Labour’s Budget Fails to Meet Wales’ Economic Needs, Claims Plaid Leader

The recent budget presented by Labour has drawn sharp criticism from Plaid Cymru leader Rhun ap Iorwerth, who claims that the party has neglected the needs of Wales. In an opinion piece for WalesOnline, Iorwerth argues that Labour missed a crucial opportunity to address long-standing issues affecting Welsh communities and has instead reinforced the status quo.

Polling data indicates a growing discontent among the Welsh population, as many feel that Labour’s budget fails to tackle decades of underinvestment. The budget reportedly offers “more of the same” with limited fiscal powers and a lack of substantial support for families facing rising costs. Iorwerth stated, “It is clear that Labour has already given up on Wales,” especially with just six months remaining before the Senedd election.

A significant point of contention is the over £4 billion owed to Wales from the HS2 rail project, which remains unallocated in Westminster. While there was a slight increase in borrowing powers, Iorwerth highlighted that the Welsh Government’s fiscal limits still fall short, significantly below the £300 million lost to inflation since 2018. Local authorities, alongside the unelected Crown Estate, reportedly hold more investment powers than the Welsh Government, complicating efforts to address crucial sectors like education and healthcare.

The budget’s handling of taxation has also drawn scrutiny. Although income tax rates appear unchanged, the freezing of tax thresholds is projected to pull 780,000 additional individuals into the basic tax rate and nearly 920,000 into the higher rate. While the increase in the minimum wage is welcomed, Iorwerth notes that it adds pressure to small businesses already struggling due to rising National Insurance contributions. Farmers are particularly affected by inheritance tax changes that hinder their ability to keep family farms operational.

The Office for Budget Responsibility (OBR) forecasts a significant slowdown in real household disposable income growth, predicting a drop from 3% growth in 2024-25 to just 0.5% in 2025-26, with an average of 0.5% annually thereafter. This trend indicates that ordinary families will bear the brunt of Labour’s economic policies while wealthier individuals and major banks largely evade scrutiny.

Iorwerth further criticized the lack of bold measures to address the cost-of-living crisis, calling for a review of standing charges that contribute to Wales experiencing some of the highest energy bills in the UK. He argued for a cut in VAT on household energy bills, stating that more could have been done to provide lasting relief.

While the scrapping of the two-child cap on benefits was acknowledged as a positive step, Iorwerth pointed out that this decision came only after prolonged opposition from Labour leaders. He noted the chaotic atmosphere surrounding the budget, exemplified by the early leak of the OBR report, which occurred just 40 minutes before Rachel Reeves‘ speech.

During a recent meeting at the Cardiff Breakfast Club, Iorwerth engaged with local businesses that expressed deep concerns regarding the government’s direction and the ongoing obstacles they face. He emphasized the need for clarity and certainty from the government, which the recent budget fails to provide. Instead of imposing taxes on extreme wealth, the Chancellor has opted for stealth taxes on ordinary workers, which could see one in four employees paying the higher tax rate by 2030.

According to Iorwerth, the current economic climate presents an opportunity for right-wing populism to gain traction, as evidenced by the rise of parties like Reform UK. However, he asserts that Plaid Cymru remains committed to advocating for the Welsh people, promising to champion fairness and investment in local communities.

Looking ahead to next year’s Senedd elections, Iorwerth outlined two competing visions for Wales’ future: a government led by Plaid Cymru focused on addressing systemic issues in healthcare, education, and job creation, or the continued division presented by Reform UK. He concluded by asserting that Labour’s failure to act on behalf of Welsh citizens is a clear signal that without Plaid Cymru, Wales risks being overlooked once again. Welsh families deserve better, he insists, and only Plaid Cymru can deliver on that promise.