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

Examination of Witnesses (Question Number 100-119)


24 FEBRUARY 2010

  Q100  John Battle: That is one of the reasons why poverty reduction was built in so hard and the whole thing about tied aid was of course that there had been discussions in the past and there were reports from this Committee on the CDC[11] which went for major infrastructure development. On the economic development front, there were hard cases that are in the grey area that Mark refers to where people could say that other departments were legitimately helping and were making a contribution because they were going into tourism or energy development or infrastructure and roads, and actually, "We're claiming a bit of your budget", and I am speaking to you as a Minister in DFID, and then you find that that is added into the 0.7% and it is without that hard definition that you can get them under your banner and we would actually see the erosion of the target, and that is what I am actually trying to put to you.

  Mr Thomas: Well, that is why I think it is important work that the DAC are doing at the moment to clarify how you report and also why, I think, it is significant that the Office for National Statistics will be able to do their own scrutiny of our figures for ODA-GNI and whether they stack up.

  Richard Burden: I wonder if I could just follow up on the last question that Mark Hendrick asked you and it is on the same subject. As far as DFID's spend is concerned, the 2002 Act is relatively clear around the poverty reduction focus and, as far as other government spend is concerned, the DAC criteria apply with greater clarity, hopefully, on what that means and that will be made robust and the Office for National Statistics will help there as well. Given the fact that we started these questions today with issues around the fact that it is important that there is a kind of cross-party consensus around issues of definitions of aid and ODA and what counts and so on, have there been any discussions or any indications from other parties about whether they share the robustness of this Government's definition around poverty reduction and indeed whether they would accept the need to tighten up or reclarify the DAC criteria you have mentioned?

  Q101  Chairman: Just on that, in the briefing note there is reference to an article in The Guardian which said, "When international attention landed on Yemen's links with Al-Qaeda at Christmas, who at the Whitehall roundtable had a budget line which could pay for `state-building'? DFID. It puts a whole new light on the Conservatives' oft-repeated pledge not to cut DFID funding", and I think that is a bit unfair because it could also apply to almost any government. "Given that the accepted DFID analysis is that the single biggest determinant of long-term poverty reduction is political stability, then all manner of interventions to secure that stability can be justified as reducing poverty." Now, let us not be party-political specifically, but just generally is that not a danger, unless you have a very clear definition and a very clear understanding?

  Mr Thomas: Well, as I have said, I think we have had a robust definition for the work of the Department, and the vast majority of ODA is spent through the Department. We have been continuing to use our influence in the OECD-DAC to press for greater clarity in terms of the reporting of ODA, and I like to think that that is beginning to bear fruit. In terms of conversations with other parties, no, there have not been conversations with other parties. I am aware that the Leader of the Opposition has said that he does not think there is a need for legislation, and he said that in one of his questioning sessions at a meeting in Hammersmith, as I understand it, so I do not know whether that is significant in terms of the context of definitions, but perhaps it is certainly significant in the context of whether or not there would be genuine cross-party support or consensus for this legislation.

  Q102  Mr Lancaster: I want to look at the accountability measures. Minister, in your opening statement, you talked about how this draft Bill builds on the 2002 and 2006 Acts, although a number of the recent submissions suggest that the references to the economic, fiscal and external factors should be removed from the Bill as they risk making it more difficult to hold the Government to account, and in fact this morning Patrick Watt from Save the Children actually said that he feared it may result in a weakening of the 2006 Act, so can I simply ask why the Government did decide to include these references to economic, fiscal and external circumstances? Was it because it actually weakened the 2006 Act?

  Mr Thomas: No, I do not think it does weaken the Act. If the 0.7% target were not to be met, with the requirement that ministers are very clear about why the target has not been met and, if it is because of economic reasons, that they are particularly clear about those reasons, I think it is a perfectly reasonable ask to make. It also reflects the other most recent piece of legislation which focuses on inputs, if you like, as opposed to outputs, which is the Fiscal Responsibility Act that also makes a similar reference. Obviously, I did not hear the particular evidence from Save the Children, but, if, and I have no reason to doubt it, you are accurate in the way that their comments were reported, I think they have misunderstood the effect of the Bill.

  Q103  Mr Lancaster: Mr Sharpe was sitting in this morning, so perhaps he would like to comment.

  Mr Sharpe: I think he argued that taking out the clause from the 2006 Act which required reporting on the year in which the Government will meet the target weakened the Act, and I think that is a purely technical change in the 2006 Act because, once we have met the target, how can there be a requirement on the Government to report the year in which it intends to meet it, so I think that was one of the things he was saying certainly and I think that was not correct. The reason those clauses are in is to make it very clear the type of demonstration, the type of report the Secretary of State would need to make to Parliament in the event that the target were not met. Obviously, one scenario the Treasury have asked us to consider is what would happen if there were a surge in GNI during the course of a year, and that is one scenario that might need to be thought about, for example.

  Q104  Mr Lancaster: Thank you, Mr Sharpe. I did not want you to think that we did not spot you there this morning! Can I then ask what other accountability measures, apart from these, you considered including in the Bill? What else was on the list and then turned down?

  Mr Thomas: Well, I think we have got a very clear mechanism for doing so. I suppose the other device that you might consider would be the use of the courts to hold the Government to account for this particular piece of legislation. I do not think the courts are the appropriate approach as there is a clear parliamentary or constitutional convention that Parliament is responsible for holding to account the Executive for spending commitments and for the progress on international commitments and I think it is right, therefore, that we have focused on Parliament as the institution to hold Government to account on whether the 0.7% is met or not.

  Q105  Mr Lancaster: I think we will come on to some of the legality later. The other area of concern which was expressed to us by the NGOs was really about the sanctions if Government fails to meet this 0.7% target, and indeed Mr Lawson from Oxfam this morning said, and Mr Sharpe can confirm this as he was there, that the Government was effectively trying to have its cake and eat it by putting the Bill in place, but actually, if it does not fulfil the requirement, the sanction is to make a report to Parliament, which is not really much of a sanction, so what examples did you draw on when you decided that this would be the process for that sanction?

  Mr Thomas: I do not think, with respect, that it is not much of a sanction, a report to Parliament. What Parliament chooses to do with that report or what it chooses to do if 0.7% is not met is clearly a matter for Parliament. As a Minister, I have to say, I would not want to come and have to explain why a commitment to 0.7% had not been met, so, in that way, I think it is a significant sanction and I do not support, with respect, the demeaning of Parliament in the way that your question apparently suggests.

  Q106  Mr Lancaster: Well, I am sorry that is what you think I am suggesting. What I am really saying to you is that, effectively, it means that you might be caused a bit of embarrassment, so okay, the Minister will be caused a bit of embarrassment, but what, in effect, would Government be forced to do to rectify the situation? Should there be something in the Bill which outlines that?

  Mr Thomas: For my Party, not achieving the 0.7% would be of significant concern to us. That may not be the case for other parties and I cannot comment on that, but the sanction is Parliament taking up the opportunity to hold ministers to account for not having met the target and the reporting to Parliament is the opportunity for Parliament to start to force that conversation and that process of accountability to take place.

  Q107  Richard Burden: Could we perhaps move one stage on from the event of the target not being met and the sanction being deployed to what actually would be done to rectify the situation in the future. Now, the draft Bill, as it stands, says that the Government should "describe the steps taken to ensure the target will be met", so the implication there is that what is already going on will be described, which is good stuff, but presumably, if the target has not been met, something rather more than the steps which have already been taken may be required. A number of the NGOs have been saying should there not be some sort of obligation in the Bill to produce some kind of action plan to ensure that the target is met in the coming period, and has the Government looked at that? For instance, it seemed to be a bit weaker than, say, in the Child Poverty Bill where the Government is actually required to publish strategies of what should be done to meet the target in the future.

  Mr Thomas: Well, there is an obligation each year from 2013 to deliver on 0.7%, so, in a sense, the requirement to publish a separate action plan is obviated by the existing duty to meet the commitment to 0.7%, so I think, in a sense, you would just be publishing a report when the requirement is already there the following year to make progress, so that is why I do not see an action plan as being necessary.

  Q108  Richard Burden: But could the same thing not be said about the child poverty legislation, and yet in that one it is said that regulations need to be published to put into effect the steps the Government is going to be taking?

  Mr Thomas: I would have to look at the exact wording of the Child Poverty Act, but, as I say, I think the fact that there is that requirement year on year from 2013 to deliver the 0.7% commitment means that that requirement is already there to make the progress that is required.

  Chairman: I think we were told this morning that in one or two of the countries which have met the target it is kind of inbuilt in the budget process that you start with that commitment and you start by saying, "That's our projection for GNI and, therefore, that's our

  development budget".

  Q109  Mr Hendrick: Mr Sharpe made the point that you could get a spike in GNI for whatever reason and, therefore, even if you put it in the budget process, you still might fall foul of the law, but I see this as analogous to the Government setting the inflation target. If the Bank of England did not meet that inflation target, then obviously the Governor would have to write a letter to the Chancellor, explaining what he is going to do about it. Now, this strikes me as perhaps one of the first opportunities by putting the ball in the court of Parliament to say that it then has to answer to Parliament to take it above and beyond necessarily the traditional situation where the whips have some sway over what their party members do to say, "Look, the Government has fallen foul of its own law here" and, therefore, Parliament itself, rather than necessarily individual political parties, will have the say on how it should deal with it, so I would not be too prescriptive in what goes in the Bill because, if Parliament has the say, then this should be above party politics and an issue which all parties could agree on.

  Mr Thomas: As I am sitting here as a representative of the Executive, I am not sure it is for me to comment on what Parliament should or should not do.

  Q110  Chairman: We have a few votes over the next week or two to change that.

  Mr Thomas: We will see.

  Q111  Richard Burden: On the issue of parliamentary scrutiny, even with some of the votes that are coming up in the coming weeks, we are not always collectively—Parliament as a whole—that great at scrutinising detail, therefore we need to hone down particular institutions to enable close scrutiny to go on. One of the institutions in parliamentary terms that could play a role in that could be us, the International Development Committee. Is there a case in relation to this legislation, as well as in a sense leaving it up to the International Development Committee to have an inquiry or not to have an inquiry on monitoring the 0.7% year-on-year, where something is formally built in so that there would be an ongoing annual scrutiny of the Department's performance, on the Government's performance, on that issue? Would that be something that you think might be useful?

  Mr Thomas: As a Minister, I have never felt under-scrutinised by this Committee or by Parliament in general. I do not recognise the scenario that you paint. If the Committee decides it thinks there should be a clear amendment that references the International Development Select Committee, if this legislation is still my responsibility after the election, then, as I always do when the Committee makes a recommendation, I will consider it very seriously. I do not see why such an amendment would be necessary. I would have thought the Committee is of strong enough character to make sure it is part of the process to hold us to account as Government for meeting the 0.7% target or not, but I would happily look at the justification the Committee made if that is indeed one of your recommendations.

  Q112  Chairman: That proposal has come from evidence to us, not from within the Committee.

  Mr Sharpe: Could I just make one technical point about the reference to the report saying what action the Secretary of State has taken? By the time the final statistic is published and the Secretary of State has made his report to Parliament, we will already be well into the subsequent year. If the Secretary of State has not already taken action by that point—that is what the draft is meant to capture—it will be too late for the Secretary of State then to come with an action plan about what would be done in future. The Secretary of State will need to be reporting about what action has already been taken to achieve it in the year that we are already in.

  Mr Thomas: The basis for that being that ODA-GNI is calculated on a calendar year. ODA-GNI figures are published so that approximately in April the first provisional ones are verified and we publish them usually towards the end of June, early July.

  Q113  Richard Burden: That description of action taken means the assumption would be this would be a list of, in the very literal sense, actions that have been taken—we have increased the budget here or there—and it would also be assumed that one of the actions taken would be plans that have been adopted by the Government but not necessarily yet enacted to meet that 0.7%.

  Mr Thomas: Possibly. It would depend on what circumstances there are at the time. We are speculating about a failure to achieve 0.7. The particular political party that I represent is determined to achieve 0.7%.

  Chairman: Yes, but the point of passing a law presumably is to ensure that it is followed through and enforceable.

  Q114  Mr Hendrick: You mentioned the possibility of court action being taken. What is your view on this? Do you believe that it should be legally enforceable?

  Mr Thomas: I do not believe it requires courts to have a particular duty in this regard. The Bill does not create individual rights, for example, in which the courts would traditionally in many circumstances have a role in terms of seeing whether they have been adhered to or not. The Bill relates very particularly to our spending commitment and an international commitment. It is the constitutional convention that that is Parliament's responsibility to hold the Executive to account in that area. What the Bill does not stop is the situation where the courts might look at particular spending decisions, particular projects that have been funded and whether or not they met the definitions in other Acts of Parliament. Perhaps the classic case where courts have been involved is around a particular spending decision, the Pergau Dam affair. Courts are not precluded by the absence of reference in this legislation from still looking at particular projects and whether or not they meet the definitions. Given that this is about a clear spending commitment and an international commitment, I think it is right that it is Parliament that holds the Executive to account.

  Q115  Mr Hendrick: Let us use the example you were highlighting. Let us say there was a degree of militarisation, some operations were undertaken which cost a certain amount and that was included in the 0.7%. Somebody might challenge that and say that that really does not meet the definition and the criteria for which it was intended and take that to court. Do you see that as a possible scenario?

  Mr Thomas: I believe that it would be possible for such a court action to take place under the existing legislation.

  Ms Rattee: Yes. This Bill does not amend the 2002 Act. The powers to challenge decisions of the Secretary of State to spend in accordance with the requirements of that Act are still in place. It does not do anything to change those.

  Q116  Mr Hendrick: In terms of meeting the 0.7, if that was included as part of the 0.7?

  Ms Rattee: It would have to meet the definition, including the reduction of poverty, in the 2002 Act.

  Richard Burden: As far as DFID is concerned, not as far as all of the 0.7.

  Q117  Mr Hendrick: This point was made and, with respect, nobody has answered it. The Chairman quoted from The Guardian this idea of state building which can be loosely regarded as reducing poverty. Is that the case or not?

  Mr Thomas: Yes, absolutely.

  Q118  Mr Hendrick: That means any amount of military spend that contributes to that?

  Mr Thomas: Absolutely not. The OECD DAC has clarified that, if you like, the enforcement activity of spending in developing countries or elsewhere could not be counted as ODA. Other types of state building were, such as training police, funding civil servants, such as, as we described yesterday, the technical assistance that is given to the Ministry of Finance or other ministries in Zimbabwe and, indeed, in a whole series of other countries, which is state building surely. It is perfectly proper development assistance. Indeed, I personally would see trying to build up the capacity of the state to operate in a way that is transparent, protects human rights and helps to deliver basic services for all the people in the country as a key purpose of development spending. I do not have any compunction in saying that state building is a hugely important part of what we do as a Department.

  Q119  Mr Hendrick: And poverty reduction?

  Mr Thomas: Absolutely. It is clearly important in terms of poverty reduction. When we do not have confidence in the people who are in power in a particular state, then we do not work through those mechanisms of the state. That is the situation we face in Zimbabwe. It is not the situation that we face in a series of other developing countries.

11   CDC Group plc (formerly the Commonwealth Development Corporation). Back

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