Yesterday, the Taxpayers Alliance teamed up with former International Development Secretary Priti Patel MP to tell us that that there’s a problem with British aid. We agree – and Patel herself bears more than her fair share of responsibility.
What’s more, if Patel gets her way (and this is clearly part of the coming Tory leadership contest), we will be returning to the ‘bad old days’ when aid was simply a foreign policy tool, devoted to promoting the interests of British big business, the military and the City of London.
The trajectory which aid spending has taken over the last 15 years was already problematic – less about helping governments build quality public services around the world, and more about lining the pockets of businesses and investors here. But under Patel’s leadership, such a sharp turn was taken towards aiding the British elite, that many former aid advocates started wondering whether they should start a campaign to reduce aid spending. Here’s Priti’s top 5 disastrous development decisions:
1 She doubled the amount of aid money that can be thrown into financial markets
Patel passed a law in parliament which enabled a quadrupling of aid money which our government could channel into DfID’s private equity arm, the CDC group, from £1.5 billion to £6 billion (and specified that the limit could be raised again to £12 billion without the need for further primary regulation!). This is a huge problem, because CDC Group is a deeply controversial body which uses private equity funds to throw money at deeply questionable projects like luxury hotels, shopping malls and private schools and hospitals.
Building shopping malls and luxury hotels across Asia and Africa might bring a good return on investment for the CDC Group, but it certainly isn’t meeting basic development goals like providing access to basic public services like education and healthcare. In essence Patel’s Act was the privatisation of huge amounts of the UK’s overseas aid budget.
2 She tried to tie aid money to getting countries to sign trade deals with Britain
Aid must legally be spent on reducing global poverty. However, Patel repeatedly suggested she would spend aid in “the national interest”, in particular to help “open the door” to post-Brexit trade deals and to win friends at the World Trade Organisation (WTO).
This attempts to return us to the bad old days when aid was used primarily to help Britain’s foreign policy interest around the world, often doing nothing to fight poverty in the countries in which it was used. As Lib Dem development spokesperson Baroness Sheehan said, “The primary purpose of development aid should be lifting the poorest people in the world out of poverty, not serving the government’s post-Brexit trade strategy.”
3 She used aid to secure the profits of the City of London
Priti Patel pioneered the use of aid to position the City of London as the premier financial hub for developing economies. As minister, she was invited to open the London Stock Exchange one morning in March 2017 and to use the opportunity to announce a partnership with the financial sector to “generate much needed business investment in developing countries”. Patel urged “the City of London to rise to the challenge of becoming the global financial centre for the developing world”.
Not only does this strategy promote British interests over the need to reduce poverty, but it also threatens to recreate Britain’s highly unstable, unequal model of ‘finance first’ economics in countries which already suffer from too much debt and too much inequality. Investment can indeed be useful – but only if governments can regulate, tax and control it. The City of London, however, is known worldwide for its low regulation, low tax status. The last thing impoverished governments need is more unregulated finance, sucking wealth out of their countries.
4 She encouraged the use of aid to help big business
The use of aid to support big business has been going on for over a decade now. The idea is that public money can be used to ‘leverage’ private investment into developing countries. The reality, is that all too often aid money is used simply to support privatisation schemes, and open up new markets for likes of Nestle, Mars, Syngenta and Unilever across Africa. This is good for those businesses, but all too often disastrous for fighting poverty, and confuses ‘development’ with ‘capitalism’.
Patel launched a brand new strategy to embed these ideas more firmly into DfID’s work, helping create ‘positive business climates’ to make “it easier for companies - including from the UK - to enter and invest in markets of the future”. Read: get African governments to do what big business wants them to do.
5 She tried to channel aid money to the Israeli Army
After 14 secret and inappropriate meetings with Israeli officials, Patel raised the idea of using UK aid to help fund the Israeli army’s “humanitarian” work in the illegally occupied Golan Heights.
Thankfully, Patel’s activity was cut short and she was forced from office by Theresa May in November 2017. But in many ways her work continues in the increasing militarisation of British aid through the Conflict, Stability and Security Fund (CSSF) through which aid has been used to fund military and counter-terrorism projects in a manner which is extremely opaque.
The mistake many have made since Labour established the Department for International Development in 1997 is to try to make aid ‘non-controversial’ and ‘cross party’. But development is always political. While the Right of the political spectrum sees ‘development’ as synonymous with ‘more capitalism’, the Left must make clear that aid should be part of redistributing wealth globally, and development is at its core about freeing societies from domination by international capital markets and big business.
The only way to save aid from ‘death by a thousand cuts’ under this government, is to rally around this more radical vision of development.