Today's advisory ruling by the International Court of Justice on the legitimacy of Kosovo's declaration of independence in 2008 is very welcome, because it confirms the right of territories to secede from a state, irrespective of the wishes of the remainder of that state. They ruled that:
international law contains no "prohibition on declarations of independence" and therefore Kosovo's declaration "did not violate general international law."
There were elections to the Assembly of Kosovo on 17 November 2007 and on 17 February 2008 it voted to unilaterally declare independence from Serbia.
Declaring independence is one thing, but being recognized as an independent country by the other countries of the world is something else again. Because each country is free to do what it likes, it becomes a matter of consensus ... if enough countries recognize your independence, you are independent. The rule of thumb seems to be that it takes recognition by about a hundred countries to get you into the United Nations.
In Kosovo's case, its independence had been recognized by 69 countries including most of the big players. Good, but not quite good enough. Therefore the UN requested an advisory ruling in an attempt to clarify the matter so as to help reach greater consensus. It goes without saying that there are hardliners who will never accept it: Serbia of course, Russia as Serbia's closest powerful advocate, and countries like Spain who will do anything to stop Catalunya and Euskadi breaking away. But this ruling should now pave the way for many undecided countries to recognize Kosovo's independence.
From the point of view of those of us who want to see an independent Catalunya—as well as independence for our own countries, of course—the timing could hardly be better. The Catalan elections are only a few months away, and this ruling confirms that the reasoning behind the strategy adopted by Solidaritat Catalana per la Independència, as mentioned in my previous post, is perfectly sound.
No, I'm not describing the Barcelona football team, but what's happening in Catalunya.
Updating what I wrote yesterday, I've learned from this post on CataloniaDirect that a cross party committee of the Catalan Parliament last week agreed not to progress with the People's Initiative to get the signatures of 3% of the electorate in order to have an official referendum on independence. The reason for this is that the power to hold such consultative referendums was in one of clauses of the Statute of Autonomy that was recently rejected by the Spanish Constitutional Tribunal. I mentioned in this post that the power to call such referendums was in the new SoA, but didn't know until now that it was in one of the clauses which had been struck out.
I must admit to thinking that those wanting a referendum would press ahead anyway, not just to get the threshold, but to get as many signatures as possible, in order to demonstrate the strength of public opinion. But, as I said yesterday, it would only be a gesture because even if the Catalan Parliament then voted to hold an official referendum, the Spanish Government would veto it. If that avenue is cut off, the only way forward will be for Spain to change its constitution (which it obviously won't) or for the Catalan Parliament to declare independence unilaterally, but they can only do that with any authority if a majority of Deputies have been elected on that specific mandate.
The next elections to the Catalan Parliament are due this Autumn and, as a democracy, Spain would find it very hard to stop candidates standing on any platform they like. True, they were able to ban two nationalist parties just before the 2009 election in Euskadi, but they did so on the grounds that they were linked to ETA. Whether that was actually true or not is open to debate, but the timing was such that they were unable to re-form under new banners and this, arguably, cost the nationalists some seven seats and put them in opposition for the first time in thirty years. But Spain can hardly play that card again in Catalunya, because nationalists there have not used violence.
So, without any realistic possibility of holding a referendum on independence within the current Catalan or Spanish Constitution, the only game in town is to make this election into one where the main issue is independence.
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The news today is that a new organization, Solidaritat Catalana per la Independència, has been formed with that aim, which is exactly what Reagrupament have been pressing for. The three leading lights are Alfons López Tena, Joan Laporta and Uriel Bertran, as pictured below.
That Joan Laporta is included is no great surprise. The other two are the most visible faces of the series of unofficial referendums held over the past few months. But what is critical is that they are members of CiU and the ERC respectively, and are resigning their positions in their parties to do this.
In effect they are telling their parties—and their supporters, of course—that independence is more important than anything else, and I think it will be obvious from the tone of the CataloniaDirect post that there is a certain amount of frustration that neither CiU nor the ERC have bought into that agenda. But I think I can understand the position of those parties, because it is the same dilemma that we in Plaid Cymru face: although independence for Wales is our raison d'être, we can't be an electable political party unless we also take a position on all the other issues in day-to-day politics in the process of getting there.
It simply isn't credible to say, as the post appears to be saying, that if they don't get a majority that can declare independence they can be "a very strong coalition able to destabilize the Catalan Parliament" instead. Catalunya, like Spain and the rest of western Europe, has got to deal with matters like the economy, jobs, public services and the fiscal deficit with or without independence. So I'm with the ERC on this one, they can't rule out being in government if there isn't a majority in the Parliament to declare independence ... they have to get on with the everyday things too, preferably as part of government.
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Yet for the ERC there should be no real contradictions. They need to make clear that a vote for their candidates (Deputies are elected by means of a closed list, just like UK elections to the European Parliament) will be a vote for a person with a mandate to declare independence.
It is UiC who are going to be caught in the pincers. If they were able to make the same commitment, there would be no danger of them losing votes to the new group, although they might lose the votes of those who don't want independence. As I see it, it's a game of percentages. If your supporters really are two to one in favour of independence you will hold more votes than you will lose by declaring for independence. If you don't you will not get any more votes, and can only lose votes to the new group.
The beauty of UiC coming out in favour of independence is that it allows them to fight the election as much on the everyday issues as on independence. They can say, "Vote for us and you get a centre-right government to replace the current PSC-led alliance ... and you'll get to choose if you want to confirm the declaration of independence." It's a win-win.
From the point of view of independence, such a move would provide three options for voters who want it. If you want independence and are on the left ... vote ERC. If you want independence and are on the centre-right ... vote UiC. If you want independence but are non-party political and concerned primarily with maintaining Catalunya's culture and language ... and of course football ... vote for Laporta and his "good number of relevant personalities and intellectuals linked to the independentist scene". This third group of potential voters is important. With turnout in the last referendum at 48.9% and turnout in the last Catalan election at 56.8% there are a lot of people who are yet to be engaged in the process of getting the independence that they say they want when asked in an opinion poll.
I've been meaning to write something on the situation in Catalunya for some time, but the longer I left it, the more "out of the news" it became, to the point where it became a bigger and bigger task to explain things over again. However, the massive demonstration on 10 July in support of Catalunya's right to decide its own future has brought the political situation in Catalunya right back into the spotlight.
The demonstration was sparked by the decision of the Spanish Constitutional Tribunal (TC) to declare that some of the articles in Catalunya's Statute of Autonomy are unconstitutional. The Statute was passed in 2006 to replace the earlier version of 1979, which was part of Spain's transition to democracy after Franco's death in 1975. It was presented by the Catalan Parliament with support from all parties except the Partido Popular, then passed by the Spanish Parliament after amendment by them, then finally ratified in a referendum. Although the vote in favour was high (73.2% to 20.6%) the turnout was 48.9% ... which either reflected the degree to which it had been watered down or showed that Catalans were not very interested in their constitutional position, depending on one's political standpoint.
The Statute was then challenged by the Partido Popular in the Constitutional Tribunal on matters relating to Catalunya's autonomy, and by surrounding autonomous communities on other matters particularly to do with finance. Although the "headline issue" was whether Catalans were allowed to consider themselves a nation or not, the ruling had many other facets, including:
• the right of the Catalan Government to have a bilateral relation with the Spanish Government
• the obligation to know Catalan language in order to work in the public sector
• the Catalan Supreme Court of Justice as the highest court for certain kinds of laws
• minimum levels of infrastructure investment and limit on the degree of fiscal equalization
Some of these rulings are inconsistent in that, for example: the bilateral relations are essentially similar to those enjoyed by Euskadi and Navarre, and the proposed Justice Council of Catalonia is modelled on what other communities such as Andalusia already have. The fiscal provisions were intended to limit the amount that could be transferred from Catalunya to the remainder of Spain (it is the richest area in Spain second only to Euskadi) and to guarantee a minimum share of infrastructure investment, following the German model. These details are taken from this article, which is the most complete account of the ruling I have been able to find.
For information, it's probably worthwhile to look at the political parties in Catalunya, what they stand for, and their level of support. Ranked in terms of their vote in the 2006 election to the Catalan Parliament they are:
• CiU - Convergència i Unió ... centre-right, pro-autonomy (31.5%)
• PSC - Partit dels Socialistes de Catalunya ... centre-left (26.8%)
• ERC - Esquerra Republicana de Catalunya ... left, pro-independence (14.0%)
• PP - Partido Popular ... right, anti-autonomy, pro-Spain (10.7%)
• ICV - Iniciativa per Catalunya Verds ... coalition of left and Greens (9.5%)
• Cs - Ciutadans ... left, anti-autonomy, pro-Spain (3.0%)
The current Catalan government is made up of a broad left alliance between the PSC, ERC and ICV. This coalition was formed after the 2004 election, and the ERC's participation in government was at the price of securing the new Statute of Autonomy with a PSC that had always been lukewarm about it before. Negotiations between Barcelona and Madrid were also helped by the fact that the socialist Zapatero had just become First Minister of Spain. But the ERC felt that the negotiations compromised too much and left the coalition, prompting an early election in 2006. The election didn't change much, and they re-entered the coalition having to accept that the new SoA wouldn't be any stronger. CiU would also have wanted it to be stronger, but in the end the new SoA had more than 80% support in the Catalan Parliament.
Now that several articles of the SoA have been struck down or amended, those same four parties formed the backbone of the demonstration on Saturday, along with a host of civic leaders and other prominent members of Catalan society. The principles that united them were that any constitutional question mark over the new SoA should have been sorted out when it was being considered by the Catalan and Spanish Parliaments, and certainly before being approved in a referendum; and that it was up to the people of Catalunya to decide their constitutional future, not the Spanish State.
In all probability the march was organized on the basis that it is for the people of Catalunya to decide their future, and not to have something they have already approved retrospectively amended. However I'd guess it was a surprise to some of the organizers that there were so many pro-independence banners in the crowd. It wasn't organized as a pro-independence march ... but that is definitely what it turned out to be. So it is worth considering why the public mood in Catalunya has shifted from respect for the enhanced autonomy the Catalans thought they had to independence. Up until now, the only pro-independence party has been the ERC. They are the party that Plaid Cymru and the SNP work with in the European Parliament as part of the EFA.
The current rise of support for independence probably springs from the series of non-official independence referendums that started with the one in Arenys de Munt in September. There was a second round in December. Both these resulted in over 90% support for independence from those who voted, making turnout the critical factor. In the second round the turnout was 27.3%, which would have been enough to secure a victory if the turnout had been about 52.4% ... and if anyone thinks I was being over-clever with my maths, it was gratifying to see Artur Mas, leader of CiU, echo what I had said. But subsequent rounds of voting have been more disappointing for those wanting independence, with the turnout falling to 20.2% in April and most recent round having a turnout of 13.7%.
There are two ways of viewing this. For unionists, it is a demonstration that support for independence is low, particularly in the more urban areas. However it should be noted that these referendums have been organized unofficially by volunteers without the use of any official resources, most notably in terms of information and publicity. One useful parallel would be to compare these turnouts with the turnout for an official referendum and, as luck would have it, there was one of these in Barcelona in May this year on the future of the Avinguda Diagonal, one of Barcelona's main thoroughfares. Despite all the publicity events, the use of official facilities and a budget of over €3m, the turnout in that referendum was only 12%.
But even so, there was a general sense of disappointment that the unofficial independence referendums had not resulted in a higher turnout. However a second possibility has opened up, because it is now possible to organize official referendums on citizens' initiatives if they can collect enough signatures. The Catalan government has allowed the initiative to go ahead, and the signatures of 3% of the electorate (about 220,000) are required within a six month period. There is little doubt in my mind that this number of signatures will be gathered simply because of the numbers who have already voted Yes in the referendums to date, but what happens after that is more problematic. A similar referendum in Euskadi in 2008 was banned by the Spanish State.
A third development is that two more pro-independence groups have recently been formed. The first, Reagrupament, set itself up with the specific aim of getting enough deputies to the Catalan Parliament elected with a pro-independence mandate—either under its own name or by getting other parties to adopt that specific policy platform—in order to declare independence unilaterally. The thinking behind this is that the Spanish won't let Catalans vote in a referendum, therefore declaring unilateral independence will allow them to set up a referendum without Spanish interference. Other countries, as well as the EU and UN, would be almost certain to recognize that independence if it was confirmed in a properly held referendum, and the Spanish would not dare to take control by military force.
For some time there was speculation that Joan Laporta (the recently retired President of Barcelona FC and unambiguously pro-independence) would join or even become co-leader of Reagrupament, but he has decided to set up his own party, Democràcia Catalana, as a vehicle by which he hopes to become President of Catalunya. Of course it is not out of the question for the two groups to form an alliance for the election.
Against that melting pot of possibilities, the thing that matters more than anything is public opinion. Last December I pointed to a poll that showed 51% in favour of independence but didn't get round to mentioning a later poll conducted for El Periódico. Yet it just so happens that they commissioned another poll in June, and the results of both are:
If an official referendum on
independence for Catalonia were held, would you vote for or against?
Parliament has accepted an initiative to hold an official referendum on independence. Do you think it appropriate to hold it at the moment?
Do you think he the necessary signatures (25,000*) will be collected to progress it? [MH: this must be a misprint for 250,000]
If the signatures are obtained, do you think that the Catalan Parliament would approve holding the referendum?
Do you think the Spanish government would allow this referendum to be held?
Apart from the headline figure showing a margin of 48.1% to 35.3% in favour of independence, what is most interesting to me is the breakdown by political party. Of course supporters of ERC are solidly in favour of independence, and those of the PP and Cs are solidly against; but the other parties are more interesting.
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The majority of CiU supporters, by a margin of almost 2:1, are in favour of independence (and the same was true in the breakdowns for last December). Now CiU has always been a Catalan nationalist party, but in favour of greater autonomy for Catalunya within Spain rather than independence. So the choices for the CiU leadership are stark, for no political party can stand against something that most of its supporters want. If CiU now shifted its policy to one of pro-independence, the chance of independence would grow dramatically because they are the biggest party in Catalunya, even though kept out of government by a coalition of the three left leaning parties. If it doesn't shift its policy, there is every chance that voters could shift from CiU to either Reagrupament or to Laporta's new party, which would position themselves on the centre right so as to catch those votes, knowing that left-leaning independence supporters would vote ERC.
It's a choice that CiU would much rather not have to make. So it is concentrating its effort, along with the PSC, on trying to get the Constitution of Spain changed so that there is no contradiction between it and the 2006 SoA. My opinion is that it's worth giving it a go for the sake of due process (and the ERC and ICV will join them in that) but that it won't happen. That's largely because public opinion in Spain has developed a markedly anti-Catalan streak, as was shown in this post.
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Of the parties of the left, opinion among ICV supporters is fairly evenly divided, but with a very high percentage of don't knows. However that probably doesn't matter too much one way or the other for a party with less than 10% support. The PSC, on the other hand, has 27% support. Its problem is working out its relationship with its sister party in Spain, the PSOE. The situation is rather like that between Wales and Scotland and the UK. The PSOE needs PSC support to form a government in Madrid in just the same way as Labour needs its Welsh and Scottish MPs to have any chance of forming a government in Westminster.
So the chances of the PSC leadership agreeing to independence for Catalunya are very small, even though more than a third of their supporters want it.
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The final factor is that the next Catalan elections will be held this coming Autumn. Things are very fluid, and it's hard to pick up on all the nuances of what is happening as parties and personalities jockey for position.
Well, that's the background as I see it. And even though things are complicated, you wouldn't want me not to make some predictions ... so here goes.
The referendum initiative will get 220,000 votes without any trouble. The PSC and CiU will try not to make an issue of it until after the elections because they will want people to vote primarily along the left/right lines for which they are the biggest parties respectively. Therefore the name of the game for those who want independence is to make independence a greater issue than the normal left/right divide of everyday politics. If ERC, Reagrupament and Laporta can make this the burning issue of the summer, UiC will be under great pressure to decide whether to take a pro-independence stance for fear of losing votes if they don't. The size of the demonstration last weekend suggests it will be, but UiC are doing very well in recent polls (over 40%) and may well think that they don't need to change anything.
I predict that UiC will commit themselves to holding a referendum. That's easy. But the big question is what position they will take when (for there's no question of it being an if) Spain refuses to let it go ahead, as they did with the Ibarretxe referendum in Euskadi in 2008. If they can't say what they will do when Spain blocks the referendum, it will lose them votes to Reagrupament and Laporta if independence can be made the main issue of the election.
Even though I would be disappointed to see them fall short, ERC, Reagrupament and Laporta will only get about 40% of the seats in the new Parliament. Because CiU will have committed themselves to a referendum it will be voted though in Parliament, but will be blocked by Spain. However neither CiU nor the PSC will be able to form a government that is not dependent on pro-independence parties of some political hue, and CiU deputies will not feel able to vote for a UDI because they were not elected on that mandate. So new elections will be necessary in Spring 2011. This time there will be nothing for the CiU to be ambiguous about, and they will have to adopt a pro-independence stance because all other avenues will be closed. The majority in the new Parliament will then be elected on a pro-independence mandate and will declare UDI, with a confirmatory referendum to be held within a few months under EU supervision.
I've just noticed that John Tyler, one of True Wales' small core of supporters, has linked to this post I wrote last week on Holtham. Well, if he wants to draw attention to himself, let's show him for what he is. He said this about the report:
It failed the whole population of the United Kingdom by restricting itself to four entities …
England
Northern Ireland
Scotland
Wales
… its failure was to consider England as a single entity rather than a series of regions with differing needs, regions that change with time, without such considerations the report is fundamentally flawed.
The focus of the Holtham report (the subject of the first report, repeated in the final report) was to examine how much money Wales would get if it were treated on the same basis as an English region; because the different regions of England receive differing amounts of money from Whitehall departments according to their individual needs, rather than just the size of their population. That's why spending per head in London is much higher than it is in any other part of England, as well as being higher than it is in Wales, of course.
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How could someone write on this subject, but manage to get what he writes not just wrong, but completely wrong?
Once again, one of True Wales' most prominent activists is deliberately spreading lies and misinformation in order to confuse people ... not just on his own blog, but in the unfailingly amusing comments on Betsan Powys' blog as well. There can be no other explanation.
True Wales are living down to their reputation. They obviously still believe that if you spread enough lies, some people will be gullible enough to believe them.
And indeed the political reaction is one of condemnation from opposition politicians and incomprehension from the BBC's reporters. But I think we are in danger of missing a more important point.
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If there's one thing that characterized Labour's thirteen years in power it was a huge increase in the amount of money spent on the health service. When they came to power, the health service was on its knees. It badly needed more investment, both in people and facilities.
But Labour's preferred mechanism for building new hospitals was PFI. Doing it this way had the advantage (until the accounting rules were changed) of keeping what would otherwise be public borrowing off the books. But funding new building projects in this way is much more expensive in the long term, not just because the consortia need to make a profit, but because of being tied to high-cost management and maintenance elements.
PFI was the norm in both the English and Welsh National Health Services until relatively recently. And the privatization ethos was even more evident when Wales bought into the idea of creating an internal market in our NHS to faithfully replicate what was being established in England. The existing Health Boards were broken into 22 smaller units precisely so that they could compete with each other over commissioning and providing services.
But both those policies were reversed in Wales. As a result of the One Wales Agreement, the internal market in the Welsh NHS was abandoned; and Welsh Labour—to their credit—had already come round to agreeing with Plaid on how expensive it was in the long term to build hospitals under PFI agreements. But there was a downside to this decision. In the absence of an alternative funding mechanism, the result was that fewer hospitals and clinics were built in Wales; but the ones that were built were financed in the normal way out of the capital investment element of the block grant. The Treasury would have been more than happy to allow Wales to build more hospitals, but only if funded under PFI ... as was still being done in England.
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Now why did we make these decisions? Simply because we knew that in the long term it would be much more cost effective not to use PFI. So if we imagine identical new hospitals in Wales and England, the one in Wales will cost our NHS very much less than the one in England ... maybe as little as half over a typical 25 or 30 year PFI contract. Similarly, the reason for abandoning the internal market in the NHS was to cut out waste and unnecessary duplication.
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Returning to the story, I don't know how much of the difference in funding between the Welsh and English NHS is down to factors such as this, but it should be quite clear that the intended result of doing what we have is for the Welsh NHS to cost us less than its English counterpart. The whole idea is to get the same outcome for less money (... or a better outcome for the same money). In other words, it is not just a question of over or under-funding compared with England or any other country, but a balance between funding and outcome.
Now perhaps our outcomes in Wales leave a lot to be desired—although it is worth remembering what Betsan Powys said here about the apparent differences in waiting times between Wales and England, and what I said about it in the context of the larger picture here—but we cannot naïvely assume that spending more money is the only way of improving these outcomes. It is not merely a question of how much we spend, but of how wisely we spend it.
I've found the reaction to the Holtham Commission's report interesting. There was a good selection of differing views on last week's Dragon's Eye:
It's probably fair to say that a good number of people think this report has come at just the wrong time ... or at least that the second part of it has. The recommendations contained in the first part of the report over replacing the Barnett Formula with a formula based on need remain unchanged, and the report has also incorporated the Commission's model for how a needs-based formula could be calculated. But the second part looked beyond the immediate problem at how Wales should be funded in future.
Betsan Powys might well have a point when she said that the range of political reactions to the second part has actually resulted in people from all sides of the political spectrum reaching a remarkable degree of consensus about the first part. Personally, I think the consensus was already forming, and that the only reason why the parties were not in open agreement was because of the election in May. But I suspect that the force behind that consensus is not primarily one of fairness or principle, but simply of wanting to get more money. If operating on the same principles happened to result in Wales getting less money, we can be sure that most politicians would find some new principles. But that is the one thing we cannot afford to do. If anything is clear from the interview with Gerry Holtham, it's that the power to tax is a fundamental part of government, and therefore the principle of having a Welsh Government that can just spend the money it is given without being accountable for how that money is raised is flawed. Even the most local level of government can set its own precept, which is then collected as part of Council Tax.
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But against that backdrop, politicians from across the political spectrum seem anxious to say how much they are opposed to the Assembly getting tax varying powers, even though they are all in favour of devolution and even of extending the devolution settlement we have. Glyn Davies and Rhodri Morgan are two who made their opposition to tax varying powers perfectly clear.
Rhodri Morgan justified his position by saying that if the 1997 referendum had included an option on tax varying powers it would certainly have been lost. But I have to question that. As I see it, the issue was that we were being offered a very limited form of devolution not because we did not have the appetite for anything more, but because a tranche of Labour MPs were determined not to let us have anything better. It was very hard to stir any great enthusiasm for something so watered down, and that is why the turnout was low.
But, irrespective of what may or may not have been the case then, it is very clear what the situation is now. In a YouGov poll last year, this question was asked:
To what extent, if at all, do you agree or disagree with the following statement?
"The National Assembly for Wales should have the same level of powers as the Scottish Parliament."
The margin of agreement was 63% to 28% ... over two to one. By clicking the link for the full data, we can see that supporters of every party agreed with the statement: the Tories by 54% to 42%, Labour by 68% to 24%, the LibDems by 59% to 34% ... and Plaid by a margin that makes me blush with pride.
So doesn't it seem rather odd that people like Rhodri Morgan and Glyn Davies should be so adamantly against what the people that vote for their parties want?
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In the programme Betsan Powys also said that the polls commissioned by the BBC showed that about a third of people in Wales wanted a Senedd with powers of taxation ... and that this high a figure was unexpected. I have to tell her that she should be very much more surprised, because that was only those who want Wales to have powers of taxation as a devolved nation within the UK. It excluded those who want Wales to set its own taxes as an independent country.
These are the options and percentages for the past two years:
February 2010 (with 2009 in brackets)
Wales should become independent, separate from the UK and the European Union ... 4% (was 5%)
Wales should become independent, separate from the UK but part of the European Union ... 7% (was 8%)
Wales should remain part of the UK with its own Assembly which has full law making powers and some taxation powers ... 40% (was 34%)
Wales should remain part of the UK, with its own Assembly which has full law making powers BUT NO taxation powers ... 13% (was 10%)
Wales should remain part of the UK with its own elected Assembly which has limited law making powers only (as it has now) ... 18% (was 21%)
Wales should remain part of the UK and the Assembly should be abolished ... 13% (was 19%)
So the latest margin in favour of taxation powers stands at 51% to 44%. In fact the answer to this question was very close to the 52% to 39% margin for those who said they would vote in favour of primary lawmaking powers in the same poll. So Betsan's "third" is considerably short of the mark. The appetite for the Assembly to have some tax setting powers is very much stronger than she and her colleagues thought.
In fact the question has been asked, although with slightly different options, for several years. The margins in favour of the Assembly having taxation powers were:
55% to 41% in 2006
47% to 44% in 2007
50% to 46% in 2008
I'm showing these figures to demonstrate that the appetite for powers of taxation is much stronger than some people would have us believe. I fully accept that people like Rhodri Morgan and Glyn Davies are against powers to set taxes and I respect their candour, but I have to say that I find the attitude of those who do want taxation powers slightly more difficult to understand.
Apart from in 2009, the BBC's annual poll has shown that more people are in favour of tax varying powers than are against. So those of us who want to see it shouldn't be frightened off saying so for fear that it will make next year's referendum on primary lawmaking powers harder to win. First it won't really make any difference one way or the other but, more importantly, I can imagine those who want to see it backing themselves into the position where they are kept on the defensive. I don't want people in Plaid Cymru to feel they have to answer the "slippery slope" question by saying, "Let's not talk about tax, this referendum is only about primary lawmaking powers."
It's true, but it's not a good enough answer. When asked, we should be bold enough to say that this referendum is just one step on the road to the Wales we want. When asked, we should say that we are working towards devolution of not only taxes and borrowing, but of police, justice and prisons, of large scale energy, and of the welfare and benefits system as well. As I noted here 59.5% of us want us to make decisions on the benefits system in the Senedd, compared to only 22.7% who want those decisions made in Westminster. We need to display the courage of our convictions, for we know where we want to go and people will follow us because we have a coherent vision. Look again at how Betsan characterized the "drama of the day" shock reaction of other parties to what the three economists said in the report ... but Plaid's reaction was to point out that they have now said something not dissimilar to what we've been saying for a very long time.
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So if Yes campaigners from other parties want to explain that they are only in favour of primary lawmaking powers, but may or may not take a position on further devolution at some point in the future, we should let them do that explaining for themselves. But what is the point of us in Plaid Cymru—and those in other parties who have said that they want to take devolution yet further—trying to hide what we believe?
I've just read the Holtham Commission's final report. As with the first report last year, it's clear and thorough, yet it didn't strike me as being a particularly groundshaking piece of work. When I'd finished reading it I found myself asking, Is that all?
Gerald Holtham
David Miles
Paul Bernd Spahn
Fairness and accountability: a new funding settlement for Wales Summary Full text
1. A fair funding formula
On the subject of replacing Barnett with a needs based formula, the report couldn't be clearer. In fact everything was already clear in the first report, and the Commission then published a working paper which outlined how a needs based-formula would work in December last year. The basic indicators are:
• Number of children
• Number of older people
• Ethnicity
• Income poverty
• Ill health
• Sparsity
And these come together in this rather neat graphic showing how they vary between Wales, England, Scotland and Northern Ireland:
But—perhaps tacitly acknowledging that there are political difficulties in implementing a new formula because of how Barnett benefits Scotland—the report repeats its recommendation that a floor be put in to protect Wales until a proper formula is agreed. Despite both Peter Hain saying, and Peter Black believing, that a floor has been put in place, it hasn't. The report also says the 114% floor they suggested before was deliberately conservative.
The political impasse will be hard to break. In my opinion it can only be broken in one way: to acknowledge that Scotland will get substantially less money on a needs-based assessment, but to make up for that by giving Scotland a fair share of the revenue from North Sea oil and gas in its waters in compensation. At present Barnett is trying to be two different things at the same time, and until the two things are separated, there will never be an acceptable political solution. But this will involve the UK government having to concede the principle that—in part at least—it is Scotland's oil and gas. That is a big bullet for the UK to bite.
2. Borrowing
This is the most uncontentious part of what the report has to say. Wales already has a £500m "overdraft" facility for short term balancing and, perhaps by coincidence (or perhaps not) the Treasury announced yesterday that Wales would be able to access the small discrepancy between what the Welsh Government spends each year and what it is entitled to spend: the year end flexibility that equates to about £200m. Taken together, these should cover short-term fluctuations.
The block grant already includes elements for capital expenditure, but there is no scope for independent long-term borrowing for infrastructure improvement. Up to now the Treasury have resisted this on the grounds that Wales and Scotland do not have a guaranteed income to service any long-term debt because each comprehensive spending review is only for three years. It was on this ground that the Treasury made such a fuss over the funding for the new Forth bridge in Scotland, effectively trying to tell the Scottish Government to do it by PFI or not at all. Of course the idea that Wales and Scotland might not get any money in the next CSR was laughable, and the report poured scorn on it.
So what is being recommended is that borrowing should be allowed only for capital expenditure. Holtham envisages that this would be on the same basis as local authorities can borrow now, namely through the National Loans Fund or Public Works Loan Board because (at Treasury rates) this is the cheapest way of doing it. I won't question that this is cheaper than borrowing commercially, but it fails to take account of the Treasury's eagerness to cut back on all borrowing. It may well be that other sources will be the only way of actually getting money, so I'd urge Westminster not to prevent us going to commercial lenders. We might well be able to devise new methods of borrowing that are similar to PFI in that the borrowing is not classed as public borrowing, but ensure that what would otherwise have been private profit for the PFI consortia is recycled back to the public purse instead.
3. Setting tax rates as well as spending money
Where this final report breaks new ground is on the ways in which the Welsh Government can be made responsible for not just spending money, but for how the money it spends is raised. The point of principle is that any body that spends large sums of public money should also be at least partly responsible for justifying how that money is provided.
After considering the pros and cons of each form of existing tax, it draws very much the same conclusions as Calman: that income tax is the best tax to be devolved. In two respects what Holtham proposes is better than Calman (and in my opinion should therefore apply to Scotland as well, though the report doesn't say that). The first improvement is that instead of "everything but 10p" applied to both tax bands (basic and higher ... but I guess also the new rate as well) it should be half of each tax band. The second improvement would be that the Welsh Government could set different rates for each tax band.
I have to say again that there is a basic flaw in one of the premises in the report, which I first commented on in this post. Holtham takes it for granted that a person's tax rate would be based on residence. I believe it would be much better to base it on workplace. I find Holtham's idea that Wales might set a lower higher rate in order to encourage high earners to live in Wales rather bizarre.
I'm also slightly disturbed by the idea that the differential of either rate form England should be no greater than 3p. I say that based on what happened in Scotland when the SNP (with LibDem support) wanted to abolish Council Tax and replace it with a Local Income Tax. As I read it, they would have done so if they could do it within the 3p variable rate ... but the sums didn't quite add up. They would probably have worked with 4p. So the proposed 3p limitation very much ties the hands of any government that wants to do something radical with the tax system.
As with Calman, there are several more minor taxes that could be devolved, but the big question is over corporation tax. This is where I find the report rather too tepid. It's definitely a candidate tax, but the final recommendation is a rather weak:
The Assembly Government should seek discussions with the UK Government and the other devolved administrations about the feasibility of devolving corporation tax.
But I suppose it's better than ruling it out altogether. We know that the ConDem coalition wants to reduce CT in Northern Ireland, and therefore it must make sense to establish a mechanism for a variation in Wales and Scotland too.
4. Contol of more than one lever
But the big criticism I have of the report is that it appears to me to be missing the point of what taxes can be used for. The whole section on tax is predicated on the idea that if a government puts up rates of tax it will have more to spend on services, and that if it lowers rates of tax it will have correspondingly less to spend ... but that treats the economy as something static.
I see tax as a tool to give the Welsh economy an international advantage. So if we, for example, by lowering business taxes encourage more companies to locate in Wales, or to expand their existing operations in Wales rather than in another country, we will have more jobs. What we lose in company taxation we gain by having more people paying income tax and fewer people out of work and on benefits.
So, at a minimum we need control over at least over two levers in order to gain an overall benefit. Control of some income tax alone just results in the one-dimensional:
higher tax rates
= more to spend on services (or vice-versa)
Adding the extra lever results in the two dimensional:
lower business tax rates
= more jobs
= more income tax
= the same to spend on services
But the vital third dimension is:
lower business tax rates
= more jobs
= more income tax and fewer people on benefits
= more to spend on other services
Holtham says yes to the first lever, maybe to the second, but doesn't even contemplate us getting any benefit from the third. That's what I find so disappointing about it. Yes, I've presented it in a simplified way, and I don't want to imply that it's as easy as that. Like flying a plane, you need a lot of skill and coordination to keep it in the air, let alone to get it to fly in the direction in which you want to go.
In this context it is worth asking why the Scottish government has never used its one lever to vary the basic rate of income tax by 3p. To my mind it is only because there is nothing with which to balance that variation. You can't get a plane to turn using just the rudder, you need control of the ailerons and elevators as well.
5. Political reality
OK, so it's not as much as I would have wanted, but it's probably a good reflexion of what any current UK government is likely to give us. It would be unrealistic to expect Wales to get much more fiscal autonomy than is currently being proposed for Scotland on income tax or Northern Ireland on corporation tax. But there really is no reason why we should expect less than they are getting.
But how do we implement these proposals? Or are we not going to implement them at all ... since there is a feeling among some commentators that this report will simply be kicked into the long grass? My feeling is that we must implement these recommendations in some form.
The report runs through what things can be implemented simply by agreement between Westminster and the devolved administrations, and concludes that nearly everything can be done by agreement; but that tax setting powers is a change that will require ratification in a referendum in the same way as the Scots were asked a separate question on tax-varying powers in the 1997 referendum.
I have to say that I question the need for this. There is no suggestion that the Scots are going to have to approve Calman in a referendum, so why should we have to go through it in Wales? As I said before, the previous tax varying powers for Scotland were so inadequate that they were never used, and could never realistically be used. What the Holtham Commission are proposing will give Wales broadly similar fiscal responsibilities as are (according to the ConDem coalition) now going to be given to Scotland without a referendum. Nor is anyone suggesting a referendum in Northern Ireland to set a mechanism to vary the rate of corporation tax there. Why treat Wales differently?
In the end, the over-riding principle is No representation without taxation. Spending cannot be done in isolation from the responsibility of having to justify to taxpayers why their money is being spent. This set of proposals is way short of the fiscal responsibilities I want us in Wales to have. So let's not set another hurdle for us to jump over before we can take this first step towards fiscal responsibility.
It is interesting to see that all five would-be leaders of the Labour Party have said they are in favour of a Yes vote in the referendum on primary lawmaking powers for the Senedd.
As recently as last year this was still a burning "issue" on which the Labour Party were split. But now everything has changed. I wonder what someone like Paul Murphy—who is used to joust with Don Touhig for the dubious prize of being the MP most against any further devolution to Wales—makes of that? He supports Ed Miliband, and Ed Miliband wants a Yes.
What of many of the rest who were at best lukewarm about it? They all support a candidate who wants Wales to have primary lawmaking powers. So will they now fall into line? I think even those who will do it through gritted teeth are hardly the sort who would put their head above the parapet on the issue.
The simple fact is that the Welsh public want a Senedd with primary lawmaking powers ... by a margin that is widening all the time, and currently stands at almost two-to-one in favour of a Yes. Now that it is clear that the tide is moving in only one direction, what Labour MP would want to stand against it?
Today is Independence Day in the United States of America ... and it's something that we in Wales should be celebrating every bit as much as our relatives across the pond.
Of those who signed the Declaration of Independence back in 1776, sixteen were of Welsh descent, namely:
George Clymer, Stephen Hopkins, Robert Morris, William Floyd, Francis Hopkinson, Francis Lewis, John Morton, Britton Gwinnett, Thomas Jefferson, John Penn, George Read, John Hewes, James Smith, Williams Hooper, Lewis Morris and William Williams.
Foremost among them was Thomas Jefferson, who was the principal author of the document itself and eventually became third President. He said of himself:
The tradition in my father's family was, that their ancestor came to this country from Wales, and from near the mountain of Snowdon, the highest in Great Britain.
We can only assume that he thought the higher mountains in Scotland were part of not-so-great Britain. The other famous surname is that of John Penn, who was related to William Penn, the man who founded the colony he first called New Wales, but which later became Pennsylvania.
But perhaps more influential than anyone who signed the document was Richard Price, a non-conformist minister from Glamorgan. This is what David Williams said about his contribution:
One Welshman, however, although he never set foot on the American continent, did contribute vitally to America's political development. This was the philosopher, Dr Richard Price. Price's contribution was twofold. In the first place, he may be said to have changed the nature of the Revolution itself. For, to begin with, the Revolution was a conservative one; its purpose was to preserve a system of government against reactionary innovation on the part of George III and his ministers, and it was to the common law rights of Englishmen, and to English constitutional precedents, that the colonists appealed for a redress to their grievances. But early in 1776 there appeared Richard Price's Nature of Civil Liberty, of which 60,000 copies were immediately sold, and of which no fewer than fifteen editions were called for within one year. In this Price advised the colonists to act according to 'the principles of liberty', and not according to 'the practice of former times'; to appeal, not to the legal rights of Englishmen, but to the natural rights of men, and thereby the whole temper of the Revolution was changed.
Moreover, Price, in his various writings, drew a glowing picture of the future of America, and this faith in the future destiny of their country has had a great influence in welding together the diverse elements which form the American population into one nationality. In older countries the sentiment of nationality derives mainly from a common background; the essence of national consciousness is a common tradition. But this is lacking in a population made up largely of immigrants, and the part played in other countries by a common tradition has been played in America by a common faith in the future. This America owes as much as anyone to Dr Richard Price. It is no wonder that the new government invited him to emigrate, and that Yale bestowed an honorary doctorate on him, the only other recipient of the honour at the same time being George Washington himself.
If you want to read the pamphlet, it's available online as a facsimile or as a more readable text version here.
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It's interesting to wonder to what extent there is anything distinctively Welsh about the ideas that led to American Independence ... for there were a good many Americans of English descent who wanted independence too, though in nowhere near the same proportion relative to the size of England compared with Wales.
While talking with a friend a couple of weeks ago, I was told that in the crisis that followed the American Declaration of Independence, Parliament in Westminster held a debate in which Welsh MPs were excluded on the grounds that American Independence was perceived as a specifically Welsh conspiracy to undermine the crown. He thought that it had been mentioned in a book by Bill Bryson. I've tried looking for some references, but haven't been able to find any. So can anyone shed some light on this? If it's true, as my friend said, the story would make some movie.
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But despite what Parliament may or may not have thought about the Welsh, the important thing is that America did manage to retain its independence, despite the United Kingdom's attempt to quash it by force. Sadly, force became an all too familiar pattern for the rest of the Empire until the UK finally learned the lesson that it was better to let countries leave without killing those who dared to ask for independence.
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More newly independent countries have produced—or been given—more modern constitutions, but America still stands out as a country that was founded on the highest of principles. And even if it hasn't quite lived up to those founding principles as it developed to become a superpower, the values of its founders are deeply embedded in its people, and the world is a better place because of it.
So Happy Birthday, America. When we come to draft our own Declaration of Independence for Wales, we can draw plenty of inspiration from the one we prepared earlier.
I suppose there couldn't be a more appropriate time to question a widely used footballing term that doesn't make any sense. Think about it. Where is the front of the net?
For me, the front of the net has to be to side facing the pitch, with the back of the net facing the crowd. So the front of the net is where the ball actually ends up when you score.
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So why am I sharing this great pearl of wisdom today? It's not just because of the World Cup, but because it seems to be time for a referendum on the alternative vote.
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We all call the current electoral system for Westminster "first-past-the-post". But think about it. Where is the post?
If only one person can be elected, then the "post" is surely 50% of the votes, so that the winner needs 50% + 1 to get past the post. But what we actually have is a system where very few runners get past the post. Instead we usually award the race to the horse that manages to run four furlongs if all the others don't manage three.
So isn't "first-past-the-post" a more accurate way of describing what we all call the alternative vote?
Well, I've managed to confuse Nick ... though not half as much as the idea of holding the AV referendum on the same day as other votes is going to confuse others.
There isn't a leader of the Welsh Labour Party. Carwyn Jones—despite being the most powerful elected Labour politician in the UK—is merely the leader of the Labour Group in the Assembly. He takes his orders from the UK Labour Party.
I wouldn't normally get involved with the internal workings of the Labour Party, but this article in today's [Glasgow] Herald is worth sharing with people in Wales:
Miliband says Scots Labour must make own policy
Labour leadership contender Ed Miliband says the party has to embrace differences north and south of the Border.
On a campaigning visit to Holyrood yesterday to meet MSPs he backed the idea of the Scottish Parliament going its own way from Westminster on legislation, and of the party in Scotland having complete control over policy.
"The policies in Scotland for Scottish Labour should be decided in Scotland – that should not be controversial," he said. "Under my leadership we would lighten up about difference.
"The whole nature of the devolution settlement is accepting that within a United Kingdom we can learn from each other and there will be particular policies and ideas which would be appropriate to Scotland and that Scotland should be able to pursue."
"Clear red water" was just a clever marketing ploy to inoculate Labour in Wales from the negative effects of the policies that the UK Labour Party was pursuing in London. Just as in Scotland, the reality was that Welsh Labour had no power to make or control its own policy. It could only—and can still only—go as far as the Labour structures in the UK allowed it to go.
Now I don't know whether Ed Miliband will be successful in his leadership bid (although he does seem to be one of the favourites) but what he wants to see happen in Scotland is important, and should make Labour in Wales sit up and take notice.
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Imagine a Welsh Labour Party that is able to put the interests of Wales first, rather than having to fit in with policies that always have to be twisted to the right in the hope that Labour can be elected in middle England. Imagine a Labour Party that was free to say that the economic needs of Wales were not always the same as the economic needs of other parts of the UK ... and could therefore propose that we had greater fiscal autonomy in order to tailor policies that were suited to Welsh needs.
But, so far as I can see, Ed Miliband is not proposing to give Welsh Labour that degree of autonomy. Only Scotland. Just as Labour gave Scotland a better devolution settlement than it gave Wales. Just as Labour allowed public spending in Scotland to maintain it's unfair differential with the rest of the UK, while the differential in our share of public spending relative to England fell by half in the thirteen years that Labour were in power at Westminster.
Wake up, Labour politicians in Wales. You're being left behind again. Start demanding that Wales and Scotland are treated equally.
The latest YouGov poll for ITV Wales shows that 55% will vote Yes in the referendum on primary lawmaking powers, as opposed to 28% who will vote No ... a big increase on the previous figure.
It's excellent, though not really unexpected, news. The margin in favour has been growing steadily for several years now. The only thing that's changed in the past few months is the certainty that we will get the referendum before the next Assembly elections. With the Westminster election out of the way, minds are beginning to focus on this as the next political campaign that will be fought in Wales, and I think that explains why the Yes vote is growing stronger.
Obviously Labour will be delighted at this, but I don't think they should expect this surge to carry over until next June (I'm now fairly certain that the Assembly election will be on 2 June ... it's something I've been calling for, and it seems that it now has broad cross-party support). That's because the biggest issue in politics at present is the programme of cuts being implemented by the ConDem coalition across the UK as a whole, therefore the political focus is still very much on UK matters.
It's fairly obvious that opinion in Wales is going to swing away from the Tories and LibDems as a result of the cuts in services ... and that it will hit the LibDems more than the Tories simply because Tory supporters had no illusions that their party would do anything else, whereas those that voted LibDem would not have expected their leaders to have bought into the Tory agenda with such relish.
That means that people are likely to turn instead to the parties that wanted less savage cuts and a greater emphasis on taxation as a fairer way to cut the deficit. But on the Westminster stage and in all the UK media, Labour is the only party that isn't Tory or LibDem, so they are presented as the only alternative. I think that best explains why Labour's support has soared to 42%.
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But that's only a snapshot for now. For the focus is set to shift to Welsh issues, although not perhaps until the summer is over. Come September, we'll have a much clearer idea of how the cuts will affect us, and attention will focus on how we protect ourselves from them by making the best use of less money. 62% of us already think that most of the political decisions that affect our lives should be made in the Assembly rather than at Westminster (24%) or Local Authority level (7%) ... so the call for more responsibility to be devolved to the Assembly will only grow stronger. In fact I think that by the time we get to campaigning in earnest for the referendum the focus will have moved on from the administrative wastefulness of LCOs, and we will instead be asking why we do not have the same fiscal powers that are going to be given to Scotland, rather than concentrating only on why we were never given the basic lawmaking powers that the Scottish Parliament had from day one.
My advice to any Yes campaign would be to focus on that. To look to get the same devolved status within the UK as Scotland and Northern Ireland already have, and regard the hurdle that Peter Hain put in our way as something to be trampled down as we move on towards more fair and equal treatment. Why should we in Wales put up with less?
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So from the Autumn onwards the focus will be on Welsh affairs, and in February and March will be at fever pitch as we work towards the poll on 31 March (trust me on this one). But in April and May the focus will continue to be on Wales, although this time on which parties offer the best programme for government in the Assembly.
The prolonged focus on Wales means that Plaid Cymru would have to run a disastrously inept campaign not to come out well. First, we will have delivered on the main reason for going into coalition with Labour ... a successful referendum. The simple fact is that we got Labour to realize that Peter Hain's Government of Wales Act was not something that would last for a generation, and that he was completely wrong to say the referendum could not be won. Second, we have demonstrated in our three years of government that our ideas work. The inventiveness and quick footedness of our policies has left Labour diehards complaining that we have "run rings around them" in government.
It will be fascinating to see how this will play out in our respective election campaigns. I'm sure Labour will want to fight the election in the same old tribal way. But they will not be able to use their traditional "it's us or the Tories" mantra. They will have to acknowledge that a lot of what has made One Wales successful has been because they worked with us. I'm happy to acknowledge that Labour have some good ideas, so I'd expect Plaid to campaign in a very different way. For us, it will be about differences of emphasis rather than fundamentally opposite views. It will be about collaboration rather than confrontation.
But more importantly, it will be about Wales ... and this is where we are certain to be on more solid ground than Labour. For our policies are designed around Wales and worked out to suit Wales ... while Labour's policies will always be designed around what will win them votes in England so that they can get back into power at Westminster. In short, the immediately preceding referendum will put the spotlight firmly on what is good for Wales; and that will sink Labour's support back down towards the 30% mark, while pushing Plaid's support up.
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.
