Rushanara Ali MP urges Prime Minister to honour historic G20 commitment to reduce the cost of remittances with action

One year on from her Save Remittance Giving campaign, Rushanara Ali MP challenged the Prime Minister to follow through on historic G20 commitments on remittance giving with immediate action.

The most recent discussions by world leaders revolved around progress made on G20 commitments to reduce the cost of remittance giving across the world. Such commitments would:

  • reduce the average cost of transferring remittances from 10 per cent to 5 per cent;
  • release an additional $15 billion per year for recipient families across the world, the vast majority of whom live in some of the poorest areas in the world.
  • ensure flows of remittance giving remain stable, especially to parts of the world with under-developing banking systems.

Focusing her remarks on the importance of remittance giving to parts of the world such as Somalia, Rushanara said:

“The Save Remittance Giving Campaign, which is supported by MPs, 120,000 British people and Olympic gold medallist Mo Farah, called for a reduction in remittance costs. I very much welcome the G20 commitment to reduce it from 10% to 5% because remittance makes a big contribution to development, including economic development. Can the Prime Minister update us on when the money transfer service scheme will be implemented because countries such as Somalia are suffering, as there are no banking systems and no effective ways of getting money in if banks stop facilities as has happened, so we need urgent action?”

The Prime Minister acknowledged that ‘more needs to be done’ in his reply:

“The hon. Lady is absolutely right that remittances are a critical source of income for poor people in the poorest countries and they really do help with the reduction of poverty. Action by the G20 has been a success, resulting in the decrease of the G20 average cost from around 10% to 7.5%, but more needs to be done. Of course the problem she highlights, where remittances are particularly difficult for some countries such as Somalia, relates to the issues I dealt with in the previous question about the need to build capacity in these countries, including through honest banks and honest Governments, so that people can get the remittances they deserve.”

Following the Prime Minister’s statement, Rushanara said:

“I welcome the continued by the G20 on reducing the cost of remittance giving which accounts for some £430billion this year and makes a massive contribution to poverty alleviation as well as economic development. It is vital that as well as reducing the cost of remittance giving, the World Bank speeds up its work on developing innovative mechanisms to help enable people to transfer money in a secure way to some of the poorest countries in the world.”

Remittance giving remains a vital lifeline of aid and economic support which sees around £15 billion per year flow from families in the UK to some of the poorest countries in the world. The system of remittance giving in the UK came under threat in 2013 after Barclays Bank’s announced the decision to terminate banking facilities for community-led remittance businesses in the UK in June 2013.  

Rushanara led the successful campaign which mobilised local people, community-led businesses and major NGOs such as Oxfam. Double-Olympic medallist, Mo Farah, whose charitable foundation in Somalia was affected, also gave his backing to the campaign, which culminated in Rushanara delivering a petition with 25,000 signatures to 10 Downing Street calling for urgent action on the issue. To date, the campaign has attracted in excess of 122,000 signatures across the UK. In September 2014, Rushanara secured a debate in Parliament examining the Government’s progress on the issue. As a result of this campaign, the World Bank and UK government with other international partners established the Action Group on Cross-border Remittances which is charged with developing a solution to enable people to send remittances in a safe and cost effective way.

Do you like this post?

The Labour Party will place cookies on your computer to help us make this website better.

Please read this to review the updates about which cookies we use and what information we collect on our site.

To find out more about these cookies, see our privacy notice. Use of this site confirms your acceptance of these cookies.