International Aid: Treasury Update

Andrew Mitchell Excerpts

Programme motion
Tuesday 13th July 2021 Commons Chamber

[The Prime Minister]

I thank my hon. Friend for his work on and expertise in this matter. I know how deeply he cares about this, in common with many other Members across the House, and I can indeed give him that confirmation. The decision that we made was temporary, to reduce our aid budget to 0.5% of national income.

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

Will the Prime Minister give way?

[The Prime Minister]

With great respect, if the House will allow me, I will make as much progress as I can in this speech, and then allow the, I think, 77 others who wish to contribute to have their say, so I will not take any more interventions.

In the teeth of this crisis, amid all the other calls on our resources, we can take pride in the fact that the UK will still invest at least £10 billion in aid this year—more, as a share of our GDP, than Canada, Japan, Italy and the United States. It would be a travesty if hon. Members were to give the impression that the UK is somehow retreating from the field of international development or lacking in global solidarity. As I speak, this country is playing a vital role in the biggest and fastest global vaccination programme in history. We helped to create COVAX, the coalition to vaccinate the developing world, and we have invested over half a billion pounds in this crucial effort, which has so far distributed more than 100 million doses to 135 countries.

The Government’s agreement with Oxford University and AstraZeneca succeeded in producing the world’s most popular vaccine, with over 500 million doses released to the world, mainly to low and middle-income countries, saving lives every hour of every day. The UK’s expertise and resources have been central to the global response to the emergency, discovering both the vaccine and the first life-saving treatment for covid. We have secured agreement from our friends in the G7 to provide a billion vaccines to protect the world by the end of next year, and 100 million will come from the UK. We are the third biggest sovereign donor to the World Health Organisation, and the top donor to Gavi, the Vaccine Alliance, which vaccinates children against killer diseases.

We are devoting £11.6 billion, double our previous commitment, to helping developing countries to deal with climate change, including by protecting their forests and introducing green energy. I can tell the House that this vital investment will be protected.

When it comes to addressing one of the world’s gravest injustices—the tragedy that millions of girls are denied the chance to go to school—the UK has pledged more than any other country, £430 million, to the Global Partnership for Education, in addition to the £400 million that we will spend on girls’ education this year.

Later this month, I will co-host a summit of the partnership in London with President Kenyatta of Kenya. Wherever civil wars are displacing millions or threatening to inflict famine in Syria, Yemen, Ethiopia or elsewhere, the UK is responding with over £900 million of help this year, making our country the third-largest bilateral humanitarian donor in the world. It bears repeating that we are doing this in the midst of a terrible crisis, when our public finances are under greater strain than ever before in peacetime history and every pound we spend in aid has to be borrowed. It represents not our money, but money we are taking from future generations.

Last year, we dissolved the old divide between aid and diplomacy that once ran through the entire Whitehall machine, by creating the new Foreign, Commonwealth and Development Office. In doing so, my objective was to ensure that every diplomat in our service was actuated by the mission and vision of our finest development officials, and that our aid was better in tune with our national values and our desire to be a force for good in the world. So I can assure any hon. Member who wishes to make the case for aid that they are, when it comes to me or to anyone in the Government, preaching to the converted. We shall act on that conviction by returning to 0.7% as soon as two vital tests have been satisfied. The first is that the UK is no longer borrowing to cover current or day-to-day expenditure. The second is that public debt, excluding the Bank of England, is falling as a share of GDP.

[Mr Mitchell]

Will the Prime Minister give way?

[The Prime Minister]

I am just coming to the end. The moment the Office for Budget Responsibility forecasts show that both of those conditions will sustainably be met, from the point at which they are met we will willingly restore our aid budget to 0.7%.

--- Later in debate ---

[Keir Starmer]

I have to say that it is a bit rich from someone who may break the manifesto commitment to say that the vote today and the words today are hollow, but just to take that straight on, it is a false economy, I am afraid. Cutting aid will increase costs and have a big impact on our economy. Development aid—we all know this—reduces conflict, disease and people fleeing from their homes. It is a false economy to pretend that this is some sort of cut that does not have consequences.

[Mr Mitchell]

The right hon. and learned Gentleman is making a House of Commons speech, not a partisan speech. Can I ask him what I would have asked the Prime Minister if the Prime Minister had given way? First, will he confirm that the cut we are discussing today is 1% of the borrowing the Prime Minister described that he quite rightly sanctioned last year? Secondly, will he underline the fact that this was an all-party promise made at the general election by every single one of us, and we really should not break our promises to the poorest in this terrible way?

[Keir Starmer]

Yes and yes. It was not ambivalent in the manifestos and it was not conditional; it was clear.

On the first part of the argument—the national interest—British aid saves lives, it builds a more secure world, and it promotes democracy and British soft power. For the last 20 years, that has been the political consensus across this House. Tony Blair and Gordon Brown first set the goal of the UK reaching the 0.7% target—[Interruption.] I am making a speech to the House and for the House. David Cameron and the right hon. Member for Maidenhead made it a reality, and we acknowledge that in the right way. It has been supported—[Interruption.] The chuntering is all very well, but this has been a cross-party position for 20 years, and successive Prime Ministers have kept to the commitment. Every other living Prime Minister thinks this is wrong; there is only one Prime Minister who is prepared to do this, and he is sitting there, on the Front Bench. I acknowledge what those on the Benches opposite did in relation to this—the previous Prime Minister is sitting opposite. I am openly acknowledging that, and it has been supported by all parties, and rightly so. As the sixth richest country in the world, Britain has a moral obligation to help the world’s poorest, and our aid budget has done that with fantastic results.

--- Later in debate ---

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

I draw the House’s attention to my interests, as set out in the Register of Members’ Financial Interests.

The Government have done the right thing today in ensuring that this House has a vote on this matter, and thank you, Mr Speaker, for standing up for Parliament in that respect. There is a straight choice here, as was outlined by the Leader of the House yesterday in his statement. It is between rejecting this motion, in which case the Government will restore the 0.7% from next year—that was the olive branch that my right hon. and hon. Friends and I suggested—and accepting this so-called “Treasury compromise”. I tell the House that it is no compromise at all; it is a fiscal trap for the unwary.

First, it is quite possible that these conditions will never be met. We do not need to look in the crystal ball—we can read the book. It is indisputably the case that there has been only one occasion in the past two decades—in 2001—when these conditions would have been met. If we look at what the OBR has said, we see that it is incredibly clear that the debt to GDP measure will not fall until 2024-25 and day-to-day debt will not fall until 2025-26. Given that the 0.7% goes up and down with our economic performance, a very important point is that the 0.7% policy protects us in that respect.

[John Redwood (Wokingham) (Con)]

Does my right hon. Friend not accept that the OBR has exaggerated the gloom on the debt and deficit, particularly in the last two years? It exaggerated it by £50 billion for last year between November and March, so why on earth does he believe the OBR’s gloomy figures now? I am sure we are going to get the deficit down.

--- Later in debate ---

[Mr Mitchell]

My right hon. Friend is looking in the crystal ball, but I have read in the book: in the past 20 years, this would have happened on just one occasion. So a vote for the Government tonight is a vote to end our 0.7 commitment.

[Anthony Mangnall]

I am sorry to interrupt my right hon. Friend, but does it say something when every economic and political commentator has said that this new mechanism will not see the 0.7% return in the way that it should and that this is a cop-out of the highest order?

[Mr Mitchell]

My hon. Friend is absolutely right. As I said, this is a trap for the unwary and a tribute to the Chancellor of the Exchequer’s silver tongue. So I shall certainly be voting against this motion and against the Government today. I shall do so with absolute conviction and profound disappointment. This is only the third time since I was elected in 1987 that I have voted against the Government, and on one of those occasions I was in the company of the Prime Minister in the Lobby. It is never easy to rebel and I thank those who have stood with us to support our manifesto. We should not be breaking our promise in this way. We should certainly not be seeking to balance the books on the backs of the poorest people in the world. I am incredibly proud to have been a member of a Conservative Administration who declined to do that even with the austerity that we faced.

For goodness sake, this is 1% of the borrowing that the Chancellor rightly made last year to shore up our country from covid. It is a tiny figure and it is the only cut that he has announced. That will have an enormous impact on our role in the world and, above all, on the huge number of people who will be severely damaged, maimed, blinded, as often happens, or indeed who will die as a result of the cuts. I remind the House that the cuts include a 25% cut to girls’ education, which is a top priority of our Prime Minister and this Administration. For neglected tropical diseases—thank goodness, the philanthropists have stepped in for one year only to protect the British taxpayers’ investment—we have cut aid by 90%. In Yemen, as my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) said, we have cut it by 60%, which is literally the equivalent of taking food away from starving people. This is what we are doing to the world’s poorest. This is how we are trashing our international reputation. We are the only country in the G7 that is cutting in the middle of a pandemic. Everyone else is increasing. This is a decision that we do not need to make. Since we started this campaign, there has been a 9% increase in support across our country for the Government’s policies. It is, to coin a phrase, worse than a crime; it is a mistake.

May I say, finally, in humble respect to my own party, that some of us have seen this movie before? It took us 23 years—until 2015—to achieve an overall majority by wiping out the Liberal Democrat seats, and to achieve it we secured the support of decent, internationalist, pro-development spending people, who saw from our time of austerity that we would stand by this promise. The former Brexit Secretary—my right hon. Friend the Member for Haltemprice and Howden (Mr Davis)—and I visited Chesham and Amersham. May I say that our much-loved former colleague, Cheryl Gillan, would have been voting with us on this issue tonight? Anyone who thinks that this issue is not affecting our party’s reputation is living in cloud cuckoo land. Chesham and Amersham has the biggest Christian Aid group in the country.

There is an unpleasant odour wafting out from under my party’s front door. This is not who we are. This is not what global Britain is. I urge my right hon. and hon. Friends to vote against this motion.

--- Later in debate ---

[Mr David Davis (Haltemprice and Howden) (Con)]

I consider myself an economic Thatcherite, yet when I come to choose between money and lives, I always choose lives. This House should remember—this should be at the forefront of every Member’s mind today—that this is a vote where we are choosing whether or not to intervene to save lives. That is the key issue, not the monetary issue, which I will return to in a second.

The Government argue that this is a policy the United Kingdom cannot afford, but while we have heard about this being a small fraction of our borrowing, we should remember that it is an even smaller fraction of our spending. We spend, in a non-covid year, at least £800 billion; the £3.5 billion saving we are talking about is less than 0.5% of that. That is what the Treasury tells us is the critical, overwhelming measure that forces us to do something that has such dramatic consequences.

The Chancellor might say, as his press spokesman did in the course of last week, “Well, you find the money from somewhere else”—saying that to a past Public Accounts Committee Chairman is very dangerous for a Chancellor. We were in Chesham and Amersham a week or two ago, as my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) said, and Cheryl Gillan would have said to the Chancellor, “Well why don’t you just cancel HS2?” That is between £100 billion and £200 billion; it would pay for 25 to 50 years of this shortfall. It is really that simple.

So I do not really accept what the Chancellor is saying—that the only place, indeed the best place, for savings to be found is cutting aid, which will cost lives. Such a choice is morally reprehensible. Let us be clear about that—morally reprehensible.

[Mr Mitchell]

My right hon. Friend is making an incredibly good point, but has he also noticed that, in the Chancellor’s outstanding policy on spending announced last November, the cut that he is referring to—this cut of 1% of the borrowing on covid last year—is the only cut that has been announced?

[Mr Davis]

My right hon. Friend is right. The prioritising of this cut makes it even more morally reprehensible. Indeed, at the same time, as I think the spokesman for the SNP, the hon. Member for Dundee West (Chris Law), said, we are increasing spending on defence. I happen to agree with increasing spending on defence, but I do not agree with cutting spending on things that will lead to the need for more defence because of migration, civil wars and the rest of it.

As my right hon. Friend the Member for Sutton Coldfield, the hon. Member for Rotherham (Sarah Champion) and the Leader of the Opposition have pointed out, the Government’s proposed double lock on returning to 0.7% is deceptive. It is designed to look reasonable. However, in fact, none of the people who have spoken so far has actually stated the full case. Although we say that the condition has been met only once since 1990, under a Conservative Government, and has never been met, really—well, it was once, just about—since the 0.7% policy was put in place, it has actually never been met since 1970, because the wording is not “a current budget surplus” but

“a sustainable current budget surplus”.

All the current budget surpluses we have been talking about so far have been for one year—and frankly, the one under us in 2018 lasted about 10 nanoseconds; it was a very tiny surplus. In practice, we have not had a sustainable current surplus since the 1970s, so I am afraid that, under the actual wording in the statement, we are not looking at 0.7% for a very long time indeed. We heard the Leader of the Opposition say it would be years, possibly decades, possibly never, and I think he is right about that.

Even if the conditions were to be met, the proposal will do nothing to deal with the crises that are caused by the policy already, right now. The Government argue that the cuts are temporary, but death is never temporary—and this will cause deaths.

--- Later in debate ---

[Greg Clark (Tunbridge Wells) (Con)]

I am glad to see the Chancellor in his place; I have a couple of specific questions for him on science policy.

First, in the context of this debate, I am very proud of our leadership and our contribution to supporting people right across the world. I voted enthusiastically for the Act of Parliament that brought the 0.7% commitment into law. I pay tribute to my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) for his work on that Act, but, in so doing, he will know that it specifically anticipated circumstances in which, temporarily, the 0.7% target may not be met, including

“any substantial change in gross national income”

and/or

“fiscal circumstances…in particular, the likely impact of…the target on taxation, public spending and public borrowing”.

It is hard not to consider that the circumstances that we are experiencing fall plumb into line with what the framers of the legislation and those who supported it had in mind.

[Mr Mitchell]

I was involved in the drafting of the Act and I do not believe that that is what we intended with those clauses. Has my right hon. Friend noticed that the Governor of the Bank of England has said that the economy will have been restored to pre-covid levels by next month? Does he not think that that is a very significant indicator of why we should not be doing what the Government would like us to do today?

[Greg Clark]

I am grateful to my right hon. Friend. I quite agree that that is an encouraging assessment, not least for the prospects of our returning to the 0.7%.

I studied very carefully the Hansard transcripts of the debate, and some of the criticism was that the criteria might be insufficiently precise, so the innovation of establishing in advance and giving to the Office for Budget Responsibility the trigger for the return is a sensible course. Indeed, this mirrors, more or less, the fiscal rules that were once called the fiscal mandate that were in place at the time that the Act was originally adopted. I want the target back, and I hope, as the Governor does, that that will be sooner rather than later, and that the Chancellor will be able to confirm that it is his firm intention, as I think is clear from what he said in the written statement.

My questions on science are twofold. First, the science budget is, very importantly, increasing from about £9 billion a year in 2017 to £22 billion a year from 2024-25. That includes, as it always has done, official development assistance. Will the Chancellor specifically reiterate the commitment to achieving that £22 billion by 2024-25? Secondly, will he reassure me on a report I read that the 0.5% limit on ODA could somehow prevent us from engaging in international scientific research projects that we were perfectly willing to fund because they are excellent and are justified as part of the budget that is rising to £22 billion? We all know that science is inherently international. The best science is global and the best teams are often international teams, so it would be a great concern if the 0.5% target would in any way be a cap on international collaboration. Knowing my right hon. Friend the Chancellor’s commitment to science and technology, I cannot believe that that is his intention. His commitment to the £22 billion budget and his reassurance that the target will not be a cap will be very important in establishing that the science aspect can continue, and that this is, in effect, the removal of a ring-fence rather than a limitation on international scientific research.

--- Later in debate ---

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I am grateful to be called to speak in this debate. I recognise that the Chancellor of the Exchequer has probably the most difficult job in the Government, bar none, and perhaps in the whole country. He is the only person employed to say no and make difficult choices about the spending demands that we all present at the door of the Treasury. Nevertheless, I share the concerns, fears and doubts expressed by colleagues this afternoon about whether the cuts that we are debating will become permanent. I share their fear that 0.5% will become the default setting for our overseas aid spending and that the cuts will become locked in—a permanent withdrawal and a permanent stepping back from the level of commitment that Britain has given overseas among the poorest countries on earth. I share those fears not only for reasons that hon. Members have already outlined, but because I think we are in danger of overlooking just how enormous the effort was that got us to the point where the House of Commons was united on making the commitment to 0.7%, as the right hon. Member for East Ham (Stephen Timms) has just reminded us.

I am perhaps one of the few Members present who was in the House in 2005. I recall the enormous lobbying efforts made not just by churches, but by trade unions, women’s institutes and groups in all our constituencies. There was demand for that commitment. It required Opposition Front Benchers to work with Government Front Benchers; it required Opposition Back Benchers to work with Government Back Benchers. For me, it represented a high water mark of what can be achieved in this House of Commons when people choose to bury some of their political differences and work together for a cause much bigger than our most immediate political needs.

[Mr Mitchell]

My right hon. Friend is making a wonderful speech. He refers to his longevity in the House. Does he remember how Make Poverty History galvanised national opinion? Crack the Crises is the current successor to that generation, and it is reinforced by younger people. Does he accept that once covid is over and they are able to show what they feel, they will make very clear their opposition to this foolish decision that the Government have made?