Welsh Outlook and Concerns Regarding the Forthcoming Budget

Finance Secretary Mark Drakeford has indicated he does not foresee “a bumper Budget for Wales” from Chancellor Rachel Reeves this Wednesday. Nevertheless, he informed BBC Politics Wales that he anticipates her to present “the first steps” towards “repairing the damage of the last 14 years” when the Tories held power, though he suggested this could take five years to accomplish. Drakeford stated he had engaged “in conversations” with both the Treasury and the prime minister concerning coal tip safety. He expressed being “hopeful that we will see a movement in that direction” regarding the funding for making former coal mines safe. He added that if this funding is not announced this week, he expects it to be addressed in the Spring statement. Meanwhile, opposition parties issued warnings about potential negative repercussions within the Budget, particularly for rural Wales. Sam Kurtz, Member of the Senedd for Carmarthen West and South Pembrokeshire and the Welsh Conservative’s economy spokesman, asserted that increased National Insurance contributions for employers would “negatively impact” Wales’ small and medium-sized businesses. He also noted that a rise in fuel duty would have a disproportionate effect on rural households. Ceredigion Preseli MP Ben Lake MP, Plaid Cymru’s Treasury spokesman, conveyed he was “very concerned” by speculation that the removal of inheritance tax relief for agricultural land “would devastate the family farm model that is the bedrock of the agricultural industry in Wales”. Drakeford also mentioned that there would be no alterations to the mechanism used to determine the financial allocation the Welsh government receives from the UK Labour government, despite Welsh Labour’s long-standing campaign for a reform of the Barnett formula. He identified one of the chancellor’s most “difficult decisions” as the reduction of winter fuel payments to pensioners and their reclassification as a means-tested benefit. Drakeford stated that the Welsh government plans to mitigate this impact by increasing the emergency funds available to individuals. Furthermore, it had previously announced an additional £1.5m for warm hubs for the winter period. Regarding investment, he hinted at the potential announcement of “big projects” in the renewable energy, housing, and transport sectors. On Sunday, Reeves declared that £1.4bn would be allocated for improvements to “crumbling” classrooms in England. Drakeford commented that the Welsh government aimed to undertake further work on enhancing school buildings in Wales, and he appended that “there’s certainly more we need to in the health estate as well”. The Welsh government is scheduled to present its preliminary budget for the upcoming financial year in early December. As Welsh Labour does not hold a majority in the Senedd, it will be necessary for them to secure an agreement with other parties to pass their budget. Drakeford stated that he had met with all three opposition parties in the Senedd and intends to follow up with them “when we know how the Budget at the UK level has had an impact on Wales”. He asserted that the approval of the Welsh budget constitutes a collective responsibility, extending beyond solely the Labour Welsh government, declaring that “responsibility for passing a budget lies with the Senedd as a whole”. Opposition parties, however, expressed disagreement with this stance. Kurtz contended that it was “for the Labour government in Cardiff Bay to come forward with a proposal that does come and cover some of the issues that we want addressed here in Wales”. Lake further remarked that if Labour were “unable to get their budget through the Senedd, that is very much their failure, and not the institution of the Senedd”.