For Prime Minister Sunak, Domestic Economic Realities And Political Priorities To Keep His Job Will Constrain UK Support For Ukraine. President Zelensky Must Consider Impact Upon Stressed UK Taxpayers
Since 24 February 2022, the government of the United Kingdom (England, Scotland, Wales, Northern Ireland) through three successive prime ministers: Boris Johnson (2019-2022), Liz Truss (2022-2022), and Rishi Sunak (2022- ), has allocated more than US$10 billion from taxpayers for commercial, economic, financial, humanitarian, military, and political support to the government of Ukraine.
On 24 February 2022, the armed forces of the Russian Federation invaded and further invaded the territory of Ukraine in what Vladimir Putin, President of the Russian Federation (2000-2008 and 2012- ), defined as a Special Military Operation [SMO] then on 22 December 2022 he redefined as a war. The initial invasion of Ukraine by the armed forces of the Russian Federation was in part from the territory of Belarus.
The war between the Russian Federation and Ukraine did not commence on 24 February 2022. The roots began their trajectories on 20 February 2014 when the armed forces of the Russian Federation invaded the Crimean Peninsula and the area known as the Donbas Region (Donetsk Oblast and Luhansk Oblast).
The Sunak Administration will continue to struggle with and digest issues encircling the four corners of the United Kingdom since January 2020: inflation, interest rates, pension costs, energy costs, fuel costs, food costs, labor shortages, labor strikes, and continuing impact of the COVID-19 pandemic impact upon the sixty-six (66) million citizens of the United Kingdom.
Absent meaningful, consistent, and non-transitory real estate gains by the armed forces of Ukraine by October 2023, the Sunak Administration will find challenging to maintain or increase taxpayer funding for the benefit of the government of Ukraine.
And should the armed forces of the Russian Federation be successful in targeting, disabling, and destroying military equipment provided by taxpayers of the United Kingdom- along with an absence of real estate gains by the armed forces of Ukraine, then the Sunak Administration may need appreciate further the domestic political landscape by reducing taxpayer support to the government of Ukraine. Members of both governing parties and opposition parties will recoil from substantial taxpayer funding to a party considered to be in a “frozen conflict.”
A a general election in the United Kingdom is expected in 2024, likely after the June 2024 elections of the Strasbourg, France-based European Parliament (EP) which will include the appointment of a president of the Brussels, Belgium-based European Commission (EC) and president of the Brussels, Belgium-based European Council (EC), but prior to the November 2024 presidential election in the United States.
In March 2024, the government of the Russian Federation and the government of Ukraine are scheduled to conduct presidential elections. Although Volodymyr Zelensky, President of Ukraine (2019- ) declared martial law on 24 February 2022, there will be increasing pressure from taxpayers and voters within Ukraine and from political leadership in those countries who have since 24 February 2022 provided more than US$200 billion (US$113.1 billion from taxpayers of the United States) to support the government of Ukraine, for both the presidential election and parliamentary election of the 450-deputy Verkhovna Rada to take place as scheduled. President Zelensky will need to remove martial law provisions that constrict free and fair elections- meaning not restricting opposition parties from campaigning and accessing the media.
The Sunday Telegraph
London, United Kingdom
18 June 2023
Jeremy Hunt instructs Whitehall bosses to find spending and jobs cuts
Treasury figures reflect ‘grim’ economic situation and recent increase in cost of borrowing had ‘eliminated’ Government’s fiscal headroom
Jeremy Hunt seeks to build headroom to cut taxes
Jeremy Hunt has warned Government departments that they must find fresh spending and jobs cuts within months as he seeks to build the headroom to cut taxes. Whitehall sources said that individual ministries had received a letter from the Treasury last week warning them to find “reductions in inputs both in terms of FTE [full-time equivalent staff] and £” .
The letter is understood to have set out the details of a separate productivity review launched by the Chancellor last week. But it warned that the latest initiative was not an “alternative” to finding spending and jobs cuts. The Treasury has told departments that last year’s Autumn Statement - delivered before it was clear that high inflation would persist for months - made clear that departments should “identify savings to manage pressures from higher inflation”.
In recent days the Treasury has approached individual departments to demand increased levels of cuts from those that ministers and officials had offered until now, according to sources familiar with some of the discussions. Treasury figures have made clear that the “grim” economic situation and recent increase in the cost of borrowing had “eliminated” the Government’s previous fiscal headroom, making finding efficiency savings even more important.
Mortgage bills set to soar
In addition to persistent inflation pushing up the price of food and other goods, the average mortgage bill for hundreds of thousands of people is expected to increase by almost £3,000 next year, as fixed terms come to an end. Meanwhile, a survey by Stonehaven, a strategy consultancy, found that almost one in three (29 per cent) of mortgage holders identified as being in “extreme danger” of defaulting on their mortgages said that tax cuts would offer them the “greatest peace of mind”, as opposed to a reduced interest rate on their mortgage (44 per cent). The poll of 2,021 people found that, of those deemed to be “safe” from defaulting on their mortgage, 29 per cent said a tax cut would offer them the greatest peace of mind while 38 per cent opted for a reduced interest rate. Among those deemed to be “at risk” but not in extreme danger of defaulting, 24 per cent preferred a tax cut while 53 per cent opted for a reduced interest rate.
The spending cuts being sought by the Treasury are being linked to public sector pay rises being negotiated between individual departments and workforces such as rail staff. Cutting existing departmental spending would reduce the amount of additional funding from the Treasury needed to fund any rises. One of the areas being considered for further savings is Government spending on working-age benefits. A Whitehall source said that, in addition to the new productivity review seeking savings by making the public sector work “smarter” through innovations such as artificial intelligence, the Treasury was demanding “old-fashioned cuts and spending reductions” to free up money which could be used for tax cuts.
Earlier this month, The Telegraph revealed that Rishi Sunak wants to cut National Insurance or income tax by up to 2p before next year’s general election and head into the campaign “promising to do more”. “We’re going to have to find money from somewhere,” said one source. The Telegraph understands that at least one Whitehall department has suggested potential savings which the Treasury rejected as insufficient. The size of the civil service has swelled by some 90,000 since 2016, prompting Boris Johnson to draw up plans to slash the overall number down to their previous levels during his premiership. That work was shelved under Mr Sunak’s premiership.
Hunt urged to hastily reduce tax cuts
On Saturday Sir John Redwood, the former Tory Cabinet minister, urged Mr Hunt to use spending cuts to urgently reduce tax rates. He said: “Government needs to do what it can to promote growth and reduce tax rates to ease the squeeze now being created by a tough money policy. “It should not expand borrowing, but seek better control over spending as the counterpart to ease the tax demands on mortgage holders and others.” Lord McInnes of Kilwinning, insights adviser at Stonehaven and a senior Tory adviser, said that the mortgage holders “at risk” and in “extreme danger” must “be a priority for Government ministers and business leaders – they are on the front line of politics and consumer choices. As interest rates rise our research demonstrates that these households would support tax cuts to ease the pressure.”
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