Yesterday, the House of Commons was given the opportunity to vote on the Government's plans for international aid spending. I voted for the motion, which will provide certainty for our international aid spending by clearly outlining a path back to 0.7% whilst also maintaining responsible finances and high levels of spending on domestic priorities such as the NHS, schools and police.
The damage inflicted on our economy and public finances by the pandemic has been severe. We have suffered the biggest recession in 300 years. And last year, we borrowed nearly £300 billion – nearly 15 per cent of GDP – the highest since the Second World War. This year, we will borrow the second largest amount. The economic damage of coronavirus obviously cannot be fixed overnight.
That is why we took the difficult decision to temporarily reduce the ODA budget to 0.5 per cent due to specific ‘fiscal circumstances’, as explicitly allowed for in the 2015 International Development Act.
However, as the reduction to 0.5 per cent is temporary, we are listening to the concerns of colleagues by defining those responsible fiscal circumstances under which we will return to 0.7 per cent: no longer borrowing for day-to-day spending and debt falling, as set out in our Manifesto. Crucially, the government is effectively surrendering control to independent OBR forecasts.
At 0.5 per cent, the UK is still spending over £10 billion on ODA this year – making sure we remain one of the largest ODA spenders in the world. Based on 2019 OECD data, the UK would be the G7’s second highest ODA spending country as a proportion of gross national income, spending more than Japan (0.29 per cent), Canada (0.27 per cent), Italy (0.24 per cent), and the US (0.16 per cent). We will also spend well above the average of the 29 members of the OECD’s Development Assistance Committee (0.38 per cent). The UK has spent 0.7 per cent on ODA every year since 2013 – the only G7 member to do so.
We are also a moral and humanitarian leader by spending money on causes on top of our ODA budget: defence, diplomacy, trade, peacekeeping, and providing the Oxford-AstraZeneca vaccine, in which the UK Government invested over £85 million, to billions of the world’s poorest people without profit.
On Monday, the Chancellor also made a written statement on the matter, which you can read here.
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