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Politics

Short Circuit for Wales

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THE WELSH GOVERNMENT has been accused of misleading the public, ambushing investors, and using the Circuit of Wales project as a political football intended to shore up its vote in the South Wales Valleys after refusing to back the project last week.

NO TO GUARANTEE

The Welsh Government had been asked to provide a loan guarantee of £210m to private investor, the insurance giant Aviva. Had the Circuit gone bust, the Welsh Government would have been left liable for the loan balance but Aviva would have retained ownership of the Circuit.

Last week, Economy Secretary Ken Skates announced that the Welsh Government had decided against backing the project by providing a guarantee to key investor Aviva, claiming that late in the day the Welsh Government had received advice from HM Revenue and the Office of National Statistics that financing the deal would amount to state aid and affect Wales’ capital grant from the Westminster Government.

Mr Skates claimed that the presence of the Circuit of Wales on the books would have meant education and health services would have had their budgets squeezed.

However, Mr Skates’ version of events has been met with withering scorn from opposition parties who say that the Welsh Government’s version of events is disingenuous nonsense and that the Welsh Government has twice delayed pulling the plug on the project for Labour’s own electoral benefit .

INDEPENDENT INQUIRY CALL

Both the Conservative Party and Plaid Cymru have called for an independent inquiry into the Welsh Government’s conduct of the Circuit of Wales deal.

Andrew RT Davies, the Conservative leader in the Assembly said: “The Circuit of Wales has been a Welsh Labour car crash of epic proportions.

“After so many years of uncertainty and false hope, it’s clear that Welsh Government have plenty of questions to answer.

“Whilst I have had longstanding concerns that the Heads of the Valleys Development Company may not be right vehicle for this project, it is hugely disappointing to see it crumbling away in such dramatic and overnight fashion.”

Plaid Cymru Shadow Cabinet Secretary Adam Price claimed that evidence has come to light that the First Minister may have misled the public.

Adam Price said there was ‘compelling evidence the Welsh Government has been guilty of serial mendacity ‘.

“Sadly this project has been characterised by a series of inaccurate and misleading statements made by the Government, ostensibly to justify its own position in the face of potential criticism ,” he added.

“An email written by an Aviva senior director – dated 14th July last year – pointed to the false assertion by the Welsh Government ‘that we requested a 100% underwrite a few days before the rejection (of the first proposal in April 2016), when in fact this deal had been worked up with the Welsh Government (through civil servants) for many months and nothing in our funding structure changed in the run up to the announcement’.”

Mr Price continued: “I have an email from Welsh Government presenting a proposal based on a Welsh public sector guarantee of the debt dated January 26th 2016, confirming Aviva’s assertion. And yet speaking in Ebbw Vale on April 11th last year, as reported by the Western Mail, Carwyn Jones repeated the falsehood when speaking about the rejection of the proposal: ‘It was in the last few days beforehand. We weren’t to know the guarantee would be inflated’.

“These are not isolated instances. They are part of a pattern of duplicity that have characterised the Welsh Government’s approach to this project throughout, constantly shifting goalposts and covering their tracks.”

Mr Price called for an independent inquiry to investigate the matter: “Since the First Minister himself can now be shown also to have misled the public on the Circuit of Wales – all the more pointedly as it was in Blaenau Gwent and in the middle of a keenly fought election campaign – it’s no longer appropriate that he makes this decision as he will now need to be a subject of that investigation, not its judge and jury.

“As things currently stand no-one – business, media, Parliament or public – can be confident our Government is being straight with us. Only a full independent inquiry can begin to rebuild public trust. “

HAMILTON SLAMS GOVERNMENT INSULT

Neil Hamilton AM, UKIP Group Leader in the National Assembly for Wales stated in the Senedd chamber: “Are we really expected to believe, that the government accounting conventions about whether something should be classified as public expenditure or private by the ONS and the Treasury have come as a blinding revelation yesterday, and the cabinet was totally unaware of these conventions hitherto?

“It is an insult to the people of Blaenau Gwent that such a shoddy excuse has been used and a disgrace that so much public money and time was wasted on this decision.

“The Welsh Government now plans to build a £100m automotive business park in Ebbw Vale. What we have now is a proposal from the government to spend £100 m over ten years. Shedloads of money to build a series of empty sheds,” continued Mr Hamilton

“Interestingly the Welsh Government announced this decision after the election; a decision beforehand would clearly have damaged Labour in the polls. What a cynical political decision, a terrible betrayal of the people of Blaenau Gwent and a shoddy excuse for what amounts to the replacement of the Circuit of Wales with a Scalextric set.”

Appearing before the Public Accounts Committee the day before the Welsh Government pulled the plug, a senior Welsh Government civil servant, James Price, told Committee members that he regarded the £9.3m as a fair price to pay for the due diligence that it had enabled the Welsh Government to undertake and suggested that the Auditor was wrong to decide that business risk assessments carried out before providing the money were deficient.

One thing that emerged from that Committee meeting was the broad agreement that due diligence had to take place before the Welsh Government exposed itself to further risk. It was surprising, therefore, that the following day in the Assembly one of those members who had been singing the praises of due diligence taking place committed a complete about face.

Deriding the Welsh Government’s involvement as being an exemplar of ‘the dead hand of government’, UKIP’s leader in the Assembly Neil Hamilton appeared to have forgotten his words of little over twenty four hours earlier: ‘Personally, I think it was a very reasonable punt you took (with the grant and loan). Now we’re talking about much, much larger sums of money, it’s right that a considerably greater degree of examination be undertaken’.

COMPANY DENIES GOVERNMENT CLAIMS

A spokesperson for the Heads of the Valleys Development Corporation (HVDC), the company behind the Circuit of Wales, said: “Along with my team and commercial partners, I am hugely disappointed and saddened that the Welsh Government has failed to support The Circuit of Wales, what would be a game changing development for Wales and in particular the people of Blaenau Gwent.

“We strongly disagree with the decision and the rationale behind it.

“We have always believed passionately, and continue to do so, in this project’s ability to transform and provide opportunities and hope to one of the poorest parts of the UK, not just Wales. The project is totally defined, finance is in place, and construction and hiring could start immediately.

“My team and I will now analyse the Welsh Government’s reasons not to support the development and are actively seeking additional clarification from them. We will then very shortly issue a detailed response before deciding on our next course of action.”

That detailed response, when it arrived, savaged the Welsh Government’s reasoning and claimed that the reasons given to the Senedd for refusing to back the deal were either wrong, specious, or had not been raised with the developer or its investors. In addition, the statement revealed that the Economy Secretary had not met with representatives of the company for over twelve months before making his decision.

A spokesperson for HVDC said: “ This is a real loss for the people of Ebbw Vale, the immediate community and a missed opportunity for Wales as a whole. This is a project that has been totally defined; it is fully financed (with finance in place) with construction and hiring ready to start immediately.

“At a time when the Welsh Government is trying to demonstrate that Wales is ‘ppen for business’, the rejection of this significant infrastructure project will do little to breed confidence within the private sector for future investment in the country.”

Most tellingly, perhaps, HVDC made a concerted attack on the Cabinet Secretary’s assertion there was a very significant risk that the full £373million debt of the entire Circuit of Wales project would be classified against Welsh Government capital spending.

The statement from the Company expressed amazement at the lack of notice given to it that any problem had arisen: ‘The company was never informed or made aware of this ONS and HM Treasury advice during the due diligence process. We were promised by Welsh Government officials that we would be consulted if any significant issues arose during due diligence and given an opportunity to respond.

‘We were not notified that this was a serious roadblock prior to Tuesday’s meeting and never given a chance to respond.

‘The Welsh Government has known about the latest structure of this project since well before February 2017 and could easily have obtained clearer guidance from Treasury and ONS prior to Tuesday’s meeting and informed us’.

The spokesperson continued: “We believe it is important for the people of Blaenau Gwent to have the details of these discussions with ONS and HM Treasury disclosed to the public. What were these discussions, who were they with and when were they undertaken?

“ We wholeheartedly disagree that the support for The Circuit of Wales would be on balance sheet and would require the Welsh government to limit its budget and compromise the building of schools and hospitals .”

The company also claimed that the £100m technology park – funded by public money – announced by Ken Skates as a sop to Blaenau Gwent was scheduled to cost £150m of wholly private money and be delivered in two years: not the ten announced by the Cabinet Secretary in the Senedd.

SCHEME UNDER SCRUTINY

However, the scheme has been the subject of scepticism for some time.

A BBC investigation for soon to be scrapped current affairs programme Week In Week Out, cast doubts on whether or not the company could achieve anything like the promises it had made either in terms of regeneration of Blaenau Gwent or in relation to delivering on its promises regarding the proposed facilities within the time and budget specified. Moreover, the same documentary revealed that £35,000 from HVDC – a company partly funded by the Welsh Government – had been used on landscape gardening on the home of the person fronting the scheme, Michael Carrick.

An investigation by the Auditor-General for Wales criticised the Welsh Government both for a loan guarantee a £7.3m provided to HVDC and a £2m grant provided as seed money. The Auditor discovered that part of the money had been used to acquire a small motorcycle manufacturing business in England and ruled that there had been insufficient regard as to whether the uses to which public money were being put were delivering value for money for the public.

Initial claims that 6,000 jobs would be created and claims of businesses flocking to set up working partnerships on the Circuit of Wales site had also come under scrutiny.

A reassessment of the project carried out by the University of South Wales as part of the due diligence process suggested that 2,000 jobs fewer than claimed would be created. In addition, jobs during the construction phase of the project would be temporary, with the Circuit ultimately employing around 150 full time staff, while the remainder of jobs would be created in spin-off enterprises over a longer period of time.

As this article was being prepared for publication, Michael Carrick, told BBC News: “We haven’t given up on it and I’m hoping government hasn’t.

“The project is too important to walk away. We’ve got the support of our investors, we’ve got the support of our development partners and we want to make it work for government and for the valleys.”

Whether Mr Carrick will be able to overcome the deep reservations of the Welsh Government and proceed with the scheme with their backing is open to question.

Whether the HVDC will be able to develop the Circuit of Wales on the scale planned – or at all – without that backing, is highly unlikely.

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Lib Dems slam ‘botched’ scheme

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THE WELSH Liberal Democrats have slammed the Conservative Government for their “hapless treatment” of EU citizens after the Home Office released guidance on the new EU Settlement Scheme.

The Home Office has confirmed that for the duration of the trial period, until 30 March, EU citizens applying to stay in the UK must either use an Android phone or travel to one of 13 ‘document scanning’ centres instead.

For Holyhead, the closest ‘document scanning’ centre is Trafford.

According to an analysis by the Welsh Liberal Democrats, EU citizens travelling from Holyhead would face costs of £55 on the train for at least a six and a half hour round trip. The drive would be a 224-mile round trip costing around £56 in fuel.

The only document scanning centre in Wales is in Caerphilly. Travelling from Pembroke to Caerphilly and returning the same day by rail would cost £32.10 (the cheapest available fare at the time of enquiry), the cheapest off-peak fare from Aberystwyth would be £77.10 return. By car at an average of 40mpg, the cost of travel would be at least £27 to and from Pembroke, while from Aberystwyth the cost would be at least £25. Both car journeys represent round trips of over 180 miles.

Welsh Liberal Democrat Leader Jane Dodds said: “Too many people in Wales are deeply anxious about their right to stay. Many of them fill vital roles in the health service, our schools and the tourism sector. They want to register as soon as possible, but Theresa May’s hapless treatment of EU citizens could result in a new Windrush scandal.

“For anyone who doesn’t have an android phone, this botched scheme means they will have to travel. For people in Holyhead, that means facing a 224-mile round trip and paying over £50 for the privilege. This postcode lottery is simply unacceptable.”

Liberal Democrat Home Affairs Spokesperson Ed Davey MP said: “Following significant pressure, the Prime Minister said there will be no financial barrier for any EU nationals who wish to stay. How long did that commitment last?

“It is Conservative Ministers who have made a mess of Brexit. They should either pay the cost for EU citizens or change the application system and ensure EU citizens are made to feel welcome in the UK.

“Ultimately, the best way to avoid all of this mess is by giving the people the option to remain in the EU with a final say on Brexit.”

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Retailers’ no deal reality check

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THE HEADS of the UK’s major food retailers, including McDonald’s, M & S and Asda, have written to MPs and dramatically spelt out their view of the risks of leaving the EU without an agreement.

The warning comes shortly after the revelation that Britain has begun stockpiling food, fuel, spare parts and ammunition at military bases in Gibraltar, Cyprus and the Falklands in case of a no-deal Brexit.

With all contingency plans routinely labelled ‘Project Fear’ by those Brexiters stuck on transmit instead of receive, the retailers have taken a significant risk in sticking their collective head above the parapet by trying to address a substantial issue which is rather glossed by those proclaiming the benefits and underplaying the downside of a crash out Brexit.

The letter is backed by the British Retail Consortium, which represents over 70% of Britain’s retailers by turnover.

The Government said that it was taking special measures to minimise the impact of a no-deal Brexit on supermarkets’ suppliers and insisted that food was not going to run out as a result.

“The government has well-established ways of working with the food industry to prevent disruption and we are using these to support preparations for leaving the European Union.”

The Food and Drink Federation, which represents thousands of food processors and manufacturers, has said a no-deal Brexit would be a “catastrophe”, with uncertainty undermining investment and constraining businesses’ ability to plan and export.

DEAL OR NO DEAL: THE LETTER

On behalf of our businesses and the wider food industry, we want to highlight to you the challenges for retailers and the consequences for millions of UK consumers of leaving the European Union without a deal at the end of March. While we have been working closely with our suppliers on contingency plans it is not possible to mitigate all the risks to our supply chains and we fear significant disruption in the short term as a result if there is no Brexit deal. We wanted to share with you some practical examples of the challenges we are facing.

Our supply chains are closely linked to Europe – nearly one-third of the food we eat in the UK comes from the EU. In March the situation is more acute as UK produce is out of season: 90% of our lettuces, 80% of our tomatoes and 70% of our soft fruit are sourced from the EU at that time of year. As this produce is fresh and perishable, it needs to be moved quickly from farms to our stores.
This complex, ‘just in time’ supply chain will be significantly disrupted in the event of no deal. Even if the UK government does not undertake checks on products at the border, there will still be major disruption at Calais as the French government has said it will enforce sanitary and customs checks on exports from the EU, which will lead to long delays; Government data suggest freight trade between Calais and Dover may reduce by 87% against current levels as a result. For consumers, this will reduce the availability and shelf life of many products in our stores.

We are also extremely concerned about the impact of tariffs. Only around 10% of our food imports, a fraction of the products we sell, is currently subject to tariffs so if the UK were to revert to WTO Most Favoured Nation status, as currently envisaged in the no-deal scenario, it would greatly increase import costs, which could in turn put upward pressure on food prices. The UK could set import tariffs at zero but that would have a devastating impact on our own farmers, a key part of our supply chains.

Our ability to mitigate these risks is limited. As prudent businesses we are stockpiling where possible, but all frozen and chilled storage is already being used and there is very little general warehousing space available in the UK. Even if there were more space it is impossible to stockpile fresh produce, such as salad leaves and fresh fruit. Retailers typically store no more than two weeks’ inventory and it becomes difficult to restock stores if the supply chain is disrupted. We are also attempting to find alternative supply routes but there are limited options and not enough ferries, so this could only replace a fraction of the current capacity.

We are extremely concerned that our customers will be among the first to experience the realities of a no deal Brexit. We anticipate significant risks to maintaining the choice, quality and durability of food that our customers have come to expect in our stores, and there will be inevitable pressure on food prices from higher transport costs, currency devaluation and tariffs.

We are therefore asking you to work with your colleagues in Parliament urgently to find a solution that avoids the shock of a no deal Brexit on 29 March and removes these risks for UK consumers.

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WG votes down another rights Bill

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THE WELSH Government has voted down a second Private Members Bill in a week, leading to an angry reaction from the Welsh Conservative Party.

Welsh Conservative AM – Darren Millar – slammed the Welsh Governments ‘tribalism’ as a key contributor to its failings in Wales, and described its rigid approach to politics as ‘comparative of an authoritarian regime’.

Last week, The Herald reported on opposition AMs’ fury that the Welsh Government voted against Assembly Member Paul Davies’ private bill which aimed to ensure increased support for autistic people of all ages, by addressing issues such as health and social services, educational outcomes, access to housing, and employment and providing rights of statutory redress when services fail.

The Older People’s Rights Bill was proposed by Mr Millar, and designed to ensure that older people in Wales were protected, promoted and respected by public sector decision makers.

The Bill was backed by the Older People’s Commissioner, the Equalities and Human Rights Commission, Age Cymru, Age Connects, and the Cymru Older People’s Alliance, amongst others.

Proposals for Mr Millar’s Bill had previously received cross-party support, and the Welsh Government supported a motion which was agreed by the National Assembly for Wales on 12th January 2016 to bring forward legislation to protect and promote the rights of older people.

GOVERNMENT REJECTS STATUTORY RIGHTS

Notwithstanding the Welsh Government’s previous position, it once again waved the shroud of wanting to deal with issues in a holistic way without resorting to legislation ‘at this stage’.

Fear is growing that the Welsh Government is fearful of enacting legislation that confers rights to individuals, preferring instead to listen to service providers whose services might not withstand close scrutiny and a rights-based approach to ensuring compliance with standards.

Speaking in the Assembly, Darren Millar said: “The purpose of the Bill is to build on Wales’s excellent track record to date by embedding a rights-based approach in the development, planning and delivery of public services that affect older people in Wales.

“If given permission, I will seek to consult with stakeholders to develop a Bill that will further enshrine the rights of older people within Welsh law, by placing a duty on Welsh Ministers to have regard to the United Nations Principles for Older Persons when making decisions that may impact upon older people in Wales; that will provide for the ability to extend that due-regard duty to local authorities, health boards and other Welsh public authorities; that will place a duty on Welsh Ministers to promote knowledge of and understanding of the UN Principles for Older Persons; and that will require Welsh Ministers to publish annual reports on their compliance with their older people’s rights schemes—something that doesn’t happen at the moment.”

The proposed legislation was very similar to the Rights of Children and Young Persons (Wales) Measure 2011. A Bill which passed the Assembly with little controversy.

Mr Millar continued: “We embarked upon this journey a number of years ago and we can deliver and pioneer a new rights-based approach for older people’s rights here in Wales. We’ve got an opportunity to develop legislation that will result in practical improvements in the decision making and delivery of public services, that will raise awareness of older people’s rights and give them recognition and status, and that will empower those hundreds of thousands of older people across Wales to access those rights.”

THE TIME IS NOT RIGHT

Responding on behalf of the Welsh Government, Minister for Local Government Julie James suggested that older persons’ rights are already sufficiently protected by a range of Welsh Government measures, including its totemic Wellbeing of Future Generations Act.

In any event, the Welsh Government did not regard the time had yet come for legislation – rather ignoring the point that the current First Minister supported such legislation when he was Health Minister.

Ms James concluded: “While I strongly support the sentiments behind this Bill, the time is not right for this particular bit of legislation. When we do legislate, we should do that holistically for the whole of society and in a way that identifies the needs of all disadvantaged groups.”

Supporting Darren Millar’s bill and suggesting that it should progress to the next stage so elements of it could be incorporated into future Welsh Government legislation, Plaid Cymru’s Helen Mary Jones pointed out: “Unless individuals have mechanisms they can use which don’t depend on the Government and that do not depend on an independent commissioner, but that they can use themselves to enforce those rights, those rights at their very end may not be enforced.”

David Rowlands (UKIP) said: “It is incumbent on statutory authorities to ensure that the core mainstream services are available to older residents in the same way that they are for other people… If children are protected in law, why not the other most vulnerable group, the old?”

THE PAYROLL VOTE VOTES

Concluding the debate, Darren Millar noted that an invitation extended to both himself and the older people’s commissioner to meet with the Government on February 6 to discuss its ‘holistic’ plans for the future was made only the day before the scheduled debate.

As usual, Labour AMs, including ‘independent’ government minister Dafydd Elis Thomas and Lib Dem Kirsty Williams, followed the government line. Two members abstained, Bethan Sayed and Jenny Rathbone. Apart from Ms Sayed, all other opposition parties supported the Bill.

It fell by 27 votes to 21.

Speaking after the vote, Darren Millar said: “This is not the way politics should be handled in this country, and it’s not the footing that the First Minister should start on with his new Government. It’s a tribal attitude and it is holding Wales back.

“The Welsh Government does not have a monopoly on good ideas. Both this Bill – and last week’s Autism Bill – are non-contentious proposals which had widespread cross-party and stakeholder support.

“We are supposed to be a democracy where the ideas of all elected representatives, regardless of their party politics, can be treated with respect, but in Wales, under this regime, that clearly isn’t the case.”

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