Development minister resigns in protest at Keir Starmer’s aid cuts

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International development minister Anneliese Dodds resigned on Friday in protest at Sir Keir Starmer’s decision to fund a £6bn defence spending increase by slashing the UK’s aid budget, in a sign of the political toll of efforts to align more closely with the US.

“Ultimately, these cuts will remove food and healthcare from desperate people — deeply harming the UK’s reputation,” Dodds said in a letter to the prime minister.

Starmer on Tuesday announced a £6bn annual increase in military spending by 2027 and said it would be funded entirely by cutting the UK’s £15.3bn aid budget from 0.5 per cent of gross national income to 0.3 per cent.

Dodds’ abrupt departure marks the first resignation by a cabinet minister over a policy principle since Starmer took office in July last year.

It speaks to a wider unease among swaths of Labour MPs about decisions taken by the centre-left party on policies ranging from benefits to welfare against a tight fiscal backdrop.

The reduced aid budget will be £9.2bn, according to estimates from the House of Commons Library, but about half of that sum could end up being spent domestically, including on housing asylum seekers.

Labour’s general election manifesto last year promised to lift aid spending to 0.7 per cent “as soon as fiscal circumstances allow”.

Starmer’s announcement on defence spending preceded his visit on Thursday to meet US President Donald Trump, who has called on Washington’s Nato partners to increase defence spending.

Trump’s administration has also all but shut down the US Agency for International Development, the main channel for $43bn worth of US aid and development programmes a year.

“I know you have been clear that you are not ideologically opposed to international development,” Dodds wrote to Starmer. “But the reality is that this decision is already being portrayed as following in President Trump’s slipstream of cuts to USAID.”

She added that it would be “impossible” to maintain support for Gaza, Sudan and Ukraine, as well as vaccination programmes and climate support, “given the depth of the cuts”.

Before winning power last year, the Labour party had denounced cuts to international aid made by the previous Conservative government.

Dodds, who is on the left of the party, was shadow chancellor in 2020 and led the criticism when the then-chancellor Rishi Sunak cut Tory aid spending, breaching his party’s own manifesto.

She was only told about Starmer’s plan to cut the aid budget on Monday, Dodds confirmed in her letter. She added that she held off resigning until the prime minister returned from Washington.

Starmer said in a letter in response to Dodds: “The decision I have taken on the impact on ODA was a difficult and painful decision and not one I take lightly. 

“We will do everything we can to return to a world where that is not the case and to rebuild a capability on development,” he wrote. “However, protecting our national security must always be the first duty of any government and I will always act in the best interests of the British people.”

The prime minister also vowed to continue to provide support in the worst conflict zones of Ukraine, Gaza and Sudan.

Almost a third of the UK’s aid budget was spent on propping up the domestic asylum system in 2023.

Analysis by the Center for Global Development think-tank found that, even if UK spending on asylum fell by 30 per cent, the UK’s actual spending on international aid would be closer to 0.17 per cent of GNI, the lowest in the G7.

In a letter on Thursday Lord Mark Malloch-Brown, a former UN deputy secretary-general and minister in Gordon Brown’s government, told Starmer along with diplomatic and academic figures, to urgently look at alternatives to pay for the rise in defence spending, including introducing a defence levy and equalising capital gains and income tax.

“Further weakening the UK’s commitment to international development risks exacerbating the very global instability and security threats that increased defence spending seeks to address,” the signatories wrote.

Starmer said this week the increased defence spending would take the UK’s overall military budget to 2.5 per cent of GDP.

He added that in the next parliament, expected to run from 2029 to 2034, the UK would seek to hit a level of 3 per cent of GDP.

In her letter, Dodds acknowledged that the postwar global order “has come crashing down”, requiring higher defence expenditure, but said she had expected a collective discussion of Labour’s fiscal rules and approach to taxation.

One Labour MP said they were “gutted” by Dodds’ resignation: “Absolutely gutted. She’s brilliant, worked so hard, never complained, she was regularly put in totally impossible positions and was always loyal.”

Dodds was one of several left-leaning frontbenchers who were in Starmer’s original shadow cabinet but were sidelined as the Labour leader shifted the party further to the right.

She was demoted in May 2021 from shadow chancellor to party chair and last July was given the government roles of both development minister and minister for women and equalities.