Chopping the UK aid budget

I wrote over 8 years ago in support of George Osborne and his measures to improve transparency over corporate tax, and at the time the UK Government’s continued commitment to spend 0.7% of its gross domestic income (GDI) on overseas aid and development.

Some of the details about how the UK Government has performed against its original pledge, back in 1970, to invest this 0.7% figure, can be found in this round-up piece from last month.

45 years on from that pledge, and Britain did finally join other countries, about 6 years ago now, in achieving the 0.7%.

Sadly, however, the merger of the UK Department for International Development with the Foreign Office, in June 2020, thwarted any momentum that Boris Johnson’s team may have inherited from the Osborne-Cameron era on the topic of overseas aid.

The writing was on the wall then, and the Covid-19 pandemic helped ensure the latest announcement, made as Britain hosts the G7 Summit this week, that the UK will be cutting aid by $4bn. The news sent the House of Commons into a frenzy yesterday, with Tory rebel MPs challenging the Government’s decision.

These latest proposals for cuts mean as much as 42% reductions for some countries and, ultimately, an overall drop down to 0.5% of the UK’s GDI. A decision which many organisations and commentators have pointed out will sever vital funding to countries around the world, such as Yemen and Syria, currently facing respectively inhumane levels of social disruption and economic uncertainty.

Whilst the Government sees the cuts as temporary, there remains a chance of reversing the decision over the coming days. Let’s wait and see. The UK held a strong seam of respect during the Labour administration of the early 2000s, of being innovators in aid and reframing ways of ensuring funds were well spent. It was also that administration which championed the 0.7% target. This respect will evaporate if these cuts go ahead.

And so why this constant going round in circles when it comes to overseas spending?

Those in the UK who voted to leave the EU in 2016, and the many who have switched from Labour to Conservative since, may well represent one reason why these cuts have been put forward. The Covid pandemic has wrought havoc for many, through sickness, job insecurities, and generally uprooting people’s previous priorities. The Government’s recent success at rolling out vaccinations has also piqued public support for Team Boris. He’s “getting the job done”, as he said he would.

Ironically, perhaps, some of these same Leave voters, whilst in theory jubilant now that their votes weren’t cast in vain, could easily be supporters of a reduction in overseas spending, given the unclear economic picture for Britain now that the country isn’t free to trade with its European neighbours.

The same argument would also work for a Remainer, pissed off at Brexit, but concerned at the consequences facing a new dawn of trading and travel agreements – usefully illustrated below by Statista.

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Whichever your chosen political preference, or your views on Brexit, isn’t the case for investing in the social and economic development of other countries around the world, with whom the UK shares business and cultural ties, not good enough a reason to stick to a 0.7% investment?

Last I checked, the UK is host to a multitude of ethnically diverse towns and cities, and home to generations of overseas diaspora, working and paying more taxes than your average multi-national corporation manages to cough up each year.

All sorts of pompous claims are made by the UK about its “global credentials”, most of which rely 100% on Britain’s multi-cultural make-up and diversity – because it certainly isn’t the case that these global credentials can draw any currency from harking back to a time when Great Britain colonised other nations.

Whether the UK has a right to make any of these sorts of claims, or not, the country simply has to find its humanitarian footing in the world.

As a G7 country alone, the wealth commanded by the UK is colossal, when compared to other nations. The decisions made about how the UK invests that wealth is critical in combating social and environmental issues which are stressing everyone, no matter where they are from.

To be in that category of prosperity, to carry that decision making power and influence, impacting not just the 70 million people in the UK, but hundreds of millions of others around the world, is a privilege that many other countries will never experience in the next fifty years.

And, still, with this fortunate positioning in the world, the UK Government is in massive debt and cutting costs wherever it can. It always seems to have been that way. Which means the UK cannot afford to loosen any grip it has on its connections with other countries, in whatever form – its economy and society relies on other nations for so much.

Countries like Bangladesh, one of the places to have benefitted in the past from UK aid, and which could now have that support diluted, supply UK fashion retailers with millions of items every week.

From all across the continent of Africa, where UK aid has historically been of vital importance, the UK imports a range of products – vegetables, fruits, nuts, metals, beverages, chemicals, crude oil, to name a few – and as an import market Africa is key for the UK motor industry, for medicines and electrical equipment.

To Pakistan, one of the UK’s largest recipients of aid, the UK also relies on exporting industrial and power generation machinery, telecoms equipment and pharmaceuticals to the tune of $1.5bn a year.

For these trade partnerships to thrive in the future, it is in the vested interests of the UK to see social and economic development thrive in partner countries. It’s a win-win. It has to be seen like this, or else we will forever be circling the drain in terms of this debate about overseas expenditure.

There was a time when Britain sought aid and support from the world: 1945, at the end of the Second World War, during a period when my old organisation, CARE International, was established, and “CARE packages” were sent to war-torn Europe.

That commitment, by the USA, laid a foundational brick for the CARE network, which has succeeded year-on-year since, in supporting the most vulnerable and marginalised around the world.

Now is not the time for the UK to be trimming the fat off the very same type of budgets which came to the rescue of the many millions of British families effected by conflict 75 years ago.

On the contrary, it is the time for the UK to aspire to actually being a global leader and decision maker, known for raising the bar of investment in the wellbeing of others, rather than lowering it.

Making change happen: Collaboration, and the power of Storytelling

Children reading Lafaek Community Magazine. Photo Credit Sarah Rippin/CARE

I’ve been working in Dili, the capital of Timor-Leste (East Timor) this week, and it’s been a privilege as always to spend time in new surrounds. More so when stationed one hundred metres from the sea, with spectacular daily sunsets, and some of the tastiest coffee money can buy. 

Timor is an island, just a short hop north of Darwin, Australia, and up until quite recently, following 500 years of Portuguese occupation, was an Indonesian colony (between 1975 and 1999). The western side of the island is still governed by Indonesia. Timor-Leste claimed its independence in 2002.

Like so many other countries in 2016, Timor-Leste is experiencing the effects of the current El Nino droughts, disrupting the country’s wet season and ruining harvesting potential. A topic covered on this site back in March during my time in Ethiopia.

My assignment this week, however, has been to support CARE’s work to engage more with private sector companies in Timor-Leste (banks, retail, media and others) and examine ways in which, together, initiatives and relationships can be forged to tackle some of the social and economic challenges the country faces – poor infrastructure, lack of employment opportunities, issues around food security and nutrition, financial literacy, to name a few. Even without a more severe El Nino year, Timor-Leste is dealing with all of these mini crises combined.     Continue reading “Making change happen: Collaboration, and the power of Storytelling”

Raising the bar on tax

What can you do today that will make a difference?

George Osborne, the UK Chancellor, was front page news yesterday, receiving positive plaudits from Action Aid and the ONE Campaign, as well as from other organisations also not known for being routinely generous with such public praise.

The story in question centres around how large corporations have skillfully dodged paying taxes to poorer countries in which they conduct business.  Osborne used his attendance at a G20 meeting of finance ministers to make UK Govt commitments to a “new agenda of transparency” that will move towards stamping out skillful tax dodging by said corporations.

At the same time, he took the opportunity, quite rightly, to reinforce his government’s own pledge to increase to 0.7% (of GNI – gross national income) the funds it spends on international development programmes around the world.

The argument against increasing this UK “aid” budget has been made time and again since the Conservatives took office nearly 3 years ago, and no doubt Osborne’s piece in the Observer will not go down well with many.  Whilst 0.7% is a small percentage compared to other government budgets, it still amounts to tens of millions of pounds of tax payers’ money.  All other public sector budgets have been cut and, last year, the UK economy flat-lined, triple dipping back into recession. Continue reading “Raising the bar on tax”