UK

It looked like the moment Sir Keir Starmer had reached a turning point after spending his first six months as prime minister tumbling in the polls.He hugged Volodymyr Zelensky close and offered the heroic Ukrainian president support after Donald Trump and JD Vance’s White House ambush.With work underway to establish and lead – alongside Emmanuel Macron – a ‘coalition of the willing’, it looked like European and other Ukrainian allies were preparing to step up where the US was walking away.Prime minister Keir Starmer holds a press conference at the British Residence in Paris on Thursday More

After announcing the largest package of government cuts since 2015 on Tuesday, Rachel Reeves was likely prepared to rebut accusations that Labour is returning Britain to a programme of austerity.Around £4.8 billion is set to be slashed from welfare spending over the next five years, the chancellor confirmed in her spring statement, with the changes set to plunge at least 250,000 into poverty. At least 50,000 of these will be children, figures from the government’s own analysis finds.Her announcement has led several economists to draw a comparison to the austerity measures pursued by Conservative governments in the 2010s, which saw a series of swingeing cuts to public services made to balance Treasury books.But “this is a far cry from what we saw in the Conservative years,” the chancellor said in an interview with ITV News.”The austerity period, particularly 2010 to 2015, when Cameron and Osborne were prime minister and chancellor, there were cuts every year in spending, and there were cuts to capital spending as well. So we’re increasing spending in every year now,” she added.But the exact definition of the term is a bit of a grey area, and not everyone seems as convinced as the chancellor that UK has seen the back of austerity. Least of all the British public, recent polling would suggest. According to a new poll from think tank More in Common, just over half of Britons say they think the country is either returning to austerity or never left it.Here, we look at the numbers behind the claims, and assess whether the UK is really seeing a ‘new austerity’:What is austerity?Austerity is a fiscal policy approach used to reduce government debts, through a combination of reducing government spending and increasing tax revenues. In the fallout from Covid and the energy crisis, the UK’s national debt reached its highest levels since the 1960s.Since the beginning of this century, government debt has increased from 33 per cent of GDP to nearly 100 per cent of GDP, according to the Office for Budget Responsibility (OBR). As a result, Chancellor Rachel Reeves is making cutting government debt a key focus, saying in one of her first addresses to Parliament in July: “If we cannot afford it, we cannot do it”. The new set of cuts and changes to Britain’s welfare will be seen as a form of austerity to some – albeit more staggered and smaller than those under the coalition government. But despite the cuts, the welfare budget overall is still forecasted to increase in cash-terms until 2029/30, so in net terms, the sector will not see losses.What cuts has the Labour government made? The Chancellor said yesterday that welfare spending will go down as a proportion of GDP over the forecast period. The OBR has estimated that changes to incapacity and disability benefits will reduce spending by £6.4 billion by 2029/30, while the overall changes to the welfare package will cut £4.8 billion.Meanwhile, the IFS projects that the cuts to working-age benefits specifically will save £4.2 billion by the end of this Parliament, in today’s prices.It will become harder to be eligible for Personal Independence Payments (PIP), which will impact around 800,000 people, according to the government’s own assessment of the new benefits cuts.Some 370,000 of these people affected are already receiving PIP, and could lose an average of £4,500 a year.The Universal Credit health rate is also set to be slashed by 50 per cent, while the basic UC rate will increase by more than expected, to £106 a week by 2029. The government has also floated an age restriction to the UC health benefit, which would make under-22s ineligible to claim.How does this stack up against Tory cuts?The cuts to welfare announced in yesterday’s Spring Statement are the fifth largest since 2010, according to research from the Institute for Fiscal Studies (IFS).The first two budgets introduced by David Cameron’s coalition government in June and November of 2010, amounted to a combined £17 billion in welfare savings (in 2025/6 prices) from cutting working-age benefits.Meanwhile in 2015, then-chancellor George Osborne announced a second Budget after Conservatives won the summer election, which contained the single highest cuts to welfare in this century (£15.9 billion).By comparison, the current government’s cuts, at £4.2 billion in net savings by 2029/30 from working age benefits, are just a small fraction (less than a third) of the 2015 cuts, and a quarter of those in the coalition’s first year.Over the whole decade of Tory leadership before Covid, 2010-19, these savings from cutting working-age welfare added up to £44.6 billion, according to the IFS.So far, the government has not announced cuts to day-to-day spending in other departments. But this spending is set to increase by an average of just 1.3 per cent above inflation overall.With higher spending boosts needed in defence and the NHS, other unprotected areas like schools and prisons are likely to feel the squeeze come June’s spending review. It is unclear how these inevitable cuts to public services, which have not yet been announced, will map up against the previous government.Over the coalition and Conservative governments, day-to-day spending on public services decreased until 2018-19, according to the IFS. ( More

Reform UK is unlikely to receive a record-breaking multimillion-pound donation from Elon Musk, Nigel Farage appears to have conceded. The former Ukip leader said the idea of a mega-donation from the X boss and ‘first buddy’ of Donald Trump had been “massively over-exaggerated”. The two men fell out spectacularly earlier this year, with Mr Musk even calling for a new leader for Reform, but now talk and text each other. Asked about the mega-donation, he called Mr Musk a “hero” for buying the social media platform but admitted they took a “different view” in their row over jailed far-right political activist Tommy Robinson.Reform UK leader Nigel Farage (PA) More

Labour’s plan to support more people into work through cost-cutting welfare reforms has been called into question by the Office for Budget Responsibility’s (OBR) own economic forecast.Released to accompany the party’s spring statement, the spending watchdog’s report said it was not provided with an analysis of how the reforms could boost employment, adding it was also unable to make its own in the limited time available.The revelation follows accusations Rachel Reeves “rushed” welfare reforms in light of pressure from the OBR to secure a larger fiscal headroom.The chancellor laid out more details of Labour’s planned £4.8 billion in welfare cuts on Wednesday as she delivered the new government’s first spring statement in power.Rachel Reeves has been accused by the opposition of rushing welfare reforms More

Pensioners and the wealthy could face another shock tax raid by Rachel Reeves in October, leading economists have warned. It comes amid concerns that the chancellor has not left herself enough headroom in the finances to withstand changes in the economy. Ms Reeves is also locked in a row over suggestions that instead of making people £500 better off, the poorest will end up being £500 worse off.Paul Johnson, the director of the highly-respected Institute for Fiscal Studies (IFS) think tank, said in his post-spring statement briefing that the chancellor had left herself exposed to minor forecast changes and warned there was a “good chance” she would need to raise taxes in her autumn Budget. Mr Johnson said he was concerned pensions “look like a juicy place to go for a lot of money”. “That risks months of speculation over what those tax rises might be – a raid on pensions, a wealth tax on the richest, another hike to capital gains tax?” The Chancellor Rachel Reeves (Ben Stansall/PA) More

Embattled chancellor Rachel Reeves has begged Donald Trump not to impose crippling tariffs on UK car exports next week.It comes as business secretary Jonathan Reynolds urged colleagues to “keep cool heads” amid growing concerns that a trade war will create a black hole in the UK accounts. The fears come just as the chancellor had imposed eyewatering cuts on benefits to balance the books.Ms Reeves disclosed the government is in emergency talks with the US to stop the levy, which is due to take effect next Wednesday.But the Office of Budget Responsibility (OBR) has warned that the £10bn of headroom she created to give herself some flexibility to deal with unforeseen events will be wiped out if tariffs come in on Wednesday next week.In a stark warning against counter measures, OBR chair Richard Hughes warned that “in a worst case scenario” if the UK were to retaliate the country would lose 1 per cent of GDP.Rachel Reeves says UK not planning retaliatory tariffs on US “at the moment” More

Key takeaways from Rachel Reeves’ spring statementRachel Reeves may have to raise taxes or introduce further spending cuts in her October budget, leading economists have warned.The Institute for Fiscal Studies (IFS), an economics-focused think tank, warned after her spring statement that Ms Reeves had left herself open to six months of “damaging speculation and uncertainty over tax policy”.While the chancellor restored her £9.9 billion headroom of spending power with cuts made in the statement, the IFS warned the buffer is small by historic standards.This risks the need for further cuts, or even tax rises at the autumn budget, if Ms Reeves is to adhere to her self-imposed fiscal rules to not borrow cash to pay for day-to-day public spending.IFS director Paul Johnson said he was concerned pensions “look like a juicy place to go for a lot of money”. “That risks months of speculation over what those tax rises might be – a raid on pensions, a wealth tax on the richest, another hike to capital gains tax?”Ms Reeves has denied there would be further tax rises or spending cuts at the Budget in the autumn but stopped short of ruling them out entirely.Starmer refuses to rule out further tax rises Sir Keir Starmer said the decision not to increase tax at the spring statement “indicates the mindset” of the government when asked if there would be hikes in the autumn.The prime minister declined to explicitly rule out the prospect of tax rises in the budget later this year, but said ministers had “kept good” to manifesto promises not to raise certain taxes.He said: “The first thing to say is we haven’t raised tax in the spring statement, and I think at every press conference I did before yesterday, the challenge to me was, ‘you’re going to have to raise taxes in the spring statement, aren’t you?’“And I said ‘wait ’til the spring statement’, we got the spring statement and we haven’t (raised taxes).“What we’ve done is build on the stability that we need and to go further and faster on security and growth in what is undoubtedly a changed world.“We did have manifesto commitments in relation to tax and what taxes we wouldn’t raise, and we kept good to those promises.“Obviously, I’m not going to write future budgets – every prime minister and chancellor from every government always takes that position.“But if you look at the pattern, if you like, or the intent for both the budget and the spring statement, you’ll see that when it comes to the decisions we’ve had to make, we have not taken the decision to increase tax, and I think that indicates the mindset that we bring to this.”Jabed Ahmed27 March 2025 14:46Starmer says all options ‘on the table’ in response to Trump’s latest tariffs All options remain “on the table” for responding to tariffs, the Prime Minister has said in response to Donald Trump’s announcement of new levies on cars.Sir Keir Starmer told a press conference in Paris: “Tariffs are very concerning, there’s no doubt about that, and I’m very clear in my mind that the sector, the industry doesn’t want a trade war.“And that’s why first and foremost we have got to work with the sector, work with the industry in our response to this.“I think we need to keep, as ever, pragmatic and clear-eyed. We are engaged, as you know, in intense discussions with the US on economic arrangements on a number of fronts, but including to mitigate tariffs, and we will continue in that way because I think that rather than jumping into a trade war it is better pragmatically to come to an agreed way forward on this, if we can, and that’s why we’re intensely engaging in the way that we are.“But look, we always have to put the national interest first and that’s why I’ve also been clear that as we’ve engaged in those negotiations, those discussions, we will keep all options on the table.“The industry doesn’t want a trade war, but it’s important we keep all options on the table.“But I’m working hard with others to make progress on economic arrangements which I hope will better serve our country than a trade war which will not in my view.”Jabed Ahmed27 March 2025 14:42Comment | Labour’s big betrayal: This war on the poor will backfire badly – not least among its own MPsOur chief political commentator John Rentoul writes: Labour’s war on the poor will backfire badly – not least among its MPsWorryingly for Starmer and Reeves, MPs elected last year are starting to go public with their opposition to welfare cuts, writes John Rentoul – and there are growing numbers prepared to vote against the government. Some believe welfare will be a bigger electoral albatross for the party than tuition fees was for the Lib DemsJabed Ahmed27 March 2025 14:39’Russia is filibustering’: Starmer calls for Ukraine peace talks deadlineSir Keir Starmer has accused Vladimir Putin of “filibustering” to delay Donald Trump’s peace talks. He said: “They are playing games, and they’re playing for time. It is a classic from the Putin playbook.”The prime minister said allies in Paris agreed “we should be setting a framework and a deadline of delivering real progress, and that we should hold them to that deadline”. He added: “We’ve agreed that we must go further now to support the peace process, support Ukraine and increase the pressure on Russia to get serious.”Defence secretary John Healey will chair the next Ukraine contact group meeting on 11 April to deliver “more military aid and keep Ukraine in the fight because peace comes through strength”.The prime minister said allies had agreed to increase sanctions and bring Russia to the table “in days and weeks, not months and months”. He warned: “We are in the mood for deadlines.”Sir Keir said the allies discussed a “full or partial ceasefire” leading to a “just and lasting peace”. He added: “That remains our shared goal.”The UK, French and German chiefs of defence will meet in Ukraine to discuss support for Kyiv. Sir Keir said: “The coalition of the willing is stronger and broader than it’s ever been.”He added: “This will require the engagement and support of the United States,” but insisted allies are “more resolute today” than in recent weeks.Follow our coverage of the Ukraine war below: Jabed Ahmed27 March 2025 14:30Labour MP asks if government can ‘find a lost moral compass’ after aid cutsA Labour MP has asked if the government can rediscover its moral compass after aid cuts.Barry Gardiner (Brent West) said he was unhappy aid had been reduced to 0.3% of GDP in order to fund higher defence spending.Mr Gardiner said: “I was proud to serve in this House when Tony Blair and Gordon Brown established the department for international development and when they established the ‘drop the debt’ campaign.“I was proud when the leader and I stood on a manifesto which committed us, promised that we would restore the international aid budget to 0.7% of GNI. So could we have a debate please in Government time on how it may be possible to find a lost moral compass.”Commons leader Lucy Powell said: “We all share the pride that the previous Labour government did in the area of debt reduction and aid for some of the poorest countries across the world. We’re also proud that we have a commitment which remains to returning our aid budget to 0.7% of GDP.”Ms Powell then referred to the statement to the Commons by Sir Keir Starmer announcing the extra defence spending and aid budget cut. She added: “We remain absolutely committed to returning the aid budget to the 0.7% levels we said.”Jabed Ahmed27 March 2025 14:22Downing Street says government has made ‘generous offer’ to British SteelDowning Street said the Government had made a “generous offer” to British Steel.The Prime Minister’s official spokesman said: “We’ve made a generous offer to British Steel designed to deliver a sustainable future for staff, industry and the local community… we’ve got a two and half billion-pound plan to rebuild the sector.“We will continue to work with British Steel and with the company’s owners to secure its future and deliver a good outcome.“But we’ve made that offer and that’s obviously up to the company involved.”For context,British Steel, the second-largest producer in the country, has launched a redundancy consultation on shutting two blast furnaces in Scunthorpe. More than half of the company’s 3,500-strong workforce could potentially be impacted.The full report below: Jabed Ahmed27 March 2025 14:06Downing Street ‘disappointed’ by US car tariffs and vows to protect national interestDowning Street said the UK was “disappointed” by the US decision to impose tariffs on the car industry and would “not hesitate to respond in the national interest”.But Number 10 said Britain was seeking a “pragmatic approach” with ongoing “productive” discussions about a wider economic deal.The prime minister’s official spokesman said: “We are obviously disappointed by the US decision to impose global tariffs on the auto industry, and I think, as we said previously, we’ll keep all options on the table and we’ll always take a position that protects the national interest.“But also as we’ve said we’re taking a pragmatic approach to our discussions with the United States. We continue to have productive discussions on securing a wider economic deal.“These conversations are ongoing and are going to continue.”Asked whether the prime minister was worried the UK looked weak, he said: “We’re going to keep all options on the table and will never hesitate to respond in the national interest, but we’re taking a pragmatic approach.”( More