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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%, 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”.

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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.

British Chancellor of the Exchequer Kwasi Kwarteng speaks during Britain's Conservative Party's annual conference in Birmingham, Britain, October 3, 2022. REUTERS/Toby Melville

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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Stony faces in quiet audience as chancellor gives little detail in dull 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?

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”.

British Prime Minister Liz Truss, Chancellor of the Duchy of Lancaster Nadhim Zahawi and Secretary of State for Health and Social Care Therese Coffey attend Britain's Conservative Party's annual conference in Birmingham, Britain, October 3, 2022. REUTERS/Hannah McKay
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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.

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Donald Trump refuses to rule out military force over Panama Canal and Greenland – as he warns NATO to spend more

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Donald Trump refuses to rule out military force over Panama Canal and Greenland - as he warns NATO to spend more

US president-elect Donald Trump has refused to rule out military or economic action to seize the Panama Canal and Greenland – as he said he believes NATO spending should be increased to 5% per member state.

Speaking at Mar-a-Lago, Florida, Mr Trump made a series of sweeping claims on what his policies could look like when he takes office on 20 January.

He said he believes NATO spending should be increased to 5% per member state, while he also declared US control of Greenland and the Panama Canal as vital to American national security.

The 78-year-old Republican also spoke of relations with Canada, as well as addressing his position on the Middle East and the war in Ukraine.

Sky News takes a look at some of the key claims brought up during the conference.

NATO

Mr Trump claimed “nobody knows more about NATO than I do”, before adding: “If it weren’t for me, NATO wouldn’t exist right now.

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“I raised from countries that weren’t paying their bills, over $680bn. I saved NATO, but NATO is taking advantage of us.”

The president-elect also said members of NATO should be contributing 5% of their GDPs (gross domestic product) to defence spending – the previous target has been 2%.

U.S. President-elect Donald Trump makes remarks at Mar-a-Lago in Palm Beach, Florida, U.S. January 7, 2025. REUTERS/Carlos Barria
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Donald Trump speaking at Mar-a-Lago. Pic: Reuters

Greenland and Panama Canal

Asked if he can reassure the world he won’t resort to military action or economic coercion in trying to get control of the areas, he said: “No, I can’t assure you on either of those two.”

“But, I can say this, we need them for economic security.”

He didn’t add any further detail around Greenland – which he has recently suggested the US should own or control – but he said the Panama Canal “was built for our military”.

He said the canal was “vital” to the country and China was “operating” it.

Mr Trump criticised the late Jimmy Carter for his role in signing over the Panama Canal to Panama during his presidency, saying it’s “a disgrace what took place” and “Jimmy Carter gave it to them for one dollar.”

Canada

A day after Canadian Prime Minister Justin Trudeau announced he was stepping down, Mr Trump said he believed the US’ northern neighbour should become the 51st US state.

He mocked Mr Trudeau by calling him “governor” rather than prime minister.

He argued the US and Canada combined would amount to an “economic force” that would “really be something”.

“There isn’t a snowball’s chance in hell that Canada would become part of the United States,” Mr Trudeau responded.

Israel-Hamas war

Israel has been waging a 15-month war on the militant group ruling Gaza, Hamas, since they launched an unprecedented attack on southern Israel on 7 October which saw 1,200 people massacred and about 250 taken hostage, many of whom remain in captivity.

Mr Trump said: “If those hostages aren’t back by the time I get into office, all hell will break out in the Middle East.”

Nearly 46,000 Palestinians have been killed in Israel’s assault on Gaza, according to Hamas-run health officials in the enclave.

Analysis: Trump’s warning risks becoming less threatening

Ukraine war

Referring to Russia’s ongoing full-scale war against its smaller neighbour, Mr Trump said a “big part of the problem” was Russian President Vladimir Putin had said for many years he did not want Ukraine involved with NATO.

“Somewhere along the line [outgoing President Joe] Biden said you can join NATO,” he said.

“Well, then Russia has NATO right on their doorstep.

“When I heard the way Biden was negotiating I said ‘you are going to end up in a war’ and it turned out to be a war.”

Asked if he would commit to keep supporting Ukraine during negotiations with Moscow, Mr Trump quipped: “Well, I wouldn’t tell you if that were the case.”

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Mr Trump win’s certified by rival Kamala Harris

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Offshore drilling

Mr Trump repeated one of his favourite phrases from the campaign trail, “drill, baby, drill”.

On Monday, outgoing President Biden moved to ban new offshore oil and gas developments along most US coastlines.

But Mr Trump, who has vowed to boost domestic energy production, said he will undo it.

“We’re going to be drilling a lot of other locations,” he said.

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Donald Trump’s threats could be a make-or-break test for NATO

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Donald Trump's threats could be a make-or-break test for NATO

The public articulation by Donald Trump of a new desired target for NATO allies to spend 5% of national income on defence will surely plunge governments across Europe into crisis mode – not least here in the UK.

Britain presents itself to the world and in particular to the United States as the biggest defence spender in Europe and NATO’s most powerful European military.

Yet Sir Keir Starmer has not even managed to set out a timeline for what he describes as a “path to 2.5%” of GDP being invested in his armed forces, up from just over 2% today.

If the prime minister merely sticks to this pledge, he risks being viewed by the new administration as woefully unambitious and not credible on defence.

Then there is the extraordinary threat by Mr Trump to seize Greenland by force if necessary, even though this valuable piece of territory belongs to a fellow NATO ally in the form of Denmark.

The move – were it to happen – would demonstrate the limitations of the alliance’s Article 5 founding principle.

It is supposed to guarantee that all allies would come to the defence of any member state which is under armed attack.

But what about if the aggressor is also meant to be an ally?

The president-elect also appeared to dash any hope of Ukraine being offered membership to the alliance anytime soon – a core request of President Volodymyr Zelenskyy.

Instead, Mr Trump sounded sympathetic to Vladimir Putin’s absolute opposition to such a move.

He said he would meet the Russian president after taking office – reiterating a promise to end the war in Ukraine, though again without spelling out how.

The outbursts came in a lengthy press conference on Tuesday that marked the starting shot in what could be a make-or-break test for NATO – an alliance of transatlantic friends that rose from the ashes of the Second World War.

Read more:
Trump speaks on Canada, Gaza and reversing Biden ban
A guide to everything about Trump’s inauguration

European members of NATO, as well as Canada, already took a battering the last time Mr Trump was in the White House – and rightly so.

The US had for far too long largely bankrolled the security of Europe, while the majority of its allies – including the UK – reaped the so-called “peace dividend” that followed the collapse of the Soviet Union and the end of the Cold War, swapping expenditure on defence for peacetime priorities such as economic growth, healthcare and education.

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From 2019: Was this the most awkward NATO summit ever?

Mr Trump made clear during his first term his displeasure about what he saw as Washington being ripped off and vowed to make Europe take its fair share of the burden.

He even warned member states that the US would not come to the aid of an ally that was not hitting at the very least a minimum NATO spending targeting of 2% of GDP – something they had previously pledged to do by 2024 but were slow to deliver on.

Such language electrified allies in a way that even Putin’s initial 2014 invasion of Ukraine, with the annexation of Crimea and attacks in the east of the country, had not.

Yet, with the threat from Russia growing in the wake of its full-scale war in Ukraine in 2022, coupled with conflict in the Middle East and the challenge posed by China, it has become clear that this heightened level of expenditure by allies was still far short of what is required to rebuild militaries across Europe that have been hollowed out over decades.

Read more from Sky News:
Trump’s Gaza warning risks becoming less threatening
Trump asks court to dismiss hush money conviction

Mark Rutte, the new secretary general of NATO, set the stage for what is expected to be another push to ramp up investment when he delivered a landmark speech last month in which he called on allies to return to a “war mindset” and “turbocharge” defence spending.

He said this was to counter growing threats, but observers said it was also a pre-emptive response to the anticipated demands of the next Trump administration.

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‘Ukraine needs more arms, less talking’

Either way, it poses a huge challenge for all allies, in particular for Sir Keir Starmer.

He and Rachel Reeves face a choice: change course when it comes to their top priorities of economic growth, hospital waiting lists and new housing and instead invest more in defence or defy what will doubtless be growing demands from the United States to spend billions of pounds more on the UK armed forces – and maybe even leave the country in a position whereby the US would not come to its aid if attacked.

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Rapid Support Forces (RSF) accused by US of committing genocide in Sudan war

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Rapid Support Forces (RSF) accused by US of committing genocide in Sudan war

The Rapid Support Forces (RSF) and its allied militias are committing genocide in Sudan while waging war against the army for control of the country, Joe Biden’s US administration has determined – two weeks before leaving office.

In a statement sharing the designation on Tuesday, US secretary of state Antony Blinken said the RSF and its aligned militias had “systematically murdered men and boys – even infants – on an ethnic basis” and “deliberately targeted women and girls from certain ethnic groups for rape and other forms of brutal sexual violence”.

He announced that Washington would impose sanctions on RSF leader Mohamed Hamdan “Hemedti” Dagalo and seven RSF-owned companies located in the United Arab Emirates (UAE).

Mohamed Hamdan "Hemedti" Dagalo
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Mohamed Hamdan ‘Hemedti’ Dagalo. File pic: AP

The UAE is credibly accused of backing and arming the RSF – something it has strenuously denied.

When reached for comment by Reuters, the RSF rejected these measures and said: “America previously punished the great African freedom fighter Nelson Mandela, which was wrong.

“Today, it is rewarding those who started the war by punishing (RSF leader) general Mohamed Hamdan Dagalo, which is also wrong.”

The RSF has been fighting Sudan’s army for territorial control of the country since war erupted in the capital, Khartoum, in April 2023.

The ensuing devastation has been described as the worst humanitarian crisis ever recorded – with over 11 million people forced out of their homes, tens of thousands dead, and 30 million in need of humanitarian assistance.

Sudan, Africa
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Sudan, Africa

In December 2023, Mr Blinken announced that both warring parties had committed war crimes, but that the RSF in particular had committed crimes against humanity and ethnic cleansing.

He mentioned this precedent in this latest announcement, adding: “Today’s action is part of our continued efforts to promote accountability for all warring parties whose actions fuel this conflict.

“The United States does not support either side of this war, and these actions against Hemedti and the RSF do not signify support or favour for the SAF (Sudanese Armed Forces).

“Both belligerents bear responsibility for the violence and suffering in Sudan and lack the legitimacy to govern a future peaceful Sudan.”

Read more from Sky News:
Sudan’s history faces erasure
Farmers in Sudan on verge of mass starvation

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From November: RSF attacks farming villages leaving dozens dead

This comes twenty years after then US secretary of state Colin Powell described the conflict in Darfur, western Sudan, as a genocide in 2004.

Back then, RSF leader Hemedti was heading up a lesser-known Janjaweed militia that was carrying out state-sanctioned atrocities against civilians.

He was not held accountable then, and many wonder if this latest designation will have any impact on the actions of forces on the ground.

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