Kenneth Clarke, in his Budget speech last week, painted a picture of a thriving economy. We were experiencing a "Rolls-Royce recovery", he said, with five years of strong growth behind us and more to come. We had an "enviable combination of rising prosperity, low inflation and more jobs", and so a prosperous future beckoned "for all sections of our people". Why then was it necessary to cut the overseas aid budget, once again reducing the help that we give to the world's poorest people? In the current year, 1996-97, our aid spending will be pounds 2.2bn; the new budget for 1997-98 allows for spending of pounds 2.05bn, a reduction of pounds 150m. Aid organisations calculate that our aid contribution will then be 0.24 per cent of gross national product, down from 0.51 per cent when the Conservatives took office in 1979 (the United Nations target is 0.7 per cent). As our Rolls-Royce economy gathers speed, it seems we pass less and less out of the window to the developing world. In the early 1980s, when the cheeseparing began, ministers insisted that this was temporary, and that as soon as the economy improved the percentage would creep up again. It never has.

In fairness to the Government, they are not alone, for other countries have been trimming their aid budgets. There are many reasons for this. There is disillusionment with the business of aid, born of a sense of hopelessness in the face of the Third World's problems, of the experience of corruption and mismanagement in the use of aid, and of the failure of some development projects. People increasingly view aid in the same light as they have come to see welfare spending: as intrinsically wrong, inclined to discourage enterprise and encourage dependency. The idea has taken root that the best thing we can do for the Third World is look after ourselves: if we in the West have healthy economies founded on realism rather than do-goodery, the argument runs, then ultimately our wealth will trickle down to the poor countries in the form of sound investment and hard-cash imports of their products. This is an extension of the thinking which, applied at home, has made Britain the most unequal society in the Western world, and it has the same chance of success with the Third World. The truth is simple: as we have experienced what we consider to be hardship and insecurity we have become more selfish. We flatter ourselves that giving money to telethons and disaster appeals makes us generous, yet we raise hardly a squeak when pounds 150m is lopped off the aid budget to help fund a 1p tax cut.

As our aid effort has dwindled over the years, the Government has fallen back on the claim that the money now goes further because it is more effectively administered. "The quality and targeting of Britain's long-term development programme, and assistance provided in emergency situations, is internationally recognised," the Overseas Development Administration said last week, when it released the new budget figures. This quality and targeting, however, was called into question in another document released last week, a report by the National Audit Office on British aid to Indonesia. To begin with, it may surprise many taxpayers to learn that Indonesia, a country that may be relatively poor but is hardly a basket-case, is the fifth-largest recipient of British aid. It may also be a surprise that in a state where the same man, General Suharto, has held power since 1966, and which is widely criticised for its human rights record and particularly its cruel, illegal occupation of East Timor, Britain has spent pounds 2m on improving police training. One justification for this was, apparently, that we might help human rights by improving the police culture. That seems a long shot. Another was expressed by the Foreign Office, which noted that the benefits of the project "were not entirely on the Indonesian side" and "stressed how it hoped Indonesia would look to the UK for further defence equipment purchases". This appears to be a perversion of aid of the kind that landed the Government in so much trouble over the Pergau dam project.

Is this country really losing the will to share even a small fraction of its relative wealth with the world's poorest peoples? And do we really want our diminishing aid budget used to subsidise our arms exports? These are gloomy thoughts, but they are thoughts which, after last week, are difficult to avoid.