Planned cuts to foreign aid to pay for higher defence spending are sparking concerns within the Government that it will be harder to combat Chinese influence in developing countries.
Sir Keir Starmer announced on Tuesday that he would slash the aid budget from 0.5 per cent to 0.3 per cent of national income in order to push up defence spending but the move has caused disquiet in his Cabinet and among Labour MPs.
The i Paper understands that some at the senior levels of the Government believe the budget reductions could make it harder to counter Chinese influence in the so-called “global south”, as there will be less cash to help developing countries access global finance alongside direct support.
“It is self evident that it is easier to do this in a 0.5 world than 0.3,” a Government source said.
When Donald Trump announced dramatic cuts to the United States aid budget this month, the Foreign Secretary David Lammy said it was a “big strategic mistake” to scale back development funding because it would allow “China and others to step into that gap”, although he now backs the UK Government’s decision.
His warning was however echoed by senior Labour MP Sarah Champion, who warned the UK’s “enemies will be delighted” at the aid cuts and would look to grow their influence where Britain is stepping back.
The Commons Development Committee chair told The i Paper: “It is no secret that the biggest threats to UK security are China, Russia, Iran and cyber terrorism. MPs have been warned of this for over a decade.
The decision to cut aid spending in order to fund a higher defence budget is not a sign that Britain is “pulling out on the global stage”, Sir Keir Starmer has insisted.
Speaking on his way to Washington last night, the Prime Minister also promised that the international development budget would return to its original level again in future – and denied that he was ceding ground to Beijing.
He said: “I thought it was important that I not only set out the biggest sustained increase in defence spending since the Cold War, but also explain pound for pound, pound and pence, how we’re going to pay for it, which is why I announced the cuts to overseas development.
“That is not a decision I wanted to take. That’s not a decision I’ve taken lightly. It does not mean we’re pulling out on the global stage, far from it. And China actually hasn’t been giving that much in aid in any event. But we’re not pulling away.”
Pledging to continue supporting the war zones which are most in need of help, Starmer added: “I’ve been really clear about Gaza, Ukraine and Sudan, because obviously they are conflict zones at the moment. We’re not pulling out. Obviously we want to restore and increase overseas aid as soon as the economic circumstances allow us to do so.”
The aid target written into law states that the UK should spend 0.7 per cent of its gross national income on international development, but it can be suspended in an emergency. Since the pandemic the Government has been spending 0.5 per cent and that will now be reduced to 0.3 per cent.
By Hugo Gye
“China has been strategically developing relationships around the world through its Belt and road initiative. Branded as ‘aid’ it is actually providing infrastructure that it then leases back or provides loans to build, but delivered using Chinese workers.
“This has allowed China to have leverage across the globe with countries who have historically been our allies.
“Make no mistake, our enemies will be delighted that we are leaving the development stage and they will be filling the gaps to our detriment.”
Luke de Pulford, director of the Inter-Parliamentary Alliance on China (IPAC), of which Champion is a member, warned that the UK should “observe how cuts to USAid have created a soft power opportunity for China” and warns that we should be “very wary” of handing Beijing “opportunities to bend other countries to their will”, for example through its Belt and Road infrastructure development initiative.
Pressed on whether China would fill the void left by aid cuts, the Prime Minister’s official spokesman said: “I reject that characterisation.
“The Prime Minister has spoken of his pride at the overseas development budget, and obviously doesn’t take the decision that he took lightly yesterday, but the defence budget increase will be important to national security, important to protecting our borders, but as he said, it is important that we continue to support key areas, such as Gaza and Ukraine.”
In the Commons, SNP Westminster leader Stephen Flynn accused the Prime Minister of following “the populist playbook” of cutting foreign aid.
“Whilst we support increasing defence spending, we cannot support the populist playbook of cutting foreign aid.
“Indeed, that is a position which was shared and agreed with by the Foreign Secretary just a matter of days ago, when he said that it would be a big strategic mistake that would allow China to step in.
“Why was the Foreign Secretary wrong and the Prime Minister right?”
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