Spring Budget 2024: Welsh Economy

Debate between Fay Jones and Nia Griffith

Wednesday 17th April 2024 Westminster Hall

[Fay Jones]

Indeed. It shows what Welsh women can do when we get together.

Turning to the matter at hand, it is absolutely clear that the Conservative Government have a plan to deliver the long-term change that our country needs and that that plan is working. We have seen yet again today that inflation has fallen by over half its recent peak. The cost of living pressure is easing, and economic growth is more resilient than previously suggested. Debt is also forecast to fall. But the recovery is not over yet, and it is at risk from other political parties that do not have a plan for the economy and are instead making unfunded promises that will take us back to square one.

With the economy now turning a corner, the Chancellor has been able to make further tax cuts responsibly to boost growth across Wales and the UK by ensuring that working people keep more of their hard-earned money. Thanks to announcements made in both the autumn statement and the spring Budget, we have seen national insurance cuts benefit 1.2 million workers in Wales.

[Dame Nia Griffith]

Does the Minister accept that while national insurance cuts help all working people, they give a lot of money to the better off and are therefore a very blunt, not at all targeted way of helping people?

[Fay Jones]

The hon. Lady will not be surprised to know that I do not agree. I point her to the fact that at the end of 2010, a worker earning a wage of £15,000 was paying around £1,700 in taxation. Today—after 14 years of a Conservative Government—that amount is around £500. That shows that the Conservative party will deliver for working people.

Thanks to announcements made at the autumn statement and the spring Budget, we have seen national insurance cuts of about £701. Further tax cuts have been announced, included the freezing of fuel duty for yet another year, further easing cost of living pressures and saving the average car owner about £50 over a year. I believe that that is the 14th time since the Conservatives came to power in 2010 that we have frozen fuel duty. Alcohol duty has also been frozen once again to support Wales’s crucial hospitality industry. There was great news for Welsh SMEs, with the UK Government raising the VAT registration threshold to £90,000, building on last year’s autumn statement announcement that the UK Government are backing Welsh business through the British Business Bank’s £130 million investment fund for Wales.

I have listened to a lengthy list of complaints about the Conservative Government, but I remind Labour Members that while we are backing Welsh businesses, their own Government—their own colleagues in Cardiff Bay—have slashed business rates relief from 75% to 40%, meaning that hospitality businesses in Wales will pay thousands more in comparison to their colleagues in England.

The spring Budget also outlined the UK Government’s commitment to securing a diverse energy system with Wales at its heart, through the decision to purchase the Wylfa Newydd site on Ynys Môn. I welcome the shadow Minister’s rather muted celebration of that announcement. New nuclear developments have the potential to transform the north Wales economy, creating thousands of jobs while contributing to our net zero and energy security ambitions. Beyond nuclear, the renewable energy sector is also flourishing in Wales. The Government are supporting floating offshore wind by securing a long-term pipeline of projects in the Celtic sea and unlocking port infrastructure investment through the £160 million floating offshore wind manufacturing investment system. The Chancellor has also announced that the Crown Estate will bring forward an additional 12 GW of floating offshore wind in the Celtic sea in the 2030s.

The Budget was also a great moment for the creative industries—a sector that is hugely important to Wales’s economy. I am mindful of how many Members represent south Wales, so I am surprised this was not mentioned. Cardiff is now one of the UK’s largest media productions centres outside London. I was thrilled to see that the UK Government continue to back the creative sectors in Wales, with £500 million of new tax reliefs for the UK industry, as well as—a cause close to my own heart —a further £5 million for the agrifood industry in mid and north Wales, supporting research and development in our rural heartlands and helping to develop a more sustainable future for our vital agriculture sector. Again, this stands in stark contrast to the actions of the Welsh Labour Government, who have cut the rural affairs budget.

[Dame Nia Griffith]

Will the Minister give way?

[Fay Jones]

I will not.

Indeed, this Government are working hard to ensure that Wales’s sector strengths are empowered to move to the next level. That is why we confirmed at the autumn statement that there will be two investment zones in Wales: one located across Cardiff and Newport—again, a surprising omission from the speeches of the hon. Members for Newport West and for Newport East (Jessica Morden) ; and a second zone located across Wrexham and Flintshire. The Chancellor confirmed at spring Budget that the programme has been extended in Wales from five to 10 years, with each receiving £160 million in funding over this period. This will supercharge key sectors across both locations, creating jobs delivering growth and prosperity across Wales.

A determination to create new jobs has also been spearheaded by Wales’s freeports programme, and here —the hon. Member for Newport West will be surprised to hear me say this—I will praise the Welsh Government for working hand in hand with the UK Government. The freeports programme was further supported once again at this Budget by the Chancellor when he announced that there would be an extension in tax relief from five years to 10 years, providing greater certainty to businesses looking to invest, delivering growth and jobs, and levelling up the economy.

The Chancellor’s spring Budget has provided Wales with substantial additional funding, as I think was mentioned by a number of hon. Members this afternoon. Back in 2021, a record-breaking £18 billion block grant was secured at the spending review. This year’s Budget announced almost £170 million of additional funding through the Barnett formula for 2024-25. That is on top of the £820 million already provided to the Welsh Government since that record-breaking grant in 2021—blowing away Labour’s and Plaid Cymru’s argument that Wales has been underfunded. This is almost an extra £1 billion in additional funding for the Welsh Government. On top of this record funding, the Prime Minister recently announced £60 million for apprenticeships in England. That will result in yet more money for the Welsh Government.

Despite the negativity of Members opposite, there is no doubt that the Welsh Government are adequately funded to deliver on their responsibilities. It is a question of priorities. While the Conservative Government are pouring billions of pounds into Wales and turbocharging the Welsh economy, it is the decisions of the Welsh Labour Government, propped up by Plaid Cymru, that are undercutting Welsh public services.

I was disappointed by the negative and miserable tone taken by Opposition Members during the debate in relation to levelling-up funding in Wales and was surprised to see them criticise the record amounts of funding received in their own local authorities. An announcement at the Budget added to our commitment of long-term regeneration and growth in Wales. I am thrilled that Rhyl is the latest of five Welsh towns to benefit from £20 million as part of the long-term plan for towns.