Budget day two

It's now clear that if the Conservatives win the general election then the lion's share of their spending cuts will be in welfare.

And as is so often the case, the arguments over welfare reform will be more visible in Wales than just about anywhere else because of the dependency on benefits in so many former industrial communities.

Around £12bn worth of further cuts to welfare are set to be introduced in the next Parliament.

That compares with around £20bn's worth of savings to welfare that have already been introduced by George Osborne since 2010.

What Labour calls the bedroom tax - and the Conservatives term the spare room subsidy - has got all the headlines but there's been the benefit cap of £500 a week for families of working age and the decision to base welfare rises on the lower of the two inflation measures.

Welfare reform

Throw in reforms like the introduction of the Universal Credit, the replacement of Incapacity Benefit and Disability Living Allowance with the Employment and Support Allowance and the Personal Independence Payment and the changes have been huge.

The Welsh Secretary Stephen Crabb has pointed to the benefits cap in particular as a policy that has led to thousands of people returning to work.

The key question of whether welfare reform has specifically contributed to the economic recovery will be one of the most hotly contested issues in the election campaign.

The Conservatives are not going to say where the extra cuts will fall until after the vote, something which undoubtedly will be seized upon by the opposition parties to try to strike fear into the hearts of swing voters.

What's fascinating about the welfare debate is how the different sides introduce the moral dimension.


Plaid and Labour both described the cuts to welfare in those ethical terms at their spring conferences.

On the flip side the Conservatives, with the work and pensions secretary Iain Duncan Smith leading the charge, says allowing people to spend a lifetime in what he calls a "twilight" world of benefits is morally wrong as well.

The welfare reform debate is UK-wide but it is at its most intense in Wales.

Here are a few more thoughts on some of the Wales-specific issues that came out of the budget.

The First Minister Carwyn Jones followed up George Osborne's £5.40 plan for cars and vans on the Severn crossing after 2018 by saying that if they were devolved then he'd bring them down even lower.

Race to bottom

I speculated yesterday about whether it would kick-start a debate on how much the charges should be when the bridges revert to public ownership, and that seems to have happened.

A race to the bottom on tolls is of course great news for motorists as we reach the point where key decisions will now be made.

Carwyn Jones will try to keep the pressure up on devolving the bridges, or at the very least being able to keep a share of the revenue, but there's been no sign of that happening as it didn't figure in any of the recent discussions on extra devolution for Wales.

Another announcement related to a commitment to hold talks on a city deal for Cardiff.

City deals are all the rage. The Northern powerhouse in and around Manchester has been the Tories' attempt to build much-needed popularity in the north of England.

Moment in time

The big problem for everyone trying to get their heads around city deals in Wales is working out how they work when there's a devolved government which already deals with economic development and infrastructure projects.

I'm told the plan would be to include the Welsh government in any talks between Whitehall and Cardiff Council.

What it could mean for the city is significant funding for infrastructure.

The best model to look here is Glasgow where there was a city deal struck and in return for investment from London, the city council had to deliver on targets for employment.

The £500m investment from the UK Government was matched with £500m from the Scottish Government to deliver a £1bn package.

But as one senior Welsh government official reminded me this morning, that deal was signed a month before the referendum and should be seen in that "moment in time" context.

It's unclear whether a Cardiff package could deliver similar levels of investment but the Conservatives have pointed to a track record on city deals which shows they deliver on their pledges.