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Thursday, October 21, 2010

Time to move on

Yesterday's Comprehensive Spending Review was a difficult and serious undertaking that will affect us all. I am not happy about it and I am sure that none of the Liberal Democrat Ministers who took part in it, were that happy either. However, even Labour admit that cuts needed to be made to rebalance the economy and as Mark Cole points out on his blog, whereas Labour planned undetailed cuts of 20% (£48 billion), the Coalition Government actually announced cuts of 19% (£47 billion) with details on savings and investments.

What is also clear is that those hit the hardest by the full package of measures are the top 20% in wealth terms. Yes, the benefit cuts will hit the least-well-off too but too many of those are trapped in the dependency culture and at least the Government is now proposing reforms to help them back to work.

I am not going to rehearse once again the reasons why these cuts were necessary. A £109 billion structural deficit speaks for itself. The interest payments alone on Britain's debt are £44 billion a year, three times the Welsh Government's budget. I do though, want to briefly look at the impact on Wales.

Alistair Darling had planned cuts to the Welsh block grant of around £2.8 billion over four years. Yesterday, including capital, the Coalition Government actually imposed cuts of around £1.8 billion in real terms over the same period. In fact in cash terms the Welsh Government will have £200 million more to spend in 2014-15 than it does now.

Wales did better than England and only marginally worse than Northern Ireland and Scotland in terms of the cuts they now have to find. About £400 million less in revenue terms is not chicken feed by any stretch of the imagination and there will be difficult decisions to make, but it is not as bad as Labour led us to believe or indeed as bad as they were planning if they had been re-elected.

The Labour-Plaid Government were planning real term cuts of 5.8% a year. In fact the coalition's settlement for Wales is substantially better than that with real term cuts of less than 2% per year. Considering Labour and Plaid Cymru have been spinning for weeks how devastating these cuts were going to be and how Wales is being singled out, they are absolutely gutted that it has not turned out as bad as they predicted.

That has not stopped Welsh Ministers turning into a cabal of Victor Meldrews. They have taken to the airwaves with a vengance to complain about anything and everything, often reinventing the figures to suit themselves. Now though, is the time for action not whinging.

Our job in the Assembly is to turn this settlement into a budget that protects key services such as health and education. That means that Labour and Plaid Cymru need to get to grips with the waste and inefficiencies in their own budget and take some difficult decisions of their own for a change.

We are still awaiting a statement from the Finance Minister as to what her strategy and priorities are. Now that she knows how much money she has then perhaps she will feel able to tell us.
It is also worth pointing out that the very poorest are protected, as are state pensioners - more than they would have been under Labour.
If that's the case Frank then why does the IFS say that it is regressive?
protected pensioners - well only when you reach 67 or so.So I now after working for all my life, will not be able to retire at 60.I will hold onto my job keeping younger ones down the line out of a job prospect.If I was in France I would be protesting with the millions who have marched against a 2 year not a seven year rise.yeah protected -not
These 'cuts' are merely reductions in the rate of increase in spending. The fact that they are called cuts is political spin and wordplay designed to hide inaction whilst giving the impression that something is being done about the budget deficit. Mark my words, this will not alleviate Britain's economic woes.
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