4. Statement by the Minister for Finance and Trefnydd: Future Outlook for Public Spending in Wales

Part of the debate – in the Senedd at 5:12 pm on 16 July 2019.

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Photo of Rebecca Evans Rebecca Evans Labour 5:12, 16 July 2019

I'm not going to pretend there is good news in terms of Welsh Government's budget, which has been going down year on year. Just three facts from Mark Reckless's contribution—well, one from my statement, and two from his contribution. The fact from my statement is that 50 per cent of the Welsh Government's budget goes on pay. Mark Reckless tells us wages are going up year on year; Welsh Government budget is going down year on year, so I'll leave Mark Reckless to do the maths in terms of what that means for the pressure on Welsh Government and the difficult choices that we have to face.

The chief economist has provided a report, as he will do again this autumn, which we'll publish alongside our draft budget, and he takes the longer look. The latest report contains a range of important conclusions, including that Brexit continues to weigh on growth prospects for Wales and the UK as a whole. The severity of the impact will depend on the form that Brexit takes, and the dislocation associated with the process of leaving, and it's likely that Wales will be disproportionately hit by a hard Brexit. Analysis undertaken by the OBR implies that the assumption of a prolonged period of fiscal restraint should remain at the core, central scenario, and under the lower scenario, which is included in the report, the Welsh Government would only recover to its 2010-11 level by the end of the next decade. So, that takes a longer look, and, again, there's not a lot to be particularly joyous about in that as well. So, I'm sorry if the Member thinks that it's a whinge, but, unfortunately, I'm sharing some facts with colleagues that I think will help us in terms of our deliberations as we set our forthcoming budget.