USAID Funding Pause

Alice Macdonald Excerpts

Tuesday 10th June 2025 Westminster Hall

[Alice Macdonald (Norwich North) (Lab/Co-op)]

I fully agree with the hon. Gentleman about the impact that the cuts will have on women and girls. Does he agree that, as well as continuing to support women and girls through aid from this country, we must stand up for women’s and girls’ rights internationally? We have seen them rolled back in the past. That is why it is so important that we continue to do what we can to stand up for women, for example in Afghanistan, where their rights are being eroded every single day.

[Brian Mathew]

I completely agree with the hon. Member. An ActionAid project in Zambia safeguarding women from sexual exploitation was forced to close almost overnight.

Oxfam says that, thanks to the cuts to USAID, 95 million people could lose access to basic healthcare, potentially leading to 3 million preventable deaths a year, and 23 million children could lose access to education. When services collapse and diseases can spread unchecked, people lose hope, and they do not stay put. Migration pressures rise, conflicts hit new boiling points and markets react. As covid taught us all too well, deadly viruses such as Marburg and Ebola could leap from remote villages to our high streets in a matter of weeks, especially when the staff to deal with them have been given stop orders and removed from frontline duty.

We are already seeing other powers whose interests do not align with ours begin to fill the gaps left by USAID. China and Russia are expanding their influence in regions where western credibility is weakening. Just last week, some of us on the IDC heard from an official in the Burma/Myanmar freedom movement that USAID’s withdrawal has happened at the same time as China has made quick inroads to prop up the military and curry influence in its efforts to get hold of rare earth minerals from that troubled country.

The United Kingdom has long prided itself on being a force for good in the world. Our work and leadership with British aid has not only saved lives but championed the best of our British values: fairness, the rule of law, health, education and opportunity across the globe. That is soft power in its most tangible form, and it is worth its weight in gold—and, more importantly, in lives and livelihoods. Sadly, we have made our own aid cuts recently, from the 0.7% GNI commitment down to 0.5% and then 0.3%. The reality is that with so much being spent on hotels for asylum seekers, instead of allowing them to work and pay their way while their status is determined, as little as 1% of UK GNI is now being spent on genuine aid.

We know what to do. We know that investing in WASH makes sense. We know that investing in girls’ education reduces child marriage, improves economic outcomes and reduces inequality. We know that investing in pandemic preparedness, vaccine infrastructure and vaccine research protects not just vulnerable people around the world, but our NHS and public health here at home. International development is therefore smart policy. It reduces the risks that we would otherwise spend billions more to contain. What should we do? We must reaffirm our commitment to restoring the 0.7% target and publicly commit not to just the rhetoric of aid, but to actually doing it—and doing it well.

The withdrawal of USAID has created a moment of reckoning; the world is watching and the vulnerable are waiting. I will end by paraphrasing President John F. Kennedy in his special message to Congress on foreign aid on 22 March 1961. We are aware of our obligations to the sick, the poor and the hungry, wherever they may live. It will both befit and benefit us to take this step boldly, on which will depend substantially the kind of world in which we and our children shall live. It is time for us to stand up and be counted.

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[Alice Macdonald (Norwich North) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mrs Hobhouse. I thank the hon. Member for Melksham and Devizes (Brian Mathew) for securing this debate, which is a timely one, given that we are approaching 20 years since the Gleneagles summit held in Scotland in 2005. Twenty years ago, Nelson Mandela spoke in Trafalgar Square calling on us to make poverty history. World leaders gathered in Gleneagles in 2005, and they rose to the challenge, cancelling debt for some of the world’s poorest countries and boosting aid.

In 2025, aid and development are firmly in the spotlight, but for very different reasons and in a very different context. While this debate is focused on the impact of USAID funding cuts, there is no doubt that those cuts will have a seismic impact on the landscape globally, and on our own approach to development. The US is the world’s largest aid donor, providing around 20% of all aid from the 32 members of the OECD. In February, we announced the very difficult decision that UK aid would be cut to boost defence spending.

While I welcome the uplift in defence spending, for people such as me and the hon. Member for Melksham and Devizes who have worked in development for many years, it was a painful decision. However, it is important to emphasise the difference between the decisions made in the United States and those made in the UK. While I will not comment too much on the rationales for different Governments’ decisions, the UK Government have been clear that this was not an ideological decision but one driven by financial pressures. I believe, and I am sure that the Minister will assure us, that there is a commitment to continuing to develop aid.

[Mr Gregory Campbell (East Londonderry) (DUP)]

On the question of whether the Government’s decision was driven by financial motivations, does the hon. Member agree that whether it is 0.7% or 0.3%, the key is that UK GDP must rise, as her own Chancellor has said? If our economy shrinks, the 0.7% figure becomes almost irrelevant because it is 0.7% of a much smaller budget. All that matters overseas is the amount of cash they get, not the percentage of our domestic product, so we must drive the economy first before we try to deliver the mechanism that I am sure most of us are in favour of.

[Alice Macdonald]

The hon. Member is right; this is an internationally agreed percentage of gross national income, but too many countries have not met that target. As has been mentioned, some countries are stepping back, so it is important to be clear that we will keep our commitment to getting back to 0.7% as soon as the fiscal circumstances allow. However, in this new reality, we must ensure that our aid delivers maximum impact where it is spent, that we take actions to mitigate the effect of these cuts and that we keep the commitment to return to 0.7% in the long term.

In that spirit, I will focus on five key areas where the Government should act. First, they must cut in-donor refugee costs. As many Members know, we spend a significant portion of our current aid budget in the UK on those costs, which were approximately £4 billion in 2023. That trend started under the previous Conservative Government—who also left us with huge backlogs in the asylum system—and I know that this Government are determined to tackle it. We have seen some progress in bringing down those costs, and provisional estimates suggest that they were £2.8 billion in 2024, but we need to continue that trajectory with a clear timeline and a commitment across Departments to get them down.

Secondly, we must maximise the impact of our aid. It is important that we align with the “leave no one behind” principle in the 2015 sustainable development goals. I would not want to be in the shoes of the Minister for International Development in the other place, because there are difficult decisions to be made, as members of the International Development Committee recently heard. It is important that Members of Parliament, including Back Benchers, clearly see the criteria and the vision against which those decisions are being made.

The “leave no one behind” principle must, as I alluded to earlier, include a focus on women and girls. It is clear that the USAID cuts will have a big impact in that area. In 2023, the US was the largest single donor in areas including population, reproductive health and family planning. Under the Conservative Government’s last round of cuts to the aid budget, we saw that women and girls were disproportionately affected, so it is important that does not happen again. I recently asked the Minister for Europe in the main Chamber whether women and girls would remain “at the heart” of our policy, and he assured me that they would.

At the International Development Committee, the Minister for International Development in the other place assured us that although there would be less money for women and girls in education, it would be mainstreamed across all the priorities. Can the Minister elaborate on how we will ensure that they are prioritised and, importantly, how we will continue to support women’s rights organisations? As UN Women has shown recently, there has been a detrimental impact, with many such organisations at risk of having to close their doors altogether. When we invest in women and girls, we get better outcomes, not only for those countries but for ourselves.

[Helen Maguire (Epsom and Ewell) (LD)]

The UN has warned us that more than half of frontline, women-led organisations could shut down within six months due to global aid cuts. That is not just a funding crisis; it is a humanitarian catastrophe. Does the hon. Member agree that restoring funding to those groups must be a priority if we are to prevent the complete collapse of women’s services in conflict zones?

[Alice Macdonald]

I fully agree. We have had programmes, such as the Equality Fund, where we have been clear on the importance of women’s rights-led organisations. I have met many women’s rights defenders of all ages who are doing amazing work. We must continue to back them and listen to them, because they know what is best in the context in which they work.

I am sure other Members will speak to the importance of investing in multilateral efforts, such as Gavi, the Vaccine Alliance, and the Global Fund, which I also want to back. Those funds have a proven return on investment for the UK taxpayer. The World Bank’s International Development Association fund and the African Development Fund also have important roles to play in alleviating poverty, and we have been big backers of those in the past.

As co-chair of the all-party parliamentary group on the United Nations, I would also like to underline the value of the United Nations. There is, of course, space for reform, and I am sure we are all aware of some of the flaws in the system, but it is a unique vehicle for coming together as a world to tackle some of the biggest challenges we face and to increase the value of our aid.

We must also look beyond aid to leverage other forms of financing, many of which we could leverage without cost to the taxpayer. As the Independent Commission for Aid Impact pointed out, foreign direct investment, remittances and other forms dwarf the overall aid budget, so I hope the UK will continue to lead on innovative financing. That includes how we can recycle International Monetary Fund special drawing rights. In 2020, we received an allocation of £19 billion from the IMF as part of the response to covid. We could re-channel that to provide zero-interest finance to low-income countries or through multilateral development banks. We could also put idle foreign reserves into action. A small portion of the UK’s largely idle exchange equalisation account could be used to support low-income countries.

The last Labour Government led on debt relief. I was proud of what we did at Gleneagles to lead those efforts. We must do so again, given that debt payments for low-income countries are at their highest for 30 years, with 32 African countries spending more on servicing their external debt than on healthcare. Given that 90% of low-income countries’ debt is governed by English law, the UK could do a lot to bring private creditors to the table to get the best possible deals. I hope the Minister can set out what we are doing in that regard, especially as we approach the conference on financing for development in Seville in just a few weeks’ time.

Finally, more broadly, we need a reset on aid and development. Indeed, the Foreign Secretary has been clear that we want to move to an approach founded on partnership, not paternalism, which puts the countries that have traditionally been recipients of aid in the driving seat. We have seen cases in the past. Indonesia, for example, used to be a recipient of Gavi funding but is now giving money itself. We need to look at success stories and say why they matter not only for tackling poverty but for increasing prosperity and tackling inequality, including in our own country. I see our development work as insurance; it is a downpayment for the long term to tackle some of the upstream drivers of migration.

I hope that we will continue to lead internationally, as we are domestically, on using science, innovation and technology to its best effect. Innovators, such as the John Innes Centre in the constituency next to mine, are doing amazing work to tackle hunger and climate change, and we must back those efforts to look at how we can support developing countries abroad.

We all know that tough decisions are having to be made in the extraordinary times in which we live, but I know that this Government are internationalists. I believe that our party will continue to lead and use all the levers at our disposal to tackle poverty and inequality wherever they are found.

[Wera Hobhouse (in the Chair)]

I remind Members to stick to the time limit as much as they can.

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[Catherine West]

I will certainly pass that idea back to the Minister with responsibility for development, because we always end up having good ideas in Westminster Hall debates.

The US is a key partner, but this is a matter for them. It is their budget. We have a strong relationship with the US that is founded on shared interests and common approaches. Together with our G7 and G20 allies, we carry strong global influence, and we must never stand back from that. That is why we are committed to working with the US and other countries on our shared priorities. We are in regular touch with US counterparts to share advice as they shape their development plans. As in any diplomatic relationship, we will not always align with the US, and we may want to focus on other things. That is normal. We will engage in a pragmatic way to understand concerns and find a way forward.

Many Members have mentioned the multilateral system. No single country can solve the global development challenges alone, and I thank my hon. Friend the Member for Norwich North for pointing that out as well as the importance of working with international financial institutions, which she learned through her experience before coming to this place. This is where we have to be much more innovative. We cannot just sit around the table and nod through reports; we have to put some life back into those systems so that we can enable the finance and the technical aid, which the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale also mentioned. Through technical assistance and international financial organisations, we are not powerless —we can use them. There is an opportunity to rebuild trust, rebalance power and design a more effective, inclusive, co-operative and future-proof architecture.

The Liberal Democrat spokesperson, the hon. Member for Esher and Walton, mentioned the 1970s. We must not forget, at a moment like this, what the development sector has done. So many more people lived in abject poverty before, and there is now a growing middle class, and much of that is down to really bright people, employed by NGOs in those countries, who are leading movements and improving the economy. Under 10% of people are now living at the poorest level, which used to be on $1 a day. The development Minister will know the statistic, but it has reduced to 9%. This debate, as well as lots of other evidence, is going into the spending review so that decisions can be made. We know that a preponderance of those people live in sub-Saharan Africa, and that is being taken into account.

[Alice Macdonald]

The other concentration of people living in extreme poverty is in conflict-affected states. As much as this is about providing humanitarian aid once disaster happens, we also have to invest in prevention in the first place. Would the Minister reflect on the importance of conflict prevention in our aid efforts?

[Catherine West]

Indeed. This is about not just aid, but the women, peace and security programme, which I spoke at in Manila a couple of months back, and the important work that we do in Colombia, Mindanao in the Philippines and other places to ensure that women have a voice. I am very aware that many Members in this Chamber understand the importance of empowering women to solve the difficulties relating to how communities live abroad in very poor or conflict-affected areas. The Government will continue their commitment to supporting women and girls by being a champion for them across the world—by showing up and making our voice heard. Quite a few international partners have mentioned to me at conferences that I am the first UK Minister they have seen for years. This is partly about our diplomatic presence, including at ministerial level, so that we can be confident champions of women and girls in our multilateral work, and improve the quality of mainstreaming in our growth, climate, health and humanitarian programmes.