Archive for July, 2011

Summertime and economic woes

Politicians both in the Assembly and Westminster are back in their constituencies. But unfortunately they can’t pack up the country’s problems in their kit bags and take it with them. Oh, if only it was that easy.

No, there is a real world out there. It may be summer but the economic weather is not shining. Today, Lloyds TSB report that fewer than a fifth of businesses plan to invest in growth within the next six months.

This lack of confidence will certainly hold back any hope of recovery and may indeed indicate that unless the Chancellor has a dramatic rethink in his policy, the economy will hit the buffers.

The report indicates that business is holding back on investment decisions because of rising costs and weak domestic demand.

But it’s chicken and egg – a lack of business investment damages further the prospect of recovery and will produce even slower growth.

But tomorrow is the real test, for that’s when the GDP figures are produced.

Many economists are predicting that these figures will do nothing to raise the nation’s spirits. Some economists are even predicting the economy slipping back into negative territory.

The story of growth in the first quarter of the year was that of an insignificant increase, the second quarter may also turnout to be just the same. Optimism, I think not, a pancake would be less flat.

The pressures on the economy are numerous and varied. These include public spending cuts and the still high inflation figures. Both of which have led to weak consumer spending and a slowing down of the housing market.

The euro zone crisis may hit UK exports, 40 per cent of our trade is with Europe. The trade figures for the second quarter may show a falling off in exports.

But if America sneezes its well known that the rest of the world catches pneumonia. If negotiations fail between Obama and his Republican controlled congress over the budget, then the US could default on its borrowing for it will have run out of cash to pay its creditors. Result, chaos in global financial markets.

So these many factors cause real concern for our economy. Osborne needs to devise a plan B, and pronto.

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Runners and riders

Who will the runners and riders in the Plaid Cymru leadership challenge? Well, that’s a question for another day, well tomorrow to be precise. That’s when my old chum Vaughan Roderick shines the torch in my eyes to tease out the information on Radio Wales’s Sunday Supplement.

No, its other runners and riders that are of interest today. Namely horses in Newmarket.

Now LSE might have taught some interesting subjects over the years but my time there was usefully employed choosing winners.

On the fifth floor in the sixties they had a wonderful library named after Shaw. It was meant to expand the minds of students from politics and economics and other dreary social science subjects to the Arts. There they had chaise longues to lie on and classical music would play.

Many found it a quiet retreat to recover from a hangover. A library that was put to good use by, moi. By osmosis I developed a love of classical music but more importantly it allowed the solitude and time to study form.

It worked, it was afar better thing done there than has ever been done since. Yes, those were winning days. Never to be replicated, unfortunately.

My love of horse racing has stayed with me, unfortunately, the luck didn’t. I even had a share in a racehorse once, Mind you I’d probably have had better returns if I’d stood on the river Taff throwing bank notes into the water.

Well, why the ramble you ask. It’s because my daughter and her cousins are going to Newmarket today and she asked me to pick her some winners.

So as a special service or a disservice to regular readers of this blog I share the selections. Altruism only goes so far, I’ve placed my bets already, just in case dear readers you rush to William Hills and then reduce the odds!!

The first rule of thumb is that on horses with odds of over 7 to 1, an each way bet is advisable.

Now Newmarket is one of those courses that always feels cold, it’s the wind from the Urals. Now punters can keep warm briskly galloping to place their bets but whether it ups the speed of the horses, it’s doubtful.

13:45 Burano is on everyone’s list of favourites, but for a me the each way bet is Entifaadha and that’s where my money’s gone.

2:15 Taqleed catches my eye

2:45 Instance is the horse to beat but you no what they say an apple a day etc. so my money goes on Golden Delicious

3:20 Cinderkamp

3:55 Sovereign Debt has had some good outing recently so worth a punt.

4:25 Anoint has a task here but still rates

5:00 Watered Silk

Now when I suggested Horse racing as a regular for S4C with myself as a pundit, they turned it down. The prefer programmes on poetry. After today’s performance you may well thing it was the right move.

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Tax and Spend

Wales’s government is to be held to account for its expenditure, according to an announcement this week by Cheryl Gillan the Secretary of State for Wales. ‘It is only right that the Welsh Government is accountable for the money it

spends.’

The Westminster coalition government in the autumn will set up an independent Commission to look at the financial accountability of the Welsh Government and National Assembly for Wales.

It clearly is a cause of concern to the Prime Minister and his team that Wales can set its own priorities on expenditure but takes no responsibility for raising the cash. He hinted at this when he addressed the National Assembly recently.

It is understood that George Osborne and his Treasury team are more sympathetic to the Holtham Commission’s recommendations than was Gordon Brown’s Labour government. Carwyn Jones is known to be cool on powers to vary income tax and is not greatly enamored with the other powers that Holtham proposed.

In announcing the new Commission Mrs. Gillian made it clear that in examining the issues of fiscal devolution and accountability in Wales the work of Gerry Holtham’s Commission would form the bedrock of the study.

In her announcement she said, ‘The Government is committed to considering all aspects of the Holtham Commission’s reports. Separate discussions will continue on Holtham’s proposals for funding reform for Wales.’

So the discussions on fair funding and the reform of the Barnet formula are to be held separate from the main work of the Commission, which is on tax and other fiscal matters.

The hope is that the report and its recommendations will be complete by the autumn of 2012. Then the Government will consider any proposals, and they will then take the opportunity to look and take stock on the constitutional settlement in Wales in light of experience.

It is thought that it is at this point that Westminster will look at implementing any measures out of the Commissions and also make the final decision on the voting system for the National Assembly. If any legislation is required it is likely to be placed before Parliament in 2013.

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