The Secretary of State for Foreign, Commonwealth and Development Affairs and First Secretary of State (Dominic Raab)
Madam Deputy Speaker, I will make a statement to the House on official development assistance. The House will know that my right hon. Friend the Chancellor updated the House yesterday on the economic challenges posed by covid-19. It is a truly sobering assessment. The UK is facing the worst economic contraction in almost 300 years and a budget deficit of close to £400 billion—double what we faced in the last financial crisis. Britain is responding to a health emergency, but also an economic emergency, and every penny of public spending will rightly come under intense scrutiny by our constituents.
Given the impact of the global pandemic on the economy and, as a result, the public finances, we have concluded after extensive consideration—and, I have to say, with regret—that we cannot for the moment meet our target of spending 0.7% of gross national income on ODA, and we will move to a target of 0.5% next year. Let me reassure the House that this is a temporary measure. It is a measure we have taken as a matter of necessity, and we will return to 0.7% when the fiscal situation permits.
The relevant legislation, the International Development (Official Development Assistance Target) Act 2015, envisages circumstances in which the 0.7% target may not be met, in particular in the context of economic pressures. The Act provides for accountability to Parliament in that event, and I will of course report to the House in the proper way. Equally, given the requirements of the Act, the fact that we cannot at this moment predict with certainty when the current fiscal circumstances will have sufficiently improved and our need to plan accordingly, we will need to bring forward legislation in due course.
We are not alone in facing these painful choices. All countries are reconciling themselves not just to the health impact of the pandemic, but the economic impact of covid-19. It is worth saying that on the 2019 OECD data, only one other G20 member allocated 0.5% or more of GNI to development spending, and that was before the pandemic. Many countries are reappraising their spending plans, as we have been forced to do. As a result, we nevertheless expect our development spending next year to total around £10 billion, maintaining our status as one of the leading countries in the world in ODA spend.
I can reassure the House that we will retain our position as a leader in the global fight against poverty. We will remain committed to following the rules set by the OECD’s Development Assistance Committee, and we will ensure the maximum impact from our aid through the strategic integration we are driving as a result of the merger at the Foreign, Commonwealth and Development Office, the strategic thinking that is informed by the integrated review, and the further changes we are now making on how we allocate ODA to support a more integrated and overarching approach.
Let me say a little more on that integrated approach. Our starting point is the integrated review, with which we are setting the long-term strategic aims of our international work, based on our values and grounded in the British national interest. To achieve this, we will be taking a far more joined-up approach right across the breadth of government. That is why the Prime Minister created the Foreign, Commonwealth and Development Office, bringing diplomacy and development together, in lockstep with the work of our other Departments. ODA is a vital, central and absolutely indispensable element of that strategic approach, but to maximise its effectiveness it must be used in combination with our development policy expertise, our security deployments and support abroad, and the strengthened global co-operation that we drive through our diplomatic network. We make our aid go further by bringing it together with all these other elements, and by making sure that they are all aligned and pushing in the same direction.
Last week, the Prime Minister set out how we are strengthening our defence and security capabilities. That will boost our standing in the world, while also contributing to our development efforts, including our soft power abroad. The clearest illustration of that is the peacekeeping that we do. We have British troop deployments in Afghanistan, South Sudan, Somalia, the Democratic Republic of the Congo and elsewhere, which work hand in hand with our development and diplomatic efforts. Indeed, we are demonstrating that with our latest deployment of 300 UK troops to Mali. Our security and defence budget also helps countries to deal with new, emerging and evolving threats, for example, in supporting Nigeria and Kenya to assess and strengthen their cyber-security resilience. We will set out the full detail of the integrated review early in the new year, as we launch our presidencies of the G7 and COP26, with 2021 a year of leadership for global Britain as a force for good in the world.
This new strategic approach will allow us to drive greater impact from our £10 billion of ODA spending next year, notwithstanding the very difficult financial pressures we face. I will prioritise that £10 billion of spending in five particular ways. First, we will prioritise measures to tackle climate change, protect biodiversity and finance low-carbon and climate-resilient technologies, such as solar and wind, in poor and emerging economies. I can reassure the House that we will maintain our commitment to double international climate finance, which is vital to maintain our ambitions in this area as we host COP26. We will leverage our aid support through our diplomatic network, to galvanise global action and to make sure that countries come forward with ambitious, game-changing commitments in the lead-up to November next year.
Secondly, we will prioritise measures to tackle covid, and promote wider international health security. We will maintain our position as a world leader, investing in Gavi the Vaccine Alliance, COVAX, the Global Fund to Fight AIDS, Tuberculosis and Malaria, and the International Finance Facility for Immunisation. We will continue to support and strengthen the World Health Organisation, as the second largest state donor; I spoke to Dr Tedros just yesterday about our efforts in that regard. We will also use all of our other levers to maximise British impact. For example, we have magnified our COVAX contribution through our diplomatic efforts, which helped to convince the board of the World Bank to announce additional funding last month of up to $12 billion for covid vaccines, tests and treatments. Again, I spoke to World Bank president David Malpass just last night about our important collaboration in that area.
Thirdly, we continue to prioritise girls’ education, because it is the right thing to do and because the fortunes of so many of the poorest countries depend on tapping the full potential of all their people, which must include women and girls in education. Our global target, working with our partners, is to get 40 million girls into education and have 20 million more girls reading by the age of 10. It is a major priority for global Britain as a leading supporter of the Global Partnership for Education, and just next year we will raise $4 billion globally, including through our UK-Kenya summit.
Fourthly, we will focus ODA on resolving conflicts, alleviating humanitarian crises, defending open societies, and promoting trade and investment, including by increasing UK partnerships in science research and technology, because these are the building blocks of development and they require a long-term strategic commitment.
Finally, at all times we will look to improve our delivery of aid in order to increase the impact that our policy interventions have on the ground, in the countries and the communities that they are designed to benefit and help. We will strengthen accountability and value for money, reducing reliance on expensive consultants for project management and strengthening our in-house capability to give us more direct oversight and control, including by removing the total operating cost limits that were introduced when the Department for International Development was established—a limit that applied only to DFID.
As a result of this spending review, the FCDO will take on a greater role in ensuring the coherence and co-ordination of development-related spending right across Whitehall. To maximise the strategic focus that I have talked about, I will run a short cross-Government process to review, appraise and finalise all the UK’s ODA allocations for next year in the lead-up to Christmas.
This is a moment of unprecedented challenge. On all sides of the House, we are defined by our willingness to make the difficult choices, not just the easy ones. With the approach that I have set out, we will maintain our international ambition. We will deliver greater impact from our aid budget at a time of unparalleled financial pressure.
Like many in the House, I am proud of our aid spend. I am proud of the big-hearted generosity of the British public, which we amplify with our diplomatic energy on the world stage. I am proud of the huge amount we do to support the poorest and the most vulnerable, right around the world. The United Kingdom is out there every single day—our people on the ground in the disaster zones, in the refugee camps, tackling famine and drought, helping lift people out of poverty, striving to resolve conflicts and striving to build a more hopeful future for the millions of people struggling and striving against the odds. Even in the toughest economic times, we will continue that mission. We will continue to lead. I commend this statement to the House.