Overseas Aid: Britain 1948

David Cameron’s coalition government set a target for overseas aid in 2010, which is the central motif of his government’s humanitarian policy. His plan is to budget 0.7% of GDP annually and maintain that in a growing economy. Consequently the cash element of British overseas aid increases as the British economy grows: the aid recipients sharing British prosperity. Overseas aid is not subject to the ‘Age of Austerity’ of chancellor George Osborne. It’s a splendid, laudable and intelligent recognition of the wealth of Britain and the needs of those suffering humanitarian disasters. This policy has been given a hostile reception by many MPs, the press and some voters. Sadly they have forgotten British history. This post wishes to remedy that ignorance.

1945 brought victory in Europe and confirmed British bankruptcy. The Second World War consumed the wealth of the nation, Economically we were helpless. Western Europe was in an even worse position. Economies wrecked, infra- structure ruined and there was the human tragedy of tens of millions of displaced people. This cataclysmic scenario was met with huge generosity by the USA via the so- called Marshall Plan (European Recovery Plan, 1947- 52). Marshall announced, “Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos… It would be neither efficacious for the (US) Government to draw up unilaterally a program designed to place Europe on its feet economically. This is the business of Europe*.”

Britain was the principal beneficiary. To the horror of the US, the British people voted in the Labour Party with a clear mandate to redistribute wealth and opportunity via socialism in the 1945 general election. Despite this being anathema to the US, humanitarian aid was forthcoming. This generosity extended to Germany. Germany, three years earlier had had an odious government, which resulted in the Nuremberg War Trials (1945-9) yet the Marshall Plan extended to them too. This is humanitarian aid at its noblest.

The Marshall Plan wasn’t ‘crumbs’ of a rich man’s table. It amounted to $30.56bn** which, in GDP terms, amounts to an annual 1% of the (1948) US economy. Unsurprisingly this generated a great deal of hostility from some Americans***. Nazi Germany had been crushed yet President Truman was proposing a reconstruction programme. Truman took enormous political risks but replied to criticism by saying, “I’m not doing this for credit…I’m doing it because it’s necessary to be done…” America was driven by moral imperatives not political calculation. Even Richard Nixon, a rabid right- winger, concurred with this stance. Nixon too faced hostility from his ultra- right- wing constituency but actively promoted the policy, winning over his opponents.

The 2010 declaration by Cameron’s coalition government has built on the British experiences of the Marshall Plan. Our principal negotiator, John Maynard Keynes, in 1947 was virtually telling the Americans that the British were entitled to aid. What would British public opinion say if a group of African countries came to Britain and declared that they were entitled to aid! At 0.7% of GDP, our overseas aid programme isn’t particularly ambitious, but in a an era of economic difficulty, it’s a start. Overseas aid is a moral imperative and I’m pleased that the British government is making some efforts to fulfil that duty.

*George C Marshall speech at Harvard University 5th June 1947
**Correcting for inflation this equates to $302.23bn in 2014 money
***E.g Former President Hoover who wrote to Truman, “Whether the American economy can stand the burden of $9bn of relief in this 15 months must arouse great anxiety.” (18th Jan 1948). Senator Jenner said, “I would resolutely oppose the doctrine of welfare both at home and abroad.” (3rd Feb 1948)


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