Spring Budget 2024: Welsh Economy

Liz Saville Roberts Excerpts

Wednesday 17th April 2024 Westminster Hall

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Diolch yn fawr, Mr Dowd. I congratulate the hon. Member for Newport West (Ruth Jones) on securing this debate. The Government have tried to spin the Budget as the deliverer of long-term growth for Wales, but people’s response is at odds with the spin. The lack of faith in the Government’s rhetoric is rooted in what they experience day in, day out, and how little faith they now have in attention-seeking announcements.

The real story is one of stagnating living standards, higher taxes on poorer people, cuts to public services on top of years of austerity, and food banks providing meals to working families. The Budget’s headline announcement of a 2p cut in national insurance plays out in different ways in different places. London wage earners will benefit the most, at £621 on average, while those in Wales will get only slightly more than £1 a day —£380 on average.

This is not a matter of begrudging gains for some people in some communities, but what needs to be called out is the disregard for how the national insurance cuts, as a policy, will entrench inequality in different parts of the United Kingdom. There is nothing in the spring Budget to address the deep economic challenges facing Wales, such as flagging productivity. In Wales, gross value added per hour worked is 84% of that of the UK—the lowest productivity of any of the four UK nations, although it varies within Wales and in the English midlands. It plays out in different places in different ways.

Those indicators also reveal how little effect that worthy, familiar, perhaps misused 2019 election slogan of levelling up has actually had. I know the Tories will delight in telling us that Wales has had more than our per head of population share of levelling up since then.

[Alex Davies-Jones]

On that point about the Tories telling us we have never had it so good and Wales is benefiting, will the right hon. Member join me in being disappointed that, apart from the Minister, who is compelled to be here and for whom I have a lot of respect, there is not a single Welsh Conservative MP in this debate? That shows how much contempt and disregard they have for the people of Wales.

[Liz Saville Roberts]

They must be content with the crumbs that we get from the table with levelling up, frankly.

Is the per head of population distribution really a good measure of success? Under the European funding schemes, Wales also got the highest per head of population contribution for a reason, and the reason was recognised deprivation—proven need. How has the Tory levelling-up agenda grasped the challenge of replacing the European money previously distributed specifically to lift the poorest communities out of poverty? I will tell hon. Members how it has done that. It has done it by invoking the United Kingdom Internal Market Act 2020 to undermine the Senedd and any pretence at strategic working. It has done it by setting cash-strapped local authorities in direct competition with one another, like supplicants begging for pennies. It has done it by providing money without sufficient time even to use it to best effect. And it has done it by ensuring that there is scant effective evaluation of money used, so that we do not even know whether it is levelling anything up for anybody.

Of course, that is not the point. Levelling up was never about ensuring that Wales got not a penny less than it did under European funds. We know that we are getting £1.3 billion less. Levelling up has become a byword for cynical short-termism, lollipops for a Government to hand out with an eye to the next election—pork barrel politics. That is clear from the fact that the Budget included Canary Wharf in the £242 million of London levelling-up cash. Canary Wharf, of all places! That is hardly somewhere that needs further investment and levelling up when compared with other places in the UK.

The Chancellor announced departmental spending cuts of up to £20 billion in the spring Budget. Let us be clear that those cuts will make a wasteland of our public services, and they will do so in a country, our country—Wales—where we place a high value on how a community works for everyone. I fear for the future of Welsh public services. We have already seen the Welsh Government’s refusal to step in when they defended cuts to Wales’s National Museum. I am sad that, rather than demonstrating the political courage to protect our cultural institutions, First Minister Vaughan Gething tells us to wait patiently for a future Labour Chancellor to start properly funding Wales. I fear that he is referring to the same shadow Chancellor, the right hon. Member for Leeds West (Rachel Reeves), who drops heavy hints that Labour will go ahead with public spending cuts if it forms the next Government.

My party believes that the people of Wales should have the ability to grasp the means to build our own economic destiny. Why should we not take control of our natural resources through the devolution of the Crown Estate? Why should we not create a funding system that addresses our needs and makes best use of our fair share of money from HS2 and other projects?

After covid and in the face of a future of global unrest and accelerated climate change, the Chancellor should have prioritised long-term investment in our public services, infrastructure and communities, yet the Budget and its aftermath seem to have produced a consensus between the Tories and Labour on spending cuts, with the Institute for Fiscal Studies calling support for spending cuts a “conspiracy of silence” between the two main parties. The message should come loud and clear: as things stand, Wales gets crumbs from the table, and we can do so much better. Diolch yn fawr.

--- Later in debate ---

[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.

[Liz Saville Roberts]

Who will be responsible if public money is not spent on levelling up because it was provided late to Welsh local authorities by the UK Government?

[Fay Jones]

I can assure the right hon. Member that her local council, Gwynedd County Council, will be responsible for the almost £19 million that was received from levelling-up round 2, so there is great accountability there. Local authority leaders across Wales are delighted by the extra support that the UK Government are giving them, which amounts to £440 million over the three levelling-up fund rounds. From the Muni Arts Centre in Pontypridd to Old College on Aberystwyth’s seafront, and from Porthcawl pavilion to the Pontcysyllte aqueduct—I have lived in Wales all my life and I can never say that. [Interruption.] I will work on that one. There are new developments, too, from a new leisure centre in Caerphilly to the development of Cardiff Crossrail, and walkways and cycle paths in the Vale of Neath. Our places across Wales are changing for the better. That work is all building on the foundation being laid across our regions by Wales’s city and growth deals, with £790 million invested in all four of our regional economies. The UK Government back the Welsh economy and deliver on the needs of the people, businesses and communities in Wales.

During this afternoon’s debate, the shadow Minister—the hon. Member for Newport East—and the hon. Member for Newport West, who led the debate, challenged me a number of times on an unfunded tax cut, which I heard mentioned many times at Prime Minister’s questions this morning. I understand that the Labour party’s new argument is that the UK Government have promised to abolish national insurance. I am curious as to where that has come from. No such promise has ever been made and no policy has ever been announced. I heard the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) make that claim earlier and I would be worried that he could be accused of misleading the House—something I know he would never do. That is Labour’s smokescreen: covering up for that fact that Labour has no plan. The long and the short of it is that this Government have an excellent record to show for themselves in Wales and the spring Budget only boosts it further.