Sir Keir Starmer said the UK is set to increase spending on defence, security and resilience to 5% of GDP by 2035 to meet an “era of radical uncertainty” – but without promising any additional cash.
The move – part of a new spending pledge by the NATO alliance – was panned as deceptive “smoke and mirrors” by critics, who pointed to the very real risk of escalating conflict between Iran, the US and Israel, as well as Russia’s full-scale war in Ukraine.
Volodymyr Zelenskyy told Sky News the timeline for the increase was “very slow” and warned Russia could attack a NATO country within five years.
“In my view, this is slow because we believe that starting from 2030, Putin can have significantly greater capabilities,” he told chief presenter Mark Austin.
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‘Russia could attack a NATO country’
The prime minister, Donald Trump and the other leaders of NATO’s 32 member states are expected to approve the investment goal when they meet at a summit in The Hague, which opens later today.
It replaces a previous target to spend 2% of GDP purely on defence.
The announcement will be celebrated as a win for the US president, who has been demanding his allies spend more on their own defences instead of relying on American firepower.
Perhaps it will mean he will switch attention back to achieving a goal to end Russia’s war in Ukraine, which will be another key focus of the gathering in the Dutch capital.
NATO planners have crunched the summit down to a short main session tomorrow, with a final communique much briefer than usual – all steps designed to reduce the chance of the US president leaving early.
He is already scheduled to arrive late and last this evening, provided he turns up.
There is huge nervousness about Mr Trump’s commitment to an alliance that has been the bedrock of European security since it was founded more than 75 years ago.
He is not a fan though, and has previously accused Europe and Canada of an overreliance on American firepower for their own security, calling for them to do more to defend themselves.
Image: Trump is expected to join Starmer and fellow leader NATO leaders at The Hague. Pic: Reuters
This pressure has arguably been a bigger motivator in prompting certain allies to agree to spend more on their militaries than the threat they say is posed by Russia, Iran, China and North Korea.
Spain’s position could create friction this week. The Spanish prime minister, while agreeing to the new investment goal, has said his country is not obliged to meet it.
The UK was also slow to say yes – a stance that was at odds with a defence review endorsed by Sir Keir that was centred around a “NATO-first” policy.
As well as agreeing to the defence and security investment goal, the British government is also publishing a new national security strategy on Tuesday that will highlight the importance of a wider definition of what constitutes security, including energy, food and borders.
There will also be a focus on a whole-of-society approach to resilience in an echo of the UK’s Cold War past.
Image: Preparations for the NATO summit at The Hague. Pic: Reuters
It described the commitment to invest in defence, security and national resilience as an aligning of “national security objectives and plans for economic growth in a way not seen since 1945”.
Sir Keir said: “We must navigate this era of radical uncertainty with agility, speed and a clear-eyed sense of the national interest to deliver security for working people and keep them safe.
“That’s why I have made the commitment to spend 5% of GDP on national security. This is an opportunity to deepen our commitment to NATO and drive greater investment in the nation’s wider security and resilience.”
The funding will be split, with 3.5% of GDP going on core defence and 1.5% on homeland security and national resilience – a new and so far less clearly defined criteria.
Progress on investment will be reviewed in 2029.
Image: Starmer today met with Zelenskyy at Downing Street. Pic: Reuters
The defence goal is higher than the government’s current ambition to lift defence expenditure to 3% of GDP by 2034, from 2.3% currently.
The only solid commitment is to spend 2.6% on defence by 2027 – a figure that has been boosted by the addition of the whole of the budget for the intelligence agencies.
This level of intelligence spending had not previously been included and has drawn criticism from defence experts because it is not the same as tanks, artillery and troops.
The government, in its statement, is now focusing on an even higher-sounding number, claiming that it will hit 4.1% of the new NATO target by 2027.
However, this is merely based on adding the new 1.5% spending goal for “resilience and security” to the already stated 2.6% defence spending pledge.
A Downing Street spokesperson was unable immediately to say how much of GDP is currently spent on whatever is included in the new resilience category.
It could include pre-announced investment in civil nuclear energy as well as infrastructure projects such as roads and railways.
For the UK, 1.5% of GDP is about £40bn – a significant chunk of national income.
Sir Ben Wallace, a former Conservative defence secretary, accused the government of “spin” over its spending pledge because it does not include any new money anytime soon.
“The threat to our country is real not spin,” he told Sky News.
“This government thinks it can use smoke and mirrors to deceive the public and Donald Trump. This is an insult to our troops who will see no significant new money. It fools no one.”
Former US Securities and Exchange Commission Chair Gary Gensler renewed his warning to investors about the risks of cryptocurrencies, calling most of the market “highly speculative” in a new Bloomberg interview on Tuesday.
He carved out Bitcoin (BTC) as comparatively closer to a commodity while stressing that most tokens don’t offer “a dividend” or “usual returns.”
Gensler framed the current market backdrop as a reckoning consistent with warnings he made while in office that the global public’s fascination with cryptocurrencies doesn’t equate to fundamentals.
“All the thousands of other tokens, not the stablecoins that are backed by US dollars, but all the thousands of other tokens, you have to ask yourself, what are the fundamentals? What’s underlying it… The investing public just needs to be aware of those risks,” he said.
Gensler’s record and industry backlash
Gensler led the SEC from April 17, 2021, to Jan. 20, 2025, overseeing an aggressive enforcement agenda that included lawsuits against major crypto intermediaries and the view that many tokens are unregistered securities.
The industry winced at high‑profile actions against exchanges and staking programs, as well as the posture that most token issuers fell afoul of registration rules.
Gary Gensler labels crypto as “highly speculative.” Source: Bloomberg
Under Gensler’s tenure, Coinbase was sued by the SEC for operating as an unregistered exchange, broker and clearing agency, and for offering an unregistered staking-as-a-service program. Kraken was also forced to shut its US staking program and pay a $30 million penalty.
The politicization of crypto
Pushed on the politicization of crypto, including references to the Trump family’s crypto involvement by the Bloomberg interviewer, the former chair rejected the framing.
“No, I don’t think so,” he said, arguing it’s more about capital markets fairness and “commonsense rules of the road,” than a “Democrat versus Republican thing.”
He added: “When you buy and sell a stock or a bond, you want to get various information,” and “the same treatment as the big investors.” That’s the fairness underpinning US capital markets.
On ETFs, Gensler said finance “ever since antiquity… goes toward centralization,” so it’s unsurprising that an ecosystem born decentralized has become “more integrated and more centralized.”
He noted that investors can already express themselves in gold and silver through exchange‑traded funds, and that during his tenure, the first US Bitcoin futures ETFs were approved, tying parts of crypto’s plumbing more closely to traditional markets.
Gensler’s latest comments draw a familiar line: Bitcoin sits in a different bucket, while most other tokens remain, in his view, speculative and light on fundamentals.
Even out of office, his framing will echo through courts, compliance desks and allocation committees weighing BTC’s status against persistent regulatory caution of altcoins.
New figures reveal a 70% year-on-year increase in Cayman Islands foundation company registrations, with more than 1,300 on the books at the end of 2024, and over 400 new registrations already in 2025.
According to a news release from Cayman Finance, many of the world’s largest Web3 projects are now registered in the Cayman Islands, including at least 17 foundation companies with treasuries over $100 million.
Why DAOs are choosing Cayman
The Cayman foundation company has emerged as a preferred tool for DAOs that need to sign contracts, hire contributors, hold IP and interact with regulators, all while shielding tokenholders from personal liability for the DAO’s obligations.
The legal wake‑up call for many communities came in 2024 with Samuels v. Lido DAO, in which a US federal judge found that an unwrapped DAO could be treated as a general partnership under California law, exposing participants to personal liability.
The Cayman foundation company is designed to plug that gap, offering a separate legal personality and the ability to own assets and sign agreements, while giving tokenholders assurance that they are not partners by default.
Rise in Cayman Islands foundation company registrations | Source: Cayman Finance
Add tax neutrality, a legal framework familiar to institutional allocators and an ecosystem of companies that specialize in Web3 treasuries, and it becomes clear why more projects have quietly redomiciled their foundations to Grand Cayman.
Elsewhere, policymakers have made big promises but delivered patchwork. US President Donald Trump has repeatedly pledged to turn the United States into the “crypto capital of the planet,” but at the entity level, only a handful of states explicitly recognize DAOs as legal persons.
Switzerland remains the archetypal onshore Web3 foundation center, with the Crypto Valley region now hosting over 1,700 active blockchain firms, up more than 130% since 2020, with foundations and associations representing a growing share of new structures.
The surge in Web3 foundations coincides with a shift in Cayman’s own regulatory posture — the arrival of the Organisation for Economic Co-operation and Development’s Crypto‑Asset Reporting Framework (CARF), which the Cayman Islands has now implemented via new Tax Information Authority regulations that take effect from Jan. 1, 2026.
CARF will impose due diligence and reporting duties on Cayman “Reporting Crypto‑Asset Service Providers” (entities that exchange crypto for fiat or other crypto, operate trading platforms or provide custodial services), requiring them to collect tax‑residence data from users, track relevant transactions and file annual reports with the Tax Information Authority.
Legal professionals note that CARF reporting under the current interpretation applies to relevant crypto-asset service providers, including exchanges, brokers and dealers, which likely leaves structures that merely hold crypto assets, such as protocol treasuries, investment funds, or passive foundations, off the hook.
“The key question is whether your entity, as a business, provides a service effectuating exchange transactions for or on behalf of customers, including by acting as a counterparty or intermediary or by making available a trading platform.”
In practice, that means many pure treasury or ecosystem‑steward foundations should be able to continue benefitting from Cayman’s legal certainty and tax neutrality without being dragged into full reporting status, so long as they are not in the business of running exchange, brokerage or custody services.
Chancellor Rachel Reeves has suffered another budget blow with a rebellion by rural Labour MPs over inheritance tax on farmers.
Speaking during the final day of the Commons debate on the budget, Labour backbenchers demanded a U-turn on the controversial proposals.
Plans to introduce a 20% tax on farm estates worth more than £1m from April have drawn protesters to London in their tens of thousands, with many fearing huge tax bills that would force small farms to sell up for good.
Image: Farmers have staged numerous protests against the tax in Westminster. Pic: PA
MPs voted on the so-called “family farms tax” just after 8pm on Tuesday, with dozens of Labour MPs appearing to have abstained, and one backbencher – borders MP Markus Campbell-Savours – voting against, alongside Conservative members.
In the vote, the fifth out of seven at the end of the budget debate, Labour’s vote slumped from 371 in the first vote on tax changes, down by 44 votes to 327.
‘Time to stand up for farmers’
The mini-mutiny followed a plea to Labour MPs from the National Farmers Union to abstain.
“To Labour MPs: We ask you to abstain on Budget Resolution 50,” the NFU urged.
“With your help, we can show the government there is still time to get it right on the family farm tax. A policy with such cruel human costs demands change. Now is the time to stand up for the farmers you represent.”
After the vote, NFU president Tom Bradshaw said: “The MPs who have shown their support are the rural representatives of the Labour Party. They represent the working people of the countryside and have spoken up on behalf of their constituents.
“It is vital that the chancellor and prime minister listen to the clear message they have delivered this evening. The next step in the fight against the family farm tax is removing the impact of this unjust and unfair policy on the most vulnerable members of our community.”
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Farmers defy police ban in budget day protest in Westminster.
The government comfortably won the vote by 327-182, a majority of 145. But the mini-mutiny served notice to the chancellor and Sir Keir Starmer that newly elected Labour MPs from the shires are prepared to rebel.
Speaking in the debate earlier, Mr Campbell-Savours said: “There remain deep concerns about the proposed changes to agricultural property relief (APR).
“Changes which leave many, not least elderly farmers, yet to make arrangements to transfer assets, devastated at the impact on their family farms.”
Samantha Niblett, Labour MP for South Derbyshire abstained after telling MPs: “I do plead with the government to look again at APR inheritance tax.
“Most farmers are not wealthy land barons, they live hand to mouth on tiny, sometimes non-existent profit margins. Many were explicitly advised not to hand over their farm to children, (but) now face enormous, unexpected tax bills.
“We must acknowledge a difficult truth: we have lost the trust of our farmers, and they deserve our utmost respect, our honesty and our unwavering support.”
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UK ‘criminally’ unprepared to feed itself in crisis, says farmers’ union.
Labour MPs from rural constituencies who did not vote included Tonia Antoniazzi (Gower), Julia Buckley (Shrewsbury), Jonathan Davies (Mid Derbyshire), Maya Ellis (Ribble Valley), and Anna Gelderd (South East Cornwall), Ben Goldsborough (South Norfolk), Alison Hume (Scarborough and Whitby), Terry Jermy (South West Norfolk), Jayne Kirkham (Truro and Falmouth), Noah Law (St Austell and Newquay), Perran Moon, (Camborne and Redruth), Samantha Niblett (South Derbyshire), Jenny Riddell-Carpenter (Suffolk Coastal), Henry Tufnell (Mid and South Pembrokeshire), John Whitby (Derbyshire Dales) and Steve Witherden (Montgomeryshire and Glyndwr).