The Labour Prime Minister announced overseas spending will reduce from 0.5% of GDP to 0.3%.
Sir Keir Starmer has announced his government will slash Britain’s foreign aid budget to pay for massive hikes in defence spending.
The Prime Minister, who has been under increasing pressure to spend more on defence budgets - in particular from President Donald Trump - told MPs Labour would cut back on foreign aid to fund the increase, reducing current spending from 0.5% of GDP to 0.3%.
The 40% reduction in overseas aid in 2025 follows a previous reduction by the previous Conservative administration in Westminster from 0.7% to 0.5%.
Sir Keir Starmer told MPs this was “not an announcement I am happy to make”, adding: “We will do everything we can to return to a world where that is not the case, and rebuild a capability on development, but at times like this the defence and security of the British people must always come first.
“That is the number one priority of this government.”
Labour's 2024 manifesto said the party was “committed to restoring development spending at the level of 0.7 per cent of gross national income as soon as fiscal circumstances allow".
The last time that UK ODA was under 0.3% was in 1999, with the new figure meaning Italy and the United States within the G7 provide a smaller amount of GDP to overseas development aid.
Romilly Greenhill, CEO of Bond, the UK network for organisations working in international development and humanitarian assistance, shared their disgust at the move.
She 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.
“Following in the US’s footsteps will not only undermine the UK’s global commitments and credibility, but also weaken our own national security interests. Instead of stepping up, the UK is turning its back on communities facing poverty, conflict and insecurity, further damaging its credibility on the global stage.
“Tragically, this cut is even deeper than the last Conservative government’s and will destroy this Labour government’s reputation, tearing to shreds their previous manifesto commitments to rebuild the UK’s international reputation as a reliable global partner.”
The move comes amid plans for the Labour government to increase defence spending to 3% of GDP by 2029.
Halima Begum, CEO of Oxfam GB, said: “We understand that defence spending has become a major concern in our fast-changing world. However, cutting the already lean aid budget is a false economy and will only increase division, and amounts to a betrayal of the world’s most vulnerable people. It is a false dichotomy to pit international cooperation to tackle poverty against national security interests in order to avoid tax increases.
“These cuts make a mockery of the Labour Government's stated promise to stand in partnership with the Global South and the pledge it made to the British people in its manifesto. The aid budget, as Conservative and Labour Ministers have conceded in the past, is an investment. Bending to populist pressures may seem easy, but real leadership means standing firm in our commitment to global justice and demonstrating how Britain can be a global force for good."
