Richard Thomson – 2023 Parliamentary Question on Inflation and the Devolved Welsh Budget
The parliamentary question asked by Richard Thomson, the SNP MP for Gordon, in the House of Commons on 18 January 2023.
Richard Thomson (Gordon) (SNP)
What assessment he has made of the potential impact of inflation on the devolved budget for Wales.
Owen Thompson (Midlothian) (SNP)
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.
Richard Thomson
The Secretary of State says that the budget is increasing by £1.2 billion over the next two years, but inflation has already eroded the purchasing power of the Welsh Government in the current year by £1 billion. Since the UK Government are responsible for approximately 80% of the resource base of the Welsh Government, what further representations does he plan to make to the Chancellor of the Exchequer to ensure that that purchasing power for essential public services in Wales is made good?
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.
Jonathan Gullis (Stoke-on-Trent North) (Con)
Inflation, of course, causes pressure, but it is also true that Wales gets £1.20 per head for public services for every £1 in England. Yet the Welsh Labour-run Government spend less than that on their public services. Does my right hon. Friend agree with me that ruinous Welsh Labour Governments should stop wasting money on things like the Senedd expansion and instead spend money where it is needed: tackling backlogs in hospitals and stopping the decline of education in Wales?
David T. C. Davies
I agree absolutely with my hon. Friend; he is absolutely right. Money is being wasted in the Senedd, for example on spending up to £100 million on increasing the number of Senedd Members at a time of economic difficulty. [Interruption.] I hope Opposition Members who are chuntering are listening carefully to what my hon. Friend has to say.
