Plaid Cymru Demands £1bn Rail Cash From UK Budget for Wales

By Grace Kim

Plaid Cymru is demanding the UK government bring forward £1bn of the £14bn in long-term rail funding Labour has promised Wales, ahead of the Budget on Wednesday. Welsh Finance Minister Elin Jones called on Chancellor John Healey to set out a spending plan that "finally treats us fairly."

Jones has asked the chancellor to accelerate £1bn of the £14bn committed for long-term rail investment in Wales. She also wants extra money to help the Welsh government set its budget for 2027-28, which currently faces a real-term cut in day-to-day spending. She has previously claimed Wednesday's settlement could be the worst for the Welsh government since the Covid-19 pandemic.

Jones said Wales had been short-changed "for years."

"This UK Budget is the moment of truth, and we need the chancellor to act, not just acknowledge the problem," she said. "Wales pulls its weight in the UK economy. We contribute. Now we need the UK government to match that ambition with action and deliver a budget that finally treats us fairly."

How could the Budget affect Wales?

The Budget announces Westminster's tax and spending plans for the year ahead. More cash for English public services could result in extra spending in Wales in areas controlled by the Welsh government — healthcare, schools and roads — under devolution funding rules.

A UK government spokesperson said: "The chancellor is focused on giving households and businesses a bit of breathing space where we can. That's why we have removed VAT from electricity bills, extended the 5p fuel duty cut and frozen rail fares."

There have also been calls from Labour MP Nia Griffith to give the Welsh government greater flexibility to borrow to fund investment projects. A senior Welsh Labour source said they had been "pressing really hard for fiscal flexibility," along the lines of Griffith's request.

What's happening with energy bills?

Shoppers and traders at Swansea Market, one of Wales' busiest markets, told BBC Wales that the cost of living was their biggest concern before Wednesday's announcement.

"Will we be able to see through the winter without having to borrow money," said shopper Louise. "It's quite a worry." She admitted feeling "anxious" about the winter despite having saved some money with her supplier.

Help with energy costs topped many people's lists. Prices rose at the beginning of the month, and typical bills are forecast to increase by 16% in January because of the conflict in the Middle East. Rural homes that use heating oil have also seen a dramatic increase in costs; the chancellor has already announced he will remove import taxes to bring the price down a little.

Healey has talked about giving people "breathing space" from cost-of-living pressures, and has revealed a package of small measures he calls "everyday fixes." Prime Minister Andy Burnham also wants to cut standing charges from gas bills. If further support comes in the Budget, it would likely be limited and targeted at the poorest households.

Dad-of-two Richard said his wage did not keep up with rising energy bills, leaving his family "penny pinching towards the end of the month." "Things that we used to have as a bit of luxury are out of the question, days out with family cost a fortune," he said.

What about fuel costs?

The cost of filling up cars soared this year as the Middle East conflict pushed up oil prices. Petrol prices hit a four-year high in September, and diesel has also shot up.

Gareth Evans, fourth generation of his family to run the Get Fresh stall at Swansea Market, said the cost of transporting fruit and vegetables is squeezing him. "It's a struggle at the moment," he said. "We get costs passed on to us from our suppliers. We've also got vans ourselves and we supply caterers and diesel is very expensive."

Emma, who runs a pet store, said rising costs forced her to raise prices for customers, as "it goes down the line." She believes many working people are "struggling to live now." The chancellor is expected to freeze the planned increase in fuel duty in January. The rate was cut by 5p under the previous Conservative government in 2022, and that measure has already been extended twice.

What is the child payment ask?

One of Elin Jones' requests is UK government help for a flagship child poverty scheme. The Welsh government plans a trial paying 15,000 children in families on universal credit £10 a week. The Cynnal scheme is modelled on the Scottish government's child payment, which helped reduce child poverty in Scotland.

Welsh ministers have asked the UK government to exempt the payments from tax and benefits calculations, so recipients do not see a cut to their income. BBC Wales has been told discussions are still ongoing, which suggests no announcement on Wednesday. Burnham had previously said he was "open" to considering this, and the exemption has already been granted to facilitate the scheme in Scotland.

What's expected on pensions and benefits?

The chancellor will announce how much the state pension will increase next year. It looks likely to top £13,000 a year, with the full flat rate expected to rise by £488 in April under the triple lock guarantee. Pensioners relying entirely on the state pension will be shielded from income tax, which usually kicks in at £12,570 — though the specific details come in the Budget.

On working-age welfare, Healey has been rolling the pitch to prepare Labour MPs for potential cuts to the benefits bill, with a carefully scripted speech at this year's party conference. Reports suggest young people not in education, work or training may see big changes to their support — but that could be unveiled after the Budget, when former Health Secretary Alan Milburn publishes his reform recommendations.

What do the parties say?

Reform UK Senedd member Cai Parry Jones said his party "would stop using Welsh people as cash cows," and would build an M4 relief road, scrap family farm tax, and "reward working people" by raising the tax-free personal allowance to £15,000.

Welsh Conservative Senedd leader Darren Millar called for money for major road projects, including an M4 relief road, and more defence spending in Wales, demanding a "pro-union Budget deal." Welsh Liberal Democrat MP David Chadwick said his party wanted a Budget giving Welsh families "some much-needed breathing space" — a 10p cut in fuel duty, a guarantee to bring down energy bills, and a temporary VAT cut for hospitality.

The Budget comes ahead of the first substantive meeting between the prime minister and the first minister at the National Economic Council later this week, where devolution is expected to be on the table. Whatever Healey announces on Wednesday will set the terms of that conversation.