The economy and Wales

During the week it was interesting to interview Lord Howe to talk about his time as Chancellor of the Exchequer in Margaret Thatchers government. The mantra of that era was much the same as the mantra of today’s government ‘they had inherited a mess from the previous Labour government and had to take firm action to deal with it.’ This small extract of the interview was used in a package by my colleague Lynn Courney in Sharp End.

What struck me however in my informal discussion with Lord Howe was the philosophy of the time. There was the belief that Keynesian economics was out and the market should be allowed to do its own thing. Hence the growth of the financial sector and the over dependency on that sector of the  UK economy. With hindsight we now see what a mistake that was.

For us in Wales that period saw big structural changes to our economy. The new governments policy saw the acceleration of the decline that had already started under the Callaghan administration of our heavy industries.

There was a run down of the traditional heavy industry such as coal and steel. The jobs tied to the industries were never replaced with other manufacturing jobs, The  growth was in jobs tied to the service industry. As Max Boyce so wryly observed the ‘pit house was a supermarket now.’

But another aspect of the economy almost directly followed the unique situation the Conservatives found themselves in Wales. They had to govern a country that had a Labour majority. 
How, you might ask did they set about it? They developed the quango state.

These public bodies were established and on the Boards they put on Conservative supporters. Bodies such as the WDA, Development Board for Rural Wales, Tai Cymru etc. all had their placemen and women.

These bodies in time developed, grew and became major public sector employers.

With the advent of devolution many of the quangos were absorbed within the Welsh Assembly Government itself. They were no longer arms length organisations but part of the civil service.
A  convincing argument can, therefore, be put forward that Wales’s high dependency on the public sector for jobs can be directly attributed to the previous Conservative government’s policy. Whilst that government failed to a degree to build up manufacturing and private sector they certainly succeeded in crating the large public sector.  And the sector has continued to grow like Topsy. Now just under a quarter of the people of Wales in work are employed in it. 

There is a certain irony that  almost the first act of the Conservative - Liberal Democrat coalition has been to pronounce its determination to cut back on public expenditure. 
George Osborne’s budget made it clear that he expected to see all government departments’ budgets cut by twenty five percent.  Meaning a big cut back in jobs.

In Wales this will have a disproportionate effect because of our high dependency on such jobs. 

Wales will take a hit with again and despite the Assembly’s best endeavors can do little about it.

Periods leave their mark

There's a time for everything, and marking time is important to everyone. A certain day is all important to each one of us. The birth day, wedding day and the date of death.
Not only are some days important but some years - the year that you start school or college, the first job or even retirement.
Each one are significant to us as individuals.
Its also similar for society. Time is noted and some days are celebrated. The years of the two world wars, armistice day, Coronation day and for some even the day of the investiture. And to us Welsh Saint David's day and for many that remember with shame Tryweryn  and with sadness, Aberfan.
Some political years are remembered, for good or ill.
The thirties of the last century with high unemployment, poverty and despair have left a scar on the generation of the time. Despite many of us having been  born way after the era, it is still part of our 'psyche' as a nation.
As also 1945 - the end of the war and the advent of Clem Attlee as prime minister and a Labour government with a majority which established the welfare state, the national health service and nationalized many key industries.
Despite us changing governments many times since then, little impression was made until the coming of Maggie Thatcher in 1979. Her philosophy that there was no such thing as society, it was the individual that was all important. Almost all industries were privatised, and she made many of us shareholders and capitalists.
Many were buying shares in the once  state owned industries. The regulation of the City of London and the financial sector in general was eased.
There was a negative side to all this. Wales lost its heavy industries and great was the cost to many a community in South Wales. Despite this all the period of her premiership was memorable.
Her successors changed very little. It was very unlikely that John Major would change much, but what was disappointing to many Blair and Brown followed the same path.  And in some respects it is why we are in the economic mess we find ourselves at the moment. Because, it was the light touch on regulating the banks that caused them to take risks and hence the hole we're in.
What about 2010? Will this be an year to remember? It is quite likely that it will.
All the signs are there. It is quiet possible that our society will undergo fundamental change. If there is a substantial cut back in public expenditure, most of us will be affected. Some services will disappear totally, others will be transferred either to the private or voluntary sector. The welfare state will shrink almost out of existence and as certain as  night follows day the economy will be back in recession again.
Oh yes, its possible that we'll remember the time with bitterness.

Listening to the cuckoo sing

There is  tradition in parts of Wales that when you hear the cuckoo sing for the first time each year if you shake some coins in either your pocket or purse prosperity will come your way. So my advice to you dear reader is to go out and listen for the bird before George Osborne gets on his feet to deliver his first budget.
But you may say we've already had one budget in April why do we need another so soon? A fair question, why indeed?
Its because the strategy of the new government is totally different to that of Mr Brown's government.
Alistair Darling's approach was to tackle the problem gradually. His biggest worry was to through the country back into recession by acting in haste on the debt. Indeed the strategy had the backing of the Liberal Democrats especially their economic 'guru' Vince Cable.
But he, like his party has changed his tune. That's what power does!
Now the most important thing, according to the coalition, is to rush in and deal with the problem immediately. And the strategy? Firstly, to start to cut public expenditure. We've had a taste of this already from the unfortunate David Law, and we'll have more in the Autumn when his successor starts on the comprehensive spending review.
But now the other side of the coin, the Budget. As George Osborne has made it clear for some time, an urgent budget is required to increase and improve the public accounts.
He is eager to get more of us to cut back on our personal debt and make us more careful and less profligate. As the Bank of England is independent of the Treasury its not possible to change our behaviour by using interest rates. It is therefore necessary to deal with the problem directly. How?
Take the money straight from our pockets. VAT will  certainly go up. Some benefits will be frozen and some will vanish all together. There will be less money redistributed than previously.
What ever the details of the Budget, the public will ask but one question, is it fair? Will the burden of the situation the country finds itself in be shared equally amongst us all? There is a suspicion that the Conservative government will look after their friends, the rich and privileged, and it will be the rest of us that will bear the cost. We'll see.
What is certain, it is at the start of a term of office that a government will take the most unpopular decisions. So we can expect a rather tough three years.
So we live in hope that the cuckoo sings in the next week or so.

Half a sentence on Wales

The just love their pageants in Westminster. You'll often see men, and they usually are men, dressed in a colourful uniform more appropriate for a fancy dress party than a parliament. All this is writ large on the occasion of the state opening of parliament.
The Queen turns up with her husband in an up market coach and horses, members of the House of lords in their furs and members of the Commons 'summoned' to listen to the address from the throne. If you were to arrive on this planet from outer space, you'd think the whole thing to be bizarre. Well that's the way it is the English do like their pomp and ceremony.
But far more important, is the content of the speech. Or to us in Wales the lack of content. In the whole speech there was only half a sentence specifically on Wales. The brief reference was to inform us that the government would comply with the request from the Welsh Assembly and grant a referendum sometime within the next eighteen months. Hooray!
Despite the National Assembly deciding by an unanimous vote in the chamber requesting a referendum on more powers it is Westminster's decision in the end. They decide on the timing of the order and as a consequence when the nation decides 'yes' or 'no.'
Interestingly the prime minister said that it was likely that the referendum would take place next year. Why is this of interest? Well because it was as much of a surprise to Cheryl Gillan , the Secretary of State as it was to everyone else.
It was also a disappointment to the Carwyn Jones who heard this, not through the usual channels, but from the press. Embarrassment all round.
Carwyn Jones maintains that it should take place the Autumn. The Secretary of State saying that there was not enough time to consult on the question for this to happen. With the former Secretary of State, Peter Hain, announcing that his officials maintained a few days before he left office that it would be tight to hold a referendum in the Autumn but not impossible. Those very same  officials are now working for Mrs Gillan.
And in truth, with parliament now extending the time that it is sitting by an extra four weeks this summer with political will it would be possible to have things ready for the Autumn.
But with the David Cameron now having expressed his view the hot money is now on the new year being the time when Welsh people will be able to express their views.
The sooner the better. Why? It is not possible for the inquiry on how Wales is funded to be established until  the referendum has taken place.
Wales will be at its loss by delay.

GOLWG article translated: Country Cousins

Its very uncomfortable to attend an event or other and everyone ignores you. Everyone else gaining attention and get none. Even worse if your in a family party and the rest of the family are full of it and no one seems to care about you.
That's exactly how I felt when David Cameron attended the Assembly. There's little doubt that our new Prime Minister is a natural communicator. On this occasion he tried to persuade us that the countries of the United Kingdom were all part of one big happy family and he did not want to see us, like some families, falling out over money.
Indeed many hoped that this was a new start between the Welsh Government and that of the London Government under a Conservative Prime Minister.
An offer was made by him to attend the Assembly each year to answer questions. Although there was not much of a welcome to that suggestion from the Welsh Assembly Government.
Without doubt it would be a bit odd for one legislature to question a member of another legislature. Such a system would lead to every county council in Wales demanding Carwyn Jones to attend their local chamber to answer for his government. A system of government that would be totally ineffective and slightly stupid. But it was consistent with being a member of a large family. But one has to accept that the suggestion was made with the best of intentions.
But as the good book says 'its by their fruits you recognise them.' And it took little time to recognise that there weren't any fruit at all.
Yes, I'm referring to the Governments first publication 'The coalition: our programme for government'. A statement that underlined the governments commitment to devolution and therefore it was a set of proposals for the Westminster government to implement.
But, and its an important, but. The document made it clear how the government would finance Scotland, Northern Ireland and Wales in the future.
In the North of Ireland alongside the existing system, the Westminster government would explore methods by which the Northern Ireland Assembly could vary Corporation Tax in that part of the Kingdom.
A concession of some importance. The complaint in Northern Ireland is that they are under a competitive disadvantage to intense new industry in in comparison to the Republic of Ireland. So power over the tax is all important to them.
In Scotland Mr Cameron's government is intent on implementing the recommendations of the Calman Commission immediately. New powers and a new way of financing Scotland will follow.
But what of Wales? Nothing but a promise. A promise that depends on the referendum result. What, you ask, is the promise? To establish a commission to look at our funding. Despite everyone recognising that Wales is not receiving a fair share, for some time, of the resources that is its due from the Treasury. And despite the Welsh Assembly Government having already commissioned a comprehensive report on the matter from Holtham.
Nothing will happen until after the referendum, even to start the inquiry. God only knows when a Commission of the kind will finish its inquiry. What is certain is that Wales will not receive the help that  is tits due for some time. This at a time when every penny will be important to sustain our public services.
No, if we are part of Mr Cameron's large family, we're the poor country cousins. Sitting quietly in the corner while the others celebrate. And perhaps, we'll get the crumbs of the feast - 'sometime!'

Cawl without meat

I was cheated. I went to a cafe on the basis that they were advertising in their window 'cawl'. But I had a bowl full of vegetables without meat. 'Cawl' without meat! Have you heard of such a thing!
Is it to be like that in the world of politics?
Certainly the photograph of the week was that of the two public school boys, Nick Clegg and David Cameron in the rose garden of number ten looking lovingly at one another and promising 'a new politics.'
What exactly is this new politics? Coalition! Well there's not much new in a 'coalition.'
In truth, a coalition was in being at the end of David Lloyd George's career as Prime Minister. The Tory leader at the time, Bonar Law, urged by his back benchers pulled the mat under Lloyd George's feet in 1922, and out where the Liberals into the political wilderness from then until now.
This despite Lloyd George's undoubted political skills and craftiness. Indeed in no time such was the decline in their status amongst the electorate the became the third party of Britain. Their representation during the rest of the twentieth century in Westminster was small indeed. And Nick Clegg is no Lloyd George.
The results of the election was a stroke of luck for the Liberal Democrats. Labour losing ground, the Conservatives unable to take advantage and despite the hype after the first television debate when Nick Clegg lead in the polls for a brief moment their campaign ultimately failed. Losing seats was their fate in the end.
Indeed you could put up a case that all the parties failed in this election. Labour losing seats, the Conservatives failing in their aim of a majority and Plaid Cymru after a lack luster campaign failing to gain any of their target seats. Consequently no one on their own could form a government.
Thus the opportunity knocks on the door of Nick Clegg to decide who gets to keys to number ten and gets to kiss the Queens hand. And to be fair to him he played his hand well.
Who would have thought we would see five Liberal Democrats in the Cabinet?
But its now that the problems for the party begin, especially here in Wales. I would hazard a guess that most of the votes collected by them here because they were perceived to be a radical party.  It will be a real disappointment to these voters to see the party that they voted for sharing a bed with the Tories.
Shortly the government will have to administer massive cuts to public expenditure and consequently unemployment will rise and services curtailed and cut. It doesn't take much imagination to work out who will be blamed. Not the Conservatives, as their supporters except the need for cuts. That's what was on the label. No, the Liberals will get the blame because that's not what they promised. Gradual cuts is what they said in their manifesto.
Many can justifiably shout 'deceived'. They were promised radical 'meat', but that's not happened. It is unlikely that they will be forgiven by the Welsh electorate in the next election - the Assembly elections.
They will be punished. It is quite possible that history will repeat itself and they will be in the political wilderness for another century.

Golwg Column translation: The need for a new constitution

"The people have spoken, but we're not sure what the message is."
The words of Paddy Ashdown on the night of the general election. Underlines perfectly the election results - uncertainty.
The world of nature abhors a vacuum. To some extent so also in the world of politics.
To avoid a vacuum in the world of politics every possibility is discussed and plans are drawn up to meet every eventuality. That is what precisely happened as a consequence of the election results when it became clear that no party had a working majority.
Gus McDonald, the head of the civil service, prepared a paper to let those involved know what would happen. Mr Brown was to stay in office until there was an understanding between the various parties as to how to move ahead.
And the reason for all this, to avoid embarrassment to the Queen.
But as electors we deserve better. It shouldn't be information that is kept within the establishment, but information that is available to us all.
The difficulty arises because live under a regime that sees us as subjects and not citizens. No right to information but merely crumbs to keep us subjects happy.
The discussions and the decisions are made behind close doors according to a pattern determined by the establishment. Its exactly like the decision's occurred in the old Soviet Union. The first that the population knew about any changes was when the leaders came out into the Red square or they read about it in Pravda. Not a clue as to what was going on behind close doors. How different is it in these islands?
In every other country that calls itself democratic, the population knows exactly where it stands after an election. Why? Their constitutions are written on paper so that everyone know the rules and conditions by which they are governed.
But no, not here in the United Kingdom. We pride ourselves on the unwritten nature of our constitution. All is dependent on convention. Of course when all came from the same background, went to the same public school and were members of the same London club, the constitution worked well on a nod and a wink.
But a modern country deserves better. A country can't be run on rules that were devised for the 18th century but are now well past their sell by date.
A new constitution is required for the country. One that recognizes devolution, is codified and is clear. It's not up to some civil servant to decide what happens, but us citizens.
If that requires us to get read of the Queen as head of State, so be it. Its about time we came of age as a country. Free citizens and not subjects, that's the way ahead.