By now, many of you will have heard about the sad death, last night, of Ivan Cameron.
He was only six years old.
As the father of two young boys, I can think of nothing worse than can befall a family.
Our deepest sympathy to David, Samantha and their children.
Wednesday, February 25, 2009
Tuesday, February 24, 2009
WAG, LCOs and S4C
Last week, the United Nations declared that Welsh remained one of the world’s most endangered languages, despite the fact that there are over half a million fluent speakers according to the last Census in 2001.
This finding comes at a time when the Welsh Assembly Government has announced its intentions to apply for the transfer of further powers for the Welsh language from Westminster.
Of course, there have already been massive debates on what should be contained within any new Welsh Language Act, especially with regard to its forced adoption by the private sector.
However, the whole point of the requests for powers is not the creation of the act itself but the principle that future Welsh language powers should be decided by Cardiff Bay and not Westminster.
As you would expect, I am against any move for all Welsh businesses to be compelled to be bilingual as that would be a retrograde step which would create unnecessary divisions, especially at a time when devolution needs to be seen to be for all the people of Wales. I also believe that any legislation in this direction would be defeated by the majority of AMs.
Nevertheless, I personally believe that the time has come for the Assembly, and not the UK Parliament, to be given the powers to make decisions on the future of the Welsh language.
However, if the Assembly is to have powers over the Welsh language, then it must also have responsibility for the one organisation that has possibly done more than any other to preserve the language over the last twenty five years, namely S4C.
In my opinion, it is completely inappropriate that a television channel whose primary purpose is to provide Welsh language programmes for the population of this nation remains under the control of Whitehall mandarins within the Department for Culture, Media and Sport.
Worse still, there seems to be little political will, even amongst nationalists, to request that the funding for S4C is transferred directly to the Assembly. Why is this the case? Well, according to some in the industry, the worry is that if S4C’s funding was devolved from Westminster, then its annual £95 million budget would no longer be ringfenced and that it would have to compete with other demands on the culture budget.
Frankly, that is a weak argument as the importance of S4C to the nation and the language cannot be overemphasised enough. Indeed, I would suggest that it would be a brave politician who would make the case for cutting S4C’s budget at a time when the Welsh language clearly needs continued support. On the other hand, given the Assembly’s broken promises over the development of a Welsh language daily newspaper, those who want to protect the language may, ironically, believe that S4C’s future is safer within Westminster than it is within Cardiff Bay.
Who would have thought that we would find ourselves in a situation where politicians are arguing for a range of further powers over the Welsh language and yet seem afraid to have responsibility for their own Welsh language television channel despite ten years of devolution?
If the Welsh language is important to our country, then the time has come to bring responsibility for its future under the auspices of our democratically elected National Assembly for Wales. If this does not happen, then those in power do a disservice to the language and our nation.
Later this year, the Government will switch off the analogue signal in Wales and, at that time, S4C will become a wholly Welsh-language service with no provision from Channel 4. There could be no better time for Wales to assume full responsibility for its own Welsh language television service if only our politicians in Cardiff Bay had the courage to make such a decision.
This finding comes at a time when the Welsh Assembly Government has announced its intentions to apply for the transfer of further powers for the Welsh language from Westminster.
Of course, there have already been massive debates on what should be contained within any new Welsh Language Act, especially with regard to its forced adoption by the private sector.
However, the whole point of the requests for powers is not the creation of the act itself but the principle that future Welsh language powers should be decided by Cardiff Bay and not Westminster.
As you would expect, I am against any move for all Welsh businesses to be compelled to be bilingual as that would be a retrograde step which would create unnecessary divisions, especially at a time when devolution needs to be seen to be for all the people of Wales. I also believe that any legislation in this direction would be defeated by the majority of AMs.
Nevertheless, I personally believe that the time has come for the Assembly, and not the UK Parliament, to be given the powers to make decisions on the future of the Welsh language.
However, if the Assembly is to have powers over the Welsh language, then it must also have responsibility for the one organisation that has possibly done more than any other to preserve the language over the last twenty five years, namely S4C.
In my opinion, it is completely inappropriate that a television channel whose primary purpose is to provide Welsh language programmes for the population of this nation remains under the control of Whitehall mandarins within the Department for Culture, Media and Sport.
Worse still, there seems to be little political will, even amongst nationalists, to request that the funding for S4C is transferred directly to the Assembly. Why is this the case? Well, according to some in the industry, the worry is that if S4C’s funding was devolved from Westminster, then its annual £95 million budget would no longer be ringfenced and that it would have to compete with other demands on the culture budget.
Frankly, that is a weak argument as the importance of S4C to the nation and the language cannot be overemphasised enough. Indeed, I would suggest that it would be a brave politician who would make the case for cutting S4C’s budget at a time when the Welsh language clearly needs continued support. On the other hand, given the Assembly’s broken promises over the development of a Welsh language daily newspaper, those who want to protect the language may, ironically, believe that S4C’s future is safer within Westminster than it is within Cardiff Bay.
Who would have thought that we would find ourselves in a situation where politicians are arguing for a range of further powers over the Welsh language and yet seem afraid to have responsibility for their own Welsh language television channel despite ten years of devolution?
If the Welsh language is important to our country, then the time has come to bring responsibility for its future under the auspices of our democratically elected National Assembly for Wales. If this does not happen, then those in power do a disservice to the language and our nation.
Later this year, the Government will switch off the analogue signal in Wales and, at that time, S4C will become a wholly Welsh-language service with no provision from Channel 4. There could be no better time for Wales to assume full responsibility for its own Welsh language television service if only our politicians in Cardiff Bay had the courage to make such a decision.
Monday, February 23, 2009
Public sector pensions
On Saturday, the press reported a massive protest in Dublin against the worsening state of the economy
Despite the coverage, it would seem that not many on this side of the Irish Sea are too sure what the strikes are about as the news coverage has been scant to say the least.
Having been over in Ireland recently, it would seem that the row is all about public sector pensions or, actually who should pay the pensions.
Simply put, the government has decided that it will save money by getting public sector workers to pay more of their share of their pension. Essentially this means that the state pays less into the pension and that this is compensated directly from the workers' monthly salary.
This means, of course, that the take-home pay is then reduced, although it is not strictly a pay cut as the money is put into the individual's pension pot.
As a result, around £1.2 billion pounds will be saved by the State not paying into the pension scheme.
Not surprisingly, as shown on Saturday, there has been a massive backlash to these proposals.
However, given that there has been growing concern about the state of public sector pensions in the UK, how soon before such a move is considered by the UK Government as public finances run out of control?
Despite the coverage, it would seem that not many on this side of the Irish Sea are too sure what the strikes are about as the news coverage has been scant to say the least.
Having been over in Ireland recently, it would seem that the row is all about public sector pensions or, actually who should pay the pensions.
Simply put, the government has decided that it will save money by getting public sector workers to pay more of their share of their pension. Essentially this means that the state pays less into the pension and that this is compensated directly from the workers' monthly salary.
This means, of course, that the take-home pay is then reduced, although it is not strictly a pay cut as the money is put into the individual's pension pot.
As a result, around £1.2 billion pounds will be saved by the State not paying into the pension scheme.
Not surprisingly, as shown on Saturday, there has been a massive backlash to these proposals.
However, given that there has been growing concern about the state of public sector pensions in the UK, how soon before such a move is considered by the UK Government as public finances run out of control?
Sunday, February 22, 2009
Commercialisation and the Welsh university sector
In July 2007, a report was published that had the potential to turn around the Welsh economy.
The Report of the independent Task and Finish Group on Commercialisation in Wales conducted a wide-ranging review into how research within higher education could be successfully transferred into the market place.
Chaired by Simon Gibson – the chief executive of Wesley Clover – it concluded that Welsh universities were sitting on a “gold mine” of intellectual property that could be commercialised, thus bringing enormous benefits to the economy of Wales.
Some of the actions suggested by the report included an All-Wales commercialisation strategy that provides a clear policy framework for all Welsh public-funded agencies; creating accredited educational courses on the rudiments of commercialisation and business-building aimed at students; and the establishment of a series of advisory panels made up of people drawn from the international business community who would apply their expertise to help academics identify ideas with strong commercial prospects and realise the wealth potential of those ideas.
Yet 20 months later, despite plenty of the usual rhetoric from politicians and policymakers, the recommendations of the report have yet to be implemented.
Of course, other parts of the world have already created a real dynamism between academia and industry and have successfully harnessed the entrepreneurial impact that universities can have on their local economies.
One of these areas is Route 128 in Massachusetts, USA, which I visited at the end of January while undertaking a course at MIT, one of the world’s leading research universities.
Earlier this week, I was sent the latest detailed survey of the potential economic impact of the research developed at MIT, which has been driven largely by the creation of a culture that makes entrepreneurship common within a range of faculties.
And what is the consequence of such a culture?
The 25,800 currently active companies founded by MIT alumni employ about 3.3 million people and generate annual world sales of £1.5 trillion, producing the equivalent of the 11th-largest economy in the world.
More importantly, the types of firms created from universities are primarily knowledge-based companies that employ more higher- skilled as well as higher-paid employees, thus maximising the economic impact on a region. They also then create a massive multiplier or spill-over effect for other businesses in the region, such as utilities, services and retailers,.
Of course, I am not saying that Wales can, in any way, emulate the success of MIT, but the results from the survey show what type of impact the successful commercialisation of university research can have on a local economy.
While we may currently lack the innovation infrastructure, such as a strong cluster of existing entrepreneurs, venture capital and professional services, the report suggests that there are a number of quality of life factors which are critical in attracting the skilled professionals who help set up the core of hi-tech start-ups.
These include access to a strong educational system, cultural facilities, open space and good transportation. While the transport system in Wales still leaves much to be desired, one could argue we already have a strong foundation in many of the other factors.
With the Welsh economy facing serious challenges over the next 12-18 months, it is critical we put the building blocks into place that can drag us out of the recession quickly.
As Simon Gibson said, small changes to the university culture regarding commercialisation could make a huge difference.
However, we cannot wait another 20 months for this to happen and I urge the Assembly Government and universities to implement the recommendations of the Gibson review immediately so we can get on with making the most of world-class research for the benefit of the Welsh nation.
The Report of the independent Task and Finish Group on Commercialisation in Wales conducted a wide-ranging review into how research within higher education could be successfully transferred into the market place.
Chaired by Simon Gibson – the chief executive of Wesley Clover – it concluded that Welsh universities were sitting on a “gold mine” of intellectual property that could be commercialised, thus bringing enormous benefits to the economy of Wales.
Some of the actions suggested by the report included an All-Wales commercialisation strategy that provides a clear policy framework for all Welsh public-funded agencies; creating accredited educational courses on the rudiments of commercialisation and business-building aimed at students; and the establishment of a series of advisory panels made up of people drawn from the international business community who would apply their expertise to help academics identify ideas with strong commercial prospects and realise the wealth potential of those ideas.
Yet 20 months later, despite plenty of the usual rhetoric from politicians and policymakers, the recommendations of the report have yet to be implemented.
Of course, other parts of the world have already created a real dynamism between academia and industry and have successfully harnessed the entrepreneurial impact that universities can have on their local economies.
One of these areas is Route 128 in Massachusetts, USA, which I visited at the end of January while undertaking a course at MIT, one of the world’s leading research universities.
Earlier this week, I was sent the latest detailed survey of the potential economic impact of the research developed at MIT, which has been driven largely by the creation of a culture that makes entrepreneurship common within a range of faculties.
And what is the consequence of such a culture?
The 25,800 currently active companies founded by MIT alumni employ about 3.3 million people and generate annual world sales of £1.5 trillion, producing the equivalent of the 11th-largest economy in the world.
More importantly, the types of firms created from universities are primarily knowledge-based companies that employ more higher- skilled as well as higher-paid employees, thus maximising the economic impact on a region. They also then create a massive multiplier or spill-over effect for other businesses in the region, such as utilities, services and retailers,.
Of course, I am not saying that Wales can, in any way, emulate the success of MIT, but the results from the survey show what type of impact the successful commercialisation of university research can have on a local economy.
While we may currently lack the innovation infrastructure, such as a strong cluster of existing entrepreneurs, venture capital and professional services, the report suggests that there are a number of quality of life factors which are critical in attracting the skilled professionals who help set up the core of hi-tech start-ups.
These include access to a strong educational system, cultural facilities, open space and good transportation. While the transport system in Wales still leaves much to be desired, one could argue we already have a strong foundation in many of the other factors.
With the Welsh economy facing serious challenges over the next 12-18 months, it is critical we put the building blocks into place that can drag us out of the recession quickly.
As Simon Gibson said, small changes to the university culture regarding commercialisation could make a huge difference.
However, we cannot wait another 20 months for this to happen and I urge the Assembly Government and universities to implement the recommendations of the Gibson review immediately so we can get on with making the most of world-class research for the benefit of the Welsh nation.
Friday, February 20, 2009
IBM and a smarter future
Fascinating article in the FT by Samuel Palmisano, the President of IBM, on how the future of economies will not be dependent on spend on large capital projects but on clever solutions.
The question is whether the UK (and its regions such as Wales) can grasp the opportunity and stimulate "investments that envision and enable a smarter future".
"Governments around the world are grappling with some of the toughest decisions faced in generations. In severe recession, they are collectively considering as much as $4,500bn (€3,600bn, £3,200bn) in stimulus investments.
Understandably there is a sense of urgency, sometimes verging on desperation. But while the need for immediate economic stimulus is clear, we should not and need not panic.
Let us not revert to old-world thinking about new-world challenges.
Launching “public works” projects – putting people to work with shovels and jackhammers to put money into their pockets – is not the way to jump-start a 21st-century economy – or to build competitive advantage in the different world that is taking shape.
President Barack Obama and his administration understand that the US economy needs more than a relief package for troubled banks, asphalt for pot-holed streets and patches for schoolhouse roofs. They are proposing a higher-impact stimulus package that addresses future needs and national competitiveness.
We are seeing other examples of this kind of forward-looking thinking around the world. Many government and business leaders are not simply undertaking activity for activity’s sake but are seizing the opportunity to transform and innovate, in ways that create exportable skills, resources and technology. Such investments not only yield a greater long-term return, they are also more cost-effective.
For example, consider our power grids. They are the largest remaining artefact of the industrial age and they are due for an upgrade. Using broadband data streams, digital sensors and advanced analytics, utility companies can understand demand in real time and thus source and manage power more intelligently. In Europe, some utilities are working on smarter ways to integrate renewable sources of energy into the grid. Others are taking it further, building smart grid networks to enable consumers to plug in electric cars at a variety of locations. In this way, the digital grid provides incentives for growth in related industries. In many cases this growth primarily benefits smaller enterprises.
Getting smarter is possible across all our systems. The island of Malta, for example, is not only creating one of the world’s most advanced smart grids, it is also building smarter water and waste management systems. The same principles apply to all of these systems, including instrumentation with advanced sensor technology. As a result they are gaining a better understanding of demand, supply, routing and sourcing. They are able to manage the entire public services infrastructure more dynamically.
Consider the wireless explosion in India, which is forging a new business model for telecommunications services. Telecoms companies are creating radical new platforms to provide existing services at very low cost, and new ones based on real-time customer demand, in hours rather than months. This telecommunications revolution will spread to other markets as these companies grow faster and begin to export their skills.
Consider traffic congestion. Governments in Singapore, Stockholm and Brisbane, among many others, are developing new ways to monitor and manage traffic flow in city centres. This requires dynamic new systems to understand and predict vehicle patterns and encourage new behaviour. In Stockholm, congestion is down by 20 per cent and pollution by 12 per cent. Not only have these initiatives dramatically improved citizens’ quality of life, they are also spawning new thinking on related public services. In addition, many of these cities consider the projects as showcase investments, driving new forms of inward investment and future growth.
These governments and companies understand what technology is possible today and they are applying it to transform the systems through which their companies, communities and nations work.
Our planet is not just getting smaller and “flatter”, it is also becoming smarter. That is why governments, especially those gathering in April at the Group of 20 nations summit in London, need to shape stimulus investments that envision and enable a smarter future. There will be those who seize this opportunity and those who cling to old-world models. The choices they make will determine the ultimate winners as we emerge from recession".
The question is whether the UK (and its regions such as Wales) can grasp the opportunity and stimulate "investments that envision and enable a smarter future".
"Governments around the world are grappling with some of the toughest decisions faced in generations. In severe recession, they are collectively considering as much as $4,500bn (€3,600bn, £3,200bn) in stimulus investments.
Understandably there is a sense of urgency, sometimes verging on desperation. But while the need for immediate economic stimulus is clear, we should not and need not panic.
Let us not revert to old-world thinking about new-world challenges.
Launching “public works” projects – putting people to work with shovels and jackhammers to put money into their pockets – is not the way to jump-start a 21st-century economy – or to build competitive advantage in the different world that is taking shape.
President Barack Obama and his administration understand that the US economy needs more than a relief package for troubled banks, asphalt for pot-holed streets and patches for schoolhouse roofs. They are proposing a higher-impact stimulus package that addresses future needs and national competitiveness.
We are seeing other examples of this kind of forward-looking thinking around the world. Many government and business leaders are not simply undertaking activity for activity’s sake but are seizing the opportunity to transform and innovate, in ways that create exportable skills, resources and technology. Such investments not only yield a greater long-term return, they are also more cost-effective.
For example, consider our power grids. They are the largest remaining artefact of the industrial age and they are due for an upgrade. Using broadband data streams, digital sensors and advanced analytics, utility companies can understand demand in real time and thus source and manage power more intelligently. In Europe, some utilities are working on smarter ways to integrate renewable sources of energy into the grid. Others are taking it further, building smart grid networks to enable consumers to plug in electric cars at a variety of locations. In this way, the digital grid provides incentives for growth in related industries. In many cases this growth primarily benefits smaller enterprises.
Getting smarter is possible across all our systems. The island of Malta, for example, is not only creating one of the world’s most advanced smart grids, it is also building smarter water and waste management systems. The same principles apply to all of these systems, including instrumentation with advanced sensor technology. As a result they are gaining a better understanding of demand, supply, routing and sourcing. They are able to manage the entire public services infrastructure more dynamically.
Consider the wireless explosion in India, which is forging a new business model for telecommunications services. Telecoms companies are creating radical new platforms to provide existing services at very low cost, and new ones based on real-time customer demand, in hours rather than months. This telecommunications revolution will spread to other markets as these companies grow faster and begin to export their skills.
Consider traffic congestion. Governments in Singapore, Stockholm and Brisbane, among many others, are developing new ways to monitor and manage traffic flow in city centres. This requires dynamic new systems to understand and predict vehicle patterns and encourage new behaviour. In Stockholm, congestion is down by 20 per cent and pollution by 12 per cent. Not only have these initiatives dramatically improved citizens’ quality of life, they are also spawning new thinking on related public services. In addition, many of these cities consider the projects as showcase investments, driving new forms of inward investment and future growth.
These governments and companies understand what technology is possible today and they are applying it to transform the systems through which their companies, communities and nations work.
Our planet is not just getting smaller and “flatter”, it is also becoming smarter. That is why governments, especially those gathering in April at the Group of 20 nations summit in London, need to shape stimulus investments that envision and enable a smarter future. There will be those who seize this opportunity and those who cling to old-world models. The choices they make will determine the ultimate winners as we emerge from recession".
Thursday, February 19, 2009
Finished in months
No, not this discredited Labour Government but the recession, according to the Prime Minister yesterday who, at the same time, promised more tax cuts paid for by increased borrowing.
Shame that very few people seem to agree with him, even his own Treasury forecasts.
Shame that very few people seem to agree with him, even his own Treasury forecasts.
Wednesday, February 18, 2009
Excellent New Blog
An excellent new blog has appeared and I am sorry I have been too busy to point it out earlier.
Welsh Political History "dissects some of the claims about historical events made in the media and by politicians and bloggers and tries to work out if the conclusion put upon them can really be supported".
You won't always agree with the conclusions - I certainly don't agree with the recent economy argument - but it is well worth a read.
Welsh Political History "dissects some of the claims about historical events made in the media and by politicians and bloggers and tries to work out if the conclusion put upon them can really be supported".
You won't always agree with the conclusions - I certainly don't agree with the recent economy argument - but it is well worth a read.
UK economic forecasts
The Treasury has just released their latest set of economic forecasts for the UK economy.
Certainly, independent forecasters are now firmly of the opinion that the recovery in the second half of the year forecasted by the Chancellor will fail to materialise.
Worst still, it would seem that there will be little respite in 2010, with growth remaining static, claimant unemployment rising to 2.23 million (from 1.11 million in 2008) and public sector borrowing hitting £132 billion.
However, given the previous track recvord of some of these economists on predicting the state of the UK economy, it could get far worse.
Certainly, independent forecasters are now firmly of the opinion that the recovery in the second half of the year forecasted by the Chancellor will fail to materialise.
Worst still, it would seem that there will be little respite in 2010, with growth remaining static, claimant unemployment rising to 2.23 million (from 1.11 million in 2008) and public sector borrowing hitting £132 billion.
However, given the previous track recvord of some of these economists on predicting the state of the UK economy, it could get far worse.
Tuesday, February 17, 2009
Bute Park
Cardiff is a capital city of which every Welsh citizen should be proud.
Not only does it have superb civic buildings, iconic world-class structures such as the Millennium Stadium and great shopping facilities, it also has some of the best parkland of any urban area in the world.
One of these iconic green areas is Bute Park.
This is an incredible creation of man-made beauty which was originally developed by the great landscape artist, Capability Brown, in the late 18th century and subsequently gifted to the people of Cardiff by the Third Marquess of Bute.
It really is something special in the midst of the noise and bustle of the youngest capital city in Europe.
Given this, you would have thought that the first priority of its guardians at Cardiff Council would be to keep the park in its original and pristine condition.
However, they have now decided, in their questionable wisdom, that instead of investing in its unique features, they intend to build a £1.4m bridge and two-lane access which will devastate one of the most beautiful and tranquil parts of the park, and bisect the pathway used by walkers and cyclists.
And the reason for this decision?
According to the council, it wants to facilitate greater ease of access for articulated lorries entering the park for concerts and events. Indeed, it would seem that at a time when the environment is one of the key themes of every development strategy globally, this green space that makes Cardiff so special is being eroded for commercial gain.
Of course, if the capital city did not already have any musical venues, then some would sympathise with improving access to an open air concert location.
However, that is clearly not the case as Cardiff has an abundance of venues, ranging from the Millennium Stadium and the CIA for stadium concerts to more intimate arenas such as the New Theatre, St David’s Hall and the Sherman Theatre. Of course, it also has the magnificent Millennium Centre and I am sure that the new Cardiff City Stadium will also look to attract musical events as part of its commercial future. Even the grounds of Cardiff Castle have attracted the likes of Tom Jones and Rod Stewart in the past.
So why do civic leaders want another temporary musical venue when there are so many?
To date, officials and councillors have ignored the need for any dialogue with those who oppose any such developments within the city centre. Not only does that suggest civic arrogance in the extreme, but it ignores the fact that their actions are undermining the very fabric of the city they were elected to serve.
At the very least, Cardiff Council should hold a wide-ranging public inquiry into the future use of the green spaces in the capital city and ensure that those council tax payers who pay their salaries are fully consulted on the matter. Indeed, if they do not, then many will believe that this is the first step in opening the floodgates for the rest of Cardiff’s parklands to be exploited for short-term financial gains.
So what can be done?
Keep an eye out for any meetings against the development by the Bute Park Alliance.
Go and sign the petition on the site
http://www.thepetitionsite.com/1/Save-Bute-Park
Finally, write to the BBC and get Dragon's Eye or Week In Week Out to look at this scandalous development before it is too late.
Assets such as Bute Park should not only be appreciated for their aesthetic and recreational qualities but also play a vital part in addressing issues such as the quality of air, nature conservation, recreation and health problems.
In this day and age, it is all too easy to take our public amenities too much for granted. Unfortunately, we only realise, when they are taken away from us, what we are missing and we are all the poorer for it.
Friday, February 13, 2009
Making the most of public investment
The announcement that a new prison is to be built on the site of the old Ferodo factory just outside Caernarfon is welcome news after months of job losses and company closures.
With a thousand jobs being created and estimates that it will pump around £17 million into the area every year, the development will be a timely boost for the local economy. It may even go some way in assuaging the concerns of those in the region who believe that all the best public sector projects go to South Wales!
Now that this critical decision has been made, politicians should do everything in their power to ensure that local building companies get a fair hearing for the contracts to build the prison.
The last thing we need is for building firms in North Wales to continue to lose out on millions of pounds worth of work because of the practice of ensuring contracts are only within the reach of larger firms.
In a wider context, many will be asking whether such spending on large infrastructure projects is possibly the last weapon left in the Government’s armoury to revitalise the UK economy given that cuts in VAT and interest rates have done little to boost both business and consumer confidence.
If that is the case, then there is an imperative for both the Welsh and the UK Governments to press ahead urgently with other building projects although, apart from the prison announcement, there seems to be little evidence that either Government has brought forward any major capital projects during the last few months.
With regard to the Assembly Government, I am sure that many are disappointed that, despite the much vaunted promise to build 6,500 affordable homes, there has been little impetus by Cardiff Bay to turn this promise into a reality, with ministers now resorting to buying empty properties on existing building sites to try and meet this electoral pledge.
There have also been considerable delays in spending the £2 billion of European funds awarded to Wales as one of the poorest nations in Europe.
At the very least, one would have thought that civil servants would have prioritised and fast tracked those projects that involve any capital build so as to get the construction sector, which has been hit hardest during the recent downturn, back to work and to ensure that the money is spent quickly.
In such a context, the recent announcement that Anglesey is in the running to gain a second (and possibly a third) nuclear power station is critical to ensuring thousands of well paying jobs within the local economy.
With the future of Anglesey Aluminium hanging in the balance, it is critical that a positive decision is made quickly over this massive project and that the Assembly Government offers its full support. However, the anti-nuclear stance of some Assembly ministers may result in civil servants having their hands tied over discussing potential developments with power companies.
Of course, the decision over whether the power station will go ahead is not a devolved matter and is in the hands of the UK Government. Nevertheless, the economic development of the region is the responsibility of the Assembly Government and there are many business prospects that can emerge from the establishment of a new nuclear power station in the region.
However, Assembly officials must now be given carte blanche in not only securing a future power supply for Anglesey Aluminium but in developing any further business opportunities to create thousands more jobs on the island. With jobs become scarcer on Anglesey, such a development cannot come soon enough in changing the fortunes of the poorest county in the UK.
With a thousand jobs being created and estimates that it will pump around £17 million into the area every year, the development will be a timely boost for the local economy. It may even go some way in assuaging the concerns of those in the region who believe that all the best public sector projects go to South Wales!
Now that this critical decision has been made, politicians should do everything in their power to ensure that local building companies get a fair hearing for the contracts to build the prison.
The last thing we need is for building firms in North Wales to continue to lose out on millions of pounds worth of work because of the practice of ensuring contracts are only within the reach of larger firms.
In a wider context, many will be asking whether such spending on large infrastructure projects is possibly the last weapon left in the Government’s armoury to revitalise the UK economy given that cuts in VAT and interest rates have done little to boost both business and consumer confidence.
If that is the case, then there is an imperative for both the Welsh and the UK Governments to press ahead urgently with other building projects although, apart from the prison announcement, there seems to be little evidence that either Government has brought forward any major capital projects during the last few months.
With regard to the Assembly Government, I am sure that many are disappointed that, despite the much vaunted promise to build 6,500 affordable homes, there has been little impetus by Cardiff Bay to turn this promise into a reality, with ministers now resorting to buying empty properties on existing building sites to try and meet this electoral pledge.
There have also been considerable delays in spending the £2 billion of European funds awarded to Wales as one of the poorest nations in Europe.
At the very least, one would have thought that civil servants would have prioritised and fast tracked those projects that involve any capital build so as to get the construction sector, which has been hit hardest during the recent downturn, back to work and to ensure that the money is spent quickly.
In such a context, the recent announcement that Anglesey is in the running to gain a second (and possibly a third) nuclear power station is critical to ensuring thousands of well paying jobs within the local economy.
With the future of Anglesey Aluminium hanging in the balance, it is critical that a positive decision is made quickly over this massive project and that the Assembly Government offers its full support. However, the anti-nuclear stance of some Assembly ministers may result in civil servants having their hands tied over discussing potential developments with power companies.
Of course, the decision over whether the power station will go ahead is not a devolved matter and is in the hands of the UK Government. Nevertheless, the economic development of the region is the responsibility of the Assembly Government and there are many business prospects that can emerge from the establishment of a new nuclear power station in the region.
However, Assembly officials must now be given carte blanche in not only securing a future power supply for Anglesey Aluminium but in developing any further business opportunities to create thousands more jobs on the island. With jobs become scarcer on Anglesey, such a development cannot come soon enough in changing the fortunes of the poorest county in the UK.
Wednesday, February 11, 2009
Weep for the Welsh economy
Read the exchange below from a recent plenary and weep for the future of the Welsh economy and, for that matter, the Welsh Assembly's credibility with business.
As someone who believes passionately in Welsh devolution, I despair that those in power are doing little to help the businesses of this nation and are dragging down the reputation of the Assembly at the same time.
Whilst we are spending £1 million on determining whether there should be another referendum, the necessary instruments are already in place to give higher levels of support for Welsh businesses, yet little has been done to deal with the main issue, namely credit to businesses.
What is the point of having two billion pounds of European funding if it is just sitting there doing little to support those businesses in trouble?
What is the point of the Assembly having its own 'bank' - Finance Wales - if it does nothing to help businesses such as Preseli Construction?
What is the point of having an Assembly that is happy to showboat over broadcasting and yet its committees have had no major discussion over the state of the economy and seems afraid to drag in the heads of Welsh banks to ask them what the hell they are doing to our businesses?
I have already written on the imperative of changing the current European strategy and focusing funds towards supporting businesses through the recession, yet nothing is being done to address this.
As for Finance Wales, it is 100% owned by the Assembly Government and yet has not appeared before any Assembly Committee to explain its actions over its extortionate interest rates.
Finally, the Assembly should drag in the bank managers now to explain what they are doing (or not doing) to help Welsh firms through the current crisis. If it is good enough for Westminster, as yesterday's session in Parliament with the UK's leading bankers showed, then it is good enough for the Assembly.
If certain banks choose not to support Welsh firms, then our Government should act more directly with those that seem to be doing little to support Welsh firms. After all, the Assembly must keep its funds somewhere and the removal of £15 billion from key accounts is a big incentive for certain banks to act more responsibly.
Today, unemployment in Wales is set to rise to over 100,000. We cannot wait any longer for our devolved government to step up to the mark and actually help Welsh businesses survive the recession.
Angela Burns: Jobs are hard to come by and, on Monday, in Pembrokeshire, a company called Preseli Construction Ltd had to shut its doors with the loss of 70 jobs. It will also affect a further 20 sub-contractors who depend on it. The reason it had to shut its doors was because its bank turned around and said that it no longer wished to support companies in the construction and building industry and therefore wanted to withdraw the company’s £350,000 overdraft facility with immediate effect. Preseli Construction tried to negotiate paying it back over a couple of months, but the bank was not having any of it. That is one company.
Another company in my constituency, which I am not at liberty to name this afternoon, employs more than 100 people and has exactly the same problem, so those jobs are also in jeopardy. There is also another company that employs 25 people that is in the same position. That is more than 250 people who all work in Pembroke or Pembroke Dock. There is one common denominator and that is the bank: HSBC. In my opinion, it is just using the credit crisis as an opportunity to rationalise its books. It has not been affected by the sub-prime market in the same way as other banks, it is fairly fireproof, and it still has an excellent rating with Standard and Poor’s.
I will tell you exactly what I would like you to do, Deputy First Minister: ask the Wales leader of HSBC to come to your office to have a meeting with you. I would be delighted to attend such a meeting. I have asked the bank for a meeting myself, but it will not even bother to return my telephone calls—I cannot get through its call centres. People’s jobs are being lost. I know that you are holding economic summits and that everyone is concerned about this issue, but these banks are riding roughshod over ordinary people who will find it exceptionally difficult to get another job. This affects about 250 jobs in Pembrokeshire that will be pretty impossible to replace in the next few years. I urge you to call that bank in to see you, and I would be delighted to provide you with all necessary information to enable you to do that. Its arrogance is beyond belief.
The Deputy First Minister: Thank you for your question and for the passion with which you expressed the feelings of your constituents, which is commendable. We were extremely disappointed to hear of the difficulties experienced by Preseli Construction Ltd. As you said, the construction industry has been particularly affected by the global economic downturn. We have measures in place and we have brought forward capital projects to assist the sector, but I understand your point that one of the major problems facing such companies and others is the lack of liquidity. That is a major drawback. We have had a dialogue with the banks in Wales to try to get them to lend more. It is important that we continue that dialogue, and I will draw your comments to the attention of the particular bank that you mentioned. If we feel that its response is not sufficient, we will consider your request to hold a meeting.
Angela Burns: Thank you very much for that, Deputy First Minister; I appreciate it. I wish to add one more point, namely that I have looked at the books of the three companies that I mentioned, and I know that they have assets that outweigh their liabilities. By anyone’s standards, that makes them okay to deal with. All three have been dealing with HSBC for over five years, and the other common denominator is that the bank manager, who knew them all well, retired last year. The companies now have to deal with a bloke in a call centre, either in Carmarthen or Swansea. It is almost as though the bank were issuing a fatwa on these types of businesses as well as businesses in the transport industry. The time has come for some tough talking with the banks, because I do not think that they are listening.
The national papers report the same. Alistair Darling and Gordon Brown say that they have lent the banks all these moneys, but they are not listening, although I appreciate that HSBC has not had much in the way of Government funding. These banks want to do business in Wales, but if they want a long-term future, it is about time they put some commitment into social enterprises and the people of Wales, and not treat us in this way. At some point in the future when times are good, they will want us to bank with them, to have our money, but we want them to support us now when times are bad. I urge you to be ultra tough with them, because I think that their behaviour is despicable.
The Deputy First Minister: Thank you again for putting your comments on behalf of your constituents in the way that you have. I will undertake to contact the bank about the particular issues that you have raised. I give you that undertaking. If we feel that that action is not sufficient, we will arrange a meeting with the bank. However, it is a wider issue. You mentioned a particular bank, but it is more widespread than that. We will need to have discussions with the representatives of the whole banking sector in Wales, because the issue of businesses’ liquidity has to be addressed.
As someone who believes passionately in Welsh devolution, I despair that those in power are doing little to help the businesses of this nation and are dragging down the reputation of the Assembly at the same time.
Whilst we are spending £1 million on determining whether there should be another referendum, the necessary instruments are already in place to give higher levels of support for Welsh businesses, yet little has been done to deal with the main issue, namely credit to businesses.
What is the point of having two billion pounds of European funding if it is just sitting there doing little to support those businesses in trouble?
What is the point of the Assembly having its own 'bank' - Finance Wales - if it does nothing to help businesses such as Preseli Construction?
What is the point of having an Assembly that is happy to showboat over broadcasting and yet its committees have had no major discussion over the state of the economy and seems afraid to drag in the heads of Welsh banks to ask them what the hell they are doing to our businesses?
I have already written on the imperative of changing the current European strategy and focusing funds towards supporting businesses through the recession, yet nothing is being done to address this.
As for Finance Wales, it is 100% owned by the Assembly Government and yet has not appeared before any Assembly Committee to explain its actions over its extortionate interest rates.
Finally, the Assembly should drag in the bank managers now to explain what they are doing (or not doing) to help Welsh firms through the current crisis. If it is good enough for Westminster, as yesterday's session in Parliament with the UK's leading bankers showed, then it is good enough for the Assembly.
If certain banks choose not to support Welsh firms, then our Government should act more directly with those that seem to be doing little to support Welsh firms. After all, the Assembly must keep its funds somewhere and the removal of £15 billion from key accounts is a big incentive for certain banks to act more responsibly.
Today, unemployment in Wales is set to rise to over 100,000. We cannot wait any longer for our devolved government to step up to the mark and actually help Welsh businesses survive the recession.
Angela Burns: Jobs are hard to come by and, on Monday, in Pembrokeshire, a company called Preseli Construction Ltd had to shut its doors with the loss of 70 jobs. It will also affect a further 20 sub-contractors who depend on it. The reason it had to shut its doors was because its bank turned around and said that it no longer wished to support companies in the construction and building industry and therefore wanted to withdraw the company’s £350,000 overdraft facility with immediate effect. Preseli Construction tried to negotiate paying it back over a couple of months, but the bank was not having any of it. That is one company.
Another company in my constituency, which I am not at liberty to name this afternoon, employs more than 100 people and has exactly the same problem, so those jobs are also in jeopardy. There is also another company that employs 25 people that is in the same position. That is more than 250 people who all work in Pembroke or Pembroke Dock. There is one common denominator and that is the bank: HSBC. In my opinion, it is just using the credit crisis as an opportunity to rationalise its books. It has not been affected by the sub-prime market in the same way as other banks, it is fairly fireproof, and it still has an excellent rating with Standard and Poor’s.
I will tell you exactly what I would like you to do, Deputy First Minister: ask the Wales leader of HSBC to come to your office to have a meeting with you. I would be delighted to attend such a meeting. I have asked the bank for a meeting myself, but it will not even bother to return my telephone calls—I cannot get through its call centres. People’s jobs are being lost. I know that you are holding economic summits and that everyone is concerned about this issue, but these banks are riding roughshod over ordinary people who will find it exceptionally difficult to get another job. This affects about 250 jobs in Pembrokeshire that will be pretty impossible to replace in the next few years. I urge you to call that bank in to see you, and I would be delighted to provide you with all necessary information to enable you to do that. Its arrogance is beyond belief.
The Deputy First Minister: Thank you for your question and for the passion with which you expressed the feelings of your constituents, which is commendable. We were extremely disappointed to hear of the difficulties experienced by Preseli Construction Ltd. As you said, the construction industry has been particularly affected by the global economic downturn. We have measures in place and we have brought forward capital projects to assist the sector, but I understand your point that one of the major problems facing such companies and others is the lack of liquidity. That is a major drawback. We have had a dialogue with the banks in Wales to try to get them to lend more. It is important that we continue that dialogue, and I will draw your comments to the attention of the particular bank that you mentioned. If we feel that its response is not sufficient, we will consider your request to hold a meeting.
Angela Burns: Thank you very much for that, Deputy First Minister; I appreciate it. I wish to add one more point, namely that I have looked at the books of the three companies that I mentioned, and I know that they have assets that outweigh their liabilities. By anyone’s standards, that makes them okay to deal with. All three have been dealing with HSBC for over five years, and the other common denominator is that the bank manager, who knew them all well, retired last year. The companies now have to deal with a bloke in a call centre, either in Carmarthen or Swansea. It is almost as though the bank were issuing a fatwa on these types of businesses as well as businesses in the transport industry. The time has come for some tough talking with the banks, because I do not think that they are listening.
The national papers report the same. Alistair Darling and Gordon Brown say that they have lent the banks all these moneys, but they are not listening, although I appreciate that HSBC has not had much in the way of Government funding. These banks want to do business in Wales, but if they want a long-term future, it is about time they put some commitment into social enterprises and the people of Wales, and not treat us in this way. At some point in the future when times are good, they will want us to bank with them, to have our money, but we want them to support us now when times are bad. I urge you to be ultra tough with them, because I think that their behaviour is despicable.
The Deputy First Minister: Thank you again for putting your comments on behalf of your constituents in the way that you have. I will undertake to contact the bank about the particular issues that you have raised. I give you that undertaking. If we feel that that action is not sufficient, we will arrange a meeting with the bank. However, it is a wider issue. You mentioned a particular bank, but it is more widespread than that. We will need to have discussions with the representatives of the whole banking sector in Wales, because the issue of businesses’ liquidity has to be addressed.
Tuesday, February 10, 2009
Opportunities in China
During the last three years, I have pointed out in this blog and elsewhere that Cardiff was the only major city in the UK without a branch of the China British Business Council (CBBC) and that, as nation, this was placing us at a disadvantage in trading with one of the world’s fastest growing economies.
On Wednesday evening, this issue was finally addressed when the CBBC opened a branch in Cardiff at the start of the Chinese year of the Ox.
It was an excellent reception, although it was disappointing that more businesses did not turn up given the potential importance of China to the UK economy. Indeed, the Prime Minister himself predicted that British exports to China could double to £10bn over the next 18 months.
But what of China and its future economic prospects, and has the recession changed the way that this massive economy will manage its relationship with the rest of the World?
No one can deny the size of the Chinese economy and the way it has expanded over the last few years. China surpassed Germany in 2008 to become the world’s third largest economy, and while industrial growth in China has slowed it is still estimated to reach 8% next year at a time when all Western countries are in recession.
Yet critics are pessimistic regarding its continued success, with some suggesting that, in the short term, there may be significant problems.
There are signs that, with the world recession, the demand for exports have slowed down dramatically, with a fall of 13% in the last quarter of 2007 and a further decline of 6% predicted for 2009. As exports accounts for 40% of China’s GDP, there are worries that the main driver of exporting – foreign direct investment – is also drying up, reducing by over 16% since 2007.
Recent statistics show that as many as 26 million migrant workers – or nine times the population of Wales – are now unemployed as China’s export industry feels the effect of the global recession.
Despite this, China seems to be in a better position to weather the economic storm of the next 12 months.
While many Western countries are entering recession with weak financial institutions, high consumer debt and public sector deficits at an all time high, China has a government budget which is in surplus, a high savings rate among its population and domestic banks with plenty of capital. It has also recently committed £400bn to stimulate its economy.
So what opportunities exist for Welsh firms wishing to do business in China?
According to some experts, the combination of mind-boggling demographics and a continuing economic momentum offers major prospects for those willing to take the chance to trade.
China’s urban population will total nearly a billion by 2025, increasing by 325m. This will result in 15 cities with a population of more than 25m and 219 cities with more than one million people within their boundaries.
Within these cities, 50,000 new skyscrapers will be built, equivalent to 10 New York cities. There will also be 170 mass transit systems developed during the next fifteen years along with 40bn square metres of additional floor space.
China is also embracing new technologies and already there are 300 million internet users surfing for an average of 19 hours per week, particularly in online gaming.
There are also more than six million university graduates joining the workforce every year, improving the quality of the businesses across the country.
Such statistics may be astonishing for those living in a small nation such as Wales, but they are a timely reminder of the scale of business opportunities that could become available for those wishing to partner with China.
As the Chinese philosopher Sun Tzu said, opportunities will multiply as they are seized. With the opening of the CBBC offices in Cardiff, I can only hope that stronger commercial relationships will be formed between our two dragon economies with the support of this office, and that many more Welsh firms will sign up to the trade missions to Hong Kong and China later this year to take full advantage of the opportunities presented by one of the world’s fastest growing economies.
Saturday, February 07, 2009
The worsening state of the UK economy
So what is the current state of the UK economy? Well, the current economic statistics do not look promising:
- A record 200 people a day declared bankrupt
- Baugur - the owner of Hamleys, House of Fraser and Mappin and Webb - goes into administration
- Ford cuts 850 UK jobs amid 30% sales plunge
- Manufacturing output declined at its fastest rate since 1981 in December
- The U.K. economy plunged further into recession in the three months through January
At the same time, the so-called Global Alliance on the credit crunch that our Prime Minister has been advocating is slowly unravelling, as we saw from President Sarkozy's remarks yesterday.
Regardless of people's disdain for their actions, banks remain at the centre of any recovery plan for the UK economy.
With news that they have taken £185 billion of taxpayers money, it is time that they reciprocated by getting money to flow to the business community again.
At the very least, they should stop their practice, which is still prevalent across many sectors, of withdrawing loans and overdrafts without any rationale or warning, sending more viable companies, and tens of thousands of jobs, down the pan.
Friday, February 06, 2009
Supporting large local firms
Excellent article in the Financial Times today on the subject of supporting large local companies.
Whilst the focus is on Manchester, there are certainly lessons here for the Welsh Assembly Government in supporting indigenous businesses.
Focus should be on big local UK companies
By Andrew Bounds, North of England Correspondent
Large local companies rather than small start-ups or overseas investors are the biggest drivers of economic growth in cities but are too often ignored by policymakers, according to a study that challenges conventional thinking.
Aimed at taking stock of Manchester’s progress since the loss of much of its manufacturing base in the 1980s, the study is the first of seven to be released over eight weeks.
Carried out by Aston Business School, they will together amount to one of the most comprehensive surveys of a regional economy in Europe. The intention is to guide local councils and investment agencies – not just in Manchester but potentially in the rest of the UK – over the next decade.
The study found that indigenous companies with more than 200 employees were the biggest investors in the city – but that reality was not reflected in the way state support was targeted.
“Policy support should not be geared disproportionately either towards overseas investors or towards SMEs... conventionally considered to be the most important targets,” the report said.
“Investment by large domestic firms in the region will have the biggest impact on both productivity and employment.”
The study found that foreign investors were more productive and tended to pay wages around 5 per cent higher than local equivalents.
They also improved the performance of their customers via training, know-how and technology and could make domestic competitors more efficient, as they were forced to match their service and quality levels. However, if they were attracted by subsidies, they crowded out domestic investment.
That had a bigger impact on employment levels in Greater Manchester because it was not used to replacing people with machines, the authors said. However, they warned the investment was largely funded by debt and therefore vulnerable in the credit crunch.
They added that a skilled workforce was the biggest factor in attracting investors.
Manchester produces more graduates than any UK city apart from London but it also has tens of thousands of unqualified people in its poorer areas.
The panel overseeing the review includes Sir Tom McKillop, former chairman of the Royal Bank of Scotland Group, Professor Edward Glaeser of Harvard University and Jim O’Neill, chief economist of Goldman Sachs, the US bank.
Whilst the focus is on Manchester, there are certainly lessons here for the Welsh Assembly Government in supporting indigenous businesses.
Focus should be on big local UK companies
By Andrew Bounds, North of England Correspondent
Large local companies rather than small start-ups or overseas investors are the biggest drivers of economic growth in cities but are too often ignored by policymakers, according to a study that challenges conventional thinking.
Aimed at taking stock of Manchester’s progress since the loss of much of its manufacturing base in the 1980s, the study is the first of seven to be released over eight weeks.
Carried out by Aston Business School, they will together amount to one of the most comprehensive surveys of a regional economy in Europe. The intention is to guide local councils and investment agencies – not just in Manchester but potentially in the rest of the UK – over the next decade.
The study found that indigenous companies with more than 200 employees were the biggest investors in the city – but that reality was not reflected in the way state support was targeted.
“Policy support should not be geared disproportionately either towards overseas investors or towards SMEs... conventionally considered to be the most important targets,” the report said.
“Investment by large domestic firms in the region will have the biggest impact on both productivity and employment.”
The study found that foreign investors were more productive and tended to pay wages around 5 per cent higher than local equivalents.
They also improved the performance of their customers via training, know-how and technology and could make domestic competitors more efficient, as they were forced to match their service and quality levels. However, if they were attracted by subsidies, they crowded out domestic investment.
That had a bigger impact on employment levels in Greater Manchester because it was not used to replacing people with machines, the authors said. However, they warned the investment was largely funded by debt and therefore vulnerable in the credit crunch.
They added that a skilled workforce was the biggest factor in attracting investors.
Manchester produces more graduates than any UK city apart from London but it also has tens of thousands of unqualified people in its poorer areas.
The panel overseeing the review includes Sir Tom McKillop, former chairman of the Royal Bank of Scotland Group, Professor Edward Glaeser of Harvard University and Jim O’Neill, chief economist of Goldman Sachs, the US bank.
Wednesday, February 04, 2009
Punishing small firms
As readers of this blog will be aware, I have been a constant critic of this Assembly Government’s policy towards business rates, one of the few fiscal instruments which it has the power to reduce to help the private sector.
If it isn’t bad enough that business rates are higher in Wales than the rest of the UK, what has the Assembly Government now decided to do during the worst recession in living memory?
Yes, believe it or not, it has decided to increase business rates by an above-inflation rise of almost five per cent for 2009/10.
It almost beggars belief that at a time when owner managers are looking to save every penny to enable them to survive this economic slump, the powers that be at Cardiff Bay have decided that the best way to support businesses is to take more money out of their pockets.
As if this wasn’t enough, the UK Parliament finally announced plans for a new Business Supplementary Rate Bill last week.
This legislation, which was a direct result of the Lyons Review into local government finances, will allow local authorities in England and Wales to levy a local add-on to the existing business rates.
For many tourism businesses in Wales, it raises the spectre of the ‘bed tax’ which Lyons suggested would be one way for councils to raise money.
As our elected representatives in Westminster and Cardiff Bay are always so eager to tell us, small businesses are the backbone of the economy. Yet at a time they need real support, our entrepreneurs are not only being burdened with higher rates but councils are being given the power to squeeze them even more.
You couldn’t make it up, even in these crazy times.
Such insensitive actions demonstrate, yet again, how out of touch politicians have become from the harsh realities faced by many hard working businesspeople across this nation.
If it isn’t bad enough that business rates are higher in Wales than the rest of the UK, what has the Assembly Government now decided to do during the worst recession in living memory?
Yes, believe it or not, it has decided to increase business rates by an above-inflation rise of almost five per cent for 2009/10.
It almost beggars belief that at a time when owner managers are looking to save every penny to enable them to survive this economic slump, the powers that be at Cardiff Bay have decided that the best way to support businesses is to take more money out of their pockets.
As if this wasn’t enough, the UK Parliament finally announced plans for a new Business Supplementary Rate Bill last week.
This legislation, which was a direct result of the Lyons Review into local government finances, will allow local authorities in England and Wales to levy a local add-on to the existing business rates.
For many tourism businesses in Wales, it raises the spectre of the ‘bed tax’ which Lyons suggested would be one way for councils to raise money.
As our elected representatives in Westminster and Cardiff Bay are always so eager to tell us, small businesses are the backbone of the economy. Yet at a time they need real support, our entrepreneurs are not only being burdened with higher rates but councils are being given the power to squeeze them even more.
You couldn’t make it up, even in these crazy times.
Such insensitive actions demonstrate, yet again, how out of touch politicians have become from the harsh realities faced by many hard working businesspeople across this nation.
Monday, February 02, 2009
No Minister
Insightful article in the Sunday Times yesterday by Emma Duncan on the growing power of the civil servant in today's society
"Even in boom times there’s a lot to be said for being a civil servant. Many of them do exceedingly interesting things, if you like the idea of running the economy or protecting the environment. And they’re powerful. They tell individuals and companies how to behave. Politicians occasionally try to interfere, but ministers are ill-informed and easily distracted so do not much disturb civil servants’ lives".
"The power of civil servants is increasing, too. As this newspaper reported last week, the government’s share of the economy is growing. In the northeast the figure is 66%, compared with 54% when Labour came to power. Thanks to the economic crisis, that's going to rise still further. Near-nationalisation of the financial system means civil servants will control the banks and will poke their sticky fingers into every industry that the politicians bail out."
The bit about politicians being distracted and ill-informed is probably the most disturbing aspect of this comment as it rings all so true here in Wales.
For example, I was told that, at a high level meeting last week, a middle ranking civil servant stated, quite categorically, that it was up to her, and not the Minister, to decide which projects were supported.
You wonder sometimes why we need politicians!
Sunday, February 01, 2009
Wales and European Funds
As many of you are aware, Wales was given an unexpected boost at the end of 2006 by qualifying for a second round of European funding.
Whilst being one of the poorest regions in the whole of Europe is nothing to be proud of, the £2 billion in funds from Brussels could help develop the competitiveness of the Welsh economy at a time when it is needed the most. Of course, this money came after £1.2 billion had already been given to Wales under the old Objective 1 programme for the period 2000-2006.
Ensuring that the money is spent on projects that make a real difference to the Welsh economy is critical, especially at a time when other public sector budgets to support business are being stretched to the limit.
Many would therefore have been shocked and dismayed at the revelations from last week’s National Assembly’s European and External Affairs committee, where it was allegedly revealed that £77 million of European funds will have to be returned to Brussels because it has been unspent during the Objective 1 programme.
If this is the case, then it is a real tragedy for Wales as that funding could have made a real difference in a number of businesses and communities in our poorest areas.
Of course this must not be allowed to happen again, although this comes after concerns that the current European programme is becoming over-bureaucratic and that key projects are being delayed even though they have been in development for over fifteen months.
For example, I have been told that there are a number of significant research and development projects from the region that, despite having been in development since September 2007, have yet to be approved. This is clearly unacceptable especially as the university sector has a key role to play in boosting the Welsh economy and it is vitally important that those projects are given the green light as soon as possible.
Similarly, projects being developed by local authorities are also awaiting approval and, given the current financial crisis hitting many councils, there may be difficulty in actually finding the necessary match funding which is needed because of other budgetary pressures.
Whilst the Assembly Government, argues that it has allocated over £520 million, mainly to projects it manages itself, very little of this has actually been spent to date because of the delays in starting projects that can make a real difference and, with recession looming, private firms may not be able to now find the funding necessary to participate in programmes.
We all appreciate that there is a need for detailed scrutiny of any publicly funded project. However, it is becoming clear there has been an inordinate amount of time since applications were submitted and whilst the assessment process needs to be thorough, it should not take more than a couple of months to assess any business plan.
It could be argued that the slow pace of spending isn’t an issue and that Wales will catch up with its expenditure. However, it has been suggested that, under European financial rules, money may have to be returned again if the programmes have not spent £130 million by the end of this year.
If Wales is going to come out of recession in a strong position, it must use every opportunity available.
Having access to additional European structural funds like the Convergence programme is an advantage most other parts of the UK do not have and we must get the funding out as quickly as possible. If this requires more resources to assess the viability of the projects caught in the logjam, then politicians have to ensure that these are made available.
Europe has presented Wales with a second opportunity to make a real difference to the economy.
Let’s not throw it away because of an unnecessary obsession with bureaucracy.
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