International Development (Official Development Assistance Target) Bill

Lord Lawson of Blaby Excerpts

Friday 6th February 2015 Lords Chamber

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[Lord Lawson of Blaby]

1*: Clause 1, page 1, line 2, leave out first “the” and insert “a”

[Lord Lawson of Blaby (Con)]

My Lords, I regret and apologise for the fact that I was unable to be here in the House for the Second Reading of this Liberal Democrat Private Member’s Bill. However, my regret is somewhat tempered by the fact that contributions were limited to five minutes. This is a very important subject; it is an extremely complex subject; and there is no way that justice can be done to it in five minutes. So I hope that we shall have a little bit more time today.

It is a thoroughly bad Bill. It represents the triumph of gesture politics over good government.

[The Countess of Mar (CB)]

My Lords, I hope that the noble Lord will not mind me interrupting, but this is Committee stage and, although the noble Lord did not come for the Second Reading, I hope that he is not going to make a Second Reading speech and that he will attend to the amendment in hand.

[Lord Lawson of Blaby]

I am speaking to the amendment. It is a very modest amendment: it just introduces the word “a”. The purpose of the amendment is to give the Secretary of State slightly greater flexibility which can be used in the light of changing circumstances as they evolve in the future. That is clearly desirable.

It is one of a number of amendments and I must explain to the noble Countess why it is necessary to look more broadly. A large number of amendments are down on the Marshalled List, which noble Lords will have recognised. None of them is a wrecking amendment. They are all designed to make the Bill somewhat less bad. I hope that that is a proper exercise for this Committee to be engaged in.

Noble Lords will have noticed that pretty much all the signatories to the amendments on the Marshalled List were members of the Economic Affairs Committee of this House under the excellent chairmanship of my noble friend Lord MacGregor when we produced our report in 2012 on the economic effectiveness of development aid. We produced a unanimous, all-party report based entirely on the evidence, which was overwhelming. I reassure the noble Countess that I am not going to make this speech on each of the amendments, but this is the first one and it is necessary to explain why we have put down all these different amendments to try to make the Bill slightly less bad.

The Economic Affairs Committee report had a number of findings. First, it found that the 0.7% target should not be a plank, let alone the main plank, of British aid policy. Secondly, it found that the,

“Government should therefore drop its commitment”,

to establish in law the requirement to spend 0.7% of GNI on aid. Thirdly, it found that,

“the evidence that aid makes a contribution to growth in recipient countries is inconclusive”.

But aid certainly makes a great contribution to corruption in recipient countries. This is a major problem which comes up time and again and was most recently identified in the report of the House of Commons Public Accounts Committee earlier this week.

Since this is a Liberal Democrat Bill, if the Committee will allow me, I will quote from a letter written to me by—

[Baroness Manzoor (LD)]

My Lords, this Bill has cross-party support.

[Lord Lawson of Blaby]

We will see about the support. I am sure my noble friend is right that there different views in different parts of the Committee, but it is significant—and I repeat this since perhaps she did not hear—that the Economic Affairs Committee of this House, which took extensive evidence on this, produced a unanimous all-party report with the conclusions that I summarised a moment ago.

[Lord Purvis of Tweed (LD)]

I apologise for intervening on my noble friend. After five minutes he is obviously gearing up to begin his arguments. His amendment states,

“leave out first “the” and insert “a”.

That would change the wording of the Bill to:

“It is a duty of the Secretary of State to ensure that the target for official development assistance”.

Does he actually mean to delete the second “the” in that sentence rather than the first “the”. Can he clarify that for the benefit of the Committee?

[Lord Lawson of Blaby]

My noble friend is absolutely right. It is the second “the” that I seek to change. I am most grateful to him and I will be grateful for any further interventions that he may wish to make.

I will for his benefit read out a letter from the former Liberal Democrat mayor of Guildford. He is interesting in this context because he was for many years a senior official in the ODA, which was the predecessor of DfID, and he has maintained a continued interest since his ODA days in the aid programme in its reality. He writes:

“I would be prepared to brief anyone who needs to be convinced that there is a now a massive misuse of our aid programme—most recently in Ghana, Mozambique, Nepal, Malawi, Uganda, Rwanda—not to mention Nigeria, Kenya or Pakistan—to which must be added the transfers to the IBRD and other organisations in excess of our obligations to them”.

The corruption issue—

[Lord Avebury (LD)]

The noble Lord said that he was not going to make a Second Reading speech, and that is exactly what he is doing.

[Lord Lawson of Blaby]

I am making a speech which puts the context, which is essential for all the amendments on the Marshalled List. I am sorry that noble Lords are terrified of the argument. They realise that this is an absurd Bill. They are not prepared to listen to any arguments against it. Noble Lords will want to read the report of the Economic Affairs Committee. We have ample evidence of all the corruption there is.

Let me make two things absolutely clear. First, we are not discussing humanitarian aid. My view is that it would be good for us to do more than we do at present in humanitarian aid, but 90% of the British aid programme is so-called development aid, and that is what we are debating today in this Bill. Secondly, I am not at all opposed to the great cause of alleviating poverty in the poorest countries of the world. Indeed, I have always been strongly supportive of that and was lucky enough to be in a position to do something about aid. Some noble Lords will remember the so-called Toronto terms of 1988, which were called the Toronto terms because they were finally agreed at the G7 summit in Toronto. Their aim was to give debt relief to the poorest of the poor countries.

[The Countess of Mar]

The noble Lord is not listening to the Committee. Will he please address whichever “the” or “a” it is in line 2, give us a reason to change it and then sit down?

[Lord Lawson of Blaby]

The reason for changing the Bill in this way to make it less bad is the contents of the Bill. The contents of the Bill are highly relevant. If I may quote—

[Lord Spicer (Con)]

I have a question which is directly relevant to the amendment. Yesterday, I was told that we cannot ring-fence the defence budget. What is the difference between that and ring-fencing the foreign aid budget?

[Lord Lawson of Blaby]

That is a question for the promoters of this Bill, not for me. However, it is certainly a good question. I am not in favour of any kind of ring-fencing, whether it is aid, defence or anything else.

In defence of my own record, let me refer to the definitive IMF study published in 1999 entitled, From Toronto Terms to the HIPC Initiative: A Brief History of Debt Relief for Low-Income Countries. There it states—

[Baroness Royall of Blaisdon (Lab)]

This has absolutely nothing to do with the Bill. The noble Lord may have a very fine record—I would question some of it—but it has nothing to do with the Bill before us today.

[Lord Lawson of Blaby]

I am talking about debt relief for low-income countries. This is just prolonging the debate. I do not wish to prolong it but it is being prolonged as a result of the interventions. The IMF study states:

“1987 marked a watershed in the financing of LICs. In April, Nigel Lawson, then UK Chancellor of the Exchequer, launched the first of what proved to be a series of UK LIC debt Initiatives by arguing that Paris Club rescheduling for the LICs should be at below market rates of interest. Thus, for the first time it was proposed that reschedulings of commercially priced ECA debt should involve a reduction in the present value of the debt outstanding”.

[Lord Foulkes of Cumnock (Lab)]

The noble Lord, Lord Lawson, and I used to be Members of the other place. Does he recall that if he had tried this tactic there, the Speaker would have ruled him out of order?

[Lord Lawson of Blaby]

That is a bit rich coming from the noble Lord.

[Lord Foulkes of Cumnock]

The noble Lord is absolutely right.

--- Later in debate ---

[Lord Purvis of Tweed]

I not only respect my noble friend but acknowledge the point that he makes. However, I will refer him to the Hansard of the Second Reading debate; I feel that I covered his point in detail there. I refer him not only to my speech but to that of his noble friend Lady Chalker of Wallasey. She said that,

“it is critical that people know from year to year how they are going to be able to finance projects. One of our great nightmares was that we never knew how much we were going to have”.—[Official Report, 23/1/15; col. 1523.]

Not only does the UK’s acceptance of the obligation mean that we have continual year planning; now that we have met the target, the question is its effective delivery, not concern about the level of support for the international aid budget in future. Because we have this international obligation and undertaking as a proportion of GNI, we have worked in recent years to ensure that our processes can be as robust as possible and that meeting the target can also be done in a sustainable way, with predictability for those who we need to provide support for, and with proper public and parliamentary scrutiny. Since my noble friend’s report in 2012, a considerable level of work has been done, not only on parliamentary scrutiny but on the functioning of the Independent Commission for Aid Impact, now with over 40 reports, some of them critical of the department but many of them constructive. That is how we would expect an independent commission to carry out this role.

I do not think that anyone who supports the Bill would query at any stage that it is a complex budget in a circumstance where many areas of its delivery are the worst scenarios that you could possibly imagine for delivering a budget—war zones, areas where Governments are not functioning and so on. However, the NAO report, the OECD peer review, the Commons committee and the Independent Commission for Aid Impact all now have a serious body of work, done since 2012, that I genuinely think addresses the main considerations of my noble friends’ reports.

The question of whether it should be “a” or “the” in the first element is for the mover of the amended amendment to address. However, the substantive points made by my noble friends Lord Howell and Lord MacGregor have been addressed since the report. That is why, while of course we would value his contributions later in the debate, if we take him at his word that these assurances and the work that has been done since his report have been taken into consideration, I respectfully ask him not to press his amendments, and I ask my noble friend Lord Lawson not to press his.

[Lord Lawson of Blaby]

My Lords, we have had an interesting debate so far. I would like to reply to some of the points that have been made, not least by my noble friend Lord Purvis, who has just sat down. First, though, I thank the noble Lord the Lord Chairman of Committees for his very helpful clarification of precisely what it is that we are debating in this amendment. The question of the amendment goes deeper, though, because what it is about—some of the later amendments are also about this—is introducing a degree of flexibility into the Bill. The reasons why that is necessary have been set out very well by the noble Lord, Lord Butler, and my noble friend Lord MacGregor.

It is quite impossible to debate this amendment without explaining why it is that, for a good Government, a degree of flexibility is necessary. The fact is that the 0.7% target is an anachronism. As my noble friend Lord Purvis mentioned, it was set in 1970, but the world has changed dramatically since then. What has changed it most is, in a word, globalisation: that is to say, the huge increase in both trade flows, which are the most important aspects for the developing world—I am strongly in favour of reducing barriers to imports from the developing world; that is what it needs and that is what we should do for it—and the huge increase in private capital flows, which my noble friend Lord Howell mentioned, and which are vital. Today, totally unlike the case in 1970, ODA is only 1/10th of the total amount of capital flows to the developing world. As the distinguished development economist Paul Collier said in evidence to us, aid is now “almost a sideshow”, although as my noble friend Lord Forsyth and others, and indeed our report, have pointed out, it has a much bigger effect on the extent of corruption in the developing world, for which the evidence is incontrovertible. One noble Lord has already mentioned the report by the House of Commons Public Accounts Committee on the so-called Private Infrastructure Development Group, which was produced this week in only the latest example.

There is a more fundamental problem about the 0.7% target, and it is development aid. I should respond to the very impassioned contribution from my noble friend Lord Fowler: this is not about humanitarian aid. As I said in my opening remarks, I believe that the case for increasing humanitarian aid is strong. This is about so-called development aid, aid for economic development, which is 90% of the DfID budget while humanitarian aid is a tiny part. Humanitarian aid needs the support of Governments; it is not exclusively for them, as charities and churches do good work in this area, but it is still a very strong responsibility of government, whereas capital flows, as my noble friend Lord Howell said, are now overwhelmingly private capital flows. The 0.7% target is therefore completely obsolete. That is no doubt why no other major country has the slightest intention of observing it. The G7, which consists of the major economies of the world—

[The Countess of Mar]

My Lords, I am afraid the noble Lord is slipping into Second Reading mode again. Would he kindly address the amendment?

[Lord Lawson of Blaby]

This is the necessary background to the amendment. I repeat what my noble friend Lord MacGregor said: it is not my intention to go over this in the course of subsequent amendments. If it is felt better to take more time in subsequent amendments—if that is the will of the House—I will do so, but that is not my intention. I think it is more coherent, a more efficient use of time and more helpful to the House if the argument is made on this, the first amendment that we are discussing today.

As I say, I know that the noble Countess obviously does not want to hear this, but I am afraid that it is a fact that in the G7 countries, the amount of aid that the other six give ranges from 0.4% in the case of France and Germany to 0.2% in the case of Italy and the United States. None of them has the slightest intention of increasing that, and certainly they have no intention of making it legally binding.

--- Later in debate ---

[Lord McConnell of Glenscorrodale]

Will the noble Lord accept that the noble Lord who is proposing the Bill showed some respect to the House in summing up the debate very briefly and not repeating arguments that had been made at an earlier stage—instead referring noble Lords to read those arguments from the report of the Second Reading and other debates. Will he please show the same respect?

[Lord Lawson of Blaby]

I was not repeating myself in the slightest. I was making a number of additional points which are highly relevant to the Bill, to this amendment and to subsequent amendments. However, I will draw to a conclusion to allow other noble Lords to take part, if they wish to, in the debate.

The question is, which is more important: good intentions or good outcomes? I know that those who are keen on the Bill as it stands have the best intentions—I do not deny that for a moment. I know that people who support it are certainly well intentioned. Alas, however, as Members of one of the two Houses of Parliament, we have to consider not what the intentions are—I think we are all well intentioned; most of us have good intentions, whatever side of the House we are on—but what are the likely outcomes. If the outcomes are damaging—which they are in the Bill as it stands—the fact that they are well intentioned is no help at all.

In conclusion, we are very privileged to have the noble and right reverend Lord, the former Archbishop of Canterbury, among us. He knows what the road to hell is paved with.

It is the custom in this House for there to be few Divisions on amendments—they can come at a later stage, when we come to Report. At this stage, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

--- Later in debate ---

[Baroness Northover]

I am sure that my noble friend Lord Purvis will address this issue. It is a Private Member’s Bill and the Government support it as it stands, unamended.

[Lord Lawson of Blaby]

I hope very much that my noble friend Lord Purvis will give a full and complete answer to the important question which my noble friend Lord Forsyth has just put. As to what the Minister said, I find myself wholly unconvinced. She did not seem to understand the purpose of these amendments.

Before I comment on that, I must respond to the impassioned interventions of the noble Lord, Lord Cashman. He was concerned about how the reluctance to pass the Bill, almost sight unseen, will be considered outside the House. He made an emotional speech. It is true, as I said, that the Bill is a triumph of gesture politics over good government. How it is seen outside the House I do not know, but I am not aware of overwhelming popular support in the country for the Bill. Indeed, my impression is that it has minority support. However, leaving aside the question of whether you believe gesture politics is more important than good government, our responsibility as a House is with good government and we should not be diverted from that. Whatever misleading remarks the noble Lord, Lord Cashman, may care to make, it is our responsibility to promote good government, and that is the purpose of these amendments.

[Lord Forsyth of Drumlean]

On the point of creating impressions, my noble friend might be interested to know that the noble Lord, Lord Cashman, has just tweeted:

“Lord Forsyth clearly enjoys fillibustering and denying with weasel words the needs of the poorest”.

[Lord Lawson of Blaby]

That is disgraceful. No doubt the noble Lord, Lord Cashman, will want to withdraw his tweet. I am not sure how you “untweet” or “detweet”, but I am sure he will wish to do so. I am afraid I am not sufficiently technologically proficient to advise him on this matter, but I am sure he knows all about it.

Turning now to the remarks of the Minister, I wish to deal with three points in particular. First, she made a great defence of her department, DfID. I have to say that she has half a point here. If one looks at the various aid agencies around the world, DfID is probably one of the best. However, part of the problem is that a large proportion of British overseas aid is handled not by DfID but by multinational institutions, in particular the United Nations and the European Union—and all the evidence we have indicates that neither of those institutions has anything like the robust high standards to which DfID aspires. That is a major problem, and of course the more ODA is increased, the greater the problem becomes.

--- Later in debate ---

[Lord Lawson of Blaby]

My Lords, I am very sorry for the cause of the disturbance. I hope the noble Baroness who had the slight accident is making a full recovery.

I will close by saying that I cannot accept for a moment what my noble friend the Minister said about how, if we had a five-year flexibility, that would put us at odds with the rest of the world, which accepts a one-year thing. The rest of the world is not doing 0.7%, as I pointed out. It is doing very much less. It does not want to make it legally binding. I have to say of my noble friend’s final remark—that we have to do this to influence and persuade the rest of the world to follow our example—that this is a post-imperial spasm of the worst kind. There is no way that the United States, to take one country at random, will say, “My goodness me, look at this wonderful Bill that the British Parliament has enacted. Therefore, we will do the same”. It has not the slightest intention to do that. Our leadership must be based on a number of factors—rather, our influence; alas, it is not as much leadership as it once was. But one thing our influence must not be based on is other countries saying that because we have passed this Bill they will do the same. That is nonsense. It is as well that we live in a world of reality and not the pipe dreams which evidently are the world in which DfID lives.

[Lord Purvis of Tweed]

My Lords, I also reinforce the concern for the noble Baroness. We have had an hour on this group and even after that hour I am not any clearer as to what the movers of these amendments mean by “spread” or “average” over that five-year period. Indeed, after the very detailed explanation by the Minister, it is perfectly clear that these amendments would inhibit our ability to have better annual budgeting and programming, not only as part of the OECD DAC mechanisms but also with the relationship between DfID, the Treasury and those that, on our behalf, scrutinise their work in the NAO and publish data in the ONS.

Indeed, the long contribution on the NAO report—it seemed that this was a debate on that report rather than the amendment—fundamentally conflated two aspects of it. Paragraph 7 of the NAO report clearly indicated that the report is in two parts. One is the ODA target and the second is the large increase in its budget for us to meet our historic obligation to satisfy that. What stretched from that was a false conclusion that diluting the Bill would somehow enhance that ability.

Two points were specifically raised in the debate, so let me address them. One was: do we have an annual obligation and is that appropriate? As noble Lords who may not have been here for Second Reading but who have had the opportunity to read the debate will know, I was perfectly clear in citing the Pearson commission more than five decades ago, which analysed the benefit of both the concessional and direct flows of aid which was then replicated in an annual obligation.

[Lord Lawson of Blaby]

I have just one very small point. I simply do not understand why my noble friend cannot grasp that a five-year target must allow more flexibility than one for one year. Does he think that if we have a six-month target, that would not mean less flexibility, or would it mean more, by his argument?

[Lord Purvis of Tweed]

My noble friend again conflates two aspects. One is that we are not dealing with annual programmes or annual work. Much of our work with multilateral partners is long term. Long-term programmes require long-term funding. Secondly, we operate within parliamentary budgets, so we have to have annual reporting in the Budget to Parliament to scrutinise it. Having the two together is not easy. Michael Moore and I accept that that is not easy. I cannot do any better than refer back to the speeches of my noble friend Lord Fowler and the Minister.

The final technical point made by my noble friend Lord Forsyth concerned the legal duty on Ministers. I think that the Bill is perfectly clear. It was outlined in the Commons scrutiny of the Bill. It is perfectly clear what the duties on Ministers are. It is also clear in Clause 3, entitled “Accountability to Parliament”, what are the duties on Ministers of accountability to Parliament.