Another Liam Fox letter leaks, this time registering his concerns about the aid budget

By Tim Montgomerie

The big political story of the day is a leaked letter from Liam Fox to David Cameron (remember the last time this happened?). This new leaked letter from the Defence Secretary (to The Times (£)) concerns the Coalition's commitment to enshrine, into law, the 0.7% of GNP target for aid spending.

Dr Fox is concerned at two aspects of this commitment:

• First, it might restrict the Coalition's ability to "change its mind about the pace at which it reaches the target in order to direct more resources toward other activities or programmes rather than aid".
• Second, the Defence Secretary worries that the government's plan "may present risks to my department’s ability to both report certain priority activities as ODA and, therefore, to receive funding for them from the Conflict Pool."

I have some sympathy for Dr Fox's first point. We should increase the budget in line with the Department for International Development's capacities to spend it wisely. I'm more troubled by his second concern. Aid charities have long worried that the DfID budget might be raided by the MoD for non-humanitarian purposes and Dr Fox's words will renew those worries.

A Fox spokesman told the BBC that "the Defence Secretary fully supports the principle of a 0.7% target on international aid. The issue is simply how best to reflect this in law." That isn't how The Times' frontpage interprets the letter (above) and the newspaper, in a main leader (£), goes on to argue that foreign direct investment does more to help poor nations than aid:

"Countries thrive when barriers to progress are removed, allowing economic freedom, the recognition of property rights, and the rule of law. The developing world is being transformed by FDI (foreign direct investment) not DfID. Chinese and Indian capital being ploughed into Africa promises to do more for the continent than decades of development aid."

I've always believed that it's trade and aid. I've witnessed first hand how British aid is saving lives. Andrew Mitchell is bringing transparency to the UK aid budget so that we can have confidence that our money is going to help the most vulnerable people of the world and not being trousered by corrupt third world politicians. Aid should be increased in line with our ability to monitor its effectiveness but when we can vaccinate ten children against polio for the price of a Starbucks coffee we should do so (£).

The leaked letter will revive speculation about tensions between Number 10 and the Defence Secretary but the Prime Minister knows that Dr Fox speaks for a large number of Conservatives on the aid budget (probably a majority). Number 10 won't back off from its international development commitment but it needs to do a better job of explaining why the 0.7% target matters.