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Budget 2015: Welsh pleas on welfare and economy Budget 2015: Welsh warning over welfare cuts
(35 minutes later)
Chancellor George Osborne has been urged to boost the Welsh economy and consider the "human impact" of £12bn welfare cuts as he presents his Budget. Chancellor George Osborne has unveiled plans for £12bn of welfare cuts in his Budget amid warnings from Citizens Advice Wales about the "human impact".
Working age benefits will be frozen for four years, and the benefits cap cut from £26,000 per household to £20,000. Working age benefits will be frozen, tax credits restricted, and the benefits cap cut to £20,000.
But Citizens Advice Cymru is concerned it would hit many people hard. Mr Osborne also announced a compulsory "living wage" of £7.20 an hour from next April, rising to £9 by 2020.
Mr Osborne stressed UK ministers' commitment to a funding floor and more powers for Wales, plus M4 and Great Western railway line improvements. Shadow Welsh Secretary Owen Smith said he doubted the living wage would offset the "massive cuts" to tax credits.
Presenting his Budget in the Commons on Wednesday, the chancellor told MPs his Budget aimed to keep moving the UK to a "higher wage, lower tax, lower welfare country". Presenting his Budget in the Commons on Wednesday, the chancellor told MPs he aimed to keep moving the UK to a "higher wage, lower tax, lower welfare country".
Measures announced include:
Mr Osborne said the £26,000 benefits cap - the amount one household can claim in a year - would be cut to £23,000 in London and £20,000 in the rest of the UK.
With regards to Wales, the chancellor stressed UK ministers' commitment to a funding floor and more powers for Cardiff Bay, along with improvements to the M4 and electrification of the Great Western railway line between Swansea and London.
He announced an extra £8bn a year for the NHS in England by 2020, which could mean an extra £400m a year for Wales under the rules of the Barnett formula on public spending cross the UK.He announced an extra £8bn a year for the NHS in England by 2020, which could mean an extra £400m a year for Wales under the rules of the Barnett formula on public spending cross the UK.
The first all-Conservative Budget since 1996 also included measures to let local councils determine Sunday trading hours, and raising allowances for inheritance tax.
'Impossible to cope''Impossible to cope'
Fran Targett, director of Citizens Advice Cymru, warned that further welfare cuts would make life even more difficult for many people. Reacting via Twitter, Mr Smith said: "As ever with an Osborne budget you have to look at the small print: will his 'Living Wage' offset the massive cuts to Tax Creds? I doubt it."
Welsh Secretary Stephen Crabb, also reacting via Twitter, hailed "a landmark one nation Budget", giving "a strong foundation for Wales to prosper".
Speaking before the Budget, Fran Targett, director of Citizens Advice Cymru, warned that further welfare cuts would make life even more difficult for many people.
"Although the economy is now growing, every day our local citizens advice offices in Wales are seeing people who are struggling in insecure, low paid work and finding it almost impossible to cope with day-to-day living costs," she said."Although the economy is now growing, every day our local citizens advice offices in Wales are seeing people who are struggling in insecure, low paid work and finding it almost impossible to cope with day-to-day living costs," she said.
"With further changes to the welfare system to come, it is essential people have access to the support they need to adapt to reforms and help them move forward.""With further changes to the welfare system to come, it is essential people have access to the support they need to adapt to reforms and help them move forward."
Follow the Budget on the BBC
Stuart Ropke, chief executive of Community Housing Cymru, which represents housing associations, added: "The possible breadth of reforms is worrying and many individuals may be hit by two or three different changes.Stuart Ropke, chief executive of Community Housing Cymru, which represents housing associations, added: "The possible breadth of reforms is worrying and many individuals may be hit by two or three different changes.
"Wales has already been disproportionately affected by welfare reform and we fear that further changes will increase in-work poverty across Wales and will impact on the most vulnerable people in our communities.""Wales has already been disproportionately affected by welfare reform and we fear that further changes will increase in-work poverty across Wales and will impact on the most vulnerable people in our communities."
The CBI, which represents major employers, called for measures to boost the economy, including deficit reduction, clarity on business taxes and support for long-term investment. It also wants reassurance over the electrification of the Great Western mainline railway to Swansea.
'Incremental approach'
Meanwhile, the Federation of Small Businesses in Wales has called for a "rebalancing" of economic activity across the UK, a simpler tax system and improved competition in the banking sector to boost access to loans for small firms.
Before Mr Osborne's statement, the Welsh government's Finance Minister Jane Hutt said: "Wales is expected, yet again, to suffer because of the UK government's austerity measures."Before Mr Osborne's statement, the Welsh government's Finance Minister Jane Hutt said: "Wales is expected, yet again, to suffer because of the UK government's austerity measures."
She said the Welsh budget for 2015/16 was £1.4bn lower in real terms than in 2010/11, with an extra £50m cut for this year announced in June.She said the Welsh budget for 2015/16 was £1.4bn lower in real terms than in 2010/11, with an extra £50m cut for this year announced in June.
"This incremental approach introduces even more uncertainty and makes it more difficult to plan our investment strategically," she said."This incremental approach introduces even more uncertainty and makes it more difficult to plan our investment strategically," she said.
Analysis by David Cornock, BBC Wales parliamentary correspondentAnalysis by David Cornock, BBC Wales parliamentary correspondent
A new Conservative MP was frank: "I hope it won't be too severe." So what does the Budget mean for Wales?
Even some on George Osborne's own side were apprehensive before his seventh Budget. There was one brief reference to Wales in the chancellor's speech: "In Wales we are honouring our commitments to a funding floor, and to more devolution there, and investing in important new infrastructure like the M4 and the Great Western line."
They know that chancellors of both parties tend to use post-election budgets to "front-load" the pain in the form of tax rises or spending cuts or both. The official Budget documents offer more detail: "The government is committed to taking forward the St David's Day agreement for Wales to the timetable set out in the command paper.
The hope is that by the time the next election comes along, voters will be grateful for whatever goodies are then on offer and have forgotten the pain. "This includes implementing a funding floor at the spending review in the expectation that the Welsh government holds a referendum on the devolution of income tax."
We may not know the nature of the pain yet but we do know where it will hurt. It adds: "The devolution of Air Passenger Duty (APD) to the Welsh assembly will continue to be considered alongside the review of options to mitigate the impacts of APD devolution on regional airports. The government is publishing a discussion paper on regional airports alongside the Budget, setting out how some of the options could work."
The prime minister has highlighted the "merry-go-round" of the state using tax credits to subsidise low wages. The UK government also claims that Wales grew faster per head than London and the UK average in 2013.
In Wales, 238,000 families receive an average of £6,134 each per year. Welsh Secretary Stephen Crabb tweeted: "A landmark one nation Budget. Living wage, lower business taxes & deficit falling - a strong foundation for Wales to prosper."
Welsh Secretary Stephen Crabb said there is no evidence Wales will be negatively impacted by the proposed cut in the benefits cap from £26,000 to £20,000 outside London.
He also said the Welsh government is being cushioned from the deepest public spending cuts because of the Barnett formula, which determines changes in its budget.