Support your local Credit Union

Yesterday was International Credit Union Day, so I visited the Treorci branch of the Dragonsavers Credit Union. Dragonsavers is a proper Welsh co-operative with five branches in Rhondda Cynon Taf. The staff were in good spirits, despite the doom and gloom in the economy, peoples’ money is safe here. I've been a member of Plaid Cymru's credit union for years, and I've joined Dragonsavers now too.

Members of the creidt union share their finances through a mutual bond of common ownership. Affordable loans (2% which can reduce down to 1.5%) are issued to members in amounts based on how much they have saved. Loans can come in handy to pay for Christmas or holidays. Credit unions are all regulated by the FSA and are very safe ways of looking after your money. The credit crunch will have no affect on them. They are protected from the reckless behaviour that has prevailed in the City of London, and aren’t involved in any risky investments. Credit unions operate an ethical loans policy so their risks are minimised. Now is a good time to consider joining a credit union. The One Wales government has already provided publicity and support for credit unions to expand- there was a further announcement yesterday that we are aiming to give areas of Wales access to a credit union. The more members a credit union has, the more they are able to provide a greater variety of services. They'll encourage you to save, but the minimum is £1 per week, and loans are available straight away.

Credit unions offer one small step towards a less competitive and more co-operative way of living. I am glad to celebrate them today.

Action on the Credit Crunch

Leanne Wood: The biggest issue facing all of us is the potential fall-out from the credit crunch. It has been predicted that unemployment will reach 2 million UK-wide by Christmas. As well as losing jobs, people are likely to lose their homes, pensions and public services. Private finance initiative and housing stock transfer schemes will cost much more than we first thought, and £500 billion was allocated to rescue the banks last week. In addition to that local authorities have lost money in Icelandic banks. All of that will put pressure on public services.

Carwyn Jones: It is difficult to have a debate along those lines without crystallising it around some proposals. To suggest a way forward, an all-Wales economic summit has been arranged for Thursday to discuss the current financial crisis. It will be chaired by the First Minister and attended by the Deputy First Minister and the Secretary of State. It will bring together the leaders of some of Wales’s top companies, trade unionists and others from key economic sectors in Wales such as construction, retail and financial services. The purpose of the summit is to listen at first hand to the difficulties that already exist or that are anticipated in the months and years to come and then for the Government to formulate a way forward.
Action has already been taken in the draft budget announced last week. More than £290million has been allocated to fund the Flexible Support for Business programme. We have also, recently, introduced a £7 million package of rate relief to help smaller businesses. It is important that we try to gain, at first hand, the views and experiences of businesses before considering what we might do to assist them and before we see what might be done to give Members an opportunity to engage in the issues.

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.

Hain in the neck

On Sunday's Politics Show, Peter Hain appeared to oppose the Welsh referendum pledge that his party have signed up to as part of the One Wales agreement (as the Hen Ferchetan reports here). He has said that a referendum should not take place before 2011, because we won't win. He clearly wants to be on the winning side. The whole point of having a referendum is to see whether the people want what is on offer. Waiting for public opinion to change when the pledge has already been made defeats the object. The 'Yes' campaign will take our case to the people of Wales. Do people want a stage-managed referendum?

Welsh Ramblings has questioned whether Hain really is committed to more powers for the Assembly. Times have changed since the Labour party in Wales had its course decided by its MPs rather than its AMs. Welsh Labour's Assembly Group should decide and are deciding their own agenda now. They should have the final say on where Welsh Labour stands on this referendum, not Peter Hain or any other out of touch MP. There is a growing realisation now that Thatcherite policies and economics have been unsustainable and are leading to the possibility an economic collapse. The need to break away from the London consensus has never been clearer, and getting a Parliament, despite its limitations, is the most obvious next step forward. There are difficult times ahead and we should remember Gwyn Alf Williams who wrote how in the past the people were "left naked under an acid rain" of Thatcherism.