How the UK’s spending on foreign aid compares to other countries’

Published

4 years ago

June 7, 2021

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Conservatives rebels have been among those calling on the government to reverse its plan to cut foreign aid.

Since 2015, it has been enshrined in UK law for the country to give at least 0.7% of Gross National Income (GNI) to lower and middle-income countries to aid their development.

The plan to reduce the UK’s contribution to foreign aid to 0.5% of GNI – despite a United Nations target of 0.7% – has been met with widespread domestic and international criticism.

Here, we look at how much the UK gives in comparison to other countries.

Who gives foreign aid?

Most richer countries give aid, including some that are classed as middle or lower-income.

But the 0.7% target applies to countries that are on the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD DAC).

These 30 countries are made up of many in the European Union, the UK, US, and other highly developed nations like Australia and New Zealand.

A couple of other countries are participants on the DAC, such as Saudi Arabia, the UAE, Bulgaria and Romania.

Last year, the UK was one of only seven countries reporting to the OECD that met the 0.7% target, giving the equivalent to $17.4bn – exactly 0.7% GNI. Out of European countries, only Germany spent more than the UK on aid in absolute terms ($27.5 billion or 0.73% of GNI). But several OECD countries gave more as a percentage of GNI.

In 2020, the proportion of GNI given by countries varied significantly from country to country, despite the UN’s target.

What is the money spent on?

The aid from DAC countries is called Official Development Assistance (ODA), which is intended to promote the economic development and welfare of developing countries, according to the OECD.

In 2020, the last year for which net flows of aid were reported, member countries sent $161bn to those developing countries, an increase of 7% in real terms compared to 2019. About three-quarters of that came from G7 countries.

Broadly, this falls into one of four categories: 1. Bilateral projects, programmes and technical assistance, which represent just over half of total net ODA; 2. Contributions to multilateral organisations (about a third of total ODA); 3. Humanitarian aid; and 4. Debt relief.

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This can include grants that fund improvements to the health of people in developing countries, such as vaccination programmes, but it can also include programmes that can benefit donor countries, such as infrastructure projects that allow greater levels of trade and investment.

Many countries, such as Japan, offer a sizable proportion of their aid in the form of loans.

How has the UK been doing up until now?

In 2013, the UK achieved the 0.7% target for the first time.

It came about after the Conservative Party committed to the target in its 2010 manifesto, when it also proposed setting up a dedicated department for international development to help achieve its aim.

It has maintained the commitment in subsequent manifestos, including in 2019 when it pledged to maintain the proportion of spending.

In 2010, then leader David Cameron defended the move, telling business leaders at the Lord Mayor’s banquet in London’s Guildhall that it saved lives, prevented conflict and was the “most visible example of Britain’s global reach” for millions of people.

Since 2015, the Government has also been under a statutory duty to meet the 0.7% target, as a result of the International Development (Official Development Assistance Target) Act.

But, in the wake of the impact of the pandemic, ministers want to slash the proportion to 0.5% saying that, while it is only a temporary measure until the nation’s finances are repaired, it will save £4bn.

If the UK had spent 0.5% of GNI in 2020, as it plans to in 2021, it would have ranked 10th in the world for its aid spending as a proportion of GNI, instead of seventh, according to the House of Commons Library.

How did the 0.7% target come about?

A target for international aid was originally proposed as far back as 1958 – at first by the Central Committee of the World Council of Churches, which suggested a 1% of GDP figure would be appropriate, and the idea was then circulated to all United Nations delegations at the 1960 General Assembly.

The 0.7% target was first agreed by the DAC in 1970 and it has repeatedly been international endorsed.

Among the key moments at which the 0.7% figure has been backed are the 15 countries that were members of the European Union by 2004 agreeing the following year to reach the target by 2015 and the 0.7% target serving as a reference for 2005 political commitments to increase ODA at the G8 Gleneagles Summit and the UN World Summit.

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In 2017, the UK government said it wanted to modernise the ODA rules to include some peacekeeping-related spending.

Currently, spending on military equipment or activity, including peacekeeping expenditure and anti-terrorism operations, are excluded, apart from the distribution of humanitarian aid.

Aid that relates to nuclear energy can be included as long as it is provided for civilian purposes.

Do countries outside the OECD provide international aid?

OECD countries are not the only ones that provide foreign aid, in its widest definition.

Evidence has been presented that China, India and Russia – which are classed as middle and upper-middle income countries – provide aid that would qualify under the ODA rules, but the amount they provide is not subject to the degree of transparency of DAC aid budgets.

US research group Aid Data has examined the Chinese loans paid to developing countries for a wide range of projects and businesses, with tens of billions in ODA payments given to lower or middle-income nations.

The vaccine diplomacy engaged in by Russia and India illustrates how two other countries outside the OECD offer one form of help.

And the World Bank reported that Russia’s ODA was $1.2bn in 2017, the last year for which figures were available, and India’s Ministry of External Affairs says it has offered “lines of credit” to 64 countries, worth $30.6bn.

Politics

‘Make or break’: Chancellor warned businesses can’t take more tax hikes in budget

Published

10 hours ago

October 14, 2025

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'Make or break': Chancellor warned businesses can't take more tax hikes in budget

Rachel Reeves has been warned that firms face a “make-or-break moment” at next month’s budget.

The British Chamber of Commerce (BCC) urged the chancellor, who is widely expected to announce tax hikes in November’s budget to fill a gap in the public finances, to steer clear of increasing levies on businesses.

Ms Reeves raised taxes by £40bn last year and the BCC said business confidence had not recovered since.

“Last year’s budget took the wind from their sails, and they have been struggling to find momentum ever since,” BCC director-general Shevaun Haviland said.

She said firms felt “drained” and could not plan ahead as they expected “further tax demands to be laid at their feet” when the budget is delivered on 26 November.

“The chancellor must seize this moment and use her budget to deliver a pro-growth agenda that can restore optimism and belief amongst business leaders,” Ms Haviland added.

“This year’s budget will be a make-or-break moment for many firms.”

The BCC also called for a reform of business rates and the removal of the windfall tax on gas and oil introduced by the last government.

In its submission, the industry body outlined more than 60 recommendations, including the proposal of further infrastructure investment, cuts to customs barriers and action on skill shortages.

Earlier this year, Prime Minister Sir Keir Starmer announced Labour would aim to approve 150 major infrastructure projects by the next election, with Labour already pledging to support expansions of both Heathrow and Gatwick airports – another of the BCC’s requests.

While the Treasury would not comment on budget speculation, a spokesperson insisted Ms Reeves would “strike the right balance” between ensuring funding for public services and securing economic growth.

She has vowed to stick to Labour’s manifesto pledges not to raise taxes on “working people”.

Household spending on the wane

The BCC’s plea to halt further tax rises on businesses comes as retail sales growth slowed in September.

“With the budget looming large, and households facing higher bills, retail spending rose more slowly than in recent months,” Helen Dickinson, chief executive of the British Retail Consortium (BRC), said.

“Rising inflation and a potentially taxing budget is weighing on the minds of many households planning their Christmas spending.”

Total retail sales in the UK increased by 2.3% year-on-year in September, against growth of 2% in September 2024 and above the 12-month average growth of 2.1%, according to BRC and KPMG data.

While food sales were up by 4.3% year-on-year, this was largely driven by inflation rather than volume growth.

Non-food sales growth slowed to 0.7% against the growth of 1.7% last September, making it below the 12-month average growth of 0.9%.

Online non-food sales only increased by 1% against last September’s growth of 3.4%, which was below the 12-month average growth of 1.8%.

“The future of many large anchor stores and thousands of jobs remains in jeopardy while the Treasury keeps the risk of a new business rates surtax on the table,” Ms Dickinson said.

“By exempting these shops when the budget announcements are made, the chancellor can reduce the inflationary pressures hammering businesses and households alike.”

Politics

Starmer and other leaders have fallen into line on Trump’s Gaza plan – now it must deliver

Published

18 hours ago

October 13, 2025

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Starmer and other leaders have fallen into line on Trump's Gaza plan - now it must deliver

I’ve been around a while and seen a lot of the insides of international summits over the years, but this one was truly extraordinary.

Over 20 leaders flew to Sharm el-Sheikh in Egypt from all over the world – Indonesia, Pakistan, Norway, Canada – to witness the signing of Donald Trump’s peace plan.

Gaza deal signed – as it happened

This historic day was pure theatre for Trump from start to finish. Flying in from Israel, where he had met hostage families and then addressed the Israeli parliament, he arrived a whopping three hours late, keeping a gaggle of world leaders waiting.

We stood around in corridors watching them move from one room to another to hold meetings with each other, presumably to talk about phase two of Trump’s peace deal.

Testimony to the power of Trump

At one point, Sir Keir Starmer’s meeting with his Turkish counterpart included France’s Emmanuel Macro. That then somehow morphed into a summit which also brought in the Germans, Italy’s Prime Minister Giorgia Meloni, and the leaders of Egypt and Qatar. More chairs kept coming into the room until there was the equivalent of a cabinet table of leaders and advisors sitting in a long line facing each other.

What they were talking about was how each country could help in phase two of the peace effort. Now Trump had, alongside fellow signatories of this deal – Egypt, Qatar, and Turkey – ended the war, could they maintain the peace?

As Starmer put it: “We can’t treat today as historic and let it drop tomorrow.”

But these mini summits in the margins happened by fault rather than design. This day really was designed to bear witness – and offer acknowledgement – to Trump. All of these leaders turned up pretty much in the dark as to what the day held, with his peace summit convened 48 hours earlier.

That they dropped plans to make their way to Egypt is testimony to the power Trump wields.

He was utterly omnipotent. First, there was the greeting ceremony, in which each leader filed in individually for a photo and handshake with him before all returning to the stage for the family photo.

Then, at the signing ceremony, Trump sat with his three fellow signatories as the world leaders stood behind him.

“This took 3,000 years to get to this point. Can you believe it?” Trump said as he signed that deal. “And it’s going to hold up, too. It’s going to hold up.”

Finally, in another giant hall, Trump gave a speech in which he ran through all the leaders who had turned up – praising them or fondly poking a bit of fun at them accordingly, as (most) of them stood behind him.

He teased Macron for sitting in the front row rather than joining the others on the stage, joking it wasn’t like him to be low-key. He described Meloni as a “beautiful young woman”.

“I’m not allowed to say it because usually it’s the end of your political career if you say it – she’s a beautiful young woman,” said Trump mid-speech. “You don’t mind being called beautiful, right? Because you are,” he turned to say to her – her reaction obscured from view.

Now for the ‘easy part’?

Soon after, the prime minister of Pakistan, invited to say a few remarks by Trump, renewed his call for the US president to be awarded the Nobel Peace Prize.

Having brokered the deal, Trump took the moment and made it into his summit on his terms, as fellow leaders fell into line, literally standing behind him. And in his characteristic bullishness, he told his audience in this final speech that the hard part – the ceasefire – had been done, and rebuilding Gaza was the easy part.

That isn’t really what the rest of them believe: 92% of Gazans have been displaced, the Gaza Strip is a wasteland. Organising a peacekeeping force, getting Hamas to disarm and Israel to withdraw from the strip, putting together a technocratic team and peace board to oversee the running of Gaza still needs to be done.

This was a largely celebratory day, but there are concerns whether this deal will hold up. Trump says Hamas needs to disarm and disband, and yet one of their most senior leaders told Sky News a few days ago, it won’t.

Meanwhile, there is a growing humanitarian crisis in Gaza. The UK has in short order sent in £20m of aid to try to help with sanitation.

On the British side, the prime minister said he had offered to help demilitarise the strip, saying the UK can take a role in “monitoring the ceasefire but also decommissioning the capability of Hamas and their weaponry, drawing on our experience in Northern Ireland”.

“It’s really important we keep that focus. We mustn’t have any missteps now,” he said.

Trump’s peace board is still in its infancy – Starmer told me he isn’t going to sit on it, with the make-up still being discussed, while Tony Blair’s participation is controversial.

Trump said on the way over to Egypt that he was going to canvass opinion to make sure everyone is happy with the former prime minister’s presence. It comes after Bassem Naim of Hamas told Sky News that Blair was not welcome in Gaza after his role in the invasion of Iraq.

When I asked Starmer if he thought Trump should be awarded the Nobel Peace Prize he said “there’ll be plenty of people, I’m sure, nominating him” – as he paid tribute to him for getting “leaders to this position”.

Now the task for them all is to implement what Trump has set in train. If his plan works, he would be sitting on an achievement that has eluded successive US presidents for decades.

Trump should rightly be lauded for ending the war, now he must bring the peace.