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Minister says Welsh Gov doing ‘everything we can’ to support people in cost of living crisis

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Following regulator Ofgem’s announcement that it will be increasing the domestic energy tariff cap by 54% from 1 April, Welsh Government Social Justice Minister, Jane Hutt has said that a typical household’s dual fuel energy bill will rise to almost £2,000 a year.

The minister described this as “a very worrying time for people”.

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In a written statement, Jane Hutt MS said that “Energy bills have been fuelling the cost-of-living crisis we are all currently experiencing” and that “there are few signs of this crisis easing.”

The energy price cap, which was raised in October, has helped to shield households from some of the worst of the cost increases in the domestic electricity and gas market over the winter months, which has seen a large number of suppliers fall into administration.

But it has not been enough to protect households, particularly low-income households, from ever-increasing energy costs. National Energy Action has calculated some 22,500 more households in Wales have been pushed into fuel poverty by the October increase.

Jane Hutt MS said: “This further rise in the price cap by OFGEM in April risks pushing tens of thousands more families into fuel poverty.

“The UK Government’s immediate solution appears to be to load even more costs onto consumers’ bills. Its energy bills rebate will provide a £200 discount to electricity bills only from October, which will then be automatically recovered from people’s bills in £40 instalments over the next five years.

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“It has also announced a £150 council tax rebate for homes in bands A to D in England from April. Wales will receive a funding consequential as a result of this announcement. We are considering how to target this at those who need it most. A further announcement will be made in due course.

“We are doing everything we can to support people in Wales with the cost-of-living crisis and rising energy bills, including doubling the Winter Fuel Support Payment to £200 and making increasing investment in our Discretionary Assistance Fund to help people who need urgent and emergency support.

“It is time the UK Government acted to support households and to address the turmoil in the domestic energy markets.”

The Welsh Conservatives meanwhile are calling on the Labour-run Welsh Government to use the newly announced £175m from the UK Government to give families a council tax rebate and ease of cost of living crisis.

Following Ofgem’s confirmation today that the energy price cap will rise by £700 from April, the Chancellor, Rishi Sunak, has announced a three-part plan to help with household fuel bills immediately and protect people against half of this increase – worth £350 per household, in a total package of support worth £8.6 billion across the United Kingdom.

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The plan includes a £200 ‘smoothing’ rebate on energy bills for all households across Britain, to be paid back over the next five years at £40 per year – starting from April 2023.

It also includes a non-repayable £150 cash rebate for homes in Council Tax bands A-D – equivalent to 80 per cent of all households, helping both lower and middle-income families.

There’s also £144 million of discretionary funding for local authorities to support households not eligible for the council tax rebate.

Points two and three of the plan are devolved and will see the Labour administration in Cardiff Bay receive an extra £175m in consequential funding.

Welsh Conservative Senedd leader, Andrew RT Davies MS, said: “As the British economy continues its recovery from the pandemic, we must confront the global inflationary pressures caused by the world economy coming swiftly back to life.

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“Much of this inflation is being driven by the rising cost of energy due to increased demand worldwide – and that is feeding through into pressures on the cost of living at home.

“Soaring energy bills are a major worry for hardworking families across Wales and the UK and the Conservative Chancellor has once again stepped up to the plate to help people in a time of need.

“With Labour ministers in Cardiff Bay set to receive £175 million as a result of the Chancellor’s action plan, it’s vital they use this money immediately to fund tax rebates and create a discretionary fund for local authorities to use on households who do not meet the criteria.

Jane Hutt MS, the Welsh Government Social Justice Minister said that she and Lee Waters MS, the Welsh Government Minister for Climate Change, had written jointly to the Secretary of State for Business, Energy and Industrial Strategy, setting out a series of actions that they want the UK Government to take to support households with their energy bills.

These include removing the social policy costs imposed on household energy bills and move them to general taxation; Introducing a differentiated domestic energy tariff cap or social energy tariff targeted to better support lower income households; and provide further and increased support through the Warm Home Discount and other winter fuel payment schemes.

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The letter also calls on the UK Government to expand the ability of suppliers to write off household energy debt and introduce a match-funding element to the scheme, with the costs met by the UK Government; and Increase Local Housing Allowance rates.

The minister also called for a windfall tax on North Sea oil and gas producers as a means of measures to helping people through this cost-of-living crisis.

Jane Hutt added: “The cost-of-energy crisis and the wider cost-of-living crisis extends beyond any action the Welsh Government can take alone. We have expressed our concern to the UK Government and will continue to do so.

“Urgent action is needed to relieve bill payers from these very high energy prices.”

Meanwhile, Citizens Advice Cymru say that support on energy bills is “strange, complicated and untargeted”.

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Rebecca Woolley, Director of Citizens Advice Cymru said: “The package of measures announced by the UK Government will provide some relief for all households in April, but it doesn’t go far enough for people on low incomes.

“Energy rebates are a buy now pay later solution which only provide temporary relief later this year. And if the proposed reduction on Council Tax was introduced along similar lines in Wales, our analysis suggests that around 230,000 households on the lowest income may not benefit at all. The Welsh Government needs to intervene to make sure those who have been hit hardest by the pandemic, are not left even further behind.”

Dame Clare Moriarty, Chief Executive of Citizens Advice, added: “This is a strange, complicated and untargeted package of measures. For people on low incomes who need it most there are far easier ways for the Westminster government to deliver support. If the [UK] government is serious about helping families facing the desperate choice between heating and eating it should use the benefits system.”

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Cycling

Minister announces £50m investment to encourage cycle use

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Getting people out of cars and on to bikes is the aim of a £50m investment announced by Deputy Climate Change Minister Lee Waters.

Speaking on a visit to Cardiff-based cycling charity Pedal Power, the Deputy Minister said the money would fund cycling routes and new facilities right across Wales.

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Deputy Minister for Climate Change, with a responsibility for Transport, Lee Waters said: “This is a substantial investment and part of our commitment to making cycling easier so people cut the amount of journeys they take by car and travel in a way that is better for our planet.

“Getting people out of cars for short journeys and encouraging them to walk or cycle instead is a huge challenge for us, but one that has to be met if we are to reach our net zero carbon emission target by 2050.

“We need to make sure that we have the right infrastructure and routes in place so that people have the choice of cycling for their everyday journeys – we need to make the right thing to do, the easy thing to do.”

One organisation that is benefiting from this investment is Pedal Power in South Wales.

As part of a series of Welsh Government e-bike pilot schemes, the cycling charity received £0.21m for its ‘See Cycling Differently’ project which is aimed at increasing the inclusivity of cycling by offering a range of e-cycles.

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Thanks to the money received the charity has expanded its e-cycle fleet and is encouraging its users to cycle more.  

Jeff Mayle, Pedal Power use and Deputy Minister Lee Waters

Director of Pedal Power, Cardiff, Sian Donovan said: “Cycling is a fantastic way for everyone – all ages and abilities – to have fun, gain more independence and enjoy a sense of freedom which we know has provided a lifeline to many during the pandemic.

“We were delighted to receive funding from the Welsh Government to help us to continue to remove barriers to cycling so that it can be truly accessible and inclusive for all.”

As part of the investment announced today, all local authorities will receive a minimum of £500k with additional allocations having been awarded based on the outcome of a competitive application process.

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Business

Welsh and UK Governments agree to establish Freeports in Wales

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The Welsh Government has reached agreement with the UK Government on the establishment of Freeports in Wales.

Welsh Ministers have agreed to support Freeport policies in Wales following the UK Government’s agreement to meet the Welsh Government’s demands that UK Ministers provide at least £26m of non-repayable starter funding for any Freeport established in Wales, which represents a parity with the deals offered to English Freeports.

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The UK Government have agreed to meet a number of other demands – including that both Governments will act on the basis of a ‘partnership of equals’ to deliver any Freeports in Wales.

In addition, both Governments have agreed a Freeport will only be implemented if it can be demonstrated clearly it will operate in a manner that aligns with the Welsh Government’s policies on fair work and environmental sustainability, including the commitment to Wales becoming a net-zero carbon nation.

Economy Minister, Vaughan Gething said: “Following considerable engagement between our Governments, I’m pleased we have been able to reach agreement with UK Ministers to establish Freeports in Wales. The agreement we have reached is fair to Wales, and respects the Welsh Government’s responsibilities in devolved policy areas.

“However, we have made it clear to the UK Government that a Freeport will only be implemented if it can be demonstrated, using robust evidence and analysis, that it will support our fair work agenda and deliver long-term, sustainable benefits for Wales, and value for money for Welsh taxpayers.

“I very much hope that the UK Government’s willingness to work with the Welsh Government as equals on Freeports can provide a positive model for future co-operation between our governments on other initiatives.”

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The UK Government’s Secretary of State for Levelling Up, Housing and Communities, Michael Gove said: “I am delighted that Wales is the latest area in the UK set to benefit from a new Freeport.

“The UK Government’s ambitious Freeports agenda will help to level up our coastal communities and create new opportunities for people right across the country.

“Together with the Welsh Government, I look forward to seeing innovative proposals come forward that demonstrate tangible benefits for the people of Wales.”

In addition, Welsh and UK Ministers have agreed that the UK Government will provide tax incentives for Freeports in Wales in parity with Freeports in other parts of the United Kingdom for the reserved taxes that have been designated to advance the policy aims. The Welsh Government will design tax reliefs from local and devolved taxes (Non-Domestic Rates and Land Transaction Tax) to support the policy aims.

Both Governments say they will remain open to the possibility of a multi-site Freeport in Wales. In recognition of Wales’ unique economic geography and the Welsh Government’s aspirations for economic development in Wales, the UK Government is willing to relax the 45 km boundary limit for a multi-site Freeport solution, should there be a sufficiently compelling case for doing so.

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Both Governments will also remain open to the possibility of allowing more than one Freeport in Wales, should they be presented with a sufficiently compelling business case.

As with English Freeports, a fair and open competitive process will be used to determine where the policy should be implemented in Wales. Both Governments will work together to co-design the process for Freeport site selection, and both will have an equal say in all decisions throughout the implementation process. This includes the final decision on site selection.

Both Governments have begun the process of designing the bid prospectus for the competition and further details about the timing of next steps will be released in due course.

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Welsh Government

Welsh Government plans to set up a supervisory authority to oversee coal tip safety

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Climate Change Minister Julie James has set out plans to introduce a new law to manage the legacy of centuries of mining in Wales which put “community safety at the forefront.”

The Minister confirmed the Welsh Government will recommend the creation of a supervisory authority to oversee the new regime, which will ensure management arrangements are in place for the highest-category tips as well as compile and maintain a new national asset register.

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The full proposals, which also include a new national approach to the categorisation of tips, follow a recent report by the Law Commission which provided valuable evidence to help shape a White Paper released today.

Minister for Climate Change, Julie James said: “Wales has a proud mining heritage, but I understand the nervousness felt by those living in the shadow of coal tips. Due to increased risks from the climate emergency, it’s clear the current coal tip safety law is no longer fit-for-purpose.

“The Welsh Government is committed to introducing legislation during this Senedd to ensure people can feel safe and secure in their own homes, within communities that were vital in firing up the industrial revolution.

“We have put these people at the heart of our proposals for a whole new regime, while ensuring we protect critical infrastructure and continue to care for our environment.”

A new national approach to the categorisation of tips will be led by the new supervisory authority, who would arrange tailored hazard assessments for each site to scope the threats a tip might pose, with a management plan then agreed.

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While the new supervisory authority would ensure management arrangements are in place for the highest category tips, it would introduce maintenance agreements for those in lower category sites.

The Welsh Government say that addressing the lack of enforcement powers within the existing legislation is also key. They say this would include allowing rights of access for inspections, upkeep, or remedial works, with civil sanctions imposed when the new legislation is not complied with.

The White Paper consultation on the Welsh Government’s proposals for coal tip safety is now open and will run for 12 weeks.

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