Chancellor Rishi Sunak defends cutting foreign aid budget in spending review

The chancellor has defended cutting the foreign aid budget, telling Sky News: “This is about trying to focus on the priorities that the British people have at a time of enormous difficulty.”

Speaking to Kay Burley, Rishi Sunak said the COVID-19 pandemic means he has had to make “difficult choices, of which aid was one of them”.

In his spending review, the chancellor abandoned a Conservative manifesto commitment to fund the foreign aid budget at the equivalent of 0.7% of gross national income, instead cutting it to 0.5%.

The move has sparked a backlash among Tory MPs and outside the party as well.

The Archbishop of Canterbury Justin Welby said it was “shameful and wrong”, while former prime minister David Cameron said he “deeply regrets” the decision.

It also prompted Baroness Sugg, a Foreign Office minister, to quit her role in protest.

Mr Sunak said the government hoped to return to spending 0.7% of GDP on aid “when the fiscal situation allows”.

“But we’ll still be spending £10bn on aid next year,” the chancellor continued.

“If you look at that as a percentage of GDP that’s 0.5%, which will still make us more generous than almost any other major economy and we’ll still be one of the most active countries globally.”

He added: “We’re doing so much and people should hold their head up high about the role we’re playing.”

On the wider state of the public finances, Mr Sunak admitted that current levels of spending and borrowing caused by coronavirus cannot continue in the long term.

Asked if taxes could have to rise in the future to get the finances back on track, the chancellor replied: “Now is not the time to make those decisions because we’re dealing with so much uncertainty.”

Defending his decision to pay freeze the pay of 1.3 million public sector workers, Mr Sunak said salaries in that sector are “generally higher” than those in the private sector.

He told Kay Burley that there was a “disparity” between the public and private sectors before the COVID-19 pandemic, and that “even when you take into account characteristics and pensions, there was at least a 7% pay premium for public sector”.

“That pay premium has certainly widened in the last six months, because what we’ve seen over the last six months is private sector wages have fallen by a percent and public sector wages have risen by around 4%,” he said.

“On top of that, people in the private sector are losing their jobs, their hours are being cut, they are being furloughed – none of that is happening in the public sector.

“So given the context, I couldn’t justify an across the board, universal pay increase for the public sector.”

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