Good afternoon and welcome to today's Plenary meeting. The first item on our agenda this afternoon is questions to the Cabinet Secretary for Finance and Welsh Language. The first question this afternoon is from Cefin Campbell.
Thank you, Llywydd. We are currently consulting on specific proposals to refine the way the letting criteria are applied when classifying self-catering holiday lets for local taxes. The consultation closes on 20 November. I will confirm the outcome in due course, following consideration of the responses.
Thank you very much. As you know, measures to tackle second homes and holiday lets are crucial in order to keep that balance between promoting the rural economy, in particular, and ensuring that homes are available for local people. That is why Plaid Cymru supported these policies as part of the co-operation agreement and supported the principle of the 182-day rule for holiday lets. However, a number of constituents have contacted me to highlight the challenges attached to the system, mainly the lack of flexibility for holiday lets that are inappropriate for sale on the open market. These include agricultural buildings. Now, I visited such a building just a few weeks ago, in west Carmarthenshire, where the holiday let was part of the farmyard and, therefore, could not, for a number of reasons, be turned into a private home. Therefore, the owners of these buildings are caught in a trap—they cannot sell, but they still have to pay a high premium. Therefore, given this, does the Welsh Government have any plans to develop a framework for exemptions that would define what kinds of properties would be exempt, and to develop a statutory exemption policy to ensure that these properties are treated fairly?
I thank Cefin Campbell for those supplementary questions, Llywydd. There is already flexibility in the system that we have. In the consultation, we do ask questions about further flexibilities—flexibilities for people who provide accommodation to get to that 182-day threshold not over one year, but over two or three years. There are a number of other things that we have included in the consultation document for people to come back to us with their comments. As I said in my original response, I am awaiting the end of that consultation—it is open until the twentieth—to look in detail at what people have told us. I've heard people ask about exemptions several times and, in my view, it will be important for people to make the case for that in a very specific way. The 182-day rule is there for a reason, and it applies across Wales and in a way that is relevant to all aspects of the scheme, because that was the principle that we agreed on from the very outset. So, of course I'm willing to consider the point raised by Cefin Campbell, and I look forward to doing that once the consultation closes.
Cabinet Secretary, I felt it was pretty rich to hear Plaid Cymru benches express some regret at this legislation now, not only considering that they promoted it, but they championed this 182-day rule for those holiday lets. We have, time and time again, expressed our concern about the impact of the 182-day rules on those family-run businesses up and down Wales, on those family-run farms that Cefin Campbell refers to. We expressed our deep concern about what this would do to our tourism sector here in Wales, and to hear some regret from the Plaid Cymru benches is pretty surprising to say the least. But it is right that the concern is raised, because it is having a significant impact on those tourism businesses here in Wales, Cabinet Secretary. I welcome the consultation that the Welsh Government is carrying out on this, and I hope that you will take seriously the responses to that consultation.
I wonder also whether you'd commit to a review of the economic and social impact of the 182-day rule and provide assurances that businesses already affected by retrospective charges will be treated fairly also, because far too many retrospective charges, going back a number of years, are having an impact on the sustainability of those businesses. Diolch yn fawr iawn.
Well, Llywydd, I didn't hear Mr Campbell step back on the principle of the 182 days. I thought he was asking me a question more of detail about how the principle is put into practice, and, as I said to him, I'm happy to consider those points when they're made in the consultation. The 182 days is there for a reason, Llywydd—it's there to make sure that people who are able to take advantage of small business rate relief are running small businesses. And if you can't demonstrate that you are able to let a property for only half of the year, then I myself think that that is a struggle for you to demonstrate that you're able to take advantage of the subsidy that the public provides to you as a small business.
And the Member will be aware of a background to this: the very rapid rise in the number of properties that were classified as self-catering properties. The number almost doubled in the period between 2013 and 2019, and there was a 60 per cent increase between April 2019 and April 2023. I don't believe myself that that was a sustainable growth for this sector. It meant that there were too many providers chasing too few customers. And what we have done is to make sure that those businesses that operate as a business are able to do so while taking advantage of small business rate relief. Over 60 per cent of properties in Wales have demonstrated an ability to do so. That was more than the industry told us would be achievable. It was more than the regulatory impact assessment told us was being achieved, prior to the change in the threshold. So, actually, the performance of the industry has exceeded expectations.
As I said in the consultation exercise, we've taken seriously the points made by the industry that it is better in a seasonal industry to be able to demonstrate your ability to do that over a two or three-year period rather than in each single year, and I'm sympathetic to that. I'm not certain I followed the point that the Member made about the retrospective point. The change came into force on 1 April 2023, so it's less than three years old. So, I'm not certain, but I'm happy, of course, if the Member wants to write to me, to follow up that point because I may not quite have grasped it when he asked me this afternoon.
2. Will the Cabinet Secretary make a statement on the impact the implementation of the Social Partnership and Public Procurement (Wales) Act 2023 has had on procurement in the Welsh Government and the Welsh public service? OQ63445
I thank the Member for that question, Llywydd. The Act’s socially responsible procurement duties will come into force in early 2026. The duties require contracting authorities to improve economic, social, environmental and cultural well-being. This is a significant step forward in ensuring that our procurement processes contribute positively to the broader community and help build strong future foundations.
The legislation has significant, as you say, and huge potential for the way we approach procurement in Wales, even if I do say so myself, but is shifting us away from that predominant focus on the financial bottom line to broader social value and the opportunity for strengthening contracts and supply chains as well. I was actually flying the flag for our Welsh way of working just this week in London at the EU-UK Parliamentary Partnership Assembly in a session on trade, supply chain and workers' rights. So, Cabinet Secretary, do you agree with me on the potential of spreading the message about this Welsh way of working, but also, more importantly, the difference it can make in practice in getting that value and the power of the public purse to achieve that difference? Do you also agree that events like Procurex Wales offer a valuable platform to raise awareness of the Act and to promote our pursuit of social partnership? Diolch.
Llywydd, I want to thank Hannah Blythyn not simply for those questions, but for the part that she played in securing the passage of the Social Partnership and Public Procurement (Wales) Act 2023 here in the Senedd. There's no person better equipped to fly the flag for what we are achieving here in Wales. I thank her very much for the work that she is doing.
This is a particularly important period for the implementation of a number of significant aspects of that Act. One set of regulations has just completed its consultation. Those are the ones that will bring into force the socially responsible public procurement duties of the Act. We are in the middle of a consultation on a second set of regulations, which are those that deal with public service outsourcing and the workforce code, and the consultation will end on 3 December. In the next few days, we will launch the consultation on the public works clauses of the Act. I am very determined, Llywydd, that, before the end of this Senedd term, the Government will do everything we can to make sure that those consultations are completed and the regulations are brought in front of the Senedd for determination.
The Member referred to the Procurex conference, which is the annual conference that brings together people who supply public services and those who procure them. There were over 1,000 people at that in Cardiff, and it allowed us to foreground a number of really important issues of public procurement, coming from both the Act itself and other things that are important in the current context. There was a session on social value, where we focused on the baby bundles. It's good to see Julie Morgan here, who did so much to bring that about, which is a really good example of the way in which we've been able to use a Welsh supplier with very particular social missions to help us to bring that important development to fruition. There were sessions on the global political context, given the difficult context of trade and procurement, and also on project bank accounts, which again flows very much from the Act. So, as to the work that the Member does to draw attention to developments here in Wales more widely, there's a good deal going on that we need to celebrate and make sure we advertise to the rest of the world.
Thank you very much, Llywydd. Good afternoon, Cabinet Secretary. I know we had a debate yesterday on the Welsh Language Commissioner's annual report, but I want to pick up on a point that I don't think that you responded to in the debate. That was in relation to the public and private sectors, and the fact that much of the commissioner's work focuses on the public sector. I wanted to pick up on a point in terms of not having a twin-track approach, where we see the public sector developing their Welsh language services and seeing it as important, and the private sector not doing so in the same way. How is the Government working with the commissioner to ensure that the private sector buys into the importance of the Welsh language?
The Member makes an important point, Llywydd. As Tom Giffard said, the powers that the commissioner has, she has those powers to regulate sectors that come under the umbrella of the standards. On the whole—not only, but on the whole—it's public services that come under those standards. We've extended those standards during this term, and there is more to be done. Things will come before the Senedd before the end of the term to deal with housing associations. We want to do more in that area.
With private companies, the commissioner has focused on the things that she can do to help that sector, to provide more information to them, and to show what they can do. At present, we've been reliant on those powers.
I just want to say, when some private sectors do not do reasonable things, and we've seen one or two examples of that in the banking sector, for example, where they've withdrawn services that had been provided to the people of Wales, that does strengthen the hand of those who want to see us taking more enforcement powers in respect of the private sector. Now, at the moment, we haven't taken that approach in general like that, and there are a lot of companies who are doing a lot in the area of the Welsh language without the commissioner having powers. But if there is more evidence out there that private companies are not doing things in the right way, well, of course, we as a Government, and the commissioner as well, will have to think about whether she has enough powers.
Thank you very much for that response, Cabinet Secretary, and I agree it's important that the private and public sectors buy into the importance of the Welsh language. It's something that's good for the companies too, it's not some sort of burden.
I wanted to move on to another issue in terms of buy-in in relation to the Welsh language, and that's the numbers of students who are studying Welsh A-level in our schools and colleges across Wales. Back in 2008-09, we saw around 300 students annually studying the Welsh language and around 500 taking Welsh as a second language. Last year, we were seeing 200 studying Welsh language A-level and around 100 taking the second language course. That is a very significant drop in numbers. So, what assessment has the Welsh Government made of that and what measures will the Government put in place to ensure that we build that and don't see this drop-off that we've seen in recent years?
I know that the officials responsible for the Welsh language, but also the Cabinet Secretary for Education, have been working with Qualifications Wales to think about how we can reform the A-level, because I think that's the problem. Young people don't think at present that the things that they study and the skills that they develop when they take that A-level are relevant enough to the life that they want to lead post education. So, the best way, I think, is to just do that work to revamp the syllabus and what we require from young people when they study Welsh at that higher level. By doing that, we will be able to do more to show young people, as the Act tries to do, that there is a purpose to studying Welsh here in Wales, not just because the subject is interesting and there are lots of things to enjoy by doing it, but because it is going to provide you with something worthwhile for your economic life as well. You will have skills and other attributes after studying at that level that you can show employers and say, 'These are the skills that I can use if I'm going to work in'—well, whatever area they want to work in.
Thank you. We met the Coleg Cymraeg Cenedlaethol around a fortnight ago, and one of the problems that they highlighted to us was this critical mass that schools and colleges see, where there simply aren't enough students, in their view, who actually want to study the Welsh language either as a first or second language at A-level and therefore the course doesn't proceed at all. That means that it won't happen next year or the year after and so on. That's much of the reason why this is happening. There is a financial question related to that, and I know that Medr has a role here in ensuring that these courses do proceed. So, are you considering giving Medr a strategic priority to protect the Welsh language at all levels, so that in the future we don't see those courses not going ahead in the first instance because there simply aren't enough students wanting to study them?
I understand the point, and it is an important point, Llywydd. It's the responsibility of Medr to work with the area to promote the Welsh language, and the coleg cenedlaethol is in consultation with Medr and they're doing that on a statutory level. So, I do want to keep a watching brief on how Medr is proceeding, and at present, from everything I've seen, Medr is enthusiastic in terms of doing everything that they can do to help those who want to study their courses through the medium of Welsh. I do think that developments in the technology area will help us in this context. If there are insufficient numbers of students who want to study in one school, we can do things now in a much more flexible way than previously, with some of the developments that we're familiar with here in the Senedd—there are new ways of bringing people together. So, I want to see Medr not only working hard, but working in a way that is innovative as well, to try to do everything that we can to help those who want to study at a higher level in Welsh, and to do more, as I said in response to the first question by Tom Giffard, in a way that shows young people the importance and the use that they can get out of these studies.
Thank you, Llywydd. If I may start with that last point and just reiterate Plaid Cymru's support for looking on a cross-party basis for solutions to this problem. I know of one school in my region where there were 12 young people who wanted to study Welsh as a second language and they were told 'no' by the school. Twelve people. How many young people does that equate to across Wales? So, if we could look at this on a cross-party basis, I think that we have to address this.
But, if I may turn to my second question, around the same time that the Welsh Language and Education (Wales) Act 2025 received Royal Assent, it was announced that over 7,000 children in Wales are now receiving elective home education, which is the highest figure on record. Given that the Bill has the aim of ensuring that all pupils reach at least level B2 in terms of oral Welsh skills, what steps are being taken by the Government to ensure that children who are educated at home do have access to the Welsh language as part of the target of a million Welsh speakers?
Well, I thank Heledd Fychan for that point. There's a lot of work going on with the Cabinet Secretary for Education to think more broadly about how we can do more in order to ensure that young people who are educated at home have those opportunities to do things and have those experiences that young people in our schools have. I haven't had an opportunity yet to discuss specifically with her how we can do more on the Welsh language, but I am more than happy to do so.
Thank you very much for that positive response. Certainly, one of the things that has come across very strongly through casework and parents contacting me is that this is very important at GCSE level, which is the age when more pupils are likely to be educated at home. One of the things that I have been told, of course, is that the Welsh Government, through the National Centre for Learning Welsh, supports those who are 16 or over to have Welsh classes. Have there been any discussions with the centre itself to see how we could ensure access to those who are under 16?
Well, what we have done, Llywydd, is to try and be clear with local authorities, and that will be important for the Athrofa too, in order to provide a proactive offer to parents who are home educating so that they can access clear information from agencies as to the resources available to them.
We want to make sure that parents who educate their children at home are actively made aware of the resources that are available, which are equally available to those young people as well. Our concentration has been on local authorities to make sure that they are taking the initiative in reaching out to those families and inviting them actively to make use of resources that are available to them. And, as I said, I think the same approach could well be relevant to those responsible for those very successful courses that are run in Wales, to make sure that people beyond compulsory school age also know just what opportunities there are for them to continue to learn the language or to develop the learning of the language.
Thank you for that answer. If I may, while you are having those discussions with the Cabinet Secretary for Education at present, I just want to note one other area where we could be supporting parents and learners of this kind. You’ll be aware, of course, in terms of additional learning needs, that every local authority in Wales currently can’t support learners in that way, and that a number have to learn at home because the support is not available specifically in Welsh. It does vary significantly between local authorities, whether those parents and children can maintain access to Hwb and all of those valuable resources. Obviously, in English you have many different ways to access the kind of support on Hwb, but on Hwb there are a great number of Welsh resources that have received significant investment. So, could I ask, as part of your discussions, can we look at how we can ensure consistency in terms of access to Hwb, so that everyone can have access, including those who are educated at home, because we want to see the Welsh language belong to everyone? The resources are there; shouldn't it be a necessity, therefore, that we allow everyone to have access to them?
Well, of course, Llywydd, I am happy to raise those points when I have an opportunity to discuss these issues with the Cabinet Secretary for Education. It's part of what I was trying to say in my response to the second question from Heledd Fychan: many of those resources are available there, and people who are home educated have the right to use those resources too, just as is the case with young people in our schools. Hwb is something that is very important in the education context in Wales. We have invested, as Heledd Fychan said, a great deal of money in creating resources, and resources through the medium of Welsh. I want to see whether we can do more in order to be clear with those home-educating parents that that is available for them too.
I thank the Member for that question, Llywydd. We remain on track to deliver the reforms announced for this Senedd term, which are designed to support businesses that meet their obligations. The Local Government Finance (Wales) Act 2024 makes significant improvements, including more frequent revaluations, a new framework to address avoidance and the power to introduce differential multipliers.
Thank you, Cabinet Secretary. It will come as no surprise to you that high-street businesses are continuing to struggle. Rents, rates and prices for goods and services have continued to rise, and businesses that pass on these increased costs suffer from a loss of trade. Small, independent retailers and hospitality businesses simply cannot compete with the chains of multinationals. Cabinet Secretary, has the Welsh Government considered implementing a business rates system based upon the businesses' actual turnover, rather than the size of their premises and the rent they pay?
Well, it's an interesting point that the Member makes, Llywydd. The efforts of the Welsh Government during this Senedd term have been designed to make the system that we currently have work more effectively. It already does work very effectively for the majority of those who pay small business rate relief. The scheme provides relief to around 70,000 properties, and over 50,000 of those pay no business rates at all.
I was grateful last week, Llywydd, that the Senedd passed the regulations that will allow us to introduce a differential multiplier next year. The Member will know that our plan is to introduce a lower multiplier for high-street shops—those with a rateable value of £51,000 or less. I met yesterday with a large number of representatives of the retail sector, and that was broadly welcomed by them. It should lead to lower bills for those high-street shops that we know are the backbone of many of our towns across Wales.
Altaf Hussain suggests a more significant reform of the system. While I don't have a view on the particular reform that he has suggested this afternoon, I myself am more with him in believing that a more root-and-branch reform of business rate relief would be a worthwhile area for investigation in the next Senedd term. I said a moment ago that 50,000 small businesses in Wales pay no business rates at all. They get business rate relief whether they need it or not. It's an entirely indiscriminatory system. And there is a strong case, which was investigated in Scotland not that long ago, for reforming the system in a way that provides more help to those businesses in their early stages, when they're getting off the ground, when they have costs that, over time, become just part of their business, and withdrawing relief from businesses that are long established and where a permanent subsidy from the public really ought not to be making a determinative difference to whether or not they can continue to be businesses.
I thank Carolyn Thomas for that question. The Welsh Government continues to hold discussions concerning the aggregates levy, particularly in the context of its devolution to Scotland. This creates a new context within which to consider the apparatus that the devolution of the levy to Wales would require.
Thank you for that answer, Cabinet Secretary. As you know, I recently led a debate in the Senedd calling for a 1,000m buffer zone due to the significant impact quarrying has on local communities, affecting people's health and damaging property. The aggregates levy fund was an important mechanism for affected communities to derive some compensatory benefits from quarrying—for community facilities such as play areas and village halls. Quarry lorries have become much bigger over recent years. They're more impactful as well, creating terrible noise when they pass by in convoys. They cause terrible vibration to people's properties. In the letter you sent to me last year, you said you were looking forward to further conversations with the UK Government on the possible devolution of the levy. I had the response from you earlier, but I was just wondering what other progress has been made in those discussions. We'd like to see the devolution of the levy here in the near future. Do you expect that to happen?
Can I thank Carolyn Thomas for those questions and for the persistence with which she has advocated for the devolution of the levy here in Wales? I think there are three points that I'd want to make in response to the Member's further questions.
First of all, I think the Welsh Government has already demonstrated our attachment to the principle that those communities that are affected by particular activity should have some form of recompense for the disruption that they face. In relation to the landfill tax that we have here in Wales, from the very beginning, from the time we set up landfill disposals tax, we included the establishment of a landfill disposals community scheme. That was exactly to recognise that people who live next door to landfill disposal sites also experience the same sorts of disadvantages that Carolyn Thomas pointed to in relation to quarries.
That fund continues to exist. It's in the budget for next year. It has supported over 300 communities since it was established, including communities in the Member's own region. There's been a recent use of the fund to create a community garden in Mold, and in Menter Môn, on Ynys Môn and in north Gwynedd, the fund is helping to protect water voles, the UK's fastest declining mammal. So I think we've very good evidence in Wales of doing exactly what the Member suggests.
In order to do that, we have to draw down the power from the UK Government. We do not have the power that the Scottish Government and the Scottish Parliament have. I had some encouraging conversations with the Chief Secretary to the Treasury last month on our application to draw down powers to create a vacant land tax here in Wales. It's the first time we've used that machinery. I'm due to discuss it with the Exchequer Secretary in the next week or so. If we succeed in doing that, then we will have used the machinery that we can then use to try to pursue devolution of the aggregates levy here in Wales.
I can't promise the Member that it's a quick process. It's six years since I first wrote to the Treasury asking for powers to create a vacant land tax here in Wales. But once we've completed the journey around that circuit once, it should be easier to do so in future. I have the points that the Member has made firmly in my mind when I'm carrying out those discussions.
The aggregates levy fund was a great way of offsetting the environmental impact of the extraction of quarry activity in Wales by using revenue generated from the levy to support community and environmental projects. The Welsh Government ended that fund back in 2017, which was met with substantial criticism from the Mineral Products Association, who said:
‘As the minerals sector is one of the last remaining heavy industries in Wales, the end of the Fund removes a positive mechanism that built dialogue and joint working between industry and local people’.
In my constituency in the Vale of Clwyd we may see the extension of Denbigh quarry, depending on the outcome of the planning appeal, and I have made my opposition to that extension very clear. But if we are to see more mineral and aggregate extraction in Wales, particularly close to residential properties, there needs to be greater joint working with local people, and a similar fund must be established to offset the environmental and community impact.
But I also wouldn't like to see the re-emergence of a similar levy leading to quarries popping up all over Wales in order to use them as a cash cow for the Welsh Government. So can the Cabinet Secretary outline what plans are in motion to ensure that revenue generated from the aggregates industry is put back into local communities and that any potential levy fund won't lead to the further expansion of quarries in order to get more money into Government coffers?
There are no such plans because there are no such powers. As I’ve explained in my answer to Carolyn Thomas, we would need to draw powers down from Whitehall in order to create an aggregates levy fund here in Wales. I note the point he makes about the ending of the previous arrangement in 2017. He will no doubt have worked out that that was exactly midway through the 14-year period of austerity. If he wants the explanation as to why it wasn't possible to continue with all the things that we would have wanted to have done, then he has the explanation very easily available to him there.
5. What proposals for Barnett Formula reform does the Welsh Government intend to present to the UK Government at the meeting on the issue in February 2026? OQ63435
Thank you very much to Adam Price. Reform of the Barnett formula is not a bilateral matter between the Welsh and UK Governments. It can only be pursued through discussion and agreement between all four UK nations. The forum for doing so is therefore the Finance Interministerial Standing Committee. A paper on Barnett reform will be presented to its next meeting, scheduled to take place in Belfast in February.
Cabinet Secretary, Cardiff University's new fiscal framework report makes five recommendations for Barnett and wider financial framework reform: an updated estimate of Wales's relative funding need; full devolution of income tax rates, thresholds and tax on savings and dividends; uprating or abolishing the limits on the Wales reserve; lifting the rule that resource borrowing is only for tax forecast errors, so it can support planned day-to-day spending; and raising and linking the capital borrowing cap to a share of the resource budget, for example a £3.3 billion limit if debt service were capped at 1 per cent. Which of these recommendations does the Government broadly agree with, and will they form part of the discussions that you're currently having with the UK Government?
I thank Adam Price for that. It was a very interesting report. Of course, I see that the authors conclude that—. Far from replacing Barnett, their conclusion is the more Barnett the better, which I think casts quite a different light on some of the conversations that we've had here on the floor of the Senedd. The Welsh Government's position remains that we ought to have a replacement for the Barnett formula with a needs-based formula that reflects the needs of all parts of the United Kingdom. But that is very difficult indeed to bring about when other nations in the United Kingdom do rather well out of Barnett. But the report suggests that Wales has done well out of Barnett as well when it comes to devolved responsibilities, but not so well in non-devolved responsibilities, hence the 'more Barnett is better' slogan that the report uses.
Amongst the five points that the report makes, some of those are already the policy of the Government and are part of the conversation that we will have in Belfast in the new year, and that is the uprating of the current arrangements within the fiscal framework to bring them into line with today's costs, rather than those that pertained back in 2016. Others, I think, are more a matter for continued debate. I am myself very interested in the fifth recommendation, that final one, about instead of there being a capital borrowing limit that we agree and then is uprated with inflation, you tie it instead to the ability to service the debt that you would inevitably incur at 1 per cent of revenue. That would, as the Member said, give us a capital borrowing capacity in Wales of over £3 billion, which coincidentally is the limit already available to the Northern Ireland Executive, and very different to the £1 billion headline that we operate within currently.
One of the other proposals is full devolution of income tax. I was very interested—I am sure the Member will have been as well—to follow some of the debate in Scotland that followed when the Chancellor appeared to be about to raise income tax by 2p in the £1 in the budget we will see next week. That would have created some very difficult questions for the Scottish Government, and they were very well rehearsed in the Scottish press. So, on full devolution of income tax, the report makes a case for it. There are some potential difficulties with it as well, however, which I think will deserve further proper public debate.
We've seen a Labour Government on either end of the M4 now for the last 18 months, and I for one am not convinced yet that this new Labour Government really understands what Wales needs. Whilst, yes, we saw additional money in the last budget, which was welcome, many now will ask at what cost, and we'll see more of that, I think, next week in the budget.
However, I know that you and I are in agreement when it comes to the fact that the Barnett formula does need reform. I would hope that your colleagues in Westminster would agree and that the Welsh Secretary and Keir Starmer understand the unique challenges Wales faces, so that amendments can be made to the fiscal framework, as you did in 2016, which was very welcome.
Is there an opportunity to add other need-based elements into the formula, as you did back then? Are you convinced that your colleagues at the other end of the motorway do get the case for this change? Whilst I hear what you say about the wider Barnett formula reform, is there an opportunity for us to tweak the fiscal framework from a Welsh perspective, recognising all the challenges we face, and do that element in advance of that wider Barnett discussion?
That's exactly the course of action that I would like to pursue. I want to persuade our colleagues in London to do the modest things first, simply uprating the figures in the fiscal framework in line with inflation so that their real value in 2026 is the same as it was in 2016, and then for wider improvements to Barnett to be discussed as a second step. So, the strategy that the Member outlines is definitely the strategy that I think is the one that best protects us here in Wales. And as ever, in the way I was trying to suggest in my answer to Adam Price, you need always to be alert to the risks in courses of action as well as the rewards. A full-scale review of the fiscal framework, as has been carried out in Scotland already, led to some changes to the fiscal framework that were not to the advantage of the Scottish Government. So, I want to concentrate on the things that I think will work best for Wales in the first instance, and then see where that takes us in that wider pattern of reform.
One of the points that the Cardiff University report makes is the fact that the funding arrangements across the UK, across the different countries, are becoming increasingly asymmetrical, which the Cabinet Secretary has referred to in his responses. Does he believe that there should be an approach to a more rational, principle-based system on a UK-wide basis?
Well, I'm sure of this, Llywydd, that you can only have those changes if it is done on a four-nation basis. This is one of those areas where some other players have fairly strong veto cards, and if they're not prepared to discuss certain matters, you just simply cannot get them on the agenda. My Scottish finance colleague, who I've got a high regard for, was absolutely clear in my last discussion with her that the current Scottish Government will not agree to discussions on a replacement for Barnett. Anybody who sees the advantages that flow to Scotland from the current formula will understand why she would be unlikely to do that. However, colleagues in Northern Ireland and Scotland are both committed to the discussions we will have in February, which are not about a replacement for Barnett, but about making the current Barnett system work better. I think that would reduce some of the asymmetry that has grown up in recent times, and that that would be to Wales's advantage.
Reserved taxes and impact assessments of reserved tax policy choices are a matter for the UK Government. I regularly engage with UK ministerial colleagues to ensure that the voice of the people of Wales is heard and to argue for a tax system that is fair, simple and transparent for taxpayers.
Cabinet Secretary, last week the Welsh Affairs Select Committee called on the UK Government to pause changes to inheritance tax rules until the specific impact on Welsh farmers has been examined. The committee has made it clear that the changes to inheritance tax could have a disproportionate impact on Welsh farmers, due to the unique nature of the industry here in Wales. The report notes that the majority of farms in Wales are small, family-run livestock businesses with an average income of around £22,000.
Now, Cabinet Secretary, next week's budget is an opportunity for the Chancellor to support Welsh and, indeed, Pembrokeshire farmers by scrapping the change to inheritance tax. So, ahead of that budget announcement, can you tell us what financial assessment has been made of the impact of the UK Government's tax change on the farming industry here in Wales? Can you also tell us what representations you've made to the Chancellor about this specific tax policy?
Well, Llywydd, on this matter, the Welsh Government has been led by the Deputy First Minister, and he has had a series of direct contacts with UK Ministers to make sure that the concerns of Welsh farmers are well known to those who, in the end, will be responsible for making decisions. The Deputy First Minister, as well as face-to-face discussions, I think as recently as the very end of October, with Angela Eagle, the Minister now responsible for these matters, has put those concerns in writing to the UK Government in March, and again in September, making sure that there is meaningful engagement with Welsh farming unions on their concerns, and to ask the UK Government to consider any practical alternative proposals that may mitigate any particular adverse impacts, particularly those on smaller family farms.
So, Llywydd, I think I can say without any hesitation that the Welsh Government, through the work of the Deputy First Minister, has ensured that the concerns that Paul Davies has raised and those raised by those in the industry have been clearly communicated, directly communicated, to those who, in the end, will make these decisions.
7. What consideration did the Cabinet Secretary give to ensuring that the delivery of free school meals is supported in preparing the 2026-27 Welsh Government draft budget? OQ63424
Llywydd, thank you to Joyce Watson for that important question. The draft budget contains £93.5 million to ensure full continuation of our policy of universal free school meals in Welsh primary schools. And that is in addition to the money provided to local authorities via the revenue support grant for those who are entitled to free school meals beyond our primary schools based on benefit-related criteria.
Diolch, Cabinet Secretary. Universal free school meals in primary schools is a real success for children in mid and west Wales. Figures released earlier this year show that 2,284,000 meals were served in Pembrokeshire between September 2022 and June 2025. The policy and the investment that are being protected show how seriously this Welsh Government takes its commitment, making sure that no child feels hungry during the school day. And as you rightly said, the draft budget demonstrates that commitment, with that £93.5 million of funding set aside, in the hope that others will support it too.
Will the Cabinet Secretary take this opportunity to reiterate that our Welsh Labour Government's budget will always protect the needs of all of our children so that they get the very best start in their lives?
I thank Joyce Watson for that question. I absolutely give her that commitment. Those were remarkable figures that she provided of the millions of meals that have been served in Pembrokeshire alone. And, of course, on the day we launched the scheme, I was with Siân Gwenllian, then the designated Member, together, in a Pembrokeshire school, where the very first meals were being served, and it's remarkable to think that over 2 million meals have been served in the meantime. The policy is an outstanding success. The budget supports its full continuation.
It's not the only thing, is it, that we provide in our schools. I've occasionally felt slightly frustrated, Llywydd, at listening to UK media reporting the introduction of free breakfasts in schools across the border as though this was some very strange and new initiative, whereas we've had them here in Wales for nearly 20 years. They were introduced for exactly the reasons that Joyce Watson sets out—to make sure that children who come into Welsh schools don't arrive hungry and unable to learn. And that investment and the investment we're making in our universal free school meals in primary schools is absolutely part of our commitment to making sure those young people get the best chance and the best start they can in life.
8. What consideration did the Cabinet Secretary give to ensuring that local authorities can properly fund social care in preparing the 2026-27 Welsh Government draft budget? OQ63427
Llywydd, the draft budget provides an average growth of 2.5 per cent in the local authority settlement. It also continues the additional £30 million provided in this financial year for social care through the budget agreement with the leader of the Welsh Liberal Democrats. A yet more ambitious budget is possible for next year, provided other parties are prepared to reach an agreement on it.
Diolch. The real living wage, of course, has increased by 6.7 per cent, and the Welsh Local Government Association have alerted Government that local authorities are experiencing a budgetary pressure of 7.2 per cent due to increased costs, demand and to avoid putting vital support at risk, and this needs to be addressed. Organisations, particularly from the third sector, who have been commissioned by local authorities, are struggling to remain sustainable within social care. One organisation in my region absorbed a £1.5 million loss this year with national insurance and living wage pressures, but with the draft budget increase, they face an additional £1 million deficit again next year. They're really terrified about what this may mean, and they're not alone in fearing for their future and the sustainability, crucially, of the care that they provide. So, how will the Welsh Government ensure that local authorities meet the programme for government commitment to pay the real living wage for social care workers when local government doesn't have the resources to pay at that level?
Well, Llywydd, I take the points that the Member makes very seriously. The draft budget allocates 98.6 per cent of all the resources available to us here as a Senedd. That means there is 1.4 per cent, which is well over £300 million, that can yet be allocated in the final budget. I'm sure she will be urging members of her party to come through the door and have conversations about how that money can be used, and one of the ways in which it absolutely could be used is to provide more to local authorities to make sure that they can meet those responsibilities. That will only be possible if other parties here are willing to have those conversations. As I have done since July of this year, Llywydd, I urge parties to come forward to do that.
The next item will be questions to the Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs. The first question is from Delyth Jewell.
1. What is the Welsh Government doing to tackle the rise in river pollution from contaminated post-industrial sites caused by increased rain and storms? OQ63438
Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs
Diolch, Delyth. The Welsh Government is committed to tackling potential pollution associated with post-industrial sites. Our overarching drivers are the protection of human health and the environment. We continue to provide the regulatory framework to support Natural Resources Wales and local authorities to address sites suspected of causing pollution, including to watercourses.
This is an issue that I have raised on a number of occasions. It is something of great importance, because contaminated land is a hidden poison on our landscapes. Friends of the Earth Cymru estimate that at least 45,000 sites across Wales could be contaminated, but we can't know the actual figure because most have never been inspected properly. One such site is the former Ty Llwyd quarry in Ynysddu, where really foul-smelling brown liquid runs into woodland and the Sirhowy river after heavy rainfall, as happened last week.
We know that chemical waste was dumped by the company Monsanto there decades ago, and their legacy lingers on. Pollution at Ty Llwyd has been under investigation by Caerphilly County Borough Council for years, and a report that was meant to be released in October 2024 has still not been published. There is still no environmental permit, as I understand it, from NRW for the leachate discharge chamber, and the council now recognise that the cap over the quarry does not cover the waste mass. Do you agree with me that residents are being drastically let down, and what will the Welsh Government do to support these residents and to make their community safe?
Thank you, Delyth. I recognise your long commitment to raising this issue and seeking those reassurances for the local community on the work that is being done in terms of Ty Llwyd.
Just for a brief update, Caerphilly County Borough Council, as you know, has assessed the site to determine its regulatory status. Of course, its preliminary conclusion at that time was that the site did not meet the definition of 'contaminated land' under Part 2A of the Environmental Protection Act 1990. But NRW and Public Health Wales are reviewing the revised draft report following further sampling at the site, and the council will then make a final decision on the site's regulatory status.
Now, a remediation options appraisal has been produced by the council's contractors for the sites, and based on its recommendations, the council has undertaken improvements, which we have discussed before in the Chamber, funded by Welsh Government, for example to the drainage system, to make sure that we can reduce leachate escaping during wet weather. NRW is also developing an environmental permit relating to the leachate discharges, which will be issued to the council to improve its future management and to also reduce any offsite impacts too. So, in the interim, Natural Resources Wales has served the council with a statutory notice stipulating several short-term actions that are required to reduce the risk of pollution incidents during wet weather, and longer term proposals are currently being developed by the council to meet the requirements of NRW's permit as it's being developed.
There's also, of course, the wider issue beyond localised issues like Ty Llwyd, and the wider contamination across Wales that you touched on, and, of course, things such as the legacy of our metal mining industry as well, which goes back centuries. All of those need investment and attention.
Thank you, John. Investment, regulation and innovation are driving evidence-based improvements in the Usk catchment. We've committed over £4 million to the Four Rivers for LIFE project and the Usk Catchment Partnership, to restore water quality and protect the Usk river and other special areas of conservation across Wales for future generations.
Deputy First Minister, our precious River Usk is a wonderful natural asset to Newport and all those communities along its course. Understandably, those communities want to see it protected and enhanced. But, unfortunately, the Usk continues to suffer sustained pollution incidents, from agriculture and other sources, putting its site of special scientific interest status potentially in question. The Save the River Usk campaign group are concerned that Natural Resources Wales are not adequately resourced to properly respond and that that response is worsening, with some reports of pollution incidents not receiving a response at all. So, will Welsh Government work with NRW to ensure the River Usk is cleaned up for the benefit of our natural world and our communities?
John, I can give you the absolute assurance that Welsh Government, and through its agencies as well, is committed to cleaning up and delivering that pristine river health that we want to see in the Usk and in other rivers. The River Usk is indeed one of Wales's most treasured rivers. But it does face unprecedented pressure now from nutrient pollution and from sewage discharges and, indeed, land management practices, and we need to deal with this in a joined-up way. It's vital that we act now to protect its ecological health, for now and for the future. It's not a single-source problem, as you've acknowledged. It is agriculture, it's waste water discharges, it's also storm overflows, so it needs that united multisector approach. We've got phosphorus levels now in the Usk amongst the highest recorded in Wales. It's threatening wildlife and habitats and the special area of conservation status, as you say.
Now, over two thirds of the phosphorus pollution in the Usk comes from agriculture; waste water treatment and storm overflows add further pressure. So, we are absolutely committed, John, to tackling this together, through Government, regulators, farmers playing their part, water companies and communities working together, to restore the Usk. So, we need that investment—absolutely right. We need stronger regulation. We need nature-based solutions as well, to reverse what have been decades of decline, and we need to build resilience for the future against climate change. So, absolutely, you have our commitment, John, on that, working with partners, to restore the Usk to the health that we want to see it in.
It's a shame to see Labour Members yet again blaming agriculture for all the problems in our rivers. What I think, Deputy First Minister, that we need to see is actually Welsh Water cleaning up its act over our waters and dealing with their storm water overflows, instead of paying their chief executive office almost £0.5 million a year. So, I would like to know, Deputy First Minister: what are the Welsh Government doing to make sure that Welsh Water clean up their act and make sure that we're cleaning up our rivers, so they're there for our future generations?
It's a shame, given the tone of the question from John Griffiths that led this, which was looking for a joined-up approach to dealing with the Usk, which it needs, that the Member chooses, I think unwisely, really, to make it one sector versus another, or one party against another. That's not the way we clean up the river health of the Usk.
So, what I can say, James, in response to you, is, for Dŵr Cymru's part, the asset management period 8 investment, which is significant, will deliver a step change for water quality in the Usk catchment—so, for example, with phosphate removal schemes at Abergavenny and Brecon coming online in 2025, and improvements as well to ammonia and storm overflow management, and they need to deliver on it as well. But let me make it clear as well that there are numerous contributory factors here to the pollution, and there will be numerous people and partners who will need to step up—agriculture, Dŵr Cymru and other land managers—to actually turn this around. So, we've given—. There's now over £3.4 million that we've allocated to the Four Rivers for LIFE project; that is already delivering major quality improvements on the Usk and other SAC rivers. Over £600,000 has gone to the Usk Catchment Partnership for nutrient management plans and local action, alongside, I have to say, Catchment Systems Thinking Cooperative's £7.1 million innovation project, piloting cutting-edge river monitoring in the Usk as well.
And just to say as well, the joined-up approach to this, rather than party versus party or sector against sector—. On the ground we've got actual progress going on, which would be lovely to hear you reporting on as well. We've got 350 farms now engaged, 50,000 trees planted, 100 km of fencing installed, floodplains reconnected, salmon migration barriers removed and invasive species tackled. So, James and others, I would simply say: we're all in this together, we work on this together, to restore the river health, rather than scoring simple political points.
Diolch, Llywydd. Just a week to go before yet another dismal Labour budget, and one that is certainly going to ensure that we're going to be a lot worse off. We know that money doesn't grow on trees, Deputy First Minister, but you certainly like spending on them. The Welsh Government's draft budget report allocates £7.5 million of taxpayers' money to the national forest for Wales. This supports around 70 sites in Wales, with funding for online webinars, signage, information boards, professional photography and video footage, not for the planting of trees. It maintains a team of six national forest woodland liaison officers to help landowners gain national forest for Wales status. Now, we do know that this Welsh Labour Government is famous for its over-burdensome, costly and top-down bureaucratic processes. Deputy First Minister, do you really think that Wales needs six woodland liaison officers, and how are you looking into these roles, the costs, and their actual results on delivery?
Well, Janet, strong advocate for the environment that you are, I wonder how we manage the national trails within Wales. I wonder how we manage the Wales coast path. We actually have people who manage it and signpost it, and work on the educational aspects of it as well—we already do that. The Wales coast path, for example, is one of the biggest tourism visitor initiatives and incentives and attractions that we have. We were the first to develop it. Now, it's a shame that you seem to be opposed to the national forest for Wales, because I honestly thought you were going to attack our overseas investment. Because, in recent days—
Because, in recent days, I've heard that challenge from the Conservatives saying, 'Why are we wasting money on things like investment with, for example, the reforestation in Mbale in Uganda, with Jenipher's Coffi, with the women's co-operative?' So, I thought you were going to go at that and tell us to spend money in Wales, but instead, Llywydd, I've been told: don't spend money in Wales, don't plant trees, don't invest in people getting out into the great outdoors. You don't believe in Wales. You don't believe in investing overseas. What do you believe in? What do you believe in?
You're not Robin Hood, nor are you Dafydd ap Siencyn, but you do remind me of the High Sheriff of Nottingham or the Red Justice of Conwy. Labour are squeezing all of our community and households for tax increases to fund what can only be described as frivolous schemes or vanity projects. According to the Welsh Government's latest national forest status scheme guidance, 2023, the Welsh Government is producing a set of indicators to help measure how the national forest for Wales is developing and whether it is meeting its objectives. Two years on, there are no indicators, yet you have spent millions of pounds planting trees in Uganda.
In fact, the last 'Woodland for Wales' indicators published are from April 2017 to March 2018. You have failed yet again.
Cabinet Secretary, bearing in mind that this scheme was launched in March 2020, why is it that, five years and eight months later, there are no public indicators? And as such, why would you invest £7.5 million next year when we have no idea whether the real targets are being achieved?
Well, I wonder, Janet, what have you got against trees, either here in Wales or overseas? What is it that you've got against trees? Let me just give you the latest update on the national forest for Wales. The total number of non-Welsh-Government woodland estate national forest sites is now 72. A total of 4,080 hectare sites came in through the latest round of the status scheme. The latest update we have: a third phase of the Welsh Government woodland estate has joined the national forest network. This is made up of 12 blocks of woodland, covering 21,228 hectares. It brings the total, now, of the Welsh Government woodland estate blocks in the national forest to 38, covering 86,295 hectares. What do you have against trees, Janet? The total size of the national forest for Wales is now over 90,000 hectares, which, for those who understand it in other metrics, is equivalent to 90,000 rugby pitches. Football pitches are also available. So, Janet, I just ask you: what have you got against trees?
For the record, Deputy First Minister, I absolutely love trees, and I love the impact that they have in clearing carbon. But at the heart of this scheme—and I know you don't like criticism, and it's not often I do, but I am where this is concerned—the aim is to increase woodland creation, to reach your own target of 43,000 hectares of new woodland by 2030, and 180,000 hectares by 2050. That is equivalent to planting at least 5,000 hectares per year. Now, according to Forest Research, you only managed, out of the 5,000, 960 hectares in 2025. That's less than in 2023 and over 4,000 hectares short of what is required annually. This is just another fail by you and your Labour Government.
I do love trees, and I want to see more trees planted in Wales, but I don't like the bureaucratic nonsense that I've just pointed out. It doesn't help the coastal paths, it doesn't help the woodland trails, it's bureaucratic. But you couldn't answer me on that. But how will you reassure me now, and our Senedd Members, and indeed the people of Wales, that you are actually not wasting taxpayers' money, Welsh taxpayers' money, on doing something for show rather than substance? Diolch.
So, Janet, I refer you to my earlier answer with some of what we've planted already and what we've achieved already. I'm glad to hear you do like trees, because I was under the worrying misapprehension there that you didn't like them, either here or when they're planted abroad—you just didn't like trees. But you do, so that's good. So, you will welcome the fact that, in tree week, which is shortly coming in front of us, we will announce 23 further coedtiroedd bach sites. The two commemorative woodland sites will be announced as well, which have formally joined the national forest for Wales network.
Last financial year, we took forward a new landscape-scale approach to the national forest for Wales, which we tested through the local nature partnership challenge fund. Over £0.5 million was awarded to 12 collaborative landscape-scale pilots that meet all six national forest outcomes.
The bureaucracy you mentioned, by the way, is because we need to measure and monitor what we're doing. So, what you describe as bureaucracy, we describe as actually measuring the outcomes that we're trying to achieve. When you would strip out bureaucracy, I don't know what your alternative would be—just throw money at people to do whatever they want?
Funding has also been made available through the woodland investment grant to create and enhance woodlands to meet those national forest outcomes. The latest round went live on 6 May. It closed for applications in August. Strong applications were received in them. We've awarded funding to 23 sites, which we'll announce the details of shortly as well. There's a whole pipeline of sites now to join the national forest for Wales. This is a great success, so it'd be great to hear your support for it, as opposed to criticism of it.
Thank you, Llywydd. The floods in Monmouthshire reminded us of the critical and ongoing need to invest in our infrastructure, our resilience and our communities. I want to ask about the impact that these storms have on insurance costs.
The UK Government's Flood Re scheme does provide a safety net of sorts, but the scheme is due to expire in 2039, at which point insurance companies will be able to, and I quote,
'return to fully risk reflective pricing for flood insurance.'
That is a cliff edge that threatens the very existence of some communities. People will be priced out of those areas. Some mortgage lenders are already considering whether to automatically decline loans for borrowers in high-risk areas. Could you confirm, please, how many Welsh households currently benefit from the Flood Re scheme? And how are you making the case to the UK Government to extend that scheme beyond 2039?
Thank you. It's a really important question. So, Flood Re has helped quite a sizeable number of households right across Wales by making that insurance offer available. There were nearly 19,000 ceded policies since Flood Re's launch, and 15,564 policies are currently in force. So, we continue to work, along with the UK Government, closely with the Association of British Insurers, and with NRW, to enhance and promote insurance awareness there.
We also, as you know, support the Flood Re Build Back Better scheme. And, just to say, my understanding is that we may well have, just of interest to those who've been flooded recently, a portable demonstration of Build Back Better landing in the streets in Monmouth so that people can see what that looks like. And my thanks, if that does happen, to the UK Government, actually, for offering this. It's one that moves around areas of the UK, so we're hoping to bring that in there. And we'll continue to work, just to give you that assurance, with the UK Government to make sure that we have something that can go beyond that transition of 2026.
Thank you, and if that demonstration does come to Monmouth, I think that would be really welcome.
To turn to empowering communities in this context, a lack of consistent and Welsh-specific data is a problem, and that exacerbates a lack of public awareness about accessing tailored insurance coverage as well as property flood resilience support, something that's regrettably amplified amongst households that are struggling economically and who might be more exposed. This, surely, underlines the need for direct Government intervention to enhance insurance coverage in flood plain areas, rather than offloading responsibility solely on home owners. Could you explain, please, what engagement the Welsh Government is undertaking with insurance companies to directly access their data to understand the proportion of Welsh households who are without home, business and contents flood insurance coverage? And, if I can ask finally, do you believe that, in addition to the current NRW guidance, there needs to be a targeted outreach campaign on behalf of the Welsh Government with households and businesses to enhance their awareness of insuring against flood risks?
We'll certainly do all we can, in addition to the NRW guidance, which I've regularly referred people to within this Chamber, and the work that goes on outside of it as well, to raise awareness of that. We'll do all we can to promote that, without a doubt.
You raised the question of whether the Government should do more, stepping in in the Flood Re area or in support of home owners who are in flood areas. The challenge here is that the Government is definitively not in the insurance business—has not been, never has been. That is the insurance industry. However, what we can do is, in negotiation with the insurance industry, that private sector industry, we can negotiate on schemes where the support is there for householders, but also where there is a requirement then on the Government to actually invest as well. And that's always been the basis of Flood Re.
Going further than that—and we have, by the way, of course, as I regularly say, with the support of the Chamber, put record investment into flood prevention and flood mitigation—is not something that any Government has looked to do, to step into the role of insurers. I do recall, at the time when Flood Re was brought forward, there were lots of discussions on different options, but that was discounted at that time for very good reasons because, otherwise, the Government has to balance the insurability needs of different householders throughout the country. That's not what the Government normally does. You might have an idea or a proposal.
No. On that, I do appreciate that, but evidently the market isn't working for many households and we're going to have to think outside the box. Perhaps that's something that we could take up outside. I appreciate there would be risks with that.
Looking at this broadly, obviously the answer isn't to deny the realities of the climate emergency, which some parties and some very loud voices would seek us to do; rather, it would be to embed climate resilience and mitigation in all aspects of Government policy. Now, another concern in this context is the patterns of new house building. They aren't necessarily reflecting the escalating volatility of the climate. To quote Professor Jess Neumann, who's a flood resilience expert at the University of Reading, planning in the housing sector is overly predicated on meeting standards that are fit for today, not 2070 or 2089, when we're going to have much more extreme weather. Now, these concerns have been echoed by the Climate Change Committee, who have recently noted that there are no clear policy mechanisms designed to accelerate the uptake of property flood resilience measures in Wales or to regulate building design. So, how have you responded to those concerns, please, and what specific steps have you taken to ensure house building programmes are more responsive to the challenges in the years ahead?
I regularly engage with my Cabinet Secretary colleague for housing and local government on this issue, particularly with new developments and new housing being developed, and I'll happily write to you, Delyth, to update you on where we are with that. But it's also a question of what we do with existing properties as well, and we do make, of course, available funding to local authorities, who are the risk management authorities within their areas, to work with those local communities affected and to look all the way down to individual household resilience, as well as community resilience and street-level resilience as well. There is something in this space to do with design of communities and street levels, so that when you do have water ingress, it can flow away from homes and into natural processes. But, for new properties, I'll happily write to you and update you on the discussions we've had.
Thank you, Julie. The Welsh Government is committed to reducing the impact of pharmaceutical waste on the environment. The recently refreshed NHS Wales decarbonisation strategic delivery plan includes an action on embedding the principles of the Your Medicines, Your Health programme in reducing medicines waste and improving adherence.
According to the Royal Pharmaceutical Society, an estimated £21.6 million-worth of prescribed medicines is wasted annually. And while data for NHS Wales is limited, estimates from NHS England suggest that medicines form approximately 25 per cent of the NHS's total carbon footprint. So, as well as carbon emissions, when a medicine is taken, between 30 per cent and 100 per cent of it is excreted by the body into the sewerage system and skin products can be washed off into waste water. Not all medicine traces are able to be removed by water treatment plants, which can result, therefore, in water pollution, and even small amounts can cause significant risks to human, animal and environmental health. Medicine packaging can also be very difficult to recycle and it contributes to landfill waste in many cases. So, what is the Welsh Government doing to increase public awareness of the impact of medicine waste? And what is it doing to ensure that pharmaceutical companies in Wales are doing their bit to not negatively impact on the environment?
Thank you, Julie. On the first point, on public awareness, there's a lot that we can do and that we are doing, so it's one of the key objectives of that campaign I mentioned—the Your Medicines, Your Health campaign. Following that refresh of the NHS Wales decarbonisation strategic plan, there is now an expectation that the principles of this campaign will be embedded right across the NHS in Wales. We originally trialled this in Cwm Taf Morgannwg University Health Board. It's now become an all-Wales programme of work, which is being led by the All Wales Therapeutics and Toxicology Centre. We're also undertaking further work now to develop that programme, with support and advice from people like behaviour specialists, to understand what will motivate people to not just be aware of, but then take action in the use and disposal of medicine, so we get that real public engagement.
You rightly highlight as well that water companies have got a role to play here as well, in improving treatment and reducing pollution, as well as the medical sector itself. So, those everyday medicines and skincare products, as you say, can pass through into waste water treatment, and we can have traces that remain then in wildlife and in our rivers. So, it isn't only a system challenge; it's a shared one. Whatever we individually flush, pour away, wash away, really matters, because even small amounts of those pharmaceuticals and chemicals can add up in the environment. Water companies definitely need to invest and modernise, but we also need the public's help. We need unused medicines to be returned to pharmacies, not washed away, and we should avoid putting unnecessary chemicals down the drain. For example, some common chemicals, like oxybenzone, wash off skin. They're sunscreen chemicals. They wash off skin, go down into the waterways, they're persistent and, even at very low levels, they can disrupt aquatic ecosystems, such as coral and freshwater life. So, we've all got a role to play, and there is much that we're doing with the health boards directly as well, as I mentioned. So, we need, again, a very joined-up approach to this: individual responsibility, water companies and health boards as well.
Thanks, Peter. I'm committed, as you know, to finding a sustainable solution to the Monmouthshire and Brecon canal’s water resource issues. I chaired a meeting with Dŵr Cymru, Natural Resources Wales, local authorities, the Canal and River Trust and the Wales Office on 17 November, where we discussed progress and options for short-term and longer term reform.
Thank you, Cabinet Secretary. We all know how important the Monmouthshire and Brecon canal is to Monmouthshire as well as to Torfaen, Powys and, indeed, the whole of Wales. It's a jewel in our crown, an economic and environmental asset that must be protected. Thank you for feeding back from the task and finish group. It would be nice to understand what positive messages may have come out from there. We all hope that there's going to be a sustainable solution, one that can be agreed soon, to provide certainty and assurances for businesses. Cabinet Secretary, I know that all would agree that a long-term solution will have to be found. It is in the interest of all to see this, recognising the importance of it. I wondered if a collaborative approach being considered. However, should a way forward not materialise in time, are you talking to the Cabinet Secretaries for finance and the economy to ensure that a plan B is in place for the short term or until the task and finish group arrive at a solution?
Thank you, Peter. Just to remind you, and all colleagues as well, this year we've stepped in, as the Welsh Government, with a short-term solution. It's an expensive short-term solution, but we've made available £5 million to upgrade the Manorafon pumping station works so that, through the summer, we've been able to maintain supply because of the risks to the canal. Now, that's not a cheap solution, but it's part of the solution that we've already signalled. What we have done is that we've brought together the right people—that collaborative approach you mentioned—both at official level and technical support as well to work up options as to what engineering or other solutions the canal may need to sustain, now and in the future, the water supply to the canal. The canal is unique; it's not like the Montgomeryshire canal or others. You'll note, by the way, that there were five or six canals in England during the course of the summer that actually had dried-out stretches. Now we managed, by hook or by crook, to actually avoid that situation along the length of the Mon and Brec this year.
What that collaborative approach is doing is bringing forward those solutions, and then we need to also apply the collaborative approach to how we approach, then, funding those solutions, because none of them will be cheap. I think that there's probably a role here for all of the partners involved. We certainly see a role for the Welsh Government and we've signalled that already. It's good that we've got the UK Government at the ministerially chaired round-table, but we also have CRT themselves, who recognise that they have a clear and compelling interest within this and a stake in finding these solutions. Dŵr Cymru are contributing to the engineering solutions and technical advice, alongside NRW. So, it's good to say that we're working hard on it. We have identified at this time—I can't give you the full details today—some options for the solutions, but we have to work together to refine those now, but also to work together in a collaborative way to say, 'Well, how do we jointly take these forward?' when they aren't going to be cheap, either in capital or ongoing revenue. But we are working on it, Peter.
We continue to make good progress on the establishment of the disused tips authority in time for 1 April 2027. The authority will employ up to 77 members of staff, be headquartered in Merthyr Tydfil and play a vital role in safeguarding communities and managing Wales's disused tip legacy.
I'm grateful to the Deputy First Minister for that answer, and the Deputy First Minister will be aware that we're coming up to the anniversary, of course, of storm Bert and the damage and destruction that we saw in Cwmtillery as a consequence of the tip that slid there. I'm grateful to the Deputy First Minister for visiting it at the time a year ago, and I'm aware that he's also visiting again on Friday to speak with residents who were affected by that.
But it's important to maintain the confidence of people that the Welsh Government takes their safety in their homes seriously and moves quickly to put in place all the actions required to keep them and their families safe. People will want to know that the Welsh Government has not only put the legislation on the statute book, but is ensuring that there's funding in place; that the UK Government is meeting its responsibilities in terms of funding as well; and that we're bringing together the experts and the specialists to make these tips safe and to put in place a warning system to ensure that people can go to bed at night and sleep in their beds knowing that they are safe.
Thanks, Alun. You're absolutely right, we need to make good on our commitment and we've provided funding now to local authorities, including in your own area. They put in an additional request immediately in the aftermath of the slip that we saw in Cwmtillery, and we were pleased, as you know—and thank you for your engagement on this as well—to announce that that additional round of funding was allocated to the authority for that particular tip. But it's part of a larger whole, I have to say, right across Wales.
So, in 2025-26 now, we're providing £34 million to 10 local authorities and to NRW to undertake works on 130 coal tips right across Wales. This includes things like minor maintenance to make sure the stability is there, through to major capital proposals, some of which go to just short of £6 million on an individual disused tip. And what I'm really pleased to say is that we have the added reassurance now that we have a UK Government that has also recognised its responsibility. We asked them to match our investment in coal tip safety, which over the last few years we've been doing on our own, and they provided an additional £118 million over three years, which is exactly what we asked for to do the works that we knew were coming within the pipeline. And we'll need to go back and then ask for more subsequently as well. So, this means that our total spending will be over £220 million in the current period.
But it's also to do with the expertise, setting up that authority, developing world-leading expertise, so that people genuinely can sleep safely in their beds at night, and know, by the way, that we will take the leadership. There are people in other countries now looking at us for what we're doing. We will take leadership in helping them to sleep safely in their beds.
I'd like to thank Alun Davies for actually asking this question. Deputy First Minister, many people living in Ynysddu are extremely concerned about the Ty Llwyd quarry amid contamination fears. It has been raised in the Chamber by myself and colleagues before. The site has been subject to the historic dumping of toxic waste, with leachate leaking out and polluting the area. Local councillors—they are independent—Jan Jones and Janine Reed have been instrumental in leading efforts to end this worrying situation. It's been a pleasure working with them on this important issue.
Caerphilly County Borough Council has so far refused to condemn the site that's contaminated, and it's been over a year since the local authority commissioned a report looking into the quarry as indeed being contaminated. It was originally expected to be published in October 2024, yet we haven't heard anything, and the local authority has refused councillors' requests to see a draft copy of the report. So, Deputy First Minister, will you please join me in urging Caerphilly council to release the report, and will you meet with Councillors Jones and Reed to discuss this concerning issue, going forward? Because as you said, everyone wants to sleep easily at night. Thank you very much.
Thank you, indeed. Ty Llwyd quarry came up in response to an earlier answer, and I don't want to repeat all of what I've said, but we already have a situation where NRW served the council with statutory notice stipulating some real short-term actions that are required to reduce the risk of pollution, especially during the wet weather, because that's when we are having the problem with the leachate.
The longer term proposals are being developed by the council to meet the requirements of the NRW permit as it's being developed. So, I join you, certainly, in saying to the local authority and NRW, we just need to have all due pace behind this now, so that we can reassure local residents, but the work is ongoing.
Thank you, Adam. I was disappointed with the recent assessment of Dŵr Cymru’s performance, but I welcome Dŵr Cymru’s commitment to improving environmental outcomes. Whilst challenges remain, I am encouraged by their investment plans and collaboration with regulators. Together, we can protect Wales's rivers and communities through transparency, accountability and a shared focus on long-term sustainability.
Thank you, Cabinet Secretary. NRW's most recent report shows Dŵr Cymru responsible for 155 pollution incidents in 2024, including six serious cases, the highest total in 10 years, and a 60 per cent rise in sewage incidents since 2021, leaving the company on a two-star 'requires improvement' rating for the third year running, and, of course, there have been multiple prosecutions, haven't there, by NRW. In that context and given we are now moving to an independently Welsh-led system of water regulation, will you commission an independent review of Dŵr Cymru's governance and leadership, because it's plain to see, isn't it, that a model that promised so much is now irretrievably broken?
I met, Adam, the new chair and the new chief executive only in the last couple of weeks, and expressed my clear disappointment, Welsh Government's disappointment, with the performance, and our expectation that on all indicators we want to see Dŵr Cymru excelling on behalf of the people here in Wales, including in its environmental performance as well. They need to deliver for customers and for the environment. I'm not sure that we need a wholesale review to know what is the problem, because the indicators are very clear on where the failures are. It should be that there is an opportunity here if we move forward with what has been opened up by the Independent Water Commission report, that we take that regulatory space into Wales for ourselves, because we can then fit it to our purpose, so it's not purely a 1970s-style economic regulator, but it's a regulator that is driven by ethics and an environmental ethos as well.
Now, that is a real opportunity, but right here, right now, we should be absolutely demanding of Dŵr Cymru that they improve the performance. They've failed to meet several key targets now for several consecutive years. We want to see that progress, particularly on the fact that they are now increasing the quantum of investment, and the bills have landed on people's doorsteps—yours, mine, all of our constituents'. We want to see that progress starting now, and from here till 2030 and the period ahead.
We do work closely, by the way, with the regulators to ensure that there's accountability and better outcomes as well. So, I do think we have an opportunity for a reset on the basis of the IWC report, but it'll take time to take that through. There will need to be legislation as well, but right here, right now, we should be demanding of Dŵr Cymru that they up their performance where they are failing.
Thank you, Adam, for raising this important issue. Cabinet Secretary, my constituents will not be surprised that Dŵr Cymru have once again been branded one of the worst water companies in the UK. NRW has once again awarded two stars to Dŵr Cymru, as Adam has pointed out. Sewage discharge into the Rivers Ogwr Fach and Ogmore continues unchecked, proving a threat to flora and fauna along their banks and on nearby beaches. Cabinet Secretary, what discussions have you had with NRW and Dŵr Cymru about the immediate actions they can take to prevent such discharge in future?
Thank you for that follow-up question. I can say again very clearly that I have regular meetings, both with the regulator and with Dŵr Cymru and our other company, Hafren Dyfrdwy, as well, and with NRW on this issue. In those meetings and in other correspondence, we make clear our expectation that this large water company in Wales, Dŵr Cymru, needs to up its performance. We also make clear, by the way, in all our discussions, that there shouldn't be, because it's often raised in this Chamber, performance pay being paid to the leadership of Dŵr Cymru, unless it ups its performance. They go hand in hand together. So, we will keep holding their feet to the fire. They've given the assurances that they also recognise that they have to up their performance, and as I say, the investment trajectory that they are on should mean that they should be able to improve their performance. And I think your constituents and mine would want to see it sooner rather than later.
Thanks, Mike. This year, we've committed over £77 million to strengthen flood resilience across Wales, including £6.9 million capital funding for schemes in the Swansea bay region. We estimate that this investment in 38 schemes across the four local authorities in the region will benefit 8,232 properties.
Thank you for that answer. We are suffering the effect of global warming and the changing weather, with long, dry periods followed by very heavy rain, leading to flooding, including in areas that have traditionally not flooded. Building higher and higher walls is not the answer. One success in Swansea has been the provision of an area in Ynysforgan, near where I live, which is allowed to flood and then when the river level reduces, the water returns to the river. Will the Welsh Government promote the planting of trees on high ground in the Swansea bay city region to reduce the rainwater entering the rivers, streams and brooks?
Mike, thank you for that question. It raises the important issue of getting upstream of these issues in terms of managing the water on the land, slowing down its progress down the valleys, and also restoring natural processes as well. So, we have made £2 million available to support further projects across Wales in 2025-26. We're very keen on these. The nature networks fund is now the key mechanism for restoring nature-based solutions, and we're also keen, as you know, on collaborative approaches in the uplands to tree planting the right tree in the right place, including alongside rivers, so helping with biodiversity as well as slowing down water flow into the rivers. So, we're making funding available for that through the sustainable farming scheme as well. And we really want to encourage farmers—and we know there's an appetite for this—to work together to make improvements on their land, put the right tree in the right place, and help those communities further downstream as well. So, I don’t want to micromanage any plans within the Swansea area, Mike, you'll understand, but we're absolutely putting the incentives in place for that to happen.
Thank you, Carolyn. The recent storms we've had have shown the importance of robust emergency response and resilience. So, in recognition of the threat from such storms, this year saw Welsh Government invest £77 million in flood resilience activities across Wales. It's a record allocation for a single year and it reflects our unyielding commitment to safeguarding the people of Wales.
Thank you for that answer, Cabinet Secretary. I know that the Welsh Government is doing good work to empower communities to protect themselves against flooding, including to check for issues early. However, some confusion still exists when it comes to responsibility for blocked ditches, culverts and drains on private land. A lot of homes are flooded from run-off from highways. Under riparian law, landowners are responsible for the management of these, including at the side of highways, so drainage and highway officers at councils have asked the Welsh Government to provide support to inform landowners that it's their responsibility, not just all the council's responsibility. This could be achieved through a dedicated website, informational leaflets distributed to landowners, and collaboration between councils, Natural Resources Wales, farming unions and other representative bodies. This is something I've raised a lot of times with you and would like to know if any progress has been made. I mentioned it recently to an NRW officer and she said, 'Well, we're responsible for rivers; local authorities are responsible for local drains and ditches.' So, I'm still not hearing positive responses.
There's real clarity on this, but it's helpful to state it here on the floor of the Senedd again, that individual landowners who have watercourses on their land have responsibility, and that includes keeping them clear, keeping those structures, such as culverts or trash screens and weirs and mill gates, clear of debris. They need to carry out their responsibilities and there is information out there for people on the NRW website. They have up-to-date guidance on their website; it's very understandable, very, very clear. They produced a guidance document previously to explain to riparian owners how ownership works and how it might affect them. The ultimate recourse, of course, is that there is legal action that can be taken if these are not maintained properly. But we don't want to get to that. What we want to do is to work with people, help inform and educate, but then they need to take on their responsibilities.
I think this is important. You regularly raise this, and it is a vital one, because otherwise, local authorities and others pick up the cost of this further down the line, or, indeed, home owners or businesses do when there is flooding that's caused by a lack of maintenance of somebody's assets on their land. So, it's an important thing to raise. We will keep on looking at what more we can do. We've certainly engaged with local authorities directly as a result of you raising this as well, and we'll continue to do it, and then we need to keep on banging the drum with individual landowners that they have a responsibility. It's not just a watercourse or a stream running through their land, it carries responsibilities.
Thank you, Darren. This year, we've made £7.9 million of capital funding available to the risk management authorities operating in north Wales. The funding will be used in the development and construction of 70 different schemes across the region. Once completed, we estimate that these works will benefit 4,622 properties.
I'm very grateful for that answer, Deputy First Minister, and I'm also grateful for the investment that I've seen in my own constituency to try to alleviate and reduce the risk of flooding to properties, including homes and businesses in places like Kinmel Bay and the Bay of Colwyn. Just over the weekend, we, obviously, saw the devastating impact of the heavy rainfall from storm Claudia. A lot of the impact was, obviously, felt in places like Monmouthshire, but there were other parts of Wales that were affected, albeit in a lesser way and to a smaller extent, with localised flooding in places like Rhyl, Prestatyn and other parts of north Wales, in areas close to my heart. Can you tell us what resources you're making available to those people, those homes and those business owners that have been impacted by flooding in those areas too? Because they need as much support, and it has been just as devastating for them as it has been for the more widespread flooding in other parts of Wales.
Thanks, Darren. You know that we're literally, as we speak, and since the statement I made yesterday, working through the details of the support that we can make available. Some of this is tied up with the emergency financial assistance scheme funding, which kicks in at a certain threshold. So, hopefully, imminently, we'll—. We're in direct discussions, by the way, with all of the local authorities, live, both myself and the Cabinet Secretary for Housing and Local Government, and, also, working with the Cabinet Secretary for Finance and Welsh Language. We're speaking to all of the local authorities where there's been an effect, not just those in Monmouth and Carmarthenshire, but throughout Wales. Some of the impacts are lesser in some areas than others, but they're no less devastating for an individual business or household.
When we've done that assessment, then we can—. I've said that we will make sure that we don't only let the local authority leaders know and so on, but we will let individual Members of the Senedd know as well what we're bringing forward. Previously, we've tried to exhaust every opportunity, frankly, in what we can do with the EFAS funding, but also whether there are other ways in which we can assist. So, if you can bear with us just for a tiny while, we should be able to bring forward what we're doing in support, not just in Monmouthshire and Carmarthenshire, but also throughout the whole of Wales as well, recognising that there have been differential impacts.
1. Will the Cabinet Secretary make a statement on the implications for policing in Wales of the UK Government's decision to scrap Police and Crime Commissioners? TQ1403
Cabinet Secretary for Social Justice, Trefnydd and Chief Whip
Thank you very much, Mick Antoniw. I would like to thank, first of all, the PCCs in Wales for the key role that they play. This announcement provides the opportunity to consider the best arrangements for Wales, including the opportunity to progress the devolution of policing to Wales.
Thank you for that answer. I also want to thank the elected police and crime commissioners in Wales, and all their staff, for the commitment and work they've undertaken to support the police and our communities. They've worked hard and will undoubtedly continue to do so until 2028. I believe that the creation of police and crime commissioners was always doomed to eventual failure. It was an ill-thought-out concept done on the back of a fag packet to distract from the introduction of massive policing cuts, which led to the last Government cutting some 20,000 officers from forces across the United Kingdom.
The elected police and crime commissioners in Wales, such as Alun Michael, Jeff Cuthbert, Andy Dunbobbin and many others were not responsible for the design of the scheme, but they did do all they could to make it work, and, in some areas, had exemplary successes. However, I agree with you: we now have the opportunity for the reform and the devolution of policing, which has broad support and which we've been calling for for many years. Often, our communities are amazed when we attend packed meetings and inform them that policing is not devolved, despite its fundamental integration with so many other devolved functions: mental health, community safety, combating anti-social behaviour, domestic abuse and so on.
Cabinet Secretary, the Home Office Secretary said that the reforms will make policing accountable to local mayors and councils. The only way this can work effectively in Wales is by the devolution of policing. I read the statement from the Association of Police and Crime Commissioners, which says:
'They will be responsible for holding the police to account, setting police and crime plans and budgets and become the elected voice of the public in policing.'
The failure to devolve policing previously was an act of political intransigence by the UK Government, rather than practical policy, but we now have the opportunity to rectify that anomaly. So, will the Cabinet Secretary engage in urgent discussions with the Home Secretary to ensure that, at long last, policing is urgently devolved to Wales, as is intended for England and is already the case in parts of England?
Thank you very much, Mick Antoniw. First of all, can I, as I said in my opening response, again thank our police and crime commissioners, who've played a key role in holding our police forces to account, as well as shaping local priorities and representing the voices of our communities? You've mentioned police and crime commissioners Alun Michael, Jeff Cuthbert and Andy Dunbobbin. Can I also acknowledge the work of the current police and crime commissioners, Dafydd Llywelyn, Emma Wools and Jane Mudd, as well as Andy Dunbobbin?
I've already spoken and written to the policing Minister. It's welcome that the Home Office have recognised the different governance arrangements between England and Wales and have committed to work with the Welsh Government and the Welsh PCCs. Our view is that we can build on established, well-regarded structures for partnership working, such as the existing policing partnership board for Wales. Also, as we work through the way forward, it is working in partnership with, principally, our PCCs, our partnership board, local government, other key stakeholders, to develop that most appropriate form of local policing governance and scrutiny in Wales.
As I've mentioned, the policing partnership board already provides a degree of accountability to the Senedd, so it's something we could build on in a future Senedd, rather than building wholly new structures. The main issue is that key functions currently exercised by police and crime commissioners in Wales must continue to be exercised in Wales. The conversation we've opened with the UK Government is about how that happens, not whether it happens.
Cabinet Secretary, as you are well aware, the abolition of police and crime commissioners means their powers will now be transferred to local councils, who will have to create new policing and crime boards, led by either the council leader or, where possible, mayors. Given that there are 22 county councils and four police authorities in Wales, it will mean that each police authority will have oversight from several councils, who are likely to be competing against one another for policing priorities in their area.
Given the range of important issues that council leaders need to concentrate on, I'm unsure how they will be able to find the sufficient time to properly scrutinise policing in its present form, and so I can clearly see a scenario where they'll have to employ virtually the same team as the PCC already does. With this in mind, what discussions have you had with the Home Office on how these policing and crime boards will work, and how will the Welsh Government ensure that their work will be accessible and visible to the Welsh public? Thank you.
Thank you for that question. As I said, we welcome the fact that the Home Office has recognised the different governance arrangements between England and Wales and is committed to work with us. The announcement was only made last week, and of course that commitment to work with the Welsh Government is how we are responding. I'm very thankful for the question today from Mick Antoniw.
I think it is important that we look at—. As you said, in many areas of England, police and crime commissioner functions will pass to mayors. Well, there is no equivalent to mayors within the democratic structures of Wales, so we need a different approach to police accountability. Of course, that's why, as I've said in my response, this does provide us the opportunity to progress the devolution of policing to Wales, and it is now we start on those discussions.
We are proud of the partnerships we have built with police and other criminal justice stakeholders in Wales, and we work collaboratively. The key purpose, of course, of all of this, the united purpose, is keeping Wales safe and serving our communities. Our relationship with partners in local government and policing in Wales is strong, and of course, as we move forward, we will work closely with them in terms of finding a way forward and engaging with the Home Office with that purpose.
Why is it, with the abolition of the PCCs, that the UK Government has already set out that it is going to transfer that responsibility to directly elected mayors where they exist in England, whereas when it comes to transferring the responsibility to the directly elected Parliament in Wales, you can hear the grinding sound of the foot dragging in Westminster even here? What is it about Welsh democracy that the UK Labour Government so distrusts?
Can I ask the Cabinet Secretary to be clear about this? Because there are two models being proposed in England, one where there are mayors, where there is responsibility given to the mayor, and then where there aren’t mayors, there are police and crime boards with local authorities and a paid policing lead, probably a deputy leader on the council et cetera. Is that the model that she is proposing for Wales, or is it actually responsibility given to the national policing board for Wales, which already exists, and a policing and justice Minister for Wales?
Given that the PCCs, for example, have a key role in crime prevention, does she see an opportunity for Wales, given the work that has been done in this area on the Cardiff violence reduction model by South Wales Police and the police and crime commissioner? Is there an opportunity there for the Welsh Government to create a national crime prevention agency, so we can actually start to deliver, in our way here, better outcomes for our communities?
Thank you very much. Diolch yn fawr, Adam Price. The arrangements for England are the arrangements that, of course, are being taken forward by the UK Government, and they are based on existing strategies. As I said, we do not have any equivalent to the mayors within our democratic structures in Wales, so we need—and I’ve said, and I’ve made it very clear—a different approach to police accountability in Wales. That is why, as you say, there is a real opportunity here. That is why I am saying we grasp that opportunity. That opportunity, of course, will include the opportunity to progress the devolution of policing in Wales. I’m glad that you’ve recognised, as I have said already, that there are opportunities.
We do have an existing policing partnership board for Wales. It is interesting—I chair that partnership board. The PCCs sit on it, alongside the chief constables, alongside representation from local government as well, so we have key partners. Indeed, also the Home Office does attend the partnership board, as indeed does the Wales Office. It already is a very strong functioning structure, which we can build on. I just wanted to say also that I met with our PCCs following the announcement last week. I do want to again put on record that I’m truly appreciative of their hard work and what they deliver for Wales.
But to your point about their role in terms of community safety and prevention, we have a violence prevention unit. We are leading the way in many respects anyway, because of the collaborative work we do. Our PCCs play a key role in holding our police forces to account. But they help shape local priorities and represent the voices of our communities. Recently, for example, I attended a very inspiring event led by PCC Emma Wools, which was a plan for children and young people in the South Wales Police area. Of course, it was also attended by children and young people, because she'd engaged with them. She also co-chairs with me the violence against women and domestic abuse strategic partnership board, and is also very involved in the criminal justice anti-racism strategy, which has been developed in Wales. So, I think we have real opportunity. We can show the progress, we can show the responsibilities that we've taken. What is crucial is that we do ensure that those responsibilities, that accountability, transparency and public services remain at the heart of our new model.
I think it's very clear that the Home Office had given absolutely no consideration to the situation of Wales when this decision was made and announced, and they seem somewhat surprised that we have our own arrangements and democracy here. It's important, therefore, that that democracy is completed with the devolution of policing, so that, along with local government, we can provide direct accountability for the actions of police forces across Wales. It is important that local government is engaged, and becomes more engaged, with accountability for local policing, which then has to work within the context of the delivery of all public services in Wales. I hope that the Cabinet Secretary will convene a group of people now to take forward the devolution of policing, so that this can happen as early as possible.
Thank you very much, Alun Davies. I don't want to repeat myself again, but it is important to also recognise and for you to be assured that I've reiterated to UK Government Ministers that we are taking steps in Wales to ensure that arrangements for the future—as we don't have the mayoralties in Wales; that's not achievable in Wales—don't unfairly impact on our policing landscaping, including, which hasn't been mentioned, funding allocation and public service delivery. Just to say that, in my letter to the policing Minister, I say, and I'll repeat it to you: 'As you are aware, the Welsh Government and the Senedd have a long-standing commitment to the devolution of policing in Wales. We're happy to share our thinking with you on steps that could be taken to devolve further powers and responsibilities to Wales.' Of course, that will include engagement with local government, police and crime commissioners and other stakeholders.
Good afternoon, Cabinet Secretary. Like many others, I'm pleased at this decision, but I do want to place on record how pleased I have been to work with the Police and Crime Commissioner for Dyfed-Powys, Dafydd Llywelyn, who, on many occasions, has worked with me in community engagement. We want to see any savings directly invested into front-line policing, especially in community and our rural crime teams. But the salient point I wanted to raise today, which you've heard time and time again, is that it feels a little bit lost, the timetable and the target for us to get policing and criminal justice devolved here to Wales. We know that there have been numerous discussions and meetings, but I wonder if I could ask you—could we have a statement here to the Senedd on the timetable and the deadline for the devolution of policing and criminal justice? Could we have that really set out to us very clearly? Because it feels like we're losing the impetus here, and we know how long these things can take. Diolch yn fawr iawn.
Diolch yn fawr, Jane Dodds. I have acknowledged all the police and crime commissioners, the current ones and the most recent ones, for the work they're doing. Of course, as I said earlier on, they've been involved in shaping local priorities, representing the voices of our communities and, indeed, engaging with us as elected representatives. I also wish to assure you, as I met them last week when this announcement was made, that they remain committed to continuing that important work throughout this transition period.
Obviously, this announcement, although it can raise concerns, also provides opportunities, doesn't it? That's why I'm pleased to say that it does provide us an opportunity to work forward and again make the case, which we've called for and which we committed to, to progress the devolution of policing in Wales. I think we can offer you updates on progress and would be certainly happy to do that, and, of course, alongside the Deputy First Minister, who is also responsible for constitutional affairs. I know he will be wanting to update further on devolution of youth justice and probation as part of the whole commitment that we have as a Welsh Government to the devolution of criminal justice to Wales.
I also welcome this announcement. I didn't vote for the PCCs in the first election, because I was worried that, with a small turnout, a populist with a catchy slogan could have a very influential role indeed, and we did see PCCs overstepping their influential role. When you consider the incredibly low turnout of less than 20 per cent, it's fair to say that the public haven't embraced this expensive political experiment. Saying that, of course, as you've already said, Trefnydd, we've got to acknowledge the community engagement the PCCs have made and the work they do with vulnerable people. That gap will need to be filled.
Of course, as you've already mentioned, with the precept and with Welsh Government's contribution, nearly 73 per cent of police funding actually comes from Wales already. I'd be interested to know, Trefnydd—a 'yes' or 'no' answer would be fine for this—were you consulted? Due to your very influential role, were you consulted before this announcement? Because it doesn't seem that Wales's unique position was taken into account at all. This is a perfect opportunity to look at policing as a whole in Wales: perhaps one police force accountable to a justice Minister here in the Senedd. Diolch yn fawr.
Of course, I've just commented on our ambition for the devolution of justice in its full sense to Wales. The Thomas commission laid it out for us, didn't it, so clearly? But also it's interesting, in terms of devolution of policing, that that was supported by the cross-party Silk commission, which actually included representatives from parties across this Senedd. And indeed, this is something that our Welsh Labour Government has had as a manifesto commitment.
So, no, I wasn't consulted about this decision; I was told about the decision. But I have to say, again, that it's for the UK Government, in terms of the democratic structures and policing accountability arrangements that they may wish to progress in England. But for us in Wales now, my immediate response was to meet with our police and crime commissioners to reassure them, because we need to look to their role, but also the role of their teams—they have a budget they've been funding and they play a key role in terms of roles and responsibilities, including police and crime plans for the financial year, as well as those priorities. So, I am working with them to ensure that we can move forward in partnership and also engage constructively with the UK Government to very clearly demonstrate the case for the devolution of policing to Wales.
I am totally against the devolution of policing here to the Senedd, but, Cabinet Secretary, I am interested in how much this would cost the Welsh Government, if we were to devolve policing here to Wales. How much would it cost the Welsh taxpayer, and in terms of central services costs for the Welsh Government? Do you think Barnett consequentials, because that is how it would probably be funded, would cover the full cost of policing here across Wales? Because I don't think it would, and I think we would end up with a lesser service than what we have now.
I recall having a very good debate here in the Senedd about the devolution of policing, which was passed by this Senedd. I think the progressive majority of this Senedd did pass for the devolution of policing. And, of course, Rhys ap Owen has made the point about the funding. I am very proud of the fact that this Government has funded, in addition to the Home Office funding, our police, crime and support officers. Over the years, there have been hundreds of police, crime and support officers in our streets, in our communities, who are the face of policing and are so important to us. And we actually protected and provided that preventative support in the communities during that time when, as Mick Antoniw said, your Government slashed 20,000 officers from forces across the UK.
Cabinet Secretary for Economy, Energy and Planning
We've been tirelessly advocating for next generation nuclear investment at Wylfa. This announcement should give real confidence to young people, the future workforce, the people of Ynys Môn and our supply chain companies.
Thank you for that response. The news of new investment at the Wylfa site is of course very significant for the people of Anglesey, but also across Wales. This is not a decision that has been made overnight. The announcement reflects years of hard work, and I include the Welsh Government in that, but locally as well businesses and communities on Anglesey, elected representatives of every stripe across the years and the key role of the Isle of Anglesey County Council.
Of course, there will be some who will remind us that we've been here before. So, I don't need to say that people are asking for assurance now that these plans will be realised. So, first of all, could I ask the Cabinet Secretary about the level of assurance that has been provided, to avoid the kind of one step forward, one step back that we have faced in the past?
In more than 10 years of representing Ynys Môn, I have been part of some very thorough work in the past to try and ensure that the previous plan was one that would work for us as an island. So, we have experience, of course, of developing plans like this, and building on that is what's important now in the context of the new plan.
To summarise, (1) we need to make the most of the opportunities—local jobs, investment in the supply chains, strengthening infrastructure, including the Menai bridge. And (2), we need to provide support where there are challenges—pressure on the local housing market, pressure on public services, pressure on emergency services, pressure on infrastructure.
I would make the point, in that context, that we need to take the pressure off the energy distribution network locally by not allowing major solar plans and move to small community projects. But with all of these issues, I want to make the point that I believe that the Welsh Government has a key role to play, alongside other partners.
It's really important that, from day one, the local community feels that this is something that they are genuine partners in, that it's not something that is happening to them. So, in inviting the Cabinet Secretary to reference a number of issues—maximising local jobs, upskilling supply chain development and then ensuring mitigation and support on housing, public services and pressures of that sort—can I ask for assurances that Welsh Government will be playing its role in full, in partnership with both UK Government, of course, and local partners, to ensure that this project is one that genuinely works in the interests of the community that is set to host it?
Thank you very much. I'm really grateful for the question this afternoon. I would also recognise that this is the result of years and years of hard work of Welsh Government, of course, but of local representatives, and I know of the local council as well. So, I do want to recognise that. I remember, in a very long ago previous role, when I was the Minister for Housing and Regeneration, we were actually spending some time then grappling with what the housing challenges might look like. Actually, the fact that we've been up this hill before is helpful, in a way, in the sense that we've done a lot of the work, a lot of the thinking, about what it would take to make a project like this real. We do have a lot that we can already look to in terms of work that has gone on in the past. I think all of that is really positive.
In terms of levels of assurance, I think that the Prime Minister, in making the announcement, was really keen to provide that level of assurance. He talked about the project timing with Rolls-Royce continuing now with the regulatory approvals. The UK Government has indicated that site works will begin in 2026, likely starting with further site investigations. The date for the site clearance work is yet to be determined, but the ambition is for Wylfa to be supplying power to the grid by the mid-2030s.
Final contract negotiations are still under way. They're expected to conclude before the end of this year, when we will know the details of the agreements between Great British Energy Nuclear and Rolls-Royce SMR. Detailed preparations can then begin with all stakeholders.
But I absolutely agree, and I think I set out in response to the topical question last week, that partnership working is really critical in this space, and that does, of course, include partnership with the local community.
New nuclear is the most reliable clean low-carbon generating technology currently available, and we welcome the historic day of the Rolls-Royce SMR and the announcement by the UK Conservative Government—your Government, I should say—that this is very much a legacy commitment by the previous UK Conservative Government. I find it a little bit rich at the moment that other parties are claiming credit, when we have to thank the previous UK Conservative Government.
With the Federation of Small Businesses stating it will bring a once-in-a-generation boost for jobs, supply chains and regional infrastructure, I'm glad that the UK Government have had the sense to give this the go-ahead. The free port in Ynys Môn is another fantastic testament to the UK Conservative Government and its commitment to economic wealth coming to Ynys Môn. Last week, I did highlight the need for close co-operation between Coleg Menai, Coleg Llandrillo, your Government and Bangor University to ensure we have the skills needed for the as many as up to 3,000 jobs that will be created.
So, Cabinet Secretary, I'm looking for an update, really, on what strategies have you got in place to develop these much-needed jobs, how many incentives for green skills development are in place and how many actual jobs? It might be hard for you to pick a figure out, but maybe you could inform us in a statement at some time how you're going to take forward the work to ensure we have those green skilled jobs.
Now, one thing that does concern me, and it's been raised with me, is about how skilled jobs will be created between now and the project start, and also about how workers—. As Rhun has quite rightly pointed out, this has to benefit the people of Ynys Môn and north Wales per se. Now, the nearest station to Wylfa is 11 miles away, in Valley. Staff need to be able to easily commute on public transport, and that's problematic at the moment. We need to see train and bus services aligned. We need to make sure that workers in Ynys Môn, Anglesey, can actually get to work. We need to consider those who will have to be driving from the mainland. So, Cabinet Secretary, bearing in mind the significant increase there will be in road use on the island, to and from, will you now take urgent steps? Will you make a statement on the third Menai crossing, and work with Cyngor Ynys Môn and Transport for Wales to ensure that detailed public transport is in place with access to Wylfa at its heart, and one that really provides for those people living in those villages on Ynys Môn? Diolch.
I'm really grateful for those points, and particularly the concern that local people must benefit from the jobs that will become available. The UK Government has been clear that this project is a really key part of its industrial strategy, and it is the first of its kind in the country. In the construction phase, it's expected to create up to—over, excuse me—3,000 construction jobs in the community. But, once operational, each reactor—and the intention is in the first instance that there will be three, but that number could go up to eight in future—each reactor would require around 300 highly qualified staff to operate for the following 60 years. So, that is a significant number of jobs that will be created locally, and it will be the result of some really significant investment.
The initial investment is £2.5 billion for north-west Wales, with a further investment to follow as the negotiations progress between Great British Energy—Nuclear and Rolls-Royce SMR. I think all of that is incredibly positive. The on-site assembly of modules is expected to take three to four years in construction time, and that compares to 10 years for the large-scale stations. So, again, I think that this shows that the benefits can be felt really quickly with, as I said in response to the first question, site works beginning in the next year. So, I think we will see movement happening pretty quickly on all of this, which is great.
The First Minister has been really keen that we are in a position, again, to make sure that Welsh Government is working in a co-ordinated way to reap the benefits. She's put in place a project board within Welsh Government, and that will bring together all of the necessary teams who are going to be needed to work together to make the best success. So, that works across skills, housing, infrastructure and so on. The Cabinet Secretary for Transport and North Wales has previously said in relation to a third Menai crossing that, should developments happen on Wylfa, then it does make the case for that more compelling. So, there will be an awful lot for us now to consider in terms of how we go about making the best of this huge opportunity for Wales, and lots of considerations across different departments. But I'm really pleased that the First Minister has already, almost on the same day, put together that team to make sure that we have that co-ordinated approach, which leaves no stone unturned to make sure we have all the benefits.
Diolch, Deputy Llywydd. I very much welcome the announcement regarding Wylfa, and I'd like to credit the previous Member of Parliament for Ynys Môn, Virginia Crosbie, who really undertook the groundwork on this, ensuring the purchase of the site, and made this project possible today. And I'm pleased to see the Labour UK Government build upon her work and show that they are serious about investing in nuclear, unlike Plaid Cymru, whose position on nuclear energy seems to change from week to week.
The benefits of this project are manifold. However, I am concerned that the announcement is significantly scaled back—it's a significantly scaled-back project from what the UK Conservative Government planned. We had planned for a gigawatt-scale plant, which has now been scrapped in favour of three small modular reactors, which, whilst I welcome the introduction of SMRs, three SMRs alone don't come close to the energy production capacity of a full-scale gigawatt plant. Despite assurances that more SMRs could be fitted in the future, it would take over a decade before they are up and running. With the announcement of a north Wales AI growth zone—with scant detail, I may add—this would add substantial strain to the energy grid, and many, including the United States ambassador, have been critical of the plans, arguing that SMRs alone are insufficient. So, can the Cabinet Secretary outline why the project has been scaled back to an SMR-only nuclear plant, and what assurances can be given that they will provide enough energy to the grid, particularly to support the proposed north Wales AI growth zone? Thank you.
So, considering the question specifically around why the decision was taken in relation to the small modular reactors, well, of course, that was the choice of the UK Government. But I think that the important point to recognise here is that these can be delivered much more quickly than those larger gigawatt-scale infrastructure developments. So, I think that, actually, the benefits will be felt really, really quickly in relation to this particular scheme, which I think is something that we should all be welcoming and all be very excited about.
Of course, this is just one part of our approach to clean energy for the future. You'll be as excited as I am, I'm sure, about the announcement today in relation to the third opportunity within the Celtic sea being announced by the Crown Estate. It has announced now the developer it will be working with to deliver that particular project—again, major investment and major potential benefits for Wales in terms of jobs. So, I think that there's an awful lot happening in this space, and the investment of £2.5 billion for north Wales is really, really exciting. We do have quite a complex picture now in terms of the future of energy in Wales, but I think that it does speak to the importance that we put on energy resilience, and the focus that the First Minister has put on it, working in collaboration with the UK Government and other partners, to bring forward as many major projects as possible, whilst also remembering the importance of our community energy work, which we're still very passionate about and committed to. I've made some recent announcements around Ynni Cymru, for example. So, we do really, really have a really wide range now of sources of energy and lots to be excited about.
But the big challenge for us, I think, as Government, is going to be making sure that we have the supply chain ready to deliver—we're already doing work in that space—and making sure that we have young people ready and trained up to take advantage of what are going to be incredible jobs. It was such a pleasure to see this announcement made by the First Minister and Prime Minister, surrounded by young people who, in a moment, in one announcement, had a whole world of opportunities opened up to them. It was tremendously exciting.
Thank you, Dirprwy Lywydd. Ynys Môn and the Welsh footballing community will fondly remember Trefor Lloyd Hughes this week, who recently passed away aged 77. It was an honour to be at Cardiff City Stadium last night to take part in a minute's applause to show appreciation for the life and contribution of Trefor, as well as the former Welsh international Rod Thomas.
Trefor was president of the Football Association of Wales between 2012 and 2019, a period, of course, that included the unforgettable Euros campaign, and, yes, he made a key contribution to bringing the good times back to Welsh football. And whilst Trefor reached the high points of the administration of the professional game in Wales and beyond, he never forgot his roots. Although his playing career ended far too early due to injury at 25, he left a significant mark on his home patch, not only as the 15-year-old boy who would sell tickets door to door to raise funds for his local club in Bodedern, but as the secretary of the Anglesey Football League and the North Wales Coast Football Association, ensuring that local clubs had the resources and expertise to expand their horizons.
Off the football pitch, he was a mechanic and then an officer with the ambulance service, and he was a loyal Plaid Cymru councillor too and he was so proud to serve his town of Holyhead for so long.
There was nobody quite like Trefor. We will miss his mischief, his support, advice and his entertaining company. And, yes, Trefor more than anyone would have enjoyed that 7-1 scoreline yesterday evening. That was for you, Trefor. Rest in peace.
Monday of this week was World Prematurity Day, a global celebration to raise awareness about premature birth and the impact on those children and their families. My brother and I were born seven weeks prematurely, spending weeks in a 'bubble cradle', as my grandmother described the incubator.
And in the same premature unit in the Heath, 37 years later, my brave little nephew Emrys also received the most special care. Emrys died at the age of eight days. Despite his short life, it was a life full of love and care and he continues to inspire us. To give thanks for Emrys's life and for the support received, his parents, Gwenno and Luke, are walking the distance from Criccieth to Tŷ Hafan to raise money for that hospital. Everyone is able to contribute in the usual way, of course.
Premature babies like Emrys are small in size, but are giants in terms of their courage and determination. Emrys and others remind us that true strength is measured not in weight, but in spirit and in love. Thank you.
Item 5 is the motion to approve the Senedd Commission's budget for 2026-27. And I call on a member of the Senedd Commission to move the motion—the Llywydd.
To propose that the Senedd in accordance with Standing Order 20.16:
Agrees the budget of the Senedd Commission for 2026-27, as specified in Table 1 of the Senedd Commission Budget 2026-27, laid before the Senedd on 12 November 2025 and that it be incorporated in the Annual Budget Motion under Standing Order 20.26 (ii).
Thank you, Dirprwy Lywydd. I move the motion on the Senedd budget today, although, of course, our dear friend Hefin David started the budget process in his role as Commissioner with responsibility for the Senedd budget. Hefin would be the first to emphasise the challenges associated with submitting a higher budget request during such a difficult economic climate, while also emphasising the importance of asking for the resources needed by the Senedd to continue to hold the Government to account and provide the representation that the people of Wales deserve.
In that spirit, I move the motion on the Senedd budget for 2026-27 and ask that it be incorporated into the annual budget motion. Members will have seen the details outlined in the budget document. The Commission is requesting a total allocation of £102 million, with £672 million—. I need to say that again: £102.672 million for 2026-2027. The core budget requirement is £98 million, with an additional one-off request of £4.5 million—an element that only appears every election year. Financing the costs that arise specifically as a result of the election is the purpose of this £4.5 million—primarily, these are the payments that will be due to Members who are not re-elected and their staff. We have presented a budget that is tight, and we have limited the growth in our 'business as usual' budget to 3.07 per cent, which is much lower than the GDP deflator, which currently stands at 4.07 per cent.
Today's motion is for an overall increase of 21.34 per cent, or £18 million, compared to the 2025-26 budget. Although this is a significant increase, it is a direct and expected outcome of the Senedd's decision to expand its number of Members by an additional 36.
The Commission has been very aware of the wider public sector context throughout the preparation of this budget. We have been determined to ensure transparency in all of our assumptions and to provide clarity on the underlying rationale. We remain committed to providing budgets that are sound and transparent, and that enable Members to fulfil their responsibilities.
Last year, the Finance Committee recommended that we formalise the way in which Members participate in the budget process for 2026-27, ensuring that there is enough time for the results to influence budget decisions. So, the party groups were invited to briefing sessions on the budget before the summer. Two groups accepted the invitation, and as a result of those discussions, elements of the draft budget were adjusted over the summer, downwards, so the contributions of the groups and the Commissioners have informed the final submission before you today.
One of the main challenges in setting this budget was to ensure that we did not limit excessively the new Commission and Senedd after May with our current assumptions, recognising that it is only after the election that their priorities and intentions will become clear. For this reason, we have created a ring-fenced budget, based on the regulatory impact assessment, with an element of flexibility. This method allows, for example, changes to the business timetable if the new Senedd wants to make them. The assumptions, for example, include one additional Plenary meeting and three additional committees. Any money that is not spent on this business will be returned to the Wales consolidated fund as appropriate, through next year's supplementary budget process.
Regarding the £18.1 million uplift this year, therefore, the main driver by some distance is the £13 million to cover the costs of new Members and their support staff. There is a further £3.5 million to meet the obligations of the determination of the independent remuneration board regarding Members who are not re-elected and support staff who have lost their jobs. The 'business as usual' element rises by £1.4 million, with £1.2 million of this being allocated to the increase in staff pay, reflecting a tapered pay award for staff, with the larger increases targeted at the lower pay scales.
We continue to set aside funds for budgets where there is some uncertainty or where the funding is for a specific purpose. We will need an additional £547,000 for the Ways of Working budget, which is now focused solely on the Bay 32 project. This will enable us to reach the point where we can exchange contracts for accommodation beyond 2032, when the current lease on Tŷ Hywel expires.
The Commission works closely with the Finance Committee to continue providing it with information on project expenditure during the year. The total project fund for 2026-27 is £2 million, which is £500,000 less than it was in 2025-26.
I would like to thank the Finance Committee for its thorough scrutiny and its ongoing commitment to fairness and transparency. The committee made 12 recommendations, and we have accepted all of them and have addressed them in our formal response. We are especially grateful for the first recommendation providing majority support for this budget, and I fully understand the difference of political opinion regarding the principle of Senedd expansion that has led to this situation of majority support, rather than unanimous support.
In conclusion, we are, as always, open to suggestions on how we can further improve our budgeting processes and provide even more value for the Welsh public purse. New Commissioners and a new Llywydd will lead the next budget process. For now, I am proud to present the final budget for fiscal year 2026-27, a year that will see our Senedd re-energised and placed on a strong footing for the rest of the twenty-first century, while keeping a watching brief on providing the best value for money to the people of Wales. Thank you.
Diolch, Dirprwy Lywydd. I would like to begin today by recognising the significant contribution of Hefin David in the preparation of this budget. His leadership as Commissioner was instrumental in developing these proposals, and the Finance Committee wishes to place on record our appreciation of his work.
I also thank the Llywydd and her officials for attending the committee on 1 October, and the Commission for responding to our report ahead of this debate. Whilst the majority of the committee recommend that the Senedd supports this overall request, there are a number of areas where greater clarity is required.
The 21 per cent increase in the Commission's budget for next year is largely driven by the decision taken by the Senedd to expand the number of Members. Overall, we were pleased with the budget's presentation. We welcome the Commission's approach in separating costs within the budget and ring-fenced funding for Senedd reform, with unused funds returning to the Welsh consolidated fund. We also note adherence to our statement of principles as well as an effort to manage expenditure, which helped identify and mitigate cost pressures. This has resulted in the operational budget increase being limited to 3 per cent, which we believe demonstrates financial restraint.
Despite these efforts, we sought more detail on the Commission's new efficiency planning process, and are pleased it is committed to managing emerging cost pressures within the existing funding envelope. We also welcome improved early engagement with the political groups in preparing the draft budget, which follows a recommendation we made last year.
Given the increases required to cover the cost of an expanded Senedd, the committee is concerned about the impact on the Commission should an annual budget motion not be agreed, as only a proportion of the current year's budget would be available in that scenario. As a result, we have recommended that the Commission puts in place plans to ensure organisational resilience in such circumstances, and it is encouraging to hear that work has already started.
Turning now to specific issues in our report, the draft budget allows flexibility for the new Senedd to organise its business, but we recognise that priorities after next year's election may well differ, which could result in unanticipated costs, and possibly savings. To ensure transparency and a greater understanding of the resource implications of decisions relating to supporting parliamentary business, we have called on the Commission to engage with the Business Committee to estimate costs before such decisions are taken. We are pleased the Commission will make this explicit in response to our views, particularly where the demand on resources may exceed the allocation set out in this budget.
First of all, can I just thank every single member of staff that works for our Commission? And I have to say, it took me to become a Commissioner for the Welsh Conservatives to realise just exactly how it doesn't matter what we do—when we're here, when we're in our constituency offices, when we're on committees—there's always a member of our staff that is behind, making sure that everything works for us to do our jobs.
Now, I would also like to endorse the comments that have been made about our late colleague Hefin David. Hefin was a Commissioner, and he served this Commission with distinction and pride, and he was really good on finance, I have to say. As well as Peredur Owen Griffiths and the rest of the Finance Committee, I thank you for the immense scrutiny, and thanks, Mike, for presenting that here today.
It will come as no surprise, I'm sure, to fellow Commissioners, or indeed our Members, that neither I nor the Welsh Conservative group can support this today. In our role as Commissioners, we have a distinct duty to ensure that the budget and approach deliver increased efficiency and effectiveness, reduced risk, and the Commission's sustainability strategic objectives. You must know, all Members here, that we don't agree with and we fully opposed the addition of 36 Members, and also a new, costly voting difference. An allocation of £102 million for 2026-27 compared to £84 million in the supplementary budget for 2025-26, obviously some of that is due to Senedd expansion. Senedd reform is predicted to cost an additional £4.3 million over two financial years for the Electoral Commission, and I've raised already some concerns about their budget and how it affects us as a Commission. All of you should take note that Senedd expansion is costing even more than we first anticipated, and it does make me question again whether the Welsh Government and the co-operation partners in Plaid Cymru correctly costed this major constitutional change before and when pushing it through this Parliament.
Other points that do cause me concern include the basic salary for Members increasing by 5 per cent to £80,000 in 2026-27. With the additional Members coming to the Senedd with the expansion, this is going to be an enormous cost to our Welsh taxpayers, and those I've spoken to would rather see this money going into our failing health service and social care. And of course, there will be additional costs posed by the increase in staff for the newly elected additional Members.
Bay 32 had an increase of £696,000, giving it a ring-fenced budget of £3 million—a lot of money. And as the Finance Committee rightly noted, transparency on this project going forward needs to be assured. There are business cases going forward now, as we know. I, myself, am aware of the many problems and faults that we find in this current building. One way our Commission could save money is minimising any waste spend, such as, I noticed recently as a Commissioner, and I asked questions, that we've got huge, big things like new tvs as you come in through Tŷ Hywel. When I asked what they were, they said, 'Oh, they're a really good way of heating the building.' I've actually looked into it further and it's a very expensive way of heating our building. We should be doing the bare minimum now to a property that is on leasehold. That would save money in the short term.
Yes, okay. Can I just say, though, that one aspect is—and I say this as a businesswoman—that we should be producing more revenue, from the buildings that we do have and also our shop, which I have to say is dire, compared to when I went to the Scottish Parliament? We make £15,000 revenue out of the shop here. I do believe that they sell Scottish wine, Scottish whisky, Scottish clothing and parliamentary branded stuff. I believe, as a businesswoman, that we should look into that and try to get in more revenue from the shop. At the end of the day, we have to make sure that we spend the minimum of taxpayers' money. Diolch.
I'm all for increasing efficiency and effectiveness in all public services, and that should include the Senedd, but I think that your King Canute attitude that we can't put up with more revenue as a result of 36 extra Members is ridiculous, because there are going to be 36 extra new Members. I am particularly keen to understand why Janet, in her Commissioner role, thinks that the heating system that we're currently installing, which is the heat network coming from the former Celsa site, which would otherwise be just wasted into the atmosphere, will be more expensive. That's an important issue, which is probably too detailed to be responding to today.
I particularly wanted to ask the Llywydd, or indeed the Commissioner for equalities—. I want to probe a bit further about how we're preparing for BSL interpretation, as we are currently proposing to pass this Bill in this Senedd. Joyce Watson told us in the last Plenary session before the autumn recess that you're currently seeking quotes for upgrading the studio where the interpreters would operate from and would be able to operate seamlessly. That seems a sensible suggestion. But I wonder if I can just probe further as to whether you have any plans to help increase the numbers of interpreters, because otherwise, if we're still competing with other public services for BSL interpreters, there is obviously a market process here, and the cost is going to go up, or we're simply going to be unable to fulfil the expectations that are going to be raised by this Bill. So, I just wondered whether the Llywydd or, indeed, Joyce Watson could elucidate any further on this point.
Thank you very much for those contributions, and thank you very much to the Finance Committee first of all for their scrutiny of our budget and for contributing to this iterative process between the committee and the Commission on developing the budget. If I may say, the work that Hefin David had started and that the Finance Committee encouraged, namely that the initial process of discussing the budget is one that includes more Members and includes the committee's input—. I think that we are benefiting from that process by getting to a point towards the end of the budgetary process where we have generated a better consensus and have been able to learn lessons and amend the budget over the summer months to adapt to some of the requirements that had emerged from discussions with the groups. So, I'd like to thank the Finance Committee for encouraging us down that road, and I hope that the next Commission will continue with that approach.
Janet Finch-Saunders, you're in a very privileged position, because you, like me, are a Commissioner. Very many of the points that you've raised publicly here are points that we discuss very often in the Commission. I hope that you'll engage fully in those discussions in the Commission on areas such as revenue raising, as we've discussed many times, and on the heating system that we are now committed to, as Jenny Rathbone said, the district heating system that will ensure that we have a longer term sustainable heating source for this Senedd, as part of the neighbourhood in Cardiff Bay, and we have certainly signed up to that.
On BSL interpretation, I think that this is something that we are keen as a Commission to continue to work out and find a sustainable way of meeting the requirements that will be on us to conform to the legislation. You raise the interesting point, of course, and it is a challenge for us as a Commission that we often have to deal with, around whether we train and employ directly or we commission external providers of services. At some point, the Commission will need to assess how we do that in terms of the ability to provide the services of interpretation into BSL.
So, we'll continue that conversation, and thank you for raising it again in the context of the budget, because all decisions by Members, by legislation or by decisions of the Commission or the Business Committee have an implication on the budget, and therefore we always need to take those decisions in light of the costs that are related to those decisions. I think that was a point that was made by the Finance Committee in ensuring that, as the next Senedd starts on its work to develop the business of the Senedd and the committees, it needs to be fully informed of the cost implications of all of that work going forward.
Thank you to everyone for their contributions to date on the budgetary process. I encourage everyone to support the motion in order to ensure that the work of the Senedd can be delivered in full on behalf of the people of Wales.
The proposal is to agree the motion. Does any Member object? [Objection.] Yes, there's objection. I will defer voting under this item until voting time.
Item 6 is next, a motion to suspend Standing Order 13.6 to allow multiple contributions from individual Members during item 7. I call on a member of the Business Committee to move the motion formally. Paul Davies.
To propose that the Senedd, in accordance with Standing Orders 33.6 and 33.8:
Suspends Standing Order 13.6 to allow Members to contribute on more than one occasion during the Open Debate on NDM9046 in Plenary on Wednesday 19 November 2025.
Would a wealth tax work for Wales? Thank you, diolch, for the opportunity to debate this today. This debate is co-sponsored by myself, John Griffiths and Jane Dodds, and supported by Mick Antoniw. Why do we need to debate a wealth tax, and why is there so much talk about a wealth tax at the moment? Do we need a wealth tax in Wales and in the UK? What can we do in Wales and what can we do at a UK level? These are some of the questions I think we need to consider today.
In the UK, poverty is increasing. In Wales, poverty rates are around 22 per cent, according to the Joseph Rowntree Foundation. That is one in five—200,000 individuals. Over the past 30 years, children have faced the highest poverty rates in Wales. At the very same time, the richest 1 per cent of Britons hold more wealth than 70 per cent of all other Britons, and this inequality is getting worse. Billionaire wealth soared three times faster in 2024 than the year before, and like most of the developed world, the wealth of the ultra-rich has dramatically increased, while ordinary workers have faced prolonged austerity, with a record number of children growing up in poverty. Often, when hard choices have to be made, the poorest suffer most.
Staggeringly, the 40 wealthiest families in the UK hold as much wealth as the bottom 50 per cent of the entire UK population, and that's roughly 34 million people. Public services are struggling, while the rich are getting richer. Every week in this Chamber, we hear of the hard-pressed health and social care systems and the education system under strain, threats to leisure centres, threats to libraries. So, I think that there must be some way, as politicians, that we tackle this problem and take a step towards seeing greater equality.
I accept what the Prime Minister says, that the most important thing on his agenda is growth, and I think growth does bring equality and can make society much more equal, but we know that that will take some time, and I think it should be done in conjunction with a wealth tax that is dictated by fairness and by justice. An unequal society is an unhappy society, and also an unproductive society.
Considering a wealth tax is considering how to make society fairer. More money is needed to help those who are struggling and who depend so much on our public services. It seems absolutely fair those who have the most should give more help to those who have the least. So, what is a wealth tax? A wealth tax is a levy on an individual's total net assets above a given amount decided by the Government. This is all assets: property, investments, cash, valuables. The aim is to target accumulated wealth, not just income.
There are already some taxes on wealth, such as inheritance tax, which we discussed here today, capital gains tax, council tax, but the UK does not have a comprehensive wealth tax. Council tax is, of course, devolved to Wales, and Wales has already taken forward steps to reform council tax. Wales, in fact, is the only nation in the UK to have revalued council tax. However, that revaluation is over 20 years ago now, as it took place in April 2003. In England and Scotland, there hasn't been a revaluation since 1991. But the Local Government Finance (Wales) Act 2024 commits us to revaluation every five years from 2028, so that will be some measure towards moving towards fairness, and we are able to do that here in Wales. Of course, the council tax reduction scheme will ensure that the poorest people will be helped.
In terms of a wider wealth tax, a wealth tax can be a one-off or an annual tax. When I became an MP in 1997, the Labour Government introduced a one-off windfall tax, which was on the excess profits of utility companies. This brought in £5 billion, which funded the new deal, the welfare to work programme that sought to tackle long-term unemployment, as well as providing capital investment for schools. Patriotic Millionaires UK and Tax Justice UK are calling for an annual levy of 2 per cent on wealth in excess of £10 million. This could raise £24 billion a year and would affect about 20,000 people in the UK. Of course, this could attract money to Wales through Barnett consequentials, presumably, which, again, we've discussed here today. But a UK wealth tax would unlock funding to tackle the inequality Wales faces.
Polling suggests that a wealth tax like this would be popular. A YouGov poll in July 2025 suggested that 49 per cent of voters would strongly support a wealth tax like this, and a further 26 per cent would further support one. Patriotic Millionaires UK conducted a Survation poll that found that 80 per cent of UK-based millionaires support a 2 per cent tax on wealth over £10 million, with only 8 per cent against it. Of the millionaires polled who would have to pay the proposed wealth tax—that is, people with wealth of £10 million plus—85 per cent of them were in support of it. So, I think that there is evidence that there would be popular support from the public generally for a wealth tax.
Can I thank, first of all, Julie Morgan for tabling this debate and for posing the question: would a wealth tax work for Wales? I was a little surprised that the Business Committee felt that two hours to talk about something that is a reserved matter is an appropriate use of Senedd time, when many Members across this Chamber believe that the reason for expansion is that there is not enough time on our agendas to scrutinise the Government appropriately. So, using two hours to discuss something that is nothing to do with this place—no fault of the Member, but I was surprised that the Business Committee chose this time. Nonetheless, we are where we are.
The Member has presented a comprehensive yet ultimately flawed defence of a policy that has been tried and tested and failed across the globe. The argument for the introduction of a wealth tax claims, as we've heard, that it is the fairest way to address inequality, tackle poverty and raise revenue. I would argue that this proposal is not only impractical to implement, but that it would be economically damaging and is, in principle, a tax on success and on saving.
One of the core problems with a wealth tax is that it penalises the very behaviour that we want to encourage: saving and productive investment. It's not a tax on income or consumption, as we know, but a tax on the total stock of capital. A simple example: you put £10,000 into a business that yields a 5 per cent return, you currently pay income tax on a £500 profit. Under a wealth tax, of course, you would pay tax on the principal £10,000 every single year, regardless of the income generated. This is a fundamental disincentive.
Secondly, this tax discourages entrepreneurship. The wealth of entrepreneurs is typically tied up in the non-liquid equity of their growing companies. A wealth tax would force them to sell off parts of their business, the productive engine of our economy, simply to pay an annual tax bill on paper wealth. This is a tax on growth potential.
Thirdly, the Member indicated some of the concern around capital flight—people leaving the country—because wealth is highly mobile. I would disagree with the Member and say that implementing this tax will not trap capital, it will simply accelerate the relocation of wealthy individuals and their assets to jurisdictions without such a levy. This means the—
Thank you very much. Yes, it's good to have the debate, isn't it? I'm delighted to see that we are looking at the principle of a wealth tax. There are a few points there that I just wondered whether I could just hear a little bit more information from you about. The first is this: you're talking about people leaving the country, yet you've also heard the evidence that 80 per cent of millionaires support a wealth tax in its simplest form, and that they would stay in the UK and they would pay it.
The second point that I just wonder whether I could get a little bit more information from you about was that you were talking about the lack of economic growth—that this could, actually, stifle that, whereas—I don't know whether you'd accept this principle—inequality actually affects us all, and it's not just the poorest that it affects, which Julie has talked about, but it actually affects our millionaires. I was just really interested to hear from some of those millionaires that, actually, they want this wealth tax to see better public services because they employ people. They want their children to have a better health service, a better local authority, a better education service.
So, really, just those two points, if I may, Sam. Where's your evidence, because we’ve got clear evidence from polls, and where are you finding the information from in relation to the fact that this will stifle economic growth? Thank you so much. Diolch.
Thank you for the intervention. Part of the evidence, of course, is the fact that, in 1990, there were 12 Organisation for Economic Co-operation and Development countries that levied the individual net wealth tax. By 2020 this number was just three countries that had chosen to have that in place. And I'll explain some of the reasons they've given as to why they've withdrawn that. On the specific issue of capital flight, one of the reasons that France withdrew from this taxation in 2018 was that they estimated that 40,000 of their millionaires left France linked to the wealth tax regime. There's been a direct link then—a measurable loss, as described, of tax base and investment capital.
Part of the argument that we've heard so far this afternoon is that those who are wealthiest should be contributing the most, and we would all agree with that. That is why, currently, the richest 1 per cent in the UK pay 29 per cent of the taxes that hit the Exchequer every single year. They are already, absolutely, rightfully so, paying a disproportionate level of—. Do you want to come back on this point? I can see that you're itching to come back. I'm happy to—.
I'm so sorry, may I come in with just something in relation to other countries, and, again, this is evidence based? Let's just be clear, France set the threshold so low that it impacted far too many people, and they have acknowledged that. If you look at Switzerland and Spain, they lost revenue because of the cantons and the regions actually applying it differently. And we've got Catalonia, which is a strong example. So, there, we've got an international example, which actually is the converse to what you've said, which actually produced additional revenues, and in Denmark we've seen the same. So, actually—
Yes, so sorry, but it's actually a debating point, isn't it, because I just really want to contest what the Member said about international examples. Thank you.
Thank you for those examples, and I'll happily share some examples back as well, because some of those countries that did remove themselves from having the wealth tax in place—places like Austria, Germany, the Netherlands, even a Scandinavian country, believe it or not, like Sweden—recognised the error of their ways with the wealth tax. You referenced Switzerland. Of course, Switzerland also don't have things in place like inheritance tax in many of their cantons, and they don't also have in place things like capital gains tax. So, picking it out in isolation amongst a wider tax regime I think is unfair, to say the least.
Some other reasons why, Deputy Presiding Officer, countries have reversed this policy—. The Member rightfully indicated that wealth would be assessed on a broad range of assets, including, perhaps, art collections or complex real estate, or the valuation of a private company. That valuation across those assets would have to be done at least on a regular basis—you'd expect perhaps on an annual basis. This requires huge, costly and litigation-prone bureaucracy. The cost of compliance and administration often consume an unacceptably high percentage of the revenue collected, rendering the tax ineffective. Ireland looked at this recently. They estimated that the cost of compliance and administration could consume up to 50 per cent of the total tax revenue collected, making it an incredibly inefficient way to fund those public services as a tax revenue.
Another reason why these countries have rejected the experiment is the unfairness, as described, of double taxation. Wealth is, by definition, income that has already been taxed through income tax, through corporation tax, through capital gains tax. Taxing it again annually on a regular basis is, in my view, an unwarranted punishment for saving and investing. It forces people to choose between selling productive assets or seeing their hard-earned previously taxed savings steadily eroded year after year.
Could I just ask, Deputy Presiding Officer, how much more time I've got? I know the clock's gone red.
Thank you very much. Another issue highlighted by this country is what's described as the liquidity trap. We know that wealth is not cash. So, a farmer or a small businesses owner whose wealth is tied up in illiquid land or machinery could have a high net worth but zero cash flow. A wealth tax, of course, forces them to dismantle the source of their living just to pay the tax.
I'll wrap up now, Deputy Presiding Officer. A wealth tax is a populist proposal that is disastrous in practice. It punishes saving, discourages investment, forces the sale of productive assets and drives mobile capital overseas. If the goal is to raise revenue and address inequality, we should focus on fixing the issues in our existing tax system, such as closing loopholes, not implementing a deeply flawed, internationally rejected policy. A wealth tax is an attack on the fundamental principles of a sound economy. We must reject it. Our economy is already under significant strain. Introducing a wealth tax would make things worse not better. It would be economically damaging and unfair in practice. Far from being a solution to inequality, it risks undermining the very foundations of our fragile economy, threatening jobs, investment and our rural communities. Diolch yn fawr iawn.
I thank Julie Morgan for bringing forward this debate today and for making the opening case. It is an issue of discussing inequalities, isn't it, and what I didn't hear from the Tories was any proposal in terms of tackling that. If not this, what are the other options? Because we know that a lot of the things that the Tories have talked about are not going to tackle inequalities. It is a question, isn't it: do you think that it is immoral that the majority of the world's wealth is in the hands of such a small percentage of the population? That's the basic question here. And in my opinion, no, it's not right, because it's an issue of luck for many people if you're born with this wealth.
There are so many people in our communities that we represent who work so, so hard, and they can't afford the basics of life, and that's bad luck in terms of where they were born and the opportunities that they have had. Have they been young carers and been unable to access education? What are the circumstances that have meant that they haven't been able to accumulate that wealth? And so the question for me is: if not this, then what is the solution? Because, certainly, the taxation system and the economy, as it currently stands, aren't working for the majority of people. That's why Plaid Cymru is of the opinion that we need to tackle the inequalities within our society and ensure that wealth is shared for everybody's benefit.
As dissatisfaction understandably increases, it is interesting to note how the right-wing media is trying to counter any idea of introducing a wealth tax. I wonder who manages or controls that press. In terms of the arguments that we hear time and again from the right, that introducing a tax on wealth that is beyond comprehension and beyond the reach of 99.9 per cent of the population would not only be impractical, but would also compel hordes of millionaires to emigrate. The data doesn't support that. Julie Morgan mentioned those examples—0.01 per cent. Well, I could live with that, you know, because there would be a contribution.
So, if we look at the evidence, it is interesting to see what a positive contribution wealth taxes have made to tax revenue in several countries around the world. In terms of Sam Rowlands’s point, I do accept that the context is different in every country. It is difficult to make the comparison, but there are elements that we can look at and see that it could be different.
I don't think that it is a coincidence that a number of the countries that do have a wealth tax are also among those where there is less inequality and also more happiness. We see this consistently, so it's something that we have to look at. If we look specifically at Norway, Sweden and Denmark, those examples certainly are worth while, because, for example, in Norway, it has been in force there since 1892. Is it worth us having the conversation? This is not a new, trendy concept; this is a basic concept in terms of what fairness is and what democracy is.
Diolch yn fawr, Dirprwy Lywydd, and thank you to those who brought forward this topic for debate this afternoon. I absolutely endorse the decision of the Business Committee. This is exactly the sort of topic for which the open debates were designed. And Sam Rowlands is completely wrong when he suggests to us that this is nothing to do with the Senedd. I'll explain to him before I finish why there are powers right in the hands of the place to which we are elected that can be effective in the business of making sure that those who have more wealth than they will ever know what to do with make a greater contribution to the health of the society to which they belong and which others depend on, a genuine system that aims at economic justice, social justice and environmental justice as well.
The reason why I think these debates are so valuable, and I've really enjoyed listening to contributions so far, is because they allow us an opportunity to get below the headlines. There's more than one sort of wealth, Dirprwy Lywydd, and there's more than one form of taxation. There are real policy choices to be made in the field of wealth taxation, and this afternoon is an opportunity to debate them and to recognise the challenges, the design challenges, that are there in creating an effective taxation of wealth. We ought to take seriously, even those of us who believe in the taxation of wealth, the observation that, if it were straightforward, then probably it would have been done sooner and in more places than has been the case to date.
The case for wealth taxation, however, is clear. High wealth inequality is one of the major challenges of our time. There are many ways in which taxes can be used to collect more from wealthy individuals. Those are not my words, Dirprwy Lywydd, but those of that revolutionary band the International Monetary Fund, in its advice to Governments as to how wealth can be more effectively taxed.
And as others have said—as Heledd Fychan started by saying—inequality lies at the heart of this debate. That same IMF report concluded that the wealthiest 25 individuals in the United States face an effective average tax rate of 3.25 per cent, and that, in the United Kingdom, about a quarter of those with annual incomes of over £3 million paid tax of about 12 per cent. That's 32 per cent lower than you or me or other people who earn our living from work and our income from work would face were we to have the same level of income.
These extreme concentrations of wealth are corrosive of our social and our democratic fabric. Even Hayek, Mrs Thatcher's favourite economist, warned about the social consequences for a society in which more and more is concentrated in the hands of those who do not need it, while others have no savings at all to deal with even the smallest domestic emergency.
There are communities in Wales, Dirprwy Lywydd, where 40 per cent of all households report that they have no savings at all—not a single jot of wealth that they can draw on. When the kettle breaks, when the washing machine breaks down, they have absolutely nowhere to go, while others, often living not that far away from where they may be situated, are in a very different position. And that's a position that's got worse in recent times. The long years of austerity have been the hardest to those who have the least. Because, while wealth inequality has soared, the public services that knit our complex society together have been starved.
There is no fiscal future, I believe—. Given the demographics of our country, where there will be fewer and fewer people of working age in the future, there is no fiscal future that relies only on taking an ever-growing percentage of those incomes from a shrinking number of people whose remuneration comes from work. Instead, we have to find new ways to put an increment of the wealth concentrated in the hands of so few, to put that to work to improve the well-being of the wider society.
The impact of this increment can be significant. As you've already heard, the 2020 UK wealth commission proposed a one-off tax on wealth holdings, which it said could raise between £80 billion and £260 billion, depending on where the threshold for such tax is raised. You've heard about the Tax Justice UK and Patriotic Millionaires UK proposal for an ongoing wealth tax of 2 per cent on assets over £10 million, which they say would raise £24 million annually.
The one point where I disagreed with Heledd Fychan, Llywydd, and agreed much more with Julie Morgan is that, for me, wealth taxation also has the democratic advantage of reinforcing unambiguously the case for the United Kingdom as a great engine for redistribution. If the question posed in this debate is, 'Would a wealth tax work for Wales?', then my answer would be, 'Not if it were to be attempted on a Wales-only basis.' A small number of asset-rich people may indeed live in Wales, and, few as they are, they are, encouragingly, disproportionately represented in the ranks of Patriotic Millionaires UK. But the figures I've just outlined of the billions of pounds that would be raised can only be achieved by taxing wealth where it is to be found in the concentrations of London and the south-east, and then distributed to the nations and regions where need is greatest. A wealth tax can work for Wales, but only if we choose to remain in the club that is the United Kingdom.
Diolch yn fawr iawn, Dirprwy Lywydd, and I won't be very long, so I'd welcome any further contributions. But I'm going to use a lot of my air in order to interrupt my colleagues on my left—although on the right—for definite.
On Monday, John Griffiths and myself met a bus, and, on the side of the bus, it said, 'Tax us, the super-rich. Proud to pay. Here to stay.' That is the message we're getting from millionaires. It's very clear that they want this to happen. As I said earlier, they're not completely selfless. This is about them also wanting to see better services across the UK that allow them to see a healthier and wealthier society both for themselves, for their employees, and for their children and the next generation. There are, as we've heard, around 22,000 people who earn £10 million or more. Our proposal for a wealth tax is very simple: just tax above the £10 million at 2 per cent. They get to keep £10 million every year. Now surely that's enough to live on, isn't it? You know, I would even argue for less than that. But that's the proposal we're hearing from the millionaires.
Last year—[Interruption.] Yes, of course I will. Absolutely. Go for it.
Thank you very much. There is, of course, nothing stopping anybody from paying more tax today if they wanted to do so. So, why is it you think the millionaires that you're speaking to don't voluntarily pay more tax? When His Majesty's Revenue and Customs get in touch and say, 'You've overpaid', they can refuse that refund of payment. They're absolutely well within their right to pay more tax than they have to. So, why is it, do you think, that they do not do that?
I have no idea what philanthropic donations those millionaires make. And, indeed, what a bizarre system that you would say, 'Just pay what you want when you want.' That's not about an equal, just society.
The wealth of UK billionaires in this country grew last year by £11 billion. If you've got money, you get more money. If you've got no money, you have no chance of getting any money. Just referring to the Cabinet Secretary's statement there on people who are struggling, I remember talking to a family who had just had another baby. The husband was on his own, looking after their three-year-old. His wife, sadly, had had to go to a special care baby unit, and in a rural community, it was about 60 miles away. They had no car. He only had a motorbike. There was no way he could go and see his wife and newborn baby. He obviously had to stay at home with his three-year-old. Those are the real-life consequences, and I'm sure there are many, many others that we can hear about.
This is something, in my view, that is a win-win situation for everybody. It's simple. It's something we need to start with. And I'm sure there will be some challenges along the way, but let's start by saying, 'You keep your £10 million, but there's two per cent on top of that', as well as the taxes they already pay. And, listen, every day, we are all doubly taxed. We pay our tax; we pay value added tax, we pay all sorts of other taxes. So, that is a spurious argument, if I may be so bold and respectful to suggest.
We can see that, actually, that £22 billion coming into the UK Government would fund essential services that we desperately need here in Wales. It would fund universal childcare, social care; it would make sure our charities are more stable. We need to make sure that that money does come into Wales, but I would agree with the Cabinet Secretary that we need to be part of this bigger team in order to make sure that tax comes here. Because I want to also see the UK Government increasing the international—[Interruption.] I'll just finish this one point. I want to see the UK Government increasing the international aid budget to take it back up to 7 per cent. I feel it's shameful that we are cutting aid to the world's poorest, which means not only do we create unstable situations, but we don't also tackle the climate emergency, which we can see abroad, through desperate people doing desperate things.
Before you take an intervention—and I will give the time for the intervention—I will remind you that you are closing the debate and therefore this is technically your second intervention, which is a limited time. You're closing the debate, Jane.
And therefore, the allocation of time for your closing, this is your—. Technically, I've given you the time as a second intervention, not as a full intervention here. Because I was told you would have a personal contribution in that closure. Okay? Take the intervention.
Thank you, Deputy Llywydd. I wanted to respond to the point you made that, you know, higher taxes equal better public services; that's the argument that you're making. But I'd take the example from local authorities, for example, where council tax generally goes up every year, but then the services are getting slashed and generally service provision is worsening. So, on that basis alone, how could you ensure that public services would necessarily improve as a result of higher taxes, given the example I've given?
You were given time to close the debate, which was 10 minutes over. You asked for additional time, which is normal—other Members would have three minutes as additional time. They are the rules of the open debate, which we are going to give you. You've had five minutes in your second session, technically, because I was informed that you would be making both a personal contribution and a closing contribution in the closing. So, to make sure that everyone is fairly treated, you have basically used up your second contribution.
No. Fine. I will respond to that point, if I may, Dirprwy Lywydd. My response is, and I think you've heard it echoed around the Siambr: we need that money that comes into Wales that goes out to our local authorities for those desperately needed services. We know that our councils are desperate for money, and therefore council taxes would go down. Diolch.
You will know that I'm not a religious person, but there is one quotation from the Bible that I've always felt a certain affinity with:
'It is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven.'
For those who doubt it, it is in Luke 18:25, Mark 10:25, and Matthew 19:25, and also in the Koran. This is a quotation that should haunt us, not because I believe in the celestial wonders of heaven, or fear the flames of eternal damnation, but because in this global, capitalistic world we live, we are witnessing the ever-growing globalisation and accumulation of immense wealth in fewer and fewer hands, while the poor become poorer.
In the UK, one of the fundamental aspirations and objectives of socialists and of the labour movement have been the creation of a fair and just society, the empowerment of working people and communities, and a fair share of the wealth created in our society. Up until the 1980s, the gap in wealth and income inequality was closing. In the 1980s, it began to widen, and to such an extent that the UK is now one of the most centralised and unequal societies in the developed world. This is important because inequality, apart from being ethically wrong and immoral, is politically unsustainable. It breeds extremes of poverty. It fosters political, social and economic instability. It is a danger to democracy and to the rule of law. We are seeing in real time our political system and our democratic processes being bought up by the new class of super-rich, the oligarchs. Trump, Putin, Xi Jinping, Reform, Le Pen and Elon Musk are all part of this threat to democracy.
Attacks on the independence of judges, the victimisation of immigrants and refugees, the demonisation of the poor, divide and rule, millionaire interests owning and controlling the press and media, controlling and manipulating social media, and the denigration of fundamental human rights. What is happening in America could happen in this country if a political party such as Reform or a right-wing Tory party were ever to secure power. And as the Tower Colliery National Union of Mineworkers banner used to proclaim, 'The price of freedom is eternal vigilance', and, by God, we need that vigilance now more than ever.
In the UK, 20 per cent of the country owns two-thirds of the wealth. The bottom 20 per cent only own 5 per cent. The poorest 50 per cent in our society own just 9 per cent of the wealth. The top 1 per cent share of wealth doubled in the past decade and own 11 per cent of the wealth. The 50 richest families in the UK own £466 billion, equivalent to the combined wealth of 50 per cent of the UK, who also own £466 billion.
Thank you. I'm just wondering how you respond to recent Institute for Fiscal Studies figures showing how reliant the UK tax system is on a small number of individuals—the top 1 per cent contributing nearly 30 per cent of income tax; the top 5 per cent, 50 per cent; and the bottom 50 per cent, just 10 per cent, so there's a degree of proportionality—and to figures from the Office for National Statistics showing that the UK's immigration statistics have shown a significant increase in the number of British nationals leaving the UK following the UK Chancellor's tax rises, particularly amongst the super-rich. And this is already hurting UK finances. And finally, how do you respond—I know you'll be familiar with this—to the 2016 research by Cardiff business school, which found that actually cutting the higher rate tax in Wales would result in additional revenue of £500 million a year after a decade?
Well, because you concentrated, essentially, on the issue of income, income is merely one aspect of wealth, and the percentage you refer to doesn't mean that the percentage is actually fair. It just means we have a very distorted and imbalanced income system. The crux of what I'm addressing is actually, really, to do with the actual wealth of the nation, and the extent that the accumulation of that wealth has grown exponentially, disproportionately, and is now a threat to economic and social stability.
So, I'll carry on. To action. We need a fairer capital gains tax system. We need a fairer capital transfer tax system, and a closing of the loopholes, designed by the wealthy, to avoid taxation. We need the creation of sovereign wealth funds. We need a massive construction programme for social housing, and we need to prioritise economic growth, and to be honest, to rejoin the European single market.
I support a wealth tax of 2 per cent. It is complex. It is not easy to design. There are many complications, but it can be designed. Payment can be deferred to the equity value of wealth and property when it is disposed of. It can be done without creating unfairness for those with high wealth but low income. It would raise billions of pounds, and it would begin to restore greater wealth equality in our society. Because it's not just about raising much-needed funds to support investment, economic growth and to support public services, but it is about reversing the damaging impact of synergistic wealth accumulation. One economist recently stated,
'If you don't have assets now, you are screwed. You'll never be able to afford them.'
Five and a half trillion pounds of wealth will be transferred over the coming decades. Some will inherit millions; others will inherit care bills. Equality must be used as the cornerstone of our common human values, and we must make it so again. And maybe then we will all—even Sam Rowlands—be able to get into the kingdom of heaven.
It's a real pleasure to take part in this open debate this afternoon, tabled by Julie Morgan, on an issue that seems increasingly in vogue at the moment, and which the public are becoming increasingly aware of, which is the wealth tax that we're discussing today. The term 'wealth tax', within itself, is rather nebulous and can mean very many different things, but we can see from polling that without an explanation of what it would entail, the idea seems rather popular amongst the public, which reflects the dire economic state we're in and the desperation that many people feel. The definition of a wealth tax that is generally accepted is a tax imposed on an individual's net wealth or the market value of their total owned assets. Therefore, that's the kind of wealth tax I'll be speaking about in this debate.
We now have also seen both the Green Party and Plaid Cymru officially call for a wealth tax on assets over £10 million, in addition to some Labour Senedd Members calling on the Chancellor to include it in the budget. This is a policy, I argue, that would be hugely damaging for our economy and will not lead to the desired effect. In fact, it would lead to the very opposite, and many experts agree with that notion. Even the Institute for Fiscal Studies warned that the UK is increasingly reliant on a relatively small number of taxpayers for a large share of revenue, and that these individuals are more internationally mobile and responsive to tax changes.
Countries that have also attempted similar taxes have lived to regret it. France introduced a wealth tax with a rate charged on individuals ranging from 0.5 per cent to 1.5 per cent on assets over €10 million. The outcome was not a revenue boom, but a mass exodus of the very taxpayers it targeted. Between the year 2000 and 2016, 60,000 millionaires upped their sticks, with the tax contributing to just 2 per cent of the tax receipts during its lifespan. With the French economist Éric Pichet estimating that the tax cost France twice as much—[Interruption.] I'll just finish this point and then I'll give way. It cost France twice as much revenue as it generated, and in 2017, President Macron slashed it to revive growth. Jane.
Thank you very much. Diolch yn fawr, Dirprwy Lywydd. I just really wanted to echo the point that was made about France. It's clear, in terms of evidence, that they set the bar too low, which actually, then, as you quite rightly say—. I think Heledd actually did say that comparing like with like is really difficult. So, I wondered if you could reflect on that.
The second point, which again we've touched on here, is around the argument about people leaving the country. Patriotic Millionaires are really clear: they will not leave. They want to stay and contribute. Surely those are the sorts of people that we want to remain in the UK, to contribute, but also to pay their fair share. Diolch yn fawr iawn.
On that second point you made, luckily enough I wasn't around at the time, but I always remember reading a lot about the many celebrities that left the UK in the 1970s when the tax rate was 98p to the pound—you know, the likes of Sean Connery, John Cleese, the Rolling Stones, you name it. They upped sticks because that was what they did. We're starting to see evidence of that happening now, not to the profile of those superstars at the moment, but I think it's about striking a balance in that sense and making sure that—. And actually, the Exchequer loses more in tax revenue in that case, because everybody's upping sticks and moving away. So, those policies can actually be fairly damaging and counterproductive in that sense. Julie.
I just wondered if the Member was aware of the survey that was done of people who were emigrating from the UK, which showed that the reasons given were a lack of housing and low wages. Those were the main reasons. It wasn't wealthy people, the high tax payers, who were leaving, it was people who were struggling here and who were going to see if it would be easier somewhere else. So, I just wondered if he was aware of this survey, the most recent survey.
I'm afraid I'm not aware of that survey, Julie, but thanks for mentioning it. I will move on.
Those on the left often scoff at the idea that wealthy individuals will simply move their wealth abroad, but that is exactly what happens. Since Labour entered office, a millionaire has left the UK every 45 minutes, and it's easy to restructure assets or relocate them to avoid taxes. More taxes, which we can expect in the Chancellor's budget, are simply going to accelerate the decline, and a wealth tax would be devastating. Amidst the drip-feeding of the budget spoilers by the UK Labour Government, investment bank Rathbones revealed in a survey that the leaders of 12 per cent of the UK's small and medium-sized enterprises, equivalent to 680,000 businesses—[Interruption.] Yes, I will, Mark.
Yes, that's a very stark figure, Mark, and yes, it's very worrying, and it goes back to the point that sometimes such ideas as a wealth tax can actually be counterproductive and not achieve the ambitions that the left try to set it out to be.
Those 680,000 businesses are planning to relocate themselves, their businesses or both, due to the current tax burden. And even if you don't factor in capital flight and how collection of the tax would be a costly administrative nightmare, the amount of money that a wealth tax is predicted to raise is small. The Green Party claims—[Interruption.] I've taken quite a few now, Jane, I need to move on. The Green Party claims that the wealth tax would raise between £15 billion and £25 billion per year, meaning an increase to UK Government revenue of just 2 per cent, and that is a best-case scenario. The combination of driving the wealthy overseas, huge costs and large administrative hurdles explain why most countries that introduced a wealth tax have ended up abolishing them. Only four countries in the Organisation for Economic Co-operation and Development, a group of 38 mostly rich economies, levy one.
Another important pitfall of a wealth tax is the difficulty in accurately valuing all of the wealth, especially illiquid assets, like private companies or property, which was pointed out by Simon Harrington of the Personal Investment Management and Financial Advice Association. So, the wealth tax crumbles under even the slightest of scrutiny. It wouldn't just be irresponsible to introduce one, it would be immoral and reflects a politics of envy. Perhaps the most immoral part of a wealth tax would be the tax on homes, but we should remember that we already have this, or at least a tax on the acquisition of homes. In fact, the UK already raises more from property taxation than any other OECD country. Stamp duty already operates as a form of wealth tax as much as it does as an inhibitor of social mobility, which is why the Conservatives have pledged to scrap it. And on the issue of property, for those concerned about wealth inequality, building more houses is a much simpler way to address something that both the Welsh and UK Governments have failed to deliver on.
Deputy Llywydd, a wealth tax is not a serious answer to the challenges that Wales or the UK faces. Jean-Baptiste Colbert, Louis XIV's Minister of state, once said that the art of taxation lay in plucking the goose as to obtain the largest amount of feathers with the smallest amount of hiss. A wealth tax is akin to slaughtering the goose outright. It would weaken our economy base, drive away investment and ultimately leave us with less revenue to fund the public services that we all value. If the Labour Party are truly concerned about economic growth, as they repeatedly claim that they are, and as they are visibly failing to deliver, then they should dismiss this silly idea of a wealth tax out of hand. It's time to recognise that pursuing growth means encouraging wealth creation, not punishing it. Thank you very much.
The calls for a wealth tax, I think, really are at the heart of trying to ensure equality in an inherently unequal economic system, and those are calls to which Plaid Cymru, of course, lends its voice, because capitalism's very structure and nature breeds inequality, because the rewards of growth don't spread evenly. They concentrate in fewer and fewer hands, and without intervention, those can become vast divides. We have seen the few, over the centuries, make fortunes on the backs of the many, which then compound over generations, deepening and baking in that inequality even further over time. A targeted wealth tax on our richest citizens is one of the ways we can address this in the short term, although of course, addressing how profits are shared with workers and ensuring everyday costs such as rents are affordable are all also essential to reducing that inequality.
Taxing extreme, largely static wealth is acknowledged to be among the least economically harmful forms of taxation, because it raises revenue without suppressing wages or discouraging productive investment. Such a measure would bring concrete and specific benefits to Wales, where more of our population feel the effect of socioeconomic inequality, compounded by the financial inequality of our very nation, underfunded by way of an unequal union and consecutive Governments unwilling to address the real-life consequences of that inequality.
Wealth in the UK is extremely concentrated; we've heard the percentages rehearsed already. These patterns make clear that accumulated assets are the primary drivers of inequality today. The wealth of the ultra-rich of the UK has increased massively in the last few decades, while living standards have dropped for those on low to middle incomes. According to the Sunday Times rich list, there were 171 UK billionaires in 2023, up from 15 in 1990, so from 15 to 171. I remember my parents used to read the Sunday Times because they liked the books section, and my father used to say that it's good to know what the enemy is thinking. I remember being able to look at that magazine when I was a teenager, and it was only a couple of pages spread. Now, you wouldn't be able to fit it in the magazine. And these are not millionaires; these are billionaires—people who have more money than they could ever need or want to be able to spend in their lifetime or even in their children's lifetimes. Of course, at the same time, we know there are record numbers of children living in poverty.
I wonder what you think the most amount of money a person should have is. If having £1 billion is too much, I wonder if you could outline how much you think the most a person should have is.
We're talking about a £10 million threshold, aren't we? That's what we're debating today. Even on that threshold—. And I completely take that we would have to design that carefully. In France, they set that threshold too low. But we're talking about here today, and that's been agreed with people like the Patriotic Millionaires, that £10 million would be acceptable, and 2 per cent on that would raise a large amount of money that would be of help to us here in Wales and across the UK.
Nelson Mandela said that massive poverty and obscene inequality are such terrible scourges of our times that they have to rank alongside slavery and apartheid as social evils. They're strong words, but I think that's how we must see a carefully designed progressive wealth tax—as a response to the social evil of obscene inequality. A tax targeted at very large fortunes, like our call for that 2 per cent wealth tax on assets over £10 million, as we heard, could raise £24 billion a year. It's a start.
I would go further, as I said in my opening, but this would simply ask those with the broadest financial capacity to make a fair contribution to the common good. And I think fairness is the key word here. Many working people in Wales pay substantial sums to support public services through income tax, national insurance, VAT and council tax, yet the effective tax rates on large fortunes, as we heard the Cabinet Secretary say, can be low. Income from assets and capital gains often face lighter taxation than earnings from work, and a modest annual levy on very large assets would help close that gap.
I think this is a practical step. Recent research and policy reports from economists and independent institutes show a range of workable designs for wealth taxation and estimate material revenue. For example, the Taxing Wealth project and related reports have estimated that reforms targeted at wealth could raise tens of billions a year if introduced at meaningful threshold and rates. That revenue could be channelled into health, housing, education and the green transition and produce that long-term growth and social stability that we need.
We all know that the richer you are, the more access you have to the tools that help you keep more of your wealth—accountants and advisers—the mobility that comes from wealth and, of course, the capacity to invest, a capacity that is beyond most people in Wales, who are simply trying to keep their children fed and warm and a roof above their head. Yet there have been warnings that highlight, of course, the need for careful design and implementation so we don't end up shrinking that tax base, but many leading economists argue that taxing this extreme, largely unproductive wealth is feasible and justified. We shouldn't let perfect be the enemy of the good—
Can I just very quickly come in? There was a point I wanted to make about administration. So, we already have HMRC collecting taxes, and they do that through self-assessment, but also through compliance. What we know about a potential wealth tax is that that would be exactly the same system, so I just really wondered what you thought about the argument that, actually, the burden of administration would potentially far outweigh the benefits. Diolch yn fawr iawn.
I completely agree, Jane. That's the point, isn't it? We know where these assets are, and, for instance, on things like works of art, they have to be registered through insurance companies. This data would be quite practically available, I believe.
So, what is the problem? Why aren't we seeing action in this area? Well, we've heard warnings from politicians, mainly from the Conservative Party, of course, but also now coming from the Labour Party in Westminster, arguing that these wealthy people would simply leave. And this, as we've heard, has been amplified in the right-wing press.
So, why not look at the evidence underpinning those claims? Tax Justice UK has pointed to evidence from the 2017 reforms to the UK's non-dom rules, which showed that raising taxes on the wealthiest and restricting access to the procedure resulted in only around 2 per cent of individuals who had been in the UK for less than three years choosing to leave. The proportion was even lower among those with stronger links to the UK.
Further research from the LSE, which looked at those in the top 1 per cent, showed that none of those who contributed to their research intended to move abroad for tax reasons, and the overwhelming majority said that they would never consider relocating because of taxation. We've heard international comparisons too. Even if a small proportion of wealthy people did leave, there is reason to believe that the vast majority would stay, and that what they would be able to contribute through a wealth tax would be far greater than any possible losses to the tax pot. And, of course, it would be possible to introduce measures that would encourage people not to leave and measures to fill the possible gaps, such as exit taxes—something that is also used in many other European countries and around the world.
The Labour Government in Westminster is quite prepared to adopt models from abroad when it comes to those in our society who have the least: refugees—
The Labour Government in Westminster is quite prepared to adopt models from abroad when it comes to those in our society who have the least—refugees and asylum seekers—so why is it not prepared to do the same for those with massive levels of wealth? Norway and Spain have introduced wealth taxes, and they are still in place. The UK Government could learn the lessons from the less successful systems, such as in France. We shouldn't conclude from these examples that wealth taxes don't work, but rather that those specific systems don't work. Thank you.
Dirprwy Lywydd, being a Member of this Senedd is a great privilege in many ways, isn't it? Amongst those privileges is visiting local schools and, indeed, having local schools come here to the Senedd. I'm sure many Members will fully appreciate what a great experience that is in so many ways, that engagement with our young people. And in my experience, one thing they often ask is, 'What got you into politics?' They ask all sorts of interesting questions, don't they, and they can be very direct. But, often, that's on their list, and rightly so, it's a really good question to ask a politician, I think, isn't it—you know, 'What motivates you?', 'What really drives you?', 'Why did you want to get involved in representative politics?', 'What do you want to do with the role?' For me, it's always been about fairness, and I tell those young people from Newport schools that when I was growing up—I was born and brought up in Pill, the docks area of Newport; I went to primary school there—I very quickly understood, growing up in that community and walking to other parts of Newport, what great disparities there were in wealth and standards of living between Pill and other parts of Newport. Of course, that's true for Cardiff, it's true, I guess, for all parts of Wales and across the UK and on a worldwide level. As a young child, I thought about that unfairness: did things have to be that way? Do things have to be that way, or is it within the ability of societies and people to change things and change things for the better? I concluded that it must be perfectly possible to create a much better, much fairer, much more equal society that would benefit everyone. And that's what drove me later on to think about becoming involved in politics, firstly at a local level and then in the then Assembly, now the Senedd. And it's still what drives me today and that's why I very much welcome this debate that we're having here.
It's unfairness, isn't it, that cripples the whole world, in my opinion—unfairness on a world level. And that drives the desperation that people feel, which causes them to move from one part of the world to another, creating huge difficulties for themselves and their families, often, and putting themselves in great peril. And it creates a feeling of instability, concern and anxiety in the countries that they move to, often, and that's something that we try and address in various ways. But it's inequality on a world level that creates that sort of instability and difficulty for countries right across the world. And then we see great inequality within the UK, and Wales obviously suffers a great deal from that—that regional economic inequality. Anything that produces greater tax take at a UK level and is then redistributed will be very beneficial to Wales, so we stand to be a considerable beneficiary from a wealth tax that then allows for that greater redistribution.
As I say, even in Wales itself, of course, there's considerable inequality from one part of Wales to another and within our towns, cities and communities. All of that, I think, is perfectly obvious to people, and when I knock on doors, people talk about chwarae teg, about fairness, about the UK being the sixth biggest economy in the world, but that wealth that the UK has being distributed so unevenly and so unfairly, and they see the results of that in their communities: people sleeping rough, people asking for money on the street, foodbanks, levels of crime, which, of course, affect everyone. Who, rich or poor, would want to live in that sort of society? Would people feel at ease with themselves living in that sort of society, be they rich or poor? I think the answer is 'no' overwhelmingly. And that book, The Spirit Level, provided, I think, a lot of research around that and a lot of facts, a lot of evidence that everybody gains from a more equal society, even if they're at the top of income or wealth levels or at the bottom. Those arguments resonate with people, they're readily understood and supported, and that's why we heard earlier that something like three quarters of our population support a wealth tax.
A wealth tax is not some ridiculous, far-fetched idea, it has been tried in different parts of the world and it is delivering extra income to be used on public services in other parts of the world. Of course there's a lively debate about just how you shape it, how you get it right, how you avoid some of the pitfalls that Conservative Members have mentioned here today, and that is a debate that should be had. As Mark Drakeford said, yes, it is complex, but we are having a debate. We're starting a debate in some ways here today, aren't we? I believe that's the right thing to do.
Does a wealth tax work? We heard Gareth quite provocatively describing a wealth tax as a 'silly idea'. Well, Heledd Fychan has already indicated that this 'silly idea' has been implemented in Norway for 133 years. That's quite impressive for a 'silly idea'. And, of course, we can be selective, can't we? We can all be guilty of this. We can be selective to look at the evidence that suits our political views, but it can work. Evidence shows that it can work. It can fail if it's not done properly, but, generally, in principle, it can work. Look at Spain. Spain is Europe's fastest growing economy. The Financial Times recently described Spain as 'Europe's standout economy'. They have a wealth tax.
Now, would a wealth tax work for Wales? That's Julie's question for us this afternoon. Well, clearly, the answer is 'yes'. A wealth tax, as John has already indicated, would allow us to redistribute wealth to the most neglected and underinvested parts of the UK. That of course would benefit Wales.
Many of us already, from the pillar over there to my right, or, should I say, to my left, have shaken our heads when we've heard several stats mentioned this afternoon about extreme concentration of wealth, as the Cabinet Secretary described it. Well, this is another stat that shocked me: if the wealth of the super-rich continues to grow at the rate it has been doing, then by 2035—it doesn't seem that far away—the wealth of the richest 200 families in the UK would be larger than the whole GDP of the UK. Now, that is staggering. It's nearly unbelievable. Surely that's not right. We can't say that is right. They can afford for the rest of the UK to actually feel—. John reminded us that the UK is the sixth largest economy in the world. Well, people don't feel like that. People in communities in Cardiff and in Newport and the Valleys don't feel that they live in the sixth richest economy of the world. What they feel is that they're always being asked to shoulder the burdens. They're being asked to deal with increased costs time and time again, to deal with stagnating wages, to deal with a struggling health service, cuts to public services.
Earlier this week, I had an e-mail from a constituent who had run out of money to pay for their mother's care home bills, and then the local authority couldn't shoulder that bill. That lady now, 86 years of age, has to move from that care home, where she's been since 2001. They don't feel as if they're living in the sixth richest economy in the world. Mark, you wanted to say something.
How do you respond to research by the Adam Smith Institute, published in The Independent, showing that each of the 10,800 millionaires who left last year would have paid £394,000 in income tax last year had they stayed? That's a few billion less for public services.
Yes, well, we'll leave that at that, I think. That says—. Where you've had the evidence from says enough, I think. This idea that there's a flight of millionaires and billionaires from this country is absolutely—. Who are these billionaires who are flooding from this country? Name them, Mark. Give us the names of these people. They don't exist. Andrew R.T. Davies is still here with us today in the Chamber.
Now, opponents to such change over there, opponents over there, should consider this, that wealth tax is not really an interference with the free market. Unlike other taxes, targeted taxes and tax relief on certain types of property and investment, it doesn't incentivise one type of spending behaviour or one type of investment over another. With regards to influencing the free market, it is one of the least invasive things we could do to raise capital. So you big proponents of the free market, I expect you to be supporting Julie's debate today.
Now, also, I think you should look at history. Some of you might remember Disraeli. In 1842, when income tax was introduced by the Conservative Government, there was a huge fanfare of people opposing income tax. In fact, the good old Liberal Gladstone was against it, Jane. And for decades, people were complaining about income tax. People were saying probably the same arguments that Mark Isherwood has said today about this outflux of wealth away from our shores. [Interruption.] Yes, exactly, they are facts, Mark—quite right. Now, for decades, they wanted to abolish income tax, but just think for a second, if we actually had abolished income tax, what we wouldn't have right now: our education system, our health system, our infrastructure, all based largely on people contributing through income taxes. Consider if we would have taken that away just to allow some Victorians to be a little bit wealthier. This is the very same argument you're doing right now, over 150 years later.
As Julie has said, the people of the UK, and as polls have shown time and time again, the people of the UK want the wealthiest to pay their fair share. Wealth tax is based on the will of the people, and you often quote the will of the people over there, don't you? Wealth tax is based on the will of the people. It will improve our society's well-being. It's so true, John's comment that nobody wants to live in a community where people are sleeping homeless, where people feel that they've got to break the law to feed themselves and their families. People don't want to live in an unequal society. It helps nobody, from the very rich to the poorest in our communities.
Diolch. Very briefly, Deputy Llywydd, I was interested in what John was saying about what schoolchildren ask him when he goes round the schools and when they come to the Senedd, which is one of the great joys of the job, I absolutely agree. And what I find is that children often say to me, 'How much do you earn?' I don't know whether others experience that. I think that is quite significant, really, that they are already—and this is primary school children as well—very aware of how important it is how much money you actually earn.
We do know that some of those children will be dealing with issues like not being able to go on the school trip or trying to hide, perhaps, from their friends that they haven't got as much money as others have and they can't buy the latest trainers and all those sorts of issues. I always think, when they ask that question, that that's behind it. So, that's why I think it is so important that we do consider what I don't think is a particularly radical measure, but things that we should do to make things better.
What upsets me, really, most about the debate is that I think it is a worldwide issue, and I do think that there is enough money in the world to deal with the major issues that we have to deal with—climate change, poverty—and that money is there, and we have to try to make those steps that will actually shift that wealth, and this is only one small step towards that.
So, I'm so glad that we have debated it here in the Senedd today, and the arguments that I've heard against it I don't feel have much validity. I do think that it has to be done carefully, and I do think that it will take time to bring it in, but I do think it's very good that we're debating it, and that it is one way that we could try and lessen the great inequalities that there are. Thank you.
Diolch yn fawr, Dirprwy Lywydd. In my first contribution, I wanted to acknowledge some of the complexities of wealth taxation. In this contribution, I want to point to two things that I think are practical and can be done, certainly in the first case, very quickly. That is a proposition that has been worked up in great detail by the Institute for Public Policy Research, and that advances the simple proposition that income from wealth should be taxed the same as income from work. It is a simple proposition to equalise capital gains tax and income tax here in the United Kingdom. At the moment, capital gains tax is considerably lower. People who gain an income from their capital pay far less tax than people who have to pay a tax through work. That would create billions of pounds for the coffers of the Treasury, and therefore for investment in our public services.
I've been a bit baffled from time to time by contributions from our Conservative colleagues as to whether or not they are against the principle of a wealth tax—some of them appear to think it's just wrong in principle—or whether it is just a matter of practicality, it's just too difficult to do. Well, equalisation of capital gains tax and income tax has been done within the lifetime of a number of us here, because it's exactly what Nigel Lawson did in his budget of 1988. Surely, at the high point of Thatcherism, if it was acceptable to Conservatives in that era, I find it difficult to see what objections Conservatives could make to that today. That is something that could be done very quickly indeed.
Sam Rowlands said at the very beginning of what I think has been an excellent debate that he couldn't see why we were talking about these things, because they're nothing to do with the Senedd. Actually, 60 per cent of wealth in this country is invested in land and property. That is a tax that's right here in this Senedd. That is what we have—council tax. That's the basis of council tax. I'm very proud of the things that we've done as a Government and as a Senedd in recent times to try to make council tax as fair as it can be. But council tax is an inherently unfair tax. There are limits to how much you can make it better than it actually is, and there's an alternative. I'm very pleased that the Welsh Government has invested in research—and is continuing to do so—in an alternative to a council tax, a wealth tax known as a land value tax.
The answer to the question, 'Would it work for Wales?', is that, the very first time a wealth tax was put on the statute book, it was put there by a Welshman, because it was David Lloyd George, in his 1908 People's Budget. He spoke for four hours and 50 minutes, Dirprwy Lywydd.
I just wanted you to know that, as you look at me there. Four hours and 50 minutes, with one break for a cup of beef tea, or so it was reported. In that great People's Budget of 1908, Lloyd George put land value taxation on the statute book. A land value tax would be fair, because rich people own more land than poor people. It will be practical, because you can't move land. We've heard a great deal about the mobility of wealth; you can't move land. Land is easy to tax because it's there in front of you. It would drive investment to deprived areas, where land values are lower, and it would differentiate properly between land owned for wealth creation, which you want to support, and land owned for wealth extraction, which you want a system to discourage. 'Buy land', said Mark Twain, 'they're not making it any more', and a tax on land values here in Wales, I believe, would be a practical and preferrable form of taxation that would get to the heart of wealth taxation in a way that council tax never can.
So, that's my answer, Dirprwy Lywydd, to the proposition that Julie Morgan has put in front of us. Capital gains tax and income tax equalisation—at the moment, people in Wales subsidise—we subsidise—capital gains rates for people in other parts of the United Kingdom, because we don't have people who benefit from capital gains tax here in Wales. And we've got a system that we can experiment with here in Wales that would go to the heart of this debate, a debate that I have really enjoyed this afternoon. Diolch yn fawr.
I just really want to reflect on this debate and how—. I've enjoyed it as well, and it's been a very respectful debate, one in which I hope people feel we've listened to each other and have been able to respond to some of the points. I'm not going to be too long this evening, because, actually, I think a lot of the points have been covered. But I just really wanted to both start and finish with what is at stake for us here in Wales.
After decades of underinvestment, the gap between wealth and hardship in Wales has never been more stark, with one in five people living in poverty here in Wales, and, for children, it's one in three. It is quite a shameful statistic that has remained stubbornly stagnant. Whether colleagues agree with every part of this proposal or not, I hope we can all acknowledge that when 50 families in Britain hold more wealth than the poorest 34 million people combined, something in our system is just not working.
We know that the proposition of a wealth tax will come into Wales, and we need that much clearer, hopefully, and being advocated for, but we can see that that would help our local services. We've got a social care system that is in crisis. We've got our health services that are desperate for money. Hospices across Wales are on the brink of collapse. These are services that—[Interruption.] These are services that families rely on at the hardest moments of their lives, yet most hospices still have to raise around 70 per cent of their care through donations. This surely isn't the natural order of things, and we must never accept it as such. I believe in a Wales where we must use every tool available to us to build a fairer, more secure future for our communities. But right now, however, whichever way we are looking at this tax system, it is just not working. That has to change.
I'm grateful to many Members who spoke about this so powerfully. I hope we can all agree that this debate is not about the abstract. It isn't about punishing anyone. It is about people, including the super-rich, who want our communities looked after. They care about our communities as deeply as we all do. We care about the carer who is working through the night for poverty wages and who still can't afford to heat their home. We care about the child whose potential is limited by their postcode, who goes to school hungry. We care about families doing multiple jobs, working as hard as they can and doing everything right and still having to use foodbanks. Our tax system should support these people, but, right now, it taxes work more heavily than wealth. Someone earning £10 million pays an effective tax rate of just 21 per cent, far below the 45 per cent applied to income from work. The poorest tenth of society pay 48 per cent of their income in tax, while the richest just pay 21 per cent. That simply isn't fair.
The Senedd reconvened at 18:10, with the Llywydd in the Chair.
8. Plaid Cymru Debate: UK Budget and Devolution
The following amendments have been selected: amendment 1 in the name of Jane Hutt, and amendment 2 in the name of Paul Davies. If amendment 1 is agreed, amendment 2 will be deselected.
1. Notes the upcoming UK Labour Government's autumn budget to be announced on 26 November.
2. Regrets that previous fiscal events by the current UK Labour Government have failed to deliver on long-held promises made to the people of Wales.
3. Calls on the Welsh Government to stand up for the interests of the people of Wales by making representations to the UK Labour Government, and publishing the relevant correspondence, to:
a) develop a clear plan, with specific timescales, to develop a new funding formula for Wales based on need, and placed on a statutory footing;
b) reverse changes to inheritance tax on family farms, and reimburse the Welsh public sector in full for changes to employer national insurance contributions;
c) enable the Senedd to set its own income tax bands;
d) uprate the Senedd’s borrowing powers and drawdown limits for the Wales Reserve in line with inflation as a first step towards modernising its fiscal architecture;
e) provide full consequential funding owed to Wales from the HS2 project;
f) devolve the Crown Estate to enable Wales to fairly profit from its own natural resources;
g) remove the two-child benefit cap;
h) fully devolve justice and policing powers to Wales; and
i) introduce a 2 per cent wealth tax on assets over £10 million and equalise capital gains tax with income tax to advance redistribution and provide more robust cost-of-living support to Welsh households.
Diolch, Llywydd. A week today, the UK Government's Chancellor of the Exchequer will present her autumn budget. So, today's debate is our final opportunity as a Senedd to discuss what we would like to see the budget delivering for Wales, and our voice as a Senedd should matter. After all, the money available to the Senedd shapes how public services are delivered in Wales and how we grow our economy. It determines whether we can respond to the challenges of climate change, get to grips with poverty, and even clear the coal tips that have blighted and threatened so many of our communities for far too long, and whether we can invest in culture, the arts, sport, or leave them to wither. In fact, there's no aspect of our lives that isn't impacted by decisions taken in London by this Welsh Labour Government's counterparts.
That's why the expectations of Plaid Cymru are clearly set out in today's motion, where we call on the Welsh Government, with the support of the Senedd if today's motion passes, to press for the following: a plan to develop a new funding formula for Wales, based on need and placed on a statutory footing; reversing changes to inheritance tax on family farms, and reimbursing the Welsh public sector in full for changes to employer national insurance contributions; enabling the Senedd to set its own income tax bands; uprating the Senedd's borrowing powers and draw-down limits for the Welsh reserve in line with inflation; full consequential funding owed to Wales from the HS2 project; devolution of the Crown Estate, so we can profit from our own natural resources; removal of the cruel two-child benefit cap; full devolution of justice and policing; and, as we've just discussed extensively, a wealth tax on assets over £10 million and equalising capital gains tax to advance redistribution and provide more cost-of-living support to Welsh households.
So, there are two amendments to our motion. The first, from the Conservatives, replaces our calls with their own, illustrating some areas where we can agree on, and others where we definitely differ. We won't be supporting, but I do thank you for engaging seriously with the debate and putting forward alternative priorities.
The second, from Labour, is somewhat different, simply deleting all the calls. So, let's be clear, if the motion passes, amended by Labour, all the motion will say is this: 'To propose that the Senedd notes the upcoming UK Labour Government's autumn budget to be announced on 26 November'—notes the budget. So, the question I have for all Labour Members of the Senedd, and I'm not surprised there are not many here, given the proposal from the Government, can I ask why 'delete all' and not replace with even a single call? Is there nothing you want to see the UK Chancellor announce next week that will benefit Wales? Or do you simply know there's no point in asking because they aren't listening? Is there an acceptance that all we can do is note that the budget happens, and that whatever it provides for Wales, we should be grateful for, rather than trying to shape it? The people of Wales, as do we as a Senedd, deserve to know what the Welsh Government's position on the upcoming budget is and what you're hoping to see it deliver for Wales. We deserve to know how those discussions are progressing. By deleting all, surely the Welsh Government is doing a disservice to both this Senedd and to the people of Wales. So, I'd be grateful if the Cabinet Secretary could outline, in his response to the debate, why the decision was taken to delete all, and also outline the Welsh Government's expectations in advance of next week. And, given that the Chancellor seems to be changing her mind on what will be in the budget every day at the moment, if not every hour, with commentators describing the situation as 'chaotic', it seems clear that now is the time to influence. So, how is the Welsh Government ensuring that Wales's voice is being heard?
Diolch. As you addressed a question to Labour backbenchers to reply, I thought it would be rude not to. I'm very sympathetic to the aims that you've set out in your motion, but this is not a debating society, and were we to pass your motion, we'd be able to achieve none of it, because we're simply calling on the UK Government. Meanwhile, we are grappling with passing a budget and Plaid Cymru seem to be refusing to engage with the practical realities of engaging in those trade-offs; instead, preferring gesture politics where we're making demands of Westminster. Perhaps that's why we've deleted all.
You can look at amendments put forward by Welsh Government when a different party was in power in London. And I think, to be clear, we have seen a number of Welsh Government motions—rightly so—calling on the UK Government so that we could be united as a Senedd in our voice. There is power in collective calling for what Wales is due, and that's exactly what we're calling for today.
So, let's be clear. We've heard that the partnership in power exists. Isn't it time it starts delivering, and for Labour to deliver on promises that were made when they were in opposition, now that they are in power? Because, let's be clear, this is the reality of what we've seen to date: a spending review that will deliver the lowest real-terms growth to the Welsh budget outside the immediate austerity years, and a shrinking capital budget—in short, a deal for Wales that is even less generous than what we got from the Rishi Sunak administration; the fundamental injustice—not my words, but the words of the Cabinet Secretary himself—of a Welsh-specific tax being levied by the UK Treasury, as a result of their manipulation of the Barnett formula, at our expense, on changes to employer national insurance contributions; a Welsh budget for next year that threatens to push local authorities to the brink, with a potential council tax rise of over 20 per cent and tens of thousands of jobs at risk; as well as a historically low settlement for the NHS. Add to this not a single penny of consequential funding from the billions we are owed from the HS2 project, despite the promise of change we heard during the general election; and progress on further Welsh devolution not simply being non-existent under the current UK Government, but actually going in reverse in several key areas such as the Crown Estate and justice and policing—the damning and entirely accurate verdict of the Labour Member for Pontypridd. Devolution dismissed as an inconvenience by the party that used to pride itself as the party of devolution.
The people of Wales and public services in Wales cannot afford to see yet another UK budget that sidelines Wales. So, I call on the Senedd today to reject today's amendments and support the original motion, and, more than anything, that the Welsh Government makes clear what they want to see the UK budget deliver for Wales. I look forward to the debate.
I have selected the amendments to the motion. If amendment 1 is agreed, amendment 2 will be deselected. I call on the Cabinet Secretary for finance to move formally amendment 1.
In point 3, delete sub-points a) to i) and replace with:
a) review the fiscal framework for Wales, including borrowing powers and drawdown limits;
b) reverse inheritance tax changes for family farms and family firms;
c) reverse the increase in employer's national insurance and reimburse Wales for failing to fund the full costs of these to date;
d) rule out any new tax rises;
e) protect the triple lock on state pensions;
f) provide consequential funding for Wales as a result of spending on HS2 and the Oxford and Cambridge rail investments;
g) reinstate funding for the electrification of the North Wales main line;
h) increase investment in securing UK borders at Welsh ports to prevent illegal immigration; and
i) provide additional resources to deliver an M4 relief road and upgrade the A55 trunk road, given their importance as strategic routes for UK connectivity.
Diolch, Llywydd. I'd like to begin by thanking Plaid Cymru for bringing forward today's debate. I'd like to formally move our amendment in the name of Paul Davies.
As we look ahead to the autumn budget, the position of the Welsh Conservatives is clear: Labour's so-called partnership in power is failing the people of Wales. Unfortunately, much of the motion tabled by Plaid Cymru today is built on a fantasy that would be dangerous for our Welsh economy, though, also. But let me start with where we can agree: Wales deserves its fair share of investment and support, and we too express frustration that previous fiscal events have not delivered on long-held promises for the people of Wales. However, Plaid's proposals are deeply flawed in their approach to devolution, wealth redistribution and expanded welfare.
We oppose the devolution of the Crown Estate—a move that elsewhere has been proven to add bureaucracy without benefit. We reject proposals to impose yet more taxes on already struggling families and businesses. And we strongly oppose the reckless and unfunded suggestion to abolish the two-child benefit cap, a policy that Plaid Cymru share with their populist colleagues in Reform—an unholy alliance of economic irresponsibility.
We oppose devolving more powers when this Welsh Government has failed to get to grips with the powers that they currently hold. Devolving justice and enabling the Senedd to set its own income tax bands would be not only costly, but would carry significant economic risk. We are against Plaid's proposal for a wealth tax, as we've just debated. A wealth tax is not a solution, it's a threat to the prosperity of Welsh families and the future of our economy. Such a tax would punish success, discourage investment, and risk driving businesses and talent away from Wales.
And in their efforts to move Wales away from the UK and prove a political point, they risk harming the very families and communities they claim to represent. Plaid's obsession with independence isn't just reckless, it would break up the United Kingdom and leave Wales even poorer. But we shouldn't be surprised. For much of the devolution era, Plaid Cymru have propped up Labour, and look where that's taken us: the worst education outcomes in the UK, a broken health service and a stagnant economy. This has all happened on Plaid Cymru's watch. Frankly, they should be embarrassed to demand more powers, when they've failed to help Labour use the powers Wales already has.
Instead, as Welsh Conservatives, we focus on practical steps that will genuinely create prosperity in Wales. Our amendment calls on the Welsh Government to make that representation to the UK Government to review that fiscal framework, including those borrowing powers; to reverse inheritance tax changes that unfairly penalise family firms and farms; and to reimburse Wales for the unfunded costs of national insurance increases. We want to seek that they rule out any new tax rises, protect the triple lock on state pensions, and ensure funding for key infrastructure projects, such as the M4 relief road, the A55 and the north Wales main line electrification. These are achievable, responsible measures that support families, safeguard jobs and create an environment for our economy to thrive, unlike Plaid's fantasies, which would plague Welsh households with higher costs and greater risk.
Thank you for giving way. I just wonder whether you could highlight what it is that you think makes Wales uniquely incapable of being independent, when every nation in the world has its own independence. We're not suggesting for a moment to, as you say, break up the relationships of these islands, but to stand on our own two feet. Is there something about Wales that you think makes us uniquely unable to do that?
Well, one of the questions that Plaid Cymru continue to fail to answer is how they would fund the fact that taxpayers would pay £11,000 a year more in tax rises and austerity cuts. Working people would pay £11,000 a year more in those tax rises and austerity cuts. There’s a fundamental issue in the economics from Plaid Cymru.
To be clear, Llywydd, Welsh Conservatives will always fight for Wales within the union, standing up for our communities, our economy, and for our future. Diolch yn fawr iawn.
Of course, we heard a lot of spending commitments in the Conservatives' contribution, but with no idea of how we would actually raise the cash. I’ll tell you something that would raise the cash—[Interruption.] Well, a wealth tax is definitely one of them, Rhys, but one thing I think that a number of us in this Chamber—not on these benches, but in other parties—have forgotten about, something that Labour in Westminster once agreed with us on, and judging by the amendment put down by the Government today, something that the Welsh Government once agreed with us on, and those are HS2 consequentials. If you needed to point to any symbol that embodies the unfairness at the heart of our financial settlement, it's right there. It’s been there for years, and that’s despite acknowledgement from the Secretary of State for Transport, that’s despite acknowledgement from the Secretary of State for Wales when she was shadow Secretary of State. Instead of righting that wrong, what we’ve had is £445 million committed over the next decade. That’s welcome, of course, but that does not even touch the sides. Let’s be clear: Wales should receive the £4 billion owed—a figure used by the Secretary of State for Wales. That’s the bottom line. But it’s also important to remember that HS2 is just one part, one symptom of the wider Barnett unfairness we have historically experienced.
Now, what I mean by that? Well, the recent comprehensive spending review has provided less than £300 million in new funding for enhancements to Network Rail's network in Wales up to 2029-30. Bear in mind, of course, that Wales currently has over £3 billion-worth of rail enhancement schemes under active business case development. Meanwhile, that same comprehensive spending review outlines over £34 billion in rail enhancements for England up to 2030, including £25 billion for HS2, and including £500 million plus for the lower Thames crossing, which is expected to cost around £10 billion—a road project that's actually funded from the same Department for Transport budget that covers rail infrastructure in Wales.
Now, nobody can reasonably look at those figures and defend them. I'm sure again, based on the amendment we've had from Welsh Government, that they might try in some way, but that unfairness is unjustifiable. Wales receives £300 million; meanwhile, England receives over 100 times more—nowhere near a population-based allocation. Such an allocation would actually suggest Wales should receive at least one twentieth of England's funding. If that doesn't rile up the Labour Party in Wales, then it tells us everything we need to know about the so-called 'red Welsh way', and it exposes the junior partnership of Welsh Government in this partnership in power, and it exposes the fact that they are completely comfortable with that. Just like when the Conservatives were in power, we're an afterthought in Whitehall.
Like my colleague Lee Waters, I largely agree with the motion as well, although I do suspect that Lee and I come to it from slightly different directions, and I do regret the Government's amendment, because I do believe that if these debates are to be worth having, then they need to be debates where there is engagement between the Government and other parties here. I think it's a right and proper part of our democracy that we participate in debates with each other, whether we agree or perhaps we disagree. [Interruption.] I'm not a Minister any more. [Laughter.] But I also told you why I disagreed with you; you were never left in any mystery at all as to why I took particular positions.
I come to this from a position of, 'What are Labour values and where do Labour values take us?' One of the most important unifying parts of Labour's history is a commitment to equality. It was there when we first stood for election something over a century ago, and it's been the thread that has run through successive defining Labour Governments. And we've seen equality in all sorts of different parts of the political agenda. We passed race relations legislation in 1968, and the Equal Pay Act in 1970, ensuring that equality is part of the social life of the United Kingdom, but also the economic life of the United Kingdom, and that equality is equality between peoples, equality between individuals, equality between communities, and I think we need to re-emphasise that sometimes today.
I have some real concerns about the inheritance tax that is being imposed on the farming community, and I think it is important that Labour stands up for those communities as well, and it's important that the Labour Party always speaks for the whole of the Welsh community. But when we talk about equality, we should also talk about national equality within the United Kingdom.
Gordon Brown discussed this in his report, which was published just before the general election—that there should be equality between the nations of the British isles, that Wales should have the same rights as other parts of the United Kingdom. That, again, is part of the Labour history. It's part of who we are. We stood on a platform a century ago of home rule all round. It's part of what the Labour tradition has been, and that means, I believe, that Labour in government should seek to deliver on equality for Wales as well as equality between peoples and between communities.
And that does mean that, in terms of rail infrastructure, Wales is treated the same as England, Scotland and Northern Ireland. That is absolutely right. The Crown Estate should be devolved to Wales. It's devolved to Scotland. If it's good enough for Scotland, it should be good enough for Wales. And justice and policing should be devolved as well. If it's good enough for England, good enough for Scotland, good enough for Northern Ireland, it should be good enough for Wales.
I have to say I agree with every word that Alun Davies has just said, and if Alun Davies agrees with every word that Alun Davies has just said, then there's absolutely no way that he would vote against Plaid Cymru's motion today.
This UK Government budget has become a real saga, hasn't it? It's become an omnishambles even before the budget has been delivered. It's fast becoming a u-turn budget. Scrapping the two-child benefit cap was out, now it's in. Hiking income tax was in, but now it's out. It's a bit of a hokey-cokey budget, isn't it, from a Government that's clearly in power, but totally out of control.
There's one other policy that I'd welcome a further u-turn on, of course, and that is on farm inheritance tax. I've stood up in this Senedd before on countless occasions to highlight the folly of the proposed changes and the adverse impact they will have. It's a policy that will do lasting harm to many of our small Welsh family farms. It represents a deeply unfair policy that targets the very people who feed us, who care for our land, who are in the front line of the fight against climate change and reversing the loss of nature. They sustain our rural economy, and, of course, they underpin the social and cultural fabric of our rural communities.
We know that most of our family farms are cash poor. Many of them live a hand-to-mouth existence. They don't have the capital to shoulder this huge tax burden. It'll force the sell-off of land to meet those tax debts, making, of course, their farms less viable and less sustainable as they pass the farm on to the next generation.
So, my message to Rachel Reeves is this: if you can u-turn on income tax, then you can u-turn on the family farm tax as well. It needs to be scrapped, and the UK budget next week is the perfect opportunity to do so—
Ken Skates. Ken Skates, are you intervening? I'll just pause a second and we'll wait for Ken Skates to be unmuted. We're having difficulty hearing you, even when you're unmuted, Ken, so we'll have to move on. Are you taking Sam Rowlands's intervention?
If you are putting our family farms in the same bracket as the mega-wealthy people, the 40 people who have the wealth of half of the population of this country, then that tells us more about the Tories than it tells us about anybody else. Whose side are you on? I think you've given the game away there, Sam. I think you've given the game away.
Right, where was I? Sorry, Llywydd. Plaid Cymru, of course, put a motion forward to the Senedd along the lines of exactly what the Welsh Affairs Committee at Westminster has said recently. We wanted to pause the family farm tax, subject to a proper assessment of the situation here in Wales and strengthening the data that's being used by the UK Government. Sadly, Labour Members here voted against, but I do welcome the fact that the cross-party Welsh Affairs Committee, which includes Labour MPs, has now reiterated our call, effectively.
They said that the UK Government has been unable to provide any clarity on the specific impact of its proposed inheritance tax reforms in Wales, or supply any Welsh-specific data, and that the change in policy may actually have a disproportionate impact on elderly farmers or those with terminal illness, who've arranged their affairs on the basis that their estates would not be subject to inheritance tax. They say the Government was complacent in the way it introduced such a major change and the absence of Wales-specific impact assessments means that a delay should be introduced, frankly, until the UK Government has done its homework, which is exactly what Plaid Cymru's motion called for back in March.
It's an unfair and regressive approach. We've been clear that a tax on extreme wealth, a 2 per cent tax on assets worth over £10 million, could raise over £20 billion a year. That's the fair and progressive way to fund public services and address inequality, not by targeting the small Welsh family farms, who we all know are the social, economic and cultural backbone of our communities the length and breadth of Wales. I would urge the Senedd to please support Plaid Cymru's motion today.
Debates like this one feel, to me, anyway, a bit like groundhog day. We've been here before. I feel, sometimes, that I could write the contributions of some Members beforehand. And that's no criticism of any Member here; the criticism lies at Westminster's door, because they don't listen. They didn't listen the last time we said all of this, nor did they listen the time before or the time before that. Whether or not Labour Members say it out loud and whether or not they hide behind their 'delete all' amendments, I'm sure that they wish as much as us, if not more than us, that Westminster actually listens to them this time.
In these debates, we have calls saying that the Welsh Government should do more and that this is again their last chance—I think I've heard that 'last chance' before today. Then I'm sure we would have the Welsh Government responding saying that they have stood up for Wales, with their Westminster colleagues, that they have put the argument forcefully to them, but then, for whatever reason, the Westminster Government has decided to ignore them.
I'm afraid that, whatever are the colours of the Welsh Government after the next election, there will still be similar debates in this place, with similar things being said and Westminster still ignoring the will of this place. And that is the crux of the issue. Because the Westminster Government, so far, has ignored cross-party support in Wales with many things in this motion, and I think that's the shame, really, that we see a 'delete all' without a real effort to engage with this debate properly. The Westminster Government ignores the clear majority of this place that calls for a fair funding model, that calls for increased borrowing powers and draw-down limits for the Wales reserve. They ignore calls for consequential funding owed to Wales from HS2 and the devolution of the Crown Estate. All of these has a clear majority in this place.
Alun mentioned earlier on in his fantastic speech, according to Llyr, Labour values. I think we can agree—[Interruption.] I did think it was good, Alun, yes. I think we can agree that Labour values are based on sharing wealth. We have a Labour Government in Westminster that has been redistributing money from the richest to the poorest. The only trouble is, we don't see that in Wales. They've considered reorganising council tax in England so that the poorer areas in England receive more cash, but they continue to calculate the money given to Wales as if it's simply an average of England. The fact we have more poorer areas in Wales that won't be funded like the poorer areas of England is something they must have forgotten in Whitehall. They've committed to English councils that funding will truly be based on need.
If rumours are to be believed, Rachel Reeves is finally considering what should have been her day-one priority in Government, namely lifting the indefensible two-child benefit cap. It should also have been top of the First Minister's mythical shopping list of calls on her partners in Westminster. And just an idea: that could have formed the basis of the Government's motion. Show us it exists.
We saw the contempt with which calls for fairness were treated—the calls that Rhys ab Owen has outlined—until we saw the heat from Westminster backbenchers, not many of the Welsh MPs among them, civil society and tireless grass-roots campaign groups forcing u-turns and climb-downs from such policies as the cutting of fuel payments for pensioners and welfare support for disabled people.
While we would, of course, absolutely welcome such a step on the two-child cap and benefit limit—something we've consistently and unrelentingly called for from the outset—it is shameful that it's taken this long for a Labour Government to actually act on reversing this most unjustifiable of policies, which punishes children for the size of their family. We heard Members, like Alun, waxing lyrical about Labour values. Values don't mean anything if we don't act on them, when you can't demonstrate them in your actions.
We heard, didn't we—we were assured, actually, by the Welsh Government—that an incoming Starmer Government would make eradicating poverty its burning mission. But far from being a burning mission that's been at the forefront of his agenda, Starmer's Government has had to be dragged, kicking and screaming, with his very leadership under threat to this point, where meaningful action on child poverty is now under consideration. And let's not forget, this is also a Labour Government that was prepared to knowingly push thousands more children in Wales into the throes of poverty through its proposed changes to the welfare system.
And I also wonder, how much longer will it take for the UK Government to unfreeze local housing allowance? In March the Welsh Government formally requested an uplift to the fiftieth percentile. Yet, within weeks, Westminster not only ignored those calls, but chose to freeze the allowance entirely. This decision is another cruel blow, driving Welsh households deeper into poverty. With Wales facing the fastest rising private rents in the UK, families are now worse off by an average of £1,900 a year. So, the so-called partnership in power that Wales was promised has delivered nothing but declining living standards. So, what happened, also, to the Chancellor's pledge that people would be, on average, £500 a year better off?
Next week I'm sure we'll get the familiar language from the Chancellor of 'tough choices'. But for people in Wales, those choices will show up somewhere else entirely. They'll show up in victims waiting years for justice, in Welsh women in English prisons, in the hundreds of thousands of our citizens with no access to legal aid or advice at all. As long as justice is reserved to Westminster, UK budgets will go on undermining justice in Wales. They have all the power; it is us that have to live with the consequences.
The alternative, as we were hearing earlier today, is a Welsh justice system with Welsh powers and fair funding built around prevention instead of permanent crisis. And the budget is being written, isn't it, against the backdrop of that crisis. Across Wales, Crown Court backlogs are at record or near record levels, with cases that should take months taking years. Wales locks up more people than anywhere else in western Europe and yet reoffending rates remain persistently high. A late, crowded, ineffective, broken system is not just failing everyone within it—defendants, victims—it's failing our communities.
And as far as justice is concerned, the budget will expose again the mismatch between power and responsibility in Wales. Spending on the Ministry of Justice has risen after a decade of cuts, but day-to-day spending is still well below its pre-austerity peak and far below what we would spend if we treated justice as a vital public service like health or education. Decisions taken for England and Wales produce no Barnett consequentials for Wales, even though our needs, from legal aid deserts to crumbling or non-existent infrastructure, are greater. When the UK Government increases spending on prisons or courts, Scotland and Northern Ireland see their block grants rise. Wales does not, even though our devolved services carry the consequences of the justice system's failures. Decisions like the rise in employers national insurance have opened a funding gap up for our devolved services. That means less money for housing, mental health, youth work, women's centres—the very services that keep people out of the justice system and help them rebuild their lives.
So, Westminster holds the justice levers while this Senedd and our people pick up the social bill. That's not coherent government, it's constitutional illiteracy. A better way forward for justice in Wales is not just possible, it's urgent. The Thomas commission and the Independent Commission on the Constitutional Future of Wales were absolutely clear, weren't they? Wales needs full devolution of justice and policing, with the funding to match. A justice system in Wales should be designed around our values and our laws, integrated with our health, education and housing systems, and held to account in this Chamber. That journey starts, maybe, with youth justice and probation and, following the abolition of the PCCs, should be joined by policing. It can extend to women's justice, problem-solving courts, a shift in investment from concrete and barbed wire to neighbourhood safety, early intervention and rehabilitation. A justice system in Wales should be something we do with communities, not to them.
Diolch yn fawr, Llywydd. I want to begin with an obvious point, because it echoes what Lee Waters said earlier on in this debate, which was—. I heard voices here in the Senedd just dismissing the point that he was making. But the obvious point is this: I'm the Cabinet Secretary for finance discharged with the responsibilities that are devolved to this Senedd, the things that we can actually make a difference to, the decisions that we make that make a difference in people's lives. There is nothing more important in that than the clear and direct responsibility that this Senedd has for passing our own budget.
That is the issue that preoccupies our public services and our third sector organisations, as Sioned Williams illustrated very vividly earlier this afternoon. But we've just spent an hour not talking at all about those responsibilities. We spent an hour talking about decisions that have never been devolved to this Senedd, and which not a single vote here can determine.
I want to answer as well the point that was made by Heledd Fychan in her opening remarks. Let me say to her: the notion that a Government would choose an opposition party debate as the vehicle for communicating our priorities to the UK Government is not simply fanciful, but it would actually be a dereliction of our responsibility to use all the avenues we have as a Government to make sure that our priorities are clearly communicated. [Interruption.] Let me tell you—. You asked in that contribution about what those priorities would be. Well, you've heard them many, many times, because you ask me, you ask the First Minister, you hear us set out our priorities, but if you want to know them, here are just a small number of them. I look to the budget next week to confirm that what was said in the comprehensive spending review will be still the policy of the UK Government, because that's the policy that would deliver £5 billion additional investment to Wales. That's what I want to hear in the budget, that that £5 billion more than we would have had, had Mr Hunt still been the Chancellor of the Exchequer—that that money is coming to Wales. I want to see progress made on the fiscal framework. That's one of the elements in the motion, which I'll come to in a moment, Llywydd. I want to see a budget that allows the work on Barnett reform to go ahead, and I want to see the two-child benefit cap abolished in that budget as well. But I don't need an amendment to an opposition party debate to convey those priorities to the Government.
What I'm talking down, frankly, is the ridiculous proposition that this Senedd isn't an appropriate place to discuss these things and get messages to the UK Government. You seem to be suggesting it's more appropriate for the First Minister to go to the Urdd Eisteddfod to say something, rather than actually on the floor of this Senedd. I find that a preposterous situation to be in, and it is frankly ridiculous that you're talking about a kitchen sink of a motion when your Government can't run a bath.
Well, let me just say—[Interruption.] More? Well, I'd like more of it, because, believe me, when it comes to being preposterous, the leader of the opposition has cornered the market in that for a very long time in his contributions on the floor of the Senedd. Of course it is right that the First Minister goes to the leading gathering of young people here in Wales to talk about a policy that has a direct effect on young people. There's nothing wrong, believe me, with doing that.
Now, there are other ideas in the motion, which may be the right ones, but which take much more than a resolution to get right. We debated, as Members have said, a 2 per cent wealth tax earlier this afternoon. I think we definitely learnt that there's more to that than putting it in a resolution. It requires hard work, and it certainly wouldn't happen for at least a number of years. The motion says that the Senedd should be enabled to set its own income tax bands. Why, I wonder, Llywydd, was that one idea plucked out of that much wider debate about the powers that the Senedd should have in relation to the fiscal responsibilities that we discharge? This Welsh Government has set in motion work to be led by Bangor University and the university in Edinburgh that will give us a resource to know what the right powers for Wales are. To pluck a single element out of that and throw it into the motion, as if that is the right way to get that to happen—I really am baffled by that idea.
There are other ideas in the motion. Again, they might be the right ones, but they just can't be done in the terms set out in the motion. The very first leg in the motion calls for a new funding formula for Wales. I was explaining earlier this afternoon how that is blocked by Plaid Cymru's sister party in Scotland. [Interruption.] This is nonsense. The idea that you can set a funding formula on a bilateral basis between Wales and the United Kingdom, when that decision has such a profound impact on the other two nations in the United Kingdom—it just never, ever, can happen. [Interruption.] You have to make the argument. You have to win the argument. You don't win an argument by putting something that you cannot achieve in a motion and think that that's the job already done.
Llywydd, I want to return to the point that I started with. The leader of Plaid Cymru has been touring the tv and radio studios, advertising his ambition to be the David Steel of the twenty-first century, preparing his troops for Government—and look where that original piece of hubris ended. Should that ever happen, what he and his colleagues will find is that being in Government is a good deal more difficult than writing Wednesday afternoon motions. When I chaired the Parliament for Wales campaign in South Glamorgan over 30 years ago now, I wanted a Senedd so that representatives of Welsh people could grapple with the matter that devolution, that great Labour project, has put in their own hands. Those who spend their time here in enthusiastic finger-pointing at others while failing to face up to the decisions for which we are all directly responsible really are stuck in the foothills of the journey to the challenge of making decisions not declarations, choices not condemnations, budgets for which we are responsible, not speeches about what others might do.
Thank you very much, Llywydd, and thank you to everyone for their contributions to this afternoon's debate. What we've heard today—and let us remind ourselves what we have on paper before us in our motion and the amendments to the motion—does speak volumes: carefully considered proposals by Plaid Cymru, requests that would put Wales on firmer foundations for the future, and an amendment from the Labour Government here that deletes all. It speaks volumes about the difference in ambition between Plaid Cymru and the Labour Party, and Plaid Cymru's willingness, as compared to Labour, to stand up for Wales. And whilst Plaid Cymru is making the case for fairness with other devolved nations, be that financial fairness or fairness in relation to powers, the Labour Party deletes all. We must bear in mind, of course, that they used to agree with Plaid Cymru on some of our demands until it became too inconvenient for the partnership in power between Labour here and Labour in Westminster.
I think it worth reflecting once again on the elements within Plaid Cymru's motion, which Labour oppose by removing them: a clear plan to develop a new funding formula for Wales; a u-turn on inheritance tax, which threatens the viability of family farms, yes, but also the viability of many, many family businesses the length and breadth of Wales—let's remember that too; full compensation for the Welsh public sector following an increase in employer national insurance contributions; the removal of the two-child benefit cap; full consequentials over HS2; and the devolution of powers over the Crown Estate, justice and policing.
Now, there can surely only be two plausible reasons why Labour has taken this approach to today's debate. It either doesn't believe in the contents of the motion, demonstrating, frankly, an abject failure to stand up for what is in the interests of the people of Wales, or it doesn't want to go too hard for fear of causing Keir Starmer a problem. Whatever the reason, there is an absence here of political backbone. If this Labour Government won't make a clear case for Wales and for the interests of the people of Wales in a motion to be debated in the Senedd, in the Parliament of our nation, then why should the people of Wales have any faith in this Labour Government any more? And these are issues, we remind you again, that could make a real difference to the people of Wales: the ability to invest in infrastructure, the ability to take control of justice, to make sure that we have all the tools at our disposal to give children the best start in life. These are wide-ranging measures that surely should reflect the values of this Labour Party, but clearly not.
I welcome the comments from the Member for Blaenau Gwent in standing up for those values. And like Llyr Gruffydd, I hope he will put his voting button where his mouth was and support this motion today. But all those comments, all giving a licence to a Labour outrider to say the right things does is highlight the timidity of this Labour Government. And for a Cabinet Secretary for finance to accuse Plaid Cymru of somehow showing moral superiority—I promise you, I would never dream to pretend that we could even dare match the moral superiority that Labour believes it has within this Welsh Parliament. I wouldn't dream of it. And to dismiss this motion today is to dismiss the validity of the Parliament in which this motion has been tabled today. He says this is a kitchen sink of a motion. We need a Government that throws the kitchen sink at all the challenges that we face as a nation, not a Government that has given up. And he compares our actions in these months leading up to the crucial Senedd election in May next year as me leading a team that is preparing for Government, and somehow saying that as an insult. Well, this is a Labour Government that clearly has reason to stop preparing for Government for May next year, because it can see the writing on the wall.
The proposal is to agree the motion without amendment. Does any Member object? [Objection.] There are objections. We will therefore defer voting until voting time.
Item 9 is next, the debate on the Standards of Conduct Committee report, 'Twenty fourth report to the Sixth Senedd under Standing Order 22.9'. I call on the Chair of the standards committee to move the motion—Hannah Blythyn.
1. Considers the Report of the Standards of Conduct Committee—Twenty Fourth Report to the Sixth Senedd laid before the Senedd on 12 November 2025 in accordance with Standing Order 22.9.
2. Endorses the recommendation in the report that a breach has been found.
3. Resolves that the Member shall be excluded from any Senedd proceedings under Standing Order 22.10(iii) for a period of 14 days, excluding days while the Senedd is in recess, commencing with the passing of this motion and ending no later than midnight on 3 December 2025.
4. Notes that the Member shall not be entitled to any salary from the Senedd in respect of the days to which point 3 applies, in accordance with Standing Order 22.10A.
The committee considered the report from the commissioner for standards in relation to a complaint made against Laura Anne Jones MS around the culture that she allowed in her office. The Standards of Conduct Committee gave the commissioner's report careful consideration, and our report sets out the committee's decision on the commissioner's findings and opinion on breaches of the code, and makes a recommendation as to the sanction that is appropriate in this case. We are recommending a sanction of 14 days based on the complaint received by the commissioner in April 2024. The facts relating to the complaint and the committee's reasons for its recommendation are set out in full in the committee's report.
The committee considers a breach of the code of conduct by any Member of the Senedd a serious matter, and we are clear that inappropriate and offensive comments have no place in our Senedd or society more widely. The conduct found in the commissioner's report fell far below the standards expected, and points to an office culture where there was little respect towards others, or any consideration of what may be found offensive. The committee welcome the fact that the Member and her staff have since undertaken diversity training since making these comments.
It is regrettable, though, Llywydd, that information about this complaint has been released to the media periodically during the course of the investigation. Media outlets also received the full commissioner's report in summer 2025, before the committee had had an opportunity to see it. These kinds of unauthorised releases of information serve to undermine the complaints process, and I would like to take the opportunity today to remind all Members and everyone that maintaining confidentiality goes hand in hand with confidence in the system as a whole.
Llywydd, the motion tabled invites the Senedd to endorse the committee's recommendation. Diolch.
Firstly, I'd like to put on record that I fully accept the standards commissioner's findings in this report, and thank him for a full, fair and thorough investigation. I welcome the clear and welcome conclusion of both the police and standards commissioner, clearing me of any fraudulent activity, with the police stating that there was absolutely no evidence of any wrongdoing.
As for the language that I regrettably used in the private WhatsApp messages, I would like to take this opportunity to apologise once again for that in this Chamber. I never meant to cause any offence, and would never have the intention of doing so. It is deeply regrettable that the message, and others, in which I aired my frustrations in private—which I've also apologised for, and do again—were leaked to the press and made public, where they had the potential of being misconstrued and hurt someone unnecessarily.
My staff and I, as you said, have all completed Senedd respect and conduct training, and I have actively been in contact and helped the community that is being referred to. I have reflected deeply on this, and I wholly accept the need to take greater care with my language at all times.
I also want to say how harrowing this nearly two-year investigation has been. [Interruption.] Sorry.
Sorry. I'm not afraid to put on record that this process, and the continuous leaks to the press, particularly trying to frame me for a serious crime, and stemming from this clearly malicious attempt to discredit me, has had a negative impact on my family, especially my children, as well as a hugely detrimental impact on my own health and mental health. The pressure of being portrayed in such a serious and distressing way, despite the clear findings that there was no wrongdoing, have taken a significant toll on me, which led me to try and drown out that noise and nearly take my own life a number of times. I hasten to say that I wouldn't wish what I've had to my experience on my worst enemy, and I hope, for your sakes, that this doesn't happen to any of you.
So, I will now try to turn this awful experience into a positive one, and I'll be campaigning hard to try and make positive changes to the system, to better protect Members, centred around Members being innocent until proven guilty—the foundation of which our country is founded on—getting the support they need, and helping to improve the process.
I will say that it does concern me that the committee, made up of Labour, Plaid and Tory Members, was allowed to add on to the end of a factual, thorough, nearly two-year investigation, with some non-facts, speculation and hearsay. Arguably, this shows that, perhaps, as other Members have argued, this part of the process isn't ideal, and could bring into question impartiality, which is perhaps a strong argument for a truly independent process going forward into the next Senedd. I would ask Members to reflect on the facts of the report today.
Anyway, I have let this nightmare consume my family and me for far too long. It's taken an enormous toll on me, and, regardless of how you vote, I will always be both apologetic for using that language and thankful for drawing a line under it. I will now be able to put my full focus into representing my constituents to the very best of my ability, which I will do in or out of this Chamber over the next two weeks and beyond, and I will also be putting my energies into my children, who have suffered enough. Diolch.
Diolch, Llywydd. I want to begin my acknowledging the Member's presence here today and her apology in this Chamber, and to reiterate—and I know that support has been made available—that the support is there, and support is available in this place for dealing with this situation. Many of us know what it is like to be in the eye of the media and under that scrutiny, and it is an incredibly challenging time.
But I would like to stress, Llywydd, and everybody here, that the work of the committee is never personal and it's never political; we are just following a process to the best of our abilities, and I would just urge Members to support the motion today. Diolch.
The first vote this afternoon is on item 5, the motion to approve the Senedd Commission's budget for 2026-27. I call for a vote on the motion. Open the vote. Close the vote. In favour 35, no abstentions, 13 against. Therefore, the motion is agreed.
The next votes are on item 8, which is the Plaid Cymru debate on the UK budget and devolution. First, I call for a vote on the motion, tabled in the name of Heledd Fychan. Open the vote. Close the vote. In favour 11, no abstentions, 37 against. Therefore, the motion is not agreed.
Amendment 1 is next, and if amendment 1 is agreed, amendment 2 will be deselected. I call for a vote on amendment 1, tabled in the name of Jane Hutt. Open the vote. Close the vote. The vote is tied. In favour 24 and 24 against. Therefore, I exercise my casting vote against the amendment, and the amendment falls by 24 votes to 25 against.
We will now move to a vote on amendment 2, tabled in the name of Paul Davies. Open the vote. Close the vote. In favour 13, no abstentions, 35 against. Therefore, amendment 2 is not agreed.
Therefore, the motion and the amendments to the motion have not been agreed, and nothing is agreed. That concludes voting and brings our proceedings to a close for today. Thank you.
During our evidence session, the Commission provided further details regarding its plan for the development of the Senedd's Cardiff Bay estate. Whilst we welcome the Commission's continued engagement on these issues, we would like additional clarity on the financial implications of the project. We also recommend continued updates on the project, particularly given its scale and profile, and have also sought clarity on the financial implications of changes to the Tŷ Hywel lease, and are glad that the Commission has responded positively to our requests.
Deputy Presiding Officer, maintaining staff morale and organisational resilience during expansion is crucial. Though we cannot comment on operational matters such as pay, we asked the Commission to provide an update once pay negotiations for 2026-27 conclude. Whilst we note the Commission's response that no further pay negotiations are anticipated, we would still expect the Commission to confirm when pay awards are agreed as it could impact the budget.
Finally, I turn to the other areas of scrutiny. The committee supports continued investment in cybersecurity and recommends robust information technology contingency arrangements. And we also note the Commission's cautious exploration of artificial intelligence and encourage continued work underpinned by strong governance. Furthermore, we look forward to hearing more about the Pierhead review project, and request further information on the feasibility of insourcing certain services, noting the Commission's recent in-principle approval of an outline strategy in this area.
Lastly, we welcome the social media monitoring pilot developed by the women's caucus in response to the concerns about online abuse and harmful content, and call on the Commission to evaluate its effectiveness and consider mainstreaming its support for Members and staff. This is a positive step towards improving digital safety and well-being, and we look forward to hearing more about this development once the pilot is finished.
Deputy Presiding Officer, I am encouraged by the Commission's response to these recommendations. I look forward to further engagement on these matters between now and dissolution.
Feedback from the Commission's recent well-being survey, I'm pleased to say, indicates that 86 per cent of staff are happy with their pay and reward package, and we need our staff to be happy. Given the positive findings, I believe the Commission could be a little bit stronger, though, in its dealings with the TUS. They should not be telling us, because we are slightly outside the normal civil service provision.
On the £2 million project fund, this largely funds infrastructure projects to maintain this current estate and IT systems, as well as other discrete projects that cannot be met from service budgets, such as specialist software replacements. The project fund has decreased by £0.5 million, and that was good news for us as a Commission.
Training and development is allocated as £312,000 for the next financial year. I would like to work with Commissioners going forward on how we can actually make the training budget far more effective. Vetting is the same amount; we haven't gone up on that for the next financial year, even though there is going to be a significant increase in their workload, so I wonder how that budget line remains the same.
I think a wealth tax of this kind can only be effective if implemented on a UK-wide basis. If it was introduced by a single nation, such as Wales, I think that it would not be so effective, because, obviously, individuals with significant assets could easily move or could relocate or restructure their holdings to avoid paying. A UK-wide approach would be consistent, close loopholes and prevent avoidance. Also, crucially, Wales has a much lower proportion of wealthy individuals and a low tax base. This, I think, does limit the revenue potential of a Wales-only wealth tax. The additional money brought in by a UK-wide tax could mean transformative investment in health, housing, education and efforts to eradicate poverty.
So, what are the disadvantages of a wealth tax? The most widely quoted are fears that the richest would leave the country. Research by Tax Justice Network looking at international examples of wealth taxes has found no evidence of the super wealthy leaving in response to tax reforms. In Norway, Sweden and Denmark, just 0.01 per cent of the richest households relocated after tax reform. And an analysis by Tax Justice UK said that there were an average of 30 news pieces a day last year raising the prospect of a wealth exodus during 2024, when talk was rife about a wealth tax. So, this was constantly in the press. However, a very interesting example is Massachusetts, where, in fact, there's been an increase in high earners since the millionaires tax was introduced in 2022, as reported by Boston.com. The Fair SHARE Act of 2025 was passed as a ballot question in November 2022 by state voters in favour of an additional 4 per cent surtax on income over $1 million, and the funds were to go directly to education and transport. And a spokesperson for Raise Up Massachusetts, which championed fair share in 2022, said that the positive impact of regressive wealth taxation cannot be overstated. In the UK, the poll mentioned earlier by Survation revealed that nearly 60 per cent of UK millionaires think it's unpatriotic to leave the country when asked to contribute more.
So, I would make the case for a UK-wide wealth tax here today. I hope the Cabinet Secretary, when he makes his contribution to the debate, will be able to tell us that he will urge the UK Government to bring in such a tax, because surely, the only purpose of us being here is to make a better life for our people in Wales, and the only way that we can do that is to ensure that we're able to finance all the services that we need. I think that the small number of people who would be asked to contribute the most are, from the evidence we've seen—many of them are very willing to do that. And I think we should take this step here today and speak in support of a wealth tax. Diolch.
We've also heard arguments being made against the case for equalising capital gains tax with income tax, which would, again, affect a very small proportion of the population. Indeed, far from stimulating entrepreneurship, in terms of the rationale for lower capital gains rates, the evidence shows that the current system is an ineffective tool for stimulating investment. Why, therefore, have none of the London-based parties that have been in charge in Westminster tackled this so far? And is there genuine hope for change, or, alternatively, is it not time for us to get the relevant powers here in Wales and establish a taxation system that works for our country and our people?
I think it's completely clear by now that Westminster Governments of every stripe do prioritise and have prioritised satisfying the rich rather than tackling inequality. And that's why Plaid Cymru is very clear: there is a strong moral and economic case for introducing wealth taxes, and, given the dire state of public finances, any Government that is serious about tackling these challenges would urgently examine the feasibility of such proposals and look at what we can introduce.
As I said, the taxation system isn't working at present. The economy is not working for everyone. We need solutions. Carrying on as we are is not going to bring those solutions.
I want to pause for a moment, though, to understand the barriers to wealth taxation and the attempts that have been made in the past. It is true that wealthy taxpayers have access to specialist advice that allows them to reduce, often significantly, the tax they pay by exploiting loopholes and preferential treatment of certain capital income. Wealth is mobile, even if individuals are less so. Wealth can be moved between different forms of asset, it can be moved across borders within and between countries, it can be disguised in complex legal structures, and, amongst the less scrupulous, it can be hidden in offshore arrangements designed to evade the obligations of citizenship. That is why those who advocate some forms of wealth tax, and that includes the Patriotic Millionaires UK, recognise that a scheme designed of the sort that they advocate would be a task of several years. It's not a policy that is going to produce large sums of money in the short run, because designing a wealth tax has to be done carefully and in order to make sure that you don't have unintended consequences.
To take the most serious question: what exactly is to be included within the definition of wealth? Even liquid assets can be debated if, for example, they are thought of as deferred savings in the form of pensions. Are pensions to be included in the £10 million that the Patriotic Millionaires UK suggest? And as for illiquid assets, does wealth include a person's primary residence? In almost no instances that I know of of successful wealth taxes is that the case. What about those who are asset rich but cash poor—not simply the fabled elderly widow living alone on a fixed income in a mansion, but people who own businesses, who may own a lot of assets, but where those assets are primarily productive capital, plant and machinery, which can only be realised through sale or closure? And what about gifts? Is there any distinction to be drawn between wealth that has been created by initiative and hard work—merit capital, as it's sometimes called—and wealth, which, as Heledd Fychan said, is simply a matter of good luck, something that has fallen into somebody's lap through a legacy or because an asset has appreciated in value because of the actions of others?
The point I'm trying to make, Dirprwy Lywydd, is that this is a complex matter, even for those of us who believe in the principle. Wealth comes in many forms: stocks of wealth, income derived from wealth, inherited wealth. If we want a wealth tax, though, preparation for it should begin now. Otherwise, complexity will always be the enemy of progress.
I want to focus, in the last part of what I have to say, Dirprwy Lywydd, on two forms of wealth taxation that can, I believe—
In 1990, the UK had 15 billionaires. We now have 156, with a combined wealth of £681 billion. Twenty-five per cent of the wealth is not earned wealth, but inherited wealth. Twenty-five per cent of the wealth is made from extractive industries—oil, gas, and also from gambling. Wealth from property and inheritance has soared, increasing rents and property prices. And this is also reflected globally, where 10 per cent of the world now own 60 to 80 per cent of the entire global wealth of the world.
In the UK, the wealth gap has grown by 50 per cent over the past eight years. As the London School of Economics and Political Science and the Fairness Foundation state, in Britain,
'wealth is ever more concentrated in the hands of the few...the sheer size of the wealth gap poses major risks to our economy, our society, our democracy and our environment'.
So, in summary, wealth inequality drives poverty. It also distorts democracy. The rich and corporations, through their influence in the democratic system, perpetuate the mythology of trickle-down wealth and a false dependency on excusing the wealthy from any responsibility for taxation and the well-being of society.
Aneurin Bevan said that we knew that without concerted effort and meaningful action, inequality will continue to widen. So, to action. We need a fair tax system and a rebalancing of income tax in favour of the poorest in society. We need to address wealth inequality and imbalance across the nations and regions of the UK. This must mean a fairer system of inheritance taxation. Ordinary working people don't pay inheritance tax because they don’t own enough wealth. We need a fairer capital gains tax system. [Interruption.] Sorry?
Jane Dodds mentioned the Patriotic Millionaires, and we met them in Newport at the beginning of the week. I spoke to one of them, a woman with family connections in Wales, in the south Wales Valleys. It was just so good to hear somebody who has done really well in life wanting to give back, wanting to give more back, understanding the responsibility it gives you, if you've been able to amass considerable wealth, and knowing that it's society as a whole, in general, that's enabled you to make that progress, and then to want to feed that back into our public services. She explained it to me how she felt very well the commitment that she feels, not just on a personal level, but to wanting to be part of a campaign, a growing campaign, in the UK, that will deliver that wealth tax to the benefit of absolutely everyone and the crucial public services that we all rely upon. She mentioned starting off with this idea of 2 per cent on assets worth over £10 million a year, because she thought that was understandable to people, it was a good starting point. It would only affect 0.04 per cent of the population, and, on that basis, many people would see the sense of it, the justice of it, and would support it. And then, once we get that in place, we consider how we go forward from that point.
I just think this is such an important debate today, if we want to live in a fairer world, a fairer UK and a fairer Wales. Overwhelmingly, I think, the contributions that we've heard, the statistics that we've heard, the facts that we've heard, the moral imperative that people have set out show just how important this debate is, how much it means to all of us and how much it would deliver, as a starting point, for the sort of Wales, UK and world that we would all like to see and we should certainly all want to see.
Yes, a wealth tax could, if done properly, improve the lives of everyone in our society. And yes, to Julie's important question, it will work for Wales. Diolch yn fawr.
We have the resources to change this. We are the fifth richest country in the world and research from King's College shows that a modest 2 per cent wealth tax on those in The Sunday Times rich list—and I was glad to hear of Sioned's family reading that—could have raised £160 billion since 1994. We've already missed our chances, so let's not miss it right now. We can't justify a system where inherited wealth attracts lower tax than wages through care, graft and dedication. We have to change now. As colleagues have highlighted, a fair, modern tax system is essential for a thriving, innovative economy. And evidence from the Fairness Foundation and the International Monetary Fund shows that widening wealth inequality harms economic growth, because when people are unable to fulfil their potential, both society and our economy lose out. And we must remember that strong public services are not just a moral good, they are fundamental to successful businesses. Polling from the Trades Union Congress found that 94 per cent of business leaders believe that public services are vital to the success of the UK economy and over 80 per cent say they're essential to the success of their businesses.
Dirprwy Lywydd, to finish, the evidence is clear. Public support, we've heard, is overwhelmingly supportive of this approach. Even the wealthy themselves are calling for reform. The moral case is unanswerable. This isn't about taxing more, it's just about taxing better—taxing fairly, rewarding work, investing in the next generation, because, fundamentally, we have to, as the Senedd, consider the youth of tomorrow and what we are handing on to the next generation. Will it be a Wales where talent is limited, where hard work goes unrewarded, where inherited wealth is protected, or a Wales where every child has a genuine opportunity, where enterprise is encouraged, fairness is embedded and young people can afford homes and build lives of dignity? I'd like to summarise with a quote from Adam Smith:
'What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.'
A wealth tax is a promise of a fairer, more prosperous Wales, a Wales that works for everyone, not just the fortunate few, a Wales that backs ambition and supports community in equal measure. Diolch yn fawr iawn.
Finally, Plaid's motion fails to acknowledge the practical realities of governing. Radical independence or aggressive devolution come at a price, and that price falls on the taxpayer. [Interruption.] Sure.
The reality is that if rail were fully devolved to Wales, it would be reasonable to assume that the Welsh Government would be entitled to a block grant adjustment of approximately £1.1 billion per annum, based on current DfT spending, restoring that Barnett comparability factor to over 90 per cent. If we don't see movement in that direction, that would be an utter betrayal of the Senedd, an utter betrayal of devolution, and an utter betrayal of our constituents.
Now, as we've rightly pointed out in this debate, as Heledd Fychan has pointed out at the start of the debate as well, this is Labour's last chance to show what the change promised during the general election actually means, because when it comes to transport, realistically, we've seen very little change.
If people are saying that Wales, as a part of this United Kingdom, shouldn't have the same equality as other parts of this United Kingdom, then, frankly, you're not much of a unionist, are you? You're not much of a unionist when you say that your country isn't worth the same intrinsic value as another part of this UK. That means that the financial frameworks and Barnett should also be reformed. Because we know, and all of us know this, that the UK Government wouldn't treat Scotland or Northern Ireland in the way that Wales is treated in terms of Barnett. If there was a serious issue, as there is for Wales, in Scotland, it would have been addressed. It has been addressed in Northern Ireland.
If we, again, believe in equality, equality across the United Kingdom, then we should argue for these things for Wales as well. I hope that the UK budget coming next week will begin to address these issues. I hope as well that in responding to the debate this afternoon, the finance Cabinet Secretary will begin to address how the Welsh Government intends to take these things forward, because I do not believe that these are isolated examples or issues that should be taken in isolation.
They are issues that affect Blaenau Gwent, they're issues that affect all of our constituencies. They're issues that affect all of our constituents, our ability to build infrastructure, our ability to deliver services, our ability to take care of some of the poorest and most vulnerable people in our country. Social justice demands equality, and if it's good enough for the rest of the UK, it should also be good enough for Wales.
They've taken a similar approach to the NHS in England, reallocating £2.2 billion to the areas of greatest need. But under the current funding formula for Wales, we will receive no benefit. The Westminster Labour Government can say that they are operating on the principles of getting rid of the gap in resources between the most deprived and the most well-off areas, but they must be honest that that only really applies to England. It doesn't apply to Wales, as long as they treat us as an average of England, rather than looking at genuine need and deprivation. It doesn't apply to Wales, as long as they ignore the fact that our population is, on average, older and sicker and many of our young people are leaving to find jobs elsewhere. It will appear to Welsh voters that the Westminster Labour Government is happy, unfortunately, for Wales to remain as the poor relation.
The UK Labour Government's choice to pay in full the increase in national insurance payments for public sector workers in England, but not for Wales, is another example of this. I think this signals to the Welsh people that they are being ignored, that democracy isn't working properly in Wales. The democratic mandate for change in Wales has been ignored by the UK Government and we are left in Wales with a catch-22. On the one hand, the principles of redistributing wealth and investment to the poorest have so far not applied to Wales, and on the other hand they ignore our calls for the power and the money to come here to Wales and allow us to sort the problems out ourselves.
Hopefully, this budget will move things forward, because the Welsh call for fair treatment will not go away. The only question is how long it will take for the democratic will of the people of Wales to be actualised. Because if these requests are not taken seriously—and we're making these requests to improve the lives of the people of Wales—if the people of Wales feel that they've been ignored and taken for granted, the alternative could be far worse than we imagine. Diolch yn fawr.
The Chancellor shows no inclination either to fix our broken tax system and pursue a bold path of redistribution through measures such as wealth taxes. Instead, she continues to desperately scramble for loopholes in the arbitrary constraints of her own fiscal rules, all of which has done very little to move the needle on growth, while very firmly setting the clock back on economic inequality. And as we heard repeated many times in the debate we had on wealth tax this afternoon, growth in and of itself doesn't mean economic fairness, because the economic consequences of growth don't spread evenly without the right intervention. And such a measure would bring concrete and specific benefits to Wales, where more of our population feel the detrimental effect of socioeconomic inequality, compounded by the financial inequality of our very nation, underfunded by way of an unequal union and consecutive Westminster Governments of all colours unwilling to address the real-life consequences of that inequality.
Contrary to the discourse we hear on things like wealth taxes being a push factor for the wealthy to move abroad, there is significant appetite amongst higher earners to shoulder a fairer share of taxation. And a recent survey by Patriotic Millionaires suggested that 65 per cent of UK millionaires would welcome a tax on wealth to enhance public spending. We've also heard similar arguments being made against the case for equalising tax on capital gains earnings with income tax, which again would affect a minuscule proportion of the population.
It's a damning indictment of the evaporation of Labour's progressive credentials that even considering proposals of this kind have been dismissed out of hand. We heard this afternoon the Cabinet Secretary for finance state unequivocally a moral case and an economic case for introducing taxes on wealth. And Plaid Cymru agrees that any serious Government should be exploring the practicalities of such proposals as a matter of urgency.
So, will the clamouring turn into calling? And will that calling turn into voting for a motion, so that we as a Senedd, with one voice, can say, 'We want better for our nation'? It is disappointing as well to see the Lib Dem Member, who intervened and talked so much for many minutes, almost an hour, I think, on that debate this afternoon, isn't here either to voice her support for a wealth tax by voting for our motion. So, we need to put our money where our mouth is, quite literally, and we need to do better for Wales. Diolch.
So, when the Chancellor delivers this month's budget, we, from a justice perspective, in Plaid Cymru will be applying three tests. Does it invest seriously in clearing the backlog in our justice system and supporting victims? Does it treat Wales fairly in funding, recognising the costs that fall on devolved services? And does it set out a credible route to devolving justice instead of kicking that question into the ever-lengthening grass?
If you want justice in Wales, you need justice for Wales, power aligned with responsibilities, budgets aligned with need and a system built not on crisis management, but on care, community and prevention. Each of those pillars now needs a firm financial foundation, not short-term fixes, but real, lasting investment. It's time that Westminster delivers on these modest demands—this is not radical—and they cannot be allowed any longer to shirk their responsibilities.
Indeed, this is a motion—this kitchen sink of a motion—that is, if not designed to divide, inevitably has that effect. I've heard a series of contributions from Plaid Cymru, very often framed in that spirit of high moral superiority that Plaid Cymru Members are able to effortlessly summon up in our debates. This ought to have been a debate where we came together to make our case to the UK Government, but this is a motion absolutely designed to make sure that that cannot happen, because in its potpourri they have poured some things with which we do agree and other things with which we cannot agree. Therefore, it's designed to have the opposite effect that they claim that they set out with.
Now, let me make it clear that there are many things in the motion with which we do agree. Uprating the fiscal framework—we've heard that endorsed again by the Conservatives, as well as other parties here this afternoon. I said earlier on that abolishing the two-child benefit cap is certainly the policy of three parties here, but it can't unite the Senedd because we know there's one party that is adamantly opposed to that. But it's definitely the policy of this Labour Government, promoted by the First Minister, when she made it the centre point of her visit to the Urdd Eisteddfod in May of this year. It led the news across Wales that day. That's how you draw attention to the things that matter to you, by making sure you take the opportunities that you have to publish the things that you want to see, to argue for the things you want to see, and here it is. [Interruption.] Yes, the Urdd Eisteddfod—the Urdd Eisteddfod. I hear the leader of the opposition appear to talk down one of the major—[Interruption.] Yes, please—why not have a go?
It is becoming clearer than ever that the people of Wales are no longer willing to be cast aside by the indifference of UK Governments, be that Labour Governments or Conservative Governments. And it's clearer than ever that they're no longer willing to support a Welsh Labour Government who've failed to support them time and time again. We were promised a partnership in power, weren't we? But, in many ways, people have become more, not less, frustrated since the election of that Labour Government in the summer of last year.
Because promise and because hope have been dashed, we need a Welsh Government that is ready to offer new leadership for Wales, a Welsh Government that will be uncompromising in standing up for Wales on issues that currently leave us disadvantaged or short-changed. Plaid Cymru offers that new leadership. And we want to have a constructive relationship, of course, with the UK Government, but working with that UK Government with no question whatsoever over where our loyalty lies. It is always country before party.
Now next week's autumn budget is rapidly approaching, with the offering for Wales continuing, it seems, to appear woefully inadequate, as has been the case under this UK Labour Government so far. People in Wales will rightly feel frustrated that another opportunity will be missed to take the action that is so desperately needed to improve their lives, and that frustration will be reflected. All the evidence suggests—from the polls to Caerphilly, all the evidence suggests—that that frustration will be reflected at the ballot box next year. The choice, of course, is what future the people of Wales choose. And Plaid Cymru is all about offering that positive future instead of the alternative, division. Plaid Cymru's motion today is an opportunity to put down a marker about the kind of pro-Wales, Wales-focused Government that we can get. And it raises the bar on what Wales expects from Westminster, if indeed there is any belief left that Westminster does work for Wales. So, support this motion today.
How these votes work: the Senedd first votes on the motion as written. If that fails, it votes on each amendment in turn, then on the motion with any agreed changes.