Sir Keir Starmer is travelling to Washington this week armed having freshly announced plans to slash the foreign aid budget in order to fund a boost to Britain’s defence spending, which he hopes will help the UK avoid any conflict with US president Donald Trump.
The prime minister outlined plans for Britain to spend 2.5 per cent of its GDP on defence by 2027, up from 2.3 per cent currently, which he said amounted to a £13.4 billion annual uplift.
It comes amid calls from Mr Trump for Nato countries to significantly bolster their armed forces as he seeks to negotiate an end to Vladimir Putin’s invasion of Ukraine.
Why is defence spending being increased?
Sir Keir has faced flak from the left of the Labour Party for prioritising a boost for Britain’s armed forces over spending on public services or tackling child poverty.
But the push to hike Britain’s defence budget to 2.5 per cent of its GDP comes amid talks to end the war in Ukraine, with the UK poised to act as a peacekeeper in the country to deter future Russian aggression.
Military chiefs have lashed out at the erosion of Britain’s armed forces over the past three decades, warning that the UK could not currently maintain a presence on the ground in Ukraine.
And Sir Keir hopes that the spending boost will help to rebuild the country’s military and curry favour with Mr Trump, who wants Europe to be less reliant on the US for support.
How much will it cost?
Sir Keir claimed the increase amounts to a £13.4 billion boost each year, though economists questioned the accuracy of the prime minister’s figures.
Economists at the Institute for Fiscal Studies (IFS) have said a hike to 2.5 per cent of GDP on defence spending would cost an additional £6 billion.
They added that a larger increase to 3 per cent, as defence chiefs have called for, would mean increasing the defence budget by £20 billion, almost half the sum raised by Rachel Reeves in her October Budget. Sir Keir has committed to meet the 3 per cent goal by 2034, which the IFS said could force Ms Reeves to find spending cuts or tax hikes elsewhere.
And, with Mr Trump piling pressure on Nato countries to spend 5 per cent of their GDP on defence, the IFS said meeting the demand would cost an eye-watering £80 billion of extra spending.
Can the UK afford it?
Ms Reeves has promised to not use borrowing to fund day-to-day spending, and has also ruled out another autumn-like tax-hiking Budget. And the pledges appear to have forced the PM’s hand into funding the increase by dipping into Britain’s foreign aid budget - quickly condemned by Labour MPs and grandees including David Miliband.
Mr Miliband, who is now the president of the International Rescue Committee, said the cut to aid funding was a “blow to Britain’s proud reputation as a global humanitarian and development leader” and warned the global consequences would be “far reaching and devastating”. Hinting that the government was considering tax cuts to fund the pledge, but eventually chose the aid cut.
Ms Reeves told ITV last week: “Recognising the priority of defence spending in the world that we live in today means that we will have to make difficult choices so that we can spend that money that is needed to keep our country safe.”
What is the government saying on the increase?
The PM told MPs the move was necessary because "tyrants" like Russian President Vladimir Putin "only respond to strength".
Sir Keir said: "We should not pretend that any of this has been easy. Working people have already felt the cost of Russian actions through rising prices and bills.
"Nonetheless, one of the great lessons of our history is that instability in Europe will always wash up on our shores, and that tyrants like Putin only respond to strength.”
He said he was not “happy” with the move to cut the foreign aid budget, which will fall from 0.5 per cent of national income to 0.3 per cent by 2027, but that it had allowed him to make the pledge. He said much of the aid budget in recent years has been spent on the asylum backlog, including to put up migrants in hotels, vowing that by clearing the backlog these costs would fall.
“Nonetheless, it remains a cut – and I will not pretend otherwise,” he told MPs.
What have the Conservatives said?
As she gave a speech on foreign affairs in central London on Tuesday, Tory leader Kemi Badenoch described a 2.5 per cent rise as "now no longer sufficient".
She added: "The message should be simple: we must do what it takes to protect Britain."
She also backed diverting money currently spent on foreign aid to defence.
But it came just days after shadow defence secretary James Cartlidge admitted the Conservatives did not do enough on defence while they were in government.
He blamed Labour for the Tories’ inheritance in 2010, but said he wished the Conservatives had spent more on the armed forces at the time.
