Mark Drakeford MS, Cabinet Secretary for Finance and Welsh Language
Today, Chancellor of the Exchequer, Rachel Reeves, presented the first UK Budget by a female Chancellor in British history. It represents the first steps towards fixing the 14 years’ damage caused to our public services and our communities, by the previous UK Governments.
The measures announced by the Chancellor, including the new fiscal rules and tax policies, will begin to restore growth in our economy, set the public finances on a more stable footing and reinvest in our public services. We recognise the position the new UK Government has inherited cannot be turned around in just one budget and it will take time for the public finances to recover. The Institute for Fiscal Studies has noted that “in the longer term, extra investment, planning reform and greater stability should all help to boost growth”.
The Welsh Government will receive an additional £774m resource, to include the cost of public sector pay deals already agreed in the current year, and £49m capital in 2024-25. There are further increases of £695m resource and £235m capital in 2025-26. Our overall settlement for 2025-26 is more than £1bn higher than it would have been under the previous UK Government. Taken together, our settlement over 2024-25 and 2025-26 will increase by around £1.7bn compared to what it would have been.
The Chancellor has listened to what Wales needs. She has recognised the potential safety threat disused coal tips pose and will provide £25m in 2025-26, alongside the continued investment from the Welsh Government. We will work with the UK Government ahead of the second phase of the Spending Review, to ensure Wales’ needs for future years are fully considered and to help make these tips safe for current and future generations.
I also welcome the Chancellor’s announcement the UK Government will transfer the investment reserve fund in the Mineworkers’ Pension Scheme to the scheme’s Trustees. This is an issue of particular significance to many communities in Wales.
Today’s Budget is a welcome investment in Wales; in its people, communities, local businesses and public services. We will continue our discussions with the UK Government about fair funding for rail and additional budget flexibilities as we head towards the second phase of the UK Spending Review in the spring.
The UK Government has today confirmed Shared Prosperity Fund transitional arrangements. We will look to develop a longer-term post-2026 model with the UK Government and our Welsh partners, which returns autonomy over decision-making to the Welsh Government to invest in the strategic drivers for growth.
The Chancellor also announced changes to the higher residential rates of stamp duty land tax (SDLT) in England and Northern Ireland. Welsh Ministers will be considering the position for land transaction tax in the context of the upcoming Draft Budget.
That Budget will be published on 10 December. It will focus on our priorities, including ensuring public services continue to deliver for Wales.
This statement is being issued during recess to keep members informed. Should members wish me to make a further statement or to answer questions on this when the Senedd returns I would be happy to do so.