Taxation (Cross-border Trade) Bill

Lord Purvis of Tweed Excerpts

2nd reading (Hansard): House of Lords & 3rd reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords
Tuesday 4th September 2018 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, it is a pleasure to follow the noble Lord. I look forward to, if not a double act, many similar fellow contributions on the Trade Bill. I very strongly agree with him that, regrettably, many issues that we would have raised on the Bill will have to be raised during the passage of the Trade Bill. That is certainly not ideal, but this House’s voice must be heard. When we ask questions, the Government must listen.

We are engaged in the first negotiations in our country’s history to make a trading relationship harder. The Bill is the first key set of barriers to be created in this new relationship of erecting barriers rather than removing them. It is creating unnecessary uncertainty and cost and will make our trading nation’s story one of new barriers and burdens. The relationship can be as frictionless as possible, but there will be new sources of friction. On the basis of the negotiations so far, and from what we are able to discern from the Government’s position and the disagreement within the Government, there will be friction upon friction for the foreseeable future. There were epochal debates in this House on the Corn Laws and on free trade a century ago, referred to by the noble Baroness, Lady Altmann. We now have this Bill, which, owing to the cynical connivance, if not cowardice, of Ministers, we will not be able to scrutinise fully or seek to amend.

Why is it important? It should be important to all sides, whether they supported Brexit or remain in the referendum. Many on the leave side said before the referendum, and many noble Lords have consistently said since—making a compelling argument—that staying in a single market for goods, with all the regulations that that would necessarily bring and the European Court of Justice’s ultimate interpretation power of the common rulebook, is not consistent with Brexit. Now we have the Government saying that that is wholly consistent with Brexit. These are fundamental questions raised by the Bill and we have merely a couple of hours to discuss them. The House has considerable time for the Minister—I agree with other noble Lords in that regard—but this is no time for a tactic to reduce Parliament’s and this House’s proper role of reflection on and scrutiny of the Bill.

Many issues have been raised. My noble friend Lady Kramer raised fundamental questions about how the Bill will interact with rules of origin, which are a core element for many of our key trading businesses, which need certainty on this. Why is it important? It is important because it is critical to any operation of an FCA, but the Government have said that the rules of origin aspect will require no great burden of checks and investigations on whether a product being imported into or exported from the UK will comply with such regulations. Paragraph 17c of the Government’s White Paper referred to,

“for example … the point at which the good is substantially transformed into a UK product”,


and said that 96% of all such goods would not be liable for check. However, more than 40% of all goods that receive an EU tariff are of an intermediate nature. A good of an intermediate nature by definition must satisfy rules of origin regulations. The Government have given no indication of how such checks will be done or whether our goods or those we import into the UK will be able to comply with rules of origin obligations. Clearly, under the Bill there is an intention to have a differential tariff rate on the basis of those regulations. If that is based on no checks, it is incumbent on the Government to be clear about how that can work. That is only one of the questions raised by Peers in this Chamber today. My noble friend Lord Fox asked 17 sensible and substantial questions—I counted them. They were unanswered in the Commons, as the noble Lord, Lord Browne, said. There is a duty on the Government to reply to questions that this House asks them.

Those questions are over and above those asked now by those who were then involved in putting many of these proposals together, including David Davis and many others in the House of Commons who have been referred to. He said that he would not support the White Paper—and, by definition, any of the mechanisms of the FCA enabled by the Bill—because the underpinning operational foundation of it, a common rulebook of regulations, is worse than the situation that we have at the moment, within the European Union.

Will the Minister be clear about the point made by the noble Lord, Lord Hannay? It is not just a case of telling our European partners the position we seek for our future trade relationship; it is also about those 40 other countries and networks where we are engaged in discussion on rolling over existing trade agreements to a new post-Brexit scenario.

The Minister described the Bill, but he did not make a case for it. As the noble Lord, Lord Browne, said, he did nothing to describe the changes made in the Commons to the Bill as introduced to this House. How will new Clause 54, which destroys the FCA, operate? It is telling that the Government clearly do not think that this afternoon’s debate is very important. I think that the noble Viscount, Lord Trenchard, was the only speaker in support of the Government’s position. The Minister is nodding. If he can take that as a ringing endorsement of the Government’s position, he needs to worry later this evening.

As the noble Lord, Lord Hannay, asked, are we pursuing new Clause 54 in the negotiations? Is advice being published on how checks on the estimates on which the formula will be calculated, and are we in discussion with our European colleagues about how that will operate? What are the methodologies for the UK to operate under this system? Have we discussed with our European colleagues the methodology that we would expect them to apply for reciprocity?

When will the necessary changes be made for reciprocity? What is the legal basis from a European point of view? Clearly, if we are asking that of them, we need to understand the legal basis ourselves. As has been said, how can this possibly be squared with the situation in Ireland, where there will be a border where those checks will be necessary if we are asking that of the Irish Government?

How can we expect the European Union to place on other third countries the necessary requirements for them to define their goods when they export to the EU as we will expect them to do when they export to us? What arrangements will the EU be putting in place to ensure that there will be proper dispute resolution of this reciprocity? Those are just some questions that we would have hoped and expected to raise at a further stage of the Bill.

However, the uncertainty continues. At least the Government have now provided advice on the basis of there being no agreement. Their advice to businesses of 23 August on the new customs relationship ended with very clear advice: seek advice from your business advisers. If that is what our Government are saying to our businesses when the clock is clearly ticking, we are in considerable difficulty.

I asked a Question of the Minister for Health regarding medicines just before the Recess. Forty-five million packs of patient’s medicines are exported from the UK every month and 37 million are imported into the UK. Merck, GSK and AstraZeneca all forecast that if we leave the customs union, it could take five to 10 years for any technological solution—which would be under the FCA—to replace the system we have at the moment. They are now stockpiling, given the level of extra documentation. That is not project fear, nor is it a statement from the Treasury which the Department for International Trade can criticise; this is a fact from our business community.

The noble Viscount, Lord Trenchard, made a very powerful case, I think in support of the Government’s position, that we should rid ourselves of the European Medicines Agency regulation, and that we can thank God that we are leaving it. I suspect that there will have to be amendments to get rid of Clause 6 of the Trade Bill, of which the House of Commons asked that we should continue to be a part, and I am glad that that is the case.

We are often asked by people to offer scrutiny in this House, but there were clear voices from many on the other side of the argument, when we amended and asked the Commons to think again on the withdrawal Bill, saying that we were abusing our parliamentary processes. The Minister at the Dispatch Box said that we were going beyond our constitutional powers. However, contriving to classify this Bill in such a way to avoid proper scrutiny undermines that argument considerably. We shall have to come back on many specific issues, which regrettably we are unable to discuss today, whether on the regulations on anti-dumping referred to by the noble Lord, Lord Kerr, on the relationship with the FCA and our trading partners, or on the Treasury’s position and the advice it is giving about the state of the British economy if we leave without any agreement. We will need to come back to this, and from these Benches, we will do so consistently and strongly as a point of principle. That is why I endorse my noble friend’s comments: this House should express in the Division Lobby our position that we are not satisfied with how the Government are handling the Bill.

--- Later in debate ---

[Lord Bates]

My Lords, this has been a good debate. I now have the challenge of trying to respond to, by my calculation, 33 specific questions in the time allotted; if I am to abide by the Companion I should not exceed 20 minutes for winding up.

Before I address the key themes raised, I will say that a lot of the debate centred on the constitutional nature of what we seek to achieve through the procedure by which we are considering the Bill. I want to set out the context. The proposition made was, effectively, that this piece of legislation was being railroaded through both Houses and on to the statute book without sufficient scrutiny. To that challenge, I point out that it was on 9 October last year that the customs Bill White Paper and the trade White Paper were published; that it was on 20 November last year that the Taxation (Cross-border Trade) Bill was introduced to the House of Commons in a Ways and Means debate; that it was on 5 December last year that both the trade and the customs elements were the subject of take-note debates in your Lordships’ House; that it was on 8 January this year that the Second Reading of the Bill was debated in the other place; that, during debate on the EU withdrawal Act in your Lordships’ House, customs and trade implementation issues were readily and frequently the subject of amendments and of debate; that on 12 July the Government published their White Paper on the future economic partnership, which set out in detail the proposal for a facilitated customs arrangement; and that on 16 July the Bill completed its Commons Report stage and therefore now comes to your Lordships’ House.

[Lord Purvis of Tweed]

The Minister is making the point that the Bill started so long ago that we have had sufficient time to consider it—but some fundamental changes were made a week before the House of Commons rose for its recess. There has been no other parliamentary time to scrutinise the amendments made by the ERG, which could fundamentally change the Government’s whole proposal for a facilitated customs arrangement. There has been zero opportunity to have that consideration, and there will now be zero opportunity for it in this House as well.

[Lord Bates]

The noble Lord says that, but I am not suggesting what he has just accused me of suggesting for one minute. I am placing this in context. There has been substantial scrutiny and time for debate on the issues. The Trade Bill will follow; it has its Second Reading on 11 September, as referred to by the noble Lord, Lord Stevenson. We hope that an agreement with our European friends will take place this autumn, and there will then be a meaningful vote. Following that, there will be an agreement and implementation Bill. Following that, a piece of legislation on the future economic framework will have to come before your Lordships’ House. Placed in that context, this Bill represents the fact that at the moment our customs, trade and tariff policies are hardwired into the European Union, so there is a legislative necessity for us to have a standalone trade and customs arrangement, legislatively underpinned, so that we can prepare for any eventualities that the negotiations throw up. We have been clear throughout that it is in the best interests of this country and of the European Union that we conclude in an orderly way, with an agreement, and that we move to frictionless trade as far as possible.

The debate has focused essentially on the following issues; I will summarise them as a way of trying to work through and answer as many questions as I can in the time available.

Peru: Visa Requirements

Lord Purvis of Tweed Excerpts

Monday 4th June 2018 Lords Chamber

[Baroness Williams of Trafford]

My Lords, a visa regime is not a barrier to trade. We have excellent trading relationships with many countries whose citizens require a visa to come to the UK such as China, India, Turkey and the UAE. All non-EEA visitors to the UK are assessed against the same immigration rules regardless of nationality and whether there is a visa requirement. The only difference is where the assessment is actually made. I can attest to the noble Baroness that our visa service is excellent: the processing time is less than eight days, and 97% of non-settlement visa applications were decided within our standard 15-working-day processing time. To return to the noble Baroness’s original Question about whether we will think again about Peru, as I have said to her, we will keep these things under regular review. I know the Foreign Secretary has had talks with Peru on trade, unveiling several infrastructure programmes that the UK is supporting.

[Lord Purvis of Tweed (LD)]

My Lords, on an IPU visit to Peru last year the Minister for Trade and Tourism told me that the inward trade delegation from Peru to the UK was disrupted because of the visa complications at the British end, which I am afraid contradicts what the Minister has just told the House, and that does not seem to be an isolated incident. At the same time as the United States seems to be raising trade barriers and making it more complicated for us to trade, countries such as Peru are an ideal opportunity to enhance British direct trade and the visa regime is part of the difficulties that many businesses face. Given the Home Secretary’s announcement yesterday of a review, is Peru not a perfect example of a case study to be included in the Home Secretary’s review about how we could be facilitating a better regime?

[Baroness Williams of Trafford]

I am sure my right honourable friend the Home Secretary will be considering all situations in the round. I am dismayed to hear about any visa complications that might have been experienced by the Peruvian delegation to the UK. Obviously I will not discuss single cases on the Floor of the House but if the noble Lord will give me the details then I will look into it. I know the Foreign Secretary has signed a treaty on the mutual recognition of qualifications, which will facilitate greater exchange of people and opportunities for students from both the UK and Peru. He himself has heralded a developing and intensifying relationship between the UK and Peru that will enable both countries to save endangered wildlife, help to promote the education of women and girls and build our common prosperity.

Overseas Development Assistance: Fossil Fuel Subsidies

Lord Purvis of Tweed Excerpts

Tuesday 15th May 2018 Lords Chamber

[Lord Bates]

Energy is critical. I want to make absolutely sure that I got out the last words in my previous answer. As I sat down, I referred to fossil fuel subsidies, which the overseas development assistance system does not deal with. The noble Lord is absolutely right: power is incredible. You cannot have economic development at the pace we want to see or, often, the healthcare systems that people need without access to energy. That is why the CDC is right to invest heavily in bringing extra power plants on line. Some 5,000 megawatts that the CDC has invested in is currently under construction or coming online. Overwhelmingly, it is in favour of renewable energy because we believe that, in terms of economic benefits and costs, it provides the best opportunity for developing countries in the future.

[Lord Purvis of Tweed (LD)]

My Lords, the UK’s shareholding in the Asia Infrastructure Investment Bank is scored from overseas development assistance funding from DfID. While the bank itself has a strategy of being lean, clean and green, it still invests in fossil fuel projects; granted, not coal, but nevertheless fossil fuels. What is the UK’s position in multilateral organisations that it directly supports where there could well be projects in which, as part of the finance mechanism, there is a subsidy element?

[Lord Bates]

It is a good point. The noble Lord points to the Asia Infrastructure Investment Bank, but there are some tremendous examples. For example, the African Development Bank lent 100% to renewables in 2017. Progress is being made. There is general agreement in the international community that we need to move away from fossil fuels to renewables because that is what the STGs call for—STG7 is about clean and sustainable energy available to all—and what the Paris climate accord calls for.

Development Aid Budget

Lord Purvis of Tweed Excerpts

Monday 3rd July 2017 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, it is always a pleasure to follow the noble Lord, Lord McConnell, as there is such common ground between us on these issues and he speaks a great deal of sense. I agree with him that we are lucky to have the opportunity, courtesy of the noble Baroness, Lady D’Souza, to raise these issues today in a full debate in Parliament. In doing so, I also, from these Benches, welcome back the Minister to his brief and welcome the noble Baroness, Lady Sugg, to her Front Bench role as a Whip covering this department. I wish her well.

There is no doubt that, when it comes to spending more than £13.5 billion of public money, there should be full and relentless scrutiny of how, where and on whom it is spent. This is a public duty on us as parliamentarians. Full accountability needs to be applied to Ministers or officials, too, if any of that money is misspent or misdirected. Focusing on these questions, rather than whether we should meet the 0.7% target, is a point on which I agree with the noble Lord, Lord McConnell, very strongly indeed. There is a wide consensus on this. This was shown during the passage of the International Development (Official Development Assistance Target) Act 2015.

If I have one area of slight disagreement with the noble Baroness, Lady D’Souza, it is that I think it is still not the case that everybody agrees that aid works. There is still a school of thought that does not believe that overseas development assistance works and that development comes purely from private sector sources. I am not of that school, but many of those who hold that argument like to peddle a myth that the bulk of UK ODA is frittered away or wasted on corrupt programmes. When asked to provide evidence, they usually point to an individual programme that they happily mispresent in the process. Because it is impossible to deliver such a large budget without some errors or some programmes along the way that fail, these are used in vain against UK ODA over all. However, I suspect that that will not be the focus of this debate this afternoon, which is welcome.

Section 5 of the International Development (Official Development Assistance Target) Act 2015 covers the independent evaluation of the extent to which UK ODA,

“represents value for money in relation to the purposes for which it is provided”.

I agree very much with the noble Baroness, Lady D’Souza, that this is hard. Given the breadth and the complexity of ODA across many different fields, it is often easier to calculate a numerical output for some aid programmes and harder to calculate outcomes, especially when many of these programmes are delivered in very difficult circumstances. It is also harder when UK aid programmes are delivered in a certain way that is not always consistent with the in-country way of budgeting and of delivering public services.

It is 10 years since I served on the Finance Committee in the Scottish Parliament. We had regular debates there about delivering services in the UK, when it came to public sector intervention, and about what outcomes were delivered, rather than simply outputs from the financial inputs. However, I am pleased to say that, since the passage of the Act, the structures in place for Parliament to scrutinise this work are proving effective. Indeed, in the most recent review of its own procedures, the Independent Commission of Aid Impact, which has been referred to, highlighted not only the number of reports it has carried out but also the fact that the Government listen to its advice. Many of the recommendations made by this independent body have been taken into consideration by DfID and acted on. Indeed, through the sub-committee of the IDC Committee in the Commons, the accountability to Parliament is also here.

I have no deep-seated objections to UK ODA being delivered by departments other than DfID, but we have to be cautious. The ambition of 40% of ODA being delivered outside DfID has had little debate in this House. I cannot recall since I have been a Member having a full debate on ODA in government time considering these issues. I do not doubt the commitment of the Minister when assurances are given that, for example, the department will not be subsumed into the FCO, and I hope that that will not allow any mutterings from those who argue for this to be the case. That is a distraction. In last week’s debate on the Queen’s Speech, the noble Lord, Lord Dannatt, questioned whether it would be better simply to amalgamate all development, diplomatic and security presence around the world into one, so there are still some voices. However, I hope that they are in the minority and do not distract us from where we really need to focus.

We have also seen growing global UK leadership on transparency and the calculation of effectiveness and delivery. In many respects, it is the delivery standards of DfID that are now being seen across the world as the leading approach. The 2015 Act requirement on government to demonstrate value for money and effectiveness is deliberately broad enough to ensure that all Whitehall departments have to be scrutinised by ICAI and be equally accountable to the IDC and not only to their own scrutiny committees in Parliament. Can the Minister assure the House that all necessary agreements are in place across Whitehall to ensure that that can be done properly and that there are no barriers to ICAI doing its work?

This is important not only to demonstrate to our own public that money is being well stewarded but because across the world we want to see the growing UK leadership in this respect being carried on. In the Global Fund’s Aid Transparency Index, the UK, with its full government department, is the only country in the world that has retained its top status since the global transparency index of 2013. Other countries have looked to DfID as the exemplar and have copied our approach. In 2013, there were 26 donor countries in the very poor category of transparency; in 2016, there were only five. This is welcome. Interestingly, while the UK scored 88.3% on aid transparency, Italy scored just 16%, France 9.2% and China a derisory 2.2%. Given the extent of the delivery of trade and concessions for aid from China, Africa and elsewhere, a level of scrutiny on their programmes is almost impossible to carry out.

There is no question that the UK is a leader overall. It was therefore with more than a little concern in that regard that I read the Conservative manifesto, which pointed to a slight differing in the direction going forward. In his response to the noble Lord, Lord Collins, in Questions today, the Minister indicated only part of the commitment in the Conservative manifesto. It states:

“So we will work with like-minded countries to change the rules so that they are updated and better reflect the breadth of our assistance around the world”—


which is what the Minister said. However, the following sentence states:

“If that does not work, we will change the law to allow us to use a better definition of development spending, while continuing to meet our 0.7 per cent target”.

This begs the question whether the Government have ruled out unilateral changes to our approach on ODA. We have not only complied with the DAC rules but have been a leader in their delivery. Can the Minister rule out any unilateral moves away from that?

Which are the like-minded countries referred to who also wish to change the rules? What changes are the Government seeking? Can the Minister give examples of specific projects that are not currently covered under OECD rules that the Government would like to see counted as aid? What assessment have they done of the impact that increased links between defence and aid may bring about—if, indeed, this is the Government’s intention? I hope the Minister will have an opportunity to address some of these points.

Finally, on the basis of the continuing and very welcome wide consensus in this House, I have said that the UK comprises just 0.6% of the world’s population but that we punch considerably above our weight on the international stage. I feel that this may well be diminished by Brexit, but that is a separate issue and for a different debate. The UK is a global citizen and we demonstrate leadership around the world, so if the Prime Minister’s tagline of a “global Britain” is anything, it is indeed that British aid works, that UK leadership is gaining results and that we should do nothing to undermine it.

--- Later in debate ---

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, I join other noble Lords in paying tribute to the noble Baroness, Lady D’Souza, for securing this debate. It has been extremely useful and one of those occasions when you look at the wealth of expertise both in and outside this House and are not quite sure whether at the end of it you are supposed to give a speech or should have been taking notes. Of course, it has been a combination of both as I have gone through this debate.

The noble Baroness, Lady D’Souza, has a distinguished track record in this whole area. She outlined, rightly, the need for evidence-based analysis of what is working here. We also heard during the course of the debate from my predecessor, my noble friend Lady Verma, who left a tremendous legacy from her time as Minister. I publicly thank her for that. Many of the areas in which I now deal simply continue excellent initiatives that she began. I also join others in welcoming my noble friend Lady Sugg to the Front Bench as Whip. She will be a tremendous support because, again, she has such experience and expertise in this area.

If I were to try and answer all the questions presented to me, we would exceed the two-and-a-half hour cut-off line—perhaps even the two-and-a-half hour cut-off line for my speech. I have a limited amount of time, but I am very keen that we are able to draw on the wealth of expertise in this House. I will look for an opportunity, I hope before the recess, to continue some of these discussions we have had today.

UK aid plays a vital role in helping the world’s poorest and most vulnerable. That is both morally right and in our enlightened self-interest, as we were reminded. One of the other themes of the debate has been that the world has changed. The noble Lord, Lord McConnell, referred to that in particular. We talked about the changing nature of some of the pressures. I want to dive straight in to the ODA issue mentioned by so many. It is an area of focus.

The rules of the OECD’s Development Assistance Committee were set up some 40 years ago, when the world was a very different place. They have been changed only once in the past 40 years. That process of changing them, once, in March 2016—as the noble Baroness, Lady Sheehan, and the noble Lord, Lord Collins, referred to—took a period of four years to agree. This is a slow-moving area because the Development Assistance Committee works by consensus. We have been very keen to say that we want to share our concerns with our friends. That has literally just begun through our communication process. At this stage, I cannot give a run-down of who our friends are in these particular areas or what each of them are coming to us to say are the areas they would like to see changed and improved.

However, they have looked at particular areas such as climate change. That is something on which 40 years ago there was perhaps not the same focus so we need to look at it. Some elements of research that you can do into climate change are not ODA eligible, yet they benefit, as many have mentioned, the poorest on the planet. There is also violent extremism and countering terrorism—the new threats we face. Do the rules allow and capture all that has been done in this particular area? There is migration on a huge scale around the world, almost unprecedented in our history—certainly post-war—and that raises new challenges. So when, for example, we deploy Border Force cutters in the Mediterranean to intercept the people-traffickers who make fortunes out of other people’s misery and put their lives at risk, and when we work with the Libyan coastguard to try and improve their security and safety, are these not areas that we ought to be able to consider as part of our overall effort?

There is also trade. We talk about trade and development. The only way we are able to achieve that aspiration set out by the former archbishop of not creating dependency—referred to by the noble Lord, Lord Judd—is by trade. Look at the number of people in extreme poverty, which reduced by 50% between 1990 and 2010. What was the reason for that—was it the levels of aid? No, it was the levels of trade, so those are very important to us. That is also the reason why the Secretary of State for International Trade and the Secretary of State for International Development jointly announced that one of our ambitions is to maintain and build upon the preferential trade arrangements for the 48 countries in Africa to be able to trade into the United Kingdom tariff-free. We recognise that that is incredibly important to us.

The noble Earl, Lord Sandwich, referred to the issues of monitoring. Many noble Lords referred to the level of monitoring that goes on. He referred to the possibility that there might even be an excess of monitoring in some respects. Of course, at the moment overseas aid is, in the UK, probably one of the most scrutinised of any spends that happen anywhere in the world. That is one reason the noble Lord, Lord Purvis, was right to point to the International Aid Transparency Initiative’s rating of DfID as world-class and world-leading in the way that it does aid. We have nothing to fear from transparency because that is part of the way we learn and gather information about this. I direct noble Lords to the website “devtracker”. It is a bit of a catchy name, but the Development Tracker is an incredible resource, enabling you to see exactly, in real time, what is actually happening on which programmes and who is delivering them. You can read the independent evaluation reports carried out and see how much money has been paid—as I say, in real time. These are ground-breaking methods of transparency that are recognised internationally. Of course, then we have our own quality assurance, and that has been added to a whole new—

[Lord Purvis of Tweed]

I do not wish to interrupt the Minister’s flow, but he has quite substantially moved on from the area of the DAC and OECD. With the greatest respect, I was waiting for him to answer the point that a number of noble Lords across the Chamber asked about the line in his party’s manifesto that, if there were no agreement within the OECD and DAC, the Government would propose unilateral action and bring forward legislation to change the criteria for ODA in the UK. All of us asked him to reflect on that and perhaps move away from it, especially in the context that he no longer has a majority in either House. This would be a good example of listening to a great deal of concern that moving unilaterally would not be in the best interests of the UK in this area.

[Lord Bates]

I do not want to parallel or parody debates taking place on other aspects of government policy and exiting the European Union, but I can assure the noble Lord that we have no red lines. We are still developing what the issues are that we would like to address. We began that process talking to the NGOs. I would like to continue by talking to Members of your Lordships’ House about what the issues are, citing some of the problems and talking it through with officials. Of course, then we need to present that to colleagues. So it is not a firm, baked plan, which we are demanding or otherwise we will go out on our own. We have said we are quite determined that there are some issues that need to be addressed and we want to share that with people and work together in a consensual way.

Returning to the point about examination and monitoring, of course we have our own internal quality assurance. We also have the National Audit Office. We have the Independent Commission for Aid Impact, which has been cited. The noble Baroness, Lady Sheehan, asked about the CSSF. That was one of the ICAI reports that the noble Earl, Lord Sandwich, referred to, where that scrutiny is beginning to happen. There is also the International Development Committee in the other place, of which the noble Lord, Lord Bruce, was a distinguished chair for 10 years. Again, we have a very good working relationship with that committee. It is rigorous, but there is a partnership because we all want the same thing—namely, to eradicate extreme poverty.

Then we have the sustainable development goals, which a number of noble Lords, including the noble Lord, Lord Collins, and my noble friends Lady Verma and Lady Jenkin, referred to. They are going to introduce a whole new level of scrutiny. Again, it comes back to the point about the Development Assistance Committee. Forty years ago, we did not have the millennium development goals, never mind the sustainable development goals. Now we have these new goals that introduce whole new categories—such as beneath the ocean or peace and conflict, which the noble Lord, Lord Alderdice, referred to—that we need to work on.

I was asked what the Government are doing in respect of the SDGs. We published our Agenda 2030 in March. That was the cross-government response to that. The Office for National Statistics has announced a consultation looking at the best way of producing data and statistics in these matters so that we can track our progress towards the SDG aims. It has some very important elements in it. The noble Baroness, Lady Warwick, was concerned about how those data might be connected. There is a huge new initiative taking place across the UN institutions about collecting data, particularly on the sustainable development goals—what actually works and how it should operate. That is being done by the UN Statistical Commission. We have representation on that and we will follow that, and publish routinely and regularly, in accordance with the requirements of the SDGs, how we are progressing. We will also be able to see online how other countries are progressing towards them. I think this is going to be a major step forward—to reassure the noble Baroness, Lady D’Souza, among others—because once we see countries’ own self-assessment of where they are lagging behind and where they are progressing, we will have an additional level of data to help us ensure that our resources are directed to those who are in greatest need.

The noble Lord, Lord Bruce, also asked why BEIS is the second-highest ODA spender. Of course, that is because the primary objective of BEIS ODA is research and innovation—to reduce poverty by generating and putting into use knowledge and technology to address development challenges and advance development for the poorest in the world. The noble Baroness, Lady Warwick, gave the example of King’s College working in partnership with the Government of Sierra Leone on Ebola. What has been achieved through this, and more widely through development, is incredible, but we still have a long way to go. We have rigorous ways of monitoring the impact and communicating the achievements.

I know that at this point the noble Lord, Lord Judd, will be flinching in his seat, but I ask him to bear with me on impact because it is leading to the subject of effectiveness. We can see that development aid is changing the lives of the world’s poorest. Just today we read about the outbreak of cholera in Yemen, and there is the World Health Organization with 1 million cholera vaccines, desperately trying to get safe access. It is true that you cannot separate the security elements from the humanitarian need in this respect. The noble Lord, Lord McConnell, referred to this as well. Without the security elements, we will not be able to get those vaccines to those who need them.

Just last week, I returned from South Sudan. I was delighted to hear the analysis and the experiences of the right reverend Prelate the Bishop of Truro. I saw the terrible situation there. Were it not for the World Food Programme and DfID’s contribution to that, 1.6 million people who are relying on airdrops of food, through a completely man-made conflict—this is not to do with climate change but entirely to do with the civil war which is raging on the ground—would have their lives put at risk. Therefore, to say that you can somehow separate the security dimension from the humanitarian dimension is not correct.

I will speak about other government departments. The noble Lord, Lord McConnell, referred to the Building Stability Overseas Strategy. Of course, we now have the UK aid strategy—Command Paper 9163—produced in 2015. I do not want to quote extensively from it but that is our new marching point for this and includes significant elements on how we are going to work with global peace, security and governance. I commend it to noble Lords. It says:

“All departments spending ODA will be required to put in place a clear plan to ensure that their programme design, quality assurance, approval, contracting and procurement, monitoring, reporting and evaluation processes represent international best practice”.


It is also right and absolutely fair to say that other government departments are not quite at the level of DfID at the moment. We do not want to crow too much about that because they have not been doing it for as long. My noble friend Lady Chalker is in her place. There is a long tradition and expertise in that area in government, which we want to retain. But that cannot be any reason not to aspire to the highest standards. We have said that we want all government departments that are delivering ODA to be rated either good or very good within five years. An ODA senior officials’ group now meets regularly across government to ensure that lessons are learned and we can assist other government departments in doing that.

The noble Lord, Lord Bruce, mentioned disability. Again, this is part of the SDGs and leaving no one behind, which is a key part of what we are doing. Looking again at our disability strategy is also something that the Secretary of State, Priti Patel, has made a personal passion of. We will be putting additional resources towards that.

The noble Baroness, Lady D’Souza, and the noble Lord, Lord Alderdice, mentioned small grants. I covered this subject in the exchanges in Questions about the small charities challenge fund.

The right reverend Prelate also spoke about what churches could be doing in this area. I will be meeting him tomorrow. Again, I turn to the example of South Sudan. When I was in South Sudan, I met Archbishop Deng—a very gracious man—the Archbishop of South Sudan and Sudan. There are 100,000 churches in South Sudan. What an incredible network that we could be using for peace and reconciliation. I also met Bishop Anthony Poggo, who I am sure is well known to the right reverend Prelate.

The noble Lord, Lord McConnell, mentioned the catalytic impact of private sector investment and the £2.5 trillion gap in private financing. We need to get much more private capital in there. Governments cannot do this alone through ODA. It needs to be through trade, private investment and, increasingly, government assistance providing a catalytic role in that.

Without doubt, UK aid is making a significant contribution to tackling the global challenges of our time. The Government agree wholeheartedly on the importance of measuring its impact so we can fully understand and continue to improve on the very significant contribution the UK is making to the world’s poorest, to stability and prosperity here and to eliminating extreme poverty by 2030. I look forward to continuing these discussions as weeks go on.

International Development (Official Development Assistance Target) (Amendment) Bill [HL]

Lord Purvis of Tweed Excerpts

2nd reading (Hansard): House of Lords
Friday 18th November 2016 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, it is a real pleasure to follow the noble Lord. I think I speak for the whole House in saying that we recognise his commitment to, and knowledge of, this area, and his contribution in this morning’s debate proves that even more.

A considerable coalition of support led to the international development Act reaching the statute book in 2015. That included: the previous Labour Governments from 1997, in particular when Gordon Brown was in the Treasury; the Conservative Party, in particular under David Cameron, with its strong stance on this position; and, in government and in this House, the great forbearance and patience of the Government Chief Whip in the Lords, the noble Lord, Lord Taylor of Holbeach, who worked with me and supported me at sometimes tense moments. His commitment and that of others, especially from those such as the noble Baroness, Lady Hodgson, led to a great deal of consensus in this House.

I particularly welcome the noble Lord, Lord Bates, to his position. He is extremely highly regarded in this House, and I know he will be a great addition to the department. I look forward to him summing up the debate today.

Like the noble Baroness, Lady Hodgson, I have been in the Bekaa Valley this year and seen those fleeing the terrible crisis in Syria. I have been in northern Iraq a number of times and seen internally displaced people fleeing Daesh, all supported by DfID programmes. UK aid is literally saving lives today as we debate the Bill. That needs to be recognised.

The coalition of support also included NGOs, which were unanimous in their view. For my own party’s worth, I said in the Second Reading debate that we were delivering a manifesto commitment. That manifesto was the 1970 general election manifesto, where my party had our commitment before the UN adopted it. The former MP for Berwickshire, Roxburgh and Selkirk, the right honourable Michael Moore, who piloted that Bill through the House of Commons, and my colleague my noble friend Lady Northover, who was at the Dispatch Box on behalf of the Government, together with other parties and NGOs, all had a desire to move away from what the noble Baroness, Lady Chalker, described movingly in her Second Reading speech as the struggle that she had as a Minister, who could start a year not knowing what level of aid she could commit to programmes at the end of the year. Her challenge as a Minister had lived with her over the following years. I was struck by her commitment to this area.

I commend the noble Lord, Lord Lipsey, for allowing us to continue to scrutinise, to challenge and to question our development budget, not least because it is the public’s money, after all, and it is of a very large scale and a very large amount. Proper scrutiny and continuing questioning of it is valid. It is the role of parliamentarians to do that. I also commend him for his consistency, given his contributions to the Act, but while I commend him for his consistency, I do not think he will be surprised to learn that I think he is consistent, but not correct.

In some respects, I could understand if the Bill argued against meeting the target altogether. Some are making that argument in the rather reactionary right-wing press. We can see that their argument is that the aid budget should be slashed entirely. Thankfully, the vast majority of people are not calling for that. I remain slightly confused that the Bill seeks to amend the existing law in a way that would make the noble Lord’s complaints about the legislation on the statute book even more egregious. It is a perplexing paradox that legislation designed to improve an Act would actually make it worse.

In most respects, this Bill is a version of the amendments that the noble Lord, Lord Lipsey, tabled to the international development assistance Bill in February last year. In presenting his arguments then, he said:

“It is intended to avoid waste, to provide ministerial flexibility and to help in the management of our national budgets”.—[Official Report, 27/2/15; col. 1854.]

These are all very laudable aims, but I fear that the position has not really changed between then and now: his amendments would actually make the situation worse.

The Permanent Secretary of DfID told the International Development Committee in the Commons on 4 February last year, when asked about moving from an annualised budget to a rolling three-year programme:

“If you take a rolling three-year programme, what that means is for years one and two you have a lot of flexibility. In the third year, by definition, you have to hit a precise number, because it is the end of the rolling three-year period. In the fourth year, you also have to hit a precise number, because you are dealing with what you had in years two and three. In the fifth year, you are dealing with years three and four. In a rolling programme, you get the benefit in the first year and possibly the second year, but not at any point thereafter. You are locked in after that”.

In many regards, over the five-year period that the noble Lord asks for, we would lock it in even more. Add to that the greater uncertainty that comes from saying that it is simply an average over the period—we do not know whether he is arguing for an average or just a combination of each year—and we would really gain nothing from flexibility towards the end of the rolling period anyway. This is harder from year four of the first period. Locking in greater uncertainty is no way to bring about the aims that the noble Lord is asking for, and which the Act actually delivers. Far from offering greater ministerial flexibility, it would fundamentally defeat the entire purpose of trying to put stability and certainty into development programmes.

As the ONS statistics said yesterday, we are, in effect, in year three of meeting the UK target under a consistent statistical reporting mechanism that the ONS has recognised in its own papers. The 2015 Act now establishes this as the norm going forward, and that is very helpful, especially in the context that we still have to operate under DAC reporting rules, and DfID operates under its own relationship with the multilateral bodies on an annualised basis anyway. In effect, this Bill, unfortunately, cuts the ground from under the 0.7% commitment in its entirety.

For those who continue to argue that we should withdraw our legislative certainty and dilute our aid commitment, the two words “Aid works” are the simple repost. I spoke, as many noble Lords will have done last Sunday, to many young people who were taking part in Remembrance Sunday, about development assistance. It made me reflect back to when I was their age—to when I was 16. The combination of growing aid and concerted effort means that only 14% of people living in developing countries live on less than $1.25 a day. In 1990, it was 47%. We have made very significant progress.

Some 59 million deaths from malaria, measles and tuberculosis have been averted since 2000. There has been a threefold increase in the economies of the least developed countries between 1990 and 2014. Green energy investments in new renewables in many developing countries has gone from $45 billion in 2004 to $270 billion, leading to renewables such as wind, solar and biomass generating an estimated 9.1% of the world’s electricity. Most importantly, I think, 137 million more children worldwide were enrolled in primary school in 2013 than when I was 16 in 1990. Just imagine the benefit for the world’s future. The number of countries where an equal number of boys and girls attend school has increased by nearly 75% since 2000.

I use all these statistics to show that aid works. As the noble Baroness, Lady Hodgson, said, UK leadership in aid is now working, recognised by the Global Fund replenishment conference, by the Canadian Government and by the funding for development conference in Addis Ababa—the list is long of where the world is recognising the UK commitment.

Finally, when introducing the 2015 Bill in this House I asked: if the UK was a global citizen, what kind of citizen would it want to be? I confess that I did not expect then that the world would see the UK leave the European Union and the USA elect a racist, nativist, narcissist, bigoted billionaire as its head of state. In an uneasy world, our citizenship in the world must surely be seen as forward-looking, stable, open, tolerant and giving, where we grieve here when there is conflict elsewhere, where we are ashamed when children are born malnourished and continue into adolescence with poor health, and are angry when girls are prohibited from reaching their full potential. The UK is a leader in global goals and in financing for development. We know that the development pressures in the world are unprecedented, but we also know that we can eliminate absolute poverty and end chronic disease that affects those least developed in our lifetime.

I commend the noble Lord, Lord Lipsey, for his consistency, but he will not be surprised that I humbly submit to your Lordships that we reject the Bill he is arguing for this morning.

Sustainable Development Goals

Lord Purvis of Tweed Excerpts

Thursday 17th September 2015 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, it is always a pleasure to follow the noble Lord, Lord McConnell, who has demonstrated to the House the depth and breadth of his knowledge and experience in this area. I agree with many aspects of his contribution; indeed, he said many of the things that I am now having to think about saying differently in my contribution. Before I start, I wish to refer noble Lords to the register of interests. I also pay tribute to my noble friend Lord Chidgey, who introduced this debate with skill and detail showing that, as we all know on these Benches, his record speaks for itself. That the House has an opportunity to debate these issues, in advance of the discussion of the draft resolution, is a tribute to him for bringing it to us.

It is frequently frowned on, if not sneered at, when we hold to bold ambition. An air of cynicism often pervades much commentary when we talk about tackling the major global issues and a desire to resolve them. The seemingly intractable situation in Syria allows some to think that humanity cannot address its own deficiencies and that people need to come to terms with settling for their lot in the world. Even worse, some think that some in the world have a predilection to live in conflict, in poverty or without justice—that they are somehow not capable, as we are, of having a prosperous economy or a way of life based on western culture. Others take the view that if they simply learned to be like us and operate an economy like we do—overlooking our deficiencies in recent years—the issues would effectively solve themselves.

As we have witnessed the crises in recent weeks, we have seen the difficulties of many conflict areas but also the resilience of people seeking better lives for themselves and their families—the struggles that they go through and the lengths that they go to for a better life—which in many respects humbles those of us here. I hold to the view that bold ambitions are not just admirable things in their own right but are necessary in order to shape our thinking so that we can achieve great things. We must develop our hard policies to match them.

When I had the privilege of leading the then International Development (Official Development Assistance Target) Bill through your Lordships’ House on behalf of Michael Moore in the other place, I cited the bold ambition, announced in 1970, that developing countries should by the end of that decade provide 0.7% of their GNP to support the development of other nations. It took much longer than it should have, and some of the richest countries in the world are shamefully far off meeting this ambition, but in this decade we in the United Kingdom have done so. Parliament has decided that we should do so year on year until we have made a meaningful impact on these global issues, so it is the law of our land that government should meet this condition to address the world’s problems.

A number of years ago, many would have said that this would have been unachievable; yet people came together and decided we would achieve it. The fact that we have done so gives us an unparalleled opportunity within the OECD and the wider donor community to shape thinking in the future and, indeed, to mould these priorities. We are assisted in this in having in the UK the development body most highly regarded in the world.

At the start of the millennium development goal period, many would have thought that eradicating malaria, for example, was similarly a worthy ambition but one hardly capable of being achieved—yet my noble friend indicated the progress being made. In a report published today and launched in another place by the Secretary of State for International Development as we debate this Motion, the results of such hard policy to meet bold ambition can be seen. Between 2000 and 2015, the rate of new malaria infections has reduced by 37% and the global malaria death rate by 60%. This is a profoundly strong record and one that simply could not have been possible without ODA, including, critically, that from the UK, working in partnership with our global neighbours afflicted by high levels of the disease. The ambition for a further 90% reduction in malaria incidence and mortality by 2020 is achievable, but only with additional resource. Critically—this is where I agree with the noble Lord, Lord McConnell—resource is needed now to create the impact for the future, rather than delay to the level of support.

I use the example of malaria as it highlights to me what can be achieved across all 17 goals. Increased ODA, with a bold ambition and clear and accountable work streams to deliver it, can see real impact. That is why I have been extremely disappointed with the position the EU as a whole has taken—on behalf of the richest region on the planet—that EU countries would only catch up with the UK by the end of the SDG period in 2030. This is shameful. Although I welcome the Addis Ababa Action Agenda, the A4, the dispiriting part of it was the lack of ambition on finance from the most developed nations—critically, from the EU.

I know that the A4 is for the whole term of the SDG period, but I do not want this to be the final word from the EU perspective. The UK assumes the presidency of the EU in July 2017. I do not want it to be wholly subsumed by angst about our relationship with the EU. I want the first item for the UK presidency to be to convene an EU ODA finance summit where we have a new EU position to accelerate the delivery of the 0.7% target. I want it to be brought forward for each EU member by a decade. That means signalling to our neighbours now that they must commence political and parliamentary work to accelerate support between 2015 and 2020.

We know from our experience in the UK that this can be done. It is not easy; it is sometimes controversial. I saw that for myself having to respond to amendments during the Bill’s passage, but we in the UK must take the lead, and it must be ratified under our presidency.

The successful delivery of the goals will make a meaningful difference to humanity. Of course, it has not proved easy to agree on the 17, as indicated by the noble Lords, Lord McConnell and Lord Chidgey. Some have argued that 17 is too many. I want to focus on goal 16, outlined by the noble Lord, Lord McConnell. In many respects, all the other goals cannot be delivered and we cannot create the long-term basis on which development will be successful unless meaningful improvements are made within that goal.

Paragraph 16.7 of the draft resolution states that we must,

“ensure responsive, inclusive, participatory and representative decision-making at all levels”.

That is very welcome, but as the noble Lord, Lord Chidgey, said, “parliament” is not mentioned. Interestingly, it is in the Addis action plan, as a footnote, but not in the goals themselves. The resolution does not draw sufficient attention to the necessity of each developing nation to have a functioning and supportive parliament. Without a parliament properly resourced, free to hold government to account and scrutinise priorities, and to debate and agree rule-of-law solutions to development issues, we will struggle to achieve meaningful impact of the SDG ambitions across all the different areas. Many of the barriers to the effective delivery of the SDGs—corruption, maladministration, poor decision-making, donor countries dominating the policy agenda over recipient countries—are often symptoms of the lack of a properly functioning parliament.

I understand why “parliament” was missing from the draft resolution, but I believe very strongly that building capacity and parliamentary strengthening is of major importance. It pained me to read the IDC report from the Commons in the previous Session, which highlighted the incongruity of the UK paying the US National Endowment for Democracy to deliver parliamentary strengthening work on behalf of the United Kingdom. That is not an appropriate answer.

Yesterday, I was at a very good parliamentary strengthening event where the CPA, the WFD, the British group of the IPU and others—parliamentary clerking staff and the National Audit Office—were together. We have the best foundations in the UK Parliament to develop much stronger support for parliamentary strengthening. It is a challenge to us in Parliament how we use the fantastic skills available to us.

I end on the second part of the goal, which, as the noble Baroness, Lady Mobarik, mentioned, concerns abuse, exploitation, trafficking and all forms of violence against and torture of children. It is of course welcome, but there needs to be strong consideration of the detailed outcomes and how it will be developed. Too often, children are systematically used in areas of conflict or dispute by protagonists. It is one of the most insidious examples of war crimes. In some examples, we see children used politically, knowing that they are the next generation which can be targeted for future conflict.

Ten days ago, I was in the Occupied Territories in the West Bank, where the incidence of child detention by the IDF remains high. Children are arrested under security law, not civil law, often in the middle of the night. They infrequently have their rights read to them in Arabic, if at all. More than 90% have testified to being hand tied, and 80% hooded, in contravention of international standards and calls from our FCO that that practice end. As I left Hebron that evening, I saw a child of no more than 10 years old escorted away by three soldiers—something which would have an impact on any of us used to our approach in the United Kingdom.

Of course, there is the wider humanitarian aspect: 100,000 children born as refugees in the Syrian crisis; 5 million going without education; 10 million at risk in Yemen. None of these goals will be successfully achieved if we do not focus our resource on children and also on increasing the level of ODA support. We are less than 1% of the world’s population but we have a considerable role to play. I give the Government my full support in making sure that we work with our colleagues around the world to deliver on these goals.

International Development (Official Development Assistance Target) Bill

Lord Purvis of Tweed Excerpts

Friday 27th February 2015 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, I similarly acknowledge the wide experience of those who have put their names to the amendment. I acknowledge that one of the signatories, the noble Lord, Lord Turnbull, is a distinguished ODI fellow, and I do not question the commitment that noble Lords have to international development aspects. However, I do not accept the amendment and I hope to explain why. I will avoid some of the wider aspects that are more relevant to further groupings that we will be debating.

First, as a practical step of good legislation, the reference to a “spending round” is deficient because it has no definition in statute or standing in law. The House of Lords Library conducted a search of the legal database of all primary and secondary legislation for me, and there is no reference in statute to what a spending review may well be. Spending reviews or spending rounds, as the Treasury itself says, are interchangeable terms, and the only reference there has been came in Explanatory Notes referring to statements by Ministers. The amendment would therefore open up a high degree of potential confusion in primary legislation, without a definition or legal clarification of what a spending round may be, of what period is involved or of who conducts it.

However, that is not the essence of the amendment, which is whether, once a Government have announced their intention to meet our long-standing 0.7% commitment—it is not a new commitment—there would be a secondary power for the Treasury alone to authorise exactly the same thing but post hoc, and on an annual basis. This would be after the departmental round of discussions to which the noble Lord, Lord Reid, referred. There would therefore be a secondary process—the first part of the discussions would be on how the departments responsible for delivering ODA were conducting their business, and the second would be on whether the Government would actually meet the 0.7% target. Both are not compatible processes of discussion with the Treasury.

The argument about lack of control is not therefore valid, because the processes that DfID has to carry out, including the annual estimates that are then brought to Parliament, will continue on an annual basis. Indeed, on coming to the House this morning, I went through the main estimates for 2014-15. If the noble Lord, Lord Ramsbotham, and my noble friend Lord Marlesford wish to refer to the main estimates, they will see clearly that the Department for International Development estimates include those for the Department of Energy and Climate Change, the Department of Environment, Food and Rural Affairs, the Ministry of Defence, component parts of the ODA and also the FCO. It takes a wider consideration, and these estimates are part of the discussions about delivering best value for the aid programme that we wish to carry out.

The Bill already therefore creates the duty for the Secretary of State to demonstrate value for money in other parts of the Bill, as has been mentioned—including by the Minister and noble Lords opposite. There is therefore a very high level of accountability to Parliament. The question is: is this level of accountability unique, as well as maintaining the existing processes and the level of scrutiny by the Treasury? The level of accountability is unique. This Bill is unique and the Department for International Development is an unusual department. That is why there are frameworks with independent verification not only through ICAI, the National Audit Office and, indeed, our international partners in the OECD Development Assistance Committee—which carries out both peer review and annual reviews that we report to—but also in Parliament by the International Development Committee. That framework, far from exempting proper scrutiny, provides arguably a much higher level of scrutiny of delivery than other departments.

I wish to address the trade union of former Permanent Secretaries with a quote from the director-general of finance at DfID, Richard Calvert, who gave evidence to the International Development Committee in the Commons. He was asked about almost exactly this point regarding good budget management in the department. He said that,

“now we have reached 0.7% and we are into delivery of 0.7% at a broadly consistent level, there is a lot to be said, from a departmental management point of view, for keeping a steady budget. It comes back to the point about living within annual control totals anyway. We are going to have to live within an annual financial-year control total. From my perspective, having that broadly steady and then just managing 0.7% within that is more straightforward than having that zig-zagging up and down, particularly having late adjustments because maybe you have undershot or overshot in a previous year”.

That is rather compelling.

Finally, most of us who were here at Second Reading were taken with the contribution of the noble Baroness, 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.]

This Bill is one part of correcting that, and in addition to the level—in fact, the increased level—of proper scrutiny for value for money, I hope that that will persuade the noble Lord not to press his amendment but to withdraw it. If he is minded to test the opinion of the House, I respectfully invite it not to accept the amendment.

[Lord Butler of Brockwell]

My Lords, I am very grateful to the noble Lord, Lord Purvis, for his reference to the noble Lord, Lord Turnbull. As he said, the noble Lord is a strong advocate of overseas development aid and wanted me to express his regret that he could not be here today.

I hope that the House will agree that some very powerful arguments have been made in favour of the amendment. I am very glad that they were not all Treasury arguments. There are wider arguments for it. I have listened carefully for what reasons there might be to treat this programme uniquely. Some of the arguments have been answered. The noble Lord, Lord Davies, argued that the purpose of the legislation is to send a message. Frankly, I am always a bit allergic to the idea that the purpose of legislation ought to be to send a message. It is really not the purpose of legislation. What matters are not the words or any law we pass but what we do. The UK’s record in that respect is, and I hope will continue to be, very good.

The noble Lord, Lord McConnell, said that one of the values of the Bill would be that it would allow the debate to move on from the input to the output. I agree that what we should concentrate on is the output, but we cannot ignore the input. The purpose of looking at the input is precisely to be able to challenge it, look at what the programme is achieving and ensure that it goes on achieving it. The noble Lord, Lord Anderson, referred to Select Committees being an alternative machinery for doing that, and now, as a parliamentarian, I am wholly in favour of Parliament being effective in this way and of the work of Select Committees. However, that is after the event. What we are talking about here is the processes in government before the event, and planning programmes properly.

Finally, I come to the argument made by the noble Baroness, Lady Northover, and the noble Lord, Lord Purvis. I say with great respect to her that it is, I am afraid, a misunderstanding of the process of government to say that the consequence of the amendment would move responsibility from a Secretary of State to the Treasury. The Treasury is not being given unique control by this amendment. The Treasury is part of the Government. Of course, if the Government and Secretary of State reach the conclusion that 0.7% or a higher figure should be spent on overseas aid, the Treasury has no independent right or way in which to countermand that. What we are talking about here is a collective process in which Treasury scrutiny performs a vital role.

The noble Baroness, Lady Northover, and the noble Lord, Lord Purvis, said that the Treasury will continue to do that within government. I say to them, with great respect, that if that is what they are saying, surely this is a reason why they can accept the amendment. I notice that she nods her head—actually she shakes her head—but surely those two points follow from each another.

With gratitude to those who have taken part in the debate on both sides, I am afraid that I cannot find myself persuaded that there are reasons to treat this programme uniquely. I am realistic enough to know, with the Opposition and the Government seeking to get the Bill through in this pre-election period without further amendment, that the prospects of this amendment succeeding are not great. However, I ask those who share my view that the amendment would be in the interests of good government, proper process and achieving the best value for money for the programme, to support it and express their opposition to rushing through a Bill in this way, which does not promote its objectives but in many ways undermines them. With that, I beg leave to test the opinion of the House.

--- Later in debate ---

The Bill goes on to state that the Minister should explain what steps will be taken to make sure that the target is reached the following year, if it has been missed in a year. We know exactly what will be the outcome of that: the Secretary of State will simply say, “We are going to spend more money in order to reach the target next year that we have missed this year”. Again, that seems rather pointless and a very predictable statement to be made.

[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.

[Lord Purvis of Tweed]

May I help my noble friend? These amendments consider a rolling average of meeting the target, not a rolling average of former MPs of my noble friend’s family.

[Lord Brooke of Sutton Mandeville]

I do not know on what amendment I am going to make this speech if I do not make it on this one. But I do take the point, and I am extremely grateful for the intervention.

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[Baroness Northover]

I can inform my noble friend that the DAC measures this on an annual basis. That is why the UK needs to report its ODA spend to the OECD in that way. Making this amendment to the Bill would have no bearing on our international reporting requirement, and it is crucial for clarity, consistency and transparency that we continue to report to the OECD in this way.

Secondly, regardless of this amendment, DfID will still have an annual budget, allocated by the Treasury, as we discussed in much detail in the last amendment, which it will plan to spend according to agreed forecasts. DfID will continue to seek funding from the Treasury that would enable the UK to meet the 0.7% ODA target from year to year. This amendment would serve only to risk reducing somewhat the predictability and consistency of the size of the annual budget, again something we addressed in the last amendment. I can assure the House that annual limits and measurements do not prevent long-term planning, which is what I think noble Lords are seeking to do in their amendments. As I said in response to the last amendment, delivering 0.7% GNI as ODA annually provides the United Kingdom with a relatively steady ODA budget each year. This allows for better long-term planning and more effective use of resources over multi-year periods, providing greater certainty over funding levels than would happen if this same target were measured over a five-year period.

DfID has a flexible portfolio of programmes and all of DfID’s spend is subject to a rigorous value-for-money assessment. Due to the dynamic nature of DfID’s portfolio, it is reasonable for programmes to be accelerated and decelerated to accommodate emerging priorities such as the crisis within Syria, for example. In its reporting on managing delivery of the 2013 ODA target, the National Audit Office found no evidence that DfID had failed to deliver value for money in the programmes contributing to the delivery of the ODA target.

My noble friend Lord Lamont expressed concern about measuring the ODA:GNI ratio. There is a clear and agreed statistical process which is overseen by the Office for National Statistics for reporting the ODA:GNI ratio. This enables a final figure to be reported in the year following the year in question. Of course, GNI estimates can and do vary. However, estimates are updated on a quarterly basis during the year in question and the method for assessing 0.7% allows for a reasonable level of statistical rounding to accommodate modest last-minute changes.

The noble Lord, Lord Lipsey, and my noble friend Lord Lamont were also concerned about a potential rush to spend at the end of the calendar year. This is something that we addressed both at Second Reading and in Committee. I would like to reassure noble Lords once more that this is not the case and that there are mechanisms which the department uses to ensure that it spends its money in a strategic and long-term way. As noble Lords will be aware, the spending around the end of the calendar year 2013 was in part because there are some bills which always come in during December. Our bill for the EC attribution always comes in in December. Deposits of promissory notes for the Global Fund to Fight AIDS, Tuberculosis and Malaria and the World Bank are concentrated at the end of the year. I would dispute the suggestion that contributions to the global fund would be a less effective use of resources. I am sure that my noble friend Lord Fowler would certainly dispute that. Reaching the poorest through an organisation like that is often the best use of such funding. The NAO and the OECD DAC have recognised this good practice and have given their assurance that the Government have robust processes and mechanisms in place to manage those budgets.

My noble friend Lord Howell mentioned ways of making sure that we are contributing to development other than through grants. He will be well aware, for example, of the CDC and the contribution that DfID can make through that organisation. The Government are able to invest in a wide range of activities of which I am sure he would be supportive. They lead to wider development and can also contribute in terms of ODA. I will be very happy to give my noble friend all the details of what DfID does in that regard. As I said in response to the last amendment, giving 0.7% of GNI as ODA annually provides a steady budget.

I was extremely glad to hear about the family background of my noble friend Lord Brooke, which rather differs from my own. However, that said, I hope that noble Lords will be prepared not to press these amendments. I understand what they are arguing for, but I would like to reassure them that there is a strategic long-term plan, and adopting 0.7% enables us to deliver it more effectively. We report on it on an annual basis, but that does not mean to say that it is simply an annual budget. It is a longer-term, strategic approach to what we wish to achieve through development. On the basis of that, I hope that the noble Lord will withdraw his amendment, but if he decides that he wishes to test the opinion of the House, I should make it very clear that we will oppose it.

[Lord Purvis of Tweed]

My Lords, I do not think that any new arguments have been put forward on Report on these amendments, which are identical to those we debated in Committee. I do not think that the case has been prosecuted, but let me respond to some of the points that have been raised. I believe that far from improving financial management or making the delivery of ODA more effective, these amendments would actually create a worse situation. In addition, they do not acknowledge that we would have to continue to report annually in accordance with the OECD Development Assistance Committee requirements along with what has not been mentioned, which is the International Development (Reporting and Transparency) Act 2006. These would carry on, quite rightly, because the annual target, which is based on the UN annual target for the number of annual transfers that are direct from government, and the OECD DAC annual reporting mechanisms are both there.

[Lord Forsyth of Drumlean]

Will my noble friend give way?

[Lord Purvis of Tweed]

Of course I will because I know that my noble friend enjoys intervening on me. It would be churlish to refuse him another opportunity to do so.

[Lord Forsyth of Drumlean]

I have to tell him that I can think of better things to do on a Friday morning. He keeps referring to an annual target, and it is true that the Bill provides for one. The target that was adopted by the UN is that:

“Each economically advanced country will progressively increase its official development assistance to the developing countries and will exert its best efforts to reach a minimum net amount of 0.7% of its gross national product at market prices by the middle of the Decade”.

That, by the way, was in 1975. It makes no mention whatever of having to do that each and every year.

[Lord Purvis of Tweed]

My noble friend is repeating a point he put to me in Committee and says from a sedentary position that I was not listening. I did listen, and not only did I listen, but I responded. The whole UN resolution is the context. The 0.7% is one part of it and it was based on the Pearson Commission report which analysed what the annual transfers were going to be with regard to direct aid from countries that adopted the target. It is perfectly clear. My noble friend says that he has better things to do than intervene on me, and I have better things to do than to respond to that type of intervention.

[Noble Lords]

Oh!

[Lord Purvis of Tweed]

Perhaps I may now restore the tone and tenor of the debate and respond to the noble Lord, Lord Brooke, and the invitation of the noble Viscount, Lord Eccles, to address the drinkers in the Black Bull on how they would understand this to work.

I can answer that by quoting the Permanent Secretary at DfID. On 4 February, he was asked specifically by the International Development Committee about the consequences of moving from an annualised basis to a three-year rolling programme. He said to the committee:

“If you take a rolling three-year programme, what that means is for years one and two you have a lot of flexibility. In the third year, by definition, you have to hit a precise number, because it is the end of the rolling three-year period. In the fourth year, you also have to hit a precise number, because you are dealing with what you had in years two and three. In the fifth year, you are dealing with years three and four. In a rolling programme, you get the benefit in the first year and possibly the second year, but not at any point thereafter. You are locked in after that”.

We now have the annual target and the framework of accountability, involving both the ICAI and Parliament. Now we have moved on from understanding that we are seeking to meet the target, we have a degree of stability. That is a very strong argument. However, of course, we are not starting from this year as a base. The target was in the 2010 spending review, which built on the spending review in the previous Administration. That type of long-term planning already existed.

I hope that the noble Lord, Lord Lipsey, understands that there is not only that spending review strategic planning to maintain the target going forward but there are the annual controls with regard to the relationship to the annual estimates that Parliament scrutinises and the international reporting on our undertakings. We also now have DfID’s monthly reporting of the programmes that are under way for which ICAI provides independent evaluation.

The final point raised related to multilateral giving and whether or not this skews the way that the profile of expenditure has been delivered.

[Viscount Eccles]

My noble friend mentioned my name. I hope he will accept the clarification that he did not answer my question. The thrust of my question was why the promoter of the Bill thought it necessary to introduce a flexibility that allows the Secretary of State off the legal hook. That is the question that my friends in the public are going to ask me. They are going to say, “Legislation is about passing law, and that law needs to be enforceable. You have included a clause which means it is not”.

[Lord Purvis of Tweed]

I was going to come back and clear up that point. However, I will finish this element first. The Bill provides for the very form of independent evaluation that can take into consideration external factors that may have been at play if the target has not been met. That independent evaluation then reports to Parliament.

I am glad that the noble Viscount intervened because he pre-empted exactly how I was going to conclude. Ultimately, the framework provided by the Bill allows for Parliament to have the powers to do its job and hold the Government to account when they make a promise. I hope that that would be sufficient not only for those people in the Black Bull but for Parliament. There is important evaluation and monitoring of these programmes. I hope that the explanation from the Permanent Secretary of DfID showing the deficiency of moving to the programme that the noble Lord, Lord Lipsey, has argued for is sufficient for the noble Lord to withdraw the amendment. I am not in a position to accept it.

[Lord Lipsey]

My Lords, I thank all noble Lords who participated in this debate. I am sure that the political history of the Brooke family will be required reading whenever experts assemble to discuss aid issues for many years to come.

This debate has established one thing, which is that there is no UN resolution requiring annual aid targets, and the fact that it happened to be mentioned in the Pearson report seems to me a very feeble response to that point. However, there is a second issue, which goes to the Minister’s reply, too. Yes, we have to report annually, but “report” is not the same as “attain”. Nearly all the reports coming to the OECD are from countries which have had to say that they have not attained the target. The target will, this year at least, be attained by the United Kingdom, but nearly every other country has failed to attain it. A reporting requirement should not be confused with a requirement to spend the money.

There is more business to get through. I will have to draw what comfort I can from the Minister’s favourable references to flexibility, for which I thank her. With that, we should leave this issue until the repeal Bill for this Bill is introduced, which I confidently predict it will be within the next few years. I beg leave to withdraw the amendment.

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[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.

[Lord Purvis of Tweed]

My Lords, I thank my noble friends for their amendment and the case that they made, which I understood clearly and which was sincerely made. However, I cannot accept the amendment and shall explain briefly why. In doing so, I hope to give satisfactory answers to the points that they made.

As I understand it, the amendment would place a duty on the Secretary of State to report to Parliament if they had not met the target because the budget was low at the start of the year, they had no ability properly to deliver the expenditure towards the end of the year and this mismanagement would persist in future years. However, not only are there other parts of the Bill that provide for independent evaluation of the impact of the aid in the widest terms, but this Bill complements the 2006 Bill, which also requires statistical reporting that addresses many of those aspects, too. Together, they provide a proper reporting mechanism on the proper delivery of the budget that DfID will have. Therefore, it is a quite distinct issue from whether there are factors that mean that it is hard for DfID to deliver its budget from year to year. That is a slightly wider aspect to which the Minister responded to very properly.

The NAO report was cited again. It is worth stating that I agree with the report and have sympathy with its finding at paragraph 12, which states:

“The requirement to hit, but not significantly exceed, aid spending equal to 0.7% of gross national income every calendar year means the Department has to hit a fairly narrow target against a background of considerable uncertainty”.

That is of course the case. Indeed, the delivery of aid has often been one of the more difficult aspects in different circumstances around the world. That is why there are a number of tools available to government for the proper delivery of it, either through multilateral organisations or from the promissory note mechanism. They are a positive means of delivering proper budget management. In responding to the previous group of amendments, the Minister indicated, for example, that towards the end of a calendar year DfID provides a £1 billion contribution to EC ODA. That is drawn down in December after approval, funnily enough, by the Treasury. Deposits on promissory notes, the Global Fund to Fight AIDS, TB and Malaria and the World Bank contributions are concentrated at the year end. What this Bill affords is the ability for the UK now to enter into a different form of discussions with its multilateral partners, because we will be moving from a situation where we are seeking to reach the target to one where we have met it and are seeking to sustain that. Not only will we be striving to have better delivery of our own aid programme, but we will have a much stronger standing internationally to deliver this for our partners around the world.

Even in the circumstances where we were meeting the target, as we were discussing in Committee, the NAO report recognised the work of DfID in delivering this. I think that the Bill addresses what my noble friends are seeking to achieve, which is that all factors with the proper delivery of aid will be reported to Parliament and will be afforded proper parliamentary scrutiny. Together with the 2006 Act, this legislation will provide for that ability. On that basis, I hope that my noble friend will withdraw his amendment.

[Lord Lawson of Blaby]

My Lords, I listened very carefully to what the noble Lord, Lord Purvis, the promoter of this Bill in this House, has said, as well as to my noble friend the Minister, who is no longer in her place. I have to say that neither of them went anywhere near addressing the points that I made.

I am glad to see that my noble friend the Minister is now back to grace us with her presence and hear what I have to say. I was surprised that she mentioned Jim O’Neill in this context. Like the noble Lord, Lord Reid, I know Jim O’Neill well, and at no time has he said —nor would he dream of saying—that the 0.7% target is necessary for human development. The 0.7% target is a great irrelevance. Look around the world at the big countries, the G7 countries. The other six have no intention of meeting that target. The ones who are nearest to it, France and Germany, contribute 0.4%. At the other end of the scale, Italy and United States contribute 0.2%. They have no intention of doing any more. Some of those countries are actually reducing the amount they give, for reasons that we have gone through before, which I shall not repeat now.

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[Baroness Northover]

That is an interesting point. The problem with the aid budget is that you do not see the level of continuity and predictability that you see in other government departments, so, in some ways, the noble Lord has put his finger on why we have this Bill.

Several noble Lords have linked aid and defence. Of course, we recognise that conflict is development in reverse, with no fragile low-income country meeting a single millennium development goal. Helping rebuild fragile states will help tackle the root causes of global problems such as disease, drugs, migration and terrorism, and is far less costly than military interventions. The United Kingdom is, and has long been, a global leader in promoting a “whole of government” approach to international peace and security. The establishment of a new, more than £1 billion Conflict, Stability and Security Fund in 2015-16 will support a larger and more integrated UK effort in National Security Council priority countries.

The noble Lord, Lord Reid, rightly pointed to the outstanding contribution that the military has provided in supporting civilian efforts to combat Ebola in Sierra Leone. I welcome, as we all do, that close working and am sure that we will need to develop it further in the future. Some ODA is, of course, spent by the MoD as well as by the FCO, DECC, Defra, DoH and the Department for Education. I come back to my main point: we are trying to ensure that aid is predictable. It should not be tied to the entirely laudable aim of ensuring that defence or other areas are properly addressed. That is why we cannot support this amendment and I hope that the noble Lord will be willing to withdraw it.

[Lord Purvis of Tweed]

My Lords, if the House will forgive me, I will focus on the specific amendment as it affects the Bill. However, in so doing, I should say that I have respect for, and have been highly impressed by, the quality of this important debate, to which the Minister referred, and its imperative going forward.

I believe that a similar debate is taking place in another place today on the resumed Second Reading of the Defence Expenditure (NATO Target) Bill introduced by Mr Christopher Chope. It will be interesting to see whether Mark Francois, the Minister of State for the Armed Forces, responds to that debate. He will no doubt reinforce his opposition to the Bill in the Commons today, and my noble friends may correspond with him to discover his reasons for that.

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[Lord West of Spithead]

My Lords, can I clarify what the noble Lord said and that he accepts that the first duty of any Government is the defence and security of the nation?

[Lord Purvis of Tweed]

I do not think that there is any question that we owe our liberties and freedoms to defence spending, and that is why it is required. Not only that, I understand absolutely the Wales Declaration on the Transatlantic Bond that we signed up to, which states that we will aim to move towards the existing NATO guideline of spending 2% of GDP on defence within a decade. I know that we have a leading role in this and know the strength of the argument made by my noble friends and noble Lords to ensure that the UK continues in this leading role.

[Lord Forsyth of Drumlean]

My Lords, I am a very humble sort of chap. I have sat here this morning, participated in the debate and have listened to former Cabinet Secretaries, former Permanent Secretaries, former chiefs of staff with great experience in defence, former Secretaries of State and former Treasury Ministers. There is an almost unanimous voice saying, “Look, we support the principle but, actually, the way in which this is being implemented is mistaken”. No doubt the Bill will make its way towards the statute book and people will be able to change it in the future. However, on this matter of the defence of our country, we are in territory that is of fundamental importance.

Having listened to the speeches of the noble and gallant Lord, Lord Stirrup, the noble Lord, Lord West, and, speaking from the opposition Benches, a former Secretary of State for Defence, who has held quite a number of other positions—a vast experience of government—I am very surprised that my noble friend the Minister has not said, “You know what? We need to go back and think about this”. I did not grasp whether she was saying that the Government remain committed to a target of 2% or that they would meet their 2% target this year. I shall happily give way to her if she can clarify what she was saying, because there is a degree of confusion about that.

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[Baroness Northover]

I think that my noble friend has missed the elements where I mentioned the way in which the Secretary of State will be held to account for how our aid budget is properly and independently scrutinised.

[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—

[Lord Lawson of Blaby]

If my noble friend will allow me—

[Lord Bourne of Aberystwyth (Con)]

Perhaps I could say that, after the Minister has spoken, only short questions of elucidation to the Minister are permitted on Report.

[Lord Purvis of Tweed]

Ordinarily, I would give way but on the basis of that guidance and a reflection on the Companion, I regret that I will not.

But as my noble friend has drawn me, let me address his amendment. He was referring to whether it would be virtuous to establish a separate organisation to carry out this function. In Committee, I was very clear in citing from the Official Report when my right honourable friend Michael Moore lodged his proposal. I quoted that and need not do so now, but he lodged his proposal and consulted upon it. The Government put forward their reasoned argument with regard to effective independent evaluation. My right honourable friend accepted that argument and the Bill was sufficiently amended. I am therefore satisfied that the Bill as it stands is robust in that regard and does not require the creation of a wholly new and separate quango. We have a structure in place under the Bill that I believe calls for the points that the noble Lord, Lord Hollick, called for. On that basis—and, hopefully, clarification—I hope that he will withdraw his amendment.

[Lord Hollick]

My Lords, I thank all noble Lords who have spoken on this. There seems to be a large measure of agreement, and enthusiastic endorsement of the fact, that the ICAI is the body that is fit to do this. I was particularly grateful for my noble friend’s recommitment to the role that ICAI can play here. “Highly likely” falls somewhat short of a slamdunk, but at this stage it is probably satisfactory. We hope that the words both from the Front Bench and from the noble Lord, Lord Purvis, the proposer, will carry weight as we move forward on the Bill. I beg leave to withdraw the amendment.

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[Baroness Northover]

As I say, this Bill, unlike the discussion on care, which I remember very clearly, has had overwhelming support. There were a lot of Divisions over how best to take care forward, as the noble Lord, Lord Lipsey, acutely knows. Given the overwhelming support within the other place and, thus far, in this place, I hope that the noble Lord, Lord Butler, will withdraw his amendment. If he chooses not to do so and to test the opinion of the House, I hope that the House will reject his amendment.

[Lord Purvis of Tweed]

My Lords, this is a sunrise clause amendment before we debate a sunset clause amendment, neither of which I would accept. Commencement orders come with legislation, usually through secondary legislation to do with the administrative implementation of agreed primary legislation, but usually to do with technical aspects of proper timing for administrative or technical purposes. That is quite different from this measure. The Bill has now had more than 25-and-a-half hours of parliamentary scrutiny. It has gone through the House of Commons and has been tested by Division in both Houses. Once it is on the statute book in this Parliament the proper parliamentary manner in which this would be repealed would be for a measure to be put forward in the next Parliament to repeal it. That would have to be done in the full glare of public opinion after significant debate and, one hopes, after a degree of consensus. Funnily enough, all those aspects are why this Bill was presented to Parliament. All those aspects are there, and that is why I believe it is strong. I know that the noble Lord who put forward this amendment is not like other noble Lords who have indicated very clearly that they oppose the 0.7% target in principle. They have said that it is gesture politics and a dishcloth of a proposal. I know that the noble Lord does not hold those views, but nevertheless I do not believe that this is appropriate. Parliament will have expressed its view on the Bill. I hope that it will be enduring legislation but the proper course would be for a future Parliament to repeal it, if it so chose. Therefore I hope that the noble Lord will withdraw his amendment. If he does not do so, I would ask the House not to accept the amendment.

[Lord Butler of Brockwell]

My Lords, I am grateful to the noble Lord for his generous words. He said that there would be a proper course for a future Government to repeal the Bill, but that that would have to be done in the glare of publicity, which would of course be extremely difficult. The Minister said that the effect of the amendment would be that a future Government would have to decide to implement it. Precisely—that is what I believe ought to happen when we are so near an election and a new Government will shortly be coming in.

This is a point of principle. I regret to try the patience of the House but, for one last time, I beg leave to seek the opinion of the House.

International Development (Official Development Assistance Target) Bill

Lord Purvis of Tweed Excerpts

Friday 6th February 2015 Lords Chamber

[The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)]

I must advise the Committee that if this amendment is agreed, I am not able to call Amendment 7 by reason of pre-emption.

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to the noble Lord for keeping his word this morning when he said that his subsequent contributions would be brief. I am not willing to accept his amendments because I do not think that the OBR is the appropriate body to carry out this function. The OBR has four main objectives, which are perfectly clear: to provide five-year forecasts on public finances, to use public finance forecasts to judge the Government’s performance on fiscal targets, to scrutinise costings of tax and welfare plans, and to assess the long-term sustainability of public finances. It also has an additional role: to assess the performance on the welfare cap.

The fundamental role of the OPR is for future forecasting and to have a relationship with, and report to, Parliament on that basis. However, thanks to the Independent Commission for Aid Impact—reporting to Parliament, as has been indicated previously in today’s proceedings—we now have a wealth of 40 reports, informed not least by the more recent work of the Office for National Statistics. Indeed in the latest report, which I am sure my noble friend has looked at, the ONS is quite clear that there is now a straightforward way of the ONS doing its work, informed by information from the Treasury and DfID and having clear reporting as to whether the UN target has been met. Reporting mechanisms have already been established in law. In addition, the International Development (Reporting and Transparency) Act 2006 is already on the statute book, providing, I hope, much of the satisfaction that the noble Lord seeks.

Given that explanation, and the fact that not only does the Bill offer a framework to be used but existing statutory reporting mechanisms have been in place for nearly a decade, I ask the noble Lord to withdraw his amendment.

[Lord MacGregor of Pulham Market]

I thank my noble friend Lord Purvis for that response. It is very helpful to have it on the record, and I beg leave to withdraw the amendment.

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[Lord Forsyth of Drumlean]

I support my noble friend in respect of this amendment. Our GDP is forecast to increase by more than 3%, which will mean that more than £400 million extra will have to be spent on overseas aid next year to meet the target. That is at the same time as the Chancellor saying that we are in an age of austerity. Given what the Chancellor said in his Autumn Statement and given the OBR’s projections, government spending as a proportion of GDP—or gross national income, if you prefer that terminology—will have to come down. So, as the OBR has highlighted, even health spending will come down as a proportion of GDP. If the Bill goes through unamended, the percentage of government spending that goes on overseas aid will have to keep rising rather than remain constant. Is that the intention—that the spending on overseas development aid not only should be ring-fenced and given special status but should always rise as a proportion of overall government spending? I believe that my noble friend’s amendment addresses that particular anomaly, and I look forward to hearing from the sponsor of this Bill, the noble Lord, Lord Purvis, as to whether that is indeed his intention.

I do not want to detain the House. I just say to the Front Benches that I think that it is absolutely outrageous that the business was changed and that we are dealing with these very important matters at 4 pm on a Friday afternoon, particularly since this is apparently a Private Member’s Bill. I look forward to citing these precedents in future regarding other Private Members’ Bills. If the Government think that this will in some way prevent the House from having an opportunity for all Members to be here to debate these matters, they have another thing coming. There is another stage, Report, when I hope we will be able to discuss these matters more fully. On that basis, I leave it at that in respect of this amendment.

[Lord Purvis of Tweed]

My Lords, the whole concept of seeking to add legislative exceptions to the UK meeting its international obligations, in comparison with other levels of expenditure choices that any Government of the day may make, is not consistent either with our undertaking to meet the 0.7% target or with the Bill. That alone would be sufficient reason for me not to accept the amendment, but there are two others.

The first is that the amendment does not make clear what “health spending” means. Is it health spending in England? Is it United Kingdom health spending? Is it health and social protection? Is it health and social care? Is it current health expenditure or health capital expenditure? The second proposed new paragraph of the amendment refers to education: is it education across all nations of the United Kingdom? I need not go on, other than to highlight the deficiency of the amendment.

The second reason is that the amendment is slightly confusing. I suspect that if I had accepted previous amendments for only one report over a five-year period, this amendment could not have been moved because it calls for annual reporting, which the mover of the amendment said was not an appropriate way to go forward because there should be a single five-year report.

[Lord Lawson of Blaby]

Will my noble friend allow me?

[Lord Purvis of Tweed]

My noble friend will have an opportunity to sum up this short debate. I am sure that, in his argument, he will do the best he can to defend what is an indefensible amendment.

Our legislation needs to be robust. Therefore, I think that the amendment is deficient in comparison with the 2006 Act and its reporting mechanisms—to which no one putting forward amendments has yet referred—and with the OECD DAC’s clear areas of reporting.

Finally, I addressed the points that my noble friend Lord Forsyth made before the break in proceedings today. Just because noble friends do not agree with my propositions, it does not necessarily mean that I have not answered the questions. Nevertheless, with what I hope is clarification regarding the deficiencies of the amendment and why I cannot accept it, in that spirit, I hope the mover will withdraw it.

[Lord Forsyth of Drumlean]

The noble Lord has been asked two specific questions. One was asked by my noble friend, which was whether the Bill is a paper tiger and there is no sanction on any Secretary of State if they do not meet the target, other than that they must produce a report explaining why. With respect to the noble Lord, I do not think he answered it. All he has to say is, “Yes, that’s right”.

The second question I put to him was: is he really content to have the effect of this Bill in an era where public expenditure is being restrained? We hope that the economy will start to grow; the effect of the Bill will be that spending on development aid will rise as a proportion of overall government expenditure, unlike any other programme.

[Lord Purvis of Tweed]

In maintaining our target of 0.7% of GNI, it is perfectly clear what profile GNI will have with the profile of expenditure. That is part of our undertaking. That is not being introduced by the Bill. This is where my difficulty is with my noble friend. The Bill is not introducing that concept; the United Kingdom has adopted that concept over many years and Governments, including the Government of which he was a member. As referred to earlier, it is regrettably the case that while my noble friend was Chancellor of the Exchequer the United Kingdom was meeting only 0.26%, as my noble friend Lady Chalker indicated at Second Reading. Indeed, in the Government that my noble friends were part of, the United Kingdom was the sixth largest contributor to aid. We are now the second largest. I consider that something that the United Kingdom should be proud of, but maybe the noble Lords are in sincere disagreement on that.

I turn to the second aspect of the legislative basis. I said to my noble friend that the legislative basis is clear on the duties on Ministers in the Bill and the duty of accountability that Ministers have to Parliament. That is perfectly consistent with, for example, the legislation that my noble friend supported—the Budget Responsibility and National Audit Act 2011. That established the Charter for Budget Responsibility and placed duties on Ministers to report to Parliament, with Parliament holding them to account and the electorate deciding whether Parliament was doing its job. The Bill does not deviate from that approach; it is consistent with parliamentary accountability and ministerial duties.

[Lord Forsyth of Drumlean]

Again, can the noble Lord answer the question that I asked him? Is he content to have a situation as a consequence of the Bill where the proportion of government expenditure that goes on overseas aid rises while it does not rise for other programmes? That would be the effect of what he is proposing.

[Lord Purvis of Tweed]

I referred to the very useful Library paper which shows that the UK’s contribution to development aid since the 1980s has gone up in absolute terms and, of course, as a proportion of overall expenditure. That is clear and it is something of which I, as a Liberal Democrat, am proud. It means that we have met our international obligations that were set many years ago, and we can now see a more reliable and predictable trend for that expenditure going forward. I take delight in answering my noble friend’s question because it is something that I am proud of.

[Lord Lawson of Blaby]

My Lords, that most recent exchange between my noble friends Lord Forsyth and Lord Purvis has been quite illuminating. I want to mention two points that came up in the discussion but, before I do so, I want to go back to the earlier remarks of my noble friend Lord Purvis. He was completely muddled and I would like to straighten him out. He said that this amendment was inconsistent with the amendment that sought to look at aid expenditure over a five-year period in connection with the target. Even if you look at it over five years, in this country, as in most countries, there is an annual Budget, an annual Autumn Statement, figures for public expenditure and figures for taxation, and they are all, and will continue to be, produced annually, even if the amendment relating to the five-year period, which was withdrawn, had been passed. So that does not change anything at all and there is no conflict whatever.

I now turn to the two matters that my noble friend Lord Forsyth and I raised, and my first point may be what lies, to some extent, behind the question put by my noble friend Lord Forsyth. At the moment, expenditure on aid is running at more than £11 billion a year. That is not far short of what we spend on the police. The police are not a protected programme and therefore, inevitably, given the overall policy to curb public expenditure, spending on the police will go down and spending on aid will go up. It will not be long before we are spending more on aid than on the police. No doubt my noble friend Lord Purvis will be, to use his own words, very proud of that, but that cannot go on for ever. You cannot have this ratchet effect year in, year out. We have the danger of terrorism in our midst and the police have all their other duties of catching and prosecuting criminals. We cannot have public expenditure on aid going up and up indefinitely, irrespective of the needs of other heads of expenditure. The technicalities of what education spending and health spending mean do not wash; they are just nitpicking. There is a fundamental point here that needs to be addressed.

However, on the other point that was raised, I am less dissatisfied because the noble Lord, Lord Purvis, has admitted that if a future Government—we know where the present Government stand—take seriously the problems of spending on the police, the health service and education, and take the view that they cannot properly continue to increase aid spending, the term “legally binding” does not amount to a row of beans because all they have to do is present a statement to Parliament explaining why they are not increasing aid spending and are falling short of the 0.7% target. That is a great relief, and it will be a great relief to the people of this country. The commitment is a bit of a paper tiger. With that, I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Northover]

What I am saying—I hope that it is clear—is that DfID needs to decide how it is going to spend its money. It was always known from 2010 what the trajectory was of that DfID budget. I think that the noble Lord was a member of the Economic Affairs Committee that reported in 2012 and took its evidence in 2011. At that point, that escalation had not occurred and the committee rightly expressed concern about that. However, all the reports thereafter have looked very carefully at whether that escalation was effective and value for money. It has been found to be a rigorous process.

We are now at 0.7%. We are not into escalation, but these multilateral organisations, which were stress-tested through the multilateral aid review in 2010-11, were judged to be value for money for the reasons that I have given. Bilateral programmes can be very limited in a very limited number of countries. What Gavi can do in sourcing vaccines, investing in research and so on and in involvement in many different countries can be much more effective. That is why DfID is a strong supporter of such organisations.

[Lord Purvis of Tweed]

My Lords, I thank my noble friend Lord Astor for his amendment, for being consistent with the points he raised at Second Reading and for the manner in which he did it. I am most grateful for that, and I will attempt very briefly to address his points. In so doing, I wish to put on record my appreciation for the points that the Minister made. There are two aspects to this: forward expenditure, which is part of wider plans in existence, and the possibility of other factors which mean that, outwith the scope of the responsibility of DfID, the international target would not have been met. I suspect that that gets to the core of my noble friend’s amendment.

On the first point, paragraph 15 of the NAO report has been cited. I am sure it was an oversight that paragraph 16 was not referred to. That states:

“Promissory notes accounted for 19% of the Department’s ODA in 2013, similar to the level in 2012”.

Given the NAO’s findings, I do not think that this is an issue that needs to take up much more of our time in Committee.

Let me address the point made by my noble friend. The question is whether elements of this Bill complement the International Development (Reporting and Transparency) Act 2006 and the existing mechanisms through which DfID, the Treasury and the ONS report on information to do with programme profiling, budget decisions and external factors and provide sufficient information to allow Parliament to understand why a target has not been met. With the mechanisms that we already have in place—including, importantly, Section 6 of the International Development (Reporting and Transparency) Act 2006 on the methods for transparency, where there is provision to specify future allocations of aid, in addition to all the other reporting mechanisms, the work of the Office for National Statistics and the external peer review by the OECD—I believe there is sufficient work within the programme on reporting, accountability and transparency to satisfy my noble friend.

My noble friend Lord Howell made a point about potential external factors and gave an interesting reason. The Minister responded very clearly with regard to that specific case. The Bill affords freedom for external impacts to be reported and then, through Parliament, to be scrutinised fully and for Parliament to determine the justification. On that basis, I respectfully ask my noble friend to withdraw his amendment.

--- Later in debate ---

[Baroness Northover]

Noble Lords can be totally reassured that DfID will continue to be fully scrutinised. My noble friend, who is the owner of the Bill, is about to explain that in detail.

[Lord Purvis of Tweed]

My Lords, as I hope that the House will appreciate, the sponsors of the Bill are responsible for drafting. I know that my noble friends will have read the report of both Committee and Report in another place, where those points were raised and responded to. My right honourable friend Michael Moore was perfectly clear in another place when he said that when he first proposed the Bill and consulted on it, it was an open, public consultation. At that time, he said in another place:

“I said on Second Reading that I thought the independent international development office proposed to fulfil the important function set out in the Bill was a good model, but that I was open to suggestions as to how it might be improved”.—[Official Report, Commons, International Development (Official Development Assistance Target) Bill Committee, 11/11/14; col. 35.]

Far from it being either mysteriously changed or rushed, there was proper parliamentary scrutiny in another place at Second Reading, in Committee and on Report, where the Government did not accept the amendments proposed by Mr Nuttall, et cetera, because it was felt that there was a more effective way to answer the valid points that my noble friend Lord MacGregor has cited. Let me turn to them.

What is the fundamental question that the Bill is asking? In addition to the 2006 legislation, is there for the first time independent evaluation of the value for money of United Kingdom ODA? The Bill will afford that. It goes further. It states that there is a duty on the Government to come to Parliament to explain annually how that independent evaluation is being carried out. That answers the second question raised: not only is there provision for independent evaluation but Parliament will be receiving from government, on an annual basis, how that independent evaluation is carried out. Subsection (2) is a considerable safeguard to Parliament for effective scrutiny of the independent evaluation.

This means that we come to whether a new body is created or ICAI is put on a statutory footing. When we look at all the consideration of how this independent evaluation can be carried out, not necessarily but potentially by one body and informed by the National Audit Office or other bodies, I think it is right that the Bill simply states that the principle for that evaluation will be carried out with flexibility as to what body or bodies will carry out that function. It is important that Parliament should have the ability to scrutinise properly that independent evaluation and how it is carried out. As the sponsor in this place, I cannot accept the amendment but I understand why my noble friend spoke to it. I believe that the elements in the Bill afford that protection.

[Lord Forsyth of Drumlean]

My Lords—

[Lord Purvis of Tweed]

It has been a pleasure to allow my noble friend to intervene on me today, so I would be churlish to prevent that pleasure.

[Lord Forsyth of Drumlean]

I am most grateful to the noble Lord for answering the question which the Minister did not answer in respect of Clause 5(2). He is saying that the Secretary of State will produce an annual report on how he or she is being evaluated. That is not independent scrutiny and reporting. What is needed is an independent body which looks at the department and reports to Parliament, not to the Secretary of State. It is very helpful that the noble Lord should have answered this point because he is saying that Clause 5 effectively says, “The Secretary of State will decide who is going to hold him or her accountable for the programme of overseas development aid, then the Secretary of State will on an annual basis report to Parliament on how well the people reporting on him are doing”. That is a nonsense.

[Baroness Northover]

Do noble Lords have the Bill here? Perhaps my noble friend might bear in mind that the Secretary of State already has to make an annual report to Parliament, under previous legislation. Clause 5(1) says that:

“The Secretary of State must make arrangements for … independent evaluation”,

which is what we have been talking about and is indeed extremely important. Clause 5(2) says that:

“The Secretary of State must include in each annual report”—

the annual report that the Secretary of State is giving to Parliament—

“a statement as to how he or she has complied with the duty under subsection (1)”;

in other words, that the independent scrutiny of ODA has been carried out and that it is 0.7%. I think that the noble Lord is missing the point about the annual report, which is already in legislation and which the Secretary of State must lay before Parliament.

[Lord Purvis of Tweed]

My Lords—

[Lord Forsyth of Drumlean]

My Lords—

[Lord Purvis of Tweed]

My Lords, I will of course allow my noble friend to intervene on my noble friend who intervened on my noble friend intervening on me.

[Lord Forsyth of Drumlean]

I am most grateful to the Minister. She says that the Secretary of State has to make an annual report, which is correct, and that the annual report will enable people to look at how well they are complying with the 0.7% and the rest.

--- Later in debate ---

[Noble Lords]

Oh!

[Lord Purvis of Tweed]

My Lords, I wonder if I may draw this to a conclusion from my point of view before my noble friend sums up his amendments, without going down the sidetrack that some have gone down. As the Minister has indicated, Section 1(1) of the International Development (Reporting and Transparency) Act 2006 states:

“It shall be the duty of the Secretary of State to lay before each House of Parliament each year a report about international aid pursuant to the provisions of this Act”.

It is only Section 3 of that Act that is subsequently repealed by the measure before the House, and indeed that annual report will include a statement about how the arrangements for the independent evaluation of the extent to which ODA provided by the UK represents value for money. That is perfectly clear.

I am satisfied that the arrangements that need to be carried out to provide for independent evaluation should be carried out with the duties provided for under this legislation. It provides flexibility so that it is not constrained with regard to the body that carries that out. It is perfectly clear why that is the position of my right honourable friend Michael Moore, and I hope that that satisfies my noble friend.

[Lord Lawson of Blaby]

Before my noble friend sits down—

[Lord Purvis of Tweed]

Not this noble friend; I meant my noble friend Lord MacGregor.

[Lord Lawson of Blaby]

Yes. I think that we have had sufficient discussion for the day about Clause 5(2), but we have still not had a satisfactory answer about the rather important Clause 5(1), which says:

“The Secretary of State must make arrangements for the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money in relation to the purposes for which it is provided”.

What the arrangements are should be and must be in the Bill. They were originally, because there was a schedule setting up a new body to do it. The schedule was taken out, and there is now a vacuum. We are not told in the Bill what these arrangements are, which body will ensure and evaluate the extent to which the ODA provided gives value for money, and so on.

My noble friend suggested in this amendment, “Why not use the ICAI and put it on a statutory basis?”, and that can be done. That seems very sensible, and I am rather suspicious about the rejection of this amendment, because it suggests that they are trying to weasel out of any effective independent evaluation. If they are not, what are the arrangements for the evaluation? Why not the ICAI, or why not restore the other body that was there originally? That must be in the Bill. I suspect, having heard the noble Lord’s obduracy on this point, that we will have to come to this again on Report. However, it is a very real point. No satisfactory answer of any kind has been given, either by the Minister or by the noble Lord, Lord Purvis.

--- Later in debate ---

[Baroness Northover]

My Lords, I reassure my noble friends in relation to ICAI that it already reports to Parliament via the International Development Select Committee in the House of Commons. The International Development Committee scrutinises ICAI’s work; it holds a public hearing every year to consider ICAI’s annual report, and a special sub-committee has been set up to take evidence after the publication of each ICAI report. The committee also approves ICAI’s work plan. Noble Lords may also be aware—and this would have happened after my noble friend’s Select Committee reported—that a triennial review of ICAI was published in December 2013 and a further review is scheduled for 2016. Triennial reviews are designed to consider whether public bodies such as ICAI are meeting good standards of corporate governance, and so on, and whether they are still needed.

In addition to the above, the National Audit Office and International Development Committee can, of course, already review the independence, efficiency and effectiveness of ICAI if they wish to do so, and also provide regular assessments of value for money within DfID to the Public Accounts Committee of the House of Commons. I hear what my noble friend says about his previous concern being somewhat ameliorated, and I hope that this will give him further reassurance.

[Lord Purvis of Tweed]

My Lords, I have nothing to add from the point of view of the sponsors of the Bill to the reassurances that the Minister has provided. They are satisfactory, and I request that my noble friend withdraw his amendment.

[Lord MacGregor of Pulham Market]

I am grateful for that response, and it encourages me that the discussion that we had on the previous amendment on the role that we were giving to the independent commission is proper and correct, and that we need not have fears on that score. I am grateful to my noble friend for that answer, and I beg leave to withdraw the amendment.

--- Later in debate ---

I very much hope that even at this late stage it is not impossible for the proposer or the Minister to concede that there might be some wisdom in the proposal being put forward. The proposed amendment leaves the 0.7% target untouched; it is concerned only to improve the effectiveness and quality of the aid programme in the new circumstances created by the introduction of the new legally enforceable target. I hope that the Minister will not suggest that the existing arrangements are sufficient. If she were to suggest that, she would imply that the new legally enforceable target has no practical impact. If the existing arrangements suffice, why are we going down the route of a legally enforceable target? I cannot believe that she would argue that the legally enforceable target has no effect on the existing arrangements.

[Lord Purvis of Tweed]

I am grateful to my noble friend for giving way. With regard to this specific amendment, could he inform the House which of the annual reports that have been laid before Parliament under the 2006 Act, and which cover aid effectiveness, policy effectiveness and transparency, does he feel are deficient and have not provided this information?

[Lord Tugendhat]

If I felt it was sufficient, I would not be suggesting the three propositions put down in the amendment. I think that each is valid.

[Lord Purvis of Tweed]

Is the noble Lord saying that the reports, or the information in them, have been insufficient? Could he perhaps give us the years for the reports that he is referring to?

[Lord Tugendhat]

I am saying that the Secretary of State must include in each report an explanation of how the implementation of the 0.7% target has influenced the following—and then the words in the amendment. I am looking to the future. I think that that is perfectly clear. In the past we did not have a legally enforceable target and in the future we will.

[Lord Purvis of Tweed]

My noble friend has just told the House that the reports so far, which have already been provided under the 2006 Act, have been insufficient. For which years were those reports? If he has not read them and if he is not aware of them, that is a problem with the information that he is providing to the House.

[Lord Tugendhat]

I am talking only about the future. The amendment refers quite explicitly to the future. I hope I am repeating myself correctly; I said that if it was suggested that the present arrangements are sufficient, then that would imply that the introduction of the new legally enforceable target made no difference. That is what I was saying. I am not talking about whether the report was insufficient in the past. We did not have a legally enforceable target in the past but we are going to in future. That is why I suggested that new arrangements would be required. So we are looking to the future, not the past, and I should be very interested to know why the proposer and the Minister—if indeed they are not going to accept the amendment—think that new arrangements should not be required in the future.

--- Later in debate ---

[Baroness Northover]

I say to my noble friend Lord Tugendhat that I never expected anything other than full scrutiny of the Bill in this House. He can be assured that I made that extremely clear within my department, as I have done on other Bills in other departments in other instances.

The key issue here is that the Bill is about ensuring that the UK continues to meet its commitment on aid, which it has finally met. I am incredibly heartened by the cross-party agreement on this. As we heard at Second Reading, we know how much this is needed. However, underlying this debate is a sense that this is not the case and that there may not, therefore, be value for money. I emphasise that the Government have a clear commitment to ensuring value for money. I know that the Economic Affairs Committee in 2012 was concerned about the planned scale-up to meet the target because there was a significant increase in the budget. Clearly, the committee was right to raise that issue. However, we have now completed the scale-up to 0.7% and a number of external bodies have looked at this, including the December 2014 DAC external peer review, which said of our scale-up that our,

“Well planned … implementation was carefully monitored … and at the same time, strong efforts were made to avoid compromising the quality of the ODA programme, and progress towards results was regularly reviewed”.

In addition, we have strengthened the evidence base and procedures for project investment decisions. All proposals must have a business case, with proposals for projects of £40 million and above being subject to review through the department’s quality assurance unit. We have invested in strengthening programme management processes, capability and systems to transform the way in which we deliver programmes so that we are better able to tackle the underlying causes of poverty and conflict. We have introduced tighter spending controls. The threshold for ministerial approval of project business cases was reduced from £40 million to £5 million, with Ministers also approving supplier contracts worth more than £1 million. We have increased the use of payment by results. Under this approach, the department makes payments only after pre-agreed results are achieved, rather than up front. We have launched a development tracker online tool to provide more public information on UK development investment in projects. The department has also been commended for its openness. We have also talked in other amendments about the external scrutiny that occurs. I therefore hope that noble Lords are reassured about the level of scrutiny and what we have put in place within DfID.

There may be, at heart, disagreement here. Does the world still need this assistance or not? In terms of value for money, the assumption that because the budget has increased it would therefore be poor value for money needs to be challenged. As to the comments of my noble friend Lord Lawson, I am happy to engage on climate change, but perhaps not now.

[Lord Purvis of Tweed]

My Lords, I am grateful for the opportunity to respond to the points that have been made. I hope that my noble friend considers that there has been proper consideration of all these issues in Parliament and that he does not feel that some Members of this House have a greater right than others to take part in any of the proceedings—whether because of age, experience or anything else.

The Bill repeals only one section of the 2006 Act, which is why I was exploring the existing duty within that Act on Ministers to report. The section that would be repealed requires,

“each annual report to include an assessment of the year in which the 0.7% target is expected to be met”.

However, as I have said on a number of occasions today, because this Bill maintains the position that the target will be met, it will, in addition to the provisions in the 2006 Act, be the mechanism for reporting going forward. Therefore, is it appropriate to include the noble Lord’s amendment in the Bill, or are the provisions in the 2006 Act and in this Bill the correct mechanisms for reporting?

I believe that the mechanisms in the Bill, in addition to those already on the statute book, are appropriate and that the criteria on effectiveness, potential corruption, whether the ODA budget is meeting the UN development goals and all the undertakings that we have made to international organisations—and, indeed, on value for money—are already covered by the 2006 Act and the independent evaluation that will be provided in the relevant reports. On that basis, I invite the noble Lord to withdraw his amendment.

--- Later in debate ---

[Lord Purvis of Tweed]

My Lords, on a number of occasions today I have referred noble Lords to the Second Reading debate. In that debate I said that if this Bill passes, it will be because it is based on an entrenched and wide consensus across the three main political parties, external groups and the public, and it will become an enduring law. If a future Parliament chooses to repeal this legislation it will also be repealing that high degree of consensus. It would also have to be accountable to the electorate, and to some extent, constitutionally, that would be proper.

Therefore I end, with regret, by having to disappoint my noble friend Lord Forsyth. At the end of a long day, I record my appreciation for noble Lords whose support for the legislation Hansard will not be able to reflect—including the noble Lord, Lord Collins of Highbury, on the Opposition Benches, and my noble friend Lady Hodgson and other noble Lords on the Conservative Benches. Hansard does not always reflect the level of support or accurately reflect the opinions of Members in Committee. I hope I have corrected that. In that spirit, I hope that, after sunset, my noble friend will withdraw his amendment.

[Lord Lawson of Blaby]

My Lords, the hour is late so I shall be brief. My noble friend Lord Purvis made a point about this being agreed by all three political parties. That is true. That makes me worry. In my long experience, in most cases—not all, but most—when all three parties agree on something, they are wrong. There is a very good reason why that should be so. It means that the issue has not been properly examined. If there is not a proper political argument back and forth, there is not adequate examination. So I am afraid that the statement he made does not reassure me in the slightest.

As for the amendment before us, although my noble friend Lord Howell said that he disagreed with my noble friend Lord Forsyth, I think there was no conflict; I certainly agree with both of them. As far as my noble friend Lord Forsyth is concerned, I believe that we need to look at this new, greatly expanded aid programme and how it is working out. One of the problems, which has been alluded to briefly, is that the focus of aid is changing and more and more is going to fragile states and to what are often described as failed states. In those states the amount of corruption is absolutely appalling and there is nothing that DfID can do to eliminate that corruption, although it would like to. So one of the things that we will need to examine if there is a sunset clause and we want to renew this is whether we have, not deliberately, produced a machine that has significantly increased the amount of corruption, which is one of the great evils in these countries and, indeed, is one of the great reasons why they cannot lift their people out of poverty in the way that, happily, so many countries in the emerging world have done over the past few years. But there are others that have not, and that is where we are focusing our aid.

One of the most important things is the separation of economic and political power. This is fundamental to development. If people want to enrich themselves they go into the economic sphere; or they go, for different motives, into public service and the political sphere. If you do not have this separation and people go into politics in order to enrich themselves, which happens in a large number of countries, that is where it is so damaging and where aid will not help. That is why it needs to be reviewed at the end of five years.

Another valid point made by my noble friend Lord Forsyth is that the Minister said explicitly that one of the main purposes of the Bill was to set an example to the rest of the world. Fine. Actually, I do not think that is fine; it is not a proper reason for legislation. But leaving that aside, if that is the reason, after five years we can see whether the United States, Germany, France and Italy have followed suit. I am willing to have a modest wager with the Minister that in five years’ time—if I am still alive in five years’ time, which is unlikely—they will not have followed suit. Our efforts to get other countries to follow our example will prove to have failed, and that is another reason why Parliament should have positively to re-enact this legislation, if it wants to do so.

The final and important point made by my noble friend Lord Howell is that the world has changed—a point that I also made in an earlier amendment—and that there are better ways of trying to creating a better world than dishing out development aid. If that is so and we find that other countries are doing a better job by other means—we do not have time to discuss them now, but my noble friend has sketched them—that is another reason why Parliament should be required to take stock at the end of five years rather than ploughing on with this.

This is not chickenfeed: we are already spending well over £11 billion a year on aid. As a result of this Bill, this amount is scheduled to go on rising inexorably, year in, year out, if the economy is growing. We all hope that the economy will grow—even my noble friend the Minister wishes to see the economy grow—and, if it does, this will get bigger and bigger, year in, year out. However, if this is not the best way to achieve a better world in which there is less poverty and more economic development, we certainly do not want to continue with it.

If this Bill becomes an Act, its first five years will be a test bed. We want a provision that Parliament is obliged to address this issue anew at the end of five years. I strongly support my noble friend’s amendment.

International Development (Official Development Assistance Target) Bill

Lord Purvis of Tweed Excerpts

Friday 6th February 2015 Lords Chamber

[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?

--- Later in debate ---

[Lord Forsyth of Drumlean]

In which case my noble friend got it right and that is what we will discuss. If we are to talk about the target, that is what I want to address. My understanding of the Bill and its genesis—the idea was included in our manifesto as something that we would do in the first Session of this Parliament; the timetable has slipped a little—was that we wanted to enshrine in statute the UN target of 0.7%. That is what I thought we were trying to do. The UN resolution made in 1970 in respect of the target that we are apparently signing up to said:

“In recognition of the special importance of the role which can be fulfilled only by official development assistance, a major part of financial resource transfers to the developing countries should be provided in the form of official development assistance. Each economically advanced country will progressively increase its official development assistance to the developing countries and will exert its best efforts to reach a minimum net amount of 0.7 per cent of its gross national product at market prices by the middle of the Decade”.

That would have been in 1975, so we are some 40 years behind that deadline. I point out that the target was 0.7% of “gross national product”, but the Bill before us sets a target for a percentage of gross national income. That is not the same thing.

[Lord Purvis of Tweed]

I apologise to the noble Lord. With that point, is he now addressing Amendment 2, which is in a separate group?

[Lord Forsyth of Drumlean]

No, but I will do so at length—I keep being interrupted—when we get to Amendment 2. I am simply making the point that the target set in the Bill is not the target set by the UN. On a later amendment, we can discuss the implications of that.

My second point is that if we are to put “a” duty on the Secretary of State or whether the Secretary of State has “the” duty in respect of “a” target or “the” target—

--- Later in debate ---

[Lord Fowler]

I am, in fact, comfortable in this position, because I think that we have a particular duty as far as the developing world is concerned. I would not be happy to have hypothecation in every government measure, but here we have a particular responsibility. There is a lack of imagination about what is happening out there in Africa and in the rest of the world. That is the point. If we have a duty, it is a duty in this respect. I am therefore entirely happy with hypothecation in this respect.

[Lord Purvis of Tweed]

My Lords, as the sponsor, I will attempt to sum up this short debate. Perhaps the House will offer me a degree of forbearance as I find myself in the rather difficult position of having to respond to almost a second Second Reading debate, as well as to an amendment that was not moved by the mover but proposed by another noble Lord, an amendment which was then changed by the Chairman of Committees as we were debating it. To respond directly to my noble friend Lord MacGregor, his contribution, I think, got to the core of what this short debate is about. If this is about the essence of the Bill, let us consider whether a “the” should be replaced by an “a” and get to the core of it. The noble Lord, Lord Butler, and others may have been more accurately covering other amendments in other groups, but I will try to address them briefly with this point.

The United Kingdom has an international obligation which it has undertaken to meet over many decades; that is, the 1970 target. I do not consider it a ridiculous target, as my noble friend Lord Forsyth described it; I consider it a target that has been undertaken by the United Kingdom for many decades and under many previous Governments.

[Lord Forsyth of Drumlean]

The noble Lord referred to me but he has misrepresented what I said. I did not say that the UN target was ridiculous. I said that the target in the Bill is not the UN target because the UN target is related to GDP and not to gross national income. If that sounds like a ridiculous point—which we can deal with later in our consideration of the Bill—I would offer an example. Luxembourg might be held to have met the target on the basis of GNI, but on the basis of GDP it would have met 50% of the target.

[Lord Purvis of Tweed]

Yes; and indeed that seems a very tempting preview of the debate on the next amendment. My noble friend Lord Forsyth will no doubt make that point then.

The United Kingdom has given an undertaking to meet the 0.7% target. In 1970, that related to gross national product; now, it relates to gross national income. The target has been further developed by the OECD Development Assistance Committee, which recognises that this is indeed the international standard to meet. It is therefore a mature, settled and respected target in an undertaking which the United Kingdom has given over many decades to meet. It is with considerable pride that we have met it.

[Lord Trimble (Con)]

My Lords—

[Lord Purvis of Tweed]

I will give way to my noble friend in just a moment. The questions about the undertaking we have given are, first, whether it is appropriate to have an annual target; and, secondly, how we can best monitor whether the spend within that budget is being delivered appropriately. These were thoroughly rehearsed in the Second Reading debate. They have been, and continue to be, analysed by the Commons International Development Committee. They have been reviewed by the OECD Development Assistance Committee in its peer review report in 2014, which I quoted at Second Reading. Furthermore, as my noble friend Lord Fowler has indicated, the National Audit Office report has been thoroughly investigating this. I will come to my noble friend Lord MacGregor’s point in a moment after giving way to my noble friend Lord Trimble.

[Lord Trimble]

I am not going to quibble with 0.7%, nor with the idea of the target. However, will the noble Lord address the question about putting a statutory target down and the problems that then arise from the inflexibility of that? The target itself, if you just think of the concept of a target, contains the notion of flexibility. That is the issue that is at stake here: putting down a target that is inflexible and the consequences that follow from that.

[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—

--- Later in debate ---

[Baroness Northover]

I think I just said when this change occurred. I emphasise too that the budget is subject to annual scrutiny, as my noble friend Lord Purvis said in the debate on the previous amendment.

[Lord Purvis of Tweed]

My Lords, I regret that I cannot accept my noble friend Lord Tugendhat’s amendment. Let me explain why. In doing so, perhaps I may correct my noble friend Lord Forsyth and address specifically the point from my noble friend Lord Cormack.

Paragraph 43 of UN Resolution 2626 from 1970 is the target that we have been debating consistently in this country. Indeed, it is the foundation of the Bill. I shall quote from it and perhaps that will answer the question. It states that each economically advanced country,

“will exert its best efforts to reach a minimum net amount of 0.7 per cent of its gross national product at market prices by the middle of the Decade”.

It does not say “gross domestic product”. As the Minister clarified, the UN system of national accounts adopted by the United Kingdom in 1993, during which I think my noble friend Lord Forsyth was a Minister in the Government, had GNI as the successor of GNP as the accepted international comparator of national economic activity. He will know, as he indicated to the Opposition Front Bench, the difference between GDP, which includes foreign economic activity within the territorial area of Britain but excludes those operations owned by Britain externally, and GNI, which includes those and has therefore been considered to be the standard economic comparator. To address the point raised by the noble Lord, Lord Tugendhat, that was adopted by the United Kingdom in 1995—I think that my noble friend was in the Cabinet at that point—for European Union payments and as a standard for European Union classifications. I think that he may well have been commenting on that late last year.

As that is now the adopted framework within the OECD and a successor to the obligation that we made in 1970, any change to the Bill would be a retrograde step, as the Minister explained, because under our obligations in the OECD we would still have to report on GNI anyway.

With that explanation, and having answered the noble Lord’s specific point, I hope that he will withdraw his amendment.

[Lord Forsyth of Drumlean]

What are we doing here? Are we passing law that affects what the United Kingdom will do in terms of its contribution to overseas aid, making that as stable a target as possible, or are we using legislation to make some declaratory statement about what we are doing internationally? It is very important to recognise the difference between the two. As the mover of this Bill, is my noble friend really saying that he prefers a measure that enables countries such as Luxembourg to appear to meet the target, whereas if they were subject to GDP they would have to contribute almost twice as much? Is he really saying that he is happy with that situation?

[Lord Purvis of Tweed]

We are making law and debating an amendment that proposes a change to the Bill. I have explained why that would not be appropriate and why we operate under our system of national accounts, which we adopted 20 years ago when my noble friend was a Cabinet Minister. On that basis, I invite my noble friend to withdraw his amendment.

[Lord Tugendhat]

My Lords, I thank those noble Lords who have participated in the debate. I also thank the proposer, who, in so far as he is responsible for the Bill, sought to meet the points that I raised. However, I have to confess that I am slightly disappointed with the Minister’s reply, and I hope very much that the Government will be able to put up a better performance on Report.

First, the noble Baroness explained, as did my noble friend who introduced the Bill, the external considerations that have led to the adoption of GNI, and I understand those. However, I raised—I think talking about British budgetary procedures is quite legitimate in the British Parliament—the difficulties that will be caused by measuring this expenditure against other public expenditure programmes. That is something that the Government ought to be very much concerned with. Of course, they ought to be concerned with international considerations, but they ought also to be concerned with domestic budgetary considerations. I raised specific questions in relation to those, which the Minister simply did not answer. She did not address the points at all. I also asked whether the Office for Budget Responsibility and the NAO had been asked for their opinions and what they had said. Again, answer came there none.

As I made quite clear when I introduced the amendment, I support the aid programme and its objectives. I have no problem with its increase in relation to national circumstances. However, it will be very dangerous if the aid budget is put into a uniquely privileged position. It is already having privileges lavished on it by a guaranteed share of the national income. That is one big privilege that I think will lead to it coming into disrepute. Now, the Minister compounds the problem by completely failing to take any account of the questions that I raised about the interaction between this budget and the domestic budget.

I very much hope that the Government will be able to put on a better show on Report and, for the sake of clarity, answer the specific questions that I have raised. First, what steps are they taking to reconcile these different measurements in terms of the domestic and international considerations? Secondly, have they consulted the NAO and the OBR, which they certainly should have done? If they have, what did the NAO and the OBR say? If they have not, why not?

In the—I hope not forlorn—hope that the Government will come back with a better answer on Report, I currently beg leave to withdraw the amendment.

--- 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.

[Lord Forsyth of Drumlean]

My Lords—

[Lord Purvis of Tweed]

I have obviously not satisfied my noble friend, but with the clarification provided on the first element, I will give way to him.

[Lord Forsyth of Drumlean]

I am rather alarmed by that, because I thought that I must be misreading the Bill, because I asked: am I right that all the Bill does is require the Secretary of State to reach a particular target, and if he does not reach the target, to come to Parliament to say, “I have not reached it because actually, the economy is in a bad way”, but then there is no redress for those outside? If you had a Government who did not wish to meet the 0.7% target, all that the Minister has to do is to come along and say, “I am not going to meet the target, because I think that the economy is in great difficulty”. If that is what the Bill says, I do not think that that is what the noble Lord has put on the tin.

[Lord Purvis of Tweed]

It is not just what is on the tin but what is in the Bill. I am a proud parliamentarian. I take very seriously my role of scrutinising and holding government to account. It is the duty of Ministers and DfID to bring information to Parliament and for Parliament to do its job. Parliament is perfectly capable of calling Ministers to account; it has in the past, and I am proud to be part of the process to do that in future. On that basis, I hope that the noble Lord will not press his amendment.

[Lord Forsyth of Drumlean]

My Lords, we have had a very interesting debate, particularly that last confirmation from the proposer of the Bill. Many people outside—indeed, many people in both Houses—believed that the Bill guaranteed that 0.7% of GDP would be spent on overseas development aid. Many of those who spoke on Second Reading appeared to believe that that was the case. This is a public relations exercise to tell us that that is what the Bill does. If, as many of us do, we want considerable resources to be made available for development aid, it seems to me perverse as part of that exercise to put in place a system of targets which need to be met in one year rather than five years which, as we have argued at great length this morning, would result in damage to ensuring value for money and proper accountability.

In his response the noble Lord, Lord Purvis, pointed out that much of the development aid goes into multilateral programmes. That is true; a minority of the aid goes on emergency relief and disaster—less than 10%, I believe. It is a small proportion. Many people believe that that is what we are discussing when we talk about £11 billion being spent, when only just more than £1 billion is actually going on that purpose. We are talking about development aid here, and a large part of that goes to other agencies such as the European Union.

--- Later in debate ---

[Lord Forsyth of Drumlean]

I do not know whether the noble Baroness shares my concern, but she is quite right that it was a government decision—and I think it is a foolish government decision to say that we are going to hugely increase the money and the programmes being provided while greatly reducing the people who are going to be responsible for seeing that the money is well spent. Perhaps we might come on to that at a later stage.

The noble Lord, Lord Cashman, made an impassioned plea and told the House that he was very concerned that the discussions which we are having about accountability and value for money would be misrepresented outside this House. I have to say that for him to have tweeted that,

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

is really unworthy of him. I think that I have raised nearly £100,000 for women in India. The noble Lord should not question our motives. It should be obvious from the speeches made and the amendments which are being considered that the intention here is to provide flexibility for the department to use scarce resources wisely.

[Lord Purvis of Tweed]

My Lords—

[Lord Forsyth of Drumlean]

In a second. Indeed, the promoter of the Bill at Second Reading in the other place, Michael Moore, said that it was a duty to all constituents, who he pointed out were struggling in the current economic climate, to advocate what is in the best interests of our country—and I agree with that.

I remind people, when they are talking about spending 0.7% of GDP, that this is not money that we have—it is money that we are borrowing. The proposition here is that we borrow money in order to make a commitment. If you are borrowing money in order to spend it, at the very least you should be absolutely certain that you are getting a sensible return on it, and recognise that you are passing on the burden to the next generation—because borrowing is simply taxation deferred. I beg leave to withdraw my amendment.

International Development (Official Development Assistance Target) Bill

Lord Purvis of Tweed Excerpts

Friday 23rd January 2015 Lords Chamber

Moved by

[Lord Purvis of Tweed]

That the Bill be read a second time.

Relevant document: 15th Report from the Delegated Powers Committee

[Lord Purvis of Tweed (LD)]

My Lords, it is my privilege to be able to support my right honourable friend Michael Moore in bringing his Bill to this House for consideration. I am grateful to noble Lords for their attendance in the House today, and to those who will be taking part in the debate with their great knowledge and experience in this field over many years. In particular, I know that we are looking forward to the contribution of my noble friend Lord Fox, who will be making his maiden speech. I am also grateful to my noble friend Lady Suttie for her support leading up to today.

This Bill, founded upon a strong evidence base and backed by a wide cross-party political consensus, is supported strongly by non-political bodies, academics and charities and will play a major role in securing a long-term level of support for those in the world most in need, both directly through our bilateral aid and through multilateral support with our partners. The Bill also allows for UK leadership in the field of international development to be strengthened even further. Finally, it is in the long-term national interest of the United Kingdom itself.

The UK has been a major contributor to development assistance since the first moves to assess what level of support of official flows—loans at market or near-market rates and direct concessional flows through aid—would be needed for countries to develop their economies faster, in addition to private sector flows, in order for them to deliver improved social outcomes. From the initial work in the late 1950s and the subsequent analysis of the World Bank and the Pearson commission, the 0.7% target was formally recognised in October 1970, when the UN General Assembly adopted Resolution 2626, which included the goal:

“Each economically advanced country will progressively increase its official development assistance to the developing countries and will exert its best efforts to reach a minimum net amount of 0.7 per cent of its gross national product at market prices by the middle of the Decade”.

The decade in question was the 1970s. In many key respects, the UK finally meeting this target in 2013 also met the commitments of our Liberal manifesto, which stated:

“Greater freedom in international trade will assist the underdeveloped countries who need markets for their products. We support the principle that in accordance with the Pearson Report Britain and other countries should contribute 1 per cent of Gross National Product of official aid to developing countries as soon as possible”.

The manifesto in question was that for the 1970 general election.

It is with a deep sense of quiet pride, therefore, that, for the first time since the UN target was established, Liberal Democrats have served as a partner in the UK Government and the UK has met the UN target, making it the first G7 country to do so, and we are bringing a measure to Parliament to entrench this achievement for years to come. We have delivered this in close partnership with Conservative colleagues equally committed in recent years to securing this goal. We have built our joint work on the very strong foundations laid down by the Labour Party, which made considerable progress after its election in 1997, especially in the commitments given in the 2004 spending review and the 2009 White Paper. I therefore echo the tribute that Michael Moore made in the other place to those on different Benches and those beyond Parliament who for many years have worked hard together to increase our development assistance. There was unanimity in the major parties’ manifestos in the 2010 general election to reach the UN target and entrench this in law.

Perhaps I can borrow words from the OECD’s Development Assistance Committee peer review report of 2014 of the UK’s development aid effort:

“Development is a high priority for the UK government. Even in difficult economic times, it remains committed to honouring its commitments and leads by example … This shows that persistent political will, sustained by broad cross-party consensus, makes it possible to achieve ambitious objectives”.

This Bill delivers on this wide consensus.

Clause 1 places a duty on the Secretary of State to meet the UN target in 2015 and in each subsequent year. Clause 2 provides for a requirement on the Secretary of State to make a statement as to why the target has been missed, if it has been. Clause 3 states that the process of reporting is to Parliament only, while Clause 4 consequentially repeals an existing duty on the Secretary of State to report when the target would be met in future. Clause 5 was amended in Committee in the other place, where Michael Moore accepted a government amendment for a duty on the Secretary of State to make provision for the independent evaluation of aid spending rather than the establishment of a new, separate body to carry this out. Consequently, the Schedule to the Bill was removed.

The independent evaluation of the efficacy of aid spending is both important for us to deliver properly on our aid objectives and important for our own public to know that such a large amount of money is being spent properly. This is especially important at the time of budget pressure within the UK. The Independent Commission for Aid Impact, established by the coalition in 2011, is expected to carry out the duty under the Bill, but Clause 5 also places a duty on the Secretary of State to report to Parliament on how the Government carries out the evaluation. Finally, Clause 6 states that the Act is to commence on 1 June this year and extends to the whole of the UK.

I shall address some of the issues raised about the Bill that have been aired before turning to the real benefits that I believe it will bring. These issues fall into four main broad areas: questions about the merits of maintaining the 1970 target in the modern world; whether maintaining the target focuses too heavily on how much is spent rather than what it is spent on; whether meeting the 0.7% target each year has distorting aspects with unintended consequences; and whether the Bill can really bind successive Parliaments.

Recent evidence from development charities, with which I am confident noble Lords will be familiar, highlights the positive change in global development over the past decade—principally because of economic growth in China and India but also in African and Asian economies. The impressive report of the Commons International Development Committee last February highlighted the practice for middle-income countries to graduate from aid in a controlled manner, making more use of technical assistance and climate change for economic development, for example, and loans and support for NGOs.

Support is therefore directed more towards low-income countries, with more support for financing global public goods. In particular, this addresses disease alleviation, health support, nutrition, sanitation and child mortality. The committee’s strong conclusion addressed the second concern directly, saying:

“There has been huge progress in developing countries. The number of people living in extreme poverty since 1990 has halved, and the prospect of ending extreme poverty by 2030 is within reach. Aid is still of critical importance, especially for reaching the very poorest people in Low Income Countries and we believe that they should remain the priority for UK aid”.

The third issue is that there might be an inbuilt instability and an end-of-year rush to meet a binding target, especially if external factors on the calculation of GNI take place. Last week’s National Audit Office report, which I am sure noble Lords will have seen, is an important contribution. The requirement to hit, but not significantly exceed, 0.7% every calendar year means that DfID has to hit a fairly narrow target against a background of considerable uncertainty. However, the NAO’s conclusion was:

“The Department worked hard to manage this very substantial increase in its budget, completing preparatory work to strengthen many of its business processes, increasing the capacity of its workforce, and improving its focus on capturing the results of its spending”.

There is also now a considerable body of work from the Independent Commission for Aid Impact, with its growing reputation since it was formed, and its report to the sub-committee of the Commons International Development Committee also shows a clear reporting mechanism and accountability that is proving its worth.

The fourth major area of concern is whether the Bill is necessary at all, since future Parliaments may change course. The Bill not only entrenches the 0.7% target but entrenches a wide consensus. Repealing the measure effectively means repealing such consensus. Secondly, as the legislation becomes established in the coming years, it will become a core part of our arrangements with fellow countries and international organisations, which will give it extra strength. Both together mean that this law becomes an enduring law. The major benefit is that we move on from debating whether we reach the target to how we improve even more the effectiveness of our budgets.

We start, of course, from a good foundation. By 2013-14, DfID had made major progress towards its 2011-15 commitments, which demonstrate the sheer breadth and depth of British development aid around the world. On behalf of us all, it has helped 43 million people with access to clean water, better sanitation or improved hygiene conditions; supported more than 10 million children—half of them girls—to go to primary and lower secondary school; ensured that nearly 4 million births took place safely with the help of nurses, midwives or doctors; prevented 20 million children under five and pregnant women going hungry; reached more than 11 million people with emergency food assistance; and, as an investment for the long term, provided more than 54 million people—more than half of them women—with access to financial services to help them work their way out of poverty; and, in an area close to my heart, helped 86 million people to hold their authorities to account and have a say in their communities’ development. This is the UK acting as a global citizen, helping people to have citizens’ rights around the world. The Bill allows for this to be a starting point, not a culmination, and—this is of critical importance—allows us actively to shape the global development agenda post 2015.

The UK’s recent record was recognised by the OECD peer review report, which commented on our success in meeting the 0.7% target. It says:

“This commendable, well planned achievement adds weight to the UK’s internationally recognised leading role. Maintaining that level of support until 2015/16 and beyond will reinforce the UK’s legitimacy with respect to the global development agenda”.

The Bill helps us to bring about even more stable sources of funding and allows greater planning with our partners and recipients. This can be witnessed perhaps most clearly in the areas of aid where long-term support is key, such as education, supporting young women and medical research. Cures for the world’s preventable diseases are sitting in the world’s labs, waiting for long-term, secure and stable research funding, and then a secure means of distribution. We will be making a major contribution to shorten that wait. We will retain possibly the most respected humanitarian relief capacity in the world, able to respond quickly and methodically. In all this, we continue to tackle corruption and poor governance, too.

We also know that supporting people abroad is one of the best means of helping people at home. Reducing at source the threat of dreadful incidences of Ebola or other diseases, reducing radicalisation or preventing conflict helps us be safe and healthy at home in a shrinking world and an open, multicultural Britain. But we do what is right and potential benefits then flow—it should always be in that order, with that motive. We should make a contribution in an untied way, without condition, because at the very heart of this is simply: a girl who wants to have an education and to learn in a safe school; a mother who wants to feed, wash and nurture a child with good health, clean water and access to a hygienic hospital; a father who wants to work in an open, free-trade economy, free from slavery, danger or exploitation in the workplace; a woman who wants to be empowered to represent others or to lead in a corruption-free political system; and a boy who simply wants to play outside and have a childhood not in a war zone. We take all these things for granted at home; we must end the situation whereby others abroad think that they are a luxury. We must strive for them to be taken for granted everywhere in the world. Perhaps now, much more than in 1970, we can see the prospect of global development making seismic advances in the coming 15 years, ending extreme poverty and eradicating preventable disease.

I conclude by saying that the UK has less than 1% of the world’s population. Our global footprint is massively disproportionate to the size of our tiny islands. If the UK is a citizen of the world, what kind of citizen must we be? I say we are one that comes to the assistance of others who are in need, does not shrink from challenging those who abuse minorities, refuses to support those who prevent women accessing rights, and never turns a blind eye to those who disempower their own citizens. We establish our place and our identity as a citizen of the world if we uphold our obligations and encourage others to do likewise. This Bill is one major way in which we demonstrate our citizenship of the world. I beg to move.

--- Later in debate ---

[Lord Purvis of Tweed]

My Lords, I am most grateful to all those who have taken part in the debate for their exceptionally well informed, constructive and, at times, moving contributions. I am delighted to receive the support of my noble friend the Minister in this House. The Minister of State, who was present in the House, has offered support in another place. This debate lacked the flowery language that he used in Committee in the Commons. Nevertheless, this is an important debate and I would like briefly to pull together some of the broad areas where I think there has been genuine consensus.

The noble Baroness, Lady Royall of Blaisdon, rightly established the framework for the debate in citing the EU’s designation of 2015 as a year for development, and by recognising that, given that we have reached the target in the United Kingdom, our efforts are now focused on what we do with our partners going forward.

I know it is the practice to reserve the term “noble friend” for those on our own side of the House. However, my noble friend Lord McConnell of Glenscorrodale made a very important remark when he said that this is about not just commitment but also scale because you make a difference by having the scale and the ability. I pay tribute to the work that he did as First Minister of Scotland in bringing this agenda, and particularly support for Malawi, on to the radar of the Scottish Parliament.

I think that most of us—if I may be bold enough to speak for colleagues at this stage—were touched by the contribution of the noble Baroness, Lady Chalker of Wallasey. She reflected on both her frustration and perhaps her regret at having to turn down opportunities because there was no clarity surrounding the future budget. That illustrated more than anything else in this debate why this approach is justified.

My noble friend Lord Chidgey, supported by the noble Baroness, Lady Kinnock, and others, highlighted that many of these areas are difficult because of the circumstances in which we provide this support. They are often in conflict areas and in areas where there is either local corruption or poor governance. That was reinforced most strongly by the noble and right reverend Lord, Lord Williams of Oystermouth, who highlighted that best governance standards are the foundation upon which support can deliver improvements. I agree strongly with the noble Lord, Lord Watson of Invergowrie, and the noble Baroness, Lady Jenkin, in their support for DfID staff. It is worth highlighting that many of them are in East Kilbride. We come down from Scotland each week but a lot of the staff are there. Of course, they are not only in East Kilbride; many, as the Minister said, work in the field.

The noble Lords, Lord Lipsey and Lord Tugendhat, the noble Viscount, Lord Astor, and, to a certain extent, the noble Lord, Lord Davies, highlighted some of the issues that formed a substantive part of the debate. The noble Earl, Lord Sandwich, addressed these points clearly. The noble Lord, Lord Anderson of Swansea, my noble friend Lord Shipley and the noble Baronesses, Lady Flather and Lady Hodgson, all highlighted the fact that significant progress has been made since the EAC report of 2012. There is now much clearer and more consistent reporting and evaluation by DfID, by the Treasury in relation to clarity over budget practice and by the ONS in relation to classifying GNI, with better co-operation between the three.

Michael Moore and I see the Bill not as denying that there are complexities in the budgeting but as an opportunity. If we can resolve these complexities through best practice—we are starting to see that now, as the Minister said and as the National Audit Office has recognised—that will be an opportunity for us to show other major economies with complex budgets how this can be achieved. If we say that we cannot achieve it, what signal will we be sending to those other major G7 economies? We will be saying that it is impossible to do. A stronger signal would be to pass the Bill unamended and to work with DfID, the ONS and others through the aegis of the International Development Committee in another place, informed by ICAI, which is now starting to do globally respected work. I am not simply asking noble Lords to take my word for it as the sponsor of the Bill. The peer review by the OECD looked at all these aspects. It showed areas where it would like to see progress but it also recognised that we have the right model.

I am conscious of the time. Everyone has said what needs to be said. My noble friend Lady Williams highlighted one important area. She asked whether we have developed partnership working, encouraging other countries to become allies, thus adding to the strength of our work.

My noble friend Lord Steel of Aikwood said that there must be something in the Borders air, with Michael Moore and I being associated with this Bill. Perhaps the political air has been infused with his principles and standards over the past 50 years in this area. We are proud to be associated not only with the Bill but with his work.

I am conscious that I have not mentioned all noble Lords who have taken part in the debate—in particular, my noble friend Lord Fox, who made his maiden speech. We were not spared his imagination, nor his commitment to this area. He highlighted that economic and social development are not mutually exclusive, and that the practices of both can secure great success. I am also grateful for the support of my noble friend Lady Suttie. However, as a relatively new Member and a relative baby in this House, I suspect that the support given by the noble Lord, Lord Judd, and my noble friend Lady Suttie has damned me with faint praise.

I am 40 years old. The target for the 0.7% set by the UN in 1970 was for it to be reached in the year in which I was born. We have now reached it. We should never go back to the debate about whether we will reach it but should now focus our minds on how best we spend our support for those in the world who most need it. I therefore hope that the House will give the Bill a Second Reading.

Bill read a second time and committed to a Committee of the Whole House.