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banner Thursday, 1 March, 2001, 12:31 GMT
Plaid Cymru: Welsh perspective required

Caernarfon MP Dafydd Wigley stood down as Plaid Cymru leader last year and is now the party's Treasury spokesman.
By Dafydd Wigley MP

The Budget needs of Wales are very different to those of England.

A basic common factor of this grim scenario is the disparity between the pound and the euro

The economy of Wales is performing in stark contrast to that of south-east England. Gross domestic product per head in Wales is 78% of the UK average; that of south-east England is 117%.

Wales has lost 38,000 manufacturing jobs since 1990. The coal industry has been killed off; steel is rapidly following suit.

Agriculture lost more than 6,000 jobs over the past two years and now faces the foot-and-mouth body blow.

Tourism struggles against cut price and currency-assisted overseas competition.

Over-strong pound

A basic common factor of this grim scenario is the disparity between the pound and the euro. A sustainable 15% reduction in the parity of the pound would work wonders.

But it cannot be achieved when the Bank of England is instructed to gear its policy to one single consideration - the level of inflation - and to ignore unemployment.

The parity of the pound should be adjusted downwards by reducing interest rates. Any inflationary pressure should be taken up by taxation.

Tackle regional disparity

Plaid Cymru seeks significantly stronger regional policy to stimulate investment and jobs in those areas currently suffering from low income, persistent unemployment and low activity rates.

Specifically, we seek variations in taxation in the Objective 1 areas of the UK as recommended in the recent Welsh affairs select committee's report.

Plaid calls for:

  • a halving of employer National Insurance contributions for a guaranteed 7 year period
  • halving of UK corporation tax liability based on the proportion of a company's work force within Objective 1 Areas - again with a 7 year guarantee

    Such radical steps would benefit Merseyside, south Yorkshire and Cornwall as well as Wales. It would show that the government is really serious about ending regional disparity.

    Plaid Cymru would also seek progress on the following issues:

  • an increase in public expenditure up to 40% of GDP
  • a harmonisation of diesel taxation to provide a level playing field in the EU
  • increased in top tier income tax to 50%
  • the re-linking of state pension to earnings
  • a review of the Barnett formula on to a needs indicator basis
  • all Euro-grants to Wales to be paid over and above the Barnett block
  • conditions must be created to enable an early entry into the euro
  • the setting up of a taxation commission to inquire into the workings of the UK tax system

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    See also:

    09 Aug 00 | Wales
    Plaid leader reshuffles cabinet
    19 Jul 00 | Wales
    Murphy's pledge on Euro funds
    03 Jul 00 | UK Politics
    Bowing out but not down
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