Updated: Wales’ Finance Minister Calls on Chancellor to tackle cost-of-living crisis in Spring Budget

Update: Chancellor of the Exchequer, Jeremy Hunt, has announced this morning that the Energy Price Guarantee (EPG) will be extended for an additional three months, more here: https://www.deeside.com/chancellor-confirms-energy-price-guarantee-will-be-extended-until-june/

Earlier report: The Chancellor is set to deliver his Spring Budget on Wednesday, 15 March, outlining the UK government’s economic plans for 2023-24.

While the economic outlook has improved slightly compared to last year, public finances remain precarious due to the cost-of-living crisis and the need for energy bill support.

Although significant tax cuts are deemed unlikely, the Chancellor faces pressure to introduce measures to assist struggling households and businesses.

Wales’ Finance Minister Rebecca Evans has urged the UK government to maintain the £2,500 Energy Price Guarantee and implement targeted measures to address the ongoing cost-of-living crisis affecting many people and businesses.

As energy and food prices remain high, Ms Evans believes the Chancellor has the power to ease the financial strain on households and businesses by using welfare and tax levers and utilising the available funds in the public purse.

She stated, “This must be used to immediately support those most vulnerable – including practical actions to support people with energy costs, housing needs and welfare benefits. Maintaining the £2,500 Energy Price Guarantee beyond April would be an integral part of this.”

The Finance Minister also highlighted the importance of investing in the NHS and public sector funding, as well as restoring pay for public sector workers to real terms. As the NHS marks its 75th anniversary this year, Ms Evans sees it as an opportunity to both invest and reform the healthcare system.

Regarding the impact of inflation on the country, she explained that Wales’ own budget is worth up to £1 billion less in real terms for 2023 to 2024.

Consequently, she called on the UK government to invest in public services to offset the effects of inflation.

Ms Evans has written to the Chancellor and met with the Chief Secretary to the Treasury, emphasising the need for substantial investment in Wales, its people, and public services.

Some key proposals expected in the Budget include:

Maintaining the Energy Price Guarantee: At present, the government limits the annual energy bill for an average household at £2,500.

This limit is scheduled to increase to £3,000 on 1 April, however, it is anticipated that the Chancellor will maintain the Energy Price Guarantee at its existing level for an additional three months.

Increasing tax-free pension allowances: The lifetime allowance could rise from £1.07 million to £1.8 million, while the amount workers can save into a pension before paying tax may increase from £40,000 to £60,000.

Reviewing the state pension age: Reports suggest a review may recommend bringing forward the increase in the state pension age from 67 to 68 to the mid-2030s, potentially affecting millions of workers born in the 1970s.

Extending fuel duty cut: The 5p fuel duty cut, which is set to end on 31 March, may be frozen for another year.