Tuesday, September 14, 2010
A cut too far?
There is an interesting little spat in the Western Mail this morning in which Plaid Cymru’s economic adviser, Eurfyl ap Gwilym, claims that senior Assembly Government figures, including First Minister Carwyn Jones, have outlined spending cuts significantly higher than those necessitated by the UK Government’s Office of Budget Responsibility:
Dr ap Gwilym said that Mr Jones implied the cumulative effect of the cuts over three years amounted to 16.5%, or an average of 5.8% per year. That compares to his estimate, based on the Office for Budget Responsibility (OBR) forecast, of 9.3% and 3.2%, respectively
Dr ap Gwilym said: “It is significant that the forecast cuts in the Wales budget estimated here are much lower than those alluded to in the First Minister’s speech and in the later statement by the Finance Minister. By 2013-14 the difference in that year alone is around £1bn.
“It is difficult to reconcile the forecast cuts as set out both in Labour’s 2009 and 2010 UK budgets and in the Con-Dem 2010 Budget with the planning assumptions being employed the Welsh Government.
“Perhaps it is being deliberately used either by the Treasury or the Welsh Government to ‘flush out’ much greater potential savings than those being sought in practice or to provide a larger contingency fund.”
This row underlines my view that speculation is getting out of control and that we would all be better off waiting to see what is actually announced rather than making it up on the hoof from leaked documents and half-formed rumours.
More interestingly though Dr. ap Gwilym's assertions do not just indicate a Labour Plaid Cymru split within the One Wales coalition but a rift between the nationalists' chief economic advisor and his own Ministers. After all it is not just the First Minister and the Finance Minister who have endorsed the level of cuts the government is preparing for, it is the whole cabinet.
If the Welsh Government is being over-cautious or too savage, depending on your point of view, they are doing so in the full knowledge of and with the endorsement of Plaid Cymru Ministers.
Dr ap Gwilym said that Mr Jones implied the cumulative effect of the cuts over three years amounted to 16.5%, or an average of 5.8% per year. That compares to his estimate, based on the Office for Budget Responsibility (OBR) forecast, of 9.3% and 3.2%, respectively
Dr ap Gwilym said: “It is significant that the forecast cuts in the Wales budget estimated here are much lower than those alluded to in the First Minister’s speech and in the later statement by the Finance Minister. By 2013-14 the difference in that year alone is around £1bn.
“It is difficult to reconcile the forecast cuts as set out both in Labour’s 2009 and 2010 UK budgets and in the Con-Dem 2010 Budget with the planning assumptions being employed the Welsh Government.
“Perhaps it is being deliberately used either by the Treasury or the Welsh Government to ‘flush out’ much greater potential savings than those being sought in practice or to provide a larger contingency fund.”
This row underlines my view that speculation is getting out of control and that we would all be better off waiting to see what is actually announced rather than making it up on the hoof from leaked documents and half-formed rumours.
More interestingly though Dr. ap Gwilym's assertions do not just indicate a Labour Plaid Cymru split within the One Wales coalition but a rift between the nationalists' chief economic advisor and his own Ministers. After all it is not just the First Minister and the Finance Minister who have endorsed the level of cuts the government is preparing for, it is the whole cabinet.
If the Welsh Government is being over-cautious or too savage, depending on your point of view, they are doing so in the full knowledge of and with the endorsement of Plaid Cymru Ministers.
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