Wales to make £100 energy payments but Plaid ministers say Budget leaves them with cuts

The Welsh government has confirmed it will make a £100 cost-of-living payment to about one million homes following Chancellor John Healey's Budget announcement.

The Labour chancellor had urged devolved nations including Wales to copy the "household energy payment" he announced for council taxpayers in bands A-D in England.

Hours after Healey's speech on Wednesday, Welsh Finance Minister Elin Jones said households in the same bands in Wales would also benefit.

But Healey's spending package led to a disagreement over the state of funding for Wales' public services, with Jones saying an extra £450m over three years worked out at a "real-terms cut" because it was below the rate of annual inflation.

UK Treasury minister Torsten Bell said that was only because Wales had already been given "shed loads" of extra funding in a one-off payment last year.

The Budget included a range of tax and spending changes that impact business in Wales.

Key announcements included:

• An end to gas standing charges
• A new tax-free allowance for low-income pensioners
• An extension to the fuel duty cut, and an increase to the minimum wage
• Legal minimum wage to rise by 3.9% in April

Healey's £100 a household energy payment for England, aimed at tackling the cost of living crisis, was among the measures in the Budget package announced on Wednesday.

The chancellor said the support, costing £2.6bn, would see money given to the governments of Wales, Scotland and Northern Ireland as a consequence of the spending for England.

Healey said he wanted the nations to use the cash in a similar way, calling on the devolved administrations to "do the same and give people of all nations in the UK breathing space on their energy bills this winter".

It is up to the Welsh government to decide how to spend the money - but early on Wednesday evening Elin Jones confirmed she would do the same.

She said: "Now that the UK government has responded positively to the Welsh government's calls to provide funding to make this possible, I am pleased to confirm that we will be making a £100 cost-of-living payment to all households in council tax bands A to D."

It is thought that between 70 to 75% of Welsh households are in the A-D council tax band - about one million.

The Welsh government has not announced how it would administer the payment - although ministers organised a similar scheme through councils in 2022.

The UK government said Wales would get an extra £450m over three years to add to the Welsh government's own £27bn budget, which covers public services including the NHS.

The Plaid Cymru-led Welsh government said the plans risked the "kind of spending reductions Wales experienced during the worst years of Tory cuts".

Wales' finance minister Jones had set out a list of requests, including rail, relaxing borrowing powers, more money for day to day spending and help to facilitate a child poverty project ahead of Wednesday's announcement.

After it, she said Wales had been "ignored again".

"This is a real-terms cut dressed up as a windfall," she said.

"Today's budget hasn't shifted the dial. Our fiscal position is worse than it was before the chancellor stood up, and that has direct consequences for our own budget on 17 November."

She warned of "tough choices" and needing to drive "further efficiency across the public sector, so that we can sustain investment in the areas that matter most to people in Wales".

Extra funding on public services in England triggers more cash for the Welsh government - and Labour MP Bell said most of the £450m of extra cash for Wales was a result of the energy payment plan and lower business rates in England.

In briefing to journalists, Bell said the Welsh government's budget was rising in real terms.

He said: "That's only a real-terms cut if you think it's bad that the Welsh government was given shed loads of extra money last year.

"When they say there's a real terms cut, what they mean is that when [special educational needs] debts were written off in England and there was a lump sum payment made for Wales."

The Welsh government received £322m extra from the UK government because of special educational needs in 2025-26.

A source close to the Welsh government said that extra in-year funding had to go on "front-line public services since we are facing substantial inherited spending pressures".

"Those pressures won't disappear next year, when we're facing a real-terms cut to our funding. This budget has not addressed that," they added.

But the UK government's Welsh Secretary Stephen Kinnock said it was "reducing the cost of food and energy and putting more money in the pockets of lower income pensioners and workers".

The chancellor also confirmed cash for three projects - £30m for Cardiff Parkway railway station, £11m for a bridge in Port Talbot and £2.5m for a science park in north Wales.

Kinnock confirmed that the rail funding was part of a £445m package that had been announced at the last Spending Review.

In June 2025 the Treasury backed plans for five new stations in Cardiff, Newport and Monmouthshire, as well as upgrades in north Wales.

Budget documents said the £30m would "progress delivery" for the scheme, which would see a railway station built in St Mellons.

Prime Minister Andy Burnham is expected to meet Wales' First Minister Rhun ap Iorwerth later this week.

At Prime Minister's Questions, Plaid Cymru's Parliamentary leader Liz Saville Roberts accused Burnham of "championing" more powers for English mayors while "refusing" to give the Welsh government the same "economic levers" as Scotland.

She urged him to stick to his support for devolution by giving Wales the "economic powers we need to prosper" when he meets the Welsh first minister.

Burnham told her that he welcomed her support for "deeper devolution".

He said he would be offering ap Iorwerth "greater devolution on employment support" similar to the offer he had made to the Scotland's First Minister John Swinney.

"So that we can have a different approach to supporting people in communities towards getting back to work and supporting the economy," he said.

"That's a starting point - there will be more to come too and I look forward to working with her and her party on that issue."

A Plaid source later pointed out that the previous Welsh government under Labour had signed an agreement with the UK government in March to devolve employment support funding.

Reform Wales' Cai Parry-Jones said: "Wales needs a comprehensive economic rescue plan, and this Budget fell far short of that.

"It's also clear that, despite what Labour has said in Wales, the party does not back building the M4 relief road."

Darren Millar, Welsh Conservative Senedd leader, said: "This Budget has failed to deliver for the people of Wales. The UK needs Kemi Badenoch's Conservative plan to cut welfare, cut taxes, grow the economy and invest in national security."

Welsh Liberal Democrat MP David Chadwick said it was "one of the worst Budgets for Wales in years".

"Much of what has been announced for Wales is simply funding for projects we already knew about rather than investment in new infrastructure," he said.