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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:

First phase of Truss’ reign is over – can she survive 45p tax rate U-turn?
It’s not clear which policy tipped markets over the edge – or which chancellor can reverse to put genie back in the bottle

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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Israel announces military operation expanding in Gaza to seize ‘large areas’

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Israel announces military operation expanding in Gaza to seize 'large areas'

Israel is beginning a major expansion of its military operation in Gaza and will seize large areas of the territory, the country’s defence minister said.

Israel Katz said in a statement that there would be a large scale evacuation of the Palestinian population from fighting areas.

In a post on X, he wrote: “I call on the residents of Gaza to act now to remove Hamas and return all the hostages. This is the only way to end the war.”

He said the offensive was “expanding to crush and clean the area of terrorists and terrorist infrastructure and capture large areas that will be added to the security zones of the State of Israel”.

The expansion of Israel’s military operation in Gaza deepens its renewed offensive.

The ceasefire between Israel and Hamas that had begun in January ended in March as Israel launched various air strikes on targets across Gaza.

The deal had seen the release of dozens of hostages and hundreds of Palestinian prisoners, but collapsed before it could move to phase two, which would have involved the release of all hostages and the withdrawal of Israeli forces from Gaza.

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26 March: Anti-Hamas chants heard at protest in Gaza

The Israel Defense Forces (IDF) had already issued evacuation warnings to Gazans living around the southern city of Rafah and towards the city of Khan Yunis, telling them to move to the al Mawasi area on the shore, which was previously designated a humanitarian zone.

Israeli forces have already set up a significant buffer zone within Gaza, having expanded an area around the edge of the territory that had existed before the war, as well as a large security area in the so-called Netzarim corridor through the middle of Gaza.

This latest conflict began when Hamas launched an attack on Israel on 7 October 2023, killing around 1,200 people and taking around 250 hostages.

The ensuing Israeli offensive has killed more than 50,000 Palestinians, according to Gaza’s Hamas-run health ministry.

Read more:
Father demands protection after Gaza aid workers’ deaths
Anti-Hamas chants heard at rare protest in Gaza

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Bodies of aid workers found in Gaza

Aid group Doctors Without Borders warned on Wednesday that Israel’s month-long siege of Gaza means some critical medications are now short in supply and are running out, leaving Palestinians at risk of losing vital healthcare.

“The Israeli authorities’ have condemned the people of Gaza to unbearable suffering with their deadly siege,” said Myriam Laaroussi, the group’s emergency coordinator in Gaza.

“This deliberate infliction of harm on people is like a slow death; it must end immediately.”

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‘Liberation day is here’: But what will it mean for global trade?

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'Liberation day is here': But what will it mean for global trade?

“Liberation day” was due to be on 1 April. But Donald Trump decided to shift it by a day because he didn’t want anyone to think it was an April fool.

It is no joke for him and it is no joke for governments globally as they brace for his tariff announcements.

It is stunning how little we know about the plans to be announced in the Rose Garden of the White House later today.

It was telling that we didn’t see the President at all on Tuesday. He and all his advisers were huddled in the West Wing, away from the cameras, finalising the tariff plans.

Follow the events of Liberation Day live as they unfold

Three key figures are central to it all.

Treasury Secretary Scott Bessent is the so-called ‘measured voice’. A former hedge fund manager, he has argued for targeted not blanket tariffs.

Peter Navarro is Trump’s senior counsellor for trade and manufacturing. A long-time aide and confidante of the president, he is a true loyalist and a firm believer in the merits of tariffs.

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His economic views are well beyond mainstream economic thought – precisely why he appeals to Trump.

‘Stop that crap’: Trump adviser Peter Navarro reacts to Sky News correspondent’s question over tariffs

The third key character is Howard Lutnick, the commerce secretary and the biggest proponent of the full-throttle liberation day tariff juggernaut.

The businessman, philanthropist, Trump fundraiser and billionaire (net worth ranging between $1bn and $2bn) has been among the closest to Trump over the past 73 days of this presidency – frequently in and out of the West Wing.

If anything goes wrong, observers here in Washington suspect Trump will make Lutnick the fall guy.

What are Donald Trump’s tariffs, what is ‘liberation day’ and how does it all affect the UK?

And what if it does all go wrong? What if Trump is actually the April fool?

“It’s going to work…” his press secretary said when asked if it could all be a disaster, driving up the cost of living for Americans and creating global economic chaos.

“The president has a brilliant team who have been studying these issues for decades and we are focussed on restoring the global age of America…” Karoline Leavitt said.

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‘Days of US being ripped off are over’

Dancing to the president’s tune

My sense is that we should see “liberation day” not as the moment it’s all over in terms of negotiations for countries globally as they try to carve out deals with the White House. Rather it should be seen as the start.

Trump, as always, wants to be seen as the one calling the shots, taking control, seizing the limelight. He wants the world to dance to his tune. Today is his moment.

But beyond today, alongside the inevitable tit-for-tat retaliation, expect to see efforts by nations to seek carve-outs and to throw bones to Trump; to identify areas where trade policies can be tweaked to placate the president.

Even small offerings which change little in a material sense could give Trump the chance to spin and present himself as the winning deal maker he craves to be.

One significant challenge for foreign governments and their diplomats in Washington has been engaging the president himself with proposals he might like.

Negotiations take place with a White House team who are themselves unsure where the president will ultimately land. It’s resulted in unsatisfactory speculative negotiations.

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Treasury minister: ‘We’ll do everything to secure a deal’

Too much faith placed in the ‘special relationship’?

The UK believes it’s in a better position than most other countries globally. It sits outside the EU giving it autonomy in its trade policy, its deficit with the US is small, and Trump loves Britain.

It’s true too that the UK government has managed to accelerate trade conversations with the White House on a tariff-free trade partnership. Trump’s threats have forced conversations that would normally sit in the long grass for months.

Yet, for now, the conversations have yielded nothing firm. That’s a worry for sure. Did Keir Starmer have too much faith in the ‘special relationship’?

Downing Street will have identified areas where they can tweak trade policy to placate Trump. Cars maybe? Currently US cars into the UK carry a 10% tariff. Digital services perhaps?

US food? Unlikely – there are non-tariff barriers on US food because the consensus seems to be that chlorinated chicken and the like isn’t something UK consumers want.

Easier access to UK financial services maybe? More visas for Americans?

For now though, everyone is waiting to see what Trump does before they either retaliate or relent and lower their own market barriers.

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Bodies still remain among the ‘collapsed and inclining’ buildings in quake-hit Mandalay

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Bodies still remain among the 'collapsed and inclining' buildings in quake-hit Mandalay

A man inside Mandalay has told Sky News bodies remain under “collapsed and inclining” buildings after the Myanmar earthquake – as a woman was freed from rubble after 91 hours.

The local inside Myanmar said many of the structures in the city were wrecked or badly damaged after the 7.7 magnitude quake on Friday, adding: “There are some bodies, some dead bodies, that still remain and other destruction”.

Meanwhile, in a televised address, Myanmar’s military leader Min Aung Hlaing said the number of dead had risen to 2,719 and is expected to exceed 3,000.

Some 4,521 people have been injured, while a further 441 are missing.

More than 10,000 buildings are known to have collapsed or been severely damaged in central and northwest Myanmar, the World Health Organisation said.

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Before and after: Myanmar earthquake

Smell of dead bodies near destroyed buildings

In Mandalay, Myanmar’s second-largest city, which was close to the quake’s epicentre, 50 children and two teachers were killed when their preschool collapsed, the United Nations said.

The local in the city told Sky News that “a lot of local assistance associations like charity groups are still struggling with digging out the corpses, the dead bodies, from the destruction”.

He said that “when we pass near the destructions, the collapsed building or very damaged building, we can smell” dead bodies.

“The smell of the dead bodies after four days… it still remains,” he said, before adding: “For the social assistance association… they need permission [to give aid] especially from the government.

“If they don’t have permission, then they cannot do anything.”

People sheltering in a makeshift tent camp in Mandalay. Pic: Reuters
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People sheltering in a makeshift tent camp in Mandalay. Pic: Reuters

He also said others in Mandalay are struggling after the earthquake, which followed the city being affected by cyclones, the COVID-19 pandemic, and the civil war in Myanmar – where a junta seized power in a coup in 2021.

“Some people, they say they have nothing at all,” the local added. “They have no more home, they have no more belongings, because its already damaged.”

Woman freed after 91 hours under rubble

It comes after the fire department in Myanmar’s capital freed a woman trapped under rubble 91 hours after the building collapsed.

The 63-year-old woman was freed early on Tuesday in Naypyidaw.

As the country continues to recover, a worker from the International Rescue Committee said people fear aftershocks and are sleeping outside on roads or in open fields.

Communities are struggling to meet basic needs such as access to clean water and sanitation, and emergency teams are working “tirelessly” to locate survivors and provide aid, the UN said in a report.

Rescue efforts have been complicated by the civil war, as rebel groups say the junta has conducted airstrikes, even after the quake, while NGOs fear that certain areas could be denied vital supplies.

“Myanmar’s military has a longstanding practice of denying aid to areas where groups who resist it are active,” said Joe Freeman, a researcher with Amnesty Myanmar.

“It must immediately allow unimpeded access to all humanitarian organisations and remove administrative barriers delaying needs assessments.”

Read more:
Military regime targeting ‘civilian areas’ in ‘wake of disaster’
Myanmar earthquake leaves some areas almost completely destroyed

The quake was the strongest to hit the southeast Asian country in more than a century.

In neighbouring Thailand, rescuers are still scouring the ruins of a collapsed, unfinished skyscraper for any signs of life.

“There are about 70 bodies underneath, and we hope by some miracle one or two are still alive,” volunteer rescue leader Bin Bunluerit said.

Six human-shaped figures have been detected by scanners, said Bangkok’s deputy governor, Tavida Kamolvej.

Thirteen deaths have been confirmed at the building site, with 74 people still missing, while Thailand’s national number of dead stands at 20.

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