Cabinet Ministers Surprised by Shift in Foreign Aid Budget
On a brisk Tuesday morning, cabinet ministers arrived at Downing Street only to be taken aback by documents outlining significant cuts to the foreign aid budget. This shocking announcement came alongside plans to enhance military spending in the UK. A closer look at recent developments reveals that, had they been more observant, ministers might not have been so surprised.
The cabinet meeting on Tuesday, along with a subsequent statement in Parliament, represented the culmination of weeks of strategic planning by Labour leader Keir Starmer. This effort had begun during a marathon six-hour Cabinet meeting at Lancaster House on February 7. The finalization of the foreign aid cuts was executed by a tight-knit group of advisers just over the weekend, yet Starmer had already laid the groundwork for this shift.
During that extensive cabinet session three weeks prior, Starmer emphasized the interconnectedness of domestic instability and global trends. He highlighted issues such as the unprecedented ease of migration and fluctuating oil and gas prices, topics he had been contemplating long before assuming leadership last year. His remarks echoed a growing awareness that world politics are undergoing significant transformations.
Starmer found himself navigating a complex web of pressures. The Strategic Defence and Security Review (SDSR), led by Lord George Robertson—a former Labour Defence Secretary and Secretary General of NATO—is expected to deliver an assessment of the UK’s strategic interests and necessary military capabilities within the coming weeks. Additionally, US President Donald Trump had been vocal about urging European nations to increase their defense spending, further intensifying the urgency of the situation.
“Trump’s interventions have solidified discussions at the highest levels of government regarding defense spending,” a No10 source disclosed to The i Paper. “The Prime Minister has invested considerable time and energy, both in opposition and recently, to find sustainable financing for the SDSR while ensuring that domestic industries benefit from these changing priorities.”
Earlier this month, Starmer addressed the Cabinet in a letter, stating, “If governments do not change the system to favor working people, voters will look elsewhere for alternatives.” He was referring to the rise of Reform UK and noted that Labour had lost its way on migration, admitting, “We ended up treating all immigration as an untrammeled good.”
Starmer’s political evolution is undeniable. Only five years ago, he championed the free movement of people as one of the most compelling arguments for EU membership, a sentiment frequently echoed by former Prime Minister Tony Blair. However, on Tuesday, he took a decisive step away from that Blairite commitment by announcing the reduction of the aid budget from 0.5 percent to 0.3 percent of Gross National Income by 2027, stating that this would “fully fund the investment in defense,” which is set to rise to 2.3 percent of GDP.
Despite aligning with public sentiment, many Labour MPs believe that the increased military expenditures will necessitate cuts in other departments, potentially leading to reductions in welfare to safeguard essential services such as the NHS. This has sparked outrage among some backbenchers, who have dubbed the changes as “taking food from the mouths of starving children in Africa.”
Starmer attempted to mend relations with Labour MPs during Prime Minister’s Questions on Wednesday, where he effectively countered Conservative leader Kemi Badenoch’s remarks. Badenoch had claimed, “Over the weekend, I suggested to the Prime Minister that he cut the aid budget, and I’m pleased he accepted my advice.” Starmer retorted, “I’m going to have to let the leader of the opposition down gently. She didn’t feature in my thinking at all.” He added, “I think she’s appointed herself the savior of western civilization. It’s a desperate search for relevance.”
Badenoch posed a significant challenge to Starmer by questioning whether the new defense funding would support the controversial Chagos Islands deal. Starmer’s response indicated that the US is still evaluating the plans, leaving the matter open-ended.
Starmer has made it clear that he takes no pleasure in these cuts to the aid budget. As someone well-versed in global affairs, he understands that China is gaining ground in the race for soft power, particularly in developing nations.
Chancellor Rachel Reeves is already engaged in preliminary discussions regarding future funding solutions to accommodate the defense increase. She is among several European leaders seeking innovative ways to enhance defense capabilities amid tight national budgets, and she is collaborating with finance ministers during a G20 meeting in Cape Town.
One proposal emerging from these discussions is the establishment of a “rearmament bank,” designed to leverage European savings; such a bank could enable countries to boost spending without immediate increases to their balance sheets. Additionally, European Commission President Ursula von der Leyen has suggested temporarily lifting EU fiscal rules to facilitate borrowing for defense enhancements without adversely affecting national budgets.
While Reeves expresses interest in these ideas, she remains cautious about borrowing more for future defense budgets without first implementing cuts to government spending or presenting a credible plan to manage any additional debt.
As Starmer prepares to fly to Washington on Wednesday afternoon for what could be a pivotal meeting of his premiership with Trump—backed by praise from US Defense Secretary Pete Hegseth—he faces a daunting challenge. He must navigate Trump’s stance on Ukraine while addressing Britain’s domestic priorities, much like French President Emmanuel Macron has attempted this week.
Starmer stands as one of the few remaining center-left leaders in Europe. Whether his rightward shift can effectively engage with Trump remains an immediate concern, but the larger question looms: can he count on the support of his Labour Party upon his return?
