UK economy shrinks unexpectedly in blow to Rachel Reeves

ONS data showing 0.1% fall in GDP in January comes less than two weeks before chancellor’s spring statement

The UK economy contracted by 0.1% in January, dealing a blow to Rachel Reeves before the spring statement later this month.

In a surprise to City economists, who expected 0.1% growth in January, the Office for National Statistics data showed the services sector failed to offset a decline in the industrial sector and maintain growth from the previous month.

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Jonathan Powell: the veteran negotiator being lauded over US-Ukraine detente

Insiders say UK national security adviser avoids limelight, but it found the ‘calm operator’ this week

In the topsy-turvy world in which Keir Starmer and his aides operate, the US putting the onus on Russia to agree to a truce with Ukraine marked a significant victory.

The proposed 30-day ceasefire between Russia and Ukraine is the culmination of two weeks of high-wire negotiations involving Ukraine, the US, UK, France and Germany.

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Ed Davey calls on Keir Starmer to back Canada against Trump attacks

Lib Dem leader says PM should make public show of support for ally against ‘shocking attacks’ on its sovereignty

The leader of the UK’s Liberal Democrats has called on the prime minister to publicly support Canada and oppose the “shocking attacks” on Canadian sovereignty, as the Trump administration further escalates its global trade war against longstanding allies.

Ed Davey, who leads the third largest political party in the UK, has called on Keir Starmer to travel to Canada in a show of support to the nation’s new prime minister, Mark Carney, as the commonwealth nation faces a generational crisis under Trump’s tariff war and suggestions that the country might become the 51st US state.

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Wes Streeting’s ‘high stakes’ abolition of NHS England will cut 10,000 jobs

Reforms proposed by health secretary predicted to save as much as £500m but could be distraction for ministers

Wes Streeting has ordered a “high stakes” reorganisation of the NHS that will scrap 10,000 jobs in an attempt to free up cash for frontline care.

Experts warned that the move to abolish NHS England and fold it into the Department of Health could distract ministers from the urgent job of ending long waits for treatment, while trade unions expressed concern about the “shambolic” announcement of job cuts for public servants.

Join Wes Streeting in conversation with Pippa Crerar discussing England’s health and social care system and how Labour plans to turn it around on Tuesday 25 March 2025, 7pm-8.15pm (GMT). Book tickets here or at guardianlive.com

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Former shadow chancellor Ed Balls says plans to cut disability benefits ‘won’t work’

Influential Labour figure says cuts ‘not a Labour thing to do’, while George Osborne says when chancellor he resisted move as ‘step too far’

The former shadow chancellor Ed Balls has criticised plans for cuts to disability benefits, saying on his podcast that it was “not going to work”.

George Osborne, the architect of welfare cuts during the coalition years, also told the same podcast that he had resisted freezing personal independence payments (Pip) – a move currently under consideration – because he felt it was going too far.

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UK politics: Unison attacks ‘shambolic’ announcement of NHS England’s abolition – as it happened

Union says staff will have been left reeling after surprise news that body will be scrapped

Starmer is now talking about regulatation, and giving examples of where he thinks it has gone too far.

l give you an example. There’s a office conversion in Bingley, which, as you know, is in Yorkshire. That is an office conversion that will create 139 homes.

But now the future of that is uncertain because the regulator was not properly consulted on the power of cricket balls. That’s 139 homes. Now just think of the people, the families, the individuals who want those homes to buy, those homes to make their life and now they’re held up. Why? You’ll decide whether this is a good reason because I’m going to quote this is the reason ‘because the ball strike assessment doesn’t appear to be undertaken by a specialist, qualified consultant’. So that’s what’s holding up these 139 homes.

When we had those terrible riots … what we saw then, in response, was dynamic. It was strong, it was urgent. It was what I call active government, on the pitch, doing what was needed, acting.

But for many of us, I think the feeling is we don’t really have that everywhere all of the time at the moment.

The state employs more people than we’ve employed for decades, and yet look around the country; do you see good value everywhere? Because I don’t.

I actually think it’s weaker than it’s ever been, overstretched, unfocused, trying to do too much, doing it badly, unable to deliver the security that people need.

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Taxi firms crowdfund legal battle with Uber over VAT on fares in UK

Minicab drivers say Uber’s bid to apply tax to all rides would put many out of business and leave people stranded

Two British taxi companies have launched a crowdfunding drive for the last leg of a lengthy legal battle with Uber that could result in higher cab fares.

Uber will seek, at a supreme court hearing in July, a ruling on contractual models that affect whether VAT applies to private-hire companies outside London, which it has argued would level the playing field across the UK.

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Decision not to classify Southport killer as a terrorist was right, says UK watchdog

Review concluded extending definition to cover extreme violence by ‘loners’ such as Axel Rudakubana is unhelpful

The decision not to classify Axel Rudakubana as a terrorist following the Southport murders was right because it would be unhelpful to stretch the definition of terrorism to cover all extreme violence, the UK’s terror watchdog has concluded.

Jonathan Hall KC wrote that the “legal definition of terrorism is already wide and should not be changed any further” in his post-Southport review of how extreme violence is legally classified. Expanding the definition would “increase the possibility of inaccurate use and, in theory, abuse”, he said.

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UK drops down list of affluent nations after decade of stagnation, NIESR finds

Districts in Birmingham now ranked below poorest areas of France, Malta and Slovenia as institute urges rethink on planned welfare cuts

The UK has tumbled down the league of affluent nations after almost a decade of welfare cuts and stagnant incomes, according to a report that found the poorest districts in Britain now rank below the lowest-income areas of Malta and Slovenia.

In a warning for ministers to protect welfare spending before Rachel Reeves’s spring statement later this month, the National Institute of Economic and Social Research (NIESR) said the UK’s reputation for high living standards was under threat.

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Watchdog suggests alleged ‘two-tier’ sentencing guidelines may breach Equality Act – UK politics live

Lady Falkner, chair of the EHRC, says moves run the risk of positive discrimination

Here is the list of MPs down to ask a question.

PMQs is about to start.

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Art of a deal: how UK and France led dogged effort to repair US-Ukraine ties – for now

Over 11 days of breakneck diplomacy, Kyiv was convinced of need to pacify Trump, but reconciliation may be all too brief

The 11 days of whiplash-inducing talks British and French officials endured to repair shattered relations between Washington and Kyiv, and for the first time put Donald Trump’s trust in Vladimir Putin to the test, could go down as one of the great feats of diplomatic escapology.

The dogged fence-mending may yet unravel as hurdles remain, principally the outstanding question of Ukraine’s security guarantees, but for the first time, in the words of Marco Rubio, the US secretary of state, the ball is in Russia’s court. Putin, by instinct cautious, has preferred watching from the sidelines, suppressing his delight as Trump denounced Volodymyr Zelenskyy to his face in the White House and wreaked subsequent vengeance by stopping all military aid and then pulling some US intelligence.

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‘Patchy and behind deadline’: MPs attack UK rollout of EV charging points

Committee warns of serious injustice to disabled motorists and those reliant on public chargers

The rollout of electric vehicle chargers across Britain is “patchy”, behind deadline and ignores the needs of disabled drivers, the parliamentary spending watchdog has found.

A report published by the public accounts committee (PAC) warned that the charging points needed to give drivers confidence for the switch to EVs were still lacking, particularly on Britain’s biggest roads.

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Ousted Reform MP Rupert Lowe could join breakaway rightwing party

Ben Habib, an ex-Reform deputy leader who was also forced out by Nigel Farage, makes offer to Great Yarmouth MP

The ousted Reform UK MP Rupert Lowe could join forces in a breakaway rightwing party with a former deputy leader of the party who was also forced out by Nigel Farage.

The offer came from the former Brexit party MEP Ben Habib, an outspoken critic of Farage, who said he was “constantly in touch” with Lowe.

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Starmer facing Reform UK byelection challenge as Mike Amesbury quits as MP after assault conviction – UK politics live

Contest in Runcorn and Helsby will be a challenge for Labour

Around 80 Labour MPs could refuse to back government plans to cut billions from the welfare budget, Amy Gibbons and Tony Diver claim in a story for the Daily Telegraph. They report:

The Telegraph understands that around 80 Labour MPs – roughly a fifth of the parliamentary party – “won’t tolerate” billions of pounds of welfare cuts set to be announced by the Chancellor later this month.

The anger is said to have spread beyond the “usual suspects”, with MPs who would not typically criticise Sir Keir threatening to “give the government a slap” over the proposals.

Our Labour values are built on a simple but powerful idea: that every individual, regardless of background or circumstance, should have the support they need to make the most of their lives. Everyone who is capable of working deserves the security, dignity and agency that employment offers. Of course, there are some people who are not able to work and they must be treated with compassion and respect. But for those that can, we must restore the pathways to opportunity which are currently so sparse for millions of people. It is exactly what a Labour government exists to do …

As MPs, we understand that delivering this new social contract requires hard choices to be made. We welcome the work that has begun to rebuild our welfare system, and we are fully supportive of it. We believe reforming our broken system is not only necessary, but also a truly progressive endeavour. And so we have established the Get Britain Working Group to make that argument, insistently.

The radical package of reforms will see:

-£5bn in savings by making it harder to qualify for Personal Independence Payments - a benefit not linked to work that is meant to help people with the additional costs of their disability

This government is determined that instead of facing a life on benefits … we stretch every sinew and pull every lever to ensure that we can get those people into work, because that is the best way for them to have a successful and happy life into the future.

So I think it’s quite right to look at a benefit system which is clearly broken.

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‘Dog-whistle v fog horn’: why Rupert Lowe’s reach on X may not cut through

Lowe’s online presence, helped by Elon Musk, dwarfs that of Nigel Farage, but may not bring him new Reform voters

If you were to looking for answers as to why Rupert Lowe, a relatively little-known Reform UK MP, thinks he can lecture Nigel Farage about running a party and winning an election, there is one place you should probably start: X.

For all that in person Lowe can sometimes resemble a slightly embarrassing uncle at a wedding, on the social media site formerly known as Twitter, the Great Yarmouth MP is a big name – and by some metrics, a notably bigger one even than his party leader.

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MoJ readies extra prison places in case summer riots happen again

Exclusive: Justice minister James Timpson says more cell capacity means emergency early release schemes won’t be needed

Prisons are being prepared to cope with a sudden influx of offenders in case there is a repeat of last summer’s riots, the justice minister, James Timpson, has told the Guardian.

Hundreds of extra makeshift cells and newly refurbished cells will be in use by the end of this year, officials have disclosed, as the prisons minister said there will be “no more emergency measures” such as early release schemes.

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‘Military Keynesianism’? Reeves faces British defence dilemma after EU spending surge

Even Berlin and Brussels are bending fiscal rules in the face of Russia’s threat. Will the chancellor still stick to hers?

As the Nobel laureate Robert Lucas quipped during the 2008 financial crisis: “I guess everyone is a Keynesian in a foxhole.” Donald Trump’s upending of the postwar security consensus has underlined the enduring wisdom of Lucas’s observation. But now, instead of bank bailouts and emergency bond buying, European firepower is being directed at bombs, tanks and drones in the desperate fight to secure the continent’s border with Russia.

Berlin and Brussels – typically capitals of financial orthodoxy – have been convinced that this approach is required once again. Under the plan put forward by Germany’s chancellor-in-waiting, Friedrich Merz, Berlin is on the brink of relaxing its “debt brake” rule to pave the way for spending on defence and infrastructure worth an additional €1tn (£840bn) over the coming decade.

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‘The sewage scandal ends now’: UK water company fines to be used to clean up rivers

After fears £11m would be diverted to Treasury, money will be spent on restoring polluted areas where penalties issued

Millions of pounds of fines imposed on water firms will fund environmental schemes to protect the country’s waterways after fears the money would be diverted to the Treasury.

The water restoration fund was set up by the Conservative government to ensure that polluting water firms paid for the damage they caused. The fund received £11m in fines and penalties from April 2022 to October 2023.

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From Trump whisperer to trouble – angry Reform UK MPs turn on Farage

Internal row in party over ‘messianic’ leader becomes public amid competing members’ allegations of bullying and dirty tricks

Just a few short weeks ago, Nigel Farage’s Reform party was riding high. It was consistently polling above Kemi Badenoch’s Conservative party and in some surveys had even edged ahead of the Labour government.

Donors who had previously handed over large amounts to the Tories were switching sides, while Farage was relishing having the ear of US president Donald Trump, touting himself as a far better representative to the leader of the free world than Keir Starmer.

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Keir Starmer’s poll ratings leap after Trump withdraws support for Ukraine

Around 30% of voters say they prefer Labour for dealing with ‘allies against threats to the UK’ in boost to party leader

Keir Starmer’s approval ratings have shot up since Donald Trump returned to the White House and shocked Europe by withdrawing political and military support for Ukraine, according to the latest Opinium poll for the Observer.

Starmer’s Labour government as a whole has also gained public support for its response to the global turbulence caused by Trump’s return – on security and economic issues. His personal ratings have risen by 10% – albeit from an alarmingly low point – compared with a month ago.

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