Chancellor Kwasi Kwarteng said the UK government has a plan to “get Britain moving” in a speech to Conservatives on Monday aimed at restoring his authority, hours after backtracking on a key proposal to cut taxes for the country's highest earners.
Addressing the audience in Birmingham, he acknowledged it had been a “tough” day but promised there would be no more distractions.
Downing Street said Prime Minister Liz Truss — who was in the audience for the speech — continues to have confidence in Mr Kwarteng, despite him admitting there was “humiliation” in the change of policy. The reversal was widely considered a desperate bid to avert a Tory rebellion over the strategy.
Mr Kwarteng told activists: “What a day. It has been tough but we need to focus on the job in hand.
“We need to move forward, no more distractions, we have a plan and we need to get on and deliver it.”
He added: “I know the plan has caused a little turbulence,” then repeated a phrase he used when first announcing the about face: “I get it. We’ve listened.”
Mr Kwarteng was delivering a speech that could define his political career, trying to win over the Tory faithful after his catastrophic first step as chancellor sent the pound plummeting and rattled the FTSE, handed the opposition Labour party a 33-point poll lead, outraged voters and MPs, and led one senior Tory to suggest Ms Truss should call a general election.
The pound had surged higher in overnight trading into Monday as reports surfaced that the government would drop the decision, and then remained steady throughout the day.
Sterling hit $1.13, matching levels before the mini-budget.
The market turmoil following Mr Kwarteng’s mini-budget had pushed the pound to an record low of $1.03.
The blue-chip FTSE 100 and the FTSE 250 mid-cap indexes rose 0.2 per cent and 0.7 per cent, respectively, on Monday.
Early on Monday, he performed a screeching about face by shelving the plan to abolish the top rate of tax.
Mr Kwarteng acknowledged that the desire to scrap the 45 per cent tax rate on earnings of more than £150,000 ($168,014) in a move to be paid for by borrowing had become “a distraction” and a source of widespread criticism.
Hours later, Mr Kwarteng used his speech to defend the government’s plan to cut taxes in the search for economic growth.
The chancellor is still committed to taking 1p off the basic rate of income tax, reversing April’s increase in national insurance and scrapping the planned increase in corporation tax.
He told the conference: “While we all believe in growth, we as Conservatives also believe that it is an important principle that people should keep more of the money they earn.
“I don’t need to tell you that. That isn’t radical, that isn’t irresponsible. It is a deeply held belief that we all share as Conservatives.”
The about-turn came fewer than 24 hours after Ms Truss said in a television interview that she resolved to stick to the policy, but acknowledged it could have been communicated better. She also said she had not discussed the plan with the rest of her Cabinet.
The government had resisted backing down in the face of criticism from the International Monetary Fund and a £65 billion emergency intervention by the Bank of England to restore order.
However, the prime minister and chancellor had been under growing pressure, including from senior Tory MPs, to back down.
As the Conservative Party conference began in Birmingham on Sunday, some Tories publicly voiced their concerns.
Former Cabinet members Michael Gove and Grant Shapps, who had supported Rishi Sunak in the recent leadership race, expressed their opposition to the cut, calling it “tin-eared” as it benefited the richest at time when lower earners were facing increased bills.
They said Ms Truss would struggle to get the policy through Parliament.
On Monday morning, Mr Kwarteng tweeted: “From supporting British business to lowering the tax burden for the lowest paid, our growth plan sets out a new approach to build a more prosperous economy. However, it is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.
“As a result, I'm announcing we are not proceeding with the abolition of the 45p tax rate. We get it and we have listened.
“This will allow us to focus on delivering the major parts of our growth package.”
Ms Truss retweeted the chancellor’s message, reiterating that they had heard people’s concerns and were determined to focus on building a high-growth economy.
On Monday, Mr Shapps said the decision to abandon the plan was sensible and inevitable.
He was on air on BBC Breakfast when Mr Kwarteng confirmed the decision and on hearing the statement said: “Those are exactly the right words. I actually saw him last night. I encouraged him to say, ‘look we understand, we get this, sometimes you just get things wrong’.
“This was a mini-budget which was done incredibly quickly … I’m very pleased to see him acknowledging that they understood it was the wrong move and fixing that problem.”
Mr Shapps tweeted that he “strongly welcomed” the scrapping of the plan, calling the decision “sensible and pragmatic”.
“Conservatives want lower tax, but let's show our energy price cap and other policies are on [the]side of consumers rather than borrowing to cut high earner taxes first,” he said in a tweet.
Former Cabinet minister Nadine Dorries went as far as to suggest a general election should be called amid Tory party infighting.
Ms Dorries, a staunch ally of Boris Johnson, said there was “widespread dismay” at Ms Truss for ditching key parts of her predecessor’s administration’s agenda, saying three years of work “has effectively been put on hold”.
“No one asked for this,” she tweeted. “C4 [Channel 4] sale, online safety, BBC licence fee review, all signed off by Cabinet all ready to go, all stopped.
“If Liz wants a whole new mandate, she must take to the country.”
Conservative Party conference — in pictures
TERMINAL HIGH ALTITUDE AREA DEFENCE (THAAD)
What is THAAD?
It is considered to be the US's most superior missile defence system.
Production:
It was created in 2008.
Speed:
THAAD missiles can travel at over Mach 8, so fast that it is hypersonic.
Abilities:
THAAD is designed to take out ballistic missiles as they are on their downward trajectory towards their target, otherwise known as the "terminal phase".
Purpose:
To protect high-value strategic sites, such as airfields or population centres.
Range:
THAAD can target projectiles inside and outside the Earth's atmosphere, at an altitude of 150 kilometres above the Earth's surface.
Creators:
Lockheed Martin was originally granted the contract to develop the system in 1992. Defence company Raytheon sub-contracts to develop other major parts of the system, such as ground-based radar.
UAE and THAAD:
In 2011, the UAE became the first country outside of the US to buy two THAAD missile defence systems. It then stationed them in 2016, becoming the first Gulf country to do so.
White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Company profile
Name: Thndr
Started: October 2020
Founders: Ahmad Hammouda and Seif Amr
Based: Cairo, Egypt
Sector: FinTech
Initial investment: pre-seed of $800,000
Funding stage: series A; $20 million
Investors: Tiger Global, Beco Capital, Prosus Ventures, Y Combinator, Global Ventures, Abdul Latif Jameel, Endure Capital, 4DX Ventures, Plus VC, Rabacap and MSA Capital
The specs: 2018 Ducati SuperSport S
Price, base / as tested: Dh74,900 / Dh85,900
Engine: 937cc
Transmission: Six-speed gearbox
Power: 110hp @ 9,000rpm
Torque: 93Nm @ 6,500rpm
Fuel economy, combined: 5.9L / 100km
MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
Springsteen: Deliver Me from Nowhere
Director: Scott Cooper
Starring: Jeremy Allen White, Odessa Young, Jeremy Strong
Rating: 4/5
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Expo details
Expo 2020 Dubai will be the first World Expo to be held in the Middle East, Africa and South Asia
The world fair will run for six months from October 20, 2020 to April 10, 2021.
It is expected to attract 25 million visits
Some 70 per cent visitors are projected to come from outside the UAE, the largest proportion of international visitors in the 167-year history of World Expos.
More than 30,000 volunteers are required for Expo 2020
The site covers a total of 4.38 sqkm, including a 2 sqkm gated area
It is located adjacent to Al Maktoum International Airport in Dubai South
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%3Cp%3EThe%20sixth%20sanctions%20package%20will%20also%20see%20European%20insurers%20banned%20from%20covering%20Russian%20shipping%2C%20more%20individuals%20added%20to%20the%20EU's%20sanctions%20list%20and%20Russia's%20Sberbank%20cut%20off%20from%20international%20payments%20system%20Swift.%3C%2Fp%3E%0A
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
The Vile
Starring: Bdoor Mohammad, Jasem Alkharraz, Iman Tarik, Sarah Taibah
Director: Majid Al Ansari
Rating: 4/5
UAE currency: the story behind the money in your pockets
MISSION: IMPOSSIBLE – FINAL RECKONING
Director: Christopher McQuarrie
Starring: Tom Cruise, Hayley Atwell, Simon Pegg
Rating: 4/5
ONCE UPON A TIME IN GAZA
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
Directors: Tarzan and Arab Nasser
Rating: 4.5/5
New Zealand 15 British & Irish Lions 15
New Zealand 15
Tries: Laumape, J Barrett
Conversions: B Barrett
Penalties: B Barrett
British & Irish Lions 15
Penalties: Farrell (4), Daly
Listen to Extra Time
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
Company profile
Date started: 2015
Founder: John Tsioris and Ioanna Angelidaki
Based: Dubai
Sector: Online grocery delivery
Staff: 200
Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends
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