UK slashes international aid to pay for major defence increase

Prime Minister Keir Starmer announces boost to military spending days before meeting US President Donald Trump

British humanitarian aid is airdropped over Gaza. UK aid to other parts of the world is facing severe cuts. EPA

The British Prime Minister has announced he will cut the UK's overseas aid budget to pay for a significant increase in defence spending of £13 billion ($16.48 billion) to meet growing global threats.

With the US stepping back from protecting Europe, and Russia still considered a threat, Keir Starmer pledged to take the defence budget from 2.3 per cent to 2.5 per cent of GDP.

To pay for the rise he made the “very difficult” decision to cut the international development budget from its current level of 0.5 per cent of gross national income to 0.3 per cent by 2027 when the military increase is due to take hold.

“We must change our national security posture,” he told Parliament on Tuesday. “A generational challenge demands a generational response.”

Less than a month ago, Development Minister Anneliese Dodds admitted that children in Yemen had starved when the UK last cut aid in 2021.

And now, humanitarian spending on Gaza, Sudan and Ukraine will be ring-fenced, although much of the UK’s other international budget will be heavily cut, affecting projects across the Middle East, Africa and Asia.

Britain’s overseas aid is spent on a wide spectrum of projects, from those experiencing the fallout from war, such as in Gaza or Syria, to people affected by climate change, in the Caribbean or South Pacific.

The Foreign Office had been pushing to increase its £15 billion ($19 billion) aid budget, with particular concern for countries like Sudan reliant on life-saving aid, they said. Now it faces losing about 40 per cent of its funding.

“The UK government’s decision to cut aid by £6 billion in order to fund defence spending is a blow to Britain’s proud reputation as a global humanitarian and development leader,” said David Miliband, former Labour foreign secretary and head of the International Rescue Committee. “The global consequences of this decision will be far reaching and devastating for people who need more help not less.”

One UK aid stream is the task of demining areas where conflict has largely ended to allow populations to return to their towns and fields. The Halo Trust is among the world’s biggest demining outfits, especially in Afghanistan, Syria and Ukraine, and is reliant on the UK and US for funding.

The aid budget also goes on educating women and girls in poverty-stricken countries, attempting to empower them economically. It has also been diverted to help meet the growing cost of housing asylum seekers in the UK.

Britain's Prime Minister Keir Starmer announcing the cut to overseas aid to fund defence spending, in the UK Parliament, London, on Tuesday. AFP

Washington gambit

Mr Starmer is due to head to Washington for a key meeting with President Donald Trump on Ukraine and European security on Thursday.

The US leader has been critical of European powers for not spending enough on defence and Britain’s announcement could help shore up wavering US support for Nato. French President Emmanuel Macron used his own White House visit this week to correct some of Mr Trump's claims about Europe's military aid being loan-based.

With Britain set to become Europe’s biggest spender on defence, Mr Starmer may have earned some credit when it comes to persuading Mr Trump to formulate a peace deal for Ukraine that does not weaken Kyiv.

The increase in spending could also demonstrate to the new Washington administration that hectoring Europe for an over-reliance on a US security umbrella is justified and could lead to defence increase announcements across the continent. “All European allies must step up,” Mr Starmer stated.

Germany will be under pressure to follow suit but its hands are tied by strict borrowing rules. Chancellor-in-waiting Friedrich Merz on Wednesday indicated he would not rush into the "complex task" of relaxing Germany's debt limits, even though it looks sure to become more difficult once a newly elected parliament meets next month.

German parties friendly to Ukraine and Nato will no longer have the two-thirds majority needed to amend the constitution and Mr Merz, a strong backer of Ukraine, says Europe "is waiting for Germany" to take on a stronger leadership role. However, he rejected the idea of reconvening the former parliament to reform the debt rules, which are sure to be a point of contention in coalition talks.

Cash for spies

While Mr Starmer also announced a £4 billion increase to British intelligence services' budget, he also promised to set a “clear ambition” in raising defence spending to 3 per cent of GDP within four years. “The nature of warfare has changed significantly,” he said. “We must modernise our capabilities.”

There will now be a new National Security Strategy published in June that, alongside an ongoing defence review, looks set to feature an increase in the size of the British army from its record low of 72,000 soldiers.

The Ministry of Defence will also look to invest in mass-produced offensive drones, precision missiles, artillery and air defences, all of which have been demonstrably lacking from its arsenal.

It will also push on with its nuclear missile submarine programme, planning to introduce the new Dreadnought submarine in the early 2030s.

Bitter disappointment

But the cash comes at the severe cost to the overseas budget, with Sarah Champion, the international development committee’s chairwoman, saying she was “bitterly disappointed” with the move.

She urged Mr Starmer to “rethink” the announcement in cutting aid, which was “a false economy that will only make the world less safe”.

“Conflict is often an outcome of desperation, climate and insecurity,” she added. “Our finances should be spent on preventing this, not the deadly consequences.”

Lord Malloch Brown, a British diplomat and former UN deputy secretary general, cast doubt on whether the numbers add up for plans to cut aid to funnel into defence spending.

“Right investment, wrong choice for place of cuts," he said. "I think probably it would be appropriate for foreign aid to have played its part in a broader package of cuts."

Aid organisations reacted with fury to the Prime Minister’s decision. Romilly Greenhill, chief executive of Bond, the umbrella organisation for international development and humanitarian assistance groups, said: “This is a short-sighted and appalling move by both the PM and Treasury.

“Slashing the already diminished UK aid budget to fund an uplift in defence is a reckless decision that will have devastating consequences for millions of marginalised people worldwide.”

Mr Starmer earlier told MPs it was “not an announcement that I’m happy to make” but added that “at a time like this the defence and security of Britain must always come first”.

At a Downing Street press conference on Tuesday evening, he told reporters: “I’ve taken a difficult choice today because I believe in overseas development, and I know the impact of the decision that I’ve had to take today, and I do not take it lightly.

“It is not a decision that I, as a British Labour prime minister, would have wanted to take, but a decision that I must make in order to secure the security and defence of our country.”

A source close to the Prime Minister told The National the government must now “make some difficult choices” on the precise areas of the Official Development Assistance budget it will have to cut.

Britain had previously set a global example on overseas aid, that is said to generate significant “soft power”, by an expenditure of the internationally agreed 0.7 per cent of GDP.

But during the pandemic it was cut to 0.5 per cent, or £12 billion, in 2021.