Sunak’s U.K. Foreign Aid Cut Sparks Backlash in Johnson’s Tories

(Bloomberg) -- Chancellor of the Exchequer Rishi Sunak’s move to cut the U.K.’s foreign aid budget opened a new rift within the ruling Conservative Party. It also masks a key political objective for Boris Johnson.

The prime minister won a landslide election last December by convincing Brexit-backing working-class voters in the poorer North to drop a life-long commitment to the Labour Party. Making sure those voters don’t drift back is a critical plank of Johnson’s “leveling-up” mission that includes upgrading infrastructure in regions outside London. Showing that his spending priorities are with the needy back home, rather those overseas, is part of that message.

That is what Jake Berry, who leads a group of northern Conservative lawmakers that includes many of the new intake from the 2019 election, sees. “The vast majority of people in my constituency will argue that in these unprecedented times tax-payers money should be prioritized on British taxpayers and our economic recovery,” he said on Twitter.

The money that set off a storm in Tory circles is a drop in the ocean: 4 billion pounds ($5.4 billion) in cuts to the overseas development budget compared to 394 billion pounds in borrowing to face the worst slump in three centuries.

Yet it drew passionate criticism from the Church of England and Tory grandees, as well as prompting a junior foreign minister to quit. Former Tory Prime Minister David Cameron, who attended Eton College and Oxford University with Johnson, called it “a very sad moment.”

‘It’s Who We Are’

“It’s more than about a promise, it’s about who we are as a country,” Cameron told journalists. “We could afford to keep this promise and by keeping that promise we’d be showing that Britain is a leader and that Britain is a compassionate country.”

But for Johnson’s administration it was about making a point on the future direction of a party that has long been at war with itself on what it stands for, from the crisis over Brexit to its adherence to fiscal discipline. It’s also something that appeals to voters: Some 60% of Britons thinks the government spends too much on foreign aid, according to the pollster YouGov.

Sunak said the aid commitment was “difficult to justify” to the British people. “Obviously we’re going to have to make very difficult decisions,” Treasury Minister John Glen said in a Bloomberg TV interview.

He has a point in that there are huge debts to pay with the economy mired in what’s likely to be its deepest recession since an extraordinarily cold snap in 1709 known as the Great Frost. But behind the scenes, the battle over a few billion pounds became about ideology more than anything else.

Foreign Secretary Dominic Raab told his officials the decision was difficult and was taken with “regret,” according to a memo to Foreign Office staff seen by Bloomberg. He and Sunak are two towering figure in the current Tory party, both seen as potential future prime ministers.

Junior Foreign Office minister Liz Sugg resigned, telling the prime minister it was “fundamentally wrong” to cut aid spending. A person close to her said that while Raab was not blindsided by the announcement, it was Johnson and Sunak who made a final decision and on the basis of politics, not economics.

Foreign aid totaled 15.2 billion pounds last year, and because it’s linked to the size of the economy, it was due to fall this year anyway.

Even the spiritual leader of the country’s Anglicans, who tends to stay out of politics, took a stand. Archbishop of Canterbury Justin Welby, called the cut “shameful” and urged lawmakers to block it.

In the House of Commons, several former Tory ministers aired their grievances, saying the U.K. would lose influence at a time when it was making the case for “Global Britain,” in a world beyond Brexit and with a new U.S. president coming into the White House.

Former Health Secretary Jeremy Hunt, who was defeated by Johnson in a leadership contest last year, said “to cut our aid budget by a third in a year when millions more will fall into extreme poverty will make not just them poorer but us poorer in the eyes of the world.”

Former Defense Minister Tobias Ellwood said the plan will “leave vacuums in some of the poorest parts of the world,” while former International Development Secretary Andrew Mitchell warned the cut will cause “100,000 preventable deaths.”

“I am ashamed and cannot support this choice,” former Development Minister Harriett Baldwin said by phone.

With the government planning to legislate for the change, there’s now the potential for a major showdown with Tory rebels over the issue, who could threaten to defeat the government in a parliamentary vote.

It will now be up to Johnson to stand his ground and face down, not for the first time, a rebellion.

©2020 Bloomberg L.P.