The following amendment has been selected: amendment 1 in the name of Paul Davies.

We now move on to item 5, which is the debate on the draft budget. I call on the Cabinet Secretary for Finance to move the motion—Mark Drakeford. 

Motion NDM6603 Julie James

To propose that the National Assembly for Wales, in accordance with Standing Order 20.12:

Notes the Draft Budget for the financial year 2018-2019 laid in the Table Office by the Cabinet Secretary for Finance and Local Government on 3 and 24 October 2017.

Motion moved.

Diolch yn fawr, Dirprwy Lywydd. I move the Welsh Government's draft budget before the National Assembly. As Members will be aware, this budget represents a significant milestone in Wales's devolution journey. It is the first time where we have been able to set out our plans for devolved taxes and our borrowing proposals. It is also the first budget to be brought forward under the new fiscal framework and with the operation of the new Welsh reserve. 

The Llywydd took the Chair.

Recognising the devolution of our new fiscal responsibilities, agreement was reached by the Assembly on a new budget process. For the first time, we have published our budget proposals in two stages. We set out the major building blocks of the budget on 3 October, reflecting those new fiscal responsibilities, and showing where the money comes from and how it was proposed that it should be allocated across portfolios. To help inform understanding, a suite of documents was published alongside the budget, including the chief economist's report, the Welsh tax policy report, and the independent report by Bangor University. I'm grateful to the Finance Committee for all its work in relation to this budget, and was glad to see in their report on it an indication that they are content with the level of detail provided alongside the outline budget. I look forward to engaging positively with the further recommendations set out in the Finance Committee's report. 

On 24 October, Dirprwy Lywydd, we provided a greater degree of detail at budget expenditure line level than has ever previously been provided. This is a step that colleagues in the Chamber called for last year, and I hope that it has proved helpful in supporting meaningful scrutiny at the portfolio level. I have followed with interest the scrutiny sessions by individual subject committees, and I'd like to record my thanks to all Members who have played their part in our evolving budget process. My own reflection at this stage is that the two-stage process has worked in line with the intentions that led to its creation, but I look forward, of course, to hearing the experiences of others in this regard during the afternoon.

What is more challenging, Llywydd, is the unavoidable awkwardness of a UK budget that takes place late in our own draft budget process. That awkwardness is clearly apparent in the debate today, as we discuss a draft budget prepared before we had received the further allocations made available on 22 November. I intend to use most of the time available to me this afternoon to set out how I plan to align the resources made available in the UK budget with our own budget processes. Before doing so, however, let me deal briefly with the macroeconomic context that the UK budget reveals. Downward revisions to the economic forecasts, published by the Office for Budget Responsibility, confirmed weaker economic growth, lower tax revenues, and yet further pressures on living standards. That context has a direct bearing on our budget here in Wales because the new forecasts from the OBR help shape the resources that will be available to Wales through the working of a fiscal framework. 

The Welsh Government's draft budget for 2018-19 was prepared using economic information from the UK spring budget, including OBR forecasts. Our own tax revenue forecasts, which use a number of the OBR economic determinants, will be revised now to reflect the new information made available alongside the November budget. As part of their work, Bangor University will scrutinise and assure these revised forecasts, and I'm happy to confirm this afternoon, Llywydd, that I will publish a summary report of the Bangor scrutiny work alongside our final budget on 19 December. I'd like to thank the team from Bangor for their excellent work to date. I'm pleased to let Members know that they have agreed to extend their current contract to undertake the independent scrutiny and assurance role for next year's budget, building on the expertise they have developed this year. This arrangement will continue as we put in place permanent arrangements for the independent production of independent tax revenue forecasts for Wales. Discussions with the UK Government and the OBR continue on that point, and I will update Members as we make further progress. 

Llywydd, let me return to the way in which decisions about our budget are to be made against the background of UK Government decisions. As far as revenue is concerned, over the next week, I will continue to carry out discussions with Cabinet colleagues, concerning the £215 million-worth of consequentials from the UK budget available to Wales over a four-year period. The First Minister has agreed to a paper being presented to the next full Cabinet meeting, on 12 December, when I will bring a set of proposals for discussion. At the same time, in line with our previous agreement, I will discuss matters of mutual interest with Plaid Cymru, and I'm grateful to Steffan Lewis for having made time already to begin those discussions.

Llywydd, my intention is that the outcome of these discussions on the revenue consequences of the 22 November budget will be reflected in the final budget, which I have to lay before this Assembly on 19 December. I plan to do that because I think it is particularly important to give as much certainty as possible to our public service partners on the resources that will be available to them to run the services that they provide over the next two years.

I then intend to turn to discuss further the capital consequentials of the UK budget, including financial transaction capital. I hope to carry out those discussions over the holiday period. I'll give an undertaking this afternoon, Llywydd, that any early decisions on immediate capital priorities which it is possible to agree, before we debate the final budget on 16 January, will be set out to Members in advance of that debate on 16 January so that Members will be informed about them before we take that final vote. Those capital allocations will not be reflected in the final budget; I can't do it in time for that. But I will try to make sure that Members have the maximum amount of information that I am able to make available to them, and that information will include any additional capital consequentials that I'm able to agree on with Plaid Cymru, as part of our discussions with them.

Llywydd, there is a third element that we have to deal with as a result of the UK budget. The Chancellor announced a decision to introduce a new first-time buyer relief in stamp duty land tax as part of his budget. He did so, as Members here will know, despite the very clear advice of the Office for Budget Responsibility that such a relief was more likely to benefit sellers, through raised prices, rather than buyers, and that the relief will be significantly vulnerable to abuse. The change introduced by the Chancellor of the Exchequer means that, in England, 80 per cent of first-time buyers will pay no stamp duty at all. The proposals I set out on 3 October, to set the starting point of land transaction tax at £150,000 for Wales from 1 April next year, already means that 70 per cent of all first-time buyers in Wales will be exempt from that tax.

The Chancellor's decision, however, does result in some additional funding for Wales through a reduced block grant adjustment. That money is therefore in addition to the £215 million revenue consequentials, which I set out earlier. I continue to consider how that additional funding might best be deployed in Wales, and I intend to make an announcement on my decisions in that area before the end of this term.

Will the Cabinet Secretary give way?

Of course.

Just on that point, just for clarification around this adjustment, is that specifically an adjustment under the fiscal framework to take into account the impact of introducing this tax on an England-and-Wales basis, before you have a chance to adjust as regards the new devolved powers next April?

Llywydd, it is exactly that. It is a one-off consequence of the timetables that will clash this year but won't clash in the future. It does mean that the block grant adjustment moves marginally in our favour. I am looking to see what might be done with that resource. And, as I say, Llywydd, I will make sure that Members are aware of the outcome of that consideration before the end of term.

Llywydd, I do appreciate the less-than-satisfactory nature of providing Members with information in this unavoidably disjointed way. It is a consequence of the interaction between our budget timetable and that of the UK Government. I hope Members will agree that the plan I've set out this afternoon is designed to provide the National Assembly with as much information as possible before a final vote is taken on our budget proposals. The alternative, as I've said at Finance Committee, is to adopt the model agreed by the Scottish Parliament, where MSPs will only see the draft budget for the very first time on 14 December, where no opportunity to discuss or scrutinise will be available until after our final budget has been considered here. In its report, our Finance Committee acknowledges the detrimental impact the UK Government's move to a budget with an unspecified date in the autumn has on the Welsh Government's ability to plan fiscal spending and tax policy. The other side of the coin, however, is the considerable benefit for the NHS, local government and other delivery partners in publishing our business plans in October. On balance, members of the committee concluded they preferred the arrangement we have in place here in Wales, and I'm sure that they will agree that while we continue to do things in that way, we should continue to keep in view the processes we have as our fiscal responsibilities develop. 

Llywydd, to conclude, we agreed that the new budget process we have started on this year would be a new chapter and that there would be lessons to learn for future years. The report of the Finance Committee is particularly helpful in identifying areas where further progress needs to be made and, as I said at committee, I am always open to looking at the ways in which we can improve the information we provide and to go about discharging our responsibilities in the most effective way. 

I thank the committee again for their recommendations, look forward to working with them on them and to hearing the views of Members this afternoon. 

I call on the Chair of the Finance Committee, Simon Thomas. 

Thank you, Llywydd, and as the Cabinet Secretary for Finance has just outlined, this is the first time for us to look at the budget in this way—a new approach for the Government and a new approach to budget scrutiny as well—because the Wales Act 2014 introduced fiscal devolution to Wales, meaning that the role of the Assembly now is to hold the Government to account, not only for its spending plans, but also its plans to raise revenue through borrowing and taxation on property and landfill waste, and of course income tax in due course as well. As such, we agreed to change the budget scrutiny process to ensure that the Finance Committee was afforded the opportunity to consider the high-level proposals of the Government in terms of its priority spending and revenue, and of course that every other committee could look at their individual budgets for Government departments. That’s what you have in the Finance Committee report and the reports by the other committees today.

One of our main considerations in the Finance Committee was the new powers around taxation, and how these new fiscal powers will be used. We’re grateful to the Cabinet Secretary for providing details of his proposed tax rates alongside the draft budget documentation. The information provided alongside the publication of the outline budget proposals included the chief economist’s report, the Welsh tax policy report, and the report from Bangor University. As the Cabinet Secretary has acknowledged, on the whole we came to the conclusion we found the information provided to be comprehensive, and this aided our scrutiny of the budget. And we’re also grateful to the Cabinet Secretary for confirming minutes ago that Bangor University will continue their work, and update the work following the budget of the UK Government, which has just been published. It was of great help to committee when scrutinising these high-level issues.

Some concerns were expressed over the transparency of the overall local government funding prior to the publication of the settlement. In future years we would like to see the strategic integrated impact assessment explain more in terms of how decisions had been prioritised and reached. Additionally, one issue that is a continuing theme from our scrutiny last year is the information available within the draft budget in terms of how the Government’s commitments are prioritised and fed into the budget allocations. We concluded that we’d also like to see clearer links between the draft budget, the programme for government and the 'Prosperity for All' strategy—and this, of course, all rests within the Well-being of Future Generations (Wales) Act 2015.

It wasn’t ideal that the UK Government budget was published in the middle of our scrutiny of the draft budget. We’ve just had an outline of the problems faced by the Government from the Cabinet Secretary, but as a committee we still think it’s helpful to have details around the Welsh Government’s intentions at an early stage. We also felt it would be helpful to have indicative figures for future years, although we accept that this may be difficult depending on comprehensive spending reviews; it is helpful to have detail provided where possible, and of course it’s happened in the past.

In light of the changes to the stamp duty rates announced by the UK Government, the Cabinet Secretary said that he would consider changes to the proposed rates in Wales. I was half thinking that we might have an announcement from him today, but not quite. We'll hear in due course, it seems. What is important is that we give appropriate scrutiny to the final recommendations by the Government. We also said in our report that these changes at the UK level could lead to pressure to rush through transactions in Wales to completion, which could lead to compensation for the Government. We’ve just heard confirmation from the Government that that compensation from the fiscal framework will happen. And, as he said, that will be a one-off, and we don’t expect to see it in years to come.

In considering the Government’s plans for taxation over the next 12 months, we considered the forecasts used to predict tax returns in Wales. Evidence has shown that there is limited Wales-specific data, and there was mixed evidence as to how vital this is to producing accurate forecasts. As a committee, we recognise that there is a case for ensuring that Wales-specific data is available, and that it is appropriate and gives additional value.

Additional funding was allocated to Wales as part of the UK budget, but a great deal of this was actually in the form of financial transactions capital—and this is the first time those words have been used in Welsh; cyfalaf trafodion ariannol, that is, apparently. Financial transactions capital is something that the committee will look into over the year to come to see how effective it is and to see how much use can be made of it, given that the Cabinet Secretary has suggested that this kind of funding can be restricted in terms of its use in Wales.

Two themes that emerged during our scrutiny last year have also been raised again this year.  First of all, health funding continues to be prioritised, although this doesn’t seem to be resulting in service improvement or better financial planning, and often it is at the expense of other areas, notably local government. I was interested to note that the reports from the health committee and the local government committee have both raised similar issues.

The other theme relates to the Well-being of Future Generations (Wales) Act 2015. Last year, we found that limited progress had been made in demonstrating how the Act is embedded in the draft budget, and we heard from the Cabinet Secretary how the Government had tried to align the draft budget and the Act during this year’s process. We appreciate that it will take time to fully embed this approach. However, we were disappointed that there was no further evidence of the improvements that we’d hoped to see. Nevertheless, we can see that efforts are being made, particularly by working with the Future Generations Commissioner for Wales in the area of procurement, decarbonisation and participatory budgeting, and we would hope to see more improvements going forward.

We also considered the financial preparations under way with regard to Brexit, and we are concerned that the uncertainty in terms of Brexit is impacting on the decisions being made by businesses in terms of investment. We are keen to see more efforts on the financial preparedness for Brexit in Wales and we will be looking to hold an inquiry into this area going forward. It’s also an area, of course, where the Government has just outlined some of the funding that has come in the budget that can be a priority, possibly, for preparing the economy and communities in Wales for Brexit.

Finally, we looked briefly at proposals for new taxes and we believe that this is an exciting new stage of fiscal devolution in Wales. We look forward to working with the Cabinet Secretary over the next year in bringing forward a new devolved tax, and we agree that the UK Government’s role in the consideration of new taxes should be limited to issues of competence and the impact on UK revenues. As a committee, we are interested in how the new process will work and I’ve written to the Business Committee asking that we be consulted on the new procedures for bringing forward new taxes in Wales.

This is the first year where our scrutiny of the draft Budget has focused on the strategic details, whilst the policy committees were able to report in their own right to the Assembly. Prior to the final budget debate we will be considering those reports, and I also hope to discuss the new process with other Members in order to consider whether improvements can be made for next year, and I would welcome any comments from Members on the way in which we have scrutinised the budget this year and the way of improving that for the future.

Finally, of course, I'd like to thank everyone who has contributed to this year’s scrutiny. As a committee, we are very grateful to all of the people who contribute to the work of the committee and who have assisted us in terms of drawing up our findings, which will be the basis of your discussion this afternoon. 

I have selected the amendment to the motion, and I call on Nick Ramsay to move amendment 1, tabled in the name of Paul Davies—Nick Ramsay.

Amendment 1 Paul Davies

Delete all and replace with:

To propose that the National Assembly for Wales:

Believes that the Welsh Government's draft Budget 2018-2019 fails to adequately meet the needs of the Welsh people.

Amendment 1 moved.

Diolch, Llywydd. I think the primary question, Cabinet Secretary, that I'd like to pose at the start of my contribution this afternoon is: what is this budget seeking to achieve? Is it simply trying to allocate funding to different budgets—in the past once perfectly acceptable? Or is it trying to do more than that, to address longer term challenges and to seek a real fundamental transformational economic change to the Welsh economy? I assume, given the changes to revenue to this place and the advent of tax powers to this Assembly, that the latter would be the preferred option.

Can I firstly concur with a number of the issues raised by the Chair of the Finance Committee? I've spent many hours alongside him on that committee considering many of these complex issues—well, from complex to some impossible issues, I think. It's been a very interesting time, and I think we've done our best—all the members of the committee across all parties—to scrutinise the budget as best we can.

Recommendation 1 of the Finance Committee's report calls for greater attention to be given to the way commitments are prioritised, and I would certainly agree with that. It's key that the priorities of the Welsh Government reflect the priorities and the needs of the people of Wales, and, as I said before, those needs over the medium term. 

A number of spending allocations may be welcomed in this budget, but it remains less than clear how many of the current spending allocations reflect the priorities of the programme for government or indeed the extent to which the programme for government, or for that matter the future generations legislation, was referred to at all. It does seem that a number of these strategies are great in principle and at the time that they're being strategised, but they are conveniently discarded or at least put to one side when budget setting and the process gets under way. 

We know that some budget lines are disappearing as part of a wider merger and simplification of budget lines in this budget. This has been a consistent concern throughout evidence heard by Assembly committees, and, as we heard, it was all committees that were involved in this budget process this time, not just the Finance Committee.

From 2019-20, there will be a single grant for a number of projects, including Flying Start and Supporting People: the early intervention prevention and support grant. Cymorth Cymru were particularly strong in their evidence to the Public Accounts Committee that the disappearance of a distinct budget line meant that the Welsh Government can no longer be fully held to account on how much they spend on Supporting People. It was also highlighted that it's unclear which services will be cut within the merged budget due to the £30 million savings from the decision.

In health, budget lines have also been changed, so there's also less ability there to scrutinise year-on-year spending. What we do know from the Cabinet Secretary's comments is that it looks like there's been another deal with Plaid Cymru this year—well, before the final dissolution of the compact. I'm sure that the Cabinet Secretary will say that the deal

'secures the whole of our Budget and demonstrates our commitment to working with other parties to deliver shared priorities in the interests of the people of Wales.' 

Your words, I believe, Cabinet Secretary, not mine. But questions do have to be asked, I think, about the suitability of these types of short-term deals for putting Wales on a sounder and a more sustainable economic footing, and that isn't just a criticism of this potential deal or Plaid Cymru's actions here. I think that applies to other party's deals as well. You'll know that I was very vocal about the deal that was made between the Liberal Democrats and the Welsh Labour Government in the last Assembly, which led—[Interruption.]—which led us down the road to nowhere on one bit of the Eastern Bay link, still with no signs of the second bit being built. Go for it, Mike.

I was going to ask: does that also go for the deal between the Conservatives and the DUP?

You're just trying to distract me, aren't you, from my budget debate. [Laughter.] I'll speak to you in the tearoom.

Assembly Members: Let's hear the answer.

The answer is that it's this Welsh Government that is responsible for running public services in Wales. I don't defend everything that the UK Government do—I never have. I'm sure you don't defend everything that the UK Labour Party—. I know you don't defend everything the UK Labour Party did. [Laughter.] So, we're probably quits on that score. But this is about the budget for Wales and there are certain tools and levers we don't have at our disposal, but we do have levers at our disposal here to improve the economic situation in Wales, not just in the short term, but in the medium and long term, as well.

If I can just move on, we've spoken a lot about process, I'm aware of that, and I understand that that's because we are at a change in the way that the Assembly is dealing with its powers, but it is important to turn to some of the funding allocations in more detail, and, firstly, the health service, which Simon Thomas mentioned.

Of course, we'd all welcome any additional funding for our NHS. Welsh Conservatives have called for that year after year, particularly during the last Assembly, during the real-terms cuts that the Welsh Government made at that time, before they saw the error of their ways. You have to ask: how much of this money—as Simon Thomas did—is simply going into plugging health board deficits? You didn't put it in quite those terms, Simon, but I think I got the drift of what you were saying. You have to look at where that money is going. Is it making up for a lack of sustainable medium-term financial planning, and, if that is the case, then those gaps have to be plugged; we have to make sure that the financial processes that health boards are undertaking are sustainable in the longer term, because, as Mike Hedges often says in committee, you can't simply pile more and more money into the NHS—or into anything in Wales—without making sure that the checks and balances are in place to make sure that that money is being made the most use of.

Prevention hasn't been mentioned yet, at least I don't think it has. The Welsh Government places great emphasis on prevention, understandably, although there doesn't seem to be a hard and fast definition of what is actually meant by 'prevention'. We tried to fathom it out on the committee; we didn't have much luck either. But I would say that has led to sport being grouped with the health portfolio earlier in this Assembly, but, at the same time, cuts to sport and community assets, as a result of cuts to local government budgets, will inevitably harm that goal. So, it does seem that, on the one hand, we're saying very good things about prevention, but, on the other hand, the actions of Welsh Government in this regard aren't entirely going to be bearing fruit. In fact, in the words of the leader of Bridgend council, in Bridgend, the budget we commit to leisure centres and swimming pools is half what it was six years ago, and that's not just Bridgend; that's a common theme across local government. Indeed, the cuts to local government—I believe a cash reduction of around 0.5 per cent in 2018-19—were mentioned by the Chair of the Finance Committee.

Education is, of course, crucial to developing skills—. I'll give way.

I'm very grateful to you for making those particular points about the cuts and so on referred to by Bridgend. Do you agree with me, therefore, that there's a desperate need for an end to the UK Government's austerity programme?

Well, it's a shame that the overspending of the previous Labour Government took place at the time it did, and perhaps—[Interruption.]—perhaps—. Go on then; I'm feeling generous.

Well, I just wanted to give you further information, because, you see, the UK national debt at the time that the Tories took over was 50 per cent of GDP. It's now 88 per cent, so, clearly, austerity can't be working.

But, of course, it would've been a lot higher had the Conservative policies not been implemented, because you can't turn a supertanker around—[Interruption.] I'm not going to let you have any more interventions; I've been very generous. You can't turn a supertanker around overnight, and the deficit has come down, maybe not as much as we would've liked, I admit that, but there we are, nothing's perfect, but, once you're heading in the right direction, you're heading there, aren't you?

Education is, of course, crucial to developing skills and we do support programmes like the twenty-first century schools programme, delivered across Wales in collaboration with local authorities. That's to be welcomed, but, at the same time, if you look at the fall in part-time students, if you look at cuts to further education budgets, then that cannot be welcomed, and the Wales Audit Office have highlighted that grant funding has been reduced by 13 per cent, in real terms, between 2011 and 2016-17, to further education, so that's not good.

Can I just say, before I close, Presiding—yes, Presiding Officer—we haven't mentioned—? [Interruption.] I just wanted to make sure. We haven't mentioned procurement. The Wales Audit Office has released two reports that are critical of the Welsh Government's approaches to procurement, including the fact that it's had to fund the National Procurement Service, which is underused by the public sector. I think, in the past, procurement hasn't been alluded to enough and I think it's becoming increasingly obvious that, if we want to develop the Welsh economy, then actually procuring on a Welsh basis as much as we can is very important to do, and getting the most out of every Welsh pound that is spent. So, I would like to see a greater focus on that, moving forward.

I knew that the Cabinet Secretary would cite the funding situation from the UK Government. You didn't dwell on it, to be fair, Cabinet Secretary. As I said, I believe that, whilst we're in a difficult situation at a UK level, which does feed in to the squeeze on your budget here—I think we all appreciate that—at the same time, we do need to address what we can do here to make the situation better.

You mentioned last week the—I think I've got this right—financial capital transaction. You know the term better than me. I've looked at some of the details of this, and I think that you were concerned that the £1.2 billion coming from the UK Government was not exactly as it seemed, because that capital could not be used across the board, but I think there are certain projects in Wales that have utilised that. I think Help to Buy is one of those and, as Lesley Griffiths the Minister said, and rightly said, in 2015, that's a huge boost to the Welsh construction industry. So, while the economic situation is tight, and we do not have as much money here as we would like to have, I do think that the Government has to recognise that the money coming from the UK Government is to be welcomed.

In conclusion, finally, Presiding Officer, I think that there are aspects to this budget that we would welcome, but, overall, I don't think it pays enough attention to the medium and long term. I don't think it does, long-term, set the Welsh economy on that basis—secure, sustainable and competitive—that we would like to see, and that is why we will not be supporting this budget.

I’d like to thank the Cabinet Secretary for his statement today, and also to thank him for the way that he’s undertaken this process of negotiating the budget between our two parties. I’d also like to thank my colleague Adam Price for leading the negotiations on behalf of my party. It’s true to say that there are a number of things that Plaid Cymru and the Government couldn’t agree on, but I am confident that the Cabinet Secretary will be aware that we will continue to scrutinise Government on many of those points of disagreement. But we will also be scrutinising the implementation in those areas where there was agreement between us.

Throughout this Assembly, Plaid Cymru has used our role as an opposition party in a mature and constructive manner for the benefit of the people of Wales. As part of the agreement between Plaid Cymru and the Welsh Government, we have managed to secure over £210 million of additional expenditure, which means that we have secured almost £0.5 billion from the beginning of this Assembly. This will deliver real improvements to the lives of the people of Wales and will set the foundation for a more prosperous future for our nation.

This agreement includes £40 million for improvements to mental health services, such as perinatal mental health support, new investment in medical education in north Wales, additional nurses, and investment in linking our nation by making improvements between north and south. And very importantly too, there is a pledge to take steps as a result of Brexit, particularly a portal that will support businesses as they try and cope with the mess that is to come and the mess that’s already been created.

The Cabinet Secretary has confirmed today in his contribution that we are in further negotiations with the Government to discuss the additional funding that was announced by the UK Government, and as Nick Ramsay has already mentioned, I would want to know about the financial transactional capital. This isn’t a new element, but the scale of the additional funding emerging from this is relatively new, and I would appreciate further detail from the Cabinet Secretary on the nature of that funding.

The truth, of course, in terms of the broader fiscal position, is that the Welsh Government has seen an annual cut—a year-on-year cut—in its budget since 2010, and it’s likely that further cuts are in the pipeline from London. Last week, we had an opportunity to debate the content of the UK Government’s budget, which was announced on 22 November. I don’t want to use all of my time today rehearsing the content of that budget, but it’s important to understand the economic and fiscal context, and the broader sense in which that budget was announced, and its impact on the Welsh Government budget for the future.

The UK economy is currently growing more slowly than all its economic competitors in the club of advanced economies. By comparing OBR forecasts with International Monetary Fund forecasts for the other G7 economies, the productivity slowdown has limited growth, weighed on living standards, and put the UK behind most of its peers in the G7 group of leading industrial economies. Britain's economy will also trail the eurozone for each of the coming three years at least, as its growth falls to the bottom of the European Union's 28 member states. The Organisation for Economic Co-operation and Development's forecast for 2018 and 2019 is even below the downgraded estimate issued previously by the OBR, and also highlights how the organisation believes Brexit will weigh heavily on the state's future—[Interruption.] No, I will not give way—economic performance.

It is also important to put on the record that we should all consider the OBR's economic forecasts as the very best-case scenario. They incorporate the impact of any tax and spending measures announced in the budget statement by the UK Chancellor and the effect on economic growth for subsequent years. However, they are forecast based on the status quo in terms of the trading relationship the UK currently enjoys with various markets around the world. The current trading relationship we enjoy with the European Union we know will change. We, of course, cannot be sure today what the nature of that change will be, but I think experience of the last 48 hours suggests that the trading relationship we currently enjoy will not be that of the future. Any changes in that relationship through additional tariffs and non-tariff barriers imposed on UK export will mean those forecasts will inevitably be downgraded further due to the negative effect it would have on the UK's balance of trade.

But crucially, Llywydd, taking away the Brexit dimension, what has become abundantly clear, and what was confirmed in the United Kingdom budget, is that extreme fiscal contraction—austerity—is self-defeating. The last Chancellor of the Exchequer, Mr Osborne, told us that a budget balance or surplus would be achieved after five years of deep fiscal contraction. The OBR tells us that budget surpluses are now not to be expected until well into the next decade. Citizens everywhere, therefore, will rightly ask what on earth all this pain was for. Why have our communities been asset-stripped? Why have essential services been cut to the bone? Why have those with the least paid the price for the mistakes of the few at the top? It is also worth repeating, too, that part of the reason for the UK's failure to produce sustainable long-term economic growth that rebalances the economy and that is spread outside the London city state is because of the refusal of the UK Government to restructure the UK economy in favour of re-industrialisation and prosperity to all parts. The UK is not just constitutionally flawed; again, as we've seen in the last 24 hours, it is fundamentally flawed as an economic construct too.

Before I conclude, I would like to turn to one of the points raised by the Chair of the Finance Committee in his contribution. The actions of the Government don’t always accord with its rhetoric of wanting to run the health service in a strategic and sustainable manner. We are spending a large proportion of the national budget on health services for a very good reason, and very often it’s at the expense of local government. The Wales Governance Centre has estimated that the proportion of Welsh Government revenue funding received by the health service could go up to 56 per cent of the budget if Ministers find the funding required to deal with the increase in demand. We must therefore tackle the structural problems that exist within the health service, such as lack of workforce planning.

But to conclude, Llywydd, my perception is that we must work in earnest to find new ways of raising our own funds within Wales. This nation has recommenced the journey of being a fiscal entity, but there is some distance to travel yet. We must now safeguard our citizens, but also achieve the potential of our nation.

I welcome the Labour-Plaid Cymru budget, and Steffan Lewis gave a list of the changes that he says are due to the influence of Plaid Cymru. The DUP in Northern Ireland has got an extra £1 billion for Northern Ireland out of their support for the Government at Westminster, and Plaid Cymru has managed to redirect £500 million out of the £15 billion that the Labour Government here has to spend. I've got no objection to any of the changes that have been made, because that's what coalition-type arrangements are about, and nobody, therefore, can complain about the way in which the DUP has used its position at Westminster, because it's happening here in Cardiff in the same way. What would be quite interesting to know, of course, is what the Government would have spent the £500 million on if they hadn't been in hock to Plaid Cymru. Then we would be able to have a proper debate on priorities, which is what the Finance Committee recommended.

We need to know much more about the Government's priorities and how they conform to the spending plans that they've announced. In this context, I would like to thank the Chairman of the Finance Committee—who speaks for me in this respect if in no other—for the exemplary way in which he's chaired the committee, and indeed the unfailing courtesy of the finance Secretary in his appearances before us towards all Members.

There is a certain air of unreality about these budget debates, as I pointed out in my speech on the draft budget, in as much as the finance Secretary is constrained by the expenditure that is inevitable. The scale of discretionary spending is actually quite small, although that should increase in years to come, when we start exercising our power over devolved taxes and also have a relatively limited but nevertheless important power to borrow for spending on capital projects. But what has happened in this budget, by and large, is that the health budget has been increased at the expense of everything else. That, I suppose, in a way, is inevitable as well because, as we know, health inflation is greater than the rate of inflation generally. We have an ageing population and, with advances in medical science, more conditions become treatable, people live longer, so there is inevitably going to be a huge increase in the health budget at UK level and in the Welsh budget.

So, I have enormous sympathy with the finance Secretary in his difficult task of having to reconcile all the claims upon him. But it is interesting that some budgets have been cut by much more than others. The environment budget has taken a particularly big hit of something like 15 per cent in real terms, whilst the health budget has gone up only by a small amount in percentage terms, but nevertheless, as it's part of a very large budget, by a significant sum—an extra £166 million.

All that is very welcome, but what is troubling about the health service in Wales is not so much the amount of money that we're spending on it, but the laxity of some of the health boards in what they do with the money that they're given. We know the problems of the deficits that are in existence at the minute, particularly in Hywel Dda and Betsi Cadwaladr. Betsi Cadwaladr bumps along; two years ago it had a significant deficit, that came down, and this year it looks as though it's going up again. So, we don't seem to be making a great deal of progress in that respect, and until we get the problems of the heath boards that are in special measures or targeted intervention properly under control, this is going to be an intractable problem for the finance Secretary.

There are other issues that I think we should turn our attention to. I've been particularly interested to look at the amount of money that is spent on enterprise zones. I think enterprise zones are a very good idea, and they do have a capacity to kick-start the economy in areas that have got otherwise very long-term problems. But when you look at how many jobs have actually been created or safeguarded relative to the amount of money that has been spent on them, we have to ask ourselves whether this is value for money. That's not to say I want to cut off these sums, but what I would like to see is that we get more bang for our buck, as it were.

To take the Ebbw Vale enterprise zone, for example, ignoring the vast costs of the Heads of the Valleys road development, which would be included in the expenditure in that area, if you look back to the pre-2016 position, we had about 400 jobs in total that were created or safeguarded in Ebbw Vale at a cost of nearly £20 million. Now, I don't think that's terribly good value for money. If you go through the rest of the enterprise zones as well, some are doing a lot better than others, and job-creation costs are much better in some than others. So, I think we really need to look in greater detail at whether we are getting value for money out of these projects, because although the idea behind them is certainly laudable, we need to ask ourselves whether they are actually performing for us.

One other element of the budget, which Nick Ramsay referred to a moment ago, actually, was about prevention, and of course there is tremendous pressure to spend upon current needs, but if we are to cut costs or to improve performance in the longer term, we have to take the longer-term view. We discussed this with the future generations commissioner in the Finance Committee, and I know it's difficult for the finance Secretary—I'm not unaware of the conundrum that he has to solve—but we do need to spend more upon looking ahead to future problems and anticipating them, hence reducing the future costs that are going to press in upon us.

We've had the usual complaints about so-called austerity, of course, and I've many times responded to this in the Chamber. With the national debt now approaching £2 trillion compared with the £1 trillion that it was only five years ago, nobody can credibly say that the Westminster Government has been doing anything other than spraying money at the economy. The problem is that, very often, it's been spent on the wrong things. Again, I've gone through that in the past and I don't intend to repeat myself today.

But, the borrowing requirement this year is nearly £50 billion compared with £83 billion last year. The national debt is 85.6 per cent of GDP this year—that's 3 per cent higher than it was in 2015-16. The national debt is still rising, and it is rising as a proportion of GDP, and that means, looking ahead to future generations, that this is a millstone around the neck of children and grandchildren and beyond. Of course, borrowing goes up and down over the cycle, but we're now in the tenth year after the financial crisis of 2008 and we should really have made much more progress in cutting borrowing than we have done, because you can't just borrow forever.

Venezuela is now discovering this, as Zimbabwe and many other countries around the world have, and indeed Britain discovered in the 1970s. Indeed, after every Labour Government, there is usually to be found a significant economic problem that has to be solved. I don't absolve the Conservative Government from some of the blame here, but the truth of the matter is, as Nick Ramsay pointed out in response to Mick Antoniw earlier on, that after 13 years of Labour Government to 2010, they'd squandered the legacy that was left by Kenneth Clarke; after the first Blair administration, they took off the brakes on spending, and the result was, instead of mending the roof when the sun was shining, we found we had great gaping holes in it at a time when the rain was coming down in torrents after—[Interruption.] I will, certainly.

That point is just factually incorrect. The actual percentage of borrowing compared with GDP at the time of the financial crisis was 37.2 per cent—about 0.2 per cent higher than it was when Labour came into Government in the first place. The only difference was the increase to 50 per cent, which was effectively the steps taken by Gordon Brown to actually save the UK economy from collapsing. What you've had now, as a result of austerity measures under this Tory Government and the cut-back in capital investment, is the fact that the percentage is now 88 per cent.

I think, if the Member examines the record, he will find that, under the first Blair Government, they reduced the proportion of debt in GDP up to 2001, and from 2001 to 2010 it rose steadily every year until the explosion after 2008. I haven't got the figures with me today, but I'm happy to send them. He'll find them in the House of Commons library research paper, which gives them. So, that's the reality of the background to the budget.

We can't just magic away the macro-economic problems that the UK faces. If we attempt to do so, then we will make things even worse for us in the future. What we need to do is to grow the economy. In the United States now, there are plans for substantial reductions in corporation tax. This is being mirrored in France, in Germany, in Italy, in Switzerland, and this is what we need for Britain. I'm very much in favour of devolving corporation tax to Wales so that we can take our own course in this respect as well, but I appreciate that that's a debate for another day. So, whilst I welcome the budget, I recognise the limitations that the finance Secretary is bound by, and I think there are things that we can do to tweak things at the margins, but his scope for action is very little more than that. 

Whilst supporting the Welsh Government budget, I acknowledge the budget is inadequate for the needs of Wales. This is not a criticism of either the finance Secretary or the Welsh Government; this is due to the inadequate block grant from the Tories in Westminster. As the year progresses—and we've heard some of it already—I expect Tory calls for, 'More money for health', 'More money for education' and then to oppose any cut backs that are being forced upon local authorities by the reduction in their block grants whilst facing increasing need for social care and children services.

Austerity is failing as an economic policy. That should surprise nobody because it's always failed; it's been tried many times and it's failed every single time. But for the Conservatives at Westminster, it's not an economic policy, it's an ideology: shrink the state; reduce public expenditure; reduce public services; make people who can financially afford it use the private sector.

The failure to distinguish between capital and revenue expenditure is another major problem. To put in terms that the Conservatives will understand: revenue is the equivalent of borrowing for food and energy, and would be a problem for any family. Capital is borrowing to buy a car and a house: as long as it's affordable, it's something many of us have done and currently do. Releasing money for capital is wonderful in terms of your economy: it reflates the economy; it gets people back into full-time work. Everyone benefits, and it's just releasing borrowing for things like building houses and other revenue-raising construction projects. Building things and getting the money in from building them: it works, it's always worked. Unfortunately, instead of building things for use, we've been building war machines in the past in order to reflate our economy at the end of a recession. Fortunately, we're not in that sort of world now so let's learn from the past and reflate the economy. 

On the detail of the Welsh budget: additional money for the health service, reductions for everyone else. Health continues to increase its share of the Welsh budget. When giving evidence to the Finance Committee, Michael Trickey of the Public Policy Institute for Wales identified when it would get to 60 per cent of the total expenditure in Wales. He was not prepared—despite me asking him—to extrapolate as to when it would reach 100 per cent of the Welsh budget.

Of course, 'For health, see hospitals', seems to be common belief, and that more people treated in hospital is a sign of success. I disagree with that belief. We need to reduce hospital demand—that's something that was said by the future generations commissioner—by promoting positive lifestyle choices: no smoking; increased exercise; reduce obesity levels and drug taking. Also, improved housing quality, improved diet and increased social care. People are ending up in hospital just because their social needs have not been met, and as such, they become ill. What we want to do is ensure that we have fewer people going into hospital. 

Finally, I would like to highlight some key issues identified by the Climate Change, Environment and Rural Affairs Committee. In order to demonstrate how the Wellbeing of Future Generations (Wales) Act 2015 informs the budget process, the Welsh Government should incorporate in its impact assessment process an assessment against its well-being objectives. The Welsh Government must, in discussion with Natural Resources Wales, keep under review the capacity of NRW to fulfil its duties. I think this is one of the things—you can't keep on taking money out of organisations like NRW and keep on expecting them to do the same and more. If they're going to have less money, then they have to have less things to do. Expecting them to do more with less is only going to end up with lots of things not being done very well and things being missed out.

Scrutiny of the Welsh Government draft budget responsibilities and statutory functions is something that has been carried out by the climate change committee, and the Welsh Government should work with national parks to explore how they can raise revenue. This should include support to develop plans to realise their potential for income generation. Far too often, parts of the public sector seem to think that income generation is something that shouldn't happen, that everything should be met by Government grants. We're not in that sort of world any more. People need to look at how they can raise money from what they do. What can they do to raise more money? What can they charge for? What charges can they increase? Increased charges are never popular, but I think if you want to keep a service going, then if the amount of money coming in from grant is going down, the only thing you can do is increase charges. When times are hard, difficult decisions need to be made.

As I've only got 28 seconds left, can I make a plea? Many children in Wales get free breakfasts and free school meals during school term time. Unfortunately, when it comes to the summer holidays, they get six weeks of no free breakfasts and no free lunches. This causes huge strain upon many families in my constituency, and I'm sure in many others. I would like to see an attempt made to extend these free meals for pupils outside term time, especially during the long summer holidays, which cause so much upset to so many parents. 

Cabinet Secretary, I welcome the involvement of the standing committees in the way that the scrutiny of the Welsh Government budget is conducted, although it has to be said that following the money has proven, as ever, a challenge, as moneys have been moving around budget allocations, and have, in some instances, made direct year-on-year comparisons extremely difficult.

I do want to make it clear that I understand the budget is finite, and I also note the funding allocated to the NHS has increased in real terms by 0.5 per cent on the previous year. However, at the current run rate and scale of practice, this is merely enough to keep the operation going. My concerns revolve around how the money within the health service MEG is deployed, and whether that deployment enables positive outcomes in line with the Welsh Government's programme for government.

I have three specific areas I wish to raise with you. My first concern lies with general practice. You'll be aware that the Cabinet Secretary for health is putting an enormous emphasis on dealing with ill health at a community level—it reflects what Mike Hedges has just been saying—in order to prevent referrals to secondary care, where the costs tend to rise exponentially. This also ties in to the findings highlighted in the interim report from the parliamentary review of health and social care, which are a good indication of the likely recommendations they're going to make.

The benefits of using doctors, nurses, physiotherapists, occupational therapists, chronic condition nurses and mental health specialists in a community setting are not merely financial. We know that it is beneficial for the patient to be seen locally, treated locally and followed up locally, yet by any measure the Welsh Government budget is not putting enough resources into supporting primary care. The lowest percentage share of the NHS budget in any home nation is borne by Welsh GPs. In 2015-16, general practice received only 7.24 per cent of NHS spend, but they are expected to do the bulk of the heavy lifting in terms of the prevention of ill health and the management of co-morbidity.

The Welsh Government must also recognise that many GP surgeries have inadequate facilities and find it very difficult to offer a plethora of clinics and services in conditions that are either archaic or simply too small for the demand that they face. In my own constituency, I have surgeries saying that they cannot offer some of the vital preventative care clinics that are required because they simply do not have the room and the staff. The Welsh health estate needs financial support to bring it into line with modern-day requirements, and this is a point that the Health, Social Care and Sport Committee picked up on in our scrutiny of the budget. So, Cabinet Secretary, could you please tell us how GPs are going to be able to offer such transformational services with such a small share of NHS resource?

That brings me to my second area of concern. We've all made a political commitment to enable the parliamentary review to take a long hard look at what needs to be done to transform our NHS into one that's capable of facing the challenges of the future, but I don't see how the costs of this are allowed for in the budget going forward. In fact, reviewing evidence from both the Cabinet Secretary for health and you, it was very clear that the 0.5 per cent increase provides barely enough to keep the wheels turning, so how can you expect health boards and GP practices to transform the way that they work without clear funding streams to enable and support that transformational programme? Recommendations 1 and 2 of the health committee report are very clear on this.

The third area I would like to briefly raise with you is the mental health ring fence, which will increase by some £20 million in 2018-19. However, despite being ring-fenced since 2008, the ways in which health boards have interpreted the ring fence are a cause for concern, with precious funding being absorbed by carrying out routine treatments. For example, if somebody with a mental health issue needs a new hip operation, it comes out of the mental health budget, and I cannot see the logic or fairness in that. So, Cabinet Secretary, I wonder whether you have any plans to review all of the ring-fenced areas of the Welsh Government budget to see if they are still absolutely applicable and doing what they were intended to do in the first place. 

Finally, Cabinet Secretary, a general point in regard to health board deficits. All of the foregoing is impossible if these health board deficits continue. In answers to written questions you've said there's no bailout for health boards, and yet the reality is that we need to look at how those health boards are funded because I'm not, and I want to make this crystal clear, I'm not asking for any more money for the NHS out of that Welsh Government budget, but what I am questioning is the deployment of the current funds, including the 0.5 per cent increase, and whether or not we have to make, or you have to make and your colleagues have to make, some tough decisions about where we have to move money from temporarily in order to effect that transformational change. Otherwise, we will not have a health service that can keep those wheels on and keep going for the people of Wales in the future. 

I'm very pleased to speak in this debate on the draft budget for 2018-19. It does mark a new era for this Assembly in terms of our powers and responsibilities with the new fiscal framework, and it's good to see this include the outcome of the reform of the Barnett formula as it applies to Wales at long last, resulting in an additional £69 million over this draft budget period. And the Cabinet Secretary has embraced these new fiscal responsibilities with characteristic skill, but I'm chiefly supportive because of the robust approach he's taken to ensure that Welsh Labour commitments are prioritised in this budget. This approach is underpinned by his commitment to promote social justice, tackle inequality and support our public services against a backdrop of austerity and cuts.

He's been vocal and consistent in his opposition to austerity, but in this respect he's not alone. Last year, economists from the International Monetary Fund warned that austerity policies can do more harm than good and warned that increased inequality hurts the level and sustainability of growth—and how right they were, with the Office for Budget Responsibility forecast downgrading growth over the coming years. 

The negative fiscal impact of austerity is clear. Our Welsh Government budget has been cut by 7 per cent over the past decade. Despite this, our Cabinet Secretary has crafted a budget that secures the Welsh Labour manifesto commitments on health, housing, social care and education, and negotiated a two-year budget agreement with Plaid Cymru, with economic and social benefits for Wales. 

The scrutiny of this draft budget has been subject to an enhanced budgetary process, resulting in a report from the Finance Committee, of which I'm glad now to be a member, which is both fair and firm, and it's good to see many shared priorities emerging that accord with the Welsh Government's draft budget. In this context, I want to focus on two areas of shared priorities, social care and housing. 

I was surprised there was no reference to social care in the UK budget, although it featured as a key issue in their March statement when the UK Government actually passed the buck to local government in England to up council tax to meet the deepening gaps in social care. In contrast, the Welsh Labour Government has been consistent in its support for social care over the past eight years of austerity and reducing budgets. Recent figures published by the UK Government show spending on health and social services in Wales is 8 per cent higher than in England and growing faster than in any other part of the UK in 2016-17. And, in the draft budget we're debating, social care will receive an extra £42 million in 2018-19, rising to £73 million in 2019-20. That's welcome, but I'm aware of two areas of policy development that are relevant: firstly, the opportunity to integrate health and social care and follow through the findings of the parliamentary review on health and social care due to be published in the new year. The Health and Social Care Committee makes this a key recommendation in the draft budget report, calling for fully costed plans to take forward transformational change in health and social care.    

Thank you very much for taking the intervention. You mentioned earlier the March statement in which the UK Government, of course, committed £2 billion towards social care and, of course, this place will have had the Barnett consequential from that. Would you like to see that used primarily in the integration agenda or some other aspect of social care? 

I was going on to say that a very important vehicle for integrating health and social care is, of course, our integrated care fund. And, in fact, going back to parties working together, that was devised by three parties in the Assembly in the fourth session—Labour with Plaid Cymru and the Welsh Liberal Democrats—when we were negotiating a budget agreement. It did result in a bespoke fund to integrate health, social care and housing, and that's been sustained over the past four years, delivering outcomes throughout Wales, standing at £50 million in this budget. I think it's also important that we look at who pays for social care, and I look forward to engaging the Finance Committee's inquiry into the cost of social care for an ageing population.

I want to finally say that also Mark Drakeford has focused on housing. Last week, we had a robust debate, and again this afternoon, in terms of our commitment to the abolition of the right to buy. But across this Chamber there was recognition that addressing housing need must be a priority. Let's contrast the two budgets that affect us today. Philip Hammond's budget did nothing for social housing, but Mark Drakeford has released capital as part of a £1.4 billion investment towards building 20,000 homes and, crucially, he's committed an extra £10 million to tackle homelessness in each year. I welcome that, as did Shelter when they came to my constituency and discussed local housing needs. So, we must recognise that this draft budget is going to support our public services, secure the money from the UK Government to lift the pay gap, protect our most vulnerable people in Wales and boost the economy by investing in our infrastructure, especially in social housing. 

Chair of the Health, Social Care and Sport Committee, Dai Lloyd.

Thank you very much, Llywydd. With just over 49 per cent of the whole Assembly budget falling in the health sector—some £7.3 billion of a budget of £15 billion—then, naturally, members of the health committee scrutinised the budget very enthusiastically in terms of all the funds spent in this sector under the new system that we’ve already discussed. May I thank my fellow Members for their work and the clerks and researchers for their support?

There was a substantial evidence-gathering process from June onwards—in-year financial scrutiny with the Cabinet Secretary, and then, through September and October, written and oral evidence from all health boards in Wales. In October, we took evidence from the WLGA and the ADSS, who appeared in committee, and, in November, we took additional evidence from the Cabinet Secretary for Health and Social Services and the Minister for Children and Social Care—they all appeared before the committee.

A number of themes emerged: transformative change is the main theme. Transformation of the service is central to the long-term success of a financially viable NHS, alongside funding to lever this change. If this does not happen, we will remain in a position where additional sums of Welsh Government funding are being used to maintain current delivery models, without any transformative change. The Cabinet Secretary told us about the additional investment of a further £450 million in the Welsh NHS over the next two years. These allocations to the NHS must be used to lever long-term change.

The committee’s recommendation is that the Welsh Government should ensure, following the publication of the parliamentary review of health and social care in January of next year, that it fully costs plans to take forward transformational change in terms of health and social care. Additional funding for the NHS must be premised on delivering change. The Welsh Government should identify ways in which transformation and transition funding is prioritised and made available for NHS organisations from within existing budgets.

Turning now to health board finances, we know that the largest proportion of the Welsh Government’s funding for the NHS in Wales goes directly to the health boards, and the committee sought to examine the current financial position in detail. This year, we have focused specifically on health boards. We note that the ambitions of the National Health Service Finance (Wales) Act 2014 have not been fully realised by all NHS bodies. It’s very disappointing that four of the seven local health boards have noted a deficit in at least one of the past three years, and it’s a cause of concern specifically that the Betsi Cadwaladr health board and the Hywel Dda health board have reported a deficit each year from 2014 onwards.

The Welsh Government should therefore review the current methodology of setting health board budgets and publish its findings. We know that the Health Foundation has said that the health service in Wales is facing the most financially challenging period in its history and, therefore, seeking savings of some £700 million, as has already been mentioned. The Welsh Government should develop an all-Wales efficiency programme in order to ensure that local best practice is rolled out across all services throughout Wales.

Funding for social care is crucially important and we should ensure that sustainable, quality social care should be provided. We mentioned in our recommendation that we need a whole-systems approach in terms of health and social care. That must be planned year on year so that additional funding is available for social care and so it is sufficient to reflect increasing demands. Losing social care will mean damage to the health service as a whole.

Turning to sport, the committee was surprised to see the most recent change to the Welsh Government portfolios. I have no time to go into the detail, but just to note that it moved from one portfolio to another. As has already been mentioned, we should prioritise capital investment for primary care in the community and ensure that we enhance capacity in terms of buildings in the community in order for multidisciplinary work to take place and new models of care. The Welsh Government should also undertake a further review of the mental health ring-fenced funds to assess whether it has led to effective and appropriate expenditure on mental health and ensured improved outcomes for patients. The Welsh Government should also look at the way the UK Government funds prisoner health, because we don't receive half enough funds for that.

To conclude, we need to take into account the substantial amount of money spent by NHS Wales on agency staff, and the Welsh Government should commission a review of all the anomalies and perverse incentives across agency and bank arrangements.

Therefore, I'd like to think that the most detailed scrutiny ever on the health budget is going to bring about the necessary changes in expenditure of that budget to improve health and social care services for the people of Wales. Thank you very much.

As the January 2009 Institute for Fiscal Studies publication, 'The public finances under Labour' stated,

'Labour entered the current crisis with one of the largest structural budget deficits in the industrial world and a bigger debt than most OECD countries, having done less to reduce debt and—in particular—borrowing than most since 1997.'

In terms of Keynesianism therefore, they broke the economic cycle. In 2010, the Conservative-led coalition inherited the highest budget deficit in peacetime UK history. But, as every debtor knows, you can't reduce debt until expenditure falls below income. Those high-deficit countries that rejected austerity got it in full measure. Thanks to the hard work of people across the UK, however, the deficit here is down by over two thirds, falling to a level last seen before the financial crisis. But we still need to get our debt down—not for some ideological reason but because excessive debt undermines our economic security, leaving us vulnerable to shocks.

As a senior Bank of England official warned last week,

'Britain cannot afford to borrow more without jeopardising the country's financial stability'.

Now, although £1.2 billion more is coming to the Welsh Government from the UK Treasury, significant Welsh Government funding into communities that are lagging behind has not borne fruit. As the Joseph Rowntree Foundation report released yesterday states:

'Across the four countries of the UK, Wales has consistently had the highest poverty'.

After the Red Cross highlighted the need to ensure financial provision for preventative services, referred to earlier by my colleague Nick Ramsay, I asked the Finance Secretary in October what consideration he'd given to financial provision in the context that community-driven development at local authority level mobilising individuals, associations and institutions to come together and build on their social, cultural and material assets, putting them at the heart of decisions, will prevent care needs from becoming more serious and therefore save money for public authorities. In reply, the Cabinet Secretary agreed with me about the need for all public services 

'to make sure that, when people are involved with public services, they are not regarded as problems to be solved, but as joint participants in the business of bringing about improvement.'

That was the Secretary's quote. He added:

'local authorities that seek to engage their citizens in that positive way are likely to be able to make greater impacts with the budgets they have, particularly at the preventative end.'

However, widespread concerns have been raised that this budget takes us in the opposite direction. In your draft budget deal with Plaid Cymru, you agreed to ring-fence Supporting People funding and increase it by £10 million annually for two years. But a subsequent letter to local authority chief executives revealed that local authorities would be given spending flexibility across Supporting People and four other non-housing related grants, meaning that the Supporting People funding is not guaranteed to be protected. If the Welsh Government now removes the funding ring fence and merges the Supporting People grant with other non-housing grants, we would no longer be able to understand how much is being spent on housing-related support services in Wales, or to hold Welsh Government Ministers to account over this.

Representing housing associations and third sector providers, Hafan Cymru has therefore called for the reinstatement of the ring fence and protection of Supporting People funding. Welsh Women's Aid state that plans in this budget to effectively remove the ring fencing of Supporting People and violence against women, domestic abuse and sexual violence grants will very likely result in the dismantling of our national network of third sector specialist services that provide life-saving and life-changing support.

In the interests of access and inclusion, the Community Transport Association has called for an end to short-term funding cycles, which prevent charitable operators planning for the future, a review of the concessionary fares formula to prevent their financial loss, and budget support for cross-departmental working, which recognises that they are increasingly providing health and social care services, not just transport.

In this debate last year, I warned against a £5.5 million Welsh Government cut to the charity Family Fund and the impact that this would have on the most vulnerable families with disabled children. When the Family Fund presented at the last meeting of the cross-party group on disability, they told us that the number of grants awarded to families had fallen from £5,429 in 2015-16 to just £875 this year, and that the majority of families without grant support said that there was no other support available to them. Well, this is both morally and financially irresponsible, and I urge the Welsh Government to reconsider.

I listened earlier to Nick Ramsay's question, which was: what is this budget setting out to achieve? And I think that's been answered, certainly from these benches, and the benches on this side of the Chamber, in delivering the Welsh Government's programme. But also, I would say what it is setting out to achieve as well is limiting the damaging effects of his Government in Westminster. That is part of what it is setting out to achieve.

I speak having been a councillor for 10 years and having sat through many budgets in the last 10 years. Through consultation with members of the public, you are able to get an idea of where to cut, but nonetheless, it is incredibly hard to sit through a list of cuts over which you have no control. But, one of the things you are able to tell yourself, as a councillor in Wales, is that it is much worse to be a councillor in England. I think that is one of the credits that this Welsh Government has had over the past 10 years.

The UK Government has had a golden opportunity. I live in a different political world to Neil Hamilton; I just don't understand where he was coming from. And Mark Isherwood seemed to engage in a brilliant piece of doublethink whereby on the one hand he waxes lyrical about austerity, and on the other he calls for more targeted spending. But the UK Government—

Will you give way?

Yes, of course.

Were you not listening? Did you not hear me say that what I was proposing would save further money for the Welsh Government and local services—money that should be helping the people who actually need it?

There's no point getting angry about it. I heard what he said, and I think some of what he said should be directed towards the UK Government, actually. I think that some of the things that Nick Ramsay said reflected that, too. We can only do what we can do, and what we want to do, if we have the resources given to us by the UK Government. I'd say to Mark Isherwood: come and take a walk around Caerphilly; come and see the direct impacts of UK Government cuts and see those things that the Welsh Government has done to limit the impacts of those cuts.

I've received correspondence from constituents, particularly Sheila Jones, who has pleaded for AMs not to pass a budget that makes any further cuts to public spending. But you have to act responsibly. I understand my constituents' frustration with ongoing austerity, but the blame for that cannot lie—cannot lie—at the door of this Government. I think the Cabinet Secretary has done superbly well to deal with the resources at his disposal.

On the other things—and I again return to Mark Isherwood—perhaps the way things are done can be better within a limited budget. Universal credit, for example, is a policy that is non-devolved, but the botched introduction by the Tory UK Government is having a very worrying effect on our communities. The UK Government needs to take mitigating steps to speed up universal credit payments to avoid unfair sanctions over Christmas, but, unlike some who want to devolve for the sake of devolution, I don't believe it's for the Welsh Government to use its budget to clean up the mess that's been created by the UK Government. If the Welsh Government were to take on administrative responsibility for benefits and welfare policy without the necessary additional funding from Whitehall, it would potentially worsen the situation by imposing new financial burdens—[Interruption.]—on an already stretched Welsh Government and create unrealistic expectations of more generous payments in Wales.

Thanks for giving way. I'm just getting my head around what you said a few moments ago. You seem to have been saying to your constituent that you think it's right that the Welsh Government should not spend money it doesn't have and, therefore, act responsibly, but you're quite happy for the UK Government to borrow as much as it wants, so long as the money comes down the line to you. That doesn't seem to be a responsible argument to me.

Well, that's not a responsible representation of what I said, and what I said is: we are operating within a UK Government budget context in which it has cut back mercilessly, and those merciless cuts have fed back to the Welsh Government. I think that Nick Ramsay knows very well that's exactly what I just said.

I will be supporting this budget this afternoon, because I have every confidence in the Cabinet Secretary. The budget that he has put together under these circumstances is true to Welsh Labour values and reflects the programme for government and does all it can to reduce the impacts of the UK Government strategy. This budget agreement with Plaid Cymru ensures financial stability for Wales over the next two years, something that is much needed, given the ongoing austerity, and it's for these reasons I'll be voting in favour of the budget today.

If I could initially respond to Steffan Lewis, who chose not to take an intervention from me earlier. When I was listening to him, he was speaking with great confidence about what will happen in 2020, or what will inevitably happen in 2021. I just think he needs to consider he was referring to forecasts, and however august those bodies are, whether they're the Treasury or the OECD or the OBR, they are just forecasts. The OBR itself admits that it's only 90 per cent sure that growth at that time will be somewhere between -1 per cent and 4 per cent, and the OECD and the Treasury that he quotes, of course, told us there was going to be a severe recession immediately were we to vote to leave the European Union. That has not come to pass.

I would, though, congratulate him and Plaid on the extent to which they've been able to influence the Welsh Government by using their numbers here. It's only a shame that they haven't used their numbers in Westminster to give support to the UK Government there in return for extra money for Wales, which I'm sure would have been welcomed across this Chamber.

I also note that when he talks about the implications of potentially leaving the single market for the budget, his view and mine would be very different, but what I hadn't taken account of is that the First Minister's view was very different just in the session earlier. Again, on this subject, he contradicted himself in answer to questions. When responding to Leanne Wood, he stuck to his usual formulation—and he was responding in English—that he wanted 'full, unfettered access' to the single market, the very carefully crafted phrase he has developed. I've never heard him say in English that he wants to stay in the single market. He's been very careful not to. Yet, when he answered Rhun ap Iorwerth in Welsh, the translation I heard in my headphones at the time, and as I've confirmed with translation since, was very clear. He said:

'What is the answer? Well, it’s quite clear: the United Kingdom should remain within the single market'.

He then went on to say he wanted to leave the EU in a way

'which keeps us in the single market'.

Why is it that the First Minister says one thing in Welsh and another in English? Is it because he wants to disguise the extent to which he is not respecting the result of the referendum? Just as we consider the budget today, the first Minister says, 'We respect the result of the referendum, but—.' Today he has let the cat out of the bag and revealed that Labour's true position is to want to stay within the single market, notwithstanding the result of that referendum. 

Cabinet Secretary, this is the first budget in which you have tax-raising and tax-altering powers, and I want to focus the rest of my remarks on the taxation arrangements for Wales as you announced them today. You've emphasised the progressive principles you hold and how you are applying these through the land transaction tax—both through the residential thresholds and rates but also, I'd emphasise, through placing a greater burden on commercial property purchases at the higher rate than is done either in England or in Scotland. With the extent that the economic strategy of the Welsh Government relies on city deals and enterprise zones, which necessitate a certain level of private investment, often from outside Wales, I'm concerned that the Cabinet Secretary's principles run counter to the Government's wider economic strategy. Setting the rate on higher-band commercial properties 1 per cent higher than England and 1.5 per cent higher than Scotland is not going to help us secure private sector investment. It may tip the decision to invest in Wales compared to other parts of the UK. Does this Cabinet Secretary want to strangle the growth in Cardiff commercial property that his colleague Ken Skates is trying to support with an enterprise zone? It seems there is a lack of joined-up thinking between the two departments, whose strategies may be running in direct opposition to each other.

Now, today I detected a difference, at least in the tone from the Cabinet Secretary, to his previous responses to me on the issue of stamp duty and first-time buyers. Before, I had the impression that he was considering how and to what degree he might respond to the UK announcement around first-time buyers and, in particular, whether he would allow a similar concession, potentially—perhaps not so large but nonetheless a concession—within Wales. And as I've said, again, this is a particular issue for first-time buyers in Monmouthshire, close to the border. Could he clarify his position on that, or has he, essentially, decided that he's going to stick with the LTT rates he had before?

He rightly observes that the amount of the block grant will be influenced and corrected for any potential surge in first-time buyer purchases encouraged in Wales through this, and I wonder what he will do with the additional money that he may get for future years, and I ask that he at least considers again that rise to 6 per cent in that commercial stamp duty rate, just because of what that could do to disincentivise internal investment in Wales. The bigger danger, perhaps, though, is if Wales were to take a similar approach to income tax in future, I fear that the Cabinet Secretary's exposition of his progressive principles are such that he will allow, to keep his hands on the tiller, the consequent increases in taxation, which would undermine Welsh competitiveness and keep us on the economic slow lane.

I will do my best to avoid repeating any points that have already been commented on. Can I, first of all, thank the Cabinet Secretary for his report and the sober introduction to it, which recognises the severe impact of UK cuts on our budget? In paragraph 1.5, you say that despite ongoing and severe cuts to the Welsh budget as a result of the UK Government's damaging austerity agenda, the Welsh Government has continued to protect public services from the worst effects of austerity.

You did, in your outline, also refer to some of the circumstances that were particularly affecting the Welsh economy as part of the UK economy: wages are falling and are lower now than in 2010, wage growth is the lowest in Europe bar Greece, economic growth and productivity is the worst for a century, UK investment is lower than every other major economy apart from Greece and Portugal, and the Brexit shambles is causing uncertainty for business and people. And we've recently discussed the absolute shambles over the DUP affair.

Can I contrast your report with that of Her Majesty's Treasury, which, in the economic context, does actually confirm most of those points about the ongoing, long-term economic downcast reporting that's taken place? But then, contrast it with the less-than-sober introduction to the report, which says,

'The United Kingdom has a bright future. The fundamental strengths of the UK economy will support growth in the long term' and

'the Budget will ensure that every generation can look forward to a better standard of living than the one before'.

It makes you wonder whether that report was written in two parts—the first part by the Chancellor and the second part by people who actually knew something about what was happening in the economy.

One of the points I really wanted to talk about, though, was the impact on the public sector and the public sector pay cap. It particularly affects my constituency of Pontypridd because we have in the region of 15,000 public sector workers in my constituency, the overwhelming majority of whom have not had a wage increase of any consequence whatsoever for the last decade or so. The net effect is that, by 2022, as a result of the UK Government's austerity programme, nurses and firefighters will be £3,400 per annum worse off in real terms, librarians £2,100, paramedics and dieticians £3,800, the police £450 a year worse off, and prison officers £980 a year worse off. One of my constituents, Shirley Nicholls, a Welsh NHS nurse for 30 years, says this:

'I feel we are being squeezed year after year by austerity. Many cannot make ends meet. Many are leaving. Morale is low. It seems it is only the poorest who are being made to pay for austerity. I fear that if Westminster does not end the pay cap and bring austerity to an end, our NHS and public services will not survive.'

I'd ask you to consider, Cabinet Secretary, whether there is more we can do to put pressure on the UK Government to make statutory pay body awards binding, because that seems to me to be the fundamental flaw—that we set a body to determine pay, but the UK Government then refuses to actually pay that.

Can I then refer to a number of matters within the Welsh budget that I'd like to give some consideration to? The first one is the community facilities programme. I very much welcome the additional £6 million and further increases in subsequent years to this programme. It's a programme that has had a significant impact in my constituency, with the Ely Valley Miners sports project and the New Life Church, which provides a whole range of community support programmes. All of these, which have leveraged in other money, seem to be a very effective use of the tackling poverty priorities of the Welsh Government, and I really wonder if there is additional funding that further consideration might be given to, on how that could actually take place.

The second point I'd ask you to consider is really on the section you have in the report on the metro, and what the impact might be in respect of access to European funding, but also access to borrowing in respect of the European Investment Bank, and the impact this might have on some of the projects we want within the metro, such as the proposed new line to Llantrisant in my constituency.

Can I make one further final point, and that is on twenty-first century schools, welcoming the £1.4 billion investment? But it's really to congratulate Rhondda Cynon Taf council, who've already invested under this programme £200 million, and have plans for a further £300 million, with a massive structural transformation of education facilities as a result of this. It'll mean that, over a decade in Rhondda Cynon Taf, the council will have invested in educational facilities almost £0.5 billion. That is an amazing success, I think, and should be recognised.

One final point, then, on new taxes, Cabinet Secretary. I wonder whether in your consideration of items for new taxes there might be an opportunity now to give consideration to resurrecting the asbestos Bill.

I won't be voting for this draft budget. I won't be abstaining. I'll be voting against. This budget is bad.

Wales still has tuition fees to the tune of £9,000. Are we supposed to be grateful for that? It's really not good enough. There are still people in Wales being evicted from their home because of the bedroom tax; the most disadvantaged in our society being thrown out of their homes for the crime of having an extra bedroom. There are not even properties for people to move into. Those parents whose children live with them part of the week, or part of the time, have to give up the extra bedroom, and as a result, in some circumstances, they lose contact with their children because of that tax. There's nothing in this budget to address that.

I'll tell you what, though, there's always money for Labour's friends in the Bay, who seem to earn their living from other people's misfortune. 

Will you take an intervention?

No. The amount of money also being wasted is staggering—staggering. Tens of millions of pounds on questionable land deals, questionable business supports—that's where the money goes. And, I'm tired of the dependency culture in Wales. I want to see a budget that demands we stand on our own two feet. I want to see a budget that leads to people being empowered to live their own lives. With a sovereign Parliament, we could do much more, but this Government doesn't want extra powers to change things really.

Wales is a great country and we deserve a great Government, but that's not what we've got. We have a First Minister who's being investigated and his future is in doubt, and there's hardly any new legislation being introduced. Plaid Cymru has been involved in the budget and has made improvements, but only a small fraction of it; 99 per cent of this budget is all Labour, and that really shows.

I'll also be voting against the Conservative motion because, with respect, they've not got a leg to stand on. They've bunged £1 billion to the north of Ireland, whilst projects like rail electrification in Wales get cancelled. And even after sending them all that money, they let a party of religious extremists dictate our future with the European Union.

Wales is full of talent, but there's nothing serious in this budget to stop people having to leave our country to make their future elsewhere. It's been clear for years, but this budget only shows it more clearly: the only way to move Wales forward is by moving Labour out of the way.

Presiding Officer, Wales faces a skills shortage. Too many of our young people are not in education, employment or training. It is a sad fact that people in Wales are more likely to lack qualifications than people in Scotland or England. A lower proportion of people in Wales have a degree than any English region, bar the north-east. Educational attainment at the age of 16 in Wales has long been poorer than elsewhere in the United Kingdom, and indeed internationally. Wales has a higher level of functional illiteracy than England, and around half of adults in Wales lack functional numeracy skills.

We need to improve education and training in Wales for our young people, and also extend the opportunities offered to adults, our ethnic minorities, and the disabled. People from ethnic minority background are more likely to fail to achieve functional literacy and numeracy compared to the indigenous community around them. There is a higher proportion of people with no qualifications among those who are disabled. People with learning disabilities are much more likely to lack basic literacy and numeracy than the rest of the population of the United Kingdom.

The Welsh Government has declared that it aims to instill in everyone a passion to learn throughout their lives, and to inspire them with the ambition to be the best they possibly can, and yet the adult community learning budget will be reduced by £400,000 in 2018-19 and 2019-20. The budget for further education provision will also be reduced over the same period.

Presiding Officer, nearly a quarter of all the jobs open in 2015 were left vacant because employers could not find the people with the right skills and the right abilities to fill them. That is a sad scenario we face because of this Government's policies in the education and skills sector in Wales. We should be doing more now, especially in this Brexit scenario. We need more than 2 million managers—business managers—in the United Kingdom in the next seven years. So, we should be preparing ourselves: our apprenticeships, our skills and our training sector should have fully occupied and senior advisors and officials to teach and learn leadership and managerial skills in Wales to fulfill the vacancies in the United Kingdom, especially in certain areas like transport, education and the agricultural sector, which are devolved, and there's a huge shortage of skills.

We must set targets to achieve our aims. Minister, I think—I've got no doubt in your ability, but I think there is some lack of ambition and some sort of encouragement—. I can't understand. I heard my previous speaker on many areas which he was creating himself in such a way that Labour is not helping this country at all. I do not agree with what he said altogether, but the fact is Labour must invest in education and the training of our young children and young people, able, disabled, and ethnic minorities, which we need to make sure they are the ones who create the economy and money in the future, which we're all saying. And I heard everybody saying that austerity measures and this, that and the other. In true facts, the budget has been reduced by 1p in £1. If you can't survive on £1, 99p doesn't make a difference, but you must learn in life. You must accommodate. Brexit came out of the blue, and the fact is we are not prepared here. In my understanding, we need to invest in our education, our skills and our training sector in Wales and our next generation should be prosperous with only that attitude; otherwise, this budget is not going to fulfill our ambition. Thank you.

There's been some very interesting contributions here this afternoon, and I've listened to most of them, some, I have to say, with interest, and others with disbelief, and I'm not going to make any further comments on which are which. But one thing I will say is that this is a joint budget, it has been agreed between Labour and Plaid, and Plaid have come to the table and put forward things that we could agree with so that we could produce a budget today, whereas others have just simply sniped from the sidelines.

I think that what we really need to do when we're looking at a budget for the foreseeable future is actually marry-up those things or join together policies that will make a difference. I have to congratulate the Tory Government that they have produced a growth industry in two areas: one is food banks and the other is homelessness, because their policies have produced, for the first time in my living memory, a massive increase in food banks. I'm sure that some of you will know that I've been on this planet for quite some time, and I have never seen anything quite like the appeals that are everywhere you turn, whether it's in a supermarket or the local press, on Facebook or Twitter, for donations to help feed people, not people who are out of work, but people who are in work. That's the cost of austerity, and I think it's absolutely disgraceful.

And let's be clear about what austerity really is: it's a political choice to reduce funding in the public sector. When they talk about ideology—they very often do talk about ideology—then we also have to talk about the ideological choice that has been made by a Tory Government in Westminster to cut the expenditure in the public sphere. So what does that mean and how should we link that together? Well, it's fairly obvious that if you reduce public spending in areas like Pembrokeshire, where 25 per cent of the population are actually employed in the public sector, you're also going to reduce the capacity to regenerate that area through local spend. It is a fact that, if people aren't working, or if their wages are suppressed because there's been a pay cap, that area will grow and grow in being poor, yet it is the case that the Conservative representatives will come here time and time again asking us to spend more money that we haven't got in those areas.

The other thing that is fairly clear is that, if you bring in universal credit in such a way that people end up owing huge amounts in rent arrears, it will also impact on the ability of those housing providers when they want to borrow money—they become a higher risk. I don't know whether, Cabinet Secretary, you have anything to say on that, but it is the case that the higher the risk that you become to a lender, the higher the cost of borrowing against it. So, when we hear the Conservatives actually saying to us, 'You must build more houses' or 'You must ensure that the housing stock is increased'—if universal credit, which they seem to support, because I haven't heard many of them talk against it, produces a negative impact on those policy areas that they consistently ask us to do something about, then they need to start joining things up. Because the budget doesn't stand in isolation, and Wales is impacted by the austerity that is coming thick and fast from the Westminster Government. When we talk about protecting things, Cabinet Secretary, I'd also ask you, as other people have mentioned here today—when we look at the Supporting People fund, and the fact that I understand that you have quite clearly said that you're going to put all of the money down to local government to make local determinations to save money on red tape, I also ask that you will monitor the spend around Supporting People, particularly in the area of ending violence against women and girls, so that those in most need don't end up not being provided for. 

I call on the Cabinet Secretary for Finance to reply to the debate—Mark Drakeford.

Diolch yn fawr, Llywydd. Can I thank almost all of those who have taken part in this debate, and apologise in advance for the fact that I will not be able to respond to some serious points that have been made?

May I start by thanking Simon Thomas for what he said? I recognise the point that he made about what we want to do for the next year—better transparency, being clear about our priorities and the relationship between those and the programme for government, the lack of data and so forth. There are a number of things that we want to work on, and I recognise that at the outset of my response.

Could I say also that I’m looking forward to the work programme of that committee? There are many things that the committee Chair outlined this afternoon where the Government will welcome that work and take an interest in it—the work that the committee’s going to do on financial transaction capital, the impact of Brexit on our funding, and new devolved taxation. I’m sure that the committee Chair will have heard what Mick Antoniw said about asbestos in that context.

Also, on the new scrutiny process that we have, I know that the committee is going to pursue that and help us to rethink things so that we can do things better in future.

Nick Ramsay, Llywydd—I should have said in my introductory speech that, of course, we are entering the festive season, and, in line with the Conservative Party's interest in tradition, Mr Ramsay has once again dusted down the amendment that the Conservative Party has laid to this debate over many years now. I accused him last year of simply recycling the identical amendment, and he denied that. Indeed, this year, his amendment does come with the additional insult of a split infinitive, which he managed to avoid last year. [Laughter.] But sadly—

Can I just advise you, if you object greatly to split infinitives, please never read Shakespeare or the King James Bible. [Assembly Members: 'Oh'.] 

It's always seemed to me, Llywydd, that readers of Conrad would have a greater grasp of English stylistics than that. However, let me say that there are two big themes that I think have run through the debate this afternoon. I want to say something briefly on both of them. 

The fundamental debate across the Assembly lies in macroeconomic policy. On the one side of the argument, we have heard from a series of persuasive speakers—Hefin David, Mick Antoniw, Joyce Watson, Mike Hedges, Jane Hutt—all of them lined up between the proposition that Steffan Lewis set out earlier in the debate about the self-defeating nature of austerity. On the other side of the debate, we have a rather more nuanced approach. We have the approach of Nick Ramsay, which is to regret the necessity for austerity. So, he regards it as a necessity, but he regrets it and then goes on to give me a series of advice about places where I could spend money we haven't got as a result of the UK Government. The true voice of austerity is to be found much more in what Mr Hamilton had to say and his echo on the other side of the Chamber, Mark Reckless. His impersonation of Marley's ghost as he came clanking across the Chamber this afternoon I thought was remarkable. 

Will the Cabinet Secretary give way? 

Yes, of course. 

I wonder if he can confirm whether the Welsh Government's position is that the United Kingdom should remain within the single market, as the First Minister said in Welsh earlier? 

The exegetical zeal of the Brexit fanatic wanting to pick over individual words in English and Welsh—at least he's bringing that variety to his feast. The First Minister repeated the position that the Welsh Government has adopted since the very beginning, that full, unfettered participation in the single market and continued participation in a customs union would be immensely to the benefit of the Welsh economy, and a sensible UK Government that was interested in putting the needs of our economy first would extend those benefits to Wales, as yesterday it appeared willing to extend them to the island of Ireland. 

What Mr Reckless went on to object to was the fact we intend to raise a small number of thousands of pounds on transactions worth large numbers of millions of pounds in order to make sure that 90 per cent of commercial transactions in Wales either pay no tax at all, or don't pay any more tax than they do today. That's because he shares Neil Hamilton's basic view of economics that the only way to make rich people work harder is to make them even richer, and the only way to make poor people work harder is to make sure that they don't have enough to manage on so that they don't relax onto the benefits of the dole. 

Will you take an intervention?

Yes, of course.

Have you ever discovered where the cross-over point is? 

I haven't, Mike; I look forward to it appearing one day in a report of the Finance Committee where I will be able to pursue it in that way. 

The second big debate on the floor of the Assembly this afternoon has been on health policy, and again there are a variety of views here. I make no absolutely no apology for the fact that this Labour Government goes on investing in our health service every year, that we fill the Nuffield gap, that we make sure that our health service has the resources it needs. Let me break a habit and agree with something that Mr Hamilton said here, because he was right when he said that there are new costs in the health service every year that are simply inescapable. No matter how much we want the health service to move in the direction of prevention, no matter how much we want to be determined that the health service should bear down on costs wherever it can, the fact that we have an ageing population, the fact that there are more things every year that the health service is able to do, means that there are in-built additional costs in the health service, and we face those here in Wales and this Government faces them by trying to make sure that we provide the resources that the health service needs to meet those costs. 

There was a great deal in what Angela Burns said that I agreed with; her contribution was characteristically thoughtful. Of course my colleague Vaughan Gething wants to make sure that we move the dial of the health service in favour of general practice: it's why we have a new £40 million investment fund in the primary care estate. But she will know—she will know from her own direct experience—how difficult it is in the health service, how difficult it is with the public to persuade them to invest in primary care rather than in a hospital service. You mention the word 'Withybush' in Pembrokeshire, and people will come out on the streets because they think there's something to defend. You mention the term 'primary care', which is where 90 per cent of their contacts come, and it's much, much more difficult to persuade people to have the same sense—[Interruption.] Yes. Yes, of course.

Thank you very much, Cabinet Secretary. I absolutely accept the premise that you've just outlined but this is why we have to look at some way of getting some pump-priming. Because if we can actually get those local community services to work and work well—places like Argyle Street; I'm sure it's replicated across Wales—then the public will have much more confidence that they do not need to scurry off to a hospital every time they have a problem.

Well, I don't disagree with that, Llywydd, where we're able to do that. I didn't disagree with what Mark Isherwood said about the need to make sure we position the citizen as a partner in that process, making sure that we work with citizens in the process of change. It is more difficult to do, we know, in practice than it is to say. 

So, on those two big points, Llywydd, you can see that there is a difference of views across the Chamber. In the agreement that we have with Plaid Cymru, let me be clear: I don't regard this as a short-term deal in the way that Nick Ramsay said. I regard it as a significant agreement going on over two years in which we don't agree about everything—of course we don't—but there is a common set of purposes. 

When I'm talking about the longer term, I am thinking about longer than two years and I know that in your heart of hearts as well, Cabinet Secretary, you would ideally like to think longer than two years as well but your hands have been tied by this deal you've had to make. And I'm sorry you don't like my amendment, but I always was a Star Trek fan so I like to split the odd infinitive.

Well, you have boldly gone, once again, in laying your amendment, I know. Llywydd, my hands are tied, not by doing a two-year deal with Plaid Cymru but by the fact that we do not have a comprehensive spending review from his Government, so I don't have a budget for the Welsh Government for more than two years ahead. That is what's making me unable to do anything beyond that.

There was a series, Llywydd, of very specific things raised in the debate. Mike Hedges, I know, is an enthusiast for the SHEP programme and what we're able to do with the £0.5 million we've set aside in each year of the budget to help families during the school holidays. I hope we can do more. I hope we can do more in Swansea.

Can I just clear up one point that's been raised by a number of Members and then I will finish, Chair, and that's Supporting People? Because I know there have been concerns about it. Let me just read out to you two sentences from a letter sent by my colleague, Rebecca Evans, to Bethan Jenkins in clearing up this matter. First of all, the Minister makes it clear that no decisions have been taken as yet as to whether an early intervention and prevention grant will be created in 2019-20. The Minister awaits the evidence from the work that is already going on before coming to that conclusion. When she does come to make determinations there, she says in the letter, regardless of that work, 'I would like to reiterate that, as a result of a budget agreement reached with Plaid Cymru, there will be no cuts available in funding for the Supporting People grant in either 2018-19 or 2019-20', and I hope that those Members who have had anxieties this afternoon will take comfort from that very clear statement. 

The proposal is to agree amendment 1. Does any Member object? [Objection.] I will defer voting under this item until voting time. 

Voting deferred until voting time.