News

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

Published

4 years ago

October 17, 2022

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

Parties make final push as Wales prepares to vote in historic Senedd election

Published

8 hours ago

May 6, 2026

Tom Sinclair

Campaign leaders criss-cross country in last-minute battle for crucial votes

WALES heads to the polls tomorrow (Thursday, May 7) after a frenetic final day of campaigning that saw party leaders, candidates and activists make one last push to win over undecided voters in what is being described as the most unpredictable Senedd election in modern Welsh history.

With polling stations due to open at 7:00am, parties spent Wednesday targeting key battleground constituencies across the country, including the new Ceredigion Penfro seat, amid growing expectations of a fragmented Senedd and a dramatic shake-up in Welsh politics.

The election is the first to be held under Wales’ new expanded Senedd system, with 96 Members of the Senedd being elected across 16 large constituencies using a proportional closed-list voting system.

Reform UK appeared to finish the campaign with significant momentum following a major rally on Tuesday attended by party leader Nigel Farage. The event drew large crowds and considerable online attention as Reform attempted to convert strong polling figures into seats in Cardiff Bay for the first time.

Farage used the rally to attack both Labour and Plaid Cymru, while positioning Reform as the party of “change” for disillusioned voters. Reform campaigners have focused heavily on immigration, cost of living pressures and opposition to what they describe as “wasteful government spending.”

Plaid Cymru leader Rhun ap Iorwerth spent the final day presenting his party as the main alternative to both Labour and Reform UK, insisting Plaid could “build a fairer Wales” while warning against what he described as “divisive politics.”

Labour figures, including First Minister Eluned Morgan and deputy leader Huw Irranca-Davies, urged voters not to “take risks” with public services, arguing only Welsh Labour could protect the NHS and local councils during a period of economic uncertainty.

Labour activists were heavily focused on turnout operations in traditional strongholds, amid polling suggesting the party could lose ground after decades as the dominant force in Welsh politics.

The Conservatives attempted to rally core voters with warnings about both Labour and Reform, while also focusing on farming, the rural economy and healthcare waiting lists.

In west Wales, Conservative candidates Paul Davies and Sam Kurtz spent the day meeting voters and carrying out final campaign visits across Pembrokeshire and Ceredigion, arguing their experience and local knowledge would be important under the new electoral system.

The Liberal Democrats and Green Party also maintained visible campaigns in several areas, hoping tactical voting and the proportional voting system could help them secure representation.

Across Wales, campaign teams handed out leaflets outside transport hubs, supermarkets and town centres, while social media campaigning intensified throughout the day.

Political analysts believe turnout could prove decisive, particularly because the new voting system means relatively small shifts in support could determine the allocation of the fifth and sixth seats in many constituencies.

The campaign has been dominated by debates over the NHS, farming, the economy, transport, tourism and the rising cost of living, alongside concerns about the future direction of Welsh devolution.

Polling stations open across Wales from 7:00am until 10:00pm on Thursday, with counting due to begin on Friday morning.

The Herald will provide live election coverage online throughout polling day and count day, including updates from count centres, candidate interviews and reaction as results emerge from across west Wales and the rest of the country.

News

Plaid Cymru projected to lead Senedd as Labour faces historic collapse

Published

8 hours ago

May 6, 2026

Tom Sinclair

Final poll suggests Welsh politics could be on the brink of a major realignment

PLAID CYMRU is on course to become the largest party in the Senedd, according to the final YouGov MRP projection for ITV Cymru Wales before polling day.

The model suggests Labour’s century-long dominance of Welsh elections could be coming to an end, with Plaid projected to win 43 seats in the newly expanded 96-member Senedd.

Reform UK is forecast to finish second on 34 seats, while Labour is projected to fall to just 12.

The poll, based on responses from more than 4,600 adults between April 25 and May 4, puts Plaid Cymru on 33% of the vote, ahead of Reform UK on 29%. Labour is on 12%, the Conservatives on 9%, the Greens on 8% and the Liberal Democrats on 6%.

Labour facing major losses

The projection points to a dramatic collapse in Labour support across Wales.

YouGov’s central estimate would represent a notional loss of 32 seats for Labour compared with the 2021 result under the new electoral system.

It would also be Labour’s worst result at any major Welsh election since 1906.

The model suggests Labour may fail to top the poll in any of the 16 new Senedd constituencies, and could return no members at all in four of them.

In west Wales, Labour’s support is projected to have fallen into single figures in some areas.

First Minister Eluned Morgan, who leads Labour’s list in Ceredigion Penfro, could also be at risk if the projection proves accurate.

Reform surge

Reform UK is projected to make major gains, rising from just 1% of the vote in 2021 to 29% in the final pre-election model.

The party’s support appears to be spread widely across Wales, though it is weaker in Cardiff and strongest in parts of the south Wales valleys.

One of the most striking projections is in Pontypridd Cynon Merthyr, which includes the Merthyr Tydfil area where Keir Hardie was elected as Wales’s first Labour MP in 1900.

There, YouGov’s central estimate puts Reform UK narrowly ahead on 34%, Plaid Cymru on 33%, and Labour on 14%.

Smaller parties

The Conservatives are projected to win just four seats, which would be their weakest devolved election result.

That would leave them one short of the five members needed to form an official political group in the Senedd.

The Greens are forecast to enter the Senedd for the first time, winning two seats in Cardiff.

The Liberal Democrats are projected to win one seat in Brycheiniog Tawe Nedd, keeping Jane Dodds in the Senedd.

No majority expected

No party is projected to win the 49 seats needed for an outright majority.

YouGov’s modelling suggests Plaid Cymru would be best placed to lead the next Welsh Government, but would probably need support from another party.

Plaid and Labour together reach a majority in most of the model’s simulations, while a Plaid-Green arrangement does so far less often.

A Reform-Conservative majority appears unlikely in the projection.

Under the new D’Hondt voting system, small movements in vote share could still make a significant difference, particularly for the final seats in each constituency.

Polling stations open tomorrow, Thursday, May 7.