Austerity must be rejected in a crisis

WHO would want to be a finance minister at this time? It’s easy to overlook the fact that the huge extra demands put on the Welsh Government’s budget by Covid-19 come on top of existing pressures.

Before the pandemic, additional sums were having to be found to cope with ever-increasing obligations to spend more on health and social care because people were living longer. At the same time, areas like children’s services need to see above-inflation budget rises if acknowledged problems are not to spiral out of control.

People also have an expectation that public services will not deteriorate in quality, especially as there has been a tendency for a rising proportion of local authority funding to come from council tax as opposed to Welsh Government grants.

Nevertheless, it’s inevitable that Covid-related spending will be seen as a top priority.

The Welsh Government’s Finance Minister, Rebecca Evans, has listed the administration’s priorities, rightly emphasising policy areas designed to protect health and the economy and to advance equality.

Today we shall learn the details of budget allocations.

Inevitably, as some budgets will go up, others will come down.

Ms Evans has accused the UK Government of cutting the Welsh Government’s capital budget – a measure that would potentially have a serious impact on the ability to build new schools, hospitals, housing and transport infrastructure.

In these circumstances, she has used an alternative means of financing projects – the Mutual Investment Model – that, while more expensive, she insists is the only way to deliver schemes that are badly needed.

It must be hoped that the UK Government will increase spending further before the Welsh Government’s final budget is agreed in March.

These are extraordinary times and it makes sense to take advantage of the historically low lending rates available to governments.

Austerity policies are economically illiterate at the best of times, but especially self-defeating at a time of unprecedented crisis.

With a vaccine due to be rolled out over the next few months, it’s essential that the core elements of our social fabric are protected by public sector intervention.

We hope that scrutiny of the spending priorities announced by Ms Evans today will validate the commitments that have been trailed.

It’s important that as many people as possible understand the rationale behind her decisions.