International Development (Reporting and Transparency) Bill

I congratulate the right hon. Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) on not only introducing the Bill, but piloting it successfully through the Second Reading debate and Committee. His passionate and articulate speech on Report meant that his fundamental belief in the right of the Bill came over strongly. I hope that he will acknowledge the support that he has received from me, Her Majesty’s Opposition and my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell), who sadly cannot be with us today because he is in New York at the United Nations. We have supported the objectives of the Bill, and I thank the right hon. Member for Coatbridge, Chryston and Bellshill for his comments about the process of scrutiny both on Second Reading and in Committee. 12.15 pm It is fair to say that the right hon. Gentleman, Ministers and the Department should be congratulated on the way in which they listened to constructive contributions that hon. Members on both sides of the House made about possible ways of improving the Bill. I am sure that the right hon. Gentleman will acknowledge that the Bill that we considered on Second Reading has been totally reconstructed and redrafted to become the Bill before us today. The amended Bill is significantly better because it will create greater simplicity and clarity than the original Bill would have done. Having said all that, I do not necessarily share the right hon. Gentleman’s implied criticism of my hon. Friends. They raised significant issues in their contributions on the new clauses and amendments. My hon. Friend the Member for Christchurch (Mr. Chope) was absolutely right to highlight the problems of meeting the millennium development goals—problems that are becoming clear, especially in sub-Saharan Africa. However, I must correct my hon. Friend because I do not think that the Chancellor has pushed out one of goals, namely, the aim of all children being in primary education by 2130—that was a prediction of what would happen if we continued at the present rate. We need greater focus and we must all work together to ensure that we achieve the target of spending 0.7 per cent. of gross national income by 2030, and thus get as close as possible to meeting the millennium development goals by their target dates. When considering new clause 5, which deals with the millennium development goals, it needs to be said that those goals were set up by the United Nations, not the British Government, even though, quite correctly, the Government were a signatory to them. The House will be delighted to hear that I will not talk about every new clause and amendment, but I want to speak to several key measures. My hon. Friend the Member for Christchurch was absolutely right to highlight in new clause 7(3) the importance of enforcing property rights. I would go further and suggest that the relevant point in many countries is not just the enforcement of property rights, but the setting up of property rights. That is a fundamental necessity if we are to have not just property rights, but the rule of law, which helps to generate the inward investment and the creation of capital that we have seen in Asia. Such mechanisms lead to economic growth and the creation of jobs, and thus the alleviation of poverty, as has happened in south-east Asia. My hon. Friend the Member for Shipley (Philip Davies) made exactly that point in his speech. Amendment No. 4 takes us back to our debate in Committee about the phraseology of clause 2, although I will not repeat the points that were made at that time. What the Opposition want is to see quality statistics that enable an informed and enlightened debate on the way in which DFID and other Departments spend British taxpayers’ money. We want statistics that measure both outputs and inputs—a theme to which I shall return on other amendments. We are concerned that the changes to the Bill have removed the provision of the independent monitoring and evaluation of the effectiveness of policy and expenditure, which appeared in clause 8(2)(a)(iii) of the Bill as originally published. The removal of that provision weakens the Bill somewhat. Independent assessment of the aid budget could well be beneficial; it can be done and it has been done. For example, DFID’s 2004 to 2007 Latin America regional assistance plan states that there will be"““an independent evaluation of the effectiveness of DFiD work in the region.””" The International Development Association, which is a branch of the World Bank, has also committed to monitoring outputs through"““a results based management system””" and it has full disclosure of countries’ performance ratings. If that monitoring is possible for one part of DFID’s work in one part of its departmental structure, why can it not be done across the Department? DFID has stated that the IDA is an effective instrument with a 25 per cent. efficiency gain, so clearly detailed analysis of performance is taking place within the Department in relation to some areas and a conclusion has been reached, so comparisons must have been made with other funding channels. The Bill would be more comprehensive if that detailed analysis were included so that both outputs and inputs could be effectively monitored and measured. There are other important issues, which I shall not explore in detail, but I shall give an example. DFID does not keep sufficient records of how and where money that goes through other bilateral channels, such as USAID, is spent. In our view, that should be addressed. Clause 4 and amendment No. 8 deal with which multilateral institutions should come within the Bill. The amendment proposes that the European Community should do so, and my hon. Friends have rightly spoken about that. The Secretary of State and the Under-Secretary know—I am sure that, privately, they agree—that many people think that the British taxpayers’ money that goes to the European Union is not necessarily spent as effectively as we would like, or in the places that we want it to be spent. I know that Members are lobbying European Ministers hard to persuade them to our way of thinking. The Opposition want the most detailed possible assessment of aid spending, so we welcome the division of a general clause into its constituent parts, which is an improvement on the original drafting. However, if multilateral aid is to be broken down into separate funding streams, the Bill should make provision to examine and compare aid given by the EU, the UN, the Bretton Woods institutions and the development banks, as well as bilateral aid, in order to determine which aid channels are the most effective. Amendments Nos. 11, 16, 9 and 10 relate to the effectiveness of aid. The amendments are designed to include more countries in the Bill, for example, by proposing that those in receipt of UK bilateral aid exceeding £10 million be included. The right hon. Member for Coatbridge, Chryston and Bellshill rightly made the point that the original Bill covered 10 countries, whereas the amended Bill covers 20, and the Minister said in Committee that for the duration of this Parliament a minimum of 25 countries would be considered. In Committee, I expressed concern about how the countries would be selected—the Minister obfuscated, so I shall return now to the point on which I did not get an answer then. The 25 DFID PSA—public service agreement—countries on which the Minister proposes to carry out analysis and report are the same 25 countries that receive the maximum amount of British bilateral aid, with one exception. I wonder whether any hon. Member on either side of the House can guess what the exception is? It is, of course, Iraq. In 2003-04, Iraq was the greatest recipient of British bilateral aid. During the past financial year, it has been the 10th biggest recipient of UK bilateral aid. It is my understanding of the Bill that there is no necessity for bilateral aid—that is British taxpayers’ money going to Iraq—to be reported on. There are two pages of text in DFID’s annual report summarising the contribution to Iraq. It is not clear from those two pages how much money is going to Iraq and what it is being used for. When the Minister replies, I would like him to assure the House that the continuing contribution that the British taxpayer is making through DFID and other Departments will be reported upon in the annual report, and will therefore be debated and scrutinised by the House. Amendment No. 17 relates to the work of other Departments and how they will fit in with the DFID annual report. It is essential—especially with regard to the Foreign Office, the Department of Trade and Industry and, we hope, with the progress that will be made with the World Trade Organisation reorganisations and the economic partnership arrangements that the Minister and I were discussing at the back end of last week—to facilitate enhanced trading to generate economic growth and, therefore, job formation and the alleviation of poverty. There must be important co-ordination between Departments. My hon. Friend the Member for Shipley was right to highlight the importance of trade. The other issue of Government co-ordination that needs to be highlighted is the well-known problem and tension between DFID, the Foreign Office and the Ministry of Defence. We need to ensure that where British taxpayers’ money is used, particularly when military action has taken place, everyone is working in harmony for the benefit of people on the ground. I do not want to delay the House. I hope that the Minister has many constructive comments to make when he replies. However, I would not be doing my job properly if I did not address the correct and powerful points that my hon. Friend the Member for Stone (Mr. Cash) made about corruption. It is right to highlight the necessity for the international community as well as the British Government, irrespective of the colour of that Government, to tackle corruption throughout the world. It has a severely negative impact in hindering aid distribution, economic growth and the alleviation of poverty. There are various ways in which the problem needs to be tackled, not just by creating conditions and criteria for any aid that is given through DFID and with British taxpayers’ money, but by building transparent and honest police and judicial systems and by strengthening auditor-general powers within specific countries rather than having external auditors. Corruption is not just about people taking funds for personal gain; it can be the misallocation of funds, which means that money does not end up for the social projects for which it was originally intended, such as health and education. Sometimes, the recipient Government move money from the health and education budgets to the defence budget or other budgets about which we would not necessarily feel comfortable. Amendment No. 15 relates to direct budgetary support. I hope that the Minister will acknowledge that there is growing concern about such support, not from only within his Department but from within the international development community, whether it be the global fund or the various United Nations organisations. I do not know whether Members are aware that since 2000, £1.5 billion of British taxpayers’ money has gone into direct budgetary support for 20 countries. We support the Bill, the principles behind it and the overarching architecture, but as the Bill stands, just 42.6 per cent.—or £35 million—of the total bilateral aid going to Uganda will be covered by the measure. It is also a fact that 67 per cent—or £66 million—of the aid going to Tanzania will not be covered by the Bill. Indeed, 73 per cent. of the aid going to Mozambique will not be covered by the Bill. I hope that the Minister will be able to say that the appropriate use of taxpayers’ money is being provided through direct budgetary reform, and that that will form a fundamental part of the annual review. That provision is not set out in the Bill, nor is the way in which the selection of the 20 to 25 countries will be reported upon. I have set out the general problems with specific regard to the amendments. I welcome the fact that the Bill has been brought to the House and I congratulate the right hon. Member for Coatbridge, Chryston and Bellshill on doing so. He will find us extremely supportive during the rest of its passage through the House. We wish there to be an expeditious enactment.