Innovative Vaccine Investment now available in ISAs
Economic Articles
Submit Articles Back to Articles
Issued 03 March 2009
Retail
investors are to be offered an opportunity to invest in a new Vaccine
Investment ISA that aims to raise £50 million to vaccinate children in
the world’s poorest countries.
The ISA is the
Government’s primary vehicle for tax advantaged saving outside pensions
and has proven extremely popular, with over 18 million people (1 in 3
adults) now holding an ISA. The Government has been keen to build on
this success and in the 2008 Pre-Budget Report announced that it was
extending the qualifying investments for ISAs to securities issued by
Multilateral Development Institutions. This enables retail investors to
support the work of these institutions in helping developing countries
to reduce poverty and provide healthcare, education, water and
important services to their citizens.
Under this
new scheme, retail investors will be able to earn a competitive return
on their investments in a tax-efficient manner, thereby enabling the
International Finance Facility for Immunisation (IFFIm) to raise funds
to be used by the GAVI Alliance, a public private partnership, to
support vaccination programmes in more than 70 developing countries.
IFFIm
has raised $1.6 billion to support GAVI immunisation programmes since
2006. This has been facilitated by IFFIm’s triple-A rating, in turn due
to the support of major governments, led by the UK, who have pledged to
contribute money over 20 years. The proceeds of these pledges are used
to repay the initial investments, plus the fixed return. The
World
Bank acts as IFFIm’s Treasury Manager and manages its finances.
The Financial Secretary to the
Treasury, Stephen Timms, said:
"I
am delighted the extension of ISAs to cover securities issued by
Multilateral Development Institutions, such as IFFIm, has borne fruit
so soon. I congratulate GAVI, HSBC, IFFIm and the World Bank
for
developing this opportunity for personal investors to benefit from the
tax advantages of ISAs and simultaneously to fund child vaccination in
developing countries against life-threatening diseases such as polio,
diphtheria, hepatitis and measles."
International Development Secretary, Douglas
Alexander, said:
"The
economic downturn could push millions of people into extreme poverty
and cause the deaths of up to 2.8 million children. Innovative
initiatives like this are vital if we are to prevent this financial
crisis from becoming a human crisis. That is why Gordon Brown is
leading a new Taskforce on Innovative International Financing for
Health Systems, to help save the lives of many millions more"
Notes
1.
The
changes announced in the 2008 Pre-Budget Report build on measures
announced in April 2008 to allow people to save more in ISAs and make
them simpler and more flexible to use. Saving in ISAs was supported by
an estimated £2.4 billion in tax relief in 2007-08.
2.
The annual investment
limit for ISAs rose to £7,200 for 2008-09, of which £3,600 can be saved
in cash.
3.
Worldwide,
nearly 29,000 children under five die every year, that is nearly one
every three seconds. Around 25% (2-3 million) of under-five deaths are,
or will be soon, vaccine preventable.
4.
The
GAVI Alliance (formerly the Global Alliance for Vaccines and
Immunisation) has immunised 213 million children and saved 3.4 million
lives since 2000. GAVI has also accelerated the introduction of new
vaccines and is strengthening health and vaccine delivery systems.
Before its creation, immunisation programmes suffered from a lack of
stable, predicatable and coordinated cash flow.
5.
Since
2000 The Department for International Development (DFID) has provided
£68.5 million funding for GAVI immunisation programmes which
contributed to the immunisation of 213 million children and saved up to
3.4 million lives
6.
IFFIm
uses long-term binding commitments from donors as collateral against
which to borrow money up front from institutional and private
investors, which can be spent immediately on mass vaccination
programmes. GAVI aims to raise $4 billion by 2015 through IFFIm bond
launches. When fully funded, IFFIm will
have the potential to save
10 million lives.
7.
Frontloading
financing for immunisation in this way enables many more lives to be
saved than if the same amount of funding were to be spread over a
longer time period. Commitments have so far been made by the UK,
France, Italy, Spain, Sweden and South Africa. The UK is the largest
donor to IFFIm and has committed £1.38 billion during the period 2006
to 2026.
About the Author
© Crown Copyright. Material taken
from HM-Treasury. Reproduced under the terms and conditions of the
Click-Use Licence.
Follow us @Scopulus_News
Article Published/Sorted/Amended on Scopulus 2009-03-04 12:05:41 in Economic Articles
