Before it was elected to power last year, the U.K. Labour Party promised to rebuild the United Kingdom’s “degraded” international development offer — only to shock its members of Parliament and supporters by slashing the aid budget to a 26-year low as a share of gross national income, triggering the resignation of the aid minister. This week, the party held its first conference since that upheaval. Does the development minister, Jenny Chapman, have a plan to get back on track?
1) A revival of U.K. development rests on persuading corporate giants to splash their cash.
The aid budget will be £6.5 billion lower than planned by 2028, so private finance is seen as the only hope for filling that vast gap. Chapman namechecked the investment banks HSBC, Lloyds, and J.P. Morgan, as well as insurance giant Aviva, as big companies “interested in this investment” — but nervous about shareholder reaction because “they don’t know how to calculate the risks.” The government is providing data and help with building relationships in emerging markets to enable firms to “convince our boards that this is the right activity for us to be in,” the minister explained. However, Chapman admitted the plan rests on stimulating private investment “on a scale we’ve never managed before.” And what about the lowest-income countries, with the least attractive markets?
About the author
Rob Merrick
Rob Merrick is the U.K. Correspondent for Devex, covering FCDO and British aid. He reported on all the key events in British politics of the past 25 years from Westminster, including the financial crash, the Brexit fallout, the "Partygate" scandal, and the departures of Boris Johnson and Liz Truss. Rob has worked for The Independent and the Press Association and is a regular commentator on TV and radio. He can be reached at rob.merrick@devex.com.
