The next item, therefore, is a statement by the Cabinet Secretary for finance on the draft budget for 2018-19, and I call on the Cabinet Secretary to make the statement. Mark Drakeford.

Thank you very much, Llywydd. Today, I lay the Welsh Government’s draft budget before the National Assembly. It’s a budget crafted in a period of austerity that has by now lasted longer than seven years, and under the shadow of further cuts to come. Today, for the first time, I published alongside the budget a report from the chief economist for Wales about future public finances and our economic prospects. It provides some stark messages: if the United Kingdom Government continues on its present path, then we will face a further extension in a period of austerity already unprecedented in length and depth.

Llywydd, dyma'r cefndir llwm i baratoi cyllideb Cymru heddiw. Wrth i'r anawsterau ddyfnhau, rydym yn parhau i fod yn ymrwymedig i wneud popeth a allwn i helpu ein gwasanaethau cyhoeddus i ateb yr heriau gwirioneddol y maent yn eu hwynebu heddiw, gan gymryd camau nawr i wella'r rhagolygon ar gyfer y dyfodol.

Yn unol â'r weithdrefn newydd y cytunodd y Cynulliad Cenedlaethol hwn â hi ar gyfer cyllideb eleni, mae'r wybodaeth sydd gerbron Aelodau'r Cynulliad heddiw’n nodi prif flociau adeiladu'r gyllideb: o ble mae'r arian yn dod a sut y caiff ei ddyrannu i wahanol adrannau'r llywodraeth. Yn hwyrach y mis hwn, bydd y Llywodraeth yn cyhoeddi mwy o fanylder na'r hyn a ddarparwyd yn flaenorol, gan esbonio sut y mae Gweinidogion portffolio unigol yn bwriadu defnyddio'r adnoddau sydd ar gael iddynt. Llywydd, rwyf wedi gwrando'n ofalus iawn ar y galwadau gan y gwasanaeth iechyd, awdurdodau lleol ac eraill sy'n darparu gwasanaethau hanfodol ledled Cymru ynglŷn â phwysigrwydd gallu cynllunio’n bellach na 12 mis i’r dyfodol. Er gwaethaf yr ansicrwydd gwirioneddol yr ydym yn ei wynebu, ac sydd wedi dylanwadu ar y gyllideb hon, rwyf wedi gallu amlinellu cynlluniau refeniw ar gyfer y ddwy flynedd nesaf a chynlluniau cyfalaf ar gyfer tair.

Wrth osod blociau adeiladu ein cyllideb, Llywydd, yn gyntaf rwy'n troi at fater pwysig cronfeydd wrth gefn. Fel yr wyf wedi’i drafod yn flaenorol gyda'r Pwyllgor Cyllid, rwyf wedi cymryd ymagwedd arbennig o lym at gronfeydd wrth gefn yn ystod dwy flynedd gyntaf tymor y Cynulliad hwn. Er bod dyraniadau yn ystod y flwyddyn wedi'u gwneud o gronfeydd wrth gefn at ddibenion hanfodol, fy mwriad oedd defnyddio cymaint â phosibl o gronfa wrth gefn newydd Cymru, a drafodwyd yn rhan o'r fframwaith cyllidol. Mae'r cytundeb hwnnw'n golygu y gallwn fynd ag uchafswm o £350 miliwn ymlaen i'r gronfa wrth gefn honno o fis Ebrill nesaf ymlaen, a gwneud hynny heb rwystr gan y cyfyngiadau yr ydym wedi eu hwynebu o orfod cadw at fecanwaith cyfnewid cyllidebau Trysorlys y DU. Diolch i gymorth fy holl gydweithwyr yn y Cabinet, rwyf wedi llwyddo i gynllunio'r gyllideb hon ar y sail bod cronfa wrth gefn Cymru ar ei huchafswm, neu’n agos iawn at hynny, ar ddechrau'r flwyddyn ariannol nesaf. Yna, gallaf ddefnyddio manteision y rheolaeth ddarbodus hon i helpu i ddiogelu ein gwasanaethau cyhoeddus rhag y gwaethaf o'r toriadau yn y blynyddoedd anoddach sydd o'n blaenau.

Yn benodol, Llywydd, rwy'n bwriadu cymryd dau gam. Rwyf wedi penderfynu lleihau lefel yr arian wrth gefn yn ystod y flwyddyn, y byddai'n rhaid imi ei gadw fel arall. O ganlyniad, rhyddhawyd £40 miliwn mewn refeniw ym mhob blwyddyn i’w fuddsoddi mewn gwasanaethau cyhoeddus. Ar yr un pryd, bydd lefel cronfa wrth gefn Cymru yn caniatáu imi ryddhau £75 miliwn arall yn 2019-20, mewn ffordd a reolir, i ategu ein cyllid refeniw.

Heb y penderfyniadau hyn, Llywydd, byddai gwasanaethau cyhoeddus Cymru yn wynebu gostyngiadau pellach o £115 miliwn yn 2019-20. Mae hyn bron yn union y swm y mae'r Canghellor yn bwriadu ei dorri o’n cyllidebau yn y flwyddyn honno, o ganlyniad i'r gwerth £3.5 biliwn o doriadau heb eu dyrannu sy'n dal i hongian dros ein gwasanaethau. Rwy’n ailadrodd, unwaith eto, fy ngalwad arno y prynhawn yma i beidio â bwrw ymlaen â'r toriadau annheg a gwrthgynhyrchiol hynny. Ni fydd trethdalwyr Cymru yn cyfrannu dim llai yn y flwyddyn honno nag y maent yn ei wneud nawr, ond byddant yn cael eu twyllo o ganlyniad i'r camau y mae'r Canghellor yn dal i fwriadu eu cymryd.

Llywydd, rwy'n troi nawr at wariant cyfalaf. Rwy’n ailadrodd y neges yr wyf i a Gweinidogion cyllid o'r Alban ac o Ogledd Iwerddon wedi’i rhoi i dîm y Trysorlys yn Llundain: tra bod cyfraddau llog yn parhau i fod yn hanesyddol o isel, dyma'r amser i fenthyca i fuddsoddi yn ein dyfodol ar y cyd ac i greu'r amodau lle y gellir sicrhau ffyniant.

Yn ei ddatganiad hydref y llynedd, aeth y Canghellor ryw ffordd i atgyweirio'r difrod a wnaeth ei ragflaenydd. Rwy’n ei annog i wneud mwy eleni. O ganlyniad i'r cyfalaf ychwanegol a'r ffactor anghenion newydd yn fformiwla Barnett, bydd ein cyllideb yn 2019-20 at ddibenion buddsoddi hanfodol nawr 20 y cant yn is nag yr oedd yn 2009-10, yn hytrach na 27 y cant, ond, mae gostyngiad o 20 y cant ar adeg o angen brys yn doriad mawr iawn wir.

Felly, rydym wedi parhau i adeiladu ar y sylfeini a sefydlwyd gan fy rhagflaenydd, Jane Hutt, i ddatblygu ffyrdd newydd ac arloesol y gallwn lenwi'r bwlch cyfalaf hwnnw. Yr egwyddor sy'n sail i hyn oll yw y byddwn bob amser yn defnyddio'r ffurfiau cyfalaf lleiaf costus i gyd cyn symud ymlaen at ffynonellau eraill. Yn unol â'r egwyddor hon ac yn y gyllideb hon, byddwn yn defnyddio gwerth £4.8 biliwn o gyfalaf confensiynol, gan gynnwys cyllid grantiau a thrafodion ariannol a ddarperir drwy'r grant bloc. Yna byddwn yn benthyca £375 miliwn mewn cyfalaf—£125 miliwn y flwyddyn dros y tair blynedd nesaf—y tro cyntaf inni ddefnyddio'r pwerau benthyca newydd sydd ar gael yn uniongyrchol i Lywodraeth Cymru. Hyd yn oed ar ôl gwneud hynny, byddwn yn mynd ymhellach ac yn lliniaru'r pwysau cyllidebol ar gyrff cyhoeddus eraill a chymdeithasau tai i'w galluogi i wneud gwerth £400 miliwn o fenthyca ar gyfer buddsoddiad cyfalaf hanfodol.

A, Llywydd, pan fyddwn wedi cyflawni hynny i gyd, awn ymhellach eto. Byddwn yn sicrhau buddsoddiad gwerth dros £1 biliwn drwy'r cynlluniau model buddsoddi ar y cyd, sydd mor bwysig yn ein gwasanaeth iechyd, yn ein gwasanaeth addysg ac mewn trafnidiaeth. Y tu hwnt i hynny hefyd, byddwn yn ceisio tynnu i lawr cymaint o'r £208 miliwn o gronfeydd strwythurol yr UE sydd ar gael inni ar gyfer prosiectau cyfalaf, a byddwn yn bwrw ymlaen i geisio cymeradwyaeth i brosiectau allweddol pellach yn ystod y cyfnod nesaf, gan gynnwys metro de Cymru.

Yr hyn sy’n ganolog i hyn oll yw sut y mae’r penderfyniadau cyllido cyfalaf yr ydym yn eu gwneud yn cael effaith gronnol ar refeniw. Mae penderfyniadau hanesyddol, gan gynnwys PFI, a wnaethpwyd gan fwyaf cyn datganoli ei hun, yn golygu bod angen ychydig dros £100 miliwn mewn refeniw ar gyfartaledd ym mhob blwyddyn o'r gyllideb. Mae'r penderfyniadau a wnaethpwyd yn fwy diweddar i alluogi buddsoddiad arloesol mewn seilwaith cyhoeddus yn ychwanegu £30 miliwn arall at y swm hwnnw.

Mae hynny i gyd, Llywydd, yn dod â mi at ein hadnoddau refeniw. Ers datganoli pwerau treth, mae'r trefniadau ariannu ar gyfer Llywodraeth Cymru wedi newid. Bellach mae gennym y pŵer i godi refeniw yn uniongyrchol i ariannu gwasanaethau cyhoeddus drwy drethi datganoledig. Serch hynny, bydd mwyafrif helaeth y cyllid ar gyfer Cymru yn parhau i fod drwy'r grant bloc o'r DU, sy’n dal i gyfrif am bron i 80 y cant o'r refeniw sydd ar gael yn 2019-20.

Mae'r gyllideb ddrafft hon yn gweithredu am y tro cyntaf o dan y fframwaith cyllidol y cytunodd Llywodraethu Cymru a'r DU arno fis Rhagfyr diwethaf. Mae'r trefniadau hyn yn golygu y bydd Cymru'n cael £47 miliwn ychwanegol dros gyfnod y gyllideb hon, ac mae’r holl arian hwnnw wedi cael ei ddefnyddio i gefnogi ein gwasanaethau cyhoeddus.

Llywydd, mae hon yn foment hanesyddol inni yng Nghymru. Hwn fydd y tro cyntaf i ni, fel Aelodau'r Cynulliad Cenedlaethol, fod â’r pwerau i osod cyfraddau ein trethi ein hunain. Gyda'r pwerau newydd hynny, wrth gwrs, daw mwy o gyfrifoldebau, ac wrth inni ddechrau’r cyfnod newydd hwn o ddatganoli, byddwn yn darparu sefydlogrwydd a sicrwydd i drethdalwyr a dinasyddion Cymru. Nid yw hynny'n golygu bod rhaid inni gadw'r trethi fel y maent heddiw; mae gennym gyfle nawr i ddefnyddio'r offer newydd hyn i wneud newidiadau i helpu i symud Cymru ymlaen.

Llywydd, yn y gyllideb hon, rwy’n gwneud penderfyniadau ynglŷn â'r ddwy dreth gyntaf i'w datganoli i Gymru. Rwy’n mynd i ddechrau â’r dreth gwarediadau tirlenwi. Gallaf gyhoeddi heddiw y bydd y cyfraddau safonol ac is yn parhau i fod yn gyson â threth y DU am y ddwy flynedd nesaf, gan ddarparu'r sefydlogrwydd y mae busnesau wedi dweud wrthym mor glir bod ei angen arnynt. Rwy'n bwriadu gwneud y gyfradd ar gyfer gwarediadau anawdurdodedig yn 150 y cant o'r gyfradd safonol. Cymru yw'r wlad gyntaf yn y Deyrnas Unedig i osod cyfradd uwch ar gyfer gwarediadau tirlenwi anawdurdodedig, gan greu rhwystr ariannol ychwanegol i bobl sy'n gwaredu gwastraff yn anghyfreithlon, a bydd y penderfyniad hwn yn ategu'r rheoliadau a osodwyd heddiw gan fy nghyd-Aelod, Ysgrifennydd y Cabinet dros yr Amgylchedd a Materion Gwledig, a fydd yn galluogi rhoi rhybuddion cosb benodedig am droseddau tipio anghyfreithlon ar raddfa fechan. Rwyf hefyd yn cadarnhau fy ymrwymiad y prynhawn yma i ddyrannu £1.5 miliwn y flwyddyn i gynllun cymunedol y dreth gwarediadau tirlenwi yng Nghymru am bob un o'r pedair blynedd nesaf. Mae hyn yn sicrhau ein bod yn cadw ein hymrwymiad i gymunedau y mae gwarediadau tirlenwi’n effeithio arnynt, ac yn darparu ffrwd ariannu sefydlog i'r cymunedau hynny am y pedair blynedd nesaf, er ein bod yn disgwyl i'r refeniw a ddaw o'r dreth hon leihau’n raddol dros y cyfnod hwnnw.

Llywydd, rwy’n troi nawr at dreth trafodiadau tir. Rwyf wedi penderfynu cyflwyno trothwy cychwyn newydd, uwch i brynwyr tai yma yng Nghymru. O 1 Ebrill 2018 ymlaen, bydd trothwy cychwyn treth trafodiadau tir yng Nghymru yn symud o £125,000 i £150,000—y gyfradd gychwynnol uchaf yn unrhyw le yn y Deyrnas Unedig. Bydd hyn yn golygu na fydd y prynwr am y tro cyntaf cyfartalog yng Nghymru yn talu dim treth o gwbl wrth brynu cartref. Yn wir, bydd y prynwr tŷ cyfartalog yng Nghymru yn talu bron i £500 yn llai o dreth nag y byddent o dan drefn bresennol treth dir y dreth stamp. Yn wir, nawr bydd naw o bob 10 prynwr tŷ yn talu llai neu'r un faint o dreth yng Nghymru o dan y dreth trafodiadau tir. Bydd y penderfyniad yr wyf yn ei gyhoeddi heddiw yn golygu y bydd y rhai sy'n prynu'r eiddo drutaf yng Nghymru yn talu mwy, ond mae hynny'n rhan annatod o unrhyw ymagwedd flaengar tuag at drethiant.

I droi yn awr at fusnesau, Llywydd, bydd penderfyniadau a wnaf heddiw’n golygu mai yng Nghymru fydd y gyfradd gychwynnol isaf o dreth trafodiadau tir i fusnesau yn unrhyw le yn y Deyrnas Unedig. Mae hyn yn golygu y bydd busnesau naill ai'n talu dim treth neu lai o dreth nag o dan dreth tir y dreth stamp wrth brynu unrhyw eiddo hyd at £1.1 miliwn. Bydd hyn o fudd i fusnesau bach a chanolig ledled ein gwlad—llif bywyd economi Cymru. Fel gydag eiddo preswyl, rwyf wedi ailgydbwyso trethiant ar adeiladau busnes i wella blaengaredd.

Llywydd, yn ogystal â gosod cyfraddau’r trethi newydd, rydym wedi cynhyrchu rhagolygon refeniw am y tro cyntaf. Hoffwn ddiolch i Brifysgol Bangor am wneud gwaith craffu a sicrwydd annibynnol ar y rhagolygon hynny. Rhagwelir y bydd treth gwarediadau tirlenwi’n cyfrannu £28 miliwn at gyllideb Cymru yn 2018-19, gan ostwng i £26 miliwn yn 2019-20. Rhagwelir y bydd treth trafodiadau tir yn codi £266 miliwn yn y flwyddyn ariannol nesaf, gan godi i £291 miliwn yn 2019-20.

Ym mis Gorffennaf, Llywydd, gwnaethom ddechrau dadl genedlaethol yn gofyn i bobl gyflwyno syniadau am drethi newydd posibl yng Nghymru. Cafwyd nifer sylweddol o ymatebion, a hoffwn ddiolch i bawb sydd wedi cymryd rhan a helpu i lunio trethi Cymru yn y dyfodol. Heddiw, gallaf gyhoeddi'r pedwar syniad treth newydd y byddwn yn gwneud gwaith pellach arnynt cyn inni gynnig un syniad i Lywodraeth y DU yn gynnar y flwyddyn nesaf.

Mae'r galw cynyddol am ofal cymdeithasol yn rhoi pwysau sylweddol ar gyllideb Cymru. Felly, rwyf am archwilio ysgogiadau ariannol posibl, gan gynnwys trethi, i gefnogi darpariaeth gofal cymdeithasol yng Nghymru, gan adeiladu ar waith yr Athro Gerry Holtham. Byddwn yn archwilio effeithlonrwydd treth bosibl i roi terfyn ar fancio tir a threth gwaredu plastig yng Nghymru, a byddwn yn gweithio gyda llywodraeth leol i archwilio sut y gellid defnyddio treth ar lety twristiaeth i gefnogi'r diwydiant lleol ac annog swyddi a thwf yng Nghymru.

Llywydd, byddaf nawr yn nodi sut y byddwn yn defnyddio ein hadnoddau cyfalaf, refeniw a chronfeydd wrth gefn ar draws y Llywodraeth. Mae'r cyhoeddiad hwn yn ystyried ein cytundeb cyllideb dwy flynedd gyda Phlaid Cymru, lle mae nifer o'r mesurau y cytunwyd arnynt yng nghytundeb y llynedd yn cael eu gwneud yn rheolaidd, ac sy'n cynnwys buddsoddiadau pwysig eraill mewn meysydd y cytunwyd arnynt ar draws y gyllideb. Hoffwn gymryd y cyfle hwn i gofnodi fy niolch i Adam Price a'i dîm am yr holl amser y treulion nhw gyda ni i gytuno ar hyn dros gyfnod yr haf.

O ganlyniad i hynny oll, bydd cyfanswm y prif grŵp gwariant iechyd, lles a chwaraeon nawr yn £7.5 biliwn yn 2018, gan godi i £7.8 biliwn yn 2019-20. Bydd y prif grŵp gwariant hwnnw’n cynnwys £450 miliwn ychwanegol dros ddwy flynedd i'r GIG yng Nghymru. Bydd yn cynnwys £16 miliwn ychwanegol y flwyddyn i gefnogi'r gronfa driniaeth newydd, a gallaf ddarparu £90 miliwn ychwanegol ar gyfer rhaglen gyfalaf GIG Cymru dros y tair blynedd nesaf.

Bydd cyfanswm y prif grŵp gwariant llywodraeth leol, gan gynnwys trethi annomestig, nawr yn £4.5 biliwn yn 2018-19, a bydd yn parhau i fod yn £4.5 biliwn yn 2019-20. Bydd hynny'n cynnwys diogelu cyllideb rheng flaen ysgolion a gofal cymdeithasol, a bydd yn darparu £12 miliwn ychwanegol dros y ddwy flynedd nesaf ar gyfer gwasanaethau digartrefedd drwy'r grant cynnal refeniw. Mae hyn i gyd yn golygu y bydd llywodraeth leol yng Nghymru unwaith eto yn mwynhau setliad llawer mwy ffafriol na'u cymheiriaid dros y ffin yn Lloegr.

Llywydd, mae cyfanswm y prif grŵp gwariant cymunedau a phlant nawr yn £874 miliwn yn 2018-19, ac yn £777 miliwn yn 2019-20, i gynnwys buddsoddiad ychwanegol gwerth £70 miliwn dros ddwy flynedd i ehangu ein cynnig gofal plant blaenllaw, i sicrhau na fydd dim toriadau i'r grant Cefnogi Pobl, ac i ryddhau £340 miliwn ychwanegol mewn cyfalaf dros y tair blynedd i adeiladu 20,000 o gartrefi fforddiadwy. Bydd yn buddsoddi £14.9 miliwn ychwanegol mewn cyfalaf dros y cyfnod hwnnw i gefnogi adfywio ein cyfleusterau cymunedol, a gallaf ddyrannu £1 miliwn ychwanegol yn y ddwy flynedd ar gyfer y gronfa cymorth dewisol, yn uniongyrchol i helpu rhai o deuluoedd tlotaf ein gwlad.

Bydd cyfanswm y prif grŵp gwariant economi a seilwaith nawr yn £1.2 biliwn yn 2018-19 ac yn codi i £1.3 biliwn yn y flwyddyn ganlynol. Bydd hynny'n darparu £220 miliwn dros ddwy flynedd i gefnogi ein penderfyniad i greu 100,000 o brentisiaethau pob oed dros gyfnod y Cynulliad hwn. Bydd yn cynnwys £50 miliwn dros dair blynedd i ddatblygu gorsaf reilffordd a chyfleuster parcio a theithio newydd yn Llanwern, ac rwy'n bwriadu clustnodi arian yn y cronfeydd wrth gefn i brynu cerbydau newydd ar gyfer masnachfraint newydd Cymru a’r gororau, yn amodol ar ganlyniad y broses gaffael barhaus.

Ym maes addysg, bydd cyfanswm y prif grŵp gwariant nawr yn £1.6 biliwn yn 2018-19 ac yn y flwyddyn ganlynol. Bydd hynny'n ein galluogi i fuddsoddi £50.5 miliwn i godi safonau ysgolion dros y ddwy flynedd, i gynnal ein lefel buddsoddiad yn y grant amddifadedd disgyblion ac i fuddsoddi swm newydd o £40 miliwn dros ddwy flynedd i gyflymu rhaglen ysgolion yr unfed ganrif ar hugain, gan ddod â band A y rhaglen honno i ben hyd yn oed yn gyflymach nag y byddem fel arall wedi gallu ei gyflawni.

Bellach mae cyfanswm prif grŵp gwariant yr amgylchedd a materion gwledig yn £344 miliwn yn 2018-19 a £322 miliwn yn 2019-20, gan gynnwys darparu gwerth £150 miliwn o fuddsoddiad drwy ein rhaglen arloesol ar gyfer rheoli perygl llifogydd ac arfordiroedd a £7.5 miliwn o gyfalaf ychwanegol yn 2018-19 ar gyfer mesurau atal llifogydd wedi'u targedu. Rwy'n bwriadu darparu swm pellach o £5.4 miliwn dros y tair blynedd i gefnogi'r rhaglen datblygu gwledig i sicrhau y gallwn wneud y mwyaf o gyfleoedd arian cyfatebol i gefnogi ein cymunedau gwledig wrth inni baratoi i adael yr Undeb Ewropeaidd.

Bellach mae cyfanswm y prif grŵp gwariant gwasanaethau canolog a gweinyddu yn £297 miliwn yn 2018-19 a bydd yn gostwng i £286 miliwn yn 2019-20.

I gloi, Llywydd, hoffwn gofnodi fy ymrwymiad i wasanaethau cyhoeddus yng Nghymru drwy ddweud, os bydd Llywodraeth y Deyrnas Unedig yn penderfynu peidio â bwrw ymlaen â'r gwerth £3.5 biliwn o doriadau heb eu dyrannu, y byddaf yn anelu at ddefnyddio cymaint â phosibl o'r adnoddau a fyddai ar gael wedyn i'r Cynulliad Cenedlaethol hwn rhwng y gyllideb ddrafft a phan fydd rhaid imi osod y gyllideb derfynol ddiwedd mis Rhagfyr eleni. O ganlyniad, mae'r gyllideb sydd gerbron y Cynulliad Cenedlaethol heddiw’n nodi cyfres feiddgar a chytbwys o gynigion sy'n cyflawni blaenoriaethau'r Llywodraeth Cymru hon a blaenoriaethau'r bobl yma yng Nghymru. Byddwn yn defnyddio ein pwerau i fuddsoddi yn ein gwasanaeth iechyd, i ddarparu 20,000 o dai fforddiadwy newydd, i greu'r cynnig gofal plant mwyaf hael yn unrhyw le yn y Deyrnas Unedig ac i gychwyn ar ein cyfrifoldebau treth newydd mewn ffordd sy'n rhoi'r help mwyaf i'r bobl sydd ei angen fwyaf. Rwy’n cymeradwyo’r gyllideb i'r Cynulliad Cenedlaethol.

Cabinet Secretary, thank you for your statement on the draft budget and for the meeting you had with me earlier today. Can I also welcome the new way of doing the budget, with the changes that have been made to the format of this statement today and paving the way for tax devolution next year? This has been a key call from the Finance Committee, and from the Chair of the Finance Committee, for some time, with the advent next year of tax powers.

This budget is, as you’ve said, being formed against the backdrop of a new fiscal framework, which is ensuring additional revenue for the Welsh Government—revenue above what you would have received without the fiscal framework. I appreciate your comments about how, because of cutbacks, we are still, I think you said, 20 per cent down on funding. That is far better than the 27 per cent that we would have been facing without the advent of the fiscal framework, so that’s to be welcomed.

Can I firstly turn, though, to your announcement on the rates and bands of the new taxes, because that’s new information, information that I and the rest of the Chamber’s been calling for for a long time? The publication of that is good news and it is to be welcomed for those organisations that need to have stability and certainty when it comes to planning the tax landscape.

If I can turn to land transaction tax first, and the new starting threshold of £150,000, £25,000 higher than in England I believe you said, and £5,000, I believe, higher than in Scotland, that is to be welcomed. Welsh Conservatives have for a long time now been calling for additional help certainly for those first-time buyers in Wales and those at that end of the housing ladder, so that is to be welcomed. There was of course a nip in the tail, so to speak—a sting in the tail—in that that money does need to be recouped and you did announce that there would be a new higher rate. So, can I ask you what assessment has been made of the impact that that will have on the Welsh economy, particularly when it comes to the border areas of Wales? I think you said that Bangor University has been employed doing forecasting for the Welsh Government. Will you be publishing the details of that forecasting at any point, and will we be able to see the exact effect that that independent analysis believes those changes to bands will have on the economy? Clearly, this is just the start of tax devolution, so, over the months and years to come, this will become even more important.

You mentioned the land disposal tax as well and I think, in terms of the environmental benefits of adjusting that tax, you will have the support of most parties, if not all parties in this Chamber, and we want LDT to succeed as much as possible and indeed be better, if possible, than in other areas of the UK.

Now, you mentioned the tourist tax, and it would be remiss of me not to mention this. I hope that that’s just a working title and that that’s not going to go forward in the future. Now, clearly, it is not in the interests of anyone in this Assembly or anyone in Wales for us to discourage tourism. We know how dependent the Welsh economy is on tourism. It is one of the key pillars of the Welsh economy and it is therefore vitally important that not only does any tourist tax, if and when it is developed—[Interruption.] That not only does any tourist tax not have a negative impact in terms of the way that it is set out, but also that the perception is not given out by the Welsh Government, not created by the Welsh Government, that Wales is not open for business when it comes to our tourist economy. So, I think that you have given us an indication of the way you see taxation in Wales going, Cabinet Secretary. I think it’s very important that that is qualified as soon as possible and that people who want to come to Wales to visit, for whatever length of time that may be, are not discouraged from doing so, so we do need to see some clarity as soon as possible on that.

You said in opening your statement that this is very much giving the higher level, the bigger picture, of taxation. You expect detail to follow in the weeks and months to come, and the Finance Committee will no doubt be scrutinising the draft budget over that length of time. So, if I can turn to the way that this budget will deliver on the Welsh Government strategy, the ‘Prosperity for All’ strategy, the First Minister has said that this

‘would drive integration and collaboration across the Welsh public sector, and put people at the heart of improved service delivery.’

This is a noble aim to which I’m sure we would all aspire. With this in mind, can you tell us how this is reflected within the funding streams for this budget and what protections has the Cabinet Secretary—what protections have you made—to ensure certain important projects are ring-fenced within the streams?

Now, clearly, we have another deal before us between Labour and your partners in this budget, Plaid Cymru, something that we’ve got used to over recent years, something that Wales has had to get used to, whether it liked it or not, and part of a two-year budget deal that will tie the hands of the Welsh Government for that time. But will the Cabinet Secretary respond to Plaid Cymru’s claim that over 50 per cent of its spending commitments, or £500 million, have been secured in full or in part over the last two budgets? This doesn't really tally with comments you made over the weekend, so I would appreciate some clarification on this please, Cabinet Secretary. It’s vitally important that the people of Wales believe that this budget deal has been done in the best interests of Wales—in their best interests—and not something that has been rushed through for the sake of a quick political fix, which I’m sure you would want to avoid the accusation of.

Also, if Plaid’s comments are correct, how many spending commitments has the Welsh Government had to give up in order to accommodate Plaid support for this budget? And can you give us details of the commitments that have been shelved? Because, surely, as you would admit, Cabinet Secretary, something has to give. You’ve said that budgets are tight, so you can’t fund everything, so we’ve got a new agreement with Plaid Cymru. Which priorities of the Labour Party in Wales have had to be sidelined or shelved? If I can turn to the—

Will the Member give way?

Yes, I give way.

I just wondered if the Member would like a penny, because it’s more than he’s ever got out of any budget deal with any Government in Wales.

It’s always nice to hear the—[Interruption.] I’m not sure—[Interruption.] I’m not sure—[Interruption.] I’m not sure whether that’s a Plaid comment—

Okay. The intervention has—

[Continues.]—or a comment from the Chair of the Finance Committee.

The intervention has been made. Allow the spokesperson for the opposition to continue, please.

Thank you. If I could turn to some of the specifics and our national health service, the NHS is a key priority for the people of Wales and Welsh Conservatives believe that it should be our key priority too. We are, of course, still playing catch up because of the lack of real-terms budget protection over a number of years, but we are where we are. The ‘Prosperity for All’ document states that the Welsh Government will ensure that organisations delivering health and care services will pool their budgets. So, has the current budget accounted for delivery of this aim? I’d be grateful if you could tell us if the organisations that have been involved have been fully informed of how they are intended to implement this.

Whilst I welcome the ongoing commitment that the Welsh Government has announced to a new treatment fund, we still don’t believe that makes up for the lack of a cancer treatment fund, which we have long called for in Wales. At the same time, we know that, across the border, the UK Government has recently announced 2,000 additional nurses, consultants, and therapists for child and adolescent services, and is introducing waiting-time standards for mental health services. Can the people of Wales expect the same level of investment, and how much of the £40 million promised in the budget will allow for such changes in Wales as well, and, crucially, will this be suitably ring fenced?

It’s well known that health boards across Wales are carrying some eye-watering levels of debt. There doesn’t seem to be any real light at the end of the tunnel when it comes to effectively managing this debt. How confident are you, Cabinet Secretary, that the health board deficits, such as the £49 million at Hywel Dda Local Health Board—I could go on—will receive the money that they need through the health budget and that we won’t see spiralling debt in future?

Just turning to transport and infrastructure, the Cabinet Secretary has outlined the tightness of budget and you’ve said about how you intend to use capital funding borrowing powers. There clearly is a shortness of cash there, but we hope that you’ll be able to meet those aims. And, if I could turn to the M4, it is interesting that it’s not that long ago that I remember Plaid Cymru saying that the Welsh Government’s commitment to the black route as its favourite option would be a deal breaker in terms of any future support for a budget. That’s probably more of a question for Plaid than it is for you, Cabinet Secretary, but, that said—and I’m sure you will say that this is currently a matter for the public inquiry—there clearly isn’t deep support for a new motorway, a key plank of the Government’s transport policy, underlying this deal, so is this really a sound basis on which to proceed, and has this deal been stress tested?

To close, Llywydd, and, on a positive note, I welcome the ongoing commitment to a development bank. Welsh Conservatives have long supported the restructuring of Finance Wales, and I hope that this delivers the dividends that we all want it to do. In conclusion, I look forward to working with the other members of the Finance Committee and with yourself to fully scrutinise this draft budget over the weeks and months ahead. And I hope that, at the end of it, Wales will have a draft budget and a finalised budget that will truly deliver for the needs of the people of Wales.

It’s true to say, of course, that Wales has always been a nation where the need outstrips the resource that we have to meet that need. And that’s certainly true now for the reasons outlined by the Cabinet Secretary: austerity as a result of the policy emerging from Westminster.

But it has been true for a longer period than that. Historians call Wales a ‘late nation’ in the sense that we haven’t been able to build the infrastructure necessary to be a prosperous nation. Establishing a budget is one of the most important responsibilities we have in this place because, of course, we must prioritise this work of rebuilding the nation and tackling the need to put right the problems of the negligence that’s existed over generations.

That is the spotlight that we in Plaid Cymru place on this as we hold the Government to account where necessary, but also work together where there is common ground. I came into politics to make a difference, and that is what Plaid Cymru has done through the agreement that we have reached once again with the Labour Government. If truth to be told, I would prefer to be in the Cabinet Secretary’s seat, and I very much hope that Plaid Cymru will lead Government at some point, because there are issues that we disagree on vehemently.

There are areas where I didn’t manage to persuade the Cabinet Secretary. At the moment, of course, there’s this whole question of the pay cap in the public sector, the question of tuition fees and increasing the debt burden on students. There, we disagree with Government and, for that reason, of course, we’re not going to be supporting this budget, and we will continue to disagree on those areas and others. But where there is common ground, then we are willing to co-operate with people from other parties for the benefit of Wales, and that is what the people of Wales expect from us, if truth be told: mature politics, politics that looks to the long term. Wales cannot wait three and a half years for an election in order to get a new Government in place to build the foundations that are needed for the longer term. So, I make no apology at all for playing our part in building that better Wales that we all want to see.

Mae nifer o feysydd lle na all Cymru aros am newid Llywodraeth, ac, felly, mewn Senedd lle nad oes gan y Llywodraeth fwyafrif, mae'n ddyletswydd ar bob un ohonom, fel seneddwyr, i wneud ein rhan i roi ar waith mewn gwirionedd y math o bolisïau yr hoffem eu gweld, y cawsom ein hethol arnynt, a dyna'r hyn yr ydym yn ceisio'i wneud yn y cytundeb sydd gennym ac sydd wedi'i nodi. Rydym wedi gwneud y pwynt yn glir ar sawl achlysur yn ystod y blynyddoedd diwethaf bod rhaid inni sicrhau na ddaw Cymru, mewn microcosm, yn fersiwn o broblem y DU o or-ganoli, gor-grynodi, cyfoeth mewn un gornel o Gymru. Hoffem weld llwyddiant yn y gornel honno o Gymru, ond hoffem ei weld wedi’i ledaenu'n gyfartal, ac mae hynny hefyd yn golygu bod angen buddsoddiad cyhoeddus yn yr ardaloedd hynny hefyd. Ac eto, yn y cytundeb cyllideb hwn, fe wnaethom geisio pwysleisio cael y buddsoddiad hwnnw ym mhob rhan o Gymru.

Felly, mae gennym y £4 miliwn i gychwyn datblygiad trydedd pont Menai, mae gennym ddatblygiad y ganolfan gofal iechyd integredig yn Aberteifi, £15 miliwn i wella'r cysylltiadau rhwng y gogledd a'r de, ac uwchraddio gwasanaeth TrawsCymru yn ogystal, wrth gwrs, y gwaith sy’n parhau ar astudiaeth ddichonoldeb rheilffordd Aberystwyth-Caerfyrddin, fel y nodwyd yn gynharach, a'r amgueddfa bêl-droed genedlaethol yn y gogledd-ddwyrain hefyd. Ac, yn wir, os ydym yn tynnu tollau ar bont Hafren yn y gornel honno o Gymru, mae'n iawn hefyd ein bod yn dilyn yr egwyddor ac yn cael gwared ar y tollau ar bont Cleddau yn y de-orllewin hefyd.

Mae'n dda gweld ymrwymiad i sicrhau bod metro de Cymru yn cyrraedd pob rhan o'r Cymoedd yn ei ardal, ac felly'n edrych ar ymestyn a chysylltu â'r Rhondda Fach, a chreu metro newydd hefyd ar gyfer bae Abertawe a Chymoedd y de. Felly, mae sicrhau bod hon yn gyllideb i Gymru gyfan yn egwyddor graidd inni, a dyna'r hyn yr ydym yn ceisio'i wneud gyda'r cytundeb, ond mae hefyd yn fater o fuddsoddi yn ein dyfodol, felly mae'n dda gweld £40 miliwn ychwanegol yno ar gyfer addysg uwch ac addysg bellach. Yn sicr, pobl ifanc yw ein hadnodd pwysicaf—mae hynny’n wir am unrhyw wlad ac yn sicr yn wir amdanom ni. Hefyd, mae £6 miliwn ar gael i ffermwyr ifanc i sicrhau bod gennym ddyfodol i'r sector hwnnw sy’n seiliedig ar newydd-ddyfodiaid i'r diwydiant. Yn y gogledd, mae £14 miliwn ar gyfer hyfforddiant meddygol a chronfa ddatblygu ar gyfer hyfforddiant meddygol i israddedigion, sy’n adeiladu ar y £7 miliwn ar gyfer y llynedd.

Mae ein cytundeb hefyd yn ymwneud â syniadau newydd—syniadau newydd sy'n ceisio llunio atebion i rai o'r problemau hirdymor yr ydym yn eu trafod yn y Siambr hon, gan edrych ar arloesiadau newydd o fewn iechyd a gofal cymdeithasol. Mae'r cynllun treialu Buurtzorg a fydd yn arwain at hyfforddi 80 o nyrsys ardal newydd, yr economi sefydliadol, sydd wedi cael cefnogaeth drawsbleidiol eang—mae yma yn y cytundeb â Phlaid Cymru fel y gallwn ddechrau'r gwaith, nid dim ond siarad amdano, ond dechrau’r gwaith o roi hynny ar waith mewn ffyrdd pendant, gan ddechrau gyda gofal a chaffael fel elfennau i ganolbwyntio arnynt yn y sector.

Felly, mae nifer o feysydd yma y teimlwn hefyd nad ydynt wedi cael digon o fuddsoddiad yn y gorffennol, ac rydym yn ceisio unioni’r cydbwysedd. Iechyd meddwl—rwy'n meddwl bod yna gonsensws eang bod hwnnw'n sector nad yw wedi cael y gefnogaeth y mae'n ei haeddu, ac felly, eto, wrth wraidd y cytundeb, £40 miliwn ychwanegol ar ben yr £20 miliwn o’r llynedd, ond nawr, yn hollbwysig, yn gyllideb sylfaenol, fel y bydd yno, yn barhaus i’r dyfodol, fel y dylai fod os ydym am fodloni gofynion y sector pwysig hwnnw yn ein gwasanaeth iechyd cyhoeddus. Mae amaethyddiaeth a thwristiaeth yn cael arian ychwanegol. Yn aml maent wedi bod yn sectorau sinderela yn ystod y blynyddoedd diwethaf. Mae angen inni eu gweld wir—. Maent wrth wraidd yr economi wledig, ac mae'n dda gweld arian ychwanegol yma o ganlyniad i flaenoriaethau Plaid Cymru yn y gyllideb hon.

Mae £15 miliwn o arian ychwanegol cyffredinol ar gyfer y Gymraeg, ac os ydych yn cyfrif yr holl feysydd ychwanegol sy'n gysylltiedig â'r Gymraeg, mae’n fuddsoddiad ychwanegol o £20 miliwn. Arian ychwanegol—dyna sut yr ydym am gyflawni'r targed uchelgeisiol y mae'r Llywodraeth wedi'i nodi o ran y filiwn o siaradwyr Cymraeg erbyn 2050.

Will you take an intervention?

I certainly will.

Thank you. I’d be grateful to understand from the Plaid finance spokesperson—. I appreciate the finance Secretary, when he outlined the budget, said he was looking to explore specific tax measures within the tourist sector to raise money. He wasn’t looking to alleviate taxes in the tourism sector; he was looking to raise money. Given that you’ve had in-depth discussions with the Government, what is your understanding of the Government’s ambition in this particular sector, on the tourism industry in Wales?

Well, the additional money that was referred to was for marketing. I would like the Conservative Party to point out the areas that all these positive ideas that Plaid Cymru have brought to the table—which one of them do you disagree with? Do you think that there should be less money for the tourism sector?

We wouldn’t have a tourism tax.

In terms of the tourism levy, I think this is an idea that deserves to be explored. It is used widely—[Interruption.] It is used widely throughout most economies. Many of them have bigger tourism sectors than us and they use it to invest intelligently in the skills and infrastructure necessary to have a successful tourism economy. It’s called investing in the future of your country, and you should try it sometime, rather than just carping on the sidelines. Why don’t you see a positive vision for the future of Wales and bring your ideas here to this Chamber? That’s what you’re elected for. As a result of this deal and last year’s deal, and the compact that we originally signed, Plaid Cymru ideas from our manifesto will have been delivered in part or in full to the tune of £565 million. Actually, most of our major financial commitments from our manifesto from 2016 will have been delivered in part or in full. That is democratic politics in action, I would respectfully suggest to the leader of the Conservative Party. He should try it sometime. We are paid not to issue soundbites and press releases; we are paid to try and do our bit to make the lives of the people of Wales better. That is why we’re here in this Chamber, and I am not going to apologise to him or to anyone else for doing our job.

Perhaps I’ll try and calm things down a little in my usual way. I would like to thank the Cabinet Secretary for the courtesy that he has shown to me, also, in telling me the broad outlines of the statement this afternoon when we spoke this morning. I agree with my new neighbour, Adam Price—[Interruption.] I don’t know whether I should now call him my honourable friend or whether—[Interruption.] Near neighbour. There is a kind of cordon sanitaire between us, in the form of Simon Thomas. [Laughter.] But I’m delighted to join my fellow nationalists, anyway, on this side of the Chamber—[Interruption.]

Stick to the subject.

I agree with the point that Adam Price made with such passion a moment ago, that it is right for parties in this house to work together for the benefit of Wales. So I was a bit surprised, actually, when the Cabinet Secretary did ring me this morning, because on the radio on Sunday morning, he said he has little limited contact with the Conservatives and can’t ever imagine having conversations with UKIP. Anyway, I’m very pleased to see that he’s recanted within a couple of days from that rather extreme opinion.

This debate, to an extent, is one of shadow-boxing, because although I appreciate that the deal that Plaid Cymru have done with Labour has enabled them to make a real contribution to this budget in detail—£500-odd million is not an insignificant sum—but the Welsh Government’s budget, of course, is £15 billion to £16 billion and they are constrained, in any event, in what they can do with it by the obvious things that have to be funded by any Government. The element of discretion in the Welsh budget is inevitably very limited, although that will certainly become greater when we do actually get tax devolution in two years’ time. Then, there will be more options that the elected politicians of Wales will be able to choose from amongst in (a) the levels of taxation and (b) what we do with it. But the background to this budget is, of course, set out in what the Cabinet Secretary says about the policy of the UK Government. He says:

‘If the UK Government continues on its present path, we face a further extension in a period of austerity already unprecedented in length and depth.’

He also says, in the same paragraph in this statement, that a report from the chief economist for Wales about future public finances and our economic prospects shows some stark messages. The one message that I get from the pack that came with the document with all the details about the budget in it today, and the chief economist’s report—it has at the end of it, on page 27, this from the Office for Budget Responsibility:

‘new unfunded “giveaways” would take the Government further away from its medium-term fiscal objective and would only add to the longer-term challenges. In many recent fiscal events, giveaways today have been financed by the promise of takeaways tomorrow. The risk there, of course, is that tomorrow never comes.’

From the way in which the Welsh Government speaks about the economy, anybody would think that spending bills never come home to roost. We’ve been down that dolorous path many, many times in the course of my lifetime. Eventually, the chickens do come home to roost and you have to be able to pay back the money that you borrow. Very often, of course, the payback time comes when it’s extremely inconvenient, and indeed sometimes impossible, to do so. Once a Government loses its credit rating and its ability to borrow at reasonable rates, then those who suffer most in those circumstances—all historical precedent shows this—are those, actually, who are the most vulnerable in society. I give way to Mike Hedges.

Hasn’t the Conservative Government in Westminster already lost its AAA rating?

Yes, it has. I’m glad to have that reinforcement of the point that I am making. It’s as a result of profligacy in recent years that the Government has lost its AAA rating. I gave the figures in my questions earlier on to the First Minister. We now have a national debt of £2 trillion a year. It’s costing us nearly £60 billion a year to finance it. The money that we are spending on debt interest is money that would otherwise have been available to spend upon real, front-line public services. So, the idea that you can borrow forever and never have to worry about how to finance it is fantasy economics, as the people of Venezuela, Zimbabwe and many other countries know to their cost. And therefore, it’s perhaps fortunate that the Welsh Government doesn’t really have any extensive borrowing powers, and that they don’t have full responsibility for the budgets over which they preside, because if they were able to do that, then they might replicate some of the worst examples in the British Government since the war. So, all talk of austerity actually is very misplaced. We’ve had the opposite of austerity for the last seven years, it’s just that we are paying the price, for years and years before that, of massive overspending on the basis that tomorrow never comes. So, that is the reality of life. We have to pay eventually for overspending. We cannot go on overspending forever. I give way.

Thank you, Neil, for giving way. I just wanted to make the observation that Moody’s, in their downgrading, about a fortnight ago, of the credit rating of the UK—they’ve also positively ascribed that to the very specific issue of uncertainty over Brexit. I wonder whether he has any comments to make on that—the downgrading from Moody’s they have directly ascribed to uncertainty over Brexit.

I don’t think I shall get tempted, Llywydd, to go down the byways of Brexit in the budget debate.

I want to deal also with the point that comes out of the statement and the outline proposals in the budget about what the Cabinet Secretary says about the deal between the UK Government and Northern Ireland. It’s inevitable, in these circumstances, that a price is going to be extracted for their political support. Exactly the same thing has happened in this Chamber between Labour and Plaid Cymru. For Northern Ireland, there is an extra £1 billion a year, and good luck to them. I wish we could do that as well. If only Plaid Cymru had played the positive role at Westminster that the Democratic Unionists had played, they might be able today to crow about extra money for the Welsh Government too. I appreciate that their views on Brexit are very different from those of the Government, but I don’t think it lies in the mouths of Welsh Ministers to complain about what has happened at Westminster when they are responsible for exactly the same kind of deal here in Cardiff.

I do actually welcome the role that Plaid Cymru has played in the development of a part of this budget. I think it is a good thing that all parties of this house should work together in these ways. That, I think, is what the people of Wales expect of us as well. I know that the future is not going to be easy. The Cabinet Secretary did refer, in the course of his statement, to the prospect of unallocated cuts by the Chancellor of the Exchequer for the year 2020, and we don’t know, as yet, to what extent those cuts are going to fall upon areas of devolved policy. If they fall in areas like defence, which I think is unlikely, then we will get off lightly. If they fall on health and education, or something like that, then we will suffer very substantially indeed, possibly, and I would very much regret that. But I’m afraid that the reality of the economic circumstances in which we have to live is that we’ll need to get used to this for the foreseeable future.

We can all wish that we had an unlimited bank account, but no government can possibly have that. The trajectory upon which the national debt is now set is for it to fall as a proportion of GDP, and that is actually the only way in which sustainable public finances can be preserved for the future. We could all wish that every year would be easier, but once you get debt levels down, they do become easier. The first Blair Government certainly understood this, because the national debt figure that they inherited in 1997 was preserved because they maintained Kenneth Clarke’s tight policies—fiscal policies—when he was Chancellor of the Exchequer for the first administration, in order to get themselves elected for the second time. They actually finished the first Blair period of office with a lower national debt than that with which they started, but then Gordon Brown embarked on a totally different trajectory for the next two Parliaments, with the catastrophe that we all ended up with in 2010 and the inheritance of the Conservative Government, which it’s still trying to grapple with today. I believe they could have been tougher in the way that they treated the public finances.

We have proposed cuts to the non-humanitarian part of the aid budget to help with that. We proposed, of course, getting out of the EU, which will enable us to reduce public spending. The future is bright, actually, outside the European Union. Look at the investments that have been taking place in Britain, or have been announced by big firms, such as Müller with £100 million just a couple of weeks ago, and Dyson, also, with £3 billion in its technology park, and so on, and so forth. I believe the future can be bright for Wales, but only with a Government that understands the importance of entrepreneurship, to raise the tax base in this country, by raising the economic potential and productive capacity with which the taxes that we will need to spend in the future can be raised. And I see no sign of that, sadly, from this Welsh Labour Government.

So, we will not be supporting this budget, in due course, but I very much look forward to going through it on a line-by-line basis in the Finance Committee, and, indeed, in this Chamber in the months ahead.

Can I first of all thank the Cabinet Secretary for his speech and what he said to us today? I think the direction that he’s laid out is one that is for the benefit of the people of Wales. And I think that, sometimes, we all must remember this: that we may come here and bring our egos out, to make ourselves feel good, but the reality is that what we’re here for is to benefit all the people of Wales, and that seems what this budget is going to do, within the serious constraints set by the Westminster Government.

And I want to address three points. First is the continuation of austerity, secondly is the tax raising, and thirdly is proposed expenditure. We know austerity does not work—we’ve had eight years of it. I mean, how many more years do we have to have of it before we find out it doesn’t work? It’s almost like a man or a woman banging their head against the wall and working out that it’s not doing their head any good. I mean, after eight years of doing it, you’d have thought they’d have realised that banging their head against the wall hasn’t done any good. Unfortunately, they’re a a Government that doesn’t seem to learn from what they are doing.

Growth varies between being sluggish and non-existent. Public expenditure falls in real terms. Austerity is by any definition not working. But are we surprised? It has never worked. I can think of no example—so I’d accept if any of you wanted to tell me one—where austerity has brought growth to an economy. And we need growth. Five per cent growth in our economy is where we ought to be, where we need to be, and, if we intend to have a wealthy nation, where we’ll have to be.

And it’s not just us. If I can take an example from that well-known Marxist country, America, Hoover in 1930s America used austerity to turn a recession into a depression. How did America come out of it? Franklin Delano Roosevelt introduced a New Deal. What did the New Deal consist of, which he brought in on his inauguration in 1933? [Inaudible.]—of the federal Government was needed to get the country out of the depression. The first days of Roosevelt’s administration saw the passing of banking reform laws, emergency relief programmes, work relief programmes, and agricultural programmes. Later, a second New Deal evolved, including union protection programmes, a social security act, and a programme to aid tenant farmers and migrant workers. Does anybody who’s given any thought to this not think that we now need a new deal in Britain? And I’m sure that Jeremy Corbyn’s the man who’s going to be giving it to us in the very near future—the new deal that we need.

Because we’ve got to get ourselves out of this recession. [Interruption.] If David Melding wants to look back, he can find that I was one of the first politicians in Wales to support Jeremy Corbyn, and I’ve consistently supported him, and I think he’s doing a wonderful job, and he will do an even better job when he’s Prime Minister, which I hope will be very soon.

Does the Cabinet Secretary agree that we need a new deal for Britain, in Westminster, where we have more money put into the economy, so we can get the economy moving, and start making Wales a wealthier place?

I welcome the introduction of the two new taxes, and the setting of their rates. Land transaction tax replaces stamp duty. One of the weaknesses, and I’m sure one that the Cabinet Secretary accepts, is it is a highly volatile tax. It is a highly cyclical tax, and in good years, we can take a lot more than we expect, but it can fall off a cliff in bad years. It can drop by about 50 per cent between a good year and a bad year, as we know from the 2008-9 period, when it went down by almost half. So, it is a highly volatile tax.

Can I just welcome the changes that the Cabinet Secretary is introducing? Increasing the starting rate can only help the poorer people in our society who are trying to get onto the housing ladder. And a progressive taxation system, I think that’s something we haven’t heard for a very long time, is being implemented, and that is something I think is really important. The more people have got, the more they ought to pay. It shouldn’t be a system where you can avoid paying, and stamp duty is one of those taxes that is very, very difficult to avoid. So, let’s have a progressive taxation system where we end up with those who have the most paying the most.

Landfill disposals tax is one producing reducing returns. I very much welcome the unauthorised rate. I think if there’s one thing that really will stop people tipping on unauthorised sites is the fact they’re going to pay more when they get caught than they are on authorised sites. We’ve had problems—I think many of us in our own constituencies have had problems—of people opening up farmland and other land where they’ve allowed people to tip and they get fines, which are substantially less than what the land tax would have been. So, they were quids in, as it were. Now, under the new system, when they get caught they’re going to pay more than if they’d gone to a proper site. I think that is something that sends a message out on our commitment to the environment. And can I just say thank you very much to the Cabinet Secretary for that?

The last point I wanted to make is that capital is so very important and I really look forward to the use of capital money in building new schools so that it reduces the revenue costs of running those schools.

Of course, in 2010, the UK budget deficit was the worst in the G20, behind only Ireland and Greece in the EU. Though, if we’d sought to increase the deficit faster, we’d have had greater cuts imposed upon us. If we’d sought to reduce the deficit more slowly—sorry, the other way around. If we’d increased the deficit by spending more, we would have had higher debt If we had borrowed, or sought to borrow to spend more, we’d have had bigger cuts imposed on us. After all, those high-deficit nations, which rejected austerity, got it in full measure. The top tax rate since 2010 had been higher every month in all but the last month of Labour’s previous 156 months in power. The top earners are now paying a higher proportion of tax than ever before on record.

But moving to this report, the chief economist for Wales, as the Cabinet Secretary has indicated, has produced a report alongside this. This says that home building has important longer run economic effects and Wales has not been building enough new homes. It also refers to the UK not building enough homes, but, clearly, that has been a significant problem with house building falling to the lowest level since the 1920s in the first decade of this century. It also says Wales has seen rapid growth in housing costs over recent decades and evidence suggests a low supply responsiveness, i.e. not building enough is a large part of the problem, applying to both private sector and housing associations. Of course, during the first three Assembly terms, the number of new social homes provided in Wales fell by 71 per cent as waiting lists multiplied. By 2009-10, Welsh Government had the lowest proportional level of housing expenditure of any of the four UK nations. By 2012, the ‘UK Housing Review’ said it was the Welsh Government itself that gave housing lower priority in its overall budget. In 2013, Wales was the only part of the UK to see house building go backwards and it’s continued to lag behind since.

The Welsh Government has an unambitious target to build 20,000 affordable houses, which of course doesn’t mean social houses, it just includes a small element of social housing. It includes assisted home purchase and intermediate rent for people who earn higher than the levels of people who would be eligible for social housing and otherwise at a time when successive reports by independent bodies have said we need between 12,000 and 15,000 houses, or new homes, should I say, annually in Wales if we are to break the housing crisis, which didn’t exist in 1999. So, what consideration has the Cabinet Secretary given to how to break that housing crisis with a new housing deal for Wales that engages the whole sector?

Eight years after a Wales Audit Office report found that Communities First had failed to operate with effective corporate governance controls, financial and human resources controls and audit trails, six years after the Wales Council for Voluntary Action report, ‘Communities First—A Way Forward’, which said the missing ingredient was community engagement, and after £0.5 billion of expenditure on the programme, the Welsh Government announced this summer that the scheme would not be replaced, the record of its work in Wales in most deprived areas had been mixed, and that the figures aren’t moving.

So, how does the Cabinet Secretary, in terms of how to allocate budgets, respond to the statement at the launch of the Co-production Network for Wales last May, May 2016, by the director of social housing for Monmouthshire, who said, ‘We used to tell people what they can have. We now ask them what they want to achieve’, moving from needs-based to strength-based approaches? I know personally the Cabinet Secretary believes strongly in this, but I don’t believe that perhaps in the budget allocations they fully reflect the need to move to a process that tackles a situation in which people and communities can feel passive recipients of services rather than active agents in their own families’ lives.

In terms of prevention and early intervention, which are key to the Welsh Government and opposition agendas, and to your own legislation, there’s no actual definition of prevention in the Social Services and Well-being (Wales) Act 2014. The Red Cross has highlighted that, in England, they’ve been monitoring the prevention duties, looking at how local authorities are implementing them, and highlighting concerns and problems there. But how has the Welsh Government estimated what funding local authorities in Wales will need to meet their prevention duties, and how has this been reflected in the draft budget? And how is the Welsh Government working with front-line providers and people who work with them who receive the services to ask how by perhaps investing more in those services you can reduce multiples more in terms of cost to statutory service? Thank you.

I want to make a few comments, if I may, on the priority that Plaid Cymru placed on protecting budgets for Supporting People programmes. It is shocking that it took the Plaid Cymru intervention to secure the continuation of this funding.

Over the past few weeks, I have met with a number of organisations in my constituency working in the field of homelessness—the Wallich, Digartref Ynys Môn and Gorwel all do exceedingly important work in very difficult circumstances, providing support and shelter to people who have found themselves in a place where they have nowhere else to turn. The services that they provide are already under pressure because of the financial situation, a situation that was supported, thanks to Plaid Cymru interventions, in previous budget negotiations. But introducing a cut at this point of some 10 to 15 per cent in their budgets, as the Government had clearly proposed, and had told the sector that they were going to introduce those cuts, was at risk of truly undermining their ability to assist some of the most vulnerable people in our society.

Gallwn i fod wedi gwrthwynebu unrhyw gytundeb cyn-gyllidebol gyda'r Llywodraeth Lafur ac yna ymosod arnyn nhw pan, yn anochel, aethant ymlaen i dorri cyllideb Cefnogi Pobl. Ond nid oeddwn yn barod i wneud hynny pe gallem mewn gwirionedd, ym Mhlaid Cymru, wneud y gwaith a gwneud enillion go iawn ar Cefnogi Pobl, neu iechyd meddwl, neu nyrsys ardal, neu drafnidiaeth, neu lu o faterion eraill. Gwrthwynebwyr fel y Torïaid a fyddai’n chwarae'r gemau hynny, gan weiddi o’r cyrion—ennill dim, dim dylanwad, a bod yn amherthnasol. Roedd arweinydd y Ceidwadwyr yn chwerthin yn gynharach wrth ddweud bod Plaid Cymru wedi’u gwerthu eu hunain am fag o sglodion. Gwnaeth ymyrryd yn y ddadl hon, ond nid oedd ganddo'r parch i aros yma am weddill y ddadl hon. Ond dewch imi ddweud hyn wrth arweinydd y Ceidwadwyr: mae ei fag sglodion ef yn do dros ben person digartref. Mae ei fag sglodion ef yn gymorth i helpu person ifanc sy'n agored i niwed i geisio cael ei fywyd yn ôl ar y trywydd iawn. A fy neges i arweinydd Torïaidd sy’n fwy cyfarwydd â phlatiad o dalpiau tatws melys mewn cartref cynnes cyfforddus yw: ceisiwch weld y byd go iawn, a cheisiwch weld sut y mae Plaid Cymru'n helpu'r rhai sydd â gwir angen am gymorth.

Ni ddylai fod wedi cymryd tîm negodi Plaid Cymru i sicrhau'r arian hwn, ond dyna a ddigwyddodd. Does bosib na ddylai Llafur fod wedi bod yn gwneud hyn. I'r rhai sydd ar y meinciau cefn sy'n awgrymu, ‘Byddem wedi gwneud hyn beth bynnag’, dywedwyd wrth y sector am ddisgwyl y toriadau hyn. Roedd yn sefyllfa ryfeddol lle’r oedd Aelodau Llafur yn ein lobïo ni i lobïo'r Llywodraeth Lafur i amddiffyn y darn hollbwysig hwn o gyllid. Ond roedd angen Plaid Cymru i negodi hyn, ac rwy'n ddiolchgar iawn i'n tîm negodi am hynny.

Dylai Llafur fod wedi rhagweld effeithiau peidio â pharhau â'r arian hwn. Mae digartrefedd ar gynnydd. Mae hynny’n gost ddynol ofnadwy i'r rhai yr effeithir arnynt, ond mae hefyd yn gost ariannol ofnadwy. Gall hyd yn oed y Gweriniaethwyr yn yr Unol Daleithiau nawr weld bod gwario ar leihau digartrefedd yn arbed arian i'r sector cyhoeddus yn y tymor hir. Rwy'n falch ein bod wedi dod i'r cytundeb hwn ar y gyllideb, os dim ond er mwyn gwarchod cyllidebau Cefnogi Pobl—dal Llafur i gyfrif fel gwrthblaid effeithiol tra'n gwneud enillion go iawn i'r rhai sydd ei angen fwyaf.

Can I thank the Cabinet Secretary for his statement and the opportunity to contribute to this debate? For my relatively brief contribution I want to highlight a very important principle that’s contained and underpinned in this budget and the key elements of that which help to make the Welsh Government spending effective, and that is something that the First Minister alluded to earlier on, and that’s the principle of early intervention. So, whether it’s early intervention in the Supporting People programme or in the investment to shift our health services to community settings, in preventing adverse childhood experiences, or preventing violence against women, I’m sure the Cabinet Secretary will agree that the more we invest our budget in early intervention and support, then we will see better outcomes for people.

We also save money by reducing the number and frequency of costly life crises as a result. This approach, underpinned by this important principle, is embedded in our policies in Wales and, in my view, it stands in stark contrast to the actions of the Tory Government in Westminster. It is in contrast to so many elements of the welfare reform programme, which we know is putting huge pressures on individuals and families. It is in contrast to the huge cuts to council budgets in England and the associated loss of vital support services there. Those cuts are, of course, counterproductive and more costly to the public purse as we all have to deal with the consequences.

We should be proud that, in Wales, in spite of the cuts of around £1.5 billion to our budgets, we choose to stand by vulnerable people in their time of need. And as we begin the process of scrutinising this two-year budget deal, let’s clearly recognise that the politics of austerity, as Mike Hedges alluded to earlier on, continue to create a tough climate for our public services. So, can I ask the Cabinet Secretary if he agrees with me that, like Wales, the rest of the UK needs a change of direction and some fresh hope? Because this path of continuing austerity is unpicking the very social fabric that holds our communities together. I have little doubt that the architects of this despair, the party represented on the benches opposite, will continue to roll out their criticisms of Welsh Government, demanding more spending and better services, but offering no solutions of their own. This will ring hollow until such time as they help us to turn the tide of austerity around and demand of their Government that Wales is properly funded.

Again, can I also ask the Cabinet Secretary whether he agrees that, in the light of the continuing threat to the very fabric of our communities, it is the principles that underpin much of this draft budget are good for Wales?[Interruption.] I’m just about to finish. So, in finishing, Llywydd, can I congratulate the Cabinet Secretary for concluding an agreement with Plaid Cymru that enables us to meet the priorities of the Welsh Labour manifesto and that continues to take Wales in the right direction, despite all the inherent injustices that Tory austerity has foisted upon us?

Can I thank the Minister for his statement this afternoon? I think it is important that statements are made in this Chamber. I was very pleased that he didn’t reveal his hand on things like the tax issues up until immediately before Plenary. I think that’s really very, very good of the Minister to take his responsibility so seriously towards this Chamber.

Now, that’s not to say that I’m entirely happy of course with the budget proposals that he has laid, and I’m particularly concerned about the proposals for a tourism tax and that he’s going to look at that and begin to scope some work out upon it, because we know the value of the tourism industry to Wales: it’s incredibly important, in particular in north Wales, including in my own constituency, and we know of the difficulties that seaside resorts have had over the years, along the north Wales coast in places like Colwyn Bay, Llandudno and Rhyl. Some sort of tax on accommodation, which I think is what you’re talking about, could lead to absolutely devastating consequences for those towns, and I believe would suck the lifeblood out of many communities in north Wales that rely on the visitor economy. So, hanging up a sign saying, ‘You’re not welcome’, I think, is something that is an extremely detrimental thing that you may be planning to do. I’m happy to take an intervention.

Thank you very much for taking the intervention. I was just wondering, on the point that you’ve just made there, whether you’ve said that the Wales Tourism Alliance, which of course is the body representing most tourism views in Wales, makes exactly the same point that you do.

I think that the Wales Tourism Alliance is absolutely right, and you don’t have to just speak to them. You can speak to any individual business that relies on tourists in terms of its viability and you will know that many of them have been on the brink for many years. We’ve enjoyed some success in tourism. [Interruption.] We’ve enjoyed some success in tourism—I haven’t got time. We’ve enjoyed some success in tourism in recent years with record-breaking numbers of tourists coming to Wales. That’s something we should celebrate, but we hamper that success if we start taxing people simply for wanting the opportunity to come and stay in our communities.

I do wonder why you haven’t looked at other potential tax revenues. One of the things that I suggested in the past is a tax on chewing gum: a chewing gum levy. We’re all fed up of seeing chewing gum stuck to streets, causing a mess on our roads. That’s expensive to clear up. Why aren’t you considering sensible proposals on that? Why aren’t you looking at a fast-food wrappings levy? Why aren’t you looking at things like ATM receipts, which are spurging out of our cash machines and ending up—in the majority of cases—on the floor beside those cash machines? These are simple things that you could look at which I don’t think anybody in this Chamber would necessarily object to.

Can I turn also to some of the things in north Wales that are included in the budget documents? I was very pleased to see reference to north Wales. It’s usually, of course, overlooked in Government documents in this Chamber, but I was very pleased to see a reference to improvements being made on the A55 and the A548. Both roads, of course, are in desperate need of investment and we’re regularly seeing the lack of investment and the impact that that is having in terms of traffic flows on those roads. But I wonder which parts of the A55 and the A548, because there is a tendency from this Government to simply spend in Labour constituencies, frankly, which I think is unacceptable. We’ve seen that in terms of investment proposals in the road infrastructure in north Wales, with the north Wales metro: all of that stops in just Labour constituencies. Well, what about further west? What about Clwyd West? What about Aberconwy? What about Ynys Môn? What about parts of Gwynedd that also require some desperate investment? Perhaps you can clarify what the situation is in respect of those areas.

I notice also that you are seeking to make significant investment over the next few years into our flood defence infrastructure. That’s something that I think is absolutely necessary. We’ve seen the devastating consequences of flooding in communities in recent years. The place that is the most vulnerable in terms of flooding along the north Wales coast is Old Colwyn, in my own constituency. The sea defences there protect the A55 trunk road and they also protect the rail infrastructure, the north Wales main line. There aren’t many homes that are threatened with flooding in Old Colwyn, which is why there’s been no investment in the flood defences there, even though it has been necessary. So, I wonder what action you are taking, along with your Cabinet colleagues, to make sure that the road and rail infrastructure and other key infrastructure are also protected from flooding, and that that is recognised when you’re making decisions about flood protection investment. So, perhaps you can tell us about that.

So, in short, there are some things that I do welcome in your budget, but I’m very concerned that you’ve suggested, even approached the subject of a potential tourism tax. I think there are other ways to raise money that our constituents would not object to.

Vikki Howells.

Thank you, Llywydd, for calling me to speak today. This debate marks yet another development in the devolution journey that started a little over 20 years ago. Indeed, despite the sober warnings from the Cabinet Secretary, I do find much to be hopeful of, both in terms of the distance that has been covered and of the spending proposals that he has outlined. The Cabinet Secretary has laid down a clear plan for the setting out of governmental spending plans, improving levels of scrutiny and accountability.

I also welcome the principles of co-operation and collaboration that have underpinned the budget, bringing together different parties and perspectives to get the best results for Wales. This approach was also reflected in the close working between the three devolved administrations, showing the maturity of the devolution process as it comes of age. Nowhere is this clearer than in the Cabinet Secretary’s remarks on the future use of the tax-raising powers the Assembly will possess in around six months’ time, and in the Welsh Government’s continuing work to develop a new made-in-Wales tax proposal.

As the chief economist reminds us, there are serious decisions we will need to make about how these new powers can best be used to support public services in Wales in the face of changing public expectations and the blinkered approach of the UK Government, with its single-minded obsession with austerity. I therefore welcome the Cabinet Secretary’s comments that he will look to reduce the level of in-year contingency and reserves that would otherwise have been held, releasing much-needed revenue spending to invest in the services we rely on.

I want to briefly touch on a few specific elements of the proposals the Cabinet Secretary outlined. Regarding the communities and children MEG, I welcome the investment in our progressive childcare offer. We can be proud that our proposals represent the most generous deal of its nature anywhere in the UK, and show that the Welsh Government is committed to supporting Welsh parents and families. The pilot in Rhondda Cynon Taf that covers my constituency is already making a difference, although I am keen to see what lessons will be drawn about how we can ensure all who are eligible take part.

Elsewhere under this headline, I welcome the renewal of the Supporting People grant, which we know makes such a difference to tens of thousands of vulnerable Welsh citizens. Similarly, I know that one of the proposals that will be most welcome to groups in my constituency of Cynon Valley is the additional funding to support the regeneration of community facilities. In an area like Cynon, many of these buildings are little short of historic, with proud links to the mining heritage of the communities they are found in, and it is right that we make sure they meet current needs.

For anyone who has heard me raise concerns about Valleys lines rail services, I’m sure it will come as no surprise that I am very supportive of the releasing of funds to buy new rolling stock. Purchasing this stock will save money in the long term, and will also remove a crucial barrier to the negotiation of the new Wales and borders franchise. The renewed commitment to the mutual investment model that will be used to fund the dualling of the A465 and the renewed commitment to the south Wales metro both show that transport infrastructure for a twenty-first century Wales remains a central Welsh Government goal. Elsewhere, I know that a commitment to invest in charging points for electric vehicles has been made, and that’s another key component of future transport infrastructure. I look forward to further information on this proposal, as it is released in due course, to make sure that we get the details right to meet future demand.

The continued focus on education is also to be welcomed, in particular the plans to accelerate the twenty-first century schools programme. Cynon Valley has benefited to the tune of over £100 million in investment under this policy—more than any other constituency in Wales—so I know at first hand how important this scheme can be. I recently visited Aberdare Community School, a twenty-first century school, on the anniversary of the devolution referendum. It was great to discuss with pupils there how devolution has enabled us to carve out our own path in Wales, and this school, and this policy, is one example of this, where our spending decisions are sharply contrasted with a UK approach that cancelled plans to build schools and refused to invest in the next generation.

I’d just like to ask some questions and raise some issues with regard to some of the budget negotiations with Plaid Cymru. I would like to echo what has been said already: as somebody who has been here for 10 years now, I think it’s important that we try to find common ground where we can, and utilise our abilities as politicians to come up with solutions as well as to scrutinise. Therefore, I welcome in this budget deal the £30 million investment that was announced for the creation of a new power plant for Tata.

This has been something that has been campaigned on for quite some time by local activists and politicians of different colours and I think that this is something that we should be proud of. I would like to have some more information as to whether the Welsh Government has talked to Tata about this particular commitment, particularly in relation to the other investment that Tata has promised to the unions and to the workforce. I think it’s important, if the Welsh Government are providing £30 million of investment for a plant of this nature, that we find the money from Tata for the rest of it and that we ensure that Tata are committed to the area. I think this shows a clear sign that that is the case, but I think that it is important, especially with changes to the pension fund and the potential joint venture, that we see it in light of Tata being here for the long term. I was wondering whether the Cabinet Secretary could also confirm that other funding commitments made by the Welsh Government, amounting to almost £13 million, will not be affected by this announcement in relation to Tata Steel. But I would like to put on record my thanks for putting this as a priority.

My other question is in relation to the journalism fund. Again, I’m very thankful for that—£100,000 for one year and £100,000 for the second year. I’ve already been speaking to people in the sector about what that would mean. So, I’m wondering how the sector can help to shape that and to ensure on record that that fund would be for hyperlocal journalists and not for large-scale media organisations that may already be benefitting from another scheme—the BBC scheme, for example. I would want this to be specifically for start-ups so that, for example, the Port Talbot MagNet in my area would not have ended, it would have been able to have been sustainable. That’s the type of thing we really need to ensure for a natural and grass-roots journalism sector in Wales to flourish.

With regard to the investment in music in education, I believe it’s £2 million over two years. That’s something, again, that I’m very grateful for. Again, how can we be involved in shaping where that funding goes and how it’s spent? As you will know, the committee that I chair have carried out an investigation into music in education and we’re coming up with our final conclusions. I’m sure people from all parties here in the Chamber would be willing to come up with ideas for how that money can be spent in the most efficient way so that we’re not duplicating work that’s already being done on the ground.

To finish, I’d like to say also that I’m welcoming of the £14 million extra for mental health. While I think that mental health has been supported more in recent years, it’s always to be welcomed. What I’d like to see happening is—we’re talking about the budget and we’re talking about money, but, ultimately, sometimes I think it’s about how we use the money we’ve got in a better way. So, even though this is new money, how can we change structures and how things work within mental health so that it is truly reflective of what people need on the ground? The one example I’ll give is perhaps we could think about this money going into mental health support for the BME community and asylum seekers. I was, again, I mentioned, last week with people from the BME community in Swansea, and they were saying that some people are being refused access to GPs simply because the GPs are refusing to get a translator there. We’ve had an asylum seeker commit suicide a few weeks ago in Swansea because of not being able to access treatment. So, if we’re going to think about how we use this money creatively, can we think of it with that in mind?

I’d just like to finish by echoing Rhun’s point with regard to Supporting People. I don’t want to have an argy-bargy about who kept Supporting People but I want to thank the negotiating team for keeping that money, because I, in the last few weeks, have met lots of different people from lots of different walks of life who will be very, very happy with today’s announcement. That’s what it’s about for me. People can say what they like, but, actually, that will mean that there will still be people helping those who are in crisis situations on the front line. So, if all I can appeal for is, when we’re discussing this in future years, that they don’t feel that every year their budget is threatened and that they can have some comfort in the system for future years—[Interruption.] Well, I’d love to stop austerity, Lee. I’m not criticising you in this regard. I’m just saying if we can perhaps have a conversation so that they feel that they’re part of ongoing discussions with the Welsh Government and that we can make sure that that programme is supported in the future.

I’d like to follow-up on the austerity point, because, of course, that’s the backdrop to this whole budget discussion. When the UK Government keeps insisting on sticking to those punishing austerity measures, then clearly things are going to have to be cut. Now, let’s not forget why we’ve got these austerity measures. They were meant to ensure that we reduced our deficit and our debt levels, but the reality is that, since 2010, our national debt level has increased by over £800 billion to over £2 trillion—this is under you guys since 2010—and that this Conservative Government—

Will you give way?

I will. Let me just finish my point, because I’ve got a lot more to come—[Interruption.] This—[Interruption.]. This Conservative Government—. Hey, when you’ve finished. Thank you. This Conservative Government has borrowed more money than every Labour Government in history. Go on.

The reason it’s had to borrow more money is because of the huge record-breaking deficits that Gordon Brown left in the Treasury—

It’s not; it’s absolutely not.

[Continues.]—and in the public finances. That’s why we’re trying to turn that around. You actually want to borrow more. It would have accelerated under you.

Darren, did you—

Carry on, Eluned Morgan.

Did you actually listen?

The deficit adds to the debt—

Eluned Morgan.

Did you actually listen to what I said?

I did.

You have borrowed more money than every Labour Government in history. It is your policy, and austerity is not working—[Interruption.] Now, the Welsh Government—[Interruption.] The Welsh Government can only spend money that it’s given by the UK Government, although in this historic year we will as a—[Interruption.] Darren, please—

No, no, no, no. You don’t need to tell Darren Miller to shut up. I will. [Laughter.] Darren, shut up. [Laughter.] Eluned Morgan.

Thank you, Llywydd. Now, this is a historic year because, for the first time now, we are introducing these tax-raising or tax-changing powers. I very much welcome this—[Interruption.]

Eluned, will you take an intervention?

Oh, not another one. No, I won’t if you don’t mind.

You don’t have to take the intervention, Eluned Morgan.

Thank you. The welcome news that—the news that the finance Secretary has announced that we are now going to have the lowest starting rates of land transaction tax in the UK. And I felt a real buzz in the Chamber when that was announced. We felt like a really grown-up Parliament, and that’s what I want to see this place becoming. I would like to know from the finance Secretary how much that will cost. I’m not sure if he did outline that, but I think that would be useful.

Now, let’s not forget that these austerity measures are continuing at a time when wages have been stagnant for 10 years. And, on top of this, during those 10 years, while the Tory Government’s been in charge in Westminster, gas bills have gone up by 49 per cent, water bills have gone up by 25 per cent, rail fares have increased by 27 per cent, private rent has increased by 25 per cent, and food has gone up by 21 per cent. None of these are luxuries. None of these are luxuries. But rather than stand by the poorest in society, what’s the Tory Government decided to do? It’s decided to punish the poor with the introduction of universal credit. Four hundred thousand families in Wales will be £3,400 a year worse off by 2020 because of the introduction of that new measure.

Now, in England, the Tory Government has written off the poor. Those cuts have led to an increase of 65 per cent in the homelessness levels in England. That is not the case in Wales. We’ve brought in this new law, giving Welsh local government new responsibilities in relation to homelessness, and the Supporting People programme has been crucial. Anyone who could have doubted Mark Drakeford’s personal commitment to this issue needs to be reminded of his long-standing action in relation to homelessness, his tireless efforts to help establish and found Llamau, and his long-held passion and activity to ensure support for the homeless. There are no cuts to the Supporting People programme and I didn’t think that Mark Drakeford, with his long history, would have undertaken those. So, I am delighted to see that, and an additional £20 million to alleviate homelessness.

Now, there’s going to be ample time to chew over the detail of the budget, but I do think it’s worth noting that £240 million extra to take the pressure off our hard-working staff in the NHS. Of course, the ideal would have been to give our NHS workers and other public sector workers a pay rise that they undoubtedly deserve, but, with a set and limited budget, the only way to do this would’ve been to have cut services elsewhere. So, if Plaid is so anxious to introduce this pay rise without receiving the additional money from the UK Treasury, you have to outline which hospitals you’re going to close in order to make that happen. And as for the Tories saying that the debt levels in Welsh hospitals—. Do you know what the debt levels in English hospitals are? It’s £2.4 billion. Don’t come over here telling us about debt levels in hospitals.

I think it’s very important, the fact that we are helping to secure funding for care; it’s a crucial area, and I am delighted that the finance Secretary will be exploring the issue of taxation in this area. This is something that we will be looking at in the Finance Committee and I hope that we’ll come up with some interesting ideas on that in the next few weeks.

The one area in particular that I’d like to thank the finance Secretary for is his commitment to abolish the tolls on the Cleddau bridge by 2020. This is an issue on which the Labour Party locally has campaigned for years, and I’m delighted that he’s been able to deliver on this. It’s going to make a real difference to people and businesses living around the Haven. I’m also delighted to hear that extra money has been allocated to draw down funds from the EU rural development programme, but I do wonder if the finance Secretary could clarify whether we will receive, in the next few weeks, some more clarity on the competing structures for economic rural development in Wales.

The finance Secretary has also set out a two-year budget. I’d just like to know: does that mean that we’ll see exactly the same next year, apart from a few little tweaks? And does that mean that we, as a Finance Committee, will be redundant next year? What does that actually mean in terms of how the mechanism works? Now, I know that balancing the books at a time of austerity is a difficult proposition, but I would like to thank the finance Secretary for sticking to those commitments that he and we made in the Welsh Labour manifesto, and following through on promises that we made to the Welsh public and to the electorate.

Finally, Joyce Watson.

Thank you—diolch, Llywydd. Cabinet Secretary, there’s an awful lot to go through here, but there is one thing that is abundantly clear and that is that this budget has been designed to look after those people who need that support the most, to support the people in Wales against the austerity that is emanating from the Tory Government in Westminster. And it’s a Government that is absolutely determined to make life difficult for the poorest within society. I think the universal credit roll-out that is—[Interruption.] No, I will not. I’ve just started speaking. You can sit down.

You just don’t mean to take an intervention. That’s all you need to say.

[Continues.]—the universal credit that is going to see people without money for six weeks to be dismissed by a Prime Minister, when she was interviewed on that principle, saying, ‘We’ll work something out’. Well, I’m glad that she can work something out, because I know one thing: when you have no money whatsoever for six weeks to feed yourself, to pay your rent, or to send your children anywhere, you will not manage and you will not be able to work anything out. So, in terms of the protection of the £1 million for the discretionary assistance fund, which is only really a stitch, but a critical stitch and safety net, which was scrapped by the Tories in England and restored by a previous Welsh Labour Government, I welcome that and I wonder how many people that will support.

The other issue that I am more than pleased about is—. And I was a former Pembrokeshire county councillor, and I do have an inside track record on the long and the dubious history of the toll on the Cleddau bridge, so I welcome scrapping that. And there is a history about how that money was both raised and how it was spent. So, looking ahead, I welcome, in the first place, the fact that that local tax will be removed—removed from the people who go to and from work, and from the businesses that operate either side of the county. I do appreciate that time is needed to make transitionary arrangements, but given that the council can budget knowing that maintenance costs will transfer to Welsh Government in two years’ time, given the historic question of how the revenue has been spent over the years, do you think that it might be a good idea, even a gesture of goodwill, if Pembrokeshire council were to ring-fence the toll revenue from now until it’s scrapped and consult ratepayers as to how that money should be spent? This has been a huge area that has been contested by myself and other Labour leaders on Pembrokeshire County Council year in and year out. I look forward to your response.

I call on the Cabinet Secretary to respond to the debate.

Diolch yn fawr, Llywydd, and thank you to all those who’ve taken part in the very wide-ranging discussion of the budget. I’ll do my best to reply to as many of the points that have been raised as possible, and do so rapidly.

What seems like a long time ago now, Nick Ramsay began the discussion. I thank him for the welcome he provided to the new budget process. I acknowledged in my opening remarks the impact of the fiscal framework. I’m happy to confirm for the Member that the Bangor University report is available to Members and available in full and available today. As far as the two new taxes are concerned, I suspect he will have recognised the 150 per cent rate for unauthorised tax disposals in LDT, because he put exactly that rate to me in the Finance Committee at a point when I was not able to confirm it. But it is confirmed at that rate today.

Can I just say to Members of the Conservative group here that I think they need to stand back a little bit from some of the language they’ve used in relation to a tourism tax? What I’ve done this afternoon, Llywydd, is what I said; I’ve announced a shortlist of possible proposals for further work, and this is one of the things that many people have advocated. Adam Price was absolutely right when he pointed out that this is a tax used in many, many parts of the world, usually navigated at a local level. The reason for the tax—from those people who advocate it—is in order to be able to invest in facilities that then lead to more tourists in that area. That’s the point of a tourism tax. It’s not to frighten off tourists; it’s to create the conditions in which the tourism industry can go on thriving and doing more. So, that’s the case for it, we’ll explore it further. It’s certainly not to be just written off as though it had no merit at all. It may not make it onto the shortlist, but I do think that the idea that it isn’t worth exploration is to overstate the case.

Cabinet Secretary, would you take an intervention?

Yes, of course.

I hear what you’re saying about talking about just exploration of a tourism tax at this point in time, however, do you recognise that there is a danger that a perception will go out that there is a tax on tourists coming to Wales that doesn’t exist across the border in England? In areas like my own, along the border areas, we need to guard against that sort of perception going out. So, I think that we do need to make sure that it is just exploration at this stage.

Llywydd, I don’t say that those points are not points that need to be considered, but all I have said today is that we intend to consider things, and we will consider the positive case that has been made and we will take into account those arguments that tell us why we might need to proceed carefully. I just wanted to be clear about the status of what I had announced this afternoon.

Adam Price made a series of important points about the agreement that has been reached with Plaid Cymru. We are a Government without a majority. The First Minister said, back in the early summer of 2016 when this Assembly term began, that a Government in our position needs to be able to listen to ideas from other parts of the Chamber and to try to reach agreement where that is possible, and the very careful work that’s gone on over the summer has allowed us to do that. We don’t agree on everything, as Adam Price set out, but the things we have been able to agree on are important, they will make a difference, and they were outlined by him.

Llywydd, I listened, all the way through, to what Neil Hamilton had to say. I almost stopped at one point, but I did continue listening. I think it’s the sort of contribution where the idea of a ‘stream of semi-consciousness’ is the best way to describe it. I did nearly stop listening at the point when he tried to persuade me that I was living in an era of fiscal profligacy and that what people in Wales have had to endure for the last eight years is—and I think I’m quoting him exactly—‘the opposite of austerity’. Well, it does not feel like that, I can tell him, to people who live in my constituency who find that their wages have not gone up over that period, that their services have had to be cut back, and that their prospects of anything better are receding ever further into the future.

I’m sure the Cabinet Secretary will accept that you can’t borrow in unlimited sums indefinitely, and, therefore, a judgment has to be made, sometimes, as to when the rake’s progress has to stop. Interest rates have been at historic lows. They’re already on the rise in the United States; they may well shortly be on the rise in this country. How do we then pay the bills at a time when we haven’t repaired the roof, when the sun ceases to shine and the rain pours?

Llywydd, we are incredibly lucky in our time to have benefited from the investment decisions that people who went before us were willing to make. Had they listened to Neil Hamilton, they would simply have stopped doing all the things that we now rely on. It is possible, in a way that I think the Member never seems to understand or recognise, to borrow to invest, because investment creates the conditions of economic success, and that economic success then allows you to pay back the money that you have borrowed. That is the simple lesson that progressive Governments throughout the last 100 years and more have understood, and we say that it needs to be better understood today.

Mike Hedges made a series of very important points. He understood absolutely that you can invest your way to success, not just in places, but, as he said, in people too. A new deal for Britain is exactly what we need to get our economy onto that track. As far as tax volatility is concerned, he will know that the fiscal framework gives us access to a £500 revenue reserve to allow us to smooth out tax volatility from one year to the next. I’ve made no plans to use that reserve in the budget in front of the Assembly, but it is there should it be needed in the future. The way that we have used our capital in this budget is exactly the way in which Mike Hedges advocated. I’ve said to all my Cabinet colleagues that I will place a priority upon capital investment plans that release revenue in the future, and that is why buying rolling stock in the way that Vikki Howells outlined is so important.

I was grateful to Mark Isherwood for the things that he said about housing, because I want to say to him that this budget has the needs of housing right at its very heart. Whether that is the Supporting People programme, and the £10 million in each of the next two years that we are able now to invest in homelessness services; whether it is the actions we are taking to build 20,000 affordable homes; or whether it’s the announcement I’ve been able to make today about taking first-time buyers in Wales out of tax altogether—all of those things are about making sure that on housing, which affects every family in the land, we are able to do more to help people in that position.

The Deputy Presiding Officer took the Chair.

Dirprwy Lywydd, Rhun ap Iorwerth highlighted a number of important aspects in the deal that we have been able to strike between Labour and Plaid Cymru. I have to disagree with him on only one point, but it’s an important point, and it’s the only point, I think, in this debate where I feel I must make sure that the record is properly understood. Rhun said that it was inevitable that without a budget agreement there would have been cuts in Supporting People. I want to be absolutely clear to the Chamber that there was no such inevitability. Supporting People is a programme, like all the others, that comes under pressure when we are having to create a budget in the difficult circumstances that we are. I was very glad that we were able to come to the agreement that we did. I thought Bethan Jenkins put it in exactly the right way, as far as Supporting People is concerned. It’s been a shared priority across this Chamber for many, many years. It’s appeared in three budget deals altogether. It was a matter of absolute concern to me. I’m really pleased that together we’ve been able to support it, and that’s the position that we have reached. I just want to make sure we’ve got that clearly set out.

You know full well that the sector have been told to expect this cut of 10 to 15 per cent.

I spend my time having to tell people who provide services on which our fellow citizens rely that they have to prepare for the tougher times and harder choices that lie ahead. I’ve said it countless times in this Chamber, so I understand that people out there understand the conditions in which this budget is being created and would have been anxious about what that might mean for them. Luckily, by acting together in the way we have, we now know, and can give for two years a certainty—because Bethan asked about making sure we could offer more than one year—we now have two years of certainty for people in the sector that that budget is protected, and as a result of this budget, another £10 million in both years is being made available to bolster the services that we provide in the homelessness field as well. And £4 million of that will go through my colleague Carl Sargeant’s budget, where he will be able to spend that money with housing associations and with the third sector, providing the services that we know—. Homelessness is more than bricks and mortar; it’s about attending to the real difficulties that people face—of mental health, of substance misuse, of alcohol difficulties and so on—that come with being in that awful set of circumstances. The money we will provide, through Supporting People and through this budget, will allow us to do more to help people out there. That’s why, when Dawn Bowden and Joyce Watson and Eluned Morgan all referred to the social fabric, the money that we’ve been able to find for homelessness, for the discretionary assistance fund, is so important.

Let me very briefly, Llywydd, say something to Darren Millar. There are other ideas on our tax list; a fast food packaging levy is there in the list that I outlined today. I’m sure, Llywydd, the last time I looked, the Menai bridge was in north-west Wales, and had he looked carefully at the agreement with Plaid Cymru, he would’ve seen that we have found money to accelerate the commitment the First Minister made in the Eisteddfod in August to the third Menai crossing. My colleagues will publish the detail of the budget in three weeks’ time, and he will see then the plans that we have, both for the £150 million flood defences and for the improvements to roads in the north of Wales.

There is more, of course, that could be said, but we are at the start of a process, not the end. I am grateful to everybody who has commented on the budget this afternoon, and I look forward to the period of scrutiny that will now follow.

Thank you very much.