PARLIAMENTARY DEBATE
Spending Review 2025 - 16 July 2025 (Commons/Commons Chamber)

Through the spending review, we are providing a record £22.4 billion per year on average for the Welsh Government; investing at least £445 million in Welsh rail; investing £211 million a year in local growth funding; and providing £118 million of new funding for coal tip safety. This Labour Government are investing in Wales’s economy, public services and people. We have ended Conservative austerity.

I was pleased to see funding for a number of transport projects in Wales in the spending review, not least because my city of Edinburgh is now linked directly by rail to the Secretary of State’s city of Cardiff. Lumo, which runs services in Scotland through open access, is hoping to begin a service through south Wales. Does the Minister agree with me that the spending review presents a fantastic opportunity for such projects, which create jobs, strengthen the Union and boost the UK’s economy?

I very much agree with the hon. Lady about the benefits to the Union of the significant investment that this Government are making in transport. I am very happy to take away her comment on Lumo and open access, and talk to the Rail Minister on her behalf.

I was pleased to hear the Secretary of State explain in evidence to the Welsh Affairs Committee last week that Wales will receive a Barnett consequential of some £200 million as a result of transport announcements for English mayoral combined authority areas made in the lead up to the spending review. Could the Secretary of State clarify whether she was referring to the transport for city regions funding, which was announced on 4 June? The Chief Secretary to the Treasury stated in an answer to a written question that it was not possible to identify the specific Barnett consequential arising from that programme.

My understanding is that the just over £200 million figure that I referred to in my evidence to the Welsh Affairs Committee relates to the combined mayoral authority announcements that were made prior to the spending review.

I call the Chair of the Welsh Affairs Committee.

I am delighted that the £500 million announced for the steel industry in the spending review has already been translated into boots on the ground and high-vis jackets with the commencement of the building of the electric arc furnace, safeguarding 5,000 jobs. Will the Secretary of State join me in welcoming the fantastic progress that has already been made in the steel industry and in supply chains all across Wales?

I thank the Chair of the Welsh Affairs Committee for her question. Monday was a really significant day for Welsh steelmaking. I was at the groundbreaking ceremony to begin construction of the electric arc furnace, which will be one of the largest in the world, securing 5,000 jobs and the future of steelmaking in Port Talbot for years to come. It has been made possible by £1.25 billion of investment, including £500 million from this Government, as well as our £80 million to support workers and the wider steel community, and will benefit not just Port Talbot but downstream sites. This has been a really challenging time for steelworkers across Wales, but I think this week marks a real turning point, securing a bright future for years to come.

As a result of the UK Government’s half a billion pound investment in the future of steel in Port Talbot, construction has now begun on the new electric arc furnace. Will the Secretary of State share what this fantastic news means for Port Talbot and the surrounding communities, like my own of Neath and Swansea East?

The Government’s investment in the electric arc furnace shows how serious our commitment is to the steel industry, not just in south Wales but across the UK. It is why we have slashed energy costs for steel producers and other energy-intensive industries through the industrial strategy, strengthened procurement rules to use even more UK steel in construction, ensured that the UK is the only country in the world not paying 50% tariffs to the United States, and boosted trade defences to protect the sector against foreign imports. The steel strategy, which we will publish later in the year, will also deliver up to £2.5 billion of investment to help to maintain jobs and growth.

I call the Liberal Democrat spokesperson.

The UK Government say that Wales is getting record-breaking funding to tackle NHS waiting lists, but for my constituent Melanie Walker, the reality is the opposite. After waiting 59 weeks for a hip operation, she has now been told she must wait another 45, because Powys Teaching Health Board is artificially extending waiting times for patients treated in Shropshire and Herefordshire to match lower Welsh averages—a cost-cutting move driven by the Welsh Government. Does the Secretary of State think that is fair to Melanie or consistent with her Government’s pledge to reduce waiting times?

I am very sorry to hear about Melanie’s situation. However, I would say to the hon. Gentleman that his party were in government with the Conservatives during the coalition years. That Government delivered horrible austerity on Wales, which lead to public services in Wales being degraded. His party was the architect of that.

The Chancellor says that cutting red tape for bankers will trickle down to households. [Interruption.] The 2008 financial crash taught us that that is utter nonsense. [Interruption.] The Secretary of State has just mentioned things that happened in the past; in 2023, she said:

“12 years of ‘trickle-down’ and ‘trickle-out’ growth strategies have failed to deliver for Britain.”

Does she stand by what she said in opposition, or does she now toe the line for the sake of the Chancellor’s friends in the City?

I apologise to the right hon. Lady; I am afraid I did not hear the start of her question. On tax and what the Chancellor has talked about, we stand by our manifesto commitment not to increase income tax, employee national insurance contributions or VAT. The Chancellor has said that it would be irresponsible to write future Budgets months in advance, especially given the global situation. There are clearly costs and implications to every decision this Parliament makes, but we remain focused on growing our economy in Wales and across the UK.

That is one way of avoiding answering the question, Mr Speaker. My point is that Labour’s skewed sense of fairness does not stop at prioritising the interests of the banks over others; it is also hitting our farmers and rural communities. The Farmers Union of Wales has warned that Labour’s planned reforms to agricultural property relief will do irreversible damage to the Welsh family farm. Looking ahead to next week’s Royal Welsh Show, will the Secretary of State agree at last that what we really need is a tax on extreme wealth, instead of a tax on those who feed us and sustain our rural economies?

At the autumn Budget, we demonstrated our commitment to our fiscal rules while maintaining high levels of investment to rebuild our public services—an investment in farming as well—after the mess that the Tories left behind. We have repeatedly said that those with the broadest shoulders should bear the greatest burden, and that has been reflected in the decisions that we have taken so far. Tax changes, as the right hon. Member knows, are a matter for the Chancellor.