Latest news with #Singapore-on-Thames'
New Statesman
5 days ago
- Business
- New Statesman
Eurostarmer
Nine years after the Brexit referendum, the dream of 'Singapore-on-Thames' has quietly evaporated. Instead, we've got a Labour government embracing high taxes, stronger workers' rights, even state ownership. What's behind Labour's European turn and is Starmer quietly reversing Thatcher's legacy? Subscribe to The New Statesman today from only £8.99 per month Subscribe Related
New Statesman
6 days ago
- Business
- New Statesman
Labour is making Britain a more European country
Illustration by Jonathan McHugh / Ikon Images It was Nigel Lawson who stated the ambition most clearly. Nine years ago, a fortnight after the UK voted to leave the EU, the late Conservative chancellor hailed an opportunity to 'finish the job that Margaret Thatcher started'. For free marketeers, Brexit was the method, the object was to change the country's soul. The description of their vision as 'Singapore-on-Thames' has always been erroneous – this imagined libertarian Disneyland has a highly dirigiste state. But the aim was not in doubt: a Britain in which taxes would be cut, spending reduced and regulations eliminated. Brexit is an increasingly friendless project – Labour MPs note with interest how rarely Reform dares mention it; the last reference on the party's X account was in March. Only 29 per cent of the country, according to a new More in Common poll, would still vote Leave, while 49 per cent favour a referendum on rejoining the EU within the next five years. Far from regarding Keir Starmer's Europe deal as a 'betrayal', most believe it is too modest. Leavers can take solace from the implacability of Labour's red lines: Starmer has suggested there will be no return to the single market, the customs union and free movement in his lifetime. But those on the right who always viewed Brexit as a means rather than an end lack such consolation. If there is anything resembling a clear pattern from Labour's first year in office it might be this: the embrace of a more European-style economy. After Brexit, France and Germany took seriously the threat of acquiring a free-market upstart on their doorstep. In practice, the UK is mirroring them. Start with taxes and spending. As Rachel Reeves likes to remind left-wing critics, she used her first Budget to impose the largest increase in the former since 1993: £41.5bn, or 1.2 per cent of GDP. By 2027-28, the UK, a country traditionally described as having 'US-style taxes', will have a tax take of 37.7 per cent, putting it within touching distance of the Netherlands and Germany (even before Reeves' planned sequel). Public spending will settle at a similarly European level of 43.9 per cent of GDP. A shift that the Conservatives could plead was temporary – owing to the emergencies of the pandemic and the energy crisis – is becoming permanent under Labour. Reeves, fittingly, replaced a portrait of Lawson in her office with one of Ellen Wilkinson, Clement Attlee's education minister and a founding member of the Communist Party of Great Britain. Subscribe to The New Statesman today from only £8.99 per month Subscribe Next turn to workers' rights. Tony Blair once described his government's role as 'to campaign to extend flexible labour markets to the rest of Europe'. Starmer, by contrast, through the Employment Rights Bill, is importing a more continental model: a ban on 'exploitative' zero-hours contracts, an end to 'fire and rehire' and the extension of full rights to workers from day one. Cabinet ministers proudly point out that, far from being 'watered down', the bill has been strengthened in areas such as non-disclosure agreements. Then there is ownership. The UK's aversion to nationalisation under Thatcher and New Labour was yet another dividing line between it and statist Europe. Now Ed Miliband boasts of having established the 'first publicly owned energy company in over 70 years' (GB Energy), and rail franchises – some of them previously held by France and the Netherlands – are being reclaimed by the British state. This European turn could yet extend to welfare. Papers by Labour Together call for the reassertion of the contributory principle – with a far clearer link between what people pay in and what they get out, as is typical on the continent. This, the think tank suggests, would serve as an antidote to populists exploiting a broken social contract – one adviser references the fury of the Inbetweeners actor James Buckley at having to pay for a garden waste collection even as council tax continually rises. A new digital contribution card – recalling the National Insurance stamps once received by employees – is proposed alongside a system of unemployment insurance (potentially set as a share of earnings). Back in 2021, in a 12,000-word essay for the Fabian Society, Starmer championed the 'contribution society', one based on 'being part of something bigger, playing your part, valuing others'. This notion, cabinet ministers such as Liz Kendall and Shabana Mahmood believe, should be central to Labour's philosophy. There are moments when Starmer's often inchoate approach acquires more definition. During his press conference with Emmanuel Macron last month, he spoke of proving 'that social democracy has the answers' in contrast to the 'performative populism' of Nigel Farage. Here was a riposte to those who accuse him of engaging in no act more complex than chasing Reform's tail. But what direction is Starmer heading in? The UK is charting a different course yet Labour has left voters wondering whether this is the product of accident or design. In his first speech as Prime Minister, Starmer vowed to lead a government 'unburdened by doctrine' – an approach that disillusioned MPs contend has left his administration rudderless. 'There's too many concepts floating around at too high a level, which is what happens when intellectual leadership is lacking,' says one. The task facing Labour this autumn is to provide it. Rather than finishing the job that Thatcher started, Starmer has chosen to begin reversing it. He will soon have to tell voters why. [See also: The Online Safety Act humiliates us all] Related
New European
14-04-2025
- Business
- New European
Sorry Brexiteers, the Trump bonus was a joke
It was the fleeting moment when president Trump put 10% tariffs on the UK and 20% tariffs on the EU. During that week, the Brexit mob argued triumphantly that our being out of the EU meant we faced a lower tariff than would have been the case and that this vindicated our decision to leave the bloc once and for all. There was a very short period of time this month, when the Brexiteers thought that, at last, they had found a Brexit benefit that they could crow about. My word they were happy. But shortly after this, Trump changed his mind and decided to put 10% tariffs on everybody. Joy turned to desolation, as yet another supposed Brexit benefit vanished before their eyes. The percentage differential was just an attempt by Trump to drive the UK and the EU further apart – but my, how the Brexiters enjoyed themselves. The usual suspects were all over the media, calling for Brexit to be 'implemented properly', for us to do a 'deal' with Trump and harden our hearts to the EU. Michael Gove is editor of the Spectator, and so its headline 'Trump's tariffs are a real Brexit win', was to be expected. I wonder what this week's headline will be? Jeremy Hunt (a remain supporter) told the Daily Mail that 'Britain should use Brexit freedoms to CUT tariffs and become 'Singapore-on-Thames' amid Donald Trump's trade war'. Seven days later, that line of reasoning looks little more than delusional. All of this was rather pathetic. I know that Farage thinks he is Trump's bestie, but even he must admit that a trade deal with Trump is not worth the paper it is printed on. Trump is after all the president who attacked Nafta, a deal he had previously called the best in history, and forced Mexico and Canada to renegotiate it. Then when he got re-elected, he then tore up that new deal, imposed huge tariffs on both countries and threatened to invade Canada. This eager expectation that we can do a deal with the least trustworthy politician in American history is disturbingly naive: do the Brexit loons think plucky little Britain can trust him, but not the EU? Meanwhile all those crowing Brexit fans seem to have forgotten that even 10% tariffs will halve British growth this year, but that Brexit has cost us – and is costing us – 10 times more than that in terms of the loss of economic activity. Just regaining some of the access to the EU's market that we lost because of Brexit would more than make up for Trump's tariffs. Then, of course, there is the ongoing international trade war, which is terrible news for everyone, irrespective of how big or small your tariffs are. No economy is an island. The consequences of a Sino/American trade war will be dire and will permanently damage US power. Tying yourself to America just when its own president has undermined its economic hegemony, and when your trade with America is just not that large, isn't a Brexit Benefit or any other kind of benefit; it is just terrible timing. All of this reminds me of the reaction to Liz Truss's disastrous budget. 'This was the best budget I have ever heard a chancellor deliver, by a massive margin,' crowed the Telegraph, only for the markets to crash and the PM to be outlasted by a lettuce. Trump didn't even last a week, as the bond markets threatened to implode. Just like Truss, his economic policies turned out to be the perfect embodiment of the nationalistic, post-Brexit era: an untenable disaster, applauded by people with no idea what they're talking about.
Telegraph
04-04-2025
- Business
- Telegraph
Starmer must embrace Brexit freedoms, say former chancellors
Sir Keir Starmer must embrace the benefits of Brexit and champion free trade in the face of Donald Trump's global tariffs, two former chancellors have said. Nadhim Zahawi and Kwasi Kwarteng urged the Prime Minister to make the UK a low-tax country and help it thrive at a time of global economic uncertainty. Three former Cabinet ministers, two former ministers and a Tory peer also called on Sir Keir to slash red tape and seek to strike more free-trade agreements. It came as Nigel Farage, the Reform UK leader, said the Prime Minister must take 'decisive' action and 'change course' in light of Mr Trump's tariff regime. Jeremy Hunt, the chancellor under Rishi Sunak, wrote for The Telegraph earlier this week that the Government should aim to turn Britain into 'Singapore-on-Thames' and reject trade barriers. The UK escaped the worst of Mr Trump's wrath this week as the US confirmed it will face tariffs of 10 per cent, half of the 20 per cent levy that will be applied to imports from the European Union. However, the Government nonetheless announced a four-week consultation on possible retaliatory tariffs in response. If they are imposed, any duties are likely to target iconic American exports such as Harley-Davidson motorcycles and Levi jeans. Ministers have insisted any retaliation would only be a last resort. 'Prime Minister must discover his inner Adam Smith' Mr Zahawi told The Telegraph: 'Jeremy Hunt is absolutely right – protectionism, however tempting, is not the answer to Trump's trade barriers. After all, tariffs are paid by domestic consumers, not foreign exporters. 'Instead of drawing up the drawbridge to global markets, we should emulate the success of free trading, pro-business jurisdictions like the UAE and Singapore's, where a steadfast commitment to free trade has built wonders out of desert and jungle. 'Having left the EU, the UK is now uniquely poised to carve out a profitable position in today's turbulent global economy. With lower import tariffs than the EU and no obligation to retaliate, we should seize the opportunity to establish ourselves as Europe's free-trade hub.' Mr Zahawi went on to insist trade must be 'only part of the picture', adding: 'The Prime Minister and Chancellor need to discover their inner Adam Smith to help Britain bounce back.' Mr Kwarteng, who served as business secretary and a Brexit minister before his stint in No 11, said Sir Keir should protect his Brexit dividend by not hitting the White House with retaliatory tariffs. He said: 'It wouldn't make sense for us to do a tit-for-tat protectionist measure. 'It would simply encourage the Americans to increase the tariffs on us, say from 10 per cent to 20 per cent, thereby destroying the Brexit benefit of being outside the EU in this case.' Sir Liam Fox, a former international trade secretary, said it was an 'inescapable fact' that had Britain not voted to leave the EU in 2016, it would be suffering the same higher tariff rates as the European Union. 'The glorious irony of an ultra-Remainer Government using Brexit as their main negotiating weapon needs to be followed by the logic of recognising that further liberalisations for Britain could place us in an even better global position,' he said. Steve Barclay, a former chief secretary to the Treasury, added: 'In a rapidly changing global trade situation, the UK must seize the post-Brexit freedom we have to boost our competitiveness and look to fast growing markets.' The UK has struck 39 trade agreements with 73 partners since finalising its departure from the European Union in 2020. At the end of last year, it formally acceded to CPTPP, the Asia-Pacific trade bloc, which removes tariffs and opens markets to some of the fastest-growing economies in the world. On Friday, four of the Brexit 'Spartan' Tory MPs – who voted on three occasions in 2019 against Theresa May's Brexit deal – joined calls for Sir Keir to adopt a Singapore-like approach. Steve Baker, a former Brexit minister, said: 'Unless we drive for growth Singapore style, this country faces bankruptcy as set out in the OBR's long-term projections.' Lord Mackinlay, who became a Tory peer last year, said: 'We have post-EU freedoms to create the most dynamic, innovative and business-friendly environment in the world. 'There's a lot to like about Singapore-on-Thames, Severn, Trent, Clyde. Will this misguided Labour government take the opportunity?' Mark Francois, the chairman of the European Research Group, said: 'If we do manage to get a trade deal with the US, I can't wait to see our Ambassador, one Lord Mandelson, celebrating that we were only able to do so because we left his beloved EU. He who laughs last laughs longest.' Sir John Redwood, a former head of the No 10 policy unit under Margaret Thatcher, noted scope for 'stunning Brexit wins' but added: 'I agree with Jeremy Hunt, but he didn't do it when he was Chancellor, did he?' Asked why Mr Hunt had not cut taxes while in office, Mel Stride, the shadow chancellor, told GB News: '[Covid] came at a huge cost in terms of spending support, jobs through furlough and so on. 'We had a similar external shock to the economy with the UK-Russia war, which jacked up inflation to over 10 per cent.' In an article for The Telegraph, Mr Farage said Mr Hunt 'first targeted non-doms and raised taxes to the highest level since the 1940s'. 'Britain does have opportunities – but only if Brexit is made to work,' he said. 'Perhaps we'll look back on Donald Trump's US Liberation Day speech as the moment when we finally woke up and changed course.'
Yahoo
03-04-2025
- Business
- Yahoo
Copy Singapore to thrive in Trump's trade war, Hunt tells Starmer
Sir Keir Starmer must embrace Brexit freedoms to turn Britain into 'Singapore-on-Thames' after Donald Trump launched a global trade war, Jeremy Hunt has said. In his first major intervention since leaving office, the former chancellor said erecting more trade barriers risked tipping Britain into recession and consigning the economy to permanently lower growth. Instead, Mr Hunt urged the Prime Minister to make Britain a low-tax nation that welcomed free trade and could thrive at a time of global instability. He revived calls common during the Brexit debate for the UK to copy the model of Singapore in order to find prosperity. It came as Sir Keir began laying the groundwork for retaliatory taxes on the US, prompting warnings he risked losing a 'Brexit dividend' of lower tariffs compared with other rich nations – including the European Union. While the Prime Minister pledged to keep a 'cool head', the Government published a list of thousands of US goods that the UK could hit with higher duties – including exports such as bourbon whisky, Levi's jeans and Harley Davidson motorcycles. The move sets the clock ticking on a four-week consultation on tit-for-tat measures that Mr Hunt warned would damage the economy and hurt living standards. Almost $2 trillion (£1.5 trillion) was wiped off US stock markets at the start of trading on Thursday amid growing fears that Mr Trump's tariffs would trigger a global trade war that tips the world into recession. Writing in the Telegraph, Mr Hunt urged Sir Keir to 'resist the siren song of protectionism', warning that retaliation was futile and would only end up being a drag on the UK economy. He said: 'Countries like Singapore demonstrate, openness can still deliver excellent results. Over the last half century, its living standards have grown five times faster than ours. 'Those who deride the idea of 'Singapore-on-Thames' fail to understand that the heart of their success has not been a harder-edged social policy but the building up of internationally competitive businesses through willingness to trade. 'But Singapore didn't invent free trade. That honour belongs to Britain. Even if others turn their backs on it, we should remember the benefits of one of our greatest gifts to the world.' The intervention came as Mr Trump's varying tariffs on countries around the world reopened the question of how best to make the most of Britain's decision to leave the European Union. Even opponents of Brexit have conceded that Mr Trump's decision to impose tariffs on Britain of 10pc is a benefit of leaving the EU, which was hit with a higher 20pc rate. Sir Keir now has the freedom to negotiate with the US to secure a bespoke deal and could yet strike similar trading agreements with other countries around the world as the global trading system is redrawn. The phrase 'Singapore-on-Thames' became shorthand for the country turning into a low-tax, low welfare economy, with a flexible jobs market and educated workforce. The general idea was first mooted by Philip Hammond, the then Tory chancellor, who argued that a no-deal Brexit might force the UK to fundamentally change its economic model in a way that would help Britain out-compete the over-regulated eurozone. However, the idea was sidelined by then prime minister Theresa May, who said in 2017 that her government was 'committed not only to protecting high standards, but strengthening them.' Jonathan Reynolds, the Business Secretary, said the 10pc tariffs on Britain showed 'the PM's pragmatic, cool-headed approach has been vindicated'. However, Mr Reynolds signalled that the UK was prepared to retaliate with tariffs of its own against the US unless the 10 per cent levies were softened. Writing in The Telegraph, he said: 'While it remains our belief that the best route to economic stability for working people is a deal with the US that builds on our shared strengths, we reserve the right to take any action we deem necessary if a deal is not secured.' Companies have been given until May 1 to comment on how Britain should respond to the new duties, with a list of thousands of US products targeted for possible reciprocal tariffs. Britain's consultation document runs to more than 400 pages and includes over 8,000 potential categories of goods. The Prime Minister said: 'We have a range of levers at our disposal, and we will continue our work with businesses across the country to understand their assessment of these options. 'As I say – our intention remains to secure a deal. But nothing is off the table.' Other nations that were hit with 10pc tariffs – including Singapore – suggested they would not retaliate. Gan Kim Yong, the city-state's deputy prime minister, said he was 'disappointed' with the imposition of the border tax but said Singapore would not add to the problem with its own tariffs. 'Retaliatory import duties will just add cost to our imports,' he said. Anthony Albanese, Australia's prime minister, warned that a tit-for-tat trade war risked kicking off 'a race to the bottom that leads to higher prices and slower growth'. Kemi Badenoch, the Conservative leader, urged Sir Keir to 'learn the lessons of history' and embrace free trade. She wrote on X: 'President Trump's tariffs will not make the US wealthier but they will make all of us poorer.' Nigel Farage, the Reform UK leader, told The Telegraph: 'If the UK is even seen to contemplate retaliatory tariffs then 10pc becomes 20. It would be utter madness. 'We would lose the Brexit dividend. Britain actually has the potential to go much further. If there is one country that can get out of the tariff regime and move towards a free trade deal it's us.' Business leaders also urged Sir Keir not to retaliate. Kevin Craven, chief executive of ADS, the trade group for the UK aerospace, defence and space sectors, said: 'We are better off than Europe today and our members are saying the impacts of what we know now are not catastrophic.' He added that Europe's retreat into protectionism 'might provide opportunities in the future' for the UK. Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders, said: 'If you could negotiate some sort of economic agreement that gives us a competitive advantage compared to other manufacturing locations, that could be a real benefit.' It came as other G7 nations and the EU vowed to hit back with force. Mark Carney, Canada's prime minister, announced that he would impose 25pc tariffs on some American-made cars, while Brussels also vowed to respond to Mr Trump's 20pc tariffs on the bloc. Emmanuel Macron, the French president, said an EU response would come in two stages – with the first coming in mid-April. A second 'more massive' response would come at the end of the month after discussions with member states, he said. Downing Street's focus continues to be the trade deal which Mr Trump expressed support for during Sir Keir's visit to Washington in late February. The shape of the agreement is emerging. Potential reductions in the UK's Digital Services Tax as it has an impact on US companies and lower tariffs on US meat imports, in return for the lifting of Mr Trump's tariffs and wider agreements on future technology cooperation. Ministers moved to downplay speculation that the UK could offer up a review of its Online Safety Act, which places obligations on US social media firms for content removal, and insisted there would be no extra US company access to the NHS. Downing Street has privately accepted that a deal will not be announced this week, meaning the 10pc tariff will have an impact on the UK this weekend. The focus is instead on securing an agreement within weeks rather than months. Stock markets around the world slumped on Thursday as investors reacted to Mr Trump's 'liberation day' announcement. Britain's benchmark index FTSE 100 fell by as much as 1.8pc, while the S&P 500 was down 4.4pc. The dollar also weakened against sterling and the euro, while stock markets in Germany and France saw heavier falls than the UK, falling by 3pc at the close. The announcements from Mr Trump, which included a 25pc tariff on all automobile imports, prompted fears of reduced growth or even recession in America and beyond. His car tariffs have already come into force, joining US tariffs on steel imports. Mr Trump's so-called 'reciprocal tariffs' will kick in on Saturday, while higher tariffs of up to 50pc for the 'worse offenders' will come into effect next week. Howard Lutnick, the US commerce secretary, said Mr Trump would persist with his trade policy despite the mounting economic and geopolitical fall out. By Jeremy Hunt As we survey the wreckage caused this week to the global trading system, it is 'make up your mind' time for Britain. We may have fared better than other countries, but the choices facing ministers are unenviable. Our exports to the US will be hit by a baseline tariff of 10pc, with a 25pc tariff on cars. The Business Secretary says the Government is considering retaliation. But given that US exports to the UK account for less than 0.3pc of US GDP – President Trump won't be sweating. The same can't be said of Rachel Reeves. Counter-measures by Britain could reduce GDP by a further 0.4pc, according to the OBR. Even if we end up exempted from the new tariffs, the economy will still be damaged by the knock-on effect in other countries. That could easily be the difference between recession and growth. The likeliest course of action is to muddle through the crisis trying to offend as few people as possible. With Ukraine's future in the balance, there are sound reasons not to cause unnecessary offence to the president. But the Prime Minister's diplomacy needs to be combined with a much clearer vision as to the type of post-Brexit economy we want to build. Trump's trade reforms will force on ministers a succession of rapid decisions that will shape the economy for years to come. In order to get them right, we need to know where we are heading. Are we going to gradually close up as our two biggest trading partners, the US and the EU, are likely to do? Or are we going to remain resolutely open? Britain has always flourished as one of the most open and outward facing economies in the world. Thanks to two great British economists, Adam Smith and David Ricardo, we became the first country in the world to remove all trade barriers on imports in 1846, leading the way for our country to become an economic powerhouse. During that period America was protected by tariffs, something President Trump praised in his 'liberation day' speech. He unveiled what he claimed were billions of dollars of investment in new factories caused by his 'beautiful' tariffs. Some will now wonder if we should do the same. In some ways, Trump has a point. There is often a tension between trade and investment. EEC barriers were the main reason Nissan – and then other Japanese car makers – opened factories in the UK in the 1980s. Globalisation may have made many poorer countries richer but it has failed to spread wealth evenly in advanced democracies. In the case of America there is an additional logic: dollar depreciation that should happen automatically with a trade deficit has not materialised because of manipulation and the dollar's reserve currency status. But Trump's solution is unlikely to work in the US, and would be even more catastrophic if copied in the UK. It isn't just about the impact on inflation and hit to living standards. What matters for an economy's productive potential is the ability to produce higher quality goods more competitively than others, which requires openness to the brightest and best innovation and technology from across the world. If the result of Trump's tariffs is that the US becomes more closed to such innovation, it will lose out. If the UK stays open to it, we can weather the storm. Which is exactly what we have been doing. Despite huge economic challenges, the UK has prospered with a stock of around $3 trillion of foreign investment, second only to the US globally. Directly or indirectly that investment accounts for nearly a third of all jobs. Even after Brexit, Britain continues to attract broadly the same proportion of big European FDI projects as before. Our most successful sectors – financial services, technology, life sciences, the creative industries and education – have all flourished because of openness to talent and ideas. Amongst the large economies, we have the fewest barriers to services. Far from holding us back, it has made us globally competitive, turning us into the world's second largest services exporter. We might look enviously at the new factories being built in the US. But ultimately the same logic applies to manufacturing. If we put up fewer barriers to goods imports, there will be some short term pain as we cope with a glut of exports being redirected from the US. But if we hold our nerve, lower input prices and more innovation will make British factories extremely competitive. More people will want to build their factories here as a result. It won't be easy to resist the siren song of protectionism. But, as countries like Singapore demonstrate, openness can still deliver excellent results. Over the last half century, its living standards have grown five times faster than ours. Those who deride the idea of 'Singapore-on-Thames' fail to understand that the heart of their success has not been a harder-edged social policy but the building up of internationally competitive businesses through willingness to trade. But Singapore didn't invent free trade. That honour belongs to Britain. Even if others turn their backs on it, we should remember the benefits of one of our greatest gifts to the world. Jeremy Hunt was Chancellor between 2022 and 2024 Broaden your horizons with award-winning British journalism. 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