Tuesday, 2 May 2017

FMQs: Gaffes, Circuit of Wales & Borrowing



This afternoon saw the final FMQs before the local elections on Thursday and the first since the announcement of the forthcoming UK general election.

FMQs, 2nd May 2017

Party Leaders

UKIP leader, Neil Hamilton AM (UKIP, Mid & West Wales), flagged up Shadow Home Secretary Diane Abbott's gaffe on the cost of recruiting extra police officers this morning, asking for clarity on Labour's proposed policy. He cited figures that show the last time capital gains tax was increased, revenues fell – it also amounted to a tax on pensioners, many of whom may offset capital gains to sustain their incomes in retirement.

The First Minister reiterated the importance of “getting more bobbies on the beat” and made it clear Labour's policy would cost £300million a year, not £300,000 or £80million - paid for by reversing cuts to capital gains tax. He then accused UKIP of being “soft on crime” and believed Neil Hamilton had confused capital gains tax with inheritance tax.

Next, Plaid Cymru leader, Leanne Wood AM (Plaid, Rhondda), asked (I have to say a slightly oddly worded question that I've had to rephrase) why the First Minister changed his mind on Labour's general election chances? We've had five different Shadow Welsh Secretaries since 2015 and Labour were “squabbling over lifeboats”, amounting to gross incompetence.

Carwyn didn't quite get the line of questioning but believes Labour has a better chance of winning an election than Plaid Cymru regardless, and don't want the Tories to “walk all over Wales” (amidst more pre-election posturing).

Leader of the Opposition, Andrew Davies AM (Con, South Wales Central), drew attention to the recent Wales Audit Office report into the Circuit of Wales. The Welsh Government could have broken EU state aid rules and Welsh taxpayers' money had clearly been misused, with up to £300,000 used to buy a bankrupt motorcycle firm; would the First Minister apologise?

The First Minister tried to bat it away - and it didn't quite work - by saying the Cancer Drugs Fund in England (a policy the Tories wish to replicate in Wales) was criticised as a “waste of money” too. There will always be risks with projects the size of the Circuit of Wales but money has to be used responsibly. Nothing has been said about whether the project is worth supporting, but it's still unclear at this stage whether the project is a suitable risk for further Welsh Government backing.

Backbenchers

Sian Gwenllian AM (Plaid, Arfon) asked for a statement on plans to create a medical school in north Wales. The case for a medical school to serve the north and west was “clear and robust” and could help reduce the over-reliance on agency staff, with the Betsi Cadwaladr health board spending £21million a year on locums.

The First Minister said work was “ongoing” on determining the future of medical training in the north and the Health Secretary will be making a statement “in the coming weeks”. He was non-committal to a medical school as such, saying there has to be enough of a “professional challenge” to entice trainee doctors to an area.

Huw Irranca-Davies AM (Lab, Ogmore) asked what assessment has been made of the potential benefit to Wales if the UK Government borrowed more in light of low interest rates? Classic economics underlines that governments can reverse cuts and boost the economy by borrowing more when the cost of borrowing is cheaper.

The First Minister believes a shift in policy could boost capital infrastructure spending. All governments borrow, but it should be done for the right reasons not to subsidise tax cuts. The UK Government has no vision for capital infrastructure and that's why we've seen projects like rail electrification and the Swansea Bay tidal lagoon slip back. He believes £1.5billion would be a “prudent” level of borrowing for Wales.

For the sake of clarity I'm counting him as a Tory for Assembly business - Mark Reckless AM (Con, South Wales East) asked an eccentrically-worded question on the “appropriate magnitude” of borrowing for Welsh Government in the UK context? (English: How much money do you think the UK Government should allow the Welsh Government to borrow?) Did he think it was appropriate for the UK Government to borrow 300 times more than Wales (£500billion) as proposed by Labour?

The First Minister said the Welsh Government will make the best use of the £1billion borrowing powers provided in the new fiscal framework for Wales. The UK Government has far more tools at its disposal to pay back any borrowing (tax, fiscal powers). He repeated his belief that borrowing to pay for infrastructure is important, but it has to be done prudently.


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