Examination of Witnesses (Questions 115-119)
PROFESSOR CATHY
PHAROAH, DR
DAVID HUDSON,
HETAN SHAH
AND KIRSTY
HUGHES
31 MARCH 2009
Q115 Chairman: Thank you very much for
coming to share your views with us. Obviously, at this session
we are concerned about the fact that we have the potential pressure
on aid because of the economic downturn and the falling value
of the pound as well. The interest is to what extent public support
is affected by such developments, and also what is it that the
public do support and how do you measure that and so on. First,
on that particular point, I wonder if you would perhaps give us
your views as to the extent to which the economic downturn may
be having an effect on public support and what are the things
that affect people. The simplest thing when we were taking evidence,
I think specifically in Bradford, we had the classic, fairly downright
Yorkshire line that said "Charity begins at home". The
other thing is that there is a tendency to believe, rightly or
wrongly, that in the United Kingdom there is stronger public support
for aid and development than in other countries, and certainly
as politicians we find, talking to other politicians, they ask,
"How do you maintain the high levels of commitment to aid
and development with your public, which we find so difficult?"
Is there a difference in the UK? I do not know who wants to field
that first but obviously we are interested in the take of all
of you on that question.
Professor Pharoah: I think the
first thing that has to be said is that there is still not a lot
of objective evidence about what is happening to charity income.
There have been quite a few snapshot surveys, perceptual surveys,
of what people think is going to happen, quite a lot of surveys
of their fears and anxieties, and some anecdotal reports of things
that are happening, but we still do not have very much objective
evidence. I could draw on some of the research data that has emerged
from work that I have been involved in and that has come out of
the United States to say a little bit about what has happened
in recessions before.
Q116 Chairman: What do you draw out
of that?
Professor Pharoah: Looking back
to the recession of the early 1990s, between 1990 and 1995 the
overall income to development charities continued to go up, in
spite of the recession, but it fell in two years of the recession,
in 1992 and 1993. It fell in 1992 by 5% in real terms, and it
fell in 1993 by 10% in real terms. A similar picture emerges from
research which has been carried out by a very authoritative centre
in the United States, the Centre on Philanthropy at Indiana University.
They looked at data on giving to charities broadly between 1967
and 2007, so that is 40 years. Over the 40 years, they found that
charity income had grown steadily by about 2.8% per annum in real
terms but in years with a recession giving fell. The shorter the
recession, the less the fall in giving.
Q117 Chairman: In a sense, that is
what you would expect.
Professor Pharoah: Yes.
Q118 Chairman: What about the state's
contribution, which clearly is sensitive but not so sensitive?
Clearly individuals are still looking at their budgets and saying,
"I have more immediate priorities". Does the state do
the same thing?
Ms Hughes: Perhaps I could comment
on both those issues from Oxfam's point of view. In terms of overall
public attitudes, we certainly do not perceive—and there
is a certain amount of survey evidence out there—the public
suddenly telling us: we do not care about poor countries any more;
we do not care about poverty any more. Obviously there is a question
of whether they then put their hands in their pockets and what
sort of donations we get, as well as the question of what money
the state gives, and also the public attitude towards that state
giving. In terms of Oxfam's own position, for instance, although
we are making some cuts going forward to make sure we are resilient
in the face of recession, we have seen very good performance in
our shops. For instance, the Oxfam shops, though we have seen
some decline in donations of articles to the shops—
Q119 Chairman: Do not your shops
benefit during a recession?
Ms Hughes: It turns out that to
some extent that is one of the myths that people trade down. So
far we have been doing pretty well, but obviously we are affected
by variable trends. As I was saying, the donations to the shops
to some extent have fallen, so that impacts on our ability to
sell if we are getting fewer products into the shops. We have
seen some small decline in the support of donations and we are
predicting a fall in terms of planning for best and worst cases
and how that might continue to fall. What Oxfam is certainly quite
worried about is what you said in your second question, the point
about state levels of giving, because we have seen those fall
in previous recessions. For instance, in the run-up to the G20
Summit on Thursday, we have been pushing very hard for governments
to re-commit to the aid pledges they made at Gleneagles in 2005.
To some extent it was reassuring to see the OECD aid figures that
came out yesterday showing that aid in the OECD actually did not
fall overall last year. It did not go up as it should have done
if we were to keep to the Gleneagles promises, but to see it has
not fallen yet when we have in previous recessions seen a fall
is very encouraging.
Dr Hudson: Thank you for inviting
me to come here. The evidence is based on some joint work with
Dr van Heerde of UCL. We have done several papers over the last
year or so, conferences and publications. Our interest in this
very much predates the recession. I can probably give you some
general information about the relationship between public support
and aid and then we could perhaps infer from that forward. We
focus very much on public support for official development assistance
and not charities, so I cannot comment on that. There is a lot
of data out there, an enormous amount of survey data, but very
little analysis of it, so it tends to be reported just in percentage
terms without looking for relationships and changes over time
between these things. That very much frustrated us as researchers,
hence our project. The importance of this is that there seems
to be a really clear assumption that guides the OECD, DFID and
other donors that somehow public support is absolutely essential
for keeping aid high and indeed for increasing it. The good news
is that the survey evidence suggests that public support is incredibly
high and stays incredibly high and consistently averages over
70% across most countries.
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