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2016 Budget Breakdown

There's been mixed reaction to Chancellor George Osborne's eighth budget.

Some of the highlights for Wales include :
 
·   Support for the Welsh steel industry with an Enterprise Zone in Port Talbot with enhanced capital allowances;

·   UK Government backing for the Swansea Bay City Region;

·   Halving of the Severn Bridge Tolls when they return to public ownership

This Budget announced additional resources of £380 million over the next four years - £22 million capital and £358 million of revenue.

Finance and Government Business Minister said: “This Budget is the third in ten months.  Plans announced in November have been reviewed already. This chaotic stop-start approach is not helpful to us in terms of our own Budget planning or for businesses who need consistency not constant change.  We have barely agreed our plans for 16-17 and the underlying figures have changed again. This contrasts sharply with the stability and certainty that the Welsh Government seeks to provide in our budget process. 

“The small addition to our Budget does not reverse six years of austerity.

“Yet again it is the most vulnerable in our society that will be on the receiving end of these further spending cuts and welfare changes.  As we’ve seen so often from the Chancellor, there has been no hesitation to apply yet more needless austerity despite the consequences.  

“As a Government, we have always been clear that austerity is a choice and we are providing an alternative clear way forward despite austerity.   We have a track record of delivering in these difficult financial times and will continue to do all we can to mitigate the effects of these further cuts to public spending in Wales.

“We have never shied away from investing in our infrastructure during the recession.  I was pleased that after months of detailed negotiations, we were able to secure a City Deal for the Cardiff Capital Region – it will have a positive long term economic impact across the region.  Yesterday’s City Deal has opened the door for other areas of Wales including the Swansea Bay Region’s bid and North Wales.  We look forward to working with these regions to support their ambitions.

“We’ve always called for the abolition of the Severn Tolls – the Chancellor has half listened but should have gone further and abolished them. It is disappointing once again that there is nothing on the Swansea Bay Tidal Lagoon in this Budget.

“It is also disappointing that the UK Government has decided to continue its procrastination over the devolution of Air Passenger Duty.  This discriminatory approach is unacceptable and unjustifiable and we will now look at ways of offsetting the impact of this tax on our national airport and our economy.”

Nia Griffith MP, Labour’s Shadow Secretary of State for Wales, responding to today’s Budget statement, said: “This was not a Budget that had the interests of Wales at its heart. George Osborne ducked the big challenges that our economy faces and instead announced that ordinary people in Wales will face yet more cuts.

“There was nothing about rail electrification in the North or the South, and no mention of the Swansea Bay Tidal Lagoon – a project that could create hundreds of local jobs and boost our steel industry, but which the UK Government will not guarantee.

“What George Osborne did confirm was that he will be cutting support for people with disabilities and using this money to fund a capital gains tax cut for very wealthiest. He confirmed that UK Government Departments will face even more cuts, putting local services at risk. These are the wrong choices and are signs of a Chancellor who has his priorities all wrong.”

Plaid Cymru Leader Leanne Wood has responded to the Chancellor's Budget by saying that Wales needs its own National Infrastructure Commission in order to boost the Welsh economy.

Leanne Wood said that the UK Government had focused too much infrastructure investment in England while denying Wales a full and fair share of funding from this expenditure.

She added that a Plaid Cymru government would establish a National Infrastructure Commission for Wales to deliver the largest infrastructure investment project since devolution, and challenge the UK government to ensure that Wales gets more than just crumbs from the Westminster table.

Party of Wales leader Leanne Wood said: "While some parts of the UK see major infrastructure investment, Wales is asked to settle for crumbs from the Westminster table.

"Wales needs its own National Infrastructure Commission to create jobs and grow the economy - something a Plaid Cymru government would deliver. By investing in transport routes, schools and hospitals throughout the country, we can ensure that Wales's key infrastructure and institutions are fit for the twenty-first century.

"While Westminster is happy to fund HS2, HS3 and two Crossrail projects as well as new transport links across the whole of England, Wales misses out on millions that should be spent on transforming our own transport networks.

"Increasing infrastructure spending by 1% of GDP would be a £20 billion-a-year boost to the UK economy and £1 billion of that for Wales. Both the IMF and the CBI have shown that infrastructure investment secures a net gain for the Treasury - £3 return for every £1 spent.

"With so many crucial economic levers reserved to Westminster, we in Wales are forced to rely on London to grow our economy and today's Budget shows exactly why that cannot continue.

"For too long, Labour have allowed the Tories in London to run down the Welsh economy. In government, Plaid Cymru will seek an urgent Budget Summit with the UK Chancellor in the first 100 days of the new assembly in order to secure a fair financial settlement for Wales.

"With ambitious plans to build the Welsh economic engine and demand a better deal from Westminster, Plaid Cymru offers the change Wales needs in May."

“Tolls should be scrapped, not just cut” 

Kirsty Williams AM has labelled the proposed cut to the Severn Bridge tolls as “pathetic” and has called for the unfair tolls to be scrapped completely.

She is also highly critical of the fact that the Chancellor failed to announce support for the Swansea Tidal Lagoon project.

Kirsty Williams, Leader of the Welsh Liberal Democrats, said: “Frankly, the proposed cut in the tolls is pathetic.  Once back in public ownership, there is no need whatsoever for there to be tolls on these bridges.  The Chancellor is cynically acting as if he is doing commuters a favour, but the fact is that he wants to keep this unfair tax on entering Wales.  Only the Liberal Democrats will completely scrap these tolls.   

 “The lack of any real progress on the Swansea Tidal Lagoon is yet another nail in the coffin of the Tories’ green credentials.  The Liberal Democrats ensured that the Coalition Government fully backed the Swansea Tidal Lagoon project.  With the Tories on their own, all we have seen is minister after minister talking this project down. The Swansea Bay Tidal Lagoon must go ahead. It will lead to thousands of new green jobs and supply energy for 120 years – over three times as long as a nuclear plant.

“The Port Talbot enterprise zone is good news and I hope will go a long way in helping rejuvenate the area.  The Labour Government must pull its weight and set up an urban regeneration company for Port Talbot to help counter the impacts of the decline in heavy industry and manufacturing.

“It’s clear for all to see that North Wales has been neglected for too long and has not been getting its fair share of infrastructure projects.  I welcome any progress in improving transport links in the area, however the people of North Wales need more than a sentence of warm words ahead of an election.”

The Leader of the Welsh Conservatives – Andrew RT Davies – said: “The 2016 budget will help Welsh households and businesses by boosting investment, jobs and growth in Wales.

 “On the day that employment in Wales reached record levels, the Chancellor’s budget is further proof of Conservatives in Government delivering for Wales.

 “From hugely welcome support for motorists via a halving of the Severn Bridge toll, to much needed support for the Welsh steel industry; this is a Budget for the whole of Wales and a Budget that will benefit homes right across the country.

 “In North Wales the announcement of a growth deal for the region follows the Welsh Conservative announcement of a ‘North Wales Powerhouse’. Whilst in South Wales there is government backing for a Swansea Bay City Region.

“This is positive, supportive and further proof that only the Conservatives can deliver for Wales.

“The UK remains the fastest growing economy in the G7 and all that remains is for the Welsh Labour Government to dust off their own economic levers, and play their part in ensuring that Wales can reach its full potential.”

Natalie Bennett, Green Party Leader, said: “The Chancellor’s repeated claim that the Tories have a long-term economic plan that is delivering a stronger economy is looking more absurd by the day. 

“Let's not forget that this latest round of savage cuts is partly driven by the fact that that economy is £18bn smaller than the Office for Budget Responsibility (OBR) expected only four months ago.??

“Sadly, our faltering economy is not the only driver behind this latest toxic dose of austerity. Osborne, the most ideologically rigid Chancellor this country has ever seen, has proved time and again that he is hell-bent on ignoring the needs of the majority in our society, and the urgency of climate change, so as to deliver a greater share of our wealth to the richest and vested interests like the fossil fuel industries.??

“The sweeping cuts to disability benefits, that could see 500,000 people lose up to £150 a week, are particularly troubling. Far too many times we have seen this government make the poor and vulnerable pay for the greed and fraud of the bankers."

Molly Scott Cato, the Green Party's MEP for the South-West and Finance Spokesperson, said: “These cuts are avoidable. The Green Party would cancel two of the costliest white elephants in British history – the grotesquely expensive HS2 and the Hinkley Point nuclear power station – thereby freeing up resources to tackle inequality, to build a fairer economy.

“Unlike Osborne, a Green Chancellor would also take real steps to end profit-shifting scams that facilitate grand scale tax avoidance. Only when the government takes genuine measures to end corporate tax avoidance will big business begin to contribute properly to the public purse.

"A Green Chancellor would be bolder on fuel duty – while oil prices remain low – using a 10p/litre increase to ring-fence up to £5bn a year to be used to reverse devastating cuts to bus services, particularly in rural areas,  and to invest in sustainable transport solutions. Finally we would follow the example of the Finnish government and commit to funding a full investigation of the benefits and feasibility of replacing our outdated welfare system with a Basic Income. There is now growing consensus, across the political spectrum, that only Basic Income has the potential to solve the intractable problems associated with our outdated social security system and an increasingly precarious labour market."

FSB Wales Policy Unit Chair Janet Jones said: “We welcome the 50% reduction in the Severn Bridge tolls announced by the Chancellor. 

“A wide variety of our member businesses regularly use the Severn Crossings, and a study from the Welsh Government suggests that the tolls cost more than £100m each year in lost trade.

“This cut will have a positive impact for many small businesses, reducing the cost of trading across the Welsh border, and boosting confidence among small firms both sides of the border.” 

Professor Graham MacGregor, Chair of Action on Sugar says: "We are delighted to see in today’s budget announcement that the government will be introducing a new sugar levy on soft drinks which will be used to double the funding they dedicate to sport in every primary school.

"However, for this to be effective it’s imperative that the levy is at least 20% on all sugar-sweetened soft drinks and confectionary and escalate thereafter if companies do not comply to reformulation targets – and this must be implemented immediately."

 

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