4. What assessment has the First Minister made of the benefit to Wales if the UK Government were to borrow more to invest, at the current low rates? OAQ(5)0563(FM)

Any increase in public expenditure in comparable areas will mean more money for Wales to support our priorities as set out in ‘Taking Wales Forward’, as long as, of course, it’s capital expenditure.

I thank the First Minister for that answer. In household terms, as he outlined in response to an earlier question, we’re all very used to the idea of balancing the books, managing income and outgoings, and, critically, managing debt, whether that’s on the mortgage on our home, or on our family car. Now, Government borrowing is far more complex, of course, but the basic principles remain, including managing your debt at any given time. Yet, classic economics recognises that, for Government borrowing, there are times, especially when the cost of borrowing is as low as it is now, when borrowing can be used to reverse austerity and bring growth, and, by bringing growth, ensuring that the deficit remains at the same percentage of GDP. So, isn’t it time, I say to the First Minister, for the UK Government to change its approach for the good of the country—for Wales and the UK? Or, for the good of the country, isn’t it time to change the UK Government?

Absolutely. All Governments borrow. Margaret Thatcher borrowed every single year. In fact, borrowing went up under the Tories, but they used that borrowing to pay for tax decreases. That’s how unsustainable that was. The current Conservative Government have borrowed money. I don’t criticise them for that, because I know it’s part of government. The issue is: borrow money to invest in capital infrastructure, and, secondly, borrow money in a way that’s prudent so that the debt doesn’t become unmanageable. The problem we have at the moment is that we have a Government in London that’s completely without vision, doesn’t know what it wants to do and has no vision for investment in infrastructure. We were promised electrification of the south Wales main line. Where is it? That’s disappeared off the horizon. No decision on the Swansea bay tidal lagoon, no decision on HS2, no decision on Heathrow. We’ve had absolute dithering—complete and utter dithering for the past year from the UK Government when it comes to funding essential capital infrastructure. Countries that do not invest in their infrastructure decline. They cannot compete with other countries around the world, and the problem we have with the current UK Government is that they’re just not willing to invest.

First Minister, let’s please get a little bit of sanity back into this question. Borrowing is, of course, an important tool in any Government’s toolbox. It’s an important tool for the Welsh Government; it’s been an important tool for the UK Government. But the levels of borrowing being proposed by the UK Labour Party are truly eye watering. In your heart of hearts, you know that. Will you agree with me that the last thing that this country needs, the last thing that the UK needs, and the last thing that Wales needs, is for Jeremy Corbyn’s Labour party to ratchet up the debt once again and for us to end up in the same sort of position that we’ve been in every time that the Labour Party has been in power in the UK Government before?

Britain’s best years are always under Labour—always, economically. Look at the stats. Look at where we are now. Look at where we were in 2011, 2012, 2013. Look at where we were at the start of the last decade—a much, much, much better position than we are in now. We were in a much better position then than we were in the 1980s, when the Tories’ main manufacturing product was high unemployment. They took Wales to a level of unemployment well beyond 10 per cent. We need competent economic policies and government, which the Tories have never ever given us. So, it is hugely important that we have a UK Government that understands the value of capital investment, has a vision for the country, and doesn’t keep on saying, ‘We need stable and strong leadership’. Well, stable and strong leadership, let me tell you, involves doing leadership debates, talking to ordinary people, not having events that are closed off to the regional press, as was the case in Cornwall today, and a Prime Minister who is strong and not one who acts as a frightened rabbit.

If we follow the logic of the First Minister that now is the time to take advantage of historically low interest rates, why is it that his own Government’s finance Secretary is limiting the financing through the mutual investment model to £1 billion, not increasing it to the £7.5 billion suggested by Gerry Holtham, who was a senior adviser to his Government? Isn’t this yet another example of the Labour Party saying one thing in its British manifesto and doing a different thing in Wales? That’s the kind of hypocrisy that has given democratic politics a bad name.

Says the man described in his election leaflet as ‘the mab afradlon’—the lost prophet of Wales. Who am I to argue with him, described in that way? And he allowed that to appear in his leaflet, would you believe? But there we are. He asked the question. The reality is that it’s £1.5 billion. We will borrow up to a level that is prudent, and £1.5 billion, in Welsh terms and devolved terms, is, we believe, a prudent level of borrowing.