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UK Government has shown its ‘true colours’ with budget ‘to make rich richer’ say Welsh, Scottish, NI governments

01 Oct 2022 8 minute read
BBC handout photo of Chancellor of the Exchequer Kwasi Kwarteng. Picture by Jeff Overs/BBC

The UK Government has shown its “true colours” with a budget that “will make the rich richer and further embed inequality,” the governments of Wales, Scotland and Northern Ireland have said in a joint statement.

The devolved governments said that they were seeking an “urgent meeting” with Chancellor Kwasi Kwarteng to discuss “immediate action to reverse the damaging effects of the mini-budget”.

Wales’ Finance Minister Rebecca Evans was joined by Finance Ministers from Scotland and Northern Ireland in highlighting the profound impact of “the largest set of unfunded tax cuts for the rich in over 50 years” stating it is “a huge gamble on public finances and the health of our economy”.

In a joint letter, they warn against being condemned to another decade of austerity and express deep concern over reports that UK Government departments will be asked to make spending cuts to balance the budget, which may have profound consequences for devolved budget settlements already eroded by inflation.

The Ministers also renew calls for the UK Government to provide targeted support for households and businesses, funded through a windfall tax on the energy sector.

They also call for additional funding to increase Social Security benefits to support low income households with the higher costs they will face through winter, including a £25 per week uplift for Universal Credit and legacy benefits.

By abolishing the 45p additional rate of income tax the UK Government has shown its true colours. This will make the rich richer and further embed inequality in our communities.

The letter

“Dear Kwasi

“The UK Government has taken a huge gamble on the public finances and the health of our economy. Even prior to last Friday, the UK, like many other countries, was already facing the most severe economic upheaval in a generation.

“However, the UK Government has chosen to make things significantly worse by announcing a huge package of tax cuts for the most wealthy without any credible explanation of how these will be paid for.

“Urgent action is required now to address the issues facing our economy, public services and households across the country. Such action cannot wait until the update you have announced will take place in November.

“Your statement on 23 September provided little respite for many families across the country who are already facing a winter unable to afford essentials such as food or to heat their homes.

“Instead, we got the largest set of unfunded tax cuts for the rich in over 50 years, sparking economic and financial turmoil that will have a profound impact on the lives of millions of people: the pound fell to a 37 year low against the dollar; the cost of government borrowing rose to its highest level in over a decade creating instability in the bond market and pension fund sector which required an emergency £65 billion intervention by the Bank of England to stabilise the system.

“Meanwhile over two fifths of mortgage deals have been withdrawn as interest rates are expected to rise significantly to offset the inflationary impact
of the measures announced last week.

“The Bank of England’s extraordinary intervention has provided some short-term stability to financial markets but the UK Government must act now to restore confidence in our public finances and limit any long-term damage to the economy.

“The House of Commons must be recalled immediately so that you can begin to re-evaluate your package of tax measures, starting with immediate reversal of the abolition of the Additional Rate of Income Tax.

“We are also deeply concerned at reports that UK Government departments will be asked to make spending cuts to balance the budget, which may have profound consequences for our devolved budget settlements.

“These are already under extreme pressure and we must not see our people condemned to another decade of austerity.

“We repeat our call for further targeted support to help households and businesses, in particular small businesses, who are struggling most in the current crisis. This should be funded by taxing the windfall gains in the energy sector rather than passing the cost to households through higher borrowing.

“We also call for additional funding to increase Social Security benefits to support low-income households with the higher costs they will face through winter, including a £25 per week uplift for Universal Credit and legacy benefits.

“We have made clear that inflation has already eroded the devolved budget settlements announced last October yet you have refused to provide a single additional penny for public services or to increase public sector pay.

“It remains the case that additional funding is urgently needed from the UK Government to support our vital public services in the face of rising prices, energy costs and wage pressures.

“Our budgets are already stretched beyond the maximum and as responsible governments we are having to make very difficult decisions to balance our budgets, as we do not have the flexibility or borrowing powers that the UK Government has.

“This approach is unlikely to be sustainable and is putting services at risk.

“It is also important that we see full forecasts from the OBR as soon as possible and we understand that the OBR has now said these can be ready during October.

“With the crisis deepening and the prospects for the economy deteriorating by the day, it is essential that you take action to reverse the damage these policies are causing, for the benefit of all parts of the UK.

“We also seek an urgent quadrilateral meeting with you to discuss this further.”


Today the Chancellor of the Exchequer defended last week’s mini-budget by saying the Government “had no other choice” than to do “something different” to spark the economy.

As the Prime Minister admitted the strategy had caused “disruption”, Kwasi Kwarteng said the public expected public spending would be tightly controlled.

“The British taxpayer expects their government to work as efficiently and effectively as possible, and we will deliver on that expectation,” he wrote in The Daily Telegraph.

“Not all the measures we announced last week will be universally popular. But we had to do something different. We had no other choice.”

The Chancellor also insisted he will produce a “credible plan” to get the public finances back on track with a “commitment to spending discipline”.

As Tories prepared to head to Birmingham for their annual conference, Liz Truss warned the country faced a “difficult winter” ahead as she indicated she had no plans to reverse her tax-cutting agenda.

“I recognise there has been disruption but it was really, really important we were able to get help to families as soon as possible,” the PM said in a pooled interview with broadcasters on Friday.

“This is going to be a difficult winter and I am determined to do all I can to help families and help the economy at this time.”

‘Back on track’

Her comments came at the end of a tumultuous week which saw the pound slump to an all-time low against the dollar and the Bank of England forced to spend billions buying up government debt to prevent a collapse of the pensions industry.

The sell-off of sterling prompted fears that millions of mortgage holders could face crippling rises in their repayments as the Bank moves to ratchet up interest rates to shore up the currency and put a lid on inflation.

The turmoil erupted after markets took fright at Mr Kwarteng’s £45 billion package of unfunded tax cuts – the biggest in 50 years – while committing billions to capping energy bills for the next two years.

With the Tories tanking in the opinion polls – one showed Labour opening up a hitherto unthinkable 33-point lead – some Conservative MPs have been pressing for a change of course.

Despite having been in Downing Street for less than a month, some have questioned whether Ms Truss can now survive to the end of the year as the party has seen its reputation on the economy shredded.

The Prime Minister, however, insisted that Mr Kwarteng was right to cut taxes as part of their plan to drive up the UK’s sluggish rate of economic growth.

“What is important to me is that we get Britain’s economy back on track, that we keep taxes low, that we encourage investment into our country and that we get through these difficult times,” she said.

With some analysts warning of a squeeze on public spending to get debt under control, the Prime Minister again refused to commit to the annual uprating of benefits in line with inflation – something Rishi Sunak had promised to do when he was chancellor.

Pressed in her interview, Ms Truss said only that it was “something the Work and Pensions Secretary (Chloe Smith) is looking at”.

She added: “What is important to me is that we are fair in the decisions we make, but most importantly that we help families and businesses at this very difficult time with their energy prices.”

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Fi yn unig
Fi yn unig
1 year ago

This is a very powerful letter from three UK nations. It would have been made impossible to ignore if someone like Andy Burnham representing the rest of (or all of) England could have been a signatory to it. I’m sure we will hear something along those lines in due course.

The Original Mark
The Original Mark
1 year ago

All we have to do is take note of the MP’s and MS’s that come out and defend this complete sh*t show, and the ones who stay silent (Fay Jones) the list is growing,

Forgot to mention the cuts to benefits to pay for the higher rate tax cut, hope all you “working class” tory voters are happy with yourselves, this is your fault.

Last edited 1 year ago by The Original Mark
Mab Meirion
Mab Meirion
1 year ago

The Lone Ranger and Tonto are riding roughshod over the people of this country behaving like the Clancy Gang…Time for Wyatt Earp to ride into Tax Dodge City and fix our troubles once and for all…

Mab Meirion
Mab Meirion
1 year ago
Reply to  Mab Meirion

Is that right Trussed-up and Kamikwasi are doing panto this Christmas…Scrooge or Truss Puts The Boot In…

Ernie The Smallholder
Ernie The Smallholder
1 year ago

The current UK government’s economic policy won’t work, there is no process for it to work. It also should be added that the Scottish, Welsh and NI governments know that we could have done better, especially if we have control of our own tax system and issued our own currency. If this UK policy is not reversed then we will be forced to set up our own respective national banks and issue our own currency and therefore set our own tax policies. If the UK stands in our way, we will have no choice but to declare Full independence immediately.… Read more »

1 year ago

Welsh Labour: The Union is good for Wales. Also Welsh Labour: The Tories are terrible for Wales. Me: Umm … the Tories have governed Wales for 90 out of the last 120 years. Because you support the Union it legitimises a disgraceful Tory Government with no democratic mandate in Wales to govern us. Welsh Labour: But the Union is good for Wales. Unionism is progressive. Nationalism is an inherently right wing creed. Me: Wales majority vote goes the way of progressive parties (particularly Labour) 100% of the time but the Nationalist Tory party governs us 75% of the time. Welsh… Read more »

Argol fawr!
Argol fawr!
1 year ago

As head of England’s government, it took Thatcher a few months to be despised. Truss manages it in days. She’s more of a puppet PM than Boris, with less grey matter, if thats possible.

Steve Duggan
Steve Duggan
1 year ago

Forget the Union it does not exist to benefit us. Today we saw wonderful marches/gatherings in Cardiff, Edinburgh and Dublin – rather than letters to the UK government, which will be ignored, we must work together to bring independence or reunification to the different nations of these islands. Now it is our time !

1 year ago
Reply to  Steve Duggan

Steve, I completely agree. let’s work together for the benefit of all three of us. I’m a Scot and feel that if we could work together, it will make each of us more powerful. Let’s free Wales and Scotland from this mob in Westminster and if the N Irish vote for reunification, then it would be great for all of us including the English. Isn’t it time our overlord’s looked at themselves? They’ll only be able to grow when they do that, and they’ll only be able to do that once the rest of us can look from the outside… Read more »

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