News

Kwarteng gambles on rush for growth

Published

3 years ago

September 23, 2022

Jon Coles

CHANCELLOR of the Exchequer Kwasi Kwarteng unveiled his and Liz Truss’s economic vision for the UK on Friday morning.

The headlines are straightforward.

There will be £45bn in tax cuts by 2027; however, the largest cuts – national insurance cuts, the abolition of the cap on bonuses and the highest income tax rate- benefit only high earners.

MAIN POLICIES

Cut in the basic rate of income tax to 19% from April 2023;

National Insurance will not rise as scheduled, and the Government will reverse the current year rise as of November 6;

New Health and Social Care Levy to pay for the NHS will not be introduced;

The top rate of income tax was cut from 45% to 40%;

Cancel the rise in corporation tax which was due to increase from 19% to 25% in April 2023;

Rules around universal credit tightened by reducing benefits if people don’t fulfil job search commitments;

VAT-free shopping for overseas visitors;

End of the cap on bankers’ bonuses;

Planned increases in the duties on beer, cider, wine, and spirits cancelled;

Government to discuss setting up investment zones with 38 local areas in England.

Alongside the above, the Chancellor announced plans to remove environmental safeguards for building developments and reduce the regulatory burden on financial institutions.

KWARTENG LEAVES LABOUR AN OPEN GOAL

In an interview with Rishi Sunak during the Conservative leadership contest, Nick Robinson observed that it would be a nasty surprise for the former Chancellor when he found out who’d been in power for the last twelve years.

Kwasi Kwarteng followed Liz Truss’s preferred method of operation: he pretended they hadn’t happened.

The Chancellor comprehensively dumped on the policies pursued over the last dozen years by successive Conservative governments, for a decade of which Liz Truss has been a member.

His statement was, as one ministerial colleague said, “a game changer”, although perhaps not in the way he envisaged.

So complete was the change of economic policy that it leaves an open question about how Mr Kwarteng and his Cabinet colleagues ended up in the same political party as most of their backbench colleagues and served under the last three Conservative leaders.

Shadow Chancellor Rachel Reeves did not miss the open goal. Even as Mr Kwarteng and Ms Truss shook their heads on the government benches, she hammered home that the Chancellor’s statement was an admission the record of Conservative governments since 2010 was one of a failure to deliver growth or a viable economic plan.

THE SUPPLY SIDE FIX

The Chancellor and Prime Minister’s rationale is that cutting taxes for the already well-off will benefit all citizens as they are incentivised to invest and act in entrepreneurial ways. In addition, reducing regulation for businesses will encourage increased commercial enterprise.

They believe the growth stimulated will make up for any loss in tax revenues as increased economic activity, encouraged by lower taxes, leads to increased government revenues.

That approach is called supply-side economics, which focuses on increasing the supply of goods and services through growth.

In every developed nation where the Government’s brand of economics has been tried, two things have happened: a cataclysmic bust has followed a short-term burst of economic activity.

In addition, wealth inequalities – and the UK is already grossly unequal – are embedded and made worse.

Low taxes on the wealthiest do not distinguish between those who generate wealth through their industry or create economic activity through business investment and those who inherit wealth or sit on capital without producing anything.

“THE RICH WILL REJOICE”

Wales’s Finance Minister, Rebecca Evans MS, responded: “Rebecca Evans, Minister for Finance and Local Government, said: “Instead of delivering meaningful, targeted support to those who need help the most, the Chancellor prioritises funding for tax cuts for the rich, unlimited bonuses for bankers, and protecting the profits of big energy companies.

“Instead of increasing funding for public services in line with inflation, we get a Chancellor blithely ignoring stretched budgets as public services find their money is not going as far as it did before.”

Plaid Regional MS Cefin Campbell said: “This Budget will see the rich rejoice as their bonuses rocket and their tax bill sliced, once again it will be the poorest and most vulnerable bearing the brunt of the disastrous cost of living crisis.”

Plaid Cymru’s Treasury spokesperson, Ben Lake MP, added: “Tax cuts for the super-rich will do absolutely nothing to drive growth in the Welsh economy.

“I urge the UK Government to recognise that our Government in Wales must be given the fiscal tools to unlock our economic potential ourselves. That is the only way to improve the lives of people across Wales.”

Welsh Conservative Shadow Minister for Finance, Peter Fox MS, said: “Today shows that the UK Conservative Government has a comprehensive plan to provide a sharp boost to the economy by putting cash back into people’s pockets. Labour in Wales has the power to cut taxes in Wales but chooses not to.

“Mark Drakeford needs to take a leaf out of Liz Truss’ book and take immediate action to support hard-working people and struggling businesses, stimulating the Welsh economy rather than stifling it.”

Scott Corfe, Research Director at Social Market Foundation, said: “The Chancellor is taking a very high-risk gamble with the economy.

“If his package of enormous tax cuts and ‘supply side reforms’ fails to translate into significantly higher economic growth, we risk further falls in the pound and surging gilt yields as investors lose confidence in our ability to pay our way in the world.

“That, in turn, means higher inflation, an unsustainable trajectory for the public finances and steeper interest rate rises – potentially deepening rather than alleviating the cost of living crisis.”

Finance

Barclays raises mortgage rates by up to 0.15% in fresh blow to borrowers

Published

2 minutes ago

February 4, 2026

Tom Sinclair

HOMEOWNERS and buyers have been dealt another setback after Barclays became the latest high street lender to increase mortgage rates, pushing up fixed deals by as much as 0.15%.

The move follows similar rises from HSBC and Nationwide Building Society, signalling a broader shift across the market after months of gradually falling prices.

Barclays confirmed that residential purchase and remortgage products will both increase.

Among the changes, its five-year fixed remortgage deal at 60% loan-to-value (LTV) rises from 4.00% to 4.15%. The product requires a minimum £50,000 loan and allows borrowing up to £2 million.

Purchase-only deals are also affected. A five-year fixed rate at 60% LTV with an £899 fee climbs from 3.79% to 3.90%, while a two-year fixed deal increases from 3.77% to 3.85%.

Industry experts say the rises reflect growing funding costs and cooling expectations of imminent interest rate cuts.

Jonathan Alvarez Herrera, mortgage consultant at Ayla Mortgages said: “Barclays’ decision to increase mortgage rates is a clear sign that the recent downward momentum in pricing has stalled. Borrowers had been seeing improvements in recent months, but this repricing shows lenders are reacting to higher costs and changing market expectations.

“Barclays is not acting alone. HSBC and Nationwide have already moved, which suggests this is a market-wide correction rather than an isolated decision.

“With swap rates edging higher, lenders are rebuilding margins. Markets also expect the Bank of England to remain cautious, meaning rate cuts could be slower than previously hoped.”

Mortgage brokers pointed to rising SONIA swap rates and inflation ticking up to 3.4% in December, from 3.2% the month before, as key drivers behind the increases.

The changes may frustrate buyers hoping that 2026 would bring cheaper borrowing costs, particularly first-time purchasers and households coming off fixed deals agreed during the low-rate period.

With several major lenders now moving in the same direction, brokers warn others could follow if funding costs remain elevated.

News

Paris in February made easy with special direct Air France flights from Cardiff

Published

8 hours ago

February 4, 2026

Tom Sinclair

TRAVELLING to Paris has never been simpler for Welsh holidaymakers, with Air France launching a series of special direct weekend services from Cardiff Airport to the French capital this month.

The limited-period flights offer a convenient, non-stop journey of under two hours to Paris, giving passengers more time to enjoy the city’s culture, cuisine and famous landmarks without the hassle of connections or long road transfers to other UK airports.

Timed perfectly for winter city breaks and Valentine’s getaways, the services run between February 13 and February 16, making them ideal for long weekends.

February is widely considered one of the best times to visit the French capital, with fewer crowds and a relaxed, romantic atmosphere. Visitors can explore world-famous attractions including the Eiffel Tower, the Arc de Triomphe and Notre-Dame Cathedral, browse galleries at the Louvre and Musée d’Orsay, or simply enjoy cafés, bistros and Michelin-starred dining across the city.

With Valentine’s Day falling during the operating period, the flights offer couples an easy escape for scenic walks along the Seine, memorable meals and classic Parisian experiences.

Jon Bridge, CEO of Cardiff Airport, said: “We’re delighted to offer direct flights to such a vibrant city for Valentine’s weekend. Cardiff Airport is expanding its reach, giving customers an easy, friendly travel experience and fantastic options. We’ve listened to passenger demand and are excited to make this opportunity possible, with more to come from Cardiff.”

Seats are available now via airfrance.co.uk and through travel agents. As availability is limited, early booking is recommended.

Flight schedule

Cardiff (CWL) to Paris (CDG)

• Feb 13 – AF4149 – 6:20pm → 8:50pm
• Feb 14 – AF4149 – 3:20pm → 5:50pm
• Feb 15 – AF4149 – 9:20am → 11:50am
• Feb 15 – AF4151 – 9:00pm → 11:30pm
• Feb 16 – AF4149 – 9:20am → 11:50am
• Feb 16 – AF4151 – 5:50pm → 8:20pm

Paris (CDG) to Cardiff (CWL)

• Feb 13 – AF4148 – 5:00pm → 5:30pm
• Feb 14 – AF4148 – 2:00pm → 2:30pm
• Feb 15 – AF4148 – 8:00am → 8:30am
• Feb 15 – AF4150 – 7:40pm → 8:10pm
• Feb 16 – AF4148 – 8:00am → 8:30am
• Feb 16 – AF4150 – 4:30pm → 5:00pm

Education

Language commissioner launches probe into school closure impact on Welsh

Published

8 hours ago

February 4, 2026

Tom Sinclair

THE WELSH Language Commissioner has launched a formal investigation into claims that the proposed closure of a rural Carmarthenshire primary school did not properly assess the impact on the Welsh language.

Campaign group Cymdeithas yr Iaith confirmed this week that the Welsh Language Commissioner will examine whether Carmarthenshire County Council complied with its legal duties when producing a language impact assessment linked to plans to close Ysgol Llansteffan.

The council issued a statutory notice last year proposing to shut the village school at the end of the summer term as part of wider education reorganisation. A final decision had been expected this spring.

However, the investigation now creates fresh uncertainty over the timetable.

Complaint over ‘insufficient assessment’

Cymdeithas yr Iaith says it submitted a formal complaint arguing that the council failed to produce a sufficiently detailed assessment of how the closure could affect Welsh-medium education and the wider Welsh-speaking community.

The group claims the authority selectively used data to support closure rather than examining all available evidence objectively.

Two key concerns were raised.

Firstly, campaigners argue there may not be enough places in neighbouring Welsh-medium schools to accommodate pupils from Llansteffan and nearby housing developments, potentially forcing some families into English-medium provision.

Secondly, they say the assessment did not meaningfully consider the school’s role as a community hub or explore ways the site could generate income and support local Welsh-language activities.

On behalf of local members, Ffred Ffransis said: “There will not be places for all the Llansteffan children, nor for the children of the new housing estates, in other Welsh-medium schools in the area.

“The most cost-effective way of providing sufficient places locally in Welsh-medium education is by keeping open Ysgol Llansteffan and making better use of the buildings, including environmental education and community use.”

Formal investigation

In a letter to the group, the commissioner confirmed an investigation will be held under Section 71 of the Welsh Language Measure to determine whether the council complied with Welsh language standards.

The probe could take up to three months.

Campaigners believe this may delay implementation of the closure and could require the council to revisit its assessment and potentially carry out a fresh statutory consultation.

Ffransis said: “Even if the council now decided to make a full and meaningful assessment, there would likely have to be a new consultation. The original decision may have been taken on a faulty basis.”

He added that similar concerns had been raised about language impact assessments connected to other proposed school closures in the county.

Council position

The council has previously said that school reorganisation proposals are driven by falling pupil numbers, financial pressures and the need to ensure sustainable, high-quality education.

Authorities across Wales have faced difficult decisions in recent years as rural rolls decline and building maintenance costs rise.

It is expected the council will respond formally to the commissioner’s investigation in due course.