UK Politics

Britain’s spending watchdog has issued a dire warning over the public finances claiming they are in a “relatively vulnerable position”.In the first major assessment since Keir Starmer greenlighted two major U-turns on welfare in the last month, the Office of Budget Responsibility (OBR) has warned that recent attempts to shore up the government’s balance sheet are only showing limited success. The health check on the economy will raise further questions about the position of chancellor Rachel Reeves who was in tears during PMQs last week as Sir Keir failed to guarantee her future. It was only after the markets reacted badly to the uncertainty over who would run the Treasury that the prime minister publicly backed her.Rachel Reeves is under huge pressure ahead of the Budget this autumn More

The government spending watchdog set alarm bells ringing in the Treasury on Tuesday with the release of a report laying bare the perilous state of Britain’s public finances. The Office for Budget Responsibility (OBR) said spending, borrowing, and the size of the government debt pile are all set to soar in the decades to come. It blamed the government’s inability to commit to tax hikes and spending cuts, a nod to Sir Keir Starmer’s recent welfare U-turns, but laid out a wider set of warnings about the dangerous path ahead for the government. The Independent looks at the six starkest warnings in the OBR’s report. Britain’s public finances in ‘relatively vulnerable position’ Britain’s public finances have been left in a “relatively vulnerable position” by successive governments, the OBR warned. It blamed the “major shocks” of the Covid pandemic and energy crisis in the wake of Vladimir Putin’s invasion of Ukraine for the scale of the increase in debt since 2010. But it also said efforts to return the public finances to a more sustainable footing “have met with only limited and temporary success in recent years”. It said debt has continued to rise because successive governments reversed planned tax rises and, pointing to Sir Keir’s recent U-turns, abandoned public spending cuts. Climate change to slash GDP The OBR also highlighted the threat of climate change to Britain’s economy, warning that it “poses significant risks” to GDP. The watchdog said the costs of mitigating the impact of climate change, repairing the damage it causes and adapting to new weather extremes were all likely to affect government spending and the wider economy.There is “an increasing likelihood of more severe impacts of climate change on economies”, the OBR said, as the latest analysis now accounted for “the impacts of higher precipitation and temperature variability”.As a result, the OBR has updated its estimates for the economic damage caused by climate change in both its best case scenario – 2C of warming – and its worst case, an increase of 3C.GDP could fall by 3.3 per cent by 2060 in the event of 2C warming, the watchdog said, and 7.8 per cent by 2060 in the 3C scenario.State pension triple lockThe cost of the state pension triple lock is set to be three times higher by the end of the decade than its original estimate, the OBR said. It said the cost of the state pension has “risen steadily over the past eight decades”, from around 2 per cent of GDP in the mid-20th century to the current 5 per cent of GDP, or £138bn, and is estimated to rise to 7.7 per cent of GDP in the early 2070s.The triple-lock guarantee, first implemented in 2011, means the state pension increases year-on-year by the highest of three measures. These are:Inflation, taken from the previous September’s Consumer Price Index (CPI) figure The average wage increase in the UK Or 2.5 per cent, if both inflation and earnings are lower than this percentage Demographic changes – more people living longer, healthier lives – and the triple lock up-rating mechanism are among the drivers for the continued rise, according to the OBR.It added: “Due to inflation and earnings volatility over its first two decades in operation, the triple lock has cost around three times more than initial expectations.” The state pension triple lock is expected to have cost an additional £15.5bn per year by the end of the decade.Unprecedented debt pile In one of the most stark warnings in the report, the OBR said that the pressures of Britain’s ageing population, rising healthcare costs and other age-related spending would see government debt soar to unprecedented levels. The OBR said borrowing will soar to more than 20 per cent of the size of the economy, while the debt pile is expected to surpass 270 per cent of GDP by the early 2070s.Inability to respond to future shocks The OBR said Britain’s support through Covid and the energy crisis after Russia’s invasion of Ukraine was relatively generous compared to advanced economies. And it cited the shocks as part of the reason the debt pile has grown so much. But it warned that, as a result, Britain’s ability to respond to future shocks has been substantially eroded. “The government has left itself very small margins against its objectives of restoring the current budget to balance and getting net financial liabilities to fall by the end of the decade,” the OBR said. But it warned that, despite pressure on the public finances, the public expectation of how much government support should be available appears to be growing. Trump and rising tensions around the worldThe OBR said one of the biggest increases in risk since its last report has come from “rising geopolitical tensions” and global tariff rates being hiked to their highest level in more than a century. As well, European leaders have been put under significant pressure to hike defence spending to post-Cold War highs. Both have been pushed through by Donald Trump since his re-election, highlighting the scale of the challenge the US president has posed for the chancellor. More

Norman Tebbit, the eurosceptic, anti-immigration former cabinet minister known as one of Margaret Thatcher’s most loyal supporters, has died aged 94.The Conservative grandee, who served as employment secretary and Conservative Party chairman in the 1980s, played a key role in Tory politics for a generation and would remain one of the biggest influences on the rightwing until his late years. As employment secretary he took on the trade unions and told Britain’s 3 million unemployed to “get on your bike” to find a job. As chairman of the Conservative Party from 1985 to 1987 he helped Mrs Thatcher secure her third general election victory.Tributes poured in following the news of Lord Tebbit’s death More

The Post Office Horizon scandal saw approximately 1,000 subpostmasters wrongfully prosecuted in what has been dubbed as the worst miscarriage of justice in British legal history.On Tuesday, the scale of the human impact of the scandal was revealed as the first volume of the public inquiry’s final report was published.Chairman Sir Wyn Williams concluded that a “number of senior” people at the organisation were aware that the system, known as Legacy Horizon, was capable of error up until it was changed in 2010. Some employees were also aware that the updated system, Horizon Online, also had bugs and defects.Sir Wyn Williams More

Watch live as Emmanuel Macron begins a state visit to the UK on Tuesday, 8 July, with the French president set to meet Sir Keir Starmer and King Charles III as part of his three-day trip.Mr Macron and his wife, Brigitte Macron, were greeted by the Prince and Princess of Wales upon arriving at RAF Northolt.During the first state visit by a French president since 2008, Mr Macron will be hosted by the King and is expected to address parliament as his predecessor-but-one, Nicolas Sarkozy, did during his trip.Top of the agenda for Mr Macron and Sir Keir is likely to be discussions on small boat crossings as the British PM presses for more help in stopping them from travelling across the Channel.The total number of people crossing the Channel in small boats this year has passed 20,000, with the total now standing at 21,117 according to PA news agency analysis of Home Office figures.Ministers have been urging France to amend its rules to allow police to intervene when boats are in shallow water, rather than requiring them to still be on land.Later on Tuesday, Mr Macron and his wife will be welcomed by the King and Queen in Windsor town centre and take a carriage procession with the royals to Windsor Castle.There will then be a ceremonial welcome at Windsor Castle and an inspection of the Guard of Honour, followed by lunch with members of the royal family.Mr Macron will later visit Westminster Abbey to lay a wreath at the Grave of the Unknown Warrior before giving an address in the Royal Gallery at the Palace of Westminster. He will later receive Kemi Badenoch and Sir Ed Davey at Lancaster House, before a state banquet at Windsor Castle with speeches from both the King and Mr Macron. More

Conservative politician Norman Tebbit, a key ally of Prime Minister Margaret Thatcher in her free-market transformation of Britain, has died at the age of 94, his family said Tuesday.Tebbit’s son William said he died peacefully at home late Monday. No cause was given.Tebbit was known for his role tackling the power of Britain’s trade unions during the 1980s, and for his socially conservative and free-market views.He was famed for suggesting the unemployed should get on their bikes to look for work, and for what became known as Tebbit’s “cricket test” – his 1990 assertion that immigrants could not truly be British until they cheered for England at cricket, rather than India, Pakistan or the West Indies.Current Conservative Party leader Kemi Badenoch said Tebbit was “an icon in British politics.”“He was one of the leading exponents of the philosophy we now know as Thatcherism and his unstinting service in the pursuit of improving our country should be held up as an inspiration to all Conservatives,” she said. “He never buckled under pressure and he never compromised.”A political bruiser known for no-holds-barred attacks on the opposition, Tebbit was nicknamed the “Chingford skinhead” by opponents. Michael Foot, who led the Labour Party in the 1980s, called him a “semi-house-trained polecat.”However, even Tebbit’s critics praised his stoic response to the Irish Republican Army bombing of Brighton’s Grand Hotel during the Conservative Party conference in 1984. Five people were killed in the bombing, an attempt to kill Thatcher. Tebbit was seriously wounded and his wife Margaret was paralyzed from the neck down.Elected to the House of Commons in 1970, Tebbit served as employment secretary and trade secretary under Thatcher. In 1985 he was appointed chairman of the Conservative Party, helping Thatcher win a third straight election victory in 1987.The same year, he stepped down from the government so he could spend more time with his wife. In 1992 he was appointed to the House of Lords, Parliament’s unelected upper chamber.He continued to speak out, especially on Britain’s increasingly close relationship with Europe, about which he was skeptical. He was a prominent advocate of Britain’s departure from the European Union, an issue that divided his party and the country.After a 1998 peace accord ended three decades of violence in Northern Ireland, many former militants entered politics, But Tebbit did not forgive. When the former IRA commander Martin McGuinness — who had become deputy first minister of Northern Ireland — died in 2017, Tebbit expressed hope he was “parked in a particularly hot and unpleasant corner of hell for the rest of eternity.”Margaret Tebbit died in 2020. Tebbit is survived by two sons and a daughter. More

Trying to get to the bottom of the mysteries by some of Britain’s greatest detective fiction writers helped foster Bridget Phillipson’s love for reading, she has revealed.Writing for The Independent, the education secretary told how she could not get enough of Arthur Conan Doyle’s Sherlock Holmes books or the mysteries in Agatha Christie’s Hercules Poirot.It comes as Ms Phillipson announced that next year will be the National Year of Reading in the UK to encourage a love of books among children.The education secretary enjoyed reading Arthur Conan Doyle’s Sherlock Holmes books as she grew up More