Diolch yn fawr, Mr Rosindell. First, may I apologise to Members for rudely interrupting proceedings to perform my telling duties in the series of close votes we have just had in the main Chamber?
Before the Divisions, I was remarking on the importance of transport links, which is clearly emphasised in the report. Wales is located at the centre of one of the most important trading routes in the European Union, so it is vital, with the ongoing negotiations among our partners at a European level, that there is at least a southern link running through south Wales and linking the Republic of Ireland with Britain and Europe. Personally, I would also like to see a northern link going through north Wales, which would then fund the improvement of transport infrastructure there. I welcome the fact that the Government are actively looking at that, and I am glad to put that on the record.
I want to touch briefly on the bilateral negotiations on funding for the Welsh Government and on the recent Silk commission, which reported as I left on my honeymoon. Both those things impact directly on the Committee’s report. First, on the bilateral negotiations, I was disappointed that there was no reform of the block grant; there was not even a Barnett floor, let alone reform of the housing revenue account subsidy scheme. On the borrowing powers that were announced, the reality is that we could not buy a packet of crisps using the current powers. The Welsh Government Finance Minister has been completely outfoxed, yet again, by the Treasury.
The conclusions of the bilateral negotiations might, however, come into play if the recommendations of the Silk commission are implemented, so their full implementation could be of value. To access the borrowing powers announced in the bilateral agreement, we need fiscal levers to raise revenue, so the more tax-sharing arrangements there are between the Welsh Government and the UK Government, the better. That is why it is imperative that we do not stick just to the minor taxes preferred by the Welsh Government—stamp duty, the aggregates levy and the long-haul airport tax—but devolve sharing arrangements for income tax, which would enable the Welsh Government to have far greater leverage in terms of their borrowing powers. Given that their capital budgets are being cut by 42%, they need those borrowing powers, not only so that they can level out peaks and troughs using fiscal levers, but so that they have power to invest. The current position of the First Minister is therefore completely bizarre, and it is a huge let-down to the people of Wales.
Fiscal powers are important with regard to political accountability, which is something that finds favour with Conservative Members, but the main reason we should have fiscal powers is that they would incentivise the Welsh Government to turn the Welsh economy around. At the moment, given that they get a block
grant, there is no incentive for them to develop it. If they were responsible for raising their own revenue, there would be an incentive to generate wealth to invest in public services.