Abu Dhabi, UAEFriday 6 December 2019

Britain’s trade department to use part of aid budget

Controversy brews over the alignment between two branches of government

Britain's Secretary of State for International Trade Liam Fox is seen outside the Cabinet Office in London. Reuters
Britain's Secretary of State for International Trade Liam Fox is seen outside the Cabinet Office in London. Reuters

Britain’s trade department is to be given a slice of the government’s £14 billion (Dh64 million) aid budget.

The UK government is hoping to align development with trade closer together, focusing on helping other countries learn how the UK does trade deals and attracts foreign investment.

“We want to bring development and trade closer together," said trade minister Liam Fox.

The move is controversial with other governmental departments, including the Home Office, Foreign Office and tax office which now spend over a quarter of UK aid compared to 11 percent five years ago.

Mr Fox denied that the government would pursue so-called tied aid that could benefit the UK.

The former Labour government banned aid projects that would benefit Britain in 2001, while the international development committee warned last year that projects risked “being used as a slush fund to pay for developing UK’s diplomatic or trade interests”.

“Pinching aid money from the world's poorest to prop up rich investors is a new low, even for the Tories,” said Dan Carden, Labour's shadow secretary of state for international development.

“As the government desperately chase post-Brexit trade deals, they must rule out raiding the aid budget for anything other than fighting global poverty.”

Britain’s trade department says Nigeria, South Africa, Kenya, Ethiopia, Colombia, Peru, Indonesia and Bangladesh are all scheduled to benefit from funding, and most notably involved in negotiating possible free trade deals after Brexit.

But development charities are concerned about aid spending diverted to help the UK’s post-Brexit strategy.

Bond UK, a collective membership group of international development bodies, criticised the government for shifting “back to the days of tied-aid, where aid serves UK business needs, rather than trade working to help people escape poverty”.

“Trade with the developing world is most effective when it responds to the developing countries priorities, and when it works under fair trade conditions,” said head of policy Claire Godfrey.

According to the World Bank, 650 million people lived in extreme poverty last year. That is projected to fall down to 479 million people by 2030, the majority in Sub-Saharan Africa.

Updated: July 22, 2019 07:38 PM