5. Statement by the Minister for Finance and Trefnydd: Fiscal implications for Wales of the impact of, and response to, COVID-19

Part of the debate – in the Senedd at 4:40 pm on 13 May 2020.

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Photo of Rebecca Evans Rebecca Evans Labour 4:40, 13 May 2020

I have regular discussions both with my counterparts in the other devolved nations and then also on a quadrilateral basis with the Chief Secretary to the Treasury, and at our most recent meeting we all talked about the importance of flexibilities, and the Chief Secretary agreed that he would give serious consideration to the proposals that we put forward. So we're having those discussions amongst the three nations. Now, given our different situations and the different settlements that we have, we'll be seeking different kinds of flexibilities, but nonetheless we've undertaken to work together because this is an important issue for the whole of the UK. Those discussions are going on at the moment. I'm hoping that they will lead to some successful outcomes. I don't think that what we're asking is unreasonable by any stretch of the imagination and I think that, actually, some of it will help the UK Government in terms of managing its finances because what we're not asking for is more, we're just asking for more flexibility to access what we already have and what we already plan that we will have as well.

The point about the Barnett formula is well made. We are in complete agreement that it isn't based on need. In the first discussion I had with the Chief Secretary to the Treasury at the start of this crisis, I was very keen to make the points that Rhun ap Iorwerth has just made in terms of our population having a greater need: that point about having a generally older population or a larger proportion of older population within our population in Wales; and that point about the virus having an impact in the communities that are less prosperous. But, also, I think it's important to recognise that there are economic reasons as well why the response should be based on need, one of which is about our economy: we have a larger proportion of small and medium-sized enterprises; we have a larger proportion of manufacturing industries, which, again, are all hard hit; and, of course, the tourism industry is a larger proportion of our economy here in Wales as well. So, all of these factors point to the need to recognise need and recognise the fact that Barnett isn't sufficient in this case. 

These are arguments that we continue to make. There's been no movement on the fundamental of using Barnett as a starting point for this, but I feel more hopeful about having some movement on the flexibilities issue.