Foreign, Commonwealth and Development Office

Anna Dixon Excerpts

Wednesday 5th March 2025 Commons Chamber

[Stephen Doughty]

I obviously cannot speak for what will happen many years into the future, but the right hon. Gentleman is absolutely right: our intent is to get back to 0.7% of GNI as soon as the fiscal circumstances allow. The Prime Minister has been very clear about that.

[Anna Dixon (Shipley) (Lab)]

Will my hon. Friend give way?

[Stephen Doughty]

I will not take any more interventions, because of the time; I need to respond to the points that have been made.

It was clear that all of us across the House agree—with a couple of exceptions—that our defence spending needs to go up. There is absolutely clear unity on Ukraine. We will obviously be setting out the further work following the summit at the weekend and how we will go forward. There have been important conversations on that over recent days involving myself, the Foreign Secretary, the Prime Minister and others.

At this time of profound change, with conflicts overseas undermining security and prosperity at home, the Prime Minister rightly took the decision to increase spending on defence to 2.5% of GDP from 2027. That will be funded by cutting our spending on overseas development from 0.5% to 0.3% of GNI. The Prime Minister was absolutely clear that this was not an announcement that he was happy to make—I know that a couple of Members suggested the opposite. The Prime Minister is a man of integrity and sincerity on this issue, and I urge colleagues to look carefully at what he said about it.

For me, this was a sincere but difficult decision, not least given my experience working for humanitarian and international development NGOs and, indeed, at the former Department for International Development. I too have seen the positive impacts of Britain’s proud record on overseas development on lives around the world, as hon. Members reflected on. As the Prime Minister said, we will continue to play a key role in doing everything we can to move towards rebuilding our capacity, and we remain committed to working in Sudan, Ukraine and Gaza and on tackling climate change, on supporting multinational efforts on global health and challenges such as vaccination, and on our commitments to the overseas territories.

I have to level with the House, and I hope that people can see and feel this: in this dangerous new era, the defence and national security of this country must come first. This is not the 1990s. This is not even 2005, and I cannot look at what I, or indeed other Ministers, do every day and not recognise that we have to respond differently to the very serious threats facing this country, our continent and the world. I say that in deep candour.

This difficult choice reflects the evolving nature of the threats we face and the strategic shifts required to meet them, while maintaining economic stability—the foundation of this Government’s plan for change. We will ensure that every pound of development assistance is spent in the most impactful way, equipping the FCDO to deliver the plan for change internationally. The changes in this estimate reflect that approach, and the FCDO will continue overall, not just through ODA, to focus on growth, security, Europe, migration, climate and nature, and development.

Reducing the overall size of our ODA budget will necessarily have an impact on the scale and shape of the work we do. We will consider how to maximise the value of our budget throughout the ongoing spending review, but ODA alone is not, and has never been, the single answer to the many challenges of international development. We have to use all the levers at our disposal to support our development aims and make use of all forms of development finance to maximise the impact of our ODA. We have set out the detail of the changes being made.

Many Members have raised concerns about asylum spending. The Home Office introduced policy and operational changes within the asylum system to reduce the impact on UK ODA spend. The Home Secretary is committed to ensuring that asylum costs fall, and indeed there has already been an impact. The Government have taken measures to reduce the asylum backlog and the use of expensive asylum accommodation in the next spending review period, and to increase detention capacity to facilitate more removals.

The Chief Secretary to the Treasury considered the impact of the rise in GNI and the reduction in asylum costs, among other changes to ODA forecasts, in the round and agreed that the FCDO would receive an uplift to its 2024-25 ODA settlement in the region of £540 million. Many colleagues have raised questions about 2025-26. We will be setting initial budgets for 2025-26 to minimise disruption to key programmes as we transition financial years. The details of that will be set out in due course. The ODA budgets for future years are under review by the Government, and we will confirm details to the House in due course. I want to be honest that we cannot provide categorical assurances at this stage, but I assure Members that their points have been heard clearly.

Many Members raised debt relief. Supporting developing countries to tackle unsustainable debt is a key development priority of this Government. We need to take the twin-track approach of tackling the immediate challenges and the underlying drivers of unsustainable debt.

BII was mentioned, and it is a crucial part of our development architecture. We have provided additional support to BII, and we will work closely with it on its role. Indeed, in 2023, BII-backed businesses provided more than 1 million jobs, paid $2.5 billion in taxes and generated huge amounts of electricity, and we need a clearer role for it. I have taken on board the important points about the British Council and the funding that we give it, and about the BBC World Service, which we hugely support—our part of the funding for it has gone up by £32.6 million in the 2025-26 fiscal year. The role of SDRs has been pointed to.

I want to highlight that we will continue to centre absolutely everything that we do internationally on women and girls. Impact assessments have been mentioned many times. Of course, impact assessments, including of impacts on women and girls, will play a crucial role. I have mentioned UK Aid Match and many other things.

These are incredibly difficult choices, but they are the right choices for the circumstances in which we find ourselves. They are not choices that we make lightly. I say sincerely that I have heard all the contributions that Members have made. We will come back to the House in due course with further information. I commend the estimates to the House.