Terra interim CEO says any ‘little progress’ made gets derailed by accusations
Sir Keir Starmer remains under pressure over the collapse of a trial into alleged Chinese spies after witness statements revealed the government’s deputy national security adviser had warned of significant espionage in the UK.
Three witness statements from the government were released late on Wednesday amid confusion about why the prosecutions of two men accused of spying for Beijing fell apart.
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Ex-parliamentary researcher Christopher Cash, 30, and teacher Christopher Berry, 33, were charged last year with passing politically sensitive information to a Chinese agent between December 2021 and February 2023.
They have both denied the allegations, and the case collapsed last month. The director of public prosecutions blamed the government’s refusal to brand China a threat, sparking accusations of a “cover-up”.
Christopher Cash (L) and Christopher Berry (R) had the charges against them withdrawn in September. Pics: Reuters
Sir Keir, who wants a “strategic and long-term” relationship with Beijing, used PMQs to announce witness statements from the case, made by deputy national security adviser Matthew Collins, would be published.
The PM has sought to blame the previous Tory government’s stance on China for the spying trial collapsing.
Sky News chief political correspondent Jon Craig said Sir Keir “will hope he’s got off the hook” by publishing the statements, but the Conservatives and Liberal Democrats say “they beg more questions than they answer”.
So what do the witness statements say?
In the first, from December 2023, Mr Collins said “large scale espionage” was being carried out against Britain.
A second, from February 2025, said Chinese spying threatened the economy.
In the documents, it was also revealed information about internal Tory politics – when the party was in government – was being fed to a Chinese intelligence handler known as “Alex”, according to counterterrorism command SO15.
This includes Mr Cash working as a researcher and “contributing to policy advice being provided to Rishi Sunak”.
The evidence adds: “It is axiomatic that this is prejudicial to the safety or interests of the UK for the Chinese state to have indirect access to one of the individuals providing policy advice to the now prime minister on China, with the potential to influence that advice.”
In the most recent third document from Mr Collins, dated 4 August, he said the Chinese intelligence services remain “highly capable and conduct large scale espionage operations against the UK”.
But he also quotes the Labour manifesto from last year’s election, saying: “It is important for me to emphasise, however, that the UK government is committed to pursuing a positive relationship with China to strengthen understanding, cooperation and stability.
“The government’s position is that we will co-operate where we can; compete where we need to; and challenge where we must, including on issues of national security.”
Sir Keir had suggested the “substantive” evidence in the case was submitted under the Tories, while supplementary statements given also reflected the previous government’s position.
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What does China spy row involve?
Director of public prosecutions Stephen Parkinson said the evidence required from the government in the alleged spying case related to whether China could be considered an “enemy” under the Official Secrets Act.
None of the statements use that word.
‘Completely devoid of context’
Mr Cash and Mr Berry were both charged under the secrets act.
In a statement after the government published the statements, Mr Cash reiterated he was “completely innocent” and attacked his “trial by media”.
The collapse of the trial, meaning he can’t prove his innocence, has put him in an “impossible position”, he said.
“At no point did I intentionally assist Chinese intelligence,” he added.
Mr Cash described the statements as “completely devoid of the context that would have been given at trial”.
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China spy case: ‘What is the point in having a lawyer as PM?’
‘Yet more unanswered questions’
Sir Keir had previously said the government would not publish the evidence as it would not have been allowed by the CPS – before the CPS then denied this was the case.
Stephen Parkinson, the head of the CPS, said in a statement the prosecution was dropped after attempts to get more evidence from the government “over many months” proved unfruitful.
The Liberal Democrats are calling for a statutory inquiry, with the party’s foreign affairs spokesperson saying the published statements “raise yet more unanswered questions”.
Calum Miller MP said: “Did emphasising the government’s desire for a positive relationship with China effectively cause this trial to collapse? What evidence was the CPS requesting which the government failed to provide?
“And who was aware of these statements and the evidence being asked for both among ministers and in No 10?”
Sky’s Jon Craig said a number of Commons committees are likely to open their own inquiries into the case.
Rachel Reeves faces the prospect of another “groundhog day” unless next month’s budget goes further than plugging an estimated £22bn black hole in the public finances, according to a respected thinktank.
The Institute for Fiscal Studies (IFS) said there was a “strong case” for the chancellor to substantially increase the £10bn headroom she has previously given herself against her own debt rules, or risk further repeats of needing to restore the buffer in the years ahead.
It said Ms Reeves could bring the cost of servicing government debt down through ending constant chatter over the limited breathing space she has previously given herself, in uncertain times for the global economy.
The chancellor herself used an interview with Sky News this week to admit tax rises were being considered, and appeared to concede she was trapped in a “doom loom” of annual increases.
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Tax hikes possible, Reeves tells Sky News
What is the chancellor facing?
Speculation over the likely contents of the budget has been rife for months and intensified after U-turns by the government on planned welfare reforms and on winter fuel payments.
The Office for Budget Responsibility’s determination on the size of the black hole facing Ms Reeves could come in well above or below the IFS estimate of £22bn, which includes the restoration of the £10bn headroom but not the cost of any possible policy announcements such as the scrapping of the two-child benefit cap.
Economists broadly agree tax rises are inevitable, as borrowing more would be prohibitive given the bond market’s concerns about the UK’s fiscal position.
Long-term borrowing costs have recently stood at levels not seen since the last century.
What are her tax options?
While there has been talk of new levies on bank profits and the wealthy, to name but a few rumours, the IFS analysis suggests the best way to raise the bulk of sufficient funds is by hiking income tax, rather than making the tax system even more complicated.
Earlier this week, it suggested reforms, such as to property taxes, could raise tens of billions of pounds.
But any move on income tax would mean breaking Labour’s manifesto pledge not to target the three main sources of revenue from income, employee national insurance contributions and VAT.
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Is Labour plotting a ‘wealth tax’?
She is particularly unlikely to raise VAT, as it would risk fanning the flames of inflation, already expected by the International Monetary Fund to run at the highest rate across the G7 this year and next.
Business argues it should be spared.
The chancellor’s first budget, which raised taxes by £40bn, has been blamed by the sector for raising costs in the economy since April via higher minimum pay and employer national insurance contributions.
They say the measures have dragged on employment, investment, and growth.
Read more:
Reeves plots budget boost to entrepreneur tax incentives
Four big themes as IMF takes aim at UK growth and inflation
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The big issues facing the UK economy
‘A situation of her own making’
Analysis by Barclays, revealed within the IFS’s Green Budget, suggested inflation was on course to return to target by the middle of next year but that the UK’s jobless rate could top 5% from its current 4.8% level.
Ms Reeves, who has blamed the challenges she faces on past austerity, Brexit and a continuing drag from the mini-budget of the Liz Truss government in 2022, was urged by the IFS to not harm growth through budget measures.
IFS director Helen Miller said: “Last autumn, the chancellor confidently pronounced she wouldn’t be coming back with more tax rises; she almost certainly will.
“For Rachel Reeves, the budget will feel like groundhog day. This is, to a large extent, a situation of her own making.
“When choosing to operate her fiscal rules with such teeny tiny headroom, Ms Reeves would have known that run-of-the-mill forecast changes could easily blow her off course.”
Ms Miller said there was a “strong case for the chancellor to build more headroom against her fiscal rules”, adding: “Persistent uncertainty is damaging to the economic outlook.”
‘No return to austerity’
A Treasury spokesperson responded: “We won’t comment on speculation. The chancellor’s non-negotiable fiscal rules provide the stability needed to help to keep interest rates low while also prioritising investment to support long-term growth.
“We were the fastest-growing economy in the G7 in the first half of the year, but for too many people our economy feels stuck. They are working day in, day out without getting ahead.
“That needs to change, and that is why the chancellor will continue to relentlessly cut red tape, reform outdated planning rules, and invest in public infrastructure to boost growth – not return to austerity or decline.”
The budget is scheduled for 26 November.
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