Shadow Finance Minister and North Wales MS Mark Isherwood has expressed deep concern that the Welsh Government’s Budget “fails to deliver the financial revolution needed to provide a recovery plan for the Welsh economy”.
Speaking in this afternoon’s debate on the Final Budget 2021-22, Mr Isherwood said Wales “needed a Budget to fix the foundations and build a more secure and prosperous economy for the future”, but “instead, what we got was a Budget that papered over the cracks rather than rebuilding the foundations, a Budget that shows this Welsh Government do not understand what went wrong in the last two decades or what is needed in the next”.
He said that after more than two decades of Labour Budgets since devolution, Wales still has the lowest wage and employment levels, and highest proportion of low paid jobs, in Britain - and the lowest prosperity levels and long-term pay growth, and highest poverty rate, of all UK Nations.
He said
“Whilst the future of the pandemic is uncertain, it is concerning that the Wales Fiscal Analysis report this month found not only that the Welsh Government has failed to allocate the £650 million provided by the UK Conservative Government on 16 February, instead rolling the funding over to next year, but also that with additional consequentials from the UK Budget and changes to projected devolved revenues, this means the Welsh Government currently has approximately £1.3 billion to allocate at future supplementary budgets. We recognise that the Welsh Government must make provisions for contingencies. However, £1.3 billion is excessive considering the Welsh Government knew for some time that additional funding was going to be made available.
Mr Isherwood emphasised that the Barnett-based funding provided to the Welsh Government will be £16.6 billion in 2021-22, which equates to around £123 per head for every £100 per head the UK Government spends in England on matters devolved in Wales.
He also criticised the taxation changes in the Budget, describing them “as regressive as they were before the pandemic struck”.
He said:
“The tax on aspiration and opportunity is back, with Land Transaction Tax for homes purchases between £180,000 to £250,000 reverting to levels before the pandemic at 3.5%. And Business rates continue to be the highest in the UK.
“The Welsh Conservatives have been calling on this Labour Government to use the £650 million provided to them by the UK Government on 15th February to implement business rates relief for businesses in Wales.
“This Welsh Government claims it has not been able to announce business rate relief sooner because the UK Government’s funding plans had not been announced.
“However, the Scottish Government has exposed this for the nonsense it is, by announcing the abolition of business rates for the retail, leisure, hospitality and aviation industries on 15th February, using its £1.1 billion of consequential funding arising from the UK Government’s coronavirus spending.
“Funding to announce this policy was available, but this Labour Government chose once again to dither, delay and play buck-passing Party politics, withholding much needed clarity and funding for businesses in Wales.”
He added:
“The Welsh economy requires a radical change of direction, rather than more of the same stale economic policies that successive Labour Welsh Governments have produced.
“Welsh Conservatives have called on this Welsh Government to implement a recovery plan for Wales, not just to see Wales through the COVID-19 pandemic, but also to deliver the public services that Wales needs after over twenty years of successive Welsh Labour Government failures.
“It is therefore deeply concerning that this Budget fails to deliver the financial revolution needed to provide a recovery plan for the Welsh economy.”