Sir Keir Starmer positions himself as PM-in-waiting as psychodramas engulf Westminster and Holyrood
As the Conservatives in Westminster tied themselves in knots over whether to back the Privileges Committee condemnation of Boris Johnson and the SNP’s Humza Yousaf sought to revive independence plans with his party still in crisis, Sir Keir Starmer went to Leith in Scotland to set out his mission to turbo-charge renewable energy in the UK should he become PM.
His target is for Britain to produce all its electricity from low-carbon energy sources – nuclear, wind and solar – by 2030. To do it is a bold plan to borrow £100bn+ over the course of the next parliament to transition the country away from fossil fuels to green energy.
By far Labour’s single biggest spending commitment, the party had pledged to borrow £28bn-a-year to fund the flagship green transition programme, but has since scaled back borrowing plans amid growing concerns about taking on debt as the cost of borrowing rises on the back of higher interest rates.
Instead, Labour will gradually ramp up borrowing to that level in the “second half of the parliament” if it wins the next general election.
But the plan is still huge – undoubtedly the single most radical policy of Sir Keir’s Labour government should he win the next election. Labour’s green subsidies amount to more in relative terms than US President Joe Biden’s own green economy plan – the inflation reduction act – which has earmarked $37bn in subsidies.
The money will be used to launch a state-run company GB Energy to invest in renewables, with £2.5bn in direct subsidies to green energy providers who contract to manufacture in the UK – the ‘British jobs bonus’ as Sir Keir puts it. He says it will create nearly 500,000 new direct and indirect jobs.
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Starmer outlines energy plans
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The driving purpose of the plan is to drive down energy bills – with Labour claiming that it will take £1,400 off average bills if it can hit the 2030 target.
It is also about transforming the economy in order to better fund public services.
Sir Keir is clear that this is the sort of “activist industrial policy” Britain needs for the longer term, but for voters looking to Labour to commit money to schools, hospitals and transport in the next election, this could prove a hard sell with the amount Labour is willing to borrow to subsidise green technologies dwarfing other commitments for public services.
“We are going to put money into public services,” explains one senior Labour figure. “But we have to grow the economy as the first step. Being clear about stable finances and sticking to it is the best way to turnaround the country.”
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‘We are doubling down not backing off’
But while the level of borrowing has raised eyebrows, and afforded the Conservatives a “borrowing bombshell” attack line, the plans to block new oil and gas developments in the North Sea as part of the renewables revolution has provoked widespread criticism from industry and union figures fearful of widespread job losses.
Douglas Ross, the Scottish Conservative leader, on Monday said Labour’s plans put “tens of thousands of Scottish jobs a risk”.
The criticisms have prompted another policy tweak as Sir Keir promised not to revoke any fossil fuel extraction licenses granted before the next general election, even though it could take years before those new fields begin producing.
This allows the Labour leader to insist existing jobs in oil and gas are not at risk, but there’s no doubt that as production is gradually wound down, this will be a momentous shift for a sector that supports nearly 200,000 jobs in the UK.
There is also the question of whether the Labour leader can actually deliver what he is pledging in this five years. Sir Dieter Helm, professor of economic policy at Oxford University, who has advised the government on energy policy over many years, said last week the goal was unlikely to succeed on the current trajectory.
When I pressed Sir Keir in an interview in Leith on Monday if the “clean power by 2030” pledge was a guarantee or a target he demurred, he said it was his “ambition” and he believed to be “doable”. Not an explicit guarantee then, and for good reason.
There is also a question about credibility and commitment after the Labour party U-turned on its promise to borrow £28bn-a-year from the beginning of the parliament in order to scale up renewable industry.
‘Doubling down’
The leadership has insisted it is still totally committed to the plan, but has had to scale back commitments in the near-to-medium term as the high cost of borrowing hits against Labour’s fiscal rules (no borrowing to fund day-to-day spending and net debt must be falling as a percentage of GDP at end of the rolling five-year period).
When I asked Sir Keir on Monday if the U-turn on the financial commitment in the first half of the parliament showed – as with Brexit, tuition fees, and re-nationalisations – that he can’t be trusted to keep his promises, he said it showed the opposite, that he was “doubling down” on the plan.
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Starmer hits out at ‘Tory crap’
“It is a matter of trust,” he told me.
“Rachel [Reeves] – we set out fiscal rules two or more years ago. Inflation is in a completely different place to where it was… but at the same time as we work through our plans and set out what we want to do in years one, two and three, it is clear we can ramp up to that £28bn and when I say to people in the sector, I want clean power by 2030, they don’t say you’re backing down, they say that’s a real challenge.”
On the timing of this announcement, there is of course a risk that Sir Keir’s missions get drowned out by the dramas back in Westminster. There was some discussion about whether to pull the announcement, but in the end Sir Keir decided that he wanted to get on talking about how he might lead Britain than, to quote one ally, get “bogged down in the psychodrama” of what’s going on in Westminster.
“Doesn’t it speak volumes that the Labour Party is today launching a plan for the next generation of jobs, whilst the Tories are squabbling back in Westminster, and the SNP are preaching about promises they’ve broken?” observed the Labour leader when I asked him about the current state of his rivals.
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Sir Keir wants to use these “mission statements” to position himself as a leader-in-waiting as the current prime minister Rishi Sunak finds his agenda hijacked by the failings of his predecessor and party infighting once more.
But the agenda on Monday is very much about parking Labour’s tanks on the SNP’s lawns too, given that there is no route to Number 10 for Sir Keir that doesn’t go through Scotland. Locating GB Energy in Scotland is designed to firmly park his tanks on the SNP’s lawn.
A poll out over the weekend suggested Labour was on course to take 26 seats in the next general election – an incredible change in fortunes from the single seat it picked up in 2019 – as the departure of Nicola Sturgeon and her subsequent arrest (she was released without charge) over the police probe into SNP finance leaves the party battered and bruised.
“Nicola Sturgeon not being first minister obviously provides a space and an opportunity that simply wasn’t there before,” acknowledges one senior figure.
“But there’s no rule that anybody disillusioned with either the Tories or the SNP necessarily swaps columns to us. Anyone who thinks we can flatline is heading for defeat at the next election. We’ve got to go up at the end, which is why we’re going to continue in this way.”
Donald Trump has announced a 10% trade tariff on all imports from the UK – as he unleashed sweeping tariffs across the globe.
Speaking at a White House event entitled “Make America Wealthy Again”, the president held up a chart detailing the worst offenders – which also showed the new tariffs the US would be imposing.
“This is Liberation Day,” he told a cheering audience of supporters, while hitting out at foreign “cheaters”.
Follow live: Trump tariffs latest
He claimed “trillions” of dollars from the “reciprocal” levies he was imposing on others’ trade barriers would provide relief for the US taxpayer and restore US jobs and factories.
Mr Trump said the US has been “looted, pillaged, raped, plundered” by other nations.
Pic: AP
His first tariff announcement was a 25% duty on all car imports from midnight – 5am on Thursday, UK time.
Mr Trump confirmed the European Union would face a 20% reciprocal tariff on all other imports. China’s rate was set at 34%.
The UK’s rate of 10% was perhaps a shot across the bows over the country’s 20% VAT rate, though the president’s board suggested a 10% tariff imbalance between the two nations.
It was also confirmed that further US tariffs were planned on some individual sectors including semiconductors, pharmaceuticals and critical mineral imports.
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Trump’s tariffs explained
The ramping up of duties promises to be painful for the global economy. Tariffs on steel and aluminium are already in effect.
The UK government signalled there would be no immediate retaliation.
Business and Trade Secretary Jonathan Reynolds said: “We will always act in the best interests of UK businesses and consumers. That’s why, throughout the last few weeks, the government has been fully focused on negotiating an economic deal with the United States that strengthens our existing fair and balanced trading relationship.
“The US is our closest ally, so our approach is to remain calm and committed to doing this deal, which we hope will mitigate the impact of what has been announced today.
“We have a range of tools at our disposal and we will not hesitate to act. We will continue to engage with UK businesses including on their assessment of the impact of any further steps we take.
“Nobody wants a trade war and our intention remains to secure a deal. But nothing is off the table and the government will do everything necessary to defend the UK’s national interest.”
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Who showed up for Trump’s tariff address?
The EU has pledged to retaliate, which is a problem for Northern Ireland.
Should that scenario play out, the region faces the prospect of rising prices because all its imports are tied to EU rules under post-Brexit trading arrangements.
It means US goods shipped to Northern Ireland would be subject to the EU’s reprisals.
The impact of a trade war would be expected to be widely negative, with tit-for-tat tariffs risking job losses, a ramping up of prices and cooling of global trade.
Research for the Institute for Public Policy Research has suggested more than 25,000 direct jobs in the UK car manufacturing industry alone could be at risk from the tariffs on car exports to the US.
The Society of Motor Manufacturers and Traders (SMMT) had said the tariff costs could not be absorbed by manufacturers and may lead to a review of output.
The tariffs now on UK exports pose a big risk to growth and the so-called headroom Chancellor Rachel Reeves was forced to restore to the public finances at the spring statement, risking further spending cuts or tax rises ahead to meet her fiscal rules.
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The rewards and risks for US as trade war intensifies
A member of the Office for Budget Responsibility (OBR), David Miles, told MPs on Tuesday that US tariffs at 20% or 25% maintained on the UK for five years would “knock out all the headroom the government currently has”.
But he added that a “very limited tariff war” that the UK stays out of could be “mildly positive”.
He said: “There’s a bit of trade that will get diverted to the UK, and some of the exports from China, for example, that would have gone to the US, they’ll be looking for a home for them in the rest of the world.
“And stuff would be available in the UK a bit cheaper than otherwise would have been. So there is one, not central scenario at all, which is very, very mildly potentially positive to the UK. All the other ones which involve the UK facing tariffs are negative, and they’re negative to very different extents.”
Israel is beginning a major expansion of its military operation in Gaza and will seize large areas of the territory, the country’s defence minister said.
Israel Katz said in a statement that there would be a large scale evacuation of the Palestinian population from fighting areas.
In a post on X, he wrote: “I call on the residents of Gaza to act now to remove Hamas and return all the hostages. This is the only way to end the war.”
He said the offensive was “expanding to crush and clean the area of terrorists and terrorist infrastructure and capture large areas that will be added to the security zones of the State of Israel”.
The expansion of Israel’s military operation in Gaza deepens its renewed offensive.
The ceasefire between Israel and Hamas that had begun in January ended in March as Israel launched various air strikes on targets across Gaza.
The deal had seen the release of dozens of hostages and hundreds of Palestinian prisoners, but collapsed before it could move to phase two, which would have involved the release of all hostages and the withdrawal of Israeli forces from Gaza.
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26 March: Anti-Hamas chants heard at protest in Gaza
The Israel Defense Forces (IDF) had already issued evacuation warnings to Gazans living around the southern city of Rafah and towards the city of Khan Yunis, telling them to move to the al Mawasi area on the shore, which was previously designated a humanitarian zone.
Israeli forces have already set up a significant buffer zone within Gaza, having expanded an area around the edge of the territory that had existed before the war, as well as a large security area in the so-called Netzarim corridor through the middle of Gaza.
This latest conflict began when Hamas launched an attack on Israel on 7 October 2023, killing around 1,200 people and taking around 250 hostages.
The ensuing Israeli offensive has killed more than 50,000 Palestinians, according to Gaza’s Hamas-run health ministry.
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Bodies of aid workers found in Gaza
Aid group Doctors Without Borders warned on Wednesday that Israel’s month-long siege of Gaza means some critical medications are now short in supply and are running out, leaving Palestinians at risk of losing vital healthcare.
“The Israeli authorities’ have condemned the people of Gaza to unbearable suffering with their deadly siege,” said Myriam Laaroussi, the group’s emergency coordinator in Gaza.
“This deliberate infliction of harm on people is like a slow death; it must end immediately.”
“Liberation day” was due to be on 1 April. But Donald Trump decided to shift it by a day because he didn’t want anyone to think it was an April fool.
It is no joke for him and it is no joke for governments globally as they brace for his tariff announcements.
It is stunning how little we know about the plans to be announced in the Rose Garden of the White House later today.
It was telling that we didn’t see the President at all on Tuesday. He and all his advisers were huddled in the West Wing, away from the cameras, finalising the tariff plans.
Follow the events of Liberation Day live as they unfold
Three key figures are central to it all.
Treasury Secretary Scott Bessent is the so-called ‘measured voice’. A former hedge fund manager, he has argued for targeted not blanket tariffs.
Peter Navarro is Trump’s senior counsellor for trade and manufacturing. A long-time aide and confidante of the president, he is a true loyalist and a firm believer in the merits of tariffs.
His economic views are well beyond mainstream economic thought – precisely why he appeals to Trump.
The third key character is Howard Lutnick, the commerce secretary and the biggest proponent of the full-throttle liberation day tariff juggernaut.
The businessman, philanthropist, Trump fundraiser and billionaire (net worth ranging between $1bn and $2bn) has been among the closest to Trump over the past 73 days of this presidency – frequently in and out of the West Wing.
If anything goes wrong, observers here in Washington suspect Trump will make Lutnick the fall guy.
What are Donald Trump’s tariffs, what is ‘liberation day’ and how does it all affect the UK?
And what if it does all go wrong? What if Trump is actually the April fool?
“It’s going to work…” his press secretary said when asked if it could all be a disaster, driving up the cost of living for Americans and creating global economic chaos.
“The president has a brilliant team who have been studying these issues for decades and we are focussed on restoring the global age of America…” Karoline Leavitt said.
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‘Days of US being ripped off are over’
Dancing to the president’s tune
My sense is that we should see “liberation day” not as the moment it’s all over in terms of negotiations for countries globally as they try to carve out deals with the White House. Rather it should be seen as the start.
Trump, as always, wants to be seen as the one calling the shots, taking control, seizing the limelight. He wants the world to dance to his tune. Today is his moment.
But beyond today, alongside the inevitable tit-for-tat retaliation, expect to see efforts by nations to seek carve-outs and to throw bones to Trump; to identify areas where trade policies can be tweaked to placate the president.
Even small offerings which change little in a material sense could give Trump the chance to spin and present himself as the winning deal maker he craves to be.
One significant challenge for foreign governments and their diplomats in Washington has been engaging the president himself with proposals he might like.
Negotiations take place with a White House team who are themselves unsure where the president will ultimately land. It’s resulted in unsatisfactory speculative negotiations.
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Treasury minister: ‘We’ll do everything to secure a deal’
Too much faith placed in the ‘special relationship’?
The UK believes it’s in a better position than most other countries globally. It sits outside the EU giving it autonomy in its trade policy, its deficit with the US is small, and Trump loves Britain.
It’s true too that the UK government has managed to accelerate trade conversations with the White House on a tariff-free trade partnership. Trump’s threats have forced conversations that would normally sit in the long grass for months.
Yet, for now, the conversations have yielded nothing firm. That’s a worry for sure. Did Keir Starmer have too much faith in the ‘special relationship’?
Downing Street will have identified areas where they can tweak trade policy to placate Trump. Cars maybe? Currently US cars into the UK carry a 10% tariff. Digital services perhaps?
US food? Unlikely – there are non-tariff barriers on US food because the consensus seems to be that chlorinated chicken and the like isn’t something UK consumers want.
Easier access to UK financial services maybe? More visas for Americans?
For now though, everyone is waiting to see what Trump does before they either retaliate or relent and lower their own market barriers.
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