Speaking just hours after the UK Chancellor delivered her Autumn Budget, North Wales MS Mark Isherwood slammed Labour's "disastrous choices" which he said, "leave our economy weaker, businesses and wealth creators fleeing the UK, and the markets on a knife edge".
In yesterday's Welsh Conservative Debate on the UK Budget, Mr Isherwood also warned that the decisions made the UK Chancellor are “laying the ground for future austerity”.
He said:
“By 2010, the UK budget deficit was the worst in the G20 as a share of GDP, behind only Ireland and Greece in the EU. If you have a big deficit, the lenders own you and set the terms – and would have imposed greater cuts if the UK had continued to grow deficit and therefore debt, as happened in Ireland and Greece, and as happened in 1976 when a Labour Chancellor was forced to go cap in hand to the IMF for a bail-out, requiring substantial cuts in public spending. I remember it well. .
“This summer, leading economists, including a former head of the National Institute of Economic and Social Research, and a former member of the Bank of England's Monetary Policy Committee, highlighted the risk of a repeat of the crisis in 1976.
“Although Rachel Reeves has vowed today to go ‘further and faster’ to kick-start the economy, the final official figures before the Budget show slower than expected economic growth, at just 0.1 per cent between July and September.
“Meanwhile, Government borrowing reached £17.4 billion in October, higher than expected, with debt now nearly 100 per cent of GDP. Borrowing for the financial year to date has now reached £116.8 billion, nearly £10 billion more than the OBR forecast in March. And prices are still rising faster than expected, with inflation at 3.6 per cent, well above the Bank of England's 2 per cent target.
“Analysts, including the Bank of England, have said that Labour's tax rises last year have hindered growth and employment, adding to inflationary pressures and hitting tax receipts. That's why we're facing a £20 billion shortfall. Her Tax and Spending announcements today will only exacerbate this, with forecast GDP growth lower than expected and the tax burden to hit a record high, at 38 per cent of GDP.”
He added:
“As we heard in today's Cross-Party Group on Fuel Poverty and Energy Efficiency, her Energy Company Obligation cut will reduce ring-fenced funding for tackling fuel poverty in Wales, hitting low-income households, local businesses, jobs and supply chains.
“UK unemployment has risen every month since Labour took charge of the economy, rising over 40 per cent in Wales, which has the lowest employment rate of all UK nations and the lowest wages in Great Britain, over £4,000 per year below the UK average.
“Labour inherited a recovering economy, but their disastrous choices have locked the UK in a doom loop of higher spending, more borrowing and higher taxes, leaving our economy weaker, businesses and wealth creators fleeing the UK, and the markets on a knife edge.
“This UK Chancellor, aided and abetted by this Labour Welsh Government, is following her Labour predecessors in laying the ground for future austerity, when a responsible UK Government takes the tough decisions dictated by economic reality, or an irresponsible UK Government is forced to do so when cuts are imposed upon them.”
