Cost-of-living: Welsh ministers' help not enough, report says

Cost of living policies from the Welsh government do not offer enough help to people facing hardship, a Senedd committee has said.

It criticised a cut in fuel payments and said a top-up in funding for sixth-form and college students was overdue.

Senedd members are debating the Welsh government's £20bn spending plans for the next financial year on Tuesday.

The Welsh government said the key levers for tackling poverty lie with the UK government.

The Conservatives accused Labour ministers of making real terms cuts to health, social services and education in their budget.

Meanwhile, Plaid Cymru called for income tax rises to help fund pay rises in the NHS and social care.

But the Welsh government's Finance Minister warned income tax rises would fall hardest on workers who have to choose between heating and eating.

The conclusions by cross-party finance committee are part of its report into the Labour government's latest budget.

Every year, ministers in Cardiff set out how they will divide funding from the UK government and tax between the NHS, councils, education and other Welsh public services.

"We see little in this draft budget to prevent households falling into hardship," the committee said.

It also said it is disappointed warm home payments of £200 for people on benefits will stop later this year.

The committee also calls for an increase in the Education Maintenance Allowance (EMA) for 16 to 18-year-olds. The weekly payment has been kept at £30 since the mid-2000s.

A review of the household income that qualifies students for EMA, which last changed in 2012, was "long overdue and should be undertaken urgently", it added.

High inflation has reduced the value of the Welsh government's £20bn budget, with ministers warning they will not be able to deliver as much as they hoped.

But the committee says there is not enough detail about cuts, and it calls for a full assessment on the impact of inflation.

Committee chairman Peredur Owen Griffiths said: "We understand that the funding decisions facing the Welsh government are extraordinarily tough, but we were surprised and worried at the lack of candour in the draft budget.

"This is not the right way to deal with our committee and the Senedd generally, and undermines legitimate democratic scrutiny."

In the budget, Welsh government ruled out using its powers to change income tax.

Finance Minister Rebecca Evans has said she thought "long and hard" about whether to put up income tax, but decided it "didn't feel like the right time to be taxing people more".

Explaining her decision to the committee, she said there was a danger of high earners moving out of Wales to avoid a tax hike.

But the absence of a full analysis of this "suggests that the minister had not seriously considered changing tax rates", the committee says.

Tuesday's debate comes during negotiations between the Welsh government and unions over pay.

But Ms Evans has said extra cash found to provide a better pay offer to NHS staff means the Welsh government will have "more difficult choices" to make in future years.

The government is expected to win a Senedd vote on the budget on Tuesday, with Plaid Cymru abstaining on the spending plans as part of its co-operation agreement with Labour.

Plaid is urging MSs to back an amendment to the budget that would add 1p to the basic rate of income tax, 2p to the higher rate and 3p to the top rate. It says the money raised would fund better wages for NHS staff and social carers.

It does not have enough votes to get its own proposals through the Senedd alone and they are unlikely to pass.

Opening a debate on Welsh government spending plans worth more than £20bn, Ms Evans said "now is not the right time" to raise income tax.

Raising the higher and additional rates of income tax would not raise enough money to make a significant difference, she said.

"The largest contribution would come from the basic rate band taxpayers - and let's be clear that this would impact the lowest paid workers in Wales," she said

"The same workers who are seeking help from food banks, the same workers who are having to choose between heating their homes and feeding their families."

Plaid Cymru leader Adam Price said the "choice we face is whether to use the powers that we do have, or simply accept the financial envelope essentially pass to use from Westminster".

He said those on lower incomes "stand to suffer most" from cuts to public services with "more painful lives", and accused Welsh ministers of repeating the "talking points of the Taxpayers Alliance".

The Conservatives said they had an "action plan" that would put "people's priorities" at the heart of the Welsh government budget, which included care hotels to clear hospital backlogs, surgical hubs and freezing council tax.

Peter Fox, Conservative spokesman for finance, said: "We now need ministers here... in Wales to start dealing properly with the huge challenges this country is facing and stop looking for other people to blame."

He said the Welsh government could have gone further to reprioritise funding, and questioned spending on £6m on elections policy, £2m on the Constitutional Commission, or £8m on international relations.

The Welsh Liberal Democrats, who have one MS in the Senedd, called for more money for NHS dentistry and investment in insulation.

Labour Swansea East Senedd member Mike Hedges said he had "very serious concerns" about the budget.

He called for the Education Maintenance Allowance to be raised in line with inflation, for free school meals for all children whose parents are on benefits, and for the end to enterprise zones.

"The priority should be poverty, housing and education," he said.