Jonathan Edwards MP has urged the UK Government to match the loosening of monetary policy following the Bank of England’s historic cut of interest rates to 0.25%, with a direct, fiscal policy response focused on investing in projects that can be achieved in the short-run.
Noting the growing inequalities in the UK in both geographical and individual terms, Jonathan Edwards has called for a shift away from the ‘white elephant schemes’ of the Osborne’s economic policy such as HS2, Crossrail and Hinkley Point C centred in London and South England.
Investment in Welsh projects such as Swansea Bay Tidal Lagoon, a Carmarthen to Aberystwyth railway line and a South Wales west metro line connecting the Western valleys to Swansea could strengthen the Welsh economy and deliver sustained economic growth.
A new strategic economic policy, financed through direct government investment using historically low borrowing rates, would help restore confidence in the UK economy following the EU referendum, and would ensure that economic growth and wealth benefits the whole of the UK.
Jonathan Edwards MP, Plaid Cymru’s Treasury Spokesperson said:
“Today’s announcement by the Bank of England should incentivise a bolder, more strategic approach to infrastructure investment projects, focusing on addressing the growing geographical wealth divide that is separating the UK.
“Osborne’s government focused on white elephant schemes that were great for headlines but little else. Borrowing costs for the government are falling; more than ever this is the time now to invest in smaller scale, deliverable projects across the UK, rather than in South East England, that deliver sustained economic benefits to communities and the local economy.
“Direct investment by the UK government would make projects such as Swansea Bay Tidal Lagoon dramatically cheaper as the current system of contracts for difference shifts the cost of projects onto the consumer through higher energy bills for instance. Investing in the Swansea Bay Tidal Lagoon, alongside opportunities including a rail-link between Carmarthen and Aberystwyth, and a South Wales West metro linking the Western Valleys to Swansea, could truly empower the Welsh economy by connecting communities and markets, developing tangible benefits to Wales.
“Direct investment is cheaper in the long-run and ensures that these projects are actually built, delivering a significant boost to the local economy while delivering our commitments to pressing issues such as climate change through action, clean energy and strategic economic thinking.
“The government must take advantage of the present situation and restore confidence in the economy and the public by developing a new UK-wide economic strategy focused on deliverable, cost-effective and geographically dispersed infrastructure projects.
“It is time for the UK government to adopt Plaid Cymru’s commitment to doubling investment in infrastructure to deliver sustainable, long-term economic growth.”