Examination of Witnesses (Question Number
100-119)
MR GARETH
THOMAS MP, MR
SAM SHARPE
AND MS
LIZZIE RATTEE
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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