Y Cyfarfod Llawn

Plenary

09/01/2024

In the bilingual version, the left-hand column includes the language used during the meeting. The right-hand column includes a translation of those speeches.

The Senedd met in the Chamber and by video-conference at 13:30 with the Llywydd (Elin Jones) in the Chair.

Statement by the Llywydd

Good afternoon and welcome to this first meeting in 2024. A happy new year to you all. 

I hope you all have a healthy and happy new year.

Before we start today, just to say that those of us who are children of the 1970s have only one image in our minds today, that of a long-haired, sideburned international Welsh rugby superstar, who, with socks around his ankles, became the first ever attacking, side-stepping rugby fullback, and was equally fearless in his try-stopping tackles into touch. Some people don't need surnames; they become legends in their own lifetime. Diolch, J.P.R., for the memories. [Applause.] Fifty-five caps for Wales, eight caps for the Lions, and, apparently, his proudest boast, 'Eleven matches against England, zero defeats'. [Laughter.] As a Senedd, I'm sure we unite in our condolences to his family and to his friends, and to his former team-mates. Diolch yn fawr iawn, J.P.R. Williams.

1. Questions to the First Minister

The next item will be questions to the First Minister, and the first question today is from Hefin David. 

Delivery of Primary Healthcare

Thank you, Llywydd. J.P.R. was a legend. 

I hope that's the right Welsh. 

1. Will the First Minister make a statement on how the Welsh Government delivers primary healthcare? OQ60492

Llywydd, independent providers, through contracts with local health boards for their services, deliver primary healthcare. The Welsh Government sets policy and funding for the NHS, and there's a need to work in accordance with that policy and funding in delivering primary healthcare. 

Diolch, Prif Weinidog. It's worth remembering that J.P.R. was an orthopaedic surgeon, and therefore made his own contribution to our NHS.

One thing I want to raise today is the Bryntirion surgery in Bargoed, which has long been under the control of the Aneurin Bevan health board, because they couldn't recruit practice managers—GP practice managers—to the northern Valleys, and Bargoed in particular. The health board has now found a resolution to that by advertising and giving the practice to English-based GPs, who will run the practice, and, it appears, will run the practice from a distance. While I'm really glad that the GPs are taking over, because it will mean that they're less likely, in Bargoed, to see locums—they'll see more full-time GP staff there—at the same time, as a socialist, and from the perspective of a socialist Government, this is effectively moving from public sector-provided healthcare to private sector-provided healthcare. While welcoming that Bargoed will be run effectively, and will be run for the benefit of patients—and patients don't need to do anything; it will happen—will he also reflect on the fact that the model we have currently in primary care is in fundamental need of reform?

I thank Hefin David for that, and, Llywydd, it is fitting that, today, we are remembering J.P.R. Williams on the rugby field, but also in the contribution that he went on to make in the Welsh NHS for so many years.

Well, like the Member, I welcome the fact that the Aneurin Bevan health board has been able to find new providers for the Bryntirion surgery. It's not the first surgery that the new team will run in the Aneurin Bevan area, and I'm told that the surgeries already run in this way have been welcomed by patients in those surgeries. There's no doubt at all, Llywydd, that we have moved into an era of a mixed economy in primary healthcare. There are far more salaried GPs employed directly by health boards, but also employed within practices themselves, and we know that, for many of the people who have entered and are now leaving medical training, that is a model that suits their future needs better than the old contractor model. But there is life in the contractor model as well, and that's what you see in the developments in Aneurin Bevan. Handled in the right way, there still are GPs who feel that the contractor model is a way in which they can provide those services. They themselves will be employing salaried GPs as part of the new teams that they will be creating. So, this is an evolving picture. I think, over time, we we will see more people employed on that salary basis, either directly or through practices, with fewer GPs themselves invested in that previous model. That model itself is being renewed and modernised, and I think you see that in the Aneurin Bevan developments as well. And the future of primary care will be a more mixed economy, more salaried staff, greater reliance on the wider primary care team, and there's life in that model, as the Aneurin Bevan developments demonstrate.

13:35

Thank you, er, er, Presiding Officer—I nearly forgot. [Laughter.] It's a new year. [Interruption.] No, it has only been three weeks. I won't wish you a happy new year, because I'll probably get the Presiding Officer getting angry with me as well, First Minister—but a happy new year, anyway.

First Minister, I listened to your answer with interest. I'm sure you would have seen the story on the BBC this morning about a GP who returned her NHS contract to open a private surgery. I read this with interest. Information from the British Medical Association shows that the number of patients per full-time equivalent GP in Wales has gone up from 1,676 in 2013 to 2,210 in 2022. So, reading that, it's not much of a surprise to see GPs leaving to go and work elsewhere, considering the increased amount of pressure that they're under. So, listening to your response to Hefin David, First Minister, I wonder if you could also outline what the Welsh Government plans to do to encourage GPs to continue working within the Welsh NHS, and attempting to address that figure I referred to in regard to the change between 2022 and 2013. And what are you doing to support practices that consistently rank highly on the primary care escalation framework?

Llywydd, I think there are two quite different questions there. Of course, GPs leave the health service, but GPs join the health service as well. In the last year, we saw again a rise in the number of GPs employed in the Welsh NHS, both on a head-count basis and on a full-time equivalent basis, just as there was a rise in the number of trainee GPs, just as there was a rise in the number of practice staff. So, the primary care system in Wales, of course it is under pressure; primary care is under pressure everywhere in the United Kingdom. But, here in Wales, we have a growing number of staff, we have an innovative approach to assisting GPs, through urgent primary care centres, through the '111 press 2' service, through the £5 million that was invested by the Minister in extending professions allied to medicine as we went into this winter, because it is that wider primary care team that is the future of primary care here in Wales. And we look to work with the profession in the new contract, the new GMS unified contract that began on 1 October last year, on that journey.

In relation to the number of practices that are at the high end of the escalation system, the numbers reflect the pressure that the system has been under, but there are still more practices at the bottom end of escalation than there are near the top. We receive those reports, which are self-assessments—they're not the Welsh Government's assessments; they're the practices' own assessments—every week, and that does allow the Welsh Government to be able to identify with local health boards those practices that are persistently in the highest level of escalation, and then to offer them additional help to be able to deal with the demands that they are facing.

As GP surgeries close and the lack of availability of GPs becomes more and more common, we are seeing a number of private medical companies starting to provide GP services outwith the NHS within our communities, with people paying between £40 and £70 for appointments because no GP is available to serve them. In these surgeries, they get half an hour or more with the GP, and they get fast-track referrals and other benefits. The upshot of this is that we have a two-tier society being introduced once again, under a Labour Government. Is this the Labour vision for health services in Wales?

13:40

Well, of course, I don't agree with Mabon ap Gwynfor. What he says is not true about health services here in Wales. More people work for the public NHS in Wales than at any time in the history of the health service. Of course, there are some people who are providing private services and there's nothing that we can do about that. But every month there are 2 million contacts between people in Wales and the national health service. That's where we are focusing as a Government and that's where the people of Wales are served. 

Sharing Misinformation Online

2. Will the First Minister make a statement on the threat to Welsh democracy posed by the sharing of misinformation online? OQ60488

Llywydd, online misinformation is a deeply harmful but contemporary feature of all democratic societies. We work with groups within Wales and across the UK to combat the misinformation itself, to help informed citizens to identify misinformation and to provide authenticated sources of information on which individuals can rely.

Thank you, First Minister. Over Christmas, I was sent a link by a constituent to a news item on an American platform purporting to be a news provider, which claimed that the Welsh Government was using 14-year-old schoolgirls to attract military-age men from countries where there are no rape laws, including Africa and the middle east. Would you agree that this sort of news article is totally unacceptable, damaging to democracy, and, First Minister, do you think there are some other examples over recent weeks of misinformation being promoted online, perhaps emanating from closer to home?

Well, Llywydd, I'm aware of the story to which Ken Skates refers, and it is both utterly untrue and utterly irresponsible to make such claims. Here were a group of young people of their own volition looking to make sure that others who might come to their area would feel welcomed and know that they would be welcomed in that community. The result of that misreporting is that those children's welcome has had to be taken down and that new security arrangements have had to be made at those places where the Welsh Refugee Council operates. Individuals who work for the refugee council were named in those highly irresponsible reports and have had their own lives disrupted as a result. The police are involved in investigating what has been said, that willful misrepresentation by people who claim—and it's a sickening claim—to be interested in the well-being of young people, whereas, in fact, everything that they have done has acted to put young people at greater risk. Anybody who claims to care about the safety of our young people should not be sharing false claims about them.

Well, of course, I endorse Ken Skates's concerns about that particular issue. More broadly, people, young and old, increasingly self-select their news from online sources that reinforce rather than challenge their own perceptions. In consequence, I regularly receive e-mails on many issues claiming that they are, and I quote,

'all part of a cunning plan by Big Brother governments to control our lives'.

The Welsh Government allocated £1.6 million to a communications campaign running alongside the implementation of its default 20 mph policy, using selective evidence and ignoring all the research and evidence that challenge their claims. Last week, it was revealed that the Welsh Government is spending over £500,000 of taxpayers' money on a public engagement strategy, including over £61,000 on social media advertising, to burnish its own green credentials, at a time when it's making widespread cuts to public services and despite the climate change committee finding that Wales is making insufficient progress in this area. How can you justify such actions when their provably inaccurate content only fuels the public scepticism we're all concerned about?  

13:45

Well, Llywydd, the Member talked about self-selected information and then continued to offer us exactly that. Let us take the two examples that he offers. The claims that were made, set out in the Welsh Government's documentation, around 20 mph zones were tested by the UK Statistics Authority, who found that what we said was accurate and asked us to put even more information into the public domain, which we then did, to demonstrate the truth of what we said in that assessment. It did not find for a single moment that what we had said was untrue; it simply asked us to do more to help people to see the truth of the claims that we had made. 

And as to his second example, has he not seen today the news about the impact of climate change over the last 12 months alone—a year in which, day after day, the impact of climate change was being seen in the United Kingdom? We spent £0.5 million to try to save the planet, and the Conservative Party want to take issue with it. Every amount in that budget is designed not to burnish the credentials of the Welsh Government; it uses information from private employers, it uses information from other employers here in Wales, and it is designed to demonstrate that, by acting together, it is possible to do something to tackle the greatest challenge that faces us today and which would otherwise be left to our children and our grandchildren to pick up the mess that has been created. How can it be—how can it be—that a serious political party thinks that they can make a point about spending £0.5 million to contribute to that being a misuse of public money? I do not regret a single penny of it, and neither should you.

Devolved Governments are at the forefront of efforts to combat the threat of disinformation to our democracy. The province of South Australia and the Australian Capital Territory have banned disinformation in political advertising. The states of Michigan and Minnesota have prohibited the use of deceptive deep-fake media in election campaigns. And, at a different scale, the EU has recently announced that it will end the use of personal data in political microtargeting. We have the power to do all of those things and more, and we have the vehicle in the Elections and Elected Bodies (Wales) Bill. So, will the Welsh Government place Wales at the front line in this battle against the political pandemic of lies and deception that is threatening the future of democracy worldwide?

Well, Llywydd, I thank Adam Price for those important points. I definitely do want Wales to be on the front line of that effort, and there are things that we are doing already in Wales. On 1 November, the new digital imprints regime was instituted here in Wales. In future, overseen by the Electoral Commission, when political parties publish information—not in print, where it's always been necessary to have an imprint on it, but digitally—it will in future be necessary to have information there that shows where that information has come from. At the same time, we will provide, as a Government, in future elections, an online information platform, which will provide voters with reliable information about the candidates who are putting themselves forward and policies that political parties are pursuing. 

One of the things that I think democracies can do is to provide a place where voters and citizens can go to find information that has been authenticated and on which they can rely. And I hope that, in Wales, we're already doing things to move in that direction, and there may be more ideas from other parts of the world, as Adam Price has outlined, that we can learn from and adopt here too. 

Questions Without Notice from the Party Leaders

Questions now from the party leaders. The leader of the Welsh Conservatives, Andrew R.T. Davies.

Thank you, Presiding Officer, and could I identify with the comments that you made at the start of the Plenary session about J.P.R. Williams, a resident of the Vale of Glamorgan, and someone who I had the pleasure of enjoying his company on several occasions?

First Minister, yesterday you held a press conference that alluded to the fact that the 20 mph speed limit that the Welsh Government have brought forward was going to be looked at through the premise of gentle enforcement. In fact, I think the word that you used was that if you were 'genuinely' confused you would not be prosecuted, but if you were confused you would be prosecuted. What's the difference?

13:50

Well, the difference is, Llywydd, that that is not what I said. [Laughter.] That's the first difference. What I said was, in answer to a question, that the enforcement authorities in Wales will pursue the same policy in relation to 20 mph zones as we became familiar with during COVID, that they will begin with engagement. Where people genuinely do not understand that the law has been broken, then they will engage in education with those people, and they will only take enforcement action when they are sure that that is needed to keep roads and communities safe and where the evidence is of wilfully breaking the law. So, what I said was: where people are genuinely confused, then the system will seek to engage and to educate them. Where people claim to be confused but there is no evidence that confusion lies at the root of their behaviour, then they cannot expect that enforcement action will not be taken.

Well, that's as clear as mud, isn't it, First Minister? I mean, I've got the words that you used here. You actually said that the 'genuinely confused' would not be prosecuted or fined, and then you went on to say, 'rather than just being confused.' You can imagine the conversations—. Those are your words. If you want to take issue with it, take it up with the BBC, because it's a direct quotation off their website.

Now, the blanket 20 mph that your Government brought forward has proven to be deeply, deeply unpopular—deeply unpopular. It's a national speed reduction—[Interruption.] It's nice to see the Deputy Minister back here, chuntering from a sedentary position again. It has caused huge amounts of concern the length and breadth of Wales, and the way it'll be implemented and the fines that will arrive on people's doormats will jeopardise livelihoods and lose people's jobs, without the solid evidence that would show the support of the points that you have made. So, I say to you again: what conversation have you had with the Crown Prosecution Service and the police to distinguish between the 'genuinely confused' and the 'confused', so that ultimately police officers and enforcement services will not be prosecuting people who are on the wrong side of this law through no fault of their own?

Well, Llywydd, we've had a discussion already this afternoon about deliberate misinformation, and the leader of the opposition continues to do that here this afternoon. He says that this is a blanket ban. He knows absolutely that it is not a blanket policy. As I've understood it, he himself is in favour of 20 mph zones in certain circumstances. I've seen him with placards demanding 20 mph zones outside schools, outside hospitals and so on. Even he doesn't believe in a blanket policy, and it quite certainly is not the blanket policy of this Welsh Government. It never was, it never has been, and it isn't a blanket policy today. The fact that he continues to repeat it and he knows that it isn't true is a very good example of the points that Ken Skates made in his question about misinformation being far too close to home in this Chamber as well as in the outside world.

Police will enforce the policy in the way I have just described, Llywydd. Enforcement action is the last, not the first, resort. The first resort is to make sure that people have understood the rules, and, where people need to have their understanding extended, then that is what the system will do. Where people drive dangerously, where people deliberately and knowingly break the law, then the police will take enforcement action, and I would expect the leader of the opposition to endorse that position and to support the police in their actions.

Anyone who drives dangerously or deliberately breaks the law deserves to be prosecuted, but when you bring bad law forward that isn't clear, such as the law that you have brought forward here—the tweet that the Deputy Minister put out yesterday said that the threshold for prosecution now is not the 24 mph that would normally be adhered to, which is 10 per cent plus 2; it is now 10 per cent plus 4—and then the First Minister stands at a press conference and says that if you're genuinely confused rather than confused you won't be prosecuted, what hope have the police got and the CPS got? And that's the point we're making. This is a bad piece of law, brought forward by your Government, that is actually more confusing and more dangerous. And ultimately this piece of law should be withdrawn and commonsense prevail. And your two leadership candidates, one of the first statements they made was to promote a review of this piece of legislation. So, ultimately, it shows that even on your own benches there is disquiet about this piece of legislation that you've brought forward. So, why don't you just scrap this piece of legislation and move back to the 30 mph that we had in this country before 17 September?

13:55

Well, Llywydd, there is a series of points in there, but surely the most significant of all, and the one of which he should be deeply ashamed, is his suggestion that it is somehow legitimate to break a law simply because you think it is a bad law. [Interruption.] Oh, no. How many times did he say, 'This is a bad law’? And what he intends to do is to encourage people to believe that, if you think a law is a bad law, somehow it is legitimate for you to break it. [Interruption.] Well, that is the message that people outside this Chamber will take, and you know that you are doing it as you do it. [Interruption.] I'll tell you now that when you get up and say here that there are good laws and there are bad laws, you are encouraging people to believe that it is legitimate for them to act differently depending on how they themselves perceive the law, and that is a deeply, deeply dangerous message, and it is a particularly dangerous message for somebody who comes here to make the law. Every single person in this Chamber has a responsibility for explaining to people that if you make the law, you must uphold the law, and that law is there to be upheld. It will be upheld, it will be upheld sensitively and sensibly, and a good deal more sensibly than he has been this afternoon.

Thank you very much, Llywydd, and may I start by wishing everyone a very happy new year? And may I pay my own tribute to J.P.R. Williams, a true icon of my childhood, one of my first rugby heroes? And we remember him today, as we remember the journalist Vaughan Hughes and the singer Leah Owen—2024 has brought a heavy price already; we hope for a better year in terms of health and peace.

It will be a crucial year politically, with a general election and a race for the Labour leadership in Wales.

The year began with the candidates to be the next Labour leader in Wales setting out their stalls. All sorts of plans, including one five-point plan. I'm sure the First Minister winced at that. Maybe it's okay for his own side to come up with five-point plans, but not us in opposition. But no matter how many points are in the plan, there is no more important a priority now, I guess, than fair funding for Wales. The First Minister will know that, given the budget we're going to be debating later on.

One pledge by the education Minister in his leadership bid is to reverse the cuts that are due to come in in his own budget, but only if he gets more money from Whitehall. He's making my argument for me. But, of course, the Tories won't pledge more money for Wales. They're not interested. And as we've seen with HS2 consequentials, Keir Starmer is refusing to make that pledge too. The First Minister hasn't been able to get that pledge from him. What makes him think that either of his potential successors will be able to?

Well, Llywydd, the leader of Plaid Cymu's obsessive interest in the Labour Party continues. I'm quite happy to start the new year by sending him an application form, and then he'll be able to take part in the affairs of the party to which he devotes most of his attention here on the floor of the Senedd.

The position of this party has always been that fair funding needs to come to Wales, that the Barnett formula is well past its effective date, and that funding based on need would see a different flow of funding here into Wales. That is the policy of the Welsh Labour Party and the Welsh Labour Government, and we will continue to mount the arguments for it.

The First Minister says again—he's said it before—that I'm somehow obsessed by the Labour leadership. It's not obsession. Before Christmas, he was saying that it was none of my business who the next leader of the Labour Party is. As far as I know, that new leader is going to become our First Minister. It's all of our business, and it's called scrutiny. Maybe he's saying there should be an election immediately so it's all of our business who becomes the next First Minister for Wales. But, when it comes to expectations around funding, we can only go on what we're being told or what we're not being told by both Labour and the Conservatives; it's why we need Plaid Cymru to stand up for fairness for Wales.

Now, both candidates—both candidates—to become the next Labour leader in Wales want to prioritise the NHS. Few would disagree with that. One has a vague pledge that spending per head on the NHS in Wales wouldn't fall below England, which is a pretty weak promise, if we're honest, and which also suggests it is all about money, but as the director of the Royal College of Nursing in Wales said last week, we keep being told there's no money, yet we're not thinking creatively about how we use the money that is in the system. Will the First Minister join me in calling for really creative thinking in this campaign, which is lacking so far? Will he also call for honesty about the candidates' record in Government, because you'd think that neither had been a Minister before by what they're saying? And does he share my disappointment that neither are pledging to demand fair funding for Wales from Labour bosses in London?

14:00

Well, Llywydd, I think we'd be more open to lessons in the Labour Party about how we conduct our leadership election campaigns if we were being talked to by a party that had a leadership election in the first place.

Well, I wish the First Minister wouldn't be so obsessive about how we changed our leadership in Plaid Cymru. [Laughter.]

One last question, if I may, again linked to some of what we've heard in the Labour leadership campaign, that I believe I'm able to talk about this afternoon in the Senedd, Llywydd. Both candidates have pledged a review of the implementation of the new 20 mph limits. It came as a bit of a surprise to me, given that Plaid Cymru put forward an amendment here in the Senedd four months ago calling for that review—an amendment that was passed with Government support. Now, my position is that 20 mph works well in most places. We've supported the principle. It was brought in by Labour, but it was a Conservative Member who first proposed the idea to the Senedd. But there are some places where I feel it's unreasonable, there's inconsistency, and it just makes sense to me that a review takes places. Now, are the two candidates for the leadership saying that four months after the Plaid amendment was passed, nothing has happened, or do they just not know about it?

Well, Llywydd, the reason that the Government supported the Plaid Cymru amendment is that it was Government policy, because I said the very first time I was asked a question about 20 mph policy that, of course, a change of this magnitude would need some time to settle in and that it would need to be reviewed to make sure that it can be fine-tuned. I agree with what the leader of Plaid Cymru says, that there is evidence of some inconsistency in the way the guidance has been implemented by different local authorities, and there are some anomalies in the way the guidance has been interpreted, so it is both the policy of the Government and the policy of my colleagues that we should review the evidence and iron out any of those inconsistencies or needs for fine-tuning in the policy. That's the policy of the Government; that's why the Plaid Cymru amendment was supported, and that's exactly what will happen.

Gender Self-identification

3. Will the First Minister provide an update on the Government's position on gender self-identification? OQ60478

Llywydd, gender recognition is a reserved matter. Our commitments on gender recognition and supporting trans individuals remain as detailed in our LGBTQ+ action plan, and outlined in our programme for government and the co-operation agreement.

First Minister, in the summer the UK Labour Party finally u-turned and abandoned its support for self ID, after realising the profound impact it would have on fundamental women's rights. It's a world away from your stance on the issue here in Wales, where you seem intent on imposing self ID. We will, of course, all be very interested to hear the candidates for First Minister's stance on this issue, but there is clearly a divide between the Labour Party in Westminster and Welsh Labour on whether to pursue gender self ID. First Minister, I simply want to know: who is right on the issue, you or Keir Starmer?

Well, Llywydd, another application to join the Labour Party—the second we've had this afternoon. I've set out our policy. It is set out; it is our policy as is set out in our LGBTQ action plan, and that is to recognise the rights of trans people here in Wales, a group of people who are more ostracised and unprotected than almost any other group, and where hate crime against trans people in Wales increased by 11 per cent in the last year. I make no apologies at all for making sure that our actions as a Government are designed to recognise the rights of those people, and to make sure those rights are respected.

14:05
Improving Educational Outcomes

4. What is the Welsh Government's strategy for improving educational outcomes? OQ60477

Llywydd, sustained investment in twenty-first century facilities, a new Curriculum for Wales, and a continuous focus on the quality of teaching in the classroom are amongst the measures being taken to improve educational outcomes in Wales.

First Minister, we've seen the Welsh Labour Government cutting funding for education in its most recent budget. That's despite the current education Minister touring the country, saying it wouldn't happen on his watch, but not before he votes for it today. But they come against the backdrop, yet again, where Wales ranks below England, below Scotland and below Northern Ireland in the latest Programme for International Student Assessment rankings, in every subject assessed. We need to turn education around in Wales.

The Welsh Conservatives have a plan to prioritise education by putting 5,000 more teachers back into classrooms, supporting those with additional learning needs, and developing an enhanced programme for more able and talented learners. First Minister, how can it be justifiable that the Welsh Government is simultaneously cutting education budgets whilst wasting millions and millions on vanity schemes like 20 mph speed limits and more politicians?

Well, Llywydd, I look forward to the proposals of the Conservative Party during the budget process. They will find they're not able to spend money twice; so money that's been spent already will not be available to fund their plans. The revenue support grant in Wales, which is the main vehicle through which education services are supported, has not been cut; it will rise by 3.1 per cent again this year—well in advance of support for local authorities in England, by the way. And if any party or any individual Member has a plan to spend any more money, in a budget that is worth £1.3 billion less than when it was originally set, then there will be a responsibility on that individual and that party to tell us where the reductions will come to support it. If you have a plan to spend more in one area, you will have to tell people where your plan is to spend less in another. And it can't be by pointing to money that has already been spent, because that simply won't be available to you.

First Minister, in December, there was a global research paper published by Cambridge and Zurich universities—240,000 students from across the world—and it found that the relative underperformance of disadvantaged students at school has little to do with them lacking the character, attitude or mindset of their wealthier peers. The lead author said:

'The idea that children can overcome structural disadvantage by cultivating a growth mindset and a positive work ethic overlooks the real constraints many disadvantaged students face, and risks blaming them for their own misfortune.'

For the young people in this paralysing situation, it will follow them into the world of work, illustrated recently by information from the High Pay Centre, who have calculated that the bosses of the FTSE 100 companies made more money in 2024 by lunchtime on 4 January than the average UK worker will earn in the entire year. We cannot stand by and allow such an unlevel playing field to continue to exist. It is clear that the UK Tory Government don't want to admit this link between their austerity measures tanking the economy and our public services, and the impact that this has had on our children and young people. But would you agree with me that tackling the impact of poverty on attainment must be at the heart of what Welsh Labour do, to help free young people from the structural disadvantage that this poverty can create? Diolch.

Well, I thank the Member for Bridgend for that extra question, Llywydd. The Cambridge study was, I thought, very interesting, because it does demonstrate that while there is a lot you can do, through motivation and encouragement and so on, the fundamental barriers that face young people in any system are those of poverty and inequality, and we have lived through an era in which inequality has got worse year on year. The United Kingdom is now the most unequal country in the whole of western Europe, and that means that the life chances of so many young people are compromised before their life has even begun.

Here in Wales, I think we can genuinely say that we have taken those issues seriously. If you look at the PISA results to which Tom Giffard referred, the attainment gap in Wales is lower than in any other part of the United Kingdom: lower for maths, lower for reading, lower for science. And that demonstrates, I think, the way in which, as a Government, we have been serious about trying to make sure that those young people who need the help the most receive that help to the extent that we are able to provide it here in Wales.

14:10
The Provision of Apprenticeships

5. What discussions is the Welsh Government having with key stakeholders in the work-based learning sector regarding the provision of apprenticeships? OQ60493

Llywydd, Welsh Government officials met with all 10 apprenticeship providers in Wales prior to the Christmas recess. We will continue to discuss with the sector how best value can be achieved from the £138 million that will be invested in apprenticeships in Wales in the next financial year.

Thank you for that response, First Minister. 

And I am sympathetic to the difficulty the Government faces with this budget, but a cut to apprenticeship funding deeply concerns me. Its effects will be felt for some time, and we are talking about the futures of so many young people here in Wales. Apprenticeship providers are raising concerns, further education colleges are facing uncertainty about their own futures as institutions at a time when we need them more than ever to realise our ambitions around economic development. Now, the sector tells me that there's no clarity on what will change, except for the loss of funding. Therefore, would the First Minister provide some clarity on the future of apprenticeships, other than the FE sector needing to do more with less?

Well, Llywydd, as I said, our conversations with the sector continue. What I can say is that even with the reductions that have had to be made in the budget for next year—reductions, by the way, made up not simply of the fact that our budget is worth £1.3 billion less, but by the loss of £375 million annually of EU funding, because EU funding in Wales has been at the heart of our ability to expand apprenticeship provision. The levelling-up scheme, which is its replacement by the UK Government, specifically forbids local authorities from pooling money together for these sorts of Wales-wide purposes, and one of the solutions to the problem that we find ourselves in in this area is the solution that the Labour Party at the UK level has already endorsed, and that is that under a future UK Labour Government, responsibility for decision making over post-EU funding will return here to Wales.

In the meantime, apprenticeship starts will still be at the level achieved in the last Senedd term, and we will continue to have a focus on those sectors where we know those apprenticeship opportunities make the greatest difference—construction, care, engineering and health—and there will be an alignment between the way we spend our apprenticeship money and our young person's guarantee to make sure that young people needing that start in their careers continue to receive it here in Wales.

First Minister, in Pembrokeshire there is an anticipated cut of up to 50 per cent of new apprenticeship starts in the contract year from August 2024, which will have a big impact on these skills in the local area. And I appreciate very much the pressures on budgets across the whole Government, and, of course, pressures for all Governments when it comes to finances. Now, as you know, my constituency is strategically important to Wales and the UK's energy needs, and with the development of a free port and advancements in floating offshore wind, the time to invest in skills and developing the workforce, of course, is right now. So, can you tell us what specific discussions the Welsh Government is having with stakeholders in Pembrokeshire regarding the provision of apprenticeships? And can you also tell us what the Welsh Government has learned from the delivery of skills programmes in other free ports, and how that could help deliver the skills needed to support the Celtic free port? 

Llywydd, as I said in my original answer, Welsh Government officials met with all 10 apprenticeship providers in Wales just before the Christmas recess, and those conversations will continue. And they will certainly have met with providers in the Pembrokeshire area. I take very seriously the points the Member has made. There are new opportunities in that part of Wales, and new skills will be required in order to make the most of the opportunities that are there from renewable energy on the sea and from the sea. Those points will be taken very seriously in those discussions. 

In the end, there is a fixed budget within which the Welsh Government has to operate. The reduction in apprenticeship funding is less than in a number of other areas that the Minister has had to find within his own budget. The most we ever spent in a single year on apprenticeships in Wales was £147 million, and in the next financial year we will spend £138 million. So, we will be focused on what we can do with that very significant sum of money, and that will include what we can do for those young people in Pembrokeshire looking to those new possibilities for the economy in that part of Wales. 

14:15

First Minister, I’ve had discussions with representatives from ColegauCymru, and I’m sure Luke has as well, and I thank him for the way he’s presented this question, cognisant of the real financial perils that we are currently in, which the First Minister has outlined. Paul also said the same. But we’ve met with them, and for us, in our area, like Bridgend, apprenticeships are very much the way into skilled, well-paid occupations, lifelong occupations. But we can’t ignore the financial constraints currently on the Welsh Government, partly because of the loss of EU funding and partly because of the loss of control over funding of apprenticeships, which we should have here in Wales, not being administered from Whitehall.

But as we enter this period where there are real storm clouds, I think, can I just seek an assurance that he will, and his Ministers will, work intensely with the college sector, and with work-based providers as well, to get us through this storm? Because we must hope it cannot always be this bad with budget settlements, it cannot always be this bad with settlements for training of our young people as well. We will get through this, but in order to do so, the Welsh way of working in partnership to get through it is going to be more critical than ever. 

Huw Irranca-Davies points to a fundamental problem here, and that is the way that the apprenticeship levy operates. I was the finance Minister, Llywydd, on the day that the UK Government announced that Wales would be getting, as I recall, £109 million extra for apprenticeships through the levy. It was only when you read down in the small print that you found that we were losing £117 million in the cuts that they had made to other forms of funding for apprenticeships in Wales. So, we weren’t gaining £100 million; we were actually losing money. There’s a flaw at the heart of the way in which this is funded, and Wales is not well served by that model at all.

I’m very happy to give an assurance to the Member, however, that that partnership way of doing things, being around the table even when there are difficult decisions to be made, is the way that we will navigate our way through next year, bringing those providers together, hearing the voice of young people as well in those choices, and the preferences of employers. In that way, we will find a path to make the maximum value out of the very considerable sums of money that will still be invested in this area.

Community Safety in Mid and West Wales

6. Will the First Minister make a statement on the impact of the Welsh Government's draft budget on community safety in Mid and West Wales? OQ60487

I thank Cefin Campbell for the question. Next year's revenue budget is worth £1.3 billion less than Chancellor Sunak said was needed for Wales when setting that budget in October 2021. The draft budget focuses on those community safety responsibilities devolved to the Senedd. There is simply less money available to fill gaps in services that remain the responsibility of the UK Government.

First Minister, I'm very grateful for the innovative role played by the Welsh Government in funding police community support officers, contrary to the underinvestment in policing that has happened under the Tories at Westminster over the last decade and more. There's no doubt that PCSOs play an important part in communities in Mid and West Wales, and more often than not they operate as important eyes and ears within our local communities. I know that the Government appreciates the work that they do, and already funds some 600 of them across Wales.

However, in the draft budget, a cut of £7.5 million in the PCSO budget was announced, and the budget also suggests cutting funding for the police schools programme, which holds important conversations in all primary and secondary schools on a range of issues, including substance misuse and online safety. This is a service that's very much appreciated by schools, parents and pupils alike. So, as these two services are at the core of developing close relationships between communities and the police force and assist in tackling crime, can I ask what steps the Welsh Government intends to take to mitigate the impact of these cuts on community safety and on law and order more generally?

14:20

I thank Cefin Campbell for those supplementary questions. Of course, we do appreciate the work that PCSOs do here in Wales. That's why the Government invested in PCSOs at a time when the number of people working for the police had fallen after cuts from the UK Government. And we have supported the schools programme as well. But we've come to a point now where—as I said in the original answer—we have to focus on the responsibilities that have been devolved to the Senedd. And when there is less money available, one of the things that we can do is focus on those things where we receive funding to do things. 

It's simply not possible, Llywydd, when your budget has been squeezed to the extent that ours has, to go on filling gaps left in services for which this Senedd is not responsible. We will still provide over £15 million to support PCSOs here in Wales. But the fact that we are not able to go on filling those gaps to the extent we have in the past has allowed us in the community safety area to go on funding without reductions those measures in the 'Anti-racist Wales Action Plan', the Wales Hate Support Centre, the community cohesion programme, the work we do jointly with the police in relation to substance misuse, and the investment we will make in community mental health services. All of those are part of that wider picture of community safety funding in Wales. We've protected the services for which we are directly responsible and we have had to—despite our appreciation of that work—pull back from some of the funding that we have been able to make in services for which the responsibility and the funding responsibility lies elsewhere. 

Good afternoon, First Minister. I also wanted to follow up on the issue of PCSOs, understanding totally the budget restrictions that the Welsh Government has, and to talk about the responsibilities of the police and crime commissioners and how they potentially could help to increase community engagement when it comes to tackling crime. I facilitated a community meeting in Aberystwyth with the local councillors and the police and crime commissioner, and that was two years ago. We're still waiting for improvements there. So, I just wondered what conversations and what improvements you feel could be made in working with our police and crime commissioners across Wales to help in that community engagement. Diolch yn fawr iawn. 

Happy new year to Jane Dodds, and I thank her for her question.

We have very regular engagement as a Welsh Government, primarily through the Minister for Social Justice, with our police and crime commissioners. Formally that is done through the policing partnership board for Wales that we jointly chair, but it also happens beyond the board itself, with many conversations with the lead commissioner—the north Wales commissioner as that is at the moment—and with other commissioners across Wales. And, of course, Llywydd, with elections for police and crime commissioners happening in Wales in May, the coming months will be an opportunity for direct conversations between Welsh electors and their candidates to be police and crime commissioners in order to achieve some of the things that Jane Dodds pointed to: a close alignment between the ambitions of police and crime commissioners and the expressed needs of those local communities. 

Poverty in South Wales East

7. What is the Government doing to address poverty in South Wales East? OQ60491

We continue to utilise all the levers available to us to support those living in poverty in South Wales East and across Wales. Our draft budget prioritises help for those households that are hardest hit and leaves money in the pocket of those who need it most.

14:25

Thank you for that answer.

Over the Christmas period, the Trussell Trust released figures that showed that Wales has the highest foodbank use of any UK nation; in fact, when the figures are broken down, you'll see that Wales has a higher foodbank use than any part of England. The increase in the numbers of people using the service in the last year is particularly stark. This has been followed by the news that EDF, Octopus and Scottish Power have been given permission to restart involuntary prepayment meter installations, just as energy prices rise. Can you ensure that you will do everything in your power, in your last weeks in office as First Minister, to ensure that the most vulnerable in society are not disproportionately affected by budget cuts or decisions taken in Westminster?

I thank Peredur Owen Griffiths for that, Llywydd. The Trussell Trust figures are stark, and they demonstrate the point I made earlier about the sharply unequal society in which we live and the impact of the cost-of-living crisis on so many families here in Wales. We will quite certainly be holding the regulator to account for the decision they have made to allow companies to make applications for involuntary prepayment meter installation. The regulator has published a set of rules, which are significantly stricter than the previous arrangements; they don't go far enough, in our view, but they are a considerable advance on the previous position. It's for the regulator now to ensure that any applications that make their way to the courts are consistent with the rules that they themselves have set out.

We've talked a lot about the budget this afternoon, Llywydd, and one of the areas where you can most plainly see the priority that this Government has placed on defending those people whose needs are greatest is exactly the area that the Member has raised in his supplementary question. Our investment in the discretionary assistance fund will be the highest ever next year; we will continue to find £280 million together to support council tax benefit and £93.5 million to implement universal free school meals as part of the co-operation agreement; there is no reduction in the amount of money in the budget for the school holiday enrichment programme; the pupil development grant will remain at this year's heightened level into next year as well. There are some very difficult decisions in the draft budget that we will be debating later this afternoon, and we've heard some of those difficult spots this afternoon, Llywydd. But when it comes to those services that most directly affect those who are most in need, it was the collective determination of this Cabinet that those budgets would be protected, and you can see that in the budget.   

South Wales Fire and Rescue Service

8. Will the First Minister set out the Welsh Government’s response to the Independent Culture Review into the South Wales Fire and Rescue Service? OQ60485

Llywydd, this is a highly critical report that exposes underlying failures in leadership, governance and decision making within the service. It demonstrates the need for fundamental cultural and managerial change. The Deputy Minister for Social Partnership will make an oral statement setting out the Welsh Government's initial response later this afternoon.

Thank you, First Minister. I must say that I found Fenella Morris KC's culture review into the South Wales Fire and Rescue Service to be a very sobering read indeed. Despite the serious deficiencies evidenced, we must remember that the review's findings do not apply to all members of the service, and we must recognise the bravery and professionalism of those men and women who put themselves in danger to keep us safe. However, the review is an urgent call for action. Ahead of the Deputy Minister's statement later today, I would like to ask you, as First Minister, what action the Welsh Government is taking to drive through that change in culture that is so desperately needed.

I thank Vikki Howells for that, Llywydd. She makes an important point that when a report of this sort is published, and it is a shocking report to read, one of the difficulties is that it casts a shadow over all of those people who do such good work in the service every single day. The Deputy Minister will set out a hard-hitting set of responses that the Welsh Government will make to this report. 

The fire and rescue service is a constitutional anomaly in the sense that many of its responsibilities are not exercised at all here in the Welsh Government. But when a service fails, there are things that we can do, and the Deputy Minister will set out her initial thoughts about the actions that the Welsh Government may need to take in order to help with the recovery of that service, and to ensure that there are high-quality fire and rescue services available to the people of south Wales, delivered in a way that does not demonstrate the breakdown in culture and chains of responsibility that the report of Fenella Morris so vividly illustrates. 

14:30
2. Business Statement and Announcement

The next item will be the business statement and announcement, and I call on the Trefnydd to make that statement—Lesley Griffiths. 

Diolch, Llywydd. There are three changes to this week's business. Shortly, the Deputy Minister for Social Partnership will make a statement on the South Wales Fire and Rescue Service review of culture and values. The Minister for Economy will then make a statement on the compound semiconductor industry, and, finally, the Deputy Minister for Arts, Sport and Tourism will make a statement on the statutory registration and licensing of visitor accommodation. Draft business for the next three weeks is set out on the business statement and announcement, which can be found amongst the meeting papers available to Members electronically. 

Trefnydd, can we have two statements, please, from the Government? The first on the bus services across Wales that have been affected by the change in the default speed limit. There's an issue in my own constituency, in that the Arriva 51 service, which traverses rural Denbighshire, is axing its stop in the village of Llandegla, and it's a stop that is very important to those who use it; it's a lifeline, actually, for many people. And that service is going to be reduced, it's not going to stop, and the explanation that Arriva buses has given to local people is that that's because of the fact that the 20 mph speed limit change has added to the length of the journey that that bus needs to make, and it means that it's unable to stop at all of the stops it was previously able to service. Clearly, that's a concern for my constituents. I suspect it's happening in other parts of Wales as well—according to media reports that's certainly the case—and I do think it would be helpful to have a statement from the Deputy Minister for transport in order that he can address that particular issue and the local concerns. 

In addition to that, can we have an update, please, on the delivery of the north Denbighshire community hospital? There have been some positive developments of late, in that I know there have been discussions taking place between the Betsi Cadwaladr University Health Board and, indeed, the local authority, Denbighshire County Council, and the Welsh Government, about getting that project back into the pipeline. It's over a decade since it was promised. We were told initially, when that promise was made, that it would be delivered within three years, by 2019. It's now 2024. We've just started the new year, and I think people in north Denbighshire, and, indeed, the other parts of the north Wales coast that that hospital could serve, are looking for some good news. So, I'd be very grateful if we could schedule an update on that particular issue as well, please.

Thank you. With regard to the first question around a statement in relation to bus services and the default 20 mph scheme, I think it's fair to say that the majority of buses probably didn't travel much faster than 20 mph. And, certainly, in my own constituency, where I've received concerns about that, I think it's fair to say that, perhaps, that is being looked at in a way that perhaps isn't correct, and I know that the Deputy Minister has been having discussions with Transport for Wales—sorry, with Arriva bus services, in relation to this. I know those discussions are ongoing. I appreciate that, for some bus services in Wales, cuts are having to be made, and, as you rightly point out, they are a lifeline for many of our constituents, and those discussions, I'm sure, will be ongoing. 

In relation to your second point, again, I know there have been further discussions with Betsi Cadwaladr University Health Board and the Minister for Health and Social Services's officials. I will ask her—. I don't think it appropriate for an oral statement, but I will certainly ask her, if there is further information, to write to you. 

I'd like to ask for a written statement setting out the guidance that's given to councils on the importance of community assets and keeping those spaces open. In Caerphilly over the past week, there's been concern about a decision to close the tourist information centre. And it isn't just a tourist information centre, it's actually a very popular cafe, a hub for people in the area. The site also houses a gallery that showcases local art, and public toilets. It's a really important asset locally to the community. It has probably the best view of the castle in the entire town; it's great for attracting tourists. And there has been, I think, bafflement locally at how a decision like this could be made without notifying staff. This is a local decision—the Welsh Government has no bearing on it. I think it would be useful to set out a statement, showing what guidance could be given to councils, perhaps what support could be given to councils, to help ensure that community hubs like this can be saved, so that, as the Caerphilly Observer has put it, a value can be attributed to local amenities like this that goes beyond any number that could be added to a spreadsheet.

14:35

Thank you. I am pretty sure that guidance is provided in relation to community assets. You will appreciate the budget situation that we are all in, and I'm not quite sure if any financial support at all could be given. I will certainly—. The Minister for Social Justice is in her seat and will have heard your question. If there is any other type of support that could be offered, and that guidance could be updated, then we will certainly have a look at it.

This request has been raised before, but I make no apologies for raising it again, because it's an ongoing issue. I wonder if we could have a statement on the co-ordination of what's known as food waste, but it's actually food surplus, collection, distribution—jointly, actually, from the Minister for Rural Affairs and North Wales, and Trefnydd and the Minister for the Minister for Social Justice—to discuss and explore ways in which we can get more effective co-ordination of food collections from supermarkets and charitable organisations like FareShare to the food pantries, the foodbanks, Big Bocs Bwyd, and others, throughout my constituency and throughout Wales. There is such a great effort at community and voluntary level to ensure that food surpluses are not going to waste but are instead going to foodbanks like Bridgend foodbank for distribution, with vouchers, or to food pantries like Baobab Bach for distribution as exceptionally good-value bags of heavily discounted food, or the Noddfa in Caerau, selling discounted items, or pantries and kitchens combined, like Graham and the volunteers at Caerau Development Trust in Caerau, providing either affordable cooked food or ingredients, or actually a place where they prepare and cook the food for people. But they all face the problems of co-ordinating the collection, the distribution and storage of food surplus. At worst, we can end up with competition and inefficiency and waste of that food. So, could we have a debate or a statement on the role that Welsh Government can play in assisting these organisations to work together more effectively, and make the increasingly scarce resource of surplus food go to those who need it, and not to waste?

Thank you. I think Huw Irranca-Davies raises a very important point. As you say, I do work jointly with the Minister for Social Justice in relation to this area, but the Minister has really led, I think, having recognised the need for that co-ordination and leadership. She grant funded public bodies to establish local food partnerships, led by a local food co-ordinator. You mentioned several organisations in your own constituency; I'm sure we all can. Particularly in the run-up to Christmas—I'm very aware of the significant work that was undertaken in my own constituency, from supermarkets who then gave food 'surplus'—I think it's important to say that rather than food 'waste'—to organisations and to charities, to make sure that that food was shared as widely as possible. The Minister for Social Justice has pump-primed capacity in the way I explained, and I think those community organisations and those public bodies are well placed to take that work forward. There are a myriad of food-related initiatives in communities right across Wales doing good work, and I don't think the Welsh Government would be able to co-ordinate it perhaps in the way that you have said. But please be assured the Minister for Social Justice really leads on this area, and we do work with community organisations to build on that local partnership model.

Good afternoon, Trefnydd. I'd like to call for a statement from the climate change Minister that outlines the expectations of using mandatory standards in housing developments and their associated infrastructure developments. I recently spent time with residents in Rossett in Wrexham, who I am sure you will know well too, who are concerned with a future housing development going ahead on the edge of the village. Their primary concerns are around flood risk. But aside from the flood risk, they've highlighted to me how, in a number of areas within the proposed development, mandatory standards as set out by the Welsh Government are not being planned to be adhered to. It seems to them and to me to be a contradiction to have mandatory standards that are not mandatory. So, I'd be keen to hear from the climate change Minister how she sees the use of mandatory standards in housing developments and their associated infrastructure, and whether they are actually mandatory or not. 

14:40

Well, I think the Minister for Climate Change is very well aware of what is mandatory and what isn't, and it is a matter for local authorities, working with developers, to make sure that those mandatory requirements are adhered to. I'm very well aware of the particular issue that the Member has just raised, but I don't think it needs an oral statement, because that guidance, those regulations and that legislation are very well established.

Good afternoon, Trefnydd. I wonder if I could have a statement from the Minister for Social Justice in relation to the Bwndel Babi programme. It was very disappointing to see that the draft budget has cut, it seems, £3.5 million from the Bwndel Babi programme, a scheme that was piloted by the Welsh Government in the Swansea bay area in 2020, and was deemed very successful. The Minister expressed how she was delighted at the time, back in May, with the programme and how it was a universal gift. And it now looks as if it's going to be a more targeted approach in providing these bundles, which are really vital to everybody and shouldn't be targeted, but should be universal. So, I wondered if we could have a statement, particularly on the criteria and the eligibility for these baby bundles. Diolch yn fawr iawn. 

Thank you. This actually sits in the portfolio of the Deputy Minister for Social Care, and she absolutely remains committed to rolling out the baby bundles to more families during this Senedd term. The reduction in budget has absolutely required us to reflect on our approach to deliver this programme for government commitment and ensure that it does reach families through the ongoing cost-of-living crisis. The Deputy Minister is currently considering a range of options for the delivery of the commitment next year, to ensure that more families in Wales have the essentials to provide their child with the very best start in life. The programme will continue to build on the success of the pilot, its evaluation and further scoping research will be undertaken to deliver positive benefits to new and expectant parents. So, whilst eligibility for a baby bundle is not yet agreed, we will, unfortunately, have to move to a more targeted approach going forward, to ensure those expectant parents in most need of support receive that support in the form of the baby bundle. The reduced budget will mean we will no longer be able to offer a bundle to all new and expectant parents across Wales. But I think targeting that approach will, hopefully, make sure that those people living or likely to live at risk of poverty—it will maximise the impact of that programme for those most in need. 

Trefnydd, I am seeking time to be made available to discuss the impact of the Post Office Horizon scandal on Welsh residents and the lessons to be learned. Sub-postmasters were wrongly sent to prison, they were made to pay back money they did not owe, they were bankrupt. So many lives ruined, so many livelihoods lost as well, and yet there still remains a number of serious questions to answer. Members may remember that I first raised this issue when the former leadership of the Football Association of Wales chose to appoint former Post Office employee Angela van den Bogerd. Thankfully, they changed their mind. But I've since been raising the issue in relation to how Hillsborough law could help ordinary people attain justice. For ordinary people to attain justice, Trefnydd, individuals need to be held to account. Now, obviously, I welcome Paula Vennells handing back her CBE this afternoon; she should never have been given one in the first place. But just because she's handed back her CBE does not mean she's been held to account. Neither does it mean Fujitsu executives have been held to account either. So, I'd be grateful for a debate in Government time to discuss this very serious issue on how we can make sure ordinary people do attain the justice and the truth they deserve. 

Thank you. I absolutely share your concerns about the sub-postmasters and mistresses across the country whose lives have absolutely been ruined by this scandal. And, of course, the recent ITV drama Mr Bates vs The Post Office has brought that back to the fore, I think, and really seized people's imaginations, I think, and perhaps people who weren't aware of the scandal before. Obviously, this is a non-devolved matter, but we know that there are people in Wales who have been and will continue to be affected by it, and you may have heard the First Minister say yesterday that we should have confidence in the public inquiry led by Sir Wyn Williams. However, I certainly agree that the matter of getting justice and compensation to those who are affected needs to be accelerated. It's taking far too much time.

I think the Member has been very diligent, Llywydd, in raising with the Counsel General the need for officials to be held to account for injustices faced by families who have been the victims of public sector failings, and it's hard to see how this could be delivered without the statutory duty of candour that is proposed by the Hillsborough Law Now campaign. Obviously, this is a matter for the Counsel General, and I will certainly ask him to update Members on what discussions he's had, because I think it would be something that would be better done on a UK basis.

14:45

Trefnydd, can I please ask for a statement from the Minister for Climate Change following the impact of flooding in my constituency of Carmarthen West and South Pembrokeshire? Like many parts of the country, the persistent and heavy rain that seemed to fall for much of the latter half of December on already saturated land caused severe flooding in parts of my constituency, with the arrival of storm Henk. In and around Tenby, including Gumfreston, Heywood Lane and the Clicketts, a red alert was issued for the River Ritec, indicating the chance of a loss of life, with water being described as 'jeep deep' on roads, cutting off routes for constituents. Also, the popular holiday park, Kiln Park, suffered its second record flooding event within 60 days.

Across the county border in Llansteffan during the same period, the residents of 21 properties were displaced when the Nant Jack stream overflowed and the culverts couldn't cope with the volume of rain. I saw for myself the Dŵr Cymru Welsh Water pump in the village of Llansteffan helping to reduce the flows of water to ensure the sewerage network wasn't overwhelmed. I'm sure the whole Senedd would join me in paying tribute to all those from local authorities, Natural Resources Wales, Dŵr Cymru and the emergency services for their work over the difficult flooding period. However, these flooding events are becoming more regular and are now affecting areas that are not usually associated with flooding. Therefore, can I ask for a statement from the Minister on what support is being made available to local authorities and NRW to mitigate floods and to help with the clean-up operation? And what lessons are being learned by the Welsh Government from the flooding of areas not normally affected by such floods? Diolch.

Thank you. Yes, the Minister will be bringing forward a statement either today or tomorrow—a written statement. 

Blwyddyn newydd dda. Trefnydd, could I have a statement from you, please, in your capacity as rural affairs Minister about the razor clam harvesting ban in Llanfairfechan and Penmaenmawr? And can I, again, put on record my thanks to you? It was actually around 2018 when I first came to you and said that residents were really concerned about hundreds of people harvesting these clams. So, the ban has been in place now nearly five years. I wrote to you recently; the ban has gone up again for another 12 months, but you did write to me in 2022 stating than an assessment of the razor clam beds at Llanfairfechan and Penmaenmawr has not been completed and that surveying intertidal razor clams at Llanfairfechan and Penmaenmawr will require a novel methodology that is yet to be developed, and that officials will continue to consider and evaluate potential survey methods over the forthcoming year. Can you clarify whether a particular survey method has been selected, and when—? Residents are already asking me, 'What have been the benefits, Janet?' Whilst we wanted those beds closed, what have been the true benefits of doing that, which we believe are many? We need a survey, we need a review, or something. We need evidence to show how that has been effective. But, diolch again.

3. Statement by the Deputy Minister for Social Partnership: South Wales Fire and Rescue Service review of culture and values

The next item will be a statement by the Deputy Minister for Social Partnership on the South Wales Fire and Rescue Service review of culture and values. I call on the Minister, Hannah Blythyn. 

Diolch, Llywydd. In December 2022, ITV News ran a story exposing serious misconduct by staff of the South Wales Fire and Rescue Service. It included a case of gross and prolonged sexual harassment by a firefighter towards a colleague at a fire station in Cardiff and a case of a firefighter convicted of domestic violence. In both cases, the response of management was wholly inadequate. Neither firefighter was dismissed or even suspended at the time. This compounded the suffering that their victims had experienced, and it also suggested serious problems with the service's corporate culture and values.

Immediately following the ITV report, I met the chair of the South Wales Fire and Rescue Authority and made clear to him the need for a thorough independent review of the service. He agreed to do so, and Fenella Morris KC was subsequently appointed to lead that review by the FRA. Fenella Morris KC spent most of last year gathering evidence and interviewing current and former staff members and others. Llywydd, I want to pay tribute to the individuals who have come forward and given evidence of the abuse, mistreatment, misbehaviour and mismanagement that they have suffered and witnessed. The courage that this has taken should not be underestimated. Without them, nothing might have come to light and nothing could now change—thank you.

The report was published last week on 3 January, and it is, in a word, damning. The headline finding is that discriminatory attitudes and behaviours exist at all levels up to and including senior management. It would be too simplistic to focus on the specific instances identified in the report, shocking and horrific as they are: misogynistic remarks excused as banter, sexualised images of staff in uniform, homophobic Christmas decorations or firefighters being forbidden to take the knee. All of these are, of course, repugnant and reprehensible. Those responsible for them have brought disgrace to the service and tarnished the high regard in which firefighters are rightly held. But the report also finds serious underlying problems: a boys' club exists within the service, especially within senior management; there is widespread staff discontent and demotivation, and a belief that nothing will ever change; promotion arrangements are widely believed to be subject to bias and favouritism; disciplinary procedures too often lead to inadequate sanctions or no sanctions at all; key human resources policies are out of date, inadequate or concerned more with protecting the reputation of the service than the rights of individuals; and the firefighting workforce remains overwhelmingly male and white, with little effective progress in addressing that. In short, there are many serious, long-running failures of management within the service. The norms, rules and processes that should exist within any well-run organisation appear to be missing or ineffective. That may well contribute to the incidents of misconduct that have been identified. If senior management operates in an autocratic way, if promotion depends on who you know, not how good you are, and if behaviour such as fighting on duty or posting hateful and discriminatory comments online is punished only with a warning, then it is unsurprising that those who are motivated to misbehave think they can get away with it. And, sadly, it is also unsurprising that they did get away with it.   

When I met the chair of the South Wales Fire and Rescue Authority yesterday, it was clear that he is taking the report seriously and accepts the recommendations in full. But that can only be the start of a long process of reform and cultural change. And I am far from convinced that the authority alone is capable of designing, overseeing and implementing that process. To be clear, the issue is not whether the Welsh Government becomes involved, but how and to what extent. In particular, I will need assurances on three issues. Firstly, how can sustainable change take place when so many of the existing management structures and practices have been implicated in failure? The retirement and replacement of the chief fire officer is nowhere near sufficient to stimulate and embed the degree of cultural change that is necessary; I will need to be assured that the capacity, capability and willingness to complete that change programme is in place.

Secondly, there is a danger that the identified failures might also affect the delivery of front-line services. Individuals who assault, bully, harass and victimise their colleagues are palpably unfit to discharge duties relating to public protection. Staff who experience or witness this kind of treatment, or who see promotion based on nepotism not merit, are very likely to be demotivated, mismanaged and badly led. And an organisation that tolerates such misconduct may be complacent and likely to accept other forms of bad practice too. If the South Wales Fire and Rescue Service's ability to discharge its core functions has been affected, then that would clearly be a very serious matter indeed, and I will need very clear assurance about that.

Finally, we need to understand the role of the fire and rescue authority in all of this. This report relates to failures of officer-level management, and it would be unfair to expect the authority members to be fully aware of every detail of management practice. But the authority is nonetheless the employer and the statutory body. It should show clear leadership and hold management to account. I am not convinced that it has done so.

I will be considering how the governance of the authority might be strengthened to oversee sustainable change and prevent a recurrence of these failures. I will reflect on all these issues urgently in further discussion with the authority and others, and I would urge our other fire and rescue services and, indeed, other public services to read and reflect on the report as an example of how badly wrong things can get if issues of good governance and management are neglected. But, to be clear, I am ruling nothing out in terms of Welsh Government support, direction or intervention in the South Wales Fire and Rescue Service. We simply cannot accept this level of discrimination and mismanagement in a public organisation charged with protecting people from serious harm. Llywydd, I will make a further statement to the Senedd as soon as possible. Diolch.

14:55

Can I thank you, Deputy Minister, for your statement today? As you have mentioned in your statement, the report makes for some very alarming reading, and it is disappointing that south Wales fire and rescue, which I believe, until recently, had such a positive public image, has been found to treat some of its staff in such an appalling way. This report reflects very badly on the whole of the executive leadership team, who, by all accounts, must have, at worst, been supportive of the working culture, or, at best, turned a blind eye to the conduct of many members. It's been widely reported in the press that Huw Jakeway has decided to retire from the service following this report, and I wonder, Deputy Minister, what steps you are now going to take to hold those whose job it is to prevent such misconduct accountable. Do you think that it is right that they remain in their posts, as I know of no such organisation that would have tolerated a senior leadership team with such a woeful disregard for the well-being of its staff?

Turning to the report itself, there are a few points that I feel need addressing. The first is that only 25 per cent of staff responded to the independent survey, and this in itself is a finding that needs to be investigated further. Is the lack of trust so endemic that 75 per cent of staff would not even go on anonymous record to express their views? I find it difficult to believe, Deputy Minister, that if the staff had an overwhelmingly positive view of working for the South Wales Fire and Rescue Service they wouldn't have come forward and expressed it.

Sadly, I've been contacted by several ex-employees of south Wales fire and rescue who have had an appalling experience working with the service. In particular, they outline that the complaints procedure is fundamentally not adhered to in the sense that they claim the service does not follow its own procedures properly and neglects to investigate serious allegations of discrimination and bullying behaviour. They also point out that when an allegation is raised against senior staff, the case is not investigated in an impartial manner. The investigative panel that is appointed for stage 2 is made up of one director and two heads of department. Each department head is connected personally to one another, since they all appear to socialise together. Moreover, once the internal process has been exhausted, which involves only one grievance meeting and appeal, the service will not allow staff to pursue this matter any further and they close the case. Deputy Minister, do you believe this investigative process is adequate to meet the well-being aspirations of staff?

In light of the serious accusations that have been made, Deputy Minister, of nepotism and a lack of openness and transparency, the fact that there were significant responses from staff who said that managers either never or rarely set the right example about how to behave respectfully towards those with the protected characteristics of race, religion, gender or sexual orientation, and that almost half of respondents—46 per cent—would not recommend the service as a place to work because of its culture, will you put on record that you will make a commitment to reopen complaint cases over the last decade to ensure that a robust evaluation was made and that proper procedures were followed? In light of these findings, I believe that we owe staff past and present that respect.

Second, Deputy Minister, it is clear to me from the report that there's an abject failure of the disciplinary process, which has clearly put some staff in a very difficult position. The results of the investigation show that when inappropriate comments were made, staff felt powerless, because they had only two options available to them: either they to take no action and live with the future comments and jokes at their expense, or start, as the report highlights, a heavy-handed complaints process that not only resulted in little to no action being taken, but also impacted on the positive aspects of the working relationships that they had and their career opportunities, because they would be identified as a troublemaker. It is also clear to me in this report that new procedures have to be designed that are more nuanced and allow for arbitration, a reconciliation between staff without necessarily having a formal complaint made. Is this something you agree with, Deputy Minister?

And finally, I would like to know how you intend to proceed with the other fire services in Wales, and whether you believe that other services should also have an independent culture review. Thank you.

15:00

The Deputy Presiding Officer (David Rees) took the Chair.

Can I thank Joel James for his contribution today? You shine a spotlight on many of the concerns raised through the report and the review, and also the recommendations for wider cultural and procedure and systematic change that Fenella Morris KC and the team involved set out, and, as you say, it is 185 pages of very difficult and distressing reading. I first had access to read the report on its publication last week, on 3 January, and, since then, I’ve read it again, and I read it again last night, and I think, each time I read it, it gets significantly more difficult to do so, but that should be the spur for the change that we know that we need to see.

If I touch on a number—. I’ll try and touch on what I can in terms of the points that you raise today, Joel James, in order to say that your contribution very much chimes with the recommendations made in the review and the need to move forward to make sure those recommendations are—[Inaudible.]

In terms of other fire and rescue authorities, as I said in my statement, whilst this review applies specifically to South Wales Fire and Rescue Service, I would expect other fire and rescue services and other public bodies to actually read and reflect on those recommendations. We know there’s been previously His Majesty’s inspectorate—relating to England, not applying to Wales—in fire and rescue authorities in England, and, when that was published, both myself and our chief fire adviser in Wales have been in correspondence with fire and rescue authorities in Wales with regard to actually how they meet assurances set out in those recommendations as well. So, it’s something we’re clearly very mindful of and very much on.

With regard to—. You talk about the current and former South Wales Fire and Rescue Service employees coming forward, and, again, I have, like many Members here, been approached directly or through other Members of the Senedd, and made sure that those people were able to take part in the process of the review, if that was possible, and very much recognise why people are deeply and understandably distressed about the treatment that they have received during their appointment, which, as you pointed out, Joel James, fully bears out in the conclusions on the need for robust action, and I would expect grievances like this to be reinvestigated properly so that the individuals concerned rightly receive the fair and just outcome that they may have been denied previously.

This report is a really tough read, and I appreciate the forthright response that we’ve had from the Government today. The testimonies from members of staff are heartbreaking at times, but they’re also essential in highlighting the unacceptable behaviours, practices and culture that have been allowed—allowed—to grow within South Wales Fire and Rescue Service.

‘It’s a man’s world’, says one testimony, and indeed the report speaks about a culture where sexist comments go unchallenged, inappropriate advances are made towards women, women are questioned whether they’re fit to carry out the job, women are silenced, and, in one extreme example, a male firefighter refused to speak to or even acknowledge women. And the report itself states that, sadly, this list is not exhaustive.

It’s also clear men are victims of this culture too, be that as a result of race, religion, sexual orientation, disability or simply, as you stated, they don’t have the right contacts within the service.

Tackling this toxic culture is about making the service fairer for everyone: for the people who work in the service, for the members of the public who are served by the force, and for those who might be thinking about starting a career in fire and rescue, and Plaid Cymru would like to make it clear there’s no place for any such culture in any part of our society, including our public services. The recommendations within this report must be implemented urgently, and, importantly, to the highest standard possible, because a failure to do so will only allow this unacceptable behaviour to continue, to the detriment of staff and the public alike.

The report concludes that everyone should be working together to achieve the goal of a modern culture within the service. So, my question is: what work is going to be done by the Welsh Government to ensure that the victims are being adequately supported, that the fire and rescue profession is a safe one for those with protected characteristics to join, and that the public, especially women and people with protected characteristics, have confidence and trust in the service?

As regards your response as to whether there will be a review of other fire and rescue services across Wales to highlight if this type of culture or type of behaviour exists within them too, well, we know that similar issues have been highlighted in a number of services in England, so do you agree, Deputy Minister, that it would be prudent to carry out the same sort of independent review of culture and values across the other two fire and rescue services in Wales, and, if available and for consistency, that the same team could be considered?

Staff deserve to work in a safe environment and to know that any behaviour of the frankly horrifying sort described in the report will be dealt with appropriately. Because what we've seen is a situation where a number of cases were not fully investigated, individuals were easily able to escape accountability—either by moving to other roles or retiring with full pensions—instances of misconduct were simply swept under the carpet. The review was very critical of the senior leadership team, and, despite the chief fire officer stating he'll step down, all other members of the senior leadership team remain in post—and many of those in management roles during the period of the review. We've also seen the chief fire officer receive a £12,000 pay rise during the period of the review, which brings into question the scrutiny being provided by members of the fire authority. So, will there be a review now led by the Government of how this has happened, and—? Because this is, as I'm sure you would agree, an absolute insult to all of the victims who have come forward during the period of the review to raise issues. And who is going to oversee the implementation of the recommendations? We heard the First Minister talk earlier about the need for managerial change, so can you explain to us what that looks like?

As the report itself states, do you agree that there should be provision also to pursue action against any officers who have left the service if any allegations of misconduct can be proven? Because this is surely crucial, both to restore public confidence and trust in the service, but also, importantly, to send a clear message that this type of behaviour in the workplace will not be tolerated. It would also ensure accountability for those who have been victims of harassment or abuse. So, will the Welsh Government intervene to ensure those who have been allowed to leave without action being taken against them are held accountable for any proven misconduct? As without action and without consequences this type of toxic culture could continue in our services and institutions. Diolch.

15:05

Diolch, Sioned Williams, for your contribution and for the very many important points that you made during that contribution, which I wholeheartedly agree with, as you would anticipate. You raise a number of key concerns and key issues that this review has raised and that will need to be acted on appropriately, robustly and as efficiently as possible.

In terms of the other fire and rescue services, if I could touch on that point initially, I think I said in response to Joel James, actually, in light of the—. Actually, first of all, I'd like to again pay tribute to the people that came forward and actually spoke out. It shouldn't be the case that they should have to speak out, that shouldn't be a culture that is able to persist and be permitted, but I'm grateful that they have done that to enable us to shed light on this issue, and actually hope we move things forward and achieve the change that we all want to see, and you're right in terms of saying the report recommends that everybody has a part to play, and this will be a collective effort. So, depending—. There will be a role for Government, whether that's through support, direction and intervention, but also working with partners in the WLGA and across public sector life as well, and I'm more than happy, like I said, to update the Senedd as appropriate, but also to work with spokespeople here in the interim to update on the progress of the work that we're doing.

In light of the ITV story and the wider concerns about culture that were raised back in December 2022, since March 2023, we have received regular anonymised reports about gross misconduct cases from all three fire and rescue services in Wales. They feel that cases across Wales are generally dealt with appropriately by management. South Wales Fire and Rescue Service, however, has had a tendency to downplay such conduct—for instance, only issuing written warnings for conduct that should probably lead to demotion or dismissal—and that fully reflects the finding of the review.

As I referred to, there was—. His Majesty's Inspectorate of Constabulary and Fire and Rescue Services had a report based on—. You referred to services in England that had had similar inappropriate and ineffective management exposed. Whilst their remit didn't cover fire and rescue services in Wales and its March 2022 report wasn't based on any evidence from services here, nonetheless, on the back of that, we asked all three services to implement the recommendations as a minimum, and we continue to hold them to account for doing so. So, we'll continue to scrutinise that, but, as I said, I will be meeting with all fire and rescue services about the recommendations of this review and how they hold them to account, but this is something that will be closely monitored and worked collaboratively on. And as I said, we're ruling nothing out at this stage and it's not a question of whether we become involved but what form that involvement takes and how appropriately and effectively we can collaboratively achieve that meaningful change that not only communities deserve from our public services but the people who work within our public services as well.

15:10

Thank you, Deputy Minister, for your statement here today. I am glad to hear that you are taking the findings of this independent review so seriously. The report made for absolutely shocking reading, and it is clear, as you say, that a long process of reform and cultural change must lie ahead. Part of that change must lie in the recruitment and retention of new firefighters to the service—new firefighters who come from diverse backgrounds, who can both benefit from and help drive this cultural change. Now Deputy Minister, I've raised in this Chamber previously my concerns around the difficulty of recruiting and retaining on-call or retained firefighters within south Wales fire and rescue. So, how can Welsh Government ensure that this report does not act as a further barrier to recruitment and retention?

Secondly, I note the response of the WLGA to the independent review. In their response, the WLGA set out many of the same expectations that you have set out here, and their own intention to scrutinise the work of the service and the authority to meet the recommendations set out in the report. Therefore, Deputy Minister, what capacity is there for Welsh Government to work jointly with the WLGA on this, to present a united front from the public sector and ensure that the reform happens swiftly and thoroughly?

Can I thank Vikki Howells for her question? I know that your commitment in this area is one that you are very—for want of a better word—committed to. Just on the point of diversity as well, I think that's a really important point. It's something that was really stark during the course of the report as well. I agree with the report that a lack of workforce diversity contributes to the problems that the report has highlighted, and it makes it harder to build inclusiveness and may, sadly, increase the risk of bullying and harassment of those who do not conform to some pre-existing stereotype. The firefighting workforce remains overwhelmingly male, even more so than other historically male-dominated sectors like the police and the armed forces. So, while there's no quick answer, it is part of what we need to do now in terms of actually how we work with partners to actually break down those barriers and create a more inclusive environment. I do know—. Back over a year ago, I met with some new recruits in the North Wales Fire and Rescue Service and that group were 50 per cent made up of women. That was on the back of conscious efforts by the North Wales Fire and Rescue Service to encourage women to apply, with very targeted recruitment campaigns using relevant role models.

So, it can be done, but, actually, once people are in there, we want to make sure it is an environment where they feel safe, supported and wholly included, which brings me to the points you've raised previously, Vikki, around recruiting and retaining particularly on-call firefighters. In the report, there's no evidence of a direct connection to that. I know Fenella Morris KC in the report does touch on perhaps sometimes retained firefighters not feeling that they're respected in the same way as perhaps whole-time firefighters. But I think the problem with recruitment and retention of on-call firefighters, as I said to you before, is a problem across the UK and probably reflects wider changes to the rural economy and declining incident volumes, which might make the necessary time commitment harder to justify. But I think, importantly and worryingly, the problems that are identified in the review—. I think we can deduce that they may well have induced some staff to leave, and I wouldn't be surprised if that was the case, and I don't think any of us would, and there is concern, of course, that any reputation for mismanagement or for the things that this report highlights might deter others from joining. So, the culture review and acting on those recommendations is not just important for those that have worked in the service and continue to work in the service, but is highly important for the sustainability of the service and for it serving communities across the south Wales area as well.

15:15

There is similarity here, of course, with the problems that were unveiled about Gwent Police, but unlike the police, of course, this is a devolved service. I welcome the tone that you've adopted this afternoon, but I'd question why we had to rely on a brave whistleblower to draw attention to this problem, rather than the Government, which oversees this service, finding this information. What changes in processes will need to be seen to ensure that this doesn't happen again? Does the Government believe that the decision to award a pay rise of £12,000 to the chief fire officer is deserved? Or is that some sort of insult to the victims? I'm aware that the Fire Brigades Union has drawn attention to the fact that the review was very critical of the senior management team, but only one of those have said that they will step down. So, will there be a review of the decision to award a pay rise, and who will be overseeing how these recommendations are implemented, please?

Diolch, Delyth Jewell, for your contribution. I think I caught most of it, but my audio was going in and out, but hopefully I caught most of it. With respect to how we found out about that, and it is with great sadness, and again I absolutely pay tribute and recognise the bravery and courage of the people who have come forward, but it should not be the case that people have to whistleblow and to take those actions for the necessary action and response to be made. It should be something that we should expect as par for the course across society, but more so, I think we should rightly hold our public services to higher account as part of that.

Normally, there would be no need for cases of individual misconduct to be reported to Government, and they can and should be left to employers to deal with, but, as we've seen in the highly critical report, it identifies not just those unacceptable behaviours and attitudes, but underlying failures in leadership, governance and decision making by management at all levels of the South Wales Fire and Rescue Service. And whilst it is a devolved public service, the Welsh Government doesn't directly run that service and, normally, you would expect fire service management to manage their staff fairly and well, and we expect fire authority members to show leadership and to hold management to account. And, where that doesn't happen, there's a case for Government to become involved. As I said, we knew nothing at this stage, and I do have concerns about the capacity and capability for this situation to change and achieve that meaningful culture change without intervention and the support of Welsh Government as part of that as well.

Diolch, Dirprwy Lywydd. I thank you for your statement today, but I have to say, having worked with South Wales Fire and Rescue Service for many years on the White Ribbon campaign, I feel deeply disappointed and appalled by the failures identified within that report. Some of the questions that it raises are very obvious, and that's public trust in this service, and the failings are letting down the many trustworthy individuals who work within this service, and the suspicion that falls on everybody.

I feel very strongly that anyone who has been found guilty of gross misconduct, as highlighted, through abuse, intimidation or harassment, should immediately be sacked, and we need to remove those people from their posts before we can go on to protect the people who are there. I think that we've had far too many examples within public sector, from the police, the Welsh Rugby Union, the NHS, to not actually say now that the systems that people are relying on to report are deficient, that the procedures are not adequate. And I think it's time—and I hope you will, Minister—to put public services on red alert now that we will be looking at their systems and their procedures that protect those people who want to make a complaint, so that they feel that they can make a complaint in a way that doesn't jeopardise their family, their income, their status, and instead protects all those things within the institution, not the individual.

15:20

Thank you, Joyce Watson. You make the point about how such reports and reviews make such difficult and distressing reading that it does then cast a shadow over the service as a whole. I hear your disappointment in the work that you've done, which I know you're a passionate advocate of across the piece, around the White Ribbon campaign, and I know that the South Wales Fire and Rescue Service were at the forefront of many of those campaigns, and, actually, in the review itself it does recognise that, but it also recognises how whilst there had been that commitment at, perhaps, a corporate level, perhaps that hasn't actually mainstreamed across the culture of the organisation and that hasn't been effectively communicated and then reflected in the procedures and the systems of the organisation as a whole.

You're right, there are far too many examples, and quite frankly I'm tired of talking about this now, and that's why we do need to act. The point you made, yes, my priority is to take the necessary support and action we need in terms of what the review has revealed with regard to the South Wales Fire and Rescue Service, but there is also—. I want to see that wider change and to work collaboratively with all partners and stakeholders to ensure that we can make sure, to the best of our abilities, where we have the levers and we have the powers, to make sure that, actually, our public services and our public sector in Wales can be a beacon of inclusivity and support, not just for our workforces, but as I said, for the communities in which they're placed and they serve as well. 

4. Statement by the Minister for Economy: The compound semiconductor industry

Item 4 this afternoon is a statement by the Minister for Economy: the compound semiconductor industry. I call on the Minister for Economy, Vaughan Gething.

Diolch, Dirprwy Lywydd. I'm delighted to make this statement today about the compound semiconductor industry here in Wales. Substantial and significant growth has taken place, and I'm proud of the role that the Welsh Government has played in creating opportunities for Wales.

In November, I launched 'Economic mission: priorities for a stronger economy'. Our aim is to set Wales on a path to deliver a fairer, greener and more prosperous Wales. This industry is a prime example of how we're using active industrial policy to position Wales as a partner in the wave of new industrial strategies that are redefining economies around the world.

My approach touches upon many of the portfolio areas across the Welsh Government in addition to my own portfolio. We are investing for long-term growth, focusing on our comparative strengths to boost investment, providing opportunities for young people, and promoting fair work.

We're committed to working in partnership with industry, academia and especially the Cardiff capital region to help further grow the semiconductor sector. Our partnership is well understood and respected by industry across the UK and indeed by global markets. Our semiconductor sector is a success story that is helping to shine a spotlight on Wales.

Of course, I make this statement against the backdrop of a difficult budget settlement that demands an even greater sense of priority. It means backing those proposals that are built to last with long-term partnerships and creative approaches that will deliver a return on investment.

Semiconductors are an essential technology to support our daily lives, as indeed we found out yet again during the pandemic. Overnight, the world of work became largely virtual and totally reliant on computers, telecom networks, and the internet. Indeed, even the medical equipment in our intensive care units were underpinned by semiconductor technology.

Compound semiconductors, the segment that the industrial and academic cluster in south Wales specialises in, are at the leading edge of this technology. They, of course, have capabilities that go far beyond silicon chips. They're driving the development of electric and autonomous vehicles; they're the technology behind LED lighting and solar cells; and they're essential in today’s 5G and tomorrow’s 6G mobile networks.

There is probably a piece of Wales in every mobile phone in the world. It could be the facial recognition sensors, with material grown by IQE in St Mellons, or because of goods made using equipment built by KLA in Newport.

The Welsh compound semiconductor cluster is at the heart of the technologies that will help all of us to address many of society’s key challenges, from future medical advances to the power management and energy generation that will help us to deliver on our net-zero commitments.

But the Welsh semiconductor industry is not just good for the challenges we face as a society; it is also really good business. This is a high-growth industry that is export led. The Welsh cluster exports more than 95 per cent of its products, not just to Europe, but globally. It contributes close to £0.5 billion in exports every year, and that's around 3 per cent of all Welsh manufacturing exports.

And this is a research and development intensive industry. Every company in the cluster has a dedicated R&D department, and the close working relationships with our three local universities is a model for other industries to follow. The cluster has been behind Wales’s success in winning more R&D funding from UK sources. This has been recognised by the establishment of the UK’s public research centre for semiconductor applications, CSA Catapult, which is based in Newport.

This focus on R&D aligns well with our own innovation strategy, 'Wales innovates: creating a stronger, fairer, greener Wales', which I launched last February. It calls for innovation to drive growth and collaboration for solutions to society’s challenges and for citizens to share wealth through fair work.

I challenged organisations to develop larger and more compelling R&D proposals to leverage greater support from UK funding sources. The semiconductor cluster has risen to that challenge. Acting as a consortium, they've secured many collaborative research grants. One of the most substantial was a £42 million Strength in Places Fund award, supported by 10 Welsh organisations.

Our economic mission calls for Wales to be outward looking, to demonstrate our strengths, to win investment and to attract talent from around the world. In the past year, the Welsh Government has participated in semiconductor industry events in California, Japan, Taiwan and Germany. The recognition of the Welsh cluster has been clear and apparent in each market.

In just the last two years, we've won investment from Siemens in Germany, MaxPower and MicroLink Devices from the US, and Rockley Photonics in the UK. I'm delighted that our direct discussions with Vishay Intertechnology of the US have helped lead to their agreement to acquire Newport Wafer Fab. And, of course, the new European manufacturing and R&D centre of KLA is taking shape at Imperial park in Newport, a $100 million investment, creating a 200,000 sq ft facility with hundreds of high-salary jobs to be created in the next few years. We continue to discuss investment opportunities with several other global companies that I expect to announce during the course of the year. 

This successful industry is already having a significant impact on job and career opportunities for the people of Wales. In just 10 companies within the cluster, direct and indirect employment increased 9 per cent last year to more than 2,600, and we know, across the wider sector, there are many more jobs here in Wales. And these are high-calibre technical and engineering jobs, as well as the head office functions that support them. To continue to grow good jobs, we need to ensure that our young people have the right skills, and we are already offering apprenticeships for graduates.

For example, there are established industry relationships to test and scale up within Cardiff and Swansea universities. At the University of South Wales, a degree apprenticeship in semiconductor technologies is being delivered. All of this is excellent news for young people and growing the economy of Wales.

Future talent is the No. 1 issue for the industry globally. A nation that demonstrates current and future talent in their people will attract and retain further investment, as well, of course, as equipping its people with the skills to develop a career, wherever they choose in the world. This underpins my decision to work with the UK Government and local partners to develop an investment zone for south-east Wales. This was selected on the basis of its high-potential compound semiconductor sector. The £160 million investment between the two Governments could help to catalyse this high-potential, knowledge-intensive industry over the next five to 10 years. It will support industry, enable infrastructure, and the skills that will support its growth and prosperity. I expect to see proposals coming forward from the south-east Wales joint committee containing ambitious plans to help grow the sector using the levers available.

I also expect to see, in the coming months, clarity as to how the UK semiconductor strategy will support the south Wales cluster. This high-level strategy, and the funding apparently announced alongside it, must translate into tangible support to help tap the undoubted potential that we possess here in Wales. The compound semiconductor cluster that we have supported over this last decade illustrates many aspects of our economic mission and this Government's economic priorities. Our long-term approach will support sectors that deliver against our aims, where Wales's acknowledged strengths can help to generate economic impact. That means, simply, more jobs and better jobs. I intend to continue to use all the levers at our disposal to support this partnership to deliver on our ambitions, to help grow the sector and create even more good jobs for the future. Diolch.

15:30

Thank you for the statement this afternoon, Minister. The semiconductor sector is incredibly important, and as a born-and-raised Newportian, I am proud that Newport sits at the very heart of the cluster that you mentioned. As you said, KLA's operation expansion in Newport—a move that will create hundreds of new jobs—is absolutely welcome news, and I very much look forward to hearing more about the future investment opportunities the Welsh Government expects to see in the coming year.

Equipping our young people with skills is absolutely essential when it comes to the growing sector. I know you touched on Cardiff and Swansea universities within your statement, but I'd like to know specifically, Minister, what work will the Welsh Government be doing with colleagues and the regional skills partnership to ensure that the cluster has access to the skills that businesses actually need to grow and develop the sector further.

I have absolutely no doubt that the UK Government's national semiconductor strategy will support the south Wales sector and help secure the UK's position as a global science and tech superpower. The strategy will also see the Government invest up to £1 billion in the next decade, and up to £200 million between 2023 and 2025. These are just some of the many steps the UK is taking to support the semiconductor sector and industry. Minister, what discussions have you had personally with the UK Government in relation to the strategy?

News of Vishay's takeover of Newport's Wafer Fab is absolutely welcome, and hopefully marks the end of a particularly uncertain time for its staff. I was delighted to meet with the Nexperia Newport staff association before Christmas here in the Senedd, and I must say a huge congratulations to my colleague Jayne Bryant for organising such a wonderful event. It's clear that they see Vishay's investment as a huge sign of confidence. So, I'd like to know if you've had any recent conversations with the UK Government about this matter specifically.

The Department for Science, Innovation and Technology has established a semiconductor advisory panel, made up of industry experts, to help grow the sector. So, Minister, what engagement has the Welsh Government had, if any, with the panel itself, and have you given any consideration to setting up something similar here in Wales? Late last year, the UK Government also launched its ChipStart programme, which provides start-ups solving complex issues through the design of semiconductor chips with support to grow. Twelve companies have joined the scheme, which will ultimately equip them with the technical as well as commercial help that they need to get their new products into the market. So, Minister, how is the Welsh Government linking into that, to help the sector grow further right here in Wales?

I'd also like to know what funding the Welsh Government is providing to start-ups going forward. There is, hopefully, a lot to be excited about, and I know you've been jet-setting here, there and everywhere on various trade missions, but what else is the Welsh Government doing to attract investment into Wales? And whilst you're on these trade missions, Minister, I'd really like to know, sincerely, what best practice you've learnt from these countries so far. Thank you so much. 

Thank you. I'm happy to reiterate to the Member that the regional skills partnership, CSconnected and the wider region do have a properly joined-up approach. They recognise, across all those areas, the potential for further growth in this sector. And one of the opportunities we have is that, at the moment, the cluster is relatively unique in the compound sector. The challenge, and the risk, though, is that the rest of the world won't just stand still, which is why we need to get more investment into the sector. It's why I place such a high priority on our relationships between the Government, the capital region, and, indeed, the industry itself. It's why I've directly met a number of companies in the sector, and it's why, on the limited number of trade missions I've attended, compound semiconductors have often been part of the conversation.

When you look at the points you made about the UK strategy, I appreciate why you're as positive as possible about the strategy. It took a long time to get there. It's a simple truth that the churn in UK Ministers, from the start of saying there would be a strategy to when it was actually announced, is one of the problem factors we've had. And if you're having an honest conversation with a UK Minister, you'll probably recognise that some more stability would have meant the strategy would have happened earlier.

The other challenge is the resource around it as well. Because £1 billion over 10 years isn't a significant amount of additional capital on its own in a sector that is hungry for resources but also should demonstrate a really significant return. I'm afraid to say that, at present, there's no new money that is visible to me as a result of the strategy here in Wales. Yet actually, if the strategy is to be a success, to help grow the sector, as people across this Chamber, and others, would want to see, I don't see how you can do that without seeing investment come here to Wales, because of our established strength within the UK and our global recognition.

In terms of conversation with the UK Government, I think we're potentially in a better place. My conversations with the previous Minister, Paul Scully, were disappointing, and when he previously said, and went out of his way to say, that the UK Government weren't interested in creating Taiwan in south Wales, that was incredibly unhelpful, and it was not well received by academia, industry or the cluster. I'm hoping there can be a more purposive partnership with the UK Government. My decision around the investment zone and prompting that this was the area that I want to focus on in south-east Wales is designed to help us get to the same place, where there is a growth sector that is recognised and practical support provided to it. If and when there is more than just warm words, I'd be more than happy to update you and the wider Chamber.

I'm very pleased, though, to hear you recognise the work of Jayne Bryant with the staff association at Newport Wafer Fab. It's really good news that Vishay have put in a proposal for purchase. I look forward to seeing the fruition of that. When it comes to the expert panel around the UK strategy, the chief executive of IQE is on that panel, and he shares similar ambitions to the Welsh Government about wanting to see a strategy that helps to lever in additional investment and an open-minded approach from the current and a future UK Treasury about the amount that it's prepared to invest to deliver even greater investment. And we will continue to maintain the established relationships that we already have. And I think, actually, because of the presence of CSconnected, and indeed wider semiconductor businesses and sectors that rely on them in the rest of Wales, we don't need to create that same panel, because we in essence already have it, which brings together industry, academia, and indeed our different regions of Wales and the Welsh Government. It's a model that the rest of the world are looking to replicate. So, let us take advantage of our current position, and take full advantage for people and future jobs here in Wales.

15:35

I thank the Minister for his statement. The semiconductor industry is a crucial part of the global economy, and it's good to see that south Wales is home to one of those clusters for innovation that the industry relies on. One element of the statement that stood out for me was what the Minister said around the need to continue to grow good jobs and ensuring that our young people have the right skills. As he stated, future talent is the No. 1 issue for the industry globally. So, how do we square this then with what we are seeing with apprenticeships in the draft budget? The Minister had much to say before Christmas about young people's future being a priority. He mentions his strategy again today. But we see a proposal for one of the biggest cuts to apprenticeship funding since devolution began. Those who deliver apprenticeships have been clear in their concern about what this will mean for the future.

We know that a skills gap exists and that it needs to be addressed urgently. We know that it's slowing down economic development. The Institute of Physics tells us as much in a recent report on the semiconductor sector, highlighting that two thirds of physics innovators across the UK and all sectors reported suspending or delaying innovation activities because of skill shortages. Apprenticeships provide a viable solution to the skills gap. Again, the Institute of Physics tells us that more than 50 per cent of physics-related roles in the UK typically don't require a degree, such as within the semiconductor industry. So, given the threat to apprenticeship funding, how will the Minister ensure that routes are made available to young people to help bridge the skills gap in industries such as the semiconductor industry?

The Minister also mentioned research, development and innovation in his statement, and it is vital for a productive and resilient economy, but Wales is consistently near the bottom for RD&I spending in the UK. In its recent submission to the Economy, Trade and Rural Affairs Committee on research and development, Cardiff Metropolitan University emphasises that every £1 of public spending on research, development and innovation eventually stimulates £2 of private sector spending. Cardiff Met also says that in all but two funding streams Wales's 2023-24 allocations are lower than the Reid review recommendations. I raised this issue almost exactly a year ago today with the Minister during his statement on developing technological clusters here in Wales, yet the same issue remains.

If Wales was able to achieve parity in RD&I funding and the Welsh Government committed to further financial investment through the innovation strategy into higher education research to support areas of work such as the compound semiconductor industry, the pace of development of the industry in Wales, our global competitiveness and the benefit to Welsh workers and the Welsh economy would be greatly increased. Therefore, will the Minister outline the Welsh Government's plans for the £3.2 million of consequential funding to be received following the UK Government's university innovation fund increase in November? And would the Welsh Government consider using funding from this consequential to reverse its proposed cuts to its postgraduate incentive grants for STEM, which will go a long way to supporting our ambitions around the semiconductor industry? 

15:40

On the final point, as the Member knows, any time a consequential is provided, we look at that centrally across the Government and think about our whole Government activities. Actually, I think the broader point comes back to a range of the financial questions he mentioned, and, indeed, our innovation strategy. It is even more important, because of our budget challenges, that we gain even more money from UK sources than we have done previously. That's a challenge not just within academia, but, actually, within the private sector as well, to make sure those partnerships are highly effective, which is why the Strength in Places bid is such a good example: 10 different organisations coming together to gain £42 million that would not have been here otherwise.

I understand why the Member points out that there are budget challenges for this Government. When he raised with me issues around funding a year ago, our budget position was actually better than it is today. The funding position and the reality of where we are have worsened, not improved. The autumn statement makes this budget round we're in even worse. And it goes back to the challenge the First Minister set out, not just to be able to honestly say 'If we had more money, we could create more and do more' and that would provide a real positive purpose for Wales, but if there are going to be additional priorities, we have to understand how that money will be moved around. Wales continues to have less say over less money, and I, for one, won't give the Tories a free pass on that and try to make sure that all of the blame for those Tory choices ends up here.

When you consider apprenticeships, it's especially relevant. The loss of former EU funds and the deliberate destruction of all-Wales programmes by the Tories means that money is no longer available. That's why the budget challenge is so difficult in apprenticeships this year. And in my own department, we made a deliberate choice—I made the choice—to give relative protection to apprenticeships compared to everywhere else. That still means extraordinary challenges in the rest of the department. None of that, though, means that we are going to see less value in the money we spend. It's even more important, as I set out, that we gain greater value for that money. 

As the First Minister said, we will still invest in apprenticeships over this next year. We will still invest alongside this sector further in R&D, further in job opportunities. And, actually, the sector itself is optimistic about growing the number of jobs it has in the next few years. What all of this highlights is that if our nearer and medium-term opportunities are to be realised, we need a different partnership with the UK Government. On that, there is real positivity for the future, not just me saying as a Labour politician 'I want to see colleagues in Westminster in Government', but it goes back to the pledge that has already been made. Funds and control over them to replace EU funds will come back to Wales where they always should have been—those funds and the powers that were stolen from us by the Tories. It's yet one more good reason to vote Labour in the next UK general election, which cannot come soon enough.

15:45

Minister, thank you very much for this statement today, highlighting the very positive nature of the semiconductor industry for Wales, and particularly for south-east Wales and, indeed, the constituents of my colleague Jayne Bryant and myself and other neighbouring authorities, because we know the industry really does provide very high-quality, well-rewarded jobs. And, as you say, there is such great potential for high growth and that research and development intensity that you mentioned, and the export-led nature of the industry is all very, very positive, I believe, for the future. 

I note that the president and the chief executive of Vishay, in commenting on their purchase of Nexperia, highlighted the clustering in south Wales, Minister, and the company's intention to collaborate with the cluster and join with the key stakeholders in developing the semiconductor industry in the UK as a whole, but obviously for us particularly in south Wales. So, I just wonder if there's anything you might say about the importance of that and how Welsh Government will support that joint working and that key partnership. 

And just also, as you mentioned the prospect of a UK Labour Government, we know that Gordon Brown's report is quite heavy on supporting the economic strengths that we currently have in areas like Wales, Scotland and the north of England, Minister, and obviously the semiconductor industry is a key part of that. So, are you already discussing with colleagues how we would be up and running with that UK-Welsh Government collaboration for the semiconductor industry in south-east Wales in the early days of that new UK Labour Government?

Thank you. On Vishay and the cluster, I'm very pleased to say that not only have I directly met with representatives of the company, my officials have had further engagement and, indeed, with the wider cluster, and we've undertaken a number of introductions with different stakeholders and partners. And it was one of the things that attracted them here: that they already saw a connected and integrated cluster that was operating and that they wanted to positively be a part of. And their view isn't to simply replicate all of the businesses that are there now, they actually have ambitions to do different things that could add additional value, and they were especially keen on having a committed and skilled workforce to work with. And that longer term view on investment is something that we need in every part of this cluster to recognise not just opportunities in the next 12 to 15 months but actually to recognise that this is the growth sector for several years into the future. And, again, that underpins my choice to look at this cluster and this geography for the investment zone. 

On future relationships with a different UK Government, I'm proud to say that I led the negotiations that got the commitment to return the powers and money to Wales if we have a future UK Labour Government. I hope that I'll have a more significant role in the future in those negotiations. We shall see what happens. I think you can be confident, though, that those conversations are already taking place, both with the potential occupants of No. 10 and No. 11, but also around a future industrial strategy, the place of semiconductors and this geographic cluster within that as a UK significant cluster as well. So, we're already having those conversations as well, and there is a recognition that this is significant not just for Wales but for the UK, and its global significance is recognised as well. I think, as I said in my statement, it is a genuine success story for Wales. We should be much prouder of something that we are doing a great deal with, and I believe there'll be more to celebrate in the future. 

I'll make my contribution brief, because I want to highlight the importance of the semiconductor industry in my region of South Wales East. It's important because of the Newport Wafer Fab. This site has, unfortunately, suffered a turbulent couple of years. After years of uncertainty, the workforce were beginning to look forward to a brighter future when it was acquired by Dutch-based technology company Nexperia, a subsidiary of Shanghai-listed Wingtech, in 2021. Following a review by the Tory Government, Nexperia were ordered to sell 86 per cent of its stake to, and I quote, mitigate the risk to national security. Redundancies sadly followed. Thankfully, towards the end of last year, American company Vishay came in to acquire the site, in a deal worth a reported $177 million. Though, more investment in the site and a substantial increase in the workforce are a real prospect as a result. The only stumbling block, once again, is the Westminster Government, who appear to be dragging their heels when it comes to approving the takeover. Myself and Delyth Jewell have urged Westminster to stop prevaricating and approve the deal to give workers at the site the job security that they crave, and allow the promised investment to the site to begin.

Minister, can you expand on what discussions you've had with your counterparts in Westminster to ensure this deal gets over the line sooner rather than later, and do you also share my frustration that the fate of a key component of the Welsh economy is being determined hundreds of miles away by a myriad of changing Ministers in an institution that has not traditionally put the needs of our country first? Diolch.

15:50

I think the first point around the previous ownership was I always clear that the national security considerations I understood would never be shared with Welsh Ministers. My frustration, as I've said several times in the Chamber, and indeed in direct conversation with UK Ministers, was about the time it took to review. I think the understanding of whether the Chinese-end ownership was or wasn't a risk—the starting point isn't a difficult one, but the time it took was deeply frustrating, and I know that the workforce felt that as well, as indeed the staff association made very, very clear on a number of occasions. We can look forward with some more confidence because Vishay have put in an offer that's been accepted, as well as the UK Government needing to make a choice, and the time frame is only just coming to an end for that choice. So, actually, on this issue, they're not currently dragging their heels. It's also about the pre-emption rights of the previous founder as well. So, there's a number of moving pieces that need to be resolved.

I have made very clear at the outset when Vishay announced what they wanted to do and subsequently that I want the UK Government to make a prompt decision to learn from what's happened in the past, and to make sure that the opportunities that exist really are undertaken. And it's no surprise that people are talking about Vishay. Natasha Asghar mentioned earlier the event that Jayne Bryant co-ordinated with the staff association. John Griffiths mentioned Vishay as well. There's a range of people employed currently at Newport Wafer Fab who are in a number of different constituencies, and indeed there's an opportunity for more over the medium term if, as I believe we will do, we can continue to support and grow the sector.  

Diolch, deputy Llywydd. I'd like to thank the Minister for his very positive statement this afternoon. The south Wales semiconductor sector has brought opportunities and hundreds of millions of pounds of investment for well-paid, highly skilled, local jobs in Newport, in particular. And recent investment in the sector has been backed by solid support from the Welsh Government. In contrast, as we've heard, the Conservative Government in Westminster has created a prolonged period of uncertainty, in particular in my constituency at Newport Wafer Fab, and we did have that good news before Christmas about that investment from Vishay, which is very welcome. 

But I'd also like to thank the Minister for his support and engagement throughout this process, and particularly over the last few months, and I know that the staff association, who he met here in the Senedd, would be glad that I put that on record as well, because safeguarding the future of this highly skilled workforce demonstrates the importance of investing in long-term sustainable growth and opportunities. 

I'm really glad he mentioned KLA in Newport, which is supported by Welsh Government and expanding into my constituency. Again, a really positive step forward, and promoting diversity is also important for that sector's future growth. We must take action to ensure more people, particularly women and girls, see the sector as a route to a great career. This was something that I had a discussion on with the senior management at KLA when I met with them recently, and I know that you've done some work around that with them as well. Perhaps you can just say a little bit more about how we can increase that diversity within the sector, and also to make sure that young people in Newport and the surrounding areas know that this is a real opportunity for highly skilled, good-quality jobs in our area. 

Thank you for the comments and questions, particularly the kind of comments coming from the staff association. I've always been impressed when meeting the staff association that it's not just about the fact that they're organised, but they have a real understanding not just about their jobs, but about the sector itself and the different factors within it. I think one of the things we've definitely been able to offer from the Welsh Government is clarity and stability in the leadership we've provided here, and the way we've worked with other partners. And it’s worth reflecting we’re talking about a cluster in south-east Wales, much of which is in the Member’s constituency, but this is a sector that has a very wide reach right across Wales. If you think about the work that Jack Sargeant and Carolyn Thomas talk about with the Digital Signal Processing Centre of Excellence at Bangor University, and indeed the photonics centre at Wrexham University—it's reliant on semiconductors, and there’s a direct relationship with a range of the people in the cluster. It’s also directly relevant to the advanced manufacturing sector.

So, actually, this is part of what will power the future, and that future should be created by men and women working together. At the moment this sector is still very male dominated, and it’s part of the conversation we’ve had. I think the interesting point is that KLA themselves recognise they need to do more. The headquarters based in California see diversity as a strength, not a risk, and when I visited the board in California they were clear about their ambition to expand, but also the recognition of the need to have that diversity in the workforce. They understand that, to get the staff they need to help power the future, only recruiting from half the population makes it much, much harder to do, and indeed this is a sector where the traditional view around it doesn’t actually match the jobs that exist now. It’s very clean work, it’s often highly skilled, it isn’t physically demanding in the way that people see different job roles for men and women traditionally. This is actually a sector where lots of women are starting to go in, but it’s about getting them and keeping them. It’s why, when I met with people in Germany, and indeed at the semiconductor UK organisation that was launched here in Cardiff just before Christmas, they were really stressing what they’re doing to look at the future. They have a programme looking at 30 under 30—30 future leaders who are under 30—and two of the winners of that UK-wide programme from Wales are young women who are setting out what they can do. These are more examples of women being successful and being recognised and seeing a good career in the sector, as part of what we need, as well as making clear this is a career for all of us, and a career in a sector that should mean a great deal to the whole of Wales in the future. 

15:55
5. Statement by the Deputy Minister for Arts, Sport and Tourism: Statutory registration and licensing of visitor accommodation

Item 5 is the statement by the Deputy Minister for Arts, Sport and Tourism: statutory registration and licensing of visitor accommodation. And I call on the Deputy Minister, Dawn Bowden.

Diolch, Dirprwy Lywydd. The Welsh Government is committed to supporting a vibrant visitor economy all year round throughout Wales, whilst also helping secure thriving communities in a rapidly changing economy. We recognise how both outcomes depend on each other. This is a key focus in our tourism strategy, ‘Welcome to Wales: Priorities for the visitor economy 2020-2025’. However, the holiday market is changing rapidly. The way people book, stay and host trips across the world is barely recognisable compared with the start of this century. The growth of online booking platforms has brought many benefits, such as new routes to market and increased consumer choice. However, we are aware of concerns about the impact that some short-term lets can have on housing stock in communities and about inconsistent compliance with legal requirements.

The task of balancing the interests of a successful visitor economy with thriving local communities has led to reforms from Governments across the UK, Europe and beyond. One of the actions that we're taking, through our co-operation agreement with Plaid Cymru and our legislative programme, is to introduce a statutory registration and licensing scheme for all visitor accommodation. Last summer I published the results of our consultation for the scheme. Since then, we have continued to listen to our stakeholders, including businesses, communities and visitors. These conversations have helped us to develop our proposals.

I'm pleased to announce that it is our intention to develop a scheme where all visitor accommodation providers must meet certain requirements to operate. We want to show visitors to Wales the importance we place on their safety, and the standards we expect in the tourism sector—standards that many in the sector will already be complying with.

The purpose of this statement today is to provide an update—not the full details—of our journey so far to establish a scheme. In July we published the findings of the public consultation about how a licensing scheme could work. At the same time, we published a report of engagement sessions that we held with the sector, to discuss the technical aspects of the proposed scheme. In addition, in September we undertook a survey to gather consumer insight into how a statutory scheme might affect visitor perceptions of the accommodation offer in Wales. The 'Statutory licensing scheme for visitor accommodation providers: views of consumers and residents' report, published last month, highlights important issues that we cannot ignore and that we will seek to address through our proposals.

The report shows that amongst residents across Wales, three in five—that's 59 per cent—believe that they have 'some' or 'a lot of' tourism in their area. Of those residents, the biggest perceived positive impact—69 per cent—was to the local economy. But that increase has also brought with it some negative impacts, such as a perceived increase in littering or pollution, difficulty in parking in the area or difficulty in local people being able to find an affordable house to buy or rent in their community. In a similar vein, 89 per cent of visitors to Wales that we surveyed considered it important that the accommodation they stay in is operating safely. The ability to raise concerns or complaints about standards was important for 76 per cent of visitors. It's therefore our intention to introduce legislation to the Senedd before the end of the year to establish both a registration scheme and a licensing scheme. And it is our intention to implement this in phases.

The first phase will be a statutory registration scheme for all accommodation providers. The register will give us important data and intelligence that is not currently available. The data gathered through registration will provide us with comprehensive information on who is operating in the sector, where they’re operating, and how they are operating. And this will help us to better understand the sector and inform future policy decisions at both a local and national level.

A register will also assist us in communicating and engaging directly with the sector to share best practice and to provide updates around various existing requirements. In addition, it will support the implementation of another co-operation agreement commitment: the introduction of a visitor levy. We want to make sure that we do not cause any duplication or additional administrative burden for the sector. And we will have this in mind when we're designing the service for both the visitor levy and the registration scheme. We will work to ensure that sufficient notice and support are given to accommodation providers on the process to register. And we propose a simple online registration process that will capture the basic details of visitor accommodation.

Once the registration scheme is fully established, our intention is then to develop a scheme that will require visitor accommodation to be licensed to operate. This will be based on safety requirements initially, before progressing to licensing based on quality standards at a later stage. In line with the co-operation agreement commitment, we intend to focus our licensing efforts initially on short-term lets that could otherwise be used as residential accommodation. This is in recognition of the current disparity in regulation between the private rented sector and short-term lets and their relationship with wider factors such as affordability and availability of housing, particularly for rent, for local people.

We believe that this three-phased approach will help improve safety and quality standards and, as a result, the appeal and reputation of visitor accommodation. Having a mechanism that will establish a baseline that all providers must meet in relation to both safety and quality, before being able to operate, will convey a positive message to our visitors and help improve consumer confidence. The intention is that a licence fee will apply, with a requirement to periodically renew that licence.

The Senedd will, of course, have the opportunity to scrutinise the legislation and the associated costs when the Bill encompassing both a registration and licensing scheme is introduced. The reforms proposed entail a new level of service delivery that includes additional functions that will require dedicated resource to set up new systems, in particular for the purposes of inspecting a large number of visitor accommodation premises across Wales. As a result, the implementation of each phase will need to take budgetary and other practical considerations into account. Further work is being undertaken to ensure that the proposed legislation provides clarity for the Senedd on the approach to implementation.

Businesses in the visitor economy have shown enormous resilience through unprecedented challenges in recent years and we recognise how its success is integral to the domestic and international impressions of Wales. Like many other nations, we also recognise that the success of the visitor economy relies upon cohesive communities where hosts, places and visitors can have greater confidence in a rapidly changing market. The input from the sector, visitors and communities has been invaluable to our work so far and we will continue this engagement as we develop the scheme. Diolch yn fawr.

16:05

Can I thank you, Deputy Minister, for your statement? You'll recall that when the economy Minister, who was responsible for tourism at the time, got the ball rolling on the introduction of a registration scheme, I said that I didn't think it was a bad idea in principle, in and of itself, and I hoped that such a scheme would do some of the things, in fairness, that you've mentioned today—some of that minimum baseline stuff, but also the promotion and the ability for Welsh Government to contact those businesses as well. 

But, whilst this scheme could be introduced with the best of intentions, where we've seen it introduced elsewhere, we've seen how easily it can deliver the opposite outcomes to the objectives that you've set out today. So, when a similar scheme—admittedly, slightly different, I think, to what you're planning on introducing, but a similar scheme—was introduced in Scotland, for example, what we ended up seeing was a complicated and burdensome environment in which visitor accommodation providers needed to operate. In France, licensing schemes made it prohibitively expensive to operate as a small accommodation provider, and in Italy the number of businesses and visitors decreased. So, Deputy Minister, what lessons have you learnt from international examples where this registration scheme has been introduced and how will you avoid the pitfalls that other countries have experienced?

I do think that the Deputy Minister let the cat out of the bag, frankly, in the statement when she referred to the registration scheme as the first necessary step in the journey towards the introduction of a tourism tax. If I've said it once, I've said it a million times in this Chamber: one in seven people in Wales are employed in the tourism and hospitality sector, and a tax on tourism is a tax on jobs. We also know that somewhere like Venice—a tourism tax was introduced there to actively try and reduce the number of tourists visiting Venice, so I would hope that the Welsh Government is not introducing the tax in the hope of following suit and having fewer visitors here in Wales. Indeed, the Costa del Sol regional Government explored the idea of introducing a tourism tax, and they found that it would harm the tourism industry there and decided against introducing it. How I wish we had the same foresight here.

Indeed, you talked repeatedly in your statement about levelling the playing field in the tourism sector, but how will you level the playing field between those tourism providers in Wales who will be forced to make visiting more expensive by adding a tourism tax and those across our border and elsewhere who will not?

The tourism tax, of course, is just one of a slew, unfortunately, of anti-tourism measures introduced by this Welsh Labour Government. Instead of backing the tourism industry in Wales, as our Welsh Conservative plan does, the Welsh Labour Government wants to tax it instead. Many in the sector decried the introduction of the Welsh Government's cruel 182-day rule for self-catering holiday let properties, which is already damaging the sector by forcing them to pay higher taxes. But, speaking about that controversial 182-day tax for self-catering holiday lets, the consultation that preceded the introduction of that particular policy saw just 1 per cent of respondents to the consultation support a move to 182 days; in fact, many in the sector agreed with Welsh Conservative calls to set the level at 105 days, but the Welsh Government pressed on, ignored the consultation and did it anyway. You closed your statement by telling us that input from the sector had been invaluable to the work so far, but those involved in the sector, based on previous experience, have little faith that they will actually be listened to.

Speaking of consultations, looking at the summary of responses to the July consultation on this scheme, we saw that 65 per cent of participants disagreed with the proposal outright due to the pressing concern of visitor accommodation providers; 47 per cent disagreed with the statutory registration proposals; 61 per cent disagreed with the Minister's argument that the scheme would level the playing field; 63 per cent did not view the licence as being an effective platform for communication and 64 per cent disagreed with the notion of enhanced confidence in visitor accommodation providers. So, Deputy Minister, how will you respond to the points being made, and how will you restore the confidence that you've clearly lost from those in the sector who, on a number of fronts, don't have the confidence in the Welsh Government's intentions with the tourism sector?

16:10

Okay. Well, can I thank Tom Giffard for those comments and for your initial positive comments in terms of the statement? I'll just deal with a couple of the points that you've raised first of all. You, understandably and quite rightly, raise the pitfalls in some of the schemes that we've seen elsewhere around the world, which is one of the reasons why we have been having those conversations with other Governments to see how they introduced their schemes and how they've worked, and to be able to learn from those in terms of making sure that our scheme doesn't run into those same sorts of difficulties. Of course, the Scottish scheme is very different to the scheme that we're proposing here—that was very much a licensing scheme only for short-term holiday lets; what we're proposing here is initially a registration scheme for all holiday accommodation so that we have a database, as I said in my statement, that will enable us to communicate with the sector. And part of that is—. You touched on the visitor levy, but part of that is really about having a database so that we know what visitor accommodation is used by people who come here. So, yes, these two pieces of legislation will speak to each other, but I'm not here presenting to you a statement about the delivery of the visitor levy registration, but just to say that there is some kind of interaction between the two in terms of that the data that we will gather from the registration scheme will, of course, help to inform the visitor levy.

You raise—I didn't expect you to do anything other, Tom, than to raise—the issue of the tourism levy and the 182 and so on, but my purpose today is not to deal with those issues; my purpose today is to set out a statement about our impending legislation that will be about delivering a registration and statutory licensing scheme for visitor accommodation. And we will continue to have that conversation with the sector; I do meet with them on a regular basis, as do my officials. I met with them just before Christmas and outlined what I was proposing to do around a statutory registration and licensing scheme. There is a general acceptance that there is a need to do something about this in terms of knowing where our accommodation is, building that database. And there is certainly a recognition from consumers that we need to have some kind of positivity within our tourism offer. That was clear from the survey that we did that that was something that was seen very positively by potential visitors to Wales. And this is about us growing the tourism sector, this is about us giving confidence to people that they can come to Wales knowing that they can visit accommodation in Wales that will meet certain standards.

As a part of that, of course, there is an aim within this legislation to help draw that parity between short-term holiday lets and the requirements on residential lets. And one of the things that we have seen is that, because of the very lax conditions around short-term holiday lets, there has been a propensity for landlords to move towards that sector using accommodation that could otherwise be used for living accommodation for people. And we know all about housing shortages. So, the part here about levelling the playing field is very clear; it is about saying that if you are going to rent accommodation to somebody, whether it is for a short-term let to enjoy a holiday or whether it is living accommodation, the standards that should be met should be equal. And that is, in essence, what we are seeking to do.

Thank you to the Deputy Minister for her statement this afternoon. The package before us is a core part of the housing policy and tourism platform of Plaid Cymru, and we, and, indeed, the sector, have been calling for this regulation system for short-term lets and visitors for a number of years now. So, it'll come as no surprise to you that we welcome this announcement today.

Ensuring that people have the ability and choice to live in their neighbourhoods and the viability of Welsh-speaking communities are core principles. In order to deliver this, we must ensure access to affordable, quality housing. This package is another part of the jigsaw in order to tackle the housing crisis and overtourism and to make the sector more attractive to visitors, whilst also, as the Deputy Minister just noted, standardising the rules between the private sector and the holiday let sector. 

I note that the proposal is a national one, and that's important. Far too often, the general belief is that this is a problem for secluded coastal and rural communities, created by having too many short-term holiday lets and an increase in house prices. But whilst those areas certainly do suffer, they are also problems in urban communities too. The impact of the holiday let sector on the availability of housing and the sustainability of the tourism sector is clear, and in a number of cases it is disastrous for local people, particularly those on low incomes. Research by the Bevan Foundation showed in 2022 that the number of homes used as short-term holiday lets had increased across Wales, placing significant pressure on the availability of housing for people to live in. The lack of regulation has led to a sector that has run riot and shows the worst kind of unregulated capitalism, with houses being treated as cash cows and our communities as quarries to be mined, rather than a foundation for building resilient and healthy communities.

But, according to Government research, the most prominent negative impact of this increase in number of holiday lets is an increase in pollution or littering, parking problems and local people's ability to find a house for rent or purchase in the community. In areas with a high density of Airbnb-type accommodation, the evidence shows that this has an impact on the availability of rental accommodation for low-income tenants too. These policies, therefore, will be another tool to help us overcome these problems.

Can I ask, therefore, how the Deputy Minister has worked and continues to work with the Minister for Climate Change, who has responsibility for housing and planning, in order to ensure that the way of dealing with this proposed legislation does tackle the issue of the availability of housing? The fact that we see these policies being introduced is a result of the co-operation agreement between ourselves in Plaid Cymru and the Government, and it shows political maturity as two parties collaborate in order to find resolution for a common problem. I therefore want to thank the designated Members and the special advisers for their work on this.

But I would like some clarity on the timetable, please, from the Deputy Minister. I wonder whether the Deputy Minister could tell us when exactly the Bill will be introduced. Likewise, the Deputy Minister stated that the licensing and registration scheme will be implemented in three phases. So, what's the timeline for the implementation of these phases?

One of the steps is to introduce a statutory registration scheme for all providers of accommodation, as we heard, in order to provide data and information to understand the sector better and to help steer policy decisions in the future at a local and national level, and to understand who is operating within the sector, where they are operating and how they're operating. But what plans does the Government have in order to gather data beyond the providers? For example, what consultation will there be with communities and local residents beyond the individual providers in order to get a more complete picture of the impact of overtourism or particular platforms and so on? Thank you very much.

16:15

Diolch, Mabon, for those comments and for your support for what we are seeking to do in co-operation with your party and as part of our programme for government. We have a joint ambition, don't we, on making sure that we have a thriving tourist economy in Wales, but that we also have thriving communities that benefit from tourism and are not, actually, pushed out by tourism. That's at the root of not just this legislation, but the two other strands of legislation that we have introduced that help to support the second homes issue; the council tax and the 182 are all part of a wider plan to both benefit the tourism industry and to make sure that the tourism industry is contributing effectively to our local economies, to make sure that there remains a thriving community that people want to visit. People don't want to come and visit ghost towns, so we do need to have that balance, and I'm hoping that what people will see is that the introduction of this particular legislation will add to all of those things that you have talked about.

I am absolutely working with the Minister for Climate Change on some of these issues, particularly in relation to how the data that we gather will help to inform planning decisions for local authorities. So, at the moment, because we don't have any data on tourism accommodation and what accommodation is used for short-term lets and so on, it's very difficult for a local authority to make a decision when they get applications for change of use, for instance, to see whether that change of use from, say, residential accommodation to a short-term holiday let is actually in the best interests of that community. So, that is a very tangible aspect of this legislation, because it will provide a platform for other policy areas, so although it is not directly a piece of planning legislation, the data that we would be able to collect from that would help inform other policy areas as well.

In terms of the timetable, the intention is that the draft Bill will be introduced into the Senedd by the end of this year, and that we will have the scheme implemented by 2026. But what I have to say, Mabon—I need to be very frank about this—is that this is a mammoth exercise. We have no idea how much visitor accommodation we actually have, so this will be a huge exercise, and we have an aim to introduce all of this by 2026, but it will have to be done in phases, because we have to get everybody registered first. Once we've got everybody registered, then we can start to move to the standard of accommodation that we want, and then the third aspect of that will be the quality accommodation, the quality standards that we look to do. And what we have done in discussion with the designated Member is to agree that the prioritisation for that second phase will be those short-term holiday lets.

And the consultation will continue, both with the sector, with the potential visitors to Wales, and more importantly, with the local communities. It needs to be that kind of joint approach to how we implement this legislation and how this benefits both the tourism sector and the communities of people that host tourism.

And I think your point about this being relevant in urban areas as well is absolutely spot on. I don't know whether you picked up that, very recently, the local authorities in New York have decided to ban Airbnbs in Manhattan, because there is no accommodation available for local people to live in Manhattan, and I saw a report just last night that to actually rent an apartment in Manhattan on average now costs you about $5,500 a month. So, that's the kind of thing that we want to avoid is pricing people out of the areas that they live in, and we hope very much that that's what this legislation will do.

16:20

I welcome this statement on the statutory registration of holiday accommodation to put all forms on an equal footing. I'm also concerned about losing long-term private rental accommodation homes—we call them—to short-term holiday lets. So, Airbnb say any solution should be nationally administered and consistent across local authorities to reduce complexity, and operators should be able to apply online and obtain an immediate decision on whether they can operate with fees reflective of scale of overnight activity, whether it's a room, or larger accommodation. But others believe that councils are best placed, and to keep it simple. So, I want to ask whether you believe local authorities have the resources, and what considerations you have given regarding delivery, and would you consider pilots.

Thank you, Carolyn Thomas, for those comments, and you're absolutely right: central to this legislation is our concern about the loss of residential accommodation to short-term holiday lets in particular.

What I would say is, in terms of who will administer the scheme, we want to have a national scheme. We do want a single access to the scheme, for the visitor economy, for the visitor levy, for the short-term accommodation, for the registration; for all of that, we want that to be a single access and a single national scheme. So, there is still a considerable amount of work going on to develop that. What I said at the outset when introducing this statement today was that this is really just an update to give the intention of what we intend to do and there's still a huge amount of work going on about the options of how this will be delivered and who will actually deliver it. So, there has been no decision yet taken as to whether it should be local authorities, whether it should be a national body, whether we should have somebody different dealing with this; we've even talked to the Welsh Revenue Authority about some of these aspects as well. So, I will keep the Senedd informed and updated as we go along, but I think the key intentions here have been set out quite clearly, that that is what we are intending to do and the way in which this will be delivered will be delivered once we've had those further consultations with the sector and the communities that would be affected. Diolch.

16:25

Thank you, Deputy Minister, for your statement today. Certainly, in my role as the chair of the cross-party group on tourism, registration and licensing is an issue that has come up a number of times. Just two quick points, really. The first is the move towards statutory registration and not voluntary registration. I'm interested to understand your logic behind that, particularly as the economy Minister has previously stated that he believes that most visitor accommodation providers want to operate within the law, and he's also added that he wants to ensure a high level of voluntary compliance. So, I'm interested why you're moving now to a statutory registration rather than a voluntary one.

Secondly, I do have some concerns with the idea, as you've outlined at stage 3 of the process, that Welsh Government are going to seek to be the arbiter of whether a business can operate or not, not just based on a safety position, but based on your judgment of quality, and I wonder if you could give us a flavour today of what perhaps that quality might be in your judgment. Is it the softness of the mattress? Is it the heft of the cutlery perhaps or the depth of the pile of the carpets? I mean, what is it that you judge to be a quality accommodation? I guess the point is that, for visitors, the quality of accommodation can be subjective and varies from person to person depending on the experience that they want, so I have some significant concerns there. And also, linked to that, you don't choose to do that for other types of businesses: you don't go into barber shops and check the quality of the haircuts that are taking place or the quality of clothes being sold in a clothing shop or the quality of nails being filed in a nail bar. I wonder why it is that the tourism industry are being targeted when it comes to this idea of quality and what you see as a standard of quality. Thank you very much.

Thank you, Sam Rowlands, for those questions. Well, the statutory licensing, I mean, we're moving to registration to start with and then to a statutory licensing scheme for the reasons that I set out in the statement. We do want to have compliance and we do want to have a standard, and so the only way that we can ensure that we do that is to license it, because the licensing actually brings with it a legal obligation to meet certain standards. So, you know, there are so many different types of accommodation with different standards that they have to apply, and each type of accommodation will have to meet the relevant standard for their type of accommodation, and there will be a compliance requirement on them to do that, and failure to do that will bring with it some penalties. So, there is a good reason for doing that to ensure consumer confidence in any visitor accommodation that they attend.

I do take issue with you, Sam, because I do think people staying in accommodation is slightly different to somebody going for a haircut. If you go and have a haircut and you don't like the haircut, you won't go there again, but in terms of accommodation, there are issues about safety in accommodation, and that is part of what we are seeking to introduce: safety standards in every type of holiday accommodation or short-term let that is made available, and that will be part of the statutory registration.

And in terms of quality, well, yes, there clearly needs to be some conversation with the sector, with visitors, about what they look for in accommodation. We use it to a certain extent already through Visit Wales; there is a kind of star rating that Visit Wales uses, and it will be pretty much building on that system that already exists. So, the depth of the carpet might get you one star or three stars, it depends what you're looking for, but there will be a certain standard, basic provision that every type of accommodation will be expected to deliver, and anything that goes beyond those basic standards, then clearly the kind of rating would increase accordingly. So, it's just basically building on what we already have. So, I don't see it as tourism being targeted, Sam. I see it very much as tourism being put on a footing that gives visitors more confidence to use the sector and therefore encourage more people to come to Wales as a country that they know they can come and visit with confidence.

16:30

The Llywydd took the Chair.

Diolch, Llywydd. Minister, I was initially not concerned too much about your statement, but I'm afraid now I am, and I'm rather confused by it as well. I think everybody in this Chamber would absolutely agree that we need to make sure that the accommodation that people stay in is safe. No-one's got an argument with that at all. No-one's got an argument either about having some sort of scheme that ensures that that accommodation is safe. But I think what you are failing to grasp as a Government is that there are different types of accommodation that people like to enjoy. So, the standard and quality of accommodation in a tent is going to be very different to the standard and quality of a four-star hotel on the Llandudno seafront, for example. A holiday caravan is a completely different experience again, and may still be safe, but obviously is not going to meet the same quality standards that you seem to be implying that all accommodation has to meet. I wonder whether you can give us assurances that the scheme that you're proposing is not going to have an adverse impact on the holiday caravan industry in particular, which is very important in my own constituency, and that these licensing arrangements that you're talking about are not going to apply to individuals who might own a holiday caravan.

Secondly, another thing that I was very disappointed about was that you don't mention the fact that there could be groups of accommodation that ought to be exempted from the arrangements, not just the holiday caravans. One of the things that I have corresponded with you about twice now is the very simple accommodation, sometimes, that people on pilgrimage might have access to. That accommodation should be excluded, I believe, from the arrangements. Of course it should be safe, but it shouldn't have to meet the same sort of quality standards that other accommodation might need to meet. There were references to it in the feedback that was given as part of the consultation exercise, but your consultation summary didn't refer to pilgrim accommodation at all, which baffled me to some extent. So, what assurances can you give to those simple places of accommodation, such as churches on pilgrim routes, that they also will be able to be exempt from some of what may be, from the sounds of it, onerous requirements in some respects?

I thank Darren Millar for those comments. I think we need to be very clear: all visitor accommodation comes within scope in terms of what we look at. Obviously, personal accommodation—personal caravans that people have—wouldn't be covered. That's a piece of property that belongs to an individual that they use. If those people then want to rent those caravans out to somebody else, then there are certain standards that they have to meet to enable them to do that, so that anybody they rent that out to can be assured that the accommodation is safe.

All of this will become apparent as we go through the consultation. I said at the outset of the statement that this is not a full and final statement of where we are and what we're doing. We have a whole process of consultations still to go through. The detail of the legislation is still being worked through, but the basic premise is that visitor accommodation must meet certain safety standards. Every accommodation must register. Certain basic safety standards need to be applied for any accommodation that is rented out for short-term lets. There will then be a second phase, which looks at the further standards that we would require around the parity between short-term lets and residential accommodation. And then the third aspect of it is the quality standard. We will be looking at that in three phases. Each of those phases will be subject to consultation. So, we're introducing framework legislation that will allow us to develop the legislation as we go through.

On the exempt accommodation, you have written to me, Darren, about pilgrimage churches and chapels, and what I would say is we haven't made a decision on that yet, but whether you stay in a church or a hotel, then with accommodation, whether it operates for one day a year or 365 days of the year, there are safety standards that we would expect. But whether there will be particular accommodation that is exempted from this is still subject to the ongoing discussion that we'll be having with the sector.

16:35
6. Debate on a Statement: The Draft Budget 2024-25

The next item will be the debate on the draft budget 2024-25, and I call on the Minister for finance to make the statement on the budget. Rebecca Evans.

Thank you. I’m pleased to make a statement on the Welsh Government’s draft budget for 2024-25, which was laid on 19 December. Let me be clear: Wales is facing the toughest financial situation since the start of devolution. In making this draft budget, my Cabinet colleagues have all faced a series of stark and painful choices. Devolution means decisions about Wales are made in Wales, including those decisions on spending. But even after tax devolution, the majority of our funding still comes in the form of the block grant from the UK Government, meaning that the amount of money available to us is a direct result of spending decisions made by UK Government Ministers.

Over the last 13 years, successive UK Governments have given us more than a decade of austerity, a botched Brexit, and a disastrous mini-budget that almost crashed the economy. Despite our best efforts to shield public services, businesses and the Welsh population from the worst impacts of these policies, each has, individually and collectively, had a significant and lasting impact on Wales. We have also experienced the COVID-19 pandemic, wars in Ukraine and the middle east, record levels of inflation, and a cost-of-living crisis, all while we continue to respond to the nature and climate emergencies.

The Chancellor claims that action taken by the UK Government has helped the economy to turn a corner, but the reality is that forecasts from the Organisation for Economic Co-operation and Development and the International Monetary Fund show the UK is on course to be one of the worst-performing advanced economies this year and next, both in terms of high inflation and weak growth. The Office for Budget Responsibility’s new forecast paints a picture of poor UK economic prospects with only lacklustre growth expected for almost two years, inflation reducing more slowly than previously expected, and unemployment increasing. Living standards will be 3.5 per cent lower next year than before the pandemic.

The OBR's forecast shows the economy growing by just 0.2 per cent on average each quarter through to the end of next year, compared with an average quarterly growth rate of 0.5 per cent achieved between 1997 and 2010. And the latest gross domestic product data from the Office for National Statistics shows no growth in quarter 2, followed by negative growth in quarter 3. While the Prime Minister’s target to halve inflation has been met, this is almost entirely down to a combination of global factors driving down energy and food prices and the Bank of England’s programme of increasing interest rates—we've had 14 successive increases to the base rate.

At the autumn statement, rather than restore funding to fragile public services, the Chancellor signalled a fresh round of austerity. He chose to use his fiscal headroom to make relatively modest tax cuts and focus on short-term projects in marginal constituencies. The Institute for Fiscal Studies notes that the public finances have not meaningfully improved, the growth outlook has weakened, and inflation is expected to stay higher for longer. Following the autumn statement, the Welsh Government’s resource settlement will reduce by 0.1 per cent in 2024-25 in real terms, and our capital budget is down by 6 per cent in real terms. Overall, that’s a 1 per cent year-on-year real-terms reduction to our settlement.

Our settlement for 2024-25 is now worth up to £1.3 billion less in real terms than expected at the time of the 2021 spending review. The choices made by the Chancellor in his autumn statement have not made our choices any easier. They have short-term consequences on the decisions that we can take in Wales in this budget round, and they will have longer term consequences across the UK as public services once again face deep and damaging cuts because they have been deprived of real investment. Once again, our funding settlement is not sufficient to respond to the extraordinary pressures that Wales faces.

In making this draft budget, we have had to take incredibly difficult decisions, and they are the most stark and painful since devolution. We have worked over many months to radically reshape our budget so that we can focus funding on the services that matter most to people.

We have focused funding to invest more in the NHS and to protect the core local government settlement, which in turn funds schools, social services, and the other vital everyday services that we rely on. We have reshaped our budgets in line with a set of guiding principles: to protect core, front-line public services as far as possible; to deliver the greatest benefit to households that are hardest hit; to prioritise jobs, wherever possible; and to work in partnership with other public sector bodies to face this financial storm together.

The draft budget provides an extra £450 million to support the NHS in 2024-25. This is on top of the additional £425 million that we made available in October for 2023-24. This means that we are increasing funding for the NHS in Wales by more than 4 per cent in 2024-25 compared to less than 1 per cent in England.

We're protecting the core local government settlement, which, with council tax, funds schools, social services and social care, refuse and recycling collections and local services. We are providing the 3.1 per cent increase that we promised last year. We are also providing an extra £1.3 million through the revenue support grant to ensure that no authority has an increase in settlement of below 2 per cent. But even with this additional funding, 2024-25 will still be a difficult year for health boards and councils.

Funding that goes directly to schools has been prioritised. Our successful COVID recovery programme, Recruit, Recover and Raise Standards, was due to be tapered as the post-pandemic effects lessen. However, we know that the impacts of the pandemic are continuing to be detrimental to our learners across Wales, so we are protecting this funding in order to continue to support them. We're also protecting the pupil development grant funding that funds schools to support learners from low-income households.

We will maintain targeted and emergency support for people affected by the ongoing cost-of-living crisis, and we will continue to spend more than £0.5 billion to help households and businesses pay their council and non-domestic rates bills. We have taken the decision to cap the increase to the non-domestic rates multiplier for 2024-25 to 5 per cent at a recurring cost annually to the Welsh budget of £18 million. This is the maximum level of support affordable using all of the consequential funding that came to Wales from the UK Government’s decision relating to the multiplier in England.

Almost half of ratepayers, including thousands of small businesses across Wales, will not be affected by an increase in the multiplier, as our generous system of full reliefs means that they already pay no rates at all. We will also be investing an additional £78 million to provide a fifth successive year of support for retail, leisure and hospitality businesses with their NDR bills. Eligible ratepayers will receive 40 per cent NDR relief for the duration of 2024-25. This builds on the almost £1 billion of support provided through retail, leisure and hospitality relief schemes since 2020-21. We will also be introducing a £20 million futureproofing fund in our final budget. This fund will be available to retail and hospitality businesses to invest in measures to futureproof their business, such as investment in renewable energy and digital enhancement to improve their sustainability.

We're acting to protect those areas that matter most. This includes protecting funding for the programmes that are important to the agriculture sector, maintaining the basic payment scheme at the same level of £238 million for 2024. But we have needed to take further difficult decisions, including to refocus some spending away from non-devolved areas, which the UK Government should be funding. These are areas where we have previously been able to step in to fill the gap. We are reprioritising £7.5 million from the budget for PCSOs. While we will still invest £15.5 million in Welsh Government-funded police community support officers, our policing partners will need to reshape their workforce. We will work closely with our partners to minimise the negative impacts as far as possible. We are reprioritising £15.5 million from the Ukraine programme due to the reduced number of new arrivals alongside the success of our programme to move people on from their initial accommodation.

The unprecedented pressures on both our budget and the budgets of public services across Wales mean that we will need to look at other potential sources of funding. We will therefore carefully consider whether we need to increase existing charges for some services, such as NHS dental care, university tuition fees and domiciliary care.

Llywydd, I look forward to this afternoon’s debate and the ongoing debate that will follow, but before I conclude my opening remarks I would like to say again that I'm very grateful to all of my Cabinet colleagues for their ongoing commitment and hard work during this process. I also want to thank Siân Gwenllian for our good working relationship and her ongoing engagement in relation to the co-operation agreement, which is a small proportion, around 1 per cent of our overall budget. This is a difficult budget in extraordinary times, but, ultimately, it is a budget that targets investment towards the public services that people in Wales tell us that they value the most.

16:45

Thank you for the statement, Minister. I think all would agree here that proper scrutiny is so important. Democracy is made stronger by a Government that accepts and invites scrutiny and accountability, especially at a time when the Welsh Government is failing on so many levels. Once again, the Welsh Government has chosen to release their draft budget during recess and not directly to Parliament, as they do in Scotland or in England. This approach stifles the opportunity for proper challenge, forcing a rushed approach to scrutiny, leaving committees little time and us in this Chamber probably an hour or two, tops, for debate. The presentation of timely budgets is a fundamental right that parliamentarians should be able to expect. I honestly can't understand why the Welsh Government couldn't have presented its budget proposals earlier, with scenarios that could have reflected changes that may have been influenced by the autumn statement, even if the final draft budget itself could not be completed until 19 December. We saw no change in thinking after the autumn statement.

So, moving on, Llywydd. The people of Wales deserve to have reliable and high-quality public services, especially in this day and age. It's 2024, for heaven's sake. These things we took for granted for decades, things like healthcare being delivered in a timely way at the point of need or being able to get a care package for our loved ones or the best education for our children. These and so many more fundamental expectations have been eroded or damaged as a result of 25 years of this Government. The Government's budget narrative states that this budget aims to, I quote,

'protect the services which matter most to people'.

I would suggest that this is very unlikely with this budget, despite the increased funding to our NHS.

As we all know, the Welsh Government received that £1.20 for every £1 spent, per person, on health and education in England, but we know it hasn't been spending all it should've done. Indeed, only as much as about £1.05, prior to the pandemic. The extra money Wales receives was negotiated through the fiscal framework, agreed by Welsh Government, and further additional need here is now recognised through a needs-based adjustment within the Barnett system—a needs-based element that the First Minister recently denied that it existed but the budget narrative itself confirms that, in paragraph 1.08.

Now, we welcome more money going to health. It's about time. As I've said here before, if the Government had been investing in the health service as it should've done over the last 10 years, at least our Welsh NHS would have been resilient and strong, and we wouldn't have seen the in-year knee-jerk budget adjustments and the proposals having to come forward, as now. Just to put into context, another 5p spent in £1 in health would have amounted to around £500 million a year. Sadly, this money has been spent elsewhere for many, many years.

As it stands—[Interruption.] No, I won't take any interventions today. As it stands, every health board in Wales is under some form of enhanced monitoring or special measures for finance, and is expected to make savings also. Yes, pressures are common across the health services in the United Kingdom, but not at the levels they are here. The truth is, the Welsh Government has been preoccupied on so many other things for too long. It's a fact our NHS is struggling, due to years of underfunding. Our hard-working—[Interruption.] Sorry? 

16:50