With the US no longer reliable on Ukraine, it’s time for Rachel Reeves to rip up her fiscal rules

It is not news that Donald Trump is a liar, but in his first tenure that chaos was almost kept at arms length, due in part to the pandemic. The world could watch him suggest injecting bleach, recoil in horror, but find comfort from it not happening here.

His return however has brought fresh horrors, a wave of policies that will not only ruin the lives of ordinary Americans, but many that will impact Europe as well. It started with tariffs, and this week, became appeasement.

Make no bones about it, echoing Russian propaganda, accusing President Volodymyr Zelenskyy of being a dictator, and excluding Ukraine from the talks are the first steps on the path to betrayal. Europe will try to reason with him, to manage him, but this is not democracy as we know it.

So it falls to us. Britain and the rest of Europe must work closer together to protect Ukraine and all those fearing the imperialist pig Putin and his grubby paws. That means more than just words, it requires investment. It means spending far more than the 2.5 per cent of GDP on defence, a figure almost every MP will say privately needs to be closer to 3.5 if not four.

But doing so is hard. The economy is not in great shape, with a combination of the Liz Truss mini-budget and new approach from the government creating the greatest budget borrowing surplus since records began in 1993.

One suggestion put forward comes from Jeremy Browne, a former foreign office minister who urged the government to reduce foreign aid spending and put the money saved towards funding the military. This sounds like a neat idea, one thing to fund another, but in reality is dipping into a crucial fund that’s already been decimated by the past few governments.

The reality is, the UK needs a reset, it requires a fresh economic policy that’s based on the realities of the day, not sounding tough in an election cycle. Decisions on funding, not just for defence, but everything are framed constantly around either more borrowing, or increasing taxes, two things the Chancellor doesn’t want to do.

But only last month she was almost bounced into it, with a weakened pound and soaring borrowing costs. No economist thinks it’s going to suddenly get better from here. They broadly agree that it's raising taxes or cutting spending. Labour MPs may do the rounds insisting the country will grow its way out, but privately more and more are having doubts.

What is clear is the current approach isn’t working, and it’s only going to get worse. Taxes will rise, or public services, already in a dire state, will face further cuts. It’s not sustainable. It’s not realistic. And it doesn’t adapt to the reality of the situation the UK finds itself in.

Having non-negotiable fiscal rules might have sounded good at home, but there are far bigger issues than the optics of a promise. Whether it’s borrowing or taxing, something has to give. The US will not bail us out.