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Centralising more financial power at Westminster will perpetuate inequality, Plaid warn before Budget

03 Mar 2021 4 minute read
Rishi Sunak at Westminster. Picture by the Ministry of Housing, Communities and Local Government (CC BY-ND 2.0).

Plaid Cymru have warned that plans to centralise more spending power at Westminster will perpetuate economic inequality.

Plaid Cymru’s Treasury spokesperson, Ben Lake MP, said that “Westminster’s grip over our economy has created the worst regional inequalities in the western world” and urged the Chancellor to use his Budget to empower communities instead.

But the UK Government was set to repeat the same errors by centralising decision making for the Shared Prosperity and Levelling Up funds in London, he said.

He said the Chancellor should reverse this “disastrous decision”, and to “show that he trusts our communities” by granting Wales the borrowing powers needed to “invest in our future”.

“Westminster’s grip over our economy has created the worst regional inequalities in the western world – concentrating wealth in the South East of England while Wales is impoverished,” Ben Lake, who is MP for Ceredigion, said.

“The Chancellor knows this. He knows too that it is for these precise reasons that Wales has an explicit responsibility for economic development in the first place.

“He has a chance today to put ideology aside and show that he trusts our communities to recover from this crisis. I urge him to reverse the disastrous decision to centralise the Shared Prosperity and Levelling Up funds in Westminster and grant Wales the borrowing powers we need to invest in our future.”

His comments come after Welsh ministers blasted the UK Government’s “appalling record” of investing in Wales after it was announced that a levelling up fund will be controlled from Whitehall.

They said that the UK Government were not delivering new money to Wales but rather taking money that would previously have been spent by the Senedd.

Labour leader Keir Starmer also said yesterday that the levelling up fund announced by the UK Government was “nothing more than a cynical ploy to undermine devolution”.

“Tories promised that Wales wouldn’t lose a penny of funding. Yet the Chancellor’s ‘Levelling Up’ fund looks like nothing more than a cynical ploy to undermine devolution and avoid giving Welsh communities their fair share of investment,” he said.

“People in Wales tell me they’ve stopped believing the Tories when they talk about ‘levelling up’ the UK. Because the reality is more money for their friends at the expense of communities in greatest need.

“I think people know and value the difference that Mark and Welsh Labour make in government. They are moving Wales forward. It is a mission we share across the rest of the UK.”


Speaking today, Ben Lake also urged the Chancellor to support the most disadvantaged, saying that problems in the Self-Employed Income Support Scheme should be fixed, and making an increase in Universal Credit permanent.

“Today is the Chancellor’s opportunity to build trust in our economic recovery,” he said.

“That means fixing the fundamental flaws in the self-employed scheme. It means making the £20 uplift to Universal Credit permanent. And crucially, it means empowering our communities, not further licensing Whitehall to take decisions on our behalf.”

A UK government source has briefed that the chancellor will also extend the £20 weekly increase to Universal Credit for six months. Figures for January show there were around 280,000 people receiving Universal Credit in Wales.

The Chancellor is also expected to announce £4.8m to pilot a hydrogen production centre in Holyhead in Anglesey, which would produce and distribute hydrogen made using renewable energy to use in HGVs.

The budget is also set to bring forward £58.7m of funding over the next five years for investment in three “City and Growth Deals” in Swansea Bay, the north and mid-Wales.


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