Wednesday briefing: Why Keir Starmer cut foreign aid to pay for defence – and who loses out

Good morning.

On Tuesday, Keir Starmer confirmed that the government will increase defence spending to 2.5% of GDP by 2027, with plans to raise it further to 3% during the next parliament. The announcement marks the biggest increase in defence spending since the end of the cold war, but the even bigger surprise came with the announcement that the additional funding would come directly from the overseas aid budget, which will fall from 0.5% to 0.3% of GDP – a cut of around £6bn.

The Institute for Fiscal Studies has estimated that the rise in defence spending would amount to £5.3bn, less than half of the governments own figure of £13.4bn, which appears to be inflated. (For more on that read defence and security editor Dan Sabbagh’s comprehensive analysis.)

Starmer acknowledged the increase in defence spending could only be financed through “extremely difficult and painful choices”, adding that the aid cut was “not an announcement I am happy to make”. This latest reduction, which follows a cut under Boris Johnson, comes two days before Starmer’s meeting with Donald Trump – and could be seen as a move to smooth relations with the president who has long accused Nato allies of not contributing enough in terms of defence spending.

Critics have drawn direct comparisons to the Elon Musk-led dismantling of USAid, which handles a $40bn budget. Only two weeks ago, the foreign secretary, David Lammy, warned in the Guardian that Trump’s slashing of aid could be a “big strategic mistake” that leaves space for China to expand its global influence. Yet the UK government now appears to be following Washington’s lead. Lammy followed up last night by stating that the shift is a necessary one, adding that Labour “are a government of pragmatists not ideologues”.

Today’s newsletter explores the latest budget decisions and their potential global impact. That’s right after the headlines.

Five big stories

1. Ukraine | Donald Trump has said that Volodymyr Zelenskyy is likely to visit the White House on Friday to sign a rare earth minerals deal worth $500bn to pay for US military aid.

2. Gaza | Israel is seeking to extend the first stage of the ceasefire agreement in the war with Hamas in Gaza and is prepared to resume fighting if there is no progress in crucial talks this week, according to reports.

3. Health | Wes Streeting will axe thousands of jobs at NHS England after his ousting of its chair and chief executive in what health service staff fear is a power grab. The health secretary’s plan follows Amanda Pritchard’s shock announcement on Monday that she was stepping down as the organisation’s chief executive next month. She will be replaced, for the foreseeable future, by Sir Jim Mackey.

4. Education | British universities have been warned to “stress-test” all assessments after new research revealed “almost all” undergraduates are using generative artificial intelligence in their studies. A survey of 1,000 students – both domestic and international – found there had been an “explosive increase” in the use of genAI in the past 12 months. 88% said they used tools such as ChatGPT for their assessments, up from 53% last year.

5. BBC | The BBC has admitted that it “fell short and failed people” by not dealing with “bullying and misogynistic” behaviour by its former Radio 1 DJ Tim Westwood. A major external inquiry found it “missed opportunities” that could have led to action. The inquiry was triggered by a 2022 Guardian-BBC News joint investigation into allegations of sexual misconduct and predatory behaviour by the DJ.

In depth: ‘Shortsighted and appalling’ or ‘strong step from an enduring partner’?

Despite Labour’s pledge to “rebuild Britain’s reputation on international development”, the government’s stance on aid appears even harsher than that of the previous Conservative administration’s. Rather than renewing the £2.5bn top-up to the UK’s overseas aid budget, introduced by the Conservatives in 2023, Labour chose to let it lapse in October’s budget. Bond, an umbrella group of international development organisations, called the decision “deeply disappointing” for the sector at the time. The further cuts are seen as an unprecedented and shocking move.

What could cuts mean?

According to the Centre for Global Development, the UK’s aid budget will shrink to £9.2bn by 2027, down from £15.3bn in 2023 – representing a 40% reduction.

It remains unclear where exactly these cuts will fall, but past reductions provide some insight into the potential consequences. In 2023, an internal government assessment revealed that cuts to the UK’s aid budget would probably result in thousands of women in Africa dying during pregnancy and childbirth, with a further 200,000 facing unsafe abortions due to reduced healthcare access.

The International Rescue Committee (IRC) has warned that an unprecedented 300m people worldwide are in humanitarian need, making aid funding more crucial than ever. Britain is the fifth largest international aid donor, according to data from the Organisation for Economic Cooperation and Development (OECD), so any decisions to cut budgets will inevitably have far-reaching consequences.

A report by the Guardian’s global health correspondent, Kat Lay, highlighted that these cuts could disproportionately impact women and girls, particularly in the area of sexual and reproductive rights. The UK is the second-largest donor of official development assistance for sexual and reproductive health and rights, making the potential impact on these areas even more severe. The government has stated that remaining aid funds will be prioritised for Ukraine, Sudan, Gaza and climate-related initiatives.

The impact of these cuts is made worse by the proportion of the aid budget that has been redirected over the years to cover the cost of the UK’s asylum system. In 2023, asylum-related expenses accounted for 28% of the aid budget – up from 3.2% in 2016.

Calling out for aid

The response to the announcement has been swift and severe. Campaigners have accused the government of taking “from the mouths of the hungriest people in the world”. Nick Dearden, director of campaign group Global Justice Now, has accused Starmer of acting to “appease” Trump, Oxfam has said he is “bending to populist pressures” and Unicef said the cut would “undoubtedly risk lives”.

Bond CEO, Romilly Greenhill, described the decision as “shortsighted and appalling”, warning that “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”.

Save the Children called it “a betrayal of the world’s most vulnerable children and the UK’s national interest”, while the Labour MP Sarah Champion urged Keir Starmer to reconsider, arguing that “cutting the aid budget to fund defence spending is a false economy that will only make the world less safe”.

Starmer’s response to the avalanche of criticism and concern is, more or less, that his hands are tied – the defence budget has to rise and fiscal constraints mean that he is forced to make hard choices elsewhere. For some, this argument is flimsy, as it disregards the potential for any alternatives: his “pragmatism is itself a belief system”, the Guardian’s editorial notes, “one that treats capitalism’s rules as unchangeable, markets as beyond politics, and history as a one‑way street where past mistakes justify permanent, crippling caution”.

Shifting stance on foreign aid

The UK is not alone in reducing aid. Faced with budget deficits, high living costs, and rising anti-foreign aid sentiment stoked by populist parties, many other countries have followed suit. Germany, Sweden, France, the Netherlands and Finland have all announced aid cuts, while the European Union has proposed reducing its aid budget by roughly €2bn over the next two years.

The most drastic example is in the US, where the Trump administration has effectively dismantled the aid department. Given that the US is the world’s largest provider of foreign assistance, the impact was felt almost immediately. In Sudan, a funding freeze has forced the closure of nearly 80% of emergency food kitchens set up to support those left destitute by its civil war, according to the BBC. Officials have warned of imminent deaths due to starvation and disease outbreaks in multiple regions. Last year, the Guardian’s then economics editor, Larry Elliott, described the declining focus on aid as “an example of short-term expediency trumping long-term thinking”.

The shift does seem to be working for Starmer’s relationship with the US, which was frosty until recently. The US defence secretary, Pete Hegseth, praised the UK’s decision to boost defence spending as a “strong step from an enduring partner”.

Whether this policy is enough to bridge the growing divide between the US administration – increasingly aligned with Russia – and Europe will become clearer in the coming days and weeks. In the meantime, those reliant on aid will bear the brunt of these cuts, which, as many have warned, are likely to fuel the very instability the government seeks to prevent.

What else we’ve been reading

• Brian Cox – Logan Roy himself – writes on Trump’s “broligarchs” being evidence alone that it’s time to rein in the billionaire class with a wealth tax. “When a super-rich elite is determining the outcome of elections purely to protect their vested interests and accelerate profits, it’s clear that we are in a terrifying age of wealth extremism,” says the actor in this column. Charlie Lindlar, acting deputy editor, newsletters

• “If a government figure can’t or won’t answer the basic question ‘How many kids do you have?’, then he’s probably going to turn out to be a disappointment.” And so begins Marina Hyde’s evisceration of Elon Musk’s “pro-natalism”. Toby Moses, head of newsletters

• As is Oscars tradition, the Guardian film team have begun their best picture hustings, with writers making the case for each nominee. The latest? Demi Moore’s “yucky body horror” The Substance, which Paul MacInnes argues deserves but has no chance to win – and doesn’t need to anyway. Charlie

• With the help of star stylists, publicists and makeup artists, Rachel Healey experiences the toil needed to be deemed “red-carpet ready“ during award season, a weeks-long process that leaves nothing to chance, right down to the position of your hands as the paps get the pictures. Toby

• From 1976 until late last week, baseball’s New York Yankees upheld a weird unwritten rule for their players: no facial hair allowed. In this fun piece, the Atlantic’s Steve Rushin explains why it was time for the anachronistic rule to go … and why he misses it already. Charlie

Sport

Football | Nkunku, Neto, Colwill and Cucurella were on target in Chelsea’s 4-0 victory against bottom-of-the-table Southampton.

Football | England’s head coach, Sarina Wiegman, has said Jenni Hermoso is showing “remarkable courage and bravery” with her decision to lodge an appeal after the conviction of Luis Rubiales for sexual assault but acquittal for coercion. Last week Rubiales was found guilty of sexual assault for kissing Hermoso without consent during the medal ceremony of the 2023 World Cup final. Rubiales has said he also will be appealing.

Football | Galatasaray have accused José Mourinho of making “racist statements” and said they would initiate criminal proceedings against the Fenerbahce manager over comments after their 0-0 Super Lig draw on Monday.

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