Five things to watch out for in the Budget for Wales

Chancellor Rachel Reeves has presented Labour’s first budget for 14 years to MPs in the House of Commons on Wednesday. But what might it mean for Wales? Here are some things we were watching.

1. Public services

In a pre-budget speech the Prime Minister pledged to “rebuild” public services and "reject austerity".

A funding boost for the NHS and education in England had been expected, meaning there will be additional cash coming to ministers in Cardiff Bay - it’s up to them to decide how to spend it.

Wales is now set to get an extra £1.7 billion as part of a £21 billion settlement for 2025-26. But how far will that sum go when it comes to easing funding pressures?

Welsh Secretary Jo Stevens said it would gelp support public services like the NHS while thousands of working people across Wales would benefit from today’s increases to their wages.

The Conservatives said while extra money for the NHS was always welcome, it must be ringfenced to cut waiting lists.

"But the lack of money for social care reform is a worrying omission from this Budget, and is in effect kicking tough choices into the long grass," said Welsh party leader Andrew RT Davies.

2. Tax rises

To help pay for all this, the UK government says tax rises will be needed. Labour’s election manifesto promised not to increase taxes on "working people" - ruling out rises in VAT, National Insurance (NI) or income tax.

So there had been a lot of speculation about what might go up.

Cafe owner Kristian Cuffin says NI changes could lead to difficult decisions for small businesses

Small businesses are often described as the backbone of the Welsh economy and many are concerned about the increase in employers' NI contributions.

They include Kristian Cuffin, owner of Cuffed in Coffee in Holyhead, who said the change could lead to "tough decisions" for his business including "reducing staff hours, holding off on hiring new staff and cutting back on expansion plans".

The rate that employers pay in NI contributions will rise from 13.8% to 15% on a worker's earnings above £175 from April.

The threshold at which employers start paying the tax on each employee’s salary will be reduced from £9,100 per year to £5,000.

The FSB in Wales, which speaks on behalf of small businesses, had called on the Treasury to increase the Employment Allowance which allows them to reduce their NI costs.

3. Winter Fuel Payments

Wales has a larger proportion of older people than elsewhere in the UK (22% are over 65 compared to an average 19%).

So it’s no surprise there’s been a fair bit of disquiet from different quarters over the decision to means test the winter fuel payment.

The leader of the Welsh Conservatives Andrew RT Davies, has said the policy is "unforgivable" and called on Labour to "keep pensioners warm this winter".

The older people’s commissioner for Wales also urged a "rethink".

In the Budget announcement, the UK government said those households eligible for Pension Credit would get £465 a year more for single pensioners and up to £710 a year more for couples, benefitting 80,000 pensioners in Wales.

Those on the basic state pension were also set to see an extra £360 a year.

4. Coal tip safety

A snapshot image of coal tips in the south Wales valleys, around Porth in the Rhondda, which is part of interactive mapping from Welsh government

There are more than 2,500 disused coal tips in Wales, including 360 deemed highest risk.

Finance Secretary Mark Drakeford had said he has been "in conversations" with the Treasury about funding to ensure these were maintained and safe.

The Chancellor announced £25 million of funding towards this end for 2025/26.

Welsh Secretary Jo Stevens said it was "testament to the new relationship between the UK and Welsh government, based on cooperation, respect and delivery".

5. HS2

The UK government has said it would get a grip on the cost of the HS2 rail line, with fears it could reach £66bn

Though the high-speed rail project is entirely in England, Wales received no extra cash from the previous Conservative UK government as a consequence of the scheme.

Since taking power UK labour ministers have also refused to commit to the cash.

Despite that, First Minister Eluned Morgan has insisted it’s an issue Welsh government "haven’t given up on".

There was no mention in the Budget, but "conversations continue" with Welsh ministers according to Treasury Minister Emma Reynolds.

‘This isn't the end of the story," she said. "This is the first phase of the spending review. There will be more to come in the springtime."

And on increasing Welsh government borrowing and draw-down powers, Reynolds said this was something they would continue to discuss.

"This is the first budget of a new Labour government after around three or four months in office," she said.