Introducing the Budget and Spending Review last week, the Chancellor said:
“this is a budget for the whole of the UK. We’re focused on what matters most to the British people – the health of their loved ones, access to world-class public services, jobs for the future and tackling climate change.”
First, this was a budget for those who needed it.
This is an important part of why I became interested in politics. I was delighted that those who are in receipt of Universal Credit received an 8% cut in tax on their taper (essentially the transition or overlap between benefit and wage). This means that a family with children, where one parent is working full time and the other part time, will be £1,800 better off each year. This will be brought in by December this year which is particularly welcome. The National Minimum Wage increased to £9.50/hr and apprentices also benefitted. Those on public sector pay can now see a clearer way to regular, independent reviews.
(I was also pleased by the announcement that, as our economy recovers, spending on international aid will return to 0.7%. This is a measure that will strengthen the UK as a force for good in the world.)
Second, it was a budget for Wales (and for all of the UK).
The Welsh government will receive an average of £18 billion per year. That is a 2.6% rise and an additional £2.5 billion (not that you would think it from the response). Another way of thinking about is that the Welsh government gets £120 per head of population for every £100 spent per head of population in England. We are not being short changed – the Welsh government spends much more in Wales than the value of tax receipts from Wales. Further targeted funding in Wales from the UK government includes:
- Over £168 million to be invested in Wales to boost the post-pandemic recovery and enhance the Welsh economy, including:
- Providing £0.9 billion for farmers and land managers and £6.2 million to support fisheries.
- A Veterans Commissioner for Wales, who will work to improve the lives and opportunities of the Welsh veterans’ community.
- Establishing a new trade and investment hub in Cardiff to grow trade for Wales.
Third, this was a budget that makes a difference herein Aberconwy.
In good news for the hospitality sector, a sector that is so crucial to our local economy here in Aberconwy, the Chancellor announced "draught relief" with a 5% cut to duty on draught beer and cider served from draught containers over 40 litres. This lower rate of duty on draft beer and cider will bring the price of a pint down by 3p. A planned increase in duty on spirits like whisky, wine, cider and beer, will all, be cancelled.
The Government will also introduce a new small producer relief, building on the success of the Small Brewers Relief, for producers of lower ABV drinks. This will allow small producers like those here in north Wales to diversify their product range to other products below 8.5% ABV while still benefitting from reduced rates.
Importantly, the freedoms that come from being out of the EU also allowed him to significantly simplify the system of duties on alcohol in the UK (I have asked the Secretary of State for Wales how this will impact on the minimum tariff operating in Wales).
Leisure, hospitality and retail are at the heart of our local economy. In England the Chancellor announced an entitlement to a 50% discount on their business rates, up to a value of £110,000 a year. Business rates are devolved in Wales and I am immediately calling on the Welsh Government to grant this discount to businesses in these sectors operating in Wales.
Although health is devolved in Wales, the £5.6 billion boost announced for the NHS in England is important news for people in Aberconwy and throughout North Wales – we use so many services provided by hospitals in England. Cancer treatments are provided at the Countess of Chester Hospital and Wythenshawe Hospital in Manchester, specialist paediatric treatments and care are provided at Alder Hey Children’s Hospital in Liverpool and people who suffer the most serious injuries are cared for and treated at the Royal Stoke Hospital.
North Wales has suffered at the hands of criminals operating “county lines” drug dealing operations. It is often the most vulnerable people who are targeted in these criminal operations. This Budget funds the Government’s plan which will deliver 150 new police officers in North Wales (and 700 in the North West of England where we know many of the gangs that impact North Wales operate). It also provides extra funding for courts, prisons and probation services (and reduce the courts backlogs caused by the pandemic). Crucially it also provides funding for programmes to tackle neighbourhood crime, reoffending and County Lines.
Crucially, this was also a budget for local communities.
The first Levelling Up Fund awards were made, including £120 million in Wales. Conwy council has not bid for these funds in Aberconwy yet – as you know we are preparing our bids, talking with communities across Aberconwy about what will make a difference here. Each area is limited to one successful bid per parliament so time is still on our side. Bidding takes time and it is worth getting it right.
Finally, this was a budget for the future.
When all the numbers have been crunched (and pub landlords and beer drinkers have raised their glasses!) the Chancellor explained this point marked a change in direction. We have done what was necessary while we went through the pandemic – but we can’t keep looking to government to bail us out at every turn. We have the biggest state bill ever and during the pandemic, increased government debt by as much in nine months as Gordon Brown did in nine years. All that has to be paid for – mostly our children and grandchildren. So we have to expect to reduce that in the future.
UK-wide support
As a result of our strong United Kingdom, Wales will benefit from:
- New funding for the British Business Bank to establish a £130 million fund in Wales, helping Welsh businesses to get the funding they need.
- The new £1.4 billion Global Britain Investment Fund which will support investment directly into Wales.
- A record £20 billion by 2024-25 in Research and Development supporting innovation in Wales.
- Confirmation that total funding will, at a minimum, match the size of EU Funds in Wales each year through the over £2.6bn UK Shared Prosperity Fund, which will invest in skills, people, businesses, and communities, including through ‘Multiply’, a new adult numeracy programme that will provide people across Wales with essential numeracy skills.
- £120 million for a new Future Nuclear Enabling Fund to support nuclear projects, with Wylfa in Anglesey, North Wales, as a potential site.
- Selection of the Hynet cluster as one of the first clusters under the Carbon Capture Usage and Storage (CCUS) Infrastructure Fund, bringing investment to North Wales
- An increase to the National Minimum Wage of £9.50 an hour, with young people and apprentices also seeing increases.
- Freezes to fuel duty for the twelfth consecutive year, as well as a freeze on alcohol duty and a freeze on Vehicle Excise Duty for heavy goods vehicles.
- £140 million to provide revenue support for hydrogen production, including the Holyhead Hydrogen Hub, and heavy industrial firms across the UK who adopt carbon capture, utilisation and storage.