IN THE RUN UP to George Osborne’s budget announcement on Wednesday (Mar 16) Plaid Cymru urged the Chancellor to abandon his fiscal mandate, branding it ‘irresponsible and ideological’.
Plaid Cymru has attacked the Chancellor for putting politics and ideology before the UK’s economy by placing a damaging and unnecessary duty on government to achieve a budget surplus by 2019/20.
Local Member of Parliament and Plaid Cymru’s Treasury spokesperson, Jonathan Edwards MP, highlighted that the UK has only had a budget surplus eight times in the last 60 years and has not had more than three years of consecutive budget surpluses since 1952, but will now be required to do so every year from 2019/20 onwards thanks to the Tory fiscal mandate, which was supported by Labour.
The Institute of Fiscal Studies (IFS) has also criticised the fiscal mandate, suggesting it could lead politicians to inappropriately favour policies that temporarily flatter headline measures of the public finances.
It warned that small forecasting changes could require sudden in-year tax rises or spending cuts to ensure the mandate is met, and suggested that previous experience shows that there will be a one-infour chance of this being necessary.
Plaid Cymru’s Treasury Spokesperson, Jonathan Edwards MP said: “The Chancellor is putting politics before economics by placing the UK under a time-limit based on nothing more than the political calendar. The Tory fiscal mandate, which, incomprehensibly, was supported by Labour, boxes the Chancellor in and takes away vital fiscal levers which are desperately needed in our economy.
“The Government and the central bank are out of monetary ammunition. Despite interest rates remaining at an all-time low, the Chancellor has utterly failed to get to grips with the budget deficit. He needs to turn to fiscal policy – to investment in our economy – but his irresponsible and ideological fiscal mandate prevents him from doing so.
“Plaid Cymru is backed by the OECD, the IMF and the CBI in calling for the Chancellor to invest in infrastructure. A modest increase in infrastructure investment of 1% of GDP would be a £20 billion boost to the economy, with £1 billion coming to Wales.
“The Chancellor is starving our economy of vital investment and he should listen to the IFS and announce on Wednesday that he will abandon this irresponsible and damaging block on economic growth.”
Wales stands firm in support for Ukraine￼
IN THE latest update on the Ukraine crisis, Wales’s Minister for Social Justice Jane Hutt thanked all those households across Wales who have come forward to offer their homes to Ukrainians fleeing the War and encouraged more households to provide this vital support.
APPEAL FOR MORE HOST FAMILIES
The Minister for Social Justice said: “I’m delighted to say that over 5,650 people from Ukraine, sponsored by the Welsh Government and Welsh households, have already arrived in the UK.
“More than 8,200 visas have now been issued to people from Ukraine who have sponsors in Wales, so we expect the number of arrivals to continue to grow in the coming weeks.
“Thousands of Welsh households sponsored Ukrainians to arrive in Wales and committed to hosting them for at least six months.
“As we move into the autumn, we approach the end of that initial period.
“We hope hosts and Ukrainians will agree to extend many of those placements, but we need additional hosts to support those who cannot continue living where they are.
“To ensure a warm welcome to Wales, I’m inviting households across Wales to come forward and open their homes to welcome those seeking sanctuary.
“We’re immensely thankful to all those across Wales acting as hosts to Ukrainians, but more households must come forward.
“I completely understand that there are those who want to help but may not have the resources to do so, given the circumstances we’re all facing with the cost-of-living crisis.”
WALES WILL STEP UP TO THE PLATE
Jane Hutt continued: “What we all know, and has been proven countless times, is that the people of Wales are one of the most generous across the globe, and I’m sure we will step up to the plate once again.
“The idea of hosting can be daunting. That’s why we have funded Housing Justice Cymru to provide a Host Support service which includes expert and reliable information, training, advice, and guidance for people hosting, or those considering hosting, Ukrainians in Wales.
“More information on sessions and training can be found on the Housing Justice Cymru website. We also publish regularly updated guidance for hosts and sponsors at gov. wales/ukraine.
“We still need many more households to consider whether they could provide a home for those in need. This would normally be a commitment to hosting for 6 to 12 months.
“If anyone is considering this, we encourage them to register their interest at gov.wales/offerhome, and to attend one of the ‘Introduction to Hosting’ sessions, facilitated by Housing Justice Cymru. You won’t need to continue the process if you decide it is not for you.
“We have also partnered with Airbnb.org to ensure very short-term emergency placements can be provided to prevent homelessness.
“If you cannot host for more than 6 months but you could offer your property for up to 30 days at a time, you may also be able to contribute. Visit gov.wales/offerhome and follow the link to the Airbnb.org platform.”
Finally, the Minister stated: “We will continue to communicate with those who host Ukrainians, with updated guidance and information to support the valuable role you are undertaking.
“To all those that are already hosting and to those that are considering hosting, thank you, we owe you all a huge debt of gratitude.”
WESTMINSTER MUST BACK HOSTS
DURING COST-OF-LIVING CRISIS
Conservative MS Mark Isherwood raised how the cost-of-living crisis affects Ukrainian refugees.
Where families had taken in those fleeing Russian aggression, he noted a risk of sponsorships not continuing beyond six months because the hosts cannot afford the rise in fuel costs.
He asked the Minister what discussions she’d had with the UK Government about increasing the £350 contribution to households who’d taken in Ukrainian refugees.
The Minister agreed with Mark Isherwood that ending a specific ministerial post dealing with refugees was regrettable.
She noted a lack of information from the UK Government over the summer months and since Liz Truss replaced Boris Johnson as head of the Conservative Government.
Ms Hutt said: “We asked for an increase at least to £500, or up again, doubling to £700 per month. An urgent decision is needed regarding this as they reach the end of their six-month period.
“That period is underway, so we’re writing to all hosts to see if they will continue.”
UK GOVERNMENT URGED
TO PICK UP THE PHONE
The Minister thanked Mark Isherwood for introducing her to a charity offering support in North Wales, Link, and hoped that he and his colleagues would bring pressure to bear on their Westminster colleagues to ensure those in need from Ukraine and those in Wales helping them received support.
She added: “I look forward perhaps that we might have some telephone calls from the Prime Minister and other Ministers to us in Government. We must engage with them and follow this through.
“There is a huge job of work to be done here. We’re taking responsibility in the way I’ve outlined, funding our welcome centres and paying thank-you payments to hosts if they support a family who initially arrived in Wales under the Ukraine family scheme.
“That’s not happening in England. The commitment that we’re making is considerable.
“I hope everyone will join us today, saying that we need to press for those answers in terms of financial support.”
THE THREAT OF HOMELESSNESS
Sioned Williams of Plaid Cymru raised the spectre of Ukrainian refugees becoming homeless in Wales due to a lack of financial support and the end of existing hosting and housing placements.
The Minister praised the work of local authorities across Wales supporting refugees.
She said: “There are very imaginative programmes. That includes a whole range of issues like repurposing empty buildings.
“Local authorities are really coming up with a whole range of ways in which we can support people, perhaps, from a welcome centre, or a host family, into that intermediate accommodation, and then on to other longer-term accommodation.”
Pembrokeshire currently houses around 200 Ukrainian refugees, with the demand for assistance outstripping the availability of suitable accommodation.
NOT ONE PENNY FROM WESTMINSTER
TO SUPPORT FAMILIES FLEEING WAR
Responding to a question from Mabon ap Gwynfor about problems housing family groups, Jane Hutt hit out at the lack of support from the UK Government and how it’s u-turned on a commitment to help families.
“The UK Government has never given a penny towards the family scheme.
“The former Prime Minister, Boris Johnson, in one of his last PMQs, actually said that he thought the Ukraine family scheme should get the same funding and support as the Homes for Ukraine scheme. It’s never happened.
“We have provided thank-you payments to people who are hosting Ukrainian families. It’s all Welsh Government money; it’s not UK Government, because they don’t provide a penny. And also, the British Red Cross—£246,000—who are actually supporting Ukrainian families who are hosting family members under the Ukrainian family scheme.”
On Wednesday, September 28, Eluned Morgan, Wales’s Health Minister, announced the continuation of free healthcare in Wales to Ukrainian residents displaced by the ongoing conflict.
The exemption will continue to apply unless there’s a significant change in circumstances in Ukraine.
Kwarteng gambles on rush for growth
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.
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.”
Liz Truss confirmed as the new Prime Minister
LIZ TRUSS was confirmed as the new leader of the Conservative Party on Monday, September 5.
The widely-tipped victory saw Ms Truss capture 80,000 out of 140,000 votes from Conservative members.
Her margin of victory, 57% to 43%, is comfortable but nowhere near the levels suggested earlier in the campaign.
In her first speech, she claimed she would fulfil the pledges made in the Party’s 2019 election manifesto and praised her predecessor, the disgraced Boris Johnson, for getting Brexit done.
“Leave cannot name one country we would get a better trade deal with if we left the EU.”
At least Liz Truss’s six-year-old prediction about the benefits of Brexit came true.
It also highlights her remarkable capacity to rewrite her past and her fellow Conservatives’ collective amnesia about her.
Liz Truss comes from a comfortable middle-class background.
Her father is an emeritus professor of pure mathematics at the University of Leeds, while her mother was a nurse, teacher, and member of the Campaign for Nuclear Disarmament.
Liz Truss describes her parents as “to the left of Labour.”
She attended the highly-rated Roundhay School in one of Leeds’s more pleasant suburbs. She went to Oxford University to study Politics, Philosophy, and Economics.
She graduated in 1996.
During her time at University, she became President of its Liberal Democrat Society and, in 1994, spoke in favour of the monarchy’s abolition at the Party’s national conference and supported the legalisation of cannabis.
After graduating in 1996, she joined the Conservative Party and promoted the value of mathematics teaching to all students in full-time education.
After entering Parliament in 2010, in 2012, she became a junior minister in David Cameron’s government.
After making an impact in her role in the Department of Education, she got a big promotion to the position of Environment Secretary. In that role, she accepted climate change was happening and promoted the end of pesticides that harmed bee populations.
She reversed her positions within a year, backing the lifting of a ban on such pesticides and ending subsidies supporting the extension of solar energy.
During the Referendum campaign of 2016, she was an ardent Remainer, saying: “I am backing remain as I believe it is in Britain’s economic interest and means we can focus on vital economic and social reform at home.”
She also said: “After the 2016 Referendum, she underwent a dramatic conversion to become an ardent Brexiteer – again blown by the prevailing wind in a direction that would further her career ambitions.”
As a disastrous Justice Secretary, she undermined the independence of the judiciary and oversaw a large increase in violence in prisons.
As a reward, she was shunted to the position of Chief Secretary to the Treasury. After backing Boris Johnson in 2019, she became International Trade Secretary. During that time, she signed trade agreements with the UK’s trading partners on strikingly worse terms than the UK had during its EU membership. She also became the UK’s chief negotiator with the EU and rapidly ran those negotiations into the sand.
From radical Liberal Democrat to right-wing Conservative; from ardent Remainer to enthusiastic Brexiteer; the only constants in Liz Truss’s political views have been her views on individual liberty and the pursuit of career advancement.
A strong supporter of David Cameron; a stalwart of Theresa May’s cabinet; a fervent early adopter of the Boris Johnson cult; Liz Truss will be the UK’s fourth Prime Minister in six years and the third in a row who has risen to the post without facing a General Election.
Her inbox would be extraordinarily challenging, even for someone widely regarded as almost as intellectually negligible and facile as her predecessor.
Liz Truss doesn’t have time to build a brand or establish her authority.
She must hit the ground running with fresh ideas to tackle the UK’s massive economic challenges, the fallout from a shambolic Brexit deal agreed by her predecessor, the cost-of-living crisis, the energy crisis, spiralling inflation, the possibility of a recession, Russia’s war in Ukraine, and delivering all the promises on tax cuts she made during the leadership campaign.
Most importantly, she must signal a clear break with the sleaze, patronage, and low standards of public life that forced Boris Johnson and compelled almost his entire ministerial team to quit when the stench of scandal became too much for them.
Against that background, survival to 2024 and beyond will be a massive achievement.
POLITICAL VOICES FROM WALES ON NEW PM
Welsh Conservative leader Andrew RT Davies MS said: “I am delighted that Liz has been elected party leader and will be our next Prime Minister, especially having backed her during the contest.
“Throughout her political career and this contest, we have seen someone with the tenacity, ideas, and stoicism required to lead the Conservatives into the next election and the country through a difficult period.
“There is a lot of work to be getting on with, especially in tackling the cost-of-living crisis, and I look forward to seeing Liz’s ideas put into action to alleviate the struggle millions are facing.
“It is now time to unite behind our new leader, and further build on our record of delivering for Wales and the wider United Kingdom.”
Predictably, Labour in Wales are not happy.
Labour’s Shadow Secretary of State for Wales Jo Stevens told this newspaper: “Liz Truss has her fingerprints all over the crime scene of the past 12 years of Tory failure. She reliably parroted Boris Johnson’s lies and voted for the 15 tax rises the Tories have imposed in the last two years. At every turn, she’s shown people she can’t be trusted.
“Households right across Wales needed action from the Tory Government to tackle their cost of living catastrophe months ago. Nearly nine weeks on from the start of her leadership campaign, Truss still has no plan and no ideas to address the crisis people and businesses are dealing with.”
Carmarthen West and South Pembrokeshire MS Samuel Kurtz has congratulated the country’s next Prime Minister
Commenting on the news, Samuel Kurtz MS told The Herald: “Congratulations to Liz Truss for securing this victory. Whilst I supported Rishi Sunak, the Conservative Party has always had a wealth of talented individuals, and Liz is certainly one.
“The Party must now come together behind our new PM.
“We have some real challenges ahead of us – both abroad and at home – which the incoming Prime Minister must get to grips with. I have faith that Liz Truss has the ability to support the public as we navigate the oncoming winter.
“As we move forward, my priority is ensuring that the communities I represent get the assistance and support they need as we enter these challenging months ahead.
“I’ll be working with my colleagues in Westminster to ensure that support reaches every household in West Wales.”
Welsh Liberal Democrat Leader Jane Dodds MS said: “Under Liz Truss we are set to see more of the chaos that we saw under Boris Johnson. From failing to deal with the cost-of-living emergency, to letting small and medium businesses face the winter alone, to failing to deal with the climate crisis, the Conservatives have shown they don’t care, have no plan and have failed our country.
“The Conservatives may have changed leader, but after twelve years in power at Westminster the Conservatives have shown they are out of ideas, out of energy and out of touch.
“First the government needs to urgently scrap October’s energy price rise to avoid a social catastrophe for families and pensioners this winter. Then we need a general election, to get the Conservatives out of power and deliver the real change Wales needs.”
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