4. What discussions has the Minister had with the UK Chancellor prior to the publication of the UK Government's budget? OAQ55234

I am in regular contact with UK Treasury Ministers about a range of financial issues. Ahead of the budget, I wrote to the Chancellor setting out our priorities for Wales, including addressing regional inequality and responding to the climate change emergency.

Thank you for that answer, Minister. I think it's important that after 10 years we've seen austerity hit our local councils very hard. The Welsh Government has made tremendous efforts to actually minimise the impact austerity from Westminster has had on local authorities, yet we've seen local government in England continually suffering as a consequence of the cuts over there. In this budget, it's not quite clear yet as to how much of a consequential we will have as a result of the budget and the increase, if any, to local councils in England, but can you give assurances that if any consequential comes as a rise of funding to authorities in England that that will be passported straight to local authorities, because they are facing difficult times? We understand that coronavirus is among many other issues. They'll also face challenges as a consequence of coronavirus, because of the services—social services and community services—they often provide. It is important, therefore, that we support them as much as possible. If consequentials come, they should get it.

As David Rees recognises, we haven't yet understood the full picture in terms of where those consequentials might be. I would offer one word of caution in the sense that consequentials are given but they're also taken away, so that is an important consideration in terms of when and how funding is passported. But, as we come to a better understanding of the detail that we will have, then, certainly, there will be further announcements to be made. I have given a commitment that I will provide a written statement as soon as possible. So, after questions today, I intend to continue on that to give colleagues some further information.

In terms of the kind of figures that we have been provided with—we do need to check some of them, because they don't all match up—we're looking in the region of £122 million of revenue and around, or at least, £218 million of capital. But, of course, we have to remember that we had £100 million of capital taken off us just a few weeks ago, so £100 million of that new money today will have to go to plug that gap in our plans, which we have published and voted on for the year ahead. So, there is some of that to understand, and, also, we've had £3 million of financial transactions capital for the next financial year as well. So, as soon as we come to a better understanding, we will be able to make some further announcements on spend for next year. 

Minister, I know that the coronavirus will have affected any pre-budget conversations you've had with UK Ministers, but I wonder, when you were having those discussions, what you thought about the various trade sector deals that are important to UK Government, and from which Wales can directly benefit in some cases, notably the tourism sector deal. I think you mentioned the hospitality sector a bit earlier on. So, can you tell me a little bit about those conversations and whether you're expecting anything in this budget announcement in relation to any steel sector deal—whether you've got any heads up on that? A brief question from me, I know, but it's important. Thank you. 

There were several things that were obvious by their absence, I think, in the Chancellor's budget today, one of which was any mention of the steel industry. There was no clarity on rail spend. We had references to rail spend in Manchester, Leeds and other areas—Darlington—but nothing for Wales. And there were no real research and development commitments for us in Wales, and it was very unambitious, I think, in terms of tackling the climate emergency. So, there was lots there that I hope was obvious by its absence, steel being one of those areas, but we do continue to work with the UK Government. So, for example, on the future of the automotive industry, that's an area where we both have particular interests, and Welsh Government is particularly keen on developing that sector. So, Ken Slates is leading on some work in terms of how we can best ensure that investment that is brought to the UK does also feed through across to Wales.