Welsh ministers press Healey for rail cash and budget protection

English spending on devolved services could bring additional money to Wales

David Deans, the Wales politics reporter, and Felicity Evans, the Wales money editor, reported for BBC News that Plaid Cymru ministers want extra cash for railways and public services in Wales ahead of the UK government’s Budget on Wednesday. The Budget sets Westminster’s tax and spending plans for the year ahead, and because healthcare, schools and roads are controlled by the Welsh government, more cash given to English public services could also result in extra spending in Wales.

Welsh funding and devolution

Welsh Finance Minister Elin Jones asked Chancellor John Healey to set out a spending plan that “finally treats us fairly”, and said Wales had been short-changed “for years”. “This UK Budget is the moment of truth, and we need the chancellor to act, not just acknowledge the problem,” she said.

Jones asked Healey to bring forward £1bn of the £14bn the UK Labour government had promised for long-term rail funding in Wales. She also sought extra money to help the Welsh government set its 2027-28 budget, which currently faces a real-term cut in day-to-day spending. Jones had previously claimed Wednesday’s settlement could be the worst for the Welsh government since the Covid-19 pandemic.

She said: “Wales pulls its weight in the UK economy. We contribute. Now we need the UK government to match that ambition with action and deliver a budget that finally treats us fairly.”

There have also been calls from Labour MP Nia Griffith to give the Welsh government greater flexibility to borrow to fund investment projects. A senior Welsh Labour source said they had been “pressing really hard for fiscal flexibility”, along the lines of Griffith’s request.

The Budget comes ahead of the first substantive meeting between the prime minister and the first minister at the National Economic Council later that week, where devolution was expected to be discussed.

Household bills and market effects

Shoppers and traders at Swansea Market, described as one of Wales’ busiest, told BBC Wales that once again the cost of living was their biggest concern before the spending announcement. Help with energy costs was at the top of many people’s lists of things they wanted help with in the Budget.

Louise asked, “Will we be able to see through the winter without having to borrow money,” and said, “It’s quite a worry.” Like others at the market, Louise admitted feeling “anxious” about the winter, despite having saved some money with her supplier. She said she was worried about the winter because “everything is getting more expensive”.

Dad-of-two Richard from Swansea said his wage did not keep up with rising energy bills, leaving his family “penny pinching towards the end of the month”. “Things that we used to have as a bit of luxury are out of the question, days out with family cost a fortune,” he said. He also said “a lot of things that used to be affordable are now out of reach”.

BBC News reported that prices rose at the beginning of the month and that typical bills were forecast to increase by 16% in January because of the conflict in the Middle East. Rural homes that use heating oil had also seen a dramatic increase in costs, and the chancellor had already announced that he would remove import taxes to bring the price down a little. Healey had talked about giving people “breathing space” from cost-of-living pressures and had revealed a package of small measures he is calling “everyday fixes” ahead of the Budget. Prime Minister Andy Burnham also wants to cut standing charges from gas bills. A UK government spokesperson said the chancellor would focus on giving households and businesses “a bit of breathing space where we can”. BBC News said any further Budget support would likely be limited and targeted at the poorest households.

The cost of filling up cars soared this year as the conflict in the Middle East pushed up the price of oil. BBC News reported that petrol prices hit a four-year high in September and that diesel prices also rose. The cost of transporting fruit and vegetables was one issue putting pressure on Gareth Evans, the fourth generation of his family to run the Get Fresh fruit-and-vegetable stall at Swansea Market. “It’s a struggle at the moment,” he said. “We get costs passed on to us from our suppliers.” He also said: “We’ve also got vans ourselves and we supply caterers and diesel is very expensive.” Gareth had taken over running the stall from his father, Chris, who had worked there for 50 years. Emma, who runs a pet store, said her rising costs meant she had had to increase prices for customers, as “it goes down the line”. She believes many working people are “struggling to live now”.

Other Budget measures and party proposals

The chancellor was expected to freeze the planned increase in fuel duty in January. The 5p reduction had been introduced by the previous Conservative government in 2022 and had already been extended twice. A UK government spokesperson said: “The chancellor is focused on giving households and businesses a bit of breathing space where we can. That’s why we have removed VAT from electricity bills, extended the 5p fuel duty cut and frozen rail fares.”

One of Jones’s requests was for the UK government’s help for a flagship scheme to help address child poverty. The Welsh government was planning a Cynnal trial paying 15,000 children in families on universal credit £10 a week. The scheme was modelled on the Scottish government’s child payment, which BBC News reported had helped to reduce child poverty in Scotland. Welsh ministers asked the UK government to exempt the payments from tax and benefits calculations so recipients do not see a cut to their income. BBC Wales has been told discussions about the child payment were still ongoing, which suggests there will be no announcement on Wednesday. Burnham had previously said he was “open” to considering the request, which had already been granted to facilitate the scheme in Scotland.

Healey was also expected to announce how much the state pension would increase by next year. It looked likely to top £13,000 a year, with the full, flat rate expected to increase by £488 a year in April because of the triple lock guarantee. Pensioners who relied entirely on the state pension were already set to be shielded from paying income tax, which usually kicks in at £12,570. Specific details were due in the Budget.

On working-age welfare, BBC News reported that Healey had prepared Labour MPs for potential cuts to the benefits bill in a speech at this year’s party conference. BBC News cited reports that young people not in education, work or training might see changes to their support. It said those changes could be unveiled after the Budget, when former Health Secretary Alan Milburn publishes his recommendations for reform.

Other parties set out competing priorities. Reform UK Senedd member Cai Parry Jones said his party “would stop using Welsh people as cash cows”, and would build an M4 relief road, scrap family farm tax, and “reward working people” by raising the tax-free personal allowance to £15,000. Welsh Conservative Senedd leader Darren Millar called for the UK government to make money available for major road projects, including an M4 relief road, and more defence spending in Wales, calling for a “pro-union Budget deal”. David Chadwick, the Welsh Liberal Democrat MP, said his party wanted a Budget that gave Welsh families “some much-needed breathing space”, calling for a 10p cut in fuel duty, a guarantee to bring down energy bills, and a temporary VAT cut for hospitality.

Short briefs

Two related BBC News items appeared alongside the main report. One, published 8 hours ago, said the minimum wage was set to rise but that 18- to 20-year-olds would not get a bigger increase. Another, published 1 day ago, said Healey would shield low-income pensioners from income tax in the Budget. Other briefs in the same feed reported that campaigners warned a Welsh island could be the target of a nuclear attack, that Spotify uploaded the lyrics for Dolly Parton’s Welsh version of “Jolene” in Irish, and that a shrine to a Doctor Who spin-off character was to be regenerated into a piece of art.