The Labour UK Government's March 2010 UK Budget Statement recognised that the scale of the deficit meant the UK didn't have enough money, with Chancellor Alistair Darling admitting that Labour's planned cuts in public spending will be "deeper and tougher" than in the 1980s, which followed economic meltdown under Wilson, Callaghan and Healey.
Austerity was therefore inherited and failure to reduce the deficit risked bigger imposed cuts, as happened in Greece and Ireland.
Those calling for greater expenditure headroom in these circumstances delude themselves and mislead others, where the lack of would have resulted in fair higher public spending reductions further down the line.
Debt cannot be reduced until income exceeds expenditure, and the UK Government had almost eliminated the deficit when Covid-19 hit.
Without this, the UK would have struggled to raise the £300 Billion borrowed to see us through the pandemic, which, for example, saw the UK Government pay the wages of around a third of the workforce and spend billions supporting businesses and households.
The war in Ukraine then caused the largest commodity shock since the 1970s, with Households across the World feeling the Cost of Living Crisis and the poorest households, spending a larger share of income on food and energy, particularly vulnerable.
Given the Statement by the World Economic Forum that “The soaring cost of food and energy is affecting people across the globe”, that inflation is currently higher in 19 European Countries, and that interest rates are currently higher in 11 European Countries and 10 other G20 countries, than in the UK, only a very Silly Billy would claim that the Cost of Living Crisis was made in Westminster.
All Governments, including the UK Government, are having to operate within this global Inflationary environment.
Despite this there has been an increase of the total budget allocation of £769 million when compared with the total in the 2023-24 Final Welsh Government Budget.
The UK economy has grown faster than Germany, Italy, and Japan since the 2016 EU referendum, and in coming years, is set to have the third fastest growth in the G7 group of top economies.
There is therefore hope for the future, provided a UK Labour Government is not elected to wreck the economy once again.
The Welsh Government’s Draft Budget cuts Social Justice funding by £11.6 million, more in real terms.
Although the Welsh Government has announced a new Child Poverty Strategy for Wales, Barnardo's Cymru has expressed ‘disappointment that the Welsh Government has not listened to numerous recommendations on the need for targets and an action plan attached to the Strategy so that progress can be transparently and regularly monitored', and the Children’s Commissioner for Wales has stated the lack of detail on ‘actions, timescales and deliverables’ means that there was no way of holding the Welsh Government to account.
This Welsh Government has launched a new Welsh Benefits Charter, but far from being the integrated Welsh Benefits System for all the means-tested benefits the Welsh Government is responsible for, which the sector have been calling for for almost a decade, it is only about developing one, and again without targets and timescales .
Similarly, the Welsh Government has dodged all calls for interim targets and timescales for their Tackling Fuel Poverty 2021-2035 Plan, despite Statutory obligations and the sector stating Interim targets would ensure that the “Welsh Government is accountable for progress”.
The voluntary sector has long been emphasising that although they provide a fence at the top of the cliff, rather than an ambulance at the bottom, delivering services that save the public sector millions, they lack sustainable statutory funding.
Many poverty-fighting services, delivered by the voluntary sector, are funded by the Housing Support Grant.
In its 2024-25 Draft Budget Document, the Welsh Government claims that they “have protected front line support services including the Housing Support Grant”.
However, in its response to this Draft Budget, Cymorth Cymru, the representative body for the Housing-related Support in Wales, stated “The Welsh Government has not increased the Housing Support Grant in the Draft Budget for 2024/25, that in real terms it is £24 Million less than in 2012, and that “three quarters of support providers told us they would need to reduce service capacity”.
By removing early intervention and prevention services, such false economies only increase pressure on the NHS, Accident and Emergency Departments, and blue-light services, when the Welsh Government should instead be removing the tens of millions of pounds of added cost pressure on statutory services that they cause.
