International Development (Official Development Assistance Target) Bill

Lord Reid of Cardowan Excerpts

Friday 27th February 2015 Lords Chamber

Finally, during the spending round—this is a point that has been made and to which we will return on other amendments—all departments must currently justify their proposed programmes in detail, which includes many other things such as value for money, proper controls, challenges where they have overspent and so on. The overseas budget will now be immune from that process in the spending round. Indeed, DfID may even be tempted to rush ahead with untested programmes towards the end of the financial year to meet its target. I know that we will be debating other amendments to do with value for money, but there is no substitute for any department having to justify its proposed budget in the spending round. It is a useful and important process and no department should be immune from it. That is why I strongly support the amendment of the noble Lord, Lord Butler.

[Lord Reid of Cardowan (Lab)]

My Lords, I suspect I am in a minority on this side so I start by declaring an interest. I was involved in negotiations with nine departments of state as a Minister; none of them was the Treasury. Two, defence and health, were huge spending departments. Several others were also spending departments. I therefore bear the scars on my back from many discussions with the Treasury. Do I think that was a useful function? Yes, I do. It was necessary because there is an obligation on us all to ensure that, however well motivated a Minister, a Government or a policy is, it is subject to continual scrutiny. That is why there is merit in the amendment that has been moved.

I should make it absolutely plain that I fully support a 0.7% target and not only in politics. When I was chairman of a football club, we unilaterally adopted the same target for giving to charity. It is worthy, moral and has an element of leadership, as my noble friend Lord Davies said. However, for two reasons it would be quite wrong to have that target completely bereft of scrutiny by other departments, particularly the Treasury.

The first is to ensure that the 0.7% is spent not just with good intentions but with good outcomes. It is the objective effect of what we do, not just the morality of our intention, that will affect the lives of billions of people throughout the world. Each programme must be inspected to make sure that, however good the intent, it is not just making up numbers in a less effective way than might otherwise be the case.

Secondly, I have always believed that although each department has a degree of independence and autonomy, they should be part of an overall government strategy. Therefore, we must ensure not only that the individual programmes are beneficial but that the whole thrust of the aggregate of the programmes is complementary to our foreign policy, our defence policy and, indeed, our domestic policy. If not—if there is no scrutiny of a department and it is automatically given the right to spend money, unlike every other department—we could find an incompatibility between the two.

Therefore, I see no contradiction between a commitment to 0.7% being the aim and being enshrined in our policy for the future, and an insistence that that be spent to the best effect, not just for the good governance that has already been mentioned but for the benefit of the beneficiaries of that money—to ensure that it genuinely improves their lives in the best way possible.

[Lord Ramsbotham (CB)]

My Lords, I strongly support the point so powerfully made by my noble friend Lord Butler, for reasons very much connected with what the noble Lord, Lord Reid, has just said. The Committee on Soft Power, which was so admirably chaired by the noble Lord, Lord Howell, considered this matter because the contributions of all the other ministries to that 0.7% must be taken into account. It should not merely be a 0.7% DfID budget. Therefore, if in future, as I hope, the contributions of all the various ministries are included in the 0.7%, it is essential that DfID’s co-ordination of that contribution—if that is what it amounts to—should be subject to the discipline of making certain that it is properly spent in the national interest.

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[Baroness Northover]

My Lords, I thank noble Lords for their amendment, which seeks to require the Secretary of State to report on circumstances where meeting the target would lead to excessive spending towards the end of the calendar year. Clearly, there should be no circumstance where the Secretary of State incurs excessive spending. I express my appreciation for my noble friend’s honesty that he does not support the 0.7% target. That is extremely clear and comes over loud and clear from his contributions.

In the previous amendment I addressed the issue of quality at the end of the calendar year, so I will just very briefly mention that the expenditure at the end of 2013 included the contribution to the EC. My noble friend Lord Forsyth said that DfID was otherwise engaged and not thinking about Father Christmas, which of course was extremely appropriate, and we were concentrating on what we could manage to contribute to the Global Fund, which I have discussed before, and the World Bank. I also mentioned that the National Audit Office and the OECD DAC recognised that this was all done in exactly the way it should have been. Obviously, it is critical for us to build up a strong enough pipeline that gives us a choice and the contingency to manage the budget that we have. We have such a good pipeline, and this means that we are able to choose between programmes that represent good value for money.

I agree with my noble friend Lord Lawson about trade, FDI and the other aspects that he mentioned, and with my noble friend Lord Lamont, who mentioned remittances. They all play their part in development. That is key. However, the economist Jim O’Neill, formerly of Goldman Sachs, who devised the terms BRIC and MINT for some of the emerging economies that I think they are talking about—I am sure my noble friends are acutely aware of how they have managed to develop—advised that Goldman Sachs’s investment should be partly guided by the Human Development Index. He says that it was when Turkey and Mexico reached a certain level of education that it was possible to drive industrial development and investment. That is why, for example, aid supporting education and health for the whole population may be key and complementary to those other aspects.

I note that my noble friend Lord Lawson said, perhaps inadvertently, the department for “industrial” development rather than international development. Looking forward, and bearing in mind our support for CDC and what I have just said in relation to the Human Development Index, perhaps that is a prescient description. Let us hope that it is sustainable industry in the future.

There are all sorts of other drivers of poverty reduction, and I fully appreciate that. They lie beyond aid, and include trade, tax, conflict, corruption and disease. That is why we also play our part in shaping the international system to work for poor countries. That underlies the UK’s approach, for example, to the post-2015 development framework. It is a false dichotomy to set “aid” and “beyond aid” as if they are competing, for the very reasons that Jim O’Neill stated.

We do not believe that it makes sense for this amendment to include a report on the relevant factors for the target not being met and speculation about future events, as it appears to require. In any event, Clause 2(4) already makes provision for the Secretary of State to describe what steps she or he has taken to meet the target in the coming year.

I hope that I addressed very thoroughly, when speaking on the previous amendment, our approach to spending over the year and the importance of a sustainable, long-term programme that does not commit us simply to spending in a particular year but looks at an overall strategy over a longer period. Therefore, let me make clear that we do not accept this amendment and hope that it will be withdrawn.

[Lord Reid of Cardowan]

Perhaps I may clarify one point, which bears upon what the noble Lord, Lord Lawson, said, although not necessarily his amendment. It is the relationship between what the Minister called human development and economic development. I have great respect for Jim O’Neill. He is a very intelligent, very successful man and a great Manchester United supporter, so I have no reason to object to what he said, but I am sure that he would be the first to point out that, although education is of great importance in development, the production and maintenance of increasing levels of education are dependent on the production of a surplus domestically, which allows the development not only of education but of other social services. I understood the noble Lord, Lord Lawson, to be making the point that economic development, including capital investment, remittances and trade and so on, was the very basis on which future prosperity and a fair society are built. I do not think that the two are in dichotomy, as the Minister appeared to suggest.

[Baroness Northover]

The noble Lord has it absolutely right. I am saying that there is no dichotomy between them. It is clear that economic development is transformative; the issue is how you underpin it and take it forward. I was indicating that Jim O’Neill puts that emphasis on human development to have the economic transformation that the noble Lord and my noble friend seek. There is no dichotomy. That is why we approach it in terms of both human development and taking economic development further forward.

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[Lord Reid of Cardowan]

My Lords, I associate myself with the amendment and particularly with the remarks made by my noble friend Lord West. I do that for three reasons: first, because the primary duty of government is the security and welfare of our citizens and our sovereign nation in the world. I will not elaborate on that, as I think it is accepted by most of your Lordships’ House.

My second reason, however, is the commitment of honour that we have towards the men and women who serve this country—not just because charity starts at home but because of the unique contract that they have with the people of this country. It is a contract even until death and, tragically, many of them encounter that and lose their life in the service of this country. We have a debt of honour to illustrate that we are giving just as much attention to them as to others.

The third reason is because of the relationship between development overseas and our position as a nation which has a proud tradition of soldiering and contribution overseas. I am not one of those who believe that every problem has a military solution; they do not. Nor do I believe that you should develop military plans, strategy, operations or structures without regard to what used to be called “grand strategy”. Grand strategy, if we are to have it—I have to say that I do not see many signs of it in the Government—must encompass both hard and soft power: economic development, aid, diplomacy, military, Armed Forces and so on. That needs to be at both the strategic and the operational levels.

As the noble Lord, Lord West, pointed out, there are many cases—though not the majority, I accept—where aid can be supplied only under the umbrella of protection of the British Armed Forces. There are cases where the Armed Forces commit themselves, as in the Ebola crisis, to functions that are not necessarily directly related to defence, but where they are operating in difficult circumstances where they have particular attributes to defend themselves. In other words, you can no longer isolate military and Armed Forces action from soft power, whether diplomacy, aid or whatever. That is the essence of the strategy. In many cases you will not need the military and it would be better, as in some of our recent experience, to pay a little more attention to providing civilian attributes such as justice systems, but the two are meshed together.

The truth is that I believe we are now falling beneath the critical mass regarding our Armed Forces—certainly, though I will not rehearse all the details, with regard to our soldiers, surface fleet and aircraft, some of which has been pointed out already. We are also falling beneath critical mass in terms of our commitment. When I was a much younger lad, we were spending 5.4% of GDP on our Armed Forces. We are now spending less than 2%. If the nuclear deterrent is transferred from the central budget, out of which it has been paid for 50 years, into the defence budget, we will have an even greater deterioration, although that will be disguised because of that internal transfer.

I accept that we are among the highest spenders in NATO in this regard because other members of NATO are, frankly, not even getting to 2%. In some cases, when they are getting to 2% that is rather cloaked in euphemisms as well. I was talking to someone recently about the details of the Belgian defence budget. That country spends 2%, 90% of which is on salaries and pensions. As one official said, “We don’t so much have an Armed Forces as an extremely well guarded pension scheme”. So it is not the case that we are falling dramatically behind the rest but, given some of the things that are happening in Europe and the wider world, and the necessity to combine soft and hard power together, we can no longer allow the isolation and continued deterioration of defence; that is not something that can be put back quickly.

I understand that education, health and other domestic issues are extremely important to people in the country. I understand also the sincerity and motivations behind the discussions on the 0.7% target. Still, it would be better to be cautious about our future strategy as a country, for ourselves but also for the many people in the world who look to us not only for moral assistance and diplomatic and development aid but as partners who can be counted upon when the real hard times come, and they come in the form of threats. There is therefore nothing incompatible between arguing for a strong, robust and effective budget with regard to overseas development—particularly economic development, which is the basis of all human progress—and our commitment to adequate funds for defence.

[Lord Stirrup (CB)]

My Lords, I suspect that it will not surprise the House to learn that I agree with everything that has been said so far on this amendment. Let me be clear: I support the 0.7% target, although I accept and acknowledge the importance of the much wider suite of tools that can and should be brought to bear on international development, as the noble Lord, Lord Lawson, has rightly pointed out.

I have been in the position to see personally some of the outstanding work that is done abroad by the Department for International Development. I have also been in a position personally to witness how much of this work has contributed not just to the betterment of humankind in general but to our own national security; it is important to us in a much wider sense. Equally, I have been in a position to see the importance of what the noble Lord, Lord Howell of Guildford, who is not in his place at the moment, referred to earlier as the comprehensive approach. In so many difficult areas of the world, development and military effort have gone hand in hand, as they need to do. Indeed, one of the great improvements we have made in this country over recent years is the breaking down of the barriers that used to exist between the different departments. Here I include the Foreign Office, the Department for International Development and the Ministry of Defence. Their joint working has improved immeasurably over the years, and as a consequence, the output, the effect that we have in the world, has improved immeasurably as well.

I have listened very carefully to the arguments that have been made in support of this legislation and for why the 0.7% target needs to be enshrined in legislation. I listened very carefully to the arguments the noble Baroness the Minister made in resisting a number of the amendments that have been put forward. Any one of her colleagues from any of the other spending departments could stand at the Dispatch Box and make the same case with the same force for their own department. Most of the arguments that have been advanced today have no particular significance in international development over any other task that the Government undertake in general public expenditure, except, perhaps, for one, and that one is that we have agreed to an international target for international development, but so we have for defence, as the noble Lord, Lord Forsyth, has pointed out. We have said that it is crucial that nations do not fall below spending 2% of their GDP on defence within NATO. Those nations that do not meet that target should work towards achieving it. We have taken the lead, at least in terms of words, in this regard. What we have not yet done is taken the lead in terms of action.

Surely two departments that have worked and will continue to work so closely together in future as defence and international development, two departments that rely upon each other so much for a synergistic approach in the world, two departments, perhaps the only two departments, which have an international commitment to a specific target, two departments that are linked so closely, should be treated the same in our legislation. I support the amendment.

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[Baroness Northover]

I remind the noble Lord that we have a general election between now and then, and although we are not standing for election many of our colleagues are. The new Government will no doubt take a decision as to what they say their spending should be. However, I set that in the context of a continuity here, as regards defence spending, which you do not see in the DfID budget.

[Lord Reid of Cardowan]

I am grateful to the Minister but I have to come back on this. We understand that, tragically from her point of view, the present Government may not be in office after the general election, but if they are, will they maintain expenditure at 2% or above? Incidentally, I say that in the context of not accepting her figures on continuity. I do so for very good reasons. For instance, just after the Cold War, under Mrs Thatcher as Prime Minister, there was a 25% cut in real terms in defence expenditure over a six-year period.

[Baroness Northover]

I am very happy to share these figures with noble Lords but I am making a comparison with the aid budget, which is what we are addressing—perhaps I could bring noble Lords back to that. I do not dispute the value of the defence budget but we are trying to make sure that the aid budget is much more predictable. I hope that I may be allowed to carry on because I realise that noble Lords wish to get through some other elements.

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[Lord Forsyth of Drumlean]

We can all take it from that that the Government are not prepared to say on the record, with all the risks and threats around us in the world, that they are committed to meeting that 2% target. That is extremely disappointing, especially when the Prime Minister is going around telling other countries that they ought to do so. Surely the whole basis of the debate has been about setting an example to the rest of the world.

A number of points have been made. I want to pick up on points made by my noble friend Lord Marlesford and by the noble and gallant Lord, Lord Stirrup, which are profoundly important. The noble and gallant Lord talked about the fantastic job being done by our troops around the world, in conflict zones and elsewhere, to help improve people’s quality of life. That is something of which we should be immensely proud. We should not be proud of the fact that only £5 million of Ministry of Defence spending counted as overseas development aid for the year 2013. The Government are obsessed with sticking to conditions set by other people—who do not actually meet the target—as to what can be included in the target.

I listened to my noble friend the Minister’s boss, the Secretary of State, on the radio this morning, speaking from Sierra Leone. She was very good indeed. She said how committed she was to aid being about helping people economically. She spoke with great affection about the role being played there by our defence forces. But that is not allowed to come off her budget because it does not meet the target. Indeed, in one instance where we sent troops and people—I think to Haiti—the only thing that the MoD was allowed to claim was the fuel for the ships. That is an absurd position, which arises from being determined to meet a particular target determined by someone else, as opposed to thinking about how we can spend the money most effectively to help people in distress and need. In that latter example, humanitarian aid is less than 10% of the budget that we are discussing.

[Lord Reid of Cardowan]

I am grateful to the noble Lord for allowing me to intervene. This is an important point for recognition, I hope, by those who approach this not from the defence side but from the side of international development, whether economic development or aid. The point is simply this. We synergise the efforts, finances and resources of DfID and the Ministry of Defence when specific emergencies arise. We did so in relation to Ebola and the Pakistan earthquake and so on, as I think everyone would accept.

However, there is so much more that we could do on a more general scale to aid the development of countries throughout the world in two areas. One is post-conflict reconstruction, where a massive job could be done for the benefit of people, and I would go further by referring to the second area, pre-conflict reconstruction. Both those are part of what the noble Lord, Lord Howell, mentioned today as developing areas for international development and aid, and they are relatively recent. If we could conscript a vast army not of soldiers but of civilians with expertise in human rights, law, prisons, policing and so on, pre and post-conflicts, there would be enormous benefits. This is not just a matter of the protection of our own country.

[Lord Forsyth of Drumlean]

I am most grateful to the noble Lord, who speaks from experience, and I agree with everything he says. What we spend at the moment on overseas development aid accounts for about a third of the defence budget. All my amendment would do is say, “If you want to increase the overseas aid budget, you can do so, but we have to meet that other target as well”. That seems entirely reasonable and sensible, and I am afraid that the arguments put forward for not linking these two things were thoroughly inadequate. The advocates of the Bill have been hoist by their own petard.

I would just like to pay a small tribute to the noble Lord, Lord Davies, for saying right at the start that he would be consistent, but I was a little disappointed that he suggested that if I divided the House he might not be able to vote for the amendment because of the drafting. That seems to be something that he should be able to overcome. If the House decides to accept the amendment, I shall be quite happy for the Government to come back with new drafting. I am very happy to work with the noble Lord to ensure that we reach agreement on the drafting, just as we have agreed on the principle of maintaining the support for our Armed Forces and ensuring the security of our country.