6. What steps are being taken by the Welsh Government to assess the future resilience of devolved public services in light of the UK Government’s continuing policy of austerity? OAQ(5)0151(FLG)

Llywydd, we work with our public service partners and the Welsh inspection, audit, and regulatory bodies to assist in mitigating the flawed and failed policy of austerity.

I thank him for that answer. At the heart of the question of resilience, as we’ve just been discussing, is the question of well-being and productivity of the workforce, the ability to recruit and retain talent, and, at the heart of that, is the question of pay. So, does he join me in deploring the suppression of public sector pay by the UK Government and the impact that has on the Welsh Government’s capacity to finance in other parts of the public services in Wales the sorts of pay settlements we would want and need? Does he agree with me that the UK Government needs to move beyond choreographed briefings by Cabinet Ministers about this issue to genuinely relenting on the question of public sector pay austerity? And does he join me in hoping that the talents, energy, and passion of Plaid Cymru can be directed to supporting the Welsh Government’s pressure on the UK Government, rather than setting up the kind of dividing lines we saw in the Chamber yesterday?

Well, Llywydd, I certainly agree that the Chancellor of the Exchequer should listen to his Cabinet colleagues and end the damaging public sector pay cap. You heard the First Minister make exactly these points yesterday. We know that public sector workers, since 2010, have seen average pay fall by 4.5 per cent in real terms, and that is damaging both to them and to their families, but also to the communities in which they live, because it suppresses effective demand in the economy, and why I said, in my first answer to Jeremy Miles, that the policy of austerity is an inherently flawed policy. You cannot cut your way out of a depression, and that’s what this Government attempted to do, and, in doing so, it simply added to the problem, rather than trying to solve it. An end to the public sector pay cap would be a very valuable way of stimulating the economy as a whole.

Well, you can look at austerity in two ways: you can look at it in the way that you look at it, as a failed policy, finance Secretary, or you can look at it—[Interruption.] Or you can look at it as living within your means. We all know what happens when the Labour Party get their hands on the finances. It just spirals out of control, and it’s the next generation that has to pick up the debt. [Interruption.] I appreciate that the parties on the left just want to spend other people’s money, they do, but going back to the question—[Interruption.]

I do need to hear the question. Andrew R.T. Davies.

But, going back to the question, the question refers to the resilience of public services in Wales. I was just wondering: has the finance Secretary had a chance to have a detailed conversation around the Cabinet table of how the Cabinet will make use of the additional capital expenditure that’s available via the comprehensive spending review? I believe in the region of £400 million has been made available for capital expenditure that will enhance the durability and resilience of public services in Wales, and will he make a statement as to how he is allocating these additional moneys over the lifespan of the comprehensive spending review?

Llywydd, well I notice that, when it was their own jobs at stake, the Conservative politicians were able to find plenty of money to pass to the Democratic Unionist Party in order to make sure that they stayed in work. There was no problem with austerity then. We have an end to austerity in one part of the United Kingdom, paid for by people in the rest of the United Kingdom. I think we can see just how far an adherence to austerity went when it was the Conservative party politicians’ own jobs on the line. The Member’s serious question was the one that he ended with, and that’s to do with the capital budget. He will be aware that I was able to lay a four-year capital budget in front of the Assembly as part of last year’s budget-making round, and I know that that was widely welcomed, both by our partners and by private businesses, because the need to plan public expenditure over that longer run is inevitably important to them. I am engaged, as I said earlier, in a series of budget meetings with Cabinet colleagues as we move into the next budget round. I am discussing with every one of them how we may be able to deploy the very modest additional capital allocations available to us over the next four years. I will look to make the very maximum use of the public capital available to this Government for a series of important public purposes, prioritising those investments that release revenue, so that we are able to cope with the ongoing cuts to our ability to sustain public services over the next three years.

As the Cabinet Secretary just said, austerity doesn’t seem to like getting its feet wet and doesn’t cross the Irish sea, but the resilience of public services in Wales does depend on the robustness of the Barnett formula. The fact that the Barnett formula has been adjusted but has not been reformed on the basis of needs is an ongoing problem for public services in Wales. So, what assessment has he made, building on some of his earlier points, of the implications for the Barnett formula of the agreement with the DUP and the long-term sustainability of public services in Wales?

Well, Llywydd, my objection to the deal with the DUP is not that the DUP won a series of investments for the people of Northern Ireland; I’m sure those investments will be very welcome. My objection to it was the way that it has run roughshod over the arrangements for funding public services across the United Kingdom. Now, where there were investments in Northern Ireland that were solely for Northern Irish purposes and were not responsibilities of this Assembly or the Parliament in Scotland or, indeed, of English Ministers discharging responsibilities for English services, that I entirely understand. But where you have a deal that puts money into mainstream public services, into education, into health, into infrastructure, there’s no ambiguity at all, and UK Ministers can try as much as they like to hide behind some small print in the way that things are managed—there’s no ambiguity at all that the principle is that, if you invest in those mainstream services in one part of the United Kingdom, you provide all parts of the United Kingdom with a commensurate investment. Because patients in Wales and children in Wales deserve the same investment in their future as people in Northern Ireland deserve the investment that they will now be getting.

Thank you, Cabinet Secretary.