No ‘financial commitments’ in new UK development plan, minister warns

The United Kingdom’s new blueprint for international development will make no fresh “financial commitments” to avoid a “fight” with its Treasury department, its author has cautioned. Andrew Mitchell, the development minister, has hailed the planned November document as an opportunity to reignite progress towards meeting the failing Sustainable Development Goals and the climate emergency. But, in an interview with Devex, Mitchell dampened hopes that the new strategy will trigger either a boost to the U.K.’s shrunken aid budget or its direct contributions to advance the Bridgetown agenda. “We just won’t be getting into money — we won’t be making specific financial commitments,” Mitchell said, speaking at the 78th United Nations General Assembly in New York. “We don’t want to get into a fight over money either with the other [political] parties or the Treasury — it’s much better to park the issue of money. The white paper [the strategy document] will not contain spending pledges.” In recent months, the U.K. government has come under pressure to donate more Special Drawing Rights to low-income nations or boost the World Bank’s balance sheet with funds returned post-Brexit from the European Investment Bank, to lead the way on reform. Notably, U.S. President Joe Biden used his UNGA speech to pledge action to unlock new lending capacity for the World Bank and the IMF to provide financing for investments in climate mitigation and public health. Mitchell has spoken enthusiastically about the Bridgetown agenda, an initiative to reform the world's multilateral finance institutions to boost lending to the global south, but U.K. Prime Minister Rishi Sunak — who is expected to unveil the strategy on Nov. 20 — has said little and skipped France’s Summit for a New Global Financing Pact in June.​​ The development minister argued the U.K. is already proving its commitment to the Bridgetown agenda, saying: “We really, really are. Look at the billions of pounds of guarantees we are using, principally with the African Development Bank but also with the World Bank and the Asian Development Bank.” “That feeds directly through to the Bridgetown agenda and [Barbados Prime Minister] Mia Mottley’s call for us to turn billions of pounds of climate finance into trillions,” he added. Mitchell said the U.K. is “already deploying our SDRs” and argued “billions of dollars” could be released by banks changing capital risk ratios and “sweating balance sheets” further. He said the new blueprint will explore better debt relief — another key Bridgetown demand — adding: “We need to do a lot more work on how we handle debt relief for countries that get into trouble.” The U.K.’s aid budget is stuck at 0.5% of gross national income for the foreseeable future, having been cut from 0.7% three years ago, but Mitchell pointed out he had already announced a near-doubling of bilateral spending next year, with Africa the priority. And he insisted: “This is going to be Britain’s big contribution, later this year, to those twin objectives of trying to get the SDGs back on track and also increasing substantially climate finance.” Mitchell also agreed his government will have to stop diverting billions from its aid budget to housing refugees in the U.K. if — as expected — the Organisation for Economic Co-operation and Development rules a crackdown on refugees breaches its Development Assistance Committee rules. Some in the U.K. have questioned if the DAC guidance can be swerved, but Mitchell insisted: “The rules are the rules are the rules. It’s not a matter for ministerial discretion.” Asked if he agreed with the U.K.’s aid watchdog, the Independent Commission for Aid Impact, that a new Illegal Migration Act is a rule breach, Mitchell replied: “The ICAI is brilliant and it produces very good reports. It is the taxpayers’ friend — the ICAI is there as a watchdog to ensure that ministers and officials can’t sweep things under the carpet.” The money “reverts” to the main aid budget in those circumstances, Mitchell argued, potentially releasing billions of pounds for projects overseas, easing the pain of many years of cuts.