PARLIAMENTARY DEBATE
2025 Budget - 3 December 2025 (Commons/Commons Chamber)

I work closely with the Welsh Government on our shared priorities, and our two Labour Governments work together for the people of Wales. This Budget delivered for Wales by investing in public services, cutting the cost of living and shrinking the national debt. We have scrapped the Tory and Lib Dem two-child limit, benefiting 69,000 children in Wales, and slashed energy bills by £150 per household. We have also announced further increases to the minimum and living wage, building on last year’s increases, which have already helped 160,000 of the lowest-paid workers in Wales.

The UK Government are providing the Welsh Government with nearly £6 billion in additional spending power over the spending review period as a result of changes to the fiscal framework, additional funding through the Barnett formula and the largest settlement in devolution history. We are righting the injustice of how Wales has been funded, and delivering on our manifesto commitment to update the fiscal framework. Crucially, these changes mean that the Welsh Government will be able to invest more funding in our hospitals, schools and other public services.

I call the Chair of the Welsh Affairs Committee.

The Welsh compound semiconductor cluster in my constituency is a real Welsh success story in terms of this year’s Budget. It has attracted more than £1 billion-worth of investment over the last decade and has supported almost 3,000 jobs, and plans to create 1,000 more jobs are well on the way. What conversations is the Secretary of State having with UK and Welsh Government colleagues to ensure that the Welsh compound semiconductor cluster continues to grow, and to create more well-paid jobs across south Wales?

My hon. Friend rightly championed the Welsh compound semiconductor cluster from the minute she arrived in this place, and I have seen its success for myself on a number of visits. In last week’s Budget, the Chancellor announced £10 million for semiconductor activities in south Wales. That funding will focus on the technology that is central and critical to artificial intelligence and data centres, in order to support innovation, strengthen supply chains and develop the skills needed for future growth. Just two weeks ago, I was with the Secretary of State for Science, Innovation and Technology at Cardiff University—a key partner for the cluster—to announce the south Wales AI growth zone, which will create more than 5,000 new jobs for local communities, including in my hon. Friend’s constituency.

We all know why the Chancellor went to Wales on Monday: she was seeking to avoid scrutiny over a self-inflicted controversy, but it does not end there. There has been criticism of the Chancellor’s claim that additional funding for Scotland was given

“because Anas Sarwar asked us to.”—[Official Report, 26 November 2025; Vol. 776, c. 388.]

There was no mention of the Welsh First Minister, Eluned Morgan. There is a mechanism for Barnett funding; it is not a gift. Will the Secretary of State commit to honesty about how Wales is funded, rather than insulting our intelligence?

I am surprised at the right hon. Lady’s tone. While this Labour Government make record investment in Wales, Plaid Cymru’s response is to be the same old stuck record, with its miserable grievance politics. It really is the Victor Meldrew of Welsh politics. It still has not explained which taxes it would raise and which public services it would cut to pay for its disastrous independence plan, which would cost every single person in Wales £7,000 a year, every single year.

That was desperate. We all know that the Secretary of State has been using figures that we cannot extrapolate from, and cannot use to show what independence will do. I wish she would keep up, because Plaid Cymru is actually talking with Labour in Cardiff about how to improve public services and the NHS. The people of Wales want facts, not spin. A year after the announcement of inheritance tax changes, the UK Government have still failed to release data on the impact on family businesses and farms in Wales. She knows that the cross-party Welsh Affairs Committee has called for the changes to be delayed until a full Wales-specific impact assessment is published. What have the Government got to hide?

The Government have absolutely nothing to hide.