Chancellor Rishi Sunak is being accused of attempting to mount a “stealth raid” on Britain’s foreign aid spending.
Development charities say the Treasury is hoping to use “accounting tricks” in this month's Spending Review to squeeze the aid budget by billions of pounds. They fear new items will be designated as “overseas development assistance” in a way that would cut the amount spent directly on humanitarian aid.
The government is already cutting aid spending by reducing the target of what must be allocated to overseas assistance from 0.7 per cent of national income to 0.5 per cent. There are strict international rules about what counts as aid and charities fear the Treasury is looking at options that would effectively break the spirit of these rules.
They say the Treasury wants some foreign currency handouts from the International Monetary Fund, known as special drawing rights, to count as aid. Even though the money comes from the IMF and not UK coffers, officials want 30 per cent to count towards the 0.5 per cent target.
Cafod told The Tablet: “Special Drawing Rights were issued in a time of crisis to help the world respond to the devastating impacts of the pandemic, especially low and middle-income countries. It is a unique moment for the UK and other countries to stump up the finance to fulfil their commitments to vaccinate the whole world and provide climate finance for countries and communities that are worst affected. It would be morally bankrupt for the UK to divert its share of this money to replace overseas development assistance.”
Jennifer Larbie, Christian Aid’s UK advocacy and policy lead, said: “Reports about the Chancellor proposing what amounts to a third cut to the overseas aid budget are deeply disturbing. No-one can defend balancing the budgets of the world’s poorest, particularly during a global pandemic. Ahead of the spending review, we call on the government to think again, protect the aid budget, cancel debt, and deliver the money and resources needed for developing countries to respond to the climate crisis.”
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