AM SLAMS COALITION BUDGET

Local AM, Gwenda Thomas, warned that today’s Con-Lib budget will hurt Neath and the South Wales valleys.

The budget announced today included a package of welfare spending cuts and an increase of 2.5% in VAT.

Mrs Thomas said: “By slashing public spending and raising VAT this government will punish the poorest people and the poorest regions in the UK.”

“As figures published by the Financial Times today show, the impact of spending cuts in Wales will be more than 10% worse than the national average. A spending cut of 10% in social security benefits would mean an average a loss of 3.6% for households in the Welsh valleys.”

“Only last week Simon Hughes, Deputy Leader of the Lib Dems, admitted that VAT was a ‘regressive’ tax. As a flat rate tax it means that the poor will pay more as a proportion of their income than the wealthy.”

“People may also be tempted to rush purchases of expensive items before the VAT increase kicks in next year. We should be encouraging people to budget more carefully not pushing them to spend now and worry about payment later.”

“There can be no doubt the public sector pay freeze will have serious consequences for Neath. The number of people employed in the public sector in Neath Port Talbot is substantially higher than the national average.”

“What Mr Osborne didn’t tell us today was that the Treasury are now expecting inflation to rise to 3.4% next year. If they are right on this it means the supposed pay ‘freeze’ will be actually be a 3.4% pay cut.”

“The same is true for the freeze on Child Benefit. This, on top of plans to force single mothers into work the moment their child reaches school age, the scrapping of the Health in Pregnancy scheme and the Child Trust Fund makes this one of the most child unfriendly budgets for a generation.”

“I’m certain the public will see through the laughable attempts of Mr Osborne to spin this as a progressive budget. A progressive budget does not cut corporation tax by 4% whilst slashing welfare spending by £11bn.”

“At a time when the private sector recovery is still fragile maintaining public sector spending is vital. We’ve seen the consequences of overly hasty public sector cuts in other countries; in Japan it led to a ‘lost decade’ of appalling economic stagnation. This unfair and unwise budget not only punishes the poorest but risks throwing the country yet further into recession.”