In defence of aid
The UK is increasing its defence budget at the cost of international aid. Doubts abound on efficiencies, lobbying and revolving door in defence industry
On 25 February 2025, the Prime Minister, Keir Starmer, announced that the UK would raise its defence spending to 2.6% of gross domestic product (GDP) in 2027.
This increased investment in defence will come at the cost of reducing aid spending from 0.5% of gross national income (GNI) to 0.3% in 2027.
The UK contributes to international aid through the Official Development Assistance (ODA) to promote the economic development and welfare of developing countries. It is bound by International Development (Official Development Assistance Target) Act 2016 to spend 0.7% of GNI on aid.
Between 2013 to 2020, the UK has met this target each year.
Not meeting this target requires an explanation by the government to Parliament, and meeting one of the three reasons — 1) economic circumstances, such as a fall in GDP (which was the case for UK aid reduction from 0.7% to 0.5% of GNI in 2021 due to the impact of pandemic on the UK’s economy); 2) fiscal circumstances and the effects on taxation, public spending and public borrowing and; 3) circumstances arising outside the UK.
Neither of the above three circumstances exist currently, which would warrant a drastic reduction of ODA.
Reducing the aid budget to 0.3% would mean next year’s aid budget would be £ 9.2 billion.
This amount would be the UK’s lowest ODA contribution in 20 years. The last time the UK’s aid contribution was around the £9 billion mark, was in 2007 — when the UK was in the midst of Iraq and Afghanistan wars.
Post- Brexit identity crisis for the United Kingdom?
‘It’s the strategic position the UK has ended up in post-Brexit. Britain is now awkwardly positioned between the US and Europe — neither fully European nor fully aligned with the Anglo-sphere. That creates strategic insecurity’, says Prof. Glen O’Hara, Professor of Modern and Contemporary History at the Oxford Brookes University, and author of New Labour, New Britain? How the Blair Governments Reshaped the Country.
‘One way the British state tries to compensate is through defence spending and defence relationships, particularly with France. Defence becomes a way to remain relevant and connected.’
Despite France’s strategic importance as an actor in the defence sphere, its military spending remains much lower than the UK, at 1.94 % of its GDP.
The UK’s average military spending is already more than its comparable GDP counterparts — France, Germany and Japan.
In the last two decades (2004-2024), the UK spent an average of 2.26 as a percentage of its GDP on military. This is much higher than 0.98 % of Japan (Japan’s constitution limits it to 1% of GDP spending on defence), 1.26 % of Germany, and 1.94% of France.
Ironically, in these two decades, UK’s involvement in full scale military wars has largely reduced, as its troops withdrew from Afghanistan and Iraq, and limited military involvements in Syria, Libya, and Yemen.
The public confidence in PM Starmer’s decision to not involve the UK in the USA and Israel’s attacks on Iran have also been high. Polling data from IPSOS in the UK, conducted between 3-7 April 2026, reveals —
65% Britons favour using diplomacy with the US, Israel, Iran, and other countries to try to de-escalate the situation.
An overwhelming 64% reject sending British troops to the Middle East to support the US and Israel in military action against Iran.
Efficiency, not deficiency
‘Britain is terrible at buying military equipment on time and on budget’, says O’Hara. ‘Large projects — armoured vehicles, nuclear submarines, aircraft carriers — massively overrun costs. The nuclear programme alone absorbs billions. So a lot of defence spending isn’t about expanded capability, but inefficiency.
‘Defence exports can be framed as re-industrialisation and job creation, especially in regions Labour wants to win politically’, says O’Hara.
ADS, the defence sector’s trade body, claims it has added £15 billion worth of value to the UK economy, provided direct employment to 181,500 people, and £13.7 billion to exports.
‘Aid is soft power, but it’s harder to sell.’ — O’Hara
‘The public vastly overestimates how much Britain spends on aid. They assume it’s far higher than it actually is’, says O’Hara.
‘Charities are also expected to be altruistic and non-professional. When voters see salaries, offices, and logistics operations, they feel uncomfortable — even though professionalisation is essential for effectiveness.
‘Voters also focus strongly on domestic problems. When they believe money is being siphoned off abroad, resentment builds — even when aid is in the UK’s strategic interest.’
Development Engagement Tracker (DEL), which tracks public engagement with overseas aid and global issues, in a survey by YouGov of 1500 GB adults, revealed less than half of the public (45%) support keeping or increasing aid spending levels.
Arms industry lobbying and revolving door
In contrast to charities, ‘arms companies are expected to be morally compromised. Nobody is shocked by the opacity there’ — O’Hara.
Seven arms producing and military services companies from the UK are in the top 100 in the world (SIPRI 2024). Transparency International’s open access tool (access here), which collates data on ministers’ meetings with external organisations, shows these seven companies commanded 22% of all lobby meetings with the Ministry of Defence (MoD).
And a single defence company BAE Systems (sometimes with other firms) had 262 meetings with the MoD since 2012.
According to Campaign Against Arms Trade (CAAT), ‘as a primarily British company, BAE Systems is heavily engaged in political lobbying in the UK.’
CAAT found that between 2012 and 2023, BAE had held more meetings with UK prime ministers than any other private company.
Declassified UK has also reported that several British Conservative party MP’s who rejected a parliamentary motion calling for a ceasefire in Gaza have owned BAE shares.
In a recent report, Prospect uncovered the gross misuse of revolving door policy and conflicts of interest between ex MoD staff and defence firms in the UK. Prospect identified more than 120 applications by former senior military officers, civil servants and politicians to take paid positions with firms either directly holding MoD contracts or bidding for them, or operating within the wider defence sector.
Prevention better than cure
International Development Committee Chair, Sarah Champion, said the aid cuts are ‘deeply shortsighted’ and ‘our finances should be spent on preventing [conflict], not the deadly consequences’.
According to the Institute for Fiscal Studies (IFS) the fiscal consequences of the government’s plans and ambitions for defence spending include reduced spending on other areas (for now aid). The second is to increase tax revenues to fund the increased spending. The third option is to borrow.
Chancellor Rachel Reeves has clearly said she does not favour tax hikes or higher borrowing to pay for increases in defence spending.
Borrowing for a permanent increase in defence spending is unlikely to be sustainable, and would be hard to justify on the grounds that defence spending will boost long-term economic growth.
The fiscal impact of returning to 0.7% of GDP for aid is small relative to the defence budget, making it a feasible reallocation.
More importantly, it would keep the United Kingdom on the right side of history —preventing poverty, conflicts, and distress migration.