The government sets the conditions to return to the aid target of 0.7%

0

The government has pledged to return to the target of devoting 0.7% of gross national income (GNI) to ODA. Today the government confirmed that this will happen when the budget forecast from the independent Office for Budget Responsibility indicates that, on a sustainable basis, the UK does not borrow to finance daily spending and debt under -jacent decreases. This provides a clear measure, evaluated against independent objective forecasts to inform the return to 0.7%, underscoring the commitment to the 2015 International Development Act.

Due to the economic and fiscal consequences of the Covid pandemic, the UK has suffered the biggest recession in 300 years. Last year the government borrowed nearly £ 300 billion – nearly 15 percent of GDP – the highest since World War II, which is why the decision was taken to temporarily cut the budget for the ‘ODA to spend 0.5 percent of gross national income abroad. in 2021. Other measures have been taken: increase in corporate income tax, freeze personal income tax thresholds and adopt a targeted approach to remuneration in the public sector.

Spending 0.5% of gross national income for this year means the UK will still give more than £ 10 billion to improve global health, fight poverty and tackle climate change. The UK is currently the third largest donor to the G7 as a percentage of GNI. It is also the third-largest bilateral humanitarian donor in the world. UK invests over £ 400million in girls’ education in more than 25 countries, contributing £ 534million in bilateral climate and biodiversity spending and pledging £ 548million to COVAX to provide vaccines to the poorest countries.

The UK is also a moral and humanitarian leader, spending money on causes in addition to the ODA budget. This includes peacekeeping, where the UK is currently the fifth largest contributor to the UN peacekeeping budget, defense, where the government has announced the biggest defense boost in the nation over the past 30 years last year; and diplomacy, where the UK has the third largest diplomatic network in the world. Also on trade, where UK tariff cuts on imports from certain developing countries save exporters from those countries around £ 1 billion each year, and on research and development, where the UK Uni is spending nearly £ 15 billion this year. The UK government also invested more than £ 85million to develop and manufacture the Oxford-AstraZeneca vaccine, with the agreement that the vaccine would be made available for no profit to the world.

In the next expenditure review, the government will establish the ODA budget for 2022-2023 (and provisionally for the following years) in accordance with these tests and the latest budget forecasts. Each year, the government will review, in accordance with the International Development Act 2015, whether a return to spending 0.7% of GNI on ODA is achievable compared to the latest budget forecast. If it expects to meet the budget tests in the next fiscal year, the government will increase foreign aid spending from more than 0.5% of GNI to 0.7% of GNI.

Once the government has spent 0.7% of GNI on foreign aid in a given year, these tests will no longer apply to foreign aid spending and the government will revert to spending 0.7% of GNI on foreign aid. APD from year to year.

A motion will be tabled by the government along with the written ministerial statement released today, asking the House of Commons to review and endorse this approach. A vote is expected to take place tomorrow.

More information

  • The written ministerial statement is available here

  • The 2015 law on international development (official objective of development aid) clearly contemplates the situations in which it may be necessary to deviate from expenditure of 0.7% of GNI on ODA; for example in response to “budgetary circumstances and, in particular, the likely impact of achieving the target on taxation, public spending and public borrowing”.

  • Last year, the UK borrowed nearly £ 300 billion, or 14.3% of GDP, the highest since World War II. Debt as a percentage of GDP has reached nearly 100%, the highest since 1962. This year, the UK is expected to borrow the second highest amount on record in peacetime – just behind last year.

  • Gross national income (GNI) is defined as gross domestic product (GDP), plus net foreign earnings from compensation of employees, property income and net taxes less subsidies on production

  • GNI is an alternative measure of a country’s income, which includes income earned abroad. GDP measures the total value of goods and services produced in the UK. GNI is therefore a broader measure of a nation’s income than GDP, since it captures income from investment or remittances to the UK, regardless of where it comes from.

Share.

Leave A Reply