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Overseas Aid and Defence Expenditure

Volume 785: debated on Monday 13 November 2017


Asked by

To ask Her Majesty’s Government what is the ratio of overseas aid expenditure to defence expenditure in the current financial year.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare an interest in shareholdings as set out in the Register of Members’ Financial Interests.

My Lords, according to the latest available data, the ratio of defence expenditure to overseas aid expenditure in 2016 was more than 3:1. The UK Government spent £42.2 billion on defence and £13.3 billion on overseas aid in 2016. Both defence and overseas aid budgets are published on a calendar-year basis, in line with international standards.

My Lords, is the continuing hollowing out of our Armed Forces not a betrayal of all those veterans who proudly marched and paraded over the weekend? The defence budget is under huge pressure, our Army is below strength, we would be hard pushed to deliver 12 escort vessels and there is speculation over cuts to our amphibious capability, to our Royal Marines and to our minesweepers, to say nothing about finding money for the Joint Strike Fighter for our new carriers. While many of our aid programmes are vital and commendable, is it not time to revisit the 0.7% commitment? Is not the current ratio of overseas aid expenditure to defence expenditure now just unsustainable? Does development aid really need its own department?

Perhaps I may answer the second part of that question. If we look just at the past year, overseas aid has provided humanitarian assistance to 17 million people. Some 28.7 million people have received immunisations, saving 475,000 lives, while 7.1 million children have been provided with education and 27.2 million have been provided with access to clean water. So the answer to the second part of the noble Lord’s question is yes, it is needed, and the Department for International Development is doing good work.

On defence, I do not accept the noble Lord’s premise that the Armed Forces have been hollowed out. The defence budget is increasing in real terms year on year by 0.5% over the current spending review period. In terms of aircraft—I see that the noble Lord may wish to come in on this at some point—there is our shipbuilding strategy, the details of which I will perhaps elaborate on later.

My Lords, on the point that has been brought up, I am totally in favour of supporting crises in which defence plays a major part. No one could possibly argue with that, but we have to be able to assess how the other 85% is faring. In July the National Audit Office said the following:

“With only one of the four of the UK Aid Strategy’s objectives supported by measurable targets, it is not possible to assess progress in its implementation”.

If we take the next 15 years, this country will be spending well over £200 billion on aid. No organisation that I know of is prepared to spend without being able to judge additionality. Therefore, how long can this country truly justify spending moneys which cannot be assessed for additionality?

I agree to this extent with my noble friend: we do not want to waste money. That is one of the things we have been driving very hard on in the Department for International Development. I am very happy to meet with my noble friend to discuss how the aid budget is being used and the lives which have been saved as a result of it. I happen to think that one of the things we can be proud of in this country, particularly when we think of the act of Remembrance which took place yesterday, is that we are the only country in the world which actually meets its 2% obligation under the NATO agreement along with our 0.7% aid commitment. That is the type of global Britain which we can all be proud of.

My Lords, in the last two debates on defence, it has been made clear by speakers on all sides of the House, apart from the Government Front Bench, that defence is in crisis and that not enough money is being spent on it. Everyone has said that, and indeed the noble Earl took that message back to the department, so to say that all in defence is fine and rosy is incorrect. One wonders if the Government need to have a reality check on this. I am very proud of 0.7% being spent on aid, but can the Minister assure me that the defence budget is going to get the same protection and be looked after in the same way as the aid budget? I ask this because in the final analysis, strong defence forces help stability, make us all safer, and enable aid to actually be used in these places abroad.

As I just mentioned, the defence budget differs from the aid budget in the sense that it will increase each year in real terms by 0.5%, which is greater than is going into overseas aid. We have announced a national security capability review which is being conducted at the present time. The noble Lord will also be aware of the national shipbuilding strategy which has put in an order for five Type 31e general purpose frigates in addition to the Type 26 frigates ordered in July. We can do both, and we are.

My Lords, as I understand it, is not an increasingly large amount of the development aid budget now dispersed among other departments where the same standards of evaluation do not apply, and are certainly not as rigorous as those applied by the Department for International Development?

It is true to say that around 26% of the overseas aid budget is dispensed by other departments, and a lot of it is spent by Department for Business, Energy and Industrial Strategy. It is investing in education and research, particularly in medicine, along with development matters that will help developing countries. However, we are clear that everything has to be categorised as overseas development assistance; it must meet the primary purpose test, which is that it is for the economic development of the least well-off countries in the world. We are absolutely confident that that target is being met. If it is not met, the money is not categorised as overseas development assistance and therefore we do not meet the 0.7% target. That is why we take it very seriously.

My Lords, I congratulate the Minister on his answers to this Question. Is it not essential that we continue to commit ourselves to 0.7% for the aid budget? It would be quite wrong to raid it in order to solve the problems of defence.

The noble Lord is absolutely right and we share that concern. It is a joint commitment, which had widespread support on all sides of the House when it went through. We can stick to the legislation and be proud of it because we are saving lives.

My Lords, if the Minister believes that there is no problem with the defence budget, why at the moment are illustrative savings being looked at, for example to close out an Army brigade, do away with the Army Air Corps, and completely undermine and shred our amphibious capability?

The noble and gallant Lord will be aware that a national security capability review by the national security adviser is under way. As part of that all options are being looked at, as he would expect when a review takes place, but no decisions have been made at present and the comments on the budget remain.

My Lords, if everything in the garden is lovely, why have the Government reduced their order from Boeing for replacement Apache helicopters from 50 to 38, if it is not from budgetary pressures?

I am not making the claim that everything in the garden is rosy. People are having to make tough decisions but what I have highlighted on this Question is that we are fulfilling our obligations under NATO. We are actually going beyond them, as we have spent more than 2%. In answer to the point made earlier by the noble Lord, Lord Lee, we have spent 2.1% while at the same time protecting the 0.7%. I think we can be proud of that record but how we spend on aid and defence is a matter that we should keep under close review.