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Leader comment: Aid cut is indefinite

by
16 July 2021

WHEN, in 2015, the Conservative government under David Cameron set in stone its commitment to giving 0.7 per cent of the gross national income in aid, people working in the development field were aware that the hammer and chisel were left lying to one side. Even at that stage, the definition of aid was being broadened to include initiatives that would ordinarily have fallen under the headings of defence or trade. When international aid was incorporated into the Foreign, Commonwealth and Development Office in 2020, the chisel was plied with increasing vigour. Even then, however, few predicted that, in November, the chisel would be set down, and that the Chancellor would simply use the hammer.

In the debate on Tuesday, called at short notice after a busy time for the government whips and with a carefully worded motion, the Commons heard repeated assurances of the Government’s continued commitment to the 0.7-per-cent target. In the end, though, the hitting of that target appears to be more remote than before. The two fiscal conditions set out by the Treasury — public debt must be falling as a percentage of Gross Domestic Product, and the budget must be in surplus — push the restoration of the aid budget over the horizon. The Office for Budget Responsibility predicts that the first condition will not be met until 2024-25; it makes no prediction about the second. On Tuesday, the Leader of the Opposition suggested that those conditions had been met only once in the past 20 years.

Anyone taking comfort from the Bank of England’s cheerful economic forecasts are thus mistaken. On the evidence of Tuesday, the Government has no intention of restoring the aid budget within the life of this Parliament. This is not mere supposition. The former Prime Minister Theresa May, speaking during the debate to voice her opposition to the cut, reported a conversation with the Chancellor on the previous evening: “I asked how long it would take before the tests are met and we return to 0.7 per cent. I was told: ‘Four to five years, but it could be sooner, because the economy is recovering so well.’”

Even if one subscribed to the view that it was irresponsible to borrow money to give it away — as borrowing is currently at £400 billion, every item of government expenditure could be argued against in the same way — this fails to take into account the ease with which the Government can borrow at very little interest. This facility is unavailable to the heavily indebted countries dependent on UK aid. Lost in all this argument is the simple fact that even 0.7 per cent of GNI is pitiful — or, more accurately, pitiless. In the debate, the Scottish MP Chris Law recounted telling primary-school pupils that this amounted to 7p in every £10. “They are surprised at how little we spend as the sixth wealthiest nation in the world, and they are right to be so.”

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