Welsh government budget gets £300m from George Osborne

George Osborne announced a cap on public sector pay when he made his Autumn Statement

First Minister Carwyn Jones says the Welsh government expects to receive about £300m extra by 2015 as a result of Westminster spending decisions.

Its capital budget for building work will get an additional £216m as a result of Chancellor George Osborne's Autumn Statement.

Mr Osborne pledged to work with the Welsh government on improving the M4.

But Mr Jones described an aspiration to introduce regional public sector wages as "code for cutting pay in Wales".

He also expressed disappointment that despite the toll on the Humber Bridge being halved, there was no equivalent announcement for the toll on the Severn Bridge which will rise by 30p to £6 in January.

The chancellor said the UK government was "holding open the opportunity of a discussion" on the Severn Bridge tolls, saying he was keen to talk to the Welsh government about "a possible deal".

Mr Jones said he expected the extra funding destined for the Welsh government from the Autumn Statement to be "around the £300m mark".

He said: "The chancellor's statement confirms once again that the UK government's policies are just not working and they are very worrying for everyone in Wales.

"There is no escaping that the economy is close to returning to recession."

'Balance the books'

Mr Jones said the Westminster coalition would fail to balance the books in time for the next general election in 2015.

A review into regional pay adjustments in the public sector could result in people in Wales being paid less to do exactly the same work as people in south-east England, the first minister warned.

"That's not acceptable," he said.

The chancellor has announced £5bn to improve the UK's infrastructure.

A percentage of money spent by the UK government on devolved areas of policy is handed to the Welsh government, which it is free to spend as it wishes.

Despite the extra £216m of capital funding, the Welsh government says that by 2014-15 its capital budget will be half what it was in 2009-10 because of the Westminster coalition's austerity measures.

Ministers in Cardiff will discuss how to spend the extra money with the Liberal Democrats, with whom they have agreed a deal to pass their £14.5bn budget.

During his statement, Mr Osborne said public sector pay rises will be capped at 1% for two years. It follows a two-year pay freeze for public sector staff.

He confirmed the UK's economy would grow much less, and public borrowing would be higher, than forecast during the Budget in March.

The Wales Office pointed to announcements on easing credit for small businesses, a delayed 3p-a-litre rise in fuel duty, and an urban broadband fund to make Cardiff one of 10 "super-connected cities".

Carwyn Jones says Labour will discuss how to spend the extra money with Liberal Democrats

'Growth'

Welsh Secretary Cheryl Gillan said the Welsh government should use the £216m to "enhance growth opportunities," and called for it to offer more help to small and medium-sized businesses with their business rates.

"We are committed to building a strong, stable business climate and as part of the growth measures we have announced businesses across Wales will benefit," she said.

But Plaid Cymru said Wales had been "sold short" by the UK-wide infrastructure plans.

Plaid economy spokesman, Jonathan Edwards, said the cuts imposed by the coalition UK government "have led to little growth but higher unemployment".

Labour Shadow Welsh Secretary Peter Hain said the bill for the government's "economic failure and higher unemployment [was] hitting Wales disproportionately hard".

Lib Dem MP Roger Williams said: "These are difficult economic times but there is a lot of good for Wales in this Autumn Statement, not least that there will be over £216m extra funds for the Welsh assembly over the next three years."