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'Borrowing powers need to be increased' - Leanne.

Byline: Martin Shipton Chief Reporter

PLAID CYMRU leader Leanne Wood has declared that the "scale and scope" of Welsh borrowing powers needs to be expanded in light of the vote to leave the European Union.

She claims the current Welsh borrowing powers are "out of date before they've even been used".

And she argues the principle of Welsh borrowing was agreed four years ago - but hasn't yet delivered a single penny for Wales due to restrictions on how the powers can be used.

The Rhondda AM is now warning that the prospect of an economic slowdown following Brexit means that the amount Wales is allowed to borrow and invest in infrastructure should be "updated".

The Welsh and UK governments agreed back in 2012 that Wales would get borrowing powers. The subsequent Wales Act 2014 set a limit of PS500m, but said this could only be used to fund an M4 project around Newport.

Restrictions on what the borrowing powers can be used for will not be lifted by the UK government until April 2018, when stamp duty land tax and landfill tax will be devolved to Wales.

The UK government has legislated in its Wales Act 2014 that the PS500m limit can be varied upwards, and implied elsewhere that this will be looked at specifically if and when income tax-sharing powers are devolved to Wales.

Ms Wood has pointed out that the devolution of income tax is still some way in the future, and that action to enable investment in new schools, hospitals and transport links is needed far more urgently.

Plaid Cymru has previously unveiled ambitious plans to boost infrastructure spending through a National Infrastructure Commission for Wales (NICW), arguing that the historic legacy of under-investment in Welsh infrastructure is choking off economic growth in the country.

A higher borrowing limit would allow Welsh Governments of any political make-up to consider a wider range of projects, boosting the construction industry ahead of and during any potential downturn.

Ms Wood said: "Investing in infrastructure is one of the best ways to stimulate the Welsh economy. We face the risk of an economic slowdown following Brexit. But even if our worst fears are not realised, our infrastructure isn't good enough anyway to improve our economic outcomes so that people are better off.

"Events are moving ahead quickly, and we need both the scale and scope of our borrowing powers to now be expanded and updated. By scale, we mean borrowing more than the paltry PS500m currently on offer. By scope, we mean Wales being allowed to spend the money on whatever we want, rather than being dictated to by Westminster."

She said putting off the required investment until income tax is devolved was not an option.

"That might not happen until 2021 and depends on a fiscal framework and detailed negotiations," she said.

"We can't allow schools, hospitals and transport links to not get built during that period.

"We've seen the Commonwealth Games bid pulled, and the size of the Metro put at risk. Infrastructure investment is needed in all parts of Wales, and where possible we must help local companies and suppliers to bid for contracts.

"Expanding our borrowing powers should be at the forefront of the Welsh response to Brexit. Every penny spent on this will create jobs."


'We need both the scale and scope of our borrowing powers to now be expanded and updated' - Plaid Cymru leader Leanne
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Publication:Western Mail (Cardiff, Wales)
Geographic Code:4EUUK
Date:Aug 12, 2016
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