Anderson, put it, it would be wrong to interpose the Treasury into this arrangement through writing it into legislation. The Treasury’s role remains unchanged. Therefore, the proposed amendment of the noble and learned Lord, Lord Brown, is not needed either because of the scrutiny I mentioned, and it too should be resisted, if it were put.

The allocation of public expenditure is already a primary Treasury function. The Treasury’s role in the spending review is to ensure that the Government’s limited resources are allocated in the best way possible to DfID and other government departments to deliver government objectives, including enabling the UK to meet the 0.7% target—a commitment which this Parliament has debated and on which it has come to a settled view in the other place, and may yet in this place.

One of the challenges of the ODA level has been its huge variation, dropping sometimes to around 0.2%, and at other times moving up to 0.5% and now to 0.7%. That is not the pattern for other departments. Stability and long-term commitment are required. As the noble Lord, Lord McConnell, pointed out, this Bill enables us to move beyond the quantity to the quality of aid. We would not reach 0.7% if we did not already have formal Treasury approval in the spending round. This amendment proposes an additional legislative requirement to do what the Government are already required to do: tell Parliament how they propose to allocate public expenditure.

The noble Lord, Lord Butler, and other noble Lords expressed concerns that legislation of this nature relieves departments of having to make a case for expenditure. The noble Lord was particularly concerned about the impact that the commitment to 0.7% would have on value for money, as he said in Committee. I reassure him that the commitment to 0.7% is in fact having the opposite effect to that which he fears. It has resulted in a great increase in scrutiny, not a reduction. The Government have stepped up scrutiny and value for money. We have set up the Independent Commission for Aid Impact, which enables strong parliamentary oversight. All DfID spend is subject to a rigorous value for money assessment. A recent review by the OECD’s Development Assistance Committee said that the scaling up of the UK’s aid budget was planned in a way to ensure that the extra money was well spent and had the greatest possible impact. We are now ranked second in the world in transparency on aid finance.

In conclusion, I am afraid we do not feel that this proposed amendment is in the spirit of the Bill. The Bill allows Parliament to send a clear message to the Government about the spending expected on ODA from year to year. Most accept that the need is there. I thank the noble Lord, Lord Butler, and others for their recognition of that. Most accept that we can be very effective in helping to meet that need, for which I thank them. One day, of course, we all hope that this assistance will not be needed, but we are still very far from that place. Of course, as my noble friend Lord Howell said, we also harness many other means to assist development, including working with very fragile states such as Somalia and Syria.

[Lord Howell of Guildford]

I am extremely grateful to my noble friend. Before she sits down, will she address the point that the noble Lord, Lord Reid, made, and which I tried to make, about outcomes? Will she comment on the fact that ODA and “ODA-able” expenditure is of less relevance in promoting development and overseas assistance to eradicate poverty than it was in the past? That is a rather important consideration on which I would value her views.

[Baroness Northover]

Outcomes and results are a major focus of what DfID does; I hope that will reassure the noble Lord. We recognise the complexity of working in developing countries. The very fact that we focus on fragile states, and use all sorts of other means to try to assist their development, stability and security, shows that we understand how complex this environment is. However, it would be contrary to the aims that we are talking about if we made a provision that the Treasury, however laudable the institution, organisation and department may be, can effectively switch the target on and off at will.

The amendment has the potential to undermine the clear message that Parliament is sending and the consistency and predictability that the Bill, in its essence, seeks to achieve. It also has the potential to undermine the authority of Parliament itself by placing the Treasury in the role of gatekeeper between Parliament and government.

I have given a great deal of thought to the noble Lord’s amendment. Even if he does not agree with my position and is therefore unwilling to withdraw it, I hope that he will accept the argument that I make. If he wishes to test the opinion of the House, I make it clear to those who support the essence of the Bill that we oppose the noble Lord’s amendment.

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[Lord Howell of Guildford]

My Lords, this amendment, like the last one, is about more than public expenditure control, important though that is. It is, as my noble friend has just emphasised, about flexibility. Why is there an essential need for flexibility? Because the fundamental views about the relationship between ODA, development and the eradication of poverty are changing fundamentally all the time—and certainly will change radically over a five-year period.

The worry of many of us who have worked for years in development and overseas aid issues—almost half a century in my case—is that the promotion and thinking behind this Bill, and behind the reluctance to have more flexibility, is blind to the entirely new thinking that has been developed in the OECD and other areas about the way in which development assistance should be contributed by the richer countries of the world. The concept of what is called “country programmable aid” has now been introduced. This is generally recognised to be a far more effective measure and a real contribution to aid from richer to poorer countries than the old ODA definition. The other very powerful new tool that has come along is impact investment, which would not be included under ODA at all because there is no grant element in it, and it would have to have a grant element to be ODA.

It is sad that we should be ignoring flexibility and insisting on a rigidity that will exclude development of the most effective new instruments for the eradication of poverty and for helping poor people and development processes throughout the world. That is why this amendment, like the last one, would give flexibility and help in our aid efforts and not hinder them.

[Viscount Eccles]

My Lords, Clause 3(2) states:

“Accordingly, the fact that the duty in section 1 has not been, or will or may not be, complied with does not affect the lawfulness of anything done, or omitted to be done, by any person”.

It seems to me that this means that the promoter of the Bill recognises that there has to be some flexibility. If this clause does not provide flexibility, I am not sure what it is for. I would be grateful if I could be told how I am expected to explain this in the bar of the Black Bull, if I am asked, without the other members in the bar of the Black Bull saying, “Oh well, that is typical political behaviour. Now you see it, now you don’t. Now you’re going to do it, now you’re not. All you do is put a provision in a Bill and then in an Act of Parliament which lets you completely off the hook”.