LONDON — The leaders of five EU countries have urged Brussels to “swiftly” sign a deal to let the U.K. back into the single market for electricity.

In a letter seen by POLITICO, sent earlier this week, the leaders of Germany, the Netherlands, Denmark, Belgium, and Luxembourg say this month’s U.K.-EU summit should set out “a path” to getting the talks over the line as soon as possible.

Last year Brussels and London agreed to start negotiations on the U.K. rejoining the internal electricity market — but progress has been slow going and talks are not expected to be finished by the Nov. 20 meeting.

A group of countries are now urging the European Commission to wrap up discussions by the end of 2027, according to an EU diplomat granted anonymity to discuss internal discussions.

Proponents say the plan would unlock new renewable energy investment in the North Sea and could cut electricity prices.

But the EU says the U.K. would have to make a contribution to EU cohesion funds as the price of participating in the market — a politically difficult ask for London.

Clean energy hub

The leaders, including German Chancellor Friedrich Merz and Dutch Prime Minister Rob Jetten, write that the agreement is “necessary to unlock the full potential of the North Sea” and to “transform it into the largest clean energy hub in the world.”

“An agreement will thus enhance Europe’s energy security and contribute to a competitive economy that centres on access to clean and affordable energy,” the letter to European Commission President Ursula von der Leyen and European Council President António Costa states.

“These benefits underline the importance of swiftly concluding the ongoing negotiations. We call on you and the UK to agree during the Summit on a path towards the conclusion of these negotiations.”

Britain’s energy industry says the agreement could help bring down electricity prices in the U.K. — a cost-of-living priority for Prime Minister Andy Burnham.

Energy UK, the industry’s representative body, says that being outside the electricity market will create “additional costs of up to £10bn this Parliament through higher energy bills and lower Treasury revenues.”

The same EU diplomat quoted above, from a country supportive of a swift agreement, said the financial contribution required to rejoin the market would amount to “investing” in market access.

“A larger electricity market will ultimately lead to lower electricity prices in the U.K. And of course, the U.K. is currently facing very high electricity prices,” they said.

“The U.K. would be investing in access to a more integrated, secure and competitive European energy market — bringing lower energy costs, greater investment certainty and huge opportunities for British businesses and consumers.”

Greater security of supply, more price stability, and greater certainty for investors would also be key benefits, they said.

While talks on the internal electricity market are not expected to conclude in time for this month’s summit, the Nov. 20 meeting is expected to see both sides sign off three further agreements on youth mobility, emissions trading and alignment on agri-food rules.

Brussels and London are also expected to issue a “joint statement” at the meeting which will address other issues, including the future of talks on the internal electricity market.

LONDON — Andy Burnham jets off to the latest global COP climate summit early next week. The last time he went to this annual meeting of the world’s climate diplomats, he didn’t like what he saw. 

“I’m just back from two days at COP26 and officially worried about the state of the climate debate,” Burnham, then the mayor of Greater Manchester, wrote in 2021, after a trip to that year’s U.N. conference in Glasgow. 

This year’s edition, COP31, kicks off in Antalya, Turkey next week, with a focus on protecting countries hit hardest by the impacts of global warming and setting goals for electrifying world economies.

Burnham will be there — now as British prime minister. And that little-noticed article, published five years ago in the Evening Standard newspaper, says plenty about his political instincts on climate change. 

2021 was the high point of the U.K. consensus on net zero. But the then-future prime minister criticized the summit for giving a “pulpit” to billionaire Jeff Bezos (who had earlier that year “burnt more carbon in a trip to space than most people consume in a lifetime”) and took aim at protesters “with the time to glue themselves to roads … reprimanding ordinary people under work and time pressures for using their cars.” 

Burnham backed climate action, he insisted. But with its technocratic focus on “percentages and far-off dates, with remarkably little reference to the struggles of ordinary families,” there was a danger COP would send the wrong message: “That the drive to net zero will mean cost and inconvenience for ordinary people.” 

Several years and one big job change later, those views have not changed. 

Interviews with more than a dozen advisers, government officials, pollsters and MPs around Burnham reveal a PM convinced of the dangers posed to Britain and the world by runaway global warming — yet whose first instinct, sometimes to the frustration of climate advocates, is to prioritize cost of living and energy security worries at home. 

“I think Andy does get the big picture climate emergency, the urgency with which we need to act,” said Dale Vince, a clean energy entrepreneur and former New Age traveler who has advised Burnham on energy. But “millions of people in our country are asking: ‘How do I pay the bill?’” 

Many politicians are “out of touch with that,” Vince argued. “Andy doesn’t forget it.” 

Mr Pragmatic 

Burnham has been putting that approach into practice since taking power in July. 

Like his predecessor Keir Starmer, he believes the long-term solution to Britain’s cripplingly high energy costs is cutting dependence on expensive, foreign-controlled fossil fuels. But Burnham is also readier to drive down costs associated with the net-zero transition, many of which also end up on voters’ bills. 

In last month’s budget, Burnham’s Chancellor John Healey announced a new mantra: “first and foremost cheaper energy.” Renewables projects like solar and wind farms must now show how they’ll bring down bills if they want to get government support. A subsidy pot for low-carbon electric heat pumps was cut by up to £2.5 billion. Healey has promised to overhaul how energy costs are paid via bills in the new year. 

Most controversially, Burnham has presided over the decision by Energy Secretary Miatta Fahnbulleh to approve a new gas field in the North Sea, Jackdaw. Ministers argued more gas drilling off the Scottish coast would give a short-term boost to energy security, with some of its tax revenues routed into developing clean power.

A decision on the oilfield Rosebank, where climate-damaging emissions will be even higher, is expected by the end of the year. 

There is a big difference, Burnham told MPs last month, between the “ideological” opposition of his anti-drilling Green Party rivals and his own “pragmatic approach.” 

The team of rivals 

Next week, Burnham will find out how that message plays on the global green stage. 

He will be accompanied by Foreign Secretary Ed Miliband, a prominent climate advocate. A Labour MP, granted anonymity to speak frankly, said Burnham’s choice of Miliband to run the Foreign Office — even as he lets Healey cut some green spending at home — was a deliberate “team of rivals” ploy to balance Labour’s progressive and centrist wings on climate. 

“That’s the kind of the ideological fault line in the Cabinet, and it does run through climate, very much so,” the MP said.   

Burnham’s visit to COP is expected to be a short one. 

Those briefed on government planning expect him to attend for no more than a day. Emmanuel Macron, the French President, and German Chancellor Friedrich Merz — both also facing a backlash against the cost of living at home — are skipping the summit entirely. 

While in Antalya, Burnham should try to land his message that letting energy costs spiral higher and higher is the quickest way for countries to lose political support for climate action, say supporters of his agenda. 

“Bringing bills down would help the climate cause more than any speech,” argued Sunny Hundal, a former adviser at Britain’s biggest energy supplier Octopus and now boss of the Cheap Clean Energy Alliance campaign group. Nonetheless, he added: “If Britain is to not become a cautionary tale for the rest of the world, it has to show that the path to cleaner energy is through cheaper energy.” 

‘Betrayal’ 

The U.K. is seen by countries on the deadly frontline of climate change as a key ally in COP negotiations — particularly around weaning the world off fossil fuels. 

That means Burnham’s North Sea policies might get a cool reception, said Mohamed Adow, director of the Nairobi-based climate and energy think tank Power Shift Africa. 

“Jackdaw has certainly been noticed,” Adow said. “From Africa, it is deeply frustrating to see a wealthy country like Britain approve more fossil fuel production while asking developing countries to pursue a cleaner path. Decisions taken in London have consequences for people facing droughts and floods thousands of miles away.  

“Andy Burnham should be under no illusion: approving Rosebank would be a betrayal of the communities he will hear from at COP31.” 

Bill Esterson, a Labour MP and chair of the House of Commons Energy Security and Net Zero Committee, now expects Rosebank to get the go-ahead. Another Labour MP, the same quoted above, said Healey’s Treasury was “really pressuring” Fahnbulleh to approve the project because “it wants the tax revenue.” 

Burnham’s decision to show off some climate consciousness by attending COP at all is, the same MP said, partly a move to placate Labour’s more green-minded backbenchers in advance of approving Rosebank. 

“You get the feeling there’s political space being made for this shittier decision,” they said. 

Esterson took a more generous view of Burnham’s agenda. “He recognizes the [climate] imperative, but he also recognizes the reality of taking people with [him]. I think that’s at the heart of his whole approach to being prime minister, actually.” 

Political threats 

Political rivals spy an opportunity. 

“You can’t claim to be serious about climate leadership when you’re making it harder and more expensive for people to move away from fossil fuels,” said Pippa Heylings, energy security and net zero spokesperson for the Liberal Democrats, attacking the “incoherence” of Burnham’s approach to climate.  

Carla Denyer, a Green Party MP and former co-leader of her party, pointed to Jackdaw and the looming call on Rosebank. “The change Andy Burnham promised has so far failed to materialize when it comes to tackling the climate crisis,” she said. 

Alienating voters worried about the climate carries political risks for Burnham, who has restored Labour’s lead in national opinion polls primarily by attracting Labour/Green swing voters, said polling analyst Steve Akehurst, director of Persuasion UK. 

“None of the individual policy tweaks or changes to net zero are likely to matter on their own, but if they add up to an overall picture of backtracking on climate action it will present a big opportunity for [Green leader] Zack Polanski,” said Akehurst. 

Taking climate “pragmatism” too far could alienate Labour’s existing voters, too. According to new Persuasion UK and YouGov polling shared with POLITICO, 22% of Labour’s 2024 voters list climate and environment in their top three priorities — but only 4% think Burnham does.  

“It’s one of the few policy areas that Labour voters prioritise but don’t currently sense that the PM does,” Akehurst said. 

But allies including Vince think Burnham’s strategy can head off a different political threat, this one coming from the right. 

Heat pump subsidies, he argued, were only helping households that could already afford the additional costs of switching to clean heat. “Middle class subsidies is what we’re about at the moment in the pursuit of net zero, and I think it’s been a gift to Reform,” said Vince, referring to Nigel Farage’s right-wing party, which along with the Conservatives say they would scrap the U.K.’s 2050 net zero target. 

“Icecaps and polar bears [are] all very well,” said Vince. “But when people are struggling to pay their energy bills — it’s not the primary thing that will persuade them.” 

LONDON — Nigel Farage blamed Donald Trump’s midterms catastrophe on broken anti-foreign intervention promises Thursday, branding his decision to launch a war with Iran as “bizarre.”

The U.S. president’s right-wing ally in Britain echoed other high-profile conservative figures in lamenting the price-spiking conflict and warned against a fresh campaign of attacks in the Middle East.

Farage has long considered Trump a personal friend, but has come under pressure to distance himself from the U.S. president, who is deeply unpopular in the U.K. 

The Reform leader has been more critical against a backdrop of global economic woes triggered by the war waged against Tehran by America and Israel.

Farage, leader of the insurgent right-wing Reform UK party, told reporters after a defense speech in London that he wouldn’t have supported a drawn-out conflict with Iran. He said it was “bizarre” that Trump, of all people, took such action, considering he took power on a pledge to avoid endless foreign wars.

Asked about the biggest lesson he took from the midterms carnage for the Republicans, Farage said: “Keep your promises.”

He praised Trump’s “very good” track record of staying faithful to the electorate during his first term, but said, “He broke a promise — that was no more foreign wars.”

“We’re eight months in, and the resultant rise in gas and diesel prices, more than anything else, is what did them in,” Farage said.

He later told broadcasters that he worries the U.S. president will “continue aggressively attacking Iran” now that he has lost Congress.

Farage was initially supportive after Trump launched strikes in February. He urged the U.K. government to “back the Americans in this vital fight against Iran!”

But within two weeks he changed his tune. He subsequently urged ministers not to “get involved directly in another foreign war.”

Senior figures in Reform UK have been trying to distance themselves from Trump in the wake of MAGA’s midterm drubbing at the hands of the Democrats.

One high-ranking adviser, granted anonymity to discuss transatlantic relations, said the party would continue building “good relations” with senior Republicans like JD Vance and Marco Rubio.

“Reform already has good relations with multiple Republicans, and that process will continue,” they added.

Others argued for greater network building with right-wing movements in Europe.

“I’ve never been a huge fan of Mr. Trump,” said one official. “He does speak for a particular slice of American society, but in practical terms what happens on the continent is somewhat more important,” the official added, pointing to the rise of right-wing parties in France, Italy and Spain.

“Given we have a PM that is committed on salami slicing us back into the EU,” they added. “Personally, I think that’s more important than America.”

LONDON — Nigel Farage insisted on Thursday he will meet Marine Le Pen “at some point in time” as the French presidential hopeful keeps the Reform UK leader waiting for a Paris visit.

The leader of the British right-wing insurgency had been hoping for a jaunt to France before the end of October — but has been kept waiting for now.

Reform had insisted he would meet the president of the far-right National Party before the end of the year — but four of her officials told POLITICO this is not on Le Pen’s schedule.

After a defense speech on Thursday, the Reform leader told reporters: “I haven’t met Le Pen for some years actually. But she’s going to win the next election.

“I will go meet her at some point in time.”

One Le Pen adviser, who like the others was speaking on the condition of anonymity to discuss sensitive party relations, said earlier that “the costs and benefits” of a Farage meeting still needed weighing up.

Le Pen is the favorite to win the first round of France’s 2027 presidential elections — but the Reform leader has suffered a dip in the polls after a series of damaging allegations about his party.

A migration agreement that Farage unveiled early September with the National Rally’s second in command, Jordan Bardella, also created a backlash in France. 

The U.S. government has scuttled a French push for the G7 to coordinate on advanced AI safety, with a White House official calling it “unnecessary bureaucracy.”

France’s digital minister Anne Le Hénanff told a French Senate hearing on Wednesday that she held two ministerial meetings in September and October to secure G7 commitments to a high-level working group to test frontier AI — the most advanced models — and share information about risks and incidents.

That effort “did not reach a successful conclusion” because the U.S. wanted to pursue its own approach, the French minister said.

“They are not prepared, at this stage, to issue a joint statement with the other six G7 nations, and have asked us to wait for the findings of their own assessment,” said Le Hénanff. “Naturally, we regret this, but we are continuing to move forward as Europeans on this issue.”

A White House official, granted anonymity to speak candidly, said that the French government proposed a “poorly defined body” to cooperate on AI that the administration feared would “create unnecessary bureaucracy.” 

The official pointed to U.S. President Donald Trump’s Super Intelligence Force, saying it brings government and industry together to accelerate innovation and ensure the safe deployment of models.

France, which holds the rotating presidency of the G7 for 2026, issued a chair’s summary statement after the Oct. 20 virtual G7 tech ministerial, which noted that ministers considered closer coordination on identifying risks and sharing incident information, as well as a dedicated high-level group. It was not a joint statement endorsed by all G7 members.

Le Hénanff has proposed resuming talks in December.

SI acceleration

Trump began promoting “super intelligence” as a replacement for “artificial intelligence” at the U.N. General Assembly in late September. A week later, he ordered federal agencies to use the new term.

G7 ministers in May agreed to discuss secure AI and risk assessment, which was followed by the G7 leaders meeting the following month in Évian.

But the stakes have risen as advanced AI systems gain unprecedented cyber capabilities that can be used for both attack and defense. In July, Hugging Face disclosed an intrusion driven by an autonomous AI agent. OpenAI later said models used in an internal cybersecurity test had bypassed controls and compromised parts of its own research infrastructure and Hugging Face’s systems.

Le Hénanff said France would keep pushing the issue, citing INESIA, France’s national AI evaluation and safety institute, and Inria, its public research institute for digital science and technology, as resources for the work.

The White House official said: “Under President Trump’s leadership, America will continue to lead the world in SI innovation.”

U.S. President Donald Trump’s midterm election losses haven’t helped the U.K. economy — yet.

The Bank of England’s nine-member Monetary Policy Committee announced on Thursday it has overwhelmingly voted to increase interest rates to 4% from 3.75%, the first time since August 2023 to combat rising prices driven by the war in Iran.

Unlike the U.S. Federal Reserve and European Central Bank, the Bank of England has been reluctant to raise rates for fear of denting the British economy.

Until now, Governor Andrew Bailey and other MPC members have preferred to wait and see whether higher energy prices spilled over more broadly.

But the Bank was forced to increase rates after U.K. inflation came in at 3.5% in September, while the economy posted better-than-expected growth figures — raising the risk prices could take off.

The MPC on Wednesday voted 8-to-1 to raise rates, arguing the energy shock since the war began has built “sufficient” inflation pressures to justify a hike.

The dissenting vote from Catherine Mann was for a larger increase of 0.5 percentage points.

But Bailey made no secret of the fact that the future health of the U.K.’s economy depends on what the U.S. does in Iran.

“Today’s increase shouldn’t be seen as the first in an inevitable long sequence of hikes,” Bailey said.

“But, unless the conflict in the Middle East is resolved, neither does it seem likely to be the last increase.”

The Bank projected inflation would pick up to nearly 5% by the second quarter of 2027, higher than its previous forecast, with greater spillover into wages and other prices.

Under an adverse scenario, in which prices stay higher for longer and the conflict in the Middle East continues to flare, inflation would hit 6.2% in the third quarter of 2027.

Thursday’s decision, which comes a week after Chancellor John Healey delivered his first budget under the specter of Brits paying the highest energy prices in three years, will further squeeze struggling U.K. households and businesses already hit with higher energy bills and mortgage rates.

The tougher financing backdrop could hurt the Burnham government’s promises to tackle the cost of living. Yet rampant inflation would also undercut that pledge.

Still, the Bank’s top brass also pushed back on market expectations that rates could by hiked to 4.75% or 5% in 2027 — which could help bring down decades-high government borrowing costs.

The Trump factor

The decision comes as the rout of Trump’s Republican Party at the U.S. midterm elections on Tuesday raised the prospect of a peace deal in the Middle East.

A thaw in the conflict could bring down fuel prices by easing pressure on oil supplies and improve the cost-of-living picture for U.K. households.

There were reports Trump could respond to his party’s losses by embarking on a bombing campaign in the Middle East, but the U.S. president appeared to accept on Wednesday that higher petrol prices affected his popularity and struck a more conciliatory tone on the prospect of peace negotiations. 

U.S. Vice-President JD Vance blamed the Iran war for the electoral losses. And U.K. Prime Minister Andy Burnham said Wednesday that the elections create an opportunity to focus on the cost of living.

Oil prices fell sharply on Wednesday, amid expectations Democrats could also limit Trump’s funding for the conflict. The possibility of a ceasefire could yet be subject to Trump’s whims.

Regardless, U.K. consumers will feel the pinch through a rise in the energy price cap in January. 

Even if falling oil prices persist over the next few weeks, the price cap is likely to rise substantially because of a lag in the way it is calculated. 

The Bank forecast the cap will hit £2,150 in the first quarter of 2027. Food price increases, which have so far been muted, could hit 4.75% by mid-2027 as companies pass through higher costs.

Healey’s budget will knock 0.25 percentage points off inflation by the second quarter of next year, the Bank said, while tighter fiscal policy to bring down the deficit would likely detract from growth in the medium term.

LONDON — Nigel Farage has been hyping up a visit to see Marine Le Pen in Paris. But the French presidential hopeful is keeping her embattled right-wing ally waiting.

The Reform UK leader’s jaunt to France had been billed for October, as a key part of a tour of leaders on the European right before the year is over.

But four officials in Le Pen’s National Rally with knowledge of her schedule, speaking on the condition of anonymity to discuss sensitive party relations, have told POLITICO that a visit to the party president is still not scheduled.

Several figures in the far-right party said there was no urgency in refocusing media attention on relations with Reform or on a migration deal signed in September. One of the people cited above said that “the costs and benefits” of a Farage visit needed weighing up.

Le Pen remains favorite to win the first round of France’s 2027 presidential election — but much has changed for both Reform and the National Rally since Farage’s officials first pitched the visit.

Jordan Bardella, Le Pen’s second-in-command, was the star guest at the British right-wing party’s conference in Birmingham at the start of September. Bardella and Farage unveiled an agreement to deport back to France all migrants who make unauthorized crossings of the English Channel in small boats.

But the plan provoked a backlash in France, as politicians across the spectrum questioned quite why the country would accept asylum seekers back.

Further trouble struck Reform in Birmingham too. At that point polling still had Reform within touching distance of the governing Labour Party — despite the more popular Andy Burnham taking over as prime minister from Keir Starmer.

Then an undercover investigation broadcast on the eve of conference raised fresh questions about Reform’s finances and led to the resignations of two of Farage’s most senior aides. Labour’s polling numbers have since improved, while Reform is being challenged for second place by an uptick in support for the Conservative Party.

It was at that same conference in early September that Reform first told POLITICO Farage would be heading to France to meet Le Pen by the end of October. 

Farage also alluded to a trip to Paris after Bardella’s English-language speech, saying: “The only downside is I think they’re going to invite me to go to Paris and I’ll have to speak in French, but never mind, we’ll get there.”

Confirmation of the invite never materialized — and as October drew to a close and it became apparent Farage wouldn’t get treated to a reciprocal appearance at the National Rally’s conference in Orléans, a senior Reform official said: “It’s in [the] diary for this year.”

That timeline still isn’t recognized in Paris. The four anonymous National Rally officials with knowledge of Le Pen’s plans said they are not aware of any Farage visit scheduled before Christmas.

One of them, a Le Pen aide, suggested Farage may instead be offered a meeting with Bardella, whose stock in the party has suffered a series of blows in recent months.

Another adviser to Le Pen questioned the pros and cons of the party president associating herself with Farage.

“We’d need to spend a bit more time thinking through the costs and benefits,” they said.

Thibaut Francois, an official with the National Rally’s delegation to the European Parliament, said that there are “regular contacts” with Reform and that the two parties would meet “very soon.” But he would not say whether such a meeting would go ahead this year.

“Reform’s prime goal is getting battle-ready for the U.K. elections and swanning around internationally is not going to be any help right now to the message to the U.K.,” a senior official in Reform said.

Charles-Henri Gallois, Bardella’s economic adviser, also downplayed the need for any further meetings between the two parties — arguing their migration deal is “ready and set to be implemented” if both parties make it to power.

“There’s no need to discuss it further,” he told POLITICO. “Anyone who criticizes the agreement does not understand migration flows. The agreement is entirely beneficial to France.”

Bardella’s man?

Le Pen has spent years trying to distance herself from moves to pull France out of the European Union, wary that the suggestion of a Brexit-style split spooks French voters.

“Farage still supports Brexit, whereas she has abandoned [Frexit], as it’s too frightening for French voters,” said far-right expert Jean-Yves Camus, from the Jean-Jaurès Foundation, a think tank. “And the recent defeat of Donald Trump in the midterms will reinforce Le Pen’s mistrust of Trumpism and all his lookalikes in Europe.”

The migration deal was signed between Bardella and Farage, and at the time, there were already doubts about the level of backing inside the National Rally for the deal.

Since Reform’s party conference in September, Bardella’s star has further waned following antisemitism allegations, which he has vigorously rejected.

Ahead of the Farage-Bardella deal, Farage bullishly proposed launching the “largest military operation in the English Channel since World War II” to return small boats to French shores.

“Why [send them back] to France if they aren’t French?” one person close to Le Pen told POLITICO at the time.

Spokespeople for Reform and National Rally did not respond to requests for comment.

Sarah Paillou contributed to this report. Clea Caulcutt reported from Paris.

LONDON — Brits would like the Democrats to triumph in the U.S. midterms and believe a Republican win would be riskier for the world, according to a new POLITICO poll.

A survey by pollster PF Global found that 40% of Britons would rather the Democrats win control of Congress in U.S. elections on Tuesday, compared to just 15% preferring the Republicans.

Even among Reform UK supporters — the right-wing party led by Donald Trump ally Nigel Farage — only 27% want a Republican win compared to 21% for the Democrats.

Brits see a Republican hold as a riskier result for the world, with a third expecting global affairs to get more chaotic if the U.S. president’s party controls Congress, compared to 17% who believe it will be less chaotic.

Trump has long been unpopular with the British public, and 55% say his presidency has been bad for the U.K. compared to 17% who think it’s been good. His administration is slightly more popular with Reform supporters — but 38% of that cohort still view it negatively, compared to 27% who regard it positively.

EU is a more ‘reliable ally’

Brits see a raft of other nations and blocs as more reliable partners than the U.S., the PF Global survey suggests. Only 35% trust the U.S. to act as a reliable ally to the U.K. — a far lower figure than for Australia (66%), Canada (65%), Germany (54%), the European Union (53%) and France (50%). Of the seven options given, those surveyed only saw China as a less trusted partner than the U.S.

Prime Minister Andy Burnham’s push for a closer relationship with the EU appears to also have public support.

The survey suggests more than half the British public (54%) back prioritizing strengthening relations with the EU over Commonwealth countries (46%) and the U.S. (29%).

Burnham traveled to the Commonwealth Heads of Government Meeting (CHOGM) in the Caribbean on Monday as he seeks to build greater economic cooperation with the 56-strong association of countries — most of which are former territories of the British Empire.

Only Reform supporters put strengthening U.S. relations at the top of their list (52%) compared to 48% for Commonwealth countries and 34% for the EU.

Seb Wride, head of polling at PF Global, said: “President Trump has rapidly reshaped the transatlantic relationship. Brits see their traditional ally as less reliable, and that is pushing them to explore other alliances.

“The question is how far this sentiment extends beyond Trump. A blue wave might be enough for some Brits to feel Trump got what he deserved. But repairing the special relationship is a much bigger ask of a midterm election that few Brits are watching closely.”

Indeed, just 22% said they’ve heard a lot about the midterms, compared to 40% who had heard a lot about England footballer captain Harry Kane winning the prestigious Ballon d’Or trophy for the best-performing footballer.

PF Global polled 2,038 U.K. adults between Oct. 28 and Nov. 2, 2026.

Ask a 22-year-old and a 70-year-old in the UK today whether they use digital tools to manage their money, and the answer is increasingly the same: yes. Ask them whether they feel confident doing so, and you get two very different answers.

Financial empowerment is the term we use to refer to the knowledge, skills, tools and opportunities that allow an individual to take control of their financial life and improve their financial wellbeing over time.

Britain increasingly banks, budgets and borrows online — a shift made possible at scale by advances in digital technology and the data and analytics behind it. But how confident people feel doing it is the real story of financial empowerment in Britain right now, and it offers valuable insight for policymakers and industry alike.

Different lives, shared financial ambitions

For a decade, Lloyds Banking Group’s Consumer Digital Index has tracked how people across the UK engage with digital technology and the confidence they have in doing so. Its analysis shows that more than 75 percent of 18- to 24-year-olds have used artificial intelligence (AI) for personal finance in the past year — the highest adoption of any generation. Yet they’re also the least confident using the tools they’ve adopted: just 64 percent of 18- to 24-year-old digital tool users feel confident using them, rising steadily to 85 percent among 65- to 74-year-olds.

Britain increasingly banks, budgets and borrows online — a shift made possible at scale by advances in digital technology and the data and analytics behind it.

Look across the UK and the picture shifts again. According to the index, London is the UK’s AI finance capital — 49 percent of digitally engaged respondents use it weekly, reporting the nation’s highest average savings of £562 after following AI-powered recommendations.^* Yet Londoners who use digital tools feel less confident doing so than anyone else in the country. Wales leads the UK on financial engagement and knowledge — how actively people manage their finances and how well they understand them — with the highest proportion nationally of those surveyed saying digital tools have helped them grow their pensions and investments. Yorkshire and the Humber leads on digital budgeting, and Northern Ireland shows some of the lowest adoption alongside some of the strongest outcomes among those who do engage.^** How people use digital tools to manage their money across the UK is as varied as the lives, places and ambitions behind it.

These insights insist that financial empowerment should be a national priority. While people across different generations and in different places are engaging with digital money tools differently, the ambition is the same — to have confidence, capability and control over their financial future.

It can’t be enabled in the same ways to everyone. A 20-year-old in Croydon, a 45-year-old in Leeds juggling debt and family costs, and a 70-year-old in Cardiff drawing down a pension will need different things to feel confident in managing their money online.

While people across different generations and in different places are engaging with digital money tools differently, the ambition is the same — to have confidence, capability and control over their financial future.

But strip away the age and the postcode, and what people want is remarkably consistent: the confidence to decide, the capability to act, and the control to plan ahead without being derailed by the next bill.

That’s the common connection between a Gen Z Londoner testing an AI budgeting tool and a Boomer in Edinburgh checking her pension pot on an app before bed.

Financial access is only the starting point

The UK has made big steps toward building digital access — nearly nine in ten digital tool users across the UK (88 percent) now manage their money online weekly. That’s a real achievement, but access was never the finish line and cannot be taken for granted.

A second goal is to turn that access into outcomes, in ways that reflect how differently people actually experience money. That means building financial education into schools and workplaces earlier and closing the trust gap around AI-generated advice for the younger users adopting it fastest. Places with the least developed financial habits should be given support designed for their circumstances, not advice scaled down from somewhere else.

As the UK’s largest digital bank, with around 22 million customers now managing their money through our apps, we have as much reason as anyone to get this right — and a role to play in doing it. Our ambition is to make finance simpler, smarter and more connected for every moment that matters, which is why we’re using AI, data and digital tools in practical, purposeful ways to help customers make better financial decisions and protect themselves from harm. By using our reach, technology and connectivity, we can help more people and businesses build stronger financial futures and realise their ambitions.

Financial empowerment is a national economic opportunity

The size of the prize is substantial. Independent research commissioned by Lloyds Banking Group and led by the University of Nottingham puts the value of turning digital access into financial confidence at up to £100 billion for the UK economy over the next decade — roughly £3,500 per household.

Our ambition is to make finance simpler, smarter and more connected for every moment that matters, which is why we’re using AI, data and digital tools in practical, purposeful ways.

Confidence changes what people do with their money. Instead of just getting through the week, they start to plan, adapt and invest in what comes next. Multiply that across millions of households, and the effect stops being personal and starts being national.

Digital access got the UK this far. Confidence, capability and control are what will get it the rest of the way — and building them should be a national priority.

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Notes:

^*Savings figures are self-reported estimates and are not verified against transactional data. They should be interpreted as perceived impacts rather than guaranteed outcomes.

^**The Northern Ireland outcome findings are based on a small sample, n<100, and should be interpreted as indicative rather than statistically representative of the wider population.

BRUSSELS — U.K. Prime Minister Andy Burnham is better at talking to the public than Tony Blair, Wes Streeting asserts — and it’s a reason why a serious conversation about reversing Brexit could begin within weeks.

Speaking to POLITICO during a European swing through Brussels and Berlin on Monday, the British defense secretary said that while Blair was a “generational political leader,” the former Labour leader lacked Burnham’s “conversational style” which will be useful when helping discuss the “trauma” of Brexit.

Burnham, who inherited active discussions from his predecessor Keir Starmer about resetting Britain’s relationship with the EU, has said that he hopes Britain will rejoin the bloc within his lifetime. The British PM is 56.

Streeting — who has long been a pro-EU voice within his party — backed Burnham’s drive to reopen the conversation about membership.

He said the British public is “perfectly capable of engaging with complicated arguments, if they’ve got a political leader brave enough to have that conversation with them.”

“And I do think … he is an extraordinary political communicator,” the defense secretary said of Burnham. “And the way in which he has a conversation with the public is unlike anything I’ve seen before.

“Even Tony Blair, who was such a generational political leader with a gift for communication — he would confront the public with arguments — but I don’t think even Tony Blair had Andy Burnham’s conversational style, which the public warm to.”

Streeting reiterated that he is personally in favor of rejoining the EU: “My position on the EU was clear in 2016. It was clear when I had a tilt at the leadership, and I haven’t changed my view.”

However, he warned that renegotiating Britain’s relationship — including rejoining — would not be simple. “Leaving was a very complicated process, and rejoining would also be a very complicated process,” he added.

Officials from Britain and the European Union will meet for Brexit reset talks on Nov. 20 focused on a narrow set of cooperation areas rather than a broader rejoin push.

Streeting said that “around the summit” the U.K. government will start to have a conversation with the public and the European Commission over “if we were more ambitious about the relationship, what could that look like?”

“Once we’ve got a clearer view ourselves of what we really want, and the public have got a clearer sense of where they are, then I think we’re in the territory of thinking: ‘Okay, so what would we want in the next manifesto, is there consensus that could be reached even with other political parties?’”

Burnham’s pro-Europe push since becoming prime minister earlier this year has led to speculation that he will call an early general election to secure a mandate for the various long-running, complex and expensive policy problems he wants to tackle. 

“I think the only place that an early general election exists is in the speculation of column writers and the talking points of the Conservative Party’s leadership,” Streeting said, adding: “I don’t know how many more times Andy or members of the cabinet can say no early election before it sinks in.”

Prime Minister Andy Burnham will have an unofficial goal when he meets members of Britain’s former empire next week: Avoid a fight about slavery reparations.

Good luck, as they say, with that.

His predecessor Keir Starmer’s trip to the last Commonwealth Heads of Government Meeting, at a beach resort on the Pacific island of Samoa in 2024, is still the stuff of rueful mutters in parts of Whitehall.

Lined up in a semi-circle of armchairs — “like an Alcoholics Anonymous meeting,” as one person briefed on the gathering put it — leaders from many of the 56 Commonwealth nations negotiated live over a 16-page communique on laptops and tablets. Starmer, a barrister, found himself personally redrafting a key paragraph about reparations on a screen surrounded by other leaders, said two further people briefed on the meeting.

The unusually intimate format of the leaders’ retreat meant they had no officials with them on the veranda, and Starmer had just one civil servant — No. 10’s private secretary for foreign affairs — stationed in a tent close by. His chief of staff Morgan McSweeney was woken at 4 a.m. London time by a phone call to talk about the strategy for reparations.

That, however, was never clearly resolved. The retreat dragged on hours late; some leaders left before it was even over. Starmer was frustrated and felt he had been “ambushed,” said one U.K. official involved in the 2024 trip. A second said they had blocked the incident from their memory. A third said Starmer was left “furious,” adding: “He went in blind and it was terrible for him.” A fourth said simply: “It was a disaster.” All were granted anonymity to speak frankly.

The eventual communique agreed on a “conversation towards forging a common future based on equity.” This fudge kicked the issue of reparations down the road — where it now lands in Burnham’s lap.

Britain’s new prime minister will touch down at the biennial summit in Antigua and Barbuda next week to find the issue still firmly on some Caribbean and African leaders’ minds.

At the United Nations in May, 123 countries passed a motion calling for “inclusive, good-faith dialogue on reparatory justice.” The U.K. abstained. Barbados PM Mia Mottley announced a manifesto from Caribbean leaders on the “moral, ethical and legal case” for reparations in June. Commonwealth Secretary-General Shirley Botchwey said last week that an apology for Britain’s role in the slave trade “wouldn’t hurt.”

The visit will be a test of how Burnham — who has a reputation for speaking off the cuff, especially on issues of moral justice — maintains a delicate U.K. government line that reparations are not “the answer,” as Foreign Secretary Ed Miliband told POLITICO last month. And Burnham will face that challenge in a unique spotlight: It will be his first overseas visit with King Charles III, who is the head of the Commonwealth.

POLITICO spoke to a dozen U.K. officials or politicians who were involved in the 2024 summit or the planning for Burnham’s upcoming visit. They painted a picture of acute anxiety in the British state over how to deal with calls for reparations from its former colonies; tensions between Downing Street and the Foreign Office over the handling of 2024; and serious questions in Whitehall about whether the summit is even useful for No. 10 — despite the king’s role leaving U.K. prime ministers little choice but to attend.

Burnham will not have to deal with the extreme jetlag and communications hurdles that dogged Starmer’s trip, which involved a 28-hour flight in each direction. But like Starmer, he will fly out at a time when his in-tray is crowded by other issues — not least the U.S. midterms happening at the same time and the domestic aftermath of his first budget, just unveiled this past Wednesday.

The first U.K. official quoted earlier in this story said: “There’s a sense that there can’t be a repeat of [2024] this time around.” The third U.K. official quoted above said: “I don’t understand why they’re making the same mistake. Does the prime minister really have to go?”

A No. 10 official, however, said Burnham made clear soon after taking power on July 20 that he was “very keen” to attend the summit. Miliband has “laid the groundwork so that things hopefully won’t be as tricky as they were in 2024,” this person added.

“Andy’s style is that he is an honest broker with people, and he will give an instinctive response to things,” the official said. “But the government’s position is clear that reparations are not seen as the right route. It’s a careful balancing act, but one that we’re well prepared for.”

Climate resilience fund in the works

One tactic for the current No. 10 will be to try to avoid talking about it public.

Downing Street has broken with recent precedent by deciding not to bring the usual “pack” of political journalists, taking a smaller media “pool” instead. This will limit the scope of questions that Burnham faces. (Political editors from news outlets, including POLITICO, have written to No. 10 to object to the arrangement.)

Timing could also allow the visit to slip under the radar. Burnham and Foreign Secretary Ed Miliband will be there alongside counterparts including Anthony Albanese of Australia and Mark Carney of Canada, creating a rare opportunity for them to discuss the implications of the U.S. midterm results in private. The symbolism, as “middle power” nations deal with a drift in U.S. relations under Donald Trump, would be obvious.

Officially, the agenda is to build an alliance that can boost these middle powers, along with the developing states that global summits usually overlook. 

The Commonwealth Secretariat — the London-based body that co-ordinates the summit — said the aim of next week’s gathering is “partnerships and investment,” including in climate and youth employment, and removing trade barriers.

Likewise, the U.K. Foreign Office has been working on a climate resilience fund for developing nations, two people with knowledge of the talks said. A third said conversations in the U.K. government had focused on mobilizing public and private finance, and improving access to finance for climate-vulnerable countries.

Three people with knowledge of the planning emphasized that this summit would be an opportunity to build on relations with countries that could discuss bilateral trade, though they did not name specific nations and no U.K. trade ministers are due at the event.

“There will obviously be trade and investment discussions with a range of partners,” said one of the three people, a U.K. government official, who also noted that the U.K. will raise the impacts of El Niño. “The bigger picture is that we want to use the Commonwealth network to deepen trade and investment links across its 56 members — that Commonwealth advantage is one of the reasons the grouping matters to the UK.”

‘Playing Scrabble with words’

But leaders at these events, known by the awkward acronym CHOGM, can raise whatever topics they wish — reparations included.

Denis O’Brien, the Irish telecoms billionaire who founded the Repair Campaign calling for financial reparations to the Caribbean in 2022, said: “The conversation has moved radically forward.” He urged Britain and other European nations to “start off with an apology and then have an engagement,” adding: “The Foreign Office and the prime minister’s office are playing Scrabble with words — and unfortunately they’re leaving King Charles, who is so highly respected in the Caribbean, in a very difficult position.”

Paul Boateng, the Labour peer who was Britain’s first Black Cabinet minister and now campaigns on the issue, said Caribbean nations “are going to be pressing it. This issue is not going to go away.” The recent UN resolution reinforced Caribbean and African nations’ argument, argued Boateng: “We can’t be seen to simply ignore it … We cannot hold the Foreign Office line that it changes nothing.”

That position cast a long shadow two years ago.

No. 10 flew to Samoa in 2024 insisting reparations were “not on the agenda,” even though the summit’s free-wheeling format meant the choice was effectively out of Downing Street’s hands. 

This message “went down like a bag of sick” with Caribbean nations who saw it as “colonial” and “arrogant,” recalled one person involved in conversations at the time.

The handling created tension between Downing Street and the Foreign Office, then led by David Lammy, who also attended, according to six other people with knowledge of the 2024 trip. 

One of the six people said No. 10 figures had expected the Foreign Office to better manage expectations among Commonwealth nations ahead of Starmer’s arrival. The person said: “No. 10 did not feel like they were well enough informed, and felt some of this could and should have been handled in advance. There was the feeling that both Lammy and the Foreign Office were institutionally pre-disposed to this sort of stuff and not shutting it down. The PM didn’t know what he was going into.”

A second person said: “​​The FCDO world does forget, sometimes, the politics of what’s going on in the U.K. It’s very institutionalized.”

A third person stressed that senior aides in No. 10 had blamed Foreign Office officials, not Lammy personally. Before Starmer left office this year, No. 10 had been drawing up plans for Starmer to skip this year’s CHOGM — and send Lammy as his representative. By then Lammy had been moved from the foreign office and was Starmer’s deputy prime minister.

Another of the six people countered that it was No. 10 that persisted, ahead of the 2024 summit, with a line that was too binary — reparatory justice, as campaigners prefer to call it, has a wide definition that includes support for climate adaptation and education — and failed to listen to Foreign Office warnings ahead of time about the strength of feeling among Commonwealth nations.

“The audit trail would completely exonerate David and the Foreign Office,” this person said. They argued No. 10 officials — who were keen to hold on to the mantle of fiscal responsibility ahead of Starmer’s first budget — had viewed the row too much through how it would be perceived by the right-wing Daily Mail newspaper.

Two other people with knowledge of the 2024 trip insisted they did not remember any significant friction between No. 10 and the Foreign Office. Lammy’s office did not immediately respond to an invitation to comment.

UK review mooted a scaled-back summit

More significantly, the 2024 summit also led to discussions in Whitehall about the set-up of CHOGM itself.

Lammy commissioned an internal review by Foreign Office officials on the Commonwealth in the wake of the 2024 summit, his former Special Adviser Ben Judah told POLITICO.

Judah said the review suggested reducing the frequency of CHOGMs to “every four or five years,” potentially aligned with the hosting of the Commonwealth Games, and seeking to remove the final communique and leaders’ retreat.

It suggested an investment conference in alternate years modeled on the Asia-Pacific Economic Cooperation forum, which could keep the Commonwealth branding but with no organizational role for the Secretariat, said Judah.

Judah suggested this would improve attendance at CHOGM, which is often patchy; India’s Prime Minister Narendra Modi does not plan to attend next week’s summit, for example, though there will be a delegation led by External Affairs Minister Subrahmanyam Jaishankar.  “The Indians think this thing is ridiculous and self-harming and just totally bizarre,” said Judah. “They’d be interested in a real investment conference, not this farce.”

A second former U.K. government official said they knew about the report, which has not been made public, adding that No. 10 figures under Starmer discussed similar concerns about the format of the Commonwealth summit after the Samoa visit.

The Foreign Office declined to respond to questions about the report when contacted by POLITICO, including when it was finalized or whether any of its recommendations were pursued. One Foreign Office official, however, stressed that it was not the U.K. government’s position and that any decisions about future CHOGM arrangements would be for Commonwealth members collectively.

The U.K. government official quoted on trade and investment earlier in this piece said: “The Commonwealth is more important to our geostrategic position now than at any time throughout its 80-year history. In today’s more divided, unpredictable world, the Commonwealth has the potential to be a powerful, values-based force for good in the world.

“This gives us a huge opportunity to drive U.K. interests and priorities — Commonwealth relationships have helped to drive global support for Ukraine, and it is hugely important for our work on climate.”

Funding pulled from reserves

Judah, however, argued that the Commonwealth Secretariat is a “broken institution” and Britain should wind down its involvement to focus on an investment summit instead.

CHOGM has ended up as a “platform for the reparations campaign,” argued Judah: “There’s nothing else on the agenda because it’s not a real international organization, and it’s not a real summit with deliverables.” The Commonwealth and Secretariat, he said, has “essentially been taken over by the only countries that are still really invested in them, which are the Caribbean countries supported by a few African countries, to push the reparations agenda.”

For some, that extends to questions about the way the Secretariat spends its money.

Two people with knowledge of the situation said part of this year’s CHOGM summit is being paid for out of the Secretariat’s reserves. “There is a real sense of concern about the malaise and drift of the organization,” argued one of the two people. “Financially it’s in a dire, dire state.”

A Commonwealth spokesperson responded: “The Commonwealth Secretariat accesses reserve funds for the biennial Commonwealth Heads of Government Meeting and always with member country approval.”

Back in 2024, Starmer’s most senior aides privately raised the question about whether he should attend the Samoa summit at all. “We were overruled,” said another person who worked under him.

Whitehall officials initially assumed that Burnham would not go either, until he said otherwise. “To a lot of the Caribbean countries, the word [from officials] was that he wasn’t going to show,” said O’Brien. “I think people were taken aback by that.”

But despite Starmer’s experience in 2024, Burnham will attend. 

Among all other reasons, there is one very obvious one. “It’s very difficult for a prime minister not to go because the king goes,” said one person who worked under Starmer. “It’s important to him.”

Burnham’s ‘surer touch’

Once Burnham is in the room, campaigners hope he will at least be a listening ear.

Outside the prime minister’s Manchester office No. 10 North is a statue of Abraham Lincoln, commemorating the mill workers who refused to touch raw cotton picked by slaves.

Burnham referred to it in his first speech to the United Nations last month. “In 1862, people with little power used it to help those with none on the other side of the world,” he said. “The best change is change like that, bottom-up change led by people.”

The new prime minister “understands the importance of Manchester as the second great city of empire, and he has a surer touch than his predecessors,” argued Boateng. “We’ve got an opportunity to reset the relationship.”

What reparatory justice would look like is another matter. 

Previous estimates have suggested Britain should owe as much as £18 trillion, but the conversation is far more nuanced than talking about a single big number.

While Boateng argues that no measures should be taken off the table, he would begin with reforming the International Monetary Fund and World Bank to give more Commonwealth countries a meaningful seat at the table, and returning historic artefacts such as the Benin bronzes that are displayed in London’s British Museum. “The British Museum holds loot, literally loot. These are stolen goods,” he said.

Britain is working on debt relief too. Chancellor John Healey plans to make international finance for developing countries a key theme when Britain hosts G20 finance ministers next year. 

NGOs have urged Healey to make debt relief more generous by changing the G20’s common framework and UK domestic law, which sets the terms for 90% of debt that low-income countries owe to private lenders.

Maria Finnerty of Bond, the membership body for NGOs, said Britain “continues to play a role in enabling illicit financial flows through loopholes linked to the City of London and its overseas territories, amounting to the loss of billions from some Commonwealth countries.”

Miliband reflected all this in his POLITICO interview last month at the Labour Party Conference. While condemning the slave trade as “terrible,” he said his focus was on addressing current issues in countries “on the front line of the climate crisis, of the debt burden, of trying to reduce poverty in those countries.”

O’Brien is calling for monetary payments, however. Through the Repair Campaign, he wants to see the EU and U.K. make money available to the 15 Caribbean Community (CARICOM) countries — with a special case for Haiti — “each year for the next 75 years” for issues such as education, green energy and storm defenses to deal with climate change. 

O’Brien would not be drawn on a single figure, but suggested payments should supplement the national budget of each affected country by around 10% a year.

Asked if he had had conversations with the Foreign Office, O’Brien replied: “What do you think?

“I mean, we would like to. We’re approaching this in a very friendly way, taking a very, very sensitive period of history and trying to get results. We have the highest respect for the British government, and particularly the King. But it can’t go on forever.”

LONDON — Britain’s intelligence agency GCHQ cannot account for the whereabouts of thousands of storage devices which could contain sensitive material, according to an official watchdog.

A report by the Investigatory Powers Commissioner (IPCO) — which polices how Britain’s intelligence agencies use their spying powers — on Thursday found that a significant number of devices including USB sticks, hard drives and memory cards are unaccounted for.

Brian Leveson, the Investigatory Powers Commissioner, said that GCHQ “still cannot tell me what has happened to removable media that may hold sensitive data, years after I first raised it with them.”

He noted that the devices “may contain IPA-related data” — which has a high level of sensitivity.

IPA-related data refers to information collected or held under the Investigatory Powers Act 2016. That could include intercepted communications such as emails, texts and telephone calls, as well as information extracted from people’s computers or phones.

The report added that GCHQ currently estimates the number of devices “to be in the thousands” and is currently undergoing work so it can report how many of the devices have been confirmed as lost.

“We remain very concerned about this issue and are disappointed with the time it has taken GCHQ to investigate,” the report notes.

Last year IPCO disclosed that GCHQ and fellow intelligence agency MI5 had been unable to locate considerable numbers of storage devices, some of which potentially containing information classified as “TOP SECRET.”

A GCHQ spokesperson said: “As IPCO have reported, our management system for removable media was previously not sufficiently robust to effectively track the items that were registered for use. IPCO are right to note the flaws in the data the system produced, and we have taken action against all their recommendations.

“We recognise the importance of security of removable media in our systems, and have a range of measures to mitigate the risks posed by these items. The findings in the report have been addressed comprehensively and all necessary steps to correct this issue have been taken.”

LONDON — Enforcement of the U.K.’s upcoming social media ban for under-16s will probably require older teens to show a form of photo ID, according to the U.K.’s online safety regulator Ofcom.

In a government-commissioned report, Ofcom said it had identified just four methods that are “highly effective” at determining whether a user is 16 or over — while noting that “the risk of circumvention cannot be entirely eliminated, and some children will succeed in bypassing age checks.”

The advice comes after the U.K. government vowed to take a tougher approach than Australia to enforcing its ban — due to come into force next year — by requiring platforms to use “highly effective age assurance” to identify underage users.

It will inform regulations to implement the ban which ministers have said they aim to introduce to parliament this year.

Three of the methods identified by Ofcom — photo ID matching, using a digital ID service, or banking-based checks — require a passport or driving license at some stage, while the fourth, facial age estimation, may in some cases need to be followed by a supplementary check using one of the other methods because of a high margin of error at younger ages.

“This ban will shape the future of children’s lives online, so it’s important to get it right,” Ofcom CEO Melanie Dawes said.

While the age checks would involve processing of personal data, “available methods can be delivered in a way that protects users’ privacy and complies with data protection law,” Ofcom said.

It also said social media platforms should take steps to mitigate circumvention, like enabling users to report suspected underage accounts, and using age inference technology to spot activity from users who may be underage.

The regulator said it will consult on further guidance for platforms once regulations to implement the social media ban are laid.

Ask European Union leaders what they think of Mark Carney’s climate credentials, and you’ll get a gushing response.

“We see the world with the same eyes: from AI to climate change,” European Commission President Ursula von der Leyen said in her State of the Union speech last month, where the Canadian prime minister was the guest of honor.

“Canada and the EU are very, very like-minded,” the bloc’s climate chief, Wopke Hoekstra, told POLITICO in an interview when asked about his hopes for climate collaboration between the two powers ahead of this week’s EU-Canada summit in Montreal.

But this rosy view sidesteps a less comfortable reality: Canada is a major fossil fuel producer whose climate ambitions fall far short of Europe’s.

And under Carney, those ambitions are weakening.

Last year, Canada produced more crude oil than any other country outside the big three producers, Russia, Saudi Arabia and the United States. Oil and gas are Canada’s biggest exports by far, and the industry lobby is an influential force in Ottawa.

In his previous life as a central banker, Carney was considered a climate champion. POLITICO even dubbed him an “eco warrior” in 2018. But since taking over as prime minister last year, he has weakened Canada’s climate policies at a rate few predicted, scrapping a national carbon tax and electric vehicle mandate and opening new oil and gas projects.

The list of climate laws Carney has watered down, repealed and canceled makes the EU’s own recent backtracking on green laws look minor. Some environmentalists argue it is comparable to U.S. President Donald Trump’s wholesale dismantling of environmental protections.

“The track the Carney government has taken on climate and environmental regulation has been a decisive move in the direction of the U.S.,” said Tim Gray, executive director of environmental non-profit Environment Defence. Carney, he said, “seems to be all in on fossil fuels.”

Keean Nembhard, a spokesperson for Canada’s Environment Minister Julie Dabrusin, told POLITICO the Carney government is “committed to fighting climate change and reaching net-zero by 2050 by taking a pragmatic and durable approach.”

“This includes building major clean energy projects across the country, driving mass electrification, and making significant investment in the low-carbon economy,” he said.

But Gray argued that Carney’s support for fossil fuels and weakening of environmental standards may complicate Canada’s attempts to forge closer ties with Europe, which has some of the world’s most stringent green laws.

Still, in Europe, Carney’s green image persists.

Last week, Belgian member of the European Parliament Saskia Bricmont gave expression to this faith in Carney’s commitment to climate issues when she called on him to lead a global push to put climate back on the agenda ahead of next month’s U.N. climate summit.

“Mr Carney … relaunch the fight against climate deregulation and for the restoration of biodiversity, and re-mobilize the international community around concrete, coordinated measures,” she said.

Carney’s green aura

Carney’s reputation as a climate champion is well earned. As governor of the Bank of England, he led a push among central bankers to take the economic risks of climate change seriously — memorably captured in his 2015 ‘Tragedy of the Horizon’ speech, in which he warned: “The catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors.”

In 2021, after he’d left the Bank of England, he became a United Nations special envoy on climate action and finance and launched a net-zero financial alliance with some of the world’s biggest banks.

But things changed dramatically when Donald Trump took back the White House, and Carney replaced fellow Liberal Justin Trudeau as Canada’s prime minister in 2025. At the time, Trudeau and his Liberals had been way behind in the polls, battered by Conservative leader Pierre Poilievre’s attacks on his climate policies — in particular an unpopular consumer carbon tax.

Carney’s first act as prime minister was to scrap that tax.

Following his surprise victory in the elections that April, Carney set about promoting Canada as an “energy superpower.” To the dismay of environmental groups, he supported the “Pacific Link,” an oil pipeline costing tens of billions of dollars, designed to carry Alberta crude to Canada’s Pacific coast for export to Asia.

He then pushed for thawing relations with Beijing in January, a not-so-subtle pitch to find a new crude oil client that isn’t the U.S. Germany, rushing to replace its dependence on Russian energy, signed a long-term agreement in July to buy Canadian liquefied natural gas from a proposed port in British Columbia, despite backlash from environmental and indigenous groups.

He also scrapped laws on electric vehicle adoption, dropped plans for an emissions cap on oil and gas companies, watered down an existing industrial carbon price and introduced legislation to weaken environmental permitting rules for big infrastructure projects, which critics dubbed the “bulldoze nature bill.”

A landmark moment, according to Gray, came in November 2025, when Carney signed a memorandum of understanding with the government of Alberta, Canada’s biggest oil-producing province. That document, which promised to turn Canada into a “global energy superpower,” contained a string of promises to promote oil and gas and water down federal climate laws.

So why the dramatic shift?

Carney, who has repeatedly positioned energy sovereignty as a bulwark against Trump’s economic aggression, offered his realpolitik response at an event in the heart of Alberta’s oil patch earlier this month.

“There’s a structural challenge of energy security and the existential challenge of climate change, and these challenges are forcing countries to think differently about where their energy comes from and on who they can rely on to supply it,” Carney said in Fort McMurray, Alberta on Oct. 1.

“Even under any plausible net zero scenario, the IEA [International Energy Agency] forecasts the world will still need tens of millions of barrels of crude a day. So the question is: who will emerge as the world’s trusted suppliers? It should be us. It must be Canada.”

Not black and white

Carney, to be sure, is no Trump. Unlike the U.S. president, he has retained his pro-climate rhetoric and promised to develop the country’s mining of critical minerals essential for the clean energy transition.

In May, he unveiled a national electricity strategy which aims to double Canada’s largely clean electricity grid by 2050 to meet soaring demand. “The path to net zero is electrification,” Carney said then.

In August, he announced C$10 billion in federal support for the Churchill Falls hydroelectric project in Newfoundland and Labrador, saying it will be the largest clean energy project in North America, capable of generating enough electricity to light up the equivalent of Canada’s three largest cities.

Nembhard, Environment Minster Dabrusin’s spokesperson, also pointed to new electricity transmission lines, electric vehicle subsidies and a C$2 billion plan to retrofit homes with heat pumps.

Canadian climate activist Alex Cool-Fergus said she does not think Carney “believes that oil and gas is the future,” but is simply being pragmatic about Canada’s economic reality.

“The electricity strategy that came out in May was incredibly important, and actually gives us a better idea of what his thinking is for the future,” she said.

Trudeau’s approach to climate change was “very much values-based, and it was about doing the right thing,” said Cool-Fergus. “I think that’s hit its limits. Carney’s approach makes more sense for the world of 2025-2026.”

The limits of the partnership

Hoekstra, the EU’s commissioner for climate, said he wants to deepen ties with Canada. “Given all the complications the world is facing, it is imperative to team up more closely with your closest partners,” he said. But he’s realistic about how far that relationship can go.

Hoekstra has ambitions of cementing the EU into a global network of economies with carbon pricing regimes. While he conceded nothing is “off the table,” he acknowledged linking the EU’s Emissions Trading System with Canada’s “quite different” version, which varies from province to province: “You’re talking about a completely different horizon, and that is not something we would attempt in the very short run.”

There are, however, other ways Hoekstra believes the EU and Canada can closely link on environmental issues.

“Doubling down, tripling down on electrification, on solar, on wind, on nuclear, on batteries,” he said, adding “that is one area that I think is potentially very fruitful for my portfolio.”

Another is critical raw materials, a key focus of this week’s summit.

Brussels is exploring ways for the European Investment Bank, the EU’s lending arm, to help finance the mining of Canadian mineral deposits that could supply the bloc with an alternative to Chinese-produced metals, with a framework agreement expected to be signed during the summit. Lithium, copper, nickel, and other key ingredients for electric vehicle batteries and clean energy technologies essential for decarbonizing Europe are abundant but often undeveloped all over Canada.

This week’s summit will also explore investing in infrastructure on Canada’s east coast to liquefy and ship Canadian gas to Europe, a move that could help the EU diversify its supply away from the U.S., which, along with Norway, has become Europe’s dominant supplier since it cut off Russian gas imports following the full-scale invasion of Ukraine.

Many EU member countries will welcome success on these goals. But Gray warns that closer ties with Canada could lead to deeper penetration by the country’s powerful fossil fuel lobby, which he described as a “major, major force.”

“They’ll be spending time trying to make sure the alignment with the EU is in a direction that favors them,” he said.

The EU’s lack of oil and gas resources — and, by extension, the absence of a powerful fossil fuel lobby — has kept climate policy relatively bipartisan in the EU. Could inviting a fossil fuel “superpower” into the fold as an “associate member” change that?

“That would depend very much on what is an ‘associate member,’” Dutch Climate Minister Stientje van Veldhoven-van der Meer said.

LONDON — Andy Burnham’s love affair with beans is well documented.

Asked what items he would stockpile in case of an emergency, the prime minister picked the store-cupboard staple, together with soup and Twiglets.

Now bean producers are screaming betrayal.

As part of a stream of “everyday fixes” aimed at easing the cost of living, Chancellor John Healey said the government would suspend tariffs on more than 100 products, including imported chocolate, marmalade and Burnham’s beloved baked beans.

An analysis of the list — published in full today — reveals that tariffs of 16% will be removed on an array of finished bean products imported from around the world, many of which are also manufactured in the U.K.

While the raw beans used to make products like baked beans are mostly imported, the U.K. boasts a major bean processing industry which food executives fear could now be undermined by exporters such as China and the U.S.

Karen Betts, chief executive of the Food and Drink Federation, said the budget did “nothing to ease the pressures food and drink manufacturers are under.”

“Instead, one of the chancellor’s flagship announcements, removing tariffs from some food and drink products, will have no meaningful impact on consumer prices,” Betts said. “But it will undermine British factories and their workers, grappling with much higher costs, producing the same products.

“The Treasury in particular has persistently failed to recognise the importance of food and drink manufacturing to jobs and prosperity the length and breadth of the U.K.,” Betts added.

Instead of making it easier to import rival products, Betts said the government should be addressing the “acute pressures” the sector is facing, including high energy costs and “overly complex” regulation.

A spokesperson for Princes Group, which produces Branston Baked Beans in the U.K., said removing tariffs on imported finished baked beans was “unlikely to have a meaningful impact on prices, particularly as there are currently no tariffs on the imported haricot beans used by U.K. manufacturers and no tariffs on EU imports.” 

“We believe measures that help address the higher costs of manufacturing food in the UK, particularly energy costs, would have a greater impact for both consumers and British businesses.”

According to the government, the move, together with existing tariff suspensions announced earlier this year, will reduce consumer costs by between £245 million and £595 million a year, saving households up to £21 on their food shop annually.

In response to a consultation on the changes, the government said it had taken the decision to exclude several products from the initial list “due to concerns about the impact on domestic production, developing countries, international considerations and other government policies.”

“The government recognises that for some remaining products, there may be some limited impacts on domestic producers of goods which will be able to be imported tariff-free for the specified period. However, the government considers the benefits of this to consumers, through reduced costs, outweigh those risks.”

The U.K. government did not respond to a request for comment.

SAN FRANCISCO — Billionaire opponents of California’s proposed wealth tax have spent more fighting it than they ever have on a political cause in the state, according to a POLITICO analysis.

A record $612 million from more than 70 current and former California billionaires is flooding this year’s state elections, nearly half of it for groups working to defeat Proposition 40, the wealth tax initiative on Tuesday’s ballot, POLITICO found.

The fight over Prop 40 has brought California’s wealthiest residents — many from its native tech industry — together in an unprecedented show of political coordination, the new data reveals. Tech leaders say the wealth tax has accelerated plans for broader political engagement this cycle, building networks that could be the foundation for future campaigns.

It’s a particularly striking display of unity from Silicon Valley’s notoriously hard-to-organize donor class. Google co-founder Sergey Brin is by far the well-funded opposition’s biggest benefactor, with former Google CEO Eric Schmidt, venture capitalist John Doerr, Stripe CEO Patrick Collison and crypto executive Chris Larsen also among those who have contributed the most dollars in trying to stop the billionaire tax.

The possibility of a tax on their assets has drawn more than $293 million from at least 30 California billionaires, the majority of whom made their fortunes in tech but otherwise span industries, from agriculture to real estate — as well as the political spectrum, from established Democratic megadonors to some Republican allies and first-time donors.

Frank Slootman, the billionaire board chair and former CEO of cloud data company Snowflake, said he only had a “moderate” interest in politics despite giving $5 million to an anti-Prop 40 group, arguing that the measure erodes private property rights and the state’s economic dynamism.

“This upends the most basic assumptions we have about being a taxpayer and a resident of a state,” said Slootman, who has no prior record of California campaign contributions. “I vote in most elections, that’s about it. This is not about politics for me — it is far more important than that.”

The other half of billionaires’ spending this year came largely from Tom Steyer, a rare billionaire endorser of Prop 40 who bankrolled his own failed gubernatorial bid — the most expensive primary campaign in state history.

Even longtime strategists who have worked for statewide candidates and California’s costly ballot battles struggled to find a historical parallel for the coordination or scale of billionaire spending against Prop 40.

Rob Stutzman, a Sacramento political consultant whose past campaigns have involved a billionaire gubernatorial candidate and record-breaking ballot spending over sports betting, said that Silicon Valley leaders see Prop 40 as an “existential threat to tech in California” and the innovation that has taken root in the region for decades.

“Having to defend against a direct assault is a more unifying principle,” Stutzman told POLITICO. “They’re known for their pet issues that are harder to organize their peers around, but you can circle the wagons to protect yourselves. There is nothing that focuses similar-situated people.”

Proponents of Prop 40 contend the measure is necessary to backfill federal health care cuts.

The last year billionaires in California came closest to spending at this level was 2010, when they dropped $147 million on state races and measures, according to POLITICO’s analysis — a total that’s just over half of what the current wealth tax proposal mobilized. Most of it was the result of billionaire Meg Whitman, a former CEO of eBay and Hewlett-Packard, self-funding her unsuccessful Republican campaign for governor.

Scott Ellis, a millionaire and Prop 40 supporter who formerly served as a senior director at HP, described the magnitude of billionaire spending to fend off the measure as “a completely different animal” than past examples of “a lot of money spent by a rich person to get themselves elected.”

“People with wealth and extreme wealth are getting much more brazen than they used to be,” Ellis told POLITICO. “These people have tremendous resources. They have an incredible range of choices to make, including choosing to oppose this kind of ballot measure.”

Representatives for several billionaire opponents of Prop 40, including Schmidt, Larsen and agricultural titan Stewart Resnick, declined to comment on POLITICO’s findings.

Others, like Doerr, referred POLITICO to Building a Better California, a new Brin-led political operation that has become the primary vehicle for billionaire money against Prop 40.

The group defended the importance of its cause, arguing the measure would “permanently devastate” the state tax base and budget while undermining the health care funding it’s intended to patch.

“We are fortunate to be supported by entrepreneurs and business leaders who have built their businesses and created hundreds of thousands of jobs here, and who share a deep commitment to advancing policies that will improve quality of life for all and protect the state’s economic, jobs, and innovation engine for generations to come,” Building a Better California spokesperson Abby Lunardini said in a statement.

Debru Carthan, vice president of the SEIU-United Healthcare Workers West union behind the billionaire tax, responded to the contributions, saying, “no amount of billionaire spending is going to intimidate us or turn us back.”

A reawakening

Tech leaders have told POLITICO that the wealth tax awakened a sleeping giant in California politics: their previously disengaged industry peers, who months ago suddenly started spending across the ballot to steer California in a more moderate, business-friendly direction. The threat injected the wider political organizing, some of which preceded the measure’s introduction, with a new sense of urgency.

“The tech community has wanted to become a bigger player in California politics,” said veteran Democratic strategist Steven Maviglio.

“They’re building an infrastructure, I think, for the long term because they’ve become a dominant player in our economy, and they now, after literally a decade of being hands-off, want to be very involved because they see the consequences,” Maviglio, who is working on a separate housing and environment-related ballot fight where Schmidt’s wife, Wendy Schmidt, has given $10 million, told POLITICO.

Earlier efforts to unify faltered amid strategic disagreements and overinflated fundraising promises. That was especially apparent in the push to rally Silicon Valley around San Jose Mayor Matt Mahan, a business-friendly candidate with a background in startups, during the California gubernatorial primary.

Although Building a Better California wasn’t spared its share of donor turmoil, an initial patchwork of opposition efforts eventually consolidated resources under the Brin operation’s strategy, devised with the help of veteran ballot-measure consultant Ned Wigglesworth.

The group also brought on fundraisers associated with California Gov. Gavin Newsom’s inner circle. Newsom has publicly opposed imposing a billionaire tax at the state level.

In addition to funding Prop 40 attacks, several billionaires claimed to have fled the state to avoid the tax. Brin, for example, registered to vote in Nevada. Because the one-time, 5% tax on assets would apply to billionaires who lived in the state as of Jan. 1, 2026, POLITICO’s analysis covers billionaires with recent California ties, based on information from Forbes, the progressive nonprofit Americans for Tax Fairness and news reports.

Some of those billionaires made their moves quietly, highlighting a split over how they should respond to the possibility of the tax passing.

“This has been a point of friction between me and some of my other billionaire friends,” Palmer Luckey, the billionaire founder of defense tech giant Anduril, said on a call with reporters this week. “They’ve said things like, ‘Palmer, you have to have solidarity for us. You can’t enable these really bad policies. If you stay and if you don’t leave, it’s going to show them that there’s no consequences.’”

Luckey, a vocal critic of the tax who hasn’t donated to the opposition campaign, added, “I’m planning on staying in California. I’m going to keep fighting it. I’m hoping that this doesn’t pass.”

Meta revealed a plan last week incentivizing CEO Mark Zuckerberg to stay near the company’s Silicon Valley headquarters after the longtime California resident told a special committee of his board he was considering leaving over the tax. He also hasn’t challenged Prop 40 through political contributions.

DoorDash CEO Tony Xu, who poured almost $3.5 million into trying to prevent the wealth tax, was one of three members on the special committee negotiating with Zuckerberg.

Behind the money

Brin is single-handedly putting $102 million behind Building a Better California as it campaigns to sink Prop 40. This year, he’s also backed unsuccessful runs by Republican Chad Bianco and the moderate Mahan in the gubernatorial primary, plus Republican Steve Hilton’s campaign for governor. Federally, he’s given close to $450,000 to the Republican National Committee.

But before this cycle, Brin had been a sporadic donor, gone dark for many years. His last disclosed political donation in California was in 2010 — for $200,000 to join other Silicon Valley leaders in opposing an ultimately defeated ballot measure that would’ve suspended a state climate law.

Some of the billionaire donors — Slootman, Roblox CEO David Baszucki, Robinhood co-founders Baiju Bhatt and Vlad Tenev, Figma CEO Dylan Field, fintech executive Max Levchin and software founder Andrew Karam — have no history of spending on California politics before this year, according to state campaign records.

Tenev said in a statement that he donated to Building a Better California to support one of two other measures the group has advanced, which is designed to invalidate Prop 40 and would prohibit new taxes on various forms of personal savings.

“Special taxes on retirement and unrealized investment gains run contrary to the intent of the investment vehicles that have helped millions of Americans build wealth for the long term,” the Robinhood chief executive said. “History shows us that taxes aimed at a few have often been extended permanently to include more taxpayers over time.”

Another Building a Better California donor, Doerr, on the other hand, was a pioneer in shaping how Silicon Valley engaged with politics and Washington. He co-founded TechNet in 1997, which launched a political action committee as a key part of its strategy. Today, the influential industry trade association manages both federal and state-level PACs on top of a vast bipartisan lobbying network, with Google, Stripe and Kleiner Perkins among its many corporate members.

The wealth tax has also brought former Sequoia venture capitalists, Michael Moritz and Doug Leone, onto the same side after they previously diverged on California’s partisan redistricting fight at the ballot last year. They spent $7.5 million and $100,000, respectively, on groups fighting Prop 40.

Leone is a prolific Republican donor who re-endorsed President Donald Trump in 2024, while Moritz has consistently criticized Trump and chided his supporters in Silicon Valley for making a mistake.

No less than a dozen of the billionaires spending on groups that oppose Prop 40 are current CEOs — including DoorDash’s Xu, Roblox’s Baszucki, Robinhood’s Tenev, Stripe’s Collison, Affirm’s Levchin, Schmidt of rocketmaker Relativity Space, Hemant Taneja of top venture capital firm General Catalyst, Field of design platform Figma and Parker Conrad of HR software provider Rippling.

Collectively, they’ve plowed at least $88 million into their cause.

Several more of the billionaires in POLITICO’s analysis chair influential companies and firms. The opposition effort has received $40 million from Doerr, the Kleiner Perkins venture capitalist; $17.5 million from Larsen at the crypto company Ripple; and $2 million from George Marcus at the Bay Area real estate titan Marcus & Millichap — to name a few.

Will they come together again?

Whether the campaign infrastructure built by billionaires and the tech industry for the midterms will endure is still an open question.

Other new tech-funded groups this cycle have promised to play the long game and framed their plans around at least a decadelong horizon. Building a Better California itself has also committed to sticking around for the foreseeable future.

California political observers point to the size of the Brin-backed operation, as well as its decision to focus on additional environmental and housing measures, in predicting it won’t stop after the election.

Still, the unprecedented nature of their mobilization raises questions about what cause would be able to activate so many of these individuals again. Donors and advisers to Building a Better California previously clashed over whether spending on non-wealth-tax issues, such as environmental policy, could jeopardize the group’s success.

In the past, “if you look at those big dollar campaigns, ballot measure campaigns, those were funded in general by an industry,” said Jim Ross, a Bay Area-based Democratic consultant. “Wherein this, it’s a bunch of individuals, very wealthy individuals, but they don’t necessarily have any commonality other than they don’t want to be taxed.”

“When you have a group of wealthy people all putting money into this, a lot of the challenge is going to always be: How do you manage that coalition? How do you keep everybody moving in the same direction?” he added.

One ready answer is a revived wealth tax effort.

Last week, Rippling CEO Conrad said in a social media exchange with Silicon Valley Rep. Ro Khanna, whose early support for the wealth tax alienated some of his original tech backers, that he “absolutely cannot afford to stay” in California — reasoning the measure may soon be followed by another one-time tax in the next election.

Slootman made a similar calculation.

“In a one-party state with super majorities in both chambers, we are at risk for everything we own,” he said. “We are hunted animals in this state. They will be at it again in two years.”

Rosmery Izaguirre contributed to this report.

About this analysis

POLITICO’s analysis compiled records from the California secretary of state for 142 California billionaires that have contributed to state campaign committees, including 30 who had given to the following committees opposing Proposition 40: Building a Better California, Californians Against Tax Increases and Golden State Promise. Reporters reviewed donation records to verify names and employers matched with the billionaires who live in the state, as well as contacted each donor. Donations are as of Oct. 26.

Forbes estimated the wealth of the persons included in this analysis. Because billionaires often own properties in multiple states, we relied on Forbes to identify each person’s residence and supplemented with further data provided by the progressive nonprofit Americans for Tax Fairness. We included people who have recently left the state, including cases when they said they were leaving to avoid the potential wealth tax.

BRUSSELS — EU countries have dropped the idea of offering Canada “associate member” status in the 27-member bloc, opting instead for softer language promising “ever closer association” ahead of a landmark EU-Canada summit, according to the latest version of the draft statement, seen by POLITICO.

A group of countries including Germany, Greece and France all objected to mentioning associate membership in a joint EU-Canada statement to be issued in Montreal, the diplomats said.

European Commission President Ursula von der Leyen had originally proposed “associate membership” for Canada in her State of the European Union speech in September, catching some EU countries off-guard.

A previous draft of the joint statement had read that the EU and Canada would “work to define by the 2027 EU-Canada Summit the concept of Associate Member that will reflect, through this even closer association, our common endeavour and cooperation towards our shared goals of prosperity, economic security and strategic autonomy.”

In the final version, the text reads: “We will create an even closer association between Canada and the EU… and work to define by the 2027 EU-Canada Summit the concept of an ever closer association of Canada to the EU, short of full membership itself.”

Later in the statement, the language changes from “even closer” to “ever closer.” The text still needs final approval. EU countries have a deadline of 6 p.m. to raise objections.

While countries disagree over the wording to describe the relationship, Brussels is not softening its offering to Canada of a vastly expanded partnership.

“The good news is it doesn’t matter about specific names or nomenclature,” Canadian Prime Minister Mark Carney said Tuesday. “What matters is the difference that it will make to lives of Canadians.”

This story has been updated.

LONDON — Britain’s top finance minister reduced his fiscal breathing space and slapped fresh taxes on banks Wednesday as he tried to slash energy costs and show that his boss is homing in on the cost of living.

Chancellor John Healey used the first government budget under Prime Minister Andy Burnham to promise a £100 energy payment for millions of Brits over the winter — and repeatedly pointed to uncertainty stemming from war in the Middle East to justify the move.

“We did not want this war,” Healey said. “We rejected calls from the leader of the opposition [Tory Leader Kemi Badenoch] to jump two-footed into it. It’s a war that has driven up costs on British families and businesses.”

Around 20 million households will be targeted for the energy payment “directly into people’s bank accounts to deal with rising energy bills,” Healey said. The scheme comes with a £2.6 billion price tag — and will arrive against a grim backdrop. Annual household energy bills are expected to rise by around £450 in January because of higher global gas prices.

Since coming to power as a self-styled “cost-of-living government” earlier this year, Burnham and Healey have tried to offer a raft of targeted, small-scale policy interventions to show that the government has a grip on rising costs — without spooking the financial markets.

Analysis of the budget by the U.K.’s Office for Budget Responsibility watchdog on Wednesday laid bare the scale of that challenge.

The OBR expects continued “weak growth” in living standards — with real household disposable income for Brits expected to be just 1 percent higher by the end of this decade than it was in 2020.

The watchdog’s David Miles told journalists at a briefing in London that a series of shocks — including Brexit, Covid, and the war in Iran — had led to a “dismal period in British economic history.”

Banks raided

Other measures unveiled by Healey Wednesday include the scrapping of standing charges on Brits’ gas bills, a hike in the minimum wage and a new tax-free allowance for poorer pensioners.

On the revenue-raising side, Healey has opted to target Britain’s banks — albeit by slightly less than feared in the sector.

While praising their “huge contribution” to the economy, the chancellor will hike an existing surcharge on bank profits by three percentage points, taking it to 6%. The increase will last for 15 months starting in January.

The tax on the banks was widely expected despite major pushback from Britain’s powerful financial sector. But it has been pared back compared to previous reports that the surcharge could hit 8%, with accompanying documents vowing that the measure “will not be extended.”

Bank share prices, including big British lenders like Lloyds and Barclays, were initially buoyed by the reduced sweep of the raid.

Healey has in part funded his plans by lowering his amount of fiscal headroom — the buffer between his projected tax and spending plans and the limits set by the government’s own fiscal rules.

The Office for Budget Responsibility watchdog predicts Healey’s fiscal headroom will fall to £15 billion by 2029/30. A March projection from the OBR put that figure at £24 billion.

The buffer is then projected to climb back to £22 billion in 2030/31. That was broadly in line with City forecasts. “That is what a buffer is for. Use it when you need it, rebuild it when you can,” Healey argued.

Badenoch: UK overspent, overborrowed, overtaxed

The broader U.K. economic picture is mixed. GDP growth this year is now forecast at 1.2% – revised up from 1.1% at the March statement.

But growth is now projected to fall to 1% in 2027, down from the 1.6% predicted in March. It is projected to return to 1.6% in 2028 — in line with the previous OBR forecast.

Inflation is meanwhile expected to rise to 3.75% in early 2027, the Office for Budget Responsibility said – higher than its last forecast in March. The watchdog cautioned that the picture on price rises remains “highly uncertain,” and that hikes could be sharper.

Healey has opted to reduce the scale of tax rises planned by his predecessor Rachel Reeves, according to documents published alongside the budget. There are now some £7bn in net tax rises planned for the final year of the forecast period, compared to £26bn on Reeves’ plans.

Opposition parties were quick to charge Healey with a lack of ambition.

Conservative Leader Kemi Badenoch said: “We are overspent, overborrowed, overtaxed, and drowning in an out-of-control welfare system. And this is his answer: it is simply not enough, not good enough, not strong enough, not bold enough.”

Badenoch argued Healey had “delayed until tomorrow difficult decisions he should have taken today” in a bid to leave Burnham — who passed his first 100 days in office this week — “the option of an early general election open, putting his party’s interests before the country’s.”

Reform economics spokesperson Robert Jenrick branded the statement “an exercise in fiddling while the economy burns” and a “nothing-burger budget.” The Liberal Democrats wanted that Healey’s continuation of perpetually-frozen income tax thresholds would create a “massive stealth tax.”

This story was updated with further reporting. Dan Bloom and Elliot Gulliver-Needham contributed.

LONDON — U.K. Chancellor John Healey has moved to crack down on a loophole exploited by overseas sellers to avoid paying VAT. 

“I will strengthen the requirements for online marketplaces so that sellers cannot avoid paying VAT when they sell online,” Healey said in Wednesday’s budget.

From October 2027, online marketplaces like Amazon, eBay and Temu will be responsible for collecting tax owed by all retailers with an annual turnover of more than £90,000 through a single marketplace.

Previously, these marketplaces only had to collect VAT on behalf of overseas sellers and not domestic ones. Some overseas sellers then exploited this gap to avoid paying the tax by registering as U.K. based companies.

The government plans to reinvest the savings made from this policy into the high street through reductions to business rates.

The government launched an eight-week consultation into extending VAT online marketplace liability in June, after mounting pressure from retailers. 

Amazon estimated that up to £3.2 billion of sales across online retailers in the U.K. are made by sellers avoiding VAT collection — costing the Treasury hundreds of millions each year in lost revenue. 

The move to close the loophole brings Britain closer to approaches adopted in Switzerland. The European Commission is also due to review its marketplace VAT collection rules next year. 

Monica Ariño, director of U.K. public policy at Amazon, said: “This is an important step towards closing a loophole exploited by bad actors and creating a level playing field for the thousands of UK small businesses that sell in our store. We look forward to continuing to work with HM Treasury and HMRC to make the changes effective, practical and fair.”

This story has been updated

LONDON — John Healey wants to keep his debut budget low-key — but he’s also got to show the British public his boss really does feel their pain.

The chancellor delivers the first financial statement of the Andy Burnham era Wednesday. The pitch? “Breathing space for today” mixed with some “fresh hope for the future.”

But with war in Iran driving up costs worldwide, government borrowing at its highest level in a year, and businesses warning they’re taxed to the max, Healey is up against it.

Here’s how POLITICO’s team of reporters will be poring over the big fiscal moment, unveiled at 12.30 p.m. U.K. time Wednesday.

U.K. Political Editor Dan Bloom

I’ll flip straight to the big table two-thirds of the way through the ‘red book,’ where Treasury officials list the total tax rises and spending cuts, and then the “headroom” against Healey’s fiscal rules in the executive summary.

The briefing suggests these numbers will be smaller than the £26 billion in tax rises and £23.6 billion in headroom former Chancellor Rachel Reeves notched up in March this year.

The Treasury has turned this into its comms strategy, pointing to “everyday fixes” and non-tax measures like scrapping business red tape. But these numbers will also show how Donald Trump’s war in Iran has reined in Burnham’s ambitions.

And they are indicative of something else — the budget just isn’t the main event this time. In the next seven weeks or so we’re expecting [former minister] Alan Milburn’s review of the benefit system, a U.K.-EU summit, a “10-year plan” and a white paper on “rewiring the state.”

Then next year is the spending review. That’s when the really hard choices will come — and the budget will give us a sign of how hard, since it will map out a path for departmental spending over the next few years.

U.K. Political Correspondent Sam Blewett

Andy Burnham’s team has been speaking a lot about “everyday fixes” — cheapo policies that can rectify real-life niggles. 

Headphone dodgers? You’re fined. Being ripped off by parking fines? We’ve got your backs. Balking at the cost of the supermarket shop? Gone are the tariffs on your gherkins.

That will buy the government a fair amount of goodwill, building a sense that the government isn’t entirely a useless beast being buffeted by global horror shows. But it’ll only go so far.

Healey is under pressure to show bold action on what really matters too — actual interventions that bring down the cost of living. We know already there will be support for household energy bills, a fuel duty freeze, support for pensioners and a hike to the minimum wage. All eyes will be on whether Healey has any more surprises on this front.

As costly as any support is for the exchequer, will it all pale in comparison to the effects of the Strait of Hormuz-sealing war with Iran? This is a self-declared “cost of living government” after all.

First, I’ll scour watchdog the Office for Budget Responsibility’s forecasts to see where the semi-official number crunchers reckon real household disposable income is headed. Then the analysts at the Institute for Fiscal Studies and the Resolution Foundation will provide more insight.

After that, the voices that really matter will be those sitting down to ever-costlier dinner, nursing pricy pints and rolling their eyes at the petrol pumps. Will this budget give Brits enough reason to believe Burnham’s new government is a force for good, trying to ease the pain? Or will they deem the new-look administration just the same old ineffective bureaucrats who need sweeping away in favor of a more radical response?

Senior Foreign Correspondent Esther Webber and U.K. Defense Reporter Mason Boycott-Owen

The number one thing we’ll be looking out for in today’s budget is how exactly Healey — who quit as defense secretary in the dying days of Keir Starmer’s government over exactly this issue — tries to demonstrate he is raising defense spending against a tough backdrop.

The chancellor has tried to manage expectations for the Ministry of Defence at the budget pretty closely, initially stating that he would only seek to cover a £4.7 billion pound shortfall in its already-unveiled Defence Investment Plan.

In recent weeks, however, the Treasury has suggested he could do more to show the U.K. is moving towards spending 3% of GDP on defense, something Healey sees as an important marker on the way to meeting the NATO target of 3.5%.

Media reports leading up to Wednesday suggest an increase will come from money funneled into the British Business Bank and National Wealth Fund.

But could he have something else in his back pocket? Healey is well aware of the potential for awkward questions about his commitment to follow through on the promises he made just four months ago that he said were crucial to U.K. security, now that he’s in charge of the money.

Financial Services Reporter Eleanor Myers

A hike in bank taxes is all but inevitable in today’s budget – but the City of London will be nervously watching how high the increase goes. Along with the lenders, I’ll be looking out for how much taxes are raised, whether any changes are temporary, and whether the City — Britain’s financial powerhouse — gets anything in return.

The easiest move for Healey is to increase the surcharge banks pay on top of corporation tax. That currently stands at 3%, after Conservative Chancellor Jeremy Hunt reduced it from 8% in 2023 to account for higher corporation taxes. Healey could simply reverse the surcharge to 8%, which would be unpopular with the banks and might not even go far enough for campaigners: the Trades Union Congress has called for an increase to 16%.

I’ll also be closely watching for how the bond markets react to the first budget under Burnham. Despite the prime minister describing Britain as “in hock” to the bond markets before he took office, odds are on for a “boring” budget, without any huge spending commitments that might spike borrowing costs.

But any cautious policy changes designed to placate the bond market will have to be tempered alongside demands from the Labour Party. It’s a tricky balance, and Labour MPs showed under Keir Starmer that they were willing to rebel when it mattered.

Senior U.K. Energy Correspondent Charlie Cooper

A sharp, painful spike in energy bills is coming for Britain; at this budget we’ll find out how much power Healey and Burnham have to help.

The latest energy price cap forecasts are brutal. Energy firms expect average, annual household bills to rise by more than £450 in January. They could go even higher in April. Why? Mainly because of gas. The fallout from the U.S.-Israeli war with Iran has sent wholesale prices soaring to levels not seen since December 2022.

Healey knows how bleak things look, but he may not have the fiscal firepower to offer much help. Burnham has hinted at removing gas standing charges from bills, which could save an average household a modest £27, according to one estimate. Meanwhile, payments to around 6 million low-income households — the Warm Homes Discount — are likely to get a top-up of between £100 and £150.

Businesses, meanwhile, could get details of a 10-year plan to bring their energy costs into line with European competitors, according to two people familiar with budget preparations.

But with the cost of living and cost of doing business set to rise so high, will that be it?

There’s “strong awareness” inside government “of how bad it will get,” said one senior government official. Unfortunately, they added, there are “not the pockets deep enough to do all the things we might like to do.”

Elsewhere, we’ll be watching closely to see whether net zero schemes — like the rollout of electric heat pumps — could face cuts to cover shortfalls in defense spending. 

Technology Reporter Joseph Bambridge

Healey put AI and innovation at the heart of his growth plan in a pre-budget speech back in September.

In that vein, the government has trailed a £600 million spending package to protect the U.K. from AI risks while growing its own share of the sector, calling it a “distinctively British” approach to mitigating risks from the technology while capturing the benefits.

The question now is whether more measures to support the U.K.’s tech and AI sector will come on Wednesday, with trade groups calling for bold moves to lower energy costs, tackle energy and planning delays, and help firms invest in AI and upskill workers.

Startups are also hoping for tax relief and further reforms to regulation and procurement rules. A relief for founders who re-invest their earnings in the U.K. has been a particular demand from the startup community, which has already bagged a win after Healey ruled out raising capital gains tax.

AI is also likely to play a significant role in the government’s plans to make Whitehall more efficient, as it did under Reeves.

The sector is also closely watching how the chancellor plans to meet his defense spending targets, in the hopes that drone makers and military tech firms might benefit from the uplift.

Trade Reporter Caroline Hug

I’m looking out for the chancellor’s VAT crackdown on foreign sellers, who register as U.K. based companies to avoid paying the tax. Healey is expected to make online marketplaces like Amazon, eBay and Temu responsible for collecting tax owed by all retailers.

We’re also waiting to see whether the government has more information on its de minimis crackdown, including whether it will introduce a handling fee for small packages below £135. The EU already has one in place.

Finally, we’ll be looking out for any more detail on the government’s suspension of tariffs on more than 100 food, drink, fuel and fertilizer products.