Eighth Delegated Legislation Committee

1 July 2026

Contents updated on 1 Jul 2026

The Chair formally opens the Delegated Legislation Committee, introduces the draft Government of Wales Act 2006 (Increase of Capital Borrowing Limits) Order 2026, and calls the Minister, who moves that the Committee consider the draft Order, outlines the UK Government’s manifesto commitment on the Welsh fiscal framework, explains the 10% increase in Welsh capital borrowing limits and other fiscal flexibilities, cites the legal basis in section 122A of the 2006 Act, confirms the cumulative limit will rise from £1 billion to £1.1 billion and be uprated by inflation, stresses Senedd accountability for use of the powers, and notes the additional £6.5 billion spending power for Wales before briefly answering a question on the Welsh Government’s ability to service the extra borrowing by reiterating that accountability rests with the Senedd.

Eighth Delegated Legislation Committee Wed, 1 Jul 2026 House of Commons

00:03 - 00:27

Speaker 8

Order, order. The draft Government of Wales Act 2006 (Increase of Capital Borrowing Limits) Order 2026. Before I call the Minister to move the motion, if you want to take your jackets off, it is warm, although in saying that it's not that cold, please feel free to do so. I call the Minister to move the motion.

00:27 - 03:10

Speaker 3

Thank you, Chair. I beg to move that the Committee has considered the draft Government of Wales Act 2006 (Increase of Capital Borrowing Limits) Order 2026 laid before the House on Tuesday the 2nd of June. It is a pleasure to serve under your chairmanship, Ms. Harris, and I'm grateful for the opportunity to debate this draft order today. The Government was elected on a manifesto commitment to work in partnership with the Welsh Government to ensure that the Welsh fiscal framework delivers value for money. It was as a result of joint working between both governments that my right honourable friend the Chancellor announced as part of the autumn budget last year some fiscal flexibilities for the Welsh Government's budget to enable it to better support businesses and public services in Wales.

This included increasing the Welsh Government's annual and cumulative capital borrowing limits, its overall reserve limit, and its annual RDEL and CDEL drawdown limits by 10% this year. From next year, each of those limits will be uprated annually in line with inflation. Only one of these limits has a legislative basis: the Welsh Government's cumulative capital borrowing limit. Section 122A(1) of the Government of Wales Act 2006 currently sets this limit at £1 billion. Section 122A(2) of that Act enables the Secretary of State to vary this limit with the consent of the Treasury.

The order before the Committee this afternoon, made under section 122A(2) of the Government of Wales Act 2006, will increase the Welsh Government's cumulative capital borrowing limit by £100 million in line with the commitment at autumn budget. The Welsh Government remains accountable to the Senedd for how it uses these increased borrowing powers. The Wales Office will bring forward further orders annually to further increase this limit in line with inflation, as is the current process in respect of the Welsh Government's borrowing limits. In summary, this order will increase the Welsh Government's cumulative capital borrowing limit to £1.1 billion in line with the commitment made at autumn budget last year. The changes to the fiscal framework, together with additional funding through Barnett and the largest settlement in the history of devolution, means that the UK Government is providing the Welsh Government with nearly £6.5 billion in additional spending power.

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