A perfect storm that Wales cannot weather
Bubble — By Ian Titherington on April 14, 2010 7:00 am
Council workers marching in Port Talbot last month in protest against plans to reorganise care homes in the area
ENGLAND was the first country in the world that had to get used to living with a deficit budget – and it was all down to the Welsh.
When Edward I took on Wales as part of his campaign to conquer mainland Britain, he was almost bankrupted through being forced to build a ring of castles around the North and West, to keep this country under control. He had to go begging to Italian merchants to keep England afloat when income streams were low. So perhaps there is something of a bitter irony in the fact that Wales will suffer more than any other nation or region when the threatened public sector cuts come soon.
In just under three weeks time, Wales and the rest of the UK will go to the polls for a new Parliament, in the full knowledge that whichever party each and every one of us chooses, the result will be the biggest public sector cuts faced in living memory. As an active trade union branch officer in local government, I am used to the dire warnings made every year about funding cuts as we approach the budget settlement. But this time, you can see the fear in council officers’ eyes. This time, it’s for real.
What is not generally known among the Welsh public is that local government has been making reductions in spending for several years. There have been frozen budgets or real cuts on an annual cycle in many departments, partly as a result of the Barnett squeeze being passed onto one of the largest elements of the Welsh Government spending profile. Also, additional UK legislation is rarely funded to required levels. For example, the recent Baby P tragedy has resulted in an effective 25% rise in the cost of managing children at risk. With only around a quarter of council funding actually coming from Council Tax in Wales, it gives little room for manoeuvre. The perception of local authorities wallowing in cash is very far from the truth, even with recent publicity about the salaries of chief executives.
Many of you reading this may agree with this but will still believe that there must be cuts. Frankly, I agree with you. The consequence of the appalling personal greed encouraged by successive UK Governments within the banking sector is that the UK a much poorer state. We can still afford a comprehensive public sector, but not alongside Trident, ID cards, a spiralling debt and a taxation system whose most reliable funders are the poorer employees while the richest remain the most devious. I will also admit that the public sector is not perfect and savings can indeed be made. However, the size and speed of the cuts will not drive manageable, efficient reorganisations and shared services but knee-jerk outsourcing, privatisation and the closure of all non-statutory services. Many Welsh councils face financial oblivion and there is huge pressure on senior officers as frankly, many of the councillors are out of their depth in such situations.
Now, place yourself in the seat of a council worker. A typical Unison member in local government is female and on fairly low pay, certainly low enough to rely on family tax credits. She will often be covering other posts as there is currently a freeze on all external recruitment to cut costs (please do not rely on this for savings, Mr Cameron – it’s called double accounting). She is very worried about the wage freeze being imposed, as prices and taxes are going up, putting the squeeze on available spending. She has watched in horror as her property value plummets and she is dismayed at the huge cuts coming her way, in terms of less service funding, almost certain pension cuts and even the potential of outsourcing or redundancy.
So with all this in mind, how do you think she feels when she sees the bankers who created much of this mess collect their fat bonuses and get away with just minor adjustments to their tax? To make matters worse, the banks that we bailed out, who we now own, are employing advisers (on larger salaries than the Prime Minister) who actually advise on how to lawfully avoid paying tax. There is £120 billion of lawful tax avoidance in the UK every year and very little of this potential tax-take is being targeted by the main parties.
Apparently, if we are too hard on these multi-millionaire sensitive souls, they will up sticks and strop off to another country where they will be welcomed with a tax system that benefits them. I have yet to be convinced by anyone that either this will happen or if it did, how exactly would we be worse off than we already are? This is one for the politicians, who will have to make a moral judgement on whether they want a fairer society, or one based on millions just coping supported by a basic public sector, while the super rich enjoy life in their gated communities. I know that this sounds very ‘trendy leftie’, but these cuts are without doubt a defining moment in UK society. The proposed taxes and cuts proposed by all UK parties to meet the deficit are imbalanced and grossly unfair.
Although many in the public sector, including myself, recognise that some cuts cannot be avoided, there is a genuine up-welling of anger from employees who question the fairness of suffering so much as a result of the greed and ineptitude of others. Unless politicians are prepared to at least attempt to re-balance the cuts from the ones who can least afford it to the ones who can, I believe that a political precedent will be set that will set in stone the permanent and growing gap between the ‘haves’ and ‘have nots’ in our communities.
As a final thought – and to use the current favourite buzz phrase – Wales is facing a ‘perfect storm’ of cuts in the coming years. Although all of the UK parties have recognised that Wales has a case for fairer funding, none have yet committed to increase our funding. Consequently, we will still face the Barnett squeeze, reducing our annual block grant. On top of this, we have a higher reliance on the public sector, as our manufacturing sector has shrunk and the new financial jobs have rarely made it west of Offa’s Dyke. Counties like Anglesey and Swansea, where jobs outside the public sector are now rare, could be decimated by these cuts and the Welsh Government has no reserves remaining to help them out.
Put on top of this the costs of settling equal pay legislation and who would be a councillor? Or, for that matter, a union branch officer?
Tags: banking, cuts, local government, public sector, Unison
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37 Comments
Excellent article which drives to the heart of the real division line in this election. Unfortunately what we are getting is an artificial division line between the main London parties. There is no difference between Labour cuts and Tory cuts. They are both offering a business as usual solution.
Many people have told me on – and off – the campaign trail that they’re sick to death of hearing Labour and the Tories engaged in this petty competition to cut the most, wherever they can.
As Jonathan rightly points out, a cut in funding to public services is a cut in funding to public services – whoever it is that initiates it. Labour has changed so much in the past decade, it’s let the people down, and now it wants to make cuts worse than Margaret Thatcher!
As you say in your article, cuts needs to be made; of that, there is no doubt. But it’s a question of where. People on the street want to see their schools, their hospitals and their policing invested in, their jobs and their businesses protected – not to see billions spent on Trident and millions of pounds every year on unnecessary ID cards and the war in Afghanistan, which as we all know, has taken tens upon tens of lives from this country and from Afghanistan itself.
The one thing that I’d emphasise further is that the language of ‘savage cuts’ and the kinds of numbers being touted by the main UK parties are designed to serve the interests of the city/CBI/professional-economics lobby which created the mess in the first place. It’s worth checking out John Lanchester’s contribution to the recent London Review of Books, where he notes that the infrastructure of the UK would be destroyed if the kind of cuts being called for would be implemented. The questions we need ask, as Jeremy Gilbert notes over on the Our Kingdom blog, is why are the main UK parties talking of cuts that can’t be implemented, and why are they ‘so keen to frighten us with tales of dark times ahead’? Lanchester suggests that this is the kind of language that the bond markets want to hear, and in order that they continue lending huge amounts to the UK government at low interest rates, politicians will keep talking about savage cuts.
But a further reason, as Gilbert notes, is that such talk creates a
“climate of paralysed anxiety at just the moment when a serious political challenge to neo-liberalism might seem most likely. The thinking shared by Brown, Darling, Cameron and Osborne is clear: by the time it turns out that the cuts can’t be that bad after all, that we’ll just have to pay off the debt over 15 years rather than 5, then the worst danger to the system which they uphold will have passed. By that time, we’ll all have been so scared for so long that the fact that the chance of anyone my age retiring at 65 will have been wiped off the table, that student fees have doubled, and that a fundamentally unpopular and unaccountable socio-political regime has survived a storm that should have destroyed it, all won’t look that bad after all.”
Plaid Cymru should be in a position to give voice to this kind of analysis. Plaid’s role in this election must be to offer an analysis of the current crisis form a Welsh perspective that is independent from the ‘Yookayan’ parties. Getting hung up about what might be achieved in a hypothetical ‘balanced’ parliament is no way to gather votes. And I’m not sure that there’s much traction in the notion of a ‘Celtic Block’ with the SNP either. This election is being fought on the economy and Plaid should be in a position to make a distinctive case. This fine article by Ian Titherington is a good start.
What concerns me most is the climate that allows Labour and the Tories to engage in this contest that Cerith highlights. We’ve had so many years of a mostly-middle class media jabbing judgemental fingers at so-called chavs (last night’s Spoilt Rotten Panorama was a new low, even for the BBC) that it now seems acceptable to rope in the entire working class and let it take the fall for an economy imbalanced around and dependent upon the City, a City that has demonstrated itself utterly incapable of self-governance.
I debated this with Jeff Jones last time we discussed this on WalesHome.org and he made the valid point that what we must get to grips with is what is in front of us, rather than look to apportion blame among the bankers. Absolutely, but two connected issues most vex me.
Firstly, now that the great experiment of allowing the Square Mile to drive the economy has gone so completely wrong, we must find ways of rebuilding the economy so that it is not reliant upon one sector. This is basic, basic investment sense. You don’t put all your money into one part of a portfolio rather than a series of holdings. It isn’t risk averse. So why should we run an economy in such a way? I suspect it’s been done because getting the City to drive the wealth is a Helluva lot easier than rebuilding our manufacturing base or getting to grips with the huge infrastructural changes this country has undergone Postwar.
Of course, these things take time. But I think the recession and what caused it has presented us with a year zero opportunity to reshape the UK’s economy in a way that spreads the wealth more evenly and therefore reduces inequality – which has, of course, widened under Labour. Consequently, it has failed its core mission in government.
Secondly, and equally as important and certainly connected, if we are to make cuts, we have to make sure that it isn’t the poorest members of society that bear the brunt. I’m not only talking about service users, but coalface deliverers. Most of them, as Ian points out (and he would know, as he deals with them daily), come from low income households. They aren’t the widely-despised mandarin public servants of Daily Mail folklore. If they are fired, not only do the services stop, but they people that deliver them may well become service users themselves, and cease to become contributors. All that does is store up economic trouble (and social touble, potentially) down the line, and even the most ardent right winger would see that such an approach makes no economic sense.
So, in reality, this rush to the bragging rights betrays nothing but an absence of imagination among the two main parties, and utter timidity in the face of a misinformed electorate, for which they must shoulder some of the blame. And while it is the council workers in Wales that will pay today, it will be the grandsons and daughters of the shires that will carry the cost in decades to come.
First we need to recognise we have a problem.For this it is worth reading Aled Blake today in W Mail. It would be good to talk Wales up and produce hope for our future with economic growth predominating.The dependancy culture needs to stop. According to Mr Blake “Recession has only gone to magnify the problem in some parts, with the number of economically inactive people in Wales at around 424,000 at the beginning of 2010 – enough to fill the Millennium Stadium 5.6 times.”
Reality of economic inactivity is the lack of hope which is callouslly disregarded with false promises to the electorate .
So why do we not focus on the problem.There needs to less capitalist and union “bashing” and more solution finding.But there are some who enjoy a good funeral and prefer relegation to whinge about than promotion to celebrate.
http://www.walesonline.co.uk/business-in-wales/business-features/2010/04/14/breaking-the-bonds-of-dependency-91466-26203203/
Seems like there are two issues at work here.
The first is one of candour about the nature and effect of the proposed reductions in expenditure. The suggestion is that the two main parties accept the need to reduce spending, but have not spelled out what they propose to cut and what effects they expect this to have. It’s a legitimate point to probe but it conveniently vaults a more fundamental issue, namely: what is each party’s assessment about the state of the public finances over the next Parliament?
This is a assessment all parties – including Plaid – owe it to the electorate to set out. If the conclusion is that substantial reductions are needed, each party should quantify and identify the cuts. Any party that suggests otherwise should explain why they believe the current structural deficit to be sustainable.
Plaid’s pitch in this election is that it may end up holding the balance of power. Voters therefore deserve to know if it believes that cuts will be needed over the next Parliament, to what extent they are necessary – and which types of cuts it would support or oppose. Plaid’s manifesto identifies some cuts (e.g the cancellation of Trident, ID cards, new aircraft carriers) which it describes as measures aimed at “start[ing] to tackle the deficit”. But it also sets out some new expenditure items, some of which may be substantial (e.g increase in the Welsh block, increase in the state pension, new infrastructure). While there is a nod toward additional taxation, it does not appear that this programme adds up to a plan to reduce the defiict over the course of the next Parliament – at least not in line with the sort of reduction many economists and the UK parties insist is necessary.
If this is so, Plaid is effectively arguing that the current deficit is sustainable, in which case it should be candid about that and make it clear that it will not work with parties that will implement cuts beyond those already identified. If not, it should state what sort of reduction in expenditure/increase in taxation is necessary and what measures it would be prepared to back.
Roy is correct in that it is not all doom and gloom for Wales. My article was concentrating on the implications of the proposed cuts to areas of the public scetor I have a knowledge of. However, many economic development issues are still primarily managed through London policy; the effects of the recent over-reliance on the city being a classic example.
How the cuts are managed within the public sector is a very challenging topic. I see the best way forward in bringing all public and civil service areas closer together in Wales, to share expertise and vastly reduce duplication of countless processes. This does not have to lead to compulsory redundancies, but re-training, re-deployment and movement between the different public sectors. The ‘silo mentality’ that exists across the public sector often starves frontline services of funding and managers and union officers with a shared belief in public service excellence, need to take this head on. I am afraid that the efforts of the WLGA to date, have not delivered.
The recent collapse of the last remaining attempt to get Welsh Councils to work together (the South East Consortium) was not only very depressing, but set rolling the inevitable Local Government re-organisation, something that will be proposed after the next Assembly elections. The inability of Councils to work togehter in Wales is astounding. Did you know for instance that 21 of the 22 Councils have used the same pay model for formulating their equal pay structure, yet no two models are the same (and did any talk to each other) ?
I see a real commitment to sharing ideas and crossing services to save duplication, as the only way to make serious savings without suffering cuts that will decimate core services. However, I do not yet see the political commitment at Local Government level to do this. No-one will look at the bigger picture, if they think that it will be in any way detrimental to their own patch.
Adam has a good point. If Plaid are going to adopt the radical perspective as quoted from John Lanchester earlier in this thread, they should do so with clarity. If they don’t want to do that and intend to follow the cuts agenda, then they’d be working against Ian Titherington’s views. The spirit of Plaid’s response to this recession would be to protect workers and families, rather than protecting the bond markets or financial system. That is more than adequate for this Westminster election.
Given the comments of Plaid activists it is clear that the aftermath of the credit crunch is going to pose a real dilemma for the party. In the short term the key decision is do they stay in the coalition and take responsibility for the cuts in the 2011/12 budget or do they walk away. In the 2011 Assembly election Plaid will also have to spell out its priorities in a very different financial environment to the one the Assembly has operated in since 1999. By then the Assembly will know what its budget will be for the foreseeable future and the days of conning voters about ‘efficiency savings ‘will be over. They will expect to know what all the political parties in Wales will cut in the period from 2011 to 2015. Under devolution it will not be the Tories or Labour in Westminster who will make many of the decisions that effect Welsh services it will be the Assembly. Playing politics by blaming whoever is in government in Westminster or demanding changes to Barnett will not change the real world. Being prepared to take decisions no matter how difficult is the difference between being a serious political party and a fringe protest movement. It will be interesting to see how the coalition that is Plaid measures up to this challenge.
Bit strange of you to say that Jeff, Plaid has already dealt with difficult decisions in government.
The Assembly has no fiscal powers and is dependent on the Treasury for every single penny of its money. The ‘cuts debate’ in Wales thus takes on a completely different hue.
Plaid today warn that 45000 public sector jobs could be lost if the Assembly carries out the cabinet decision to cut by 3% in terms of revenue and 10% in terms of capital spend. Again in the article the impression is given that this has nothing at all to do with Plaid and is the sole responsibility of the Labour Party. Can we therefore safely assume that Plaid ‘s 3 ministers therefore disgreed with the Assembly’s cabinet decision to look for cuts? If they did disagree then the key question is why are they still in government. If they did agree with the decision then Plaid can’t then argue that the cuts have nothing to do with the party. The Assembly might not have tax raising powers but where the cuts will fall is a decision that rests with the Assembly government not the UK government. The argument of many in local government for example is that if the Assembly ring fences certain expenditure heads then this will lead to larger cuts in other areas. Recently the Assembly wrote to Swansea Council asking why it had not spent all the money allocated in the settlement for education on education. Swansea is not the only council in this position. The Vale,for example, is spending £930000 less on education than the Assembly argues they should do. If next year this money is ringfenced then other services in the Vale will have the bear an extra £930000 in cuts before we start on the real cuts.
As the 2011 Assembly election gets closer Plaid will also find that it can’t maintain the attitude that the Labour Party consists of two factions. The good faction led by Carwyn Jones who basically haven’t yet seen the light but will eventually see that independence is the only answer and the baddies led by the arch devil Peter Hain who are destined to be consigned to the dustbin of history. It really isn’t logical to hammer a party one minute and then get into bed with it the next. The result is total confusion in the eyes of many voters. Given Nick Clegg’s performance last night Plaid needs to work out its strategy for next year very quickly. Outside of Cardiff and Swansea there are many more Labour Party members who will find a coalition with the Liberal Democrats a far more appealling prospect than a continuation of an arrangement with a party whose raison d’etre is the breakup of the UK.
Jeff,
As you know, the cuts will be decided upon by Westminster (either the Tories or Labour) and will be passed down to Wales, for WAG to deal with. No Plaid Minister has ducked a spending decision yet ,so I do not see the argument for breaking the coalition, just because London forces cuts on us. It’s not as if we have the powers to raise tax, unlike say a Community Council. I see that you recognise this but do not believe it relevant to argue for a fair funding formula; something that would deliver an additional £300 million a year. I find this argument a little strange, with respect. I thought that Labour believed in fairness so if you believe in Wales and are in power in London, why not just deliver it?
In your later article, you suggest that the cuts have something to do with Plaid. Of no they don’t Jeff. They are Labour policy, proposed by Gordon Brown and supported by Peter Hain. The fact that Labour talk about investment but skip over the huge cuts that the Welsh public sector faces, is a misleading position that I suggest even you may have highlighted, if you were not proudly wearing your Labour campaign cap in your comments. Plaid is not afraid of making difficult decisions in Government, but nor is it afraid of pointing the finger firmly at the culprits for the cuts, forced upon the people of Wales.
Every man and his dog recognises the split in Labour between the progrssive section willing to work with Plaid and the unionist section. The latter are not exactly a homogeneous bunch as they are found within the membership, the Assembly and Westminster. However, they do share one thing in common. They believe that Wales is the property of Labour and that self-government is fundamentally evil, but only in the Scottish and Welsh context-they would fight for Cuban independence (as would I). Remember Mr Hain’s ‘Balkanisation of Britain’ speech? How could anyone forget it. I have many trade unionist friends in Labour who are pleasantly surprised about the good relationship they have with Plaid in WAG and I suspect that this is what may be upsetting you.
Your suggestion that Labour may prefer going into bed with Kirsty and co may well be considered an option by yourself, but I have met very few others within Labour who would share such an ambition. Let’s face it, your only other coalition was not exactly a roaring success.
All in all, I believe that the current Labour/Plaid coalition has been a great success and far more progressive than the previous Labour Assembly administration. This is I believe the issue bothering you, as it took a Plaid input to release the progressive element within Labour onto the scene in Cardiff Bay and it was done with far less available funding. In terms of the cuts facing Wales, the Tory proposals are more severe because their explanation for covering the cost of avoiding the NI rise is mostly double accounting. Yet, for Labour to pretend that their cuts are not a massive threat to direct public services is not fair to the electorate. I am not going to speculate on the number of posts that will disappear due to Labour’s proposals but I agree with Jeff in that these should be called cuts, and not ‘efficiencies or re-structures or any other nonsense.
On a personal note, I very much respect Jeff’s experience in Local Government and would welcome comments from him on when the cuts come, how Councils can work together to reduce the damage done to services. This is of course assuming that they are mature enough to work together in the first place. Over to you, WLGA.
“The latter are not exactly a homogeneous bunch as they are found within the membership, the Assembly and Westminster. However, they do share one thing in common. They believe that Wales is the property of Labour and that self-government is fundamentally evil”
Deary me. Is this what the discussion comes down to? It’d be like a Labourite coming on here and arguing that Plaid are split between their cultural and socialist factions, and that all cultural nats share a desire to force everyone to learn Welsh at bayonet point.
Let’s raise the standard, and leave the pathetic partisan baiting behind.
When you hear the leaders of the major parties say they will not cut front line services. Thats fine but its not their call. Its the local politicos that have to make that decision based on how much money that they get from central government. Right?
Adam,
I was just responding to Jeff’s comments and as he pointed out, I am a Nat, as you call me. Some of his comments were relevant and some frankly, needed responding to. There is a split within Labour and I welcome it because if it did not exist, then there would be no coalition. I am not being critical of Labour for there being a split, but just for Jeff apparently being in denial of it. The opinion of people like Jeff Jones and Peter Black are crucial to the future of how we manage the cuts that we will inevitably face, and I want to play a part in that debate.
Mike,
Absolutely right. This is exactly what I want Jeff to comment on. From my perspective, I want to see a miriad of suggestions that do not take the easy and ultimately less democratic route of outsourcing and privatisation. Obviously, others will disagree with me on this but from my experiences with such options, a well run in-house option is always a better one, in the long term. One of the great bonuses of the current coalition is that this is generally the line they take.
There must be some kind of reason why Peter Hain completely ruled out a coalition with Plaid, only for it to actually take place. The idea that he’d simply change his mind is a little odd. I don’t think it’s partisan to discuss that “split”, in fact it’s crucial to how Welsh politics will develop in the future.
Luke
It’s not partisan to discuss the (often grossly over-simplified) dichotomy within Welsh Labour, and more than it is partisan to discuss the split within Plaid. What I was objecting to was all the tired old nonsense Ian hung around it. Unionist Labour = bad, devolutionist Labour = good is not only ignorant, it’s really boring.
Adam,
I will admit to being a little simplistic about the make-up of today’s Labour party but ignorant-I don’t think so. I did not deride all Labour members who oppose the coalition with Plaid as bad, but I do have an issue with some of them who have in the past, compared my party to fascist organisations within Europe. Fortunately, no such comparisons are made. A certain Mr Bevan had no time at all for Plaid, but I consider him probably the greatest democratic socialist the world has ever seen and one of the greatest Welshmen who has ever lived.
Talking of simplistic, I.m afraid that your attitude about Plaid being two groups is also a little away from reality. There indeed different groupings within Plaid, but any party wanting to represent the whole of Wales would inevitably have such groupings-as do all the main parties in Wales.
“Outside of Cardiff and Swansea there are many more Labour Party members who will find a coalition with the Liberal Democrats a far more appealling prospect than a continuation of an arrangement with a party whose raison d’etre is the breakup of the UK.”
I suspect you will not find the same feeling amongst Liberals who know the true nature of Labour who would rather run a minority administration than share power with Labour.
“I did not deride all Labour members who oppose the coalition with Plaid as bad”
“…they do share one thing in common. They believe that Wales is the property of Labour and that self-government is fundamentally evil”
I’d say deriding all such Labour members is precisely what you did! But let’s not get hung up on it, or for that matter the supposed split in Plaid. We both know that all mass political movements by necessity accommodate divergent and competing ideological positions, and that most face a tension between attending to their base and reaching out to new voters. Often, what is portrayed as a “split” in in fact a spectrum of opinion with vast areas of overlap in the middle. This goes for Plaid, Welsh Labour, Tories, Lib Dems etc. It suits Plaid to consistently try and define Labour in terms of two parties because it likes to imagine it can pit these supposed factions against one another and in so doing pick them off. Sadly, it merely demonstrates how poorly Plaid’s strategists understand what makes their opponent tick.
Adam is right about the Labour Party but going into what makes the Labour Party tick doesn’t move the debate regarding public services any further forward. What ever the reasons for the present need to cut the deficit no one in mainstream politics disputes that the deficit has to be cut. The reasons are set out quite clearly in a couple of paragraphs in the article by John Lanchester. Unfortunately for many on the Left we still live in a global economy dominated by capitalism. You simply cannot ignore the reaction of the international bond market to the result of the UK election and the subsequent policy decisions of the next UK government. Whoever runs the UK will have to reduce the deficit. The argument revolves around the four elements in this deficit reduction economic growth, taxation, public expenditure cuts and the effect of inflation. The size of the public expenditure cuts will depend on whether Darling’s estimate on economic growth is right for a start. If the new government also put up VAT to 20% as the Treasury wants then this would also raise about £8 billion. Unfortunately none of us know what is going to happen because no one is being honest with the public. We can only guess but the odds are that the cuts in public expenditure will be far worse than those imposed in the 1980s. Ian is right and today’s Sunday Times confirms that cuts are already happen even if many of the politicians particularly at a local level don’t realise this.
We have to get real. I don’t support ID card or Trident. But in the short term 2011-14 cancelling both projects will not deliver the savings required. Neither will collaboration although obviously it makes sense. The time scale is too tight and the will isn’t there. Only this week another colloboration project in England bit the dust as Slough pulled out of an agreement with two other authorities citing risk and the fact that any savings would not occur for at least four to five years. There are going to be cuts in the next Assembly term and there should be an open and honest debate in all the parties where those cuts should be. The real danger is that public bodies will take the easy way out and just have a uniformed cut across the board. Some of us have been warning for years that local government should prepare for the lean years. Unfortunately too many local authorities have never worked out a long tem budget strategy. For too many the budget process has been a one-off designed to balance the books and keep the council tax below the capping level. Decisions have been postponed and as a consequence the effect of the cuts will be even greater.
In the long run we also need to have a real debate about the relationship between the state and the individual. We need to think outside the box and look at new ways of delivering services and reacting to the real world as it exists in 21st Century, not some mythical world where everyone is still talking about the ‘Miners Next Step’ and the way to the socialist nirvana. If we don’t have this honest debate and also respect those who have different views on the issue then the future could be very bleak indeed. In my view the aftermath of the credit crunch could have the potential to change the political world as much as the First World War and the 1930s did in the 20th Century. The financial crisis has killed off many of the certainties that influenced the world view of both left and right in the past. The effect of Nick Clegg’s performance for 90 minutes on Thursday night also shows that out there many ordinary voters want something more from a discredited political class that in their eyes has run out of ideas.
Jeff,
Thanks for such a constructive response and I hope that all the Council leaders and AMs in Wales reade this.
“is not only ignorant, it’s really boring”
So there you have it folks. Anyone disagreeing with Adam Higgitt on this blog will be insulted as being ignorant and boring.
Adam the fact is there are very clear and obvious splits between factions in labour. As Luke stated Peter Hain made a clear statement, in his role as Secretary of State for Wales no less, that a Plaid-Lab coalition would never happen. That it did happen only shows that there is a split. It is not partisan to point that out but a political observation. Personally I am a supporter of a red-green agenda and thus am pleased that there was a split and that there was a faction within the Labour party that were willing to stand up to the Peter Hain’s and Paul Murphy’s of this world that would have happily created a scenario where the Tories were in power in Wales by scuppering the One Wales deal.
Carl
I didn’t call Ian ignorant and boring. I said the anatomising of Labour in the throwaway way he did it was ignorant and boring. And I’ve explained myself since.
“the fact is there are very clear and obvious splits between factions in Labour.”
No, that’s not a fact at all. It an opinion, and one inspired very largely by those who oppose Labour, and borne out of a need to spin a line. It’s not one I share. I’ve explained clearly why that is. By your definition, every senior party figure who makes a statement of intent not subsequently backed by his party is evidencing a split. by that logic, Plaid are split on nuclear power.
“You simply cannot ignore the reaction of the international bond market to the result of the UK election and the subsequent policy decisions of the next UK government. ”
Well of course, but equally we are seeing Darling, Osbourne and Cable playing to that gallery rather than being honest with the electorate. I genuinely believe that either those three are deliberately over egging the general doomsday messages to play to those market men, or are lying to the public over specific cuts because they want power before honesty. Neither of those situations are acceptable.
My view is actually the former, as the economy recovers, we will pay down the debt in a longer term way, and despite some obvious cut backs it will balance out over time. I think the deception is that whoever gets in will do so make general statements in the markets, ‘protecting’ or ‘ringfencing’ any difficult potential cuts, then claim glory when things are not quite as bad as we once thought and we can pay back the debt longer term.
I don’t make a party political point in that, at the end of the day, Plaid won’t be in charge of the treasury. The only party political point is to hopefully all agree and laugh at the death of the ‘Labour investment vs. Tory Cuts’ line.
Regardless of the economic mess, we cannot have an election on the whim of those markets. People are making the point that the markets don’t like a hung parliament, as if that is sufficient reason to dismiss people’s democratic will. We should all vote for the candidate in your seat that you think is most suitable to be your MP.
Indeed, and if Jeff Jones’ point about placating the markets is true (and I believe it is) then it doesn’t matter which UK party wins anyway. If a new relationship between state and individual might be required, then surely predicating any economic strategy on growth is also misguided, if it doesn’t take climate change into account. Clearly returning to business as usual as all of the parties are advocating, will further damage our environment and create long term climate problems.
Adam,
I would argue that it is fair to say that Plaid is split on nuclear energy. Personally I don’t believe it as I think everyone is signed up to the same page but obviously someone like Ieuan Wyn has to balance ideology against employment. I would imagine that he is on the party line of opposing nuclear power in principle but considering the damage of Gordon Brown and New Labour’s recession he can hardly really argue against so many local jobs. That said I can see how the argument can be made that there is a split.
The difference is that here, and possible on other issues, Plaid and other parties are split on issues by issues. Their core values and direction remains supportive. However, to me, and the majority of people who are not former Labour party workers and supporters I believe that it is quite clear that there is a distinctive split through Welsh Labour on the ideology and direction of the party. It is not on a particular issue but on how the party as a whole should operate and progress. That is where there are underlying splits for Labour. It is not as simple as Westminster vs. Cardiff as you have some very clear anti devolution members at the Assembly, and some pro devolution in London but I think it can, for argument sake, be reduced to a unionist vs. devolution battle.
Being neither a Gordon Brown or Labour supporter, it is not easy taking issue during election time of unfair criticism of the man and party I will vote against.
I refer to … the damage of Gordon Brown and New Labour’s recession …, the recession is not owned by the man or party, not even previous men (and women) and their party, the recession belongs to every person who indulged themselves during the past 20 to 30 years.
Each and every one of us holds a certain responsibility, to write otherwise is dishonest.
“The recession belongs to every person who indulged themselves during the past 20 to 30 years.”
The period marked by the establishment and then entrenchment of Thatcher-Reagan economics, incidentally.
Much as I am reluctant to agree with most of John Tyler’s views, his comment above is probably right. It assumes ‘superhuman’ prescience in Gordon Brown and the Labour government that they could predict the recession (although the signs appear to have been there in pretty plain view) . No-one in their right mind thinks that Labour has wished this on themselves or us. Hindsight is a wonderful thing.
Where they could be blamed in many respects is in their actions or inactions in response to the crisis, in their poor communication with the electorate and the human fallibility, arrogance and dishonesty shown by the expenses saga. For this, they will pay dearly in the election and rightly so.
It amazes me that this election is still all about cuts in the public sector when what I and probably many of the electorate are wanting to know is what solutions are being proposed to solve this situation? In my view, we need to grow the economy – ie. make, build, invent and sell more stuff. To do this we also need to reconfigure the financial structures that underpin the economy and get to a more locality/community centred system. This will enable us to afford quality public services, avoid most of those damaging cuts and to weather Mr.Titherington’s ‘perfect storm’.
It is also ludicrous to compare the current recession with the 30s. Anyone who has any knowledge of history or has read anything about the Depression in the US will understand that there are very few real comparisons that can be made – it is a different era. Nevertheless, study of and lessons learned of how the US got out of the 30s Depression should be required reading for the current political class. In its simplest terms, it was FDR’s political leadership, New Deal public works programmes and, in large part, the military/economic stimulus of World War II. The New Deal programmes were incredibly ‘wasteful’, inefficient and corrupt but more or less ‘did the trick’. There are many many infrastructure public works type projects that could be done in Wales – it requires political will, more devolution, leadership and, preferably, without a war.
Who will provide this? That’s the question our politician’s should be answering.
“the recession belongs to every person who indulged themselves during the past 20 to 30 years.”
A fair comment John. I would however argue that Gordon Brown and New Labour in continuing the Thatcher-Regan economic approach encouraged a society built on spending and debt and allowed the casino gambling style banking system to flourish as, by his own admission, they failed to regulate the banking system effectively.
The title of this post, a perfect storm, is quite apt as the way New Labour government created the conditions for the perfect economic storm we are undergoing.
Whilst you are right to suggest that possibly everyone has a responsibility in this it is, in my view, undeniable that the government of the day for the past 13 years must share the majority of that blame.
Over here in the country that stimulated the recession by financial irresponsibility on gigantic proportions people are watching the FCC’s investigation of Goldman Sachs and the allegations of fraud that involved Billions of dollars being made on bad bets. Its those at the bottom of the barrel, the teacher, the fireman etc that will pay the price. therefore when I hear people speak of cuts I ask myself who will be affected by these cuts? binmen, secretaries? teachers? council executives? I disagree with John Tyler that we all share responsibility for the recession. Its those in the financial sector that played monopoly with money that was not theirs, and its the government (whether the US or UK) that permitted them to do it. Phil Gramm and Bill Clinton have a lot to answer for. And I suspect that Obama will get tarnished in this current scandal since Goldman Sachs donated 1 million bucks to his campaign. I think that the UK election may yield some surprising results
Carl
“to me, and the majority of people who are not former Labour party workers and supporters I believe that it is quite clear that there is a distinctive split through Welsh Labour”
It is possible to achieve some quite surprising survey results by excluding the views of those who might disagree with you. It doesn’t mean those conclusions should be taken seriously. Former staffers and supporters may have a better insight than the people to whom you are talking, many of whom are probably supporters and workers of other parties.
More broadly, my difficult with your analysis is that you imagine that the national question to be the defining issue of the Welsh Labour movement, as it is with Plaid. It just isn’t. It’s been an important discussion and debate within the party for almost as long as Labour has existed, it generates strong and passionate disagreement, and there are certainly people within Labour clearly identifiable as being devolutionists and centralists, as well as many more who do not feel as strongly one way or the other.
But the party has spent as much – if not more – time and energy debating things like the size and reach of the market, Europe, nuclear disarmament, broader constitutional reform and, more lately, contestability in public service provision. The core values of Labour revolve around these kinds of topics as opposed to just the question of home rule, important as it is. Because Plaid supporters define all politics by where people stand on the national question, they imagine everyone else does.
Adam,
I wish that I hadn’t mentioned any Labour groupings now. I blame Jeff.
With respect, we do not define all politics by the national question as we are very much an internationalist party also. I defined no-one by the national question when it came to bombing Iraq.
Well yes, Jeff did bring it up first, though I’m struggling to see it’s relevance now. anyone who is out canvassing in this election campaign will have been exposed to massive levels of apprehension amongst workers involved in public services. The cuts are going to be epic. The amount of money spent on rescuing the financial system was colossal, and it’s repayment will be recouped from ordinary people. The private sector, especially at the smaller scale, will also take a hammer blow as it will lose customer purchasing power and possibly public contracts will lose value. A party fighting to mitigate those cuts whether through taxation, funding reform (as Plaid proposes) or other measures, is defending the people of Wales from forces that do not care for any of the values we represent. Plaid appears to be proposing to defend our way of life, and until business as usual has been ruled out and fiscal justice delivered, not a penny in cuts is justified (even if they are inevitable). This of course is a more radical perspective than the one advocates by Plaid, but they are the closest party to my view.
“my difficult with your analysis is that you imagine that the national question to be the defining issue of the Welsh Labour movement, as it is with Plaid”
Not at all Adam. I believe the national question and its impact on the Labour party is a symptom rather than the cause of a deep split in the Welsh branch of the party
Carl
That is a more interesting theory, but still not one I share. Some of the most ardently new Labour people inside the Welsh Party that I know are also the most supportive of devolution, so I’m not at all sure the cleavage is quite as you suggest.
We’ll see. If you’re right there will be some sort of schism in the next few years. In the meantime, I reserve the right to distinguish between those who put forward such an analysis because they believe it will happen, and those who do so because they want it to happen.