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.

Home Rule: The Mount Estate Way.

The Mount estate is a deprived community on the outskirts of Milford Haven in Pembrokeshire. It hit the news three years ago when the National Grid ran their giant high-pressure pipeline through a woodland run by the community - without any consultation.

Today the Mount Estate hit the news again, with a more positive story. Tenants on the estate are being ballotted to draw down the power to run aspects of the estate themselves, through a TMO or Tenant Managament Organisation. This initiative, the first of it's kind in Wales, is being pioneered by the Mount Community Association, who are confident of a positive outcome to the ballot.

I'm all for these kind of initiatives. There are those on the Left-wing of Welsh politics who have a very ambiguous attitude towards this kind of development. As commentators like the Independent Working Class Association have pointed out, the Left has unfortunately become conflated with statism, so that community-driven solutions are automatically labelled as "backdoor privatisation". This is certainly my experience in Wales, which seems unfortunate to me, as what should be important is what benefits tenants, and not Left-wing activists.

Some years ago, I ran a small campaign in Bridgend in support of a "third option" in the local Housing Transfer ballot. The two existing options were, stay with the Local Authority as council tenants, or transfer to a Housing Association. I argued that there was another option, which was to transfer to a Housing co-operative, or Community Mutual. This option has been specifically designed and pioneered by the Welsh Assembly, and is designed to be tenant led and controlled. In my idealistic young mind, the principle was simple: council tenants live on the estates, why should they not decide how they are run?

In running this campaign, however, I was brought up short by the pointed insights of an experienced local housing activist, an independent character who gave me a lot to think about. He pointed out that the Mutual option had actually been looked at, at an early stage in the housing transfer process, but enthusiasm for the option was very limited. The ballot campaign itself was beset with apathy and indifference. His conclusion was simple, but rather depressing. Tenants in the area just didn't have the confidence to run their own estates, and for that reason, a tenant-run housing co-op just was not feasible.

In light of this, it's revealing to realise that while this is the first TMO of it's kind to be developed in Wales, there are some 270 in existence in England. Why should it be that council tenants in England are that much more ready to take the management of their estates into their own hands? I suspect that somewhere between the dogma of many activists on the left in Wales, and the lack of confidence that seems to afflict many welsh council tenants, you will find the answer.

Looking back now at this seemingly negative experience, the Mount estate gives me a little hope. It sounds to me like people in the area have enough confidence to take that first tentative step towards self-determination. If people on the Left want to brand that as "privatisation" that's up to them. If tenants find that it frees up money to invest in real changes on the estate, and gives them the confidence and self-respect that comes with the realisation that they can manage their own affairs, they are bound to be for it.

At the end of the day, they should be the judge, and no-one else.