International Aid: Treasury Update

Rishi Sunak Excerpts

Programme motion
Tuesday 13th July 2021 Commons Chamber

[The Chancellor of the Exchequer (Rishi Sunak)]

I am grateful to Members in all parts of the House for their passionate and principled contributions to today’s debate. Given the short time available, I shall highlight some of the powerful speeches that we have heard in support of the Government’s motion, including by my hon. Friends the Members for Somerton and Frome (David Warburton), for Hitchin and Harpenden (Bim Afolami), for Rutland and Melton (Alicia Kearns), for Derbyshire Dales (Miss Dines), for Rushcliffe (Ruth Edwards) and for Wellingborough (Mr Bone). Of course, I am disappointed that not all my colleagues feel able to support the Government today, including my right hon. Friend the Member for Maidenhead (Mrs May). No one can doubt the sincere commitment to this cause of my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell). I am grateful to my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) for his kind words about my career before I came to the House.

There were particularly thoughtful speeches from my right hon. Friend the Member for Tunbridge Wells (Greg Clark) and my right hon. and learned Friend the Member for Kenilworth and Southam (Jeremy Wright), both of whom highlighted the explicit provisions in the 2015 Act that envisaged these circumstances arising. I can give my right hon. Friend the Member for Tunbridge Wells my commitment to the £22 billion, in which I believe very strongly, as does the Prime Minister. We are determined to create a science superpower in this country.

As ever, my right hon. Friend the Member for Forest of Dean (Mr Harper) made a powerful speech about our promises—all our promises, not just some. While the Opposition might not be concerned with promises about managing the public finances and looking after people’s money responsibly, Government Members always will be.

May I pay tribute to the Members who have worked with the Government? I am grateful for their constructive co-operation over the past few weeks in finding what I believe is a genuine compromise to bring the House together so that we can support a policy that commands, I think, the broad acceptance not just of this place but of the British people. Those right hon. and hon. Members include my hon. Friends the Members for Stafford (Theo Clarke), for Bromley and Chislehurst (Sir Robert Neill) and for Milton Keynes North (Ben Everitt), my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) and my hon. Friend the Member for Bexhill and Battle (Huw Merriman). I am very grateful to them for all their engagement.

What we are asking the House to vote for today is a road map for returning to 0.7%. That road map reaffirms our values while recognising the reality that covid has caused severe damage to our public finances. It puts beyond doubt the fact that the reduction in the aid budget is temporary; it defines a reasonable set of tests for when we will return to 0.7%; and it makes those tests objective and verifiable, based on data, not dates, measured not by the Government ourselves, but by the independent Office for Budget Responsibility.

[Peter Kyle (Hove) (Lab)]

Does the Chancellor accept that in areas of instability and potential social decline, if we withdraw aid and support people are more likely to end up needing the support of our military? We know that for a fact, because we have had to give that support a lot in the past. Does he not accept the principle that in areas that are extremely volatile it is much, much cheaper to the British purse to provide support via aid workers than to send the military in with hardware and put our soldiers on the frontline, often in danger?

[Rishi Sunak]

It is not an either/or. This Government are doing both. We are one of the largest donors to the UN peacekeeping operations and that is why we are making a difference in countries across the globe, not just through our ODA budget but through all the other ways we express global leadership.

[Sir John Hayes (South Holland and The Deepings) (Con)]

The Chancellor is right to say that the countries with big hearts also need clear heads, so will he confirm that, with the roadmap he has set out today and the proposals before the House, we will still be spending 20% more on overseas aid than we were when Labour was last in government?

[Rishi Sunak]

If my numbers are right, as a percentage of GDP we were for the last few years spending double what Labour ever spent when it was in office, and my right hon. Friend is right about what we will be doing even at this reduced level.

Today’s approach is a pragmatic approach to meeting our commitments to the world’s poorest today and to have the secure fiscal foundations we need to meet those commitments for decades to come. We should be proud of what UK overseas aid means to millions of the world’s poorest people. It means tens of millions of girls around the world getting a better education. It means food parcels stamped with a Union Jack arriving in famine stricken countries such as Syria and Somalia. It means wind turbines, solar panels and hydroelectric dams generating clean energy in developing countries. I am proud, as I know the whole House will be proud, of the extraordinary good this country is doing around the world.

[John Redwood]

I am looking forward to this answer. Will the Chancellor remind the House, given that we are rightly keen to save as many lives as possible, that this country has given a great gift to the world with many free vaccines and pioneered the cheapest and one of the best vaccines to save lives all around the world?

[Rishi Sunak]

I completely agree with my right hon. Friend, and I will come on to that in a minute.

I am proud, too, of our response to last year’s economic crisis—the deepest recession this country has ever seen. In total, we have provided hundreds of billions of pounds to protect jobs, keep businesses afloat and help families to get by. That was the right approach, but we should be clear-eyed: covid has severely damaged our public finances. We have the highest level of borrowing since world war two, national debt of £2 trillion and rising, and debt expected to peak at 100% of GDP. If we want to continue to meet our commitments in the future, both at home and overseas, we must act now to rebuild our fiscal resilience.

[Christian Matheson]

This is all well and good, but the Government had already taken the decision to scrap the Department for International Development before covid came along. That is how committed they were to international aid.

[Rishi Sunak]

On the contrary; this Government have brought a coherence and a strategic symmetry to our approach to international development and foreign policy, which is improving how we project our influence and effectiveness around the world.

I have heard that this is the only difficult thing that we are doing, but that is simply not true. We have had to build fiscal resilience and have asked businesses to pay more tax. We have frozen the personal income tax allowance, taken a targeted approach to public sector pay and, yes, we also had to take the difficult decision to temporarily reduce our aid budget. This decision follows a path that Parliament explicitly envisaged when it enshrined the 0.7% target in law. Section 2(3) of the International Development (Official Development Assistance Target) Act 2015 clearly foresaw the fiscal circumstances that might mean the target could not be met. And let us be honest: if that test is not being met in the aftermath of the worst economic shock in 300 years, surely it never will.

This decision is categorically not a rejection of our global responsibilities. The UK will spend over £10 billion this year on overseas development. According to the latest figures, that is more as a proportion of national income than all but two of the G7 countries—more than Japan, Canada, Italy and the United States, and much more than the average of the 29 countries in the OECD’s Development Assistance Committee.

Our spending on humanitarian causes goes far beyond just our ODA budget. We have the fourth biggest defence and security budget in the world and the third largest diplomatic network. On average, we contribute nearly £500 million a year to the United Nations peacekeeping budget. We use our trade policy to reduce poverty, with developing countries benefiting from tariff savings of up to £1 billion a year. It is why we are working with the G7 to deliver the clean and green infrastructure financing initiative. With UK Government support, this year 1.5 billion people around the world will be vaccinated with the Oxford-AstraZeneca jab, provided at no profit whatsoever.

There is no question about our commitment to overseas aid. The only question is when we return to the 0.7% target. The motion puts beyond all doubt that we will do so once two clear objective tests have been met: our national debt is falling and we are no longer borrowing for day-to-day spending. Those tests are in line with the approach set out in our manifesto and at the Budget. They are practical and realistic.

If the House votes against the motion today, it is an effective vote. We will return, irrespective of the circumstances, to 0.7% next year. Instead of voting for responsibility, the House would in effect be voting to say that no circumstances could ever justify a move.

I know that a deep sense of conscience underpins the view that the amount we spend on overseas aid is a moral issue. Many hon. Members will know the words:

“Charity is patient, is kind.”

I think of those words and I share that sense of conscience. That is why we are maintaining the target, not abolishing it; why we are setting out the conditions, not obscuring them, and why we are basing the conditions independently—

--- Later in debate ---

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.

[The Chancellor of the Exchequer (Rishi Sunak)]

On a point of order, Mr Speaker. I recognise the passion and conviction with which Members who voted both for and against the Government’s motion spoke in favour of the 0.7% target. To me, that is the salient point. While not every Member felt able to vote for the Government’s compromise, the substantive matter of whether we remain committed to the 0.7% target not just now but for decades to come is clearly one of significant unity in this House. Today’s vote has made that commitment more secure for the long term while helping the Government to fix the problems with our public finances and continue to deliver for our constituents.

I commit to the House that I, the Prime Minister and the Foreign Secretary will continue to work with all hon. Members on how we can continue to be a global leader in helping the world’s poorest and on how we can improve our aid spending, targeting it most effectively and ensuring that it gets to those who need it most. Having now provided the House with an effective vote on this matter, the Government will move forward with the planned approach.

[Mr Speaker]

I now suspend the House for two minutes to enable the necessary arrangements to be made for the next business.