Scrap the 0.7 per cent aid target

March 30, 2016 10:29 AM

With so much of government spending ring-fenced there are, inevitably, fewer ways to make the necessary savings in order to balance the nation’s books. One particular area of the budget that the TaxPayers’ Alliance has repeatedly called to come under scrutiny is the spending of 0.7 per cent of gross national income (GNI) on international aid.

Why? Because it is foolish to establish arbitrary spending targets and because aid has a terrible track record at delivering its stated aims. 

Hypothetically, if our national income doubled overnight would it become necessary to double our aid programme? Almost certainly not, but that is what the law passed in 2015 would now demand. Moreover, the current focus is on inputs not on results.

And coverage in the last weekend’s Mail on Sunday has shown that our current aid programmes can be very poorly targeted. £1.1 million on singing lessons in developing countries, £5 million for a US think-tank and £8,000 for media training in Armenia. It is hard to see how this money will meaningfully improve the lives of those in developing countries.

And there are those who suggest aid can be counterproductive as it removes the need for developing countries’ governments to tax and spend. In turn this removes the need for the government to attain legitimacy amongst the local electorate. By satisfying the immediate need of a country you are perhaps harming its longer term prospects by weakening the democratic process.

What’s more, TPA research has found that aid does little to promote freedom in recipient countries. Perhaps this is unsurprising, as mandating that we spend 0.7 per cent of GNI in perpetuity implies that we will never finish the job of helping developing countries.

And in the context of global remittances, our aid contribution is just a drop in the ocean. $440 billion was sent to developing countries in 2015 compared to the UK aid budget of around £12 billion. If cash is the answer to developing world problems, the solution is unlikely to be found in aid donations, but in money people choose to send home.

Importantly, development aid and humanitarian aid are very different prospects. Helping those in emergency situations is right and a goal that all will support. And there may be an argument for development aid when considered on a case-by-case basis.

However, mandating that we spend exactly 0.7 per cent of GNI on development aid seems foolish, and especially so when we still have such a large budget deficit. There is a petition calling for the abolition of the target started by the Mail on Sunday and it can be found here.

Latest Blogs:

The sugar tax and the public finances

6:00 AM 05, Dec 2016 Harry Fairhead

Working for the taxman

6:00 AM 26, Nov 2016 Harry Fairhead

Further thoughts on the Autumn Statement

4:56 PM 24, Nov 2016 James Price