Friday 11 January 2013

Sharing the benefits

When I posted on fracking shortly before Christmas, one commenter said that he was against it because the benefit would go elsewhere rather than to Wales.  It's not dissimilar to the argument that I've heard used by some nationalists as their excuse to support renewable energy and then oppose every individual proposal.  It's a way of avoiding or postponing taking a stance on an issue, effectively.

In itself, though, the point is a valid one.  The natural resources of Wales are indeed being exploited in ways from which we in Wales gain little.  Wales is, however, far from being unique in that sense, and it's not a particularly good argument for opposing a proposal.  If we were to prevent, or stop, all economic activity from which the primary beneficiaries were not the people of Wales, then there wouldn't be a lot left.  And merely replacing multinational capital with Welsh capital - were there to be enough of it - wouldn't necessarily make that much difference either.  If our poor economic performance is a barrier to constitutional progress, opposing those proposals which might impact the economics doesn't seem like the best way of removing the barrier.

Scotland suffers a similar problem.  I was quite taken aback at some of the coments in this report from the BBC.  If there was one element of the Scottish economy which I'd expected to be largely Scottish-owned and controlled, the Whisky industry would be it.  But that turns out not to be the case; clearly, even added together, the myriad of small specialist distilleries are dwarfed by the big boys - all of which have their headquarters elsewhere, and the profit flows to them.

More interesting, however, was the suggestion for some sort of whisky tax, as a means of retaining part of the profit in Scotland.  And even more interesting was the attempt to be creative in order to get round the little problem that Scotland doesn't currently have the power to tax the whisky - so it could instead place a levy on the water being used to make the whisky.

The companies, of course, are up in arms at the suggestion that their right to make untrammelled profit from Scotland and syphon it elsewhere should be in any small way challenged.  Well - they would, wouldn't they?  But it looks perfectly possible that some sort of levy, set at the right level, would have little effect on jobs and sales and still provide a substantial source of additional income to the Scottish Exchequer.

The message there is that instead of a knee-jerk oppositional response, perhaps we too should be looking more creatively at how we can ensure benefit.  It's true, of course, that we don't even have the powers Scotland has presently, but that doesn't mean that there aren't ways around that if we set out to be creative instead of simply blaming someone else.

There are still some proposals (including fracking) which I'd oppose - but there are other reasons for that.  The fact that profits flow elsewhere is an argument for changing the way we manage companies and their profits, not for opposing the activities which generate those profits.


G Horton-Jones said...


Am willing to bet that Asda make more money out of selling Welsh than the slaughter house in Anglesey or the producing farms combined

G Horton-Jones said...

Omitted the word lamb but this sequence can be applied to all retail activity.
A while ago it was milk prices that were in the public eye
No change here --dont ask how much milk is dumped or how many miles it travels or how many dairy farms no longer exist.
Tax regimes allow food retailers a wastage allowance
. It is not widely known if at all that they dump food to maximise their tax situation ie more money fron putting in a skip than on the shelves

Anonymous said...

Thing about fracking is that it's a 'young' technology. In Wales, initial bores tend to use more local sub-contracting. The drilling company is from Neath, the pumping company based near Llandarcy, the solvent producer in Torfaen, and the core sample geological expertise is in Llandudno. Even the multinational company that does the rubber rig shocks is headquartered in Flintshire. Also, there is ample skilled manpower for the Vale of Glamorgan site to be drawn from the valleys. I do wish I could say the same for wind turbines. That is what needs to be looked at.