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Session 2000-01
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International Development Bill


 

These notes refer to the International Development Bill
as brought from the House of Commons on 23rd April 2001 [HL Bill 46]

International Development Bill


EXPLANATORY NOTES

INTRODUCTION

1. These explanatory notes refer to the International Development Bill as brought from the House of Commons on 23rd April 2001. They have been prepared by the Department for International Development (DFID) in order to assist the reader in understanding the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.

2. The notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given.

SUMMARY

3. In 1997 the Government published the White Paper on International Development: "Eliminating World Poverty - A Challenge for the 21st Century" (Command Number 3789). That White Paper set out the Government's contribution towards the elimination of global poverty, and committed the Government to consider the case for replacing the existing legislation in this area - the Overseas Development and Co-operation Act 1980 ("the 1980 Act").

4. The Bill is intended to give legislative form to the policies set out in the White Paper by authorising the Secretary of State to incur expenditure on assistance for certain specified purposes.

5. Under the Bill the Secretary of State may provide any of the following:

  • development assistance to any country or territory outside the United Kingdom, if she is satisfied that the provision of the assistance is likely to contribute to a reduction in poverty;

  • development assistance to any United Kingdom Overseas Territories;

  • assistance to alleviate the effects of a disaster or other emergency on the population of any country or territory outside the United Kingdom.

6. The Bill defines "development assistance" as assistance given for the purpose of:

  • furthering sustainable development in one or more countries outside the United Kingdom, or

  • improving the welfare of the population of such countries.

7. The Bill provides for the Secretary of State to take steps which enable her to prepare for, and will otherwise facilitate, the provision of assistance under the Bill. It also allows the Secretary of State to support organisations which undertake activities which are likely to contribute to the reduction of world poverty.

8. The Bill enables the Secretary of State to support activities that promote the awareness of and understanding of global poverty. Such activities are currently supported by the Secretary of State on the basis of the Appropriation Act.

9. The Bill enables the use of a wider range of financial instruments in the provision of development assistance than the 1980 Act does. These will include share-holdings and convertible instruments, options and guarantees.

10. The Bill enables named statutory bodies to engage on their own or with the Secretary of State in the provision of assistance overseas. It also contains provision requiring governmental consent to be given before such bodies can engage in such activity, and provision as to the terms upon which they can provide development assistance.

11. The Bill provides for payments to be made to multilateral development banks, and contains provisions concerning the immunities and privileges of the International Bank for Reconstruction and Development, the International Finance Corporation and the International Development Association.

12. The Bill provides for the continuance of the Commonwealth Scholarship Commission.

BACKGROUND

13. The 1980 Act is currently the basis for the provision of most United Kingdom development assistance to overseas countries. The 1980 Act was a consolidating Act, drawing its provisions from 33 statutes. Section 1(1) of the 1980 Act lays down the purposes for which financial, technical or assistance "of any other nature" can be furnished by the Secretary of State, namely:

"..promoting the development or maintaining the economy of a country or territory outside the United Kingdom, or the welfare of its people..".

14. The basis for the Government's contributions to European Community development programmes, with the exception of the European Development Fund, is the European Communities Act 1972. This is unaffected by the provisions of the Bill.

15. This Bill repeals and replaces the 1980 Act. The main change relates to the purposes for which assistance can be provided.

COMMENTARY ON CLAUSES

16. Clauses 1 to 4 set out the purposes for which the Secretary of State may incur expenditure on the provision of assistance.

Clause 1

17. This clause allows the Secretary of State to provide development assistance to countries and territories outside the United Kingdom if she is satisfied that such assistance is likely to contribute to a reduction in poverty. Reduction in poverty is thus established as the over-arching aim of development assistance given under clause 1.

18. It is anticipated that the largest proportion of assistance given by the Secretary of State under the Bill will be under the powers conferred by this clause. In this sense, clause 1 may be regarded as the core power of the Bill.

19. The terms "poverty", "sustainable development" and "welfare" are not defined in the Bill. It is considered that to do so might reduce the United Kingdom's ability to offer assistance. Subsection (3) of clause 1 defines "sustainable development": it is not intended that the Secretary of State will be bound to take a view of sustainable development that is exclusively or excessively economic on the one hand or exclusively or excessively environmental on the other.

20. Poverty is a complex phenomenon and the actions required to reduce it will necessarily be varied. The power in clause 1 is designed to ensure that the Secretary of State will be able to support a wide range of activities and organisations.

Clause 2 and Schedule 1

21. This clause provides a modified version of the power taken in Clause 1, to allow the United Kingdom to continue to provide support for the United Kingdom Overseas Territories. The Territories are listed in Schedule 1 to the Bill and a power is taken to amend the list by adding or deleting Territories, as circumstances require. The modifications reflect the special position of the Overseas Territories and the United Kingdom's continuing responsibilities in relation to them. The Secretary of State may provide development assistance to United Kingdom Overseas Territories, but the requirement to be satisfied that the assistance is likely to contribute to a reduction in poverty is set aside.

Clause 3

22. This clause enables the Secretary of State to provide humanitarian assistance in response to disaster or other emergency. Natural or man-made disasters are covered. Assistance provided by the Secretary of State under this clause can be for any purpose, and need not be development assistance within the meaning of the Bill. Nor is there is any requirement for the assistance to be likely to contribute to a reduction in poverty.

Clause 4

23. This clause provides (in subsection (1)) for the Secretary of State to undertake activities or enter into arrangements which, while they might not in themselves meet the tests set out in clauses 1, 2 and 3, are preparatory to, or will facilitate the provision of, assistance under these clauses. An example of such activity is the commissioning of research.

24. In subsection (2) of clause 4, the Secretary of State is provided with the power to support organisations and activities that promote an awareness of global poverty, if doing so is likely to contribute to a reduction in poverty.

Clause 5

25. This clause defines the meaning of "assistance" for the purposes of the Bill. It provides that assistance means assistance in any form and of any nature. This is stated to include financial and technical assistance and the supply of materials. "Technical assistance" is not defined, but is stated to include the provision of know-how and scholarships.

Clause 6

26. This clause sets out the kinds of financial assistance that may be provided under the Bill. It allows the Secretary of State to provide a wider range of financial assistance than was possible under the 1980 Act.

27. The new ways in which the Secretary of State will be able to give financial assistance are by:

  • acquiring securities (such as share-holdings and convertible instruments) and taking up options; and

  • offering guarantees.

28. The consent of the Treasury must be obtained before the Secretary of State can give these kinds of financial assistance (see clause 7 of the Bill).

29. It is not envisaged that the Secretary of State will make extensive use of these forms of financial assistance in preference to the power to make grants or loans.

Clause 7

30. This clause sets out the terms on which the Secretary of State may provide assistance. Treasury consent is required to all forms of financial assistance other than a grant.

Clause 8

31. This clause allows the Secretary of State to act through other persons and bodies, as well as directly.

Clauses 9 and 10 and Schedule 2

32. Section 2 of the 1980 Act gave a number of specified statutory bodies (listed in Schedule 2 to that Act) power to enter into arrangements to provide international development assistance. Such assistance could only be provided with ministerial consent. The Bill makes provision similar to these matters.

33. Clause 9 gives the statutory bodies listed in Schedule 2 to the Bill the power to provide assistance outside the United Kingdom. The purposes for which such assistance may be given are similar to those for which the Secretary of State can give assistance:

  • furthering sustainable development;

  • improving the welfare of the population; or

  • alleviating the effects of a disaster or emergency.

However, the statutory bodies are prohibited from giving financial assistance.

34. A statutory body may only give assistance under this clause if it has the consent of the Secretary of State to do so. However, the devolution arrangements which are now in place mean that in some cases the giving of this consent needs to be subject to the approval of the devolved administrations.

35. As regards Scotland, international development is a reserved matter under the Scotland Act 1998. However, there is an exception to this reservation in the case of assistance given to Ministers in relation to international development by statutory bodies for which Scottish Ministers are responsible.

36. Subsection (4)(a) of clause 9 therefore provides that the Secretary of State's approval for certain bodies to provide assistance may be given only with the consent of the Scottish Ministers. The bodies to which this requirement relates are determined in accordance with clause 10(1) of the Bill. These are:

  • "Scottish bodies": those bodies whose functions are all exercisable in or as regards Scotland and do not relate to reserved matters under the Scotland Act 1998; and

  • "Cross-border bodies": those bodies which have some functions exercisable in or as regards Scotland which do not relate to reserved matters under the Scotland Act 1998.

37. As regards Wales, the Welsh Assembly has no direct interest in international development. However, a number of statutory bodies listed in Schedule 2 to the Bill are responsible to the Assembly.

38. Subsection (4)(b) of clause 9 therefore provides that the Secretary of State's approval for certain bodies to provide assistance may be given only with the consent of the Welsh Assembly. The bodies to which this requirement relates are determined in accordance with clause 10(2) of the Bill. These "Welsh bodies" are those bodies whose functions are exercisable only or mainly in or as regards Wales, unless the Secretary of State has made an order excluding a body from this requirement.

39. Under subsection (5) of clause 9 an order may provide for a body to be added to or deleted from the list of bodies set out in Schedule 2 to the Bill. Such an order is made:

  • by the Scottish Ministers, if the body is a Scottish body;

  • by the Secretary of State with the consent of the Scottish Ministers, if the body is a cross-border body;

  • by the Welsh Assembly, if the body is a Welsh body;

  • by the Secretary of State, in any other case.

Clause 11

40. This clause allows contributions to be made to multilateral development banks (including their concessional lending facilities), such as the World Bank and the Regional Development Banks, and requires that such commitments be made through an order made by the Secretary of State with the approval of the Treasury. Before an order is made a draft of it must be laid before the House of Commons for approval. This clause replaces all the powers currently used under the 1980 Act relating to these banks.

Clause 12

41. This clause allows provision to be made by Order in Council for privileges and immunities which attach to various international financial institutions. Before an order is made a draft of it must be laid before Parliament and approved by resolution of each House.

Clauses 13 and 14 and Schedule 3

42. These clauses provide for the continued operation of the Commonwealth Scholarship Commission. They are a re-enactment with some modifications of the provisions in the 1980 Act. Schedule 3 sets out the detail of the operation of the Commission.

Clause 15

43. The 1980 Act is repealed in its entirety by the Bill. Where the Bill contains clauses covering the same ground as provisions of the 1980 Act, this repeal is implicit. But the three sections listed here have no equivalents in the Bill; they are not to be replaced with any similar provisions. Their repeal will therefore not be implicit in the agreement of the Bill, and must be explicitly provided for here. All three sections relate to arrangements which no longer exist, and are therefore redundant.

Clause 18

44. This clause requires that any orders under the Bill must be made by statutory instrument. With the exception of an order under clause 11(4) (orders approving payments to multilateral development banks) and an order commencing the Bill, any order made by the Secretary of State is to be subject to the negative resolution procedure. Orders made by Scottish Ministers under clause 9(5) are subject to annulment by the Scottish Parliament.

Clause 19 and Schedules 4 and 5

45. This clause introduces Schedules 4 (consequential amendments) and 5 (repeals) of the Bill.

Clause 20 and Schedule 6

46. This clause sets out the short title of the Bill, its extent and a power to commence it by order. It also introduces Schedule 6, which details the transitional provisions and savings relating to the Bill.

FINANCIAL EFFECTS OF THE BILL

47. The Bill will replace the 1980 Act and will provide the main statutory authority for Government expenditure on overseas assistance. It is not expected that the sums expended under the Bill will be significantly greater than those expended immediately beforehand under the 1980 Act. There are no implications for the Consolidated Fund or the National Loan Fund.

EFFECTS OF THE BILL ON PUBLIC SECTOR MANPOWER

48. The Bill has no implications for Public Sector manpower.

COMPLIANCE COST ASSESSMENT

49. The Regulatory Impact Unit has confirmed that no Regulatory Impact Assessment is required.

50. The Bill does not require any compliance by the private sector or civil society organisations.

EUROPEAN CONVENTION ON HUMAN RIGHTS

51. The Baroness Amos has made the following statement:

    "In my view the provisions of the International Development Bill are compatible with the Convention rights."

COMMENCEMENT

52. It is intended that the Act will come into force on an appointed day, to be decided later.

 
 
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Prepared: 24 April 2001