Plaid Cymru’s Treasury Spokesperson, Jonathan Edwards MP, has raised serious concerns over indications that the Westminster Government could renege on its promise to allow the Welsh Government to borrow money to invest in infrastructure.
In an answer to a written parliamentary question by Mr Edwards, Chief Secretary to the Treasury, Liz Truss said “in light of [the Welsh Government’s] decision” not to go ahead with the M4 relief road, an increase in the borrowing cap will be reviewed.
Increasing the amount of money the Welsh Government can borrow requires the approval of the Westminster Government. Such an uplift in the Welsh Government’s capital borrowing allowances (the amount it can borrow to spend on physical assets such as roads or buildings) was announced in the Westminster Government’s 2018 Budget. At the time concerns were raised over indications that the Westminster Government would make devolution of extra borrowing powers contingent on the development of a specific M4 relief road route.
On 4 June this year, the Welsh Government announced that it would not build any M4 relief road. The concerns raised at the time of the announcement of the cap increase look to be realised, as the Westminster Government is now considering pulling back on the uplift of £300million.
A core principle of devolution is that the money granted to the devolved administration is a matter for the devolved areas over which it governs and the democratically elected National Assembly which oversees it. Linking increases in borrowing capacity to a preferred policy of the Westminster government runs contrary to this principle, particularly considering the project in question – the M4 relief road – sits within the devolved field of transport.
Jonathan Edwards MP said:
“It is outrageous that the Westminster Government is pulling back on its promise to allow the Welsh Government to borrow to invest in infrastructure. Devolution has been in place for over twenty years, but Westminster is still trying to use dirty tricks to undermine it.
“The M4 relief road, was highly environmentally damaging and has been rejected. Westminster cannot dictate what the devolved Government and Assembly should back, simply because they don’t like it.
“Welsh transport infrastructure is crying out for investment and I am extremely disappointed in the record of the Labour Welsh Government on the issue. The fact that they did not have a plan for alternative investment plans in greener, cleaner options when they cancelled the development of the M4 relief road speaks volumes about their ambition. However, this does not mean that Westminster has any right to undermine the democratic structures of devolution.
“The very principle of devolution is being questioned by the Westminster Government. If they do as they are threatening and renege on their commitments, they will be undermining the fragile constitutional compromise that underpins the relationship between Wales and Westminster.”