The Prime Minister and his Foreign Secretary have privately committed to a plan to reverse cuts to Britain's foreign aid budget, a move that is likely to put pressure on the Treasury to raise taxes.
Andy Burnham and Foreign Secretary Ed Miliband have secretly signalled their intention to restore the UK's international development spending to 0.7% of gross national income (GNI), according to reports. The target was drastically reduced under Sir Keir Starmer's administration, falling from 0.5% to just 0.3% by 2027 to help plug gaps in defence spending.
£13bn annual cost to reach target
Economic experts at the Institute for Fiscal Studies (IFS) have calculated that reaching the 0.7% threshold again would require an extra £13 billion a year. The revelations mark a major internal battle over the nation's purse strings, with no fixed timeline set for the change.
Max Warner, senior research economist at the IFS, told the i Paper: "These are not insignificant sums, and as with any increase in spending, would need to be funded by some combination of lower spending elsewhere, higher taxes or higher borrowing."
Backbench pressure and internal conflict
The secret plan follows intense backbench pressure from Labour MPs like Fleur Anderson, who want a 10-year roadmap to rebuild the target. It also exposes a conflict between global ambitions and local needs, with Mr Burnham already facing backlash for diverting international climate grants into loans to fund domestic pledges like the £2 bus fare cap.
Despite tight public finances and heavy strain on the NHS, Mr Miliband has aggressively pushed to place global climate policy and overseas development back at the heart of Government strategy, taking up Britain's seat at the World Bank as an early statement of intent.
No 10 points to manifesto commitment
Responding to reports of Mr Burnham's support for reinstating the 0.7% benchmark, a No 10 source pointed to Labour's manifesto, which states that the party is "committed to restoring development spending at the level of 0.7 per cent of GNI as soon as fiscal circumstances allow".
