23/11/2016 The Wales Report


The Wales Report is in Westminster to discuss the chancellor's spending review and its impact on Wales.

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Tonight on the Wales report we are at Westminster for a special


programme on today's Autumn Statement. If we will be looking at


the Chancellor's measures considering what they mean for the


people of Wales, as well as looking at Brexit in a Welsh context.


Good evening, and welcome to the Wales Report. The Chancellor has


delivered his Autumn Statement. We will be considering the measures and


setting them in a Welsh context. The most striking figures concern growth


and borrowing, because growth forecasts have been downgraded.


Government finances will be ?122 billion worse off and borrowing will


increase and Government debt is predicted to increase to over 90% of


GDP. One specific announcement, bringing an extra ?400 million to


Wales to be spent on infrastructure projects of the next five years.


It's more than enough for us to talk about. You can join the discussion


on social media. Here are my guests. The Wales Office minister and


conservative MP for... Welcome to you all. ?400 million for Wales and


infrastructure. The greater scheme of things, doesn't sound like -- a


lot. This is on top of the fact that we have had it said this week that


Wales is not underfunded any more. On top of that, there is an extra


400 million pounds coming down the line. Anyone should welcome that


sort of investment in Wales. We need to make sure the economy responds to


the challenges we now face, in terms of dealing with our exit from the


EU. I trust the Welsh Government to make sure they spend the money


wisely. The point about underfunding is not about infrastructure


investment. He made it very clear that Wales is no longer underfunded


in comparison with England. On top of that we are now having investment


into capital spending in Wales. On top of that as well there is ?500


million committed to the city deal in Cardiff. He has that progression


of the city deal which we are trying to get together for Swansea. And


there is the fact that we are still waiting for proposals from North


Wales. These are on top of what the Government receives. I think these


are very positive from a Welsh perspective and it is important that


the Welsh Government priorities spending in a way that will protect


Wales moving forward. What you think the priority should be? It is


important to recognise the fact that this is investment over five years.


It is also a consequential investment over the UK. It doesn't


strike me that the Welsh Government have been banging the drum for Wales


to get this investment. Clearly, extra investment is welcome across


Wales as it is only a drop in the ocean in terms of the cuts that we


have had to the Welsh apartment budget since 2010. How much money


would labour invest, given the circumstances we are now in, which


are less than favourable? The circumstances we are in as a direct


result of the failures of the coalition and how will it --


Conservative Government. If we had a Labour Government would be in a


different position and we would not have seen a significant cuts that we


have seen over recent years to Welsh Government budget and public


services generally. ?436 million over five years. Someone said to me


earlier today it is better than nothing. But what should the level


of investment be in the context we are in right now? He's putting the


best china he can on these figures, which are Barnett consequentials.


Plaid Cymru has considered this from a needs -based approach and the


infrastructure commission needs something in the way of 700 million


a year. It is worth bearing in mind that this is only 0.5% of what is


being spent on the HS two project. What we need in terms of


infrastructure, this is just scratching the surface. Were going


to see money spent on the south Wales metro, there are already


projects in the pipeline. But if ever an economy needed a boost it is


the Welsh economy. What you think? This is small beer for England and


also small beer for Wales. We get the spread of the Barnett


consequentials from that. If you look at it in terms of actual terms


it is not a great deal of money that you can do a great deal of things


with. I think the challenge to the Welsh Government is going to be


heard as it managed to build that money to something bigger by using


perhaps private sector investment, borrowing powers, all of that to get


a big package together for all the investment is the need to be done


for instant infrastructure, railways, broadband etc. I think if


you've only got a small amount of money you are going to get and we


know why, what you should do is try to match the five that by pulling as


many livers as you possibly can to create as much opportunity as you


can. Working with the private sector and the borrowing powers, put it all


together and see if you can make a real difference rather than just


simply writing small checks the small things. The problem is the


Chancellor has just acknowledged that growth has been sharply


downgraded. If you look into, three, four years' time, people will argue


about the Brexit effect, but the figures are there. Are you not a


lounge by -- alarmed? Clearly there is a concerned and we need to


interest in infrastructure where possible support the economy. But


the estimate for economic growth for this year has gone up from two to


2.1. And for next year it is still better than the vast majority of


European countries. The last thing we should do is talk ourselves into


a recession. We need to be careful about that. In terms of my point


about using the money creatively, that is something we have done with


the Cardiff city deal where Welsh Government have worked with


Westminster to boost communities in the valleys. That is money on top of


the fund that we already have. To claim that ?436 million is small


beer is unacceptable. The Government is saying the ideas for the


development of the Welsh economy should come from the communities in


Wales. In North Wales, the ideas for the electrification of the railway


line, and others, are all coming from North Wales economies. The


reason we are having such small amounts of money put into the system


is because of the forecast that are dropping us forward of this


situation we find us in. On the small amount of money, I think it is


important for opposition parties, when they say this is a small


investment, they should be brave enough to say how much would they


invest. What I would say to you is that we would need to get ourselves


out of, and I'm sure we will discuss it later, the Brexit problem that we


find ourselves in. All the uncertainty and the downgrading of


growth, everything that flows from it, we are in a very uncertain world


and that is why we have an uncertain aspect from the Chancellor. We will


talk about Brexit and whether we can get out of it. On these figures,


because people will be watching, thinking what can 400 million pounds


over five years do? What are your thoughts? How should this be spent?


I think there are infrastructure projects in Wales needs. The walk


south wales metro... There is a need has capital investment in North


Wales and across Wales. We are in a difficult situation, there is lots


of uncertainty because of the withdrawal from the European Union,


and this money go some way towards providing some reassurance and some


certainty in terms of jobs. The Welsh affairs committee were told


that if there was uncertainty about Brexit money there would be


uncertainty about the south wales metro as well. It is too early to


see if this money will make a difference to project ready in the


pipeline, or if it will make a difference to new projects. That is


clearly very important. The Treasury has been very clear that when there


is a commitment from the Welsh Government, as long as it is seen in


the national interest, that will be. If the scheme is under way by the


time we exit the European Union it will be protected. If it is


underway. Where is this going to be allocated, when will it appear in a


statement or a budget? That is an issue for the Government. This is


crucial, European funding committed prior to our leaving the European


Union will be protected and underwritten by HM Treasury. I think


it is important that we do not again start talking negatively when people


are trying to put together plans to make sure that the best use of that


European money... One of the things that struck me today with the OBE


are is the sheer uncertainty. We have seen this downwards drop. In


two or three years we don't know where we will be. We're talking


about this as a commitment but where will the come from? The big issue


for me is that the Government have only given reassurances up to the


point we exit the European Union. What happens after that is a huge...


It's very clear we would have no certainty about European funding


streams after this round of funding. That is whether we stay in the EU or


not. There is clearly a layer of uncertainty. We should pause for a


second, because the Autumn Statement was supposed to deal with the sharp


challenges ahead for Brexit and those negotiations will play a huge


part in defining those challenges. They concern access to the single


market and the free movement of people. How can the priorities be


weighed up and what would be in Wales's best interests? Before we


discuss that letter is here to opposing voices.


I think about 40% of Welsh exports go into the single market. Obviously


it is vital. We sell about ?1 million into Germany. It is a small


part of our business, but that sales going into Germany has created jobs


in South Wales. It is in the interests of the EU to reach a deal


with us. It is not necessarily the best thing for arson. They need to


export to us then more than we need to export to them. The focus on


Europe is important but they will have to go on training with us and


we will find a way to sell to them. I might not. If some European


countries start to bring in the protectionist attitude by imposing


higher import duties, we won't be able to import to them. It is not in


Europe's interest to give us favourable terms. The question is


pushing us in a direction of Partick which is where the debate has gone.


A lot of economists don't stink about the minutiae of detail that


selling into new markets causes a company like mine. At the moment it


is easy and if we could just find a quick way of sorting out that


problem called Brexit we could move forward and continue to create jobs


in Wales. If we just go for free trade and say, look, we have had


enough of expensive food and cars will, we are going to open ourselves


up to the Wales -- world. I don't think we should accept the


free movement of labour in order to get better access to the European


market. Our country has relied on an immigrant labour force since the


times of the empire. We need to have people coming in. The free movement


of people is working well in our favour. Don't think we will struggle


to recruit. The rate at way the population is growing is


extraordinary and it is crowded. I would like to have a migrant labour


force. People who move house to work are keen and enthusiastic and


ambitious. I think the question we need to answer is why should we give


Romanians more rights to move to Britain than Australians. Just


because they're Romanians and not Australians. That is what the EU


imposes on us. What I need out of the negotiations is to find a


solution as quickly as possible. In the meantime let's develop


arrangements with other countries, but more than anything, I do need a


good level of employees and I would like to see free movement. But with


sensible restrictions on how much they can exploit the welfare state.


I would be unhappy if we ended up with the free movement of labour and


very little control over any other policies that we had, because we had


to concede all these things to the EU in negotiations. We want to have


sovereignty back. If we don't get sovereignty back that, would be the


worst possible outcome. So there we had a businessman woman and the head


of economics at Cardiff University. Not many prisoners taken there in


terms of discussion. Back with my guests. They talked about the single


movement and free movement and negotiations. Let's start with the


single market and the access we need. Liz, what is Plaid Cymru says


about the prospect of access to the single market, given as I'm sure


Plaid Cymru does, that Brexit means Brexit. As Laura said on the clip


there, that for Wales with a 40% export, anything less than full


membership is a disadvantage. Access or full membership. Full membership.


But that comes with conditions that are politically impossible. We


cannot perceive a situation for the Welsh economy that would be better


other than with full membership. If we accept that we are in a position


where it is not possible for Theresa May to accept that, are you saying


that full access on some terms s would be acceptable. Full membership


is our stand point. That is not realistic what, where do you go. We


must look at situation where the giving that Wales has an exporting


economy, the most advantageous form of that economy. Political reality,


if we accept and it is a big if, if we accept that the free movement is


a non-negotiatable element for the Conservative Party, where does that


leave your view on the single market? For a start, the words are


free movement of workers. And I think that there maybe room for


negotiation on that and there may well be if we go into the


negotiations in a correct way and being able to accommodate and for


them to accommodate. Because it has affected other countries. There is


room for a dialogue. But clearly Wales need to be as close as


possible o' the European Union, not just for our manufacturing, but


simply because our agriculture output. A huge amount of lamb is


exported to Europe. It is not go anywhere else much and the tariff


barriers they would face on free market terms would mean it would


decimate the agricultural industry in Wales and I think that we need to


find a cheesest poss -- closest possible to get us into the EU. Does


Labour see a close route. Where would you like this to end up? I


think Wales and the UK voted to leave the EU and we respect that.


What we have to make it work for Wales. Businesses that I speak to in


my constituency are telling many ethat access to the single market is


vital and it has to be a red line for businesses across Wales. Because


the jobs and risk to business associated with that could be


catastrophic. What is your view on freedom of movement, do you think


that is something that will have to be put on the table and it will be


part of bargaining process? There are businesses in Wales that have


operations across the EU and for them the free movement of people is


something that is supported. I think you know it is something as far as


Wales is concerned, our public services, they have a huge migrant


population within the public services. So that free movement is


something again you know it is something we have to negotiate,


there was a view within the referendum campaign on that. But it


is a sensitive issue. Do you say to people who say, this is one of the


elements, we don't like free movement and that is why we


supported leave. We have to sort of discuss it and raise awareness of


the implications of you know if we don't have access too that single


market, what the repercussions and free movement maybe a condition and


we have to build that into the negotiations. Liz? Again being out


on the street in the area asking people about what mattered and free


movement and immigration, but the realisation, when what would happen


to the NHS and the people who work there, oh, they can stay. That is


fine. What is interesting is we are having this conversation about what


this does imply. To me, in Wales, and in communities, what you're


seeing is a long-term economic decay and people are so dismayed about


that that immigration Israels what has taken their -- immigration is


what has taken their dissatisfaction, but with we have to


job to make sure that community have hope and immigration is a side issue


to some of the economic issues. Is that right? I think we are having a


discussion which could have been had before the referendum and people in


Wales voted clearly 52.5%. I was on the Remain side, but the message was


clear. I don't buy the argument that people didn't understand that


freedom of provement came and -- movement came with it. I want as


comprehensive an access to the market, but full membership will be


difficult, the unless we say to people, we are not going to take on


board the message you sent us. We need to be aware of the fact that we


are dealing with a democratic decision taken by people in Wales,


17 of the 22 local authorities returned a leave vote in Wales.


While I accept entirely migrant work verse made a huge and positive


contribution, it is the case the people who have suffered from the


freedom of movement has been the lowest paid and people in good jobs


have not been subject to competition from migrant workers, but people in


the hospitality industry have been. People working in the meat


processing sector. So there has been an impact upon elements of community


and there has been a reaction. Our job is to try and deal with the need


to have access to the single market, whip is as comprehensive as


possible, but acknowledging the decision taken by people. We don't


want to be too negative, because the negotiations with Europe are


starting from a position where we have full access, tariff-free access


and for every threat and tariff from Europe, then there will be a


corresponding possibly threatened action. That is where we need to


really work very hard to prioritise what is important for Wales. That is


what I'm doing in my Welsh office capacity. But we shouldn't make the


situation seem as if it is the choice between freedom to access the


market or full tariffs. That is not where we are starting the in. From.


It would be good to know what the Government's position is. We have no


idea what their landing point is or their starting point. Perhaps you


have given us an insight of where Theresa May would start. I'm not


going to give any running commentary on this issue. There are two factors


that the OBR brought out. First, it is assuming a 10 year decline in


trade in the United Kingdom. Ten years. That is what it is saying.


That is an assumption on the basis of information from government. That


is a good point. That is based on the fact that we don't sign any


other trade treaties. They can only look at what we have now. They have


no idea where we will be, any trade deals. You're reinforcing my


statement that they have made an assumption and you say based upon no


information from the Government. If the Government is keen to do this


work I'm sure we could come to Parliament and make that decision


and come to an agreement as to what we want to see on matters of


principle. It is the concern that is causing the problem. Uncertainty for


business, workers, for nurses from other countries, they want to know


and we want to know and the country needs to know where we are going. It


is a poor poker player who shows their hand before the start. It is


important that we understand that the Government has a mandate to try


and put together a deal for the UK within the EU. I don't think it fair


to say we should provide a running commentary. It is not a running


commentary. We are asking about the details of tariffs on specific


goods. It is strategy. Have been challenged on the tariffs on lamb.


That is detailed. If I could, one point, the uncertainty is affecting


the value of the pound and that affects, the former chief of


Executive of Sainsbury's said an increase. They would be happy with


that decline. With a country like Wales, that 5% on household


requirements and food and supermarket products will have a


real impact. I don't dispute nachlt that You have to look at it in the


round. For businesses the uncertainty is the worst part. We


are not talking about a running commentary, but some sort of lines


of communication as to what the Government, what is their starting


points and you know my view is that initially was that I thought the


Government were holding things back, but I think they don't know and


don't have a plan. Again what is the starting point? It is clear we have


announced we are going to take into English law the entirety of the


regulations. Why? In order to ensure on the day we leave we will have the


same regulations as we have now. And we are starting from be point where


we have tariff free access. Why did Boris Johnson announce we are


leaving the customs union. Everyone slaps him down. He is the Foreign


Secretary. Do they know? Has the Government got a sense of direction.


What is the plan. At least we could have a starting point. I have given


you the starting point. Access to the single market. On the day we


leave we will have the same regulations in place and the same


rules and tariff position. Now the negotiations will have to decide


whether we move from that, but that is the point of negotiation process


and you are asking me questions about elements of market. You're


highlighting the fall in the pound, but exporters have been pleased with


the fall in the pound. So it not a one way street. I would stress


again, the projections for growth this year, when people said we would


go into recession. It has been upgraded. We have a minute left,


because you have filled the time with your lively debate. A quick


word on where you think we will be, because was know have a new budget


arrangement and Autumn Statement and that will be a spring staiment. The


Chancellor announced that. By the next proper budget, do you expect


that the projections put out today by the OBR, that were a rise in


borrowing and a fall in growth, that they will be adjusted as the Brexit


effect fakes effect, or are you confident the direction is one we


can trust. To expect that in four months, I'm confident there won't be


much movement. I'm not confident, the Government have failed on every


target they have set and growth is down. There is no optimism and


today's announcement does little for ordinary people in Wales. Are people


confident? Are we feeling there would be growth? No. There is no


certainty and the markets and everyone will move in a negative


direction. All the prospects are for a down turn and I'm worried we are


going to have the same thing next year. Do come back all of you and


keep me company again. So that is all we have time for. Thank you to


my guests and if you want to get in touch with us about what has been


discussed, you can e-mail us. Or you can follow us on social media. We


are back next week. Thank you for watching. Good night.


We've challenged Radio Cymru's Aled Hughes


to promote his programme whilst going down a zip wire at 100mph.


Huw Edwards asks the questions that matter to you about your job, your health, your future. Calling to account the decision-makers here in Wales and beyond our borders too, each week the team bring you in-depth reports on pressing issues that matter to the lives of everyone living in Wales.

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