International Development Strategy

Lord Londesborough Excerpts

Thursday 16th December 2021 Lords Chamber

[Lord Londesborough (CB)]

My Lords, I thank the noble Lord, Lord McConnell, for bringing this important and very timely debate to the House. I will focus on two key issues: first, the longer-term impact of the Government’s decision to slash overseas aid by 30%, and secondly, the insufficient allocation of aid to Covid and global health. These two issues are of course connected.

With respect to reducing our contributions from 0.7% to 0.5% of GNI, many of us on all sides of the House have stated how unjust and poorly timed this measure is. It cuts our aid by almost £4 billion per annum, not just this year but for another two to three years by the Chancellor’s own estimates, and I fear probably beyond that. Why beyond? Because we may fail to meet the Chancellor’s two fiscal tests to restore the 0.7% contribution: that the UK is running a current budget surplus and that the ratio of underlying debt to GDP is falling. The Chancellor hopes to meet these tests by fiscal year 2024-25. But it was already a close call on both counts when they were announced six months ago. The OBR has since admitted to “modest headroom” on the debt target, which could be wiped out by the 1% lower growth or rising interest rates.

Since then, we have seen a slowing of GDP growth, we learned yesterday of a jump in inflation to 5.1%, and there is the rising menace of the omicron variant, all of which put government finances under further strain. Our overseas aid could be depressed for as many years as the Chancellor doggedly clings to these fiscal tests. I therefore ask the Minister: in light of the changing economic landscape, do the Government have any plans to reconsider these fiscal tests? Such uncertainty over our aid budget clearly undermines our international strategy and the aim for the UK to be one of the world’s leading development players—let alone our bid to become “global Britain”.

This brings me to my second point. If ever there was a need for the UK to step up and show some sorely needed leadership, it is in the area of global health. The noble Lord, Lord McConnell, referenced the moral case for addressing vaccine inequality, as well as the economic case mentioned by the noble Baroness, Lady Sugg. The FCDO’s spend allocation for Covid-19 and global health for this year stands at just £1.3 billion. This includes our commitment to the WHO and COVAX, and the donation of 100 million vaccines—although we learned two days ago that only 16 million have been delivered so far. You can argue, as I do, that our contribution to fighting the global pandemic should not be coming out of the annual aid budget at all, especially in its newly diminished state. In the face of the world’s worst health crisis for 100 years, the sum of £1.3 billion sends out a feeble signal to the rest of the world, especially to our fellow members of the G7.

Omicron is a stark reminder that we need to vaccinate the world, and quickly. There are 5 billion adults to vaccinate—6 billion if that includes those aged over 15—and they may need three or even four doses each. Richer nations may therefore need to donate more than 10 billion doses a year, yet COVAX’s target this year is 2 billion doses and only 600 million of those have so far been delivered. Here we are in the UK, with 80% of us already double-vaccinated, now scrambling madly for our boosters to protect us against a variant that emerged from a continent where the single dose vaccination rate is less than 12%. Where will the next variant come from? It is very likely to be from another country with high population density, poverty, poor healthcare and low vaccination rates.

Turning to the economic argument, the cost of the pandemic’s damage to the world’s economy is approaching $10 trillion, while the cost of vaccinating the world is estimated at $50 billion to $100 billion. Such a cost would represent history’s greatest bargain, so why has there been such a gulf in world leadership? Where are the G7, OECD, IMF and others on this issue—or are we going to continue to leave it to COVAX and the WHO? The UK’s approach is symptomatic of the problem: we are aiming to contribute just 100 million doses from an emasculated aid budget. As the fifth largest economy in the world, the UK should be leading by example. A £5 billion contribution to help finance 1 billion vaccines would be nearer the mark; Japan, Germany, France and Canada are contributing at similar levels, and the US considerably more.

Beyond the economic damage, the secondary impacts of Covid such as collapsing healthcare, gender-based violence and deepening poverty are the very areas that need our aid and assistance. But our contributions cannot keep up with demands if we do not help to protect the world from the pandemic. My second question to the Minister is this: what plans do the Government have to radically review the UK’s global health contributions as we approach the third year of a global pandemic?