Support for the Welsh Economy and Funding for the Devolved Institutions

That, for the year ending with 31 March 2023, for expenditure by the Office of the Secretary of State for Wales:

(1) further resources, not exceeding £9,799,643,000, be authorised for use for current purposes as set out in HC 396 of Session 2022–23,

(2) further resources, not exceeding £16,000, be authorised for use for capital purposes as so set out, and

(3) a further sum, not exceeding £9,799,655,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(David T. C. Davies.)

The debate will be opened by the Chair of the Welsh Affairs Committee, Stephen Crabb.

It is a pleasure to open this estimates day debate. We go from having debated one of the largest items of expenditure on the Government’s books in the previous debate to debating perhaps one of the smallest of the Whitehall estimates. I hope that today’s debate will provide a useful opportunity for a wide-ranging discussion about the current challenges facing all of our constituencies in Wales and the steps being taken by the UK Government and also in Wales by the Welsh Government to address them.

One of the things I have become more convinced about, the longer I am a Member of this place, is that we need to spend more time debating Welsh matters and not less. We have our annual St David’s day debate and we sporadically have the opportunity upstairs to have a Welsh Grand Committee, although that is perhaps a bit too knockabout for the taste of some Members, so using the estimates day route to secure a debate is useful and I am grateful to see other Welsh Members participating today. I am particularly grateful to those colleagues who supported the bid application.

Apart from the debates that the right hon. Gentleman has mentioned, there is also the work of the Welsh Affairs Committee, of which I was a member for many years. I understand that the Committee published its report on the benefit system in March. Has he had any response from the Government to that report?

The Government have responded to the report, and we will be publishing our response to the Government’s response shortly. I would encourage the hon. Member to keep a lookout for that.

Our report into benefits in Wales is one of three of the Committee’s reports that has been flagged on today’s Order Paper as being relevant to this debate. We could have flagged other reports, as the Committee has done a lot of work that is relevant to the broad discussion that we want to have this afternoon. We continue to be a very busy Committee, and we cover a lot of ground. I am grateful to colleagues for their regular attendance at the Committee and for their spirit and enthusiasm. I think we do some good work as the Welsh Affairs Committee.

I should also say how grateful we are to the Wales Office Ministers, who give us a lot of their time providing oral evidence. We are also grateful to Welsh Government Ministers—not just the First Minister but other Members of the Welsh Government—who have no obligation to appear before our Committee but who nevertheless choose to do so. That all helps to make the inquiries that the Committee undertakes particularly useful.

Turning to the specific estimate in front of us, I would encourage Members to look at the very helpful House of Commons Library note that has been produced, which explains in much more detail, and far more effectively than I could, how the estimate has been compiled. It also outlines the factors underlying some of the changes, compared with last year’s spending plans. Clearly, we are continuing to go through an extraordinary period, economically, in the life of our nation, and that is very much the backdrop to today’s debate. If this debate had happened 18 months or two years ago, we would have been debating the impact of the pandemic. We are now in a new phase, and the cost of living is the No. 1 issue facing many of our constituents, as the previous debate highlighted. Personally, I am extremely supportive of the measures taken by the UK Government to support families through the cost of living crisis. The measures that the Chancellor of the Exchequer brought forward were broadly in line with what many of us had been calling for. They represented a major intervention that has been broadly welcomed by many poverty-fighting charities and campaign groups.

The right hon. Gentleman mentions levelling up. I note what the Government are doing in terms of the funds that are coming to Wales, but there is a shortfall of nearly £1 billion compared with what Wales would have received. In 2019 the Government committed as a minimum to match what had been provided to Wales under EU structural and investment funds. That commitment has not been met; we have seen a shortfall in both rural funding and other funding. Does the right hon. Gentleman agree that that is a major problem when we look at Wales’s future challenges and structural needs?

We have discussed that very point at the Select Committee; indeed, just a fortnight ago, the Secretary of State was questioned on it by colleagues on the Committee. We know from previous arguments that it is not always easy to pinpoint the exact details of the totality of spending in Wales, but the general argument that Wales does not receive a “fair share” of funding is a constant theme in Welsh politics. I imagine that will continue long after we have all moved on from this place.

I will give way to the right hon. Lady and then to the hon. Gentleman—I am sure I have just opened the door to a whole host of problems.

I am grateful to the right hon. Gentleman for his work on the Welsh Affairs Committee and for bringing the debate forward. We are talking about levelling up. One issue is that the Crown Estate is devolved in Scotland but not in Wales. Does he agree that, with the Celtic sea floating wind investment in south-west Wales in the offing, Wales needs the means to equip itself to grow and not just to be dependent on handouts from Westminster, which is one of the ways that levelling up is explained? Consistency between Wales and Scotland would enable Wales to grow its own economy and, most significantly, the local supply chains that would go alongside that sort of investment. Wales could manage that most effectively for Wales’s need.

I do not agree that devolution of the Crown Estate in Wales is necessary to achieve the birth and success of a floating offshore wind industry, which so many of us want to see. We have a fabulous opportunity opening up in the Celtic sea, as confirmed by the Crown Estate today. There are lessons that can be learned from the ScotWind process, but for me, devolution of the Crown Estate is a red herring.

My bigger concern is that the way the Government have structured all these different funds that are supposedly for levelling up is based on a competition. I think that leads to project-itis, with people putting together projects to fit the schemes, rather than a strategic look at what is really needed across some of the poorest communities in south Wales. For my own money, the single most important thing that we could do is try to enable far more people in the valleys to build up their own businesses from scratch until they employ perhaps five or 10 people. That is the way we will really get people into meaningful work.