Item 13 on our agenda is a debate on the final budget of 2021-22, and I call on the Minister for Finance and Trefnydd to move that motion—Rebecca Evans.

Motion NDM7613 Rebecca Evans

To propose that the Senedd, in accordance with Standing Order 20.25, approves the Annual Budget for the financial year 2021-22 laid in the Table Office on 2 March 2021.

Motion moved.

Thank you. I'm pleased to open the debate on the final budget for 2021-22, in what is the final budget of this administration.

The extraordinary circumstances that have shaped this year's budget preparation are well documented, but I am proud that we have risen to the challenge with a 2021-22 budget aligned with our values. We are an administration that delivers on our promises and stands by our public services as they continue their fight against this pandemic. When I published the draft budget before Christmas, I promised further funding as we better understood the path of the pandemic over the winter months. In the final budget, I am allocating more than £680 million to support Wales's public services over the coming months. This means, together with the early COVID measures we announced in the draft budget, we are allocating all of the COVID funding we received in the UK spending review last November.

This is a Government that is committed to standing by our public services and giving them the funding certainty that they deserve. The package includes more than £630 million for the NHS and local government to help support them support the people of Wales over the next six months. This significant funding boost will support our world-leading vaccination programme so that we can protect as many people as possible as quickly as possible, boost our testing capacity, and boost our highly effective contact tracing programme. 

This also includes an additional £206.6 million for the local government hardship fund, which will support vital social care services, provide homelessness support, and ensure schools adapt to their new ways of working. We continue to recognise the disproportionate impact this pandemic is having on our lives and our communities, and we have allocated a further £10.5 million to extend the discretionary assistance fund, providing support for the most vulnerable people in Wales during these difficult times. We are responding to the ongoing impact on the use of public transport, and providing a further £18.6 million to extend bus support into the second quarter of 2021-22. We recognise the important role employability and skills will play in our recovery. We're investing £16.5 million in apprenticeships to maintain current levels of apprenticeship places in 2021-22.

We're a Government that allocates funding where it can deliver the greatest impact. This pandemic has shaken our economy's foundations, and we recognise the need to act now to inject jobs and demand into a recovery that takes root today. Our final budget includes a capital stimulus of more than £220 million to move this work forward. This includes an additional £147 million to ramp up house building programmes and an extra £30 million to accelerate the ambitious twenty-first century schools and colleges building programme, helping to support economic growth, sustainable jobs and training opportunities across the sector.

We know that our hardest hit businesses need certainty too. I am setting aside £200 million in reserves for additional business support next year if it's needed to respond to the evolving challenges of the pandemic. Ahead of the budget, I called on the UK Government to extend the business support package in England, and it's why I took the immediate decision following the UK Government budget, once we had certainty on the funding available, to announce an extension to the retail, leisure and hospitality rates relief, with a cap for properties with a rateable value of over £500,000, and the enhanced leisure and hospitality rates relief scheme for 12 months.

The UK budget was presented at a critical juncture for the economy, and, while we welcome the additional £735 million revenue for Wales, we did not receive a single penny extra in capital next year to support the economic recovery. Disappointingly, there was no sign of real long-term help for the most vulnerable in our society. The Chancellor had the opportunity to make permanent the additional universal credit uplift, but he didn't, and the longer term changes to personal tax allowances are a stealth tax that will hit the lowest paid hardest. Of equal concern was the silence on spending pressures for public services, with no extra funding support for recovery in the NHS and other strategic priorities, including wider social care reform.

The UK budget did nothing to provide confidence about the future path of public finances beyond 2021-22. We face a reduction in our budget from 2021-22, partly driven by the withdrawal of COVID support, but also by underlying reductions to planned public spending built into the UK Government's medium-term plans. As noted by the Institute for Fiscal Studies:

'The Chancellor’s medium-term spending plans simply look implausibly low.'

Unlike the UK Government, we have continued our targeted and responsible approach, providing effective support in the course of this fast-moving pandemic, taking timely decisions and providing support when it's needed. To provide homebuyers with extra time to complete transactions, I announced last week an extension in our land transaction tax reduction period in Wales until 30 June. We announced yesterday a package of funding worth £72 million, taking total investment to over £112 million, to support teachers and learners impacted by the pandemic over this year. Building on funding we announced in the final budget, and to support our recovery, I am today announcing a further £8.7 million as part of a total additional investment of £18.7 million to support the extension of our employer incentive scheme and to bolster our flexi-job apprenticeship offer.

While we can't underestimate the scale of the challenges we are facing, we have provided certainty for our vital public services, are helping rebuild our economy with real social and environmental purpose, and protecting Wales from the worst effects of the pandemic. I am proud that we have provided sound foundations for the next administration to deliver a more prosperous, more equal and a greener Wales. Thank you. 

Thank you. Can I call on the Chair of the Finance Committee, Llyr Gruffydd?

Thank you very much once again, Deputy Llywydd. I'm pleased to contribute to this debate too, this time on the Welsh Government's final budget, and I do so, of course, in my role as Chair of the Finance Committee. I'm also pleased that the Minister has accepted or accepted in principle every one of the 36 recommendations made by the committee.

During the debate on the draft budget, this Chamber recognised the uncertainty that surrounded the budget cycle again this year because of delayed UK fiscal events and a lack of forward funding figures. And, in speaking on behalf of the Finance Committee in that debate, Siân Gwenllian made the pertinent point that the draft budget was very much a draft, with Welsh Government holding significant unallocated reserves. Whilst the committee appreciated the need for some flexibility this year to deal with the uncertainty of the pandemic, that isn't conducive to effective budget scrutiny, and the approach taken for this budget should not set a precedent for future years.

The final budget allocates more than £800 million more than what was scrutinised as part of the scrutiny of the draft budget. It's certainly not ideal that we're considering a final budget here today when the UK Government budget, published a day after the Welsh Government's final budget, has announced an additional £735 million for Wales, which has not been considered as part of this budgetary process. I also note that the Welsh Government has responded to policy announcements in the UK budget by announcing the extension of some elements of the COVID non-domestic rate relief and the extension of the land transaction tax reduction to the end of June, as we've just heard from the Minister. I'm pleased that the Minister has outlined the changes between the draft budget and the final budget and the implications of the UK budget. This will assist the Finance Committee, of course, in considering potential changes to the Welsh Government's budget for 2021-22. 

This final budget allocates around £11.2 million for matters relating to Brexit. However, it's extremely disappointing that the UK budget announced that funding to replace EU structural funds will be directly allocated in Wales on devolved matters via the UK community renewal fund and the levelling up fund, bypassing this Senedd. Now, as I mentioned to the Chamber earlier this afternoon during the debate on the third supplementary budget, the Finance Committee, along with members of the European and External Affairs Committee, will take evidence from the Secretary of State tomorrow on the shared prosperity fund.

We are pleased that the Welsh Government has accepted recommendation 2, and we will continue to seek commitments from the UK Government that UK fiscal events will normally take place by a specified date. This is imperative to ensure that devolved administrations have sufficient time to carry out meaningful budget setting and scrutiny. In addition, we're pleased that recommendation 3 has been accepted and that the Welsh Government will continue to press the UK Government for multi-year settlements to be reinstated in time for next year's budget cycle. For the past three years, the draft budget has been produced and scrutinised under exceptional circumstances due to Brexit and the pandemic. Delayed UK fiscal events lead to delays in the publication of Welsh Government draft budgets, and that in turn has reduced the time available for scrutiny. This is very concerning, given that Brexit and the financial response to the pandemic will have an impact on public spending for years to come.

Now, this is the final budget of the fifth Senedd, and there have been a number of challenges as a result of COVID-19, and the financial impacts have been significant. It's likely that responding to the pandemic will still be a significant part of the response in 2021-22, but I am hopeful that the focus will shift to recovery during the coming year. It's clear that there'll be much work to be done by the next Welsh Government, and certainly by the next Finance Committee too. Thank you, Dirprwy Lywydd. 

After more than two decades of Labour budgets since devolution, Wales still has the lowest wage and employment levels and highest proportion of low-paid jobs in Britain and the lowest prosperity levels and long-term pay growth and highest poverty rate of all UK nations. We needed a budget to fix the foundations and build a more secure and prosperous economy for the future. Instead, what we got was a budget that papered over the cracks rather than rebuilding the foundations; a budget that shows this Welsh Government do not understand what went wrong in the last two decades or what is needed in the next. Welsh Government spending has increased by 4.2 per cent in cash terms to £22.3 billion, with 83 per cent of funding being provided by the UK Government. This has only been possible because of the prudent action taken by UK Government since 2010 to reduce inherited deficit. They could have gone faster, but that would have generated bigger cuts. They could have gone slower, but that would have generated bigger imposed cuts. After all, as anyone who's ever borrowed knows, borrowers borrow but lenders set the terms.

Whilst the future of the pandemic is uncertain, it is concerning that the Wales fiscal analysis report this month found not only that the Welsh Government has failed to allocate the £650 million provided by the UK Conservative Government on 15 February, instead rolling the funding over to next year, but also that, with additional consequentials from the UK budget and changes to projected devolved revenues, this means the Welsh Government currently has approximately £1.3 billion to allocate at future supplementary budgets. Now, we recognise that the Welsh Government must make provisions for contingencies. However, £1.3 billion is excessive, considering the Welsh Government knew for some time that additional funding was going to be made available. Although the Minister blames this on late notification by the UK Government, the Chief Secretary to the Treasury has made it clear he's been providing an upfront guarantee of additional resource funding to the Welsh Government for 2020-21 in response to the Welsh Government's request for certainty to help them plan their own support arrangements in Wales. The UK spending review last November also confirmed an additional £1.3 billion for the Welsh Government, bringing Barnett-based funding provided to the Welsh Government to £16.6 billion in 2021-22. This equates to around £123 per head for every £100 per head the UK Government spent in England on matters devolved in Wales. He also confirmed the Welsh Government can carry forward into 2021-22 any additional UK Government Barnett-based supplementary funding, but added that it is for the Welsh Government to determine how to make full use of this to deliver on devolved responsibilities.

Taxation changes in the budget are as regressive as they were before the pandemic struck. The tax on aspirational opportunity is back, with land transaction tax for homes purchased between £180,000 to £250,000 reverting to levels before the pandemic, at 3.5 per cent. My casework is showing that that's causing a massive problem to people, particularly those from Wales who want to move back from across the border in England. And business rates continue to be the highest in the UK. The Welsh Conservatives have been calling on this Labour Government to use the £650 million provided to them by the UK Government on 15 February to implement business rates relief for businesses in Wales. This Welsh Government claims it was not able to announce business rates relief sooner, because the UK Government's funding plans had not been announced. However, the Scottish Government has exposed this for the nonsense it is by announcing the abolition of business rates for the retail, leisure, hospitality and aviation industries on 15 February, using its £1.1 billion of consequential funding arising from the UK Government's coronavirus spending announced then. Funding to announce this policy was available, but this Labour Government characteristically chose once again to dither, delay and play buck-passing party politics, withholding much-needed clarity on funding for businesses in Wales.

Now the Office of Budget Responsibility forecasts that Wales's output will not recover to pre COVID-19 levels until months after the UK. The Welsh economy requires a radical change of direction, rather than more of the same stale economic policies that successive Labour Welsh Governments have produced. Welsh Conservatives have called on the Welsh Government to implement a recovery plan for Wales, not just to see Wales through the COVID-19 pandemic, but also to deliver the public services that Wales needs after over 20 years of successive Labour Welsh Government failures. It is therefore deeply concerning that this budget fails to deliver the financial revolution needed to provide a recovery plan for the Welsh economy and people.

This is a budget that we in Plaid Cymru hope to inherit in a little over two months' time, so I will start with those parts that we welcome, although we do believe that the Government could have gone further. The £380 million in addition for the NHS, we welcome that. We welcome any additional funding for health and care at this time, given the acute pressures faced during the pandemic, and also the £50 million for the track and trace work. I'm pleased that the local government hardship fund has received an additional allocation of £207 million, with a further allocation of £224 million for education and housing, and £200 million for business support. That's to be welcomed too.

But of course, we know that that is only scratching the surface given the needs of businesses and the Welsh economy, given a year of COVID restrictions. That's where we start to get to the point where I see this budget has not been bold enough. The day after the publication of this budget, over £700 million of additional revenue funding was announced, due to decisions to increase spending in England. So, there is some additional flexibility here, and there is a balance to be struck, isn't there?

As I argued as we discussed the third supplementary budget earlier this afternoon, we have supported this element of caution in how additional funds provided during the year should be spent, and the need to hold some funds in reserve rather than spending everything today, as the Conservatives have been encouraging, which is rather irresponsible given how the circumstances of the pandemic have been constantly changing. But when we are talking about a 12-month budget such as this, I think there is room to map out more clearly and, in many ways, more radically how additional funds should be used over the next year.

So, I want greater clarity on business support, for example. What next steps are in place? Have the Minister for finance and the Minister for the economy discussed how best to spend the funding that will now be available over and above what was planned for initially? Is continuing with the current level of funding for apprenticeships at a cost of £16.5 million really good enough in this current climate? I wouldn't have thought so, when we know that we're facing a very major challenge in terms of youth unemployment. Surely we should be seeking to increase the number of training places and apprenticeships available. And as a Government in May, we in Plaid Cymru want to introduce an employment guarantee for young people at 16 to 24, alongside an apprenticeship or a college or university course—a modern version of the Roosevelt new deal, with the emphasis on building a green future.

I think there was a very real opportunity for the Welsh Government to set out its stall for recovery, yes, but also for providing fairness where that doesn't exist at the moment. I'm concerned, in looking at the figures that we have before us. I see that £1.3 billion is available to be allocated over the next year, according to the Wales fiscal analysis team at Cardiff University. I'm concerned at seeing that while seeing simultaneously that truly vulnerable people are in need now. So, we are of the view that there is funding left to extend free school meals and to freeze council tax—things that truly would make a difference to people. And, yes, it's up to Labour Members to answer to their constituents as to why they voted against the extension of free school meals, and not to prioritise fairness in this way, where we believe that there is a very real opportunity to have done so. But as I say, there was an opportunity to set the Government's stall out for economic recovery here too.

Twenty years of leading Welsh Government has seen Labour, I think, failing to lead the kind of transformation that would put the Welsh economy on a path towards higher paid employment, higher skill levels, and so on and so forth, and there is that opportunity now and we must take those opportunities. There's a vision, I think, that's been set out by Plaid Cymru of—

The Member does need to wind up, please. 

—a future—I will wind up—driven by green economic stimulus, creating 60,000 jobs, as we've mentioned, meeting our needs in terms of the climate and employment and higher salaries at the same time, and igniting the Welsh economy. And that's why the Welsh budget would be in safer hands in Plaid Cymru hands after the election in May, and that's why we'll be voting against this budget.

I'd like to welcome the Minister's statement this afternoon and this budget. It's probably the toughest budget around any of us in this place have seen, and certainly in the three Senedds I've sat in, this has been the most difficult year for any Government at any time. So, I think whatever our individual politics and whatever our individual views on the decisions that the Minister takes, I think we should congratulate her and give thanks to her, her team and the Government who have worked so hard to ensure that we've actually got money through the system and out of the door, sustaining and supporting jobs, businesses and public services in the most difficult of times.

I'd like to address three aspects of the budget this afternoon. First of all, overall spending on COVID over this period; secondly, the impact of the UK budget announced last week; and finally, the Welsh Government's plans for an investment-led, jobs-led recovery from COVID. It's fair to say that COVID has dominated our discussions over the last year and in looking back over the current budget, but it's also dominated our discussions and our debates on this budget for next year as well.

I strongly welcome the support and help that's been made available for people, and I continue to do so. The emergency assistance provided by the Welsh Government over the last year is something that has sustained many families and many communities throughout the country, but we know that's not going to stop at the end of this financial year, and I'm glad to see that the Government is putting in place the structures, the frameworks and the funding to ensure that we're able to continue to support people over the coming period.

The second aspect is that of the UK budget. What we saw last week was austerity with better PR: more investment in the Chancellor's own brand and ambitions than investment in the people we represent. We saw sleight of hand, warm words but more of the failed austerity. And, do you know, I listened to Conservative Members slavishly reading out their lines to take? I would say to those Members: do your own work, read yourselves, do your own research, and what you'll see is something different. You'll see the Institute for Fiscal Studies describing the budget figures as being implausibly low. You'll see the Resolution Foundation saying that it doesn't feel like the end of austerity, particularly if you're running a local authority or a prison. What you're seeing is a Welsh budget that's 4 per cent lower in real terms than a decade ago, and what you're going to see is a real squeeze on public services in the coming years. We've seen already what the UK Government thinks of health service workers. Well, we're going to see that extended over the next decade to all public service workers, and that's something not to be proud of but to be deeply ashamed of.

And finally, Deputy Presiding Officer, what are the plans for an investment-led, jobs-led recovery? I've been hugely impressed by the work of the finance Minister and of other Ministers within the Welsh Government, corralling money to invest in our communities. We already know that there is no additional capital funding in Wales in the next financial year, but it's gone further than that, and we've seen further sleights of hand and broken promises. The UK Government is being fundamentally dishonest in its approach. The shared prosperity fund to the levelling-up fund, we are seeing money being taken out of Wales, investment being taken out of Wales. We are seeing a Government that is concerned about its image and its identity but that doesn't, frankly, give a damn about its people, and that really worries me, because we are going to have to see more investment in people and structures and businesses in the next year than we've seen in decades, and it's not being done fairly and it's not being done at the level it needs to happen. We have seen the UK Government channelling money to Tory seats in the north of England and taking money out of Wales, breaking promises on replacing European funding, breaking promises on delivering investment, breaking promises on being a fair player. We are seeing a dishonest Government acting in a way in which I could never have believed a Government would act in the past.

So, in closing, I will be supporting the Welsh Government this afternoon in this Bill, but that won't surprise anybody. But what I want to be able to do as well over the coming year, and if I'm re-elected in May to represent Blaenau Gwent, is I'll be campaigning for the investment that this borough needs, that our people need, that these communities require to recover from COVID, and that means a Welsh Government providing that investment, because we know we can't trust the Tories to do so.

Whilst there are some aspects of the Welsh Government's budget that are welcome, such as the additional moneys for the NHS, overall there is much to dislike in this spending plan.

One of my major concerns is regarding the lack of business support. The coronavirus pandemic has not just been a health crisis; it has been an economic disaster. Wales experienced the greatest increase of economic inactivity of any UK nation. The economic fallout of our response to this pandemic could be felt for generations. We don't yet know the true economic cost of this pandemic; how many businesses will have to permanently shut their doors; how many jobs will be lost; and how many people will be forced into poverty as a result. Twenty-eight per cent of people in parts of my region are already living in poverty. How many young people will have had their life chances diminished? Many economic forecasters believe the fallout from the pandemic could rival the great depression of the last century. The UK saw its biggest fall in output for centuries—the biggest fall in annual GDP since the great frost of 1709. So, while we received some welcome news from the OBR that the UK economy will grow in future years, the fact the global economy will continue to flatline does not paint a great picture. It is therefore vital that we do all we can to limit the damage. The fact that the Welsh Government has failed to deliver a comprehensive programme of business support in this budget is deplorable.

It's also ironic that, earlier this afternoon, they chose to enact the socioeconomic inequalities duty of the Equality Act 2010. So, while it's true that the Welsh Government have some of the UK's most generous business support, it is also true that far too many businesses and people are left behind. Far too many businesses do not qualify for support, because the Welsh Government doesn't approve of their business sector, and those that do qualify find the application processes confusing, and they themselves are confused. The fact that local authorities are the arbiters of some support packages has led to a postcode lottery of support, with identical businesses receiving different levels of assistance, because of to whom they pay their business rates.

We had the perfect opportunity to introduce a tailor-made business support package to help the Welsh economy weather the COVID storm and recover, but this budget has failed Welsh businesses. As a result of the UK Government's pandemic spending, Wales received an additional £0.66 billion pounds. Of the additional £30 million resource spending allocated to the economy MEG, not a single penny was spent on helping Welsh businesses. Half of the moneys are to be spent on bus support and the other on workplace learning. And whilst both are worthy causes, that's not what the Welsh economy needs right now. Where is the shot in the arm that the Chancellor of the Exchequer promised English businesses? Sadly, Welsh business continues to be let down and left behind by this Welsh Government, and as a result, the people of Wales will suffer and poverty will continue to grow, despite the Welsh Government's new duty to tackle socioeconomic inequalities. Diolch yn fawr. Thank you.

In my brief contribution to this debate, I just wanted to make a few general comments on just one or two of the key areas in the final budget. I'll open by saying that I am very pleased to be supporting it, because unlike the UK Tory Government's budget, this Welsh budget is putting our NHS and our vital public services first—public services that have again shown us their true value and their worth—while the UK Government has again shown clearly that this is a worth that they don't recognise. The budget will also provide further support to Welsh businesses, despite what Caroline Jones is saying. We all hope that they start to emerge from the worst days of this pandemic, because businesses have been living on a knife edge for the last year, but in Wales, we've had a Government that has committed to supporting them more generously than anywhere else in the UK. Who knows how many businesses and jobs would otherwise have been permanently lost to our economy without that support? 

The budget will also ensure that the incredible roll-out of the biggest vaccination programme in our history continues to be supported and builds upon the success of our made-in-Wales track and trace system—a system, again, that is delivered here by our public services working for and in the interest of public service and not private profit. Thankfully, because of the decisions made by this Welsh Labour Government, Wales has avoided the scandal of the wasted billions that we've seen in England. I'm also pleased to see the support given to building more homes. We've seen such good progress on this already, but there's still so much more to do if we're to meet the needs of so many people that I see in my constituency who need access to an affordable home, whether that is to buy or to rent.

But of course, we know that many of our aims will be undermined if the UK Chancellor does not deliver a sustainable boost in our spending. This is where I absolutely agree with Alun Davies that our message to the Chancellor must be that now is not the time to start tightening the purse strings. If the last 10 years has told us anything, it is that austerity is not a sustainable way to manage the economy, as it embeds and deepens inequality. Austerity left our public services ill equipped to deal with a crisis as huge as the pandemic. It left most of the vulnerable in our society even more vulnerable to the impact of the pandemic and it weakened many sectors of our economy that will need support for many years to come if we're to rebuild fairer after this crisis subsides. Now is absolutely not the time to return to Tory austerity. Now is the time to rebuild this country so that we have a fairer society and a fairer economy. The UK Tory Government has shown us that it won't do that, but this budget, delivered by a Welsh Labour Government, is showing how we can. I'm proud to be supporting this budget, Llywydd, and I'm proud to be supporting our Welsh Labour Government.

I'm delighted to support this budget—a really difficult budget. With the lack of ability to forecast more than a year ahead, I think this has been very smart in many ways in some of the choices and the priorities made. It caused me to reflect, actually, on what we have been doing over the last five years, despite—as Dawn Bowden, my colleague, was just saying—the challenges of austerity, and then topped by the challenges of the pandemic.

I will turn to this budget at the moment and how it impacts on my constituency. I look over the last five years in my patch, and there isn't a single town or community that hasn't had a new school built that is affecting its primary or secondary school children, or a college that has had investment. It's the biggest investment since the 1960s in the infrastructure of our schools and colleges, and that has come under this Welsh Government. As we look forward, we have commitments there of over £50 million in terms of the band B twenty-first century schools, going forward from 2021 to 2026. I know that there will be more schools. All of those Victorian schools, most of which have now gone, will be transformed into twenty-first century learning hubs for our young people.

I look at the investment in active travel, Pencoed technology park—£2.5 million—the nearly £50 million that has been brought into this part of the Cardiff city region, into Bridgend and Ogmore. We are hoping for a very good announcement within the next few days that will allow an area that I know the Minister knows very well from her background, the Ewenny strategic site—we are hoping for good news on that as part of city deal funding and Welsh Government funding, to allow the brownfield remediation of that, so that we can get on with a big, large-scale development. This is despite the challenges that we have.

If you look at Maesteg Town Hall, there's the £7 million investment in there. I know that we are losing the European money now, and the UK shared prosperity fund is nowhere to be seen at the moment, but we have European money and Welsh Government money coming in to transform that iconic building, which was built with the miners' pennies from this town, like many across the Valleys areas. It will now be transformed as an iconic venue, like what they did with Gwyn Hall in Neath, for the twenty-first century. We have extra-care housing built to the tune of £3 million in Tondu and in the top of the Llynfi valley, providing not just residential care for older people, but wraparound elderly care, including bungalows, where people can move from apartments into bungalows outside, and so on, as their condition changes.

That's why I think that it's worth reflecting, as we look at this budget, going forward, on what we have been able to achieve in these five years, despite, I have to say, the long tail end of austerity. I think that it has been remarkable. It has been well prioritised. It's been on our children, it's been on our elderly, it's been on jobs and skills and getting people into jobs as well, with construction of homes and schools and highways development and so on.

Let me just touch on some of the aspects of this and why I will be supporting this today. I thoroughly welcome the fact that we have managed to find over £630 million for our NHS and for local government, not just in response to the pandemic, but the wider strains they're under. At some point, even with the challenges, a future Government here in Wales is going to have to deal with that long tail of austerity, which has hollowed out parts of local government. They have done incredible work, and our NHS and carers, under great pressure. But, that additional £630 million is very welcome indeed.

I hugely welcome the additional investment of £220 million within house building and the schools programme. I know that, in my area, I have walked into the homes that are being built with that money. I have touched the walls, seen the electrics being put in, seen the people sitting there, building these homes. That’s what this money is all about. It's not just bricks and mortar. It's people in jobs at a time when we need it absolutely the most. These are Welsh Government priorities. But, I have to say as well, with respect to everybody else in the Cabinet, they are Welsh Labour priorities in action as well, and I applaud that entirely.

I simply want to say that it is going to be difficult for the next Government coming in. It really will be, not least because the UK Government seems to be taking away much of the support that we have seen previously from EU funding. The UK shared prosperity fund and so on is still nowhere to be seen whatsoever. It looks like pork-barrel politics to me. But, we need to continue on this set of priorities. Ultimately, it is about looking after the communities that need it the most, and keeping people in jobs, now and into the long-term future as well, and giving people hope. That's what this budget does. It gives people hope, even in the most challenging of times. So, well done, Minister, and thank you for what you've done, not just now, but in the years gone by as well.

This budget may very well be replaced by a substantially changed budget in the first supplementary budget produced post May, depending on the result of the election. Whilst council tax funding is set for the year, all other areas of expenditure can be either increased or decreased. With less than nine weeks to go to polling day, it would be helpful if the Conservatives and Plaid Cymru produced their own spending plans, and actually made them balance. Plaid Cymru have identified a large number of areas they want to increase expenditure in, but have not identified where that funding is coming from. The Conservatives have a policy of cutting taxes and increasing expenditure, which, as we all know, is impossible.

Whilst I will be supporting the budget, it is not uncritical support. Firstly, I am disappointed that money has not been found to provide free school meals to children of parents on universal credit from September when they return to school after the summer holidays. Hopefully, this will be resolved in the first supplementary budget.

Secondly, I do not believe this budget is for a post-COVID world, with an expectation of mainly a return to March 2020. That seems to be the theme of an awful lot of people who have been speaking prior to me. Working at home, online retail and online meetings have become the new normal. There will be a small return to pre-March 2020 activity in these areas. We have seen the changes mentioned above become the new norm, which was the direction we were moving in pre COVID. I know a number of people thought the fourth industrial revolution was going to be artificial intelligence. They were wrong; the fourth industrial revolution is about home working.

I would urge the Welsh Government to postpone road schemes that are not yet started until we see what demand is like. Certainly, I would again urge the Welsh Government to be very wary of using the mutual investment model. The National Audit Office found little evidence that Government investment in more than 700 existing public-private projects had delivered financial benefit. The cost of privately financing public projects can be up to 40 per cent higher than relying solely upon Government money, auditors found. Anyone who thinks that the mutual investment model leads to the private sector taking the risk is deluding themselves. The risk will be factored into any bid. Even an additional 10 per cent would cost £10 million for every £100 million contract.

Turning to the environment budget, the environment is always a top priority for everybody in the Chamber, except for when we get to budget time. Then it makes its way down, unfortunately. I welcome some of the things the Welsh Government is doing in terms of the environment, like increased budget allocation for fuel poverty. I hope that it will be sufficient to deliver progress to meet the proposed fuel poverty target set out in the plan. I further welcome additional money for delivering home energy efficiency via Arbed and Nest. The expectation that 5,500 homes will benefit from Arbed and Nest, plus the many thousands who benefit from home energy efficiency advice from Nest, is welcome. Too many people in my constituency and others are living in cold, damp homes. Far too many people live in homes that are very expensive to heat, which affects everything from their health to their children's educational attainment. I also welcome the Welsh Government's energy service, providing support for public sector bodies to help them develop energy efficiency and renewable energy schemes. I'm also aware of public sector organisations using invest-to-save to improve energy efficiency. The public sector needs to lead on improving energy efficiency. I hope we'll get a further update on what invest-to-save has done to improve energy efficiency in the near future.

Last August, the clean air plan for Wales to take a strategic direction on developing capacity and capability across Wales came in. If you believe, as I do, that the short-term reduction in transport is likely to be long term as more work from home at least some of the time, then air pollution from vehicles will reduce. I welcome the additional money for pilots to promote ultra low emission vehicles across the public sector. I also welcome the progress made by councils such as Swansea on increasing the number of electric vehicles they're using.

I would urge the Government to bring in an extended producer responsibility for plastic packaging. An easy win would be for all wrapping paper and card to be just paper as opposed to plastic and paper or glitter coated. That can actually be achieved at no cost. Whilst funding for additional producer responsibility is not in the budget, the Welsh Government should get funding from its share of any expenditure from Westminster on this.

Finally, I would urge the Welsh Government to look again at funding for NRW. When they cannot carry out basic air pollution and water pollution activity that the Environment Agency used to do, there is a problem. Thank you.

I also support this budget, and I again commend the Minister and the Welsh Labour Government for the twin commitment of tackling ambitiously the successful efforts in Wales to bear down on the pandemic and to start the process of building back our economy fairer, after a decade of starvation of funding and underinvestment to Wales. It is also right that the Welsh Government has reliably and properly put its supplementary budgets before this place, unlike the UK Government. And, although I welcome very much today's update from the finance Minister around her negotiations, it remains not right that Wales is consistently and constantly, more often than not, denied immediate flexibility to use our own money, and often treated like a backwater Government department. We are an equal partner within the UK nations, and we should be able to govern as such. It's also worrying that 20 years on in a devolved Wales, the UK Government seem determined to undermine and frustrate Wales's democratic mandate of a mature devolved fiscal governance framework.

Deputy Llywydd, this final budget adds £682.2 million for COVID-19 efforts, including £630 million to extend public contact tracing to protect core NHS services, and to support local authorities for the first six months of 2021-22. It is no underestimate to say that this money will support Wales's vaccination programme, which is one of the most successful in the world. A million vaccinations is a wonderful testimony to the Welsh Government, the NHS and all those who are delivering for Wales.

Deputy Llywydd, we see, in this final budget, the socialism of this Welsh Labour Government as we set out how we build back a truly fairer Wales: a strong capital package of more than £220 million to pump prime the Welsh economy. This is Keynesian economics at its very best. £147 million to ramp up house building, £30 million for our ambitious school buildings programme to help create jobs. But, then again, what do we see across the political aisle? Well, it's already been said: nothing but wasted billions of public money on appalling track and trace and just political expediency and opportunism, despite Wales providing the highest support package of all the UK nations. So, maybe I can forgive the Tory UK leadership here for not having time—and the Welsh Tory leadership—for doing their arithmetic, but I do not forgive them for not standing up for Wales. It is a fact that in 2021, the Welsh Labour Government committed hundreds of millions more in funding for business support in Wales than it has received in consequentials.

And in closing, Deputy Llywydd, I believe, whether you are young or old in Wales, a business, or whether you're a schoolchild, a lone parent or a family home schooling around that kitchen table, we know that this Welsh Labour Government is on your side. This budget does deliver for the people of Wales and their priorities, and we will emerge from this coronavirus pandemic, ready and able to build back better a fairer Wales, and for the many and not just the privileged few. Thank you.

Thank you. I'll now call those Members who've indicated they want to make a brief intervention. Nick Ramsay.

Diolch, Dirprwy Lywydd. I wasn't going to speak in this debate, but it would have been the first final budget in living memory that I hadn't contributed to, so Mike Hedges spurred me on.

Mike Hedges said that reducing tax and increasing expenditure are incompatible. Of course, he will agree with me that they can be compatible over the longer term, providing that the economy is stimulated and enterprise is encouraged. So, can I make a plea to the Minister that she listens to what the Finance Committee has said, and other Members and backbench Members have said, over the last Senedd term, and we look at ways that the Welsh Government's longer term objectives can be better aligned to individual budgets? Because I think we often talk about the short term but we don't look at where we're going over the longer term. Rhianon Passmore just spoke about that very important term, 'Building back better', and we spoke about building back fairer. That's what we want to do, but that's only going to happen over a number of years. So, let's all work together to make sure that the good aspects of this budget can be extrapolated and Wales can be a better place in five years' time than it is now.

Thank you very much. I now call the Minister for Finance and Trefnydd to reply to the debate, Rebecca Evans.

Thank you. I've welcomed this afternoon's opportunity to debate our final budget for 2021-22, and I thank all Members for their contributions. As I outlined in my opening statement, this is a budget that's taken place amidst uncertainty and evolving circumstances, and I'm grateful to everybody for their contributions. I'd like to seek to respond to some of those key themes. In doing so, I'll just set the context again, in the sense that our core budget for day-to-day spending in 2021-22 is still 4 per cent lower in real terms than it was in 2010-11, and I think that really does speak to the level of the challenge that we face ahead of us. Particularly disappointing is our capital settlement for next year; it's £131 million down on this financial year.

And I'm frankly still reeling from a quite extraordinary meeting that I had yesterday alongside Ken Skates and Jeremy Miles with the Minister at the Ministry of Housing and Local Government and the Secretary of State for Wales, where we were essentially treated to a stakeholder briefing on the levelling up fund, and there's been absolutely zero engagement with the Welsh Government on that in the period up until now.

I was amazed when the Minister at MHLG told me, very proudly, that he was looking to install some people to be working in Cardiff so that there were people on the ground who knew and understood Wales, and so, of course, I had to tell him, 'Well, we already have people in Wales who know and understand Wales. That's the Welsh Government, it's our partners, it's the Senedd, and this is where those decisions need to be taken, as per the devolution settlement.' And what we're seeing essentially is an appalling assault on that, and everything that Alun Davies said in his contribution about the way in which the internal market Act is being used to circumvent the Welsh Government really did resonate with me. 

I do want to address some of the comments that were made in relation to the tax decisions that I've taken at this final budget. Of course, in the final budget, we've announced an extension to the land transaction tax temporary tax reduction period in Wales until 30 June. Since last July, all homebuyers here that have been subject to the main rates of LTT on properties costing more £180,000 have benefited from a tax reduction of up to £2,450, and those paying no more than £250,000 have paid no tax at all. So, only around 25 per cent of people purchasing their homes have been paying tax in that regard. And, of course, if the individuals who Mark Isherwood referred to want to come back to move into Wales, but to do so need to buy that bridging property, well, of course, they can have the additional tax that they pay back if they make that move and sell that additional property within three years. So, we do have those safeguards within the system to ensure that our tax here in Wales is progressive. If you want to know what's not progressive, again, as I've mentioned previously this afternoon, we only have to look at what the Chancellor has done in terms of the personal allowance rates, which will hit the lowest paid workers hardest. And, of course, it will be the lowest paid people who are paying the highest price for the coronavirus pandemic.

I'm really pleased that the Welsh Government has been able to provide 12 full months of rate relief for businesses in the retail, tourism and hospitality sectors. And, of course, I was astonished to hear Mark Isherwood's criticism of that, because the offer that we're making to businesses here goes well beyond that which the Chancellor has offered to his businesses across the border. And I think that we can be very, very proud of our record of supporting business here in Wales. We've said on a number of occasions that the Welsh Government has provided more financial support to businesses than we've received in consequential funding from the UK Government, and so that means that £1.9 billion is now in the bank accounts of businesses here across Wales. And more than £1 billion has been delivered through 178,000 grant awards in an unique partnership, working with local authorities who have done astonishingly good work helping us deliver those grants. And more than £520 million has been provided directly through the Welsh Government and Business Wales. Combined, that business support has helped to protect more than 165,000 jobs here in Wales, through a combination of grant and loan support. And I think that just speaks to the priority that this Government has put on saving people's jobs and their livelihoods through what we all recognise to be an economic crisis. 

And moving forward, the Welsh Government budget for the next financial year does set aside £200 million in reserves for additional business support next year, to respond to the evolving challenges of the pandemic, and I'm very pleased that we've been able to do that. 

Interesting to hear Plaid Cymru's fresh idea about a guarantee. Well, of course, Welsh Government announced our guarantee for young people much earlier on in the crisis, where we've guaranteed young people that we will support them to gain either a job or further forms of education, or support them into self-employment. I was really pleased in my opening remarks today to be announcing £18.7 million to extend business incentives to recruit more apprentices here in Wales. This is an extension of the scheme that we launched in the autumn, which has already seen more than 1,300 new apprenticeships delivered here in Wales.

Of course, climate change has been a theme that has run right through our budget deliberations this year. I remember at the budget last year, the big story then was that we were delivering the biggest package ever of support for the environment through our investment in decarbonisation and biodiversity. Well, this year, we've kept the vast majority of that funding in place, but we've gone further and allocated nearly £80 million additional capital funding to deliver interventions that promote decarbonisation and further enhance our rich biodiversity here in Wales, alongside an additional £17 million of revenue to support the interventions. Those things include, for example, £20 million extra for active travel, bringing our investment in active travel to £50 million in the next financial year; £26.6 million to boost the circular economy; £20 million for Nest, to enhance that, and Arbed and our clean energy schemes; and £5 million for the national forest, which I think is something that we're all particularly excited about. That takes the overall budget to £32 million in the next financial year, and that's alongside other interventions, such as £5 million for taking forward the delivery of a carbon-zero pilot project that will be seeking to decarbonise schools and colleges in Wales. So, you can see that our focus on climate change and addressing the climate emergency has not been diminished by the pandemic.

So, just to start to draw my remarks to a close, I'm really proud of the record of this administration. Despite a decade of austerity, we're investing further in our NHS, bringing our total investment over this term of Government to £37 billion, with more than £8.4 billion in 2021-22, excluding COVID support. We're providing local authorities with a total investment over this term to more than £25 billion with a further £16.6 billion of funding in 2021-22, and, again, excluding the additional support as a result of COVID-19.

And we're delivering on the key spending pledges that we made to the people of Wales in 2016. We've invested more than £200 million on our childcare offer; £689 million on all-age apprenticeships, alongside substantial EU funding into 2021-22; £100 million on improving school standards; the £80 million new treatment fund; and more than £610 million into 2021-22 providing rates relief for small businesses. And as I've just set out, we're taking serious and sustained action to tackle the climate emergency. Over this Senedd term, £2 billion has been invested in housing, delivering more than 20,000 affordable homes, with a further £200 million for social housing in 2021-22 to provide 3,500 additional new homes. And we're investing in the areas where we will have the greatest impact on prevention, and that is very much at the heart of our approach, and you'll see that with our continued record levels of investment in the pupil deprivation grant of more than £100 million in 2021-22. So—

The Minister does need to wind up.

I will just finish my remarks by putting on record my thanks to the Finance Committee and the other scrutineers for the work that they've done with this budget, but also their work over the past extraordinary years, and I again thank my officials for the extraordinary work that they've done. I commend the motion to colleagues.

Thank you very much. As voting on the Welsh rates of income tax for 2021-22 has been deferred until voting time, I will defer the vote on the final budget until voting time.

Voting deferred until voting time.