Last week I said that what the Tories lack in principle, they often make up for in pragmatism. A perfect example of that trait unfolded this evening. Vaughan Roderick gave us the first insight with this one-liner:
Mae Llywodraeth y Cynulliad wedi ennill ei brwydr ynghylch yr LCO Tai.
But Tom Bodden filled in the details in this post:
U-turn or S-bend?
... Last week, with a newly-installed Conservative-Lib Dem Government at Westminster, Welsh Minister David Jones, Clwyd West, announced he had reached an agreement with WAG to amend the [Housing] LCO, withdrawing the abolition [of the right to buy] power.
Plaid's deputy housing minister Jocelyn Davies admitted her 'disappointment and frustration' that further delay could scupper the order, preventing the rest of the powers passing along the M4. Baby out with bath water to continue the plumbing metaphor, so to speak.
Having reluctantly agreed to the amendments, she received a phone call from Mr Jones on Friday admitting that there was insufficient time to make the changes at Westminster and that the LCO should proceed intact.
It's all 'in pursuance of the spirit of mutual respect', an important aspect of the ConLib coalition relationship with Cardiff.
Tory leader in the Assembly Nick Bourne said: "Cheryl (Gillan Welsh secretary) has made the decision that's going through unamended because of procedural difficulties but quite rightly in pursuance of the respect agenda, Cheryl has said without hesitation it has got to go through without amendment."
Jocelyn Davies confessed yesterday that the motivation didn't concern her so much as the decision which would enable the Labour-Plaid government in Wales to deliver a pledge to act on housing.
But when you look at the facts in more detail, several things don't quite stack up. If Cheryl Gillan could say "without hesitation" that the draft Housing LCO had to go through without amendment, one can only wonder why the Tories did not let it go through as part of the wash-up just before the Westminster election ... or indeed why David Jones has just wasted the last few weeks proposing the amendments to it.
Mind you, the Tories have managed to get this sorted out after only a few weeks in power. If it hadn't been for Labour's internal differences, the Housing LCO could have been passed a couple of years ago.
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But there are no prizes for guessing what the method in this Tory madness is. If they can con us into believing that they will pass all LCO requests without the refusals and delays that characterized the approach of Labour MPs when they were in power at Westminster, they will then be able to argue that the LCO process is just fine as it is ... and that we don't need to get rid of it.
Leaving to one side the fact that the SWE still wants to perpetuate confusion about the difference between the Welsh Government and the Assembly, the essence of the story is that a spokesman for the First Minister was trying to warn parents off supporting Cardiff Council in their intention to seek a judicial review over his refusal to allow their plans for schools reorganization in Canton.
Well, those parents did give their support for a judicial review, and fair play to them for not being warned off. I think there are good grounds for it, as I detailed in this post.
But I thought this quote was so specious that it deserved to be highlighted:
A Welsh Assembly Government spokesperson said: "It is worth reminding this campaign that the First Minister sends his own children to a Welsh-medium school."
Crachach is a term that everybody in Wales instinctively understands, but is hard to define. My definition is that they are those who speak Welsh, make sure their own children are educated in Welsh ... but want to make it difficult for others to join their exclusive circle.
Alun Ffred Jones does not come across as an inspiring or indeed convincing speaker in committee. When he appeared before Legislation Committee No.2 last week he appeared to be on the defensive. But I'm not going to criticise him for that. What matters is how well he does his job, and the Welsh Language Measure is probably the biggest job on his desk. The law we get is more important than how well he can explain it.
A couple of weeks ago I wrote this post about the official status of the Welsh Language, and had a stimulating exchange of ideas with Emyr Lewis in the comments that followed. We were both left with unanswered questions. He wasn't able to figure out why the Government had not included a clear statement about the official status of Welsh in the draft Measure, and I was second-guessing what the reasons for that might be. But last week Alun Ffred was put on the spot about it, and what he said gave us some answers to those questions:
Whether we agree with him or not, he believes that the Welsh language already has official status (as defined in a number of previous Acts which the Measure specifically names) and that this Measure is intended to confirm and extend that official status. Even though it was delivered almost as a throw away line, he said something that summed up that position perfectly:
Proses yw statws, nid digwyddiad ... Status is a process, not an event
I have to admit that I can see the logic of that position. If we baldly declare that the language has "official status" it begs the question what the implications of that statement might be. Legislation needs to be precise and unambiguous rather than open-ended. We also need to remind ourselves of the exact wording of the One Wales Agreement with regard to the WLM, because it is unrealistic to expect this Measure to go further than that commitment.
• We will be seeking enhanced legislative competence on the Welsh Language. Jointly we will work to extend the scope of the Welsh Language Legislative Competence Order included in the Assembly government’s first year legislative programme, with a view to a new Assembly Measure to confirm official status for both Welsh and English, linguistic rights in the provision of services and the establishment of the post of Language Commissioner.
The wording would seem to imply that official status is something that already exists, and therefore needs to be confirmed rather than established. But the problem is—as Mike German highlighted—that if you look at the Acts which define the "existing provision about the official status of the Welsh language in Wales" they make no explicit reference to Welsh having any "official status" at all.
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So the nub of the question is this: is it true that the Welsh language has official status in Wales, even though it doesn't say that explicitly in any Act of Parliament?
The Welsh Government clearly believes it is. Nerys Arch, a senior lawyer with the Welsh Government, was sitting next to him as he said it, so we are getting much more than one individual politician's interpretation. Yet many others, no doubt backed up by their own expertise or advice, believe that it doesn't ... or at least that it doesn't say it clearly enough. However I don't think that it is necessary to argue about whether it does or doesn't. I would simply say that if Welsh does already have official status, then it cannot damage the proposed WLM in any way to say so explicitly.
At present, the proposed WLM says this:
PART 1
OFFICIAL STATUS OF THE WELSH LANGUAGE
1. Official status of the Welsh language
(1) The existing provision about the official status of the Welsh language in Wales includes—
(a) in the Government of Wales Act 2006, sections 35(1), 78(1) and (2)
and 156(1), and paragraph 8(3) of Schedule 2;
(b) in the Welsh Language Act 1993, Part 2, and sections 22, 24, 25, 26
and 27(1) 30 and (2).
(2) This Measure makes further provision about the official status of the Welsh language in Wales, including—
(a) provision establishing a Welsh Language Commissioner (see Part 2);
(b) provision giving the Commissioner functions relating to the Welsh
language, including functions of—
(i) promoting and facilitating the use of the Welsh language and
promoting equality between the Welsh and English languages
(see 20 Part 2), and
(ii) investigating interference with the freedom to use the Welsh
language (see Part 6); and
(c) provision for setting, and requiring compliance with, standards of conduct
in relation to the Welsh language (see Parts 4 and 5).
(3) This Measure does not affect the status of the English language in Wales.
As we can see, the wording is clearly built on the understanding that Welsh already has official status. I do not what to challenge that. Instead I want the Measure to make explicit what is already implicit in the reasoning behind the form of words it uses. On that basis, I propose that it should be amended to read:
PART 1
OFFICIAL STATUS OF THE WELSH LANGUAGE
1. Official status of the Welsh language
(1) The Welsh language and the English language each have official status in Wales.
(2) The existing provision about the official status of the Welsh language in Wales includes—
(a) in the Government of Wales Act 2006, sections 35(1), 78(1) and (2)
and 156(1), and paragraph 8(3) of Schedule 2;
(b) in the Welsh Language Act 1993, Part 2, and sections 22, 24, 25, 26
and 27(1) 30 and (2).
(3) This Measure makes further provision about the official status of the Welsh language in Wales, including—
(a) provision establishing a Welsh Language Commissioner (see Part 2);
(b) provision giving the Commissioner functions relating to the Welsh
language, including functions of—
(i) promoting and facilitating the use of the Welsh language and
promoting equality between the Welsh and English languages
(see 20 Part 2), and
(ii) investigating interference with the freedom to use the Welsh
language (see Part 6); and
(c) provision for setting, and requiring compliance with, standards of conduct
in relation to the Welsh language (see Parts 4 and 5).
(4) This Measure does not affect the status of the English language in Wales.
I would dearly like to go further and adopt the form of words suggested by Emyr Lewis, as quoted in the meeting, namely "Welsh and English are the official languages of Wales and have equality of status."
However, I don't think we can go that far for two reasons: first because the Assembly has only been given limited legislative competence in this area, and second because the One Wales Government has only committed itself to "confirm official status for both Welsh and English". Make no mistake, I think equality of status for both languages is what we should aim for, but until the Assembly has the power to legislate for more than the public sector and some essential services in the private sector we cannot do it. Desirable as it would be, this needs to be left until we do have the power to do it.
I had thought (and in a previous draft of this post was going to say) that the first clause should simply say, "The Welsh language has official status in Wales" without any reference to English, because the Assembly has no competence to legislate on the English language. But what Mike German said has made me rethink, although with a lateral shift that he probably hadn't intended. As others besides myself have said, there is no legislation that states that the English language has any "official status" anywhere in the UK. However, if it is true that Welsh already has official status even though those precise words are not in any legislation, then it must also be true that English has official status as well. So there can be no objection to saying that in the first clause. The final clause (3 in the original, 4 in my proposal) makes it clear that the Measure does not affect the status of the English language in Wales. The new first clause is merely a clarification of what is already the case.
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So I would like to ask people whether they think that the new first clause I've proposed would be sufficient to satisfy their concerns, and an adequate way of delivering the commitment in the One Wales Agreement. I'm only talking about the status of the language ... the issue of language rights and the Commissioner also deserve attention, but let's take them one at a time.
The Conservatives have recently announced their plans to reduce the total number of MPs at Westminster by 10% to 585, but with equal constituency sizes in Wales, which would mean a reduction from the current 40 MPs to 29. They also announced that electorates should vary by no more that +/-3.5% and that boundaries should not have to rigidly follow county boundaries or take geographical size into account. So how might this look in Wales?
Surprisingly, I found it very easy to carve up Wales into equal sized constituencies, which seem to be both natural and logical. I did this using a spreadsheet containing all of Wales’s electoral wards and the Ordnance Survey’s excellent election map system. Then I just started at the 4 corners of Wales and worked in, taking local authority boundaries into consideration wherever practical, but largely ignoring the existing constituencies. My calculations are based on the 2005 electorates, but this could be replicated with more current data, and on this basis Wales’s electoral quota for 29 seats would be 76,745 with a permitted variation of +/- 2,700.
For example, in the South West I started in Pembrokeshire. The County has an electorate of 89,829 so it would be necessary to remove around 13,000 voters to achieve the electoral quota. This could be done by transferring the Tenby area into Carmarthenshire, but it makes more sense both geographically and linguistically to transfer the Preseli area into Ceredigion. This would then create a new seat – I have called Penfro, but this is just a working name and can be changed – with an electorate of 76,067 or 99.1% of the electoral quota.
The Preseli area with an electorate of 13,762 would then be added to Ceredigion which has an electorate of 52,514, and this would give a combined electorate of 66,276. This is still too small at only 86% of the quota, so it would be necessary to find another 10,000 voters from somewhere. I considered extending the seat north to Machynlleth, or east into Powys, but it seemed more logical to take in some of the electoral wards in north-west Carmarthenshire, along the Teifi valley. This then created a new seat – which I have called Teifi - with an electorate of 75,856 or 98.8%.
Carmarthenshire, excluding the Teifi valley wards and the existing Llanelli constituency is getting close to the electoral quota, and by adding some wards in the Burry Port area, a new constituency – Myrddin – is created with an electorate of 100.4% of the quota.
The remaining electorate in Llanelli is only 47,000 which means that it needs to add 30,000 voters from West Glamorgan, and here I propose a new seat of Lwchwr which crosses the boundaries of the preserved counties.
I continued a similar process working in from all 4 corners of Wales, and considering a number of alternative solutions, and arrived at the following proposal.
South West Wales
Penfro
Pembrokeshire, exc Preseli
99%
Teifi
Ceredigion, Preseli & Teifi Valley
99%
Myrddin
Carmarthenshire E & W, exc Teifi Valley
100%
Lwchwr
Llanelli & North Gower
97%
Swansea Gower
Swansea West & South Gower
97%
Swansea Tawe
Swansea East & City Centre
99%
Neath
Neath, Aberafan & SW Powys
97%
Margam
Port Talbot, Porthcawl & Llynfi Valley
99%
South Central Wales
Cardiff East
Cardiff South & Cathays
103%
Cardiff North
Cardiff North & Gabalfa
102%
Cardiff West
Cardiff West & Grangetown
103%
Bro Morgannwg
Vale of Glamorgan, inc Penarth exc Cowbridge
103%
Ogwr
Bridgend Town, Ogmore Valley & Cowbridge
102%
Rhondda Elai
Rhondda & Ely Valley
101%
Cynon Taf
Cynon Valley & Pontypridd Town
98%
South East Wales
Usk
Monmouthshire County & Blaenafon
102%
Newport
Newport County
103%
Cwmbran
Torfaen & North Newport
100%
East Gwent
Blaenau Gwent & East Islwyn
101%
Caerfilli
Caerphilly & West Islwyn
99%
Rhymney
Merthyr, Rhymney & NW Islwyn
98%
South Powys
Brecon, Radnor & S Montgomeryshire, exc SW Powys
99%
North Wales
Gwynedd
Merionydd & Caernarfon
99%
Menai
Ynys Mon, Bangor & Nant Conwy
101%
Conwy
Conwy County
99%
Rhuddlan
Denbighshire Coast & North Flintshire
97%
Flintshire
Flintshire, exc North Flintshire
100%
Wrecsam
Wrexham County
99%
North Powys
North Montgomery & South Denbighshire
99%
This can still be optimised further, but it took me only a few hours to arrive at this solution – so why does the electoral boundary commission take so long?
This solution could also be used for creating 58 dual STV seats for Assembly elections, although I still prefer a solution that is independent of Westminster, with variable sized multi-member seats based on local Authorities.
On 21 June, I wrote this paragraph in a post entitled The Beginning of a Regional Tax Policy?
Yet it is undoubtedly a good decision, because the UK has a much greater inequality of wealth between its richest and poorest parts than any other EU member, as we can see on this map. As I have said on many occasions, this is a structural problem with the UK economy (indeed the UK as a whole, for over-centralization of the economy goes hand-in-hand with political over-centralization) and therefore needs to be addressed in more radical ways than have been attempted up to now. This will be the first time—so far as I'm aware—that different tax rules will apply to different regions of the UK. It will be a ground-breaking departure from previous policy.
On 23 June, Russell Lawson of the Federation of Small Businesses wrote this on a post on Wales Home:
Certainly the mechanism of applying the NI holiday to only some of the nations and regions of the UK is a significant policy. On the one hand the UK has a much greater inequality of wealth between its richest and poorest parts than any other EU member which this is a structural problem with the UK economy and therefore needs to be addressed in more radical ways than have been attempted up to now. This will be the first time that different tax rules will apply to different regions of the UK, and is therefore a ground-breaking departure from previous policy.
His next paragraph was this:
On the other hand, however, businesspeople in one of those regions in the south east corner of England might well be pretty angry that the new party in power had gone back on its election promise ("any new business will pay no Employers National Insurance on the first ten employees it hires during its first year," Conservative Party manifesto).
My preceding paragraph had been:
If I were a Tory businessman in one of those regions in the south east corner of England, I might well be pretty angry that my party had not only gone back on its promise, but done so in a selective, arbitrary way.
And before that I had quoted the relevant line from the Tory manifesto.
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I learned some years ago not to be upset when someone takes your ideas and presents them as their own. Though when that happens I normally expect the idea to be presented back to me in slightly different words. On the contrary, I welcome it as a sign that the person not only agrees, but has taken the idea on board for themselves.
The reason I blog is to try and give others good ideas. So I'm delighted that Russell agrees with me on this matter. I wonder if he agrees with me on other things? Perhaps we should exchange a few emails.
I suppose I can hardly escape making some comment about yesterday's budget, but the comment is a simple one: that we got what we expected.
I can't believe that anyone, other than those who were persuaded to vote Tory because of it, believed the Tories when they said they had no intention of raising VAT. People who would have voted Tory anyway knew they would, as did those that would never vote Tory. But VAT isn't the big issue.
Nobody doubts that we are in a financial hole. The Tory and LibDem mantra is that it is a hole of Labour's making, but that's just a soundbite. I think it's a hole that Labour could have done more to help us avoid—by less reckless spending and by better management of the economy and regulation of the banks—but the main reason for the mess is that the Western World had a banking crisis which involved governments having to bail out the banks to stop them collapsing, and then pump cheap money into them to persuade them to start trading again, most of which they pocketed. Nobody can blame Labour for all of that ... not least because the other parties would have done pretty much the same.
No, the bigger picture is that we are in a hole and that we have to pay to get out of it. The choice is how we get out of it. The Tories went into the election on the platform of doing it by drastically cutting public services (whatever euphemisms they use to disguise it) rather than raising taxes. That is what they duly delivered in yesterday's budget: the ratio is about 80% cuts in services to 20% increases in taxes. In my opinion that is precisely the wrong way round. Yes, there are cuts that can be made, but we should have looked to increase taxes as the main way out.
Which taxes? For me, the answer should be to increase direct taxes, because these are directly linked to the ability to pay. That means income tax and employees' national insurance. It means that those who are still in work pay, but those that are thrown out of work by the recession (whether first or second dip) do not. The diagram below, from the Budget Statement (download it from here) shows just how large a proportion of government income comes from these two sources.
So a modest increase in income tax (employees' NI is in effect income tax by another name, but it does not cover those whose income is unearned, which is why it is better to increase income tax) would be the most effective way to pay for getting us out of the mess. Income tax is now ludicrously low. When the Tories last came to power in 1979 the basic rate was 33% ... since then it has been reduced all the way down to 20%. But it seems that no government, either Labour or Tory, will contemplate increasing it again. Gordon Brown even took away the 10p starter rate simply in order to reduce the basic rate by 2p, announcing it as if he had pulled a rabbit out of a hat and expecting praise for it. When he realized that he had made the poor poorer, he corrected it by giving not only the working poor, but everyone else who paid income tax as well, a further tax break ... which was paid for out of borrowing. Borrowing money to give people tax breaks is obscene.
It should be pretty obvious that because the level of borrowing is such a problem, the only sane thing to do is put the basic rate up again. But of course the Tories won't do that on principle, and the LibDems wanted to go even further and give every basic rate taxpayer a bonus by increasing the threshold to £10,000. At least the LibDems proposal would have benefited more people on low wages by taking them out of tax, but to my mind that would only be fair if the basic rate of tax went up so that the net take was not reduced.
I can only conclude that increasing the basic rate of income tax has been taken off the political agenda by a right-wing press (and a few pressure groups) who have managed to convince the electorate that everything can be paid for if we attack "waste" and "bureaucracy" and "benefits scroungers" instead. It worked. Neither Labour nor the LibDems dared propose it because it would be a vote loser. We have ended up with what middle England voted for.
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So is that unfair to Wales? Make up your own minds. In the end it boils down to what sort of society we want to live in. We can have a low tax, low public services society or a society in which we pay for the public services we value.
But first we must value our public services. I'm certainly not saying that we should pay for all the things we pay for now, but I am saying we should decide what public services we want, and be prepared to pay for them and hold those we elect directly accountable for them. Public services should be public, rather than farmed out to the private sector or to quangos or "arms length" bodies.
To caricature, I would much rather we had what people usually think of as a Scandinavian model in which we pay higher taxes for the things which we as a society value as public services, than the more Anglo-Saxon model of as little as possible being public and as much as possible being private because private is somehow intrinsically better.
How do we get there? For me and every Plaid Cymru supporter the answer is obvious. But for a large number of those who regard themselves as Welsh Labour and who are troubled by what the Labour Party had to do to make itself electable in England (and will have to do again to have any hope of getting elected next time) the answer will require rather more soul searching. For if you believe that Wales does, or at least should, have different and better values ... if you fear that those values will be trampled down by what this budget will inevitably produce ... then start now to press for more fiscal responsibility for Wales. We need to be in control of the levers of our economy, to decide for ourselves how we tax ourselves to pay for what we believe we need, and how we become prosperous enough to pay for it.
This budget was never primarily about reducing the deficit ... it was about reducing public services. It about reducing the size of the state. I agree with that, because most of our public services are better provided at a more local level, and are that much more accountable because of it. So yes, I'm completely in favour of reducing the size of the state ...
A couple of weeks ago, the Electoral Reform Society Wales published a research paper on the implications of the Tory plan to reduce the number of Westminster constituencies to about 500 and make their size more equal, as well as how this would affect Assembly elections.
If the paper received much publicity at the time I have to admit that I missed it, and I'd hazard a guess that others did too. So here it is, in Welsh and English:
Executive Summary
The paper analyses the effect that the Conservative-Liberal Democrat coalition's proposals to cut the number of MPs in Westminster would have in Wales, and in particular on the National Assembly.
However, with the prospect of increased devolution coupled with the over-representation of Wales in Westminster, the issues raised in the paper will remain relevant in Wales over the coming years. Electoral Reform Society Wales believes that an informed discussion of the options available in the event of such changes is vital for the future health of Welsh democracy at all governmental levels, be they at the Westminster, devolved, or local level.
We hope that this paper will be a contribution to an informed discussion of these issues.
I haven't read it yet, but I'd invite others to start a discussion about what's in it which I'll join when I have.
However I did notice that their preferred option for the Assembly is that it should be elected by STV in multimember constituencies of varying size, based on Local Authority boundaries. This bears an uncanny resemblance to what Penddu proposed in this post last November.
I've just read this post on Dylan Jones-Evans' blog in which he raises the possibility of a regional tax policy.
One of the promises in the Tories' manifesto was:
... for the first two years of a Conservative government any new business will pay no Employers National Insurance on the first ten employees it hires during its first year.
However yesterday's Observer reported that this would now not be applied to London, south east England or eastern England. Putting this alongside the tantalizing prospect of Northern Ireland getting a different rate of Corporation Tax on p84 of the same manifesto:
We will produce a government paper examining the mechanism for changing the corporation tax rate in Northern Ireland, in order to attract significant new investment.
... it is little wonder that DJE senses that we might be on the verge of something that could have very far-reaching consequences for decentralizing the UK economy.
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My first comment is that the Tories are probably not as well-organized as that. Certainly the mechanism of applying the NI holiday to only some of the nations and regions of the UK had not been thought about a couple of months ago, and this suggests that the Tories are doing nothing more than making it up as they go along. If I were a Tory businessman in one of those regions in the south east corner of England, I might well be pretty angry that my party had not only gone back on its promise, but done so in a selective, arbitrary way.
Yet it is undoubtedly a good decision, because the UK has a much greater inequality of wealth between its richest and poorest parts than any other EU member, as we can see on this map. As I have said on many occasions, this is a structural problem with the UK economy (indeed the UK as a whole, for over-centralization of the economy goes hand-in-hand with political over-centralization) and therefore needs to be addressed in more radical ways than have been attempted up to now. This will be the first time—so far as I'm aware—that different tax rules will apply to different regions of the UK. It will be a ground-breaking departure from previous policy.
Now I suspect the decision has much more to do with saving a bit of money than being done out of principle (for if it were a matter of principle, it would surely have been in their manifesto) but what the Tories lack in principle, they often make up for in pragmatism. I think the Tories might well find themselves amazed by how well such simple tools can work, and start looking at using them on a wider basis.
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Turning to Corporation Tax, it isn't really clear what the Tories have in mind for Northern Ireland. There have been calls for NI to have a lower rate for years, closer to the Republic's 12.5%. The wording of the manifesto seems to suggest that they would like NI to have a lower rate if only they can find a mechanism by which to do it.
If so, that is a very welcome move away from what happened under Labour, who refused to contemplate it on the grounds that:
From a UK-wide perspective, the overall case against a reduction in the corporation tax rate in Northern Ireland is more marked. The likely displacement of both capital and profits from the rest of the UK, and the fact that this would be subject to a lower rate of corporation tax, mean that a reduced rate of corporation tax for Northern Ireland would certainly come at a long-term cost in reduced resources to be shared by the UK regions or in the financing of public services.
For those of us who are concerned about the negative effects of over-centralization, the "displacement of both capital and profits from the rest of the UK" is precisely what is so urgently needed. So the Tories' position on this is welcome ... but if the Tories now consider it appropriate for NI, why should it not be considered equally appropriate for Wales and Scotland?
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The two decisions are linked in this way: both appear to be examples of Tory pragmatism without principle. It isn't right to treat Northern Ireland as a one-off special case for Corporation Tax purposes, nor is it right to treat the three south eastern regions of England as a special case over National Insurance. Instead, what is needed is an over-arching framework within which such variations can operate.
And this is where the Tories get it all wrong. They are seeking to make these decisions centrally and impose them on the nations and regions concerned. They might be good decisions, but that's not the point. The point is that variations in tax rates need to be decided by the nations and regions concerned, not imposed by central government at Westminster.
The point is that Northern Ireland shouldn't have to go to Westminster and ask them to set a lower rate of Corporation Tax, but for the Northern Ireland Assembly to be given the power to decide the rate for itself ... and vary it from year to year as it sees fit. But the necessary corollary is that Northern Ireland must bear the fiscal responsibility of getting more or less money as a result of their decision. If this doesn't happen, simply giving them a reduced rate of CT will be an unfair subsidy ... and therefore against EU rules. The Varney Report identified these three criteria (p43) for regional tax variation as a result of the Azores judgement:
• the region must have the political and administrative authority to introduce its own tax rate;
• the national government must have no authority to influence such a decision; and
• the region must bear the full fiscal consequences of introducing its own tax rate and in particular must not be compensated by the national authorities for a loss of tax revenue.
But it is wider than that. The whole point of reducing CT in NI would be to make NI a more attractive place to do business; employing more people who would pay tax and taking people out of unemployment. Therefore if CT were reduced, some mechanism would need to be set up to reflect any increased tax take and reduced benefits spending.
In short, managing the economy is rather like flying a plane. The pilot has all sorts of levers on the control panel, but if one is adjusted it almost certainly means that others have to be adjusted to keep the plane in the air. Devolving control of one lever without allowing the devolved administrations any control over the other levers is worse than useless.
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So yes, like Dylan Jones-Evans I too am excited by the possibility that a UK government might finally allow some regional variation of taxation. But the implications are much wider than they appear at first sight. The fundamental principle is that such decisions cannot be imposed by Westminster on the nations and regions of the UK, even if we happen to agree with them. These decisions can only be made by the nations and regions themselves. It is the power to make these decisions for ourselves—and of course accept the consequences of them—that needs to be devolved.
I've been following the reaction to the Belgian election last Sunday, and been particularly disappointed by some of the presumptions made about the Nieuw-Vlaamse Alliantie (New Flemish Alliance) in the UK media.
The general it seems that nationalism and the desire for a Flemish State are seen as racist and exclusive, and very few commentators here have been able to distinguish between the inclusive, civic nationalism of the N-VA and the exclusive, sometimes racist, nationalism of Vlaams Belang, whose share of the vote fell dramatically. They have linked the N-VA's success in Belgium with the rise (though only to 15% and third place, with the other parties refusing to work with them) of Geert Wilder's vehemently anti-Islamic Partij voor de Vrijheid in the Netherlands.
As a short illustration of how wrong that perception is, this is a short feature from the N-VA website:
Met de 28-jarige Nadia Sminate uit Londerzeel en de “Limburgse” Antwerpse Zuhal Demir (30) stuurt de N-VA voor het eerst in haar bestaan twee jonge leeuwen van allochtone origine naar de Kamer. Zuhal en Nadia zijn respectievelijk van Turks-Koerdische en Marokkaanse afkomst. Ze vinden in de N-VA een partij die gaat voor echte ipv bepamperende integratie en voor een streng maar rechtvaardig migratiebeleid. Zuhal wil zich als advocate in het parlement toeleggen op arbeidsmarktbeleid, net zoals Nadia die zich zal concentreren op de optimalisatie van de combinatie arbeid en gezin.
With the 28-year-old Nadia Sminate from Londerzeel and the "Limburg" Antwerper Zuhal Demir (30) the N-VA has for the first time sent two young lions of immigrant origin to the Chamber. Zuhal and Nadia are, respectively, of Turkish-Kurdish and Moroccan origin. In the N-VA they find a party that wants real integration instead of patronizing, and a firm but fair immigration policy. As a lawyer, Zuhal wants to focus on Labour Market Policies, while Nadia will concentrate on optimizing the balance between work and family life.
I've relied heavily on Google for the translation, and would welcome any improvements. Perhaps I should also explain that one layer of the reference to "lions" is that the flag of Flanders is a black lion on a yellow background.
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As I said when the results came in, it will take some time for the shape of the new Belgian government to become clear. N-VA leader Bart De Wever has been appointed as the informateur charged with negotiating a working coalition. If it can command a two-thirds majority, it will be able to break the constitutional impasse that led to the dissolution of the previous parliament. The consensus view seems to be that Francophone socialist leader Elio Di Rupo will become Prime Minister, with Bart De Wever content to let that happen in return for constitutional reform.
There was a short radio debate about next year's referendum on primary lawmaking powers on Wednesday's Good Morning Wales between David Llywelyn Davies of Cymru Yfory and Rachel Banner of True Wales. Because it won't be on iPlayer for long, I've put it here:
It was mentioned on the Cymru Yfory blog here, and picked up on Welsh Ramblings here.
With a hat-tip to Bronglais, I've just learned that Wales' very own Centre for Alternative Technology at Machynlleth has published a report called Zero Carbon Britain 2030. Download it by clicking the image:
This is a summary of what it's about:
A great many solutions to climate security are the same as solutions to energy security and to long-term economic recovery. A flagship of a new economic approach, ZCB2030 will show how we can re-focus the ingenuity of the finance sector on the actual challenges at hand. Rather than residing precariously at the end of the peaking pipeline of polluting fossil fuel imports, Britain can head an indigenous renewable energy supply chain powering a lean, re-localised economy. Every field, forest, island, river, coastline, barn or building holds the potential to become an energy and revenue generator, with different technologies appropriate to every scale or location.
Zero Carbon Britain 2030 clearly illustrates how the parallel de-carbonisation and re-vitalisation of the UK economy would work, creating a single document of immediate relevance to policy-makers everywhere.
This report follows hard on the heels of the report by the Offshore Valuation Group that I mentioned in the second part of this post. The major conclusion reached by each report is the same: that we simply don't need nuclear energy. The difference is the OVS report concludes that we can generate all the electricity Britain needs from offshore renewables by 2032, whereas this report says that we can produce the overall energy we need by 2030, including onshore renewables and biomass and with a programme of energy saving measures in buildings, transport and behavioural change. This diagram shows how:
For me, the most useful chapter was the one on Renewables, which says:
This chapter demonstrates how Britain can create a carbon-free, electricity-based energy system by 2030, using renewable energy and biomass alone, and without recourse to nuclear power.
As full report is 384 pages long, it might be best to start with the executive summary at the beginning and that chapter. But this is the full list:
• Climate science
• The energy security context
• Equity
• Climate and the built environment
• Transport
• Motivation and behavioural change
• Land use and agriculture
• Renewables
• Distributed generation and microgrids
• Policy and economics
• Employment
• Residual emissions
All in all it's a good handbook of information to download and use for reference. If Wales is to avoid being landed with a nuclear power station that we don't want, we need all the authoritative information we can get on better alternatives to it.
I was delighted to see this news in today's Independent:
Iceland rewrites law to create haven for investigative reporting
Iceland has passed a sweeping reform of its media laws that supporters say will make the country an international haven for investigative journalism.
The new package of legislation was passed unanimously at 4am yesterday in one of the final sessions of the Icelandic parliament, the Althingi, before its summer break.
Created with the involvement of the whistleblowing website Wikileaks, it increases protection for anonymous sources, creates new protections from so-called "libel tourism" and makes it much harder to censor stories before they are published.
"It will be the strongest law of its kind anywhere," said Birgitta Jonsdottir, MP for The Movement party and member of the Icelandic Modern Media Initiative, which first made the proposals. "We're taking the best laws from around the world and putting them into one comprehensive package that will deal with the fact that information doesn't have borders any more."
I guess that passing the law at 4am is partly to do with the fact that it doesn't get dark in Iceland at this time of year, but it is mainly a reflection of how quick on its feet a small, independent country can be. This proposal only really came onto the political agenda in Iceland in February this year. This video is from then:
I think it is a source of great shame that the libel laws in "England and Wales" can be used with draconian effect by those with enough money to make the law work disproportionately for their benefit. What Iceland has done shows how small countries can have an impact on the world stage out of all proportion to their size. And I would like to think that this is exactly the sort of thing that we in Wales would do if we were independent.
We can only guess at what possessed Lynne Neagle to indulge herself in glowing praise like this, but an over-inflated sense of self-importance would appear to be what attracted the happy couple to each other.
Perhaps it is a mental health problem. If so, it is extraordinarily serious and obviously contagious.
Cheryl Gillan has fallen into the trap that was set for her. She has today refused the First Minister's request to lay a draft Referendum Order before Parliament. This means that a fresh request will have to be made.
This is an extract from her statement:
Decision on draft referendum Order
On 17 February 2010 the First Minister wrote to the previous Secretary of State for Wales to notify him of the National Assembly for Wales’s resolution made on 9 February, calling for a referendum on further law-making powers for the Assembly. This triggered a statutory requirement for the Secretary of State to either lay a draft Order in Council under section 103(1) of the Government of Wales Act (draft referendum Order) before Parliament, or refuse to do so and give reasons for the refusal, within the period of 120 days ending on 17 June 2010.
The principal reason I am unable to lay the draft Order within the period ending on 17 June 2010 is that due to circumstances I inherited from the previous administration, I have not been able to fulfil my duty set out in section 104(4) of the Political Parties, Elections and Referendums Act 2000 to consult the Electoral Commission on the wording of the referendum question, and as a result the Electoral Commission has not yet tested and reported on the intelligibility of the question. Your decision that the date and question should not be considered until after the General Election has meant that we have not yet submitted a question to the Electoral Commission, which has confirmed that it will need at least 10 weeks to carry out its assessment and then report. This inevitably leads to a position where we cannot lay the referendum Order by the 17 June 2010.
It's worth commenting on her rather strange reference to "your decision". This is a letter to the First Minister, and the decision not to do anything was made not by Carwyn Jones, but by Peter Hain. So Ms Gillan is wrong ... but not so very wrong, for it was Labour's decision.
In my opinion, she could have laid the draft Referendum Order now, with dates for the poll and referendum period and with her best attempt at a question. Doing it that way would have been bending the rules a little (because she would have had to withdraw it and lay a new order later ... which is what happens with LCOs) but would have prevented others from saying that she refused the request. I'd be willing to bet that Labour will now shout this accusation very loudly, and I would urge Plaid Cymru's politicians not to get caught up in it. I'll repeat that:
Please don't do it. Don't get caught up in Labour's silly little games.
There's one simple reason for this: in practical terms it doesn't make any real difference. As we're not going to have the referendum until March, there is enough time to start the whole process over again.
So what happens next? The First Minister will have to write to the Secretary of State with a fresh request for a referendum. It's questionable whether the previous unanimous vote on 9 February will have to be repeated or not. I would say it probably doesn't need to be repeated ... but if the lawyers say it does, it's only an inconvenience.
Much more interesting will be what the First Minister says in his new request. First time round he believed that he should only request a referendum without specifying the date or the wording of the question ... leaving it entirely up to the Secretary of State to decide these things. But since then he has changed his mind and suggested both a date and a form of words. I'm quite sure he will say that this has absolutely nothing to do with the fact that Peter Hain is no longer Secretary of State. As if.
But what will he do this time round? My guess is that he will write two letters. The first will be a "formal" request in the same form as the previous request, but he will include his suggestions for the date and wording in a covering letter. But whatever he suggests, he is either going to have to leave it up to Ms Gillan to decide both ... or admit that he got it wrong first time round. Pride will get the better of him.
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So the big question is what Cheryl Gillan will decide. She rightly said that Peter Hain did nothing with respect to the previous request, but does she really expect to get away with not telling us how far she has now got with it? Simply deciding to refuse to lay the Referendum Order is not very far to have come if this was indeed her "main priority" since she took up the job.
Sooner or later she is going to have to make a decision ... though she'll probably say she won't do anything until she gets the new request. However she must then act fairly quickly to put a draft question to the Electoral Commission and allow them their ten weeks to test it, for that will take 70 out of the 120 days she will have before she lays the draft RO. I trust that she will make this a transparent process, but it is probably within her power to insist that it is all done in private.
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As for the date, this is the crucial part of the letter:
Both you and I and the Deputy First Minister have discussed a possible timetable for the referendum, taking account of all the stages that need to be gone through to prepare for it. In the light of our discussion, we have agreed that we should aim for a referendum to be held before the end of the first quarter of 2011.
This answers one crucial question. It means that the referendum will not be held on the same day as the Assembly election. As I have said here, I strongly advocate holding the referendum on 31 March 2011 because it will be the first light Thursday after the clocks go forward, and this will increase turnout. We can also put the Assembly election back by four weeks to 2 June 2011 to allow a decent interval between the two polls.
Some people are convinced that Belgium was only ever a hoax perpetrated by the "Liberati" as part of their plan for world domination ... and that any protest to the contrary was an obvious over-reaction which proved their point:
But for those of us that want to see the stateless nations of Europe take our place on the world stage on the same basis as the other countries of the world, Belgium—just like the UK—is a state that does exist, but shouldn't continue to.
Belgium has become increasingly dysfunctional for years, with the people of Flanders increasingly seeing themselves as a nation in their own right, but with Wallonia anxious to maintain the status quo. Last month the fragile federal government broke down again and a snap election was called for today to break the impasse. The results are just coming in [this seems to be a good source] and they show a quite remarkable result for the N-VA, who are Plaid Cymru's partners in the EFA group in the European Parliament. They are currently standing at 28.4% in Flanders and 20.6% in Belgium as a whole. This makes them comfortably the largest party, and this is all the more amazing because they were founded less than ten years ago and were nowhere in the last Belgian election. It looks like Flander's time has come.
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Jill Evans posted details of a press conference they gave last week in response to their rapid rise in the polls, which is worth reading to find out more about them. Like Plaid Cymru and the SNP the N-VA are inclusive, civic nationalists fundamentally opposed to the far right, exclusive nationalism of Vlaams-Belang (who I'm pleased to say did not do well, which was quite a relief following the increased support for the equivalent party in the Netherlands in last week's Dutch election). But unlike Plaid, they are a party of the centre-right rather than the left ... though it should be said that politics in Flanders is generally right-leaning while that of Wallonia generally leans to the left. The biggest party there is the Parti Socialiste, with 35.0% support in Wallonia and 10.3% in Belgium as a whole.
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It will take a while—maybe a long while—for things to become clear as the parties negotiate to form a government, but it does seem clear that Flanders is bound to gain more autonomy, while the power of the federal government will reduce. That's encouraging news for us, because what happens next will provide one model—though not necessarily the only one—for how similar stateless nations in the UK and Spain can move towards independence.
Bart De Wever, the N-VA leader, said that he is not looking for outright independence straight away, but to move from the current federal system to a confederal system in which Belgium will "slowly but surely, very gently disappear".
I've just read today's article by Nick Bourne on Wales Home, and much of what he says in it can be put down to the Tories being Tories. But there is one sentence towards the end that stands out as being particularly pernicious:
We must settle the political accountability question in Wales – the responsibility issue – before turning to the funding question.
The ConDem coalition's programme for government had previously stated:
• We recognise the concerns expressed by the Holtham Commission on the system of devolution funding. However, at this time, the priority must be to reduce the deficit and therefore any change to the system must await the stabilisation of the public finances.
As I said at the time, and again here, if all parties recognize that Wales is not fairly funded, it is a problem that needs to be addressed now. We all know that there are going to be huge cuts in public spending, and that we in Wales will need to shoulder our share of the pain ... but it must be our fair share. The action taken by the ConDem government to release the Fossil Fuel Levy owed to Scotland has meant that the cuts they have to face will be some £185m less than they would otherwise be. Why is Wales not entitled to a similar degree of fairness over the £300m that the independent Holtham Commission has identified as being owed to Wales?
But as if that wasn't bad enough, Nick Bourne has gone one step further than to say that we "must await the stabilization of the public finances" before we can expect this injustice to be addressed. He has declared that we "must settle the political accountability question in Wales – the responsibility issue – before turning to the funding question".
Why?
We have a situation in which the Welsh Government is responsible for spending the money it is given by the Treasury in London. We cannot raise taxes, we cannot borrow money, we cannot spend more than we are given. If the people of Wales don't like the decisions that the Welsh Government makes, they can vote for parties that they think might do better at the next election. That's how political accountability works in a democracy.
Now of course we should have responsibility for both sides of the fiscal equation. It is much better that the Welsh Government should have more fiscal autonomy by setting tax rates and balancing our spending against that tax take. I welcome any plans the ConDem coalition might have in that direction ... and we in Plaid Cymru have been pressing for this change for years.
But the simple fact is that we are being short-changed now, and we would be fools to let the promise of some sort of unspecified change to the system at some unspecified time in the future distract us from that fact.
Only last month, Tory and LibDem leaders in Westminster put up the first roadblock to fair funding for Wales by telling us that we have to wait for the public finances of the UK to be stabilized first. It was a way of kicking the issue of fairness for Wales into the long grass, in much the same way as Labour in Westminster refused to deal with the problem when they had a chance to do so.
But Nick Bourne has now put up a second roadblock to fair funding by telling us that we must also wait until the Tories and LibDems come up with a plan for the next stage of devolution in Wales. We've come to expect endless delaying tactics of that sort from politicians in Westminster, but you have to wonder what sort of masochism would make a Welsh politician ignore the £300m a year that his own country is owed.
I have to admit that I missed the release of the Schools Census data a fortnight ago, but better late than later. It's only a provisional release, and the data isn't up on the StatsWales site as yet but, even so, they show that Welsh-medium provision continues to increase.
Numbers in WM education are up in absolute terms, even though set against the general backdrop of an overall demographic fall in the numbers of children at school. More details should be available at the end of the month.
Of course the numbers would rise even more quickly if the number of places in WM schools were increased in line with parental demand.
One of the three main points of contention over the new Welsh Language Measure is that it does not give Welsh official status. The wording that is proposed edges towards that, but is not as clear cut as anyone would like it to be.
While I think it's important that Welsh should have official status, the prime difficulty faced by those drafting the Measure is that English is not in fact an official language. The National Assembly cannot pass a law to make English and Welsh official languages in Wales because it does not have any power to legislate on English, and it could be argued that to give Welsh a status that English did not have would not in fact be treating both languages "on the basis of equality".
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The news today is that the ConDem coalition is proposing that knowledge of English should be required for non EU immigrants. But that poses the question why a requirement should only apply to English and not any of the other languages of the UK: Welsh, Cornish, Scottish Gaelic and Irish, as well as Scots and Ulster Scots. It is not a question of how many people speak these languages—whatever merits that argument may or may not have—but on what legal basis one language can be treated differently from others.
If such legislation were to be passed, the de facto result of passing it would be to give English an official status that it does not have at present. So why not take this opportunity to pass a specific piece of legislation to that effect? It would only confirm the status that English already has in all but name, as well as providing a proper legal basis on which competence in English could be used as a criterion for entry. And if, in so doing, that legislation also recognized Welsh and the other languages of these islands as official, so much the better. It would be bizarre and inconsistent not to give someone from Patagonia who could speak fluent Welsh and Spanish, but not English, the same spousal rights of entry as someone who could speak English.
But even if that legislation did not include the other languages, passing it would allow the Senedd, the Scottish Parliament and the Northern Ireland Assembly to pass legislation to give our respective languages the same official status as English would have in the UK as a whole. This would be a neat way of solving the problem of official status for Welsh within the constraints of the Government of Wales Act.
Thanks to Politics Cymru for highlighting the vote in the Commons yesterday on an SNP amendment that would have included nuclear weapons in the scope of the forthcoming Strategic Defence Review:
To add ... "but respectfully request that your Government includes as part of its Strategic Defence and Security Review a full examination of the Trident nuclear missile system and any possible replacement."
As would be expected, Plaid Cymru's MPs and Caroline Lucas of the Greens supported the amendment, along with the SDLP MPs and Naomi Long of the Alliance party, who defeated Peter Robinson in East Belfast.
I'm pleased to see that they were joined by a few Labour MPs, four of whom are Welsh Labour. Paul Flynn comes as no surprise to me, as he is one Labour politician who I agree with on many of the big issues. The other three were Siân James, Nia Griffith and Dai Havard. As I've been critical of the last two on this blog on other issues, I thought it would be right to take my hat off to them and their colleagues for their stance on this.
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As for the Welsh LibDems, my contempt for them can't be expressed too strongly. Even though they presented themselves as being against Trident before they were elected, both Mark and Roger Williams voted against the amendment, and Jenny Willott did not vote at all.
In his blog yesterday, Peter Black tied himself up in knots to claim that what his party leader said about the referendum on primary lawmaking powers was merely a "slip of the tongue".
He went on to say:
Still, Clegg does appear to have developed a certain blind spot when it comes to Wales in recent weeks, missing the opportunity to make obvious points to reinforce our party's strong support for fiscal and political fairness on a number of occasions.
It is a blind spot that needs to be corrected soon before it is misinterpreted and used to undermine the Welsh Liberal Democrats' longstanding commitment to a full law-making Welsh Parliament and reform of the Barnett formula. These feature in part in the coalition agreement. It would just be nice if the Liberal Democrat leader talked about them a bit more.
Nobody doubts that the LibDems wants the Senedd to have lawmaking powers, so the headlines in today's media seem superfluous. But it is much more obvious why Mr Clegg is so reluctant to talk about fiscal fairness for Wales.
He's keeping quiet to save the embarrassment that would come if he reminded us that his party agreed to kick any hope of fiscal fairness into the long grass ... until such time as "the stabilization of the public finances" had been achieved.
As it's been put in such clear terms, how could Nick Clegg's failure to do what he and his party promised to do before the election possibly be "misinterpreted"?
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Still, it's reassuring to know that this is "a long-standing commitment". It will need to be ... because it's going to be a very long time before the UK digs itself out of the financial mess that decades of over-centralization and over-reliance on financial services at the expense of producing the goods we need has left us.
When we at last go to the polls on a bright and sunny Thursday in September 2019 to vote for independence, I'm sure the LibDems—not to mention the Tories and Labour—will still be telling us:
"There's no need to leave the Union in order to get a fair deal. We promised that we'd fight for a Commission into fair funding for Wales ... and it should only be another few years now before we stabilize the UK's financial position. Have patience. We'll get round to Wales eventually."
I was looking through the press release for the consortium that will build and operate Gwynt y Môr to try and get some idea why Wales only obtained contracts of £2.2m in a scheme with an overall investment value of £2bn.
The consortium comprises three partners:
• RWE Innogy ... the energy company, holding a 60% equity stake
• Siemens ... the manufacturer, which holds a 10% equity stake, but has been awarded the main contract to supply, install and maintain the wind turbines and grid connexions worth over €1.2bn
• Stadtwerke München ... the Munich Municipal Utility, holding a 30% equity stake
RWE won the original Round 2 bid and are the energy company driving the scheme, but they were looking for venture partners to take up to a 50% share. It is not unusual for a contractor in such a large project to have a limited equity stake: if nothing else it gives them an incentive not to get too "contractual" with their client as they both win or both lose together. But the third partner is rather more interesting.
Stadtwerke München, as we can read here, supplies power, water and other utilities to the Munich area. It is hard to see what Stadtwerke München is actually contributing to the project other than money, plus of course the kudos of being able to present Munich as a "green city". It's odd to read that their aim is for Munich to have all its electricity supplied from "green" sources, but that they are quite prepared to include projects in other countries as a way of fulfilling that aim:
By 2025, SWM even wants to produce enough green electricity to cover the consumption rate of the entire Munich power requirement – 7.5 billion kWh. To attain these ambitious goals, SWM has started the Renewable Energies Expansion Offensive.
SWM is engaged locally, regionally and in the regions of Europe, in which there is corresponding potential. Since the yield is limited in Munich. The wind blows on the sea more strongly and constantly, the sun shines more intensively in Southern Europe and more often than it does here. The electricity is supplied there, where it is produced, in order to avoid losses in the lines through long transport routes, among other things. Nevertheless, the environmental effect is advantageous for those living in Munich. Since the European electricity grid can be compared to a gigantic sea. Anyone who produces electricity feeds into this “sea of electricity”; anyone who uses electricity removes something. The same everywhere. Each additional kilowatt of green electricity prevents greenhouse gases and makes the “sea” cleaner.
Obviously Gwynt y Môr fits that bill, and SWM also includes the Andasol 3 solar power plant in Andalucia as a way in which it fulfils these aims, saying that its 48.9% share is providing energy for 33,000 homes in Munich. It's not exactly "wrong" to say this but, as with all "offsets" of this kind, things are very prone to get double counted. The Gwynt y Môr consortium proudly boasts that it will provide enough energy for 400,000 homes in Britain but—if it applies the same standards—SWM's next glossy brochure will no doubt claim that its 30% stake is supplying 120,000 homes in Munich with green electricity. In the meantime most of the electricity actually being generated in Germany will probably still be coming from coal and lignite, with plans for expansion in the number of coal-fired plants.
OK, that could be considered to be more Germany's problem than ours, but it's hardly doing much for the planet. Thanks for the investment, but no thanks for the double standards.
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But there is something else about Stadtwerke München that makes its involvement in Gwynt y Môr remarkable. It is a company that is completely owned by the city of Munich. Now of course the mutual benefit is obvious because the main contractor, Siemens, is based in Bavaria and it is therefore for the general good of the city that private firms in the region get as much work as possible. But it surely must raise questions about whether this is in effect an indirect subsidy with what is effectively public money because, like all public bodies, a city can't exactly go bust.
I've got nothing against Munich, and I've got nothing against this being a German consortium; but I can't help but feel that Wales has missed a trick. The quid pro quo for Munich's involvement must surely be an understanding that as much manufacturing work as possible will be based in Munich and the surrounding area. This, more than anything else, probably explains why Wales has only had contracts of £2.2m in a £2bn project and why we shouldn't expect to get much more.
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But if Munich can do this through a wholly publicly owned company why can't Wales do the same thing?
Munich is a city of 1.3m people with a metropolitan area of maybe 5m. This means it is more or less comparable with Wales. If we wanted to be really serious about making sure that Wales got a larger slice of the manufacturing and supply opportunities that come from multi-billion pound investments in renewable energy round our own coast we should consider trying to develop a similar vehicle.
We cannot change what the UK government has already landed us with. Tenders have already been made for the Round 3 Irish Sea zone, which at 3,715MW will probably have at least six individual windfarms of the size of Gwynt y Môr. The same is true for the 1,500MW zone in the Bristol Channel. But the financial reality is that the successful bidder/s will almost certainly have to seek venture partners once a detailed scheme has won consent, as has been the situation with Gwynt y Môr and the London Array in the Thames estuary. The projects are too big to handle in any other way.
In essence all that SWM has done is provide money rather than any service or expertise, but providing some of the money enables you to call some of the shots. There are many companies to whom RWE Innogy could have gone, most of whom would have undercut SWM, since SWM are themselves going to have to raise their share of the capital from other companies or institutions. But for SWM the name of the game was not just to get a commercial rate of return directly, but to get a much more valuable indirect return through ensuring that Munich got a large chunk of the work. Perhaps they will make some direct profit from the investment, perhaps they will only break even or run the risk of making a loss; but the indirect profit—the benefit of securing local work—outweighs that risk.
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It's clever, but the Germans don't have a monopoly on clever ideas. It might even be bending the rules a little ... though not breaking them. I'm not crying foul. I'm simply making the point that if the city of Munich can do it through a company in which it is the sole shareholder, why can't we in Wales set up something similar in order to ensure that Wales gets more than £2.2m out of the next £2bn contract?
The news that construction work is scheduled to start on the Gwynt y Môr wind farm next year is something that I welcome. It is one thing to get planning permission, but not all schemes that get planning permission actually go ahead. Scarweather Sands, off Porthcawl, is an example of one of the smaller schemes in Round 1 of the offshore wind development programme that failed because the economies of scale did not stack up compared with larger projects.
Now it is true that I have grave reservations about the way that Gwynt y Môr has been progressed, but I am not saying that because I disagree with the decision or because I think that holding out for a public inquiry would be a way of preventing it from being built. I'm sure many, if not most others who were pressing for an inquiry wanted it for precisely that reason, but for me the only thing that is wrong is that the people of Wales have no say in the decision making progress. It's our country, and we should be the ones who decide on how we produce the electricity we need through our National Assembly.
This is a project of a size (it will produce 1.95TWh a year) that can make a significant contribution to north Wales' own energy needs. The map below shows just how big it is (although please note that the number of turbines planned for the western side of the site was reduced to the dotted diagonal line to lessen the visual impact from Pen y Gogarth) compared with the North Hoyle windfarm to the south east and Rhyl Flats to the south.
But this is only the start of what is currently being planned; for Round 3 of the offshore wind development programme will bring even more electricity ashore to north Wales:
In total the installed capacity of the windfarm zones shown on the map bringing electricity ashore to Wales is 3,715MW ... which would equate to at least 12.5TWh of electricity a year. Wales' total electricity demand is less than 20TWh (the published figures of ~24TWh are wrong, I've had this confirmed by DECC). So wind power off the north Wales coast can easily produce more than enough electricity for north Wales' needs.
This confirms what I've said a number of times on this blog and elsewhere: that Wales can produce more electricity than we need from renewable sources. The main reason for this is because we have a high level of renewable resource capacity coupled with a relatively low population density. Scotland and Ireland are in the same position. But in England things are more problematic because the ratio of their renewable energy resources to their population is much lower. For that reason I had thought that nuclear power might, perhaps, be justified in England as the lesser of two evils ... provided of course that they were prepared to pay for it. I fully expect Wales to be independent by the early 2020's, and the last thing I want is for us to be lumbered with a huge clean up bill for a nuclear power station that was built primarily to produce electricity for England.
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But I came across something yesterday that has made me rethink that position. A fortnight ago the Offshore Valuation Group published its first report. This is what it says:
The Offshore Valuation Group came together to answer a central question for the United Kingdom: What is the value of our offshore renewable energy resource?
What we found has exceeded our expectations. In harnessing 29% of the practical offshore renewable resource by 2050:
• the electricity equivalent of 1 billion barrels of oil could be generated annually, matching North Sea oil and gas production and making Britain a net electricity exporter;
• carbon dioxide reductions of 1.1 billion tonnes would be achieved by the UK between 2010 and 2050 – a major contribution towards 2050 climate targets;
• 145,000 new UK jobs could be created by industry.
The next four decades of technological development could enable us to harness a practical resource ten times the size of today’s planned deployments. Integration with neighbouring electricity networks though a ‘super-grid’ could provide access to a single European electricity market, enabling the UK to sell renewable electricity across the continent.
We assessed the extent of the practical resource through a detailed mapping process based on five electricity generating technologies: wind with fixed and floating foundations; wave; tidal range; and tidal stream. The full practical resource - 2,131 TWh/year - exceeds current UK electricity demand six times over.
I am a passionate advocate of renewable energy, but I must admit to being taken aback by this conclusion. But I've skimmed through it and it seems not only to make sense but, if anything, to be a little conservative particularly on tidal power. And neither has it been produced by some Mickey Mouse think tank, it is a collaboration between all levels of government and the major industrial players, namely:
• The Department of Energy & Climate Change
• The Scottish Government
• The Welsh Assembly Government
• The Crown Estate
• Energy Technologies Institute
• Scottish & Southern Energy
• RWE Innogy
• E.ON
• DONG Energy
• Statoil
• Mainstream Renewable Power
• Renewable Energy Systems (RES)
• Vestas
• Public Interest Research Centre
In recent weeks I have, both here and here, pointed out that previous framework for nuclear power that had been set up by the Labour government has markedly underestimated the long-term cost of nuclear power, particularly in terms of waste and decommissioning. The new government does seem to be showing some willingness to properly address this issue.
But it is all too easy to see how the issue can again be fudged if the ConDem coalition changes its mind. Their programme for government clearly states that nuclear can only proceed if it gets no public subsidy, but the coalition partners put the emphasis in rather different places. I think it would be fair to say that the Tories are in favour of nuclear power, but think it can be done without public subsidy because, to paraphrase only slightly, "all private enterprise is wonderful and therefore doesn't need public subsidy". The LibDems are generally against nuclear power, but think that they don't need to make it a point of principle because no company could afford to take the responsibility for the full long-term costs and still make a profit.
So the agreement will hold for a year or two, and we might even get to the point of granting the energy companies permission to build nuclear plants ... but remember Scarweather Sands. However, when it becomes apparent that no company can afford to go ahead and start nuclear construction there is bound to be wholesale panic amongst those who have convinced themselves that nuclear has to be part of the UK's energy needs ... and the knee jerk reaction will be for the government to limit the future decommissioning liabilities of the nuclear companies so as to enable them to build them anyway.
That is the scenario we must now avoid sleepwalking into. From the point of view of the nuclear industry it won't be fair, because it isn't a level playing field. The reason why renewable energy has been able to get off the ground is because we have taken the political decision to subsidize it. Those in favour of nuclear energy will say, "Why can't you subsidize us too?" ... and that will be a hard argument to resist.
At the end of the day, the deciding factor will be whether we have any real choice. If we think that the UK cannot get its energy from renewables, then we will have no choice but to resort to an element of nuclear power ... whatever the costs to future generations. So the name of the game is to show that there is a viable alternative. That's what the Offshore Valuation Group's report has done.
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Everything depends on how quickly we invest in renewable technologies, and then roll it out at a rate that will meet demand. But the idea is shown in this graph:
The y-axis is GW of installed capacity. If we utilize the practical, renewable energy resources available around this island, we can produce all the net electricity we need by 2032, and go on to meet our total energy requirements (i.e. replacing the gas we use for heating and industry, and the oil we use for transport) by 2045.
We will have this power in perpetuity, not reliant on imports of uranium from the rest of the world, and with no ongoing problem of what to do with toxic nuclear waste or the worry of what would happen if others got hold of it. This is a prize that is worth fighting for, and Gwynt y Môr is a significant step towards it.
This blog has been set up to complement the Syniadau Forums.
Much of what will appear on this blog will also appear in the Syniadau Forums, but the emphasis on this blog is slightly different. The forums are focused more on the structures and institutions that Wales will need to develop in order to become a successful independent nation, arranged on a subject by subject basis, but the blog will have more of an emphasis on day to day political news and developments.
People are welcome to reply or leave comments either here or on the Syniadau Forums. If anyone wants to initiate a new subject they are very welcome to do so there.
