A road too far?

On Wednesday, the Deputy First Minister announced the National Transport Strategy for Wales with the main headline being the cancellation of the M4 relief road, a project with an estimated pricetag of £1 billion.

With the inevitability of significant reductions in the amount of funding coming from the Treasury to Wales during the next few years, this was a relatively easy decision for the Assembly Government to make in order to focus dwindling resources on other areas.

The main question, of course, is whether it was the right decision for a Welsh economy which remains firmly rooted at the bottom of the UK’s prosperity league table and needs every advantage it can get.

Certainly, business groups such as the CBI, FSB and the Chambers of Commerce were outraged at the decision, remaining convinced that the road was the "most important scheme needed to take Wales' economy forward".

Whilst the cost of the road has now become prohibitive at a time of austerity, the delays by politicians and civil servants in making a decision regarding this scheme means that many of the alternatives to the relief road - such as encouraging local drivers not to use the motorway, upgrading the southern distributor road south of Newport, and opening a seven-mile private dual carriageway through the Corus site at Llanwern – have been delayed.

This will, undoubtedly, result in increased congestion within the South East Wales area which, in turn, will drive up the cost of doing business in the region.

More generally, there will be disappointment that there is no long term and visionary solution to the problem of traffic congestion such as that experienced on the M4 around Newport.

Indeed, if the government and business groups were actually serious about solving this problem, then they would look to adopt a far more radical approach to that of just throwing money at it.

For example, businesses could encourage staff to avoid rush hour traffic altogether by offering staggered work hours in which staff can arrive at different times as agreed with their employer, thus reducing the ridiculous amount of commuting that goes on during the peak hours of morning and evening. Such practices are widespread within major economies such as the USA or Germany but have yet to be adopted widely in the UK.

Research has shown that a third of all schoolchildren now go to school by car, a figure which has doubled in the last twenty years. The school run by parents across the UK accounts for one million tonnes of carbon dioxide emissions each year. This adds enormously to congestion around traffic hotspots such as Newport where the roads are practically empty during the school holidays at peak hours.

This could be eased by staggering the opening times of schools (backed with pre and after-school clubs) so they do not open at the same time as the daily commute. This could make a real difference.

There is also the alternative of providing a properly subsidised school bus system on the American model which would, according to some, cut 130 million car journeys a year across the UK.

Certainly, these solutions would cost considerably less than the estimated £1 billion bill for a new relief road.

Government also needs to focus more resources on getting freight off the roads and onto the railway system. Whilst this is an issue which the National Transport Strategy says will reduce greenhouse gas emissions, air and noise pollution, there is almost no funding being made available to support the development of the infrastructure needed to make this work.

For example, the Freightliner terminal in Cardiff is ideally placed to enable transport companies to bring goods into South Wales and then distributing them around the region and yet little funding is being made available to support this site which could help reduce the amount of traffic coming through the Newport area at peak times.

Therefore, rather than dealing with the issue of why there is too much traffic at a certain time of the day, the only response to date has been to assume that we need more roads to deal with the problem. That is clearly not the only solution and perhaps it is time for a bit more lateral thinking from politicians and policymakers to deal with the growing economic and transport challenges we face in Wales.

Two sides of the coin

Once the latest unemployment figures had come out, I didn't think it would take too long for the Plaid Cymru press machine to start praising the Deputy First Minister's 'decisive actions' in 'driving forward' the ProAct scheme.

This is despite the fact that it actually falls under Jane Hutt's skills portfolio rather than his. So much for partnership working across the coalition government when they fall over themselves like dogs over a bone to claim the credit for this programme.

Of course, I suppose I should be flattered, given that this blog suggested a scheme such as ProAct as long ago as November, well before the economic summits even got round to discussing this issue.

As I said then,

"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.

It would also provide a boost to the business and training support sector of the Welsh economy at a time when firms may, inevitably, be cutting back on this aspect of their business".

Who would have thought that this Labour-Plaid Government would have taken any notice of advice from a Tory of all people?

Certainly, Pro-Act has been useful for some companies but not all have seen the value of participation - just ask the 390 workers facing redundancy in the Deputy First Minister's own backyard at Angelesey Aluminium.

However, just one final thought before some people get carried away with the latest statistics which many experts still consider a blip.

The Welsh Assembly Government seems very eager to claim credit for the small fall in unemployment of 1,000 people in the latest Labour Force Survey.

However, let's not forget also that under their stewardship of the economy, there has been an overall net increase in Welsh unemployment of 31,000 during the last twelve months.

When they start dealing with that properly, then they can start opening the champagne bottles.

Much ado about nothing?

As Valleys Mam notes, there seems to be an enormous amount of fuss generated about the expenses of International Business Wales in the press today.

Far be it for me of all people to defend the Welsh civil service (that would be a first!) but there seem to be some incongruities in the claims that have been released under the Freedom of Information Act.

In the Western Mail, Kirsty Williams is quoted as saying

"Every taxpayer in Wales deserves an explanation from the Labour-Plaid Government. While we’re in the middle of a recession, it’s disgusting to know that public officials are flying first class, staying in the most expensive hotels, eating in the best restaurants – all at the swipe of the Welsh credit card."

For example, I haven't a clue whether there is actually any evidence for "flying first class" but as far as I am aware, it is civil service policy that staff take business class flights for all long haul flights to destinations such as the Far East and the USA.

In addition, Virgin Atlantic don't actually have first class, only business class, and that the £36,000 spent with the airline would account for around 12 flights between the UK and the USA (we are not talking Ryan Air here!). Similarly, £24,000 with Cathays Pacific would amount to around six business class flights from the UK to the Far East.

As I say, some strange conclusions but nevertheless a very good headline for the Lib-Dems.

p.s. Having visited the place, I would also doubt if "Margarita Murphy's" - one of the restaurants frequented by IBW staff according to the WM - can be classified as a "high-end NewYork eatery" given that the most expensive meal is a steak at a cost of $17 (which is roughly a third of the price that most AMs could claim for daily meals before Sir Roger Jones' review stopped this practice).

Mixed messages for the construction industry

Last week, a story in the Western Mail suggested that

"nearly 30,000 jobs could be created in the Welsh construction industry in the next five years.....the research from the from the Construction Skills Network forecast that employment in Wales can bounce back more quickly than any other part of the UK".

However, this optimistic prediction is in complete contrast to figures published by the Welsh Assembly Government show that:

• Production output in Wales for Q1 2009 fell by 7.2% compared to the same quarter in 2008. The UK index fell by 5.1% over the same period
• The index of construction for Wales for the last four quarters fell by 13.8% compared to the previous year. The UK index fell by 2.8% over the same period
• Construction output in Wales for Q1 2009 fell by 4.6% compared to Q1 2008. The UK index fell by 2.4% over the same period

The Ashes in Cardiff

Having been walking past Sophia Gardens for the last three days and hearing the shouts of the Barmy Army echo across the Taff, I am finally going to see the Ashes Test Match today although, typically, rain is promised.

It is still an amazing thought to think that the first Ashes Test match between England and Australia has been held here in Cardiff and not in Lords, Old Trafford or any of the other traditional test grounds around the country.

Of course, the exposure for Wales as a result of the test match has been tremendous and a welcome boost for Cardiff business at a time of recession. Some of the local firms have done tremendous businesses with pubs and restaurants reporting over 200 breakfasts every morning for supporters!

Whilst, there are estimates that the Sophia Garden development could generate £80 million for the Welsh economy during the next five years, the real fact is that millions of people who didn't know about Wales will have had a highly favourable view of the capital city and the local people.

In particular, the world's largest group of middle class consumers - the cricket mad Indians - will probably have seen the fantastic scenes from the camera on the BetFair blimp above the ground.

This has provided a spectacular bird's eye view of the beauty of the city's parks, Cardiff castle, and the walk down to the Millennium Stadium with Cardiff Bay in the background. What we need now is for a massive follow-up campaign to the Indian sub-continent to attract tourists to Wales as a result of this sporting event.

If the rain does come today, the match will probably peter out into a draw but whatever happens, Wales is most definitely the winner in this first Ashes Test match.

Coulson, News International and the Labour Party

As Sun Tzu said, victorious warriors win first and then go to war.

In this case, it would seem that the Labour Party has failed this simple test of political strategy. It has tried its best to get this story rolling through its friends in the Guardian and has failed miserably, despite the BBC's best efforts to keep the story alive.

Of course, the biggest mistake is that they have taken on the world's most powerful media mogul to simply get back at the Tories over the Damian McBride affair.

Well, guess what.

Rupert Murdoch is not some third rate spin merchant and Labour have now ensured that the whole might of News International will, rightly or wrongly, be turned against them over the next ten months up to the next general election.

One can only imagine the files his organisation has on senior politicians within the Labour Party. The storm is most definitely coming.

£41 million is a drop in the ocean

An additional £41 million fund to provide an "economic stimulus" to help Wales deal with the recession has been announced by the Assembly Government.

£41 million looks like a lot of money and I am sure that politicians will make the most of this.

However, let's not forget that, compared to the funding available from the Convergence Fund, it is merely a drop in the ocean.

According to the latest information from the Welsh European Funding Office, only 35 per cent of the £1.81 billion available has been committed to projects.

This means that over £1.1 billion remains to be committed to projects during the period 2010-2013 or around £200-£250 million per annum.

The question is whether how quickly this remaining fund will be spent this year to counter the recession? More importantly, is there any effort by Ministers to focus on fasttracking capital projects to ensure they have an immediate impact on the recession in Wales?

Culling the quangos

Both the Conservative Party and the Labour Government have stated today that they intend to cut the number of quasi-autonomous non-governmental organisations (otherwise known as quangos) to ensure that public funds are used more efficiently during the next few years.

Of course, this would apply only to England as Wales had its own cull (or bonfire) a number of years ago. However, the absorption of the Welsh Development Agency (WDA) and the Wales Tourist Board into the Welsh Assembly Government is a move that was regretted by individuals from across the political spectrum.

For example, Peter Hain criticised the closure of the WDA, stating that it was ‘a successful, worldwide brand, the most successful development agency ever'. Dafydd Wigley, the former leader of Plaid Cymru, is on record that he remains opposed to the merger of the WDA with the Assembly Government.

The question, of course, is whether the move was driven by the real need to improve public services or was merely an act of revenge by politicians who had always despised the power and status of these non-elected bodies?

Professor Kevin Morgan - the Chairman of the Yes for Wales Campaign – suggested that the decision to cull the quangos was not only related to public service reform but had wider implications for the new fledgling devolved nation that is Wales.

In a subliminal paper on the matter, he raised the critical question of whether Wales will “become a less pluralistic, more state-centric society in the wake of the decision to abolish six quangos and merge their functions with the WAG? In other words, is there a creeping centralism at work in Wales which belies the notion that devolution creates a more robust and more accountable governance system?"

Of course, some quangos still remain in Wales, including the Welsh Language Board and the Higher Education Funding Council for Wales.

Some in the Labour Party believe this is an anachronism given that both could easily be managed from within the culture and education portfolios. Others would argue that issues as important as language and higher education need to be at an arm’s length from Government.

The current Assembly Government would argue that the prosperity of Wales has benefited by the abolition of the quango state although many companies have told me that, despite the best efforts of the civil servants, the whole process of business support has become risk-averse and political, with many senior managers delaying decisions because they are more worried about what the Minister might say rather than whether their actions will have a positive effect on the Welsh economy.

Perhaps the time has come, as Dafydd Wigley said during the last election campaign, for a thorough investigation by the Auditor General for Wales to see whether the promised benefits of the merger have been achieved. Given that we are in the middle of a recession, such a review is highly unlikely over the next few months.

However, as April 2010 is the fifth anniversary of the bonfire of the quangos in Wales, there could no better time for the Minister for Economic Development to order the detailed review requested by his predecessor as Plaid Cymru leader. As well as potentially showing the benefit of public sector reform, it would determine, once and for all, whether the abolition of the WDA and other similar quangos has had any significant and lasting impact on the prosperity of the Welsh economy.

The future of Welsh manufacturing

There were mixed messages for the Welsh manufacturing sector this week.

In North Wales, 200 workers at the Air Products factory in Wrexham have lost their jobs as the company, which produces gas plant equipment, is moving to China.

At the same, Anglesey Aluminium has offered voluntary redundancy to 140 staff as they play a high-stakes poker game with the British Government to try to obtain cheap power for their plant.

If, as many expect, this fails to materialise, the result could be the final loss of 500 well-paid jobs in the poorest county in the UK – an outcome which could devastate the economy of Anglesey.

In other parts of Wales, there was better news.

Hundreds of jobs were saved when the Ministry of Defence awarded General Dynamics, based in the Gwent Valleys, a £231m contract to upgrade the Bowman military communication system.

In addition, Compact Orbital Gears of Rhayader, which manufactures and supplies high-quality engineered products and services, has safeguarded 25 aerospace jobs after winning three contracts in the past few months.

Given these different messages, the jury remains out as to whether manufacturing is recovering sufficiently, although it is clear that most of the effort is now going into safeguarding jobs rather than creating new ones. There are still worries over what will happen to some companies and their previous commitment to the Welsh economy.

For example, few believe that Tata will keep both of its steel plants open in Wales, which could mean a major blow to the economy if either Port Talbot or Llanwern were to close.

So what is the future for Welsh manufacturing?

The statistics show that the output from the sector in Wales has declined by more than 5% during the last decade, while most other sectors have grown.

In 1997, manufacturing in Wales was responsible for 28% of GVA (the index which tracks prosperity levels), but had fallen to 18% by 2006, the same as business services. In addition, there are over 60,000 less manufacturing jobs in Wales, with many more expected to be lost by the end of the year.

Certainly, the days of being able to attract large inward investment projects to Wales are over and our economy must adopt a very different approach if Welsh firms are to succeed in a highly-competitive environment.

The future of manufacturing will no longer be based on attracting jobs based on the lowest salaries, but on higher value-added factors such as skills, innovation and productivity.

That is hopefully the message that International Business Wales is sending out across the globe, and I was heartened to read that energy companies in the USA are expressing a preference for setting up operations in Wales because they want to work alongside our higher education sector.

At a time when every other country is looking to the world’s largest economy for any sign of new investment, we must take every opportunity to show that we have world-class opportunities and, more importantly, that we are ready to work with the best companies in the world to ensure that they invest in Wales.

One can only imagine the impact that investments from global giants such as Google or Microsoft would have on this nation and its ability to attract other inward investors.

You can just imagine firms across the world saying that “if Google and Microsoft have come to Wales, why shouldn’t we?”

We also mustn’t forget that we have an indigenous manufacturing sector in Wales that, despite the recession, has shown enormous resilience in surviving through the last six months.

However, this sector must now start preparing for the upturn and government, where possible, must ensure that when the time comes, Welsh manufacturing firms are equipped for the competitive battles that will resume once this recession is over.

If government is to intervene in developing our indigenous producers, then it must develop a coherent manufacturing strategy which provides more support for research and development, skills and new process technologies.

It must encourage companies to invest in capital equipment and the training that will improve their competitiveness and enable Wales to close the productivity gap with the rest of the UK.

Despite the decline in its relative importance, I believe that manufacturing has a vital role to play in creating a world-class economy in Wales.

However, we must take the sector more seriously and ensure that the resources are provided to close the productivity gap with our global competitors and ensure a high-technology, high-skills future for the manufacturing industry in Wales

BBC expenses - a reflection

Just when you thought that those who live off the public purse had finally been told that their behaviour is unacceptable, along comes the BBC’s top executives with their expense claims for corporate entertainment, hair styling, insurance claims for a stolen handbag and champagne and flowers for their ‘stars’.

Don’t get me wrong. I don’t think anyone objects to the fact that people should get remunerated for expenses incurred as a result of their job. The main objections are when people push the boundaries of what is acceptable, especially when public funds are involved.

At a time when the majority of workers in the UK are facing pay freezes, pay cuts or even redundancy, this type of behaviour has brought the salaries of those paid by the public purse into sharp focus.

During a week when some staff at British Airways had agreed to work without pay for a month to save their jobs, we discovered that not only were they milking their own expenses system, but that the top fifty executives in the BBC cost the licence fee payer nearly £14 million last year.

As we enter an age of new puritanism brought on by the ravages of the worst recession since the Second World War, it only right that taxpayers asks how their money is being spent by the public sector.

This is not the politics of envy but the politics of accountability and we should set new standards for those working within any organisation which is dependent on the public purse, which includes not only government, but also the BBC, S4C, local authorities and health trusts.

If the top executives of such organisations were in the private sector, they would be rightly rewarded for creating wealth for the shareholders who have invested in their company but, equally, would find themselves out of a job if they did not perform as expected.

Is the same true of those executives within the higher echelons of the public sector who have secure jobs for life, pensions some of us can only dream about and salaries which are higher than some of the most influential people in the land?

Indeed, many of those executives within the BBC were actually earning an annual salary that was higher than that of the Prime Minister himself. In Wales, the chief executive of S4C gets a salary of £156,000 as compared to the £130,000 earned by the First Minister every year.

The usual line that is peddled out for such differences in salary is that those working for public organisations would be paid far more if they were in the private sector.

Who are they trying to kid?

First of all, many of those in these posts have been in the public sector most of their working lives and have been promoted internally. Secondly, if the private sector was more attractive, then many of these individuals would have jumped ship long ago except for the simple reason that they know in their own hearts that they simply wouldn’t cut the mustard and, unlike the public sector, failure would not be an option.

More importantly, I doubt if there are any vacancies within the private sector at the moment and if so, there are hundreds if not thousands of better applicants with direct experience of working in the real world of business.

Of course, if anyone wanted to test whether the public sector is paying too little, then advertise the current senior jobs at half the salaries being paid. I can absolutely assure you that not only will you get a deluge of candidates with the right experience and track record but, in most cases, they would be a massive improvement on the incumbents.

Recession is deeper than originally estimated

According to the latest official data, the UK economy contracted 2.4 per cent in the first quarter of 2009, its biggest quarterly decline in 51 years.

The data was far worse than the estimate of a 1.9 per cent fall and was blamed mainly on weaker output in the construction and manufacturing sectors.

This probably kills stone dead any immediate recovery in the economy by the end of the year, despite the predictions of the Chancellor and means that we are unlikely to see any significant growth in output until 2011 at the earliest.

Welsh Devolution and the Conservative Party

Tomorrow, David Melding launches his new book "WILL BRITAIN SURVIVE BEYOND 2020?"

According to the Western Mail today, it looks like it will, at the very least, reignite the debate within the Conservative Party over devolution in Wales, especially given Cameron's acceptance of devolution in Scotland late last week (an announcement that was largely ignored by the Welsh press and commentariat).

I was particularly taken by the following statement:

"But I think where we went wrong was we should have spent more time in government thinking, how do we give legitimate help to those people within our United Kingdom who want to have a greater expression of self-government?"

Clearly, this is a challenge that should be taken up by the Conservative Party in Wales and David Melding has decided to step up to the plate with his views on this critical issue.

David is probably the most cerebral of all the Assembly Members and he will not have written this book without thinking long and hard about the consequences.

I made clear my views on devolution last year at the National Eisteddfod, and posted on it here. Indeed, as I said at the time

"Contrary to the nationalist viewpoint, the creation of a Welsh Parliament is a not a step towards independence but a move towards equality within a Union of Parliaments within the United Kingdom, a Union that would be strengthened by having a Welsh ’Senedd’ with full law-making powers. "

Given that statement, you will not be surprised to learn that I am broadly supportive of David's arguments.

Indeed, the case could be made for David Cameron, once he is Prime Minister with a sufficiently large majority, to push through legislation to grant further powers directly to the Assembly without a referendum as long as it was part of a greater constitutional reform of the United Kingdom which would include fewer MPs and a new 'English Parliament' at Westminster.

This would instantly solve the constitutional mess created by the Labour Party, kill stone dead the issue of 'independence' for a generation and allow the next Assembly election to be fought on policies that would actually help Wales get out of the mess it is in.

I am meeting David tonight to discuss our economic policies for the next Assembly election but I am sure our conversation will also touch on his book and its consequences for the Conservative Party in Wales.

The Day Job

Next week, I celebrate my first year as Director of Research and Innovation at the University of Wales.

Most of my time has been spent in establishing this new area within the university, including the creation of the Global Academy and the successful implementation of the £11.4 million Prince of Wales Innovation Scholarships project. The last few weeks have involved the writing of a business plan for another major programme of innovation (completed last week) as well as a new research centre.

However, the job has also given me impetus to get back to writing research papers in the field of entrepreneurship and innovation with colleagues from the UK and the rest of Europe.

Those not involved in academic life might not appreciate this but such output is the currency of an academic career and I have, admittedly, let it slip over the last couple of years.

Still, I am more than pleased that, so far this year, five have been published/accepted for publication (including two in the top journal, Regional Studies) and we are working on another eight papers to be submitted during the next six months.

The papers published are as follows:

• "Nascent entrepreneurial activity within female ethnic minority groups", Caleb Kwong, Piers Thompson, Dylan Jones-Evans and David Brooksbank, International Journal of Entrepreneurial Behaviour & Research, Vol. 15, No. 3, pp. 262-281

• "The Spatial Dispersion of Informal Investment at a Regional Level: Evidence from the UK", Dylan Jones-Evans and Piers Thompson, European Planning Studies, Vol. 17, No 5, pp. 659–675 (2009)

• "Women and Home-based Entrepreneurship - Evidence from the United Kingdom", Piers Thompson, Dylan Jones-Evans and Caleb Kwong, International Small Business Journal, Vol. 27, No. 2, 227-239 (2009)

• "Transferring good practice beyond organisational borders: lessons from transferring an entrepreneurship programme" M. Klofsten, P. Heydebreck and D. Jones-Evans, Regional Studies (forthcoming), 2009

• "Entrepreneurship amongst minority language speakers - the case of Wales", Dylan Jones-Evans, Piers Thompson and Caleb Kwong, Regional Studies (forthcoming), (2009)
  

UK will have the worst public debt in the developed world by 2017

Yet again, the Governor of the Bank of England has warned that unless public debt is reduced dramatically during the next parliament, the UK economy will face serious problems for the next decade.

In evidence to the Treasury Committee, Merfyn King called for greater ambition in reducing public borrowing and, most tellingly, that the Government’s plans needed to have greater ambition in cutting public borrowing.

Worst of all, the Governor made the astonishing statement that he was more uncertain than ever as to whether the UK economy would come out recession quickly.

This last statement seems to be backed by the Organisation for Economic Cooperation and Development (OECD), which revised down its forecast for the UK economy in 2009, warning that we are in a sharp recession, with a further shrinkage of 4.3 per cent in 2009 followed by no growth at all in 2010.

Worst of all, the OECD suggested that even if government borrowing is reduced by 1% of GDP per year for the next seven years, the UK will still have a gross debt-to-GDP ratio of 125% by 2017, one of the largest in the developed world.

It would seem that whether Gordon Brown likes it or not, cuts in public expenditure are inevitable.

The question is how he can do a political u-turn after yesterday's performance at the dispatch box where he denied that this would need to happen and that he would be increasing expenditure over the next few years.

Ageing population and its implications for Wales

Did an interview yesterday with Aled Blake of the Western Mail on the implications of an ageing population for Welsh business

"WALES has to wake up to the challenge of an ageing workforce with more than 40% of the population likely to be aged 50 and over by 2031.
That was the warning from experts and older people’s charities last night as official statistics show that the population of over 50s in Wales increased by 15.6% in from 1991-2007, and stood at 1.11 million in 2007. That means it is already at 37% of the overall population and is higher than the UK figure of 34%, according to the data published by the Welsh Assembly Government.
The number of people aged 50 years and over in Wales is projected to increase by a further 28% by 2031, to 1.42 million or 43% of the population – increasing mainly due to the rise in life expectancy for men and women over the past 30 years.
Between 1976 and 2006 the life expectancy at birth has increased by 8.4 years for men and by 6.3 years for women. The population aged 85 and over is projected to more than double in size between 2007 and 2031 to 156,400.
The effect of such population change on the economy could prove costly to the Welsh economy, with fewer people working and paying taxes despite more of a reliance on state support.
Dylan Jones-Evans, director of research and innovation at the University of Wales, argued that there is a growing case for increasing the working age limit from 65 to 70.
He said: “The big challenge that the UK as a whole faces is that there will be fewer adults working to pay taxes and support this ageing population. If we don’t change the limit at which we retire then there are going to be fewer people able to fill the jobs available. You are then back to the issue of bringing people in from outside Wales and the UK.
“That is the major challenge, not only is there an ageing population that is living longer, you also have a lower birth rate and as a result the potential people of working age in the population declines year in year. You will to struggle to find the right type of people to fill these vacancies.”
Prof Jones-Evans said the one way of addressing that problem was to raise the working age limit. He went on: “Clearly people are living longer and what we have to do is encourage greater activity among our older people.
“What we should be doing is encouraging businesses to develop more flexibility geared towards older workers to ensure they can continue to make a contribution.
“We afford flexibility and flexible working to parents, so why should we not be doing the same for older people. They might be able to job share and continue to do the jobs they were doing before.”

Full article can be found here.

Public debt increases by £20 Billion every month

Last week, amongst the continuing furore of MPs expenses, many will have missed the publication of statistics which will have a major influence on the outcome of the next general election.

The public sector net borrowing requirement (PSNBR), which equates to the amount borrowed monthly by the government, hit £19.9 billion pounds in May. This represents the highest level of government borrowing since records began.

Worst of all, it was higher than expected, leading economists to suggest that the total amount of public borrowing this year, estimated at £175 billion in the Chancellor’s recent budget, could hit an unprecedented £200 billion by the time of the next general election. This equates to an additional £7500 of debt for every household in the UK.

This growing debt is down to a combination of factors.

First of all, we have lower tax receipts as companies make little, if any, taxable profit and lower levels of personal taxation receipts as hundreds of thousands of workers are laid off. For example, the Office of National Statistics reported that income tax revenues were 11% lower than in May 2008, value-added tax (VAT) receipts were 18% lower than the same month last year and the corporate tax take was a worrying 27% down compared with a year ago.

Secondly, we have higher levels of government spending as a result of 1.54 million people claiming unemployment benefit, a figure that is set to increase during the next few months.

This ‘double whammy’ means that the total amount of public debt could be over a trillion pounds within a few years unless there is immediate action to cut public sector expenditure.

Certainly, such a message is one that many politicians seem afraid to state publicly.

However, with nearly every household in Britain having to tighten its belt during the worst recession since the Second World War, shouldn’t our government be doing the same?

Well, it certainly doesn’t seem to think so, with Labour politicians trying to sell us all the idea that, if re-elected, they will continue to increase public expenditure whilst the Conservatives will indulge in spending cuts. This is despite individuals as prominent as the Governor of the Bank of England warning that unless public debt is reduced dramatically during the next parliament, the UK economy will face serious problems in the future.

The question, therefore, is whether anyone will believe any politician who says that they will continue spending or, to put it another way, continue to increase the mountain of debt already incurred in this nation.

The massive public outcry over the expenses issue shows that the voters of this country have had enough of politicians being, as the late Alan Clark once said, ‘economical with the actualite’.

The simple truth is that this government has spent with an abandonment worthy of most lottery winners without thinking once about the consequences of its profligacy. Despite this, it continues to try and convince the public that if it spends more of our money, then everything will be okay.

How stupid do they think we are?

It is about time that opposition politicians exposed this Labour dissembling for what it is really is, namely a last desperate attempt to cling onto power. All they have to do is ask Gordon Brown and the rest of the Labour administration one simple question, namely who is going to pay for the increase in public expenditure when your government has taken this country into the deepest debt in its history?

As our public debt increases by £20 billion every month, it is time that this government took full responsibility for its actions and started to balance its budget in the same way that many households across the country are having to do as a result of this recession.

If they do not, and continue to treat the public like children, then the future of this country’s economy doesn’t bear thinking about.

Beckett for Speaker? How out of touch are our MPs?

Just when you thought it couldn't get any worse in the House of Commons after the disgraceful conduct of MPs and their expenses, we now have the unbelievable scenario of the election of Margaret Beckett to the role of Speaker.

Don't they get it?

How on earth could anyone in their right mind vote in a woman who is totally out of touch with the voters' concerns over the behaviour of MPs and in a total state of denial about her own expenses? Remember the £600 claim for hanging baskets and pot plants?

If you want only one reason as to why she should not become the Speaker who will clean up the House of Commons, just remember one place and one date - the Question Time Panel, 14th of May 2009.

The Appliance of Science?

Could this be the week the Welsh Assembly Government finally gets its act together over science, technology and innovation policy?

If you read some of the headlines in the press, you could be persuaded that could well be the case.

After years of prevarication, WAG finally announced the appointment of a chief scientific adviser, directly accountable to the office of the First Minister, to advise WAG on all matters scientific.

Given that there seems to be a complete dearth of scientific knowledge among Assembly politicians, this post is long overdue and is a small victory for many of us who have campaigned to get a high-powered scientific expert into the heart of Welsh policymaking.

Indeed, six-and-a-half years have elapsed since I recommended the creation of such a post in evidence to the Economic Development Committee on the state of research and development in Wales.

One can only hope that with WAG finally giving in to the logic of creating such a post, the right person is appointed who will drive forward the research agenda in Wales, especially given the policy vacuum that has existed in this area among existing public bodies.

We then saw the announcement by Swansea University on the proposed establishment of a second campus which will, according to the institution’s press release, create 11,000 jobs and generate £3 billion into the local economy over the next 10 years.

If approved, this “science and innovation campus” could, in principle, become the largest knowledge-based economy in Europe. Of course, its future success is dependent on a whole range of factors, including attracting tens of millions of additional funding, support from major companies and a political will to make it happen. However, at least Swansea University cannot be faulted for its ambition in developing a new approach that links research and development activities directly into the regeneration of the local economy.

Finally, as discussed yesterday, the Welsh Assembly Government has given Airbus in Broughton a £28m grant to secure its future in the region at a time when even the UK’s most advanced manufacturing facility was considering further job cuts in the face of the recession.

More importantly, the investment is focused on the development of new composite technologies which will revolutionise aircraft design over the next decade and is intended to create a world class centre of expertise in this area.

I only hope some of this money will find itself into local institutions such as Glyndwr University, which has itself invested heavily in attracting professors in areas such as composites and advanced manufacturing.

Building scientific capacity to work alongside firms such as Airbus is equally as important as funding the companies themselves and our higher education institutions have a vital role to play in this regard.

On reflection, this therefore seems like good news all round for the science and technology community but there is much more that can be done to ensure we maximise the opportunities that are available to develop a value- added knowledge-based economy in Wales.

Certainly, one area in which there has been a distinct lack of immediate action is that of the approval of European Convergence Funds to projects involving the university sector.

Reflecting the European Commission’s Lisbon agenda priorities to develop a knowledge-based economy, more than 313 million euros has been committed, over the period 2007-13 to support innovation-related projects.

Yet, since the programme started in January 2007, only two projects from the higher education sector have been approved by the Welsh European Funding Council (Wefo), part of the Welsh Assembly Government.

Of course, those applying are saying the process of approving projects is too slow, bureaucratic and cumbersome with some projects having waited two years for approval.

However, in response, those managing the process have indicated that the university sector is not getting its act together and not responding quick enough to requests from Wefo for further information to ensure that the projects are getting approved.

Whoever is right, the truth of the matter is Wales needs its university sector to play a full role in developing successful European projects in the fields of technology and innovation if it is to create the knowledge-based economy of the future.

Rather than arguing over who is wrong or right, perhaps it is time for politicians to go in there and bang a few heads together to ensure this problem is unblocked quickly. Certainly, if the delays continue, it will be the Welsh economy which will be the loser.

The creation of a chief scientific adviser and the funding of composites development at Airbus, alongside the ambitions of Swansea University, are all a step in the right direction for the future of the Welsh economy.

However, the hundreds of millions of pounds worth of European Funds provided to support universities’ development of their innovation potential is a competitive advantage other parts of the UK simply do not have.

We would be foolish not to ensure this money is spent now on ensuring we create the science and technology infrastructure that is vital to the future prosperity of this nation and to putting the economy in a great position when we finally come out of the recession.

Airbus hits the jackpot

News has broken that Airbus in Broughton has been awarded a £28 million grant from the Welsh Assembly Government to ensure the future of hi-tech wing production in Flintshire and to create a new centre to develop composite wing production.

Some will question why the Welsh Assembly Government is putting £28 million from its funds into one large business and which amounts to over 10 per cent of the entire business support package for Welsh business? Won't other large firms, such as Anglesey Aluminium and Corus now start asking for similar amounts to secure future jobs at their plants, thusreducing the funds available to Welsh business?

Others will ask why the Assembly Government had to pay for this and why Lord Mandelson didn't come up with the additional money from his new super department to support what is essentially a UK operation (especially when Broughton employs thousands of people from outside of Wales).

Finally, the more cynical will say that Airbus has played the Assembly Government perfectly and squeezed a massive grant from them by suggesting, at a time of recession, that the leading UK manufacturing plant which coincidentally is based in Wales, will shed hundreds of jobs.

While all of these arguments have merit, we mustn't forget that Airbus is the real jewel in the Welsh economy and if the investment secures the future of this plant for the next decade, then it is worth every penny. For once, the Assembly Government has done the right thing as I cannot even begin to contemplate what the alternative would have been to Airbus closing down.

However, I just hope that Rhodri, in giving such a large amount to Airbus, has ensured that some of this money will go to building up capacity within Welsh universities in the area of composite materials and that Airbus will have to support similar development within its supply chain of Welsh companies.

Gordon Brown let us down

As he fought for his political life last week, the Prime Minister said the main reason for staying in power was to ensure that his government could continue with their efforts to promote fairness across society.

To quote the man himself:

“What would people think of a Labour government faced with an economic crisis ... if ever we walked away from them at a time of need? We are sticking with them and working with them…if we believe that people should be responsible and people should act fairly and we should be fair to others, then it is our duty to make sure in our politics, in our economy, in our society, that’s what happens.”

This message of reducing inequality in society would have been honourable if only the Labour Party, under his economic stewardship, had not failed so miserably at this task since being in power.

Consider what has happened since the Labour Party came into power in 1997.

Thanks to the implementation of one of their key educational policies – the introduction of university tuition fees - the proportion of working class students going to university has actually declined, despite more higher education places being made available.

In terms of the differences between the relative wealth of different parts of the UK, the prosperity gap between London (the richest) and other parts of the UK has widened in the period 1997-2007, with the poorest regions such as Wales among the hardest hit.

Indeed, a report by the influential Joseph Rowntree Foundation has shown that much of the temporary economic gains recently experienced by the most deprived areas in Wales have all but evaporated as they are now experiencing unemployment and benefit claims at levels last seen during the 1990s.

This is despite spending more than £2.5 billion of funds provided by European Objective One funding and matched public and private sector contributions, as well as hundreds of millions of more of Assembly money during the last ten years.

Finally, and most damningly, statistics from the Government’s own Department for Work and Pensions has shown that Britain, under Gordon Brown, is a more unequal country than at any time since modern records began in the early 1960s. Since the 2005 election, the incomes of the poor have fallen and those of the rich have risen. This is despite the introduction of the minimum wage.

The PM and his advisers really do live in a fantasy world if they think that their policies, over the last twelve years, have been fair to the poorest in our society. Indeed, their mismanagement of the economy has made things worse, and not better, for millions of people in this country.

Of course, Labour politicians are quick to point out that the UK recession is everyone else's fault. When that doesn't work, they hark back to the 1980s and 1990s and say that it is all the Tories' fault.

Well, it doesn't wash anymore.

The growth in wealth gap has happened under Labour's watch and started well before the banking crisis engulfed this country.

The simple fact is that Gordon Brown and his party have squandered hundreds of billions of pounds of taxpayers' money on initiative after initiative.

Yet, despite this largesse, they have proven to be so incompetent that the poorest in our society are not only no better off, but in some instances, much worse off (and that was before we experienced the economic woes of the last few months).

In my honest opinion, the Prime Minister shouldn't resign just because he is losing internal support within his own party; he should resign because he has let this country down and broken his promise to help the poorest in our society.

That is the main reason why he should go, and go quickly.

Proact Bingo

An insider tells me that there is a new game that is being played by attendees at any meeting with Assembly Ministers, namely ProAct bingo

i.e. how many times the Minister or his/her officials will actually mention the ProAct scheme during the meeting.

It should be funny but it isn't, especially when the Assembly Government has actually failed to come up with anything else of note to deal specifically with the recession since the ProAct scheme was announced over six months ago.

All of their other initiatives are either those that were planned years ago, such as the JEREMIE fund, or rehashes of previous schemes such as the "new" local investment funds which are a copy of the funds run by local authorities under the Objective 1 scheme.

It demonstrates, unfortunately, that the Labour-Plaid Assembly Government has completely run out of ideas only halfway through its term and that the recession will continue to hit the country hard over the coming months, despite billions of European funding and the so called 'devolution dividend'.

And if anyone doubts that things are not going to get worse, then the last week has demonstrated that companies are continuing, or are considering, shedding jobs all across Wales:

• Anglesey - 500 staff at Anglesey Aluminium have all received letters warning them that their jobs at the Holyhead plant are at risk
• Bridgend - 279 jobs are to be lost after the Dairy Farmers of Britain (DFB) closed its Bridgend plant
• Cardiff - 100 jobs to go at Lloyds TSB
• Denbighshire - more than 300 jobs go as the Indesit factory closes in Bodelwyddan
• Wrexham- Air Products are considering closing their factory with the loss of 200 jobs

This, of course does not include, as this blog predicted months ago, thousands of more job cuts across the public sector in local authorities, further education, the health service and universities.
With unemployment set to hit 150,000 by the end of the year, it is time that we had a coherent strategy from the Assembly Government which does not consist of a one-trick pony such as ProAct, however worthy its intentions.

Some have argued that politicians' hands are tied by the fact that they have to operate within a "safety first" culture within the civil service in Wales.

Certainly, that case can be made with increasing evidence of delay and bureaucracy in the implementation of European funded projects, a complete breakdown in communications between officials and companies (so nobody knows which business is the next one under threat) and a reluctance to back major investment projects by blue chip companies.

Whether this is true or not is irrelevant, as the buck stops with politicians, not civil servants.

Indeed, if some of those top civil servants remain reluctant to help Ministers to get this country out of recession, then their political masters should have the courage to ask them to make way for those who will make a difference and create a 'can do' culture that can finally get this country out of recession.