Chancellor Rachel Reeves is set to present Labour’s first budget in 14 years to Members of Parliament in the House of Commons on Wednesday. This budget raises questions about its implications for Wales. The Prime Minister has made commitments in a pre-budget address to revitalize public services and move away from austerity measures.

A financial increase for the NHS and education in England is anticipated, which will result in additional funding for Welsh ministers in Cardiff Bay, leaving them with the responsibility to allocate these resources. However, concerns remain about whether this funding will sufficiently alleviate existing financial strains.

Welsh finance secretary Mark Drakeford expressed his expectations for the budget during an interview with BBC Politics Wales, noting that while he doesn’t foresee a “bumper budget,” he believes it will outline initial steps to mend what he referred to as the “damage” from 14 years of Conservative governance.

To finance these initiatives, the UK government has indicated that tax increases may be necessary. Labour’s election manifesto has committed to not raising taxes on “working people,” effectively ruling out increases in VAT, National Insurance (NI), or income tax, leading to speculation on potential tax hikes elsewhere.

Small businesses, considered vital to the Welsh economy, are particularly apprehensive about potential increases in employer NI contributions. Kristian Cuffin, who runs Cuffed in Coffee in Holyhead, stated that such changes could force him to make difficult choices regarding staff hours, new hires, and expansion plans. The Federation of Small Businesses (FSB) in Wales is advocating for an increase in the Employment Allowance to help ease NI expenses for small enterprises.

There are also concerns regarding a possible fuel duty increase, which Plaid Cymru argues would disproportionately affect rural areas. MP Ben Lake highlighted that many rural residents rely heavily on cars due to limited public transport options.

Additionally, with Wales having a higher percentage of senior citizens—22% over 65 compared to 19% nationally—there is considerable unrest over plans to means test winter fuel payments. Welsh Conservative leader Andrew RT Davies criticized this policy as “unforgivable,” urging Labour to ensure pensioners stay warm during winter. The older people’s commissioner for Wales is also calling for reconsideration of this measure.

Wales faces challenges with over 2,500 abandoned coal tips, including 360 categorized as high-risk. Finance Secretary Drakeford mentioned ongoing discussions with the Treasury about securing funds for their safety and remains optimistic about progress either within this budget or via the spring statement. Meanwhile, despite the high-speed rail project being confined to England, Wales did not receive additional funding from the previous Conservative administration linked to this initiative.