Spring Budget: Wales

Debate between Gerald Jones and Wayne David

Wednesday 29th March 2023 Westminster Hall

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Newport West (Ruth Jones) on securing the debate, and the passionate way she opened it.

We can all agree that, when the Chancellor of the Exchequer presented his Budget, it was an opportunity to address the worsening impacts of the cost of living crisis, and to drive economic growth in Wales and across the United Kingdom. The Budget is also a statement of priorities, but it was clear from the lack of extra funding for our public services, as well as the bare minimum of additional support for people and businesses who need help now, that the UK Government do not have a grip on the bigger picture and are content to tinker around the edges.

The Chancellor announced that Wales would receive an additional £178 million over the next two years, as a result of spending decisions made in England, but the settlement in 2023-24 is still up to £900 million lower in real terms than expected at the time of the 2021 spending review. This was meant to be a Budget for growth but, while the London School of Economics Growth Commission, the OECD and others have highlighted the vital importance of additional public investment in the infrastructure to improve productivity and growth, the Budget contained a derisory £1 million extra in capital funding in 2024-25 for Wales.

We have had a wide-ranging debate. My hon. Friend the Member for Newport West rightly highlighted the UK Treasury’s callous clawback, which I will return to later. She also talked about the downgrading of growth, and highlighted the case of her constituent Dawn Jones. I am sure many others across Wales will relate to the concerns raised by her constituents and their experience in dealing with the Tory cost of living crisis.

My hon. Friend the Member for Caerphilly (Wayne David) raised the excellent report of the Bevan Foundation, and the evidence that the most vulnerable are affected by this Government’s policies. My hon. Friend the Member for Aberavon (Stephen Kinnock) highlighted the importance of the steel industry, its being the heart of economic growth. The hon. Member for Ynys Môn (Virginia Crosbie) picked highlights; in response to an intervention by the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) about the level of local housing allowance being far too low to meet housing needs across Wales, the hon. Member continued to talk about the Budget being overwhelmingly positive. That is definitely a matter of opinion, and not one shared by many of my constituents or others.

My hon. Friend the Member for Cynon Valley (Beth Winter) talked about the reality check of work on the cost of living crisis that was carried out last year, and about the need for fair wages for our public sector workers. In an intervention, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) talked about the use of local authority reserves. As an ex-local councillor of 20 years, I think people often do not differentiate between free reserves and committed reserves. The vast majority of reserves held by most local authorities tend to be committed reserves, rather than reserves that they can use freely. Many do use free reserves to plug the gap, and there is more of that at the moment.

My hon. Friend the Member for Cynon Valley also mentioned that the Welsh Government were cut out of the process around the shared prosperity fund, something that many colleagues have called out and said should be rectified. It is not right that the Welsh Government are cut out of discussions of such a significant investment in Welsh communities.

[Wayne David]

Does my hon. Friend share my concern that local authorities believe there is, unfortunately, a distinct possibility that they will be unable to spend the moneys that have been allocated, and we will see yet another clawback by the Government up here?