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Liz Truss accused of turning back on world’s poorest with new ‘aid for trade’ plan

Liz Truss accused of turning back on world’s poorest with new ‘aid for trade’ plan
‘Depressing’ strategy mirrors China’s use of aid as a tool of international influence, critics fear

Liz Truss has unveiled a major shake-up that will link overseas aid to expanding trade, triggering accusations that the UK is turning its back on the world’s poorest.

Britain will also direct more of its shrunken aid pot to bilateral projects, rather than through international bodies – prompting fears that aid will be slower to arrive after emergencies.

The foreign secretary is arguing that “trade helps countries to grow their economies, raise incomes, create jobs and lift themselves out of poverty”.

But Sarah Champion, the chair of the Commons international development committee, attacked what she said was a “depressing” intention to copy China’s much-criticised “aid for trade” approach.

“I fear that adds up to a double whammy against the global poor,” she said of the government’s long-delayed Strategy for International Development.

“Aid for trade is dangerous. It can distort the core, legally stipulated purpose of our assistance – which is to support the poorest and most vulnerable, whether in the countries of sub-Saharan Africa or in Ukraine. Supporting the poorest in the world should not be conditional on a trade deal or agreeing to investment partnerships.”

The 32-page document mentions trade on no fewer than 27 occasions – three times the number of references to poverty, which is mentioned on nine occasions.

And it warns that the aid spending will only return to 0.7 per cent of national income – after Boris Johnson broke a manifesto pledge by slashing it to 0.5 per cent – “once the fiscal situation allows”.

Tim Cole, executive director of the ONE anti-poverty campaign, warned: “Global threats such as pandemics, the climate crisis or the current food-security crisis demand global responses – multilateral organisations are often best-placed to deliver these.

“As the government’s own analysis shows, they deliver more bang for buck, reducing admin costs and reaching places we often can’t ourselves.”

Stephanie Draper, chief executive of the Bond organisation of aid groups, said: “The UK has missed a golden opportunity to properly rethink its role on the world stage – and risks abandoning those most in need.”

The strategy, which promises “transformative trade”, will:

  • Deliver more “honest, reliable investment through British Investment Partnerships” – the aid finance arm focusing on private-sector investment
  • Spend three-quarters of the Foreign Office’s share of the aid budget bilaterally – rather than through the United Nations and other international organisations
  • Give ambassadors and high commissioners greater authority to approve spending – reducing the time to approve a business case from “many months to less than six weeks”

Ms Truss insisted the UK would not copy “malign actors” by using its aid budget – which has been slashed by £4bn a year – as “a form of economic coercion and political power”.

But she defended the switch, saying: “In an increasingly geopolitical world, we must use development as a key part of our foreign policy.”

A Foreign Ofice spokesperson added: “This strategy is not about providing ‘tied aid’ or aid in return for trade.”