International Aid: Treasury Update

Simon Clarke Excerpts

Programme motion
Tuesday 13th July 2021 Commons Chamber

[Keir Starmer]

They doubled it, actually.

Let me turn to my second point, which has already been debated: the economic argument behind the Government’s position. The Prime Minister and Chancellor say that these cuts are unavoidable because of the pandemic and the economic consequences we now find ourselves in, but the whole point of the 0.7% target is that it is relative to the UK’s economic success or challenges: it rises when we grow and falls when we experience economic shock like the pandemic. Nobody in this House is arguing for overseas aid to be maintained at the pre-pandemic level during the downturn in strict terms. We all recognise that a contracting economy means a relative contraction in our aid budget, but the Chancellor and Prime Minister are asking the House to agree to go beyond that, to impose a new target of 0.5% and to create entirely new criteria for ever returning to 0.7%. In effect, the Chancellor is proposing a double lock against reverting to 0.7%. The written ministerial statement makes it clear that Britain will go back to 0.7% only when public debt is falling as a percentage of GDP and there is a “current budget surplus”.

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

Will the right hon. and learned Member give way?

[Keir Starmer]

Let me make this point, and the Prime Minister can intervene if he wants. On the former point, the Office for Budget Responsibility does not predict public debt falling as a percentage of GDP until 2024 or 2025 at the earliest. If the Prime Minister wants to intervene, I am ready. That would mean returning to 0.7% will not happen in any year in this Parliament. I am clear about that. Does anyone want to intervene? That is the OBR’s prediction.

[Keir Starmer]

Well, that is a very good point. I think it is once in 20 years. However, there are two points here and, if there is a contrary argument, the Prime Minister can make it. On the first point, the OBR does not predict a fall in debt as a percentage of GDP until 2024 to 2025. Therefore, anybody voting tonight who is pretending to themselves that the cut is temporary and will be changed in a year or two is not looking at the facts. If anybody wants to say they have better statistics and the OBR has got it completely wrong, please do so—that includes the Prime Minister.

On the second point, the OBR does not forecast a current surplus for its entire forecast period. In fact, there is no expected timeline for that criterion to be met at all. What the Chancellor is setting out is not a temporary cut in overseas aid; it is an indefinite cut. Let me remind the House that only, I think, five times in the past 30 years has a current budget surplus been run—four of them, I might add, were under a Labour Government and one under the Conservatives—so the chances of those criteria being met under a Conservative Chancellor are remote at best. All the more so, because the statement creates an artificial £4.3 billion fiscal penalty for any Chancellor who seeks to rebalance the Budget. So this is an indefinite cut—it is not going to be reversed next year or the year after—and, however much the Prime Minister shakes his head, there is no contrary argument.

This is not just about economic necessity; a political choice is being made. Not only is it against our national interest but it further erodes trust in our politics. That brings me to my third point: trust. There is now a central divide in British politics and across the world between those who value truth, integrity and honesty and those who bask in breaking them. We were all elected on manifestos that committed to the 0.7% target. I am proud to have stood on that commitment and I know that many hon. Members across the House are as well.

[Mr Simon Clarke]

Will the right hon. and learned Member give way?

[Keir Starmer]

I will in just a moment. Let me quote page 53 of the Conservative manifesto, which says:

“We will proudly maintain our commitment to spend 0.7 per cent of GNI on development”.

Do not shake your head, Prime Minister—it is there in black and white. As Conservative Members have said, that is not equivocal or conditional. It was a clear promise to voters and it should be honoured. If it is not, where does that leave us? There are already countless examples of the Prime Minister breaking his promises, such as: no hard border in the Irish Sea; no cuts to our armed forces; and an already-prepared plan for social care—the list is endless. That matters. It matters to the British people that they can trust a Prime Minister to honour a clear commitment. It matters to our reputation around the globe that the word of the British Government will hold in good times and bad.

Today, the House has the chance to stand up for a better kind of politics for the national interest, to do what we know is right and to honour our commitments to the world’s poorest. When the Division is called, Labour MPs will do so, and I am sure that others on the Conservative Benches will do so. I urge all Members to do so.