Welsh Finance Minister Elin Jones has called on Chancellor John Healey to set out a spending plan that treats Wales fairly, as the UK government prepares to announce its tax and spending plans for the year ahead. Plaid Cymru ministers want extra cash for railways and public services in the country. Jones specifically asked the chancellor to bring forward £1 billion of the £14 billion the UK Labour government had promised for long-term rail funding in Wales. She also requested extra money to help the Welsh government set its budget for 2027-28, which currently faces a real-term cut in day-to-day spending. Jones previously claimed Wednesday's settlement could be the worst for the Welsh government since the Covid-19 pandemic, calling the Budget "the moment of truth".
Cost-of-living pressures are weighing heavily on Welsh households and businesses. Shoppers and traders at Swansea Market cited the cost of living as their biggest concern ahead of the announcement. Energy bills are a particular worry, with typical bills forecast to increase by 16 per cent in January because of the conflict in the Middle East. Rural homes using heating oil have seen dramatic cost increases. The chancellor has already announced he will remove import taxes to bring heating oil prices down. Petrol prices hit a four-year high in September as the Middle East conflict pushed up the price of oil, with diesel also rising sharply. The expected freeze on the planned fuel duty increase in January would maintain a 5p reduction from 2022.
Market traders and business owners are struggling with rising costs. Gareth Evans, who runs a produce stall at Swansea Market, said rising diesel costs are hitting his business and customers he supplies. Emma, who runs a pet store, said she has had to increase prices for customers because of her rising costs. A UK government spokesperson said the chancellor is focused on giving households and businesses "a bit of breathing space where we can", pointing to measures already taken including removing VAT from electricity bills, extending the 5p fuel duty cut and freezing rail fares.
Welsh ministers are also pushing for support on child poverty and other schemes. Jones requested help for the Welsh government's flagship Cynnal scheme, which plans to pay 15,000 children in families on universal credit £10 a week, modelled on Scotland's child payment. The Welsh government has asked the UK government to exempt these payments from tax and benefits calculations. The chancellor is expected to announce the state pension increase, which is likely to top £13,000 a year with the full flat rate expected to increase by £488 a year in April due to the triple lock guarantee. One pensioner measure already announced is that those who rely entirely on the state pension will be shielded from paying income tax.
Higher spending for English public services that fall under Welsh devolved powers such as healthcare, schools and roads could trigger additional cash for Wales. For Welsh savers, borrowers, business owners and investors, the Budget outcome will determine whether they get relief from rising energy and transport costs and whether public services receive adequate funding.
Opposition parties have set out their own Budget priorities. Reform UK Senedd member Cai Parry Jones said his party would "stop using Welsh people as cash cows" and called for raising the tax-free personal allowance to £15,000. Welsh Conservative Senedd leader Darren Millar called for money for major road projects and more defence spending in Wales. Welsh Liberal Democrat MP David Chadwick called for a 10p cut in fuel duty, a guarantee to bring down energy bills and a temporary VAT cut for hospitality. The Budget comes ahead of the first substantive meeting between the prime minister and the first minister at the National Economic Council later this week, where devolution is expected to be discussed.