Diolch. I'm pleased to open this afternoon's debate on the Welsh Government's draft budget for 2023-24. Since we first had the opportunity to debate the draft budget in the Senedd on 13 December, Senedd committees have been busy scrutinising our spending plans. I welcome the very constructive sessions that I have had with the Finance Committee and that my ministerial colleagues have had with their respective committees. Before I provide some early reflections on the themes arising from scrutiny, it's important to recognise again the challenging context in which this draft budget is prepared. This has been a year where we have seen the ongoing impacts of inflation, three Prime Ministers, three Chancellors, and the shocking mismanagement of public finances by the UK Government. We received an autumn statement by the latest Chancellor that fell far short of the interventions needed to meet the challenges that we face. But, despite this, and building on our three-year spending review, the draft budget balances our response to the immediate crisis alongside investing in longer term change. We have taken difficult decisions, but we did so in the spirit of collaboration and transparency and putting the people and communities of Wales first. 

Our main priorities for the 2023-24 budget are protecting front-line public services and our ambitions for the future, continuing to help those most affected by the cost-of-living crisis, and supporting our economy through recessionary times. Unlike what the Welsh Conservatives have set out in their amendment, we believe that those priorities—protecting public services, businesses and people—are the priorities of people in Wales. Building on the substantial increase in funding that I provided in our spending review, in this 2023-24 budget, I have allocated £165 million to the NHS, £70 million to deliver the real living wage for social care, and £227 million for local government. Core revenue funding for local government will increase by 7.9 per cent on a like-for-like basis, compared to the current year. No local authority will receive less than a 6.5 per cent increase. Alongside our support for public services, we will continue to support the economy and businesses with direct investment of £319 million for non-domestic rates relief. In response to the cost-of-living crisis, this budget targets support at those who need it most, including through investment in our basic income pilot and discretionary assistance fund. 

I'll now turn to the points raised in scrutiny. I was pleased to see the Finance Committee recognising the difficult context in which we are delivering this budget, and I will, of course, continue to call on the UK Government to recognise the growing impact of inflation and to uplift our budget accordingly at the upcoming spring statement. I will continue to call on them to provide us with the fiscal flexibilities that we need to make the best use of our resources in difficult times. I welcome the Finance Committee's support for this, and I will be raising it at the next Finance: Interministerial Standing Committee meeting, which will take place later this week. And alongside my ministerial colleagues, I will continue to call on the UK Government to deliver a range of interventions to support those who need help most. The joint review of inter-governmental relations includes a package of reforms as the basis for the conduct of inter-governmental relations. It's our hope that we can work pragmatically with the UK Government, through the new inter-governmental relations review arrangements, before needing to invoke the formal dispute resolution process. However, we will not hesitate to use that process when we deem it necessary. 

I'll now turn to the amendments put forward by Plaid Cymru on raising Welsh rates of income tax. We have been very clear that now is not the time to raise Welsh rates of income tax. Of course, we consider all of our tax levers as part of our budget preparations. However, the current tax burden is at its highest level for over 70 years. Rising inflation is affecting people across Wales, and we're in a cost-of-living crisis. We will not ask people to pay more at this time. Raising the higher and additional rates of income tax wouldn't raise enough money to make a significant difference to our spending plans. The largest contribution would have to come from the basic rate band taxpayers, and let's be clear that this would impact the lowest-paid workers in Wales. And these are the same workers who are seeking help from food banks, the same workers who are having to choose between heating their homes and feeding their families. The use of Welsh rates of income tax should be considered and strategic.

And turning to capital, there's no additional capital funding from the UK Government in the autumn statement, so there are no capital allocations within this budget. I'll be outlining further financial transactions capital allocations within our final budget, aligned to our priorities.

Turning to the information provided as part of the budget package this year, it's really important to remember that last year we delivered a multi-year budget up to 2025, alongside a zero-based review of capital allocations. This year was a single-year budget confirming changes to the budget settlement as part of the UK Government's autumn statement. These two budget packages—the multi-year and the single year—should clearly be considered together, and this will be the same for next year unless there are some fundamental changes to our budget settlement. The budget documentation this year focuses on the important changes that we've implemented for this budget round, rather than restating what's already been published, scrutinised and debated by this Senedd. I am, of course, open to further discussions to explore what additional information committees and stakeholders believe would aid scrutiny.

On the issue of pay, we recognise the strength of feeling that's been expressed by staff in these ballots for industrial action. We believe that all of our public sector workers should be fairly rewarded for the important work that they do. Unfortunately, our financial settlement falls far short of what is needed to meet the very significant challenges faced by our public services and workers across Wales. We cannot raise enough funding fairly enough through the limited powers we have to provide an inflation-matching pay rise to public sector workers. The autumn statement was a missed opportunity for the UK Government to give hard-working public sector workers a pay rise and prevent widespread disruptive industrial action across the UK.

But I am pleased that, in recent days, we have made progress in our discussions with trade union partners that have resulted in the current round of health strikes largely being paused while trade union members consider the latest offer that we have made to resolve the dispute. Hard choices have been required to find the money for the cost of this pay offer for this year. We've drawn down everything that we can from the Wales reserve and are seeking underspends from across Government to put this offer together. Using this money to increase pay now means that we face even more difficult choices in the future, but we are confident that it's the right thing to do.

In closing, I'd like to offer my thanks to all of those involved in shaping and scrutinising this draft budget. Scrutiny is a crucial part of the process, and, whilst I agree with the vast majority of the Finance Committee's recommendations, there are some that I will need to consider in the light of the limitations that I've set out today. I and my Cabinet colleagues will respond formally to the recommendations of all of the Senedd committee reports in advance of the vote on the final budget on 7 March.

To conclude, this is a budget for hard times and one where difficult choices have been made. However, in supporting public services, businesses and people, we have provided the certainty and clarity needed to navigate these difficult times. And I look forward to hearing from colleagues.