Jane Hutt responds to ‘Smoke and Mirrors’ Spending Review

Finance and Government Business Minister Jane Hutt has today responded to the UK Government’s Spending Review and Autumn Statement which sets out public spending plans for the next five years.

”Following a period of unprecedented cuts to the Welsh budget, there is little for our communities to cheer in the Spending Review today. People will not be misled by this smoke and mirrors approach to public finance: this is the slowest recovery in living memory and family and national prosperity is being held back on a daily basis.

“Today’s Spending Review shows that the people of Wales will continue to suffer from the Chancellor’s failure to meet his own fiscal targets. He gives with one hand and takes away with the other.  The mix of negative as well as positive consequentials means our spending power will fail to keep track with inflation.  Overall, between 2015-16 and 2019-20 there will be a real terms reduction in our total Budget of 3.6% – a cut of 4.5% in real terms for revenue and an increase in capital in real terms of 4.7%.

“It’s disappointing that the UK Government continues to look at NHS services in isolation.  We have always taken a wider approach focused on preventative spend and the link between health and social services. This approach will simply store up problems for the future, and heap further pressure on the NHS in coming years.

“That is why fair funding is so crucial and we have campaigned for a floor for the last five years.  Although today’s commitment towards a funding floor that will ensure that in future public spending in Wales is at 115 per cent of the England average is welcome this is unhelpfully restricted to this Parliament.  We haven’t got fair funding yet and it is essential that there is an inter-government agreement on the way forward.  The devil is very much in the detail as to how this will work in practice.

“Despite the welcome screeching u-turns on tax credits and police cuts, this is very much a Spending Review of missed opportunities. We wanted to see a commitment on Air Passenger duty, full detail on electrification of the great western line to Swansea and the North Wales mainline and something on the Swansea Bay Tidal Lagoon.  We welcome the recognition of our role in taking forward a City Deal for the Cardiff region and we now need the detail behind today’s commitment by the UK Government to help fund the deal.

“We’ve always been clear of the need to invest in infrastructure during the recession to boost jobs and economic growth.”