Budget 2024: More money for Wales but opponents call it a 'smash and grab budget'

Politicians and voters here in Wales are coming to terms with some of the big changes in one of the most significant UK Government budgets in recent memory.

The Chancellor of the Exchequer announced a series of spending decisions including increasing National Insurance Contributions for businesses aimed, she said, at "rebuilding Britain".

There’s more money for the Welsh Government: an extra £1.7bn in the next financial year, the highest increase since the Covid pandemic, and £25m for coal tip safety here.

But the Welsh Conservatives called it a "smash and grab budget" while Plaid Cymru said it would "feel like austerity to many".

There’s no doubting the significance of this budget, both in terms of the huge amount of tax increases it includes (£40bn) and in terms of what it means politically.

It sets the tone and direction for the next five years at least and, Labour hopes, the next decade or more.

Politically, that also involves demonstrating that having Labour in government at both ends of the M4 will make a difference, hence £25m for coal tip safety, meeting a long-running demand by the Welsh Government and in response to a direct request from First Minister Eluned Morgan.

Hence, too, the headline figure of £1.7bn extra for the Welsh Government over the next financial year, a higher figure than the £170m in March’s final Conservative budget and one that the UK Government says is the highest annual settlement since devolution began 25 years ago.

But that headline figure stems from UK Government spending on the NHS, schools and housing among other things, and while it’s up to Welsh ministers how they spend that money, they have strongly signalled that they will follow suit so their room for manoeuvre will be self-limited.

Those decisions will come in December’s Welsh budget. Whatever they are, Labour will need to show voters that the relationship is benefiting Wales - an early electoral test is looming ever closer with polls suggesting that the 2026 Senedd election could be incredibly difficult for the party.

Labour’s Welsh Secretary Jo Stevens said: "This Budget has delivered for Wales for the first time in a generation.

"The biggest settlement since devolution will provide a record boost to spending for the Welsh Government to support public services like the NHS while thousands of working people across Wales will benefit from today’s increases to their wages.

"Little more than a week after the anniversary of Aberfan disaster it is fitting that we have committed £25m to make coal tips safe. It is testament to the new relationship between the UK and Welsh government, based on cooperation, respect and delivery.

"We will also drive economic growth and support our world-leading Welsh industries with Investment Zones, Freeports and funding for communities across Wales.

"We have prioritised money to support our steel communities, with nearly £100m to support workers and businesses.

"This Budget delivers on what’s important to the people of Wales, and shows the difference we can make when two governments work together for the benefit of all."

Opponents are unimpressed.

The Welsh Conservative leader in the Senedd, Andrew RT Davies, said: "Labour’s smash and grab Budget will have a devastating impact in Wales.

"This Budget is built on the back of keeping pensioners cold this winter, and the National Insurance rise will be an incredibly destructive jobs tax for Wales’ economy which is already struggling after decades of Labour rule.

"Nobody is surprised that the UK Labour Government has cut business rates relief, just as they have done in Wales, further proving that the Labour Welsh Government’s abysmal record is the blueprint for Keir Starmer’s party. And just like their assault on rural communities in Wales, now Labour’s change to inheritance tax rules risks marking the end of the family farm."

Meanwhile, Plaid Cymru’s Treasury spokesperson Ben Lake called it a "missed opportunity" that "falls short of the transformative change that was promised during the General Election".

He added: "Labour promised two governments working together, but it appears the Welsh Government was sidelined yet again by the UK Government, as there is little good news for Wales.

"Despite promising that those with the broadest shoulders would pay their fair share, changes to employers’ National Insurance will disproportionately hit businesses employing lower paid workers, which will have an impact on people across Wales. Furthermore, changes to agricultural property relief will undermine the family farm model that is at the heart of Welsh agriculture.

"The uplift to Wales’ block grant will not rebalance Wales’ fiscal settlement. Welsh councils alone face a £559 million budget gap in 2025-26. Despite promising to 'get to grips with HS2', the Chancellor failed to deliver the billions owed to Wales. Additionally, by keeping cuts to the welfare budget planned by the Conservatives, failing to help pensioners keep warm this winter or bring an end to the two-child cap, this will still feel like austerity to many."

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