‘Never has the need to abandon failed policies of austerity been more urgent’
also announced plans to consult on levying business rates on independent schools and private hospitals for the first time.
He also said he would consult on exempting care leavers from paying council tax until they are 25.
Announcing the Welsh Government’s spending plans for 2019-20 to AMs at the Senedd yesterday, Mr Drakeford said: “Never has the need for the UK Government to abandon the failed policies of austerity been more urgent as the darkening shadow of Brexit looms over this draft budget.
“The chief economist’s analysis also published today shows that Brexit already costing every person in Wales and the UK up to £400. So for every household this means a loss of up to £800.
“This Welsh Government’s unremitting efforts to protect frontline services are carried out against those headwinds and those of shrinking budgets and escalating demand.
“If the funding available to Wales had simply stood still at its 2010 value – not rising by a single penny – the budget before members would have £800m more to care for older people; help children get the best possible start in life; to protect our environment and invest in the future of our economy.
“If our budget had grown in line with the economy since 2010, simply taking a static share of the national cake, today’s budget would have £4bn more to invest.
“And if it moved in line with the growth in public expenditure achieved over the 50 years prior to 2010, the budget in front of you would be £6bn higher.
“Little wonder then, that this has been the most difficult budget round yet. As well as the dual challenges of rising costs and spending constraints, our hard-pressed public services face the challenges of rising inflation, unfunded pay pressures and, the UK Government’s unilateral decision to change public sector pension funding, transferring a further £300m of unplanned costs onto Welsh public services.”
Nevertheless, Mr Drakeford announced a package of £12.5m to help tackle child poverty, as well as a £60m threeyear local authority road refurbishment scheme to repair the damage associated with a harsh winter and this year’s hot summer.
He said that £40m had been raised from landfills disposal tax – significantly more than expected thanks to the new Welsh Revenue Authority (WRA) set up to collect taxes. Mr Drakeford said: “In its first six months, the WRA has collected more than £100m to support Welsh public services and made, I believe, an outstandingly successful start as a new institution in a devolved Wales.”
Welsh Conservative finance spokesman Nick Ramsay attacked the Welsh Government for failing to make a significant contribution to the UK’s debt reduction.
He said: “Recent data on the shares of gross value added by the Office for National Statistics have shown that England is actually the only nation in the UK that has substantially reduced its deficit per capita, equivalent to £158 per person.
“Meanwhile, Wales has 27 times more borrowing per person, with a deficit of £4,251 per person. The UK Government is set to deliver a surplus budget for the first time since 2001, a £112bn drop in borrowing since the financial crisis, but the Welsh deficit fell by just £2bn in the same time. Doesn’t that mean that it has been left almost entirely to England to close the budget deficit, and is that right? Can that possibly be right?
“Rather than the usual harsh words about austerity, perhaps you should look a little bit closer to home about what we’re doing in Wales to deal with the financial problems that
this country was left with by a previous government.”
Plaid Cymru finance spokesman Steffan Lewis said: “Society and people are suffering greatly because of the totally unnecessary and hardhearted decisions taken by the Tories in Westminster to continue with cuts to public expenditure, despite all evidence showing clearly that the policy is failing, even measuring it against its own stomach-churning philosophy.
“The economy is not growing at the same rate as other economies because we are not investing. We are just seeing cuts upon cuts for ideological reasons, rather than a policy based on common-sense economics, and the situation is only going to get worse.
“The truth is that we need farreaching measures in order to tackle the economic slumber that our nation has been in for decades, rather than papering over the cracks.
“We are in favour of establishing an infrastructure commission with the powers to raise significant funds in order to invest in our infrastructure to encourage growth and create jobs.”
Councillor Anthony Hunt, finance spokesman for the Welsh Local Government Association and leader of Torfaen council, said: “The publication of the Welsh Government’s outline draft budget marks the ninth year in a row that councils have been left with significant budget shortfalls during the era of austerity. The scale of the financial challenge facing local services in 2019-20 is enormous, at £264m or around 5% of net spend.
“This includes the challenge of finding £159m for much needed pay rises for hard working staff, and many other pressures on local services.
“The challenge facing councils to keep vital local services like schools and social care running cannot be overstated. If austerity doesn’t end soon, public services as we know them will be a thing of the past.”
Commenting on the Finance Secretary’s draft budget Sara Jones, head of the Welsh Retail Consortium (WRC), said: “Today’s draft budget, whilst in outline form, has been a missed opportunity for the Welsh Government to tackle head-on the ongoing challenge of the outdated business rates system.
“The WRC has been calling for a freeze on the multiplier in this year’s Welsh Budget and for a more expedient approach to radical reform. This isn’t about paying less, it is simply not reasonable to continue hiking up bills on struggling businesses.
“With the retail industry, and indeed the Welsh economy, going through a period of immense change under enormous pressure, this is the time to focus on growth and demonstrate confidence in a sector that is undergoing such transformational change.
“Without the Finance Secretary’s intervention, the consequences for town centres and jobs will be even more keenly felt in our most vulnerable communities across Wales.”
On the Welsh rate on income tax, Ms Jones said: “It is positive to see that the Finance Secretary has ruled out any increase in income tax in the forthcoming financial year, especially with a further planned rise in statutory minimum pension contributions next Spring due to take a bite out of shoppers’ purses.
“Retailers want to help build the confidence of their customers, but to do this they need support of Government policy that keeps down the cost of living, not exacerbates it.
“We need to do all we can to ensure that, for consumers, the squeeze on household incomes will not be compounded as the pound in their pocket buys them even less at the checkout.”
Anne Meikle, head of WWF Cymru, said: “Most of our basic needs – air, water, food – rely on a healthy environment.
“So it’s alarming that at a time when the Welsh Government is talking about ‘bread and butter’ issues, nature is not getting the attention it deserves.
“We’re losing wildlife at an alarming rate, with one in 14 species in Wales at risk of disappearing altogether. With Brexit only months away, extra resource and protection is needed to make our environment fit for the future.
“Today’s announcement of new investment in areas such as tackling waste crime and air pollution are positive steps, but will not be enough to protect our natural resources for future generations.
“The Welsh Government must also invest in activities which restore nature and wildlife, such as prioritising nature friendly farming.”