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Kwarteng gambles on rush for growth

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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.”

Health

NHS performance: Ambulances tied up as hospitals burst at the seams

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  • A NEW set of Welsh NHS performance data was released today (Thursday, June 20), and it contains more bad news.

The Welsh Government described the data as “disappointing”.

WG “LACKS GRIP” ON FUNDAMENTALS

Sam Rowlands MS, the Conservatives’ Shadow Health Minister, said: “These atrocious statistics show that the NHS is going backwards under Labour.

“Two-year waiting lists have increased for the first time in two years.

“Keir Starmer has called Labour-run Wales his blueprint for what a UK Labour Government would look like: these figures are a stark warning for the whole UK.”

Mabon ap Gwynfor MS, Plaid Cymru’s health spokesperson, said: “Labour’s complete mismanagement of the NHS in Wales has left us with waiting lists at the highest on record, targets for diagnosis and treatment are being consistently missed, and people are getting stranded in A&E departments for hours on end.

“It’s no wonder that we have such astronomical waiting times when the government has failed to deal with problems in primary care and social care.

“Until the government gets to grip with these fundamental problems, then waiting lists will continue to climb.”

A Welsh Government spokesperson said: “We have made it a priority to reduce long waiting times, and today, the Cabinet Secretary for Health met with health board chairs to instruct them to redouble their efforts to tackle these.

“These figures show the NHS is continuing to manage incredible demand for urgent and emergency care – the number of immediately life-threatening 999 calls in May was 25% higher than the previous year, and demand is nearly two-and-a-half times higher than pre-pandemic levels.”

THE LOCAL PICTURE: HOSPITALS

Over 30% of patients waiting to start treatment in the Hywel Dda UHB area have been waiting for over 36 weeks.

The Health Board has the second-highest proportion of the population waiting to start therapy. In practical terms, that means that around 4,000 people are yet to get the therapy they need.

The number of patients told they did not have it fell. However, the number of patients starting treatment has remained stable for years.

With rising demand for cancer diagnosis and treatment and no improvement in the numbers starting treatment, performance against the target for treating cancer dropped.

At least 75% of patients should start treatment within 62 days of first being suspected of cancer.

Only 42% of cancer patients in the Hywel Dda UHB area started treatment within the target time. To meet a revised target of 80% by 2026, Hywel Dda UHB will have to increase its performance by almost 100%.

The Welsh Government’s performance target for patients waiting to start treatment for less than 26 weeks is 95%.

No Health Board is close to meeting that target, although Hywel Dda UHB is the second-best performer—just over 50% of patients start treatment within six months.

Despite a dramatic fall in the number of inpatient beds in Hywel Dda UHB’s hospitals over the last six years, the number of inpatient admissions rose sharply in April, placing even greater pressure on chronically overstretched staff and resources.

THE LOCAL PICTURE: AMBULANCES

The percentage of red emergency calls being met within eight minutes fell across Wales.

The ambulance performance target is for 65% of all red calls to be attended to within eight minutes.

Across Wales in May, there were 5,110 red (life-threatening) calls to the ambulance service, 13.9% of all calls.

45.8% of red calls received an emergency response within eight minutes, 2.2 percentage points lower than in April.

In the Hywel Dda UHB area, 47.6% of red calls received an emergency response within 8 minutes, compared to a sharply reduced number of calls in the red category.

Examining more detailed data for the Hywel Dda UHB area demonstrates the pressure on emergency hospital admissions and the knock-on effect on the ambulance service.

When an ambulance takes a patient to hospital, admission is supposed to take place within 15 minutes of arrival, with the ambulance returning to service 15 minutes after that.

In the Hywel Dda UHB area, ambulances were tied up beyond those markers for almost 4,000 hours beyond expected admission and return to on-call.

Fewer than 18% of patients conveyed to a Major Injury Department were admitted within 15 minutes. For Major Acute Units, that turnaround was even worse, at barely 15.5%.

Once cleared, however, well over 80% of ambulances were back out on call.

Diving deeper into the data, we see that just over 1,700 patients travelled by ambulance to major emergency, major acute, and maternity and mental health units.

By a very crude piece of arithmetic, we can calculate that if those 1700 patients accounted for the 4000 hours of “lost time”, the handover stats would be even more shocking, with an average turnover of over two hours.

Moreover, localised data shows that 35.6% of all people who are attended by an ambulance go to a hospital using other means of transport.

A CRISIS ACROSS THE BOARD

The issue could not be clearer: delays at hospitals are keeping ambulances off the road.

The upward pressure on A&E services caused by the collapse of out-of-hours primary care (GPs, etc) is driving up attendance at all hospital A&Es.

The lack of beds is driving up a backlog of treatment. The lack of clinical staff means more junior staff fulfil tasks -including initial diagnoses- formerly taken by clinicians and registered nurses. Consolidating rural services on an urban model is making things worse.

Whatever the cure for the disastrous condition of the Welsh NHS, money will not be enough to turn around decades of decline.

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Community

New health concerns over Withyhedge Landfill site emissions

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LEVELS of a potentially harmful gas emitted by the Withyhedge Landfill Site have been recorded above World Health Organization (WHO) guideline levels, according to a recent report. Public Health Wales (PHW) conducted a health risk assessment on air quality data collected between 1 March and 3 April 2024 in the surrounding area.

The data indicates that during March and April, hydrogen sulphide, a colourless gas with a distinctive “eggy” smell, exceeded the WHO’s odour annoyance guideline. PHW warns that exposure to such odours can cause symptoms like headaches, nausea, dizziness, watery eyes, stuffy nose, irritated throat, cough or wheeze, sleep disturbances, and stress.

PHW stresses the importance of addressing the source of these offsite odours to mitigate potential health impacts on the local community. Despite an enforcement deadline passing last month, residents continue to report gas and odour issues in their homes daily.

“These are common reactions to unpleasant smells, and these effects should usually pass once the odour has dissipated,” PHW stated. “The long-term health risk is low.”

In response to the health risk assessment, PHW advises residents to keep doors and windows closed when the odours are present and seek medical advice if they feel unwell. However, they caution against blocking windows or vents completely, as these are crucial for ventilation and controlling dampness. Once the outdoor smell subsides, opening windows and doors can help eliminate any remaining odours inside.

Work to cap the landfill site has been completed, and PHW has welcomed plans to install static air monitoring equipment around the site to capture more detailed data. Dr. Sarah Jones, a consultant in environmental public health for PHW, acknowledged the stress and anxiety local residents are experiencing due to the odours. She emphasised the importance of resolving the issue swiftly and assured that the health risk assessment would be updated as new data becomes available.

Gaynor Toft, Chair of the Air Quality Group for the Multi-Agency Incident Management team, noted that the risk assessment from PHW is being used to refine and develop the air quality monitoring programme. Suitable locations for static monitoring equipment are being identified to ensure robust data collection for future assessments.

Huwel Manley of Natural Resources Wales (NRW) confirmed that NRW would continue to use its regulatory powers to drive improvements at the site and address the causes of the odour affecting the community. NRW had given RML, the company operating the landfill, until mid-May to undertake several remedial actions to control gas emissions.

The Pembrokeshire Herald has reached out to NRW for a detailed update on the current situation at the site. The community remains hopeful for a swift resolution to these ongoing health and environmental concerns.

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Community

Local projects benefit from Sustainable Development Fund grants

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SEVEN local projects have benefited from over £70,000 of funding through the Pembrokeshire Coast National Park Authority’s Sustainable Development Fund (SDF).

The Pembrokeshire Coast National Park Authority’s Sustainable Development Fund supports community-led projects in and around the Pembrokeshire Coast National Park that contribute towards a reduction in carbon and help respond to the climate emergency.

In the latest round of funding, grants were awarded to Southern Roots Organics, Narberth Museum, and the Crymych Arms Community Pub to install Solar PV systems. Additionally, the Narberth and District Community and Sports Association received funding to upgrade their existing Solar PV system and improve the energy efficiency of their squash court lighting. As well as generating new low-carbon electricity and offsetting higher carbon grid electricity consumption, these projects will reduce ongoing electricity costs for these organisations.

Cosheston Community Hall was another beneficiary, receiving support from the Fund to construct a bike shed. This project aims to encourage more people to cycle to the Hall, promoting sustainable travel within the community.

In Marloes, SDF funding has paved the way for the village clock to be retrofitted with low-energy and Dark-Skies-friendly illumination, which will reduce both energy consumption and light pollution in the area.

The VC Gallery also received funding to upgrade to more energy-efficient windows and doors, which will create a warmer community space and contribute to lower carbon emissions.

Jamie Leatham from Pembrokeshire Coast National Park Authority said: “These grants represent our continued commitment to addressing the Climate Emergency, supporting community-led projects that improve sustainability and reduce carbon emissions.”

“By funding initiatives like Solar PV installations, energy-efficiency upgrades, and sustainable transportation solutions, we are helping our communities to reduce emissions, generate their own low-carbon energy, and raise awareness to promote a greener, more resilient future for the Pembrokeshire Coast National Park.”

The Sustainable Development Fund consists of money allocated from the Welsh Government Sustainable Landscapes Sustainable Places Fund.

Further information can be found at www.pembrokeshirecoast.wales/sustainable-development-fund.

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