3. Statement by the First Minister: Update on the Cost of Living

Part of the debate – in the Senedd at 3:03 pm on 20 September 2022.

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Photo of Mark Drakeford Mark Drakeford Labour 3:03, 20 September 2022

Dirprwy Lywydd, thank you very much. Can I say in opening that I think, in answering First Minister's questions, I failed to recognise the generosity of the leader of the opposition's remarks about the work of Welsh Government officials over the last week? And if I failed to do so, then I want to make sure I've put it on the record now, because extraordinary efforts were made and I was grateful to the leader of the opposition for the way in which he recognised that. 

I'll focus, if I can, on the specific points that have been raised. In relation to farmers and cost pressures, 70 per cent of people's single farm payment will be in the hands of almost all farmers in Wales in October of this year. Ninety-seven per cent of all farmers in Wales received those payments in October last year, and we'll be aiming to do the same again.   

On school meals, I don't think it can be fair to say that this is an ideological difference between us. The measures that the Conservative Government in London will announce on Friday will go to every family in the land. In fact, more help will go to the best-off families than will go to the worst-off families. It is a universal approach that the UK Government will be taking. And it seems to me that if it is good enough to make sure that help goes to everybody in the energy crisis, then it can't be an ideological difference to say that help should go to every child in a primary school in Wales when it comes to free school meals. There are very good reasons why the universal approach is being taken, particularly in the free school meal sense, to make sure that we avoid the stigma that, sadly, has, for so many years, been associated with free school meals uptake.

The point that Andrew R.T. Davies raises in relation to the costing of it all: we'll provide £260 million to support local authorities to deliver that policy; £60 million of that is capital and £35 million of the £60 million was announced in detail on 7 September, to make sure that your local education authorities have the certainty that the money is there for them to improve kitchens, buy equipment and so on, to deliver the policy successfully.

I continue to be a bit bemused by the Member's question, when he tells me that he believes in cutting taxes, but wants to know what plans I have to raise them. And I've explained to him before that, if you look at what we said in our programme for government, we took a decision at the start of this term not to raise more money in taxes from people in Wales while the economy was seeking to recover from the impact of the pandemic. The stresses and strains on our economy, for all the reasons we've already explained—the impact of the war in Ukraine; the continuing impact of leaving the European Union—does not lead me to conclude that the circumstances that led us to that conclusion have been ameliorated.

On the issue of unclaimed benefit, of course we absolutely want to draw down everything that Welsh families are entitled to. And to give another example there, Dirprwy Lywydd, we believe that at the moment, in Wales today, up to £70 million may be unclaimed from child trust funds. So, children who had child trust funds deposited for them—and I know that the leader of the opposition will remember that we decided here in this Chamber to add money into the child trust funds of looked-after children, for example, in Wales—well, that money has stayed there for 18 years and now children are becoming entitled to draw it down. But because the scheme was ended back in 2010 by the coalition Government, the publicity around the scheme has diminished considerably. And already £70 million, which is there waiting to be claimed by young people in Wales, has not been drawn down. So, there clearly is more that we can do together to make sure that we do better in that way, and that will help, as will many of the measures I've outlined today, with issues of poverty in families and with children.

As to employment rates, employment rates in Wales are higher than employment rates across the United Kingdom, and the growth in employment rates has outstripped the growth in employment rates across the United Kingdom as well. One of the real challenges for the incoming UK Government is that the total workforce in the United Kingdom is still lower than it was before the pandemic hit. Many people, for whatever reason that may be, have decided not to return to the workforce, having found themselves outside it as a result of the COVID experience. Of course we want to make sure that, here in Wales, women and men have equal access to the employment market, but there are more fundamental issues at play here. The leader of the opposition began by referring to the productivity gap and one of the real constraints in being able to deal with the productivity gap is the fact that we do not have workers, sufficient workers in the United Kingdom, in order to be able to do the jobs that are available for them.