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Chancellor cuts Welsh government budget by 2% Chancellor cuts Welsh government budget by 2%
(35 minutes later)
Chancellor George Osborne says the Welsh government's budget will be cut by 2% in 2015. The Welsh government's budget will be cut by 2% in 2015 as part of Chancellor George Osborne's spending review.
Announcing the details of his spending review, he told MPs the day-to-day revenue budget would be set at £13.6bn. Mr Osborne said the revenue budget would be set at £13.6bn and UK ministers would respond to the Silk commission on assembly powers shortly.
Mr Osborne also said the UK government would publish its response to the Silk commission on assembly powers shortly. He said he would then give details of "impressive" M4 relief road plans.
He told MPs he would then be able to give details of "impressive" M4 relief road plans. Welsh ministers welcomed news on Silk and the M4 but warned the cuts would have a "negative impact on all of us".
The Wales Office, the Whitehall department which represents Wales in the UK government, has agreed a cut of 10% in its running costs.The Wales Office, the Whitehall department which represents Wales in the UK government, has agreed a cut of 10% in its running costs.
The chancellor is setting out spending cuts for 2015/16 forced on him by slower than expected economic growth and deficit reduction. The chancellor was setting out spending cuts for 2015/16 forced on him by slower than expected economic growth and deficit reduction.
Labour has said it will stick to the plans if it wins the 2015 election.Labour has said it will stick to the plans if it wins the 2015 election.
Road questions
The Welsh government budget cuts are part of £11.5bn savings from the UK government's overall spending plans of £740bn.The Welsh government budget cuts are part of £11.5bn savings from the UK government's overall spending plans of £740bn.
The Scottish government and Northern Ireland executive have also had their budgets cut by 2%.The Scottish government and Northern Ireland executive have also had their budgets cut by 2%.
There is a slight increase of 0.3 per cent to the Welsh government's capital budget from £1.4 to £1.5bn. There is a slight increase of 0.3 per cent to the Welsh government's capital budget from £1.4bn to £1.5bn.
Mr Osborne has twice highlighted the need for a M4 relief road around Newport.Mr Osborne has twice highlighted the need for a M4 relief road around Newport.
Supporters of the scheme were expecting him to give it the go-ahead this week but may have to wait a little longer.Supporters of the scheme were expecting him to give it the go-ahead this week but may have to wait a little longer.
Questions remain over how a project costing up to £1bn will be paid for.Questions remain over how a project costing up to £1bn will be paid for.
'Political trap' 'Priorities' warning
Welsh Secretary David Jones said Welsh government day-to-day spending had been "largely protected" because of the way the funding formula for Wales reflected "the protections afforded by this (UK) government to education and health (in England)". Welsh Secretary David Jones said Welsh government day-to-day spending had been "largely protected" because of the way the funding formula for Wales reflected "the protections afforded by this [UK] government to education and health [in England]".
"We have also heard today that this government will freeze council tax in England for the next two years and will reform its funding to social care," he said."We have also heard today that this government will freeze council tax in England for the next two years and will reform its funding to social care," he said.
"Clearly, decisions on how the Welsh government spends its budgets are rightly, a matter for the Welsh government, however, I would urge the Welsh government to note these measures very carefully and consider how they make their allocations in line with their own priorities." "Clearly, decisions on how the Welsh government spends its budgets are rightly, a matter for the Welsh government.
Responding to news of the Welsh government's budget cut, Plaid Cymru said it was the party which offered the "only hope" for "struggling communities and businesses in Wales". "However, I would urge the Welsh government to note these measures very carefully and consider how they make their allocations in line with their own priorities."
The Welsh government's finance minister Jane Hutt welcomed the prospect of news about devolved powers and an M4 upgrade.
But on the budget reduction she said: "With £11.5bn of UK government cuts, this was always going to have a negative impact on all of us."
She added that overall the Welsh government's revenue budget in 2015-16 would be £280m lower in real terms than in 2014-15, and £1.68bn lower than 2010-11.
'Political trap'
Plaid Cymru insisted it was the party which offered the "only hope" for "struggling communities and businesses in Wales".
The party's Treasury spokesman Jonathan Edwards MP said Mr Osborne laid a political trap for Labour that they had "fallen into hook, line, and sinker" by accepting austerity cuts if they formed the next government.The party's Treasury spokesman Jonathan Edwards MP said Mr Osborne laid a political trap for Labour that they had "fallen into hook, line, and sinker" by accepting austerity cuts if they formed the next government.
"This leaves the people of Wales with absolutely no difference between Tory austerity and Labour austerity.""This leaves the people of Wales with absolutely no difference between Tory austerity and Labour austerity."
S4C funding
Meanwhile the UK government has confirmed it will not reduce its funding for Welsh-language television channel S4C under the spending review.Meanwhile the UK government has confirmed it will not reduce its funding for Welsh-language television channel S4C under the spending review.
S4C received £6.7m from UK Department for Culture, Media and Sport in 2013, but is now mostly funded from the BBC licence fee.S4C received £6.7m from UK Department for Culture, Media and Sport in 2013, but is now mostly funded from the BBC licence fee.
Mr Jones said: "Today's announcement further reinforces this government's commitment to a strong and independent Welsh language TV service.
"S4C has, undeniably, made an enormous contribution towards the creative industries in Wales, and crucially, to promoting the Welsh language. Indeed, it is the only Welsh language channel in the world.
"The chancellor has recognised the importance the people of Wales place upon S4C, and has secured its funding for 2015/16.
"I am confident that the future is bright for S4C, and that it has the stability and certainty that it needs to continue to go from strength to strength."