By: Rushanara Ali MP
Bethnal Green and Bow MP Rushanara Ali writes about her recent debate on remittance giving and money transfer organisations.
Remittance giving saves lives. Money sent back from the UK to all corners of the world provides vital resources to buy food, medicine and other basic essentials – often for those most in need. Often in small but hugely significant amounts, remittance flows from the UK total around £15bn – and around $530bn worldwide – a sum greater than all the world’s development aid budget put together. Alongside the need for safeguarding the 0.7% of our national income to overseas development aid, remittance is a vital tool in the UK and international community’s response to alleviating poverty in some of the poorest parts of the world.
Behind these figures lie innumerable stories of families working hard to support loved ones in areas of the world which needs our support most. When we talk of remittance giving, we are talking about building schools in Bangladesh, or hospitals Somaliland; we are talking about the resources needed to help keep whole communities out of poverty. People in my constituency and across the UK see remitting money to family and friends as a fundamental duty, and have been giving for years. They send money to all corners of the globe – to the Indian subcontinent and some of the poorest parts of Africa. For as long as they can remember, they have used community-led agencies with networks of agents on the ground in target countries to ensure their money is sent safely and securely.
Yet this vital lifeline is now under immense threat. Last year, Barclays Bank announced its decision to terminate all banking facilities for these agencies, a decision which could have devastating consequences for the whole remittance sector. The rationale for this decision was – in the words of the bank itself – that around 1% of firms could not be properly investigated and pass due diligence checks. Yet this decision ignored the 99% of money transfer businesses which have been operating in this sector for decades.
That was the reason I led the Save Remittance Giving campaign in 2013, delivering a petition to 10 Downing Street alongside 46 other Labour MPs with over 25,000 signatures urging the Government to take urgent action to remedy the situation. To date, 122,000 people have backed this campaign. This strong coalition ranged from families in my constituency, to small and medium-sized community-based transfer businesses, to leading figures in affected communities. The double-Olympic champion, Mo Farah, backed our campaign, as did Oxfam and other major players.
That was August 2013. After our pressure, the Government created the Action Group for Cross-Border Remittances, designed to create a remittance-giving system which would be “robust, effective and safe”. This work is vital. The Group’s remit spans several Government departments. Not only do we need the issue of remittance giving sorted from a humanitarian standpoint, we also need the Government to act to protect our security.
Quite simply, we need proper safeguards to ensure people can send remittance safely. Action is urgently needed by government to ensure this happens and we avoid the possibility remittance giving is driven underground – with all the associate problems that would generate. I welcomed the Action Group’s discussion of setting up a “safe corridor” of remittances to Somalia, for example. Yet we need to see this pilot – the start of which has been postponed now until January 2015 – achieve real results. When we know that some 50% of Somalia’s gross national income comes from remittances depends on remittances, it is clear that the stakes could not be higher. What is also needed are tangible signs of progress and clear advice and guidance from the Treasury and HMRC. Time is passing by and there is a real danger of drifting into a position where existing providers are forced to close.
This could be a once-in-a-lifetime possibility for the Government to provide a real opportunity to save millions of lives, promote economic development in communities in developing countries and improve our own security.
Rushanara Ali is the MP for Bethnal Green and Bow, and Shadow Minister for Education.
This article was published on Dods PoliticsHome.