International Development (Official Development Assistance Target) Bill

Lord Lamont of Lerwick Excerpts

Friday 27th February 2015 Lords Chamber

[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.

[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.

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[Lord Lipsey (Lab)]

My Lords, I very much regret that I was not able to be here to move this amendment in Committee, but I am delighted to say that the noble Lord, Lord Forsyth—as I would have expected—did that job much better than I could have done. I certainly do not intend to detain the House for longer than I need, as it would be a better use of its time to read his magnificent speech.

The amendment is designed to increase the flexibility of the one-year programme so as to avert the danger that the money will be rushed out to hit the target in one year and that there will not be enough to hit the target so easily the year after. It is intended to avoid waste, to provide ministerial flexibility and to help in the management of our national budgets.

As I said, I do not intend to expand on that theme for long but I want to deal with one argument which was put very powerfully this morning by my noble friend Lord McConnell and which appeared very much in the debate at Second Reading. The argument is that the Bill will set the quantity of aid, enabling us then to focus on the quality. I will not address the second half of that—the quality, which comes up in other amendments. I just caution the House against thinking that the Bill will in practice set the quantity, and I do so by reference to Ireland. A report states that at the millennium summit in 2000, the Taoiseach announced a framework for reaching the UN target. It was to be attained by the end of 2007. In 2005, the target was adjusted to 2012. According to a subsequent OECD peer review, that deadline was extended again to 2015, but this has also been missed. Now, according to that authoritative source, the 2015 target is also going to be missed.

In other words, you can set these targets, and you can even enshrine them, as the Bill does, in legislation. You can insist that each year the Secretary of State gives an explanation to the House if the target has not been met; nevertheless, the targets do not easily hold, and if economic imperatives dictate otherwise then we will find that they do not hold. I would be pretty willing to have a fair bet with anyone in this House that within the next 10 years there will be one or more such occasions when they do not hold. The debate over quantity will inevitably persist while there is pressure on public expenditure and there are competing programmes.

I am realistic enough to know that this amendment is unlikely to be accepted today. However, it would be comforting and would help to bring the House together if the Minister could indicate that the Government are not without sympathy on the point about flexibility. It would help if they could indicate that, within the terms of the legislation, they will be prepared to look at this flexibly and will not allow something stupid such as a last-minute rushing out of the money through the door—as I am afraid happened last year, according to the independent National Audit Office reports—and that they will manage the Bill so as to minimise any possible ill side-effects from what is generally agreed to be a desirable thing; namely, effective overseas aid.

[Lord Lamont of Lerwick]

My Lords, I support the amendments in this group, which give effect to the target being achieved over a five-year rather than an annual period. I do so because I believe that that would give much needed flexibility in meeting the target. If there were flexibility, that would lessen what some of us perceive as the perverse incentive of the target—rushing projects towards the end of a year in order to meet the target within a year. It is much more likely that the money will be more effectively spent if that happens over a period of years.

The noble Lord, Lord McConnell, has already rather anticipated these arguments. He said that—this was his reason for voting as he did on the previous amendment —he felt that the target of 0.7% of GDP gave greater certainty. That was, to some extent, supported by the arguments of my noble friend the Minister. However, I am deeply puzzled by the argument that having a target of 0.7% creates certainty or will give greater confidence about how the money will be spent. Meeting the target of GNI or GDP will not be that easy. It would be easy if we were certain what GNI and GDP were going to be. However, as everybody knows, economic data are subject to constant revisions. There is uncertainty about the future during the year when you are trying to determine what your target is a percentage of and you have to rely on economic forecasts. However, there is not just uncertainty about the future; there is uncertainty about the present and—dare I say it?—about the past. These statistics are constantly being revised. Noble Lords will recall our famous double-dip recession—there was great excitement on that side of the House that it was occurring. A few months later it had been revised out of existence by the statisticians.

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[Lord Purvis of Tweed]

I am grateful and I have been listening very carefully to my noble friend. Perhaps he could clarify to the House what he means by “over the period” of five years. Is it that we would meet it once in every five years? Is it an average over five years? Is it rolling over five years or is it in each year of those five years? Will he clarify his understanding?

[Lord Lamont of Lerwick]

It is not intended to be each year of the five years but an average of or a rolling over the five years. That is what I suggest. Of course, we would be open to amending the amendment if my noble friend chooses to give us his support. The confusion which can be caused by the different outcomes of GNI is also recognised under Clause 2(2)(a), where,

“under section 1(4) of the 2006 Act”,

it is possible for the Secretary of State in a subsequent year—this could be years later if it proves that, because of revisions of GDP, the target it was thought had been met had not in fact been met—to make a subsequent statement, which would not refer to the current year but to years gone past. Of course, one might have a whole series of statements where one year it was thought that the target had been met and then the next year it was thought that the target in the previous year had not after all been met. You could go on contradicting yourself year after year because these statistics bob around on a very thin margin which could easily affect the 0.7% one way or another. That is why I say to the noble Lord, Lord McConnell, and others that the idea that the 0.7% gives certainty is somewhat fallacious and not very profound. Those are the external factors.

More importantly in terms of policy and what we are trying to achieve in debates around this issue, there may be factors other than external factors which affect whether the target was not met. These could be that projects were not ready or that there was not enough time to get them ready, However, if we want to place a premium on management, rather than just meeting the target on outcomes rather than input, again I suggest that that would be greater if we looked at this target not in one year but over several years. If we looked at it over several years, it would remove the incentive which came to light in Committee to hand over cash to multilateral institutions simply in order to meet the target. Although, as we learnt in Committee, it would take on average two years before the money handed over to a multilateral institution is spent, for the purpose of meeting the target it counts as though it was spent. Therefore, in any year, if you are not getting near to the 0.7%, there would be a tremendous incentive just to hand the money to a multilateral institution in order to say that the target has been met.

It also seems to me that the way in which the 0.7% works is that there will be a great incentive to spend money rather than to economise or to manage it efficiently. There is no way to claw back money in years in which there is an overspend. If the target is exceeded—if it is 0.8% of GDP—there is no way in which that money can be recouped. Therefore, the fear of the department will never be of overspending, it will always be the risk of underspending and, therefore, it will tend to overspend. For all those reasons, the amendment put forward by the noble Lord, Lord Lipsey, would be conducive to good management of the budget and thoroughly consistent with the aims of the Bill as put forward by its promoters.

[Lord Brooke of Sutton Mandeville (Con)]

My Lords, this debate is essentially about flexibility, and this measure is essentially one which has been brought forward by Members of the Liberal Democrats. I wish to say a brief word about my relations with their party. Before anyone accuses me of making a Second Reading speech let me say not only that I could not make a real Second Reading speech at Second Reading but also that my relations with the Liberal Democrats are an essential part of my contributing to this particular amendment.

In the 183 years since the Great Reform Bill—which amounts to six generations, at 30.5 years each—six members of my family, one per generation, have served in the House of Commons, the first four being Liberals and the final two being Tories. The first was Member for the Southern Division of Northumberland. He was said to be the richest commoner in England, and he was presumably a Whig. It was perhaps apposite for what was then essentially an Irish family that the second MP was the MP for Armagh, a niece of his having married into the Brookeses.

The third Member was my great-grand-uncle, the son of the richest commoner in England. He entered Parliament as a Liberal MP for Wakefield.

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[Lord Lawson of Blaby]

My Lords, when the noble Lord, Lord Butler, introduced his excellent amendment, he prefaced it by saying that he was strongly in favour of the 0.7% target. I will preface my brief remarks by saying that I am not in favour of the 0.7% target and that I am not alone. In an earlier debate, one noble Lord mentioned the role of Select Committees in all this. The only Select Committee of your Lordships’ House to have looked at this issue in great detail is the Economic Affairs Committee, which, under the chairmanship of my noble friend Lord MacGregor, produced a unanimous report. It was unanimous because the evidence was so strong that 0.7% should not be a plank, let alone the plank, of the Government’s policy in this area and that least of all should it be enshrined in legislation.

What I am in favour of is economic development, and particularly of helping the poorest countries of the world, and the poorest people in those countries, to have a better standard of living. We received evidence about the role that ODA played in that process, and I am glad to say that since this ridiculous target was first suggested in the 1950s and then agreed by the United Nations in 1970, the world has changed. One of the great changes is that there has been an improvement in the countries of the so-called emerging world, and it has not been due to overseas aid. As my noble friend Lord Howell mentioned, there are other things that are far more important, although when my noble friend the Minister replied, she seemed to be totally unaware of this. She said, “Of course there are other things; DfID and other government agencies are doing this and doing that”—but it is not government agencies, it is the expansion of trade and, above all, the massive expansion of private capital flows to these countries that have made the change.

[Lord Lamont of Lerwick]

Would my noble friend also agree that the whole phenomenon of remittances has played a major part in development, perhaps even more so than investment per se? The value of remittances is several times that of official aid.

[Lord Lawson of Blaby]

It is certainly true that remittances are important, but I was including them in private capital flows, because remittances are one example of them. There is also a great deal of business investment in these countries. That is what is making a difference. There are other things, too, such as better governance. The so-called failed states, which are riddled with corruption, are a real problem, as noble Lords on both sides of the House are well aware—as DfID is well aware and as the evidence that we had on the committee pointed out very clearly. However, the problem of corruption is not going to be solved by dishing out 0.7% of GNI on overseas aid.

Because this is so absurd, I welcome, in general, Clause 2, to which this amendment refers. The clause makes it quite clear that this is not really a serious commitment at all, because all that the Government have to do, if the 0.7% target is not reached in any year, is to lay a Statement before Parliament saying why it has not been reached. This is what my amendment relates to. The clause gives three reasons that the Government can give in telling Parliament why the 0.7% has not been attained, which are,

“economic circumstances … fiscal circumstances and … circumstances arising outside the United Kingdom”.

Noble Lords might think that is pretty comprehensive, but it is not completely comprehensive, which is why I have added one further condition—there are two further conditions, but one in particular belongs to this set—which has been alluded to, very rightly, in some earlier contributions today. It refers to,

“circumstances where meeting the 0.7% target would lead to excessive spending towards the end of a calendar year”.

That is separate from overall economic circumstances, fiscal circumstances or things happening overseas that have affected the picture.

We know that this is a problem. The NAO was extremely critical of it only last year. If you have to shovel stuff quickly out of the door, it will not have the same value-for-money scrutiny that DfID tries to ensure throughout the year on everything it does. I commend DfID for its attempts to get value for money so far as that is possible in this area. It is far better than any other national aid agency in doing that. It is certainly better than the multinational organisations—the United Nations or the European Union. We discovered that in the evidence we took. But of course the incentive will be to shovel it out to, say, the United Nations in order to hit the target. Therefore, this should be as good and real a reason as the other reasons that are listed in the Bill—economic, fiscal and overseas events—why the Minister should go to Parliament and say, “That is why we have not achieved the target, because to do so would have meant shovelling a large amount out at the end of the year without adequate scrutiny”.

The other condition that I am asking the House to accept is,

“circumstances where anything outlined in paragraphs (a) to (d) is likely to persist”:

that is, economic, fiscal, overseas, and (d), which is my suggestion that it would require too much money to be shoved out quickly to meet the end-year target. This really concerns Clause 2(4), where the Secretary of State also has to inform Parliament of what steps are going to be taken to ensure that the target will be met in the subsequent year. This is even more absurd—we are even more in Alice in Wonderland territory. How on earth can the Secretary of State for Industrial Development—and I have a high regard for the present incumbent, my right honourable friend Justine Greening— ensure that,

“circumstances arising outside the United Kingdom”,

are not going to continue to make the achievement of the target difficult? It is a complete absurdity. Therefore, to try to minimise the absurdity slightly I have suggested this amendment. I beg to move.

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[Lord West of Spithead (Lab)]

My Lords, I have put my name to this amendment and I support it. I should add that the noble Lord, Lord Dannatt, has also put his name to the amendment but has asked me to say that he unavoidably cannot attend today, and to mention that he had raised this very issue in Questions earlier in the week.

Defence and security of the nation, as has been said by the noble Lord, Lord Forsyth, are the first responsibility of any Government. Indeed, the Prime Minister has said so, as did the Prime Minister before him and the Prime Minister before him. But in 2015-16, the next financial year, defence spending is on track to fall to 1.88% of our GDP. This is the lowest percentage of our GDP in 25 years, yet we are in a highly dangerous and chaotic world.

In that highly dangerous and chaotic world, defence spending has been reduced by 8% since 2010 through a lot of the measures that the noble Lord, Lord Forsyth, mentioned. A recent study by the International Institute for Strategic Studies shows that the United Kingdom’s military capability—our capability to do things—has reduced by more than 20% since 2010. That is more than a fifth; which is an incredible reduction in our military capability. We are standing into danger—I apologise for using a nautical term but that is what you say when you are about to go on to the rocks—and I think we should be afraid. Our forces have not just been cut to the bone; they have been cut into the bone. Our military now is unable to do what the people of our great nation expect it to be able to do. The noble Lord, Lord Forsyth, mentioned a submarine to the west of the UK. Our inability to prosecute that properly is a dreadful indictment of what has happened to our forces.

If our defence forces are incapable of defending our nation, its people and its interests worldwide then to be quite honest welfare, health, education and foreign aid are as naught. They become irrelevant if we cannot do those other things and, ironically, in many parts of the world where DfID is working it can do so only courtesy of the military. As has been said, the Government made it very clear at the NATO summit in Wales that the European nations of NATO should spend a minimum of 2% of their GDP on defence because of the threats that there were, which are now seen rising within the European theatre, let alone worldwide. Indeed, the Secretary of State for Defence has referred to a “real and present danger”.

One would like to think that the Government believe that the UK should do the same as it has told all these other countries to do, yet almost every statement and action by this Government since the NATO summit seems to indicate that the Chancellor wishes to renege on that promise. I can of course understand the problem that he has. As a result of multiple ring-fencing of budgets, his room for manoeuvre over the allocation of sufficient funding to departments is seriously curtailed, right across government. Indeed, ring-fencing has a lot of unintended consequences and is not necessarily a clever thing to do.

For this reason, if we are going to ring-fence I believe that it makes absolute sense to link the ODA to the defence budget so that as the noble Lord, Lord Forsyth, says, we can show that defence is more important —because without the defence, we cannot have an aid budget. This amendment would assist the Government in meeting their promise of spending 2% of GDP on defence. For that reason, it is a very sensible and proportionate amendment, which would enhance the security of our nation and therefore enable us to continue to provide aid into the future.

[Lord Lamont of Lerwick]

My Lords, I support this amendment and what has been said by my noble friend Lord Forsyth and the noble Lord, Lord West. I do not believe in hypothecation of expenditure but given that the Government believe in the hypothecation of defence expenditure, and the problems referred to by the two noble Lords who have spoken, why are the Government blocking the Defence Expenditure (NATO Target) Bill in the House of Commons? That Bill specifies the ring-fencing of defence expenditure so as to meet the 2% target. Why meet it for overseas aid but not have a Bill to enshrine that, too, in the legislation which the Government are blocking in the House of Commons?

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I hope therefore that my noble friend the Minister will, on reflection, say that she can accept either the amendment moved by the noble Lord, Lord Hollick, or the one that I have tabled—which in effect is not mine but came from her right honourable friend Michael Moore—because one or the other is essential.

[Lord Lamont of Lerwick]

My Lords, as my noble friend Lord Lawson has said, these are two amendments aimed at the same target. This issue of accountability and evaluation of the aid programme is very important for several reasons: first, because of the big increase in the amount of aid; and secondly, as the noble Lord, Lord Hollick, said, echoing what was said in the House of Commons, in order to reassure the public that value for money is being preserved.

As the Bill stands, there seems to be a lack of accountability. This is in essence a public relations Bill. It is gesture politics. We all know that the target of 0.7% can be met anyway. The Government have met it. They do not need the Bill. The Bill does not add anything. What the Bill does is send a signal, which some noble Lords have supported; others are more sceptical about the value of the signal. But the Bill by itself does not authorise the expenditure. We still have to have estimates from the House of Commons. They still have to be voted on. The Bill has no sanction. It is an expression of good will, but that is not what Acts of Parliament are for. Of course, the Bill is not legally enforceable either.

We have two ways in which we move on to address the issue of accountability. My noble friend Lord Lawson has resurrected the independent international development office, which was in the original Bill and then removed. It is a bit of a mystery why it was removed but, in consequence, the Government are in a position where they can mark their own homework. They can write a report saying how marvellously they have done.

What I do not understand is why the ICAI is not mentioned in the Bill under the clause on evaluation. When Mr Desmond Swayne was speaking in the House of Commons on 5 December, he referred to the ICAI as,

“this independent mechanism that measures our aid, scrutinises it and ensures that it is of the highest standard. That will also be the body that will establish the independently verified figures”.—[Official Report, Commons, 5/12/14; col. 590.]

He seemed to be implying that the ICAI would do the job of evaluation. If so, why is it not mentioned in the Bill? Of course, it is a very small body. I think it has four commissioners and a small secretariat, so I do not know whether it really is up to the job, although it has a high reputation.

When addressing these sorts of questions in Committee, my noble friend the Minister—slightly in conflict, I think, with what Mr Swayne said—said that she did not feel that,

“tying that function to one particular agency is the answer”,—[Official Report, 6/2/15; col. 995.]

the function being accountability. But surely if you are looking for accountability and whether a programme is effective, it is much better to have one body to have a clear line of demarcation, and it is one body that should be responsible for saying whether there has been any distortion of or alteration in the effectiveness of aid by the great increase in the target. This is a very important amendment indeed.

I hope we might hear from the Labour Front Bench. I know that the Opposition support the Bill, but I am sure that they also support principles of accountability and transparency. It would be very useful to know the view of the Opposition on this amendment.

[Lord Collins of Highbury (Lab)]

I am sorely tempted now, after all this time. Let me reassure my noble friend Lord Hollick that, absolutely, accountability is vital to the Bill. We can be very satisfied that, as we have heard in every debate on every group of amendments, transparency on aid financing and the level of accountability is unique. ICAI has been doing a very good job. The fact that it has produced critical reports in recent times highlights its important role. I want to ensure that we develop its role and defend its responsibilities. I certainly want to ensure that we have a system of accountability that is robust and sustainable. I have every faith in the parliamentary accountability of ICAI through the development committee. That is why I am satisfied, and the party is satisfied, with the level of accountability on value for money and the impact that the spending has. However, for the avoidance of any doubt, if that independence or capability was ever brought into doubt, I assure my noble friend that we would not hesitate to legislate further to ensure that it is sustainable and robust.

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[Lord Purvis of Tweed]

My Lords, Amendment 22 is in similar terms to an amendment tabled in Committee, and Amendments 24 and 27 are new. Noble Lords will recall that in Committee we debated an amendment—at that point Amendment 25, tabled by the noble Lords, Lord MacGregor of Pulham Market, Lord Hollick, Lord Lawson of Blaby and Lord Lamont of Lerwick—which called for an independent inquiry into the independence, efficiency and effectiveness of the Independent Commission for Aid Impact. We then debated their concerns about the operation, and we now return to their call for that to be the statutory body. I do not believe that they have made a strong case to reconcile the two aspects of it today, either.

Let me address the contribution of the noble Lord, Lord Hollick, because I actually agreed with a large amount of what he said about the need for proper scrutiny. The Minister responded to all those points. The purpose of the Bill, however, is to create a requirement not only that there is independent evaluation—it is important for that to be in the Bill anyway—but that it is the duty of the Secretary of State to report how that independent evaluation is being carried out. These are two very significant powers that the legislation will be providing. They strengthen the existing process for the 2006 Act, which is now on the statute book. We have seen a number of the annual reports presented under the basis of that Act; they will be even stronger.

As the Minister indicated, the mechanism that we wish to assume would be in place is ICAI. The question is whether ICAI can carry out its functions as an advisory NDPB, answerable to this specific sub-committee of the Commons International Development Committee, or whether it is required to be on a statutory footing for the exclusive purpose of this evaluation. From my own position, I believe that it is not flexibility but good governance which allows the structure in place to be taken forward—with of course the view, as the noble Lord, Lord Collins of Highbury, indicated, that there is sufficient scope in future to improve that process even more. That will of course have to take place anyway in May 2015 because the memorandum of understanding between the Department for International Development and the Independent Commission for Aid Impact is due to be renewed, as is the framework agreement under which it operates and is accountable to Parliament.

I think that I should highlight this, because it may address some of the points which I think have been erroneously cited about whether DfID is effectively being judge and jury when it comes to evaluating this. The memorandum of understanding states very clearly that under its principles, in paragraph 2.1, ICAI should:

“Ensure independence of staff, decision-making and the process of undertaking evaluations, reviews and investigations”.

Further, in paragraph 2.5, the memorandum says that DfID should:

“Respect the independence of ICAI staff, decision-making and reports”.

Any change to that would have to be brought to Parliament—to the Commons IDC—which I have no doubt would be scrutinising it, in addition to the very fact that the renewal of this memorandum and the framework will be brought to Parliament anyway.

[Lord Lamont of Lerwick]

We are listening to the noble Lord with great attention and he has made powerful points about ICAI. But is it not fundamentally very strange and unsatisfactory that the Bill should reach this stage with the status and role that ICAI is to play not being crystal clear and with the Minister simply saying that it is “highly likely” that it will perform this function? That assurance is in complete contradiction with her other remark that we do not want one agency to do it. Surely this ought to be clear.

[Lord Purvis of Tweed]

I understand the point that my noble friend makes but the purpose of the Bill, as I indicated to the noble Lord, Lord Hollick, is to require the duty for independent evaluation to be carried out and then for the Government to state how that is carried out. It is the role of the Government then to provide that—