‘UK Govt does not have a grip on bigger picture’ says Finance Minister

The Welsh Government has accused the UK Government of not having “a grip on the bigger picture” following yesterday’s Budget announcement.

Rebecca Evans MS, Minister for Finance and Local Government said the Spring Budget was an opportunity for Chancellor of the Exchequer to address the worsening impacts of the cost-of-living crisis and to drive economic growth.

The Finance Minster said: “It was clear from the lack of extra funding for health, social services and local government – as well as the bare minimum of additional support for people and businesses who need help now – that the UK Government does not have a grip on the bigger picture and is content to tinker around the edges.”

The UK’s economic output has yet to recover to pre-pandemic levels and the Office for Budget Responsibility (OBR) expects the UK economy to shrink further this year.

In contrast, the International Monetary Fund forecasts that every other G7 economy will grow.

Unemployment in the UK is also expected to increase and disposable household incomes will fall by 6% between 2021-22 and 2023-24 – the largest decline in living standards since records began.

Jeremy Hunt announced yesterday that Wales will receive an additional £178m over the next two years as a result of spending decisions made in England.

The Welsh Government say the settlement in 2023-24 is still up to £900m lower in real terms than expected at the time of the 2021 spending review.

Rebecca Evans said: “The Senedd passed the Welsh Government’s Budget 2023-24 – which provides significant additional investment for the NHS, social care and schools – last week. We will, of course, be considering how best to use the small amount of additional funding announced by the Chancellor, to meet the needs of Welsh people and priorities.”

Ahead of the Budget, the Finance Minister pressed the Chancellor to provide support for households, to increase funding for public services and to invest to grow the economy.

Jeremy Hunt listened to the calls and agreed to maintain the energy price guarantee at £2,500 from April.

Support

Rebecca Evans said: “We have consistently pressed the Chancellor to recognise the people in our society who need the most support, such as disabled people, people on benefits and those with caring responsibilities.

“While the Chancellor has announced further support to help people into work, we will not and cannot support any action which will make it difficult for people to access benefits or place conditions and sanction those currently receiving benefits.”

The Welsh Government said the support announced for over-50s is likely to have minimal impact unless the UK Government takes steps to improve flexible working practices.

The OBR has estimated that the increase in labour supply as a result of the policies announced in this Budget could be as low as 55,000.

The Finance Minister described the removal of the pension cap is a “regressive policy that benefits the most affluent in our society”.

She added: “The Chancellor has chosen to hold back funding at a time when extra investment is desperately needed to ensure our hard-pressed public services can respond to the significant pressures following the pandemic and cost-of-living crisis and to ensure public sector workers are paid a fair wage.

“While he announced £20m for work needed to the breakwater at the Port of Holyhead, there was a notable lack of other capital investment.

“There is a wealth of opportunities for investment to support economic growth, including rail, renewable energy and research and development in Wales.

“The Chancellor failed, once again, to recognise these.”