International Aid: Treasury Update Debate

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Department: Cabinet Office

International Aid: Treasury Update

David Davis Excerpts
Tuesday 13th July 2021

(4 months, 2 weeks ago)

Commons Chamber

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Cabinet Office
Sarah Champion Portrait Sarah Champion (Rotherham) (Lab) [V]
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It does not show respect for the House to ask us to take such a significant decision with little notice, little explanation and no clarity about the consequences of today’s vote. It does not show respect for communities in the poorest parts of the world when this Government are willing to play games with their lives and livelihoods in this way. The Government present the motion as giving Parliament an opportunity to have a say on when and how the UK will return to spending 0.7% of GNI on aid. But today is not really about the 0.7% target, the cuts or the livelihoods that are already being affected by our reduced spending. It is about exerting pressure on Government Back Benchers who have been brave enough to call out what the Government are doing. Basically the Government are saying, “Back this or you will be blamed when taxes rise or spending falls”—things that will likely happen because of the pandemic anyway.

Today is yet another example of this Government’s complete lack of regard for parliamentary scrutiny, and they have form. There is a pattern of this Government withholding information until the last minute and then only making the most basic details available. Let us be clear: the Government have not brought forward a substantive motion for this debate. The motion that they have tabled is made in neutral terms—a device that was intended to allow the House to debate an issue without coming to a view. They claim that this debate is binding. It is not our procedures that make it binding; it is their political choice. This is a knee-jerk reaction dreamt up between last Thursday and yesterday in the face of growing criticism of this Government.

Yesterday’s written ministerial statement talks of returning to 0.7 % only when we are not borrowing for day-to-day spending and underlying debt is falling. On their own, each of those tests is a high hurdle. When combined, these conditions become incredibly strict. Since the 0.7% target was introduced in 2013, these tests have been met only once. They explicitly link ODA spending to policy decisions made by other Government Departments on tax and spending. This double lock could lead to an indefinite cut in aid spending, and, of course, the tests do nothing to prevent the Government from dropping lower than the 0.5%.

The Office for Budget Responsibility has said that the UK’s economy is forecast to return to pre-pandemic levels in the second quarter of 2020—faster than originally thought. If a return to economic normality is getting closer, why the need to introduce these extra tests before returning to 0.7%? They are just added roadblocks artfully placed by the Treasury on the track back to the legally mandated level of 0.7%. Fundamentally, the statement paints aid spending as an either/or choice; we are spending either on domestic public services or on international aid. It is an artificial choice that MPs are being forced to make. This is a breathtakingly cynical manoeuvre and the House must not fall for it.

David Davis Portrait Mr David Davis (Haltemprice and Howden) (Con)
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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.

Andrew Mitchell Portrait Mr Mitchell
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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?

David Davis Portrait Mr Davis
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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.

Lindsay Hoyle Portrait Mr Speaker
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Order. I call Hilary Benn.