Shadow chancellor to pledge further cuts to foreign aid – as Tories vow to ‘stand up for fiscal responsibility’

The Tories will pledge to make even further cuts to the foreign aid budget, as the party attempts to regain its reputation for fiscal responsibility in the wake of the Truss mini-budget.

Shadow chancellor Sir Mel Stride will unveil plans to cut overseas development aid to 0.1% of Gross National Income (GNI), down from the current 0.3%, cementing a sea change in the Conservative Party’s position on international aid.

In his keynote speech to the party conference in Manchester, Sir Mel will claim that his plans can save £47bn over the next parliament, which include cuts to welfare, the civil service, and green subsidies.

In the wake of the Truss mini-budget that saw the pound fall and interest rates soar, the senior MP will say that his party will “never, ever make fiscal commitments without spelling out exactly how they will be paid for”, and commit to fiscal responsibility.

A key part of Sir Mel’s plans to demonstrate that is to reduce foreign aid to 0.1% of GNI, or around £3bn per year – down from spending of an estimated £9.4bn in 2028-29.

The Boris Johnson government reduced aid spending to 0.5% of GNI in 2021, in order to pay for the vast public spending during the pandemic. Sir Keir Starmer announced a further cut to 0.3% of GNI earlier this year to pay for the increase in defence spending.

Bond, the network for organisations working in international development and humanitarian assistance, has hit out at the announcement, describing it as “reckless, short-sighted, and morally indefensible”.

Its chief executive, Romilly Greenhill, told Conservatives at a fringe event at the Tory Party conference on Sunday: “Let’s just be really clear, such a policy would negatively impact millions of people around the world.

“It would harm deeply vital programmes being made in reducing, eradicating, killer diseases, and it would also severely undermine our ability to respond to devastating global crises.”

But the Tories say they “cannot justify taxing people in this country to pay for billions of spending abroad”, and it marks the death-knell of Tory former prime minister David Cameron’s target of spending 0.7% of GNI on aid, announced in 2011.

Welfare, green subsidies, and asylum hotels to face the chop

Another key area where Sir Mel will pledge to make savings will be the welfare system, where they claim £23bn can be cut.

He will say that narrowing the eligibility for sickness benefits, stopping claims from people with “low-level mental health problems” who could be treated instead, limiting the VAT subsidy for Motability, and reforming job-seeking obligations are key areas where savings can be made.

But a major change will be restricting welfare to British citizens – bringing Tory party policy in line with Reform UK.

But he will vow to reverse any decision from the current Labour government to lift the two-child benefit cap, which stands in contrast with Nigel Farage’s party that wants to lift it.

Sir Mel is expected to say the reforms are essential not just for balancing the books, but for tackling the deeper social damage caused by long-term dependency.

Another key target of the shadow chancellor is the civil service, where he will argue that £8bn in savings can be made by reducing the headcount from 517,000 down to 2016 levels of 384,000.

Scrapping the Climate Change Act and “costly and ineffective green subsidies being pushed by Ed Miliband” is also on Sir Mel’s agenda. The Tories say there are savings of £1.6bn a year to be made in this area.

And closing all asylum hotels will save at least £3.5bn, the Tories say – at least £1.6bn of which they have already allocated to their new ICE-style “removals force”, to detain and remove 150,000 illegal migrants per year.

In his speech, Sir Mel Stride MP is expected to say: “The Conservative Party will never, ever make fiscal commitments without spelling out exactly how they will be paid for.

“We’re the only party that gets it. The only party that will stand up for fiscal responsibility. We must get on top of government spending.

“We cannot deliver stability unless we live within our means. No more pretending we can keep spending money we simply do not have.”

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‘Trussonomics is still in full swing’

But Labour Party chair Anna Turley said: “The Tories let welfare bills, civil service numbers and asylum hotel use skyrocket on their watch – and they’ve never apologised. Now they want to rehash failed promises from their failed manifesto to try to solve the problems they caused.

“This is the same old Tories, with the same old policies. They didn’t work then and you can’t trust them now.”

And Liberal Democrat Treasury spokeswoman Daisy Cooper said it was “clear the Conservative Party learnt absolutely nothing from their disastrous handling of the economy, which left families struggling with a cost-of-living crisis and public services on their knees”.

She added: “Cutting vital support to bring household bills down, trying to balance the books on the backs of people with mental health conditions and slashing the UK’s soft power abroad through aid budget cuts shows Trussonomics is still in full swing.”