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Friday, November 27, 2020

Foreign Aid budget will undermine post-Brexit trade and diplomacy

I am not a big fan of the Chancellor's decision to cut the foreign aid budget from 0.7% of national income to 0.5%. Not only are the budgetary gains small by comparison to overall government spending and debt, but the signals that are sent out undermine everything that Boris Johnson's government is trying to do in a post-Brexit world.

Let us be under no illusion, if we are trying to strike trade deals then the goodwill generated by foreign aid is invaluable. What is more, aid is in investment in future trade partners, and that is before we get to the basic humanitarian reasons why we do it.

The Independent appears to agree and adds an additional dimension. They refer to the resignation of foreign minister Baroness Liz Sugg, who in her letter to the prime minister, said: “Cutting UK aid risks undermining your efforts to promote a Global Britain and will diminish our power to influence other nations to do what is right.”

They point out that Her words come as the UK prepares for its Climate Ambition Summit on 12 December, the five-year anniversary of when a deal was reached by countries for the Paris Agreement on climate change:

The summit is a “kick-off event” aimed at inspiring greater ambition on climate action ahead of the upcoming UN climate talks, which will be hosted by the UK in Glasgow in 2021.

“Ahead of next month’s Climate Ambition Summit, I’m calling on my fellow leaders at the G20 to make bold pledges and harness our collective ingenuity and resources to defeat the pandemic and protect our planet and our future for generations,” said the prime minister in his statement to the G20 summit held last weekend.

But the cut to the foreign aid budget could put the government on the “back foot”, says Nick Mabey, chief executive and founder of E3G, a climate change think tank.

“The cut to aid puts UK climate diplomacy on the back foot just as the prime minister prepares the kick-off summit for Cop26 on 12 December,” he told The Independent.

“The UK is already struggling to get other donor countries to meet their climate finance commitments to help poor countries, and this announcement will remove any remaining ability to apply pressure.”

Under the Paris Agreement, both developed and low- and middle-income countries pledged to slash their greenhouse gas emissions in order to keep global warming below 2C above pre-industrial levels.

However, the pledges from poorer countries were made on the condition that they would receive financial support from richer nations. (This reflects the fact that, since the start of the industrial era to today, richer nations have been responsible for the majority of greenhouse gas emissions.

Richer countries have pledged to mobilise $100bn of “climate finance” for poorer nations by 2020. However, a report released a few weeks ago by the Organization for Economic Co-operation and Development (OECD) found that, by 2018, they were still some way from meeting that figure. The total amount of climate finance given in 2018 was $78.9bn, up 11 per cent on the previous year.

Though it appears that climate finance is protected in the government’s new spending plans, there are fears that slashing overseas aid could harm the UK’s efforts to encourage other developed nations to increase their spending on climate finance.

Yet another diplomatic mess from Boris Johnson's gaffe-prone government.
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