TELLING IT THE WAY IT IS…

To say that our countries interests are often taken for granted by some our MP’s is no understatement. There are more than enough MP’s who represent geographically Welsh constituencies who do little to further the interests of our country or even to call for far funding for Wales. Plaid Cymru Westminster Transport and Treasury spokesperson Jonathan Edwards MP is spot on when he says that any MP based in Wales voting for HS2 without fair funding for Wales will be committing an act of political betrayal. 

The UK Westminster Government commissioned detailed economic analysis by accountants KPMG which shows that hundreds of millions of pounds will be lost from the Welsh economy each year as a result of the proposed HS2 rail link project which plans to link the North of England to London. Yet the figures were only released after a Freedom of Information request by the BBC 2’s Newsnight.  The report indicates that Cardiff will lose £68m per annum; Swansea £16.5m; Bridgend £11m, and Neath Port Talbot £6m and that Wrexham would only gain marginally from HS2.

England-only infrastructure developments should result in Wales receiving its fair share even under the deeply flawed and outdated Barnet formula.  Yet, as transport infrastructure remains not devolved and the HS2 project has been designated by the UK Government as a UK wide project this means that Wales won’t receive 5% of the total costs of the project in compensation.  Last summer the UK Government up-rated the expected cost of the development by £10bn to over £40bn.

Plaid Cymru Westminster Transport and Treasury spokesperson, Jonathan Edwards MP said:

“The last time I looked on a map, London, Birmingham, Manchester, Sheffield, and Leeds were all in England.  I find it difficult to see how the UK Government can claim that this is a UK-wide project.  In reality what we are seeing once again is a UK Government using Welsh taxpayers’ money from the general pool of taxation to fund an infrastructure project which will disadvantage our economy.

“The Budget for HS2 is spiralling out of control and construction hasn’t yet begun.  The budget for HS2 will inevitably increase and it will be the only game in town for generations in terms of rail infrastructure spend, meaning that there will be less money to invest in Welsh transport infrastructure. 

“Wales historically only gets a fraction of infrastructure investment - far less than what our population share would demand. We can ill afford to not receive our fair share from HS2.

“Following queries from the Financial Times as to why the Labour Welsh Government was not supporting Plaid Cymru’s position, it belatedly performed a U-turn.  However it was revealed in a recent Parliamentary question I tabled that the Welsh Government had made no representations to the UK Government on securing a fair deal for Wales.  Wales cannot have a Labour Government that is unwilling to stand up to Westminster on this issue.

“Based on UK Government projections, Wales should receive £2bn as a result of HS2.  However with predictions that the total bill for HS2 could easily double, we could be looking at nearer £4bn.  Either way this is a huge sum of money which could revolutionise transport infrastructure in Wales.

“Together with the published negative impact on the South Wales economy in particular, it would be an act of betrayal by MPs representing Welsh constituencies if they didn’t oppose the HS2 Bill today without cast iron guarantees that we were not going to be short changed again by the UK Government.”

WORKING HARD FOR WALES?

The Party of Wales has criticised the lack of detail on borrowing powers to Wales provided by the joint statement issued by the UK and Welsh Governments. The statement follows twelve months of bilateral talks between the two governments. The party has also criticised the lack of a clear commitment to the reform of Barnett or a formula to fix the Barnett floor.

Ieuan Wyn Jones AM, the party’s Shadow Finance Minister said:

“The Welsh Government entered into the bilateral discussions with the twin aims of securing borrowing powers and fixing the Barnett floor at 115% of spending in England as originally proposed by Holtham. This statement shows that they have failed on both counts.

“Wales has already lost over 40% of its capital budget, and the economy is in crisis. We need to have borrowing powers immediately so that we can kick start the construction sector and boost jobs. The Treasury’s weasel words on borrowing shows that they have failed to grasp the enormity of the economic crisis we face with 50,000 young people unemployed. The statement doesn’t even tell us how much Wales will be allowed to borrow at some future unspecified date.

“The failure to agree a formula to fix the Barnett floor also shows that the Treasury is now clearly complicit in perpetuating the underfunding of Wales.

“This announcement has the Treasury’s paws all over it, and I can’t understand why any First Minister of Wales would sign up to it. I would have been ashamed to have signed up to this weak and bland statement. There is no mention at all of the longer term need for a wholesale reform of Barnett.”

THE SOUND OF SILENCE...

The news that Wales is missing out on up to £140m more per year more than was originally thought because of the unfairness of the Barnett Formula, should not shock anyone. Back in 2010/2011, our country missed out on up to £540m, this makes Plaid’s call for the implementation of a needs-based system, or a short-term solution to make up the shortfall, more urgent than ever. The publication by the UK Government of the public spending figures for 2010/2011, revealed that the funding shortfall for Wales for that year came in at some £540m. This figure is substantially more than the £400m figure that was estimated by the independent Holtham Commission back in July 2010. This should make the case for overhauling Barnett pretty water tight and more urgent than ever. I hope I am wrong, but, I suspect that a combination of a financially challenged Tory driven Westminster government and an inert, inept Labour in Wales Government in Cardiff Bay will means that the problem of the underfunding won’t get sorted anytime soon. So any sound of silence near us in the future will be the sound of Unionist’s working hard for for Wales then...

FAIR FUNDING (NOT)

So much for fair funding for Wales, Danny Alexander (during Treasury Questions at Westminster yesterday) admitted that the UK Government is refusing to consider Barnett reform before any wider changes to the way the Welsh Government is funded. This is an interesting decision, especially as the UK Government is literally throwing money at the Scottish Government following the SNP electoral landslide last week, one that will hold Wales back.

Plaid has argued that pursuing a Welsh ‘Calman-style’ Commission prior to any reform of the current funding system would be a case of ‘cart before horse’ and has called for the Labour Government in Cardiff to sit up and pay attention to the gravity of the situation. The reform of the Barnett formula has been recommended by four seperate reports, including the independent Holtham Commission, before any changes are made to the financial autonomy of the Welsh Government, yet nothing has been done.

Jonathan Edwards MP

Jonathan Edwards MP (Plaid’s Treasury spokesperson) said:

“At a time when the UK Government is literally throwing money at the Scottish Government following the SNP landslide last week, I am dismayed that the Chief Secretary confirmed that changes to the way Wales is funded will not take place before their so-called Welsh Calman-style process.

“The UK Government know they are now dealing with an administration in Cardiff Bay intent on holding Wales back and have no need to offer any sort of concessions. The message is clear – vote Labour, get nothing.“Such is the arrogance and ineptitude of potential Labour Welsh Ministers, the significance of the Chief Secretary's answer and its dire consequence for Wales will probably go unnoticed.

"The independent Holtham Commission set out a route-map for how financial reform should take place in Wales - that there should be a Barnett floor to prevent the underfunding of Wales getting worse, then the introduction of a needs-based formula and only then should other financial reforms take place.

“The UK Government should be in no doubt that it will not have the support of Plaid Cymru for any changes to the way the Welsh Government is funded unless Barnett is reformed first.

“The ConDems cannot be allowed to get away with skipping steps one and two by a toothless Labour administration in Cardiff."

ANYONE LISTENING TO LORD BARNETT?

The Barnett Formula is used to calculated the way in which money from central Government pot gets allocated to Scotland, Wales and Northern Ireland. It pre-dates devolution and is well over due for being revised, renewed or replaced. Lord Barnett, who gave his name to the formula, is now calling for a change to the formula that currently bears his name. If the funding formula's creator says that it is now unfair and needs changing, will the ConDem's listen?

THEY DOTH PROTEST TOO MUCH...

The Labour Party in Wales has said that Wales is underfunded to the tune of £300m which is something that the Holtham Commission, which looked into the way Wales is funded, reported. While I am pleased that the Labour Party in Wales has finally recognised this, I find it hard to reconcile it with the fact that they were in government for 13 years and did precisely nothing to change the flawed Barnet funding system, when they had the opportunity. Now, being in opposition in (and out of) Westminster and in Government in Cardiff Bay, all is urgency (or political expediency) and the crocodile tears begin to flow copiously...

There is that more than faint whiff of self satisfied smug glee and more than a little joyful if not ecstatic hand rubbing from some of Tory mainstream (sorry right) in relation to the mess that some of the Euro zone countries have got themselves into, ignoring the fact that the Euro is actually pretty sound, the problem is being caused by the banking idiocy that gripped much of the world - something that most governments did little to try and curb or criticise when things were bubbling along quite nicely.

The Irish situation is more complicated than most as successive Irish governments made significant quantities of hay while the sun shined brightly and appear to have made little or no provision for rockier economic times (just like almost every other government on the planet) and now the Irish people are paying for it (just like us). All governments Europe and worldwide would do well to note the slowly (and not so slowly) rising degrees of discontent that that paying for the banking crash is generating.

A MISSISSIPPI RIVER BOAT GAMBLE

Despite the positive growth figures, which the Con Dem Government and their media coat-holders have understandably made much of, the cuts are still a major gamble (of epic Mississippi riverboat proportions) on the part of the Con Dem Government. This is literally a case of win or bust, the problem is that this is a major gamble not only with the state of the economy but on the lives of every person who live in Wales.

The reckless combination of slash and burn cuts and the crazed Thatcherite obsession with privatisation (Forestry in England, the Post Office, possibly even the Passport Office, etc) could lead to the loss of half a million public sector jobs - a figure which could well be doubled when considering the impact on the private sector. Certainly Con Dem Government suggestions that the private sector will be able to step in to the jobs vacuum left behind is not so much a case of staggering naivety and more of case of an utter failure to understand the realities of the intertwined nature of the public and private sector in Wales.

Certainly whatever economic planet the Tories (who may be on Planet Bullingdon) and their Lib Dem little helpers /partners /collaborators believe they are living on, certainly does not include Wales, where the private sector is not as strong as it could be, but, is thoroughly intertwined with the public sector and somewhat happily dependent on relatively fat public sector contracts.

There is something else though, which over the term of this Government (however long it lasts) may have a more lasting impact, and that is any scant thought about the impact of their decisions upon Wales or the people of Wales. Even the South Wales Argus, has picked this up (and it is no lover of ‘Welsh Nationalism) in relation to the on-going campaign to save the passport office, stating in it's editorial (27th October) that “Whitehall’s failure to recognise the inalienable rights of Wales to equality with the other nations smacks to us of institutionalised racism” – I could not have put it better myself.

Let's be honest, if the last New Labour Government was pretty ignorant (and somewhat London centric) when it can to Welsh issues (economic and other) and that with the alleged strong Labour voice's around the cabinet table, then this lot in the current Con Dem Government in London are going to be even more cut off from the economic, social and political realities of life as it is lived here in Wales.

I mean these people think that providing a pilot area (in Herefordshire) for next generation broadband project which are set to take place in Scotland and England - will suffice for Wales. Moving swiftly on, the impression given is that the current Welsh Secretary of State is less than a strong voice for Wales in Government. It may well be the literal case that she is not sat around the cabinet table, let alone in the same building or the same city when it comes to decisions being made that affect Wales.

What would be useful is a speedy reform of New Labour’s unfair Barnett Formula and need to be able to exercise control over levels of corporation tax so that our businesses can get the support that they will need during tough times. The reality is that we had better not be holding our collective breath and be expecting the current government to even notice if we collectively went blue and passed out over an issue of principle – get used to the fact that Wales is not and will never be on the Con Dem’s economic or political radar.

So there we are, we face instead the grim prospect of ill-judged and reckless cut backs in public spending, which may lead to an end result of our communities being blamed for being poor and lacking in aspiration by the Con Dem ministers. Wales needs to be in charge of her own resources, and free to make its own economic decisions so that we can mastermind our own economic recovery, rather than cling onto the Con Dem Government's coat-tails and hope for the best.