The point is that I agree with Jonathan that there should be business rate cuts for Welsh firms.

Unfortunately, none of his Assembly colleagues are of the same opinion and have argued vehemently during the last few months that they are unaffordable etc….

Anyway, rather than repeating the long and convoluted debate I have had with one of your party members over the matter, it may be better for you to read the discussion itself

http://dylanje.blogspot.com/2010/01/mixed-messages-from-plaid-cymru.html

Conservatives 1 Plaid 0

Yep, cross party – and no party – columns will continue to be a feature for our coverage. True Wales had a very provocative piece last year, and there’ll be a follow up soon.

I’m an even bigger Melding fan than you, Mat. David Melding as a regular columnist is lined up for a Sixth Columnist piece in the near future and I’m sure some of his Conservative colleagues will weigh in over coming weeks too. And Lib Dems remain a big part of our contributing team – we’ve run a fair few provocative pieces from that quarter, and more will follow.

Perhaps a few from different parties might be tempted to respond to tomorrow’s column. We’re launching Public as a new column and the first writer will be Carl Sargeant AM, the new Minister for Social Justice and Local Government. His column is the first one written by a Welsh Assembly Government Minister in such a capacity and it’s a cracker. He manages to talk about the big challenges facing local government in Wales without once mentioning the snow.

On the demutualisation issue, I have sympathy with his desire to have wider interests taken into account, over and above the profit motive. Hes right that members interests need to be accounted for: it was a sad indictment of the times that that was EXACTLY what Thatcher was doing- Im sure he remembers the appalling sight of carpetbaggers moving their savings from institution to institution to get the next £500 payout. I’d like his thoughts on my suggestion of globally regulated capital markets when he gets a minute

M’learned friend Mr Hill did the right thing with editing the piece as he did- its this kind of debate that make WalesHome a preferred destination. Could we have similar pieces from other view points- am sure that David Melding could be persuaded to draft something provocative, Daran.

More power to your collective elbow. Keep up the great work guys.

On the other hand though, I felt that maybe the article was possible throwing in too many issues, particularly Jonathan’s proposals for economic solutions which are flown up the flagpole rather than being fully fleshed out.

On balance I decided to keep the editing very light in the hope that commentators would find plenty in this column to engage with, not least the solutions being offered. After all, many politicians or would-be politicians are quick enough to attack the policies of others without properly suggesting alternatives. Jonathan quite appropriately cites the radical tradition of Carmarthenshire politics (though quite why Gwynfor doesn’t get a mention bewilders me a little, Jonathan ) and places himself squarely in this tradition.

It is therefore especially pleasing that commentators have engaged not just around the existing financial system and the suggested iniquity of election coverage arrangements, but also have challenged the author over his policy ideas. And he has responded robustly.

As Mat Davies said earlier, “there isn’t enough passion around in politics so to have someone with passion, ideas and, to use the Welsh, hwyl, is doubly welcome.”

If only every politics column we ran provoked a response like this! Still, it’s a good start for this column in 2010 – and I’d be surprised if more of you didn’t come on the substance of Jonathan’s latest comments.

I will endeavour to answer the points raised to the best of my ability.

At the onset it should be made that the policy points are some of the ideas that interest me and not party policy. Carmarthenshire has a fine tradition of producing independent minded politicians like the co architect of the welfare state Jim Griffiths, and of course the man I hope to replace, Adam Price. If elected I will aim to continue that tradition of challenging norms and orthodoxies – for the life of me I can’t understand why anyone would want to be elected in order to protect the status quo, surely there are better things to be doing in life. Plaid has yet to publish its General Election manifesto and therefore the policy points referred to in the article it could be argued are equally aimed at those in my party drawing up our key election pledges.

London parties – the whole premise of the article is that I argue that the three main British parties have sold out to the economic elite in the city. There are differences of course. In very simplified term the Tories are a party that fully believe in the city golden goose and care little for regional and individual wealth distribution. New Labour believed that they could have it both ways – allowing the wealth creators of the city to run riot and then achieve their social justice aims via a means tested benefits and tax credit system. Unfortunately the so called third way has failed. A recent JRF study indicted that the poorest in society are no better off than they were than under Thatcher in terms of disposable income. We also know that wealth at both regional and individual level has polarise further under Labour. If that’s not a damning indictment of Labour’s failures, then I don’t know what is.
I have a lot of time for Vince Cable having spoken to him about these challenges. However, the Lib Dems believe there should be a ‘discussion’ about the economic and social imbalances within the UK. I believe the time for debate is over – the old system has failed and we need action to make sure that future wealth generation is delivered on a more equitable basis rather than in the interest of the select few and one small part of the state. I’m more than happy for both Labour and Tory representatives to dispute my opinion, but let them be honest with our communities in whose interests they are really fighting this election.

Jeff Jones is a political opponent to admire and fear. We will never agree as fundamentally he is a British unionist and I am a Welsh nationalist. He asks why people like myself attack Labour and accuses us of endangering a Tory victory. As far as I am concerned – and this is coming from the son of a Trade Union shop steward – it makes no difference at all to me who wins. The Tories and New Labour are as bad as each other standing on an almost identical policy platform. He talks of the devastating public sector cuts we are now facing in Wales – I put it to him that we are only facing these cuts due to the obsession of his party with letting the city run riot.

Mortgage eligibility – I think this is a very interesting debate which incidentally is one that I and my closest Plaid colleagues over the years have had diverging opinions. My basic starting point is that Government should discourage unsustainable bubbles of any sort. Financer clearly makes my case for me when he clearly indicates that average house prices are clearly out of all proportion with average earnings. It seems slightly worrying to me that one of the main responses of the UK Government to the recession is to try and re-inflate the housing bubble. In other words address an unsustainable situation by creating an even more unsustainable situation. I admit I am a lay economist at best, so perhaps there is something I’m missing. Having worked with the CAB movement, I’m all too familiar with the debt epidemic we are facing within the UK. With UK consumers owing £1.4 trillion, I find it hard to see why any responsible government would want to push people further into debt. Clearly a x3 mortgage limit will lead to a correction in house prices and that will mean pain for those who have mortgages based on an over inflated asset. Clearly if any Government was to follow the proposal it would need to find a way of managing that correction. The key diverging point is that I believe that we need a sustainable housing market – other believe in a fantasy world where house prices are artificially propped up in order to stimulate consumer spending – the path to further booms and busts.

CSR levy on banking profits – I find criticism of this policy idea somewhat difficult to understand from politicians who say that their primary interest is the good of our country. Any economist will tell you of the North – South UK economic divide and we are on the wrong side of the stick. Creating a dedicated economic development fund for the UKs poorest areas out of banking profits will help transfer wealth from the UKs richest parts to its poorest. There is a valid argument that a CSR levy as I propose will mean that global financial organisations will essentially cook the books in order to avoid paying tax to the UK Exchequer. If that’s the case then fair enough, but lets stop basing core macro economic policy merely to feather the nest of the city and lets use the fiscal and monetary tools at our disposal to stimulate growth in other economic sectors – otherwise the city will forever hold a gun to the heads of our policy makers and this wont be the last bail out. Michael is correct to point out that eventually/hopefully the £1.3 trillion handed to the banks will be repaid – but not before the next UK Government gleefully attacks the public sector and the devastating impact that will have on economies such as ours here in Wales.

Mutual finance – Here I’m talking about reversing Thatcher’s demutualisation policies of building societies. I would argue we want a greater market share for financial organisations that provide products based on the interests of their members rather than shareholders.

Business rates – I don’t quite get Dylan Jones Evans’ bizarre outburst – but then I’m not an economics professor. As a Westminster candidate, I didn’t understand that I was exempt from talking about devolved matters. His attack on my party leader Ieuan Wyn Jones is also somewhat OTT considering that decisions on business rates within the Government of Wales are made by the social justice and local government minister.

Moral hazard – As a socialist I find it difficult to understand why ardent capitalists believe that speculative activity should be bankrolled by the state. Unless we end moral hazard, the casino bankers will be able to act with impunity. Mervyn King shares my view of divorcing commercial and investment banking as does Paul Volker, the former legendary chair of the FED.

“Develop the growth of the mutual financial sector so that companies are motivated by values other than the relentless search for profits… ”

Values? Economics is about the efficient allocation of scarce resources, which have alternative uses. This means that some must lose their ability to use those resources in order that others can gain the ability to use them. Profits plus the threat of losses are thus crucial to the functioning of the economy. They force us to produce at the lowest cost and sell what the customers are willing to pay for it.

“A borrowing cap on mortgage payments of three times income in order to avoid yet another unsustainable housing price bubble”

Limits upon the mortgage markets are simply unnecessary. No one is going to invest in subprime debt, as they’re not going to invest in telecoms companies with “creative” accounting techniques. Losses tell the manufacturer / creditor what to stop producing / lending. If you want someone to blame, then blame the PM, who, in 1997 transferred the responsibility for bank regulation from the Bank of England to the feeble FSA. He also curbed the central bank’s ability to keep asset inflation in check by removing housing costs from the price index.

“A long-term 10% corporate social responsibility levy on banking profits to pay for a redistributive economic development fund for the UK’s poorest areas.”

If you reduce the profits to be made then bankers will invest *less* money. They’ll have less money to rebuild their capital bases, so that they can get lending again. If you want credit to get cheaper then you don’t tax the people that provide it. There is also the point that by reducing the profits of those already in the industry you deter new entrants.

“…the banking bailout having cost tax payers £1.3 trillion in loans, grants and guarantees – estimated at £40,000 per family.”

If you reduce the profits to be made then bankers will have a much weaker capital base to repay the taxpayer support. No?

“…you would expect some element of decorum from the city bankers and casino capitalists who brought the global economy to the edge of Armageddon.”

The global financial system is actually characterised by risk aversion – i.e. the stock market, investors who diversify risk, derivatives which are a form of risk management, new types of insurance, etc. Yes, there’s Citibank, Bear Sterns and Northern Rock. But UBS, Soc Gen, Barclays, IKB and WestLB? “Casino capitalism” is a misnomer.

“Global action to divorce commercial and investment banking so that no longer can the casino bankers and speculators act with impunity – an end to so-called ‘moral hazard’;

Securitisation predated the repeal of Glass-Steagall (a law which kept commercial banks separate from investment banks). In many ways securitisation was in fact a reaction to Glass-Steagall, a way in which the system tried to find a way around it.

No TV debate for anyone, I say. It will skew the General Election in many ways, not just against the non-Big 3 but also by creating a journalistic focus on the personality cult of leadership rather than broader party platforms. Or, should I say, further enhance such a focus.

Despite my love of politics am tempted to boycott any such TV debates. And not just because I want to hear from Alex Salmond or the leader of the Alliance Party of Northern Ireland.

Does that mean we can call Plaid a “Cardiff Party”? Of course not. “London Parties” is and always has been acceptable pejorative code for “English parties”.