Category Archives: Politics

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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Britain, Government, Health, NHS, Politics

The abolition of NHS England

HEALTH

Intro: The Labour Government’s shake-up of the NHS in England aims to cut waste and shift resources, but the looming funding gap raises doubts about its impact

THE UK Government’s decision to abolish NHS England – the world’s largest quango – was cast as a bold strike against bureaucracy. The move is designed to cut waste, “shift money to the frontline”, and by placing the NHS in England under direct democratic control. It is a declaration of intent from Sir Keir Starmer who wants Labour not to be the party of bigger government but the party of smarter government. That’s the theory, at least. The reality, as with most things in government, is more complicated.

The announcement happens to be less of a grand health reform and more a strategic positioning exercise. Wes Streeting, the Health Secretary, and the architect of this plan, is engaged in a delicate balancing act: convincing the Treasury that the NHS can stay within budget, while simultaneously lobbying for more money that he knows the health service will inevitably require. The cull of NHS England is a useful and headline-grabbing moment. It is one that will allow Mr Streeting to claim that he is shifting cash from managers to patient care, a necessary concession when preparing to argue for more Treasury investment.

The problem is that the numbers don’t add up. The savings from axing NHS England will be modest. The organisation’s cost to the Treasury is £2bn, a tiny fraction of the NHS’s £183bn budget for 2025/26. Of this, about £400m is spent on staff who work directly with local NHS bodies, and these roles will probably continue in some form. The savings come nowhere near enough to fill next year’s estimated £6.6bn funding gap. At best, it frees up a few hundred million pounds. At worst, it shifts costs elsewhere while causing months of upheaval in an already overstretched system.

The NHS faces mounting pressure to cut costs, with the Chancellor, Rachel Reeves, insisting that it must live within its means. Hospital trusts will need to tighten their belts even further. It does not take a health economist to recognise that when resources are cut, patient demand does not magically disappear – it simply resurfaces elsewhere. If community services shut-down to balance the books, then the pressure on GPs and A&E departments will only intensify. If the health service is told to do more with less, the risk is that it simply ends up doing less with less.

Sir Keir’s embrace of Mr Streeting’s reform agenda is a calculated gamble. The PM is backing an NHS overhaul that may not deliver as promised. His endorsement, however, bolsters Mr Streeting’s standing with the Treasury, which faces a looming fiscal shortfall. With tax rises off the table, and Ms Reeves’ fiscal straitjacket firmly in place, spending cuts after 2025/26 seem an inevitability.

The NHS may have won big in the last budget, but as the Darzi report warned, it remains in “serious trouble”. Years of under-investment and overcrowded hospitals, with no relief from an overstretched social care system, have left it desperately struggling. Without greater funding, it cannot meet the rising demand of an ageing population, let alone expand its workforce. The Health Secretary must keep pressing the Treasury for the resources he needs, cloaking each plea for cash in the fashionable language of “modernising reform”.

Such rhetorical agility is a skill that Westminster normally rewards. Consider, for example, how Universal Credit came into being. But whether he delivers on his three big shifts – moving care out of hospitals, prioritising prevention, and digitising the NHS – remains to be seen. If the health service deteriorates further, the government will soon find that it has not only failed to fix the NHS in England but has taken ownership of its decline.

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Britain, Europe, Government, Politics, Russia, Society, Ukraine, United States

Kyiv’s allies should avoid Putin’s entrapment

PROPOSED UKRAINE CEASEFIRE

PUTTING a stop to the killing in Ukraine is a highly desirable aim. A permanent end to the war would be a truly great achievement. Who on this earth would not welcome an agreement that stopped Russia’s daily slaughter of civilians and its destruction of Ukraine’s cities, and which would allow millions of displaced people to return home? As history clearly shows, peace at any price is no peace at all. In his untutored haste, Donald Trump risks rushing into a bad deal with Vladimir Putin that could set the stage for renewed conflict in Ukraine and other vulnerable countries bordering Russia and for an overall weakening of Europe’s security.

The proposed 30-day truce under discussion between the US and Russia entails a complete halt to fighting and temporary freezing of the frontlines in eastern Ukraine. It makes provision for the exchange of prisoners of war, release of civilian detainees, and the return from Russia of abducted Ukrainian children. The truce could be extended beyond the initial period. But Putin is adamant that, before it even begins, many complex, longer-term issues must be addressed, including the most fundamental point of all: Ukraine’s future as an independent, sovereign state.

This attempt by the Russian president to set highly problematic conditions must be firmly resisted by Trump and western leaders. As Ukraine’s president, Volodymyr Zelensky says, it is a transparent bid to delay and manipulate the negotiations and win broader concessions, while allowing Moscow’s forces time to pursue battlefield gains, particularly in Russia’s contested Kursk region. It is not reasonable to insist on a halt to military aid to Kyiv during a truce. Putin’s demand that the historical “root causes” of the conflict be examined is a cynical ploy and trap, set to gain wider advantage.

Familiar tactics. Putin raises hopes of a breakthrough, then finds reasons why it must remain elusive. He tells untruths about the situation at the front, as in his fabricated claim that Ukrainian troops are encircled in Kursk. He flatters and plays Trump to his own tune, congratulating him for “doing everything” for peace and exploiting the US president’s ego-driven desire to keep his promise to end the war. Putin is brutally clear about his war aims: a neutral, disarmed Ukraine led by a Moscow-friendly government. His wider objective is an end to international ostracism, the lifting of punitive sanctions, and a remaking of Europe’s security architecture to suit his post-Soviet vision. All this to be achieved by a dramatic reset in US-Russia relations, as gaily and inexplicably offered, by his comrade in the White House.

Before making more unforced concessions, Trump should study very carefully this threatening agenda. He should remember this war would end today if Putin wished. He should understand the Russian bully does not want peace; he wants victory. He should stop at once regurgitating Russian propaganda. Most of all, he should stop his cruel persecution and intimidation of Zelensky and start applying substantial, painful pressure on Russia to halt its illegal and unjustified invasion of Ukraine. The fact that Trump is unlikely to do any of this goes to the heart of the problems surrounding the talks. For all his self-important bluster and insincere compassion, the “master dealmaker” does not have a plan extending beyond an immediate halt to the gunfire. Putin certainly does.

Trump’s optimistic prediction that a good agreement can be reached has little basis in fact. Britain, at least, is aware of this. Sir Keir Starmer says Putin is not serious about peace and should stop “playing games”. The PM’s latest attempt to rally European and other allies around a ceasefire deal backed by credible, in-theatre security guarantees is worthwhile. His “coalition of the willing” proposal, for example, is a key feature.

But Sir Keir surely knows that Trump’s mishandling of the negotiations so far, and his daily attempts to win personal credit for imaginary progress, as well as his persistent exclusion of the Ukrainians and his biased pressurising of Kyiv (but not Moscow), is unlikely to end well. No peacekeeping force, whether under a NATO, EU, or UN flag, can be deployed in Ukraine without viable security guarantees, principally from the US – which Trump withholds. Nor can it happen without Putin’s consent – and he is vehemently opposed.

The evident danger for Britain and Europe is that they may be strong-armed by Washington into endorsing and policing a flawed, short-term ceasefire cooked up by Trump and Putin that does not serve, and potentially undermines, their long-term objective: securing a free, sovereign Ukraine and putting a stop to Russian aggression. The dialogue between Putin and Trump is at an early stage, but who knows what Trump will give away next in his haste to claim the prestigious mantle of Nobel peacemaker, shaft his old foe Zelensky and appease his ex-KGB crony?

Trump has already told Ukraine it must accept the loss of occupied territory in the east and Crimea. He has already dashed its NATO membership hopes. He has already cut military aid and intelligence assistance once, refused to guarantee the peace, and publicly shamed and humiliated Zelensky in front of the world. And if a ceasefire fails to materialise, it’s a safe bet Trump will find a way to blame Kyiv.

Trump is no honest broker. He is no friend to Ukraine or Europe. Like Putin, he cannot be trusted to build or honour a just and lasting peace. A truce, on fair and reasonable terms, that Kyiv can freely accept, and that can be adequately monitored and effectively enforced, would be the way to proceed. In its absence, Ukraine must fight on with the support of Britain and other coalition partners.

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