Welfare versus warfare: Sir Keir Starmer’s unresolved question – and why the PM’s pinned his hopes on economic growth
Welfare versus warfare: for decades, it’s a question to which successive prime ministers have responded with one answer.
After the end of the Cold War, leaders across the West banked the so-called “peace dividend” that came with the end of this conflict between Washington and Moscow.
Instead of funding their armies, they invested in the welfare state and public services instead.
But now the tussle over this question is something that the current prime minister is grappling with, and it is shaping up to be one of the biggest challenges for Sir Keir Starmer since he got the job last year.
As Clement Attlee became the Labour prime minister credited with creating the welfare state after the end of the Second World War, so it now falls on the shoulders of the current Labour leader to create the warfare state as Europe rearms.
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UK to buy nuclear-carrying jets
Be it Donald Tusk, the Polish prime minister, arguing last year that Europe had moved from the post-war era to the pre-war era; or European Commission chief Ursula von der Leyen calling on the EU to urgently rearm Ukraine so it is a “steel porcupine” against Russian invaders; there is a consensus that the UK and Europe are on – to quote Sir Keir – a “war footing” and must spend more on defence.
To that end the prime minister has committed to increase UK defence spending to 2.5% of GDP by 2027, raiding the overseas development aid budget to do so, and has also committed, alongside other NATO allies, to spend 5% of GDP on defence by 2035.
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What is NATO’s 5% defence spending goal?
That is a huge leap in funding and a profound shift from what have been the priorities for government spending – the NHS, welfare and education – in recent decades.
The Institute for Fiscal Studies’ Carl Emmerson said the increase, in today’s terms, would be like adding approximately £30bn to the 2027 target of spending around £75bn on core defence.
Sir Keir has been clear-eyed about the decision, arguing that the first duty of any prime minister is to keep his people safe.
But the pledge has raised the obvious questions about how those choices are funded, and whether other public services will face cuts at a time when the UK’s economic growth is sluggish and public finances are under pressure.
This, then, is one of his biggest challenges: can he make sure Britain looks after itself in a fragile world, while also sticking to his promises to deliver for the country?
It is on this that the prime minister has come unstuck over the summer, as he was forced to back down over proposed welfare cuts to the tune of £5bn at the end of this term, in the face of a huge backbench rebellion. Many of his MPs want warfare and welfare.
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Starmer and Merz sign deal on defence and migration
“There’s been a real collision in recent weeks between those two policy worlds,” explains Jim Murphy, who served both as a welfare minister under Tony Blair and shadow defence secretary under Ed Miliband.
“In welfare, how do you provide for the people who genuinely need support and who, without the state’s support, couldn’t survive? What’s the interplay between that and the unconditional strategic need to invest more in defence?
“For the government, they either get economic growth or they have a series of eye-watering choices in which there can be no compromise with the defence of the state and everything else faces very serious financial pressures.”
He added: “No Labour politician comes into politics to cut welfare, schools or other budgets. But on the basis that defence is non-negotiable, everything else, unfortunately, may face those cuts.”
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‘There are lines I will not cross’
While the PM sees this clearly, ask around the cabinet table and ministers will admit that the tough choices society will need to take if they genuinely want to respond to the growing threat from Russia, compounded by the unpredictability of Donald Trump, is yet to fully sink in.
There are generations of British citizens that have only ever lived in peace, that do not, like I do, remember the Cold War or The Troubles.
There are also millions of Britons struggling with the cost of living and and public satisfaction with key public services is at historic lows. That is why Labour campaigned in the election on the promise of change, to raise living standards and cut NHS waiting lists.
Ask the public, and 49% of people recognise defence spending needs to increase. But 53% don’t want it to come from other areas of public spending, while 55% are opposed to paying more tax to fund that defence increase.
There is also significant political resistance from the Labour Party.
Sir Keir’s attempts to make savings in the welfare budget have been roundly rejected by his MPs. Instead, his backbenchers are talking about more tax rises to fund public services, or even a broader rethink of Rachel Reeves’s fiscal rules.
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Rachel Reeves’s fiscal dilemma
Anneliese Dodds, who quit as development minister over cuts to the overseas aid budget, wrote in her resignation letter that she had “expected [cabinet] would collectively discuss our fiscal rules and approach to taxation, as other nations are doing”, as part of a wider discussion about the changing threats.
In an interview for our Electoral Dysfunction podcast, which will be released later this summer, she expanded on this idea.
She said: “I think it’s really important to take a step back and think about what’s going to be necessary, looking 10, 20 years ahead. It looks like the world is not going to become safer, unfortunately, during that period. It’s really important that we increase defence spending.
“I think that does mean we’ve got to really carefully consider those issues about our fiscal rules and about taxation. That isn’t easy… nonetheless, I think we will have to face up to some really big issues.
“Now is the time when we need to look at what other countries are doing. We need to consider whether we have the right system in place.”
Anneliese Dodds quit the government over cuts to the overseas aid budget. Pic: PA
For the Labour MP, that means potentially reassessing the fiscal rules and how the fiscal watchdog assesses government spending to perhaps give the government more leeway. She also believes that the government should look again at tax rises.
She added: “We do, I believe, need to think about taxation.
“Now again, there’s no magic wand. There will be implications from any change that would be made. As I said before, we are quite highly taxing working people now, but I think there are ways in which we can look at taxation, not without implications.
“But in a world of difficult trade-offs, we’ve got to take the least worst trade-off for the long term. And that’s what I think is gonna be really important.”
Those trade-offs are going to be discussed more and more into the autumn, ahead of what is looking like an extremely difficult budget for the PM and Ms Reeves.
Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer are facing difficult choices. Pic: PA
Not only is the chancellor now dealing with a £5bn shortfall in her accounts from the welfare reform reversal, but she is also dealing with higher-than-expected borrowing costs, fuelled by surging debt costs.
Plus, government borrowing was £3.5bn more than forecast last month, with June’s borrowing coming in at £20.7bn – the second-highest figure since records began in 1993.
Some economists are now predicting that the chancellor will have to raise taxes or cut spending by around £20bn in the budget to fill the growing black hole.
Former chancellor Jeremy Hunt says Labour’s U-turn on cuts to welfare risk trapping Britain in a ‘doom loop’
Jeremy Hunt, former Conservative chancellor and now backbencher, tells me he was “massively disappointed” that Labour blinked on welfare reform.
He said: “First of all, it’s terrible for people who are currently trapped on welfare, but secondly, because the risk is that the consequence of that, is that we get trapped in a doom loop of very higher taxes and lower growth.”
‘This group of politicians have everything harder ‘
Mr Murphy says he has sympathy for the predicament of this Labour government and the task they face.
He explained: “We were fortunate [back in the early 2000s] in that the economy was still relatively okay, and we were able to reform welfare and do really difficult reforms. This is another world.
“This group of politicians have everything harder than we had. They’ve got an economy that has been contracting, public services post-COVID in trouble, a restless public, a digital media, an American president who is at best unreliable, a Russian president.
“Back then [in the 2000s] it was inconceivable that we would fight a war with Russia. On every measure, this group of politicians have everything harder than we ever had.”
Over the summer and into the autumn, the drumbeat of tax rises will only get louder, particularly amongst a parliamentary party seemingly unwilling to back spending cuts.
But that just delays a problem unresolved, which is how a government begins to spend billions more on defence whilst also trying to maintain a welfare state and rebuild public services.
This is why the government is pinning so much hope onto economic growth as it’s escape route out of its intractable problem. Because without real economic growth to help pay for public services, the government will have to make a choice – and warfare will win out.
What is still very unclear is how Sir Keir manages to take his party and the people with him.
Donald Trump has landed in Scotland for a four-day trip including high-level meetings – praising Sir Keir Starmer as “a good man” but calling illegal migration a “horrible invasion” that is “killing Europe”.
Crowds gathered at Prestwick Airport in Ayrshire amid a major security operation for the US president’s visit.
Mr Trump told reporters: “I like your prime minister. He’s slightly more liberal than I am… but he’s a good man… he got a trade deal done. It’s a good deal for the UK.”
The pair are expected to discuss potential changes to the UK-US trade deal which came into force last month.
Trump left Air Force One to head to Turnberry, one of his Scottish golf courses. Part of the trip will include the opening of another course in Aberdeenshire, billed as “the greatest 36 holes in golf”.
Trump supporters waved as Air Force One landed. Pic: PA
“There’s no place like Turnberry. It’s the best, probably the best course in the world. And I would say Aberdeen is right up there,” the US president said.
“Sean Connery helped get me the [planning] permits. If it weren’t for Sean Connery, we wouldn’t have those great courses,” he added.
During the trip, President Trump will also hold discussions with Scotland’s First Minister John Swinney and EU Commission President Ursula von der Leyen, who is keen to secure a trade deal with the US.
Donald Trump spoke to reporters after landing at Prestwick Airport, Ayrshire. Pic: AP
Mr Trump told reporters there was “a good 50-50 chance” of an agreement with the EU but added there were “maybe 20 different” sticking points.
EU diplomats say a deal could result in a broad 15% tariff on EU goods and half of the 30% Trump is threatening to impose by 1 August.
He travelled to Turnberry, one of his Scottish golf resorts, amid tight security. Pic: Reuters
The US president touched on illegal immigration and gave European leaders a stark warning.
“You better get your act together or you’re not going to have Europe anymore. You got to get your act together,” he said.
“But you’re allowing it to happen to your countries and you got to stop this horrible invasion that’s happening to Europe. Immigration is killing Europe.”
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What do Scots think of Trump visit?
He was also scathing about the installation of wind turbines across the continent.
“Stop the windmills. You’re ruining your countries,” he said. “It’s so sad. You fly over and you see these windmills all over the place, ruining your beautiful fields and valleys and killing your birds.”
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Domestically, Mr Trump faces the biggest political crisis of his second term in office over his administration’s handling of files linked to disgraced financier and sex offender Jeffrey Epstein, who died in prison in 2019.
He faced another round of questions after stepping off Air Force One.
“You’re making a big thing over something that’s not a big thing. I’m focused on making deals, not on conspiracy theories that you are,” he said.
Mr Trump added that “now’s not the time” to discuss a pardon for Ghislaine Maxwell, Epstein’s imprisoned accomplice.
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Trump in Scotland amid Epstein storm
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While the president’s visit did attract some enthusiastic flag-waving supporters at Prestwick Airport, he is also likely to trigger a number of protests, prompting Police Scotland to call in support from other forces in the UK.
The Stop Trump Scotland group has planned demonstrations on Saturday in Edinburgh, Aberdeen and Dumfries.
About 70% of Scots have an unfavourable opinion of Mr Trump, while 18% have a positive opinion, an Ipsos poll in March found.
Mr Trump is staying at his Turnberry property on Scotland’s west coast this weekend, before travelling to Aberdeenshire on Monday, where he will open a second 18-hole course.
He is due to return to the UK in September for a state visit hosted by the King – the first world leader in modern times to undertake two UK state visits.
UK
‘Immigration is killing Europe’: Donald Trump issues warning to leaders as he arrives in Scotland
Donald Trump has landed in Scotland ahead of a four-day trip, which includes high-level meetings, praising Sir Keir Starmer as “a good man” but also calling illegal migration a “horrible invasion” that was “killing Europe”.
Crowds gathered at Prestwick Airport in Ayrshire amid a major security operation for the US president’s visit.
Mr Trump told reporters: “I like your prime minister. He’s slightly more liberal than I am… but he’s a good man… he got a trade deal done. It’s a good deal for the UK.”
Trump latest: Donald Trump arrives in Scotland
The pair are expected to discuss potential changes to the UK-US trade deal which came into force last month.
Trump left Air Force One to head to Turnberry, one of his Scottish golf courses. Part of the trip will include the opening of another course in Aberdeenshire, billed as “the greatest 36 holes in golf”.
Trump supporters waved as Air Force One landed. Pic: PA
“There’s no place like Turnberry. It’s the best, probably the best course in the world. And I would say Aberdeen is right up there,” the US president said.
“Sean Connery helped get me the [planning] permits. If it weren’t for Sean Connery, we wouldn’t have those great courses,” he added.
During the trip, President Trump will also hold discussions with Scotland’s First Minister John Swinney and EU Commission President Ursula von der Leyen, who is keen to secure a trade deal with the US.
Donald Trump spoke to reporters after landing at Prestwick Airport, Ayrshire. Pic: AP
Mr Trump told reporters there was “a good 50-50 chance” of an agreement with the EU but added there were “maybe 20 different” sticking points.
EU diplomats say a deal could result in a broad 15% tariff on EU goods and half of the 30% Trump is threatening to impose by 1 August.
He travelled to Turnberry, one of his Scottish golf resorts, amid tight security. Pic: Reuters
The US president touched on illegal immigration and gave European leaders a stark warning.
“You better get your act together or you’re not going to have Europe anymore. You got to get your act together,” he said.
“But you’re allowing it to happen to your countries and you got to stop this horrible invasion that’s happening to Europe. Immigration is killing Europe,” he told reporters.
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What do Scots think of Trump visit?
He was also scathing about the installation of wind turbines across Europe.
“Stop the windmills. You’re ruining your countries,” he said. “It’s so sad. You fly over and you see these windmills all over the place, ruining your beautiful fields and valleys and killing your birds.”
Read more from Sky News:
Epstein risks following Trump
Ghislaine Maxwell questioned
Epstein questions keep coming
Domestically, President Trump faces the biggest political crisis of his second term in office over his administration’s handling of files linked to disgraced financier and sex offender Jeffrey Epstein, who died in prison in 2019.
He faced another round of questions after stepping off Air Force One. “You’re making a big thing over something that’s not a big thing. I’m focused on making deals, not on conspiracy theories that you are,” he said.
Mr Trump added that “now’s not the time” to discuss a pardon for Ghislaine Maxwell, Epstein’s imprisoned accomplice.
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Trump in Scotland amid Epstein storm
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While the president’s visit did attract some enthusiastic flag-waving supporters at Prestwick Airport, he is also likely to trigger a number of protests, prompting Police Scotland to call in support from other forces in the UK.
The Stop Trump Scotland group has planned demonstrations on Saturday in Edinburgh, Aberdeen and Dumfries.
About 70% of Scots have an unfavourable opinion of Trump, while 18% have a positive opinion, an Ipsos poll in March found.
President Trump is staying at his Turnberry property on Scotland’s west coast this weekend, before travelling to Aberdeenshire on Monday, where he will open a second 18-hole course.
He is due to return to the UK in September for a state visit hosted by the King – the first world leader in modern times to undertake two UK state visits.
A woman who thought she was being injected with Botox was left unable to swallow and doctors thought she had suffered a stroke – after she contracted a life-threatening illness from a potentially illegal product.
Nicola Fairley is one of dozens of people who have developed botulism linked to unlicenced anti-wrinkle injections.
She had the procedure done with her regular beautician after winning a Facebook competition for three areas of “Botox”.
Nicola Fairley
“Within two or three hours my forehead and the sides of my eyes had started to freeze,” Nicola says.
“At first I thought ‘amazing’, that’s what I wanted – then it just carried on.”
Nicola was eventually sent to A&E in Durham, where she met several other patients who all had similar symptoms.
Doctors were stumped. “They thought I’d had a stroke,” she says.
“We all had problems with our eyes, some of us with our breathing. I couldn’t swallow – they put me on nil by mouth because they were worried I would choke in the waiting room.”
Doctors were worried Nicola could choke after she was injected with a suspected illegal product
It turns out all of the patients had recently had anti-wrinkle injections containing botulinum toxin.
Health officials believe they were imported, illegal products.
Botulism – the disease they caused – is so rare many doctors never see it in their entire careers.
It can cause symptoms including slurred speech and breathing problems, and can be deadly.
The disease is so unusual, and so many cases were coming in, that doctors exhausted their stocks of anti-toxin and had to ask hospitals as far away as London to get more.
The UK Health Security Agency has so far confirmed 38 cases of botulism linked to cosmetic toxin injections, but Sky News has been told of several more.
The outbreak began in the North East but cases have now been seen in the East of England and East Midlands as well.
There are only a handful of legal botulinum toxin products in the UK – of which Botox is one.
But cosmetic treatments are largely unregulated, with anyone allowed to inject products like fillers and toxins without any medical training.
Cheap, illegal products imported from overseas are easily available.
Dr Steven Land
‘It’s the Wild West’
Dr Steven Land runs Novellus Aesthetics clinic in Newcastle upon Tyne. He worked for decades as an emergency medicine doctor before moving into aesthetics.
He says he has been warning health officials of an outbreak for years.
“It’s the Wild West,” Dr Land told Sky News.
“Because anyone can do this, there is a lack of knowledge around what is legal, what’s not legal, what is okay to be injected.
“These illegal toxins could have 50 units, 5,000 units or rat poison – there could be anything in there.”
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Dr Land showed us messages that he says he gets on a weekly basis, from sellers trying to push him cheap, unlicenced products.
They advertise “limited time offers” and cheap bundles on toxins imported from overseas. He calls them “drug dealers”.
“They are preying on the lack of knowledge among non-medical practitioners,” he says.
Consultations on how to regulate the aesthetics industry have been ongoing for years – but so far, no changes have been introduced.
The UK government now says it does plan to regulate certain procedures, but it’s not said how it will do this, or when.
“What will it take?” Nicola says. “One of the women we were with did almost die – she had to be resuscitated.”
Nicola’s beautician has stopped responding to her messages, so she says she still has no idea what the product was “or how much of it is in me”.
She doesn’t know how long her symptoms will last, but just hopes she will eventually recover.
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