There will be no return to prescription charges in Wales, the Assembly Government announced this week, in its budget for the next two years.

The Labour/Plaid Cymru coalition government stands by its commitment to the charges’ abolition, said the Minister for Finance and Public Delivery, Andrew Davies. "Many hundreds of thousands of people in Wales benefit from free prescriptions and there is absolutely no intention to go back on it," he added.

Ahead of the government’s One Wales budget, the News of the World newspaper had reported that the Assembly was about to end the free prescriptions scheme, which began in April 2007, because it had cost far more than the £30 million originally forecast.

Doctors were now writing out prescriptions for products such as Vaseline, and the influx of English people exploiting the scheme meant there were now 100,000 more people registered with Welsh general practitioners (GPs) than actually lived in the country, the newspaper added. It quoted a “senior Whitehall source” as stating that ending the scheme was the last thing anyone wanted, but the money is running out and the Assembly Government is "going to have to pull the plug on it."

Shadow Health Minister Jonathan Morgan responded to the newspaper’s claims by stating that the Welsh Conservatives “have always said subsidising millionaires at the expense of people with long-term health conditions was not a viable or just option.”

"UK Labour, and particularly English health ministers, recognise that free prescriptions for all have led to a disaster in Wales," added Welsh Liberal Democrat Jenny Randerson.

However, Assembly spokesmen described the report as "absolute nonsense," and said there was "absolutely no intention of pulling the plug" on the scheme, which they described as a long-term investment in managing chronic conditions and improving health which will ultimately reduce costs and pressures on the National Health Service (NHS).

- The new One Wales budget, which covers the next two financial years and follows the three-year spending plans announced at the start of the year, will include one-off funding of £63 million in 2009 to ensure that, by year-end, no patient will wait longer than 26 weeks from referral to treatment. An additional £54 million will also be made available in 2010-11 for ongoing action on patient waiting times, said Mr Davies.

"In addition, I am announcing an extra £53 million over two years for the vital area of health research and to support delivery of key health services," the Minister added.