4. Debate: The Final Budget 2023-24

Part of the debate – in the Senedd at 3:33 pm on 7 March 2023.

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Photo of Mike Hedges Mike Hedges Labour 3:33, 7 March 2023

I intend to make several comments on the budget, but, first, I want to address the process. We are setting the budget for all devolved services in Wales. We continue to repeat we are a Parliament. Yet we timetable only one hour for the final debate on the budget, after half an hour to decide income tax rates. Put into context that Swansea council spent over four and a half hours setting their council tax and spending proposals for 2023-24, which is, historically, a short meeting; I've attended a council meeting that lasted over six hours setting the budget. 

The budget does go through scrutiny by the Finance Committee, but the final decision is being made here today. Compare this to Westminster—the budget is usually followed by four days of debate on the budget resolutions. These are the tax measures announced in the budget, and each day of day of debate covers the different policy areas, such as health, education and defence. Why does the Welsh Government think that one hour is sufficient to enable final scrutiny of the budget, and half an hour to set income tax rates? And today, the budget is not even the main item on the agenda; we've got a major item coming up of passing legislation. If we don't treat ourselves seriously, if we don't treat the budget process seriously, why would we expect anybody else to treat what we do seriously?

On the budget itself, budgets are always about choices. We know rates are the business tax most disliked by businesses. This is because there are very few tricks, short of demolition, that can be used to reduce the rate bill. The draft budget 2023-24 set out that over £140 million is allocated for retail, leisure and hospitality relief, although I've also seen a figure of £116 million mentioned on the same item. And it says:

'We will continue to provide support for those sectors most directly affected by the pandemic through a 2023-24 retail, leisure and hospitality rates relief scheme. This will provide more than £140m of non-domestic rates relief for eligible businesses.

'Retail, leisure and hospitality ratepayers in Wales will receive 75% nondomestic rates relief throughout 2023-24. Like the similar scheme announced by the UK Government, the Welsh Government’s scheme will be capped at £110,000 per business across Wales.'

Scotland does not have such a scheme. Things like fast foods are franchised, including McDonald's, KFC, Subway, Starbucks, Costa Coffee, Domino's pizza. So, each franchise is an individual business, so the rate relief on each business, as far as I read it—the Minister might tell me I'm wrong, and they're going to aggregate businesses up when they're franchised—[Interruption.] Thank you. As I've just been told; other restaurants are available. [Laughter.] If I'd gone through the whole list, I'd be in trouble with the Deputy Presiding Officer. Why does the Government think it's good use of taxpayers' money to support fast food businesses? We don't actually have joined-up thinking at all, do we? Because, quite often, we say, 'We don't support out-of-town shopping, we don't support fast food', and yet, once we come to doing rate relief, 'Yes, we'll help them.'

I take it from the announcement that large hotels in Wales will also get rate relief. This rate relief will help businesses' bottom lines, but I remain unconvinced that it will aid the Welsh economy. The Scottish no longer provide this support; England does. This money could be better used to pay public sector workers; I'd prioritise them over fast food and hotel businesses. And I think that's one of the things—everybody has talked about spending money; I've talked about trying to get some money to spend.

The Farmers Union of Wales has asked that basic farm payments are capped at £15,000 per year. I've heard no argument against this capping of basic farm payments. This is a Brexit dividend—following leaving the European Union, we don't have to pay them anything. I'm in total agreement with the Farmers Union of Wales regarding basic farm payments: they suggest we provide support to the small farmers in Wales, but cap payments to the larger and more profitable farms.

Overall, I welcome the Welsh Labour Government's spending plans, which will help to protect public services and the most vulnerable in the face of a perfect storm of financial pressures. Ministers have taken difficult decisions to reprioritise funding from within budgets to maximise support for public services and people and businesses most affected by the cost-of-living crisis and recession. The budget also allocates extra money for the NHS, councils, education. I have previously asked for EMA to be expanded and EMA to be increased; that's not a large sum of money, but it would make a big difference to many poor people. And Wales needs to prioritise research and development for economic sustainability, to support innovation in Welsh universities. I've also continued to call for an uplift in equality-related money that comes directly from the UK Government consequential to ensure that it matches spending in England. University research is crucial to developing the Welsh economy. I'll be supporting the budget, but hope that, next year, we'll look at rates support and basic farm payments to give us extra money.