Truss and Kwarteng U-turn on plan for 45p tax rate for highest earners

Published

3 years ago

October 5, 2022

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Chancellor Kwasi Kwarteng has confirmed that the government is axing plans to give the wealthiest 1% a tax cut following a bitter backlash from Tory MPs.

Mr Kwarteng said in a tweet that the measure had become a “distraction” from his objective to grow the economy.

He said: “We get it, we have listened.”

Politics live: Major U-turn after prominent Tories speak out

The plan to scrap the 45p rate, which is paid by people who earn over £150,000 a year, was criticised as unfair amid the cost of living crisis.

It was announced in the tax-slashing mini-budget, last Friday, but would have had to go to a vote before it could be approved.

Former cabinet minister Grant Shapps, one of the big hitters in the Conservative Party who had publicly criticised the policy, told Sky News that it would not have got through parliament.

“There is no mathematical way MPs would go and vote for this,” he said.

The tax cut was one of a series of proposals that prompted turmoil in the markets over the past week, with the pound reaching record lows against the dollar.

The chancellor and Ms Truss spent much of the past 10 days doubling down on their plans, even in the face of criticism from the International Monetary Fund and a £65bn emergency intervention by the Bank of England.

Ms Truss was expected to delay the vote on the 45p rate tax cut to buy herself time, after Conservative MPs were told they would lose the whip (meaning they would be suspended from the party) if they voted against it.

But the rebellion grew overnight as Mr Shapps joined his former cabinet minister colleague Michael Gove in publicly criticising the plans.

Kwarteng ‘not at all’ considering resigning

Mr Kwarteng abandoned the policy hours before he was due to tell the Conservative Party conference in Birmingham that the government “must stay the course”.

The chancellor told BBC Breakfast: “I have been in parliament for 12 years, there have been lots of policies which, when government listens to people, they have decided to change their minds.”

Despite the blow to his authority, he said he had “not at all” considered resigning.

And he declined to apologise directly to the nation, instead telling BBC Radio 4’s Today programme: “There’s humiliation and contrition, and I’m happy to own it.”

Moments after Mr Kwarteng confirmed the U-turn, Ms Truss tweeted the same message.

‘They have destroyed their economic credibility’

The pound surged higher in overnight trading on Monday as reports emerged that the government would abandon the decision to axe the 45p tax rate.

Labour pressed for Ms Truss and Mr Kwarteng to back down on the rest of their tax-cutting mini-budget.

Shadow chancellor Rachel Reeves said the reversal “comes too late for the families who will pay higher mortgages and higher prices for years to come”.

“The Tories have destroyed their economic credibility and damaged trust in the British economy,” she said. “Their kamikaze budget needs reversing now.”

The Lib Dems echoed those calls, with leader Sir Ed Davey calling for the Tories to cancel their party conference and recall parliament to “sort this mess out”.

He said: “Every day it becomes clearer this Conservative government has no plan, no clue and is completely out of touch.”

World

The fight for the Arctic – where climate change is giving Russia room to manoeuvre

Published

6 hours ago

May 29, 2025

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The fight for the Arctic - where climate change is giving Russia room to manoeuvre

The twin threats of climate change and Russian malign activity in the Arctic must be taken “deadly seriously,” David Lammy has warned.

Sky News joined him on the furthest reaching tour of the Arctic by a British foreign secretary.

We travelled to Svalbard – a Norwegian archipelago that is the most northern settled land on Earth, 400 miles from the North Pole.

It is at the heart of an Arctic region facing growing geopolitical tension and feeling the brunt of climate change.

Mr Lammy told us the geopolitics of the region must be taken “deadly seriously” due to climate change and “the threats we’re seeing from Russia”.

We witnessed the direct impact of climate change along Svalbard’s coastline and inland waterways. There is less ice, we were told, compared to the past.

The melting ice is opening up the Arctic and allowing Russia more freedom to manoeuvre.

“We do see Russia’s shadow fleet using these waters,” Mr Lammy said. “We do see increased activity from submarines with nuclear capability under our waters and we do see hybrid sabotage of undersea cables at this time.”

In Tromso, further south, the foreign secretary was briefed by Norwegian military commanders.

Vice Admiral Rune Andersen, the Chief of Norwegian Joint Headquarters, told Sky News the Russian threat was explicit.

“Russia has stated that they are in confrontation with the West and are utilising a lot of hybrid methods to undermine Western security,” he said.

But it’s not just Vladimir Putin they’re worried about. Norwegian observers are concerned by US president Donald Trump’s strange relationship with the Russian leader too.

Karsten Friis, a Norwegian defence and security analyst, told Sky News: “If he’s too soft on Putin, if he is kind of normalising relations with Russia, I wouldn’t be surprised.

“I would expect Russia to push us, to test us, to push borders, to see what we can do as Europeans.”

Changes in the Arctic mean new challenges for the NATO military alliance – including stepping up activity to deter threats, most of all from Russia.

In Iceland, we toured a NATO airbase with the foreign secretary.

There, he said maintaining robust presence in the Arctic was essential for western security.

“Let’s be clear, in this challenging geopolitical moment the high north and the Arctic is a heavily contested arena and we should be under no doubt that NATO and the UK need to protect it for our own national security.”

This is also about distracting Russia, drawing away resources that could have been used in the war in Ukraine and deterring it in the future.

Because the more Arctic opens up, the more this once pristine wilderness is becoming the arena of national rivalry and potentially conflict.

World

‘What did they do to be burned and bombed?’: Charity calls on UK to offer Gaza children life-saving treatment

Published

12 hours ago

May 29, 2025

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'What did they do to be burned and bombed?': Charity calls on UK to offer Gaza children life-saving treatment

A British charity has written to the prime minister and foreign secretary, urging them to allow seriously ill children from Gaza into the UK to receive life-saving medical treatment.

Warning: This article contains images readers may find distressing

The co-founder of Project Pure Hope told Sky News it was way past the time for words.

“Now, we need action,” Omar Dinn said.

He’s identified two children inside Gaza who urgently need help and is appealing to the UK government to issue visas as a matter of urgency.

Israel-Gaza latest: Netanyahu reportedly accepts US ceasefire plan

Britain has taken only two patients from Gaza for medical treatment in 20 months of Israeli bombardment.

“Most of the people affected by this catastrophe that’s unfolding in Gaza are children,” he continued. “And children are the most vulnerable.

“They have nothing to do with the politics, and we really just need to see them for what they are.

“They are children, just like my children, just like everybody’s children in this country – and we have the ability to help them.”

Sky News has been sent video blogs from British surgeons working in Gaza right now which show the conditions and difficulties they’re working under.

They prepare for potential immediate evacuation whilst facing long lists, mainly of children, needing life-saving emergency treatment day after day.

Dr Victoria Rose told us: “Every time I come, I say it’s really bad, but this is on a completely different scale now. It’s mass casualties. It’s utter carnage.

“We are incapable of getting through this volume. We don’t have the personnel. We don’t have the medical supplies. And we really don’t have the facilities.

“We are the last standing hospital in the south of Gaza. We really are on our knees now.”

One of her patients is three-year-old Hatem, who was badly burned when an Israeli airstrike hit the family apartment.

His pregnant mother and father were both killed, leaving him an orphan. He has 35 percent burns on his small body.

“It’s a massive burn for a little guy like this,” Dr Rose says. “He’s so adorable. His eyelids are burnt. His hands are burnt. His feet are burnt.”

Hatem’s grandfather barely leaves his hospital bedside. Hatem Senior told us: “What did these children do wrong to suffer such injuries? To be burned and bombed? We ask God to grant them healing.”

The second child identified by the charity is Karam, who, aged one, is trying to survive in a tent in deeply unhygienic surroundings with a protruding intestine.

He’s suffering from a birth defect called Hirschsprung disease, which could be easily operated on with the right skills and equipment – unavailable to him in Gaza right now.

Karam’s mother Manal told our Gaza camera crew: “No matter how much I describe how much my son is suffering, I wouldn’t be able to describe it enough. I swear I am constantly crying.”

Children are among the bulk of casualties – some 16,000 have been killed, according to the latest figures from local health officials – and make up the majority of those being operated on, according to the British surgical team on the ground.