06/11/2013 The Wales Report


06/11/2013

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Tonight, a special edition of The Wales Report. For a leading

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politicians debate the latest step on the evolution journey. Powers to

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borrow, powers were some taxes. Does Wales have the appetite for a

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significant change? Stay with us. Good evening, welcome to The Wales

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Report. It is just five days since David Cameron and Nick Clegg visited

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Cardiff Bay and unveiled their proposals were putting the Welsh

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people in the driving seat on jobs, transport, infrastructure and

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housing. They were talking about new financial powers for the Welsh

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government. Control of stamp duty, landfill taxation, powers to borrow

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money and even powers to set income tax if the people of Wales are

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proved that in a referendum. It was the long-awaited response to the

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silk commission, which caused -- Coleford evolving powers. To what

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extent do the four main parties agree on the way ahead? First, some

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food for thought on with the journey of the past 16 years has brought us.

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Here is Professor Wynne Jones. No .3% nationwide in Wales...

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The people of Wales have given their support to a strong Welsh boys.

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Voters want the Assembly to have the powers to make its own laws without

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Parliament having any say. We have the same powers as Northern Ireland

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and Scotland. We are announcing more power for the Welsh people and the

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Welsh government. Power that is about building this country up,

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power that is about making sure we have real accountable government

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here in Wales. The powers they are talking about are important powers.

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Borrowing powers, tax varying powers. Local government can do it,

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the parish council can do it. It has always been an anomaly that this is

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not possible at a devolved level. This is now changing. It is

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important. We cannot have properly accountable governments unless the

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devolved level has some responsibility for raising the money

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it spends. Otherwise you will not be seriously responsible in terms of

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how you use that money. All of the parties have accepted that in

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principle. The fact of the matter is the minor taxes they are talking

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about are peanuts. The amount of money they raise is very small.

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Income tax is the only thing that gives you any real financial cloud,

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raises any real money. People will begin on the basis of believing in a

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referendum. Let's be honest with ourselves in this regard. That any

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referendum on the devolution of income tax would be to them a way of

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paying more tax. Whether it is true or not is a different issue. That is

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what their default position will be. It may be possible at some point to

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make an argument that overcomes that. I don't believe that point is

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reached. The Welsh government is running away from a referendum on

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that particular issue. They are talking the language of

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accountability, but they are resigning from embracing it. The UK

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Government is saying we're living in the best of both possible worlds and

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that nothing much needs to change. The Welsh government has asked for

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radical changes, moving to a reserved powers model, devolving

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police, justice etc. These are incommensurate positions. There is

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no compromise possible. They have to jump one way or the other.

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Some thoughts from Professor Richard Wyn Jones. With me, the leader of

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the Welsh Conservatives, Andrew RT Davies, Leanne Wood of Plaid Cymru

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and Kirsty Williams of the Liberal Democrats. And we have the finance

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minister for Wales, Jane Hutt. We did ask the First Minister, Carwyn

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Jones, to take part but he was unavailable. Thankfully, Jane is

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representing the Government. Andrew, your colleague, David Cameron,

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making this announcement with Nick Clegg last week. The principle was,

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no government should be in a position where it is spending money

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when it is not responsible for raising some of that money. Is that

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an argument that holds water? I think it does. On the front page of

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the silk report, empowerment and responsibility. That is what these

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proposals are about. It is about giving empowerment so the Welsh

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comment can do the things it wants to do, but having the responsibility

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to raise the money it needs. -- Welsh government. We all have a

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responsibility. If we spend more money than we earn, we are in

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difficulty. David Jones, the Secretary of State for Wales, has

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been pretty lukewarm about this. Your party colleague. Are you very

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enthusiastic about it? Are you saying that varying powers for

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income tax for the Welsh government would be a good thing? I disagree

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what you said about the Secretary of State. I was with him on Monday.

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Lots of people will smile at that. David was very enthuse about the

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announcements made on Friday. I believe passionately that

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politicians need to have responsibility and accountability.

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At the moment we have through the Welsh Assembly and the Government

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that flows from it is a spending agency. The money comes down the M4.

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You cannot run a democracy on those principles. You have to have an

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element of accountability and responsibility, and I think

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everybody understands that. You have got to have that ability to spend

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and raise. Kirsty, what was the Liberal Democrat role in this? I

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don't think the commission would have happened if the Liberal

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Democrats have not been part of the Coalition Government. We insisted

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that was written into the agreement, that the process will be

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set up. There were people in London who did not want the commission

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established. Working together with party leaders in Wales we were able

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to establish the commission. I was delighted on Friday to have the

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announcement. Liberal Democrats have been campaigning for home rule for

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more than 100 years. This is a very important step towards that

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announcement -- that, the announcement on Friday. It is powers

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with a purpose. If devolution is going to be successful, we need the

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Welsh government and the National Assembly to have the widest range of

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powers to build a strong economy and fairer society in Wales. These

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powers will help the Welsh government to that. This condition

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of a referendum, do you think that is right? And do you think Carwyn

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Jones is right when he says people may fear the plan is to increase

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income tax, and for that reason they may not vote for it? Taxes could

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increase with this change, but taxes could come down as well. The point

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is that if a government has got the flexibility to use taxation as a

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tool, then that has to be helpful for the Government. A future

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government may want to say, for example, put the creation of jobs at

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the top of its agenda. At the moment there is no incentive on the part of

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the Welsh government to create jobs because the money raised by the

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taxation from these jobs doesn't come into a Welsh Treasury. If you

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had income tax raising powers, there is a direct reason, a direct

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incentives, to create jobs. A future Plaid Cymru government would relish

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the opportunity to use these powers. It unlocks other powers as well.

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More borrowing, for example, would be available. It makes the

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Government more solvent. It makes other organisations outside look at

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the Government and say, OK, that is a fair bet for us to put our trust

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in if it has got the income stream it does not have at the moment. With

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those possibilities, Jane, how keen are you to try to access these

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powers? I have two say, the vibe from the First Minister has not been

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overwhelmingly enthusiastic. It has all been about caution and concern.

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Are you keen to get these powers? I would disagree entirely, Hugh. On

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Friday the First Minister was delighted. We went to the press

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conference together. It was a real endorsement about consensus politics

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in Wales. We all came together. The fact we got all the political

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parties to back this, and I have to say, business played a huge part.

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The first step, as they see it, as -- are those borrowing powers. That

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is what the Welsh Labour government has been seeking to do. The First

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Minister said he was delighted. We are now equal partners in the United

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Kingdom. That is such a strong response. The whole of the silk

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commission report we embraced. And very importantly, we recognised this

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gives us the first step, with these smaller taxes, let's remember, we're

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going to have stamp duty devolved and we know this can help new

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house-buyers. There are so many opportunities. Landfill tax.

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Eventually... This is a huge step. And who would have thought this,

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that we are in this position? It is momentous. It is an historic day.

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This is the first step on a very exciting journey in devolution. That

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is right, it is a first step. That's why I don't understand why the

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Government is putting a brake on these powers. Other parties have

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said we should press ahead as soon as possible. With the referendum?

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Yes, of course. When you have got a government complaining about the

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cuts from Westminster, how on earth would be First Minister preferred to

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have the Tories setting the full rate of income tax, when we have an

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opportunity to avail of that ourselves? What is your sense of a

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referendum at the moment? The four parties campaigned together as we

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did in 2007 and 2011, there is a chance we could win the referendum.

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What do you think, Kirsty? Do you think the Welsh people would back

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these powers today? I think it would be important to explain why these

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powers are important and what could be done with them. That is what the

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watch people want to know about. Whether the politicians in Cardiff

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Bay can use these powers to create more jobs, to make it easier for

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people to buy their first home, to be able to invest in schools,

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hospitals, transport infrastructure that they want in their community.

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These sound like expensive projects. I am not saying they are

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not beneficial. The assumption people will make is that you want

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those powers to increasing tax to pay for them? , -- of course, people

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will be fearful of that. Taxes could go up, they could go down. What

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would be really important is that the Welsh government would be

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responsible for the success of their policies. It doesn't matter to the

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Welsh government weather and a deployment goes up or down. They

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just get money from London. They would have to get the economy right.

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They would have to build a stronger economy and create jobs, otherwise

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it would directly affect their ability. We need to explain to

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people why it is important to them and their communities. If

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politicians just sit in the bubble of Cardiff Bay, no, we will not win

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it. We have to make a case. Like we made a case for the Assembly in the

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first place. And why we needed legislative powers. We support the

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road mark that was set out for a referendum to be held here in Wales.

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-- road map. The arguments can be held as to what we do with those

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powers. We would like a low tax economy. Quite clearly, the silk

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commission recommended they should be a referendum. We have accepted

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all of the recommendations. Very importantly, they said it is vital

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that both governments, the Welsh government and the UK Government, if

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there are to be tax varying powers, that we also need a fair funding

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base. There is no disagreement here between us all. It is vital that we

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have that fair funding base. This is fair funding for Wales in a

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strengthened United Kingdom. The fair funding was a big issue when we

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invited Jerry Hall fun to come to Wales in 2008 to look at our funding

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base. He said we need to do something about this. It is not

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conditional, is it? The referendum and the powers are different. The

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recommendation says, move to tax varying powers. We all agree that

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actually, if we do have these tax varying powers, we still have a lot

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of dependence on our block grants. We want to spend the money wisely

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for jobs and growth. It is still a block grant. We all agree and we

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have all supported the fact that Danny Alexander and I worked hard to

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say that yes, we need to stop that kind of unfairness in our funding,

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to ensure that when we do move forward, and that is what Carwyn

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Jones said yesterday, he would be happy to campaign when we were

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clearer. We need that fair funding base. I want to ask the three of you

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in opposition to tackle that point. There will be viewers watching who

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say that if you accept we do not have fair funding, if that is not

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right now, surely it is right to try to get that changed before you go on

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to talk about things? Isn't Carwyn Jones right to say, hang on a

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second, we want it referendum -- we don't want a referendum? We need to

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reform Barnett. The first priority is to settle the deficit issues. We

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need to have a proper funding formula for the nations and regions

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of the whole of the UK. And we need to get it right. What is so

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depressing about what the First Minister has been saying since

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Friday is that even if Barnett was reformed, he even then won't say

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whether he would call a referendum and whether he would campaign for a

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yes vote. We cannot afford the Welsh nation to be held back by divisions

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within the Labour Party and eight committee on the part of the First

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Minister. Is it unfair that the First Minister is taking a

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common-sense approach? He is saying that we do not have a fair funding

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bases at the moment. We must fix that before we put anything to

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people in a referendum. Is that not something people will understand?

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Plaid Cymru has been banging the fair funding formula for more than a

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decade now. I would take the First Minister's line of argument much

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more seriously if Labour had done something about this when they had

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the opportunity. You still say he is right? Of course, the Barnett

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formula needs reforming. I think a referendum could take place. What

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was very frustrating yesterday in questions to the First Minister was

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that I asked him if the Barnett formula reform was so important,

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would he commit his party to including that as a commitment in

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the 2015 election manifesto? He refused to make that commitment. I

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then went on to ask him if the Barnett formula was reformed, would

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he then champion the case for income tax powers and a yes vote in the

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referendum? He refused to commit to that as well. This suggests to me

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this has been put up as an obstacle. It is an unnecessary and artificial

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obstacle. Barnett should be reformed but it should not be conditional. I

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think it is disappointing to have what I would describe as my

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colleagues in this, not to recognise the achievement that a Labour First

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Minister has helped to deliver this historic achievement. We have all

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delivered it. We did as a government ask Jerry to come in and we agreed

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that his conclusions were right. It is very important, as the First

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Minister said yesterday, we have secured a referendum. It is going to

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be for a future assembly in terms of the timescale. Let's get this into

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legislation. Let's today recognise the achievements and say, let's get

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on with our borrowing powers, early access, enhancement of the M4

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infrastructure. Let's get those smaller taxes devolved. Let's reform

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stamp duty. Let's unite. Don't let this message go out today that we

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are not in the Assembly, all of us, determined to make the silk

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commission. And the important achievement... It is for the people

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of Wales to decide how we move forward. It is interesting listening

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to everybody talking about more hand-outs. We understand there is an

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issue. But if you use taxation levers positively, you can grow your

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economy. That from the right is what I am all about. It is not... The

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First Minister is must like the ghost in the room. He didn't bother

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to turn up. The point I would make is this, ultimately what we need to

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do if these responsibilities come to the Assembly, income tax powers, all

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politicians should be thinking about how they grow the economy with those

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powers. From the Conservative Party point of view we would be a low tax

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economy. With lower taxation you create more. We have a spending

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agency at the moment in the guise of the Welsh comment. It receives a

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lump of money and dispenses it around Wales. Ministers driving

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their black limousines opening and cutting ribbons will stop if the

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school is shot, the school is to blame. If it succeeds, the

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Government takes the credit. That is not sustainable. It does not make

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for a better government in Wales. I want to talk about the very

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important issue of accountability. Is the National Assembly in a

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position to properly scrutinise spending, if we are talking about

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enhanced powers, varying income tax, is the National Assembly today

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in a fit state to do that? Are there enough assembly members? What is

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your view, Kirsty? The Richard commission did recommend more

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assembly members. I am very aware that going out to the Welsh people

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and asking for more paid politicians is never going to be a popular thing

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to do. What we need to look at is how weird is governed. The right

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number of councillors and assembly members, the right number of MPs. I

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don't think you can look at one arm of the Government without looking at

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representation across the piece. As more powers, from Westminster, we

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are going to have to acknowledge about whether the balance between

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Welsh MPs and assembly members is right. It is the same point that was

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just made. Given the austerity, the cats and the squeeze people are

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feeling at the moment. More money for politicians is not something

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that will be popular. So I think that argument about taking into

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account wider governance issues, how many MPs we have, how much we spend

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on councillors, and if you could increase the number of Assembly

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Members without spending more money overall on politicians, I think it

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would be something you could managed to sell to people. If you are

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arguing for additional expenditure the politicians, given the fuss over

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energy bills for example over the weekend win many MPs were claiming

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its Dawson at amount for energy, I think it will be a bitter pill for

:24:54.:25:02.

people to swallow. There was a capable of taking a view on this and

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making a mature judgement. If you have a governing body and an

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assembly taking on more powers, clearly that implies more work, it

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involves more people, scrutinising more thoroughly. So the case could

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be made for an increase in numbers. In Wales what we need is more

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entrepreneurs not politicians. Ultimately we can look at the way

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the assembly works. We only have two plenary sessions a week and the

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committee deal on Thursday. Constituency work is important but

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to be relevant what is the point in dealing with events on the Tuesday

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if they happened on the Thursday of the previous week. It suits the

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government because they can run wild in their limousines. What we have is

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a maxed out government and I would like to see a shrinkage in the

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number of ministers with God in Cardiff Bay.

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We did win that election and we are in power. We are held to account

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adequately by our partners but we also work closely together to move

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towards accountability. The second Silk Commission will look at whether

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we need to extend our responsibilities and that is the

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time to think about this. You mentioned the second Silk Commission

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so let's have a thought on what you hope the second part of the Silk

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Commission will produce. What are you hoping for? Energy powers are

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key for Plaid Cymru. The ownership and control of the ability to create

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and generate energy, we could use those powers to bring money back

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into the public purse and keep people's energy bills down. Also the

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Criminal Justice System. In so many areas it is failing people in

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Wales. There are no facilities for prisoners in the North and if you

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are young you have to go over the border to prison. There are no

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facilities for women and we could argue that we want fewer women in

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prison but it should be the case that women can be incarcerated if

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they have two the closer to their families. There are a whole lot of

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ink -- areas we would like to see devolved to Wales. I would like to

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see criminal just a smart as devolved, police devolved. I would

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like to see greater clarity of the devolution settlement. There are

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still too many grey areas. We end up with decisions going to the Supreme

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Court which is not good for anybody. I would like to see a clear

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distinction similar to Scotland. We have made a comprehensive solution.

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We identified we are not going to give a running commentary on the

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Silk Commission. We're going to allow them space to the evidence

:28:38.:28:44.

forward. I think we've got a first rate Criminal Justice System and

:28:45.:28:48.

policing does not recognise borders. What we have to do is deliver for

:28:49.:28:53.

the people of Wales. We have got the financial package sorted and we now

:28:54.:28:55.

need to focus on getting a better health service, their dedication

:28:56.:29:03.

system and a better economy. It was a very big step last week so when

:29:04.:29:09.

you look at the second Silk Commission, what are you hoping for?

:29:10.:29:21.

There is a measure of consensus. It is going to be tethered to get the

:29:22.:29:24.

kind of consensus with hard in the first silk report. -- Silk

:29:25.:29:34.

Commission. It is important we go for this reserve powers model so we

:29:35.:29:40.

have the powers and we are clear about it like Scotland. Policing is

:29:41.:29:46.

crucial to us and we have to be very careful about taking further steps

:29:47.:29:50.

in terms of criminal justice. That is for the longer term. It is powers

:29:51.:29:57.

for a purpose. Very interesting debate. It is good of you all to

:29:58.:30:04.

come in. That is it for this special edition. If you have any comments,

:30:05.:30:19.

please get in touch. We will be back next Wednesday. Until then, thank

:30:20.:30:21.

you for watching and good night.

:30:22.:30:28.

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