According to the UK Government, the funding for the £2 cap comes from a "reprioritisation" of the Department for Energy Security and Net Zero budget, switching money that had been set aside for international climate finance projects from grants into loans that must be repaid. Rather than helping countries build a safer future, this risks saddling them with more debt and leaving less money to spend on everything from hospitals and schools to protection from climate change.
The announcement follows Oxfam's latest analysis which shows that around two-thirds of the climate finance provided by rich countries comprise repayable loans, increasing debt burdens for countries dealing with a crisis they did little to cause.
The UK Government has also confirmed that devolved governments will receive consequential funding through the Barnett formula. That means additional funding will flow to Scotland because the UK Government will spend more in an area of devolved power.
Oxfam Scotland is urging Scottish Ministers to condemn the UK's decision to replace climate grants with loans and to instead better tax wealth, including through the introduction of a 2% tax on those with assets of more than £10 million, which could raise £24 billion and is backed by three-quarters of the UK public.
Scotland's own Climate Justice Fund takes a different approach, providing support as grants without repayment, rather than adding to the debt burdens faced by countries dealing with climate disasters.
Ministers should also seize the opportunity created by additional funding flowing to Scotland to deliver their promised nationwide £2 bus fare cap on the same timetable as the UK Government, ensuring people across Scotland benefit from cheaper bus travel from January 2027 at the latest.
Katherine May, Oxfam Scotland Advocacy Adviser, said: “The Prime Minister’s decision to cap bus fares is welcome, but the bill should categorically not be handed to people thousands of miles away who are already living with the worst effects of a climate crisis they did little to create.
“Rich nations like the UK helped cause the climate crisis and continue to make it worse. Asking low-income countries to borrow money to deal with its consequences is like crashing someone's car and then offering them a loan for the repairs. A fairer option would be for the Prime Minister to ask the super-rich and those profiting from pollution to contribute more towards building a greener, fairer country by better taxing wealth.
“Scottish Ministers should strongly press the UK Government to fairly fund its bus fare cap fairly. They should then use the extra funding coming to Scotland to at least match the UK's timetable by accelerating delivery of its own promised nationwide £2 bus fare cap, ensuring people across Scotland aren’t left behind.”
/ENDS
For more information and interviews, please contact: Rebecca Lozza, Media and Communications Adviser, Oxfam Scotland: rlozza1@oxfam.org.uk / 07917738450
