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.
Price pledges independence referendum
A PLAID CYMRU Government – able to command the support of a majority of Senedd members – will offer a referendum on independence for Wales in its first term, party leader Adam Price said.
The Plaid Cymru Leader made the announcement in a keynote address on Welsh independence from the St David’s Hotel in Cardiff.
Plaid Cymru Leader Adam Price claimed that devolution is “under attack” from the Conservative Westminster Government and that with Scotland likely to become independent by 2025 and Brexit making a united Ireland possible, the “momentum of change” has accelerated the need to hold a referendum on Welsh independence by 2026.
Mr Price, the only prospective pro-independence candidate to become First Minister will be responding to the report published by the arms-length Independence Commission in September. It had suggested holding two independence referenda within a decade – the first one exploratory to gauge people’s views in order to persuade the UK Government to hold a binary referendum.
Noting that support for independence was at its “highest” in history, the Plaid Cymru Leader will also confirm that a Plaid Cymru Government would offer one binary choice referendum on Welsh independence and will encourage all those who want independence for Wales to vote for Plaid Cymru in May.
Plaid Cymru Leader Adam Price said: “Devolution itself – that most basic democratic principle that decisions affecting Wales should be made in Wales – is under attack from Boris Johnson’s Conservatives.
Meanwhile, the demand for another independence referendum in Scotland is becoming unstoppable and by 2025 Scotland could well be an independent country. And Brexit has also given further impetus to the calls for a united Ireland.
“Wales is in real danger of being be left behind as part of a rump United Kingdom, in a new England-and-Wales formation – which would be the ultimate worst of all worlds.
“It is for these reasons that I, therefore, pledge today that subject to party approval a Plaid Cymru Government, able to command a majority in the Senedd, will offer a referendum on independence for Wales in its first term.
“It’s implicit in the present Covid crisis – the sense that something new and better must come out of this. Next May, electors won’t just want to carry on with the Old Wales. They will be looking for a new direction, one that offers hope, vision, and ambition. It is our job in Plaid Cymru to provide that hope, that vision, that ambition for real, radical change.
“Independence is the most radical idea in Welsh politics today. The last two polls on independence put it on its highest support in history. An argument once derided as a pipe dream has moved from the margins to the mainstream.
“But whilst banners and marches fuel our fire, the Welsh spring will only truly bloom at the ballot box in May. If you want independence, you have to vote for it by voting Plaid Cymru.
Senedd consults on new code of conduct
THE SENEDD’s Standards Committee is asking for views on a proposed new Code of Conduct for Members of the Senedd.
If the new Code is agreed, the Senedd’s Members would be subject to the standards of behaviour set out in the Code- including a new principle of ‘Respect’ – after the election in May 2021.
The code outlines how Members should engage with each other as well with staff, stakeholders and the public. The proposed Code also makes it clear that those standards of behaviour should apply to Members at all times, including in their personal and private lives.
If anyone believes that a Member has not met the standards of behaviour set out in the Code, they can make a complaint to the independent Commissioner for Standards. In its consultation, the Committee asks whether the current complaints procedure works or whether it should be changed in any way.
The current Code was agreed in May 2016, and the Senedd reviews it regularly. Updating the Code now has allowed the Committee to reflect on the varied issues over the current Senedd term and any changes in society and public life during that time. The Standards of Conduct Committee believes that the addition of a ‘Respect’ principle would now be appropriate, reflecting:
The independent inquiry report on the Bullying and Harassment of the House of Commons staff which led to the adoption of the Senedd’s Dignity and Respect Policy
Wider movements in society such as #MeToo and Black Lives Matter.
The Code of Conduct helps to set the standard and tone of political debate. The Llywydd of the Senedd, Elin Jones MS, has previously said how she believes that targeted online abuse and the tone of political debate are barriers for people entering politics.
The proposed new Code does not refer specifically to the use of social media but says that Members “must not subject anyone to personal attack in any communication (whether verbal, in writing or any form of electronic or other media) – in a manner that would be considered excessive or abusive by a reasonable and impartial person, having regard to the context in which the remarks were made”
By including a new principle of ‘Respect’, it is hoped the new code can address some of these concerns by setting a respectful standard of debate and encouraging people of all backgrounds to get involved in politics.
CONSULTING WITH THE PUBLIC
The Committee wants to hear people’s views on its proposals and on what kind of behaviour they expect from their represented Members. It will then present the new Code to the Senedd who will decide, as a whole, whether or not to agree to it.
The review aims at completion by the end of the current Senedd, in preparation for the next Senedd.
Jayne Bryant MS is the Chair of the Senedd’s Standards Committee.
She said: “The Code of Conduct sets the standard and tone of political debate, and now more than ever it is important to get this right.
“With a serious problem of online abuse and powerful campaigns such as the #MeToo movement and Black Lives Matter, we’ve got to do all we can to improve the tone of debate and set a standard that encourages trust in elected representatives and inspires people from all backgrounds to stand for election.
“We’re keen to hear the view of people from across Wales on the refreshed Code of Conduct for Members of the Senedd.”
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