5. What assessment has the Minister made of the impact of the UK Government's economic policy on the Welsh Government's budget? OQ58251

The UK Government’s economic and fiscal policies are responsible for the relatively poor growth of the UK economy. If the Welsh Government’s budget since 2010 had kept pace with long-run growth in the economy before 2010, it would be over £4.5 billion higher than it is.

I accept that Minister, but, sometimes, I think we place too much emphasis on simply spending. My question was about how we raise funds as well. The UK Government's obsession with austerity has created real significant structural problems in the economy. But their decision to go for a hard Brexit, leaving the single market and the customs union, has meant that the UK economy and the Welsh economy are suffering long-term harm. This will have, I assume, a direct impact on the money raised by the Welsh Government in terms of its taxation policy. My question to you, Minister, is: to what extent is this analysis correct? Have you had an opportunity to make an assessment of the impact of UK economic policy? And how, if you have made an assessment, are you able to ameliorate that impact?

Thank you for raising that. Alongside the draft budget, which we published back in December, the chief economist did provide an update in terms of his assessment of the impact, which included the impact of Brexit, and I would commend that to all colleagues. We know that we have lost, or the UK, I should say, has lost many billions of pounds in tax, as a direct result of Brexit. And, of course, that means that the Welsh Government's budget is harmed as a direct result of that; there's no question about that. I do get the opportunity to raise this particular issue this afternoon, at one of our inter-ministerial meetings with the UK Government, and I'll be reflecting on the points that Alun Davies has made, and using that to inform my contribution in that meeting.

Minister, the UK Government's strong economic policy since 2010, and having that long-term economic plan, has helped deliver the best settlement Wales has ever had: £18 billion-worth of funding this year. And, because of the UK Government's strong economic policies, we've got the levelling-up fund, the community renewal fund, city and growth deals, free ports, investment in green energy and the global centre of rail excellence in my constituency, delivered by a UK Conservative Government. Eighteen billion pounds extra this year, and you still keep moaning about Brexit. My word. So, does the Minister agree with me that because of a strong UK Conservative Government, with strong economic policies, the Welsh economy will grow because of the benefit to the wider economy of the UK and you will have more money in the Welsh Government Treasury?

Well, I have to say that the cheque must be still in the post if we’re expecting £18 billion additional to our budget this year, because Wales is actually £1 billion worse off as a result of the UK Government’s approach to replacement EU funding. The Finance Committee has the opportunity to question UK Government Ministers tomorrow and I’m going to be paying even more interest than I normally do to the Finance Committee’s meeting, because I would absolutely love to see the UK Government Ministers trying to defend their decisions in respect of post-EU funding, because I think they are indefensible. The UK Government did promise us that we wouldn’t be a penny worse off as a result of Brexit; we’re £1.2 billion worse off as a result of Brexit and as a result of the particular choices that they made, and I just don’t think there’s any point in trying to hide from that.