No need for long hours

Tweet I welcome the vote in the European Parliament to end the UK opt-out from the working time directive. This has been an anomaly for too long, and it is to the shame of Labour that they have not only not abolished the opt-out themselves, but actively opposed its abolition. Many of the arguments put forward by those who wish to retain the opt-out are specious at best.

Some employers' organisations try to present this as preventing workers from 'choosing' to work longer hours, but the reality is that the employees often have little choice. I am aware of some organisations, for instance, where it is a condition of employment that staff sign a 'voluntary' waiver of their rights before they are employed.

The representative of the IoD even argued that we need longer hours to get us out of the recession. I'm not convinced - employing fewer people for longer hours seems to me a much less effective way of doing that than employing more people for shorter hours – and the latter is more likely to build social inclusion and share wealth as well.

Others have argued that it goes against the differing 'employment cultures' in the different European states. That seems to be code for the fact that the UK has a culture of long hours, and employers wish to retain that. One has to ask why. I've worked in organisations with that type of culture – and it often means that people are afraid not to be in work before the boss, and afraid to be seen to be going home before him. Do they achieve any more? Not in my experience - there comes a point where 'presenteeism' becomes ineffective and adds nothing to overall output. There is a huge difference between increasing output and increasing productivity. Working longer can increase output; but increasing productivity has more to do with working smarter.

Most worrying of all, however, is surely the idea that the UK's 'competitiveness' somehow depends on people working longer hours than our European neighbours. Why? And what on earth does it say about our systems and processes if other European countries can deliver more effectively that we can in shorter hours?

For too long, the culture of long hours has been used as an excuse by some employers for their own failures to invest in equipment, processes, and training - and it is the employees who have paid the cost. A common playing field across Europe should be something we welcome, not fear.

Don't tell the banks

Tweet It often seems that, as fast as I get my various spam filters set up to avoid the stuff, so the spammers find some way of getting around the controls, and their missives get through. I've never really understood why they think someone is more likely to buy replica watches or Viagra just because the title indicates that the e-mail content will be something completely different.

Anyway, one of the successful ones to get through today offers me a way of beating the credit crunch and getting a 215% return on my investment. It's obviously too good to be true, of course. But I do hope that they haven't succeeded in getting through the spam filters at any of the banks – based on recent performance, they might just fall for it.

Bolting stable doors

Tweet The news that some of our most respectable banks have been completely taken in by what appears to be the most gigantic pyramid selling scam in history is pretty alarming, but is just another indication of the way that corporate and personal greed can blind people to reality.

Not everyone was taken in, of course. As the Sunday Times pointed out, a number of investors were savvy enough to ask how on earth someone could manage a return of 1% to 1.2%, month in month out, and never have a down month. One even said "We could never quite work out what it was that he did". But some major banks ploughed their - our - money in regardless, seeing only an incredibly high level of return and wanting a piece of the action. The net losses from this latest example of greed could be as high as £33billion.

I have to say that I have little confidence that this is the last bubble which will emerge from the wreckage of the world's financial systems. The way that people were taken in over the securitisation of dodgy sub-prime debts was bad enough; but if they have also fallen for a pyramid selling scheme on this scale, it seems highly probable that other problems will emerge as accountants (and hopefully the police) pore over the debris.

That gives me an issue with the government's latest scheme to pump more into the banking system by purchasing 'assets' from the banks. I don't know – and nor am I convinced that anyone else does – whether these 'assets' are actually worth anything, let alone the large sums which we as taxpayers will be paying for them. The only thing of which I am certain is that the amount of 'assets' being traded on the markets is significantly higher than the amount of real, tangible value underpinning them – according to some estimates, possibly by a factor of as much as 10:1.

At the bottom of all this mess are two main factors, it seems to me. The first of those is greed – the pursuit of unrealistic returns which out-perform the market, and which are believable only by suspending critical judgement. And the second is that the financial instruments being traded on the world's financial markets have become too complex for most of the people trading in them – never mind the layman – to understand. Derivatives of derivatives; betting on the outcome of other people's bets – this type of market making serves the interests of only the few, and for them to gain, the rest of us have to lose.

We need to take the time to clean out the stable, not just bail out the banks, and do it thoroughly if we are to have a basis for rebuilding confidence. That means a great deal more regulation over what banks and other institutions can or cannot do, and a determined effort to purge the markets of the gamblers and speculators who think only of themselves. And it means an end to some of the overly-complex financial instruments which are at the root of recent problems.

In that context, the call by David Cameron for an inquiry into the causes of the financial crisis sounded praiseworthy at first – until I read the small print. In fact, for all the brave rhetoric, his call for those who have brought about the downfall of the banking system to face the music seems to be limited to those who can be proven guilty of actual illegal actions, which means that the vast majority of those who have behaved in an utterly irresponsible fashion would completely escape his clampdown. Not really surprising, given that his party removed the regulations which would have prevented some of the daftest decisions being taken. (Gordon Brown, of course, even lectured the rest of the world on why they should do the same. For either to criticise the other over the causes of the crisis is less than honest.)

I am absolutely certain that Cameron's call for those who have behaved irresponsibly to be punished will not extend to the gamblers and speculators who fund his party, for instance. And even after all that has happened recently, his friends and backers, the short-sellers, are still at it – undermining the UK economy by short-selling sterling in order to make large sums of money for themselves.

Properly run financial markets are an essential element of the world's financial systems; but markets should be there, first and foremost, to serve our collective needs. A market which operates primarily to allow the greedy to make profits at the expense of others is not serving the interests of the majority. Given that we all depend on the markets to keep the economy moving, we have every right to insist that they be run in a way which is transparent and honest and which serves our needs.

Paying for spin

Tweet As part of its coverage of AMs expenses, the Western Mail drew attention to the monies paid by two local Tory AMs to a company (Hart Media Services) owned by the Tory Parliamentary candidate and his wife for "press work". (I think they got their figures slightly wrong – I make the total paid £4810 rather than £4615.)

The company seems to have started working for one of the AMs in May 2007 (quite interesting in itself, given that the company appears not to have been established until 14th June!), and for the other from July 2007. In both cases, there seems to be a standard monthly payment being made on a regular basis.

Labour AM, Alun Davies, has rightly queried the propriety of the arrangement, arguing that this is a case of using taxpayers' money for the purposes of "funding a PR company, which has clear links to a Tory candidate to publicise the work of Conservative AM’s in West Wales".

However, anyone perusing the local media would know that almost every statement issued by the AM carries a quote from the parliamentary candidate, and almost every photo of the AM somehow manages to include the parliamentary candidate as well. If this is the 'press work' being paid for by the AM's allowance, then it is being used not just to promote the AMs, but also to promote the parliamentary candidate himself. I find it hard to believe that that is within the letter, let alone the spirit, of the rules.

Roads for Wales

Tweet Back in the 1960s and 1970s, economic development in Wales was seen primarily as a question of attracting large inward investments. In that context, transport links - especially road links - were seen as an absolutely key element, by myself as well as many others. A good, dualled, road network across Wales from West to East as well as North to South was seen - almost universally, I think - as a good thing, even if there were some issues about affordability.

But times and attitudes have changed, and policy needs to adapt, although it seems that not everyone can see or understand that yet. Our future need is to move away from over-dependence on large inward investment schemes and rebuild a more localised economy with a range of smaller, indigenous enterprises serving more local areas, and that implies a very different approach to road planning.

It does not mean that we do not need good, efficient transport links, but it does mean a change of emphasis. In Pembrokeshire, for instance, I am convinced that the idea that economic salvation rides in on the back of a dual carriageway right across the county is an outdated and irrelevant concept. We certainly need a good network of major roads across the county, but we also need some significant improvements to the county's internal road network if we are to build a sustainable and localised economy.

In that context, I believe that Ieuan Wyn Jones took the right decision last week, in his announcement that the A40 improvements will proceed according to current plans which include key by-passes for Robeston Wathen and Llanddewi Velfrey. The proposed solution will be cheaper, and will be delivered sooner than the alternative dual carriageway proposal suggested by the Tories and the County Council, and will provide an adequate backbone for the network in the north of the county.

I'd like to see the Llanddewi Velfrey by-pass element delivered sooner than currently planned, of course; as well as improvements to the main road through the south of the county to Pembroke, but that's a debate about timetabling and relative priority rather than about the design solution.

Both the County Council and the local Tory AMs have done their best to obstruct progress by insisting on an unnecessary dual carriageway solution. Clinging to outdated concepts of economic development, they have attempted to present a dual carriageway as an essential element of the county's prosperity, conveniently forgetting to point out that, if they had their way, the result would be not only a massive increase in cost, but a consequential serious further delay in providing much needed relief to villages currently split in half by a major trunk road.

That would be bad enough if they had done their homework; but the county council attempted to use a little-known procedure of the National Assembly to press its case without properly preparing in advance. The result is that they had no solution to the question of the extra costs involved (and certainly weren't prepared to offer any money from their own coffers), they produced no evidence of any economic benefits which would stem from their proposal, and couldn't even justify their proposal on the basis of a need for extra capacity. The net result was that they simply wasted time and money in a useless piece of grandstanding.

The Tory AMs have described the decision by the Assembly Committee as a 'bitter blow'. Their claim that the attempt was thrown out by the Assembly Government is however a complete misrepresentation of the situation. Pembrokeshire's petition was heard by an all-party committee, which agreed its decision unanimously. Even their Tory colleague member was completely unconvinced by the arguments presented.

The Tories have also been on a little jaunt to Ireland to help them prepare a 'business case' for dualling, apparently. Of course, a major part of the traffic on the A40 is Irish lorries coming off the ferry – and then driving all the way across Pembrokeshire (and Wales!) without stopping, and there is no doubt that a dual carriageway would benefit the Irish businesses involved. I'm sure that those businesses would be delighted to see the Assembly Government spending its scarce resources on building a super highway so that they can get their lorries through the county even faster – but how does that benefit Wales, let alone Pembrokeshire?

A sensible, planned transport strategy would be aiming to get that traffic off the roads completely, and onto the railways, and that's an area where I'd certainly like to see a more pro-active approach from the Assembly Government. Scarce Welsh financial resources should be used to build a transport infrastructure which is low carbon in its construction and operation. Last week's announcement by Ieuan Wyn Jones is a good start in that direction.

Hidden agendas

Tweet "The Field" is not a magazine which features on my regular reading list, but my attention was drawn to an article in the November issue, written by the Chief Executive of the Countryside Alliance. He is also known to us locally, of course, as the Conservative candidate for the parliamentary election.

The article quotes extensively the founder and director of a rather shadowy organisation called Vote-OK. Vote-OK proudly boast that they helped to unseat a number of Labour MPs in the 2005 election, and are aiming to do even better in the next election, because they have had time to "bed down in the target constituencies". The impression given by the article is of an objective interview; but it seems that there may be a much closer relationship between the two people involved.

Vote-OK have a web-site, which spells out what they are about, with rather more honesty than when they're out on the ground campaigning. They are a single-issue group, properly and legally registered as a third party organisation with the Electoral Commission, which seeks the repeal of the Hunting Act by removing anti-hunting MPs (Labour) and replacing them with pro-hunting MPs (Tory). They concentrate their efforts on marginal constituencies, and organise thousands of volunteers from local hunts to turn out to support the Tory candidates.

Specifically, they claim to have unseated 29 MPs in the last election, and to be targeting another 139 for the next election. Although their FAQ's section declines to identify which MPs and constituencies they are targeting, I think we can probably take it as read that Nick Ainger and Carmarthen West and South Pembrokeshire will be receiving the 'benefit' of their attention.

And that means that people locally should know a bit more about them. There are two aspects in particular which might cause people to ask some searching questions.

Take, for example, the comments about them in a report by the Electoral Commission on the 2005 General Election. The report described them thus, "Vote OK was an innovative and unusual ‘single-issue’ campaigning group in that it did not campaign at all on the issue in question", and "Vote OK did not campaign on the issue of hunting". Yes, that's right. They campaign in a range of constituencies in pursuit of a single policy objective which they endeavour never to actually mention!

Indeed, according to this report from the Mirror on a more recent election campaign, their volunteers are actually under clear instructions not to talk about hunting at all, and to give the impression that they are Tory Party workers.

Secondly, what exactly is their relationship with the Countryside Alliance? They claim, again in their FAQ page, to be entirely independent of the Alliance, but they were actually founded by three former members of staff of the Countryside Alliance, and the Electoral Commission report refers to them as having "emerged out of the Countryside Alliance". The 'emergence' of this new group appears to be a means by which an apparently all-party group has spawned a political wing which specifically aids the Tory Party.

More evidence for the relationship between Vote-OK and the Countryside Alliance comes from 2005, when the Guardian published a leaked transcript of a conversation between the Chief Executive of the Alliance (and now Tory candidate for this constituency), and the people involved in setting up the new group. The transcript indicates that the said Chief Executive took a big part in setting up Vote-OK, and in advising them on how to get rid of Labour MPs.

Amongst other things, he advised them against physical assaults on Labour MPs, with the words "Alun Michael [the rural affairs minister] with blood running from his nose lying in a ditch because somebody decked him might give the person who did it a warm feeling for a short time. It might also do untold harm." Warm feeling? Only 'might' do untold harm?

Perhaps most telling of all, in terms of clarity about their objectives, methods, and hidden agenda, is this extract from the Guardian's report:

Mr Hart then went on to spell out the strategy. "It would be much cleverer if we never mentioned hunting at all ... We've got to go into these constituencies campaigning on health, education, crime."

In short, it's a clear declaration that these one issue campaigners should avoid all mention of their core issue, but instead pretend to be interested in more general questions. And it provides further evidence for the view held by many local Conservatives that their party has been infiltrated and taken over by single-issue campaigners. Entryism used to be a problem for the Labour Party; but it seems that it's the Tories who are the victims these days.

It means that we have a Conservative Party largely financed from the profits of the sort of activity which has brought the world's banking systems to the verge of collapse, and a candidate who seems to consider that issues relating to health, education, and crime are relevant primarily as a ruse for hiding the real agenda. The hidden agenda behind all of this is the repeal of the Hunting Act, but those involved are doing their utmost to avoid discussing this objective with those whose votes they seek.

Now, as I said earlier, none of this is actually illegal under current rules. Some might think that it should be illegal for an organisation to campaign semi-secretly in an election whilst doing what they can to conceal what they are doing and why; but as things stand, it seems that it is not. However, for me, being entirely legal is not at all the same thing as being entirely honest with the voters.

Stating the obvious

Tweet I was disappointed by the report a few days ago about the Assembly Committee which had been deliberating the question of small rural schools. The conclusion that 'small schools should not be kept open at the expense of a child's education' is unquestionably a case of stating the obvious, and didn't need a six month enquiry to reach.

Some politicians have a technique of asking questions in a way which leads you to the conclusion that they want, and the statement by the committee's chair, Alun Davies AM, is a classic in that context. "Should we provide children with a second-rate education so a community group can have a hall in which to meet?", he asked. Well, no, of course not – but that isn't what anyone is asking for. When communities lose their school, it isn't the buildings that are the most important factor – it's the social and community activity which revolves around the school.

I've had some experience as a parent of children in both a medium-sized urban school and a small rural school, and the educational experience of children in the two settings is clearly very different.

Larger schools provide more competition between children of the same age, and for some children, the lack of that element in a small school can be a real problem. But smaller schools can provide a real family atmosphere in which there is individual attention for children, and in which the children look out for each other across the age ranges.

Larger schools can and do select the ablest pupils to take part in concerts, sports and shows – small schools typically find a role for every child in every event.

Small schools tend to get more support from parents, grandparents and friends at their events. There is a much more real sense of 'ownership' by the community. A turnout of 20% at the annual meeting with governors would be considered good by many larger schools; less than 80% at many small schools would be seen as very poor.

There is no necessary reason why the educational experience provided in a small school should be any better, or any worse, than that provided in a larger school; but it will be very different. The quality of leadership is probably the most important factor governing success or failure, not the size.

That brings us back to the one factor which is indisputably different between small and large schools – the cost per head. From this report, as from so many other new stories in recent years, it is hard to escape the fact that, whatever politicians say about the quality of the educational experience, the real driver behind the move to fewer, larger schools is financial. And no-one should be surprised that, when they realise this, communities feel that the community benefits of retaining the schools make it a price worth paying.

Still taking the money

Tweet It seems that David Cameron decided at the last minute not to attend a lavish birthday party given by a hedge fund millionaire and Tory donor on Friday night. He had been expected, but pulled out, apparently because he thought that such a party might not be in keeping with the new mood of political austerity.

He's still taking their money, though.

Democracy in action?

Tweet I have a fairly open mind at this stage about the suggestion of replacing the current police authority set-up with directly-elected authorities. In principle, electing people to the authorities seems to me to be preferable to appointing them behind closed doors, even if many of the people appointed have themselves already been through an election to become local councillors. To be worthwhile, however, the police authorities would need to have a real degree of control over policing, and not just be rubber-stamps for whatever the Home Office decides.

I'm not convinced that the reasons given by opponents of the idea at the weekend stand up terribly well, though.

I'm reluctant to disagree with a councillor from my own party, but I simply can't go along with Lindsay's argument that we shouldn't make this change because there is a danger that extremists could end up serving on police authorities. It's true, of course, and most of us would not welcome such an outcome – but it sounds a little bit like arguing that we shouldn't hold elections because the turnout might be low and the wrong people might win them.

It was the comments of the WLGA leader, John Davies, which seemed to me to be particularly lacking in validity. He expressed concern that the police authorities and local authorities might end up working to different political agendas – conveniently ignoring the fact that Dyfed-Powys (his and my home force) covers the area of four different counties, so there is no way that they can currently be guaranteed to be following the same agenda anyway.

He also argues that this would add another level of "unnecessary and extremely costly" bureaucracy. I'm really not sure how replacing nominees with elected members either adds another level or needs to cost any more.

I suspect that Cllr Davies is actually more concerned about losing part of his personal power, however. In Pembrokeshire, the county council's 'Independent' members of the police authority are not elected by the council, but are in the gift of the Leader of the council – who has a total of 34 paid posts to which he can appoint his councillors. The Leader is none other than the very same Cllr John Davies. And I'm sure that he weighed things up very carefully before appointing himself as one of the county council's representatives on the Police Authority.

Misunderestimating the numbers

Tweet The story this week about the funding of the railways seems to confirm the point that I made recently about the lack of a long-term strategy for our railway system.

What we need is an overall long term plan for investment in railways which deliberately aims to switch traffic from road and air to rail. What we have is an attempt to respond to demand as and when it is identified, based on estimates of growth which seem to be plucked out of thin air, and are significantly lower than recent actual growth.

Being entirely cynical, this does enable the government to claim that they've allocated adequate funding to meet the anticipated levels of growth. No doubt, when the rail chaos and overcrowding continues, they will say it's because the demand has grown faster than anticipated (code for it being our fault for wanting to travel by rail). However, understating the anticipated levels of growth to meet the planned levels of investment is just sleight of hand. This is no way to run a railway – or a transport policy.

Less than impressed

Tweet There is more scope for arguing about who is responsible for the economic downturn than one might believe, listening to Brown and Darling, but there is absolutely no question that the downturn is a very serious problem. There are two possible responses to a downturn of this nature – do nothing, or intervene.

The Tories' 'do nothing' approach is basically a return to the 1980's, when their leaders attempted to tell us that 'the market' would deal with the problem, and that unemployment was good for us. Since that unemployment (then, as now) would fall predominantly on the sort of communities which would never vote for them, they largely got away with it, and the selfishness and greed which to many of us personified the Thatcher years moved into full swing.

In fact, it mostly carried on in an untroubled way until that very greed and selfishness brought our banking systems to the verge of collapse. (And it's interesting, as an aside, that the Tories' aversion to intervention in the market to help ordinary families does not extend to an aversion to bailing out the gamblers and speculators who created much of the problem – and who just happen to largely fund the Tory party.)

I am by nature more of an interventionist, believing that governments do have a duty to manage the economy in the interests of the people and to intervene when necessary to achieve that end, so I started out broadly sympathetic to what the Chancellor was trying to do. Sadly, I think that the measures that he has announced fall well short of what is required.

I welcome the increase in income tax for the highest earners of course, but it does look a little bit like too little too late – it doesn't even take effect until 2010. Improvements to benefits are always a welcome move. But these are comparatively minor steps compared to the 2 major items – and both of those are seriously flawed.

The first failing is to try and use VAT as his main weapon. Now, as a general rule, I would tend to argue for more direct taxes and fewer indirect taxes, since that is a more progressive way of raising revenue. But in a crisis where the need is to stimulate the economy, I really do suspect that giving people more to spend would have a greater effect than reducing the prices of the things on which they will spend it.

I am simply not convinced that 2.5% off VAT is going to stimulate the economy very much. It would have been far better to raise income tax thresholds, which would directly target much of the extra help at the lowest earners. And for the very lowest paid, many of the items that they are struggling to pay for are essentials which are VAT-free in any event. Far from helping the lowest paid, if the reduction in VAT provides any stimulus at all, it will surely be for those who are middle or higher income earners.

The second is the increase in cash available for spending on capital projects. It seems like a very good idea at first sight, but I wonder how quickly it can actually be made to happen. Public capital projects get slowed down for all sorts of reasons, not just lack of cash. Indeed, one of the reasons why so many public authorities carry such large levels of reserves is that they often have difficulty spending their capital as quickly as they might wish, so they pop it into the nearest Icelandic bank until they can actually spend it. It simply is not lack of capital which is holding back the capital projects much of the time; and to suggest that it is looks like a serious misunderstanding of the way in which public sector projects work.

Some of the delays are down to bureaucracy, some are down to non-availability of staff to manage and oversee the works or specialist staff such as surveyors and architects; and the public sector procurement process is notoriously slow, even when the project is ready to go. In this context, whilst the extra £140million for capital projects in Wales is something to be welcomed, I can only give it a cautious welcome until we know whether it can actually be spent. An extra £140million simply added to public sector reserves would not actually achieve very much.

Finally, rather than increasing the size of the black hole in public finances, there are things that the Chancellor could have done to close the gap, other than merely promising us tax rises in the future. He could have scrapped the introduction of ID cards; he could have announced the scrapping of the utterly pointless programme to build a new generation of nuclear weapons, and he could have prevailed on Gordon Brown to get UK forces out of Iraq and Afghanistan. Any or all of these would have helped, but in defiance of all reason, they all appear to remain higher priorities for the government than action to help ordinary people.

Collective Responsibility

Tweet Apart from rather unkindly suggesting that I might be in denial, in his response to the government announcement on student finance, Peter Black raises a point about the question of "collective responsibility". To what extent are parties and their members bound to support and agree with all of the decisions taken by their ministers when in government?

It's pretty easy for the Labour and Conservative parties to answer that, because for them, party policy is decided by the leader. Whatever their constitutions and standing orders may say, in effect the membership have no real voice on policy or direction, and are expected to support whatever the leader says – even if (s)he stands on his head and says the opposite tomorrow.

It's more of an issue for a party like Plaid, which belongs to the membership and whose policies are decided by the members. (I haven't a clue where the Lib Dems fit into this spectrum, but I suspect that it will be as complicated and arcane as their other operating processes). Clearly, it is the position of Plaid Cymru which is of most direct interest to me, and it is a question which we didn't really have to face before the advent of One Wales.

All of those of us who stand as candidates are bound to support the party's election manifestos, which are debated and agreed by the party's membership through our National Council. The One Wales agreement was also debated and agreed by the membership through the party's National Council, and it is entirely right that the party's members and spokespersons should be expected to support the content of that agreement as well.

The issue of student finance, however, is interesting in that it is a clear case where the One Wales government has proposed a policy which in the first place is not the only way of achieving a One Wales commitment, and in the second place is directly contrary to a manifesto commitment. There is a real issue for me and many other members here – we may be criticised for inconsistency if we support the proposal and for alleged disloyalty if we do not. And any attempt to bridge that gap will inevitably be described as a fudge.

So, somebody will be unhappy whatever I say - even if I say nothing.

In principle, I'm willing to change my mind on most issues - if the facts change, or if someone can come up with a convincing argument. On the issue of student finance, neither of those things has happened, so I haven't changed my mind; and it would be dishonest to pretend that I had. That means that, in all honesty, I am unable to support or defend the current proposal.

If I choose loyalty to the party's democratically-adopted policy and manifesto, is that necessarily disloyalty to the Plaid ministers in the One Wales government? No, it is not. They have a difficult job to do and are doing it well. As I said yesterday, coalition government inevitably involves short term compromise from time to time, but short term compromise is not the same as long term policy. Plaid ministers make compromises on some issues; Labour ministers make compromises on others. That doesn't mean that they, any more than I, necessarily agree with the position taken by the government on each and every issue.

There is nothing at all wrong with making a particular compromise on a particular issue at a particular point in time whilst making it perfectly clear that we will reverse the policy if and when we have an opportunity to do so. Indeed, such an approach is the only tenable way for coalition government – likely to be the norm in Wales – to operate effectively. What is completely unrealistic, however, is to expect that people who have strongly argued for one position will suddenly start arguing the opposite as a result.

On the specific issue of student fees, we are now entering a consultation process. I expect Plaid, as part of that process, to re-iterate the party's policy. I am confident that the consultation process will be a meaningful one, and I hope that it will lead to a change in the proposal. If Labour are unwilling to change their proposal, then I hope that we can agree to continue with the current regime for the life of the One Wales coalition, and allow all parties to place their proposals before the electorate in 2011.

Whatever the outcome, my own view that higher education should be free is unlikely to change, and no-one should expect me to say that it has.

Of alligators and swamps

Tweet It's many years since I first heard the saying that "when you're up to your waist in alligators, it can be difficult to remember that your original objective was to drain the swamp." Except that it wasn't 'waist' in the original.

It's a neat way of summarising something that happens to all of us – to individuals as well as to organisations, including governments. The problems of the day have to be dealt with, and they can become so pressing that there is no time left to make any progress at all towards the real aim. People in a rush, people under stress, can end up in a mindset of believing that if only they can kill a few specific alligators then all will be fine.

That's what seems to me to have happened in the case of the report published yesterday on Higher Education in Wales. It's a good stab at dealing with a few of the obvious alligators; but the swamp is taken as a given - and the group tasked with reviewing the issues wasn't even asked to consider attempting to drain it.

I'll digress for a moment here. I'm sceptical in principle about the idea of 'independent' reviews where the government both sets the terms of reference and chooses the 'independent' members of the group. I don't wish to impugn the integrity of anyone here; but really, how likely is it that any government will set the terms of reference and the membership of an 'independent' group in such a way that it will produce a recommendation to do the opposite of what the government wants to do? It reminds me of the definition that a 'consultant is someone who borrows your watch to tell you the time'. Very often consultants – or 'independent' groups - are used to give credence to what their hirer already knows, or wants to do anyway, but needs some 'objective' or 'independent' evidence to support.

The relevance of this is that in setting terms of reference which told the Higher Education Group to look at 'the extent to which student finance is targeted to enhance widening access opportunities and encourage take up of priority subjects', the minister concerned was effectively pointing out two particular alligators which needed attention. Given that meeting these objectives was not the original purpose of the current policy, it is hardly earth-shattering news that the group concludes that it isn't achieving them. But concentrating attention on these specifics effectively diverts attention from wider issues.

There is detail in the report which I would challenge, and some very valid points with which I would agree, but any detailed critique of the content would inevitably be based on an acceptance of the starting point - and I do not accept it. I will therefore concentrate on the issues of principle, and for me there are three.

Firstly, should we be charging fees for higher education at all? I find it remarkable that most of those who tell us that 'free' higher education is 'unsustainable' are people who obtained their own degrees under a system where higher education was, indeed, free. It looks at times a little bit like they're pulling the ladder up behind them. It is, of course, true that our universities need more funding; but the funding gap hasn't materialised from thin air. It has come about because successive governments have increased the numbers of students (a policy I support) whilst not increasing the funding to match.

That is not an immutable nor an inevitable state of affairs; it is the direct result of deliberate government policy over many years. Governments choose to invest in wars and nuclear weapons; they choose not to invest in higher education - it really is as simple as that. Within any given level of taxation income, governments prioritise their spending – and they have deliberately de-prioritised higher education. I have long supported the principle that higher education should be free; and I remain unconvinced by the arguments against that.

Supporters of fees argue that their principle is that graduates tend to enjoy higher incomes and higher standards of living as a result of their education, and should therefore contribute towards the costs. But income tax claws back more from those who earn more - so there are other ways in which they pay. And the tax could be made more progressive again, if the will was there. If that is really the 'principle' underlying fees, isn't it also true that pupils who leave school with a clutch of A levels do better than those who only have GCSE's, and that those who leave with good GCSE's do better than those without? At the risk of putting ideas into people's heads, if charging for the benefits which education brings is an issue of 'principle', why select only higher education?

Secondly, we need to return to the question of the Assembly's powers. This is a classic example of why the debate about further powers for the Assembly should not be an arid constitutional matter, divorced from the realities of day-to-day life. It should, rather, be about giving Welsh institutions adequate power to implement Welsh policy objectives. The One Wales government is faced with a situation where decisions taken on the funding of higher education in England constrain our freedom to do things differently in Wales. They have little choice about having to respond to that fact. That is not where we should be, and is not where I want us to be.

And thirdly, are the proposals an inevitable consequence of the One Wales agreement? I don't see that they are. One Wales commits both the Labour Party and Plaid Cymru to maintain the current system until 2009/10, and thereafter to "maintain the current level of resource throughout the four year Assembly term, doing whatever is possible to mitigate the effects on Welsh-domiciled students if the Westminster government lifts the cap on fees in 2009". Whilst the recommendations of the Working Group certainly meet that policy objective, they are not the only way of so doing; and there is nothing in One Wales which commits either party to accepting any particular approach to meeting that policy objective. It is nothing but sophistry to attempt to argue otherwise.

In 2007, I, along with the other Plaid Assembly candidates, fought an election on a platform which included the words, "we will continue to rule out top-up fees at Welsh Universities". I believed that that was the right policy at the time, and nothing has happened to change my mind. Indeed, would anyone really expect me to change my mind as a result of a policy proposal from a Labour Minister? Of course not.

But coalition government inevitably involves compromise between the parties involved, otherwise government would grind to a halt. On most issues, compromise is fairly easily achieved, and that is a tribute to the success of One Wales. On this issue, however, it is hard to see how there can be a meaningful compromise between Labour, which is determined to saddle our young people with ever larger levels of debt, and those of us who want our young people to end their education free of debt.

One simple way out might be to agree to continue with the current system for another year or two and let each of the parties put their proposals to the electorate in the 2011 Assembly election. I'm certain that that will form part of the debate during the period of consultation. In the meantime, Plaid Cymru's policy remains entirely clear, it is a policy which I support, and I shall continue to promote it.

Cameron's U-turn

Tweet In 1997, the decision by the Labour Party to stand by the spending and taxation plans of the outgoing Tory administration for the first two years was claimed to have been a factor in their electoral success. I was never particularly convinced, mind. After all, what's the point of electing somebody different if they're going to do the same thing? I think that they would probably have won anyway, even without that pledge, so strong was the zeitgeist for change.

I was somewhat surprised when Cameron initially made the same commitment – even if the trick did actually have some effect the first time round, surely people wouldn't fall for it a second time? It's no real surprise this week to see him dropping the commitment, which many of his backbenchers were always dubious about anyway.

The question is, though, will he be allowed to get away with dropping the commitment without spelling out his alternative? He and his party are clearly unhappy about the lack of balance between spending and taxation, and intend to close the gap. It's a valid position to take – even though it's one which I fundamentally disagree with - but it means that there can be no question whatsoever that he is either committing to increase taxation or to cut spending (or a bit of both) – and to do so within the first two years of a Conservative government.

"Tell us what you'd cut" is an over-simplistic response of course, but in essence it's an entirely valid question to be asking. A fairer question is "tell us what your alternative programme looks like", but at the moment, he seems to be answering neither.

PS - I note that Glyn Davies is very happy that his party leader "has decided to face down the gamblers". Presumably that doesn't include the gamblers who are largely financing his party?

Plans and assumptions

Tweet I thought that the admission yesterday by Lord Adonis, the Rail Minister that "our own forecasting model didn’t anticipate the scale of growth we were going to see in rail travel" was a really astonishing one for its utter candour about the state of rail planning in the UK. Effectively, he has admitted that there is no strategic plan for rail travel, merely an attempt to estimate likely demand and then respond to it.

Whilst most of Europe has been planning and investing in capacity to deliberately expand rail travel, the UK has been simply guessing at what might happen and responding on a patchwork basis. On that basis, supply will always lag behind demand.

This is not a criticism of the investments that have been made in themselves. In Wales in particular, we've seen a number of good schemes to re-introduce rail services on lines, build new stations, and increase the frequency of services, and there are more to come. But I can't recall a single one of these where the investment has been pro-active, as opposed to responding to campaigns by local groups and councils.

And that's my real criticism. Given that rail travel is the most environmentally sound mode of transport (short of walking, biking, or simply not making the journey at all), where is the overall strategic plan? Rather than assuming a level of growth and trying to respond to it, we should be setting ambitious targets for switching travel from road to rail and planning the capacity to facilitate that shift. That requires a step change in our thinking about travel planning.

Organ-grinder revealed

Tweet The news that the Post Office will be allowed to retain the Post Office Card Account (POCA) is, of course, good news for what is left of the post office network in our rural areas. The government have, on this occasion, made the right decision.

That does not mean, of course, that there are no questions to be answered. I haven't a clue how much it has cost to allow the tendering process to go as far as it did before changing policy. But there has certainly been a cost to that process - and not just a financial cost. I know that many sub-postmasters have been extremely worried for their futures, and have been through a fairly stressful period – completely unnecessarily, as it now transpires.

And I do wonder whether, if this knowledge had been available before the recent round of closures, some of the outcomes might have been different. Some of the postmasters who decided not to fight the closure programme, for instance, would have done so on the basis of a calculation as to what was the risk that they might have been affected by any withdrawal of the POCA – and will have been asking themselves whether the terms of retirement might then be less favourable.

So, although the government decision is the right one, the timing has probably made the closure programme a little easier for the government than it might have been had the certainty of the POCA been assured earlier.

The decision was announced by the government. Quite rightly so, since it is the government which took the decision. But am I the only one to notice that when a popular decision is made about the post office, the government announce it and take the credit; but when it's an unpopular decision, the Post Office is left to take the brunt of the public's wrath?

There were times during the recent campaigns to keep post offices open where I actually felt quite sorry for the post office managers. They were left to defend and explain a decision taken by others. Not only did the government not give them very much support, but Labour MPs up and down the country actually joined in the criticism of the post office – attacking them, in essence, for a decision which their own government had made. It was cynical and dishonest – and taking the credit this time round serves only to make it look even more cynical and dishonest.

Who speaks for Labour?

Tweet In his reaction to Saturday's story in the Western Mail about the tensions within One Wales, Peter Black is correct in summing up what for me are two crunch issues, although I disagree with his analysis of our likely position on them, and I think he understates the importance of the position we are in on the Housing LCO.

His suggestion that "if Plaid Cymru get the Welsh Language LCO they will be prepared to accept some form of fudge on the referendum" is one which I would reject. I remain confident that the referendum will be held - and as I have said before, if I believed that the leadership of Plaid was in any way back-tracking on the commitment to hold a referendum, then I would find my current role impossible to sustain.

However, back to the Housing LCO for a moment, because this is the nub of the current debate. The real tension here is not between Plaid and Labour in the Assembly, but between Labour AMs and some Labour MPs – but there is a knock-on danger to relationships between the two parties if Labour fail to achieve a satisfactory resolution of those internal tensions.

The core of the disagreement is the extent to which any LCO devolving power to Cardiff could or should be restricted to match the precise scope of any Assembly Measures which may be proposed after agreeing the LCO. The MPs seem to be taking a position of saying that they want to devolve only the exact powers needed to allow a specific Measure to be passed – which means that if the Assembly subsequently wanted to pass another Measure in the same field, it would need to submit a further LCO to London. Effectively, the MPs are trying to scrutinise Measures rather than LCOs.

The key question to which we await an answer is on which side will Paul Murphy come down? Will he, as his deputy, Wayne David suggested last week, come down in favour of the recalcitrant MPs, or will he support the Assembly Government, which remains united on this issue? My attention has been drawn to an exchange which took place at the Welsh Affairs Select Committee back in July (set out below), when Mr David's predecessor in the job, Huw Irranca-Davies, took a very different line on the issue, suggesting that the Welsh Office at that stage actually backed the position of the Assembly Government. I've highlighted one section in particular, showing that he fully understood the difference between a Measure and an LCO.

So – has the position of the Welsh Office changed, or are people just playing games?

Q130 Alun Michael: Could we come back to the terms of the Bill? Are you absolutely satisfied that the proposed Order is defined well enough to articulate clearly its intentions and its scope to all interested parties?

Huw Irranca-Davies: Yes, I am, and it is noticeable that there is support for this and what is within the Bill from TPAS—the Tenant Participation Advisory Service Cymru. They have looked at this and they are confident that it gives them the clarity to satisfy their needs in terms of affordable housing as well as, I have to say, official confidence that this is appropriate.

Q131 Alun Michael: But we are talking about the precision of a piece of legislation here.

Huw Irranca-Davies: Yes.

Q132 Alun Michael: Therefore the precision is extremely important and it seems to me from some of the earlier answers that you have given that it would be possible to use the powers conveyed in this Order in a variety of ways that are quite different to the intention. You have reinforced the view that has come from some quarters that the proposed Order would be interpreted narrowly rather than broadly, but that is not the way that some people see it and it is not the way that some people want the powers to be used, so there does seem to be a degree of confusion here. Are you sure that the phrasing of the Order is adequate for it to be clear what it does not do or are there dangers of unintended consequences?

Huw Irranca-Davies: The only unintended consequence would be an administration that took the competences bestowed within this Order and had a clearly different policy intent behind it, so I do take what you are saying, we could narrow this or another LCO to the extent that we determine what will subsequently be done with it quite narrowly. There is an element here of working within the Government of Wales Act 2006 in transferring this competence, seeing where the policy intention currently is, but recognising and having confidence in the National Assembly for Wales and the Ministers down there that the Measures that they bring forward will be appropriate and will satisfy the needs of the community out there. You are right in what you are saying, what we are not trying to do within this LCO is actually to determine precisely for now and forever what the Welsh Assembly Government may do with it.

Q133 Alun Michael: Given that the Measure can be used in a variety of ways other than the current policy intentions, given also that the definitions are porous in the sense that land can be defined differently for the future and this can raise all sorts of community issues, would it not be to everybody’s benefit if there were an element within the Order that said the use of these powers shall be limited to the intentions that have been set out in the explanatory memorandum, would that not be closer to actually putting on the tin the precision of what the contents are?

Huw Irranca-Davies: I do know what you are saying but I am conscious that when we bring forward either this LCO or when we are looking at framework powers going through on the floor of the Commons there is always an element that once we have passed those powers to the Assembly it is then within the gift of the Assembly to change policy over time, to interpret them differently and there is an element of trust and faith in the institution then of the Welsh Assembly Government and the scrutiny given by the National Assembly of Wales members.

Q134 Alun Michael: Does it not go well beyond to the possibility that powers will be dealt with in ways that are wholly unintended by yourself or the Assembly Ministers that are proposing the transfer of these powers at the present time?

Huw Irranca-Davies: I do see what you are saying, Mr Michael, but we recognise as well that over time policy might well change in response to what the housing market is and what the needs for affordable housing in Wales are. It is important that within the scope of any LCO that we deliver it does allow that flexibility for change. I know what you are saying is that there could be a potentially detrimental policy intent.

Q135 Alun Michael: No, what I am saying is that it may go beyond what is intended, beyond the powers that the Assembly is actually seeking in its explanation of the powers that it wants. It is a lack of legislative precision that is concerning me.

Huw Irranca-Davies: What I can reassure you about in terms of the definitional points that you talked about—which are laid out in previous Acts of this Parliament—is that there is certainly clarity in terms of the powers that are being sought and the powers that can be conferred. However, what I cannot give you entire clarity on is what the ultimate policy intention may be in 10 years time.

Q136 Alun Michael: No, but the legislative intention needs to be clear so surely we ought to be clear on the face of the Measure as to the powers that are being transferred and that it is limited to those in order to obviate the danger of unintended legislative complications.

Huw Irranca-Davies: You are right in what you are saying in that the powers conferred need to be clear and we are confident that the powers that are being sought and are being conferred are clear in the competence that they bestow. Whilst there is also quite a clear policy intent that is being argued at the moment that might bring forward Measures, what I cannot do and I know you would not expect me to do is to double-guess five or 10 years down the line.

Q137 Alun Michael: With respect—I will just make this point once more—we are talking about the possibility of unintended legislative consequences which is why precision in the legislation surely is necessary to a greater extent than we have. I suggest you should reflect on that.

Huw Irranca-Davies: Right, okay.

Missing strategy

Tweet Professor Stuart Cole returned yesterday to a topic on which he has written before – the need for Wales to be plugged into the European high speed rail network. This is an area where the UK has lagged far behind the rest of Europe, which has been prepared to make a massive strategic investment in rail over the past few decades, and is planning to continue with that approach for some time to come.

'Strategic' is very much the key word. The Assembly government has made a number of good investments in improving rail infrastructure, and more are planned, but in comparison with Europe, these are relatively small scale tactical improvements, addressing particular issues and problems. What is missing is the sort of long-term vision which France, Germany etc. have had for their rail networks. The only strategy that seems to exist in the UK is to take short term decisions and ignore the longer term consequences.

Of course, I accept entirely that there is no purpose in the Assembly Government having a strategy for a high speed rail link across the south of Wales if there is no strategy in England for a link from London westwards. Additionally, it's absolutely key to linking Wales into the network that we plan to build a new Severn rail crossing to replace the outdated and problem-prone tunnel. On both of these issues, we need to work jointly with English authorities and the UK government.

But that sort of joint work between authorities is already happening elsewhere in the UK, and as Prof Cole points out, it seems highly likely that the next two high speed lines to be built in the UK will both be from London northwards. It is vital that we not only press for a coherent strategy for a high speed network to be built, but that we make sure that Wales figures prominently in the plans. We are in serious danger of missing out completely as things stand.

This is no fudge

Tweet In current management speak, it's called a hospital pass - a piece of work at which you cannot win, whatever you do. The only surprising thing is that a man of Sir Wyn Roberts' experience was silly enough to accept it.

He was onto a loser from the outset – trying to square the circle between a leader in Wales who wanted to go one way, and a reluctant party which instinctively wants to go the other. So he came up with the classic compromise – he proposed yet another review. (What the difference is between the proposed root and branch review and the one already held by the Richard Commission is an interesting question which no Tory has yet attempted to answer as far as I am aware. I suspect that the key difference is that, for most of the Conservative Party, Richard came up with the 'wrong' answer.)

I think Betsan Powys is more than a tad too kind in calling this a 'fudge' – it seems to me that it has far less substance than that. It's a complete non-answer, which moves his party not one inch further forward than it was six months ago.

There is some debate about whether the report does or does not imply that no Tory Secretary of State would veto a request for a referendum from the Assembly – Betsan and Vaughan seem to be at odds on that specific. But I wonder if it really makes that much difference - I cannot see any Tory majority in the House of Commons ever allowing a referendum to be held, so why would any Tory Secretary of State need to veto it?

We have also had yet more disturbing indications today that Labour are not over-keen on living up to the commitment that they gave in One Wales. Vaughan half suggests that that might put alternative arrangements in Cardiff back on to the table - but Sir Wyn's report has surely scuppered any remaining hope of that. Why on earth would Plaid want to move away from working with a party which is hesitating over a commitment it has given to one which won't even give a commitment? Looks a bit like frying pans and fires to me.

What is most disheartening of all to those of us who want to see further progress is that all this debate isn't even about what powers the Assembly should have next - that's already defined in the Government of Wales Act. The debate is limited to the simple question of whether those powers should be transferred neatly and tidily in one single step, or whether they should be transferred salami-style over the next decade or two, with LabourTory backwoodsmen in London debating and obstructing line by line every step of the way. And the difference between Labour and Tory on this is looking increasingly small.

And then there were none...

Tweet A mere six months ago, in May, the Lib Dems celebrated almost unparalleled success (for them) in Carmarthenshire and Pembrokeshire, with one candidate elected to Carmarthenshire County Council, and 3 to Pembrokeshire County Council.

It took only a few days for the Lib Dem group in Carmarthenshire to annihilate itself, when the sole member signed up for full membership of the Independent Party on the council.

It's taken a little longer in Pembrokeshire, but last week, that group too finally succeeded in extinguishing itself. It wasn't long after the election when one of the three resigned from the council, causing a by-election which they promptly lost. That left them with a group of two councillors - until last week when one of the two formally resigned from the group.

That leaves both of them now officially unaligned with any group or party – or even with each other. It is, of course, all part of a cunning plan on their part – it seems that, under the council's rules, they'll qualify for more committee seats if they pretend not to be friends any more. It still looks like a very odd thing to do, though.

How the other half live

Tweet The Independent on Sunday carried a very good and lengthy analysis of who did what, where and when on certain yachts off Corfu in the summer. For what it's worth, I tend to accept that Mandelson probably didn't do any favours for the Russian oligarch, and Osborne probably didn't actively solicit donations - although he might well have been more than willing to pursue the point once the subject got raised.

Notwithstanding the truth of the matter, Labour and Tory alike seem determined to demand ever more detailed explanations of each other, keeping the story alive a little longer.

What seems not to be in dispute at all however, is that Mandelson for Labour, and Osborne, Feldman, and Cameron himself for the Tories all accepted what can only be described as lavish hospitality from a range of very rich and powerful people, all of whom could stand to gain significant sums of money from changes in government and EU policy. I remember when I was doing business with other companies on behalf of my then employer, that the rule was never to accept any gifts or hospitality which I would not be able to reciprocate. It was a simple and clear rule, which led to a nice collection of cheap diaries each year.

These politicians all claim to have done nothing wrong, and in the sense of keeping within the limits set down by the letter of the law, I'd be prepared to accept that they're probably right. What continues to stagger me, however, is that any of them could consider this sort of hospitality to be normal and acceptable, just because it isn't actually illegal. They really do not seem to understand that being flown in private jets to stay in billionaires' yachts and villas – the sort of one-sided hospitality which they could never reciprocate – is always going to look like a conflict of interest, no matter what the detail of the law says.

They may not have done anything which is actually illegal, but they seem to be completely detached from the real world in which the rest of us live; and the whole story raises serious questions about the judgement both of the individuals concerned and of those who are trying so hard to defend them.

No mere bagatelle

Tweet Betsan Powys has kindly provided some of the figures that I didn't have when I posted this a fortnight ago. Our local councils have a combined total of £581million in reserves – that is a very large sum of money. It's not the total of public sector reserves in Wales, of course. On my reading of the numbers, this is just the 22 county councils – other public bodies such as health boards and trusts and police authorities also hold significant reserves. The total is probably a couple of hundred million more.

The councils and other bodies who hold the reserves are entirely correct to point out, of course, that much of these funds are earmarked, and only held for a comparatively short period as reserves. I accept that argument, and to try and commit the whole of these funds to long term investments would be foolish. But that is no excuse for investing them, even in the short term, outside of the economy that these bodies are supposed to be serving. Even short term investments of £700 - £800million could be making a difference to Wales.

I'm most interested in the core figure – the unallocated total of around £144million. (This too would be higher with other public bodies added in). Divided between 22 councils it comes to an average £7million each, as Betsan says. From each individual council's point of view, investing it to earn maximum interest looks like a sensible financial decision. From the point of view of each individual council, this is money which they might need to call on at any time. But, when added up, it simply doesn't look so sensible for Wales as a whole.

Even assuming that the whole of the earmarked funds are spent in the year (a major assumption in itself), what these figures are telling us is that, on every single day of the year, there is at the very least somewhere between £150 and £200million of Welsh public finance invested in short term high interest accounts when it could be used for investing in the Welsh economy.

Whether through the creation of a People's Bank, as Adam Price and others have suggested, or through some other mechanism, we need to be pooling those resources and using them to boost the Welsh economy. A reduced rate of return to individual public bodies is a small price to pay.

Carmarthenshire Cllrs start blogging

Tweet The thirty-strong group of Plaid Councillors in Carmarthenshire have established their own blogs recently – one in English and the other in Welsh. The group is developing an increasingly high profile locally, building on the experience of the longer serving members, and the strength in depth of a large group of members. It's a powerful and effective team. Roll on 2012 and the next council elections.

Distancing herself from the ill-gotten gains

Tweet My attention has been drawn to this little spat (full record available here) in the Assembly on Tuesday, when one of Labour's Regional AM's attempted to rattle the cage of our local AM. I think he failed, largely because of an inaccurate choice of words. Instead of a wholly justifiable criticism of the Tory party's source of funds, he ended up making an inaccurate and unjustified attack on Angela Burns herself, over a donation which was clearly given to the constituency rather than to an individual. He was, quite correctly, forced to withdraw his remarks.

The exchange does suggest, however, that Ms Burns (and perhaps Nick Bourne as well?) is trying to distance herself from the donation made by the hedge fund to her local association. I found it particularly interesting that she sees any suggestion that she might have any sort of relationship with a hedge fund as being a 'slur on her integrity'. I entirely agree with her on that point – her integrity would indeed be damaged by such a relationship.

So what does this say about the integrity of her local party – and the parliamentary candidate locally – both of whom most certainly do have such a relationship? To say nothing of Conservative Central Office, who have not only accepted large donations from the same company, but also a range of sizable donations ("Short-sellers bankroll Conservatives") from managers of other such funds?



Alun Davies: In speaking this afternoon, I will resist the temptation to roam across the range of this Government’s successes, although I would particularly enjoy a long discussion on the role of opposition here because, when I read the Tories’ amendment 2 this afternoon, I got the sense that they had given up not only on trying to be a Government, but also on being an opposition. I get the sense that the Tory Party has done a deal and has sub-contracted out to some Russian oligarch or other sort of undesirable that it has in mind. Perhaps you have done the same deal with the hedge fund in New York as Angela Burns did for her constituency.

I will focus my remarks this afternoon on the area in which I have a special brief.

Nick Bourne: Point of order. I think that the Member might like to reconsider his last comment unless there is some substance to the allegation that he made about a Member in this place.

Alun Davies: I was simply referring to the funding of a constituency association by a hedge fund based in New York.

Nick Bourne: You named an Assembly Member and you should withdraw your remarks unless you have any evidence to back them up.

The Deputy Presiding Officer: Can you rephrase that last sentence please, Alun?

Alun Davies: If the Conservative Party has not received any funding from that hedge fund, then I am happy to withdraw my remarks.

Nick Bourne: I am sorry Deputy Presiding Officer, but there was a specific allegation about an Assembly Member’s involvement with a hedge fund. Unless you have evidence to back that statement up, you should withdraw it.

Alun Davies: I think that there was such a relationship, and I am happy to sustain that—[Interruption.] I am not going to take another intervention.

The Deputy Presiding Officer: Order. Angela Burns wishes to speak.

Angela Burns: As far as I understand it, Alun Davies has just accused me personally of having a relationship with a hedge fund. I state categorically that I have never had a relationship with a hedge fund or with a hedge fund provider, and I would like him to withdraw that statement because it is a slur on my integrity; I do not play that kind of game.

Playing the game

Tweet I suppose that it is inevitable that the Government always tries to take the credit when the economy is going well, and blames world conditions when things are not going so well. I can't remember a government of either complexion in London which didn't try the same tactic, and Gordon Brown is no exception.

Equally inevitably, the Opposition always tries to paint the good news as something which would have happened in spite of the government's action (or even better as the result of their work when they last had a turn in government), and the bad news as the direct result of government action - or inaction.

It's all a bit of a game really. The players seem to enjoy it, but I'm not sure that it is terribly helpful in terms of addressing the real issues. The truth, as ever, gets lost somewhere in between.

Certainly there are some things which affect the economic cycle which are completely out of the hands of government. Given that simple fact, it is a complete nonsense for any government (or opposition) to claim that it can exercise complete control over the economy. It is entirely fair to point out, however, particularly in relation to the recent events in the financial markets, that governments of both parties have made deliberate choices to reduce the amount of control and regulation which they can actually exercise.

On the specific question of the financial crisis, Cameron is right to point out that Brown has not done enough to re-regulate the markets; but that is more than a little disingenuous when what it really amounts to is a criticism that Brown and Labour have not done enough to reverse the silly policies of the Tory years. (And it would sound a great deal less dishonest if his party wasn't financed to a significant extent from the profits of irresponsible and unregulated markets).

There are things that governments can do, however. And on this score, both Labour and the Tories have shown a serious lack of imagination. Adam Price has set out a number of interesting suggestions for actions which can be taken. I'm biased – of course. But this is the sort of imaginative thinking which we need if we are not only to get through the current crisis, but also tackle the essential job of growing the Welsh economy for the longer term. And, as I've noted before, we should all want that, whether or not we believe that Wales should be taking more responsibility for her own future.

The man is not for turning

Tweet I'll admit to never having been a fan of globalisation, whether economic or cultural. Reading Marcuse (One Dimensional Man) in the 1970's was a significant influence on the development of my own political philosophy, and as I recall, Sartre said something along the lines of "merely insisting on being Basque is itself a revolutionary act".

At a cultural level, Welsh nationalism is at least partly about maintaining human cultural identity and diversity, and at an economic level, it combines with environmental concerns in supporting a more localised economy. Localised is not necessarily the same thing as protectionist or isolationist, nor does it exclude the promotion of trade with developing countries in ways that assist them. But when I read that shrimps are caught off the British Isles, landed in Scotland, and then shipped to the Far East to be shelled before being shipped back to Scotland for packing – then I know that globalisation has gone too far.

That's an absurd example, obviously – although there are plenty more like it – but one of the consequences of globalisation has been the creation of long thin supply chains; and I think even supporters of globalisation ought to be more worried about that than they appear to be. The complexity built into the supply of goods and services, coupled with rigorous attempts to ensure 'just in time' delivery and reduce the amount of 'working capital' employed by businesses, makes the whole economic system extremely vulnerable to a failure at a single point.

The failure of financial markets has hinted at that; but there are a range of potential events in the real world which could be even more devastating. As a simplistic example, I'm not convinced that people really understand the potential economic impact of a major flu epidemic in the Far East, even if no-one in the UK even caught a cold.

What sparked this train of thought today was reading about David Miliband's speech in Cardiff last night, where he seems to have said that the financial turmoil won't deter Britain from continuing globalisation. I struggled to find any trace of a logical basis for that statement. It reminded me of the remark attributed to Keynes, "When the facts change, I change my opinion. What do you do, sir?".

It worries me that, in the face of a clear warning about the way in which globalisation has led to an essentially US problem being exported to the rest of the world, the response seems to be to accelerate the process of locking us into an approach which has an increasing potential for systemic failure. The facts have changed – shouldn't policy also change to reflect that?

More runes to read

Tweet I'm always sceptical about placing too much faith in opinion polls, even if they contain what looks like good news. Today's poll, even though it suggests that the result in Carmarthen West and South Pembrokeshire might now be different – in my favour – is no exception.

The first problem we have in Wales is that there are so few Wales-only polls – or even UK polls with a sufficiently large Welsh sample to draw any sensible conclusions. The second, as Richard Wyn Jones points out, is that Welsh polls seem to have an inbuilt bias, for some reason which is not properly understood. And the third is that we have clearly seen that voting patterns for the Assembly elections and Westminster elections can be significantly different.

Given all of that, what, if anything, does the latest poll tell us? I think it suggests fundamentally that there has been very little movement overall since last May, but that what movement has occurred has been away from the opposition parties in the Assembly towards the governing parties. Given the extent to which Labour has plummeted in the polls for a Westminster election over the same period, that is quite an interesting finding in itself. And it's worth noting that the poll was conducted in September, before the latest Brown come-back.

It also suggests, even if in an exaggerated fashion, that the appeal of David Cameron's Tories is considerably weaker in Wales than elsewhere in the UK. That probably comes as a surprise to few Welsh politicians, but may mean that the General Election results will come as something of a shock to some members of the English Conservative Party in Wales.

For me, I suppose my biggest immediate challenge is how to persuade people to vote in the Westminster election in the same way that they plan to vote in the Assembly election…

Is small still so beautiful?

Tweet For years, opponents of self-determination for Wales and Scotland have pointed to the size of the two countries and argued that we were too small to be independent. The almost inevitable response of both Plaid and the SNP has been to point out how successful a number of small countries have been in recent decades. It was a sensible and logical counter argument – with the added bonus of being entirely true.

Does the collapse of Iceland's banking system, and the near bankruptcy of Iceland change the argument? I don't see that it does, although perhaps Iceland is less likely to feature as a specific comparator for a while!

The problems with Iceland's banks are not in any way the result of the small size of the country. Banks have failed in large countries; banks have failed in small countries – size per se hasn't really been a factor one way or the other. What has been more important in determining whether and to what extent any country has been affected has been the nature and extent of regulation and control of the banking industry.

Would a larger country have been better able to sustain the collapse, or rather the cost of the bailout? It seems to me that the real determinant of how well any country, regardless of size, could cope with the sort of bail-outs which are happening at present is more to do with the size of the banking sector as a proportion of GDP than with the absolute size of the country or its population.

For all the glee with which some seem to have seized on the problems in Iceland, claiming that they have 'proved' that small countries are worse off, I really don't see that anything has been 'proved' beyond the need for all countries to ensure that their banks behave in a prudent fashion. The real danger is that people who concentrate on the size argument fail to learn that simple lesson.

Investment begins at home

Tweet The collapse and nationalisation of an Icelandic bank has obviously caused problems for a number of local authorities in Wales. Some people have suggested that the councils concerned have made unwise decisions about where they placed their funds. The leader of the WLGA, John Davies from Pembrokeshire has said that "It would be wrong to apportion blame. These investments are done with sound advice behind them.", and on this occasion, I agree with him. The bank appears to have met all the relevant lending criteria which councils are advised to follow, and councils have merely been attempting to obtain the best return that they could get.

What I do question, however, is whether it is right that we allow – let alone encourage - councils to place their deposits overseas at all.

I understand the councils' problems; they receive part of their money in large blocks, and they also have to keep prudent levels of reserves for emergencies. As tax-payers, I'm sure we would all prefer that that money was earning interest rather than sitting idle, and we'd want them to be getting the best return. The nature of such investment by councils is also relatively short term – individual councils need to be able to get their hands on the money fairly quickly.

Nevertheless, I still wonder. As I've argued before, I think the biggest economic problem we face in Wales is how to get our GDP per head up to at least the UK average level. I don't see how depositing Welsh assets in foreign banks, even in the short term, is making much of a contribution to that end.

Clearly, given the constraints upon them, councils cannot directly use these funds for long-term investments which would lock up the cash, but perhaps if the councils and other authorities involved were able to act in a more collective fashion, they would have more flexibility overall. The sums invested in Iceland are large, but they're still just a fraction of the total which has been deposited in banks by Welsh authorities. The overall total fluctuates throughout the year, reflecting cash flows, but on any day of the year, there is still a sizeable amount of our money invested in banks and building societies, some of them foreign.

Retaining the money within Wales might well lead to a marginally lower return on investment for the authorities; but if the result was an improvement in the Welsh economy, the overall result for taxpayers would be beneficial. Put another way, 'best rate of interest for authority X' may not be the same as best value for the Welsh economy.

Instead of individual councils stashing away their own cash, why not pool the temporary surpluses of all Welsh public authorities and use at least the core minimum which will always be present to invest in the Welsh economy?

Counting the billions

Tweet I have to admit that I'm struggling to keep up with precisely how many billions it is costing us as taxpayers to bail out the banking system. There's the cost of nationalising both Northern Rock and Bradford and Bingley, and there's the £50bn announced yesterday to buy a share of most of the UK's banks.

Then there's the injection of an extra £250bn of liquidity into the banking system, and the promise to guarantee another £250bn of debts if necessary. The 'guarantee' might not be called on, of course – but then again it might. Much of the money will be repayable at some point - provided that it has the desired effect, and succeeds in restoring stability – but that doesn't mean it doesn't have to be paid out first.

The total looks like being somewhere between £400bn and £650bn of our money, which has to be found in the short term. I don't believe that the government has any real choice (although being able to find those sorts of sums at the drop of a hat really makes something of a nonsense of the recent suggestions that Wales couldn't afford independence because of a deficit of a mere £9bn!).

The government may have no choice about finding the money and propping up the system; but they do have a choice about what strings they attach to these vast sums of money. We, as taxpayers, are facing this huge financial commitment because individual and corporate greed has led people to gamble recklessly and make foolish loans. At the very least, we should be imposing a framework of regulation which ensures that this situation can never arise again. And we clearly have a right to insist that the culture of excessive pay and massive bonuses which have been paid to those responsible for this mess comes to an immediate end.

Ducking the issue?

Tweet One e-mail response to a previous post on the Welsh budget deficit raised the question 'but you still haven't said what you will do to reduce the deficit if Wales were to become independent'. Superficially, it appears to be a good question – but I think it's actually the wrong one.

Wales is clearly not going to become independent tomorrow. I've said before that I think independence is at least 15 years away, and the circumstances will be different then. But, for the purposes of debate, let us assume that the people of Wales have voted for independence in a referendum, that independence day has been set for 1st March 2024, and that the first independent government will be a Plaid majority government.

For the 15 years between now and then, most of the major economic decisions affecting Wales will be taken by either a Labour or a Conservative government in Westminster. So, if Labour or Tory opponents of Welsh independence want us in Plaid to set out in detail our figures for a four year period of government starting in 2024, perhaps they could start by telling us in the same detail what they will be doing in the interim, so that we know where they think their policies will have left Wales by then.

Telling us to simply assume that independence happens tomorrow is not only positing a completely unrealistic situation, it is also dodging the issue of what they are going to do in the interim, and why they have been so unable to change the situation - although given their lack of vision for Wales, it's probably not entirely unreasonable to assume that there will have been no significant change in Wales' position. (If there's been a significant period of Plaid government in the Assembly in the interim, then we will have used the Assembly's limited powers creatively to make some progress; but if we could turn the position around entirely within those powers, then we wouldn't have such a great need of independence.)

Assuming that most of the major decisions continue to be made by LabourTory politicians, it is therefore reasonable to also assume that, at the point of independence – whenever it comes – Wales will still be lagging behind the UK average in terms of GVA, still have a less healthy population overall, still have a higher proportion of people economically inactive, and still have lower wages than the UK average. And the Welsh budget is likely to be still running a significant deficit. That is the effect of LabourTory policies today and they have no discernible proposals to change that situation.

The challenge is surely how to change the situation in ways which both we and opponents of independence seem to be agreeing will not happen without that independence.

We will need to bring the budget deficit down; but it is not necessarily the case that that should be the top priority in the short term. Indeed, in order to bring the Welsh economy up to the level at which it should be, there could even be an argument for a deliberate increase in the deficit in the short term in order to make the necessary investments in infrastructure etc. – to deal with the neglect of the past.

Adam Price has previously made a cogent case for reducing business taxes, particularly where the untaxed profits are re-invested in growing the businesses (whereas any profits taken out of the businesses are taxed through personal taxation, such as income tax). That is likely to decrease the tax take in the short term, although increase it in the longer term as the economy develops and provides more and better jobs.

So, in answer to the question about how we will plug the funding gap on day 1 of independence:- in my view, it's the wrong question. The right question is how do we bring the Welsh economy up to the level at which it needs to be for the long term prosperity of the whole nation, because that is the best way to address the budget deficit.

Plaid has been offering manifestoes-full of solutions to that issue for decades, based on Wales taking control of her own future. Our opponents seem to be offering, and assuming, only more of the same. For them, getting the Welsh economy to the point where there is no need for a budget deficit is simply not a priority. It's far easier to simply throw the question at us.

Can't or Won't?

Tweet According to Tomos Livingstone today, Peter Hain's remarks about the timing of a referendum on further powers are "likely to infuriate Plaid Cymru". I somehow doubt that Mr Hain will be overly worried one way or the other about this, but for what it's worth, I'm not feeling particularly infuriated - yet. After all, his remarks are not out of line with what he's said several times before, so they hardly came as a great surprise.

I have said before that the decision to call a referendum is, ultimately, a matter of political judgement – it is not a precise science. Peter Hain is obviously in the cautious camp, whereas I think Wales both needs, and is ready for, bolder leadership than that.

The key question for me in this issue is whether we allow ourselves to be driven by events, or whether we try to ensure that events are driven by us. Do we merely reflect public opinion at a point in time; or do we seek to influence public opinion in a particular direction? I'm in no doubt at all where I stand on that question – I haven't been a member of Plaid for nearly 40 years in an attempt to reflect opinion; I've spent that time campaigning to change opinions.

Last year, Plaid Cymru and the Labour Party signed the One Wales agreement. We should remember that it wasn't just the AMs who signed up to this; it was the respective parties as a whole which agreed to "campaign for a successful outcome" in a referendum on further powers. There is a 'get-out' clause in the agreement, of course, but I remain unconvinced that it will be necessary to use that clause – I think that the leaders of both parties understood what they were agreeing to, and are committed to delivering.

What probably would infuriate me, and many other members of Plaid, would be for the Labour Party to take no action to promote the case for further powers (whether internally within the party or externally with the public at large), and then seek to use the get-out clause purely in order to avoid a split in the Labour Party. That would be neither behaving "in good faith" (as the agreement requires) nor displaying the kind of leadership which I think Wales expects from her politicians. Nor would it be likely to encourage further co-operation in the future.

There is a huge difference between a Labour Party which is unable to deliver a yes vote, and a Labour Party which is unwilling to try. "Won't" is not the same as "Can't". Peter Hain seems to be dangerously close to saying "Won't", but I don't believe that he's speaking for his party.