USAID Funding Pause

Debate between Alice Macdonald and Helen Maguire

Tuesday 10th June 2025 Westminster Hall

[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.