Category Archives: Economic

Britain, Economic, Financial Markets, Government, Politics

Spring statement 2025: A stage built on myths

BRITAIN

BRITAIN is tightening its belt. The chancellor’s spring statement arrives with the gloomy tone of inevitability. Welfare payments for the sick and disabled will be shrunk, and public services from transport to criminal justice face much leaner times. The language is that of necessity. There is no money. The choices are hard, but unavoidable. So runs the rhetorical script.

The notion that painful cuts are inevitable is political theatre and grandstanding. Either Rachel Reeves knows the constraints are self-imposed – or, more troubling, believes they are real. Last October, she announced £190bn in extra spending, £140bn in additional borrowing, and £35bn more in taxes than previously forecast. The Treasury has expounded upon this by insisting “you can’t pour that amount of money into the state and call it austerity”.

Yes you can. Particularly where tens of billions are siphoned off in debt interest to uphold economic orthodoxy rather than meet social needs. The UK now spends more than £100bn a year on debt interest not because it is financially insolvent, but to a substantial degree because the Bank of England is offloading vast amounts of gilts, bought during quantitative easing, at a loss. The Treasury must cover these losses, while the flood of gilts into financial markets drives up interest rates on new borrowing. This is quantitative tightening (QT), with the state left to foot the bill for soaring interest costs and Bank payouts. Nonetheless, the Office for Budget Responsibility assumes that it will continue, locking in high costs.

This is ideology posing as policy. And it’s far from prudent. No money for free school meals or youth clubs, some parliamentarians warn, yet billions pour into the pockets of bondholders, for the sake of “stability”. Ending QT could redirect that money to public services – a better priority than reassuring markets with symbolic gestures.

If the Bank won’t stop on its own, it must be pushed. Under Gordon Brown, the Central Bank gained its independence in 1998 but included a safeguarding caveat: in “extreme economic circumstances” ministers can override the Bank in the public interest. If £100bn in spending isn’t extreme, what is? QT should be paused. The Bank stands alone among G7 peers in actively selling bonds and demanding Treasury cash to cover paper losses. This is self-defeating in a dangerously volatile world. Gilts could be strategically managed. Before New Labour, Kenneth Clarke often ignored the Bank’s advice – and was often right. But such thinking is now deemed heretical in a political culture that treats Central Bank independence as sacred, even when it deepens and exasperates public hardship.

The deeper irony cannot be lost on anyone. The chancellor refuses to raise taxes on the wealthy, will not relax her fiscal rules, and has ruled out borrowing more. So she claims that there is no alternative to cuts. Yet, these are self-imposed constraints – combined with deference to an unelected monetary authority – that sustain the illusion of necessity. Labour has been here before: Snowden did the same in the 1930s, and very nearly destroyed his party.

The spring statement is a performance. She asks the public to accept a diminished state as the result of external forces, when actually it’s the result of internal dogma. Worse, she may believe the script – failing to recall the economic tools once used to steer interest rates, debt, and public investment. Austerity isn’t the price of prudence, but the cost of forgetting. We have a chancellor of the exchequer who wears the mask of making tough decisions, but on a stage built on myths. The better choice would be to trim the Bank’s power, even if the spotlight has been carefully trained away from its damaging role.

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Aid, Britain, Defence, Economic, Government, Politics

Labour’s foreign aid cuts: they will undermine security

BRITAIN

THE nature of politics is about choices. Some are forced on governments by circumstance. Others are self-imposed. The Labour Government’s decision to cut the aid budget to pay for an increase in defence spending is firmly in the latter category. It is also very wrong – forcing the world’s poor to pay for Britain’s safety and security. This is a false economy. Cutting overseas aid will make the world more unstable, not less. The very crises that fuels conflict – poverty, failed states, climate disasters, and mass displacement – will only worsen with less development funding. Labour’s logic is self-defeating: diverting financial resources from aid to defence does not buy security; it undermines it.

The numbers tell the story. Despite government attempts to inflate the amounts involved, in real terms the extra £6bn for defence is tiny relative to Britain’s GDP. The UK could easily absorb this through borrowing – especially in a global financial system where pound sterling is heavily traded – or, if the government prefers, through a modest wealth tax. Yet, Sir Keir Starmer has chosen to frame this as a zero-sum game, where aid must give way to security. But why? Because this is not about economic necessity – it’s about political positioning. Labour wants to prove that it can be fiscally disciplined even when the numbers don’t demand it. It wants to neutralise Tory attacks, even when the real battle is over priorities, not affordability.

It is also a move that aligns with Donald Trump’s worldview. The US President wants to close down the US government’s main overseas aid agency, treating it as an expensive indulgence rather than a pillar of foreign policy. A UK prime minister that echoes Mr Trump’s “America first” instincts on defence and aid will likely meet with congeniality. Starmer has been searching hard for common ground since President Trump was re-elected. On aid and defence spending he has found it.

Labour doesn’t just believe in fiscal discipline; it believes that it must adopt financial rectitude and has constructed a justification for that belief. The problem is that by accepting Conservative trade-offs, Labour locks itself into an orthodoxy that it may later need to break. In a volatile world, Britain – outside the EU – must boost high-value exports and cut reliance on fragile supply chains. Even under Joe Biden, the UK was kept out of the US-EU Trade and Technology Council, which strengthened transatlantic industrial policy. Will Downing Street ever admit that Britain’s real limit is productive capacity and not budget deficits?

Britain’s fiscal constraint is artificial, but its resource constraints are real. Energy, food, and manufacturing are matters of national security, not just market functions. Without investment, dependence on key imports makes the UK vulnerable to supply-chain shocks and price inflation. If every pound spent requires a cut elsewhere, recent announcements by Labour’s Ed Miliband and Steve Reed wouldn’t have mattered.

Keir Starmer often presents himself as a pragmatist rather than an ideologue – claiming to be adapting to circumstances rather than adhering to dogma. Yet, such pragmatism is itself a belief system, one that treats capitalism’s rules as fixed and unchangeable, markets as being beyond politics, and history as a one-way street where past mistakes justify permanent and crippling caution. In doing so, Starmer isn’t just rejecting viable alternatives – he’s rewriting history to suggest they were never an option to begin with.

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Artificial Intelligence, Arts, Britain, Economic, Government, Intellectual Property, Legal, Society, Technology

Press freedom, copyright laws, and AI firms

BRITAIN

AMONG Britain’s greatest contributions to Western culture are press freedom and copyright law. Established side by side more than 300 years ago, they underpinned the Enlightenment, the Industrial Revolution, and much of the social change that followed.

They facilitated the free flow and exchange of ideas, opinions, literature and music, and offered legal safeguards for creators and publishers against having their work stolen or plagiarised.

Today, these sacred principles are at risk as never before.

In their headlong rush to develop all-embracing artificial intelligence systems, big-tech firms seem determined to ride roughshod over the intellectual property rights of those whose material they want to appropriate.

Musicians, authors, film and TV companies, artists and media organisations are already seeing their work lifted and used without permission. As the struggle for AI dominance intensifies, this larceny is becoming increasingly brazen.

Worse still, the UK Government appears to be taking the side of the tech giants over the creatives.

In a consultative document on possible changes to copyright law, it has proposed four options. Of these, its “preferred” option is to give a new exemption to AI firms, allowing them to develop their machine learning with copyrighted material without permission unless the holder actively opts out of the process.

Ministers have claimed such a change would give creators more control, but this is an illusion.

One of the strengths of British copyright is that it’s automatic. Works do not have to be registered to be protected from being stolen.

That means individual artists and the smallest local news sites have the same rights and protections as the largest publishers.

Permitting AI firms to take what they want unless rights have been reserved is like telling burglars they can walk into homes unless there is a note on the door asking them not to. In any case, there is no effective technical means of reserving rights and creatives will often be unaware their material has been “scraped”.

It would be far better to strengthen rather than weaken copyright legislation so it can be enforced quickly and effectively against infringements by AI developers. The onus should surely be on them not to break the law in the first place.

Everyone understands that AI is a vast and growing phenomenon which will be of enormous benefit in fields such as healthcare and business efficiency.

Many people will also appreciate the Government’s desire for Britain to be at the forefront of this technological revolution. But that cannot be used as cover to trample over crucial rights and freedoms.

Ingesting the entire output of the British music industry or mass-market news websites will not contribute anything to medical research.

Neither will it do much for our economy, as most of the profits generated by the tech companies will be taken out of the country.

It is both surprising and troubling that the Government has done no analysis of the economic impact of its proposal.

The UK has the world’s second largest creative sector, generating an estimated £126billion a year and supporting 2.4million jobs. Relaxing copyright law would cause it incalculable damage.

We also have vibrant, free and media pluralism – for now at least.

Our traditional press is in the process of rapid flux, as print gradually gives way to new digital platforms and revenue streams. But the fundamentals remain the same – to inform and entertain the public with fair, accurate, challenging and well-written journalism.

In this age of conspiracy, disinformation, and fake news, trusted sources of information and commentary are more important than ever. But it costs money to produce them, and if every article can immediately be copied without payment, then generating the revenue needed to sustain reliable journalism becomes impossible.

A free and independent media has long been a cornerstone of our democracy, but it is under very serious threat. We take it for granted at our peril.

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