Month: July 2025

Trump’s balance sheet: the good, the bad and the very ugly…

~ Julian Samways ~ 1 Comment

So, lucky us. We get Donald Trump twice this year. First, playing golf in Turnberry with Ursula von der Leyen and Keir Starmer rushing up to Scotland to pay homage and then the State visit in September. Umm…

Trump has dominated the headlines since day one of his presidency, hitting the ground running with a highly competent far-right team behind him, introducing some ground-breaking and irreversible domestic and international policies. You might not like him, but as with Farage, he is a transformative politician.

Trump swings into Scotland…

So, how does the balance sheet of Trump’s actions look as we head off for the summer holidays? Well, first the good, as it is the shortest part.

Trump was right to goad and threaten Europe into paying more for its own defence. Previous US presidents have urged this but have then done nothing to force Europe’s hand. There has always been a strong isolationist streak in America, and Trump has played this beautifully to get a 3.5 per cent of GDP defence spending commitment from European countries (ex-Spain). Second, immigration. Illegal immigration across the Mexican border has now fallen by 90 per cent on a month on month basis. Whatever you think of the merits of migration or the way Trump has treated this issue, the scale of illegal border crossings was storing up huge tensions in the US, even amongst many Democrat voters as southern states sent immigrants north to be housed. Obama was actually the toughest US president to curb numbers before Trump. Biden was hopeless. In thrall to his left-wing, he totally failed (as did Harris) to understand the strength of feeling on this issue across a majority of voters. Take note, Starmer.

OK, that’s enough ‘praise’. Now the bad. Tariffs do not work. They will potentially cause huge market inefficiencies and drive up prices. The consequences have yet to be felt. The rates are illogical across countries, although the overall impact might not be as great as earlier predictions indicated. Second, the recent tax bill. It strips Medicaid from 16m Americans whilst shovelling cash to the rich. Shame on the Republican Party who pushed it through, ballooning the deficit in the process. What happened to fiscal conservatism? One senses the next global economic crisis might be driven by a fear of America defaulting on its debt, evidence demonstrated by the current weakness of the US Dollar.

Then the very ugly. There could be an entire book on this. Regardless of policy, it is the morality of leaders and their probity, which provides the bedrock to democracy. Trump simply lies, lies, lies. Perhaps an unsurprising trait in a convicted felon. Americans either don’t notice or don’t care about the State capture blatantly on view, whether it is Trump’s crypto-currency deals, the acceptance of a jet from Qatar or the fact that he, his family and ‘friends’ constantly trade on the broader influence of the presidency to enrich themselves. Next is the undermining of state institutions, the bullying of universities and arts generally in a drive to eradicate ‘political correctness’, the attempt to compromise an independent judicial process. The list goes on, but the ugly is also a fair description of fawning Western leaders who have swallowed their pride to accommodate Trump.

Finally, the lowest of the lows was how President Zelenskyy was treated in the White House in February. This was an iconic moment. Surrounded by individuals who had never fought, been under any military threat, and, in some cases, had dodged the Vietnam draft, it was a shameful episode. JD Vance’s behaviour was on this occasion, even worse than Trump’s. How dare they speak to a fellow president like that, representing a country under existential threat. This spectacle alone should be enough to justify a damning analysis of Trump’s presidency. The one silver lining is that Trump hasn’t had the opportunity to hand Ukraine to Putin and now understands the Russian leader isn’t quite the pal he thought he was.

The future? Who knows, as the Democrats sink to record levels of unpopularity and irrelevance. Will the presidency and federal institutions recover from four years of Trump? Will anyone realise the damage done by ineffectual checks and balances on centralised power? One doubts it. In a few years, which can’t come too soon, Trump’s emperor-like reign will end. But the hangover will be enormous.

Labour’s dishonesty on tax will fuel populism

~ Julian Samways ~ Leave a comment

Why don’t mainstream politicians ever learn? If you over-promise and under-deliver, it will fuel cynicism, driving voters into the arms of populists.

It is in the area of tax that Starmer’s government has got itself in the greatest mess. Frightened into saying Labour will not raise core taxes during the general election campaign, it is now stuck. Ministers cannot or feel they cannot break election pledges of not increasing income tax, VAT, or employees’ national insurance. As the economy fails to boom, partly undermined by taxes on business (confused message here – growth versus employers’ national insurance increase which inhibits growth), the government now has a potential new black hole of £20 billion in its finances.

Time for Starmer and Reeves to level with the public…

Yet Labour backbenchers will not stomach a cut of even £5 billion to the bottom line of bloated welfare expenditure. The NHS gobbles up vast amounts of new funding, defence expenditure will rise to 3.5% of GDP and £100 billion is promised on long-term capital expenditure.

What is to give? More tax on business will send the economy into recession and wealth taxes, after the disastrous policy of tightening up non-dom eligibility to pay UK inheritance taxes on worldwide assets (who thought of that one?), will simply lead to a further flight of capital which is wholly at odds with a ‘growth’ economy.

Meanwhile, Labour’s closest rival, Reform, is happy to splash out an extra £100 billion on law and order, scrapping the two-child limit on benefit payments, reinstating the winter fuel allowance in full, introducing a more generous transferable marriage tax allowance and increasing the income tax personal allowance to £20,000 a year. All this will be offset by scrapping HS2 and scrapping net zero policies. Umm… not an ounce of detail provided.

The reason Reform is getting away with it is Labour is in power, not them and Farage has yet to be subject to any close scrutiny. Populism is simply too popular to be disbelieved in the face of conventional politicians evading the truth.

What is to be done? Labour needs to have an honest dialogue with the electorate about the incompatible priorities of not increasing taxes yet promising improved public services, let alone a larger defence budget to keep us safe. It should outline genuine tax and spend tax dilemmas and take the pain of unpopular policies today to really succeed in delivering what the electorate wants tomorrow. You cannot have your cake and eat it. The electorate need to know this.

So, cut red tape on business and planning, cull the bloated civil service, reform welfare, reverse one of the Tories’ employees’ national insurance cuts and reduce upper rate tax relief on pension contributions. And while doing this plan for an ever closer relationship with the EU, making it clear Brexit is one of the reasons for the UK being in such a mess.

Much of this will be dreadfully unpopular but Labour then has four years to unpick Reform’s impossible plans which will come under greater scrutiny the closer it gets to power and prove steady competence from moderates in the medium-term works.

The electorate will hopefully understand there are no easy solutions to the dissatisfaction and cynicism they feel today if the government levels with them. And telling the truth without platitudes may even have the added advantage of pricking populism’s bubble before it is too late.

Who would believe it…?

Starmer: a wobble to be worried about…

~ Julian Samways ~ Leave a comment

For the first time (yes, it has taken this long…), I am concerned about the direction or, rather, lack of direction of this government. I have always thought Starmer’s ideological pragmatism was to be admired, but the danger is that if bad mistakes blow you off course, there is no path to return to.

A terrible week for Starmer’s government…

This happened big time this week. Amendments to the benefits system which the government tried to drive through parliament to show fiscal rectitude were horribly rushed. Why introduce them now when a comprehensive review of the whole system was in train, reporting in 2026? Rightly, a lack of logic and no attempt to win backbenchers over, meant defeat loomed despite a 165 seat majority. Starmer et al realised this far too late and the amendments to win his colleagues over first diluted savings and then eradicated them. No cost savings now, and the government’s authority and credibility shredded in the process. Nobody doubts the current benefits system is unsustainable, even most Labour backbenchers, but this was not the way to go about fixing it with short-term changes simply to save an immediate £5 billion.

However, for a moment, spare a thought for Rachel Reeves, the Chancellor. She looked terrible in parliament yesterday, barely containing her tears. The cause was explained as a personal matter, but nobody should go through this in public. In PMQs, the charmless Kemi Badenoch alighted on her and Starmer ignored her. It damaged both of them. Starmer made up for it in later interviews, yet it took Mel Stride, Tory Shadow Chancellor, from the Opposition to exhibit genuine sympathy for Reeves’ plight on Sky News this morning. Good on him. Sometimes the toll of public life is too great.

Anyway, back to the issue in hand. Starmer needs to get back to domestic politics full-time. It is understandable that Ukraine, the EU, Putin, Trump, NATO are all hugely time consuming, but you cannot contribute constructively to international crises if you are defenestrated at home.

Starmer needs to lay out a comprehensive map of where his government is heading and, consequently, what the UK should look like in 2029. There needs to be carefully calibrated milestones that the public can identify with to measure achievements. Visible progress is everything if Labour is to head off the populists.

Starmer also better move fast to build relations with his fellow MPs and get off the hook of obsessive fiscal discipline for now which is creating more harm than good through excessive short-termism. He needs to improve his economic understanding to avoid ‘what the markets are thinking’ panic every few weeks whilst at the same time defending Reeves to the hilt. They are joined at the hip whether he likes it or not. If she goes, he is next.

An NHS overhaul, new house builds, planning reform, reviews of the benefits system and social care (the latter taking too long, however), and infrastructure investment are all strong building blocks for recovery in the government’s fortunes. But, Starmer has to get his communications act together and give the vision thing or he could be toast.

And the alternatives are too awful to contemplate…