Rishi Sunak 'planning to recycle IMF cash into UK aid budget'

Rishi Sunak ‘will save billions of pounds by counting IMF contributions towards the UK’s foreign aid budget’

  • Rishi Sunak is said to be planning to use IMF cash as part of UK’s aid spending
  • Such a move would save the Treasury billions of pounds over the next few years
  • Campaigners said the cash should be spent in addition to the existing budget

Chancellor Rishi Sunak is facing criticism over plans to ‘recycle’ a windfall from the International Monetary Fund into the UK’s aid budget. 

Campaigners believe Mr Sunak is preparing to use a large portion of the funds to replace part of the UK’s current international development spending rather than using it in addition to what has already been allocated.

The move would likely save the Treasury billions of pounds over the next few years. 

It comes after the Government came under heavy criticism for cutting aid spending for the world’s poorest from 0.7 per cent to 0.5 per cent of national income.

Chancellor Rishi Sunak is facing criticism over plans to ‘recycle’ a windfall from the International Monetary Fund into the UK’s aid budget.

Britain has received £19billion of its share of IMF special drawing rights (SDRs) which are designed to help poor countries ailing from the coronavirus pandemic.

But rather than following other countries by using it to provide help in addition to existing budgets, The Guardian reported that the UK will stick to internationally agreed rules allowing 30 per cent of lending through the IMF to count as aid.

Romilly Greenhill, the UK director of the One Campaign against poverty, said she expects the Government to recycle around 75 per cent of its SDR allocation, saving up to £5billion in the coming years.

She called on the Chancellor to reverse the ‘shocking’ decision in his spending review on October 27, adding: ‘It’s even more outrageous that we are the only rich donor to be considering counting this money as aid.

‘Because of the way SDRs work this money comes at barely any cost to the UK taxpayer. It’s literally taking charity away from those most in need.’

Conservative former international secretary Andrew Mitchell was also among those criticising the move.

He said: ‘While the IMF expenditure is indeed within the definition of the aid budget, including it at this time – especially when it is not actual cash expenditure – and when the aid budget has already been slashed during a global pandemic will have a devastating effect on humanitarian causes British people care about and send a terrible message about global Britain.’

The Liberal Democrats’ foreign affairs spokeswoman Layla Moran accused the Government of sending ‘completely the wrong message’ ahead of the Cop26 climate summit in Glasgow.

‘This Conservative Government has dealt yet another damaging blow to Britain’s global reputation, by recycling aid money to avoid helping the world’s poorest people,’ she said.

The Treasury did not deny the plans, and a Government spokeswoman said: ‘The UK is one of the leading international aid donors and this year we provided over £10billion towards poverty reduction, climate change, and global health security.

‘We will return to the 0.7 per cent target when the fiscal situation allows.’

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