Spring Budget: Wales

Stephen Crabb Excerpts

Wednesday 29th March 2023 Westminster Hall

[Ruth Jones (Newport West) (Lab)]

I beg to move,

That this House has considered the Spring Budget and Wales.

Diolch yn fawr iawn, Mr Hollobone, and thank you for your introductory remarks in Welsh. I am sad to say that I will not be able to continue in that vein, but it is a pleasure to serve under your chairmanship, and I do so with the voices, views and concerns of the people of Newport West and the whole of Wales at the forefront of my mind.

This afternoon is an important opportunity for colleagues representing Wales to speak up and speak out about the failing economic policies of this Government. The recent Budget could and should have been a unique opportunity to unlock Britain’s promise and all the potential that we see in and around our communities. Instead, it was more decline and decay. It is clear to everyone—and, I suspect, to the Minister too—that this Government have decided to continue papering over the cracks after 13 years of Conservative economic failure, rather than giving us the change we need. Indeed, as I have said in the House, that papering over the cracks was exemplified by yet another handout for the richest 1%. There was no regard for the livelihoods and wellbeing of my constituents in Newport West, or the livelihoods of people across Wales, whether they call home Ceredigion or Conwy, Bangor or Bridgend. Wales is a nation of people who work hard, pay their taxes and simply need real change and real investment in their communities.

I noted from a report that the UK Treasury has recently taken back more than £155 million from the Welsh Government. The reason the Treasury gave for this smash and grab was that the Welsh Government had not spent it fast enough, which is an arbitrary change of tune from previous years. This callous approach is both unacceptable and unwise, and I echo the Welsh Government Finance Minister, Rebecca Evans MS, in calling on Westminster to give Wales our money back.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I must respond to that point about the £155 million. Has the hon. Lady actually read the report that the Senedd Committee produced? It was pretty scathing about the performance of the Welsh Government in managing their money. She describes it as a “smash and grab” raid. The truth is that it was a failure on the part of Welsh Government Ministers to spend money given by UK Government to alleviate the effects of the pandemic at its peak.

[Ruth Jones]

I disagree with the right hon. Member. Obviously, the report can be read in several ways. The fact that the money was taken back in such an arbitrary way, and that what happened was different from what happened in previous years, means that the rules were changed this year to suit the Government. I am afraid we disagree on that.

--- Later in debate ---

[Beth Winter (Cynon Valley) (Lab)]

Diolch yn fawr, Mr Hollobone. I wonder if I am living in an alternate universe to the previous speaker, the hon. Member for Ynys Môn (Virginia Crosbie). This time last year, I undertook a research study on the cost of living in my constituency. I will share a copy with Conversative Members because the evidence about the levels of deprivation was stark, with people going without food and unable to pay their gas and electric bills. The responsibility for that lies squarely with the UK Government, and my contribution will evidence why I feel so strongly that that is the case. So I beg to differ with the hon. Member. I congratulate my hon. Friend the Member for Newport West (Ruth Jones) on securing the debate.

Wales fired the UK industrial revolution through our coal and steelworks, and we are now leading the green industrial revolution through onshore and offshore wind. The United Kingdom’s wealth was built on Wales, but it now resides in London and southern England. There is a lot of research to evidence the fact that there is a disproportionate amount of money in the south-east of England.

Wales has been let down by Westminster—by Tory Governments—for many years, and this month’s Budget continues that theme. The reality is that under this Tory Government, households in Wales and in my Cynon Valley constituency are worse off, despite the Welsh Government’s significant efforts to put in place a range of measures to help households. We have seen the largest fall in living standards since the 1950s, wages are lower in real terms than they were 13 years ago—that is a fact—and public services, including local government services, continue to be cut in real terms.

Ahead of the Budget, the Welsh Government called for increased support for households in the cost of living crisis, including increased public spending to ensure public sector workers are paid a fair wage, increased funding for public services and investment to boost growth in the economy. Wales TUC called for a boost to pay across the economy, with decent pay rises and a path to a £15 an hour minimum wage, alongside a plan for strong public services, fair taxation and protection from hardship for workers.

After the Budget, the Welsh Government said:

“The Chancellor has chosen to hold back funding at a time when extra investment is desperately needed to ensure our hard-pressed public services can respond…and to ensure public sector workers are paid a fair wage.”

The Institute of Welsh Affairs said that the Budget

“puts money into the hands of well-off high earners”,

and that it “represents a political priority” that is completely “at odds with the needs” of the vast majority of people in the country.

The Bevan Foundation said that

“the fact that there is so little direct action on the cost-of-living crisis is a source of concern”,

and that the Chancellor’s focus is

“starting to drift from this very real problem.”

I was fortunate, about 18 months ago, to commission the Bevan Foundation to undertake a piece of research on our economy in the Cynon valley and come up with an action plan based on community wealth building to address the appalling levels of deprivation and inequality. We are on the path to implementing that at a grassroots level. I am really encouraged by the work that people in Cynon Valley are undertaking to provide an alternative future, but that is no thanks to the UK Government.

The reality is that Wales is constrained from offering more by the UK Tory Government, who routinely withhold fair, needs-based funding for Wales to meet the increasing pressures on our communities. After more than a decade of austerity and the pandemic, Wales’s economy and public services, including local government services, have been absolutely stripped to the bone.

Wales is yet again being starved of funds. We heard news this week that, as my hon. Friend the Member for Newport West said, the UK Government have taken £155 million from the Welsh reserve fund, despite the Welsh Government making proposals that would see the money retained, which has been agreed many times before—there was a precedent. It is—I will use the term—theft from the people of Wales, and it demonstrates the Tories’ complete contempt for our country.

[Stephen Crabb]

The hon. Lady talks about local government services, but how would she respond to the point that local authorities across Wales—all of them, and especially some of the Labour councils not far from her constituency—are sitting on billions, or at least hundreds of millions, of pounds of reserves, seemingly with very little intention of dipping into them to invest in the kinds of priorities that they need to at this time? They might say, “Well, we’re waiting for a rainy day,” but it is pouring outside, for all the reasons the hon. Lady set out. Why will they not spend that money?

[Beth Winter]

I beg to differ. If we look at local governments, there are very few with any significant reserves. For example, my local authority has experienced cuts in excess of £90 million since the start of austerity, and it has tapped into reserves significantly to meet the shortfall. I think the figure was about £30 million in the last year, although do not quote me on that. That is already happening, and local authorities do not have the reserves to which the right hon. Gentleman referred.

In terms of EU structural funds, Wales faces a £1.1 billion shortfall in funding—so much for “not a penny less, not a power lost”. I am interested to hear the Minister’s explanation for the significant shortfall in funding post EU.

On the levelling-up fund and the shared prosperity fund, the Tories’ record is one of failure, and the announcements in the Budget do very little to reverse more than a decade of austerity. One year on from the levelling-up White Paper, most places have lost out in the scramble for levelling-up funding. Millions have been wasted in the application process. Bids have been eaten up by inflation. My constituency has not received a penny, nor have other valley constituencies such as Blaenau Gwent or Torfaen. The UK Government’s shared prosperity fund was to replace EU structural funds, but funds have been cut, and the Welsh Government have been completely cut out of that process.