Page last updated at 16:43 GMT, Thursday, 11 February 2010

Osborne attacks Labour 'poverty of ambition' for Wales

George Osborne at the SA Brain brewery in Cardiff
George Osborne said Wales needed a new economic model

Conservative shadow chancellor George Osborne has accused Labour of "poverty of ambition" for Wales.

He said Welsh Secretary Peter Hain, who compared Wales' economy favourably with Rwanda on Wednesday, had revealed an insight into Labour's vision for Wales.

Mr Osborne said he wanted to compare Wales to Japan and France, not Rwanda.

But Labour said Tories would wreck fragile growth, Lib Dems accused them of changing policy, and Plaid Cymru claimed they were dismissive of Wales.

The shadow chancellor was in Cardiff to unveil what he called a "new economic model for Wales", setting out Tory plans for a private sector recovery.

"I thought we had a real insight into what Labour's vision of Wales is this week when Peter Hain said at least Wales is richer than Rwanda," he said.

"I want Wales to be richer than Germany and France and the United States and Japan - those are the countries we should be comparing Wales to, not Rwanda.

We can't go hitching the fortunes of Wales on to the back of the City of London
George Osborne, shadow chancellor

"It showed the poverty of ambition from the Labour Party after years and years in control here."

Mr Osborne, who visited the SA Brain brewery and later met local business leaders, stressed that Wales needed a new model of economic growth.

He said it was vital to make it easier to create new businesses, for example by simplifying the overall tax regime.

"The goals are that Wales grows through a private sector recovery with exports, business investment, jobs coming into Wales instead of losing jobs to countries in central Europe," he said.

"That's a different model of economic growth to the one we've pursued over the last 10 years which is based on consumer debt and government debt and has left Wales with the highest unemployment in the nations of the United Kingdom and indeed, one of the poorest regions of the United Kingdom.

"That has to change. We can't go hitching the fortunes of Wales on to the back of the City of London."

Defence training

Among eight "benchmarks", the Conservatives have pledged to open up the government procurement process so that small and medium sized businesses find it easier to win more contracts.

The party estimates this could mean a £500m boost for such firms in Wales.

He would not commit to reforming the Barnett formula - the formula that determines the size of the Welsh block grant - but he reiterated Tory plans to have the formula independently assessed.

Mr Osborne said that he suspected Wales could do pretty well out of such an assessment.

In response, Mr Hain said Wales needed Labour investment not Tory benchmarks.

'Savage cuts'

"George Osborne is being two-faced. If he cares about jobs in Wales why doesn't he guarantee the defence training at St Athan?" he said.

"If he wants Wales to share in rising prosperity why is he going to give massive tax cuts to English millionaire property owners?"

Plaid Cymru finance spokesman Chris Franks said the Conservatives had a "dismissive attitude towards Wales and the Welsh economy".

Mr Franks said Mr Osborne's press release bore "a remarkable resemblance" to a similar release in Scotland and showed Conservatives "treat Wales as an afterthought".

Liberal Democrat Treasury spokesman Vince Cable said this was the third time the Conservative Party had changed its economic policy in as many weeks.

"This is 'one size fits all' policy making for the Tories as they launched this a few weeks ago for the rest of the UK," he said.

"What they fail to understand is that Wales' economy has been left in a bad state after a decade of Labour incompetency and 20 years of Tory neglect."

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