7. Welsh Conservatives Debate: Economic policy

– in the Senedd at on 12 June 2024.

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The following amendments have been selected: amendment 1 in the name of Jane Hutt, and amendments 2, 3, 4 and 5 in the name of Heledd Fychan. If amendment 1 is agreed, amendments 2, 3 and 4 will be deselected.

Photo of David Rees David Rees Labour 4:24, 12 June 2024


Today's item 7 is the Welsh Conservative debate on economic policy, and I call on Sam Kurtz to move the motion.


Motion NDM8606 Darren Millar

To propose that the Senedd:

1. Welcomes:

a) the UK Government’s clear plan and bold action to chart a course to a secure future;

b) the UK Government’s action in cutting inflation from 11.1 per cent to 2.3 per cent;

c) the UK being the fastest growing economy in the G7;

d) the regional growth deals in every part of Wales, making Wales the only Growth Deal nation in the UK; and

e) the UK Government’s Freeports in North and South Wales, along with investment zones for advanced manufacturing.

2. Regrets that under the Welsh Government, Wales has:

a) the lowest employment rate;

b) the lowest median wages; and

c) and the highest economic inactivity rate in the UK.

3. Calls on the Welsh Government to create an environment for businesses to invest and create jobs by:

a) levelling-up across Wales with proportionate levels of investment in all parts of the country;

b) reinstating business rates relief to 75 per cent for the retail, hospitality and leisure sector to support businesses and protect jobs;

c) abolishing business rates for small business;

d) enabling micro businesses to grow with a jump start scheme paying the employer national insurance for two employees for two years;

e) delivering 150,000 new apprenticeships over the next Senedd term; and

f) creating and fully funding a local business kickstarter scheme to support start-ups.


Motion moved.

Photo of Samuel Kurtz Samuel Kurtz Conservative 4:24, 12 June 2024

Diolch, Dirprwy Lywydd. I welcome the opportunity to open this debate and move the motion in the name of Darren Millar. It's a pleasure to talk about the Welsh economy this afternoon. Wales is a nation of enterprise, and home to so much innovation in so many sectors. From agriculture to healthcare innovation, there are entrepreneurs and businesses everywhere putting Wales on the map. From Valero and RWE to Velfrey Vineyard and Liz's Bakery in Carmarthen West and South Pembrokeshire, Wales alike has a breadth of fantastic, diverse and brilliant businesses in every one of our constituencies.

Photo of Samuel Kurtz Samuel Kurtz Conservative 4:25, 12 June 2024

But life hasn't always been easy for our innovators. The COVID-19 pandemic made life difficult for all of us and our businesses were hit hard by the restrictions that were put in place. Thankfully, the actions taken by the then Chancellor of the Exchequer, Rishi Sunak, on behalf of the country saved and supported over 11 million jobs—that's 11 million jobs. It is a fact that the UK Government's furlough scheme saved jobs and protected livelihoods during this difficult period. However, this came with a price tag. Combined with the war in Ukraine, which pushed food and fuel prices higher globally, the UK needed a secure plan to stabilise our finances and lower inflation, and I believe that the UK Government has delivered on that. 

Of course, high inflation has been a global issue for the past few years, with countries such as Germany, Canada and Italy all experiencing high inflation. And we know that inflation hits working families the hardest, which is why the work done by the UK Government to see inflation fall from 11.1 per cent down to 2.3 per cent has been so important. This is good news. The plan is working. Lower inflation meant wages could catch up and eventually interest rates can come down, putting more money in the pockets of hard-working people the length and breadth of Wales. 

UK wage growth has consistently outstripped inflation since mid 2023. Specifically, pay excluding bonuses grew by 6.2 per cent in the last quarter of 2023, compared to the same period in 2022. This trend continued into early 2024, with wage growth remaining strong. We also welcome that the UK is now the fastest-growing economy in the G7. This again shows that the plan is working, and Wales is directly benefiting. 

Members will all welcome the regional growth deals that have taken place. Indeed, Wales is the only nation in the UK that can be classed as a growth deal nation, with growth deals reaching every corner of our country. In 2023, two new £160 million investment zones were announced in north-east and south-east Wales, and of course there was the announcement of the Celtic and Anglesey free ports. A further £319 million was allocated in levelling-up funding for projects across Wales, working directly with local authorities to deliver projects, putting the power and decision making closer to the people who benefit—positive economic measures that will deliver positive outcomes the length and breadth of Wales. 

And yet, for all the positive work that has been done by the UK Government, Wales has not been able to reach its potential because we've had for 25 years economic mismanagement by successive Welsh Labour administrations here in Cardiff Bay. We only have to look at the Welsh Government's own statistics to see data showing the underperformance of the Welsh economy compared to the UK as a whole. Of the 12 economic areas of the UK, Wales comes in at eleventh.

But what do these statistics mean for the people of Wales? These aren't just abstract numbers—they have real-world consequences for workers and their families. For instance, Wales has the lowest employment rate in the UK. Furthermore, if someone is employed, they can expect to earn less than their UK counterparts. Why is this Welsh Government so content and accepting of Wales being at the bottom of every league table once again? This surely must anger us all. 

But this doesn't have to be the case. Wales can be and can do better. This is why the motion calls on the Welsh Government to create an environment for businesses to invest and create jobs, help businesses do what they do best—create jobs, create wealth and create growth. Governments can't create jobs, but they can create the right environment for jobs to be created. This is why we are calling on the Welsh Government to reinstate business rate relief to 75 per cent, to abolish business rates for small businesses and to adopt our jump start scheme for microbusinesses, paying the employer national insurance for two employees for two years. 

While these measures will greatly benefit companies in the short term, we must think long term to fully capitalise on the fantastic opportunities in nuclear, wind, floating offshore wind and other infrastructure projects. This is why we are also calling for the Welsh Government to support 150,000 new apprenticeships over the next Senedd term. These will be jobs of the future, securing careers for our young people and giving us the ability to deliver projects that will benefit Wales, and the rest of the UK, for decades to come.

Dirprwy Lywydd, Wales is a nation of great innovators. Our people are full of passion, hard work and commitment, and so the Welsh Government must do more to provide conditions for growth for the future. We must look at technological innovation across the world, seize opportunities on our doorstep, and develop a landscape that encourages entrepreneurship across the country. We can and we must create the conditions for entrepreneurs to thrive. And on that note, I urge Members to support the motion this afternoon. Diolch, Dirprwy Lywydd.

Photo of David Rees David Rees Labour 4:30, 12 June 2024


I have selected the five amendments to the motion. If amendment 1 is agreed, amendments 2, 3 and 4 will be deselected. I call on the Cabinet Secretary for Economy, Energy and Welsh Language to move formally amendment 1.


Amendment 1—Jane Hutt

Delete all and replace with:

To propose that the Senedd:

1. Welcomes:

a) the Welsh Government’s clear plan set out in the Economic Mission: Priorities for a Stronger Economy;

b) that wages have risen faster in Wales than England since 2011;

c) the strength of regional working and partnerships;

d) the Welsh Government’s investment of over £143 million in quality apprenticeships;

e) the Welsh Government’s Young Person’s Guarantee which has supported over 27,000 young people;

f) continued investment through Business Wales and Development Bank of Wales;

g) the provision of over £140 million small business rates relief which supports ratepayers for around 70,000 properties across Wales every year; and

h) £78 million to provide a fifth successive year of support for retail, leisure and hospitality businesses with their non-domestic rates bills.

2. Regrets that under the UK Government:

a) there has been a lack of a clear economic and industrial plan with no detailed spending plans beyond 2024-25, resulting in 14 years of chaos;

b) there are the most sustained price rises since the Bank of England’s independence, with prices 21.3 per cent higher in April than three years prior;

c) the Welsh Government has a Budget in 2024-25 which is £3 billion lower than if it had grown in line with GDP since 2010; and

d) Wales has almost £1.3 billion less funding in real terms due to the UK Government’s failure to honour its commitments and replace EU funds in full.

3. Calls on the current UK Government to recognise:

a) that base rate changes by the Bank of England and falling energy prices are the principal reason for the recent reduction in inflation;

b) that the ONS has confirmed there are issues with the labour force survey, which continue to affect the data quality of labour market statistics and may not give a true picture of the situation in Wales;

c) the significant harm done to the Economy through Liz Truss’ disastrous mini budget, which has left people and families in Wales paying higher mortgages and bills; and

d) that Levelling Up and Shared Prosperity Funds have been developed with very little planning and consultation and have actively undermined devolution.


Amendment 1 moved.

Photo of David Rees David Rees Labour


I call on Luke Fletcher to move amendments 2, 3, 4 and 5, tabled in the name of Heledd Fychan.


Amendment 2—Heledd Fychan

Delete point 1 and replace with:


a) the economic damage done to Wales by 14 years of austerity under Conservative UK Governments;

b) the further economic harm caused by a hard Brexit, and by Liz Truss’ so-called mini-budget;

c) that Wales does not receive fair funding from Westminster, and that the Barnett formula does not deliver a funding settlement that reflects Wales’s economic, financial or social needs;

d) that Conservative UK Governments have conspicuously failed to level up Wales, and that Shared Prosperity and Levelling Up Funding have been used to fund short-term projects over the heads of both the Welsh Government and the Senedd; and

e) the high rates of poverty, particularly of child poverty, that have stemmed from the Conservatives’ approach to managing the UK economy.


Amendment 3—Heledd Fychan

In point 2, insert as new sub-point before sub-point (a) and renumber accordingly:

no clearly defined or measurable economic development targets;


Amendment 4—Heledd Fychan

Delete point 3 and replace with:

Calls on the Welsh Government to create an environment for businesses to invest and create jobs by:

a) levelling-up across Wales with proportionate levels of investment in all parts of the country;

b) reinstating business rates relief to 75 per cent for the retail, hospitality and leisure sector to support businesses and protect jobs;

c) setting clear and measurable economic targets;

d) delivering an improved business support offer and better succession planning support for domestic SMEs;

e) bringing forward research on potential new taxes to benefit businesses;

f) delivering 150,000 new apprenticeships over the next Senedd term; and

g) creating and fully funding a local business kickstarter scheme to support start-ups.


Amendment 5—Heledd Fychan

Add as new point at end of motion:

Calls on the incoming UK Government to take action to secure Wales’s economic future by:

a) seeking the UK's readmittance to the EU's single market and customs union, with urgency;

b) scrapping the Barnett formula, and delivering a new fair funding settlement for Wales that accurately reflects Wales's needs; and

c) ensuring that a fair proportion of UK export finance is delivered to Wales, and that funding to Wales lost as a result of Brexit is restored.


Amendments 2, 3, 4 and 5 moved.

Photo of Luke Fletcher Luke Fletcher Plaid Cymru 4:31, 12 June 2024

Diolch, Dirprwy Lywydd. Whatever was left of the Tories' self-proclaimed reputation on economic competence lies in tatters after 14 years of austerity that's widened societal inequalities, after a hard Brexit that's contracted trade in goods by over 13 per cent, and, of course, after the catastrophic Truss mini-budget that sent mortgage rates soaring and wiped £30 billion from the public purse.

And here in Wales we've borne the brunt of that recklessness. We've been denied the £4 billion that is rightly owed to us from HS2, while the so-called levelling-up agenda has short-changed us to the tune of £1.3 billion. Even the achievements the Conservatives are crowing about in this motion collapse under scrutiny. I mean, yes, inflation has come down from its eye-watering peak, but it's difficult to see what, if any, credit the UK Government can claim, given that managing inflation is the responsibility of the Bank of England. And whilst inflation comes down, prices don't follow. [Interruption.] And most damningly of all—no, I won't be taking an intervention—and most damningly of all, the most recent UK Parliament will hold the distinction of being the first in modern history to have overseen a fall in household disposable income and living standards. I mean, the Tories have created a wasteland of the economy, and they have the gall to call it prosperity. What an insult to the millions of people who have struggled under their watch.

But what are we seeing from the Labour Party? You know, a party that's terrified of its own shadow, that's more interested in purging the left rather than presenting a progressive vision for economic renewal. It also appears that the Welsh branch has borrowed from the Tory playbook when it comes to taking voters for a ride. Their election pledges for Wales include a commitment to deliver economic stability and growth. That conveniently overlooks the fact that the economic development has been the responsibility of the Welsh Labour Government since 1999, during which time Wales has consistently ranked amongst the worst performing of the UK nations and regions for GVA. And Wales has the only economy in the UK that remains smaller than its pre-pandemic level, with GDP per capita also predicted to be £1,100 lower in 2024, compared to pre-pandemic levels.

Now, Dirprwy Lywydd, fixing our broken economic system won't be easy and it will be complex, but in Plaid Cymru, we believe this process must be guided by the fundamental principle of fairness. It means rejoining the EU single market to enable our domestic businesses to flourish on the international stage. It means demanding, for our exporters, a far higher share of UK export finance than the 1 per cent they receive. Most importantly of all, it means replacing the outdated Barnett formula with a funding model that appropriately caters for our societal needs. And in this sense of fairness, it also needs, then, to be married, in turn, with proactive ambition on the part of the Welsh Government. This means setting and sticking to tangible targets to narrow the productivity gap between Wales and the rest of the UK. It means reforming the blunt policy instrument that is non-domestic rates. It means providing improved succession planning to retain the benefits of entrepreneurialism here in Wales. And it means also a mission-led approach to economic development.

Dirprwy Lywydd, it is abundantly clear in this election that neither the Tories nor Labour have the slightest interest in leading an adult conversation about the state of our economy. Well, Plaid Cymru will never shy away from presenting the bold solutions to create a nation that is ambitious, fairer and prosperous.

Photo of Mark Isherwood Mark Isherwood Conservative 4:35, 12 June 2024

Devolution was supposed to reinvigorate the economy and liberate the life chances of people in Wales. However, although Wales can be an agile nation with a thriving high-wage economy, its entrepreneurial spirit has been kept on a leash, and this has sadly not been the case.

A quarter of a century of a Labour Welsh Government has left our economy underperforming and the people of Wales losing out as a result. Rather than succumbing to the siren calls from Labour and Plaid Cymru to take actions that would have boosted inflation and generated bigger future cuts, making everyone worse off, the UK Conservative Government has taken the action necessary to cut inflation from over 11 per cent to near 2 per cent above the interest rates independently set by the Bank of England, with real wages growing for the eleventh month in a row, nearly 4 million more people in work, and youth unemployment down 370,000 since 2010, and economic inactivity lower than at any point under the last UK Labour Government. However, the deadweight of Labour Welsh Government has left Wales the lowest employment rate, lowest pay packets, lowest total GDP output per head, and highest economic inactivity rates in the UK—this despite Labour Welsh Government having received billions in temporary funding intended to close the prosperity gap both within Wales and between Wales and the rest of the UK.

In claiming that they've been short-changed since, the poor darlings struggle to understand that Wales and the Welsh Labour Government are not the same thing. They would, of course, be correct had Wales not received over £2.5 billion of UK levelling-up funding via a number of different schemes aimed at spreading prosperity and giving communities more of a say in how the money is spent, including over £440 million through three rounds of levelling-up funding and around £585 million in UK shared prosperity funding. They would also be correct had the UK Government not invested £2 billion for Network Rail and £340 million for enhancements in Welsh rail from 2019 to 2024, had Network Rail not published its £5.2 billion five-year plan for the railway in Wales and western that sees a £1.9 billion investment in the Wales and borders route, and had the UK Government not also announced plans for rail upgrades in Wales, including £1 billion into electrification of the north Wales main line and £700,000 for Transport for Wales to explore upgrades for Shotton and Chester stations, and increase north Wales main line capacity.

In order to deflect attention from their own gross failings, they present austerity as a policy chosen by the UK Conservative Government, although Blair and Brown were the architects of austerity. When Gordon Brown opened US investment bank Lehman Brothers's London headquarters in 2004, he told them:

'I would like to pay tribute to the contribution you and your company make to the prosperity of Britain.'

On 15 September 2008 Lehman Brothers went bust: the moment when global financial stress turned into a full-blown international emergency. 

Years before, the IMF said that the UK banking system was more exposed to sub-prime debt than anywhere else in the world.

The National Audit Office reported that Mr Brown's Treasury was warned three years before Northern Rock nearly went bust that it needed to set up emergency plans to handle a banking crisis, but did nothing about it. Following the crash, the financial services authority reported that there had been instead sustained political emphasis by the Labour Government on the need for them to be light-touch in their regulatory approach. Well, the people paid the price. By 2010 the UK budget deficit was the worst in the G20, behind only Ireland and Greece in the EU. 

If you have a big deficit, someone owns you and sets the terms, and would have imposed greater cuts had we followed the economic policies advocated by Labour and Plaid Cymru, as happened in Ireland and Greece, and as happened when the UK Labour Government was forced to borrow from the IMF in 1976. I'm old enough to remember that; my father lost his job a couple of years later. They seek to deflect blame onto Liz Truss's temporary tenure, dodging the reality that the pound, the cost of borrowing and markets rebounded as soon as Rishi Sunak and Jeremy Hunt restored stability. Only a very silly-billy would claim that the current cost-of-living crisis was made in Westminster—as they do—and 33 European countries, the euro area—

Photo of David Rees David Rees Labour 4:40, 12 June 2024

Mark, you will need to conclude, please.

Photo of Mark Isherwood Mark Isherwood Conservative

—and 17 G20 countries currently have higher inflation rates than the UK in consequence of the global cost-of-living crisis. I conclude, there is a hope for the future, provided that a UK Labour Government is not elected to wreck the economy once again.

Photo of Rhianon Passmore Rhianon Passmore Labour

It is actually time to end the chaos. The United Kingdom's economy has been trapped by the Tories. Fourteen long years of austerity, presided over by five Tory Prime Ministers and seven Tory Chancellors. But the one thing they all have in common is that they've all seen the majority become worse off. That's a fact. According to the Office for National Statistics, the UK failed to grow at all in April, and we are at the bottom of G8 for growth. That is a fact. Today we learn from a political interview on ITV, the one that Rishi Sunak abandoned D-day events for, that the Prime Minister, alone worth £651 million, does feel the financial pain of ordinary families because, although he has never used a cash machine, he did once go without Sky TV as a child, and that is beyond satire. And as Victorian diseases associated with poverty—rickets and malnutrition—are now appallingly presenting back in our surgeries and our hospitals—. What a legacy—this sad, Tory Prime Minister is doing all he can to make his predecessor, Liz Truss, look like politically competent.

So, I want to look at some more facts. Wages have risen faster in Wales than England since 2011. The Welsh Government has invested more than £143 million. And despite these measures, now in 2024, the Welsh Government has a budget that is £3 billion lower than if it had grown in line with GDP since 2010. Indeed, Wales has almost £1.3 billion less funding in real terms due to the UK Government's failure to honour its commitments and replace EU funds in full. It has not done that, and it has since broken the trust of its citizenry.

With the further economic harm caused by hard Brexit and Liz Truss's so-called mini-budget, it is a sad fact that Wales just does not receive fair funding from Westminster. The Barnett formula does not deliver a funding settlement that reflects Wales’s economic, financial or social needs.

Conservative UK Governments have conspicuously—

Photo of Rhianon Passmore Rhianon Passmore Labour

I'm sorry, I've got just too much to go through, and I'm sure I'll answer any intervention in what I've got to say.

The UK Government's purposeful destruction of the UK welfare net, which should address the needs of the most vulnerable, and which ended the cruel reign of the punitive workhouse—

Photo of David Rees David Rees Labour

Rhianon, excuse me a second. Members in the Chamber need to be quiet so I can hear and others can hear the contribution from the Member. Thank you. Rhianon, off you go.

Photo of Rhianon Passmore Rhianon Passmore Labour 4:43, 12 June 2024

Thank you. The cruel reign of the punitive workhouse model was eroded and lost and dumped because of this social network welfare net, and the destruction of that welfare net has delivered us today high rates of poverty, particularly of child poverty in Wales, as a result of the direct Conservative dismantling of such. These scars and the impacts of grinding poverty will be with us all for the foreseeable future, and I remain embarrassed and appalled that the UN rapporteur for the disabled and children deeply criticised this UK Government on its regressive choices, which severely deepened inequality across the UK, and that is a fact. Food price levels are quantitively higher than just three years ago, and still rising, as are household bills for utilities and rent and mortgages and debt, VAT on children's clothes and sanitary products, with real wages barely above what they were in 2010. And, indeed, analysis by the Resolution Foundation evidences that real household disposable income per head in the UK is now below even the pre-pandemic level by the end of last year. And this has led to the Trussell Trust being forced to provide record numbers of food parcels and Citizens Advice providing record numbers of people with debt advice. We are the UK's food-bank-reliant nation as the UK Government reneges on its No. 1 function, and that is to protect its people. Households and businesses still face the highest interest rates for over 16 years, hampering badly needed business investment and placing more pressure on household finances.

So, sadly, to conclude, I have to inform Darren Millar that even the Tory defence Secretary, Grant Shapps, has given up the pretence. Today he warned voters against voting for a supermajority. Indeed, Dirprwy Lywydd, it is time to end this chaos. It is time to start rebuilding, building the British economy alongside those UK partners who, hand in hand and in step with Welsh Government, will ensure that we are stronger together as a nation, so that we can build together, as a United Kingdom, a better, a stronger and a greener future for all of the people of Wales. Diolch, deputy Llywydd.

Photo of Carolyn Thomas Carolyn Thomas Labour

Diolch. In the last 14 years, we've seen the Tory UK Government make vicious real-terms cuts to the building blocks of economic growth, dismantling public services—health, social care, education, housing— wages and local authority budgets. I was horrified to see Rishi Sunak say that he plans to fund a drop in tax by further cuts to public services. The UK simply cannot cope with further austerity.

We cannot see further cuts to welfare either. These are being used as top-ups for working people. The move from tax credits to universal credit has been devastating for many. We've seen the Tories starve Wales of the funding it needs, whether through successive austerity budgets or through the deliberate holding back of billions of pounds worth of HS2 money, post-EU funding, and money found down the back of sofas called 'found within existing budgets', with lack of transparency for our finance Minister.

Wales were net beneficiaries of European funding and the same level of funding has not been realised by the UK Government. The funding for national programmes such as apprenticeships, university research programmes, public infrastructure such as highways, community transport, broadband and innovation, has been lost and not replaced. We have seen the Government conspiring to take money out of people's pockets through the Liz Truss mortgage and inflation bombshell, and under the Conservatives the rich have just got richer and the poorer, poorer. For the first time since the second world war, life expectancy for women has fallen, and 99 per cent of the population will be poorer than the generation that went before them.

Market capitalism has seen massive wealth and great deprivation. We have seen this with the sell-off of the Royal Mail, undervaluing its assets when floating shares, siphoning off the profitable arm that supported the universal one-price stamp, the social value part of the once proud 500-year-old Royal Mail. Now, it will be sold off to a billionaire who will want to asset strip it further and—[Interruption.]—employ agency staff—

Photo of David Rees David Rees Labour 4:47, 12 June 2024

The Member will please—. The Member will refrain from shouting, please.

Photo of Carolyn Thomas Carolyn Thomas Labour

—in a race to the bottom. This is a good example of how market capitalism doesn't work. It was once a good and fair job, once one to be proud of, and a community asset. Now, posties have to walk 13 miles a day and are still told to leave mail behind. People are exhausted as the Tories have pushed productivity and efficiency to the limit—having to work 12-hour shifts, cuts to welfare, cuts to public finance support. How can you say that the economy is growing and pretend that all is fine because inflation is coming down when we have people in in-work poverty and thousands reliant on food banks? It's simply not right, and it's going to take a lot to change that.

You're claiming responsibility for the free port in Anglesey. Well, that was negotiated jointly with the Welsh Government, who quite rightly insisted on the same amount of funding that free ports in England were receiving, along with ensuring that environmental and employment standards were achieved. That wouldn't have happened without Welsh Government intervention.

There have been announcements of an investment zone for Wrexham and Flintshire, but no development funding. The investment zone was supposed to be for advanced manufacturing, creative industries and digital. I'm concerned that these have been dropped by the UK Government, and it seems to be enforced by this motion, by just saying that they are advanced manufacturing investment zones. We need the creative industries and digital included.

One billion pounds for electrification of the north Wales line was also just another announcement before the election, with no development funding for Network Rail to deliver this. The Conservatives can try and rewrite history all they want; residents across Wales have felt the full blow of the outgoing Government's economic incompetence directly in their pockets. The UK and Wales are crying out for change, and I look forward to a UK Labour Government delivering that with Welsh Government. Thank you.

Photo of David Rees David Rees Labour 4:49, 12 June 2024

Janet, we'll try again and hope the connection remains stable this time, okay.

Photo of Janet Finch-Saunders Janet Finch-Saunders Conservative

Thank you. Diolch, Dirprwy Lywydd. I'm not sure myself what happened there.

Well, I've heard some interesting comments and contributions here today, but I have to praise Sam Kurtz and Mark Isherwood for very factually and correctly pointing out just how bad it is for small businesses here—well, all sizes of businesses, really. When I first started as a businesswomen many years ago, under a Conservative UK Government, I was supported, I was able then to prosper going forward, paying tax, opening up other start-up businesses, employing people; they prospered too. And that's how it should be. But, over the last 10 years in particular—. Although Welsh Labour have been guilty for being in power 26 years and not helping business, it is fair to say that, over the last 10 years, I have never known a time—and I speak to so many businesses of all sizes, where they say, 'The Welsh Government do not understand us, they haven't a clue, they don't know what it takes to run a business'—. And when we've seen businesses go under in Wales, and very, very heart-wrenchingly only recently, Mona Dairy—. We've seen other large companies—. And even down to Tata Steel, all that happened when those soundings would come in from the company that, 'We need support', the UK Government stood up and started to support them, but all the Welsh Government did—and the unions—was to try using it as a political weapon. Instead of getting in there quick and trying to retrieve that business, every time a business suffers in Wales, they would just rather jump on a bandwagon than actually help that company.

Now, there is no denying that is because this is a Welsh Labour Government. Shocking figures have shown, over the last year, that we lost over 63 pubs, shutting their doors, more than double the decline in England, and it's estimated that 770 jobs were lost there. Rather than deciding to address that, they just carry on punishing our small businesses. They've taken away the business rates relief. Edwina Hart many years ago told me she would never do away with business rates, but she was quite happy at the time to support the level of support they were giving, and, look, that's even been taken away now from our businesses. And there's been a lot of debate recently and hustings for politicians in this general election. Well, I can tell you now, there will be—and anyone watching this—there will be more taxation from Labour both at UK level and Welsh Government, and, in particular, they will go for our businesses more, because, too often, they see our businesses as a soft option. Sir Keir Starmer's openly touted that his blueprint for a UK Labour Government is Wales. Well, that's a pretty sad indictment if he's actually looking to the Welsh Government as being an example to copy.

Higher taxes, less growth—we know in Wales the employment rate has dived below 70 per cent, down 2.8 per cent on the year, and now over 5 per cent less than the UK; Scotland at 73 per cent. This is indicative of a country with stagnant economic growth. Alongside the lowest employment rate in the UK, Wales has also the lowest median wages, and it's around about £3,000 less. Why should somebody doing the same job in Wales be taking home £3,000 less than they would under a UK English Government?

Of course, economic inactivity has been a constant, but, after 25 years of Welsh Labour, an economic inactivity rate of 28.1 per cent, up 2.7 per cent on the year, compared to England, is deeply concerning. Despite my previous emphasis on the crucial role of small businesses in Wales, especially with tourism employing 12 per cent of our workforce, and contributing approximately, well, more than £2.4 billion in terms of the food chain and everything, Welsh Labour have persisted in their determination to decimate a dynamic part of the Welsh economy. They plan on introducing a tourism tax, which will—. Well, it's already having negative impacts. Reports are telling us now that people have already heard stark notices of tourism tax, and they are already starting to think about going elsewhere. In Aberconwy, tourism and hospitality form a huge part of the economic input, and the Welsh Labour doctrine is to increase the financial burden on individuals and businesses alike. Now, in contrast, the UK Government—

Photo of David Rees David Rees Labour 4:54, 12 June 2024

Janet, you need to conclude now, please.

Photo of Janet Finch-Saunders Janet Finch-Saunders Conservative

—is using its levers, its powers and its funding to unleash economic growth. We've seen the Wrexham and Flintshire investment zone, Anglesey free port, Wylfa Newydd, prosperity fund, levelling-up funding. I'm afraid, anybody watching this, vote Labour on 4 July and expect more decline in businesses and expect more decline in our economic future. Diolch.

Photo of Gareth Davies Gareth Davies Conservative 4:55, 12 June 2024

It's a pleasure to take part in this debate this afternoon, and we should be quite frank that the Welsh economy is in a sorry state, unfortunately. And that's not playing down Wales; it's just a reality. Today, after 25 years of Labour Government, Wales lags behind the UK on a whole range of metrics. Achieving growth is difficult with high interest rates, but Wales's economy has shrunk by 1 per cent since 2018, while England's has grown by 2 per cent since then, and Wales's productivity rate still remains lower than in most other regions. We have the highest economic inactivity rate in the UK, the lowest employment rate and the lowest median wages. 

We've heard Labour Members reference their favourite scapegoat, Liz Truss, for Wales's struggling economy, but a 2022 mini budget is not to blame for these depressing statistics. Our economy is in this state due to 25 years of Welsh Labour's economic illiteracy, and you only have to look at examples from the last time Labour were in Government in the UK, when Gordon Brown sold our gold off at cut-price rates, and Liam Byrne's letter when Labour left Government in 2010, saying there is no money left, and the issues that Mark Isherwood mentioned about Labour having foresight of the Northern Rock issue as far back as 2005. I remember when that started in January 2008 and people queueing outside banks down the street to try and take their money out because the banks defaulted on the people. That is a sorry state of affairs to be in, when the banks default on the people, because people put trust in banks to act on their best behalf. That was the sorry state under Labour, and we should remember those recent turn of events in terms of deciding who your next Government should be.

Regardless, my constituents are not interested in whataboutery, they're interested in what the Welsh Government are doing to ensure their pay is rising, to ensure they have access to high-quality employment in their area, to ensure that they see businesses in their community thriving. Of course, COVID-19 lockdowns led to a severe global recession, with an unprecedented drop in GDP. But some ships weathered the storm better than others, with slow improvement in growth, productivity and investment, and the UK weathered the storm better than most EU countries—remember Italy, for example. Only seven countries bounced back with regard to the foreign direct investment that is key to growth, and the United Kingdom is one of these, ahead of the United States, Germany, China and Japan.

UK growth has also consistently been higher than Germany's since the pandemic, but, under Mark Drakeford and Vaughan Gething's captaincy in Wales, our economy is still drifting into the doldrums. The wind is taken out of our sails by the poor economic decisions. Gross value per head in Wales currently comes in at under three quarters of the UK average; economic inactivity is 28 per cent, compared to the UK average of 22 per cent; employment is 68.9 per cent, to the UK average of 74.3 per cent. The Welsh economy, like our motorists, is moving at a snail's pace, and these disparities are growing evermore. People in this country deserve better.

The Welsh Government need to set out the economic conditions for our economy to thrive, and levelling up north Wales by investing in infrastructure, like the Welsh Government have done with the south Wales metro, is vital. A PricewaterhouseCoopers report showed that productivity in Wales is buoyed only by Cardiff, with the figures in north Wales being particularly dire. The UK Government has had to pick up the tab, with £2.5 billion of levelling-up funding for Wales, where communities like mine in north Wales have been neglected by the Welsh Government.

This topic could be debated for days, but I'd like to conclude my remarks by repeating my call for the Welsh Government to reinstate business rates relief to 75 per cent for retail, hospitality and leisure, and abolish business rates for small businesses, which would go some way to give a leg up to struggling businesses, reverse the trend of higher comparative unemployment and improve our rates of business survival, which are the third lowest among all the UK nations, so that we can begin to turn this ship around.

I would just add a footnote to my remarks in saying that the biggest issue that we had when we were members of the European Union was, on the issues of foodbanks and sanitary products, that, under EU legislation, we couldn't drop interest rates below 5 per cent, and they are freedoms that we've gained through Brexit, which enabled the United Kingdom to operate within a free economy without the burden of European legislation, which stopped VAT rates being lowered. That was the reason for sanitary products rate relief not materialising pre 2016, and that's the reason why prices have dropped over that time, because we have released ourselves from the economic burden of the European Union in voting for Brexit in 2016, and we must embrace that and make the best of it for Wales. Thank you.


The Llywydd took the Chair.

Photo of Elin Jones Elin Jones Plaid Cymru 5:00, 12 June 2024


The Cabinet Secretary for Economy, Energy and Welsh Language to reply—Jeremy Miles.

Photo of Jeremy Miles Jeremy Miles Labour

Diolch, Llywydd. The UK economy is on a burning platform. That's why this is one of the most important UK general elections for decades. And despite the almost farcical attempts of the Conservative group to dress up the statistics—and we saw some fantastic examples of creative writing here today—the reality is that the UK has been one of the worst performing advanced economies for a sustained period of time, both in terms of high inflation and weak growth. And the last 14 years of Tory chaos have eroded living standards, with high energy and food prices disproportionately affecting people on low incomes and other disadvantaged groups.

We cannot sweep under the carpet, as they seek to do, that the cost of living increased sharply across the UK during 2021 and 2022, and the impact of the disastrous mini-budget by Liz Truss. And several speakers—every single speaker on the Conservative benches—have stood up today to defend that budget, and the people of Wales will look at this debate and reflect on that. That budget has been catastrophic for Wales. The annual rate of inflation reached 11.1 per cent in October 2022—a 41-year high. There are Members on those benches who won't have been alive at the point it was as high in the past.

Photo of Andrew RT Davies Andrew RT Davies Conservative

I'm grateful to the Minister for taking an intervention. Can you name a western European country that hasn't suffered comparable inflation, comparable interest rates or worse unemployment than the United Kingdom? If you can't, then obviously, that indicates that this isn't just a UK problem, it's a European and western problem that everyone has suffered. And we are now the fastest growing economy in the G7 in the last quarter. That's a statement of fact.

Photo of Jeremy Miles Jeremy Miles Labour

Well, the Member is playing fast and loose with the international evidence in his contribution—[Interruption.] The Member is playing absolutely fast and loose and the reality is that that budget, which they've all defended today—they've all defended the Liz Truss budget—has devastated people's finances. And the legacy continues to impact our most disadvantaged communities. Her tenure lasted a mere 45 days, but the pressure on people's living costs continues to this day: 1.6 million households, whose fixed rate mortgages end in 2024 facing significantly higher mortgage costs; rental prices have also sky rocketed; according to an Office for National Statistics survey published last month, 55 per cent of adults in the UK reported an increase in their cost of living compared to the previous month; foodbank charities, debt advice charities are all reporting an increase in demand; the Trussell Trust provided over 3 million emergency food parcels across the UK in the last year—a record high, a Conservative record high; and last month, Citizens Advice helped more than 47,000 people with debt advice across the UK. These are not the signs of an economy that is being levelled up, or of shared prosperity.

This Tory UK Government have continued to give us short-term policies, pilot schemes and pet projects, rather than longer term plans. The constant chopping and changing of UK Ministers and an array of flip-flopping economic approaches have created a disastrous uncertainty across our economy. And for the Conservative group to lay a motion of this sort is ludicrous and tells us how little they grasp the realities of life for people in this country, where they have a leader who can claim he understands the hardship created by his own Government because he went without Sky tv as a child. It is excruciating. [Interruption.] 

And in this climate of Conservative making, the Welsh Government has—. Our budget in 2024-25 is £3 billion lower—[Interruption.] 

Photo of Elin Jones Elin Jones Plaid Cymru 5:04, 12 June 2024

I do need to hear the Cabinet Secretary in his response, and I would hope that the Conservative group also wants to hear the content of the response as well.

Photo of Jeremy Miles Jeremy Miles Labour

Three billion pounds lower is what the UK Government's impact on the Welsh Government budget has been. EU funds previously used to fund employability, skills, innovation, business support and apprenticeships, which the Tories promised to replace, they've broken that promise, leaving a shortfall of £1.3 billion in the levelling-up and shared prosperity funds, meaning Wales has less control over less money, actively undermining devolution.

Despite all of this, the gap in employment rates between Wales and the UK has seen a marked improvement over the course of devolution. The improvement in the employment rate has been especially significant for women in Wales. The employment rate has also improved in west Wales and the Valleys, areas that benefited specifically from the highest levels of financial support available via three successive rounds of European structural funds, which Conservative politicians have denied Wales. [Interruption.]

I've been clear that my three priority areas are to increase—

Photo of Elin Jones Elin Jones Plaid Cymru 5:05, 12 June 2024

Please, now, let the Minister continue in his contribution to your debate. You want the Minister to respond to your debate, so let's hear him speak, please.

Photo of Jeremy Miles Jeremy Miles Labour 5:06, 12 June 2024

We continue to back our businesses in Wales. Business Wales continues to support entrepreneurs—

Photo of Elin Jones Elin Jones Plaid Cymru

No, let's not start again, just after I've told you off. If we can hear the rest of the contribution in some silence, please.

Photo of Jeremy Miles Jeremy Miles Labour

Diolch, Llywydd. Business Wales continues to support entrepreneurs and small and medium-sized enterprises in every part of the country; over £140 million in small business rate relief supports ratepayers for around 70,000 properties across Wales every year; an extra £78 million to provide a fifth successive year of support for retail, leisure and hospitality businesses; the Development Bank of Wales, helping businesses grow and invest. [Interruption.] The Wales business fund invests £216 million, supporting 474 businesses and creating and safeguarding almost 9,000 jobs. We will continue to work with and to support businesses right across Wales.

This Welsh Labour Government will continue to do everything in our powers to support a dynamic economy that will support the hopes and aspirations of our young people, making Wales the best place in the UK to invest and to work. On this side of the Chamber, we are working hard and hoping that these last, long 14 years of Tory mismanagement are coming to an end, and not a moment too soon. We want to see a Government in Westminster that will work with a Welsh Labour Government and with our Senedd; a Labour UK Government that sees the potential of Wales, rather than constantly talking us down; a Labour Government with a serious plan for the economy; and a Labour Government, a partner to this Welsh Labour Government, to realise the ambitions that we have for Wales as a nation of prosperity and solidarity.

Photo of Peter Fox Peter Fox Conservative

Diolch, Llywydd. I'd like to thank my colleague Sam Kurtz for opening this debate, and all those of you who have taken part. It's a debate that has to be had, as the people of Wales need to know how bad things are here, and, after 25 years of Labour control, how little has been achieved on the economy by Welsh Labour and their occasional Plaid Cymru partners. Indeed, the messages we've heard from Labour today, it's almost as if they're living in a parallel universe, not recognising or, rather, not focusing on what the issues are in Wales.

But, Sam, thank you for opening. You pointed out how Wales is a home for enterprise and innovation, how we have a breadth of fantastic businesses here, and you reminded us of the pressures they went through during COVID, and then, of course, the things that followed, like Ukraine, and how the UK Government responded to that with the furlough scheme, protecting 11 million jobs—big things. We're coming back to a position where we're seeing growth here—the fastest growth in the G7—and reduced inflation rates.

Luke, you reverted to attacking the UK Government with the same old rhetoric, and didn't see the benefits of levelling-up. I welcome the fact that he recognised that inflation is now coming down due to the UK Government's plan. He also had a dig at Labour, which he quite rightly needed to do, but we must remind him that Plaid Cymru have propped up Labour on the budget front several times over the last 25 years, so you're part of the situation that has been caused here.

Mark Isherwood pointed out that devolution should have helped Wales to thrive, but 25 years of Welsh Labour have left our country underperforming. Wages have been growing here for the last 11 months now, due to the UK's plan, and he's shone a light on the failings of Labour and the historical UK Labour performance.

Rhianon Passmore didn't want to recognise the improvements brought by UK Government. Her focus was on England again—never a focus on Wales, never a focus on this country, the country we're supposed to be all representing. Let's focus on England and try to shine a light on their issues, when you should be shining a light on your own Government's issues, which is performing so badly. And Carolyn did the same. It's the usual rhetoric, ignoring those real issues. I'll refer to the—[Interruption.] Oh, sorry, you can do, yes, certainly.

Photo of Elin Jones Elin Jones Plaid Cymru 5:10, 12 June 2024

If the Member's allowing you, yes, of course you can, Carolyn Thomas.

Photo of Carolyn Thomas Carolyn Thomas Labour

Thank you. But I did mention that Welsh Government worked together with UK Government regarding the free ports, the investment zones and the ambition boards. That's really positive. 

Photo of Peter Fox Peter Fox Conservative 5:11, 12 June 2024

Well, I welcome that, yes, Carolyn. I apologise for not recognising you recognise the good work of the UK Government. But it was interesting, I was watching the Welsh Labour party political broadcast the other day, and I was really surprised that there were no Welsh people in it. It was talking about English people. Wales were too embarrassed to interview their own Welsh citizens, who have experienced what Welsh Labour does to them in this country, so they reverted to find some English people to fill their viewing time, which was a disgrace.

Janet pointed out again how hard it is for small businesses, and how they've been affected, and pointed out quite clearly that the Welsh Government don't understand business—63 pubs closing, for instance, their doors shut for ever in Wales. And Gareth pointed out again the sorry state of the economy here, and how it's shrunk by 1 per cent since 2018, and reminded us of that famous letter from Liam Byrne when Labour were last in control—sorry, the money has all gone. But it just shows the mindset of Labour, that they don't care about how they spend other people's money, and they'll let it go and leave us to clean up the mess in a few years' time.

Minister, I was disappointed because you said that the UK economy was on a burning platform, but, again, I'd hoped as a Minister you'd be talking about—sorry, a Cabinet Secretary—how you had a proper plan, a plan for growth, but you hardly mentioned growth and the importance of creating wealth and creating innovation, almost in denial of the 25 years of inactivity. And you said at the end that you're doing everything in your power—everything in your power—and you'll keep doing that, to drive up the economy in Wales, but we're 25 years on. You haven't done it. We're the lowest performing part of the UK. So, what's the excuse? [Interruption.]

Llywydd, we can argue all we want—we can argue all we want—but it's clear the UK Government have a clear strategy for success that is working. We are seeing inflation brought down to just over 2 per cent. We have the fastest growing economy in the G7. The UK Government could see the opportunities for Wales. They took the initiative and worked with Welsh Government and councils to create city deals and growth deals across Wales, and we've already seen—. We'll see free ports and we're seeing investment zones. We've seen levelling up and we've seen shared prosperity funds working for communities across Wales. It's clear the UK Conservative Government have created the tools to help Wales be the best it can be, creating the conditions for future growth.

We so desperately need it, as, sadly, at the moment, we see Wales with the lowest employment rate, lowest median wages and the highest economic inactivity rate in the UK. We are seeing small businesses suffering from a lack of support, we see tourism tax and constraints on tourism business, and it shouldn't be this way. We need Wales to really thrive, be aspirational with a clear plan for economic growth. We want our young people—they need to have hope, they need access to good jobs and good pay, so that they can live and work in Wales, raise their families here, aspire to securing a home and a positive future. These things should be something this Labour Government should want to deliver, but, sadly, they don't get the importance of growth and wealth creation. They are void of innovative thinking. This lack of governmental aspiration is letting this country down, and will let our future generations down. I urge Members to ignore the desperate amendments laid by Labour and Plaid Cymru and support our amendments, which tell the real story.

Photo of Elin Jones Elin Jones Plaid Cymru 5:15, 12 June 2024


The proposal is to agree the motion without amendment. Does any Member object? [Objection.] Yes, there is objection. I will defer voting under this item until voting time. 


Voting deferred until voting time.