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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.”

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Community

Cost of living support available at Carmarthenshire’s customer service Hwbs

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FROM Thursday, December 1, Carmarthenshire County Council’s customer service Hwbs in Carmarthen, Ammanford and Llanelli will offer an enhanced range of support, advice and services to residents. 

This additional service has been introduced from an action taken at a recent cost of living collaboration event that was hosted by Carmarthenshire County Council that saw stakeholders gather to discuss ways of helping the people of Carmarthenshire with the increasing cost of living. 

The Council’s team of Hwb advisers will be available every day, along with housing officers and employability advisers, to provide tailored packages of support to residents, with advice and guidance on what our residents are entitled to claim, based on their individual circumstances. Visitors to the Hwbs can also access information on the services available to support them as the cost of living increases.

The aim is to also work closely with specific third sector organisations such as Citizen’s Advice Bureau and Careers Wales to support this work and by also being present in the Hwbs to provide even further advice to residents.

Targeted support will also be available at every Hwb, with each day dedicated to a service area that matters most to residents. Officers from various Council service areas, will be on hand to answer questions and offer support and advice to residents in need.

The services available at Hwbs on particular days are:

Monday – Recycling and waste advice

Tuesday – Trading Standards

Wednesday – Employability

Thursday – Housing

Friday – Various services

The information and advice offered on a Friday will differ from week to week and will be dictated by the needs of residents and other factors.

Cllr Linda Evans, Deputy Leader and Cabinet lead said: “Since April, our Hwb Advisers have helped over 800 Carmarthenshire residents by providing advice and support on accessing a range of council and third-party support schemes, including blue badges for disabled parking, council tax discounts, school meals and uniform grants, referrals to employability schemes and much more.

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Money

Claim what’s yours during the cost-of-living crisis

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We want to make sure all Carmarthenshire residents are aware of the financial help and household support available to them.

We know how difficult it is when you need support, but don’t know where to turn – we want you to know that we are here for you.

Carmarthenshire County Council has a dedicated team of advisers who are here to listen and help you apply for the support, services and money that you may be entitled to.

There are 2 ways of accessing this support.

Online – by visiting the council’s Claim What’s Yours Page where you can or access information on a wide range of support schemes or arrange to speak with an adviser.

Visit one of our HWB Centres – located at Carmarthen, Llanelli and Ammanford and speak with one of our friendly HWB Advisers.

Since April of this year, the HWB Advisers have had over 400 applications for advice and support from Carmarthenshire residents and have helped with applications for a range of council and third-party support schemes, including Blue Badges for disabled parking, Council Tax discounts, Personal Independence Payments and grants to help parents purchase school essentials, such as school uniforms.

In addition to providing support through its HWB Centres and Claim What’s Your Page, Carmarthenshire County Council will be meeting with local partners and stakeholders to discuss and share information, along with best practice, so we can work towards providing a truly multi-agency support package for vulnerable households in Carmarthenshire.

Deputy Leader and Cabinet lead Cllr. Linda Evans said “Now, more than ever, it is important that people know what support and benefits are available to them as the increasing cost-of-living affects us all.

“Paying for food, energy, fuel and the mortgage, to name only a few rising costs, is at the forefront of all of our minds, so it is extremely important that people can access whatever assistance there is available to them.

“The process of applying for different support can be overwhelming and that is why we have set up HWB teams, at Llanelli, Ammanford and Carmarthen for people to call in and speak with an adviser. Our HWB advisers can guide you through the various processes of applying for support and benefits and they might be able to suggest other branches of support that you might not be aware of. This service is free of charge.

“The council has recently started to distribute the Welsh Government’s Winter Support Scheme and, later this month, we will be hosting a cost-of-living event to bring together a range of partner agencies to better understand what else can be done at a local level to support those being hit hardest by the cost-of-living crisis.”

To access help from a HWB adviser or for more information about how to access support, benefits and services, visit the Claim What’s Yours page on Carmarthenshire County Council’s website.

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Community

Households in Carmarthenshire start to receive £150 cost of living payment

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MORE than 31,000 homes in Carmarthenshire have started to receive a £150 cost of living payment to help tackle the cost of living crisis.

The council is making a single payment directly into the bank accounts of all eligible households that pay their council tax by direct debit. These payments have been able to be made because the council already holds this information.

For all other eligible households where the council does not hold bank details (approximately 40,000), letters have started to go out with information on how to apply for the payment by completing a short online registration form. 

Please do not attempt to register your details until you receive your letter as you will need an access key code.

Householders that do not have online access are being advised to attend one of their Hwbs in Llanelli, Ammanford or Carmarthen where one of their customer service team will be able to provide support. 

Please take along the letter containing your access code as well as proof of residency, such as a driving licence, utility bill or bank statement (no older than 3 months).

The council aims to make payment within 20 working days from application, as long as there are no queries with the information provided.

The cost of living payments are being provided to all households in properties in council tax bands A to D, and all households which receive support from the Council Tax Reduction Scheme regardless of their council tax band.

The payments are being delivered by local authorities across Wales on behalf of the Welsh Government to support households as we recover from the pandemic and to help deal with the impact of increasing energy and other costs.

Please be assured the council is working as quickly as possible to process these payments and if there are any queries householders will be contacted directly.

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