0.7%. It doesn’t sound much does it? £13.3 billion sounds a rather bigger number in most contexts. Put them together and £13.3 billion is the amount that the UK spent on delivering overseas aid in 2016, representing 0.7% of the UK’s GDP. Oh. Ouch. Really? Afraid so. Just to add insult to injury, 0.7% of GDP is a statutory commitment enshrined in law, binding the UK to deliver such a sum in overseas aid every year. On the assumption that the economy grows annually, so too does the overseas aid budget, regardless of the country’s ability to pay or overseas demand.
The Prime Minister’s defence of the 0.7% is economically groundless. Whilst austerity continues to bite and constrain the public purse in its highest spending priorities such as the NHS and education, it seems clear enough that the UK cannot afford such a gesture of largesse. As a rich country, the UK of course has a moral obligation to assist the development of the poorest and alleviate suffering, but it more than pulls its economic weight here compared to other members of the G20. To put into context, according to the World Economic Forum and as a percentage of 2015 GDP, the UK is 7th on the list of top donors. Germany is 11th. Japan, France and the US are nowhere to be seen (the US was the largest donor in quantum terms at $30.7 billion, but equating to a measly 0.17% of GDP). It is unsurprising to see the Scandinavian countries (operating under the welfarist and highly globalised Nordic social democratic model) of Sweden, Norway and Denmark occupying 1st, 3rd and 5th spots respectively. Ruddy nice those Scandies.
Politically, the position is plain baffling. Brexit was a straightforward and explicit rejection of outward looking metropolitanism; a message delivered to the government to turn inward and look after its own. Preservation of a costly overseas aid budget disdainfully contradicts this protectionist message. It gives the impression of a government that, whilst strident and resolute in its mission to deliver a successful Brexit, is hearing but not listening on full volume yet.
£13.3 billion buys 38 hospitals at £350m a pop and 332 schools at £40m. And as this blog was at pains to point out in its “Anti-social, don’t care” post on 13 January, there will be a black hole in social care provision of £2.3 billion by 2019/20. These are all politically toxic issues that the government is struggling to deal with fiscally. For the vast majority of “hard working families” that the Tories claim to support, such issues are very real, very present and of very real concern; they transcend the liberal idealism of huge overseas handouts and are indifferent to the politics of Leave/Remain. Apart from a few star gazing leftie liberals, I can’t see too many Remainers kicking up a fuss over the remodelling of the overseas aid budget in its current, outdated guise.
To exacerbate matters, the Chancellor Philip Hammond announced that he may look to scrap a 2015 manifesto pledge not to put up taxes, citing the need for flexibility in managing the economy. So, let me get this straight. The Tories want to keep channelling billions of taxpayers’ hard earned wedge to faceless causes abroad (some of whom reside in North Korea and received £4m last year by the way), whilst retaining the option to put taxes up? Yup. Good luck selling that to the JAMs (“Just About Managing”) or anybody else who wants more bang for their tax buck. So, just about everybody then.
It makes for spectacularly dim politics.
That Mrs May feels she can get away with campaigning on a platform that is distinctly not grassroots Toryism is entirely down to the amoebic challenge posed by Corbyn and Labour. Jezza isn’t going to attack Tezza on the fronts of preserving foreign aid and the spectre of higher taxes, so he gets steamrollered. Again. But why does the PM feel she needs to do it? Some commentators reckon that it is to broaden the Tories’ appeal whilst the going is so good to cement a landslide election victory in June. I think the breadth of such added appeal is skinny and derived from the school of marginal gains.
In my last post, “May calls for June“, I suggested that Mrs May has a job on her hands to woo the 48% that voted Remain if she is to secure the majority landslide she so craves (and needs). 31% of that 48% voted Conservative in 2015; 39% voted Labour. Voters of either political allegiance are unlikely to take kindly to the preservation of the overseas aid budget, nor that they may be taxed more to pay for it. The 2015 Conservative voters will probably do the same again. But why does Mrs May want to score such an unnecessary own goal through such schoolgirl defending? A political clean sheet is what she needs to truly broaden her appeal.
0.7%. Such a tiny number. But for Mrs May, it could and should be a number of profound electoral importance.