Senedd Cymru (Welsh Parliament), 27 November 2024

268 contributions from 40 members. The official report.

1. Questions to the Cabinet Secretary for Economy, Energy and Planning

Elin Jones (Plaid Cymru, Ceredigion)

Good afternoon and welcome to this afternoon's Plenary meeting. The first item on our agenda this afternoon is questions to the Cabinet Secretary for Economy, Energy and Planning, and the first question is from Russell George.

Russell George (Conservative, Montgomeryshire)

1. What is the Welsh Government doing to promote Small Business Saturday in Montgomeryshire? OQ61946

Rebecca Evans (Labour, Gower)

Micro and small businesses represent 98.4 per cent of all businesses in Wales and are the lifeblood of our communities. The Welsh Government remains committed, as it always has been, to supporting micro and small businesses and will be actively promoting Small Business Saturday through the Business Wales digital channels.

Russell George (Conservative, Montgomeryshire)

Thank you for your answer, Cabinet Secretary, and, of course, it is really important that we all support our small and independent shops, particularly in the lead-up to Christmas as well, and I’ll be doing all that I can to encourage people to consider shopping local in the lead-up to Christmas. Now, I have actively been visiting shops across my constituency—those small independent shops in Newtown, Welshpool, Llanfyllin. Llanidloes—I’m going to visit shops there on Friday. Last Saturday, I visited shops in Machynlleth and what one shopkeeper was telling me was that they feel the squeeze at the moment in all directions. One, particularly, is that there is concern and anxiety from some businesses that employ a small number of people about the rise in employers' national insurance contributions, and the other squeeze for them is around business rates and the less attractive offer than has been there in previous years. So, Cabinet Secretary, as I continue to visit small businesses in my own constituency, what positive information can you provide me with that I can pass on to those businesses to encourage them as they think about their businesses going into the future?

Rebecca Evans (Labour, Gower)

Well, I'm very grateful for the question and for the opportunity to highlight Small Business Saturday and encourage all colleagues to celebrate it, as I know that you have been—I've been following your social media adventures and your early start on your Christmas shopping in Newtown as well. So, absolutely, I hope that all colleagues follow your sterling example in that space.

There have been difficult trading conditions for small businesses in recent times with the cost of living and, of course, the impact of inflation. But in specific reference to the national insurance contributions, the UK Government analysis showed that, as a result of all of the measures in the budget, 865,000 UK businesses will pay no national insurance contributions at all and more than half of all employers' national insurance contribution liabilities will see either no change or will actually gain overall next year. So, I do think that that has been lost in the debate that's been had in relation to national insurance contribution.

For our part, though, we're very much focused on using the levers that we have to support small businesses and microbusinesses here in Wales. Obviously, I would highlight the Development Bank for Wales and the great work that is going on there, particularly so through the micro-loans fund, which is supporting over 280 different businesses a year with over £8 million of micro-loan finance, and that’s between £1,000 and £50,000.

And, of course, the work of Business Wales as well, I think, is instrumental. We know that businesses, when they start up, if they go to Business Wales and seek support, they are twice as likely to still be trading five years later, and I think that really speaks to the value of the Business Wales offer that we have here in Wales. So, if businesses are perhaps struggling at the moment or just thinking about how they can expand and grow, then absolutely I would encourage them to speak to a Business Wales adviser.

Peredur Owen Griffiths (Plaid Cymru, South Wales East)

2. What assessment has the Cabinet Secretary made of the impact on social enterprises of the increase in employer national insurance contributions? OQ61944

Rebecca Evans (Labour, Gower)

Welsh Government officials regularly discuss a range of matters with the social enterprise sector. Our Social Business Wales service is on hand to provide specialist support to offer information, guidance and support to social enterprises across Wales.

Peredur Owen Griffiths (Plaid Cymru, South Wales East)

Thank you very much for that response.

Peredur Owen Griffiths (Plaid Cymru, South Wales East)

The ramifications of last month's Labour UK Government budget are dawning on many sectors that have been earmarked to make up budgetary shortfalls. Plaid Cymru have contended from the outset that the wrong choices have been made. The hit on social enterprises through the national insurance rise is one such area. The head of policy at Social Enterprise UK said that there are increased risks in placing a greater burden on social enterprises that deliver vital public services and create employment opportunities, often for those furthest from the Labour market. One social enterprise in my region, which employs nine people in a deprived area, has to find an extra £7,000 per annum due to the increase in NI. That's before any pay rises and with heating costs trebled. As a senior member of staff said, 'Because there is no slack left, this can only be met by a reduction in services'. Cabinet Secretary, do you share my concerns about what your Westminster colleagues have done to social enterprises? Are you lobbying your party colleagues for some leeway for those social enterprises? And, finally, what mitigation has your Government considered putting in place to ease the burden on our social enterprises, many of whom carry out essential front-line services?

Rebecca Evans (Labour, Gower)

Again, I'm grateful for the question. It's been said before, of course, that the Chancellor faced a really difficult set of circumstances when she came into post and had to develop her first budget, and will have made decisions that she certainly wouldn't have wanted to, or even expected to have to take. But, in doing so, she has been able to balance the books and put the country on a firm and steady footing, which was the intention. And there were difficult choices made along that road, I know.

So, for our part, the Welsh Government is exploring how we can best use the levers that we have. So, I've already mentioned some of the support that is available through Business Wales. That, of course, will also be available through Social Business Wales to social enterprises. I did have the pleasure of visiting Thrive in Port Talbot last week, to celebrate Social Enterprise Day, which is an incredible social enterprise. They deliver high-quality commercial cleaning and catering services to businesses and organisations. But the special thing about that is that all of the money that is raised is reinvested in targeting violence against women and supporting people who have survived those awful circumstances. So, that's just one example of the great work that is going on, and, as I say, we're using our levers. So, we are investing £1.7 million a year until next year in the social enterprise sector, to provide specialist business advice to support the 'Transforming Wales through social enterprise' vision, and that is about putting social enterprises at the heart of a fairer, more sustainable and more prosperous Wales. At that visit, I did have the opportunity to talk to Cwmpas and Social Business Wales about how businesses can best address the challenges that they're facing, particularly in regard to national insurance contributions. As a first step, I would encourage those businesses in that sector to engage with Social Business Wales and seek out their advice and support.

Natasha Asghar (Conservative, South Wales East)

Cabinet Secretary, Labour's decision to drastically hike national insurance contributions in the recent budget has caused a lot of anxiety and concern in the hospitality industry, a sector that has already been under immense pressure before this move. I've spoken to many businesses in my region of south-east Wales about the impact this decision will have on them, and, believe me, Cabinet Secretary, it's not a pretty picture at all. One particular business I've spoken to revealed that additional net costs will be more than £180,000 in 2025-26. Businesses here in Wales have already been punished, with the highest business rates in Great Britain, and Labour's greatest budget is quite frankly an absolute betrayal. Labour Ministers here, as we know, slashed rate relief, from 75 per cent to a mere 40 per cent for retail and hospitality businesses, and, as we saw recently, the UK Labour Government followed suit and dropped rate relief to 40 per cent. Well, I guess we can now also add business owners onto the ever-growing list of people that are on Labour's hitlist, alongside pensioners and farmers. So, Cabinet Secretary, with extra funding making its way to the Welsh Government's coffers, will this Government commit to reinstating relief to 75 per cent, to sincerely support this important sector at this very difficult time? Thank you.

Rebecca Evans (Labour, Gower)

I think the inflammatory language used in that question was completely unnecessary; I think it is possible to make important points in different ways. I will also just add that, of course, this question is about social enterprises, and, whilst the question that was raised by you was about hospitality businesses, I will nonetheless address the point in relation to non-domestic rates. The Welsh Government has a long history of providing significant support to the retail, hospitality and leisure sectors through our non-domestic rates relief support. We're providing over £130 million this year in support, and that is, of course, in addition to the £250 million that we provide annually. So, this year alone, over £0.3 billion is going to support those businesses, and that is a really significant investment. Colleagues will be aware that the temporary rate relief support provided to the retail, hospitality and leisure sectors was just that—it was temporary. It was in relation to the specific circumstances caused by the COVID pandemic, and then, of course, as we moved into the cost-of-living crisis, we decided to keep some of that support. But, overall, we've provided almost £1 billion of support through those rate relief schemes since 2020-21, and that is really significant support for the sector. And, of course, it's alongside all of the other support I've referred to, which Business Wales is there to offer businesses, alongside, of course, the development bank.

Elin Jones (Plaid Cymru, Ceredigion)

Questions now from the party spokespeople. The Welsh Conservative spokesperson, Samuel Kurtz.

Samuel Kurtz (Conservative, Carmarthen West and South Pembrokeshire)

Diolch, Llywydd. Cabinet Secretary, Deutsche Bank has estimated that 100,000 jobs could be lost due to Labour’s budget. Has the Welsh Government conducted any assessment of how many of those jobs will be lost in Wales?

Rebecca Evans (Labour, Gower)

The Welsh Government is completely understanding of the fact that the Chancellor faced, as I said, a really, really difficult set of circumstances when she was going about setting her budget, and she made choices that she wouldn’t have had to do. But I think that we all know that the response that the Chancellor was making was to the huge challenge of the dreadful situation that was left to her by the previous UK Government. I’m hearing mutterings from the Conservative benches that it wasn’t a dreadful—[Interruption.]—

Elin Jones (Plaid Cymru, Ceredigion)

Can you allow the Cabinet Secretary to respond, please?

Rebecca Evans (Labour, Gower)

I’m hearing suggestions that it wasn’t a dreadful set of circumstances that the Chancellor was presented with. Well, of course it was. We know that there were millions and billions of pounds of uncosted announcements that had been made by the UK Government. Some of them related specifically to us here in Wales, when you look at Tata, when you look at the investments zones—all announcements, but none of them funded. So, I think that we have to look very carefully at the budget and understand that difficult choices had to be made.

Samuel Kurtz (Conservative, Carmarthen West and South Pembrokeshire)

Thank you. I take it from that that no analysis has been made on the economic fortunes of Wales following that budget. And let’s remind ourselves of what the UK Labour Government did inherit. It inherited the fastest growing economy in the G7, inflation at 2 per cent—an economy that created, over the last 14 years, 800 jobs a day. And the Federation of Small Businesses Wales recently stated that the UK Government’s budget leaned heavily on smaller businesses, the very businesses that will be relied upon to return the UK and Welsh economies to more sustainable growth. And why have they said this? Because, from April 2025, employer national insurance contributions will rise from 13.8 per cent to 15 per cent, adding an estimated £24.5 billion to the costs faced by businesses annually. On top of that, threshold reductions mean small businesses will have to pay national insurance contributions on employee earnings starting at £5,000, down from £9,100, further increasing the strain on employment costs. The FSB also rightly highlight that small and medium-sized businesses are the lifeblood of the Welsh economy, accounting for 99.3 per cent of the business population, 62.3 per cent of private sector employment, and 43.4 per cent of turnover. These businesses—our small restaurants, manufacturers, retailers and service providers—create jobs and spread prosperity across Wales. So, in light of this, Cabinet Secretary, with inflation rising, the energy price cap increasing and national insurance contributions set to go up, how is the Welsh Government supporting these vital businesses to weather these escalating pressures?

Rebecca Evans (Labour, Gower)

So, of course, this is from the party that literally crashed the economy, but the Welsh Government, of course, is working hard to support businesses in the ways that we can, with the levers that we have. And I think it’s also worth reflecting on the fact that, as I mentioned earlier, around 53 per cent of employers will be better or, at least, no worse off following the changes to employer national insurance contributions. As part of the package of changes to those employer national insurance contributions introduced by the Chancellor, the employment allowance, which is the amount available to businesses in which employer NI is not payable, was increased by £5,000. So, that’s equivalent to a 90 per cent increase. And that change means employers will now get a £10,500 discount on their NICs bill, and that’s a change that particularly, actually, benefits small businesses. So, in a statement, the Secretary of State for Wales was really clear that this allows Welsh firms to employ four national living wage workers full-time without paying employer national insurance on their wages, and we know that many of our small businesses and microbusinesses are in that space in terms of staff numbers.

Samuel Kurtz (Conservative, Carmarthen West and South Pembrokeshire)

Well, I’ll come back to the point that we had from the first question, Cabinet Secretary, which is that there’s been no analysis of how many jobs—those 100,000 jobs—that Deutsche Bank highlighted will be lost in Wales. So, what the Secretary of State for Wales is saying there is disingenuous to say that least.

But, later today, we will be debating Small Business Saturday, and it was pleasing to hear Russell George raise that previously, and your support for this as well, Cabinet Secretary. It is a valuable opportunity to celebrate the crucial role small businesses play not just in our economy, but, as you said rightly in your answer, Cabinet Secretary, in our communities as well. When you buy from a small, local business, you’re supporting a family, not distant shareholders. As finance Minister, you chose to cut business rates relief to retail from 75 per cent to 40 per cent. And, yes, I heard in your answer that this was a temporary measure, but we Conservatives were chastised for a temporary measure coming to an end in England. So, will you be listening to our calls to revert that back to 75 per cent, or at least listening to the calls of the FSB on maintaining it at 40 per cent? With less than a month to go until Christmas, Cabinet Secretary, will you give Welsh businesses some much needed festive cheer, because after 25 years of Labour’s policies here in Wales, goodness knows, they deserve it?

Rebecca Evans (Labour, Gower)

Well, Llywydd, there’s less than a month to wait for the Welsh Government’s budget, and that will be published on 10 December. Of course, I wouldn’t be in any position to make any announcements in advance of that.

Elin Jones (Plaid Cymru, Ceredigion)

Questions now from the Plaid Cymru spokesperson, Luke Fletcher.

Luke Fletcher (Plaid Cymru, South Wales West)

Diolch, Llywydd. Let’s focus on Great British Energy and its implications for Wales. GB Energy is poised to invest £8.3 billion over the next five years with a clear mandate to develop, own and operate clean energy assets. However, there remains a significant lack of clarity about how its promises to reduce consumer bills will be fulfilled, especially in the absence of meaningful market reform or efforts to address the inequities of standing charges.

The Great British Energy Bill was introduced to the House of Commons on 25 July and is subject to the legislative consent process, yet we still lack crucial details about how this Bill will impact Wales. So, what specific concerns does the Government have about GB Energy’s operations and its potential material impact, because we’re left with little understanding of the practical implications? So, how are these uncertainties shaping the Government’s recommendations to the Senedd?

Rebecca Evans (Labour, Gower)

As Luke Fletcher says, the Great British Energy Bill was introduced to the House of Commons by the UK Government in July of this year. Essentially, the Bill itself only seeks to go about establishing Great British Energy as a publicly owned company. There will be much further work to do in terms of the operation of that, and we’re having those early discussions with the UK Government. I’ve had the opportunity on a couple of occasions to talk to Minister Michael Shanks about the synergy that there already is in terms of Trydan Gwyrdd Cymru, and the work that we can do together to ensure that we fast-track some of the opportunities that we have in Wales.

In terms of the Bill itself, we’re still, as I say and as I gave evidence to committee on, in the process of considering our position in relation to legislative consent. Those issues are still in discussion in relation to the points about consulting versus consent and so on. But I’ll just reassure colleagues that we are still continuing to have those discussions, and as soon as I’m in a position to be able to provide a clearer answer to colleagues in terms of the Welsh Government’s recommendation in relation to legislative consent, I’ll be keen to do that as soon as I can.

Luke Fletcher (Plaid Cymru, South Wales West)

Of course, the primary concern here is that we might be asked to consent to the establishment of GB Energy without actually knowing what it’s going to achieve or how it will interact with Welsh Government organisations already operating in the energy sector. Of course, one of the primary motivations of Welsh Government policy around energy production is the community value and the community benefit of it.

To be fair, the chairman of Great British Energy stated at the Confederation of British Industry's annual conference on Monday that new clean-power projects must 'show benefit' to local groups and 'take communities with us' during the green energy transition. Unfortunately, phrases like these have become increasingly hollow, because we know, and crucially our communities know, that the financial benefits of this transition often bypass the communities closet to the generating assets, flowing instead to investors far removed from these areas. No amount of community washing can obscure this reality. Ownership matters.

The founding statement for GB Energy gives it a role in funding the local power plan, again there is no detail yet, but the stated aim is to roll out small and medium-scale renewable energy projects. So, with this in mind, I’m thinking specifically about the role and remit of Ynni Cymru, can the Cabinet Secretary provide an update on any discussions between Welsh Government officials and their counterparts in the Department for Energy Security and Net Zero? Has any consideration been given to how this interplay will be managed in practice, because we really need to get this detail right now?

Rebecca Evans (Labour, Gower)

So, again, very grateful for these important points. Just to reassure colleagues, our Welsh Government officials are in constant discussion with their counterparts in the UK Government in relation to specifically that point about the interplay between Trydan Gwyrdd Cymru and Great British Energy. I think we do have to understand the position of the UK Government at this point. The Bill itself, as I said, goes about setting up Great British Energy as a publicly owned company, but there's an awful lot of work to do in relation to how that is operationalised, so those are part of the discussions. And UK Government is learning from us, because with Trydan Gwyrdd Cymru, we're several years ahead now of where the UK Government is currently, so they're very much learning from us.

And something that's absolutely critical to our approach is around community benefits and it's showing how we can do community benefits differently in Wales, how you can absolutely provide a template, really, for how community benefits should be done, and that is our intention through Trydan Gwyrdd Cymru. And, of course, we've got ambitions around community ownership as well, and we're continuing to support those kinds of projects. And I'd highlight Ynni Cymru as an opportunity to develop more, because, of course, we've got our £10 million investment in that as well. So, the UK Government is following us, in many ways, on this journey, because we have been working in this space for such a long time.

Luke Fletcher (Plaid Cymru, South Wales West)

The original point still stands, though, doesn't it? We'll potentially be in a position where we are consenting to the establishment of something when we don't know exactly what that thing is going to do. That sets, potentially, a dangerous precedent for this place agreeing to things before we have the full detail. If UK Government is operating within Welsh Government areas of operation already, that's quite a serious issue. If this had been the previous Government, I think the Welsh Government position would have been very different. The reason why this is important, the reason why we need to get this right now is clear for us all to see. Yet again, our constituents have received the news that the energy price cap will go up, with energy prices expected to stay high for the foreseeable future. Now, if we truly are committed to the concept of a just transition, community energy must be at its heart.

The lack of detail on GB Energy and the lack of action by Ynni Cymru has done little to address these issues around energy so far, and I fear once GB Energy is actually up and running, Ynni Cymru will be sidelined. Given, already, the lack of Welsh capital ownership in Welsh renewables developments, with the ownership of projects largely belonging to European state-owned companies and multinationals, GB Energy's success will perversely depend on partnerships with these nations whilst overlooking the needs of Wales—the very nation from which a considerable proportion of the wealth will likely be derived. So, how does the Cabinet Secretary propose that we address this issue that underlines all of the issues that we see in the Welsh economy—that of ownership?

Rebecca Evans (Labour, Gower)

I think the most important thing to set out here is that there's been absolutely no change whatsoever in this Welsh Government's position in relation to the constitutional impacts and implications of legislation flowing from the UK Government, regardless of the colour of the UK Government. Because we know that the legislation will be there beyond this Government and beyond future UK Governments of whatever colour, so the legislation has to be right for Wales and it has to respect Wales. It has to respect the Welsh Government and the Senedd and devolution, and we've been absolutely clear about that at every step of the journey.

Great British Energy isn't operating yet; it won't be up and operating for some time yet, we've still got the legislation to set it up. So, nothing's happening on the ground in Wales in relation to Great British Energy at the moment, but I think it's really positive that we're having those discussions in relation to the opportunities here in Wales. We've been able to set out how far we've come on the road in relation to Trydan Gwyrdd Cymru, the number of projects that we've identified, the sites that we've identified and the progress that we can make quickly with the UK Government. I see this as very much a partnership operation. UK Government understands Trydan Gwyrdd Cymru and the important work that that's doing. I think Ynni Cymru sits in a different space, so both Great British Energy and Trydan Gwyrdd Cymru are looking at those larger scale projects, but Ynni Cymru is very much more about community-type projects that make a difference at that very, very local level.

Paul Davies (Conservative, Preseli Pembrokeshire)

3. What is the Welsh Government doing to support the tourism industry in Preseli Pembrokeshire? OQ61916

Rebecca Evans (Labour, Gower)

The tourism industry in Preseli is supported through Visit Wales's marketing and promotional activities. Cruise Wales works with the travel trade to promote Fishguard and Milford Haven ports for cruise calls. Other support provided includes grading activities, developing skills across the industry, and a capital investment programme.

Paul Davies (Conservative, Preseli Pembrokeshire)

Cabinet Secretary, one way of supporting the tourism industry in my constituency is to once again look at the 182-day threshold on holiday lets. I've received many e-mails in the last few weeks from self-catering businesses in my constituency, who tell me that this policy is ruinous for a small business. They make the point that no other business sector in the UK has such an onerous target to achieve to qualify as a business for local taxation purposes. This year has been particularly difficult for the tourism sector, as the weather has been an enormous factor, as has the cost-of-living crisis and increased running costs. Achieving the 182-day threshold is getting more impossible each day for many of the businesses that I represent. So, Cabinet Secretary, will you now support the industry’s call for an economic impact assessment and a formal review of the 182-day policy, conducted with representatives from the visitor economy, to establish a much fairer threshold?

Rebecca Evans (Labour, Gower)

Well, I'm afraid that we have got no plans to undertake a formal review of the changes to the self-catering criteria in the short term. We certainly wouldn’t want to undertake that kind of review in isolation from the package of measures within that three-pronged approach that we are taking to address the impact of second homes and holiday lets on communities and on the Welsh language. Our concern is that such a commitment to undertake that kind of review would create uncertainty for the self-catering sector, which is unlikely to be helpful at this time.

Of course, this matter sits now with the finance Minister, as he is responsible for local taxation. But, of course, I take a strong interest in the views of the visitor sector, and I had an opportunity to speak and listen to the visitor economy forum recently, and I heard very clearly the contributions that they were making.

Joyce Watson (Labour, Mid and West Wales)

The Welsh Labour Government's Brilliant Basics small-scale tourism fund has benefited a number of projects across Wales, including Grass Roots Caravan and Glamping in Waterston near Milford Haven. The business successfully received Development Bank of Wales funding of £205,000 via the Wales tourism investment fund to upgrade its facilities.

The Welsh Government has allocated £5 million to 27 projects over 2023 to 2025, helping local authorities and national parks get basic but essential visitor infrastructure, like public toilets, car parking and signage, to improve the visitor experience at tourism destinations. That will benefit both the visitor and also the local community. Do you agree with me, Cabinet Secretary, that this type of investment is helping, both with small businesses and also with tourism in Mid and West Wales?

Rebecca Evans (Labour, Gower)

Thank you very much for that. I’m sure that all of us would agree about the importance of supporting the Brilliant Basics scheme and the difference that it is making in communities by providing investment, as Joyce Watson says, in those small but simple things that really enhance the tourist and visitor experience, but can also benefit small businesses in our areas. We have had, recently, another round of applications open for that particular scheme, and I hope to say more very shortly in terms of the response that we have had. But I think that the level of interest is really positive.

Luke Fletcher (Plaid Cymru, South Wales West)

4. Will the Cabinet Secretary provide an update on the Government's work relating to a four-day work week? OQ61947

Jack Sargeant (Labour, Alyn and Deeside)

Diolch. Together with our social partners, we thoroughly examined the opportunities and challenges of a four-day working week. This effort resulted in a report that the workforce partnership council reviewed, approved and published.

Luke Fletcher (Plaid Cymru, South Wales West)

Thank you for that answer, Minister.

Luke Fletcher (Plaid Cymru, South Wales West)

Of course, the UK pilot carried out by an adept research team from a variety of institutions demonstrated last year that this has an overwhelmingly positive impact on workers and employers, and is something that could be tailored to a diverse range of organisations across many sectors. And of course, we have the current public sector pilot in Scotland.

Now, of course, he's mentioned the work of the workforce partnership council. It seems that things have gone quiet, though, since April. I think that there's a wider point to be made around the need to look at how we roll this out to front-line workers and so on—those on shift work—but is the Government still committed to getting a public sector pilot over the line? And, if so, what work has been done since April to make this happen? A number of organisations and a number of businesses that are very supportive of piloting a four-day work week are starting to worry that the Government has lost its commitment.

Jack Sargeant (Labour, Alyn and Deeside)

I'm grateful to Luke Fletcher for highlighting this important issue. The Member's right to point to the work of the workforce partnership council and the working group that was set up in response to a Senedd petition inquiry, which I had the pleasure of chairing. The Member sat on the committee and took part in that inquiry. Presiding Officer, I think I'd like to pay tribute on the record to the lead petitioner, Mark Hooper, who started that process and that inquiry that followed.

The Member is right to point to UK pilots where there have been successes. My view on the topic has not changed. The results from pilots across sectors, including the private sector, are very clear: where a shorter working week has been introduced in partnership with its workforce, the benefits are there to be seen. The Member points to the report that was published in March of this year. The report did not propose an immediate introduction of a four-day week in either the Welsh Government or devolved public services, but it did set out the core principles that employers and trade unions should consider if they were to consider trialling a shorter working week.

The responsibility for trialling a shorter working week or for the management of the organisation and their own workplaces is with the devolved public sector bodies themselves. I expect them to discharge those responsibilities in social partnership. So, when it comes to the next phase of that report, and the consideration of that report, it's for employers in the devolved public sector, workers and their trade unions to consider what that report means for them and their particular circumstances. If there was to be engagement in that, I'd be happy to help facilitate some of those conversations.

Peter Fox (Conservative, Monmouth)

As we know, the main issue of a four-day working week is that it would not be possible to roll it out across every sector, meaning that some public sector workers would attain a privilege that would not be enjoyed by most private sector workers, and even many other front-line public sector workers. Whilst I know there are calls for a four-day working week, my position, and that of my group, is that we believe the same benefits of a four-day working week can be obtained by simply improving the flexibility for workers to take time off, to balance family life and other commitments.

There are two ways of achieving a four-day working week. You can either condense five days of work and its outcomes into four days, resulting in longer working hours, or you can pay an employee their existing salary for fewer hours of work, which could, in effect, be seen as awarding them a 20 per cent pay rise. We know it is not the UK Labour Government policy to support a general move to a four-day working week for five days' worth of pay. Can I therefore ask the Minister if the Welsh Government has considered the impact on all public services potentially working at different times of days, should the four-day working week be introduced here?

Jack Sargeant (Labour, Alyn and Deeside)

I thank the Member for those comments. I agree with the Member on the approach to flexible working in general—not just the four-day working week being the solution to the problems in there, but very much could be a solution to the problems. This is about a suite of options that could be available for employers and employees. The important part of this is that it's not imposed on the workforce, it's done with the workforce, very much in the Welsh way of social partnership. I've always been very clear, Presiding Officer, that, where you can bring forward these types of proposals in the workplace, the benefits are there to be seen.

The Member pointed to perhaps the public sector having a privilege over the private sector. Well, the private sector are very much leading the way on this issue. So, if the Member's trying to say in the Chamber that those business leaders are wrong, I'd ask him to reflect on those points. But I've always been very, perhaps, surprised in some ways, but maybe not so much in others, that these are the same arguments used, Presiding Officer, not just by the Member, but more broadly by his group when these debates happen. They were the same arguments used for the weekend as we know it, they were the same arguments used for the introduction of the minimum wage, they were the same arguments used against the creation of the NHS. The logic of these arguments would be the same arguments used to still send children down the mines and be okay with that. This is a potential solution to some of the challenges that workers face. It should be done in the way of social partnership. This Senedd and the Welsh Government should support that approach.

Llyr Gruffydd (Plaid Cymru, North Wales)

5. Will the Cabinet Secretary provide an update on the progress of large-scale renewable energy projects in North Wales? OQ61952

Rebecca Evans (Labour, Gower)

We have set ambitious targets to generate enough renewable energy across Wales to meet the equivalent of 100 per cent of our annual electricity consumption by 2035. In doing so, we expect to see benefits to our communities, including through job creation and local investment.

Llyr Gruffydd (Plaid Cymru, North Wales)

As we know, Cabinet Secretary, it is critical, of course, that Wales reaches its net-zero targets, but we are in a scramble to harness some of Wales's renewable energy potential. We're increasingly seeing multinational companies often riding roughshod over local communities in pursuit of planning approval. We're all well aware of the two proposed large-scale solar farms on Anglesey, sites that will gobble up around 3,700 acres of farmland. The biggest of these developments, of course, won't be consented in Wales due to its size, and the decision on its future is going to be sanctioned in Whitehall. So, does the Cabinet Secretary agree with me that consent for all energy projects should be devolved to Wales, so that it's Wales that decides on the best use of our natural resources?

Rebecca Evans (Labour, Gower)

I'm very grateful for that point. Of course, that relates to the Maen Hir project, which the UK Government would be—currently, under the existing rules—due to make a determination on. I think the point raised is an important one, and actually, I think it's one that I would be happy to have some further discussion with my colleagues in Westminster on, because it is an important point that is made.

Janet Finch-Saunders (Conservative, Aberconwy)

Copper is critical to the manufacture of much of the green technology, such as wind turbines, electric vehicles, solar panels, and the electrical infrastructure. Copper is also essential to support the transition away from fossil fuels, and I've been round a mine in Anglesey recently that does gold, silver, bronze, iron ore and copper.

United Kingdom imports of copper were over £1.5 billion during 2023, although large reserves of iron and copper ore do exist in the United Kingdom. These ores are now largely imported, such as from Chile and China. As the Member for Aberconwy, I can speak at first-hand of how valuable the copper mines on the Great Orme have been for many years. It was the wealth from the mining of that copper that helped to form the town that stands there now.

Copper is still not on the UK critical minerals list, unlike in the EU and USA, despite there being such huge potential for mining it here in Wales. Will you co-operate with the UK Government to see copper placed on the UK critical minerals list, so that green infrastructure is developed in Wales with Welsh, not foreign, copper, so that we can rely less on such a heavy carbon footprint of importing such rare and precious metals? Diolch.

Rebecca Evans (Labour, Gower)

I'm grateful for the question. That sounds like a very interesting visit that Janet Finch-Saunders has had. I would welcome the opportunity, perhaps outside of the Chamber, to have a further discussion about what you learned on that particular visit, so that I can consider what, if any, further discussions I would have to have with colleagues. But I'm keen to learn—[Interruption.]—what you and Rhun ap Iorwerth learned on your visit.

Altaf Hussain (Conservative, South Wales West)

6. How does the Welsh Government support the life sciences sector in South Wales West? OQ61945

Rebecca Evans (Labour, Gower)

We support the life sciences sector in Wales in a number of ways, including through our SMART flexible innovation support programme, the financial support we provide to the Life Sciences Hub Wales, and our support for trade events, both in Wales and internationally.

Altaf Hussain (Conservative, South Wales West)

Thank you, Cabinet Secretary. I recently had the opportunity to visit the CanSense laboratory at Swansea University to see first-hand the excellent work being undertaken in the life sciences sector in my region. While the prospects for the economy of my region coming out of CanSense and the wider life sciences sector are fantastic, the scientific advancements are immeasurable. CanSense are developing inexpensive blood tests that can diagnose bowel cancer much sooner than current tests, therefore tackling one of the biggest killers in Wales, while at the same time reducing the burden on the NHS, both of which have wider economic costs beyond the human costs. Similar labs are also developing simple blood tests for the early diagnosis of Alzheimer's. Cabinet Secretary, what discussions have you had with the Cabinet Secretary for health about further investment in laboratories like CanSense to maximise the benefits to the health and economy of our nation?

Rebecca Evans (Labour, Gower)

I'm very grateful for that question this afternoon. It builds on the debate that Mike Hedges led in the Senedd very recently, which included a really strong focus on the life sciences industry and how it's scaling at pace. It's one of our most exciting and dynamic growth sectors in Wales, turning over more than £2.85 billion a year. We're very supportive of businesses in this sector and of innovation in this sector. You asked how I'm working alongside Jeremy Miles. Our departments co-fund the Life Sciences Hub Wales and this year we awarded annual funding of £3.5 million, so partly from the economy budget and partly from the health budget. That enabled the hub to work towards its mission of transforming the health and economic well-being of the nation. I know Jeremy visited just last week to find out more.

I'm really keen to understand how we break down the barriers for adopting the innovation that's happening in Wales and making sure that it's available to the NHS as quickly as possible. I know that Jeremy Miles is very interested in that as well. I did have the opportunity to visit Medica, which is one of the world's largest trade fairs for the medtech sector, just recently. We took 33 different businesses from Wales over there, alongside 50 other delegates. We were able to showcase the incredible innovative work that is going on here in Wales and give those businesses a platform to be able to sell and export. We also have an export cluster programme that looks particularly at the medtech and diagnostic sector as well. So, this is a really exciting area. It's a growth area and I really welcome the interest that colleagues show in it.

Mike Hedges (Labour, Swansea East)

For the second time this week, I'm asking a question on the importance of life science. The Swansea bay city deal has formed key relationships with companies in the health and well-being sector ready for procurement. Led by Swansea University, the project has also utilised funding opportunities available for a skills and talent pilot project and been awarded £1.5 million from the digital infrastructure programme's 5G innovation fund. The project will deliver research and development, trials and testing facilities, enabling co-location of research and industry alongside clinical infrastructure and investment opportunities. Can the Minister give a further update on the £22.4 million bioscience grant for a training programme involving Swansea University?

Rebecca Evans (Labour, Gower)

I'm very grateful for the question and for Mike Hedges's passion for the life sciences sector, having, as I mentioned earlier, brought forward a debate that focused really strongly on the promotion of that sector. Just on the doorstep for Mike and myself in Swansea we have some incredible work going on, harnessing the unique capabilities and the thriving life science ecosystem that is part of the Swansea bay city region. They're establishing an international centre for innovation in life science, well-being and sport, supporting preventative interventions in healthcare and medicine, and driving the growth of a globally significant sportstech industry as well. Those are just part of the work that is going on through the funding that we've been able to provide.

As Mike says, it will deliver R&D, trials and testing facilities, enabling the co-location of research and industry alongside clinical infrastructure and investment opportunities. Having that approach where you've got a range of businesses and academics working in the same field together I think is really important, because those ideas spark off each other. The networks that are involved are also there to collaborate as well. So, it's a really exciting sector and a lot of this is happening just on Mike's doorstep and mine in Swansea.

Rhun ap Iorwerth (Plaid Cymru, Ynys Môn)

7. What is the Welsh Government's assessment of the impact that extending the Menai Bridge repair programme will have on businesses in Anglesey? OQ61951

Rebecca Evans (Labour, Gower)

The duration of the physical works has not altered. Through listening to the local community, we've rescheduled the start date, which brings a number of benefits. I'd encourage any business facing uncertainties due to the repair programme to contact Business Wales for advice as soon as possible.

Rhun ap Iorwerth (Plaid Cymru, Ynys Môn)

Thank you for that response. There is great disquiet on Anglesey in terms of this change of timetable. When the work was paused over this winter, people assumed that that meant that things were ahead of schedule. Then, of course, there was an announcement that the work that was supposed to be concluded by the end of next summer will continue until Christmas. Now, that's not just inconvenient, it has an economic impact on communities on the island and on the island as a whole.

So, what will the Cabinet Secretary do to look at how to provide more support for businesses that will now miss out in the period leading up to Christmas 2025, when they assumed that things would be back to normal, and to look at the situation around the Britannia bridge? Because the sluggishness in the Welsh Government's response to the need for a solution to the traffic problems on the Britannia bridge and the resilience problems on that bridge is having an economic impact on the island. What will the Cabinet Secretary for the economy do to put pressure on the Cabinet Secretary for transport to sort this problem out once and for all?

Rebecca Evans (Labour, Gower)

Well, as I understand it, from the transport Secretary and his officials, the change in timing and rescheduling the start date to March 2025 was at the request of the local community—

Rhun ap Iorwerth (Plaid Cymru, Ynys Môn)

No, not true.

Rebecca Evans (Labour, Gower)

—including local businesses. A number of benefits were suggested that it would bring to local businesses, for example less chance of cancellations and delay due to bad weather, risk of HGVs and other vehicles not being able to cross the Menai strait during the winter, improved traffic flow to and from Menai Bridge, which would assist schools and Bangor hospital, and ensuring that Holyhead port remains operational for longer. So, these are the arguments that I understood have been made to the transport Secretary and his officials, and part of that, of course, is because of the winter weather. But I know the bridge is nearing its two-hundredth anniversary and, obviously, we need to maintain the bridge, and want to see those works finished by the time of its two-hundredth anniversary. But obviously I will have those discussions with the transport Secretary in relation to the impacts on businesses, but my understanding is that the changes were made at the request of the community.

Rhys ab Owen (Plaid Cymru, South Wales Central)

8. How will the Welsh Government utilise the Development Bank of Wales to encourage growth and investment in creative industries, particularly those who operate on longer project timelines? OQ61934

Jack Sargeant (Labour, Alyn and Deeside)

Diolch, Rhys. As we saw from the statistics released last week, the growth of the creative industries in Wales continues to be a success story. Through Creative Wales and the Development Bank of Wales, we offer a range of financial support schemes, which are continually reviewed in light of market demands.

Rhys ab Owen (Plaid Cymru, South Wales Central)

Diolch, Weinidog. You'll remember last week Mike Hedges telling us about the incredible contribution of video-gaming to the Welsh economy. Now, I looked into this after that, and I saw that, following the loss of EU funding, longer term projects, such as video games, end up being funded only in part now, meaning there are far more potential moments of failure. The majority of video game companies in Wales fail now within the first five years of trading. The Federation of Small Businesses recently recommended that the Welsh Government explore the use of Government loan guarantees, following the example of places such as South Korea, a country that has been very successful in exporting film, tv and music, in their language, worldwide. The creative industries there represent more than 10 per cent of the total venture capital raised. Will the Minister encourage Creative Wales and the Development Bank of Wales to follow the example of successful funding models across the world, so that Wales can reach its creative potential? Diolch yn fawr.

Jack Sargeant (Labour, Alyn and Deeside)

Well, diolch yn fawr, Rhys, for your continued interest in the creative industries. You are a true champion for the sector in all of its ambitions. The Member points to video-gaming and the work of Mike Hedges—well, I'm grateful for the opportunity to be able to speak to that. So, we do, through Creative Wales, go on to support the video games industry. Rocket Science, again, just down the road from here, is one example of that. But the particular ask of the Member around the development bank and the work that they may do in the future—I'm very interested in what they may be able to offer in the future. It's a conversation that I will pick up with colleagues from Creative Wales. This is a real area that has great potential for growth and an ambition that matches that from the industry itself, so I will pick up that conversation with colleagues in Creative Wales and the Development Bank.

It's a conversation that I would also like to have with the UK Government, who have also recognised creative industries in their industrial strategy. I think gaming plays a key part of that. The games fund, which I'll make sure the Member has the detail of, is available to companies already, but where we can further support this industry, perhaps through the development bank—. There is a pilot programme now that looks at supporting cash flow in the production industry, particularly around films. That might be something we could explore in the games industry as well. So, the outcome of that pilot will be important, but where we can further enhance our offer in this sector, I'd be very keen to look at those opportunities. Diolch.

Elin Jones (Plaid Cymru, Ceredigion)

I thank the Minister and the Cabinet Secretary.

2. Questions to the Cabinet Secretary for Health and Social Care

Elin Jones (Plaid Cymru, Ceredigion)

The next item will be the questions to the Cabinet Secretary for Health and Social Care. The first question is from Mick Antoniw.

Mick Antoniw (Labour, Pontypridd)

1. Will the Cabinet Secretary make a statement on the proposed regional treatment hub in Llantrisant? OQ61921

Jeremy Miles (Labour, Neath)

Plans for the regional treatment hub are progressing. The hub will improve care and deliver accessible and safe services to thousands of patients annually across south-east Wales. A temporary diagnostic service has been delivered from the site since April 2024, which has had a significant impact on waiting times.

Mick Antoniw (Labour, Pontypridd)

Cabinet Secretary, thank you for the answer. There's quite a lot of excitement about this innovative proposal to streamline the operations on knee and hip surgery and other orthopaedic surgery at the former British Airways avionics site, which closed some time back. But I'm just wondering what is it that can be done to actually speed up the development of this? It's obviously very much required, very much awaited, a very, very important potential investment. Can you outline what engagement you've had with Cwm Taf health board, what further stages are necessary, either in the design and also in terms of the investment side to implement this, and can you basically outline anything that can be done in order to speed up and ensure that it opens as quickly as possible? It is very much awaited in the Tonyrefail area, in the Cwm Taf area and also more broadly in south Wales.

Jeremy Miles (Labour, Neath)

Well, I agree with the Member's enthusiasm for the project. I've been myself to the buildings that are currently there to see the vision that the partners, together with the Welsh Government, have for this development. It is a model of diagnostics and surgery that evidence both within the UK and internationally tell us can make a significant contribution to better outcomes by locating those facilities out of what's often regarded as the hot environment of an emergency hospital setting. So, in that sense, it's aimed at a transformation in regional planned care, and will clearly support the reduction in regional waiting lists.

I have been clear that this does need to be a regional solution that supports both the footprint of the health board itself but also neighbouring areas. That is absolutely critical to the success of the project, and I will want to take steps to make sure that that happens if they're needed.

The business case is currently being developed. The health board is, I know, looking at best practice across the NHS and developing a clear workforce plan to support the project. The next step is that the health board and its regional partners are due to give a presentation and take questions at the infrastructure investment board meeting in the next few days. This I hope will be demonstrating progress and will set out the proposed funding requirements for the next phase of the scheme. So, there's a piece of work in relation to design and construction, a piece of work in relation to modelling the funding implications of that, a piece of work in relation to the operating model that engages not just the health board, but neighbouring health boards as well. And then, finally, a workforce plan to support that development. I'm keen to see it progress. As well as being an exciting development on its own terms, I think it can be an exemplar for that way of working in other parts of the NHS in Wales.

Altaf Hussain (Conservative, South Wales West)

Thanks, Mick, for raising this issue. Cabinet Secretary, the regional hub could be a big boon to patients in my region who rely upon services at the Royal Glamorgan Hospital, even though there's a lack of clarity over what treatments will be provided at Llantrisant. According to the Royal College of Surgeons, part of the solution to addressing the huge waiting lists in Wales is in speeding up the development of surgical hubs, so surgery can go ahead during those periods when the NHS is under increasing pressure, which is now. Given the advantage afforded by segmented planned procedures, will the Cabinet Secretary ensure that the planned regional hub will not just be for diagnostics, but for surgical procedures as well? Because, at present, it's only diagnostics.

Jeremy Miles (Labour, Neath)

No, I can absolutely confirm to Altaf Hussain that the plan is both for diagnostics and surgical procedures, including orthopaedics, but other surgery as well, in that elective, green environment, and he'll know what I mean by that.

I just want to acknowledge the point that he's made about the Royal College of Surgeons. There's a very persuasive argument that they have made, in particular in relation to orthopaedics, but in other surgical contexts as well. I've had an opportunity, not just to read that work, but to discuss that with them, and I am actually speaking at their conference later on this week, and I hope that will be an opportunity to engage further with them on the vision they share with us in this kind of development.

Elin Jones (Plaid Cymru, Ceredigion)

Question 2 [OQ61931] has been withdrawn. Question 3 is next—Mark Isherwood.

Mark Isherwood (Conservative, North Wales)

3. How does the Welsh Government support the social care sector? OQ61923

Dawn Bowden (Labour, Merthyr Tydfil and Rhymney)

In addition to the financial support that Welsh Government provide, our newly launched National Office for Care and Support offers a new approach to supporting the sector. Our focus on sustainable solutions aim to ensure ongoing delivery of high-quality services, whilst striking the balance between immediate and long-term needs across Wales.

Mark Isherwood (Conservative, North Wales)

Diolch. I recently visited a north Wales residential home with Care Forum Wales to discuss issues threatening the sector’s viability. In light of the UK autumn budget, these included the extra cost of national insurance contributions and the national living wage, and concern that, although the national framework for the commissioning of care and support in Wales code of practice, which came into force on 1 September this year, under the Social Services and Well-being (Wales) Act 2014, is intended to move current local authority commissioning practices away from price towards quality and social value, and ensure people have voice and control over their care and support, Denbighshire was making placements solely on the grounds of cost, stating that when it decides to meet a citizen’s eligible needs for care and support by arranging care home accommodation, it's obliged to source that accommodation at or as near to a rate it believes is sustainable and cost-effective, know as its indicative rate. What support and intervention will the Welsh Government therefore provide for the care sector in these areas?

Dawn Bowden (Labour, Merthyr Tydfil and Rhymney)

Can I first thank Mark Isherwood for that question? And, of course, we're fully aware of the incredible pressures that are on social care and the need for us to rebalance and reform the way that social care is provided, and that's why we have set up the national commissioning for care framework, and why we've set up the National Office for Care and Support, with a view to moving towards, in the longer term, a national care service, which will be free at the point of need.

The points that you raised are well made, however, and are things that we're seeing across the country, but there is a framework that is there to enable the provision of social care fees to be developed in partnership between the local authority and, where appropriate, the health service, and that is absolutely what the framework is set out to do. It is not about necessarily introducing consistent or the same fees across the country, but a consistency of approach to ensure that there is no postcode lottery around commissioning fees. And we've held a number of sessions with commissioners, right the way across Wales, providing them with support and a toolkit to enable them to work in the way that we know will deliver the best outcomes. We're identifying where we've got best practice and we're standardising commissioning of care and support, which I hope, in the longer term, will seek to alleviate the kinds of issues that you've raised today.

Elin Jones (Plaid Cymru, Ceredigion)

Questions now from the party spokespeople. The Conservative spokesperson, Sam Rowlands.

Sam Rowlands (Conservative, North Wales)

Diolch, Llywydd. Cabinet Secretary, you'll be aware that general practice is under immense pressure. More than 100 surgeries in Wales have closed since 2012, making it more difficult for people to access a GP in their local area. It's clear that GP practices are under even more pressure thanks to the Labour Government's increase on national insurance contributions, which is, as I'm sure you'd acknowledge, a tax increase on working people and businesses. Indeed, a GP in this place last night explained that that national insurance increase alone to his practice is going to cost an extra £50,000 a year to be able to meet. The BMA, the British Medical Association, have warned that this measure risks undermining the financial stability of general practices and the quality of patient care that they can provide. Do you agree with the BMA's assessment?

Jeremy Miles (Labour, Neath)

The Member puts the point to me as though he has no responsibility for the situation that we are in. The UK Labour Government has had to make very, very, very difficult choices to clean up the mess his Government left—an appalling state in the public finances: £22 billion of mess that his Government left. So, the UK Labour Government has had to make difficult choices in order to do that. None of us want to see those choices being the kinds of things that have had to be taken, but I'm afraid that there is an absolute responsibility on that side of this Chamber for the circumstances that Sam Rowlands sets out.

Decisions on national insurance contributions are, of course, as he acknowledged, made by the UK Government. I'm absolutely aware of concerns raised, directly to me by the BMA and others, in relation to the impact of national insurance contributions, both on primary care providers—GPs and others—and social care providers. We are monitoring the situation in discussion with them to understand in full the implications, and, equally, having discussions with the Treasury through officials in my friend the Cabinet Secretary for finance's department.

The UK Government has confirmed that the definition it will use for the support it will provide relates to public service employees only. We are not currently in a position to understand the full effects of that decision on the sectors, but we are in ongoing discussions.

Sam Rowlands (Conservative, North Wales)

Frankly, at this point, in response, Cabinet Secretary—25 years of Labour Government here in Wales, 25 years of responsibility for delivering health services, 25 years of ensuring that GP practices are able to function to the best of their ability—it seems that a lack of responsibility is being taken on your side of this Chamber here today.

It's pretty clear that many practices will be unable to afford the national insurance increases that have been chosen to be put in place by the Labour Government in Westminster. And they have acknowledged that they're going to reduce their staffing and services as a result. So, we've had over 100 GP surgeries close in the last 12 years. Capacity and delivery of services is going to be more difficult because of the Labour Government's choices. And of course, at the moment, you’re trying to put in place a new contract with GPs through the general medical services contract. Now I understand, from speaking to GPs, that they believe that the offer that you're making to them at the moment is wholly inadequate and shows disregard for the long-standing issues and pressures they continually raise with myself and Members across the Chamber, and the ballot they have on the offer at the moment is likely to be rejected. So, what is your plan to address a rejection vote of the contract offer that you have in place for GPs at the moment?

Jeremy Miles (Labour, Neath)

Well, I am disappointed that the general medical services contract negotiations this year have concluded without a resolution obviously, and equally disappointed that the General Practitioners Committee Wales have decided to ballot their members on the offer made. I want to see us in a position where hard-working staff in general practice are able to get their pay uplift as soon as possible, together with changes to the service that I think everyone recognises will have the effect of improving patient care, which is what we all want to see.

The offer that we have made to BMA Cymru—and I've met with them myself, as I indicated to the Member a moment ago—meets the pay review body recommendation for GPs as well as practice staff and builds on investment over several years. It is absolutely critical that we have high-quality primary care services that people can access close to home. It's a priority for this Government. I absolutely value the work that GPs and their teams do in providing these essential services, and I expect that we'll have an opportunity to continue those discussions with GPs over the coming weeks.

Sam Rowlands (Conservative, North Wales)

Of course, Cabinet Secretary, you acknowledged there the value that GP practices have in our communities in supporting people up and down Wales, but that value needs to be followed by an offer that is adequate to meet the demand at their doors. You've mentioned that the offer made at the moment is in line with what was expected in the past, but you know, clearly, that what's on the table is not adequate to meet the demands that they're facing. So, are you confirming today that you will return to the table with an adequate offer that acknowledges the calls made by the BMA's Save our Surgeries campaign and respects and truly values the contribution that GPs make in our communities and to the NHS here in Wales?

Jeremy Miles (Labour, Neath)

Well, I'm sure both GPs and certainly I don't regard negotiating through the Member in the Chamber as the most effective way of addressing what are difficult circumstances; both parties would acknowledge that. All I will say is that we have had good and constructive discussions with general practitioners, in a challenging context. As I say, I'm disappointed that the step has been taken as it has, but I hope there'll be an opportunity to continue those discussions. And, as I say, I want to see staff in general practice get their pay uplift as soon as possible.

Elin Jones (Plaid Cymru, Ceredigion)

Plaid Cymru spokesperson, Mabon ap Gwynfor.

Mabon ap Gwynfor (Plaid Cymru, Dwyfor Meirionnydd)

Thank you very much, Llywydd. Well, Cabinet Secretary, I had the privilege of attending the European Cancer Organisation’s cancer summit last week, and it was striking how advanced a number of our European neighbours are when it comes to diagnosis, treatment and living well with cancer. The quality statement for cancer from this Government is ambitious, emphasising early diagnosis, referral to treatment, and ensuring that workforce planning is aligned with future demands and a patient-centred approach. But as the NHS’s most recent performance statistics show that almost half of cancer patients in Wales do not receive the treatment that they require within the designated time frame, and with survival rates for conditions such as liver, pancreatic, stomach and other cancers among the worst in the developed world, when will we reach a point where the rhetoric and expectations correspond to results?

Jeremy Miles (Labour, Neath)

Well, cancer services are of course a priority of Government. We were disappointed with the performance figures published last week. We saw a small reduction in performance across the system as whole. The picture varies from place to place and depending on the type of cancer we're dealing with. Last week, for example, I was at a breast cancer centre, which had brought services together and was delivering the aim of around 79 per cent of people being seen within 62 days. So, there are some successful examples in the system too, and what we want to see, of course, is that being rolled out more broadly across the system. I would say that, for several of the cancers that the Member mentioned in his question, there are very exciting technological developments happening internationally, including here in Wales, including with the use of AI too, and we're looking at how we can use those developments to ensure that more people get that important treatment as soon as possible.

Mabon ap Gwynfor (Plaid Cymru, Dwyfor Meirionnydd)

Thank you for that response, Cabinet Secretary. You mentioned these exciting technological developments. Of course, one of the most striking aspects of the summit that I attended was how far ahead a number of these countries are when it comes to technological developments such as digitising healthcare. Finland, for example, has been digitising data on cancer patients since the 1970s, and there were similar accounts of major steps forward being taken in Slovenia and Estonia too. These countries have the same thing in common, namely their size. They are smaller nations, and we often hear how smaller nations have an advantage when it comes to implementing digital solutions in healthcare. However, it appears that Wales is an exception to this rule. Here, we have inconsistent paper records and dated analogue technology, such as faxes, being used, and the workforce regularly complains that data collection is not fit for purpose. So, can the Cabinet Secretary tell us why Wales has been unable to benefit from its status as a small nation and develop expertise in digitising healthcare? What are the barriers that are preventing this from happening, and does the Government, therefore, consider digitisation to be a priority?

Jeremy Miles (Labour, Neath)

Digitisation is a very important part of how we can evolve health services in order to take advantage of the latest technology, but also to secure services that are efficient and safe. So, it’s a priority of Government. We have a number of investment programmes in place in digitisation projects in all parts of the service and in all parts of Wales, and they often happen at a national level, but occasionally happen at a local level too. And Sarah Murphy, my fellow Minister, is responsible for this policy area.

I would also—. The Member makes an important point on taking advantage of our size as a nation in order to make progress in this area. I would suggest that he looks at what the genomics centre for Wales does in this area, very often working in cancer—working in lung cancer recently; some very innovative work has been happening there. And there’s a recently signed agreement with Illumina, which is an international biotech company, in order to do more groundbreaking work internationally, and that’s exactly the conversation we could have with them. They saw great benefits in working with Wales in genomics, because we have one system and we have a relatively small population.

So, there are benefits, and, where we do have a natural advantage, we have been successful, for example, in genomics, in moving and making very significant progress. There’s more to be done, and there are very real opportunities. But I think it's also fair to say that people are looking to Wales for exciting developments in that area.

Mabon ap Gwynfor (Plaid Cymru, Dwyfor Meirionnydd)

Well, reforming the digital and data infrastructure to improve outcomes for cancer patients is, of course, only a part of the solution. We need the workforce to match. The precariousness of the oncology workforce has long been a matter of concern in this respect. The shortfall in clinical oncologists is expected to rise to 28 per cent by 2028, with this shortage resulting in all observed cancer centres in Wales reporting treatment delays. And much like our GP services, or nursing, we’re overly dependent on locum recruitment of clinical oncologists. Indeed, the Royal College of Radiologists report shows that 19 per cent of Wales’s oncology staff are classified as locum staff, compared to 9 per cent in England, and 5 per cent in Scotland. Does the Welsh Government have a strategy for securing the future integrity of the clinical oncology workforce beyond simply hiring more locum staff, which, as the RCR report clearly states, is not cost-effective and compromises the long-term stability of the service?

Jeremy Miles (Labour, Neath)

I think the Member is right to point out that there are challenges in recruitment, and that can affect certain disciplines within oncology. I think it’s a challenge that other parts of the UK also share. The Member shares statistics and numbers with us today that suggest this is a pattern not exclusive to Wales. That isn’t good enough as an answer, but it is part of the important context. I think that the ability to attract staff in this area will be enriched and supported by developments in digital, by developments in genomics, by developments in research and innovation, which we know, across a range of disciplines, are able to attract practitioners. That’s why, actually, developments, and pursuing those as well, in parallel with recruitment strategies aimed specifically at the workforce, are part of the overall picture.

Buffy Williams (Labour, Rhondda)

4. How is the Welsh Government improving accessibility to health services across primary and secondary care for Rhondda residents? OQ61928

Jeremy Miles (Labour, Neath)

'A Healthier Wales' sets out our vision for primary and secondary care services in Wales. We're working with NHS Wales to improve access to services in the Rhondda and the rest of Wales, in line with our plan.

Buffy Williams (Labour, Rhondda)

Thank you. The Welsh Government’s commitment to iechyd da, and the Cabinet Secretary’s actions to tackle waiting lists, are really encouraging for my constituents, who tell me that, in some areas, they are still facing the 8 a.m. scramble to get a GP appointment, and others have been waiting over a year for procedures like cataract surgery. I know that the recent funding announcements to tackle waiting lists, coupled with plans for the diagnostic and treatment hub near the Royal Glamorgan Hospital, will lead to better healthcare outcomes for my constituents. And I know the Cabinet Secretary has previously touched on this, but could he please provide an update on the progress of the diagnostic and treatment hub, explain how Cwm Taf Morgannwg health board will use its share of the £50 million allocated to reduce waiting times, and outline plans to achieve a pharmacy-first approach across Wales?

Jeremy Miles (Labour, Neath)

Certainly. The Member touches on the range of steps that we are taking as a Government to improve access to care and to speed up access to medical appointments and to treatments. Residents in her constituency, as in all parts of Wales, will benefit from that. She asks me specifically about the developments at the Llantrisant health park. There will be a meeting later on this week of all the partners to identify progress in relation in particular to the design plans for the project. But work needs to continue in relation to the operating model, which will need to be a regional model, as well as a workforce plan in order to support the development there. I think it’s an exciting development, and, as I mentioned in brief earlier, it will provide a diagnostic capability as well as elective surgery, often in areas where we have some of the most challenging waits at the moment. So, I think it’s a step forward. It’s not a step forward in the immediate short term. So, the funding that we’ve provided over recent weeks—. Cwm Taf Morgannwg will, of course, be participating in that. And in addition to that, we’ve been able to provide support for the health board to deal with the consequences of the developments at the Princess of Wales Hospital, which is, actually, affecting the entire footprint of the health board, for reasons that I think will be obvious.

Joel James (Conservative, South Wales Central)

Cabinet Secretary, according to StatsWales, as of September this year, there were 9,319 people waiting for audiology services in Wales, with 3,845—around 41 per cent—waiting over 14 weeks. Of this 9,319 figure, 1,027 are in Rhondda Cynon Taf. I’ve spoken numerous times in this Chamber asking whether the Welsh Government would consider utilising private, high-street audiologists to deliver audiology services in a more convenient and accessible setting, in the same way as it utilises GPs, dentists and pharmacists. Poor hearing is directly related to cognitive decline in older people, as well as speech and language issues in children, and longer waiting times for audiology services increases the likelihood of people accessing other healthcare services. Given that the Welsh Government has confirmed that an additional £50 million of funding will be made available to reduce the longest waiting times, can you please confirm if any of this funding will be used to pay for private commissioned, community-based audiology services to help reduce the backlog of appointments in NHS Wales? Thank you.

Jeremy Miles (Labour, Neath)

I thank the Member for that question. I was recently able myself to experience first-hand the audiology services available on the high street and understand just how important that can be. The funding that we have made available in recent weeks has been specifically in relation to plans by health boards to tackle the longest waits in their areas. I would need to write to the Member separately in relation to the specific allocation for audiology. I will say that, as you will have picked up from what I’ve said in the Chamber recently, as part of that broader mix of additional investment in the system, much of that will be around changed approaches within secondary care settings to deliver services in different ways—so, sometimes, high-volume clinics for low-complexity interventions. Sometimes it’s about insourcing activity into secondary settings. But there is also an element of commissioning from the private sector, which we’ve had to do from time to time. A commitment that I give and that we give as a Government is that that will never be at the expense of the long-term sustainability and improvement in the public health service in Wales.

Rhun ap Iorwerth (Plaid Cymru, Ynys Môn)

5. Will the Cabinet Secretary provide an update on plans to develop an integrated health and well-being centre in Holyhead? OQ61949

Jeremy Miles (Labour, Neath)

I am highly aware of proposals for a new health and well-being centre in Holyhead. The Welsh Government has now received an application for funding for business case development.

Rhun ap Iorwerth (Plaid Cymru, Ynys Môn)

Thank you very much for that response. I raised this issue some weeks ago, a few days before Betsi Cadwaladr University Health Board came to a decision on the outline case. I and many residents in Holyhead and the area were very pleased that the health board at that point had agreed to approve that step, and that that has now been passed to Government for consideration. I don't need to remind the Cabinet Secretary of how important it is that we can proceed as a matter of urgency to stabilise and develop primary healthcare in Holyhead and the surrounding area. So, can I ask, on the timetable, when is the Welsh Government likely to come to conclusions on this stage of the development, as regards ensuring funding? And what kind of financial package will be considered, so that it's ready to go when, hopefully, the full case is presented and that full bid for funding arrives on the Minister's desk?

Jeremy Miles (Labour, Neath)

I can't give a specific timetable to the Member, but what is being considered at this stage is to consider the operational aspect, the funding aspect and the other practicalities. So, that work is currently under way.

In terms of sources of funding, there is a variety of potential sources. The integration and rebalancing capital fund is an important element of this, but Welsh Government officials have had very encouraging discussions with Ynys Môn council and the health board regarding this development and the potential of looking at the Transforming Towns fund, because there is an element of regeneration that follows this kind of development. So, we haven't received a bid for that fund yet, but there is more than one way of contributing to this project. The work of evaluating the application itself is being done currently.

Russell George (Conservative, Montgomeryshire)

6. Will the Cabinet Secretary confirm how much of the £50 million funding to support health boards that was referred to in his statement of 17 November 2024 has been received by Powys Teaching Local Health Board? OQ61927

Jeremy Miles (Labour, Neath)

Powys Teaching Local Health Board, as a provider, will receive their share of the additional £3 million to improve children's neurodiversity waits. The 164 Powys residents waiting over two years across Wales will benefit from the money given to the other health boards where they are currently waiting.

Russell George (Conservative, Montgomeryshire)

Okay. Thank you, Cabinet Secretary. You haven't answered my question at all there, and I think you know you haven't answered it—I did ask you last week. You announced, 10 days ago, in a statement to Members and at your Labour Party conference, that there would be £50 million-worth of spending across the seven health boards and that funding would be provided to them immediately. That was the wording in your statement. So, I am asking specifically how much of that £50 million Powys Teaching Health Board will receive? I think you talked about the £3 million. That's not their share; they'll be receiving part of that £3 million. But I'm asking how much of that £50 million will be received by Powys Teaching Health Board. We know that the pressures on the health board are extreme. We know that there are waiting lists in some areas that are significant. We know that there's downgrading to Llanidloes hospital as a result of funding pressures to the health board, as well. And, of course, I know you'll agree with me that it is vital that there is cross-border co-operation between England and Wales, and, of course, the health board has to provide funding to health boards in England in order to reduce their own waiting lists. So, can I specifically ask, Minister, how much of that £50 million will be received by Powys Teaching Health Board?

Jeremy Miles (Labour, Neath)

Well, I don't mean there to be any confusion, so let me try and spell it out. Of the £50 million, there is a £3 million fund, which is allocated between health boards in relation to children's neurodiversity waits. Powys will have a share of that, based on performance in relation to the numbers of people on the longest wait lists it has. The balance of the funding—[Interruption.] I'm happy to answer the Member's question, if he's prepared to listen to it. The balance of the funding is issued to health boards as providers and recognising the longest waits within their footprint as providers. Powys doesn't have long waits for the services that they themselves provide. So, the allocation of the £50.4 million is aligned to the health boards who have the biggest backlogs of patients and the longest waits, and, of course, Powys residents are included within those figures.

Joyce Watson (Labour, Mid and West Wales)

7. What action is the Welsh Government taking to improve the awareness and understanding of neurodivergence within health boards? OQ61924

Sarah Murphy (Labour, Bridgend)

We are delivering change. Since 2022, we have invested an additional £12 million to deliver the neurodivergence improvement programme up to March 2025. And, this year, a further £3 million will also provide health boards with funding to reduce the longest assessment waiting times for children and young people.

Joyce Watson (Labour, Mid and West Wales)

Diolch, Cabinet Secretary. Thanks to the hard work and dedication of its staff, Hywel Dda University Health Board recently became the first health board in Wales to achieve 'autism understanding' status. I'd like to take this opportunity to congratulate them on that fantastic accomplishment. In order to achieve that status, 85 per cent of the health board staff have completed e-learning modules on neurodivergence and work to further raise awareness of neurodivergence is ongoing across the health board. The aim of the training is to help ensure that both neurodivergent staff and patients are better supported, either whilst working for the health board as an employee or accessing services as a patient. The accreditation is given by the national neurodivergence team, and that's a Welsh Government-funded body, committed to improving the lives of neurodivergent children, young people, adults and their families. Minister, are you able to give any update on how other health boards across Wales are progressing with achieving 'autism understanding'?

Sarah Murphy (Labour, Bridgend)

Thank you so much to Joyce Watson for the question, because it also provides me with an opportunity to congratulate and thank Hywel Dda University Health Board for becoming the first health board in Wales to achieve 'autism understanding' status. I actually had the chance to meet Catherine Vaughan, the service delivery manager for neurodevelopmental services at Hywel Dda, and Liz Carroll, director of mental health and learning disabilities, when I visited the psychological well-being centre in Carmarthen last week. The whole team are absolutely fantastic and inspiring, so I am unsurprised that they are driving this really positive change. As Joyce Watson mentioned, the accreditation is awarded by the national neurodivergence team, a Welsh Government-funded body dedicated to improving the lives of neurodivergent children, young people and their families, and the team engages with stakeholders from all sectors across Wales to help develop policy, legislation, resources and information around neurodivergence. This includes autism, helping to increase awareness and understanding, and the removal of barriers that may stop neurodivergent people from achieving their potential. They also work closely with all health board workforce managers, and they've recently developed, as well, an ADHD and Tourette's syndrome module for the e-learning. They are available on all health board digital training platforms. And, as you've said, to achieve the 'autism understanding' status, 85 per cent of their 13,000 staff had to complete the e-learning module, and the award means that the organisation understands autism. I really hope that this, in turn, will enable neurodivergent staff and patients to be better supported in the working environment, and I wanted to give a quote here from Angela Lowe, who has recently started working at Hywel Dda Health Board. She said,

'Before, I'd be going home and I'd have to offload all the time. Lots of negative experiences which were looping in my mind and it was quite awful really. I’m coming home now really excited to be home and looking forward to seeing my family and just really happy.

'It’s been life changing for me, working here,'

So, thanks for bringing this excellent achievement to light, Joyce Watson. But also, Hywel Dda are the only health board that have made the 'autism understanding' training mandatory to date. And so, I think the proof is in the pudding, and I would hope that this will encourage other health boards to take this up. The resources are widely available, and I will provide a written response to Joyce Watson with an update on each health board and each module and where they are with their staff completing them. Diolch.

Delyth Jewell (Plaid Cymru, South Wales East)

8. Will the Cabinet Secretary provide an update on the development of the proposed NHS Wales women's health plan? OQ61932

Sarah Murphy (Labour, Bridgend)

The women's health plan will be published in December. The women's health network has developed it through partnership working with all health boards, Public Health Wales, the NHS executive, academia and the Welsh Government, drawing on the voices of over 3,800 women captured as part of the discovery phase.

Delyth Jewell (Plaid Cymru, South Wales East)

Thank you very much for that, Minister. A few weeks ago, this Senedd supported a motion that I presented that aimed to strengthen women's voices in their healthcare. My motion called for action to address women's pain and how that is accepted as normal in healthcare, and for this upcoming women's health plan to be used as a means of changing that. The motion was passed unanimously. Could you assure me, please, that the upcoming women's health plan will indeed address that? I'd be really grateful to have a meeting with you, if we could discuss that further, please. I am particularly concerned at present about the lack of adequate aftercare that's given to women after they've given birth. There are, I understand, long waiting lists to see gynaecologists. Particularly, I'm concerned about traumatic birth aftercare. One woman contacted me who said that she had been told that she'd have to wait 15 months. Surely, we're letting women down here. So, could we have a meeting please to discuss that and some other aspects of that motion that was passed recently?

Sarah Murphy (Labour, Bridgend)

Absolutely. Thank you so much, Delyth Jewell, for that question and also for the debate that we had a few weeks ago. You actually—and I've kept it in my notes here—ended the debate by saying that

'if there's one thing where we can please bring about change, women's voices should be heard and women must be believed.'

So, that's running through absolutely everything that I'm doing. I also saw when you posted on Facebook, the amount of comments that you had underneath, which speaks volumes. Three thousand eight hundred women have contributed to just the discovery for this women's health plan. It says it all. We're crying out to have our voices heard. I would really welcome having a meeting together. That would be really, really helpful. And I do really want to reassure you that I am determined that the plan will advocate for women and girls in the NHS, and will empower women to be heard when accessing healthcare. The women's health network has an important role in also advocating for women, and this role will include working with the other clinical networks to ensure that women's needs are considered, their voices are heard and their experiences are recognised.

When it comes to what you're talking about, birth, I'm also doing lots of visits at the moment, and one of the things that really is coming through is birth trauma for women and also their partners and their families. I think that Mothers Matter, who are based in Tonypandy in the Rhondda, are absolutely fantastic, but hearing from them how many women are coming to see them is really heartbreaking, and having to wait 15 months is unacceptable.

I would like, though, to pay tribute. I meet with many of the maternity teams across Wales, and the bereavement midwives as well, and they do a tremendous job, but sometimes there are not enough of them, and you need that support and resilience within the team, because what they're offering and providing is quite taxing on them.

So, I wanted to say that I would welcome having a chat about this. And one of the things that is coming through really strongly for me is that women are often encouraged to do a birth plan and they're not encouraged as much to do a recovery plan, and that is something that I think we need to raise more attention for. You need time as well to recover, and you need to consider that. And the pressure, sometimes, that is there afterwards is absolutely enormous. So, anything that we can do together as well to push that forward I would really welcome. Diolch.

Elin Jones (Plaid Cymru, Ceredigion)

And finally, question 9, Hannah Blythyn.

Hannah Blythyn (Labour, Delyn)

9. Will the Cabinet Secretary provide an update on access to GP services in Delyn? OQ61935

Jeremy Miles (Labour, Neath)

Ensuring good access to GP services across Wales is a priority for this Government. We have worked with the GP profession to introduce legislative changes that support access improvements, and investment though the additional capacity fund has helped practices take on more staff to deliver better services to their patients.

Hannah Blythyn (Labour, Delyn)

Thank you very much for your response, Cabinet Secretary.

Hannah Blythyn (Labour, Delyn)

I very much recognise the work that you and Welsh Government have done on this, and of course the pressures on practices in communities right across the country. I've referenced it here before that, over the summer and into the winter now, I've done a survey across my constituency called, 'Our Home, Our Health', and that's asked a range of questions about access to services, but also people's suggestions as to how they think things could be improved or changed to better accommodate them.

As you probably won't be surprised to hear, access to GP services is something that came up quite a bit, not least because we know that that is most people's most common contact with the health service. But whilst there were some positives to report, there still seem to be quite a few surgeries where there is that 8 a.m. bottleneck, being held on the phone for a long time, to then finally get through to find that there is no appointment or no same-day appointments, or some people only being able to have access through e-services. So, it's clear that there still needs to be some work done to make sure that, once those policies are introduced, that they work well in practice.

Can I ask, perhaps, if you would consider, once that information from my survey is fully compiled, if I would be able to present that to you? And, as part of that, I'd really like to invite you to come and visit a service in my constituency, where we can talk to people on the ground there too. Diolch.

Jeremy Miles (Labour, Neath)

Well, I thank the Member for the work that she has been doing in her community in relation to this really important matter, and I'd be very, very happy both to visit a practice with her in her constituency and also, obviously, to receive the findings of the research that she has undertaken. I would say, and I should have said this to Buffy Williams earlier, that if you have particular surgeries where you are hearing that people are struggling with access, then please do let me know, because I'm keen to understand that, not least because in 2022 we revised the general medical services contract to include the access commitment, as the Member has acknowledged in her question, and that is designed to specifically address the 8 a.m. bottleneck, as she referred to it. We are told by practices on a self-referred basis that 97 per cent are meeting that requirement to provide a blended model of access with a mix of remote, face-to-face, urgent, on-the-day and pre-bookable appointments, to make access as flexible as possible. But she will know, as I know from my own constituency mailbag, that there are practices that aren't living up to that full expectation, and they should be. So, if she could let me know, I'd be very grateful.

In addition to that, we have sought to support practices to meet that aim. We've invested £12 million over that intervening period to help build GP practice capacity, with additional staff specifically to support that commitment, but I think it is fair to say that there's been quite substantial progress, but there is obviously more to do, and I would want to see all practices meeting that 100 per cent commitment.

Elin Jones (Plaid Cymru, Ceredigion)

Thank you, Cabinet Secretary.

3. Topical Questions

Elin Jones (Plaid Cymru, Ceredigion)

There are no items under item 3.

4. 90-second Statements

Elin Jones (Plaid Cymru, Ceredigion)

Item 4 is the 90-second statement, and this afternoon's statement is from Mabon ap Gwynfor.

Mabon ap Gwynfor (Plaid Cymru, Dwyfor Meirionnydd)

Thank you very much, Llywydd. Last week was World Antimicrobial Resistance Awareness Week. The World Health Organization has described antimicrobial resistance as one of the gravest threats facing humanity in the twenty-first century. We need to tackle antimicrobial resistance for several reasons. First and foremost, antibiotics save lives. In a post-antibiotic world, even minor infections such as skin and urinary tract infections could lead to admission to hospital or even death. By tackling antimicrobial resistance, we will ensure a long-term future for these vital medical treatments. Controlling antimicrobial resistance is also crucial to maintain routine medical procedures such as surgeries, cancer treatments and organ transplantation, which are all dependent on effective antibiotics to prevent infections.

We must also remember that antibiotics are vital for food production and agriculture. If these antibiotics become ineffective, it could threaten the global food supply chain. Of course, tackling antimicrobial resistance calls for a global effort, but I very much hope that we as a Senedd can agree that it is essential that Wales plays its part by collaborating internationally to develop new drugs and promote the responsible use of antibiotics.

And finally, within Wales, I encourage the Government and the health service to praise the hard work and leadership of the 30 or so specialist antimicrobial pharmacists who work across the nation. They work tirelessly to raise awareness of this threat and ensure that we make the most effective use of antibiotics, thereby ensuring their effectiveness for future generations.

5. Statement by James Evans: Update on the proposed Mental Health Standards of Care (Wales) Bill

Elin Jones (Plaid Cymru, Ceredigion)

Item 5 is next. It's a statement by James Evans, giving an update on the proposed Mental Health Standards of Care (Wales) Bill. I call on James Evans to make his statement.

James Evans (Conservative, Brecon and Radnorshire)

Diolch, Llywydd, and it's important for me to give an update to the Senedd on my Mental Health Standards of Care (Wales) Bill and where we are to date. I want to do some scene setting. When I introduced this Bill, I introduced it because we have two primary pieces of legislation across the United Kingdom that guide us with regard to mental health care. They are the Mental Health Act 1983 and the Mental Health (Wales) Measure 2010, which was put through this Senedd by Jonathan Morgan. Those two pieces of legislation, from all the conversations I had when I held the shadow mental health brief, they're outdated, they're not fit for purpose, and they don't represent twenty-first century Britain. Those pieces of legislation are letting numerous people down, not just here in Wales, but across the whole of the United Kingdom. So, what I set out to do was to improve that legislation.

At the time, the UK Government, which was of deep regret to me, decided to withdraw the Mental Health Bill that was in Westminster, which I thought was a mistake. So, I decided to introduce my own Bill here in the Senedd and I was very, very grateful, on introduction of that Bill, that I was able to get cross-party support for the Bill, especially from the Welsh Government, my own group and Plaid Cymru. And I'll be ever grateful actually to the previous First Minister—well, previous previous First Minister—Mark Drakeford, who supported this also.

As I've gone through the development of this Bill, it's become apparent that there are some extremely difficult challenges that need to be overcome, certain challenges that would take an awful lot longer than the process that I have available to me to introduce legislation that is fit for purpose, that can be rolled out on day one on introduction, and to make sure that it actually serves those people across Wales. A guiding principle for me, since I've come here, is that we shouldn't introduce legislation to this Senedd that is defective and that I don't think meets the needs of the people we serve. So, for that reason, Llywydd, I've decided to withdraw my Bill and I want to set out some reasons for doing that.

James Evans (Conservative, Brecon and Radnorshire)

One of the main reasons is that the new UK Government has decided to bring forward the Mental Health Bill in Westminster to update that legislation, which needs doing. I think it's important, for certain parts of this legislation, that we do work on that England-and-Wales, cross-border basis. One of the key parts of the Bill for me, also, was around nominated persons. We hear far too often that people who are subject to domestic abuse or any type of abuse are then having to go into mental health services, and then tend to have their abuser being the one advising on their mental health care. To me, that is abhorrent, it's not right, but the system is set up at the minute to fight against that. That's something I've wanted to change in Wales and the new Mental Health Bill in Westminster brings that forward. So, that was removed at that point as well.

I also wanted to do a piece of work around detention. It's very, very difficult, as I found out during the Bill's development, to set different criteria for detention across England and Wales, mainly because justice isn't devolved to Wales, so it's very difficult on the policing element and how that works in practice. So, that was also removed from the Bill on introduction.

One of the main parts that I wanted to change was to update—and it was a driving force as it went forward—around the reassessment of children. As the legislation is currently drafted in the Mental Health (Wales) Measure, young people cannot get their mental health reassessed. That doesn't conform with the UN Convention on the Rights of the Child and that was said by Barnardo's and other organisations that I met in my time, also, on the Children, Young People and Education Committee. That was raised as a problem, that young people are being denied opportunities that others have. So, that's something that I wanted to change with the Ministers who were part of the Bill, during its development.

What I've worked out and what I think needs to be changed and looked at is how the Senedd looks at backbench legislation. It's very controlled at the minute, it's a very short period of time, as other Members who've brought forward backbench legislation know. And to bring forward the piece of legislation that's needed to ensure that children are protected, to make sure that all the safeguards are in place, I think would take, on estimates I've done, over a two-year period. That's something that I physically don't have available to me. And as I said earlier, I don't want to bring forward anything that puts children at risk, or—as the Deputy First Minister knows, who is in the Chamber now, and we sat on the Legislation, Justice and Constitution Committee together—puts in place a broad regulation-making power for Government, for them basically to have a blank cheque to do what they want. I don't think that's the right way to do legislation. I'm sure the Deputy First Minister may have a different view now that he's in the Government, but I don't think that is the proper way to do legislation; I think it should all be formulated, done properly, so that it can be introduced.

So, that's why I am withdrawing this legislation, but this isn't the end. I'm very proud of the work that I and my team and everybody in this Chamber does to raise the issues of mental health and well-being. I think the new Bill in Westminster is a great opportunity for us to raise that further, to give people who are silenced a voice. But I do just want to mention also the Royal College of Psychiatrists who supported me through this piece of work, especially Oliver John and all the work that he's put into this. I know his time is very taken up now by events in Westminster, but I'd like to thank him for all the work he's done for me. I also thank my team in my office and the Senedd team as well, because we have a fantastic team who are based here in the Senedd, who support backbench Members with all the legislation they bring forward. But I would say, there are Members in the Chamber who are part of the Future Senedd Committee, and I really do think we need to look at the process of backbench legislation. And maybe something that the Government needs to consider as well is something that they do in Westminster, which is to put up a list of Bills that they would actually like to take forward, but don't have the time to do, but which they'd throw support behind. So, I think that's something that the Government could look at—how they support backbench legislation going forward.

I'd like to thank some people who are also in the Chamber. I know there are a couple of the Cabinet Secretaries now who aren't here, but Lynne Neagle was someone who was very keen. Lynne worked very closely with me on this Bill's introduction and I will say that if it wasn't for the close working relationship I had with the Cabinet Secretary for Education, I don't think this Bill would be in the position it was to get broad cross-Government support, and also her special adviser at the time was exceptionally good. And obviously, my Chair, when I was on CYPE, Jane Bryant, when she came into post, was very supportive of the Bill and wanted to drive this forward, and also Sarah Murphy now, as the Minister. We all recognise in this Chamber that stuff needs to be done. I call it stuff because there is an awful lot of stuff to do. You can't really put your finger on one thing that needs to be done to improve this area of work.

We have got some great advocates in this Chamber for mental health, and I just want to say that a few people touched me during this process: Jack Sargeant, my very good friend, who supported me through this; Buffy Williams; Members of my own group who supported me; and also Members in Plaid Cymru as well who supported this process. So, it is a bitter disappointment to me that I have to withdraw this. But I do think that, in the interests of the Senedd and the best law making, and in the best interests of the people whose lives this Bill was hoping to improve, I don't think that this is the right time to bring this Bill forward. So, Llywydd, I am officially withdrawing this Bill. Diolch.

Elin Jones (Plaid Cymru, Ceredigion)

I call on the Minister for Mental Health and Well-being to contribute to this statement—Sarah Murphy.

Sarah Murphy (Labour, Bridgend)

Diolch, Llywydd. I'd like to put on record my very real genuine thanks to James Evans for his work on his mental health care standards Bill, and for the truly collaborative approach that he took to the development of his Bill. Like James, I am disappointed that it will not proceed. I recognise the time, effort and passion that he has invested in this work, and in his efforts to improve support for some of the most vulnerable people in Wales.

As James has already covered, the UK Government introduced its Mental Health Bill on 6 November, and the UK Bill aims to modernise mental health legislation in England and Wales, giving greater choice, autonomy, enhanced rights and support. It also aims to improve care for people with a learning disability or autism.

I support these changes, several of which were included in the original scope of the Bill that James proposed. I met Baroness Merron before the UK Bill was introduced, and we have agreed to work closely to ensure that the legislation works for Wales. My officials meet with UK Government officials every week, and I will be receiving regular updates on progress.

James also proposed using his Bill to make changes to the mental health Measure in Wales, and these will be reflected in the findings of the duty to review. I very much supported this approach. I am pleased to make a commitment today to make these changes an action in our new mental health and well-being strategy, which will be published next year.

To end, Llywydd, I am disappointed that James Evans’s mental health care standards Bill will not proceed, but the changes that he was seeking to secure through his legislation, which were supported by the Welsh Government, will be achieved through the UK Mental Health Bill and through future planned work on the Measure in Wales. James, I would just like to say that you have so much respect from myself, from your colleagues, from my group, from the Senedd, in how you have gone about doing this. You have made a real, real difference. So, diolch yn fawr.

James Evans (Conservative, Brecon and Radnorshire)

I'd like to thank the Minister for her very kind comments. I would also like to say that I know you're introducing a legislative consent motion to the Senedd on the Mental Health Bill, and I look forward to going over that as it comes forward. As I said, if there is anything in there, I will be supporting the Government over that, because I do think that we really do need to see updates to mental health legislation in Wales. I’m sure that my group will be horrified to hear that I have said that—but there we are—without going through the scrutiny part of it. [Laughter.]

But I would also just like to say that it’s very pleasing to hear the Government’s commitment around updating the mental health Measure on children. I know that there are an awful lot of people and organisations out there who will hear you say that, and I am very pleased that you have included that in the updated strategy coming forward. So, diolch yn fawr iawn, Minister. Thank you.

Mabon ap Gwynfor (Plaid Cymru, Dwyfor Meirionnydd)

It is with regret that we note the withdrawal of this Bill, especially for the reasons listed by the Member. While the substance of the Bill didn't, in our view, necessarily go far enough in some areas, it was, nevertheless, a significant step forward in addressing some of the serious deficiencies in the current legislative framework relating to mental health standards.

But we are now faced with the familiar prospect of a devolved area of responsibility being effectively outsourced for Westminster to sort out. I mention this not to pass judgment on the Member himself. Indeed, I commend James for having brought this important Bill to the floor of the Senedd in the first place, and I know how passionately he has been advocating for improvements in mental health provision. James has been a constant champion for mental health since first entering this Chamber, and I have had discussions with him around this proposed Bill.

I mention this, rather, to highlight the broader issue of how this place too often falls short in living up to the promises of devolution to provide creative and radical solutions for the people of Wales. It shouldn’t be the height of our ambition here to simply wait for Westminster to lead, and I really do think that we collectively as a Senedd could have been far more proactive and ambitious in pushing the boundaries for mental health reform in lieu of years of inaction from successive UK Governments.

Turning to the proposed changes to the UK Mental Health Act, we all know where the faults lie, particularly in terms of access for young people, the disproportionate prevalence of detentions amongst ethnic minority communities, and the lack of agency afforded to patients on their treatment. So, I’d be grateful if the Cabinet Secretary could explain or provide an update to us in the Senedd on what conversations she’s been having with UK Government colleagues on the likely timescales for amending the Act—or the Minister, I should say, rather than Cabinet Secretary; I'm giving her a promotion there. Does the Minister also recognise the important role that third sector organisations have for the implementation side, and, as such, has the Minister been raising the widespread concerns from mental health charities as to the impact of the rise in NICs on their work in the course of these discussions?

Elin Jones (Plaid Cymru, Ceredigion)

Just to clarify, this is not for the Minister to respond. James, you're not the Minister, but you are the one who responds.

James Evans (Conservative, Brecon and Radnorshire)

I'm not sure people in front of me would like me responding on behalf of the Welsh Government—well, you never know, things may change in the future. As you talk about, Mabon, what I was pleased about with this Bill is that we did have that coalition across the Senedd on how we can improve mental health legislation. Like you, I would love to see law made in Wales, debated in Wales and then stamped here in Wales, but, unfortunately, the process that I have got—. I would have continued with this process if I had more time. So, maybe something that Plaid Cymru can advocate for is changing the backbench process, to make sure that we do give Members more time to formulate Bills to make sure we get the proper consultation periods around it, because only that way can you create good law. Because not many of us come into the Senedd with fully fledged law written, done, and all the regulation-making done around it—it simply doesn't happen. And I know the Senedd here itself doesn't have the capacity to do an awful lot of that work. We do have to rely on a lot of external organisations. We're not the Government, we don't have all the civil servants and the expertise, but I do think it is something, going forward, that we really do need to look at—how we improve this process. And I'm sure the Minister will write to you in due course. [Laughter.]

Elin Jones (Plaid Cymru, Ceredigion)

Thank you, James Evans, for your statement, which is proving to be very timely today, because the Business Committee, in its next meeting on Tuesday, will be commencing its review of the legislative processes we have at this Senedd, both in terms of Member Bills and public Bills generally. So, I'm sure that James Evans and others will have a great deal to contribute to that review.

Elin Jones (Plaid Cymru, Ceredigion)

Thank you very much for that.

6. Debate on the Economy, Trade and Rural Affairs Committee Report, 'Development Bank of Wales'

Elin Jones (Plaid Cymru, Ceredigion)

We will move to our next item, which is item 6, a debate on the Economy, Trade and Rural Affairs Committee report on the Development Bank of Wales. I call on the Chair, Paul Davies, to introduce the item.

Paul Davies (Conservative, Preseli Pembrokeshire)

Diolch, Llywydd, and I move the motion tabled in my name. As I'm sure we all appreciate, the Development Bank of Wales plays an important role in the Welsh economy. It exists to support businesses who have good prospects but may struggle to access all the finance they need, and it exists to also help support some of the Welsh Government’s key economic aims. As we know, the bank is responsible for spending, lending and investing a considerable amount of public money. This means the bank’s performance really matters.

The committee normally holds an annual scrutiny session with the bank to examine its annual report, its progress and what it is delivering against the Welsh Government’s objectives. However, this year, as Members felt that the bank had reached an appropriate maturity, the committee decided to undertake a full inquiry into the Development Bank of Wales. This inquiry looked at the bank’s overall performance since its establishment in 2017, how it is meeting the objectives the Welsh Government has set it, and we looked at how it compares with international best practice, so we could see how the bank compares to its peers around the world.

During this inquiry, we received a lot of positive evidence regarding the bank’s activities and its approach as a lender and as an investor. Cardiff Business School highlighted the bank’s important role in helping businesses recover from the pandemic, and the Federation of Small Businesses Wales said the bank was an effective, well-known and useful tool in the armoury of the Welsh Government, and one that has been quickly accepted as a good part of the business environment by smaller businesses.

We also heard about some issues and challenges faced by the bank, and, indeed, by the Welsh Government, due to some issues around the bank’s classification, which I will come on to later on. Nevertheless, we heard a lot of constructive suggestions for improvements, which is what we started this inquiry looking for. However, worryingly, we also heard some very negative evidence and criticism, particularly around the bank's equity investments. Much of this evidence was provided anonymously, which presented us with a level of difficulty in how we handled this information and how we could use the evidence to build our recommendations.

Paul Davies (Conservative, Preseli Pembrokeshire)

I will focus the majority of this opening address on the areas where we believe there are important actions that need to be taken to improve the bank's performance. However, Dirprwy Lywydd, I would not like you or the other Members here to assume this means the bank is in terrible shape, or I believe it is not doing good work. Neither of these are the case. In their strategic asset document, the bank said they would be a

‘cornerstone for delivering Welsh Government priorities, driving up long-term growth and creating and safeguarding higher quality jobs.’

And many people we spoke to were of the view they were achieving that aim. The CEO of Laser Wire Solutions told us the bank was on a bigger mission than other lenders and that they were looking to develop the Welsh economy. And the CEO of Nutrivent told us the bank had

‘undoubtedly been a catalyst for economic development and growth.’

So we received some very positive comments during our inquiry. That said, as you would expect from undertaking an inquiry, I will now focus on areas we believe as a committee the Welsh Government and/or the development bank need to work on to ensure the bank can achieve its overall aims.

The committee's report makes 13 recommendations covering, amongst other issues, the bank's remit, its operations, its relationship with the Welsh Government and how it handles complaints and due diligence. Of course, the bank is charged with its responsibilities by the Welsh Government. The main route for this is via a term of government remit letter. Whilst the Welsh Government does seem to have strong strategic links with the bank, including civil servants sitting as observers on its board, it is important the bank keeps up with the Government's economic ambition.

However, as economic priorities can change, the committee recommended in recommendation 2 of its report that the Welsh Government should set out the mechanism for reflecting changes to its economic priorities over the course of a Senedd term, and we hoped the response to this specific recommendation would have led to more regular remit letters. Nevertheless, the Welsh Government responded to this with the dreaded ‘accept in principle’ and said they would take this recommendation forward via an update to the development bank's framework document. However, I hope the Cabinet Secretary will reflect on this matter and ensure that regular remit letters are now issued to the bank in future.

I mentioned earlier we received some extremely worrying evidence regarding the bank's equity investment work, and I will come on to that now. Professor Dylan Jones-Evans told us—and I am reading this out verbatim as it contains some very serious allegations—

‘Unfortunately, I have been approached by a range of businesses prior to this review who feel that they have not been treated fairly with valuations being too low, where decisions have taken far too long, and where terms are unacceptable with a “take it or leave it” attitude. Worst still, there have been instances where some have been bullied by the directors imposed on them, where they have been forced out by dubious means and where founders feel they have not been supported by the Bank.’

He went on to tell us that this has happened to several young, inexperienced founders who should have been given far greater support at the time by the development bank as their business's main funder. I am sure everyone in this Chamber will be concerned by the Professor's allegations and agree young entrepreneurs are exactly the sort of people we want to encourage to do business here in Wales. And if these reports are accurate, those actions may well have extinguished that entrepreneurial spirit, which would be an absolute tragedy, and exactly the opposite of what the bank was established to do.

Following our session with Professor Jones-Evans, we received a number of e-mails from people who had had dealings with the bank and felt they had been bullied out or in fact had their businesses essentially stolen. Unfortunately, much of this testimony was supplied anonymously, which limited our ability as a committee to scrutinise it. As you would expect, I arranged these complaints via a letter with the then Cabinet Secretary, Jeremy Miles. However, Dirprwy Lywydd, as these allegations are so strong, perhaps the Cabinet Secretary can confirm she has seen this document, and as a committee we would be very interested in her views.

I just want to be clear: I have discussed these accusations with the bank via correspondence and in a private meeting, and they absolutely refute them. The bank told us that investor directors were common in venture capital and they would always work in the interests of the company itself as a matter of company law. The bank also explained they have a comprehensive complaints procedure and seek to deal with all complaints openly and fairly, and that they have opened up a new route so complaints can be made directly to the bank's general counsel if the complainant wishes the matter to be kept confidential.

We made two recommendations as a result of this evidence: recommendation 10, which called for the bank’s complaints process to be included in a full review undertaken of the bank by Welsh Government, and recommendation 11, which said the bank and the Welsh Government should give consideration as to how they can collect views from businesses confidentially. I am pleased to say that the Welsh Government accepted recommendation 10 in principle and fully accepted recommendation 11.

For recommendation 10, the Government said that the bank's complaints procedure would be included in an independently led project assessment review on aspects of delivery and assurance provided by the bank, due to be held in 2025. Perhaps in her response, the Cabinet Secretary can tell us exactly when in 2025 this review is expected to begin and if there is an anticipated time frame for it to report.

In response to recommendation 11, the Welsh Government said that the bank would give further consideration as to how it may use other methods to encourage and gather feedback in a confidential way. I would also be keen to hear if the Cabinet Secretary is content with progress on this matter.

Another aspect of the bank’s operations that gave rise to some concern was its due diligence processes. Whilst the bank seemed to have a good hold on assessing the ability of those receiving loans to repay, given that the bank lends public money, we felt that there needed to be a higher bar around assessing the appropriateness of an applicant to receive this funding in the first place, for example did they have any history of criminal activity?

Recommendation 8 in our report suggested that the Welsh Government task the bank with reviewing its due diligence processes—a recommendation I'm pleased to say that the Welsh Government accepted. Last week we held our annual scrutiny session with the bank and I am also pleased to say that they discussed their new enhanced due diligence processes, and we were generally satisfied with progress on this issue. We will of course monitor, and continue to monitor, the bank's enhanced due diligence processes and their effectiveness going forward.

Before I bring my remarks to a close, Dirprwy Lywydd, I would like to focus on a slightly technical point that really needs addressing if the development bank is to carry on fulfilling its role. In August 2021 the Office for National Statistics reclassified the bank, with the exception of its FW Capital arm, as central Government. This is a technical change, but the reclassification creates an issue that the then Cabinet Secretary described as 'double counting', where the Welsh Government have to keep money in reserve to cover any money it has given to the bank to invest, but that hasn’t been invested yet. As a committee, we are concerned that this double counting will limit the amount of money that can be given to the bank for investments. The then Cabinet Secretary agreed that this was an issue and told us, and I quote:

'We are trying to find a solution to that with the Treasury at the moment. We haven’t yet found a solution. It is important that we do, because it creates a double exposure in our accounts.'

He also said that the Welsh Government were seeking funds from the Treasury to cover this double exposure. Our recommendation 6 encourages the Welsh Government to conclude negotiations with the Treasury around the reclassification as promptly as possible.

We're also of the view that any agreement should protect the bank’s role and not have a detrimental impact on the Welsh Government’s budgetary position in the future. The Welsh Government accepted this in principle and said that they would continue to work with the Treasury, with the goal of concluding an outcome to the reclassification of the development bank that is budget neutral on the bank and on the Welsh Government. Again, perhaps, in her response to this debate, the Cabinet Secretary can update us on the progress of these negotiations.

Dirprwy Lywydd, before I end, I'd like to thank everyone who engaged with the committee on this important inquiry and the clerking, research and legal team who supported us through this important work. I'd also like to specifically thank the development bank and their staff for their engagement. I know it will not have been a comfortable process to be subject to this inquiry, but I'm pleased that the bank engaged with it and continues to engage with the committee. Broadly, the majority of the evidence that we received was supportive of the bank and its operations, which is something the bank’s staff should be proud of. I look forward to hearing views from the other Members this afternoon. Diolch yn fawr iawn.

Luke Fletcher (Plaid Cymru, South Wales West)

Firstly, I'd like to thank the Chair for his chairmanship during this inquiry. I'd like to thank the clerks for progressing this inquiry as well. I was really pleased, as a member of the committee, that we had the opportunity to do some more in-depth work into the operation of the development bank, because I think it's on all of us here to really understand how the development bank works, to recognise the potential of the development bank. The classification issue that the Chair mentioned earlier: the reality of the situation is that many people in this Chamber would not have known about that reclassification, yet the effects of that reclassification on the bank's ability to invest and to operate is huge. So, it's really important that Members take an interest in how the development bank operates and its investments as well.

Luke Fletcher (Plaid Cymru, South Wales West)

When it comes to business investment in Wales, there is little doubt, I think, that the transition from Finance Wales to the Development Bank of Wales marked a step change. In its final year, in 2016-17, Finance Wales invested £56.5 million; by 2022-23, DBW had nominally doubled this, reaching £124 million. Now, on the surface, these figures reflect impressive growth, but when we delve deeper into the broader implications for business support in Wales, the picture actually becomes a bit more mixed. Private co-investment targets, the number and type of businesses supported and the nature of the investments made paint a more complex, and, at times, concerning picture. Now, this inquiry has provided an important opportunity to have that deep-dive, as I mentioned, and go beyond the committee's annual scrutiny of the development bank on the basis of its annual report and accounts, which, even by the bank's own admission, have become increasingly difficult to understand in recent years. This report that we're debating today raises important and occasionally concerning questions about the development bank's role within Wales's business support ecosystem, an ecosystem that by any measure is failing to deliver the kind of sustainable growth that we all want to see in Welsh businesses.

So, for example, alarmingly, some businesses' interactions with the development bank, as was highlighted, highlight governance issues, particularly around how the bank appoints non-executive directors and manages its due diligence processes. Now, these challenges arguably represent some of the low-hanging fruit. Reforms that can be undertaken quickly to improve how businesses interact with and receive support from the development bank should be fairly straightforward. The recommendations, I think, in this report represent the minimum viable options available—the absolute least that we need to do to put the bank on a more stable, sustainable and reputable footing. And there is no reason that any of them should not be implemented and implemented quickly.

So, looking further ahead, I've been clear in my belief that we need to consolidate and rationalise business support in Wales, creating that one-stop shop that DBW was supposed to be from the start. I think that by unifying the services offered by Business Wales and the development bank, we can create a more streamlined and effective system. And I'm particularly concerned with what we found out in this inquiry, that the bank is so far failing to tackle one of the longest standing and most serious structural issues in the Welsh business environment, what the Federation of Small Businesses has consistently flagged as our missing middle—that missing strata of Welsh-owned medium-sized businesses, which means that our economy is less productive and innovative than it could or should be.

Now, this structural gap stifles productivity and innovation across our economy. Tackling this issue must become a central priority for the development bank, starting with proper investment in succession planning. Keeping successful businesses in Wales, whether through management buy-outs, employee ownership or other models, is key to securing Wales's long-term prosperity. The report includes recommendations in this area that I would urge us to prioritise. Looking at the bank's 2023-24 annual report, it revealed that it invested nearly £11 million more in residential property than in business succession. Now, I think we have to question whether this is delivering against the bank's remit. If not, we need measures that enforce delivery against that remit. If the bank is operating within its remit, then I think it's time to rethink that remit and reorient it to support and grow Welsh businesses.

And, finally, Dirprwy Lywydd, this report is both, I think, a wake-up call and a road map. Now, it highlights pressing issues within the Development Bank of Wales and the broader business support ecosystem, while also offering practical immediate steps for improvement. As I said at the start of my contribution, it's on all of us here to be interested in how the development bank operates, it's on all of us to recognise the opportunity the development bank presents, and it's important as well that we all in this Chamber want to see it succeed, which, as a committee, we do.

Hefin David (Labour, Caerphilly)

Recommendation 12 was rejected by the Welsh Government, and I think the response from the Government makes clear the difference between a tailored review for a mature organisation—. And it seems that the Welsh Government doesn’t consider the Development Bank of Wales to be a mature organisation, and is, instead, doing a project assessment review. The Welsh Government, it says,

'intends to commission an independently led PAR on aspects of delivery and assurance provided by the bank in 2025. The ETRA report will be used to inform the terms of reference for a further PAR and will include elements of the recommendations within the Committee’s report.'

Can I suggest that the Cabinet Secretary liaises with the committee to develop that, as outlined in the Welsh Government’s response, given that the ETRA committee’s report has instigated the need for that?

The other issue—I had a meeting with the Future Generations Commissioner for Wales—could potentially be addressed in the context of the committee report, and I’d like to raise that now. The Development Bank of Wales is not covered by the Well-being of Future Generations (Wales) Act 2015 itself, but we understand that the development bank leadership is very supportive of that. The future generations commissioner has suggested to me that, in terms of the support the bank provides to Welsh businesses, a social value clause could be inserted into grant and loan agreements, which would align with the seven well-being goals of the Act, which to remind ourselves, are: a prosperous Wales, a resilient Wales, a more equal Wales, a healthier Wales, a Wales of cohesive communities, a Wales of vibrant culture and thriving Welsh language, and a globally responsible Wales. All of those things could be built into the bank’s ambitions.

The Welsh Government’s one-stop shop for business advice and support, Business Wales, has an economic contract that sets out how it will work with businesses in partnership to create resilient businesses that offer an attractive place to work. A social value clause under the auspices of the well-being of future generations Act could act in a way similar to this. Therefore, I’d like to hear if the Cabinet Secretary has any views on this, and whether she has had any discussions with the future generations commissioner about how his role, and the Act, and the piece of legislation, can support the bank to further deliver on the Welsh Government’s strategic policy objectives.

Samuel Kurtz (Conservative, Carmarthen West and South Pembrokeshire)

May I begin by thanking the committee Chair, Paul Davies, for his leadership of the committee, and the clerical staff and fellow committee members too for their contributions today? And I associate myself with the comments and contributions of all the Members of the committee who’ve spoken here today, because it is an opportune moment to hold this debate, over four months after the report was published, and a month since the development’s bank’s welcome response.

I wish, with your permission, Dirprwy Lywydd, to highlight a few recommendations, key recommendations, particularly recommendation 5, which proposes reassessing the relationship between the DBW and Business Wales, as has been mentioned on the floor of the Chamber this afternoon. FSB Wales have described a massively fragmented landscape of business support, which is far from ideal for businesses and business owners seeking assistance. I think recommendation 5 suggests that the Welsh Government should consider integrating the functions of Business Wales with those of DBW, and I eagerly await an update from the Welsh Government on any discussions or considerations regarding this matter.

Secondly, on recommendation 8, concerning the DBW’s independence from the Welsh Government, the recommendation urged the Welsh Government to instruct the bank to review its due diligence processes, with a view of strengthening them if necessary. This topic was discussed in committee last week, as was mentioned by the Chair of the committee, and I’m pleased that the bank’s October letter responded to the recommendations, stating that the bank generally meets or exceeds the processes carried out by other lenders. But I am somewhat uncertain whether the word 'generally' implies exceptions, so I would appreciate further clarification on that point. However, I do welcome the Welsh Government’s proposal to commission a public assessment review of the bank, which will include examining the due diligence processes. Indeed, this was the subject of my questioning of the bank during their annual scrutiny in ETRA last week, and I welcome, as the Chair mentioned, the enhanced due diligence that was mentioned by DBW.

And, finally, I’ll address recommendations 10 and 11 together, which concern complaints handling. Effective complaints handling, and achieving just and fair outcomes, are paramount. I don’t think there would be disagreement on that. However, it is concerning that some complainants have been reluctant to come forward publicly. Ever more troubling, Professor Dylan Jones-Evans provided evidence to the committee stating—direct quote—

'I've also seen instances...where directors have been imposed on businesses, where they feel they've been bullied by those directors, where there have been moves to basically get rid of the original founders. And the development bank as a funder has just stood there and done nothing'.

End quote. These allegations should fully justify recommendations 10 and 11, which advise that the issue of complaints handling be addressed within the recommended tailored review of the bank. Additionally, both the Welsh Government and the bank should consider how to collect businesses’ views confidentially and anonymously. This would be a significant step forward in gathering information about the bank’s practices without fear of retaliation. If implemented effectively, I believe these recommendations have the potential to strengthen trust within the Development Bank of Wales and better equip it to support businesses across the country. Because, as have other Members said on the floor of this Chamber, there is much good that is done in this field by DBW. I look forward to seeing substantial progress on the findings of this ETRA report, and once again I thank the whole team for their contributions towards it. Diolch, Dirprwy Lywydd.

David Rees (Labour, Aberavon)

I call on the Cabinet Secretary for Economy, Energy and Planning, Rebecca Evans.

Rebecca Evans (Labour, Gower)

Diolch. I’m grateful to the Economy, Trade and Rural Affairs Committee for their report into the work of the Development Bank of Wales. I really do recognise the value of the scrutiny, which I think has been clear in the contributions today. The majority of the recommendations made by the committee have been accepted, and it is good news for Wales that, as an organisation, the development bank has successfully delivered and continues to successfully deliver on its headline objectives.

Working to a clear remit, the organisation has benefited from the clarity and the stability that we’ve provided to it, allowing the bank to build strong working relationships with businesses and also to plan for the long term. Responding to Brexit, the pandemic, and more recently the cost-of-living crisis, the bank has demonstrated time and time again that it’s able to be agile and responsive, bringing solutions to policy and delivery ambitions.

Since 2017, the bank has invested £778 million in more than 3,900 Welsh businesses, supporting 41,700 jobs. That’s a total impact of £1.66 billion on the Welsh economy—real investment, real businesses, real growth, supporting businesses in every part of Wales. The bank has leveraged £531 million of direct private sector co-investment between 2017 and March 2024, multiplying the impact of public finance.

Because the bank is dealing in repayable finance, not grants, that public investment will, in large part, be returned and be made available to businesses again in the future, allowing our resourcing of the bank to stretch further and the overall value proposition to be multiplied yet again. The bank will be taking forward work to further understand the economic impact of the private sector investment that is induced by the bank’s investment.

Learning to effectively handle customer complaints or concerns is vital for all organisations. Finance can be complex, and I am aware that there are times when customers don’t understand the role of the bank or the obligations of the bank, and this can, regrettably, lead to misunderstandings and complaints. And I am aware that specific complaints were brought to the attention of the committee, and, where possible, I have familiarised myself with those, and I’ve had the opportunity to address concerns with officials.

It is the case, though, that founder members of companies are sometimes removed by their boards. The bank’s involvement is as a lender and a minority shareholder, and, as such, the bank’s rights are limited to those which are agreed with the company in the investment agreement and the articles of association.

Andrew RT Davies (Conservative, South Wales Central)

Will the Minister take an intervention? I have to say, I’m not overly familiar with this committee report, and I’ve sat in and listened to it. That is a severe criticism and observation provided by evidence to a witness to the committee, that people were imposed as mentors on companies and then founder members were removed. To say that it is common practice for boards to remove, when the evidence that the committee took showed that there was some doubt in the genuine reasons why members might have been removed—the original founders of the company—is very concerning indeed. You’ve said yourself that you have looked at some of these complaints. Do you believe that the complaints have merit to them and need further investigation?

Rebecca Evans (Labour, Gower)

I said that founder members are 'sometimes' removed by boards; I wouldn't go so far as to say that is commonplace. But I think the point here is that it's not understood what the role of DBW is in relation to these boards. The rights that I've just referred to are standard in the industry and they're in place to protect the public investment, providing measures of protection for the public funds that the bank invests. I am, though, satisfied that the bank has looked at the complaints. There have been some cases, to be fair, where the complaints have been brought to the attention of the committee, rather than appropriately through the complaints process to the bank. So, I would obviously encourage those who do have a complaint to raise with the bank to raise it directly with the bank.

The bank, though, has updated, I know, the committee on the changes that it is making to its complaints handling procedures, and it's been reflecting on the cases that have been raised and learning and developing over the overall approach. But, for a bank or an organisation working with over 3,000 customers, the overall number of complaints is actually comfortingly low. Overwhelmingly, customer feedback on the bank is positive, and I think that the committee would accept that too. The bank's most recent net promoter score of 91 is an exceptional achievement and it does indicate that the bank is engaging and performing well and is managing those customer relationships well, and that's something that the bank's commitment to a relational delivery model helps to underpin.

The bank does conduct stakeholder surveys using a third party to ensure that there's independence and where responses are anonymous. I do understand that the bank is giving some further consideration to increasing the frequency of this research and encouraging further engagement while continuing to gather feedback in a confidential way.

The bank has been active in supporting employee buy-outs alongside wider management succession funding. I know that's an important recommendation within the committee's report. The Wales management succession fund has supported £19 million of investment since 2017, enabling many businesses to stay owned and rooted in Wales. But I have been reflecting on this recommendation in discussions I've been having recently with Social Business Wales, and also with Cwmpas and with partners in the co-operative sector more generally, who are very interested in ensuring that those businesses that are considering what their succession plans are actually consider what the options are in terms of those social models as well, and that's something that I'm keen to pursue.

Luke Fletcher (Plaid Cymru, South Wales West)

Will the Cabinet Secretary take an intervention? Just briefly on evidence we'd received in our latest scrutiny of the annual accounts, the development bank referred to an upper limit to investment in individual businesses when it comes to that succession fund. Have you had an opportunity to look at that evidence? If not, could you please look at that evidence? Because I think there's a case here of perhaps looking at whether or not we can increase that limit, because there are examples of some companies that the development bank could be getting involved with, but, unfortunately, because of that limit that is on their ability to invest, it stops them from getting involved and thereby protecting a Welsh business that was viable otherwise.

Rebecca Evans (Labour, Gower)

I'm more than happy to explore the rationale behind the development bank's setting of that limit with them, to explore things from their perspective, but very happy to, as I say, take that forward.

So, in terms of other things the committee was interested in learning more about, one, I know, was about how the bank is supporting the development of community energy projects, and I am also keen to see what role the bank can play in increasing local ownership through investigating the use of the subsidy control for the £12 million local energy fund and also through engaging with private developers. So, again, I think that's a shared area of interest between ourselves and the committee.

In response to the report's recommendation on streamlining the wider offer to business, I would say that we have a strong business support infrastructure through Business Wales and relationships and links with the bank are working effectively. The focus and priority now, though, is on ensuring that all support services are delivering on our economic priorities, and it needs our collective focus, and that's where I want to see an organisational effort deployed.

In response to the committee's suggestion that we consider placing the development bank on a statutory footing, I think that speaks of the value that is placed on the bank and it recognises the long-term nature of the work that is undertaken. But, as noted in my response to the committee, I think that that is a question that is best returned to once we get the issues around the reclassification of the bank resolved. And I know that this is a priority in the discussions that the Cabinet Secretary for finance is having with the Chief Secretary to the Treasury, and nobody would like this to be resolved more than I would and I share the committee's sense of urgency in this particular matter.

And then, just to conclude, having taken a couple of interventions, Deputy Presiding Officer, to the committee's recommendation on due diligence, we have asked the bank to review their activities and they've done so and changes have been made. So, I'm glad that the committee has been updated on some of that work already. The bank does operate in accordance with regulatory requirements and their diligence generally matches or exceeds that carried out by other lenders. For example, alongside the due diligence undertaken to tackle financial crime and money laundering, and alongside the diligence undertaken via credit agencies, the bank has now strengthened its approach to internet-based searches designed to flag any potential reputational risk factors that might require some further consideration ahead of a deal being sanctioned.

Just finally, to conclude, I do have confidence in the leadership of the bank and the board, and next year we will work with the board to complete a tailored project assessment review of the bank, mirroring the approach that we took in 2021, and that was the last time such an external review was undertaken. I do expect to see that review consider the progress made on the actions agreed through the committee's report. And thank you again to the committee.

David Rees (Labour, Aberavon)

And I call on Paul Davies now to reply to the debate.

Paul Davies (Conservative, Preseli Pembrokeshire)

Diolch, Dirprwy Lywydd, and may I thank Members for taking part in this very important debate this afternoon? We've heard some really interesting contributions from Members today, as well as a constructive response from the Cabinet Secretary. I was pleased to hear examples of the good work being undertaken by the bank and support for the recommendations we put forward, which I believe will make it an even better institution. I'd also like to thank the Cabinet Secretary for her update on the classification issue, and I'm pleased that the Cabinet Secretary for finance is having further discussions on this issue. This is an area where the committee, of course, will continue to keep a watching brief.

Now, I didn't hear the Cabinet Secretary mention anything or give us an update on the project assessment review. I think it is important that this review helps the bank to ensure its complaints process works not just for its regulators but for the bank itself and its customers, including those it has rejected. I also look forward to hearing perhaps more from the Cabinet Secretary regarding the work to encourage anonymous feedback on the bank. This is an area that, again, might greatly help the bank to understand its customers and nip any issues in the bud in the future.

I was interested to hear the Cabinet Secretary's views on the complaints we have received regarding the development bank’s equity investments. As I mentioned in my opening remarks, we received these complaints anonymously, which has limited our ability to integrate them. Whilst the bank has refuted these claims, it is the duty of this committee to take these sorts of allegations seriously, because it only takes a brief look on a news website to find situations where allegations such as bullying have been made against other public institutions where, in some cases, they have been ignored, and, as we know, sometimes these cases do not end well in the long run. As I'm sure you'll appreciate, as Chair of the committee, I'll discuss what the other Members and the Cabinet Secretary have said in today’s debate with the rest of the committee, and we will make a decision on our next steps regarding these complaints in the very near future.

Now, I was interested to hear Members' views on the issue of due diligence. During our inquiry, we were pleased to see that, while the bank takes its strategic instructions from Government, it operates separately. However, it is important that it operates in line with the expectations the general public will have about the use of public funds, and this is why it must set higher fit-and-proper-person-style requirements for lending than the average commercial bank. As I said in my opening remarks, the bank seems to have taken this on, and I look forward to seeing the outcomes of their new approach in due course.

So, with that, Dirprwy Lywydd, I'd like to reiterate my thanks to the bank and its staff for engaging with this work. As I said earlier, I know it will not have been easy. I hope the outcomes will help the bank build on the broadly good job it is doing at the moment and improve its performance, which will, in turn, support further development of the Welsh economy.

So, in closing, may I thank all those who have taken part in this debate this afternoon? I want to reassure Members that the committee will continue to monitor progress against our recommendations and work with the Welsh Government and the bank to ensure the issues we have identified can be addressed, and that the bank can be put in the best possible position to deliver for Wales’s businesses and our economy. Diolch.

David Rees (Labour, Aberavon)

The proposal is to note the committee's report. Does any Member object? No. The motion is therefore agreed in accordance with Standing Order 12.36.

7. Debate on the Public Accounts and Public Administration Committee Report, 'Scrutiny of Accounts: Amgueddfa Cymru 2021-22'

David Rees (Labour, Aberavon)

Item 7 is next, a debate on the Public Accounts and Public Administration Committee report, 'Scrutiny of Accounts: Amgueddfa Cymru 2021-22'. I call on the Chair of the committee to move the motion, Mark Isherwood.

Mark Isherwood (Conservative, North Wales)

Diolch. The Public Accounts and Public Administration Committee's grateful for the opportunity to discuss our report on Museum Wales Amgueddfa Cymru's accounts for 2021-22, which raised serious governance issues that led to significant costs for the public purse. The committee's report was published on 26 June this year.

The Auditor General for Wales raised concerns in the amgueddfa's financial reports for 2020-21 and 2021-22. This led to significant public interest in the circumstances surrounding a series of disputes involving the organisation's former director general, former president and former chief operating officer. The auditor general's subsequent work exposed serious governance issues relating to the financial settlement with the former director general, the details of which are set out in his public interest report, which may interest Members.

Amgueddfa Cymru was also subject to a Welsh Government tailored review, whose report was published in July 2023 and made 77 recommendations, 27 of which related to governance. In his public interest report, the auditor general concluded that the settlement with the former director was 'novel' and 'contentious', an opinion the committee shared.

On 5 December 2022, Amgueddfa Cymru settled a series of claims made by the former director general of the amgueddfa. He submitted a complaint to the Welsh Government about the conduct of the former president of the amgueddfa in June 2021, alleging inappropriate actions and behaviour. However, the former director general had told auditors that he had raised concerns about governance with the Welsh Government and the former president since December 2020.

The dispute between the parties escalated over a long period, with the director general submitting grievances in September 2021 and January 2022, with claims eventually submitted to an employment tribunal in October 2021 and August 2022. The Auditor General for Wales concluded that Amgueddfa Cymru did not have adequate policies to deal with concerns and grievances of this nature. The arrangements in place only applied to employed staff and did not cover grievances raised by senior staff and involving a non-executive board member, such as the former president.

The committee was extremely concerned that the arrangements for dealing with complaints and grievances proved wholly unsatisfactory. The breakdown of relationships at a senior level was a foreseeable risk that should have been reflected in their policies and procedures. Whilst the committee were satisfied that seeking a settlement was preferable to proceeding to an employment tribunal, having reviewed the private legal advice shared with the committee, we were not satisfied with the rationale for the settlement figure arrived at, which was based on a notice period of 22 months, when the former director general's contract of employment specified only a 12-month notice period. Indeed, the Auditor General for Wales concludes that the amgueddfa had not been able to demonstrate that it acted in the best interests of the public purse.

At the time of the auditor general's public interest report into this matter, the total potential costs of the payment to the former director general were £325,698, with further external legal and professional costs of £419,915, meaning a total settlement of £757,613. This includes a payment made to the former chief operating officer, who retired on grounds of ill health. This is especially troubling in the current financial climate, when these costs could have been avoided had stronger governance arrangements been in place. The committee was saddened to hear about the financial pressures facing Amgueddfa Cymru, with around 90 jobs to be lost and a voluntary severance scheme in place.

Mark Isherwood (Conservative, North Wales)

The payments to, or in relation to, the former director general included salary and oncosts totalling £225,698 for the period between 17 November 2022, being the effective date the former director general ceased to discharge his duties save for six prior engagements, and 30 September 2024. It was also concerning that the framework of governance at the amgueddfa appeared to stall completely, with regular in-person meetings of the board of trustees not taking place between September 2021 and May 2022, and business being conducted by e-mail, in contravention of the rules governing the amgueddfa.

The committee was also concerned to hear about the ministerial advice provided to the former Deputy Minister for Arts and Sport at the time of the dispute, which did not set out the total value of the settlement. We concluded that the then Deputy Minister had been placed in an invidious position because of this, and that wider issues relating to ministerial advice require urgent attention.

Indeed, in this case, it was not clear what procedures applied for the Welsh Government's consideration and approval of the settlement for the former director general. This was because of inconsistency between the Welsh Government's calling-in procedures for its arm's-length bodies and their 'Managing Welsh Public Money' guidance, which has not been updated since 2018.

Given the significant breakdown in relationships that led to this settlement, the committee was concerned that the Welsh Government decided to appoint the former president of the amgueddfa to lead a review of Cadw, operating in the same heritage and cultural sector as the amgueddfa. Whilst the committee acknowledges the conclusion that the former president did not breach the Nolan principles, it was clear from the independent grievance investigation that some elements of the complaints against him had been upheld, either in part or in full.

A wider area of concern is the forthcoming change to the tailored review programme, with the Welsh Government's chief operating officer telling us on 14 December 2023 that this programme would be paused while it implemented a new self-assessment model. Whilst the committee were concerned about the deliverability of the Welsh Government's tailored review programme, which originally intended to review every eligible body during the term of this Senedd, but failed to do so, a move to a light-touch assessment approach could lead to similar issues occurring at other bodies.

The committee made 14 recommendations in total, with eight of those addressed to the Welsh Government, and the remainder to Amgueddfa Cymru. The eight recommendations to the Welsh Government included the following: notify the Public Accounts and Public Administration Committee when referrals are made by the Welsh Government to the Charity Commission in the future; clarify the processes within 'Managing Welsh Public Money' to address the disconnect between it and the calling-in procedures, as well as scenarios when it is, itself, an involved party; provide further information about the appointment process for the appointment of the former president of Amgueddfa Cymru to his role reviewing Cadw; update the committee once the roll-out of the new self-assessment model for reviewing arm's-length bodies is concluded; provide more information about the financial support being provided to Amgueddfa Cymru to protect National Museum Cardiff; and review the grievance policies at all of its arm's-length and sponsored bodies to ensure that they're robust and fit for purpose.

The Welsh Government accepted five of our recommendations fully, but accepted two in principle only, including the recommendation about the former president of the amgueddfa's appointment to the role reviewing Cadw. This is concerning, when the previous Permanent Secretary previously gave the Public Accounts Committee a commitment in January 2018 to end this practice in light of members' concerns that acceptance in principle did not constitute an adequate response. It remains our opinion that it still fails to constitute an adequate response.

The Welsh Government rejected one recommendation relating to a review of the grievance policies at other similar organisations. The Welsh Government explained that these policies are the responsibility of the individual accounting officers at those organisations, and that the Advisory, Conciliation and Arbitration Service provides support to such bodies on disciplinary and grievance procedures. They also cited significant staff costs as a barrier to implementing this recommendation. The committee was surprised by this response, given the demonstrable failure of the grievance policies and procedures at Amgueddfa Cymru, which led to significant costs to the public purse. We urge the Cabinet Secretary to reconsider this response.

Whilst we acknowledge the potential staff costs associated with implementing our recommendation, we feel there's a clear need for a more interventionist approach from the Welsh Government, to mitigate the risks of a similar situation reoccurring. This could include more robust guidance being issued, or an offer of support to bodies who have concerns and wish to redesign or review their policies.

The remaining six recommendations were addressed to Amgueddfa Cymru, and included a request for further information on their grievance procedures, the implementation of the recommendations of the tailored review, and the amgueddfa's workforce plan. Their response confirmed that the amgueddfa had now introduced a new early-resolution scheme to its grievance procedure, which was developed in conjunction with the Welsh Government’s sponsored bodies team and shared with the committee. They also provided a copy of their workforce plan and set out some further information about their change programme, Shaping our Future, which is tasked with managing a full restructure of the organisation, reducing their operating costs, and boosting profitability through income-generating activities.

The committee is satisfied that the amgueddfa has responded to this regrettable situation and is now in a better position to deal with a similar situation in the future. However, the committee remains unconvinced that lessons have been learned across the wider public sector in light of these issues, and we're concerned that a similar situation could occur elsewhere without more robust intervention from the Welsh Government. These risks are exacerbated by the introduction of the self-assessment review model, as I outlined above, which could lead to major issues at public bodies not being addressed until significant damage occurs.

The committee will be scrutinising the Welsh Governance's oversight of its arm's-length and public bodies with interest. We encourage our equivalent policy committees to do likewise, given our concerns. Diolch yn fawr.

Adam Price (Plaid Cymru, Carmarthen East and Dinefwr)

Clearly, the national museum, Amgueddfa Cymru, is one of our most important national institutions. It's the institution that helps us tell our national story, and I think it clearly is the case in any nation, that the way that we preserve our past and the way we structure and support the institutions that help us do so, if we get that wrong, then how can we shape our future? So, culture is the key, often, and when something goes wrong with our cultural institutions, then that should be a core concern for our politics.

And it has to be said that what we've just heard from the chair of the PAPA committee, I think, is a great cause for concern because it raises some serious questions about systemic failure, both within the national museums, but also, I think, in terms of the Welsh Government's wider responsibilities. But it does raise broader questions, which I think are relevant to the governance of the public sector and all arm’s-length bodies, and I do want to talk about those in a second.

The picture that has just been painted for us—it's a pretty dire one, isn't it, really? We had here, essentially, a prolonged internal dispute, persistent conflict, serious disagreement between senior management and trustees, which resulted in the paralysis, over many years, of decision-making processes. We had the delegation of critical decisions such as financial settlements to a limited subset of trustees. We had the use of e-mail only for decision making, board meetings without minutes, et cetera. This had a pretty negative impact. We've heard the £750,000 it actually cost directly, but think of the thousands of hours, probably, that went into this situation. We had delayed financial reporting. The fact that we're discussing here, in November 2024, the accounts from 2021-22 in itself, I think, captures that. We had obviously weak systems for dealing with internal grievances and whistleblowing, which reflect a wider problem in terms of organisational dysfunction at the heart of the institution.

But the Welsh Government has to also accept its responsibilities here. Despite their awareness of serious failures of governance since, I believe, 2020, the Welsh Government's intervention lacked timeliness, lacked transparency, and allowed it to fester, and that was the wrong approach. Then, afterwards, I think there are legitimate questions raised by the committee in terms of was it the right thing, in terms of public perception, to then appoint the former president of Amgueddfa Cymru—. I'm not wishing to litigate the issues of substance that were at the heart of the disagreement, but in terms of public reputation, was it right to appoint the former president to a role leading a task and finish group in the heritage sector, following this dispute, and then, as the Chair has just said, to draw the conclusion, in public policy terms, that the thing to do after this sorry tale is then to move to a light-touch system of regulation of arm's-length bodies, to move to self-assessment? Surely we should be going in the opposite direction. What we need to have is more rigorous auditing, overview and oversight of public sector bodies.

Because it's not just the problems here in Museum Wales. Remember the leadership crisis in 2017 in Sport Wales and the dysfunctionality that was shown there; the financial mismanagement and the repeated audit qualifications that led to the resignation of the chair of NRW in 2018; the issues in terms of the forced resignation of Betsi Cadwaladr's board; the auditor general's review of the fire authorities in Wales, showing the weak accountability structures there. We have a general problem, I think, in terms of governance in the public sector, and that is eroding public trust, which means that public services cannot be delivered in the way that they should be, and so we need to strengthen the governance frameworks. We need not a system of self-assessment, but we need more rigorous audit from the Welsh Government's public bodies unit.

We need to look at more diverse boards. There is a theorem in public sector governance, 'diversity trumps talent'. I'm not sure about the middle word in that, but there is strong evidence that if you have a diverse board, you get a better functioning board. You need skill-based appointments as well, so you're not just choosing from a small reservoir, a small group of talent, but you're actually seeking to have the widest and most diverse group, because those are the most effective boards, and if we do that then I think we might be in a position to avoid some of the problems that I've just described.

Natasha Asghar (Conservative, South Wales East)

I'd like to start by thanking the committee clerks, fellow Members, the Chair, and those who contributed and helped put this report together. I do wholeheartedly agree with Adam Price. Our culture and arts industry, alongside history, are vital assets to Wales, and I honestly believe that we owe it to our younger generations and the people of Wales at large to prioritise the maintenance and upkeep of facilities such as those of the national museum in Wales. It is because of this belief that I stand by the notion that competent governance at organisations such as Museum Wales is so important. We know that the committee's report comes within a wider background of recent cuts to the national museum's budget under Vaughan Gething's previous leadership, which as we all know led to serious discussions and concerns about the potential closure of the national museum in Cardiff. At the end of last year, we also heard about severe funding shortages, which predated these cuts, resulting in a £90 million repair backlog, covering all of the museum sites and urgent works totalling £25 million at the national museum in Cardiff alone.

This wider context of funding shortages and difficult decisions, as with many public sector organisations, make the report and its findings all the more difficult to read. As we know, the auditor general's report delves into detail, highlighting firstly that Museum Wales did not have adequate policies in place to deal with concerns raised by senior officers; secondly, that the employment dispute adversely affected their governance arrangements between September 2021 and November 2022; and thirdly, the legal costs were just shy of £420,000 to simply resolve a dispute. That figure does not take into account the amount spent on a settlement agreement, the cost of which the auditor general referred to as, and I quote, 'novel, contentious and repercussive'. It is therefore shocking to me that the Welsh Government rejected recommendation 3 of the Public Accounts and Public Administration Committee report, which advised the implementation of a system to review grievance procedures at arm's-length and sponsored bodies to ensure that they are robust and fit for purpose. So, with this in mind, Cabinet Secretary, considering the severity of both the committee and auditor general's concerns, could you please outline in your response what steps the Welsh Government has taken to ensure that appropriate support and guidance, as well as advice, has been given to the national museum of Wales in terms of grievance policies to ensure that a situation like this never ever happens again?

I am aware that we have limited time, Deputy Presiding Officer, but I wanted to refer to one of the recommendations before closing. Recommendation 8 refers to the appointment of the former president of Museum Wales to a new role reviewing Cadw. The recommendation itself advises the Welsh Government to provide the committee with the circumstances in which the former president was appointed to the role and a timeline for that appointment. Whilst it was, and I quote, accepted in principle, I believe that the justification of the recruitment for this role at Cadw being time-limited and his capacity in the task and finish group not being classed as a public appointment are quite frankly weak arguments, considering the context of the gravity of this dispute. And I believe that it would be beneficial for the Cabinet Secretary to also outline what discussions were taken within the Government prior to this appointment about the risks and whether other board members within Cadw at the time were consulted on their thoughts about whether this was an appropriate appointment, given that the work required was, indeed, alongside the former president.

To conclude, Deputy Presiding Officer, we often hear a lot about lessons being learned, but I sincerely hope that this is not just lip service. This industry, the governance within it and the ongoing financial hardships are too grave to make such financial losses on disputes that could have clearly been managed differently and, perhaps, even prevented. With the Welsh Government having arm's-length oversight, there is a responsibility here, Deputy Presiding Officer, to support and advise organisations such as Museum Wales in the recruitment of senior board members and executives and to actually learn from these lessons so that taxpayers always receive value for their money and to avoid future disputes for the overall future operation of this very important organisation. Thank you.

Heledd Fychan (Plaid Cymru, South Wales Central)

May I thank the committee for their work in this area? I would like to declare that I was employed by Amgueddfa Cymru up until April 2021. So, although it isn't a period that's entirely relevant to this, I think it's important that I place that on the record, and obviously I know a number of the individuals involved. And it saddens me. It's an organisation that I'm passionate about. As Adam Price outlined, it's extremely important for us as a nation. This is a very important report and a sad reflection and a very sad chapter, not only in the history of Amgueddfa Cymru but also the Welsh Government. One of the things that I'm very dissatisfied by is the Welsh Government's response, which more or less suggests that this whole process is Amgueddfa Cymru's fault entirely. However, if you look at the committee's report, it is clear that lessons need to be learned by the Welsh Government.

Heledd Fychan (Plaid Cymru, South Wales Central)

I would like to associate myself with the comments of Adam Price in terms of Welsh Government sponsored bodies and appointments. We need transparency, we need consistency. What is clear here is that, even though the role of the president, or now chair of the board, is one appointed by the Welsh Government and it's one that we as a Senedd will now have a say on, when things go wrong, it seems to be up to the organisation in question. It's almost a hands-off approach, and yet the processes were not in place. And I am sorry to see that a number of the lessons that came out from Sport Wales seem not to have been learned. So, exactly the point made by Natasha Asghar in her contribution: we can't keep saying that these kinds of things need to be sorted.

I also have huge concerns, as Adam Price mentioned, in terms of the diversity of boards. We do see the same faces pop up on different boards. I am grateful to the committee for emphasising and making recommendations in relation to the appointment of the former president to the new role reviewing Cadw. That does raise serious questions in terms of not that individual in question, but the processes, because in any other instance where there are complaints, you would expect that the Welsh Government would take a neutral stance whilst those investigations are going ahead. To appoint someone to be working in the same sector when this dispute is going ahead does seem to indicate that the Welsh Government are taking a non-neutral stance. And that, for me, is not right, and must be looked at.

We do need to look at Welsh Government sponsored bodies. The inconsistency in terms of which trustee roles are paid, which aren't, and so on, means that it's not diverse, it's not an equal playing field in terms of who gets on these boards, who represents us, who helps shape our organisations. I wish every Senedd Member would read this report. I wish every Senedd Member would also read the Welsh Government's response. I hope the Welsh Government has learnt lessons, and that those may not be reflected in the Government response, but that lessons have been learned, because it's not adequate.

I would like to see officials also reconsider recommendation 3. I don't accept that that should have been rejected. There is a role for the Welsh Government. So, I'm grateful to the committee, but there is so much further work to do, and I hope to hear in the Minister's response a reflection on what the Welsh Government has done, not just what they've been encouraging Amgueddfa Cymru to do.

David Rees (Labour, Aberavon)

I call on the Minister for Culture, Skills and Social Partnership, Jack Sargeant.

Jack Sargeant (Labour, Alyn and Deeside)

Diolch yn fawr, Deputy Presiding Officer. Can I start by thanking the committee for the report, in particular the Chair, Mark Isherwood, for his leadership of the committee during this very difficult time and all of the other things the Chair has gone on to do, and to everybody who has contributed to this discussion today?

I should say from the outset, Chair, that I very much welcome the work of the committee and the future work of the committee and the scrutiny of the committee with my portfolio and perhaps on the roll-out of the self-assessment model that the Chair and others have raised concerns with today. You could hear the passion in the response from all Members for Amgueddfa Cymru. Adam Price was right to point to it being one of the most important institutions to the nation. It's one the most treasured cultural organisations, and the events outlined in this report do represent an extremely challenging time in its history. Whilst I was not directly involved during this difficult time, I am confident that lessons have been learned and that the work undertaken by the committee, as well as the report published by the Auditor General for Wales, have played an important part in this process.

I was pleased that the committee was satisfied that the decision to attempt to achieve a settlement instead of proceeding to a tribunal was the right course of action, noting the Chair's and the committee's response to the settlement. However, I understand that the decisions were made to resolve matters and enable all parties to move forward whilst avoiding greater cost to the public purse. The Cabinet Secretary for Culture and Social Justice, Trefnydd and Chief Whip provided a response to the committee's report back in August. She noted that the committee had highlighted areas we had identified as priorities and where progress was already being made. As the Chair pointed out, of the eight recommendations for the Welsh Government, we accepted five in full and two in principle.

We did not accept the recommendation related to reviewing each of our arm's-length sponsored bodies' grievance policies, which is the responsibility of individual accounting officers. There is already a statutory code of practice from ACAS, and they must follow a full and fair procedure in line with the code of practice for any discipline or grievance cases. We are continuing to review and update our policies and processes to help mitigate the risk of similar issues arising in the future. Since issuing our response, the Permanent Secretary has written to the committee outlining the approach being taken to update 'Managing Welsh Public Money'. Officials will be prioritising the essential elements within this document that require immediate attention, and as chapters are updated, they will be issued. We're aiming for a comprehensive review of the entire document to be completed by December 2025. And as stated in our response, Llywydd, the updated document will include clarifying processes to address scenarios where the Welsh Government is an involved party.

Work is also continuing on our guidance for raising a concern or complaint against a chair of a public body, on the roll-out of the self-assessment model for reviewing arm's-length bodies. We will keep the committee updated on these important pieces of work. In response to the report, we also agreed that our future referrals to the Charity Commission will be communicated to the committee and to the auditor general. The chair and chief executive of Amgueddfa Cymru have written to the committee responding to the recommendations relevant to them. Last month I had the opportunity to meet with them to discuss their vision for Amgueddfa Cymru's future and the role that it can play in supporting the priorities for culture and the Prif Weinidog's priorities. We continue to work in partnership with Amgueddfa Cymru in responding to the 77 recommendations made by the tailored review. Sixty of those recommendations are now either requiring no further action or are incorporated into plans as business as usual. The remaining 17 recommendations—the majority of those will be completed or in plans as business as usual by March 2025.

Governance reform is a priority for Amgueddfa Cymru's chair as she continues to respond to the tailored review and build a strong foundation for the future. This includes introducing a new committee structure for the board and reviewing key governance documentation. I do take on board, Chair, the points raised by Heledd, Adam and others around the diversity of boards, and this is an area that we could all do more on and we are all committed to doing so.

The committee also referenced in its report the budgetary pressures that faced Amgueddfa Cymru during this financial year in particular. As we know, this has been a very tough year for all of our cultural organisations and there is no simple solution to fix their current financial challenges. Since the committee's report, Llywydd, we have made a further £940,000 investment in terms of revenue funding available to Amgueddfa Cymru, which it is using to rebuild following the recent restructure, to help it become more sustainable for the future and to strengthen its governance arrangements. We have also made funding available for critical works at the National Museum Cardiff, and once the Welsh Government's draft budget for 2025-26 has been agreed, we'll be liaising with the museum regarding its budget for the next financial year.

Llywydd, our draft 'Priorities for Culture 2024–2030' sets out our priorities and ambitions for the next five years. We won't hold back on our ambitions for the sector. My ambition is that every person in Wales has the right to access, to curate, to participate in and to see themselves reflected in the cultural activity of the nation. Amgueddfa Cymru has a key role in helping to fulfil this and I'm committed to helping it thrive as an organisation. I have been assured that lessons have been learned and that challenges are being taken forward. Again, I'm grateful to the committee for their work on this report and do look forward to further scrutiny from the committee in the coming months ahead. Diolch.

David Rees (Labour, Aberavon)

I call on Mark Isherwood to reply to the debate.

Mark Isherwood (Conservative, North Wales)

Diolch. Thanks to everybody for their contributions. Adam Price, as you said, Amgueddfa Cymru is one of our most important national institutions and it's therefore a core concern if something goes wrong with one of these. You highlighted that this raises broader questions about the governance of the public sector and arm's-length bodies and that Welsh Government also has to accept its responsibilities here when it became aware of serious governance issues but allowed them to fester. As you said, to then move to self-assessment of public bodies is wrong, when this has, instead, illustrated the need for more rigorous audit controls.

Natasha Asghar again referred to the background of wider funding shortages at amgueddfa, the lack of adequate policies being in place, the impact of the Government's arrangements and the high cost to the public purse. She stated, quite rightly, that it is shocking that the Welsh Government rejected our recommendation of a review of grievance procedures at other similar bodies. And she asked what discussion there has been in the Welsh Government about risks applied to the appointment of the former president to the role of reviewing Cadw.

Heledd Fychan, as you said, lessons need to be learned. We need transparency and consistency. You referred to the Welsh Government's hands-off approach when these things need to be sorted, and to stop seeing the same faces popping up on boards. You concluded that you hoped that the Welsh Government has learned lessons not reflected in its response.

The Minister for Culture, Skills and Social Partnership rightly stated that Amgueddfa Cymru is one of our most treasured cultural organisations. He referred to progress being made, but then to only accepting five of the committee’s recommendations, which fails to provide the assurances that we seek and the public needs to hear. He did say that work is progressing, which the Welsh Government will keep the committee aware of, and that he has taken on board the points made about the diversity of boards and budgeting pressures. He concluded that lessons do have to be learned and challenges taken forward.

I will just conclude by repeating a couple of lines, however, in my speech, when I referred to the acceptance of two recommendations in principle only, including the recommendation about the former president of the amgueddfa’s appointment to the role reviewing Cadw. This is concerning, when the previous Permanent Secretary previously gave the Public Accounts Committee in the last Senedd a commitment to end this practice in light of Members' concerns that 'acceptance in principle' did not constitute an adequate response. We hope and trust that that is still the Welsh Government’s position. As I have mentioned before, in leading debates in this Chamber in this capacity—. I have emphasised that we need the Welsh Government to revisit that and revisit the reasons why, in 2018, it then felt that that was the appropriate position to take.

David Rees (Labour, Aberavon)

You need to conclude now, Mark, please.

Mark Isherwood (Conservative, North Wales)

As I concluded, the committee will be scrutinising the Welsh Government's oversight of its arm's-length and public bodies with interest, and we encourage all other equivalent policy committees to do likewise. Diolch yn fawr.

David Rees (Labour, Aberavon)

The proposal is to note the committee's report. Does any Member object? No. The motion is therefore agreed, in accordance with Standing Order 12.36.

8. Welsh Conservatives Debate: Agricultural property relief

David Rees (Labour, Aberavon)

Item 8 is the Welsh Conservatives Debate: agricultural property relief. I call on James Evans to move the motion.

James Evans (Conservative, Brecon and Radnorshire)

Thank you, Deputy Presiding Officer. I move the motion tabled in the name of my colleague Darren Millar. Today we in the Conservative Party stand shoulder to shoulder with our farmers and propose that this Senedd calls on the UK Labour Government to reverse its damaging decision to impose what has rightly been called the family farm tax. These changes to agricultural property relief and business property relief will have profound consequences for Welsh farming, rural communities and our economy.

Farming is the pillar of the Welsh economy. Agriculture contributes £1.6 billion annually to our economy and directly employs over 50,000 people and many more jobs are supported indirectly in supply chains, food production and retail. Yet the changes to APR and BPR threaten to undermine this critical sector. Currently, APR provides 100 per cent relief from inheritance tax for qualifying agricultural properties, and BPR offers similar relief for business-related assets not covered by APR. These reliefs allow farming families to pass down their businesses without facing punitive tax bills that could force them to sell off land, buildings and machinery to meet their obligations.

APR is not a loophole. It’s a specifically designed policy introduced in the Inheritance Tax Act 1984, protecting Britain’s family farms from being sold and broken up, ensuring our food security across the United Kingdom. Labour's proposed changes to cap the full APR at £1 million and reduce relief to 50 per cent on assets above this threshold on paper may seem reasonable, but, yet again, Labour have got their numbers wrong. In practice, it will devastate family farms, many of which far exceed the threshold in asset value, but operate on minimal cash flows and tight profit margins. To put these figures into perspective, a typical 200 acre livestock farm in Wales may have an asset value of £1.5 million to £2 million. While this may seem high, it does reflect the rise in price of agricultural land, which currently sits at £8,000 to £10,000 per acre. It doesn't represent the farm's profitability. Under these proposed changes, the additional tax burden could easily exceed £200,000 for a farm of this size. For families inheriting that farm, this would likely necessitate in selling off land, buildings, taking out unsustainable loans or breaking up the business entirely. This Government here, and the Government in Westminster, presumes that assuming that owning a farm equates to wealth. This is a fundamental misunderstanding of farming economics. Most farms are asset rich, but are cash poor. The high value of land is offset by the extremely low return on capital—just 1 per cent per annum on average.

James Evans (Conservative, Brecon and Radnorshire)

These changes also are a significant threat to our tenant farming sector in Wales, which accounts for about 30 per cent of agricultural land in Wales. Approximately half of this is let under farm business tenancies, which can be reclaimed by the landowner at the end of their fixed period. The changes to APR reduce the tax advantages of owning land, incentivising landowners to sell off or repurpose their assets, rather than rent them out, and, as most people know, that equates to just planting trees, losing productive farmland. Young farmers and new entrants who often rely on rented land to start their careers will be disproportionately affected at a time when we should be encouraging the next generation into agriculture. This policy creates barriers to entry and reduces the opportunity for growth.

But the broader economic implications of these changes cannot be ignored. Agriculture underpins the food and drink industry in Wales. It's Wales's largest manufacturing sector, worth £7 billion annually. Undermining farms risks destabilising this entire supply chain completely. Food security is an increasingly urgent issue. The UK imports around 40 per cent of its food, leaving us extremely vulnerable to global supply chain disruptions. Family farms across Wales play a pivotal role in maintaining domestic food production and reducing resilience on imports.

Now, let's turn to the amendments to this motion, and the amendment proposed by the Government. You seem to reframe this whole issue, blaming previous UK Conservative Governments for fiscal challenges. However, this attempt to justify this policy yet again here ignores the damage it will cause to Welsh farming. Yet again, here in Cardiff Bay, blaming somebody else and not taking any accountability for what they've done. Amendment 2, proposed by Heledd Fychan, calls for a further assessment of this policy. We will be supporting this amendment. While it's important that we understand the consequences, we already do have ample evidence across the sector to show that this policy will harm farming businesses across the country. I don't think delay is an option currently—action is needed now.

Deputy Presiding Officer, this family farm tax is, yet again, a short-sighted harmful policy that risks irreparable damage to Wales's farming sector, and not just here in Wales, but right the way across our United Kingdom. It misunderstands the economic realities of farming. It undervalues the cultural importance of the family farms, supporting the Welsh language across our country. And it ignores the broader consequences for rural communities and food security. But, Deputy Presiding Officer, it's not to be expected, is it, from Labour? This is another key in their class war against working people. They've taxed business, they've taxed working people and now they're taxing farmers. They even want to tell people where they can and cannot send their kids to school. It's yet again this Government supporting a Government in Westminster waging a class war against working people. Support our motion today, and let's send a clear message to Westminster: enough's enough, time's up already, and it's time for a change.

David Rees (Labour, Aberavon)

I have selected the two amendments to the motion, and I call on the Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs to move formally amendment 1, tabled in the name of Jane Hutt.

Huw Irranca-Davies (Labour, Ogmore)

Formally.

David Rees (Labour, Aberavon)

And I call on Llyr Gruffydd to move amendment 2, tabled in the name of Heledd Fychan.

Llyr Gruffydd (Plaid Cymru, North Wales)

Thank you very much, Dirprwy Lywydd. For the purposes of transparency, I should say that I don't have land to leave to anyone, nor do I expect to receive any land as an inheritance, but I have children who may receive such an inheritance in future.

Llyr Gruffydd (Plaid Cymru, North Wales)

Now, there has been uproar, obviously, around this policy, firstly I suppose because Labour promised in opposition that they wouldn't introduce a change of policy, but then of course they did so in their very first budget. But it was also announced abruptly, with quite an imminent introduction as well, and that has left next to no time, of course, for many, particularly the very oldest farmers, to put their inheritance in order.

But there has also been uproar because, of course, it's an indiscriminate policy. It doesn't differentiate between land that's working, food producing, family farms, and land that has purposely been purchased by some of the richest people in society in order to avoid paying tax on their wealth and assets, and that's why Plaid Cymru supports this motion. Now, that doesn't mean, of course, that those richest, very richest, asset holders shouldn't pay their fair share, but it does mean that we shouldn't be risking the future of working family farms. They eke out a living from their land, making a tiny return on their land: average incomes of around £18,500 for livestock farmers in Wales, and they work 60 to 70 hours a week. That's minimum wage territory, isn't it? And they're the people who put food on our tables, who strive to provide this country with the food security that we all want to see. They deliver on agri-environment schemes, and, of course, as we've heard, they underpin the social, cultural and linguistic fabric of communities the length and breadth of Wales.

Now if the UK Government had given older farmers time to make arrangements, or had they introduced a much more targeted approach that didn't undermine the future of many of our ordinary family farms here in Wales, then I'm sure the discussion around this change to agricultural property relief would be very different. But they didn't, did they? And that's why we're supporting this motion today.

Now, we will nevertheless be asking Members to support an amendment to add an additional call on both the Welsh and UK Governments to undertake a detailed assessment of the impact of the tax changes on agricultural businesses for the very purpose of helping us to understand the impact it's likely to have on the sustainability and viability of family farms in Wales.

I don't want to see our struggling family farms having to sell off parts of their farm to pay the inheritance tax and, as a result, become less viable as a farm business for the next generation. Yes, make sure that the billionaire landowners like James Dyson and the Duke of Westminster pay their fair share, but, in doing so, don't undermine the honest, hard-working family farms in this country who provide so many of the services that society these days, I'm afraid, take for granted. Diolch.

Russell George (Conservative, Montgomeryshire)

The family farm tax on farming businesses is misguided and ill thought out, and will only lead to lasting damage to Welsh farming and the break-up of family farms. But the tax will also leave farmers with a lack of confidence as well to invest in the future of their businesses. I think what is incredibly disappointing is that Labour Ministers here are more concerned about standing up for their own party in Westminster than standing up for rural communities here in Wales. And when it comes to the number of farms that are affected, we've heard all sorts of figures from different departments within the UK Government. I think the latest figure is that the wealthiest 500 estates each year will only be paying the farm tax. But, of course, the NFU and the CLA—and I much prefer to believe their figures than the figures coming out of different departments of the UK Government at the moment—estimate that up to 70,000 farms will be affected. And whilst the Labour Government here claims that the new £1 million threshold means that three quarters of farms will not be impacted by the change, of course we hear from the farming unions that that is an underestimate and that up to half of all working farms, possibly more, could be affected by the new tax. And the figures Treasury is using do not accurately reflect the impact of these changes on rural communities. They claim less than 25 per cent of businesses will be affected, but I would say that is a significant miscalculation. I'd be interested, though, because the Welsh Government, I would hope, would have its own figures as well, and they may be different to the UK Government's figures, depending on which department they are speaking to.

But I think Labour Ministers here either do not understand how farming businesses operate, or they do understand, but they're willing to see the demise of the industry.

Huw Irranca-Davies (Labour, Ogmore)

Will he give way on that point?

Russell George (Conservative, Montgomeryshire)

Absolutely.

Huw Irranca-Davies (Labour, Ogmore)

Do you contradict the factual analysis from Treasury that, in 2018-19 to 2021-22, 47 per cent of the benefit of the reliefs went to the top 7 per cent of estates making claims, or their analysis of those, who are investors in the alternative investment market shares model, they're not farmers with mud on their boots? So, do you dispute those figures?

Russell George (Conservative, Montgomeryshire)

Huw, the point that I'm making is that the UK Government departments—. We have different figures from whichever department that we're speaking to. Treasury says one thing and DEFRA says something else. This is the issue. This is the point that I'm making: if the UK Government itself can't get the number of farms affected right then we're in a real mess, aren't we? And what I'm asking you is—and I hope you can respond to this in your closing remarks—what your figures are. Which department's figures do you accept?

Now, we saw last week tens of thousands of farmers descend, didn't we, on London and of course that matches the anger and frustration of farmers that turned up here in February as well. The mantra was 'No farmers, no food', and that is something that really breaks the issue down to something that we should all really understand. If we have no farmers, or a reduced level of farmers, we are more reliant on food suppliers from outside Wales and outside the UK. And we saw the impact during COVID that that had on supply chains, and we know of the effect that the war in Ukraine had on food supplies as well. So, we absolutely need to make sure that we have—

David Rees (Labour, Aberavon)

You need to conclude now, Russell, please.

Russell George (Conservative, Montgomeryshire)

—good resilient farms in Wales and make sure we are supporting those farmers for the long term. So, I'd certainly hope that Members across this Chamber will support our motion today and will vote to make sure that this damaging farm tax is reversed, because if we don't do that we'll see the demise of farms and farming communities right across Wales.

Laura Anne Jones (Conservative, South Wales East)

Here on this side of the Chamber, the Welsh Conservatives, we all are dead against this unfair and cruel family farm tax. Last week, I had the privilege of visiting Raglan livestock market. There, I met with local farmers who spoke to me about the devastating impact that the changes to inheritance tax announced in this Labour budget will have on family farms across Wales.

Farmers are not a group that frequently take to the streets in protest. [Interruption.] They're a peaceful, hard-working community that spend their days working hard to put food on your tables and preserve the rural landscapes that we cherish. Yet, last week, thousands of farmers, including some from Monmouthshire who I met at the market, felt compelled to leave their farms and travel to London to raise their voices in a peaceful protest about the severe threat that these changes pose to their livelihoods.

At the heart of their concerns was the removal of inheritance tax exemptions for working farms. This exemption is not a loophole; it is a lifeline. It is vital to ensure that small farms keep producing food. It enables farms to be passed down through generations, and, if it's taken away, the sons and the daughters working the land alongside their parents will face tax bills running to thousands of pounds. For most family farms, this will mean selling up just to pay the taxman and handing over farms to large companies.

I spoke to one farmer at the market whose story was typical, unfortunately. He was born during the war. He was inspired by post-war rationing to go into farming. He started a rented plot, worked tirelessly over decades and gradually extended his land, increased his herd, built his farm, created a home and a business for his family. For more than 50 years, he poured his life into that farm alongside his wife, his sons and daughter. They have worked the land with him on the basis that, one day, it would be passed on and the family farm would continue. But now those plans have been destroyed, and the pain and the worry was evident on his face. But this isn't just one man's story; it's a similar story for thousands of farms and family farms across Wales. The loss of family farms will devastate our rural community, weaken our food security, and open the door for large corporations and energy companies to buy up land for wind turbines or solar farms.

Last week, in solidarity with the farming community and at the request of farming unions, I joined my Conservative Members in wearing boots to the Senedd, but gestures aren't enough. We need action. We need this Welsh Labour Government to stand with farmers and stand up to the UK Labour Government. We need rural MSs and MPs of all parties to stand with farmers and oppose these rushed-through, ill-thought-out tax changes.

My MP in Monmouthshire stood at a hustings in Raglan market and promised to support farmers. Cabinet Secretary, she brought you around to the livestock market before the election, and, facing election, you both promised that Labour would listen to and support Welsh farmers. So, today, I ask you, on behalf of those farmers that you spoke to before the election, I ask you on their behalf to honour those promises that you were happy to make when you wanted to appear in photographs with them during the election campaign. Most of our family farms—

David Rees (Labour, Aberavon)

You need to conclude now, please.

Laura Anne Jones (Conservative, South Wales East)

Most of our family farms are, as has been said, asset rich and cash poor. This punitive family farm tax will be destroying the lifeblood of Wales and our rural communities, and any dream of a sustainable nation producing Welsh food from Welsh land will be unattainable. I urge you all to support our motion today. No farmers, no food. Diolch.

David Rees (Labour, Aberavon)

I call on the Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs, Huw Irranca-Davies.

Huw Irranca-Davies (Labour, Ogmore)

Thank you, Dirprwy Lywydd. First of all, thank you for the opportunity to discuss the changes to inheritance tax on agricultural property. We know that this is an issue that is retained as a responsibility of the UK Government. I understand that many members of the farming community are concerned about the changes to agricultural property relief. I have listened to these concerns and have had constructive conversations with farming unions. Following my discussions with those farming unions about the changes to agricultural property relief, I have asked the UK Government for pledges, and have had a promise that they will listen to the farming unions and that the unique circumstances of Welsh farmers will be considered.

It's important to remember the context behind the UK Government's decision, namely the grave need to deal with the black hole of £22 billion in the public coffers caused by the economic chaos of the previous Conservative Government, and the changes made to public services. Those are the exact same public services that every farmer uses and depends on, including schools, roads and hospitals and so on.

Huw Irranca-Davies (Labour, Ogmore)

And it's also important to note it is crucial that we avoid speculating on the potential impact of the change by trying to value farms, due to the many complex factors that are involved. Farm ownership structures, inheritance plans, applicable reliefs—they vary widely, and farm values fluctuate too, making it difficult to estimate how many farms might be valued over inheritance tax thresholds at any given time. So, for example, Dirprwy Lywydd, the effective minimum tax-free allowance for the typical owner of a farm passing it onto their descendants will be up to £1.5 million, up to £3 million for couples, and unlimited if they gift on at least seven years before they pass away. And as such—[Interruption.]—I will give way in a moment—relying solely on asset values can be misleading, and, as we know, the HM Treasury analysis states that it is indeed a relatively small number of farms that will be affected. Mabon.

Mabon ap Gwynfor (Plaid Cymru, Dwyfor Meirionnydd)

Thank you for those points. First of all, do you not accept that this tax will not raise that much money, ultimately? The money that is raised from Wales, because of the poor settlement that we have with the Barnett formula, Wales won't necessarily see our share of those tax funds come back to Wales. And your party has championed Dan Neidle in the past, a tax expert—he's changed his mind and said that this will actually damage family farms. Do you accept those points?

Huw Irranca-Davies (Labour, Ogmore)

Well, I notice that Paul Johnson of the IFS, the Institute for Fiscal Studies, also says that the impact will be limited. But I would suggest as well that, here in Wales, where the characteristic of Welsh farming is smaller than some of the megafarms that we see in the UK, the impact will be less than it is across the wider parts of England. But I think it's really important that everybody takes individual advice rather than speculating on what the generality of the impact would be, and I know farmers are doing that at this moment. It's also important to note that farmers right across the board, as I've said, rely on those important public services as well, so bearing this in mind, including that this is, in the end, a reserved matter for the UK Government, our role is indeed to push for Welsh voices to be heard.

Now, let me just say, farmers make a crucial contribution to our economy, our environment as well, and our communities right across Wales, and that's why the Welsh Government is so very committed to supporting the farming sector. In fact, the farming sector is one of the sectors of the economy that receives most Welsh Government funding. So, for example, we have already protected the basic payment scheme budget at £238 million for 2024—the same level as 2023—despite, I have to say, the budget pressures that we face. We've also announced the continuation of BPS for another year, and several key schemes for 2025, to provide as much certainty as possible to farming families for the year ahead. We've also made an extra £52 million available for on-farm infrastructure investments, and a further £14 million for the agriculture and horticulture sectors in 2025. And, by the way, Dirprwy Lywydd, we also worked with the UK Government to secure an extension of agricultural property from 6 April 2025 to land that is managed under an environmental agreement, including the sustainable farming scheme.

We also provide £11 million a year to Farming Connect, which provides advice and guidance to support business owners and their families, including support to develop a succession plan, which many Members in the Chamber often talk to me about, the importance of succession plans. So, through Farming Connect, farming families can be supported to have fully funded facilitated family meetings to discuss farm succession and develop that plan. As Members know, a succession plan will be unique to every single farm business; there is no one-size-fits-all option. Every family is different; every business is different. That's why Farming Connect support includes facilitated family succession meetings, one-to-one succession surgeries, and subsidised business and legal advice. Farming Connect is important in this space. It is right that we focus our Welsh Government resources on providing this support, and also on securing a sustainable future for Welsh farming.

Now, on Monday, as Members will know, I announced a revised sustainable farming scheme, after working very closely indeed with the farming industry and unions throughout the summer. I'm proud of our collaboration, and thanks to that hard work, I was able to publish the revised scheme, which I strongly believe works for farmers and the environment. So, whilst the progress we've made is significant, this isn't the final scheme, there's work to be done, but I'm very grateful to all those who have collaborated with me.

Huw Irranca-Davies (Labour, Ogmore)

To conclude, Dirprwy Lywydd, I hope that what I have outlined today demonstrates our ongoing commitment to supporting our farmers and food production. I recognise that many in the farming community continue to be concerned about their individual circumstances. I encourage anyone who is concerned to contact Farming Connect to receive advice on succession planning, as well as professional advisors and our excellent rural charities, to ask for support. We will face these challenges together and ensure a sustainable future for farming in Wales.

David Rees (Labour, Aberavon)

I call on Samuel Kurtz to reply to the debate.

Samuel Kurtz (Conservative, Carmarthen West and South Pembrokeshire)

Diolch, Dirprwy Lywydd, and I'd like to begin by declaring an interest and by thanking all speakers for contributing to this debate.

Overall, the economic argument, as we've heard, clearly falls and fails, and the impact on farmers of this rises. The family farm tax—and for the benefit of viewers who aren't able to hear the laughter from Labour benches when it's called a 'family farm tax', that's what Labour think of farmers. That's what Labour think of farmers. This family farm tax is only expected to raise around £115 million a year. That's less than 0.01 per cent of Government spending, and less than 0.3 per cent of all the tax rises announced by Rachel Reeves in the budget.

Putting that into even further perspective, the UK Government borrowed £5 billion more than it expected in the month of October alone—33 times more in one month than it would bring in in a whole year from this policy. And across social media, by the Chancellor, and even by backbenchers in this Chamber, Labour politicians have held up previous analysis by tax specialist Dan Neidle, and his support for the introduction of this family farm tax. However, now, using more accurate and up-to-date data than the Treasury has—

David Rees (Labour, Aberavon)

You need to conclude now, please.

Samuel Kurtz (Conservative, Carmarthen West and South Pembrokeshire)

Further analysis has seen Neidle go from supporter to a critic. Indeed, he said,

'The Budget hits farmers too hard and tax avoiders too lightly. It needs to change.'

David Rees (Labour, Aberavon)

Sam, conclude, please.

Samuel Kurtz (Conservative, Carmarthen West and South Pembrokeshire)

To quote John Maynard Keynes, 'When the facts change, I change my mind.' So, what do you do, Cabinet Secretary? I urge the Senedd to vote with the motion today to back our family farms and to tell Sir Keir to get his hands off Wales's farms.

David Rees (Labour, Aberavon)

The proposal is to agree the motion without amendment. Does any Member object? [Objection.] Yes, there is objection, therefore I'll defer voting under this item until voting time.

9. Welsh Conservatives Debate: Small businesses and taxation

David Rees (Labour, Aberavon)

Item 9 is the second Welsh Conservatives debate, small business and taxation, and I call on Samuel Kurtz to move the motion.

Samuel Kurtz (Conservative, Carmarthen West and South Pembrokeshire)

Diolch, Dirprwy Lywydd, and it's so nice to back on my feet so soon. I'm sure everybody's absolutely delighted to hear me once again. But I am honoured, Deputy Presiding Officer, to open this debate today, a debate that celebrates and champions the remarkable contributions of small businesses to Wales. These enterprises are the lifeblood of our economy and communities, and they deserve our full support. Not just on Small Business Saturday, in 10 days' time, but every day of the year.

I'm sure every Member in this Chamber has engaged with small businesses in their constituencies. We can all name examples of entrepreneurs and local enterprises that make an outsized impact, creating jobs, supporting communities and enriching the lives of those around them. And in every annual debate we have on this, each Member will take it as an opportunity to namecheck those businesses in their constituency, because their successes are our successes, and the success of Wales.

Yet, today, small businesses face mounting pressures, pressures not of their own making, but the result of political choices. Choices made by the UK Labour Government that are actively undermining growth and stability. Labour's budget has placed an even heavier burden on our small businesses, with ill-judged policies such as the increase in employer national insurance contributions. For small businesses, the challenges are stacking up: higher national insurance contributions; an increasing energy price cap; and inflation rising once again, which, let us not forget, was brought under control by the previous Prime Minister.

The consequences of these policies are already apparent. The British Retail Consortium, alongside 79 leading voices in the retail sector, has warned that the increases in NIC will result in higher prices, job losses and reduced investment. This will harm small businesses, their employees and their customers, ultimately leaving us with lower growth and higher costs. Mabon.

Mabon ap Gwynfor (Plaid Cymru, Dwyfor Meirionnydd)

I accept what you say, that inflation is lower but increasing at the moment, but don't you accept that the Conservatives and the Conservatives' management during the last Government led to inflation of around 10 per cent, and 15 per cent in the sector that we're talking about, and that therefore many of the problems that these small businesses are facing today are as a result of the Government in Westminster under Conservative control?

Samuel Kurtz (Conservative, Carmarthen West and South Pembrokeshire)

I dispute that. When you look at all the other countries that have had double-digit inflation where the Conservatives aren't in power—Germany, other continental countries, countries over in North America—those countries, nothing to do with the UK, double-digit inflation was because of the invasion in the Ukraine and the inflation in the global energy market. So, there's an economic analysis for you there.

Deputy Presiding Officer, poor choices, however, can be reversed, and that's what today's motion puts forward—it's two simple, yet do-able proposals. First, we call on the Welsh Labour Government to make urgent representations to the UK Government urging them to reverse the damaging increase in national insurance contributions. Secondly, we call for the reinstatement of 75 per cent business rates relief for the retail, hospitality and leisure sectors. This targeted support would provide much-needed breathing space for the small businesses that form the backbone of our high streets and local economies.

These are not radical demands—they're common sense. They would ease the burden on our overburdened small and medium-sized enterprise community and allow businesses to focus on what they do best: innovating, creating jobs and driving growth. Small businesses understand their communities, their customers and their challenges far better than any Government ever could. Our job is to clear the obstacles from their path, not add to them.

I'm proud to represent so many outstanding small businesses in my constituency of Carmarthen West and South Pembrokeshire—businesses that work tirelessly to provide goods, services and employment. I want these businesses to have hope. I want them to succeed, and I want Wales to thrive because of their success. Under the Welsh Conservatives' leadership, Wales would be open for business. Colleagues, we have a choice. We could support this motion and give Welsh businesses the recognition and relief that they deserve, or we could fail them, at a time when they need us most. Their success, as I've said, is truly our success. Let us support them, so they can continue to support our communities, our economy and our future. Celebrate them, back them, and let us reverse these damaging changes before it's too late. Diolch, Dirprwy Lywydd.

David Rees (Labour, Aberavon)

I have selected the amendment to the motion. I call on the Cabinet Secretary for Economy, Energy and Planning to move formally amendment 1, tabled in the name of Jane Hutt.

Rebecca Evans (Labour, Gower)

Formally.