THERESA BITES THE BULLET

Tories WILL keep 0.7% aid law — but it may include defence Osborne’s no tax rises gimmick could be dumped ...and PM won’t commit to pension triple lock

THERESA May yesterday made clear she will not shirk difficult decisions about taxes and pensions as she vowed to keep David Cameron’s foreign aid target.

In a move that risks upsetting many Tory supporters, the Prime Minister said the controversial 0.7 per cent aid pledge ‘remains and will remain’.

But she will order a review of how the £13billion budget is spent in a move that could see some of the money go towards defence.

Laying the ground for the Tory election manifesto, Mrs May and Chancellor Philip Hammond yesterday said they would not make promises on taxes or pensions that they could not keep.

On a visit to Washington DC, Mr Hammond strongly hinted that the Tories will not repeat pledges made by former chancellor George Osborne not to increase income tax, National Insurance and VAT.

He warned that blanket promises ‘constrain the ability of the Government to manage the economy flexibly’ as he vowed to ‘be different’.

Meanwhile at a campaigning event in her Maidenhead constituency, Mrs May refused to commit to maintaining the pensions ‘triple lock’, which guarantees the state pension will rise in line with earnings, inflation or 2.5 per cent, whichever is the highest.

However she confirmed that the party would keep its commitment to spend 0.7 per cent of national income on overseas aid.

But in an attempt to minimise anger from those Tory MPs who want the target scrapped, the Prime Minister stressed the need to ensure the money is spent ‘in the most effective way’.

Party sources last night revealed aid chiefs have already started looking at whether some money currently spent on defence could be counted as aid.

Answering questions from reporters during a visit to a toothpaste factory, Mrs May said: ‘Let’s be clear, the 0.7 per cent commitment remains and will remain.

‘What we need to do though is to look at how that money is spent and make sure that we are able to spend it in the most effective way.

‘I am very proud of the record we have, of the children around the world who are being educated as a result of what the British Government, the British taxpayer is doing in terms of its international aid.

‘The ability we had to be able to help in the ebola crisis, the work we’ve been doing supporting Syrian refugees, that’s one of the things the UK is providing.

‘So I’m very proud of the record that we have, we maintain that commitment but we have to make sure we’re spending that money as effectively as possible.’

Mrs May had been under increasing pressure to scrap the target, which has seen Britain’s aid budget balloon to more than £13billion while services in this country – such as social care – have faced cuts.

Tory backbenchers say much of the budget is wasted, and point to huge salaries earned by some of the bosses of charities that benefit from foreign aid. Save The Children’s chief executive Helle Thorning-Schmidt receives a pay and pension package worth £246,750 a year. The Government gives the charity millions of pounds a year.

Other controversial funding projects exposed by the Daily Mail include how a pop group dubbed Ethiopia’s Spice Girls received £5.2million in British aid. International Development Secretary Priti Patel earlier this year announced she was stopping the funding.

This newspaper also revealed how more than £1billion of the aid budget has been handed out in cash in the past five years despite warnings of fraud.

A group of leading UK aid organisations, including Save The Children, Oxfam and Christian Aid, last night welcomed Mrs May’s commitment to the 0.7 per cent target. ‘We are delighted that the Prime Minister has recommitted to spending 0.7 per cent of national income on aid and stated her belief that aid changes lives,’ they said.

George Osborne tweeted: ‘Recommitment to 0.7 per cent aid target very welcome. Morally right, strengthens UK influence and was key to creating modern compassionate Conservatives.’ However Tory MP Andrew Bridgen, who has been one of the leading critics of the aid target, last night said he still hoped the mani- festo could include reforms such as stockpiling money that is not used.

He said: ‘Reform is needed. The budget should be based on the size of the economy in the previous year rather than the current year so it can be planned and we do not end up just shovelling money out the door in the last few months.

‘Also I would like to see a contingency fund where money could be placed for natural disasters.

‘If there is not a natural disaster one year, there might be two the next year and we need to be able to respond to that, so we need to roll money in a budget that is earmarked for aid.’

The TaxPayers’ Alliance pressure group also criticised Mrs May’s support for the ‘totally arbitrary and meaningless’ target. Its chief executive, John O’Connell, said: ‘The worst possible way to deliver value when spending taxpayers’ cash is to define the success of a policy by how much you spend rather than what the money actually achieves.’

Former Archbishop of Canterbury Rowan Williams this week described the foreign aid budget as a ‘badge of honour’ for the UK.

Comment – Page 18

‘Worst way to deliver value’