Why Give with One Hand and Take Away with the Other?

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Why Give with One Hand and Take Away with the Other?

However much the government is going to cut from the defence budget, the schools budget, and the pensions budget, it is not going to take anything away from the international development budget. What are we to make of this? When it was announced, it seemed to be a political move, to bolster the argument that the Conservative party had changed, that it was no longer the nasty party, and that its agenda really was something centrist voters could support.

Now, after the budget, the difficult consequences of that decision are going to become increasingly clear. We are going to hear news items about money spent teaching African farmers better conservation techniques or better ways to feed and rear cattle, spliced between news items on the numbers sacked by this or that round of departmental job cuts in Britain, hard times for those contractors who worked for councils and the like, whose contracts the government can’t afford to renew.

In short, the budget’s 25 per cent cuts to some public services are going to bite hard and over the next few years, and mutate from an innocent-looking percentage into real stories which evoke real sympathy.

So what are the political consequences of this decision likely to be? I would like to make a few predictions. The first is that public negativity towards the decision is likely to be muted. For all the scare stories about wasted aid, the reality is that Britain spends 0.5 per cent of its budget on international development.

As long as the Department for International Development (DfID) makes the budget-cutting administrative reforms its new boss, Andrew Mitchell, has promised to demonstrate that it is not immune to the coalition government’s adage that “we are all in this together”, then I predict that the electorate will not complain. Brits already rate high on the international philanthropic league table, and I do not believe that 0.5 per cent of the budget will frighten anyone.

Second, I believe that the Conservatives’ decision to ring-fence aid spending has had an important effect on the debate. By taking it off the table as an election issue, they quietly moved the country towards a consensus that Britain’s aid spending is important.

It is also worth bearing in mind that the department has quietly become an object of admiration around the world. This gives pause to those who oppose it, as that would damage an institution which has come to reflect credit on Britain as a country.

But there is a problem. As far as international development is concerned, our taxes are not just going to DfID. A sizeable chunk is also going towards the EU’s Common Agricultural Policy (CAP), which prevents development.

That’s not why it’s there of course, but that’s what it does in practice.

It means that when rice, milk powder, cereal, potatoes and other products are grown in developing countries and taken to markets, the farmers often can’t sell them, because they have to compete with cheaper equivalents which have been subsidised by the European taxpayer.

That means that farming doesn’t bring in the money it would naturally do, and there is real hardship as a result.

The biggest irony is that these malign effects cost us money. The CAP accounts for nearly half – 44 per cent – of the EU budget. To give you some idea, that was 43 billion Euros in 2005. The sad fact is that every year, by allocating tax money to both the DfID and the CAP, Britain is giving with one hand and taking away with the other. And the taxpayer is paying for both.

Azeem Ibrahim is a Research Scholar at the Kennedy School of Government at Harvard University, Member of the Board of Directors at the Institute for Social Policy and Understanding and Chairman and CEO of Ibrahim Associates.

ISPU scholars are provided a space on our site to display a selection of op-eds. These were not necessarily commissioned by ISPU, nor is their presence on the site equal to an endorsement of the content. The opinions expressed are that of the author and do not necessarily reflect the views of ISPU.

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