UK to hike defence spending and cut aid budget, Starmer says | Business and Economy News

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British prime minister Keir Starmer’s announcement comes prior to his trip to the United States later this week.

The United Kingdom will increase its annual defending spending to 2.5 percent of GDP by 2027, Prime Minister Keir Starmer has said, signalling the UK’s efforts to boost Europe’s security.

On the eve of his departure to meet US President Donald Trump in Washington, Starmer told the British parliament on Tuesday that he was bringing forward the increase to offer Europe more support as the United States spearheads talks with Russia over its war in Ukraine.

He noted that the increase would see the UK spending 13.4 billion pounds ($17bn) more on defence every year from 2027. The UK’s Ministry of Defence noted that the country spent 53.9 billion pounds ($68.3bn) in the 2023-2024 financial year.

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“We must go further still. I have long argued that … all European allies must step up and do more for our own defence,” Starmer added.

He said that the hike in defence spending would be paid for by a 40 percent cut to the country’s international aid spending.

The international aid budget will be cut from 0.5 percent to 0.3 percent of gross domestic product (GDP) in 2027, Starmer said.

The British prime minister said he was not pleased to announce a cut in the country’s aid budget but said the move was necessary to offer Ukraine and Europe support in a “new era”.

The UK last cut its aid budget in November 2020, during the economic crisis resulting from the COVID pandemic, reducing the level to 0.5 percent of GDP from 0.7 percent previously.

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Starmer will meet Trump later this week and is eager to convey that the UK will try to lead other European countries in offering more support to the US-led military NATO alliance – a demand Trump has repeatedly made, suggesting nations should spend 5 percent of GDP.

He is also hoping to reassure Trump that Europe will provide support and security guarantees to Kyiv if peace talks with Russia are successful.

On Monday, French President Emmanuel Macron met Trump with the same goal in mind.

“I’m here as well after discussions with all my colleagues, to say that Europe is willing to step up to be a stronger partner, to do more in defence and security for its continent, and … to be engaged on trade, economy and investments,” Macron told reporters in Washington.

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Trump’s push to launch negotiations between senior US and Russian diplomats without the participation of Ukrainian or European leaders has raised tensions, with Europe questioning Washington’s commitment to its security.

Trump, who took office on January 20, said on Monday that “a lot of progress has been made” so far on efforts to end Russia’s war in Ukraine.

At a news conference with Macron later in the day on Monday, the US president said he was “pleased that President Macron agrees that the cost and burden of securing the peace must be borne by the nations of Europe, not alone by the United States”.

“Europe must take that central role in ensuring long-term security of Ukraine, which they want to do.”

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