Monday, 25 June 2012

Better together

Two speeches in one day by leading politicians. Could it get any better? 
The first one delivered by dear old Alistair Darling. He who now has time on his hands having been evicted from Number 11. He’s now leading the “No” campaign to keep Scotland from “buying a one way ticket” out of the Union.
The thrust of how he and the cross-unionist party  intend convincing the Scottish people to stay in the Union is that all of us on these Isles are “Better together.” 
“We’re positive about being a proud nation within a larger state and the far wider range of opportunities for our people that this creates.” 

In the book 1066 and all: there were according to the authors 103 Good Things in history. Now Alistair Darling will add the104th “Good thing” and that is, staying in the Union. And presumably listening to Alex Salmond would be a very “bad thing” indeed.
But whilst the ex-Chancellor was fighting for the the Union, the First Lord of the Treasury was putting a very different gloss on what it means to be part of the Union.

The Prime Minister was all from moving from the national to the regional. Forget the “one nation” when money is involved. No, he wants the nations and regions to be different when it comes to hard cash.
Mr Cameron is of the view that benefit levels affect work incentives and as wage rates vary around the country. His reasoning is that what someone receives in benefits compared to what they potentially get by going into a job has an impact on the incentives they face. 
So in 1066 speak, national pay and national benefits is a “bad thing.”  So the Scots and the Welsh getting less benefits and less wages would be a thoroughly “good thing”  according to Mr Cameron.
Now whilst Mr Darling has put on his kilt and busies himself with campaigning to convince the Scots that the Union provides them with “shared political, economical and cultural institutions.” The Prime Minister wants to save cash. He's happy to  see a breakdown in some of these shared economic institutions if that means the Treasury paying less to the ordinary Taff or Jock.
If this is what the cross party campaign is about then Mr Salmond will be laughing into his porridge.  
“Better together” certainly won’t mean “Better off, together” if Number 10 gets its way.
Because of editing commitments over the next month this blog will not be appearing, but normal service will be resumed towards the end of July.

Friday, 22 June 2012

Homes, poets and bankers

For the opening of Community Housing Cymru’s new offices  Gillian Clarke the National Poet for Wales penned a verse titled “Not much to ask.”
A holt, a den, a form,
like otter, fox or hare,
shelter from shadows of the night
against the bitter air,
four walls for the winds to lean on,
a roof for the rain’s knock,
a door to close against the dark,
a key to turn in the lock,
a window to watch people pass, 
a street, a tree, a patch of grass.
As night falls it’s our breath, our story
clouding the glass.
A poem about all of us having a basic need for shelter, triggered the thought that the economic storm that’s raging around Europe was initially caused  by a massive slump in the housing market in the United States.
The story starts with more and more cash lent on houses that had a low asset base.  People used the cash to buy all kinds of goods, cars washing machines you name it the money was there to buy it.  But as they say, all good things come to an end.
These banks got cold feet. They collectively decided they’d been a bit imprudent had put out too much cash on such a slender base. They decided to roll things back.
So how did they set about getting themselves out of a hole of their own making. 
The first port of call was to become heavy with those a few years earlier they’d been encouraging to take more and more cash. But just like low life loan sharks they pushed the poor householders for their cash back. 
So what happened when the pressure was put on, the owner-occupiers try to sell their houses to clear their debts. Or more often than not foreclosure happened. Homes were seized by their creditors the owners evicted. The banks then try to sell a job lot of houses.

It’s not rocket science to work out the consequences - plunging house prices and then more and more find that their  debts greatly outweigh their assets.  
Even more find themselves forced to sell. Each day, not to put to fine a point on it, the numbers finding themselves in the financial mire goes up. House prices? They're in a spiral moving relentlessly downwards. 
Result - a massive slump in the housing market which triggered the  general slump we’re all in today.
Not only did these banks lean on those they’d handed the cash to, but they also off loaded as many of these mortgage agreements to other banks and financial institutions. 

What these banks were buying was junk. If you buy junk you eventually run out of cash and just like the householders you're in trouble.  In banking terminology, they’re over exposed. To the rest of us they're in a mess. So there you have it - the banking crisis in a nutshell.
What starts as a genuine need by families for a roof over their heads, becomes a financial instrument that is more and more distant from that basic need. And as they say, that's why we're  where we are, in a middle of a recession or perhaps even a depression.
So what’s to be done? Well,  government needs to bring back confidence to the market.  This cab be done by building more homes for rent. It also can help with mortgage rescue schemes so that families don’t loose their homes and cause creditors to further depress house prices by off loading these  homes onto the market.
The Welsh government bemoans that it hasn’t got many weapons in its economic armoury. Housing is something it has responsibility for. It could and should use housing as a vehicle to grow the economy of Wales. All it takes is a little imagination and some determination.

Wednesday, 20 June 2012

Nuclear free?

Carwyn Jones wants to welcome nuclear-armed submarines into the deep waters of Milford Haven. They’re not on offer yet. No, any decision will have to wait for the Scots to make their minds up as to whether they  stay in or out of the Union.
Despite the Westminster’s protest that no decision has been made on whether to deploy Trident with ballistic missiles carrying nuclear warheads or not.
The announcement to place a contract with Rolls Royce in Derby earlier this week for a £1.1bn to develop reactor cores provides a pretty broad hint that Cameron is only waiting until a more convenient political time before he sinks his defense budget into the project. 
So the chances are that Trident will be developed despite it not making much sense in strategic terms and despite Liberal Democrat objection.
So when it comes on stream will the Scots want it? The SNP government could theoretically after independence negotiate a defense agreement with the rump UK government. But the SNP have said they want the fleet removed from its base on the west coast of Scotland so an agreement with them on Trident is unlikely. So Faslane naval base on the Clyde would likely close.
So where then would HM government move the four Royal Navy Vanguard submarines and the naval base that services them. 
At a guess, despite Mr Jones’s dearest wish, the base is unlikely to come to Pembrokeshire. The UK government are unlikely to put all its strategic eggs in the one haven.
With a fifth of the UK’s energy and gas being handled in the deep waters of the Haven it’s difficult to imagine that our “so called” nuclear deterrent would be placed in the area as well. 
So why then is the First Minister raising the issue now, after all even the decision on Trident is not due to be taken until 2016. 
The decision has less to do with Wales and more to do with the campaign to keep Scotland within the Union.
Mr Jones, who will be in Scotland for a meeting of British and Irish ministers on Friday, his remarks will be latched on there. He will no doubt be saying how he wants these prime jobs. The dog whistle message to the Scots “vote for the Union if you want to keep these jobs.”
Although Carwyn Jones claims to have the support of his cabinet on the issue  he is unlikely to get the backing of ordinary Labour members. Many of these  have been active in the peace movement and are unlikely to endorse a leader that wants to bring nuclear weapons to Wales. 
After all the Welsh Labour party in one of its conferences voted to abolish nuclear weapons. At a guess that policy has never changed. It will be interesting to see if there are any moves to change the settled view of the comrades. Unlikely, me thinks.  It might make for a less anodyne Welsh conference if the issue was to be debated.

Friday, 15 June 2012

Revolts and Standing orders

Efail-Wen in Carmarthenshire and an agenda item amending Standing Orders in the Welsh Assembly at a glance don’t seem to have a lot in common. But they do. Why?
It’s because next week sees again the onwards march of devolution. The Assembly is set to change its rules to allow for Private bills. Now what are these? Well, they’re not the same as Private Member Bills which are for back benchers to make laws. 
No, these bills are for outsiders to use. Individuals or bodies outside the National Assembly can attempt to use the Private bill to give themselves powers beyond or that which conflicts with the general law. 

Such measures usually attract a fair amount of objections and take a great deal of time before they’re passed. 

In fact the whole of the proceedings are of a quasi-judicial nature. For the benefit of Jeremy Hunt that means,  careful and balanced as if in a court of law.
Such bills are expensive and are time consuming to pass. Very time consuming indeed. That’s why in Westminster, MPs try to avoid being put on a committee dealing with a private  bill. It’s the parliamentary equivalent of doing time. The Whips have been known to use the threat of being put on the committee of a Private bill to sap the rebellious will of miscreant Members.
It will be interesting to see how long it is before Assembly Members groan at the prospect of being put on a committee that deals with one of these.
But back to the main story. Many of the big infrastructure schemes that formed the background of the industrial revolution stem from the Private Bill. Our railways network and our canal system were all established by using the devise  of the Private Bill. And of course, the development of Cardiff Bay itself was as a result of a much contested Private Bill.
But what’s it to do with Efail-Wen? Well, this was the first place that the Rebbecca Riots struck. They were attacking the toll gate there. At a time of real poverty in rural Wales because of wet harvests, the small farmers vented there anger at having to pay tolls to the various Turnpike Trusts founded to repair and maintain roads. 

There were a web of toll gates around Wales and each time the people passed through, they had to pay.  Around Carmarthen there were about 11 different Turnpike Trusts so little wonder that the natives in the area revolted.  And you’ve guessed it, the Turnpike Trusts were established by Private Bills.
So when Nick Clegg said that the Welsh government should accept more responsibility for raising the money it spent surely he didn’t have such schemes in mind. Or did he?

Wednesday, 13 June 2012

Housing matters

In 1988 Wales was run from over Offa’s Dyke by Peter Walker. He was Secretary of State for Wales at the time. He was offered the job by Mrs Thatcher as an insult. To her he was a dripping “wet” and could not be trusted with a major department of State. 
He did wrestle out of her one commitment. That he be given a free hand to develop his own policies for Wales. This commitment was easily granted for she regarded Wales as the UK gulag. So what someone “that was not one of us” got up to there, was of little concern.
One of the things he got up to was tacking on to the 1988 Housing Act the provision for a new housing quango called Tai Cymru (Housing for Wales). This quango amongst other things was responsible for funding housing associations. 
By funding these bodies Tai Cymru dramatically increased the number of social housing homes in Wales. But the very same Housing Act accelerated the right to buy. 
So whilst housing associations were building homes for rent those looking for home to rent were having a hard time getting a roof over their head. Why? Housing Associations and Councils stock was contracting as more were buying houses under the right to buy.
Incidentally on an historic note, Tai Cymru was scrapped by Ron Davies. One of the selling points for devolution was the bonfire of the quangos. Tai Cymru was put aflame in the first round. Other bonfires followed, but as they say that’s another story.
Now you’ll ask what’s the point of this history lesson now. 
Well it’s beginning to dawn on many, that many millions of young people will be excluded from owning their own homes. The banks and building societies after the banking crisis are being stricter in who they lend to and on what terms. They’re demanding that purchasers put down much larger chunks of their own cash into any house if they hope to get a mortgage. 
Hundred per cent mortgages are very much a thing of the past. The best many can hope for now is 90 per cent. Large deposits and uncertain job markets mean that many will never become owners. 
The young will be renters. And because of the cuts to the budgets of social housing providers, the bulk of the houses rented will be from private landlords. 
Already this sector has doubled in size in Wales these last ten-years. It is predicted that by 2025 nearly a third of all houses will be in the private sector. So the future is the private rented sector.
Now nothing wrong with that you say, that’s the norm in most of Europe. Sure. But in Europe there's a significant difference, in most European countries the law favour’s the tenant. But here? 
Well, that takes me back to Maggie Thatcher and the 1988 Housing Act. Mrs Thatcher was lobbied by private landlords about needing more freedom to get control of their properties. She duly obliged by creating short hold tenancies. Giving tenants little rights and making it easier for landlords to evict. These tenancies have now become the norm.  
So if the future is to be rented. Those renting should have homes of high standards and the tenants should have real security. So let the Assembly create it's own tenancy and rid Wales of Mrs Thatcher's legacy in housing.

Tuesday, 12 June 2012

Tax powers, not yet.

Tax and stimulating the Welsh economy dominated the Assembly’s discussions today. It all kicked off in a press briefing given by Jane Hutt when she was asked what progress was being made in discussions with Treasury on the issues of “fair funding” for Wales (the Barnett formula to you and me) and the power to borrow.  
Well her answer was much the same as her reply last time “discussions still continue.” Put in terms that the polite Jane Hutt would never dream of saying the Treasury are dragging their feet on the issues. 
Of course the won’t want to change Barnett this side of a Scottish referendum. Why? Because the Scots do very nicely out of it. 
Any change that might address the underfunding of Wales would have to address the massive bung being given to the Scots. 
This bribe will surely feature very heavily in the  Unionists case for Scotland staying within the Union. So sorry Jane you’ll be left dragging your feet awhile yet.
There is a knock on effect to "no change." Carwyn Jones has made it absolutely clear he’ll make no demands for more powers on taxation until Treasury gives him what he wants on “fair funding.”

So despite the grafting away on these issues by the Silk Commission nothing will happen until Carwyn gets his way. 
Indeed proof of Carwyn Jones’s attitude to taxation powers came when responding to questions from the leader of Plaid Cymru Leanne Wood, the First Minister denied that tax-varying powers could help deliver the economy out of recession.

Whether you accept Plaid Cymru’s case or not that the “ability to vary taxes would offer a real incentive for the government to bring about change to the economy and to finally take action to help Wales’ struggling economy.” It is clear that Carwyn Jones ain’t going to budge, until HM Treasury move. And they won’t budge until Mr Salmond holds his referendum. 
So blame it on those pesky Scots, Leanne.

Meanwhile, another call for devolution was presented to the government by economist Professor Brian Morgan.
The Welsh government asked Professor Morgan to look at how the complex regime of business rates could be reformed to help the economy. “Surprise, surprise,” as Cilla Black would say, Morgan’s main conclusion “Full control over business rates should be passed to the Welsh government as a way to boost the economy.” 
And Enterprise Minister Edwina Hart’s response “I’ll study the report carefully.” That’s government speak for “this is a hot potato so I’ll put it into the pending tray awhile yet.” 

Thursday, 7 June 2012

There'll always be an England

Mr Miliband thinks that the poor English have been neglected by politicians and wants it put right. He blames the last Labour government for neglecting the largest nation in the United Kingdom.

Like many a politician before him he hopes to get some political advantage by tapping into the euphoria created by the Jubilee celebrations and use it to counter the SNP and their quest for independence.
Young Ed  reckons that the whole of the United Kingdom need to be involved in the debate over Scotland's potential independence. His view is that the SNP have too "narrow view of identity". He accuses Alex Salmond are offering a "false choice" between being Scottish or British.
His view is that Britain is a country where it is always possible to have more than one identity. More than one place in mind when you talk of home.
Labour had been "nervous" to talk about English identity in the past while pressing ahead with constitutional change in other parts of the UK according to Miliband.
Whilst acknowledging that the Labour government put in place the devolved institutions in Edinburgh, Cardiff and Belfast, he feels the party failed to engage with English identity.
"But somehow while there is romanticism in parts of the Left about Welsh identity (and) Scottish identity, English identity has tended to be a closed book of late.
"For too long people have believed that to express English identity is to undermine the Union. At the same time we have rightly helped express Scottish identity within the Union. This does not make sense. You can be proudly Scottish and British. And you can be proudly English and British, as I am.
"Now more than ever, as we make the case for the United Kingdom throughout the United Kingdom, we must talk about England.”
The thought that somehow England has been forgotten in the devolution settlement is disingenuous. 
The reason that devolution gained currency at all was the disadvantage that countries like Wales suffered in a centralist state that was dominated by one country - England. 
On most economic indicators Wales is bottom of the league. Wales benefitted little from being part of one of the most centralist states in Europe. Yet, somehow Miliband feels sorry for England. Poor things.
If he’s so concerned why isn’t he pushing alongside Carwyn Jones for a Federal Kingdom on these islands. Then the English can have their own parliament.  And all would be right with the world, wouldn’t they Ed.
No, Miliband’s speech is simply that of a politician trying to get on the patriotic bandwagon created by the Jubilee and the Olympics. No substance, no proposals.
 Beware of politicians that wrap themselves in the Union flag I say.

Wednesday, 6 June 2012

Beware of Greeks

So there is turbulence within the Euro zone today concerning Spanish banks. But their economic minister still maintains that its speculation that they’ll seek a bailout for their banking sector. You can be certain when a Minister declares something is speculation it’s not long before it becomes a fact. 

But even if he’s to be believed we’ve all still got a problem and that’s Greece.
If Greece was to ditch the euro and leave the single currency we’d be in the proverbial. Yes. Even the UK. Some economists reckon that it would knock 3.5 per cent from UK output and it could be a whole lot worse.
If we look back at the time of the crash in 2008-09 the UK’s output fell 7 per cent. Now that wasn’t because those wicked bankers stopped giving out cash. But it fell because the world didn’t heed Corporal Jones’s advice “don’t panic” it did panic and consequently output went down in the UK. 
It there was a similar reaction to Greek’s exit, then the UK generally and Wales in particular would be in real difficulties.
Many have pooh-poohed the Greek default by saying that our exposure to Greek bank’s is very low. Yes, sure it is. But, and it's a very telling but, we’ve lent to countries that have lent to Greece. 

If they take a fall, we do, in turn. Put simply it’s a domino effect.
And certainly the worries about Spanish and Italian banks would then cease to be speculation. There would need to be a massive bailout and the UK would be involved in one way or another.
If our banks had to do "write downs," their profits would take a hit. It doesn’t take a great deal of imagination to guess what their response would be - a lending freeze. 
Welsh businesses would have to whistle if they wanted money to expand or help with their cash flows.
But with half our exports going to Europe any drop in confidence in the euro zone with a Greek exit would hit demand. Confidence would go out of the window. And as we’ve seen over the years if London and the South East suffer, the Welsh economy becomes even sicker.
So forget those euro sceptics that take glee at Europe’s discomfort. The message “it’s not us, we’re not in the euro” is both hollow and false.
It does matter to us, especially to those parts of the UK that are already feeling the pinch of the recession. Greece’s problems are also Wales’s.
In the words of John Donne 
No man is an island,
Entire of itself.
Each is a piece of the continent,
A part of the main.
If a clod be washed away by the sea,
Europe is the less.
As well as if a promontory were.
As well as if a manor of thine own
Or of thine friend's were.
Each man's death diminishes me,
For I am involved in mankind.
Therefore, send not to know
For whom the bell tolls,
It tolls for thee.