8. What discussions has the Welsh Government had with the UK Government regarding the UK budget in March? OQ59123

The Minister for Finance and Local Government attended a meeting of the Finance: Interministerial Standing Committee last week in Edinburgh to discuss the UK Government's spring budget with the Chief Secretary to the Treasury, amongst other finance-related issues.

Thank you very much, Trefnydd. A fortnight ago, I raised with you the need for £500 million to ensure that Crossrail Cardiff goes from the bay to Llantrisant. With The Times reporting on Friday that the costs of HS2 have now reached £72 billion, how determined is the Welsh Government to ensure that we in Wales receive the Barnett consequential from this major project? Thank you.

I think I said a couple of weeks ago to you that we obviously support the Cardiff Crossrail project that the UK Government did announce under its levelling-up fund, and we're matching that investment, but we weren't involved in the development of that levelling-up fund, so we've had no role in strategy or delivery.

I think the continued categorisation of HS2 by the UK Government as an England-Wales project, despite the recommendations by the Welsh Affairs Committee to reclassify as an England-only project, really scuppers our ability to be able to invest in rail in Wales. And I know that the Minister for Finance and Local Government continues to make that point to the Treasury, either to the Chancellor or to the Chief Secretary to the Treasury, and has asked the UK Government really to revisit the classification decision, and then provide Wales with a Barnett consequential, which would be around £5 billion. And, as I say, she did raise it again, I think, last week in her—she is nodding, so she did raise it again last week in her meeting with the Chief Secretary to the Treasury.

The Chancellor's and the Prime Minister's focus on stability, which I'm sure will continue in the spring budget, lays the ground for the UK to focus on growth. With the latest predictions that the UK economy is expected to recover sooner than thought, there is an opportunity in Wales for us to gear up into the high-growth innovative economy that we need to be, building on the assets we have. How is the Government planning to stimulate economic momentum, boost confidence and encourage investment here, and how are you planning to tackle the labour and skills shortages to help that growth?

Well, I wish I had your confidence that the Prime Minister and his Chancellor will be addressing their priorities in the spring budget. I know that the Minister for finance obviously discussed what was upcoming; I don't think she got very far with much information about what was going to be upcoming in the spring budget. What's really important is that we get our fair share of funding, and we've seen a significant decrease in our budget, particularly our capital budget, over the past few years. But obviously, investing in skills is very important for the jobs, going forward, and we know how quickly different jobs come long, and making sure that we have people with those skills.

Again, around the forecast of the economy, you'll remember that, just a couple of weeks ago, the International Monetary Fund forecasted that the UK will be the only major economy to shrink into 2023, with a falling GDP of 0.6 per cent, so I'm afraid I really don't share your confidence.

I'd just like to take this opportunity to raise rail enhancement funding. As everyone in this Chamber knows, including those on the Conservative benches, Wales has been completely shortchanged by Westminster Governments: no Barnett consequentials from HS2, and underfunding over years that goes into billions. The Conservatives' own Hendry report endorses the recommendations of the Burns report, agreeing that it has the right transport solution for south-east Wales, so, in any budget discussions, have you been told when the much-needed funding for the upgrade of the relief lines between the Severn tunnel and Cardiff will finally be forthcoming?

We are awaiting confirmation of the final Wales rail enhancement funding from the UK Government. You will have heard me say in my earlier answer that the Minister for Finance and Local Government raised this again last week with the Chief Secretary to the Treasury, particularly around HS2 being an England-and-Wales project. I'm really not sure how they can possibly believe that; it's really important. And I don't think that the Minister's going to let that drop; I think she's going to persevere in trying to make sure that we do get that £5 billion consequential. We know that the rail enhancement funding really would bring clear benefits; that we would be able to deliver that integrated public transport network and encourage that modal shift that we want to see, but unfortunately, the UK Government has consistently rejected our request, continually—as you pointed out—failing to invest in our infrastructure here in Wales. And in the absence of the appropriate devolution of rail infrastructure and a fair funding settlement—I think both of those things—we really do need the UK Government to fulfil their responsibilities to improve our rail network in Wales.