6. What assessment has the First Minister made of how the UK Government's autumn statement will affect communities in Wales? OQ58765

9. What assessment has the First Minister made of the implications for Wales of the UK Chancellor's autumn statement? OQ58728

Thank you. Llywydd, I understand that you have given permission for questions 6 and 9 to be grouped.

Despite some modest additions to our settlement over the next two years, the autumn statement goes nowhere near the pressures we are facing. The reality is that we are still facing a real-terms cut in our budget, which will have a significant impact on communities and public services in Wales.

Thank you for that. Communities across Wales are already suffering. After 12 years of austerity, vital services are in no position to face further cuts. I think that honesty is crucial in politics, so it must be underlined clearly that it is the Government in Westminster that is at fault for the seriousness of this situation, and the fact that they deny this and instead blame the worldwide situation is a cause of great disappointment. In Wales, according to the Wales Governance Centre, your Government budget is facing a significant funding gap as a result of inflation, there's a decrease of 7 per cent in household disposal income, and energy bills have gone up again, as well as higher taxes. So, can you tell us, please, how you will seek to strike a balance between the need to maintain services with the need to support those people facing serious hardship? With such tight budgets, will you prioritise the most vulnerable as you put together your budget, to try to prevent as much suffering and as many deaths as possible?

Thank you. I think you make a really important point about transparency and where this fault lies. I quite agree with you. With the UK Government, we've had a decade of austerity, and now I think this is even worse than the austerity elements that they brought in over the last decade. The UK is in a deep recession, and household incomes are falling at an incredibly fast rate. What did the Chancellor do last week? He just presented us with an invoice for the UK Government's failure to manage the economy and public finances over the last 12 years. We have got the highest inflation in 40 years. We have got the highest tax burden in 70 years. This is so serious, and I think that it is absolutely important that that is communicated with our constituents.

The Minister for Finance and Local Government has repeatedly called on the UK Government to invest in public services. What the Chancellor said was that he wanted to provide support to the most vulnerable, but I think that there's a real concern that that's just not going to happen. That's why the Welsh Government will do all that it can. I mentioned in earlier answers that, obviously, we are looking at our draft budget, which will be published next month. We are really carefully considering the detail of the autumn statement, and I can assure everyone in this Chamber that, as a Welsh Government, we will continue to prioritise our budgets to shield the most vulnerable and maintain our commitment to that stronger, fairer, greener Wales.

Minister, my constituents are already struggling to afford their bills—not just people on low incomes but on middle incomes as well. The Office for Budget Responsibility forecast last week, in response to the autumn statement, states that the next two years will see the biggest fall in household incomes in generations. More than half of households will be worse off after the autumn statement. British families will lose 7.1 per cent of their disposable income. This year, we will see the biggest fall in real disposable income per head since the late 1940s. Next year is not that much better; we will see the second largest fall on record. So, will the Welsh Government continue to urge the UK Government, in the strongest terms, to seriously tackle this cost-of-living and household income crisis, which is devastating people right across the UK, or, frankly, step aside and let a Labour Government that will tackle this get in place as soon as possible?

Yes, absolutely. I know that the Minister for Finance and Local Government will continue to press those points that you made. They are simply staggering numbers in that OBR report that you referred to. Real household disposable income per person will fall more than 7 per cent over the next two years, as you said, and that’s the biggest fall on record. Income is now going down to 2013 levels—nine years ago. I mentioned that we are already in a deep recession. The inflation shock that we have had since last month varies between different measures. Another shocking revelation that I saw was that the Organisation for Economic Co-operation and Development has stated that the UK is forecast to have the worst growth performance in the G20 over the next two years, with the exception of Russia. It’s just incredible. I know that the Minister will continue to have those discussions and, as I said, we will be looking very carefully at the details of the autumn statement as we prepare to bring our draft budget forward next month.

Of course, we will be debating the autumn statement a little later on, and I will have a contribution there, I hope. But it does include some very welcome support for communities, particularly given the current cost-of-living crisis, through policies such as the increase in the national living wage and the minimum wage, and an uplift to pensions and benefits. It's no surprise that we've heard no reference to those in the Chamber today so far.

In England, the statement will provide an additional £1 billion for the household support fund. This will mean that Wales will receive a Barnett share of that consequential funding, with some £158 million being made available to the devolved Government. In Wales, we have the discretionary assistance fund, which provides much needed help for people in times of financial difficulties. As you will appreciate, Minister, the current inflationary pressure and cost-of-living issues have meant that more people are at risk of suffering from financial difficulties. However, the discretionary assistance fund is currently only an option for people on certain benefits, meaning that those who need support may find themselves unable to access financial assistance. Will the Government consider using the Barnett consequentials from the household support fund announcement to further boost funding for the DAF, enabling the expansion of the eligibility criteria, so that more people can access the support that they need?  

Thank you. As I mentioned in earlier answers, the Minister for Finance and Local Government—obviously, the whole of the Welsh Government—will be looking very carefully at the detail of the funding that we were allocated last week, as we prepare to bring the draft budget forward.

In relation to the discretionary assistance fund, I agree with you—it's an excellent fund. The offices are actually based in my own constituency in Wrexham and I've listened in on calls on several occasions, and you can see how desperate people are. But I will say that the Chancellor missed some really good opportunities last week to help with people from low-income households. He could have abolished the benefit cap completely, along with the two-child limit, for instance. There are some really harsh Department for Work and Pensions policies that could have really been looked at. 

Good afternoon, Minister. 

Thanks also to Delyth for raising this issue.

I just really wanted to follow up on something you said in response to Delyth, which is about shielding the most vulnerable, and the commitment of the Welsh Government to do that in the light of what is in essence a really difficult budget decision from the Welsh Government. I wanted to raise the issue of child protection services and how under pressure they are. So I just wondered whether you could comment on the situation with regard to child protection, social workers and those services, which need to be well-funded in order to ensure that children are safe and protected. Could you just comment on that, particularly in light of what are, in essence, cuts imposed on us from Westminster? Diolch yn fawr iawn. 

I can't say anything specifically around how we will fund child protection services going forward. As I say, we will look in the whole at how we use the funding that was allocated to us last week, but I absolutely agree with you about targeting support to the most vulnerable and prioritising public services—that's an absolute necessity, and it's what as a Government we've always tried to do. For instance, we've invested significant funding in schemes over the last year to provide direct support to people, so the winter fuel support payment, for instance, and you heard me in an earlier answer talk about pupil deprivation grant access, and we've given additional funding there. Obviously, free school meals is another area where we're trying to help families with the cost of providing for their children who are going to school.

Can I ask you, Minister—? You're being very uncharitable, I think, about the UK Government's autumn statement. You know full well, all of you on those benches know full well, that the Welsh Government has currently got its largest budget ever. It's a record-breaking budget, and it's going to go up over the next two years. We had an autumn statement that protected the triple lock on pensions, that increased people's benefits at the rate of inflation, that protected the budget for our schools, and also, of course, invested more money into our national health service. Now, I know that your Government's record on funding the national health service is appalling—the only Government in the whole of the UK to have ever cut an NHS budget—but will you commit today to increasing the NHS budget in real terms as the UK Government is in England over the next two years?

I am not going to make any spending commitments today. You will have heard me say several times this afternoon that these will be decisions led by the Minister for Finance and Local Government, but taken across the whole of Government as we work towards publishing our draft budget next month.

I don't think I've been uncharitable at all. I think I've been very clear. I think what Delyth Jewell said before about being transparent is very important. I've just said how it is, and that is, our overall settlement over the three-year spending review period is worth less in real terms than it was at the time of the spending review last year. Now, that's a fact. You can say 'here we go'—that is a fact. We will receive, as you say, an additional £1.2 billion over the next two years—not this year, the next two years. But our overall budget in 2024-25 will be no higher—no higher—in real terms than in the current year, and our capital budget will be 8.1 per cent lower. Inflation, which is 11.1 per cent, has eroded our budget to very worrying levels, and of course that then has an impact on local authorities and it has an impact on our NHS. They're reporting significant shortfalls as a result of inflation, pay pressures, and, of course, the rising energy costs, and I'm afraid that the Chancellor's statement last week failed to address any of that. 

Now, I'm sure that your constituents will have heard your praise for the UK Government, and they can form their own opinion.