
People terrified by benefit reforms, says Labour politician
A Labour politician has said people in his constituency are "terrified" about the chancellor's decision to tighten the criteria for claiming sickness and disability benefits.Alun Davies, Member of the Senedd for Blaenau Gwent, said residents affected by disability and poverty were already struggling "in making ends meet". In Wednesday's Spring Statement, Rachel Reeves announced a number of benefit changes, including tightening qualification rules for Personal Independence Payments (Pips) - the main disability benefit - claimed by more than 250,000 people in Wales."It scares the most vulnerable people in our society, and that's deeply distressing to see," said Davies.
"What we need to do as a Labour Party is to address the fundamentals in the economy," he told BBC Radio Wales' Sunday Supplement."We're seeing at the moment taxation increasing because the economy is failing."People want to work and people want to live decent lives and it's the role of government, surely, to help people do that," said Davies whose Blaenau Gwent constituency has the highest proportion of disabled people in Wales, according to census data. In her address to MPs on Wednesday, Reeves said "it can't be right" to "write off" an entire generation who are out of work and improperly using Pips.There are two elements to Pips – a daily living and a mobility component – and under the government's proposals, assessments for the daily living part will be tightened, a move the official forecaster – the Office for Budget Responsibility (OBR) – says will affect around 800,000 people.The chancellor also confirmed health-related universal credit for new claimants - which was already due to be halved from April 2026 under a package announced last week - would be frozen at its new lower level of £50 per week until 2030.A Department for Work and Pensions assessment found 3.2 million families across England and Wales would be worse off as a result of the changes, with 250,000 more people pushed into relative poverty.The UK government has said the reforms are aimed at modernising the welfare system, and getting many of those reliant on assistance back into work.On Friday, Wales' First Minister Eluned Morgan refused to back the chancellor's welfare cuts, telling the Senedd she wanted to "reserve my position" until she knew what the impact would be on Wales.Morgan also confirmed she was waiting for a response from Work and Pensions Secretary Liz Kendall to her request for a Wales-specific impact assessment and said she was now seeking a meeting with her.
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Business News Wales
27 minutes ago
- Business News Wales
Mixed Reaction to UK Government Spending Review
Business leaders have given a mixed reaction to the UK Government Spending Review, which included Welsh rail investment worth at least £445 million . The Federation of Small Businesses (FSB) said it was 'not the business-focused day' small businesses had hoped for, whilst calling on the Welsh Government to use local growth funding announced in the Spending Review to boost the business support system. The CBI described the Spending Review as a 'downpayment on hardwiring the growth mission into government priorities', adding that the 'litmus test now will be following through on delivery in partnership with industry at pace'. The UK Government said the rail investment announced by Chancellor Rachel Reeves would invest in both North and South Wales, adding that it would fix level crossings, build new stations, and upgrade existing lines. It said the rail upgrades would specifically link centres of advanced manufacturing excellence in North Wales and improve connections between Cardiff and Bristol. Monmouthshire County Council said it was 'delighted' with the rail announcement, adding that its communities 'have continued to live with the impacts of congestion on the M4 with no viable public transport alternatives'. It said the upgrades to the South Wales Mainline will increase train service frequency and the provision of five new railway stations – including Magor Walkway, which it said was a testament to the tireless work of the MAGOR group (Magor Action Group on Rail). Mary Ann Brocklesby, leader of Monmouthshire County Council, said: 'This is a hugely welcome investment that recognises the urgent need to upgrade our transport network here in Wales. Magor Walkway Station is a project with strong community backing from local councillors, residents, and campaign groups. I'll continue working with all partners to make sure Monmouthshire sees the benefit of this long-overdue rail project.' The Welsh Government will receive the largest settlement in real terms since devolution in 1999, the UK Government said, with an average settlement of £22.4 billion per year. Secretary of State for Wales Jo Stevens said: 'This UK Government is investing in Wales' future and driving economic growth across the country. 'We promised we would deal with the historical under-investment in Wales' rail network and the funding announced today in this Spending Review shows we are delivering on that pledge. 'Along with a record financial settlement for Welsh Government to improve public services, £118 million more to help keep coal tips safe and investment in growing industries like aerospace, we are backing Wales' potential and delivering for working people.' The Chancellor also announced that the British Business Bank's total financial capacity will be increased to £25.6 billion, which will enable a two-thirds increase in investments to around £2.5 billion each year. The British Business Bank said this investment is expected to crowd in tens of billions of pounds of private capital. Louis Taylor, CEO, British Business Bank, said: 'We welcome today's announcement by the Government, which is a strong endorsement of the British Business Bank's 10-year track record, market access and capabilities, including our position as the largest investor in UK venture and venture growth capital funds and the most active late-stage investor in UK life sciences and deeptech. 'To deliver the Government's growth mission it is critical that our most promising entrepreneurs can access the finance they need to grow their businesses, no matter what their background or where they are located.' Tina McKenzie, Policy Chair of the FSB, said: 'Small businesses will be wondering when they will feel the benefits of today's Spending Review. It was not the business-focused day they had hoped for. 'As spending allocations were announced, decisions over how that money would support small businesses were not included. Increased Statutory Sick Pay came without help for small businesses to afford it; extra money for housing and defence came without a commitment to include small firms in the supply chain; new energy efficiency funding for households came without equivalent help for small business premises. 'The one major bright spot for small firms today was the significant increase in resources to the British Business Bank, which FSB campaigned for in advance of today's statement and which we welcome. This should see far more finance flowing to local businesses up and down the country. 'With headline departmental funding allocated, the challenge now passes to each and every government department to be strategic with their spending over the next three years – using every taxpayer pound to get the most value, stimulate the economy, and spread jobs and growth. SMEs should get a far greater share of public contracts, and big businesses which treat their smaller suppliers poorly should be banned from winning them. 'Small business confidence is already languishing at levels comparable to the energy bills crisis, while job numbers in small businesses are falling fast, so bold, concerted action is needed. You can't grow the economy and tax revenues without growing small businesses. 'Small firms were not the focus today, but the second half of 2025 now becomes a crunch period for SME-focused growth reforms. Ministers must buckle down on this over the summer and through to the autumn, putting small businesses at the heart of the Industrial, Trade and Small Business Strategies. This includes addressing business rates, Employment Allowance expansion and Statutory Sick Pay in the autumn Budget, and proper legislative reform in the King's Speech. 'The benefits will only come if the Government takes these challenges seriously through to the autumn.' John Hurst, FSB Wales Chair, said: 'Small businesses in Wales continue to face relentless pressure from rising employment costs, ongoing changes to employment legislation, and sustained high energy bills. 'The Welsh Government must now actively back our small businesses by using the local growth funding announced in the Spending Review to boost our business support system, fostering a dynamic ecosystem that encourages entrepreneurship and empowers Welsh business owners to innovate, invest, and grow.' Russell Greenslade, Director, CBI, Wales, said: 'Today's Spending Review signals a downpayment on hardwiring the growth mission into government priorities. Against a challenging backdrop, the choice to prioritise investment in clean energy, R&D, as well as delivering a much-needed boost to transport in Wales, and infrastructure, is the smart play that will raise the long-term ceiling of the economy. The litmus test now will be following through on delivery in partnership with industry at pace. That must be underpinned by a comprehensive strategy for driving investment in adult skills and addressing high energy costs, which were missing from today's announcement. 'The Chancellor's announcement made clear that Wales has the industries of tomorrow. From solar power to battery technology, net zero and renewables to semiconductors helping to power AI. The additional budget increase was modest, but this is understandable given the difficult economic context. 'R&D investments by the government will hopefully see projects from our key sectors make the impossible possible. We would have liked to have seen a more adaptive growth and skills fund geared to minimise apprentices leaving early due to high living costs. Overall, there were positive announcements in the Spending Review. It is now up to local firms and government to enter the bidding processes they are so good at and win that funding for Wales. 'CBI Wales looks forward to working closely with the Welsh Government on the welcomed allocation of additional funding from the UK Government. Our goal is to help reduce the high burden of costs currently facing our businesses in Wales. By doing so, we aim to unlock growth and create more jobs across the country – ensuring the Welsh economy remains resilient and competitive for the future.' Ann Watson, CEO of Skills Charity Enginuity, which promotes skills in the engineering and manufacturing sectors, broadly welcomed the Spending Review. She said: 'Today's Spending Review sends a welcome signal of government support for the UK's priority industrial sectors, with significant investment announced for clean energy, defence and transport. This increase in capital investment will help create demand across the UK's industrial supply chains, providing SMEs with a confidence boost to realise the Government's ambitious economic and decarbonisation goals. With fiscal parameters now in place, the crucial next step is a comprehensive Industrial Strategy that provides clarity, detail and meaningful policies to set a concrete vision for the future of UK industry. 'Enginuity is also pleased to see the Chancellor acknowledge that achieving growth requires investment in skills, with an injection of £1.2 billion of additional investment per year by 2028-29 into the skills system. Its impact will depend on allocation and execution and will no doubt hinge on further details due to be announced in the forthcoming post-16 strategy.' The Tidal Range Alliance (TRA) warned of a 'glaring blindspot' in the UK Government's high-level energy ambitions. It said that while the focus on future energy investment was welcome, it believes there is a 'major lack of risk evaluation, mitigation, and no credible contingency planning'. Robin Peters, Tidal Range Development Lead for the TRA, said: 'The strategy is bold but is dangerously exposed. The focus and future investment in low carbon technologies is to be applauded, but hydrogen fired generation, carbon capture and new nuclear are all high-risk in terms of technology readiness, supply chains, and delivery timelines. 'That risk is being pushed into the market, without the Government retaining control or providing a credible Plan B. 'Tidal Range technology is the Plan B and should be in the mix now. It is a civil infrastructure technology with predictable output, low-risk delivery, and decades of successful generation from existing schemes in France and South Korea. 'Why it has been omitted from the Government's strategic investment plans is not only baffling but a major energy cause for concern.'


The Independent
32 minutes ago
- The Independent
UK economy shrinks by more than expected in April
The UK economy saw the biggest monthly contraction for a year-and-a-half in April in a setback to Chancellor Rachel Reeves. The Office for National Statistics (ONS) said that gross domestic product (GDP) fell by 0.3% in April, compared with growth of 0.2% the previous month and marking the biggest contraction since October 2023. It was also worse than the 0.1% contraction expected by most economists. Ms Reeves acknowledged that the latest GDP figures were 'clearly disappointing' but insisted her spending review would help deliver growth. The Chancellor said: 'Our number one mission is delivering growth to put more money in people's pockets through our plan for change, and while these numbers are clearly disappointing, I'm determined to deliver on that mission.' ONS director of economic statistics Liz McKeown said declining output in services and manufacturing sectors both dragged on overall GDP in April. She said: 'However, over the last three months as a whole GDP still grew, with signs that some activity may have been brought forward from April to earlier in the year.' She added: 'Both legal and real estate firms fared badly in April, following a sharp increase in house sales in March when buyers rushed to complete purchases ahead of changes to stamp duty.'


Telegraph
43 minutes ago
- Telegraph
Live Economy shrinks in blow for Reeves
Britain's economy shrank at the start of the second quarter, official figures show, in a blow for the Chancellor after her spending review. UK gross domestic product (GDP) contracted by 0.3pc during the month, according to the Office for National Statistics (ONS). This was worse than analysts' fears that the economy would shrink by 0.1pc and follows a 0.7pc expansion during the first three months of the year. The data covers the month when Donald Trump launched his so-called 'liberation day' tariff onslaught which threatened to upend global trade. ONS director of economic statistics Liz McKeown said: 'After increasing for each of the four preceding months, April saw the largest monthly fall on record in goods exports to the United States with decreases seen across most types of goods, following the recent introduction of tariffs.' The figures come a day after economists warned that Britain faces tax rises in the autumn after Rachel Reeves unveiled her spending review. The Chancellor has made growing the economy one of her key missions as she battles to shore up the public finances. An expanding economy would mean that she is better able to pay off the nation's debt and would improve living standards. Ms Reeves said: 'Our number one mission is delivering growth to put more money in people's pockets through our Plan for Change, and while these numbers are clearly disappointing, I'm determined to deliver on that mission.'