Sunday, 24 July 2016

Air Passenger Duty: Wales grounded by Westminster as Scotland and Northern Ireland take off

  There's nothing more useful than a major international controversy as an opportunity to bury a whole host of smaller domestic problems. So while Britain was busy voting to make itself "Great again", George Osborne, now former Chancellor of the Exchequer, quietly caved into English aviation interests and reneged on a commitment to devolve control over Air Passenger Duty (APD) to Wales.

  On the face of it, APD is such an obscure little tax that readers might be inclined to wonder what the fuss is all about. But the interesting and revealing thing about APD is not so much the support it engenders in Wales (an online poll for the Western Mail showed 78% in favour) but the reaction it has generated on the other side of Offa's Dyke.

  So, for the uninitiated (author included!), what is Air Passenger Duty? It's broadly defined as "an excise duty which is charged on the carriage of passengers flying from a UK or Isle of Man airport on an aircraft that has an authorised take-off weight of more than ten tonnes or more than twenty seats for passengers". To get a sense of the wider importance of APD as a tax it's worth quoting the UK Treasury itself;

         "Air Passenger Duty is primarily a revenue raising duty which makes an important 
          contribution to the public finances, while also giving rise to secondary environmental 

                                                                                                                     UK Treasury, 2011

  Ironically, APD was put on the political agenda in Wales by the very same Tories that have just put the kibosh on it. In 2011, the Silk Commission - set up by then Welsh Secretary Cheryl Gillan - recommended devolving control over APD to the Welsh Government, It should be noted at this point that both Scotland and Northern Ireland both already have control over this tax.

  The Silk Commission took their data from the Civil Aviation Authority, who estimated that APD raised just over £7.5million in Wales in 2011. This figure might sound like a drop in the ocean in the context of identifiable public spending of £30 billion in Wales in 2010-11 but it's not quite that simple. So read on!

  Needless to say, having let this particular taxation genie out of the bottle, it rapidly proceeded to magic up a considerable amount of support across the political landscape in Wales. Welsh Conservative leader Andrew RT Davies stated it was "perverse" not to devolve control over APD to Cardiff, while Comrade Carwyn agreed that it was "completely unacceptable" for Scotland and not Wales to get powers over the tax. Plaid, of course, want rather more than just control over APD.

  Outside of the Cardiff Bay bubble, support has also steadily grown across the aviation industry in Wales. Not surprisingly, Wales' only major airport is a firm supporter of devolving APD. But a spirited online campaign also finds focus with websites such as APD4Wales calling for the "punitive tax" to be scrapped. 

  Meanwhile, on the other side of the Bristol Channel an equally spirited campaign has sprung up in defence of the status quo. Needless to say, this campaign has won a temporary victory, at least. At the forefront of this campaign is Bristol Airport. But in making the economic case for the status quo, Bristol Airport has also helpfully outlined the economic benefits for Wales too. The airport's Chief Executive has been quoted in the press as stating that devolution of APD to Cardiff could cost the south-west economy 1500 jobs and £843 million. in GVA (Gross Value Added) over the next decade. This puts our previously-cited £7.5 million figure in a rather different light...

  Perceptive readers will note that Labour, the governing power in Wales, have largely been left of the hook so far in this piece. In the run-up to the Budget, Welsh Finance Minister Jane Hutt blasted the Chancellor's "unacceptable procrastination" and went on to say that; 

        It would pave the way to improved international air links with the rest of the world, which                  would bring economic benefits not just to Wales but also businesses and citizens in the South 
         West of England, helping to stimulate business and trade"

This very magnanimous sentiment didn't cut any mustard with her Labour colleagues on the other side of the Channel, however. Bristolian Labour MP Karin Smyth congratulated the Tory Government's decision as "very welcome news for the South-west economy". Which just goes to show what a mendacious game the Labour Party is content to play with Wales, it's traditional playground. 

Which all goes to show what a raw deal we have in the so-called "United Kingdom". We are the only constituent part of the UK not to have control over this small tax. The economic benefits to Wales are clear, and in ignoring Welsh interests, it should be clear that Westminster is holding the Welsh economy back. We're better off out of the Union altogether. But in making the case for being out of it, it's worth articulating a basic point of principle; as APD4Wales put it;

             "A tax on flying from Wales should not be set by an English government"

To be continued....

Tuesday, 12 May 2015

You Get What You Ask For

The penny dropped for me when I was coming home one day and, cutting through the Council estate, I spotted a series of Tory placards in someone's garden. Taken aback, gawping, and bogged down temporarily with the perennial Welsh question "Who are you?", I almost crashed the car. The realization soon dawned on me that the house belonged to the former Chair of the local Workingmen's Club, the Brighton Road.

Over the next few weeks as the election campaign proceeded apace, a few more Tory placards sprang up around "North Gower". But they weren't just springing up in fields or on well-to-do housing estates, they were popping up on terraces, and in former mining villages. It occurred to me that something was up, and I suggested to my partner that Labour could lose the Gower seat. She didn't buy it. I went a little further. Labour have held Gower since 1906. If they lost a seat like this, they would be in trouble nationally. If Labour lost Gower, we'd have another Tory government. Which as it happens is exactly what we've got.

And there's nothing magical, mystical or mysterious about how we got here either.

You see, in Gower, the Tories got on in the back of a working class protest vote from the northern part of the constituency, where Labour have traditionally drawn their vote. Underneath the lazy rhetoric of the "Tory tide" surging across Wales is a complex mosaic of local stories. Labour have sat on this area for year after year after year while funding has been pumped into Swansea city centre on grandiose vanity projects. Ironically, in a climate of "Tory" cuts, local patience with Labour has run out. Why vote for Labour when they only offer more of the same thing?

This city-centre/periphery conflict was made all the worse by the disastrous decision to centrally impose a female candidate on the constituency, drawn from an all-woman short list. Parachuted in from the Hafod in Swansea (so we're told, although she didn't have a Hafod accent), the reaction of the local Party organisation was predictable. A large chunk of the local Labour Party effectively boycotted the election campaign.

Many on the Left of politics in Wales are deeply uncomfortable with the idea that people from communities that were hammered by the Tories in the 1980s could bring themselves to vote for "The Nasty Party". There is even a school of opinion in Left-leaning Nationalist circles that the Tory vote in Wales is made up largely of English incomers, as though migrants from over the border are some kind of "Fifth-column" for the Tory invader. Toryism in Wales, you see, is not an indigenous phenomenon. There may well be an element of truth to this perception, but it's not the whole truth.

For many in Wales, there's a kind of visceral reaction to the Tory Party that paradoxically leads them to defend, or at least refrain from attacking, a Party that has shifted so far towards the pro-business agenda of the Tories that it's almost indistinguishable from them now anyway - Labour. A madman runs towards you wielding a bloody great axe. It's a Tory, Run away! The chips are down and you suddenly feel the twist of the knife in your back. That's the modern Labour Party, who will then tell you it's for your own good, and if the Tory had done it, it could have been a whole lot worse...

And for that precise reason it shouldn't be hard to see why Labour and the working class are no longer synonymous in Wales, and why many people have given up on even the pretense of voting for Labour. For people who have been hammered by a recession Labour dragged us into, the Tory message of economic competence, whether you believe it or not, has some resonance. Those placards are a big "fuck you" to a Party that bombed the hell out of Iraq, fucked up the economy and embraced Neoliberalism even while arrogantly assuming our continued tribal loyalty.

Plaid Cymru, meanwhile, actually did alright in Gower. It upped it's vote despite running the local campaign on a shoe-string. Yet I have colleagues in Plaid who tell me they'd rather see Plaid lose it's deposit than let Tories get in. The rationale is that Labour voters will never forgive Plaid for splitting the vote and letting in the evil Tory bogeyman to steal our first-born children. What they neglect to understand is that many of these Labour voters have given up on Labour - and switched to the Tories anyway.

And there is the simple reality. Many Welsh people vote Tory. It would seem that the Welsh are more promiscuous than ever, and not only have they abandoned the Chapel in droves, they are even happily indulging in a little sado-masochism in the privacy of the polling booth a la UKIP. But there is a line it seems and that's where you aren't likely to see many defiant placards broadcasting a newly found conviction to the wider community. A source of some frustration to pollsters and Party activists, but also of hope for the future.

For UKIP, while articulating the very real economic and social concerns of ordinary people, demarcates the furthest reaches of Wales' flirtation with the Right. Beyond that point is the terra incognita of Welsh Independence. A prospect we're not quite ready for yet, but the only real alternative in a country that faces the prospect of being dragged out of Europe by Isolationist England.

In Scotland, the Scottish National Party have articulated a clear and well-worked out vision of what an Independent Scotland would look like. In Wales, Independence is, er,...a long-term aim. A collection of policies is no substitute for a coherent vision of a future society. The SNP have grasped the thistle and realised that only Independence will give Scotland all the tools to do the job.

Yet who is really articulating the arguments for Welsh Independence?

Until they are made, you can expect the Tories and UKIP in Wales to continue filling the void left by Parties - Labour and Plaid included - that are not offering a compelling vision of the future. A vision strong and coherent enough to motivate people into taking that leap of faith into a future of unquantifiable but tantalising possibilities. A future that only we in Wales can make. Regardless of where we originally came from...

Saturday, 4 October 2014

Power to the People?


  A decision to consider closure by the operator of Scotland’s largest power station tells us much about the way the so-called “National Grid” is designed to serve the needs of the big English cities, rather than the thinly populated “Celtic periphery”.
  Scottish Power, the operator of Longannet power station, has announced it will not be bidding to connect to the grid in 2018. The reason? Even though Scotland exports a large proportion of its electricity to the big centres of demand down south, it also pays the highest transmission fees. Consequently, Scotland suffers a double whammy – it loses the benefit of being able to profit from the export of a valuable 21st century resource. And Scottish consumers pay higher bills because they sit at the tail end of a network built to serve the needs of over-populated, over-built England.
  But as a story highlighted in the “Western Mail” last year shows, the same dynamic applies to Wales, too. For in October of last year, the Mule pointed out that Welsh consumers pay the highest electricity bills in the whole of the UK. Even higher than Scotland, in fact.
  This is despite the fact that Wales, much like its Celtic cousin up north, also exports electricity. But this simple fact however obscures a more complex picture than Scotland. Whereas history has bequeathed on our northern brethren a network that treats them as a discrete entity, in Wales the network splits our country in two. This split is readily acknowledged even by English companies with a major stake in Wales, but the consequence is that whereas North Wales is a net exporter of electricity - by a pretty comfy margin too - up until recently South Wales actually had to import electricity from England. Hence the higher bills.
  For Wales, much like Scotland, this has a number of consequences. In the first instance, Welsh consumers have less spending power because a greater proportion of income is eaten up by fuel bills. In Wales, a country that exports electricity, a staggering 41% of households are now classed as in fuel poverty. And of course high bills have consequences for business as well. As Miller Argent pointed out in their submission above, high electricity prices hold back the Welsh economy in other ways, as they affect Welsh competitiveness, particularly the manufacturing sector.
  Since Miller Argent’s submission, things have changed a little bit in South Wales. With the construction of the massive Pembroke 1 power station, South Wales is now a net exporter of electricity to England too. Yet as National Grid’s own tariff charges show, RWE, owners of the station, will be paying something on the order of £35 million a year to export all that electricity down the line to Gloucester. Because of the iniquitous way the Grid works, much of that cost will be shouldered by struggling Welsh families, who are effectively subsidising their wealthier neighbours next door through their higher electricity bills.

  Better Together, I hear you say?

  Of course, Devolution of power consents came under the purview of the Silk Commission, set up by the Tory Government to look at more powers for the Welsh. But as Gareth Clubb, Director of Friends of the Earth, pointed out in a post earlier this year, there was never really any intention to give Wales substantive powers over consenting for large power stations. Wales has always had a slightly unruly relationship with our bigger neighbour next door. We’re just too unreliable to be trusted to plug England’s yawning energy gap.

  As the Commission itself put it:

“Wales is a net exporter of electricity, and an energy strategy that focused on Wales would not perhaps fulfil the needs of the wider United Kingdom, and England in particular” (translation of Welsh language version of the Silk Commission Part II report, section 8.2.13).

  Say no more...

Saturday, 27 September 2014

Towards an Independent Welsh Currency

  Leanne Wood is fond of saying nowadays that “Independence won’t happen tomorrow”. And probably with good reason. For those of us who support Welsh Independence, the harsh reality is that if by some act of constitutional magic, Wales did become Independent tomorrow, we’d have a hell of a budget deficit. The Holtham Report, commissioned under the “One Wales” agreement, identified a difference of £6 billion between tax raised in Wales, and total public spending. Many senior figures in Plaid are well probably well aware of this figure, which is why the Independence genie, having popped out of the bottle, refuses to grant us the wish closest to our hearts. Independence has become a distant oasis in the economic desert.
  Except that it’s not quite that simple. For the surprising and somewhat perverse reality is that although our public finances would be in a pretty dire state, an Independent Wales would also start life with quite a tidy trade surplus, something on the order of £5billion if the most recent figures are anything to go by. Why? Because after decades of globalisation and de-industrialisation, Wales still has something that many Western countries at the start of the 21st century now lack – a good manufacturing base, in our case accounting for something like 16% of Welsh GDP.
  So even though the UK as a whole runs a trade deficit, taking Wales out of the UK equation means that, as Neil Kinnock once put it so eloquently, we’re alright.
  In fact, taking Welsh manufacturing out of the strait-jacket of the Union takes us on an interesting journey, but it also raises questions about what kind of meaningful industrial policy Plaid Cymru in particular can formulate while it’s still sucking on the comfort blanket of Devolution. For power devolved, as Enoch Powell once put it, is power retained, and Devolved economics is still economics that works in a Unionist framework. 
  From a manufacturing perspective, few companies illustrate the nature of the strait-jacket posed by the Union as well as the operations of TATA Steel in Wales. If we wanted a clearer illustration of how the UK economy is designed to benefit the banksters running the City of London, while militating against what could well evolve into the engine of Welsh Independence, look no further.
  Let’s look at a few facts.
  TATA is Wales’ largest manufacturer. The Jewel in its crown is the massive works at Port Talbot - hosting the UK’s largest integrated steel plant, and accounting for anything up to half of all UK production of Steel. TATA in Wales employs around 8000 staff directly and is estimated to contribute around £2.5 billion to the Welsh economy.
  Yet like all manufacturers, its export focus makes it vulnerable to fluctuations in the UK Pound. Given that manufacturing accounts for a bigger proportion of the Welsh economy than other parts of the UK, it’s reasonable to conclude that a strong Pound is going to hurt the Welsh economy disproportionately, or as one despairing Welsh steel worker put it a long time ago “Why does it always happen to us?”
  Which all begs the question – if the strong Pound is such a problem for Welsh manufacturers – why bother with it?
  Of course, the virtues of retaining the Pound as a currency has been more of a preoccupation for our Scottish cousins north of the Border. But given the fact that Wales’ manufacturing sector is still such a meaningful element of our economy, maybe we should start thinking outside of the box and start asking whether we too would be well served by a currency of our own.
  In Scotland, the SNP’s strategy to reassure “swithering” undecided voters was to propose a currency union with England. There are those who argue, however, that this strategy does no favours to Scottish manufacturers as it continues to shackle them to the strong Pound. This has a two-fold impact on Scottish and by extension Welsh industries – firstly, it helps destroy our manufacturing bases by rendering them uncompetitive internationally. And secondly, and more insidiously, it feeds dependency on the one market that can conveniently still afford to buy Scottish and Welsh goods because they are denominated in the same currency – England.
  Funny how it works out like that, eh?
   We’re all well aware of the SNP’s riposte to the Treasury’s bluster and threats not to “share” the pound. “If you’re not prepared to share the assets, we won’t share in the liabilities”. An Independent Scotland would simply walk away from its share of the UK debt. From a Welsh point of view, walking away from the pound and walking away from the massive debt burden that the UK’s out-of-control financial system has lumbered us with doesn’t look like a bad call.
  Similar threats by the UK Treasury to Wales can then be met by the simple reply: fine by us!

Friday, 7 January 2011

"He Was a Straight Man"

Welcome to Planet Westminster. According to convicted fraudster Dai Chaytor's best butty Graham Stringer he was "the straightest man most of us knew".

Well, if that's the case then they should all be in prison shouldn't they?

Monday, 27 December 2010

Of Tenners and Teardrops.

As anyone who has been in a relationship for some period of time will know, over time you come to notice all the little quirks of behaviour of your partner. Some of these little quirks may be quite endearing, some of them less so.

Maybe a similar logic applies to political parties. In which case you might have been forgiven for hoping that Plaid would have cottoned on by now to some of the less endearing behavioural traits of its senior coalition partner, Labour.

Of course it’s true that Labour in Cardiff Bay, now its last remaining UK stronghold, is no stranger to partnership. And of course it’s well known that Labour is apt to ditch partners that no longer suit its interests too. And sometimes, of course, in a partnership things crop up that either party may not want to confront. Maybe they threaten the end of the relationship. Labour has an answer to this kind of scenario too.

They set up a Commission.

So those of us with long memories will recall that when Labour was rolling around in the sack with the Liberal Democrats, and the thorny issue of “more powers” came up, Labour agreed to set up a Commission – the Richard Commission. Unfortunately, this Commission then came to conclusions that Labour still didn’t want to hear. And so it came to pass that, shortly after Richard made his recommendations, Labour dumped the Lib Dems.

The bastard child of this canoodling was the Government of Wales Act 2006.

And so, fast forward 6 years and here we are, Labour are now cwtched up in bed with Plaid, a referendum on “extra powers” is in the pipeline and Labour are whispering sweet promises of another Commission in Plaid’s ear – a “Holtham” style commission”. Plaid have been banging on for years about funding, and now Labour are suddenly making empathetic noises. The fact that Labour maxed out the credit card and cleared out the piggy bank in this intervening 6 year period seems to have passed some people by.

Of course, you could argue that fundamentally, Labour are simply less idealistic about relationships. Certain ecstatic elements in Plaid dreamed of a whirlwind romance, leading to marriage, an alchemical union of parties that would deliver real social justice for Wales. It’s doubtful that Labour ever entertained this fanciful notion.

On a personal level, I suspect that few blokes are naive enough to entertain the notion that if they go out on the piss, spend a bit too much money, and wake up next morning next to an absolutely stunning bird, that this means they’re going to get married (in a non-conformist chapel of course) and live happily ever after, but it seems that certain elements in Plaid do indeed fall into this category of credulousness.

It’s just a pity that they’ve forgotten the famous saying of Ronald Reagan - that politics, as the second oldest profession, often bears a striking resemblance to the first – prostitution. Some people will do anything for money, yet for all the fundamental usefulness or relevance of their promises, Labour out of power where it counts - London - might as well claim that it’ll still rain in Wales the day after a yes vote, but that it’ll be raining tenners, instead of raindrops.

Or tears for that matter.

Sunday, 24 October 2010