Sir Keir Starmer slashed the aid budget to fund a dramatic increase in defence spending in response to “tyrant” Vladimir Putin and uncertainty over US President Donald Trump’s commitment to European security.
The Prime Minister said spending on defence would rise from its current 2.3% share of the economy to 2.5% in 2027.
That will mean spending £13.4 billion more every year from 2027, something which Sir Keir acknowledged required “extremely difficult and painful choices”.
He said he wanted that figure to reach 3% of gross domestic product during the next parliament.
But to fund it, development assistance aid will be slashed from its current level of 0.5% of gross national income to 0.3% in 2027.
Sir Keir said the plan amounted to “the biggest sustained increase in defence spending since the end of the Cold War”.
Taking spending on the security and intelligence services into account as well as defence, the budget will amount to a 2.6% share of the economy from 2027.
“We must change our national security posture, because a generational challenge requires a generational response,” he said.
“That will demand some extremely difficult and painful choices.
“And through those choices, as hard as they are, we must also seek unity, a whole society effort that will reach into the lives, industries and the homes of the British people.”
Sir Keir will travel to Washington later this week for talks with the US president, who has repeatedly pushed for Europe to increase its defence spending.
Setting out the need for the UK to respond, the Prime Minister told MPs: “One of the great lessons of our history is that instability in Europe will always wash up on our shores and that tyrants like (Vladimir) Putin only respond to strength.”
He said the UK must stand by Ukraine but “as the nature of that conflict changes, as it has in recent weeks, it brings our response into sharper focus, a new era that we must meet”.
Mr Trump has opened talks with Russian president Mr Putin to end the Ukraine war, putting the transatlantic alliance under severe strain by overriding the concerns of Europe and Kyiv.
The Prime Minister told the Commons: “We must reject any false choice between our allies, between one side of the Atlantic or the other that is against our history, country and party, because it’s against our fundamental national interest.”
The US-UK relationship “survived countless external challenges in the past”.
“So this week, when I meet President Trump, I will be clear I want this relationship to go from strength to strength.”
But Sir Keir, who has been involved in frequent talks with European leaders in recent days, said he would find “new ways to work together” with allies on the continent.
