Western Mail Article on the Budget

DESPITE all the spin and the publicity, yesterday’s Budget was remarkably lacking in both soul and substance.

We already had figures from the March Budget, and from the new Office of Budget Responsibility – and in any case the real announcement will be the devilish detail contained in what will be October’s Comprehensive Spending Review.

Yesterday, though, the Conservative and Lib Dem coalition confirmed that, except for health (although as this is devolved it refers to England only) and overseas aid, departmental budgets are to be cut by 25% during this Parliament.

Essentially, that level of cuts in Wales means that there will be around 60,000 public sector jobs at risk – 15,000 more than the 45,000 job cuts planned by Labour back in March.

But there are other areas where the new Budget is both tough and unfair.

Cuts in benefits and public sector pay freezes only punish those who had nothing to do with the economic mess created by the banks.

As recent figures by Financial Times’ economists showed, any cuts in welfare or the public sector hurt those areas which are already in need.

Meanwhile, as the general public contributes £13bn extra towards the deficit through a VAT hike – incidentally a policy that the Lib Dems campaigned heavily against in the election – the bankers will pay a measly £2bn per year through a levy. They will continue to benefit substantially through “shifting” their profits from income tax to capital gains tax.

Meanwhile confirmation was given of other transport schemes in England – the electrification of the Great Western line was noticeably absent. More proof that this UK Government is not attuned to the needs of Wales.

Some elements of the Budget should be welcomed – not least the increase of £1,000 of the level at which income tax is paid by basic rate taxpayers, a Plaid Cymru policy at the General Election.

There was also the very telling recognition that Wales has not shared in economic growth in the past and that a level playing field is desperately required.

However, that problem will not be solved by the small scale measures announced in the Budget or by kicking the issue of underfunding – the Holtham report – into the long grass.

Bolder moves are needed and the route-map for economic renewal to be launched by Welsh Deputy Minister Ieuan Wyn Jones will provide more nuanced, Welsh solutions when it is launched in a few weeks time.

At least Plaid has ambitions for Wales and believes it has huge potential for economic growth.

My worry is that this Budget and the further cuts in the autumn imposed on Wales will significantly slow growth and put more people on the dole.

Far from all of us being in this together, the axe has been firmly aimed at the poorest, while it is more or less business as usual for the economic elite

3 Responses to “Western Mail Article on the Budget” [latest first]

  1. Used to wind me right up that the 1979-97 government with-held Euro funding for Wales, so as to build up interest on it for the treasury.

    What’s the score with the ‘Objective’ euro Parliament funding these days, especially with the nonsense banker caused and cooking-the-books tactics by certain countries shenanigans, happening these days? Is Wales still in line for it to continue?

  2. I think there is a cleare case for some sort of transitional funding after the end of the second phase of structural funding. We could well qualify for a third phase of course as last weeks emergency UK budget is likely to hit the economy of areas such as ours hard.

  3. Top job Jon. Many thanks. S’pose we should be thankful for small mercies, though how much of a difference it will make in the future, it is no doubt a case of watch and shoot!

    Cheers, keep up the good work pal.

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