Services in Wales are going to have to be cut according to the Welsh Government.
Speaking at a press conference today, economy minister Vaughan Gething said Chancellor Kwasi Kwarteng had "ignored" public services and that Wales faces the "most severe reductions to our budgets" since 1999. In the press conference Mr Gething was announcing £1.8m of funding for projects that would promote Wales ahead of the upcoming World Cup.
"The mini budget worsens the pressures on our budget as public services were ignored by the Chancellor," said Mr Gething. "There was no fresh OBR forecast last week but we have examined analysis from the Institute for Fiscal Studies and new independent forecasts published by the UK Treasury to measure the impact.
Read more: Wales among areas that will lose out most from the Chancellor's mini budget
"This shows that the value of the Welsh Government’s budget over the current three-year settlement is around £4bn lower than was the case at the time of the previous Chancellor’s spending review announcement. This means that we now face the most severe reductions to our budgets in the devolution era – worse even than the during the decade of austerity under previous UK governments.
"There is no mandate for the extreme experiment the Chancellor is imposing on families, businesses and our public services. As the former Head of the Civil Service, Gus O’Donell has said, the UK economy is being driven with both the brake and accelerator hard down. This cannot continue and we urge the UK Government to change course by taxing windfall energy profits and reversing tax giveaways for the richest few."
Clearly cuts in budgets above what we saw during austerity will result in cuts to public services here in Wales (and the Welsh Government runs vital services like education and health). WalesOnline asked Mr Gething what services will see cuts but he said that was yet to be decided but that they would have to make "difficult decisions" and decide their priorities.
He replied: "I can't give you a chapter and verse on that now, because apart from anything else, we've got to set up our budget through this autumn. We've got some very difficult choices because there hasn't been a real increase in our budget. We know that we've got a reducing ability to spend [and] that affects a whole range of things. We are having to think about what we can still continue with, what we will be able to prioritise and the pace of what we will be able to do. There are really difficult choices. The finance minister will set out the draft budget before the end of this calendar year."
Though all areas of the UK will see some reduction in their tax burden, the new budget is stingiest for Wales, especially when compared to the bumper windfalls in London and the South East. According to the Resolution Foundation, an independent think-tank focused on improving living standards for those on low to middle incomes, those living in the South East or London will see over three-times (on average, £1,600) the gains of those in Wales (an average of £500). You can see the full breakdown here.
Plaid Cymru also attacked the new budget from the Chancellor. Plaid's spokesman for finance Llyr Gruffydd MS said: "Tax cuts for the rich, removing the cap on bankers' bonuses, and trickle-down Trussonomics – the economic madness announced by the Treasury last week will do absolutely nothing to drive growth in the Welsh economy and future generations will be paying off this Tory debt for decades to come.
“We in Wales have an opportunity to make a stand and reject the Tories’ fantasy economics by using our tax-varying powers for the very first time to protect the basic rate at 20p in April 2023 and keep tax levels as they are at the moment. Doing this would offer an additional £200m a year to the Welsh Government's budget which can be used directly to help ease the pressure of the cost-of-living crisis, protect public services and shield the vulnerable from Tory cruelty."
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