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UK aid risks not helping world's poorest because ministers have prioritised boosting trade, MPs warn

Penny Mordaunt has claimed that boosting trade between the UK and developing countries is 'win win': DFID
Penny Mordaunt has claimed that boosting trade between the UK and developing countries is 'win win': DFID

UK aid spending risks disadvantaging the poorest people in the world because it is too heavily focused on boosting trade and investment in Britain, a committee of MPs has warned.

The Commons International Development Committee said the government's strategy for promoting economic growth in poorer countries had placed "insufficient focus" on helping those most in need.

MPs accused ministers of having failed to prioritise "poverty reduction and on helping the very poorest and most vulnerable".

As a result, they said, UK policy risks disadvantaging some of the most vulnerable people in developing countries, including children, women and people with disabilities,

The committee chair, Labour MP Stephen Twigg, suggested ministers were prioritising “profit margins” over alleviating poverty.

Penny Mordaunt, the international development secretary, has promised a “bold, Brexit-ready” plan to boost trade between the UK and developing countries, which she claimed was “win-win”.

The Department for International Development's (DFID) Economic Development Strategy seeks to show how the UK will boost trade links with poorer countries to help them grow their economies.

The committee said it recognised the importance of boosting trade but that this needed to be matched with pursuing the “best and fairest” policy for the poorest people in the world to ensure vulnerable people do not become the "losers".

In their report, the MPs said concerns centred on "an insufficient focus on poverty reduction and on helping the very poorest and most vulnerable".

They added: "Although the Secretary of State refers to the 'boost' in trade and investment with developing countries as 'a clear win-win for Britain and the world’s poorest, the Independent Commission for Aid Impact have highlighted that economic growth produces winners and losers.

"It is acceptable for UK companies and the UK government to have ‘wins’ in trade and investment with least developed countries as long as it can be guaranteed that the most marginalised in developing countries do not become the resulting ‘losers’."

The committee said a tailored approach to each country was needed to ensure increased trade is benefiting those who most need support.

It said: "The Economic Development Strategy cannot be a one-size-fits-all. It needs to avoid becoming either a set of bland aspirations or a straitjacket. This will be achieved by careful calibration to fit with, and meet, the specific demands and priorities of each individual country programme and the characteristics and ambitions of each developing country.

"Overall, we recommend that DFID maintains its focus on what will have the best and most equitable results for the poorest in the world and how trade and investment can best contribute to this; trade with the UK, including opportunities arising from exiting the EU; and trade with middle income countries, including opportunities promoted by the impact of the Prosperity Fund."

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The committee has previously raised concerns that the poorest people in developing countries could lose out because of DFID's emphasis on trade and investment.

Mr Twigg said: “DFID believes that more economic growth leads to fewer people in poverty. While it’s acceptable for UK companies and the government to score ‘wins’ in trade and investment in the world’s least developed countries, this is not a trade-off. It’s not just profit margins that count.

“We welcome the fact that the department lists the reduction of poverty as a key ideal in economic development, but evidence to our inquiry suggested that a strategy heavily weighted towards trade alone can actively disadvantage the most marginalised groups.

"Girls and women, disabled and young people will lose out unless DFID undertakes to protect them. The upcoming Global Disability Summit presents an opportunity to focus strategy on how to reach people with disabilities."

The Department for International Development has been contacted for comment.