Incrementalism vs. transformation in Cardiff Bay

John Osmond listens to a debate whether the argument over funding the National Assembly has shifted attention from policies for real change

By promoting a debate around the way the National Assembly is funded the Welsh Government has taken its eye off the ball of delivering transformative policy change, according to Cardiff Business School economist Calvin Jones. Speaking at a conference on Financing Devolved Government in Cardiff Bay at the end of last week he said there was a disconnect between the aspirations of the government and the available levers it had to bring about change.

The Welsh Government was locked into a culture of incrementalism rather than aiming to bring about a transformative change to Welsh society. The appointment of the Commission on the Funding and Finance of the National Assembly, chaired by the economist Gerald Holtham, was an example Calvin Jones claimed. “Was the appointment of the Commission tactically astute?” he asked.

For all the praise that has been heaped on the Commission’s work, Calvin Jones declared that it would have little impact on the major policy issues that affected people’s lives. The Commission’s finding that Wales was being under funded through the Barnett formula by £300 million a year was significant but not transformative.

“Holtham has had so much traction and attention because it matters to the politicians, to the Welsh intelligentsia and to civil society,” he said at the conference, which was organised by the Wales Governance Centre at Cardiff University. However, £300 million had to be out in the context of whether, for example, the £4 billion Welsh health budget was being spent effectively.

Focusing attention on the debate over funding the Assembly allowed the Welsh Government to be diverted from paying attention to longer-term and potentially transformative policies that could make a real impact on people’s lives, he argued.

Calvin Jones provided two examples of such policy areas that could be addressed by the Welsh Government. One was the need to press for more powers from London to  enable it to more effectively promote renewable energy and reduce carbon emissions from heavy industry. Wales was the poorest part of the UK and also has the highest concentration of CO2 emissions. He said the Welsh Government should be aiming to introduce a carbon tax.

His other example was an initiative to reduce speed limits on Welsh roads. He claimed a 20mph limit in urban areas and a 50mph limit in rural areas would cut child deaths and serious injuries from road traffic accidents by 90 per cent.

He added that we should be defining our ‘preferred future’ for Wales in, say 2050, working backwards from that and then devising the policies needed to bring it about. “The civil service hate that kind of thinking,” he said “What they are about is moving forward by doing this year what they did last year but with a bit more money.”

Speaking at the same conference Gerald Holtham said he agreed with Calvin Jones to the extent that excessive political focus had been given to his £300 million recommendation. “The truth of the matter is that people can’t get their head around macro-economic numbers,” he said. “£300 million sounds a lot and over time would make a difference but when set against the Assembly’s total budget it’s peanuts.”

However, Holtham strongly defended his Commission’s recommendation that the National Assembly should acquire responsibility over raising and spending at least part of the income tax collected in Wales. “It would make a material difference if half of the income tax raised in Wales was the responsibility of the Assembly,” he said. “It would make people sit up and take notice. If the Assembly had fiscal responsibility in this way people would know where the buck stops.”

A major problem with the devolution experience so far in Wales was that there was so little public involvement and so little engagement by the media with policy issues. Under the present system of divided responsibility between Whitehall and Cardiff Bay everybody could blame someone else.

Holtham said he had been encouraged by finding people in all four parties who agreed that grown-up politics would only come to Wales when the Assembly started taking financial responsibility for its actions through acquiring at least an element of tax varying powers. “There is an urgent need for us to take responsibility for our own affairs,” he said.

This was coming in Scotland with the recommendations of the Calman Commission being legislated. Holtham said the UK Government was open to the same principle applying to Wales.  “If we wanted it we could have it,” he said.

He conceded that there was no widespread appetite in Cardiff Bay for tax powers in the near future, but added, “It’s a stalemate at the moment but that doesn’t mean that things won’t move in the future.”

John Osmond is Director of the IWA.

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