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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.”

News

Five people have been charged with conspiracy to supply cannabis and cocaine

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FIVE people have appeared in court charged with conspiracy to supply cannabis and cocaine in Carmarthenshire.

On Wednesday, October 27, 2021 officers from Dyfed-Powys Police executed a warrant at a farm in Capel Dewi, Carmarthenshire, where they found firearms and large quantities of cannabis, cocaine and cash.

Stephen Paul Leyson, aged 54, of Capel Dewi, Carmarthen, was this week charged with possession of a firearm and conspiracy to supply class A and B drugs, while Lynne Ann Leyson, aged 51, and Samson Paul Leyson, aged 22, both of Capel Dewi, were charged with conspiracy to supply class A and B drugs.

Andrew Leslie Jenkins, aged 50, of North Hill Road, Mount Pleasant, Swansea, was charged with conspiracy to supply class B drugs and Ritchie John Coleman, aged 32, of Vetch Close, Pembroke, was charged with supplying class B drugs and cannabis production.

All five appeared before Llanelli Magistrates Court yesterday, with Stephen Leyson, Jenkins and Coleman remanded into custody.

Lynne and Samson Leyson were granted bail with conditions.

They are next due to appear at Swansea Crown Court on Thursday, January 5, 2023.

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Business

Town council to help elderly with online banking as last bank in Tenby set to close

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LOCALS in Tenby have been left reeling at this week’s news that the town’s HSBC branch is set to close next year.

The closure, announced on Thursday (Nov 30) will leave Tenby without any of the UK banks.

In recent years, Lloyds, NatWest and Santander have all left the town. Barclays has also just shut its doors for the last time, with the nearest branches being in Haverfordwest or Carmarthen.

The move comes as part of the latest round of closure, which will see 114 branches of the bank closed across the UK.

It follows 69 HSBC branches closing earlier this year and 82 HSBC branches closing last year.

Other HSBC branches closing in Wales include Abergavenny, Chepstow, Port Talbot, Pontypool, Brecon and a branch in Cardiff – Rhyd y Penau.

HSBC says its customer numbers have fallen rapidly since the pandemic and that some of the branches that are being shut now serve less than 250 customers a week.

Jackie Uhi, HSBC UK’s managing director of UK distribution, said: “People are changing the way they bank and footfall in many branches is at an all-time low, with no signs of it returning.

“Banking remotely is becoming the norm for the vast majority of us.

“Not only can we do it anywhere at any time of day or night, many more things can be done at the customers’ convenience and don’t rely on a branch visit.

Speaking to The Herald by telephone on Wednesday evening (Nov 30), Mayor of Tenby, Cllr. Sam Skyrme Blackhall said: “This is really bad for the town of Tenby, and it’s just very, very said. This is a case of where are banks going?

“We have always looked after our banks here in Tenby, and it feels like no one is looking after us. Its as if no one in the banks cares anymore.”

Pointing out the number of retired people living in the area, she said: “We have a lot of elderly people in town who do not use online banking, and depend on the branch being open.

“I am talking to the Post Office and other people with the aim of looking to the hub system, which is happening in other towns where they are also loosing their banks.

“Its very sad that we will losing another cash point. How is a busy town expected to function without a bank or cash points. Where do people go for money?

Asked if she thought it was possible that the branch would be saved, as Tenby HSBC was one of the few banks without a confirmed closure date, Cllr. Sam Skyrme Blackhall seemed to think that the decision had been firmly made. She said: “They have to give six months notice, so we could be looking at May or June 2023 for the closure.

“I don’t think the branch could be saved.

“Barclays officially finished the other week.

“Banks don’t care about residents and people don’t matter [to them] during these very worrying times.”

Town council is planning to offer struggling Tenby residents help with online banking from their offices, creating a kind of drop-in-service, The Herald has been told.

Like in any time of difficulty the people of Tenby will rally together as they always do, but no matter what is done in the face of the closure of the last bank in the historic town, nothing will fully replace traditional face-to-face banking services.

Tenby Mayor Cllr. Sam Skyrme Blackhall: These are sad times for Tenby
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Community

Park Authority sponsorship boost for Boxing Day Swim’s belated half century

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PEMBROKSEHIRE Coast National Park Authority says that it is delighted to be one of the main sponsors of this year’s Tenby Boxing Day Swim.

The popular event will mark its belated 50th anniversary this year, after Covid-19 enforced cancellations of the event in 2020 and 2021.

Chair of Pembrokeshire Coast National Park, Di Clements said: “The Authority is delighted to be helping this well-supported community event celebrate its half-century landmark, especially as the National Park celebrates its own notable 70-year milestone this year.

“We hope this support will help raise much needed funds for a range of local causes, recognise the efforts of the brave participants and link to the Authority’s wider winter of well-being support programme, helping communities across the Park to stay well this winter.”

Chairman of the Tenby Sea Swimming Association, Chris Osborne added: “The swim’s stunning location on Tenby’s North Beach calls for continuing collaboration between community events organisers, like Tenby Sea Swimming Association, and environmental custodians such as the Park Authority.

“These joint anniversaries, and this generous sponsorship for which we are very grateful, are a choice way of celebrating this partnership.”

The 2022 Tenby Boxing Day Swim is raising money for the Tenby Memory Café, the Dai Rees Foundation, Tenby RNLI and the Paul Sartori Foundation.

Swimmers are asked to register online and make a small donation to help cover the cost of organising the event, which will ensure more of the sponsorship money raised goes to the chosen good causes.

For further information, visit www.tenbyboxingdayswim.co.uk, or follow Tenby Boxing Day Swim on Facebook, Instagram or Twitter.

Ends

Caption: National Park Authority Chair, Cllr Di Clements with Tenby Sea Swimming Association Chairman, Chris Osborne.

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