The Ashcroft Loophole

Tweet I thought that last night's Dispatches programme from Channel 4 went a little bit over the top in its treatment of the Tory funding scandal. I've never been a particular fan of 'doorstepping' unwilling interviewees, and the 'drama' of being 'excluded' from Cameron's little meeting was wholly unnecessary as well. Apart from anything else, the story stands up well enough in its own right - it doesn't need that sort of treatment.

There wasn't a lot that was new, however. In large measure, this was a story already covered by the newspapers in some depth. But as long as the Tories continue to refuse to deal with the key questions, it's one that won't go away.

The issue of where Lord Ashcroft lives is of comparatively minor interest. It was useful mostly in highlighting the way in which Cameron refuses to answer a very simple question with a straight yes or no. It makes him come across as shifty and devious - he's surely bright enough to understand that failing to simply say 'yes' when asked whether Ashcroft has kept his promise to live and pay taxes in the UK will inevitably be interpreted by most people as being a 'no'.

But the real issue remains about the legality and morality of the Tories' funding. In the case of their hedge fund backers, the question is primarily a moral one. Many of us are blaming the activities of these sorts of people for bringing the banking system to its knees - how can the Tories justify being funded on the profits? Merely repeating the mantra – 'the donations are legal' – is simply not good enough. Do they, or do they not, think that there is a moral dimension here as well?

In the case of Ashcroft's millions, the donations seem to be sailing very close to the wind. There's a good explanation here by one of the contributors to the Sunday Times article. In essence, the company used as a vehicle to donate millions to the party was making a trading loss in each of the last three years in which it made large donations. Those donations served to increase the losses significantly.

Now there's nothing illegal about a company which is making a loss deciding to increase the scale of that loss by donating to a political party, but how is that loss to be funded? In this case, it seems that the losses (and therefore the entire donations to the Tories) were funded by issuing more shares, all of which were then purchased by another Ashcroft company based in Belize.

So, in effect, there is no doubt at all that the money donated to the Tories came from Belize – a transfer which would have been illegal had it been a direct payment. It highlights a key failure in the legislation, which only insists that the donating company is 'trading' in the UK. Clearly, those drawing up the legislation would have made the logical assumption that donations would have been made from trading profits, and I can't blame them for making that assumption. I don't think that I would have considered the possibility that a company would deliberately choose to make massive losses in order to donate, and sell more shares abroad to cover those losses.

It's a loophole, obviously, and people who depend on loopholes rather than the intention and spirit of the legislation will always look dodgy. It didn't help the Tory case for last night's programme to show one of Lord Ashcroft's (very) few appearances in the House of Lords; an opportunity which he used to seek to argue that the law should be changed to allow him to continue to fund his party from abroad. A flagrant attempt to open the floodgates doesn't look like any sort of indication that his party recognises the need to close the loophole.

He who pays the piper

Tweet Peter Black draws attention to a story in the Observer yesterday, "How short-selling profited the Tories". The Observer is not always the biggest friend of the Tory Party, of course. However, the Sunday Times, which is much more well-disposed towards them, also carried much the same story, under the heading "Short-sellers bankroll Conservatives". They both list a number of managers of hedge funds who have donated handsomely to the Conservatives, although they both appear to have missed our friends Christofferson, Robb from the list, despite their kind contribution of £181,000.

I suspect that that is because the stories were based on the information about the membership of the "Leader's Group", which is for personal rather than corporate donors. Most of the other hedge fund donors appear to have donated from their own personal share of the profits from their 'work', rather than that of their companies, it seems. The Observer claims that the information about membership of the Leader's Group has been placed on the Conservative Party's website, "in an attempt to quell a mounting row over the party's finances". I have to say that if it has, then I can't find it.

On Saturday, Tomos Livingstone in the Western Mail said that Cameron faced a difficult choice in his address to his party's conference about how far he should go in responding to what Gordon Brown said last week. Amongst his comments, he suggested that Cameron might want to try and distance himself from the 'share-dealing bogeyman'. He reports today that Cameron has duly obliged by stating clearly that bankers and financiers had "no influence over my policy at all".

So, that's alright then? Not exactly, no.

While his party is being bankrolled by these people, stating that their financial support has no effect on his policies is about as convincing as Labour's first reaction some years ago when they received £1million from the boss of Formula 1, and claimed that it had had no effect on their decisions. It didn't wash – and they eventually had to give the money back.

The precedent is a clear one; if the Tories want us to believe that they are not in hock to the bankers and hedge funds who have come so close to bringing down the entire financial markets, there is an obvious step that they can take - count up all the donations from those concerned, and return them, with a polite note. I won't hold my breath waiting.

It's interesting that it's a Spanish bank which is buying some of the assets of B&B, following the collapse of B&B. Spain seems to have been largely unaffected by the effects of the 'global' crisis in the markets. So too does France, and Canada, and a number of other countries. That raises an interesting question. If this is a 'global' crisis, outside the control of any particular government, how come it only affects part of the 'globe' so badly?

The answer is in the regulatory regimes applying to banks in different countries. In Spain (and other countries) much of the activity which has caused the financial crisis would be illegal, so that they are largely insulated from the worst effects. So why are UK banks so exposed? Because the Tories (who claim not to be in any way influenced by the donors who benefitted from their decision) de-regulated the financial markets, and Labour have done little or nothing to re-regulate them.

Friday Quiz

Tweet Which Welsh politician said this week:

that the National Assembly should have "more powers to keep money in Wales for Wales"?

that the National Assembly should have a "strong and equal relationship with Westminster"?

that the National Assembly should "demand our fair share"?

that the National Assembly should be able "to levy a small charge on some of the companies that use us as a gateway"? (Tax-raising powers, by another name, although I'm not entirely sure that I understand what the sentence means).

that the National Assembly should be able to "give the less well off the opportunity to get help and money without being made to feel that they have to beg for it"? (Control over Social Security and Benefits?)

Other than the bit about increasing business taxes (Plaid policy is to decrease them), these statements could easily have been made by a Plaid politician – but they weren't. No, this is none of the usual suspects. These are all statements made by the Tory Shadow Finance spokesperson in the National Assembly, in an interview with a Liberal Democrat blogger.

Could this be an advance preview of the content of the Lord Roberts' report which has been sitting on Cameron's desk for months? Or perhaps an attempt to bounce the Conservative Party into a more radical stance which goes way beyond anything included in the Government of Wales Act 2006?

Somehow, I doubt it. But I look forward to hearing the response of Conservative Central Office.

The People's Flag

Tweet The first elections of which I have any memory are those of 1964 and 1966, when Harold Wilson ended 'thirteen years of Tory misrule'. That wasn't his only good line - I particularly liked the one about the 'white heat of the technological revolution'. I would have voted for him, if I hadn't been too young - although I knew better by 1970, when I was no longer so young.

One of the other big issues of the time was the re-nationalisation of the steel industry, an election promise which was implemented by Wilson. Nationalisation then was about taking state control of 'the commanding heights of the economy' - and it was intended to benefit the taxpayer. All very different from the 2008 version of nationalisation.

In my mind, the shift happened under the Heath government between 1970 and 1974, when the failing aero engine company, Rolls Royce was temporarily taken into public ownership. I still remember the little ditty of the day:

The People's flag is deepest blue
We're buying up Rolls Royce for you
But if it makes a profit then
We'll flog the b****** back again

This year we've seen probably the largest nationalisations in history as both the UK and US governments bail out large financial institutions at the taxpayers' expense. These are not nationalisations aimed at long-term benefits for the taxpayers; they are short term expedients, forced on governments because they simply cannot allow some institutions to fail.

I agree that the governments were left with little choice; they simply could not allow these companies to fail. We need to recognise, however, that these bail-outs must mark a very significant turning point in the way the economy is run. The argument for light or non-existent regulation, and for high rewards for successful companies and individuals, has long been based on the assumption that those who take risks should reap the rewards.

But what has now become clear is that, in some sectors of the economy at least, the risk is ultimately borne by us as taxpayers, not by the people making, or benefiting from, the bad decisions. I cannot think of a more graphic illustration of that than the news that the people in America who ran Lehman Brothers into the ground have had their bonuses protected as part of the takeover by Barclays.

Risk and reward is one long-standing principle – but there's another we should bear in mind; the one about paying the piper. If we as taxpayers are going to end up shouldering the risk, then I think we have every right to expect that governments will exert much more control over the activities which create the risk. For too long, governments have turned a blind eye to the insane way in which the financial markets have been turned into little more than casinos, where even the gamblers have often not understood the bets they've been placing.

And there's another thing that governments need to look at as well. Recent events have been driven in large measure by corporate and individual greed, and often highly short term greed at that. Would the temptation to take silly, excessive risks be as great if the rewards available for so doing were not themselves silly and excessive?

Counting the numbers

Tweet The opinion poll results published today show how just far opinion in Wales has moved in the 11 years since the referendum which created the National Assembly. Support for a return to direct rule has dwindled away, with the overwhelming majority now supporting a legislative body for Wales. The only real debate is about the nature and extent of the powers which the Assembly should have, and in that context, the level of support for extending the powers of the Assembly continues to grow.

After the massive defeat in 1979, and the wafer-thin victory in 1997, I can understand why some are cautious about rushing into a referendum to give the Assembly primary powers over a range of fields. They are concerned that the referendum might be lost, and that that would be a setback for Wales. I can understand their caution – but I think they're wrong.

The question of when to trigger the referendum is, of course, a matter of political judgement, and that judgement needs to be based first and foremost on an assessment of the public mood. But assessing the public mood is to a large extent a subjective rather than an entirely objective process. It certainly isn't just about counting numbers on a particular question.

Opinion polls can help to inform that judgement, but they should never be allowed to become the determinant. There is otherwise a risk that we wait until the polls show that the argument has been clearly won before we start to present the case; and I don't understand how anyone would ever expect to decisively win any argument without putting the case.

The latest poll showed that opinion is already moving in the right direction, and national confidence in Wales is visibly growing. There is a changing mood in Wales. As politicians, we need to recognise that and be bold, not cautious. I am confident that Wales is ready for bold leadership, and I think we should respond to that. We should make sure that we are leading the nation, and that natural caution does not end up looking like holding Wales back.

Another day, another bank

Tweet The collapse and subsequent takeover of HBOS seems to have been made inevitable by a run on the shares, which forced the price into a downward spiral. It looks as if the speculators and hedge funds who drive share prices down in order to make money for themselves and their clients have selected a victim and concentrated their fire upon it. According to the financial pundits, there is more to come. Other banks are likely to be targeted next.

I referred to the way in which this happens in a previous post. Speculators sell shares they don't own to drive down the price, then buy them back again at a lower price and pocket the difference. It's called 'short selling'. Most of them do this in a way which is, incredibly, entirely legal – they 'borrow' the shares from the real owners for the purpose. Some, however, sell shares they don't own without even bothering to borrow some. That's called 'naked short selling'. It's illegal in most jurisdictions, but that doesn't seem to prevent it happening.

It's another world for most of us, but it impinges directly on the real world in which we live when such speculation and gambling creates profit for the few, and economic woe for the many.

We need to look again at the way the financial markets are (or, more to the point, are not) regulated. It cannot be right that the banks and funds on which we all depend can be threatened by gamblers and speculators; and it cannot be right that the financial stability which most of us need and depend upon can be thrown into complete turmoil for the benefit of a few.

And it is utterly hypocritical and shameful for the Conservative Party to use the credit crunch as part of their campaigning whilst their local campaign is being almost entirely funded by the sort of activity which caused the crunch in the first place.

PS – This man seems to be criticising Labour for not having done more to undo the policies of his own party. I suppose that we should be at least a little grateful that he understands how damaging some Tory policies were. His criticism is a fair one – but coming from this source, it is just more hypocrisy. I do wonder whether he has told the Tory party in this area that he favours regulation which would stop the activities which fund their campaign.

Tally Ho!

Tweet As I noted previously, I couldn't immediately see an obvious reason why a New York based hedge fund would suddenly decide to donate £40,000 to the Conservatives in Carmarthen West and South Pembrokeshire. It seemed a very odd connection to me.

It has been hard to establish much by way of hard information about the company concerned, Christofferson, Robb. Like all companies in their line of business, they tend to secrecy. Even their web site provides only a single page of information – and doesn't say a lot – unless you have a username and password.

However, I have established that the company was founded in 2002 by Richard Robb and one Johan Christofferson. Now someone called Johan Christofferson was, until recently, one of the hunt masters at the Isle of Wight Hunt. Could this possibly be the same person? It's not exactly a common name.

If it is, it would explain much. The Conservative candidate for this constituency is currently the Chief Executive of the Countryside Alliance, committed to repealing the laws on hunting. Putting all of this together would mean, of course, that the Tory campaign in this constituency is being bankrolled by a former huntmaster using profits from a hedge fund which short sells shares in financial institutions and deals in the sort of mortgage-based securities which have been such a major factor in the recent financial turmoil.

It would also fit with the persistent rumours within the Tory camp locally that the party has been taken over by a group obsessed with a single issue – hunting.

They win - we lose

Tweet I still don't know why a New York based company would be so interested in what happens in Carmarthen West and South Pembrokeshire that they would want to bung £40,000 into the local Tory coffers; but I do know a little more about the company. Christofferson, Robb and Co are what is known as a hedge fund.

Hedge funds are not well understood outside their own sphere – and there are plenty of people who believe that they're not terribly well understood within it either. They are usually secretive, and much of what they do is completely unregulated. Different funds behave in slightly different ways, and because they are so secretive about their precise business, it is hard to know what any individual company is up to. But there are some generalities which are known.

Hedge funds often borrow many times the value of their underlying assets to buy things that they don't want and can't afford, and they sell things that they don't own. They then buy back the things that they sold but never owned in order to return them to the rightful owner from whom they were borrowed in the first place, and they sell the things that they bought but didn't want before they have to pay for them. They turn future profits which haven't been made into bits of paper which they can buy and sell before they even exist.

These funds are, in effect, gambling; and they are doing so with huge sums of money which aren't theirs and don't really exist. Betting on the future price of currencies, betting on the future price of shares, betting on the future price of commodities. Some of them even bet on the future value of the bets that they and others have already placed. They add an enormous degree of instability to the market place, and their whole ability to make money depends on market volatility. Their profits, made by making risky and usually short term investments, come at the expense of those investors who have to be more careful and long term with their money – investors such as our pension schemes and insurance companies.

So, whilst the overwhelming majority of us have a vested interest in financial stability and security, these funds – acting on behalf of already wealthy investors – have a vested interest in instability and volatility. They deliberately create volatility in order to benefit from it. They are a siginficant part of what has led to the recent instability in the markets – something from which we all suffer.

Some hedge funds trade in what are rather euphemistically referred to as "Mortgage Backed Securities" or MBS. These securities – the name is a complete misnomer, since there's nothing remotely secure about them – are the means by which the sub-prime crisis in America started and by which it was subsequently exported around the world. By separating lenders from the consequences of their foolish actions, MBS led to the collapse of Northern Rock in the UK and Freddie Mac and Fannie Mae in the US. In short, they are responsible for much of the financial crisis which has engulfed the world in recent weeks and months.

Let me be quite clear about this – the financial crisis is not simply an unfortunate accident. It is a consequence of virtually unregulated ('light-touch' regulation is the euphemism used by government) markets (the UK markets were deregulated by the last Tory government, of course, and Labour have done little or nothing to bring them back under control), corporate and individual greed, and foolish lending, aided and abetted by the creation of MBS to divorce banks from the risks of their lending.

What sort of hedge fund is the one which has been donating so handsomely to the Tories locally? It's hard to be certain. They certainly have been trading in MBS, and there has been talk that, after the collapse of the US market in this area, they would be investing in the same sort of business in Mexico. And they were one of the companies which was 'selling short' the shares in financial institutions such as Freddie Mac and Fannie Mae; that is to say selling borrowed shares in order to buy them back at a lower price before returning them to the owner.

The Tories cry crocodile tears over the problems faced by ordinary families as a result of the credit crunch; but they were responsible for creating the conditions in which the crunch could occur by de-regulating the markets, and they are clearly happy to be generously funded by companies which have been making their money trading in the sort of securities which caused the crunch.

Superfast Broadband

Tweet It would be very good, of course, to have the new superfast broadband which BT's Chief Executive has been touting this week. But there is likely to be some cynicism in these parts. In Llanpumsaint, for instance, BT has so far failed not only to deliver the ordinary broadband service which most people are now taking for granted – they don't even provide a reliable telephone service. And they seem to have no intention of doing so, unless 'the government' or somebody else – anybody – pays.

The thought that they are ready to start ploughing their money into an investment which will leave rural areas such as this even further behind is not likely to be well-received around here. And there will be a great deal of scepticism as to whether they will be willing to roll out the new facilities to the rest of Wales once they have provided the facility to all the areas where they can make the most profit.

And that's the nub of the issue. Wales should not refuse the opportunity to lead on this new technology – that would be plain silly. But we should be seeking a clear agreement that all of Wales will be treated equally, and that BT will not simply cherry-pick in the interests of its own profits and shareholders.

Tory £s world tour

Tweet The Sunday Times carried an interesting story on Sunday on the source of Tory funds. Particularly, the paper highlighted funds emanating from their former Treasurer and current Deputy Chairman, Lord Ashcroft. It seems that the Tories and Ashcroft have been finding ingenious ways of circumventing the legal restrictions on overseas donations.

Whilst there is no suggestion that they have actually broken the letter of the law, it is clear that they have been deliberately subverting both the spirit and intention of the law by using a string of companies – some of which seem not to actually do very much other than funnel funds into the Tory Party – to route money from Belize into Tory funds. The net result is a transaction which would have been illegal if the money had gone directly from its original source to its final destination.

If I were challenged to define 'money-laundering', my definition would bear an uncanny resemblance to what seems to have happened here. As Sir Alastair Graham, former chairman of the committee on standards in public life, said "Money is being bounced around the world before it ends up in Conservative party accounts. This breaks the spirit of the law on foreign donations."

The register of donations on the Electoral Commission website helpfully lists the donations which Ashcroft's company, Bearwood Corporate Services, has given to a whole string of constituency parties across the UK.

It has long been understood that Ashcroft was somehow giving money to a long list of marginal constituencies to try and buy a Conservative victory in the General Election. It remains unclear whether he has ever honoured the commitment he gave when accepting his peerage that he would become UK domiciled, and start paying taxes like the rest of us. Giving money through a company avoids the questions that might be raised if a non-domiciled person made such donations, of course. And it is highly unlikely, according to the Sunday Times, that any tax has ever been paid on the money which is now keeping the Tories afloat.

I'll admit that it was something of a surprise to me to find that this particular company appears not to have channelled any of Ashcroft's pennies into Carmarthen West and South Pembrokeshire (unless they've simply forgotten to declare it). But a quick perusal of the list of donors reveals that they probably don't need any of Ashcroft's money – they have another source of income.

The London office of a New York-based company, Christofferson, Robb & Co, has channelled £40,000 into the Tory coffers locally, in two tranches of £20,000 each over a period of just five months. Interestingly, this constituency is one of only two which seem to be benefiting from their largesse – the other was Harlow, which received a mere £10,000.

Conservative central office received an additional £131,000 in three tranches. I have no idea, at present, why a New York based company would choose to bung £40,000 into Tory coffers in this part of the world, but I'd be delighted to hear from anyone who can enlighten me.

Promoting the local economy?

Tweet Now, as a general rule, I'm all for promoting the local economy. And I can understand how any political party would seek to use its conference to "maximise the economic benefit for local businesses".

The Tories have always claimed to be the party of business of course, so when they hold their conference in Birmingham later this month, they will naturally be encouraging their delegates to make use of a range of local companies. They've had a PR firm help them by putting together a booklet full of useful information about the range of 'services' available to delegates locally.

According to this report from the BBC, the booklet, which has been distributed with the official conference literature in advance of the conference, even includes some helpful discount vouchers - for a £10 reduction on the entry charge to a lap dancing club in the city centre.

The club modestly describes itself as "an exclusive gentlemen's entertainment venue". In deciding to advertise in a booklet targeted at Tory delegates, I can only assume that the club is making a skilled and experienced judgement on the potential take-up for its services. But in this case, 'exclusive' presumably means that female conference delegates will be encouraged to seek their entertainment elsewhere.

Another year, another conference

Tweet Our conference went very well in Aberystwyth. The mood was positive and confident, and we're looking forward to the future. I think the media were a little disappointed - although unsurprised - at the lack of controversy and debate. Vaughan Roderick made precisely that point in giving his reasons for not joining us in Aber. There's nothing like a good row to give them something to report.

Actually, I think they're (almost) right. Our conferences have become pretty bland compared to the days when I first started attending them, back in the early 1970's. We used to have some really good rows and debates then, and in one or two of them, I seem to remember being one of the chief stirrers.

Some seem to assume that the lack of argument is somehow due to the party's hierarchy suppressing dissent. I rather like the idea that we could have that much control of course; but the truth is that there simply aren't a vast number of things about which we disagree at present, and we are not getting controversial proposals submitted for debate. I think, though, that the NEC need to work harder to find some controversy for each conference – it would liven things up a bit.

In the absence of any open appearance of dispute, sometimes people go looking for dissent. I was quite surprised at Betsan Powys' suggestion that a straw poll of 15 members suggested that a majority of party members were not confident that a referendum would be held on or before the Assembly elections in 2011. I am entirely convinced that there will be a referendum on the full implementation of the 2006 Act in the agreed timetable.

Although the detail of the promise does include a caveat, the spirit of the commitment given was completely clear, and I am confident that both parties recognise the importance of that pledge to the very existence of the One Wales coalition. If I believed for one moment that the leadership of Plaid Cymru were not intent on delivering that pledge, I would find it impossible to occupy my current role, given the clear statements of confidence which I have given on a number of occasions.

I am sceptical of the commitment of some in the Labour Party, and have expressed reservations about that from the outset. However, I am absolutely certain that they understand that any deliberate failure to abide by the spirit of the agreement to which they, like us, committed would be damaging to 'One Wales' and probably fatal to any prospect of a 'One Wales Mark 2' in the future.

Some of the initial coverage of our conference concentrated on the I-word. Given the nature of the questioning at the opening press conference, I can't say that I was surprised at this. As I have said before, the fact that we have a long term vision for the sort of Wales we want to see sometimes creates difficulties for us. People don't always understand the difference between short term programmes for a single term of office and longer term aspirations.

Those parties (basically, all the rest) who never look beyond the next election and are not at all troubled by any grander vision have no such difficulty, of course. It would be easy to forget, or shelve, the long term vision in order to concentrate on the here and now, and some people urge that we should do so. For me, that misses the point. If my only interest at any point was in what can be achieved in the next four years, I would have joined one of the other parties, not Plaid. It is the vision and the aspirations which set the context for the short term; without that context, what would be the point of Plaid?

Dangerous £s

Tweet I had the pleasure of sitting in the public gallery for a meeting of Carmarthenshire County Council yesterday. My favourite quote of the meeting came from the leader of the Labour Group, Cllr Kevin Madge, who said "The Assembly is dangerous when they get too much money". He does, of course, offer an obvious solution – give all the money to the county council to spend instead; although he did not actually define the nature of the danger – or how much exactly constitutes "too much" money.

I did wonder though whether this was official Labour Party policy. It might help to explain why they've been dragging their feet over reform of the Barnett formula. Just think how much more 'dangerous' the Assembly might become if it had a fairer share of money to spend on services in Wales.

Supercities and human needs

Tweet I don't have any issue with the idea of the towns and cities of South Wales working more closely together, as was suggested by a think tank today. Nor do I have any issue with the idea that sensible economic – and even more so, transport - planning should look at cities and their hinterland as a whole, rather than trying to focus attention on small parts of the area. But I strongly disagree with the underlying thinking behind this particular report.

They seem to be starting from a number of premises as follows:

• Globalisation is not only good, it is inevitable
• Globalisation means that cities have to compete with each other on the world stage
• Competing means that cities have to be bigger and bigger

To them, these premises are not even open to challenge. I beg to differ.

In a way, the subject is one which goes to the very heart of my own political philosophy. I believe that human institutions, towns, cities, transport, the economy – all these things and more – should be shaped and driven to meet human needs and aspirations; and on a human scale. It sometimes seems to me as though many of the cold economists are telling us that we, as humans, must adapt to fit the needs of the market – or rather, the needs of globalised big business.

Now some might argue that the two things are not that different. To meet human needs and aspirations requires jobs and resources; business creates those jobs and resources. I consider that to be over-simplistic, not least because there is nothing contained within the statement that requires globalisation.

Globalisation is the current fashionable trend; but just as generals are always said to be stuck fighting the previous war, I think that many economists and supporters of globalisation are supporting an outdated set of ideas. The future lies with re-localising production and consumption, and it will be forced upon us by rising world populations, shortage and increased cost of fuel, and climate change. Above all, the complexity which is being built into our economic systems by globalisation and long supply chains represents a major threat in itself; the globalised economy is actually becoming more vulnerable to catastrophic collapse as a result of a failure at a single point.

So, by all means let's have integrated and cohesive planning between our towns and cities rather than competition; but let's do it to shape our country to meet our needs rather than because we want to compete with Paris or London. And let's start by deciding what we want from the economy, rather than what it wants from us.

PS – I was a little taken aback by Peter Stead's quoted comment, "One is tremendously attached to the Valleys but certainly in the long term the future lies with the ports". What exactly is the fundamental difference between that and the insane suggestion just a few weeks ago that people should all move from the North of England to places like Oxford?

There's news and there's...

Tweet According to today's Western Mail, it would seem that "senior Plaid officials" are "under fire" for "changing the rules" to avoid releasing the voting figures for our presidential election. Apparently, the "senior party officials" decided not to release the figures "because of embarrassment over earlier leaks".

It's a version of events which this "senior Plaid official" has some difficulty in reconciling with reality.

I could challenge many of the statements made, but I'll content myself with saying that not releasing the figures is a very long-standing policy. (I remember challenging it myself back in the 1970's, and on other occasions since then.) And the justification for it always had a great deal more to do with sparing the blushes of unsuccessful candidates for internal elections than with any embarrassment over leaks.

Just about the only part of the story which I do recognise as true is the suggestion that we will be looking at the policy again. But hey, a story is a story.

Principles and opportunism

Tweet Michael Portillo was not the architect of the poll tax fiasco, although he caught a lot of the blame. Thatcher was the architect; Portillo merely had the misfortune to accept the job of local government minister just after the tax was introduced into England. It was the poll tax which ultimately did so much to damage its architect; and it didn't help Portillo himself a great deal either, despite the fact that he did much of the work on replacing it.

At the time, Portillo told us all how wonderful the tax was, but reading between the lines of his article in the Sunday Times yesterday, I suspect that he knew all along how foolish it was; he just wasn't allowed to say so. It's probably a lot more common that we might think for government ministers to be fully aware that they're doing the wrong thing, whilst saying the opposite in public - what's unusual is the hint of an admission.

In any event, Portillo actually makes it quite clear ("I am convinced that an income tax supplement must be part of any equitable local tax system") that he thinks that a local income tax should be an essential part of the way in which we pay for local government. It's nice to see that he's come round to what Plaid have been saying for many years, which is that a tax based on ability to pay will always be fairer than a tax based on the value of the property in which someone lives.

He makes the statement in the context of the story last week about the SNP's determination to push ahead with scrapping council tax and replacing it with a local income tax. Now I'm not going to argue that the SNP plan as it stands is perfect; proposing to replace locally set council tax with a nationally set income tax supplement is not what I would argue for, since it isn't 'local' in any meaningful sense. But it's certainly a step forward from the council tax, and is probably about the best that the SNP can do within the current framework of powers which the Scottish Parliament has.

I am convinced that local income tax in some form is the way forward, and the SNP have obviously come to the same conclusion. So, it seems, has Portillo. It is a pity that, on that basis, Portillo based his article on the suggestion that the SNP move is a cynical ploy to provoke a row with London. Why is support for the idea a sincere statement of belief when Portillo (a man who seemingly admits to telling us the council tax was wonderful when he knew it to be a disaster) expresses it, but 'opportunistic' if it comes from a Scottish nationalist?

No nukes is good nukes

Tweet The phrase 'dictatorship of oil' has at least two meanings, and when Gordon Brown pledged to end that dictatorship, I'm not entirely sure which of the two he meant. I'm afraid, though, that I suspect it was the wrong one.

If he wants to end our dependence on oil because of a recognition that the world has to move from an economy based on hydrocarbons to a low-carbon future, I'd agree with him. But, although he used the words 'low-carbon', I suspect that he's really reacting more to the way in which oil prices have a lock on our economy, and is looking to free us from that. That's not an unworthy aim in itself; it just isn't the same thing as a recognition of the real problems we face over future energy policy.

His – and others' - continued stress on nuclear energy as part of the future energy mix is something that I just can't accept. It's not that I am opposed to nuclear energy on principle – as I know that some are – I'm just not convinced that it makes economic or environmental sense.

There are a number of arguments for and against nuclear energy, not all of which are purely environmental issues. I know that there are some in the environmental movement who believe that we should now be ready to embrace nuclear energy as the least bad alternative. And almost two years ago, I heard Sir John Houghton speak at a meeting organised by FoE in Narberth, where, as a small part of a very well-made case on man-made global warming, he supported a move to nuclear power. Amongst his other arguments was the suggestion that we have enormous stockpiles of plutonium for nuclear weapons – wouldn't it be better to turn those stocks into electricity and use them peacefully?

It's a strong argument, and disagreeing with one as eminent as Sir John in the field of global warming is not something to be done lightly. But for me, there are still too many unanswered questions over the nuclear option, and without those answers, I am unable to make a sensible judgement as to whether nuclear power is really as low-carbon as some claim.

The fact that the plants themselves are very low-carbon once in operation is only part of the story. The carbon cost of constructing a nuclear power station is significantly higher than the carbon cost of a conventional power station, and then there is the carbon cost of decommissioning the station and dealing with the waste. The problem with this is that we still don't know how we are going to deal with the waste, and without even knowing how, it is impossible to know the cost either in pounds and pennies or in carbon terms. And then there's the carbon cost (and the human cost) of obtaining and processing the fuel to take into account as well.

Whilst I remain willing to listen to the facts and consider the options, I'm simply not convinced at present that the benefits of nuclear energy outweigh the disadvantages. One thing of which I am certain however, is that deciding whether or not to go nuclear is something which affects us all, not just the areas around power stations, since we will all have to face the consequences of disposing of, or simply guarding for thousands of years, the waste produced.

One of my biggest concerns about energy policy is that governments continue to see it as a question of how we obtain vast quantities of energy to carry on as we are. As a consequence, they always seem to be looking for 'big technology'; whether that be nuclear or massive barrages. I think the real issue is how we reduce our demand for energy to a level which can be supplied in a more appropriate fashion.

Is 'absolute' good enough?

Tweet How good is an 'absolute guarantee'? On face value, it should be very good indeed, but there are guarantees and there are guarantees.

Hywel Williams MP has been doggedly pursuing the implications of the contract awarded to Lockheed Martin, the US Defence contractors, to process the next UK Census. His concern, which I and many others share, is that Lockheed Martin is covered by the Patriot Act in the US, which means that the US Government can force the company to disclose any data they process.

In response, the director of the census has said that he can "guarantee absolutely" that this will not happen, because they have a "very strong contract" in place, and the data will be processed by sub-contractors who are "outside US law". I'm sure the census director is a very sincere man, and I'd like to believe him - but I can't. It's not that I don't trust him – it's more that I don't trust the US government.

The situation is quite clear under existing law, but in recent years, the US has developed a propensity for changing the law retrospectively. Worse than that, they have changed their laws in ways which enable them to act in their own courts against non-US citizens and organisations for events which have happened outside US jurisdiction. If they decide that they want this data, I simply do not have the confidence that they won't try and get it, and by appointing a major US defence contractor to run the census, the UK government have given them an opening which they can use.

The census director can and has given a good guarantee about what he and his team will do – but I don't believe that he is in any position to guarantee what other people will do, whatever his contracts might say. I believe that the obsession with outsourcing and privatising work which has led to the granting of the contract to Lockheed Martin has also led to a situation where the confidentiality of the census has potentially been seriously compromised. Hywel is right to be concerned.

Keep taking the tablets

Tweet The Lib Dems' Health spokesperson took a lot of space and words in the Western Mail on Monday to fulminate against the policy of Free Prescriptions, but she actually said very little. (The Tories' Assembly leader was making similar noises just a week or so ago as well.) Specifically, she once again totally failed to explain why Lib Dems and Tories believe prescriptions should be singled out for charging, whilst other aspects of the Health Service remain free.

Their main lines of argument seem to be:

• We should not have to refuse some treatments on cost grounds when there are other people who could pay for their prescriptions and don't;
• Providing free prescriptions diverts funds from other areas of the health service;
• People don't appreciate something (such as prescriptions) which they get for free.

But suppose we substitute 'appointments with the doctor', or 'minor surgery', or 'hospital accommodation' for prescriptions in those three points? The statements all remain just as 'true'. There is no particular rationale for picking on prescriptions other than the fact that people have been accustomed to paying for them; but the fact that something has been so for a period of years is never in itself an adequate justification for it to continue.

I suspect that the Tories and Lib Dems actually believe that a wide range of health services should be means-tested; with those who can afford to pay being charged for the services they receive. Prescriptions is just the tip of the iceberg for them. Just think of all the money that that would free up for other parts of the health service (or would it just go on tax cuts, I wonder?).

Actually, I welcome the way in which the Tories and Lib Dems won't let go on this one, because it helps to draw a clear distinction between those of us who believe in a free health service, and those who have simply never understood the underlying principle of 'free health care for all'.

The £ in your pocket?

Tweet Inevitably, a number of politicians have seized on the news that the pound has hit a new low against the Euro, largely as a result of the Chancellor's extremely gloomy assessment of the economic prospects. A government which attempted to build its whole reputation on the basis of sound economic management can hardly complain if its opponents make political hay when things go wrong.

Fluctuating exchange rates may seem a bit academic to most of us – except when it comes to buying our holiday money – but they can cause real problems for all of us. A low pound makes it easier to sell our exports, but increases the cost of our imports – which will make the fuel price crisis even more acute as winter approaches. Fluctuating exchange rates can also give massive opportunities to the speculators in the money markets to bet against one currency or another – often making the crisis worse than it needs to be.

Whilst any business involved in importing or exporting has its own view of what the exchange rate should be, most business people that I talk to want stability even more. Instability makes it hard to plan and invest for the future.

The arguments against joining the Euro were always at two levels – the economic and the political. When we last discussed this inside Plaid, it was the economics which we were debating mostly. There was clearly a belief that the Euro would succeed, and a feeling that we should be part of it; but there was also a fear that the exchange rate at the time would be relatively unfavourable to us. So, with the pound at a new low, is it time to reconsider the question?

Entering the Euro at or around current exchange rates would be a lot better for what's left of Welsh industry than it would have been at the higher level which pertained at the time that the Euro was created. And for as long as I can remember, the European interest rate regime would have been better for Wales than the regime under which we have been living, with interest rates set in London, often as a reaction to overheating in the housing market in the SE of England. For businesses trading across Europe, joining the Euro-zone would provide the benefit of stability against which they could plan their investment and strategy.

I've always felt that the real reason for the UK's reluctance over the Euro was more to do with a Little Englander mentality than with the economics. For the separatists of UKIP, 'keeping the pound' is axiomatic, but many LabourTory politicians are also afraid to support 'scrapping the pound' - either because of a fear of losing ground to the separatists, or else because, deep down, they harbour some pretty separatist views themselves.

Plaid doesn't suffer from those hang-ups. Being a full part of the European project is an essential part of our vision for Wales. To me, the damage to the government's economic reputation looks like a good opportunity to set aside blinkered British nationalism and start a sensible debate about the economic advantages of joining the Euro.