Thursday 19 December 2013

MPs, peanuts, and monkeys

A common reaction amongst the very few who were willing to defend a pay rise for MPs last week was that if we want to attract the ablest into politics, we need to pay them more.  One or two even trotted out the old chestnut about ‘getting monkeys if you pay peanuts’.
Leaving aside the not entirely inconsequential fact that anyone who considers a salary of £60,000 a year to be ‘peanuts’ isn’t inhabiting the same world as most of us, there are at least two major fallacies with the argument.
The first is that ‘attracting the best’ is not at all the same thing as ‘deterring the worst’.  In the political world, what determines who gets elected has more to do with the popularity of a particular party in a constituency than with the ability of the candidates.  In the absence of any mechanism for assessment of ability in the election process, any increase in salary could end up, to over-work an already tired cliché, simply increasing the peanut ration for the monkeys.
And the second is that, even if we could agree on the definition of the word ‘ability’ (and that’s a big question in itself), where is the evidence that paying higher salaries attracts more of it?  There’s plenty of empirical evidence that higher salaries attract the greedy and the reckless (just look at the banking sector), but I’ve not seen any that justifies the claim that ‘ability’ follows money.  Indeed, some of the most ‘able’ people I’ve ever met have been academics and researchers; not amongst the highest paid in society very often, but then it isn’t money which motivates them to apply their ability in the way that they do.
In any event, do we want laws made by people who have only been attracted into the legislature by the high salaries paid?  Doesn’t that put a premium on those who are there for their own self-interest rather than the interests of society as a whole?

Wednesday 18 December 2013

“Henceforth and forever annexed and incorporated”

That, according to the 1536 Act, is the status of Wales in relation to England.  It’s pretty clear and unambiguous; and unlike some more recent acts, there’s no ‘sunset clause’ in this one. 
There was another, unrelated, story a few days ago about a list of laws which the UK Government was planning to repeal.  They inadvertently included an act making it a crime to even imagine replacing the monarchy.  But the Windsors can sleep soundly; the government realised its mistake and removed that act from the list.  Imagining such an unthinkable thing will continue to be considered by the law to be an act of treason.
I don’t expect, however, to be writing my next post from the Tower.  The UK’s unwritten constitution has a curious ability to be able to ignore itself whenever it is convenient so to do.  Nothing, however deeply etched into the fabric of the law, has the timelessness intended by those who thought that their power was greater than it was at the time that they made these laws.
When it comes to the question of Welsh independence as well, the government knows that relying on what a king decreed almost half a millennium ago to simply deny the right of the people to express an alternative will would be an utterly self-defeating approach.  There may well be little demand for such a step in Wales at present, but simply outlawing those who argue otherwise would be counter-productive.
The same is true when it comes to the union between England (including Wales) and Scotland.  That union, too, was intended to be indissoluble and to last for ever.  But relying on the intentions and the wording of the acts of union to prevent the Scots from even having the choice would be foolhardy in the extreme.
And yet…  Why are those unionists who recognise the sheer folly of such a legalistic approach when applied directly within the UK so content to rely on exactly the same argument by proxy?  How many times have we heard them arguing that Scotland has no chance of EU membership because the Spanish Government, faced with its own ‘internal’ independence movements, will never allow it?
As we have seen over the last week or so, Spain is, indeed, determined to block any attempt at holding an independence referendum in Cataluña, and is relying on the indissoluble and everlasting character of the wording of the Spanish constitution as its justification.  Far from Spain’s stance vindicating the position of UK unionists, as they seem to think, this actually means that they are simply relying partly on the same sort of argument themselves – an argument that they would never dare to make directly.
I don’t know whether the Catalans will eventually vote for independence or not; what I do know is that it will not be the wording of laws or constitutions that ultimately stops them.  Trech gwlad nag arglwydd - the will of the people is ultimately stronger than any law, and that’s as true in Wales as it is in Cataluña or Scotland.
The issue we face – whether unionists or nationalists – is about persuading the people to one view or another, not about what any laws, ancient or modern, might say.  Especially not by proxy.

Monday 16 December 2013

I agree with Boris...

…well, up to a point, anyway.  London’s mayor was recently castigated by some for saying that we need greedy people.  But he’s right of course – in context.  Given that a capitalist economy is based on competition, greed and inequality, saying that such an economy needs greedy people in order to operate effectively is simply a truism.
It what he didn’t say that is more important.
In the first place, greed isn’t the acquisition of excess wealth in itself – it’s the desire to require that excess wealth.  Most people – whether they desire to acquire excess wealth or not – will fail to do so.  Those who succeed will do so at the expense of others.  Under such an economic regime, most people – including most of those greedy people whom Boris says we need – will be losers in the wealth acquisition stakes.
More importantly, however, whatever the capitalists and their apologists never tell us is that competition, greed and inequality are not the only basis on which to build an economy.  One of the tragedies of modern politics is that the assumption that they are is so rarely challenged.

Thursday 12 December 2013

Sharing out the work

Some of the big battles of the past between capital and labour were about working hours, as much as about pay.  These days, 37 hours or thereabouts is generally accepted as the standard length of a five-day working week.  But 40 was more usual when I started work, and I remember my father working a six-day week, which was still fairly normal in the 1950s.
As a general rule, reductions in the working week have been the result of demands from the workforce – conceded only reluctantly by employers – and have come about in periods of increasing affluence.
Periods of economic hardship can also lead to a reduction in hours, however.  One of the controversial proposals put forward by Rhondda Cynon Tâf Council recently was that new staff should be employed on 35 hour contracts, (with the salary amended to reflect that fact).  Were it not for the salary sting in the tail, one would generally expect such a proposal to be broadly welcomed by staff and unions alike.
It isn’t the only sting in the tail, though.  There are three ways in which reduced hours for employees can be “paid for”.  The first is by reducing the amount of work done; the second by is by employing more people to do the work; and the third is by increasing the productivity of those being employed – getting more work out of the same people.  And there are two ways of delivering the last of those three options – the first is through better tools and processes, and the second is by increasing the pressure on employees by simply demanding – insisting even – that they work harder and faster.  In recent years this has tended to be the default option, and it's no coincidence that the incidence of stress-related illness has increased.
As far as I have seen, the council did not spell out which option they were planning to use; my suspicion is that it is simply a question of following the default option – buying bigger whips.
Now there will be those, of course, who see local government as something of a cushy option – Max Boyce’s song about “keeping their billy cans brewing” comes to mind.  Perhaps there are still corners of local government somewhere where this is a true picture, but I doubt that they’re widespread.  In effect, the council is suggesting that it should behave just like the worst capitalist employers, who believe that bigger whips solve problems.
In principle however, we should welcome any moves to reduce working hours and allow people more leisure time.  And the best way of paying for it is my option two above – employing more people to do the work.   

Much of what passes for economic policy these days seems to assume that unemployment is both temporary and the fault of the unemployed themselves.  But what if it’s neither?
In that case we would have only two economic options – recognising that those choosing not to work are doing the rest of us a favour by reducing competition for jobs (and then rewarding them appropriately for their altruism), or sharing what work there is more fairly between those available to do it.  In theory, the reduced salaries which we’d all receive should be matched by reducing the taxes we pay for benefits for the altruists whose choice not to work would disappear.
Of course there are issues about whether people have the right skills, abilities and experience.  And of course there are questions about how we make sure that the benefit of reduced taxes goes to those whose wages are reduced rather than to the richest.  But these are, at root, practical problems to be overcome.
What’s wrong with sharing work more fairly and sharing the rewards of work more fairly as a consequence? It's surely preferable to accepting that some of us will never have the opportunity to make a meaningful contribution to the economic life of our country.

Wednesday 11 December 2013

Kissing frogs

There is an increasing emphasis on this magic quality called entrepreneurialism in recent years, and sometimes it seems to me that politicians and business leaders think that if only we had more of it, all our problems would be solved.  I wonder if that’s true – or even if we really understand what this stuff actually is.
It’s certainly true that having more companies employing more people would help the economy.  And it’s also true that having more companies starting would be a step along the way.  There is a downside though.  It’s generally accepted that around four out of every five new start-ups fail.  From a macroeconomic perspective, such a high failure rate isn’t necessarily a bad thing; it’s part of the cost of sorting the wheat from the chaff and identifying which business ideas are good and which are less so.
From a microeconomic perspective, however, I’m not convinced that encouraging ever greater numbers of our school and university leavers to do something at which we can reasonably predict, from experience, that 80% of them will fail is an entirely brilliant idea.  And I rather suspect that if we doubled the number of start-ups, the number of failures would more than double – we might still get a higher number of successful companies in total, but the ratio of that successful number to the total would be less.
Partly that’s because more business start-ups probably means that we’re moving into the more marginally viable ideas; and partly it’s because encouraging more and more people to start businesses means that we’re going beyond the pool of people who have the enthusiasm and the commitment without having to be persuaded to give it a try.
But it also partly comes down to us not really having much clue as to what does or does not make a successful entrepreneur.  Values such as commitment, hard work, and perseverance are all part of it, but there’s also an immeasurable something called flair – and I personally suspect that another little attribute called ‘luck’ plays a much larger role than is generally acknowledged.
It’s easy to ignore the question of luck.  Successful entrepreneurs always think that their success is down to their own exceptional personal qualities; and the unsuccessful ones usually have plenty of other things to blame – taxes, red tape, unreasonable expectations that employees should be paid a living wage, the banks, the markets; the list is probably endless.
We know that banks and financiers aren’t particularly good at identifying which businesses will succeed, although there’s an element of self-fulfilling prophecy in that those to which they lend are more likely to succeed than those to which they refuse to lend.  We also know that all the government agencies and services promoting entrepreneurialism aren’t terribly good at predicting success either – although the fact than many of those employed in such areas seem to have little experience of actually running businesses themselves and are experts, mostly, in filling in forms to draw down grants and loans, may be a contributory factor.  And we know that the entrepreneurs themselves are not very good at knowing what will succeed – if they were, we wouldn’t have an 80% failure rate.
People like Michael Moritz who invested in Google at the right time are feted as though they were financial and entrepreneurial geniuses, but is that true, or were they, in reality, just lucky to be in the right place at the right time?  Is entrepreneurial success more like kissing frogs than shrewd investment?  I suspect that it is.
Again, from a macroeconomic viewpoint, kissing a whole lot of frogs before one turns into a prince may well be a sensible strategy to pursue.  But shouldn’t we make the fact that that is what we are doing just a tiny bit clearer to those young people who are being encouraged and persuaded to go frog-kissing?

Tuesday 10 December 2013

Learning from Pisa

I suppose the one positive thing to come out of the announcement of the results of the Pisa comparisons last week is that no-one in Wales is pretending that it was in any way good news.  How meaningful the league positions are in reality is another question entirely – and Syniadau has an interesting take on that question, pointing out that simply comparing places in a league table may be ignoring a rather greater truth about the decline in mathematical knowledge across large parts of the developed world.
If the results were depressing, the political response has been even more so.  Opposition parties seem to be more interested in getting the First Minister to express shame, apology, or regret than they are in identifying what we need to do to improve.  It’s not often that I feel much sympathy for the First Minister, but I have to admit that the frustration which he expressed with the absence of constructive alternative policies struck a chord.
That doesn’t mean that the opposition’s criticism is entirely unjustified either – the fact that Labour have been in control of education in Wales continually since 1997, either at Westminster or subsequently at Cardiff, makes it reasonable to hold them responsible for the debacle.  But the idea that simply replacing a Labour Government with a non-Labour Government (whatever one of those might be) is the answer to anything - let alone everything - is little more than sloganizing and electioneering.
I rather suspect that politics is part of the problem in the first place; or rather the endless enthusiasm of politicians for dabbling in the details of the education system with more and more ‘initiatives’ and changes to the curriculum, to show that they are ‘taking action’ (or, in the double-speak of which they are increasingly fond, ‘moving the agenda forward’ – which always sounds to me more like pushing a piece of paper across the table than doing anything useful).
And actually, it’s not that I particularly disagree with many of the initiatives that they promote, although there are questions which deserve to be asked – and answered – about whether they are properly resourced and whether the details have been fully thought-through.
Someone once explained the change process to me as like throwing pebbles into a perfectly still pond.  Throw one right into the middle, and you get a perfect wave of change rippling out to reach all corners of the pond.  Throw two pebbles in, and you get a nice interference pattern - sometimes the waves reinforce each other, strengthening the drive for change, whilst at others they cancel each other out.  But throw a handful in, and the usual result is unpredictable chaos.  The education system in Wales reminds me of that chaotic pond – a whole series of different initiatives, most of them worthy in themselves, but never really coming to a conclusion before the water is disturbed again.  But throwing yet more pebbles into the pond seems to be the instinctive reaction of the politicians.
Changing ministers, changing priorities, an emphasis on schools performing wider functions than merely educating children, and a complete absence of decent employment prospects for many of the children themselves – none of these can help.  I’m not going to pretend that I have an easy or quick solution either, but recognising that there probably isn’t one might be a better place to start than clutching at the first straw that floats past.  Or simply demanding a change of minister.

Monday 9 December 2013

The for-and-against party

A couple of weeks ago, Peter Black proudly announced that the Lib Dems were the first party to oppose the building of the M4 relief road.  I thought this a welcome step forward, and I think that he was right to say that the Lib Dems are the first party to reject the idea in principle.  It’s true, of course, as one of the comments on the piece suggested, that the One Wales Government decided not to proceed with the plan, but that was a decision taken purely on financial grounds at the time, leaving open the possibility of resurrecting the scheme at a later date - exactly as many of us feared at the time.
But hold on a moment – on Thursday of last week, the UK Government’s spending statement, produced by a government of which the Lib Dems are a part and announced by a Lib Dem minister, committed to working with the Welsh Government to build the self-same road.
In fairness, Peter Black did specifically refer to this being a policy of the ‘Welsh’ Lib Dems, so I suppose that leaves open the possibility that the UK Lib Dems will just ignore them (nothing new there) and carry on regardless, which is exactly what is happening here.  But if a policy of the Welsh party on a specifically Welsh issue, which is under the control of the Welsh Government can be over-ridden by the so-called ‘federal’ party, what is the point or status of such a policy?  A quick press release, I suppose, like so much of politics these days.
The idea that the use of borrowing powers to fund the M4 had anything to do with a response to the Silk Commission’s report is also rapidly evaporating.  The Treasury statement referred to an agreement that the Welsh government ‘can use’ – how nice of them to give permission – ‘their existing borrowing powers’ for the scheme.  And Eurfyl ap Gwilym (himself a member of the Silk Commission) referred to a short term “…agreement on limited borrowing powers to fund an M4 relief road”, with proper longer term borrowing powers a matter for the future.
The proposal for the M4 relief road seems to be developing an increasing cross-party momentum in favour of mortgaging the future of the whole of Wales to fund one short stretch of road in the bottom right hand corner, and it seems unlikely that any of our politicians are going to oppose it.  Once again, when push comes to shove, all the politicians' talk of sustainability is put to one side; the economy always trumps the environment.

There are two rays of light, however.  The first is the work done by Professor Stuart Cole to try and resurrect an alternative proposal which is much cheaper and less environmentally damaging.  The the second is the proposed court action by environmental groups challenging the validity of a consultation process which does not even allow the consideration of any alternatives.  All power to their elbow.

Friday 6 December 2013

Not all that automatic really

That former UK Prime Minister John Major is opposed to independence of Scotland is no surprise to anyone.  I was, however, a little taken aback at part of the advice that he gave the Scots last week.  Were Scotland to become independent within the EU, he said “...she might regret the loss of automatic British backing”.
It sounds as though he really believes that the UK Government has in the past ‘automatically’ backed Scottish interests on each and every occasion.  I guess that will come as a surprise to many Scots.  And there’s a parallel in Wales where many, particularly in the agricultural community, feel that the UK’s position in EU agricultural affairs has been one which tends to pay rather more attention to the needs of large arable farmers in the south east of England than to the needs of hill farmers in Wales.
But perhaps we should be grateful to Major for drawing attention to one of the key issues which the Scots will have to face in relation to the EU when they come to vote.  Do they believe it better to have the government of a small country focused on the needs of that country arguing their case in Brussels, or would they prefer to leave the arguments to a larger country, which has more clout, but which focuses on what it sees as being the needs of that larger country, even if their position then runs counter to the best interests of the smaller country?
I know which I’d choose.  A government focused on the right issues is surely preferable.

Thursday 5 December 2013

Presumptions and hidden assumptions

Last week, our First Minister took himself off to Dublin to deliver another of his homilies about devolution, separatism, and all things political.  During the course of his speech he said that there should be a presumption in favour of devolution and that “powers should only remain at the centre if it is strictly necessary”.
It’s one of those sentences which was to him probably just stating the obvious, and it’s easy to skip over it in the context of a lengthy speech.  But what exactly does it mean?  He gave us no clue as to what he means by “strictly necessary”; but defining what the phrase means is key to understanding what, if anything, he was actually saying.
To me the obvious interpretation of the phrase in the context of that speech is that “only those powers which cannot possibly be exercised at a Welsh level must remain at a UK level”.  However, any rational consideration would have to conclude that there is actually nothing which cannot be done at a Welsh level.  There are after all EU members smaller than Wales who manage perfectly well without an intermediate level of government between themselves and Brussels.  So whatever he meant, it clearly wasn’t that.
Of course whether it is desirable to exercise all powers at a Welsh level or whether that’s the best thing to do are different questions entirely, and go to the heart of the debate between nationalists and unionists about the future of our nation.  But “desirable”, and “best”, don’t strike me as being sufficient criteria to define something as being “strictly necessary”.
It seems to me that there must in fact be a further criterion in operation here, one which the First Minister chose not to refer to, but one which is in effect a very severe constraint on his “presumption in favour of devolution”.
I rather suspect that that second criterion is his firm conviction that the United Kingdom must continue to exist.  Nothing wrong with that, although I would, of course, disagree with him.  But if the constraint on devolving powers to Wales is that enough powers must remain at the centre to justify the continued existence of the centre, which is the only conclusion I can draw if I’m right about his second criterion, then he really seems to have said very little at all.
“We need to retain at the centre those powers which are necessary to ensure the continued existence of the centre”, isn’t much of a presumption in favour of devolution at all.

Wednesday 27 November 2013

Nods, winks, and peers of the realm

I find it hard to believe that Elfyn Llwyd’s call last week for Plaid to have more peers was preceded by a great deal of consultation with his party’s leader, Leanne Wood.  Given her long-standing opposition to the nomination of peers, Elfyn’s call looks a little incongruous to say the least.  Still, not even Elfyn’s best friends or biggest fans would say that always being “on message” was one of his fortes. Whether that’s a good thing or a bad thing depends on your perspective, I suppose.  For party managers, being “off message” is always likely to be a problem, but for most others it probably depends on whether you agree with what he’s saying or not.
Personally, I agree with Elfyn and think Leanne is wrong on this one.  A party like Plaid has to choose between engaging with the institutions of the state and keeping them at arm’s length.  There are sound arguments for abstentionism, which was long a popular position amongst Irish nationalists.  However, there is little history of abstentionism in Wales, and it seems to me that if you’re going to engage with some institutions of the state you may as well engage with all of them and exercise as much influence as you possibly can.
On the substance of the critique of the existence and nature of the House of Lords itself  however, it would be hard to find any difference between Leanne and myself.  The fear is that appointing members serves to legitimise the institution, but a party which claims only to enter the House of Commons in order to secure Wales’ withdrawal from it can surely apply exactly the same argument to any other institution.  
Whatever, the real question which I wish to address here is the mysterious way in which the institutions of the British establishment work when it comes to the appointment of peers of the realm.
When Plaid chose three nominees for peerages (Dafydd Wigley, Eurfyl ap Gwilym, and Janet Davies), their details were passed through the murky “usual channels” to number 10 - and the then prime minister studiously ignored them.  That was, for a while, the end of the story.  I – and I think many others – believed that we had made our nominations, and that Brown was simply blocking them.
It turned out that we hadn’t actually “nominated” anyone at all; the PM was not ignoring our nominations because there were no nominations to ignore.  This only became clear after the election of Cameron as Prime Minister. 
Shortly after Cameron came to power, Ieuan Wyn Jones had an opportunity to lobby him for the appointment of Dafydd Wigley to the House of Lords.  (Although of course Dafydd had by then withdrawn his name, and was no longer one of Plaid’s nominees – but that’s another story).  Nods were nodded, winks were winked, it was made clear that the party would be allowed to submit one nomination, and in June 2010 I found myself presented with a nomination paper to complete and sign (political nominations have to be completed by party chairs - a revelation to me).
I really hadn’t realised that there was a formal channel available for submitting nominations to an allegedly independent panel.  Perhaps I should have known that – it would be a fair criticism of me that I hadn’t even made the effort to identify whether there was a formal process – but I’ll admit that I didn’t.
Anyway, after a brief hiatus while the NEC agreed to reinstate Dafydd Wigley as a party nominee - a precondition to my signing any nomination - the form was duly completed and submitted and, hey presto, three months later Dafydd’s peerage was duly confirmed after the said “independent panel” had given it their careful consideration.  In essence, despite the lengthy period which appeared to be passing from a public perspective, the actual period between formal nomination and appointment was a very short one.
It neatly illustrates the difference between the written-down formal process - which is the submission of a form, consideration by an independent panel, and appointment or rejection; and the actual process – which depends on a series of nods and winks from the right people before you even get to the starting block. 
Perhaps we should have challenged that more strongly at the time.  With the benefit of hindsight – and hindsight is always a wonderful thing – I think we should have accepted the nod and the wink, but pushed the boundaries by making three nominations at that point rather than just the one.  That would really have forced the establishment to either accept or else formally reject our nominations, rather than two of them remaining in a strange and continuing sort of limbo.
However we did not do that, and unless the other two nominations have been formally submitted since I stood down as Plaid’s chair in July 2010 (completing Wigley’s nomination was one of my final acts), I suspect that the party has only ever nominated one candidate.  So whilst I agree with the substance of what Elfyn says, in that Plaid should be more strongly represented in the second chamber, I’m not convinced that Plaid itself could not do more to achieve that if it really wanted to.  But that probably takes us right back to the question of whether Elfyn was speaking for his leader or not…

Monday 25 November 2013

Reviving the great and the good

Last week’s announcement of the membership of the board of the Cardiff city region attracted a lot of attention.  In comparison, the other announcement, made at the same time, of the membership of the Swansea Bay city region was virtually ignored by the media.  It’s another sign of how Cardiff-centric Welsh politicians and media have become – aping the failings of the UK, of which so many have been critical in the past.
My view is coloured of course by the fact that I now, apparently, live in something called a city region, despite being in a very rural spot miles away from, and having little in common with, the city of Swansea.  And if it feels like that in the north of Carmarthenshire, I wonder how people in Angle or Fishguard feel about it.
Still, that’s all an aside really.  What is of interest for the purposes of this post is who the members are, and how they were appointed.  Remember Labour’s “bonfire of the quangos”?  Well, here they are setting up two brand new quangos all of whose members are appointed at the whim of the Minister, and only a minority of whom – in both cases – actually hold any elected post.  It seems that 'the great and the good' of Wales never went away at all.
In theory, their powers are limited at present; but I wonder for how long that will be the case.  Centralising politicians have something of a penchant for preferring direct rule by their nominees over the vagaries of democracy.  And in this case, much of the commentariat seems to be supporting them.
There is nothing wrong with engaging experts to advise and assist; experience gained outside politics is often - perhaps even invariably - more valuable than experience gained within politics.  That is however the reverse of a situation where ‘experts’ oversee and direct the elected representatives, which is what seems to be developing here.

Friday 22 November 2013

An idea whose time has gone

The spat between Cameron and the President of Sri Lanka drew more attention to the meeting of the Commonwealth Heads of Government than it would normally merit.  Such attention would normally be more focused on the visit by the hereditary head (or in this case deputy head) of the ex-colonial power.  For what it’s worth (and despite my instinctive understanding of the reaction of the President to being lectured by former colonialists), on the substantive issue of an enquiry into alleged war crimes, I’m with Cameron.  (Although he seems to have taken his time about noticing the issue.)
That isn’t the subject of this post, however.  What exactly is the Commonwealth for?  It’s a curious organisation, which has attempted to redefine itself a few times over the decades to become more modern and relevant; but at root, it is about maintaining links between the UK and its former colonies.  As the charter puts it, it’s for those countries which have “a shared inheritance in language, culture and the rule of law”, and are “bound together by shared history and tradition”. That would be the shared experience of conquest and an imposed language, in most cases.
Two of the main criteria for membership are acceptance of the monarch of the UK (or rather the “monarch of the Commonwealth realms” as they would prefer to put it, using a formula which allows even republics to accept a residual role for the monarch), and the use of the English language.  It’s open to countries which were part of the Empire or which have some sort of constitutional relationship with countries which were part of the Empire (colonies of colonies, and dependencies of dependencies).  This is a rule which may only be waived in exceptional circumstances – in the interests, presumably, of apparent non-exclusiveness.
From the point of view of the London establishment, the attraction of an organisation which allows them to live in the past and pretend that they still have some sort of empire, dispensing their largesse (in terms of aid and trade) more favourably to former colonies than to others is perhaps understandable.  It also gives the Windsors opportunities to visit exotic places (and in the case of one of them, insult the local natives).
From the point of view of the other members, it’s either the fact that Her Maj is still their head of state, or else the expectation of favourable terms for aid and trade that encourages them to see some value in the organisation.  But in the twenty-first century, is there really still an argument for retaining a pretend empire like this?  Whether it’s dreams of the past, or even possibly a feeling of guilt for past misdemeanours, is there really any justification for differentiating amongst those who need aid and trade to favour those who ‘we’ used to rule?
It’s an idea whose time has long gone; it belongs, like the empire, to the past.  It may be an academic question though.  Accepting Elizabeth II as head of the Commonwealth for as long as she lives is comparatively easy; she was, after all, on the throne when most of the members gained their independence.  I somehow doubt that the idea of a hereditary head of the organisation will survive the death of the current monarch.

Thursday 21 November 2013

Perhaps they just haven't noticed...

I was a member of the housing committee of what was at the time the Vale of Glamorgan Borough Council when the Thatcher government introduced the so-called “right to buy” legislation.  It was a piece of legislation about which I have always been rather ambivalent.
On the one hand, it was clear from the outset that what was a popular and populist policy in the short term would lead to a shortage of affordable houses to rent in the longer term – an outcome exacerbated both by the generous discounts on offer and the rule that the capital receipts could not be used to build new houses.  And one of the motives behind the policy was always to take the state – even the local state in the form of local councils – out of housing completely.  It was a piece of dogma more than anything else.
On the other hand, as someone who was also at the time living in a council house with his parents I also understood why so many tenants wanted to be able to buy their homes.  Thatcher, for all her faults, seemed to understand the difference between houses and homes in a way that many others in her own party – to say nothing of those in other parties – did not.
It was never simply about becoming a property owner or getting a foot on the housing ladder; it was about enjoying the use of the home without the restrictions which council tenancies often included.  People tend to forget how paternalistic the attitude of many councils was at that time towards their tenants.
The suggestion recently by the Tories in Wales that they would enable councils once again to build significant numbers of council homes, and would also amend the right to buy legislation in such a way as to ensure that a new home was built for every one sold, is something of a welcome conversion.  There is no sign however that they have really thought through the implications.
It’s an eye-catching headline policy, but I haven’t seen the financial detail which explains how you bridge the gap between the reduced price at which an existing house is sold and the higher price at which a new one would be built.  Nor am I entirely convinced that there is not still an ideological aversion to council ownership of homes amongst the party’s leaders, even if the Welsh branch is saying something different (or perhaps Andrew RT Davies’ bosses simply haven’t noticed his statement yet).  But since, in practice, the probability that they will ever be in a position to implement this policy in Wales is so remote, I guess it’s not something we need particularly to worry about.

Wednesday 20 November 2013

A giant leap or just one small step?

The Western Mail yesterday was in no doubt at all that the detailed response of the UK Government to Silk was a ‘giant leap’; others, including Jess Blair and Lee Waters were rather more circumspect.
With all due respect to any Greek readers, the old adage about Greeks bearing gifts seems somehow appropriate when those who had long seemed to be arch enemies of devolution turn out to be such vociferous supporters of devolving a limited range of taxation powers. 
Those welcoming the boost for the property and construction industries don’t always look like natural supporters of devolution either, but reading between the lines, it seems that their support actually has little to do with the question of where the tax levels should be set, and a great deal to do with their belief that devolved taxes will go in only one direction – down.
Similarly, the support of the Tories for a yes vote in any referendum on income tax seems to be predicated on an assumption that the people of Wales will then vote for a party (such as the Tories) which promises to cut taxes.  They may be right, but all of these instinctive tax cutters are being less than entirely honest about how they will then balance the Welsh budget.
Simply promising to cut every tax in sight when they’ve spent so long talking about the size of the Welsh budget deficit seems a curious approach to fiscal prudence.  But I suppose they’ve already factored in the unlikelihood of them every having to honour any promises they make.
In practice, it seems that even the Welsh subsidiary of the Conservative Party is showing some signs of understanding that the inability to disentangle the different rates of income tax makes the power to vary tax rates considerably less attractive as a practical option.
It’s still not clear to me how much freedom the Welsh Government will have to decide what to do with its new borrowing powers either.  All the talk has been about just one or two schemes – and Glyn Davies went so far as to suggest that the power would only be devolved if it was to be used on two specific schemes - the M4 and the A55. 
The whole package looks increasingly like a classic example of power devolved being power retained.

Monday 18 November 2013

Abdicating power

The TUC claimed recently that low pay is costing the UK Treasury more than £3.2 billion in means tested benefits and tax credits, and called for the introduction of a living wage.  Well, they would say that, of course; but the argument that using tax revenues to top up wages of working people is an effective subsidy to underpaying companies is a compelling one.
Both the CBI and the FSB have responded – equally predictably, I suppose – by saying that businesses “can’t afford” to pay their employees a living wage.  In my mind, that simply raises a question as to whether the businesses concerned are actually economically viable concerns at all.
It isn’t just wages that are at issue here.  The same organisations complain – almost daily it seems – that they “can’t afford” to comply with environmental or health and safety legislation, and they “can’t afford” to pay business rates or other taxes.  What exactly can they afford?  Well, many of them seem to have no major problems in playing executive salaries – or shareholders’ dividends; but then that’s what they are in business for, not to pay their employees.
But here’s the thing – classical economics says that any company unable to charge a high enough price for its products and services to be able to pay its costs of production and still make a profit is simply not viable.  And surely, paying a wage which is adequate for employees to be able to live on without claiming benefits is – or should be – a basic minimum requirement when calculating the cost of production.  The fact that it clearly is not merely underlines where economic power actually lies.
The real question which needs to be addressed is about pricing, rather than cost.  Why is it that businesses are unable to charge prices at a level which enables them to cover the costs of production, rather than forcing down wages?
The answer they would give of course is “competition”.  They have to compete with other companies to sell their wares, and to do that they need to keep their prices down.  It’s another obvious conclusion of classical economics.  But the way they’re setting about ‘competing’ at present is little more than a race to the bottom.  And it's the employees who are paying the cost of that race.
There’s something of a vicious circle here.  They’re mostly competing with each other; the greatest rewards go to those who can most ruthlessly reduce the cost of labour.  If all of them had to pay a basic living wage, then they would all be subject to the same rules – and cost-cutting would have to focus elsewhere.
There is a complication when those companies are competing on a wider stage than merely the UK.  But allowing our wages to be set at a level which is primarily driven by competition with low-wage economies is just another example of abdicating responsibility and leaving power in the hands of multi-national capitalists rather than elected governments.

Friday 8 November 2013

Providing the right incentives

I came across this report a while ago, but never quite got round to reading it properly until this week.  It suggests that the actual life of wind farms might be only 10 to 15 years rather than the 25 years generally assumed.
At one level, a shorter life might not actually matter very much; if the economics still stack up over a shorter period, and if they still achieve the planned emissions reductions, they’d still be viable.  At another level, “re-powering” them more often brings its own costs (and unpopularity) in terms of traffic disruption, and the carbon cost of construction.
The detail of the report, however, is not quite as black-and-white as the conclusion some might draw from it.  And it raises a few other interesting questions as well.
It’s based on looking at already installed capacity in both the UK and Denmark.  It may well be the case, as some detractors of the report have claimed, that the performance of new technology will be better, and so conclusions cannot be drawn based on previously installed equipment.  Perhaps; but it’s one of those things about which we won’t be certain for some years.
The big question for me was what actually causes the observed degradation in performance.  As the report itself makes clear, the answer to that question is by no means straightforward.  The performance of individual turbines seems to vary greatly, and there is a significant disparity between the situation in the UK and that in Denmark, both in terms of overall averages and in the disparity between the best and worst performances.
This suggests to me that there is something else at work here other than merely wear and tear and maintenance schedules.  And that brings us to the nub of the question.  Much of what the report is dealing with isn’t actually the mechanical life of the turbines, but the economic life.  For sure, the economic life is impacted by the technical life; poor maintenance and excessive wear and tear will shorten both.  But they are not the same thing.
The economics are affected greatly by the financial regime under which the wind farms operate – and it may well be that the differences in financial arrangements between the UK and Denmark explain, partially at least, the differences in performance.
Two things about the UK’s ROC regime leapt out at me from this report in relation to the financial framework.
  1. The report makes the point “the subsidies provided by ROC’s are sufficient to underwrite investment in inefficient plants…  Those subsidies are extremely generous for plants that operate close to the efficient frontier.  As location is likely to be the main factor that determines the performance of a specific plant relative to all the plants, the inference must be that many wind plants have been developed on sites with poor characteristics...  In effect, the financial regime appears to be encouraging investment in plant which is installed in suboptimal locations”.  (It seems to me that the opposition to siting them in the most optimal locations is a significant part of what drives developers to those suboptimal locations.  It’s somewhat ironic that windfarm opponents are not succeeding in preventing wind developments from taking place, merely in driving them to the wrong locations.) 
  2. The financial framework means that “wind operators will have a strong incentive to decommission plants after no more than 15 years and replace the turbines with newer equipment”.  That again is an economic driver not a technical one.
In summary, the report is not so much an argument for not building turbines – as some have inevitably claimed, seizing on the headline – as an argument for reviewing the financial framework to ensure that we incentivise the “right” windfarms in the “right” places, and incentivise maximising useful lifespan rather than premature replacement.
It’s hard to disagree with that principle.  This is a useful contribution to debate – it’s not the killer argument against wind that some have claimed, but neither should it be simply dismissed.  I’m not at this stage convinced what the right financial framework might look like but it certainly does seem that there is cause for reconsidering the nature of the current financial framework.

Thursday 7 November 2013

Symptoms and causes

When he says that low levels of attainment in education are linked to levels of poverty, I cannot but agree with the Education Minister.  It’s also impossible to deny the evidence that that is truer in Wales than in England, at least insofar as a simplistic definition of poverty in terms of receiving free school meals is accepted.  Nor can I disagree with his assertion that something needs to be done about all of this.
I’m left concerned though at the nature of his response, which is about ‘breaking the link between poverty and attainment’.  At first sight, it seems to be an obvious response, but it ignores the reality of the long-term failure which is staring us in the face.  It is, at best, an attempt to treat the symptoms, not the disease.
There’s nothing new about the link between social background and attainment.  It’s been studied and reported on for at least half a century.  For at least half a century, politicians have been talking about breaking the link.  And for at least half a century, they have singularly failed to do so.  Yet today’s politicians still seem to be supremely confident that they can achieve something which has defeated others for at least five decades.
It is, of course, much easier to talk about breaking the link than it is to talk about addressing the underlying causes.  And given the average life span of a minister, it’s a pretty safe assumption that it will become someone else’s problem in a few years’ time.  None of that stands up as much of an excuse, though.
The first simple fact is that, if social background is one of the main determinants of attainment, then improving attainment depends on reducing those differences in social background.  And the second is that there is no way of doing that without addressing inequality.  There was a time when one might have expected an understanding of that from a Labour politician.

Wednesday 6 November 2013

How many submarines?

One of the most cringe-worthy moments prior to the 2007 assembly election was when David Williams asked Bethan Jenkins how many aircraft carriers an independent Wales would have.  To be fair, there are few people involved in politics who haven’t given an interview at some stage which they later regretted (and I certainly include myself in that), and the question itself was one of the silliest I’ve ever seen put to a politician; but the episode was, nevertheless, something of an embarrassment.
It led some to the view that since we didn’t have properly worked out answers to such silly questions we should simply avoid raising the question of independence at all.  That seemed to me to be something of a ‘baby and bathwater’ response.  It was precisely the lack of debate around independence and its consequences which led to the situation of candidates not being able to answer the question, rather than the other way around.
Whatever, the episode was brought to mind again recently when I read through the report of the House of Commons defence committee (available here) on the implications of Scottish independence on defence.  This time, however, the question seems to be about how many submarines and fast jets Scotland would need, where it would get them, and how it would pay for them.  On a per head basis, a split of UK military assets would apparently give Scotland 0.7 of an Astute class submarine and 1.6 frigates and destroyers.  As for fast jets, well perhaps around 10 -12 on my reading of the figures.  Not enough, say the MPs and military experts, to provide a “credible” defence for Scotland.
My first reaction was simply to dismiss this as yet another silly question, albeit not being asked by a journalist this time.  However, on reading the report, it became clear that it was not, after all, such a silly question – because the SNP’s defence policy does indeed call for Scotland to possess a fleet (size unspecified) of submarines and a fleet (size unspecified) of fast jets.  They have, in short, invited the question.
Whether Scotland actually needs submarines and fast jets is another question entirely.  It all boils down to what it is that Scotland needs to defend itself from and which countries are used as comparators.
For years, decades even, before some of the party’s leading figures got cold feet about discussing the issue at all, Plaid used to compare Wales with the Republic of Ireland, drawing on that country’s experience.  Ireland spends a low proportion of its GDP on defence, as a purely defensive capability which can also be deployed in support of the civil authorities and the Republic has long had a clear commitment to support UN peacekeeping activities.  Its policy is not predicated on the assumption that the rest of the world is just waiting to invade and conquer it at any sign of weakness.  And it doesn't go round the rest of the world pursuing a foreign policy likely to make it a target.
Contrast that with the UK stance.  Much of the UK’s armed forces constitute an offensive rather than defensive capability (aircraft carriers, for instance); and UK policy is indeed predicated on an almost paranoid assumption about everybody else’s intentions.
Faced with that contrasting scenario it is pretty clear to me which stance makes most sense from a Welsh – or Scottish – viewpoint.  The surprise and disappointment to me is that the SNP’s policy was recently changed to align itself much more clearly with the UK rather than Republic of Ireland view of the world.  This even extends to an expressed wish to join NATO – a nuclear armed alliance.  On that specific, I find it hard, no matter how much I might want to, to disagree with the House of Commons committee’s point that there’s more than a tiny inconsistency between the rejection of stationing nuclear weapons on Scottish soil and the embracing of membership of a nuclear alliance.
I can understand why the SNP wants to make independence look less of a risk, to be less of a major step, to be less different, in order to win the referendum.  But for me, being different and taking a different worldview is part of the point of independence.  Moving away from the imperial mind-set of the past is key to developing a different world order, and breaking up one of the old imperial powers is part of the route to doing that.  Replicating it on a smaller scale undermines what is for me a major plank of the case.
The answer to the question about submarines should surely be the same as the answer which should have been given about Welsh aircraft carriers – ‘why on earth would we want any of those?’.  It’s disappointing that that is not the answer being given - and they can't plead youth and inexperience either.