Baroness Chapman of Darlington has been appointed the new minister for international development following the resignation of Anneliese Dodds, Downing Street said.
Ms Dodds quit the role over the Government’s decision to cut overseas aid to fund a boost to defence spending.
In her resignation letter to Sir Keir Starmer, Ms Dodds said she knew there were no “easy paths” to increase defence spending, but that she disagreed with the decision for aid to “absorb the entire burden”.
Lady Chapman, her replacement as international development minister, is seen as a long-term ally of the Prime Minister.
The Labour peer, a former MP for Darlington, served as Sir Keir’s political secretary between 2020 and 2021.
She also served as a shadow Cabinet Office minister when Labour was in opposition.
Earlier this week, the Prime Minister announced that defence spending will be increasing to 2.5% of GDP by 2027, with a view to it hitting 3% in the next parliament.
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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.
Ms Dodds warned that the move would affect the UK’s support for Gaza, Sudan and Ukraine and could lead to the UK being shut out of multilateral bodies.
The Labour MP for Oxford East posted on X, formerly Twitter: “It is with sadness that I have had to tender my resignation as Minister for International Development and for Women and Equalities.
“While I disagree with the ODA (Overseas Development Assistance) decision, I continue to support the Government and its determination to deliver the change our country needs.”
In his letter to Ms Dodds on Friday afternoon, the Prime Minister said: “The decision I have taken on the impact on ODA was a difficult and painful decision and not one I take lightly. We will do everything we can to return to a world where that is not the case and to rebuild a capability on development.
Chancellor Rachel Reeves defended the decision to cut aid spending in order to boost defence (Jordan Pettitt/PA)
“However, protecting our national security must always be the first duty of any government and I will always act in the best interests of the British people.”
Ms Dodds had said that she had waited to resign until after Sir Keir’s trip to Washington to meet US president Donald Trump, who has been pressuring Europe to increase defence spending.
She wrote: “Undoubtedly, the post-war global order has come crashing down.
“I believe that we must increase spending on defence as a result; and know that there are no easy paths to doing so.
“I stood ready to work with you to deliver that increased spending, knowing some might well have had to come from ODA.”
She said she had expected there would also be discussions about reaching the spending target through looking at fiscal rules and taxation.
Rachel Reeves defended the decision to cut aid spending in order to boost defence.
“Anneliese is a friend and has been a good colleague and it is disappointing to lose a colleague,” she said.
But the Chancellor added: “The decision to spend 2.5% of GDP on defence is the right decision. The world has changed, we can see that all around us in Europe and beyond.
“We have to uplift what we spend on defence and we have funded that by reducing the international aid budget.
“That is the right decision in the circumstances we face today as a nation and that is why Keir Starmer made that announcement on Tuesday this week.”
The Chancellor would not be drawn into revealing how the Government would pay for a future hike in defence spending.
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Conservative leader Kemi Badenoch said she backed Sir Keir on his decision after Ms Dodds’s resignation.
In a post on X, she said: “He may not be able to convince the ministers in his own Cabinet, but on this subject, I will back him.
“National interest always comes first.”
But Tory MP and former foreign office minister Andrew Mitchell said Ms Dodds had done the “right thing”.