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Labour has a classic first act problem

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Labour has a classic first act problem

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Governments are like plays: if the third act is unsatisfactory, the problem can usually be traced back to the first. Britain’s new(ish) Labour government is a case in point.

Labour’s first act problem lies in the decision the party leadership made in opposition to rule out any increase in income tax, national insurance or value added tax. Everything it has done in the four months since entering office, and everything it does for the next five years, will in one way or another be distorted by those pledges.

While the party’s focus groups consistently find that the condition of the UK’s public services in general and the NHS in particular matter more to their re-election hopes than anything else, its tax pledges place hard limits on how much can be spent on those services.

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As a consequence, and in order to fulfil Labour’s ambitions, businesses have to take a greater share of the strain, with all the negative implications that has for the UK’s already sluggish economic growth. Some of the policies involved are particularly ill-timed. For instance, Britain has made its rules on non-domiciled high earners from overseas less attractive at precisely the point at which the country faces a generational opportunity to attract talent looking for somewhere else to go following the election of Donald Trump in the US.

In some ways, it’s not a good idea to over-intellectualise about why Labour are raising taxes in this way. The shared lie in British politics for the best part of a decade now has been that you can have excellent public services for the many funded by taxes on the few. Mitt Romney was unable to convince a much more naturally pro-business electorate that corporations are in fact people, and while that argument is no less correct in the UK, it has even less hope of landing any time soon.  

But two measures are worth thinking about in light of another promise made by both Labour and the Conservative opposition: to reduce the UK’s net immigration statistics. These are the souped-up national minimum wage and the rise in employers’ national insurance contributions. Taken together, they represent significant new costs on hiring people — other than in the public sector, which will be exempt from the increase in NICs.

Increasing the cost of employment is generally a bad move with plenty of negative externalities — unless, that is, you think that the British public won’t bear greater levels of immigration or that we actually need to see net decreases. The former is the dominant position in the Labour party. The latter is the official position of the Reform party and becoming more widely held among Conservatives.

If you believe that, then you are no longer in the business of working out how best to attract talent. Rather, you are in the business of working out how to deploy your current labour force differently.

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You absolutely do want to disincentivise hiring someone to work in an Amazon warehouse or at a supermarket checkout so that you can fill vacancies in the social care sector or the NHS without recourse to further immigration. You do want the restaurant and hospitality sector to struggle and to shrink in order to free up additional labour market capacity for the state. You want fewer people in the private sector in general in order to be able to get by with a falling number of working age people and the current level of state provision — even more so if you want to maintain or increase the current level of financial support for the retired. This, again, is the position of both the Labour government and the Conservative opposition, which opposed even the relatively trivial measure to means test the winter fuel allowance (a Tory policy as recently as 2017).

Now, it’s true to say that there are some positive externalities here: a supermarket that invests in a self-service checkout with a skilled tradesperson to repair it is a good proposition. And the irony is that all of these measures have been what Conservative backbenchers have long claimed to want, only to discover that when they are implemented by Labour ministers they became repugnant.

There’s a lesson here for both the government and the opposition. If the prospect of squeezing out private sector jobs in order to keep the standard of public service provision up and the number of immigrants down is so unpleasant, then something needs to change. One or both of those impossible promises is going to have to be traded away, openly and explicitly. Failing that, both sides need to relax, stop worrying and learn to love Rachel Reeves’ Budget.

stephen.bush@ft.com

 

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After 2 failed votes, Mike Johnson unveils new plan to extend key U.S. spy powers

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After 2 failed votes, Mike Johnson unveils new plan to extend key U.S. spy powers

Speaker of the House Mike Johnson, R-La., takes questions at a news conference at the Capitol on Tuesday.

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Speaker Mike Johnson, R.-La., is forging ahead with his latest proposal to renew a key American spy power. His bill, revealed Thursday, is largely unchanged from a previous plan which failed in a series of overnight votes earlier this month.

The program at center of the debate, Section 702 of the Foreign Intelligence Surveillance Act (FISA), is set to expire on April 30.

FISA 702 allows U.S. intelligence agencies to intercept the electronic communications of foreign nationals located outside of the United States. Some of the nearly 350,000 foreign targets whose communications are collected under the provision are in touch with Americans, whose calls, texts and emails could end up in the trove of information available to the federal government for review.

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For almost two decades, privacy-minded lawmakers from both parties have sought to require specific court approval before federal law enforcement can conduct a targeted review of an American’s information gathered through the program. The lack of any such warrant requirement helped sink an effort last week to extend the program for 18 months, as well as a separate vote on a five-year renewal. 

Trump officials, like those in past administrations, have argued that such a warrant requirement would overburden law enforcement and endanger national security. Johnson’s latest proposal would reauthorize the program for three years, but does not include a warrant requirement. Instead, the bill calls for the FBI to submit monthly explanations for reviews of Americans’ information to an oversight official as well as criminal penalties for willful abuse, among other tweaks.

“I am willing to risk the giving up of my Rights and Privileges as a Citizen for our Great Military and Country,” the president wrote on Truth Social last week, advocating for the program to be extended without changes. “I have spoken with many in our Military who say FISA is necessary in order to protect our Troops overseas, as well as our people here at home, from the threat of Foreign Terror Attacks. It has already prevented MANY such Attacks, and it is very important that it remain in full force and effect.”

Glenn Gerstell, who served as general counsel at the National Security Agency during the Obama and first Trump administration, says Johnson’s reforms look like an attempt to find a middle ground.

“There’s not a lot of really substantive changes to the statute, but some gestures are made to people who are worried about privacy and civil liberties,” Gerstell said. “It seems like a pretty reasonable compromise that is going to be satisfactory to the national security agencies and yet at the same time represents some gesture to the privacy advocates.”

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“This is not a reform bill and it’s not a compromise,” Elizabeth Goitein, a privacy advocate and senior director of the Liberty and National Security Program at the Brennan Center for Justice at New York University, wrote on X. “It’s a straight reauthorization with eight pages of words that serve no serious purpose other than to try to convince members that it’s NOT a straight reauthorization.”

A bipartisan reform deal is still out of reach

Connecticut Rep. Jim Himes, the top Democrat on the House Intelligence committee, told NPR on Wednesday, before the release of Johnson’s new proposal, that lawmakers were working on a bipartisan solution. He said House Minority Leader Hakeem Jeffries, D-N.Y., was in touch with Johnson on the issue.

“There’s a lot of work being done here,” Himes said. “We’re sort of working out a process that will be inclusive rather than exclusive.” Himes said he was negotiating with Rep. Jamie Raskin, a Maryland Democrat and constitutional law scholar, on a reform proposal they hoped could preserve and reform the program — reauthorizing it with bipartisan support.

But Johnson’s new bill appears to fall short of the inclusive approach Himes hoped for.

NPR obtained a memo written by Raskin to his colleagues urging them to oppose the bill, which he said “continues the disastrous policy of trusting the FBI to self-police and self-report its abuses of Section 702 and backdoor searches of Americans’ data.”

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“FBI agents can still collect, search, and review Americans’ communications without any review from a judge,” Raskin wrote.

FBI agents must receive annual training on FISA and are generally barred from searching for information about people in the U.S. if the goal of the search is to investigate general criminal activity, rather than find foreign intelligence information, and those searches need approval from a supervisor or an attorney. 

Republican hardliners — who sunk Johnson’s last reauthorization attempt — also don’t all appear to be on board for Johnson’s latest revision. Rep. Scott Perry of Pennsylvania, a past chair of the Freedom Caucus, said “we’re not there yet” in a video he shared to X on Thursday.

“I didn’t take an oath to defend FISA, I didn’t take an oath to defend the intelligence community,” Perry said. “We can’t have them spying on American citizens and, when they do, there has to be accountability and I haven’t seen any that I’m satisfied with yet.”

The House Rules committee meets Monday morning, the first step toward advancing the renewal bill toward a vote.

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Trump Says Israel and Lebanon Agree to Extend Cease-Fire by Three Weeks

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Trump Says Israel and Lebanon Agree to Extend Cease-Fire by Three Weeks

President Trump announced a three-week extension of a cease-fire between Israel and Lebanon that had been set to expire in a few days, after hosting a meeting between Israeli and Lebanese diplomats at the White House on Thursday.

Hezbollah, the Iranian-backed militant group that has been attacking Israel from southern Lebanon, did not have representatives at the meeting and did not immediately comment on the announcement. The prime minister of Israel and the president of Lebanon also did not comment.

A successful peace agreement would hinge upon Hezbollah halting attacks, which Lebanon’s government has little power to enforce because it does not control the militia. Lebanon’s military has mostly stayed out of the fighting and is not at war with Israel.

The cease-fire, which was scheduled to end on April 26, would last until May 17 if it takes effect as Mr. Trump described it. Before the cease-fire was brokered last week, nearly 2,300 people were killed in Lebanon and 13 in Israel. Since then, the number of Israeli airstrikes and Hezbollah attacks have been dramatically reduced, though the two sides have continued exchanging fire.

The Lebanese Ambassador to the United States, Nada Hamadeh, credited Mr. Trump for extending the cease-fire, saying that “with your help and support, we can make Lebanon great again.” Mr. Trump replied, “I like that phrase, it’s a good phrase.”

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Asked about the potential of a lasting peace agreement between Israel and Lebanon, Mr. Trump said that “I think there’s a great chance. They are friends about the same things and they are enemies on the same things.”

But Lebanon and Israel have periodically been at war since Israel’s founding in 1948. Israel has invaded Lebanon for the fifth time since 1978, incursions that have destabilized the country and the delicate balance of power between Muslim, Christian and Druze communities.

In the hours before the president’s announcement on social media, Israel and Hezbollah were trading attacks in southern Lebanon, testing the existing cease-fire.

Mr. Trump said the meeting at the White House had been attended by high-ranking U.S. officials, including Vice President JD Vance, Secretary of State Marco Rubio and the U.S. ambassadors to Israel and Lebanon.

Earlier on Thursday, an Israeli strike near the southern Lebanese city of Nabatieh killed three people, according to Lebanon’s health ministry. Hezbollah claimed three separate attacks on Israeli troops who are occupying southern Lebanon, though none were wounded or killed.

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Hezbollah set off the latest round of fighting last month by attacking Israel soon after the start of the U.S.-Israeli bombing campaign in Iran. Israel responded to Hezbollah’s attacks by launching airstrikes across Lebanon and widening a ground invasion of the country’s south.

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U.S. soldier charged with suspected Polymarket insider trading over Maduro raid

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U.S. soldier charged with suspected Polymarket insider trading over Maduro raid

Smoke rises from Port of La Guaira in Venezuela on Jan. 3, 2026 after U.S. forces seized the country’s president, Nicolas Maduro and his wife.

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Federal prosecutors on Thursday unsealed an indictment against a U.S. Army soldier, accusing him of using his insider knowledge of the clandestine military operation to capture Venezuelan leader Nicolás Maduro in January to reap more than $400,000 in profits on the popular prediction market site Polymarket.

The Justice Department says Gannon Ken Van Dyke, 38, who was stationed at Fort Bragg, in North Carolina, was part of the team that planned and carried out the predawn raid in Caracas earlier this year that resulted in the apprehension of Maduro.

The Department of Justice and the Commodity Futures Trading Commission filed the actions against Van Dyke, the first time U.S. officials have leveled criminal charges against someone over prediction market wagers.

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According to the indictment, Van Dyke now faces counts of wire fraud, commodities fraud, misusing non-public government information and other charges.

Trading under numerous usernames including “Burdensome-Mix,” Van Dyke allegedly traded about $32,000 on the arrest of Maduro, resulting in profits exceeding $400,000.

“Prediction markets are not a haven for using misappropriated confidential or classified information for personal gain,” said U.S. Attorney Jay Clayton for the Southern District of New York. “Those entrusted to safeguard our nation’s secrets have a duty to protect them and our armed service members, and not to use that information for personal financial gain.”

Van Dyke’s defense lawyer is not yet publicly known. Polymarket did not return a request for comment.

The charges against Van Dyke come at a sensitive time for the prediction market industry, which has been growing exponentially, despite calls in Washington and among state leaders for the sites to be reined in.

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Van Dyke is the first to be charged in the U.S. for suspected Polymarket insider trading, but Israeli authorities in February arrested several people and charged two on suspicion of using classified information to place bets about military operations in Iran on Polymarket.

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