THE SUN RAINS ON GORDON BROWN'S PARADE

As this blog predicted in July, Rupert Murdoch and News International have ditched the Labour Party and are supporting the Conservatives at the next general election.

Whether this has anything to do with the Coulson Affair is open to question but as every biography of Rupert Murdoch testifies, the media mogul never forgets any slight against him or his newspaper empire.

Interestingly, Sky's Adam Boulton suggests that "There is no evidence that newspaper endorsements affect their own readers, let alone the broader public, but they are significant in the battle of ideas. The Sun newspaper's endorsement is probably the most significant of all."

However, with a daily readership of almost 8 million, it is bound to have an effect over the next seven months on the battle for voters. At the very least, and with the most perfect timing imaginable, it will diminish the impact of Gordon Brown's speech and hit Labour hard whilst giving the Conservative party a timely boost before next week's conference.

NO PRISON FOR NORTH WALES?

Earlier this year, the Labour Government announced that a new prison would be built on the site of the old Friction Dynamex factory in Caernarfon.

It was said that this would create 1000 jobs, pump £17 million into the local economy and help to fill a considerable shortfall in prison places in Wales.

However, last Tuesday, the Ministry of Justice announced that the factory site was unsuitable for a prison development, allegedly due to land contamination issues, and that it was now looking for other suitable sites in Wales.

The loss of such a major project is a bodyblow to the local economy and one has to wonder what on earth is going on when a government department changes its mind so quickly on such a crucial issue without any proper explanation.

Certainly, there is a clear case for a prison in the region, given that the Ministry of Justice itself has estimated there is a shortage in North Wales of around 800 places.

The question is whether the site fulfilled the criteria set down by the Ministry for Justice which includes the following factors: be an absolute minimum of fifteen acres; close to or within large conurbations; within one hour of key courts in the region; have reasonable access to public transport and to major roads; and preferably be located on a brownfield site where any contamination should be manageable.

Therefore, if the estimated cost of £24 million for decontaminating the land was the main barrier for cancelling this project in Caernarfon, then you have to wonder why on earth this wasn’t considered at the time of the original announcement in February, as everyone knows that such an industrial site would need considerable amounts of remediation work to make it suitable for any other use?

Indeed, David Jones, the MP for Clwyd West, asked in the House of Commons whether any account had been taken of the cost of remediation of asbestos contamination when selecting the Dynamex site as the preferred location for a new prison in Wales. The response was that the Ministry of Justice was aware that the site would attract such costs.

Given this, you have to start wondering whether this is a political decision rather than one made on the grounds of unsuitability, especially when Peter Hain waded in with the suggestion the prison should now be sited on Anglesey, one of the Labour Party's main marginals.

There is undoubtedly an economic case for such a decision which could benefit the poorest county in the UK but it would be the wrong decision to deal with the issue of prison location.

Instead, as this column pointed out a couple of weeks ago, the Secretary of State for Wales should lobby the Assembly Government to provide special status for the island to support its future development.

Of course, perhaps the wrong location was chosen in the first place. As the North Wales Probation Board and the North Wales Criminal Justice Boards indicated last year, the best location for a new North Wales prison would probably be somewhere along the A55 in either Conwy or Denbighshire.

This could provide the optimum solution for a central facility within an hour of both Crown Courts at Mold and Caernarfon and the majority of Magistrates Courts in the region. Indeed, serious consideration should be given to redundant industrial sites such as the Indesit factory in Bodelwyddan, where 320 jobs were lost when the company closed recently.

The case for a North Wales prison is unequivocal and the current situation is totally unacceptable but any decision has to be right for the needs of the prison system and not for any political expediency eight months before a general election.

CALL FOR ANGLESEY TO BE TREATED AS A 'SPECIAL CASE'

Having been away in Ireland at the beginning of the week, I am just catching up with the news from around the country.

In particular, I was struck by the news from Anglesey that a bid is to be made for millions of pounds in extra funding to rebuild Anglesey’s battered economy.

According to the last Wednesday's Daily Post,

"the council is preparing a bid to the Welsh Assembly Government for the island to be treated as a special case - requiring additional funding to overcome its problems".

About time too, as my regular column for the Daily Post pointed out on Monday 14th September (and which was published here three days later),

"the island is the poorest county in the whole of the UK and given such an exceptional situation, there needs to be an exceptional approach".

Those living on Ynys Mon can only hope that the Assembly will now listen and provide the resources needed to make a difference in tthe poorest county in the whole of the UK.

THE SECOND RECESSION?

Last week, the unemployment figures in Wales resumed their upward trend after two months of a ‘statistical blip’ in which the numbers fell.

According to the Office for National Statistics, unemployment rose by 7,000 over the three months to July, bringing the total to 116,000. This has left Wales with 32 per cent of working age adults either unemployed or economically inactive, a rise of 54,000 since the same period last year.

Whilst there are encouraging signs that the economy may finally be recovering, the revelation that the current UK government has been planning cuts in expenditure of nearly 10 per cent could have a disproportional effect on the Welsh economy, given the high dependence on the public sector which some economists have suggested to be as much as two thirds of the wealth generated in Wales.

As for the private sector, it remains my belief that Wales entered the recession earlier than the rest of the UK. That is not to say that we will emerge out of this earlier than other regions as there are still dangers that large overseas employers could, if influenced by the domestic situation back in their home countries, make the decision to cut and run. The recent example of Bosch, with 900 jobs hanging in the balance, is testament to the uncertainty that remains in the global economy.

Therefore, we could be looking at a worst case scenario where there could be up to 50,000 Welsh job losses as a result of the proposed reductions in public sector expenditure by the Treasury. Whilst many may see this as a threat to the prosperity of Wales, others will see it as a golden opportunity to rebalance the economy away from dependence on the public sector and in developing a vibrant and sustainable private sector.

How do we do this?

The biggest problem with the seven economic summits organised by WAG is that, at least according to the pronouncement of government politicians, they have essentially achieved only one tangible outcome, namely the ProAct scheme.

This was a programme that was first suggested in this column last November and, as I said at the time, "Rather than watching impotently as firms lay off key workers, why doesn’t the Assembly Government set up a multi-million pound key fund which enables businesses to temporarily move their workers, during the current economic crisis, onto skills training courses? Not only would this enable businesses to retain their skilled workers through government support over the next 12 months, but it would provide opportunities for upskilling and, critically, enable firms to be in a more competitive position when we emerge from recession.”

Clearly ProAct has had an effect, with 6,200 people having taken up training places through the scheme since it started. However, it is now time to look beyond such defensive measures and develop new ways of thinking that can deal effectively with public sector expenditure cuts whilst trying to grow the Welsh economy through the private sector?

Who should do this?

Certainly, I would argue that we need to step up a gear from the economic summits that have taken place to date and which have essentially been meetings of business organisations and civil servants. If we need innovative new ideas and entrepreneurial plans to grow the economy during the next few years, then we must bring together entrepreneurs and innovators to achieve this.

As Valleys Mam noted, one answer can be found across the Irish Sea where, last weekend, an extraordinary meeting took place in Dublin when the Irish Government brought together its most talented diaspora to develop solutions to help it out of the worst economic crises that Ireland has ever experienced. The Global Irish Economic Forum gathered 180 of the top Irish brains in the business and creative worlds together in one place to harness ideas and talent for the recovery of the economy.

Given such a great idea, many people in Wales would think it is such a shame that we haven’t done the same although this blog, back in December 2006, did suggest that:

“the First Minister should urgently convene a summit of our leading businesspeople and entrepreneurs - such as Sir Terry Matthews, Sir Christopher Evans and Henry Engelhardt - to get their views on what is needed to kick start the Welsh economy.”

With the First Minister looking set to announce his retirement from frontline politics next week, it would be a fitting send-off if he would issue an immediate call to arms to the Welsh diaspora, including people such as Sir Howard Stringer of Sony and Martin Coles, President of Starbucks, to come together to develop a way forward for the future of the Welsh economy.

Certainly, bringing the experience and expertise of wealth creation should help the Assembly Government to develop the strategies needed to turn around our fortunes and ensure that Wales emerges from the recession on the right path to a balanced, innovative and entrepreneurial economy.

IBW's JUSTIFICATION

Whilst a row rumbles on about the cost of reviewing travel arrangements for International Business Wales, it would seem that their team in North America - based at the Chrysler building in New York -is quietly getting on with the job of getting business into Welsh companies.

According to a report on the Business Wire, exports from Wales rose faster over the last year than any region of the UK.

Exports from Wales were up 8.4 percent for the year, powered by a 12.7 percent increase in sales to North America, Wales’ second largest trading partner.

Figures from the HM Revenue & Customs Service show that total Welsh exports were £10.258 billion for the 12 months ended June 30, up from £9.5 billion in the same period the year before. Welsh companies sold products worth £2.5 billion to North America.

During the same period the total value of exports for England fell by 1.2 per cent to £169 billion.

According to the article, Relcom Solutions - which attended the U.S. trade mission earlier this year - has developed a software package known as Merlyn that automates maintenance programs for manufacturing equipment.

"As a result of the trade mission, a major American global automation corporation is interested in our software,” said Rhisiard Jenkins, Relcom's Managing Director".

Other Welsh companies are increasing their U.S. business, including Biotec Services International Ltd., a pharmaceutical contract services company, and Biocatalyst Ltd., a manufacturer of enzymes sold primarily to food producers. Wales-based Sureview Systems International Ltd. has also sold its automated software for monitoring closed circuit television stations to circuit firms throughout the U.S. as a result of the trade mission.

I await the congratulations of our Assembly Members for this excellent performance in outperforming the rest of the UK during the worst recession since the Second World war with bated breath.

SCIENCE PARKS CREATING PROSPERITY IN WALES

On Thursday, I spent that day at the 25th annual conference of the United Kingdom Science Park Association (UKSPA), an event which focused largely on the contribution of science parks to the innovation system.

With more than 300 delegates, the conference was exceptionally well organised and I was pleased to listen to some old friends giving, as usual, some stimulating and controversial viewpoints on how to develop a knowledge- based economy.

For example, Professor Tom Cannon of Liverpool University talked about the globalisation of talent and how it had the ability to change economies; Professor Henry Etzkowitz discussed the so-called triple helix of government, academia and industry and how, by working together, they could create a new future for regions across the world; and finally Sten Gunnar Johansson talked about the success of his Mjardevi Science Park at Linkoping University, an institution I have been working with closely for more than 15 years.

So what is a science park?

It can essentially be described as an industrial development consisting of a cluster of knowledge- based businesses where support and advice are supplied to assist in the growth of the companies. In most instances, science parks are associated with a centre of technology such as a university or research institute.

Unlike normal property developments, a typical science park will offer technology and business services, either in-house or through a regional network of experts. Some of the more developed science parks also include advanced services such technology transfer, advice on intellectual property, access to loan and venture capital and specialist marketing advice.

What was most striking was the data regarding the actual economic impact of science parks on the UK economy. With more than two million square metres of property, 70 science parks are now responsible for 3,286 companies which employ 73,497 people.

In 1985, when UKSPA started, there were only 18 members with 119,000 square metres of property on which 607 companies with 3,317 employees were based. This demonstrates how the science park movement has, since its inception, made a real difference to local economies around the UK.

As well as being magnets for large inward investors within knowledge-based sectors they have also acted as a major catalyst for local high technology businesses – more than 70% of the companies on UK science parks were previously located within 30 miles with two thirds of the tenant businesses being independent companies.

Such data is dazzling but, in the Welsh context, the biggest disappointment is that we don’t actually have any proper science parks within Wales.

Yes, the Technium Network and the Cardiff Business Technology are members of UKSPA but they are essentially incubators for businesses rather than what we would normally define as science parks. This is in stark contrast to other regions of the UK which have made serious investments into this area during the past two decades.

Of course, the same old excuses keep getting repeated by policymakers.

For example, many will say that a small region such as Wales could never aspire to having such a large science park, yet the town of Linkoping in Sweden, with only 150,000 inhabitants, is the base for the Mjardevi Science Park which has 250 firms employing more than 6,000 people, with the majority of those generated from the local university.

There are also those who say that government simply “doesn’t do” such developments, and yet the Welsh Assembly had very few qualms about spending hundreds of millions of pounds on the Technium incubator network without bothering to attract a penny of private sector investment from property developers.

I am convinced that, as we come out of the recession, there will be an appetite in Wales for at least two science parks from private sector developers if they are properly supported by government at both a local and national level.

The first would be in North Wales, probably equidistant from Bangor and Glyndwr Universities and thus being an attractive option to any spillovers from Manchester and Liverpool.

The second, as I have said before in this column, should be based in Bridgend where there are already major employers such as Sony and Ford.

It would therefore be in the centre of a research triangle of Cardiff and UWIC, Swansea and Glamorgan.

With excellent communications links by road, air and rail and the benefit of being based in the grant-friendly Convergence Fund areas of Wales, both science parks would quickly become competitive to emerge as major magnets for both large knowledge-based companies looking for a base in Europe and for new technology-based firms spinning out of both the techniums and the universities.

All that is needed now for Wales to break its duck on such a development is for the Assembly Government, working alongside the necessary local authorities, to begin the planning process and to ensure that there is an attractive package available for investors to consider building this critical resource for the knowledge-based economy of the future.

A FUTURE FOR ANGLESEY?

Last week, Anglesey suffered a major blow when the plan to build a major retail, business and leisure park on the island, and create 1300 new jobs, was cancelled by developers when the Welsh Assembly Government (WAG) decided to call the scheme in for a public enquiry.

This came after Anglesey Aluminium had decided to shut its Holyhead plant with the loss of 500 jobs, the earlier closure of large firms such as Eaton Electronics, and the rejection of the opportunity to build a sustainable job-creating marina at Beaumaris.

Whilst some local economies could cope with such disappointments, it must be remembered that Anglesey remains the poorest county in the whole of the UK, where the average prosperity is £10,560, roughly half the national average.

You would therefore have thought that in an economic situation where Anglesey is faring worse than any other part of the UK, WAG would have now stepped in with some serious long term financial support. Yet, apart from the £15 million provided for the so-called “Mon and Menai” plan, much of which will go to Bangor and its university, no real cash has been put together to support the island.

Whilst officials within both the North Wales branch of WAG and Anglesey Council are passionate about supporting the local economy, their efforts will ultimately be wasted if politicians won’t make the money available to make a real difference to the economy.

Of course, those in Government would argue that they are already making a difference but their only real tool for coping with the recession, namely the ProAct scheme, has had little impact on supporting industry on the island. In addition, the hundreds of small businesses on Anglesey are still wondering what happened to Plaid Cymru’s election pledge to cut business rates, a promise that somehow disappeared once the party entered into coalition with Labour.

Worst of all, whilst there is £2 billion of European funding available to support poor areas such as Anglesey, very little of it (with the exception of the new £5 million coastal project) has gone to help the local economy.

So what can be done about Anglesey’s economy?

As I mentioned earlier, the island is the poorest county in the whole of the UK and given such an exceptional situation, there needs to be an exceptional approach.

At the very least, the Assembly should break with its current policy of ignoring local demands and devote a significant amount of support directly for the island, guaranteeing at least £100 million from European Structural Funding over the next five years and matching that directly from its economic development budget.

This would ensure that officials could begin to plan the economic recovery of the island knowing they have money available and develop an offer to private businesses that could be unrivalled in the whole of Wales.

Of course, if the politicians wanted to be really visionary, they could press to ensure that Wylfa B is commissioned as soon as possible and ensure that a proper infrastructure is created around the new power station, such as a new science park focused on supporting the nuclear industry and the energy generating sector as a whole.

Indeed, there would be no reason why Anglesey couldn’t assume the tag of “the energy island”, especially given the massive potential of other types of climate friendly energy sources, such as wind, solar and tidal, all of which could also be prioritised for development to create several thousand sustainable well-paid jobs.

Wales is currently the poorest region in the UK and Anglesey the poorest county in Wales. If we are to address our long term economic problems across the nation, then there is no better to start than with Mon, Mam Cymru.

INTERNATIONAL BUSINESS WALES STRIKES BACK

Last month, I wrote a defence of the work of International Business Wales (IBW) following criticism of their expenses by the leader of the Welsh Liberal Democrats.

As I said at the time, IBW should be judged on their performance alone and not on the expenses incurred in bringing jobs to Wales.

That is why I am as pleased as punch to see the following press release from Reuters, which announces that, following the trade mission to the USA in July:

• Aircraft maintenance manufacturer CAVE Systems Logistic Containers has won an order for phase one of a contract with a potential value of $5 million. The initial $500,000 order from the Pennsylvania National Guard is for aircraft maintenance equipment required by troops in Iraq


• Teddington Engineered Solutions, based in Llanelli, Wales, has secured a contract worth over $800,000 from the U.S. Navy for bellows designed to allow rescued submariners to pass from a rescue vessel into a compression chamber on-board a ship - regardless of weather conditions.

That is great news and shows that the hard work undertaken by the IBW team in North America during the last couple of years is finally paying off.

I am sure that this this is just the tip of the iceberg and that there will be more contracts and investments coming to Wales during the next few months.

Given this, isn't it time for those Welsh politicians in both government and opposition who have said very little to support IBW's sterling efforts during the current furore over expenses to come out and applaud their efforts in helping to secure valuable contracts for Welsh businesses during the current recession?

LABOUR:BETTER LATE THAN NEVER

Welsh Tory calls for cuts
Welsh Tory Assembly candidate Dylan Jones-Evans is calling for more spending cuts in today's Western Mail.

Leighton Andrews
Saturday, 27 June 2009

Brown: Britain must cut spending to reduce debts
British Prime Minister Gordon Brown acknowledged for the first time Tuesday that hard economic times will mean substantial cuts to government spending on the country's already strained public services.

Associated Press
Wednesday, 15th September, 2009

Cleantech USA

I have been fortunate to spend the last week in the USA as part of a delegation to New York and Boston to examine the development of the so-called cleantech sector on the East Coast of America.

Organised by UK Trade International (UKTI), it gave a detailed insight into how serious the Americans are about not only tackling climate change but in building a whole new industry for the 21st century.

For those of you unfamiliar with the cleantech sector, it comprises of knowledge-based products or services that improve operational performance, productivity, or efficiency while reducing costs, inputs, energy consumption, waste, or pollution.

This can include energy efficiency, water purification, solar energy, wind energy, and new types of energy conservation.

Only last month, a survey of business executives by the UK Government found that cleantech is estimated to become the fastest growing sector in the UK by 2020.

Globally, analysts predict that the current world market for cleantech products and services will grow to around a trillion pounds by 2017 over the next decade, with more than one-third attributable to renewable energy sources, such as biofuels, solar, tidal, and wind power.

To date, much of the focus on cleantech within the UK has been on power generation, with windfarms at the forefront of development to create sustainable sources of energy. Gwynt y Mor, one of the largest offshore wind farms in the World - is currently being constructed off the coast of North Wales.

However, many will be surprised to learn, as I did, that there is actually not one offshore wind farm anywhere in the USA, despite the recent efforts of some developers. Indeed, billions of dollars of investment is currently being spent on energy efficiency, especially in ‘retrofitting’ existing buildings with energy saving devices.

Having met with representatives from New York State, New Jersey and Pennsylvania, it was both fascinating and enlightening to hear them compete against each other to demonstrate their green credentials, which is partly the result of the promise by President Obama to invest $15 billion every year over the next decade in renewable energy to create five million new jobs

For example, New York State’s Governor has pledged to have 45 per cent of all its energy its electricity needs through improved energy efficiency and clean energy by 2015 whilst New Jersey has a plan to have 30 per cent of its power from renewable sources by 2020. All three states highlighted the fact that they were ‘open for business’ to work with any cleantech company and there are certainly real opportunities for Welsh businesses operating in the green sector.

What really impressed me during the visit was the way the Big Apple itself had bought into the whole concept of green business. This was best demonstrated by the fact that the city of New York’s commitment to long term sustainable development has been personally led by the Mayor, Michael Bloomberg.

His “PLANYC” strategy aims to make the city ready for the challenges faced by climate change and to develop actions to deal with this. For example, he has created the largest municipal fleet of alternative fuel vehicles in the USA, including more than 3,300 hybrids for uses such as police cars to Parks Department vehicles in the aim to reduce all of New York's greenhouse gas emissions by 30 per cent by 2030.

This follows other high profile schemes such as the MillionTreesNYC initiative to plant trees in public spaces and the development of a framework for reusing thousands of acres of brownfield sites across the city to provide affordable housing, generate jobs and usable open space.

In particular, there has been a drive to attract green entrepreneurs’ to the city, with seventy five different programmes available to provide funding to new and existing businesses in the sector, to support clean energy generation and promote green technology development. These range from tax credits to the owners of buildings which meet certain energy efficiency standards, funding of up to £1 million for companies to develop or expand facilities which produce renewable or green products, and cash incentives for the installation of new solar energy systems.

Therefore, it would seem that there is a serious intent by government at a city, state and federal level to reduce the effects of climate change in the USA whilst, at the same time, developing a brand new industry that will create wealth and employment.

Whilst it has become fashionable to talk about green jobs, American politicians are matching their rhetoric with real action to support the cleantech sector and, as I have seen for myself over the last few days, they are taking this issue seriously on the East Coast of USA with government interventions that would be unheard of in this country.

We certainly have much to learn from our American cousins if we are to develop green businesses as a key part of the future development of the UK and Welsh economies.

Plaid Cymru and 'fat cat' bankers

Having just returned from the USA, I have managed to catch up with some of the blog entries in wales, many of which (given their political colours) discuss the Plaid Cymru conference in Llandudno.

Of particular interest is the entry by Bethan Jenkins on Ieuan Wyn Jones's speech at the conference this afternoon, where he again goes after his a regular theme of attacking financial institutions and saying that, under the Conservatives, "Fat cats and banks will be alright".

Of course, a few miles down the road is Bangor Business School, where I worked for four years. When I arrived in 2000, one of the first things I did was to establish an advisory board, very much on the model that I had seen during my days at the Michael Smurfit School of Business at UCD in Ireland.

During my time, the board was stocked with entrepreneurs such as Henry Engelhardt of Admiral Insurance, Malcolm Walker of Iceland and enterprise academics such as Professors Allan Gibb and Sara Carter.

Of course, entrepreneurship is no longer important at the university since I left and the board has now rightly changed its focus and recruited individuals from banks whom Ieuan would naturally recognise as 'fat cats'.

These include Lord Merfyn Davies of Standard Chartered Bank, Dyfrig John of HSBC and Sir Peter Davis (a main board director of UBS AG of Zurich - Europe 's largest bank by assets).

However, they are exactly the high flying board members that an institution such as Bangor Business School needs given its expertise in banking and finance but, unfortunately, they are also the type of individual that certain Welsh politicians are quick to criticise in order to appease the party faithful at the annual conference.

Given this slur on those bankers who support the local business school, perhaps the Chairman of the Advisory Board will now write to the leader of Plaid Cymru to remind him of the importance of the banking sector to the UK economy. However, as that person is none other than Dafydd Wigley, the Honorary President of Plaid Cymru, I think that the devil will be wearing iceskates before that happens.

UK DROPS DOWN UNIVERSITY LEAGUE TABLE

The OECD today reported that only 39 per cent of school leavers went on to gain a degree in 2007 - placing the UK 14th out 26 developed nations.

This is despite the OECD finding that men graduating from university across the western world earn £113,000 more over a lifetime than those leaving education at 16 whilst women would earn £81,000 more.

Indeed, the UK has fallen from third place in the university graduation rate table in 2000 to 11th position in 2007, being overtaken by countries such as Poland, Iceland, Ireland, the Netherlands, Sweden and Portugal.

Perhaps the most damning statement comes from Andreas Schleicher, senior analyst at the OECD’s education division, who said that it was vital that university places were expanded during the economic downturn, suggesting the UK may be worse placed to recover.

He said

“You can clearly see for the majority of OECD countries that it does make sense… to create enough places...You can always say ‘well, shouldn't we wait until the crisis is over and then do it then?’ No, the moment of the financial crisis is when the opportunity costs are low. People have nowhere else to go...So countries who want to position themselves well after the crisis that is probably the best moment to provide enough places for people.”

A few weeks ago, I suggested that WAG could and should be using the £110 million of unspent European funding to make additional university places available to students.

If it continues to ignore this issue then, as the OECD has predicted, the Welsh economy will not be in the position to be competitive with other nations when the recession ends.

OIL FOR TERRORISM

There has been considerable debate over the Scottish Government’s decision to grant compassionate release to Abdelbaset Ali Mohmet al-Megrahi, the man convicted of planting the bombs that brought down the Pan Am flight over Lockerbie in 1998, causing the deaths of 270 people.

Initially, this was seen as a decision made predominantly on compassionate grounds by the Scottish Government in Edinburgh without any interventions at all from Westminster. However, during the last couple of weeks, evidence has begun to emerge that this may no longer be the case and yesterday, there were even revelations that the Libyans had even paid for the medical advice which secured the release.

Whilst prominent Libyans, such as Colonel Gaddafi’s son, had suggested that al-Megrahi had been released as part of a wider trade deal with the UK, this was initially denied, with Lord Mandelson pouring scorn on such speculation. However, as the truth threatened to come out, one of Labour’s leading ministers has since acknowledged that trade deals with Libya had actually played a ‘very big part’ in the decision to free the Lockerbie bomber.

In a wide ranging interview with a national newspaper on Saturday, Jack Straw, the Justice Minister admitted that one of the key factors in releasing al-Megrahi was merely a pawn in a multi-million oil exploration deal between Libya and BP.

In kowtowing to large multinational conglomerates and their greed for oil, it would seem that the Labour Government has seriously damaged our diplomatic links with the USA, one of our biggest trading partners. Many will simply not understand why anyone would put an oil deal with a dictatorship ahead of our relationship with our strongest ally.

And America is angry, in the same way that we would be if our citizens had been cold bloodedly murdered by a terrorist and the convicted perpetrator released as part of a trade deal. There has already been a call for an inquiry from leading Democratic senators to 'uncover whether justice took a back seat to commercial interests'. With an increasing number of American politicians seeing the decision to release al Megrahi as a sign of weakness against international terrorism, this could potentially escalate into the worst diplomatic freeze between the USA and the UK since the Suez Crisis of 1956.

We therefore have a British government which has put commercial imperatives before the long term security of this country and the friendship with our closest ally. We have a Prime Minister who failed to give any opinion on the release of al Megrahi and, worst of all, who stated earlier this week that there was ‘no deal on oil’, a statement which means that he is either ignorant of what his ministers are up to or he has been economical with the truth about these revelations.

Supporting trade deals in exchange for the release of a convicted terrorist is bad enough but in the middle of this international furore, many have already forgotten the British victims of Libya’s terrorism activities during the last thirty years.

These include PC Yvonne Fletcher - who was shot and killed whilst on duty outside the Libyan Embassy in 1984 - and those murdered by the IRA with weapons supplied by Libya, such as the victims of the 1993 Warrington bombings.

In jumping through hoops to satisfy a dictator’s whims, the Prime Minister and his cabinet have poured scorn on the principles of all of us who abhor terrorism whilst, at the same time, damaging the special relationship with our closest ally.

Worst of all, their actions, despite today's spectacular u-turn, have shown them to be devoid of any moral responsibility and totally insensitive to the families of those murdered by Libya during the last twenty five years. The reasons given to justify the release of al-Megrahi are simply wrong and this Government, if it to save any face both domestically and internationally, should admit it.

ENTREPRENEURSHIP IN WALES 2008

Prior to taking my new post at the University of Wales last summer, I was involved in the Global Entrepreneurship Monitor (GEM) project in Wales for eight years.

GEM is an international project involving 43 countries which undertakes research on entrepreneurship and its links with economic growth.

Since 2000, the GEM Wales team would publish the results openly in the early spring of each year and invite business, government and academic representatives to discuss the implications of the results for the Welsh economy.

Given this, I have been mystified as to why the 2008 results have not been published by the Welsh Assembly Government, given that the data was announced at a meeting in Birmingham at the end of March.

Nevertheless, I have fortunately been able to track down the 2008 GEM report for Wales and the main results are as follows:

• The level of early-stage entrepreneurial activity (TEA) in Wales was 5.3 per cent in 2008 compared to 5.2 per cent in 2007. The TEA rate for the UK as a whole in 2008 was 5.5 per cent – the same as in 2007.
• The proportion of the non-entrepreneurial population reporting that there are good opportunities for start-up in their local areas in the next 6 months has fallen sharply in Wales
• Future start-up expectation rates in Wales have been steadily declining since 2005.
  Female entrepreneurship in Wales (4.0%) is above the UK average (3.6%) while the level of entrepreneurial activity for males in the region is 6.7 per cent. The gap between males and females is among the smallest in the UK.
• The age profile of early-stage entrepreneurship in Wales is slightly more youthful than in the UK overall
  Graduates in Wales are less likely to be involved in early-stage entrepreneurial activity than non-graduates.

So what does this tell us and are there any policy implications for Wales?

Certainly, whilst Wales has closed the gap with the rest of the UK, the rate of entrepreneurial activity in Wales is well below the heights achieved under the Entrepreneurship Action Plan in 2003, when 6.8 per cent of the population were either starting or managing a new business.

Since the EAP was abolished five years ago, Wales has been stuck at around five per cent of the population being involved in entrepreneurial activity. Whilst some may welcome the fact that Wales and the UK are now almost on level terms, Wales has only caught up with the rest of the country because entrepreneurial activity in other regions has actually fallen over the last few years and not because we have improved our start-up rate

The greatest worry for policymakers should be the data for those who perceive good opportunities for starting a business in the next six months. Wales, at 19.5 per cent, is the UK region with the lowest proportion of non-entrepreneurially active adults who think that they could potentially become an entrepreneur.

In contrast, a third of those questioned in Scotland and the South East of England thought that were good opportunities for a new business start. Of course, the less people who are interested in starting a business, the less new businesses you will have in the economy in the future.

Another finding that has to be treated with an enormous amount of caution is the finding that the gap between male and female entrepreneurial activity is amongst the smallest in the UK. This could suggest that we no longer need any support that specifically encourages female entrepreneurs and that we should mainstream such programmes.

This would be a false assumption as the main reason for the gender gap closing is the decline in male entrepreneurship, not the increase in female entrepreneurship. This is a pattern that has been repeated regularly during the last eight years of the GEM study in Wales.

Indeed, given the fact that the recession has hit male dominated sectors such as construction and manufacturing, it would be no surprise if we saw this gap close even more during the next twelve months.

That is why the UK Government have created the Task Force on Women's Enterprise to develop a strategy to support female entrepreneurs and have established a £25 million fund designed to encourage women to set up in business. Yet in Wales we see little activity in providing resources to specifically support female entrepreneurs.

Ten years ago, the Entrepreneurship Action Plan was established as the first regional enterprise strategy anywhere in the World.

Overnight, Wales became a pioneer in the development of policies and practices that encouraged the development of an enterprise culture and, as the GEM results for the early years of this century showed, increased the entrepreneurial activity of this nation. Whilst the GEM study shows that the gap has closed with the rest of the UK, this is merely because the other regions have fallen back whilst we have stood still.

As we emerge out of recession months, Wales will need its entrepreneurs more than at any other time in the last decade as we try and build a new economy following the tens of thousands of job losses, mainly from larger manufacturing and financial operations.

Now is not the time to cut back on enterprise support but to ensure that it forms a central role in Welsh economic policy and is given the resources to make a difference to this nation.

THE DEMISE OF ANEURIN GLYNDWR

Nearly all of my blog entries focus on the economy but I also have an interest in what is going on elsewhere in the Welsh blogosphere.

When Aneurin Glyndwr was launched earlier this year, it promised "a modern platform for the politics of the progressive left".

After the debacle of the Delilah video, its presence on the web has hardly turned out the way its founders, including Peter Hain and Eluned Morgan, expected.

Given that there were only four posts in the whole of August and no "platform" article since April 30th, it gives the impression that the protagonists behind the site have simply given up.

Worst of all, rather than being a site which acts “as a genuine means for people to put politicians on the spot on the difficult issues, obtain answers and directly input into policy deliberations”, it has reverted to simple abuse about its political opponents.

Earlier this summer, David Taylor – one of the creators of the website - said in the Western Mail,

“The one thing the McBride affair did do, or at least ought to have done, is get us to recognise that just going negative is ultimately self-destructive….For the web to play its full part in the UK political arena, the first thing all of us must do is recognise that the era of snide attacks and smear has to end.”

Given this, you have to wonder why we see stories such as:

• Boy George admits savage Tory cuts to come
• David Cameron: 'Twat'
• Toff Dave alone in Europe

The content of the postings continues along the same lines – schoolyard taunts attacking political opponents rather than offering anything positive about Labour's own policies. Indeed, you would be hard pressed to find any posting which argues the case for Labour either in Wales or the UK.

Whilst I am clearly on the other side of the political spectrum, I find that enormously disappointing. The blogosphere is an ideal environment for robust political debate but it would seem that the Labour Party in Wales has reverted back to the abuse of the Arsembly blog but, unfortunately, without the humour.

Perhaps their defence is that they are merely following Leighton Andrews’ advice, who said

“So, here's a message to Welsh Labour bloggers. Most of the Welsh blogs around don't matter in the slightest. None has ever influenced a voter or made a difference to politics.

Unfortunately, the Deputy Minister also said that they should:

“concentrate on building a strong Welsh Labour presence on the web, which speaks to the future and to real people, that sets out a debate about where our party is going and what it is doing in government at UK and Welsh levels, and sets out our dividing lines with the other parties.”

Their failure to do exactly that epitomises the disappointment of what Aneurin Glyndwr has become and reflects the wider state of the Labour Party in Wales.

WAG FAILS ON THE ECONOMY AGAIN

According to the BBC this morning, the Assembly Government's pledge to get 80 per cent of adults of working age in Wales into employment is unlikely to be met.

As this blog pointed out earlier this week, employment is falling in Wales despite the rhetoric of Government politicians over schemes such as ProAct, which Ministers have used as their only tool to try and boost the Welsh economy.

Given that this admission follows the dismal failure to reach their prosperity target of 80 per cent of UK GDP , you have to seriously wonder who is advising WAG on economic policy. Indeed, you would have to question whether they actually have one at all.

DOUBLE DIP RECESSION IN THE UK?

Given the some of the recent indicators such as house price increases, it would seem that the UK is well on the way to follow France and Germany out of recession.

However, some of the statistics released yesterday suggest otherwise.

According to the Bank of England data, loans to businesses fell by 1.7 per cent in July, representing the biggest monthly fall since records began in 1997. Overall, lending to businesses was down 2.9 per cent as compared to the previous year. This is despite the hundreds of billions that have been poured into the banking sector during the twelve months. Unfortunately, most of this money has been hoarded by the banks in an effort to improve their poor balance sheets with very little finding its way to businesses.

This suggests that if businesses are unable to access credit, then many more will struggle with debt and we may see another wave of closures during the winter, leading to a double dip recession and increased unemployment.

However, perhaps the most surprising indicator was that of the Chartered Institute of Purchasing and Supply’s headline purchasing managers’ index for UK, which fell below the 50 no-change mark in August, indicating renewed contraction in the sector.

This manufacturing PMI, a composite measure of activity in the sector which includes output, new orders, employment, suppliers’ delivery times, and stocks of goods purchased, fell from 50.2 in July to 49.7 in August. This in contrast to expectations by City economists who had suggested that it would increase to 51.5.

This all suggests that, contrary to what the Chancellor of the Exchequer predicted recently, we may not yet be in a position to emerge out of the recession unless our fragile manufacturing sector recovers and, more importantly, banks start passing on the billions of pounds of public funding to businesses that need it.

WORKING TO THE GRAVE

The old Welsh proverb states that old age does not come on its own. However, if “henaint ni ddaw ei hunan”, it is clear that old age, when it arrives, is no longer a time when people can relax after a lifetime of hard work, as I discussed on this blog two years ago in 2007.

As noted in the blog entry below, pensioners are getting into even deeper debt, a problem that is more focused in Wales as we have a higher elderly population than the average for the UK.

So what are many retired people doing about this?

Well, the latest employment trend suggests that they are actually going back to work. For example, whilst employment in Wales for those aged below 50 years of age actually declined by 10,000 in 2008, the number of those aged over 50 who were working increased by 9,000, with a third of these being retired people. A quarter of those currently in their fifties now expect to have to work beyond their retirement age.

According to experts at the national statistics office, this pattern - where older people are taking up jobs - replicates the UK as a whole where those who have retired make up the one group where employment has continued to rise throughout the recession.

So why do retired people need to work to get extra income?

First of all, it is clear that they are not getting much from their savings - the interest on the savings accumulated throughout a lifetime of hard work is currently at a record low.

Secondly, for those lucky enough to have private pensions, the actual value of pension funds have fallen dramatically, meaning that many will have to wait until the stock market recovers to get any decent return on their retirement income

Therefore, it is not surprising that an increasing number of pensioners are carrying on working as the other alternative is a drastically reduced income.

Worst of all, when incomes are going down for pensioners, their costs are going up.

A recent study for the Institute of Fiscal Studies showed that, since April 2007, they have seen their gas bills increase by 55 per cent and electricity charges by 36 per cent. As a result, pensioners are now using 10 per cent less energy to be able to afford their rising bills, and with over 20,000 pensioners having died during the cold spell of 2007, we may see a major disaster this winter if nothing is done to address this issue urgently.

As we are living longer, this is a situation that the vast majority of us will have to face sooner or later.

To date, the political parties of this country have yet to come up with any workable solutions to deal with growing problem. With an election looming in ten months time, it is about time they did and ensured that those who have reached retirement can at least live during their golden years in dignity and with access to the basic services which we all take for granted.