LONDON — Keir Starmer’s keeping Britain out of the war in Iran — but he can’t duck the conflict’s grave economic consequences. In a sign of growing fears about the impact of the war on Britain, the prime minister chaired a rare meeting of the government’s emergency COBRA committee Monday night, joined by senior ministers and Governor of the Bank of England Andrew Bailey. Starmer’s top finance minister, Rachel Reeves, will update the House of Commons on the economic picture Tuesday, as an already-unpopular administration worries that chaos in the Middle East is shredding plans to lower the cost of living and get the British economy growing. For Starmer’s government — headed for potentially brutal local elections in May — the crisis in the Gulf risks a nightmare combination of a rise in energy prices, interest rates, inflation and the cost of government borrowing that threatens to undermine everything he’s done since winning office. Economists are now warning that even if Donald Trump’s promise of a “complete and total resolution of hostilities” with Iran were to bear fruit, the effects on the British economy could still last for months. Already there are signs of a split within Starmer’s party over how to respond. Labour MPs want the government to think seriously about action to protect households — but Starmer and Reeves have long talked up the need for fiscal responsibility, and economics are warning that there’s little room for maneuver. Fuel prices displayed at a Shell garage in Southam, Warwickshire on March 23, 2026. | Jacob King/PA Images via Getty Images Jim O’Neill, a former Treasury minister who served as an adviser to Reeves, told POLITICO the government should “not get sucked into reacting to every external shock” and “concentrate on boosting our underlying growth trend.” WHY THE UK IS SO HARD HIT Just before the outbreak of war, there was reason for Starmer and Reeves to feel quietly optimistic about the long-stagnant British economy. The Bank of England had expected inflation to fall back sustainably toward its two percent target for the first time in five years, giving the central bank the space to carry on cutting interest rates.  With the Iran war in full flow, it was forced to rewrite those forecasts at the Monetary Policy Committee’s meeting last week — and now sees inflation at around 3.5 percent by the summer. The U.K. is a big net importer of energy and also needs constant imports of foreign capital to fund its budget and current account deficits. That’s made it one of first targets in the financial markets’ crosshairs. The government’s cost of borrowing has risen by more than half a percentage point over the last month. That threatens both the real economy and Reeves’ painstakingly-negotiated budget arithmetic. Higher inflation means higher interest rates and a higher bill for servicing the government’s debt: fiscal watchdog the Office for Budget Responsibility estimates a one-point increase in inflation would add £7.3 billion to debt servicing costs in 2026-2027 alone. The effect on businesses and home owners is also likely to be chilling. Britain’s banks are already repricing their most popular mortgages, which are tied to the two-year gilt rate. Hundreds of mortgage products were pulled in a hurry after the MPC meeting last week, something that will hit the housing market and depress Reeves’ intake from both stamp duty and capital gains. Duncan Weldon, an economist and author, said: “Even if this were to stop tomorrow, the inflation numbers and growth numbers are going to look materially worse throughout 2026. “If this continues for longer… it’s an awful lot more challenging and you end up with a much tougher budget this autumn than the government would have been hoping to unveil.” DECISION TIME The U.K.’s economic plight presents an acute political headache for Starmer, as he faces a mismatch between his own party’s expectations about the government’s ability to help people and his own scarce resources. Energy Secretary Ed Miliband has promised to keep looking at different options for some form of assistance to bill-payers hit by an energy price shock. A pain point is looming in July, when a regulated cap on energy costs is due to expire and bills could jump significantly. One left-leaning Labour MP, granted anonymity to speak frankly, said: “They [ministers] need to be treating this like a financial crisis. They need plans for multiple scenarios with clear triggers for government support.” A second MP from the 2024 intake said “it’s right that a Labour government steps in, particularly to help the most vulnerable.” Foreign Secretary Yvette Cooper and Chancellor of the Exchequer Rachel Reeves at the first cabinet meeting of the new year at No. 10 Downing St. on Jan. 6, 2026 in London, England. | Pool photo by Richard Pohle via Getty Images This demand for action is being felt in the upper echelons of the party too, as Culture Secretary Lisa Nandy recently argued Reeves’ fiscal rules — seen as crucial in the Treasury to reassure the markets — may need to be reconsidered if prices continue to rise and a major support package is needed.  One Labour official said there are clear disagreements with Labour over how to go about drawing up help and warned “the fiscal approach is going to be a massive dividing line at any leadership election.” The same official pointed to recent comments by former Starmer deputy — and likely leadership contender — Angela Rayner about the OBR, with Rayner accusing the watchdog of ignoring the “social benefit” of government spending. Despite the pressure, ministers have so far restricted themselves to criticizing petrol retailers for alleged profiteering, and have been flirting with new powers for markets watchdog the Competition and Markets Authority. The government said Reeves would on Tuesday set out steps to “help protect working people from unfair price rises,” including a new “anti-profiteering framework” to “root out price gouging.” But Starmer signaled strongly in an appearance before a Commons committee Monday evening that he was not about to unveil any wide-ranging bailout package, telling MPs he was “acutely aware” of what it had cost when then-Prime Minister Liz Truss launched her own universal energy price guarantee in 2022.  O’Neill backed this approach, saying: “I don’t think they should do much… They can’t afford it anyhow. The nation can’t keep shielding people from external shocks.” Weldon predicted, however, that as the May elections approach and the energy cap deadline draws nearer, the pressure will prove too much and ministers could be forced to step in. The furlough scheme rolled out during the pandemic to project jobs and Truss’s 2022 intervention helped create “the expectation that the government should be helping households,” he said. “But it’s incredibly difficult. Britain’s growth has been blown off-course an awful lot in the last 15 years by these sorts of shocks.” Geoffrey Smith, Dan Bloom, Andrew McDonald and Sam Francis contributed to this report.

The Bank of England warned it may have to take a tougher line on interest rates as the spike in energy prices caused by the U.S.-Israeli war on Iran pushes inflation higher. “Monetary policy cannot reverse this shock” to world energy supply, Governor Andrew Bailey said in a statement on Thursday, after the Monetary Policy Committee voted unanimously to leave the Bank rate unchanged at 3.75 percent. “Monetary policy must, however, respond to the risk of a more persistent effect on U.K. consumer price inflation,” Bailey added. The Bank had only last month declared victory over inflation, which has been above its 2 percent target for over four years. However, its latest analysis suggests headline inflation will rebound back above 3 percent in the next three months and could add as much as 0.75 percentage points to the consumer price index over the summer, as higher fuel bills percolate through the economy. “The MPC is alert to the increased risk of domestic inflationary pressures through second-round effects in wage and price-setting, the risk of which will be greater the longer higher energy prices persist,” the Bank stressed. However, it also acknowledged that the energy price spike is likely to hurt economic growth, and that it is “assessing the implications for inflation of the weakening in economic activity that is likely to result from higher energy costs.” Until the U.S. and Israel attacked Iran, most analysts had predicted that a slowing economy and growing prospects of easing inflation would allow the MPC to cut rates at Thursday’s meeting. However, the invasion and the ensuing turmoil in world commodity markets have turned the situation on its head, by closing a vital chokepoint at the mouth of the Persian Gulf, through which irreplaceable volumes of oil, gas and fertilizer pass every day. As a result, the Bank warned that there is now a real threat of higher energy prices causing a broader rise in prices across the economy. Food prices face a similar risk. ALREADY OUT OF DATE? The situation is changing so fast that the Bank’s latest forecasts could already be out of date. The Bank said they were based on the situation as of March 16, when Brent oil futures were only at $100 a barrel. But a succession of strikes on key energy installations around the Persian Gulf since then has already pushed prices up by another 12 percent. “The news flow around the war in Iran looks more worrying for global markets with each passing day,” Deutsche Bank strategist Jim Reid said in a note on Thursday. Analysts argued ahead of the meeting that the Bank would prefer to err on the side of keeping policy tight in the face of the new risks, given lingering concerns about its credibility due to its slow response to the inflation shock in 2022. Inflation peaked at 11.1 percent back then, the highest rate posted by any major economy. The Bank’s change in outlook will make life doubly uncomfortable for the Labour government, which had hoped that its efforts to close the U.K. budget deficit would be rewarded with lower inflation and lower interest rates. Instead, the government’s key 10-year borrowing costs have risen by nearly half a percentage point since the war started, and they leaped again on Thursday, first in response to Iranian attacks on a Qatari gas field, then to the BoE’s statement. At 4.89 percent, the 10-year gilt yield is now at its highest in 15 months. The pound, by contrast, was steady against the dollar and euro after the decision. The Office for Budget Responsibility earlier this month already cut its forecasts for U.K. growth this year. That implies lower tax receipts which, combined with higher borrowing costs, threaten a new two-way squeeze on Chancellor Rachel Reeves’ fiscal arithmetic, less than six months after she had to raise taxes sharply at her latest budget.

Netflix co-CEO Ted Sarandos arrives in Brussels on Tuesday with a clear message for EU regulators ahead of a looming review of Europe’s streaming rules: Don’t overcomplicate them. In an exclusive interview with POLITICO, Sarandos said Netflix can live with regulation — but warned the EU not to fracture the single market with a patchwork of national mandates as officials prepare to reopen the Audiovisual Media Services Directive. “It doesn’t make it a very healthy business environment if you don’t know if the rules are going to change midway through production,” Sarandos said. He also warned regulators are underestimating YouTube as a direct competitor for TV viewing, too often treating it like a social media platform with “a bunch of cat videos” than a massive streaming rival. Sarandos’ effort to win over European regulators comes soon after the collapse of Netflix’s bid to buy Warner Bros. Discovery — but Sarandos maintained that the political dynamics around the deal only “complicated the narrative, not the actual outcomes.” He added that there was no political interference in the deal, and he shrugged off President Donald Trump’s demand to remove Susan Rice, a former national security adviser under President Barack Obama, from the Netflix board. “It was a social media post,” Sarandos said. “It was not ideal, but he does a lot of things on social media.” This conversation has been edited for length and clarity. What’s bringing you back to Brussels now? Well, we have ongoing meetings with regulators around Europe all the time. We have so much business in Europe, obviously, and so this has been on the books for quite a while. Can you give me a little bit of a sense of who you’re meeting with, and what is the focus? I think one of the things to keep in mind is that we’ve become such an important part, I’d think, of the European audiovisual economy. We’ve spent, in the last decade, over $13 billion in creating content in Europe. It makes us one of the leading producers and exporters of European storytelling. First of all, we’ve got a lot of skin in the game in Europe, obviously. We work with over 600 independent European producers. We created about 100,000 cast and crew jobs in Europe from our productions. So we talk to folks who are interested in all the elements of that — how to keep it, how to maintain it, how to grow it and how to protect it. In terms of regulation in the EU, Netflix is governed by a directive here. The commission is looking to reopen that this year. There seems to be a sense here from regulators that the current rules don’t create a level playing field between the broadcasters, the video on demand, the video sharing, and so they may look to put more requirements on that. How steeped in the details are you there? And how would Netflix react to more rules put on Netflix at this moment? Well, first and foremost, we comply with all the rules that apply to us in terms of how we’re regulated today. We have seen by operating around the world that those countries where they lean more into incentives than the strict regulatory scheme, that the incentives pay off. We’ve got multibillion dollar investments in Spain and the UK, where they have really leaned into attracting production through incentives versus regulatory mandates, so we find that that’s a much more productive environment to work in. But the core for me is that obviously they’re going to evolve the regulatory models, but as long as they remain simple, predictable, consistent — the single market, the benefit of the single-market is this — as long as these rules remain simple, predictable and consistent, it’s a good operating model. I think the more that it gets broken up by individual countries and individual mandates, you lose all the benefits of the single market. There’s a lot of talk in Brussels right now about simplification, getting rid of a lot of red tape. Do you think the rules that you’re governed by would benefit from a similar kind of effort to simplify, of pulling back on a lot of these patchwork of rules, even at the EU? Look, I think it doesn’t make it a very healthy business environment if you don’t know if the rules are going to change midway through production, so for me, having some stability is really important, and I understand that we’re in a dynamic market and a dynamic business, and they should reflect the current operating models that we’re in too. We want to work closely with the regulators to make sure that what they’re doing and what we’re doing kind of reflect each other, which is trying to protect the healthy work environment for folks in Europe. When you meet with regulators here, is there a message you’re going to be delivering to them or what do you want them to walk away with in terms of the bottom line for you in terms of your business at this moment in the EU? I think some things are well understood and other things I think are less so. I think our commitment to European production is unique in the world. Both in our original production but also in our investment in second right’s windows that we pre-invest in films that compel production. Tens of millions of dollars’ worth of film production is compelled by our licensing agreements as well beyond our original production. And the fact that we work with local European producers on these projects — I think there’s a misconception that we don’t. And the larger one is the economic impact that that brings to Europe and to the world with our original program strategy that supports so many, not just the productions themselves but even tourism in European countries. Think about President [Emmanuel] Macron pointing out that 38 percent of people who went to France last year cited “Emily in Paris” as one of the top reasons they went. We’ve seen that in other countries. We saw it in Madrid with the “Casa de Papel.” And so it’s one of those things where it really raises all boats across the economies of these countries. Regulators often focus on the competition between streaming services, but as you know very well, younger audiences are spending more time on platforms like YouTube. Do you think policymakers are underestimating that shift? Would you like to see that taken into account more in the regulatory landscape? One of the things that we saw in recent months with the Warner Brothers transaction is a real deep misunderstanding about what YouTube is and isn’t. YouTube is a straightforward direct competitor for television, either a local broadcaster or a streamer like Netflix. The connected television market is a zero-sum screen. So whichever one you choose, that’s what you’re watching tonight. And you monetize through subscription or advertising or both, but at the end of the day, it’s that choosing to engage in how you give them and how, and how that programming is monetized is a very competitive landscape and it includes YouTube. I think what happens is people think of YouTube as a bunch of cat videos and maybe some way to, to promote your stuff by putting it on there for free. But it turns out it is a zero-sum game. You’re going to be choosing at the expense of an RTL or Netflix. I think in this case it’s one of these things where recognizing and understanding that YouTube is in the same exact game that we are. Do you feel like you’re on different planes though, in the eyes of regulators at this moment? I don’t think that they see them as a direct competitor in that way. I think they think of that as an extension of social media. And the truth is when we talk about them as a competitor, we’re only talking about them on the screen. I’m not talking about their mobile usage or any of that. You know, about 55 percent of all YouTube engagement now is on the television through their app. So to me, that’s the thing to keep an eye on. As you get into this, it’s a pretty straightforward, competitive model and we think probably should have a level playing field relative to everybody else. Who do you view as Netflix’s main competitors today? Look, our competitive space is really the television screen. When people pick up the remote and pick what to watch, everyone is in that mix. We identified YouTube — this isn’t new for us — we identified YouTube as a competitor in the space 10 years ago, even before they moved to the television. And I think, for the most part, TikTok forced their hand to move to the television because they were kind of getting chased off the phone more or less by TikTok. I think that’s the other one that regulators should pay a lot of attention to is what’s happening with the rise of TikTok engagement as well. It’s not directly competitive for us, but it is for attention and time and to your point, maybe the next generation’s consumer behavior. Last question on regulation: With the EU looking at the rules again, there’s a tendency always to look to tinker more and more and do more. Is there a point at what regulation starts affecting your willingness to invest in European production? Well, like I said, those core principles of predictability and simplicity have really got to come into play, because I think what happens is, just like any business, you have to be able to plan. So, if you make a production under one set of regs and release it under another, it’s not a very stable business environment. The topic that dominated a lot of your attention in recent months was obviously the merger talks with Warner Brothers Discovery. I know you’ve said it didn’t work for financial reasons. I want to ask you a little bit about the political dynamics. How much did the political environment, including the Susan Rice incident, how much did that complicate the calculus in your mind? I think it complicated the narrative, not the actual outcomes. I think for us it was always a business transaction, was always a well-regulated process in the U.S. The Department of Justice was handling it, everything was moving through. We were very confident we did not have a regulatory issue. Why would that be? It’s because it was very much a vertical transaction. I can’t name a transaction that was similar to this that has ever been blocked in history. We did not have duplicated assets. We did have a market concentration issue in the marketplace that we operate in. And I think that’s the feedback I was getting back from the DOJ and from regulators in general, which was, they understood that, but I do think that Paramount did a very nice job of creating a very loud narrative of a regulatory challenge that didn’t exist. But looking back to those early days of the merger discussions, did you have an appreciation for what might follow in terms of that complicated narrative? Yeah. Look, I think it opens up the door to have a lot of conversations that you wouldn’t have had otherwise, but that’s okay. A lot great things came out of it, the process itself. I would say in total, we had a price for where we thought this was good for our business. We made our best and final offer back in December and it was our best and final offer. So that’s all. But what came out a bit that’s positive is, we’ve had really healthy conversations with folks who we hardly ever talked to, theater operators, as a good example. I had a great meeting in February with the International Union of Cinemas, and the heads from all the different countries about what challenges they have, how we could be more helpful, or how they could be helpful to us too. I think we’ll come out of this with a much more creative relationship with exhibitions around the world. And by way of example, doing things that we haven’t done before. I don’t recommend testifying before the Senate again, but it was an interesting experience for sure. Probably a good learning experience. Hopefully not in the future for anything that you don’t want to be there for, but yes. Yeah, exactly. We’ve always said from the beginning, the Warner transaction was a nice-to-have at the right price, not a must-have-at-any-price. The business is healthy, growing organically. We’re growing on the path that we laid out several years ago and we didn’t really need this to grow the business. These assets are out there through our growth period and they’re going to be out there and for our next cycle growth as well and we’ve got to compete with that just like we knew we had to at the beginning. This was I think something that would fortify and maybe accelerate some of our existing models, but it doesn’t change our outcome. Are there regrets or things you might have wished you’d done differently? I mean honestly we took a very disciplined approach. I think we intentionally did not get distracted by the narrative noise, because we knew, we recognized what it was right away, which is just narrative noise. This deal was very good for the industry. Very good for both companies, Warner Brothers and Netflix. Our intent was obviously to keep those businesses operating largely as they are now. All the synergies that we had in the deal were mostly technologies and managerial, so we would have kept a big growth engine going in Hollywood and around the world. The alternative, which we’ve always said, is a lot of cutting. I think regulators in Europe and regulators in the U.S. should keep an eye on horizontal mergers. They should keep a close eye on [leveraged buyouts]. They typically are not good for the economy anywhere they happen. What were you preparing for in terms of the EU regulatory scrutiny with Warner Brothers? What was your read on how that might have looked? I think we’re a known entity in Europe. Keep in mind, like in Q4 of last year, we reported $3.5 billion or $3.8 billion in European revenues. So 18 percent year-on-year growth. The EU is now our largest territory. We’re a known entity there. The reason we didn’t take out press releases, we had meetings in Europe as we know everybody. We talked to the regulators, both at the EU and at the country level. And I do think that in many of the countries that we operate in, we’re a net contributor to the local economy, which I think is really important. We’ve got 12 offices across Europe with 2,500 people. So we’re members of the local ecosystem, we’re not outsiders. With President Trump, he demanded that Netflix remove Susan Rice from the board or pay the consequences. Did that cross a line for you in terms of political interference? It was a social media post, and we didn’t, no, it did not. It was not ideal, but he does a lot of things on social media. So you didn’t interpret it as anything bigger than that. I mean, he does that one day, he could obviously weigh in on content the next day. How does somebody like you manage situations like that? I think it’s really important to be able to separate noise from signal, and I think a lot of what happens in a world where we have a lot of noise. There was so much attention to you going to the White House that day. And we didn’t learn until several days later that you didn’t actually have the meetings that were predicted. Before you arrived in Washington that day, had you already made the decision not to proceed? Not before arriving in Washington, but we knew the framework for if this, then that. So, yeah, I would say that it was interesting, but again, we don’t make a big parade about our meetings with government and with the regulators. I had a meeting on the books with the DOJ scheduled several weeks before, meeting with Susie Wiles, the president’s chief of staff, scheduled several months before, unrelated to the Warner Brothers deal. And that was just the calendar that lined up that way. We didn’t know when Warner Brothers would make the statement about the deal. It’s all very dramatic, like it belongs on Netflix as a movie. There was paparazzi outside of the White House waiting for me when I came out. I’ve never experienced that before. Yeah, it’s a remarkable story. I would tell you, and I’m being honest with you, there was no political interference in this deal. The president is interested in entertainment and interested in deals, so he was curious about the mechanics of things and how things were going to go or whatever, but he made it very clear that this was under the DOJ. So it’s just like we all spun it up from the media? How do you explain it all? First of all, Netflix is clickbait. So people write about Netflix and it gets read. And that’s a pretty juicy story. And [Trump] said, and by the way, like I said, he makes statements sometimes that lead to the beliefs of things that do and sometimes that don’t materialize at all. But I found my conversations with him were 100 percent about the industry, protecting the industry. And I think it’s very healthy that the president of the United States speaks to business leaders about industries that are important to the economy. To what degree did the narrative or the fact that David Ellison had a relationship or seemed to have a relationship with people in Washington who were in power, that that might have swayed or changed the dynamic at the end with where Warner Brothers went though? I can’t speak to what their thinking is on it. I feel like for me, it’s very important to know the folks in charge, but I wouldn’t count on it if you’re doing something that is not in the best interest of the country or the economy. You talked with Trump in the past about entertainment jobs. Were there specific policies you’ve advocated to him or anything that he brought up on that point? He has brought up tariffs for the movie and television industry many times. And I’ve hopefully talked to him the way out of them. I just said basically the same thing I said earlier. I think that incentive works much better. We’re seeing it in the U.S. things like the states compete with each other for production incentives and those states with good, healthy incentive programs attract a lot of production, and you’ve seen a lot of them move from California to Georgia to New Jersey, kind of looking for that what’s the best place to operate in, where you could put more on the screen. And I do think that having the incentives versus tariffs is much better. Netflix is now buying Ben Affleck’s AI company. What areas do you see AI having the most potential to change Netflix’s workflow? My focus is that AI should be a creator tool. But with the same way production tools have evolved over time, AI is just a rapid, important evolution of these tools. It is one of those. And the idea that the creators could use it to do things that they could never do before to do it. Potentially, they could do faster and cheaper. But the most impact will be if they can make it better. I don’t think faster and cheaper matters if it’s not better. This is the most competitive time in the history of media. So you’ve gotta be better every time out of the gate. And faster and cheaper consumers are not looking for faster and cheaper, they’re looking for better. I do think that AI, particularly InterPositive, the company we bought from Ben, will help creators make things better. Using their own dailies, using their own production materials to make the film that they’re making better. Still requires writers and actors and lighting techs and all the things that you’d use to make a movie, but be able to make the movie more effective, more efficient. Being able to do pick up shots and things like this that you couldn’t do before. It’s really remarkable. It’s a really remarkable company. As AI improves, do you see the role of human voice actors shrinking at Netflix? What’s interesting about that is if you look at the evolution of tools for dubbing and subtitling, the one for dubbing, we do a lot of A-B tests that people, if you watch something and you don’t like it, you just turn it off. The one thing that we find to be the most important part of dubbing is the performance. So good voice actors really matter. Yeah, it’s a lot cheaper to use AI, but without the performance, which is very human, it actually runs down the quality of the production. Will it evolve over time? Possibly, but it won’t evolve without the cooperation and the training of the actual voice actors themselves too. I think what will happen is you’ll be able to do things like pick up lines that you do months and months after the production. You’ll be able to recreate some of those lines in the film without having to call everybody back and redo everything which will help make a better film. You’re in the sort of early stages of a push into video podcast. What have you learned so far about what works and what doesn’t? It’s really early. The main thing is we’ve got a broad cross-section of podcasts. It’s nowhere near as complete as other podcast outlets yet. But the things that we leaned into are the things that are working. We kind of figured they would. You’ve got true crime, sports, comedy, all those things that we do well in the doc space already. And I really am excited about things where people can develop and deepen the relationship with the show itself or the [intellectual property] itself. Our Bridgerton podcast is really popular, and people really want to go deeper and we want to be able to provide that for them. I think a video podcast is just the evolution of talk shows. We have tried to and failed at many talk shows over the years, and for the most part it’s because the old days of TV, when 40 million people used to tune in to the Tonight Show every night, [are over]. What’s happened now is that it’s much smaller audiences that tune into multiple shows in the form of a podcast every day. And then they come up to be way bigger than the 40 million that Johnny Carson used to get. They’re all individual, and it’s a deeper relationship than it is a broad one. So instead of trying to make one show for the world, you might have to make hundreds or thousands of shows for the whole world.

LONDON — Trade Secretary Peter Kyle is expected to announce the U.K.’s steel strategy at Tata Steel UK’s mill in Port Talbot on Thursday. The strategy will set out new protections for Britain’s steel sector, slashing quotas on imports of many products from overseas while raising duties outside those caps to 50 percent, two people familiar with the announcement told POLITICO. “The tariff will be doubled to 50 percent in line with what the Europeans have done, the Canadians have done, the Americans have done,” a senior business representative familiar with the plans said. There will “be some exemptions” for products British steelmakers don’t make, they added. British officials have told both U.K. steel producers and downstream importers, who use steel in everything from construction to automotive manufacturing, to expect a 50 percent duty outside of new quotas in a move “likely to be similar to the EU,” said a second industry figure. Both industry figures were granted anonymity as they were not authorized to speak publicly. Last October, the EU announced plans to reduce its quotas on foreign steel imports by almost half and levy a 50 percent tariff on goods exceeding the cap. The move is part of an overhaul of so-called safeguard protections that expire in both the EU and U.K., under World Trade Organization rules, at the end of June. The U.K.’s strategy setting out the future of the sector has been repeatedly delayed. On Thursday, Kyle will set out a new scheme of trade protections to replace the so-called steel safeguards scheme. A Tata Steel UK executive told lawmakers in early February that the government “had eight weeks to save the British steel industry” by shielding it with new protectionist measures from a glut of cheap imports from countries like China. Steel importers, however, are unlikely to get the full gamut of exemptions under the scheme they had hoped for, said the second industry figure, noting they’re “prepared for the worst.” The government will “jeopardize downstream manufacturers if they make the import restrictions too prohibitive,” they said. “There will be some exemptions, but not as many as they hoped for,” said the senior business representative. “This government has been crystal clear in committing to a bright and sustainable future for steelmaking and steel jobs in the U.K., and we will publish a steel strategy shortly setting out how we can achieve a sustainable future for the sector,” said a government spokesperson.

LONDON — U.K. Prime Minister Keir Starmer has stressed since the start of the U.S. and Israeli-led war in Iran that Britain will only contribute to defensive operations, including limiting the U.S. use of British airbases, saying: “We have learned the lessons of Iraq.” The problem as the war continues into its third week is that Starmer is now getting low marks from key allies in the Gulf for how he’s applied those lessons, according to senior military figures and diplomats who spoke to POLITICO. That has left London scrambling to deploy sufficient resources and show that it can provide adequate defensive support in the region as well as protect British assets, including its sovereign bases in Cyprus.  Three people familiar with operational and planning strategies, granted anonymity to speak frankly about sensitive matters, said the U.K. had bungled defensive decision-making and failed to send the necessary resources to the area at the time of the first U.S. and Israeli strikes on Iran.   Chief of the Defense Staff Richard Knighton has taken flak over delays in deploying HMS Dragon, a guided missile destroyer, to the Mediterranean for more than a week after the war started. But one former military commander familiar with conversations in government about the U.K. response said the greater fault lay in a risk-averse stance from Starmer as well as his National Security Adviser Jonathan Powell and Defense Secretary John Healey, whose fears over a domestic backlash to being embroiled in a conflict in the Middle East hobbled the U.K.’s thinking about how to support allies in the Gulf. “No. 10 was determined to downplay any risk or perception of us getting involved and now the government is playing catch-up,” the former commander said. “And that means we are showing up late.” Others POLITICO spoke with said the failure to deploy maritime assets — especially in minesweeper expertise and air defense — has shaken states ranging from Bahrain and the United Arab Emirates with longstanding close defense ties to the U.K. This perceived lapse has left Britain on the back foot both in its deployment of assets and in diplomatic relations with partners, visible in the U.K.’s concerted effort last week to demonstrate support for Gulf countries facing retaliatory strikes from Iran, as Foreign Secretary Yvette Cooper travelled to Saudi Arabia. The prime minister and defense secretary have highlighted extra resources deployed to the region since widespread unrest erupted in Iran at the start of the year, including fighter jets, air defense missiles and radar systems.  The prime minister and defense secretary have highlighted extra resources deployed to the region since widespread unrest erupted in Iran at the start of the year, including fighter jets, air defense missiles and radar systems. And there are mounting signs that Starmer and Healey have understood the extent of sore feelings among allies and are seeking to assuage any tensions with Gulf allies as well as with the U.S.  In a social post on Sunday, the Ministry of Defense highlighted U.K. Typhoon and F-35 jets flying over Bahrain for the first time in “defense of British interests” and Britain’s role in air protection over the United Arab Emirates, Qatar and Cyprus. Christian Turner, Britain’s ambassador to Washington, also issued a video over the weekend noting that British pilots have spent “over 300 hours in the skies above the Middle East shooting down Iranian drones and missiles” as well as drawing attention to the U.S. use of U.K. bases and sharing of intelligence.  “We acted early to protect British people and British interests and to support our allies across the region,” a Ministry of Defense spokesperson said, specifically noting defense patrols with extra Typhoons in Qatar to support that country as well as Bahrain and the UAE. “Those preparations made a real difference, enabling our troops to conduct defensive operations from Day One.” “We acted early to protect British people and British interests and to support our allies across the region,” a Ministry of Defense spokesperson said, specifically noting defense patrols with extra Typhoons in Qatar to support that country as well as Bahrain and the United Arab Emirates. “Those preparations made a real difference, enabling our troops to conduct defensive operations from Day One.” A Downing Street spokesperson declined to comment further, referring inquiries to the Ministry of Defense.  But a government official, granted anonymity as they were not authorized to speak on the record, insisted Starmer and Healey had “followed all military recommendations presented to them throughout the build-up” and hit out at “armchair generals who aren’t seeing the intelligence and information that our military see every day.” Yet a person with knowledge of deployment decisions said that close allies of the U.K. were “deeply disappointed” by the lack of preparation. “There had been knowledge of the preparations for U.S. action on Iran on a large scale from around Christmas and the U.K. had visibility on that,” this person said. “But the response was wholly inadequate.” If a full array of options had been considered, according to this person, a submarine presence from the Royal Navy might have been sent to the region as a deterrent under the terms of Operation Kipion, a long-standing umbrella for British security, intelligence gathering and deterrence to the Gulf. One area of concern has been the decommissioning of ships, some of which were moved for servicing and routine upgrades in recent weeks.  HMS Middleton, which was based in Bahrain, arrived back in Britain on March 1 — the day after the U.S. and Israel opened their attack — for maintenance and a technological upgrade. The vessel, ⁠which is more than 40 years old, was no longer certified to sail, according to the MOD. The U.K.’s only mine-hunting ship was brought back to Britain to save money just as strikes began, according to The Times.  Healey told reporters this week he was still considering “additional options” for protecting the Strait of Hormuz.  The former commander was frustrated by a gap between the prime minister and Healey’s robust language about Britain’s need for war-readiness and the reality of its actions.  “We have the prime minister and defense secretary talking about ‘preparing the nation for war’ on a running basis, which is ironic, as we and our allies ended up not deploying deterrent force and taking a week to deploy a major warship to defend Cyprus in good time to show our strong  defensive intentions,” this person said. A senior Gulf diplomat said the U.K.’s early response to the conflict fell short of what Gulf partners expected given Britain’s longstanding military ties in the region. There were “a lot of phone calls,” the diplomat said, but not much in the way of “serious support.” John Foreman, a former deputy head of the Combined Maritime Forces in Bahrain, said Starmer’s cautious approach was bound to cause continued problems as the conflict continues, particularly amid rising focus on protecting the Strait of Hormuz. “Wiser, less cautious heads would have got ahead of the game,” Foreman said. “It comes from Starmer ultimately and the tone of his government. It’s too late for Powell to be asking for options on the eve of war — and for Healey to still be pondering options now.”

By Anna Wiederkehr and Erin Doherty Many Americans give their country positive reviews. Some of the United States’ closest allies give far less flattering ratings. The POLITICO Poll, conducted across five countries, reveals a stark disconnect between how Americans see their country and how several top allies do. As the Trump administration’s aggressive posture abroad disrupts the longstanding world order, the United States’ global reputation appears far worse than Americans realize. In the U.S., the divergence is especially sharp along partisan lines. Americans who voted for President Donald Trump in 2024 overwhelmingly give the country high marks on the world stage. -------------------------------------------------------------------------------- This article is part of an ongoing project from POLITICO and Public First, an independent polling company headquartered in London, to measure public opinion across a broad range of policy areas. You can find new surveys and analysis each month at politico.com/poll. Have questions or comments? Ideas for future surveys? Email us at poll@politico.com. Those who backed former Vice President Kamala Harris, however, offer negative assessments far closer to America’s allies. The results paint a lopsided picture, with Americans — driven by the president’s own supporters — increasingly on an island in how they view the country. It’s not just The POLITICO Poll that reveals this growing mismatch. Leaders across Europe and Canada are increasingly voicing their concern about Trump’s efforts to upend longtime alliances. The poll was conducted Feb. 6 to Feb. 9 in the United States, Canada and the three largest economies in Europe: France, Germany and the United Kingdom. We’ve turned the results from several key questions into ratings, comparing answers across countries. Here’s America, reviewed: “THE US PROTECTS DEMOCRACY” U.S. 4.9/10 About half of Americans, 49 percent, said the U.S. protects democracy, including three in four who backed Trump in 2024. On the contrary, just 35 percent of voters who backed Harris agreed. Featured review GERMANY 1.8/10 “I see no need for the Americans to now want to save democracy in Europe. If it would need to be saved, we would manage on our own.” —German Chancellor Friedrich Merz Dec. 9, 2025 Other reviews U.K. 3.4/10 CANADA 2.5/10 FRANCE 2.1/10 Question: “Thinking about the US, do you agree or disagree with the following? The US protects democracy.” The U.S. has long seen itself as a defender of democracy — both at home and abroad. But that reputation may be fraying amid growing unease among longtime allies about whether the U.S. still protects the democratic principles it once championed. When U.S. forces captured Venezuelan President Nicolas Maduro earlier this year, Trump pointed to Maduro’s disputed election as part of the rationale for the operation, even as some allies and international experts questioned the legality of Washington’s intervention. “THE US IS MOSTLY A FORCE FOR STABILITY IN THE WORLD” U.S. 3.6/10 A 36 percent plurality of Americans said the U.S. is mostly a force for stability — more than double the share of adults in the other countries who said the same. Featured review FRANCE 1.5/10 “We have the Chinese tsunami on the trade front, and we have minute-by-minute instability on the American side. These two crises amount to a profound shock — a rupture for Europeans.” — French President Emmanuel Macron February, 2026 Other reviews U.K. 1.8/10 CANADA 1.4/10 GERMANY 1.3/10 Question: “Which of the following comes closest to your view on the US’s role in the world?” Options: The US is “mostly a force for stability in the world”, “sometimes a force for stability, sometimes a threat,” “mostly a threat to global stability,” “not very important to global stability either way,” or “don’t know.” The surveyed nations have been among the hardest hit by Trump’s sweeping trade agenda, resulting in strained economic and diplomatic relationships. The steep levies — and Trump’s repeated broadsides against U.S. allies — have left them doubting Washington’s reliability as both a partner and a stabilizing force. It’s not just that allies no longer see the United States as a force for stability. Sizable shares, including a 43 percent plurality in Canada, say the country is mostly a threat to global stability. At the Munich Security Conference last month, a number of global leaders openly questioned the United States’ standing in the international order. “THE US CAN BE DEPENDED UPON IN A CRISIS” U.S. 5.7/10 A 57 percent majority of Americans said the U.S. can be depended on in a crisis, more than double the share of adults in Canada, Germany and France who agree. Featured review CANADA 2.7/10 “It is clear that the United States is no longer a reliable partner. It is possible that, with comprehensive negotiations, we will be able to restore some trust, but there will be no turning back.” —Canadian Prime Minister Mark Carney March 28, 2025 Other reviews U.K. 3.8/10 FRANCE 2.7/10 GERMANY 2.5/10 Question: “How would you rate The US on the following scales? Can be depended upon in a crisis | Can not be depended upon in a crisis” with the option to choose two levels of agreement on either side or a middle point between the two. The ratings displayed are a sum of the agreement of the levels on either side. The most common view among the close allies surveyed, in fact, was that the U.S. cannot be depended on in a crisis. That’s the opinion of a 57 percent majority in Canada, 51 percent majority in Germany, and pluralities in France (47 percent) and the U.K. (42 percent). Their concerns come as the Trump administration has clashed with allies over defense spending, trade and the scope of collective security agreements. Trump has repeatedly cast doubt over America’s commitments in Europe, fueling questions about whether Washington can be relied upon. “HAS THE MOST ADVANCED TECHNOLOGY” U.S. 5.3/10 Most Americans — 53 percent — said their country has the most advanced technology in comparison to the European Union and China. But top NATO allies disagree. Featured review U.K. 3.5/10 “China is a vital player on the global stage, and it’s vital that we build a more sophisticated relationship. … “Our international partnerships help us deliver the security and prosperity the British people deserve, and that is why I’ve long been clear that the UK and China need a long term, consistent, and comprehensive strategic partnership.” — UK Prime Minister Keir Starmer January, 2026 Other reviews CANADA 3.7/10 FRANCE 3.6/10 GERMANY 3/10 Question: “Comparing China, the EU, and The US, if you had to choose, which would you say…: Has the most advanced technology” with the option to choose China, the EU or the U.S. Trump sees the U.S. in close competition with China on technological advancements, repeatedly touting America as the global leader in artificial intelligence and chip production. But a majority of respondents in the other countries said China, not the United States or the European Union, has the most advanced technology: 54 percent in Canada, 55 percent in Germany, 53 percent in the U.K. and 50 percent in France. That perception gap could have real-world consequences. If longtime allies view Beijing as the technological leader, it could complicate Trump’s ability to rally partners around policies to try to curb China’s growth. ABOUT THE SURVEY The POLITICO Poll was conducted by Public First from Feb. 6 to 9, surveying 10,289 adults online, with at least 2,000 respondents each from the U.S., Canada, U.K., France and Germany. Results for each country were weighted to be representative on dimensions including age, gender and geography. The overall margin of sampling error is ±2 percentage points for each country. Smaller subgroups have higher margins of error.

BRITAIN’S LABOUR PARTY STARES INTO THE ABYSS IN ITS WELSH HEARTLAND In the old coalfields of south Wales, Britain’s center-left establishment faces being crushed by a nationalist left and populist right. POLITICO went to find out why. By DAN BLOOM and SASCHA O’SULLIVAN in Newport, South Wales Photo-Illustration by Natália Delgado/POLITICO Eluned Morgan, the Welsh first minister, stood in a sunbeam at Newport’s Victorian market and declared: “Wales is ready for a new chapter.” Many voters agree. The problem for Morgan is: few think she’ll be the one to write it. This nation of 3 million people, with its coalfields, docks, mountains and farms, is the deepest heartland of Morgan’s center-left Labour Party. Labour has topped every U.K. general election here for 104 years and presided over the Welsh parliament, the Senedd, since establishing it 27 years ago. Yet Senedd elections on May 7 threaten not only to end this world-record winning streak, but leave Welsh Labour fighting for a reason to exist. One YouGov poll in January put the party joint-fourth with the Conservatives on 10 percent, behind Welsh nationalists Plaid Cymru on 37 percent, Nigel Farage’s populist Reform UK on 23 percent and the Greens on 13 percent. Other polls are less dramatic (one last week had Reform and Plaid equal, and Labour a closer third), but the mood remains stark.  The most common projection for the 96-seat Senedd is a Plaid minority government propped up by Labour — blowing a hole in Labour’s status as the default governing party and safe vote to stop the right, and echoing recent by-elections in Caerphilly (won by Plaid) and Manchester (won by Greens). POLITICO visited south Wales and spoke to 30 politicians and officials across Labour, Plaid and Reform. | Dan Bloom/POLITICO It would raise the simple question, said a senior Welsh Labour official granted anonymity to speak frankly: “What is the point in this party?’” POLITICO visited south Wales and spoke to 30 politicians and officials across Labour, Plaid and Reform, including interviews with all three of their Welsh leaders, for this piece and an episode of the Westminster Insider podcast. The conversations painted a vivid picture of a center-left establishment fighting for survival in an election that could echo far beyond Wales. While in the 1980s Welsh Labour could unite voters against Margaret Thatcher’s Conservatives, now it is battling demographic changes, a decline in unionized heavy industry and an anti-incumbent backlash. All have killed old loyalties and habits. Squeezed by Plaid and Greens to their left and Reform to their right, some in Labour see parallels with other mainstream postwar parties facing a reckoning across Europe. This week, Germany’s conservative Christian Democrats and center-left Social Democrats lost to the Greens in the car production region of Baden-Württemberg; the latter barely scraped 5 percent. In the recent Manchester by-election, the Conservatives lost their deposit. Welsh Labour MPs fear a reckoning. One said: “We will have to start again. We rebuild. We figure out, what does Welsh Labour mean in 2026? What do we stand for?” NEW CHAPTER, SAME AUTHOR It takes Morgan 20 minutes to walk the 500 meters from Newport Market to our interview. Some passers-by flag her down; others she ambushes. We pass a baked goods shop (“Ooh, Gregg’s! That’s what I want!”) and Morgan emerges with a latte, though not with one of the chain’s famous sausage rolls. She introduces herself to one woman as “Eluned Morgan, first minister of Wales.” Her target looks vaguely bemused.  After the Covid pandemic, people are simply more aware of what the Welsh government actually does — which means Labour, as the incumbent, gets more blame when things go wrong. | Matthew Horwood/Getty Images A peer and ex-MEP who joined the Senedd in 2016, Morgan is a fixture of Wales’ Labour establishment who became first minister unopposed in August 2024 after her predecessor, Vaughan Gething, resigned over a donations scandal. “I didn’t have a mandate really, because I was just kind of thrown in,” she tells POLITICO midway up the high street. “I thought, right, I need a program, so I went out on the streets and took my program directly from the public without any filter.”  She is selling a nuts-and-bolts offer of new railway stations, a £2 bus fare cap and same-day mental health care. Morgan casts herself as the experienced option to beat what she calls the “separatists” of Plaid and the “concerning” rise of populism. She means Reform, which wants to scrap net zero targets and cut 580 Welsh civil service jobs. Yet paradoxically, she also paints herself as a vessel for change. “[People] want to see change faster,” she said in John Frost Square, named after the leader of an 1839 uprising that demanded voting rights for all men. She wants to show “delivery” and “hope.” Dimitri Batrouni, Newport Council’s Labour leader, suggested an Amazonification of politics is under way. “Our lives commercially are instant,” he said. “I want something, I order it, it’s delivered to my house … people quite naturally want that in their governments.” But after 27 years, many voters are rolling the dice on delivery elsewhere. Welsh Labour is promising to end homelessness by 2034, but previously made the same pledge by 2026. Around 6,900 people are still waiting two years or more for NHS treatment (though this figure was 10 times higher during the Covid-19 pandemic). Education rankings slumped in 2023. At Newport’s Friars Walk shopping center, retired mechanical engineer Roy Wigmore, 81, said all politicians are liars. “I’ve voted Labour all my life until now,” he said, “but I’ll probably vote for somebody else — probably Nigel Farage.” ‘SHIT, WELL, HE DIDN’T CALL ME’ Much of this anger is pointed at Westminster — which is why Labour has long tried to show a more socialist face to Wales.  It was the seat of Labour co-founder Keir Hardie as well as of Nye Bevan, who launched Britain’s National Health Service in 1948. “Welsh Labour” was born out of the first Senedd-style elections in 1999, when Plaid surged in south Wales heartlands while Tony Blair’s New Labour appealed to the middle classes. For years, this deliberate rebranding worked; Labour pulled through with the most seats even when the Tories ruled Westminster. Yet in 2024, the party boasted of “two Labour governments at both ends of the M4” — in London and in Cardiff — working in harmony. The emphasis soon flipped back when things went wrong in No. 10; Morgan promised a “red Welsh way” last May. She is “trying to find our identity again,” said the MP quoted above. Morgan appeared to disown the “both ends of the M4” approach, while declining to call it a mistake. “Look, that was a decision before I became first minister,” she said. A peer and ex-MEP who joined the Senedd in 2016, Morgan is a fixture of Wales’ Labour establishment who became first minister unopposed in August 2024 after her predecessor, Vaughan Gething, resigned over a donations scandal. | Matthew Horwood/Getty Images She tries to be playful in distancing herself from Keir Starmer. “He came down a couple of weeks ago and I was very clear with him, if you’re coming you need to bring something with you. Fair play, he brought £14 billion of investment,” she said. “If he wants to come again, he’ll have to bring me more money.” But she has also hitched herself to Starmer for now — unlike Scottish Labour leader Anas Sarwar, who has called for the PM to go. As we sat down, Morgan professed surprise at news that Sarwar called several Cabinet ministers beforehand. “Did he! Shit, well, he didn’t call me,” she said. “Look at the state of the world at the moment; actually what we need is stability,” she added. “We need the grown-ups in the room to be in charge, and I do think Keir Starmer is a grown-up.” ‘ELUNED WASN’T HAPPY’ Morgan has mounted a fightback since Plaid won October’s Caerphilly by-election.  She has hired Matt Greenough, a strategist who worked on London Mayor Sadiq Khan’s re-election campaign last year, said three people with knowledge of the appointment. One of the people said: “During Caerphilly, it became quite clear there were a lot of problems. Eluned wasn’t happy with Welsh Labour or the way the campaign was running. She did a lot of lobbying and got the Welsh executive to basically give her complete power over the campaign.” Morgan “was angry that the central party [in London] took control of the Caerphilly by-election,” another of the people added. (A Morgan ally disputed this reading of events, saying she would always take a bigger role as the election drew near, and that a wide range of Labour figures are involved in the campaign committee such as a Westminster MP, Torsten Bell.) Morgan also has more support these days from Labour’s MPs — who pushed last year for her to focus less on Plaid and more on Reform. That lobbying may have been a mistake, the MP quoted above admits now. “We were quite naive in thinking that the progressives would back us,” this MP said. Privately, Labour politicians and officials in Wales say the mood and prospects are better than the start of 2026. Though asked if Labour would win the most seats in the Senedd, Batrouni said: “Let’s look and see. It’s not looking good in the polls but … politics changes so quickly.” IT’S NOT JUST ABOUT KEIR STARMER The harsh reality is that Labour’s base in Wales began slipping long before Starmer, rooted in deindustrialization since the 1970s and 80s. Newport, near England on the M4 corridor, has a measure of prosperity that other parts of Wales do not. The 137-year-old market has had a makeover, Microsoft is building data centers and U.S. giant Vishay runs Britain’s biggest semiconductor plant. Here Labour is mostly expecting a fight between itself and Reform. At Newport’s Friars Walk shopping center, retired mechanical engineer Roy Wigmore, 81, said all politicians are liars. “I’ve voted Labour all my life until now,” he said, “but I’ll probably vote for somebody else — probably Nigel Farage.” | Jon Rowley/Getty Images Wales’ west coast and north west are more Plaid-dominated, with more Welsh speakers and independence supporters. But support for nationalists is spreading in the southern valleys. “All across the valleys you’re seeing places where Labour has dominated for 100 years plus but is now in deep, deep crisis,” said Richard Wyn Jones, professor of Welsh politics at Cardiff University. “It has long been the case that a lot of Labour supporters have had a very positive view of Plaid Cymru — they just didn’t have a reason to vote for them until now.” Wyn Jones attributes the change to trends across northern Europe, where traditional left-wing parties have been “unmoored” from working-class occupations. A growing service sector has brought more white-collar voters with socially liberal values. Carmen Smith, a 29-year-old Plaid campaigner who is the House of Lords’ youngest-ever peer, said Brexit had unhitched young, left-leaning voters from the idea of British patriotism: “There are a lot more young people identifying as Welsh rather than British.”  And after the Covid pandemic, people are simply more aware of what the Welsh government actually does — which means Labour, as the incumbent, gets more blame when things go wrong.  All the while, a left-behind contingent of socially conservative ex-Labour voters is turning to Reform UK. At the Tumble Inn, a Wetherspoons chain pub in the valley town of Pontypridd, retired gas engineer Paul Jones remembered: “You could leave one job, walk a couple of hundred yards and start another job … it was a totally different world. I wish we could get it back, but I don’t think it’s going to happen.” He hasn’t voted for years but plans to back Reform. THEY’VE BLOWN UP THE MAP All these changes will be turbocharged by a new electoral map. A previous Labour first minister, Mark Drakeford, introduced a more proportional voting system which will see voters elect six Senedd members in each of 16 super-constituencies. The results will reflect the mood better than U.K. general elections (Labour won 84 percent of Wales’ seats on a 37 percent vote share in 2024), but create a volatile outcome. In the mega-constituency for eastern Cardiff, Wyn Jones believes the six seats could be won by six parties: Labour, Plaid, Reform, the Conservatives, Greens and Liberal Democrats. Ironically, said the Labour MP quoted above, Welsh Labour is now polling so badly that it could actually win more seats under the new system than the old one. Trying to win the sixth seat in each super-constituency will hoover up many resources. The size of each patch changes how parties campaign, said Plaid’s Westminster leader Liz Savile Roberts: “We’ve had to go to places that I’ve never been to.” And the scale means activists have a weaker connection to the candidates they campaign for — compounded in Labour by many Senedd members stepping down. Just six people turned up to one recent Labour door-knocking session in a heartland seat. A left-behind contingent of socially conservative ex-Labour voters is turning to Reform UK. | Huw Fairclough/Getty Images After May 8, the new system will make coalitions or informal support deals more necessary to command a Senedd majority. Morgan declined to say if she would support Plaid’s £400 million-a-year offer to expand free childcare (which Labour says is unfunded), rather than see it voted down. “I’m certainly not getting into hypotheticals,” she said. “I’m in this to win it.”  Her rivals have other ideas. THE PRESIDENT IS COMING On the hill above Newport, a two-story presidential-style image of Rhun ap Iorwerth filled a screen at the International Convention Centre above the words: “New leadership for Wales.” The former BBC presenter, who took over Plaid’s leadership in 2023, strained not to make his February conference look like a premature victory lap. Members could’ve been fooled. They struggled to find parking. There were more lobbyists; more journalists. It is a slow burn for a party founded in 1925, which won its first Westminster seat in 1966. Ap Iorwerth ramped up the anti-establishment rhetoric in his conference speech while Lindsay Whittle, who won Caerphilly for Plaid in October’s by-election, bellowed: “Rich men from London, we are waiting for you!” Yet he insists his success is more than a protest vote, a trend sweeping Europe or a mirror of Reform’s populism. “I’d like to think that we’re doing something different,” Ap Iorwerth told POLITICO. While Morgan accuses him of “separatism,” he said: “We have a growing sense of Welsh nationhood and Welsh identity, at a time when there’s deep disillusionment in the old guard of U.K. politics and a sense of needing to keep at bay that populist right wing.” Ap Iorwerth said there is a “very real danger” that Labour vanishes entirely as a serious force in the Senedd. “The level of support that they have collapsed to is a level that most people, probably myself included, could never have imagined would happen so quickly,” he said. INDEPENDENCE DAY? But Plaid faces three big challenges to hold this pole position. The first is its ground game, stretched thin to cover the new world of mega-seats. On the hill above Newport, a two-story presidential-style image of Rhun ap Iorwerth filled a screen at the International Convention Centre above the words: “New leadership for Wales.” | Matthew Horwood/Getty Images The second is to remain distinct from Labour and the insurgent Greens while running a broad left-leaning platform focused on energy costs, childcare and the NHS. The third is to convince unionist voters that Plaid is not simply a Trojan horse for Welsh independence. Independence is Plaid’s core belief, yet Ap Iorwerth did not mention the word once in his speech, instead promising a “standing commission” to look at Wales’ future. He told POLITICO he would rather have a “sustained, engaging, deep discussion … than try to crash, bang, wallop, towards the line.”  But opponents suggest Plaid will push hard for independence if they win a second term in 2030 — like the Scottish National Party did after topping elections in 2007 then 2011. One conference attendee, Emyr Gruffydd, 36, a member for 19 years, said independence “is going to be part of our agenda in the future, definitely. But I think nation-building has to be the approach that we take in the first term.” Savile Roberts accepted that shelving talk of independence (which is still supported by less than half the Welsh population) is part of a deliberate strategy to broaden the party’s reach and keep a wide left-leaning appeal. “I mean, we know the people that we need to appeal to — it is the disenchanted Labour voters,” she said. For some shoppers in Newport — not Plaid’s home turf — it may be working. One ex-Labour voter, Rose Halford, said of Plaid: “All they want to do is make everybody speak Welsh.” But she’ll consider backing them: “They’re showing a bit more gumption, aren’t they?” TAXING QUESTIONS FOR PLAID If Plaid does win, that’s when the hard part begins. Ap Iorwerth would seek urgent talks about changing Wales’ funding formula from Westminster — but cannot say how much this would raise. And Plaid has vowed not to hike income tax, one of the few (blunt) tax instruments available to the Welsh government. Strategists looked at the issue before and feared it would prompt taxpayers to flee over the border to England. So Plaid promises vague financial “efficiencies” in areas such as child poverty, where spending exceeded £7 billion since 2022, and health. Whittle said: “There’s an awful lot of people pen-pushing in the health service. We don’t need pen-pushers.” Labour’s attack machine argues that Plaid and Reform UK alike would cut services. Ap Iorwerth insists his and Farage’s promises are different: “We’re talking about being effective and efficient.” But he admitted: “You don’t know the detail until you come into government.”  Ap Iorwerth jettisoned any suggestion that Plaid would introduce universal basic income, saying it is “not a pledge for government.” He added: “It’s something that I believe in as a principle. I don’t think we’re in a place where we have anything like a model that could be put in place now.” Ap Iorwerth would seek urgent talks about changing Wales’ funding formula from Westminster — but cannot say how much this would raise. | Matthew Horwood/Getty Images The blame game between Cardiff and Westminster will run hot. Ap Iorwerth voiced outrage this week at a leaked memo from Starmer in December, ordering his Cabinet to deliver directly in Wales and Scotland “even when devolved governments may oppose this.” FARAGE’S WELSH SURGE And then there’s Reform. Farage’s party has rocketed in the polls since 2024; typical branch meetings have swelled from a dozen members to several dozen. Since February, Reform has even had its own leader for Wales — Dan Thomas, a former Tory councillor in London who says he recently moved back to the area of Blackwood, in the south Wales valleys. Some party figures have observed a dip after the Caerphilly by-election, where Reform came second. Thomas insists: “I don’t think we’ve plateaued” — and even said there is room to increase a 31 percent vote share from one (optimistic) poll. “There’s still a Labour vote to squeeze,” he told POLITICO.  “We’re targeting all of Wales.” It is a measure of Plaid’s success that Reform UK often now presents the nationalist party as its main competition. “It’s a two-horse race [with Plaid], that’s what I say on the doors,” said Leanne Dyke, a Reform canvasser who was drinking in the Pontypridd Wetherspoons. James Evans, who is now one of Reform’s two Senedd members after he was thrown out of the Conservative group in January on suspicion of defection talks, argues his supporters are underrepresented in polling because they are “smeared” as bigots. Evans added: “Very similarly to what happened in America when Donald Trump was elected, I think there is a quiet majority of people out there who do not want to say they’re voting Reform, who will vote Reform.”  Reform has its own custom-built member app, ReformGo, as it canvasses data on where its supporters live for the first time. It sent a mass appeal by post to all registered Welsh voters in late 2025 (before spending limits kicked in). Welsh campaign director David Thomas is recruiting a brand new slate of 96 candidates, booking hotels for training days with interviews, written exercises and team-building. Daytime TV presenter Jeremy Kyle has helped with media training. English officials cross the border to help; Reform still only has three paid officials in Wales. FARAGE HAS AN NHS PROBLEM Lian Walker, a postal worker from the village of Pen-y-graig, would be a prime target for Reform. “There’s people who I see on the databases, they don’t work,” she said in Pontpridd’s Patriot pub, “but they get everything; new windows, earrings, T-shirts, shorts.” She supports Reform’s plans to deport migrants. But on the NHS, she says of Reform: “They want it to go private like America.” Labour and Plaid drive this attack line relentlessly. The full picture is more nuanced — but still exposes a tension between Farage and Thomas. But Farage has an advantage; the right is less split than the left. | Ben Birchall/PA Images via Getty Images While Reform emphasizes it would keep the NHS free at the point of use, Farage has not ruled out shifting its funding from general taxation to a French-style insurance model, saying that would be “a national decision ahead of a general election.” Thomas, however, broke from this stance. He told POLITICO: “No, no. We rule out any kind of insurance system or any kind of privatization.” He added: “Nigel’s also said that devolved issues are down to the Welsh party, and I wouldn’t consider any kind of insurance-based or private-based system for the Welsh NHS.” Labour and Plaid are relying on an anti-Reform vote to keep Farage’s party out of power. Opponents have also highlighted the jailing of Nathan Gill, Reform’s former Welsh leader, for taking bribes to give pro-Russia interviews and speeches. But Farage has an advantage; the right is less split than the left. In Evans’ sprawling rural seat of Brecon and Radnorshire, two people with knowledge of the Conservative association said its membership had fallen catastrophically from a recent peak of around 400. On the other hand, the sheer number of defections makes Reform look more like a copycat Conservative Party. A former Tory staffer works for Evans; Thomas’ press officer is the Welsh Conservatives’ former media chief. Evans said last year that 99 percent of Reform’s policies were “populist rubbish,” but was allowed to see the policy platform in secret before he agreed to join (and has since contributed to it). While the long-time former UKIP and Brexit Party politician Mark Reckless led a policy consultation in the first half of 2025, former Conservative Welsh Secretary David Jones — who defected without fanfare last year — played a hands-on role behind the scenes working up manifesto policies, two people with knowledge of his work said. THE NIGEL SHOW Then there is Reform’s reliance on Farage himself.  The party deliberately left it late before unveiling a Welsh leader, said a Reform figure in Wales, and chose in Thomas a Welsh figure who would not “detract from Nigel’s overall umbrella and brand.” While Welsh officials and politicians worked on the manifesto, Farage himself was involved in signing it off — as were several others in London, said Evans, including frontbench spokespeople Robert Jenrick, Suella Braverman and Zia Yusuf. Thomas said: “Ultimately, it’s my decision to sign off the manifesto. Of course, Nigel was consulted because he’s our U.K. leader, and we want to ensure that what’s going on in Wales is aligned to the broader picture in the UK.” Reform’s Welsh manifesto promises to cut a penny off every band of income tax by 2030, end Wales’ “nation of sanctuary” plan to support asylum seekers, scrap 20mph road speed limits and upgrade the M4 and A55 highways. But costings have not been published yet — Reform has sent them to be assessed by the Institute for Fiscal studies, a nonpartisan think tank — and like other parties, Reform faces questions about how it will all be paid for. Asked if Reform would begin work on the M4 and A55 upgrades by 2030, Thomas replied: “We’d like to. But we all know in this country, infrastructure projects take a long time.” While Welsh officials and politicians worked on the manifesto, Farage himself was involved in signing it off — as were several others in London, said Evans, including frontbench spokespeople Robert Jenrick, Suella Braverman and Zia Yusuf. | Huw Fairclough/Getty Images ‘I’VE GOT TO FOCUS ON WHAT I CAN CONTROL’ These harsh realities facing Wales’ would-be rulers are a silver lining for Labour. Morgan avoided POLITICO’s question about whether she believes the polls — “I’ve got to focus on what I can control” — but insisted many voters remain persuadable. “People will scratch the surface and say [our rivals] are not ready,” she said. Alun Michael, who led the first Welsh Labour administration in 1999, said the idea that the Labour vote has “collapsed completely” is wrong. “It’s always dangerous to go on opinion polls as a decider of what will happen in an election,” he said. Whoever does win will deserve a moment of levity. If Ap Iorwerth wins the most seats on May 7, he will drink an Aperol spritz; Thomas will have a glass of Penderyn Welsh whisky.  As for Morgan? She would like a cup of tea — milk, no sugar. Perhaps survival would be sweet enough.

Reform UK’s Welsh leader has ruled out moving to an insurance-based healthcare system, despite the party’s U.K.-wide boss Nigel Farage keeping the idea on the table. Dan Thomas, who took charge of Farage’s populist right-wing party in Wales last month, said he would not consider “any kind of insurance-based” reform to Britain’s National Health Service (NHS). Thomas spoke to POLITICO for a special feature and Westminster Insider podcast on the battle for the Welsh parliament, the Senedd, on May 7. Both will be released on Friday. His position differs from that of Farage, who leads the insurgent party across the U.K. It is an early sign of the challenge that faces Farage — who has long had a presidential-like hold on his parties — in reconciling the messaging from Reform’s growing network of office-holders. While a Reform spokesperson told POLITICO it would keep the NHS free at the point of use for British citizens, Farage has not ruled out other reforms, such as moving funding of the NHS from general taxation to an insurance system. Asked at the party’s Welsh manifesto launch on Mar. 5 if he would be prepared to look at reforms such as a French-style insurance system (in which citizens have mandatory insurance and pay through social security contributions), Farage said: “That would be a national decision ahead of a general election.”  He added: “On the big U.K. picture of health, I’m prepared to consider any alternative to the failure we’ve got now … as for devolved powers, I’ll let Dan speak to that.” Thomas later said he would not support moving to an insurance-based system in Wales. “No, no,” he said in an interview. “We rule out any kind of insurance system or any kind of privatization.  “It will be free at the point of use. That’s what the public in Wales wants, and that’s what we will deliver.”  Asked if he disagreed with Farage’s remarks on an insurance model, Thomas replied: “Look, Nigel’s also said that devolved issues are down to the Welsh party, and I wouldn’t consider any kind of insurance-based or private-based system for the Welsh NHS.  “I think we can improve the NHS in Wales within the existing £14 billion budget, and it just takes focus. We [also] need more ministerial authority and intervention when services aren’t delivering.” A WELSH TEST Polls predict Reform (as well as Welsh nationalist party Plaid Cymru) will surge ahead of the Labour incumbents in elections to the Senedd on May 7. “We rule out any kind of insurance system or any kind of privatization,” said Dan Thomas. | Jon Rowly/Getty Images The future of the NHS is a key attack line in the campaign for the center-left Labour and left-wing Plaid Cymru, who accuse Reform of flirting with privatization. Reform said in its 2024 general election manifesto that NHS services “will always be free at the point of use,” though not for foreign citizens. In November, the party announced plans to raise the existing “health surcharge” for visa applicants from £1,035 to £2,718 per year. A Reform UK spokesperson said Wednesday: “We will always keep the NHS free at the point of use for British citizens.” The comments from Thomas and Farage appear to raise the prospect that Reform UK could consider one funding model for England and another for Wales. Mark Dayan, a policy analyst at the Nuffield Trust, a nonpartisan health think tank, said this would technically be possible, but changing the model at any level would be a major upheaval. “It would certainly be possible for Wales and England to have different approaches to coverage and user charges, because health is already a devolved issue,” Dayan said. “Wales already has some separate user charging policies around prescriptions, for example. “The taxation side of it will be really complicated … you’d be taking a lot of money out of some taxes and piling it into payroll taxes to make it social insurance. So you’d have to rewire things quite a bit, and some of that would probably require you to redesign how money goes from Westminster to the other U.K. countries, whether or not they had social insurance as well.”

LONDON — Nigel Farage’s Reform UK has welcomed an offer from MI5 to help political parties vet their election candidates as hostile states try to infiltrate British democracy. Last month MI5 — Britain’s domestic intelligence agency — said it would help political parties with candidate checks for potential foreign interference risks. A Reform spokesman told POLITICO the party would be “very interested” in taking up the offer, if it “comes to fruition.” Ken McCallum, the director general of MI5, made the offer at a cross-party briefing with U.K. political parties last month, alongside Security Minister Dan Jarvis, three people with knowledge of the meeting told POLITICO. The offer from McCallum is part of a wider effort by the U.K. government and security services to shore up British democracy amid a wave of espionage activity from hostile states. In the past six months, several foreign and U.K.-born citizens have been arrested on suspicion of working for Iran, Russia and China. Earlier this month three former Labour officials, including the husband of a sitting Labour MP and former candidate for North Wales police and crime commissioner, were arrested by counter-terrorism police on suspicion of spying for China. Last year, the former Reform UK leader in Wales Nathan Gill was jailed for accepting bribes to make pro-Russian statements while he was a member of the EU parliament for Reform’s precursor Brexit Party. Britain’s political parties have no standardized system for vetting those who want to become MPs. Each party has its own internal, and in some cases, external processes for probity checks. Reform leader Nigel Farage in 2024 blamed a “reputable vetting company” for oversights in helping sift its candidates ahead of the general election after one praised Hitler and backed Russia’s war in Ukraine. He apologized, adding: “We have been stitched up politically and that’s given us problems.” MI5’s role in vetting is limited to its own staff and certain levels of security clearance for specific government and official roles in Whitehall. Its offer to candidates is expected to be limited to helping parties assess foreign interference risks, rather than any official security clearance. POLITICO asked the six main Westminster parties if they will take MI5 up on its offer to assist in their vetting processes. The ruling Labour Party, the Conservatives, the Greens and the Liberal Democrats all declined to comment. The Scottish National Party did not immediately respond to a request for comment. The offer from Ken McCallum is part of a wider effort by the U.K. government and security services to shore up British democracy amid a wave of espionage activity from hostile states. | Jonathan Brady/PA WIRE/AFP via Getty A Reform UK spokesman said: “If this offer comes to fruition, we would be very interested in taking the MI5 up on it.  “We must do all we can to stamp out foreign interference in our politics. We have seen just last week with the Labour China spy scandal just how deeply embedded this issue is.” The government unveiled its Counter Political Interference and Espionage Action Plan last November. It includes an elections bill, which is currently making its way through parliament. An independent review into financial interference in U.K. democracy is examining the use of cryptocurrency. Ministers are also considering bringing in proscription-like powers to disrupt proxies and state-backed terror groups as part of the plan. A Government spokesperson said: “The Security Minister is coordinating an action plan to ensure we’re doing all we can to safeguard our democracy, including working directly with political parties to help them detect and deter interference and espionage. “We’re also strengthening rules on political funding, rolling out security advice for election candidates, and working with professional networking sites and think tanks to make them a more hostile operating environment for foreign agents.”

LONDON — Zack Polanski was once a Liberal Democrat. Now he’s eating his old party’s lunch.  Britain’s liberal centrists are scrambling to find their voice in Britain’s multi-party system as the self-described “eco-populist” Green Party leader grabs all the attention. The Liberal Democrats — the third-largest party in the U.K. House of Commons — failed to retain their £500 deposit in last month’s Gorton and Denton by-election in which the Greens convincingly took the Greater Manchester seat from the governing Labour Party.  They now face a big test in local elections in May. “There’s no question they’re being squeezed,” Tory peer and pollster Robert Hayward said of the Lib Dem position. They “may well be hit” in May as the Greens compete for the same “we don’t like you two parties” voice, he said.   It leaves long-serving leader Ed Davey facing questions about his strategy — and even his future as leader — as his party gathers in the northern English city of York for their spring conference this weekend.  ATTENTION ECONOMY  Lib Dem MPs should be having the time of their lives.  Their record-breaking 72 seats at the 2024 election saw their triumphant return as the third-largest party in the Commons after a near wipeout in 2015. The ruling Labour Party is deeply unpopular, and war in the Middle East has traditionally been election-winning territory for the centrists. In the aftermath of ex-Labour PM Tony Blair’s 2003 invasion of Iraq, the Liberal Democrats won parliamentary by-elections later that year and in 2004. Yet they are now jostling for attention with parties with far fewer parliamentary seats.  Reform UK is dominating conversation on the right of British politics — despite having just eight MPs — thanks to its poll lead, and eye-catching anti-immigration policies. The Liberal Democrats failed to retain their £500 deposit in last month’s Gorton and Denton by-election in which the Greens convincingly took the Greater Manchester seat from the governing Labour Party. | Stefan Rousseau/PA Images via Getty Images The Greens, with just five MPs, have found a strong communicator in Polanski, who became their leader last September and has eclipsed Davey, long known for his ability to capture media attention. “I’d be lying if I said it wasn’t frustrating,” said one Lib Dem MP about their coverage. Like others quoted, this person was granted anonymity to speak candidly.  “Why would you cover the Liberal Democrats?” a senior party figure asked. “We aren’t polling well enough for people to take it seriously that we might be a party of government next time.”  A Liberal Democrat spokesman pointed to the party’s success in 2024 as well as last year in local council by-elections. “Ed is the most popular leader in British politics and has established himself as the anti-Trump voice in Parliament,” the spokesman said. “Ed is the only leader with a plan to fix our NHS and end the cost of living crisis. We will take on the populists and win.” CAN’T BEAT ‘EM? JOIN ‘EM Davey became a household name performing questionable stunts during the 2024 general election campaign, and he continues to vie for attention with headline-grabbing positions on topics dominating the news.  He is consistently critical of U.S. President Donald Trump — most recently calling for King Charles’ planned state visit to the U.S. to be canceled. He also condemned “tax exiles” in Dubai affected by Iranian strikes, confronting online critics with pithy rebuttals.  Davey became a household name performing questionable stunts during the 2024 general election campaign, and he continues to vie for attention with headline-grabbing positions on topics dominating the news. | Aaron Chown/PA Images via Getty Images He spearheaded a Commons debate criticizing the former prince Andrew Mountbatten-Windsor — though this backfired when opponents pointed out he had praised the former Prince Andrew when he was a minister in the Tory-Lib Dem coalition government early 2010s. Earlier this year his deputy Daisy Cooper called for theTreasury to be replaced with a Department for Growth.  The party is also hoping to capture attention by creating a press conference room in its Westminster HQ, POLITICO reported last month. “Not everybody is fully signed up to that strategy,” the senior party figure quoted above said.  There is a “general unrest about the ‘let’s grab any passing headline we can, regardless of how closely it aligns to our values or our broader messaging’” approach, that figure added. “It’s not all about how many podcasts you’re on, how many times you get photos on the front page of whatever newspaper tickles your fancy,” the Lib Dem MP quoted above said.  Earlier this year his deputy Daisy Cooper called for theTreasury to be replaced with a Department for Growth. | Jonathan Brady/PA Images via Getty Images Sean Kemp, a former Lib Dem head of media, cautioned: “The coverage is no good if it’s coverage that actually loses you voters.” RIGHT MAN FOR THE JOB Davey will have been leader for six years in August, and now some in his party are privately questioning if he is the right person to lead them in the long run.  “If we don’t make the size of gains that we thought we were going to, then I think some of the unease that’s being expressed behind closed doors might well be” made public, the senior party figure said of the Lib Dem local election result.  “There are questions being asked about who’s the right person to take us forward,” they added. Roz Savage, an MP elected in 2024, told PoliticsHome in an interview earlier this month she couldn’t give her view “on the record” on the question of Davey’s leadership.  Even Davey’s supporters acknowledge things need to change. Roz Savage, an MP elected in 2024, told PoliticsHome in an interview earlier this month she couldn’t give her view “on the record” on the question of Davey’s leadership. | Danny Lawson/PA Images via Getty Images The MP quoted above said the party “definitely shouldn’t be standing still,” and had “to keep constantly evolving and adapting.” STEALING THEIR CLOTHES Davey’s rivals have been studying the Lib Dem playbook. Former Green Party leader Natalie Bennett said her party had “learned a lot from watching Lib Dem by-election campaigns,” gaining “an understanding of what you need to do as a challenger party in terms of delivering your leaflets, the pattern of it.” Sam White, Keir Starmer’s former chief of staff in opposition, saw echoes of Lib Dem strategy in the Greens’ successful Gorton and Denton by-election campaign, where Polanski campaigned hard against Labour’s Middle East stance.  “This is how they do by-elections,” White said. “They happily face both ways. They offer the public a really low-cost way and low-risk way of giving a bloody nose to a governing party who’s quite unpopular,” he added.  STAYING THE COURSE  Others think the by-election trouncing is overblown, pointing to the party’s focus on Tory and Reform facing seats in the so-called “blue wall.” Former Green Party leader Natalie Bennett said her party had “learned a lot from watching Lib Dem by-election campaigns.” | Isabel Infantes/PA Images via Getty Images “[The Greens] are not going to be part of the debate and the discussion in nearly all the places where the Liberal Democrats are going to be competitive,” a second Lib Dem MP said. “People in individual seats are not daft” about which party posed the best challenge. It is only sensible for parties to target areas where they can win in Britain’s majoritarian first-past-the-post electoral system, they added. Party veteran Kemp cautions the Lib Dems not to move left in response to the Green surge, warning Davey won’t be able to “out Polanski Polanski.”  “There is no gain for them in sounding massively left-wing,” he warned, adding: “They need to not scare people off.”  He advocates “greater ideological consistency” —  something he thinks will be easier given the party’s narrower focus on Tory and Reform facing seats. “Sometimes there’s benefits in being a bit boring,” he said.