Wednesday, 30 June 2010

Stark choice

I enjoyed the article by David Marquand on 'Click on Wales' yesterday, analysing the economic choices being made by the new government in London.

The part that jumped out at me was when he said "If Clegg and Cable are right, they were wasting their time. Capitalism is capitalism: it has to be taken neat or not at all. We do have to choose between the free market and the overmighty state.".

The phrase 'overmighty state' is not one which I would use to describe the alternative; I'd prefer something more like 'collective action', which is what I think that the 'state' ought to be about. And the idea that the choice is quite as stark as that isn't perhaps what Marquand actually believes – it is after all caveated with the bit about whether Cameron and Clegg are right or not.

But the conclusion posited is at one with what I have always believed. Ultimately, we have to make a choice between an economic system based on giving free rein to 'market forces', and one based on intervention and control. It's a choice which I've frequently described as being about whether we serve the economy or whether the economy serves us.

For me, an economic system is a human construct; built by humans, and run by humans. It is not some impersonal force over which we have no control – there is no 'invisible hand'. And an economic system built by humans should be there to serve humans, as individuals (the many, not just the few), communities, and nations.

For too long, politics has assumed that we basically have, and can have, very little control over economics. We should be challenging that assertion much more than we do. Perhaps Cameron and Clegg, albeit unintentionally, are going to make it a lot easier for us to do that.

Tuesday, 29 June 2010

22 of everything

The subject of local government reform is raising its head again, as financial tightening starts to hit local government. The Local Government Minister is quoted as saying that he can't see why we need 22 of everything, and I agree with him in principle. (Although in the case of one of his examples, I'm not sure that reducing 22 fleets of vehicles to a smaller number of larger fleets necessarily results in fewer vehicles overall. And even if it did lead to fewer vehicles, if they had to travel a significant extra distance to cover larger areas, the cost saving may turn out to somewhat illusory.)

What concerns me however, is the suggestion that we rush straight from 22 into some other number, and do so in a higgledy-piggledy manner with arbitrary cross-border service mergers based on joint filling of senior vacancies, and without giving any real thought to what the 'right' number is.

For political reasons which I can understand (to say nothing of the potential cost implications in the short term), the Welsh Government has fought shy of taking a thorough look at local government boundaries and functions. I think they're as wrong to avoid taking that big picture look as they are to try and rush into opportunistic changes. We're also not looking at what can and should be democratically accountable at a local level and which services might be better delivered nationally.

In the 2007 Assembly elections, I (and every other Plaid candidate) fought on the basis of a manifesto which called for a thorough review of the whole way in which Wales is governed – local government, health, etc. It's one of our promises which didn't get into the One Wales coalition agreement, more's the pity. Instead of a thorough review, we've had a piecemeal approach which delivers neither radical change nor stability.

Sooner or later, we need to face up to the question rather than continue to avoid it.

Monday, 28 June 2010

On yer bike

Norman Tebbit is one of that select band who've managed to become famous for saying something that they never actually said. He probably meant it though. And if he didn't, there is little doubt that Iain Duncan Smith does.

The reactions have been pretty predictable, of course, but I'm not sure that they're entirely honest. The idea that we should tell people that they have to leave their communities and families and move to wherever work is available is one which makes me deeply uncomfortable. It is, though, the logical outcome of the sort of unrestrained free market economy to which the coalition in London is committed.

From their perspective, it is private companies which can create jobs, and they should be free to create them wherever they choose. Those inputs which they need (including a labour force) should then be prepared to go to them. It is not, I can almost hear them saying, the responsibility of government to ensure that jobs exist where people want them.

Those of us who are uncomfortable with the idea that people should be given more encouragement to move to find work need to consider our response to that quite carefully. The point about whether it is the responsibility of government to ensure that jobs are available where people want them is an important one.

Whilst governments of different colours have, over decades, made attempts with varying degrees of enthusiasm to attract jobs to particular areas, by grants or by providing facilities, no government has ever said that it is the government's responsibility. And, perhaps more importantly, no scheme of incentives has ever led, or is ever likely to lead, to the creation of all the 'right' jobs in all the 'right' places.

The closest anyone has come to the idea that Governments should accept the responsibility was probably Plaid's Economic Plan in the late 1960s, which attempted to set out how many jobs we needed, of what type, and where, and how we could set about creating them. The question we need to answer is whether and to what extent we are happy to leave this sort of decision to market forces and to what extent we should have a more interventionist and planned approach.

I favour more active intervention by government, whether in Cardiff or in London, and am willing to say so. Those who do not favour a more active approach, and yet are still happy to criticise the wicked evil Tories are not really offering any alternative other than a life on benefits.

Friday, 25 June 2010

Weathering the weather

In many ways, I wasn't overly surprised a week or so ago to find that the proportion of people who don't believe that man-made climate change is either happening or is a problem has increased. The controversy over the leaked e-mails didn't help, but there are a number of deeper issues as well.

1. There is a general lack of understanding about the difference between weather and climate. Many climate change campaigners haven't really helped by drawing attention to weather events as evidence for climate change. There were always going to be weather events which sceptics could then use against them.

2. Humans are, in general, not very good at thinking about the longer term impact of their behaviour. Evolution has fitted us well to look for immediate individual survival, but not for collective species survival. We have an innate tendency towards short termism. Those who will suffer short term economic disadvantage by any proposed measures have a natural inbuilt propensity to be willing to believe whatever justifies their own decisions as well.

3. The internet makes it easy to spread 'junk science' and plain old fashioned error. Repetition can give that a credibility which is wholly undeserved.

4. Climate change is complex. It depends on understanding probabilities rather then certainties. Lack of certainty can easily become lack of good reason to act.

5. Politicians have an electoral incentive to avoid giving people really bad news about changes that we need to make unless and until they can all agree to say the same thing (or until hell freezes over, a rather likelier event) for fear that another politician or party will give a message which people might prefer to hear.

6. Large companies and organisations most threatened by climate change have the muscle and the money to fund 'research' which 'proves' that there is no problem.

When asked, at a hustings meeting during the last election, whether I am an optimist or a pessimist on climate change, I replied that I am a pessimist. Not because I believe that we can't do enough to avoid the problem, but because I believe that we probably won't. That isn't a reason to give up trying though.

I've long been convinced that the biggest single change that we can make is in our use of, and our sourcing of, energy. It's easier (or maybe just less difficult) to convince people that we should switch to renewable sources than it is to talk about lifestyle changes. Perhaps we should try and concentrate the argument more tightly on that main issue.

Thursday, 24 June 2010

Fiddling the figures

I liked the result of yesterday's readers' poll in the Western Mail. According to today's paper, when asked "Are you happy to take the budget pain for the good of the economy?", 60% of respondents said yes, whilst a further 100% said no. I'm tempted to suggest that the other 30% were too confused to answer.

Perhaps they got the Conservatives to do the sums for them.

Wednesday, 23 June 2010

Jill is right

Yesterday's Western Mail carried a lengthy piece about an attack by Labour AM Alun Davies on Jill Evans, and backed it up with an editorial comment saying that Plaid Cymru's senior figures need to get a grip. The implication is that Jill is somehow out of line with the rest of the party, because she's saying something different from the Welsh Government, and therefore needs to be silenced.

That's a complete non-sequitur – not least because Plaid policy is not made by the Government or the party's ministers in that government, a point that I have made many times before. It is made by the party's membership, and doesn't change as a result of a statement by one or more government ministers.

Plaid Cymru has committed to an energy policy based entirely on renewables, and ending the use of fossil fuels and nuclear power. That is an aim which is entirely achievable, and the Welsh Government recently adopted an energy strategy which basically takes the same line.

One thing is absolutely clear – building new fossil fuel power stations is not a way of reducing dependence on fossil fuels. Even if we accept (and I'm far from convinced) that there is a short term need for gas whilst we make the transition, a CCGT of the type being constructed at Pembroke is not the most sensible way forward.

A series of smaller CHP schemes would make much more efficient use of the gas, extracting more useable energy from the fuel, thereby reducing the emissions cost of each unit of energy. It would also avoid the extremely damaging disposal of vast amounts of waste heat into the Haven with the discharge of cooling water.

So, the position taken by Jill is entirely in accordance with both the policy of Plaid Cymru and the energy strategy of the Welsh Government. The only basis for the wildly exaggerated claim that this represents some sort of split is that there was, apparently, a statement by the Welsh Government sometime last year welcoming the granting of planning consent. I have to admit that I missed that one – or else I'd have disagreed at the time.

It does highlight two concerns which I've highlighted previously. The first is about government strategy, and the second is about the way in which our elected representatives respond to government strategy.

When the government produced its energy strategy, I questioned whether and to what extent it was going to be more than a paper exercise, and whether the government were going to follow through. Welcoming developments which go directly against the declared strategy does not augur well.

On the other point - and this was an issue which came up in several hustings meetings during the recent election campaign - we are not going to reduce human impact on the planet's climate if individual elected representatives sign up to a strategy or policy and then want to make exceptions every time such an exception might bring about a few jobs. That is, ultimately, a recipe for carrying on as we are, not for change.

It isn't that jobs are not important to the economy; of course they are. But where Alun Davies - and any other AM or MP who wants to make exceptions 'for the sake of jobs' - are completely misguided is in assuming that jobs depend on ignoring the strategy. They do not - there are more jobs, and a more sustainable economy, available by following the strategy than by ignoring it.

If Plaid Cymru needs to get a grip at all, it's on those who choose to ignore party policy, not on those who follow it.

Tuesday, 22 June 2010

Who generates wealth?

It's not actually a very easy question to answer. Marx took three very thick volumes (well, two extraordinarily thick and one ordinarily thick) to try and answer it, and having waded through it (turgid, to say the least) when I was still at school, I've never been entirely certain that he succeeded.

The common belief seems to be that the private sector creates wealth whilst the public sector merely uses (or even worse, destroys) that wealth. That's an oversimplistic assertion which needs to be challenged more robustly than usually happens, not least because it's an assertion which is a factor in the round of cuts we're about to suffer.

Firstly, we have a whole host of people in Wales (myself included) who work in the private sector for largely public sector clients. Does that make us wealth creators or not? And if I did exactly the same job for a salary in the public sector, would that change my status?

Secondly, the government recently effectively nationalised some banks. Does that mean that they moved from the private sector into the public sector? Does it change their status as wealth creators?

Two simple examples which show that it's actually a rather more complex question than it can sometimes appear.

The hang-up over the relative size of the public and private sectors is another one of those hidden ideological differences. There are a number of reasons why the private sector may do some things better or more efficiently that the public sector, but it ain't necessarily so. And there's no reason why wealth cannot be created by public sector bodies and enterprises.

We'd be better off discussing that we want to achieve and how than getting hung up on arguments about the relative size of economic sectors.

Monday, 21 June 2010

Imperfect Speakers

I once played the lead rôle in my youth club's production of what I'm told thespians may only ever refer to as the "Scottish play". I can still remember some of my lines (well, it was only 40 years ago!). One line often springs to mind when I hear politicians talking:

"Stay, you imperfect speakers. Tell me more!"

I was talking to the witches of course, but maybe that isn't as different as it sounds. They're all trying to weave their charms. In the case of the witches, they were telling me that I would become Thane of Cawdor, and then King. (To which my response was that: "to be King stands not within the prospect of belief". Life mirrors Art.)

It often seems that politics, in what I would call 'imperfect speaking', has become more about point-scoring, sound bites, and half-truths than about policy. Politics has become more a question of image, technique, and presentation than debate about direction for far too many politicians.

Some have argued that this is a result of being in some sort of 'post-ideology' politics. If ideology is no longer important, than the game is entirely about which team should be running the show rather than which show is being performed. And any of us could easily join any team.

There's a degree of truth in it, of course, sadly. Many politicians, in all parties, do seem to share a pretty common view of the world. Many of the statements I read in the press could have been made by members of any one of Wales' four political parties. With only minor differences, many politicians do indeed share a common ideology in practice.

But an increasing buy-in to one particular ideological perspective is not the same as the death of ideology, certainly not as far as those of us who still cling to a different one are concerned. And I believe that that different perspective is as relevant as ever to the position in which the world finds itself.

If I ever came to the conclusion that politics really was just about which team was batting and which was bowling, I'd know that the time had come to retire completely.

Saturday, 19 June 2010

Inputs and Outputs

I worked for a boss once who gave me a very simple definition of productivity. It is, he said, output divided by input. The more output you get from a given input, the more productive you are.

Then there was another boss who told me that I made my job look really easy. I took it as a tremendous compliment and thanked him. He probably thought that I was compounding my sins with sarcasm - because with the benefit of hindsight, I came to realise that it was one of the most stinging criticisms he could make.

The company concerned had a strong culture of 'presenteeism'. Turning up after the boss or going home before him was a big no-no. What I was supposed to do, apparently, was work much longer hours, achieve less, and complain loudly about being overworked. Only then could they be certain that they were getting the most out of me. (And I've subsequently discovered in other contexts that doing less and complaining more generally leads to a higher level of recognition.)

I exaggerate – but only a little. There are far too many organisations which think that sweating their assets means getting the maximum input from them, rather than the maximum output. It's a deeply-ingrained culture, which is leading to higher and higher levels of stress-related absences. (It's also part of the rationale for the opposition of some people to things like the working hours directive.)

When the government talk about saving money in the public sector by not filling jobs (or by getting one person to do the same job in more than one council, as the Local Government Minister suggested this week) it can sound, superficially, like an easy answer. But unless the total workload reduces, it simply means that the individual workload goes up, and those left must do more to fill the gap. At a macro (organisational) level, that may well look like better efficiency or productivity; but at a micro (individual) level it's likely to result in the individuals having to work significantly longer hours for no gain in personal productivity.

Is that really the basis on which we want to run our public services?

Friday, 18 June 2010

Moving on

The sharp-eyed may have noted a slight change to the masthead of this blog a couple of days ago. And given some of the speculation I've been reading and hearing, here's the explanation from the horse's mouth as it were.

Sometimes in life, I find that a particular song, book, or phrase sums up a point which I've reached, and I was listening to the radio as I was driving along the other day when they played "The Gambler" by Kenny Rogers. The chorus runs:

You've got to know when to hold
Know when to fold
Know when to walk away
Know when to run

I've never been much of a gambler, but "knowing when to fold" is a skill which applies in a lot of other fields as well. It isn't easy though. When you've invested years of your life in a project - to say nothing of effort and money - there is a natural tendency to want to see things through. There's something of an emotional investment involved as well.

"Knowing when to fold" doesn't just apply to the forthcoming Assembly election, of course, but my attention has focussed very closely on that over the last couple of weeks. I've given it a great deal of thought personally. I've listened to the comments of a number of members as well. Their analysis is varied; some I agree with, some I do not - but the detail of that is a story for another day.

With all things, there comes a time to let go and move on, and the view that I should do so was sufficiently strong for me to heed the advice. The suggestion made in a comment on Vaughan's blog today that I will not be putting my name forward for the nomination in Carmarthen West and South Pembrokeshire is entirely correct, although some of the other comments are well wide of the mark. It would have been nice though if the commenter concerned had allowed me to make my own statement in my own way. Plus ça change...

Plaid Cymru is fortunate in having plenty of other options available locally. That is something which was not the case back in 2004 when I was originally pressed to stand. I have encouraged Nerys Evans to apply, and I am confident that she will win the nomination if she does so. I wish her well, and hope that she achieves the success which she deserves.

Wednesday, 16 June 2010

Visiting the Doctor

There are those who argue periodically that the days of ideology in politics are dead and gone. In much of what passes for political debate, that often seems to be true. But I'm not convinced; there are plenty of issues where the underlying disagreement is really an ideological one; it just isn't presented in those terms.

Yesterday's news about a Labour-leaning think tank suggesting a £20 charge every time anyone visits the doctor is a case in point. It's presented as though it's merely a suggestion, an option, for addressing the budget deficit, but there really is an ideological disagreement underneath that.

There are, in practice, three ways in which we can pay for health care:
• We can pay for what we use at point of use;
• We can pay through an insurance scheme; or
• We can pay through taxation.

There is no necessary reason why the total cost of delivery or the total amount paid should be any different under those three potential models, but there is a huge difference in the impact on who pays, and how much they pay. Under the first, those who are ill most often pay the most, under the second, we all pay broadly the same, and under the third, payment is based on the ability to pay.

Whilst people can and do put forward practical arguments why one is better than another, or why we should mix and match elements of two or three of them, the argument at root is not a pragmatic one. Positions are taken on the basis of a belief about what is right and what is wrong – and if that isn't, ultimately, an ideological argument what is it?

I'm in no doubt that my own commitment to free health care – including prescriptions and visits to the doctor – stems from my view that health care should be universally available as needed without cost at point of use, with contributions being based on ability to pay. And I shall continue to make that argument.

Monday, 14 June 2010

Let's have proper analysis, not ridicule

Yesterday's Sunday Times ran another of their fairly regular articles highlighting what they refer to as 'non-jobs' and 'waste' in the public sector. It was a large story – occupying a whole page – but it left me a little cold.

Picking on ridiculous-sounding job titles (and there are certainly some which easily fit that description!) makes for an easy story, but the article made no real effort to go behind the ridicule and seriously discover whether the jobs are wasteful or not.

To pick on just one example of their non-jobs – a "city events and international links officer" - I would have liked to know the answer to questions such as whether the events organised generate additional visits (and therefore spending) in the town or not. Is there, in short a net gain to the local residents? Without asking that sort of question, how can anyone form a balanced judgement?

One of the examples of wasteful expenditure they quote is the refurbishment of offices for the National Audit Office. The cost per head of furnishings certainly looks excessive to me, and the talk of marble flooring and leather sofas makes one wonder about value for money. But for me to make a proper judgement, I'd like to have known how suitable the offices were before the refurbishment - did they, for instance, comply with relevant legislation? Do we expect staff to work in poor conditions, just because they are in the public sector? I'd also have liked to know what the alternatives were, and how much they would have cost.

I would never argue that there isn't waste in the public sector, nor that there are no non-jobs which we could easily do without. It may even be that every single example quoted in the article fits into that category. But there wasn't enough information to reach that conclusion, and it ended up being just another 'bash the public sector' piece. In this case, it's the media leading the charge - but there seem to be plenty of politicans equally happy to seek a quick headline on a simlar basis.

People in Wales working in the public sector are in for a tough time, with jobs likely to go. They deserve to have their situation considered properly and thoughtfully during that process, rather than be subjected to ridicule and abuse purely on the basis of who pays their salaries.

Friday, 11 June 2010

"It'll be over by Christmas"?

David Cameron's statement to the troops in Afghanistan that they'll only be there until the Afghans are ready to take over responsibility for their own security sounds rational at first. It does, however, ignore a few pertinent facts.

Firstly, of course, Afghans actually were entirely responsible for the security of their own country until Bush and Blair decided that they were the wrong Afghans, and needed to be replaced.

And secondly, there seems little prospect that any particular group of the Afghans currently involved in running that country are likely to be greatly preferable, or to last long in power without the firepower of Western troops to back them up.

If no long-term solution has been negotiated and agreed, then whenever Western troops leave, the likeliest outcome is that there will be a central government, nominally in control of the whole country, but whose writ effectively runs over only a small part of the country. The rest will be in the hands of warlords and drugs barons.

The unwillingess of leaders in the US and UK in particular to accept that is prolonging the tragedy and leading to the continuing loss of UK troops on what seems to be virtually a daily basis.

If we have learned anything from recent history, it is surely that military might cannot impose a solution in situations like this, and that we must, eventually, sit down and negotiate with the various parties involved. Until Cameron and Obama recognise that, there is no end to the killing in sight, and upbeat messages are just sound bites.

Thursday, 10 June 2010

Red, White, and Blue

I've never been a fan of football. In fact, I don't think I've ever watched a whole football match from beginning to end in my life. When I was a small boy, watching the Swan Stars play on the Murch Field in Dinas Powys consisted of spending ten minutes on the touchline before we all got bored and went to kick around a ball of our own in a far corner of the field.

So no-one will be surprised if I don't particularly suffer from world cup fever. I don't think that I've paid any attention at all to the world cup since 1966.

I didn’t pay a lot of attention then either, to be honest, but my youngest brother did manage to collect a complete set of the little plastic coins of the England team's players which were being given away with petrol. That was quite an achievement, really, considering that we didn't have a car. Indeed, only about three families in the whole street owned cars, but one of those had no small children of their own, and were feeling kindly towards us…

I can still remember the song, though. World Cup Willy it was called, although a name like that would probably be taken to mean something rather different today.

Insofar as I and my friends supported any team at all, it would inevitably have been England. There simply wasn't, in my part of the world at least, anything like the same awareness of the difference between England and Britain as there is today. For most of us in Wales, that has changed, and markedly so. But it still hasn't changed that much in England, and we don't always understand that.

So, when Cameron pointedly urged MPs from Wales, Scotland, and Northern Ireland to get behind the England team, I think that he really didn't understand the way that will sound to many of us. We've moved on; they haven't. He simply doesn't understand that his remarks are likely to have precisely the opposite effect to that intended.

As for me, well with the avowed lack of interest in the game itself which I outlined above, I won't be supporting anyone. But I usually feel a slight surge of pleasure when any small nation defeats a much larger one at any sport. I somehow doubt that Cameron would understand that, either.

Wednesday, 9 June 2010

What are we really missing?

There are a number of basic and very important facts in today's front page story in the Western Mail. There are also a few assertions which are not facts and which need to be challenged. And the headline is a complete non-sequitur.

The headline, like much of the story, seems to be based on the assumption that high earners and wealth creators are almost interchangeable terms. They are not.

Certainly, there are high-earning entrepreneurs who do create wealth, but not all high earners fall into that category. And low-earners can create wealth as well.

There are other high earners who accumulate wealth, mostly by redistributing it from other people into their own bank accounts. Then there were the high earners in the banks and hedge funds who managed to destroy a lot of our wealth by their actions. And finally there are high earners working in the public services. More of any of these might not actually be the answer to anything.

The other myth which needs to be challenged is the idea that becoming wealthy is the same as creating wealth. It is not necessarily thus.

Wales certainly does need to create wealth, in the sense of increasing our overall collective wealth and our levels of GDP per head. That doesn't necessarily involve ever greater levels of inequality, though, and to suggest that it does has more to do with ideology than economics, as does the underlying assumption that 'becoming personally wealthy' is the only driver of economic activity.

The fact that Wales has a comparatively low level of income inequality is actually something which I welcome; the gross levels of inequality which permeate the world in general are a major part of the world's problems, not part of the solution.

If we are to solve Wales' undoubted economic problems, we need to make sure that we understand what they are. A lack of billionaires isn't one of them.

Tuesday, 8 June 2010

Two legs, four legs

Around a quarter of the workforce in Wales is directly employed in the public sector. Nobody doubts that cuts in public expenditure will reduce the number employed in the sector, although by how many is still an open question. It would be a mistake to assume that the private sector will somehow 'pick up the slack'. It would also be a mistake to assume that the private sector will be immune to public sector cuts. It's not always straightforward to differentiate between the two sectors.

As an example, I work freelance through a limited company which I use to invoice customers, pay my own suppliers, and pay myself a regular salary out of irregular income. Very private sector. But a lot of my work comes from the public sector.

Sometimes, I get work passed on from other companies which have sold more services than they are able to supply in-house. Those companies are also very much in the private sector – but an awful lot of the end customers are in the public sector.

It's one small illustration, but there are many thousands of employees in Wales who appear to be working in the private sector but who are actually heavily dependent on public expenditure for their livelihood.

My point is two-fold. Firstly, if anyone working for a private company is sitting there thinking that public sector cutbacks will only affect other people's jobs, they may well be deluding themselves. And secondly, we need a better understanding of the complex relationship that exists between sectors in our economy, rather then the Public Bad, Private Good mantra which many seem happy to chant.

Monday, 7 June 2010

Base motives

The response of the Lib Dems and Conservatives to any suggestion of holding the referendum on further powers for the Assembly on the same date as the Assembly elections was pretty hostile. To the point, even, of threatening not to support holding the referendum at all unless it could be guaranteed that the two dates would not clash.

The main reason given, as I recall, was that it would be impossible to organise cross-party support for reform at a time when the parties were involved in an electoral contest with each other.

It's interesting therefore that the same parties seem to be moving in the direction of holding a vote on AV on the same date as the Assembly election next year. The reason given by 'senior Lib Dems' is that that would give them the best hope of achieving a yes vote. That sounds awfully similar to the sort of base motive which they found so unacceptable a few short months ago.

In one case, getting the right result is apparently more important than keeping the campaigns separate; in the other case, the opposite applies.

Friday, 4 June 2010

Exporting jobs

It's not often that spam e-mails attract my interest, but one I received yesterday did. It was advertising this event, a conference to help the private sector to 'Prepare Now for the Coalition Government’s Significant Push on Outsourcing'. The e-mail also said that the event "will examine various outsourcing models (including off-shoring)".

I know a little about outsourcing. I found myself 'outsourced' in 1996, and then sat on the other side of the fence when I went on to manage parts of transition projects, as my new employers helped other companies to 'outsource' their IT in our direction.

In theory, the process allows organisations to concentrate on their core business – the bit that they're allegedly best at - and let experts in other fields take over the running of the rest. In theory, it allows the companies to which work is outsourced to gain benefits from economies of scale as they combine operations from a number of different organisations into larger teams, and share expertise. And, again in theory, that allows them to 'share' those savings with the outsourcing organisation.

The practice doesn't always live up to the theory of course. The companies taking on the work and staff, unsurprisingly, have more experience in drawing up the contracts and service level agreements than do their customers. And once the service to be provided is tightly defined, it's not unknown for the customer to find that 'contract variations' are expensive animals.

It's not going too far to suggest that, sometimes, it's the contract variations which make all the profit, after the base contract has been sold as a 'loss leader'. Such variations also make it difficult to know whether the original employer has actually saved money or not - they've often paid less for the defined service, but more by the time the 'extras' are added in. Whether there are real 'savings' often depends on how the numbers are presented – but I suppose that is what bean-counters are for.

There are other ways in which the contractors can squeeze profit out of the situation as well. One is by working the employees harder – more hours for no more pay, for example - and another is by worsening their terms and conditions. The second is supposed to be prevented by TUPE regulations, but staff wastage over time combined with new recruitment can reduce the average staff cost without breaking TUPE rules. And TUPE rules themselves are not as insurmountable as some believe.

The other aspect of all this is 'off-shoring'. It means taking a service currently provided by staff in the UK, and transferring it to another country, where labour costs are lower. There's no doubt that there are direct savings to the customer organisation and increased profits for the contracting organisation - but what about the wider economic questions?

If the staff made redundant are snapped up by other employers at similar rates of pay to those they previously enjoyed, then there can be an overall plus to the UK economy. But if they end up claiming JSA, then the 'savings' made by one government department can quite easily turn into increased expenditure for the DWP.

Clearly, there are those in the private sector who believe that government spending cuts will create new opportunities for off-shoring, and they will rush to seize them. But do we really want government to be saving money by exporting public sector jobs, which is effectively what this would mean? It'll be interesting to see how Conservative and Lib Dem apologists explain why this would be in the national interest.

Thursday, 3 June 2010

Capital Gains and tax avoidance

I'n quite enjoying the spectacle of Tory backbenchers getting het up about proposed changes to Capital Gains Tax. It's one of the policies insisted on by the Lib Dems – and goes directly contrary to what the Tories themselves would otherwise have done, so I can understand the backbench frustration.

Part of the problem with the debate on the substance though is that the two different viewpoints are based on very different perspectives on the issue.

Plaid, like the Lib Dems, called for an increase in the rate for Captial Gains Tax. We actually argued that it should be set at the same rate as income tax, and subject to the same single tax free allowance. The principle behind that was, very simply, that 'income is income', and should be taxed as such.

We were mindful of the way in which the differential rates of tax were leading some people (hedgies, for instance) to take their income in the form of capital gains, which means that people with a very high income end up paying tax at a lower rate than the most low-paid in society. It's a practice which costs the Treasury around £1billion a year in lost revenue.

Those objecting to the change seem to be doing so on the basis that it hits long-term savers, including those who have invested to fund their retirement. I'm not entirely unsympathetic to that position, but I somehow doubt that there is an easy way of differentiating between the two different things without creating more loopholes which those who simply wish to avoid paying tax would seek to exploit.

Wednesday, 2 June 2010

Strategy and implementation

I've been reading the Welsh Government's strategy for Welsh-medium education. Like most of the government's strategies, it's full of fine-sounding words. How about this, for instance: "We therefore expect local authorities in which there is a choice between Welsh-medium and English-medium provision to identify how they will provide sufficient and appropriate places for children whose parents/ carers desire then to have Welsh-medium education".

I can't find any clause which excludes Carmarthenshire from this requirement, although they have clearly been excluded from it by the government. Nor can I find the clause which says: "and after you've been working on the plans for two years with our full knowledge, we can then reject them on a whim", although such a clause clearly applies in the case of Cardiff.

I was glad to see that they do recognise that the term 'bilingual provision' is used to mean a wide range of different sorts of provision. Looked at in detail, the range is so wide as to make the term pretty much meaningless in practice. The killer line in what they have to say on 'bilingual settings' is that "Bilingual provision, therefore, does not always ensure that an individual becomes a bilingual speaker".

It's true, if something of an understatement – the reality is that 'bilingual provision' as seen in much of Wales hardly ever results in a child who was not already fluent in Welsh becoming a fluent speaker of the language. But it's a fact about 'bilingual provision' which authorities are rarely willing to spell out to parents. If they did, the demand for true Welsh-medium education would likely increase further.

Their strategy requires education authorities to factor in 'the additional demand which often appears when a new and convenient Welsh-medium school is opened'. But that's a meaningless exhortation if authorities are simply allowed to ignore the base demand in the first place.

As with so many government 'strategies', I was left with the impression that the production of a strategy is seen as an end in itself, rather than a basis for implementing meaningful change. I'd be delighted to be proved wrong, but I won't hold my breath.

Tuesday, 1 June 2010

Planning for schools

There's been a lot of analysis and discussion of the decision taken by Carwyn Jones on schools in Cardiff. Syniadau in particular has looked in detail at the rationale given and why it was fundamentally flawed.

The decision was one taken by the First Minister himself, and – officially at least – it's in the nature of a quasi-judicial decision by the minister on a proposal put to him by a council, rather than a political decision which one would have been expected would have been discussed by ministers in advance.

Others have imputed political machinations and motivations – I'm prepared to start from the assumption that there has been no political interference. But that doesn't mean that the decision came from nowhere - the case would have been looked at in detail by the relevant officers who would have presented their views to the minister before he made his decision.

And that's the part that concerns me most. The education department in the Assembly seems to be remarkably good at producing fine-sounding strategies, but what happens when it comes to implementing them? The decision taken by Carwyn Jones seems to fly in the face of two important strategies which are, I thought, the policy of the Welsh Government.

The first is Welsh-medium education. The education department seems to, at best, not understand the demand for Welsh-medium education, and at worst to have a deep antipathy to it. I have noted before that the department has been actively colluding with Carmarthenshire County Council in preparing a scheme which deliberately ignores the demand for Welsh-medium secondary education in the Tywi Valley. The decision in Cardiff is not a stand-alone case.

The second is rationalisation of empty school places. The department seems to relish demanding that rural counties close schools with surplus places, but faced with a similar urban issue on their doorstep in Cardiff, their enthusiasm for resolving it rapidly evaporates.

I don't pretend that I know enough about the detail in Cardiff to judge whether the proposal put forward by Cardiff was the only solution, or even the best solution. But I do know that they'd been working on it for some time, and went through all the proper processes in submitting it. There surely has to be a better way of working through this sort of issue than allowing a council to work on a scheme for two years – the government department in Cardiff must have known what was being looked at – and then simply rejecting it.