Archive for June, 2011

Wrong horses entered?

The two-horse race is underway for the leadership of the Tory Party in Wales. The other contest for the leadership of Plaid Cymru is pending but they’˜re not under starters orders, yet!

The contests may result in both the parties saddling themselves with the wrong leader.

Lets first look at the Tories. Here we have the kind of contest that often happens right of centre against left of centre. Andrew Davies comes from the landowning farming, dare one say it, squirearchical wing of the party. His appeal will surely be to the traditional wing of his party.

Nick Ramsey represents the more progressive centre of his party. He could be described as a consensus seeking meritocrat. If Nick Bourne were to anoint an heir, Ramsey would surely be the one.

It is difficult for a journalist without access to the membership list to make an informed judgement as to how the contest will go, but having covered many of their conferences I can observe that the Assembly Members are a great deal more progressive than the rank and file.

Draw your own conclusions as to how they will vote. But what can be said is that it will be the wrong leader for the next stage of development for the Welsh Conservatives.

Despite the party opposing the establishment of the Assembly over the years it has gradually moved from antagonism, toleration and now to down right love of the institution.

And little wonder, because from the total rejection of the party by the Welsh electorate in the Blair landslide of 1997 the Welsh Assembly has allowed them to claw back into the esteem of the Welsh voter. Indeed they have replaced Plaid Cymru as the official opposition gathering an unprecedented return of twenty five per cent of the vote in the last Assembly elections.

Now to build further on this vote they need to underline their Welsh credentials. How better to do this than have a Welsh speaker as their leader in the Assembly and their de facto leader in Wales.

None of the current contenders fit the bill, but there is a man that does. None other than their current leader in Wales, Paul Davies. Ok he’s only holding the fort until the Tory members make their minds up in July. But in his temporary role he’˜s proven to be able, astute and a safe pair of hands, and he’s thoroughly Welsh. Under him the Tory reach could go to parts of the Welsh electorate body hitherto undreamt of. But alas it’s not going to happen, yet!

Now Plaid Cymru have the opposite dilemma. Their support amongst English speaking Welsh voter is low. They’re seen as a party for Welsh speaking Wales.

Some years back the party’s internal polling told them so. Their response, wait for it, they changed their logo. Dropping the three green hills of Snowdon and replacing it with the yellow Welsh poppy. No one ever explained how this would make the party more English in its appeal. But nevertheless that was the intention, but clearly whatever the intention it did not succeed as the last election results clearly demonstrate.

So the perception remains that it’s a party for the Welshies.

Now what clearer way of demonstrating that this isn’t the case by electing a non-welsh speaker as their next leader.

But who have they got?

Could Jocelyn Davies be the very person that fits the bill? She’s astute, was a successful government minister and not to be sniffed at in politics a useful behind the scenes operator. Many attribute the One Wales agreement to her negotiating skills. She’s from the coal mining Valleys and, of course, is English speaking.

Well, she clearly ticks some of the right boxes. Yes the boxes the party need to see ticked if they are to make electoral headway.

But will the party choose her, the answer is likely to be no. Why? Because the bulk of Plaid Cymru’s membership live in the North and the West, the Welsh speaking heartland. The odds on these electing a non-Welsh speaker are small indeed

So not for the first time in politics we see our political parties being held back by those very people that would have most to gain from electoral success. It is the irony of it all that makes politics so fascinating.

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Unemployment, inflation and Wales

The announcement of today’s modest drop in unemployment is a very small ray of sunshine in what otherwise is a pretty bleak economic scene.

In Wales unemployment has dropped by 9,000 (0.7%) on the quarter to 115,000 (7.9%), which is 10,000 lower than the same period last year. Although worryingly the claimant count has risen by 1,700 in the past month to now stand at 72,400.

These figures may only just be a small respite before the Public expenditure cuts really start to bite. Against such a background Carwyn Jones’s Legislative programme seems worthy but totally inadequate to deal with the economic realities facing most Welsh people.

Many may argue that the Welsh Government haven’t really got the economic powers to deal with the systemic problems of the Welsh economy. True, but there does seem to be a marked reluctance on our First Ministers part to grab the fiscal powers the Westminster government are prepared to devolve to Scotland and Northern Ireland. Let’s hope that he has a change of heart before he gets on his feet to make a statement next week.

Delivery is the key word on the lips of most politicians. Carwyn Jones is even going to establish a delivery unit, whatever that may be. So let’s hope that he delivers on fiscal powers.

Another who has failed to deliver is Mervyn King or as we must now learn to call him Sir Mervyn. How would the Bank of England fare if a delivery unit measured their performance? No gold stars here, methinks, for their delivery in dealing with inflation.

According to the Office for National Statistics the latest figures for the UK Consumer Prices Index shows inflation again running at 4.5% or if you take in the Retail Price Index of inflation, which includes mortgage interest payments, it is running at 5.2%.

Now the Bank of England has set the target for inflation at 2%. The latest figures show the rate running at twice this amount. Now this target has been missed not once but 34 times in the last 40 months. If punters put their shirts on horses with the same degree of success, the M&S men’s wear department would be experiencing an unprecedented growth.

What’s the Bank’s response to this? Well, precisely, nothing. Why? I hear you ask, because they can’t risk affecting the recovery. Preventing the economy dipping into recession is the only game in town. So interest rates will be kept at these historic low levels for much longer than is prudent for the economy and the most effective tool in the armoury of countering inflation ’“ raising interest rates ’“ is not to be deployed. The unemployment figures although welcomed do not indicate any great growth. So the Bank will give us more of the same.

Now who will suffer with interest rates being kept at a record low of 0.5% for the 27th month in a row? Well, as Cilla Black would say surprise, surprise it’s the poor. So, nothing new there, then.

According to the Institute of Fiscal Studies, people on low incomes have suffered higher inflation than those on higher incomes in the past decade. The IFS reckons that pensioners on state benefits had been especially hard hit.

It doesn’t take an Institution to tell us why. For only the relatively better off owner-occupier have benefited from the lower mortgage rates courtesy of the Bank of England’s low interest rate policy.

So the relatively rich are better off but the poor suffer because of the Bank’s inaction on inflation. It was always thus. People on lower incomes who spend a higher proportion of their money on gas, electricity and food will have suffered disproportionately because of the sharp rise in these essential items.

The question for the Welsh Government is this, if Sir Merv and his Bank of England continue with their current policy how will Carwyn Jones and his team stand up for these very vulnerable Welsh people and what weapons will they deploy?

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More cash wanted

‘No taxation without representation’ was an effective political slogan used by the colonists in the New World to tackle their lack of representation in the mother Parliament.

‘Representation without taxation’ as a slogan doesn’t have the same resonance. But this is the line that Carwyn Jones seems to be pushing in his dealings with Mr Cameron.

Yesterday, the First Minister ruled out the Welsh Assembly having tax varying powers. His line seems to be that Wales is underfunded, so give us more cash to spend. End of story.

He is right in arguing that Wales is underfunded but quite wrong in closing his mind to taxation powers.

With Scotland and Northern Ireland pushing for more fiscal autonomy from HM Treasury it is doubtful if Mr Cameron will concede to Wales a system that increases the Treasury contribution without some measure of responsibility resting on Welsh Ministers shoulders.

After all even the smallest Community council has to raise its own money for its pet projects. Why should the Welsh Government be treated differently?

The thrust of the First Minister for Wales case that the country is under funded, rests on the cogent arguments produced by Aberdare born economist Gerry Holtham. In a report produced for the Welsh Government he proved conclusively that Wales was being short changed.

In Holtham’s view the Welsh Government should pursue with the UK government a needs based formula as a means of determining the Welsh block grant.

To be fair to Carwyn Jones it is this strategy that he was pushing in Number Ten, yesterday.

But in pushing that strategy the First Minister seems to be blinkered to the rest of Holtham’s recommendations. Namely, that part of a Treasury block grant should be replaced with revenue raised from Welsh taxpayers.

Holtham and his fellow commissioners wanted ministers to be able to vary the basic and higher rates of income tax by up to 3p in the pound.

The First Minister’s opposition to such proposals beggars belief.

Surely there is something inherently wrong in a democracy for a government not to want to raise its own cash. It prefers to push for an increase donation to its begging bowl from central government and seek no direct payment from the voters that put them in the job.

It surely should be the aim of government here in Wales in the next five years to reduce dependency on central government grant and increase its reliance on revenue from the voters that elect it. This would surely make for a more accountable government.

The announcement, today, that Scotland will have increased borrowing powers must point to Wales shortly been granted the same. So more fiscal control will come despite Carwyn Jones’s is reticence. Taxation would be a good place to start.

Lord North lost the colonies because he didn’t make the connection between taxation and representation. It’s always a mistake not acknowledging that they go together. The Welsh Government should wise up to the fact.

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