My Lords, I support the amendments in this group, which give effect to the target being achieved over a five-year rather than an annual period. I do so because I believe that that would give much needed flexibility in meeting the target. If there were flexibility, that would lessen what some of us perceive as the perverse incentive of the target—rushing projects towards the end of a year in order to meet the target within a year. It is much more likely that the money will be more effectively spent if that happens over a period of years.
The noble Lord, Lord McConnell, has already rather anticipated these arguments. He said that—this was his reason for voting as he did on the previous amendment —he felt that the target of 0.7% of GDP gave greater certainty. That was, to some extent, supported by the arguments of my noble friend the Minister. However, I am deeply puzzled by the argument that having a target of 0.7% creates certainty or will give greater confidence about how the money will be spent. Meeting the target of GNI or GDP will not be that easy. It would be easy if we were certain what GNI and GDP were going to be. However, as everybody knows, economic data are subject to constant revisions. There is uncertainty about the future during the year when you are trying to determine what your target is a percentage of and you have to rely on economic forecasts. However, there is not just uncertainty about the future; there is uncertainty about the present and—dare I say it?—about the past. These statistics are constantly being revised. Noble Lords will recall our famous double-dip recession—there was great excitement on that side of the House that it was occurring. A few months later it had been revised out of existence by the statisticians.
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I remember when Harold Wilson lost the general election because of a balance of payments deficit. A few years later that deficit was wiped out of existence. There was no deficit: it was a surplus. The idea that GNI or GDP gives us some certainty of a target is quite illusory. There are different ways of measuring GNI. I think it was referred to in the proceedings earlier that the NAO had pointed out that there was something like four different measurements of GNI which gave a great variation in the definition of the 0.7%.
Because of these uncertainties about the trend of GNI, it is very far from being the case that the Bill gives certainty. In fairness to the Bill, it recognises that. Under Clause 2(3), when the Secretary of State has to make a statement to the House as to why the target has been missed, if it has been missed, one of the reasons that he or she can give is because there has been a substantial change in GNI. How wonderful. What is the Minister meant to say? Is he meant to say, “We haven’t missed the target” or “We have missed the target, because the economy has developed differently from how we would have expected”. What is the point of making that statement? There is not very much accountability simply in the fact that someone has to make a statement.
The Bill goes on to state that the Minister should explain what steps will be taken to make sure that the target is reached the following year, if it has been missed in a year. We know exactly what will be the outcome of that: the Secretary of State will simply say, “We are going to spend more money in order to reach the target next year that we have missed this year”. Again, that seems rather pointless and a very predictable statement to be made.