Welsh Government urges Chancellor to boost spending on public services

The Welsh Government has urged Jeremy Hunt to increase funding for public services and help those struggling the most due to the cost-of-living crisis in Wednesday’s Budget.

Speculation ahead of the Budget has suggested the Chancellor could seek to cut 1p or 2p off income tax or – as a cheaper alternative – national insurance, to ease the burden on working households ahead of the general election later this year.

Officials have drawn up a range of options for raising money to fund the tax cuts, potentially including reforms to the non-dom status for wealthy individuals with earnings overseas.

Scrapping non-dom status has been promised by Labour, with the money committed to measures including NHS improvements.

Priority

Wales’ Minister for Finance and Local Government, Rebecca Evans, said: “The priority for the Chancellor must be making the critical investment required for public services on which we all rely. This includes increased funding for pay and public sector pensions costs.

“We have taken difficult decisions in Wales to prioritise funding for the services that matter the most to people.  In contrast, based on the UK Government’s current spending plans they intend to cut funding for the NHS in England in real terms next year.

“The decision not to increase funding for public services in the Autumn Statement has meant that hospitals, schools and other vital public services have been exposed to huge pressures, impacting severely on the future sustainability of those services. This must be reversed.

“The cost-of-living crisis has not gone away. After a decade of welfare reforms, the social security safety net is no longer adequate.

“The UK Government should heed the long-standing calls of the Joseph Rowntree Foundation and Trussell Trust and urgently implement an Essentials Guarantee. This would mean that the Universal Credit standard allowance would be set at a level that ensures people are able to meet their essential costs.

“Despite the Chancellor claiming last year’s Budget was  ‘a Budget for growth’ the economy is now smaller than it was this time last year. Urgent efforts are needed to provide the conditions to boost productivity and create an environment for investment to support living standards and public services.

“In a unique step last week, all parties in the Senedd came together to table a motion unanimously calling on the UK Government for greater budgetary flexibilities.

“Next year (2024-25) our borrowing and reserve limits will be worth almost a quarter (23%) less in real terms than when they were introduced in 2018-19. These flexibilities would support greater investment, including through the pipeline of projects we have ready to mobilise through our Wales Infrastructure Investment Strategy.”