Len Gibbs
The Gordian Knot
David Melding AM, Deputy Presiding Officer of the National Assembly of Wales is unduly modest when in his submission to the Commission on Devolution in Wales he writes, “most of the technicalities of the debate challenge my understanding considerably.” He then sets out an informed and detailed explanation based on his federal views. They are distinctly different from that of First Minister Carwyn Jones with regard to borrowing, income tax and federalism.
David Melding’s key proposal is for the Commission “to suggest ways in which the current constitutional arrangements can be enhanced by a measure of responsibility for raising revenue.” The case for or against is not discussed. It is assumed devolution will be enhanced through granting tax-varying power. The submission then considers what is in reality as difficult as the ‘Gordian Knot’. Any proposal will have to be introduced without regard to unknown problems and consequences that may and are likely to arise in ‘fiscal-decentralisation’.
David Melding recognises one of the difficulties when he states, “The Welsh Government should not be given access to the capital markets.” This is his settled conclusion based on the obvious conflict between the central government and the sub-state – i.e UK v devolved. The problem can be seen in Euroland. The over spending and borrowing of Greece and Spain and others have led to pressures on other countries that use the Euro. The total borrowing of the Euro countries is a factor in interest and credit ratings. The borrowing of sub-states in Spain has increased to offset the reduction in funding by the central government. This is having an adverse effect on Spain’s rating and ultimately on the Euro. Without any doubt, the centralised spend and borrow Labour Welsh Government will borrow to support socialist spending at the expense of sound fiscal measures.
The drive to introduce some form of local taxation in Wales has been the lack of accountability by thesocialist government in Wales who want to pursue spending policies without the necessary funds. It has resorted to the mantra, “Tory cuts/the Banks/Margaret Thatcher” as an excuse for its own failure to deliver the benefits promises in devolution. The problem Wales has is the shortfall in taxation income against the assessed public expenditure need. Holtham identified a shortfall of £300M. Allowing for this, the actual shortfall amounts to more than £9 billion per annum. Even if devolution had actually improved the economy by its claimed value, taxation revenue would remain substantially under the current level of expenditure.
No amount of tax-varying of indirect taxation will increase tax revenues nor will it provide any realised measure of accountability. Indirect taxation has no direct link to public expenditure and therefore no effect on how the electorate view the performance of the devolved government. The only way that accountability can be achieved is by direct taxation and that means income tax. David Melding recognises the problem writing, “Great care would be required to ensure that the Income Tax powers do not have the unintended consequence of making the tax system in Wales more regressive.” As no-one knows what the consequences will be it would be foolish, if not reckless, to embark on the introduction of any form of tax-varying power.
David Melding sums up the position with, “It is important for Wales that the UK remains a successful transfer Union and that the UK Government is primarily responsible for macroeconomic stabilisation functions.” Based on the evidence of his submission that kisses not only income tax but also federalism goodbye. Gordian Knots are solved by cutting them.
The Melding submission can be read at: http://commissionondevolutioninwales.independent.gov.uk/files/2012/02/David-Melding-AM-English.pdf
Friday 18th May 2012
Next posting: Monday 21st May 2012
The true cost of 20 extra AMs
The Price of Incompetence
David Davies MP has apologised for the incompetence of MPs. He could have at the same time apologised for not having campaigned in the 2011 law-making power referendum. But David Davies is not the only MP who has noted the decline of the quality of MPs. Although the educational standard of MPs has increased the actual competence has declined. This is due to a number of reasons: the decrease in people who were capable of a better education but were denied it. Instead they went into industry, learnt ‘how to’ and worked to become Labour MPs. They brought with them the experience of commerce and industry. The current path to being an MP is university, a degree, some political post or middle management in tax funded organisations and then Parliament. They have better qualifications but less ability and experience. Another reason is changing the system from evening sessions to day-time sessions. People who made a living in the City could spend an evening at Westminster, for relatively low remuneration as an MP, using the commercial experience they had on governing the nation. Paying MPs to attend Parliament may have seemed beneficial but it had the consequence of removing experienced people from Parliament and replacing them with graduates who have chosen politics as a career. The salary level of an MP equates with other people in middle management and as such can only draw people who are in middle management. This is problem at the Assembly. The lower salary attracts and can only attract people from middle management, and because of the relatively low salary, attract people who fail to be selected as the candidate for MP. AMs who are ambitious, David Davies and Alun Cairns have upped their income by moving on to Westminster. Julie Morgan has extended her working life – taking a salary cut – by becoming an AM. The Assembly is not the place to be for an aspiring politician. The low middle management salary level is the core of the problem of lower level of competence in the elected representatives. The salaries are low in comparison to many in tax-funded jobs. Many head-teachers in Wales earn as much, if not more, than the First Minister – as do many lawyers. Head-teachers and successful lawyers are not going to give up highly paid positions to become AMs. Most AMs are either professional employees in tax-funded organisations or from positions in some union or another. Most of these would not be able to hold the same level of responsibility in profit orientated organisations. Recognising this is not a criticism of the people concerned. It is a criticism of the system that has decided to pay a low rate of pay to people who have the responsibility of running the government. The pay settlement of MPs that gave them almost as much income from expenses as salary was highly criticised at the time with warnings that the system was open to abuse. And it was abused, by many to make-up the cost of maintaining more than one home. It would have been much better to have doubled the salary with remuneration of expenses that were ‘wholly necessary and unavoidable”. It would have saved not only the fabricated expenses but also the waste incurred by lowering the competence standard of politicians. Cheap is expensive in the long run. Practical Step to Improvement
Nick Bourne’s comment that now we have devolution we have to make it work was not a stupid remark. It’s just the way it is working. Devolution has not fulfilled its promise and as the economy is the basis of everything else, the failure to improve the economy leads to the conclusion that either devolution is an inappropriate method of local governance or the people in the devolved Assembly aren’t up to the task. Part of the problem is that devolution in the minds of those who wanted it was never devolution but a journey to something very different. In the mind of Ron Davies and Plaid that of independence and latterly in the mind of Carwyn Jones, Labour and David Melding, Conservative that of federalism. These intentions and aspirations have subjugated devolution to a stepping stone to a different form of political arrangement. Devolution has its merits. It allows people to determine how they want to spend the available taxation funding locally and on what. That is not in and of itself a bad thing. The concept of a super County Council Assembly has points in its favour, although the functions could be performed by the existing unitary authorities without resorting to a separate body. Devolution has been devilled by the political aspirations of a few that have regarded cultural historicity as sufficient reason to undo the United Kingdom. This has been complicated by the attitude of politicians within Labour who are bound by the association of Labour within the UK but who want to use devolution to establish a Labour dominated Welsh petty state. These aspirations have got in the way of making devolution work. The electorate of Wales has never voted for independence or federalism, or a centralised petty state. These aspirations are the politicians and belong to them alone. What the people want is the fulfilment of the promise made in 1997 that devolution would improve the economy of Wales. As we have devolution it can be made to work by returning to the basic reasons why devolution was proposed in the first place – effective IMPROVEMENT. Ideas such as ‘fledging democracy’ and ‘parliament of Wales’ need to be relegated or removed entirely from the minds of the AMs and replaced with a determination to do the very best Wales can given the circumstances of the larger economy. If other parts of the UK can out-perform Wales then it is not the larger economy that is at fault, but the politicians within Wales. Distraction of developing a petty state need to be dropped and the entire focus put not on holding out a begging bowl, but to do what was promised in 1997 – and that is to improve the economy through devolution. It can be done. Ulster is performing better than Wales. Nice as the Ulster people are they are not better than the Welsh. What the Ulstermen can do the Welsh can do, and given the more favourable circumstances, do better. Its time we did. The way ahead
Nothing is a done deal in politics. The nationalists, separatists and federalists feel content. With minority support they have hi-jacked devolution and furthered their objectives. There are, however, some clouds on their horizons. Plaid, despite losing votes and AMs in May 2011, is content at having used Labour to implement a stage of legislative powers as a step towards independence. The problem Plaid has is that only about 10% of the electorate would vote for independence. This is compounded by the fact that less than 20% of the electorate vote for Plaid, and importantly, the trend is downward and away from Plaid. The problem is recognised and admitted. The solution has been to make the republican and socialist Leanne Wood become leader so Plaid can gain votes from the non-Welsh speaking traditional Labour supporters. This may have been the decision of the majority of Plaid members who voted but it means Plaid will have to confront and overcome the formidable political organisation of Labour… not an easy task. This strategy risks upsetting the Welsh language rural supporter who is not socialist and not necessarily for independence. There are other parties who provide an alternative. The ordinary LibDem supporter despite a historic home rule stance were not so keen on granting law-making power to the politicians. More voted ‘no’ than ‘yes’. They are primarily a non-socialist rural party with a significant number of Welsh speakers among their numbers. Non-socialist former Plaid voters may find themselves more comfortable with the LibDems. If the LibDems were to follow their policy of ‘local’ issues the leaders would take note of the vote in the 2011 referendum and move away from home rule and towards limiting the power of the Assembly. The LibDems being a national UK party are placed to lead a move towards improving devolution in Wales, away from socialist centralism. The Tories are frightened of their own shadow. They are so afraid of being accused on not being Welsh they have stopped being British and have no essential identity. Who is a Tory? Possibly someone who wears a funny Welsh hat at rugby internationals. They could, with bravery, win sufficient seats to become the Welsh Government. In the UK election they gain more votes than is needed to win 30 seats in the Assembly. The problem the Tories have is they are flirting with federalism because they see no alternative to the march of the nationalist objective of independence. It is time they took hold of the fact that only 23% of the electorate voted ‘yes’ in 2011 and 70% of people who usually vote Tory voted ‘no’. The Tories do not have to take on the nationalist socialist, Plaid or Labour, because there are sufficient non-socialist pro-unionist voters in Wales to win 30 or more seats. In a discussion with Richard Wyn Jones he asked me when would Labour collapse in Wales as they have in Scotland. I hadn’t thought of that possibility previously, but since then I see that there is a possibility. Carwyn Jones has indicated his desire for a fantasy federalism. His objective is a federal UK in which Wales is of equal status to England, despite England’s larger numbers and wealth creation. Not only is his form of federalism unachievable because the English (Labour) wouldn’t agree to it, but neither will Welsh Labour. The economy and well-being of Wales is dependent on a tax-funded subsidy from London. Without it Wales will sink into abject poverty. Carwyn Jones’ objective is as extreme and unachievable as Plaid’s dream of independence. Where are the missing 28%?
Devolution has a cylinder missing from its engine of support. Despite the claims by its supporters of the popularity of the Assembly the real polls tell a different story. Why, it is fair to ask, do 63% of the electorate turnout for the UK General Election and only 42% for the Assembly election. It would be crass and stupid to say its because the Assembly is more popular. On the evidence of the votes it is true to say that the UK Government has the greater support of the Welsh electorate. So, why did 28% stay away from Assembly referendum? And why did only 23% of the electorate vote for further power for the Assembly? These figures demonstrate the true level of support for devolution. There is a huge level of self-deception and wishful thinking on the part of the Assembly’s politicians. They would like to be popular and have majority support. After all being an AM is their job and a majority would provide the assurance they are liked and likely to stay in the job. As it is support is falling – 42% is less than 50.25% and 35% is worse and 23% close on disastrous. To counter this fall in popularity the politicians say trite things such as, “Wales has spoken” – with deafening silence by the 77% in the referendum that didn’t vote ‘yes’. Another stupid statement being “Wales has come of age” – I leave you to think who said that! Personally I wish he’d grow up. It must be awful traipsing into the Assembly chamber for a plenary session knowing that 77% of the electorate didn’t vote to grant law-making power and that 58% stayed away when AMs were elected. Perhaps the AMs have extended the concept of presumed consent on body harvesting to voting – if you didn’t vote, we presume you voted for us”! Please can we opt out – kindly send me the form!! The Assembly is a constitutional body and as such it has to be given respect, and so do the AMs. But equally they have to accept that not only is the Assembly a devolved body with restricted responsibilities, the AMs themselves are in a second tier government. The positioning and prancing of some of the AMs, especially of Plaid, in making claims that Wales has a separate Parliament is both tiresome and untrue. The Assembly has some power to pass some laws with regard to some issues and, in the final analysis, the Central Government can prevent the legislation and even suspend or dissolve the Assembly. The law-making power the Assembly has secured only a 23% support of the electorate. Modesty is appropriate in these circumstances. As to why people voted in the UK election but not in the Assembly elections, there are a number of possible factors. The overwhelming view by people of all politicians regardless of party is one of disenchantment. Whatever the MPs may have done, with 63% they are held in better esteem than AMs with a 42% participation. Wednesday 9th May 2012 Next Posting: Friday 11th May 2012 Referendum Assessment Part II
Daran Hill notes three significant changes since 1997: A fourth change is noted with regard to the swing from ‘no’ in 1997 to ‘yes’ in 2011 in North East Wales. It was greater in that region than elsewhere and the movement went against expectancy. However, the lowest turnout were in constituencies that had voted ‘no’ in 1997: Wrexham, 26.8%; Newport, 27.8%; Flintshire, 29.2%. In the context of an average all Wales turnout of 35.4% devolution has the support of disinterest. The result based on only a minority vote is a distortion of people’s opinion of devolution. A year earlier in the UK election 63% of the same all Wales electorate turnout to vote. Daran says he understands why Jones/Scully concluded that Yes for Wales and the political parties really didn’t change anything much during the campaign. Even so Daran refuses to believe Yes for Wales contributed nothing. I agree with him and I’m surprised Jones/Scully have made this comment. Wyn Jones proposed this to me in an interview before the book was written and I challenged him on it then. I put to Wyn Jones if there hadn’t been a referendum campaign would the turnout and result have been the same. He agreed that more people voted as a result of both the ‘yes’ and ‘no’ campaigns. Sir Emyr Jones Parry expresses the same view when he commented that if the ‘no’ campaign had been led by more recognisable leaders the result would have been closer. It is the failure of any elected representative to put the case against that was as influential to the result as any campaigning. Most people that True Wales spoke to on the streets were disinterested in the Assembly and had no intention of voting. Given an option more people selected to abolish the Assembly than any other choice. The referendum had the highest turnout in Carmarthenshire, 44%; Ceredigion, 43.8%, Gwynedd, 43.1% with 70.8% of voters in Carmarthenshire voting ‘yes’. The level of disinterest is reflected in these figures. Nowhere were there 50.25% cast and even the highest was hardly above the 42% cast in the May Assembly election. The only other constituency that exceeded 42% in the referendum was Anglesey at 43.5%. All the other 35 constituencies recorded a lower turnout. Daran’s comment that “people are now more comfortable with devolution and have warmed to it as a concept and a practice” and the Jones/Scully observation “Devolution increasingly looks like the settled will of the Welsh people.” when compared with the statistics are more of a wish fulfilment than fact. The graphic is from http://britainvotes.blogspot.co.uk/2011/03/geography-of-welsh-referendum.html together with an interesting article and comments. Assessment of 2011 Referendum*
* Replaces the advertised article “More facts, more denials” to be posted at a later date: Richard Wyn Jones and Roger Scully’s ‘Wales Says Yes’ has been commented on by Daran Hill, the un-remunerated Campaign Director of Yes for Wales. Daran says, “We won and won handsomely…” Yes, they did win but rather shoddily. It was on a very low turnout and completely one-sided. The question if not bizarre was peculiar and contrived. True Wales objected to the question when it was announced on the grounds it was difficult to understand. Daran comments, “The question itself was of course turgid and hard to understand.” The Electoral Commission (EC) in their field tests admitted that people needed two minutes to understand it. The Assembly initiated the referendum through the contrived All Wales Convention (AWC) that reported it was possible to win a ‘yes’ vote but the result couldn’t be guaranteed. The ‘yes’ vote gaining a majority of the votes cast was always probable because there had been a consistent lead in the opinion polls over many years. What was also the case the AWC expected a 35% turnout. True Wales also objected to the referendum as the expected turn-out was insufficient to change the constitution. The low turn-out was not the result of poor or insufficient campaigning. The AWC had arrived at 35% before any campaigning and in the event 35% of the electorate voted. True Wales’ decision not to take the EC funding did not have an adverse effect because the ‘yes’ campaign distributed 1.2 million leaflets, as did the EC, and the local BBC and ITV networks covered the campaign adequately. RW Jones and R Scully claim that only 10% of all electors actually remembered being contacted by either side of the campaign. This amnesia was not due to a safe, lacklustre and oomphless ‘yes’ campaign but a lack of interest on the part of the electorate. True Wales anticipated a 32% turnout.
Public opinion had changed significantly since 1997 but it was not ‘for’ the Assembly but one of considerable indifference. I have no problem with the Jones/ Scully opinion polls. They showed that the ‘yes’ vote would win. The True Wales street polls were different both in method and result. The four questions posed to ordinary people over a protracted period of time consistently produced the result that more people wanted to abolish the Assembly than any other category. They didn’t turn-out to vote for a ‘no’ campaign that wanted to maintain devolution. Friday 4th May 2012 “Wales Says Yes: Devolution and the 2011 Referendum” by Prof Richard Wyn Jones and Prof Roger Scully is published by the University of Wales Press Devolution, the denial of democracy
Wales has two languages, nationalist gobble-speak and common-sense. Gobble-speak isn’t Welsh. Gobble-speak uses both English and Welsh. Devolution lost it's innocence when by a margin of 0.25% of 1% the devolutionist declared, “We set out to win and we have won.” In that assertion they denied democracy. What they had won was the power to pursue an agenda not disclosed to the public. The infamous phrase, “Devolution isn’t a destination but a journey” reared its ugly head. The journey although not disclosed had been laid out. The original form of devolution was suddenly declared as inadequate and without the electorate being asked in 2003 proposals were made to alter devolution to a staged advance towards a legislative parliament. That was a denial of democracy. Worse was to come. In 2007 the GOWA 2006 was implemented and even before it had chance to operate the One Wales Government set about forcing the issue of a referendum to move to the fullest provisions of GOWA 2006. Devolution was riding rough shod-over democracy and in doing so denied it. The scandal of the 2011 referendum was that not one single elected representative stood up to speak for the brave 285,000 people who had the guts and gumption to vote ‘No’. The failure of the elected representatives was a denial of democracy. The Tories signally failed the electorate. Nick Bourne, now on the committee to decide if Wales should have tax-varying and borrowing powers, has much to think about by way of responsibility for the current malaise of the Welsh economy. His leadership was intended to ‘make devolution work’. The thing that devolution hasn’t done is work. The promises in 1997 of an improvement in the economy were not only unrealised but Wales has gone backwards to the point we are among the worst in the EU. His support for GOWA 2006 Part 4 is culpable because not only did he and the Tory AMs let down their constituents but they enabled a government that continues to demonstrate incompetence and failure. The failure of devolution hasn’t deterred the nationalist – Plaid or Labour – from wanting to further damage democracy. Although the original devolution arrangements were devised to ensure a fair representation of political opinion in the Assembly by the partial use of proportional representation, both Labour and Plaid want to change the method so that the representation will favour the parties dis-proportionally. Carwyn Jones described the current arrangement under GOWA 2006 Part 4 as “our fledgling democracy”. This phrase has also been taken up by some Plaid spokes-people. The ‘fledgling’ must refer to endangered because both parties want to end proportionality in the Assembly. Carwyn Jones whose party gained only 44% of the vote has 50% of the seats, complains that the present arrangement prevents him from have a majority. The news for Carwyn Jones is that when Labour wrote the original devolution settlement they intended the Assembly to be inclusive and not dominated by one party with a minority vote. The intention was to include AMs from other parties in the governing of Wales. This has happened twice under Rhodri Morgan, once with the Liberals and then with Plaid. The spirit of the intention is to include others and it is unacceptable that Labour has refused to contemplate working with the Tories. The Tories are currently the party with the second largest number of votes and AMs almost in direct portion to the vote. Everything about Carwyn Jones’ intentions and actions regarding devolution are proving to be a denial of democracy. Pathos and Powerless
A sobering and depressing statistic: Edinburgh airport handles 9.5m passengers and caters for 40 airlines, serving more than 100 destinations. Glasgow ( 6.9 million) is also significantly larger than Cardiff. Scotland with a population of 5 million has two major airports – not to mention Prestwick (1.3 million) and Aberdeen (3.1 million) – while Wales with 3 million people has Cardiff with a few scheduled destinations and 1.2 million passengers. It is a measure of the difference between the economies. There are similarities: Alex Salmond is willing to forgo the Barnett cash in exchange for the oil revenues. There is no such option for Carwyn Jones. Taking charge of the tolls of the Severn crossings isn’t going to amount to much when compared to Scotland’s oil revenues. Blaming the English for all of the economic woes of Scotland is a bit far-fetched because calculations by the SNP suggest that Scotland can do rather nicely with the oil. Wales could also do rather nicely if it had similar oil revenues. The basic problem is that Wales doesn’t have a robust varied economic model. A separately managed economy requires a range of wealth providers and these include financial services, a major provider of in-demand products and a strong service industry such as tourism. Since the take-over of tourism by the Welsh Government international visitor numbers have declined. The Ryder Cup gave Wales world exposure but the expected increase in visitor numbers has not materialised. The success of the Welsh Rugby in 2012 will probably have as little effect on people as tourists also who want cultural experience. Edinburgh is a hands-down winner over Hay. The solution by the devolutionists is to resort to ‘hireath’. The explanation of ministers to some new failure is ended with ‘the best for the people of Wales’. Being Welsh seems to be regarded as a cure all for all the economic problems of Wales. There are some unpalatable facts: The economic decline in Wales will force the educated young to look for employment elsewhere outside Wales – no work, no jobs. This will have the greatest effect in rural Wales. The young are mobile and may be able to find employment in the more prosperous areas of south east Wales but it doesn’t solve the problem of migration. Migration out of rural areas is matched with inward migration of retirees taking advantage of higher house prices in England and relatively lower prices in the rural areas. Emotional and aspirational objectives have no meaning without an effective means of achieving them. The legislation to promote the Welsh language has increased visibility and education but has failed to increase usage and stop migration out of the Welsh speaking communities. The decline in the economy is a far greater threat to the Welsh language than any cultural dominance of English. The nationalist identity, even if patriotic rather than nationalist, is of little value if it isn’t accompanied by the means to provide employment. To date devolution, in failing to improve the economy, has proven to be of little value to the people of Wales. |



