Welsh Government and borrowing powers (Assembly speech)

I want to concentrate on one part of the resolution, namely that of borrowing powers for Wales. I intend initially to compare the proposed borrowing powers of the Welsh Government with those of a local council. A local authority has total discretion as to how it spends its capital allocation, but it can also undertake prudential borrowing. It can borrow as much or as little as the council feels is needed and believes it has the ability to pay back. It can borrow for whatever reason and it can make local choices: it can build new schools, make road improvements or build new civic buildings. That is, borrowing for capital schemes is available for use across the whole of the council’s infrastructure investment. Why should the Welsh Government be treated less favourably than local councils?
	If you are talking about some of the routes, Newport City Council could borrow money to produce some of the routes if it so desired, without anybody having any means of stopping it. Of course, instead of borrowing, the Welsh Government could enter into a 30-year PFI deal, which would cost more, because the private company involved would borrow at a higher rate than from the Public Works Loan Board, and it would have profit built in. This would be acceptable to the Treasury; in fact, it said so this morning. It can be carried out without any attempt at external control.
	Then we have what I consider to be the bizarre system to borrow against your income stream, yet no income stream is needed for a PFI scheme that is entered into for 30 years, and no income stream is needed for leases and leasing equipment. Income streams are only required for borrowing so you can do exactly the same thing any other way as long as it does not have the word ‘borrowing’ against it. I find that absolutely and utterly bizarre. However, each of the PFI scheme leases have an ongoing annual cost, similar to, although much more expensive, than borrowing. Borrowing should be under the same conditions. We should have Welsh decisions on how much to borrow, Welsh decisions on what to spend it on and Welsh decisions on who to borrow it from.
	Take local councils. They have their own income stream, but it has basically been cut twice. First, it was when commercial rates were centralised, and then when council tax replaced the poll tax. Local income via council tax could be abolished at any time—that is within the power of the Westminster Government—yet prudential borrowing is allowed. There is also the choice of where to borrow it from. They can borrow it from the Public Works Loan Board, which is normally the place of choice. They can also borrow from the European Investment Bank, from other banks or by using bonds, as Transport for London did, which is a public sector local government body, which raised £600 million to help finance the construction of Crossrail.
	The Welsh Government should have the power to undertake prudential borrowing, and the power to decide the priorities of Wales without any intervention from outside.