Diolch, Llywydd. Today I lay the Welsh Government’s draft budget before the National Assembly. 

In 2010, the then Chancellor of the Exchequer introduced an emergency budget in which he said that what he called necessary sacrifices would lead to debt falling and a balanced budget by the end of Parliament in 2015. The sacrifices, Llywydd, go on, but the sunny uplands of economic success have moved to 2025 and beyond. Never has the need for a UK Government to abandon the failed polices of austerity been more urgent as the darkening shadow of Brexit looms over this draft budget. The chief economist’s analysis, also published today, shows that Brexit already costs every person in Wales and the United Kingdom up to £400. This Welsh Government’s unremitting efforts to protect front-line services are carried out against those headwinds and those of shrinking budgets and escalating demand.

Llywydd, if the funding available to Wales had simply stood still at its 2010 value, not rising by a single penny, the budget before Members today would have £800 million more to care for older people, to help children get the best possible start in life, to protect our environment and to invest in the future of our economy. If the budget had grown in line with the economy since 2010, simply taking a static share of the national cake, today’s budget would have £4 billion more to invest. And if it had moved in line with the growth in public expenditure, something achieved over the 50 years prior to 2010, the budget in front of Members would be £6 billion higher for those essential purposes. Little wonder, then, that this has been the most difficult budget round yet. As well as the dual challenges of rising costs and spending constraints, our hard-pressed public services face the challenges of rising inflation, unfunded pay pressures and the UK Government’s unilateral decision to change public sector pension funding, transferring a further £300 million of unplanned costs on to Welsh public services.

Llywydd, the failure of the present Chancellor of the Exchequer to initiate a comprehensive spending review means that I have no budget with which I can plan beyond 2019-20. As a result, today, I am able only to publish a one-year revenue plan, for 2019-20 only, and capital plans for only the next two financial years. 

Now, in line with the new procedures introduced last year by the National Assembly, I set out today the major building blocks of the budget—where the money comes from and how it will be allocated to Government departments. Later this month, the Welsh Government will publish detailed spending plans, explaining how individual portfolio Ministers intend to deploy the resources available to them.

This draft budget, Llywydd, builds on the plans we published last year and reflects the second year of the two-year budget agreement between the Government and Plaid Cymru. I would like to thank Steffan Lewis for the constructive discussions, which have continued since the agreement was reached. Building on the measures previously agreed, we will now provide additional capital of £2.75 million to upgrade the Urdd camps at Glan-llyn and Llangrannog. The draft budget also includes £5 million in capital to take forward the results of feasibility studies agreed in earlier discussions. I look forward to joint consideration of those reports between our two parties as they become available.