Draft Government of Wales Act 2006 (Increase of Capital Borrowing Limits) Order 2026

Anna McMorrin Excerpts

Wednesday 1st July 2026 General Committees

[The Parliamentary Under-Secretary of State for Wales (Anna McMorrin)]

I beg to move,

That the Committee has considered the draft Government of Wales Act 2006 (Increase of Capital Borrowing Limits) Order 2026.

It is a pleasure to serve under your chairship, Mrs Harris. I am grateful for the opportunity to debate this draft order today. The Government were elected on a manifesto commitment to work in partnership with the Welsh Government to ensure that the Welsh fiscal framework delivers value for money.

It was as a result of joint working between both Governments that my right hon. Friend the Chancellor announced, as part of the autumn Budget last year, some fiscal flexibilities for the Welsh Government’s budget to enable them to better support businesses and public services in Wales. That included increasing the Welsh Government’s annual and cumulative capital borrowing limits, their overall reserve limit and their annual RDEL and CDEL drawdown limits by 10% this year. From next year, each of those limits will be uprated annually in line with inflation.

Only one of those limits has a legislative basis: the Welsh Government’s cumulative capital borrowing limit. Section 122A(1) of the Government of Wales Act 2006 currently sets this limit at £1 billion. Section 122A(2) of that Act enables the Secretary of State to vary this limit with the consent of the Treasury. The order before the Committee this afternoon, made under section 122A(2), will increase the Welsh Government’s cumulative capital borrowing limit by £100 million, in line with that autumn Budget commitment.

The Welsh Government remain accountable to the Senedd for how they use these increased borrowing powers. The Wales Office will bring forward further orders annually to further increase this limit in line with inflation, as is the current process in respect of the Scottish Government’s borrowing limits.

In summary, this order will increase the Welsh Government’s cumulative capital borrowing limit to £1.1 billion, in line with the commitment made at the autumn Budget last year. The changes to the fiscal framework, together with additional funding through Barnett consequentials and the largest settlement in the history of devolution, mean that the UK Government are providing the Welsh Government with nearly £6.5 billion in additional spending power.

[Peter Fortune (Bromley and Biggin Hill) (Con)]

What impact assessment has been done to look at the Welsh Government’s ability to service the additional borrowing?

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[Anna McMorrin]

To be clear, that accountability is with the Senedd; its Members will be holding the Welsh Government to account. I commend this draft order to the Committee.

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[Anna McMorrin]

I thank the hon. Member for East Grinstead and Uckfield for her contribution. The draft order delivers the Government’s autumn Budget commitment to increase the Welsh Government’s cumulative borrowing limit by 10%. I mentioned in my opening remarks how we got to that.

To be clear, this order gives the Welsh Government additional flexibility to manage their own budget; it does not change the overall funding settlement or the Barnett formula. It was agreed at the last Budget and announced by the Chancellor then. The Welsh Government are accountable to the Senedd for how they use these borrowing powers. From Westminster, we will be looking to our colleagues in the Senedd to scrutinise how the Welsh Government use the additional powers.

The Welsh Government are accountable for ensuring that this extra borrowing—indeed, the whole borrowing—delivers value for money for the people of Wales and all our constituents. I am very proud to be part of a UK Labour Government who have delivered the biggest settlement in the history of devolution. It will be a game changer, and it will make a difference to people on the ground.

I am aware that many Members are trying to get to the football. If there is anything further that the hon. Member for East Grinstead and Uckfield would like to raise, I am very willing to have that conversation, but it is the Senedd that scrutinises the Welsh Government. I am proud of the UK Labour Government’s work in enhancing these powers.

[Mims Davies]

I thank the Minister for giving way; she is being very generous to us all. I just want to reiterate the point about accountability. Between the announcement of this measure in the autumn Budget, and its publication on 2 June and the Minister’s presenting it today, the process, group of people and focus in the Senedd have changed. People’s feelings about the lack of accountability and openness, and about the wanton spending of other people’s money, are very acute when they are finding the cost of living so challenging. I offer to work with her if these powers are granted—we will not divide the Committee today—to make sure that we all keep watch equally that they do change lives on the ground, and we are willing to roll up our sleeves if we see that the money is being used wastefully and lives are not changing.

[Anna McMorrin]

I thank the shadow Minister for her comments. Absolutely; this is about ensuring that all the people of Wales feel the value of these additional spending and borrowing powers. Equally, this Labour Government are proud to ensure that the huge devolution settlement is felt by the people of Wales and in the communities of Wales, not just in one part of the country but across the whole of Wales. As a Wales Office Minister, I am committed to working with my counterparts in the Welsh Government, and with colleagues right across the House, to make sure that happens.

I thank the shadow Minister for her productive approach to the debate, and I am grateful for the way in which the UK and Welsh Governments have worked together very closely to produce the draft order. I commend it to the Committee.

Question put and agreed to.