World more volatile and dangerous than at any time since Cold War, Rishi Sunak warns on trip to Europe

Published

1 year ago

April 24, 2024

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Rishi Sunak warned the world is now “more volatile and dangerous” than at any time since the Cold War, as the prime minister embarked on a trip to Poland and Germany to discuss the threat of expansionist Russia and refocus the world’s eyes back on to Ukraine.

Speaking to journalists on the flight over to Poland, the prime minister said we were “unfortunately living in a world that is more dangerous than we’ve known it in decade, probably more dangerous than the end of the Cold War”, adding that this was why it was “important in that we do invest more in our defence and that’s what we’ve been doing”.

“My first priority is to keep people safe, and you’re right, I have been honest with people that the world is less safe than it has been in decades and my job, indeed my obligation, is to invest to keep the country safe, and that’s what I’m doing.”

Announcing a further £500m of military support being sent to Ukraine – taking the UK’s total support this year to £3bn – the prime minister told journalists he was “proud” the UK had led on supporting Ukraine and also told European allies it was “important” for Europeans to invest in security in these volatile times.

“We’re stepping up because that is what the situation demands and requires,” he said.

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“And if we are joined by other European partners in that it is important that Europeans invest in their own security,” he told Sky News.

“[It was] very welcome news over the weekend from the US, but that doesn’t take away from the need for Europeans to invest in their security.

“I am very proud that the UK has always led in that regard. We are Europe’s largest defence spender and one of the few countries that’s consistently met the 2% NATO pledge and today’s action is another example of us leading by example.”

The prime minister is joined on this trip by his Chancellor Jeremy Hunt and Defence Secretary Grant Shapps, raising expectations that the prime minister might be making a bigger funding commitment on defence as he comes back on to the world stage. He will meet Polish Prime Minister Donald Tusk, NATO secretary general Jens Stoltenberg and German Chancellor Olaf Scholz over the next 24 hours.

The UK on Monday committed its largest ever donation of kit, including more than 400 vehicles, more than 1,600 missiles and 4m rounds of ammunition to the Ukraine war effort as Russia makes inroads.

“They have asked and we have answered,” said the prime minister as he warned that Mr Putin “will not stop at the Polish border” if Russia defeats Ukraine.

But having raided the UK’s arsenal to send to equipment to Ukraine, the next obvious question is whether the prime minister will finally lift the UK’s defence spending to 2.5% of GDP in the face of the growing threat of Russia and China.

The drumbeat is getting louder with two ministers last month – Anne-Marie Trevelyan and Tom Tugendhat – publicly urging the government to invest at a “much greater pace”.

The chancellor has said spending above the 2% NATO target would rise to this figure “as soon as economic conditions allow”.

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

Fresh from victory on the passing of his landmark Rwanda legislation and emphatic that a regular rhythm hour of flights will be taking off from July, the trip to Europe is part of a publicity blitz as the embattled prime minister 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.

Kyiv’s weapons pile has been depleted, with a $60bn military aid package held up in the US Congress for months. The House of Representatives finally approved the funding at the weekend, with the deal now awaiting approval in the Senate, which should mean American weapons should start flowing into Ukraine in the coming days.

Politics

What is a wealth tax, how would it work in the UK and where else has one?

Published

19 mins ago

July 9, 2025

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What is a wealth tax, how would it work in the UK and where else has one?

The idea of a wealth tax has raised its head – yet again – as the government attempts to balance its books.

Downing Street refused to rule out a wealth tax after former Labour leader Lord Kinnock told Sky News he thinks the government should introduce one.

Sir Keir Starmer’s spokesman said: “The prime minister has repeatedly said those with the broadest shoulders should carry the largest burden.”

While there has never been a wealth tax in the UK, the notion was raised under Rishi Sunak after the COVID years – and rejected – and both Harold Wilson’s and James Callaghan’s Labour governments in the 1970s seriously considered implementing one.

Sky News looks at what a wealth tax is, how it could work in the UK, and which countries already have one.

What is a wealth tax?

A wealth tax is aimed at reducing economic inequality to redistribute wealth and to raise revenue.

It is a direct levy on all, or most of, an individual’s, household’s or business’s total net wealth, rather than their income.

The tax typically includes the total market value of assets, including savings, investments, property and other forms of wealth – minus a person’s debts.

Unlike capital gains tax, which is paid when an asset is sold at a profit, a wealth tax is normally an annual charge based on the value of assets owned, even if they are not sold.

A one-off wealth tax, often used after major crises, could also be an option to raise a substantial amount of revenue in one go.

How could it work in the UK?

Advocates of a UK wealth tax, including Lord Kinnock, have proposed an annual 2% tax on wealth above £10m.

Wealth tax campaign group Tax Justice UK has calculated this would affect about 20,000 people – fewer than 0.04% of the population – and raise £24bn a year.

Because of how few people would pay it, Tax Justice says that would make it easy for HMRC to collect the tax.

The group proposes people self-declare asset values, backed up by a compliance team at HMRC who could have a register of assets.

Which countries have or have had a wealth tax?

In 1990, 12 OECD (Organisation for Economic Co-operation and Development) countries had a net wealth tax, but just four have one now: Colombia, Norway, Spain and Switzerland.

France and Italy levy wealth taxes on selected assets.

Colombia

Since 2023, residents in the South American country are subject to tax on their worldwide wealth, but can exclude the value of their household up to 509m pesos (£92,500).

The tax is progressive, ranging from a 0.5% rate to 1.5% for the most wealthy until next year, then 1% for the wealthiest from 2027.

Norway

There is a 0.525% municipal wealth tax for individuals with net wealth exceeding 1.7m kroner (about £125,000) or 3.52m kroner (£256,000) for spouses.

Norway also has a state wealth tax of 0.475% based on assets exceeding a net capital tax basis of 1.7m kroner (£125,000) or 3.52m kroner (£256,000) for spouses, and 0.575% for net wealth in excess of 20.7m kroner (£1.5m).

The maximum combined wealth tax rate is 1.1%.

The Norwegian Labour coalition government also increased dividend tax to 20% in 2023, and with the wealth tax, it prompted about 80 affluent business owners, with an estimated net worth of £40bn, to leave Norway.

Spain

Residents in Spain have to pay a progressive wealth tax on worldwide assets, with a €700,000 (£600,000) tax free allowance per person in most areas and homes up to €300,000 (£250,000) tax exempt.

The progressive rate goes from 0.2% for taxable income for assets of €167,129 (£144,000) up to 3.5% for taxable income of €10.6m (£9.146m) and above.

It has been reported that more than 12,000 multimillionaires have left Spain since the government introduced the higher levy at the end of 2022.

Switzerland

All of the country’s cantons (districts) have a net wealth tax based on a person’s taxable net worth – different to total net worth.

It takes into account the balance of an individual’s worldwide gross assets, including bank account balances, bonds, shares, life insurances, cars, boats, properties, paintings, jewellery – minus debts.

Switzerland also works on a progressive rate, ranging from 0.3% to 0.5%, with a relatively low starting point at which people are taxed on their wealth, such as 50,000 CHF (£46,200) in several cantons.

Politics

Jingye and Whitehall officials hold talks over British Steel future

Published

3 hours ago

July 9, 2025

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Jingye and Whitehall officials hold talks over British Steel future

The Chinese owner of British Steel has held fresh talks with government officials in a bid to break the impasse over ministers’ determination not to compensate it for seizing control of the company.

Sky News has learnt that executives from Jingye Group met senior civil servants from the Department for Business and Trade (DBT) late last week to discuss ways to resolve the standoff.

Whitehall sources said the talks had been cordial, but that no meaningful progress had been made towards a resolution.

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Jingye wants the government to agree to pay it hundreds of millions of pounds for taking control of British Steel in April – a move triggered by the Chinese group’s preparations for the permanent closure of its blast furnaces in Scunthorpe.

Such a move would have cost thousands of jobs and ended Britain’s centuries-old ability to produce virgin steel.

Jingye had been in talks for months to seek £1bn in state aid to facilitate the Scunthorpe plant’s transition to greener steelmaking, but was offered just half that sum by ministers.

British Steel has not yet been formally nationalised, although that remains a probable outcome.

Jonathan Reynolds, the business secretary, has previously dismissed the idea of compensating Jingye, saying British Steel’s equity was essentially worthless.

Last month, he met his Chinese counterpart, where the issue of British Steel was discussed between the two governments in person for the first time.

Jingye has hired the leading City law firm Linklaters to explore the recovery of hundreds of millions of pounds it invested in the Scunthorpe-based company before the government seized control of it.

News of last week’s meeting comes as British steelmakers face an anxious wait to learn whether their exports to the US face swingeing tariffs as part of US President Donald Trump’s trade war.

Sky News’s economics and data editor, Ed Conway, revealed this week that the UK would miss a White House-imposed deadline to agree a trade deal on steel and aluminium this week.

Jingye declined to comment, while a spokesman for the Department for Business and Trade said: “We acted quickly to ensure the continued operations of the blast furnaces but recognise that securing British Steel’s long-term future requires private sector investment.

“We have not nationalised British Steel and are working closely with Jingye on options for the future, and we will continue work on determining the best long-term sustainable future for the site.”