Abandon overseas aid pledge, lords urge No 10

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Britain should drop its pledge to maintain its level of aid to the world's poorest countries, a House of Lords inquiry recommends today.

A report from an all-party group of peers urges David Cameron to scrap plans to enshrine in UK law the United Nations target for nations to spend 0.7 per cent of their gross national income on overseas aid.

The £8bn-a-year aid budget is due to rise by 37 per cent by 2015, the only area of government spending exempt from cuts apart from the NHS. The commitment to the UN target is opposed by many Conservative MPs and activists but was one of Mr Cameron's key pledges as he modernised his party.

The Lords Economic Affairs Committee argues that the goal is "arbitrary" and says that after next year – the deadline for the UN target – Britain's aid should be measured in terms of value for money rather than amount spent. It describes the proposed law as "political", saying it would deprive future governments of the flexibility to respond to changing circumstances at home and abroad.

Its proposals were swiftly rejected last night by Andrew Mitchell, the International Development Secretary, who warned they would "cost lives." He said: "The Government makes no apologies for sticking to its commitments to the world's poorest people."

The Lords inquiry criticises the Department for International Development for not doing enough to tackle fraud, describing the £1.2m found to have been syphoned off last year as "paltry and implausibly low". It urged an "early exit strategy" from Britain's aid programme in India.

It warns: "Large and prolonged aid programmes can have a corrosive effect on local political systems when the priority becomes to attract aid rather than to solve problems.