Protective shield?

On the same day that the Scottish First Minister, Alex Salmond was meeting senior members of the UK government to put the case for more financial powers to safeguard jobs, Wales gets confirmation that 150 jobs are to be lost at the Newport Passport Office.

Unemployment in Wales is higher than the UK average. In difficult economic times, Wales fairs worse. Higher than average unemployment levels in the late 1960s led to a "regional policy" which devolved civil service jobs out of London. The Passport Office, the DVLA in Swansea and the Mint in Llantrisant were set up in Wales as part of this regional policy, creating hundreds of jobs. And now, because of the ConDem's public spending cuts, many of those jobs are at risk.

Every single job in Wales is worth fighting for, especially jobs which pay more than the minimum wage. Every job lost means less money circulating in our already weak economy, leading to job losses in the private sector too. As the PCS Union have argued, it makes no sense during a recession to enforce more people to take benefits from the public purse instead of paying in to the taxation pot.

Dependence on a Westminster government to either give or take away jobs is unsustainable for Scotland and for Wales. With his demands for more fiscal autonomy, the Scottish First Minister aims to ensure a long term income stream. Cuts to the Scottish budget from Westminster will continue to be savage. More fiscal autonomy will provide an element of resilience, a buffer to Westminster's cuts. Income from excise duties, energy revenues and more borrowing powers will come in handy over the next few years.

Meanwhile, Wales's First Minister was yesterday reported to be open minded about the Assembly gaining financial powers, having been decidedly lukewarm before the election. The cuts in Wales are savage too, and Labour have just won an election on the back of a promise to protect people in Wales from the Tories cuts, to act as a shield against them. Without powers over finance, they can't.

Wales wins praise for waste law

"We bin 10 Wembleys full of food a year – what a waste of energy" says the headline in today's Independent on Sunday in an article by Kate Youde. "Wales has shown the way by collecting and reusing kitchen rubbish, but most UK councils lag behind"

Its not mentioned in the article, but Wales's success on this front is down to the Environment and Waste measure which set Welsh waste targets. The measure came about after a wait of almost three years for the Environment Legislative Competence Order which had to be granted by Westminster before the Assembly was free to legislate.

The referendum on the Assembly's law-making powers which takes place on March 3rd will get rid of the costly and cumbersome LCO system, which requires us to ask Westminster's permission before laws which only affect Wales can be made. Why not make it your new year's resolution to vote YES for Wales in March?

What's this referendum all about?

On 3rd March, people in Wales will go to the polls to decide the future of Wales's law-making system. This explanation is taken from an interview for Celyn magazine issue#3 - Autumn 2009


What’s wrong with the current legislative system, given that it has been in place for a relatively short amount of time?

There are two stages to our legislative system in the Assembly. The first stage involves getting the competence to make the laws drawn down from Westminster and the second stage is making the law itself. The first stage is the issue that has caused the problems. It has been slow and due to a limit on UK Parliamentary time there has been a limit on the number of competence orders we can ask for. There have been opportunities for those who are not positively disposed to devolution to interfere in the system and to water down the demands of the Assembly. If we get a ‘yes’ vote in the referendum we will be able to move straight to the second stage of the process. We won’t have to ask for competence from Westminster and will be able to get on and make those laws in the areas where competence is devolved to the Assembly.


What difference would it make to Wales if the Assembly took powers directly in the 20 areas it currently has responsibility for rather than having to go to Westminster initially?

The main difference is that we could make measures and legislation much more quickly than we can at the moment. We would have more capacity for making measures in the Assembly and there would be fewer opportunities to those who are not disposed to devolution to interfere in the process. Although holding a referendum implies there would be a big change, it is, in reality, little more than an administrative tidying up exercise.

The Assembly has had problems trying to acquire the power to suspend the right-to-buy in areas of high housing pressure. The Right to Buy, brought in by Thatcher, is responsible for taking more than 135,000 council houses out of the public sector in Wales. In order to stop the leaching of houses from the public sector we need to stop the sale of those houses. The Assembly wanted to make that law but the MPs in Westminster have prevented that happening so far. The Deputy Minister for Housing, Jocelyn Davies had to make a fresh attempt to draw down the powers after her first application was blocked. Hopefully, we will be able to suspend the right-to-buy at the end of this Assembly term but only when I see the legislative competence order before the Assembly will I believe it. [update: the LCO has now been granted and the affordable housing measure is going through the Assembly – after three and a half years.]


Would making those decisions in Cardiff really make any difference to the lives of the people of Wales and, if so, how?

People can now have a much greater input into the laws that affect their lives. Many organisations, if you ask them, would support a yes vote in a referendum for that reason. People will not be getting up the morning after a yes vote people declaring ‘my life is a whole lot better’ because the Assembly has the power to make laws.

It will be difficult to see any immediate change but in the long term, I think we will gain more confidence in our ability to do things for ourselves and people in Wales will take a much more active role in contributing to the legislation that affects their lives.

A yes vote will not be earth-shattering, but a no vote would indicate a lack of confidence in devolution as a project and in Wales as a nation. From what I see, most people are proud of what Wales has become. They will have a chance to register that pride on March 3rd.

The credit crunch

In this Sunday's Observer Will Hutton claimed that "the global system is paralysed on a scale that surpasses 1929". The paper predicts unemployment to hit the two million mark by the end of December. We will see big increases in house repossessions, pension losses and in the numbers of people unable to pay back credit card debts and mortgages. Last week we found out that Welsh councils and police forces have millions tied up in Icelandic banks.

The problem has been caused by greed. The financiers have been gambling with our money, lending to uncreditworthy borrowers and covering their risk with derivatives called credit default swaps (CDS). These are intended as a form of insurance for investors, but the desire to make a quick buck has seen them bought and sold as bets on banks failing. This caused the market crash of last week, including the Icelandic turmoil - a few greedy investors are winning because they bet on banks collapsing, while most people will lose from the ensuing economic collapse. The banks have now lost trust in each other and have stopped inter-lending. As Will Hutton says "The problem is that the markets no longer have any faith that the world financial system they helped create has any future. The model is bust." This should be the end of casino capitalism.

Alistair Darling last week announced a £500bn package to try to get things moving again. Adam Price gives a good analysis of this, as does Rhydian over at Bontnewydd. Darling has "re-capitalised" the system.

As this and this article point out, public ownership of the banks as a way out of this crisis is no longer thought of as socialist pipe-dreaming. While my recent calls for bringing the energy companies into public ownership have been rubbished in some quarters, it now seems that even former New Labour ministers are thinking the unthinkable.

This is big politics, where the decisions are made in the "big" place. Can we do anything about all of this in Wales?

Ieuan Wyn Jones has called an economic summit for this coming Thursday, where business leaders and trade unions will meet with Welsh ministers, to see what the government can do. The priority will be saving jobs, but there'll be no room for manoeuvre if the Secretary of State has his way and refuses to accept Westminster responsibility for local authority and police losses in Icelandic banks. With credit unobtainable if not extortionate, PFI, PPP and housing stock transfer contracts will be put under pressure, potentially having a big knock on public spending. All of this could seriously damage the public services which are under the remit of the assembly. I've no doubt that ministers are doing and will do whatever they can, but what about the rest of the assembly? We need to pull all available heads together to find solutions to these problems. We know they are coming, so we need to consider how we can work together to pool ideas that may put protections in place to stave off the worst effects.

This is an interesting idea backed up by the man who refused a job in Gordon Brown's re-capitalising team. In Plaid's 2007 Assembly election manifesto we pledged to “maintain and strengthen the Post Office Development Fund and work with the Post Offices to develop a full range of over-the-counter banking services geared to people who otherwise would be excluded from financial services, effectively creating a ‘people’s bank’.” Adam Price has argued the case for local authorities to offer mortgages. There could be avenues for helping people to access affordable food and fuel. Tomorrow I will call for all parties in the assembly to work together to investigate some of these ideas and to be prepared to act on issues as they arise. There's no doubt that bad times face us. We have to utilise all talent to find a way for the assembly to cushion people from the worst of the blows.

Regional pay

I asked the First Minister the following: Q1 Leanne Wood: What representations has the First Minister made to the UK Government regarding the introduction of regional pay for civil servants? OAQ(3)1281(FM)

The First Minister (Rhodri Morgan): This matter comes up from time to time in discussions with Government Ministers. We do not advocate the approach of setting two-tier pay. We have long accepted the need for London weighting, but if you start introducing minus weighting for areas far away from London, that will exaggerate the distinction between London and south-east England and the rest of the country.

Leanne Wood: I welcome your answer, First Minister. As you know, the UK Government has already introduced regional pay as a pilot scheme in the Ministry of Justice. The plan is to roll out regional pay throughout the non-devolved civil service. Do you agree that, if it is rolled out, it is inevitable that gross domestic product in Wales will sink and the wealth gap between Wales and the rest of the UK, which is already too great, will grow over time, which would be disastrous for Wales? Do you agree that the policy severely undermines the Government of Wales’s efforts to reduce poverty and raise our GDP? Clearly, this is not a devolved matter, but we do have a great interest in it. Will you agree to raise the matter with your colleagues in London as a matter of urgency?

The First Minister: We have done that pretty consistently. The Governor of the Bank of England commented last week that we need a period of slower economic growth in the UK to squeeze inflation out of the system. Inflation tends to be at its highest in London and south-east England, especially asset price inflation and pay inflation, because you have very high pay in the city—at least you did until very recently. That tends to make it difficult to recruit civil servants and other public servants, which causes a problem with running public services in London. London weighting copes with that, but if you start reducing pay in areas away from London, you will exaggerate the inflationary forces in London and south-east England and the degree to which Mervyn King thinks you have to slow the economy down to correct inflation.

David Cameron on Wales

Innov8 launch - bikes and allotments

Dyma fi yn lansio dau o bolisiau arloesi'08, rhan o ymgyrch etholiadau lleol Plaid Cymru / This is me launching two of Plaid's innov8 local election campaign policies: