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Rishi Sunak is to increase UK defence spending to 2.5% of GDP by 2030 as he warns European allies that the continent is at a “turning point” in the face of the growing threats from Russia, Iran and China. 

Speaking alongside NATO Secretary General Jens Stoltenberg, the UK prime minister said he planned to steadily increase defence spending by the end of the decade, rising to 2.4% a year until 2027/28 – then hitting 2.5% by 2030/31.

Funding will rise from £64.6bn in 2024 to £78.2bn in 2028, and then jump to £87bn in 2030/31.

The government said the commitment amounted to an additional £75bn in funding over the next six years and would see the UK remain “by far the second largest defence spender in NATO after the US”.

Politics latest: PM gives news conference after defence spending pledge

Making the announcement on a visit to Poland, Mr Sunak said the additional funding represented the “biggest strengthening of our national defence in a generation to meet the challenge of an increasingly dangerous world”.

He revealed a further £10bn would be spent over the next decade on munitions production and modernisation of the armed forces, and that at least 5% of the defence budget would be committed to research and development.

The prime minister said: “An axis of autocratic states like Russia, Iran and China are increasingly working together to undermine democracies and reshape the world order.

“They are also investing heavily in their own militaries and in cyber capabilities and in low-cost technology, like the Shahed attack drones Iran fired towards Israel last weekend.”

He added that this posed a “direct threat to the lives and livelihoods of people in the UK, as well as across Europe and the wider world”, as he spoke of the need to take “further action now to deter these growing threats”.

Asked by Sky News whether the UK had entered a “pre-war era”, the prime minister said: “We have to recognise that the world… is a more dangerous place”.

But he said the threats from the likes of Russia were “nothing new” – they just came at a new “pace and intensity”, adding: “That’s why it’s important that we make this investment and we make this investment now”.

However, Mr Sunak said the UK was approaching them “from a position of strength and confidence”.

Pointing to Ukraine, he said recent gains by the Russians were equivalent to taking over Basildon and Eastbourne, adding: “The allies are united, defence spending is growing across Europe and Nato has two new members.

“If you take a step back, you know, Russia is not in any way succeeding.”

The prime minister added: “We have been making the right investments. Nato is strong. Our alliance is strong. People are doing the right thing. And as you know… Russia has not succeeded.

“But we can’t be complacent. And that’s why [we are making] the announcement today.”

Pic: Ben Birchall/PA
An Ajax Ares tank, an armoured personnel carrier, on the training range at Bovington Camp, a British Army military base in Dorset, during a visit by Defence Secretary Ben Wallace, who is viewing Ukrainian soldiers training on Challenger 2 tanks. Picture date: Wednesday February 22, 2023.
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Pic: Ben Birchall/PA


Today’s commitment comes after growing pressure on the prime minister to increase defence spending in the face of increasing threats from hostile states.

Last month, two serving ministers – Anne-Marie Trevelyan and Tom Tugendhat – publicly urged the government to invest at a “much greater pace”.

The House of Commons’ spending watchdog, the Public Accounts Committee, also warned the gap between the Ministry of Defence’s budget and the cost of the UK’s desired military capabilities had risen by £16.9bn – the largest deficit ever – despite a promised injection of more than £46bn over the next decade.

The increase in defence spending will play well to Mr Sunak’s base in the Conservative Party and comes fresh from his landmark Rwanda legislation being passed, with the prime minister emphatic that a regular rhythm of flights will be taking off from July.

Both announcements are part of a publicity blitz for the embattled leader as he looks to get on the front foot ahead of next week’s local elections, aware that a disastrous night could put him not just back on to his heels, but into free fall.

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But Labour said the Conservatives had “shown time and time again that they cannot be trusted on defence”.

Shadow defence minister John Healey said his party wanted to see “a fully funded plan to reach 2.5%, so would “examine the detail of the announcement closely.

However, he added: “The British public will judge ministers by what they do not what they say.

“Since 2010, the Conservatives have wasted more than £15bn mismanaging defence procurement, shrunk the army to its smallest size since Napoleon, missed their recruitment targets every year, and allowed morale to fall to record lows.

“Labour will conduct a strategic defence and security review in the first year in government to get to grips with the threats we face, the state of our armed forces, and the resources required.”

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Binance co-founder Changpeng Zhao to advise Kyrgyzstan on blockchain tech

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Binance co-founder Changpeng Zhao to advise Kyrgyzstan on blockchain tech

Binance co-founder Changpeng Zhao to advise Kyrgyzstan on blockchain tech

Former Binance CEO Changpeng “CZ” Zhao will begin advising the Kyrgyz Republic on blockchain and crypto-related regulation and tech after signing a memorandum of understanding with the country’s foreign investment agency.

“I officially and unofficially advise a few governments on their crypto regulatory frameworks and blockchain solutions for gov efficiency, expanding blockchain to more than trading,” the crypto entrepreneur said in an April 3 X post, adding that he finds this work “extremely meaningful.”

His comments came in response to an earlier X post from Kyrgyzstan President Sadyr Zhaparov announcing that Kyrgyzstan’s National Investment Agency (NIA) had signed a memorandum with CZ to provide technical expertise and consulting services for the Central Asian country.

The NIA is responsible for promoting foreign investments and assisting international companies in identifying business opportunities within the country.

Binance co-founder Changpeng Zhao to advise Kyrgyzstan on blockchain tech

Source: Changpeng Zhao

“This cooperation marks an important step towards strengthening technological infrastructure, implementing innovative solutions, and preparing highly qualified specialists in blockchain technologies, virtual asset management, and cybersecurity,” Zhaparov said.

The Kyrgyzstan president added: “such initiatives are crucial for the sustainable growth of the economy and the security of virtual assets, ultimately generating new opportunities for businesses and society as a whole.”

Kyrgyzstan, which officially changed its name from the Republic of Kyrgyzstan to the Kyrgyz Republic in 1993, is a mountainous, land-locked country.

It is considered well-suited for crypto mining operations due to its abundant renewable energy resources, much of which is underutilized.

Over 30% of Kyrgyzstan’s total energy supply comes from hydroelectric power plants, but only 10% of the country’s potential hydropower has been developed, according to a report by the International Energy Agency.

CZ has met with several other state officials in Asia

Malaysia also recently tapped CZ for guidance on crypto-related matters, with Prime Minister Anwar Ibrahim meeting him personally in January.

CZ has also met with officials in the UAE and Bitcoin-stacking country Bhutan — however, it isn’t clear what those meetings entailed.

Related: Is Bitcoin’s future in circular economies or national reserves?

CZ’s latest pursuits come a little over six months after he was released from a four-month prison sentence in the US for violating several anti-money laundering laws.

Since being released, CZ has made investments in blockchain tech, artificial intelligence and biotechnology companies.

CZ also recently donated 1,000 BNB (BNB) — worth almost $600,000 — to support earthquake relief efforts in Thailand and Myanmar after the natural disaster in late April.

Magazine: Financial nihilism in crypto is over — It’s time to dream big again

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Trump has acted for his country, I will act in Britain’s interests, says Starmer

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Trump's tariffs are about something more than economics: power

Donald Trump has acted for his country and I will act in Britain’s interests, Sir Keir Starmer has said after the US president imposed 10% tariffs on UK goods.

The prime minister told business chiefs at an early morning meeting in Downing Street: “Last night the president of the United States acted for his country, and that is his mandate.

“Today, I will act in Britain’s interests with mine.”

Politics latest: Starmer says UK will react to tariffs with ‘cool and calm head’

Mr Trump announced sweeping tariffs on countries around the world, with the UK getting off relatively lightly with 10% tariffs – branded “kind reciprocal” by the president – compared with China, which will have to pay 54% tariffs and 20% for the EU.

A previously announced 25% tariff on British car imports to the US came into effect at 5am on Thursday.

Sir Keir said the government is moving “to the next stage of our plan” after negotiations failed to fend off any tariffs ahead of Wednesday’s announcement.

More on Donald Trump

He promised any decisions “will be guided only by our national interest, in the interests of our economy, in the interests of businesses around this table, in the interests of putting money in the pockets of working people”.

Keir Starmer hosts a meeting with business leaders in 10 Downing Street following the announcement of tariffs by US President Donald Trump.
Pic: Simon Dawson/No 10 Downing Street
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Sir Keir Starmer hosted business leaders in Downing Street on Thursday morning. Pic: Simon Dawson/No 10 Downing Street

“Clearly, there will be an economic impact from the decisions the US has taken, both here and globally,” he told the business leaders.

“But I want to be crystal clear: we are prepared, indeed one of the great strengths of this nation is our ability to keep a cool head.”

Business Secretary Jonathan Reynolds told the Commons on Thursday the government is considering retaliatory measures and requested British businesses let him know what the tariff implications will be for them.

An “indicative list of potential products” that could be targeted was later published, with 8,364 categories covering about 27% of UK imports from the US.

Earlier, Mr Reynolds told Wilfred Frost on Sky News Breakfast his “job is not done” when it comes to negotiating a trade deal

Mr Reynolds refused to say if the tariffs might cause a global recession and said the UK has safeguards in place to ensure it is not flooded with goods that would have gone to other countries.

“We’ll take any powers we need to protect the British people and the British economy from that,” he said.

“What we have directly within our power, alongside that is, of course, the ability to negotiate a better deal in the national interest for the UK. That’s been our approach to date and we’ll continue with that.”

Read more:
World reacts to Trump’s tariff announcement
Tariffs will have consequences for globalisation, the US economy and geopolitics
Trump’s tariffs explained

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Moment Trump unveils tariffs chart

UK will be template for other nations’ deals

The business secretary also suggested if the UK is successful in negotiating a deal with the US “there’ll be a template there” for other countries to “resolve some of these issues”.

He reiterated statements he and the PM have made over the past few days as he said: “America is a friend, America’s our principal ally.

“Our relationship is an incredibly strong economic one, but also a security one, a political one as well.”

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Sky’s Ed Conway examines how economies across the world are impacted by tariffs

Government ‘very slow’ to start talks

Conservative shadow home secretary Chris Philp told Sky News the government had been “very slow” to start negotiating a free trade agreement with the US, and they should have started when Mr Trump was elected in November, even though he did not get sworn in until the end of January.

He said the UK being hit by a lower tariff than the EU was “one of the benefits of Brexit”.

However, he said the 25% tariff on car exports to the US is “very, very serious” and the global impact is “bad news for our economy”.

Relief in Westminster – but concessions to Trump to come

It has been quite a rollercoaster for the government, where they went from the hope that they could avoid tariffs, that they could get that economic deal, to the realisation that was not going to happen, and then the anticipation of how hard would the UK be hit.

In Westminster tonight, there is actual relief because the UK is going to have a 10% baseline tariff – but that is the least onerous of all the tariffs we saw President Trump announce.

He held up a chart of the worst offenders, and the UK was well at the bottom of that list.

No 10 sources were telling me as President Trump was in the Rose Garden that while no tariffs are good, and it’s not what they want, the fact the UK has tariffs that are lower than others vindicates their approach.

They say it’s important because the difference between a 20% tariff and a 10% tariff is thousands of jobs.

Where to next? No 10 says it will “keep negotiating, keep cool and calm”, and reiterated Sir Keir Starmer’s desire to “negotiate a sustainable trade deal”.

“Of course want to get tariffs lowered. Tomorrow we will continue with that work,” a source added.

Another source said the 10% tariff shows that “the UK is in the friendlies club, as much as that is worth anything”.

Overnight, people will be number-crunching, trying to work out what it means for the UK. There is a 25% tariff on cars which could hit billions in UK exports, in addition to the blanket 10% tariff.

But despite this being lower than many other countries, GDP will take a hit, with forecasts being downgraded probably as we speak.

I think the government’s approach will be to not retaliate and try to speed up that economic deal in the hope that they can lower the tariffs even further.

There will be concessions. For example, the UK could lower the Digital Services Tax, which is imposed on the UK profits of tech giants. Will they loosen regulation on social media companies or agricultural products?

But for now, there is relief the UK has not been hit as hard as many others.

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Trump’s tariffs will have an impact before too long – but how will the UK respond?

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Trump's tariffs will have an impact before too long – but how will the UK respond?

The list has landed.

More than 400 pages of thousands of goods that could be affected by reciprocal tariffs against the US.

Everything from fresh domestic ducks to sea-going dredgers makes the cut; most symbolic, however, are iconic American items like jeans, motorcycles and whiskey.

Would Donald Trump stand for a levy on Levi’s? It’s not the first time this battle has played out.

When the US president announced tariffs on steel and aluminium in his first term, the EU responded with its own – including a symbolic 25% tax on American whiskey.

At the time, the UK, then an EU member, followed suit.

But as the UK tries to carve its own path outside the bloc, vindicated by the baseline 10% tariffs imposed instead of the EU’s rate of 20%, the aim is to avoid retaliation.

The government want us to know “all options are on the table” – but that is not how they want this to play out.

“This is not a short-term tactical exercise,” the prime minister said this morning.

Despite the business secretary’s best efforts during his recent trip to Washington to try to secure a UK tariffs carveout, no deal was reached in time.

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How will tariffs hit working people?

Mr Trump wanted his big bang, board brandishing moment; carveouts for certain countries would have softened the impact of his speech.

But with 90-plus countries on the tariff billboard, how far along the queue is any UK deal?

And how much are we willing to give? Will the sensitive subject of chlorinated chicken be on the table? What of the agreement to cut taxes on big tech companies that Mr Trump wants?

Lots of questions. The day after the surreal night before is too soon to know all the answers, but this is about politics as much as it is about economics.

Read more:
There were no winners from Trump’s tariff gameshow
Do Trump’s numbers on tariffs really add up?

As the prime minister launched Labour’s local election campaign in Derbyshire today, he talked about potholes, high streets and school meals. Every question I heard was about tariffs.

Decisions made across the Atlantic are looming large. Tariffs may not directly sway many votes in the local elections, but the consequences for Rachel Reeves’s fiscal headroom and the amount of money she has to spend, or save, will have an impact before too long.

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