Kwasi Kwarteng: What a day! Chancellor admits fiscal plan caused ‘a little turbulence’ but vows to plough on with economic plan

Published

3 years ago

October 3, 2022

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The chancellor has admitted it has been a tough day after he was forced to U-turn on cutting income tax for the rich.

Kwasi Kwarteng began his keynote speech at the Conservative Party conference by saying: “What a day, it has been tough but we need to focus on the job in hand.”

Just hours earlier he announced he was ditching plans to remove the 45p rate of income tax for the wealthiest 1%, announced at the mini-budget 10 days ago.

He admitted his economic plan had caused “a little turbulence” but continued to back his vision for growth, saying: “With economic growth, everybody benefits, and I mean, everybody.”

Chancellor vows ‘no more distractions’ – follow live updates from Birmingham

In his original speech, before the U-turn, he had been set to say the government must “stay the course”.

But after acknowledging the change briefly, he said the government was ploughing ahead with boosting economic growth across the UK.

“We need to move forward. No more distractions. We have a plan and we need to get on and deliver it. That is what the public expect from the government,” he told Tory members in Birmingham.

“We’ve done it before and we can do it again.”

The chancellor said the path the country was on was “unsustainable” and said “we had no choice, the price of inaction would have been far greater than the cost of the scheme”.

And he said his plan to cut taxes to boost growth “isn’t radical, isn’t irresponsible” and will put more money in people’s pockets.

Sky News’ deputy political editor Sam Coates said: “There was just so much not addressed so you were left thinking what was it he wanted people to take away from that?

“At this conference, they’re desperate to try to get some political credit for the £45 billion they’ve committed to spending.”

He added that the chancellor did not mention how the plan is fiscally responsible and if it is staying within their budget.

Coates also said one of the biggest political challenges over the next 18 months will be the consequence of higher interest rates but there was “not a word about that either”.

A stony silence from the audience as chancellor gives dull, uninformative speech

The chancellor’s speech was most interesting for what he didn’t say.

We heard the familiar refrain that this is a government that will “do things differently”, that growth is the big priority, that tax cuts are the way forward.

But there was no acknowledgement of a screeching U-turn on the 45p tax cut, and little detail on how “fiscal discipline” will be achieved.

There was no contrition, beyond an admission it had been a “tough” day.

Under the circumstances, it was a pretty dull speech; the conference audience was polite, but fairly quiet.

Then again, it may be that not making new news lines was the best possible outcome for Kwasi Kwarteng.

The loudest applause came when the chancellor talked about Brexit and Ukraine.

Red meat for the membership, but when he said this government “will always be on the side of people who need help the most” the applause was muted.

Ministers in the front row cheered loudly, but behind them there were stony faces.

His words are at odds with claims his plans disproportionately favour the wealthy: tax cuts for the richest, ending the cap on bankers bonuses amidst speculation about welfare cuts.

The front bench will have to do more than just cheer loudly if they are going to convince those who think they are the party of the rich.

The chancellor’s first words to the conference hall were “what a day!” and he was not wrong.

It was an extraordinary context for a chancellor’s conference speech.

Crisis talks last night led to the screeching U-turn on the government’s plans to cut the 45p top rate of tax.

The PM was the first to applaud on the front row – the trouble for her is she has portrayed herself as an unwavering, steely leader who is willing to push through unpopular decisions.

Can she credibly maintain that claim after what’s happened today?

Labour MP Chris Bryant told Sky News he had “never heard such an uninspiring speech from a chancellor”.

“That’s the most extraordinary thing, condemning the fact that we have very low growth at the moment and that we’ve had had it for the last 12 years compared with the Labour years,” he added.

“He was complaining about the high tax rate, even though he’s voted for all the 15 rises in taxes over the last few years. It’s just the most bizarre speech I’ve ever heard.”

Shadow Chancellor Rachel Reeves said the speech showed the chancellor and government are “completely out of touch, with no understanding on its own appalling record on growth”.

She said the budget is “an economic crisis made in Downing Street, paid for by working people” and called for them to reverse the budget “and abandon their discredited, dangerous trickle down approach”.

Sarah Olney, the Lib Dem’s Treasury spokeswoman, said Mr Kwarteng’s speech will bring “cold comfort” to struggling households.

World

What’s it like with the National Guard on the streets of DC?

Published

4 hours ago

August 22, 2025

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What's it like with the National Guard on the streets of DC?

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What’s it like on the streets of DC right now, as thousands of federal police patrol the streets?

Who is Steve Witkoff, the US envoy regularly meeting Vladimir Putin and Benjamin Netanyahu to broker peace in Ukraine and Gaza?

And why is Californian Governor Gavin Newsom now tweeting like Donald Trump?

Martha Kelner and Mark Stone answer your questions.

If you’ve also got a question you’d like the Trump100 team to answer, you can email it to trump100@sky.uk.

You can also watch all episodes on our YouTube channel.

World

It’s been a confusing week – and Trump’s been made to look weak

Published

4 hours ago

August 22, 2025

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It’s been a confusing week.

The Monday gathering of European leaders and Ukraine’s president with Donald Trump at the White House was highly significant.

Ukraine latest: Trump changes tack

The leaders went home buoyed by the knowledge that they’d finally convinced the American president not to abandon Europe. He had committed to provide American “security guarantees” to Ukraine.

The details were sketchy, and sketched out only a little more through the week (we got some noise about American air cover), but regardless, the presidential commitment represented a clear shift from months of isolationist rhetoric on Ukraine – “it’s Europe’s problem” and all the rest of it.

Yet it was always the case that, beyond that clear achievement for the Europeans, Russia would have a problem with it.

Trump’s envoy’s language last weekend – claiming that Putin had agreed to Europe providing “Article 5-like” guarantees for Ukraine, essentially providing it with a NATO-like collective security blanket – was baffling.

Russia gives two fingers to the president

And throughout this week, Russia’s foreign minister Sergei Lavrov has repeatedly and predictably undermined the whole thing, pointing out that Russia would never accept any peace plan that involved any European or NATO troops in Ukraine.

“The presence of foreign troops in Ukraine is completely unacceptable for Russia,” he said yesterday, echoing similar statements stretching back years.

Remember that NATO’s “eastern encroachment” was the justification for Russia’s “special military operation” – the invasion of Ukraine – in the first place. All this makes Trump look rather weak.

It’s two fingers to the president, though interestingly, the Russian language has been carefully calibrated not to poke Trump but to mock European leaders instead. That’s telling.

The bilateral meeting (between Putin and Zelenskyy) hailed by Trump on Monday as agreed and close – “within two weeks” – looks decidedly doubtful.

Maybe that’s why he went along with Putin’s suggestion that there be a bilateral, not including Trump, first.

It’s easier for the American president to blame someone else if it’s not his meeting, and it doesn’t happen.

NATO defence chiefs met on Wednesday to discuss the details of how the security guarantees – the ones Russia won’t accept – will work.

European sources at the meeting have told me it was all a great success. And to the comments by Lavrov, a source said: “It’s not up to Lavrov to decide on security guarantees. Not up to the one doing the threatening to decide how to deter that threat!”

The argument goes that it’s not realistic for Russia to say from which countries Ukraine can and cannot host troops.

Would Trump threaten force?

The problem is that if Europe and the White House want Russia to sign up to some sort of peace deal, then it would require agreement from all sides on the security arrangements.

The other way to get Russia to heel would be with an overwhelming threat of force. Something from Trump, like: “Vladimir – look what I did to Iran…”. But, of course, Iran isn’t a nuclear power.

Something else bothers me about all this. The core concept of a “security guarantee” is an ironclad obligation to defend Ukraine into the future.

Future guarantees would require treaties, not just a loose promise. I don’t see Trump’s America truly signing up to anything that obliges them to do anything.

A layered security guarantee which builds over time is an option, but from a Kremlin perspective, would probably only end up being a repeat of history and allow them another “justification” to push back.

Image and reality don’t seem to match

Among Trump’s stream of social media posts this week was an image of him waving his finger at Putin in Alaska. It was one of the few non-effusive images from the summit.

He posted it next to an image of former president Richard Nixon confronting Soviet leader Nikita Khrushchev – an image that came to reflect American dominance over the Soviet Union.

That may be the image Trump wants to portray. But the events of the past week suggest image and reality just don’t match.

The past 24 hours in Ukraine have been among the most violent to date.

World

At least 17 dead in Colombia after car bombing and helicopter attack

Published

4 hours ago

August 22, 2025

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At least 17 dead in Colombia after car bombing and helicopter attack

At least 17 people were killed after a car bombing and an attack on a police helicopter in Colombia, officials have said.

Authorities in the southwest city of Cali said a vehicle loaded with explosives detonated near a military aviation school, killing five people and injuring more than 30.

Authorities said at least 12 died in the attack on a helicopter transporting personnel to an area in Antioquia in northern Colombia, where they were to destroy coca leaf crops – the raw material used in the production of cocaine.

Antioquia governor Andres Julian said a drone attacked the helicopter as it flew over coca leaf crops.

Colombian President Gustavo Petro attributed both incidents to dissidents of the defunct Revolutionary Armed Forces of Colombia (FARC).

He said the aircraft was targeted in retaliation for a cocaine seizure that allegedly belonged to the Gulf Clan.

Who are FARC, and are they still active?

The Revolutionary Armed Forces of Colombia, a Marxist guerrilla organisation, was the largest of the country’s rebel groups, and grew out of peasant self-defence forces.

It was formed in 1964 as the military wing of the Colombian Communist Party, carrying out a series of attacks against political and economic targets.

In 2016, after more than 50 years of civil war, FARC rebels and the Colombian government signed a peace deal.

It officially ceased to be an armed group the following year – but some small dissident groups rejected the agreement and refused to disarm.

According to a report by Colombia’s Truth Commission in 2022, fighting between government forces, FARC, and the militant group National Liberation Army had killed around 450,000 people between 1985 and 2018.

Both FARC dissidents and members of the Gulf Clan operate in Antioquia.

It comes as a report from the United Nations Office on Drugs and Crime found that coca leaf cultivation is on the rise in Colombia.

The area under cultivation reached a record 253,000 hectares in 2023, according to the UN’s latest available report.