Official Development Assistance and the British Council

Liam Byrne Excerpts

Wednesday 30th June 2021 Commons Chamber

[Liam Byrne (Birmingham, Hodge Hill) (Lab) [V]]

Like many others, I want to speak because I deplore these cuts in aid, which have been discussed this afternoon with so much analysis and eloquence. These cuts will have consequences; these cuts will cost lives. I like the Chair of the Foreign Affairs Committee, the hon. Member for Tonbridge and Malling (Tom Tugendhat), a lot, but I thought he was being almost ridiculously polite about the strategic incoherence that we now confront, because these cuts in aid deface, they demean, they damage the global Britain strategy that was set out just a few weeks ago in the House of Commons. We cannot have a Prime Minister who asks for a rules-based order and then orders the Treasury to break the rules and cut what we actually helped construct—the 0.7% aid target.

As chair of the international Parliamentary Network on the World Bank & International Monetary Fund, I just wanted to throw three points into this debate. First things first: we must reverse these cut because they are damaging the global effort to vaccinate the world. The Prime Minister sallied into the G7 talks in Cornwall with grand talk about getting the world vaccinated by the end of next year, but when the dust had settled on the G7 communiqué, the IMF revealed that we are two-thirds short of the grant finance that we need to vaccinate the world—that is $23 billion. When I asked the Prime Minister a week or two ago where that money was going to come from, he just brushed it off. That is not good enough; we need answers, and reversing the cuts in aid could help us to provide those answers.

The second point is that we need these aid cuts reversed because we need the Foreign Secretary to reacquire some credibility in order to rally the global resources that we need to tackle the pandemic and its aftermath. The World Bank thinks that we need about $200 billion extra to tackle covid-19 around the world, and $250 billion extra to reinvest in climate-friendly infrastructure in poorer countries. This week, we took a big step towards finding those resources. The executive board of the IMF basically signed off on a plan to issue $650 billion of special drawing rights. That would channel about $27 billion in extra resource to the poorest countries. But the real prize is the $623 billion of SDRs that go to richer countries. We need to recycle them; we need to revise the old voluntary agreements that entail half of that money being held back; and we need to maximise the amount of money that goes into grant rather than soft loans. We need Britain to be a force helping to lead those debates.

Furthermore, we have a big decision to make, as a world community, on replenishment of the International Development Association. IDA20 replenishment has been brought forward. The framework that was published last week has significant changes that involve prioritising investment in human capital—absolutely critical when we hear what is happening to education and girls’ education around the world. We need the Foreign Secretary to have credibility in those talks, and reversing this cut would help give him that credibility to rally resources around the world to do what the world needs to do to reverse the first rise in extreme poverty that we have seen this century.

The final point is that we judge a nation’s values by the numbers in its budget. Right now, we are putting up defence spending by something like £24 billion; we are cutting development spending by £4 billion. We are cutting the budget to prevent conflict and increasing the budget to prosecute conflict. We are even cutting aid in places where we drop bombs, like Iraq and Libya. That is just morally wrong.

I know that these things are a balance, but right now we have got the balance wrong. We need the Foreign Secretary to do a better job of fixing that imbalance now, in the comprehensive spending review. If he cannot do that, he needs to hand the task to the House of Commons. Let us have a vote and we will fix it for him.