The scale of Chancellor Kwasi Kwarteng’s task to fix the British economy while convincing his own voters is vertiginous and could be beyond reach, given the muted reaction to his speech at the Conservative Party conference on Monday.
While the markets might have modestly corrected following the turmoil induced by his mini-budget, it is evident that the British chancellor faces a mountainous task in convincing core Conservatives, as the not-quite packed main theatre at the party's annual conference in Birmingham failed to ignite with applause.
The tone was set when Prime Minister Liz Truss entered the auditorium to restrained clapping with at least three quarters remaining seated. It was a raw comment on the poor light in which the government is viewed by its own party, let alone the wider electorate.
Mr Kwarteng’s announcement 11 days earlier of dishing out bountiful tax cuts without them being funded or thought through has been a disastrous start for the post-Boris Johnson administration. One outcome has been some homeowners — who are largely Conservative voters — having their monthly mortgage payments double in the past week.
To some extent the government’s about face on restoring the highest tax bracket to 45 per cent back from 40 per cent had removed some of the toxicity of the highest earners getting the biggest reward.
“What a day,” Mr Kwarteng opened after striding on to stage to a noticeably sedate audience.
“Turbulence — I get it,” he later quipped. There was polite laughter but also glances at phones that showed after a week of plunging prices, there was at least some stability in the FSTE 100 and the pound.
Mr Kwarteng had no option other than to be undaunted by the lukewarm welcome, knowing that failure to turn the economy around in the next few months will cause Conservative support to plummet.
“To grow the economy, we need to do things differently,” he stated without irony.
“We will get Britain moving,” he insisted, repeating the Conservative’s rather insipid slogan.
He made great play of his grand announcements in cutting income tax, corporation tax and national insurance but the applause remained muted.
The front row of Cabinet ministers, including Ms Truss, tried to clap furiously but the humiliation began to tell as few of the 1,000 or so supporters behind followed suit.
But they did come alive when he mentioned the European Union. EU laws had been “holding the country back”, said Mr Kwarteng while promising to “break down the barriers”. The red meat to the party of Brexiteers was duly accepted, but it was a fleeting moment of rapture.
The question is, how credible are the new government’s promises? The great tax giveaway would lead to 2.5 per cent growth in gross domestic product, he insisted.
“We’ve done it before and we will do it again,” Mr Kwarteng said. “Wow!” cried a lone heckler in disbelief.
The unfunded tax cuts — which rely substantially on massive borrowing — are a huge risk, something that business leaders in the audience fully understood.
“This is all very un-Conservative,” one muttered audibly.
Two businessmen who are long-time Conservative supporters spoke to The National before Mr Kwarteng's speech about what they wanted to hear.
“We want to hear a clear path to fiscal prudence,” one said. “They need to plan the growth properly. You can’t just turn on the taps and expect it to flow.”
His friend nodded in agreement, understanding that the impact on the party’s core reputation was based on responsible economics.
“Once you have lost trust, it’s a lot harder to win it back,” he lamented.
As the speech came to an end, the lukewarm applause returned.
“It was very short on detail,” said the first businessmen. “But reducing the corporation tax will help, so those things actually are really good.”
His friend agreed while also bemoaning the lack of detail.
“I thought that we were going to get more substance although I think he did reasonably well,” he said. “But he’s got 100 days to get the detail through and you could tell by the lack of applause that he didn’t fully convince. It’s now just a question of ‘wait and see’”.
Ms Truss will hope that her own MPs and party give her the time to prove her economic gamble rests on solid foundations. If not, her party faces electoral demise, potentially for many years.
She will hope, too, that there will be a good deal more alacrity in supporters jumping to their feet when she makes her speech on Wednesday morning. If she can electrify her audience, then her government may well start the long climb out of the foothills of economic descent.
Specs
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GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
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Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The Written World: How Literature Shaped History
Martin Puchner
Granta
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.
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
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The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
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UAE currency: the story behind the money in your pockets
The Matrix Resurrections
Director: Lana Wachowski
Stars: Keanu Reeves, Carrie-Anne Moss, Jessica Henwick
Rating:****
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Match info
Athletic Bilbao 0
Real Madrid 1 (Ramos 73' pen)
GIANT REVIEW
Starring: Amir El-Masry, Pierce Brosnan
Director: Athale
Rating: 4/5
OTHER IPL BOWLING RECORDS
Best bowling figures: 6-14 – Sohail Tanvir (for Rajasthan Royals against Chennai Super Kings in 2008)
Best average: 16.36 – Andrew Tye
Best economy rate: 6.53 – Sunil Narine
Best strike-rate: 12.83 – Andrew Tye
Best strike-rate in an innings: 1.50 – Suresh Raina (for Chennai Super Kings against Rajasthan Royals in 2011)
Most runs conceded in an innings: 70 – Basil Thampi (for Sunrisers Hyderabad against Royal Challengers Bangalore in 2018)
Most hat-tricks: 3 – Amit Mishra
Most dot-balls: 1,128 – Harbhajan Singh
Most maiden overs bowled: 14 – Praveen Kumar
Most four-wicket hauls: 6 – Sunil Narine
More on Palestine-Israeli relations
The specs: Fenyr SuperSport
Price, base: Dh5.1 million
Engine: 3.8-litre twin-turbo flat-six
Transmission: Seven-speed automatic
Power: 800hp @ 7,100pm
Torque: 980Nm @ 4,000rpm
Fuel economy, combined: 13.5L / 100km
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
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Top investing tips for UAE residents in 2021
Build an emergency fund: Make sure you have enough cash to cover six months of expenses as a buffer against unexpected problems before you begin investing, advises Steve Cronin, the founder of DeadSimpleSaving.com.
Think long-term: When you invest, you need to have a long-term mindset, so don’t worry about momentary ups and downs in the stock market.
Invest worldwide: Diversify your investments globally, ideally by way of a global stock index fund.
Is your money tied up: Avoid anything where you cannot get your money back in full within a month at any time without any penalty.
Skip past the promises: “If an investment product is offering more than 10 per cent return per year, it is either extremely risky or a scam,” Mr Cronin says.
Choose plans with low fees: Make sure that any funds you buy do not charge more than 1 per cent in fees, Mr Cronin says. “If you invest by yourself, you can easily stay below this figure.” Managed funds and commissionable investments often come with higher fees.
Be sceptical about recommendations: If someone suggests an investment to you, ask if they stand to gain, advises Mr Cronin. “If they are receiving commission, they are unlikely to recommend an investment that’s best for you.”
Get financially independent: Mr Cronin advises UAE residents to pursue financial independence. Start with a Google search and improve your knowledge via expat investing websites or Facebook groups such as SimplyFI.
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Founders: Abdulmajeed Alsukhan, Turki Bin Zarah and Abdulmohsen Albabtain.
Based: Riyadh
Offices: UAE, Vietnam and Germany
Founded: September, 2020
Number of employees: 70
Sector: FinTech, online payment solutions
Funding to date: $116m in two funding rounds
Investors: Checkout.com, Impact46, Vision Ventures, Wealth Well, Seedra, Khwarizmi, Hala Ventures, Nama Ventures and family offices
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
Scoreline
UAE 2-1 Saudi Arabia
UAE Mabkhout 21’, Khalil 59’
Saudi Al Abed (pen) 20’
Man of the match Ahmed Khalil (UAE)
The biog
Favourite colour: Brown
Favourite Movie: Resident Evil
Hobbies: Painting, Cooking, Imitating Voices
Favourite food: Pizza
Trivia: Was the voice of three characters in the Emirati animation, Shaabiyat Al Cartoon
Which honey takes your fancy?
Al Ghaf Honey
The Al Ghaf tree is a local desert tree which bears the harsh summers with drought and high temperatures. From the rich flowers, bees that pollinate this tree can produce delicious red colour honey in June and July each year
Sidr Honey
The Sidr tree is an evergreen tree with long and strong forked branches. The blossom from this tree is called Yabyab, which provides rich food for bees to produce honey in October and November. This honey is the most expensive, but tastiest
Samar Honey
The Samar tree trunk, leaves and blossom contains Barm which is the secret of healing. You can enjoy the best types of honey from this tree every year in May and June. It is an historical witness to the life of the Emirati nation which represents the harsh desert and mountain environments
RedCrow Intelligence Company Profile
Started: 2016
Founders: Hussein Nasser Eddin, Laila Akel, Tayeb Akel
Based: Ramallah, Palestine
Sector: Technology, Security
# of staff: 13
Investment: $745,000
Investors: Palestine’s Ibtikar Fund, Abu Dhabi’s Gothams and angel investors
The details
Heard It in a Past Life
Maggie Rogers
(Capital Records)
3/5
