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Budget Day

Betsan Powys | 14:08 UK time, Wednesday, 23 March 2011

From the budget tent to the Cardiff Bay bubble.

As a result of the budget the Assembly Government will get an extra £65m over the next five years, including up to £34m next year. I'm sure they're not planning to spend it all at once.

If anyone had imagined Labour and Plaid would get anywhere today with their calls on the Chancellor to reform the way Wales is funded - and I doubt, frankly, whether there were many who truthfully did - then they'll have been disappointed.

Mr Osborne simply reaffirmed "the Government's commitment to fair and accountable funding for Wales, including taking forward discussions on all aspects of the final Holtham report".

From the Welsh parties a run through the initial responses for you:

Conservative leader Nick Bourne:

"By cutting Corporation Tax, simplifying the tax system and reducing the burden of regulation on businesses, the UK Coalition is showing clearly that Wales and the rest of the UK are open for business.

"Today's budget will provide welcome relief to families, pensioners and small businesses across Wales, who have had to tighten their belts to meet rising fuel prices.

Leader of the Welsh Liberal Democrats, Kirsty Williams:

"The tax cuts for Welsh workers announced today, taken directly from the Liberal Democrat's election manifesto will reduce income tax by £326 for over 1.1 million Welsh workers, taking 51, 000 of the poorest workers out of income tax altogether.

"Many of the measures to boost growth and create jobs, such as the Enterprise Zones, investment in English Universities technical colleges, the holiday on business rates and the support first time buyers, will apply in England and will now need to be considered by the Welsh Government".

Shadow Welsh Secretary Peter Hain:

"George Osborne may say this is a neutral budget, but the truth is like every Tory budget is not neutral for Wales, where we have been asked yet again to pay for tax breaks for banks.

[UPDATE A Wales Office source says that's plain wrong. What the Chancellor said - they point out - is that he was adjusting the bank levy rate next year to make sure that there was no overall tax break for the banks.]

Mr Hain goes on:

"This is the same old Tories: no plan for growth, and asking families to pick up the bill for the actions of greedy bankers and the actions of this reckless Chancellor.

"This was Cheryl Gillan's big test and she flunked it. Wales is still being hit disproportionately hard by the Tory-led Government.

Plaid Cymru's Jonathan Edwards:

"The UK Government should have focussed sensibly on growth first, rather than making severe cuts.

"The truth is that the UK Government has no plan B, and worryingly there is a very real threat of a decade of economic stagnation.

"Plaid is the only party doing anything to improve our economy in Wales such as through our proposed new Build for Wales investment vehicle which would raise up to £500m and create up to 50,000 jobs in Wales.

And the response of the Green Party's Jake Griffiths:

"It is becoming clearer by the day that George Osborne's cuts are not working, and yet he is determined to carry on with the same harmful policies. Not only do they make no economic sense but they will threaten the livelihoods of the hundreds of thousands of people who rely on the services now under threat."

Comments

  • Comment number 1.

    As someone who is inflicting all this pain in order to to cut the deficit, he's not doing that well is he?

  • Comment number 2.

    And the proof of the "it is working" pudding ..... well the sky hasn't fallen on our heads, and "all this pain" at #1, see the doctor, the painkillers proscribed in Wales will be free.

  • Comment number 3.

    This idea of combining income tax and NI, creating a new minimum tax rate of 31%.
    At present, State pensioners do not pay NI. Does this mean they will now have an effective tax hike of over 50%? Or is the Chancellor going to give them new tax codes to compensate for the difference? I hope someone is looking into it. I would hate to think that the Tories are bashing pensioners.

  • Comment number 4.

    Regardless of your political persuasion surely the busted flush that is Peter Hain is now just embarrassing. As for creating 50,000 jobs do I have any higher bidders? say 51,000 and the keys to the state trough are yours. It is a valid argument that cutting too deep too fast is detrimental to any "green shoots" sprouting over the horizon but does anyone believe anymore that spending money you have to borrow from your grandchildren is a sound economic model?

  • Comment number 5.

    I see that the SoS for Wales is offering to work with the Welsh Government on the setting up of Enterprise Zones in Wales. I sound a note of caution. They need to be tightly controlled (if that is not a contradiction). I lived in the West Midlands when one was created at Merry Hill. Instead of being an area where small businesses could be set up it became a vast warehousing and retail park. The result was to kill nearby Dudley. All the major shopping chains moved to the new Merry Hill shopping centre. The Dudley town centre became a wasteland with around 80% vacant shops and the remainder being dominated by "cheap shops" and charity outlets. A report at the time said that a net gain of 7 jobs was made to the area. In the mean time the council lost tax, as the businesses at Merry Hill were exempt from business rates for 5 years and the heart of the town was turned into a waste land. Further the good people of the area suffered as huge numbers of shoppers piled in to the Merry Hill shopping centre on roads not designed to cope with the traffic. Enterprise Zones in this example were a complete failure and damaged the economy, social cohesion and well being of the community. This is a policy that needs to be carefully thought out.

  • Comment number 6.

    I'm glad somebody has raised the issue of abolition of NI and its incorporation into basic taxation, I've hardly seen any comment on the relevant blogs. This is a major step and has other implications besides pensions paying it, to avoid it the tax code would get even more complicated, what happens to the Social Fund? Does that get the axe as well? I don't fancy an NHS manager getting much change out of the Treasury! If you thought the days of Brownite style manoeuvrings were over then you are sadly mistaken. Take todays' quiet statement that £50 was to be shaved off future pensioner winter fuel payments, not included in the Budget but slipped out later, how very 'New' Labour. Plus ca change it seems.

  • Comment number 7.

    conjoining these 2 taxes will not be one simple step thats for sure but for all those pensioners who think their benefits would half this does not have to be the case unless politicians act underhandedly (surely not)!. Tax allowances could rise for those of pensionable age,income derived from pensionable sources could be at a lower rate. PAYE- pay as you earn , the clue is in the title and doesn't have to be applied to pay as you've simply tired, sorry (PAYSTY)

  • Comment number 8.

    The cut in corporation tax is UK-wide. That means that business will be attracted proportionately to those areas where businesses have traditionally thrived. In other words, more of the same. The depressed nations and regions of the UK will be further impoverished. Wales especially so, as the poorest nation in the UK. Growth figures for the UK's economy have been downrated again - very bad news for Wales.

    As commented at #5, enterprise zones should come with a health warning. If my memory is correct, one was established in Swansea in the early 80s, to the detriment of the city centre, which by today is somewhere behind cities in the former Soviet bloc. Is the government going to electrify the main line to that city? It might cost £40 million. A sum of money readily squandered on bombing oil-rich Libya - Cameron's pet project - another war - with cruise missiles at £300,000 a time. (Btw, I'm no admirer of Gaddafi - he deserves what comes his way). It's just an indication of this government's priorities.

    Pensioners have already been hit hard with rock-bottom interest rates on their lifetime savings which they rely on for income. No concessions have been made to them on that score. Public service pensioners got no rise in their pensions in 2010-11. Pensions are also going to be uprated according to CPI rather than RPI as previously which will result in smaller pension increases over the years.

    I heard a representative from Saga explaining that the merging of income tax with NI will result in savings interest being taxed at 31% instead of the current 20% - another body blow for pensioners. Wales has a high percentage of elderly people in its population.

    There has been a council tax freeze in Scotland for four successive years, and in most of England in 2011-12. Not so in Wales, which has seen successive council tax rises above inflation. The police authority precept is up by five percent from April.

    The Barnett Squeeze is hitting Wales hard. The ConDemn government refuses to address it.

    I read somewhere on the BBC's website that 'the government is aware that people are having a hard time' - and the cuts haven't really begun to bite yet. How multi-millionaire members of the Cabinet can have any idea what its like to live on or near the bread-line defeats me.

    Osborne, we're told will be watching the oil companies 'like a hawk' to ensure that the £2bn tax hike he hit them with doesn't result in higher pump prices - I can't see how he could stop them doing it! A penny off the price of a litre doesn't help me much when it costs over £80 to fill the tank of my car with diesel - a saving of 58 pence. Big deal!

  • Comment number 9.

    8. Bryn_Teilo

    Osborne, we're told will be watching the oil companies 'like a hawk' to ensure that the £2bn tax hike he hit them with doesn't result in higher pump prices - I can't see how he could stop them doing it! A penny off the price of a litre doesn't help me much when it costs over £80 to fill the tank of my car with diesel - a saving of 58 pence. Big deal!


    It seems we have been conned again the price of petrol and diesel hasn't come down because the companies claim the fuel in their tanks was already bought under the old system.

    Therefore they have to sell it at the old price at the old tax rate.

    Yet the Chancellor said the price was coming down on the evening of the budget.

    Surely the Chancellor and Civil Servants should have realised this.

    What a shambles by a shambolic Government.

  • Comment number 10.

    Where have all the flowers gone.

    It is very quiet on here.

  • Comment number 11.

    In reply M8,9,10; Whilst 1p a litre may only mean 58p when you fill your car (probably once since Wednesday). If your filling a 2500 litre tank with diesel a few times a week, the savings would be much larger. Don't get me wrong, the oil companies, producers and retailers are all thieves and fuel tax adds to the racket, but maybe, just maybe, this cut will signal the begining of the end, or begining of the begining of the end of the government war on the motorist and the road transport industry. An issue on which, the assembly is rather quiet...

  • Comment number 12.

    11. merthyrmarkf

    In reply M8,9,10; Whilst 1p a litre may only mean 58p when you fill your car (probably once since Wednesday). If your filling a 2500 litre tank with diesel a few times a week, the savings would be much larger. Don't get me wrong, the oil companies, producers and retailers are all thieves and fuel tax adds to the racket, but maybe, just maybe, this cut will signal the begining of the end, or begining of the begining of the end of the government war on the motorist and the road transport industry. An issue on which, the assembly is rather quiet...

    As are the MPs from the main Westminster parties.

    Though perhapes I can direct you to these.

    http://www.english.plaidcymru.org/news/2011/02/07/support-grows-for-plaids-call-to-tackle-fuel-prices/

    http://www.bbc.co.uk/news/uk-scotland-12365253

  • Comment number 13.

    enterprise zones can be successful but retail must not be included in them for the reasons given in posts above.

    Bryn_Teilo - council tax in Wales has not increased because of the barnett squeeze, they have increased because year on year WAG INTENTIONALLY reduces grants to the council keeping the money for their own profiligate waste.

    the figures are available from stats if you care to search.

  • Comment number 14.

    I would add Nospin that they should not be used by companies relocating there, it should be for new businesses only - otherwise you will have no growth or gain in jobs. Also Council Tax in Wales is still substantially lower than in England. Why because the Welsh Government and before it the Welsh Office chose to subsidise Welsh councils to a greater extent than the authorities in England.

  • Comment number 15.

    #13

    However you put it, you can't get around the fact that Wales is seriously underfunded by central government, and that it's getting worse. Nothing is being done about it.

    Emotive terms such as 'profligate waste' can easily be bandied about -

    NHS (England) computer system £13bn
    Afghanistan £4bn a year and rising
    Iraq War £9bn
    Two gigantic aircraft carriers with no aircraft £5bn (current estimate)
    New Trident submarines and missiles £20bn (Govt figures) £95bn (Greenpeace)
    RAF Typhoons in Libya £35,000 an hour
    RAF Tornado GR4 £70,000 an hour
    Tomahawk Cruise missiles £300,000 each (10 fired so far)
    Royal United Services Institution estimates £3m a day cost for Libyan campaign.

    If I 'cared to search' the list would a good bit longer.

    Had UK had been governed well under the Westminster system, with a strong and vibrant economy, excellent health and social services, modern infrastructure, roads and railways etc, then I'd have less cause to gripe. The problem is that on just about every indicator one could employ the record of successive governments has been abysmal. The UK compares badly with its European neighbours. The lowest state pension is a good example of how the UK treats its elderly citizens. People on low wages are still paying income tax.

    The measures taken in the Budget will not benefit Wales. They will increase the differentials between the prosperous and poorer parts of the UK. Until the full range of fiscal powers are devolved, then there are no prospects for significant change in Wales' economy.

  • Comment number 16.

    Well put Bryn-Teilo.

    I am fed up of listening to interviewers, especialy on the BBC, when people they interview complain about cuts to services in or to their communities.

    The first thing the interviewer says is 'Yes but the country is in such a difficult financial situation wouldn't you rather see that money spent on Hospitals or schools' or some other flimsy reason.

    No one answers their patronising question with the type of answer/comment you make.


  • Comment number 17.

    As far as UK government waste is concerned, the Office for National Statistics (ONS)awarded a £150m contract for handling 2011 census data for England and Wales to Lockeed Martin, the US arms manufacturer which makes F16 jets, Trident nuclear missiles and cluster munitions. The latter have caused the deaths and mutilation of thousands of innocent civilians, particularly children who pick up unexploded ordnance.

    Ironically, the UK government along with 108 other states has signed the Convention limiting their use. Yet the ONS, an agency responsible to the Westminster Parliament, awarded the contract to Lockheed Martin. As a US company Lockeed Martin has to abide by the Patriot Act by which the US government can demand all information held by it.

    The census forms have to be filled in under the threat of a £1000 fine and a criminal conviction.

    Morality plays little part when it comes to the UK spending taxpayers' money. We're paying the price for the banks gambling - and losing - with our money. That's what this budget was about. There are only a handful of millionaires in Wales, yet the majority of the members of the Cabinet are very wealthy indeed. How can such people ever govern the country in the interests of the impoverished majority?

  • Comment number 18.

    Spare us all from Peter Hain. One of the most ineffectual and coasting politician to retirement if ever there was?

    This man spends more money on his personal grooming in a day, than most low paid workers earn in a fortnight? As for his expenses and salary? Go to TheyWorkForYou.com.

  • Comment number 19.

    corum-populo-2010,

    your strange use of the question mark is reminiscent of a certain contributor to this blog forum who used to bang on about English and Welsh surnames. Any relation?

  • Comment number 20.

    Response to post 19 @ 13:41pm on 26 March 2011 - 'Arihfach'

    No - no relation. Tragically, I post under my user name on all BBC blogs. My over use of the question mark is about getting past the moderators when being critical of politicians.

    As for English and Welsh surnames - I don't know - it is still down to the male line on marriage as with most countries. My heritage is a mix of Irish, Swedish, Spanish and English. One tiny example, my father's great, great grandparent moved to Wales from Sweden and married a Welsh lady. Her parents were Spanish and Irish with English and Scottish cousins related to other cousins born in Dartmoor.

    So, 'Arihfach' are we now clear that I may even be related to you!!!!

  • Comment number 21.

    Post Script: we should check out our DNA in our increasingly divided island. It may surprise you if you took the time - it may also make us all less tribal when we realise who our mixed ancient ancestors are.

    There is no purity of race - only lack of space, and lack of integration that causes divisions.

  • Comment number 22.

    #21

    I find the implication in your remarks slightly disturbing, and somewhat patronising, particularly the use of words and phrases like 'tribal' and 'purity of race'.

    Every student of politics knows that there are two kinds of nationalism - ethnic and civic. If you aren't aware of that, then with respect, I suggest you read up on it. Plaid Cymru and the SNP are civic nationalist parties. Race and ethnicity are not factors. It is a common misunderstanding.

    There are about two hundred sovereign states in the world which jealously guard their sovereignty. The people of Wales and Scotland - regardless of race and ethnicity - can legitimately lay claim to sovereignty for their nations if they so desire, and thus join the other nation states. There is nothing sacrosanct about the UK as a political entity - it hasn't always existed as such, and is in a state of evolution, as is everything else on this planet. Unity is not an end in itself - it has to serve a purpose. If it doesn't work well, then another solution is required.

    My desire for self-determination is based on the belief that Wales will be better governed, more prosperous, and its citizens 'happier' as a result. Hitherto it has been badly governed and relatively impoverished - there are few who would gainsay that. There are no signs that things will improve under the present system. It has nothing to do with ethnicity, race or tribalism - DNA isn't part of the equation.

  • Comment number 23.

    In reply to M12; the nationalists making a noise on their website is very different from the assembly actually making their feelings known on fuel duty. I know they have no power over it, but they can make their opinions known ! Also, not so long ago the nats and the greens were one and the same in local and euro elections in Wales, so a bit rich for them to call for a duty cut know !

  • Comment number 24.

    In reply M15, besides listing all those items, how about all the items of Scotch, Welsh and Ulster waste ?
    Or the social secutiry / welfare budget for the workshy of Wales ?
    Everyone can find their own little "hobby-horse" of waste using government figures...

  • Comment number 25.

    In Reply M22, Sorry old boy, simply do not belive it, welsh nationalism is all about race, language etc. I know the current line is to be Welsh, you simply need to feel welsh and make Wales your home ! And of course learn welsh "spoken the length and breadth of the 'country'" !
    Are the Poles welsh ?
    Are the Russians welsh ?
    Are the Portugeese welsh ?
    But more importantly are all the english football fans living here, welsh ???
    It's all about DNA and Race for the nationalist and since DNA and race is nonsense, then it has to be about language and since that is an irrelevance for the vast majority it has to be something else and the only thing left is anti-English and anti-British sentiment. If it is civic nationalism, why not acknowledge the degree of pro-English feeling in Monmouthshire and agree to a discussion about seperation between Monmouthshire and Wales.

  • Comment number 26.

    #25

    You can believe what you like, reality is something different. You are the one expressing neo-racist sentiments, and ascribing them to others.

    It's been said here before that the English Democrats (or whatever they call themselves) stood for election in Monmouthshire on a platform of union with England, and polled 1-2 percent.

    The historic county of Monmouthshire/Gwent had a 20,000 Yes majority for legislative powers in the recent referendum.

    'Are the Poles welsh ?
    Are the Russians welsh ?
    Are the Portugeese (sic) welsh ?'

    No, but but they are sovereign nations. Would you deny them that right? They also, are civic nations.

    As far as the UK budget is concerned, what are your suggestions for making Wales a prosperous country?

 

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