USAID Funding Pause

Debate between Alice Macdonald and Wera Hobhouse

Tuesday 10th June 2025 Westminster Hall

[Alice Macdonald]

I fully agree. We have had programmes, such as the Equality Fund, where we have been clear on the importance of women’s rights-led organisations. I have met many women’s rights defenders of all ages who are doing amazing work. We must continue to back them and listen to them, because they know what is best in the context in which they work.

I am sure other Members will speak to the importance of investing in multilateral efforts, such as Gavi, the Vaccine Alliance, and the Global Fund, which I also want to back. Those funds have a proven return on investment for the UK taxpayer. The World Bank’s International Development Association fund and the African Development Fund also have important roles to play in alleviating poverty, and we have been big backers of those in the past.

As co-chair of the all-party parliamentary group on the United Nations, I would also like to underline the value of the United Nations. There is, of course, space for reform, and I am sure we are all aware of some of the flaws in the system, but it is a unique vehicle for coming together as a world to tackle some of the biggest challenges we face and to increase the value of our aid.

We must also look beyond aid to leverage other forms of financing, many of which we could leverage without cost to the taxpayer. As the Independent Commission for Aid Impact pointed out, foreign direct investment, remittances and other forms dwarf the overall aid budget, so I hope the UK will continue to lead on innovative financing. That includes how we can recycle International Monetary Fund special drawing rights. In 2020, we received an allocation of £19 billion from the IMF as part of the response to covid. We could re-channel that to provide zero-interest finance to low-income countries or through multilateral development banks. We could also put idle foreign reserves into action. A small portion of the UK’s largely idle exchange equalisation account could be used to support low-income countries.

The last Labour Government led on debt relief. I was proud of what we did at Gleneagles to lead those efforts. We must do so again, given that debt payments for low-income countries are at their highest for 30 years, with 32 African countries spending more on servicing their external debt than on healthcare. Given that 90% of low-income countries’ debt is governed by English law, the UK could do a lot to bring private creditors to the table to get the best possible deals. I hope the Minister can set out what we are doing in that regard, especially as we approach the conference on financing for development in Seville in just a few weeks’ time.

Finally, more broadly, we need a reset on aid and development. Indeed, the Foreign Secretary has been clear that we want to move to an approach founded on partnership, not paternalism, which puts the countries that have traditionally been recipients of aid in the driving seat. We have seen cases in the past. Indonesia, for example, used to be a recipient of Gavi funding but is now giving money itself. We need to look at success stories and say why they matter not only for tackling poverty but for increasing prosperity and tackling inequality, including in our own country. I see our development work as insurance; it is a downpayment for the long term to tackle some of the upstream drivers of migration.

I hope that we will continue to lead internationally, as we are domestically, on using science, innovation and technology to its best effect. Innovators, such as the John Innes Centre in the constituency next to mine, are doing amazing work to tackle hunger and climate change, and we must back those efforts to look at how we can support developing countries abroad.

We all know that tough decisions are having to be made in the extraordinary times in which we live, but I know that this Government are internationalists. I believe that our party will continue to lead and use all the levers at our disposal to tackle poverty and inequality wherever they are found.

[Wera Hobhouse (in the Chair)]

I remind Members to stick to the time limit as much as they can.