How will Clegg retaliate over the 0.7% aid law?

Cameron's refusal to introduce a bill committing the UK to spending 0.7 per cent of GNI on aid is a breach of the coalition agreement.

It’s official. The government are NOT going to enshrine in law the UK’s commitment to the UN target of spending 0.7 per cent of GNI on international aid. The Foreign Secretary’s comments over the weekend confirmed that the law will not be in today’s Queen’s Speech. And a government source confirmed the reason to the Observer:

It is not about a lack of time but a lack of will on the part of the Prime Minister to engage in a fight with his backbenchers. It was in the Coalition agreement but the Prime Minister has decided it will not be in the Queen’s Speech and basically it will not happen under this government.

I don’t want to say “I told you so”, but regular Staggers readers will know that you read it here first. The Conservative commitment to the electorate was clear: on page 117 of the Conservative manifesto it says:

A new Conservative government will be fully committed to achieving, by 2013, the UN target of spending 0.7% of national income as aid. We will stick to the rules laid down by the OECD about what spending counts as aid. We will legislate in the first session of a new Parliament to lock in this level of spending for every year from 2013.

And the Coalition Agreement, is also clear (page 22):

“We will honour our commitment to spend 0.7% of GNI on overseas aid from 2013, and to enshrine this commitment in law.”

But perhaps most striking is that Tory MPs were literally queuing up to have their photos taken supporting the launch of the ‘IF’ campaign just a few months ago. Let’s pick a few at random: here is George Freeman at the Westminster launch event, here is Mark Lancaster at World Vision HQ in Milton Keynes and here is a picture of David Cameron himself, taken last month by ActionAid campaigners in Witney, just days before last week’s elections.

So what? Well, the number one demand of the ‘IF’ campaign is:

“The UK Government must deliver on its commitment to spend 0.7% of gross national income on aid from 2013, and introduce legislation on this issue either before or in the Queen's Speech.”

Before last week’s elections they backed the campaign but today, the Queen’s Speech will show that now they don’t. At the weekend William Hague argued that what matters is that they are meeting 0.7% but last year, when the budget was just 0.56%, DFID underspent its budget by a record breaking £500m last year.

So what now? There is still a tiny chance that Mark Hendrick’s private members bill might progress, but without government support it is dead in the water. The UK development NGOs are left licking their wounds and wondering whether they can secure other ‘IF’ objectives in the run up to the G8. While in Westminster, all eyes now shift to the coalition partners.

At party conference last year, newly appointed DIFD Minister Lynne Featherstone said that Lib Dems were committed to 0.7, “no ifs, no buts” and would “put it into law as soon as we can get a legislative slot”. The last time Cameron broke the coalition agreement, withdrawing support for Lords Reform, Clegg retaliated by withdrawing support for boundary changes. He said:

“I cannot permit a situation where Conservative rebels can pick and choose the parts of the contract they like, while Liberal Democrat MPs are bound to the entire agreement."

It seems that the “pick and choose” nature of the contract has again been exposed, with Conservative rebels shaping government decisions again. So what will he do this time? Or perhaps more importantly, what will the big six NGOs behind the ‘IF’ campaign urge him to do?

The last time they were in office, the Conservatives halved the aid budget. Labour trebled it. The reason the Conservatives made the promise they did in 2010 was to achieve all-party consensus and put the issue beyond doubt. But now there is no doubt at all.

At the pre-election hustings event organised by the big six NGOs through BOND, a delegate from Oxfam challenged Andrew Mitchell’s sincerity and said that she did not believe he would keep his promise. Rather than reassure her, to the surprise of the rest of the audience, he questioned her political motives and insisted that, on this issue, there was consensus across all political parties. Now we know. She was right all along. 

Richard Darlington was Special Adviser at DFID 2009-2010 and is now Head of News at IPPR - follow him on twitter: @RDarlo

David Cameron and Nick Clegg attend a press conference at 10 Downing Street to mark the half-way point in the term of the coalition government. Photograph: Getty Images.

Richard Darlington is Head of News at IPPR. Follow him on Twitter @RDarlo.

Photo: Getty
Show Hide image

Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.