23/11/2016 The Wales Report

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.