7. 6. Debate: The Final Budget 2017-18

Part of the debate – in the Senedd at 5:03 pm on 10 January 2017.

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Photo of Nick Ramsay Nick Ramsay Conservative 5:03, 10 January 2017

I’m pleased to contribute to this debate today on the final budget. Can I firstly concur with the comments made by the Chair of the Finance Committee and also welcome the Cabinet Secretary’s response to some of the Finance Committee’s recommendations, some of which I received earlier today?

As the Cabinet Secretary said in opening this debate, the lateness of this year’s budget, due to the timing of the autumn statement, has understandably caused difficulties for him and his team. It has also caused the now increasingly familiar headaches for the Finance Committee, which the Chair alluded to.

During the draft budget debate before Christmas, I welcomed the news that the UK Government was to deliver an extra £436 million of capital funding between 2016 and 2021 on capital projects, as a result of extra infrastructure spending in England. We are all well aware of the pressing need to invest in infrastructure to grow our economy. I think we’d all agree that Wales needs a truly sustainable budget that looks to the future.

I note that, in the Cabinet Secretary’s response, he’s accepted in principle the idea that the budget should deliver on the goals that have been set in the programme for government. You’re right, Cabinet Secretary, it’s not always easy to draw a line between funding and outcomes, but it is very important that the Government attempts to do so.

Now, it’s quite clear that this additional capital money needs to be carefully spent and the budget proposals talk about an integrated long-term approach to capital funding. I would say, of course, we have heard this a number of times before. Assembly Members who were here in the fourth Assembly may recall, if you were listening of course—you may not recall—that two years ago I warned that the lack of commitment to phase two of the eastern bay link road, beyond phase one, would inevitably lead to greater congestion on Rover Way in southern Cardiff, at the so-called roundabout to nowhere. There is still no sign of the rest of that link road, but I notice that we do today have a commitment to the Llandeilo by-pass, and progressing that—a very popular road scheme, I’m sure, with the people of Llandeilo and further afield who would use that road—but what I would ask is: are we absolutely convinced that these decisions are being taken on the right basis, with long-term sustainability in mind, which I’m sure the Chair of the Finance Committee would talk a lot about? We need to be sure of that, and the public do as well.

The point is that there is sometimes the appearance that decisions are being taken, dare I say it, as part of a short-term budget deal, that doesn’t just look—well, doesn’t even look three years ahead, doesn’t even look one year ahead, but looks just a short space of a few months ahead. That is something that all of us, in principle, want to get away from, but at the same time it is easier, I know, to fall into some short-term deals that we might regret later. Too often budgets have been for short-term political gain, rather than long-term economic advantage. The Finance Committee report recommends that in future years the draft budget should clearly demonstrate how the programme for government has informed and driven the budget-setting process, and how it integrates with the future generations legislation—or doesn’t, as too often the case seems to be.

I’m pleased that the Cabinet Secretary has accepted the Finance Committee’s calls for a strategic impact assessment of budgets on the well-being of future generations objectives. That’s positive. Government is all about priorities and making do within the constraints set. Of course we know those constraints are set to be relaxed: this budget will be the last to cover a period in which the Welsh Government does not have tax powers or significant borrowing power. In the draft budget debate, I pointed out that given that the devolution of tax is now a little over a year away, we might have expected some recognition of this, and an indication of how tax powers will be used as a tool to support the programme for government in future. I know we don’t have those powers yet, but it’s not far off, and if we want other areas of the public sector and Government organisations to work in multi-year budgets and multi-year cycles, then I think we do need to start leading by example in that respect.

I appreciate it’s not just a question of the Welsh Government planning better for the future; the Cabinet Secretary knows, I believe, that the UK as a whole needs to do this too. I’m pleased that since the draft budget debate we had before Christmas, we do now have an agreement on a fiscal framework, which is a massive step forward. We are going to have that statement on the fiscal framework, I know, in a short time to come, so I won’t go too much into that now; suffice to say it will hopefully make it easier for the Welsh Government to plan further ahead. In relation to tax powers, I agree with the Cabinet Secretary that it’s vital that future reductions in the block grant are properly indexed and appropriate. We can’t afford to get this wrong.

Can I say, Cabinet Secretary, in moving to a conclusion, we welcome the move towards a new treatment fund? I still think it’s a shame that the previous Welsh Government didn’t heed our calls for a cancer treatment fund all those years ago. I’m not clear about this new fund in terms of the extent to which it covers existing treatments and those drugs that haven’t been fully approved. Perhaps the Cabinet Secretary can clarify some of the confusion on that. But in conclusion, Cabinet Secretary, we do welcome this budget today. Clearly we have to have a budget, but if sustainability is at the heart of the Assembly’s constitution, then I think we do need to do far more to plan further ahead and to make sure that our budget processes are as modern as possible. It won’t surprise you to know we are not supporting this budget. There are some good things in it, but it falls short of the truly sustainable long-term budget that Wales needs, and this is why we are unable to support it.