Eighth Delegated Legislation Committee
Wednesday 1st July 2026
Skip to latest contribution
This debate has concluded
(began 2 months, 3 weeks ago)
Watch LiveSkip to latest contribution
This debate has concluded
16:30
16:30
16:30
16:30
Speaker 2
-
Speaker 2
Thank you chair. I beg to move that. The committee has considered the draft Government of Wales Act 2006. Increase of capital borrowing powers, limit order 2026 laid before the House on Tuesday, the 2nd of June. It is a pleasure to serve under your chair, Mr. Harris, and I'm grateful for the opportunity to debate this draft order today. The government was elected on a manifesto commitment to work in partnership with the Welsh Government to ensure that the Welsh fiscal framework delivers value for money.
It was as a result of joint working between both governments that my right hon. Friend the Chancellor announced as part of the autumn budget last year some fiscal flexibilities for the Welsh Government's budget to enable it to better support businesses and public services in Wales. This included increasing the Welsh Government's annual and cumulative capital borrowing limits. Its overall reserve limit and its annual Ardal and Ceadel drawdown limits by 10% this year. From next year, each of those limits will be uprated annually in line with inflation.
Only one of these limits has a legislative basis. The Welsh Government's cumulative capital borrowing limit. Section one, two two A1 of the Government of Wales Act 2006, currently sets this limit at £1 billion. Section 122 a two of that act enables the Secretary of State to vary this limit with the consent of the Treasury. The order before the Committee this afternoon made under section one, two two a two of the Government of Wales Act, 2006 will increase. Increase.
The Welsh Government's cumulative capital borrowing limit by £100 million, in line with the commitment at autumn budget, the Welsh Government remains accountable to the Senate for how it uses these increased borrowing powers. The Wales Office will bring forward further orders annually to further increase this limit, in line with inflation, as is the current process in respect of the Welsh Government's borrowing limits. In summary, this order will increase the Welsh Government's cumulative capital borrowing limit to £1.1 billion, in line with the commitment made at autumn budget last year.
This. The changes to the fiscal framework, together with additional funding through Barnett and the largest settlement in the history of devolution, means that the UK government is providing the Welsh Government with nearly £6.5 billion in additional spending power. I'll give way.
It was as a result of joint working between both governments that my right hon. Friend the Chancellor announced as part of the autumn budget last year some fiscal flexibilities for the Welsh Government's budget to enable it to better support businesses and public services in Wales. This included increasing the Welsh Government's annual and cumulative capital borrowing limits. Its overall reserve limit and its annual Ardal and Ceadel drawdown limits by 10% this year. From next year, each of those limits will be uprated annually in line with inflation.
Only one of these limits has a legislative basis. The Welsh Government's cumulative capital borrowing limit. Section one, two two A1 of the Government of Wales Act 2006, currently sets this limit at £1 billion. Section 122 a two of that act enables the Secretary of State to vary this limit with the consent of the Treasury. The order before the Committee this afternoon made under section one, two two a two of the Government of Wales Act, 2006 will increase. Increase.
The Welsh Government's cumulative capital borrowing limit by £100 million, in line with the commitment at autumn budget, the Welsh Government remains accountable to the Senate for how it uses these increased borrowing powers. The Wales Office will bring forward further orders annually to further increase this limit, in line with inflation, as is the current process in respect of the Welsh Government's borrowing limits. In summary, this order will increase the Welsh Government's cumulative capital borrowing limit to £1.1 billion, in line with the commitment made at autumn budget last year.
This. The changes to the fiscal framework, together with additional funding through Barnett and the largest settlement in the history of devolution, means that the UK government is providing the Welsh Government with nearly £6.5 billion in additional spending power. I'll give way.
16:33
16:33
16:33
16:33
16:34
Speaker 4
-
Speaker 4
Thank you, Madam Chairman and Mrs. Harris. It is a pleasure to serve under your chairmanship this afternoon and a privilege to respond on behalf of His Majesty's loyal opposition on a subject which could, frankly, be hard to be more timely and important. Now, a few issues, I think, this afternoon. I'm conscious I'm delaying people on a warm afternoon with football around the corner for some, but I think there are issues that deserve our attention to to look at. I think it would be very easy for me to stand here this afternoon and just dismiss any debate outright, and for honourable members opposite, also for us to just wave it through without looking more roundly, although I am impressed with the Minister's speed in opening this debate.
So it's clear she was going in one direction. Um, look, it is Parliament's responsibility not simply just to approve, but it is to fundamentally, as my honourable friend has just pointed out, provide real scrutiny. Nobody disputes that Wales needs further investment on the ground after 27 years of Labour in the Senate, wasting money on schemes that have very little value or outcome to communities, I think this is very important that we look at the question of whether it's currently just in terms of increasing the Welsh Government's borrowing limit in this way, and it's the right way to achieve change on the ground, and whether truly there is convincing case that has been brought forward.
Now I have the joy, Madam chairman, in my shadow ministerial role of travelling the length and breadth of Wales. You'll know often in her constituency area too, but it gives me the opportunity to meet people from across business sectors and communities, and what greatly pains me is the continuing feel that there is, despite more money and support and more local devolution and decision making, that there is a sense of continued deprivation, dilapidation and deterioration, particularly around infrastructure, that it is hitting communities too hard and that what has long been promised through investment, through devolution into Welsh Government, is simply not landed on the ground.
Now. The Brynglas tunnels, for example, have descended into a continued stranglehold on the economies of Newport, Monmouthshire, Cardiff and Swansea. Madam chairman, how simply has the M4 been improved?It has not. Unemployment in Wales is still at its highest levels as a whole across the United Kingdom, and continuing to dash young people's aspirations and. It pains me, too, that too many young people feel that they need to leave Wales to find the opportunities that they want. Now everyone, including me, knows somebody in Wales who's waiting in pain and vain when it comes to never ending Welsh NHS waiting lists.
And despite ongoing promises of change that better days ahead under the Senate, that has not changed. So both Clyde and Labour have been broken records and making a claim that they haven't got the money to fix Wales's problems. So the truth is, after years of the Welsh Government benefiting from substantial increases in funding, what has happened now in 2021 alone, the then chancellor, Rishi Sunak, announced the Welsh block grant, which would rise to around 18 billion a year, an increase of roughly 2.5 billion a year. That naturally raises three important questions.
So I think it's pertinent to think about this afternoon. Firstly, if additional funding, additional funding had been made available, then why do so many structural problems remain?Since 1999 continue to be unresolved?Secondly, before the government agrees to increase the level of borrowing, surely ministers in the Wales Office should ask how previous resources have been prioritised. And thirdly, what are the actual outcomes?Madam chairman, for too long, the Welsh Government who were aided and abetted and let's be honest, by the Labour, and Plaid Cymru, have decided to prioritise the wrong things.
So under the then Labour Welsh Government, more than 100 million of taxpayers money was spent on expanding expanding the size of the Senate, with 36 more politicians and more than 150 million spent on developing plans for building the M4 relief road, which was frankly cancelled abruptly, meaning tens of millions spent on posing on a 20 mile per hour default speed limit and increasing journey times and creating wider economic costs. So previous wasteful spending projects again at the CNF. Indeed, setting up embassies all over the world. The failed Circuit of Wales um project tree planting in Uganda all have cost taxpayers money.
So if the decision today is agreed to increase the Welsh Government's borrowing powers, surely it is incumbent on all of us to ensure that it is not again misappropriated. Perusing plied Comrie's ultimate goal, which will be setting up and breaking up an independent country. So it is time to be serious about those geopolitical tensions that we have widely, but also that we are better together, and also to attract more investment into Wales. I would encourage the Welsh Government to heed the Conservative and Party Unionist Party's ideals to get on and build the M4 relief road, to get on and abolish business rates for small and medium sized businesses to scrap stamp duty in Wales and, of course, from glass being in part of the deposit return scheme.
I think that in turn, along with public borrowing, will make a difference. But public borrowing and more of it today is not an end in itself and it must be justified with a clear and credible plan. And I know there are members sitting in this meeting room this afternoon whose constituents will be directly affected by this, and we should be mindful of where the money is going. And is it making a difference for the people of Wales?Devolution cannot be a one way road where powers are devolved, more money handed over, only for it to be wasted on pointless schemes and for the people of Wales not to see change.
We can no longer afford to devolve powers and increase borrowing, just hoping for the best that the people of Wales will get better and more because they deserve so much more than that. It is about changing lives and supporting people. So to conclude, I do ask the minister, how did the government come to the figure of a 10% increase?I think she covered that to a degree in her opening. What expectations?Expectations, given that the change of government and what is going on in the Senate will mean for the spend of this important capital funding, taxpayers money, and what justification has the current Welsh Government provided for increasing the grant, and how will they show their impact?But I do think we should be holding these 96 politicians to account.
Welsh Government provided for increasing the grant. And how will they show their impact?And I understand from the minister's opening remarks she's comfortable. It's devolved to the Senate, but I do think we should be holding these 96 politicians to account. And I do look forward to the Minister's kind response and anything that she cannot comment on this afternoon, I'm happy to see in writing.
So it's clear she was going in one direction. Um, look, it is Parliament's responsibility not simply just to approve, but it is to fundamentally, as my honourable friend has just pointed out, provide real scrutiny. Nobody disputes that Wales needs further investment on the ground after 27 years of Labour in the Senate, wasting money on schemes that have very little value or outcome to communities, I think this is very important that we look at the question of whether it's currently just in terms of increasing the Welsh Government's borrowing limit in this way, and it's the right way to achieve change on the ground, and whether truly there is convincing case that has been brought forward.
Now I have the joy, Madam chairman, in my shadow ministerial role of travelling the length and breadth of Wales. You'll know often in her constituency area too, but it gives me the opportunity to meet people from across business sectors and communities, and what greatly pains me is the continuing feel that there is, despite more money and support and more local devolution and decision making, that there is a sense of continued deprivation, dilapidation and deterioration, particularly around infrastructure, that it is hitting communities too hard and that what has long been promised through investment, through devolution into Welsh Government, is simply not landed on the ground.
Now. The Brynglas tunnels, for example, have descended into a continued stranglehold on the economies of Newport, Monmouthshire, Cardiff and Swansea. Madam chairman, how simply has the M4 been improved?It has not. Unemployment in Wales is still at its highest levels as a whole across the United Kingdom, and continuing to dash young people's aspirations and. It pains me, too, that too many young people feel that they need to leave Wales to find the opportunities that they want. Now everyone, including me, knows somebody in Wales who's waiting in pain and vain when it comes to never ending Welsh NHS waiting lists.
And despite ongoing promises of change that better days ahead under the Senate, that has not changed. So both Clyde and Labour have been broken records and making a claim that they haven't got the money to fix Wales's problems. So the truth is, after years of the Welsh Government benefiting from substantial increases in funding, what has happened now in 2021 alone, the then chancellor, Rishi Sunak, announced the Welsh block grant, which would rise to around 18 billion a year, an increase of roughly 2.5 billion a year. That naturally raises three important questions.
So I think it's pertinent to think about this afternoon. Firstly, if additional funding, additional funding had been made available, then why do so many structural problems remain?Since 1999 continue to be unresolved?Secondly, before the government agrees to increase the level of borrowing, surely ministers in the Wales Office should ask how previous resources have been prioritised. And thirdly, what are the actual outcomes?Madam chairman, for too long, the Welsh Government who were aided and abetted and let's be honest, by the Labour, and Plaid Cymru, have decided to prioritise the wrong things.
So under the then Labour Welsh Government, more than 100 million of taxpayers money was spent on expanding expanding the size of the Senate, with 36 more politicians and more than 150 million spent on developing plans for building the M4 relief road, which was frankly cancelled abruptly, meaning tens of millions spent on posing on a 20 mile per hour default speed limit and increasing journey times and creating wider economic costs. So previous wasteful spending projects again at the CNF. Indeed, setting up embassies all over the world. The failed Circuit of Wales um project tree planting in Uganda all have cost taxpayers money.
So if the decision today is agreed to increase the Welsh Government's borrowing powers, surely it is incumbent on all of us to ensure that it is not again misappropriated. Perusing plied Comrie's ultimate goal, which will be setting up and breaking up an independent country. So it is time to be serious about those geopolitical tensions that we have widely, but also that we are better together, and also to attract more investment into Wales. I would encourage the Welsh Government to heed the Conservative and Party Unionist Party's ideals to get on and build the M4 relief road, to get on and abolish business rates for small and medium sized businesses to scrap stamp duty in Wales and, of course, from glass being in part of the deposit return scheme.
I think that in turn, along with public borrowing, will make a difference. But public borrowing and more of it today is not an end in itself and it must be justified with a clear and credible plan. And I know there are members sitting in this meeting room this afternoon whose constituents will be directly affected by this, and we should be mindful of where the money is going. And is it making a difference for the people of Wales?Devolution cannot be a one way road where powers are devolved, more money handed over, only for it to be wasted on pointless schemes and for the people of Wales not to see change.
We can no longer afford to devolve powers and increase borrowing, just hoping for the best that the people of Wales will get better and more because they deserve so much more than that. It is about changing lives and supporting people. So to conclude, I do ask the minister, how did the government come to the figure of a 10% increase?I think she covered that to a degree in her opening. What expectations?Expectations, given that the change of government and what is going on in the Senate will mean for the spend of this important capital funding, taxpayers money, and what justification has the current Welsh Government provided for increasing the grant, and how will they show their impact?But I do think we should be holding these 96 politicians to account.
Welsh Government provided for increasing the grant. And how will they show their impact?And I understand from the minister's opening remarks she's comfortable. It's devolved to the Senate, but I do think we should be holding these 96 politicians to account. And I do look forward to the Minister's kind response and anything that she cannot comment on this afternoon, I'm happy to see in writing.
16:41
16:41
16:41
Speaker 2
-
Speaker 2
Thank you, Mrs. Harris. And I would like to thank the Shadow Minister for her contribution to this debate this afternoon. This order delivers the government's commitment at autumn budget to increase the Welsh Government's cumulative borrowing limit by 10%. And I mentioned in my opening remarks how we got to that, uh, to be clear, this order gives the Welsh Government additional flexibility to manage its own budget. It doesn't change the overall funding settlement or the Barnett formula. And this was agreed at the budget by the Chancellor and announced by the Chancellor at the last budget.
So the Welsh Government is accountable to the Senate for how it uses these borrowing powers. And, of course, from Westminster. We will be looking towards the Senate and to our colleagues in the Senate looking at how the Welsh Government will be using those additional powers. But the Welsh Government is accountable for ensuring that this extra borrowing, on the whole, borrowing, delivers value for money for the people of Wales and for all of our constituents, and I'm very proud to be part of this UK Labour government that has delivered the biggest settlement in the devolution in the history of devolution.
That will be a game changer and that will make a difference to people on the ground. And I would. Just simply on that like to I'm aware that we're all trying to. Or many of you are trying to get out and and get to the football. But so. If there's anything further, she. The the shadow Minister would like to raise. Then I'm very willing to have that conversation. But this is scrutiny that is undertaken by the Senate towards the Welsh Government.
And I'm very proud of this. UK Labour government's work in ensuring that these additional powers are enhanced.
So the Welsh Government is accountable to the Senate for how it uses these borrowing powers. And, of course, from Westminster. We will be looking towards the Senate and to our colleagues in the Senate looking at how the Welsh Government will be using those additional powers. But the Welsh Government is accountable for ensuring that this extra borrowing, on the whole, borrowing, delivers value for money for the people of Wales and for all of our constituents, and I'm very proud to be part of this UK Labour government that has delivered the biggest settlement in the devolution in the history of devolution.
That will be a game changer and that will make a difference to people on the ground. And I would. Just simply on that like to I'm aware that we're all trying to. Or many of you are trying to get out and and get to the football. But so. If there's anything further, she. The the shadow Minister would like to raise. Then I'm very willing to have that conversation. But this is scrutiny that is undertaken by the Senate towards the Welsh Government.
And I'm very proud of this. UK Labour government's work in ensuring that these additional powers are enhanced.
16:43
16:44
16:44
16:44
Speaker 4
-
Speaker 4
I thank the Minister. I think she's been very generous to to us all. But I just want to reiterate the point about accountability. There is a changed process group of people and a focus in the Senate to when this was agreed at autumn budget, to what was set out on the 2nd of June, and to what she is presenting in the House to us today. And I think this feeling of a lack of accountability and openness and the wanton spending of other people's money is very acute when people are finding the cost of living very challenging.
So I offer to work with her to, to make sure that if these powers are given and we are not going to be dividing the House today on this, that we all keep an equal watch, that it does change lives on the ground, and that we are willing to roll up our sleeves if we do see it being wastefully used. And equally that lives are not changing.
So I offer to work with her to, to make sure that if these powers are given and we are not going to be dividing the House today on this, that we all keep an equal watch, that it does change lives on the ground, and that we are willing to roll up our sleeves if we do see it being wastefully used. And equally that lives are not changing.
16:44
16:44
Speaker 2
-
Speaker 2
I thank the Shadow Minister for her comments. And absolutely, this is about ensuring that all of the people of Wales feel that value from these additional spending and borrowing powers and equally from the very the huge. Devolution settlement that this Labour government has been proud to ensure is felt by the people of Wales in the communities of Wales, and not just in one part, but right across the whole of Wales. And absolutely I'm committed to, as Wales Office minister, to working with my counterparts in the Welsh Government to make sure that happens.
But with colleagues right across the House. So I would like to just close by offering my thanks for the productive manner in which she has, uh, taken part in this debate and also how the UK and Welsh governments have worked together very closely to ensure that we have come to this, uh, piece of legislation today. So I therefore commend this order to the House and beg to move the.
But with colleagues right across the House. So I would like to just close by offering my thanks for the productive manner in which she has, uh, taken part in this debate and also how the UK and Welsh governments have worked together very closely to ensure that we have come to this, uh, piece of legislation today. So I therefore commend this order to the House and beg to move the.