Commons Sense

House of Commons · Ministers' Questions

Devolved Budget for Wales: Impact of Inflation

Wednesday 18 January 2023 · 4 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 2 Not answered 0

Key points

  • The Welsh Government are well-funded to deliver public services in Wales, with an increase of around 1.2 billion over the next two years due to the autumn statement.
  • Inflation has eroded the purchasing power of the Welsh Government in the current year by 1 billion, despite an overall increase in funding for the devolved Administrations.
  • The UK Government propose to deal with inflation, and the response suggests support for these proposals.

Topics (select to filter)

Questions & Answers

Q1 Owen Thompson SNP
Economy Wales Local Government
Context

The Welsh Government's funding is under scrutiny due to the effects of high inflation. The question seeks an assessment from the government on how inflation impacts the devolved budget.

Question

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

Answer from David 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.

Partly answered

Not addressed: The specific impact of inflation was not quantitatively addressed, only a general statement about increasing funding and halving inflation was provided.

How: Under Review

Was this summary accurate? Tell us

How accurate was this summary? (1 = poor, 5 = spot on)

Q2 Richard Thomson
Economy Wales
Context

Inflation has eroded the purchasing power of the Welsh Government, with a loss of £1 billion in the current year. The question seeks further action from the UK Government to address this issue.

Question

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?

Answer from David 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.

Partly answered

Not addressed: Did not commit to specific representations or actions towards restoring purchasing power for Wales.

How: Under Review

Was this summary accurate? Tell us

How accurate was this summary? (1 = poor, 5 = spot on)

Q3 Owen Thompson SNP
Taxation Scotland Wales
Context

The Institute of Welsh Affairs suggests that the Scottish Government's model of changing tax schemes could help mitigate financial issues in Wales. The question seeks exploration of similar power devolution for Wales.

Question

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-varying powers to Wales, as in Scotland, to help the Welsh Government mitigate the Tory mismanagement from this place?

Answer from David Davies

I am not quite sure I follow what the hon. Gentleman is saying, because of course the Welsh Government do actually have tax-varying 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.

Not addressed: Did not address the exploration of similar tax-varying powers for Wales, instead pointed out existing but unused power.

How: Deflect

Was this summary accurate? Tell us

How accurate was this summary? (1 = poor, 5 = spot on)

Q4 Jonathan Gullis
Economy Wales
Context

There is a disparity in public service funding between Wales and England, with Wales receiving £1.20 per head for every £1 in England. The question challenges the efficiency of current spending by Welsh Labour-run Government.

Question

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?

Answer from David 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.

Not addressed: Did not provide any substantive information or commitment, instead criticized the opposition and Senedd expansion spending.

How: Attack

Was this summary accurate? Tell us

How accurate was this summary? (1 = poor, 5 = spot on)