Every government faces the problem that there are only two ways to raise money for spending on public services. The first is to borrow and the second is to raise taxes. Borrowing a large sum of money to deal with a “once in a lifetime” crisis can be justified. Unfortunately, we have had three in the space of 14 years - a financial collapse in 2008 under the last Labour government, Covid which cost £400bn and was immediately followed by the Russian invasion of Ukraine which has resulted in skyrocketing energy bills, and inflation which has caused other prices to rise.
As Liz Truss found out a few weeks ago, borrowing more money at low rates of interest is not possible. Last week, Rishi Sunak set out an alternative. It will mean higher taxes and that is something which no government ever wants to do. However, it does mean we can raise benefits, pensions and the living wage in line with inflation, increase spending on the NHS and education and give an additional £1.2bn in funding for Wales. I fully understand the anger about tax rises, but I must respectfully point out that the alternative is huge public spending cuts. If anyone, including any of the other political parties, have a magic idea that will enable the government to cut taxes and increase spending without borrowing more money then I would love to hear it.
It is absolutely right the government has committed to helping the most vulnerable households face the challenges of the cost of living with over £12bn of additional support being announced in the Autumn Statement. The Energy Price Guarantee has been extended until April 2024 which will support every household with the increasing costs of energy. I also welcome the decision to protect the pensions triple lock by increasing the state pension and Pension Credit in line with inflation.
I would like to offer the best of luck to the Wales football team who begin their FIFA World Cup campaign in Qatar today. It is a huge achievement for Wales to qualify for its first World Cup since 1958 and I hope this will inspire a new generation to participate in local sports and produce Wales’ next sporting greats. Over 2,500 Welsh fans have travelled to the World Cup to get behind Wales for their first game which will be held tonight at 7pm against the USA. Pob lwc Cymru!
[Written 21 November 2022]
*Published in the Monmouthshire Beacon on 23 November 2022 and Abergavenny Chronicle on 24 November 2022*