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Watch out for any budgetary backtracking on aid commitments

19 March 2013

Supporters of international development should watch this week’s budget announcement very carefully. Overseas aid and the role of DFID are not usually at the forefront of a Chancellor’s mind when delivering a budget – personal taxation, welfare and big capital spending projects tend to get all the attention. But just because the budget is usually domestically focused doesn’t mean that Wednesday’s announcement won’t have a big impact on Britain’s progress towards tackling global economic injustice. As is so often the case, what is missing from the Chancellor’s announcement could tell us as much as what is included about where the Coalition’s priorities lie.

The first, and most obvious, signal of the government’s intention towards international development will be whether overseas aid (a sub-set of DFID’s budget) remains ring-fenced from spending cuts alongside areas like the NHS. To date Cameron and Osborne have held firm against backbenchers, donors and even (so it is said) their own DFID minister against slashing the relatively small proportion of UK GDP spent on aid. However, the Chancellor is clearly under pressure to appease a growing chorus of disapproval over the ring-fencing of specific budgets. Recently Cameron has ducked the opportunity to back a Labour proposal to enforce the commitment to spend 0.7% in law. Given that several of last year’s budget announcements were reversed soon after the omnishambles, nothing should be taken for granted. Even with the aid ring-fence in place it must not be forgotten that Labour’s previous commitment to bring to UK up to 0.7% – which we hope will be met in this budget – now represents a far smaller level of aid spending in absolute terms given the Coalition’s inability to restore economic growth after 3 years in office. Some of the world’s poorest people are now paying a price for the government’s economic policy.

There are other ways that UK’s international aid commitment could be watered down. The second area to watch out for is whether DIFD spending is stretched to cover peacekeeping activities normally covered by the MoD. Last month Cameron hinted that aid spending should be diverted into the ‘conflict pool’ – something the Labour Campaign for International Development has covered previously. Such diversion of aid spending obviously takes away funds from other projects and reduces the impact of DFID at a time when it has already come under heavy cuts that impact its effectiveness. Of equal concern is the fact that mixing up development and peace-keeping spending undermines Britain’s leading role on international development by militarising our overseas aid. Therefore whilst the ring-fencing commitment may be met in nominal terms there is the risk that there may be less to this than meets the eye.

Finally, it will be a missed opportunity if this budget does not at least hint at long-term vision for the UK’s geo-political and economic role. This is, after all, not only a year in which Britain will chair the G8 but also a year in which David Cameron will lead the effort to design the next generation of Millennium Development Goals (MDGs). Rather than just talking about Britain’s role on the world’s stage the Chancellor could set a real level of ambition about what the world economy could look like beyond 2015, when the current MDGs expire. A short-term re-hash of austerity economics from this budget, without a thought to Britain’s place in the world would represent a tragically missed opportunity.

It would be ungenerous to the Chancellor to assume the worst before he has delivered his budget statement. The government has at least kept up the commitment to 0.7% so far which is to be welcomed. However under a Labour government, the UK’s hard won reputation for leadership on international development involved not just a commitment from the DFID Secretary but also a firm basis in the UK’s economic policy, something that can only come from the Chancellor. With this in mind of us watching Wednesday’s budget who believe in development will be very careful to read between the lines.

Charlie Samuda is LCID’s Vice Chair, Communications and Campaigning

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