4. Debate on a Statement: The Draft Budget 2023-24

Part of the debate – in the Senedd at 3:47 pm on 13 December 2022.

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Photo of Mike Hedges Mike Hedges Labour 3:47, 13 December 2022

It's obvious that the UK Government has not provided Wales with adequate funding to meet the current pressures. I appreciate that Welsh Ministers have had to make some very difficult decisions during the budgetary process. There was initial funding for Wales of £1.2 billion over two years in the autumn statement. Over half of this came from a decision made about a non-domestic rates policy in England, which has been replicated in Wales. Even after the additional funding in the autumn statement, our settlement is still worth up to £1 billion less next year in real terms. I agree with the Minister; the key priorities must be protecting front-line public services, continuing to provide help to those most affected by the cost-of-living crisis, and supporting our economy through recessionary times.

I welcome the commitment made previously by Peter Fox to produce a Conservative budget. Just a reminder, Peter, that the reduction in tax that your party has suggested needs to be shown on the expenditure line. I normally ask Plaid Cymru at this stage to produce an indicative independent Wales budget. Whilst we have not had that, we have had two suggestions from Plaid Cymru. One is to stop funding the state retirement pension, and the other is to not pay Wales's share of national debt. If breaking away absolved countries of their share of a national debt, we would have a world of microcountries.

Looking at the budget, on taxation, I ideologically would like to see an increase from 45 per cent to 50 per cent for higher income individuals. Those who have got the most money ought to be paying the most—45 per cent is very low for very rich people. But it would only take just over 11 per cent to become taxpayers in England rather than Wales for the increase to raise no money at all. If that went up to 15 per cent, we'd actually take less money. The problem we've got is our border with England. Lots of people who are very rich have houses both sides of the border, and sometimes they make a decision as to where their main residence will be. If we add 5 per cent, not many of them are going to choose their main residence in Wales.

I welcome the additional money for local government. Important as education and social services are, local government is an awful lot more than that. Education is a key economic driver. The more educated the workforce, the better paid they are. If you look at successful economies around the world, they do not pay subsidies; what they do is provide good-quality education, meaning there's a highly educated and skilled workforce. Social care is usually discussed in terms of delayed transfers out of hospital. Good-quality social care can also prevent people needing to go into hospital. I welcome the Welsh Government's commitment to paying social care workers the real living wage. I would go further and bring social care back to being staffed by directly employed local authority staff. 

We have, of course, the Brexit dividend. We no longer have to make farm basic payments. The basic payment scheme, which was a European Union scheme, no longer has to be followed. They were being paid per hectare of eligible land used for farming. The Welsh Government no longer needs to pay it, and that will release money to fund pay increases for those in the health service. Whilst I would abolish it, I am asking the Welsh Government to cap it. While I would cap it at the level of universal credit, because that's what the Government at Westminster and the Conservatives are saying is enough for people to live on, I do not expect the Government to go that far, but I am asking for a cap. For those people who have very large farms, we should stop stuffing their pockets with gold. 

These debates normally revolve around increasing and decreasing expenditure and are not about outcomes. We've got structural problems in Wales, and they need addressing. There is a belief held right the way across the Chamber that bigger organisations provide better services, despite the examples of the Welsh ambulance service, Natural Resources Wales, Digital Health and Care Wales and Betsi Cadwaladr health board. Instead of producing bigger and bigger organisations, we need to restructure organisations to the right size. An area that could be cut to provide the money is Help to Buy; effectively, all it does is help to inflate house prices. I don't believe enterprise zones are cost-effective and they should be reconsidered. Using money to bring branch factories into Wales has not worked. We've seen a number of them come, and we've seen most of them go. If we are using money for economic development, then a better use would be to support start-up companies.

Governments like to legislate, and the opposition would like to legislate. I am asking that priority is given to areas such as animal welfare, action on greyhound racing—legislation that costs little money.  

Finally, on capital expenditure, unused land could be sold off to generate capital receipts, as councils across Wales do. Every person who has led a council in this room will know that they've got land they didn't need, didn't use, and they then sold it on and used that money for the betterment of where they lived. What we have is land banking by the Welsh Government, and by the health service especially, in areas where selling that land could certainly do the Welsh economy a lot of good. Finally, I think the Government are moving in the right direction, but I'd like to see more things done.