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Inflation and Public Spending

Volume 742: debated on Wednesday 6 December 2023

May I say how sorry I was to learn of the death of Baroness Kinnock? I met her when I was an intern in the European Parliament many years ago, and I have never forgotten how fearless, remarkable and determined she was. I send my deepest condolences to the hon. Member for Aberavon (Stephen Kinnock) and the wider Welsh Labour family, who also mourn the death of Allan Rogers, who served in this House as the Member for Rhondda for 19 years.

The UK economy has outperformed expectations this year, and the Prime Minister has delivered on his pledge to halve inflation. Following the Chancellor’s announcement at the autumn statement, the Welsh Government will receive £305 million in additional funding, which can be used to support public services in Wales.

Tory inflation and austerity mean that the Welsh budget is worth £900 million less than it was when it was set, and the autumn statement consequentials do not make up for that. The Institute of Welsh Affairs has called the autumn statement “a return to austerity” with

“tax cuts at the cost of cuts to public service delivery.”

It is the people of Wales who are suffering poverty and cuts to public services, so I ask the Minister: instead of the autumn statement tax handouts to the wealthy in London and the south-east, will the Secretary of State not urge the Chancellor to tax the wealthy to better protect Welsh public services?

The House will not be surprised to learn that I completely disagree with the hon. Lady’s assessment. It is not the amount of money the Welsh Government are receiving but the way in which they are mismanaging public services that is the problem. The 2021 spending review delivered the Welsh Government a record settlement of £18 billion a year, so I think that she needs to recognise that the problem is on her own side in Wales.

I welcome the hon. Lady to her role and thank her for her tribute to Baroness Kinnock and to Allan Rogers. Glenys Kinnock was an inspiration to our Labour movement, to her many friends and colleagues around the world, but most of all to her family. As the Kinnock family grieve, we send them our love and deepest sympathy.

On public spending in Wales, the Prime Minister promised, when abandoning HS2, that the north Wales main line would be electrified, at a cost of £1 billion. In the past eight years, construction costs have increased by 7% a year, because of the Government’s economic mismanagement. Will the Minister confirm that the last time any cost assessment was done on electrification was in 2015 and that the scheme will now cost between £1.5 billion and £1.8 billion?

I join the hon. Lady in her comments about the Kinnock family.

It is important to recognise that this Government are the first in many decades to commit to that project. I am sorry that she appears to agree with her colleagues in the Welsh Labour Government in Cardiff Bay, who seem to say that this is not a priority; Conservative Members feel that electrification and economic growth in north Wales is a priority, and I am sorry that she cannot agree with that.

If it is such a priority, why has nothing been done since 2015, when the cost assessment was undertaken? The hon. Lady’s Government promised to electrify the south Wales main line, but they did not do so. They promised to improve journey times and connections between south Wales and London, but they did not do that either. She has not given an answer on whether the Government will fully fund electrification, so how can she stand there and claim to the people in north Wales that this project has any prospect whatsoever of being completed by this hapless Government?

I say again that the hon. Lady’s party has already dismissed this project as not a priority. I also say again that north Wales is a priority for this Government; we are determined to level up right across this country and especially to focus on areas that the Welsh Labour Government, in south Wales, have completely ignored.

I add my condolences and those of my party to the Kinnock family on their sad loss.

Wales’s public services, assailed by inflation and austerity, now face the further difficulty of recruiting the skilled migrants who have become so vital to caring for our ageing population, as the family threshold is to rise to £38,700. That is £8,000 higher than the average wage in Gwynedd, with many of my constituents earning significantly less. Will the Minister tell me what representations she—or, rather, the Secretary of State—has made to the Home Secretary on the effects of the new threshold on Welsh public services?

As the hon. Gentleman will know, the Secretary of State has regular discussions with his Cabinet colleagues about the issue. It is absolutely vital that we take tough measures to make sure that we sustain sensible levels of migration. That is exactly what the Home Secretary has announced this week.

The change in the salary threshold will affect real people with real families and real people receiving care. My constituent Daniel Griffith was due to marry his Brazilian partner next year. They intend to make their home in Wales, but it is far from clear at present whether they will be able to do that under the new income rules. Why should Daniel, unlike the Secretary of State, the Minister and everyone else in this Chamber, have to choose between his wife and his country?

Some of the policies put in place by the Welsh Labour Government, aided and abetted by Plaid Cymru under the co-operation agreement, are disadvantaging Wales, putting off investors from creating investment and jobs in Wales. Again, I say to the hon. Gentleman that it is his colleagues in Cardiff Bay who need to have a look at what they are doing.