Autumn Statement: Initial Analysis
18 November 2022
Higher inflation has significantly eroded the Welsh Government’s spending power leading up to 2024-25, according to an initial analysis of the UK Chancellor’s Autumn Statement by the Wales Fiscal Analysis team.
Cardiff University’s Wales Governance Centre published the initial analysis several hours after Jeremy Hunt spelt out a range of tax increases and spending cuts, some of which have been kicked down the line beyond the next general election.
The overall grim economic outlook will see disposable household income drop by 7% over the next two years, against a backdrop of record-breaking inflation and low growth.
And while somewhat progressive changes at the highest end of income tax will see the number of Additional band taxpayers double in Wales, the Chancellor re-committed the UK Government to a range of English railway schemes that are classified as being for ‘England and Wales’ and will not generate additional funding for the Welsh budget. It is likely that the relative protection of health and education spending in England will shield the Welsh budget from inflationary pressures to some degree, but is certain that a significant spending shortfall will still remain.
A full analysis of the budget outlook for Wales will be available in the coming weeks, and is set to be launched at a Breakfast Briefing event for the public in Cardiff on December 5th.