- GDP figures: Chancellor’s claims at spending review have not “survived contact with reality”
- Spending review: Over £4.5 billion of “hidden” cuts to departments could be avoided with better UK-EU trade deal
- Reeves must rule out tax rises for families and small businesses, say Lib Dems
- AUKUS: Trump move to bring submarine deal under review throws “grenade” into security partnership
GDP figures: Chancellor’s claims at spending review have not “survived contact with reality”
Responding to GDP falling by 0.3% in April, the first month of figures since the employers’ national insurance rise came into effect and Trump’s tariffs came into effect, Liberal Democrat Treasury spokesperson Daisy Cooper MP said:
At the spending review yesterday the Chancellor suggested that the country was on the up but today this claim has not survived contact with reality.
Today’s figures should be a wake up call for the Government which has so far refused to listen to the small businesses struggling to cope with the jobs tax, worried that our high streets will be completely hollowed out and that our hospitality sector is hanging by a thread.
To tackle Trump’s tariffs, Ministers must stop cowering in the corner and get on with building an economic coalition of the willing with our European and Commonwealth neighbours.
It’s time for the Government to get serious, scrap their damaging jobs tax and go for growth with a bespoke UK-EU Customs Union that will raise billions to re-build our public services.
Spending review: Over £4.5 billion of “hidden” cuts to departments could be avoided with better UK-EU trade deal
Government departments are facing real-terms cuts of £4.6 billion by 2028-29, Liberal Democrat analysis of the Spending Review has revealed.
The Liberal Democrats said these “painful cuts” could be avoided by boosting growth, including through a better UK-EU trade deal that could boost public finances by around £25 billion a year.
Some departments will see significant cuts over the spending review period. The Foreign Office, Home Office and Department for Transport are all expected to be hit with real-terms cuts of over £1 billion. DEFRA will also see a £355 million real-terms cut over three years.
The Liberal Democrats said that the spending review will see public services already stretched to breaking point be expected to endure another round of painful cuts.
The party said that the Government would not have to make these choices if it got a better trade deal with the EU and moved to negotiating a bespoke UK-EU Customs Union. Previous analysis has found that a better deal even within the Government’s own red lines could boost GDP by 2.2% raising £25 billion a year in extra revenue for the Exchequer.
Liberal Democrat Treasury spokesperson, Daisy Cooper MP said:
Hidden in the small print of the spending review are painful cuts to public spending, with funding for social care and our police being stretched to breaking point.
We cannot afford to wait another decade for the government to fix social care while patients are treated in hospital corridors and elderly people wait for months on end for a care home place.
The Chancellor would not have to make these difficult choices if she got serious about going for growth, got a better trade deal with the EU and cut red tape for British businesses.
That is the best way to boost our economy, put more money into people’s pockets and rebuild our public services.
Reeves must rule out tax rises for families and small businesses, say Lib Dems
Responding to the Chancellor refusing to rule out tax rises on LBC this morning, Sarah Olney MP, Liberal Democrat Business Spokesperson, said:
The Chancellor talked about choices at her spending review yesterday. I say she must choose to put growth first and rule out any more tax rises for families and small businesses.
Britain must go for growth through a bespoke new trade deal with the EU – allowing us to rebuild our economy and renew our public services.
If anyone should be asked to pay more tax, it should be the big banks, social media giants and online gambling firms who have been raking in record profits while ordinary families struggle to make ends meet.
AUKUS: Trump move to bring submarine deal under review throws “grenade” into security partnership
Responding to the US bringing the AUKUS deal under review, Helen Maguire MP, Liberal Democrat Defence Spokesperson, said:
Trump’s decision to review the AUKUS submarine pact has thrown another grenade into our security partnership.
Even in the face of an imperial Putin and the rising threat posed by China, this White House simply can’t be relied upon to support our collective defence.
Our national security demands that we ramp up talks with our Commonwealth friends and work to plug the gap that the US is threatening to leave in European and global security.
Starmer must meet urgently with Prime Minister Albanese to develop contingency plans for AUKUS if Trump withdraws from the treaty.
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22 Comments
As growth is clearly not happening since about 2005, perhaps it would be better to campaign for improvements within a static or declining economy.
“Starmer must meet urgently with Prime Minister Albanese to develop contingency plans for AUKUS if Trump withdraws from the treaty.”
If Trump sees the main threat coming from China, he won’t want to cut ties with Australia.
He’ll probably be happy to string the UK along and keep us in the Treaty but whether it will be of much use to us is somewhat doubtful.
“Britain must go for growth through a bespoke new trade deal with the EU – allowing us to rebuild our economy and renew our public services.”
The growth rate in the EU was about 1% last year. The growth rate in the UK was also about 1%.
So, even if we were fully a part of the EU, which is of course what Lib Dems would like, there’s no evidence that our growth rate would would improve.
Lib Dems need to look for an additional argument besides supposed economic benefits to bolster the case for re-joining. It wasn’t enough to keep us in and it won’t be enough to get us back in.
@Peter Martin – The AUKUS submarine programme is a delicate construct with many dependencies. Both the UK and Australia urgently need it, and the US doesn’t.
Why might the US withdraw? Because the plan involved transferring 3 US Virginia Class submarines to Australia early in the 2030s, but US submarine building is slow and behind schedule. The US might simply decide they can’t spare them.
But this is essential to Australia, both to gain operating experience on nuclear submarines, but also because their aging Collins Class conventional subs are reaching the end of their life. They have no ‘Plan B’, so no AUKUS equals no subs at all for Australia.
For the UK, we have an urgent need to have a replacement for our Astute Class subs by the middle of the 2030s, regardless of whether or not AUKUS goes ahead, because their reactors have a fixed 25 year life and can’t be refuelled. Working with Australia meant sharing the development cost of a replacement, and benefiting from lower unit costs due to the higher production volume. Going it alone would hit the UK defence budget with greatly increased costs that we would have no option but to pay, or have our ability to maintain our continuous-at-sea deterrent put at risk.
continued:
It is not an option for the UK and Australia to continue without the US, because we have already started designing the new subs with US reactor and weapons tech, and ripping all that up and starting again would create massive delays and cost increases that we can’t afford.
And we can’t simply build more Astute Class boats because the Tomahawk missiles they carry are launched from the torpedo tubes, but the US has stopped making tube-launched missiles and moved to a vertical launch system, so we need to follow suit.
It’s a house of cards, waiting for Trump to blow on it….
“The US might simply decide they can’t spare them.”
The US is going to be selling Submarines to Australia not just handing them over. Trump does seem to appreciate the importance of exports. The deal will provide thousands jobs to Americans and millions in profits to US companies. Trump will be more concerned with the latter.
It’s always going to be difficult to anticipate just what Trump will do but if the US is serious about countering China and keeping the Pacific in their sphere of influence, a good relationship with a a militarily strong Australia is still going to be crucial.
The expectation has to be that this is just more huffing and puffing on the part of Trump to keep everyone guessing.
“The growth rate in the EU was about 1% last year. The growth rate in the UK was also about 1%.”
When we were in the EU our growth rate was generally better than the EU average.
If erecting trade barriers with our most important market has no effect on economic growth then why are Brexiteers so keen on the freedom to pursue trade deals to lower trade barriers?
Of course the idea we can leave a free trading bloc without loss of trade is just one example of the Brexiteer’s commitment to the doctrine of cakeism. For the true believer Brexit is a cost-free exercise which only has upsides. We can have seperate customs regimes without a customs border. We will be able to live and work across Europe but Europeans won’t be able to come here. We are strong and can dictate terms to the EU but we are also weak and bullied by the EU. Brexit is revolutionary project of national liberation but nothing much will change.
And sadly the 30% or so of the population that still believe this nonsense will block any attempts to repair the profound damage they have done to the country and the prospects of our young people.
@Andrew: That is a complete mischaracterisation of what most Brexiters believed. Pretty much no-one seriously argued that UK citizens could have one-way freedom of movement without the reverse. Nor did anyone believe we could leave the free trading bloc without some loss of trade: Both propositions are self-evidently absurd. Rather, there was a general belief amongst Brexiters that, whatever economic benefits might arise from EU membership, the cost in terms of loss of sovereignty, loss of freedom to control our borders, loss of freedom to trade on our own terms with non-EU countries, loss of ability to determine our own rules and regulations, etc. was too high.
If you want to turn this into a Brexit debate, could you please do so without making up outright falsehoods about what Brexiters believed?
Every politician supports economic growth.
For LDs, growth will come when we rejoin the common market. For Tories, it’s lower taxes, Greens renewable energy, Labour building infrastructure like runways, and Reform goes for tax cuts and unfunded billions in spending.
Growth will come when my favourite policy is enacted?
“Astute reactors have a fixed 25 year life and can’t be refuelled.”
I wouldn’t start from here, but if true, and AUKUS at risk, it must be worth working out how the reactors could be replaced.
As to the Tomahawk issue, not all the vertical launch tubes on the Vanguard/ Dreadnought subs are fully utilised, so they could go there, while the Astutes focus on the subsea hunterkiller role with torpedoes.
@Simon R
Interesting that you seem certain as to what Brexiteers believe. My experience of the referendum is that Brexiteers had many varied reasons and beliefs. I remember one man telling me that he was voting for Brexit because “we want our post offices back”.
My personal view is that the two major factors that won the Brexit vote was the falsehood about £350 million for the NHS and the falsehood about up to 80 million Turkish economic migrants coming to Britain.
“Would we have won without immigration? No. Would we have won without £350m/NHS? All our research and the close result strongly suggests No. Would we have won by spending our time talking about trade and the Single Market? No way.” – Dominic Cummings – February 2017.
@Andrew, Simon and Kevin,
I would say that many voters, on both sides, had various motives when voting in the 2016 referendum.
The most amusing story I heard was of one household where the husband was intending to vote Remain because he was worried a Leave vote would lead to English football teams having fewer places allocated in European competitions. His wife was particularly upset the the UK entries in the Eurovision Song contest had done particularly poorly in recent years and so she was going to vote Leave as a protest.
@Jenny Barnes – the unplanned refuelling of HMS Vanguard ending up taking 7 years and costing £500m. Replacing the reactor in an Astute Class would be similar, so would result in half the fleet being taken out of service.
The Vanguard and Dreadnought Class can’t be in Tomahawk range of any target we might want to strike, whilst also hiding in deep Atlantic trenches ready to perform the deterrent mission. We don’t have enough to do both.
So we are now against taxing families. How are we thinking of structuring a widows and orphans tax?
> “we have already started designing the new subs with US reactor”
Wikipedia [1], says “Rolls Royce is building the reactor for SSN-AUKUS, which may be the PWR3, or a derivative.” If that is true it would be sovereign UK technology. The USN would want minimal coupling between SSN-A and their pipeline. Is it now that the plan for SSN-A is to use a US reactor?
The RN would want to replace the A-boats in the 2030s, and additional Oz units of SSN-A to the same design would be lower allocated design costs per boat. There is some US technology in the information we are publicly allowed to know, but that has been true since Dreadnought / Valiant. If Trump throws a fit, we may have to talk to the French.
Vive l’Entente frugale!
[1] https://en.wikipedia.org/wiki/Rolls-Royce_PWR
[2] (PWR3) https://en.wikipedia.org/wiki/Rolls-Royce_PWR#PWR3
@Kevin: Well yes, obviously individual voters – both Remainers and Brexiters – would have had a huge variety of individual reasons for voting the way they did in the Referendum, some sensible, some silly. But I was responding to a post that made equally sweeping (and rather absurd) claims about what (implied: most) Brexiters believed and pointing out that the reasons stated in that post did not at all match the kinds of things the Brexit campaign was saying in 2016.
Certainly there was dishonesty in the Brexit campaign about Turkish membership and the £350Bn. But it seems odd to me that you blame those two lies for Remain’s defeat without acknowledging the non-lies that in 2016 3.6 M EU citizens had already moved to the UK, and we were making huge net payments to the EU (although not as big as £350Bn) – both factors that already driven support for Brexit so high as to put the referendum on a knife edge.
@Peter Chambers – PWR3 is based on a US reactor design, but is manufactured by Rolls Royce in Derby. So we have sovereign *production* of Dreadnought and SSN-AUKUS reactors, but not sovereign *technology* which means we can’t export it to other countries like Australia without US permission.
Simon R
“Pretty much no-one seriously argued that UK citizens could have one-way freedom of movement without the reverse.”
That’s not what I said.
The idea that Brexiteers can’t possibly have believed, or purported to believe, in self-evidently absurd propositions is rather funny. Have you really forgotten David “exact same benefits” Davis and Michael “only upsides” Gove? Brexit breeds all manner of cognitive ills in the true believer.
The Brexit campaign did not, as you allege, argue for trading economic benefits for gains in sovereignty (wholly illusory in any case). They promised that leaving the EU would lead to a resurgent economy, higher wages and lower cost of living. This Leave EU campaign video has aged spectacularly badly
Rather than defending a project that was fundamentally flawed from its inception, wouldn’t it be more productive to examine why Brexit has proven so damaging and explore potential solutions to mitigate the harm?
@Nick – So an aspect of this Trump wanting Rolls Royce to manufacture in the US…
I suspect also it a typical Trump way of trying to use this agreement as leverage in other trade negotiations. Remember as far as Trump is concerned a deal is only actually done when it has been delivered and paid for; until then everything can be renegotiated.
Basically, Australia’s original decision to buy from France, was probably the better decision…
The basic problem with joining the EU for a second time is that the UK will no longer have the opt outs negotiated during the time we were in before.
I personally have no problem with Free Movement, the Euro, Schengen and etc. Selling a new application to join the EU when some of the features of membership clash with the expressed desire of many to ‘Keep the Pound’, keep out economic migrants and so on, will be much more difficult to sell than when we successfully won a referendum to join in 1975.
We also need a plan to convert at least some brexiteers to ensure that there is a secure majority for joining. Insulting and belittling them will not do the trick.
“wouldn’t it be more productive to examine why Brexit has proven so damaging …..”
It’s not really made that much difference. IMO. Remainers made claims about increased interest rates but they were brought about by the extra spending caused by the Covid emergency everywhere. Not just in the UK.
It’s just about impossible to separate the effects of Brexit from those caused by Covid. The picture might become clearer as time goes on.
It might “be more productive to examine why” the Remain side lost. I would say the big mistake was to focus on the economics of the issue. It wasn’t enough. I often point out that Canadians would never vote to join the USA even though there is an extremely good economic case for them to do just that.
I’m sure ex-Remainers understand this. So why don’t they see there’s more to the Brexit argument than the pounds and pennies, or the euros and eurocents, which are involved?
@Mick Taylor
We are not re-joining the EU because there is a blocking minority capable of electing a Tory/Reform government. And that isn’t going to change in our lifetime however nice we are.
@Peter Martin
Don’t accept the analogy. The USA is a federal state; the EU is a union of sovereign nations that have built shared institutions to manage common interests. It’s not that Remainers don’t grasp your argument — it’s that they believe your picture of the world is false.
If Brexit was supposed to free us, why, six years on, have we barely diverged from EU regulations? Why have initiatives like UK REACH and the UKCA turned into such costly fiascos? The reality is, we live just twenty miles from a regulatory superpower and the largest, richest market in the world. In most cases, the costs of divergence far outweigh any theoretical gains.
As a result, we continue to follow EU rules — but without aligning with the single market’s compliance mechanisms, we don’t gain the advantages of full participation. It’s an absurd and humiliating outcome: we’re now more constrained by EU decisions than we were as one of it’s leading nations. And the political class knows it. But for a mix of ideological, electoral, and reputational reasons, they choose to ignore an uncomfortable truth.