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Crabb on impact of Spending Review on Wales

The Chancellor's Spending Review has divided opinion both in Wales and Westminster.

While the Shadow Welsh Secretary says it has "worrying implications" for people here, Welsh Secretary Stephen Crabb has described it as a "landmark" for Wales.

Mr Crabb has spoken to our Political Editor Adrian Masters about the Review and what it means for us:


  1. Nick Powell

Finance Minister: Chancellor's 'smoke and mirrors' can't hide cut for Welsh Government

The Treasury has confirmed that the Welsh Government's budget will fall by 4.5% in real terms as a result of the Chancellor's spending review. Modest cash increases in the revenue budget, which finances day-to-day expenditure will be more than cancelled out by inflation.

  • 2015/16: £12.9 billion
  • 2016/17: £13.0 billion
  • 2017/18: £13.1 billion
  • 2018/19: £13.2 billion
  • 2019/20: £13.3 billion

However, there's better news for the Welsh Government's capital budget, which pays for new roads, schools and hospitals. That's going up by 4.7% -a cash increase from £1.5 billion to £1.7 billion by 2020. So the Chancellor's promise of a budget totalling £15 billion will be kept and he's also committed to keeping overall spending in devolved areas 15% higher in Wales than in England until the next Westminster election.

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.

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.

– Finance Minister Jane Hutt AM

Tax powers referendum move criticised

The campaign group True Wales which formed the NO campaign in 2011's Welsh powers referendum has criticised a UK Government move on devolving income tax.

George Osborne announced in his Spending Review statement that long-planned control over part of income tax will be transferred to the Welsh Government without the need for a referendum.

This is a major change from the law which paved the way the transfer and has been welcomed by some politicians in all parties, although a number of Welsh Conservatives remain opposed.

But Rachel Banner of True Wales says the move makes the 2011 referendum 'illegitimate.' Here's her statement:

In 2011, so worried were politicians and Yes campaigning groups about the possibility of a No response from the electorate that the referendum question itself - agreed by the Secretary of State for Wales and the Electoral Commission - contained a pledge that a Yes vote would not lead to tax powers.

This was included despite the fact that the UK Coalition Government agreement had stated that a Calman-style Commission would be established in the event of a Yes vote. Politicians loudly denied that a Yes vote would lead to tax powers, while the Holtham Report on fiscal devolution was treated as some dirty little secret to be kept under the Assembly mattress till the referendum campaign was over.

On that basis, True Wales believes that the introduction of income tax powers without a referendum is illegitimate and brings the devolution settlement into disrepute.

– Rachel Banner, True Wales
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