What the 2021 Budget Means for Global Britain
Author: Ryan Baldry, Communications Manager
This year’s Budget and Spending Review from the Chancellor Rishi Sunak was always going to be an interesting one to follow. As Chancellor, this will have been the third financial statement he has given but arguably one of the first where we see what kind of policies will be making up the Global Britain agenda. So what does the Budget mean for the UK on the world stage?
On Development.
The headline news was that the Chancellor reconfirmed the Government’s commitment to returning the UK’s ODA spending to 0.7% of GDP when fiscally possible. This is now predicted to be returned by 2024/25 - the end of the current Parliament. This is important not only for the UK’s reputation on the world stage but also an important message to send out as the UK brings together world leaders for the COP26 Summit in Glasgow.
The Budget provides the FCDO with £11 billion of Overseas Development Assistance (ODA), including doubling the international climate finance to £11.6bn between 2021-22 and 2025-26 and £430 million to the Global Partnership for Education to help to educate young people, particularly for girls which, according to the FCDO, is the UK’s largest contribution. This will mean that many more girls receive a quality education, with the aim of achieving the global target to get 40 million girls into school and have 20 million more girls reading by the age of 10.
The Budget also provides £2.4 billion over the next three years to unlock finance for green growth, including a new strategic initiative to support clean and green infrastructure through UK-backed investment, loans and expertise.
On Defence.
The previous Budget set out an increase in defence spending of over £24 billion in cash terms over the next four years against the 2020-21 budget. The 2021 Budget reinforces the UK’s position as Europe’s largest spender and second largest in the alliance by continuing to meet and exceed the set NATO target of 2% of GDP on defence spending and investment. This sustained investment in Defence supports the naval ship building pipeline, renewing Trident and over £6.6 billion in Defence R&D.
On Diplomacy.
2021 has been a year where the UK has been front and centre on the world stage. From chairing the G7, to hosting the COP26 Summit and this Budget continues to build on Government commitments and leadership in this area. According to the Treasury, the Budget ensures that “the UK will support more than £1 billion of activities in 2021-22 as part of the government’s flagship, five-year £11.6 billion International Climate Finance target and £3 billion target to protect and restore nature and biodiversity. The government will spend a minimum of £6.6 billion on International Climate Finance over the SR21 period and at least £1.7 billion on nature and biodiversity.”
Alongside investment in COP priorities, the Chancellor was also keen to highlight how the UK will become a significant player in R&D funding by increasing public funding to £20 billion. The Budget also increases R&D spending focused on solving problems faced by developing countries from £0.6 billion in 2021-22 to £1 billion in 2024-25, including for research tackling global health and climate threats.
Finally, the Chancellor announced that funding will be made available for the UK’s commitment to welcome up to 20,000 Afghan citizens over the coming years, including £20,520 per person for Local Authorities who settle Afghan families, with an additional £17 million available to top up housing costs and an extra £20 million pot of flexible funding. Those who have assisted the UK efforts in Afghanistan and vulnerable people will be prioritised.
