International Development (Official Development Assistance Target) Bill — Report

Part of the debate – in the House of Lords at 12:15 pm on 27th February 2015.

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Photo of Baroness Northover Baroness Northover Baroness in Waiting (HM Household) (Whip), The Parliamentary Under-Secretary of State for International Development 12:15 pm, 27th February 2015

My Lords, I thank noble Lords for their amendment, which seeks to require the Secretary of State to report on circumstances where meeting the target would lead to excessive spending towards the end of the calendar year. Clearly, there should be no circumstance where the Secretary of State incurs excessive spending. I express my appreciation for my noble friend’s honesty that he does not support the 0.7% target. That is extremely clear and comes over loud and clear from his contributions.

In the previous amendment I addressed the issue of quality at the end of the calendar year, so I will just very briefly mention that the expenditure at the end of 2013 included the contribution to the EC. My noble friend Lord Forsyth said that DfID was otherwise engaged and not thinking about Father Christmas, which of course was extremely appropriate, and we were concentrating on what we could manage to contribute to the Global Fund, which I have discussed before, and the World Bank. I also mentioned that the National Audit Office and the OECD DAC recognised that this was all done in exactly the way it should have been. Obviously, it is critical for us to build up a strong enough pipeline that gives us a choice and the contingency to manage the budget that we have. We have such a good pipeline, and this means that we are able to choose between programmes that represent good value for money.

I agree with my noble friend Lord Lawson about trade, FDI and the other aspects that he mentioned, and with my noble friend Lord Lamont, who mentioned remittances. They all play their part in development. That is key. However, the economist Jim O’Neill, formerly of Goldman Sachs, who devised the terms BRIC and MINT for some of the emerging economies that I think they are talking about—I am sure my noble friends are acutely aware of how they have managed to develop—advised that Goldman Sachs’s investment should be partly guided by the Human Development Index. He says that it was when Turkey and Mexico reached a certain level of education that it was possible to drive industrial development and investment. That is why, for example, aid supporting education and health for the whole population may be key and complementary to those other aspects.

I note that my noble friend Lord Lawson said, perhaps inadvertently, the department for “industrial” development rather than international development. Looking forward, and bearing in mind our support for CDC and what I have just said in relation to the Human Development Index, perhaps that is a prescient description. Let us hope that it is sustainable industry in the future.

There are all sorts of other drivers of poverty reduction, and I fully appreciate that. They lie beyond aid, and include trade, tax, conflict, corruption and disease. That is why we also play our part in shaping the international system to work for poor countries. That underlies the UK’s approach, for example, to the post-2015 development framework. It is a false dichotomy to set “aid” and “beyond aid” as if they are competing, for the very reasons that Jim O’Neill stated.

We do not believe that it makes sense for this amendment to include a report on the relevant factors for the target not being met and speculation about future events, as it appears to require. In any event, Clause 2(4) already makes provision for the Secretary of State to describe what steps she or he has taken to meet the target in the coming year.

I hope that I addressed very thoroughly, when speaking on the previous amendment, our approach to spending over the year and the importance of a sustainable, long-term programme that does not commit us simply to spending in a particular year but looks at an overall strategy over a longer period. Therefore, let me make clear that we do not accept this amendment and hope that it will be withdrawn.