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 3:04 pm on 18 October 2022.

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Photo of Llyr Gruffydd Llyr Gruffydd Plaid Cymru 3:04, 18 October 2022

Thank you for your statement, Minister. I have to say that this mess shows once again the extent to which we here in Wales are just at the mercy of the whims of Westminster Ministers. It underlines again how the current devolution settlement leaves us effectively fiscally impotent when it comes to protecting our interests, and protecting the people who are vulnerable amongst us, from damaging UK Government decisions.

You recently described being part of the union and having the UK Government there as some sort of insurance policy for Wales, but surely now you have to accept that it's felt a bit more like a millstone around our necks in recent weeks. And if recent events don't make the case for independence, well, surely it does make the case for greater fiscal independence for Wales: more powers to protect our people from the tsunami that we're already experiencing and no doubt will intensify in the coming months.

Now, you stay in the statement that the UK Government holds the key financial levers to make a real difference to this cost-of-living crisis, and it needs to use those tax levers more equitably. Well, why allow the Tories to do their worst, instead of demanding powers for you to do your best for the people of Wales? We know, in Scotland, they can reform that income tax bands. It's a way of better reflecting people's ability to pay. That's the very least that we could expect, I think, here in Wales. But, take it to the other extreme, if the UK Government isn't introducing a windfall tax on energy companies, then why can't we have powers here to do something about it, instead of just complaining in a written or an oral statement?

That said, new powers, yes, okay, that's one thing, but we also need to use the powers that we already have to maximum effect to protect the most vulnerable people from what's ahead. The First Minister was coy again earlier, so I'll ask whether you'll confirm that varying the Welsh rates of income tax is actively being considered by this Government. And will you join Plaid Cymru in accepting that it's looking as if it is going to be necessary to act in that way in order, again, to mitigate some of the devastating Westminster cuts that are looming?

You're right to criticise the shortening of the energy support package to six months, because it does leave a cliff edge and people not knowing what will happen at the end of that period. I understand that you have spoken, as you said, with the Chief Secretary to the Treasury, but what plans do you have to actually speak with the Chancellor himself, to set out not only the case for greater fiscal powers for Wales, but to make sure that he understands the implications of his recent announcements for Wales, and also to make sure, before the statement at the end of this month, that he understands what implications there might be there for us here in Wales?

On energy specifically, will you make the case for those properties that are off grid, particularly, because it is something that is of huge concern? I know that Ben Lake, my Plaid Cymru colleague at Westminster, raised the need for support in relation to oil and people who are off grid. The Chancellor didn't rule it out. So, in your discussions with the Chancellor, will you please reiterate the need to extend support to those who aren't currently able to access it in the same way as most people?

Now, yesterday, your written statement said that the Chancellor offered nothing to comfort the most vulnerable. Well, we could levy the same criticism at your statement today. There's nothing new there; a few vague references to previously announced support schemes. I was hoping that you'd be actually coming here today with something a bit more concrete to tell us. And you do say that the UK Government needs to refocus its efforts to help those most in need. Well, surely that's just as true for the Welsh Government as well, and is it not time for you to be preparing an emergency budget here in Wales to refocus and to reallocate resources to help the most in need, as you say, and to do so for this financial year, of course, and not wait until next year?

And finally, in relation to next year's budget, you've said it twice now, in the last written statement yesterday and your oral statement today, that the Welsh Government's budget will be introduced on 13 December. My understanding was that the original agreement was that it would be no later than 13 December, and that that date was chosen, or specified, because it was in relation to the expected UK Government fiscal announcement in November. Given that that has now been brought closer to today, surely you're in a position to publish your draft budget earlier. That would allow greater scrutiny from this Senedd, and it would also give a longer lead-in time for those public service providers in Wales who are going to have to make every single penny work as hard as possible.