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 21^st 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...

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 21^st 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!

"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?

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.

Car Parking Charges in Gorseinon

So This is Wales Under Labour

A word of advice: if you're going to put a flag in your manifesto - make sure it's a new flag...

The Real Level of Welsh Unemployment

In the week the BBC reported on the newly released figures for unemployment in Wales. In the space of 3 months it's jumped from 106000 to 130,000, the highest jump in the UK. As the BBC usefully informs us "the last time unemployment was this high was in 1993".

Which puts us squarely back into the good 'ol days of Tory government.

Of course, back in those days Labour were routinely jumping up and down and screaming "fraud" whenever the unemployment figures came out, as it was generally accepted that the Tories had been fiddling the figures to disguise the huge structural unemployment they had created in the 1980s, when they shut down huge chunks of our manufacturing base. A 1997 report by Sheffield Hallam University that looked in detail at this practice was requested for circulation amongst Labour MPs by the then Shadow Chancellor, Gordon Brown.

Unfortunately for Labour, Sheffield just kept on producing these wonderfully insightful reports. And what they essentially documented was that Labour had retained the Tory practice of fiddling the figures. The most recent report, in 2007, documented a real unemployment rate of 2.6 million, when the claiment account was barely a million people. This figure included a "hidden" unemployment rate amongst the UK's incapacity claimants of around 1 million people.

So let's do a little math, as they say in America.

Sheffield Hallam estimated that this hidden figure was concentrated across the older Industrial areas of the UK, including, of course, South Wales. Areas like Merthyr were notable examples.

However, if we generously assume that as we have approximately 1/20th of the UK's population, we will take 1/20th of the "hidden" incapacity figure, that makes for 50,000 people. It's not likely this figure will have changed in the last 2 years as it's basically structural, and not linked to the "boom and bust" cycle that Broon claimed to have abolished.

We add that 50,000 to the 130,000 "official" rate, and we have 180,000 people out of work, still in all probability a gross underestimate. It works out at a real unemployment rate in Wales of at least 12.6%.

So after 10 years of Labour rule, we are pretty much back where we were in the mid 1980s, under the Tories. The Tories threw huge numbers of people out of work, and Labour have done so too. And like the Tories, Labour have decided to disguise the real figures to suit their own cynical political ends.

You can guarantee that Brown, who's Thatcherite deregulation of the financial system has led us to the current mess, won't be requesting the newest version of Sheffield Hallam's report, which shows a real unemployment rate of 3.4 million people for the UK as a whole. Ideally, it should be stuffed down the greedy gullet of every grasping MP in the whole sorry edifice that passes for the "Mother of all parliaments".

The least we can do next year is add 600 to this sorry, growing tally of human misery.