Guns or Butter? UK's Defence v Foreign Aid Debate

♠ Posted by Emmanuel in ,, at 5/20/2011 12:02:00 AM
OK, so this is not strictly an application of the economic textbook guns-or-butter question of whether a nation should devote its resources to military or civilian priorities given a production possibility frontier. After all, the recipients of the "butter" ain't her majesty's subjects. Given that the UK is not as free-spending as the US is--over there Cheneynomic free lunch ideology has been ascendant for at least a decade now--it's a meaningful tradeoff with implications for foreign policy. PM David Cameron says he's of the "Live Aid" generation in justifying the preservation of aid spending, but let's say right-leaning sorts have...other priorities.

The general outlines of this debate go like this: The Conservative-Liberal government indicates that it will live up to its coalition agreement to "ring fence" or protect 0.7% of British GDP for foreign aid by shielding it from government cuts occurring elsewhere. (See an earlier post of mine on how the 0.7% of GDP target came about.) To which the defence secretary, unsurprisingly, wishes to keep the option of reducing foreign aid contributions to spend on arms. Protect your turf is still the operating principle here. That is, more guns, less butter:
Defence Secretary Liam Fox has challenged a plan to enshrine in law the UK's promise to spend 0.7% of its gross national income on overseas aid. In a letter leaked to the Times, Dr Fox says he "cannot support the proposal in its current form". A source close to Dr Fox said the issue was not the level of the target but how best to reflect this in law.

Downing Street said it remained fully committed to implementing its pledge in line with the coalition agreement. The BBC understands Dr Fox's letter was written to Prime Minister David Cameron about five weeks ago. The defence secretary said that "creating a statutory requirement to spend 0.7%" on overseas aid could lead to legal challenges and limit the government's options on where money was spent.

International aid is one of only a handful of areas, including health spending in England, being ringfenced from spending cuts over the next four years. Most other departments are seeing their budgets slashed - defence spending by 8% by 2015.
Given that foreign aid is less than a third of defence spending as the graphic in the link in the article indicates. What's more, the UK has some ways to go to reach the 0.7% threshold from its current level of below than 0.6%:
The promise to spend 0.7% of national income on aid by 2013 was put in the Conservative manifesto before the last general election and then repeated in the coalition agreement. A Downing Street spokesman said it was "fully committed to enacting the 0.7% commitment into law, in line with the coalition agreement". The 0.7% commitment is an international aspiration first mooted by the United Nations in the 1970s and reaffirmed by the world's leading economies in 2002.

Aid and development charity Oxfam said Dr Fox was "wrong" to question the government's approach. "British aid offers great value to the taxpayer," its chief executive Barbara Stocking said. "For little more than a penny in the tax pound we not only help those in need but also boost our standing in the world and increase our influence in the global corridors of power."
In the real world where the rest of us live in where deficits do matter (got that, Yankee deficit lubber?), these debates are more than rhetorical.