Oral Answers to Questions

Owen Thompson Excerpts

Wednesday 18th January 2023 Commons Chamber

[Richard Thomson (Gordon) (SNP)]

1. What assessment he has made of the potential impact of inflation on the devolved budget for Wales.

[Owen Thompson (Midlothian) (SNP)]

14. What assessment he has made of the potential impact of inflation on the devolved budget for Wales.

[The Secretary of State for Wales (David T. C. Davies)]

The Welsh Government are well-funded to deliver public services in Wales. As a result of the autumn statement, Welsh Government funding is increasing by around £1.2 billion over the next two years. That is on top of the additional £2.5 billion a year on average announced at spending review. The Prime Minister has also been clear that we will halve inflation to ease the cost of living.

[David T. C. Davies]

The overall funding amounts for the devolved Administrations, including the Welsh Government, have still increased in real terms over the period despite the impact of inflation. If the hon. Gentleman is serious about dealing with inflation, I hope he will support this Government as they propose to halve inflation over the coming year. In doing so, we will need to carefully control public spending in areas such as pay.

[Owen Thompson]

The Institute of Welsh Affairs says that budgetary pressures highlight the impotence of Welsh devolution and that tax scheme changes by the Scottish Government are a model that would help Wales’s financial situation. If the UK Government will not provide vital increases to devolved budgets, will the Secretary of State explore devolving similar tax-bearing powers to Wales, as in Scotland, to help the Welsh Government mitigate the Tory mismanagement from this place?

[David T. C. Davies]

I am not quite sure I follow what the hon. Gentleman is saying, because of course the Welsh Government do actually have tax-bearing powers. They have chosen not to use them, because the Welsh Government recognise that taxes have already increased as far as is sensible, and that means that all of us have to deal with the constraints that have come about as a result of the very difficult economic situation we face due to covid and the impact of a land war in Ukraine.