Leaked letter shows UK coalition split over aid target - Reuters

Tue May 17, 2011 1:47pm EDT

* Defence secretary opposes plan to enact U.N. aid target

* Aid budget to rise while defence faces sharp cuts

* Cameron says government will stick to aid pledge

(Adds Cameron comments paragraphs 7-9)

By Adrian Croft

LONDON, May 17 (Reuters) - British Defence Secretary Liam Fox has revealed a split within the ruling coalition by opposing plans to commit to spend billions of pounds more on overseas aid, according to a leaked letter published on Tuesday.

In a letter to Prime Minister David Cameron carried by The Times newspaper, Fox disagreed with coalition plans to put into law a promise to increase foreign aid to 0.7 percent of Britain's national income by 2013, up from 0.5 percent in 2009.

That would increase Britain's overseas aid budget by a third to 11.4 billion pounds ($18.49 billion) over the coalition's expected five-year term at a time when spending in most other areas, including defence, is being slashed to curb a huge budget deficit.

The Conservative and Liberal Democrat parties, which forged a coalition after an indecisive election last year, committed in their founding agreement to reach the United Nations' target of spending 0.7 percent of national income on overseas aid from 2013 and to "enshrine this commitment in law."

"I cannot support the proposal in its current form," Fox said in the leaked letter.

"The bill could limit (the government's) ability to change its mind about the pace at which it reaches the target in order to direct more resources toward other activities ...," he said.

CAMERON PLEDGE

Questioned about Fox's letter by a parliamentary committee, Cameron said the government was committed to reaching the 0.7 percent aid target by 2013 and would propose legislation setting out that goal.

Cameron acknowledged that increasing overseas aid was a "difficult commitment to make at a time when we are making reductions elsewhere."

"I profoundly think it is the right thing to do because we have a duty to the poorest in our world even at times of hardship at home," he said.

The 0.7 percent aid target was first set by the previous Labour administration. But polls show many Britons disagree with protecting foreign aid when domestic services are being cut.

Fox lost out to Cameron in a 2005 Conservative Party leadership contest and is still believed to nurse leadership ambitions. His letter will resonate with some Conservative lawmakers who oppose increasing overseas aid in austere times.

Britain's defence ministry has escaped more lightly than other departments, but Fox has still been forced to make sharp cuts in equipment and personnel to achieve an eight percent real term reduction in defence spending over four years.

Even though British armed forces are heavily committed in Libya and Afghanistan, news reports this week said the Ministry of Defence is searching for billions of pounds of extra savings.

A source close to Fox told Reuters: "The defence secretary fully supports the principle of a 0.7 percent target on international aid. The issue is simply how best to reflect this in law."

The Ministry of Defence declined to comment on the letter. (Reporting by Adrian Croft; Editing by Peter Graff)