3. Statement by the Minister for Finance and Local Government: Welsh Government's response to the Chancellor's statement on the medium-term fiscal plan

Part of the debate – in the Senedd at 2:55 pm on 18 October 2022.

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Photo of Peter Fox Peter Fox Conservative 2:55, 18 October 2022

Thank you, Llywydd. As I said, I think we're all disappointed that we find ourselves in this position. I welcome the new Chancellor to his position. He is somebody who has a wide range of knowledge of the workings of Government and has the experience needed to put the country back on track. These are not normal times and, whilst recent events haven't been helpful, to pretend that we could fully insulate ourselves from numerous global shocks that have challenged us in so many ways is a fallacy. But, Llywydd, as I said earlier, I'm acutely aware that the past few weeks have been, to put it very lightly, disappointing. Whilst publicly I may have defended some of the previously announced proposals, I did so believing that the UK Government had modelled the impacts of its plans, and the Government should have published all of the information that it had when it made its original announcement, alongside detailed proposals as to its longer term financial plans. The fact that it wasn't made available was a mistake. It should not have happened, and I welcome that the Chancellor has committed to following a doctrine of fiscal responsibility, like many chancellors before him.

Llywydd, whilst I still believe economic growth is the best way out of this crisis, ultimately, what we need now is stability, and the new Chancellor must deliver this, and the reaction to his statement yesterday has seemingly helped to calm the markets a little. I also believe that the announcement of the new economic advisory council will provide further stability and direction to UK fiscal policy. I was pleased to hear that the Minister had spoken to the chief secretary, and I hope, in future conversations, that the Minister will raise the possibility for the Welsh Government to work with the council to re-establish that important cross-governmental working, as well as trying to get a Welsh perspective on the council to reflect our shared interests and Wales's particular economic outlook. I hope that certainty can be provided about what the budgetary outlook will be following the financial statement later this month.

I also agree with the Minister about the continuing need to support people, especially those who are struggling the most during these difficult times, and the UK Government has to do everything it can, like it had previously done during COVID, and beyond, to provide the help that people need. Now, I'm reassured from the Chancellor's comments that his focus will always be on those who are most in need, but I know that we must also do our bit to ensure that the Government remains focused on helping the most vulnerable, and that's why, today, the Welsh Conservative group have written to the Chancellor calling for benefits to be uprated in line with inflation.

But, I must say, when the Minister talks about how the Chancellor's announcements will shrink the economy, I do have to question whether Welsh Government policy is simply to believe the opposite of what the UK Government does. A few weeks ago, they were arguing against the growth plan and calling for it to be scrapped. Now they are seemingly suggesting that the reversal of the same plan is anti-growth, so what do they believe? Presiding Officer, what we are still waiting to hear—and statement after statement, I ask for this—is what are the Government's plans to deliver the growth and prosperity that our economy needs in Wales? If the growth plan is the wrong sort of economic growth and a reversal of the plan is anti-growth, then what exactly is the Welsh Government doing to realise the full potential of our economy? The First Minister in an interview recently said that a growing economy needs investment in infrastructure and investment in human capital, and I agree, but how does that reconcile when we have some of the highest business rates in the UK, a ban on new road infrastructure, a tourism tax that the industry on the whole does not like, a lack of house building across the country, and Welsh people earning less per year than in the rest of the UK? How can these things be the way to achieve growth? Presiding Officer, the past couple weeks have been difficult and testing, but what they have shown is that, to combat the difficulties that we face, we need to create the conditions for growth. Thank you.