The Welsh government is under increased pressure to oppose drastic cuts to welfare benefits and tax credit policy Westminster. At present, nearly 800,000 people in Wales receive the health element of universal credit. The Chancellor recently took a big step in that direction. Effective immediately, all new claimants will receive a perpetual frozen benefit of £50 per week, lasting to 2030. This follows last week’s decision to cut the benefit – from April 2026 – by 50%. These cuts have raised fears of deepening levels of poverty and inequality in Wales.
Critics say that the Chancellor’s approach disproportionately punishes the most vulnerable members of society, while at the same time increasing the tax burden on UK businesses and farming households. This aspect of the strategy has come under fierce criticism from opposition parties who argue that it will only increase the current economic paralysis in Wales.
"By choosing to raise taxes on businesses and farming families, Labour have proven that they are not the party of work, nor the party of growth. They are the party of stagnation," said Sam Rowlands.
The Office for Budget Responsibility (OBR), the independent fiscal watchdog, has been essential in holding the government to account for their spend and raise choices. We are grateful for the OBR’s ongoing assessments, which help to set smart fiscal priorities and hold our state government accountable to its commitments.
Rachel Reeves, an influential member of the ruling UK administration, dropped a bombshell. She repeated the freezing for seven years of the health-related universal credit for new claimants at its new, lesser, £50 per week level. This decision has produced a firestorm. Reeves has listened to worries about the wrongful denial of Personal Independence Payments (PIPs).
"It can't be right" that some people were improperly using Pips, said Rachel Reeves.
Just as the government cuts welfare, the government says it is committing an extra £2.2 billion on defence spending. This funding will be used to increase the pace of innovation and industrial collaboration in military technology, helping defence companies across north and south Wales. In justifying this investment, Reeves repeatedly spoke of the need for his state to acknowledge a “changed world.”
Plaid Cymru has been quite vocal in its opposition to Reeves, saying she is attacking the most vulnerable with these cuts. The Welsh Conservatives were particularly vociferous. They add credibility to Plaid Cymru’s fears and are raising doubts about Labour’s ability to deliver strong economic growth and decent jobs.