7. Welsh Conservatives Debate: Welsh Government Funding

Part of the debate – in the Senedd at 4:32 pm on 27 November 2019.

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Photo of Nick Ramsay Nick Ramsay Conservative 4:32, 27 November 2019

If you're actually saying that you don't want more money to come to Wales and you want us to suffer from the poverty that we've got, I don't think you really mean to say that. [Interruption.] I'm not going to let you in again. I don't know whether you're trying to get up again. 

Look, I welcome the fact that the fiscal framework means there is an uplift in the money that we receive and I think that is better than the previous flawed Barnett funding formula that was given to us. I will be frank—I probably would agree with you on this, actually—I think that, on the Barnett formula, longer term, there would be a better way of funding Wales and many of us have had those discussions in this Chamber. But as things stand at the moment—and I'm afraid to say it again, in case you jump up again, Rhun—the fiscal framework is delivering more money. And I hope that that—. [Interruption.] I'm sorry this has worked you up so much. I hope that the additional money will be invested in Wales in a way that will make the economy more sustainable and will deal with poverty. There you are, you see, I was getting there eventually, so I hope you're happy now. 

The UK Government has committed an additional £790 million over and above the block grant for growth deals across Wales. The Welsh Government's budget will increase by £593 million above the 2019-20 dateline. The latest spending round also includes an increase of £80 million to the capital budget, which has already been set for 2020-21. As a result, the capital budget will be 2.4 per cent higher than in 2019-20, and funding from the UK Government is actually at record levels.

And yet, when you look at the funding situation in public services in Wales, such as the NHS, that money doesn't seem to be being passed on. Wales is facing a deficit of £97 million in 2018-19. Demand pressures continue to increase and also, of course, there are new demands on the NHS, such as mental health services. That's putting extra pressure on the workforce, who do an outstanding job under challenging conditions. I think we need to see in the NHS a more sustainable, longer term, multi-year funding plan. We often talk about the importance of that, but it doesn't actually seem to happen in practice. 

Welsh Conservatives welcome the £385 million that has been pledged to the health service, as well as the £195 million to education and £20 million to capital projects, which has been pledged recently during the election campaign. And we know that there's going to be—if there is a Conservative UK Government after the election, at least—over £30 billion extra for the NHS across the UK, which means that here in Wales we will receive a significant uplift in that part of the budget.

But, of course, getting that money isn't enough—it has to be passed on. We know that in the case of the NHS particularly that hasn't happened over a considerable length of time. If you look at the details of NHS spending, taking oncology, for instance, there is a serious shortage of cancer specialists in Wales—I've just been listening to the previous debate, of course, on pancreatic cancer. We've only had a 7.7 per cent increase in consultants since 2013, compared with a 25.4 per cent increase in England and a 25.4 per cent increase in Scotland as well. Vacancy rates here are persistently high.

So, it's all well and good for the Welsh Government to say on the one hand, 'We don't receive enough money from the UK Government', and on the other hand to say that they are investing here, when we know that in the past the NHS did see an increase but it was only a cash increase at one point in time, when, of course, you need to safeguard the increase against inflation as well.

On a more positive note, I mentioned the north Wales growth deal, and that is a step in the right direction. Through the projects identified in the proposition document, the intention is to create over 5,000 new jobs, to lever in £3 billion of private sector investment and to increase the value of the north Wales economy from £13.6 billion to £26 billion by 2035. This investment is to be welcomed and will provide major benefits to the Welsh economy.

If I can turn to the issue of tax, which is also mentioned in our motion, Welsh Conservatives supported tax devolution. It was, of course, a UK Conservative Government, in coalition, that brought that in at the UK level as a way of making this place and the Welsh Government more accountable to the people. But, it is vital that tax rates in Wales remain fair and competitive. That is absolutely essential. Wales simply cannot afford punitive tax rates that take money out of the pockets of those people who are going to invest in new businesses, in small and medium-sized enterprises and in expanding existing businesses, and invest in the entrepreneurial economy.

So, we are calling on the Welsh Government, in this motion, to reassert its previous commitment to not raise income tax before the—