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Wednesday, 23 May, 2001, 14:40 GMT 15:40 UK
Plaid Cymru: The economy

Learn more about Plaid Cymru policies on tax, spending, and the economy.


BACKGROUND

Of all the political parties, Plaid Cymru is the one that says it is most committed to the aims of social justice, higher taxes and more public spending.

The party has attacked the "suspicion towards public experience and obsession with tax reductions".

"One of our main demands will be that the principle of redistribution - geographical and social - be made a major element of policy," the party's manifesto says.

"We shall challenge the presumption against public spending that has been such an integral part of governments' policies over the past 20 years."

And it wants to boost public spending to Scandinavian levels, around 60% of the total economy, compared to the UK level of around 40%.


THE ECONOMY

The party says that there is no conflict between redistributive and sustainable development policies and economic success.

The fate of South East England, where economic "overheating" is causing "serious problems for the economy and the environment", indicates the dangers inherent in the doctrine currently followed, the manifesto says.

"We call upon the chancellor to use his budget surplus to invest for the future rather than to clear the national debt."

The party would further underpin spending by ensuring that the country receives all money due to it under the EU aid regime.

And Plaid Cymru would encourage more environmentally friendly development, indigenous businesses, and social co-operatives.

"As the foundation for our existence and all our prosperity, nothing is more important than the protection of our environment," the manifesto says.

"We believe that GDP on its own is a crude and misleading indicator of the condition of the economy."

The party supports the use of unemployment data in deciding on levels of interest rates.

The regime introduced by Labour, in which unemployment is seen as the key factor in determining rates, has been a "big blow" to Wales, not least through its affect in underpinning the strength of sterling.

"This has punished Welsh business particularly badly, as agriculture and manufacturing are so important to our economy."


TAXATION

Plaid Cymru has called for a commission to redesign the tax system in the interests of "creating a fairer society".

The party wants to make the tax system more progressive, so that the rich pay more.

It has proposed increasing the number of tax bands and an increase in the higher rate of tax to 50% on people with incomes of over 50,000.

Plaid also favours a move towards more green taxation - but in what it describes as a fairer way.

It opposes, for example, the Climate Change Levy, which has hit the Welsh steel industry particularly hard.

It would offer also tax incentives to industry through, for example, reducing levels of corporation tax and employers' national insurance contributions, to "raise the level of economic activity and prosperity in Wales and other depressed areas".

Plaid Cymru would favour particularly small businesses, basing taxes more on turnover or profit "to ensure those making large profits, such as supermarkets, shoulder a fair share of the financial burden."

The party wants a minimum wage of 5 per hour.

And it wants the Welsh Assembly to have the same (limited) taxation powers that are available to the Scottish Parliament.


SPENDING

Plaid Cymru wants more spending on education and training, and more investment in health.

"Effective public services, accessible to all, are one of the essentials of a civilised society," the manifesto says.

On regional spending policy, Plaid Cymru is pressing for a review of the Barnett Formula - the Whitehall system used to calculate public spending levels in Scotland and Wales.

The party believes that it is unfair to use a system based on population rather than income per head. An income-per-head policy would substantially benefit Wales, the party believes.

It also wants to increase the basic pension, which PC would link to earnings, not prices.

And it places a greater emphasis on universal, not means-tested benefits.

It also plans to dedicate more money for the health service and full funding of the costs of long-term care for the elderly.

The party opposes private finance initiatives (PFI) as a means of raising money for public investment.

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