The next item on the agenda this afternoon is the debate on the final budget for 2018-19, and I call on the Cabinet Secretary for Finance to move the motion—Mark Drakeford.

Motion NDM6614 Julie James

To propose that the National Assembly for Wales, in accordance with Standing Order 20.25, approves the Annual Budget for the financial year 2018-19 laid in the Table Office by the Cabinet Secretary for Finance on 19 December 2017.

Motion moved.

Thank you, Deputy Presiding Officer. I propose the Welsh Government's final budget proposals for 2018-19 onwards, as tabled before the National Assembly for Wales on 19 December. I would like to pay particular thanks to members of the Finance Committee and the Chair, Simon Thomas, for their careful work in scrutinising this budget. This is the first time for many centuries that we in Wales have taken responsibility for raising a proportion of the funds that we spend on public services. I was very pleased to be able to respond yesterday to the committee's report on the draft budget and to be able to accept virtually all of their recommendations in full.

Despite the challenges that arose as a result of the conflict between the timetable for our budget and the budget of the UK Government, I do believe that the new processes agreed and followed this year have been successful and have been appropriate for scrutinising our use of our financial responsibilities. I look forward to working with the committee to see how these processes can be further improved in the future.

I should also thank the other committees who have published scrutiny reports on the budget in their own areas of responsibility. I would like to officially thank Steffan Lewis for giving his time to meet and to consider the final budget, and Adam Price for continuing with those negotiations more recently.

Deputy Presiding Officer, the wider context for the budget is well known. As the economies of the eurozone and the United States move back towards historic growth levels, the economy of the UK continues to be damaged by foolish austerity policies—policies that have failed. As others grow, the most recent forecast by the Office for Budget Responsibility here demonstrates an economy that is slowing down, not only next year and the following year, but also beyond then, into the future: less growth in production, less development in business, less growth in gross domestic product, less growth in employment and less in tax receipts. The Chancellor, Philip Hammond himself, stated that in his budget speech on 22 November.

Dirprwy Lywydd, that budget quite certainly did not produce a windfall for Wales or go far to put right eight years of resource starvation. Our budget, when financial transaction capital funding is excluded, remains 7 per cent lower in real terms than a decade ago. This Government's job is to use every lever available to us to protect our citizens and services from the damage that austerity brings, and to invest, wherever we can, in creating the conditions of a successful future. That is why, in this final budget, you see for the first time the 105 per cent Barnett multiplier negotiated in the fiscal framework between ourselves and the UK Government. It adds nearly £70 million otherwise unavailable to us.

The progressive but proportionate use we have made of our two new taxes—landfill disposals tax and land transaction tax—is forecast to add another £30 million to our revenue resources over the period of this budget. That is £100 million to help us with the vital priorities of investing in our schools and colleges, creating the health service of the future, building an economy with a real social purpose of providing prosperity for all.

The Llywydd took the Chair.

Would the Cabinet Secretary give way? I'm grateful for what he's just said and, of course, this is the first time we're looking at a budget that has income generation as well as expenditure within it—and that's a positive change for the development of this place. But has he made any estimate of what would have happened on the expenditure side had we not had those seven years of austerity since the election of the coalition Government back in 2010, and what would be the rough shape of the Welsh budget if that hadn't happened?

Well, I can offer the Member two estimates. Had our budget simply remained the same, in real terms, today as it was nearly a decade ago, with no growth at all in the resources to us, we would have £1.1 billion more to invest in this budget than we see today. Had our budget simply grown in line with growth in the economy—something that every Government from 1945 to 2010 achieved, through all those years of Mrs Thatcher, where growth in public services never fell below growth in the economy as a whole, and growth in the economy has been sclerotic since 2010—I believe we would have somewhere between £3 billion and £4 billion more to invest in public services in Wales today than this budget is able to provide.

Llywydd, I want to briefly outline for Members those changes that the final budget has in it, compared to the draft budget I was able to lay in October of last year. The final budget of 19 December shows that, over and above the extra £230 million in 2018-19 and the £220 million beyond that in 2019-20, the NHS in Wales will have a further £100 million, £50 million in each year, to support the work of my colleague Vaughan Gething as he implements the recommendations of the parliamentary review, which have just been discussed here. The final budget also shows additional allocations of £20 million in 2018-19 and a further £40 million in 2019-20 to support local authorities in delivering the services on which we all rely. We are building on the £20 million for homelessness announced in the draft budget by providing an extra £10 million focused particularly on youth homelessness in 2019-20. A further £36 million has been allocated to portfolios in support of ‘Prosperity for All’ commitments, and Ministers are currently working through where this funding will make the most difference.

Throughout the scrutiny of the draft budget, Dirprwy Lywydd, Members have expressed concern about the impact of Brexit. The First Minister recently announced a £50 million European Union transition fund that builds further on the additional £5 million announced in the draft budget for Brexit preparedness as part of the budget agreement with Plaid Cymru. The final budget includes £10 million revenue funding over two years as an initial additional investment in this fund. The fund will run from April 2018 and we will work with partners to develop detailed programmes of support covering a range of interventions.

Llywydd, I will now turn to capital. I’ve been discussing the capital consequentials, including financial transactions, further with Ministers. I’ve also continued to discuss matters of mutual interest with Plaid Cymru. Today, I would like to set out some early decisions on immediate capital priorities that will be formalised in supplementary budgets. Thirty million pounds will be allocated this year in the second supplementary budget to the twenty-first century schools and education programme. That money will be used to support our shared ambition across different parts of this Chamber to create a million Welsh speakers by 2015. It means that an equivalent £30 million can be released from the programme in future years to support capital projects dedicated to supporting and growing the use of the Welsh language in education. Beyond that, and to accelerate the highly successful band B of the twenty-first century schools and education programme, I will allocate £75 million over the next three years in additional capital to the MEG of my colleague the Cabinet Secretary for Education for her to be able to take that programme even further and faster than otherwise would have been the case.

Seventy million pounds in additional capital goes to the NHS across 2018-19 and 2019-20 to allow the Cabinet Secretary for Health and Social Services to press ahead with his consideration of a range of clinical priorities, including the continued support for the new Velindre cancer centre and investment in neonatal services in both Glangwili and Singleton hospitals. Llywydd, in the autumn budget, we received £14.6 million for 2018-19 to 2020-21 for air quality. I’ve already allocated the additional revenue for air quality in the final budget. Today, I can say that we will use that £14.6 million as capital expenditure to assist the Cabinet Secretary with responsibility for this very important area here in Wales. I’m also discussing proposals for a road refurbishment scheme of up to £30 million with the Welsh Local Government Association, which will provide vital new investment in our local roads.

Llywydd, I will make further announcements alongside the publication of the new iteration of the Wales infrastructure investment plan later this spring. This will include funding, supporting 'Prosperity for All’, for the Valleys economic hub as a key part of the Valleys taskforce plan, something that has featured in discussions with Plaid Cymru. Llywydd, this final budget has the services that people in Wales rely upon at its heart. It provides extra investment in our health service and in local government. It takes head-on the challenges we face today in homelessness and in improving air quality. It creates new opportunities for the future by investing in education and in our economy. It does so through the careful and detailed management of our resources, by working with others to identify common ground, and always to pursue the progressive priorities that animate this Welsh Government. I commend it to the National Assembly this afternoon.

Can I thank the Cabinet Secretary for Finance for his statement, and also for the co-operation he has given, both to me during the budget-forming process and with the Chair of the Finance Committee and the members of that committee?

I have to say that I did find your speech a rather strange mixture, Cabinet Secretary, and I would say that it was a little bit like the budget, good in parts and not so good in other parts, in that you did speak about the negative effect you think that the UK Government and its programme has had on the Welsh budget. And whilst I accept that there have been cuts over the last number of years—and we won't go into the whys and wherefores of those cuts—I do have in front of me the written statement by yourself, issued today, I believe, where you speak about the consequentials that have come to the Welsh Government from the UK Government as a result of that budget, which are increasing extra spending within Wales, and which you have allocated in a way that you would expect Welsh Government to do. So, I do think that the overtly negative tone of your contribution was probably more political than it was realistic, but I suppose we are in a political Chamber, so you would expect that.

Now, I don't want to go over too much ground that I set out in the draft budget debate before Christmas. However, back in December, I did pose the primary question, 'What is the Welsh Government budget seeking to achieve?' Is it simply trying to allocate funding to different budgets or is it trying to do more than that to address longer-term challenges and to seek a fundamental economic change to the economy? Now, given the new fiscal powers that Simon Thomas mentioned that are coming to the Welsh Government—borrowing, and, indeed, tax power devolution—I would have thought that the latter should be our goal, as I believe the Chair of the Finance Committee believes. Sadly, I think that this budget falls short of this. Now, I appreciate that it is still early days and those powers are still in the process of transferring, but I would expect the Welsh Government to be looking at ways that those powers can be utilised, and given that by the time of the next budget the Assembly and Welsh Government will have significant extra financial powers, I think that this budget has fallen short in making use of those.

If I can just refer to some of the points that were made by the Finance Committee report on the draft budget, there have been ongoing concerns around transparency, and these are key to some of our concerns. The links between the budget allocations and the programme for government simply aren't strong enough. From 2019 to 2020, we know that there will be a single grant for a number of projects, including Flying Start and Supporting People, and the Finance Committee took evidence from a number of organisations. I think Cymorth Cymru were strongest in their concerns in saying that it becomes increasingly difficult to track the funding that is currently coming through Supporting People under the new regime, and that is a source of concern. Things seem to be going backwards in some areas in terms of transparency, rather than forwards.

If I can turn to the big part of the Welsh Government budget, the health service, which you mentioned additional funding for—as a result of UK Government consequentials—in your written statement today. Of course, we all welcome any additional funding for our NHS. Welsh Conservatives have, of course, been calling for this for a long time—back, in fact, when there were some real-terms cuts being made to the Welsh health service budget during the last Welsh Assembly. However, I do agree with points that have been made by Mike Hedges and others that you do have to strategically plan where that money is going and the sort of benefits that you're going to get out of it. And there's no doubt at all that there is certainly a perception, at the very least, that money that has been funnelled into the NHS over the last months and year or so—is that going to actually develop proper transformational change within the NHS or is it going to be absorbed by some of the budget holes that our health boards have been suffering from? I think that the general consensus out there is that currently the latter is probably more likely to be the case. So, that won't lead to the sort of transformational change that we want to see.

Prevention hasn't been mentioned, and yet it is mentioned in many debates that we have in this place about the health service. If, at the same time, you're saying that prevention is a very important part of keeping future health costs down, it doesn't seem to make sense that local government is facing severe cuts, which will then impact on leisure centres and will impact on sport, the other part of the health brief, which, ultimately, is going to lead to a problem with promoting prevention—it's not going to improve it. So, as I said at the start of my contribution—

Would you also agree that removing the ring fence for things like Supporting People and the Welsh independent living grant will also further risk damaging prevention and intervention?

I do, yes. I think that a lot of things that the Welsh budget aspires to do, and says that it wants to do, are good, but when you look into the greater detail, that simply isn't there.

I realise I'm running out of time, Presiding Officer, but at the start of my contribution I did say that I thought that this budget should be one that looks at creating a transformational change. I think we want something that is positive, that creates a vibrant economic situation moving forward, and makes those proper links between the new Welsh Government fiscal powers and the ability to develop the economy in a way that we need to, particularly with the challenges we face over the months and years ahead. I don't think that this budget meets those criteria, and the Welsh Conservatives don't either. That is why it will be no surprise to the Cabinet Secretary that we will not be supporting this budget.

It's a requirement, of course, in a Parliament where the Government doesn't have a majority—that was true for the majority of the period that we were discussing—to come to an agreement. That asks for an element of humility and it also asks for a constructive attitude in terms of the opposition parties. That's part of a robust democratic process in a mature Parliament. I have been very pleased to make my contribution to that process, but may I also thank Steffan Lewis, as the Cabinet Secretary has done, for his contribution?

May I quote a few examples of the range of positive, innovative policies that the party has succeeded in getting as part of the Government's programme through that kind of collaboration? The Cabinet Secretary has already talked about the preparatory fund for Brexit, and Steffan had been pushing that for a long time after seeing the impact that the same kind of scheme was having in the Republic of Ireland. The Government has now, of course, decided to build on the foundation that was established with the draft agreement with a much more ambitious programme.

Steffan had also been making the case for a long time for creating a specialist clinic for perinatal mental health, and he succeeded, through the medium of the agreement and budget negotiations, to change policy and to change minds. Isn't that also an example of positive, constructive politics?

Ultimately, why do we all come into this place? It is to make Wales a little bit better than the condition it was in before we came here. That's the truth. Of course, there is a role for opposition. I did my fair share of that for nine years in Westminster, and there were many important things to oppose. But the reason that I came to this place, rather, was to build and be constructive—not just to oppose, but to be constructive, and that means that opposition parties have to act responsibly—where there is common ground, that we try to build on that common ground. That doesn't mean that you don't state clearly where the Government is wrong. There are things in the budget that we don't agree with, and that's why we are abstaining. But through the negotiations, we have been able, for example, to have the largest ever investment for the Welsh language. The Cabinet Secretary announced today two tranches of £30 million for schools, and £20 million of revenue funding as well in the draft budget: the largest ever investment in order to meet the aim for the middle of this century.

There are local, regional things—getting rid of the tolls on the Cleddau bridge, which is very important for that area. Transport—having the first commitment with regard to the metro for Swansea bay and the western Valleys; extending the metro in south Wales to areas such as the Rhondda Fach, which doesn't have modern public transport at the moment; and, of course, investing in our roads as well, which is very important: for example the A487, and the A470. We are seeing investment in all parts of Wales. When I saw the announcement yesterday about a transport hub worth £180 million for Cardiff—several parts of Wales would like to see that kind of investment. We have to have investment throughout Wales, investment in national institutions—the football museum for Wrexham, which is a part of Wales that doesn't have a national cultural institution. There hasn't been one since Edward Owen, who, after the First World War  for some years, ran the heritage commission from his home in Wrexham. Since then, there hasn't been a major cultural institution in the north-east, and that's not healthy for our nation. I'm pleased to see the commitment in terms of capital for the football museum, so that we can give a clear message to all parts of Wales that we are a one-nation Wales. We need to reflect that in our priorities.     

I don't begrudge Plaid Cymru the opportunity to laud their influence on the decisions made by the finance Secretary at all. I totally agree with Adam Price's statement that, where one can agree with other parties, it's very desirable that you should do. And, of course, I've spent a fair share of my years in politics opposing very vigorously the policies of Plaid Cymru and the Labour Party and the Liberal Democrats, but I'm very happy to work together on various things too, and that's a good thing.

This budget is the first one that begins to join the dots and connect, therefore, revenue raising with expenditure, and that will lead, I hope, to more responsible Government and to an enhanced reputation for this Assembly. I strongly support my Plaid Cymru friends' work over the years to bring about more devolution of taxes in Wales. I'm very much in favour of that because that does give us, then, the opportunity to have real budget debates in this place where priorities will differ between the different parties.

The debates in the past have all been about how we spend the money that we're given. We can't influence the size of the pot in the first place. The tax policy in future will increasingly inform these debates, which is an excellent thing. I said in the last debate that, actually, what we're talking about here today is quite a small portion of the total budget, because most of the budget is not discretionary, it has to be spent on health, education and big budget items. Plaid Cymru have managed to secure their priorities for about £500 million of it, and I very strongly support the things that they want to spend the money on, particularly on the Welsh language. I think that's a vital necessity to help to achieve the Government's objective of 1 million Welsh speakers by 2050.

But there is a certain air of unreality about these budget debates that the finance Secretary again perpetuated today by starting off talking about austerity. Anybody would think that the Government at Westminster has actually been cutting the amount of Government spending in the last seven years, whereas the truth of the matter is that Government spending has doubled in total in the last seven years. The national debt is now approaching £2 trillion. I hope the Chancellor of the Exchequer is going to provide the money for a very large party for us all when we do actually hit that £2 trillion figure. It would mean that we could all celebrate it with him. The idea that this Conservative Government has pursued a policy of austerity is absolute nonsense. The Chancellor has recently relaxed the date yet again when he aims to balance the budget. Between now and 2021-2, Government spending is planned to rise by £30 billion over the plans that were laid out just a few years ago.

Of course, we could all follow the policies of the Governments of Zimbabwe and Venezuela, by taking the brakes off spending altogether and spend as though tomorrow never comes. But the trouble with socialism is, eventually, you run out of other people's money to spend, which has been the excuse of the Wilson Governments in the 1960s and the 1970s and the Callaghan Government—[Interruption.] I give way, of course, to Mike Hedges.

All I would say, of course, is that Franklin Delano Roosevelt did exactly that: the New Deal that got America out of the recession.

Yes, well, what brought America really out of the recession, of course, was the war. There are various ways in which you can raise economic activity, but I don't think that war is necessarily the most attractive of the options.

But tomorrow does eventually come. We're spending £50 billion to £60 billion a year on debt interest in the UK. If we take Wales's proportion of that, that may be £2 billion a year. Would we rather spend £2 billion a year extra on the health service or on the holders of national debt? Actually, what the Government has done is to nationalise a great part of the national debt in the last few years, because the Bank of England has actually been buying the bonds from the private sector. Monetisation of the national debt of that kind cannot continue indefinitely without the same kind of inflation implications that have consumed countries like Venezuela or Zimbabwe.

Although I think the Government is wrong nationally in Westminster in many of its priorities, its overall policy on public expenditure, in my view, has been lax not austere and they've been stoking up problems for the future. We make a great song and dance in this place about the future generations Act. I think it's a very good thing, in principle, to think of the impact of our decisions today upon the generations to come. What we're doing, of course, is to shuffle off the cost of repayment of the debts that we are incurring today on future generations, and I don't think that future generations will thank us for that. But, of course, they don't have votes today, so we don't need to worry about it, and we won't be here when they do vote—at least, I won't be; it's unlikely.

I think an air of responsibility is one that we should have in any budget debate. Sadly, I fear for the future if the kind of speech that the finance Secretary has made today, when the Welsh Government really does have the ability to raise taxes and to make spending decisions and to make borrowing decisions over a much greater area, as it now has the power to do, falls to be made, because that way, I think, lies the kind of economic ruin that has consumed so many Labour Governments in my lifetime.

I'm speaking today in support of the final budget as laid down by the finance Secretary last month. This budget shows the commitment of the Welsh Government to invest in the vital public services communities across Wales rely on. This achievement is rendered even more remarkable when we remember the damaging impact of the current UK Government's policies. The Tory obsession with their failed austerity agenda, supplemented by their economic mismanagement and their bewildering approach to Brexit has inflicted lasting damage on our economy. The consequence of this has been a decade of decline in the money available to Welsh Government for investment in Welsh public services. Tory decisions in Westminster mean that this has shrunk in real terms by 7 per cent between 2010-11 and 2019-20. That's over £1 billion less for Welsh schools, hospitals and communities. If we explore some of the detail of this Welsh Government budget, the contrast is further strengthened.

As a former teacher, education spending is important to me. I welcome the maintenance of the pupil development grant, which I know first-hand strengthens interventions to support both looked-after children and those eligible for free school meals. Similarly, the Welsh Government is putting its money where its mouth is, not just talking about school standards but earmarking £50 million to drive this up. The extra £40 million for twenty-first century schools is also an important badge of the Welsh Government's commitment to our young people. I'm proud that Cynon Valley is the constituency that has benefited most to date from this policy, with wide-ranging improvements to primary and secondary schools, including many new builds and also a brand new further education college campus. Some may say that schools are just bricks and mortar, but learning environment really does impact upon achievement, and will allow our young people every opportunity to aspire to achieve to their best.  I'm sure I do not need to remind Members of the vandalism caused in England by Michael Gove when he scrapped Building Schools for the Future. Two different paths in Government, two different stories of investment in education.

Similarly, the Welsh Government has allocated additional funding to deliver infrastructure improvements and policies that will strengthen our economy and ensure Wales can compete in the years ahead. The £173 million from reserves for the south Wales metro offers us the potential to transform our public transport network. The creation of the Welsh Development Bank and extra capital investment for Superfast Cymru is also crucial to our economic performance. In contrast, the Tories in Westminster are again failing Wales, as shown, for example, by their inactivity on the Swansea bay tidal lagoon and their reneging on railway electrification. 

I also want to take a moment to talk about the interventions included in the Welsh budget for Supporting People. I know there's been much discussion around this grant, so I welcome the Welsh Government's commitment to continuing this funding. I met with a service user group, organised by Supporting People national advisory board just yesterday, and I've visited several projects in my constituency, so I know just how crucial this line of funding is. 

Would the Member give way on that point? I'm very grateful, and I agree with her; I've met also with Supporting People projects, and I think we share a similar value in ensuring that the money is available. She'll know there's been some confusion or discussion, at least, around how the money gets spent. Does she at least agree that we need to monitor now how the money is spent to make sure that it is being used for the purpose of tackling these real issues in our communities?

Well, what I would say in reply to that is that we're currently doing an investigation in the Public Accounts Committee, and we've taken evidence from members of the Welsh Local Government Association who say that removing this ring fence will actually allow more flexible levels of support. So, I do think it's something that we need to really keep an eye on, but I don't think there's undue cause for concern at this stage.

Elsewhere, interventions around homelessness, domestic violence and childcare are important social policies. The impact of the UK Government's economic incompetence and calculated callousness, caused by policies like universal credit and the public sector pay cap, have led to social problems such as the spike in food bank usage. Again, the Welsh Government and Welsh Labour are choosing to do things differently.

I want to close by commenting on what I feel are some of the most exciting elements of the budget. These are the new land transaction and landfill disposals taxes. With both, it is good to see the Welsh Government seizing the chance to use its newly devolved powers. In particular, proposals that will mean 65 per cent of all homebuyers in Wales will pay no land transaction duty are a real boon to working class communities across the country. I look forward to the future detailed work from the finance Secretary on additional taxation proposals over the coming period.

The Welsh Government, in developing these budget proposals, have demonstrated their commitment to getting the best deal for Wales, to supporting Welsh citizens, Welsh services and the Welsh economy. I'm proud to support this budget today.  

Whilst supporting the Welsh Government budget, I acknowledge that the budget is inadequate for the needs of Wales. As the Cabinet Secretary said during his speech, there is between £1.1 billion and £4 billion less in expenditure than we actually should have if we'd even just stayed level, in one case in cash terms, and the other one in terms of real-terms increases in line with the movement in the economy. So, we can either move with the economy or we can be just moving with the way things are going. We haven't and we're short of this money. It would be an entirely different budget today if the Cabinet Secretary had somewhere between £1.1 billion and £4 billion to distribute. 

We'd have a better debate because we'd be saying, 'Should we increase health by more or should we increase education by more, or should we increase social services by more?', which I think is a debate we'd all enjoy having, instead of saying, 'Well, we're going to give more money to health so we're going to have to take money off local government.'

Of course, I understand why opposition Members are making this point—you may have a right to make it, and they certainly have every right to—. [Interruption.] Sorry—wishful thinking. And certainly, Plaid have every right to make it. But, you know, Labour fought the 2010 manifesto on pretty much the same financial projections that are accepted by the Conservative Party. You did fight the 2015 election on a slightly different basis, but not radically different in terms of the amount that's spent. Now, in 2017, obviously, you did fight very differently. But, you know, we wouldn't be in a radically different position if there'd been a Labour UK Government re-elected in 2010, so this point is a little odd, in my view.   

Well, I think if we'd had Jeremy Corbyn and John McDonnell elected in 2017, I don't think there's anybody in this room who doesn't think we'd have a radically different budget.

The block grant from the Tories in Westminster is inadequate. As the year progresses, I expect the Conservatives to call for more money for health, more money for education and to oppose any cutbacks that are being forced upon local authorities by the reduction in their block grants, whilst facing increasing need for social care and children's services. Austerity has failed as an economic policy. It's always failed as an economic policy. It's been tried many times; it's failed every time.

We talk about history—Neil Hamilton was. Let's talk about what happened in Chile when we had the extreme right-wing Government there. What did they do? They followed the Chicago school. They did exactly what they said in terms of cutting back and they took their economy to the brink of extinction. It's an ideology to shrink the state sector, reduce public expenditure, reduce public services and make people who can financially afford it use the private sector.

Again, we don't distinguish between capital and revenue. Capital expenditure is good. It's good for the economy, and it's what people do in their own lives. That's one of the issues that we used to have Margaret Thatcher telling us about: you have to run the economy like a housewife. Well, people do: they borrow for cars, they borrow for their mortgages on money they can afford to pay back. Why we have not got, as a Welsh Government, the same powers that exist with every local authority in Britain, including Rutland, to borrow prudentially—. Our limit is set by the Chancellor. The rules we work under are more severe than those of any local authority in England, Wales or Scotland.

I think that we need additional money. The health service needs additional money. But it keeps on having additional money and because we don't have additional money into the system—. Michael Trickey of the Public Policy Institute for Wales recently identified when it will get to 60 per cent of the total expenditure in Wales. I asked him if he'd tell us when it would be 100 per cent. He didn't, but it's sometime around about 2050. 

More people in hospital is treated as a sign of success. We need to reduce demand. We need to promote positive lifestyle choices: no smoking, increased exercise, reduced obesity levels and drug taking. We also need to improve housing quality, improve diet and increase social care. That will help. I'll just take one thing like type 2 diabetes, where one of the major causes is being overweight or obese. We need a campaign driven by primary care professionals to actually try and get people, if they've got type 2 diabetes, to go on a diet in order that they can get their weight down and stop having it.

Finally I'd like to highlight just one thing: Natural Resources Wales—is it adequately funded? Is it funded enough to be able to carry out all the functions it's being asked to? If it isn't, then we have two choices: give it more money or ask it to do less.

Llywydd, in the draft budget debate, I commended the Welsh Labour Government's support for social care over the past eight years of austerity and reducing budgets, and I'm glad to start by focusing on that priority again today. I think it's worth recording again today, and reminding Members, that health and social services spend in Wales is 8 per cent higher than in England. I think in the context of this final budget debate today, it has been useful to have the report and statement on the parliamentary review of health and social care, showing opportunities for transforming our health and social care provision in Wales. It was good to hear the positive comments from the review team. Wales has got good things happening: prudent healthcare and the Social Services and Well-being (Wales) Act 2014 as examples.

I have spoken of my support for the integrated care fund, which actually was crafted by parties across—certainly three parties across this Chamber. The ICF stands at £50 million. It's sustained in this budget with an increase in capital. This fund actually, I think, does help to provide the seamlessness that is needed at the point of using services, which, of course, the review is talking about.

I just want to mention the involvement of the third sector in the delivery of the integrated care fund, clearly contributing to the preventative agenda, as shown in Glamorgan Voluntary Services.

Thanks, Jane, for giving way. I agree with what you say about the future generations legislation. I think, in principle, it's a great piece of legislation, but the Finance Committee did have major problems in proving how, actually, the budget was really being affected by the future generations legislation and vice versa. I know that, if Steffan Lewis was here, he'd probably be making that point, so I make it for him, but would you agree with me that that needs improvement?

Well, it was very helpful, when we met with the future generations commissioner, that she looked at very practical examples of, for example, the preventative agenda, and pointed to the integrated care fund, as part of that, fitting very well into the aims of the future generations Act.

But I just continue to say that, as a result of third sector engagement, we've got co-location of a third sector service, with the Vale Community Resource Service at Barry Hospital, and that results in the streamlining of referrals and social prescribing. Of course, those are the examples that we need to give, which also will help respond to the review.

It is very important that we address the question of who pays for social care, and I was pleased that the Cabinet Secretary included Professor Gerry Holtham's proposal to explore a levy to support social care as part of the four new tax ideas. I hope that this will be pursued, even if it isn't a new tax option that will be tested with the UK Government. Gerry, of course, commented recently on this in the context of increased spending on the NHS and the pressures.

The Cabinet Secretary made housing a priority in his draft budget plans, approved by the Assembly, of course, and in the draft budget, there was of course additional capital and revenue investment, including £20 million to tackle homelessness, and I do welcome the additional £10 million to target youth homelessness. Again, a clear priority of this Welsh Labour Government. This budget is about priorities and principles and I'd like to commend the finance Secretary on his approach to our new fiscal powers. It's good to learn that the impact of these new fiscal powers provides an additional £17 million revenue as a result of the permanent funding floor, and £30 million as a result of decisions taken with regard to income from devolved taxes. Capital spending will also receive a boost as a result of our extended borrowing powers and also, of course, we have that welcome capital injection announcement today.

When we received evidence from the Office for Budgetary Responsibility director, Robert Chote, in the Finance Committee in December, he commented positively on the approach taken by the Welsh Government in setting the rates and bands of the new land transaction tax. Of course, following the announcement by the Cabinet Secretary that more homebuyers will benefit from his changes to land transaction tax, with people buying homes in Wales for less than £180,000 paying no tax under the changes to LTT and the taxes devolved in April, Robert Chote reflected on Wales nudging the system more in a progressive direction. This is consistent with the Cabinet Secretary's aim to make tax fairer and contribute to a more equal Wales, and I welcome this evidence of putting principles into practice with our important new tax fiscal powers in Wales.

So, I want to finish by adding to the statements made by the Cabinet Secretary and colleagues today on the fiscal impacts of austerity. It's disabled people, single parents and women who've been amongst the biggest losers under seven years of austerity. And since the coalition Government imposed austerity in 2010, of course, we resisted those very early cuts, but those cuts have risen to over £1 billion over the past eight years. This Welsh Government has provided a shield in Wales to mitigate against austerity and the cuts. So, the Cabinet Secretary has unveiled a new budget for Wales, reflecting the Welsh Government's new tax and borrowing powers. He's using these new powers to deliver the priorities that will benefit health, social care, education and housing, and underpin the economy in a fair and robust way, and I commend this budget.

I've already made it clear that I'm voting against Labour's broken budget. This is a budget from a party that is out of touch and needs to be out of Government.

We've all seen, over the past few months, the kind of party that you are. Our proud nation is being dragged through your mess and it has to stop. You like to try to convince people that you're a party of kinder, gentler politics, but what am I being asked to vote for here? More green fields around Cardiff to be trashed; more trees to be chainsawed in Roath Brook in unnecessary flood prevention; more environmental sites around Newport to be tarmacked over; and more millions being lost on very questionable—questionable—land and business deals.

With this budget, can we go to the people in Blaenau Gwent, in Gwynedd, Merthyr and the Rhondda and say that this is a real and serious plan to improve living standards? It seems everyone else has forgotten those areas since the Conservatives pulled the rug from under their feet. Are we finally going to do something about it with this budget? Can we take this budget to Welsh-speaking communities and say that this is going to celebrate and protect our language properly? Can we take this budget to entrepreneurs and say, 'Be creative, make your good idea happen, grow into successful companies'? The answer is 'no'.

This is a broken budget from a broken Government. It doesn't fix the genuine problems people have. It won't lead to an end to the housing crisis. It won't put food on people's tables. It won't end talented people having to leave Wales to make their fortune. If we had a sovereign Parliament, we could have a Government making laws in all areas for Wales and in the interests of everyone in Wales. That's the real solution—a sovereign Welsh Parliament legislating in the Welsh national interest. When that day comes, we'll really see change. Diolch yn fawr.

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

Diolch yn fawr, Lywydd. Well, budget debates are always interesting for the way that they expose ideological differences across the floor of the Chamber. I think we'll remember Neil Hamilton's contribution, a man for whom austerity has not nearly gone far enough, who regards the UK Government as lily livered and living in an era of gross overexpenditure, and in which every investment the Government can make becomes a drain on future generations. I wish he could have met the pensioner who came to my surgery in Ely just before Christmas to explain to me that the house she lived in had been built 100 years ago by a Government after the first world war determined to build homes for heroes to live in, that the road that she used to get back and fore to it was a road created by public expenditure, that the electricity, the gas and the water that she relied on were only there because earlier generations had decided to invest in the infrastructure that allowed her to go about her daily life, that, when she'd been ill before Christmas, she'd been treated in a hospital that earlier generations had laid down, that, when she'd left hospital and had been told that she needed to take exercise, she was able to go to a leisure centre built by a Labour council here in Cardiff 30 years ago, and that, when her grandson will go to a secondary school in Ely, it will be to a new secondary school produced by this Government. For all of those things, the future of her children will matter. For Mr Hamilton, every one of those things was a waste and something that is a drain.

If the finance Secretary is giving way, that is a complete perversion of the argument that I made in my speech. It's not that any of those things are undesirable, it's just that we have to live within our means in the real world, and you can't forever and a day borrow to pay for things that you can't afford.

But, Llywydd, everything that I have mentioned was created by borrowing. All of those things relied upon the willingness of previous generations to borrow to invest in the future that we enjoy today, and we have a similar obligation to do that for the people who will come after us.

Now, I don't suppose that Nick Ramsay, for a minute, goes along with the arguments that Mr Hamilton put out, but he doesn't know how to respond to the investment that this Government makes in the health service. He can't make up his mind whether he wants to welcome it, or whether he wants to say that the money isn't being used wisely. He wants to complain about severe cuts to local government in Wales, when in fact budgets in local government are going up under the budget that's in front of this Assembly this afternoon. He asks us to celebrate the investments made by the Chancellor on 22 November, and, of course, we're determined to use every penny that we get from the Chancellor as wisely as we can. But the capital money that came to us on 22 November leaves us only 20 per cent lower than we were a decade ago, rather than the third lower than we were before he stood up.

Thank you for giving way. I welcome the money that has come in to the Welsh Government from the UK Government, as you did yourself in your written statement. So, I was just pointing out that your speech was overtly negative. I'm all for a sense of balance, and I know you agree with that, Cabinet Secretary, but also I would appreciate that you recognise the difference between real-terms increases and cash-terms increases; they're quite different.

Of course, Llywydd, I welcome the fact that we are only 20 per cent worse off rather than 30 per cent worse off, and that's why we're determined to make the best use we can of every penny that we have.

On the other side of the Chamber, of course, I welcome the comments made by Adam Price. Of course, we are here to work together in a constructive manner when we want to make a difference for the people of Wales. That's the way that people with ideas for the future can come together and work on those areas where we can see the impact that they will have in the future. I look forward to having future discussions with Steffan Lewis on the details of the Brexit preparedness fund, and to working collaboratively to see how we can use that funding in a more effective manner.

Can I also welcome, of course, what Vikki Howells, Mike Hedges and Jane Hutt said, each one of them illustrating the fact that what this budget sets out to achieve makes a difference in the daily lives of people in all parts of Wales? It's a budget, as Jane Hutt said, for priorities and principles: the progressive principles of this Government, the priorities of the people here in Wales. It's a budget that I hope this Assembly will endorse this afternoon.

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

Voting deferred until voting time.