Draft International Development (Official Development Assistance Target) Bill - International Development Committee Contents

Examination of Witnesses (Question Numbers 42-59)


24 FEBRUARY 2010

  Q42 Chairman: Thank you very much for coming in and helping us with this short inquiry. For the record, would you introduce yourselves?

  Mr Lawson: I am Max Lawson, I am from Oxfam.

  Ms Mpepo: I am Besinati Mpepo, from World Vision, but representing the UK Aid Network.

  Mr Watt: I am Patrick Watt, from Save the Children.

  Q43  Chairman: Thank you very much. You have all given us written evidence and have said you are not very happy with the accountability measures. If you have not heard the discussion, we have been saying what are the sanctions and what are the excuses? First of all, perhaps, you can just articulate what you think the Bill should say and whether or not you have views as to what might be more effective or stronger in making any such legislation effective and accountable to Parliament and the public.

  Mr Watt: Maybe I will start with a few thoughts about the accountability aspects of the Bill. I think the first question is about what are the ramifications of government failing to meet the 0.7% target if this Bill is passed, and at the moment it is unclear whether this is a Bill that requires governments to report on the 0.7% target or to actually meet it. This seems to me a bit ambiguous at the moment on that point. So, on the one hand, it establishes a duty for the government to reach 0.7% but then makes it clear in Clause 3 of the draft Bill that there is no recourse to judicial review, so it is not enforceable through the courts. From the advice from lawyers that we have consulted, we understand this is a fairly unusual state of affairs—this so-called "ouster clause"—which effectively takes a government duty out of court jurisdiction, and it is fairly constitutionally questionable. So I think it is worth the Committee, certainly, investigating that further and questioning whether Clause 3 is in fact appropriate. If we look at other bills that have enshrined government targets, in the Climate Bill in 2008 and the Child Poverty Bill 2009, there was no such ouster clause. So I think we need to ask the question as to why that exists in this draft Bill. That would be one comment, but I will pass to other colleagues.

  Ms Mpepo: One of the concerns coming from the UK Aid Network and World Vision was the reference to some of the possible reasons for non-attainment of the target. What we would recommend is that the reasons that have been stated—fiscal, external and economic reasons—should be removed from the draft Bill. We feel that having them there weakens the Bill. We know that in the economic circumstances we would expect the Gross National Income to be lower and, as such, automatically the 0.7% amount in absolute terms will be reduced. So we would say that those three possible suggested reasons should be removed.

  Q44  Chairman: I am not an expert in drafting bills but is it not slightly odd to have a Clause 3 which says it is not reviewable anyway and Clause 2 to say what your excuses are? One would assume we would need one or the other but not both.

  Ms Mpepo: That is right

  Mr Lawson: We would agree that it does have a bit of a "cake and eat it" feel about it, and I think they need to either commit or not commit. We do also think that (we were talking about this outside) that the people making the financial decisions, the Treasury, need to be more explicitly referred to in the Bill. Holding the International Development Minister responsible for a spending decision is probably not the right place to go.

  Q45  Chairman: Again, you all suggest that the Committee should have a role. The Committee, in fact, has a role whatever happens, because our job is to scrutinise the Department and we always have the right to summon the Secretary of State. Can you be more explicit on what specific role? Do you think the Committee should, on the face of the Bill, have such a role, and, if so, what would it do that it would not do anyway as a Select Committee of the House?

  Mr Watt: I think, as a matter of course, in addition to reporting on this Bill in Parliament there ought to be a session where the Secretary of State appears before the Committee. Not only would Save the Children like to see retrospective reporting against whether the 0.7% target was met but, also, some forward reporting. In some respects, this is a weakening of the 2006 Bill because the 2006 Bill requires forward reporting about the likelihood in which year the 0.7% would, in fact, met. There is now no forward reporting requirement in this draft Bill, and of course the 2006 Bill is superseded by this Bill. I think there is a question there for the IDC in terms of forward as well as retrospective reporting.

  Q46  Mr Evans: You are all just afraid, are you, that government in a recession is simply just not going to meet it, then the Secretary of State with this incredibly worrying penalty that he faces of having to write a letter to say how he is going to achieve it next year, you just think is pointless. Basically, this legislation is hardly worth having in the way that it is framed.

  Mr Watt: I think it is worth having legislation that requires government to report and to report in detail on whether or not it has met the commitments it has made and, if so, how it has gone about doing that. So I think that is worthwhile. I think you are right, at the moment, that the Bill risks mild embarrassment to the government of the day, and, probably, not a lot more. I think that is one reason why looking at the legal enforceability of the commitments is important in revisiting Clause 3.

  Q47  Mr Evans: There is not going to be even mild embarrassment, is there? Can you imagine, during a period of recession, that a government does not reach its 0.7%, writes a letter to say: "Terribly sorry, but we decided to spend the money in hospitals in Britain instead". Where is the embarrassment there?

  Mr Lawson: It is part of our job to provide some embarrassment. I think there is quite a substantive constituency out there who are impressed with the commitment of this Government. We are all agreed that they could have got to 0.7% by now; it has taken quite a long time, but it is good that they are trying to enshrine this in law, and we are broadly supportive of this Bill and making it happen. I think it is important to see a difference between the next two years, getting to 0.7%, and when you are actually there, in terms of the budget discussions. We know this from our Dutch colleagues and our Swedish colleagues, who have been at 0.7% for a very long time; it is actually reasonably easy to have a budget discussion about staying at 0.7%; what is very hard is to give DFID a 13% increase for the next two years in order to get there. I think that is going to be the problem. The political costs of coming back from that target, once we are there, will be substantive. I think it will be quite embarrassing internationally, in the same way that, conversely, Britain is showing enormous leadership on pushing towards the 0.7% as the only G7 country really serious about it. I think it is our job to provide that constituency and I think it does exist; people want us to be at that point. Also, it is a relative thing; it is recognising that this is a very, very small chunk of government expenditure. Our polling shows on a regular basis that the British public think we spend twice, three, four times more on foreign aid than we actually do, so I think it is our job, as agencies, to continue to educate the public that this is a worthwhile investment, and it is not an enormous one either.

  Q48  Mr Evans: It is a little bit off piste, this one but those of us who are contesting are going to be fighting a General Election within weeks, and on the doorstep, yes, we hear all sorts of messages. What would you advise candidates to say (all the political parties are the same on this; we all want to see 0.7%) to people who say: "No, charity begins at home"?

  Mr Lawson: I would certainly focus on how little it is. I think it is about being British, it is about Britain in the world and it is about a cross-party consensus about doing the right thing. That would be the case I would make. The first thing I would say is: "Do you understand just how small the aid budget is?" As I say, in some polls we did a couple of years ago, the average voter thought we spent more on foreign aid than we did on the NHS. It is no wonder that people have these crazy ideas that it is all lost through corruption. So the first thing is this is not much money, and the influence that Britain buys, the benign influence that we have across the world, with this money is incredibly important.

  Q49  Chairman: Specifically on the Bill, obviously, not surprisingly, the Treasury fingerprints are all over it. Simon Maxwell before suggested there should be some automaticity. I used the expression "like a Rooker-Wise amendment" which said, that for example, tax thresholds are automatically indexed unless the Government actually moves against it. As you said, it is a big increase. Would you like to see the Bill saying it is automatic? The Treasury will not like it, of course, and probably will not accept it but it would bind the Treasury.

  Mr Lawson: Once we are there, that would be great. It makes perfect sense that once we reach 0.7% then it should be standard that we stay there. I think that is how it works, and we have that in the Scandinavian nations; that is what people expect to happen.

  Q50  Mr Lancaster: It is fascinating listening to the conversation, not least because, of course, you are all supporting the principle of the Bill. However, Mr Lawson, you have described it as the Bill is almost trying to have its cake and eat it, and Mr Watt you said it actually may well weaken the 2006 Bill, and when it comes to penalties the worst thing is there could be mild embarrassment to the government of the day. Of course, we can all remember the great fanfare when the Prime Minister stood up at the party conference and said that we were going to have this Bill. Now that we have got the reality, we have not even got a Bill; we have a draft Bill. We have a draft Bill the chances of which seeing the light of day before the General Election are—well, perhaps that is something we can pursue this afternoon. Are you not slightly disappointed that despite all the fanfare we have a draft Bill rather than a Bill? What do you think the political motivations were for a draft Bill? After everything we heard—a draft Bill. Why do you think it is a draft Bill?

  Ms Mpepo: It is difficult to say why it is a draft Bill because from the NGO sector, certainly, we wanted to see it as a full Bill right from the beginning. We think that it is a fairly straightforward and simple ask and as such it should have been made full right from the beginning.

  Q51  Chairman: Has Ms Mpepo spoken for all of you?

  Mr Watt: I think you need to press the Government on why it was introduced as a draft Bill rather than a full Bill. I am sure people in this room have got their guesses as to why—

  Q52  Mr Lancaster: What is your assessment? Why do you think, after everything we heard, actually, their mind was changed and we only have a draft Bill? I am asking what your assessment is.

  Mr Watt: Certainly I think there is a concern that this does not become a kind of fairly short-term device to create political dividing lines.

  Q53  Mr Lancaster: Do you think that is possible?

  Mr Watt: I think there is a risk and I think we have seen, very encouragingly, the emergence of a consensus on 0.7% across the parties since 2005. I think that we need to be looking to cement that and make that more durable. I think if this Bill is put forward in the right spirit then that can happen, but I think it is important that it is not used to try to create dividing lines. I think that is a concern.

  Mr Lawson: I would agree with that. It would seem to me that the obvious way to avoid that is for all parties to commit to make it law by the MDG summit in September, just to literally stop it being a political football. If there was full commitment to pass this legislation it would no longer be an issue. We are very disappointed that it is not a full Bill and it is not going to happen in time for the Election, but we still think that it should happen this year, it can happen this year, and the leadership that that would show for the next government, as we run into a series of summits—and we have seen figures recently from the OECD that all the other rich nations are not delivering on their promises—I think it is really important. For us, as Oxfam, we are lobbying on these issues all over the world, and British leadership is really helpful to us, and I think this would help with that.

  Q54  John Battle: In the light of that, it might be good to build party political consensus on a commitment to a "real Bill mark", as was suggested by others outside this room, including me. However, I think it is important to keep the consensus about getting something that works. As the person that put down the Early Day Motion in Parliament campaigning for 0.7% in the wake of the Make Poverty History campaign, for which we had one of the highest number of signatures of any EDM in the history of this House, and we have got this far, I want to now press to say how effective is it going to be, because I do not like just passing a law for the sake of it, if there is a good intention but there is no follow-through and there are no sanctions, as Nigel has said. I want to know from you particularly about the contributions of other departments, because some of you have made an issue on this. If we say we will meet the target and then include the whole of the defence budget, the whole of the refugee and asylum budget and the whole of the climate change budget, we could do it tomorrow, but it would de-nature what development means. Some of you have said that perhaps we need to be using ODA reporting requirements to actually spell out what goes into that 0.7% and what counts? We have got some way, and it is an all-party commitment, that poverty reduction should be the absolute priority of the work of DFID, and we have gone a long way to get that and other countries have not got there—untying aid, and that kind of thing. How would you respond to the question of the risk that the effective use of ODA might be avoided by having that increased reporting requirement built into the Bill? Do you see us going down that line as a way of strengthening the Bill?

  Mr Watt: I think that is important. If we look at what has happened over this current spending round, the share of DFID spend in overall UK ODA has decreased, so more money is going through other departments. That may or may not be a good thing but I think it is very important that we have much more disaggregation of reporting than is currently the case so that it is very clear what has gone through DFID, what has gone through other government departments, what has gone through multilaterals and what has been counted, for example, through the Commonwealth Development Corporation.[8] There are a number of items against which this commitment needs to be monitored, but I think we also need more detail on exactly what the spending, for example, of ODA through FCO, or wherever it is, is going on. That is not terribly clear at the moment from the reports that DFID provides. I also think it would be important for the Committee to recommend that any changes in how the UK reports against ODA are part of the reporting requirement of the Secretary of State, because at the moment the UK does apply the DAC ODA definitions more restrictively than some other donors. It does not at the moment count (at least, we think it does not) UK refugee-related spending against ODA, for example. If that were to change I think it would be extremely important that that is reported on in the year in which that change was introduced.

  Q55  John Battle: We need to be particular. For example, funding for the International Organisation for Migration—does that count as refugee work in Britain or internationally? So there are bits of edges that need to be clarified. Are you saying that we should go down that route of particularist reporting requirements and spell those out in the Bill? How far can we go down that road to tie it down? That is what I am really asking. You can pass a general bill saying that we would like to do good things and achieve targets to tackle poverty in the world without even a figure in it. There is a figure but it is whether we can gather round that figure to define it more. Should we do that on the face of the Bill?

  Mr Watt: I think so.

  Mr Lawson: Yes, I think we would agree. As we have said in our written submission, I think the Bill would benefit from a requirement for the Committee to scrutinise and report on the extent to which the annual targets have been met, in line with the requirements of the International Development Act in 2002. We were very proud and pleased with that Act. There has been a lot of talk recently about ODA definitions or not ODA definitions; the ODA definition is pretty baggy, and what has been quite impressive about this country in the last 10 years it is how we have gone beyond that. Substantively, the quality of our aid is held to a much higher standard and we need to keep that standard. We think it should be enshrined in this Bill so that you as a Committee get to scrutinise that.

  Ms Mpepo: We would agree.

  Q56  Chairman: The fact that the Bill alludes to the previous Act in itself is not enough, as far as you are concerned?

  Mr Lawson: No, there could be an element where you get to scrutinise it in line with the spirit of that Bill, so it is basically focusing on poverty reduction and the commitment of all UK ODA spending in that regard, not just talking about DFID but looking at these other departments. As Patrick says, finding out what they are actually spending the money on.

  Ms Mpepo: I think the fact that it is referring to the 2002 Act, in the definition of where the ODA will be spent, is in itself a positive thing. I think by bringing the report to the Committee on an annual basis, there is an element of scrutiny that can be provided to ensure that it remains in line with poverty reduction spending. I am not sure whether unpackaging the Bill fully to outline what issues should or should not be considered as ODA spending would complicate the Bill to the extent that it would compromise the current cross-party support for the 0.7%.

  Q57  John Battle: It is cross-party support but I can recall conversations over the past years where not a single penny, for example, would have gone from ODA money on policing, yet the debate on fragile states suggests differently; that we should fund policing in fragile states to help them build a police force where there have been conflicts or civil war. So sometimes we change the view of what we want to include as development, and the question is how much that flexibility remains in without tying every penny down. In one sense it is that balance, is it not? The intention ought to be not to let other government departments raid it, particularly defence and climate change.

  Mr Watt: Yes, I think we need to be realistic. Given the current squeeze on public spending, which will become very intense after 2011, the incentives for other government departments who do not have similar spending increases locked in to raid the DFID kitty for their purposes is going to increase. It just seems like a prudent measure to introduce some tighter reporting against individual departmental spend.

  Q58  Andrew Stunell: Can we just deal with the various definitions that there are? You have said that you want better reporting of any changes but you have been rather neutral in your presentation about whether these changes would be in themselves a good or a bad thing. To what extent do you see the wider OECD definitions as worse than the UK ones? Which of those elements would you be more relaxed about seeing included? Which are the ones which you would reject? Are there things in the UK current definition that you think could be tightened up? These are all issues where, as my colleague said in an earlier session, there is a grey area and people can pull in whatever they choose and push out whatever they choose. Could you tell us from your organisations' point of view what opinion you would want to give us about that debate?

  Mr Watt: I think, in particular, it is important for any government to report on actual cash spending on programmes in low-income countries. The OECD DAC uses the definition of Country Programmable Aid (CPA). The public perception is that where aid figures are talked about this is money being spent on poor people in poor countries, but we know that actually that only accounts for, globally, roughly half of all ODA; so an awful lot of ODA is accounted for by other types of expenditure. So I think it is extremely important, as a kind of proxy for the poverty focus of UK aid, to have a clear picture about how much money is actually being spent on DFID programmes in low-income countries. I think that would be one thing. There is a difference between what is covered by the 2002 Act and what is classifiable as ODA. In my understanding of the 2002 Act it covers DFID-voted aid in Parliament, which is a subset of what could be counted as ODA. So already there are things that are being counted as ODA that are not covered by the requirements of the Act about the aid being poverty-focused. I think that is one reason why any increase in non-DFID ODA vehicles could potentially cause concern. I think there are specific items that are currently being counted against the UK aid spend—CDC investment outflows, for example—where I think, at least, it is questionable how poverty-focused that spending really is. I do not know how much detail you want to go into that now.

  Ms Mpepo: More broadly, the OECD looks at aid going towards economic development and welfare, and that in itself can be very broad and can be interpreted by governments in various ways. I think what the UK has done in narrowing it down to poverty reduction has been a very positive thing. Looking at some of the specifics, maybe you would look at not counting things such as scholarships; it also depends on the extent of military spending—I know it is a controversial issue. Debt cancellation is something that the UK Aid Network, for instance, has been calling on to not be counted as ODA spending. There is a whole outline of issues that we would recommend should not be counted as ODA.

  Mr Lawson: I think it is fair to say I would answer your question that we think that the British definition is better than the OECD one, broadly, but it could be better still. That is the simple answer. 70% of German aid to education is spent in Germany on scholarships. That does not happen in Britain, and that is a good thing; we need money for primary schools in Africa, not scholarships to Cologne. I think keeping that out and keeping refugees expenditure out—keeping away from lending; people do not realise how much of Japan and France's foreign aid is still loans, so it is still racking up debts for the countries that they are supposedly giving aid to. I think that is also a very important point about British aid. As Besinati said, we have had lots of spats with the Government over the last few years on the issue of debt relief. I think it is a really important point. It is like the policing point. We can do things in developing countries that are very, very beneficial that do not have to be counted as aid—that is the point we are making. So debt relief is a wonderful thing; it has made a massive difference. I saw it myself when I lived in Malawi for a number of years—it is a really amazing thing—but I think the public sees it as an additional thing that is done over and above aid, so we think, quite clearly, that these should be two separate things. Similarly, the next battle happening at the moment is over climate change spending, so it is not to say that DFID will not channel a lot of the money for climate change but we think it is a new and present problem which should be over and above the ODA definition. Could the UK definition be better? Definitely.

  Q59  Chairman: Would you want a Schedule attached to the Bill which is a UK definition of what constitutes aid? The point of that is it may make it harder to pass the Bill because it defines it in a limited sense, but if you do not have such a Schedule the Bill is so loosely defined that it is almost meaningless.

  Mr Watt: I suppose, ideally, you would have a Schedule that provides some kind of rigour to the Bill but not such a tight Schedule that it significantly reduces the likelihood of it being passed. It is a delicate balancing act and a judgment to be made by the IDC as to what it recommends there.

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