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Britain MUST prepare for war on home soil as Iran, Russia & China ramp up threats, ministers warned
Britain MUST prepare for war on home soil as Iran, Russia & China ramp up threats, ministers warned

Scottish Sun

time4 days ago

  • Business
  • Scottish Sun

Britain MUST prepare for war on home soil as Iran, Russia & China ramp up threats, ministers warned

Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) BRITAIN must prepare for war on home soil for the first time in decades, ministers warned today. A chilling new national security blueprint says the UK could face a 'wartime scenario' for the first time 'in many years', with enemies like Russia, China and Iran ramping up the threats. Sign up for the Politics newsletter Sign up 6 Ministers issued the warning amid growing global tensions Credit: PA 6 Sir Keir Starmer admitted the country faced challenges "on the home front" Credit: Getty The stark message came as the PM jetted into The Hague for a crunch NATO summit, where leaders confirmed plans for all allies to spend 5 per cent of GDP on defence and security by 2035. Sir Keir Starmer admitted the country faces 'daily challenges on the home front' when asked about the growing threat after the security strategy's release. He pointed to "very, very frequent" cyber attacks and warned energy supplies were being used as a weapon by Britain's enemies. The PM added: "In the United Kingdom, we have to guard properly against those threats and we will do so.' The Government's strategy lays bare the scale of the danger, warning: 'We are in an era in which we face confrontation with those who are threatening our security. 'For the first time in many years, we have to actively prepare for the possibility of the UK homeland coming under direct threat, potentially in a wartime scenario.' The new plan focuses on three key areas - protecting the UK at home, working with allies to strengthen global security, and rebuilding Britain's defence industries and technological capabilities. But the PM is now facing growing pressure to explain how they will afford the huge jump in defence spending needed to meet NATO's 2035 target. The 5 per cent pledge includes 3.5 per cent for core defence spending and 1.5 per cent on wider security like energy, cyber defences and border protection. Experts say hitting 3.5 per cent alone could cost taxpayers an extra £40 billion a year - but the PM has refused to say how it will be paid for. RAF fighter jets to be scrambled to Middle East as Israel-Iran conflict spirals and Tehran threatens to strike UK bases Pressed on whether taxes will rise to meet the bill, he said: 'Every time we've set out our defence spending commitments, so when we went to 2.5% in 2027/28, we set out precisely how we would pay for it, that didn't involve tax rises. 'Clearly we've got commitments in our manifesto about not making tax rises on working people and we will stick to our manifesto commitments." But the manifesto only applies for this Parliament - leaving the door wide open to tax hikes after the next election, when the most expensive part of the NATO pledge kicks in. Institute for Fiscal Studies director Paul Johnson warned that the defence spending increase would need to be funded by '£30 or £40bn more taxes'. 6 The warning comes after the PM pledged to increase defence spending Credit: Getty 6 Brits have been warned that the UK could face a "wartime scenario" Credit: PA Speaking to Times Radio about the increase, he said: 'Where that's going to come from, goodness only knows. "Well, I think we do know it's going to come from; £30 or £40bn more taxes, because in the end there's nowhere else it can come from. 'I can't really see this government cutting spending on pensions or the health service or welfare or what have you by that amount. I mean they can't.' 6 The PM pointed to "very very frequent" cyber attacks Credit: Getty

Households face ‘a lot more' tax rises after defence pledge
Households face ‘a lot more' tax rises after defence pledge

Telegraph

time4 days ago

  • Business
  • Telegraph

Households face ‘a lot more' tax rises after defence pledge

Households face a fresh wave of tax rises to fund tens of billions of pounds in extra defence spending, one of the country's leading economists has warned. Paul Johnson, director of the Institute for Fiscal Studies, said 'a lot more' tax increases will be needed to meet renewed commitments on defence, particularly as Sir Keir Starmer comes under pressure to water down spending cuts. In a post on social media, Mr Johnson said: ' Another £30bn on defence. U-turn on winter fuel. Rebellion on plans which just slightly slow huge increases in spending on disability benefits. 'If spending goes only one way, then so, inevitably, will tax. Historic increases already this decade. Looks like a lot more to come.' The threat of further levies comes after Rachel Reeves's £40bn tax-raising Budget last October. Along with a change in the fiscal rules to allow more borrowing, the autumn Budget was intended to cover the Government's spending plans for much of the rest of this parliament. However, those plans have been thrown off course after a year dominated by weak economic growth and stubbornly high borrowing costs. Fiscal pressures have grown in recent months after the Government was forced to back down on planned cuts to winter fuel payments, while the Prime Minister is also under mounting pressure to limit welfare savings. The debate over tax rises has been renewed as Sir Keir is attending the Nato summit in The Hague, where he is expected to commit the UK to spending 5pc of GDP on 'national security'. This is up from the current 2.4pc, meaning the Government will have to consider raising some of the main tax rates to pay for the increase. An extra £30bn of spending could be paid for with a 3p rise in the basic and higher rates of income tax, for instance, taking those to 23pc and 43pc respectively. A similar amount could be raised by increasing VAT from 20pc to 23pc, according to HMRC estimates, or raising corporation tax from 25pc to 32.5pc. However, this would no doubt spark criticism after Labour promised not to raise any headline taxes in its election manifesto last year.

Strategy without substance: Labour must do more to stop the City exodus, says ALEX BRUMMER
Strategy without substance: Labour must do more to stop the City exodus, says ALEX BRUMMER

Daily Mail​

time5 days ago

  • Business
  • Daily Mail​

Strategy without substance: Labour must do more to stop the City exodus, says ALEX BRUMMER

Now we have a full house: Labour's spending review, the infrastructure plan and the long-awaited industrial strategy. Anyone seeking to reconcile the bucketful of numbers, different timings of implementation and the exact sum of money involved will, to quote departing Institute of Fiscal Studies chief Paul Johnson, be baffled. This is not to say that there is not good stuff in the industrial strategy. The decision to relieve a bunch of manufacturing business, some 7,000 firms, of intrusive green levies represents a significant change of direction which should improve the competitiveness of the motor, aerospace and chemical industries. But it does not do much help for retail and hospitality, which face not just escalating fuel costs but the consequences of the employers' National Insurance increase and ramped-up business rates. Whitehall is a whizz at coming up with an alphabet soup of new names such as the 'British Industrial Competitiveness Scheme' and a 'Connections Accelerator Service'. Hot air: Whitehall is a whizz at coming with an alphabet soup of new names such as the British Industrial Competitiveness Scheme and a Connections Accelerator Service These will sit alongside the other good stuff already unveiled, such as Great British Energy and the National Wealth Fund. How this hangs together is confusing. The focus on eight sectors where the UK excels – advanced manufacturing, clean energy, creative industries, defence, digital tech, financial services, life sciences, and professional and business services – clearly has merit. Much of it is hot air. There is no recognition that great swathes of tech leave these shores daily. Only yesterday, precision instrument maker Spectris fell into the hands of private equity plunderer Advent. The creative industries are under threat from AI because Sir Keir Starmer favours American big tech over home-grown talent. The decision to refuse assistance to AstraZeneca vaccine production in the UK encouraged our biggest pharma concern to invest overseas. UK fintech creation Wise and Revolut plan New York listings. And the 2.5 per cent of GDP promised for defence spending is half the NATO target of 5 per cent. Practical steps such as judicious use of the National Security & Investment Act, to end the madness of foreign and private equity bids, would be a good start to a refreshed approach. Health boost In the end, after a revolt from UK long investors, the ridiculous board of NHS and medical property landlord Assura opted for an effective merger with PHP. That may require fewer goodies for executives and the jobs grief which comes with mergers. It must, however, be in the best interest of stakeholders. Those at Assura who felt a cash deal with KKR was the better option were delusional. A search of the British Medical Journal archive provides clear guidance on the impact of private equity ownership in this space. It results in extra cost to patients and payers, secondary effects on health outcomes and 'mixed to harmful impacts on quality'. A KKR deal would also have meant signing away the benefits of a 3 per cent rise in Labour's investment in the NHS to grasping financiers. All the indications are that many reforms to the NHS would focus on community and primary care, enhancing the value of companies investing in clinics and practices. KKR's last offer was 'final', precluding a return with a higher bid. One trusts KKR won't be back for the whole caboodle in six months. Cherry picking Spectris is the latest advanced UK engineer to take the private equity shilling, choosing private equity giant Advent ahead of KKR. The price of £4.4billion paid may look generous but not when one considers the discount to the New York stock market for the best of British engineering. No one in the Government should be complacent. It weakens the London markets. Advent's purchase of Cobham in 2019 and the dismantling of an aviation pioneer was a disgrace. Its key flight refuelling technology was sold to a US rival. The enormous value of Cobham's innovative tech was demonstrated in the epic 18-hour flight of B2 stealth bombers to Iran and back at the weekend. What happened to 'securonomics'?

There hasn't been a ‘big chancellor' since Osborne: IFS chief gives final mark
There hasn't been a ‘big chancellor' since Osborne: IFS chief gives final mark

The Guardian

time14-06-2025

  • Business
  • The Guardian

There hasn't been a ‘big chancellor' since Osborne: IFS chief gives final mark

'In my lifetime, who have been the big chancellors?' says Paul Johnson, as he prepares to hang up his spreadsheets as the director of the Institute for Fiscal Studies. 'You've had Healey, Lawson, Clarke, Brown. Arguably Osborne. We haven't had one since then. They're the long-lasting ones.' The fact that Rachel Reeves is not on that list will elicit no surprise in No 11, where Johnson is seen as a nitpicking critic, naive about the constraints of politics. Supremely confident and resolutely wonkish, throughout his 14 years at the top of the IFS thinktank the 58-year-old economist has exuded a baffled frustration at the standard of political debate about fiscal policy. He is critical of George Osborne's deep spending cuts, which had 'really negative long-term effects' on some public services. But he praises the former Tory chancellor's single-mindedness. 'You knew where he was coming from, because he had a pretty clear idea on the fiscal side, at least: we're doing austerity, we're bringing the size of the state back down to where it was pre-financial crisis and we're largely doing that through spending cuts.' By contrast, he expresses exasperation with Labour's partial U-turn on the winter fuel allowance – though he admits the pressure to do so was external. 'I don't think people have any sense of scale,' Johnson says. 'This was partly the fault of the government, of course, but this was a small thing, a billion pounds or so, which is now going to make virtually no savings at all.' Reeves took the public by surprise when she announced the winter fuel cut, blaming what she claimed was a £22bn hole in the public finances. Johnson, once a Treasury civil servant himself, concedes there is some information the chancellor could not have known about before Labour came to power. For example, the Home Office failed to account properly for spending on asylum seekers – but, he argues, both major parties were well aware there was a reckoning coming. 'We said that all the way through the last election. And the parties just said, 'no, no, no, no'. Until after the election. When they suddenly made up – or partly made up – 'oh, look, we've discovered a black hole. We never knew anything about this.' So it's really frustrating.' Johnson reserves his strongest condemnation for Reform UK and the Green party, whose approach to fiscal policy during the last election he decries as 'outrageous'. 'I do put Reform and the Greens in exactly the same bucket here. Not just to be politically balanced, but because they are very, very similar, in the sense that Reform had, I can't remember, £100bn, £150bn of tax cuts and no spending cuts. They just said: 'We'll just get some efficiencies.' And then the Greens had massive unfunded spending increases.' And Johnson sees this unwillingness to face reality as increasingly worrying, given the pressures on spending are only likely to increase. 'If you look over the next five to 10 years, what have we got coming down the line? We've got at least £20bn on defence spending, probably. Continued increases in health spending. Huge pressures on social care. Pension spending. You're going to lose £30bn of revenue from taxing petrol. You put all of that together and you've got a really big challenge.' Labour has promised not to increase the main revenue raisers, including income tax, VAT and national insurance. But Johnson is sceptical that much more can be raised from the wealthy and insists moderate earners will eventually have to pay more, unless spending is slashed. 'There's a choice here. You can stop all sorts of handouts to pensioners, and you could ration some of the things that you get on the NHS. You could have less focus on some aspects of the education system. But if you want all of those things, then you'll probably going to have to pay more tax,' he says. Surrounded by boxes in his utilitarian office in Bloomsbury, Johnson is preparing for a fresh start. He will shortly take up a post as provost of Queen's College at Oxford. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Pondering how he will feel when Reeves delivers her second budget, and he is not there to deliver his familiar acerbic commentary, he says: 'It's going to be very weird in the autumn. I'll probably be sat in a committee meeting, and I will definitely miss it. It's going to be quite hard. I will miss the drama, the sense of being slightly on the inside, sort of explaining things to the public.' Successive chancellors – Johnson has marked the homework of eight – have waited with trepidation for the IFS's assessment of their plans. Jeremy Hunt, who held the post from October 2022 to July last year, said: 'Paul was often the swing vote as to whether a budget unravelled. You never really relax until after the IFS verdict.' Some leftwing economists accuse him of being too sympathetic to austerity. 'I find it extraordinary how little accountability has been applied to the IFS, and Johnson in particular,' says James Meadway, who advised the former shadow chancellor John McDonnell and hosts the Macrodose podcast. Whether his influence has been for good or ill, the era of economic policy Johnson has witnessed close up has certainly not been auspicious. He arrived in post in 2011, when the scars of the global financial crisis were still visible. Fresh shocks followed from the Brexit referendum, the Covid crisis and the surge in energy costs after Russia's invasion of Ukraine – coinciding with Kwazi Kwarteng's brief tenure in No 11. He says the two referendums on his watch – Brexit, and before that, Scottish independence in 2014 – were the hardest period for the IFS, because the institution took a clear view on the fiscal implications of the decisions, causing it to be accused of partisanship. 'We are narrowly economic. And so, in both cases, the economic and fiscal issues, I think were perfectly straightforward. But I think it's perfectly reasonable to have to balance them against other things,' he says. 'I think there is a perfectly good case for Brexit from a point of view of sovereignty and controlling your borders and so on, but we know that over the short and medium run, it's going to have a negative economic effect. Of course it is.' As far as today's government is concerned, he detects an unwillingness to confront the public with unavoidable tradeoffs. Asked whether he is optimistic about the future for fiscal policy, as he heads off for a quieter life, Johnson says: 'I have moments of optimism. I had a moment of optimism at the Labour party conference last year when Keir Starmer basically stood up and said: 'There are tradeoffs here and, you know, we want growth and if that means a road through your back garden, tough.' And I thought here's a prime minister who's actually talking about tradeoffs. It's been less obvious since then.' Returning to the winter fuel debacle, the eternally bemused Johnson says: 'They [ministers] feel pushed by us, the electorate. Now, is that their fault for not selling it properly? Did they announce it at the wrong time? Is it the electorate's fault for not being serious? Is it just a reflection of our fractured country? I don't know, but it's quite hard to be optimistic, because you do think, 'if you can't do that, what the hell can you do?''

Rachel Reeves 'a gnat's whisker' from having to raise taxes, says IFS
Rachel Reeves 'a gnat's whisker' from having to raise taxes, says IFS

Yahoo

time12-06-2025

  • Business
  • Yahoo

Rachel Reeves 'a gnat's whisker' from having to raise taxes, says IFS

Rachel Reeves is a "gnat's whisker" away from having to raise taxes in the autumn budget, a leading economist has warned - despite the chancellor insisting her plans are "fully funded". Paul Johnson, director of the Institute for Fiscal Studies (IFS), said "any move in the wrong direction" for the economy before the next fiscal event would "almost certainly spark more tax rises". 'Sting in the tail' in chancellor's plans - politics latest Speaking the morning after she delivered her spending review, which sets government budgets until 2029, Ms Reeves told hiking taxes wasn't inevitable. "Everything I set out yesterday was fully costed and fully funded," she told Sky News Breakfast. Her plans - which include £29bn for day-to-day NHS spending, £39bn for affordable and social housing, and boosts for defence and transport - are based on what she set out in October's budget. That budget, her first as chancellor, included controversial tax hikes on employers and increased borrowing to help public services. Chancellor won't rule out tax rises The Labour government has long vowed not to raise taxes on "working people" - specifically income tax, national insurance for employees, and VAT. Ms Reeves refused to completely rule out tax rises in her next budget, saying the world is "very uncertain". The Conservatives have claimed she will almost certainly have to put taxes up, with shadow chancellor Mel Stride accusing her of mismanaging the economy. Taxes on businesses had "destroyed growth" and increased spending had been "inflationary", he told Sky News. New official figures showed the economy contracted in April by 0.3% - more than expected. It coincided with Donald Trump imposing tariffs across the world. Ms Reeves admitted the figures were "disappointing" but pointed to more positive figures from previous months. Read more: 'Sting in the tail' She is hoping Labour's plans will provide more jobs and boost growth, with major infrastructure projects "spread" across the country - from the Sizewell C nuclear plant in Suffolk, to a rail line connecting Liverpool and Manchester. But the IFS said further contractions in the economy, and poor forecasts from the Office for Budget Responsibility, would likely require the chancellor to increase the national tax take once again. It said her spending review already accounted for a 5% rise in council tax to help local authorities, labelling it a "sting in the tail" after she told Sky's Beth Rigby that it wouldn't have to go up.

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