Labour 'faces questions' about attack on Plaid fund

Opponents say Labour has "questions to answer" over the party's attack on a Plaid Cymru funding policy.

Labour has dismissed a Plaid idea for a not-for-profit company that could raise money to make up for spending cuts.

But Plaid says Labour Finance Minister Jane Hutt recommended putting the same idea to the Treasury on behalf of the two parties' Welsh Assembly Government.

Labour denies that the proposal sent to the Treasury by the assembly government is the same as Plaid's scheme.

It is the latest pre-election spat between the coalition partners.

Labour last week described Plaid's proposal as "completely unworkable" and "electioneering of the worst sort".

It later emerged Ms Hutt signed off plans to negotiate with the Treasury about a new funding mechanism for Wales.

Labour said Plaid's plans were a "quantum leap" further than what the assembly government proposed.

But Plaid said the dismissal "raises questions about the integrity of the Labour Party in Wales".

The disagreement revolves around using bonds to raise funds.

Plaid has said its not-for-profit company could raise £500m from the financial markets to spend on infrastructure such as building roads, schools and hospitals.

The Treasury said a paper has been submitted by the assembly government, but no discussion have yet taken place. It also ruled out talking to Plaid.

Welsh Liberal Democrat leader Kirsty Williams said Labour had "questions to answer" and must explain why it criticised Plaid while ministers gave the go ahead for talks with the Treasury.

She challenged First Minister Carwyn Jones at question time in the Senedd.

She said: "It's quite clear, first minister, what you are doing is trying to rubbish your coalition partner's plans for the economy as unworkable, when in fact your very own government is beavering away behind the scenes to do something very, very similar indeed."

Mr Jones said "there have been no discussions on this matter".

'Historic under-funding'

He attacked the Lib Dems' coalition government in Westminster for failing to address Wales' "historic under-funding" by the Treasury.

He said it was no secret there had been discussions with the Treasury for many months "on a number of financial issues".

Plaid AM Rhodri Glyn Thomas congratulated the assembly government for initiating discussions with the Treasury about creating a company that would use the financial markets to raise funding for public sector infrastructure projects.

Mr Jones said discussions with the Treasury had centred on reforming the Barnett formula which sets the size of Wales' devolved budget.

Earlier, Ms Hutt told journalists the assembly government would look at "every mechanism to ensure that we can invest appropriately in infrastructure".

She refused to be drawn into the row, adding: "I think this is a matter for the political response and for manifestos."

It is a further sign of decoupling between Labour and Plaid ahead of May's assembly election.