UK funding of Unrwa goes untouched as government cuts aid to finance defence boost

The UK will continue to fund the UN agency for Palestinian refugees, Unrwa, despite swingeing cuts to the overseas aid budget as ministers seek to finance a significant defence spending boost, the JC understands.

In a speech in the House of Commons this afternoon, the Prime Minister announced plans to increase defence spending to 2.5 per cent of Gross Domestic Product (GDP) by 2027 – well above the NATO target of 2 per cent – with a target of increasing to 3 per cent in future.

This, he said, would amount to “the biggest sustained increase in defence spending since the end of the Cold War.”

Starmer told MPs ahead of a planned meeting with US President Donald Trump later this week that the increase was needed to face down “ongoing, generational challenges” such as Russia’s invasion of Ukraine and that “European allies must step up and do more for our own defence.”

The US President has been critical of European countries who he said have been over-reliant on his country for security guarantees and who have refused to meet the Nato target to spend two per cent of GDP on defence.

But Starmer added that the initial increase from the UK’s current level of 2.3 per cent would be funded by a cut in the overseas aid budget to the tune of 0.2 per cent of Gross National income (GNI) – a more expansive measure than GDP.

“That means we will cut our spending on development assistance, moving from 0.5 per cent of GNI today to 0.3 per cent in 2027 fully funding our increased investment in defence”, he explained, adding: “that is not an announcement I am happy to make.”

He maintained, however, that the government would “continue to play a key humanitarian role in Sudan, in Ukraine and in Gaza, tackling climate change, supporting multinational efforts on global health and challenges like vaccination.”

The JC understands that this means British government funding of Unrwa will remain unaffected by today’s announcement.

It comes after freed British-Israeli hostage Emily Damari told Starmer in a phone conversation that she had been held by Hamas in an Unrwa facility. The agency did not directly deny her allegations but Commissioner-General Phillipe Lazzarini said: “Unrwa has not been involved in any negotiations related to hostage releases, as it is not within its mandate.”

At PMQs on February 5, Reform UK’s deputy leader Richard Tice told MPs that Damari’s testimony confirmed “many of our fears that UNRWA is riddled with Hamas sympathisers” and urged the prime minister to “divert our aid to other more worthy causes”.

Starmer hit back at Tice’s suggestion that the government was funding terrorism, saying: “We aren’t funding Hamas, we condemn Hamas and everybody in this House should condemn Hamas”.

Meanwhile, at Labour’s annual conference in September last year, Foreign Secretary David Lammy stated proudly that one of his first achievements in government was to restore funding to UNRWA, which had been cut by the Conservative government following accusations that Unrwa staff had participated in the October 7 attacks.

Starmer’s decision in December last year to give the organisation an additional £13 million was heavily criticised by senior Conservative figures.

In June last year, the JC reported that over 100 victims of October 7 filed a lawsuit in New York against the agency, claiming that it “helped Hamas build up the terror infrastructure and personal that were necessary to carry out the October 7 attack”.

The IDF has previously found Hamas weaponry – including rockets and drones – in the organisation’s Gaza City HQ.

A Downing Street spokesperson told the JC that they would not go into specific details on planned cuts to the government’s aid programme.