Charity leaders have criticised the government’s “short-sighted” and “appalling” decision to cut the UK’s aid budget to plough the money into defence.

The government will cut its annual aid budget from 0.5 per cent of gross national income to 0.3 per cent to pay for a 0.2 percentage point increase in defence spending by 2027, Prime Minister Keir Starmer announced today.

The increase to defence spending will cost about £13.4bn every year until 2027 and Starmer said he was “not happy” to make the announcement.

The previous government was roundly criticised in 2020 when Rishi Sunak, then Chancellor of the Exchequer, announced a reduction in the UK’s overseas aid budget from 0.7 of gross national income to 0.5 per cent, cutting more than £4bn off the annual spend.

The Labour Party had promised to restore the amount to 0.7 per cent when finances allowed.

Romilly Greenhill, chief executive of the NGO umbrella body Bond, said the latest cuts would destroy the Labour government’s reputation.

“This is a short-sighted and appalling move by both the PM and Treasury,” Greenhill said.

“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.

“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.”

Hannah Bond, co-chief executive of ActionAid UK, said there was no justification for the cuts.

“We are profoundly shocked and disappointed that the government has made the reckless decision to raid the already diminished Overseas Development Assistance budget – reducing it to less than half of our legal obligation,” Bond said.

“There is no justification for abandoning the world’s most marginalised time and time again to navigate geopolitical developments. 

“This is a political choice – one with devastating consequences, at a time when USAID has been gutted and development initiatives abandoned by one of the world’s largest donors, the UK government appears to be following suit rather than standing against this dangerous trend.”

Helen McEachern, chief executive of Care International, said the decision would endanger the lives of the world’s most vulnerable.

“When the prime minister took office, he declared ‘Britain is back’,” McEachern said.

“Yet today he has followed the path of other leaders in making the short-sighted and reactionary decision to slash the UK’s aid budget – undermining both the progress made and Britain’s standing in the world.  

“In his speech, the prime minister talked about ‘false choices’, but today he has made the false choice between aid and defence.

“Not only does this decision do irreparable harm to his government’s reputation, but it also ignores the vital role aid plays in making the UK and our world, safer, healthier and more sustainable for everyone.   

“Make no mistake, this decision will endanger the lives of the world’s most vulnerable.”

Fola Komolafe, chief executive of World Vision UK, said the move undermined the government’s commitment to international development.

“World Vision is one of the largest international children’s charities in the world – we are helping one in four of those being helped by humanitarian aid – so are well placed to know the devastation these cuts by the UK will cause for children and families living in some of the world’s toughest places, battling with drought, floods, hunger, disease malnutrition,” Komolafe said.

“This move completely undermines the UK government’s recent commitment to international development, which was something of which we should be proud – but just when a demonstration of global leadership is most needed this is a huge leap backwards.  

“Difficult decisions on spending must be made but these should not be at the cost of children’s lives. 

“We call for a review and reversal of this short-sighted decision-making and ask that the UK be a leader on these important global issues, and not to shy away.”