'Ordinary people are paying the price for Rachel Reeves' budget'
In this opinion piece for WalesOnline, Plaid leader Rhun ap Iorwerth argues that Labour has given up on Wales
This was Labour’s last big opportunity to prove it understands Wales’ needs and is prepared to do right by our communities. Polling shows the people of Wales are losing faith, and this Budget only confirms why.
Instead of tackling decades of underinvestment, protecting families from rising costs, and giving our nation the economic tools to grow, Westminster has delivered more of the same.
Weak powers, billions of rail funds withheld, and half-measures on the cost of living. It is clear that Labour has already given up on Wales, six months ahead of the Senedd election.
Once again, Wales is being short-changed. Over £4 billion owed to Wales from HS2 remains in Westminster coffers. Even with the small tweaks made, our fiscal powers are the weakest of any devolved nation, leaving us with less ability to invest in our economy.
Even with a 10% increase in borrowing powers, the Welsh Government’s limits remain far below the £300 million lost to inflation since 2018. Local authorities and even the unelected Crown Estate continue to have more powers to invest. Without meaningful investment, our schools, hospitals, roads, and energy project will continue to fall behind.
The dishonesty we see from Labour on tax is staggering. On the surface, income tax rates remain the same. But freezing income tax thresholds drags 780,000 more people into the basic rate and 920,000 into the higher rate. The minimum wage increase, though very welcome for workers, adds pressure in sectors already squeezed by employers in small businesses crippled by National Insurance rises.
Farmers remain despondent about inheritance tax changes that punish them for simply wanting to keep their farms in the family - the same is true for other family businesses too.
The impact of Labour’s tax changes is clear. The OBR forecasts that real household disposable income will slow sharply, from 3% growth in 2024-25 to just 0.5% in2025-26, and averaging 0.5% a year thereafter. This is well below the last decade’s norm. Ordinary families are paying the price, while the super-wealthy and big banks largely escape scrutiny.
Plaid Cymru called for bold action on the cost-of-living crisis. We called for a review of the unfair standing charges that see Wales paying some of the highest energy bills in the UK. We called for a cut to VAT on household energy bills. Much more could have been done to bring down energy bills for good.
The overdue scrapping of the two-child cap is welcome. But Rachel Reeves’ argument is weakened by the fact that she opposed this for 16 months, even suspending MPs who argued that children should be lifted from poverty.
The mind-blowing leak of the OBR report 40 minutes before Reeves’ speech was fitting for the chaos surrounding this Budget. Weeks of briefings, U-turns, and last-minute announcements have left households and businesses uncertain. That, in turn, weakens confidence in the economy and makes Welsh businesses more hesitant about investing.
At the Cardiff Breakfast Club on Wednesday morning, I spoke to businesses that are deeply concerned about the seemingly endless obstacles imposed on them by Labour. They need certainty and clarity from government – but this Budget will give them neither.
Rather than taxing extreme wealth and big banks, the Chancellor has imposed stealth taxes on ordinary workers, leaving one in four employees paying the higher rate by 2030. Confidence in the Welsh economy is being undermined, and households feel it every day.
It is in this dire economic context that the populist right in Reform UK are able to thrive. But, as Plaid Cymru showed in Caerphilly last month, only we can beat them.
In Plaid Cymru, the people of Wales have a party that will stand up for our communities to ensure fairness for Wales – not standing by while Westminster once again treats us with contempt.
A government led by Plaid Cymru means tackling NHS waiting times, improving standards in education, creating better job opportunities, and addressing the root causes of poverty. That is what Plaid Cymru offers and promises our communities.
There are two competing offers ahead of next year’s Senedd election, but only one credible government: new leadership with Plaid Cymru focused on delivering for our communities, or more division with Reform, an empty vessel making a lot of noise.
Together, we can ensure new leadership for Wales, with radical, ambitious plans.
Labour had its chance. It has failed. This Budget is a stark reminder that without Plaid Cymru, Wales will continue to be treated as an afterthought. Welsh families deserve better - and they will have better under Plaid Cymru.
