Will Burnham’s Budget exclude Welsh postcodes?

Geraint Davies

The question in Wales is whether Andy Burnham brings a fairer deal after years of underfunding.

The Prime Minister’s first Budget is framed by rising borrowing costs inflicted by President Trump’s war in Iran, pressure to increase defence spending – the pretext for the downfall of Keir Starmer – a pledge to reduce welfare costs and a promise to stimulate growth for all postcodes.

Tellingly, the promise of fairness in the Budget has been presented in terms of narrowing the North-South divide, with a No 10 in the North delivering growth in every postcode in England.

Unfortunately, this ignores Wales’ case for a fairer share of rail investment, NHS funding and national wealth.

For decades, Wales has been financially undernourished, with only 1.5% of UK rail investment for its 5% share of the UK population, whereas Scotland has been fortified with its full 8% population share.

Moreover, if Wales were an English region, it would get an extra £180 in NHS funding per person.

What’s more, the Barnett funding formula dramatically shortchanges Wales compared with Scotland, even though average wages in Scotland are higher.

In addition, the proceeds of the Crown Estate in Scotland remain available for investment in Scotland, but in Wales our £210 million is captured by the UK Treasury to be spent elsewhere.

There is no sign that Andy Burnham intends to right any of these wrongs, and no chorus of Welsh Labour MPs urging him to do so.

Tragically, worse is yet to come. Andy Burnham’s plan to redistribute wealth from London and the South East to the North excludes Wales.

The Trojan horse is Angela Rayner’s local government funding and property tax reforms, which will shift money from affluent to poorer regions within England.

The cunning plan, instead of a full-scale residential property revaluation, is for the UK Government to revise its funding formula in England, alongside targeted property surcharges, to shift the tax burden onto wealthier property owners, with the benefits of redistribution kept within England.

But surely the redistribution of UK wealth should include Wales. After all, in Wales the median wealth per household is £119,800 – around half the £235,900 figure for the South East and much less than in parts of London with higher property values.

Moreover, council tax for a property in Swansea is two to three times as much as for a property of the same price in Westminster.

A progressive tax system for the UK should include both income and wealth, as the top 1% have 20% of wealth, compared with 9% for the bottom half. The “wealth tax by the back door”, as the Telegraph calls it, will mean higher council taxes in rich London boroughs like Westminster and Wandsworth to allow more funding for poorer councils in England.

Such strategic wealth redistribution should be UK-wide and not hidden beneath the radar by the Ministry of Housing, Communities and Local Government, with the lame excuse that council tax is devolved.

Defence spending

The Budget debates will focus on how much and how quickly defence spending will rise and welfare costs will fall, alongside whether there is a fairer way than Burnham’s to reform welfare and grow the economy.

The big question for voters in Wales is whether their Labour MPs, in particular those parachuted in from London, will speak up for a fairer deal for Wales and honour their duty to represent their constituents, or sit quietly nodding at their new leader.

Winston Churchill famously said an MP’s duties are first to the country, second to their constituents and third to their party. So let’s see whether they ensure that “growth in every postcode” extends fairly across the border to Wales.

Geraint Davies served as MP for Swansea West from 2010 to 2024.

---

Get more trusted Welsh news

Choose Nation.Cymru as a preferred source in Google News to see more of our journalism.