Part of the debate – in the Senedd at 3:10 pm on 18 October 2022.
But I think that the broader points are really important in terms of having that wider conversation about the powers that are available to us here in Wales, and what an improved set of powers might look like. I think that that is a discussion that is ongoing. It's very live. The Institute of Welsh Affairs is doing some really interesting work at the moment in that kind of space, to try and draw other people and other voices into that conversation, which I think is really to be welcomed.
In terms of the Welsh rates of income tax, I think that the First Minister wasn't being coy today. I think that he was just setting it out honestly, in the sense that we have been really clear that we have got an established process in relation to Welsh rates of income tax, which goes on every single year. That is to consider Welsh rates of income tax, and to consider the role that Welsh rates of income tax have to play in funding public services here in Wales, and then we announce those decisions alongside the draft budget.
Just to continue the discussion that was ongoing between the First Minister and the leader of Plaid Cymru earlier on today, in respect of Welsh rates of income tax, I know that there was some interest in the amount that could be raised through higher rates and additional rates, in particular. Well, we'll start with the basic rate, and this is the figure that gets quoted quite frequently within the Chamber: that would raise around £220 million. But then the higher rate—and this is if you raised it by one penny—would raise around £30 million, and then just £4 million if you were to raise the additional rate. So, I think that that just helps to give some useful context, really, for the kinds of decisions that we will have to make, and the kinds of choices available to us. But just being completely honest: no decisions have been taken. I do think that the UK Government's u-turn on income tax has now changed the context for those decisions, but we will be having those discussions as we move towards the publication of the draft budget on 13 December.
It is my intention to stay with the date of 13 December, because it does respect the protocol that we have with the Finance Committee. But also, I think that I have to tell people that this is going to be the most difficult budget that we will have set since devolution, in the sense that we are looking already at a budget that is worth £1.5 billion less next year. That's before any cuts that are announced either on 31 October or in a forthcoming spring statement. So, this is going to be a budget where we are looking again at our programme for government, we are looking again at our priorities and so on. It could potentially be a budget where we are forced to cut main expenditure groups or programmes and so on. So, I think that that is a good reason why we need time to do that work as a Government.
It's often the case that we are asked to allow greater time for scrutiny than we have even to prepare a budget. I just want to describe the sheer amount of work that goes in to developing a budget, in terms of those commissions that go out to every single one of my colleagues. We have a round of bilaterals with each single one of my ministerial colleagues. All of their departments will be looking at all of their programmes and trying to look to see what could be done differently, where the pressures are, and so on. So, these things do take weeks and weeks and weeks to do, and when we are looking at a budget that is about cutting rather than allocating, it just makes the job even harder. So, I just wanted to say to colleagues that this is the reason why we need time to undertake this work. [Interruption.] And yes, I agree that the scrutiny role is really important as well, but the timetable that we do set out does respect that scrutiny role.
So, in terms of the other points raised: yes, I will certainly take forward the specific points that you wanted raised with the UK Government around off-grid support, for example, and I share the concerns about the announcement of the energy cap being removed as of April. I think that that will only cause a lot of worry now for households in Wales who need a greater degree of certainty to plan for the period ahead.
The UK Government has said that it is instituting a review of the energy support, and we have been really clear that that review has to start and conclude very quickly. The UK Government, in the meeting yesterday, was quite open that we can be involved fully in that review and have input into that review. It's Treasury led, but I think they were—. Potentially because it was our first meeting, they started off in a very collegiate way, wanting to be open and transparent. So, I thought that it seemed like a good place where we could potentially work together to start off with, and that would be a chance for us to set out exactly what our constituents will be feeling as a result of the situation at the moment, and also the lack of ability for businesses and public services to plan ahead in this space as well.