Wednesday, 23 July 2014

Words, not action

Amongst the reaction to the Welsh government’s decision to blow £1 billion worth of capital expenditure on one road scheme in the south-east of Wales, questions have been raised about how the government would be able to progress other schemes, including the Greater Cardiff Metro scheme.  It’s a good question, although given the strings attached to the way in which the Conservative/Liberal Democrat coalition in London has “allowed” the Welsh government to borrow the money for the M4; I’m not convinced that they would ever have been permitted to borrow the money for any other scheme - perhaps not even for the 'blue route'.
The UK government has always been clear that they were only permitting borrowing because they wanted this particular scheme to proceed (which makes the Welsh Lib Dems’ apparent opposition more than a little curious, even if it isn’t exactly unusual for that party to be both for and against policies).
One option for funding the Metro scheme is the use of European funding.  Cardiff is not actually entitled to that money but it’s been suggested previously that schemes which happen to benefit a greater area might be able to tap into such funding, effectively diverting them to Cardiff.  It’s a little bit like robbing the poor to pay the rich but there’s nothing new or original about that.
On the matter of the M4 itself, Gareth Clubb has done a very effective deconstruction of the objective “evidence” (or rather total lack of) for the government’s proposed scheme.  Whilst both the government and the CBI refer incessantly to the damage which the limited capacity of the M4 does to the Welsh economy, they have no facts to back that claim.  We are all, apparently, supposed to take the claim on trust because they say it is so.
In principle, of course transport bottlenecks will negatively impact on those economic activities (and thus those companies) which depend on transport; but the leap of logic from stating that obvious truth to building a six lane highway around Newport is far from being an obvious – let alone the only – solution.  And the concentration of attention and resource on one (comparatively small) area of Wales betrays an obsession with the idea that the Welsh economy is wholly dependent on (a) what happens in one corner of the country, and (b) on the link between that corner and England.  It’s not a version of the future which offers much to those of us in the west or north of the country.  Nor does it suggest any serious intention to rebalance the Welsh economy and promote more sustainable local economic activity across Wales.
All in all it tends to confirm that “sustainability” is something to be talked about ad infinitum; something which politicians can declare themselves passionate about when seeking ‘green’ votes.  But it isn’t really anything which requires them to take any action.


Anonymous said...

Doesn't it all rather tend to reinforce the point I made in one of your previous posts. Today's construct of Wales is simply not sustainable.

If Wales is ever to achieve independence it will result in at least two or more distinct and separate territories.

Austerity Britain has left an imprint upon us all, and especially so upon those working hard in the South. Not for much longer will they be willing to remain shackled to the 'language gazing, success hating' folk residing in some parts of the north and west.

Times are a'changing. We need to wake up and smell the coffee.

John Dixon said...

The short answer is 'no'; it reinforces no such thing. It does though highlight a point which I've made many times before - the political mindset in Wales is aping the political mindset in the UK, which is that the wealth and economy of one small corner is all that counts.

But things aren't that way out of any inevitability; success doesn't come to one area because the people in that area work hard whilst those elsewhere hate success, which is the sweeping and unevidenced generalisation which you make. Geographical differences in wealth and success are the result of human political and economic constructs. The problem is not that those constructs are unavoidable and cannot be changed, it is that there is a lack of political will to change them.

Anonymous said...

I certainly agree with you about 'human political and economic constructs'.

Here in North Wales we have a tremendous shortage of hospital consultants and suitably qualified GP's. Why? Because no-one who is qualified to work here really wants to work here!

Why not? Think of all the attention given to the Welsh language and think of the schooling options that no self-respecting parent would be willing to accept. And yet no-one is prepared to even tackle these simple matters.

Down and downwards. That's the spiral for North Wales. And it's self sustaining. Educate the people poorly and they don't complain. If they don't complain we can carry on with more of the same!

Now you see why those in the south want rid of us in the north.

John Dixon said...

More sweeping and unsubstantiated statements, I fear.

Shortage of qualified doctors isn't unique to the north of Wales, nor even to Wales as a whole. Nor is there hard evidence that language policies or schooling are the cause, although those opposed to the language will be happy to use it as an excuse for almost anything.

None of that, by the way, should be taken as an expression of support for the health or education policies being pursued by the Welsh Government, merely as an expression of scepticism that a causal link can be shown between those policies and the particular outcome suggested by you.

And, as for "those in the south want rid of us in the north", I can only repeat my usual response - where's your evidence?

Anonymous said...

Stripping every thing back to fundamentals, wht I don't understand is what the people taking out and therefore paying back the loan (i.e. The Welsh Govt.) are set to gain by this?

Usually if you take a loan out you have to have an income to pay it back. From a basic business point of view a loan should enable you (by making the necessary investment) to increase your income above and beyond what you have to pay back on the loan. The old speculate to accumulate.

However, even if we taken as given the extra investment and jobs that the new M4 is supposed to bring. Since corperation Tax, income tax, NI contibution etc. all go to the tresuary in London (And the WG is broadly against changing that status quo). All the financial gains will go to London with the WG left to pay the bill of the massive loan.

No one has yet explained to me how this makes any economic sense from a WG perspective and why they are there so keen to take it forward?


Anonymous said...

From an excellent post on the nature of Welsh Government decision making, your anonymous commentator (8.42 & 9.41) has managed to divert our attention and contributions (as always) to his (and I assume it is the usual suspect) completely unrelated private hatred of the Welsh language. His only objective when commenting here and elsewhere is to disrupt the calm and informed discussion of serious Welsh political issues, of which your site is an exemplar.

You are too courteous to ignore him John, but I'm not sure even your prodigious patience will result in anything more than a circuitous ramble around the same old chestnuts. It would be such a shame to see your site, the gold standard of intelligent commentary on Welsh politics, descend into the mire of trollism.

Phil Davies

John Dixon said...


If governments only invested money which would result in direct financial benefit to those governments, I suspect that we'd see a lot less public investment! It's not the direct return to the Exchequer which drives investment decisions, but a belief that there is a greater public good arising.

In this case, the Welsh Government believes, or at least says that it believes, that building the M4 relief road will generate or 'safeguard' jobs, and thus boost the Welsh economy. The questions are (a) whether that belief is a rational one, and (b) whether this is the most cost-effective way of achieving that objective. Personally, I doubt both of those propositions; and it is noticeable that neither government has produced very much by way of hard evidence in their support.

There is a wider question in what you raise: in deciding which government should pay for a project like this, shouldn't there be more consideration of which government will get any additional revenue which might arise? It's a good point, and underlines, not for the first time, the unbalanced nature of the devolution settlement which created a spending body with no control over its own income.

Anonymous said...

Has Phil Davies got a problem with people expressing an opposing point of view?

Seems so.

Anonymous said...

I take your point about governments investing for the the greater good of the public. But this is usually done because the govt. has an income stream to pay off that loan. Basically a mechanism for the distribution of wealth.
The WG is in a slightly unique position of taking out a massive loan. with at present no real means to pay it back (other than earmarking a portion of their annual budget from London - i.e. cutting services elsewhere). Their is no mechanism for the WG to financially gain from the spending of the loan and the positive social impact it'll have is at best questionable (without mentioning the negative environmental implications).
Despite this the WG seems bafflingly keen to press ahead.


Anonymous said...

Dai Twp 10.33

Irrespective of the fact that the WG will not receive any increased revenues from increased economic output (with the exception of increased business rates going to local authorities), it is nonetheless (correctly in my opinion) measured by the electorate and media on its success in growing the Welsh economy. Whilst the former would be even more of an incentive to grow the economy (and therefore a good idea in my opinion) the latter is still important in the absence of meaningful taxation powers. It may not control any macro-economic levers but it does have a £15bn budget and has many other means by which it can improve the economy (such as the new borrowing powers for capital projects). Its accountability for the Welsh economy may well be partial and shared with the UK Government but it is very important that it has that accountability.

The key question that John raises is whether this investment decision is the right one. To a certain extent the WG has the luxury of not worrying about a direct return in tax revenues at the moment and can focus on medium and long-term growth strategies. If Wales were your 'business' would you put all your eggs into a 'gold-plated' Newport bypass basket (since they have chosen the most expensive option)? When the true measure of your success is whether you can bring Wales from being 70% of AVG UK GDP to 80% or 90% over 10 or 20 years, is that what you'd choose to invest in? They're expecting an awful lot of economic growth purely on the basis that people won't need to queue at the Bryn Glas tunnels for 10 or 15 minutes any more...

It's a rather 'brave' decision, as we used to say - tongues firmly in cheeks - in the corporate management world.

Phil Davies