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Yes, we can...

Betsan Powys | 14:18 UK time, Wednesday, 16 March 2011

Let me clear: I'm updating the blog now because Plaid Cymru are clear that we have misunderstood their Build for Wales infrastructure fund proposal and that Labour, the Conservatives and Liberal Democrats haven't understood it at all.

A party spokesman tells us, "Our proposed structure is not a 'near identical' scheme to that mentioned for Scotland which assumes public sector borrowing, but rather a new type of company which is not only able to raise funds in private market but is an alternative to PFI.

"The Scottish proposal asked permission for the public sector to borrow. Our proposal has been created to specifically answer this problem - creating a funding vehicle set up as a private company with special characteristics allowing it to borrow in the market. Dialogue around this proposal is currently ongoing with the treasury."

So Plaid say their proposal might sound similar to a scheme outlined in Scotland, where the Scottish government would have been able to issue bonds to pay for large infrastructure projects. They sound similar but are, in fact, not. The fundamental difference is that under Plaid's scheme, the borrowing would be done by an arm's length body, not the Assembly Government.

Party sources repeatedly refer to discussions with the Treasury and that while they rejected the Scottish proposal, discussions around Plaid's plan have gone "a pretty long way down the line".

All these discussions, we're told, are centred on whether the borrowing would be "on or off balance sheet".

Labour still dismiss the whole scheme as unworkable. Who, they ask, would buy bonds from a Fund without assets, and without implicit or explicit underwriting from the UK Treasury? Without this, they argue, borrowing rates simply couldn't be affordable - and the Treasury have already said no.

Plaid's plan, says Labour, is a deal "that sounds too good to be true"

Plaid are insistent that it is not.

One question that's being whispered in my ear over and over again today is - who exactly is speaking to the Treasury and on whose behalf?

What I understand from well placed sources is that the discussions referred to by Plaid Cymru have been taking place between officials in the Welsh Assembly Government and officials in the Treasury.

This is significant on a number of levels.

Firstly, this is not a policy that's ever been floated by the current Welsh Assembly Government.

Secondly, it's been comprehensively rubbished by Labour, publicly and privately, at a senior level.

Thirdly, it's a key plank of Plaid Cymru's election manifesto - with Treasury buy-in the key element in its credibility.

Fourthly, are the Conservatives and Liberal Democrats being put at a disadvantage if Assembly Government officials are discussing election policy pledges with Whitehall on behalf of at least one of the governing parties here? There are a lot more than raised eyebrows at this, I can tell you.

Food for thought.

Comments

  • Comment number 1.

    "Plaid's plan ,says labour, is a deal "that sounds too good to be true"" ROFL
    Oh dear didn't realise labour did comedy.

    who was it that claimed to get rid of boom and bust ?

    who was it that thought pfi or ppp was the best thing since sliced bread?
    Sid

  • Comment number 2.

    Labour, Sid ?

    The self-same Labour who's coat-tails Plaid are hanging on to in the Assembly coalition government.

    Just remember Sid, just 30 (or more) Labour seats, and its all over for the Plaid dream, or nightmare, depending on your politics.

    Third place behind the Tories....Sorry Sid, its certainly looking that way.

  • Comment number 3.

    sid_ts63 - just because Labour are financial incompetents, that does not excuse it in others.

  • Comment number 4.

    Heh - a bit of a mean post. Just because London pre-empt and veto it doesn't mean it's not a good idea.

  • Comment number 5.

    because Plaid Cymru are clear - now that would be a 1st


    that we have misunderstood - our mistake again is it.?

  • Comment number 6.


    I work it out as £2300 per plaid voter at the last Assembly election; Plaid might like to ask their supporters to under-right the bonds, put their money etc ...

    Alice through an economic looking glass ...

  • Comment number 7.

    No one seems to comment on the really significant part of Betsan's post;

    Ieuan Wyn Jones has instructed his officials to sound out (over a long period?) whether the treasury would veto or object to a policy which is now a plank of Plaid's manifesto. Effectively they have honed their policy around the input of paid official's work at the treasury and in the WAG.

    IWJ has gone solo, he hasn't consulted Labour fellow ministers about his work.

    Therefore Plaid are improperly using government personell to undermine their coalition partners.

    Am I allowed to say that this is devious? (and, of course totally in keeping with Plaid's character)

  • Comment number 8.

    Plaid's policies have to be contrasted with the ConDem's cuts in Wales... more child poverty, less investment, disintegrating infrastructure. We get poorer so that the rich get wealthier, same old story.

    As for Labour... what can one say after eleven disastrous years? This party left Wales poorer than ever. The people of Wales are paying the price for Labour's failure to regulate the financial sector. Gordon Brown was responsible for that. Its record in Wales has been poor too, despite a century of loyalty to the party.

    Has the new government regulated the banks yet? I guess not. They're still paying massive bonuses, still gambling with our money, till they need to be bailed out by the taxpayer again.

    Its so easy to criticise a party which is trying to do its best for Wales and its people. No other London-based party can make that claim - the interests of middle England are their priority.

  • Comment number 9.

    The allegations being made here are serious enough to warrant in my opinion a statement by either the Deputy First Minister or the First Minister to the Assembly. The Assembly has a cabinet system of government in which Plaid is very much the junior partner. The idea being pushed by Plaid is of major significance and you would have thought that it would have required background papers and a collective cabinet decision to beginning discussions with the Treasury. If this has not occurred then it effectively means that ministers have instructed civil servants to become involved in the development of a political party's policies. If this had happened in Whitehall MPs from the opposition parties would be asking the Speaker to instruct the minister concerned to make an emergency statement to the House. I wonder what the reaction of the Presiding Officer will be to these allegations>

  • Comment number 10.

    Whether Plaid's plan is workable or not, or surreptiously paid for by WAG begs the question. Plaid have come up with a new proposed device to improve the economy of Wales. I, for one, have no critisicm of that. My complaint has been they have not had any idea on how to improve the economy. Some of the previous crazy suggestions have included keeping the tolls on the Severn Bridge and using them for infrastructure purposes. This new concept at least has some ray of hope if it is not just a New Deal approach. It has to have a revenue element that provides the creation of added value to be viable. The scheme may never come to fruition but it has merit because it brings new ideas to the table. Wales needs jobs and the source of a good idea shouldn't be the cause of rejection. Further explanation is in order.

  • Comment number 11.


    Len. where is the revenue stream where Plaid is reported as ...

    ... 50,000 jobs over the next Assembly term, building roads, hospitals, schools and houses.

    ... has the penny dropped, the revenue is from the taxpayers, this plan is government borrowing covered by a blanket of deceit.

    Benedek at #9 raises a very serious allegation that the Presiding Officer will not address.

  • Comment number 12.

    Yes, well. Bonds issued against capital investment where the "Infrastrucure" created cannot be sold off and the revenue stream is not guaranteed by central government are going to have a punitive rate of interest. How is this not PFI, that great albatross round the neck of England?

    Benedeck makes the more important point. Plaid have always been the cuckoo in the Assembly government nest. They are, as always, unreliable and unscrupulous but has the Assembly as an institution got the cojones to confront their misuse of government officials and taxpayers money?


    It's a point that's been made before; the Assembly is too cosy, too willing to excuse and forgive. Until it becomes more adversarial and sharper in its analysis it will drift in a sea of its own smug complacency.

  • Comment number 13.

    Just because this is a new idea does not mean it is a good one. Governments can do little to create real jobs though they can stimulate the economy by spending borrowed money in the hope the taxpayer can pay it back - we have just had over a decade at least of that type of thinking .... oh dear.
    We are all (apart from the rich who always look after themselves) going to have to accept living in a poorer society, we simply do not generate the wealth to go on funding the previous lifestyle the bulk of us had.Unfortunately politicians can see little capital in telling us the truth as we will all eventually get fed up of austerity and vote for the guy flashing the sweetie jar again regardless of how short term the sugar rush is.

  • Comment number 14.

    "Governments can do little to create real jobs"

    What they can do is create the infrastructure. Some of our biggest issues are transport related. We should have spent the Objective 1 money on converting the Heads of the Valleys to a motorway. We need to improve the speeds on the Valleys Railway network (electrification could help). Instead of subsidising Welsh Students to study in England we should restrict to students studying in Wales thus increasing investment in Higher Education by £50m a year ish. That's big.

  • Comment number 15.

    Dewi 10 - It has to be an infrastructure we can afford over the long term Personally I am not convinced that speed is the golden goose to anything these days, it takes a hell of a lot longer to ship a container load of widgets from Shanghai than along the road from Llandudno but that doesn't stop us buying all this stuff from the other side of the world. In theory its great to keep students in Wales but if the infrastructure costs more than farming it out to England then surely this would be a drain on our resources keeping it in house, as the hundreds of thousands of students who study in England from all over the world may attest to?

  • Comment number 16.

    John Tyler

    The penny dropped immediately... My point was that the proposal couldn't be just a New Deal programme...50,000 jobs over the next Assembly term, based on building roads, hospitals, schools and houses. There is some value in New deal programmes but to be sustainable and achieveable there has to be taxable added value revenue. Your comment of "£2300 per plaid voter" also has merit. The idea of Plaid raising money with a bond from its supporters is perhaps something that Plaid would want to consider. It would show a real commitment to wanting the best for Wales.

  • Comment number 17.

    I require the assistance of other readers in understanding why Plaid would propose a scheme that, supposedly, they can't deliver on. Surely, one must conclude, they are certain that it is possible? Otherwise, I fail to understand why they would propose it.

    If it were so obviously "unworkable," then surely it wouldn't ever serve election purposes?

    Hopefully someone with more insight can address this for me as I am not qualified to comment on these sorts of finance questions.

  • Comment number 18.

    Let me understand this, did Plaid say it wasn't PFI? I'm afraid it has to be, Plaid Finance Initiative. And so like it as well, with secretive behind the scenes use of the local mandarins to speak to their Westminster counterparts. It all smacks of everything that was so vile about real PFI deals. Do we really want to be lumbered with 30 year mortgages with rates of interest so usurous that staff have to be sacked to make it affordable. If it's such a good idea let's have it out there, in full, so we can all see it. If this is the way it is just to have something novel in an election manifesto then it's really sad.

  • Comment number 19.

    " At 2:58pm on 17 Mar 2011, Jcm wrote:
    I require the assistance of other readers in understanding why Plaid would propose a scheme that, supposedly, they can't deliver on. Surely, one must conclude, they are certain that it is possible? Otherwise, I fail to understand why they would propose it."

    Oh you poor innocent;
    (a) We are talking about a political party; since when do they have to deliver on pre-election promises?
    (b) We are talking about Plaid..The Welsh Nationalist Party. There is a lot to be gained by putting forward an unworkable idea which will be vetoed by London just so that they can claim that Wales is a victim of English anti Welsh politics.

    For Plaid anything that can be stopped by a "London Party" is a winner. Just watch.


  • Comment number 20.

    7. At 07:38am on 17 Mar 2011, SEDWOT wrote:

    “IWJ has gone solo, he hasn't consulted Labour fellow ministers about his work.”

    A very definite statement, you have inside knowledge do you?

    “Therefore Plaid are improperly using government personell to undermine their coalition partners.”

    What if, the information and consultation was properly obtained as part of a coalition government initiative that Plaid Cymru has chosen to pursue but Labour hasn’t? That would blow your whole post out of the water wouldn't it?

    “Am I allowed to say that this is devious? (and, of course totally in keeping with Plaid's character)”

    You can say what you like, the rest of your post is based on complete ignorance isn’t it?

    9. At 09:58am on 17 Mar 2011, Benedek wrote:

    “....I wonder what the reaction of the Presiding Officer will be to these allegations”

    Allegations, from a few people on a blog, who have no idea of the facts of the matter, do you really wonder what his reaction will be?

  • Comment number 21.

    17. At 2:58pm on 17 Mar 2011, Jcm wrote:

    “If it were so obviously "unworkable," then surely it wouldn't ever serve election purposes?”

    Despite what SEDWOT said in such patronising tones in #19, you are correct.

    I don’t think it would serve any purpose for Plaid Cymru to propose something which is clearly unworkable. The political advantage of having “London” block it would be outweighed by the disadvantage of being seen to propose an apparently stupid or silly suggestion. IMHO.

  • Comment number 22.

    Even if there is the germ of an idea in the Plaid proposal it is clearly half-baked since they don't know whether it is acceptable to the Treasury or not and cannot answer obvious questions. This is a keynote policy? To call it a damp squib is polite. As a strong devolutionist I find it regrettable that the nationalist party is so inept. As Scotland shows, the country benefits when there is a strong and plasuible nationalist party. It is a useful outrider for the majority who want meaningful devolution within the UK and counterbalances the naysayers. Unfortunately the leadership of Plaid is so weak its vote is stuck or declining and it is failing to play the outrider role. The party deserves great credit for pushing Labour into having the recent successful referendum but otherwise it has achieved little. It never seems to have found an adequate successor to Wigley. It badly neeeds a shake-up and some new blood.

  • Comment number 23.

    "Secondly, it's been comprehensively rubbished by Labour, publicly and privately, at a senior level”

    To be fair Betsan why would Labour know what is going on with the Economy department under a Plaid Minister? They didn’t have much of an understanding of what was going on when they were in charge of the portfolio themselves?

  • Comment number 24.

    dear #19,

    Of course it must be assumed that many pre-election promises will be dismantled, reworded or what have you, but as #21 suggests, you've missed my question. If Plaids proposal is as ludicrous as many comments here suggest, then what purpose does it serve? If there is no way it is 'workable' then wouldn't it only hamper elections?

    As for being 'blocked by London', well that can only go so far. Who would elect a party whose essential platform is against the very system they want to be running?

    The way I see it, if there isn't some evidence the proposal might be workable then Plaid have severely overplayed their hand.

  • Comment number 25.

    Glyndo;

    I think if you read Betsan's blog again you will see that it is SHE who is suggesting that Plaid have been furthering their own plans behind the backs of Labour ministers. I merely repeated the allegation.

    Jcm;

    Almost certainly Plaid and the SNP have consulted on this policy and looked at feasibility with the treasury. Plaid have floated a variation of it, but, to me it looks like PFI in disguise....one of the good things about the Assembly is that they kept us out of that swamp.

  • Comment number 26.

    Not sure why there is so much interest in this idea.
    Its so full of flaws and potential pitfalls as it stands, its not going far.

    So:-

    Obviously a bit of kite flying to get media space, generate a bit of political heat, and create antagonism all round.

    However - Plaid are not going to win the election, third place probably. Nor is it likely they will be part of any Coalition for some time.

    So its all speculative at best.

  • Comment number 27.

    We don't know the details of Plaid Cymru's proposals yet, so it's probably a good idea to be restrained either in condemnation or in applause, or risk egg on face when the details do come out.

  • Comment number 28.

    25. At 07:39am on 18 Mar 2011, SEDWOT wrote:

    “Glyndo;

    I think if you read Betsan's blog again you will see that it is SHE who is suggesting that Plaid have been furthering their own plans behind the backs of Labour ministers. “

    I think if you read Betsan’s blog again you will find that she makes no such suggestion.

    I quote
    “Fourthly, are the Conservatives and Liberal Democrats being put at a disadvantage if Assembly Government officials are discussing election policy pledges with Whitehall on behalf of at least one of the governing parties here? There are a lot more than raised eyebrows at this, I can tell you.”

    There is a big IF in the middle of that and a report of raised eyebrows. Betsan at no point makes any allegation or suggestion that Plaid has done anything. She has asked a question and would be foolish to do otherwise.
    I can't find any reference in either of the last two blogs to Plaid Cymru going behind the back of Labour Ministers.

  • Comment number 29.

    #27

    But that's the point. What kind of Party puts out a keynote policy without being able to supply basic information, not just fine detail, and when it doesn't know itself whether the policy will be workable or not. I'm not gloating, I'm bemoaning Plaid's naivety and ineptitude. Even if there is a workable idea in there, they should have made sure and fleshed it out before going public. There's no chance of egg on anyone's face but theirs - a llawer ohono.

  • Comment number 30.

    #29

    Not necessarily so. Political parties often give out soundbites or headlines before giving out the detail. It's unlikely (though not impossible, I grant you) that someone like Eurfyl ap Gwilym would support a policy consisting of nothing but sound-bites.

    I suspect that we shall hear more details regarding this policy in the coming days or weeks, and then we'll be in a position to see if Plaid Cymru were naive or not.

  • Comment number 31.

    #30, "... Plaid Cymru were naive or not".

    When the other parties explain to the public that Plaid are proposing tax raising powers without the debate, because that is what the "bond" is, it will be kicked into the very long grass.

    What next for Plaid .............. the long silence !

  • Comment number 32.

    Where did you find the details of the bond, John? Could you post a link for those of us still waiting for the details?

  • Comment number 33.

    #32 ...

    http://www.bbc.co.uk/news/uk-wales-politics-12757855

    ... bereft of real detail.

  • Comment number 34.

    At this stage I would be amazed that anyone published anything in the short of detail required for a bill. This is not tax raising powers to call it that is incredibly misleading. Given that the National Assembly is so hamstrung financially, lacking the power of the smallest community council to raise finance, its this sort of lateral thinking that is needed. Lets remember that in the original Government of Wales Bill even the revenues from the Assembly gift show would have gone back to the UK treasury if a specific amendment had not been gained by the only Plaid member of the House of Lords!

 

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