Scottish £s

Tweet No one should ever have expected any report coming out of the UK Treasury to say anything other than that Scottish independence is a bad idea, and identifying a whole host of practical problems associated with the SNP’s proposal that Scotland should retain the £ sterling.  Equally, no one should have expected the SNP to do other than rubbish the report.  Honour satisfied all round.

However some of the points made by the Treasury have at least a little validity.  The Treasury isn’t always wrong just because it’s part of the UK government.  I’m not sure that the RUK could, even if it wanted to, actually prevent an independent Scotland from declaring the pound sterling to be legal tender.  As a parallel, there are plenty of places in the world quite happy to accept US dollars without having any input into dollar policy.  There’s the rub though – the RUK could indeed decide not to give an independent Scotland any input into its monetary policy.

Whether they would do so or not is another question; I suspect that the SNP is right to assume that this is little more than posturing at this stage.  Everything in the UK’s history suggests that pragmatism and negotiation will be the order of the day if Scotland votes yes – they are just trying to make sure that that situation never occurs.

Acceptance or otherwise of Scottish banknotes looks like a little bit of froth on the whole argument; it’s pretty hard to get them accepted anywhere outside Scotland at present, and that seems unlikely to change. 

The real underlying point arising from the Treasury report however is that Scottish influence on monetary policy for sterling would be close to zero in practice, yet that monetary policy would have a huge influence on the Scottish economy.  In effect, that means little change from where Scotland is today, but I can’t help thinking that “independence” would be more meaningful if Scotland were to break its link with a monetary policy primarily designed to suit the south-east corner of England.

The political rationale for keeping the pound sterling is obvious; it makes independence look like less of a change and less of a gamble, and therefore easier to garner support.  The economic rationale is a lot less obvious to me; I suspect that membership of the Sterling area would turn out to be, in the timescale of these things, a comparatively short phase before Scotland’s eventual adoption of the Euro; a commitment expected of new EU member states.

It’s for Scotland to decide of course; but if it happens there will be some useful pointers for Wales coming out of this debate.

Electoral longevity

Tweet In his speech to the Conservatives’ Welsh conference, the party leader Andrew RT Davies criticised the longevity in office of Labour ministers in the assembly.  He went so far as to compare them with ministers in the Eastern bloc during the Soviet period.

It earned him a headline or two, and I’m sure it went down well with the party faithful.  I’m not sure that it has much validity however.  If ministers are good at their job and if the people continue to elect them, what’s wrong with them remaining in office for a lengthy period?  Indeed, it has often seemed to me that the UK habit of reshuffling ministers every year or two is a convenient way of ensuring that real power remains in the hands of the Prime Minister (or First Minister in Wales) and the civil service, and that real change is obstructed.  Ministers are moved on before they get too knowledgeable about their brief.

It’s also true of course that with a limited number of members in the assembly, the extent to which the First Minister has a choice when it comes to appointing ministers is itself limited.  With a bare majority of half of the 60 members, the First Minister has 30 members from whom to choose.  It’s an entirely different situation from that in the House of Commons, where the prime minister typically will have 300 people from amongst whom to choose his or her ministers.  One way of overcoming that part of the problem would be to increase the number of members in the assembly – but that does not seem to be on the agenda for Mr Davies or his party.

The more significant question than the length of time for which they have been in office is the question of the competence of those ministers.  If they’re good at their job then leaving them in place is not a terribly bad idea; better than handing the jobs over to someone who might not be as good, just because they’ve been in post for a particular length of time.  And if they’re bad at their job then they shouldn’t be there in the first place; longevity does not enter the equation.  But competence is a question on which we will all have our own opinion.

It’s true, of course, that Labour has been in power continuously since the assembly was elected.  It’s equally true as a result of that that the Labour Party – including those long-serving Ministers - must take the predominant share of the blame for any failings over that period.

However we cannot escape the truth that the people of Wales actually elected the Labour Party to that position.  Andrew Davies may wish that were not true – I might wish it were not true – but it’s an inescapable fact.  In that sense any comparison with Eastern Europe is completely invalid.  Longevity in office is simply the result of the people’s verdict, whether we like it or not.

Never mind, it will never happen

Tweet I’m not entirely sure what purpose the Conservatives thought they were achieving by holding a debate in the Senedd this week on the building of a new nuclear power station in Ynys Môn.  It’s not a matter over which the Assembly has any power – and the Tories are usually the first to deride other parties for wasting debating time on matters over which they have no influence.

Whatever the intended purpose may have been, it did highlight the problems with energy policy in three of the four parties represented in the Senate.  (Lack of coherence from the fourth is entirely normal.)

For the Tories, it highlighted a willingness to take a step into the financial unknown in support of their big business friends.  It is entirely clear that no nuclear power stations will be built unless they are given public subsidies, guarantees on prices, or clear undertakings to underwrite risks. The fact that the extent of these costs is currently completely unquantified is apparently irrelevant as far as Tories are concerned.  They will be happy to see all of us, as taxpayers, contribute whatever it costs to enable the large companies involved to make their profits.

For Plaid, it highlighted, yet again, that the party’s energy policy has been turned into something of a shambles by short-term electoral considerations.  The party is, as I’ve commented before, apparently opposed to all new nuclear power stations except the ones that companies actually want to build.  And to read the local press in Carmarthenshire at least, it is in favour of all new wind powered stations except the ones that companies actually want to build. Whilst there are still some in the party prepared to argue the case for renewables – and Cynog Dafis had a paean of praise for wind farms in the latest issue of 'the Welsh agenda’ – overall the party’s stance on energy is now completely incoherent, especially when compared to the clear and unequivocal stance it adopted on energy in the late 1980s and early 1990s.

Then we come to Labour.  I thought that the comments by the Conservative AM Angela Burns were a little unfair.  Amongst other things she said that there had been little progress from the Welsh government in developing energy policy in Wales. But that’s completely untrue; there has been plenty of progress in developing policy on energy in Wales – the policy on energy produced by the One Wales government between 2007 and 2011 was an extremely good policy.  The problem with the Labour Party stance is that the development of policy and the implementation of policy seem to be seen as two entirely different things.  Policies once developed are put onto a nice big shelf somewhere and the government carries on as though it had never bothered to go through the exercise of developing them.

In any event, the Senate has now declared its support for a new nuclear power station in complete contrast to its previous support for an entirely renewables-based energy policy.  The only saving grace would appear to be that they are no more likely to be able to implement the new policy than they were to implement the old one.

Privatise the Windsors?

Tweet Much of the coverage a couple of weeks ago about the privatisation of the Search and Rescue service seemed to take more interest in the link with a certain William of Windsor than with the impact on either those gainfully employed in the service or what I suppose we should, in today’s terminology, call “service users” or even “customers”.  As a general rule, those whose employment is privatised get to keep their jobs; they just get transferred to another employer who will, over time and despite TUPE provisions, find ways of reducing their employees’ pay and benefits whilst maximising their own rewards.

In this case, it appears that William and his co-workers will be spared such a fate.  It set me thinking though – is the government approach to privatisation radical enough?  Why not for instance privatise the entire monarchy?

Much of the argument for retention of the monarchy is around the alleged tourist value – but might a private company be better at exploiting that potential?  I’m sure that there’s a company somewhere willing to take this enterprise on and run it at a profit.

Instead of us paying the Royals through the civil list, we can run it like the railways; the successful bidder will have to pay an agreed annual charge for the rights to the brand.  They’d have to charge for opening roads, bridges, and buildings of course in order to generate an income stream.  Some sort of sliding scale, perhaps, based on degree of royalness.

They’d also want to rationalise the estate.  There are far too many castles (and rooms inside them) for so few people; those which could not be made to turn a profit could be sold, or even demolished to make way for more profitable developments. 

Such residual roles as the monarchy possesses in the constitution wouldn’t be missed that much; it’s more pretence than real power anyway.  And if they want the brand leader to come and declare parliament open every now and then, I’m sure that they could make the figures show that it’s cheaper to pay a private company to send her than it is to employ her directly.  That’d be in line with normal government approach to the economics of privatisation.

This proposal could also solve all the problems and issues related to future succession as well.  I can’t see any way that any profit-oriented organisation would leave the future of the brand image to the vagaries of human genetics.  No, a privatised monarchy would soon rationalise that little issue.

The government claims that there are no sacred cows; so why should the monarchy be an exception?  Not so much "off with their heads" as simply taking the headcount off the public payroll...

Blunt instruments

Tweet A couple of weeks ago, in his column in the Western Mail, Dylan Jones Evans made the remarkable suggestion that the governments in Cardiff and London should use their purchasing power to buy enough electricity and gas at a low price to supply all pensioners, and then make it available at a special "vastly reduced" pensioners’ tariff.  Or, if the suggestion isn’t that remarkable, the source at least is.

For some reason, that particular column never actually seems to have appeared on Dylan’s own blog, although he’s usually pretty assiduous about replicating his column there.  I couldn’t find it on the Wales Online site either, but I did manage to find a news agency version here.

I don’t have any objection to the suggestion as such, although it does seem to me that there are one or two potential problems.  More mportantly, I don’t really understand why one would limit such a plan to energy and pensioners.  After all, it isn’t only pensioners who have difficulty with their bills; and it isn’t only the energy bills with which they have difficulty.

Given that pensioners currently make up about 1 in 6, but are projected to become 1 in 4 by 2050, if the state is going to buy enough energy for a quarter of the population to get it cheaper, why not go the whole hog, and buy enough for all of us?  And why not include telephones, and water, and…

And that brings us to what seems to me to be a flaw in an otherwise laudable idea.  The money saved by using government purchasing power to buy large quantities of energy from the energy companies has to come from somewhere. 

There are only two possibilities in reality.  The first is that the energy companies take the hit and reduce their profits by a corresponding amount.  I’m not sure that anybody really believes that that is likely to happen.  The second alternative is that the price paid by other customers increases by a corresponding amount; the ‘purchasing power’ of a small number of large buyers only really works if there are a large number of small buyers whose prices can be hiked to compensate.  And that seems a far more likely outcome.

I wouldn’t dismiss the idea on those grounds either.  It amounts to a redistributive policy in effect – those who can afford to, pay more, whilst those who cannot, pay less.  Not so much a stealth tax as a stealth redistribution. That’s normally a proposition that I’d be happy to support.  Whether intervening in the energy market in this fashion is the best way of achieving redistribution is another question – it’s a pretty blunt instrument compared to using the tax system to achieve the same result.

More of the same?

Tweet I have no argument with the statement by Michael Gove that the length of the school day and the timing and duration of school holidays, both of which were set at a time when agriculture was rather more central to the economy than it is now, should be up for consideration.

Nor do I disagree with his observation that some of the Asian countries with longer school days and terms are outperforming the UK significantly and consistently when it comes to educational attainment.

I’m not convinced, however, that drawing a straight line from those statements to his conclusion that the school day should be longer and holidays shorter is justified by hard evidence.  There’s a parallel of sorts with the Welsh Lib Dems’ continually banging on about spending as much per head on average in Wales as they do in England – it’s about grabbing hold of a simple solution without really understanding whether that solution actually addresses the problem.

I have seen no evidence that the real problem with education in the UK is simply that pupils don’t spend enough time in the classroom; and if that’s unproven, then merely increasing the amount of time that they do spend in the classroom is missing the point.  If, for instance, the problem is more to do with the nature of the educational experience itself, then it has to be at least possible that increasing the exposure to it will have no effect - and conceivably even have a net detrimental effect.  More of the wrong thing isn’t necessarily better for anyone.

Personally, I suspect that the difference has more to do with attitude towards education; the fact that some countries have both longer hours and better results could easily be down to that.  And politicians tinkering with the curriculum and the length of the school day does anything to address that underlying attitude problem.

For Wales, see England?

Tweet The Conservative opposition in Cardiff Bay last week criticised the decision by the Welsh government to buy Cardiff airport, and claimed that the purchase was a mistake.  They would, presumably, have preferred the government to stand aside and allow private enterprise to preside over further, and probably terminal, decline.

The criticism by both the Conservatives and the Lib Dems of the lack of any clear direction on the part of the government as to what it intends to do with the airport has a little more validity – but only a little.  In fairness (?) to the Labour government in Cardiff, I don’t think they’ve ever claimed that the decision to purchase was part of any grand plan or strategy; it was a purely pragmatic and opportunistic response to the situation which developed.  They purchased an airport with no clear idea of what they were going to do with it; and it seems that they haven’t inherited any real plan from the previous owners either.

Given that background, the assertion by the government that that the purchase will lead to a turnaround is, at this stage, probably as baseless as the opposition’s criticism.  It owes more to aspiration than to any concrete plan.  But my concern is more about the language being used and what that reveals about the underlying attitudes of all concerned to the Welsh economy.

Referring to the airport as the “National Airport of Wales” as seems to be increasingly common, is one of those concerns.  It is in Wales, certainly, and is now owned by the nation; so in a purely semantic sense the description is true.  The idea however that an airport in the south-east corner of Wales ever can or will serve the whole of Wales in any meaningful way is patently nonsense.

At one level that may not actually matter too much.  To the extent that air connections are important (and that’s another argument entirely), what matters is that they’re available and accessible – not which side of the border they happen to sit.  The north of Wales will continue to be better served by airports to the east of Offa’s Dyke than the one in Cardiff; short of improvements to North-South communications in Wales on a scale which the government does not even seem to be contemplating, that will continue to be the case for the foreseeable future.

But at another level, it does matter.  Government spokespersons have talked about the airport being central to the “Welsh” economy; and about overseas investors not taking seriously any “nation” which does not have good air connections.  In both cases, the context suggests that the "nation" is "Greater Cardiff" rather than Wales as a whole.  It betrays yet again an obsession with growth in that corner of Wales rather than any attempt to distribute wealth more evenly across the nation.

It mirrors the attitude of the UK Government, which is quite happy to see growth and wealth concentrated in the South East corner of these islands.  It’s an attitude which most Welsh politicians rightly criticise.  But why are they then so keen to replicate it on a Welsh level?

Following, not leading

Tweet Tony Blair’s very public message to Ed Miliband not to turn left is a timely reminder of the way in which new Labour became the natural inheritor of Thatcher’s political legacy.  But I found his message both confused and confusing.

He seemed to be stressing the need to show leadership, but warning against taking a clear alternative position on just about anything – as though the question of leadership can and should be completely divorced from the question of direction.

There was one part of what Blair said in particular, which very much distanced him – albeit probably unintentionally – from Thatcher’s approach, although not from her ideology.  He said that British politics has not moved to the left and that there is no appetite for such a move.  It is most un-Thatcher like to seek to follow, rather than lead opinion.

When Thatcher led Britain to the right during her period in office, she didn’t do so on the basis of any pre-existing consensus of which she merely took advantage.  She did so on a proactive basis.  And I’m not convinced that her election in 1979 had much to do with any shift in political opinion; it was more to do with despair and desperation at the dog end of the disastrous Callaghan administration.  It was an election which it would have been difficult for any Tory leader to lose, regardless of ideological position.

Within the limited political spectrum of UK politics, what Thatcher showed was that a determined Prime Minister could create political change and shift opinion rather than merely responding to pre-existing opinion.  Yet, doing that in the other direction is precisely what Blair is warning against.

A point which I’ve made many times in recent years is that you do not change public opinion – on any issue – by reflecting current opinions rather than challenging them.  Reflecting opinion helps parties to win elections, but it doesn’t bring about change.  Following Blair’s advice is the best way of securing the Thatcher-Blair legacy; but then I suppose that’s what he was trying to achieve.

Unpicking the legacy

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I’m a regular user of the railway between Carmarthen and Swansea.  But for the last two weeks I’ve been unable to use that rail service due to work taking place to redouble the track at Gowerton.  (MH at Syniadau has a nice picture of the new bridge here).  Today, for the first time, I’m back on the railway using the new bridge and track.  The timing is somehow appropriate.

It was in 1986 in an act of short-sighted vandalism that the government of the day decided to rip up the other track on that particular route.  I’m pretty certain that Margaret Thatcher never actually did say the words attributed to her in 1986 namely “A man who, beyond the age of 26, finds himself on a bus can count himself as a failure”, but it was certainly a reflection of the attitude of the government of the day towards public transport .

It is easy though, far too easy in fact, to blame one individual for taking particular decisions that we don’t like.  It seems to me that the real “triumph” of Margaret Thatcher, if such it can be called, was not so much in what she and her government did, but in the shift in the political climate which they brought about.  The wholesale adoption of many of the Thatcher government’s policies by Tony Blair and the rest of new Labour's 'modernisers' in the pursuit of power ensured that her legacy long outlasted her reign.

It has taken 27 years to unpick one small part of the legacy of that particular era.  How much more there is still to do. 

Drawing the wrong conclusion

Tweet During his visit to the Trident base in Scotland last week, David Cameron referred to the situation in North Korea (and Iran) as justification for the U.K.’s retention of nuclear weapons, and the government’s plans to upgrade those weapons.

It’s impossible to disagree with his assessment of the dangers of a nuclear armed North Korea (or Iran come to that), but to use that as a justification for maintaining a nuclear deterrent is a complete non sequitur.  It’s true that the world is probably closer to the military use of nuclear weapons than it has been at any time since the end of the Cold War, but what is notable is surely that possession of  a ’deterrent’ by other countries is actually failing to deter.  If anything, the situation in North Korea proves the opposite - the deterrent not only does not deter, it actually acts as a spur for other countries to seek to acquire nuclear weapons.

The whole principle of a “deterrent” rests on two major assumptions, neither of which appears to have any validity when dealing with a state like North Korea.

• Firstly it assumes that the leaders of the “deterred” state will calculate the benefits, risks and consequences of actions in the same way as the “deterring” state.  It’s tempting to say “on a rational basis” but it has never seemed to me that there’s anything particularly rational about the concept of mutual assured destruction; and rationality is itself relative.  Kim Jong Un is behaving perfectly rationally within his own paradigm; it’s just not the same paradigm as that of most of the rest of the world.
• Secondly, it assumes that the deterring state really would press the button; and again in the case of a state such as North Korea that is simply not credible.  If by some fluke, the North Korean military really did succeed in detonating a nuclear device on UK or US territory, does anyone really believe that Cameron or Obama would retaliate by ordering the mass killing of millions of Koreans?  I don’t have enormous faith in the underlying humanity of either man, but even I don’t believe that either of them could or would do that; most of the North Korean people are as much victims of the regime as would be those killed by that regime.

So if nuclear weapons don’t deter those whom they are supposed to deter; and if we don’t believe that the government would ever actually use them, what are they really for?  Why are all three UK parties so keen on retaining nuclear weapons, even if one of those parties wants to retain them on the cheap and in a less effective form?

The answer has more to do with an outdated concept of the U.K.’s place in the world than with any actual potential military use.  There is a residual belief that the UK is one of the world’s great powers, and that nuclear weapons cement that fact in reality.  It’s a very expensive way of trying to maintain a fiction.

Tolling the roads

Tweet The alacrity with which both the UK Government and the Welsh Government have denied any plans to charge tolls on any new motorway around Newport leaves an unanswered question about who leaked the suggestion that they were, and why.  Flying a kite, perhaps, to see what the reaction would be?  But whose kite? 

The incident also exposes more than a little hypocrisy amongst Welsh politicians.

A number of those now decrying the idea of tolling any new motorway have previously said that they favour retaining tolls on the two Severn bridges, and setting those tolls at a level which is higher than the maintenance costs in order to generate an income stream which can be used for other capital projects.  It’s a tax by any other name.  I struggle to understand why a toll to get round one obstacle (the Severn estuary) is such a good idea that it should be turned into a tax, whilst a toll to get round another obstacle (Newport) would be unworkable and an economic disaster.  At the very least, they're being inconsistent.  One is left wondering if the only great 'principle' behind their position here is 'What can we get away with?'.

Tolls for using roads are certainly an unpopular idea, but I'm not convinced that they’re always and necessarily a bad idea.  It depends on the economic hinterland and what we’re trying to achieve.

In an economy which is highly centralised and which depends on long supply chains and frequent long distance movement of goods and people, and in which some areas are central whilst others are peripheral, road tolls will never look sensible when viewed from the perspective of the periphery.  It’s just another cost which stands in the way of economic development in Wales.  And since that is the only economic model of which most of our politicians can conceive, any tolls look like a bad plan for Wales.

On the other hand, if we had a more localised economy, or at least a plan to move towards one, tolls which disincentivised long centralised supply chains could actually help to drive things further in the right direction, by making it cheaper and easier to stay local.  Tolls can also encourage people to use other modes of transport (and indeed, it's surely at least possible, if part of the problem at Brynglas is the high percentage of vehicles using the M4 for short local trips, that a toll on the relevant part of the existing M4 might actually do quite a lot to relieve the pressure without building a very expensive new road).

So for me, the problem with the proposal for tolls (or non-proposal as it turns out) isn't with the tolls themselves, it's with the economic model under which we live, and the utter unwillingness of the politicians to envision or pursue an alternative.  Change that, and my response might be very different.

But from either perspective, I still don't understand why charging a higher than necessary toll to cross a bridge is such a good idea when charging a toll elsewhere is such a bad one – that doesn't make sense under either economic model.  It’s amazing that so many politicians seem to be getting away with holding such a contradictory and inconsistent position.

Only joking?

Tweet Yesterday was that day of the year when we can never entirely believe what we read anywhere.

Peter Black tried his hand with this story about keeping tabs on AMs.  For me, it was too obviously an attempt at a joke.  No-one who knows anything at all about our AMs could ever believe that they would allow anyone to know where they are at all times.

Then we had this attempt to convince us that Jeeves was Welsh - or even worse, apparently, a Gog.  No, that one didn't work for me either.

I thought the best one was this one from the Welsh Government.  Outsourcing the management of the discretionary fund to an offshoot of an American private equity company with zero experience in the field?  No, pull the other one.  The only thing missing from the story was the 'revelation' that those running the scheme were Tory donors, so that part of the discretionary fund would end up in Tory Party coffers.

Fair play to the Welsh Government, and the Labour Party, for entering into the spirit of April Fool's Day.  They did get one thing wrong though - the story somehow went out a day early.  There's a serious danger that people might actually believe the story as a result.  But it really was a joke.  Wasn't it?