Archive for November, 2012

Silk and Taxes


Community councils have it, County Councils have it, the Westminster government has it, even those dreaded European’s have it and maybe, just maybe, the Welsh Assembly might have it. What? you may ask. The right to raise some of its own cash from taxes.

A Commission set up be the Westminster government under the Chairmanship of Paul Silk, has come to the startling conclusion that the Welsh government would be more responsible with its money if it had to raise it itself. It needs an year long Commission to tell us what is obvious to anyone that manages a household budget.

They put in much grander language though. That’s the benefit of a posh education for you. “Devolving tax and borrowing powers to Wales would empower the Welsh electorate and Government, increase responsibility.”

The report  called ‘Empowerment and Responsibility:  Financial Powers to strengthen Wales’ has  33 ways to make the Assembly more grown up and responsible.

By grown up it means not giving it the powers straight away ‘cos in their light, the Assembly is seen as some wayward teenager. The Commission’s task is to make the Welsh Government learn to be responsible.  And the way to do it? That well and trusted principle of not allowing anyone to run before they’ve learned to walk.

The polite way of saying it without  causing upset. “The proposals to give Wales its own tax and borrowing system for the first time represent a significant change which should be implemented step-by-step to build experience and balancing risks to the Welsh and UK budgets.”

So the Assembly is given the equivalent of a paper round – taxes that don’t generate to much tax. These are landfill tax, stamp duty land tax, and an aggregates levy.  Also business rates should be fully devolved.

Just to underline the point that the Assembly only get the right over the cash a bit by bit. They say that  Air Passenger Duty should be devolved for long-haul flights initially, with future full devolution possible. So that occasional flight to distant lands from Cardiff you can have the money from, but the large numbers going to Malaga on holiday generating loads of cash, well CarwynJones can forget that. It’s far to much cash and that amount of cash would just go to Carwyn Jones’s head.

One day children you’ll inherit the earth. Well, if the Welsh people  agree after yet another referendum perhaps not the earth but certainly power over income tax.

Meanwhile to help you learn all about it we’ll make it a shared responsibility between Cardiff Bay and Westminster, with the Welsh Government being able to vary income tax rates within the UK income tax structure.

They do acknowledge that Wales might have been short changed in the past and that the proposals on income tax should not go ahead until the heads of Jane Hutt and Danny Alexander are knocked together and they resolve the issues of fair funding in a way that is agreed by both the Welsh and UK Governments.

All in all if the report gets the green light about a quarter of Wales’s spending will be raised in taxes raised in Wales.

The report is now in the hands of David Jones, the Secretary of State to do with it as he sees fit.


One swallow does not a summer make

Unemployment in Wales is down. It is now 121,000. Down by 14,000 from the same time last year. But with an unemployment rate of 8.2% it is still higher than the UK average of 7.8%.

The Office for National Statistics(ONS) say that whilst the unemployment figures were down by 7,000 overall in the last three months it rose for women.

A figure that the Welsh TUC were quick to latch on to. Their economic policy officer Alex Bevan said “Unemployment amongst women in Wales has also risen by 1.5% since this time last year, adding yet more evidence to the case that austerity guarantees deepening inequality.”

Many economist attribute the positive figures less to real growth and more to an increase in part-time jobs.

Welcome though the figures are, it would be dangerous to breath a sigh of relief that the hard times are over. The new dawn hasn’t arrived yet.

That old Jonah, Sir Mervyn King the governor of the Bank of England was quick to put a damper on things. He reckons the UK economy is at risk of a triple-dip recession.  And just to make sure that Cameron and Clegg have sleepless nights, he says the UK economy is going to have persistently low growth. And this low level  will bump along the bottom until the next election.

He’s cut Britain’s growth forecast to 1% next year and warned that output was more likely than not to remain below pre-crisis levels over the next three years.
The much heralded growth of 1% in the last quarter which brought to an end the double-dip recession was seen by King as driven one-off factors.  It was the Olympics that did it. Now? Well, no legacy for the economy. Just barely holding our own. He goes further and says that if the contraction continues into 2013, then the UK could be looking at a triple-dip recession.

If that woe was not enough, King just had to pile on more misery. Not just making us miserable with his forecast of low growth his Bank of England has also said that inflation will be up as well. It’s now expected to rise to 3% and not likely to drop until late in 2013.

So the chances of the government getting the economy back on track by the time of the next election don’t look that great. It doesn’t take Mystic Meg to predict trouble ahead.  With wages frozen and inflation eating at living standards the voters ain’t going to be very happy bunnies. They’ll certainly be feeling the pinch and may be looking to allocate blame.
Not the best of circumstances to go to the country. Without doubt when the time comes for the nation to place the crosses young Ed will be reminding the voter, that “its the economy, stupid.”

Cardiff South and Penarth

Cardiff South and Penarth

The last time there was a by-election in Wales in what was a safe Labour seat from the beginning of time there was a shock result. Labour failed to win the seat. The seat? Blaenau Gwent. OK, there were some pretty unique factors at play.
The seat had been won by a popular Labour Assembly Member Peter Law. He stood against his own party as a protest. The reason for the protest? The vexed question of all-women short lists. One of these had been imposed on the Blaenau Gwent constitutency by Labour party HQ.
The local party were not happy bunnies. And that’s putting it mildly. Many left the party. They urged their Assembly Member to stand for Parliament. If truth be told it Peter Law didn’t take much persuasion to stand. He had become a semi-detached member of the Labour group in the Assembly. But in one of those quirk of fates, just as he was about to announce his candidature he was diagnosed with a brain tumor. He bravely decided to stand. He won. But died after serving as a Member of Parliament for only an year.
The by-election was keenly fought between Owen Smith for Labour and Dai Davies as an independent. The independent won. But Labour won the seat back inthe 2010 general election.
Meanwhile Owen Smith fought Pontypridd in 2010, won and has now risen to be the shadow Secretary of State for Wales.
This preamble is a way of saying that Owen Smith MP was again pounding the streets in a by-election this week. No, not as a candidate but to lend his support to the Labour cause in Cardiff South and Penarth.
This a by-election caused by Alun Michael resigning his seat in order to stand as a Police and Crime Commissioner.
No one is predicting  a Blaenau Gwent type upset. The seat should remain firmly in Labour’s grip. The big question is, how many will bother to vote. And of course for politclal anoraks which of the other parties are up or down.
By-elections in safe seats are notorious for producing low turnouts. The voters take the attitude to quote a television character “I’m not bothered.”  They know the outcome and take the attitude that their vote won’t change much.
Apathy usually rules. It’s likely that the turnout will be below 40% and it could be a lot lower.
So it highly unlikely that Stephan Doughty the Labour candidate will not be the next MP.  He’s straight from central casting for Labour.  Young, male, on message and from the third sector. In his case boss of Oxfam Cymru.
The Tories were second last time and should retain that position.
The big question is will Plaid Cymru move from the fourth that they got last time. Will there be a Leanne Wood bounce? Are there any signs that they’re making ground in areas outside their heartland?
The seat used to be have a Prime Minister in the form of sunny Jim Callaghan. Although the word sunny was a bit of misnomer as insiders always said he was a difficult person to work for and with. But as they say, that’s another story. Since Callaghan took the peerage the seat was  Alun Michael’s since 1987.