International Development (Reporting and Transparency) Bill

May I begin by putting on record our congratulations to the right hon. Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) on introducing this important Bill and on the way in which he has held together a multifarious group of individuals who support, in different ways, what he is attempting to achieve. Once the Bill is enacted, it will make a significant contribution by improving the transparency of the reporting structures of the Department for International Development to the House, thus maximising the effectiveness of British taxpayers’ money in alleviating poverty. Inevitably, such resources are limited, even though we have accepted the need to increase them. As we have said, the Opposition support the Bill, which demonstrates greater clarity and simplicity than it did when it was introduced, particularly as it includes a commitment to meet the millennium development goals. Opposition Members genuinely wished to make constructive suggestions to improve the Bill, and the right hon. Gentleman, Ministers and DFID officials deserve to be congratulated on listening and including some of those suggestions in the legislation. The right hon. Gentleman’s most significant achievement is ensuring that, as he rightly pointed out, the United Nations target of spending 0.7 per cent. of gross national income on international development appears in statute for the first time. That aspiration, as he said, was first expressed by the UN 36 years ago, and it is supported by the Opposition and Members from all parts of the House. The right hon. Gentleman deserves to be congratulated on that major achievement. The right hon. Gentleman highlighted millennium development goal 8, which is difficult to measure. I draw the attention of the House to the first part of that goal, which aims to"““develop further an open trading and financial system that is rule-based, predictable and non-discriminatory, includes a commitment to good governance, development and poverty reduction—nationally and internationally.””" Sadly, it appears that the latest World Trade Organisation round will not meet that requirement, so we must all be vigilant in ensuring that the WTO makes progress in improving trading rules to benefit developing nations. We must ensure, too, that regional trading agreements are made to help developing nations improve their economies, as well as bilateral trading agreements and pan-African trading agreements. To improve trade within specific countries, we must focus on infrastructure as well as the larger WTO discussions. As I have said, the Opposition agree with the Bill’s overarching objective of bringing accountability and transparency to international development spending. It rightly encourages DFID to report on the effectiveness of its aid spending to meet the millennium development goals and to alleviate poverty. Opposition Members, particularly my hon. Friend the Member for Bournemouth, East (Mr. Ellwood), have expressed concerns about the Bill, and we are pleased that the right hon. Gentleman was happy to include in the Bill a requirement for DFID to report every year on humanitarian assistance, as significant sums are involved. In 2004-05, DFID spent £437 million on humanitarian assistance, £344 million of which was spent on bilateral aid and £93 million on multilateral aid. The amendment to monitor the spending of that money is therefore a welcome addition to the Bill. I am encouraged that the link between the millennium development goals and the monitoring of aid has been strengthened. The annual report that will be produced as a result of the Bill will have an explicit function in monitoring progress towards those strategic goals and should contribute significantly to ensuring that development assistance is used specifically to alleviate poverty. The redrafting of the Bill increased the number of countries that will be assessed for aid effectiveness to ““no fewer than 20””. We agree with that change, and I accept that the Minister said in Committee that for the duration of this Parliament the figure would be no fewer than 25. The change was the result of an informed discussion on Second Reading, and I am pleased to acknowledge that in Committee the Minister gave the assurance that for the lifetime of this Parliament aid effectiveness will be monitored in 25 countries. Hopefully, that will continue beyond this Parliament, whichever political party is in power after the next election. I certainly hope it will be my party. We remain concerned, and we have pointed out at every stage of the discussion, that the Bill is still too focused on inputs rather than outputs. That was acknowledged by the Minister in Committee. We recognise that much of the information in the proposed annual report will already be in the public domain as a matter of course. As acknowledged by DFID in its own report entitled ““How effective is DFID?”” and by an increasing number of outside organisations, the Department is struggling to deliver a regular, systematic and comprehensive assessment of the effectiveness of British aid spending. The Bill, which we hope will be enacted expeditiously, should be the foundation for a major shift towards the assessment of the outputs of aid, so that British taxpayers can transparently evaluate and assess whether their money is being spent effectively to alleviate poverty. I draw the attention of the House to what I consider to be an oversight in the Bill. It does not allow for easy comparison between the effectiveness of different funding streams. We support a policy in which there are several different appropriate aid streams—bilateral, multilateral via NGOs, regional development banks, the UN and the Bretton Woods institutions—so that the most effective method can be used. However, the Bill makes no provision for comparison between the effectiveness of different funding streams, so as to establish which are the most effective and, more importantly, the least effective. On implementation of the Bill, DFID needs to give that aspect further consideration. In conclusion, DFID is still too focused on inputs, not outputs—on money spent rather than its effectiveness. Our long-term goal must be to assist the developing world in graduating from dependence on aid to strong democracies with vibrant economies that can create jobs and alleviate poverty, generating revenues to invest in their public services while maintaining environmental sustainability. That can be achieved only by reducing global poverty, creating freer and fairer trade, making wider and deeper debt reduction, enhancing civil society, implementing the rule of law, strengthening private property rights and assisting developing nations to build their capacity and trading infrastructure internally, regionally and internationally. We therefore welcome the Bill, as it will introduce monitoring and reporting structures to ensure that development aid is as effective as possible for recipient nations and provides the greatest possible value for money for British taxpayers. The Bill is not the whole answer, but it is a positive step and builds on the work of the Department, just as the Government have built on the work of previous Conservative Administrations, and just as we will build on the Government’s work when we are returned to power.