Clause 8 - Transparency

International Development (Reporting and Transparency) Bill – in a Public Bill Committee at 10:15 am on 15th February 2006.

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Question proposed, That the clause stand part of the Bill.

Photo of Jimmy Hood Jimmy Hood Chair, European Scrutiny Committee, Chair, European Scrutiny Committee

With this it will be convenient to discuss the following:

Government amendment No. 10

Government new clause 2—Transparency.

And the following amendments thereto: (a), in line 1, leave out

‘such observations as he thinks appropriate’ and insert ‘observations’.

(b), in line 13, at end add—

‘()Observations made in accordance with subsections (1) and (2) shall be made in respect of each of the countries specified under section (Aid effectiveness and Millennium Development Goals 1 to 7).

Government amendments Nos. 12 and 13

Photo of Gareth Thomas Gareth Thomas The Parliamentary Under-Secretary of State for International Development, Party Chair, Co-operative Party

Perhaps it would be helpful if I set out our concerns about clause 8 and explain why I am urging the Committee to decide that it should not stand part of the Bill and why I am proposing the new clause. The concerns relate to subsection (2)(a) and (b) in particular. The substance of subsection (1) is included in the new clause.

I outlined on Second Reading our concerns about subsection (2)(a)(i). One of the great innovations of this Government, and in particular of my right hon. Friend the Chancellor, has been to initiate comprehensive spending reviews to give Departments some clarity about their level of funding over a three-year period, as opposed to the one-year annual budgeting cycle that existed prior to that. However, the subsection goes beyond what we could reasonably expect to provide detailed information on. I recognise the desire for Members to have some sense of future commitments to developing countries, which is why the wording in the new clause is intended to commit the Government to giving additional information, where possible, on future spending plans, in so far as they have been agreed, in developing countries.

We are doing that not only for the benefit of hon. Members, but because we want to see donors moving towards giving predictable aid to developing countries over the long term. I will give an example of the merit of that. Finance and Health Ministers in a developing country might want to recruit additional nurses and doctors to help meet the desire to get universal access to antiretroviral drugs, but might be worried about whether donors will continue to provide the additional resources necessary to pay the salaries of those doctors and nurses. They might be worried that the developing country would be left with a huge financial requirement that it does not have either the domestic tax revenues or the donor assistance to meet. We want to move to a situation in which there is some sense of predictable aid flows to developing countries—subject, of course, to their continuing good performance. However, as I said, subsection (2)(a)(i) goes beyond what we can currently do.

I recognise the appetite, too, in subsection (2)(a)(ii) to

“specify the development objectives in that country”.

However, what we seek to do with our development assistance is to come in behind the developing country’s own development priorities, as set out in its poverty reduction strategy. The current wording of subsection (2)(a)(ii) goes beyond that sense of country ownership that we seek to promote in spending our development assistance.

Lastly, perhaps it would help if I explained our particular concern about subsections (2)(b) and (2)(a)(iii). They would require us to secure and publish agreements with recipient countries for aid. Given that we give aid to some 130 countries—albeit much of it   involving relatively small sums of money—that could require us to try to negotiate separate agreements with each of those countries. I put it to members of the Committee that that would involve a disproportionate cost and would require a disproportionate effort on the part of staff. I hope that the requirement to report on a minimum of 20 countries—and, indeed, my commitment to go beyond that for the duration of the current Parliament—will provide a useful hook in an annual report for Members to debate the achievement of our development objectives as a result of our development assistance in certain countries.

I recognise the concerns that all Members have that money given by British taxpayers for development assistance must not be lost as a result of corruption. Therefore, it is appropriate that we take the opportunity provided by our new clause to ensure that the Government have a specific commitment to continuing to report on the fight against corruption in developing countries.

Photo of Mark Simmonds Mark Simmonds Shadow Minister (International Development)

As with the other new clauses, my party welcomes the simplification and clarity that the new clause provides by replacing clause 8. We also welcome the additional provisions on corruption and governance, which the Minister explained, and which he will know from comments on Second Reading cause concern to some of my party colleagues—and to Members from other parties as well.

I have proposed two amendments to the new clause. The first relates to a point I made in respect of a provision we debated earlier: we believe that the wording of the new clause will allow the Secretary of State to do what he or she sees fit, rather than what Parliament desires, which is to have the specific information referred to. Unusually, the Minister has not given a particularly full response on that point. I would like him to give a fuller response on why this amendment cannot be included. If he fails to do so, I will have no option but to return to this point on Report.

My amendment (b) to Government new clause 2 relates to aid effectiveness and millennium development goals 1 to 7. As the new clause is currently drafted, the report could get away with some general comments in a couple of paragraphs about those issues. We would like it to be made clear in the Bill that, in respect of the minimum of 20 countries—or of the 25 that the Minister has assured the Committee he will report on up to the end of this Parliament—the aid effectiveness will be analysed against the specific MDGs in those countries. Otherwise, DFID might choose to draw on only the most successful examples in a particular year.

The Minister started to address the other issue I would like him to deal with in his introductory remarks on the new clause. It is to do with the objective described in subsection (2)(a)(iii), which is to

“make provision for the independent monitoring and evaluation of the effectiveness of policy and expenditure in achieving its stated objectives”.

I share the Minister’s view that it would be totally unrealistic and not cost-effective to have to do that for all 130 countries to which DFID gives assistance.   However, I do not accept that it is unrealistic and not cost-effective to do so for the 20 or 25 countries in respect of which analysis of effectiveness will, as the Minister has accepted, be put in the annual report and I cannot see why that cannot be done.

Photo of Gareth Thomas Gareth Thomas The Parliamentary Under-Secretary of State for International Development, Party Chair, Co-operative Party 10:30 am, 15th February 2006

Let me deal, if I may, with the hon. Gentleman’s last point first. The issue is how we use our resources to strengthen the quality of Government systems in general in a developing country, particularly where we are giving budget support. That must be about how we strengthen the capacity of the Government to deliver assistance to developing countries in respect of education and health care, and how we help deliver better rule of law, effective police, good courts and so forth. It is also surely about how we help the citizens in that developing country to have confidence that their Government are spending properly the money that has been donated by countries such as ours and the money that has been collected from them in the form of taxation. We should therefore strengthen the quality of financial systems in the developing country and its independent audit arrangements as part of that process.

We have a responsibility not only to the individual poor people in the developing countries to which we provide assistance, but to the British taxpayer. We have to ensure that the auditing systems in those countries are robust and that we have further processes in place to check on the efficacy of our own spending there. As I indicated on Second Reading, our procedures for disbursing budget support or support to UN organisations, or indeed for disbursing financial support to NGOs, have been agreed with the National Audit Office.

We have to provide reports to the Comptroller and Auditor General. We have been given a clean bill of health every year to date for the effectiveness of our spend and the safeguards that we have in place. In addition, in developing countries we use a range of other audit arrangements such as the requirements of the World Bank and the IMF to give us confidence in the way those resources are being spent. Where we do not have confidence that our auditing arrangements are as robust as we would like, we have the opportunity to bring in independent auditors to monitor our current spend.

The hon. Gentleman’s concerns are misplaced. There are already robust systems in place to monitor the effectiveness of UK development assistance. In any case, we shall seek to strengthen still further the auditing arrangements in developing countries so that not only is our aid money well spent, but so are other moneys given to that developing country’s Government. Alongside our financial support, we also give considerable technical assistance to Governments to help them to continue to strengthen their financial systems, as well as individual assistance on occasion to anticorruption commissions or programmes of   support. Although the hon. Gentleman’s concerns are perfectly understandable, on this occasion they are misplaced.

I understand what the hon. Gentleman is seeking to do with amendment (a) to new clause 2, but again I am not persuaded of the need for it. I do not think it would achieve what he thinks it would. The Secretary of State will by definition have to continue to provide and include observations in the annual report. He or she will have to use their judgment as to what needs to be reported to Parliament. It is sensible to recognise that in the Bill. There are already and, if hon. Members have their way, there will be still more opportunities to question what is in the annual report and what progress the Government are making in helping to tackle corruption. Furthermore, various systems are already in place to report on the effectiveness of aid.

As for amendment (b), we are aware that important changes have been made relating to the issues set out in the new clause on aid effectiveness and the millennium development goals 1 to 7. Of course we will report on those developments because it would be a new, substantial issue. We would want to ensure that the House was aware of the progress in that area.

There is a danger that the provision that the hon. Gentleman wants to place in the Bill would require us to come up with parallel reporting. When there are substantial developments, I have given a commitment to report on them in the way we have already committed ourselves to doing in respect of an increased number of countries from 10 to 20—and to 25—during this Parliament.

Question put and negatived.

Clause 8 disagreed to.