Nobel Prize Laureate Malala Yousafzai urges Rishi Sunak not to slash foreign aid

UK Finance Chief expected to cut overseas fund as he reveals 12-month plan for the economy

Pakistani activist and Nobel Peace Prize Laureate Malala Yousafzai says Covid could force more than 20 million girls out of school, which is why the UK's foreign aid is so essential. AFP

Nobel Prize Laureate Malala Yousafzai has urged the British government not to slash its foreign aid budget in Wednesday’s spending review, as the UK looks to prop up its economy in the wake of the Covid-19 pandemic.

UK Finance Minister Rishi Sunak is expected to suspend the UK’s commitment to spend 0.7 per cent of national income on overseas aid during his comprehensive review, with a cut to 0.5 per cent likely.

Ms Yousafzai tweeted:

The 12-month reduction in foreign aid expenditure is expected to be justified by Mr Sunak because it comes at a time of severe economic hardship for Britain.

Mr Sunak's spending during the Covid-19 crisis has driven debt above £2 trillion ($2.67tn) for the first time on record with the amount in June also exceeding the size of the economy for the first time since the 1960s.

Measures to slow the spread of the virus have shuttered businesses and caused a spike in unemployment in the UK with the jobless rate surging to 4.8 per cent in September – the highest level in four years.

The Office for Budget Responsibility is expected to show gross domestic product (GDP) shrinking about 11 per cent this year – the most in over 300 years – and the budget deficit approaching £400bn, the highest ever in peacetime, which is why Mr Sunak is seeking ways to trim spending.

Overseas aid is fixed by law at a minimum of 0.7 per cent of gross national income, a target set in 2005 by Tony Blair when he was Prime Minister. The international development fund currently stands at £15bn.

Mr Sunak, Boris Johnson and Foreign Secretary Dominic Raab have all refused to deny that this amount will be squeezed, with the prospect unnerving Conservative Party members who fear it will diminish the UK’s international reputation and influence.

While exemptions in the International Development Act allow the government to miss the target on foreign aid expenditure in certain circumstances, critics argue that these can only apply retrospectively.

This could see Mr Raab, the minister responsible for the commitment, facing a legal challenge if the government seeks to declare in advance that it intends to cut the funding.

Former ministers including Tobias Ellwood deplore the idea of diminishing UK influence just as the country is trying to portray a positive, global outlook.

“I hope the Chancellor does not choose to balance the books on the back of the world’s poorest,” said Harriett Baldwin, a former development minister.

Earlier this week, former prime ministers David Cameron and Tony Blair also weighed in on the argument, urging the government not to commit to the proposed 0.2 per cent foreign aid cut.

Mr Cameron called squeezing Britain's overseas aid spending a "moral, strategic and political mistake".

"I hope the PM will stick to his clear manifesto promise, maintain UK leadership and save lives," he said.

Mr Cameron and Mr Blair had already formed a troika of ex prime ministers with Sir John Major in June to criticise the merging of the international department with the foreign office.

Unlike budgets, spending reviews do not set or alter taxes, but with the UK’s public finances battered by the effects of Covid-19, Mr Sunak has cut the review’s scope from three years to one – and may hint at how he aims to rein in the deficit.

"My number one priority is to protect jobs and livelihoods across the UK," he said, ahead of his speech.

"This spending review will ensure hundreds of thousands of jobs are supported and protected in the acute phase of this crisis and beyond, with a multi-billion package of investment to ensure that no one is left without hope or opportunity."

Fighting the pandemic will remain the priority, with an addition £7bn injected into the Covid-19 test-and-trace programme and £3bn set aside to help the National Health Service deal with the pressures of the virus, as well as a backlog of routine surgeries and treatments.

Other measures expected include a £2.9bn, three-year jobs programme to help more than a million unemployed people get back into work and £1.4bn to increase the capacity of job centres.

Mr Sunak has refused to confirm whether he will impose a public sector pay freeze.

Statistics show public sector workers earned an average 7 per cent more than those in the private sector in 2019, adjusted to allow for pensions, skill levels and job characteristics. Those employees have also fared better during the pandemic, which has cost hundreds of thousands of private sector jobs and furloughed millions on reduced incomes.