> While visiting the V&A Waterfront in the shadow of Table Mountain, Cape Town, Rachel Reeves chanced upon a boy playing a giant game of chess with his father. Unable to resist, the chancellor, a teenage chess whizz, began offering her advice to the child. He ended up three pieces down. Reeves, 46, who was in South Africa for a meeting of the G20 finance ministers, left the pair to it. “It was a lost cause,” she added. Reeves will be hoping the 4D game of chess she is playing with the country’s delicate finances, including funding the largest increase to defence spending since the end of the Cold War, will have a better outcome.
> Her task has arguably become tougher thanks to the row between presidents Zelensky and Trump in the Oval Office. A three-way shouting match in which JD Vance, the US vice-president, also weighed in, ended with Trump threatening to end military support for Ukraine. The extraordinary clash has left the prospects for peace hanging by a thread and raises serious questions about the future of European security. Reeves on Saturday announces the unlocking of billions of pounds for Britain’s defence industry, and will also release more than £2 billion from frozen Russian assets for Ukraine’s military.
> Reeves will change the remit of the £27.8 billion National Wealth Fund (NWF) so it can be spent on supporting the defence sector. This public-private investment fund was previously only used for infrastructure projects such as green energy schemes. The chancellor and the Ukrainian finance minister will also sign the £2.26 billion UK-Ukraine bilateral loan agreement. It marks the first time the money generated from the appreciation of frozen Russian assets will be used for military purposes.
> On Sunday, Sir Keir Starmer will host the Ukrainian president and 16 European leaders, who will attempt to forge a common position on peace talks that will not further inflame the White House. There will also be a discussion on how to meet Trump’s demand for Nato allies to do more to finance Europe’s collective defence amid warnings from the president that he intends to reduce American support. Last week, before his visit to the White House on Thursday, Starmer announced plans to raise defence spending to 2.5 per cent of GDP by 2027, with the aim of reaching 3 per cent by 2033. He said this would be funded by cutting foreign aid from 0.5 per cent of GDP to 0.3 per cent — prompting his development minister, Anneliese Dodds, to resign.
> It was an agreement thrashed out between Reeves and Starmer during one-to-one meetings and phone calls over the past three weeks. Speaking at the residence of the British high commissioner to South Africa on Thursday evening, Reeves urged European leaders to follow Britain’s lead. “The world has changed, and we have to keep up with that and we have to respond to that,” she said. “The importance of hard power, of securing our defence, is clearly more important today than it has been for a long time. Given the circumstances we face, we couldn’t carry on spending what we were on defence and being able to say we were comfortable with that.”
> According to Nato’s estimates for 2024, Poland was to be the top spender for the second year running, allocating 4.1 per cent of its GDP. Estonia was in second place on 3.4 per cent, just ahead of the US (also 3.4 per cent). The UK came ninth with 2.3 per cent. However, the average for Nato members in Europe and Canada is 2 per cent.
Reeves said: “We all know that has to be done. None of the ministers that I have spoken to are under any illusions about the importance of stepping up. We all recognise that the world has changed and our job as finance ministers is to make sure that money is available.”This is why she is announcing plans to broaden the mandate of the NWF to include defence. The £27.8 billion fund aims to generate £3 of private sector investment for every £1 it invests.
> The move forms part of a long-term strategy to provide greater financial stability for the UK defence industry, which has been hollowed out over the years due to funding fluctuations and the changing priorities of governments. The war in Ukraine, and the slow speed at which Britain and other western countries have been replenishing stockpiles to replace weapons given to Kiev, shows the need for the industry to grow to meet future demand. The chancellor said: “We’ve already said the NWF should support the industrial strategy priorities — areas like advanced manufacturing in energy, technology and AI — but we think the NWF could do more to support security and defence. Obviously, it is important that we leverage in private sector money as well as public spending, but if we’re going to be spending billions extra every year on defence, I want to see that create good jobs, paying decent wages in the UK.”
> Reeves will also announce plans to bolster Ukraine’s military. She and the country’s finance minister, Sergii Marchenko, are expected sign the £2.26 billion UK-Ukraine bilateral loan agreement in Downing Street. The money, which will be delivered in the next fortnight, has been taken from the profits generated on sanctioned and frozen Russian sovereign assets. It is the first time this money has been spent on military aid and comes on top of the UK’s £3 billion-a-year existing commitment. Reeves said: “A safe and secure Ukraine is a safe and secure United Kingdom. This funding will bolster Ukraine’s armed forces and will put Ukraine in the strongest possible position at a critical juncture in the war.” More than £200 billion of Russian central bank assets are frozen in the EU, while the UK is believed to be sitting on approximately £18 billion of individual assets, such as oligarchs’ homes, and central bank assets worth about £26 billion. “I’m really clear that it’s Russia that has to pay for the damage and the devastation it’s caused in Ukraine,” Reeves said.
> While she is at odds with Trump over both the cause of the war and the way to end it, she is optimistic about the prospect of a trade deal with the US. Trump’s previous threats to impose tariffs had the potential to derail the chancellor’s hopes of securing economic growth. However, talks are already under way on a “new economic deal” — something the president told Starmer at their meeting in the Oval Office could happen “very quickly”. Reeves said: “President Trump’s comments reflect the depth of the economic partnership between our two countries and the constructive dialogue he had with the prime minister. The British government will now build on that dialogue and continue to make the case for deeper trade between our economies that will make working people on both sides of the Atlantic better off. We don’t have a trade surplus with the US. I understand the concerns that they have about countries that run persistent, large current account surpluses with the US. We’re not one of those countries. We have balanced trade with the US. A million British people work for American firms. A million Americans work for British firms. So, our country’s economies are closely intertwined, and putting in barriers to trade doesn’t serve either of our interests.”
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Make this girl PM!
> While visiting the V&A Waterfront in the shadow of Table Mountain, Cape Town, Rachel Reeves chanced upon a boy playing a giant game of chess with his father. Unable to resist, the chancellor, a teenage chess whizz, began offering her advice to the child. He ended up three pieces down. Reeves, 46, who was in South Africa for a meeting of the G20 finance ministers, left the pair to it. “It was a lost cause,” she added. Reeves will be hoping the 4D game of chess she is playing with the country’s delicate finances, including funding the largest increase to defence spending since the end of the Cold War, will have a better outcome.
> Her task has arguably become tougher thanks to the row between presidents Zelensky and Trump in the Oval Office. A three-way shouting match in which JD Vance, the US vice-president, also weighed in, ended with Trump threatening to end military support for Ukraine. The extraordinary clash has left the prospects for peace hanging by a thread and raises serious questions about the future of European security. Reeves on Saturday announces the unlocking of billions of pounds for Britain’s defence industry, and will also release more than £2 billion from frozen Russian assets for Ukraine’s military.
> Reeves will change the remit of the £27.8 billion National Wealth Fund (NWF) so it can be spent on supporting the defence sector. This public-private investment fund was previously only used for infrastructure projects such as green energy schemes. The chancellor and the Ukrainian finance minister will also sign the £2.26 billion UK-Ukraine bilateral loan agreement. It marks the first time the money generated from the appreciation of frozen Russian assets will be used for military purposes.
> On Sunday, Sir Keir Starmer will host the Ukrainian president and 16 European leaders, who will attempt to forge a common position on peace talks that will not further inflame the White House. There will also be a discussion on how to meet Trump’s demand for Nato allies to do more to finance Europe’s collective defence amid warnings from the president that he intends to reduce American support. Last week, before his visit to the White House on Thursday, Starmer announced plans to raise defence spending to 2.5 per cent of GDP by 2027, with the aim of reaching 3 per cent by 2033. He said this would be funded by cutting foreign aid from 0.5 per cent of GDP to 0.3 per cent — prompting his development minister, Anneliese Dodds, to resign.
> It was an agreement thrashed out between Reeves and Starmer during one-to-one meetings and phone calls over the past three weeks. Speaking at the residence of the British high commissioner to South Africa on Thursday evening, Reeves urged European leaders to follow Britain’s lead. “The world has changed, and we have to keep up with that and we have to respond to that,” she said. “The importance of hard power, of securing our defence, is clearly more important today than it has been for a long time. Given the circumstances we face, we couldn’t carry on spending what we were on defence and being able to say we were comfortable with that.”
> According to Nato’s estimates for 2024, Poland was to be the top spender for the second year running, allocating 4.1 per cent of its GDP. Estonia was in second place on 3.4 per cent, just ahead of the US (also 3.4 per cent). The UK came ninth with 2.3 per cent. However, the average for Nato members in Europe and Canada is 2 per cent.
Reeves said: “We all know that has to be done. None of the ministers that I have spoken to are under any illusions about the importance of stepping up. We all recognise that the world has changed and our job as finance ministers is to make sure that money is available.”This is why she is announcing plans to broaden the mandate of the NWF to include defence. The £27.8 billion fund aims to generate £3 of private sector investment for every £1 it invests.
> The move forms part of a long-term strategy to provide greater financial stability for the UK defence industry, which has been hollowed out over the years due to funding fluctuations and the changing priorities of governments. The war in Ukraine, and the slow speed at which Britain and other western countries have been replenishing stockpiles to replace weapons given to Kiev, shows the need for the industry to grow to meet future demand. The chancellor said: “We’ve already said the NWF should support the industrial strategy priorities — areas like advanced manufacturing in energy, technology and AI — but we think the NWF could do more to support security and defence. Obviously, it is important that we leverage in private sector money as well as public spending, but if we’re going to be spending billions extra every year on defence, I want to see that create good jobs, paying decent wages in the UK.”
> Reeves will also announce plans to bolster Ukraine’s military. She and the country’s finance minister, Sergii Marchenko, are expected sign the £2.26 billion UK-Ukraine bilateral loan agreement in Downing Street. The money, which will be delivered in the next fortnight, has been taken from the profits generated on sanctioned and frozen Russian sovereign assets. It is the first time this money has been spent on military aid and comes on top of the UK’s £3 billion-a-year existing commitment. Reeves said: “A safe and secure Ukraine is a safe and secure United Kingdom. This funding will bolster Ukraine’s armed forces and will put Ukraine in the strongest possible position at a critical juncture in the war.” More than £200 billion of Russian central bank assets are frozen in the EU, while the UK is believed to be sitting on approximately £18 billion of individual assets, such as oligarchs’ homes, and central bank assets worth about £26 billion. “I’m really clear that it’s Russia that has to pay for the damage and the devastation it’s caused in Ukraine,” Reeves said.
> While she is at odds with Trump over both the cause of the war and the way to end it, she is optimistic about the prospect of a trade deal with the US. Trump’s previous threats to impose tariffs had the potential to derail the chancellor’s hopes of securing economic growth. However, talks are already under way on a “new economic deal” — something the president told Starmer at their meeting in the Oval Office could happen “very quickly”. Reeves said: “President Trump’s comments reflect the depth of the economic partnership between our two countries and the constructive dialogue he had with the prime minister. The British government will now build on that dialogue and continue to make the case for deeper trade between our economies that will make working people on both sides of the Atlantic better off. We don’t have a trade surplus with the US. I understand the concerns that they have about countries that run persistent, large current account surpluses with the US. We’re not one of those countries. We have balanced trade with the US. A million British people work for American firms. A million Americans work for British firms. So, our country’s economies are closely intertwined, and putting in barriers to trade doesn’t serve either of our interests.”
!ping UK
https://i.redd.it/mxhq9csor4me1.gif