EAC Report: Development Aid

Lord Lipsey Excerpts

Monday 22nd October 2012 Lords Chamber

[Lord Lipsey]

My Lords, in view of the Whips’ guidance earlier, I will reduce my blog-length contribution to a tweet—which means that I will not be able to say all I would like to say about the committee chairmanship of the noble Lord, Lord MacGregor.

On the afternoon that we published the report, I was walking through the Lobby when a colleague and good friend came up, eyes blazing, and said: “David, you have signed the report condemning the 0.7% target. Do you not realise that it is party policy?”. I was not a very good target for that particular argument. I have spent more hours of my life than I care to recollect sitting in the kind of committees that create party policies—with a few eager but ignorant young researchers, the representatives of a pressure group or two, and the statutory mad professor. Quite often, what they come out with is stark, staring bonkers.

It would be quite wrong to argue that the 0.7% is stark raving bonkers. However, before we get too high-minded, we should remember how it came to be party policy. In 2005 in the Labour Party, we were rightly worried that Tony Blair’s Iraq policy was costing us the internationalist vote, to which we felt we were naturally entitled. The 0.7% commitment was partly in answer to that. When producing the 2010 Tory manifesto, David Cameron made it clear that the Tories were seen by some as the “nasty party”, and the 0.7% commitment was his answer to that. That is politics; I have been in it long enough to understand it. However, we should not elevate something that came about at least partly as a matter of politics into a great principle; we should look at the merits of the target, not at the fact that it is party policy or at the way in which it became party policy.

I will not go over all the arguments in the committee’s report; they are rather conclusive. I will emphasise just one point. To achieve this target, spending on aid will have to increase from £8.4 billion in 2010 to £12 billion in 2013—an increase of nearly 50% in three years. We know what happens when you increase public expenditure programmes very rapidly. We saw it with the health service. I strongly supported what the Labour Government did in greatly expanding spending on the health service—but now the evidence is in and it shows that what the increased spending greatly increased were the salaries of doctors and what it somewhat decreased was the productivity of the National Health Service.

If we were to abide by the 0.7% target, precisely the same thing would happen. Our aid programme—which, contrary to the view of the noble Lord, Lord Lawson, I believe to be a great force for good—would contain more corruption and more “get the money out of the door somehow and never mind what it is spent on”, and would do less for growth. It would supply opponents of aid with ammunition that they could scarcely dream of. What will the Daily Mail do when it gets into how that money is spent?

If I supported the view of aid of the noble Lord, Lord Lawson, which I do not, and if I were Machiavellian—and neither of us are—I would say that we should go to the 0.7%, because it would so discredit aid that no Government would dare to spend poor taxpayers’ money on that scale again. What is needed with aid is a gradual, well directed and well controlled increase at a speed that the countries and the projects receiving the aid can absorb. It can then be demonstrated that it has done good to those countries and the poor people in them. It is because I fear for the effects of this unrealistic target on aid and I fear even more for its effects on the likely public perception and attitude to aid that I believe it is mistaken.