Britain slashes foreign aid budget to 0.5% of national income in spending review

Reduction angers development organisations and MPs with one minister resigning

Finance chief Rishi Sunak sets out new 12-month plan as cold reality of Covid costs laid bare

Finance chief Rishi Sunak sets out new 12-month plan as cold reality of Covid costs laid bare
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The British government slashed its foreign aid budget to 0.5 per cent of national income on Wednesday, as Finance Minister Rishi Sunak looked for ways to help pay for the Covid-induced economic crisis.

Mr Sunak's move to suspend the UK's commitment to spend 0.7 per cent of national income, part of a 12-month spending review, caused an immediate outcry with anger from development organisations and one minister resigning.

Mr Sunak said the decision, part of an annual review of government spending, came at a time of unprecedented crisis and the "government must make tough choices".

"During a domestic fiscal emergency, when we need to prioritise our limited resources on jobs and public services, sticking rigidly to spending 0.7 per cent of our national income on overseas aid is difficult to justify," Mr Sunak said in a speech to parliament, pointing to record high peacetime borrowing levels.

Britain's economy will contract 11.3 per cent in 2020 – the most in more than 300 years – with the government set to borrow £394bn in the 2020-21 fiscal year, the equivalent of 19 per cent of gross domestic product (GDP) to help fund the rising Covid-19 bill.

The 0.7 per cent foreign aid target was originally unveiled by Tony Blair in 2005 when he was led the country, and was a commitment made by the ruling Conservative Party in the run-up to last year's election.

"We will continue to protect the world's poorest, spending the equivalent of 0.5 per cent of our national income on overseas aid in 2021, allocating £10bn at this spending review, and our intention is to return to 0.7 per cent when the fiscal situation allows," said Mr Sunak.

The government minister for sustainable development, Liz Sugg, resigned over Mr Sunak's decision, saying it diminished Britain's global influence.

Several senior members of the ruling Conservative Party, including former foreign minister Jeremy Hunt, also criticised the move.

"To cut our aid budget by a third in a year when millions more will fall into extreme poverty will make not just them poorer, but us poorer in the eyes of the world," Mr Hunt said.

Former international development secretary Andrew Mitchell told MPs the cuts would cause “100,000 preventable deaths, mainly among children”.

The UK was one of only five countries, alongside Luxembourg, Norway, Sweden and Denmark, to meet the UN commitment of spending 0.7 per cent of GDP on overseas aid.

Tom Tugendhat, chairman of the foreign affairs committee, compared the cost of overseas aid to that of fighting slavery.

He tweeted:

Pakistani Nobel Peace Prize Laureate Malala Yousafzai urged the UK to think again, tagging both Prime Minister Boris Johnson and Mr Sunak in her tweet.

Mr Sunak defended his decision, however. “Based on the latest OECD data, the UK would remain the second highest aid donor in the G7, higher than France, Italy, Japan, Canada and the United States,” he said.

“And 0.5 per cent is also considerably more than the 29 countries on the OECD’s development assistance committee – who average just 0.38 per cent.”

Earlier this week, former prime ministers Blair and David Cameron urged the government to retain the 0.7 per cent target, saying to cut it would damage Britain's influence on the world stage.