Getting there eventually

Tweet 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

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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.

Inequality, aspiration, and consumerism

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Much of the political reaction to the rioting in a number of cities was pretty predictable.  For some, it was the result of a ‘broken’ society - and therefore the fault of the previous government, for allowing it to get broken in the first place.  For others it was the result of cuts to public spending - and therefore the fault of the current government.  

(Although some of them seemed to be a bit confused about which cuts they were referring to.  Were they concerned about those cuts which might have affected the communities where the rioters lived, or more immediately about the ones that might simply mean fewer policemen were available to deal with the rioters?  It sometimes looked more like the latter than the former, with no obvious recognition of the huge difference between the two positions.)

Then, closer to home, there were those who saw it more as an ‘English’ problem.  The report from Professor Adamson yesterday should have been more than enough to debunk that one.  There is nothing about any of the suggested underlying causes which seems to me to be likely to change just because of what is currently little more than an internal boundary between two parts of the same state.  (There may well be something in the argument that Wales is more rural, and its major conurbations smaller, than the cities affected, but that is equally a difference between different parts of England; it isn’t a simple Wales/England distinction.)

The problem with a largely political response is that so many politicians work on an essentially very short time horizon, defined mostly by the electoral cycle.  It leads to a superficial point-scoring approach, well-illustrated by the latter part of this post from Peter Black.  An attempt to say that it shouldn’t be a blame game – after a paragraph putting the blame squarely on other parties – sounds more than a little hollow; but he isn’t the only politician, nor is his the only party, to have attempted such sophistry.

Underlying many of the different analyses is a mindset which sees ‘problems’, and assumes that what is needed must therefore be ‘solutions’.  Such a rational and logical way of looking at things is part of the current zeitgeist, but seems to me to be more than a little detached from an understanding of the nature of humanity, which never has been – and probably never will be – amenable to such purely rational analysis. 

Trying to find a way of enforcing or encouraging conformity to the prevailing norms might well appear to be an entirely rational response to mass breaches of those norms, but defining the problem in those terms makes a lot of presuppositions.  And, as an aside, conformity to prevailing norms isn’t the human attribute which has driven the development of civilisation.

Insofar as there is an underlying trend which can lead to such outbreaks, we need to be taking a much more long term view of the way in which society is changing than we are hearing at a political level, and Professor Adamson expresses that well when he talks about the way in which the distance between rich and poor has been increasing.

It has done so inexorably over many decades; and it is something which governments – of both parties – have not only tolerated, but actively encouraged.  It ought to be enough to lead to a greater demand for change in the economic structures of our society, but that viewpoint is not currently being well-articulated in a political structure which broadly accepts the boundaries of the current economic structures.

However, even given that lack of an opportunity for political expression, I doubt that growing inequality would be sufficient to lead to the sort of actions which we saw last week.  But we need to add into the mix two other factors which are comparatively recent. 

The first is that we are in an age of rapid mass communications, so that differences in social status and material wealth are much more obvious than they would have been fifty years ago.  And the second is the way in which those mass communications are used to relentlessly push the consumerist agenda, creating aspirations in the many for material possessions which can never be delivered to all.

I was reminded, when I read this thoughtful piece by Gary Raymond a few days ago, that there is an underlying philosophy – usually expressed rather less starkly than it was by Ayn Rand – which says that ‘anyone can succeed if they work at it’.  It underpins the idea of ‘social mobility’ signed up to by successive governments, and implies that if people are poor, it’s because they haven’t got up and gone.

In itself the idea that ‘anyone can succeed’ has a ring of truth to it; but the flip side is that ‘anyone’ can never be the same as ‘everyone’.  An economic system which encourages such an approach is predicated on an assumption, nay a requirement, that most will, by the same criteria, ‘fail’.

The big lie of politics is that inequality can be addressed solely by setting and achieving targets for lifting up people, families, and communities at the bottom of the economic pile, without any constraints on those at the top.  It can’t.

Greater economic equality is no guarantee, of course, that there will never be those who break with norms and seek to help themselves; but continuing increases in inequality are a pretty good guarantee that there always will be.

Supercops

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On a recent post, a friend referred to the tendency of some to use the following sequence of thoughts as a basis for action:

1.      Something must be done.

2.      This is something.

3.      Therefore, this is what must be done.

The flow has a certain logic to it, albeit badly flawed.  It came to mind again in recent days, when I listened to some of the reactions to the rioting of a week ago; it’s an approach which does rather seem to be popular with government, from Cameron down.  In their haste to be seen to be doing ‘something’, it looks at times as though they are prepared to try anything.

Or, at least, anything which looks like, or can be presented as, ‘tough action’.  The response of the official opposition hasn’t been a great deal better, although they are faced with the little difficulty of being duty-bound to disagree with the government whilst still sounding just as tough.

The result is that specific proposals don’t really seem to be receiving the sort of scrutiny and consideration which they deserve; they are measured solely against the need to be tough, or rather to be seen to be tough.

To take one specific proposal, I don’t really see the objection in principle to considering and learning from police experience elsewhere.  Provided that the assessment of what has worked elsewhere is carried out thoroughly, and the different context of policing is understood and taken into consideration, it’s always possible to learn from others.  That does not, though, appear to be the motivation behind the government’s decision to seek assistance from an American ‘supercop’.

This isn’t about considering the similarities and differences between Los Angeles or New York on the one hand, and Birmingham or London on the other, and then applying any lessons.  I rather suspect that the differences are more significant than the similarities, but will be deliberately ignored.  Worse, the consequences of ignoring the differences and then applying US style policing techniques may well be to reduce the differences and increase the similarities, even if that isn’t the intention.

The man himself, Bill Bratton, certainly seems to have a very high opinion of his own abilities, to read this report.  He can not only deliver better policing, but can do so for a great deal less money, to read his statements.  I can understand the attraction of that combination to Cameron.  There is, though, nothing new about the idea that the court’s favourites will say what the king wants to hear. 

But I’d like to hear what isn’t being said.  Rushing into the application of US-style policing in major cities is likely to have a whole host of unintended consequences which aren’t even getting a hearing.

All power to the markets?

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There’s another aspect to this ‘confidence’ business as well.  We are being told by the UK Government that the ‘markets’ have ‘confidence’ in the UK Government’s approach to fiscal policy, and that is why the UK’s credit rating is not threatened in the same way as that of the US.

I’m not sure that ‘markets’ can have, or not have, confidence in anyone or anything.  In this context, the term ‘markets’ is just a shorthand way of referring to the outcome of a whole series of individual decisions by the people who own and control the capital which flows around those markets. 

And what we’re being told effectively is that those owners and controllers of capital like the way the UK Government is approaching the issue, and don’t like the way that the US is dealing with it.

That doesn’t mean that one way is right or the other is wrong.  It merely means that the ‘markets’ believe that one approach is better than the other – from their viewpoint, and in their interests.  Falling in line with that is simply another way of allowing capital to determine policy, and another example of the way in which elected governments have surrendered control.

(Actually, the best argument that I can think of for a deficit reduction programme would be to put ourselves in a position where the ‘markets’ don’t dictate policy to us, but we’re not going to be in that position any time soon.)

I didn’t know quite what to make of China – one of the most expansionist military powers – telling the US that it can’t afford its current level of military or welfare spending; but I bet it didn’t go down too well in the White House.  It did, though, highlight the extent to which China, nominally the world’s largest ‘communist’ state is now a key player in the ‘markets’ due to the level of control it has over capital. 

However, there’s something very incongruous about a ‘communist’ state lecturing the capitalist world on the need to cut welfare for the poorest in society; it’s an interesting interpretation of the international brotherhood of the working class. 

Ozonomics

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The way the turmoil on the stock markets has been reported, it appears all to be a matter of  a lack of something called ‘confidence’ by people called ‘investors’.  Whatever this ‘confidence’ stuff is, it seems to be pretty elusive.  ‘Investors’ can be full of it one day, and completely devoid of it the next, it would seem.

I’m far from convinced that ‘investors’ is the right description for people and organisations who are buying and selling stocks on the short timescales which are at work here.  Gamblers and speculators seem to be much more accurate terms.  They’re looking to maximise their own short term profits, or at worst minimise their own short term losses; ‘investment’ is surely a more long term activity.

It’s also not made entirely clear in what they have lost their ‘confidence’.  There’s no obvious reason why a company which was worth £x yesterday is suddenly worth a lot less today, nor why its performance is suddenly going to worsen.  I suspect that what these ‘investors’ have really lost their ‘confidence’ in is each other.  They are acting on the basis that someone else might sell before they do, so they’d better get their retaliation in first, or else they’ll lose out.  From then on, the herd instinct takes over.

It’s a dubious strategy over the long term, even in a casino.  But as a way of driving the world’s economy, it’s a lot worse than dubious.

Since this ‘confidence’ seems to be entirely a matter of belief rather than anything tangible, rational, or measurable, perhaps what we need is an all-powerful wizard to issue confidence certificates to anyone who’s feeling a little short of the stuff.  And if it turns out to be no more than a small man with a loud-hailer behind a screen, that doesn’t really matter – once people have their certificates, they’ll be fine.

I’d like to think that this was a tongue-in-cheek suggestion, but I wonder whether it is really very far from the reality of the system which we allow to control us.

Unintended consequences

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There was a report in the Sunday Times a week ago (hidden behind their paywall, I fear, although the Daily Mail picked up on it here) which suggested that English universities would be reducing their fees for ‘top’ students, defined as those getting at least AAB at A level.  It strikes me as being a good example of the law of unintended consequences - twice.

Having increased the levels of fees for all, capped the number of places, and then told universities that they must do more to attract students from less-privileged backgrounds, the government realised that the first unintended consequence would be that students with the ‘best’ A level results might be excluded in favour of those with less good scores.  Bad publicity, and not likely to be well-received amongst their voters.

So, they told universities that the cap wouldn’t apply to AAB or better, and that universities could recruit as many of those students as they liked.  Problem solved?  Not exactly – this in turn meant that recruiting these students became very attractive to universities, who were now having to compete for them.  And given the market-oriented approach so beloved of the government, what better way to recruit them than to reduce their fees.

And that brings us to the second, presumably unintended, consequence.

As the same newspaper reported yesterday, achievement of good grades at A level isn’t distributed evenly amongst the population as a whole.  Indeed, it seems that when it comes to A* grades for example, pupils at fee-paying schools gain more of them than do pupils at all the comprehensive schools put together, despite only constituting 15% of the pupils.

This is nothing new; there is a well-known correlation between the ‘best’ results and the ‘best’ schools, and thus, in turn, with the highest family incomes.  The result is that many of the students most likely to qualify for the discount will also be those from the most privileged backgrounds, who attended the best schools and had the best support, whilst those paying the full fees will be more likely to be those from the poorest backgrounds.

It’s not quite as black and white as that, of course – some pupils achieve high (or low) scores regardless of their background.  But there is a correlation, and to the extent that that correlation applies here, it means that the targeting of reduced fees is completely the reverse of what economic fairness would suggest.

I’ve yet to see how the Welsh Government will respond to the situation – but I hope that we won’t see Welsh policy emulating England in this case.

What does 'anti-Welsh' mean?

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There was a good article at WalesHome earlier this week by Labour MP Susan Elan Jones on the issue of the Welsh language.  I thought that it was a very positive contribution, and something to be welcomed.  However, much of the debate which took place in the subsequent comment thread related not to what she actually said, but to the question of whether Labour is or is not anti-Welsh.

The jibe of being ‘anti-Welsh’ is one to which the language’s supporters can sometimes revert far too easily.  But the dividing line is a lot more complex than a simple distinction between parties.  There are some people to whom the epithet ‘anti-Welsh’ can justifiably be applied - they actually want and hope that the language will die.  But they are much fewer in number, very much fewer, than those to whom the epithet gets applied in practice.

That there are figures hostile to the use of Welsh in the Labour Party is surely beyond dispute.  That the Labour Party is not alone in this respect is also beyond dispute.  But there are degrees of hostility, from outright hatred down to lingering suspicion. (And, dare I say this, I have even found an occasional Plaid member who feels that there is something wrong with the party publishing any material in Welsh which is not fully translated into English, because doing so ‘excludes’ some members from understanding what is being said.) 

The language is, and has long been, a potentially divisive question in Welsh politics, both between parties and within most of the parties as well.  There are a large number of reasons for that, and ascribing a lack of support to some sort of institutional hostility within one or more parties is far too simplistic.

As a simultaneous interpreter, I attend a lot of meetings where Welsh is used as part of a bilingual format.  I also get to see a lot of different attitudes towards the use of Welsh (and not just by politicians, although that is the focus for this piece).  There are a host of reasons why some people feel uncomfortable about the use of Welsh as part of the public administration of Wales, and they don’t simply come down being ‘anti-Welsh’, let alone to simple political differences.

One of the factors involved is age, and we should not be afraid to talk about that.  Some older people, partly because they didn’t have the same advantages of having Welsh used in an educational setting, and partly because of the prevailing attitudes when they were younger, often don’t have the same confidence or desire to use Welsh in formal settings.  (And at the risk of unintentionally antagonising some, I’ll make the sweeping statement that the age profile of the members of political parties is different.  There should be no surprise if attitudes towards the language at a local level can sometimes appear to reflect that demographic difference.)

Few go so far as believing that Welsh simply should not be used in such settings – although it’s only a small step to hold such a view.  More importantly, it doesn’t mean that they’re anti-Welsh – many of them have chosen to pass the language on to their children, and are intensely proud of their Welsh.  And they managed to pass on a natural and beautiful form of Welsh to their children at a time when the language was peripheral to education; seen from that perspective, even opposing Welsh-medium education isn’t necessarily being anti-Welsh.  They simply see the language as something which inhabits a more limited domain.  

It’s a great pity.  I’ve heard some beautiful colloquial Welsh being used naturally and confidently before a meeting starts, only to hear the speakers turn to English once the Chair opens the meeting.  I’ve had those same people telling me – in fluent Welsh of course – that their Welsh simply isn’t ‘good enough’ for use in the meetings themselves. 

It’s nonsense; but I do sometimes wonder whether those of us – including those like myself who’ve learned Welsh – who speak a more standard form aren’t in some way contributing to that feeling, and making some people less confident than they should be, even if unintentionally.  If only they understood how jealous I actually am of their own command of local colloquial Welsh.

There’s also still a misunderstanding of the purpose of interpretation in meetings, with some feeling that if they use Welsh it is somehow tantamount to an admission that their English isn’t good enough.  I find that sad, but again it’s a reflection of past official attitudes to the language, not of any antipathy towards Welsh.

And then there’s the suspicion of ‘closet nationalism’.  The use of Welsh can be interpreted as meaning that the user is a nationalist, and is using the language merely to ‘make a point’, as one person at a recent meeting told me.  Such perceived antipathy from others can itself be a deterrent to normalising the use of Welsh, and serves to underline the need to decouple the language from the constitutional question.  Paradoxically, greater use of Welsh by opponents of political nationalism would be one of the best ways of doing that.

Lack of practice affects usage as well.  It can be easy for some to forget that the natural bilingual way in which some organisations conduct their own internal meetings isn’t mirrored in others; not everyone has had the same opportunity to see, and participate in, bilingual debate as something entirely normal.  ‘Normality’ can look different from different perspectives.

So, for a host of reasons, people choose to use or not use Welsh – and choose to support, or not support, the public use of Welsh by others.  The dividing line isn’t between Welsh-speakers and non Welsh-speakers, nor is it between parties; there are a whole raft of historical and cultural attitudes behind this.  And nor is it about being pro or anti Welsh per se.

The challenge for those of us who want to see the language used naturally and freely in an increasing range of contexts in Wales, and want to see the number of Welsh-speakers growing because people want to speak it, is not to attack people on the basis of our own assumption that they hold an antagonistic viewpoint, or to seek to make political points, but to lead by example and actively promote the use of the language in an expanding range of contexts.

For all the doom and gloom of some, and despite the size of the task which undoubtedly still faces us, the Welsh language has more potential now to grow and spread than it has had for more than a century.  I don’t think that we seize that future by name-calling.

Small doesn't mean failure

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"Wales is too small; we can’t afford it” is one of the most common objections to the idea of Welsh Independence.  Adam Price’s paper on the question is a very welcome contribution to the debate.

There is a danger of reading too much into it – hyperbole about how rich Wales ‘would’ have been is as unhelpful as continued carping about how poor we are.  It is, I suspect, impossible to ‘prove’ to the satisfaction of all that Wales would be better off as an independent country without rerunning history.  But it is equally impossible to ‘prove’ that we would not be, and if both sides in the debate were to move away from such axiomatic assertion, then we could have a much more rational discussion about the pros and cons.

Adam’s paper shows very clearly that the idea that any country is ‘too small’ to run its own affairs is a silly one, and that, on the contrary, it is the smaller countries in Europe which have, on the whole, performed best.  Had Wales been independent, and had we performed as well as other independent countries, then we could indeed have been better off.

There are a number of big caveats in that statement though, and it is important that those of us who want to see one particular answer to the question don’t over-hype what the research is telling us.  There is not – there can be – no guarantee that an independent Wales actually would have performed better in practice.

Any country attaining its independence does so in a context, and whilst it is at a particular stage of development.  All countries are unique in that sense, and each must find its own way forward.  The context of the future will not be the context of the past, and what has happened historically is not always the best guide to what happens in the future.

Having said all that, Adam has, I think, completely destroyed the argument that size is, in itself, a necessary barrier, and highlighted some factors which seem to explain why small countries can, and frequently do, perform well.  There are lessons for us to learn as we develop an economic map for the future.

What I hope that he has achieved most of all is changing the basis of debate.  We need to move away from the sterile ‘yes we can, no we can’t’ argument and look in more objective detail at what we’d need to do differently, and how we move towards that. 

And we should all bear in mind that building a successful Welsh economy is as important for Wales as part of the UK as it is for Wales as an independent country.  It isn’t just a nationalist project, and those who try and pretend that it is are doing a major disservice to Wales.  Some of them seem even, at times, to want to follow a sub-optimal (for Wales) economic policy in order to justify their political goal of continued union.

Economic success no more leads automatically to independence than independence leads automatically to economic failure; those who wish to maintain the union need to find better arguments than that Wales is small or poor.

A convert?

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It’s never a surprise to see the Tory MP for Monmouth, David Davies, calling for tougher something or other when it comes to treatment of convicted criminals.  And his ‘three strikes and you’re out’ call is surely something he’s said many times before.  It plays well with his target audience, I’m sure.

There was something new about the story yesterday though.  According to the Western Mail, “Wales must introduce a policy of ‘three strikes and you’re out’ to deal with the problem of multiple offenders avoiding jail” was “the warning from one Welsh MP”, i.e. Davies.

Given his past less than enthusiastic support for devolution, or for different policies between Wales and England, I find it hard to believe that he has not been misunderstood in some way, because for Wales to introduce such a policy would mean a substantial increase in the powers of the Assembly.

I’d be delighted if he really has come round to the view that criminal justice is a matter which should be devolved (although the likelihood of getting a majority in the Assembly for the sort of measures for which he is calling seems slight to me), but I won’t hold my breath.

Counting speeches

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Measuring the performance of people in roles can be a difficult task sometimes.  Lots of organisations end up targeting their managers and staff against those things which can be defined and measured rather than those which are more important but difficult to measure. 

It’s an aspect of the way targets are set in the public sector which worries me.  As an example, targeting schools on exam performance may well lead to improvement in exam results, but that doesn’t necessarily tell us whether the education has improved.  Training pupils to pass exams is not the same as educating them.  Politicians, though, love targets (or at least, they love the ones that they can hit – they tend to want to forget about the other ones).

Some of them even try to measure their own performance – or more usually, the performance of opponents – by turning to simplistic counts.  Hence, last week, we had the story about the lack of speeches made to the House of Commons by Peter Hain.  As with a lot of other things which can be measured, I’m not sure that, in itself, it tells us a great deal about how effective he is, or isn’t, as an MP.

Some MPs have become little more than problem advice centres.  It’s a useful role, but whether it’s the right role for elected politicians is another question.  Some of those try to ‘count’ their casework in order to impress us with how hard-working they are.  The late Sir Raymond Gower used to include in his election address a figure (always many thousands) for the number of letters he’d written.  (I had my first personal letter from him at the age of 11, to congratulate me on passing my cycling proficiency test.)  Certainly, people seemed to like this approach, but what did it actually tell me about his effectiveness as an MP?

Others go for the voting record, proud to tell us how many times they’ve voted out of the possible total number of opportunities.  But unless it’s an issue on which there are significant numbers of MPs voting contrary to the party whip, how useful is voting?  For most votes in the House of Commons, they might as well just have the whips present, and allow them to cast an appropriate number of votes on behalf of their parties.  A bit like the card votes at Labour conferences in the days when conferences were allowed to vote.

Yet others count the number of hours they put in.  I don’t doubt that many MPs do indeed put in very long hours (even deducting the time attending dinners, receptions etc which I’m not really convinced can be counted as ‘work’), but as a lot of people in other walks of life will understand from observation of those around them, merely putting in long hours is no guarantee of effectiveness.

The job is pretty poorly defined, and the role of individual MPs in the legislative process is largely one of doing as they are told.  There are a few who manage to carve out a role for themselves as campaigners on specific issues (Adam Price comes to mind) or as mavericks, willing to say what they think whether their party bosses like it or not (such as Paul Flynn), but they are much more the exception these days then they were a few decades ago.

Perhaps the problem is that we don’t define in enough detail what we want of them, and then like to criticise when they don’t deliver on it.  I’m not sure that the effectiveness of the contribution of a legislator is actually amenable to anything as crude as measurement; it’s more subtle than that.  When we do come to judge our elected representatives, there’s surely more to it than counting the number of speeches that they’ve made to an empty House.