Y Pwyllgor Craffu ar Waith y Prif Weinidog

Committee for the Scrutiny of the First Minister

31/03/2022

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

David Rees AS Y Dirprwy Lywydd, Cadeirydd y Pwyllgor
Deputy Presiding Officer, Committee Chair
Delyth Jewell AS Yn dirprwyo ar ran Llyr Gruffydd
Substitute for Llyr Gruffydd
Jack Sargeant AS
Jenny Rathbone AS
John Griffiths AS
Russell George AS
Sam Rowlands AS Yn dirprwyo ar ran Paul Davies
Substitute for Paul Davies

Y rhai eraill a oedd yn bresennol

Others in Attendance

Andrew Jeffreys Cyfarwyddwr, Trysorlys Cymru, Llywodraeth Cymru
Director, Welsh Treasury, Welsh Government
Mark Drakeford AS Prif Weinidog Cymru
First Minister of Wales

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Aled Ap Neill Dirprwy Glerc
Deputy Clerk
Alun Davidson Clerc
Clerk
Božo Lugonja Ymchwilydd
Researcher
Gareth David Thomas Ymchwilydd
Researcher

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Cyfarfu'r pwyllgor yn y Senedd a thrwy gynhadledd fideo.

Dechreuodd y cyfarfod am 13:02.

The committee met in the Senedd and by video-conference.

The meeting began at 13:02.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Good afternoon. Can I welcome everyone to this afternoon's meeting of the Committee for the Scrutiny of the First Minister? Can I remind Members the meeting is bilingual, and therefore the option to have simultaneous translation from Welsh to English is available to you? This meeting is hybrid, and it will be treated equally—Members in the committee room and Members who are joining us by video. Under the rules, we'll ensure that we treat everyone equally and fairly. If a Member, unfortunately, has technical problems, can they contact ICT straight away so we can get those resolved and make sure Members are able to participate as fully as possible? Can I remind you, please, all, to switch your mobile phones off, or any other electronic devices that will interfere with the broadcasting equipment? The meeting is broadcast live. And in the case of a fire alarm here in the Senedd, those Members present can, obviously, follow the instructions of the ushers to a safe place and, as such, the broadcast will be suspended whilst we are out. I think that's now the business of the day and all the housekeeping done.

We've received apologies from Paul Davies and Llyr Gruffydd, and can I welcome Sam Rowlands who's substituting for Paul Davies and Delyth Jewell who is substituting for Llyr Gruffydd? Are there any Members who wish to declare an interest at this point in time? Jenny.

I've got interests in Awel Aman Tawe, in relation to the energy issue.

2. Costau byw
2. Cost of living

Therefore, we move on to the main substance of our business today, and that is the scrutiny of the First Minister. Members will be aware that we take this in two sessions. The first session is on a thematic basis and the second session will be on more topical matters. Let's move to the first session, and the thematic basis of this session is the cost-of-living crisis that is currently being faced by citizens in Wales. I'm pleased to welcome the First Minister to the meeting this afternoon. First Minister, would you like to introduce the official with you today?

Gadeirydd, diolch yn fawr. Gyda fi y prynhawn yma yw Andrew Jeffreys, cyfarwyddwr y Trysorlys yma yn Llywodraeth Cymru.

Thank you very much, Chair. So, joining me this afternoon I have Andrew Jeffreys, who is the director of the Treasury here at the Welsh Government.

Thank you, and welcome, Andrew, to the meeting. Can we, then, go straight into questions? I'll open the questions, First Minister, on the more generic picture. Clearly, the cost-of-living crisis is fluid; we are seeing changes on a daily basis. Can you perhaps give us some guidance as to what strategy the Welsh Government is going to be adopting to ensure it is able to tackle the crisis, particularly with the fluidity we are seeing at the moment?

13:05

Yes, thank you, Chair. So, the strategy can only be understood, of course, in the context, and the most recent context of what is, as you said, a very fluid situation was set out in the spring statement last week and the report of the Office for Budget Responsibility that informed the Chancellor in the decisions he made. And here's the context within which the Welsh Government's approach is having to be developed, because the OBR said that, compared to its last forecasts, it now sees inflation doubling and growth halving; that the tax take will be the highest since 1982-83; that inflation will be the highest since the 1970s; that absolute poverty would rise by 1.3 million adults and 500,000 children; and that working-age incomes will be 2 per cent lower at the end of this Parliament than they were at the start of it and 6 per cent lower amongst the lowest earning households. Now, the impact of inflation is at the root of much of the cost-of-living crisis, but it creates a real challenge for public services as well, because in the spring statement, the Chancellor announced no uplift at all for public service budgets, and the comprehensive spending review allocations that the Chancellor announced in the autumn are now worth £600 million less in real terms to us than they were on the day that he announced them, because of the inflation forecasts that you see set out in the OBR report.

So, that's the context in which our strategy has to be developed: increasing pressure on household budgets and less real-term money for the Welsh Government to respond to them. So, what we do is we try and use all the different levers that we have across the range of Welsh Government responsibilities to bend the programmes we have to make a difference to those people who need the difference the most, whether that is in the specific allocations that you've seen us make in recent weeks—£340 million in a package of help to people through council tax, through the winter fuel scheme and so on. But also, as you would've seen the week before last, I think, now—and it's an illustration only—the decision of the education Minister to provide a £100 addition to the pupil access grant, the pupil development access grant, to help families with the cost of the school day and the school year. So, that's an example of bending existing programmes so that they can do more where we can to help households faced with declining real incomes.

Thank you for that introduction. Clearly, as you say, the context needs to be applied, and we've identified some areas, such as energy prices and fuel, economic impacts, poverty, child services, housing and mental health issues. So, there is a collection of aspects to that context, which we want to explore with you. I'll ask Delyth Jewell now to lead off on perhaps the area of energy prices and fuel costs.

Diolch, Gadeirydd, a Phrif Weinidog, prynhawn da. In this area, focusing particularly on energy prices and fuel costs, sticking with the spring statement first, if I may, the picture that you've just been setting out, First Minister, is incredibly bleak and the Wales Governance Centre has calculated that, after these announcements, the average Welsh household is still going to be £315 a year worse off and people on the lowest incomes are going to be affected disproportionately. Focusing on energy prices and fuel costs, what impact do you think that any mitigations that have been announced in the spring statement, as well as any gaps, as you say, in the mitigations, will have? And what do you think that the Welsh Government will—? What do you intend to do to try and help households further?

Well, Llywydd, I thank Delyth Jewell for the question. The spring statement offered nothing to households in relation to energy prices. The Chancellor had previously announced measures, but there was nothing additional in the area of energy in the statement last week. I think that was surprising, Dirprwy Lywydd, on two fronts. There was nothing, as was trailed quite forcefully in advance of the statement—there was nothing on energy security. So, we were expecting a statement on energy policy from the UK Government, to go alongside the spring statement, because at the heart of energy pricing is the instability of energy prices when you're exposed to global markets in the way that we are. So, the starting point, in a way, for the Welsh Government, in relation to the prices that households have to pay, is that we need a new approach to energy security in the United Kingdom, and from our point of view, that absolutely needs to focus on the renewable energy agenda. We need to be in a position where the United Kingdom has a degree of energy security that does not leave us exposed to the volatility in energy prices that then feed into the household bills that will be faced by people here in Wales. And it was, I think, disappointing, but also surprising, given how heavily it had been trailed, that the Chancellor had nothing at all to say on that matter in the spring statement. He then had nothing further to say on support for people with household bills. So, what people are left with, at the UK level, is the £150 for households in relation to the council tax. As the Member will know, we have mirrored that in Wales, but we've gone further than that in Wales, because you will get the £150 in Wales, whether you actually pay the council tax or not. So, if you are a recipient of council tax benefit in Wales, to the extent that you don't pay towards the council tax, you will still get £150 through our scheme where you wouldn't get that across our border.

The other part that households are left with in Wales is, in effect, a deferred payment scheme. You will pay less in your bill from October, but you'll pay it back again once the Chancellor believes the emergency is over. Well, I think it's hard to see where the optimism comes from that people will be in a position to start paying that money back within the time frame that he has set out.

What we have done, as Members will know, is that we have introduced our own household fuel scheme. Nearly 200,000 households will have applied for help through that scheme, and nearly 180,000 households will benefit from it. We were able to double the amount from £100 to £200 late in the financial year, and we've made a commitment to make a similar payment as we go into the autumn and winter that's to come. So, that's an example of what we have done directly in the field of helping people with energy prices. There are other things that we are doing as well, Chair, for example in extending the scope of credit unions, to be able to offer people facilities through which they will be able to spread the payment of bills and to draw on the sorts of saving and loans facilities that the credit union movement is able to provide.

13:10

Thank you for that, First Minister. Do you think that there's more that could be done to help people who are not on means-tested benefits, and even people who do qualify—? This is something that is likely to come up in far more detail later on in our session today, but focusing on energy costs help and fuel, there may be some people, or there will be many people, who qualify for some of the support that's available but they don't know that it's available. Do you think that more could be done to try and plug those gaps, again specifically looking at energy costs and fuel?

I absolutely agree that not all households in Wales get the help that's already available to them, and there's more that could and should be done to help with that. There are a range of ways in which that could be done, Chair. One is by some of the efforts we are making, through take-up campaigns, to make sure that people hear about the help that's available—to get the help you need in order to claim the help that you need. You know, the household that's most likely to be not claiming benefits in Wales, benefits to which they are entitled, is a single-person household of a woman aged over 75. And that household could be losing out on quite a lot of help that would be available to them, but they either don't know about it or they're fearful of claiming it because they fear they could be worse off if they declare their circumstances to the Department for Work and Pensions. We have a single advice fund, we have strengthened that recently. We have an advertising campaign currently to help people to know the benefits to which they are entitled.

But we could do more with greater automaticity in the system as well. We have been working with local authorities to try and streamline some of their systems so that if you qualify for one form of help, you automatically qualify for other forms of help. One of the downsides of the move to universal credit is that, previously, if you claimed housing benefit, you were passported through, as it's called, and you automatically got the help that you get from the council tax benefit in Wales. That automatic link has been broken in universal credit, so we've seen a fall in the number of people claiming council tax benefit in Wales, and that is because some households who previously would have got it without having to claim it now don't realise that, unless they make a specific claim, they won't get that help. So, there are administrative things that we can try to do to make it less dependent on individual initiative and to have more responsibility in the way that the system operates to get the help to people who need it.

13:15

Thank you for that, First Minister. As I said earlier, I think that that is likely to be a topic that we return to. One of the other Members is likely to return to this in far more detail later in the session. Notwithstanding the points that you were making about energy security and the more macro picture, looking at the situation that's likely to be facing households with their energy bills in the coming months, what discussions have you and the Government had, please, with the UK Government, also with Ofgem, about what's likely to happen later in the year? Do you think the prices are likely to increase again?

[Inaudible.]—very likely indeed that Ofgem will raise the cap again in October. The Chair said in opening that the position is volatile, so I think it's hard to know the extent to which the cap will be lifted, but it's very hard to see a position in which the additional energy costs that are already in the system don't make their way through to further rises in household bills in October. So, yes, of course, whenever we have the opportunity to raise these matters with UK Ministers, we do so. I have opportunities myself in meetings chaired by Michael Gove, and my colleagues at portfolio level have those opportunities as well.

The first meeting of what's called FISC, Chair, that is the four-nation finance minister forum, created under the new inter-governmental relations review, met a couple of weeks ago—the week before last, the first meeting of that forum—and I know that my colleague Rebecca Evans took that opportunity to raise the issue of energy prices to pursue the practical solutions that we had put to the UK Government in a letter from Julie James and Jane Hutt on 11 January, including, to my mind, the baffling unwillingness of the UK Government to introduce a windfall tax on energy companies who are, because of the inflation in prices, making money—. I can't remember exactly what the head of one of the big energy companies said, but I think he said they were making money hand over fist in the current context. So, we took that opportunity to make that case again in that first meeting of that new forum.

Could I perhaps just add that the OBR in their forecasts in the spring statement are assuming a 40 per cent increase in the price cap in October? So, that's the kind of assumption underlying the fiscal forecasts and the Treasury's plans.

Can I ask a question in the meantime? I'm sorry, Delyth. On the £200 winter fuel allowance that you've identified that you've paid this year and that you've already identified you intend to do in the coming winter, there were a lot of concerns about pensioners not being able to access some of that. The two increases we're seeing both this month and the possible increase in October are going to push a lot of those individuals into further situations and closer to perhaps having real difficulties being able to continue with the cost-of-living crisis. Are you going to review the criteria for accessing the next winter fuel allowance, to perhaps widen it out? Because more people are likely to be in a situation where they're going to be needing help.

13:20

Thank you, Chair. I think there are three ways in which we will amend our approach to the payment that we hope to make later this year. First of all, we will introduce applications earlier in the year than we were able to do in the financial year that's just ending today. Secondly, we will work with our local authority colleagues to get a greater consistency in some of the decision making. We've relied hugely on our local authority colleagues to make those payments, and they've done a fantastic job, but there's quite a lot of variability between local authorities in the rate at which they were able to make payments. So, some local authorities were making 95 per cent of payments within a few days of the application being made, and other local authorities were taking quite a lot longer. So, we hope to reduce the variability in the administration. And then, thirdly, we intend to widen the eligibility criteria to bring more people within the ambit of the scheme. 

Yes. Certainly Cardiff Council was very proactive in getting on to social housing tenants because they knew who they were. It's more difficult with private sector tenants, and they must account for quite a lot of the target group who failed to apply for this last year's scheme. So, what do you think the solution is? How can local authorities and other agencies help ensure that those other people in the private sector are included so that we can see the increased take-up?

I suppose I would say the first thing is that time is on our side this time in a way that it wasn't in the last financial year because we were responding to an emerging crisis. We found money relatively late on in the year, and the capacity of the system to reach the people we needed to was limited by that. Now that we've been able to confirm six months ahead that the scheme will run again for the coming autumn and winter, that gives local authorities and others an opportunity to make sure that we publicise the scheme and get it in front of a broader range of people who would qualify. So, it will be using the normal things that we are able to use—local authorities' own networks, advertising that we ourselves will carry out using social media, but radio adverts as well, citizens advice bureaux, all of the normal advice services. This time, we have a longer run-in and a better chance to make sure that people know about the help that's available. 

Back to you, Delyth, but the last question, because I want to move on to the next section.

Yes, Chair. I have two other questions, but I think I'll try and put them into one. Looking at fuel, could you talk us through what support you're going to be giving to households that are off the gas grid? And also, looking at public transport, we know that fares are increasing and people living in rural areas or people on lower incomes are going to be disadvantaged and will be more reliant on needing public transport. They may have fewer options for access to public transport. What is the Government doing, please, to help people who need it most in these two areas?

Thank you, Chair. In relation to off-grid households, I was able to answer a question on this from Jane Dodds on Tuesday this week. The market is, I think, clearly not operating as it was intended to operate. We're collecting evidence through our fuel poverty advisory network on examples where the market clearly is not working as intended so that we can put that evidence to the Competition and Markets Authority, because in relation to off-grid households, they are the regulator rather, than Ofgem. We have extended the scope of the discretionary assistance fund so that off-grid households that are experiencing financial hardship and unable to afford their next delivery of oil or liquefied petroleum gas can now seek help from the fund, and they can get a payment of up to £250 in a one-off payment for oil, or three payments of £70 for LPG. So, that is help that's coming directly through the means that the Welsh Government has at our disposal. And, as I say, beyond what we can do directly, we are working with people active in the field to assemble the evidence to persuade the Competition and Markets Authority to intervene if it is clear, for example—. I think I did mention this on Tuesday, but there are reports we are getting of people not being given a price for the oil they are purchasing until the tanker turns up at their door. That is clearly not how things are meant to be, but when you are in a sellers market, as you are, then these reports are quite definitely in circulation.

At the same time, Chair, I mentioned credit unions earlier, but we are making a particular push with credit unions to promote affordable loans and oil savings clubs, which I wasn't aware of until I looked into this preparing for the question earlier this week. And already, credit unions provide that facility for people who have to pay for oil and need to be able to spread the cost themselves through the year. We're doing a piece of work specifically with credit unions to promote that facility more widely.

In relation to travel, Chair, this is a very challenging area. Public transport is still significantly affected by the ongoing coronavirus position. Passenger numbers are not back to where they would have been before the pandemic. The fare box has not recovered to where it would have been, and the level of subsidy that is having to be provided by the Welsh Government and by other Governments in other parts of the United Kingdom simply to keep the system afloat is really extraordinary compared to what we would have expected to have provided. I think we provided £130 million above and beyond what we would have expected to provide last year alone for bus services alone. And you can probably replicate that again in terms of rail travel.

13:25

More in relation to rail. Ticket prices are going up, Chair, but, actually, they're going up below the rate of inflation—significantly below the rate of inflation, given the way that inflation has gathered pace—and we are continuing to do the things that we promised to do through Transport for Wales with free travel for 11-year-olds on trains when accompanied by an adult, and reduced fares for other young people as well. Colleagues will probably have seen that Lee Waters is publishing today our White Paper on bus reregulation—'One network, one timetable, one ticket', as the White Paper is called. That is designed, as you know, to make sure that a franchising model will make the public investment in public transport go further, to get better value out of the investment that the public makes in the system, and in that way to help, as Delyth Jewell has suggested, with the impact on households of rising costs in the transport field as well as every other field.    

I want to move on to the next section, and that's the economic impacts upon our communities as a consequence of the current economic crisis. Russell, you can lead on this, please.

Thank you, Chair, and good afternoon, First Minister. Can I first ask, First Minister—? During the course of the pandemic, the Welsh Government's focus, of course, to support business, was on ensuring businesses survived through the pandemic. Now I would have thought that focus is on ensuring that businesses are supported through the cost-of-living crisis that we have. How has the Welsh Government and Business Wales refocused their support packages? And, assuming that they have, how have they done that?

13:30

Well, Llywydd, Russell George is absolutely right that the Welsh Government has mobilised huge sums of money to help support Welsh businesses during the pandemic, and we are just at the very end of the last of those packages—£330 million-worth of additional support—because of the omicron wave and the impact that that has had. Of course, we continue to provide support to business in the forthcoming financial year, both through the business rate relief schemes that we have in place and, in some of the specific sectors of the Welsh economy, particularly energy-intensive industries, where the rise in fuel prices in particular—the Chair will be very well aware of this in the steel context—are having a very, very marked impact, we continue to discuss with our colleagues who represent different parts of the Welsh economy ways in which the cost-of-living crisis is having an impact on them and, where the Welsh Government is able, as I said in an earlier answer, Chair, to bend the programmes we currently have to help industries and businesses in the new context, then of course that is what we will aim to do.

Thank you, First Minister. Are there any examples you can give of how the Welsh Government has already bent the programmes that you have in place to accommodate the changing situation, or is it something that you're yet to do?

I don't think, Russell, that we have had sufficient advice in from the sectors themselves as to the type of help that they would find most useful. Given the rapidly changing nature of the circumstances and the fact that they do fall differentially on different types of businesses, I think it's important that we hear from the businesses themselves as to the particular sorts of impacts they are seeing, and then for us to see whether there is anything we can do. It could only be—I've tried to make this point a few times now, Chair, but I'll say it again—it can only be by recalibrating existing programmes. There is no pot of money sitting separately waiting to be used for these purposes. What we have to do is to find money that's already in that field and then use it in a different way.

I think I understand that point, First Minister, and you talked about bending existing programmes and perhaps refocusing existing programmes, and I'm very keen to have a timeline on that, because I'm sure there'll be some industries that would say, 'Look, we've reached out to Welsh Government already.' So, is there a timeline that you would expect to complete those conversations with the relevant industry sectors, and then have a timeline of when we might see a refocus of particular Welsh Government programmes? If I can also add to that as well, there's been some talk about self-sufficiency in terms of Wales and the UK being more self-sufficient; we can in no way describe opportunities from the pandemic or the cost-of-living crisis, but there are new gaps opening that could be filled by entrepreneurs in Wales to fill these particular areas of making products or services in Wales. So, is there any shift or any analysis you have in that regard, where you think that Welsh Government could be supportive?

I think that second point, Chair, is particularly important, and it's a lesson we learnt during the pandemic as well, where supply chains that had served us reasonably well in calm times turned out to be very fragile, or to break down under the impact of a global crisis—personal protective equipment being the most obvious one, where sources of supply that we'd been using, and used perfectly ordinarily, suddenly stopped supplying us because they had other customers with more money in their pockets than we did. The answer, partly, to that in Wales was to generate indigenous supplies so that we are less dependent upon those very lengthy and fragile global supply lines. I think there is a message and a lesson we can take from that, in the way that Russell George has suggested, that, where we see new fragilities because we're no longer able to get supplies from parts of the world that we've relied upon, now is an opportunity to see if there are indigenous ways in which some of those gaps can be filled.

So, I held a meeting last week, Chair, with UK Ministers and others, where a list of these vulnerabilities was being discussed. I don't think it would be right for me to go through the list, because there are some sensitivities around that, but I'll give you one example that is very easily in the public domain, which is fertiliser. We are very dependent for fertiliser supplies in the UK on Ukraine, Belarus and Russia. And there are ways in which it can be possible to realign the way in which fertilisers are both used on the one hand and created on the other so that we are less reliant upon supplies from elsewhere. Now, Russell George will have a particular interest in some of this, Chair, because, in his own constituency, he knows, because he's asked me questions about it, that some of the problems on the River Wye are caused by the spreading of chicken manure onto fields where that level of fertiliser is not needed for those purposes; it's just used to get rid of the by-product of intensive egg production. Now, it may be that there is a better use of that by-product in the future to offset some of the reliance we have on the importation of fertiliser, or the components of fertiliser, from elsewhere in the world. 

13:35

Russell, hang on a second. Sam has got a quick supplementary—and it is going to be quick.

It will be quick. Thanks, Chair. Just to come off the back of the question there, in terms of taking opportunities that may be in front of us now, and linking also to your comments earlier about energy security as well, clearly one of those areas is around producing our own renewable energy here in Wales and making sure the manufacturing process and skills are in place for that, which would certainly help in terms of longer term cost-of-living pressures. So, do you think at the moment we're doing enough to move into that space and make the most of the opportunities around renewable energy?

Well, first of all, strongly to agree with the basic proposition that Wales's contribution to energy security lies primarily in accelerating our ability to produce renewable energy here in Wales. Could we do more? Yes, I think we certainly could. I am hopeful that, when the energy policy paper does emerge from Whitehall, it will have new investment in renewables, particularly, from a Welsh perspective, in marine. Because there are well-developed technologies in solar and wind. We can do more. It was encouraging to see—I don't know whether Russell George will completely share my view on this, but I was encouraged to see Garn Fach moving to full planning permission application. So, that's onshore wind in mid Wales, but there's offshore wind in north Wales, of course—Gwynt y Môr 2; there's Brechfa forest, the Welsh Government's own land, where we have an advanced scheme for more onshore wind; and, of course there is floating offshore wind in Pembrokeshire, where the auction of new leases in the Celtic sea provides a major opportunity. And we are seeing, Chair, new interest from sovereign wealth funds elsewhere in the world in investing in renewable energy in Wales because of the opportunities that we have. And so, in that sense of where there are opportunities out of a crisis, then doing more and making a greater contribution to the UK's energy security through our contribution I think is definitely where our own focus should be.

Russell, I'll come back to you for your last question, because I want to move on to the next section. 

Okay, I'll roll the two in together. From my experience, First Minister, and I hope you would agree, most businesses, large and small, want to offer their employees good working conditions and they want to provide high wages to their employees. In fact, not only do they want to do that, they need to do that, because, in many industries, there's a shortage of staff in those particular sectors, so that's a business requirement as well, rather than just a want to do the right thing. But businesses are being squeezed, of course, in terms of the issues around coming out of the pandemic and the cost-of-living crisis, and also then being asked to improve their working conditions, certainly to deliver fair working practices, from Welsh Government. And I want to know, really, First Minister—because I think most businesses will want fair working practices—how are you particularly supporting businesses to undertake that fair working. 

And then, finally, the question around support for hospitality and tourism businesses. Their assessment is that they're going to be particularly hit as a result of the cost-of-living crisis, and I wonder what your assessment is of that, whether you think there'll be an impact on Wales, and how particularly you think that particular industry should be supported, and whether there's any consideration of revisiting some of your proposals around a tourism tax, because that's specifically what the industry is concerned about. 

13:40

Well, Chair, I'll take the first question—. I'll take them in the order they were asked. So, on fair work, first of all, I agree with what Russell George said in opening: most businesses in Wales want to do their best by their employees, as well as by their customers. That's always been my starting point. Now, there are things that we can do to help businesses with that fair work agenda, and our colleague Hannah Blythyn published a written statement on this only a week or so ago. She identified four or five different ways in which we can take that agenda forward even in these challenging times. There are the working conditions that are directly under the ambit of public services here in Wales. I want to see more public sector bodies pay the real living wage to their employees, taking the lead of the Welsh Government, and, indeed, Cardiff city council here, to become accredited real-living-wage employers.

There is more we can do in procurement. Chair, maybe I should have said—because I think it supports something that Russell George said—that, actually, 90 per cent of accredited real-wage employers in Wales are private sector employers, and they do it because they recognise it is in their business interests, because there is a shortage of workers in Wales, rather than a shortage of work, and there's a competition for workers as well. Companies that pay the real living wage do so because they see it as giving them a competitive advantage in securing the most important asset they have in a business, which is the quality of the workforce that they employ. So, the real living wage point quite certainly applies in the private as well as the public sector. 

There's procurement, of course—there's everything that we do with the Welsh public pound to make sure that, when we invest, we invest it in places where fair work is part of the bargain. There's the convening power that we have as a Government through social partnership, and we will be bringing our social partnership Bill in front of the Senedd, I hope, before the summer break, and that will certainly help us to take forward a fair work agenda in partnership with private as well as public sector employers. 

And then, finally, Hannah Blythyn focused on the skills investment that the Welsh Government makes, because if we want people to be paid more, then we know that in the long run the best way to do that is to make sure that we have a workforce with the skills that are necessary to be able to compete for those highly paid jobs. And the investment we make through our apprenticeship and many other programmes is another part of what we can do to respond to the challenge that Russell George set out. 

As far as the tourism industry is concerned, of course, I understand that all businesses are affected by the cost-of-living crisis, but I don't think it's all bad news from a tourism point of view. The Welsh tourism sector did very well in the last calendar year, and it did very well because there were many people staying at home for their holidays rather than travelling abroad, in that case because of the coronavirus context. Well, I think there's going to be another incentive in the market for people to stay local rather than to be going further afield when their household budgets are under pressure. And one of the main marketing ambitions of tourism in Wales is to persuade people who've come to Wales for the first time in the last two years to come back to Wales again next year. And there's actually very good, very encouraging evidence from the survey work that's done. People who came to Wales for the first time because of the coronavirus context had a very good experience when they were here and are disposed to come back to Wales, go to a different part of Wales perhaps, next time. So, I think there are genuine opportunities for the industry as well as challenges because of the circumstances we're in.

And as members of the committee will know, the three major purposes of our tourism strategy for this coming year are: seasonality—you couldn't get a bed in Pembrokeshire in the summer holidays last year, but we want people to come to parts of Wales in September and October and April and May as well as in the height of the summer, so seasonality; spread—we want sustainable tourism, and that means that we don't want everybody going to a few honey pots but we want to persuade people to go to other fantastic parts of Wales that they may not have thought of first time around; and then spend—we want to make sure that, when people come here, they spend more money while they are in Wales in order to give that boost to the tourism economy.

13:45

We're moving on to an area you've already touched on, First Minister, and that's advice to individuals but also sometimes the processes of seeking that support, and we'll move on with John Griffiths.

Diolch yn fawr, Cadeirydd. First Minister, I wonder what you would say in terms of the extent to which we can be confident that the support and funding that Welsh Government is providing to people in Wales to help them cope with the cost-of-living pressures is reaching those most in need. I know that Welsh Government has published the distributional analysis of that support, and I think it shows the poorest 20 per cent of households receiving something like three times that of the wealthiest 20 per cent of households. But, I wonder if that's in line with Welsh Government expectations and whether there are lessons there to be learnt for the future in terms of reaching those most in need.

I thank John Griffiths for that, Chair. What our distributional analysis showed was that around 75 per cent of households in Wales will benefit in one way or another from the extra help that we have mobilised in the face of the cost-of-living crisis, but that nearly twice as much of that help will go to households in the bottom half of the income distribution compared to those in the top half. And, as John Griffiths said, three times as much will go to those in the bottom fifth compared to those in the top fifth. And that is the reverse image of the help that has been provided by the Chancellor through the UK schemes, where £1 in every £3 that the Chancellor provides will go to the bottom half of the household income distribution and £2 out of every £3 will go to the better off half of households. So, our schemes are deliberately skewed to try and maximise the help available to those who need it the most. That's the deliberate intention of our schemes, Chair, and I think that the analysis, which we published on 8 March, demonstrates that we are succeeding in focusing our help in those places where the need is greatest.

First Minister, could I also ask whether you have done any analysis of the impacts of cost-of-living support measures on the different demographic groups, particularly those with protected characteristics?

13:50

No, we haven't, Chair. Our analysis has focused on economic need rather than protected characteristics. That is not to say that we will not do some analysis of the differential impact, for example by age, on the population in Wales, but our real efforts so far have been focused on trying to mobilise the forms of help that we've been able to mobilise. And we've had to do that very quickly, and we do it by relying on the same small group of civil servants who work in this field for us, and then to do that initial analysis, which is to give us confidence that the schemes we are devising put money into the pockets of those who need it the most. Work on further, more detailed analysis by protected characteristics is something that we can look to do in the future, but, as I say, our efforts have been more focused on getting the schemes established, getting the money out, making sure we know that it's going where it's most needed. 

First Minister, we touched earlier on how easy or otherwise it is for those eligible and in need of support to make the necessary applications and claims. The Bevan Foundation has highlighted that low-income households need to complete a number of different application forms, and I know Welsh Government has been working with local authorities in Wales to try and streamline and ease that difficulty. Could you tell us how much progress has been made with those efforts and that work?

Well, Chair, I think significant progress has been made, but that is definitely not to say that there isn't more we should try to do to simplify the system and make it easier for people to use. So, amongst the areas that we have been addressing with our local authority colleagues is passporting of Welsh benefits—if you qualify for one form of help, you should automatically be able to get other forms of help. Some local authorities do that very well, but there are others we can work with to do more. Some of that is sometimes to do with IT system capabilities, so we've been working with local authorities to strengthen that as well. And we've been working with colleagues to overcome some concerns about data sharing. Just to be clear, I think it's right that we take sharing people's data seriously. We don't, even when we're well intentioned, think that just because we are well intentioned it's okay for us to share people's data, but, sometimes, that results in a very precautionary approach to the use of data, and we've been working with our colleagues to try and get a common understanding of just what you can do, what you're legitimately able to do when you can share data in a way that makes it easier for people to get the help that they need. We've drawn all that together in a best practice toolkit, and we've been distributing that and making it available to local authority benefits teams, and it's a very practical piece of help. It's all focused on what works, the things you can practically do to simplify, to streamline, and to make the help that's available more accessible to people who need it. 

Okay. If I may, Chair, just finally in terms of debt advice: First Minister, we've already touched on the importance of the advice that's available being as widely available and as easily accessible as possible. You mentioned the single advice fund, but I know that Citizens Advice is under very heavy pressure in terms of supporting people and advising people in these matters. Will you keep the Welsh Government funding for the single advice fund under close review as we move forward, given the developing situation with cost-of-living pressures and debt associated with it? And could you also mention those aspects of the final budget that you think are most significant in terms of supporting those in debt?

13:55

Thank you to John Griffiths for that. You will know that the Minister for Social Justice recently announced an extension of grant funding for the single advice fund, to the end of March 2024. So, that by itself has been an important decision, to provide stability and continuity and predictability to the citizens advice bureaux and others who rely on that fund so they don't face losing staff and having to replace them and train them up again. They've got continuity of funding now, for a further two-year period. And we've also confirmed our funding, the contribution we make, for example, to National Debtline and to StepChange—two forms of advice that are more specialist in relation to debt.

Chair, I just do want to say that colleagues will remember the Thomas commission report. Lord Thomas focused a lot in one part of his report on the money that the Welsh Government provides for services that are, in fact, the responsibility of the UK Government, in providing advice for people in these fields. And when you tot up all the money that we divert from other purposes to making good the gaps that have emerged, that's many millions of pounds, and there is a limit to the extent to which the Welsh Government can forever be stepping in to fill the gaps left by UK failure to fund. So, we do need to see the UK Government using the levers that it has at its disposal—for example, in filling in the many legal aid deserts that there now are in parts of Wales. People needing help to pursue the benefits system need help through the legal aid system. But, in many parts of Wales, it's next to impossible to find a firm capable and able to do that. Now, we step in and we provide funding for alternative sources, but we need to see a proper system that doesn't rely on us alone.

In relation to debt, Chair, I'd also just want to highlight something, if I could, that I think is one of the hidden stories of the spring statement. It is the changes that the Chancellor has made to student debt, which will result in £6 billion-worth of debt being placed on the shoulders of students in different parts of the United Kingdom—not to the same extent in Wales, because we have a better system, with lower student debt in any case. But it is coincidental, to put it at its mildest, that the Chancellor provided £6 billion-worth of help through the reduction in fuel duty, for example, and took £6 billion in from students in the same statement. That is extra debt that will be on the shoulders of people, sometimes for 40 years to come. And, John, I think you asked me about whether we'd done analysis of the differential impact by protected characteristics. And I saw—I think it might have been in the Office for Budget Responsibility report—an analysis that showed that the differential adverse impact on women students will be far greater than that on men. So, over an average lifetime, repayments will increase by 37 per cent for female students and 23 per cent for male students as a result of those changes. So, while we are doing what we can to provide services to help those people who face debt and other difficulties, those difficulties are being added to rather than diminished by some of the decisions that we saw last week.

Thank you, John. Jenny, you also wanted to mention this, and then lead in to your questions on the impact on children and young people.

Okay. Just on debt issues, private sector tenants live in the coldest homes and pay the largest amount of rent. Are there any plans at all to give incentives to private sector landlords to decarbonise their homes, just through simple insulation methods, in the form of a loan that, obviously, you could take a charge on the property to ensure you got it back?

14:00

Chair, I probably don't have in my head the detail of the help that's been, but the general point is a really important one, and we didn't mention it earlier. But, in terms of fuel poverty, the other great piece of a jigsaw is to insulate homes so that less energy is needed in the first place, and private tenants quite certainly live in some of the least-well-equipped houses from that point of view. We are hearing, but it's no more than that, that when we get the UK Government's energy statement, there may be additional investments being made in the fabric of buildings across the United Kingdom to use less energy in exactly that way.

Yes, zero value added tax on insulation is one of the things that was in the Chancellor's statement. 

There was a very big increase in Welsh Government investment in the optimised retrofit programme in the Welsh Government budget over the next three years, and, yes, that's all about improving the energy efficiency of existing housing stock.

Okay, and just moving on to a focus on the impact of the cost of living on children. All the child poverty campaign groups calculate that three-quarters of children living in poverty are in households with at least one working adult and most of them won't qualify for free school meals. So, I just wondered if you could tell us—. The education Minister's reiterated that you are going to start rolling out universal free school meals from this September. Are you able to tell us which cohorts can benefit from this September?

So, we'll start with the youngest children in school, so reception age children will be where we will begin in September, and we are finalising plans with local authorities, but we are confident that we will be able to have reception age children throughout Wales eligible for a free meal, and then there are years 1 and 2, who are next in our sights. The plan that we have agreed with our partners in the co-operation agreement, Plaid Cymru, is that we will build up the programme over the three years of the agreement, starting with the youngest ages, because we know that that's where the impact is likely to be greatest. So, greatest in terms of educational benefit, but greatest in terms of social benefit as well.

I know Jenny Rathbone will be well aware of some of the reports we've seen from schools about the impact of the pandemic on children's readiness for school. They haven't had those socialisation experiences that they normally would have had, and just children at the very start of their school career having a chance to sit down with one another, to have that social experience, as well as the nutritional and educational benefits, you get them greatest if you start it earliest, and that's why we'll be starting with the reception age children.

Okay, that's excellent news. However, it's secondary school children who will eat the whole packet of cereal in one sitting, and, of course, they are not going to qualify for what is a very challenging roll-out of universal free school meals in primary. So, are there any plans to extend the eligibility of free school meals to a larger group of secondary school pupils, in light of what the charities say, that these people have a low-income household because they are in low-paid work? 

Well, Chair, I am focused, first and foremost, on delivering the commitment in the co-operation agreement. That's got to be my first responsibility, and it is challenging, as Jenny Rathbone has said, and that is that we will provide a free meal for every primary school age child within the three years of the agreement, and that's challenging, not just because it costs a lot of money—

Two-hundred million—

Two hundred million pounds, the director of the Welsh Treasury reminds me. Because it isn't just money; it is staff and it's premises, and it's the quality of the provision as well. I took a press conference yesterday with the leader of Plaid Cymru, and we both emphasised in our answers the fact that we are committed, not just to any old meal; we are committed to trying to make this the best possible meal we can provide, and that is a challenge on all of those things. I think there may be Members—yes, there certainly are, because I can see John Griffiths—on the call who will remember the second Senedd term, when we spent a lot of our time dealing with the very sad impact of an E. coli outbreak in Wales, when a child called Mason Jones died in one of our schools because of that. So, there are safety issues, there are quality issues, there are staffing issues and there are premises issues, as well as the raw money.

So, I am focused on delivering what is in the partnership, what is in the coalition—sorry, I'll get it right next—in the co-operation agreement, but that doesn't mean we've ruled out going beyond that. We will be looking at eligibility for free school meals in secondary schools and Jenny Rathbone will know we've had a pilot about adding money to the free school meals allowance that a child has in the first year of secondary school, so that they are able to afford a breakfast as well as a main meal, because they will have lost the free breakfast that you get in a primary school as well. So, there are initiatives in the secondary school area, but my key responsibility is to deliver what we've agreed in the primary age range.

14:05

I quite understand that. Just focusing on the breakfast provision in primary schools for the moment, the Child Poverty Action Group reported that one in seven parents said that they hadn't been able to access the breakfast provision in primary. And I just wondered what conversations the Government has with headteachers to ensure that those who most need the breakfast, as a healthy start to their learning, are able to get those places rather than those with the sharpest elbows who get in there first in the queue.

Sure. Just for the record, Chair, I should say that what that research showed was that six out of seven people did get a free breakfast and of the one out of seven who said they couldn't, over half of them said that they wouldn't use it anyway. So, it's not that every one of them was, you know—. Because not every parent takes advantage of the free breakfast and that was true of the one out of seven as well. But the point is very well made.

We have served 10 million free breakfasts in Welsh schools since this policy was first introduced in 2004 and, coming out of a pandemic, there are schools that are challenged in getting that provision back in place, but the rulebook is clear: the School Standards and Organisation (Wales) Act 2013 places an obligation—a duty—on local authorities to ensure that the provision of primary school free breakfasts is delivered. So, we work with our local authorities. You have to be able to demonstrate that it's unreasonable to do so before you are free of that obligation. I'm not saying that there aren't some circumstances in which that might be true, but they'll be rare and we are working hard with local authorities to make sure that free school breakfasts are a reality for those families who want to take up the offer that is meant to be available for them here in Wales.

Okay, and just lastly, the Minister for Social Justice is refreshing the child poverty strategy to better reflect the challenges we face in terms of the 'heat and eat'. Could you tell us what the timeline is for this strategy to be published, and what new options might we expect the Welsh Government to be looking at in light of this 'heat and eat' crisis?

Well, Chair, the Minister for Social Justice took a paper on all of this to the Cabinet at the start of March. She is following that up with a series of bilateral meetings with every Minister in the Welsh Government because it was very clear from the paper that she brought that we can only deliver what we are able to deliver if every part of the Government is aligned with the ambitions that she set out. So, she's carrying out those.

I think, technically, the commitment we've made on the refreshed strategy is that it will be published before the end of this Senedd term, but I do know that Jane Hutt wants to do it much earlier than that. I don't have a timescale, because I don't think she has been able to confirm one until she's had those bilateral meetings, but the process is very actively under way and, as I say, the Cabinet had an opportunity to discuss the paper with her, I think, on the seventh of this month.

In terms of the new ideas in it, well, we've probably touched on the biggest ticket item in it, the free school meals in primary schools, but—. I'm slightly relying on memory here, now, Chair, but we had a lively discussion, an informed discussion, in the Cabinet, about an extension to the school holiday enrichment programme and its alignment with the fact that we are committed to providing free school meals for those who qualify through the school holidays again now, this Easter, Whitsun, and throughout the summer as well. So, those are all new parts of the landscape compared to when the 2015 strategy was published. They will be reflected, I'm sure, in the strategy that is published.

14:10

Can I ask a simple question and talk about the strategy? I remember the previous ambition to eradicate child poverty by, I think it was, 2020. And I think, during my first term here, that changed because of recognition and, in fact, when you see the figures they have actually increased in 20 of the 22 local authorities since 2014. Are you confident that your strategy's going to actually address child poverty, which we anticipate will increase, as you highlighted yourself, following the spring statement? We've tried this before and we've struggled in this area, so what's the confidence level we're going to give that we can actually really seriously tackle this issue now?

Well, Chair, I suppose it depends on the question that's being asked, doesn't it? Are we confident it makes a difference? Yes, we are, definitely. Can we be confident that the actions of the Welsh Government alone can eradicate or eliminate child poverty? Then, we've learnt, in a pretty sobering way since 2010, that, to quote the phrase that our colleague Huw Irranca-Davies often uses, those policies have been faced with a very strong headwind over time.

So, if the question is, 'Are we confident that we can eradicate child poverty by the measures that we alone can take?', then I wouldn't be confident at all. I quoted the figures earlier from the OBR that the measures that the Chancellor announced in the spring statement will result in 0.5 million more children across the United Kingdom being in poverty—in absolute poverty—in a household managing on 60 per cent or less of median household incomes. That is breadline stuff, and 500,000 more children are going to be in that position. Now, we can do things to mitigate that in Wales; we can do things to help with that in Wales, but we can't eliminate the headwinds entirely.

Just for clarification, then, the emphasis is on supporting and making a difference to children in poverty.

Thank you. We move on to the next section, which is housing, and Sam Rowlands will lead on that.

Yes, thanks, Chairman. As I'm sure, First Minister, you'd agree, one of the significant outgoings for families—especially at this time, with the cost of living—is around housing costs. In the co-operation agreement, you do commit to a White Paper on housing, and within there you include the statement about

'new approaches to making homes affordable'.

So, I'm just interested to know what new approaches you're currently considering to make homes more affordable.

Probably on this one, Chair, I'm going to have to suggest that Members are going to have to wait a bit for the White Paper. Sorry, I've been trying to answer questions as fully as I can this afternoon, but the commitment is to a White Paper. The White Paper is under development and there will be new ideas in it. You can see some of them emerging already in some of the actions we've been taking around second homes, for example, but the repertoire of new ideas will have to wait until the White Paper itself has been fully developed.

Well, I'll give you another example. It's a new idea. It won't be new by the time the White Paper is published, because we're doing it already, but it's part of that wider repertoire. So, the leasing scheme Wales. Some Members will be familiar with it, because it was trialled in seven different local authorities in Wales. This is where privately owned properties are leased to the local authority, and leased over a five-year period, and the local authority is then able to use them as part of their more general housing stock.

The pilot was successful in that tenants said that it offered them a very welcome stability of tenure, and people owning those properties said that from their point of view it was successful because it gave them a guaranteed income stream, it gave them some extra investment in the quality of the property, and it relieved them of the responsibilities of being a landlord. So, all of those things were taken over by the local authority themselves.

So, we have put £30 million into this scheme in the budget that was passed by the Senedd earlier this month, and that's a significant new investment in it and it will bring, I hope, quite a number of new properties into the management of local authorities for those purposes. So, that's the sort of new idea we've been talking about.

14:15

Thank you. So, I look forward to the detail in the White Paper; that's appreciated.

So, just moving on to something slightly different in housing. So, just thinking about some of the long-term demands in terms of costs in housing. Of course, supply and demand is a constant thought, and you mentioned it earlier when you gave the example of PPE, how, when the demand suddenly shot up, the cost just escalated significantly. So, at the moment, we are seeing probably half the number of homes being built than we were 20 years ago in Wales, and that surely has to contribute some element to the cost of housing. So, what do you think the reasons are, or the main reason is, for seeing fewer houses being built here in Wales at the moment? Are there too many barriers in place, do you think, for developers? 

Well, the Welsh Government's own support for house building directly is higher than it's ever been, so the reduction is in the private provision of it, and I think that there are complex reasons there. I don't myself believe that the major reasons are in regulatory barriers, and where there are regulations in place, then I think they're absolutely necessary to make sure—to quote my colleague the then housing Minister—that we're not just building the slums of the future here. We need the new houses that are built in Wales to be of a standard that meets the challenge of climate change, and that will provide a decent quality of accommodation for people who live in them.

I think the challenges are in the consolidation in the market. It's a very different market in terms of suppliers than it was 20 years ago; Wales was a nation of small house builders, small firms, and they've been consolidated into a much smaller number of very large firms. They are profit hungry—you'll have seen the problems reported by Persimmon about Persimmon earlier last year with an inquiry into its own profit-taking practices—and they're not necessarily focused just on the social needs that are there in the way that Sam Rowlands suggested. So, where we can, directly, we are building more houses than ever before. Getting the market to work more effectively is a different sort of challenge and it's not a challenge that is unique in any way to Wales.

Just to add, the housing-needs analysis the Welsh Government does shows that the kind of biggest gap between supply and demand is in relation to social housing, and the market housing gap between supply and demand in terms of new construction is not that big in Wales; it's really that sort of social housing supply where the focus needs to be.

It is interesting, because those same figures show that 12,000 homes a year should be built, but it's currently around 5,000, so it does seem quite a significant gap. I'd describe that as significant. But you're right, First Minister, of course, the private developers usually contribute around 90 per cent, I believe, of the new developments in Wales. I'd be interested to know what feedback they're providing as to why there they are not developing at the pace I'm sure you'd want to see houses being developed. So, what sort of feedback are they giving you at the moment?

Well, I'm relying slightly on what I'm told by others, because I've not had those direct discussions myself. Look, frankly, I think companies want to operate where they think the returns for them are greater. So, there's no problem in getting private house companies to build in Cardiff. There, their complaint is that land isn't released fast enough for them to develop at the rate that they would like to see. It is much harder to persuade those same companies to go and develop in places where land, for example, is much cheaper, and therefore where the final cost of the home will be cheaper as well. So, I think there are barriers of that sort that are simply commercial calculations that the companies themselves make—

14:20

Just the—. Because, obviously, I think it was 2018 that Welsh Government produced a paper showing the publicly owned land and ambition to release that more quickly than perhaps previously. I know there's been a pandemic, I completely appreciate that, but do you think there's an opportunity to refocus attention on that and to release that publicly owned land more quickly to enable that development?

Yes. So, the Member has anticipated exactly the next point I was going to make. So, it's a very fair point. So, having said that sometimes it's a commercially driven decision, in other places, it is because land supply could be accelerated. So, the stalled sites fund that we have as a Welsh Government, £40 million, designed to help cover the costs of making land saleable—. So, in Valleys communities particularly, you have land that is available but needs remediation—you know, it's been used for industrial purposes. The land itself needs to be brought into a fit state and then there is a significant supply of land. It's unsaleable as it is, because no company could ever make money out of it. So, what we are doing is making money—. It's largely—. Andrew will tell me correctly now. It's not conventional capital, it is financial transactions capital. We've been able to use that in Wales for those purposes, to make that investment so that the land becomes useable, has a commercial purpose. And given the history of Wales, particularly in those communities, there's a lot of land that is like that, that could be made useable, but needs a lot of investment, and only the public purse will ever provide it.  

I'll just—. A final question, Chair; I appreciate time is rushing on. And, of course, part of the commitment in this term, I believe, is 20,000 new social homes to be completed or built. I'm just wondering what your concerns may be now with costs rising, whether that 20,000 is still achievable within the expected budgets, or whether you're going to have to recalibrate that number at all.

Well, the 20,000 new homes for social rent—low-carbon homes—remains the ambition of the Government. I think it was challenging in the beginning, and I think the challenge has got greater. I think there are a whole series of reasons, but here are three of them, Chair. The impact of Brexit is real in the housing construction industry, because we have lost people. We have lost workers who've gone back to other parts of Europe and they're not available as they were while we were still members of the European Union. We're seeing the impact of that undoubtedly in our programme. Secondly, there is the increased cost of building materials—that is very real in the construction industry. Now, we have provided additional capital in the current financial year to support the delivery of affordable housing schemes to help cover the costs of those unprecedented rises. And thirdly, there are new vulnerabilities in the supply chain, in the way that Russell George was asking me earlier. We're seeing longer supply chains and supply chains where you're relying on imported construction materials that are not as reliable as they once were.

When you add all those things up together—a greater struggle to get people to do the job, costs going up, supply chains being more fragile—it is making the achievement of that 20,000 affordable homes an even bigger challenge than it was. When we set it, we wanted it to be challenging and we deliberately set a stretching target, but I don't dissent from what I think the question was implying, that it's becoming a greater challenge, rather than an easier challenge, in the face of those additional factors.

14:25

I want to move on now to the next and final—for this theme—section, and that's mental health, because, clearly, the impact that the cost of living will have upon people's mental health is critical. Jack will take us on on this one.

Diolch yn fawr, Cadeirydd. Just to put on record, really, I think, on housing, we do have a greater challenge, as the First Minister says, but we also have a good record in Wales on delivering affordable homes, particularly in the last Senedd. I remember the former Minister leaving at six o'clock in the morning, shouting, 'Got to go; got to build some houses' and, of course, he worked closely with the then finance Minister to do so.

But, as the Chair says, I want to try and bring together the effects of what we've talked about today, in particular with mental health. We know, don't we, that poverty is clearly linked to a number of mental health problems. We're hearing in the health committee that I sit on currently and, of course, Russell George, who chairs that committee—. A number of key stakeholders across Wales are already highlighting that the cost-of-living crisis is already likely impacting on mental health. Of course, the financial impacts and others of the pandemic, this is all a circular approach, and of course we do know that financial hardship in particular is a significant risk factor when it comes to suicide.

In my opinion, I don't think that—. The spring statement has clearly not done enough to address some of these challenges, and we've heard your responses today. But I'd just like to understand what the Welsh Government is doing to understand the evidence it has in front of them, and certainly will be gathering, and how you'll use your powers, in the Welsh Government, to respond to this and obviously mitigate these challenging problems that people face.

Okay. Well, I thank Jack Sargeant for that, Chair. So, on the suicide point for a moment, we are very fortunate in Wales to have one of the big centres of expertise in terms of evidence gathering and evidence understanding in Swansea University and linked to Public Health Wales. And many of you will have met Professor Ann John, who leads that work on behalf of Wales. And you need people with that depth of understanding, because the evidence is not always easy to interpret. Office for National Statistics data shows that death by suicide appears to have reduced during the pandemic, certainly in the early part of the pandemic that we have figures for. Now, you know—. So, not completely easy to someone who has only a layperson's grasp of these issues to understand whether that is a real effect that we are seeing, whether it's to do with other factors that will emerge later and so on, but we are lucky enough in Wales to have, as I say, some of the strongest sources of expertise to help us with all of that. I mustn't steal anybody else's thunder, but my colleague Lynne Neagle, I know, has got some announcements she plans to make shortly about strengthening our suicide surveillance system in Wales to make sure that we've got the very best information and in real time as well, so we're not relying on retrospective data for our understanding in this area.

As to what we are doing, Jack, to respond to the patterns that we are seeing, and I definitely see in my own interactions with groups of young people, particularly whenever I meet members of the Youth Parliament or other representative groups—. Mental health and well-being is absolutely guaranteed to be amongst the first things that they want to talk about. So, on the one hand, it's a matter of investment. So, there's £50 million more in the general mental health budget in the current financial year and a rising profile for mental health investment over the three years of our budget. There is money being invested via the schools budget. On 24 March, Jeremy Miles announced £12.2 million of funding next year for the whole-school approach to mental health, and that rises over the three years of the settlement—£12.2 million, £14.4 million and £16.6 million. And that will help us to deliver what sometimes we call the whole-school approach, and sometimes people call it the whole-system approach, to mental health. So, just three quick examples of that, which many people here will know: greater investment in counselling services, so tier 0, tier 1-type services, to help those young people who are just going through a tough time. You know, growing up is a complicated and challenging thing in a modern society. Many of us are grateful we didn't face the issues of social media and all the things that bring those additional pressures on young people today. So, it's making sure that there are adults who are well equipped and confident enough to be able to have those conversations with a young person who's just going through a tough period, who doesn't need a specialist mental health service, but needs somebody who they can talk to and turn to. So, there's investment at that end of it. There's investment in equipping teachers and others—youth workers, for example—so that they are confident that they themselves can make a response. Making a referral to somebody else is not always the best way of discharging your responsibility. And sometimes, I'm fearful that there's been a trend in modern public services to think that if you've written a letter sending someone somewhere else, you've done your job. Actually, I think sometimes we need people to be equipped to actually do part of the job themselves—so, better training and better-equipped people at the front line.

And then, of course, for those young people who do need a specialist service, the in-reach child and adolescent mental health service, which again we trialled in, I think, half a dozen or so local authorities—on the basis of the success that that demonstrated, we're committed to making that available in every part of Wales. There is a workforce challenge there, Chair. The money is available, but finding people who already have the level of professional qualifications and skills, without stealing them from somewhere else that is also vitally needed, is a challenge. But Lynne Neagle is very committed, as you will know, to making sure that that happens and that it's delivered in every local authority.

14:30

I thank the First Minister for that. Just one final question from me, Chair, if that's okay. I'm grateful for your example, from the education Minister and the Minister for mental health and well-being, but do you think, do you agree with me as well, that sometimes it's not about always coming up with the new ideas or fresh techniques that are out there, but it's actually about empowering what's happening in communities already? John Griffiths will know well that Newport County Association Football Club are an excellent example of what they're doing to tackle this. And it's actually about making that funding easily accessible to those in our communities who are already doing some very good work. So, I'm greatly concerned, and, of course, I welcome the interventions made, in particular the increased funding into the call line and, of course, the online interaction that we have. But there's also a worry that not everyone will pick that up, and it's about going out to the communities where they feel comfortable, where people feel comfortable to open up, and I gave the example of Newport, and there are plenty of others across Wales. Would you agree with me?

Yes, I do very much, Chair, agree with what Jack has said. Look, I think it's one of the real lessons from the pandemic and finding ways of reaching young people, because you couldn't reach them in the way you normally would have done, because they're not at school and they're not appearing in places where you'd normally be able to see them. I think one of the real messages is that young people, like any people of any age, react individually very differently to the way that they themselves feel most comfortable getting help, which is why we've developed that wider range of things. Some people prefer to pick up the phone and speak to somebody that they'll never need to speak to again. They will unburden themselves, they'll have that conversation, and the reason they can do it is because they know they don't need to face that person ever again. You can put the phone down and it's over. For some people, that's exactly what they need. Somebody else needs somebody that they're going to be able to see regularly and build up that sort of relationship with. And some people will be comfortable to do that in a relatively formal setting, and other people will be far more comfortable in a community-type setting, of the sort that Jack Sargeant has identified. I think it is what we mean, Chair, when we say that mental health is everybody's business, that the more we can equip that wider range of places that a young person might turn to for help, the thicker the safety net will be and the fewer chances there will be that someone will fall through it.

14:35

Before I close the session on the cost of living, there are two points, I think. Jack Sergeant and I met with young people yesterday from Dŵr y Felin Comprehensive School in the education Minister's own constituency, but some of the pupils actually live in my constituency, who came up with ideas of how young people can work with one another. I think you pointed out, quite rightly, that there are three different levels of tiers, and you go, 'How can we help people at the lower level?', then the CAMHS question. You talked about the fact that resourcing is there. It's about people, isn't it? Where is the Welsh Government intervening to make sure that there are sufficient people available to help those, particularly at the tier 0 and tier 1 level, so they don't need the more interventionist levels that are higher up? The children we met gave us a perfect example of how they could actually work as a peer group in one sense. 

I think there are a very wide range of things. We had a good discussion—or I had a discussion, at least, with Laura Anne Jones on the floor of the Senedd not that long ago, about mental health first aid and how we can make that more widely available in Wales. As a result, the Permanent Secretary has asked Public Health Wales to review the work they've done on mental health first aid and to see whether there's more that we might be able to do there.

So, I'm sorry to give a slightly complicated answer, but the way I see it is that you need to make sure that those adults that young people come into contact with anyway have enough training and enough understanding that they don't just feel, 'I can't, I'm not going to respond to this, I'm a bit afraid of saying the wrong thing or doing the wrong thing, so I'll do nothing and I'll try and send you somewhere else.' That isn't training somebody full time, it doesn't mean that that's that person's job, it just means that they're equipped enough to be able to do the first things.

Then you will need people who can operate in the community. They are not going to be trained clinicians, but they are the sort of people who work with Samaritans, and they're the sort of people who you find in a Mind community facility and so on, and there is more we can do and are doing to try and make sure that there are a sufficient number of those people coming through the system. There are some additional challenges there, for example in making sure we have enough people able to respond in the Welsh language to people. We want to be in a position where people can always access a public service in Wales through the language of their choice. Well, imagine what it is like if you have a mental health condition and you are having to express what is concerning you not through the language in which you yourself are most comfortable. It's an even more pressing need to make sure that we have services available in that way too, and that's a challenge in the workforce. 

We are definitely investing more in the specialist end of the system as well. But we have to do it, otherwise we end up with the problem that I mentioned to you earlier, that to set up a new service, the CAMHS in-reach service—if we're not careful, what we do is we end up attracting people from other essential services and creating a new service and leaving us with gaps in other parts that are equally necessary.

Thank you. And just to conclude from me, I think I'll go back to what you said at the beginning, and correct me if I misheard you, but I think you said the spending power you anticipated would be £600 million less as a consequence of the inflationary factors. How is that really going to affect your approach to tackling the cost-of-living crisis if you actually have less spending power, with many of the issues we see increasing?

Well, it makes the position even more difficult than it otherwise would be. The first thing we do, of course, is to try and persuade the Chancellor, because all the public services that he is providing in England, for example, face exactly the same dilemma. So, the first thing we try and do is to persuade the Chancellor. He thought we needed that level of spending power back in October and November when he was finalising the CSR. Surely he doesn't think we need any less spending power just six months later, so he needs to make good the budget impact of inflation on public services so that we don't face the dilemma. If we have to manage with £600 million less purchasing power because of inflation, then that will simply sharpen the dilemmas we face.

At one point I began—sorry, I shouldn't probably have done it—just to write down the number of times I was being asked what the Welsh Government was going to do to mitigate a different impact, whether it was on children, housing or everything. Of course, they're perfectly proper questions, but our ability to do that is made even more challenging when inflation eats into the extent to which the funds we've got can do the job we want them to do.

14:40

Because obviously there's inflation every year—it's life, I suppose. So, what element of that £600 million do you think is, from your point of view, an unreasonable amount for Welsh Government to manage versus what would be a reasonable, usual amount to manage?

Well, actually—. Andrew will come in, I'm sure, but actually I think I challenge the premise of what Sam has just said. I think one of the ways in which we have managed to survive a decade of austerity is because we've seen inflation at historically low levels. We have not seen—

But there's still inflation. There's still inflation, whether historically low or high.

Well, what I'm saying is that the erosion of—. Our budgets stood still or reduced in real terms, but they weren't being eroded by inflation. Year on year, inflation was at an historic low, and now, suddenly, inflation is back to a 40-year high, and that's a different order of challenge than we've faced through it all.

The other point to make is that when the spending review was produced in October, the figures that were produced there were based on the forecast of inflation made at that point, which was around about 3.5 to 4 per cent for the year ahead. So, when the UK Government explained the real-terms impact of those increases in budgets, that was based on that inflation forecast. In the meantime, inflation forecasts have doubled. That's not a normal thing to happen in terms of how public spending is planned in future years. So, the fact of the matter is everything is a lot more expensive than it was expected to be at the time of the spending review.

So, around half of the inflation pressure probably would have been planned for in the initial—

So, the £600 million is the difference between what we were expecting inflation rates to be at the time of the spending review and what they are now. 

Thank you. That concludes our session on the cost of living, though I'm sure, First Minister, you will continue to be questioned on the cost-of-living crisis because it's not going away, and it is, as we started out saying, very fluid and happening amongst our citizens and our constituents, and friends and family are all going to be struggling in the months and probably years ahead of us. 

3. Sesiwn i graffu ar waith y Gweinidog—Materion amserol
3. Ministerial scrutiny session—Topical matters

If we move on to the topical questions in this session, we'll have perhaps reduced time, but I'm sure we'll cover them anyway. I'll go over to Sam Rowlands for the first one.

Yes, thanks, Mr Chairman. Sorry, I haven't been on this committee before—I'm not entirely sure how this section plays out, but I put a topical question in in regard to the north Wales transport commission, and obviously there have been appointments to the commission earlier this month, which is welcome, to see some progress there, particularly as a Member for North Wales. Now, you will know that money earmarked for the north Wales metro, previously around £50 million—for the south Wales metro, there's around £750 million earmarked there. So, I'm just wondering, with this commission being set up and with, I understand, some outcomes or proposals coming forward, perhaps in about 12 months' time, would you expect similar amounts of money to be available if the need arose, if the commission identified that investment was required in north Wales, or do you think that might be a challenge?

I don't think there's a preconceived quantum that we will expect Lord Burns to come up with. What we're looking for him to do is to look across both the geography of north Wales but the different modes of transport that are available, so to take that more comprehensive view of how you can use the investments that are already planned, and further investments where they are necessary, and not to look at them as separate strands—you know, 'That's for roads. That's for rail. That's what we spend on active travel'—but to see, in that more comprehensive way, how you can redesign the public transport system across north Wales in a way that delivers the greatest benefits both for passengers and users, but also in terms of the climate change challenge that we are facing. 

Thanks for that response, First Minister. So, one of the areas of opportunity, which you will, I'm sure, agree with as well, is the link into north-west England and north Wales in terms of the manufacturing, especially in areas of the north-east of Wales as well. So, I just wanted some assurances that the work of this commission, whilst it will be focused, obviously, on north Wales, doesn't miss out on those opportunities, and particularly from a transport point of view, that will arise and continue to arise between north Wales and the north-west of England.

14:45

Yes, absolutely. I certainly expect it to operate in that way. The Mersey Dee Alliance is something that we're very familiar with and work very constructively with. The union connectivity review means that we've got to be able to look at how anything that we are doing in Wales is linked to developments elsewhere. And we've had some recent, modest success, I know it is, in getting agreements with—I think it will be Highways England. There are roads that start in Wales, meander into England, come back into Wales again, and you can't have a plan for a road like that unless you're working in that cross-border way. I think it's around Pant, which many of you here will be very familiar with, that we've had some recent agreements so we can go ahead with a scheme that will improve the road on both sides of the border.

Thank you. And the final question here then, Mr Chairman: in terms of the work of the commission, I'd be interested to know how you expect their work to feed into the scrutiny side from us in the Senedd, not just in 12 months' time when the final paper comes along, but perhaps between now and then and how we as Members of the Senedd can be involved in that work.

Well, to an extent, Chair, it will be a matter for Lord Burns to—. When you ask somebody to do the work, you've got to allow them to do it in the way that they do. But I think Members can have confidence, because, when he undertook the work in south-east Wales, he made himself available regularly. He held sessions here in the Senedd. He is a very experienced and distinguished public servant, who, I think, absolutely recognises his responsibility to continue to be available for engagement with local Members, but questioning and discussion with them as well, as his work proceeds.

The one-network approach to public transport that's inherent in the bus White Paper that's been published today by Lee Waters, how quickly do you think you'll be able to get the legislation to the Senedd in order to enable us to get on with this?

I'm not sure if I'm meant to tell you these things, Chair.

I'm forever on a tightrope here, but it's currently scheduled as a year 2 Bill.

Yes. But there are a lot of—. It's a long journey from a White Paper to a Bill, but it's currently scheduled as a two-year Bill.

Okay, because, obviously, this is a really important plank in our response to the climate emergency. Without it—.

Can I push that a bit further? Because it's not just a response to the climate emergency. I think it was Delyth Jewell that raised the question earlier on the cost-of-living issue and public transport. Has the cost-of-living crisis changed the thinking behind the White Paper to ensure that it's not just going to be a delivery on the climate emergency issue, but it's also going to be a delivery on the cost-of-living support for people to be able to use public transport more?

Well, Chair, the purpose of the reforms has always been to make the public pound go further. Because at the moment we have wasteful competition in bus services in Wales and a lack of capacity and legal authority by local authorities to plan the way in which the money we and they provide for bus services—to plan a service in a way that makes sure that it meets need rather than just has competition on a small number of commercially viable routes. So, in that broad sense of making sure that public money is driving the best deal for the public, that was always, alongside climate change, one of the twin motivators of the White Paper.

Diolch, Cadeirydd. Diolch, Prif Weinidog. Thinking about meeting public need as well, will the plans be able to be taken forward to make sure that things like the safety of routes for people to access public transport will be—? For example, for a young woman, or a woman of any age, walking on their own late at night, can it be linked in with local development plans, with urban planning, so that walkways are well lit, so that, yes, it's the cheapest, it's the easiest way of accessing transport, but also the safest?

14:50

I would certainly expect myself, Chair, that local authorities with greater powers now, through franchising, to be able to align the investment in bus services with all the other things that they are doing—for example, in developing a new housing estate, or whatever—that this will strengthen their ability to bring those agendas together and to try and align them with one another. It's not a panacea, the bus Bill—we will still be constrained by the amount of money that is available to support the industry—but the fact that planning will be enhanced, and that public outcomes will be more at the forefront of the way that bus services and bus routes are developed in future, I think will allow for some of the things that Delyth Jewell has just mentioned to happen better in the future.

Can I, then, before we move on to the next question, since no-one else is asking one, raise two points, perhaps, from me? Obviously, this week we've seen the Ockenden report on Shropshire services, and there'll be Welsh families that will have suffered within that scenario, and of course we also have our own challenges in Cwm Taf. What actions will the Welsh Government be taking in response to the Ockenden report in Shropshire? How are you going to make sure that it aligns with the actions following the Mid Glamorgan—I can't say 'Mid Glamorgan'; it's the Cwm Taf health board report?

Sure. Well, the lead health board for Wales in relation to the inquiries at Shrewsbury and Telford is the Powys local health board, and there are indeed, as you anticipated, Chair, families who live in Wales who received a service from that trust, so there are families directly connected with it, and it will be through the work of the Powys health board on behalf of those families that we will have the first strand of influence from that report here in Wales. Of course, we will want to see where there are lessons that can be learnt more broadly. I think that is one of the things that Donna Ockenden herself said on publication of the report, that her recommendations are not confined to the Telford and Shrewsbury areas alone. So, we will definitely want to see whether there are things we can learn from those very sobering experiences, and to align them with the work that's been carried out in the Cwm Taf area, too. In Cwm Taf the numbers are not of the same scale, and the pace at which we've been able to carry out those inquiries and come to the conclusions has been faster as a result. But some of the issues, no doubt, have things in common, and we'll want to make sure we'll bring those two sets of inquiries together to maximise the learning from them.

You'll have seen—sorry, Chair—that the health Minister recently announced some additional funding to invest in the capacity of the service across Wales to draw those lessons and to put them to work.

Okay. Moving on to Ukraine, can I put on record, I think, the appreciation of all Members for the efforts the Welsh Government have been putting in place to support the refugees that will be coming to Wales in, hopefully, the near future? What stage are you at with discussions to ensure those visas are actually now being implemented, and people are able to leave the temporary accommodations they have, wherever they may be, in other parts of Europe, to be able to come here and start rebuilding a life before they may wish to go back, hopefully, with peace eventually coming in Ukraine?

The provision of visas to people who have been matched with potential host families in Wales, as in other parts of the United Kingdom, and people who have now registered with the Welsh Government platform, remains very slow indeed. I was given an assurance yesterday that that is about to be accelerated and significantly accelerated; that, at the UK Government level, an exercise has been carried out to streamline the process and that a significant number of new members of staff have been diverted to making sure that visa applications are rapidly turned around. But, at the moment, the numbers are very small indeed. So, we do definitely need to see a real step change in the pace at which the visa system is able to respond to people who are now moving ahead in their thinking and their planning. They have met somebody and are thinking that that is where they are going to come to live, or they've decided that they want to come to Wales and they registered with our own platform, and we need those discussions to mature, and they only can when a visa has been issued, and the numbers at the moment are handfuls.

14:55

How are they going to get here? Let's suppose that a visa is issued, if they've got no money, how are they going to get here? I appreciate we're going to give them free transport when they do get here.

Well, again, you have to focus your efforts where you have the most capacity to make a difference, and our efforts so far have been focused on trying to make sure that, when people arrive in the United Kingdom—not in Wales, in the United Kingdom—we are able to get them from wherever they arrive to wherever their destination will be. I gave an instruction to our officials that they were to focus their efforts on that in the first instance, because there I could see there were things we could do that would make a difference. It was much harder for me to see where we, the Welsh Government, could do much at that point at the Polish border, or in Moldova, for example.

Now, we are beginning to try to think about that. It is by no means straightforward, and some options are very, very expensive in the context we've just been talking about. But, we are exploring whether there are ways in which we might be able, using the help of civil society and groups that have sprung up and are very keen to help, to find a way of transporting people from where they are now to the United Kingdom.

I met the ambassador of the Republic of Moldova yesterday. There is a very small country, Chair, not much smaller than Wales, that has absorbed tens and tens of thousands of people, through astonishing generosity—[Interruption.] Three hundred thousand, with a population of 2.3 million, but where they know that those people want to move on to other, more permanent homes. And I was able to have a conversation with her yesterday about whether we might be able to work together on some ideas to help with moving people from where they are to destinations in Wales where there will be a welcome for them.

There's no appetite by the UK Government to use the military logistical units.

Well, certainly, in the conversations I've had with them there is no scheme at all. People get a visa, and it's up to them.

Thank you. On the same topic of the refugees from Ukraine, I've huge concerns around people being taken advantage of in terms of trafficking at the moment with this issue, and I just wonder whether there are any particular pieces of work or programmes of work that you're putting in place or thinking about putting in place to ensure that that risk is as minimal as possible for when those people do arrive here.

Well, I think it's a really good question. Here's the tension, as it seems to me, Sam: what I have said to the people who are working on this in the Welsh Government is that I don't want us to approach all of this on the basis that anybody who has offered help is to be regarded as an object of suspicion. I don't think that can be our starting point, can it? Most people who have offered help to people from Ukraine are absolutely genuine people, generously motivated, and I don't want us to treat them as though the fact that they've offered help means that we think they must be up to something. But we still have to have safeguards in the system, because we know that, where there are vulnerable people, there will be people who will seek to take advantage of that. So, we've been trying to work with our partners in the Disclosure and Barring Service system, for example, to make sure that we do have a system. We will be checking where people are going to make sure it's safe and it's suitable, but the spirit we do it in is one that starts from the belief that the people who've come forward to offer help are doing it for the best of reasons. And then we're looking for the exceptions to that, rather than people having to sort of prove the opposite.

15:00

We've come to the conclusion of our allocated time, First Minister, so can I thank you for your attendance this afternoon and for the answers? And as you are aware, you will receive a copy of the transcript for accuracy purposes, and if there are any inaccuracies, could you please let the clerking team know as soon as possible? So, thank you very much, both of you, for attending today.

4. Cynnig o dan Reol Sefydlog 17.42 i benderfynu gwahardd y cyhoedd o'r cyfarfod
4. Motion under Standing Order 17.42 to resolve to exclude the public from the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).

Motion:

that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).

Cynigiwyd y cynnig.

Motion moved.

Item 4 on our agenda is a motion under Standing Order 17.42 to resolve to exclude the public for the remainder of this meeting. Are Members content to do so? I see they are, and therefore we'll now move into our private session.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 15:01.

Motion agreed.

The public part of the meeting ended at 15:01.