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COVID-19

Britain cuts foreign aid to help pay the cost of COVID-19

Stephen Beard Jan 11, 2021
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Chancellor of the Exchequer Rishi Sunak sits beside Prime Minister Boris Johnson during a meeting in July. Sunak supported reducing the U.K.'s foreign aid budget by the equivalent of $600 billion. Simon Dawson/Getty Images
COVID-19

Britain cuts foreign aid to help pay the cost of COVID-19

Stephen Beard Jan 11, 2021
Heard on:
Chancellor of the Exchequer Rishi Sunak sits beside Prime Minister Boris Johnson during a meeting in July. Sunak supported reducing the U.K.'s foreign aid budget by the equivalent of $600 billion. Simon Dawson/Getty Images
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One of the pandemic’s few political heroes in the U.K. has been the dashing young finance chief, Rishi Sunak. His popularity soared as he doled out billions to combat the coronavirus disease, compensate beleaguered companies and pay furloughed workers. 

But then came his sobering assessment of the economic havoc caused by COVID-19 and the damage inflicted on the government’s finances.

“We have suffered the largest fall in output in over 300 years,” Sunak told the House of Commons. “We expect the economy to have contracted by 11% by the end of this year. The government has been forced to borrow at the highest ever level in peacetime.”

Britain’s national debt, he added, was rapidly approaching 100% of GDP, and the country had no choice but to look for cuts in public spending. An obvious candidate for economizing, he said, was foreign aid.

“Sticking rigidly to spending 0.7% of our national income on overseas aid is difficult to justify to the British people,” Sunak said.  

That’s when his halo slipped. Reducing aid from 0.7% of national income down to 0.5% — a cut of around $6 billion — provoked outrage. The Labour Party opposition spokesperson on aid, Anna McMorrin, was incandescent.

Labour’s Anna McMorrin was outraged over the proposed cut to foreign aid. (Courtesy McMorrin)

“This is a really shameful day,” she fumed. “A shameful day for Britain and the world, a shameful day for the Conservative government. Even the archbishop of Canterbury has said how shameful this is.”     

Archbishop Justin Welby, the clerical head of the Church of England, had said that the decision by an earlier Conservative government to adopt the United Nations’ target of spending 0.7% of national income on aid had been one of the U.K.’s great moral achievements in the last 20 years. Undoing that decision, reducing that percentage, was a betrayal, he said.       

Romilly Greenhill is the U.K. director of One Campaign. (Courtesy One Campaign)

A former Conservative foreign aid minister, Andrew Mitchell, went much further in denouncing Sunak’s move. Speaking in the House of Commons, Mitchell asserted that the cut would cause 100,00 deaths in the developing world. Romilly Greenhill of the advocacy group One Campaign predicted even wider, more adverse repercussions.

“Cutting aid will make it harder to get vaccines to people all over the world, harder to get the treatments that people need, and ultimately it will extend the lifetime of the pandemic,” Greenhill said.

But not everyone in the U.K. was swept along by this tide of condemnation.  

“I would say cutting foreign aid at the moment is completely justified,” said Jeremy Hutton of the TaxPayers’ Alliance, which campaigns for lower taxes.

Jeremy Hutton of the TaxPayers’ Alliance. (Courtesy TaxPayers’ Alliance)

“To keep shoveling money out of the door, at the same time as borrowing huge amounts just to keep the country running, is quite indefensible,” he said.

Especially, he said, when you consider how some of that aid money has been spent in recent years.

He cites the $130 million in aid paid to India, a country that is rich enough to have its own space program and its own aid program, too.

Even more egregious, Hutton said, is the $100 million in British aid to China to pay for, among other things, a rice-growing project.  

“I don’t think many people regard China as a particularly needy country. Or that the Chinese need British help in growing rice,” he said.  

Over the years, a number of examples have emerged of British taxpayers funding controversial or even apparently frivolous projects, from a TV soap opera in Kenya to an Ethiopian girl band. Hutton said there are so many of these unnecessary and wasteful cases that the British government could make its cuts without causing any harm.

Not so, said Sam Nadel of the aid charity Oxfam.

“No, I would refute that aid is being wasted to any significant level,” Nadel said. “The vast majority of aid is certainly well-spent. It supports girls in education. It vaccinates children. And it was also central to the effort to combat Ebola in West Africa.”

Sam Nadel of the aid charity Oxfam. (Courtesy Oxfam)

Nadel said the cut will not only  hurt some of the poorest people on the planet. As the U.K. prepares to host G-7  and climate change summits next year, he said, the nation will be diminished in the eyes of the world.

“If it’s seen to be breaking its promises now, it will make it less likely that it will be able to build trust needed to secure some of the vital agreements on, for example, climate change,” Nadel said.

But aid skeptics say that Britain has nothing to be ashamed of and nothing to fear from being compared with other countries. Even after the cut, it will still be spending more on aid than its closest European economic  counterpart — France — and, on a proportional basis, three times what the U.S. is spending.  

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

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