Borthlas

Only the rich need apply

2012-01-27T18:56:00.002Z

It appears thatsome in government circles are starting to feel a little disappointed that mostof the names emerging for the elections to the new posts of PoliceCommissioners are past or present party politicians. Apparently, they had really hoped to see some strongindependent characters coming forward, rather than simply having a traditionalparty battle.

I can understandthat hope – after all, possible politicisation of the police is one of the mainplanks of opposition to their proposals. But I cannot understand why they might have thought for a moment thatthere would ever be a significant number of non-aligned candidates.

Elections are thebusiness of parties; parties are structured and organised precisely for thatpurpose. They are also funded for thatpurpose. And the areas covered by policeforces are large, much larger than the average constituency; the chances of a one-person band ever communicating effectively with a significant proportion of the population are slim.

Why would anyonethink that there would be many independent candidates who would be able to organise an electioncampaign over such a large area on anything like the same basis as a politicalparty? And how would they fund it –unless they are significantly wealthy in the first place? I cannot imagine how anyone involved inpolitics could ever have expected the elections not to be dominated by party politicalcandidates.

Friends like these...

2012-01-26T19:37:00.000Z

I’ve long-knownthat politics is a business in which friendship and loyalty count for little,but I was still surprised at the candour of Peter Hain’s description of theevents surrounding the replacement of Ron Davies as Labour’s candidate forFirst Secretary.

Hain was completelyconvinced, he tells us, that Rhodri Morgan was the right man for the job; rightfor Walesand right for Labour. However, insteadof supporting Rhodri, he ran Alun Michael’s successful campaign. He did this, he says, because AlastairCampbell told him that it was ‘what Tony wanted’.

Perhaps Hain expectsRhodri, Labour, and Walesto forgive him, now that he’s been so candid - the repentance of a sinner, asit were. I suspect that it will justmake his ‘friends’ – if he has any left – even more wary about theirbacks. With friends like Hain, theyhardly need political enemies.

What is to be done?

2012-01-25T16:18:00.001Z

I quite enjoyedDavid Davies’ little outburst yesterday about the likely outcome from the SilkCommission. It’s a real problem, isn't it, whenopinion is moving so strongly in one direction that it becomes difficult tofind anyone willing to put the opposing case.

I suspect that hissuggestion – just publish the report now, and scrap the consultation andevidence taking – was born of frustration and intended to be sarcastic. But what would he have people do? Ban most of those supporting further powers from giving evidence so thatthe committee only hears an equal number of fors and againsts? Fund some new groups to argue against to tryand even the numbers out a bit?

In fact, histongue-in-cheek suggestion may well be the best and most sensible one, even ifhe’s likely to be the last one to recognise that. On those issues where there is an overwhelmingconsensus, perhaps moving straight to a recommendation and decision really isthe easiest way to proceed. After all, the only reason for holding long drawn-out commissions to consider matters is to appease the vociferous minority who want to stop progress. People rather like David Davies, in fact.

Somebody must do something

2012-01-24T14:03:00.000Z

The collapse ofPeacocks is a tragedy for all those who work there, and a major blow to theWelsh economy, given that Peacocks is one of the few large companies to beheadquartered here. Whatever happens byway of salvage, it seems inevitable that what emerges will be a smaller andleaner company – with a much reduced workforce.

It isn’t the onlycompany to be facing difficulties of course; many others have already been hit,and we can be certain that more will be hit in the future. The reaction from opposition politicians (andit really doesn’t matter which party or parties are in government and which inopposition) is that somebody must do something.

The somebody isinvariably code for ‘the government’; and given the essential similarity ofeconomic policy of the government and the opposition, the something inevitablymeans the use of public money, since the differences in economic policy betweenopposition and government are too small and too long term to make a differenceat the point at which a company has failed.

As an instinctiveinterventionist, I don’t see anything wrong, in principle, with the use of publicfunds to rescue private firms and save jobs and livelihoods. It’s the practice which concerns me, not theprinciple.

It is a fundamentaltenet of the capitalism whose image the UK parties are all busily trying to burnishthat capital gets rewarded for taking risk, and that capital gets the lion’sshare of the rewards of success. Thequestion is over how much risk they’re really taking if public funds are beingused for rescues when a capitalist enterprise fails. It’s another example of privatised rewards andsocialised risk. And it often looks asthough the biggest risks of all are borne by those who have little choice butto work for a capitalist enterprise.

The danger in usingpublic money to bail out private companies is that governments are usuallyasked to step in only after the banks have already decided that the risk ofdefault is too great for them to loan the money. I’m not sure on what basis anyone believesthat governments are better placed than banks to predict the success or failureof an enterprise; it seems a highly unlikely proposition to me.

Perhaps rather thanlending or giving money direct to the companies to bail them out, thegovernment might think about lending or giving it to the employees for themto take a growing stake in the companies for which they work. It would not only give them a greater stakein the success of the enterprise, but it would also start to rebalance theeconomy away from a pure capitalist model. After all, Marx said that capitalism contains within itself the seeds ofits own destruction. All we need is themechanism to give effect to that, and the failure of capitalist company aftercapitalist company might even be creating opportunities if we look for them.

Diverting attention

2012-01-23T15:07:00.000Z

The Labour andConservative leaders seem to be vying with each other to see which can offerthe most trenchant critique of the style of modern-day capitalism. It will never lead to any real action,though. Once they’ve milked this one forall the sound bites they can get, they’ll just move on to something else.

And, for all hisbluster, Cameron seems either unwilling or unable even to intervene inremuneration decisions at RBS, despite the Government owning 83% of thecompany. How serious can he really beabout empowering shareholders?

More significantly,an argument about the style of capitalism avoids any discussion about thesubstance. With capitalism suffering anenormous crisis, and the dependence on borrowing and growth shown to beunsustainable, it’s not an alternative style that we need, but an alternativemodel.

Sure, as itssupporters regularly trumpet, capitalism has been a huge driver of affluencefrom which we have all benefited. EvenMarx recognised that. But the idea thatit can or will continue indefinitely owes more to faith than fact. And to point to the benefits withoutdiscussing the disbenefits is to arrive at a very unbalanced conclusion.

Capitalism may wellhave driven growth and affluence, but it has also driven rising levels ofinequality, and by externalising costs in pursuit of private profit has lefthuman society as a whole with the costs of the environmental damage caused byrampant growth and exploitation of natural resources.

Criticising fatcats and boardroom pay may attract media attention, but it’s a diversion formthe real issue, which is about how we move from a global competitive economicmodel to a local co-operative one. It’sabout fairness in allocation of finite resources rather than power and strength. And it means the sort of changes whichTory-Labour politicians will never propose.

Funding gaps and outrage

2012-01-21T09:50:00.001Z

The howls of outrage from those more interested in having a stick with which to beat the government than they are in either statistics or education are hardly a surprise. The Lib Dems, in particular, have been obsessed for years with the alleged 'funding gap' between schools in Wales and schools in England (although both Plaid and the Tories have been known to join in from time to time as well).

The lack of information this year can hardly have come as a surprise to anyone, however - not if they'd read beyond the headlines last year, at any rate. Because last year's report (available here) clearly stated:

What happens next year?
If England are able to provide education outturn expenditure for 2010-11 on a comparable basis with the new local authority responsibilities removed then the outturn data could be compared.
The position of comparability of budgets for 2011-12 is not yet clear due to further changes in the way education is funded in England but we will be exploring this with the Department for Communities and Local Government.

I would have hoped that the absence of a meaningless high level comparison of the Welsh average and the English average might lead people to start to concentrate on the substance of the education problems in Wales instead. Hoped, but not expected.

Graduate premiums

2012-01-19T19:41:00.001Z

This report from aninvestment advice company makes for interesting reading. It’s long been claimed that possession of auniversity degree leads to a boost in lifetime earnings, but the level at which this report setsthat boost is much higher than previous estimates. Government ministers have talked in the pastabout the premium being around £100,000, but this report suggests that it’s atsix times that level – a cool £600,000.

Now, assuming thatthe recipients of this extra salary manage to avoid higher rate tax throughouttheir working lives, and that the whole amount is therefore ‘only’ to be taxedat the UK basic tax rate of 20%, that means that the average graduate will pay£120,000 more in income tax over his working life than the averagenon-graduate.

One of the mainarguments for tuition fees is precisely that graduates earn more and shouldcontribute more as a result; but these figures show the extent to which theyalready do that through the tax system. Those of us who’ve argued that from the outset will feel vindicated bysuch a finding; why charge them an extra £27,000 on top of the extra £120,000 they’realready paying?

There’s a sting inthe report as well though, because the figures I’ve used so far are based onaverages over a working life. The reportalso says that, unless a graduate starts his or her working life on a salary ofat least £50,000 (and the average first year graduate salary is a mere £19,653by way of comparison), then the terms of the student loans are such that thegraduate is unlikely to earn enough to pay off the loan and added interest, andthe government will end up writing off the greater part of the debt.

So, after saddlinggraduates with debts for the first 30 years of their working life, thegovernment will end up writing off somewhere “between £30,649 and £64,935 for every full-time university student whograduates in 2015”. That’s more thanthe three year cost of fees at £27,000, because of the interest added. Far from transferring the cost of HigherEducation from the state to the individuals, the Government will, to a significantextent, merely have deferred the expenditure for 30 years.

This isn’t so muchreducing the deficit as putting part of the debt off balance sheet; hiding itaway as an unstated liability for the future. It may not be on the same scale, but it’s not too far removed from someof the accounting practices which Greece used to hide the true extentof its deficit.

I’ve never beenconvinced that the policy made sense educationally, or that it was fair; andI’ve also been concerned that it would deter bright students from lessprivileged backgrounds from studying. If the figures in this report are anywhere near accurate, it suggests that the policy doesn’t even stack up in economic terms either.

Internal funding gaps

2012-01-18T10:40:00.001Z

I’m always a littlewary of any newspaper stories where the lead-in uses the words ‘we canreveal’. It’s usually followed not byany great revelation of something secret, but by a story on a widely-availablereport. So it was with this story inMonday’s Western Mail.

It shows that thedifferences in amounts per pupil passed to different schools in Wales – evenwithin the same authority – are bigger than the headline gap between the Welshaverage and the English average. Butthis is no revelation; it’s not even a surprise.

It’s a point that Imade on this blog some months ago; the obsession with comparing overall Welshaverages with overall English averages in order to score a political point hasbeen blinding people to the much greater internal differences, although at thatpoint I didn’t have figures to the same level of detail. It also underlines another point that I’vemade a number of times on this subject – there is no obvious causal linkbetween amount spent per pupil and the level of educational success achieved bya school.

Looking at thedetail of the figures, they do suggest that smaller schools spend more per headthan larger schools; some might see that as economies of scale, others as anurban/rural split in the cost of providing education reasonably close tohome. They certainly do not suggest thatsimply increasing the amount of money passed to schools across the board isgoing to solve any of the problems facing the education system in Wales.

That’s not to saythat schools couldn’t do more with more money; merely that it doesn’tnecessarily follow that they would. Ifwe want to sort out education in Wales, we need to do a lot more analysis thansimply dividing budgets by numbers of pupils and highlighting the ‘gaps’ whichresult. That is just a diversion fromgetting to grips with the real problems.

Terms of the divorce

2012-01-17T11:26:00.001Z

Whilst the laws andunwritten constitution of the UKclearly support the view that Scottish (and the same applies to Wales) Independenceis a matter which the UK Parliament would have to ‘allow’, I’ve never been inany doubt that the decision belongs to – and will be taken by – the people of Scotland. Ultimately, ‘sovereignty’ cannever be withheld from a people who wish to reclaim it, no matter what any lawmay say. (I suppose that the use ofmilitary force might provide an exception to that, in the short term at least;but it’s not a realistic option in the UK context.)

Some have tried tocompare independence to a divorce, arguing that that makes it a matter for both(or even all) parties. It’s not a whollyunfair comparison; but those using that argument should bear in mind that whilstthe terms of any divorce are indeed a matter for negotiation – or evenacrimonious argument – the fact of the divorce can be decided by one partneracting alone.

Clearly, thoseopposed to independence have every right to seek to persuade the people of Scotlandthat divorce is a bad idea. They evenhave a right to be awkward and petty about the terms of the divorce, although I’mnot sure that it would be the wisest thing for them to do. But arguing about the right to a divorce isan irrelevance; it’s missing the point.

If we start fromthe premise – as I do – that ‘sovereignty’ belongs to all of us, individuallyand collectively, rather then being bestowed miraculously on the head of state,then it follows that we can change the way that we choose to exercise thatsovereignty. We can choose how much toshare or pool at community level, at national level, or at international level;and we can change those decisions as and when we like.

It’s a verydifferent model from that under which the laws and constitution – and those whoenjoy power under them – currently operate; but those laws and constitutiononly operate as they do with the consent of the governed, even if we don’talways realise that. (Perhaps if we didrealise it more often, the governed might withhold consent more often as well.)

Thus far, I suspectthat most nationalists would agree with what I’ve said, even if ‘unionists’(perhaps ‘constitutionalists’ would be a better term here) might disagree. How far do we take it though – because I’d goa lot further.

Part of mydifficulty is that I find it hard to define a ‘nation’ in terms that are not,in the final analysis, based on subjective self-identity, which also means thatI reject the idea that people can have one and only one ‘nationality’ in anexclusive and neatly packaged way. Forme, Walesis a nation because sufficiently large numbers of Welsh people believe it to beso. For sure, place of birth, history, territory,descent, community, family and language all come into the process of arrivingat that self-identity, but nobody can have that self-identity forced upon them.

It follows fromthat that I’d challenge the idea that ‘sovereignty’ is something which can onlybe exercised at a ‘national’ level. Whatif the people of Ynys Môn (I pick on them because of their neat island status –I could equally have picked on the ‘down-belows’ of Pembrokeshire, or even theinhabitants of Upper Cwmsgwt) were to decidethat they wanted to exercise full sovereignty – independence for Ynys Môn?

I can think of lotsof reasons why it might not be the brightest idea ever, but I cannot think ofany reason why anyone else should be able to refuse it, if it was what thepeople wanted. And that has surely to bethe driver for what power we individually and collectively cede to whichinstitutions at the different levels – the will of the people. If sovereignty truly belongs to the people,there can be no argument against them exercising it at whatever level theychoose.

There is anotherside to sovereignty though, and that’s about accepting the consequences. The relationshipsbetween sovereign states can only be decided bilaterally or multilaterally; notunilaterally. It’s back to the questionabout the terms of the divorce. Scotland, Wales – even Ynys Môn – can becomeindependent if they wish, but there are consequences to that.

To date, thoseconsequences have often been discussed in axiomatic terms. For as long as it was little more than atheoretical possibility, it’s been possible to make sweeping statements aboutthe economic consequences with little solid basis in fact. The developing situation in Scotland willinevitably shed more light on the detail, and lead to more rigorous challengeof some of the underlying assumptions and high level numbers which have been thrownaround – on both sides.

That can only be agood thing. I remain as convinced that ‘smallis beautiful’, and that the advantages of exercising more power locallyoutweigh the disadvantages, as I was in the 1970s. The trend to increasing globalisation sincethen has only served to reinforce that view. Welsh self determination is a step along that route rather than an endin itself, but it has often felt as though devolution has diverted attentionfrom consideration of that step. Thedebate in Scotlandbrings it very much back into focus; we need to have the courage to follow wherethey lead, not continue to hold back.

The time isn't right...

2012-01-16T17:12:00.001Z

I heard it arguedagain last week that, at a time of economic difficulty, people are onlyinterested in economics, not in constitutional change. In the sense that people whose jobs are underthreat aren’t queuing up to demand independence, it’s true, of course. It doesn’t follow, however, that debatingconstitutional change at a time when people are only worried about their jobsis the ‘irrelevance’ which some claim it to be.

Presenting theconstitutional debate and economic policy as though they are alternatives, onlyone of which can be discussed at any one time, is a false choice. I can understand those who do not want morefundamental change arguing this way, but it seems completely incongruous to mefor anyone who claims that they want to see fundamental change in the long termto be trying to argue that such change is irrelevant in the shorter term.

There are threemajor flaws with such an argument.

The first is that,if independence for Walesdoes nothing to address the economic problems faced by Wales then whatis the point of Independence? Therewould be little point all in having independence if it is not part of the solutionto those economic problems. I certainlywould never have advocated it as the way forward for Wales unless I wasconvinced that relocalising the economy and taking the decisions ourselves wasmore, rather than less, likely to resolve the issues.

And if it is partof the solution to those economic problems, then times of economic difficultyare precisely the times when the case for more fundamental change should be putmore forcibly, not kicked into the long grass.

The second, andprobably more serious, flaw is that any politicians who argue thatconstitutional change is not relevant to the immediate economic situation areof necessity constraining themselves to proposing solutions to the economicproblems which can only be implemented under current structures – which effectivelymeans in Westminster. And it means thatthe solutions which they propose are never going to sound – or be – very differentfrom those put forward by HM Government and HM Loyal Opposition.

The third flaw isthat the proportion of people holding the view that we need change in the waywe are governed, not just change in the policies being followed, will neverincrease if the argument is not put. I’venever known any argument to be won by avoiding it.

Boundaries and protests

2012-01-12T20:29:00.000Z

The howls ofprotest from some quarters about the proposed new constituency boundaries wereentirely predictable, and had probably been rehearsed for weeks if notmonths. That doesn’t mean that they’reentirely unjustified, of course. Some ofthe boundaries look highly artificial to me, and seem to ignore geographicaland community links. It’s not a problemunique to Wales,though; merely more acute because of the greater proportionate change here.

The outcome is amore or less inevitable result of giving primacy to the argument that MPsshould have, as nearly as possible, equal numbers of constituents. It’s a difficult argument to counter, but itdoes depend to some extent on what we see as the primary rôle of MPs.

If they are there,first and foremost, to make laws on behalf of the UK as a whole, then the argumentfor parity of constituencies is a strong one. But if they are there, first and foremost, to be representatives of thepeople and communities in their constituencies, then the extent of geographicalspread and homogeneity (or lack thereof) in constituencies becomes a moreimportant one.

It’s clear which ofthose two drivers is uppermost in the government’s mind – MPs are there tosupport (or oppose) the government’s legislative programme, and do as they are told. But the reality is that we expect them to doboth. In a sense, the second element hasbecome less important in Walesand Scotlandas much of the representative work is now done elsewhere, so perhaps we shouldbe less worried.

There is anotheraspect, though, and it is the extent to which Wales’ voice is lost in aparliament where the overwhelming majority of MPs come from Englishconstituencies. There are still plentyof issues of concern to Walesbeing discussed and decided in London,and the size and clarity of the Welsh voice is important in that regard.

Whether thedifference between 30 and 40 out of 600 is really significant is anotherquestion entirely; and the inability of most of Wales’ MPs to find aspecifically Welsh voice rather then being simply the Welsh wing of their UKparties undermines their argument for Welsh over-representation. The argument for deliberateover-representation of the smaller nations in the UK Parliament is, in essencea ‘nationalist’ argument. It is rootedin the idea that Wales is anation which needs to have its voice heard, rather than a region to be treatedon the same basis as the regions of England.

It’s fascinating tohear that argument, albeit not in quite those terms, being put by politiciansin the UKparties. The problem is that given theirtrack record it simply sounds like an altruistic cover for protecting their ownpersonal and party interests. Labour, inparticular, have long had a tendency to conflate their party’s interests withthose of Wales,but it’s no more credible on the issue of constituency boundaries than it is ona host of other issues.

It’s alsofascinating that some nationalists at least seem to be welcoming the reductionin Welsh representation. If I could becertain that it is just another step on the road to independence than I mightbe tempted to join them. But there is noguarantee that it is, and as long as Walesis part of the UK,I really don’t see why anyone would argue against the idea of maximising ourrepresentation.

Preparing for the next step

2012-01-11T15:59:00.000Z

From a UKperspective, the one part of yesterday’s announcement on HS2 that I don’treally understand is why the Government has decided to terminate HS2 at Euston,rather than at St Pancras which is virtually next door, and which would allowthrough-running to continental Europe without having to change train. Even if through-running were not to be animmediate feature of services, it should certainly be a longer termobjective. After all, it was what wewere promised right at the start of the building of the Channel Tunnel.

From a Welsh perspective,the proposals are far from ideal, with a danger that we will be left behind ina world where reliable high speed surface transport is increasingly seen as thenorm, and preferable to aviation. It’stime, though, to stop arguing about the detail of HS2 and start the debateabout HS3. Continued argument about HS2will only further delay the Welsh connection.

HS2 will initiallyconnect London and Birmingham,with connections to Manchester and Leeds – and a possible spur to Heathrow – seen as being phase2 of the scheme. The timescales arelengthy, and if we wait until HS2 is finished – or even well under way – or ifwe try and continue the argument, rather than widening the issue out, we run therisk not only of further delaying HS3, but also that the ‘competition’ will getthere first.

There are twoobvious candidates for HS3. The first isto continue HS2 north to Glasgow and Edinburgh, and the second is to build onwestwards from Heathrow to Cardiff and Bristol.

I’d prefer that wedidn’t have to be in competition with our Scots colleagues, but they should gainsignificant benefit from HS2. There isno inherent reason why the rolling stock purchased to run on HS2 cannotcontinue over existing rail infrastructure, albeit at slower speed, all the wayto Scotlandonce HS2 is completed. This is exactlythe approach taken by the TGV services in France, which serve many more townsthan are actually on high-speed lines, providing direct rather then merelyconnecting services. It just requiresforesight and commitment.

We need to makesure that it’s our turn next. A farsighted, strategically-thinking Welsh Government would now stop all whingeingabout HS2, and start lobbying and making the case for an early decision on whatfollows. And on getting the rightdecision.

Losing territory

2012-01-10T10:53:00.003Z

I’m sure thatCameron is technically and legally correct to say that only Westminster can organise a binding referendumon Scottish Independence. But beingtechnically correct isn’t always good politics, and in this case it seems toshow a certain disregard for a clear electoral mandate.

There’s an elementof gambling about his approach, of course. I can’t believe that he doesn’t understand that trying to take controlof the timing and the question will probably increase the size of the vote forindependence, but I’d guess that he takes the view that the result will be a ‘no’vote to independence whenever the vote is held.

And in contrast tomany other nationalists, I suspect that he’s right on that point, no matter howmuch I might wish otherwise. Whilstthere is clearly an appetite in Scotlandfor a further significant transfer of power from Westminster to Holyrood, my own gut feelingis that the Scots are not ready, as yet, to vote for moving to independence ina single step. Time will tell.

Cameron’s biggestmisunderstanding, however, seems to me to lie in his use of the words ‘settle’and ‘binding’, as in his suggestion that only a ‘binding’ referendum can ‘settle’the issue.

In the first place,I’m not convinced that any referendum at this stage actually needs to bebinding. Even if the Scots voted forindependence, there would be a period of negotiation and discussion over thedetail before the final shape of the divorce settlement was known, and it isnot inconceivable, surely, that a further referendum would be considerednecessary at that time.

But moresignificantly, I’d challenge the idea that any referendum can ever ‘settle’ anyissue finally, or be ‘binding’ for any longer than it takes for public opinionto change. We’ve seen that in relationto the devolution referenda in the past – and in relation to membership of theEU. The losing side will continue toargue for another referendum at any time when they believe that they can winit; the probability that they’d just say ‘ohwell, that’s it then’ and go away is vanishingly small.

In the case ofindependence, there’s an asymmetry, certainly – a ‘yes’ vote will be harder,much harder, to reverse than a ‘no’ vote. Whilst a ‘no’ vote would unquestionably not settle the matter ‘for ever’,even a ‘yes’ vote wouldn’t necessarily do so either. Institutions and structures built by humanscan always change, and always will.

Cameron, though, istalking and behaving as though there is a symmetry about a decision; anexpectation that nationalists will quietly accept a ‘no’ vote and shut up. It’s a quaint perception, which I have asmuch difficulty understanding as he seems to have in relation to Scottishnationalism.

I was reminded ofthe gulf in perception that sometimes makes it hard to establish a basis forrational argument by the piece that Rhodri Morgan wrote in the Western Mailjust after the death of Vaclav Havel. Rhodrisaid that one of Havel's regrets would bethat, during his presidency, he lost a third of his country.

Now I had thoughtthat it was one of Havel's triumphs that hehad presided over the largely amicable divorce between two countries which hadbeen somewhat artificially stitched together in the first place in 1918, asolder nations re-emerged from the collapse of the Austro-Hungarian Empire.

Two very differentperspectives on precisely the same event. I hadn't really thought about it in quite those terms before but perhapsI should have. Perhaps when the UK PrimeMinister says that he’ll fight for the union with every fibre there is, he is motivated,at least in part, by not wanting to 'lose' part of ‘the country’. (English history would presumably see it thatway; I’d guess that Scottish history would be written from the ‘amicabledivorce’ standpoint.)

Perspective isall. To some of us, it seems thatCameron is being naïve, stupid even, in his approach to Scottish politics. But it must seem entirely rational tohim, and leave him struggling to understand why we can’t simply agree withthe logic of his position.

The gulf inperception is probably unbridgeable, and the two sides will continue to talkat, rather than to, each other. There will be a vote, and the Scottish people will make a decision. It's unlikely to be the 'final' one though.

Drains and brains

2012-01-09T14:42:00.001Z

I found lastThursday's headline story in the Western Mail, about the “brain drain” from Wales bothconfused and confusing. The academicreport to which it refers was a complex one highlighting a number of differentfactors, not all of them necessarily bad, and it seemed to me that the Western Mailwas having some difficulty in distilling that complex report down to a simpleheadline story. I thought the reportdeserved a more analytical and in depth approach to coverage than the newspapergave it.

The one commonthread seemed to be that "somethingmust be done", although what that "something" is was prettyvague and undefined - largely, one suspects, because there was no clearagreement on what the problem really is; only on the symptoms.

I thought theapproach in Dylan Jones Evans's blog was more incisive, highlighting as it didone of the key issues which the Mail seemed to have completely missed, namelythat where people choose to study is a key determinant of where they go on tolive and work after graduation. Dylangoes on to highlight the Welsh government's tuition fee policy as a key factorin that decision. I was with him on thefirst part but thought that he was stretching the point a bit on the second.

The tuition feespolicy pursued by the One Wales government between 2007 and 2000 was much morefocused on encouraging students to stay in Wales to study, and there was, asAdam Price forcefully pointed out at the time, some indication that it washaving precisely that effect. Sadly, thethen Labour-Plaid government scrapped the policy on grounds of affordability,only to replace it with what looks like a much more expensive policy a yearlater, after the change in government in Londonfinally allowed Labour in Walesto disagree with the policy of the UK government.

There are a numberof issues which drive Welsh students to study in Englandrather than in Wales,but they go well beyond the tuition fees policy. Students take into account their perceptionsabout comparative "quality" (although whether those perceptions are justifiedis another matter entirely) of universities in Walesand England. There are also questions about the range ofsubjects available – the sheer number of universities in England compared with Wales makes it all but inevitablethat there will be a greater range of subjects available.

There was anassumption underlying the way that the story was presented that it isinherently a “good" thing that Welsh domiciled students stay in, or returnto, Wales after graduation. That'scertainly a point with which I would agree; as a nationalist I want to see a Wales whereyoung people wish and are able to live and work and enjoy rewarding andfulfilling careers in their chosen fields.

(In pure economic terms, however, it isn't as simpleas that. If Welsh students studying andthen living elsewhere are replaced by English students studying and livinghere, the economic effect of the so-called brain drain is far from clear-cut.)

That in turn raisesthe perennial question of what higher education is for. Is it to provide the right number ofgraduates in the right disciplines to meet the current and future economicneeds of Wales? Such an approach undervalues the idea of moreabstract learning having an intrinsic value in its own right, but it did seemimplicit in some of the comments being made. Concentrating simply on meeting the economic needs of Wales is surelyan inadequate mission for our universities.

One other point struckme as being relevant, and it’s to do with the “internal” brain drain.

Concentratingmerely on net loss from Walesto England ignores thesignificant net movements happening regionally within Wales. Areas such as Dyfed and Gwynedd lose a highproportion of their most well-educated young people to Cardiff and the south-east every year. A concentration merely on the net movementsbetween England and Walescompletely loses sight of this fact.

Far from being thedry and irrelevant issue as which some want to paint it, I see greater autonomyfor Wales and greaterdevolution within Walesas being key issues in developing a more balanced and dispersed economyinternally. Re-localisation is what willprovide opportunities to young people to live and work in their owncommunities. It doesn't guarantee ofcourse that they take them, but giving them the choice would be a good start.

Reward and Punishment

2012-01-05T20:42:00.001Z

There was aninteresting juxtaposition, time wise, of two stories around the New Year, whichhighlighted for me the different standards applied to different groups andinterests in society.

The first story wasabout the plans of the UK Coalition to crack down on council tenants who sublettheir houses, by making it a criminal offence. The detail was a bit hazy – I can’t see what’s wrong with taking in alodger, for instance – but I think that they were really targeting people whomove out of their council houses into alternative accommodation and then rentout the council house at a profit. It’sa way of using someone else’s property to make a profit. ‘Our’ property, in a sense, because thehouses are publicly owned.

It was accompanied,of course, by a lot of guff about how council rents were subsidised by the restof us (not really true these days), and how council houses were really onlyever intended for those who could not afford their own homes (again, somethingof a re-writing of history). It willhave struck a chord, however, with those not entirely familiar with the detailsof the financing of social housing, and striking a chord is what such announcementsare all about.

The second storywas about the New Year Honours list, and more specifically about the honourgiven to the head of a hedge fund who had donated large sums to theConservative Party. He’d made large sumsof money by betting that Northern Rock would collapse. The techniques used by hedge funds, though,are a little more nuanced than gambling – this is the sort of gambling wherethe act of betting influences the outcome, if only you can bet enough money.

And, of course, theshort sellers didn’t have enough money or shares to cause a collapsethemselves, so they borrowed other people’s, and bought and sold things thatthey didn’t own. Some might see that asusing other people’s property to make a profit. ‘Our’ property in a sense, because many of the shares ‘borrowed’ for thecasino were owned by pension funds and other large financial institutions,usually on behalf of many of us.

But here’s thepoint. In principle, the two actionsseem to me to be quite similar, and there is no obvious argument that one issomehow more moral than the other. Sowhy do we criminalise the small scale abuse but honour and reward thelarge-scale abuse? Which one causes the greatestmisery for the greatest number?

Deciding who's the best

2012-01-04T15:17:00.002Z

Just before Christmas,Gareth Hughes posted on his view that Ieuan Wyn Jones is Plaid’s nost successfulleader. It’s an opinion which some willshare, and with which others will disagree. It’s inherent in the issue that a large element of subjectivity comesinto play, but it’s worth considering some of the factors that lead to such ajudgement on any leader, in an attempt to take a more abstract view.

The first factor isabout defining some criteria on which to judge 'success'. Gareth seems to base his conclusion largelyon the fact that after 80 years of being an opposition party, Plaid firstentered government under the leadership of Ieuan. But that isn’t the only possible criterionfor judging success as a leader – and given that there was no Assembly in whichto form a government, it’s not something which any of his predecessors couldever have achieved anyway.

If I may diverge toconsider the Labour Party for a moment, there is surely no doubt that TonyBlair was the most electorally successful leader that that party ever had. Unfortunately, that success was achieved byabandoning much of what the Labour Party had traditionally stood for. My personal favourite Labour leader wasMichael Foot. He was not only a greatorator, but also a man of principle, who never feared putting the difficult andunpopular arguments. He was an electoraldisaster, though.

And that’s thepoint. How do we measure the ‘success’of any leader of any political leader? Is it in electoral terms, in being in government, in achieving aims, inbehaving with principle and integrity, or in putting the difficultarguments? All are relevant, but anyassessment of ‘success’ in a leader owes more to the weightings attached tothe different elements than to the inherent qualities of those being judged.

The second factoris to do with attribution. There is atendency to attribute success of an organisation to the nature of itsleadership, but it ain’t necessarily so. Indeed, Gareth himself recognises that when he points out that Plaid’sbest-ever election result was in 1999 under Dafydd Wigley – and then goes on toattribute the success not to the leader, but to the campaign manager, one IeuanWyn Jones. It fits Gareth’s ownposition, of course, but it also opens the door to other interpretations.

Over-attribution ofsuccess to individuals is extremely common in the corporate world. Sometimes, indeed, business managers doachieve success for their organisations, although there is some variety in theway that they do that. Some are simply inspirationalleaders, others are superb facilitators who create space in which the talentsof the workforce can shine through. Butthere are others who run their organisations by creating a climate of fear.

Far more common, inmy experience, are those who just happen to be lucky enough to be in the rightplace at the right time, and are able to claim the credit for events over whichthey had little real influence. And it’s not uncommon for organisations to succeed in spite of, ratherthan because of, their leadership, as motivated people who know what needs tobe done simply ignore the titular leader.

I can think of nothingthere which applies in the business world which does not also apply in the world ofpolitics. Some leaders are regarded as 'successful'because of what they do and say, others regardless of what they do and say, andsome in spite of what they do and say. Mis-attribution of success, and over-attribution of success, to theperson who happens to be at the top at the time are natural tendencies. The main difference that I can think of between business and politics in this sense is that political parties - or at least those claiming to be run democratically rather than hierarchically - should probably expect the personal influence of the leader on outcomes to be lower than it would be in companies.

So, in judgingwhether a particular leader was or was not a successful one, we need not only todecide on the criteria, we also need to judge how far the leader was actuallypersonally responsible for meeting those criteria – and that’s much harder todo.

And that brings meto the third factor – timescale. Lookingback, it seems to me to be quite rare that the initial judgement made of anypolitical leader stands the test of history. Some get re-evaluated upwards, others downwards. Two reasons for that immediately strike me.

The first of thoseis that more information, facts, and opinions emerge over time. History, rather than hagiography, requiresthat more rounded set of inputs.

But the second, andthe more important, is that the passage of time provides context. And any period of political leadership needsto be judged in the context of what follows it as well as what precedesit. It is only the passage of time whichcan provide that context.

To return to thespecific subject of Gareth’s original post, namely a judgement on the 12 yearswhich Ieuan Wyn Jones will have spent as the leader of Plaid Cymru, there are anumber of possible sequences of events which can follow from this pointon. I choose two not because there areonly two, nor because they are necessarily the most probable, but because theyillustrate the importance of historical perspective in making a judgement.

In scenario 1,Plaid simply continues from where Ieuan leaves off. Its official core aim is regarded as nothingmore than a ‘long term aspiration’ to be mentioned as infrequently as possible,and the party becomes a party of government based on an appeal to the samemiddle ground as the other parties in Wales. In that context, the last 12 years would beseen as a turning point in the party’s history.

In scenario 2,Plaid rediscovers a sense of historical mission and sets out to shift the focusof political debate towards its own position. In that context, the last 12 years would be seen as something of anaberration.

Neither approachwould necessarily lead to success, of course; but the way in which IWJ came tobe regarded in each would be very different indeed. History is neither kind nor cruel, it just is; and perspective is all ininterpreting events.

I don’t agree withGareth’s conclusion, but I recognise that it’s at least partly a result oflooking at the same facts and events and applying a different interpretation tothem. I simply don’t know which viewhistory will eventually uphold.

Being ourselves

2011-12-20T15:48:00.002Z

I’m sure it’s verynice of Richard Branson to have spoken out in support of the Welsh Government’sproposals for a soft opt-out on organ donation, but is it really the mostimportant thing which happened yesterday, from a Welsh perspective? By making it the front page lead story, theWestern Mail clearly thinks it is.

I’m not a fan of ‘celebrityendorsement’ in the first place. I don’tneed to know which rich or famous people support or oppose a particularproposition before making my mind up on an issue. Indeed, such endorsement is generallycounter-productive as far as I’m concerned. It tends to lead me to the conclusion that if the best that proponentsof a proposition can come up with is a series of endorsements, then theproposition can’t be a terribly good one.

There’s anotheraspect to today’s story though. It playsto a peculiar trait of the Welsh character, to which even the mostnationalistic of people sometimes fall prey. In the field of politics, it affects left and right alike. We seem to have a certain need for approvalfrom others, rather then having the confidence just to say what we think.

It’s all too easyto blame that on some sort of inferiority complex resulting from our history; Isuspect that it’s a great deal more complicated than that. Whatever the reason, lack of confidence inourselves and our ideas is one of the things which hold us back. And a media which think that getting anendorsement from Branson is of such vital importance feeds the complex ratherthan helping us conquer it.

It doesn’t meanthat we should be ungrateful for support and praise from outside Wales,but we don’t need to be quite so gushingabout it.

Don't follow London

2011-12-19T10:53:00.000Z

That the UKGovernment spends more on transport infrastructure for Londonthan it does on the rest of the UKwasn’t really a surprise, although the extent of the skew was higher than manymight have expected. It gives a ratherdifferent context to the oft-repeated claim that Walesbenefits from the government’s largesse at the expense of the South East – hereis an example of the opposite; the South East benefitting from government largesseat the expense of Wales.

I was far fromconvinced about some of the reasons being advanced for the mismatch, but there’snothing wrong, in principle, with the fact that a mismatch exists. Any attempt to share out spending on the basisof need will always lead to a differential pattern of spending in differentareas; the question is not whether differentials are wrong, but whether they’rebased on a fair assessment of need. Weshould never expect the spend per head to be anywhere near identical acrossdifferent areas and regions.

There is also alesson here for Wales. Before we shout too much about all thegoodies going to London at the expense of therest of the UK,we should examine the way in which infrastructure is being handled morelocally. There has been a markedtendency of late for people to call for high levels of spend in the South Eastof Wales – on things like the suggested metro network and the M4 relief road.

I’m not opposed tothe first of those schemes, although the second is much more questionable tosay the least. But there is a dangerthat in promoting such grand schemes we reproduce in Walesexactly that about which we complain at a UK level, and other parts of Wales get left behind. Just as we urge the UK Government to take aless London-centric viewpoint, so we also need to ensure that the WelshGovernment doesn’t simply take a Cardiff-centric viewpoint.

To lead or to follow

2011-12-17T09:03:00.001Z

MH at Syniadauattracted a lot of attention with his recent blog post on the issue ofprominent Plaid members apparently distancing themselves from the party’s aims. I don’t often disagree with him, but I’m notconvinced that attempting to address the issue through the party’s internaldisciplinary procedures was the best way to go about it. Firstly, it was never likely to succeed, andsecondly, it focuses attention on the individuals concerned rather than on theviews expressed. And it is the viewsexpressed which are the more important issue; and they go much wider than theindividuals named.

Plaid has longstruggled and agonised over the use of the I-word. At different times, it has tended toformulate its view of the ‘right’ status for Wales in the vernacular of the age(Dominion status, anyone?). But theparty – or most of it, anyway – eventually came round to the acceptance that itwas the word in common use which most accurately reflected its objective.

It is entirelyhonest, and intellectually reasonable, to challenge whether ‘independence’ is awholly accurate description of the status of member states of the EU. Opting out of the UK to join the EU is a case of leavingone union for another. In either case,there are restrictions on the right of the Welsh Government to actindependently. So I can understand whysome people are still reluctant to use the word. It’s an honest and intellectually consistentposition to take – but it’s an utterly irrelevant one.

The point is that ‘independence’ has an accepted meaning in common use. Like other words, it has changed its meaning over time. Independenceis the word which EU states would use to describe their status. In effect, the modern definition of the word,in the context of the EU, is “that degreeof sovereignty enjoyed by EU member states, and required of any applying member”. And as a definition, that is the status towhich I aspire for Wales.

But the extent towhich some Plaid members continue to distance themselves even from that definitionunderlines the fact that this is not a debate about mere semantics. There are some who seem to be arguing thatthey’re in favour of that status as a long term objective, but that it isn’treally relevant to the immediate issues of the day, whilst there are others whoseem to be rejecting it even as a long term objective. In the latter case, it’s hard to disagreewith the view of some Plaid members, such as MH, that such people may be in thewrong party.

The ‘softer’distancing from the aim, however, is a position which needs to be engagedwith. It’s not always clear to mewhether those who take that view really believe that achieving the degree ofsovereignty which goes with EU membership is irrelevant in the short term, or whether there areother drivers behind that position. Isuspect the latter, and that there are two main drivers, one of them entirely honourableand the other considerably less so.

The first is adesire to ‘normalise’ Welsh politics, by framing the debate around and withinthe institutions which exist. It’s whatone would expect of any national movement once a sufficient degree ofsovereignty has been achieved. My onlydisagreement with it is that I consider it premature; that sufficient degree ofsovereignty has not yet been achieved.

Without it, thelimited powers available, even after March’s referendum, mean that the contextin which that normalisation takes place is a narrow one, which gives littleopportunity for the expression of a wide enough range of political opinion. That leads to the situation which we saw lastMay, with four parties saying much the same thing, and any changes to policy asa result of changing government will be limited in the extreme. If such minor changes are really the limit ofone’s aspirations for Wales,then the best and most logical place to be to argue for them is inside theLabour Party.

The second, and rather less honorable, driveris about electability. Some people are unwillingto put the case for independence because it will not be popular with theelectors. Their assessment of thepopularity of the idea is entirely correct, of course – all the polls tell usthat only a small minority support the idea. But that actually goes to the very heart of the issue which Plaid hasbeen fudging since the establishment of the Assembly in 1999 and the subsequent change of leaderin 2000.

Is the party aparty with a mission seeking to win the support of the people of Wales for itsaims, or is it primarily an electoral force seeking to gain power to make muchsmaller changes? Is it a party whichseeks to lead public opinion, or is it a party which seeks merely to followpublic opinion?

For decades, it wasthe former, and much of the progress which we have seen in Wales results from having a partywhich was willing and able to perform that role. Its influence was always greater than itsnumbers, and it has helped to shape the Welsh agenda. But a party which merely follows publicopinion will look little different from any other party. More importantly, the absence of a partyactively seeking to change public opinion will inevitably slow any further progress.

That debate is alot more substantial than the question of a few mavericks expressing discordantviews, and in that context, MH is right to be concerned about the direction being taken by some Plaid members.

All about perspective

2011-12-15T20:10:00.004Z

Today’s educationsection in the Western Mail contains a lengthy report of an interview with theTories’ Shadow Education Minister. Itcovers a host of education issues – including the matter of tuition fees.

On that particularsubject, there was one sentence in particular which struck me as especiallyrevealing – and indeed, it was one of the quotes which the Mail itself chose toheadline in the little box at the bottom of the page.

Ms Burns said, “I don’t believe in this current climate wecan have a universal benefit like this”.

That goes right tothe heart of the difference in perspective which clouds any debate on theissue, It is clear that, from aConservative viewpoint, payment of higher education fees is a ‘universalbenefit’, something which puts it in the same class as the state pension. For me, it is an investment in the future ofboth our young people and our nation. There’s an enormous gulf between those two perspectives.

But it goes furtherthan that. It is entirely legitimate toask at which age paying from education starts to become a ‘benefit’ rather thanan investment. Does such an attitudeonly apply to higher education? I cansee no logical basis for distinguishing between higher education and further education– or even between higher education and sixth form education. Indeed, the growth of ‘dual-sector’institutions means that all three types of education post statutory schoolleaving age will be delivered by the same institutions.

Perhaps it goeseven further than that. Perhaps deepdown at least some Conservatives see all education as a ‘benefit’; part of thebenefits system. In that context,tuition fees are just the thin end of a very large wedge.

I pick on theTories here, because the statement came from them. But the underlying attitude – seeing the payment of tuition fees as an unaffordable ‘universal benefit’ permeates allfour parties to a greater or lesser degree. Even some of those arguing for free tuition “when we can afford it” areeffectively accepting the basic premise.

There is a realideological difference here, and that point is not made often enough orstrongly enough. Education is not partof the benefits system and should never be seen as such. There are two very different world viewshere, but for too long, politics has glossed over that fact. Glossing over it is allowing one of thoseworld views to win.

Half a cheer for the Lib Dems

2011-12-14T17:50:00.001Z

There is along-standing convention in the UKthat all members of the Government should support the government’s position onall issues, and should resign if they are unable to do so. Backbenchers are not bound by thisconvention, but the job of the whips is to try and ensure that they vote as ifthey were as often as possible.

It’s the sort ofconvention that governments like, and when all ministers are chosen by thePrime Minister, who can dispose of those who dare to disagree, it’s a powerfultool for motivating the ‘payroll vote’ to support government policy.

It’s a convention,though, which is better suited to one-party governments than to coalitions, andthe fact that it has been so rarely challenged has as much to do with theunusualness of coalitions as anything else. And it’s a convention which has been adopted – unthinkingly as far as Ican see – by the National Assembly in Cardiff as well.

I can understandwhy coalition partners would be expected to support the government position on allmatters covered in the formal coalition agreement, but I cannot understand whythe convention should apply to all decisions taken by the government, even ifthose decisions are both outside the formal agreement and contrary to thestated policy of one of the coalition partners. I certainly did not understand why the junior partners in One Walesfound it necessary never to disagree in the Senedd with anything that thesenior partners said or did.

In that context,the decision of the Lib Dems in London toabstain on a motion welcoming Cameron’s removal of the UK from thenegotiating table in the EU is a very welcome challenge to the convention. I hope that we will see more of them.

So why only half acheer? Because I’m completely convincedthat if the same thing had been done by a party other than the Lib Dems, then theLib Dems would have been the first to condemn such an outrageous breach ofconvention. Consistency of argument hasnever been one of their strong points. But having put down a marker in this way, I’d be delighted to see themshowing a bit more consistency from here on in.

Fiscal Union

2011-12-13T08:10:00.001Z

Staying on theEuropean theme, the latest conventional wisdom seems to be that the difficultiesof the Eurozone prove that the UK’sdecision to stay out was the right one. I’m not so sure – the problem is that we only get to run history once,so it’s impossible to be certain how things might have turned out if adifferent decision had been taken.

It is surely atleast possible, however, that the currency itself would have been stronger andmore able to resist speculative pressure if the UK had been part of it from theoutset.

It’s not just thatthe UKis the third largest economy in the EU, and that having one of the biggest playersstaying outside was inevitably going to cause continuing doubt about theproject.

It’s also that, bystaying outside the Eurozone, the UK did two other things which wereless than helpful. Firstly, it provideda home within the EU itself for the financial speculators who have done so muchto undermine the Euro in particular and the global economy in general. And secondly, sterling provided analternative currency to use in financial trading on those markets – crediblealternative currencies are a key element in the operation of the financialmarkets.

I doubt that suchconsiderations will affect for one moment the view of those who have beenhostile to the single currency from the outset; and as I noted above, I cannotbe certain that things would have panned out very differently. My point, though, is that those who areclaiming that the UK Government’s decision was the ‘right’ one cannot really bethat certain either.

One other point, almostas an aside. If it is true – as many arenow claiming – that monetary union is impossible without fiscal union, wheredoes that leave the idea – proposed by some nationalists – that an independent Walescould continue to use sterling?

It’s not an exactparallel, of course, but neither is it a completely irrelevant one. Being part of a monetary union impliessimilar fiscal policies; the lack of that has been the Euro’s weakness, and theneed for it the justification of many for staying out. Those fiscal policies can either be set jointly,in some sort of club or federation, or be set by the larger partners andimposed on the others.

That’s the choicefacing the Eurozone; it would also be the choice facing members of any sterlingzone.

Memberships and relationships

2011-12-12T09:19:00.001Z

I can’t rememberthe exact date, but I think it was sometime in 1974, just before the referendumon continued membership of the Common Market. Plaid Cymru was invited tosend a delegation to Brussels and Luxembourg to learn more about theinstitutions. About ten of us went, onwhat was obviously an attempt to persuade us not to campaign for a ‘no’ vote. On that, it failed.

We had talks fromthe office of the Commission, as well as visiting the Parliament. But perhaps most instructive, to me, were thevisits to the offices of two of the Permanent Representatives.

As well as visitingthe office of the UK Permanent Representative, Dublin gave special permissionfor us (there was some concern about being seen to be interfering in theaffairs of another state) to visit the office of the Irish equivalent to get anIrish perspective on the same issues. The contrast between the two was stark. It certainly helped me to understand why the Irish had a differentattitude to the European project.

At the office ofthe UK Rep, we were very formally ushered into a room where a senior civilservant with a suit, a bow tie, and a very posh accent politely offered us teabefore asking how we thought they might be able to assist us. At the Irish office, the host wore anopen-necked shirt and a sports jacket, and said something like “Come on in boys– would you like a whiskey?”

That’s superficialstuff, of course, but it reflected for me the underlying current of the subsequent discussions that the Irishwere into enthusiastic membership and collaborative working; the UKwere more about maintaining a ‘relationship’ with the institutions.

The way in whichpeople use language often reveals a lot about the underlying attitudes. The language being used by politicians andcommentators alike about the current situation in the EU is a case inpoint. Time and time again, we hear thephrase (or variations upon it) that there should be a renegotiation of “therelationship between the UKand the EU”.

The very wordsserve to frame the context. They conveya message that the EU is somehow something different and separate; there’s animplicit externalisation. It puts the UK in adifferent position to the ‘Europeans’. It’s perhaps a reflection of a long insular history. (I’d like to be able to say that it’s anEnglish problem, and that Walesis different – but anyone who believes that attitudes in Wales are very much different onthis question is probably delusional.)

It reflects theobservation that I made all those years ago about ‘membership’ vs. ‘relationship’;no UK Government has never quite made the jump from the latter to the former. Cameron is merely carrying on where hispredecessors left off. But he’s takingus down a very dangerous road. It mightsuit the speculators in the City, but it will not help areas such as Wales. Rhodri Morgan’s point in Saturday’s WesternMail about looking after the interests of Airbus rather than the interests ofthe City is a very valid one.

I campaigned for a ‘no’vote in 1975, and still think that was the right position at the time. (Actually, our slogan – ‘Europeyes, EEC no’ - was rather more sophisticated than that. Probably too sophisticated to be able tocommunicate it effectively). But afterthat vote, the facts changed, and I, like others, came in time to accept the changedcontext.

The EU is far fromperfect. There is much that I would liketo change. But we cannot, as some of thecheering Euro-sceptics seem to think, turn the clock back – being outside theEU now would be a very different prospect to remaining outside in the1970s. Europeand the world have changed and isolation is not a good place to be.

In whose interest?

2011-12-07T17:09:00.001Z

In response tosustained pressure from his own backbenchers, David Cameron has strongly statedthat whilst his top priority for the Euro summit is to find a solution for theEurozone, he will veto any changes which threaten the UK’sinterests. So far, so good; it’sdifficult to argue against that in principle.

What’s a lot harderto see is how a failure to achieve a solution to the crisis can possibly bemore in the interests of the UKthan being prepared to yield a little. And for the Prime Minister even to talk in the terms he’s been using almostinvites the speculators to continue betting on a failure to reach an agreement.

But what’s leastclear of all to me is how he is deciding what is, and what is not, in theinterests of the UK. It seems to boil down to protecting therights of the speculators and gamblers to continue the sort of activities whichhave done so much damage over such a lengthy period. And protecting their interests is not at allthe same thing as protecting the UK’s interests – in fact, there areplenty of people who might suggest that the two are actually in directconflict.

It makes for goodrhetoric, and cheers up his own supporters (including those people in the Citywho make such generous donations to the Conservative Party), but it will surelylook to many as though he is prepared to go on sacrificing the interests of themany so that the few can continue to enrich themselves at our expense.

Massaging the picture

2011-12-03T09:35:00.001Z

Peter Black shows a neat little graphic on his blog comparing the actual level of spending cuts being made by the coalition government with the level of cuts pledged by the various parties in advance. It is, like so many Lib Dem graphics, simple, clear, effective - and utterly misleading.

The first way in which it misleads is by starting the scale at around £75billion. Shortening the scale in this way gives the impression that the difference between the figures is much larger than is actually the case. A scale which started at zero would give quite a different impression - it would show all the figures tightly bunched together around one point on the scale.

And if the figures being compared were those for total expenditure rather than simply the extent to which that expenditure is being reduced, then the bunching effect would be even more pronounced.

The second way in which it misleads is that it gives the impression - without actually saying so - that because the actual total is closer to the Lib Dems pledges than to the Tories' pledges, then the Lib Dems can take the credit. That would be a wrong conclusion on two counts.

The first count is that the actual figure isn't what the government was actually aiming it - it's come out lower than planned because the government has got its figures wrong, not because the Lib Dems have been clever and influential. And the second count is that the reason that the government has got it wrong is because their underlying assumption - that the private sector would take up any slack - has been proved to be utterly wrong. In effect, the government is simply switching public expenditure from productive - paying people to do things - to unproductive - paying the same people to do nothing.

There are two lessons which can be drawn, however. The first is that the debate about different levels of public expenditure is concentrated - in London, just like in Cardiff - on a very narrow range, with very small differences being greatly exaggerated.

And the second is that government can't really control either the economy or the total level of public expenditure to the extent that they claim. (Chris Dillow had a good piece yesterday about some of the reasons that they claim more influence than they actually have.)

Spin and fancy graphics are no substitute for substance.

Even more ado about less

2011-11-30T16:17:00.001Z

I once met LordTebbit, albeit only in passing. I waswith Dafydd Wigley in the underground labyrinth which gives the basement of the Palace of Westminster the feel of a giant publicconvenience. We were probably somewherebetween ‘this house’ and ‘the other place’, when Tebbit appeared suddenly outof a side tunnel beaming from ear to ear. He was regaling all and sundry (including Dafydd) with the news thattheir lordships had just inflicted a defeat on the (Tory) government of theday.

I can’t rememberexactly what the subject was, but I have a vague recollection that it was aminor amendment to an obscure clause in some European legislation. Oh, and that the government (as governmentsare wont to do) reversed the defeat in the Commons in due course. It was a useful lesson in the way that someelected (or in this case, even unelected) members can get so institutionalised in the procedures and debates thatthey imbue the minutiae with a sense of importance which completely passes mostof us by. And they generally havedifficulty understanding why the rest of us don’t care.

The incident cameto mind in recent days during the reporting of discussions on the Welsh budget. It’s another case of much ado about not verymuch at all.

We now know thatthe concessions secured by the Lib Dems amount to less than 0.2% of the entireWelsh budget, and that those demanded by Plaid amounted to somewhat less than0.5% of the same budget. We don’t reallyknow what percentage change would have been needed to satisfy the Tories, butthat doesn’t really matter. Both Labourand Tory parties are far too tribal to have ever come to a deal with eachother, even if it were to have been the cheapest deal of all.

I’m sure that theinsignificance of the sums involved compared to the overall totals reflects arealistic and pragmatic approach to what was actually possible, and I don’tblame the Lib Dems (any more than I would have blamed Plaid) for accepting sucha small change as the price for their support. What I do blame all the opposition parties for, however, is the rhetoricin advance.

When they weretelling us that they thought the budget was unacceptable, and that it didn’tmeet the priorities of Walesit seems that what they really meant was that they thought the budget was over99.5% acceptable and largely met the priorities of Wales. It’s rather a different proposition.

It also highlightsthe real problem facing Welsh politics. A budget isn’t the same as a programme, of course; but one would surelyexpect any radically different programme for government to come with much moresignificant budgetary differences than 0.5%. In effect, during all the headline grabbing and posturing of the budgetdiscussions, no party has put forward an alternative programme which is at odds in any major waywith what Labour are planning to deliver.

It seems that thesmaller are the differences between them, the more attention gets drawn tothem. I’d sooner see lessattention-grabbing and more real differences.

Fiddling at the fringes

2011-11-23T13:56:00.001Z

According to this story yesterday, job losses in the Welsh public sector could be up to 26,000,and each job loss in the public sector could be matched by a job loss in theprivate sector, pushing the total cost to the Welsh economy up to around £3.65billion. I assume that to be an annualfigure, although it wasn’t stated as such, and nor was there much by way ofclear justification of any of the other figures. I’m not sure how confident we can be, as aresult, in the precise figures, but there are some key general points that doemerge.

The first is thatcutting spending in the public sector is not neutral in its effect on privatesector employment. There is a directknock-on effect as the public sector places fewer contracts and buys fewer goodsand services. It’s a relationship whichshould be obvious, really, and I don’t understand why those who are so keen tocut the public sector quickly and deeply don’t understand thatrelationship.

The result is that,even if we assume that the private sector is going to create jobs to take upthe pool of labour created by public sector cuts, the total number of jobsneeded is much higher than simply those cut from the public sector. And that’s just to stand still, without doinganything about the high levels of unemployment which were there to start with.

The second thingthat struck me about the report was the quote from the IoD representative, whoclaimed that “the private sector wasdoing its best to create jobs to compensate for public sector cuts”. I’m not convinced about that. For how many organisations in the privatesector does the question of ‘creating jobs’ feature in the mission statement, strategy,or objectives? Not many, I suspect.

Private companiesexist to make money for shareholders, not to employ staff, and part of thereason that the economic system is badly broken is that there has been anobsession with ‘efficiency’ as companies try to produce more goods and servicesmore cheaply – generally for less effort using fewer employees. Whilst it’s true that the expansion of private companies can createjobs, that’s a side-effect – it’s not the aim. Suggesting otherwise is mere spin.

The third point isthe repetition of the canard that the problem with the Welsh economy is that weare “over-reliant on the public sector”. That’s an ideological belief rather than astatement of fact. There is no magic numberfor the percentage of the economy which belongs in one sector or the other, andit really doesn’t matter, in terms of GVA, whether a particular activity iscarried out by the private sector, by the public sector, or by the privatesector as a contractor to the public sector.

(I’d accept that there are questions about whetherthe public sector has historically been as ‘efficient’ as the privatesector. That’s a subject for anotherday, but the point is that there really is no inherent reason why the public sector should be anyless productive or effective than the private sector. And there have been, in the past, plenty ofexamples of profitable businesses in the public sector – until they were soldoff.)

Who ownsenterprises is irrelevant from a GVA perspective, but we’re stuck in theThatcherite mode of believing that only private profit can drive an economy,and that the state should only concern itself with the provision of a limitedrange of services. It’s a paradigm whichpatently isn’t working, yet governments and oppositions alike only offer usmore of the same.

On the same page asthat story was the report about Cameron stating that “getting debt under control is harder than envisaged…”. The only thing that surprises me is that heor anyone else would be in any way surprised at that. Increasing the numbers of unemployed peoplereduces tax revenue and increases benefit expenditure, leading to the governmentneeding to borrow just as much as if they had stuck to Labour’s plans. They’re effectively just spending a similar amountof money in a different way.

Labour seem to takesome satisfaction from that, but they really shouldn’t. The difference between the two parties' approaches islittle more than fiddling at the fringes. £6billion may sound like a lot ofmoney, but it’s really neither here nor there in the grand scheme ofthings. But within the current paradigm,fiddling at the fringes is the best we’re likely to be offered by conventionalpolitical parties. None of them is offering a real alternative.

Rigging the system

2011-11-22T13:03:00.001Z

Ynys Môn councilhas been dysfunctional for many years, and regular attempts from both insideand outside the island to resolve the issues have failed. The differences are generally not political,but personal; councillors are as prone to falling out with members of their ownparty as they are to falling out with members of other parties. And ‘independent’ covers a multitude of sins.

Clearly, somethingneeded to be done, and sending in the commissioners can have come as nosurprise to most people. New elections –and preferable a largely new set of councillors – are an inevitable part of thelonger term solution. I’m concerned,though, about the latest proposals from the boundary commission. Or, rather, I’m concerned about the directiongiven to the boundary commission by the minister.

The generalguidance used by the boundary commission in relation to all councils in Wales is setout here. In paragraphs 5.4 onwards, thepreference for single-member wards is made clear. Although the commission can and must considerwhether multi-member wards have advantages, in general they are asked to prefersingle-member wards.

The minister hasthe right to over-rule the consideration – paragraph 5.5 of the generalguidance specifies that he may do so in specified areas. In the case of Ynys Môn, he has decided to doso. As the introduction to the report onthe island’s electoral arrangements makes clear, the Minister made a specificdirection in relation to Ynys Môn, which “requiresthat we should, in the first instance, consider the desirability ofmulti-member electoral divisions throughout the County”.

Personally, likeanyone else who advocates STV, I favour multi-member wards; they’re essentialif we want to have a more proportional result. So I have no objection to the introduction of multi-member wards per se(although I’d prefer it to be accompanied by a move to STV).

But is it right tohave a different approach in one council area from that being implementedeverywhere else, where the main reason for that difference appears to be tofacilitate the election of different people? There is no doubt in my mind that the Minister has acted in accordancewith the powers conferred upon him, because those powers don’t seem to requirethat he provides any reason or argument for adopting a different approach inone area, or place any constraints on what considerations he might apply.

And that’s where myconcern lies. There is a dangerous precedenthere, under which the Minister has directly interfered in the work of theboundary commission to instruct them to take a particular approach in Ynys Môn,largely because he doesn’t like the result of the elections there. I don’t like them either – but I’m simply notconvinced that rigging the electoral system is the right way to deal with thatproblem.

And Ynys Môn isn’tthe only place where I don’t like the results of the elections. If the Minister also feels that, what is tostop him interfering further in other areas to obtain a result more to hisliking?

Controlling the markets

2011-11-21T11:40:00.001Z

Marcus drawsattention to the extent to which ‘the markets’ now control policy, withgovernments being mere bystanders. TheObserver article to which he links also underlines the way in which governmentsare being changed undemocratically to satisfy ‘the markets’.

Saturday’s WesternMail had a leader column on the Eurozone crisis, which argued that two thingsare now necessary. The first is that Germany musttake the lead, and the second is that ‘the markets’ must give the Eurozone timeto breathe. I don’t know whether thefirst will happen or not; but I’m confident that the second won’t.

There is a tendencyfor politicians and commentators to imbue ‘the markets’ with rather morerationality than is actually justifiable; the idea that they should also showsome responsibility or compassion to the people of countries such as Greece and Italy is about as likely as porcineaviation.

The economic ideaof the market acting as Adam Smith’s ‘invisible hand’ to match buyers andsellers has long since been lost in the financial sphere, as individuals andorganisations have realised that they can make money for themselves byspeculating rather than buying or selling anything, let alone investing. But as with any other type of gambling, oneperson’s profit is another person’s loss. And the losers, in this case, are most of us.

If the speculatorsbelieve that they can make a profit by bankrupting a country or two,undermining a currency, or bringing down a few leaders, then no appeal to theirbetter nature will stop them. And evenif it did stop some of them, there would simply be others who would pounce onwhat they would see as weakness to line their own pockets.

That doesn’t meanthat the WM leader writer is wrong to want to see the markets giving theEurozone a break; it just won’t happen voluntarily. We sometimes seem to forget that the marketsare a human artifice, not something with an objective existence of theirown. They were created to fill a socialneed, but have been subverted in the interests of the few – it’s anotherexample of the 1% and the 99%.

If we wanted,collectively and internationally, to re-assert social control over them wecould do so. The fact that so many ofour politicians are unwilling even to countenance that merely underlines theextent to which those who benefit from the system also control the politicalagenda.

In many other contexts, people who enrich themselvesat the expense of others, even whole countries, would be regarded as criminals. Why do we allow ourselves to be so beholdento them?

How long a piece of string?

2011-11-18T09:30:00.001Z

According to theTories’ group leader, £4million a year is an ‘excessive and wasteful’ sum ofmoney to spend on maintaining Wales’largest occupied office building. So, if£4million is the ‘wrong’ answer, what’s the ‘right’ one?

Actually, he wasn’tquite as precise as that. He said only that he ‘fears’ that it is excessive andwasteful, which sort of suggests that he himself doesn’t actually know what theright answer would be. Select a number,any number, as long as it’s smaller, perhaps? (‘Zero’ would be quite a good answer from his perspective, one suspects.)

There is, in theway his views are expressed, an underlying suggestion that civil servantsshould not expect to have high quality office accommodation – that is to bereserved for the private sector. And iftheir conditions deteriorate over time, and no longer meet current standardsand expectations, then they should simply accept that as part of the package. Whilst we shouldn't be paying for anyone to work in opulent surroundings, it is surely reasonable for them to expect to be working in modern conditions which comply with current standards, isn't it?

It’s interestingthat he claims that the money could be better used in supporting businesses, as in “There are untold numbers of businesses in Wales thatwould benefit from financial support”. I’m sure that there are. But ishe really saying that he’d prefer to see taxpayers’ money used to give grantsand subsidies to businesses rather than to purchase services and materialsfrom them? Because that’s where most ofthe £4million will actually have gone – to private companies in return for workdone. Providing state handouts rather than giving business to companies is an odd position for a Tory totake.

I don’t knowwhether £4 million is excessive or not. It sounds a lot, but there also seems to be an element of catch-up after some years of neglect. I simply don’thave enough information to judge. Andneither, I suspect, do the Tories.

There’s nothing newin their approach though. Far too often,opposition politicians seize on any large numbers which come into view becausethey make good headlines. But headlinechasing isn’t the same as detailed scrutiny and constructive opposition. Nor is it the best way of ensuring that those who work in public services on behalf of all of us have suitable, but not extravagant, working conditions.

What a difference a day makes

2011-11-17T09:11:00.001Z

On Tuesday, theFirst Minister argued that allowing different parts of the UK to use CorporationTax to compete against each other would lead to a ‘race to the bottom’. Yesterday, he argued in favour of devolvingAviation Passenger Duty, to enable the Welsh Government to cut the level of taxso that Cardiff Airportcould better compete against other airports, such as Bristol.

Why one of thosetwo proposals will inevitably spark a ‘race to the bottom’, whilst the otherwill not, is not immediately obvious to me. And of course, since the Welsh Government currently has no tax raisingstructures, any proposal to devolve any control over any taxation must surely fallfoul of the second principle which he outlined on Tuesday, namely that anyfurther devolution must ’be accommodated within existing WelshGovernment structures’.

Yesterday, he alsocalled for the devolution of control over stamp duty. Again, it’s hard for me to see how thatcomplies with the second of Tuesday’s three key principles. And, having said on Tuesday that Wales shouldnot call for devolution of powers simply because they were devolved to Scotlandor Northern Ireland, yesterday he demanded borrowing powers for Wales, andargued that it did not make sense that “alarge project could go ahead in Northern Ireland, Scotland and England, but notin Wales because the government here cannot borrow”.

I have somesympathy with his concerns about a ‘race to the bottom’. It’s why Gerry Holtham, for instance, hasn’tcalled for devolution of control over tax rates, but rather for the rate to bevaried on a ‘regional’ basis by the UK Government, based on an objectivecriterion set around the relative level of GVA. And it’s part of the reason that we need to look at the devolution of arange of taxation and other economic levers as a complete package rather thantaking CT as a stand-alone proposal.

I even have somesympathy for the difficulty Carwyn faces in dealing with the internalcontradictions and differences of opinion within his own party. I’m not sure that I’d go as far as one commenteron yesterday’s post, who declared that Carwyn is, as a result, “making it up as he goes along”, but Ican see why people might think that.

He’s walking adifficult tightrope, but he made a major mistake in trying to suggest that pragmatic responses to individual proposals are somehow based on a set ofthought-out principles. I doubt that he,or his party, will really be in any position to take a clear line on the devolution oftaxation until the Silk Commission has reported and the UK Coalition Governmenthas legislated on its recommendations, probably in the teeth of ferociousopposition from Labour’s MPs.

After that, we’ll probably find that it was their ideaall along…

Carwyn's tests

2011-11-16T09:18:00.001Z

In a lecture inAberystwyth, the First Minister has set out his criteria for deciding whetheror not further powers should be devolved to Wales. Superficially, his three tests (“devolution of responsibility would benefitthe Welsh public, be accommodated within existing Welsh Governmentstructures, and have limited impact on the wider UK”) seem to bestraightforward, but are they really as simple as they look?

Clearly, I startfrom a very different perspective; his second and third tests are not reallyones which any nationalist would propose or support in any event. As for his first, well, if I didn’t believethat an independent Wales ‘would benefitthe Welsh public’, then I wouldn’t argue for it, so it’s not a test thatanything would ever be likely to fail from my perspective.

But does it standup, even from his perspective? I’m notsure that it’s as clear as he suggests. In what is presumably a précis of a much longer speech, the newspaperreport refers to only three specific examples highlighted by Carwyn.

The first is thedevolution of consents for renewable energy projects; something which he sayswould meet his tests. It is leftunexplained why devolution of renewable consents meets the tests, whereasdevolution of non-renewable consents does not. Why does the one ‘benefit theWelsh public’, whilst the other does not?

I suspect that whathe’s really saying is that his government would take a different view from thecurrent UK Government on the one, but really wouldn’t want the responsibilityof the other which would merely highlight the difficulties all Welsh partiesface over issues such as Wylfa B. Andthat highlights a common problem – it seems to me that those arguing that aparticular decision should be taken at a particular level are often doing sonot from any basis of principle, but from the basis that that is the level mostlikely to take the decision that they want. It may well be a valid approach, but we shouldn’t pretend that it’sbased on a series of objective tests.

The second is thedevolution of corporation tax. In truth,I share his concern about the danger of a ‘race to the bottom’, but that’staking a very narrow view of the power. It highlights another problem with his approach – breaking things downinto single-issue decisions avoids any attempt to look at the biggerpicture.

Having control overa range of taxes, as well as other economic powers, would enable differentadministrations to use different combinations of policies to promote their owneconomies. That doesn’t necessarily leadto a race to the bottom at all. Butlooking at individual powers on a case by case basis, in the way that Carwynseems to be doing, will almost inevitably lead to a rejection of all. His three principles don’t seem to allow fortaking a broader view.

He also rejects thedevolution of any power over income tax, but here he seems to be introducing afourth test, that of a requirement for a referendum, although there doesn’tseem to be any hard definition of which items require a referendum and which donot.

One issue which hedid not refer to was the devolution of criminal justice and the establishmentof a Welsh jurisdiction. It’s somethinghe has himself supported in the past, but I don’t see how it can ever pass hissecond test, that of being “accommodatedwithin existing Welsh Government structures”, so presumably he would nowreject it as an option.

In principle, Iwelcome any effort by Labour’s leaders to spell out where they see devolutiongoing, and what principles should underlie that; but in this case, Carwyn’sattempt falls a long way short of the clarity which is needed.

Still struggling with the arithmetic

2011-11-15T15:09:00.001Z

The Lib Dems continueto struggle to understand the difference between absolute numbers andpercentages. According to FreedomCentral, in her statement this afternoon, the party’s leader said that “Labour still spends £600 less on each pupileach year compared to those living in England”.

I’ve referred to this mathematical inexactitude before. Converting an average to an absolute in thisway is distorting the truth in an attempt to make a political point. But here’s a question – how much faith can wehave in anyone’s understanding of the complex numbers in the budget if they don’tunderstand the difference between an average and an absolute number?

United we fall

2011-11-15T09:41:00.001Z

It’s hard todisagree with the assertion that the Labour Government in Cardiff has behaved in a somewhat high-handedfashion in preparing this year’s budget proposals, with no meaningfuldiscussion with the other parties. It’seasy to see how frustration with that approach has led the three oppositionparties to table a joint amendment.

But I’m not overlyimpressed with that joint amendment. Intrying to combine three different and incompatible sets of priorities, it endsup putting forward little which is constructive, and is little more than afig-leaf to justify them all voting together against the government’s proposal. One doesn’t have to agree with thegovernment’s own proposals to realise that there is no way of changing them tofully accommodate all the points raised by the amendment.

It’s true of coursethat the government doesn’t have an overall majority to vote its budgetthrough; but neither does the combined opposition have a majority to votethrough an alternative – even in the unlikely event that they were able toagree on a positive alternative rather than simply a wrecking amendment.

The stalemate oftied votes may make for a few newspaper headlines, and seen from theperspective of the bubble, it may even give the participants a welcome bit ofexcitement, but it has little to do with good government. Those proposing the amendment must also befully aware of all this. So what do theopposition parties really hope to get from this, knowing as they must that theyare asking for the impossible?

One and a half ofthe opposition parties would rather like to join Labour around the cabinettable in coalition, and if that were to happen, we could be sure that much ofwhat is ‘unacceptable’ today would not only become ‘acceptable’, but even‘essential’, as the members currently lined up to vote against the budget foundthemselves whipped into supporting the same basic proposals with a few cosmeticchanges around the edges.

If the governmentavoids the coalition route, and tries to offer enough concessions to get thesupport, or at least the abstention, of one of the opposition parties, theresult would be that two of those parties will have got nothing out of thislittle collaboration. It makes me wonderwhether they’ve really thought through what they’re doing rather than indulgingin a little bit of short term game-playing.

Given Labour’sone-tune narrative of presenting anything and everything as being a choicebetween a Labour government and a Tory-led opposition, it’s hard to see how theopposition parties are doing anything other than reinforcing that narrative.

Hain slapped down by Labour

2011-11-14T10:33:00.001Z

There is more thanone way of looking at the Labour Party’s statement at the weekend on possiblechanges to the electoral system for the National Assembly. Predictably, most people have picked up onthe part of the statement which says that if the system is to be changed atall, then it should be changed to a wholly FPTP system, and portrayed that assupport for what Peter Hain has been saying for some time.

The ‘if’ isimportant though; because the first part of the statement says that Labour willoppose any change to the voting system if proposed by the UK Government. Their default position, therefore, is thatthe current system should remain unchanged, and that any change which doeshappen should be decided in Walesrather than in London. As Glyn Davies points out (“Until today, we thought that all partiessupported changing National Assembly electoral arrangements to being based on30 coterminous constituencies as well”), this is a significant shift awayfrom what Peter Hain has been saying.

Their proposal for what should happen if the system is to be changed at all is rightly ridiculed by all and sundry, but concentrating on that aspect - which they effectively describe as their second choice - is to give inadequate attention to their first choice solution.

It’s not so longago that Hain was claiming that “Everyoneis agreed on the need to avoid decoupling in Wales, and maintain the sameboundaries for Assembly and Parliamentary constituencies”. I was not alone in wondering at the time whothis ‘everyone’ was and what was the basis for the statement. This weekend’sannouncement puts a significant distance between what the Labour Party thinksand what Hain has been saying.

For all the scornbeing poured on Labour, the position taken by them is actually more robust –and, dare I say it, more nationalist – than any other party in Wales. They’re now the only party rejecting the needfor co-terminosity, and the only party arguing that the decision should be madein Wales rather than in London. It's something of a turn-up.

Self-determination is a right

2011-11-11T09:43:00.001Z

According tointernational law, all nations have the right to decide for themselves whether,and to what extent, they should exercise sovereignty directly, share thatsovereignty with others, or even completely subsume themselves in anotherentity. The ‘right’ toself-determination does not mandate any nation to use that right in anyparticular way.

But internationallaw does not attempt to define what a ‘nation’ actually is. That’s no surprise; many of those of us whohave thought long and hard about what constitutes a ‘nation’ would alsostruggle to provide a clear, unambiguous, and objective definition. What is clear, however, is that whatever a ‘nation’is, it has the right to determine its own status in the world without externalcompulsion or interference.

In posting today aboutthe possible attempt by the UK Government to hi-jack the independencereferendum in Scotland, Peter Black makes the sweeping statement that “Scotland is not in a position to decide itsown fate”. And insisting, as hedoes, that “the consent of the rest ofthe United Kingdomwill be necessary for any change” runs directly counter to the principlethat self-determination can be exercised without external interference.

It seems that theLib Dems either don’t accept international law, or else don’t agree that Scotlandis a nation. I can’t see any otherrationale for making such statements. Worse, the statements seem to be based on the highly illiberal premise that sovereigntybelongs to the centre rather than the people.

There are argumentsboth for and against independence, whether we’re talking about Scotland or Wales. And it is perfectly proper that people putthose arguments to the people of Scotland in advance of theirreferendum, so that the people have the opportunity to make an informeddecision on their own future. Butarguing that they have no right to make their own decision, or trying to takecontrol of the referendum process is not only wrong, it’s also likely to beself-defeating.

Consultation or advice

2011-11-10T15:19:00.000Z

Dylan Jones-Evansposts an interesting comparison today between the membership of the ‘EconomicRenewal Council’ in Walesand the membership of the ‘Council of Economic Advisors’ in Scotland. As a like-for-like comparison, it makes forgrim reading, but I wonder whether that is entirely fair.

The two animalshave evolved by very different routes. Whilst the purpose of the Scottish body is to give the best possibleeconomic advice to the Scottish Government, the Welsh body has, as Dylanhimself notes, grown out of a statutory requirement to consult; and it seems tobe more about seeking consensus than setting a new direction.

During the earlypart of the recession, the Welsh body seemed to be performing quite well inthat more limited role, although I suspected at the time that there was morethan an element of spin about the extent of its contribution. However, a body containing representatives ofthe different stakeholders, meeting periodically to discuss the economicsituation with the Welsh ministers is no bad thing in itself. To that extent, I’d disagree with Dylan’scriticism.

However, theunanswered question for me is this – where is the body in Wales which is performing the rôle beingperformed in Scotlandby the Council of Economic Advisors? This is not a representative body taking part in consultation, but agroup of leading people in the field with a much better capability to do somepro-active and wide-ranging thinking and advising – and it appears to bemissing in Wales.

I doubt that the ‘sectorgroups’ which the Welsh Government spent the best part of two years setting upare really working on the same level, or are likely to do so. The problem, it seems to me, isn’t so muchwith the membership of the body we have trying to perform the functionsallocated to it, but with the lack of a rather different focus which couldprobably only be provided with a very different membership.

On that point, Ican only echo Dylan’s question about a lack of economic ambition on the part of theWelsh Government.

Who are these people?

2011-11-07T10:53:00.000Z

There was a storyabout a month ago claiming that there was a possible loophole in the WelshGovernment’s policy on paying tuition fees. The nub of the issue was that different lawyers appeared to be givingdifferent advice (as lawyers are wont to do) about the law in this area, withsome claiming that the Welsh Government could find itself open to paying feesfor all EU students studying in the UK.

I still suspect, asI noted at the time, that this is one of those situations where only a testcase will prove who is right and who is wrong; but I couldn’t see how anyone’sinterest would be served by bringing such a test case.

I still don’t seewhose interest would be served, but it looks as though we may be moving to aposition where a test case becomes a possibility. According to the Western Mail this morning, a“think-tank” which I’d never heard of before has decided to actively encourageEU students in Englandto apply to the Welsh Government for funding.

The “think-tank”concerned has a single-page web presence here, which actually tells us verylittle about them. The banner at the top,showing a combination of the union flag and the stars and stripes makes mewonder what the nature of the USconnection is, but there is little hard information to be had. The Western Mail tells us that theirspokesman is England-based – do they have any connection with Wales at all?

The key question,surely, is what the motivation is behind this intervention in Welsh politics. It’s a question which the Western Mail seemsnot to have even asked.

Their web page saysthat they want to expose the “stupidity and inequity” of the policy beingpursued by “the Welsh Assembly” (sic – do they not understand the differencebetween the Assembly and the Government, and what does that say about theirknowledge?). But who would pay for themto do this, and if they’re not being paid for it, why would they divert timeand effort into something which is more political campaign than policy researchand development?

It’s an odd thingfor a “think-tank” to do; and the report in the paper raised more questionsthan answers in my mind.

I wasn’tparticularly surprised at the Tories jumping on the bandwagon to criticise thepolicy yet again, although I still don’t understand why they think such astance holds any political advantage for them. Supporting an organisation based elsewhere in an attempt to undermine apopular policy doesn’t look like good politics to me.

On-message

2011-11-04T14:46:00.000Z

Hain yesterday,Murphy today. The same message from bothof them, which I suppose at least displays a degree of unity, something forwhich the Labour Party hasn’t always been best-known.

Sadly, however,neither man’s message gets much beyond “LabourGood, Tories Bad”; any proposal coming from the Conservatives must be wrongand therefore should be opposed. Thereis no real attempt whatsoever to engage with, or even discuss, the substance ormerits of the case.

In response to mypost on Hain’s comments yesterday, Jeff Jones commented that this sort ofapproach “plays well with the core voteparticularly if it is over 60 and still living in a world which stopped in 1979”. There’s a sense in which that is the mosthopeful aspect – they’re playing to a demographic which will inevitably declineover the years.

Hainperbole

2011-11-03T15:31:00.000Z

Another day,another statement by Hain. The WesternMail’s extensive coverage is here; the unexpurgated words of the man himselfare here. The juxtaposition of the wordsattributed to the Presiding Officer in a rather different context (“Oh here we go now”) on the same page of the paper, and to the left of the piece on Hain, seemedstrangely prescient.

He’s not alone inhis love of hyperbole to make a point, but the suggestion that taxation powersfor the National Assembly would "destroy Wales" seemed a bit far-fetched,even for him.

That’s not to saythat taxation powers are necessarily an unmitigated opportunity for Wales; they arepotentially a double-edged sword. But,and not for the first time, he puts up a straw man that no-one is seriouslysuggesting (an immediate move to full power over all taxation and expenditure)in order to knock it down – and dismiss more modest proposals at the same time.

The devil is in thedetail; a move to a situation where the block grant is reduced by an amountequivalent to a certain percentage of income tax and the Assembly given thepower to vary income tax to recover the lost grant is potentially neutral inits effects on both the Assembly’s total income and expenditure and on the levelof income tax paid by people in Wales. AndI suspect that’s much closer to what will potentially be on offer.

My doubts aboutsuch a proposal aren’t simply that a power to vary the level of tax (rather thanmerely recover the lost revenue) is a power which probably dare not be used. It's more that it adds little to the ability of the Welsh Government to vary the mix oftaxation revenues in order to achieve goals beyond the merely fiscal.

There is one pointin what Hain said where I actually agree with him, albeit only up to a point. He said that “We shouldn’t be ashamed or embarrassed... [of the fact that Walesneeds more expenditure than we raise in taxation] …Wales’ needs are greater than most other parts ofUK”. It’s a point I made in a piece on WalesHome afew months ago. Whether the ‘centralgovernment’ in question is a Welsh one or a UK one, it can and should be tryingto mitigate the effects of geographical wealth inequalities.

Where I partcompany with him though is that he seems to be implicitly assuming that Wales’ relativepoverty is an inherent, unchangeable fact of life which only redistribution bythe UK Government can resolve. I findthat depressing and defeatist; one of the best reasons that I can think of for rejectingHain and his party is precisely that such thinking seems to be endemic tothem. Where is his/their plan to buildthe Welsh economy to the point where we don’t need handouts? Where’s the belief in the ability of thepeople of this small country to turn things round? Where’s the positive leadership?

I don’t doubt thatsome would argue that he actually wants to keep Wales as it is, that adependent Wales providing a block of safe seats to Labour in the UK Parliamentis what best suits the Labour Party. I’vehad similar comments on this blog often over the years I’ve been runningit. I don’t think it’s an entirely faircriticism, though. The outcome might well suit him, but I don’t believe that he’ddeliberately hold us back for such self-interested reasons. A far more damning criticism is that he justdoesn’t seem to be able to imagine any alternative.

Relative Wisdom

2011-11-03T08:23:00.001Z

Neil Hamilton, theformer Tory MP whose career came to an end over the ‘cash-for-questions’ affairhas now joined UKIP and been elected to its NEC, it appears. Their loss is presumably the Conservatives’gain.

I was struck inparticular by this quote from UKIP’s leader, Nigel Farage. He said that Hamilton’s “experience and wisdom will contribute significantly to UKIP”. I couldn’t help but ask myself what exactlythat says about the wisdom and experience of the rest of UKIP. I suppose that wisdom, like much else, isrelative.

Where's the meat

2011-11-02T11:20:00.001Z

Both the BBC andthe Western Mail give us a preview of Carwyn Jones’ speech to a Welfare to WorkConvention in Cardifftoday. The impact of the UK Government’swelfare reforms seems to be getting a large chunk of his speech.

I’d agree with himthat the ‘reforms’ are going to have a disproportionate effect on the mostvulnerable, and I think he’s right to defend the Welsh Government’s record onissues such as prescriptions. And I cansee how some of those policies being pursued in Wales can foster and encouragesocial inclusion; free transport for older and disabled people, for instance,can enable them to participate in activities which would otherwise be beyondtheir reach.

I wonder though howfree prescriptions and bus passes really promote ‘social mobility’ as he seemsto be claiming. And, not for the firsttime, I wonder whether ‘social mobility’ is the right objective anyway – it’snot the movement of individuals between levels which we need so much as anevening out of the levels.

But the thing thatreally struck me about his speech as reported is the dearth of firm alternativeproposals. He talks about “monitoring developments closely”, andestablishing “a ministerial ‘task andfinish’ group responsible for assessing and monitoring the cumulative impact ofall the welfare changes”; he refers to the government taking “its responsibilities seriously to meet thischallenge” and being “progressive” andsays that he would “never shirk away fromtackling issues that could have detrimental implications to Welsh Governmentpolicies, services and Welsh citizens”.

There is, though,little of substance by way of positive action. There is a recycling of the claim that they will “create 4,000 new jobs a year in Wales for the next three years”,which is in reality little more than offering a series of 6-month placements to2000 people at a time. It’s not a badidea in itself, but it’s been hyped to be more than it is.

Overall, the speechis more rhetoric than programme. I’msure that other parties will use that to demonstrate, yet again, a lack ofambition. That’s probably not entirely unfair,but the lack of firm proposals also reflects the Welsh Government’s lack ofreal power on economic issues. Criticismof a lack of ambition by the governing party suggests that the solution is assimple as changing the governing party. It really isn’t that simple, and suggesting that it is diverts attentionfrom the real issue of how we develop a serious economic alternative.

Good performance, bad performance - just give me the money...

2011-10-28T13:55:00.000+01:00

When largecompanies are doing well, those at the top feel justified in paying themselvesever higher rewards for achieving that success. And when they do badly, those at the top feel justified in payingthemselves ever larger rewards for taking the tough decisions necessary toreverse the decline.

Or so it wouldseem, from the news today that boardroom pay for the UK’s top companies has risen almost50% over the past year, at a time when those collecting those rewards have beenslimming down their companies and telling the shop floor workforce that they’llhave to work longer hours for lower pay.

I was going to lookat whether, and to what extent, the performance of the companies is actuallydown to the performance of the directors in any event, but Chris Dillow hasalready done that job much better than I could.

Whilst there arealways some exceptional individuals around, most of those in boardroomsprobably got there by a combination of accident and luck – being in the rightplace at the right time is one of the key factors. They wouldn’t agree with that assessment ofcourse; they all have sufficient self-belief to be convinced that they’re allso exceptionally talented as to deserve whatever they can get.

The real questionsare why so many others seem to believe that as well; and why we let them getaway with it.

Red tape and workers' rights

2011-10-27T09:27:00.000+01:00

Politicians love totalk about abolishing this terrible stuff called ‘red tape’ which clogs up theprivate and public sectors alike and threatens to bring the entire economy to acomplete halt. They usually claim thatjust by cutting the stuff out they can solve most of the problems faced bybusinesses. Some of them are soenthusiastic that one could almost believe that it’s also the solution to worldpoverty and hunger.

It’s somethingwhich strikes a chord with the general populace as well. We’re all against unnecessary bureaucracy,but as I’ve mentioned before, defining what is, or is not, unnecessarybureaucracy is a lot harder to do.

One of Cameron’s earlyacts as PM was to appoint Adrian Beecroft to conduct a review of ‘red tape’ andrecommend what could be abolished. Idon’t think that I would have selected a venture capitalist to undertake such arôle, but I suppose it’s the sort of background likely to produce the sort ofreport which Cameron wanted.

There have been anumber of leaks of some of the things he’s going to recommend over recentweeks, in both the Times and the Telegraph. Jaxxlanders draws attention to this and this in the Telegraph, and boththe newspapers referred to another of his proposals a couple of weeks ago asreported here.

(As a complete aside, Nick Clegg’s claim that ‘forevery hour someone in a big company spends on paperwork, it takes nine hours ina smaller firm’ looks to me like one of those politician’s statistics. It’s simply not credible as a generalisation,and I’d be doubtful if it was even true in a specific instance. The alarming thing is that he probablybelieves it – worse still, that it’s an assumption underpinning the adoption ofpolicy.

Peter Black claims this whole issue as another example of how "Liberal Democrats are acting as a bulwark against the worst excesses of the Tory right wing". That depends on quoting Vince Cable's aides and ignoring the fact that the policy was, according to the Telegraph, launched by a certain Nick Clegg...)

Now, I don’t doubtfor one moment that enabling employers to sack anyone who they consider to beunderperforming, with no comeback beyond statutory minimum redundancy pay, issomething that the worst employers would like. As Beecroft himself admits, it would also allow some people to “be dismissed simply because their employerdoesn’t like them”, something which he describes as “sad” but “a price worthpaying”.

Creating a climateof fear of unemployment in the workplace may even improve the efficiency ofsome companies, particularly those whose management is incompetent to startwith. As I’ve suggested previouslyhowever, if we want to build successful businesses we should be dealing withthe incompetence, not condoning and licensing it.

Nor do I doubt thatdelaying the introduction of auto-enrolment into a new pension scheme wouldsave companies money. But it would alsoleave those who would benefit from auto-enrolment in a worse position atretirement – another ‘price worth paying’ presumably.

It’s all of a piecewith the general attitude of the UK Government at present. There’s a price to be paid for economicrecovery, it’s a price worth paying, and it will be paid largely by those atthe bottom whilst those at the top continue to reap the extra rewards forintroducing ‘greater efficiency’.

But what theseproposals are most emphatically not about is reducing unnecessary ’redtape’. Employee protection is notworthless bureaucracy, and only those who see employees as little more than acostly but sadly necessary resource would ever think that it was. Such as venture capitalists and thehereditary rich, for instance.

This is an ideologically motivated attack on employeerights, and an attempt to further shift the balance of power away from labourand towards capital. Others who talkglibly about abolishing red tape should be more careful with their words, andspell out their specifics rather than talk in generalities. Otherwise, there is a danger that theyunintentionally legitimise that attack.

Saving the £?

2011-10-26T09:52:00.000+01:00

Tom Bodden’s reporton the SNP’s drive for independence refers to one aspect of the SNP’s proposalswhich I hadn’t previously realised. Anindependent Scotland,he says, “would retain the pound as itscurrency and any decision to join the Euro would be taken in a referendum”. That surprises me somewhat.

I can understandthe political imperative behind it. Itmakes the independence option look a little ‘safer’. And I’ve heard many nationalists in Wales arguing that an independent Wales shouldretain the pound as well. But it’s theeconomic rationale that I don’t understand.

As a part of aunitary state called the UK, with its own currency called the pound, Wales andScotland send MPs to the Parliament in London, where they have as much (or aslittle) influence over monetary policy as any other MPs. As direct members of the European Union and partof the Eurozone, Wales and Scotland wouldhave as much (or, again, as little) influence on monetary policy for that zoneas any other states of comparable size.

But to be part of acurrency union with another country whilst having completely separate governingarrangements would mean having no influence whatsoever over monetary policy,and being completely at the mercy of decisions taken elsewhere. I don’t understand why anyone would want togo from ‘not having very much influence’ to ‘having no influence at all’ overone of the main levers of policy affecting their economy.

I sympathise withthe desire by some to see an independent Wales(or Scotland)adopting a currency of its own. It makesa certain sense from a nationalist perspective, and puts the maximum level ofpower over monetary policy into the hands of the Welsh Government. But it also seems to me to be attempting toswim against the tide of history. Forall its troubles, I’m still convinced that european currency union is here tostay, and that membership of that union is the least worst option for a newlyindependent state.

I’d rank anindependent currency as the second option though. But being an independent country and stickingwith the pound looks to me like the worst of all worlds option.

Unionists and separatists

2011-10-25T12:09:00.002+01:00

Two short-hand termsfor very different political outlooks, but I don’t really like either term. Neither really conveys what it is that peopleare about. The debate and vote in the UK parliamentyesterday underlines the limitations of the terms as explanations of thepolitical stance of the respective camps.

In that vote, the ‘unionists’were those supporting the continued existence of the European Union, whilst the‘separatists’ were those demanding an immediate vote on exit. Yet, when it comes to the future of Wales andScotland, yesterday’s UK ‘separatists’ tend to find themselves in the unionistcamp, whilst those of us at whom the term ‘separatist’ is frequently hurled by way ofinsult tend to be supportive of the European Union (even if we don’t alwaysagree on the form of that union).

Those who seem mostkeen to tell us that ‘we’re stronger together’ often seem to take quite theopposite view when it comes to that strange place which they call Europe, ofwhich they think that the islands of Britain are somehow not quite a properpart. The fact that their belief in thevalue of union and togetherness stops at the white cliffs fatally undermines theintegrity of their argument about strength in unity when applied ‘domestically’.

The size of therebellion yesterday should concern us; it suggests to me that the real level ofhostility to the EU within the Conservative Party is much greater. The tactics of the Government in trying totell the rebels that they agree with them really, and that it’s just a questionof timing, underline that change in mood. I wasn’t overly impressed with Miliband’s contribution either, tellingMPs that Britaincould not afford to leave the EU at the moment. That’s hardly a robust counter-argument.

We’re at a point inhistory where Scotland seemspoised to rejoin the world as a free nation, and there is at least a chancethat Waleswould follow later; it would be perverse if the UK Government were to decidethat this was the time to try and stop the world and get off. The attitude of the 'separatists' is probablyone of the consequences of the imperial past, but the failure to accept andunderstand that ‘the past’ is where that attitude belongs is one which can onlylead to further decline.

I want to see Wales and Scotland taking their places at theEuropean table. And I hope that, when weget there, Englandwill choose to be there as well. But I’mless confident about that now than I used to be.

Trailing Scotland

2011-10-24T16:40:00.000+01:00

The momentum behindthe SNP’s drive towards Scottish independence shows no sign of flagging anytime soon. Quite the reverse, it seemsto be growing. And the gulf between whatis happening in Scotland andwhat is happening in Walesis large and increasing.

Wales isn’t Scotland of course. At times in the 60s and 70s it seemed thatthe progress of the two nations was on parallel paths, but the reality was thatScotland always started ahead, because of the different nature of therelationship with the rest of the UK, and the continued existence of nationalinstitutions north of the border where the equivalent institutions in Waleswere organised on an EnglandandWales basis.

And whilst it’simportant not to overstate the influence of individual personalities onpolitics, having a leader who not only believes in the aims of his party butalso has the confidence and ability to articulate them with conviction hasgiven the SNP a huge advantage over the other parties in Scottish elections.

I don’t knowwhether the Scots will actually vote for independence at the end of it,although I have a feeling that it will be a two-stage process – devo-max now,and independence at some point down the line. The drive towards independence is being ably assisted by a dividedopposition, which seems unable to put together any coherent positive argumentfor the union. And doesn’t even seem towant to try – but believing that your case is so obvious and overwhelming thatit doesn’t even need to be put looks to me like a losing strategy.

In that respect –the lack of a coherent argument for continuing the union – there is still aparallel in Wales. With support for the independence optionlanguishing at a low level, and the case for independence rarely being made,one could excuse the unionists here for thinking that there is no urgency tofill the gap. That would be a mistakethough; although the support for Scottish independence is now in theascendant, it’s not that long ago that it, too, was at quite a low level.

Today’s letter inthe Western Mail (available by scrolling down here) from David Melding showsthat one defender of the union, at least, recognises the danger. Not for the first time, he proposes a formalfederal constitution as a means of preserving the idea of a United Kingdomwhilst also strengthening the devolved bodies within the union. I think he’s probably right; if I wanted toput forward the option most likely to preserve the union at this point,federalism is what I’d push, too.

He also, at least –and unusually for a Conservative – recognises that sovereignty belongs to thepeople, and if they decide to exercise it, then that is their right. It puts him ahead of some others, who seem tobelieve that the people of Englandand Wales have some sort ofa right to a veto on what Scotlanddecides.

But his plan willonly work, as he identifies, if those in favour of the union come together andunite around it. And that’s where hisargument falls down. His letter was inresponse to an article last week by Mick Antoniw, which Melding describes as ‘thoughtful’. That wasn’t exactly my take on it. I thought that it started out with too much stereotyping, more of an attempt to bash political opponents than engage in themore mature type of political discourse which is typical of Melding himself. And it was more of a rallying call to the Labour Party than anything else.

The idea that theunionist parties can ever come together to agree a common response to developmentsseems to me to be unlikely for as long as they believe that they canindividually gain more electorally by simply being negative. David Melding seems to be one of the few whobelieve that politics ought actually to debate substance rather than merelyscore points and pursue power. Thatmakes him something of a lone voice on the unionist side; and the fact that heis so unusual hands the potential to the nationalist side to win the argument.

What Alex Salmondand the SNP have shown is that a political movement which seeks and exercisespower can still, if it has the will, the ability, the imagination, and theconfidence, articulate a wider vision and win people over to supporting thatvision. Vision and pragmatism don’t haveto be alternatives; they can co-exist. It's a lesson we need to relearn in Wales.

Let us collect the money

2011-10-21T10:45:00.000+01:00

No surprise at allto see David Cameron suggesting that all Wales’ problems are down to theAssembly Government not following the English lead on policy in education andhealth. There is much about Cameron’sarguments which is open to more detailed scrutiny; in particular, the extent towhich the change of policy in Londonsince he was elected in May 2010 can have made quite as much difference as he seems to be claiming issurely questionable.

He is, though,being entirely consistent. He genuinelybelieves that letting private enterprise and market forces loose in the fieldsof education and health will improve standards and reduce costs. Whether that is true or not is anothermatter; there’s certainly nothing as self-evident about the assumption as itssupporters claim.

But the underlying argumenthe puts today – that Wales would be better off if only we followed England – isone with which most of his party would agree.

Rather moresurprising – and much less helpful – is the suggestion from Labour’s BaronessMorgan today that Wales runs the risk of a cut to its funding if it does notfall into line with England on tuition fees and prescription charges. As reported, it almost seems to be suggestingthat devolution is fine as long as Wales doesn’t actually use thepowers it has to do anything different. What, in essence, is the difference between that position and theposition of Cameron?

The underlyingproblem is that the Assembly is still not a proper parliament, however oftensome might claim that it is. Yes, it canmake laws in a limited range of fields (although as the smacking debate showedearlier this week, the extent of those law-making powers remains shrouded inuncertainty); but without the powers to control and take responsibility for itsown income, it will remain at the mercy of London.

The proposed reviewof taxation powers by the commission led by Paul Silk is hardly going toscratch the surface; allowing the Assembly to vary some elements of some taxeswill still leave it overwhelmingly dependent on a block grant from London. Dependent, in short, on a decision taken in London about what proportion of the tax revenues collectedin Wales will be returned toWales.

Better by far forall tax revenues collected in Walesto go to the Assembly’s coffers first, with an agreement about how much of thatmust then be passed to Londonfor those services which continue, for the time being at least, to be providedcentrally. That’s far from being a softoption of course; it would force the Assembly Government into some harddecisions in the short term. It wouldalso, though, destroy any argument about Wales’ right to do things differentlywithin our own resources.

The Welsh connection

2011-10-20T13:33:00.001+01:00

The Western Mailreports today on the Welsh connection to the Liam Fox affair, in that oneStephen Crouch is one of those who appears to have been funding Adam Werrity’slittle jaunts around the world. Thelocal MP, Simon Hart, is quoted asdescribing Mr Crouch as a former chair of the Carmarthen West and SouthPembrokeshire Constituency Association. The MP’s own website, however, still describes him as chairman as ofthis morning. (Better get there quickthough – I’d expect that to be changed fairly rapidly! I'm sure it will be archived somewhere, though.).

(In passing, was I the only one to detect ever such aslight whiff of hypocrisy in Peter Hain’s call for Simon Hart to 'comeclean'? Presumably, just like he himself did over thedonations to his ‘think tank’ when he was fighting for the deputy leadership ofthe Labour Party?)

I’ve referred to MrCrouch previously. He was the connection which led a rather colourful oil tycoon (and former mercenary boss) to donate £5,000 to the local Tories. But he’s nota stranger to controversy himself.

In 1995, there werequestions raised about his involvement in lobbying for the easing of sanctionsagainst a certain Saddam Hussein, in order to make it easier for Britishcompanies to do business with the regime. Never let anything get in the way of business, I suppose. (Or perhaps I'm thinking of the Godfather there)

He was also thesubject of some ‘fishing’ questions in the House of Commons about the extent ofhis own contacts with UKministers (the last time the Tories were in power, as it happens). It's the sort of thing that happens when MPs suspect that all isn't quite as it should be, but don't know exactly what they're looking for. It’s an interesting parallel with the Werrityaffair. (And, like Mr Werrity, he seems to have had the ability to turn up in the right places on occasions.)

I quite liked this one – a masterpiece of a non-answer if ever there was one:

Mrs. Clwyd: To ask the President of theBoard of Trade when Ministers or officials of his Department last met Mr.Stephen Crouch.

Mr. IanTaylor: Neither Ministers nor officials of this Department have met Mr.Crouch in his capacity as director general of the Iraqi British Interests Group.

There is, as theysay, nothing new under the sun.

History, empires, and free publicity

2011-10-19T09:27:00.000+01:00

The Newsnightpresenter, Jeremy Paxman, in a move which I’m sure is completely unconnectedwith any attempt to gain some free publicity for his latest book (or the BBCseries to be based on it next year), has complained that the British Empire hasbeen written out of the school history curriculum, and that that leaves pupilswith an incomplete understanding of what has made ‘us’ what we are.

Actually, I thinkhe has a point. Like it or loathe it,the role which the British Empire played inmaking the world what it is today is significant; and it is hard to argueeither with the idea that the imperial past of these islands continue to havean impact today. Equally, though, theteaching of the history of Waleshas long been deficient in our schools as well. Knowing where we came from isan important part of understanding what we are, and where we came fromnecessarily includes both the Welsh and the British experience.

On one specificexample, I think that he’s absolutely right to suggest that the readiness ofrecent British Governments to go to war on a regular basis is at least in parta hangover from the days of Empire. Anunderstanding of why and how that attitude is so prevalent would in itself notbe a bad thing.

That raises, though,the question about what, exactly, should be taught. Because whether a readiness to go to war is apositive or a negative result of that imperial past is a value judgement, notjust a question of understanding history. And I’m not convinced that there’s any such thing as ‘neutral’ history;the facts and events selected for teaching, and the importance ascribed to themare matters of perspective.

As with all ofhistory’s empires, a rounded assessment of the British Empire would have to say that there were both achievements andbrutality; good and bad. Where thebalance lies depends on perspective, not fact. The empire enriched some and impoverished others; inevitably they willsee it rather differently.

Some of hiscomments (“It’s to the Empire that we oweour sense of ourselves as somehow special, our distrust of continental Europe…”) do not encourage me to think that hishistory curriculum would bear much similarity to mine. He has identified an important gap – but fillingthat gap is far from straightforward.

Not asking the right question

2011-10-18T14:06:00.000+01:00

The meeting betweenthe Prime Minister, the Energy Secretary, and the ‘big six’ energy companiesseems to have been a classic case of creating the appearance of action withoutactually doing anything very much.

That high andrising fuel prices are a problem is indisputable and that they impactdisproportionately on the least well-off is equally so. But exhorting energy companies to make theirbills clearer, and to make it easier for consumers to switch supplier, islittle more than tinkering on the fringes. And there’s nothing new in any of it, as one of the more independentsuppliers who was present stated after the meeting.

The response ofopposition politicians has been little better. Ed Miliband’s statement that the companies should use their profits toreduce prices is merely the most glaring example of a lack of will to implementreal change.

There does seem tobe some doubt as to whether the claim that the energy companies are making anaverage profit of £125 per household per year is true or not. The companies themselves claim that it’scloser to £15, but I’m not sure how relevant any figure is.

‘If £125 is too high, what’s the right figure?’ is not a question to which I’m hearingany answers. And in any event, thepercentage figure is more relevant that the absolute figure, and energycompanies’ profits do not seem that far out of line with other profit-makingbusinesses.

That goes to theheart of the inadequacy of the political response. The underlying question – whether we wantthese services provided by companies whose main aim is profit – is not evenbeing asked. Suggesting that companiesshould sacrifice the interests of their shareholders for the benefit of theircustomers is like criticising the outcomes of the free market withoutchallenging the underlying basis.

Government (oropposition) politicians could propose an alternative ownership model for energycompanies, or they could propose legislation to limit profits or enforce lowertariffs, but they do none of those things – because they accept the basiceconomic model under which the companies operate.

That leaves themnothing to fall back on except pious words and spin, which will do little toalleviate the problems which many will face this winter.

Overheads and packages

2011-10-14T14:09:00.000+01:00

For decades, pensionprovision was seen and treated as part of an overall remuneration package. Employees didn’t just get a salary, they gota package, and people thinking of changing jobs were encouraged to compare thetotal package, not just the headline salary.

I’m aware that someemployers even implemented flexible arrangements under which employees could,within agreed limits, sacrifice part of their salary for higher employerpension contributions, or even reduce the contributions for an increase insalary. Such arrangements suitedemployees, who could vary the elements of the overall package at differentpoints in their lives, and they were generally cost neutral (other thanadministration costs) for employers. Above all, they encouraged people to think package rather than salary.

I’m not entirelysure at what point ‘part of the package’ became an ‘unaffordable overhead’apparently provided by the employers out of the goodness of their hearts, butthe perspective certainly changed. Factorssuch as increasing longevity come into the equation, but I have a feeling thatthe crucial event was the raid on pension funds mounted by Gordon Brown when hewas Chancellor.

I’ve never feltthat he was wrong in principle; the previous tax treatment of pension fundsgave disproportionate benefit to the most well-off rather than the leastwell-off. But he was wrong, and badlywrong, in practice, by introducing the change without warning and with notransitional period for both employers and employees to adjust to thesignificantly increased contributions which would be required from both if previouspension provision was to be maintained.

Overnight, anapproach to occupational pension provision which had been so successful overdecades was rendered unviable. Thepensions crisis may be coming to the fore under a Conservative-Lib Demcoalition, but the seeds were sown by Gordon Brown and New Labour.

The sleight of handby which pension contributions have come to be regarded as an ‘overhead’disguises the fact that employers reducing the benefits or increasing the levelof employees' contributions are, in effect, reducing the total remuneration package oftheir employees as certainly as if they were simply reducing wages. The wrath of those being hit by this attackis easily understandable.

The surprisingthing to me is not that public sector employees are protesting so strongly, butthat private sector employees did not protest more when the changes impactedthem. It underlines, perhaps, the extentto which economic power has become increasingly unbalanced in favour of capitaland against labour. However, the merefact that private sector employees have already had to suffer the closure offinal salary schemes and the prospect of reduced income after retirement is nobasis at all for arguing that public sector employees should meekly accept thesame fate.

It’s also oftenoverlooked that not all public sector pension schemes are the same; some aremuch more actuarially sound than others, and there really is no need to treatthem all on the same basis. There aresome serious problems though, particularly in those services where pensions arepaid from current revenue rather than from a properly funded long term savingsscheme. Arguing that all schemes canjust continue as they are is as disingenuous as arguing that they all have tochange fundamentally.

What is surelyclear overall is that we have a choice between reducing the size of pensionsafter retirement and increasing the amount saved before retirement. The position we’ve got to seems to be thatpublic sector employers are determined to make that decision unilaterally, justas private sector employers have already done. It’s a short term decision though; it saves money today at the expenseof potentially creating a bigger problem for pensioners in the future.

The government isgiving conflicting messages as well. Onthe one hand they say – quite rightly – that we need to save more to makeprovision for retirement, and on the other they seem likely to further postponeauto-enrolment in the new pension scheme because they want us to spend not savein order to boost the economy. Long termneeds conflict with short term ones, and as is usual with politicians, shortterm considerations are likely to win out.

Seeing pensions aspart of a remuneration package rather than as an overhead puts potentialindustrial action by employees into its proper context. There will have to be changes to the packagein many cases, of course; but change should be negotiated not imposed, and publicsector employees are right to insist on that. That surely is at the heart of what trades unions are about.

Wants and needs

2011-10-13T15:06:00.000+01:00

To listen to thevoice of the ‘business community’, one might think that one key element on theroad to full employment and economic growth is as simple as freeing businessfrom ‘regulation’ – and in particular, allowing them to pay lower wages, havestaff work longer hours, and limit employees’ rights as much as possible. I can see how any individual business wouldsee all of those things as enabling it to produce more for less and thusincrease profits.

At first sight, it’sno surprise therefore that the collective voice of business expresses this sortof view to government. It should bethough, because what individual businesses want, in order to compete againsteach other, isn’t necessarily what the economy as a whole – and all thebusinesses in it – really need.

The approach isgrounded in looking only at the cost side of the equation, and only from the narrow, micro, point of view. It’s a natural tendency, because costs areeasier to control, but it isn’t the whole picture.

On the income side,businesses actually need customers with money to spend and time to spendit. I sometimes wonder if everyindividual business trying to reduce its own labour costs to gain competitiveadvantage isn’t making the implicit assumption that the consumers of theirproducts and services will be the ‘overpaid and unproductive’ staff of theircompetitors. In effect, attacking payand hours to compete only works as long as everyone else doesn’t do the samething.

There is anotherimplicit assumption being made as well, which is that as some businesses becomemore ‘productive’ and thus free up labour, then other businesses will expand,or be started, to take up the slack. That’s an assumption which underlies the whole economic policy of bothgovernment and opposition. And, albeit witha greater or lesser degree of success at different times, it’s proved a validassumption, to an extent, over the long term.

The fact that itdoesn’t currently seem to be happening doesn’t necessarily mean that it won’thappen in due course, but it is at least possible that, this time, it won’t. What happens then? What’s Plan B?

The government andopposition alike would have us believe that the lack of investment at presentis down to a failure of banks to lend. And I'm no fan of banks, but there's a danger that they're just a soft target. There is plenty of evidence that a lot of businesses,particularly the larger ones, are sitting on enormous pots of cash. That would mean that it’s not a lack of cashwhich is holding back investment, but a lack of opportunities to investprofitably.

The politicalassumption is that any Plan B would essentially revolve around either publicauthorities investing in infrastructure, or else cutting taxes to put more money in people’spockets so that they can go out and spend. The evidence suggests that, of the two approaches, the former would bemore effective, even though any jobs created are likely to be of temporaryduration, partly because putting more money in people’s pockets at present ismore likely to lead to a paying down of debt than an increase in spending.

However, if weassume for a moment that putting more money in people’s pockets would actuallywork, why the assumption that the only way to do that is to reduce this tax orthat tax? Paying higher wages by sharingthe rewards more equally could potentially have the same effect, as couldemploying more people to reduce all the unpaid overtime worked by anincreasingly stressed labour force. (Thatwould also give people more leisure time to spend the extra money as well.)

Reducingproductivity and paying higher wages is counter-intuitive, of course. We’ve been brainwashed into thinking thatever increasing productivity and cost reduction are inherently good things,just because they seem to make sense at the micro level. But at the macro level, they only make senseas long as the assumption that something else will take up the slack remainsvalid. Otherwise, those increases inproductivity have to pay for the unproductive slack.

In that case, areal and radical Plan B involves a fundamental re-think about the basis onwhich the economy is run, and a move towards a more co-operative rather thancompetitive approach. An economy, inshort, which is built around the needs of the whole of society rather thanaround the wants of the minority.

They used to saythat ‘What’s good for General Motors isgood for America’, but it seems to me that, in economic terms, ‘What’s good for the whole is good for theparts’ is much more likely to be true in the long run than ‘What’s good for this part is good for thewhole’.

When is a job not a job?

2011-10-12T15:54:00.000+01:00

The answer, ofcourse, is when it’s ‘created’ by politicians. The only ways that governments can directly ‘create’ jobs are byincreasing public expenditure and employing people directly, or by establishingprofitable state-owned enterprises. Neither the UK Government nor the Welsh Government seems likely to doeither of those things any time soon, so claims that they are creating jobsneed to be treated with considerable caution.

That didn’t stopboth governments launching schemes yesterday under which they are both claimingto be creating large numbers of jobs. Iwouldn’t seek to deny that both schemes have their merits; but I don’t thinkthat the headline claims stand up to examination.

Perhaps it’s partlydown to my definition of what a ‘job’ is. For me, if a government claims to have created 10,000 jobs over itslife, then, all other things being equal, I’d expect there to be 10,000 morepeople employed at the end of the government’s term than there were at theoutset. For governments, however,creating 10,000 jobs seems to mean that over the government’s life, 10,000people will have had a job at some time or another, not necessarilyconcurrently, and not necessarily for any length of time.

So the Welsh Government’s scheme, headlined as creating 12,000 jobs for young people overthree years, actually boils down to 12,000 people having a six month placementat some time during the next three years. There is – and can be – no guarantee that a single one of those peoplewill still have a job at the end of the placement, or that there will be anymore people in work in Walesat the end of the three years than there are now.

Then we have the UK Government’s scheme. The numbers lookmore impressive but when one compares the size of Walesand England,they really aren’t that different in scale. And, again, there’s absolutely no guarantee of any jobs at the end ofthe programme.

One supporter ofthe UKcoalition, Peter Black, gamely tries to draw a distinction between the twoschemes under which the UK Government has got it right and the Welsh Governmenthas got it wrong. But there are moresimilarities than differences between the schemes; both are based to asignificant extent on extended periods of work experience. The underlying principle, that of makingpeople ready for work and putting them at the front of the queue is thesame. And the underlying failure of both– that they do nothing to ensure that there will be any jobs for which to queue– is the same as well.

Chris Dillow has an interesting piece today when he suggests that, regardless of what governmentsdo, we are in for a lengthy period of sustained high levels of unemployment,based on the fact that the level of economic growth needed to avoid that issimply not attainable. It’s a depressinganalysis, but he makes a good argument for the prediction, even if it isn’t onewhich he or I would wish to see fulfilled.

I’d even arguethat, in trying to get more people into the labour market by encouragingmothers back to work and by forcing older workers to wait longer for theirpensions, the government is actually making the task of attaining fullemployment harder, not easier. Add tothat the continued drive for increased labour productivity, and the availabilityof ever-larger and cheaper work forces in other countries, and the task startsto look well nigh impossible.

A more radicalapproach would be to share more evenly both the work available and the rewardsfor performing it, in a fundamental re-think of the way our economy works. I’m not expecting to hear either governmentproduce proposals for doing that though. Much easier to just recycle claims about ‘creating’ jobs and hope peoplewill believe them.

Lawyers, advice, and politics

2011-10-11T13:22:00.000+01:00

There have been afew comments this week about the story which first appeared, according to Dylan J-E, in the Sunday Times. Itwas based on an anonymous source who said that the Scottish Government hadconsidered a similar approach to that in Wales for paying fees for Scottish students studying in England, buthad rejected the idea on the basis of legal advice received.

The motive for theanonymous source who started this particular hare running is unclear, althoughthe motivation of those who’ve jumped on the issue to attack the WelshGovernment is all too clear. Both theTories and the Lib Dems are hostile to the way in which Wales is giving its students a better deal thanthey are receiving from the coalition in London,and are only too willing to undermine the policy in any way they can. They will be happy only when Welsh studentsface the same crippling levels of debt as those from England.

But I wonder forhow long they can go on demanding the impossible level of assurances which theyseem to be seeking. The initial reportwas based on ‘legal advice’. Now I’m nolawyer, but I’ve had enough dealings with those offering ‘legal advice’ to knowthat it is often no more than an opinion on how the law might be interpreted,and that different lawyers might well come to different conclusions. And so might judges.

I haven’t a cluehow robust the advice given to the Welsh Government was. It clearly does not draw the same conclusionas the advice given in Scotland,but as is ever the case, it only becomes clear who is right when a ruling hasbeen made. For the Welsh Government togive the absolute assurance being demanded by the Tories and Lib Dems isunlikely to be possible without a test case being brought. Up until that point, it’s just a differenceof legal opinion, compounded with a whole lot of political bluster.

And, apart frompolitics, I can’t see any motive for bringing a test case. If the Welsh Government won, then the currentsituation could continue; and if they lost, then they’d have no choice but toscrap the current provision as it relates to Welsh students in England. There’d be no winners, only losers.

And even at apolitical level, the Tories and Lib Dems might take some satisfaction if theywere proved right, but I can’t think that many students or parents of studentswould share their satisfaction. It doesn’teven look like good electoral politics.

Not all jobs are worth saving

2011-10-10T11:08:00.000+01:00

This specific storyis a couple of weeks old now, but the question of a tax on financialtransactions is one which will be around for a while. The Sunday Times referred to it againyesterday, but that’s hidden behind their paywall.

The UK Chancellorhas already said that the UK will veto the tax unless it is agreed worldwiderather then in Europe alone, although those EU countries keen to see such a taximposed are already trying to work out how they can find a workaround for anyUK veto – perhaps by restricting the tax to the Eurozone.

The UK’s objectionis based primarily on the potential job losses which might follow such a tax,amid concern that the activities will simply be relocated elsewhere. And, if the effect of such a tax were to besolely the relocation of the activities taxed, then such a concern is perhapsunderstandable; but what do we mean by ‘relocation’?

The FT story saidthat such a tax would “wipe out ordisplace up to 90 per cent of derivatives transactions”; and there are twoparts to that statement. That mirrorsthe fact that those seeking the imposition of such a tax have two objectives,and for me the second, that of discouraging excessive risky behaviour, is themore important.

As the EU’s impactassessment puts it, the term ‘relocation’ in this context “reflects both the move of activities elsewhere outside of the taxingjurisdiction and the disappearance of some types of activities … Suchdisappearance could be seen as positive if the activities targeted areconsidered as harmful”.

Certainly, it istrue that some of the jobs would be relocated elsewhere, but many of them wouldsimply disappear if, as the study predicts,“the volume of EU derivatives trades will plummet by 70 to 90 per cent”. That looks like a good result to me, not thedisaster as which those involved paint it. These trades are part of what causes volatility and instability as speculators and gamblers play the markets; they add nothing to the movement and allocation of real capital.

It comes back to asubject I’ve touched on in other contexts in the past. There are some forms of economic activitywhich, overall, do more harm than good, and supporting them because theyprovide jobs is a short-sighted view. Those of us who want to rebalance the economy away from damagingactivities have to accept that there will be job losses in the process – the challengeis to plan for the alternative future, not to protect the status quo.

Politicians and the BBC

2011-10-07T14:52:00.002+01:00

And on the subjectof cuts and budgets…

One much-lovedtrick of public bodies when engaged in a struggle to either obtain more fundingor else make unpopular cuts to services is to threaten to cut the most high-profileservices first. When the initialproposals are followed by the inevitable outcry, they either end up receivingmore money, or else making the cuts elsewhere. And those alternative cuts may still be unpopular, but will end up beingaccepted as the lesser of two evils.

I was reminded ofthis when I saw the proposals from BBC Wales today. I cannot think of anything more likely tounite politicians across parties than threatening to cut the coverage of whatthey say and do, and it has, indeed sparked the unsurprising outrage from threeof the four Welsh parties (although the Tories for some strange reason seem notto have objected yet – another indication that they don’t really care aboutWelsh politics, or have they just not cottoned on yet?).

The inevitablequestion in my mind is this – have the BBC already got a Plan B, and what isit?

Small sums, much fuss

2011-10-06T11:16:00.000+01:00

Council andGovernment budgets are lengthy and complex, and I very much doubt whether morethan a handful of those who vote on them can honestly say that they really knowexactly what they’re voting for or against. They have to pretend that they do, of course. That’s politics.

There’s also anatural human tendency to concentrate on what we can easily grasp. In one of my first meetings as a newcouncillor in 1979, I remember sitting in a council Personnel Committee andbeing stunned at how much debate there was about the expenditure of a fewhundred pounds on a course here or there for a member of staff, whilst across the Council,expenditures of millions of pounds were nodded through with no scrutiny at all.

It doesn’t surpriseme, therefore, that the political debate on the Assembly’s budget hasconcentrated on comparatively small sums rather than on the main thrust of thebudget (a point which was also made on the Bevan Foundation blog today).

It’s partly down tothe difficulty which most of us have with grasping a large and complex set ofnumbers; but it’s also partly about the difficulty of expressing complexalternatives to the public through the media. Simple points hit home more readily than complicated debates.

One of the issueswhich has been thrown to the fore this year has been about the extent to whichthe Government is right to use its reserves to maintain expenditure. (I’ll admit that I hadn’t understood untilreading the Bevan Foundation article that the use of these reserves was amatter for the UK Treasury rather than the Welsh Government. Update: See comment from Peter Black below; this appears to be a misunderstanding by the author of the post at the Bevan Foundation.)

‘Reserves’ arealways a thorny issue when budgets are discussed. Typically, oppositions suggest that theyshould be used and ruling parties like to sit on them for a rainy day (or, morecynically, an election year). There isn’ta ‘right’ amount to hold in reserve; whether using them is a ‘prudent way oftrying to maintain services’ (or reduce precepts) in difficult times or a ‘raidon the piggy bank’ is a matter of opinion rather than fact.

What parties aretrying to do in concentrating on the (comparatively) small, of course, is touse specific comprehensible examples to display their own values andapproach. I can’t help wondering,though, whether there isn’t a parallel with that Personnel Committee all thoseyears ago. Are the big sums reallygetting the scrutiny that they deserve?

Weeding out the incompetent

2011-10-05T11:33:00.000+01:00

Most peoplestarting a new job know and understand that there is some sort of ‘probationary’period, during which their new employer can sack them if they don’t provethemselves. It’s easy to see whyemployers want such a condition; judging people on the basis of an applicationform, cv, and interview is never going to be as effective as judging theiractual performance. And it’s not an unreasonablecondition.

But how much moreprotection than that do competent and effective employers really need? To listen to some business organisations, theanswer is lots. What they really seem towant is to be able to hire and fire at will, so that they have maximumflexibility with no come-back; the employees are just a resource like anyother.

Sadly, the UKGovernment has been listening to such views, and has proposed extending theperiod during which employees are barred from bringing a claim for unfairdismissal from 12 months to 24.

(In passing, it’s interesting to note that theannouncement was made by the Chancellor of the Exchequer – since when did hetake on the responsibility for employment law?)

In effect, thegovernment are proposing to double the period during which employers can legallysack someone unfairly. It amounts to condoningunfair action by employers as long as it happens within the first two years ofemployment.

Why should wetolerate ‘unfair’ dismissal at all? Ifthe dismissal is fair, then the employer will win any tribunal case. This proposal bans the reasonable cases aswell as the unreasonable ones.

The argument seemsto be that there is a cost to the employer of having to defend any action, andabolishing the right to bring a case will therefore save businesses time andmoney – but there are surely better ways of weeding out the vexatious casesthan simply banning all cases?

I can’t helpwondering why anyone would conclude that the way to protect employers from unjustifiedclaims is to abolish the rights of everyone, and simply allow unfair behaviourto go unpunished. Allowing people toignore health and safety rules for two years would be a good way of reducingtheir administration costs as well, but it doesn’t make it a good idea.

It’s anotherexample of the thinking that the way to make business competitive is to giveemployers more freedom to treat employees as they wish. Competent managers don’t need that sort of freedom. We’d be better off ensuring that thoserunning businesses have the competence and skills to do so, and to ensure thatthey treat employees fairly in the process, rather than simply licensingincompetence.

Simon Says

2011-10-04T11:14:00.001+01:00

With their repeatedclaims this week that the problem in Wales is that the Welsh Governmentis not following the same policies as the UK Government, the Tories demonstrateyet again their innate unhappiness about the whole principle ofdevolution. The ‘encouragement’ byCameron for the Welsh Government to follow the English lead in freezing counciltax is just the most obvious example.

It leaves the WelshGovernment in an uncomfortable position to say the least. If the government was setting out to put moremoney back into the economy in order to stimulate growth, then freezing counciltax would not be the most effective way to do that - restoring part of the cuts to the capital budget wouldbe a more effective approach.

It’s also the case thatthe savings to householders will be greater for those in the largesthouses in any area. It’s not true to saythat the freeze won’t help the ‘hard-pressed’ families; it’s just that it’salso a way of giving rather more to the wealthier. It has more to do with seekingelectoral popularity for the Tories amongst their target voters than withhelping the most hard-pressed.

So, on both counts –boosting the economy and helping those most hard-hit by the economic downturn –the Welsh Government would be right to conclude that freezing council tax mightnot be the best approach.

But there is nodoubt that the Tories have correctly assessed the popularity of the move; andthere’s little doubt in my mind that it would prove equally popular in Wales,even if council tax bills are already demonstrably lower here than inEngland. And with at least two of theopposition parties in the Assembly only too willing to jump on the populist bandwagon on the issue, I suspect that the Welsh Government have very little optionbut to follow the English lead.

Attempting to bouncethe Welsh Government into decisions by making announcements at a partyconference with no advance warning to Welsh Ministers is not the way that thedevolved administration should be treated. It clearly demonstrates that the political imperative of party advantagehas been given precedence over any idea of co-operation and consultation.

Coupled with the warning from 'RT' that devolution willsuffer a real crisis unless the Welsh Government falls into line behind England on arange of policies (I know that wasn’t exactly what he said, but it seems to meto be what he really meant), it does not auger well for the next five years.

Make haste slowly

2011-10-03T16:07:00.000+01:00

The Government’sproposal to increase the top speed limit to 80mph will no doubt appeal to thatsection of the population which regards adherence to laws on speeding as beingoptional. It tends to be the same group whichregards the use of speed cameras as somehow ‘unsporting’, as if the whole thingis a game in which the main object is not to abide by the rules, but simply toavoid getting caught breaking them.

I worked withsomeone once who was always late for meetings, because he already had ninepoints on his licence and couldn’t afford to drive fast enough to arrive ontime. ‘Set out earlier’ was the thoughtthat went through my mind; but the view that speed limits are somehow an unfairand unnecessary restriction on normal business is not unlike that being expressed bythe current government.

There almost seemsto be a sort of collective belief amongst some that speeding – like taking homethe office stationery – isn’t a ‘real’ crime. ‘Proper’ crimes have to have obvious victims, and an apparently ‘victimless’crime should therefore be treated differently. In reality, speeding isn’t victimless, and never has been - but it istrue that the ratio of crimes to victims is different. Whilst there is a victim in every single caseof robbery, the same is not true for speeding. Because the overwhelming majority of instances of law-breaking on themotorways do not have a victim at all, the misguided generalisation can gaincredence.

The government’sthinking appears to be rather muddled, to say the least. On the one hand, they argue that there willbe huge economic advantages in allowing people to drive that little bit faster;on the other they argue that the law as it stands is unenforceable, since halfthe drivers are already exceeding the limit anyway. I find it hard to reconcile those twostatements, unless the intention in reality is to increase the effective, enforcedspeed limit from 80 to 90mph.

I’m not convincedby the argument that so many people break the law anyway, that it’sunenforceable. It is, again, based onthe idea that there are different degrees of crime; it’s certainly not asuggestion that would be made for most other breaches of the law. Widespread disregard of a law is not, initself, an argument against the law, particularly if a major part of thatdisregard is based on an unwillingness by the authorities to enforce the law.

Nor am I convincedby the argument that it will enable people to get to their destinationsooner. Most of the motorway network isso congested that theoretical top speeds are rarely achievable anyway. Besides, work done by governments over manyyears has shown that total road capacity can best be increased by maintaining alower and more consistent average speed – it’s what has led to the variablespeed control systems used in places like the M25.

And paradoxically,increasing the speed at which some travel could have the end effect of reducingthe overall average speed of all motorists – leading to an increase in averagejourney time rather than a decrease. Thebest overall average speed for all seems to be achieved when the variationbetween the speed of different vehicles is reduced, not when the speed of thefastest is increased.

The one thing thatno-one seems to dispute is that the fuel and pollution cost of the proposedincrease is significant, and will make it harder to achieve agreed emissionstargets. For a government which said itwas aiming to be the greenest ever, it’s a major step away from that aim.

It may also affectthe balance of attractiveness between public and private transport. Although the actual impact on journey timesis likely to be minimal, that will not prevent people from believing that theycan achieve a journey in a shorter time, and choosing to use their cars as aresult. That belief may not be rational,but that doesn’t stop people taking decisions on the basis of it.

All in all it looksmore like an attempt to be populist in order to gain the support of aparticular section of the electorate than part of a coherent transport policy.

Splits and schisms

2011-09-29T16:13:00.002+01:00

It’s not often thatI find myself agreeing with Peter Black, and it always causes me to pause forthought when it happens. But I think he’sright to be dismissive about Peter Hain’s latest comments about a possiblesplit in the Lib Dems. (Actually, I'd probably say that anyonewho is dismissive about almost anything Hain says these days is more likely tobe right than wrong, but I'll stick to the specific here.)

There is a longtradition amongst politicians of seeing splits in everyone’s party but theirown, and as often as not it’s based on the assumption that what is mostimportant to the observer is also most important to the observed. But interpreting the motivations and driversof others through our own blinkers is never going to be the best way of predictingwhat those others might actually do.

From Hain’sincreasingly tribalistic viewpoint, being ‘not the Tories’, and never under anycircumstances working with the hated enemy, is a major driver of politics. But it isn’t what makes the Lib Dems tick. It doesn’t unite them in the same way that itappears to unite Labour.

I wouldn’t go asfar as Peter Black does in saying that the Lib Dems “…are not a loose coalition of individuals but a party held together bycommon values and a coherent philosophy”. Apart from anything else, the words ‘coherent philosophy’ are not ones Iwould generally use in the same sentence as Lib Dems; but I’m quite convincedthat he’s right in saying that there’s more that holds them together thanpushes them apart.

Foreseeing a splitalong lines which just might be favourable to Labour is to lose sight of thosethings which the Lib Dems share. But it’san approach which isn’t restricted to Hain and the Labour Party.

I feel the same waywhen I see some nationalists predicting the inevitable split of the LabourParty into its Unionist and Nationalist wings. Certainly there are differences of opinion within the Labour Party abouthow far and how fast devolution should progress, but the constitutional statusof Wales is no more the most important internal dividing line to Labour than isthe question of not being Tories to the Lib Dems. There is more holding the different strandsof Labour together than there is pushing them apart.

I suppose thatseeing splits and schisms in other parties makes good headlines, even if it's really just a bit of nonsense. But there are two other things that worry me about it as an approach.

The first is the idea that themachinations of parties and politicians is what politics is about, rather thanoffering a choice between alternative futures. It’s a very poor substitute for actually presenting an alternative andpersuading people to support it.

And the second is that it looks like an attempt to define one party in terms of another - in effect, another way of avoiding real debate about substance. Better, surely, to seek to define yourself on your own terms than allow yourself to be defined on someone else's.

But where's the ploughshare factory?

2011-09-28T10:04:00.000+01:00

Many of the jobsbeing lost as a result of the cutbacks at BAE systems are the sort of skilledengineering jobs which are key to maintaining a manufacturing capacity at atime when so many manufacturing jobs have been exported to the Far East as a result of untrammelled globalisation. And the job losses will be a heavy blow forthe individuals and communities concerned.

The losses are,however, an inevitable result of cutbacks in military expenditure, whichunderlines two important points.

The first is thatcuts in public expenditure don’t only affect jobs in the public sector. Listening to some members of the government,one would believe that it’s only the ‘bloated’ (one of their favourite words)public sector with its ‘gold-plated’ (another favourite term) pensions andconditions which is being cut, and that cuts to the public sector are entirelynecessary to restore the public finances. In practice, there is a much higher degree of interdependency betweenthe sectors than that.

And the second isthat it is not possible to cut back on military spending without there being animpact on jobs and the economy – and I say that as one who has regularly andconsistently called for a scaling down of the UK’s military expenditure. ‘Swords into ploughshares’ is a two-partprocess; the second part is as important as the first, but is completelymissing from government strategy.

I can understand thereaction from trades unionists and politicians, which has been to criticise thecutbacks and seek protection for the jobs, but it’s the wrong reaction. What we need isn’t protection of jobsproducing military hardware, but a planned and managed switch of those jobsinto peaceful manufacturing. Lookingonly at one side of the equation is short-sighted.

It's an ill wind...

2011-09-27T11:37:00.000+01:00

That would be akind interpretation of what one trader had to say about the possibility of afurther economic collapse. Too kind, infact – far too kind.

It’s unclearwhether he’s as central or as influential as he makes out, but I suspect thathe’s only saying what many others of those involved in the ‘markets’ arethinking but have more sense than to articulate so publicly. There will be many of them who have beenplacing large bets on a negative outcome for the Eurozone in the hope ofenriching themselves and their clients at the expense of ordinary workingpeople in countries such as Greece.

So what? What’s wrong with a little flutter, whetheron the horses or on the markets?

The problem ariseswhen the act of betting starts to affect the outcome of the event on which thepunters are betting. In horse racing, itdoesn’t matter how many people back the favourite; the amount of money bet on aparticular horse will not affect that horse’s performance directly. (It may encourage dishonesty or nobbling, ofcourse, but that’s an indirect effect).

In the moneymarkets however, the betting directly affects the outcome. This isn’t a case of a quiet wager betweenfriends about where prices will be tomorrow or next week; these bets are madeby trading in the instruments, and that trading affects the price. If enough people bet on a particular outcome,then that outcome becomes more likely.

Supporters of thefinancial markets would argue that the outcome in fact reflects the collectivewisdom of the experts in the field. Fromthat perspective, it’s a bit more than a mere gamble, because it’s aboutpredicting what is likely to happen and planning to benefit from thatoutcome. So, if collective wisdom saysthat Greeceis going to default, then protecting themselves and their clients from theeffects of that is just doing their job.

It is thefundamental untruth behind that apparently reasonable line which the commentsof this one trader expose so clearly. The betting on a Greek default isn’t driven by collective wisdom at all,but by naked self-interest. They want Greece todefault so that they can make money as a result.

The question forthe rest of us is why we allow the financial system on which our daily livesdepend to be run in such a fashion. Whydo we allow capital to remain as king?

Legislation and delivery

2011-09-23T13:49:00.001+01:00

The comments madeby Sir Emyr Jones Parry on the Welsh Government’s legislative programme havebeen extensively reported. And it’s nosurprise that some critics of the current government have been quick to seize upon thecomments as justification for their stance.

It’s hard to disagreewith the suggestion that integrated cycle paths may not be the most relevantresponse to the economic problems being faced by Wales. And it’s equally hard to disagree with thesuggestion that the Welsh Government’s legislative programme shows a certainlack of imagination and willingness to use the new powers devolved to theAssembly.

But reality, asalways, is rather more complex than that.

I don’t know towhom in the four parties Sir Emyr spoke during the referendum campaign abouthow they would use the new powers, but I may have been involved in respondingto the question on behalf of one of them, when giving evidence to theConvention. (And, thinking back to whatwe said, probably not the party which gave him half an answer!) It was a point that he was very keen to raiseduring the Convention’s hearings. It was– and is – a valid question to ask at one level, but it wasn’t – and still isn’t– that easy to answer.

Even with the newpowers, the situation in Walesremains one where specific powers are devolved under a multiplicity ofdifferent Acts and Orders, and no-one really knows exactly what the Assemblycan and can’t do until a specific proposal is put forward and examined indetail by the lawyers. It’s quitedifferent from the situation in Scotland,where everything is devolved unless otherwise stated, and it makes it quitedifficult to put forward a detailed legislative programme without a lot oflegal work in advance.

Plus, from my pointof view in trying to respond to his question, the new settlement wasn’t what Ireally wanted anyway. It would have beenmuch easier for me to say how I would use the powers of an independent Wales; what can be done within the currentsystem is necessarily a compromise for those of us who want to see Wales as amember state of the EU.

At another level, it’salso a very one-sided question – it suggests that those who wanted powersdevolved had to say how they would use those powers, but those who felt thatthe powers should stay where they were had no need to provide a similarjustification for their opinion. As I recall, Sir Emyr suggested that it was arrogant of us to ask for more powers without providing such justification. But the argument for wherepowers should sit is not – certainly from a nationalist viewpoint – predicated onhow they will be used.

Returning to thesubstance of Sir Emyr’s criticism, I’ve commented before that I thought thatall of the manifestos for this year’s Assembly election were lacking inimagination, but in the case of new legislation, that would inevitably be the case for any party trying to putforward a legislative programme which was entirely achievable within thecurrent settlement.

The more importantquestion is the extent to which we judge a government on its legislativeprogramme compared to the extent to which we judge it on its deliveryperformance. Governments exist to dorather more than pass new laws – there’s far too much of a tendency to respondto any situation with a proposal for a new law. It shows the sort of macho responsiveness so beloved of politicians, butoften more can be done – and more quickly – by using existing legislationcreatively and imaginatively.

Assuming that onecan adduce a government’s priorities, and then judge that government, purely byconsidering its legislative programme doesn’t seem to be a sensible approach tome. In the field of economics, deliveryis more important than new laws at this stage.

And it is ondelivery rather than on legislation which we should judge the currentGovernment. Judging them on the contentof their legislative performance may well give them a very negative score, but it isletting them off the hook on the far more important issue, which is their poorperformance in delivery.

Controlling policy, or refusing planning consent

2011-09-22T13:01:00.000+01:00

The argument putforward by the UK Government for not devolving planning control over largeenergy projects to Wales seems to be based largely on the statement that “We believe that a streamlined planningsystem that minimises delays and ensures investor confidence is best deliveredthrough a unified planning system for major infrastructure for England andWales together”.

The basis for that ‘belief’is unstated; presumably, it’s so obviously true to them that it doesn’t needstating. (Although the statement does display their keenness to look after the interests of 'investors' rather then residents.) It won’t be so obvious toothers though, particularly since the same logic is not being applied to Scotland. If a unified system works better forEnglandandWales than two separate systems, why would the same not be true for aunified UKsystem?

The same issue ofthe Western Mail contains a contribution from Owen Smith MP to the letters page, deprecating thesuggestion that Walesshould have its own cricket team. Hislogic appears to be that “In cricket, asin so many aspects of life, we are stronger together”.

Again, it’spresented as some sort of self-evident truth; but why would the same not betrue in the field of rugby, say? Doesn’tconsistency of argument require the author to advocate the abolition of theWRU?

The common threadbetween the two questions is an innate (small c) conservatism; what exists todayshould continue to exist. It’s based, atheart, on axiom.

The way in whichthe energy decision has been portrayed is a more serious issue. The Welsh Government hasn’t really proposedthe devolution of powers over energy policy, although that’s what the storysuggests. The debate is simply aboutplanning control over energy projects - that is not at all the same thing. It’s more about having the right to say ‘no’to specific projects than about taking responsibility for developing andimplementing a sustainable energy policy for Wales into the future.

I’d be much more supportive of the Welsh Government’sposition if Welsh Ministers were to formally ask for full devolution of energypolicy rather than just planning control. I suspect, though, that they may be more than a little frightened of theresponsibility that would accompany that.

Averages and actuals

2011-09-21T13:12:00.000+01:00

The Lib Dems seemdetermined not to let go of their obsession with the ‘funding gap’ ineducation, which shows that the total spent on average per pupil in Wales is£604 less than the total spent per pupil on average in England. It’s as unclear as it ever was how importantthat gap is, or how much difference putting extra cash into education to closethat ‘gap’ would actually make, but that seems to be mere detail to the LibDems.

Their simplisticslogan, that for them to support any budget, the budget must show progresstowards closing the gap, raises more questions than it answers. For starters, why – on the basis of whatevidence, exactly – is the English average the ‘right’ amount to spend perhead? Where does the idea come from thatbecause Englandspends £6,200 per head then that is the ‘right’ amount to spend?

And then, how dothey want to close the gap, precisely? The implication which most people will read into their statements (andI’m sure the one that they will want people to read into them) is that theywill simply fund each and every pupil by an extra £604 per year.

Job done? Well, not exactly, for a number of reasons.

Firstly, by anyanalysis of the figures, Londonis a special case. The spend per head inLondon is very much greater than it is in anyother region, more than 50% higher than the ‘rest of England’ average. It’s more realistic to disregard the London figure, and look solely at the difference between Wales and the ‘rest of England’. That difference is £412, not the £604 figureoft-quoted by the Lib Dems (or, as they seem to prefer for maximal propagandaeffect, ‘more than £600’). So perhaps weneed only increase all education budgets by £412, rather than £604.

Again, not exactly. The reliance on a high level comparison ofaverages might be a useful political tool, but it is of much more limited usein actually understanding the numbers. Averagescan sometimes conceal more than they reveal – and in this case, they neatlyconceal the fact that the difference between authorities within Wales issignificantly greater than the difference between the English and Welshaverages.

Four of Wales’ education authorities already spend morethan the ‘rest of England’average (and two of those already spend more than the English average includingLondon). If the English average is the ‘right’ amountto spend, why should not these authorities be penalised for spending too much?

And, leading onfrom that, if there is a fundamental problem – so severe as to make the WelshGovernment’s budget unsupportable without action to address it – in the factthat the Welsh average is £412 (or £604; the argument is the same) behind theEnglish average, what about the situation within Wales?

The differencebetween the highest spending authority (Ceredigion, at £6,340) and the lowestspending authority (Vale of Glamorgan, at £5,001) is £1,339. That’s more than twice the size of the headlinedifference between England and Wales, and more than three times the size of themore meaningful comparison between Wales and the ‘rest of England’.

That internal gapis something which is entirely within the control of the Welsh Government toaddress; the fact that no-one seems particularly worried about its existenceunderlines how misleading simple mathematical comparisons can be, unlesscomplemented by an attempt to understand why differences exist and howimportant they are.

A simplistic concentrationon spend per head is little more than a band-wagon riding diversion fromexamining the real problems which we have in our education system in Wales, whichare far more complex than a simple debate about funding. It’s playing to the gallery rather thanshowing any understanding of those problems, or any willingness to get to gripswith them.

Elusive proof

2011-09-20T11:16:00.002+01:00

Science and politicsdon’t always sit easily together. It’stempting to suggest that that is because science seeks truth, whereas political‘truth’ is always changing. That isn’tentirely fair though; scientific truth can change as well, albeit not as easilyor conveniently as political truth. Thetimescale question is probably a more relevant one. Politicians’ horizons areoften limited to the date of the next election, whereas science tends to thelonger term view.

Climate change – ormore specifically, the anthropogenic element thereof – is an example of the wayin which scientists and politicians are driven by different considerations, andon very different timescales. Seenthrough the eyes of a politician interested in short term economic benefit, these comments by the MP for Monmouth make some sort of sense.

His core argumentseems to be that if one country alone tries to take radical action to reducecarbon emissions, whilst others do little or nothing, then that one countrywill be seriously disadvantaged economically in the short term. He’s right; the problem is not with that partof his argument. (Although the conclusion drawn – that we should not do anythingeither – is far from being the only possible conclusion from that line ofthinking.)

Such reasoning leadsto a situation where no-one does anything until everyone else agrees to act aswell. If the science is right on climate change, such a conclusion is a recipefor disaster. But as long as it doesn't happen inthe timescales of any elections which current-day politicians are likely to befighting...

Underlying hisargument is another strand, which goes well beyond the question of unilateralaction. It is clear that he is notconvinced about the existence of anthropogenic climate change in the firstplace, because it hasn’t been ‘proven’ to his satisfaction. And he highlights a number of issues andstatistics which underline that lack of conclusive proof.

In taking that viewpoint, of course,he’s far from being alone, although it’s a view which seems to be more widelyheld by politicians and economists than by the experts in the field. And, up to a point at least, he’s right onthat as well.

‘Proof’ of ascientific proposition is an elusive beast, and greater understanding over aperiod can, and frequently does, lead to refinement or even fundamental changeof the basic proposition. But lack ofcomplete proof is not at all the same thing as complete lack of proof; however,a jump from one to the other is all too readily made.

I’d accept thebasic point that the impact of what we’re doing to the earth is not currentlyfully understood, and that many of the predictions are based on models which make anumber of assumptions. They may be thebest possible assumptions, and they may be made by people who’ve spent alifetime working in the field, but they’re still assumptions.

What we know forcertain however is that human activity is adding CO2 and other greenhouse gassesto the atmosphere, and that the concentration of those gasses in the atmosphereis increasing. The danger behind thethinking of people like David Davies is that we wait until the impact of thatis entirely proven before acting – at which point it will be too late.

I don’t unquestioninglybelieve every prediction being made by the climate scientists; but given achoice of following their advice or that of a layman who happens to be an MP, Iwouldn’t choose the MP.

False economies

2011-09-16T13:52:00.000+01:00

This story in today’sWestern Mail neatly highlights one way in which attempts to cut costs in theshort term can backfire and lead to cost increases in the long term. And whilst this may be an extreme example, I’veseen other similar cases before. Thepublic sector is particularly prone to this problem, in its striving to achieve– and demonstrate – open competition and value for money.

I’m not sure that Ientirely accept the figures quoted in this example, to be honest. I find it hard to believe that each of 30different companies would really decide, individually and separately, to spend£3,000 on bidding for a contract worth only £20,000, knowing that price was akey element in winning. Spending 15% of the maximum total revenue value of a contract on the sales process looks excessive to me. The onlysensible decision for a company faced with that level of cost and competitionfor such a small contract is to qualify themselves out and decide not to bid.

And that’s thefirst way in which an excessively costly pre-sales process can actually pushprices up – some of the more competitive and cost-conscious companies willsimply decide not to bid.

If we take the figuresas correct however, then presumably the procurer – in this case an unnamed local authority –might argue that the £90,000 in costs incurred by bidders isn’t their problem. They’ve secured the best possible deal fortheir own authority, and that’s the beginning and end of their responsibility. It’s a short-sighted viewpoint.

Every company whichspent £3,000 on an unsuccessful bid will be looking to recoup that sum on thebusiness it does win; those pre-sales costs are thus effectively factored in toits prices. And if they are going to lose29 out of every 30 bids they submit, that’s an awful lot of factoring in.

It’s also thesecond way in which open tendering for small contracts can push overall pricesup rather than down.

Most companiestendering for business should be expecting to win 1 in 3, or at very worst, 1in 5, of the contracts for which they tender. Any lower than that, and their pre-sales costs will start to make themuncompetitive. A wise public sectorprocurement process which was serious about wanting real, long-term, value formoney would recognise that. If the rules to which public bodies are working are forcing, or even encouraging, the sort of approach highlighted by this article then they need to be changed.

Stimuli, jobs, and multipliers

2011-09-15T14:35:00.000+01:00

The latest figuresfor unemployment once again bring to the fore the question of whether the UKGovernment is following the best economic strategy or not. And the fact that a different approach inScotland has apparently led to a different outcome will add to the demandfor a change of policy, although I’d be cautious about reading too much intoone set of figures – people who claim to have the answer too quickly can alltoo easily be proved wrong a month or two later.

There are someeconomists who favour one approach, and others who favour another – it sometimesseems that politicians are vying to see who can come up with the biggest nameeconomists in support of their position. But ultimately, the question is more a political one than an economicone, and has as much to do with the question of who wins and who loses duringthe process of recovery as it does with recovery itself.

In that context,recovery through fiscal stimulus rather than recovery through fiscal rectitudewill inevitably be the favoured approach of those of us who see economicfairness as an objective, rather than merely looking at the overall bottomline.

There is a danger,though, that in advocating a particular approach we overstate the potentialimpact. I don’t doubt that a stimulus,in the shape of spending on government capital projects, will benefit theeconomy, but the extent of that benefit depends on the multiplier effect, andsome of the claims for the numbers of jobs likely to be created from a givenstimulus seem to be assuming an extremely high multiplier.

What the size ofthe multiplier effect is – or even whether there is one – is a matter of somedebate, as this article from the Economist demonstrates. An estimate of between 1 and 2 is probably reasonable;yet some claims for jobs created seem to assume a multiplier of up to 10, afigure for which I can see no substantive supporting evidence.

There seems to belittle dispute that an expanded programme of spending has a greater impact thana tax reduction of the same amount – because the multiplier is higher. Although a temporary cut in VAT might bepolitically popular, it’s unlikely to have as much effect as investing thesame amount of money in capital projects. Those who are serious about wanting a stimulus should really beconcentrating on capital spending rather than tax cuts; concentration on taxcuts looks more like propaganda than economics.

But they should notbe overstating the impact of their proposals, particularly in terms of thenumbers of jobs likely to be created. Creating false hopes may look like good politics in the short term, butit inevitably leads to disillusion over the long term.

The hecklers' accolade

2011-09-14T10:33:00.000+01:00

Ed Miliband, I’msure, knew exactly what he was doing when he spoke to the TUC yesterday – beingheckled was just a bonus for him. Hiswords weren’t really aimed at those sitting in the hall, they were aimed at thetelevision cameras, and the hecklers merely ensured that they made the news.

He, and his party’sstrategists, will have concluded in advance that the trade union delegates – inEngland, anyway, which is where the bulk of them live – have nowhere else to gopolitically. It doesn’t matter whatLabour do or say, they’re not going to turn to the Tories or Lib Dems; theirvotes are safe.

Outside the hall,however, Labour need to attract back the votes which Blair attracted in three successiveelections, and it is to their prejudices and opinions that Miliband needs toappeal, since – like most politicians – he’s more interested in saying whatpeople want to hear than in offering an alternative vision.

I don’t knowwhether it will work or not, but the accolade of being heckled by the TUC willcertainly do him no harm. It couldalmost have been scripted.

Consultants for the union

2011-09-13T14:24:00.004+01:00

An ex-boss of mineused to say that “A consultant is someonewho borrows your watch to tell you the time”; i.e. that organisationshiring consultants do so not because they don’t know what to do, but becausethey need someone from outside to say it. Usually because there’s something more than a little unpalatable aboutthe answer.

I suspect that thegovernment decision to set up an independent commission to consider theinfamous West Lothian question is following a similar path. The government knowwhat has to be done, but need someone else – some ‘independent experts’ – to sayit first.

There are onlythree real alternatives available. Thefirst is to carry on muddling along (with or without a few minor changes), thesecond is to roll back devolution, and the third is to formalise anEngland-only rôle in legislation. Thefirst is probably politically impossible for the current government, and the second is apolitical impossibility without the consent of the devolved nations – a consentwhich, in the words of Macbeth, "stands not within the prospect of belief".

That leaves onlyone realistic logical option open, and any commission which properly considersthe question is likely to come to the same conclusion. I suspect that Cameron and his immediatecircle already realise that – and fully understand how difficult it will be tosell the consequences to his own party. Time for an ‘expert’ review.

It isn’t theconclusion which will be hard for many Tories to swallow, particularly in England; it’sthe ramifications. Wrestling with alegislature which sometimes has to deal with UKissues, sometimes with English issues, sometimes with EnglandandWales issues, and sometimes with orwithout Scotland and/or Northern Irelandto consider as well creates a situation where drawing up a complete and clear set ofrules covering who may vote on what would be a total nightmare. Theobvious and logical answer to that nightmare can be summed up in a single word –symmetry.

A symmetricalapproach to devolution – where Wales,Scotland, and Northern Irelandhave precisely the same powers devolved to them – would make it so much easierto identify and handle England-only matters; whether by special sittings of theUK Parliament or by a devolved English Parliament is essentially irrelevant. Either approach implies something very akinto a federation – although it doesn’t have to be called that – and could end upbeing a fairly stable arrangement for some time to come.

It’s far from beingunimaginable that the most radical devolution proposal to be offered to Wales couldyet come from an initiative which is aimed primarily at ‘saving the union’, bythe most unionist party of them all. Andit’s far from unimaginable that it might even work.

More than semantics

2011-09-09T09:21:00.000+01:00

The I-word was thesubject of much debate within Plaid, over decades, before it was finallyadopted as policy. Prior to that, theapproved phrase was ‘full national status’, a phrase coined by Phil Williamsbecause it meant the same thing, but avoided using the dreaded word.

I always felt thatthe objection to the I-word was more a case of semantics than ofsubstance. It was long clear – well, itwas clear until about 2000 anyway – that Plaid’s aim was to achieve the samesort of status in the world for Wales as that enjoyed by other free nations,such as Ireland, Denmark etc., but the argument was that none of thesecountries were really and truly independent, they were all interdependent. ‘Independence’was not therefore a wholly accurate description.

It’s a good point,and one with which I entirely agree at an intellectual level. The problem was that the common usage andunderstanding of the word ‘Independence’ is precisely that state of freedomenjoyed by countries such as Ireland and Denmark, and trying to avoid using theword that citizens of those countries would naturally use ended up lookingshifty and dishonest.

If there’s onething that Dafydd Elis-Thomas has always liked, it’s being controversial. If he can upset a few, or even a lot of,members of his own party in the process, so much the better. I don’t doubt for one moment that his commentthat Waleswill ‘never’ be independent will do both of those things.

The question,though, is what does he actually mean? Is he making a substantive point, or is he merely playing at semantics? If he is simply restating that long-standingintellectual objection to the use of a particular word, then he’s sayingnothing at all new, just re-opening a debate which was over and done with yearsago. And people would be getting upsetand annoyed over nothing more than a bad attack of semantics.

But this looks likemore than semantics to me. It soundslike a declaration of his intent to continue along the path trodden by IeuanWyn Jones, of turning Plaid Cymru into a post-nationalist social democraticparty which seeks further gradual devolution with no clear defined end-point.

There’s nothing atall wrong with having such a party in Wales; there’s a clear rôle forsuch thinking. But we already have atleast one such party – and arguably up to three of them. What does another one add?

Where's the evidence?

2011-09-08T12:07:00.000+01:00

The call by anumber of leading economists for the 50p top rate of tax to be scrapped isnothing new. Nor are the dire warningsabout lack of competitiveness if we don’t reduce tax rates for the most highlypaid. But where is the evidence insupport of that proposition?

Chris Dillowblogged yesterday on the same question, and provided a good rebuttal of thebasic claims. In truth, there is no realevidence that the marginal rate of tax on the highest paid has any realinfluence on where people live or on where they set up businesses.

Economistssometimes seem to assume that we will all behave according to their models ofwhat motivates us, and will all be continuously seeking marginal economicadvantage. In reality, we are much morecomplex than that, and decisions depend not just on one single factor, but on arange of issues.

The question weneed to address in rebuilding the economy is not whether a particular tax rateis or is not a disincentive, but the overall certainty of a reasonable returnon investment, whether of money or of labour. And that return is not measured simply in financial terms.

At heart, the callfor a reduction in the top rate of income tax isn’t about economics pure andsimple; it’s about an ideological interpretation of economics, in whichinequalities of income are seen as an inherently good thing, based on theassumption that acquisitiveness is the prime human motivation.

It really isn’t theonly possible model for human behaviour.

Half full or half empty

2011-09-07T16:07:00.001+01:00

Whether or notbetter communications links have the business impact that is claimed is unclearto me. I’m sure that poor links areunhelpful, but less convinced that good links, in themselves, will make thelevel of difference often claimed.

When it comes torail links, I am convinced that better, faster, more reliable links willencourage a shift from road or air to rail, and are worth doing for that reasonalone. The claim that Wales could lose 21,000 jobs as a result of theHS2 link from London to Birmingham and points north is a figure whichI’d treat with some caution, though.

As I recall, theFrench experience with the TGV services was that demand grew faster, and to ahigher total level, than any of the advance projections suggested; but that thevast majority of those travelling were doing so for leisure rather thanbusiness purposes. I rather suspect thatthe UKexperience will mirror that - if a network is ever actually built.

And that ‘if’ wasmy main concern with this story today. Although those quoted didn’t actually goso far as to say it, it almost seemed that they were arguing against buildingHS2 at all, because of the possible adverse impact on Wales. It’s a tempting conclusion from a Welsh perspective – but it would bethe wrong one.

The problem withconsideration of high speed lines in the UK is that it’s all being done on suchan ad hoc basis; there is no master plan, no vision for an integrated transportnetwork linking up major cities across the UK as well as linking with cities on the mainland of Europe. The result is that there is a danger ofpitting areas against each other. There’snothing wrong with a bit of lobbying, or even a lot of lobbying, to be first inthe queue; but it rapidly becomes destructive if the queue only has room for one.

I think there aregood arguments for the link to Walesand the West to come ahead of the northern link, but if we can’t have firstplace then it’s better to be arguing for an early extension to the queue than to argue againstthe northern link. An excessively negativeapproach could simply mean that we’d all lose in the end.

Catching criminals

2011-09-06T13:04:00.000+01:00

There’s a certaininevitability about the way in which press coverage of lengthy reports willtend to highlight a few striking points rather than delve into the detail. This report in yesterday’s Independent wasno exception; faced with a 105 page report from the Policy Exchange (availablehere), no brief summary was ever going to do more than scratch the surface. (Interestingly, the same report, almost word for word, appeared in the Western Mail as well as in the Independent)

One of the headlinefigures associated with the story was that “14,500police officers in Wales andEnglandmade no arrests last year”. It’s aneye-catching figure, but my reaction was to ask ‘so what?’. Is the number of people arrested really theright criterion for judging the success of the police service? I’m more interested in levels of crime –preventing and deterring crime is surely a better outcome than catching peopleafter the event.

In fairness to thefull report, it takes a much more rounded view of the efficacy of the police servicethan that one figure suggested, and the most important overall conclusion drawn,to my mind, was that increased expenditure on the police, and increased numbersof staff, have not resulted in a commensurate improvement in performance in termsof crime solving and reduction.

But would we reallyexpect it to? There is no reason whycrime should be different from any other phenomenon; the marginal cost of asmall reduction is likely to get higher as the total falls. Determining how much we are prepared to payfor a given additional level of further reduction is precisely in the sphere ofpolitical debate about priorities.

That doesn’t meanthat the police service cannot find ways of doing some things more efficientlyor cheaply, of course. No organisationof that size is without potential for improvement, and the police must besubject to the same level of scrutiny as other services.

In that context,the report raises some interesting points about civilianisation, and effectivelyquestions whether the investigation of crime requires the same skill set andtraining (and subsequent salary costs) as those required by uniformed warrantedofficers. It’s not the first time thatquestion has been raised recently – there was a suggestion not long ago thatthe long-standing rule that all police officers of all descriptions have tostart as ordinary constables should be revisited.

The suggestion isanathema to many in the service, but that is not reason enough to reject itoutright. The UK approach to policing – as asingle integrated service – is far from being the norm elsewhere. Many countries have multiple police forcesdealing with different issues at different levels. Rather than concentrate simply on costs andefficiency, it might be better for us to take a more radical look at policingin general.

How much will we benefit?

2011-09-05T18:56:00.001+01:00

There seems to be a general welcome for the proposal to build a rail hub at Heathrow with a direct connection from South Wales, but I’m not entirely convinced that it will be as beneficial to Wales as is being claimed. As with so much else, the devil is in the detail.

Whilst in principle, any improvement in the rail network will help to encourage a switch from road to rail, there have been no hard numbers in the reports which I’ve seen. I don’t know how many people actually travel from South Wales to Heathrow in the first place, but that will surely be a key factor in determining how many trains run direct rather than involve a change at Reading, and thus how much benefit the proposal brings.

My guess is that most of those travelling from South Wales to airports in London do so for leisure purposes rather than business purposes – which would make Gatwick a more likely destination. It also seems that most of the services to Heathrow are likely to involve a change of train; and no matter how good or frequent the shuttle service from Reading to Heathrow, a change of train will always reduce to some extent the number of people choosing rail rather than road.

Linking into the European high speed rail network would be a definite plus, but from the information available to date, it appears that the link to HS2 is a one-way link – good for going north to Birmingham etc., but not for heading east to the Channel Tunnel, leading to a danger that the proposal encourages, rather than supplants, air travel to near continental destinations.

But the biggest claimed benefit is in terms of the boost to the economy, something for which I’ve seen no evidence at all. Whilst it is clear that poor communications links can put us at a disadvantage, the negative doesn’t prove the positive, and I fear that the business benefits are being significantly over-hyped.

And one final question which none of the reports has answered as yet – is this an English project, which means a largish sum of capital money available for investment in Welsh infrastructure under the Barnett formula; or would I be right in suspecting that it will be regarded by the Treasury as a UK project - from which the Welsh share of the benefits is likely to be considerably less than the Welsh share of the costs?

Getting there eventually

2011-08-20T08:55:00.000+01:00

It took a while, but the real cost of PFI has finally been recognised by an all-Party committee in the House of Commons. It is, as many of us were saying all along, an expensive way of borrowing money, became little more than a device for keeping debt off the balance sheet, and should be scrapped. And some of those who were egging the Welsh government on to not spurn this source of investment capital should feel more than a little egg on their own faces.

No surprise that the CBI want to keep the system; after all, the organisation’s members benefited from it by making greater returns on investment than would otherwise have been the case. It’s a little misleading to suggest though that this was the only way of attracting private finance to invest in infrastructure. After all, much of what the government borrows to invest directly comes from private finance – it just doesn’t pay as well.

The other argument for PFI was that it enabled the government to reduce its financial risk. There is, indeed, an argument – in principle at any rate – for paying a higher effective rate of interest if the project is lower risk, or even risk-free. It’s a calculation which is complex, but a transfer of financial risk to someone else can justify paying a greater return to them.

The problem with PFI though was that there was little or no transfer of real risk. The customer – us – remained exposed to most if not all of the risk, and at an often increased level of risk due to the higher cost. The suppliers of capital, meanwhile, found themselves with a fairly low risk cash cow. Why wouldn’t they want to keep that system going?

The question now is what happens next. Will the government do as it has been advised, and buy its way out of these contracts, or will they remain a financial milestone for years to come?

Borrowing and investment

2011-08-19T16:18:00.000+01:00

That there must be limits to economic growth is self-evident, but pinning down precisely where and when those limits will be reached is considerably harder. Whilst pretending that we can carry on and simply ignore the issue is foolish complacency, there is a danger that those of us who take an alternative view can sometimes sound a bit like American fundamentalists looking for evidence of the End Times.

To listen to Vince Cable, one would think that economic recovery depends largely on a willingness by the banks to lend more money to businesses for investment. I’m not so sure; and not solely because it sounds like a return to the excessive lending which was part of the reason for the crash in the first place.

Dylan Jones Evans pointed out about two weeks ago that “it is estimated that large companies in the UK are currently sitting on around £65 billion of cash within their balance sheets”. As far as big businesses are concerned, at least, it isn’t simply a matter of lack of access to capital.

Dylan puts the lack of investment down to this stuff called ‘confidence’ – or rather, the lack of. I’m not so sure, although I suppose it depends on confidence in what. But I wonder whether there isn’t also a serious lack of investment opportunity at present.

My doubts were heightened by the reported comments of another well-known Welsh-based economist, Patrick Minford (coincidentally in the same edition of the Western Mail), in which he suggested that we could be in for a long period of readjustment, and that the global economy simply cannot expand any more at present.

It certainly seems likely that we will be facing a world in which countries such as China and India use a growing proportion of available resources, and probably without a significant increase in the total availability. It’s also likely that they will be meeting higher levels of domestic demand as well.

Price rises for many commodities and raw materials would be an inevitable consequence of the former, and for finished goods of the latter. It’s hard to see where demand is going to come from in our own economy if we have both rising prices and falling real wages.

Faced with a possibly lengthy period of stagnation, Plan B needs to be about more than a difference in the speed and size of public sector cuts.