EAC Report: Development Aid

Lord Phillips of Sudbury Excerpts

Monday 22nd October 2012 Lords Chamber

[Lord Phillips of Sudbury]

My Lords, I, too, thank the noble Lord, Lord MacGregor, and his committee for producing an extremely challenging and interesting document. It was not an easy document to produce. I agree more with the Government's response to it—like the noble Lord, Lord Hannay—but both documents are a great contribution to an informed public debate.

My own view of aid has been formed by circumstance. I was lucky enough in the 1980s to act as solicitor for some of the great aid charities, such as Oxfam, Save the Children, Action Aid and so on. I went on a field trip with Oxfam to Brazil to try to understand the realities of the delivery of aid, and I found, as the noble Lord, Lord Stern, hinted at the end of his remarks, that those realities were extremely challenging. Not enough credit has been given in the debate tonight to the extraordinary difficulty of getting aid to where it needs to go. The circumstances in some states are so chaotic, dangerous and lacking in any sort of infrastructure or organisation that there is an inbuilt risk that, whatever you try to do, it will in the end be frustrated. That is inseparable from aid in many of the most underdeveloped countries.

I also thank my son-in-law, a long-standing employee of DfID. He is currently in Tunisia, having just come back from Afghanistan. I have also visited my family in the Congo, where I again saw first-hand what redoubtable challenges have to be faced, day in, day out.

We need to be proud not only of DfID but of our great aid charities, because you cannot discuss one without embracing the other. They are true partners in most parts of the world: there are places where government can go in terms of aid, and there are places where charities can go. To collaborate as they do—and could do more—has been an essential aspect of the full impact of British aid in the third world. I emphasise that fact. The partnership is both complementary and doubles up the value of each.

We should never forget the huge voluntary input into the great aid charities. One is apt to assume that they are made up entirely of employees, but they are not—take Voluntary Service Overseas as an example. My son went out to central east India with Save the Children. There is a huge voluntary input of time, expertise and tenaciousness because it is extremely successful in tapping the great British sympathy for the underdeveloped world. A number of noble Lords have referred to the state of British public opinion. If there was evidence of huge cynicism about aid, one would be more worried about some of the conclusions in the report, but I do not think that is the truth. Indeed, a recent EU Commission survey of attitudes to aid in the different member states of the European Union shows that twice as many people in this country believe in the value and honesty of aid over those who are sceptical. That is not to say that one does not have to worry about certain media outlets or that a great deal more could not be done to uphold public faith in the aid system, whether governmental or NGO. One can and must.

I shall say a word about self-interest, which again has been referred to—very little has not by this time of night. The report makes it clear that aid is in our country’s interest. The self-interest runs deep because the impact of aid can be felt a long way downstream, and then diffusely. But I, along with many noble Lords who have spoken in the debate, have no doubt that the benefits to this country are clear both politically in terms of trade and, above all, if one can use that old-fashioned word, morally.

I want to raise two specific points on the report. First, I refer to paragraph 50, which sets out the seventh recommendation:

“It is important for donors to ensure that opportunities for corruption are as limited as possible by setting in place systems of audit and control as rigorous as local conditions permit”.

Thus far, I agree entirely with the report. It is very wise to take account of local conditions. However, the paragraph goes on by saying,

“and to withhold development aid altogether where corruption is rife”.

I cannot go with that because it seems to be a gospel of despair and casts off those most in need. It is rather like saying to the police, “Patrol the streets but don’t go into that very rough area where you might get into trouble”. The mark of the quality of our aid programme is precisely how we deal with the most bereft and abandoned parts of the world, so pulling out entirely seems utterly wrong. One suggestion I would make, although it may already have been implemented to some degree, is that where Government-to-Government aid is impossible because the recipient Government are so corrupt, one could use the NGOs as the almost exclusive delivery point of the aid we wish to give the country to help it out—remembering, of course, the policy priorities of DfID.

I have to reject that part of the report, and I am afraid that I also find the Government riposte that deals with administration rather wanting. Under the heading:

“Managing an increasing programme with a falling administrative budget”,

they say this:

“We are grateful for the comments provided by the Committee on this. We would like to reassure the Committee that cuts to the administrative budget will not hamper the focus on results or the struggle against corruption and explain why this is so”.

This is just the repetition of a delusion which, if one has been in this House for long enough, one comes across almost every month: the pretence that significant cuts can be made without any repercussions on the ground. I dare say it is possible occasionally, but in this field it is permanently impossible unless—which I am sure is not the case—we have idle and incompetent members of DfID looking at the question of administering the budget to ensure that aid gets to where it is meant to go.

We need much stronger enforcement of the laws that exist to discourage and punish corruption wherever we can. Your Lordships may remember the Act of 2000 which brought onshore criminal acts committed overseas which formerly were not prosecutable here. The body which reported on the Act about three years ago discovered that there had not been a single prosecution under it thus far. To rely on the Serious Fraud Office effectively to police this part of our law is hoping for too much because it has had serious cuts. I have been in touch with the gentleman who runs the Serious Fraud Office. It is at its wits’ end to know how it can deal with crime onshore, let alone crime offshore. I hope that when the Minister comes to sum up she may address some comments to the importance of at least enforcing the laws that we have—the bribery law which we recently passed through this House and so on. Let us not forget, and any lawyer will tell you this, that there is no more difficult area of law to enforce than anything to do with financial corruption. One has only to consider the way in which capital moneys are shifted around the globe in blatant disregard of laws not of one land but of many. Aid has become a playground of crooks and shysters and their expensive advisers. Let us not pretend that we do not have to put resources into ensuring that this aid gets to where it has to go. If that means a form of process conditionality on aid, I for one would say let us have it. Let us have an agreement by recipient Governments that we can put in one or two of our own people to follow an audit trail within their Government in the hope that we can ensure that what was intended and agreed when the aid was put forward has been honestly carried out in practice.

The noble Lord, Lord Lawson, in effect said that you have to choose between the amount of aid and the outcome of aid. That is a wholly false dichotomy. One has of course to have careful regard to how much aid one commits to—and I am totally signed up to the 0.7% commitment, varying, as the noble Lord, Lord McConnell, said it does, with the ups and downs of your own economy—but the idea that one can either look hard-headedly at the amount or look pragmatically and effectively at the outcomes but that you cannot deal with both seems to be an untenable proposition. One has to work at both ends of the equation. I again thank the noble Lord, Lord MacGregor, for introducing this debate.