My Lords, I beg to move that this Bill be now read a second time. In the debate on the gracious Speech last week, a number of noble Lords spoke about the importance of the development agenda. This Government have a proud record on development. Since 1997, spending has increased from just under £2.1 billion to £2.9 billion last year and is expected to rise to £3.6 billion in 2003-04. We are now the fourth largest aid donor and we have refocused the whole of our development effort on the reduction of extreme poverty and achievement of the international development targets.
My right honourable friend the Secretary of State for International Development has worked tirelessly with our international partners to move development up the global agenda and, with my right honourable friend the Chancellor of the Exchequer, has been at the forefront of the changes to the heavily indebted poor countries initiative, which has delivered fast and deeper debt relief. We have argued the case for changes to multilateral institutions such as the UN and the EU, and, most recently, my right honourable friend the Prime Minister has restated his personal commitment to development issues, particularly in Africa.
As we debate the Bill today, more than 1 billion people live in abject poverty, without adequate food, water, healthcare or education for their children. This Government believe that we have a moral duty and a direct interest in doing all that we can to reduce and eventually eliminate such poverty. That is why we are re-introducing the International Development Bill.
The 1997 White Paper on international development, Eliminating World Poverty--A Challenge for the 21st Century, set out the strategies and policies which the Government, alongside the international development community, needed to pursue to meet the challenge of world poverty. The 2000 White Paper, Eliminating World Poverty: Making Globalisation Work for the Poor, reaffirmed this focus and considered the challenges and opportunities presented by globalisation. The International Development Bill will establish this poverty elimination focus in law. The reduction of poverty will become the central aim of the United Kingdom's international development assistance.
The genesis of the Bill can be traced back to the 1997 White Paper. This committed the Government to consider the need for a new Act that would reflect the Government's intention to re-focus their international development assistance on the elimination of poverty. The issue was debated in the series of development policy forums which DfID ran between 1998 and 2000. The consensus among the country's development community was that we should have a new Act to better reflect and support the Government's commitment to poverty elimination and the international development targets.
This Bill was introduced into Parliament in the other place in the previous Session. All parties supported the principle behind the Bill, if not all the detail of it. It completed its passage there without amendment and was introduced into this House on 23rd April. My right honourable friend the Secretary of State for International Development and I met with interested Peers to discuss the content and implications of the Bill at that time. Unfortunately, the Bill fell on the prorogation of Parliament. The Bill introduced now is identical to the one which fell then.
During the course of the Bill's first passage through Parliament, DfID officials met with representatives of the major UK development NGOs to brief them on the main issues in the Bill. I believe that there is strong support from NGOs for the Bill.
This is a short, straightforward but important Bill. Its purpose, as I say, is to establish the reduction of poverty as the central aim of the United Kingdom's international development effort. The Secretary of State will be able to provide assistance only if she or he is satisfied that such assistance is likely to contribute to the reduction of poverty through furthering sustainable development or improving the welfare of the people. This clear "poverty test" is set down in Clause 1 of the Bill.
There are two exceptions to this test. The first relates to assistance given to the Overseas Territories. The Government recognise the special relationship that the UK has with the Overseas Territories and our continuing obligations to them. These obligations go beyond our moral duty to tackle poverty in other countries. Even though none of the Overseas Territories is among the poorest countries in the world, the Bill will ensure that DfID is able to continue to work with them. It does this by allowing that assistance to the Overseas Territories is not subject to the poverty test set down in Clause 1. Assistance to the Overseas Territories need not be likely to contribute to a reduction in poverty. It must, however, be provided for the purposes of furthering sustainable development or improving the welfare of their populations. This formulation will allow the Secretary of State to continue to provide all kinds of support, including, for example, direct budgetary support and support for the construction of infrastructure to the Overseas Territories.
The second exception relates to assistance provided in response to man-made or natural disasters or emergencies. It is vital that the Secretary of State's ability to react flexibly and speedily in the first vital hours and days after disaster strikes is not constrained by any concern over whether the assistance which is needed is likely to contribute to a reduction of poverty, or to be "development assistance" as defined by the Bill. These requirements are therefore set aside. I know that all noble Lords recognise the importance of speed of response when there is a humanitarian crisis. It is something that we have discussed in this House.
I should like to draw your Lordships' attention to one important implication of the new aim and purposes for assistance set down in the Bill. By establishing the reduction of poverty as the central aim of British development assistance, the Bill will ensure that such assistance can no longer be used to further improper commercial or political ends--the so-called "tied aid". Under the Bill, there is none of the ambiguity which allowed a previous Secretary of State to support the Pergau Dam. There is no basis for the re-establishment of the aid and trade provision, or, indeed, for any improper links between aid and trade. Indeed, the Government announced that all aid would be untied from April this year. So any Government wishing to re-establish the link between aid and trade or aid and political influence would need to return to Parliament and argue their case.
The Bill will provide new powers to achieve this new central aim of poverty reduction. Under the Bill, the Secretary of State will be able to support civil society organisations undertaking development awareness and advocacy activities. The Secretary of State will also be able to engage more effectively with the private sector by taking shareholdings in companies and using convertible instruments, options and guarantees. This will ensure that we are able to take full advantage of the massive contribution that civil society and the private sector can make to the reduction of world poverty.
The basis for the provision of most United Kingdom development assistance is the Overseas Development and Co-operation Act 1980. This Act provides that a Secretary of State can furnish assistance for the purposes of,
"promoting the development or maintaining the economy of a country or territory outside the United Kingdom, or the welfare of its people".
These purposes are broadly cast and have not greatly constrained the Government's ability to re-focus this country's development effort on the reduction of poverty. But the Government believe that it is not enough for development legislation merely to allow the implementation of a development programme. We believe that it should reflect the Government's and the international community's shared commitment to reduce and eventually eliminate poverty, and ensure that the United Kingdom can make the most effective contribution possible to this work. The International Development Bill includes provision for the repeal in its entirety of the Overseas Development and Co-operation Act 1980.
I should at this point clarify the scope of the 1980 Act and of the new Bill, particularly in relation to European Community development programmes. The European Community is, of course, a major development partner, with some 25 per cent of DfID expenditure being channelled through its agencies and programmes. Our contributions to all bar one of the Community's programmes are determined by various European Community treaties. As treaty commitments, these contributions are covered by the European Communities Act 1972 and not by the Overseas Development and Co-operation Act 1980. So our contributions to, for example, European Community development programmes in central and eastern Europe, the Mediterranean, Asia and Latin America are, and will continue to be, covered by the European Communities Act 1972. Over the past five years, programmes covered by the 1972 Act have accounted for over 70 per cent of DfID's expenditure on the European Community. This expenditure will not be affected in any way by the Bill.
The one European Community development programme covered by the 1980 Act, and which will be covered by the Bill, is the European Development Fund. The EDF has the clearest poverty focus of all the Community's programmes. It provides development assistance for 77 African, Caribbean and Pacific countries, all but one of which are developing countries.
I should like to make one further point on the scope of the Bill. It is primarily concerned with the purposes for which assistance can be provided. It is not concerned with the detailed policies and priorities which should be implemented to achieve these purposes. It does not place any constraint on the types of activities or on the particular organisations or funds that a Secretary of State can support in order to achieve these purposes. The principle behind this approach is an important one. It is that our priorities and the nature and scale of our support should be determined in consultation with the people who are in need of our help. That is a principle that runs through our entire development effort, and one which I am sure your Lordships will endorse.
Nor does the Bill constrain the Secretary of State to support only activities and organisations that tackle poverty directly. Poverty is a complex phenomenon and the measures needed to reduce it will necessarily be varied. Some activities will impact on poverty indirectly and some will impact on poverty only over the medium or long term. The Bill will not constrain a Secretary of State's ability to support such activities. So it will, for example, allow us to continue to support security sector reform where such support is likely to prevent violent conflict and increase stability, thereby decreasing suffering and poverty. It will also allow us to continue to support reforms which increase revenue flow to a government where we are confident that a proper proportion of those additional funds will be used to reduce poverty in the country concerned. It will allow us to continue to commission research, even when we may not know at the outset exactly who will benefit from it.
I turn briefly to the clauses in the Bill. Clause 1 allows a Secretary of State to provide development assistance to countries and territories outside the United Kingdom if she or he is satisfied that such assistance is likely to contribute to a reduction in poverty. We anticipate that most assistance will be given under the powers conferred by the clause. This power can, therefore, be said to be the "core power" of the Bill.
Clause 2 sets out a modified form of the core power, to allow a Secretary of State to continue to support the economic and social progress of the United Kingdom Overseas Territories.
Clause 3 enables a Secretary of State to provide humanitarian assistance in response to disasters and other emergencies.
Clause 4 enables a Secretary of State to prepare for and facilitate the use of the powers set out in Clauses 1, 2 and 3. It also enables a Secretary of State to support organisations and funds whose mandates and constitutions may not be strictly or exclusively focused on the reduction of poverty but which nevertheless can, in particular areas or on particular issues, make a valuable contribution to the reduction of poverty. We shall, therefore, be able to continue to contribute to organisations such as UNESCO and funds such as the European Development Fund and the Global Environment Facility.
Clause 4 also enables a Secretary of State to support organisations undertaking development awareness and advocacy activities. Such activities are currently funded under the Appropriation Act.
Clause 6 lays down the financial instruments that would be available to the Secretary of State; namely, grants and loans, securities such as share holdings and convertible instruments, options and guarantees.
Clauses 9 and 10 relate to the interest of the devolved administrations in respect of international development matters. DfID has consulted closely with all the devolved administrations in the drafting of the Bill, and all have confirmed their support for it.
The Bill will confer some limited functions on Scottish Ministers, and under the Sewel convention these provisions require the consent of the Scottish Parliament. The Scottish Parliament has passed an appropriate Motion confirming that it is content for Westminster to legislate in this area.
In conclusion, the Bill demonstrates the Government's continuing commitment to reducing and eventually eliminating poverty. That was the objective set out in the 1997 and 2000 White Papers on international development. It is an objective which, I believe, commands support from all sides of the House and from the wider development community. I commend the Bill to the House.
Moved, That the Bill be now read a second time.--(Baroness Amos.)