The UK’s national debt could hit 300% of GDP by the 2070s because of the string of major challenges still facing national governments after a “rapid succession of shocks”, according to a report for the Treasury.
The independent Office for Budget Responsibility (OBR) laid out how climate change, defence and the fact people are living longer all posed significant, and current, risks at a time when the public finances are already reeling from COVID, cost of living support and higher interest rates.
The OBR’s fiscal risks and sustainability report stated that the government’s plans for stabilising and then reducing debt as a share of national output were relatively modest by historical and international standards.
That was despite a previous warning from the watchdog, in March, that the UK’s tax burden was on course to hit the highest level since the Second World War by 2027/8.
Its conclusions also stated that as the baby boomer cohort retires and pushes up the cost of the so-called triple lock, state pension spending was expected to be £23bn higher in 2027/8 than at the start of the decade.
It also warned that rising take-up of electric vehicles was expected to cost £13bn a year in lost fuel duty by 2030.
The report, which looks at the long term risks, highlighted a number of immediate financial burdens including a projection that the hit from record long-term sickness in the workforce will cost the state a further £6.8bn this year in benefit payments.
It all makes for grim reading in Number 11 Downing St as the chancellor seeks an opportunity to deliver some goodies to the public ahead of the next election.
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That prospect is looking more elusive by the day.
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1:42
Hunt sets out plan to cut inflation
The OBR’s findings were delivered just hours after the latest grim set of statistics covering the economy, with official figures for May showing a contraction for gross domestic product (GDP) of 0.1%.
Perversely, a flatlining economy is actually and temporarily good news for the government and Bank of England as both seek to bring down stubbornly high inflation.
Weaker demand in reaction to rising interest rates is what Bank policymakers are looking for before they can halt the tightening cycle that has resulted in 13 consecutive increases in Bank rate to date.
Rising interest rates, and market expectations for rates, are bad news for the taxpayer as well as wider borrowers, such as mortgage holders, because they have forced up borrowing costs.
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3:14
“He talks about balancing the books, but his party crashed the economy”
Yields, the implied interest rate, on core 10-year UK government bonds hit 2008 financial crisis levels earlier this month.
Many UK IOUs are linked to inflation, making the cost of servicing the existing debt pile worse.
The OBR’s report said: “The 2020s are turning out to be a very risky era for the public finances.
“In just three years, they have been hit by the COVID pandemic in early 2020, the energy and cost-of-living crisis from mid-2021, and the sudden interest rate rises in 2022, whose consequences continue to unfold.
“This rapid succession of shocks has delivered the deepest recession in three centuries, the sharpest rise in energy prices since the 1970s, and the steepest sustained rise in borrowing costs since the 1990s.
“And they have pushed government borrowing to its highest level since the mid-1940s, the stock of government debt to its highest level since the early 1960s, and the cost of servicing that debt to its highest since the late 1980s.”
Chancellor Jeremy Hunt responded: “In common with many advanced economies, the UK’s level of debt remains elevated following recent global shocks, including the pandemic and energy prices.
“This highlights why it is important to deliver on the Prime Minister’s priority to get debt falling and to control borrowing to avoid adding inflationary pressures and risk prolonging higher inflation.
“That means taking difficult but responsible decisions on the public finances, including public sector pay, because more borrowing is itself inflationary.”
Shadow chancellor Rachel Reeves said: “This report shows just how far we are falling behind our peers, how exposed our economy is, and again highlights that the government is failing to take action in areas like energy security to help get bills down.”
She added: “It’s time for them to step aside and let Labour restore our national economic and financial security, driven by our mission to secure the highest sustained growth in the G7.”
The man suspected of abducting Madeleine McCann won’t face any charges in the foreseeable future, a prosecutor has told Sky News.
German drifter Christian B, who cannot be fully identified under his country’s privacy law, is expected to be freed from an unrelated jail sentence this year while police in three countries continue to search for evidence against him.
Prosecutor Hans Christian Wolters said: “There is currently no prospect of an indictment in the Maddie case.
“As things stand, the accused Christian B’s imprisonment will end in early September.”
Madeleine, aged three, was asleep with her younger twin siblings in the family’s Portuguese rented holiday apartment before mother Kate discovered her missing at around 10pm on 3 May, 2007.
Her parents were dining nearby on the complex with friends and taking turns to check on all their sleeping children every half an hour.
Madeleine’s disappearance has become the world’s most mysterious missing child case.
Philipp Marquort, one of Christian B’s defence lawyers, welcomed the prosecutor’s pessimism about bringing charges.
He said: “This confirms the suspicions that we have repeatedly expressed, namely that there is no reliable evidence against our client.
“We regret that we have not yet been granted access to the investigation files. We have not yet been able to effectively counter the public prejudice arising from statements made by the prosecutor’s office.”
Christian B, 47, is in jail and coming to the end of his sentence for the rape of an elderly American woman in Praia da Luz, the Portuguese resort where Madeleine disappeared.
In October, he was acquitted on a series of rape and indecent assault charges after a non-jury trial in Germany, in which several references were made to his status as the main suspect in the Madeleine case.
The prosecutor said he was awaiting the court’s written judgment before launching an appeal against the acquittal. He believes the trial judges were biased against the prosecution.
If successful, he could apply for a new arrest warrant for Christian B to keep him in custody until a retrial with new judges.
He said: “We hope that the Federal Court of Justice will decide before the end of the accused’s imprisonment. If the Federal Court follows our legal opinion, we could apply for a new arrest warrant for the accused’s offences, so that the accused would then remain in custody beyond September 2025.
Mr Marquort said the defence team would oppose the prosecution’s appeal against the acquittal.
Prosecutor Mr Wolters has said in the past that he believes Madeleine is dead and that Christian B was responsible for her death. The suspect denies any involvement.
The case against Christian B is purely circumstantial; he’s alleged to have confessed to a friend that he abducted Madeleine, he has convictions for sex crimes against children, he was living in the area at the time, his mobile phone was close by when the young girl vanished and he re-registered one of his vehicles the next day.
The prosecutor won’t say what evidence he has to convince him Madeleine is dead, but he admitted he is still trying to find forensic evidence to link Christian B to the girl.
Jim Gamble, former head of the UK Child Exploitation and Online Protection centre, said he had expected the prosecutor to charge Christian B soon.
“He’s implied the whole way through that he has something more than the public are aware of,” he said.
“He’s made fairly definitive statements about whether Madeleine is alive or dead so you would expect their strategy to have been to charge him sooner rather than later.
“From what he’s said today I wonder if we’re witnessing the re-positioning of something to manage the disappointment that’ll come.”
Mr Wolters, who is based in Braunschweig, Lower Saxony, is investigating the case with the help of Portuguese police and detectives from Scotland Yard.
The UK will play its “full part” in peacekeeping in Ukraine, Sir Keir Starmer has said.
The prime minister told Sky News’ political editor Beth Rigby that the conflict with Russia was not just about “sovereignty in Ukraine” but about the impact it also had on the UK, including the cost of living crisis.
Sir Keir was speaking to Sky News while on a surprise visit to Ukraine on Thursday – his first since his party’s landslide election win six months ago.
The purpose of the trip was to discuss the next steps for Ukraine, with the situation now more uncertain following Donald Trump’s election victory in November.
Mr Trump, whose inauguration takes place on 20 January, has said he wants a peace deal between Russia and Ukraine within 100 days.
But some European leaders fear pushing Kyiv into a deal could lead to Ukraine ceding some of its territory to Vladimir Putin.
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Sir Keir said he did not want “to get ahead of ourselves” but that the UK would play its “full part” in any peace negotiations – including by deploying British troops for peacekeeping.
Asked if he would be prepared to do that, the prime minister replied: “Well, I don’t want to get ahead of ourselves, but I do have indicated that we will play our full part – because this isn’t just about sovereignty in Ukraine.
“It’s about what the impact is back in the United Kingdom and our values, our freedom, our democracy. Because if Russia succeeds in this aggression, it will impact all of us for a very, very long time.”
Sir Keir said the drone threat was “a reminder of what Ukraine is facing every day” and that the war was brought about by “Russian aggression”.
Elsewhere in the interview, Sir Keir was asked about his views on Ukraine’s longstanding desire to join NATO – something President Putin strongly opposes.
At a NATO summit in Washington last summer, the alliance’s members announced that Ukraine was on an “irreversible” path to NATO membership.
“We fully support Ukraine’s right to choose its own security arrangements and decide its own future, free from outside interference. Ukraine’s future is in NATO,” the declaration said.
However, Mr Zelenskyy has somewhat tempered his language around NATO membership, telling Sky News in an exclusive interview in November that a ceasefire deal could be struck if Ukrainian territory he controlled falls “under the NATO umbrella” – allowing him to negotiate the return of the rest later “in a diplomatic way”.
However, Mr Trump has acknowledged Moscow’s opposition to Ukraine joining NATO, saying: “Russia has somebody right on their doorstep, and I can understand their feeling about that.”
Watch the full interview with Beth Rigby and Sir Keir Starmer on the Politics Hub with Sophy Ridge at 7pm.
An abusive boyfriend whose girlfriend blamed him for her death in a suicide note – after he subjected her to years of violence – has been jailed for six-and-a-half years for controlling and coercive behaviour and assault.
He was the first defendant in England to face trial for the unlawful killing of his partner after her suicide following domestic violence.
Shortly after Ms Dawes wrote her note on her phone, in which she described Wellings as a “monster”, the 23-year-old hairdresser left it with a friend before she took her own life on 22 July 2022.
Prosecuting, Paul Greaney KC cited the suicide note at Wellings’s trial. In it, Ms Dawes said he had “killed [her]”.
“He ruined every bit of strength I had left,” the note said. “I had dreams. I had a future at one point. That was taken away from me.”
Wellings denied the allegations against him and told jurors “I’m not a monster”.
While a jury cleared Wellings of Kiena’s manslaughter, Mr Greaney invited the court to sentence the defendant “on the basis that [the offending of which he was convicted] formed the background to and set the scene for her death”.
He said the abuse was “both regular and routine across the relationship”.
On one occasion, the court heard the defendant “held a drill to Kiena’s face, switched the drill on and threatened to drill out her teeth”.
‘Breaks my heart’
In a personal statement read out on her behalf in court, Angela Dawes, Kiena’s mother, said: “It breaks my heart that [Kiena’s] beautiful baby doesn’t have her mummy here because of that monster.”
“I truly hope that no other young lady or child has to go through what he did to my daughter and her baby,” she added.
Kiena’s grandmother, Irene Ball, said she had noticed at times during Kiena’s relationship with Wellings that her smile was “false” but recalled her granddaughter “tried to reassure [her]”.
“It was extremely shocking to see my granddaughter hurt and with injuries to her beautiful face,” she said.
“I told Kiena that he would really badly hurt her one day and I pleaded with her not to go back to him.”
Kynan Dawes, Kiena’s brother, said: “I introduced Kiena to this monster and I will regret that for the rest of my life.”
Mr Dawes said he felt “justice [had] been served” as “the world now knows what a monster he is”.
Addressing those who’d been following Kiena’s case online, he added: “I want people to see that domestic violence is not OK and men should respect their partners.”
He also urged anyone experiencing domestic violence to “go to the police”, adding “if you don’t feel like you can do this, speak to family or friends”.
‘Friendly and kind young woman’
In sentencing, Judge Robert Altham said Ms Dawes was “a popular, vivacious, friendly and kind young woman”.
“She pleaded with you to stop hitting her, but you just carried on. You tried to persuade her that it was her fault for upsetting you,” he added.
Ms Dawes had attempted suicide in the past, before her relationship with Wellings, and lawyers for Wellings told the court her death was because of “multiple factors”.
The judge said the defendant was aware of Ms Dawes’s history of mental health issues, he “called her names connected with her illness” and “repeatedly told her that she may as well kill herself”.
However, he said his sentence was based on the jury’s conclusion that the defendant had “no criminal responsibility” for Kiena’s death.
In mitigation, John Jones KC told the court the relationship between Ms Dawes and Wellings, a landscape gardener from Bispham who had a previous conviction for battering an ex-partner, was “inconsistent” throughout its two-and-a-half years.
“It would be wrong to say that that coercive relationship was in existence throughout,” he said.
The court heard the abuse of Ms Dawes included regular slapping and “ragging” by her hair, and threats to use a drill to take out her teeth and throw acid in her face.
After she became pregnant, Wellings gave her a black eye and began criticising her weight, calling her “fat” while contacting escorts and prostitutes online.
Police were called more than once, but Wellings threatened Ms Dawes that their daughter would be taken from them if she told them what was happening, so she declined to help prosecute him.
But she did report Wellings following an attack which left her needing hospital treatment and he was arrested.
He broke his bail conditions but was not locked up, leaving Ms Dawes feeling let down by police. Four days later, she killed herself.
Wellings’ sentences, to run consecutively, were for controlling or coercive behaviour in an intimate relationship and for assault occasioning actual bodily harm.
A further count of assault on the defendant’s former friend Scott Fletcher was also included as part of the sentence, an offence to which he had previously pleaded guilty.
Wellings will serve half of the sentence in prison before he is released on licence.
Anyone feeling emotionally distressed or suicidal can call Samaritans for help on 116 123 or email jo@samaritans.org in the UK. In the US, call the Samaritans branch in your area or 1 (800) 273-TALK.