Rishi Sunak vetoed government plan to ease pain from soaring energy bills, leak reveals

Chancellor rejected calls to rethink £200 ‘heat now, pay later’ loan – despite fears it will pile up further debt

Rob Merrick www.independent.co.uk

Rishi Sunak rejected proposals from a fellow cabinet minister to give more help to families hit by soaring home energy bills, a leaked document reveals.

The chancellor was urged to rethink a £200 loan that households will receive in the autumn, amid widespread criticism that the “heat now, pay later” scheme will pile up further debt.

The Department for Business put forward three options to ease the cost of living crisis, as part of the energy security strategy that aims to wean the UK off foreign fossil fuels.

Kwasi Kwarteng’s department suggested increasing the £200 payment to “£500 or more”, either for all households or for the poorest, an early draft obtained by the i newspaper shows. A second option would have delayed repayment of the £200, which the Treasury is saying must be repaid at the rate of £40 a year over the following five years.

Third, the business secretary’s officials proposed exempting the poorest homes from the need to repay at all, turning the loan into a grant.

A Treasury spokesperson did not dispute that the proposals had been rejected, after they did not appear in the strategy – which is under fire for failing to offer any immediate help with bills.

Mr Kwarteng admitted it would be at least “two or three years” before new infrastructure investments would have any impact on soaring fuel costs.

The price cap on annual domestic bills leapt by almost £700 this month to nearly £2000, and is expected to soar by up to a further £1,000 in the autumn.

Analysts have warned that the UK is heading for the worst plunge in living standards since the 1950s, along with an explosion in poverty that will push 500,000 more children below the breadline.

The End Fuel Poverty Coalition has warned that vulnerable families will be pushed further into debt by the loan, and criticised the decision to make it compulsory.

Labour has branded the loan a “scam”, arguing that around a million people who will not receive it – first-time buyers, separated couples, students and care leavers – will still be liable for the future charges.

Asked if Mr Sunak had rejected the proposed rethink, a Treasury spokesperson told The Independent: “We are not commenting on leaked documents.”

The leak also revealed that Mr Kwarteng’s hopes of dramatically increasing onshore wind farm investment had also bitten the dust amid the Whitehall wrangling.

The early draft proposed increasing output to 45GW by 2035, saying: “Onshore wind is currently the second-cheapest form of electricity generation.”

But Boris Johnson bowed to pressure from Tory MPs to keep the strict planning rules that act as an effective ban on new onshore wind farms.

Asked why, the prime minister said: “People feel that they affect the beauty of the countryside. I understand that.”

EDF energy prices rise by 4% in France compared to 54% in UK

EDF has raised its energy prices in France by just 4%, compared to the 54% increase consumers in UK have now been hit with.

Max Channon www.walesonline.co.uk

While it is largely owned by the French state, EDF – which stands for Électricité de France – is one of the largest electricity suppliers in the UK. The UK’s regional electricity companies were privatised in 1990, following the privatisation of British Gas in 1986.

Like all other energy suppliers in the UK, EDF has raised its prices on this side of The Channel after the UK price cap was increased by £693 – or 54% per cent – due to the record increase in global gas prices. However, in France, EDF has been forced to take a £7billion pound hit to protect French households from the price rises.

France’s Government capped the domestic price rises at just 4%. French president Emmanuel Macron – who faces elections later this month – also cut tax on electricity and has pledged to subsidise petrol by 15c a litre.

Ofgem, Britain’s independent energy regulator, announced the 54% energy price cap rise back in February. It said that the increase, that came into force on April 1, saw an increase of £693 from £1,277 to £1,971 per year for UK customer’s on default tariffs paying by direct debit. Prepayment customers saw an increase of £708 from £1,309 to £2,017.

“The price cap is updated twice a year and tracks wholesale energy and other costs,” said Ofgem. “It stops energy companies from making excessive profits, ensuring customers pay no more than a fair price for their energy.”

In a statement released when the UK increases were announced, EDF said: “We know this news will not be welcome and we want to be fully transparent, giving our customers as much notice as possible.

“We will be writing to customers on standard variable tariffs in the coming weeks to explain how these changes affect their own household bills. We’re working with the Government on how the support schemes announced yesterday will be implemented. Customers with questions about these schemes should check our website where updates will be provided, helping to keep our phone lines free for those in need of urgent support.

“At EDF, we have continued providing support to customers, delivering £2.1million of support to customers last year. We are helping customers monitor and reduce how much energy they need through provision of smart meters and online tools and donations of energy efficient white goods such as washing machines and fridges.

“However, all suppliers are struggling in the face of unprecedented energy market conditions with global gas prices having increased by 500% over the past year. Since last summer around 30 energy suppliers have failed. EDF stepped in last year to rescue more than 500,000 customers of failed suppliers, at a significant financial cost.”

Philippe Commaret, Managing Director of Customers at EDF, said at the time: “We know that these changes, driven by global gas prices, will not be welcome news for customers, but we want to be fully transparent and give our customers as much notice as possible. We’ve never stopped offering our customers help and will continue to do so, although the scale of the global problem means we are constrained in how much we can do.

“It is good to see Government acting now to take some of the sting from the forthcoming rise in April, although we know many customers will continue to struggle. We will work with Government to implement the schemes in the best way possible for customers.

“The market also needs longer term reform to ensure we don’t end up here again and Britain needs more of its own nuclear and renewable power generation and greater energy efficiency to reduce reliance on gas from other countries.”

Back in October last year, during a row over post-Brexit fishing rights, France’s Europe minister Clement Beaune had suggested France could cut off Britain’s imported energy supply. Mr Beaune told French radio station Europe 1 that the Trade and Co-operation Agreement (TCA) agreed as part of the Brexit divorce deal should be “implemented fully”, threatening action if it was not.

Asked what retaliations could be taken, Mr Beaune pointed to both UK exports to France and European energy exports to the UK.

He said: “The UK depends on our energy exports, they think they can live alone while also beating up on Europe and, given that it doesn’t work, they engage in aggressive one-upmanship.”

The UK Government has now promised to take back control of energy prices with its long-awaited energy strategy which aims to make 95% of electricity low carbon by 2030. Ministers are promising “cleaner and more affordable energy” to be made in this country by boosting wind, new nuclear, solar and hydrogen.

On April 6, Boris Johnson said the strategy, including new nuclear and offshore wind plans, would reduce the UK’s dependence on foreign sources of energy. There has been particular worldwide concern about the reliance on Russian oil and gas since the Kremlin’s invasion of Ukraine.

Under the Government’s fresh plans a new body, Great British Nuclear, will be launched to bolster the UK’s nuclear capacity with the hope of up to 24 gigawatts (GW) of electricity by 2050 coming from the source of power, 25% of the projected electricity demand. It is hoped the focus on nuclear will deliver up to eight reactors, equivalent to one reactor a year instead of one a decade.

Prime Minister Mr Johnson said yesterday: “We’re setting out bold plans to scale up and accelerate affordable, clean and secure energy made in Britain, for Britain, from new nuclear to offshore wind, in the decade ahead.

“This will reduce our dependence on power sources exposed to volatile international prices we cannot control, so we can enjoy greater energy self-sufficiency with cheaper bills.”

Eden Project team still want to build M5 tourist attraction

The team behind the Eden Project is still interested in development at junction 27 of the M5, councillors have been told. In 2020, Mid Devon’s local plan outlined how a visitor centre, hotel, outdoor adventure zone and outlet shopping could be among the facilities to be considered at the 71 hectares of land near Uffculme.

Ollie Heptinstall www.devonlive.com

It comes after initial plans were revealed years ago for a £200 million surf lake and a ‘mini’ Eden Project, backed by the Cornwall landmark’s co-creator Sir Tim Smit and other business partners. However, a new report says the covid pandemic and market changes mean no further plans have progressed, raising the question of “whether changes are required to some elements of the scheme in order to support delivery.”

Eden was recently awarded £250,000 from the UK Community Renewal Fund to allow it to refine and develop proposals for the site, with the report stressing that “interest in the scheme does remain” from the company. This work began recently and is expected to be completed later this year, according to the update, presented this week to a meeting of Mid Devon District Council’s (MDDC) ruling cabinet.

The council is also likely to start ‘enabling discussions’ in the coming weeks “with and between landowners and prospective occupiers” to get further clarity and consider what action is needed to progress work.

“The outcome of such discussions will clearly be important and will allow all parties to better understand the timescale of any development,” the report said. An update was also provided on development around junction 28 at Cullompton., which Mid Devon’s local plan identifyies as “the principal focus of development within the district.”

Up to 5,000 homes could be built at Culm Garden Village, east of the town, while work is progressing well on the proposed new Cullompton railway station, located off junction 28. Councillors were told that a lack of commercial premises in Devon and high demand means that “opportunity does therefore exist for further commercial development to progress – driving economic growth and job creation within the district.”

As part of the Culm Garden Village project, the council has instructed an employment and skills study to consider how the village can contribute to further employment growth in and around junction 28. It will see how this can be done in a way which supports new development, while reducing car ownership and longer commuting. Provisional findings are expected soon.

Councillor Richard Chesterton (Conservative, Lower Culm), cabinet member for planning and economic regeneration told the meeting: “Whilst progress may have been slower than anticipated in the recent time, work is underway in relation to development opportunities at our motorway junctions and they do continue to offer opportunities for further economic development and growth within the district.”

Deputy leader Bob Evans (Conservative, Lower Culm) said: “I think one of the really vital key elements here, to the opportunities that definitely lie at both junctions for this authority, is that engagement is key and listening to the key stakeholders – that includes residents and local businesses – to what they would see as the key opportunities.”

But Councillor John Downes (Lib Dem, Boniface), chair of the council’s economic policy development group, is concerned that both junctions, due to their close proximity, “could offer similar services to the detriment of each” and wanted them to be viewed “in the whole.” He said the council should be thinking “outside the box” about what to do at both sites, in particular junction 27, and is concerned that the Cullompton site could end up “confused and piecemeal” because of what is already there and what is planned.

“Things could happen in blocks, and the overall objective of making that a destination junction with not just services for motorists but also for the community, like incubator spaces and start-up spaces, [should] get considered in the whole,” Cllr Downes said. He asked for the council’s economic team to commission a review of the two junctions.

“We want the developments to become part of the community so that we’ve got people working locally, living locally, being employed locally, travelling locally – not being a satellite for Exeter,” he said. “Public engagement is essential because I think these two junctions really are the jewels in our crown. They can offer resource and money to the council and they could be destination places and they could benefit the community.”

Leader Bob Deed (New Independent, Cadbury) replied: “I appreciate that dealing with these two junctions holistically is the way forward, but realistically we’re dealing with silos, and it’s not as easy as getting everybody together and knocking their heads together for the benefit of all parties of the end of the day.” Councillor Ben Holdman (Lib Dem, Castle) is worried that “places like Cullompton, Tiverton and Willand are going to get left behind if we concentrate solely just on the junction.”

“They need to be encompassing of the surrounding areas and we need to encourage people back into our town centres and to include Willand’s village centre as well as the other villages.” In reply later in the meeting, Cllr Downes said there was “no intention whatsoever” to do anything at the junctions that would be “to the detriment of the economy of any of our market towns. The idea is to encourage growth, which those communities could be part of.”

Devon’s ‘inadequate’ children’s services “bumbled on”

Looks to Owl like a corporate and political failure. Dr Norrey has apologised, step forward Cllr Hart it’s now your turn.

Council chief to take control

Ollie Heptinstall, local democracy reporter www.radioexe.co.uk 

A lack of sufficient leadership allowed Devon’s inadequate children’s services to “bumble on in a rather pathetic way,” a councillor has claimed.

The comments came at a special meeting of the county council’s children’s scrutiny committee on Wednesday to discuss a recent Ofsted monitoring visit after the service was rated inadequate in 2020.

The visit found many of Devon’s vulnerable children: “remain in unsafe and neglectful circumstances for too long” but that some improvements were being made, especially within the department’s new leadership team.

During the meeting, opposition councillor Julian Brazil (Lib Dem, Kingsbridge) delivered a scathing attack on the council’s management for “failing” in its children’s services for years.

“I’ll put my head above the parapet and say I have full confidence in the leadership team within that department that we have at the moment and I’m sure we will see changes, but I think what disappoints me is I think that both corporately and politically we have allowed this situation to occur,” he said.

It was announced at the meeting that the council’s chief executive, Dr Phil Norrey, would be chairing an ‘improvement board’ for the service.

Cllr Brazil said: “I find it amazing that the chief executive has at last – better later than never I suppose – decided to take a proper hands-on approach to this problem.

“What was happening before? Did they think it was just something else?

“It’s all very well when everything’s going well, but the reason why we have these people in senior leadership positions is that when something goes wrong, they can step in and sort it out and obviously that has not happened. And we have allowed it to bumble on in a rather pathetic way that we find ourselves in this sad position.

“Children’s social services [is] probably the most important thing we do as a council. I accept its complicated and difficult, but how we allowed ourselves to be in a position where our social workers had worse terms and conditions than our neighbouring authorities is an absolute disgrace.

“I don’t think we’ve ever had an apology from the senior leadership team that they’ve allowed this to happen. I don’t think there’s ever been an apology to the children of Devon, to the people of Devon.”

He continued: “Personally, I’m embarrassed and I’m ashamed that I’m part of an institution that has allowed this to happen for so long”

But Cllr Brazil said the new team running the children’s department should be “given the opportunity to turn this around and make it better.”

Dr Norrey admitted it was “really disappointing” that the Ofsted visit in January 2020 concluded that: “we weren’t where we thought we were.

“I think we had a general view of our children’s services, that it was in a better place than it turned out to be. We thought we’d made improvements, we thought [the previous team] had helped move things forward.

“That didn’t turn out to be the case in some critical aspects of our performance, which we were unsighted on and I hold my hands up, and I’m happy to apologise for that from a senior leadership position. That I didn’t see it, that a number of us other senior leaders didn’t see it, that – to some extent – scrutiny didn’t see that we were in a worse position than we thought we were.

“Now we’ve just got to put our shoulder to the wheel and make sure that we don’t get back there.”

Dr Norrey said it “wasn’t normal” for a chief executive to chair an improvement board following an inadequate Ofsted inspection, a role usually given to an ‘improvement advisor,’ appointed in conjunction with the Department for Education.

“We’ve taken a view at this stage that actually, we would get more value out of me taking that on and directing the work of the improvement board, at least in the short term until we find a new improvement advisor.”

He said after slipping behind in terms of pay and conditions, Devon was now “ahead of the game” which would lead to improvements in recruitment and retention of staff.

The councillor responsible for children’s services, Andrew Leadbetter,(Conservative, Topsham) thanked Cllr Brazil for “being honest” but said: “I don’t think we could lay blame at [Dr Norrey’s] door.”

He added: “We’re now moving forward with a new team and let’s be optimistic about that.”

Cllr Leadbetter pointed to the recent Ofsted monitoring report which stated: “Importantly, elected members and corporate leaders are embracing the need to change after a long period of poor outcomes for families in Devon and are progressively prioritising children in the council’s plans.”

Published in February, the latest report found there was a surge in referrals during the pandemic about children who may be in need or at risk of harm, though it has now begun to “plateau.”

But it said the increase, combined with staff shortages and high caseloads, “are all contributing to many children and families not yet receiving the help they need at the time they need it most.”

The report by Ofsted inspector Steve Lowe pointed to some improvements – particularly within the leadership team and its importance at county hall. However it is clear that further work needs to be done.

“In particular, many children for whom there are concerns of significant harm are not seen quickly enough,” the report stated.

On the positives, it said the introduction of a new practice model: “has become increasingly understood by social workers and they are enthusiastic about the future.”

In addition: “Elected members and corporate leaders now prioritise children and families and acknowledge the need to make changes more quickly.”

The visit came after the previous one in May 2021, to assess the quality of social work during the pandemic, concluded that the service was still “at the start of its improvement journey” and “nothing is completely fixed.”

The meeting heard about a number of detailed improvements that were being carried out across the service, including a reduction in the number of days to see a child following a referral.

Across the county it has dropped to four days after being given “priority focus,” down from between five to 16 days in December 2021.

When asked when all the necessary improvements would be made by, Cllr Leadbetter said: “I don’t have a crystal ball.

“I mean, we’re making real improvements. The rate of progress is accelerating, but I’m not prepared to put my head on a chopping block and give a definitive date; I really can’t.”

He later clarified: “I didn’t want to sound flippant when I said about the crystal ball, but a lot of it’s going to depend on our referral rates for example. We’re coming out of this pandemic at the moment, so that’ll make a big difference.

Also, it’s very dependent on our recruitment of staff. If the measures we’ve put in place to increase our staff numbers work, and obviously we hope they do, then that’ll make the improvements a lot quicker.”

An officer added the improvement plan has “some specific measurable time-scales” as well as a “roadmap of the transformation journey” that goes up to 2024.

“Bus back Better”, “Levelling up”, “The magic sauce – the ketchup of catchup”.

As Devon gets less than half the money bid for bus improvements.

Hollow catchphrases, signifying nothing. Boris is just kicking sand in the faces of loyal (misguided) Tory voters, taking them for granted. The only way to grab the attention of a Tory politician is to stop voting for them. – Owl

Government funding for Devon buses less than half original bid despite ‘desperate need’

Ollie Heptinstall, Local Democracy sidmouth.nub.news 

Devon is to receive £14 million towards bus improvements – less than half the amount the county council originally bid for.

A £34 million bus improvement plan, described as “ambitious,” was submitted at the end of October. It aimed to make buses cheaper to use, greener, more frequent, and more reliable.

Developed in partnership with Devon’s bus companies, the plan included regional zone tickets to simplify fares in collaboration with neighbouring councils and to bring in ‘young person’ tickets for 16 to 18 -year-olds, an age group most heavily reliant on buses.

However, the £3 billion of government funding available for the ‘Bus Back Better’ programme was then slashed by more than half, with the long-awaited grants being announced by the Department for Transport this week.

While the county council got less than it asked for, Plymouth and Torbay’s bids were snubbed altogether, despite neighbouring Cornwall being chosen as a pilot area with fares to be “slashed” by as much as 40 per cent, thanks to an extra £23.5 million for the county.

A Devon County Council spokesperson said: “We are yet to receive confirmation of this funding settlement from the Department for Transport, so unfortunately we do not have details of whether the money is being awarded for improved services, fares, or bus priority.

“Until we do, we cannot comment further at this stage on what it will mean for our local bus services.”

The new funding comes at a turbulent time for Devon’s bus services, which have been disrupted recently mainly because of a shortage of drivers, which has led to cancellations and reduced timetables.

Councillor Rob Hannaford, leader of the Labour group who will ask for further updates at next week’s cabinet meeting, said in response to the funding announcement: “It’s very good news that Devon has received this substantial funding award, particularly as last week it was rumoured that we had not been successful at all.

“However, it is still less than half of the original bid, and Devon is a very big county, and there is a desperate need to invest in and improve our failing bus service.

“The original bid was a detailed costed initiative, to roll out greener, cheaper environmentally friendly buses, in tandem with more regular services in rural areas to help with connectivity, and drastically reduce commuter car journeys and pollution.

“We will now have to see how far this funding can be stretched in a strategic way across Devon, that has a real impact, which may well mean prioritising some areas of the county, over others, which could mean some hard choices.”

Councillor Julian Brazil (Lib Dem, Kingsbridge) told BBC Radio Devon: “We’re always happy with money, but it’s a drop in the ocean.”

“I mean, when you say we bid for £30+ million that was for £30+ million a year, not just a one-off. It’s all very well putting on new buses, but next year they’ll have to go because we don’t have the money, so it’s by no means a solution whatsoever.”

He said hourly buses into villages were “never going to come back, so we’ve got up with better ways of doing it with the information technology now that’s available.”

“We’ve got to start investing in ring-and-ride, as one example [and] a lot more community buses. Those are the sorts of ways I think – very bespoke individual solutions for individual areas.”

Transport secretary Grant Shapps said of the 31 regions across the country, including Devon, that are getting the cash: “Buses are the most popular way of getting around in this country, but for too long people outside of London have had a raw deal.

“The investment we’re making to ramp up the bus revolution will drive down fares at a time when people’s finances are tight and help connect communities across England.”

Boris Johnson Dodges Questions Over Rishi Sunak’s Wife’s Non-Dom Status

Boris Johnson has said politicians’ families should be kept out of politics as he dodged the row over the non-domicile tax status of Rishi Sunak’s wife.

[Boris Johnson has good reason to want to keep families “out of politics”, especially any who may get issued with a Fixed Penalty Notice for breaking Covid rules for holding parties in Downing Street- Owl]

Labour leader Keir Starmer said the chancellor was guilty of “breathtaking hypocrisy”.

Kevin Schofield www.huffingtonpost.co.uk 

Akshata Murty has become embroiled in a major controversy after it emerged she does not pay UK tax on her foreign earnings.

She has a stake in her billionaire father’s IT services company Infosys, from which she receives a multi-million pound annual dividend.

A spokesperson for Murty said her so-called “non-dom” status was a direct result of her Indian citizenship.

“So, according to British law, Ms Murty is treated as non-domiciled for UK tax purposes,” the spokesperson said. “She has always and will continue to pay UK taxes on all her UK income.”

Labour has demanded Sunak reveals how much UK tax his wife has avoided as a result of being a non-dom.

Asked about the row, Johnson said: “I think it is very important in politics if you possibly can to try and keep people’s families out of it.”

Speaking on a visit to Hinkley Point C as the government launched its energy security strategy, the prime minister said: “What I will say is that Rishi and I are working very hard on a massive long-term British energy security strategy, that is what we are focused on.”

But Labour leader Keir Starmer said the chancellor was guilty of “breathtaking hypocrisy”.

He said: “The chancellor has imposed tax rise after tax rise on working people and has said time and again there’s no alternative, we’ve got no option.

“If it now transpires that his wife has used schemes to reduce her own tax, then that is breathtaking hypocrisy and is more evidence of just how out of touch this chancellor is and I think he’s got serious questions to answer in relation to these schemes.”

Colonial past casts shadow over “Non-Dom” status

Plus estimates on how much the Chancellor’s wife may have saved.

The “non-domicile” tax exemption regime was originally introduced in 1799 to shelter those with foreign property from the swinging taxes introduced by prime minister William Pitt the Younger.

Pitt introduced new taxes In 1786 to try to reduce the debt incurred by the American War of Independence. With the country still in debt, Pitt was also forced, in 1797,  to introduce Great Britain’s first-ever income tax. The Napoleonic wars followed almost immediately and Pitt may have seen these coming.

“Non-Dom” status, then, is an echo of our colonial past. 

It is subtly different from nationality and residence and roughly equates to the concept of “homeland”. “Non-Doms” are supposed to have strong links to that “homeland” and demonstrate intent, not to remain in Britain, but to return there. A further curiosity is that you can also inherit the status from your father.

However, if eligible, you still have to make a conscious decision to claim this status. It’s a choice.

Having lost America, the aim of the perk was to keep the new colonial rich, happy. Those who were now left propping up the empire, for example sugar farmers in Jamaica. 

It is, therefore, appropriate to consider this quirk in the light of the current debate on the legacy of slavery.

Slavery was only outlawed completely, though not entirely stopped, in the “Empire” in 1833 and emancipation was not fully achieved in the USA until 1865.

Now is surely the time to abolish this anachronism. – Owl

(Sources – various)

Akshata Murty may have avoided up to £20m in tax with non-dom status

Peter Walker www.theguardian.com (Extracts)

Rishi Sunak’s wife has potentially avoided up to £20m in UK tax by being non-domiciled and pays £30,000 a year to keep the status – revelations that come amid growing political pressure on the chancellor……

……Murty has collected about 5.4bn Indian rupees (£54.5m) in dividends from Infosys, the Indian-headquartered IT business founded by her father, over the past seven and a half years, the period for which there is public data. Non-dom status for that whole period could have saved her about £20m in UK taxes.

Last year she collected dividends of £11.6m. As a higher rate UK taxpayer she would have been expected to pay 38.1% tax on the payout, which works out at £4.4m. Before 2016, the rate was 30.6%. It rose to 39.35% this week.

One factor which could reduce the total Murty would have been eligible to pay would be any reduction under double tax treaties between the UK and India, tax experts said.

Murty’s spokesperson said they had no comment on the £20m figure beyond reiterating she paid relevant taxes on UK and overseas incomes. They accepted that people with such tax arrangements could theoretically minimise payments using tax havens, while saying they had no comment as to whether Murty did this.

Murty has previously collected other dividend income via the tax haven of Mauritius, which does not tax dividends. The spokesperson also declined to elaborate on the initial explanation for Murty’s non-dom tax status – the fact she has Indian citizenship – when this would still mean such a tax arrangement was a choice……