Budget labelled a ‘missed opportunity’ and ‘austerity’ for Wales

Stephen Price

Today’s Budget has been labelled a ‘missed opportunity’ with little good news for Wales, with Welsh politicians criticising the Labour government for continuing austerity measures brought in by the Conservatives.

Rachel Reeves announced £40 billion a year in extra taxes as she increased borrowing and spending to “rebuild Britain”.

The Chancellor’s plans will see the tax burden reach a historic high, while borrowing increases by an average £32.3 billion a year as spending increases by around £70 billion annually over the next five years.

Ms Reeves said the measures were necessary to address the “black hole” in the public finances left by the Tories while pumping billions into schools and hospitals.

“Sidelined”

Plaid Cymru Treasury spokesperson, Ben Lake MP said: “Today, the Chancellor missed an opportunity to chart a bold new path after 14 years of austerity. Regrettably, the Budget falls short of the transformative change that was promised during the General Election.

“Labour promised two governments working together, but it appears the Welsh Government was sidelined yet again by the UK Government, as there is little good news for Wales.

“Despite promising that those with the broadest shoulders would pay their fair share, changes to employers’ National Insurance will disproportionately hit businesses employing lower paid workers, which will have an impact on people across Wales.”

He added: “Furthermore, changes to agricultural property relief will undermine the family farm model that is at the heart of Welsh agriculture.

“The uplift to Wales’ block grant will not rebalance Wales’ fiscal settlement. Welsh councils alone face a £559 million budget gap in 2025-26. Despite promising to ‘get to grips with HS2’, the Chancellor failed to deliver the billions owed to Wales. Additionally, by keeping cuts to the welfare budget planned by the Conservatives, failing to help pensioners keep warm this winter or bring an end to the two-child cap, this will still feel like austerity to many.

“Plaid Cymru will scrutinise every line of Labour’s Budget because Wales deserves more than broken promises.”

Coal tips

It has also been announced that £25m will be allocated to start to clear up coal tips in Wales.

South Wales East MS, Plaid Cymru Deputy Senedd Leader Delyth Jewell said: “Westminster has at long last promised money for coal tip safety, but the amount promised must be increased. It has been assessed that it would cost £600 million to clear up coal tips completely.”

“Coal tips are the legacy of how our communities were exploited. Our valleys should never have been saddled with them, let alone have to pay towards making them safe.

“There is still no clear acknowledgement of the responsibility they carry for this legacy, which predates devolution 

“Coal tips are a legacy of how our communities were exploited.  They stand as daily visual reminders of the betrayal and neglect suffered by valleys communities over generations, both during the time of coal mining and since.  The debt owed to our communities is substantial, and the tips have for too long ensured that the shadows of the past remain over us.”

Welsh Lib Dems

The Welsh Liberal Democrats also singled out the “billions owed to Wales from HS2”, along with the impact on Welsh farming.

Responding to the publication of the UK Government budget, Welsh Liberal Democrat Deputy Leader David Chadwick MP said: “This budget fails to offer an ambitious vision for Wales that would mark a long-term investment in its future, it punishes small businesses and will be a disaster for family farms.

“Labour has failed to deliver the billions owed to Wales from HS2, yet constituents like mine are facing deep cuts in their rail services.”

“Meanwhile, the Chancellor has chosen to increase taxation for the small businesses that are the lifeblood of the Welsh economy instead of taking aim at the enormous profits of the banks, oil and gas giants and big tech.

“The Chancellors Family Farm Tax risks being a death knell for local farmers who have already faced attacks on their livelihoods by the Welsh Labour Government, who have shown time and time again they have no understanding of the rural economy or the work that goes into making sure the public have food on their plates.”

“Broken promises”

Rishi Sunak accused Rachel Reeves of delivering a Budget containing “broken promise after broken promise”, adding: “Working people will pay the price.”

The outgoing Conservative leader claimed Chancellor Ms Reeves has decided to “let borrowing rip” and tried to “cover up that splurge by fiddling the fiscal rules”.

Mr Sunak added that “never in the history of our country will taxes be higher than they are under this Labour Government” due to the Budget.

He also accused Ms Reeves and his successor as prime minister, Sir Keir Starmer, of “damaging the British economy for political purposes” by their rhetoric and claimed it was “nonsense” to suggest Labour had inherited difficult circumstances.

Speaking at the despatch box for the final time, Mr Sunak told Ms Reeves in the Commons: “Labour’s claims about their inheritance are purely ludicrous. These are her choices. So, stop blaming everyone else and take responsibility.”

He added: “Her decision to let borrowing rip make a total nonsense of her claims on the state of the public finances, because if they were truly in such a dire strait, as she has said, what we should have seen today was a significant reduction in borrowing to repair them, not the splurge that she has just unleashed.”

Mr Sunak said that borrowing and debt was due to be higher in every year of the forecast after the Budget.

The former chancellor said: “Now she has tried to cover up that splurge by fiddling the fiscal rules.”

Warnings

Mr Sunak said the Conservatives had repeatedly warned during the general election that Sir Keir and Ms Reeves were “not telling the truth” when ruling out “tax surprises”.

He said: “Today the Chancellor and the Prime Minister have done what they were always planning to do, but chose to keep hidden from the British people.

“Far from reducing taxes, as a result of today’s Budget never in the history of our country will taxes be higher than they are under this Labour Government.”

Mr Sunak went on to claim Labour would be taxing people’s job, business, home and savings, adding: “You name it, they will tax it and that is exactly what they have done.”

In his final remarks, Mr Sunak said: “The Prime Minister has talked relentlessly about trust, but today’s Budget reveals above all that the Labour Party did not tell the truth.

“They said they wouldn’t fiddle the figures, they have. They said they wouldn’t increase borrowing, they have. They said they wouldn’t raise taxes on working people, they have.

“Broken promise after broken promise and it is the working people of this country that will pay the price.”

Labour MPs waved goodbye to Mr Sunak after he concluded his final remarks from the despatch box before stepping down as Tory leader.

Today’s budget was a smash and grab – a betrayal of the people of Wales.

The National Insurance rise is a tax on Welsh jobs, hitting small and medium businesses that are the lifeblood of our economy.

It will mean lower wages and put jobs at risk – hitting Welsh workers.

On…

— Andrew RT Davies (@AndrewRTDavies) October 30, 2024

Welsh Conservative leader, Andrew RT Davies took to X, writing: “Today’s budget was a smash and grab – a betrayal of the people of Wales.

“The National Insurance rise is a tax on Welsh jobs, hitting small and medium businesses that are the lifeblood of our economy.

“It will mean lower wages and put jobs at risk – hitting Welsh workers.

“On top of that, vulnerable Welsh pensioners were hit too, as their Winter Fuel Payments were scrapped.

“Let’s be clear – this was a political choice.

“Ignore the Labour lies, there is no “black hole”. Labour has chosen to spend tens of billions on backroom deals with its paymasters, and on overseas climate aid.

“These broken promises will not be forgiven.”

Wales Greens

Responding to today’s UK budget, Wales Green Party has demanded investment in infrastructure, fair funding, and reversing austerity for Wales.

Responding to the Chancellor’s plans, Anthony Slaughter said: “Whatever the Chancellor claims, this budget means austerity will continue for Wales. People voted for public services to be restored but Labour are not living up to their promises of change.

“With public services at breaking-point after 14 years of Tory cutbacks, Labour had the opportunity today to reverse austerity and give people hope. Instead they have shied away from properly taxing wealth. The rest of us will now suffer as our NHS and public services remain in crisis.

“Our NHS is crumbling and needs billions in investment. The money needed to do this exists and could be raised with a wealth tax on the super-rich, but Labour refuses to stand up to power.”

He also called for fair funding for the Welsh Government, saying: “The people of Wales have been robbed of billions in consequentials from HS2.. Our economy continues to suffer under poor transport infrastructure, but Labour has again let the Welsh public down by refusing to re-classify this as an England-only project.

“Fair funding for Wales means paying up what we’re owed for HS2, devolving the Crown Estate, and replacing the Barnett formula with a fair, needs-based model.

“During the election Labour claimed being in government on both ends of the M4 would transform Wales. Starmer’s budget has let down communities across Wales who believed that voting for Labour would bring real change.”

“We need Greens in our Senedd, in Westminster, and on local councils to stop Wales being taken for granted, and create a fairer society for us all to live in.”

Welcome

The Welsh Local Government Association (WLGA) has welcomed today’s budget.

Responding to the UK Government’s Budget announcements, Councillor Andrew Morgan OBE, WLGA Leader said: “The Chancellor has delivered a Budget designed to ‘fix the foundations’ of the UK economy set against a challenging financial landscape. After over a decade of austerity, council-run local services are creaking at the seams.

“I warmly welcome the new UK Government’s commitment to ‘invest, invest, invest’. With sustainable, long-term investment, councils can help to deliver the ambitions of both UK and Welsh governments; with investment in local preventative services, such as social care, councils can help to keep people well and healthy at home, and ease hospital waiting lists and the burden on health services.

“With extra funding for schools and education, councils can improve the life chances of children and young people and prepare the workforce of the future. With money for regional and local economic development, councils can contribute to spur much-needed economic growth and create thriving communities.

“This Budget represents a step-change in tone from the UK Government which should be welcomed by all those who cherish their local services. It is only with a strong partnership between councils, Welsh and UK governments that we can work to deliver economic growth, achieve net zero, secure safer streets, break down barriers to opportunity, and create caring, healthier communities across Wales.

“We look forward to continue engagement with the Welsh Government to work towards achieving a settlement which recognises councils’ key contribution to securing national priorities.”