“Cabinet will meet tomorrow morning to discuss the implications for Wales, and Ministers will respond more fully after that. But it is already clear that – in contrast to the UK Government’s rhetoric – this is a Budget which will hit the poorest and most vulnerable in our society the hardest and take big risks with the recovery.
“The proposed tax break for businesses to assist in creating jobs outside London and the South East is welcome, as is the decision to make no further cuts in capital budgets beyond the previous Government’s already tough plans. Continuing capital investment is key to supporting the recovery and to transforming public services.
“Detailed UK spending plans for the period after 2010-11 are not included in the Budget. So it is still not yet possible to say exactly what our future settlement will be. But this Budget – with an unprecedented combination of tax increases, cuts in benefits and public spending– is grim news for most people across the UK and particularly bad for people in Wales.
“Our view – shared by many economists and business leaders – is that cutting spending by too much, too soon could damage the economy as well as public services. The deficit needs to be reduced and Wales will play its part in this. In fact, the Assembly Government has led the way in the UK and started planning for these challenging times over a year ago. But the deficit should be reduced at a pace which does not threaten the economic recovery and without incurring massive damage to public services.
“The cuts set out today by the UK Government take big risks with the fragile recovery that we have been seeing.
“We are concerned that the UK Government has not demonstrated how it will encourage growth to help address the deficit and bring us fully out of recession. We need to take a longer term approach in Wales which limits the impact on jobs and services, to provide stability and resilience for the future – a smaller public sector will not guarantee a larger private sector.
“We are disappointed that the Budget does not recognise that Wales is already underfunded by £300m per year.
“The UK Government must act now to implement the conclusions of the independent Holtham Commission and implement a floor ahead of the Spending Review to start addressing under-funding straight away.
“This budget should have protected the vulnerable and WAG is committed to do all it can to continue to invest to protect jobs and services in Wales.”
