The following amendments have been selected: amendment 1 in the name of Jane Hutt, and amendment 2 in the name of Rhun ap Iorwerth. If amendment 1 is agreed, amendment 2 will be deselected.

The next item on our agenda this afternoon is the Welsh Conservatives debate on borrowing and the economy. I call on Andrew R.T. Davies to move the motion.

Motion NDM6302 Paul Davies

To propose that the National Assembly for Wales:

1. Notes that Wales and the United Kingdom require strong and stable leadership to continue the country’s economic prosperity.

2. Regrets the First Minister’s public endorsement of a proposal to borrow an extra £500 billion which would endanger the future of the Welsh economy.

3. Recognises the need for policies to be fully-costed to ensure Wales and the UK’s economic progress is not put at risk.

Motion moved.

Thank you, Deputy Presiding Officer. I formally move the motion on the order paper in the name of Paul Davies, which focuses on the strong and stable leadership that this country needs to continue its economic prosperity; regrets the First Minister’s public endorsement around borrowing on the nation’s credit card an additional £500 billion, which would endanger the future of the Welsh economy; and that recognises that policies, when put forward, need to be fully costed to ensure that Wales and the UK’s economic progress is not put at risk, and that the coalition of chaos does not return to make sure that the economic long-term implications are devastating for communities across the whole length and breadth of this country.

Mike Hedges rose—

Well, if I can deal with the amendments first, Mike, and I will gladly take the—. I was just merely reading what was on the order paper at that stage, to be honest, with a few soundbites.

The amendments, we will not be accepting, as is not surprising. The Government’s ‘delete all’ amendment really does call into question who wrote that amendment, to be honest with you, because, obviously, a lot of the issues there don’t bear any scrutiny at all, and, ultimately, when you look at the fiscal framework and other measures that the UK Government has put in place over the first seven years since 2010 that have led to record rates of employment here in Wales, record rates of inward investment and, of course, a continuing contribution to making sure that Wales’s place within the United Kingdom is safe and secure—it really does make sure that people should vote Conservative at the ballot box on June 8.

Amendment 2 from the Welsh nationalists asks people to recognise that Wales needs to be defended from the prospect of a reckless Conservative UK Government. I have to say the only thing that would be reckless would be making sure that Wales became independent and the devastating consequences that that would have for our Welsh NHS. It was a rich irony to listen to Plaid Cymru talking about a publicly funded, publicly owned NHS when, in fact, the most devastating consequence for the Welsh NHS would be for Wales to become independent and economically not be able to deliver—[Interruption.]—deliver—[Interruption.]—deliver—[Interruption.]—for the people of Wales. I’ll gladly take the intervention from Mike.

You’ve talked about a coalition of chaos; do you mean the coalition you had with the Liberal Democrats between 2010 and 2015? Or the coalition you tried to have with Plaid Cymru and UKIP after the last election?

There is only one coalition of chaos on the ballot paper for June 8, Mike, as well you know, and that is the coalition of chaos that would be led by Jeremy Corbyn and the devastating consequences, economically and for the future of the United Kingdom. And, of course, you are part of a coalition with the nationalists and with the Liberal Democrats, as we’ve seen, since last May. There is a formal coalition here. You see it at budget time, and you see it because you have a Lib Dem education Minister who took questions earlier on. She is part of your Government, Mike, which you endorse, you do.

But, looking at what is required as we go forward, the dominating theme for the next Parliament, undoubtedly, and for this Assembly, will be to deliver on the Brexit referendum result of 23 June last year, and that is why strong and stable leadership is required—[Interruption.]—is required—[Interruption.]—I’m on for a digestive biscuit at this rate—is required to make sure that we continue with the long-term economic growth that underpins investment in our great public services, that underpins the ability for people to take home a decent take-home wage, and underpins the ability for entrepreneurs to start up new businesses, whether that be here in Wales or, indeed, other parts of the United Kingdom.

Can it really be the case that anyone can have any confidence in the current Labour leadership when it comes to security, when it comes to negotiating the Brexit negotiations? Yesterday, for example, the leader of the Labour Party was asked six times about his thoughts on Brexit and was unable at any time to give a convincing answer. And this coming from a party that has spent the last 18 months, in two leadership debates, ripping itself apart and that ultimately now stands before the electorate to say, ‘Trust us, we will deliver’. And when we look at what the Welsh Government have delivered here, when you look at the NHS, it’s the only part of the United Kingdom that had a Government in the last session that delivered real-term cuts to the NHS—a conscious political decision, I might add, that was taken at that time.

The Government put much credibility on the line when it came to reorganising local government and had to backpedal on the reorganisation of local government. On education, when we look at the education figures that have come out, not from the Conservatives, not from other political parties here, but on the international rankings and PISA—a devastating indictment of failed education policies here in Wales that have blighted the life chances of successive generations of young people going through our education system here in Wales. And they are seriously asking for us to trust them with the leadership of the United Kingdom. That is why it is vital that people understand the consequences when they cast their vote on 8 June, to make sure that their communities, themselves, and this country’s security and long-term future is protected by a strong Conservative mandate here in Wales, but in other parts of the United Kingdom as well.

And I do find it remarkable that the First Minister spent his time on ‘The Politics Show’ endorsing—endorsing—maxing out the UK’s credit card to the tune of an additional £500 billion-worth of borrowing. In other words, the cost of chaos so far. At the moment, the Labour Party stand before the electorate here in the United Kingdom with £45 billion-worth of uncosted commitments—£45 billion-worth of uncosted commitments. That is absolutely unbelievable, and the First Minister is endorsing that economic policy that would actually put not just this generation’s economic futures on the line, but future generations’ futures. Because this generation won’t just be paying for that—it will be generation after generation that will have to pick up the pieces of the bankrupting of this country.

What we have seen over the first and the second term of the Conservatives in Government in Westminster, as I have said before, is worth repeating: record employment rates, which have gone up from 28 million people employed in the United Kingdom to 31.8 million people as we sit here today; record rates of investment in the economy; record rates of investment in business start-ups; record rates of apprenticeships. All that will be put at risk by the coalition of chaos that Jeremy Corbyn will lead, propped up by the Liberal Democrats and by the nationalists, both from Scotland and here in Wales. That is why we need the strong and stable leadership of Theresa May—[Interruption.]—of Theresa May making sure that ultimately—[Interruption.]—that ultimately people’s futures are not put at risk because of the cavalier attitude not just of Labour in London, but Labour here in the Assembly.

Above all, what is required from Governments in the future is that there is a fully costed programme of delivery and a fully costed programme when it comes to infrastructure and investment in our public services. Building false hopes, which is what the Labour Party and the nationalists are engaging in at the moment, is something that the public will not forgive, and as I said, the cost of chaos so far clearly indicates that there’s a £45 billion black hole—[Interruption.] If the Cabinet Secretary for health wants to speak, I’ll gladly take the intervention from him, because he’s chuntering away there. But he knows that, when it comes to it, the stats in the Welsh NHS, where one in seven people are on a waiting list here in Wales, where accident and emergency times—[Interruption.] Well, I’ll give the floor. Do you want to take an intervention? I’ll give the floor. See—you will not defend the position. One in seven people are on a waiting list, and people are waiting longer and longer for treatment here in Wales.

So, as I’ve said, the clear choice before the people of Wales, and before the people of the United Kingdom, is for the strong and stable leadership—[Interruption.]—people need to vote for on 8 June against the coalition of chaos that the Labour Party, the nationalists and the liberals will bring forward, which will not deliver the Brexit negotiations that this country needs to stand up to the other 27 member states that will do us down; which will not deliver the economic prosperity that this country and its communities require; which will not deliver the security of our public services; and above all, will not deliver the bright future that we know exists for this country. I’ll gladly take the intervention.

Thank you for taking the intervention. You’ve just said it: are you publicly saying, before you go into negotiations, that the EU-27 are intending to take us down? Because that’s what you just said.

When you look at what is coming from the European Commission, a negotiation is of two parties negotiating to their best advantage. It is a fact that the EU as it currently stands has 27 members in those negotiations. We are on the other side of that table. They are of course going to galvanise around a negotiating position. Who do you want negotiating that strategy on behalf of Britain? Do you want Jeremy Corbyn or do you want Theresa May? Because what the bulk of the people of the United Kingdom and the bulk of the people of Wales are saying is that they have faith in our Prime Minister, Theresa May, to negotiate on behalf of this great country of ours. They have little or no faith in Jeremy Corbyn’s ability to negotiate.

I will make this point again, and if someone wants to rebut it—. I know the finance Minister is a strong supporter of Jeremy Corbyn. Six times yesterday—six times—Jeremy Corbyn was asked to outline what his ultimate position will be in these negotiations, and on six occasions he couldn’t give a response. That was at the launch of the Labour Party conference. Can it be right, with the Counsel General sitting there, with the finance Minister sitting there, with Mike Hedges sitting over there, that Welsh Labour is so happy to airbrush Jeremy Corbyn out of this campaign? Do you believe that Jeremy Corbyn would make a good Prime Minister? Because Carwyn Jones can’t say that in any statement he’s issuing. That’s why this debate today requires the support from Members in this house, so that we can have the strong and stable leadership of the Conservatives in Government after 8 June.

I have selected two amendments to the motion. If amendment 1 is agreed, amendment 2 will be deselected. I call on the Cabinet Secretary for Economy and Infrastructure to move formally amendment 1, tabled in the name of Jane Hutt.

Amendment 1—Jane Hutt

Delete all and replace with:

1. Notes that Wales and its economy will best be served by a UK Government that commits to investing fairly and sustainably in all parts of the country.

2. Regrets that as a result of current UK Government spending plans the Welsh Government’s revenue budget will be £1bn lower in real terms at the end of this decade than at the start and capital budgets will have been reduced by £200m.

3. Regrets the UK Government plans to cut an additional £3.5bn from its budget which could reduce Wales’ funding by a further £175m in 2019-20.

4. Notes the record of the Welsh Government in driving economic growth, with almost 150,000 jobs supported in the last Assembly term.

5. Welcomes the Welsh Government’s £7bn, four-year capital investment plans to support public infrastructure.

6. Notes the Welsh Government’s ambitious programme for government which sets out costed plans for:

a) an additional £100m of investment in Welsh schools;

b) a minimum of 100,000 all age apprenticeships;

c) a small business tax cut;

d) an £80m treatment fund;

e) a doubling of the residential care capital limit;

f) 30 hours of free childcare for working parents of three and four year olds, 48 weeks of the year.

Amendment 1 moved.

Formally.

Thank you. I call on Adam Price to move amendment 2, tabled in the name of Rhun ap Iorwerth—Adam.

Amendment 2—Rhun ap Iorwerth

Delete all and replace with:

1. Recognises the need to defend Wales from the prospect of a reckless Conservative UK Government.

2. Believes that neither the Welsh or UK Governments can be relied upon to defend Wales, to promote the Welsh national interest, or to fulfil the nation’s economic potential.

Amendment 2 moved.

Thank you, Dirprwy Lywydd. You know, to listen to the tone of the Conservative Party in this election, you could come to the conclusion that, in some way, we are on the cusp of Britain’s finest hour. When you look at actually what’s happening to this country, what you see, actually, is a deeply divided United Kingdom. It’s not our finest hour, it could be the final hour, because of the economic divide, which is the most poisonous legacy of this Conservative Government.

Let’s look at the facts: in Yorkshire, Humberside, Northern Ireland, Wales, the west midlands and the north-west of England, workers are actually producing less now per hour, in the latest year for which figures are available, than they did in 2007. Where’s the economic progress there? Where’s the economic fairness for those nations and regions across the UK? Regional inequality in the UK is higher now than ever—higher now than ever, since records began, and it’s worsened in every year since 2010.

We measure it through the Gini co-efficient for regional inequality. It was fairly stable until the economic crisis. Prior to that crash, it was at 0.106. For the last year for which we have figures, published in 2016, it’s now at 0.126. That is unprecedented. That’s a 200 per cent increase in the extent of economic inequality between the nations and regions of this United Kingdom in less than a decade. You should be hanging your heads in shame. And let’s not forget as well that behind these statistics, there is a very human story. Come with me to some of the towns of the northern Valleys and see on the very faces of the people there the intergenerational hopelessness that you have cast them into. [Interruption.] I’ll certainly take an intervention.

Could I just ask, then, because obviously for decades now Wales has been getting more money from the EU in terms of regional support than other parts of the UK—can you explain why we’re still in that position, because it’s not just not the matter of the last 10 years, is it?

European regional funds were always a tiny lever compared to the scale of the problem. We in this party and other progressives across the UK were continually making the case that we couldn’t just rely on a tiny proportion. The Conservative Party were arguing, of course, for cutting the budget for European regional development funds throughout this period.

Let’s look at the facts. This is not just a problem in the Valleys of the former coalfield. Look at Powys, an area that is represented by the Conservative Party—it has the lowest performance of any part of the UK in terms of productivity per head, 35 per cent below the UK average. He talks about ‘our nation’, I presume he means the United Kingdom, well, Powys, economically, is not in the same nation as the rest of the United Kingdom. [Interruption.] I won’t take another intervention; I think you’ve said enough, quite frankly. Look, in 2010, the Chancellor said this: he promised to rebalance the economy so that it generates local economic growth in all parts of the country. Instead of delivering on its promises, the Conservative-led administration delivered the opposite. And wasn’t that the pattern? Remember ‘vote blue, get green’? Remember ‘compassionate Conservatism’? You know, I can think of a few adjectives beginning with ‘c’ to describe this tory Government, but ‘compassionate’ certainly is not one of them. ‘Cruel’, ‘cold-hearted’, ‘callous’ seem a better fit to me for the party that gave us the bedroom tax, the rape clause and an epidemic of suicides among the sick and disabled victims of your so-called welfare reforms.

You know, some people project on this Prime Minister virtues that are Churchillian? I see more of Chamberlain—of expectations raised that cannot be delivered. Now, what none of us can do is predict what happens next. Will Brexit be a D-day, Dunkirk or Dardanelles—a glorious triumph, a heroic failure, or needless tragedy? None of us can predict that with certainty, but what we can say—the outcome of this election, sadly, at a UK level, is already clear. The Prime Minister will win, and she will have her reckless, destructive Brexit, come what may. But what happens next is in our hands. The battle for Britain may already be over. It’s the battle for Wales that is about to begin. A weak and divided Labour Party cannot defend Wales. We have to look to ourselves as a nation. We are our own best hope.

On leaving the UK Government in 2010, Labour bequeathed an economy on the brink of collapse, with the highest budget deficit in Europe, excepting only Ireland. But Conservatives delivered the fastest-growing G7 economy in 2016. In contrast, those countries that rejected austerity got it in full measure.

In championing Keynesian economics as an alternative, Labour fails to acknowledge—and Plaid Cymru—that although Keynes advocated deficit spending when an economy is suffering, he also advocated cutting back on Government outlay in the boom times. But Gordon Brown broke the economic cycle by pretending there was an end to boom and bust. As any debtor knows, you can’t start reducing debt until expenditure falls below income. If the Treasury had pursued faster deficit reduction, cuts would have been higher. In the real financial world, borrowers borrow, but lenders set the terms. If the Treasury had followed lower deficit reduction, higher cuts would have been imposed.

Labour Members here sneered when I warned, 13 years ago, that Gordon Brown’s borrowing would lead to a day of reckoning. They sneered when I said, 12 years ago, that the International Monetary Fund had warned that the UK banking system was more exposed to sub-prime debt than anywhere else in the world. They sneered when I said that the National Audit Office warned Mr Brown’s Treasury, three years before Northern Rock nearly went bust, that it needed to set up emergency plans to handle a banking crisis, but Labour did nothing about it. They sneered when I said that the Financial Services Authority had reported sustained political emphasis by the Labour Government on the need for them to be light-touch in their approach to banking regulation. No doubt they will sneer now, when I say that in endorsing Jeremy Corbyn’s plan to borrow an extra £500 billion, Carwyn Jones is failing to tell the people of Wales that bigger cuts will be the consequence.

Of course, Carwyn Jones is not a modest man, but he has a lot to be modest about. He keeps stating that Wales has the lowest unemployment in the UK, but the latest published figures show unemployment in Wales above England, Scotland and UK levels. He keeps taking the credit for inward investment into Wales, when the UK Department for International Trade played a part in 97 of 101 foreign direct investments into Wales last year, with the UK continuing to be the third largest recipient globally.

It is in the interests of Wales and the UK to have a strong, stable and prosperous European Union as our immediate neighbour. Although we do not enter Brexit negotiations as supplicants, he preaches Brexit doom, as we heard from our Plaid Cymru friends also. Well, there will be no winner and loser, only two winners or two losers. Any new impediments to trade and investment in Europe would not only be politically irresponsible, but economically dangerous, not just for Europe, but for the wider global economy, too. Throughout 18 years of Labour Welsh Government, they’ve presented themselves as the guardians of social justice. But the more they talked about it, the worse it has got. After spending £0.5 billion pounds on their lead tackling poverty programme, Communities First, they’re now phasing it out after, as the Bevan Foundation said, failing to reduce the headline rates of poverty in Wales.

Labour has given Wales the highest percentage of employees not on permanent contracts; the highest levels of underemployment across the 12 UK nations and regions; the lowest prosperity levels per head in the UK; the highest percentage of employees not on permanent contracts—I’ve said it again; rates of low pay, poverty, child poverty and children living in long-term workless households above UK levels; an increased percentage of children living in workless households in Wales’s most deprived communities and a housing supply crisis with the lowest proportional level of housing expenditure of any of the four UK countries from 1999, and therefore, the biggest cuts in new, social and affordable housing since 1999. UK Labour, meanwhile, is in the hands of a Trotskyist tribute act—fundamentalist followers of a discredited and dangerous nineteenth-century ideology. But Wales has been a pilot for them and a warning to people across our islands. Labour think they’re entitled to rule and tell the people what they is good for them. In contrast, Welsh Conservatives seek to empower people and communities, doing things with them rather than to them. Instead of the coalition of chaos offered by Corbyn and Carwyn, the people need the strong and stable leadership of Theresa May.

Can I just first of all remind people the banking crisis was caused by the United States sub-prime market where people were lending money and British banks were buying items over which they had no control? Labour in Westminster saved the banks from collapse. If the banks had collapsed, the whole of our system would have collapsed. Can I just—? [Interruption.] Certainly.

Thank you, Mike—just giving you some of your own medicine there. You’re right to say that the banking crisis was caused by America, but, of course, that Labour Government went into that crisis in 2008 with a deficit of £80 billion. We weren’t starting off from the position we should have been in.

Well, that’s a matter of opinion and I haven’t got time to debate that this afternoon. I hope we have an opportunity to do it again in the future.

You come out of a recession by doing two things: first, you devalue the currency and, secondly, you reflate the economy. The pound floats so it has not gone through a formal devaluation but it has been devalued by between 14 and 20 per cent against the dollar since June 2016. We also know devaluation gives a short-term boost to exports but brings inflation in its wake. As the pound’s value against the dollar has fallen from above 4 to between 1.3 and 1.2 dollars to the pound, we’ll soon be talking about the other way around unless something is done. There is no long-term benefit of devaluation, just a short boost, a kick-start.

Inflation in Britain, in a non-inflationary world, has started to make its way upwards and house prices have started to make their way downwards. We’ve had the boom, now we’re waiting for the bust. Five hundred billion pounds on capital projects will help reflate the economy. Assuming the Government borrows at 2 per cent via Government bonds or direct borrowing, which is probably on a high estimate, then, over 30 years, the capital repayment is less than £1.7 billion a year and interest at 2 per cent would be something like £10 billion—[Interruption.]—yes, I will—and at 4 per cent it would be something like £20 billion. Assuming only half goes on salaries—a low estimate—then each year, via taxes, at least £50 billion will come directly into the Government—actually it more than washes its face and recirculates the money in the economy.

I’d be grateful if you could—because you’ve obviously researched this—name one financier, one person who understands public debt, who would back this policy of putting another £500 billion on the credit card of the United Kingdom. I heard what the Cabinet Secretary said and the IMF do not support that policy.

The OECD do, as do several other economists, including some major American economists. I will write to you and give you the names. I haven’t got them with me at the moment. I didn’t expect to have to answer that. [Interruption.] Paul Krugman I’ve had mentioned to me, but there are several of them in America who believe that.

You borrow for equipment and buildings. We’re not borrowing for wages, we’re borrowing for capital expenditure. We can look to American and British history. Herbert Hoover was the American president at the time of a recession. He turned it into a depression. Hoover pursued many policies in an attempt to pull the country out of depression; what he didn’t do was reflate. Hoover supported new public works, but not enough of them. So now Britain has a Government to the right of Herbert Hoover. How did America come out of it? By electing Franklin Delano Roosevelt, not a communist, Trotskyist or even a man who would have been considered on the left in world terms at the time; today, he probably would because the world’s moved very much to the right. And he reflated the economy—the Tennessee valley project being one example. The Tories needed the second world war to reflate the British economy by substantial Government borrowing to pay for the second world war. The borrowing that they refused in the pre-second world war period, which would have reflated the economy, had to be paid for during the war. I’m sure the Conservatives look to the 1930s as a period of uninterrupted Tory rule. Labour, and I’m sure Plaid Cymru, look upon it as a period of poverty and desperation for many living in Wales.

I have no time to explain how the Marshall Plan helped rebuild the economy of western Europe. Turning to strong and stable Government, I think the man who talks most about strong and stable Government is President Erdogan, president of Turkey; he’s all about strong and stable Government. Some would think that his strong and stable is not particularly the type of Government we would like. What we have is a Tory Prime Minister who is strong with the weak and weak with the strong. Theresa May is the least suited person to be Prime Minister since Neville Chamberlain, and that worked out well, didn’t it? What we want is leadership for the whole country, not just the rich and powerful; a willingness to debate, not run away from leaders’ debates; and a willingness to explain, not sloganize. The best leaders have always listened. The best leaders always will.

Finally on the economy, I am not sure which is the saddest, those on the Conservative benches who know that the economy needs reflating but will vote for this motion, or those who don’t.

This debate this afternoon provides an opportunity to highlight the transformation that has taken place in the United Kingdom economy, thanks to the policies of the Conservative Government. Labour wasted 13 years in power and left behind a dismal economic legacy. I think that our Adam Price must remember very well what he just shouted very clearly and loudly, telling all this Chamber about the doom and gloom that is happening now. Britain had suffered the deepest recession since the war by that Government and Labour in London, not by our party. The country was borrowing £150 billion a year at that time. Unemployment had increased by nearly 0.5 million. Labour’s legacy was one of debt, decline and despair. That was their legacy when we came into power in London. Thanks to decisions the Conservative Government has taken, the fundamentals of the economy are strong.

Last year, our economy grew faster than all other advanced economies, except Germany, in the world. The Office for Budget Responsibility upgraded its forecast of UK growth for 2017 to 2 per cent from 1.24 per cent since last November. That’s a great achievement. Employment is at a record high. It is up by 2.8 million since Labour were in power. That’s 2.8 million people with the security of bringing home a regular pay packet to look after their children and family. That is economic growth. We have cut the deficit by almost two thirds. That is not me; they are the world economic forecast figures that we see. Don’t shake your head; this is true. In cash terms, the deficit is down from £150 billion when we came to office to just over £51 billion today. A survey in April showed that activity in the UK manufacturing sector grew at its fastest pace for the last three years. The survey also found that new orders are being received at the fastest rate since January 2014. The service sector accounts for about three fourths of the UK economy. Activity in this sector grew at a faster rate than expected in March this year. Exports are increasing and the trade gap is narrowing. That is where the economy is growing with the policy of London.

Adam Price rose—

Wait a minute. Britain’s decision to leave the European Union has not deterred foreign investment, as companies wish to take advantage of our strong and stable economy. Come on, Adam.

Does he accept his own Government’s figures that I quoted that, actually, output per worker in Wales and many parts of the UK is actually still now, in the latest figures, lower than in 2007 when he was elected as a Plaid Cymru AM?

Adam, what I’m saying is this: don’t mix oranges with—. Our economy in Wales, actually, we have been given different funding with the Barnett formula. Our Government is there to answer. Most of our economy is controlled by us here, also. You should not blame London. Your education, transport, health—you name anything. Twenty devolved areas, none of them have reached the level that you are quoting for the other parts of the United Kingdom. They have achieved better than us, and it is you and them, not us who have actually had control of our economy since 1999.

Qatar is a small country, now they are spending £5 billion in the next three years in this part of the world. Why? Because they can see the economic growth coming. Google has announced it will invest £1 billion in a new headquarters in London that could create 3,000 new jobs by 2020. Toyota, Jaguar, Land Rover and McLaren have all announced plans for a £1 million investment in manufacturing plant in the United Kingdom. Seized the opportunity there, Adam. As we all leave the European Union, Britain remains open for business to the whole world. We all are the same. We are the same outward-looking, globally minded, flexible and dynamic country we have always been and we are always here to make sure that the world comes and trades with us and we’ll trade with them. Europe is not the only part. At this point, I have to mention Jeremy Corbyn—[Interruption.]

Are you winding up, please?

Something the First Minister failed to do at his campaign launch on Monday. We cannot allow—[Interruption.]

Are you winding up, please?

We cannot allow—. We cannot allow a Government [Inaudible.]—

Are you winding up, please? Are you winding up, please?

[Continues.]—to put our economy at risk.

No. Thank you. Neil Hamilton.

Thank you, Deputy Presiding Officer. As a strong and reasonably stable Member of this Assembly, I’m delighted to take part in this debate. It was fair enough for the leader of the Welsh Conservatives to focus upon the Labour Party’s proposal to increase borrowing by £500 billion. Of course, the shadow Chancellor is an avowed Marxist, but I think this policy owes more to Groucho than to Karl. I remember Groucho Marx said politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and then applying the wrong remedy. And that is exactly what the Labour Party’s economic policy amounts to. However, Andrew R.T. Davies’s point might have had more force if it wasn’t for the record of George Osborne as Chancellor of the Exchequer, where he borrowed even more than the £500 billion that Labour now proposes to spend. In fact, he doubled the national debt in the years since 2010, and he borrowed £850 billion, and last year—2016—the national debt rose by £91.5 billion. That is £250 million a day and it amounts to £26,000 now for every single person in the United Kingdom. The interest that we pay on the national debt now amounts to £40 billion a year, which is almost as big as the entire defence budget. This is what the Labour Party always forgets, of course, that the national debt has to be financed and eventually it has to be paid back. Yes, I’ll give way to the Member.

Thanks, Neil Hamilton, for giving way. And you’re quite right to say that the national debt has, of course, increased since 2010, but it’s the deficit that was the point. The deficit has been reduced, and the Chancellor George Osborne was always honest about the fact that it would take a long time to turn this supertanker around. You can’t do it overnight, unless you wanted to cause massive damage to the economy.

It is certainly true that it’s taking a long time to clear the deficit, and the current Chancellor has just extended the date at which he claims we will return to surplus to 2025, or possibly beyond, so I don’t have a great deal of confidence in Conservative chancellors in that frame of mind to live up to their rhetoric.

But I have to say that Plaid Cymru offers no answer to this problem either, because, of course, if Wales were to become independent of the United Kingdom, there would then be a massive fiscal deficit that would have to be plugged. And there’s absolutely no way in which that could be done without bringing about a massive contraction in the Welsh economy, which would actually cause a contraction bigger than Greece has experienced since the financial crisis began, because we all know that the Welsh Government—. We all remember that the Welsh Governance Centre provided us with the figures last year, that there is a £15 billion a year fiscal deficit here and that Government spending is £15 billion more than could be raised from taxes within Wales. That amounts to 24 per cent of the Welsh economy. You cannot, in those circumstances, come forward with grandiose plans for spending on capital projects or any other of the good things that we would all like to spend money on if you haven’t got the money and you haven’t got the means to borrow. Certainly, you will never have the means to borrow if you can’t produce a credible plan for how you’re going to pay it back. I give way to Mike Hedges.

Will you not accept that borrowing for capital is entirely different to borrowing for revenue? It’s the equivalent of having a mortgage to buy a house and borrowing to pay for the food bill.

I agree, of course, obviously, that if a capital project is commercially viable, then it is worth undertaking. The trouble with so many Government capital projects is that they’re not. We’ve seen so many fiascos in so many areas that I don’t think that that’s going to be a very credible policy for spending £500 billion.

As a result of leaving the European Union, we shall, of course, acquire many freedoms to increase the efficiency and productivity, which Adam Price was certainly right to mention in this debate, of the Welsh economy as part of a more productive United Kingdom economy. There is, of course, the Brexit dividend of the money that we pay to Brussels, amounting to about £8 billion a year, which will be available either for deficit reduction or to be spent on the national health service or whatever. There are many other improvements in the way that the economy functions that could flow from the freedoms that we will have to devise for ourselves the systems of regulation that apply in this country, which can be tailored to the needs of the United Kingdom and, indeed, the Welsh economy.

UKIP is going into this election campaign, as indeed into the Assembly election campaign last May and the general election back in 2015, proposing that we have some significant cuts in public spending in certain areas in order to divert the money elsewhere. We would like to reduce the foreign aid budget by £8 billion in order to divert that into worth-while projects like the health service at home. We’d like to slash people’s electricity bills by £300 a year by getting rid of green taxes that produce the forests of windmills around the country. But, most of all, by controlling immigration, we would restrict wage compression, which has affected adversely those at the bottom of the income scale. The Bank of England did a study in 2015 that shows that for every 10 per cent rise in the proportion of immigrants in an economic sector, semi and unskilled service sector wages reduced by 2 per cent. So, the people who’ve really felt the squeeze of mass immigration are those who can least afford to cope with it.

Adam Price was quite right to point out—my last point in this speech—that Wales has 75 per cent of the national UK average as a wage. Poverty in Wales is a disgrace. We’re one of the poorest areas of western Europe, and we need to use these new freedoms that we get as a result of leaving the European Union in order to transform the Welsh economy from the basket case of the United Kingdom to broad, sunlit uplands of the future.

The aim of this debate today is to highlight the need to lock in the excellent economic progress that the UK Conservative Government has made since taking office, and we don’t want to see any of that put at risk. Of course, it’s Theresa May and the UK Government who have got the plan to boost economic prosperity through the process of Brexit and beyond.

But there are issues with the economy here in Wales: we know that weekly earnings are still the lowest of all four nations; Welsh GVA is still at 71 per cent of the UK average; and the employment rate is lower than in any other part of the UK. The Welsh Government has little economic credibility, I’d say, left after a series of investment failures, which I don’t think have been mentioned today—Triumph Furniture, Kancoat, Newsquest, the regeneration investment fund for Wales, to name a few. Many would be concerned by the First Minister’s recent endorsement of Jeremy Corbyn’s economic approach, as has been highlighted in our motion and by the leader of the opposition in the opening comments to this debate.

Over the past seven years, the UK Conservative Government has—. The deficit has come down by almost two thirds, employment is up by 2.8 million, growth is at 1.8 million in real terms, second only to Germany, and the lowest paid have been taken out of income tax altogether, and there’s a new national living wage. The current forecast is that the UK economy will grow by 2 per cent this year, and wages are forecast to rise every year up until 2021. And isn’t it interesting, of course, that, when Gordon Brown left office, the UK’s infrastructure quality was ranked at thirty-third across the world, behind countries like Namibia and Slovenia? Now, thanks to the steps that the UK Conservative Government has taken, we’re ranked at seventh in world. We’re now supportive of major projects in Wales, of course, as we know, like the Cardiff and Swansea city deals, as well as the north Wales deal as well.

Would the Member give way?

Yes.

Can he confirm that the Conservative manifesto will commit to the tidal lagoon in Swansea bay?

Well, I’m not privy to the negotiations of the Conservative manifesto, but the Conservative manifesto, of course, made that commitment, and did make that commitment, of course, back in the 2015 general election. In the autumn, the Chancellor announced that he will deliver—. He announced that he will deliver £400 million of additional investment over the next five years, and I hope that the Welsh Government spends that and prioritises that in transport, digital infrastructure, housing, and research and development. Because we know that investment in transport networks would create world-class infrastructure and that will lead, of course, to better jobs and better pay. We have huge connectivity issues across Wales and it’s holding back the Welsh economy. I know that only too well in my own constituency. We need new technologies to make it easier for foreign companies to trade here, including investing in and developing digital technology such as broadband and mobile. The UK Government has put in place an ambitious industrial strategy, making Wales a stronger, fairer, and more successful place—

Will you take an intervention?

In a minute. In a moment. But we are—[Interruption.] In a moment. But we are still waiting for the Welsh Government to bring forward its economic strategy over a year—over a year—after it was promised, and, of course, steel is also mentioned extensively in that document as well. I hope that the Cabinet Secretary will have news for us today on its plans for its economic strategy. The First Minister continues to blame, put blame, on the UK Government, week after week, but the Welsh Government has powers in its own hands to make decisions here that it’s not using. So, in response to this debate today, I hope the Cabinet Secretary will confirm that he will engage constructively with his UK counterparts to ensure that the full potential of the UK’s industrial strategy will be released here in Wales. The UK Conservative Government has a vision for a modern, successful, ambitious Wales that gets every part of the UK working on all four cylinders, and I hope that the Welsh Government will also share that ambition as well.

Thank you. I call on the Cabinet Secretary for Economy and Infrastructure, Ken Skates.

Thank you, Deputy Presiding Officer, and I’d like to begin by thanking the Welsh Conservatives for bringing forward this debate in the Chamber today. Today, the gap in the employment rate between Wales and the rest of the UK stands at approximately 1.5 per cent. Before the recession it was 3 per cent. At the start of devolution, it was 6 per cent. It has halved and halved again, and, looking back over the last few years, against the backdrop of the recession and years of austerity budgets, it’s clear that the Welsh economy has performed well—not for the few, but for the many. The Welsh Government has a marked success—a marked success and record of delivery over the last Assembly term. And, since devolution, Wales has had the fifth biggest increase in GVA of all UK nations and regions since devolution.

When, at the time of the economic crash, confidence in the economy dipped and firms began laying off people, it was the leadership shown by this Welsh Government, alongside business, unions, and other partners, that put together the ProAct and ReAct programmes. It was the work that we did that prevented more than 15,000 young people from experiencing unemployment, because we introduced Jobs Growth Wales. And, in the last Assembly term, nearly 150,000 jobs were supported through direct Welsh Government help, with many more in local supply chain networks. To continue to deliver on this success, we’ve set out our priorities in our programme for government. ‘Taking Wales Forward’ sets out a vision of prosperity for all, through delivering a Wales that is more prosperous and secure, a Wales that is more united and connected, more active, more ambitious and learning, and more connected.

Deputy Presiding Officer, austerity imposed by the UK Government has continued now for seven years, and yet the Tories borrowed—

Will the Cabinet Secretary give way?

And yet the Tories—. I will in a moment. And yet the Tories borrowed more in the last Government than every other Labour Government in history combined.

I do find that ironic. One minute you’re slating us for austerity, the next minute you’re saying we’re borrowing too much, you are, then then, but we heard from the principal Plaid Cymru speaker of a Wales that doesn’t bear any resemblance to the Wales that you were drawing on, Cabinet Secretary. Who’s right? You or him?

I’d agree with Adam Price about regional equality across the UK, and that’s why we’ve been clear in outlining an intervention in Wales that will be based on place-based solutions at a regional level, creating strong regional economies to spread the wealth in a genuine way, which the UK Tories should look at. The Member calls attention to borrowing too much. The Tory Government between 2010 and 2015 had borrowed more than £500 billion, and what did they have to show for it? Well, let’s just have a look at what they had to show for it: the bedroom tax—they gave us a bedroom tax, didn’t they? And the pasty tax. Remember the pasty tax? They’ve now messed up taxes for the self-employed. They gave us, in the past, of course, the infamous poll tax. Do you know what they’re known as in Clwyd South? Taxastrophe Tories. That’s what they are. They’re the masters of higher value added tax. They touted the tampon tax. You cannot trust the Tories with taxes or with public money.

Deputy Presiding Officer, it’s absolutely clear from the calls that we’ve made on the UK Government that austerity must end. We need a fiscal stimulus to support our public services and to increase investment to much-needed economic activities, especially now as we face an unprecedented challenge that requires an unprecedented response. Investing in infrastructure has been recommended by a broad range of bodies, including the Organisation for Economic Co-operation and Development and the International Monetary Fund. The IMF has repeatedly said that, over the years of Tory Governments, there’s been underinvestment in infrastructure, which must be addressed. The advice from the OECD has been for countries to take advantage of low borrowing costs to fund public investment. Infrastructure investment is a priority for this Government, reflecting evidence that, second only to higher skills, good infrastructure is key to economic development. We’ve sent a clear signal to the market that Wales is open for business, with the commitment of a pipeline of major public-private partnerships. This pipeline includes the completion of the dualling of the A465, the construction of a specialist cancer care facility, and an additional tranche of investment in the next phase of twenty-first century schools.

Deputy Presiding Officer, our track record of supporting 150,000 jobs in the last Assembly term, of fighting for a future for the steel industry, of preventing more than 15,000 young people from experiencing unemployment, of securing record inward investment, highlights that this Welsh Government will continue to stand up for Welsh interests.

Thank you very much. I call on Nick Ramsay to reply to the debate. Nick Ramsay.

Thank you. Well, if you weren’t aware that the Welsh Conservatives believe in strong and stable leadership before this debate, you are now, and our motion and the contributions made today, certainly from this side of the Chamber, have reiterated the need for that UK leadership to continue beyond 8 June. Now, of course, whilst there is a tangible threat posed to the UK’s economy and well-being by Jeremy Corbyn’s Labour Party, that doesn’t necessarily mean that the Welsh Labour Government should be tarred with the same brush. You are probably the most sensible bit of the Labour Party left in the UK. That’s not the greatest of compliments, I know, but take it in the spirit that it’s meant. How ironic that it fell to the Cabinet Secretary for infrastructure, Ken Skates, to mount a defence of Jeremy Corbyn—not probably the most Corbynite Member of the front bench, but there we are. The irony wasn’t lost on me, Ken.

You can imagine our disappointment when the First Minister endorsed the proposal to borrow an extra £500 billion. To ratchet up by £500 billion the borrowing requirement that Britain currently has would be nothing short of outrageous. Mind you, you can see that the UK Labour Party may now feel that they have to adopt such outrageous fiscal policies to fund their growing list of unfunded spending commitments—a spending list that would risk sinking the economy, if implemented, into the coalition of chaos that we have spoken about so many times today. And, if that situation happened to the UK economy thanks to the UK Labour Party, it would be the Welsh Government here that would ultimately suffer, whatever political colour that is. Because, if you have an uncontrolled fiscal policy and an uncontrolled borrowing requirement going up over the years to come, then you would not have the money to spend, ultimately, because the money would not be generated across the UK level to come here to support you.

Would the Member give way?

I will.

Can he tell me on how many occasions in the last 100 years the UK has been in surplus and has had no national debt at all?

Debt is an important part, an important fiscal tool, and we have been in debt. But you go back to the 1990s, when the deficit was running around £20 billion, and you look at when the Labour Party left power in 2010, and it’s running at well over £150 billion. So, clearly, it has been an upward trajectory and that needs to be controlled. As Plaid Cymru have entered this debate, can I just say—? I don’t have much time, but I’ll just say this: Adam Price, you spoke passionately but you seemed eager to hang all the problems of Wales on the Conservative party. Well, Adam, it hasn’t been the Conservative party dominating Welsh politics for 100 years. And you know that in your heart of hearts. It wasn’t the Conservatives dominating Britain from 1997 to 2010, when so much of this debt was generated in the first place and left us in this position. And it hasn’t been my party here, my group here, dominating Welsh politics and dominating this Assembly since the advent of devolution in 1997. It’s been the other parties who have been presiding over this. So, if you’ve got problems with the way Wales is looking today—and I understand you have—then don’t look over this side of the Chamber for the problem. Look here for the solutions, but not the problem, because I know where that lies.

Well, the response is quite simple, isn’t it? They’ve been in power in Wales for 100 years. For most of that time in Westminster, you’ve been in power. You are both responsible for the terrible state that our economy and society is in as a nation. Shame on both of you.

And Plaid—[Interruption.] And Plaid Cymru was part of that Welsh Government between 1999 and—[Inaudible.]

You can’t be heard because your mic’s off.

[Inaudible.]—over the last few months. It’s a shame that Plaid Cymru are choosing to attack the Conservative party when the blame does not lie here. Let’s get on with the job of delivering strong and stable leadership for the UK.

The proposal is to agree the motion without amendment. Does any Member object? [Objection.] Therefore, we defer voting until voting time.

Voting deferred until voting time.

Unless three Members wish for the bell to be rung I will proceed directly to voting time now. Okay, we now move to voting time.