In another disarmingly frank answer to a question this week, Truss admitted that the U.K. was nowhere near securing a trade deal with Washington. Labour has been digging through the former trade secretary’s words over the past few years and found that she claimed a U.S. trade deal was her No. 1 priority in 2019… set a mid-2021 deadline during the pandemic … and insisted last summer that there was “significant progress” being made.
From Politico newsletter
Liz Truss will announce radical plans to cut stamp duty in the government’s mini-budget this week in an attempt to drive economic growth, The Times has been told.
Fuel on the fire of house prices – Owl
www.thetimes.co.uk (Extract)
The prime minister and Kwasi Kwarteng, the chancellor, have been working on the plans for more than a month and will announce them on Friday.
Truss believes that cutting stamp duty will encourage economic growth by allowing more people to move and enabling first-time buyers to get on the property ladder.
Two Whitehall sources said that cuts to stamp duty were the “rabbit” in the mini-budget, which the government is billing as a “growth plan”. The fiscal statement will also include plans to reverse the national insurance rise and freeze corporation tax, two measures that will cost £30 billion a year between them.
Truss is also considering bringing forward plans to cut income tax by 1p in the pound from 2024 to next year, although this is likely to be reserved for a full budget before the end of the year…..
…..Under the present system no stamp duty is paid on the first £125,000 of any property purchase. Between £125,001 and £250,000 stamp duty is levied at 2 per cent, £250,001 and £925,000 5 per cent, £925,001 and £1.5 million 10 per cent and anything above £1.5 million 12 per cent. For first-time buyers the threshold at which stamp duty is paid is £300,000.
During the pandemic the stamp duty threshold was increased temporarily to £500,000 to help to stimulate the property market. Truss has previously said that cutting stamp duty is “critical” to economic growth. As chief secretary to the Treasury she said that the highest rate of stamp duty, which was introduced by George Osborne, was “clogging up” the housing market and leading to fewer transactions….
Homes acquired with “dirty money” in the richest parts of London could be seized and turned into affordable housing under plans to crack down on oligarchs using Belgravia, Knightsbridge and Mayfair “to rinse their money”.
Robert Booth www.theguardian.com
Labour-controlled Westminster city council is examining the use of compulsory purchase orders in extreme cases where it finds properties are not being used for their stated purpose, as part of a push to “combat the capital’s reputation as the European centre for money laundering”.
The plan faces obstacles including a lack of transparency over property ownership and a shortage of checks on the registration of companies, but the council is threatening to use seized homes to help reduce the waiting list for affordable housing of 4,000 households.
The number of properties in Westminster registered to owners in Jersey and Russia has risen by 300% and 1,200% respectively since 2010.
The council is exploring the use of a compulsory purchase order against a property registered in Seychelles, the owner of which has run up significant council tax arrears.
Russians accused of corruption or of links to the Kremlin have bought property worth nearly £430m in Westminster since 2016 – more than in any other UK area – according to researchers at Transparency International UK (TIUK).
It is believed that property worth about £283m has been purchased in neighbouring Kensington and Chelsea.
Adam Hug has been leader of Westminster council since May, when Labour took control for the first time after 58 years of Conservative rule.
He said: “Westminster’s dirty secret has been known for many years, but those in power looked the other way for too long as money of questionable origin flooded into London and investors took advantage of our relatively lax laws.
“It took the war in Ukraine to refocus attention on oligarch investments and what London has become in terms of a European laundromat for dirty money.”
He said the problem went further than “[Vladimir] Putin and his henchmen”, and that it damages London’s reputation by supporting authoritarianism abroad. Hug added that it “drains the vitality of areas with empty or underused homes”.
The council is mapping properties owned overseas against council tax data to determine whether they are being used for their stated purpose.
Westminster plans to target homes it finds have been acquired with “dirty money” or “money of dubious origin”. The council defines dirty money as that obtained from criminal activity including bribery, theft of state funds and misuse of public office.
Money of dubious origin is money where there is no or limited transparency of how the funds were acquired, often associated with the use of tax havens or elaborate corporate constructions to avoid tax.
Rose Zussman, policy manager at TIUK, said: “It is no secret that kleptocrats and those with money to hide have invested vast sums into the Westminster property market over the years. It is promising to see the council seeking to help expose and recover these illicit assets.”
But she said any funds reclaimed that are linked to corruption should go back to victims in the origin state “to ensure justice is served”.
Hug is also convening a meeting of property owners, experts and officials in the capital to join the “Westminster against dirty money” campaign and is calling on the government to restrict the artificial use of tax havens, and increase funding for the National Crime Agency and HMRC to fight money laundering.
The council wants stronger identity checks when people register companies and the new beneficial property ownership register to be fully implemented.
The register went live last month and overseas entities that already own or lease land or property in the UK must submit their registrable beneficial owners or managing officers by 31 January 2023.
Kwasi Kwarteng has refused to let a government watchdog assess the economic impact of planned tax cuts expected in a mini-budget on Friday.
The party of “sound money” doesn’t want any inconvenient truths to get in the way. Are the Tories on course to crash the economy? – Owl
Rowena Mason www.theguardian.com
Mel Stride, the Tory chair of the Treasury select committee, urged Kwarteng to allow independent forecasts for the public finances to be published alongside his mini-budget on Friday. Stride released a strongly worded statement urging more clarity around the effects of the new chancellor’s fiscal interventions.
The chancellor is expected to unveil tax cuts of £30bn to £50bn, according to some estimates, while the government’s intervention to freeze energy prices for consumers and businesses could cost more than £100bn. He is also expected to review his fiscal rules to allow the government to borrow more.
Stride, an ally of the former chancellor and defeated leadership contender Rishi Sunak, said independent forecasts from the Office for Budget Responsibility were necessary to “provide reassurance and confidence to international markets and investors”.
He said: “As a committee, we have in the past reported to the house that we consider it very important that significant changes to taxation are announced in a fiscal event alongside an OBR forecast. These forecasts are a vital indicator of the health of the nation’s finances, and provide reassurance and confidence to international markets and investors.
“There has been a deterioration in our economic outlook since the last OBR forecast in March. There have been significant fiscal interventions since then and we are told there will be further significant interventions including major permanent tax cuts to be announced on Friday. Under these circumstances, it is vital that an independent OBR forecast is provided.”
Richard Hughes, the chair of the OBR, said in a letter to Stride that he had notified Kwarteng when he became chancellor that the OBR was ready to provide a forecast. He said a quick turnaround would mean the forecasts provided “less complete analysis supporting the key judgments, less detailed breakdowns of the key economic, and less contextual and supplementary information than [forecasts] produced in normal times”, but it would give “the most complete and up-to-date picture of the economic and fiscal outlook as possible”.
But a government spokesperson said: “Given the exceptional circumstances our country faces, we have moved at immense speed to provide significant energy bill support for households and businesses, and are acting swiftly to set out further plans to kickstart economic growth later this week. We remain committed to maintaining the usual two forecasts in this fiscal year, as is required.”
It is understood the chancellor plans to hold a full budget later in the year, though the bulk of the measures ministers plan to implement in their first year of the administration are likely to be included in Friday’s event.
As well as the mini-budget on Friday, there is expected to be a statement from Jacob Rees-Mogg, the business secretary, on Wednesday, outlining an energy support package for businesses.
Michelle Donelan, the culture secretary, told broadcasters on Tuesday morning that the government understood why businesses wanted “clarity and assurance”.
She said: “Many companies and public sector organisations will need additional support and that is why we want to work up a tailored package to target that support and make sure that support is really the correct support.”
“We’re building an economy from the bottom up and middle out”
Still there are always the delusional zealots who back belief over experience. – Owl
Liz Truss favours trickle down economics but results can be trickle up
Trickle down economics was highly fashionable on the political right in the 1980s, when both Ronald Reagan in the US and Margaret Thatcher championed the idea. It resurfaced in America under both George W Bush and Donald Trump, and it is now undergoing a revival in Britain under the new prime minister, Liz Truss.
Larry Elliott www.theguardian.com
The theory of trickle down economics is simple. Governments should cut taxes for the better off and for corporations because that is the key to securing faster growth. Entrepreneurs are more likely to start and expand businesses, companies are more inclined to invest and banks will tend to increase lending if they are paying less in tax.
Initially, the beneficiaries are the rich, but gradually everyone gains because as the economy gets bigger well-paid jobs are created for working people. Governments should stop focusing on how the economic pie is distributed and focus on growing the pie instead.
Supporters of trickle down often cite the work of the US economist Arthur Laffer as proof that the theory works. Laffer said tax cuts for the wealthy had a powerful multiplier effect and any revenues lost by governments from reducing tax rates would be more than compensated for by the fruits of higher growth.
Truss is using this argument to justify the £30bn of tax cuts to be announced in Kwasi Kwarteng’s mini budget on Friday, even though Laffer was clear his theory worked best when personal tax rates were prohibitively high, by which he meant between 50% and 100%. At rates below 50%, Laffer found cutting taxes led to bigger rather than smaller budget deficits.
In practice, trickle down did not go according to plan. Reagan and Bush slashed tax on higher earners but inequality soared: between 1979 and 2005 the incomes of the Top 1% of earners tripled while those of the bottom 20% rose by just 6%. It was more a case of trickle up than trickle down.
Moreover, Reagan’s combination of tax cuts for the rich and a big increase in defence spending resulted in a threefold increase in US federal government debt between 1981 and 1989. The US economy grew strongly in the latter years of Reagan’s presidency, but this was a period not just of higher spending on the military but also of cheaper borrowing after the cripplingly high interest rates of the early 1980s.
In a 2015 assessment, the International Monetary Fund rubbished trickle down and said governments should instead focus on policies that would directly help those on low and middle incomes.
“We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the Top 20% results in lower growth – that is, when the rich get richer, benefits do not trickle down,” the IMF said. “This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class.” Joe Biden agrees.
An application has been submitted for a new operating centre to move into a village trading estate where residents have long complained about noise and dangerous traffic congestion from HGVs. Swindon-based OPX Logistics Ltd is seeking to keep five vehicles and five trailers at Lodge Trading Estate in Station Rd.
Anita Merritt www.devonlive.com
The trading estate is already home to haulage company Heaver Brothers Ltd and also international courier delivery company TNT. Vast complaints have been made by locals who say large-vehicle/ heavy traffic volume companies should never have been permitted to operate in the rural residential area.
Narrow roads make it difficult for large vehicles to negotiate its way through. Photographs have often been shared on social media capturing stationary traffic and lorries attempting to pass each other in narrow lanes, which residents say highlights the road is not suitable for HGVs.
OPX Logistics, which has more than 30 years’ experience in the delivery of logistics, is required to advertise public notices to inform people of its plans. Anyone with concerns is is invited to write to the traffic commissioner who is responsible for licensing and regulating operators of heavy goods vehicles (HGVs), public service vehicles (PSVs) and local bus services.
The notice states: “OPX Logistics Ltd of Ignition Park, Faraday Road, Swindon, SN3 5FB is applying to add an operating centre to keep five vehicles and five trailers at Lodge Trading Estate, Station Rd, Broadclyst, Broadclyst Station, Exeter EX5 3BS.
Residents have spoken about their frustration over traffic problems in Broadclyst (Image: Broadclyst Station Community)
“Owners or occupiers of land (including buildings) near the operating centre(s) who believe that their use or enjoyment of that land would be affected, should make written representations to the Traffic Commissioner at Hillcrest House, 386 Harehills Lane, Leeds, LS9 6NF, stating their reasons, within 21 days of this notice.
“Representors must at the same time send a copy of their representations to the applicant at the address given at the top of this notice. A Guide to Making Representations is available from the Traffic Commissioner’s office.
Liz Truss’s bid to “go for growth” by slashing taxes on big business profits has failed in the past and will fail again, a leading think tank is warning.
Rob Merrick www.independent.co.uk
The plan to scrap a hike in corporation tax ignores the harsh lessons of recent history – when investment stagnated despite ultra-low rates – and is not even favoured by business leaders, the Institute for Public Policy Research (IPPR) is arguing.
Instead, it calls for a strategy stretching beyond tax to boost investment and productivity by tackling chronic problems in housing, energy, transport, skills and childcare.
“Slashing corporation tax is just a continuation of a failed race to the bottom that hasn’t delivered for the UK economy,” said George Dibb, head of the Centre for Economic Justice at the IPPR.
“Tax cuts are not a magic bullet to increase investment and growth – in fact, despite having some of the lowest levels of corporate taxation, business investment in the UK is the lowest in the G7.
“If the government were serious about boosting investment, it would be listening to businesses who want a serious economic strategy to support growth, boost innovation, and increase our low productivity.”
Friday’s mini-budget is expected to fulfil Ms Truss’s campaign pledge to axe the corporation tax hike, as one of a clutch of policies that will benefit the better off.
The levy is due to rise from 19p to 25p next April, after former chancellor Rishi Sunak reversed years of Tory economic faith by accepting the low rate was failing to fire up business investment.
The analysis by the IPPR has found that – even with the 19p rate, by far the lowest of the G7 leading economies – the UK fell behind its rivals in the investment race.
In 2019, it slipped behind Italy and Canada to have the lowest private sector investment in the G7 as a proportion of gross domestic product (GDP), the left-leaning think tank said.
The following year, the UK ranked a miserable 28th out of a 31-strong group of developed countries which are members of the Organisation for Economic Co-operation and Development.
Mr Dibb added: “We’re not just falling behind the largest economies either, the UK is consistently in the worst performers in the OECD club of 38 developed economies.”
He criticised a belief that a government “can cut tax and deregulate its way to growth, which has failed before” – contrasting it with Joe Biden’s “whole-government” approach.
A “chop-and-change” approach – which had seen government adopt five strategies in just eight years – was also confusing businesses and undermining UK economic credibility, Mr Dibb said.
The mini-budget is also expected to see taxes cut in a string of “investment zones”, where businesses may also be able to ignore some environmental regulations.
But a near-identical policy pursued by George Osborne after 2010 – when they were called “enterprise zones” – also failed to spur growth in economically left behind areas.
“This isn’t a Brexit freedom. It’s a nonsense.” Conservative MP
It was meant to be one of the sure-fire wins for Brexit, but plans to bring back imperial measurements face criticism over claims of a biased government review.
Jon Ungoed-Thomas www.theguardian.com
Ministers were keen to launch a review to revive imperial measurements – such as pounds and ounces – and the Department for Business, Energy and Industrial Strategy (BEIS), now overseen by Jacob Rees-Mogg, conducted a government consultation over the summer. However, the questions appeared to have something missing.
The survey asked consumers: “If you had a choice, would you want to purchase items: i) in imperial units ii) in imperial units alongside a metric equivalent.”
No other option was given.
Officials said respondents who wanted to keep the current metric system could send in an email to the department or give their views in one of the text boxes in the survey.
The BBC Radio 4 programme More or Less last week highlighted concerns about the survey and criticism of it on social media.
One Twitter user commented: “This survey is being punted out by BEIS. It is so slanted that the words nearly slide off the page.”
Dr Pamela Campanelli, a consultant on survey methods who has advised local government, told More or Less: “This is missing the category that you would prefer metric only. We’re going to get a biased answer, because people have to choose something that doesn’t apply to them.
“It seems like they’re actually trying to sculpt or lead the responses towards what they want, because they want people to go back to imperial.”
France adopted a metric system in the late 18th century, and a Decimalisation Assocation was founded in Britain in 1841 to lobby for a new system for currency and measurements. A report by a standards commission in the 1860s recommended metrication for Britain, but it was another 100 years before a government board was set up in 1969 to promote and coordinate metrication.
Once Britain joined the European Economic Community in 1973, the government committed to adopting the metric system. Regulations introduced in 1995 required goods to be sold in metric units in the UK.
In a high profile case in 2002, five market traders – know as the “metric martyrs” – lost their court battle for a right to trade in pounds and ounces. The battle was supported by celebrities including the comedian John Cleese and politicians including Boris Johnson.
Rees-Mogg, who had a cabinet role to identify Brexit opportunities, has been a long-term supporter of using imperial measurements. The proposed change is however unlikely to be hailed as a significant Brexit dividend.
“Not one constituent, ever, has asked for this,” Conservative MP Alicia Kearns tweeted earlier this year. “This isn’t a Brexit freedom. It’s a nonsense.”
BEIS officials say the purpose of the consultation was to examine how greater choice could be given to businesses and consumers. The government has not yet said when the response to the consultation will be published.
As Jayawardena (the new Secretary of State for Environment, Food and Rural Affairs) announced his new role by visiting an intensive chicken farm and made little mention of nature, instead focusing on food security.
Says it all! – Owl
Helena Horton www.theguardian.com
The head of Natural England and the chair of England’s largest landowners’ organisation are to meet the new environment secretary to urge him not to scrap or water down rewilding schemes.
Tony Juniper, who will meet Ranil Jayawardena along with the CLA chair Mark Tufnell on Tuesday, pointed out that swathes of prime land were being used for golf courses, housing and other infrastructure but political focus was on the small amount that would be rewilded.
There has been concern that the new government might roll back nature recovery schemes put in place by the previous administration, in which landowners and farmers are paid for improving nature.
The business secretary, Jacob Rees-Mogg, is said to have pushed back against the schemes, while Jayawardena announced his new role by visiting an intensive chicken farm and made little mention of nature, instead focusing on food security.
Speaking at the Gathering nature festival at Wild Ken Hill in north Norfolk, Juniper said: “Some of [this prime land] is under golf courses, so it is not only nature and other things.”
He said alongside food security “we also need to catch carbon, we also need to avoid flood risk. We also need to have places for healthy outdoor enjoyment and recreation, we need land for biodiversity and nature recovery, you need land for water infrastructure, and housing.
“There’s probably more housing going on land with high agricultural value than there is rewilding projects. And all of this stuff needs to be on the table at once.”
Tufnell, whose organisation represents 33,000 landowners, added that he hoped the new administration would listen to them, and that they realised nature recovery was the future.
He said: “We are meeting the secretary of state on Tuesday, and I will be asking the same questions that we have debated this morning. We do need to accelerate environment land management and we need to see a recovery in nature. It’s a totally false narrative that you can have food or you can have nature. You have to have both, and it’s perfectly possible.”
Some at the event were concerned that the government would try to cut the schemes. Lee Schofield, a senior site manager at RSPB Haweswater, said: “I am very concerned, so I’m not sure what else to say. It’s terrifying. And we just have to hope that what they may try to enact does not get through the checks and balances that are in place to stop us going backwards.”
Some conservationists are more optimistic about the prospect of nature recovery as they believe Liz Truss’s government may not be around for long – so might not be able to cause much damage to the schemes even if it wanted to.
Jake Fiennes, the head of conservation at the Holkham national nature reserve and author of Land Healer, said: “We have a government that potentially is only going to be around for 18 months. We have set this ball rolling. There’s environmental restoration already in place that is happening. I think that actually we are on a trajectory, and I think this momentum is not going to stop.”
Others agree; Benedict Macdonald, who works with landowners to rewild with the Real Wild Estates Company, said his clients disagreed with anti-nature comments from government figures.
He said: “The backlash against this government, especially from the landowners and farmers, will be from them saying: ‘Why are you standing in the way of me doing better things and handing down sustainable land to my children?’ And that’s a very powerful thing that I don’t think 18 months of government is going to sink.”
Juniper said: “I don’t see any reason why we need to be making any departures from those policies at the moment. I look forward to working with ministers on finding the very best ways forward during the months and years ahead.”
Britain’s poorest three million households will be as little as 63p a month better off under Liz Truss’s plans to cut national insurance contributions, while the richest will benefit by £150, according to economic analysis.
What a way to blow £30bn. – Owl
Matt Dathan www.thetimes.co.uk
Kwasi Kwarteng, the chancellor, is expected to make good on the prime minister’s pledge to scrap the increase in national insurance contributions in a mini budget on Friday.
Reversing the 1.25 per cent rise, which was only implemented in April, will be among a range of measures intended to stimulate economic growth and is expected to take effect as early as November.
Tom Waters, a senior research economist at the IFS, said people earning more than £100,000 would benefit the most, adding that there were more progressive ways to cut taxes, such as raising the threshold at which workers pay the basic rate of income tax. Kwarteng is said to be more persuaded towards cutting income tax by 1p rather than raising the threshold, which would still benefit the middle classes more than those on the minimum wage.
The move would bring forward plans announced by the government earlier this year to cut 1p off income tax from 2024, while Goldman Sachs, the US investment bank, said it is expecting Kwarteng to go further by cutting 2p from basic rate income tax.
A final decision has not been taken, it is understood, while a reduction in the basic rate could be deferred until a formal budget, expected in November.
The chancellor is also expected to create 12 special investment zones across the UK that could offer workers a significant discount in employer national insurance contributions for staff employed within the zones. He will use Friday’s “fiscal event” to freeze corporation tax, with the total package of tax cuts expected to cost between £30 billion and £50 billion.
The Times revealed on Saturday that Kwarteng is reviewing fiscal rules that require debt to fall as a proportion of national income in 2024-25 in order to make way for the massive tax cuts.
There is also expected to be a package of deregulation to stimulate a “big bang 2.0”, which could include removing the cap on bankers’ bonuses, slashing environmental protections that have historically made it hard to build on certain types of land, and scrapping plans to prevent supermarkets advertising buy one get one free-type multibuy deals on junk food as part of the government’s obesity strategy.
However, analysis of Truss’s existing plans to cut NICs by the Institute for Fiscal Studies has revealed the extent to which the move will disproportionately benefit richer households compared to the poorest.
The richest tenth of households, who earn an average of £108,000, will save £1,800 on their annual tax bill, equivalent to £150 per month. In contrast, the poorest ten per cent of households, who on average earn £12,000, will save just £7.66 on their annual tax bill, which works out at just 63p per month or 14p per week.
Those in households with the average UK household income of £31,400 will save about £250 per year, or £20 per month. Households with an income of £55,000 will save about £700 per year, which is £58 per month, while households on £23,000 will benefit by about £73 per month, according to the IFS analysis.
Tom Waters, senior research economist at the IFS, said that while tax cuts would always benefit richer households over the poorest, there were fairer ways in which Truss could cut taxes.
He said: “Reversing the recent NICs rise would tend to benefit richer households more than poorer ones, even as a share of their income; the richest 10th, for example, would gain about £1,800 per year, or 1.7 per cent of their income, and the poorest tenth about £7 per year, less than 0.1 per cent of their income.
“That’s partly just a natural consequence of the existing tax system: those towards the bottom of the income distribution don’t pay much in direct taxes, and so it’s hard to cut taxes in a way that makes a big difference to them.
“That said, there are more progressive ways to cut tax — raising the income tax personal allowance, for example, which is currently due to be frozen in cash terms until March 2025. Tax cuts along these lines, including a NICs cut, would of course strengthen incentives for people to move into work.”
Tony Wilson, director of the Institute for Employment Studies, said the plans were a “tax giveaway to relatively high earners” and warned that they risked higher inflation. He said: “The worry that the Bank of England and Treasury officials will be that the move is more inflationary than a more targeted subsidy or tax cut at those on lower incomes. “Another £600 in the pocket of higher earners is likely to lead to more discretionary spending.
Wilson urged the Treasury to spend billions of pounds that was set aside but unused during the pandemic to stave off long-term unemployment, which never transpired, in order to attract tens of thousands of over-50s back into employment. Many over-50s left the labour market during or after the pandemic but are not counted as unemployed because they are not actively seeking work.
The Treasury only spent about £1.3 billion of the £2 billion set aside for the Kickstart programme, and the £1.3 billion it saved from the projected £2.7 billion it committed to the Restart programme – both designed to get people back into work.
He said: “There are other things we can do on policy to make our labour market work better and if we don’t get more people in the labour market, other decisions, such as tax cuts, will be counter-productive.
“One thing the government could do is reinvest the £10 billion set aside during the pandemic to stave off long-term unemployment that never transpired.”
No10 and the Treasury have said Friday’s “fiscal event” will be focussed on how to create economic growth. Kwarteng is “prepared to be bold” and “prepared to have the argument,” sources said, adding that the UK can “no longer carry on fighting over what’s left of the pie, which hasn’t been growing at all over the last few years”.
Their ambition is to “grow the pie for the prosperity of the country”. The mini budget is designed to deliver Truss’s pledges during the Conservative leadership election over the summer, with a full, formal budget planned for November, which will be accompanied by the usual forecasts by the Office for Budget Responsibility, the spending watchdog.
Total Costs tot up to £300,000
From the Western Morning News
South West Water has been ordered to pay almost £300,000 in fines and costs for supplying unfit drinking water in Devon.
The Exeter-based company admitted one in charge in a prosecution brought by the Drinking Water Inspectorate.
South West Water apologised for what it described as an “isolated incident” in 2018 and said it was caused by a naturally occurring algal bloom on Exmoor’s Wistlandpound reservoir, in part due to a hot and dry summer.
The regulator told the court that between June 19 and August 21, 2018, South West Water supplied water that was “unfit for human consumption” at Bratton Fleming and Horedown, near Barnstaple.
Customers at the time reported that the water was discoloured and had an “earthy” or “mouldy” taste. South West Water said it was not harmful to health and told people to chill the water in the fridge or add a slice of lemon to improve the taste.
The company admitted the offence and was fined £233,333 at Plymouth Magistrate’s Court last Tuesday. It was also ordered to pay a victim services surcharge of £170, and costs of £60,320.73, bringing the total penalty to £293,823.73.
A spokesperson for South West Water said after the hearing: “We deeply apologise to our customers affected by this incident in 2018, which was caused by an algal bloom on the reservoir. We accept that unpalatable water, even when safe to drink, is absolutely unacceptable, and this was reflected in our guilty plea at the earliest opportunity. Since then, we have made a number of major investments of up to £1 million to the site to reduce the risks of such events occurring again.”
The company said the problem had not happened again due to the action it took afterwards. The issue was caused by what it called “naturally occurring scientific compounds [algal bloom]” at “unprecedented levels”, caused in part by “an unusually dry and hot summer”.
The water from the reservoir made it through to the local water treatment works and eventually to drinking water supplies. South West Water says it did not impact the safety of the water, but affected the taste and smell which led to customer complaints and an investigation by the Drinking Waters Inspectorate.
The company says that, since 2018, it has made “major interventions and investments in the site”, costing up to £1 million. The measures include installing a large reservoir mixing system in 2019, which it says helps to maintain water quality by keeping the water fully mixed and easier to treat.
The company says it continues to review its drinking water safety plans continuously to assess new risks and to prioritise investment.
The Wistlandpound reservoir has a capacity of 1,550 megalitres and water is taken for treatment to supply customers in Devon, including Ilfracombe and Barnstaple.
The Environment Agency downgraded the company to the lowest rating of one star for its environmental performance in July. Water companies have come under fire from campaigners over water quality in the rivers and seas, including the level of storm overflows of untreated sewage which are legally allowed to prevent flooding after exceptionally heavy downpours.
BA.4.6, a subvariant of the omicron COVID variant which has been quickly gaining traction in the US, is now confirmed to be spreading in the UK.
Manal Mohammed theconversation.com
The latest briefing document on COVID variants from the UK Health Security Agency (UKHSA) noted that during the week beginning August 14, BA.4.6 accounted for 3.3% of samples in the UK. It has since grown to make up around 9% of sequenced cases.
Similarly, according to the Centers for Disease Control and Prevention, BA.4.6 now accounts for more than 9% of recent cases across the US. The variant has also been identified in several other countries around the world.
So what do we know about BA.4.6, and should we be worried? Let’s take a look at the information we have so far.
BA.4.6 is a descendant of the BA.4 variant of omicron. BA.4 was first detected in January 2022 in South Africa and has since spread around the world alongside the BA.5 variant.
It is not entirely clear how BA.4.6 has emerged, but it’s possible it could be a recombinant variant. Recombination happens when two different variants of SARS-CoV-2 (the virus that causes COVID-19) infect the same person, at the same time.
While BA.4.6 will be similar to BA.4 in many ways, it carries a mutation to the spike protein, a protein on the surface of the virus which allows it to enter our cells. This mutation, R346T, has been seen in other variants and is associated with immune evasion, meaning it helps the virus to escape antibodies acquired from vaccination and prior infection.
Severity, infectiousness and immune evasion
Fortunately, omicron infections generally cause less serious illness, and we’ve seen fewer deaths with omicron than with earlier variants. We would expect this to apply to BA.4.6 too. Indeed, there have been no reports yet that this variant is causing more severe symptoms.
But we also know that omicron subvariants tend to be more transmissible than previous variants. BA.4.6 appears to be even better at evading the immune system than BA.5, the currently dominant variant. Although this information is based on a preprint (a study that is yet to be peer-reviewed), other emerging data supports this.
According to the UKHSA’s briefing, early estimates suggest BA.4.6 has a 6.55% relative fitness advantage over BA.5 in England. This indicates that BA.4.6 replicates more quickly in the early stages of infection and has a higher growth rate than BA.5.
The relative fitness advantage of BA.4.6 is considerably smaller than that of BA.5 over BA.2, which was 45% to 55%.
The University of Oxford has reported that people who had received three doses of Pfizer’s original COVID vaccine produce fewer antibodies in response to BA.4.6 than to BA.4 or BA.5. This is worrying because it suggests that COVID vaccines might be less effective against BA.4.6.
The capacity of BA.4.6 to evade immunity may however be addressed to a degree by the new bivalent boosters, which target omicron specifically, alongside the original strain of SARS-CoV-2. Time will tell.
Meanwhile, one preprint study shows that BA.4.6 evades protection from Evusheld, an antibody therapy designed to protect people who are immunocompromised and don’t respond as well to COVID vaccines.
Vaccination is key
The emergence of BA.4.6 and other new variants is concerning. It shows the virus is still very much with us, and is mutating to find new ways to overcome our immune response from vaccination and previous infections.
We know people who have had COVID previously can contract the virus again, and this has been particularly true of omicron. In some cases, subsequent episodes can be worse.
But vaccination continues to offer good protection against severe disease, and is still the best weapon we have to fight COVID. The recent approval of bivalent boosters is good news. Beyond this, developing multivalent coronavirus vaccines that target multiple variants could provide even more durable protection.
A recent study showed that a multivalent coronavirus vaccine administered through the nose elicited a strong immune response against the original strain of SARS-CoV-2, as well as two variants of concern, in mouse models.
Close monitoring of new variants including BA.4.6 is pressing, as they could lead to the next wave of COVID pandemic. For the public, it will pay to stay cautious, and comply with any public health measures in place to prevent the spread of what remains a very contagious virus.
Liz Truss is planning to levy lower tax rates and strip out regulations in certain parts of the country picked by the government.
Readers, you need to get your heads around the implications of this extension to the “freeports” that Boris Johnson announced.
As with freeports these low tax, low regulation investment zones will probably end up relocating, rather than creating, economic activity and jobs. They are unlikely to lead to the sort of growth transformation the Truss Government needs by the election due in January 2025. It’s a beggar my neighbour strategy.
The rules surrounding these zones will be open to “gaming”. They are likely, therefore, to be accompanied by some significant unintended consequences. The ability of the affluent in society to “relocate” by outbidding local people on a whim, is an example. The rise in second homes we see locally is driven by a desire to have a holiday home in more scenic parts of the country. Seeking residency in an area to reduce personal tax liability might provide a similarly strong motive for a second/alternative residence.
If these zones are a natural extension of freeports, consider this.
Dartmoor and the South Hams are already included in the Plymouth freeport area, so obviously would be included in any “Plymouth Investment Zone”.
Is Liz Truss going to replicate the Northern Ireland border issue all over the country as we move in and out of each “investment zone”, between the “low tax regimes” and “high tax regimes”? Sounds divisive to Owl.
Liz Truss to cut taxes in certain parts of the country picked by the government
Jon Stone www.independent.co.uk
Liz Truss is planning to levy lower tax rates and strip out regulations in certain parts of the country picked by the government.
The prime minister is reportedly planning to badge the areas “investment zones” – and will claim that the approach could boost economic growth.
Businesses based in the handpicked regions will be able to ignore some environmental regulations and pay lower rates of tax.
And workers living there could pay personal income taxes and national insurance at reduced rates, the government-supporting Sun On Sunday newspaper reports.
Details of the plans are still said to be being worked out, but an announcement could come as early as chancellor Kwasi Kwarteng‘s emergency budget on Friday.
The plans to apply the tax cuts to particular areas of the country only may raise eyebrows because the government has previously come under fire for playing political favourites.
A previous policy, the Towns Fund, selected areas to benefit from a £1 billion pot of investment – but this was mostly funnelled into Tory areas.
An inquiry by parliament’s spending watchdog, the Public Accounts Committee, concluded last year that the selection process to benefit from the fund was “not impartial” and decisions were “politically motivated”.
39 of the 45 places to receive the first round of funding were represented by Tory MPs.
It is not clear which areas will benefit from the “investment zone” tax cuts or how they will be picked.
Mr Kwarteng, who was appointed by Ms Truss earlier this month, is set to use Friday’s emergency budget to reverse Rishi Sunak’s rises in corporation tax and national insurance contributions.
Other policies are expected to include lifting the cap on bankers bonuses, which limits payouts to twice a banker’s annual salary. The policy was intended to reduce the risk-taking associated with bonuses incentives, and so reduce the risk of another financial crisis.
12 places earmarked for this status
Andrew Sparrow www.theguardian.com carries a bit more detail:
Planning regulations will be relaxed in up to 12 places earmarked for this status, and taxes will be cut to incentivise investment.
The West Midlands, the Thames estuary, the Tees Valley, West Yorkshire and Norfolk are among the places where the new zones might be sited. According to the plans set out by Truss in the summer, in each area there will be a central region, where regulations and planning rules will be eased to encourage industrial, commercial and residential development, and a periphery where the planning rules will be streamlined for housing.
Liz Truss’s energy plans show the UK has effectively abandoned net-zero targets just three years after its world-leading commitment to cutting emissions, the government’s former chief scientific adviser has said.
Another example of the Tories demonstrating that they don’t see themselves in power for much longer. – Owl
Harry Cockburn www.independent.co.uk
A major new fossil fuels campaign, including lifting the ban on fracking and expanding drilling for oil and gas in the North Sea, has already been announced by the new prime minister’s administration.
But the drive for more oil and gas production was “completely at odds” with the UK’s legally binding net-zero target, said Sir David King, head of the Climate Crisis Advisory Group, who was chief scientific adviser to the government between 2000 and 2007.
Furthermore, it would bring large quantities of greenhouse gas-emitting fossil fuels to the market directly ahead of the 2050 deadline for reaching zero, he told The Independent.
He said the plans, announced last week by the prime minister’s new energy secretary, Jacob-Rees Mogg, were “extremely alarming”.
“We’re looking at a situation where the crisis is with us here today,” he said. “But we don’t recognise that when we say ‘let’s go ahead and start new fracking operations in this country’.
“It beggars belief. What it seems to show is that the leadership in the government does not understand the nature of the climate crisis.”
Mr Rees-Mogg, who has previously dismissed climate science as “alarmism”, said in a video on his second day in office that “we are lifting the moratorium on fracking. We will extract every ounce of oil and gas from the North Sea.”
During Ms Truss’s leadership campaign, she derided the role that renewable energy increasingly plays in the energy system, in particular solar power, which has become the “cheapest electricity in history”, according to the International Energy Agency (IEA).
But Sir David, who is the founder and chair of the Centre for Climate Repair at Cambridge, warned that the government’s revival of fossil fuels could backfire rapidly.
He said: “I fully agree with what the IEA is saying, which is ‘do not invest in new oil and gas recovery’.
“If we do invest in new oil and gas recovery, it will take a minimum of five years to get to the marketplace and more like 10-15 years, which is the average.
“In which case, they’re not dealing with the current crisis at all, and instead are investing in an operation that is likely to become a stranded asset.
“Quite frankly, it’s a policy that hasn’t been thought through in terms of climate change or in terms of the current climate crisis. It doesn’t attack either [issue].”
His assessment of the government’s position has been echoed by leading campaigning groups.
Doug Parr, Greenpeace UK’s policy director, told The Independent: “Sir David King speaks the truth. Most sensible countries realise that the economically rational course is to drive rapidly for zero emissions, because it boosts the whole economy and tackles the climate crisis and the cost of living crisis in one fell swoop.
“Truss’s current energy plans will do nothing for the economy any time soon, and will in fact create substantial stranded asset risks.
“Further, they accelerate climate breakdown, contributing to the deadly heatwaves and floods we see around the world, and do nothing to impact the soaring costs of energy that will leave households and the national overdraft in trouble for years to come.
“If Truss and Rees-Mogg continue on this course, it begs the question – whose interests are they serving?”
Sir David suggested the leadership of the country was using Russia’s war in Ukraine as an opportunity to expand the use of fossil fuels – even though doing so failed to address either the climate crisis or the energy crisis.
He said: “The immediate consequence of the Russia-Ukraine war is that energy prices have gone shooting up. The response to that [should be] to build more renewable energy – we can use an extension of an already successful operation.
“The opposite is to say ‘let’s use this as an opportunity to develop our oil and gas reserves’ – using the war as an opportunity to do this, knowing it has nothing to do with managing the short-term problems of the war.
“All of that indicates massive cynicism at the top of government. What they’re saying is ‘we’re not going to be in government in 2050, but we don’t believe in the net-zero target’.”
Friends of the Earth’s head of policy, Mike Childs, told The Independent that Sir David was “right to raise the alarm about the government’s enthusiasm for fracking and drilling more gas and oil”.
He said: “At best, it’s difficult to see how this enthusiasm for new fossil fuels is compatible with the prime minister’s commitment to deliver on the UK’s climate targets.
“At worst, it’s a sign that the new government is more interested in placating wealthy fossil fuel lobbyists than it is in tackling the mounting climate emergency and addressing the energy crisis for good.”
Energy experts have repeatedly called on the government to expand support for renewable energy technology and storage, implement a national insulation programme, invest in rolling out more heat pumps and halt investment in fossil fuel programmes.
The Department for Business, Energy and Industrial Strategy did not respond to The Independent’s request for comment.
According to Vince Cable in his new book “How to be a politician” there are two ways for an ambitious MP to get on:
Make some brilliant eye-catching intervention that gets everyone talking about you.
The other more common route is obsequiousness.
Looks like you have already chosen your route – Owl
Seven days is all the parliamentary time this Tory Government thinks is worth devoting to debating the problems this country is facing. Three of these will be next week to enable Liz Truss to conduct her “special fiscal operation”.
Could it be she wants to avoid scrutiny?
If the planned parliamentary schedule is followed, from 5:30 pm on Thursday July 21 to 2:30 pm on Monday 17 October, the House of Commons will have sat for nine days. These include the two days of special sittings to pay tribute to the late Queen.
(That’s seven days devoted to running the country in what the rest of us would consider to be twelve working weeks in round numbers)
Meanwhile all the effort seems to be devoted to abstruse debates on subjects only of interest to her right wing such as:
Should she prioritise effort on: cutting taxes, oxford commas, and bankers bonuses.
Or following the deputy Prime Ministers, Thérèse Coffey, edict:
Should she prioritise effort on: cutting taxes, oxford commas and bankers bonuses.
(Do they know what they are doing? – Owl)
First rise since 2015
The cost of residents’ parking permits is set to rise under plans revealed by Devon County Council.
Ollie Heptinstall, local democracy reporter www.radioexe.co.uk
If approved, the price of permits will increase to £35 for a property’s first vehicle, a rise of £5. Second permits will then be priced higher depending on the vehicles’ carbon emissions, while extra permits on top of that will cost £65.
All residential permits currently cost £30; a price the council says hasn’t increased since 2015. The price for a business permit for one vehicle is also going up to £35.
Explaining the move, which does not apply to Plymouth and Torbay, the county council said the consumer price index has increased approximately 19.5 per cent since the last rise – more than the planned base permit increase of approximately 17 per cent.
Under the proposed new scheme, which follows a public consultation, the only residential permits that will be priced according to a vehicles’ carbon emissions will be the second one in a household.
They will be £45 for electric and low-emitting vehicles in Band A (less than 100g/km), £55 for Bands B – K (101-225g/km) and £65 for the worst emitting vehicles in Bands L – M (226+ g/km)
A property’s first permit will be £35 irrespective of carbon emissions, as will the £65 price for a third vehicle or any additional ones.
Permits will also be required for motorcycles (first permit £35, second permit £45, extra permits £65).
Once the new scheme has been adopted all future permits will be issued virtually, which the council says will benefit the environment and see a reduction in waste.
It claims the new pricing structure will “positively affect a reduction in consumption of fossil fuels in private vehicles by encouraging the uptake of fuel efficient/low emission vehicles and discouraging multiple car ownership.
“It is hoped more [people] will consider changing the mode of travel or adopt other sustainable modes of travel.”
Other changes to the permit scheme include:
A report, due to be presented to a meeting of the cabinet later this month – rescheduled because of the queen’s death – also provides information on how Devon’s system compares to neighbouring local authorities.
Plymouth and Torbay currently charge £30 each for residents permits, with a maximum of two per household, while the prices differ completely in Cornwall and Somerset.
A first Cornish household permit costs £50 and £75 for the second. Only two are allowed per household.
Somerset’s scheme is based on the carbon emissions of vehicles for the first permit. They cost £60 as standard, but are discounted by either 100 or 50 per cent if a vehicle emits less than 100g or 110g/km. Second permits cost a flat fee of £100.
Devon’s ruling cabinet will consider and vote on the changes at a meeting on Monday 26 September.
Markets think the Bank of England will unveil the biggest hike in interest rates for over three decades when its decision makers gather for a delayed meeting.
The Monetary Policy Committee (MPC) is expected to increase rates by 0.75 percentage points to 2.5%.
It would be the highest interest rate that the UK has had since the financial crisis. In December 2008 the base rate was slashed from 3% to 2%.
It would also be the highest single increase to interest rates since 1989.
Next week’s Bank of England meeting is crucial
“Investors think the most likely outcome is that the MPC will increase the Bank rate by 75bp (0.75 percentage points) on Thursday,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
But he said that economists are expecting a smaller rise, to 2.25% – the same 0.5 percentage point change as the Bank’s last hike.
“For a start, hawkish surprises from the MPC have been far less common than dovish ones over the last year,” he said.
“In addition, Governor Bailey openly referred to a 50bp hike ahead of the August meeting, but has not given markets a nudge to price-in a 75bp hike.
“We think that the MPC still will deem a 50bp increase to be consistent with its pledge to act ‘forcefully’, if it sees signs of more persistent inflationary pressures.”
ING economist James Smith said that the Bank of England will have to react to recent falls in the price of the pound. Sterling hit a new 37-year low against the dollar on Friday.
“Next week’s Bank of England meeting is crucial,” he said.
“It will tell us not only how worried policymakers are about the slide in sterling and other UK markets, but also how the Government’s decision to cap household/business energy prices will translate into monetary policy.”
“We narrowly favour a 50bp hike on Thursday, taking the Bank Rate to 2.25%, although 75bp is clearly on the table and we would expect at least a couple of policymakers to vote for it.”
He said that rates will likely rise again in November and December, hitting 3% by the end of the year.
The decision to hike interest rates is a bid to keep inflation under control. It is the best tool that the Bank of England has to steer inflation – currently at 9.9% – back to its 2% target.
But the decisions will also have major impacts on people’s finances, not least those with mortgages who will need to start paying more for their home loans.
The MPC was originally set to announce its decision on Thursday September 15, but delayed this for a week due to the Queen’s death.
This is reported as costing £24m within the county.
Stand up all those, mostly Conservatives, who backed the closure of the community hospitals. – Owl
Edward Oldfield www.devonlive.com
Plans are being put in place to open more beds at Devon hospitals to head-off a winter healthcare crisis after one of the busiest ever summers for the NHS. An extra £5million is being spent in Plymouth which alongside Cornwall is among the worst in England for ambulance handover delays.
Some of the money will go on 41 extra beds at Derriford Hospital and community hospitals to ease the pressure on the emergency department. In the rest of Devon, £19million is being spent on creating extra capacity in the NHS for the winter. That includes £6million on creating 37 extra beds and spaces at Torbay Hospital, 18 at the Royal Devon & Exeter Hospital, and 11 at North Devon District Hospital in Barnstaple.
The extra £24million has been secured from national funding to tackle the pressure across the NHS in Devon. More patients will be treated at home in so-called ‘virtual wards’, where support from clinical teams is provided remotely through the use of apps, platforms and devices which can monitor pulse, heart rate and breathing.
The £5million project will create three virtual wards covering Plymouth, Torbay and South Devon, and East and North Devon, creating the equivalent of around 75 hospital beds. The first of the schemes will go live in December 2022, and will be scaled up through to March 2024.
Patients will be given a choice of being an inpatient or receiving treatment at home, and their home circumstances and available support will be taken into account.
Devon will see £9.8million invested in the hospital discharge process, including for care hotels, agency support, rehabilitation care and support, and for patients with complex dementia. It includes extra capacity for mental health, on top of £219,000 already allocated for winter pressures.
An extra £900,000 is being invested in the handover of integrated community urgent care services to a new provider, Practice Plus Group, in October.
A communications strategy will focus on persuading people to contact the 111 service before going to an emergency department, take up the flu and Covid vaccines, use pharmacies, and use online services.
A report outlining the measures to Devon County Council said: “Devon’s system remains under sustained pressure due to a range of complex and multi-faceted issues – including the pandemic, increased demand, staff shortages, and vacancy rates in health and adult social care providers.
“The cost-of-living crisis is also impacting on health and social care services, not only for our population and our staff, but also in the care market. Staff nationwide have faced one of their busiest summers ever with record numbers of Emergency Department attendances and ambulance services facing extreme pressures, high demand for social care and mental health services, and the impact of another wave of COVID-19.
“As a result, bed occupancy levels in hospitals are high, people are staying in hospital for longer than they need to, and ambulance handover delays are increasing. Ultimately, it means many patients aren’t getting the care they need in a timely way. The past two years has seen significant pressure upon our urgent and emergency care (UEC) services. The workforce is stretched and exhausted, yet it continues to deal with high levels of demand against a backdrop of constraints which affect our ability to treat people.”
The rise in ambulance handover delays at hospitals has been blamed on shortage of beds and delayed discharges to social care. Figures at the start of September showed that in Plymouth, Exeter and Torbay, around one in 10 beds was occupied by a patient who was fit to leave, but was waiting for care to be arranged. In North Devon the proportion was 27 per cent – more than a quarter. GPs are seeing more patients and more complex needs, with appointments up by 8 per cent in the past year. Meanwhile the vacancy rate in the NHS has increased in line with the national picture. In July, there were more than 4,500 vacancies in health and social care in Devon.
National ambulance data for July showed record calls to the most serious incident, and the highest level of patient handover delays.
Last week a senior doctor warned that the NHS is facing a winter crisis as figures show 1,200 emergency patients in Devon waited more than 12 hours for a bed in August. Dr James Gagg said the latest data from the region’s emergency departments was “shocking”, with large numbers of patients “facing extremely long waiting times”. He called on MPs and councils to acknowledge a “looming crisis” facing the health service in the winter and to “act now before it is too late”.
The NHS in Devon says it is facing a “challenging” budget for this financial year, with a need to find savings of £142million. The county council, which funds social care, was forecast in July to face an overspend of £40million, including £6million on adult social care.
The proposals in the winter winter plan after learning from last year, when the health and care sector faced “severe and sustained pressure” due to an increase in demand and the impact of the pandemic.
Brexit is hitting the UK export market, according to data from HMRC.
This comes just as Kwasi Kwarteng has told Treasury officials to adapt to a new approach focused on boosting annual economic growth to 2.5 per cent.
One might ask what contribution overall government policies are supposed to play in this dash for growth – Owl
Joe Mellor www.thelondoneconomic.com
The number of UK businesses exporting goods to the EU fell 33 per cent to 18,357 in 2021, from 27,321 in 2020.
Michelle Dale, a senior manager at accountancy firm UHY Hacker Young, pointed out the fall is due to the extra red tape UK businesses must now comply with when exporting to the EU.
“Businesses are not getting enough support from the Government to navigate the post-Brexit trading minefield,” she said, reports City A.M.
“A lot of SMEs can’t afford professional advice to cope with Brexit-related red tape. Many are likely to have decided trading with the EU is not worth the cost,” Dale added.
“Fewer UK companies exporting to the EU will result in lost opportunities for growth and expansion in Europe.”
EU receives UK’s response to legal threats
Meanwhile, the European Union is considering its next steps after receiving the UK’s response to legal threats over the failure to comply with the post-Brexit Northern Ireland Protocol.
Despite politics as normal being paused while the nation mourns the Queen’s death, the Government responded to the action ahead of Thursday’s deadline.
The bloc had requested a response to its raft of infringement proceedings over the UK’s failure to comply with the rules before the end of the day.
European Commission spokesman Daniel Ferrie said: “I can confirm we have received a reply from the UK. We will now analyse the reply before deciding on the next steps.”
What the UK’s response contained was unclear, but the Government was expected to set out how it believes that no operational changes on how the protocol works are required.
European Commission president Ursula von der Leyen will be in Westminster for the Queen’s funeral on Monday.
It is unclear if she will be meeting Prime Minister Liz Truss while in London, although Ms Truss is expected to hold some talks with political leaders during their visits.
There have been unconfirmed suggestions that Ms Truss will speak to Irish Taoiseach Micheal Martin on the margins of the funeral amid tensions over the protocol.
