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Sir Keir Starmer will urge European countries to commit more in defence spending as he heads to Brussels for security talks.

The prime minister will call on Europe to “step up and shoulder more of the burden” to fend off the threat posed by Vladimir Putin’s Russia.

Sir Keir, the first prime minister to meet all the leaders of the 27 EU nations in Brussels since Brexit, will argue the bloc needs to capitalise on the weak state of the Russian economy by continuing with its sanctions regime.

The prime minister will meet NATO Secretary General Mark Rutte on Monday afternoon before travelling to meet with the leaders of the 27 EU member states at an informal meeting of the European Council.

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Sir Keir Starmer with Olaf Scholz, the German chancellor, whom he hosted at Chequers on Sunday. Pic: PA

Sir Keir is expected to say: “We need to see all allies stepping up – particularly in Europe.

President Trump has threatened more sanctions on Russia and it’s clear that’s got Putin rattled. We know that he’s worried about the state of the Russian economy.

“I’m here to work with our European partners on keeping up the pressure, targeting the energy revenues and the companies supplying his missile factories to crush Putin’s war machine.

“Because ultimately, alongside our military support, that is what will bring peace closer.”

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Ukrainian soldiers have message for Trump

Sir Keir’s suggestion that EU countries should spend more on defence is likely to open him up to criticism from the Conservatives, who have urged the government to increase defence spending to 2.5% of national income.

The prime minister said at the end of last year that he would “set out a path” to lift defence spending to 2.5% of national income in the spring.

The UK says it currently spends around 2.3% of GDP [gross domestic product] on defence.

Britain's Prime Minister Keir Starmer, NATO Secretary General Mark Rutte, and Ukrainian President Volodymyr Zelenskyy  meet at 10 Downing Street in London, Britain, Oct. 10, 2024. Pic: Reuters
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Ukrainian President Volodymyr Zelenskyy, Prime Minister Keir Starmer and NATO Secretary General Mark Rutte at 10 Downing Street in October. Pic: Reuters

Last year EU member states spent an average of 1.9% of EU GDP on defence, according to the European Defence Agency, a 30% increase compared with 2021.

Earlier this week European Council President Antonio Costa said the 23 EU members who belong to NATO are likely to agree to raise the defence spending target above the current 2% of national output at the next NATO summit in June.

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However, Donald Trump has repeatedly criticised NATO – the military alliance consisting of 30 European countries and the US and Canada – arguing that his country is contributing too much to the alliance’s budget while Europeans contribute too little.

During the US election campaign, President Trump said America would only help defend NATO members from a future attack by Russia if they met their spending obligations.

He also said members of NATO should be contributing 5% of their GDPs to defence spending – rather than the previous target of 2%.

The session of the Informal European Council comes as the government seeks to reset its relationship with the EU and boost areas of cooperation, including on defence and tackling illegal migration.

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Starmer hosts German chancellor

On Sunday the prime minister hosted German Chancellor Olaf Scholz at his country residence Chequers, where the two leaders agreed on the “importance of scaling up and coordinating defence production across Europe”, Downing Street said.

However, the government has repeatedly said that a closer relationship with the EU will only be sought within its red lines – meaning there will be no return to freedom of movement and rejoining the customs union or single market.

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UK takes ‘meaningful step forward’ with proposed DeFi tax overhaul

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UK takes ‘meaningful step forward’ with proposed DeFi tax overhaul

The UK has floated a new tax framework that eases the burden on decentralized finance (DeFi) users, with deferred capital gains taxes on crypto lending and liquidity pool users until the underlying token is sold, which the local industry has welcomed.

HM Revenue and Customs (HMRC) proposed on Wednesday a “no gain, no loss” approach to DeFi that would cover lending out a token and receiving the same type back, borrowing arrangements and moving tokens into a liquidity pool. 

Taxable gains or losses would be calculated when liquidity tokens are redeemed, based on the number of tokens a user receives back compared to the number they originally contributed, according to the proposal. 

Currently, when a user deposits funds into a protocol, regardless of the reason, the move may be subject to capital gains tax. In the UK, capital gains tax rates can vary between 18% and 32%, depending on the action.

Tax framework a ‘positive signal’ for UK crypto regulation  

Sian Morton, marketing lead at the crosschain payments system Relay protocol, said HMRC’s no gain, no loss approach is a “meaningful step forward for UK DeFi users who borrow stablecoins against their crypto collateral, and moves tax treatment closer to the actual economic reality of these interactions.”

“A positive signal for the UK’s evolving stance on crypto regulation,” she added.

Maria Riivari, a lawyer at the DeFi platform Aave, said the change “would bring clarity that DeFi transactions do not trigger tax until you truly sell your tokens.”

“Other countries facing similar questions may want to take note of HMRC’s approach and the depth of research and consideration behind it,” she added. 

Source: Maria Riivari

Aave CEO Stani Kulechov said the proposal was “a major win for UK DeFi users who want to borrow stablecoins against their crypto collateral.”

Related: Switzerland delays crypto tax info sharing until 2027

DeFi tax overhaul not set in stone yet 

However, the proposal is not a done deal yet. HMRC said it’s continuing to engage with relevant stakeholders “to assess the merits of this potential approach, and the case for making legislative change to the rules governing the taxation of crypto asset loans and liquidity pools.”