Questions now from the party spokespeople. The Conservative spokesperson, Darren Millar.

Diolch, Llywydd. Minister, can you tell us how your budget for the year 2020-2021 is going to support Welsh businesses?

Certainly. Only yesterday I was able to announce, as part of the budget 2020-21, that we would be continuing to extend our high street and retail rate relief scheme into 2020-21. So, that's more than £24 million of funding, which supports over 15,000 businesses with their rates. I think that's really important, but, actually, that goes alongside £230 million of other relief for businesses in Wales, meaning that around half of businesses in Wales pay absolutely no rates at all.

Well, of course, we welcome any business rate relief, but the fact of the matter is that, in spite of that relief, which you are extending, we've still got the most punitive business rates regime in the whole of the United Kingdom. And, of course, in addition to having the highest business rates in Great Britain, we also have very high land transaction tax for non-commercial properties, and they will continue to be higher than in either Scotland or England for the foreseeable future. Why is it that you didn't take the opportunity to have a look at reducing those taxes in order to promote investment and to promote business as the wealth creators in Wales in your budget, and will you reconsider that position before bringing the final budget to this Chamber later in the year?

Well, I'd start, of course, by suggesting that Darren Millar is wrong to suggest we have punitive business rates in Wales, because, actually, a larger proportion of businesses in Wales pay no rates at all than do across the border in England. And the place where we set our business rates really does reflect the fact that our average rateable value in Wales is different to in England. So, in England, it is around £50,000, and only £30,000 in Wales, so I think it is only right that our system reflects the different rateable values and the different picture that we have here in Wales.

In terms of land transaction tax, obviously we do have a different, higher rate for non-residential taxes. And those are for purchases of over £1 million. When you get to £1.1 million, the land transaction tax does start to become higher than stamp duty land tax. Of course, that rate was agreed by the Assembly when we voted on that. I think it's important to recognise that this is the first year of those particular rates, so we are obviously keeping a close eye on them, but we're also keeping a close eye on what is happening in Ireland and Scotland as well. Because we've all set out on different paths and we have no indication thus far that those rates are putting off businesses from locating in Wales, because, when businesses locate, it's for a multitude of reasons, one of which will be the land transaction tax, but, obviously, other issues such as skills and Government support for business will obviously be factors. 

Well, you had a golden opportunity, Minister—and you've missed it, frankly—to reduce the business rate multiplier and to make it more attractive for people to come here and invest in Wales—an extra £600 million provided by the UK Government, a Welsh block grant at a record high level. And, of course, in spite of this, you expect us to believe that there's nothing that you can do in order to reduce the impact of those taxes on business. 

The reality of the situation is that we've got a Government here that doesn't keep control of its expenditure properly. We've had a £51 million additional cost as a result of delays and overspend on the Heads of the Valleys road, £221 million invested in uncompetitive enterprise zones and, of course, we've seen—and it was highlighted again just yesterday—tens of millions of pounds each and every year going into a black hole down the road at Cardiff Airport.

Now, we know that, each year, when January comes around, many people take the opportunity to reflect and establish some new year's resolutions. Can I suggest that you have a new year's resolution, and that is to stop wasting taxpayers' money and to do everything you can to support businesses as the wealth creators in Wales that will help to generate the income that your Government so desperately says that it needs?

I think, in terms of our support for business, the figures that we've already seen for land transaction tax do speak for themselves, because, in the first year of land transaction tax, the changes to the rates ensure that we do maintain our attractiveness to commercial enterprises. And, as a result of these new tax rates, over 90 per cent of non-residential transactions in Wales pay the same or less tax than they would across the border in England, and we expect those changes to lead to an increase in commercial activity in Wales.

Plaid Cymru spokesperson, Rhun ap Iorwerth.

Minister, it's totally unreasonable, I think, that the Welsh budget for the coming year is having to be scrutinised before UK Government spending plans, including details of the Welsh block grant, have been announced. The UK budget statement is now due on 11 March, just after our scrutiny of the budget here ends. It's just another example on a long and growing list of why Westminster isn't working for Wales. But is this why Welsh Government's budget is so unambitious and lacking in innovation? 

I do have to say, what I think is lacking in innovation and lacking in ambition is when opposition parties put out press releases that could have been written before. I think it's almost par for the course, isn't it, that an opposition party will say that there's been a missed opportunity or that they're disappointed? How about studying and scrutinising the budget and genuinely challenging things that you think should be different? How about putting forward alternative budgets? How about putting forward ideas for ways in which Welsh Government money should otherwise be spent? I think that would just be a much more useful contribution to the debate. 

I've no idea to which press release you're referring, but I'll continue with scrutinising Welsh Government's budget. There are no step changes to be seen in Government thinking; it's budget management, that's what we see. Climate change is one of those areas where your Government has failed to demonstrate meaningfully, I think, how spending is really addressing the climate crisis—taking big decisions now for our long-term good. Now, as the future generations commissioner has pointed out, the Government can't even tell us how your spending plans will impact on carbon emissions. To see why we need that kind of assessment, look at the Wales infrastructure investment plan update for 2019; it shows an investment of £1.56 billion on roads compared with an investment of £818 million in sustainable transport, which suggests to me that elements of your budgeting could actually be undermining your net zero carbon objectives. Now, will you as Minister give us an assurance that all future budgets will be accompanied by a carbon impact assessment? And given that we have to focus on the preventative more and more right across Government spending areas, will you also provide a detailed document in future on where Government is spending for prevention?  

I have had the opportunity to discuss this particular issue with the Minister for environment and rural affairs just this morning, because we are keen to be able to demonstrate the decisions that we make and the impact that they do have on our carbon reduction. However, it really is not that simple.

So, for example, investing in the infrastructure to support electric cars is only one part of the picture, because the actual carbon savings as a result of that will depend on uptake of electric vehicles, and that, in many ways, is dependent on various levers that the UK Government will be pulling in terms of tax. So, if you ask me how much we will save in terms of carbon because of our investment in electric charging points, as an example, we're unable to say. We are able to say how our investment, for example, in changing the refuse truck fleet across Wales will save, because we can demonstrate how much each truck emits.

So, you know, it is very difficult to demonstrate a full carbon impact assessment. Often, carbon savings are the primary reason why we do things, and often they are secondary benefits of the reasons why we do things. So, the picture is extremely complex. But, obviously, as we set out in our budget improvement plan, we will continue to strive to explain the decisions that we take in terms of carbon impact assessments. But, it really is not as simple as perhaps the Member suggested. 

But, Minister, if I may suggest, the truth of the matter is that of course it's difficult for you to measure the impact, because you're not carrying out impact assessments. So, I'm asking you, as a Government, to ensure that, in future budgets, you do carry out an assessment of how exactly the expenditure decisions you take are going to have an impact on our ambitions in terms of cutting our carbon outputs.

This budget is an opportunity missed, as I said yesterday. There is some relief—and that is temporary, I fear—in terms of the funds available for spending in the next financial year, but the opportunity hasn't been taken to invest properly now for the long term. We are not thinking sufficiently about the well-being of our nation in the long term.

Plaid Cymru has already committed to introducing well-being budgetary processes, including carbon assessments, for example. But, nobody really sees this as a budget that is ground-breaking, a budget that provides hope and that shows ambition for following a new path. So, when will you, as a Minister, realise that management of itself is not enough?

I would obviously disagree with what the Member's suggesting—that this budget is business as usual. Of course it's not. We see a major package of investment in decarbonisation and biodiversity, which I'm sorry that he can't bring himself to welcome.

So, we'll see £5 million used to create town centre green infrastructure and encourage biodiversity. How often do we talk in this Chamber about how important it is that we green our town centres? We have got a specific environmental growth fund, which will be looking after local places for nature and encourage applications to support a halt to the decline of nature in our local communities. The Member says that this is scheme—of course it's a scheme, but it is part of a wider package that is changing direction and changing the focus of our budget.

Brexit Party spokesperson, Mark Reckless.

Diolch, Llywydd. Finance Minister, I spoke with you the day that the budget was announced and made some of the points that we have heard from Rhun today, and partly yesterday. And I'm pleased to hear that you met with Lesley Griffiths this morning to consider some of these matters. However, in your statement yesterday, you said that you're investing in the areas where we can have the greatest impact for our environment. You then cited four of them: active travel; electric bus fleet; new ways of building homes; and the national forest. Could I ask, how did you prioritise these areas and decide how much to invest in each of those different areas?

So, these particular schemes came about as part of the work that we did cross-Government, where every Member of the Government took on one of our eight cross-cutting areas, which is an area that they normally wouldn't have oversight of, and then endeavoured to work across Government with colleagues to look for opportunities for new ideas, new areas of spend, that could really make a difference, and those areas where the evidence tells us that a difference can be made. So, these are the schemes that came out as a result of that cross-Government work.

Looking at the evidence, we don't have to do all the empirical evidence gathering ourselves—just looking for examples of best practice globally in terms of what we know works, and taking advice from the UK Committee on Climate Change in terms of what they would like to see Welsh Government focusing its efforts on in terms of decarbonisation and lowering our carbon emissions across Wales. 

I can see that the Minister wants to draw on best practice. And to the extent there's a UK Committee on Climate Change and it has a list of various projects that it considers may be effective, I can see why she uses that as a starting point. But, as a finance Minister taking a decision about how much of our precious resources to invest into particular areas, surely, to the extent this is badged as about climate change, she would like to make the maximum difference she could for the amount of money that she has available? Whether the climate impact assessment Rhun suggested is the right way or not, I don't know. But, surely, she needs to do more work on understanding what the bang for her buck—if she does get such—is in each of these different areas?

For example, she mentions the national forest—and, on balance, it strikes me as a good initiative to plant more trees and to have a national forest and work on that in Wales—but, what is the relative cost of that compared to another of her initiatives, which is to invest money in planting trees in Uganda, given the different types of trees that grow, how fast they grow, how much carbon dioxide they absorb, how much it costs to plant them, and how effective is the governance going to be about that? Surely, we need to consider that?

She talks about the way we build new homes, and elsewhere in the budget she emphasises the importance of affordable homes. But, may there not be a trade-off between these two different ambitions? One area where there is, I think, strong evidence of the effectiveness of spending is on energy efficiency and on home insulation, where you both reduce energy bills for the person involved and may have some impact in terms of what she seeks to do around climate change. Is that not an area where she should be investing money, relative to other areas that may be more expensive? For instance, what is the cost of getting that electric bus compared to, say, investing in a few more buses, for example, for Blaenau Gwent? It might either get people out of their cars or allow them to transport in ways they wouldn't otherwise be able to do. Please, in advance of next year's budget, at least, can we have a more rigorous way of making these assessments?

And, she talks about wanting to invest money in communications—I assume telling people how wonderful the Welsh Government is and what it's doing about climate change—but, will she consider actually effective messaging? One of the things that stops those trees being planted is the CAP, because farmland is subsidised but, generally, not woodland. If that's going to change, how will she publicise that? How will she encourage people to do that home insulation, which will benefit them as well? Will she work harder to join up and improve policy in this area?

I think the two areas that Mark Reckless focused on—well, two of the areas that he focused on—are actually two of the areas where the evidence from the UK CCC indicated that decarbonisation efforts should be focused on. So, one is the road transport sector—one that's crucial to delivering a net-zero target—and so, in response to that and the evidence that the UK CCC provided, over £60 million of additional targeted investment in decarbonisation is now directly aimed at the transport sector in our budget for next year.

And, alongside that, Mark Reckless identified housing, domestic heating and domestic energy as important areas to address. And again, UK CCC says that's somewhere we should be placing our attention. So, the budget provides an additional £25 million in our innovative housing programme to look at just that. So, we are taking the evidence that's being provided to us and the recommendations from experts and using them to inform our budgeting decisions.

Obviously, there are ways to compare things. So, Mark Reckless refers to our ambitious tree-planting project that we have in Uganda and then looks at the national forest work that we're doing here in Wales. And obviously, we want to do both. You can get more bang for your buck if you only plant those trees in Uganda. It's generally cheaper to do, they grow faster and so on. Depending on what kind of trees are planted, then you will have different results in terms of carbon. But, equally, we want to plant trees in Wales, because we know what the benefit will be for your well-being and so on if you do have the opportunity to walk amongst trees and in woodland. So, there are obviously several benefits to planting trees and they're certainly things that we would want to be doing in Wales, even though you could technically get more bang for your buck doing it elsewhere.