A commitment to our own and future generations; Jane Hutt, Minister for Finance and Leader of the House, sets our her draft Welsh Budget for "growth and jobs".
Yesterday, I announced a Welsh Budget for growth and jobs - our plan to invest in Wales' future.
Let me begin by setting out the public spending and economic context in which our decisions are being made.
The UK and Welsh economies have suffered greatly following the global economic recession in 2008-09, with Gross Domestic Product (GDP) in the UK falling by more than 6% between 2008 and 2009. This represents the steepest decline recorded in recent economic history.
The latest forecasts from the Office of Budget Responsibility indicate that the economy is likely to face a prolonged period of under performance that will last for a number of years, and there is a real risk of an even more negative outcome, particularly if the eurozone fails to resolve its debt crisis.
All the evidence suggests that the UK Government's efforts to promote recovery are failing and the economy returned to recession in late 2011. While Wales has rightly played its part in reducing the deficit we have been consistently clear that the UK Government's cuts go too far, too fast, and we have been clear about our priorities in this challenging context.
We have continually argued that the UK Government should rethink its approach and deliver a budget that will provide a real economic stimulus. A recent report from the National Institute for Economic and Social Research has provided further support for this position and suggested that the austerity measures introduced by the UK Government will have cost Britain a 16.5% reduction in GDP over a decade.
The Welsh Government is not immune from UK Government-imposed cuts to public spending. By 2014-15, the Welsh Budget will be PS2.1bn lower in real terms than at its peak in 2009-10 and around the same level as in 2005-06. In particular, our capital budget has been cut by 45%. This means we have less to spend on building new schools, new hospitals, new roads and new housing. This has represented the most difficult settlement for Wales since devolution.
Added to this, the impact of UK Government decisions in areas such as welfare reform, taxation and macro-economic policy has continued to provide further challenges. This is most acutely felt with the reform of welfare benefits where planned cuts to working-age benefits and tax credits by the UK Government, will see reductions of around PS18bn or around 8% of the social security and tax credit benefit budget.
Since 2010, our response to reducing budgets has continued to be shaped by our priorities. We have worked hard to ensure we use the resources that are available to us to deliver maximum benefits to Wales and will continue to use all the levers we have to stimulate the Welsh economy.
In last year's Budget, I announced measures to support the economy through investing in our infrastructure, helping to boost the construction sector and create much-needed jobs for our 18-25-year-olds. As part of our ongoing commitment to boosting the economy, we have announced more than half-a-billion pounds of additional investment in a sustained programme of interventions and actions in the Welsh economy and supporting Welsh businesses.
This includes new ways of raising finance, assisting local authorities with a Highways Improvement Borrowing Initiative and the social housing sector via a partnership backed by the private sector.
A significant component of our procurement policy is to use public sector contracts to provide community benefits. As a result of that approach, contractors have provided job opportunities for the long-term unemployed, skills training and apprenticeships for young people, as well as supply-chain opportunities for local firms.
The Draft Budget I announced yesterday sets out how we will build on this, by investing PS15.4bn over the next year in our public services. At the heart of everything we do as a Government, is a commitment to ensure every Welsh pound creates the opportunities necessary to revive and enhance the Welsh economy, creating jobs, improving education and skills and improving people's health and wellbeing.
By investing in schools, we are investing in our children's future. We are investing in Flying Start and our Pupil Deprivation Grant to ensure our most disadvantaged children receive the best start in life. By investing in our students, we are ensuring that a university education is available for the many, and not the privileged few.
By maintaining Universal Benefits - such as free prescriptions, free concessionary bus travel, free school milk and breakfasts and free swimming - we are providing a vital shield for the people of Wales, helping to mitigate the impact of the actions of the UK Government, such as welfare reform.
We have always said we will do all we can to boost capital in the face of budget reductions - because we know this is vital to support economic growth and create jobs.
The PS175m package of capital investment I announced yesterday will make a real difference, and will deliver longer-term benefits for the economy and better infrastructure for our key public services. About 3,000 jobs will be created and protected, and more than 800 affordable homes will be provided. The package builds on previous Budget allocations.
I am confident these plans support our commitment to tackling poverty, to protecting the most vulnerable in society and to ensuring that we improve the economic, social and environmental wellbeing for people in Wales for our own and future generations.
| In its latest Budget proposals, Labour says its plan to boost capital in the face of budget reductions is because "we know this is vital to support economic growth and create jobs"
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|Publication:||Western Mail (Cardiff, Wales)|
|Date:||Oct 3, 2012|
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