Lee Waters argues that the draft Wales Bill is more about spin than empowerment.
When Dave and Nick strode into the Oriel of the Senedd building last month they did so with a purpose. “More power for the Welsh people and the Welsh government”, the Prime Minister told the initial press conference.
Since then the UK Government have published a fuller response to the recommendations of the Silk Commission, and this week unveiled a draft Wales Bill setting out how they will legislate to give AMs greater accountability for the money they spend.
“Power that’s about building this country up, power that’s about making sure we have real accountable government here in Wales” was what David Cameron said he was delivering on the November morning he came to Cardiff. But the details that are emerging are less straightforward than the rhetoric might suggest.
The Welsh Government is to get permission to use its existing powers (inherited from the old WDA) to borrow £500 Million for infrastructure spending, and up to a similar amount to help with cash flow problems. If they want to borrow any more than a modest £1 Billion then they need to call a referendum (with the permission of the Welsh Secretary) and persuade the Welsh people to draw down powers to vary income tax.
The ‘minor taxes’ that the UK Government have agreed to hand over to the Welsh Government are just that, minor. Stamp duty, land tax and landfill tax are small beer in revenue raising terms. To begin to meet the expectations of unlocking investment capital that have been raised by the debate around Silk, income tax is the only show in town.
The political judgment from the Coalition Government is that Carwyn Jones needs an incentive to take on tax powers, and face up to the responsibility for raising, as well as spending, money. The First Minister has said all along he’d be quite happy to get the power to borrow, but he’s not inclined to accept tax powers without a fairer funding deal for Wales, recently labeling the current situation a trap. There are, of course, other considerations, not least the fact that the Labour Party is split, and the polls show a referendum would be hard to win.
But even with income tax powers the revenue the amount of money the Welsh Government can expect is modest. While there are no precise figure, sums in the region of £125-140 million a year are expected, which would only allow Ministers to service a debt of around £2 billion ( amounting to little more than the cuts to the Welsh budget since the austerity drive began).
The UK Government have raised expectations about the scale of fiscal responsibility, which look increasingly unlikely to be met. Carwyn Jones may not think that such a modest sum is worth the political risk of calling a referendum.
“More power for the Welsh people and the Welsh government”, but only if they agree to use it for projects the UK Government approves of it seems. Old habits die hard in Whitehall, relinquishing control is not in the DNA. Even the £500 Million pounds that is available now to spend on infrastructure comes with very considerable strings – it must be spent on upgrading the M4.
As it happens the Welsh Government are also very keen on spending money on the M4 – even though much of the current Cabinet agreed to cancel plans for a new road in 2009.
Ministers have to be careful what they say about their preferred option for the motorway around Newport as the formal consultation is ongoing (they had to scrap the last one because of the threat of a legal challenge on environmental grounds). They need to be seen to be keeping an open mind, but it feels very much that Cathays Park and Whitehall would prefer to build a brand new section of motorway over the Gwent levels.
The trouble they have is the cost. £500 Million doesn’t go a long way when it comes to building a six lane motorway. The Welsh Government has put the cost of a new stretch of M4 at £936 Million, but analysts believe £1.25 Billion is nearer the mark.
The cost of large infrastructure projects are notoriously hard to predict, but the Welsh Government’s current estimate for a new motorway is on the optimistic side. The cost of building a new road was put at £1.25 Billion at the time the project was shelved in 2009. The latest plans out to consultation assume the road can be built more quickly and therefore can be delivered for less than a billion – but analysts think the figures are unrealistic.
Prof Stuart Cole, Emeritus Professor of Transport at the University of South Wales, has told the IWA “The figure of £936 Million is based on an expected date of completion of 2020. If a completion date of2031 is used, which was the original assumption and is realistic, then £1.25 billion is a reasonable final figure for the expected outturn price”.
Prof Cole has put forward an alternative plan in a report published jointly by the IWA and the Chartered Institute of Logistics and Transport, The Blue Route: a cost effective solution to relieving M4 congestion around Newport. His proposal – which had been the favoured option of transport officials at one stage – would cost £380 million (one third of the Government’s official estimate) and could be completed much sooner.
But even if a brand new motorway is thought to be the best option it may be a luxury that the Governments cannot afford. BBC Wales Political Editor Nick Servini tweeted that the “Welsh Government says £500m borrowing limit could be enough to build M4 relief road after it’s topped up by other funds”.
That’ll take a lot of ‘other funds’ and won’t leave anything for the rest of Wales.
When it was announced that the Welsh Government would get new borrowing powers, the First Minister emphasised the money ‘is not just for the south of Wales, it is for the whole of Wales north and south’. A point echoed by Welsh Secretary David Jones who was quick to press the case for investment in the A55.
Tying up all of our borrowing powers, and potential future revenues, in one scheme in the south east is politically difficult.
No doubt more money could be found if there was a will to do so. Indeed, the ‘other funds’ Nick Servini refers to may well be a reference to the prospect of gilt market borrowing funded by the proceeds of future Severn bridge tolls. But there’s some way to go before that is a likely prospect.
In the meantime, as the dust settles on the UK Government’s detailed announcement on what “More power for the Welsh people” means, the spin of empowerment is feeling a little hollow.
11 thoughts on “The myths and realities along the silk Road”
Now Dave and Nick are helping Carwyn fiddle while Wales burns!
Let’s face it the WAG – yes mods it is STILL correctly called the WAG despite the umpteen times you have incorrectly edited it over the last year or so to fit in with the IWA’s propaganda campaign – can’t even cope with the responsibilities it has now. Adding more total trivia for an already incompetent ‘government’ to play with is nothing short of lunacy.
Of course it’s possible Dave and Nick are just giving Carwyn enough rope to hang himself. Start removing the HMG’s public sector new investment and Wales will go down the pan even faster. It looks as if the IWA would be perfectly happy to see the new prison in Wrexham cancelled so Dave and Nick might as well move that east of Chester along with the Military College and the removal of the requirement for DVLA to dish out vehicle ‘CO2 tax’ disks which should reduce that empire in the near future… HMG can easily ‘lay siege’ to the economy in Wales because it is so heavily reliant on public sector GDP both from inside and outside the block grant. Or should that be the bloc grant?
At some point things might get so bad that even the politically challenged electorate in Wales will notice and give Carwyn his marching orders… Then Dave and Nick will be happy – mission accomplished?
Its time for a campaign for a FREE WALES. Time our country was free of English politicians meddling in our internal and external affairs. Time we as a country stood up and got rid of One Nation New Labour who are an absolute shower. Where is our Alex Salmond to rid us of these plagues?
Oh dear is that time of year again? Nutty Nat season? When Welsh nationalist are free to spout there racist clap trap. Have you seen the film ‘The purge’? Perhaps we couls set up something similar for Fanatical Welsh Nationalists so they could be free to get out their frustration with regards to the English on one day a year…. perhaps then they might be able to act like normal human beings for the other 364.
The rest of us rational Welsh folk shake are heads in disbelief at your kind.
This is a well-informed and intelligent analysis of this event. Having seen the item on the Welsh news, it’s extremely helpful to have such a perceptive reading of the UK Government’s aims towards Wales and how slow the pace of change is in terms of democracy changing the nature of the relationship between London and Cardiff. It also goes to show that establishing substantive democracy for Wales is going to be a painstaking process given the power that Westminster still retains over Wales. Appealling as the one bound and we’re free model is, it is pure fantasy.
No state relinquishes territory willingly. Frequently it’s been achieved only by force of arms. Where the democratic process can’t reasonably be denied, other methods are employed. Witness the torrent of abuse emanating from Westminster and the overwhelmingly unionist press and media, against Scotland and any Scot who dares support the normal aspiration of self-determination for his country. If I were a Scot, that alone would persuade me to vote YES in next year’s referendum.
The No campaign appears to largely be funded by wealthy Tory supporters south of the Border, but fronted by self-serving Labour or LibDem Westminster lackeys, as the Tory brand is so toxic in Scotland. When the questions are put to them, as Alastair Carmichael amply demonstrated when he debated with, and was demolished by, Nicola Sturgeon, they have no answers
At this stage it’s difficult to predict the outcome. The crunch will come, I suspect, during the final six weeks of the campaign, and the probability is that the result will be close. It appears that some of Cameron’s closest advisers believe that it’s likely that Scotland will secede.
Even now, at least a third of Scots favour independence, another third want a form of home rule, call it devo-max, or whatever. Unless and until their aspirations are met, the campaign will continue post 2014, even if independence is not achieved then.
The reality is that the UK has to change significantly, or eventually face break-up. I don’t believe that it’s capable of such change, so independence will be the only option.
The success of Scotland post 2016 will undoubtedly have repercussions for Wales, where Tory/Labour/LibDem austerity will continue into the 2020s, as will Wales’ relative economic decline. Sooner or later the Welsh electorate will tire of it, and we too will demand radical change. It could come far sooner than many people think. Only a decade ago the SNP was in the doldrums, yet the party won a resounding victory in 2011.
We have to bite the bullet as there are no prospects of improvement coming from London, ever. It will entail more pain in the short term, but the promise of a more prosperous and exciting future, free of the shackles and shambles of a sovereign Westminster government and its sham devolution. Change is inevitable, and when it comes we will wonder why we put up with such a demeaning status for so long, and a permanent future as the poor man of western Europe, unless we act.
The future of Wales lies with its people. We’ve seen what happens when we let others decide our future. I wouldn’t want my next door neighbour managing my personal affairs, especially when he consistently did a bad job of it, and treated me with contempt. Westminster has and is treating Wales with contempt as the recent proposals for taxation and borrowing powers amply demonstrate. I’m with Keith Parry. It’s time to give Labour and London their marching orders after a century of abysmal failure.
New powers not worth even considering. The ONLY answer to our increasing poverty is Interdependence in its true sense. Nothing from London will ever benefit CYMRU. We must take up the challenge for REAL power for the CYMRY not imposed from London.
An interesting survey of the issues.
I think the crux of the matter is in the UK Government’s insistence of maintaining the lock-step nature of the proposed Income Tax powers. Silk carefully articulated why such a mechanism is inappropriate for Wales (and any other devolved territory) and is highly unlikely to be used, hence their recommendation for a system which can vary different bands independently. The UK Govt. is therefore asking the Welsh Government and pro-devolution Welsh civil society to campaign for a system which they know to be inadequate (It is also a system, incidentally, that the UK Government would never think to impose on itself). How can you win a referendum you don’t believe in? You basically go back to a 1979 damp squib scenario.
I’m pretty sure Income Tax powers (and the consequential higher borrowing limits) will never be devolved on the basis in which they are proposed in the draft Wales Bill. It will take a post-Scottish referendum constitutional review, and the correcting of the proposed system to garner sufficient support and consensus before it will happen.
Whether Dave and Nick always knew this and were therefore presenting a rather cynical red herring, is of course, a matter of opinion…
I wish you and the rest of the Cymry all the best in your quest for ‘interdependence in its true sense’…. the rest of us Welsh won’t stand in your way! Where do we sign? Would Gwynedd and Anglesey do it? seems about fair!
Oh and p.s. stop SHOUTING 🙂
Mr Comoffit was kind enough to mention my post. Regardless of his insults the basic political problem in Wales is politicians outside the country meddling our affairs. Aided by a total lack of ambition for progess both socially and economically displayed by the Carwyn Jones Government.. The solution is self government however difficult that may be to bring about.
And so which sort of Welsh want to govern themselves? Welsh speaking Welsh, English speaking Welsh or those Welsh that have had the misfortune to be educated via the medium of Welsh?
And what about the rest of the population that isn’t ‘Welsh’, does not wish to be Welsh, but is quite happy living in Wales. Can they opt to be governed by Westminster?
Gosh, so many things to consider. Isn’t it time we started asking the pepole directly?
Dear Yvonne. You ask what sort of Welsh? Odd question, there are only one sort of Welsh, “The Welsh People”. People who live in Wales permanently, or who have a parent or grand parent who are Welsh are Welsh. Where they come from, their colour of skin, religion language they speak or sexual definition is of no matter. There is no rest of the population who isn’t Welsh. You live here for three years you are Welsh. Its called civic nationalism.
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