Our spending review set up an unadjusted Welsh block grant from the Treasury through to 2024-25. This three-year budget is something many of us have been calling for for a very long time, and allows for longer term planning.

Wales Fiscal Analysis estimate that, excluding COVID funding, the core budget for annual day-to-day expenditure by the Welsh Government will increase by £2.9 billion by 2024-25 compared to 2021-22, the equivalent of an approximate 3.1 per cent a year over the spending review period in money terms. That was something that Peter Fox said earlier. But—there's always a 'but'—if inflation is taken into account, this is at best a standstill budget. We've seen huge increases recently in inflation. That's bound to impact on the public sector. Higher costs of delivering services, higher wages and also much higher energy costs—local authorities and the public sector are not immune to this.

On housing proposed expenditure, I'm very pleased with the planned investment for the next three years in the social housing grant, pleased to see the housing support grant maintained at its current level, but I would prefer to see an inflationary increase across three years to support the cost of living increases in staff pay. The indicative budget is flat across three years, so in real terms would be something like a 10 per cent reduction.

Unfortunately, we will not be able to discuss alternative budgets because neither Plaid Cymru nor the Conservatives are either able or willing to create alternatives. The most recent estimate of tax and spend in Wales was produced in the 'Wales' Fiscal Future' report, produced by Cardiff University's Wales Governance Centre in March 2020, which is not considered to be an anti-Welsh nationalist or anti-Plaid Cymru group. And the report estimated that, in 2018-19, Wales raised £29.5 billion in taxes and had £43 billion spent on it by the Welsh and UK Governments, meaning that £13.5 billion more was spent on Wales than was raised by Welsh taxes.

I normally ask at this time if Plaid Cymru would like to produce a budget for an independent Wales, and the answer has always been 'yes', but I've never seen one. This year, I'll ask a different question: do they intend in an independent Wales to abolish the NHS, abolish pensions, increase taxes by 46 per cent, or a combination of cuts to all services and substantial increases, or have they got a magic money tree? Also, Plaid Cymru's opposition to bypasses is well known, except it works outside the area represented by their leader, where Llandeilo is about to get its second bypass when many other places haven't had a first. 

The Conservative policy is easy to understand: cut taxes and hold no increase in expenditure. Put simply, it does not work. If the Conservatives want to reduce expenditure, let them tell the people where. Their big idea of abolishing free prescriptions did not last long during the Senedd election campaign after they started to talk to focus groups and to the electorate in general. 

As important as the size of the budget is how it is spent. I would try and convince the Welsh Government to apply the five Es test to expenditure. Effectiveness: is the expenditure effective in achieving the Government's aim? Efficiency: is the expenditure the most efficient use of the resources? Equity: is it fair to all parts of Wales, not necessarily in one year but across a period of time? Major roadworks on the Heads of the Valleys road or the A55 can distort expenditure. Equality: does everyone get treated equally? Is the expenditure skewed to one or more groups of people or away from others? And, finally, the environment: is the budget going to improve the environment, reduce our carbon footprint and improve biodiversity?

On taxation, I've always opposed varying income tax. If you cut it, you'll have a shortfall in income. If you increase it, you upset the electorate; people who can use an England address will and therefore it's very unlikely to raise the amount predicted. What I would again call for is the return of business rates to local authority control. If we're talking about devolution, and everybody here or nearly everybody here is in favour of devolution, devolution cannot stop in Cardiff. We have to devolve more powers and more money, and more budgetary ability to raise money to local authorities.

In conclusion, the budget is assuming cost increases are controlled outside core expenditure—a static budget, but having got used to annual cuts, it is definitely a step in the right direction. Thank you, Deputy Presiding Officer.