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.
First Minister calls for a second EU referendum
THE FIRST MINISTER of Wales, Mark Drakeford, has called for a second EU referendum in response to the imminent change in Conservative leadership.
After the results of the European Parliamentary Elections were announced, Mr Drakeford issued a statement, saying: “I warmly congratulate Jackie Jones on her election as a member of the European Parliament. Jackie, along with Matthew [Dorrance], Mary [Wimbury] and Mark [Whitcutt] served our party as candidates in what has been the most challenging of circumstances.
“Ever since the referendum in 2016, the Welsh Government has respected the result by arguing for a form of Brexit which would protect Welsh jobs and our economy. Labour colleagues in Westminster have done the same, most recently in negotiations with the UK Government.
“The election of a new Conservative leader changes all of that. It eliminates the chances of any agreed form of Brexit and it hugely increases the very real danger of a catastrophic no-deal exit from the EU. We cannot and will not stand by while that takes place.
“Faced with the damage of a hardline Tory Brexit, Welsh Labour believes that the final decision must be made by the public in a referendum. And, for the avoidance of any doubt, a Welsh Labour Government would campaign, in such a vote, for Wales to remain in the EU.
“We will work with any others who seek the same outcome.”
Last Thursday (May 24), Prime Minister Theresa May announced that she will quit as leader of the Conservatives on June 7, with it thought that a new leader could be in place by the end of July.
Many believe the party will elect a right wing leader who would be willing to propose a no deal Brexit, although there has been a majority against that option when Parliament voted on it before. Brexit policy was also key to the European Parliamentary Elections, where the Labour Party failed to attract votes, with its lead candidate Jackie Jones narrowly taking the final MEP seat in Wales.
The party claimed just 15.3% of the vote in Wales and 14.1% UK wide, with many pointing at the party’s indecision regarding its stance over Brexit as the reason for the loss of voters.
Leader of the Labour Party, Jeremy Corbyn, has been criticised by many in his party over his reluctance to openly support another referendum, as he attempted to appease both remain and leave voters with his Brexit policy. Mr Drakeford had been similarly reluctant to definitively back another referendum, but with this statement has gained the support of many in the party who wish for a second vote.
The European election results were also poor for the Conservatives, getting just 6.5% of the vote in Wales, and 9.09% across the UK. Governments often perform poorly in European elections, as the public express their disappointment with the ruling party, but this was the Conservatives’ worst ever result in a nationwide election by some way.
The party did not manage to come first in a single council area. The Brexit Party gained 32.5% of the vote in Wales, with Nathan Gill and James Wells claiming two of the country’s four MEP seats for Nigel Farage’s party. Plaid Cymru won 19.6% of the vote, with Jill Evans retaining her seat as Plaid beat Labour for the first time in a Wales-wide vote.
Andrew RT Davies, AM for South Wales Central and former leader of the Welsh Conservative Party, said: “The European Elections proved extremely difficult for the two major parties, but a second referendum is certainly not the answer. Labour promised to respect the Brexit vote, but rerunning the referendum would completely tear up this pledge.
“Regrettably, the First Minister has buckled at the first sign of discontent from his Labour colleagues who have been in denial ever since the people of Wales voted to leave the European Union back in 2016. That’s not leadership.
“People in Wales voted to leave and that should be respected and now delivered – anything else will have severe consequences for democracy as we know it in this country.”
In the 2016 referendum, Wales saw a turnout of 71.7% of its eligible voters, with 52.53% voting to leave and 47.47% voting to remain.
Mixed reactions in Wales to the dramatic European Election Results
THE BREXIT PARTY has dominated in Wales, winning 32.5% of the vote, two of the nation’s four MEPs and coming top in 19 of 22 council areas.
Nigel Farage’s party won an unprecedented triumph for a six-week-old political party.
The Brexit Party has thumped the traditional two parties in Wales who both have suffered a huge collapse in their vote.
Nathan Gill (Pictured) looked triumphant at the count in Haverfordwest posing for the press with a Winston Churchill V for victory, and demanding that his party was not a flash in the pan, but here to stay until Brexit was delivered.
Leader of the Welsh Conservatives, Paul Davies AM, said: “These results are extremely disappointing for our hard-working candidates and the Party must now reflect long and hard on them.
“Here in Wales, Welsh Conservatives will continue their hard work in the National Assembly holding the Welsh Government to account and will welcome a healthy campaign in the run-up to the next Assembly elections in 2021.”
Labour’s Vaughan Gething AM said: “The results in Wales show that in Welsh Labour we have some questions to ask ourselves. Pro-referendum and remain parties gained more votes than leave parties.
“The room for a middle of the road approach has disappeared & attempting more of the same will not serve us or Wales well.”
Mark Drakeford congratulated Jackie Jones on retaining the party’s seat.
He warned that the election of a new Conservative leader would increase the chances of a “catastrophic no-deal exit from the EU”.
“Faced with the damage of a hard-line, Tory Brexit, Welsh Labour believes that the final decision must be made by the public in a referendum.
“And, for the avoidance of any doubt, a Welsh Labour government would campaign, in such a vote, for Wales to remain in the EU,” he said on social media.
Ex-Welsh Government minister Alun Davies blamed the huge drop Labour in Labour support on both Mr Drakeford and the party’s UK leader, Jeremy Corbyn.
“This is the reality we face. Poor leadership from London and no leadership from Wales,” he said
The result in Wales was a significant change on 2014 when Labour won 28.15% of the vote and Ukip 27.55%. Then, the Tories were third with 17.43% and Plaid Cymru came fourth with 15.26%.
Turnout across Wales this year was up on 2014 at 37.29%, compared to 32% five years ago.
Wales’s MEPs are now Nathan Lee Gill (The Brexit Party), James Wells (The Brexit Party), Jill Evans (Plaid Cymru – Party of Wales) and Jacqueline Jones (We;sh Labour).
Welsh Liberal Democrat Leader Jane Dodds has praised the party’s success in the European elections, claiming they’re a clear example of the Welsh Liberal Democrat fightback.
Welsh Liberal Democrats won 13.6% of the vote, enough to secure 4thplace, but not enough to win a seat. The Liberal Democrats are on course to finish 2nd across the UK.
The Brexit Party were the largest party in Wales, their 32.5% of the vote was enough to win the 1st and 3rd seats, whilst Plaid Cymru won the 2ndseat with 19.6% of the vote and Labour the 4th seat with 15.3% of the vote.
Incredibly, the Conservatives finished 5th meaning Labour and the Conservatives won only 21.8% of the vote between them. The Green Party finished 6th.
Jane Dodds said told The Herald: “I’m proud of the entire Welsh Liberal Democrat team that allowed us to secure this successful result. We have secured our best ever European election result and our best result in Wales since 2010. To finish 4th and come close to electing Wales’ first ever Welsh Liberal Democrat MEP is a real achievement.
“We achieved this result because of our longstanding, unambiguous and passionate campaign to stop Brexit. Poll after poll has repeatedly shown that the Welsh people want to be given the final say and the opportunity to choose an Exit from Brexit. We stood up for them and we have been rewarded.
“It is deeply disappointing the Brexit Party have won two seats in Wales, particularly since their share of the vote was less than the combined vote share of us, Plaid Cymru and the Greens – the three pro-remain parties. We will continue to oppose the Brexit Party and all they stand for with all our might.
“Labour and the Conservatives must take a long, hard look at these disastrous results. They’re supposed to be the two leading parties. Yet in Wales and across the UK they’ve seen their share of the vote plummet. They have been punished for their incompetence and their attempts to deliver Brexit.
“This result shows the Welsh Liberal Democrat fightback is in full effect. Voters are listening to us again, supporting us again and believing in us again. These results show we’re on course to return a strong and effective Welsh Liberal Democrat Assembly Group in 2021.”
Political organisation Wales For Europe suggested that the results show a swing towards remain.
A spokesman told The Herald: “On the balance of votes across all parties, pro-Europeans have won.
“The Brexit parties have lost.
“The result is yet more evidence that over the past three years Wales has changed its mind on Brexit, as has the UK as a whole.
“It confirms polling evidence that if there were a referendum tomorrow, Wales would now vote Remain. The case for a new referendum remains strong.
“But there is no room for complacency, especially in a situation where the Tory leadership election is likely to increase sharply the risks to the country, not least to Wales.
“We still have a real fight on our hands against a nasty populism that seems to be endemic across the Western world.
Despite the passionate effort of many activists, the pro-EU side did not cover itself in glory in this campaign. In any new referendum – which must remain the key goal – victory will only be won by an effective, unified cross-party campaign.
“The result also sends a clear message to Labour’s UK leadership: it now has every reason urgently to adopt a more robust line and to proclaim it clearly and loudly. The leadership in Wales has even more reason to use its influence to ensure there is no delay.”
THE RESULTS –
Vote totals and share
Brexit Party – 271,404 – 32.5%
Plaid Cymru – 163,928 – 19.6%
Labour – 127,833 – 15.3%
Lib Dems – 113,885 – 13.6%
Conservatives – 54,587 – 6.5%
Green – 52,660 – 6.3%
UKIP – 27,566 – 3.3%
Change UK – 24,332 – 2.9%
• Brexit Party: 38.1%
• Plaid Cymru: 15.6%
• Lib Dems: 12.2%
• Labour: 11.2%
• Conservative: 10.0%
• Green: 7.0%
• Brexit Party: 32.8%
• Plaid: 31.1%
• Labour: 12.5%
• Lib Dems: 7.8%
• Green Party: 4.9%
• Conservative Party: 4.9%
• Ukip: 3.2%
• Change UK: 2.7%
• Plaid Cymru: 37.2%
• Brexit Party: 32.9%
• Lib Dems: 16.3%
• Green Party: 6.8%
• Labour: 5.1%
• Conservatives: 3.7%
• Ukip: 2.4%
• Change UK: 1.4%
Lib Dems slam ‘botched’ scheme
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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