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Finance Ministers from devolved UK nations call for Covid funding flexibility

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Finance Ministers in Wales, Northern Ireland and Scotland have jointly called on the Treasury to guarantee that money allocated to support Covid responses will be provided in full, following a meeting with the Chief Secretary to the Treasury today.

They are also calling for action to tackle the cost of living crisis and help households with rising bills.

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Last month, as a result of spending in England, the Treasury announced it would provide additional funding to tackle Covid, with the Scottish Government allocated £440m, the Welsh Government £270m, and the Northern Ireland Executive £150m. Devolved Governments are concerned they may not be granted permission to carry over into next year’s budgets any late consequential payments – despite this flexibility being provided in 2021/22.

The Finance Ministers re-iterated a request for the Treasury to provide support to Scotland, Wales and Northern Ireland if the public health situation in each nation demands it, not just when the assistance is applied in England.

They are also urging the Treasury to do more to support households facing a cost-of-living crisis. In October, the UK Government withdrew the £20-a-week uplift to Universal Credit, a cut that was opposed by all three devolved nations. Last month it was confirmed that inflation had risen to 5.1% – the highest rate in a decade – with increasingly expensive food, transport and clothing contributing to higher household bills. Powers to help households meet the cost of living lie mainly with the UK Government, and the three Finance Ministers in the devolved nations are calling on the Treasury to step up and deliver more support to households.

Rebecca Evans, Welsh Government Finance Minister, said: “We need to see urgent action from the Treasury to help people with rising bills and living costs. Domestic energy prices are of particular concern at the moment with more and more people living in fuel poverty. This winter the Welsh Government invested £51m in our Household Support Fund to help households, but most of the powers and the fiscal resources needed to address the cost-of-living crisis are in the UK Government’s hands. The Treasury must step up. Additional support through targeted UK-wide schemes such as the Warm Home Discount and other winter fuel payments would lessen the burden on hard pressed households.

“Arrangements for Covid funding also need to change. Last month, as the omicron variant took hold, the Treasury hesitated before providing Wales with funding to meet the challenges. When funding did come, we received no guarantee that it would not need to be returned. The Treasury must recognise the importance of fully supporting devolved nations to help protect our businesses and protect our populations.”

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Scottish Government Finance and Economy Secretary Kate Forbes said: “I welcome today’s discussion and the constructive approach taken by all parties.

“However, along with the other devolved administrations, the Scottish Government remains concerned that the additional funding we have received to mitigate the impact of the Omicron variant may be subject to future deductions. Without the ability to borrow, the continuing uncertainty could have a substantial damaging impact on our COVID response and impact our ability to support public services in Scotland.

“More fundamentally, the situation highlights once again that it is not tenable for funding only to be triggered by public health decisions in England. A system is required that supports the decisions of each devolved administration and is not beholden to the decisions of one part of the UK.

“The Scottish Government has set out a range of ambitious actions – within our limited resources, to support households and reduce inequalities, including our commitment to double the game-changing Scottish Child Payment to £20 per child per week. But we are facing a cost of living crisis and the UK Government, which reduced the lifeline Universal Credit uplift in October despite our representations, must now urgently intervene.”

Conor Murphy, Minister of Finance, Northern Ireland Executive said: “As we continue to deal with the challenges posed by Omicron the uncertainty surrounding the Covid funding provided by Treasury is unhelpful. It is also hugely concerning that Treasury may not permit funding to be carried into next year even if additional funding is confirmed at such a late stage that it prevents it being used most effectively. We have been calling on Treasury to reinstate the Self Employed Income Support Scheme and furlough scheme on a targeted basis where necessary. It is disappointing that Treasury is unwilling to provide support to workers and their families. We would ask Treasury to urgently reconsider this position.

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“The cost of living crisis is causing hardship for families and businesses. I’ve been calling on Treasury to suspend VAT on energy bills temporarily to provide reprieve during the difficult winter period. It is time for Treasury to act now.”

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Transport

£48m ‘gap funding’ support package for Welsh bus industry

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The bus industry in Wales is set to receive a support package worth £48m to help them recover from the impact of the pandemic and deal with emerging financial challenges, the Welsh Government has announced today.

The Bus Emergency package will provide ‘gap funding’ until the end of this financial year for bus operators to maintain the necessary bus services and routes in their area, in return for greater public control over Welsh bus services.

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This funding is one of a number of short-term measures that have been taken by the Welsh Government to support bus operators at a time when they needed it the most. With the longer-term future of the bus industry in mind a review of the existing Bus Services Support Grant (BSSG) scheme will also be taken to consider how it can be used to move the industry away from a reliance on emergency funding schemes and bridge the gap to franchising.

Announcing the latest emergency funding package, Deputy Minister for Climate Change, with a responsibility for transport, Lee Waters said: “The bus industry is emerging from some of its toughest times, and we need to continue to provide support to help the industry recover and secure a healthy future.

“During the pandemic passenger numbers fell by around 90% and have still only returned to between 50% and 70% of pre-Covid levels, leaving operators struggling with reduced revenue and contending with the latest challenges of rising fuel and operating costs.

“The funding I’ve announced today will provide a short-term solution to help the industry to begin to recover from the challenges it has and continues to face whilst we develop a longer-term solution to tackle the gradual decline in passengers over the years.

“In March I set out our plans to bring forward legislation to change the way bus services are delivered across Wales. Throughout this process we will be working closely with local government, the bus industry and passengers, to design a system that is ‘easy to use, easy to access and well connected’ providing people a ‘real sustainable transport alternative’ to the private car.

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“We will provide an update on how these plans are progressing later this year.”

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Money

Over 500 teenagers in Wales to get £1600 a month in basic income trial

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The Welsh Government has launched its basic income trial scheme that sees it giving more than 500 people leaving care in Wales £1600 each month for two years – with no strings attached.

Equating to £19,200 a year before tax, it’s believed the cash offered is the highest amount provided on a basic income pilot anywhere in the world.

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The £20m scheme is controversial, and previous universal basic income trials in Kenya, Finland and California failed.

Welsh Social Justice Minister Jane Hutt says this particular scheme is a direct investment in the lives and futures of some of Wales’ most vulnerable young people.

The minister added that those taking part in the pilot will also receive individual advice and support to help them manage their finances and develop their financial and budgeting skills.

Local authorities will play a key role in supporting them throughout the pilot. Voices from Care Cymru will also work with the young people to give them advice on wellbeing, education, employment and help them plan their future after the pilot.

First Minister Mark Drakeford said: “We want all our young people to have the best possible chance in life and fulfil their full potential. The state is the guardian of people leaving care and so has a real obligation to support them as they start their adult life.

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“Our focus will be on opening up their world to all its possibilities and create an independence from services as their lives develop.

“Many of those involved in this pilot don’t have the support lots of people – myself included – have been lucky enough to enjoy as we started out on our path to adulthood.

“Our radical initiative will not only improve the lives of those taking part in the pilot, but will reap rewards for the rest of Welsh society. If we succeed in what we are attempting today this will be just the first step in what could be a journey that benefits generations to come.”

The Welsh Conservatives however have criticised the scheme as “giving out free money” and say it won’t help tackle the problems some vulnerable young people face.

Joel James, the Welsh Conservative shadow minister for social partnership said: “Whilst I wholeheartedly support helping the poorest and most vulnerable in our country, the Labour Government is not even close to living in reality with this trial.

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“Countless trials from across the globe have found basic income does not have the expected outcomes as it fails to incentivise work and proves time after time to be a waste of public money.

“If rolled-out across the board with every adult in Wales receiving £1,600 a month it would cost nearly £50 billion a year, and at the same time reward the wealthiest in society rather than helping those who need it most.

“Our NHS is at breaking point and our economy is in a fragile state, but instead of tackling those issues head-on, Labour are more interested in Basic Income – which will cost the country an absolute fortune.”

Welsh Government Minister for Social Justice Jane Hutt said: “We’re in the midst of a cost-of-living crisis like no other and we therefore need new ways of supporting people who are most in need.

“Our Basic Income pilot is an incredibly exciting project giving financial stability to a generation of young people. Too many people leaving care face huge barriers to achieving their hopes and ambitions; such as problems with getting a safe and stable home, to securing a job and building a fulfilling career. This scheme will help people live a life free of such barriers and limitations.

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“We will carefully evaluate the lessons learnt from the pilot. Listening to everyone who takes part will be crucial in determining the success of this globally ambitious project. We will examine whether Basic Income is an efficient way to support society’s most vulnerable and not only benefit the individual, but wider society too.”

Tiff Evans of Voices from Care Cymru, speaking on behalf of young people who have experienced care, said: “This is a brilliant opportunity for care leavers in Wales. It is good to see that care leavers in Wales are being thought of and Welsh Government are providing this opportunity for them as young people to become responsible, control some parts of their lives and have a chance to thrive and be financially independent.

“We thank Welsh Government for investing in them and their future and we look forward to other changes and developments for care experienced young people in Wales in order for them to reach life aspirations.”

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Food & Drink

Proposal to ban tea and coffee for under 16s in Wales branded ‘illiberal’

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photo of person s hand pouring liquid to cup

Proposals to consider banning the sale of tea and coffee to under-16s in Wales have been labelled ‘outrageously illiberal’ by the Welsh Liberal Democrats.

The Welsh Labour Government reportedly confirmed that it is considering the move as part of plans to make young people healthier and stop rising obesity rates.

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The move comes as the Welsh Government raise concerns of the rising consumption of high-caffeine energy drinks among young people is also causing concern about the effects on their education.

Commenting Welsh Liberal Democrat Leader Jane Dodds said: “It is beggars’ belief that this is even under consideration.

“We are all aware obesity is a serious problem in Wales and it is important that we take action to reduce the levels across Wales.

“However, it doesn’t take an expert consultation to realise that tea and coffee are not responsible for high obesity levels.

“It would be outrageously illiberal to ban the sale of coffee and tea to under 16-year-olds, something which they regularly drink themselves at home.”

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(Lead image: Elina Fairytale / Pexels.com)

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