Rishi Sunak confirms foreign aid will be slashed next year – but says it will rise again in future
RISHI Sunak has confirmed foreign aid will be slashed to 0.5 per cent of GDP next year to help pay for the Covid crisis – but has promised it will rise again in future.
The Chancellor said “tough decisions” had to be made but the fiercely controversial decision triggered the resignation of a Tory Foreign Office minister.
In his spending review, the Chancellor said today: “I want to reassure the house that we will continue to protect the world’s poorest, spending the equivalent of 0.5 per cent our national income in 2021 – allocating £10billion at this spending review.
“Our intention is to return to 0.7 per cent when the fiscal situation allows.”
He said Britain would remain the second highest spender on overseas aid after the US.
Foreign Office Minister Baroness Sugg has quit over the decision, declaring the cut to foreign aid “fundamentally wrong”.
In a letter to the PM, Baroness Sugg said: “This promise should be kept in the tough times as well as the good.
“Given the link between our development spend and the health of our economy, the economic downturn has already led to significant cuts this year and I do not believe we should reduce our support further at a time of unprecedented global crises.”
Boris Johnson said he was “very sorry” to receive Baroness Sugg’s letter.
And Foreign Secretary Dominic Raab said: “
Foreign Secretary Dominic Raab said: “Liz has been a great minister and we will sorely miss her.
“She can be proud of her record championing girls’ education, promoting gender equality, supporting our Overseas Territories and the UK’s vital relations in the Caribbean. I am sorry to see her go.”
Mr Sunak is under massive pressure to gain control of the public finances after a year of dishing out huge amounts of cash to keep the country afloat during the coronavirus crisis.
And he warned today Britain was facing an “economic emergency” as debt was forecast to mount to £400billion by the end of the year.
In a gloomy statement he told MPs and the nation:
- The Government is on track to dish out a huge £280bn to get our country through coronavirus this year alone – and £18billion is planned for next year
- The nation’s debt is forecast to continue rising in every year, reaching 97.5 per cent of GDP in 2025-26
- The economy will shrink by 11 per cent this year – the largest fall for more than 300 years
- Unemployment will rise to a peak of 7.4 per cent – 2.6million people – by the second quarter next year
- NHS staff to get pay RISE but millions of public sector workers face pay freeze
- 2million will get a National living wage hike to £8.91 an hour
- Foreign aid will be cut to 0.5 per cent of GDP next year – but he hopes to raise it back again afterwards
- A £4billion ‘levelling up’ fund to help areas in the North hit hardest by the pandemic
- Day to day public spending is up overall in real terms by 3.8 per cent, or £14bn more
- Manifesto promises kept on schools, hospitals and police funding
The Chancellor told MPs: “Sticking rigidly to spending 0.7% of our national income on overseas aid, is difficult to justify to the British people, especially when we’re seeing the highest peacetime levels of borrowing on record.
“I have listened with great respect to those who have argued passionately to retain this target.
“But at a time of unprecedented crisis government must make tough choices.”
And as the Chancellor looks down the barrel of a bleak winter of local coronavirus restrictions, even more money will be needed to fund it.
The slashed spending will work out to save around £4billion from spending based on last year’s figures.
But it will break the Tory manifesto promise to spend 0.7 per cent a year on aid.
The move will likely be supported by many Conservative supporters.
But it was slammed by the charity Oxfam, who said it will jeopardise Britain’s standing on the world stage.
Danny Sriskandarajah, Oxfam GB chief executive said: “Breaking our aid promise risks significantly undermining one of the UK’s genuine claims to global leadership at a time when it will need all the moral authority it can muster as host of next year’s G7 summit and UN Climate Change negotiations.
“Instead of global Britain, we risk looking like little Britain. The Prime Minister should reverse the cut at the first possible opportunity.”
And Theresa May, David Cameron, Gordon Brown, Tony Blair and Sir John Major have all launched a vocal opposition to the cut.
Former PM Mr Cameron said today he “deeply regrets” the Chancellor’s decision to reduce the overseas aid budget from 0.7 per cent of GCP to 0.5 per cent.
He tweeted: “0.7% is ultimately very simple. We share this planet with millions who are starving, with mothers who die needlessly in childbirth and with children who die of preventable diseases and with countries that are broken by conflict, corruption and poverty.
“The questions are: do we care, do we act and do we lead? The promise of 0.7 meant that we – Global Britain- answered ‘yes’ to all three. And that’s a promise worth keeping.”
Malala Yousafzai, the Oxford educated Pakistani activist and Nobel Peace laureat, blasted the PM and Mr Sunak for the decision.
She wrote: “I am deeply disappointed @BorisJohnson and @RishiSunak that you chose to abandon the UK’s 0.7% pledge to aid – when a generation of girls are leaning on that support.
“I hope you will think again, find a way to reverse the cuts and protect girls education.”
The Archbishop of Canterbury called the decision “shameful and wrong”.
He stormed: “The cut in the aid budget – made worse by no set date for restoration – is shameful and wrong.
“It’s contrary to numerous Government promises and its manifesto.
“I join others in urging MPs to reject it for the good of the poorest, and the UK’s own reputation and interest.
In the fierce backlash to the plan, Tory ex-PM Sir John told The Times the plan was morally wrong and politically disastrous.
He said: “Cutting our overseas aid is morally wrong and politically unwise.
“It breaks our word and damages our soft power.
“Above all, it will hurt many of the poorest people in the world. I cannot and do not support it.”
Mrs May is also reported to have expressed her displeasure at the plan to her colleagues.
Both Mr Cameron and Mr Blair made a joint intervention against the cuts to foreign aid last week, branding it a strategic blunder.
Mr Brown has also said it risks destroying Britain’s reputation on the world stage.
More than 20 Tory MPs are also preparing to rebel against the cuts, though there is broad support for it across so called “Red Wall” MPs which turned their seats Blue last December.