Current Affairs UK

Why cuts to foreign aid won’t help the UK economy

Written by Emily Rose Latimer

The British government has plans to slash hundreds of millions of pounds in foreign aid to countries in conflict zones around the world. A decision not only damaging to these countries, but also to ourselves.

£164m was budgeted to Yemen in 2020, but this has now been cut to £87 million. The cuts have sparked huge criticism as it fails some of the most hungry and terrified people, with more than 100 UK charities condemning the government’s decision.

The budget report states that: “The seismic impact of the pandemic on the UK economy has forced the government to take tough but necessary decisions, including this temporary reduction in the overall amount we spend on aid”.  However, whilst the government justifies its decision with the coronavirus crisis and its economic impact at home, the wider picture in terms of benefits these cuts will actually generate isn’t so simple. 

Furthermore, since the pandemic has only further highlighted our fragility and dependence on the rest of the world, as we exit lockdown and come out of the pandemic now is not the time to be looking towards nationalism. 

Instead it should  be an opportunity to strengthen and rebuild our international bonds as we work together to rebuild global health and development.

What cuts have been made?

Britain is among 30 wealthy countries including Germany and Japan that vowed to commit 0.7% of their gross national income yearly for international development since the mid-1970s.But as part of his spending review, chancellor Rishi Sunak has announced a cut to the UK’s foreign aid budget from 0.7% to 0.5%.

This is despite the Conservative party manifesto promising to maintain aid spending at the level of 0.7%.

There are likely to be cuts to war-torn areas including cuts to Somalia by 60%, South Sudan by 59%, Syria 67% and Libya 63%.

Why foreign aid is important

Overseas aid works. Since 1990, the number of people living in extreme poverty has more than halved demonstrating the impact it can have.

Photo by Christine Roy on Unsplash.

UK aid aims to reach people living in some of the poorest and most vulnerable places in the world such as Yemen, the world’s biggest humanitarian crisis, with 80% of the population reliant on aid.

UK aid also has strict reporting arrangements in place ensuring the best value for money for the taxpayer.

The bigger picture

Further to popular belief the amount recouped from cutting the aid budget to 0.5% GNI next year (circa £4 billion) actually does little to help with the budget deficit, which currently stands at close to £400 billion.

Whereas the impact of cutting the aid budget by this much could be extreme and it is estimated that more than 100,000 lives could be lost as a result.

The 0.7% commitment is also already designed to go up and down, depending on the health
of the economy, so there have already been cuts to the aid budget this year as a result of
the economic downturn.

Put in relative terms, last year in 2019/2020 Britain spent 15 billion pounds on foreign aid,
whilst total healthcare expenditure was around 175 billion and approximately 42.2 billion
British pounds were spent on defence.

It’s clear with less than 1% of the UK’s gross national income spent on foreign aid (0.7p for every £1 in tax), the amount is actually very little. 

Photo by Christopher Bill via Unsplash.

With foreign aid only making up a small proportion of our national spending, it therefore only seems rational to deduct that motivations behind these cuts come from a different place than purely money saving. 

This can particularly be seen since investment in foreign aid is in fact mutually beneficial to the UK. 

Supporters of the budget have suggested the majority of the money “invested” in developing nations has led to subsequent gains for the UK.  For example, through investing in emerging markets which allow us to reap financial rewards of close trading links with developing nations as well as helping the refugee crisis which in turn helps immigration.

Africa’s combined GDP is set to reach $3.2 trillion in the next five years and is home to five of the world’s fastest-growing economies. By providing lifesaving aid, we help stimulate economic growth and job creation, building stronger relationships with these countries. 

Cutting foreign aid and weakening our global leadership position post Brexit at a time when the UK needs to maintain a position of international power, is therefore hugely counterproductive.

Baroness Sugg, a former international development minister told The Independent: “Cutting our aid and overseas investments sends a message that Britain is withdrawing from the world at the very moment we should be showing strong leadership.”

What impact will these cuts have?

Further to the impact cutting foreign aid could have on the UK as a country, there are also huge moral implications.

Acute hunger is likely to soar in more than 20 countries in the next few months, the UN has warned with an estimated 34 million people ‘one step away from starvation’. Families in pockets of Yemen and South Sudan are already in the grip of starvation, according to a recent report on hunger hotspots published by the agency’s Food and Agriculture Organization (FAO) and World Food Programme (WFP).

Plus, with much of the UK ODA budget spent in former British colonies and Commonwealth member states, this moral obligation runs deeper.

Given the adverse impact of British colonialism around the world, it seems reasonable to expect the UK to be at the forefront of addressing some of the lingering problems of its former colonies – particularly at a time when support is most needed.

Political motivations

A YouGov poll in November found two thirds of Brits are in support of foreign aid cuts. The government knows that at a time of domestic austerity people want to see nationalism, and will likely view the cuts as a necessary and sensible investment back into our economy.

However, with the government recently increasing the defence budget by £21.9 billion and spending £2.6 million on a new press room, there are clearly many other places we could sensibly make cuts if needed. 

By cutting foreign aid the government is pandering to swing-votes, but in doing so is adversely damaging our reputation and our economy in a decision that is ultimately short-sighted. 

Featured images courtesy of Unsplash. Image licence found here. No changes have been made to these images.

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