Kwasi Kwarteng: What a day! Chancellor admits fiscal plan caused ‘a little turbulence’ but vows to plough on with economic plan
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%, unveiled at the mini-budget 10 days ago.
And after his speech, it was revealed Mr Kwarteng is bringing forward his medium-term financial statement from 23 November to this month, despite this morning saying he would not.
He admitted to Tory members 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.
So much left unsaid
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 £45bn 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”.
Read more:
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It’s not clear which policy tipped markets over the edge – or which chancellor can reverse to put genie back in the bottle
Most bizarre speech I’ve ever heard
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.”
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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”.
Liz Truss, flanked by deputy PM Therese Coffey and Chancellor of the Duchy of Lancaster Nadhim Zahawi applauded the chancellor’s speech
Sarah Olney, the Lib Dem’s Treasury spokeswoman, said Mr Kwarteng’s speech will bring “cold comfort” to struggling households.
World
Tanks gather near Israeli-Lebanon border – as defence minister hold talks over ‘expansion’ of IDF activity
Israeli defence minister Yoav Gallant has held talks over the possibility of expanding Israel’s military offensive – as tanks were pictured on the country’s border with Lebanon.
In a statement on Saturday, Mr Gallant’s office said he was conducting “an operational situation assessment” regarding what it called “the expansion of IDF (Israel Defence Forces) activities in the northern arena”.
Israeli tanks and troops were later pictured near the border, in what Sky News’ security and defence editor Deborah Haynes said is the “clearest sign yet” that Israel’s conflict with Hezbollah is “about to expand even further”.
The military said it was mobilising three more battalions of reserve soldiers to serve across the country. It had already sent two brigades to northern Israel to prepare for a possible ground invasion.
The deployment comes after Hezbollah confirmed that its leader of more than three decades Hassan Nasrallah was killed in an Israeli airstrike in Beirut on Friday.
Yoav Gallant holds a meeting with senior IDF officers. Pic: Israeli defence ministry
The militant group – which is aligned with Iran – vowed to continue its fight against Israel even as attacks continued to bombard areas around Lebanon’s capital.
At least six people were killed in the strikes – not including Nasrallah – and 91 were wounded, according to preliminary figures from Lebanon’s health ministry.
Israeli military tanks gather by the Israeli-Lebanon border. Pic: AP
The United Nations high commissioner for refugees said that airstrikes led to the displacement of “well over 200,000” people inside Lebanon.
“More than 50,000 Lebanese people, and Syrians living in Lebanon, have crossed the border into Syria,” Filippo Grande wrote on X on Saturday.
‘Israel is on the move’
In his first public remarks since the killing, Israeli Prime Minister Benjamin Netanyahu described Nasrallah as a “terrorist” and said his killing would help bring displaced Israelis back to their homes in the north and would pressure Hamas to free Israeli hostages held in Gaza.
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Netanyahu: Nasrallah ‘was the terrorist’
But with the threat of retaliation high, he said the coming days would bring “significant challenges” and warned Iran against trying to strike.
“There is no place in Iran or the Middle East that the long arm of Israel will not reach, and today you already know how true this is,” Mr Netanyahu said.
Pic: AP
“We have great achievements, but the work is not yet complete. In the coming days we will face significant challenges, and we will face them together,” he added.
“We are determined to continue to strike at our enemies, return our residents to their homes, and return all our abductees. We do not forget them for a moment.
“Israel is on the move.”
Protesters chant during an anti-Israel demonstration in Tehran. Pic: Majid Asgaripour/WANA
Iranian Supreme Leader Ayatollah Ali Khamenei condemned the killing and announced five days of mourning. He said Lebanon will make Israel “regret their actions” and Nasrallah’s blood “will not go unavenged”.
In a letter to the UN Security Council, Iran’s UN ambassador Amir Saeid Iravani asked for an “emergency meeting” of the 15-member body, calling on it to “compel Israel” to cease all military action in both Gaza and Lebanon and “comply with relevant UNSC resolutions”.
Read more:
Is wider war in the Middle East now inevitable?
Hezbollah and Iran must now decide to fight or back down
Pic: Majid Asgaripour/WANA
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Meanwhile, hundreds of protesters took to the streets of Tehran, waving Hezbollah flags and chanting “death to Israel” and “death to Netanyahu the murderer”.
People also gathered in the Lebanese city of Sidon and in Amman, Jordan, to mourn Nasrallah. The 64-year-old had countless followers across the Arab and Islamic world, but was viewed as an extremist in much of the West.
The pictures from Beirut are unnerving to say the least, the predictions for the immediate future even more so.
With the dust still settling from this game-changing assassination of Hassan Nasrallah, there are pressing questions crying out for answers.
Most of all, is the Middle East about to erupt into a regional conflict that threatens us all? That’s been the warning for almost a year, so is it about to happen?
Not if America and its allies can help it.
Follow latest: Iran warns Israel will ‘regret their actions’
Hezbollah is a designated terrorist organisation for the US, UK and other Western nations. It has killed hundreds of their citizens over the years.
There is no doubt President Joe Biden has felt what he called a “measure of justice” that Nasrallah has been killed.
But there is also a fear of what comes next. From the president down we are hearing urgent calls for de-escalation and a diplomatic solution. And the US has rushed military assets to ward off Hezbollah’s patrons in Iran doing their worst. But will that be enough?
Lebanese Red Cross workers inspect a destroyed building. Pic: AP
US-led diplomacy to contain the Middle East crisis has failed.
A senior Middle Eastern diplomat told Sky News the assassination is a kick in the teeth for the US president.
“For all the bombs and billions he has given the Israelis,” he said, “the least they could have done for him in the last weeks of his presidency was a ceasefire in the region”.
With diplomacy stalled, what happens next depends on both Iran and Israel.
For its part, Iran may feel it has no alternative but to weigh in. It may fear the massive missile arsenal it supplied is so jeopardised it must intervene and save Hezbollah.
Smoke rises as a building collapses in Beirut’s southern suburbs. Pic: AP
Iranians have long regarded Hezbollah as an insurance policy for the day Israel might attack Iran itself. If it sees its ally close to total collapse, might it then weigh in?
If it does, Israel’s allies led by America might feel compelled to come to its defence. The full scale war feared for almost a year could engulf the region.
But there are good reasons for Iran not to rush to action.
The Middle East seems a dangerous and unpredictable place but certain rules and assumptions apply, even in all its chaos.
For all their fanaticism, the ayatollahs of Tehran are pragmatic and seek the preservation of their grip on power above all. That has been a rule of the Middle Eastern jungle since they seized power 45 years ago.
Is it pragmatic or wise to up the ante and more directly support Hezbollah, when it is at its weakest? The Iranian regime is not that strong either, crippled economically by sanctions and mismanagement, and socially and politically by months of civil unrest, albeit now quashed.
Keep up with all the latest news from the UK and around the world by following Sky News
There are limits too to what Iran could achieve with direct military intervention anyway in a war that is 2,000km from its borders. The Iranians may conclude this round in the war against Israel is over. They think in long time spans, after all. Time to regroup and move on to fight another day?
There will no doubt be days more of sound and fury, like we have seldom seen before. The mourning and funerals of Nasrallah and his lieutenants are likely to be the focus of intense anger and will raise tensions. But what happens afterwards?
That also comes down to Israel.
People stand next to IDF tanks in northern Israel. Pic: Reuters
It may now feel it has the wind in its sails and seize the moment to invade Lebanon on the ground to push Hezbollah back from the border. That would be an extremely dangerous moment too, potentially drawing in supportive militia and Iranian forces based in Syria.
The hills of southern Lebanon are a treacherous country for a military like Israel’s that relies on infantry and tanks. They could be drawn into a lengthy and punishing campaign that could then destabilise the region.
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What does Nasrallah’s death mean for Hezbollah?
Read more:
Analysis: Hezbollah and Iran must decide to fight or back down
Who was Hassan Nasrallah?
Then there is Lebanon itself. An uneasy compromise between the warring factions of its civil war in the 1970s and 80s has held for decades but its always fragile status quo is now threatened. The chessboard of its multi-denominational politics has potentially been upended by the removal of its most powerful player.
If Lebanon descends back into factional fighting, regional stability will be undermined too.
The Middle East is in grave danger of further escalation. Western and regional diplomats are working round the clock to pull it back from the brink but recent efforts have all ended in failure and neither Israel nor Hezbollah seem to be listening.
Hezbollah leader Hassan Nasrallah has been killed after airstrikes in Beirut, the Israeli army has said.
Recent weeks have seen Israel unleash a barrage of strikes against Lebanon after it turned its attention to the conflict at its northern border.
On Friday, Israel targeted the capital Beirut with a series of attacks claiming to have struck the headquarters of Hezbollah.
People stand near a picture of Nasrallah during the funeral of a Hezbollah member. Pic: Reuters
People watch Hassan Nasrallah delivering a televised address in Beirut. Pic: Reuters
The Israel Defence Forces (IDF) said it carried out a “precise strike” on Hezbollah’s “central headquarters”, which it claimed was “embedded under residential buildings in the heart of the Dahieh in Beirut”.
The first wave of attacks shook windows across the city and sent thick clouds of smoke billowing into the air.
Smoke rises from Israeli airstrikes in Beirut’s southern suburbs. Pic: AP
While Israel stressed it had been a “precise” strike, preliminary figures from Lebanon’s health ministry confirmed at least six other people were killed and 91 were wounded.
Israel said Nasrallah was the intended target and initially there were claims he had survived.
However, after several hours of confusion, his death was confirmed by Israel.
“Hassan Nasrallah will no longer be able to terrorise the world,” the IDF said.
Hours later, a defiant Hezbollah confirmed Nasrallah’s death but vowed their fight with Israel would continue after confirming they had fired upon sites in northern Israel.
“The leadership of Hezbollah pledges to the highest, holiest, and most precious martyr in our path full of sacrifices and martyrs to continue its jihad in confronting the enemy, supporting Gaza and Palestine, and defending Lebanon and its steadfast and honourable people,” they said.
Recent days have seen Israel launch strikes in Beirut, the Bekaa Valley, and Bhamdoun
The Israeli strike that allegedly took Nasrallah’s life was on residential buildings in Dahieh, Beirut
Alongside claiming to have killed Nasrallah, the IDF said it had killed a number of other commanders, including Ali Karaki, the commander of the southern front.
The country’s military said the strike was carried out while Hezbollah leadership met at their underground headquarters in Dahieh.
In the aftermath of the most recent attacks, an Israeli military spokesperson declined to comment on whether US-made Mark 84 heavy bombs were used in the strike against Nasrallah.
“The strike was conducted while Hezbollah’s senior chain of command were operating from the headquarters and advancing terrorist activities against the citizens of the State of Israel,” Lieutenant Colonel Nadav Shoshani said in a media briefing.
He continued: “We hope this will change Hezbollah’s actions.”
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Hezbollah leader killed says IDF
He added the number of civilian casualties was unclear but blamed Hezbollah for positioning itself in residential areas.
“We’ve seen Hezbollah carry out attacks against us for a year. It’s safe to assume that they are going to continue carrying out their attacks against us or try to,” he said.
Meanwhile, Iran said it was in constant contact with Hezbollah and other allies to determine its “next step”, but Reuters reported the country’s supreme leader was transferred to a secure location in light of the latest attack.
Speaking after the attack, Ayatollah Ali Khamenei called on Muslims “to stand by the people of Lebanon and the proud Hezbollah” and said: “The fate of this region will be determined by the forces of resistance, with Hezbollah at the forefront,” state media reported.
Nasrallah’s death will be a blow to Hezbollah as it continues to reel from a campaign of escalating Israeli attacks.
Flames rise after an Israeli airstrike in the southern suburbs of Beirut on Saturday. Pic: AP
Nasrallah is latest Hezbollah leader to fall
While Nasrallah’s death is certainly the most high-profile of recent attacks, it continues a trend of Israel targeting Hezbollah’s leadership structure.
Also on Saturday, in the early hours of the morning, the commander of the group’s missile unit and his deputy were killed in another Israeli attack in southern Lebanon.
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Then, in a separate strike overnight on Friday, the IDF said it killed the head of Hamas’s network in southern Syria.
This followed the deaths of other senior commanders, including Muhammad Qabisi, earlier in the month.
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