Politics seems to have entered a new world of existence. Every morning, we are confronted by the latest news of what the US president has done now. Frankly, it is exhausting. But it is important.
Few will have missed the extraordinary scenes last week of Donald Trump lambasting Ukrainian president Volodymyr Zelensky in the Oval Office. Trump seems to be believing the Russian version of events over the war in Ukraine, and his insulting behaviour to Zelensky is not just an attack on him, it is an attack on the people of Ukraine and its supporters.
Credit where credit is due. Sir Keir Starmer played a difficult hand extremely well, and has emerged as a significant global leader in trying to navigate these bizarre political waters. His meeting in the White House last week went extremely well, and his subsequent intervention on Sunday with 14 leaders in London was a credit to his diplomatic skills.
The UK has committed more cash to support Ukraine. There has been a £1.6 billion deal to supply 5,000 air defence missiles, funded by UK Export Finance as a loan. There has also been another loan of £2.26 billion from interest received on sanctioned Russian sovereign assets, also loaned. But as I have discussed before in these pages, there will need to be more money spent by the UK on our own defence capabilities, potentially looking at around £20 billion more.
It is not clear where this will come from, and the Chancellor is under pressure to explain. We know we have a bloated civil service, and some funding could be found there. But with increasing geopolitical tension, increased defence spending is not really an option.
So, ultimately, we need to generate an improved economy to meet these spending increases and that is where the government has got it completely wrong. As the Bank of England recently highlighted, government policy has halved the expected growth of our economy this year. Bad news, and entirely avoidable. More government led problems are on the way. The Workers’ Rights Bill is making its slow progress through parliament and businesses, already reeling from NICs changes, face an estimated £5 billion of costs directly thanks to government policy. Add to that the global trade uncertainty after Trump increased US import tariffs on US imports from China, Canada and Mexico, and we face very uncertain times. Let’s hope Trump comes up with something good.