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Jeremy Hunt sets new direction for government as Truss’s credibility trashed by u-turn

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ON MONDAY, Jeremy Hunt unpicked virtually every element of Kwasi Kwarteng’s mini-budget to calm financial markets and restore order to chaos.

The new Chancellor’s statement was a sobering reminder that although Prime Ministers serve with their colleagues’ consent, governments cannot survive without market confidence.

Mr Hunt said every Government’s core responsibility was to deliver economic stability.

“No government can control the markets. But every Government can give certainty about the sustainability of the public finances.”

His words were a damning implied indictment of the PM’s economic policy.

FULL REVERSE GEAR

The Chancellor’s words had an immediate effect on markets: the pound strengthened, and UK government bond yields fell to reduce the cost of government borrowing.

The statement might reduce the amount of a projected mortgage interest rise in November.

But make no mistake: the statement is a humiliation for the PM.

Every policy she’s trailed, trumpeted, and brought in has been chucked on the bin fire of her Government’s reputation.

Liz Truss sacked Mr Kwarteng because she did as she said and pursued a policy she endorsed enthusiastically.

The PM’s campaign slogan was “Trusted to Deliver”.

Her detractors pointed out that Liz Truss was pushed by the political winds and could not set her own course.

She’s tried setting her course and crashed the economy into an iceberg.

Moreover, her Cabinet colleagues must wonder whether they can trust the PM to stand behind them when they pursue a government policy she supports.

This is a government living hour-to-hour, in office but not in power, and with its key policies made by financial markets instead of ministers.

Separate lives:  Truss and Kwarteng part ways

GOVERNMENT AIMS TO “REGAIN TRUST”

The Chancellor’s statement pulled no punches about the size of Ms Truss’s and Mr Kwarteng’s miscalculation and overconfidence.

Mr Hunt said: “The government is prepared to act decisively and at scale to regain the country’s confidence and trust.”

The painful use of the word “regain” underlines what the Government lost after September 23.

The Chancellor stated there would be “more difficult decisions” on tax and spending.

Mr Hunt is focused on lowering debt in the medium term and putting public finances on “a sustainable footing”.

Using the word “sustainable” implies the previous plan was unsustainable.

In light of this, government departments will be asked to find efficiencies within their budgets. The Chancellor is expected to announce further changes to its fiscal policy on October 31 to put the public finances on a sustainable footing.

Reversal of fortunes: Pound rebounded on announcement of U-turn

TAX CUTS SCRAPPED

The Chancellor announced a reversal of almost all of the tax measures set out in the Growth Plan that have not been legislated for in parliament.

The following tax policies will no longer be taken forward:

Cutting the basic rate of income tax to 19% from April 2023. While the Government aims to proceed with the cut in due course, this will only happen “when economic conditions allow for it, and a change is affordable”. The basic rate of income tax will therefore remain at 20% indefinitely. This is worth around £6 billion a year.
Cutting dividends tax by 1.25 percentage points from April 2023. The 1.25 percentage points increase, which took effect in April 2022, will remain in place. This is valued at around £1 billion a year.
Repealing the 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) from April 2023. This will cut the Government’s growth plan’s cost by around £2 billion a year.
Introducing a new VAT-free shopping scheme for non-UK visitors to Great Britain. Not proceeding with this scheme is worth around £2 billion a year.
Freezing alcohol duty rates from February 1 2023, for a year. Not proceeding with the freeze is worth approximately £600 million a year.
This follows from the previously announced decisions not to proceed with the Growth Plan proposals to remove the additional income tax rate and to cancel the planned increase in the corporation tax rate.

The changes are estimated to be worth around £32 billion a year.

That still leaves the Government with a lot to find to plug the hole in its finances, which indicates more pain will follow in public spending.

The Government’s reversal of the National Insurance increase, the Health and Social Care Levy, and the Stamp Duty Land Tax cuts will continue to benefit millions of people and businesses.

The £1 million Annual Investment Allowance, the Seed Enterprise Investment Scheme and the Company Share Options Plan will continue supporting business investment further.

ENERGY BILL SUPPORT TO CHANGE

In September, the Government announced massive financial support to protect households and businesses from high energy prices.

The Energy Price Guarantee and the Energy Bill Relief Scheme support millions of households and businesses with rising energy costs.

The Chancellor made clear they will continue to do so from now until April next year.

However, looking beyond April, the Prime Minister and the Chancellor have agreed that it would be irresponsible for the Government to continue exposing the public finances to unlimited volatility in international gas prices.

A Treasury-led review will therefore be launched to consider how to support households and businesses with energy bills after April 2023. The review’s objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.

The Chancellor also said in his statement that any support for businesses will be targeted to those most affected and that the new approach will better incentivise energy efficiency.

“CHAOS AT THE HEART OF GOVERNMENT”

Rebecca Evans, Wales’s Finance Minister, responded: “The complete unravelling of the mini-budget shows the chaos at the heart of the UK Government.
“In six short weeks, the UK Government’s reckless and flawed economic policy has caused mayhem in the financial markets, pushed up mortgage costs and stretched household budgets even further.
“Now the UK Government is rolling back on its energy price support scheme for households, which will only add to the uncertainty people face as they worry about paying their bills.
“The new Chancellor has signalled a new era of austerity to start to fill the hole in public finances.
“We will all pay for the Government’s mistakes. But this is a crisis made in Downing Street and one it needs to address.
“The Chancellor needs to use his next financial statement to provide reassurance we will not see the deep spending cuts that will affect jobs, services and our economy – and to provide support to vulnerable households who have been ignored today.”

Charity

Fishguard RNLI celebrates first female Coxswain in Wales, as charity marks 200th year 

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ON MONDAY, March 4, the Royal National Lifeboat Institution (RNLI) will celebrate 200 years of saving lives at sea. Fishguard RNLI Lifeboat Station is celebrating being both the oldest lifeboat station in Wales, as well as being the first Welsh station to have a female Coxswain. 

On the day the charity turns 200, the RNLI is revealing its volunteer lifeboat crews and lifeguards in west Wales have saved an incredible 3,891 lives during its two centuries of lifesaving.  

Since the charity was founded in 1824, its volunteer crews in west Wales have launched the lifeboats 14,872 times, saving 3,776 lives, while its lifeguards – who became part of the RNLI’s lifesaving service in 2001 – have responded to 8,865 incidents, saving 115 lives*.  In total across the UK and Ireland, 146,452 lives have been saved by the RNLI – this equates to an average of two lives saved every day for 200 years.  

Since 1824, the four lifeboat stations in Ceredigion have launched 4,848 times and saved 1,238 lives. In Pembrokeshire, the five stations have launched 8,563 times and saved 2,395 lives. Burry Port station in Carmarthenshire has launched 1,461 times and has saved 143 lives.  

Fishguard Lifeboat Station on the far west coast of Pembrokeshire was the first lifeboat station to be established in Wales. Originally established in 1822, Fishguard’s first lifeboat was built by locals. In 1855, local inhabitants requested that the RNLI take over the station. 

The station has also made RNLI history by being the first station in Wales to appoint a female Coxswain – Gemma Gill. Gemma has recently passed out as Coxswain and is thoroughly enjoying her new role.  

Gemma joined the RNLI in 2001 serving as a volunteer for North Berwick and Aberystwyth RNLI before becoming a full-time staff member.  

Gemma said:  ‘The first person to take me to sea on a lifeboat was a woman called Rhona, and she told me “don’t let other people decide what you’re capable of,” which has always stuck with me. 

‘While I believe it’s a matter of skills and experience rather than gender, I recognise the significance of this milestone. 

‘We’ve come a long way from the image of a lifeboatman in his oilskins, and, as the first woman to become an RNLI coxswain in Wales, I hope to inspire other women and girls to join the lifeboat crew.’ 

Although not officially part of the early lifeboat crews, women have always played an active role in the work of the RNLI, from the ‘lady launchers’ who played key roles at lifeboat stations assisting in the launching and recovery of vessels, to fundraisers such as Marion Macara who helped to organise the first recorded charity street collection in Manchester in 1891.  

Throughout its history, Fishguard lifeboat station has been awarded 28 medals. One gold, 18 silver and nine bronze. Today the station operates a D-class inshore lifeboat Edward Arthur Richardson as well as a Trent class Blue Peter VII.   

While much has changed in 200 years, two things have remained the same – the charity’s dependence on volunteers, who give their time and commitment to save others, and the voluntary contributions from the public which have funded the service for the past two centuries.  

Jo Partner, RNLI Head of Region for Wales says:  ‘I am immensely grateful to everyone who is involved with the charity across Wales – our volunteers, supporters and staff. Today is a hugely significant day in our history and an occasion we should all be very proud of. I know there are lots of events being planned across Wales to mark this very special day and I hope people enjoy being part of this special piece of history.   

 ‘I would like to take this opportunity to say thank you to all those who play a part in making the RNLI the proud organisation is it today – which really is a cause for celebration.’   

RNLI Heritage Archive and Research Manager, Hayley Whiting, says: ‘The RNLI’s founder, Sir William Hillary, witnessed the treacherous nature of the sea first-hand when living on the Isle of Man and he wanted to take action. His first appeal to the nation in 1823 did not have the desired result but, thankfully, he persevered and gained the support of several philanthropic members of society, who put their names to the charity at a meeting in the City of London Tavern on 4 March 1824.  

‘Twelve resolutions were passed at that meeting, the core of which still stand as part of the RNLI’s Charter 200 years later. This shows how the RNLI’s values and purpose have remained unwavering for 200 years, despite the social and economic changes and challenges of the past two centuries.  

‘Hillary’s vision was ambitious and forward-thinking, and no doubt he would be extremely proud to see the charity he founded still going strong today, and to see how much it has achieved.’ 

The charity has a history of innovation, and adapting to challenging circumstances, such as: 

Lifejackets: In 1861, Whitby lifeboat crew launched six times to rescue stricken vessels in a storm, but on their sixth launch a freak wave capsized the lifeboat and all but one of the crew were lost. The sole survivor was Henry Freeman, who survived because he was wearing a new design of cork lifejacket. After this event, the cork lifejacket became more widely adopted by lifeboat crews.  

Fundraising: In 1886, 27 lifeboat crew members from Southport and St Annes lost their lives while trying to rescue the crew of the Mexico. A public appeal was launched, driven by local man Charles Macara. An 1891 appeal raised £10,000 in two weeks. On 1 October, Charles and his wife Marion organised the first Lifeboat Saturday. Bands, floats and lifeboats paraded through the streets of Manchester, followed by volunteers collecting money. More than £5,000 was taken on the day, which was the first recorded example of a charity street collection. 

Lifeboats: In 1914, over 140 people were saved when the hospital steamship Rohilla was wrecked. The ship had been en route to Dunkirk to help wounded soldiers but was broken up when it ran aground on rocks near Whitby.  Five lifeboats battled terrible seas to reach the ship.  A motor lifeboat (the first of its kind) from Tynemouth, took the last 50 people on board. In total, 144 people were saved by the crews, who worked for over 50 hours in atrocious conditions. The motor lifeboat proved its capabilities and became more widely accepted by lifeboat crews after this event.  

Wartime: When the First World War broke out, many lifeboat volunteers were called away to fight. The average age of lifeboat crews at home increased to over 50. During 1914-18, RNLI lifeboats launched 1,808 times, saving 5,332 lives.  In 1939, young lifeboat volunteers were called away again to war. By the end of the Second World War, RNLI crews had saved 6,376 lives around the coasts of Britain and Ireland.  

In 1940, 19 RNLI lifeboats were used to evacuate troops from Dunkirk. Two had RNLI crews onboard, while the others were crewed by the Royal Navy. The lifeboats and their stand-in crews saved thousands of lives while being shelled and bombed for days.  

Throughout its bicentenary year, the charity is running events and activities to remember its important history and celebrate the modern lifesaving service it is today, while hoping to inspire generations of future lifesavers and supporters.   

A Service of Thanksgiving to mark 200 years of the RNLI will take place at Westminster Abbey on 4 March 2024 at 11.30am. It will be attended by representatives from RNLI lifesaving communities around the UK and Ireland.  

For further information about the RNLI’s 200th anniversary, visit RNLI.org/200

*Statistics from RNLI Operational Data from 4 March 1824 to 31 December 2023 inclusive. A life saved shows how many of the people helped by the RNLI would have lost their life had the RNLI not been there.  

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News

Unwelcome Caller: Pembrokeshire’s looming Council Tax dilemma

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AS WE HAVE reported, Pembrokeshire County Council faces a contentious decision as it considers a recommended inflation-busting 16% increase in council tax to balance its budget.

Councillor Mike Stoddart, known for his critical blog posts as ‘Old Grumpy,’ is voicing strong opposition to the proposed hike, highlighting the intricate challenges and pressures facing the council in these financially strained times.

The recommendation for this substantial increase comes as the council grapples with a tight financial situation, prompting a series of budget-setting seminars aimed at aligning council members on the path forward. Stoddart, who previously voted against last year’s 7.5% increase, remains a staunch opponent, citing a lack of compelling justification for the new rate and expressing concerns over the methods used to secure consensus among council members.

The crux of Stoddart’s argument lies in the perceived manipulation of council members through what he describes as ‘psyops’—psychological operations—intended to sway their votes in favour of the budget proposals. He criticises the shift from informative seminars on local government finance to pressure-laden presentations forecasting dire consequences should the council fail to approve the tax increase. This, according to Stoddart, transforms a complex decision into a dichotomy of distributing “pain” between taxpayers and service users, a decision he argues should remain in the political realm, subject to public scrutiny and debate.

Adding to the complexity are communications from the council’s finance chiefs, setting strict guidelines for proposing alternative budgets. These guidelines effectively place a veto power in the hands of the s151 officer, the council’s finance chief, over any alternative budget proposals. This move has sparked concerns over the democratic process within the council, with Stoddart highlighting the inherent conflict of interest in having one’s proposals judged by an officer whose original budget they aim to challenge.

The narrative took a more dramatic turn with the involvement of Max Caller CBE, a figure introduced to underscore the grave consequences of failing to set a balanced budget. Stoddart’s recounting of Caller’s seminar paints a picture of stark warnings against the backdrop of potential misconduct charges, a tactic Stoddart views as fearmongering designed to quell dissent.

Despite the pressures, Stoddart’s resolve remains unshaken. The veteran councillor is calling for greater transparency and accountability, suggesting that recordings of key seminars be made public to allow constituents a clearer understanding of the deliberations leading up to the budget decision.

His stance reflects a broader concern for democratic integrity within the council.

You can read ‘OLD GRUMPY’ by clicking HERE.

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Health

Senior doctors in Wales vote to strike over pay

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  • A 48 hour strike will take place from Tuesday 16 April

CONSULTANTS and SAS (specialist, associate specialist, and speciality) doctors have voted to strike as part of a dispute with the Welsh Government over their pay, which has been cut by almost a third in real terms since 2008/9.

The results of the ballots, which ended at midday today (Monday 4 March), for doctors working in both branches of practice in Wales saw 86% of consultant voters and 94% SAS doctor voters cast their ballots in favour of industrial action.

A significant 70% of consultants and 58% SAS doctors eligible to vote in Wales had responded to a call to take part in industrial action which will take place from Tuesday 16 April.

Consultant and SAS doctors make up over half (54%) of the hospital-based medical workforce combined, with 3,137 Consultants and 1,088 SAS doctors working in hospitals across Wales. *

The BMA is now calling on all consultants and SAS doctors in Wales to participate in a 48 hour strike, except for those providing ‘Christmas day’ cover.

This level of cover will ensure doctors can provide emergency care, but all elective or non-emergency work will be postponed during this period.

BMA Cymru Wales is working with NHS employers on precise staffing levels that are appropriate and will provide guidance to members in advance of any strike days.   

Dr Stephen Kelly, chair of the BMA’s consultants committee in Wales, said: 

“This has been an incredibly difficult decision. No doctor wants to strike, but the conditions now faced in the workplace caused by the extreme pressures on the service and unsafe staffing levels have left doctors with no choice.   

“Fewer doctors now want to develop their careers in Wales with some health boards reporting vacancy rates of over third for senior doctor posts.  

“Colleagues are now choosing to retire early, reduce their hours or move out of Wales where pay is competitive, and wards better staffed. 

“Unless doctors are better valued for the work they do, more and more doctors will leave an NHS already under severe pressure in Wales”. 

Dr Julie Jones, Deputy chair of the BMA’s SAS doctors committee in Wales added: “Doctors are burning out from covering significant gaps in the workforce and patient safety is at risk. With this result our members have chosen to take a stand for the profession and for patients.

“People are waiting for treatment for longer than ever before, resulting in poorer outcomes and more time in the hospital and we all deserve better.

“This result represents a profession that is not ready to give up on the NHS and its patients in Wales”.

The decision to ballot members was taken after the BMA rejected the Welsh Government’s first and final pay offer for the 2023/24 financial year for those working in secondary care.

For consultants and SAS doctors on closed contracts the offer was 5%; SAS doctors on more recent contracts received as little as 2.5%. This final offer left BMA Cymru Wales with no choice but to enter a trade dispute and ballot for strike action.  

Over the last 15 years, consultants and SAS doctors in Wales have experienced a pay cut of almost a third since 2008/9. They received another sub-inflationary pay offer from the Welsh Government for 2023/24 which is below the recommendation made by the DDRB and is the worst offer in the UK. 

The BMA is calling on the Welsh Government to provide sufficient funding to enable discussions around an uplift in senior doctor pay that will retain existing doctors and ensure that we are able to recruit more.

Consultant and SAS doctor strike action will take place from 7am, Tuesday 16 April to 7am, Thursday 18 April.

Junior doctors in Wales will begin their third round of strike action a 96-hour full walkout from 7am Monday 25 March in pursuit of a fairer deal for their service**

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