Devolved nations demand urgent meeting with chancellor as Tory top team doubles down on plan to cut spending

Published

3 years ago

October 1, 2022

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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.

“[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.

“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.

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.

World

Israel attacks Houthi targets at three ports and power plant in Yemen

Published

16 mins ago

July 7, 2025

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Israel attacks Houthi targets at three ports and power plant in Yemen

Israel says its military has attacked Houthi targets at three ports and a power plant in Yemen.

Defence minister Israel Katz confirmed the strikes, saying they were carried out due to repeated attacks by the Iranian-backed rebel group on Israel.

Mr Katz said the Israeli military attacked the Galaxy Leader ship which he claimed was hijacked by the Houthis and was being used for “terrorist activities in the Red Sea”.

It came after the Israel Defense Forces (IDF) issued an evacuation warning for people at Hodeidah, Ras Issa, and Salif ports – as well as the Ras al Khatib power station, which it said is controlled by Houthi rebels.

The IDF said it would carry out airstrikes on those areas due to “military activities being carried out there”.

Afterwards, Mr Katz confirmed the strikes at the ports and power plant.

Earlier in the day, a ship was reportedly set on fire after being attacked in the Red Sea.

A private security company said the assault, off the southwest coast of Yemen, resembled that of the Houthi militant group.

It was the first such incident reported in the vital shipping corridor since mid-April.

The vessel, identified as the Liberian-flagged, Greek-owned bulk carrier Magic Seas, had taken on water after being hit by sea drones, maritime security sources said. The crew later abandoned the ship.

The Houthi rebels have been launching missile and drone attacks against commercial and military ships in the region in what the group’s leadership called an effort to end Israel’s offensive against Hamas in Gaza.

Between November 2023 and January 2025, the Houthis targeted more than 100 merchant vessels with missiles and drones, sinking two of them and killing four sailors.

The Houthis paused attacks in a self-imposed ceasefire until the US launched an assault against the rebels in mid-March.

That ended weeks later and the Houthis have not attacked a vessel, though they have continued occasional missile attacks targeting Israel.

A renewed Houthi campaign against shipping could again draw in US and Western forces to the area.

The ship attack comes at a sensitive moment in the Middle East.

A possible ceasefire in the Israel-Hamas war hangs in the balance and Iran is weighing up whether to restart negotiations over its nuclear programme.

It follows American airstrikes last month, which targeted its most-sensitive atomic sites amid an Israeli war against the Islamic Republic that ended after 12 days.

How did the Houthis come to control much of Yemen?

A civil war erupted in Yemen in late 2014 when the Houthis seized Sanaa.

Worried by the growing influence of Shia Iran along its border, Saudi Arabia led a Western-backed coalition in March 2015, which intervened in support of the Saudi-backed government.

The Houthis established control over much of the north and other large population centres, while the internationally recognised government based itself in the port city of Aden.

World

‘We’ll never yield’: Millions of Iranians unite in mourning

Published

16 mins ago

July 7, 2025

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'We'll never yield': Millions of Iranians unite in mourning

Under the red flag of martyrdom, they beat their chests in memory of a fallen religious leader as the cleric recounts his fate outside one of Tehran’s oldest mosques.

Imam Hussein was tricked and martyred by his enemies in the seventh-century battle of Karbala. The crowd of grown men and women wept with grief as Hussein’s story was retold on Sunday.

Ashura is always deeply moving for the Shia faithful but this year even more so. It comes after the trauma of Israel’s surprise attacks on Iran.

There was a sense of emotional release and a chance for Iranians to come together in solidarity.

Ashura is also a reminder that Iran’s revolutionary leaders draw much of their power from the strength of religion in this country after a conflict its enemies hoped would see those same leaders toppled.

The festival has come at just the right time for its embattled government.

Iran’s supreme leader has appeared in public for the first time since Israel attacked his country. Ayatollah Ali Khamenei was greeted with ecstatic cheers by his followers at Ashura prayers.

His supporters told us they welcomed his return. “I was so happy that I didn’t know what to do,” said one woman. “This caused our big enemies the United States and Israel to receive a great slap in the mouth.”

“His appearance on TV for Ashura,” a young man told us, “showed that all the talk about him hiding and taking the path of peace with the United States is not true and it shows that he is holding his position strongly and steadfastly”.

We had been given rare access to Iran among a handful of journalists who were let in after the 12-day war.

Its scars aren’t hard to find – buildings left with gaping holes where Israeli airstrikes took out members of Iran’s elite, one after another.

And Abbas Aslani, an analyst with close ties to the government, says there is a fear it may not be over.

“The Iranian government and the army are prepared for a new round of conflict, because they think that the other party, specifically Israel, is not to be trusted in terms of any ceasefire,” he said.

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At the Ashura ceremony, the crowd chants, “we’ll never yield to humiliation” – an age-old message for Iran’s enemies today as they brace for the possibility of more conflict.

World

What is the possible Gaza hostage and ceasefire deal – and what challenges could lie ahead?

Published

6 hours ago

July 6, 2025

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What is the possible Gaza hostage and ceasefire deal - and what challenges could lie ahead?

An Israeli delegation is heading to Qatar for indirect talks with Hamas on a possible hostage and ceasefire deal in Gaza.

The development comes ahead of a meeting between Israeli Prime Minister Benjamin Netanyahu and US President Donald Trump in Washington DC on Monday aimed at pushing forward peace efforts.

The US leader has been increasing pressure on the Israeli government and Hamas to secure a permanent ceasefire and an end to the 21-month-long war in Gaza.

Mr Trump said on Tuesday on social media that Israel had agreed “to the necessary conditions to finalise” a deal on a truce.

And Hamas, which runs the coastal Palestinian territory, said on Friday it has responded to the US-backed proposal in a “positive spirit”.

So what is in the plan?

The plan is for an initial 60-day ceasefire that would include a partial release of hostages held by the militant group in exchange for more humanitarian supplies being allowed into Gaza.

The proposed truce calls for talks on ending the war altogether.

The war in Gaza began after Hamas attacked Israel on 7 October 2023, killing 1,200 people and taking 250 others hostage. Dozens of hostages have since been released or rescued by Israeli forces, while 50 remain in captivity, including about 30 who Israel believes are dead.

The proposal would reportedly see about half of the living hostages and about half of the dead hostages returned to Israel over 60 days, in five separate releases.

Eight living hostages would be freed on the first day and two released on the 50th day, according to an Arab diplomat from one of the mediating countries, it is reported.

Five dead hostages would be returned on the seventh day, five more on the 30th day and eight more on the 60th day.

That would leave 22 hostages still held in Gaza, 10 of them believed to be alive. It is not clear whether Israel or Hamas would determine who is to be released.

Hamas has sought guarantees that the initial truce would lead to a total end to the war and the withdrawal of Israeli troops from Gaza.

A Hamas official has said Mr Trump has guaranteed that the ceasefire will extend beyond 60 days if necessary to reach a peace deal, but there is no confirmation from the US of such a guarantee.

Possible challenges ahead

And in a sign of the potential challenges still facing the two sides, a Palestinian official from a militant group allied with Hamas said concerns remained.

The concerns were over humanitarian aid, passage through the Rafah crossing in southern Israel to Egypt and clarity over a timetable for Israeli troop withdrawals.

Hamas’s “positive” response to the proposal had slightly different wording on three issues around humanitarian aid, the status of the Israeli Defense Forces (IDF) inside Gaza and the language around guarantees beyond the 60-day ceasefire, a source with knowledge of the negotiations revealed.

But the source told Sky News: “Things are looking good.”

The Times of Israel reported Hamas has proposed three amendments to the proposed framework.

According to a source, Hamas wants the agreement to say that talks on a permanent ceasefire will continue until an agreement is reached; that aid will fully resume through mechanisms backed by the United Nations and other international aid organisations; and that the IDF withdraws to positions it maintained before the collapse of the previous ceasefire in March.

Mr Netanyahu’s office said in a statement that changes sought by Hamas to the ceasefire proposal were “not acceptable to Israel”.

However, his office said the delegation would still fly to Qatar to “continue efforts to secure the return of our hostages based on the Qatari proposal that Israel agreed to”.

Another potential challenge is that Mr Netanyahu has repeatedly said Hamas must be disarmed, which is a demand the militant group has so far refused to discuss.

Hamas has said it is willing to free all the hostages in exchange for a full withdrawal of Israeli troops and an end to the war in Gaza.

Israel rejects that offer, saying it will agree to end the war if Hamas surrenders, disarms and goes into exile – something that the group refuses.

Previous negotiations have stalled over Hamas demands of guarantees that further negotiations would lead to the war’s end, while Mr Netanyahu has insisted Israel would resume fighting to ensure the group’s destruction.