UK considers breaking £2B aid promise to World Bank

The UK is considering scaling back its nearly £2 billion ($2.7 billion) commitment to a World Bank fund for developing nations, according to people familiar with official plans, in a move that could see it slash aid alongside Donald Trump’s White House, Report informs via Bloomberg.

The Labour government pledged £1.98 billion in November to the International Development Association, a unit of the World Bank that provides grants and low interest loans to the poorest countries. However, three months later ministers changed tack, raiding the UK’s foreign aid budget to pay for higher military spending as the US started restricting support for Ukraine’s defense against Russia.

As a result, Britain is looking into knocking hundreds of millions of pounds off its contributions to the IDA. Earlier this month, Stephen Doughty, a minister in the Foreign, Commonwealth and Development Office, told parliament in a written statement that the potential impact of the aid cuts on the IDA were “being worked through.”

Paring back Britain’s commitment to the World Bank would represent a sharp break from the past. The Labour government of 1997 to 2010 was at one point the biggest IDA donor as former Chancellor of the Exchequer Gordon Brown made development one of the party’s key priorities.

Nearly $24 billion was committed to the IDA by donor countries just a few months ago, but the final figure is now in doubt. The US is expected to reduce its $4 billion pledge, made under former President Joe Biden, with Trump ordering a review of the country’s relationship with global institutions such as the World Bank. Last week, Ireland and Italy confirmed their pledges to the IDA.

Two World Bank officials said they were unaware that the UK was reconsidering its commitment. An FCDO spokesperson declined to comment.

The UK’s £1.98 billion IDA commitment, which would be disbursed over three years, was a 40% increase on the previous pledge. At the time, then-development minister Anneliese Dodds said it showed “Britain is back with a voice on the world stage,” but Dodds resigned in February in protest at the aid cuts. She was replaced by Jenny Chapman, a long-standing ally of Prime Minister Keir Starmer.

Chapman has put the entire budget under urgent review and even priorities such as the IDA may be unable to escape budget cuts, people said.