LONDON: The British government on Monday axed almost all of its debt-fueled tax cuts unveiled last month to avert fresh markets chaos, in a humiliating climbdown for embattled Prime Minister Liz Truss.
The shock move by new finance chief Jeremy Hunt, parachuted into the job on Friday to replace sacked Kwasi Kwarteng, leaves Truss’ position in a precarious state after a series of embarrassing U-turns.
Hunt estimated the tax changes would raise about £32 billion ($36 billion) per year, after economists estimated the government faced a £60-billion black hole. He also warned of tough spending cuts.
The chancellor of the exchequer said no government could control markets — but stressed his action would give certainty over public finances and help secure growth.
“The prime minister and I agreed yesterday to reverse almost all the tax measures announced in the growth plan three weeks ago,” Hunt told parliament, flanked by a grim-faced Truss.
“I want to be completely frank about the scale of the economic challenge we face,” he added, detailing the domestic and international headwinds confronting Britain.
The chancellor also announced the formation of an economic advisory council, featuring four experts outside of government.
Hours earlier, he had used a brief televised statement to announce the dramatic reversals to nervous markets, conceding last month’s budget from his predecessor had harmed the public purse.
“The most important objective for our country right now is stability,” Hunt had noted.
Hunt scrapped plans to axe the lowest rate of income tax, and curbed the government’s flagship energy price freeze — pulling the plug in April instead of late 2024.
After April, his department will “review” its energy support package, he said.
A proposed reduction in shareholder dividend tax was also binned, along with planned tax-free shopping for tourists and a freeze on alcohol duty.
The announcement comes as Truss’ governing Conservative party tanks in the opinion polls amid the reversals and Britain’s worsening cost-of-living crisis.
Truss fired her close friend Kwarteng on Friday after their recent tax-slashing budget sparked markets chaos — fueling intense speculation over her political future one month after taking office.
“No government can control the markets but every government can give certainty about the sustainability of public finances,” Hunt added Monday.
His action sent the British pound soaring against the dollar and euro, while bond yields dipped.
Last month’s notorious budget had sent bond yields spiking and the pound collapsing to a record dollar-low on fears of rocketing UK debt.
Tax reductions financed via huge borrowing were the centerpiece of last month’s ill-fated budget.
Truss had already staged two embarrassing budget U-turns, scrapping tax cuts for the richest earners and on company profits, and is now facing calls to resign even from her own MPs.
“There will be more difficult decisions I am afraid, on both tax and spending, as we deliver our commitment to get debt falling as a share of the economy over the medium term,” Hunt cautioned.
“All departments will need to redouble their efforts to find savings, and some areas of spending will need to be cut.”
Hunt already stated that he was not taking anything off the table” amid speculation of cutbacks on areas like defense, hospitals and schools.
He met over the weekend with the governor of the Bank of England, Andrew Bailey, and the head of the Debt Management Office for talks.
In the wake of the earlier turmoil, the BoE launched emergency buying of UK government bonds — a policy that ended Friday.
The budget furor has reportedly sparked a plot to oust the prime minister.
UK media reported senior Conservative MPs were plotting to unseat Truss, aghast at her short tenure.
Monday’s latest massive U-turn comes after Truss was elected Tory leader on a tax-slashing platform that analysts dubbed “Trussonomics.”
“That sound you can hear is the death knell for Trussonomics, with the vast majority of her tax cutting plans now consigned to the bin,” said Laura Suter, head of personal finance at stockbroker AJ Bell.
“People have had yogurt in their fridge that’s lasted longer than some of the government’s planned tax cuts,” she added.
In two weeks’ time, Hunt will unveil his medium-term fiscal plan alongside independent economic forecasts from the Office for Budget Responsibility.
But the main opposition Labour party, riding high in the polls, said the ruling Tories were responsible for “chaos and fiasco.”
“This is a Tory crisis, made in Downing Street, but ordinary working people are paying the price,” its finance spokeswoman Rachel Reeves told parliament.
UK axes ‘almost all’ budget tax cuts in humiliation for Truss
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UK axes ‘almost all’ budget tax cuts in humiliation for Truss
- Monday’s U-turn comes after Truss was elected Tory leader on a tax-slashing platform that analysts dubbed ‘Trussonomics’
- The Labour party, riding high in the polls, said the ruling Tories were responsible for ‘chaos and fiasco’
Cargo ship carrying new vehicles to Mexico sinks in the North Pacific weeks after catching fire
“Right now we also have vessels on scene to respond to any pollution”
ANCHORAGE, Alaska: A cargo ship that had been delivering new vehicles to Mexico sank in the North Pacific Ocean, weeks after crew members abandoned ship when they couldn’t extinguish an onboard fire that left the carrier dead in the water.
The Morning Midas sank Monday in international water off Alaska’s Aleutian Islands chain, the ship’s management company, London-based Zodiac Maritime, said in a statement.
“There is no visible pollution,” said Petty Officer Cameron Snell, an Alaska-based US Coast Guard spokesperson. “Right now we also have vessels on scene to respond to any pollution.”
Fire damage compounded by bad weather and water seepage caused the carrier to sink in waters about 16,404 feet (5,000 meters) deep and about 415 miles (770 kilometers) from land, the statement said.
The ship was loaded with about 3,000 new vehicles intended for a major Pacific port in Mexico. It was not immediately clear if any of the cars were removed before it sank, and Zodiac Maritime did not immediately respond to messages Tuesday.
A savage crew arrived days after the fire disabled the vehicle.
Two salvage tugs containing pollution control equipment will remain on scene to monitor for any signs of pollution or debris, the company said. The crew members of those two ships were not injured when the Morning Midas sank.
Zodiac Maritime said it is also sending another specialized pollution response vessel to the location as an added precaution.
The Coast Guard said it received a distress alert June 3 about a fire aboard the Morning Midas, which then was roughly 300 miles (490 kilometers) southwest of Adak Island.
There were 22 crew members onboard the Morning Midas. All evacuated to a lifeboat and were rescued by a nearby merchant marine vessel. There were no injuries.
Among the cars were about 70 fully electric and about 680 hybrid vehicles. A large plume of smoke was initially seen at the ship’s stern coming from the deck loaded with electric vehicles, the Coast Guard and Zodiac Maritime said at the time.
Adak is about 1,200 miles (1,930 kilometers) west of Anchorage, Alaska’s largest city.
The 600-foot (183-meter) Morning Midas was built in 2006 and sails under a Liberian flag. The car and truck carrier left Yantai, China, on May 26 en route to Mexico, according to the industry
site marinetraffic.com.
A Dutch safety board in a recent report called for improving emergency response on North Sea shipping routes after a deadly 2023 fire aboard a freighter that was carrying 3,000 automobiles, including nearly 500 electric vehicles, from Germany to Singapore.
One person was killed and others injured in the fire, which burned out of control for a week. That ship was eventually towed to a Netherlands port for salvage.
South Korea investigators seek to arrest former President Yoon
- Yoon was formally stripped of office in April, after being impeached and suspended by lawmakers over his Dec. 3 attempt to subvert civilian rule, which saw armed soldiers deployed to parliament
SEOUL: South Korean prosecutors asked a court Tuesday for a new arrest warrant to detain ex-President Yoon Suk Yeol, after he refused a summons by investigators probing his failed martial law bid.
Yoon was formally stripped of office in April, after being impeached and suspended by lawmakers over his Dec. 3 attempt to subvert civilian rule, which saw armed soldiers deployed to parliament.
He is already standing trial on insurrection charges, personally attending court to defend himself against the allegations.
However, he has refused several summons issued by a special counsel formed to investigate the martial law declaration that parliament voted to launch earlier in the month.
“Today, the special counsel requested an arrest warrant for former president Yoon Suk Yeol on charges including obstruction of official duties,” the special counsel said in a statement.
“The arrest warrant was requested in order to conduct the suspect’s interrogation,” it said, adding that “he has clearly indicated his intention not to respond to future summons.”
Prosecutor Park Ji-young, a member of the special counsel, said in a news conference that Yoon was just “one of several suspects” that they had summoned to be questioned.
France’s Macron calls talks on New Caledonia future
- New Caledonian elected officials, as well as political, economic and civil society leaders would be invited to the discussions to start on July 2
PARIS: President Emmanuel Macron on Tuesday invited New Caledonia leaders to talks next week on the future of the French overseas territory, a year after deadly separatist violence in the Pacific archipelago.
New Caledonian elected officials, as well as political, economic and civil society leaders would be invited to the discussions to start on July 2, a source familiar with the matter said. It was not immediately clear where the meeting would be held.
The French president in an invitation letter obtained by AFP said discussions would last “as long as necessary” to address key issues “with all the seriousness they deserve.”
“Beyond major institutional topics, I would like for our discussions to touch on economic and societal matters,” Macron added.
Home to around 270,000 people and located nearly 17,000 kilometers (10,600 miles) from Paris, New Caledonia is one of several overseas territories that remain an integral part of France.
New Caledonia has been ruled from Paris since the 1800s, but many indigenous Kanaks still resent France’s power over their islands and want fuller autonomy or independence.
Unrest broke out in May 2024 after Paris planned to give voting rights to thousands of non-indigenous long-term residents, something Kanaks fear would leave them in a permanent minority, crushing their chances of winning independence.
The riots — the most violent since the 1980s — led to the death of 14 people and billions of dollars in damage.
The president’s decision to host talks alongside the Minister for Overseas Manuel Valls also comes after a French court freed independence leader Christian Tein in June.
Tein, who hails from the Kanak group, had been held in custody in eastern France since June 2024 over the rioting in the nickel-rich archipelago.
Investigating magistrates concluded there was no proof that Tein was preparing an armed uprising against the government, according to a source close to the case.
The last independence referendum in New Caledonia was held in 2021, and was boycotted by pro-independence groups over the impact of the Covid-19 pandemic on the Kanak population.
The referendum was the last of three since 2018, all of which rejected New Caledonian independence.
Since the 2021 referendum — which pro-independence campaigners had requested be rescheduled — the political situation in the archipelago has been in deadlock.
Valls led negotiations in May between pro-independence and anti-independence groups, but they did not “reach an agreement about the institutional future of the territory,” Macron said in the invitation letter.
The president in early June declared he wanted a “new project” for New Caledonia.
Major UK supermarket chain to stop sourcing Israeli products
- Co-op board committed to ‘upholding human rights and the rule of law to promote fair trading and peace’
- Palestine Solidarity Campaign: ‘This is a seismic victory for the solidarity movement in this country’
LONDON: One of Britain’s largest supermarket chains will stop sourcing Israeli products following a sustained Boycott, Divestment and Sanctions campaign.
The Co-operative supermarket said the decision was made due to Israeli human rights abuses and violations of international law. It comes into effect this month.
In May, a motion at the Co-op annual general meeting calling for an end to trade with Israel received overwhelming support. The supermarket board’s decision covers 17 “countries of concern,” including Israel.
Co-op will now launch a phased approach to begin removing products sourced from the 17 countries.
The BDS campaign, led by the Palestine Solidarity Campaign, saw the Co-op board commit to a “sourcing policy aligned with established co-operative values, upholding human rights and the rule of law to promote fair trading and peace.”
The supermarket will now avoid sourcing products from countries where “there is consistent behavior which would constitute community-wide human rights abuses or violations of international law.”
Through the new policy, Co-op believes it “can make a difference directly or indirectly to those affected and would alleviate suffering.”
Israel is a major exporter of fruit and vegetables to the UK, and its products are widely stocked at British supermarkets, including as ingredients in larger items.
A number of Israeli farms operate facilities in the occupied West Bank, in settlements that are illegal under international law.
PSC hailed Co-op’s decision as a “major victory.” It follows the “Don’t Buy Apartheid” campaign that the organization conducted this year, urging a widespread boycott of Israeli products in British shops, restaurants and venues.
Ben Jamal, PSC director, said: “This is a seismic victory for the Palestinian solidarity movement in this country, which demands that the government, institutions and corporations end all economic, political and military support for the state of Israel, which is conducting a live streamed genocide in Gaza after decades of military occupation and imposing a system of apartheid on Palestinians.
“The Co-op, as befits its history, has shown great moral courage and ethical principle in deciding that it cannot ignore voices from the British public calling out Israel’s gross human rights abuses and violations of international law — and even more importantly, it cannot economically support that regime through doing business in Israel.
“This beacon of leadership must now be taken up by all other supermarket chains which continue to sell Israeli goods, despite knowing they are supporting its war crimes.”
UK government says Chinese spying on the rise
- Prime Minister Keir Starmer commissioned an “audit” of Britain’s relations with Beijing
- The report, published on Tuesday, recommended high-level engagement with China but also building “resilience” against threats
LONDON: Chinese spying and attempts by Beijing to undermine Britain’s democracy and economy have risen in recent years, the UK government said Tuesday in a report on the Asian giant.
Foreign minister David Lammy told parliament the Labour administration would invest £600 million ($818 million) in its intelligence services as a result of the findings.
Prime Minister Keir Starmer commissioned an “audit” of Britain’s relations with Beijing after he swept to power in landslide general election win last July.
The report, published on Tuesday, recommended high-level engagement with China for a “trade and investment relationship” but also building “resilience” against threats posed by Beijing.
“We understand that China is a sophisticated and persistent threat,” but “not engaging with China is therefore no choice at all,” Lammy told MPs.
“Like our closest allies, we will co-operate where we can and we will challenge where we must,” he said, vowing that meant “never compromising on our national security.”
Starmer has vowed to pursue a “consistent” relationship after the previous Conservative government first trumpeted a “golden era” of close diplomatic ties before relations became increasingly strained.
The British PM hopes Chinese investment can help him achieve his main mission of firing up Britain’s economy.
But differences over Russia’s war in Ukraine, Beijing’s treatment of Uyghurs and Hong Kong — including the imprisonment of media mogul Jimmy Lai — pose hurdles to repairing relations.
In a joint letter coordinated by Reporters Without Borders, 33 organizations around the globe wrote to Starmer on Tuesday asking him to meet Lai’s son Sebastian.
“As a British citizen facing an unthinkable ordeal, Sebastien Lai deserves to hear first-hand from the Prime Minister what the UK is doing to secure his father’s release,” said the letter, which was signed by groups including Amnesty International UK and Human Rights Foundation.
Espionage allegations have also blighted the relationship in recent years, including claims that a Chinese businessman used his links with Britain’s Prince Andrew to spy for the Communist Party.The report noted that “instances of China’s espionage, interference in our democracy and the undermining of our economic security have increased in recent years.”
“Our national security response will therefore continue to be threat-driven, bolstering our defenses and responding with strong counter-measures,” the government said.
Starmer’s administration is due to rule on whether to approve Beijing’s controversial plans to open the biggest embassy in Britain at a new London location.
Residents, rights groups and China hawks oppose the development, fearing it could be used for the surveillance and harassment of dissidents.
