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 3:15 pm on 18 October 2022.

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Photo of Alun Davies Alun Davies Labour 3:15, 18 October 2022

Thank you, Minister, for your statement this afternoon. I’ll start by welcoming the remarks of the Conservative spokesperson, actually. I know how difficult these contributions can be, but you did seem to be struggling towards contrition. I hope that he’s able to complete the journey over the coming weeks.

We know that the failure of the UK Government to manage the overall economy is going to have real-terms consequences, and the Minister has outlined the devastating consequences for our public services as a part of that. However, I’d like to address other matters this afternoon. We also know that the UK budget, if you like, has a £40 billion Brexit hole in the middle of it, and whatever else we do in terms of economic decision making, unless we’re able to trade freely with our closest neighbours we’re always going to have an economy that’s underperforming. I would hope that the Welsh Government will begin to look seriously now at how we start the journey towards rejoining the customs union and the single market to ensure that we’re able to restart economic activity in the country, but also, Minister, that you lead a debate on taxation.

You’ve answered, I thought, very fully the questions raised by Plaid Cymru this afternoon, but there does need to be a debate in Wales, in this place, about levels of taxation. We cannot deliver the services that we want to deliver and create the country we want to live in without the taxation income that’s required in order to do that. Our levels of taxation, whatever penny here or penny there, are significantly below the levels in other comparable economies, and that means that our public sphere is always going to be underinvested in relative terms. I hope that we can begin that debate.

As a part of that debate—and I won’t press the patience of the Presiding Officer any further—there needs to be a debate on the financial powers available to this place. The First Minister was very clear in answer to a question from the Member for the Cynon Valley earlier that the borrowing powers available to the Welsh Government are far from adequate—in fact, they’re entirely unsatisfactory and inadequate. But we need to look at borrowing powers amongst a suite of other powers available to this place and to the Welsh Government to ensure that we do have all the tools available to us that we require in order not just to deliver on our ambitions for the programme for government, but to defend Wales from the incompetence of a Tory Government in London that really doesn’t care at all about us and our country.