Tax cuts aren't the same as devolution

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Not for the first time, bosses at Cardiff Airport have called for the devolution of air passenger duty.  Now, as a question of principle, I’m not going to disagree.  Since my starting point is that all taxes should be levied by the Assembly, not by Westminster, and that as long as the UK exists, financial transfers should be from devolved administrations to the centre rather than the other way around, I’m never going to disagree with the devolution of any taxation powers.

But I’m not sure that devolution of the tax is really what Roger Lewis is calling for here.  What he’s calling for is a cut in the tax; devolution is merely the perceived means to an end.  He clearly believes that the Welsh Government would be more likely to cut the tax than the UK Government.  He may well be right on that – but putting specific taxes in the hands of whichever administration is most likely to set the rate to the advantage of the organisation you represent isn’t the same as supporting devolution, let alone a particularly rational way of sharing powers across the UK, or of planning the public finances.

Personally, I’m not at all sure that cutting air passenger duty is the right thing to do.  It is clearly intended to boost traffic and passenger numbers at Cardiff airport – but is encouraging more flying really what we want to do?  For those running an airport, it might well be, but I’m not at all sure that it’s a good fit with the environmental policies being put forward by the government.

Laws aren't the answer

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I’ve thought all along that the Tories’ proposal for legislation mandating the elimination of the budget deficit was just a silly gimmick.  In the first place, no government can ever tie the hands of another – any law passed can equally easily be repealed - and in the second place, whether, when, and to what extent the deficit should be reduced depends on economic circumstances.  Making it an absolute priority regardless is poor economics.

I’m afraid that I don’t think that Plaid’s proposal for a law mandating fair funding for the north (as noted by Cai Larsen last week) is any more sensible.  The first objection still applies – no Welsh government can ever bind its successors.  And a variation on the second also applies – whether equality of funding is the right thing to do at any point in time depends on the circumstances at the time.

That’s not to say that there isn’t a problem with the way the Welsh government is spending our money at present – there clearly is.  And it doesn’t only affect the north; there are those of us out here in the wild west who also feel that a Cardiff-centric government is replicating the centralist tendencies of the UK and concentrating spending in and around the capital.  It’s just that legislating for equality of spending isn’t the right answer.

In the first place, it might well be that in some years, depending on projects and priorities, it might actually be right to spend more per head in the north than in the south-east.  And what do we mean by the ‘north’ anyway?  If equality was achieved by spending all the north’s money in Wrecsam (nothing against Wrecsam, by the way), how does that help Ynys Môn?  And demanding equality of spending, carried to its logical conclusion on a village by village basis, might also mean that no large projects could ever be undertaken – anywhere.  Over what period would this ‘equality’ be mandated?  The shorter the period, the harder it would be to finance large projects; but the longer the period, the more meaningless the proposal becomes in practical terms.

No, I simply don’t think that the proposal for legislation to control the way money is spent in different parts of Wales is a sensible response to the problem.  It looks like a gimmick; just like Osborne’s deficit law. What we really need isn’t legislation, it’s an economic plan for Wales with a vision for improved infrastructure and for boosting the economy of all parts of the country.  It’s not exactly a new idea, of course (although the 1970 version might need more than a little dusting off).  But real, hard proposals will do more for the north and west than any amount of meaningless legislation.

Mythical centres

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Talking about the political centre is easy, but defining where the ‘centre’ lies is far from being a straightforward task.  Looking back at UK politics over the past seventy years, it is obvious that the centre has been more or less continually moving, pulled either to the right or to the left by the political forces of the day.  Insofar as ‘centrism’ is a political philosophy at all, it is first and foremost about winning elections rather than about what politicians do after winning them.  It’s an oversimplification, but perhaps not much of one, to say that there are times when strong politicians from the left or the right shift politics in one direction (Thatcher comes to mind); the ‘centrists’ (and Blair comes to mind) simply accept the new settlement and attempt to work within it.

So it came as no surprise to see Blair last week stressing anew that ‘Centre-ground voters still hold the key to winning elections’ in a story that appeared in a range of papers.  It’s no different from what he’s been saying for years.  What was more interesting, though, were the comments later in the piece, where he argued that “…I think if the centre is not muscular then the extremes gain”.  This is close to being the opposite position to that with which the article started.  Standing things on their head is something else to which he is not a stranger, but he’s more or less gone from arguing that elections can only be won from the centre to arguing that they can be won from the left or right if the centre isn’t strong enough.

The centre has moved from being an essential place for anyone wanting to win an election to a bulwark against those who might otherwise win.  It’s an attempt to turn the centre from a pragmatic tactical position into some sort of coherent political philosophy – a version of his infamous ‘third way’, I suppose. 

But that bring us right back to where we started.  The problem with his third way, and with political centrism in general, is that it can only be defined in terms of what it isn’t – as a rejection of what lies to either side of it.  In the immediate aftermath of the second world war, the UK ‘centre’ moved decisively towards the left, led by a strong and committed Labour Party.  There was a consensus around the welfare state, for instance, which lasted for decades.  There was some toing and froing in the Heath/Wilson years, but the decisive break with that consensus came in the 1980s. 

The great shame of the Labour Party is that it allowed itself to be taken over by ‘centrist’ careerists who fell into a new consensus with the Tories.  It suits those concerned and their successors – largely in the parliamentary Labour Party – to argue that the party’s current internal debate is a diversion from the important business of winning elections, and to close off debate about possible alternatives.  But as Blair has effectively admitted – and as UK political history has shown - elections aren’t always won from the centre ground, wherever that may be at the time.  It’s just that wining them from elsewhere requires a party to have a strong and clear commitment to an alternative view.  The problem is that so many in Labour really don’t want the party to do that – they’re actually happy to allow the Tories to continue moving the ‘centre’ in their own direction.

Applying double standards

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Last week, a report was published suggesting strongly that the murder of Alexander Litvinenko was ordered at the very highest level in the Kremlin, probably by Putin himself.  The response of the UK Government succeeded in exposing a classic application of double standards.

The Government of country A ordered the use of a deadly radioactive substance to eliminate one of its former citizens who was resident in country B because it regarded him as a traitor and a danger to the country’s security.  According to the Prime Minister of country B, one David Cameron, this is an outrage against international law requiring sanctions against country A.

However, not so very long ago, the Government of country B ordered the firing of a missile from a drone to eliminate one of its former citizens (and anyone standing too close to him at the time) who was resident in country C because it regarded him as a terrorist and a danger to the country’s security.  According to the Prime Minister of country B, the same David Cameron, this is an entirely justified act of self defence.

Now, of course, the two situations aren’t entirely identical, and of course I’ve simplified things to highlight the similarities.  But in both cases, governments have resorted to extra-judicial killing to dispose of people that they can’t get to otherwise, and no government which is prepared to resort to such measures can really have very good grounds to criticise another which behaves in the same way.

Cameron is always banging on about British values.  I’ve noted before that I really don’t understand exactly what those values are or what makes them specifically British; but insofar as I do understand the claimed values of the West, I don’t remember them ever including the use of extra-judicial killing, or of the application of double standards.  Sometimes, people’s real values are more obvious from their actions than their words.

Losing the plot

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The latest comments by the Labour leader on Trident look like the sort of fudge which we’ve seen far too often from Labour on a range of issues.  Half-baked would seem to be an inadequate description of the suggestion that we should build a new generation of submarines which are specifically designed to launch nuclear missiles and then not arm them with nuclear weapons.  Insofar as there is any point at all to Trident, it is that it has the capacity to remain hidden at sea and exact revenge for a nuclear attack by posthumously wiping out a few cities somewhere.  As a means of delivering conventional explosives, it would be a hopelessly over-engineered and expensive approach, and all done, apparently, to keep people employed in the shipyards where the submarines would be built and the docks where they would be based - and to keep a few trade unions on side.

Labour have form on coming up with compromise and fudge designed first and foremost to maintain some sort of precarious party unity (as anyone familiar with the history of Welsh devolution will be only too aware).  But this suggestion takes that to a new height.  I can think of lots of ways of spending the £100billion which would produce more jobs and deliver more useful outputs.

Another example of the way in which Labour is losing the plot on Trident was the comment by the sacked shadow minister Michael Dugher, reported in the same story, that “We tried unilateralism before.  It ended in electoral disaster then.  There is no evidence to suggest that it won't end in disaster again.”  I’m sure that he is entirely sincere in his belief that nuclear weapons are essential to Labour’s electoral prospects, but the thing that struck me was the complete absence of any attempt to put forward any reason for possessing such weapons other than electoral success for Labour. 

Both his comments and those of Corbyn go to the heart of the problem that Labour faces.  It no longer has any raison d’être, in the eyes of most of its own MPs, than to win elections at all costs.  Corbyn started out with a different view – slowly but surely, he’s being brought back into line.

Correcting the balance

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I liked Corbyn’s suggestion last week of a new law to prevent the payment of dividends by companies which are not paying at least a living wage to all their staff.  Any reasonable definition of a ‘viable business enterprise’ ought to exclude any business which can only turn a profit by underpaying its staff.  Underpaying staff whilst paying dividends to shareholders is just a simple and blatant way of transferring wealth from labour to capital.

The response of the CBI spokesperson was a little over the top – not to say out of touch with reality.  He said "The idea of politicians stepping into the relationship between a private company and its shareholders would be a significant intervention, and not one that we would support" as though the idea of legislative regulation of that relationship was an entirely new and novel suggestion.  I would have thought that anyone representing the CBI would at least be aware that the various Companies Acts are full of provisions which regulate that relationship.

And rightly so, too.  There are rules covering the way in which companies are managed, and rules governing the rights of shareholders and the responsibilities of companies and their directors.  Other legislation also affects the relationship – health and safety legislation and employment protection legislation, to name just two examples, both restrict the unfettered right of businesses to behave as they wish in the interests of shareholder profit.

I’m sure they’d argue that statute enshrines the duty of company directors to consider first and foremost the best interests of shareholders at all times, and that that’s what they’re doing in opposing this suggestion.  But as the previous paragraph illustrates, that duty has already been curtailed in a number of ways; it’s a duty which takes primacy only within the limits of any other legislation, and all Corbyn is proposing is another limitation on that duty – and quite a small one at that.

I can understand why the representatives of capital would want to maintain as far as they can the current presumption in favour of the interests of capital.  But I do wonder whether they have really thought this through.  It looks like a very short term and narrow view of the interests of capital to me.

A successful capitalist economy depends on there being a sufficient number of consumers in a position to buy the products and services which businesses produce.  From the perspective of any individual company, it might well appear advantageous to pay wages as low as possible in order to maximise its own profits; but from the point of view of the economy as a whole, underpaying employees is a huge problem in the long term.  Such narrow short termism is one of the fundamental problems of capitalism as an economic system, and it’s part of the reason for cyclical boom and bust.

Capitalists need external regulation and legislation for their own good; the fact that they don’t recognise that themselves merely reinforces the need.  So, on this one, I’m with Corbyn in principle.  Sadly, I think the chances that his own party would ever allow him to implement such a proposal are even less than the chances of him getting into power.

Muddying the waters

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It was Peter Hain who, when he was Secretary of State for Wales, steered through the 2006 Government of Wales Act.  That act provided for the referendum on law-making powers which, after the 2011 referendum, turned the largely administrative Assembly into a legislature.  It was also Peter Hain who, as I recall, did everything he could to prevent and deter the Assembly from calling the referendum for which he had made the legislative provision, (even at times endangering the survival of the One Wales coalition, so vociferous was his opposition).

I find it more than a little strange therefore that the same Pater Hain, now having been suitably invested in ermine, should be calling for the Assembly to have powers to block legislation on a subject which seems to me to be outside the purview which he set for the body, even using the powers which he then didn’t want it to have.  The trade unions are arguing that it isn’t actually outside the Assembly’s powers, but the lack of clarity is, once again, a hindrance to good governance.

Hain’s argument is that “It is essential for the devolution settlement to work that the prime minister respects the wishes of the Welsh Government”.  That seems to be asking the current (Tory) UK Government to behave as he says it should, rather than behave as he himself did when a member of the previous (Labour) government.  In reality, what the devolution settlement needs to make it work is clarity over who does what; clarity which he failed to provide when he could; and he now seems to be trying to muddy the waters even further.  

I’m sure that he’d argue that the two situations are completely different.  Any disagreement with Carwyn Jones was merely a spat between two different parts of the Labour Party, but now he’s dealing with the wicked and evil baby-eaters.  Or perhaps there’s some other subtlety which has been lost on me.

Uniting the workers of the world?

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Corbyn’s reshuffle was an agonising thing to watch, although part of the reason for that appears to have been his own willingness to listen to alternative points of view.  I’d have thought that a virtue, and entirely in line with his stated wish for a different type of politics (albeit badly undermined by some of the briefings which members of his core team seem to have been giving), but from the reaction of some members of his own party, they’d prefer the ruthless lack of consultation to which they’d become accustomed.

I, for one, welcome the fact that the Shadow Defence Secretary has been replaced by one more in line with Corbyn’s own view on the renewal of Trident.  It’s a step forward, although given that many Labour MPs remain wholly committed to spending more resources on weapons of mass destruction it’s a step along a path rather than the end of the journey.  It holds out some hope, though, that we might see senior opposition spokespersons arguing, for the first time since the 1980s, against the possession of nuclear weapons.

One particularly disappointing reaction was that of the trade unions.  One officer of the GMB was quoted as saying “We are absolutely clear and unequivocal that we will be supporting Trident replacement and any suggestion that there is alternative employment for people in that sector is utter nonsense and everyone is going to have to wake up to that fact”.  I understand, of course, that it is the job of trade unions to protect the interests of their members, but keeping people in jobs is not a rational argument for building and maintaining weapons of mass destruction which no sane person could or would ever use. 

It’s even sillier than arguing for a new nuclear power station on the same grounds – at least Wylfa B will produce some useful electricity.  It is an argument, in essence, for carrying out a pointless activity simply to keep people working.  I can think of a lot more useless activities which would be less potentially damaging than building and maintaining nuclear weapons if that’s really the way we want to run our economy.

But what it really underlines is a willingness to accept what is rather than argue for what should be.  And that’s what disappoints me most.  The father of one of those recognised by the GMB as a co-founder of the union coined the phrase “workers of the world unite”.  I somehow don’t think that either he, or his daughter, would have added “to build weapons which we can use to kill workers of other countries”. 

Who's controlled from London?

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In advance of yesterday’s great debate between Carwyn Jones and Nigel Farage, the First Minister told us that UKIP are a threat to Wales.  I agree (although I might also apply the same phrase to the Labour Party, whilst I suspect that Carwyn would not). 

He also said that UKIP are “very much controlled from their party headquarters in London.  There’s no other party in Wales that’s like that.”  I’m not so sure about the truth of that one – the words that popped into my mind were pots and kettles.  There is after all no such thing as “Welsh Labour”; it’s merely a ‘local brand’ used by the British Labour Party.  It keeps no separate accounts, is funded from Party HQ in London, and is only ‘allowed’ to debate issues which are devolved to the Assembly.

Perhaps he just has a different definition of ‘controlled from London’ than I do. 

It's about vision, not economics

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A couple of times over the past year, most recently here, I’ve posted on the forthcoming referendum on membership of the EU; or, more specifically, on my concern that reducing it to a simple question of economics rather than one of the type of future we want to see plays into the hands of those who want to see the UK leave the EU. 

The problem with much of the argument that I’ve heard to date is that it is based on promoting a fear of change rather than on any positive virtues.  That in turn is based on an assumption that the future within the EU is more readily knowable than the future outside it.  In the short term, that’s true, but we’re making a long term decision here, and the long term economic future of the UK within the EU is not really any more knowable that the long term future outside the EU. For what it’s worth, over the long term, I’m not convinced that there would be much difference in the economic outcomes of a decision to remain and a decision to leave.

From a Welsh perspective, I’d continue to argue that the question we have to ask ourselves is whether we want to see Wales as a small appendage of a very English state trying to stand alone in the world, or whether we want to see our small nation playing a part alongside the other small nations of an essentially multinational and multilingual Europe.  That’s not really an economic question at all; it is a political one.  And it’s not an argument which presents the EU as some sort of ideal organisation either.  It’s a union which is continually, albeit slowly, evolving and changing, but which holds the potential for a combination of local autonomy and shared sovereignty in a union of consenting partners looking to the future rather than the past.

I’m pleased to see at least one of Wales’ politicians making a similar point - and pleasantly surprised that it’s a member of the Labour Party.