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Image: © Wandeaw via Twenty20

UK government says Covid-19 means they have to spend less on foreign aid

How much money a country should spend overseas is a hugely divisive issue.

Next year, the UK will reduce the amount of money it spends on international aid (i.e. trying to help people in other countries) from 0.7 percent of its total revenue to 0.5 percent. Rishi Sunak, the Chancellor of the Exchequer, says he needs to do this because the UK has spent so much money combatting the coronavirus pandemic that it now has a huge deficit. A deficit is when a government spends more money than it makes (from things like tax). UK politicians, particularly Conservatives ones, have tended to be against big deficits because you get a deficit by taking out debt, which then has to be paid back with interest (extra fees on top).

Lots of people are angry about this decision, not least because spending 0.7 percent of the UK budget is enshrined in law. Some say it’s selfish for a rich country like the UK to pull back on helping out at a time of global catastrophe. Poorer countries tend to have worse health care and welfare systems, so are expected to struggle more to mitigate all the damage that has been caused to people’s lives and livelihoods in 2020.

Another criticism is that it’s misguided for the government to be so focused on reducing the deficit at all. Interest rates are really, really low at the moment so one argument is that there isn’t actually much cost to borrowing. Even if this wasn’t the case, some say that the benefits of being able to improve people’s wellbeing in the present outweighs financial costs in the future. There’s also an argument that spending more now will actually reduce future costs. A common example when it comes to foreign aid is that spending more upfront could help stop countries falling into full-blown wars or other humanitarian crises, whose negative impacts tend to snowball.

However, there are also plenty of people who will cheer the news of a cut to the foreign aid budget. Two-thirds of Brits support the move. Some of these respondents may believe that aid is actually economically damaging to the countries it is supposed to help because it discourages local innovation or imposes Western ideals on different cultures. (Some people who are against foreign aid also dislike the fact it is branded as magnanimous support rather than repatriation for a history of Western imperialism). However, a more common belief is as government revenue is raised from UK-based people and activities, it should be largely spent on UK-based people and stuff.

Read our explainer on: giving and receiving aid. 

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