Chancellor urged to provide ‘fair funding’ for Wales ahead of autumn statement

Finance Minister Rebecca Evans has urged the UK Government to provide extra help to support vital public services and provide fair funding for Wales in next week’s Autumn Statement.

Speaking as the Chancellor finalises the Autumn Statement, which will be delivered on Wednesday, the Minister also urged the UK Government to recognise the need for additional investment in coal tip safety and rail infrastructure in Wales.

She said: “We are experiencing extraordinary pressures on our budget as a result of prolonged high inflation, together with the toxic combination of more than a decade of austerity and the ongoing impact of Brexit.

“All public services are grappling with incredibly difficult decisions and the NHS and local authorities are reporting extreme challenges across their budgets with significant service pressures in health, social care, education, and homelessness.

“There will be a significant impact on the immediate future of our vital public services if the UK Government once again fails to invest.”

Since 2020, the Welsh Government has made available £50m for coal tip inspection and maintenance works for this issue which pre-dates devolution but is not recognised in the funding settlement.

Remediation 

Ms Evans called on the UK Government to provide a £20m contribution to support the remediation of selected sites.

The Welsh Government published the locations of category C and D coal tips across Wales – these are the coal tips which require more frequent inspection – earlier in the week.

She also highlighted the disparity in funding in rail investment in Wales, saying: “Now that HS2 is just a London to Birmingham railway, the UK Government’s flimsy arguments for classifying it as an ‘England and Wales’ project have collapsed.

“HS2 is an England-only project and Wales should be provided with its fair share of consequential funding, including the £270m we have missed out on to date.

“We are also calling for a wider review of how rail projects are classified, and for the UK Government to re-engage with the work of the joint UK and Welsh Government Wales Rail Board to deliver a rolling programme of investment which provides the rail infrastructure Wales needs.”

Headroom

Reports on Friday suggested that Chancellor Jeremy Hunt is considering cutting inheritance and business taxes while squeezing benefits payments by billions in his autumn statement.

Mr Hunt said on Friday that there is a need to “reform our welfare system” as he said the “priority” for Wednesday’s financial announcement is helping firms.

But he is also considering slashing inheritance tax, which would be bound to draw criticism for supporting the wealthy while others struggle with the high cost of living.

Conservative former chancellor Lord Clarke said the move may please MPs on the Tory right who are clamouring for tax cuts, but others would find it “appalling”.

Typically ministers use the September figure for inflation when uprating working-age benefits, which would mean a 6.7% hike.

But Mr Hunt has not ruled out using October’s far lower figure of 4.6%, which would be a real-terms cut for millions.

‘Compassionate’

Asked about the possible move in an interview with the BBC, the Chancellor said: “We will always be a compassionate Conservative government but part of how we make our economy successful is by making sure companies like this company can find the staff they need.

“Nearly a million vacancies across the economy, so we do need to reform our welfare system.”

Sources said a decision on the figures is yet to be made.

Ministers have already announced a fresh welfare crackdown amid efforts to get people back into work under a toughened sanctions scheme.

Free prescriptions and legal aid will be cut off for benefit claimants who are deemed fit to work and do not seek employment.

There are hopes the final forecasts from the Office for Budget Responsibility will give Mr Hunt more “fiscal headroom” than expected to make tax cuts when he receives them on Friday.