The geek who stuck the boot in
Bubble — By Duncan Higgitt on July 24, 2010 7:00 am
Eurfyl ap Gwilym at his Cardiff home. The picture behind him features his four children
PAXMAN. The crowd pleaser. A good starting point.
“I was never angry. It was all quite silly, really. It was all last minute and I was called on to talk about the cuts. I was aware of his public persona, of his being patronising. But early on he got his facts wrong and I thought that I had to address that.”
He is aware of the Facebook group, and that this now-classic face-off with Newsnight’s grand inquisitor migrated swiftly to YouTube, but he is surprised to hear that it had over 86,000 hits.
“One of my sons is an investment banker, and all his work colleagues said: “I bet he was tough on you with your homework”, which of course I was.
“The whole thing was silly because we didn’t have a sensible discussion. I was in the BBC Wales studios (in Cardiff) and he was in London. I couldn’t see him. If I had been in the Newsnight studio, I could have leaned across and shown him the right papers. But once he was on the back foot, I thought I’d put the boot in. I thought it would be morale lifting.”
It certainly was. The Plaid ranks fizzed for days afterwards. “In the taxi on the way back (from the studio), I had the first of many phone calls, one from Dafydd Wigley.” However, his approach to his work is what inevitably led him into the Paxman showdown.
“In all that I do, I’m very careful. I use only Treasury figures or those from the Office of National Statistics. That way, you can quote them back at people. I’m highly numerate and have a good memory. I’m a bit of a bore, in fact.”
Eurfyl ap Gwilym’s considerable talents for recall become evident when we are deep into discussing the mechanics of the Welsh funding settlement. He quotes a table, the paper in which it is found, section – almost the page. And he subsequently turns out to be spot on. A fact checker’s dream.
All of this, along with an impressive CV as a captain of industry, has provided Plaid Cymru with serious firepower on economic argument. His reputation was well demonstrated in the reaction from political opponents to Plaid’s 2010 General Election manifesto. When it became apparent that “Eurfyl has costed it out”, initial cries of fantasy economics quickly melted away.
Born in Aberystwyth in 1944 and educated at Lluest (“the first official Welsh language school in the country”) and then Ardwyn Grammar School and King’s College, London, ap Gwilym regards his career as having “two parallel strands”. He has spent considerable amounts of time working in the City, either in finance or companies that service its requirements, such as IT (“I have homes in Cardiff and London – in reality, on average I live in Swindon, although I never visit”). Here in Wales, he is well known as deputy chairman of the Principality Building Society (he has just stepped down from the role), and as a director of its secured loans business, Nemo Personal Finance. He holds a number of board seats, both in business and in public appointments to institutions like National Museum Wales.
Surprisingly, he has a PhD in physics. “I’m not a trained economist. I learned it all in business and banking. I picked up a lot, including during short spells at Harvard and Insead. It all interacts. But I’m more finance than economics.”
What his time in the Square Mile also did was introduce him to a highly talented and successful Welsh diaspora, such as Dyfrig John, the former chief executive of HSBC. And, although having been refused entry into the House of Lords following a passage of events that still rankles within Plaid (ap Gwilym says the whole process “hit a wall of thick treacle”), he is still well acquainted with ennobled Cymry such as Ivor Richard.
As such, and given his appreciation of certain aspects of Conservative fiscal pragmatics such as the “Barnett bypasses” of the 1980s, it is tempting to bracket the former Plaid chairman as an economic nationalist. But his convictions are more rounded.
“I joined Plaid in 1963. There were lots of things, like Treweryn and Cymdeithas going on. Wales had become an interesting place. I also had a brother-in-law who rekindled a natural interest in Welsh history.”
Although ap Gwilym described his involvement in finance and politics as parallel, there is plenty of crossover. For example, he would like to see more like himself back in Wales providing mentorship for businesses here. His involvement as a founder of the Plaid Cymru Research Group seamlessly mixes these two existences. And it was one or the other or both that led him fairly early to the current political elephant in the room.
“I’ve been saying for 15 years that the Barnett Formula needs reforming. Incidentally, Joel Barnett (now a lord) is a very nice man and eternally embarrassed to have his name attached to it. He said he never appreciated its convergent characteristics, that it might have been a Treasury trick.”
Ap Gwilym, a self-confessed “Barnett geek”, places the blame for the current focus of interest on the ramifications of the formula for Wales upon the just-gone Labour Government and Alistair Darling’s decision in 1997, upon being appointed as Chief Secretary to the Treasury, to apply the formula rigorously (it is here that he refers exactly to the piece of piece of paper that set the train in motion), a decision which subsequently squeezed funding for Wales.
“The Barnett formula is not complex or intellectually challenging. There’s just lots of little bits to it. Some of the ways the devolved sums are arrived at are absurd. For example, we had a good laugh when I was giving evidence to a House of Lords select committee that the UK continues to contribute to decommissioning nuclear power plants in the former Soviet Union. The Treasury treats this expenditure as if part of the decommissioning is devolved to Wales”
Political opponents ask how Plaid squares the circle in asking for what they call more money and the party calls a fair settlement from the very place that it is ultimately seeking independence from. Ap Gwilym doesn’t see a contradiction. “I think from time to time some psomeeople in the party may find it confusing. Wales needs to progress towards more powers to build its social and economic structures and while we are part of the UK we should get the benefit. In the meantime, we should work towards becoming self-sufficient.
‘’When considering taxation and public spending it needs to be borne in mind that in a common fiscal system such as the UK there is a close correlation between relative GVA per capita and relative tax yield per capita. So if we want good public services we need to focus on raising GVA.’’.
Which brings us to the Holtham Commission, whose final and recent report proposed tax varying powers for the National Assembly. Ap Gwilym calls the commission’s work “magisterial”, that it “completely demolishes any vestige of justification for the Barnett formula put forward by Labour” and argues that it takes forward the question of funding in a way that the Calman Commission did not in Scotland.
‘’The Holtham Commission has done a very rigorous job in quite clearly showing that Wales is underfunded and Scotland is overfunded. It also shows how to arrest convergence, However if you do so you will lock in the under funding unless there is a one-off correction. When there are spending cuts, you get negative convergence but it is not as great as positive convergence when spending is increasing because the cuts are offset by inflation. Thus while Wales may now receive an additional £15-£20m a year through negative convergence, when it is positive Wales loses well over a £100m per annum.’’
“I’ve long been a big advocate of allowing the National Assembly to raise its own revenue, because if you don’t have the discipline, the spending of money may well not be focused in the right areas.”
However, ap Gwilym concedes that a lot of this is currently moot, as the new Westminster coalition government has effectively kicked the Holtham recommendations into the long grass. He sees this as part of a bigger picture, citing an aside made to him by the Earl of Mar, whose ancestor negotiated the 1707 Act of Union between England and Scotland: “We got a good deal”.
“The truth is that at Westminster, Wales counts for far less than Scotland. My old friend (the late Plaid AM) Phil Williams says he was once told by Dawn Primarolo (the Bristol South MP and former junior minister in the Blair government): ‘But you must realise that Wales accounts for less than 5% of the UK’s GDP’.”
Growing the economy is the purpose of the Welsh Government’s Economic Development Programme, launched a couple of weeks ago by Ieuan Wyn Jones, the Deputy First Minister.
Ap Gwilym appreciates the frustration aimed at the document from some quarters. “It’s quite a long document, with very few numbers. Businesspeople like numbers, they quantify things all the time. But it must be frustrating for Ieuan. There are some really big issues to address with Welsh business – some cultural. Over the whole of our historical development, we’ve never had a terribly strong mercantile tradition.
“Take Cyfarthfa (the first major ironworks in the world). It was financed from outside and the money from it went out of Wales. We were like an Opec country – the exporting of coal did not lead to great success for Wales.”
Along with a historical narrative, Wales has more recent economic developments to adapt to. “In the 1970s and 1980s, there was foreign direct investment (FDI) in Wales by companies that wanted a foothold in the European Union. What’s happened since eastern European countries have joined the EU is that these companies have found highly educated (often better than ours), highly skilled and cheaper workforces than we have here. We have got to respond to that, because over the decades not enough attention has been paid to indigenous businesses.”
Another challenge for the Welsh Government comes in the shape of delivering the ERP. “This is a very radical strategy, with some sound analyses. One of the big moans in business is how painstakingly bureaucratic business support has become. I personally believe that absorbing the Welsh Development Agency into the economic development department was a dreadful mistake. Before that, it produced its own annual report. You could see what it had done. That is no longer possible.”
But ap Gwilym is surprisingly sympathetic in recognising the incongruities in approach between the public and private sectors. “There is a different ethos in the Civil Service. They do things well, but they are not risk takers. As any venture capitalist will tell you, if you have a portfolio of 10 investments, three or four will always fail. That doesn’t fit at all with the Civil Service ethos. It is much more concerned with the stewardship of public funds.”
The ERP gives Plaid a platform at next year’s Assembly elections now that Welsh Labour has stolen its Barnett reform clothes. Ap Gwilym wants the party to begin differentiating itself from its coalition partner. “I did a radio show and I was asked to defend Labour’s Budget. I said I had nothing at all to do with Labour.”
He remains critical of Labour’s “laudable but limiting” political ambitions. “I was talking with two Labour councillors in south Wales and they were telling me about how they’d fought to have a new hospital built in their area, how this was a positive thing. They thought that was their job, confined to delivering a hospital but not delivering economic prosperity. I have nothing against what they have done, but I don’t think it goes beyond that. There is a danger that we focus too much on the public sector. We also have to think of the three quarters of people in Wales who work in the private sector.
“We get the Comprehensive Spending Review in October and then we’ll get a clearer picture between then and the Assembly election about how that the spending cuts can be managed. We can’t simply say we don’t like cuts. We have to talk about where they will have to be made.”
This approach from ap Gwilym might put him back on our TV screens come next May. Jeremy Paxman might want to take the week off.
Tags: Eurfyl ap Gwilym, Gerry Holtham, Plaid Cymru
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15 Comments
‘We can’t simply say we don’t like cuts. We have to talk where they have to be made’. As some of us have been saying for months. I look forward to seeing where Plaid’s politician set their priorities for the next Assembly term and then we meet have debate which rises above the cosy club in the Assembly. Let’s also hope it gets above the ‘cut Trident’ level.
I watched the Paxman interview and all it illustrated was that the Newsnight researcher hadn’t covered all the angles. The debate about more money for London which was seen as Eurfyl’s killer punch is easy to answer. If you take into account housing costs many parts of London are in fact far poorer than parts of Wales. London isn’t just the City as the excellent documentary on Channel 4 this week where the Chief Executive of Tower Hamlets went undercover to look at services illustrated. If you look at other statistics they also show that the issue of public expenditure and economic well being is much more complicated than statistics based on Wales and England. Bridgend, for example, on many statistical analysis is far more prosperous to take just one example Plymouth.
The real debate about economic prosperity in the future should centre around the argument of whether the all Wales approach as supported by Plaid is really the answer. In my view it isn’t, and public money is being wasted to develop the idea of a Welsh economy which doesn’t and never has existed. For those of us who live in the South East the real driver should be as in the rest of Europe – a city region based on Cardiff with real economic power and political leadership.
So why isn’t he First Minister? Can we install him via coup? (not joking either)
I read yet again a response by Jeff Jones,which follows on to a “stellar” performance on the Plaid Cymru indocrination service that is called BBC CYMRU which convinces me that as a non-Labour voter he should stand for the Assembly and become our First Minister. The “regime” of King Rhodri has allowed a spinter and “splitter” group to become part of Welsh government which unfortunately is “tuned” to the Welshification of Wales rather than on economic reality. I come from the same area as JJ which is almost totally Anglicised and other than for rugby saw itself as an integral part of UK in totality and the idea of Wales becoming a seperate and independent country and relying on its own income to fund its lifestyle was a joke.If we are not careful with the quality of education/health service and fundament problems of “underclass” we are going into Third World status in certain parts,whilst the very rich areas like Llandaff (full of BBC/S4C types) are living on different planet. Can somebody tell me what the average working class child gets in educational funding in English language,as compared to middle class child educated in Welsh? Get going Jeff and stand and there would be vast support for you from both Labour and other voters who respect your intelligence, honesty and commitment to us remaining in UK, which is more than can be said for part of One Wales government in Bay of Despair.
Parts of Wales becoming like the Third World? You don’t know you’re born mate.
well the ‘all wales approach’ jeff jones refers to is actually supported by the welsh assembly government……which includes the welsh labour party…….to which jeff jones of course belongs!!! indeed it would not be unreasonable to expect a welsh govt……which the national assembly of course is………to seek to develop the welsh economy on an all wales basis…..that is surely among its reasons for existing?
Also while it is sad to see there are still a few people in wales….like howell morgan……who seem unable to come to terms with the fact that wales is changing as a nation…….and that is a veryy different country from the one that existed even two decades ago……i would neverthelessy concur with him that jeff jones should seek a place at the welsh assembly as a matter of urgency!! Given jeff jones obvious disdain for the current welsh govt why does he not himself seek election to the senedd? If he declared himself a candidate his election to the place would…..if howell morgan’s gushing comments are anything to go by………be a mere formality.
And once there jeff jones …having of course been swiftly installed as first minister…..could put his ‘solutions’ to the problems besetting the welsh economy into practice……….and so lead the welsh people from our current wilderness……..and into the promised land……….jeff jones…..a nations awaits…….
Somewhere within the bloated, decaying flesh of Welsh Labour is a perfectly legitimate political party straining to get out. We need to bear this in mind as we face the Con-Dem onslaught over the coming months and years.
There are many decent socialists among the Celtic world’s answer to the Cosa Nostra – although, come to think of it, comparing Welsh Labour with the Maffia is an insult to what is, by comparison, an ancient and honourable fraternity. When the son of a capo steps into his father’s shoes, he knows that he places himself in the firing-line – literally. He’s man enough to take the consequences of his privileges. When the scion of a Welsh Labour dynasty steps into whatever sinecure has been invented for him, the idea that he might have to face any adverse consequences will be, literally, non-sense.
It was said of the Bourbons that they forgot nothing, and learnt nothing. Again, a comparison with Welsh Labour would be unfair, since they remember nothing. Intelligent idealism amongst them died when ‘In Place of Fear’ went out of print, and they are utterly clueless about the chronology of their own misdeeds, let alone the narrative of the society on which they’ve been battening for generations. Even as ODC reactionaries they don’t come up to the mark, since they’ve never made the slightest effort to defend the achievements of earlier generations. They betrayed the miners, sat on their expenses-bloated bottoms while the Tories started to dismantle the Welfare State, and do their best to undermine the efforts of committed activists who put their safety, their careers, and their liberty on the line in the cause of the people.
All in all, they present that particularly dangerous combination of low cunning with boundless stupidity. One manifestation of this is the scapegoating of a minority for their own chronic failure. For them, it happens to be Welsh-speakers, but of course any group would do when it came to the crunch. The targeted minority, according to the standard paradigm of reactionary bigots, are simultaneously tainted with rural backwardness and taking over the most select parts of our cities, trapped in an archaic way of life and too clever by half in their mastery of modern institutions, repulsively alien and masters of disguise who move among us at will. Sound familiar?
So yes, we’ll have to overcome our visceral loathing for the incompetence, the corruption, and the wilful stupidity with which Welsh Labour has become synonymous. There are some decent and principled socialists lurking there amongst that absolute shower of fools, knaves, and self-servers: we must be ready to support them, and offer them friendship and respect, when the time comes.
“Toby”
An interesting and colourful tirade which, apart from begging the question of how this thread came to be about the Welsh Labour Party, prompts the question of how such an apparently venal and inept organisation managed to top the popular vote in every Wales-wide vote since 1922 except one, and most often by a very substantial margin indeed.
If we accept your analysis only two conclusions are possible: either the voters are very stupid or Labour’s opponents are criminally incompetent.
No its not that the electorate are stupid, it’s just poorly informed!
Adam, it’s probably a bit of both.
Lets face it, if you were brought up in Wales, you were “educated” (by almost everyone you know) that Labour are the be-all-and-end-all, that joining a union is the most important (and radical) thing to do. Your favourite band (probably) spout Marxism and Trotskyism in meaninless streams, and that makes it seem cool. So you just “are” Labour. It’s as natural as being Welsh. Why would you be anything else?
The failure of other parties is their failure to challenge and break this indroctination, this Union/industrial mentality that is an anachronism in the 21st century. I’m certainly bringing my kids up with the point-of-view that Labour is as bad as the “demon” Tories, and everyone else come to that.
Think for yourselves people. Don’t vote Labour just cos your grandad did, or cos the Manics tell you its cool. Vote Labour cos they have policies worth voting for. Which, at the moment, they don’t.
I like the way that some people believe that somehow Labour Party members have to slavishly follow whatever the Assembly coalition might argue is the correct policy. It’s the sort of attitude as both the Miliband brothers have pointed out that was partly responsible for the election defeat on May 6th. The Labour Party is at its best when it is open and debates issues. It is at its worst when it follows the dictum of Herbert Morrison that ‘Socialism is whatever the Labour Party does.’
I am a member of the British Labour Party which despite its mistakes and it has made quite a few in the past 13 years is still as the last few months have shown the only hope for progressive politics in this country. I’ve always supported devolution as a principle on the grounds that it can lead to better governance and more accountability. Unfortunately in Wales it has become tied up with nationalism and the need somehow to do things differently because we are Welsh. In fact the problems facing much of post industrial Wales are no different from those in the other parts of the UK and even Europe that went thorough the same industrial experience. For some criticising the Assembly is seen as being some sort of traitor. We need to have a much more honest debate with regard to the problems in Wales and the solutions which reaches out beyond the cosy consensus that exists in the Bay. Changing the low GVA figures for Wales in a map of UK GVA figures used in an article in this week’s FT should be the goal of every single politician in Wales no matter what their politics. I’m not that interested who historically is to blame. What matters is the future and for too many young people compared to the one I faced 40 years go it looks to be a pretty bleak one.
Too many of the comments from far too many Nationalists are personal or aimed at blaming everything on the Labour Party. I would much prefer to see a real debate on real issues. My view is that there has never been a Welsh economy and there is nothing that links North and South Wales in an economic sense. Spending money on improving road, rail and air links is a complete waste of public money for anyone living in South Wales. Rather than personal attacks, provide the evidence to show that my thesis is incorrect. Wales needs policies to equip the area for the challenges of a 21st century which will be dominated by the BRIC countries. A bit a fun on Newsnight and an extra £300 million a year is meaningless unless the money is directed properly at wealth creating policies.
Sadly too many of the policies are inspired by nationalism with a small n and the need to be different and without much thought of the consequences I’m afraid. Look at this week’s report from an Assembly committee on the CAP and farm subsidies. Rather than supporting a complete reform of the system which many would argue would be in the interests of the majority of people living in the UK and Wales we have concerns about the effect reform might have on a small part of the Welsh economy. Too many politicians talk a good game. Renewable energy is a classic example of that. They might want a great deal of the country to be covered in wind turbines particularly if it isn’t in their constituency but they then don’t work out how the country can benefit from the potential economic spin offs. We have a region with a strong engineering tradition and yet all the turbines will be made in other parts of the EU such as Denmark. We have the harbour facilities needed to develop turbine production for the offshore wind turbine industry but instead that it is now being developed in the North East of England. Talking about the new green economy is easy but action is a little bit harder.
Jeff, of course that Welsh Assembly would stick up for farmers in Wales. Jeese.
The CAP reform may have benefited agri-business in the UK as a whole, but would hit other agri-businesses in France and other parts of the EU.
Following your arguments along, shouldn’t the UK government shouldn’t stand up for UK agri-business as CAP reform would hit other parts of the EU?
Lets face it Jeff, your arguments are not based on logic.
“Is there such a thing as a Welsh Economy?” – a debate between Eurfyl ap Gwilym and Jeff Jones.
To see two such formidable and knowledgeable thinkers locking horns in public would be quite an event, I’m sure. I urge WalesHome to make it happen!
leigh, It wouldn’t be a contest. I think we all know who would come out on top.
Jeff, according to your questioning of the existence of a Welsh economy, is there such a thing as a British or even English economy? You sit on the sidelines sniping against anything that is Welsh. Your arguments are not based on evidence, just the fact that you put Britain before Wales.
Jeff – there are different economies, a Maesteg economy, a Bridgend borough economy, a South Wales economy, a Wales economy, a UK economy, a southern UK economy, a Euro-trading economy etc etc.
The Assembly govt – or Plaid at least, I’m not sure of Labour’s line (it may have changed now that they’re not in power) – is to electrify the mainline rail service from Paddington to Swansea (your South Wales and Euro economy if you like, but what does Aberystwyth or Llandudno or Merthyr even get out of that?!).
The Assembly govt is also spending money on opening the railway from Cardiff to Ebbw Vale, the Gwent valleys and Cardiff economy (what does Bridgend or Llanelli or Aberystwyth get out of that?!).
The Assembly Gov (OK, Plaid in power) are straightening the road around Builth Wells. It could be called North-South road, nation building … or … it could be strengthening the economy of mid Powys – I know people travelling to the Royal Welsh Show last week (the UKs biggest, although full of those awful farmers) are glad But what do people in Milford Haven get out of that?!
Fact is, the Assembly Govt is trying, for all its sins, to strengthen the WELSH economy because it’s the Welsh Government Like you, I agree, this isn’t the economy which one deals with and works within 100% of the time. We nip in and out of different economies. But one economy is the Welsh one, even if it is at time only dispersing money on a Welsh context. Having a govt which is fighting for this section of our economy, I believe is a good thing. You’re right about wind-turbines … that’s why I guess Ieuan Wyn Jones’s economic document targetted the enivoronmental economy. You’re right about dealing with Europe, that’s why Plaid want to see the electification of the railway.
I don’t agree with you about CAP because, and for the same reason that I supported the miner’s strike, taking things away as they are now, it would lead to a green dessert with only holiday homes and seasonal work in a large part of Wales. It doesn’t affect many people in Bridgend, granted, but then, neither does closing Sony affect people in Llanrwst or Fishguard.
The Assembly gives us the opportunity to do things differently. Sometimes radically so – ‘learning by playing education’ for our youngest kids; sometimes a little differently – free buss passes for over 60s as you discussed lunchtime on Radio Wales or organ donation; other times prioritising what wouldn’t be prioritiesed otherwise – improved north – south roads, new railway lines, badger cull to avert TB etc.
Bridgend has done quite well from the ‘Welsh economy’ this ‘invented’ economy. The invented WDA, first esposed by DJ Davies of Plaid in the 1930s, enacted by Labour in 1970s brought jobs to your area. That time has gone now. But if Wales didn’t exist, then the WDA wouldn’t have existed and I’m not sure those factories would have come to Bridgend. In any case, your party swallowed up into WAG, which, I believe wasn’t a good idea. The WDA didn’t cure all our problems, but we have some deep problems, not least this habit of ‘what use is spending £**m on a road outside my square mile-ism’ which you seem to espose. As EapG suggest we need a cultural change here in Wales. Part of that cultural change has to happen within all our ‘tribes’ – Plaid, socialists, Labour, Tory etc.
I think, again as EapG and Plaid say, we need fiscal responsibility to make sure our politicians are concentrated on making Wales ‘self sufficient’ and ‘viable’. If not, then it’s always, ‘oh, we’ll let London and Labour look after us’ and there’s no incentive to change.
To get the economic change I think you wish – good economy, strong infrastructure, strong social cohesion, then your best bet, like mine, is to campaign for a Welsh parliament with fiscal responsibilities. With that, we can priorities the economies we want – and no, it won’t be everyone’s priority, everytime – and with fiscal responsibility, the need to create income will be paramount. This is what Plaid wants. It’s not what Labour are campaigning for … but maybe in the future they will.
Great stuff El Dafydd El, awesome.