Rishi Sunak has been told he could damage Britain's global reputation after it emerged the Chancellor plans to save cash by "recycling" aid money to help the world's poorest.
The Government is looking to save some of a £19bn windfall from the International Monetary Fund (IMF) - intended to help developing countries cope with the Covid pandemic - by counting the cash as aid.
Most countries who get assets via the IMF's special drawing rights (SDRs) use them on top of pledged extra cash pumped into their planned foreign aid budget.
But it has been reported the UK will reuse 75% of its allocation, something which will save the Treasury up to £5bn in the coming years. The Government has not denied the plan.
The move comes after the Treasury was heavily criticised by charities, Labour and Tory backbenchers, for cutting aid spending from 0.7% to 0.5% of national income.
Romilly Greenhill, the UK director of the One Campaign against poverty, has 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 £10 billion towards poverty reduction, climate change, and global health security.
“We will return to the 0.7% target when the fiscal situation allows.”
