Dirprwy Lywydd, there is little doubt that Wales and the public services we value so highly face major challenges as we look to the future. It seems the sole focus for the UK Government is the election of a new leader of the Conservative Party and, as a result, a new Prime Minister. We have all heard both candidates make big promises on tax and spending. But, as things stand, we know very little for certain about what fiscal policy a new Prime Minister—and almost certainly a new Chancellor—will pursue. On top of the escalating uncertainty around Brexit, this lack of clarity around the UK’s fiscal prospects creates an unprecedented challenge for us in developing spending plans for the future. In spite of this, I am committed to sharing as much information as possible with stakeholders to inform their future planning.  

At this point, Wales faces the twin threats of the UK Government’s continuing programme of austerity and a 'no deal' Brexit, which could do great harm to Wales's interests. We are now in the ninth year of austerity and Wales is suffering the consequences of damaging Tory policies. We have long maintained that continuing with austerity is a political choice. It is a fact that, in spite of sluggish growth, tax receipts more than cover current public spending. What have we got to show for almost a decade of austerity? UK productivity is barely above pre-recession levels and pay, adjusted for inflation, still remains below 2010 levels. Growth in tax receipts has been sluggish, reducing resources to fund public services. In Wales, if spending on public services had kept pace with growth in GDP since 2010-11, this year the Welsh Government would have an additional £4 billion to spend. To put that into perspective, it would increase our budget by nearly 25 per cent.