Monday, January 12, 2009

Business Rate Supplements Bill

Borthlas wrote a rather timely post on Friday in which he drew attention to the unfairness of the Business Rate system of payments, suggesting that this might be a means of easing the pain on small and medium sized businesses suffering in the recession.

It’s a line that the Federation of Small Businesses weren’t in disagreement with, noting that Business Rates are the 3rd biggest bill faced by SMEs.

Today, though, sees the Government introduce a bill that gives the possibility of a supplement being introduced on business rates in order to finance local infrastructure improvements.

The Bill will allow local authorities to make a 2p in the rateable pound increase on business rates specifically for advertised local improvements. Depending on the circumstances, there would be a ballot of affected businesses as to whether the scheme would be implemented.

Even though I appreciate the need to be counter-cyclical (by the time the Bill becomes law we should hopefully, even with the current government in charge, be through the worst of the recession), surely after the pronouncements of the past few months the thought of paying even more tax in future is not one which is going to appeal to businesses fighting the looming prospect of bankruptcy.

For example, there is a participation threshold set at £50,000, but as rates are due to be re-valued in 2010, before anyone introduces a Business Rate Supplement (BRS) scheme, no-one know exactly which businesses are likely to be affected.

Similarly, there is a need for a ballot if the BRS is more than one-third of the contribution to a scheme. Surely this means that local authorities will seek to inflate the cost of schemes to avoid a ballot while claiming the same amount of money from businesses. This threshold is arbitrary and has no obvious justification.

There are further issues here regarding the issue of funding in Wales.

The Bill gives powers to local authorities to raise additional income for schemes of local value, but, once again, there are no powers to raise funds for the National Assembly, which is reliant upon the Barnett block grant for its funding and has no powers to increase its’ own income, even for an agreed project.

It must be worth consideration to give these powers to the National Assembly, under the same or similar criterion.

In fact, given the different attitudes to the economic crisis seen in London and Cardiff, between headless chickens in Downing Street throwing anything and everything to see if it sticks and the cool and calm response of Ieuan Wyn Jones as Economics Minister, it might even get the backing of the business community in Wales.

Similarly, as I’m sure Borthlas would argue, why not allow the Assembly the power to vary or suspend payment of business rates in Wales, thereby allowing them the opportunity to freeze them for a temporary period – possibly saving businesses and, therefore, valuable jobs?

Multilingualism, Trains and Train Companies

I recently visited Belgium, making the most of the fact that the Eurostar ticket was cheaper than a weekend return to Barry and that, unbelievably, the journey is shorter.

Unusually for London the signage at the new international station is bilingual in English and French, and when you get through customs there’s even the odd sign in Dutch as well.

On the train, announcements were made in English, French and Dutch, with onboard signage also in German.

How different from a First Great Western service between South Wales and London where everything from on-board announcements to safety instructions are in English, or in Braille upon request.

Contrary to popular myth, Belgium is not a bilingual country.

It is a country with three languages (Dutch, French and German), with two effectively monolingual areas (Flanders, where everything is in Dutch, and Wallonia, where everything is in French) and a nominally bilingual Brussels where many signs are bilingual in French and Dutch but, in the city centre at least, everyone spoke French to me as a first resort and English as a second, and only the odd menu hinted at ‘real-life’ Dutch use.

Nevertheless, almost all trains, platforms and announcements were made in both of the main languages, leaving no-one at a disadvantage, with staff able to communicate in rudimentary but effective terms in both of the national languages.

There are some people who think that language should be left to the market. “If there are enough Welsh speakers who care enough about the service then it would happen, wouldn’t it?” they sniff.

But where there is only one provider, or an effective monopoly, as in the case of the railway service then the market cannot dictate.

Arriva Trains Wales have made great strides on their bilingualism in recent years, with bilingual announcements and signage at Cardiff Central and Newport being especially worthy of praise, but the problem with creating a bilingual environment is that it also creates the expectation of opportunity of usage.

As most Welsh speakers in south Wales will tell you, after the first awkward embarrassing moment when you ask for a service in Welsh and then have to ‘apologise’ in English for expecting them to understand you, it becomes second nature to speak in English to people you don’t know in order to avoid the embarrassment and mis-understanding.

This creates the odd situation where everything on the station is in two languages, but all conversation between staff and customers is in English.

I’m not naive enough to expect or to try to force all railway staff to speak Welsh as if they stepped out of a university degree, but most customer interaction is simple enough (just think of how you order a beer or food with a non-English speaker when you're on holiday!) that a handful of phrases and some basic understanding would go a long way to creating a genuinely bilingual space.

After all, a realistically bilingual Wales is not one where everyone speaks both languages, but one in which most communication can be carried out in the language of your choice.

As for First Great Western, for my 60-odd quid return every few weeks I’d have thought they could invest in a tape that announces the station destinations and that the buffet is open.

Or should I just be grateful that there aren’t any leaves on the line?

UK Sovereign Debt & Bonds Auctions

The massive UK Government debt forecast by Brown and Darling in their recent budget and pre-budget reports is to be largely funded by the sale of UK bonds.

Essentially these are promises that the UK will pay back the money spent on buying the bonds, with an additional yield paid when the bond matures after a period of time, usually between 10 and 30 years.

Traditionally, sovereign debt, especially amongst mature economy developed world countries, has been considered some of the safest debt to own as it is very unlikely that a politically and economically stable country is going to default.

However, with so many countries now looking to fund their debt in this way, there is a possibility that not everyone will be able to sell their bonds at the price they wish.

The UK has already increased their yields in order to sell £2bn of bonds last week.

Worse still, an auction of German bonds, typically considered the most liquidable assets, on Wednesday saw the Germans sell only 87% of the bonds that were released, earning 5.2bn Euro instead of the 6bn they had been predicting.

With the UK looking to raise £146bn in this way this year alone, we must be prepared for the moment when the market decides that it doesn’t want ‘our’ debt, and government must ensure that the cash flow is in place so that we don’t have to cut 13% or more from budgets in a nightmare scenario.

Friday, January 09, 2009

13 new Lords in 2008

In today's Daily Post and on the BBC, Dafydd Wigley draws attention to the delay in himself, Eurfyl ap Gwilym and Janet Davies taking their seats in the House of Lords.

The reason given by the UK Cabinet Office is that Plaid, in electing and nominating potential members of the House of Lords, had not followed the correct procedure.

The correct procedure, of course, is to doff your cap and wait humbly for the Prime Minister to ask you to sit there.

Some might say that this is little more than could be expected from an arcane institution that has no place in modern politics and which is based on patronage of one form or another.

The problem is that the House of Lords, through the Constitutional Committee, the Joint Committee on Statutory Instruments, Merits Committee, and the House itself all play a role in the passing of LCO's and, of course, all of the Government Bills that impact, often very strongly, on Wales.

Further than that, Jack Straw's White Paper on Constitutional Reform, published last Summer, kicked House of Lords reform into the long grass - asking parties to form a policy on the issue for the next UK election manifesto. In practice this means that the present situation will continue for some years yet, perhaps beyond the referendum on further powers for the Assembly.

In the meantime, the House of Lords just keeps on going.

Perhaps there's a good reason why Wigley, ap Gwilym and Davies have been not yet been invited? Maybe there's been no-one else nominated, or it's just an administrative oversight....

Or perhaps not - there have been 13 new Lords appointed since January 2008 (the date of the Plaid election), including a deputy chair of the Conservative Party, five independent members appointed by the House of Lords Appointment Commission, three Government ministers (including Mandelson, of course), three bishops and one Law Lord.

Jury Service and Language Rights

This week I received a summons for jury service in English only.

Jury service and juries are a crucial part of our civil justice system, but according to Golwg this week, a problem with the Courts Service computer programme Libra means that until September (!) summons will only be sent in English.

While Plaid have been calling for a system of bilingual juries to be formed (based on an amendment to the language criterion to the 1974 Juries Act) to allow trials to take place through the medium of Welsh, the Courts Service itself is breaking their Welsh Language Act of 1967 through failing to have due regard to the Welsh language.

As Welsh speakers are almost always fluently bilingual in both Welsh and English, the problems of institutional linguistic discrimination are almost always swept under the carpet ('they can all speak English anyway') - but it is a very serious issue that can lead to frustration, irritation and humiliation for those who are unable to use their preferred language in communication.

This is surely especially true when the organisation at fault is that which is in existence to ensure our rights as members of our society.

After gender bias, language is probably the bias which impacts upon most people in Wales (around 1 in 5) and it is in the interests of the 20% (and growing) of the population and also of those who are unable to speak Welsh that full language rights are given and, more importantly, implemented in a fair and just manner so that justice can be served, and be seen to be served.


I have to be honest, I never watched Gladiators when I was in my teens as I was usually too busy finding my way home from the football on a Saturday night.

In any case, I got more than my fair share of John (Awooga!) Fashanu when I had to work opposite him in his time as chairman of Barry Town.

But my interest was piqued by an interview in today's Metro (not the sort of place you expect promotion of Wales or Welshness) with Barri 'Goliath' Griffiths, the Gladiator from Porthmadog.

Apart from the fact that I can't believe anyone finds the time to eat eight meals a day, never mind get some time in the gym apart from that, I was amused by the final question:

"What's the best thing about being Welsh?

I'm a Welsh speaker which I'm very proud of. Hopefully being a gladiator and speaking Welsh will make kids think it's cool to speak Welsh."

Aww! Heart-warming or what?

Thursday, January 08, 2009

Pride in Barry Petition

During the Autumn, the National Assembly's Enterprise and Learning Committee held two evidence sessions about the Pride in Barry petition to provide fair investment into the Barry Waterfront project.

Barry is in a difficult position, overshadowed economically by Cardiff on the one hand (the Vale of Glamorgan has the highest number of commuters of any local authority in Wales), yet not in the Convergence Fund areas that receive additional European funding (the Valleys and West Wales) to promote economic development.

Pride in Barry are concerned that the economic situation does not bode well for the completion of the Waterfront area, formerly an industrial Docks area, which has been revived in the past decade, and have been calling for the announcement of a consistent stream of funding to ensure that Barry gets its fair share of investment over a period of time, allowing for long-term planning of the development rather than short-term fixes.

I was therefore happy to read before Christmas that the Committee report accepted that Pride in Barry were making a cogent argument about the need for funding to prevent the failure of the Waterfront area, but, crucially, recommended that Barry "meets the criteria outlined in the Deputy Minister's statement on strategic regeneration and that...the town merits serious consideration of further support."

In as much as a committee can tie a Deputy Minister's hands behind his back on making a decision (Leighton Andrews in this case), I think that that one sentence confirming that Barry should be one of the areas for strategic regeneration is as good as you can get.

Well done to Paul Haley and everyone else involved in Pride, and I look forward to the One Wales Government announcing further funding for development in Barry in the Spring.

High Street Store Owner Backs Plaid Policy

Next owner, Simon Wolfson, yesterday told the Today programme that he thought the government's cut in VAT was wrong and they should have instead gone for an interest rate cut - as suggested by Plaid.

Robert Peston reports it thus:

"This reduction for a year in the VAT rate, from 17.5% to 15%, will cost £12bn. It's supposed to help groups like Next, Britain's second biggest fashion chain, by encouraging all of us to spend a bit more.

But Wolfson said that the expensive VAT reduction was a mistake, that it was a waste of taxpayers' money, and that the Treasury would have been far better to cut income taxes if it wanted to encourage spending."

Tuesday, January 06, 2009

New Year, Same Old Politics

The Conservatives' big new plan for 2009 is tax cuts of around £4bn by increasing the tax threshold by £2,000. Those able to take full advantage of this would save an extra £400.

They plan to pay for this through slowed public spending growth in all areas except health, education, defence and international development.

Labour's response, almost without thinking about it, was to argue that these savings would only be made through real-terms cuts to public services.

I can only imagine it's going to come from the same place, ultimately, as the £5bn in efficiency savings that Labour announced in the Pre-Budget Report back in November but whose details they would only flesh out in the Budget when it comes around in March.

Perhaps it could also come from the same place as the £37bn in public spending cuts to be made over the next five years that were slashed from budgets between the 2008 Budget and the PBR in November.

Let's also remember that Labour were more than happy to find £12bn to fund their bizarre 13-month VAT giveaway.

So far, so same old.

Except that Plaid made their ideas on this public back in November...and we costed it.

We called for an increase in the personal threshold for tax for all basic rate taxpayers of £2,000 - exactly what the Conservatives are doing now, except that ours would apply across the board, not just on savings.

We would effectively be putting £400 back into almost everybody's pocket - allowing them to save or spend this money as they liked, giving people the choice.

Those who spend would be stimulating the economy, those who save would be putting money into the banking system.

This would cost around £10bn, less than the cost of the VAT reduction offered by Labour, and covered by scrapping white elephant schemes such as ID cards.

A further suggestion made by Plaid back in November, to counter the difficulties faced by savers due to continued interest rate cuts, was an increase in the cash ISA from £3,600 to £7,200, giving savers the opportunity and incentive to save and invest money tax free - and giving them more money than the Conservatives plan will.

Nice to know they're listening to us - even if they're not prepared to be radical enough to make the real changes.