The UK should not “turn its back on some of the poorest people in the world”. That was the powerful argument that Theresa May put forward in the Commons yesterday against the decision by the government to cut the amount of foreign aid by £4bn, from 0.7 per cent of gross national income (GNI) to 0.5 per cent. That the Commons should reject her view and that of the opposition and win the vote with a majority of 35 may be unsurprising, given the size of the government’s overall majority. But the decision is a troubling one, not only for the immediate losses that will be suffered as a result of the cutbacks in planned spending, but also what it says about the future of the UK as an outward-looking nation that seeks to do the right thing for the world.
Public finances are of course under great pressure and will remain so, even as the economy recovers from the devastating effects of the pandemic. The government will have to take measures to bring back the deficit of more than £300bn last year to a sustainable level. This will require difficult choices, all the more so in the context of an ageing population and an underfunded health care system. However, the aid budget should be seen in the context of government tax revenues this year forecast by the Office for Budget Responsibility at £732bn. It was a choice by the government to cut back the aid budget that it did not have to make. The independent Institute for Fiscal Studies points out that total government revenues are forecast to climb solidly in the years ahead.
The decision has been made. So what is to be done?
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