Rishi Sunak’s defence pledge sets trap for Sir Keir Starmer

Published

9 months ago

April 24, 2024

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On the plane from Warsaw to Berlin, Rishi Sunak was buoyant as he briefly chatted to the travelling pack.

Having delivered his hat-trick of welfare reforms, the Rwanda bill and now the big lift in defence spending, he was a prime minister who clearly feels on the front foot after a torrid few months.

He looked like a man enjoying the job.

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Allies said Mr Sunak has spoken a lot about the spending decision with his current Foreign Secretary Lord David Cameron, who has “form” in prioritising these decisions, having committed to defence funding back in 2010 when he was prime minister in the face of competing spending demands.

“The PM’s thought about this a lot, which is why it’s so detailed today,” said one government source.

The big decision he announced in this election year to increase defence spending to 2.5% by 2030 was a choice.

He could have committed funding to schools, the NHS or local government. But, for this prime minister, it was the right choice.

It might not be the most salient issue for voters at home, but in his speech today, he left his audience in little doubt about the risks we are facing with the rise of authoritarian regimes, such as China, Russia and Iran, working together to undermine our democracies and way of life.

But equally, Mr Sunak made this commitment knowing all too well that it may not be him that has to deliver it.

And while the sum is really big – £75bn of spending over the next six years – for this year the only commitment will be £500m for Ukraine, with the remainder of the funding coming in the next parliament.

On the assumed baseline, the government had already allocated the additional funding for 2.3% defence spending annually in the next parliament.

Increasing that to 2.5% by 2028-29 will, in cash terms, require £4.5bn of funding, which the government says will be paid for through £1.6bn from the annual research and development budget and £2.9bn from 70,000 cuts to civil servant jobs, taking the workforce back to pre-pandemic levels.

It is a clear political trap for Sir Keir Starmer, who spent much of his early years as Labour leader trying to undo the damage done by his predecessor, Jeremy Corbyn – who did not support NATO.

Starmer trap

Sir Keir has sought to re-establish Labour’s security credentials in recent years, most notably in his stance on the Israel-Hamas conflict, in which he has made sure he sticks to the US position and stands with the government on matters of national security.

So this is a big test.

Sir Keir said recently that he wanted to commit to the 2.5% of “when resources allow”, giving a future Labour government some wriggle room as it contemplates how to allocate scarce public resource.

Because, as the polls stand, Mr Sunak won’t be the prime minister having to deliver on defence-spending pledges, and already Conservative politicians are challenging Labour to commit to their plans, knowing all too well that it reduces the party’s manoeuvrability in government should it win the general election.

Hard call

And this is a hard call for the Labour leader, who has been desperate to present himself as a politician who also puts the security of the nation above all else.

In Poland, Mr Sunak evoked Winston Churchill, saying: “We did not choose this moment, but it is for us to meet it.”

He also said that to lead was to make choices, and his choice was to protect his citizens above all else.

How can Starmer refuse to meet the commitment?

Politics

Crypto deregulation under Trump: Promises vs reality

Published

9 mins ago

January 13, 2025

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Crypto deregulation under Trump: Promises vs reality

The incoming US president will have the authority to enact many policies favorable to crypto users after taking office next week.

Politics

Starmer says Treasury will be ‘ruthless’ in cutting spending amid market turmoil

Published

9 mins ago

January 13, 2025

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Starmer says Treasury will be 'ruthless' in cutting spending amid market turmoil

Sir Keir Starmer has said the Treasury will be “ruthless” in cutting government spending as market turbulence continues.

Responding to a question about the economic situation from Sky News’ political editor Beth Rigby, he said: “The number one mission of this government is economic growth.

“And that was run through the budget, but there’s much more that we’re doing on economic growth, pulling those levers of change.”

Both long-term 30-year and the benchmark 10-year government borrowing costs were up on Monday morning, with the 30-year effective interest rate (the gilt yield) reaching a new high of 5.47% – a rate not seen since mid-1998.

The 10-year borrowing cost reached 4.86%, below the 2008 high recorded last Thursday but at the same levels last seen around the global financial crash.

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That pushes up costs for the government, with the chancellor put in a position where she could have to break her self-imposed fiscal rules by failing to bring debt down and balance the budget.

Sterling, which can reflect investors’ confidence in the UK and overall economic health, was also down to a low not seen since October 2023, with £1 buying $1.21.

Money blog: Traders bet on pound dropping 8%

The dismal economic outlook has prompted warnings mortgage rates could rise in the coming weeks as lenders respond to the turmoil.

In what could be seen as further misery for the British people, the prime minister refused to rule out government spending cuts as he said the Treasury was right to be “ruthless” in cutting spending.

A spending review, due later this year, is expected to require government departments to make efficiency savings worth 5% of their budgets.

Sir Keir told a news conference: “We will be ruthless, as we have been ruthless in the decisions that we’ve taken so far.

“We’ve got clear fiscal rules, and we’re going to keep to those fiscal rules.”

He said the government had “inherited a real mess” of an economy from the Conservative government.

But, he said the government is “going to stick to the fiscal rules”.

“That is a very important thing,” he said.

“We’re determined to bring about that economic stability. And that’s why the fiscal rules are absolutely, absolutely central to what we do.”

Sir Keir also twice avoided answering whether Rachel Reeves will still be chancellor by the next election in 2029 in the wake of the dismal economic outlook.

“Rachel Reeves is doing a fantastic job,” he said, but would not say if she would remain in post.

“She has my full confidence, she has the full confidence of the entire party.

“She took the tough decisions.”

The Conservatives jumped on Sir Keir failing to confirm if Ms Reeves would still be in the job at the end of this parliament.

Leader Kemi Badenoch said: “The prime minister just refused to back his chancellor staying in her job.

“Keir Starmer and Rachel Reeves have driven Britain’s economy into the ground. The markets are in turmoil and business confidence has crashed, yet the chancellor is nowhere to be seen.

“Labour promised stability and instead the City minister is mired in corruption investigations and the chancellor is hanging on by her fingernails.”

Politics

Scotland’s former first minister Nicola Sturgeon splits from husband

Published

7 hours ago

January 13, 2025

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Scotland's former first minister Nicola Sturgeon splits from husband

Scotland’s former first minister Nicola Sturgeon has announced she has split from her husband, Peter Murrell.

Ms Sturgeon and Ms Murrell met via the SNP and first became a couple in 2003. They later married in July 2010 at Oran Mor in Glasgow.

In a statement posted to Instagram stories, she wrote: “With a heavy heart I am confirming that Peter and I have decided to end our marriage.

“To all intents and purposes we have been separated for some time now and feel it is time to bring others up to speed with where we are.

“It goes without saying that we still care deeply for each other, and always will.

“We will be making no further comment.”

Ms Sturgeon unexpectedly announced she was stepping down as Scotland’s first minister and SNP leader in February 2023 after succeeding Alex Salmond following the independence referendum in 2014.

Mr Murrell, who had been SNP chief executive since 2001, resigned from his post the following month after taking responsibility for misleading the media over party membership numbers amid the leadership race, which Humza Yousaf went on to win.

At the time, he said: “While there was no intent to mislead, I accept that this has been the outcome.”

In April 2023, Mr Murrell was arrested as part of a probe into the SNP’s funding and finances. He was later charged with embezzling SNP funds in April last year.

Ms Sturgeon and ex-party treasurer MSP Colin Beattie have also been arrested and released without charge as part of Police Scotland’s long-running Operation Branchform.

The probe, which has been ongoing since July 2021, is linked to the spending of around £600,000 raised by SNP supporters to be earmarked for Scottish independence campaigning.

Ms Sturgeon continues to deny any wrongdoing. In an interview last month, the Glasgow Southside MSP said she knew “nothing more” about the inquiry and was getting on with life “as best I can at the moment”.

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