Devolved nations demand urgent meeting with chancellor as Tory top team doubles down on plan to cut spending
The devolved governments of the UK want an urgent meeting with Chancellor Kwasi Kwarteng to discuss immediate action to reverse the damaging effects of the mini-budget.
In a joint letter, the finance ministers of Wales, Scotland and Northern Ireland are warning that the government’s spending plans are a “huge gamble” that will mean another decade of austerity.
It comes as one of Liz Truss‘s closest political allies doubled down on the government’s economic policy, with warnings that major cuts in public spending are to come.
Levelling Up Secretary Simon Clarke, who is among the prime minister’s inner circle, told The Times that the British people need to expect significant cuts in public spending, because for too long the West has been living in a “fool’s paradise”.
Following on from Chancellor Kwasi Kwarteng‘s tax-cutting mini-budget, he said the government needs to make sure the “extremely large” state is in “full alignment with a lower tax economy”.
It has led to fears another period of austerity is just around the corner, with the hardest hit likely to be those reliant on welfare.
In their letter to Mr Kwarteng, Welsh Finance Minister Rebecca Evans joined finance ministers from Scotland and Northern Ireland in highlighting the profound impact of “the largest set of unfunded tax cuts for the rich in over 50 years” stating it was “a huge gamble on public finances and the health of our economy”
They warned against being condemned to another decade of austerity and expressed deep concern over reports that UK government departments would be asked to make spending cuts to balance the budget, which may have profound consequences for devolved budget settlements already eroded by inflation.
But Mr Clarke told The Times: “Western Europe is just living in a fool’s paradise whereby we can be ever less productive relative to our peers, and yet still enjoy a very large welfare state and persist in thinking that the two are somehow compatible over the medium to long term.
“They’re not. We need to address that… if we want those strong public services then we are going to have to pay for them.
“It is important that we look at a state which is extremely large, and look at how we can make sure that it is in full alignment with a lower tax economy.”
It comes on the eve of the Conservative Party conference and the chancellor defending his mini-budget by saying the government “had no other choice” than to do “something different” to spark the economy.
The mini-budget resulted in a tumultuous week which saw the pound fall to an all-time low against the dollar and the Bank of England being forced to spend billions to prevent a collapse of the pensions industry.
‘What the Thatcher government was doing in the 1980s’
Mr Clarke admitted it had been an “uncomfortable week” and defended Ms Truss, but said she would not be deflected from policies they predicted would be unpopular, and suggested her task was analogous to that faced by Margaret Thatcher in the 1980s.
“If I was to describe one word for Liz… it is purposeful,” he said. “She knew – and this was certainly something we discussed during the summer – that this would not be a comfortable process.
Read more:
Truss admits ‘disruption’ to UK economy but stands by forecast-free mini-budget
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PM acknowledges ‘some disruption’ to UK economy following mini-budget
“[She knew] particularly early on, there would be real potential unpopularity to be courted in seeking to say things and do things which weren’t going to be easy or quick wins. Frankly, she is doing what she believes is right.
“In some ways, there is an analogy with the 1980s and what the Thatcher government was seeking to do in terms of a reset moment where you fundamentally revisit how not just the previous government but multiple governments.”
‘We intend to be extremely rigorous’
Wales Secretary Sir Robert Buckland told Sky News that, while the government would work within its existing three-year spending review package, families could expect to find out what ministers are planning in the next few weeks.
Mr Buckland said he hopes the government’s upcoming announcements will be seen by the market as displaying “fiscal discipline”.
He appeared to confirm what Mr Clarke was suggesting when he said: “We intend to be extremely rigorous when it comes to bearing down on public expenditure.
“That will be developed in the weeks ahead. We’ve got a whole range of announcements coming out on not just spending, but supply-side reforms.
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Chair of OBR Richard Hughes says chancellor will be updated on Friday
“Whether it’s childcare… or… broadband connectivity, all these things add up to an overall package that is designed to, first of all, facilitate growth in the economy, but secondly to emphasise that the government is responsible.”
‘We had to do something different’
Overnight, Mr Kwarteng said the public expected public spending to be tightly controlled.
He wrote in The Daily Telegraph: “The British taxpayer expects their government to work as efficiently and effectively as possible, and we will deliver on that expectation.
“Not all the measures we announced last week will be universally popular. But we had to do something different. We had no other choice.”
The chancellor insisted he would produce a “credible plan” to get public finances on track with a “commitment to spending discipline”.
On Friday night, Ms Truss acknowledged for the first time that “there has been disruption” to the UK economy following last week’s mini-budget.
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‘Liz Truss is a danger to the economy’ says Starmer
Asked on Friday whether she accepted this was a crisis of the government’s own making, the prime minister said: “It was very, very important that we took urgent steps to deal with the costs that families are facing this winter, putting in place the energy price guarantee for which we’ve had to borrow to cover the cost… but also making sure that we are not raising taxes at a time where there are global economic forces caused by the war in Ukraine that we need to deal with.
“I recognise there has been disruption. But it was really, really important that we were able to get help to families as soon as possible.”
Nick Thomas-Symonds, shadow international trade secretary, told Sky News on Saturday: “This is a Tory crisis, made in Downing Street… They’ve crashed the economy by handing out enormous unfunded tax cuts to the very wealthiest people, and it’s going to be working people across the country that pay the price for this.
“They’ve also trashed our international reputation… and… what the government has done is going to lead to economic pain for people that they have chosen… What the government needs to do is recall Parliament and withdraw this budget.”
Truss and Kwarteng met top officials from Britain’s Office for Budget Responsibility (OBR) on Friday.
Mr Kwarteng intends to publish an updated set of economic forecasts from the Office for Budget Responsibility (OBR) and a medium-term fiscal plan setting out how he plans to bring down government debt on 23 November.
US President Donald Trump is putting “heavy” pressure on Israeli Prime Minister Benjamin Netanyahu to end the war in Gaza, two sources close to the ceasefire negotiations have told Sky News.
One US source said: “The US pressure on Israel has begun, and tonight it will be heavy.”
The source, who is not authorised to speak publicly, was referring to the White House dinner on Monday night between Trump and Netanyahu.
A second Middle Eastern diplomatic source agreed that the American pressure on Israel would be intense.
Benjamin Netanyahu gave Donald Trump a letter saying he had nominated him for a Nobel Peace Prize. Pic: AP
Netanyahu arrived in Washington DC in the early hours of Monday morning and held meetings on Monday with Steve Witkoff, Trump’s Middle East envoy, and Marco Rubio, the secretary of state and national security adviser.
The Israeli prime minister plans to be in Washington until Thursday with meetings on Capitol Hill on Tuesday.
Trump has made clear his desire to bring the Gaza conflict to an end.
However, he has never articulated how a lasting peace, which would satisfy both the Israelis and Palestinians, could be achieved.
His varying comments about ownership of Gaza, moving Palestinians out of the territory and permanent resettlement, have presented a confusing policy.
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‘Israel has shifted towards economy of genocide’
Situation for Palestinians worse than ever
Over the coming days, we will see the extent to which Trump demands that Netanyahu accepts the current Gaza ceasefire deal, even if it falls short of Israel’s war aims – the elimination of Hamas.
The strategic objective to permanently remove Hamas seems always to have been impossible. Hamas as an entity was the extreme consequence of the Israeli occupation.
The Palestinians’ challenge has not gone away, and the situation for Palestinians now is worse than it has ever been in Gaza and also the West Bank. It is not clear how Trump plans to square that circle.
Read more:
Explainer – What is the possible Gaza hostage and ceasefire deal?
Israeli soldier describes arbitrary killing of civilians in Gaza
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‘Some Israeli commanders can decide to do war crimes’
Trump’s oft-repeated desire to “stop the killing” is sincere. Those close to him often emphasise this. He is also looking to cement his legacy as a peacemaker. He genuinely craves the Nobel Peace Prize.
In this context, the complexities of conflicts – in Ukraine or Gaza – are often of secondary importance to the president.
If Netanyahu can be persuaded to end the war, what would he need?
The hostages back – for sure. That would require agreement from Hamas. They would only agree to this if they have guarantees on Gaza’s future and their own future. More circles to square.
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Trump 100: We answer your questions
Was White House dinner a key moment?
The Monday night dinner could have been a key moment for the Middle East. Two powerful men in the Blue Room of the White House, deciding the direction of the region.
Will it be seen as the moment the region was remoulded? But to whose benefit?
Trump is a dealmaker with an eye on the prize. But Netanyahu is a political master; they don’t call him “the magician” for nothing.
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
Trump makes decisions instinctively. He can shift position quickly and often listens to the last person in the room. Right now – that person is Netanyahu.
Gaza is one part of a jigsaw of challenges, which could become opportunities.
Diplomatic normalisation between Israel and the Arab world is a prize for Trump and could genuinely secure him the Nobel Peace Prize.
But without the Gaza piece, the jigsaw is incomplete.
World
IDF presence in Gaza ‘only issue’ still to be resolved in push for Israel-Hamas ceasefire, Sky News understands
Only one issue remains unresolved in the push to achieve a ceasefire in Gaza, according to Sky sources.
Intense negotiations are taking place in Qatar in parallel with key talks in Washington between US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu.
Two sources with direct knowledge of the negotiations have told Sky News that disagreement between Israel and Hamas remains on the status and presence of the Israel Defence Forces (IDF) inside Gaza.
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Gaza ceasefire deal in progress
The two sides have bridged significant differences on several other issues, including the process of delivering humanitarian aid and Hamas’s demand that the US guarantees to ensure Israel doesn’t unilaterally resume the war when the ceasefire expires in 60 days.
On the issue of humanitarian aid, Sky News understands that a third party that neither Hamas nor Israel has control over will be used in areas from which the IDF withdraws.
Benjamin Netanyahu briefed reporters on Capitol Hill about the talks on Tuesday. Pic: AP
This means that the controversial Gaza Humanitarian Foundation (GHF) – jointly run by an American organisation and Israel – will not be able to operate anywhere where the IDF is not deployed. It will limit GHF expansion plans.
It is believed the United Nations or other recognised humanitarian organisations will adopt a greater role.
On the issue of a US guarantee to prevent Israel restarting the war, Sky News understands that a message was passed to Hamas by Dr Bishara Bahbah, a Palestinian American who has emerged as a key back channel in the negotiations.
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
Read more from Sky News:
Trump puts pressure on Netanyahu
Netanyahu backs Trump for peace prize
Potential Gaza deal explained
The message appears to have been enough to convince Hamas that President Trump will prevent Israel from restarting the conflict.
However, there is no sense from any of the developments over the course of the past day about what the future of Gaza looks like longer-term.
Final challenge is huge
The last remaining disagreement is, predictably, the trickiest to bridge.
Israel’s central war aim, beyond the return of the hostages, is the total elimination of Hamas as a military and political organisation. The withdrawal of the IDF, partial or total, could allow Hamas to regroup.
One way to overcome this would be to provide wider guarantees of clear deliverable pathways to a viable future for Palestinians.
But there is no sense from the negotiations of any longer-term commitments on this issue.
Two key blocks have been resolved over the past 24 hours but the final challenge is huge.
The conflict in Gaza erupted when Hamas attacked southern Israel in October 2023, killing around 1,200 people and taking 251 hostages, according to Israeli figures. Some 20 hostages are believed to remain alive in Gaza.
Israel has killed more than 57,000 Palestinians, according to Gaza’s Hamas-run health ministry, which does not distinguish between combatants and civilians.
World
‘Widespread sexual violence’ took place during Hamas’s 7 October attacks, report by Israeli experts says
A newly released report led by Israeli legal and gender experts presents detailed evidence alleging “widespread and systematic” sexual violence during the Hamas-led terror attack on 7 October.
Warning: This story contains descriptions of rape and sexual violence
The findings, published by the Dinah Project, argue that these acts amount to conflict-related sexual violence (CRSV), and assert that “Hamas used sexual violence as a tactical weapon of war”.
The report draws on 18 months of investigation and is based on survivor testimonies, eyewitness accounts, and interviews with first responders, morgue personnel and healthcare professionals.
According to the Dinah Project, the documented patterns – such as forced nudity, gang rapes, genital mutilation, and threats of forced marriage – indicate a deliberate and coordinated use of sexual violence by Hamas operatives during the attack.
Reported incidents span at least six locations, including the Nova music festival, and several kibbutzim in southern Israel.
A destroyed car near the police station in Sderot, following the 7 October attacks by Hamas. Pic: AP
One section of the report describes victims “found fully or partially naked from the waist down, with their hands tied behind their backs and/or to structures such as trees and poles, and shot”.
At the Nova music festival and surrounding areas, the investigators found “reasonable grounds to believe” that multiple women were raped or gang-raped before being killed.
The report’s findings are consistent with earlier investigations by the United Nations and the International Criminal Court (ICC).
Read more:
What is the possible Gaza hostage and ceasefire deal?
Israeli soldier describes arbitrary killing of civilians in Gaza
The UN’s Special Representative on Sexual Violence in Conflict previously concluded that there were “reasonable grounds to believe” CRSV took place during the attack.
Destroyed vehicles near the grounds of the Supernova electronic music festival. Pic: AP
Significantly, the Dinah Project urges the international community to officially recognise the use of sexual violence by Hamas as a deliberate strategy of war and calls on the United Nations to add Hamas to its list of parties responsible for conflict-related sexual violence.
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
The nature and scale of sexual violence on 7 October have been a subject of intense controversy, with some accusing parties of weaponising the narrative for political ends.
This report seeks to confront what its authors call “denial, misinformation, and global silence,” and to provide justice for the victims.
Hamas has denied that its fighters have used sexual violence and mistreated female hostages.
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