Clause 3 - International development assistance and gross national income

International Development (Reporting and Transparency) Bill – in a Public Bill Committee at 9:30 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 new clause 1—Statistics to be reported.

Government new schedule 1—INFORMATION TO BE INCLUDED IN ANNUAL REPORT.

Government amendment No. 11.

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

On a point of order, Mr. Hood. I may have misunderstood the mechanics of the Committee, but I wonder what has happened to my proposed amendment (a) which was grouped under clause 2. I did not have the opportunity to withdraw it or press it to a vote.

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

I mentioned earlier that amendment (a) to new clause 6 would be put to a vote when the questions are put on the new clause. Is that clear?

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

I rise to encourage support for new clause 1 and new schedule 1 and to urge the Committee to vote against clause 3.

The proposed new provisions are a sensible way to clarify the Bill and to avoid it becoming overburdened with detail. My right hon. Friend’s Bill speaks of international development assistance. That might be a term of common parlance, but it is not in general use by development statisticians, and therefore it needs to be adapted.

The requirements on financial reporting will be expressed in general, readily understandable terms, with the definitions of such terms set out in the annual reports that are laid before Parliament, rather than in the Bill itself. That enhances the Bill and helps to avoid it becoming too technical. On that basis, most of the requirements in this area of the Bill and elsewhere are related simply to aid of various kinds. That would be interpreted in the annual report in terms of the internationally agreed definitions of aid that are already in common use. Examples are the use of DFID programme aid or gross public expenditure on aid, both of which are reported on a financial year basis.

The only exception to that general rule of thumb is when there is a requirement to provide data on official development assistance, which is a particular definition of international development assistance that is used by the development assistance committee of the Organisation for Economic Co-operation and Development. Owing to the importance of the UN’s 0.7 per cent. target for overseas development assistance as a percentage of gross national income, that term—overseas development assistance—will continue to appear specifically in the Bill. I should mention that overseas development assistance is reported on a calendar year basis.

The proposed schedule subsumes all the requirements for financial reporting that are included in the Bill. It subsumes the series of requirements in clause 3, the overseas development assistance gross national income data from clause 6, the regional breakdown of bilateral aid in clause 1, the breakdown of multilateral aid in clause 5, and the sectoral data from clause 4. Paragraph 2(1)(c) of the new schedule sets out a particular requirement to report bilateral aid by sector. It may be helpful if I confirm that such aid is usually broken down by reference to the following broad sectors: economic, education, health, governance, social, humanitarian assistance, rural livelihood and environment.

The hon. Member for Bournemouth, East (Mr. Ellwood) raised the issue of humanitarian assistance on Second Reading. I draw his attention to the proposed new schedule and the reference that it includes on reporting on humanitarian assistance, which I hope he and other Committee members will regard as a helpful step forward.

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

I join the Minister in accepting and acknowledging the necessity of reworking this part of the Bill. We do not have an issue with the way in which the Bill has been structured, in that the  information should be included in a schedule attached to it, but what is the logic behind Government amendment No. 11, which would remove the words

“development assistance as a proportion of gross national income”,

and replace them with

“and the breakdown of such aid”?

What does that change mean?

The other more generic concern on the content of the report as detailed in the Bill, under the proposed new schedule, is that all the information that is being requested is merely about the inputs, not the outputs and their effectiveness. I suggest that most, if not all, of the information that will be detailed in the report is already in the public domain through other reporting structures used by the Department for International Development.

The Bill should be the foundation—a major building block—for the assessment of the effectiveness of the British taxpayers’ money that is rightly spent on alleviating poverty and trying to meet the millennium development goals. However, the way in which the new schedule is structured does not seem to allow sufficient information to be put into the public domain to enable an informed debate to take place, hopefully annually, on the Floor of the House. The argument against doing so is that it may take an enormous amount of work by DFID civil servants. I do not think that that is necessarily an excuse.

You will be sorry to have missed a debate yesterday, Mr. Hood, about an additional, replenishment sum of money going into a section of the World Bank that is euphemistically called the International Development Association. IDA 14 has included, for the first time, the analysis of effectiveness in terms of a results-based management system; it also has a full disclosure of countries’ performance ratings. If it is possible to do that in one part of the DFID structure, why is it not possible to do so across the board? Why is it not possible to put that sort of analysis in the Bill?

DFID has stated that the IDA is an effective instrument, with a 25 per cent. efficiency gain. Obviously, such analysis is taking place in the Department and, presumably, to come to that conclusion DFID has had to make comparisons with other projects and with the effectiveness of other streams of British taxpayers’ money. I should like to see that sort of analysis in the report. I do not see why such matters should not be added to the new schedule, which is, at the moment, purely about inputs, not outputs and effectiveness.

Photo of Pete Wishart Pete Wishart Opposition Whip (Commons), Shadow Spokesperson (Cabinet Office), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (International Development)

I have just one question for the Minister on new schedule 1. Will aid that comes from DFID that has been distributed from other sources be included under the schedule and accounted for? I am thinking of where DFID gave money, through USAID, for some spending in Malawi in 2004. Many of us are concerned about how that money has been spent, especially given the priorities of USAID.

Photo of Ann McKechin Ann McKechin Labour, Glasgow North

I should like the Minister to clarify whether, in respect of sub-paragraph (f) of new schedule 1, the Government intend to include some indication of their decision making in multilateral organisations, such as the International Monetary Fund and the World Bank, how they vote at meetings and any statements that they make.

Perhaps my hon. Friend could clarify another thing. He mentioned how the Government would describe how assistance was provided in respect of child mortality and HIV/AIDS, but will there be any analysis of how aid is spent according to gender and to tackling disability in the developing world? Is it intended that the report will make mention of those matters?

Photo of Tobias Ellwood Tobias Ellwood Opposition Whip (Commons) 9:45 am, 15th February 2006

I should like also to address the arguments made my hon. Friend the Member for Boston and Skegness. However, first I must thank the Minister for adding the concerns of humanitarian assistance; it is welcome to know that when Members make comments in the Chamber those on the Government Benches listen. This is the first time that that has happened—

Photo of Tobias Ellwood Tobias Ellwood Opposition Whip (Commons)

I will take stock of that, but I am very pleased that I have at least had one success.

How the money is spent is the important aspect. What yardstick of success will the Minister use to decide whether the money is being spent efficiently? The major concern is whether the money has been hived off or competitive quotes have not been taken. Reporting back on whether these millions of pounds have been spent efficiently is important.

Another yardstick of comparison is how much money is put forward by other countries. Does the Minister intend to give us an idea of our spending in relation to that of other developed countries that are helping developing countries around the world?

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

I will take that final point first. The Bill places extensive reporting requirements on DFID about British aid, so we are not about to start also reporting on other countries’ aid in that annual report, except where there is direct relevance to the distribution of our assistance.

I will deal with the other issues in the order in which they arose. Government amendment No. 11 will make the language of the title of the Bill accord with the proposed changes in new clause 1 and the new schedule. Its purpose is simply to ensure that the long title correctly reflects the various provisions in the Bill.

The hon. Member for Boston and Skegness suggested that the new schedule talks only about inputs. In broad terms, I accept that he is right, but I suggest that he looks at the provisions of the Bill as a package. For example, new clause 5 talks about the Secretary of State having to make an assessment of the “effectiveness” of spend. [Interruption.] If the hon. Gentleman and other Members are successful in  securing even more Government time for debate on international development, they will have regular opportunities to continue to probe and question the effectiveness of the Secretary of State’s judgment on how aid moneys are spent.

The hon. Member for Perth and North Perthshire (Pete Wishart) asked whether British aid that is distributed through other organisations will be reported on. Essentially, that is covered by our requirement to report on how we spend our money in particular countries. Obviously, if we are spending it through other organisations, that will still be covered under the Bill’s requirement on us to report. A minimum of 20 countries is proposed, and we will come to that in due course. I do not accept the hon. Gentleman’s view of the spend in Malawi, but perhaps that is a debate for another time.

My hon. Friend the Member for Glasgow, North (Ann McKechin) asked whether we would be reporting on every decision made by a multilateral organisation. Given how many multilateral organisations we fund, it would cost a huge amount to report on each and every decision they make, so we are not proposing to do so. My hon. Friend also asked about issues around gender, and how British aid is used to promote the empowerment of women. That is reflected in millennium development goal 3. As my right hon. Friend the Member for Coatbridge, Chryston and Bellshill has said, he is proposing to include the MDGs in the Bill, so we would have to report on that matter.

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

Will the Minister address the point that I made about analysis of the effectiveness of aid elsewhere in DFID—the country rankings in IDA 14? Is he prepared to consider putting such a provision in the Bill, particularly given that he has accepted the argument to increase the number of countries on which to report from 10 to 20? Will he examine the ranking of those; it is clearly going on elsewhere in his Department?

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

The hon. Gentleman has already asked me to ensure that we do not report on one set of issues separately to those that we are required to report on under the Bill. I am all for such efficiency savings. If there is a way of helpfully combining work that is being done elsewhere by the Department with the work that the House will require us to do as a result of the Bill, we will of course seek to gather the information for Members to digest.

Question put and negatived.

Clause 3 disagreed to.

Clause 4 disagreed to.