Nigel Farage, the leader of Reform UK, is set to unveil a bold plan on Tuesday to slash foreign aid (Image: Getty)
Reform UK leader Nigel Farage is poised to announce a daring proposal on Tuesday, calling for a massive £25bn cut to the foreign aid budget. He argues that this move would allow Chancellor Rachel Reeves to address the public finance deficit without hiking taxes. The controversial plan also includes raising NHS fees for migrants.
Ms Reeves made a U-turn on her plans to increase income tax in her November 26 Budget last week, wary of the outcry that would follow from breaking Labour’s manifesto pledges.
Nevertheless, she is still anticipated to raise taxes next week through a combination of smaller adjustments and freezes to tax thresholds.
Reform urges cutting “unjust” payments to foreigners
Reform will propose that she instead cuts a series of “unfair” payments to foreigners, including the development budget, NHS surcharges and Universal Credit (UC) payments, as an alternative to tax increases.
Mr Farage and Zia Yusuf, the party’s head of policy, will advocate slashing the aid budget by a staggering 90 per cent, bringing it down to just £1bn. This drastic reduction would effectively wipe out nearly all bilateral aid programmes, while preserving some multilateral commitments to the UN and World Bank.
Reform estimates that the cut would raise £10bn – around half of the sum Ms Reeves is looking to find next week after an updated forecast from the Office for Budget Responsibility (OBR).
Get the latest politics news – straight from our team in Westminster and more
Invalid email
You agree you are 18 or over. We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and third parties based on our knowledge of you. You can unsubscribe at any time. More Info.
Farage demands tripling migrant health surcharge
Mr Farage will also call for the immigration health surcharge, which is paid by migrants on short-term visas in the UK, to be almost tripled to £2,718.
However, Reform argues that the surcharge should be increased to the average annual cost of treatment for any person in England, which is significantly higher, and that migrants applying for Indefinite Leave to Remain (ILR) status should pay it for the first time.
The party says that this policy would raise £5bn, and that further savings could be gleaned from its policies to reform disability payments, ban migrants from claiming UC and deport foreign-national offenders.
In a Telegraph article, Mr Yusuf slammed a “political class that insists British people tighten their belts, again and again, while they continue writing blank cheques to the rest of the world.”
Reform set to spotlight contentious foreign aid projects
Reform is also expected to highlight examples of foreign aid projects, including a £52m “road to nowhere” in Guyana, first revealed by The Telegraph in October, and more than £100m for family planning services in Pakistan.
The party’s proposals would effectively end the “unaffordable luxury” of direct aid payments by the UK to other countries.
It says the remaining £1bn would be used to “promote British interests abroad”, create a “flash fund for genuine disaster relief” and maintain commitments to the UN, World Bank and International Monetary Fund.
Starmer faced aid target cut criticism from Labour MPs and charities
Sir Keir Starmer faced a backlash from some Labour MPs and aid charities earlier this year, when he cut the previous aid target of 0.5 per cent of gross national income to 0.3 per cent by 2027, to pay for an increase in the defence budget.
Mr Yusuf said he intended Reform’s intervention to be a genuine suggestion of policies that could be adopted by Ms Reeves.
“If [she] adopted these measures tomorrow, she could save or raise £25bn this year alone, enough to plug the fiscal black hole without hammering working families with yet more tax rises,” he said.
Reeves fine-tunes tax and spending plans ahead of Budget statement
As Reform prepares to announce its plan in a press conference on Tuesday morning, Ms Reeves is making adjustments to her tax and spending plans ahead of next Wednesday’s statement.
She has already ruled out increasing income tax rates, which her team had heavily implied would be necessary, after better-than-expected forecasts from the OBR last week.
The watchdog’s latest report suggests that Ms Reeves will be required to find £20bn over the next five years to break even at this year’s Budget, and more to maintain a larger cushion of “headroom”, which she hopes will reassure the bond markets.
Nigel Farage Blasts Rachel Reeves’s £25bn Black Hole Plan: ‘Remove Unaffordable Luxury’
Nigel Farage has stepped up his attack on Rachel Reeves, arguing that the Chancellor should look at spending reductions rather than asking taxpayers to contribute more as the government prepares to deal with continuing pressure on the public finances.
The Reform UK leader has presented a plan to identify more than £25 billion in savings, describing the proposals as an alternative to tax increases. His argument is that the government should remove what Reform regards as unaffordable spending before considering additional demands on households and businesses.
The dispute goes to the heart of one of Britain’s most persistent political arguments: whether the country has a taxation problem, a spending problem, or a combination of both.
Farage’s proposals were developed ahead of the 2025 Budget, when Reform said it could identify more than £25 billion of savings in a single financial year. The party highlighted measures including ending certain benefits for foreign nationals, deporting foreign criminals and capping overseas aid.
For Farage, the argument is straightforward.
If the government can reduce spending in areas that Reform considers unnecessary, ministers would have less need to raise taxes. The party has repeatedly argued that British households are already carrying a heavy tax burden and that further increases could weaken incentives to work, invest and create businesses.
Rachel Reeves has taken a very different approach.
When she became Chancellor, Reeves argued that Labour had inherited a £22 billion gap in the public finances and said difficult decisions were necessary to restore stability. In a speech on the government’s spending plans, she said Labour had already taken measures to address the situation and had chosen to increase taxation while protecting spending on public services and investment.
The £22 billion figure itself has been the subject of political debate.
Full Fact has noted that the figure came from a Treasury assessment of pressures on departmental spending in 2024-25. The organisation also reported that the Institute for Fiscal Studies had questioned parts of the government’s presentation, while an Office for Budget Responsibility review identified £9.5 billion of additional spending pressures known to the Treasury but not incorporated into its March 2024 forecast.
That distinction is important because the political arguments surrounding the so-called “black hole” often depend on how the numbers are defined.
Reform’s criticism focuses on what it considers excessive government expenditure.
Farage has argued that politicians should not automatically respond to fiscal pressures by increasing taxes. Instead, he wants government departments to identify spending that can be reduced, programmes that can be cancelled and benefits that should be restricted.
One of Reform’s proposals involves limiting access to certain benefits for foreign nationals.
The party has also proposed deporting foreign criminals and reducing overseas aid as part of its attempt to generate savings. Reform argues that the money saved could be used to reduce the pressure on the Treasury or help avoid tax rises.
Such proposals are politically controversial because they involve questions extending beyond arithmetic.
Restricting benefits to particular groups would require detailed consideration of eligibility rules, immigration status and existing legal obligations. Deportation policies also involve legal processes, human-rights obligations and practical questions about whether destination countries will accept people being removed from Britain.
Similarly, reducing overseas aid may produce savings for the Treasury but would affect Britain’s international development commitments.
This illustrates one of the difficulties with the £25 billion argument.
Finding £25 billion in theoretical savings is different from implementing £25 billion of reductions without consequences.
Every pound removed from government spending represents a reduction in a programme, service or payment somewhere in the public sector. The political question is therefore not only how much can be saved, but what society would lose or gain as a result.
Farage’s answer is that government has expanded into areas that Britain can no longer afford.
He has frequently criticised what Reform regards as wasteful spending and has argued that the state should concentrate on essential functions such as policing, defence, healthcare and infrastructure.
That position fits into a wider Reform economic message.
The party has sought to present itself as an alternative to both Labour and the Conservatives, arguing that successive governments have allowed taxation and government expenditure to expand without delivering sufficient improvements in living standards.
Reform’s criticism of Reeves also extends to the government’s approach to economic growth.
Farage has argued that higher taxation can discourage investment and entrepreneurship. He has called for policies designed to make Britain more attractive to businesses and wealthy investors.
That argument has also appeared in Reform’s proposals for a replacement for the previous non-dom system.
In June 2025, Farage proposed a “Britannia Card” for wealthy foreign residents. Reform argued that the policy could generate additional revenue by attracting wealthy individuals to Britain, while Labour criticised the proposal as a benefit for the very wealthy. Tax expert Dan Neidle subsequently estimated that the policy could cost the Exchequer significantly more than Reform’s projected revenue.
The dispute illustrates the broader disagreement between the two political camps.
Reform argues that Britain needs lower taxes and stronger incentives for investment.
Labour argues that taxation is necessary to finance public services and investment while maintaining fiscal stability.
Reeves has also attempted to reduce regulatory burdens in selected areas.
In July 2025, she announced financial-sector reforms intended to remove what the government described as unnecessary regulatory barriers and make it easier for businesses and first-time buyers to access finance.
That means the government’s economic programme is not simply about increasing taxes.
It combines taxation with spending, regulation, public investment and efforts to encourage economic growth.
In her 2026 economic programme, Reeves continued to describe the government’s approach in terms of stability, investment and reform. She argued that previous tax increases had been necessary to deal with inherited pressures and protect public services.
The government’s defence therefore rests on a different calculation from Reform’s.
Labour’s argument is that reducing spending too aggressively could damage public services or investment and ultimately weaken the economy. Higher taxes, in this view, can provide the resources required to maintain essential services while allowing the government to invest in infrastructure and growth.
Reform disputes that logic.
Farage believes government has become too large and that taxpayers are being asked to finance spending that should be reduced.
The disagreement becomes particularly important whenever the Chancellor faces a fiscal gap.
If the Treasury needs additional money, there are several broad options: increase taxes, reduce spending, borrow more, encourage stronger economic growth, or use some combination of all four.
Each option carries different consequences.
Higher taxes can raise revenue but may affect incentives and disposable income.
Spending cuts can improve the fiscal position but may reduce public services or investment.
Borrowing can spread costs over time but increases debt and interest payments.
Growth can improve government finances without directly raising tax rates, but growth is difficult to generate quickly and cannot simply be assumed.
That is why the debate over Farage’s £25 billion proposal is ultimately about more than one number.
It concerns competing ideas about the role of government.
Farage wants a smaller state, lower taxes and substantial reductions in spending he regards as non-essential.
Reeves wants the state to maintain investment and public services while using taxation and economic reform to support fiscal stability.
There is also an important difference between political announcements and independently verified savings.
A government or opposition party can identify a potential saving, but the actual amount recovered depends on how quickly a policy can be implemented, whether legal challenges arise, how many people are affected and what secondary costs are created.
That is particularly relevant to Reform’s proposals on immigration and welfare.
If a policy reduces spending on benefits, for example, it may simultaneously increase administrative costs or require additional enforcement resources.
Likewise, reducing overseas aid produces a straightforward budgetary saving, but it also changes Britain’s international commitments.
These are questions voters will ultimately have to weigh when considering competing economic programmes.
Farage’s central message remains clear: he believes the government should “remove unaffordable luxury” rather than continually asking taxpayers for more money.
Reeves’ response is effectively the opposite: Labour believes that fiscal pressures cannot be solved simply by cutting spending and that taxation is part of the resources needed to protect services and investment.
Neither position can be assessed solely through political slogans.
The relevant questions are how much money each proposal would actually raise or save, what services would be affected, what economic consequences would follow and whether the policies could be implemented as described.
Britain’s fiscal debate is therefore likely to remain highly contentious.
As the government confronts borrowing pressures and attempts to maintain fiscal rules, Reform will continue to argue that spending reductions should come before further taxation.
For Reeves, the challenge is to demonstrate that the government’s combination of taxation, investment and reform can produce stronger growth and sustainable public finances.
For Farage, the political opportunity is to present every tax debate as evidence that the established parties have failed to control spending.
The £25 billion figure has consequently become a symbol of a much larger argument.
It represents Reform’s claim that Britain can find substantial savings by changing government priorities, while Labour maintains that difficult fiscal choices require both spending discipline and sufficient revenue.
Whether the proposed savings are sufficient, achievable and economically sustainable is ultimately a question of policy analysis rather than political rhetoric.
But Farage’s intervention has ensured that the argument over who should pay for Britain’s fiscal pressures—and what government should stop paying for—remains firmly at the centre of the political debate.