The following amendments have been selected: amendment 1 in the name of Jane Hutt, and amendments 2, 3, 4, and 5 in the name of Rhun ap Iorwerth.

We move on now to item 5, which is the Welsh Conservatives’ debate on the autumn statement 2016. I call on Nick Ramsay to move the motion. Nick.

Motion NDM6182 Paul Davies

To propose that the National Assembly for Wales:

1. Notes the UK Government’s Autumn Statement;

2. Acknowledges the announcement that the Welsh Government will benefit from an additional £436 million by 2020-21 to its capital budgets from the Autumn Statement;

3. Notes that the UK Government will raise the National Living Wage to £7.50 to support jobs and earnings across the UK;

4. Further notes that the Personal Allowance and Higher Rate threshold will increase to £12,000 and £50,000 respectively by 2020-21, which will reduce the income tax bill for 1.4 million individuals in Wales in 2017-18.

Motion moved.

Thank you, Deputy Presiding Officer. I’m pleased to move this motion today noting the UK Government’s autumn statement—a statement that has seen a significant increase in capital funding for the Welsh Government over the next five years.

Although admittedly times are still very tough financially, Wales is in a stronger funding position than it was before. Not just our view on these benches, but the view of economists like Gerry Holtham. The Welsh Government capital budget will increase by over a quarter in real terms over the next five years, from £1.28 billion in 2015-16 to £1.78 billion in 2020-21. This includes an extra £436 million over five years. That’s money that can be spent here in Wales on roads, houses, schools, hospitals—important infrastructure.

We need to make sure that Wales plays a key part in the UK Government’s industrial strategy, which will pave the way for significant research and development money for our universities. This further strengthens Wales’s already cutting-edge reputation in this area. We know that there have been concerns about the effect of leaving the European Union on funding for research and development, so it’s important that we access funding where we can, prepare for the future, and develop our own industrial strategy here.

To put it bluntly, we need to prepare Wales to seize the opportunities ahead. Of course, there are certain levers that the Welsh Government doesn’t have: taxes—well, at least until 2018. From April 2017, the UK Government will cut income tax, which will reduce the income tax bill for over 1.4 million people in Wales in 2017-18 and take 61,000 people out of income tax altogether.

There are other levers that the Welsh Government does currently have—business rates, for example. Assembly Members will be all too well aware, I’m sure, of my concerns about the business rate revaluation and the effect of this on businesses in my constituency. And not just mine—there are pockets of business rate hikes proposed across other parts of Wales as well. I held a public meeting on Monday evening that was packed with worried shopkeepers and other businesses. Some businesses are facing massive hikes in their rates. Others are facing smaller, but still significant rises that they simply cannot afford. We desperately need a business rate relief scheme here in Wales that is at least equitable with that across the border, and all importantly, a sound transitional scheme. This is a question of fairness. Businesses need to be treated fairly. Can I take this opportunity to once again ask the Welsh Government to look again at this, and provide businesses with the support that they so desperately need in the run-up to next April’s revaluation coming into effect?

Now, on the bright side, we welcome the UK forecast that the economy is projected to grow, with unemployment remaining at an 11-year low, whilst the International Monetary Fund has stated that the UK economy is the fastest growing economy in the G7 this year. The Chancellor said that that growth is forecast to be 2.1 per cent this year and 1.4 per cent in 2017. I give way to Huw Irranca-Davies.

I thank Nick for giving way. Certainly, having people in work is a good thing. We have to agree on that. But I wonder, what does he make of the Office for Budget Responsibility’s revised forecast now on wages, growth and investment? Because what they’re showing clearly is that a huge number, not a small underclass of people, but a large number of the people we represent who are going to be around about £1,000 a year worse off. For the people that he was talking about—the small businesses, the ones who want the business rate relief, and so on—those are the same people who won’t be able to spend the money in the shops. So, what does he make of that? What’s gone wrong here with the budget?

The Member makes a very well-made and important point, and I don’t disagree with you that we mustn’t be complacent here, Huw. I think we would all agree with that. We know from a few years ago that forecasts can be wrong. That is the very nature of them. What I would say is that, overall, since 2010, we know that there’s been deficit reduction. We might disagree about the level of deficit reduction that was required, and that differs from party to party and Member to Member, but the economy is in a sounder position than it was before. But, that doesn’t mean that that wealth is equally spread. What I would say is that, in the wake of the European referendum, we definitely do need to make sure that the people that you represent and that I represent, the people in Wales, do actually continue to get an equitable share of the cake, because I know that that has been a big concern of Members here and in my own constituency as well. But you do make a very good point.

The UK Government is seeking to clamp down on tax evasion. Of course, we have our own take on all this here in Wales with the devolution of some taxes in 2018 and the establishment of the Welsh Revenue Authority, currently in embryonic form.

I’ve sat through—and I can see other Members who’ve done this—many hours of Finance Committee sessions scrutinising the new tax legislation, initially for the new land transaction tax. Measures to tackle evasion and avoidance are integral to the legislation. The GAARs and the TAARs are mindboggling. The Members of the Finance Committee will know what I mean by that and, when we bring it to this Chamber, you will all get your chance to see the intriguing detail of these aspects of tax legislation as well.

I do think the Finance Committee is doing a good job of scrutinising this area and providing effective safeguards and checks. Although, of course, time will tell and this is uncharted water for the Assembly and the Welsh Government and we need to keep a close eye on how it develops.

So, what extra funding will Wales get as a result of this statement? The Welsh Government capital budget will increase by over a quarter in real terms over the next five years. As I said earlier, this includes an extra £436 million for our roads, houses, schools and hospitals—vital infrastructure.

From April 2018, the UK Government will facilitate the Welsh Government’s ability to borrow up to an overall limit of £500 million to finance capital spending. The £2 billion share of Welsh income taxes soon to be under the control of the Welsh Government will allow for an increase in this capital borrowing limit set by the UK Government. This will be one of the key outcomes of the ongoing fiscal framework negotiations. Can I once again put on record the Welsh Conservatives’ support for a fiscal framework? I’ve had many discussions with the Cabinet Secretary for finance about this and I’ve discussed it with his predecessor who’s in the Chamber today as well. This is an ongoing issue of concern for all of us here. It is absolutely essential, particularly now with the devolution of taxation. It is vital that future reductions in the block grant are properly indexed and proportionate in order to avoid the so-called Barnett squeeze, which has been a significant problem in the past, but threatens to be an increased problem in the future if we do not get those reductions in the block grant right.

Although we continue to look forward to a time when the Barnett formula is replaced, the Welsh Government will continue to receive funding though the Barnett formula in the same way as the Government’s investment in areas that are devolved, including transport and housing. This places a greater emphasis on the need to scrutinise the Welsh Government’s investment decisions over the next five years to ensure that this money is being invested transparently and to deliver improvements to Wales’s infrastructure.

The tax-free personal allowance has been increased again to assist working people across the UK and across Wales. Across the UK, this has cut tax for 28 million people since 2010, taking an additional 4 million people out of income tax. The personal allowance will be raised even further to £12,500 by the end of the current UK Parliament. This should reduce the income tax bill for over 1 million people in Wales in 2017-18 and take 61,000 people out of income tax altogether.

If I can turn, in the time I’ve got left, to city deals, I think we would all accept we need to unlock growth and regional productivity, and city deals are key to doing this. We welcome progress in discussions on a city deal for the Swansea bay city region, the consideration of a growth deal for north Wales and the £1.2 billion city deal for the Cardiff capital region. There is progress on the north Wales growth deal whilst, closer to home, one of Cardiff’s iconic buildings, the old Cardiff Bay railway station, is to become a new museum of military medicine with £2 million of funding. I know that the previous Minister, Edwina Hart, backed that. I had some discussions with her back when she was an Assembly Member about that. There’s also £1 million extra funding to support the air ambulance service in Wales and an additional £1.5 million for Mind to provide improved mental health support for emergency service staff in Wales and England.

Deputy Presiding Officer, I’m pleased to have opened this debate today. We are all well aware that times are still very tough financially and we recognise that the Welsh Government has a difficult job to do. However, Government is a question of priorities and making the most of the funding that you do have available. We believe that the autumn statement does at least leave Wales in a better position than it was before. What matters now is that we grasp the opportunity before us and make the most of the additional funding available to develop our infrastructure and to build a better future for everyone living in our country.

Thank you very much. I have selected the five amendments to the motion, and I call on Jane Hutt to move formally amendment 1 tabled in her name.

Amendment 1—Jane Hutt

Delete point 2 and replace with, renumbering accordingly:

2. Notes the Autumn Statement includes additional capital allocations for the Welsh budget of £442m between 2016-17 and 2020-21.

3. Regrets the UK Government did not use the Autumn Statement to end its damaging policy of austerity.

4. Regrets the UK Government did not recognise the need for investment in the health service, social care and other essential public services in the Autumn Statement.

Amendment 1 moved.

Formally.

Thank you very much. I call on Adam Price to move amendments 2, 3, 4 and 5, tabled in the name of Rhun ap Iorwerth.

Amendment 2—Rhun ap Iorwerth

Add as new point at end of motion:

Regrets that the UK Government failed to commit to a timescale for the delivery of electrification of the Great Western railway between Cardiff and Swansea, and the electrification of the North Wales Main Line.

Amendment 3—Rhun ap Iorwerth

Add as new point at end of motion:

Regrets that the UK Government failed to commit to delivering the Swansea Bay tidal lagoon.

Amendment 4—Rhun ap Iorwerth

Add as new point at end of motion:

Regrets that the UK Government failed to designate HS2 as an England-only infrastructure project.

Amendment 5—Rhun ap Iorwerth

Add as new point at end of motion:

Regrets the failure of the UK Government to devolve air passenger duty.

Amendments 2, 3, 4 and 5 moved.

Thank you, Deputy Presiding Officer. I’m pleased to have the opportunity to move amendments 2, 3, 4 and 5 tabled in the name of Plaid Cymru. Of course, in these amendments, we are focusing specifically on the things that were omitted from the autumn statement. It may be some sort of reflection of the different personality of this Chancellor. There is some suggestion that he didn’t want to follow the theatrical approach taken by his predecessor and make a huge number of announcements all at once. He perhaps wanted to hold certain things back. I do hope, with some of the things that I am going to raise, that that is the case and that we won’t have to wait too long for announcements that we hope to see.

Amendment 2 refers to the electrification, not only of the Great Western line between Cardiff and Swansea, where there have been delays, which is quite unacceptable and which will, of course, impact on the economy to the west of Cardiff, but also the electrification of the north Wales main line. With regard to that, it is regrettable to see that there has been no agreement that HS2 is an England-only infrastructure project. There is evidence from KPMG that suggests that Wales would be worse off in terms of competitiveness as a result of HS2. Of course, because of its categorisation, there is no Barnett consequential as a result of HS2. That’s very sad, if truth be told. I spoke to the Secretary of State about this issue at a CBI dinner, but why is Wales not treated equitably in terms of air passenger duty? There is no rationale, nor is there any ethical reasoning for that, when Wales needs it, in this post-Brexit period, when there is all this economic uncertainty. Why aren’t we being given fair play? That’s what we’re asking for—the same powers as have been granted to Northern Ireland and Scotland.

I’m grateful to Adam Price for giving way. I neglected to mention air passenger duty in my speech, but you’ve just brought it up, and you make a very valid point, and we will be supporting the Plaid Cymru amendment on air passenger duty. I think that would be a very important tool in the Welsh Government’s toolbox.

Well, I welcome that very warmly, and if this place can speak with one voice, then I truly hope that that voice will be heard in the corridors of Whitehall and Westminster.

Finally, and to the same end, if truth be told, I hope that there will be support for this too. We do need progress with this golden opportunity that we have with the tidal lagoon. Dai Lloyd insists that it should be called ‘morlyn morlanw’ in Welsh. I’m not sure whether Dai’s terminology is trying to suggest something that isn’t quite clear, but I do like the alliteration. It’s almost ‘cynghanedd’ and it’s another reason for supporting it, if truth be told. Charles Hendry has submitted his report now to the Secretary of State, and therefore I do believe that we need to make progress and see that Wales does grasp this opportunity.

There are some things in the statement that I would welcome: the additional funding for innovation, which has been mentioned by the Conservative spokesperson—the biggest increase in funding for innovation since 1979. I think it’s £4.7 billion in addition over this period, and an additional £2 billion by 2020. We must ensure that Wales benefits from this opportunity. There is talk about the creation of a DARPA, which is the American body that led, partly, to the development of the world wide web by Tim Berners-Lee. Well, why not locate that body, which will run this new fund for industrial challenges, not in the south-east of the UK but here, in Wales?

Continuing the trend of recent years, the UK economy is predicted to be the fastest major growing economy in the world this year with 2.1 per cent growth forecast by the Office for Budget Responsibility. The OBR also forecast that the deficit will fall to 3.5 per cent of GDP this year and 0.7 per cent in 2021, the lowest in two decades, and that debt as a proportion of national income will begin falling in 2018-19 for the first time since 2001-02. However, the Labour Welsh Government spending machine measures success by how much spent not how well and continues to whinge about austerity rather than acknowledge that this was an inheritance not a choice, being defined by how much money you have to spend. They never complained when the previous Labour UK Government pursued light touch financial regulation, ignoring years of warnings that the UK banking system was more exposed to sub-prime debt than anywhere else in the world. [Interruption.] Labour left the UK with the second highest deficit amongst OECD countries and its biggest budget deficit in peacetime history. They still fail to acknowledge that if you have high debt, someone else owns you and that the alternative would generate bigger cuts. I give way.

I thank him very much for giving way, indeed. I would simply observe that, back in 2007-08 when I was a Member of Parliament, I recall standing up with the then shadow Chancellor supporting the Labour Government for the way that it regulated. They were both wrong on light regulation. They were both wrong. But I have to point out to the gentleman that the shadow Chancellor, George Osborne at that time, was saying that this was the way to run financial affairs. He was wrong, so were we. But don’t cast it simply at the Labour party. I think the whole world was wrong at that time.

Had you been here, you’d have heard me warning in 2004 that we faced a day of reckoning, as somebody who came from the mutual banking sector and knew there was a ticking time bomb that wasn’t being addressed.

The Chancellor has now been able to adopt more flexible rules for the budget deficit, but only because of spending discipline since 2010 and because we will no longer have to meet the EU requirement to get overall debt down to 60 per cent of GDP once we leave. The autumn statement was therefore able to acknowledge the need for further stimulus, reducing the income tax bill for 1.4 million individuals in Wales next year, taking a further 61,000 in Wales out of income tax altogether, increasing the Welsh Government’s capital budget for infrastructure spending by over a quarter in real terms to 2020-21 and discussing options for a growth deal with north Wales.

Proposals for the improvement of the regional transport and economic infrastructure detailed in a growth vision for the economy of north Wales, developed by the North Wales Economic Ambition Board in partnership with the Mersey Dee Alliance and the Cheshire and Warrington local enterprise partnership, went to both the UK and Welsh Governments this summer. The UK Treasury responded by asking the ambition board to articulate their strategic priorities and to prioritise projects, and the board is currently working on this. However, the Welsh Government has dodged my questions about how and whether it has responded to the call in the north Wales growth vision document for the devolution of powers by the Welsh Government over employment, taxes, skills and transport, which it states would boost the economy, jobs and productivity, create at least 120,000 jobs and boost the value of the local economy from £12.8 billion to £20 billion by 2035.

The UK economy is projected to continue to grow with unemployment, as we heard, continuing at an 11-year low. Although Wales has been the fastest growing part of the UK outside London since 2010, it began from bottom position and it’s thanks to the policies of economic discipline pursued since the change of UK Government in 2010. It is no coincidence that the two years coincide. With Labour in charge of economic development in Wales, however, we still have the highest levels of underemployment, working age worklessness and child poverty in Britain. Wales still produces the lowest value of goods and services per head amongst the 12 UK nations and regions. The UK Government has published a new draft charter for fiscal responsibility to ensure that future generations are not burdened with our debt and to restore a borrowing ceiling for stimulus during times of slowdown.

The autumn statement details the UK Government’s commitment to maintaining fiscal discipline while recognising the need for investment to drive up productivity and support economic growth. In response, the Confederation of British Industry said that its emphasis on research and development and local infrastructure will help businesses in all corners of the UK to invest with greater confidence for the long term. The Institute of Directors said this was a sensible and sober autumn statement, and the British Chambers of Commerce said that the Chancellor’s strong focus on the growth requirements of our cities, regions and nations will not go unnoticed in business communities across the UK. Is it too much to hope that instead of undermining investment and jobs, the Labour Welsh Government will at last recognise that it has a responsibility to try and instil confidence in both the urban and rural economies by embracing and pursuing policies that improve productivity, competitiveness and resilience? Thank you.

I sometimes think I’m in a surreal reality. Let nobody be in any doubt, then, that this autumn statement is yet more proof, if it were needed, that the UK Tory Government treats Wales as an afterthought, with virtually nothing to say on the significant challenges facing our country.

The additional much lauded £436 million for Wales, which we’ve heard a lot about, for the next five years, is indeed welcome, but it is simply a consequence of the Barnett formula rather than any real show of intent or support for Wales. In fact, it’s worth pointing out that infrastructural investment as a percentage of GDP has continued to go down under this Chancellor.

Businesses and communities in Wales needed certainty from the Chancellor. [Interruption.] If I just continue for a bit longer. Certainty on the future of infrastructural projects like the Swansea tidal lagoon, action on electrification and articulated commitment to support vital investment in the south Wales metro. Instead, we have simply echoes and sounds of silence from the Chancellor on these important projects. And it is noteworthy and relevant that the Chancellor made no mention of the English national health service at all, even though we have had repeated lectures from those opposite about the purported merits of the English versus the Welsh national health service over the last couple of years.

In contrast to this silence, Welsh Labour Government is investing a further £240 million in 2017-18 to meet growing costs and rising demands in health and social care in Wales. When the people of Wales needed real action, all we have got from the UK Tory Government is repeated reannouncements and silence. In fact, very little in the autumn statement will actually improve life for people in Wales, certainly not those suffering from personal independence payment, disability and in-work benefit cuts, high debt and stagnant wages. Certainly, paragraph 2 of the Conservative motion notes that the UK Government will raise the national living wage to £7.50 to support jobs and earnings across the UK, but the national living wage for 2017 is lower than projected just eight months ago, although I have to just warn Members to be very careful with the Office for Budget Responsibility’s revision against revision against revision of the targets that they cling to.

Will you take an intervention?

Yes, carry on.

I take your point about the OBR, but the OBR has also projected that the tiny increase is way below what even on their figures would be required to meet an actual living wage, and well below what the Labour Party are committing to introducing.

I completely agree with the Member opposite. I think it’s time the OBR did look at its revisions and how it revises its revisions on a very regular basis. I wouldn’t take them as a measure.

So, the OBR was projecting a national living wage of £7.60 an hour in 2017. The Conservative motion itself notes it will be 10p lower, at £7.50. This is going to cost the average recipient on the national living wage over £200 a year. Those who cannot afford to lose out once again will lose out. Not only, therefore, is the Government’s announcement lower than it needs to be to meet their own commitment to £9 by 2020, it is lower than the actual living wage of £8.45. It is highly correct but at the same time shameful that failed Tory austerity has indeed produced a highly low age, low investment, high debt UK economy in which productivity is stagnating. Average wage growth is at its lowest according to the Resolution Foundation since the 1900s. That is the reality of this autumn statement.

The Labour Party believes in a full and proper wage for a working day, and that is why we are committed to introducing a statutory real living wage. [Interruption.] I’m sorry, I would, but I really don’t have time to finish my point. Labour will halt the scourge of low pay by creating a new independent living wage review body to recommend an annual real living wage. And under the next UK Labour Government, we will strive to ensure that everyone will have enough to live on.

Finally, I’d like to concentrate on the Welsh Government’s alternative approach. Despite an 8 per cent real-terms cut to its overall budget the UK Tory Government has given since 2010, the Welsh Government has done all in its power to protect public services in Wales from the worst effects of ongoing austerity and fiscal uncertainty. The Welsh Government will continue to do this to mitigate and innovate against the UK’s worst cuts coming.

Welsh Labour in government have shown that there’s a different way to this failed obsession with austerity followed unconditionally by the Tory Government. It has been bad for growth, bad for wages, bad for debt and bad for the people of the UK.

Lastly, it is right to state that the Welsh Labour Government has different priorities to the Tories in England, where huge cuts to local government, social services and public health budgets are already causing chaos and will store up huge problems for the future and for those who need to use those public services right now. It is right to state that it is universally acknowledged that the national health service is safer in Labour’s hands. I respectfully submit that comparison of the UK Tory Government autumn statement and the Welsh Labour Government’s draft budget shows and fully demonstrates that the prosperity of our people is safer in Welsh Labour hands. Thank you.

I welcome this debate on the Chancellor’s autumn statement. My tone will be very different indeed to the last speaker’s, who seems to want to talk Wales down. It seems to be the glass is half empty with the last speaker—

No, completely empty.

No, completely empty rather, absolutely. Now I welcome the UK’s investment in Wales’s economic future through a £400 million increase in capital funding over the next five years. This money, of course, is additional to the £500 million the Welsh Government will be able to borrow to invest as well from 2018, a move that the Wales Governance Centre has said could open the door for a large increase in the Welsh Government’s ability to borrow and pay for some of the much-needed infrastructure projects across Wales. My own view is—

Will you take an intervention?

Yes, I will.

Thank you. It’s quite clear from statistics from the ONS that 4.4 per cent of our GDP spending was infrastructural under the Labour Government, and then it went down to 3.3 per cent, and then it’s gone down further to 2 per cent from Osborne to Philip Hammond at this moment in time.

You continue to be ‘glass all empty’. Despite the gloomy forecast, we’ve got to remember that we close 2016 with record-low unemployment—[Interruption.]

I can’t hear his arguments, sorry.

We close 2016 with record-low unemployment, significantly below the EU average, and with the British economy set to be the fastest growing in the G7. My own view is that making improvements to our infrastructure has got to be the priority for the UK Government and the Welsh Government, especially as a result of leaving the EU. Indeed, as a result of the funding security that the Chancellor has provided, the Welsh Government can be ambitious in seizing the opportunities for Wales in the year ahead, and there’s every reason, I think, to be confident for the Welsh prospects in 2017.

But I agree with Nick Ramsay and Huw Irranca-Davies: we can’t afford to be complacent.

Excuse me, can we stop having a conversation between the leader of the Conservatives and the front bench there and listen to what Mr George has got to say, please? Sorry—carry on.

Thank you, Deputy Presiding Officer. I think that my colleague Nick Ramsay also mentioned that the autumn statement sets out the firm funding foundations to invest in our roads and schools and hospitals to, of course, drive up growth and support the economy as well. Now, on digital infrastructure such as fibre broadband and fifth generation—this is one of my hobby-horses, I know—the autumn statement paves the way for homes and businesses to reap the benefits of greater connectivity and new technologies through a £400 million digital infrastructure fund and a further £740 million to trial superfast 5G mobile networks. Now, the Welsh Government always seems to be playing catch-up on this with regard to the Scottish Government and the UK Government. They seem to be behind all the time on this issue. The additional finances will go a long way to help in terms of the Welsh Government. The Scottish Government doesn’t have any extra powers to the Welsh Government in this regard, yet they’ve put a mobile action plan together and that commits them to collaboratively working together with the telecoms industry. The Welsh Government has not yet even got a similar plan even in its thinking. So, I do think that we need to be supportive, also, of our small and medium-sized businesses.

During the Assembly elections, Labour promised to wipe out business rates altogether. Now, I’ve got to say, that’s a great pledge—I fully support it—but it has not yet been delivered, of course. The powers have been devolved for business rates since 2013 and yet we continue to wait for a permanent system of support for Welsh SMEs. There’s also an additional £16 million over the next four years in resource funding that the Welsh Government can spend on business rates and public services. The power to set business rates, I think, is one of the most powerful levers that the Welsh Government has got to get the economy moving. We’ve heard numerous issues with regard to Monmouthshire and my own constituency with regard to businesses suffering there.

So, as I come to close, Deputy Presiding Officer, I would say there are plenty of opportunities available, but I don’t want them to remain opportunities—I want them to become opportunities and I hope that that will be the case for the Welsh economy in 2017.

I appreciate the optimistic tone of the previous speech. We can support the Conservative motion today, but I want to concentrate, actually, upon the Labour amendments, in particular amendment 3, because this is a mantra that we hear in many debates in this place, about this so-called damaging policy of austerity. Well, what is austerity in current circumstances? The dictionary defines the word as ‘sternness or severity of manner or attitude’, much like the speech we heard from Rhianon Passmore earlier on, perhaps—I’m not commenting on the content of it, but I mean the style of delivery. But all it means, actually, in this context—austerity is living within your means. It’s something that we all have to do in private life and yet that is what the current Chancellor of the Exchequer is not doing, because between April and August this year, we’ve run up a budget deficit of £33.8 billion against a forecast in March for the entire year of £55.5 billion. The Chancellor has missed his target for spending reductions by a very significant margin. In effect, we are overspending by £6.5 billion per month—that’s £80 billion a year and that is equivalent to 5 per cent of our national income. It’s quite clear that that can’t continue indefinitely.

There was a time, of course, when Labour Governments were committed to a balanced budget. The Blair administration, between 1997 and 2001, was a model of fiscal prudence, because, of course, they were following the plans of Kenneth Clarke in the previous Government. But after the 2001 general election, of course, the brakes were removed from the train and the foot was placed firmly on the accelerator, and instead of running surpluses on the current account, which is what happened in those years, everything went rapidly into reverse.

I thank very much the Member for giving way there. He’s right that, ultimately, we do need to, if not balance the books entirely, at least move towards a more balanced structure within the finances. But does he share with me the worry that, in this period of tightening of the belts, the growth in wealth inequality between those at the very top who seem to have done exceptionally well—and all the data will show it—and those at the bottom who have been punished, that’s the issue of austerity—not finding the balancing of the books, but balancing austerity on the backs of those who can least afford it?

That’s one of the reasons for UKIP’s relative success, I would say, actually—the realisation of that. It’s certainly one of the reasons, I think, why Donald Trump is going to be the next President of the United States—the feeling of people who’ve been left behind by globalisation—and that’s not something that is going to be very easy to deal with.

But I want to just concentrate upon this question of what austerity means and what, therefore, is our freedom of action to raise tax revenue to spend on all the good things that we would like to spend on. The fact of the matter is that the national debt was doubled in the 13 years that Gordon Brown was either Chancellor of the Exchequer or Prime Minister, but, unfortunately, it was doubled again within the five years that George Osborne was Chancellor of the Exchequer. From a national debt of £350 billion in 1997, it stands this year at £1.6 trillion, and now that’s 85 per cent of our GDP. So, the previous Chancellor set a goal of balancing the budget by 2015, then it was moved to 2020, and the current Chancellor has now abandoned that target altogether. The debt interest that is being paid, even at current rates of interest, is £50 billion a year. That’s money that could be better spent on the health service or any of the other good things that we would like to see the money spent on, but if we carry on borrowing under the illusion that there’s some great money tree out there from which we can pick off the fruits, then I’m afraid that debt interest is going to grow as a proportion of Government spending and there’ll be even bigger squeezes on health and social services.

The Presiding Officer took the Chair.

This isn’t a miraculous realisation on my part. Many other Governments have found themselves in a position where they had no choice but to impose austerity. I’m old enough to remember the Labour Government in the 1970s, and I remember Jim Callaghan, the former Member for Cardiff South East, who, making a speech at a Labour Party conference in 1976, said,

‘We used to think that you could spend your way out of a recession, and increase employment by…boosting Government spending. I tell you in all candour that that option no longer exists, and that in so far as it ever did exist, it only worked on each occasion…by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step.’

Indeed, we don’t have to go back as far as Jim Callaghan, because we can read the words of Alistair Darling, and this is the final sentence or two that I shall say in the course of this speech. On 24 March 2010, asked by the BBC how his plans as the Labour Chancellor at the time compared with Margaret Thatcher’s attempt to slim the size of the state, Alistair Darling replied,

‘They will be deeper and tougher—where we make the precise comparison…is secondary to…an acknowledgement that these reductions will be tough’.

I’m afraid there is no escape from reality at the end of the day.

I’m grateful for the opportunity to speak in this debate this afternoon. It provides an opportunity to highlight the transformation that has taken place in the United Kingdom economy, thanks to the policies of this Conservative Government in London. Labour left behind a dismal economic legacy: Britain had suffered the deepest recession since the war, we had the second largest structural deficit of any advanced economy in the world, and unemployment had increased by nearly 0.5 million. The incoming Government had to make realistic assessments about the state of the British economy. This involved taking the difficult decisions required to reduce the deficit and to control spending.

Thanks to their long-term economic plans, Britain has a strong and growing economy now. According to the IMF, the UK has the fastest growing economy in the G7 this year. Employment is up by 2.8 million since Labour were in power, and unemployment has fallen to an 11-year low. The deficit has been cut by two thirds and debt as a proportion of national income will begin falling in 2018-19.

As a result, the UK Government has helped ordinary working families keep more of what they earn. Raising the tax-free personal allowance—[Interruption.] Let me finish a few things. If I have time, I’ll give them. Raising the tax-free personal allowance has cut tax, actually, for more than 28 million people, and 4 million people are totally out of tax altogether. The national living wage is going up to £7.50 an hour from next year, giving a further pay rise to 1.3 million people. Fuel duty has been frozen for the seventh year in succession, saving the average car driver nearly £130 and a van driver over £350 a year.

We, here in Wales, have also seen the benefits of these economic transformations. They have allowed the UK Government to invest an unprecedented amount of money in Wales. We already have the biggest rail infrastructure programme since the Victorian era. The electrification of the Great Western main line and the Valleys line network stands in stark contrast to the record of the last Labour Government, which did not electrify one single inch of track in Wales in 13 years.

Investing in rail electrification is one of the most effective ways to grow the economy in Wales. The autumn statement will see the Welsh Government benefit from a boost to capital budgets of over £400 million. This investment gives the Welsh Government the opportunity to greatly strengthen and diversify the Welsh economy. Gerry Holtham—listen to the people on this side, now—confirmed recently that Wales is no longer underfunded. That is his quote closed. The Welsh Government can no longer pass the buck and blame Westminster for their failure to deliver the changes Wales desperately needs. Hopefully, we can progress the M4 relief road, which is desperately needed to relieve congestion on this vital artery of the Welsh economy.

I also wish to say something about the apprenticeship levy. I regret that the Welsh Government has failed to commit itself to reinvest this funding into improved apprenticeship training. This is money given by businesses, and it is vital that this is reinvested into training. Groups such as the Welsh Retail Consortium have expressed their disappointment that the Welsh Government is viewing the levy consequentials merely as a revenue stream. They could be used to boost and enhance skills training for people, particularly those in our most deprived communities, such as south-east Wales. Presiding Officer, I welcome this autumn statement, which gives the Welsh Government the chance to seize the opportunities ahead, in a way that builds an economy that transforms Wales and benefits the people of Wales. Finally, we just heard that because of our Government in London, all of Tata’s plants in the UK are going to remain open, and there will be no redundancies in the future. Thank you.

There has been a little bit of criticism today about those on this side of the Chamber who have been a little bit pessimistic in speaking—the glass is half full and so on. Well, I am going to speak this afternoon for those people for whom the glass is, indeed, half empty. When politicians like us wonder why people are lashing out against the establishment, I think that, sometimes, it is staring us boldly in the face. As Adam Price mentioned yesterday, when the Governor of the Bank of England—the bastion of the establishment; the pinnacle of the institutions of capitalism; the original masters of the universe—says that we are facing the first lost decade since the 1860s, or, as he remarked, last seen when Karl Marx was scribbling in the British Library, we had better take notice because history certainly will. Carney told the audience at the Liverpool John Moores University:

‘We meet today during the first lost decade since the 1860s…Rather than a new golden era, globalisation is associated with low wages, insecure employment, stateless corporations and striking inequalities.’

That’s the issue of the glass half empty. There are opportunities that have been mentioned, but for plenty of people, they see no opportunities. He said that the trickle-down economics favoured by some on the right simply don’t work, saying that while trade makes some countries better off—and, in my own words, some people better off and some corporations better off—he said that it does not raise all boats and went on to call for limited wealth redistribution. The instantly famous Liverpool speech will, I suspect, go down in history as the moment when unrestrained free-market capitalism looked in the mirror and saw something ugly and downright nasty. And here is the backdrop for the autumn statement.

Does the autumn statement help reverse this crisis? Does it stack the deck in favour of the ordinary working man and woman, the vulnerable elderly, the young? Does it reconnect our politics and our economics with the people we represent? Well, we all know that working people are now facing a double whammy in living standards of lower wage growth and higher inflation next year. For the best part of a decade, we have had a drag on economic growth—[Interruption.] I will in a moment—productivity growth at negligible levels, and an even bigger, as was remarked, black hole in the public finances. The OBR has revised wages, growth and investment down over the next few years, while the deficit and debt has been revised up. In every single indicator we’re going in the wrong direction. Disposable household income is now expected to grow at a slower rate than previously expected. I will indeed give way to him.

Will the Assembly Member please recognise the fact that mass immigration is a huge factor in lowering the wages of the very worst off in society? It’s those people who are paying the price of 330,000 people a year coming into this country with no skills, and they are taking the jobs of the worst off in our society.

No, there’s a point of disagreement that we have. We can deal with exploitation of workers by dealing with exploitation of all workers. We can deal in a proper way, in a reasonable way, with controlled and well-managed migration. But let us not place all the evils that have been highlighted by Mark Carney and other informed commentators on immigrants. Please. We had today, out here, a large event with refugees who are here, present in Wales. Let’s not lay at their doorstep the ills of the world, because the ills of the world are in the way in which we have an imbalanced economy where the very wealthy benefit, and the very well off are looked after. In the rules of the game and in the autumn statement they benefit. It’s the poorest in society and it’s the poorest in your constituency and mine and others’, who get the brunt of this. It’s not the immigrants. It is the way that we are running the rules of the game.

Now I would have liked—[Interruption.]

The Member is not giving way.

No, because I have a limited time, Presiding Officer. Can I just say—I’m going to run out of time here—we know that overall real earnings are now expected to rise by just £23 a week between 2015 and 2020? This means that the average annual wage will be a £1,000 lower in 2020 than predicted just eight months ago. For those people, the glass is half empty or even worse.

I would have liked the new Chancellor and the new Prime Minister to have used their first autumn statement to change the approach to the disproportionate impact that Government policies have had on women, on ethnic minorities, and on disabled people. But instead, there’s been some tinkering, and they have refused once again to produce a proper impact assessment of their policies over the last few years and now on those groups. The Chancellor’s budget gives little to women, who’ve suffered the brunt of this style of policy. Dr Eva Neitzert, the director of the Women’s Budget Group, said: ‘Before the AFS’—the autumn statement—

‘we were promised action to help the “Just about managing”’.

The JAMs—the catchword of the day.

‘While the increase in the minimum wage and reduction in the universal credit taper to 63p are welcome, they are a drop in the ocean compared to the cut in living standards of between 18 and 20 per cent by 2020 that women and the poorest households are facing because of cuts to benefits, tax credits and services since 2010.’

I could go on, but I’ve gone over time. Can I just say this? The Governor of the Bank of England in the Liverpool speech called on politicians to develop a system of inclusive growth where everyone has a stake. This autumn statement was a chance to better share the proceeds of growth, or at least to spread the pain of austerity more equitably. It is a missed opportunity and my constituents, and many constituents of the Members in here today, are condemned to more of the same, and more of the pain. For many of them, the glass is indeed half empty, if not totally empty.

I call on Jane Hutt on behalf of the Government.

Diolch yn fawr, Lywydd. I do welcome this debate today. It provides us with the opportunity to respond to what can only be described as a missed opportunity by the UK Government. The Cabinet Secretary for Finance and Local Government issued a written statement on the day of the autumn statement setting out the implications for Wales. He also had the opportunity in the Chamber yesterday to hear what the autumn statement means for the Welsh budget and our future spending plans. But I do think today’s debate provides another chance—and clearly that’s been demonstrated this afternoon—to reflect on the impact of the UK Government’s austerity measures on Wales.

We have had nearly a decade of the UK Government’s austerity policies, and they’re clearly not working. Alongside the autumn statement, as has been said this afternoon, the OBR downgraded many of its key forecasts for the remainder of this Parliament, and the future promises no great improvement. We can look forward to a budget remaining in deficit until beyond the end of this Parliament, with little or no improvement in living standards. If anything, we can expect a rise in inflation, continued pressure on pay awards and a continued deterioration of living standards. As Huw Irranca-Davies has said, austerity has deepened inequalities.

If you then follow on, the powerful points that were made by Mark Carney, the Governor of the Bank of England—I would also like to repeat some of the points he made in Liverpool. He said that the UK has recorded only a mediocre growth in the economy and negligible growth in productivity. Meanwhile, the budget remains in deficit and Government debt has increased enormously. He spoke about the impact on people’s lives, as Huw Irranca-Davies has today, and he said:

‘When combined with low growth of incomes and entrenched in intergenerational inequality, it is no wonder that many question their prospects.’

But yes, Nick Ramsay, you’re right, in moving this motion, that the one area that offers some promise is the boost to infrastructure investment—something, of course, the Welsh Government’s been arguing for strongly for many years. We will make good use of the additional £442 million capital between 2016-17 and 2020-21. This injection does go some way to restore the cuts the UK Government has made to our capital budget over recent years. However, our capital budget will still be 21 per cent lower in real terms in 2019-20 than it was in 2009-10.

It is disappointing that the UK Government hasn’t taken the opportunity to end austerity. At a time of rising inflation with an ageing population, let’s look at the changes to our revenue budget. An extra £35.8 million between 2016-17 and 2019-20—negligible. They don’t begin to make up the deep cuts we’ve seen to our public spending over recent years. And by the end of the decade, our revenue DEL will have been reduced by 8 per cent in real terms, equivalent to around £1 billion less for vital public services in Wales. Furthermore, as we debated yesterday, there are £3.5 billion of cuts in waiting for 2019-20, threatening more cuts to the Welsh budget. This perpetuates the uncertainty we’re facing at a time when providing stability and certainty is more important than ever.

And what about other key areas where we have been seeking progress—together, I would say, across this Chamber—to help drive forward our economy? I agree with Adam Price, in moving your amendment; it’s disappointing that those key initiatives and levers, such as the devolution of air passenger duty and the importance of the Swansea tidal lagoon, were not supported in the autumn statement—another missed opportunity. Nothing was said, but I very much welcome the fact that the Welsh Conservatives are supporting our call, as they did in the cross-party Silk commission. There’s support for the call, across this Chamber and across parties, for the devolution of air passenger duty.

Always, when we speak with a united voice, we have a stronger, more powerful case. And backing Mark Drakeford, as he has, in all important negotiations—as you say, Nick Ramsay, in terms of the fiscal framework—and of course arguing, as he is today at a JMC Europe on our needs in terms of the impact of Brexit.

Ahead of the autumn statement, Mark Drakeford did write to the Chief Secretary to the Treasury to reinforce the Welsh Government’s support for the Swansea bay tidal lagoon and I am glad that both the Swansea city deal and the north Wales growth deal were both acknowledged in the autumn statement. We now have to see the UK Government move forward in terms of response.

But, Llywydd, the Welsh Government has taken a different approach to austerity. It was set out in our draft budget, a budget for stability and ambition, which was passed yesterday in this Chamber. Despite years of austerity, we’re striving hard to protect our essential public services—and with results. As Rhianon Passmore has said, the people of Wales need certainty and real action.

Surely the most devastating critique of Welsh Government’s action to date on public services is the critique that came forward yesterday on education, which shows that a policy area where Welsh Labour have been in control for 17 years has delivered abject failure when benchmarked internationally against the best in the world? That, surely, is the fundamental critique of where Welsh Labour have let the Welsh people down? Through education, you give empowerment and you give prosperity, and you haven’t given that to many thousands of children right the way the length and breadth of Wales.

Well, you know, as the Cabinet Secretary said yesterday, that Wales now has a clear direction of travel. We have plans in place to develop an excellent professional workforce and we know what we want our new curriculum to deliver. And of course the OECD is very clear that we’re on the right track, and we are investing more in education. I will remind the leader of the Welsh Conservatives of the 20 per cent cut that they were going to make in education when they produced their draft budget. But also, of course, the Welsh Conservatives don’t take responsibility here, in this Chamber, they don’t recognise—they seek to undermine our public services, they don’t recognise that improving the Welsh NHS and ensuring it develops effectively to meet needs is central to our agenda, and how we have protected essential public services. Yes, I hope the leader of the Welsh Conservatives will join with me in praising the Welsh ambulance service. The impressive improvement in ambulance performance in Wales and the fact that it’s the only ambulance service in the UK to improve response times to life-threatening 999 calls is testimony to the hard work and excellent performance of everyone involved in this vital work. But we regret the fact that the UK Government didn’t recognise the need for greater investment in the health service.

So, I think, just in terms of investing and the way we are taking this forward, taking our responsibilities seriously, we’re investing in our NHS and social services—health and social care. The latest figures from the Treasury show that the amount we spend per person on health and social services was 6 per cent higher than in England. A demonstration of our commitment: another £240 million in the draft budget. But, most importantly, our investment in housing and the announcement made by Carl Sargeant last week of £30 million—a new housing pact to deliver 20,000 homes. Our track record of investment in housing and building homes—and this is what a Welsh Labour Government delivers: building homes, meeting housing need, meeting health and education needs, benefiting children and families, tackling inequalities and a housing pact with the public sector, and a fiscal stimulus for our house builders. So, I doubt if even Mark Isherwood could dispute that outcome in terms of our £30 million investment. We will be steadfast, Lywydd—we will be steadfast and ambitious with the powers and responsibilities we have. After six wasted years of austerity, we will continue to provide a shield to the vulnerable, support health and social care, invest in our economy and skills and our children’s futures.

I call on Suzy Davies to reply to the debate.

Diolch yn fawr, Lywydd. Can I just say thank you to everyone who took part in the debate today, as well? The core of the autumn statement, of course, has been about the capital announcement and the possibilities for infrastructure. Adam Price expressed, of course, some frustration over the speed of development, but you didn’t demur about its importance. I will come back to infrastructure, but I want to start with the direct impact on families’ pockets, as a number of speakers have alluded to this, but primarily Huw Irranca-Davies, because I just want to reassure you that your points aren’t lost on us. We may all be looking at good news as far as the rest of the G7 is concerned in terms of comparisons, as Mohammad Asghar said, but Nick Ramsay was right: complacency is a friend to no-one here. Nevertheless, I hope that Members will be able to accept that the living wage and the change in that, the shift in the income tax thresholds and the earlier reversal to welfare cuts, which compromised the purpose of universal credit, are to be welcomed as steps to improve the prospects of those on lower incomes to help keep more of what they earn and assume greater control over their family finances.

But, back to the importance of infrastructure and that extra 25 per cent capital funding that Wales will be getting over the Assembly period, Mark Isherwood made the essential point here that it’s how the money is spent, rather than the money itself that is the most important thing. And I think all of us will be asking Welsh Government over those five years to explain to us how that money will be used to invest in infrastructure projects that go beyond the short-time construction boom. Because it’s just as important to the family pocket as the tax and benefit breaks to have infrastructure that leads to good, sustained, good-quality employment, rather than just a big bang for your buck in a short period of time. So, I’m hoping, Rhianon Passmore, that you will help us in encouraging Welsh Government to get that infrastructure going and that you’ll be as keen as us to avoid the serial faffing around that the Government imposed on the M4, which would not put a penny piece in the pockets of your constituents, and they really would have benefited from those improvements and their ability to access different parts of Wales and, possibly, economic opportunities over the border. The junction 41 fiasco that some of us will remember with great scars cost—cost—small business owners in my region, local employers who employ people and pay them money. So, you can understand my concerns about her party assuming this essential and important responsibility for infrastructure. Leader of the house, we are all careful what you wish for.

Russell George made it plain that infrastructure is not an aim in itself: it’s about growth. Growth means better job prospects, better wages, less pressure on small businesses to do the heavy lifting in our economy at the moment, particularly when they’re being faced by this failure to deal with crippling business rates. When we’ve faced criticism here that we talk too much about businesses and the economy and employers, let’s just remember that the opportunities for them are the opportunities for those who work for them as well, for those who work in those businesses, and for those who may want to set up their own businesses. I do say this though: businesses have done quite well in terms of support under both the London Governments since 2010 and I would like to see them respond by sharing the benefits of any growth that they’ve had with those who work for them. But if the Government here can’t help them with business rates, those benefits get eaten up by costs that they can’t control. For everyone to have a stake, as you say, Huw Irranca-Davies, we’ve got to give businesses, small businesses in particular, a chance to fill the glass in the first place. [Interruption.] I think I’ve got just about enough time.

It’s a very short intervention. Would she join me in commending coffee shops like the one—I won’t name it, but it rhymes with hosta—that sent my 17-year-old a letter saying the wages for the people who are baristas—and he’s one; not a barrister, but a barista—are going up? They said, ‘This is what we’ll be paying the 25-year-olds, but you’re a barista as well; you can do the job, we’re going to pay you.’ Why can’t everybody do that?

Listen, there’s no greater supporter than me for people setting up their own independent coffee shops, as it goes, so you picked the right person to talk to there.

But on this issue of small businesses, leader of the house, I didn’t really hear anything about that in the draft budget that you referred to and that we spent quite a lot of time on yesterday.

I’m running out of time now. I just want to mention Neil Hamilton. Debt reduction—well, of course, we all want see that, but I don’t think that the spectre of tariffs affects our future balance of payments, which obviously is a likely consequence of your position, or is going to really alleviate anyone’s concerns about what’s a very difficult problem. But it is an issue and I think it should concern us all, which is why I commend this very careful and this very steady-as-you-go autumn statement to this Chamber. Thank you.

The proposal is to agree the motion without amendment. Does any Member object? [Objection.] I will defer voting, therefore, under this item until voting time.

Voting deferred until voting time.