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£45bn Mini-Budget tax cuts money could have ‘levelled-up’ Wales, says think-tank

29 Sep 2022 3 minute read
Chancellor of the Exchequer Kwasi Kwarteng leaves 11 Downing Street . Picture by Aaron Chown / PA Wire

Measures in Friday’s ‘mini-budget’ are a ‘generational missed opportunity,’ and the ‘eye-watering’ £45bn in tax cuts could have been used to truly ‘level-up’ Wales, think-tank the Institute of Welsh Affairs (IWA) has said.

“We believe that communities across Wales desperately need government investment in the things that were lost in the austerity era such as bus routes, community centres, and hubs on their high street such as libraries,” the IWA said.

“New ideas such as government-backed remote working hubs on high streets can also help to rejuvenate people’s places. Public services are also struggling under the strain of an ageing population, shrinking working-age population, and a decade of below real-terms funding increases and pay rises.”

The IWA stressed the ‘terrible impact’ of the mini-budget has had on the financial markets, which is “already intruding on people’s lives, with first-time buyers seeing their mortgage offers withdrawn as banks reel from the impact of panicking markets”. 

“However, perhaps the greatest regret is the opportunity cost of this investment. The IFS [Institute for Fiscal Studies] estimates that the Chancellor’s tax cuts will cost £45bn a year, an eye-watering amount that, if invested wisely, could truly ‘level up’ Wales and other nations of the UK in a tangible, visible manner.” 

‘Badly-targeted cut’

Investment could have been made in things that actually spur long-term increased productivity and economic growth, the IWA said. 

“Instead, the UK Government has chosen to row back on long-term stability for the NHS and other public services via the NI rise, to pursue an expensive and badly-targeted cut in the basic rate of income tax, and a wholly unjustifiable tax cut for those on the highest incomes at a time when many people in Wales are struggling to make ends meet.  

“The annual £45bn cost of these tax cuts could change the course of the country and many people’s lives. The UK Government should reconsider its direction and seek to prioritise investment in a strong, green, and successful economy for the United Kingdom rather than tax cuts that disproportionately favour the wealthiest.”

‘Economic fallout’

The IWA’s Auriol Miller said: “The economic fallout from the mini-budget speaks for itself. The priorities of all the governments of the United Kingdom should be delivering for people and investing in a public realm that was so critically eroded during the austerity era.

“An eye-watering £45bn annual spend could be put to much better use than tax cuts that disproportionately favour the wealthiest. ”

Chancellor Kwasi Kwarteng’s economic policies have attracted fierce criticism, most notably from the International Monetary Fund, and the Bank of England have had to intervene to steady a part of the financial markets.

Parliament must be recalled after the Bank of England intervened to offset UK economic instability caused by “right-wing economic fantasists,” Plaid Cymru has said.

Mini-budget defence

Prime Minister Liz Truss has insisted the Government’s tax-cutting measures are the “right plan” in the face of rising energy bills and to get the economy growing despite market turmoil sparked by the Chancellor’s mini-budget.

Welsh Secretary Robert Buckland has urged people to remain “calm” amid the turmoil sparked by the Government’s mini-budget announcement.

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1 year ago

If I win the lottery my family will be sorted. If, but, that’s all we get. Groups can write as many reports and come to as many conclusions as they like, but the reason we are the poorest country in , not only the UK, but most of Europe is, we have never had the funding we need from London, and we never will. What makes people think, that after more than 500 years we will be looked upon any differently next week, to what we have been. These reports , in my mind, are worthless, its like watching “Bullseye”,… Read more »

Argol fawr!
Argol fawr!
1 year ago

A quote from the Guardian today…

“And of course, Johnson has since been replaced by someone who is shaping up to be – though it hardly seems possible – even worse, albeit in a less showmanish and more stunned-halibut way.”

I guess (hope) each tory mp/am in Wales is, this moment, eyeing up wholly different careers.

1 year ago

Wales is the furthest thing in the minds of Westminster. Anyway, if they had a spare £45bn they would rather burn it than give us the money.

Mab Meirion
Mab Meirion
1 year ago

A cold call from this chap has apparently made most people in these islands £1,000 worse off…now that is some scam…

Y Cymro
Y Cymro
1 year ago

The English extremist Conservative party have no intention of ever levelling-up Wales. The reality is they’ve weaponized poverty and want to limit any national aspirations we Welsh have with the intention of keeping us on our knees. And the backward centrist attitude applies to Unionist Keir Stasi’s Labour party also who are equally culpable in Wales woes. And like Liz Truss’s idocracy are overly hostile to further powers being devolved to Wales requested by Welsh Labour like Policing, Criminal Justice etc…. The evidence to back up my claims. Just look at all the past manifesto broken pledges & promises made… Read more »

1 year ago

We are calm, Bucky dear. Trouble is, the markets are frantic! So now we calmy want Independence to rescue our country from you pathetic economic loonies!

Last edited 1 year ago by I.Humphrys

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