National Insurance hike leaves hole in Wales' budget
Higher National Insurance payments for doctors, nurses and teachers has left the Welsh government with a £36m hole in its budget, according to the finance minister. Last year, the UK government increased the amount employers have to pay in National Insurance (NI) with the Welsh government, which employs tens of thousands of public sector workers, left with a £257m bill.The Finance Minister Mark Drakeford said he had added £36m from Welsh government reserves while the the Treasury provided £185m to help plug the gap. However, it still leaves £36m to find, which could come from cuts to other services, as Drakeford said the government "cannot afford to cover the entire shortfall".
"The UK government should treat the public sector the same across the UK and make good on its pledge to fully fund these extra costs," he added. The row is the latest dispute between the Labour administrations in Cardiff and London ahead of next year's Senedd elections.First Minister Eluned Morgan said earlier this month she would "not stay silent" if Sir Keir Starmer's government takes decisions "we think will harm Welsh communities".
Analysis - BBC Wales political editor Gareth Lewis
Welsh ministers have tried and so far failed to get extra cash to cover the rise in National Insurance contributions for the public sector.Their argument has been that the normal way of working these things out - the Barnett formula - does not take into account the disproportionate size of Wales' public sector compared to England.Plaid Cymru and the Welsh Conservatives criticised the UK government decision to increase the tax in the first place and also want full compensation for Wales.Expect them to seize on this and claim Wales is being hit by a double whammy - the increase is harming both Welsh businesses and the public sector.Welsh Labour's relationship with UK Labour, and whether two Labour governments working together is better for Wales is becoming one of the main themes of next year's election campaign.
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