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Think tank plan to cut aid would cost millions of lives

Capping the international development budget would send out the wrong signal to the rest of the worl

Another day, another right-wing think tank calling for the international aid budget to be cut. This time it is the Centre for Policy Studies and the proceeds are to be spent on tax cuts, including scrapping the 50p income tax rate. Putting aside whether tax cuts are the best way to spend extra funding, is capping the DFID budget at the 2010/11 for the next two years really a good way to save £1.3bn?

It would mean that Britain would fail to reach the UN target of spending 0.7 per cent of gross national income on overseas aid, a promise that all three major political parties made at the last election. It would also mean that the UK no longer had credibility to criticise other G8 countries, like Italy, for failing to meet the promises they made at Gleneagles. And finally, it would signal to other G8 countries that it is OK to cut aid spending during a downturn and, in the words of Development Secretary Andrew Mitchell, to "balance the books on the backs of the world's poorest people".

At a more practical level, the CPS report devotes just three paragraphs to explaining how £1.3bn could be cut from the aid budget and makes just two arguments for why this is a good idea.

The first is that:

India is establishing its own aid agency, distributing $11 billion over the next ten years, raising questions as to why the UK still grants it, and other large countries, substantial sums of aid.

I'll try and answer these questions for them: India is home to more people living in poverty (those living life on less than $1.25 a day) than the whole of sub-Saharan Africa. The UK's aid budget devoted to India is just short of £300m a year and almost half of it is spent on healthcare, tackling maternal mortality and malaria, the main killers of women and children.

When I worked for DFID, I was lucky enough to visit a slum in West Bengal where UK taxpayers' money had paid for the installation of toilets and basic sanitation: clean running water and a sewer system for waste. I was humbled. Perhaps the Indian government should have paid for it, rather than for a space programme, but it's hard to look a child in the face and make that argument, even through an interpreter. While India has huge wealth, it also has huge inequality and the UK's promise to help people in absolute poverty should be honoured.

The other CPS argument is that:

Aid itself should focus on emergency relief and correcting for market failures in health issues; not on capital projects.

Just across the border from India, in another "large country", the UK taxpayer invests £150m a year in Pakistan. Some of this is spent on health issues and yet more is spent on emergency relief, like when the region was devastated by flooding earlier this year. But if the UK taxpayer turned their back on capital projects, the 255,000 people made homeless would have been left to live in tents. A fifth of the DFID budget in Pakistan is spent on "Governance", a direct up-stream attempt to prevent conflict, instability and ultimately terrorism on the streets of the UK. Another fifth of the budget is spent on education, literally building schools so that primary age children can learn to read and one day get jobs trading with UK companies.

Cutting the UK aid budget by £1.3bn is easy to write into a think tank report but far harder to do. If the entire UK aid budget for India and Pakistan was cut, you would still be looking for nearly £1bn more in savings. If you cut the entire admin budget of the department (meaning they would literally have no staff left) you could only save £214m. To find this level of savings, you would need to cut the entire contribution to the United Nations and the World Bank or cut the entire bilateral aid programme for the whole of sub-Saharan Africa by more than 75 per cent.

Irrespective of the whether CPS are right to argue for tax breaks, whatever way you cut it, taking £1.3bn from the UK aid budget would cost millions of lives across the developing world. They should think again.

Richard Darlington is Head of News at IPPR and was Special Adviser at DFID 2007-2010