Part of 1. 1. Questions to the Cabinet Secretary for Economy and Infrastructure – in the Senedd at 1:57 pm on 7 December 2016.
I thought it would be helpful, if this question did come up, if I was in a position to say what the latest position is. The Treasury have announced a further £13.7 million, having recalculated the settlement slightly differently from the basis of the original settlement, which was included in the Barnett formula. They imply that this is all extra money, but that in fact is not the position. Previously I’ve gone through the statistics, and I’ll do it again. Basically—[Interruption.] No, it’s very straightforward, as I said. Basically, what’s happened is we got £114 million for Wales as a result of the Barnett formula for the apprenticeship levy, and £90 million of that was immediately removed because it had been placed in the baseline for the Barnett formula, and £90 million is the reduction in apprenticeship money funding in England as a result of the move between the apprenticeship levy and general taxation. There’s been an announcement of another £13.7 million as a result of the recalculation of the formula, based on the moneys arising from Wales, after a lot of lobbying from Wales, from both businesses and from the Government. However, the situation still is that this is an employer tax levied by HMRC without consultation with the Welsh Government.
HMRC, as you know, is not devolved to Wales in any way, and the money directly contradicts our apprenticeship levy. We have been very clear that the consultation that we undertook extensively, just before the levy was announced, and which was well received by all employers in Wales, stands. We have delayed the announcement of our final apprenticeship policy, which I’m hoping to do towards the end of December, as a result of trying to figure out exactly what’s happening. But the bottom line is that this money is not coming back to Wales in the form that the employers would like. It is a tax, pure and simple. Taxes are not devolved, as you know, and neither is it hypothecated in England either—taxes are not hypothecated—so it’s just the current Government’s policy to spend it in this way. That could change tomorrow. We will be holding fast to our well-tried, well-tested and well-consulted-on apprenticeship programme.