Budget Resolutions and Economic Situation

Gerald Jones Excerpts

Monday 8th March 2021 Commons Chamber

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab) [V]]

Time does not permit me to cover all the issues that I would like to, but I shall start with the vital extension of the £20 universal credit uplift to September, which is, of course, welcome and is something that I and many other Opposition Members have been calling for. However, it does not go far enough.

Last Wednesday, the Chancellor had the opportunity to do the right thing and make the uplift permanent. It was disappointing, albeit not surprising, to see that he still intends to go ahead with cutting the uplift in September. This will mean a cut of £7.8 million to the local economy just in my Merthyr Tydfil and Rhymney constituency, leaving as many as 6,750 vulnerable families £1,000 a year worse off. We all know that the economic impact of the pandemic will be felt far beyond September this year, with some of the most vulnerable families in our communities set to be hit the hardest as a result of the measures confirmed by the Chancellor last week. Therefore, the Government’s decision to end this vital extra support in September is all the more callous.

Turning to Wales, the Budget provides additional revenue funding for Wales of £735 million, almost entirely as a result of covid measures in England. On a like-for-like basis, the Welsh Government’s core budget for day-to-day spending in 2021-22 is still 4% lower per head in real terms than it was in 2010-11—11 years on and it is still lower in real terms. In addition, despite the Chancellor’s intentions for an investment-led recovery, he failed to provide the additional capital stimulus needed to lay the foundations, with not a single extra penny for capital spend in Wales.

That leads me to the lack of support for those affected by flooding in my area. Just over a year ago, I asked the Prime Minister at Prime Minister’s questions for his commitment on this issue and, at the Dispatch Box, he promised, in his words, to passport the money through to Wales to help to deal with the floods. Only after 10 months was there a sign of the support, but it commits only to the current financial year and provides only a fraction of what is needed. In this Budget, there is no provision to meet this urgent need.

Finally, the approach to replacing EU structural funds by directly allocating funding in Wales on devolved matters through the UK community renewal fund and the levelling-up fund is just not acceptable. Clearly, the people of Wales will benefit from only a fraction of the funding that they would have received from EU funding, demonstrating again the Government’s failure to invest adequately in Wales. This is despite the promise made to deliver not a penny less for the people of Wales.

The community renewal fund is £220 million across the whole UK, so a population share for Wales would be only around £11 million. The levelling-up fund is £4.8 billion over four years, with £600 million in the Budget for 2021-22, so our population share is £30 million. Based on the very limited information that the Government have provided, a reasonable assumption of what Wales might get from these two funds next year is around £40 million to £45 million, compared with, on average, the £375 million each year that Wales received in recent years from European structural funds. Clearly this is just not good enough, and I hope that the Minister will provide some clarity on these issues as he closes today’s debate.