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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.”

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Health

Pembrokeshire residents suffer severe health decline ‘due to landfill gases’

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A PEMBROKESHIRE couple, Mr Richard and Revd Patricia Rogers of Crud yr Awel, are experiencing severe health issues attributed to emissions from the Withyhedge Landfill, resulting in drastic lifestyle changes and severe symptoms.

Revd Rogers, who has managed asthma since childhood, reported a significant deterioration in her condition following exposure to landfill gases. Despite having controlled her asthma with minimal medication for years, she now requires intensive treatment including increased doses of Symbicort and Salbutamol Sulfate inhalers, alongside courses of steroids and antibiotics. Her symptoms have escalated to include extreme breathlessness, a hacking cough, frequent nosebleeds, continual headaches, and vertigo, culminating in a severe impact on her ability to perform daily tasks and care for her disabled daughter.

The couple’s health is closely monitored through their doctor’s surgery, and they attend the asthma clinic regularly. However, feeling powerless to directly change the situation, they have taken a stand by cancelling their council tax payments, a decision they plan to maintain until the landfill issue is resolved.

Revd Rogers has also prepared a letter to the Coroner, outlining the severity of her health issues as potentially life-threatening due to the landfill’s impact. This dramatic step underlines the gravity of their situation and their desperation for a resolution.

The Rogers’ story is not just a personal tragedy but a stark example of the broader environmental and health challenges faced by the community surrounding the Withyhedge Landfill.

They are calling for punitive measures against those responsible, including compensation for the financial impacts of their ordeal.

Their story has surfaced on the same day we reported that Natural Resources Wales is taking further enforcement action against the firm running the site.

NRW has issued site operators Resources Management UK Ltd (RML) with a further Regulation 36 Enforcement Notice which requires the operator to deliver a series of actions by specified deadlines to address ongoing smells from the landfill.

You can read more about the Enforcement Notice on the NRW website.

Outgoing Council Leader, Cllr David Simpson, said in a statement this week: “The smell from Withyhedge is having a major impact on residents and visitors. This situation has gone on too long and it is unacceptable.

“We now need to see RML act on the demands of the Notice and within the deadlines.

“The Council fully backs NRW’s stance that nothing is off the table in terms of further enforcement, including suspending the site’s environmental permit if appropriate, and we remain committed to working with NRW to ensure a long term solution to these issues.”

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Entertainment

Fishguard Festival of Music launches at the Senedd in Cardiff

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  • Paul Davies MS for Preseli Pembrokeshire hosts event to promote major programme of summer concerts.

THIS year’s Fishguard Festival of Music/Gwyl Gerdd Abergwaun was officially launched at the Senedd in Cardiff Bay this week (Wednesday) in an event hosted by Paul Davies MS Preseli Pembrokeshire.  Guests attending heard from the festival’s artistic director Gillian Green MBE about the 18 events extending over three weeks that will be staged at venues across Pembrokeshire from 18 to 31 July, including a concert by the Welsh National Opera Orchestra at St David’s Cathedral.

Paul Davies MS, said: “I’m truly honoured once again to sponsor the launch of the Fishguard Festival of Music. Over the summer, Fishguard will host world-famous musicians like harpist Catrin Finch and fiddle player Aoife Ní Bhriain, and the festival also includes performances from the National Youth Orchestra of Wales, the National Youth Choir of Wales and the Welsh National Opera Orchestra – so there really is something for everyone! Tickets to these performances sell out quickly and so make sure to head over to the Festival’s website and secure your tickets before it’s too late.”   

Gillian Green MBE, Artistic Director of the Fishguard Festival of Music, added: “The Fishguard Festival plays a significant role on the cultural map of Wales and our mission to bring world-class music to Pembrokeshire is as strong as ever. This year we will have a real feast of music awaiting audiences in West Wales.  The local community’s work in producing this fantastic festival is nothing short of a small miracle.”

Artists performing at this year’s festival include Peter Donohoe, Catrin Finch and the Marmen String Quartet.  The full programme is available to view on the festival’s website www.fishguardmusicfestival.com

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Climate

NRW to reduce mowing in May to help pollinators

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NATURAL Resources Wales (NRW) will reduce mowing as much as possible on the land in its care during May to help tackle the nature emergency and in support of Plantlife’s ‘No Mow May’ campaign.

The scale and rate of biodiversity loss across Wales is accelerating. Every third mouthful of food we eat has been created by pollination, and without pollinators our food supply would collapse.

Half of the UK’s 27 bumblebee species are in decline, and of the 43 species of butterfly seen in Wales, 10 are in severe decline and 17 are declining.

There are several reasons for the decline in pollinators, such as climate change, pollution and pesticides, and change in how land is managed.

Throughout the growing season, NRW cuts grass and vegetation in areas such as forests, nature reserves, river banks, flood defences and reservoir embankments.

Reducing mowing in May will help biodiversity by allowing spring plants to set seed and grow to provide nectar and pollen for pollinators, such as bees and butterflies.

NRW will reduce its mowing activities in May as much as possible, but essential grass cutting will continue in some areas across Wales.

There are several reasons for this, for example:

  • to manage access to forests and nature reserves to make sure people are safe when they visit.
  • to easily inspect flood defences and repair them if needed, helping to reduce flood risk to communities.
  • for nature conservation, for example to manage an invasive species or to benefit species in a certain area by cutting the vegetation.

David Letellier, NRW’s Head of Operations South Wales Central, said: “We’re committed to tackling the climate and nature emergencies and helping nature and people thrive together.

“We will reduce our mowing activities in May as much as possible to support pollinators, but we want people to understand that we may carry out essential grass cutting to benefit certain communities or species.

“For example, we may continue mowing flood defences to make sure they are in good working order, or if mowing some sites in May would leave wildflowers to recover and bloom throughout the late summer to benefit certain pollinators.

“We need to act now to protect our pollinators. This is why we manage all of our sites to make them as pollinator friendly as possible and to provide food and shelter for other species.

“There are things we can all do to make it easier for pollinators to survive. These can be relatively simple, such as managing grass verges in a more sensitive way, or leaving wild areas around our offices, homes and public buildings.

“We can all help by making our gardens pollinator-friendly by not using pesticides, not mowing the lawn as often, and growing pollinator-friendly plants.”

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