THE gains of decades of anti-poverty campaigning to put people before profit are under threat if the Tory government’s “wrong-headed privatisation” of the aid budget is allowed to proceed, campaign group Global Justice Now has warned.

International Development Secretary Penny Mordaunt set the stage for full-scale privatisation of Britain’s aid spending today, announcing a drastic reduction of public money from the aid budget and saying she would continue to press for changes to the rules on international aid to “incentivise” private investment abroad.

Britain should take advantage of the opportunities of Brexit to further use the overseas aid budget to “mobilise” private investment in developing countries, she said.

Working with the City of London to develop new “investment vehicles” for developing countries would provide opportunities for British savers struggling to find a return on their investments, she claimed.

“When British investors are struggling to find good returns, these markets offer good opportunities. Doing good while making money,” she said.

“As we leave the EU we will, in time, have more flexibility to consider how we use our aid budget and the £1.5 billion we currently channel into the EU on an annual basis.

“Taking back control of our development funds, we have an opportunity to use our aid to mobilise the private investment needed to fill that financing gap to deliver the global goals.

“This results in innovation, increased competition and sustainable growth while meeting high social and environmental standards.

“This is in our national interest, allowing the City to expand its role as a financing hub for the developing world.

“This new approach will also help promote security and stability. It is a win for the developing world and it is a win for the UK,” she said.

Global Justice Now’s aid policy manager Ed Lewis said: “Not content with using public money to fund private schools in the developing world, the government now plans to outsource its obligations to tackle poverty to the private sector.

“This is a betrayal of our country’s responsibility for ending global poverty and inequality and instead turns other people’s poverty into a money-making opportunity.

“Mordaunt’s plans are based on a delusional view of Britain’s historic role in the world in which British business is only ever a force for good. She spoke of how Britain has enriched the world through trade — but left out how the world has enriched Britain through empire.”

Labour’s shadow international development secretary Kate Osamor called Ms Mordaunt’s vision “an outrageous distortion” of the country’s overseas development programme.

She said: “Suggesting that global poverty can be turned into an investment opportunity proves the Tories have run out of serious ideas and can no longer be trusted with the aid budget.

“The Tories’ plans to rewrite the international rules on aid and slash billions of pounds of public money will do nothing to end global poverty or reduce inequality.

“Poverty is not a commodity, and today’s announcement will do nothing but make the rich richer and entrench both poverty and inequality across the world.”

Ms Osamor said the next Labour government will “radically transform” the aid programme to tackle the root causes of both poverty and inequality.

“We have a bold plan to support the development of public services overseas to make sure people can access health and education services, because we know this is key to ending poverty and inequality,” she said.