Sector strategy: Vague aspirations will not work

 

admiral

Rhys David finds the work of the sector panels set up by the Welsh Government to advise on new economic directions disappointing.

We would not say it ourselves and we would not have liked our near neighbours to say it but when the New York Times recently described Wales as the Greece of the United Kingdom most of us will have recognized a reality.

Like the Greeks the amount we raise in taxes does not cover the cost incurred in running the state, and for their unsustainable borrowing read our internal UK transfers. Moreover, if the New York Times is to be believed, we are even poorer than the Greeks with a lower gross domestic product per head.

Yet, while the Greeks are being obliged to make drastic cuts in public expenditure to eliminate their fiscal deficit, hitting incomes and benefits as well as public services, Wales has the much less demanding task – even after the UK Government’s own cuts have been factored in – of trying to grow its way out of the economic doldrums through more effective economic, education and employment policies. The safety net provided by UK Government social security and other transfers thankfully remains largely in place.

To this end and after consultation with a host of organisations and individuals, including the IWA, the Welsh Government has chosen to place much of the onus for achieving a stronger economy on a new industry sector approach and on a move away from the previous grants regime to one that relies much more on loans. The new policy also envisages stronger measures to create a more favourable environment for business, including improvements to transport and other infrastructure. Six sectors were originally chosen Advanced Materials and Manufacturing; Creative Industries; Information and Communications Technology (ICT); Life Sciences; Energy and Environment; Financial and Professional Services. A further three were added later: Food and Farming; Construction; and Tourism.

It is an approach that makes a virtue of necessity. There will not be enough funding available to make it possible, other than in exceptional circumstances, to continue to subsidise firms to come to or stay in Wales on the scale attempted in the past, even if such an approach was considered desirable or had been proved conclusively to work in the past. And, because the notion of picking winners – choosing businesses that seemed likely to succeed – has become somewhat discredited, the emphasis has shifted to identifying sectors that are worth encouraging.

So, how much has been achieved since the strategy was unveiled in its initial form under the Labour-Plaid coalition and since the panels consisting of experts across the different sectors set to work last year? The answer, sadly, seems to the outside observer to be not an awful lot. Sector teams within the Welsh Government have been in place for some time and the advisory panels – comprising some of Wales’s leading business people – were mostly in place by this time last year. Yet the first batch of advice statements presented to the minister for Business, Enterprise, Technology and Science, Edwina Hart, collectively offer little evidence that the panels have very much idea how the (sometimes very woolly) notions and objectives they propose will be transferred into employment, products and value for the Welsh economy.

Take for instance the financial service sector, the summary advice from which rarely gets beyond the almost embarrassingly banal and unachievably optimistic. Its vision is to “make Wales the most competitive region in the UK for financial and professional services outside London by 2021”. One of its challenges is to “grow employment in the F&PS (its acronym) sector from 124,000 to 200,000 by 2021, while another is to grow jobs and GVA in our sector faster than the UK average”. A “key driver” is summed up in this baffling statement: “The 1.4m population living in the Cardiff City Region, and its close proximity to London make Cardiff one of Europe’s fastest growing cities.”

Among the drivers identified to achieve the above are the “rich pool” of 124,000 F&PS professionals currently working in Wales. Or again “Wales is the European centre for web-enabled emerging technologies and with cost comparison sites for Moneysupermarket.com, GoCompare. Confused.com and MMA” [sic]. Then again “the UK’s only enterprise zone dedicated to the F&PS sector is in the heart of Cardiff and it offers fast broadband and capacity for an additional 40,000 staff in new ‘low carbon’ buildings”. Or it might, when it has been built, one could add.

The suggested strategic priorities include the need to “sell Wales’s business propositions to the world and particularly London” and provide training support to improve the “rich pool [again] of professionals available for fast-growing businesses”. To deliver the vision it will among other things “target international financial and professional services businesses”, initially in London, “offer a flexible whole of Government approach with generous funding” and engage the largest 100 F&PS companies in Wales, and develop a three year business plan identifying growth opportunities for them”.

One wonders how much it costs to produce these pearls of wishful thinking or indeed whether anyone on the panel has looked back at the papers left behind by the South East Wales Financial Initiative headed by long time City financier, Godfrey Jillings, in the 1990s. Surprise, surprise, even then, Jillings was reported as saying it was not grants that would attract inward investors. Cardiff and the rest of south Wales would secure professional services because of its “advanced electronic communications and high calibre staff”. Jillings was clear most of the investment in Wales would be back office functions and indeed this has proved to be case. The latest incarnation of Wales as a financial centre so far seems not to have come up with any ideas as to what businesses or business operations it will constitute, leave alone how the journey from boosterism to bricks and mortar will be made.

To be fair not all the sector reports are as poor and the panels have recruited some serious businesspeople – Sir Chris Evans, Ron Jones of Tinopolis and Dan Clayton Jones to name three. The Life Sciences sector summary advice pertinently identifies the lack of awareness internationally and indeed in Wales of some of the very good work being done within the sector. It criticises the sector for a lack of collective ambition, shared vision and overall plan, adding that it seems to be without spark, confidence, experience, leadership and personality. It calls for a full and clear picture of the sector to be developed by Government and for the creation of a dynamic ecosystem bringing together the main participants, including academia.

It also wants the life sciences team to deliver a full programme of international trade and investment activity to guide and support businesses to access markets outside Wales, to attract foreign investment to Wales and to project a credible and persuasive Life Sciences brand. Wisely, it observes that while it is confident the approach it suggests will deliver significant business growth and obvious economic benefits, Wales must, given the competitive nature of the sector, measure itself robustly against past performance and competitor regions. Robustly is clearly the key word here.

The ICT sector panel starts with the rather depressing observation that its sector, too, is largely invisible on the world stage and has actually seen a decline in companies and employees since 2002. It identifies priorities – stronger links between suppliers, and users of ICT products and services, public sector procurement opportunities, and increased R&D, but the delivery mechanisms it suggests – active marketing and communication of Wales’s ICT message, for example, or closer engagement with companies in the sector can be little more than holding comments.

There are some sensible recommendations, too, from the creative industries panel which wants the sector among other things to focus resources on those creative businesses which sell or license products and services to markets outside Wales, and to ensure that training and education relevant to the sector are aligned to the needs of business and the digital economy. It also has some clear ideas as to how the priorities could be delivered, for example through continued Welsh presence at trade fairs, access to finance – particularly for export-oriented businesses and a strong Wales Location Service. The advanced materials and manufacturing panel is clearly not up to speed, however, filling its advice with oodles of management speak and not much else.

It is of course easy to criticise but the evidence available to the public of the work done so far by several of the panels suggest the intellectual input – whether by the panels or the teams they are meant to advise – has not been as rich a harvest for a year’s work as might have been expected in terms of original ideas or clear mapping of the way ahead, to put it mildly. This, of course, is bound to raise questions over whether the panels and the teams they advise are going to be a match for the sort of competition they will face around the world for just the sort of sector investment they are seeking to encourage in Wales.

Though a large part of their work will be stimulating existing and potential new Welsh businesses they will also be looking out for inward investment and here they have to remember they are up against the Irish, whose approach includes high octane advertising day in, day out on the US Bloomberg business channel. Ireland, of course, now has just captured Twitter for its ICT portfolio, where it will join Google (2,200 people), Paypal (1,300), E-bay (1,100), Facebook (300), Linked-In (140), not to mention AOL and Yahoo.

What this makes clear is that other regions are not waiting for Wales to get its act together and if we are to have a sector strategy that is effective it needs to be reach top speed quickly and to have strong and rigorous intellectual underpinnings. Vague aspirations will not work.

March 6th 2012

Hadron hero: From Aberdare to Cern

The Swansea-educated director of the Large Hadron Collider project in Geneva has become one of the most identifiable Welsh scientists of his day, writes Rhys David

lyn-evans

Wales has produced a number of outstanding scientists over recent years, many going on to achieve the prestige of a Fellowship of the Royal Society, but one above all others has achieved a public prominence in recent years.

When the £6bn Large Hadron Collider (LHC) at the Cern international physics laboratory in Geneva was switched on in the autumn of 2008, the unmistakeable Aberdare tones of its director, Dr Lyn Evans, were heard around the world announcing the start of the world’s biggest scientific experiment. Over the next few years it is set to answer some of the most fundamental questions about the nature of the universe (or the multiverse, if the theory of multiple universes is correct).

Nearly two years later Dr. Evans, who has spent most of  his life at Cern, has retired. The project has not resulted in a meltdown of planet Earth as some scientists forewarned, it has survived an embarrassing months long shutdown nine days after it was turned on when a short circuit blew a hole in the 17 mile long, five mile diameter vacuum pipe buried up to 600 ft. underground, and is now running at high power and turning out an estimated 100,000 DVDs worth of data a year.

For Dr Evans the project represents the crowning achievement of a career which started in the science laboratories at Aberdare Grammar School in the 1950s. The teaching of science there was good, he recalls, and the teachers were highly respected. “The school offered a level of education you would only get nowadays in public schools,” Dr Evans believes.

University College, Swansea, where he did his first degree and a Ph.D. in plasma physics cultivated his interest in a scientific career. The college was an early collaborator with Cern among British universities, sending a stream of talented graduates and post-grads to Geneva starting with the late Eifionydd Jones to co-operate on experiments there. Indeed, Swansea scientists have played a big role Cern experiments into anti-matter, one of the constituent elements in the universe.

The LHC has been built to send two simultaneous accelerated beams of hydrogen nuclei in opposite directions around the collider and these are then directed by magnets to crash into each other. The resultant explosions recreate conditions a pica second – one hundredth of a billionth of a second to be precise – after earth’s creation 13.5bn years ago. The debris from these can then be analysed. Optical systems – high powered telescopes and the like – can by contrast only take us back 1bn years, Dr. Evans points out.

The outcome is not going to be a sudden “find” in the middle of all this activity – instead the scientists at Cern will be looking through all those DVDs worth of data for statistical patterns that current physics knowledge cannot explain. The prize that has been most publicly identified is the Higgs Boson, which Dr Evans believes could take two years to recognise. At present scientists only really understand atoms which account for roughly 4 per cent of matter, with dark energy (73 per cent) and dark matter (25 per cent) still a mystery. The Higgs Boson, if and when it is proved to exist, could explain how matter acquires mass. Another important scientific theory the LHC could help to verify is supersymmetry, the idea that for every fundamental particle a far heavier super particle can exist. This is the main candidate to make up most of dark matter.

Though no longer officially in charge, Dr Evans has continued to live near Cern and to take part in two important research exercises there, but he has also found more time to involve himself in educational activities. A visiting professor at Imperial College, London, he is passionate about getting more young people interested in science as a career. Nor is this lack of interest just a British problem, he notes. In Europe generally, he notes, the number of young people interested in science is going down. “Europe needs more scientifically trained people or it will be in trouble in 20 years’ time. Not everyone can be a research scientist but modern industry needs scientifically educated people. This applies particularly in Wales because we have to attract high technology industries.”

Visits to India and a  number of other developing countries have convinced him the level of education is increasingly very high. Wales, too, he argues must have a highly educated population. In this respect the Welsh Government’s recognition of the importance of scientific education and its appointment of a science adviser are seen by Dr Evans as important steps, for which he argues Rhodri Morgan, former First Minister, deserves credit.

Much of his work now is with young people, including schools in Wales. He is involved in a big educational project in Bangor this June and through video-conferencing (where he says Welsh schools are well-equipped) he has been able to talk to as many as 30 schools at a time. Much of his focus is on how to motivate teachers, whom he sees as the key to encouraging in pupils a love of science. Another educational project will explore the frontiers between physics and biology.

Cern itself is an expensive operation and Britain, one of the founder members, contributes 12-13 per cent of the annual running costs of roughly £1bn. Can this be justified when cuts are being made across virtually all areas of Government spending? Dr Evans is, understandably, in no doubt. There have firstly been important spin-offs, including medical advances. The University Hospital of Wales in Cardiff is one of a number of hospitals worldwide that has a Positron Emission Tomography scanner (costing £16m) that arose from Cern’s work. It  enables doctors to see regions of high metabolic activity in the body, helping to establish the malignity or otherwise of tumours. Cern, which was crucial to the original development of the world wide web is also behind a more advanced grid for sharing data.

Beyond these direct benefits there is a wider educational role. Cern has 2,300 staff, 783 fellows and 9,534 users – young people, mainly post doctoral students, learning to work at the frontiers of knowledge. Not all of them end up in particle physics but take up other high-powered careers where the analytical skills they have honed at Cern can be put to good use. Cern itself shares its results with collaborating institutions around the world, which help to analyse the data.  “It is becoming much more difficult to prise out the last secrets of nature. This is why we have to co-operate,” he notes.

This ability to co-operate would seem to be a British – and Welsh – quality and to have helped the UK play a leading role in Cern. “That is one of my attributes – I have been good at getting people to work together,” Dr Evans confides. It is an ability he hopes he can now bring to getting science back to a stronger place in British education.

March 2nd 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time for Welsh rivals to work together

Rivalries in south east Wales are holding back change and need to be buried, Rhys David argues

The nature and the scope of the relationship that should prevail between Cardiff and its hinterland is one of the great unresolved issues within the Welsh polity. It involves at one level the physical boundaries of the various local government and other authorities governing the area. Is Greater Cardiff, to use that taboo term, Cardiff and the Valleys, Cardiff and the Vale, or Cardiff, the Vale and the Valleys?

At another level what should the responsibilities of those authorities be and at which tiers should they be vested? Even more importantly where within a more co-ordinated region should scarce resources best be directed to ensure the greatest prosperity for all?

These are all important issues open to debate but, as a recent IWA conference Getting Ahead Together: Connecting Cardiff and the Valleys, made clear the time has now come to resolve matters and take action. Old boundaries have now become completely permeable.  Previously vibrant communities are no longer self-sufficient as they once were when jobs were close at hand. Large numbers now travel daily across the region to where the employment, the housing and the retail and leisure facilities are. In practice, if not in form, the city region is already here.

How much better therefore to plan for the allocation of resources on this much wider basis, so that important decisions on where housing would be best placed, on how most efficiently to deal with transport provision and waste management, how best to ensure south east Wales is a strong contender for economic development projects and how it makes the most of its tourist potential.

This is already being done in Scotland where the reality of city regions has been recognised. Across the world, too, some of the most successful cities such as Manchester, Stuttgart, and Vancouver – all of which were highlighted at the conference – are those that have managed to put aside local rivalries and work and plan together, bringing tangible economic benefits to a wide population.

Yet if Wales is to go down this route – probably in Cardiff first  but later in other parts of the country – there has to be buy-in from all concerned and not the residual feeling that this is just the capital on another aggrandising trip. In Manchester this has happened. The spokesman for the Manchester “brand” is now as likely to come from Wigan or Bury as from the city itself.

We need to reach the same degree of consensus in south-east Wales so that someone from Nantymoel or Abertysswg can feel as confident about projecting the Cardiff region as a Cardiff & Co ambassador. For this to happen everyone in the region must feel – and see tangible evidence – that they, too, will benefit from promoting the Cardiff brand.

The problems in parts of the region, as we all know, are chronic and have responded only partially to countless previous initiatives. This is no time, therefore, to get bogged down in new local government structures. The solutions must instead be practicable and capable of swift introduction, and this is the challenge the city region task and finish group under Elizabeth Haywood set up by business and enterprise minister Edwina Hart must rise to.

Fortunately, there is one project in south-east Wales on which there is already widespread agreement and around which the region as a whole could coalesce to make a strong case to the UK Government. Electrification of the Cardiff suburban railway network – from Ebbw Vale in the East to Maesteg in the West could in itself help to invigorate south-east Wales in a way no previous public expenditure has managed.

The relevant local authorities, transport groups, the Welsh Government, and business organisations throughout the region need to come together now to create a new overarching structure that will make achievement of this goal a priority and an inevitability.

December 1st 2011

Confidence needed to shape our future

Rhys David looks at the work to date of the Welsh Government’s sector panels

“Welsh bio-technology company sold to world’s biggest pharmaceuticals giant in multimillion pound deal”; “Material sciences breakthrough from Swansea University labs”; “Anglesey welcomes 50th cruise ship of the year”.

These are the sort of headlines we might be hoping for from the strategy of concentrating much – but not all – of the Welsh Government’s efforts on nine key areas perceived to offer good prospects for growth, an approach announced in 2010 as part of  the then coalition’s economic renewal programme. But are we likely to be reading them any time soon in our newspapers or on our screens?

The odds, it has to be admitted, are long. Conditions in Europe are against us: the Continent’s recovery is likely to be slower than that of the US and Asia. Wales has skills and infrastructure deficits which have defeated long-standing aspirations and attempts at a cure. And competition will be tough: there are few advanced territories that have not identified sectors such as biosciences, advanced manufacturing and the creative industries as their targets.

The Welsh Government’s Sector Strategy

Six sectors were originally chosen

  • Advanced Materials and Manufacturing
  • Creative Industries
  • Information and Communications Technology (ICT)
  • Life Sciences
  • Energy and Environment
  • Financial and Professional Services

A further three were added later

  • Food and Farming
  • Construction
  • Tourism

Yet, as Lord Rowe-Beddoe said at the IWA’s recent national economy conference, breaking a 16 year vow of silence as a past chairman of the Welsh Development Agency, we need to recover some of the self-belief Wales was exhibiting in the closing years of the last century. Then, if not everything, at least quite a lot seemed possible. Lamenting the constant drip-drip effect of poor statistics and the public unease these could promote, he said we must get back to believing that we are more than capable of shaping our future. Why otherwise would inward investors want to come to Wales, he queried.

Cue Sir Chris Evans, another speaker at the IWA event, who just happens to be chairman of the life sciences sector panel as well as one of Europe’s most successful scientific entrepreneurs with a record of starting 80 companies and creating new value of more than £5bn. Midway through March this year Sir Chris and Business Minister, Edwina Hart, unveiled plans for a new fund to be supported by £25m a year of public money in each of the next two years, with the aim of attracting similar amounts of match-funding from the private sector. The fund, which will have its own private sector managers based in Cardiff, is designed to support existing and incoming businesses in the life sciences sector, and to attract top scientists to work in Wales.

At the IWA conference Sir Chris had identified what he saw as the sector’s main problem in Wales: commercialization and internationalization of activities once companies had been started up and begun to grow. As the most tangible outcome so far from the sector strategy exercise it is undeniably impressive and certainly sets a benchmark for the other sectors to follow. Here, however, the results so far have been mixed. Some panels – and it has to be remembered nearly all have been in place for more than a year – seem to be barely beyond the stage of sketching out where their sectors stand.

Take for instance the financial service sector. Its advice to the minister describes its vision thus: “To make Wales the most competitive region in the UK for financial and professional services outside London by 2021”. One of its challenges is to “grow employment in the F&PS (its acronym) sector from 124,000 to 200,000 by 2021, while another is to grow jobs and GVA [Gross Value Added] in our sector faster than the UK average”. A “key driver” is summed up in this baffling statement: “The 1.4m population living in the Cardiff City Region, and its close proximity to London make Cardiff one of Europe’s fastest growing cities.

The suggested strategic priorities include the need to “sell Wales’s business propositions to the world and particularly London” and provide training support to improve the “rich pool of professionals available for fast-growing businesses”. To deliver the vision it will among other things “target international financial and professional services  businesses”, “offer a flexible whole of Government approach with generous funding” and engage the largest 100 F&PS companies in Wales, and “develop a three year business plan identifying growth opportunities for them”.

Similar pearls of wishful thinking have sadly been heard before. Indeed, it would be worth looking back at the papers left behind by the South East Wales Financial Initiative headed by City financier, Godfrey Jillings, in the 1990s. Jillings opined then that Cardiff and the rest of south Wales would secure professional services because of its “advanced electronic communications and high calibre staff”. He was clear most of the investment in Wales would be back office functions and indeed this has proved to be case. Which businesses or business operations the latest incarnation of Wales as a financial centre will comprise or what form Government support should take is not defined by the latest panel, leave alone how the journey from boosterism to bricks and mortar will be made.

To be fair there are some sensible ideas in the various reports and some senior businesspeople have been recruited.  The ICT panel starts with the rather depressing observation that its sector is largely invisible on the world stage and has actually seen a decline in companies and employees since 2002. It identifies priorities – stronger links between suppliers, and users of ICT products and services, public sector procurement opportunities, and increased R&D, but the delivery mechanisms it suggests – active marketing and communication of Wales’s ICT message, for example, or closer engagement with companies in the sector – can be little more than holding comments.

There are some sensible recommendations from the creative industries panel which wants the sector among other things to focus resources on those creative businesses which sell or license products and services to markets outside Wales, and to ensure that training and education relevant to the sector are aligned to the needs of business and the digital economy. It also has ideas as to how the priorities could be delivered, for example through continued Welsh presence at trade fairs, access to finance – particularly for export-oriented businesses – and a strong Wales Location Service. Likewise the advanced materials and manufacturing panel wants to see clear milestones established, a much stronger evidence base, strategic evaluation of capital projects and a defined delivery mechanism to govern the sector’s path along the agreed route map. Good stuff but not the flesh on the bones that is needed, a criticism that applies to most of the panels.

One nagging doubt about the sector strategy and its chances of success is bound to be a point made by Professor Garel Rhys of Cardiff University at the recent House of Commons select affairs committee hearings into the Welsh economy. Referring specifically to inward investment and the re-organisations that had taken place, including the abolition of overseas arm International Business Wales, he claimed the Welsh administration in Cardiff was short of the right sort of competence. Many young officials, he felt, lacked experience and feared getting things wrong. “The base unit of decision-making is increasingly the sector team. However, so many of these are so small they cannot do very much.” He adds later: “Potential investors all too often feel that they are being shunted back-and-forth when they try to establish contact with the Welsh administration and to no real effect. The experience… is more driven by ticking boxes than by decision-making. Some investors have been moved on by sectors that felt a project was too big for them, others felt they were facing “boys with toys” who displayed a failure to understand the nature and significance of a project.”

Similar though somewhat less trenchant doubts about the capacity of the Welsh civil service were expressed at the IWA conference which clearly will have to be operating at its most competitive and commercially-minded if the sector strategy is to deliver the goods. Where led by as forceful, decisive and successful a character as Sir Chris Evans, the process of establishing a clear strategy and implementing it will clearly be driven along at a rapid pace and it is likely officials too will be galvanized. Every single one of the panels, however, will need to be as pro-active. They will need in each and every case to be a combination of powerful and industry experienced members with forthright ideas on how to inject “velocity” – one of the key words at the IWA conference – and experienced Government officials with the authority and courage to make tough decisions.

Time is clearly pressing, as the latest unfavourable – though in many ways misleading – comparisons of Wales with Greece and Romania make clear. If we fail to get the latest structure for delivering economic growth both right and capable of delivering,  there is a real danger the good old Welsh economic jalopy – registration number GVA 78 – will just chug along as before, the sat nav constantly demanding a series of U-turns, lefts and rights.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merthyr’s Progress

Rhys David measures the gap between vision and reality in the contemporary development of the first town of the industrial revolution

Is Merthyr Tydfil getting there? For those who only know the Welsh borough from its usual ranking at the foot of a range of prosperity and health league tables, the question might hardly seem worth asking. Yet, in the view of Alistair Neill, the determinedly optimistic Scots chief executive of the council, the figures that usually make the newspapers reflect a different past from which the area is now escaping.

According to Neill, a former senior executive with a number of multinational companies who is now in his seventh year at Merthyr, perceptions of the town are changing – whether they be those of its own residents, those returning after a long absence, or potential investors. Census Office statistics suggest that after declining for most of the past 100 years to a point where Wales’s once biggest town is now home to fewer than 60,000 people, the population has grown in each of the past two years, and is expected to continue to do so, albeit modestly.

The body blows that have hit the town over recent years have not stopped. The most recent was the cessation of manufacturing at the iconic Hoover plant, Merthyr’s biggest employer in the post-war period. It still has daunting socio-economic problems with some of the highest rates of sickness and lowest skills not just in Wales but in Britain as a whole.

Nevertheless, Neill argues, much of what was set out in Vision 2010, the plan adopted shortly after his arrival, has been achieved, starting with a transformation in the services provided by ‘Team Merthyr’, the 4,000 people who work for the borough. The Local Government Data Unit’s 2008 annual assessment found Merthyr to be the highest performing council in Wales. This was a marked turnaround from earlier Audit Office reviews that had identified it as a potentially failing council where intervention might be needed.

The changes have been brought about first of all by making sure councillors enjoyed a greater role in policy formulation – rather than implementation – and by ensuring staff were more aware of  what was going on in departments other than their own and could contribute ideas more widely. Improvements have been sought through a bottom up rather than top down approach. “We wanted staff to know that their actions did make a difference and we were keen improvement teams were not just run by senior management. Someone on reception who sees 200 people coming in to the council each day is going to have a powerful set of views on how we react to visitors,” Neill says.

Working with the Welsh Government and a range of other partners, the council has been able to embark on a large scale programme of regeneration across the town. In part, Neill explains, the aim has been to provide for the people of Merthyr, and its catchment area of up to 300,000 people across the Heads of the Valleys, a range of facilities and services not previously available but which would be taken for granted in most communities across Britain.

A new retail park has brought in big name outlets such as Debenhams, Next and JJB Sports and also family restaurants. Such has been its popularity, a 65,000sq.ft Tesco superstore on land alongside the station has already had to add an upper deck to its surface car park. It is seen as a key support for smaller niche and locally-owned shops nearer the centre of town. The pedestrianised town centre has been paved in granite, and it is hoped one of its previously disused buildings, the old Town Hall, will re-emerge as a theatre and arts centre – a facility the town currently lacks.

A new business park has also provided the accommodation modern enterprises require and the Welsh Government has moved its social justice department to a site just outside the centre. Though many of those working there will be commuting from Cardiff, it is hoped some will decide to settle permanently and as staff move on they will, it is expected, be replaced by locally recruited replacements.

So, much of the ‘hardware’ – the town centre, new leisure, retail and business parks, riverside and heritage trails – have been put in place or repaired. Stock transfer of the council’s housing to a housing association promises to release substantial funds for bringing properties up to modern standards.

More difficult will be the ‘software’ – the educational attainment of school leavers, the  skill levels of the working population, the poor health of not just the elderly retired but of many of those of working age. The investment that has taken place will be of little long term value if those problems cannot be sorted out.

An unstated part of the overall strategy has been to make people feel better about living and enjoying life, leisure and work in Merthyr and hence about themselves too. The next stage is to try to turn this into more positive attitudes towards learning – the sine qua non pathway to stimulating and well-paid jobs. Though many of Merthyr’s schools have been getting positive ratings from inspections and have had new buildings, this has not been reflected in the proportion of pupils going on to achieve good GCSE and A Level results, which still lag those for the rest of Wales.

Because of Merthyr’s small size its schools have not been able to offer a wide enough choice of curriculum options at sixth form level. There is also a problem of disengagement among young people not interested in academic options, many of them, in Neill’s words, having great brains and fantastic talents but weak literacy and numeric skills.

The proposed solution – currently out for consultation and not without its opponents -is a move to a new-build post-16 tertiary education system, the Merthyr Learning Quarter. This would cater on one site for academically and vocationally orientated young people, entering through the same gates for different courses enjoying equal levels of esteem. The centre will be developed jointly with the University of Glamorgan, which merged with Merthyr College in 2006. It is hoped the new Merthyr Learning Quarter will double the number of curriculum options available and greatly increase the numbers interested in carrying on with their education beyond 16 years.

Another ambition, is a university presence in the town. The idea is not simply to add to the already long list of Welsh universities. A university institution in Merthyr would begin by offering foundation courses designed to encourage individuals who might not otherwise have the confidence or the necessary qualifications to take the first steps towards a degree. “This is about saying ‘Look, we will bring a foundation course to you, we will work with you so that you don’t have to go away to study. You can prove to yourself you can do this and go on to another university to finish it’” says Neill.

New approaches being developed jointly with the health authority and local authority social services will attempt to persuade older people not to see themselves as “poorly” or less than fully fit, a significant attitudinal problem in the area.  The aim will be to try to keep people away from hospital, or, later, a care home.

For other age groups a health park is planned opposite the retail park which will bring together GP surgeries, and a range of other primary care services, with a strong emphasis on the importance of diet and leisure activity as a means of maintaining health and preventing illness. It is hoped that this prevention strategy will reduce the high numbers in the area on incapacity benefit and speed their return to the workforce.

The aim is for the Merthyr that emerges from all this activity to have a growing population with higher skills and greater confidence and fewer individuals on benefits. At the same time infrastructure will improve. The town centre will be renewed with good communications along the upgraded Heads of the Valleys road and the A470, plus a doubling in the frequency of train services to Cardiff. Merthyr will be in a much better position to market its dramatic geographical situation and its potential as the southern gateway to the Brecon Beacons. All of which should make the town more attractive for investors

The gap between vision and reality could, of course, remain wide, particularly if the resources needed to complete developments in the pipeline – like the tertiary system – are not made available as a result of forthcoming public sector expenditure cuts. With the era of significant large scale overseas investment projects now over, it will be a challenge to create the jobs needed to keep an increased population in work, even if skill levels can be dramatically improved. And, of course, there always remains the prospect that the brightest and best will continue to flow out to the Welsh coastal plain and beyond.

There is an institutional danger, too, that the constant urge to re-organise public sector organisations in Wales – this time to reduce the number of local authorities from the present 22 – could yet see the borough distracted by further upheaval just as its plans begin to show promise.

For the moment, however, there is enough going on in the town and sufficient plans for a brighter future for the gloomy statistics not to appear to be all that the town is about. As Neill says: “Merthyr’s place in the past is secure as a driving force of the industrial revolution. Its current regeneration aims to restore it to a significant status in the economy and life of south Wales once again.”

March 3rd 2010

Nantgarw: The Welsh cog in world aeroengines

Mention Nantgarw to Weng Jiabao, the Chinese premier, and his eyes will light up. The second most powerful man in the world’s most populous nation is one of a stream of dignitaries who have visited the giant GE aero-engine maintenance plant near the former mining village close to Cardiff and come away highly impressed. Indeed, on a  visit to London several years later he made sure the former Welsh Development Agency chairman, Lord Rowe-Beddoe, received an invitation to one of the occasion’s formal dinners and sought him out to tell him  he would never forget the hospitality he had received (or in all probability the opportunity to press some of the buttons on the huge pieces of test equipment on site).

GE’s 1.2m sq. ft Cardiff plant, like the Nissan plant in Sunderland or the Halewood factory of Jaguar Land-Rover, both of which have recently benefited from investment by their overseas owners, is an illustration that Britain’s less favoured areas can cut it in big and competitive engineering operations. Employing more than 1,000 highly skilled individuals, the plant, winner of the Company of the Year trophy in the most recent IWA Business Awards, is in the words of its Welsh managing director, Adrian Button,  harder to get into than Oxbridge.

It recruits from around 10 miles  for its 25 annual apprenticeships, receiving more than 900 applications in the latest search.  After an initial three years apprentices spend another two  training on the job before becoming fully productive,  a five year investment by the company in its staff.  There are a further 50 graduate or sandwich course interns who join for a year across a range of management and engineering disciplines and are then taken on if they and the company decide they like each other. “It’s not possible any longer simply to put an advertisement in the paper and recruit the people we need,” says Button.

With a turnover of more than £1.2bn a year GE’s Welsh plant is a big cog in the wheel that keeps the world’s aircraft flying, looking after a total of  90 power plants at any one time and sending back to airlines this year a total of 500 good-as-new engines that could then stay on wing for a period of five to six years and last up to 40 years. Engines are trucked into Nantgarw from many parts of the world and are subjected to inpection by borescope (a flexible telescope for looking into inaccessible locations) so that engineers can determine what work needs to be done.

Some may need to be completely disassembled into as many as 20,000 pieces, which will then be cleaned, non-destructively tested, and x-rayed, for the serviceability of each part to be determined. They are then repaired, replaced and put back together, firstly as modules. Some will be sent to other GE centres of excellence as far away as the US or Singapore for specialist repair. Nantgarw itself carries out such work on behalf of the group on large engine cases. After repair every engine is put through further tests typically lasting six hours, before a final test replicating conditions encountered in flying, in particular take-off.

The Nantgarw plant looks after several different engine types but principally the CFM56, the world’s most popular engine with 20,000 currently in service worldwide on narrow body aircraft. The plant also has other engine work, notably the GE90, the  biggest aero-engine in service, developed exclusively for the Boeing 777. “We are lucky here that the engines we have the capability for are leading-edge, new technology products. All airlines are looking to buy aircraft powered by the most efficient engines,”says Button, a Llantrisant native who joined GE as a quality engineer, then went off to run a GE ignition plant in Jacksonville in the US  before returning to manage Nantgarw.

Nantgarw’s competition is both internal and external from some 20-30 plants sharing at least some of its competencies across the globe. Some airlines, such as Air France/KLM and Delta in the US, have their own maintenance operations and indeed GE’s Welsh plant derives from a previous British Airways facility set up after the second world war. British Airways remains a big customer as, too, are Emirates and several Chinese airlines.  The low cost airlines –  big narrow body airline operators relying heavily on the CFM56 – figure prominently in the order book, preferring not to undertake their own maintenance. Easyjet, Ryanair, Tui and Thomson among others all send their engines to Nantgarw.

Business like this has to be won, however, not just in competition with other big maintenance organisations but against other GE plants. Parent GE, which has long held on to a position among the world’s top ten companies, with products ranging across financial services, healthcare, imaging and power generation as well as aero-engines, has aviation division plants at several locations in Britain, in Prague, Singapore, Malaysia, Brazil, and across the US. The CFM56 and the other engines Nantgarw works on is maintained in a number of these and they could either win or be allocated work the Welsh plant currently handles in negotiations the parent has with the airlines.

Nantgarw has managed to continue to thrive, however, generating profits for its owner. “We always run the risk of losing  to competitors. We are never the lowest on cost. Others will have rates of labour that are much lower but we win work based on the quality of what we produce here in Wales and on our turnaround times,” says Button. “Our workforce is highly skilled with a  technical background second to none. Another advantage, he asserts, is that as a small country Wales has the capacity to move quickly. Support from the Welsh Government  – which last year  helped to fund 100 posts being created to service the GE90 – has been strong. Close links have also been established with local universities, including, a few miles further north along the A470, Glamorgan, which has its own aeronautical department.

To continue to offer  high quality, well-paid jobs the plant must, according to Button, continue to win business to work on the latest GE engines. The Boeing 777’s new triple composite engine, is a target. “We would like to have the investment to offer that.” It is a business, too, in which nurturing good customer relationships is vital. The Nantgarw team has to make sure that airlines from as far afield as China that currently entrust it with their aircraft are willing to continue to do so.

As a good corporate citizen, GE has reciprocated Government and local support. Its  social responsibility programme  has won  a number of awards, including at another IWA  ceremony, the Inspire Wales Awards 2012, for its work with Llamau, a charity helping socially excluded, homeless young people in south Wales. It has strong relationships with a number of schools in the area and has recently broken through the £1m mark of support for children’s hospice, Ty Hafan. It has also made efforts to attract more girls on to its apprenticeship schemes but finds itself  up against the choices girls make at 13. If they have not been able to offer maths and sciences at GCSE they are unlikely to secure places.

As far as possible purchases are made locally, though much of the plant’s requirements has to be obtained from international suppliers. Nevertheless, some £20m a year is spent locally on support and other purchases, and items such as tools are also obtained locally if possible.

Complacency would nevertheless be dangerous. The aviation business is already growing much faster in developing markets such as China, India, Brazil and the Middle East than in Europe where a greater degree of saturation has been achieved and it is inevitable that aero-engine maintenance will grow just as rapidly in those territories. It also means, however, there is a bigger world market for Nantgarw to chase.

More could be done, Button believes,  to improve Welsh competitiveness. GE would like to bring freight into Cardiff Airport but finds it has to use London Heathrow or Manchester. Nantgarw reports to GE Aviation’s headquarters is in Cincinnati so a direct flight from Cardiff to the US would also be helpful, a priority other businesspeople in Wales have also identified.

The key, however, is to stay at the forefront of GE Aviation’s business. “The plant currently has the capability to work on engines that have a potential life of 40 years so we have that market in front of us. We have to maintain that  position. We are not going to sit back. We must go out and grow, “ Button says.

Rhys David

June 18th 2012

Subtle Stirrings in La France Profonde

A regular visitor to France, Rhys David finds much to admire and possibly lessons to learn in the efforts rural areas are making to revive

Peter Mayle should probably take some of the blame. Charmed by his 1989 book A Year in Provence, a generation of comfortably-off Britons set out to find their dream rural retreat in La France Profonde.  The French appeared not to mind.  The post-war drift from the land, as mechanization replaced the large peasant labour force of old, had left countless properties in town, village and countryside vacant and, by the native population at least, unloved. Doing up old buildings was a British passion – the French thought it more sensible, if they were not moving to the big cities to buy a modern detached property on the edge of town and to abandon the thick stone-walled cottages without modern plumbing and damp courses – and sometimes gas and electricity, too. They knew what life in winter in such homes was like.

Twenty years later the pendulum seems to have swung. This year evidence suggests there are now even more À Vendre signs than for some time but this time many of the sellers are British people who have enjoyed their visits over the past decade or so but are now older and find their children are less enthusiastic about maintaining a distant property on which two sets of French taxes have to be paid. These come on top of routine maintenance that sometimes has to be negotiated from a distance or through the agency of friends. Holiday options are different, too. The French idyll now has to compete with, among others, the cruise – 10 destinations in 14 days perhaps – and with more exotic locations such as Cuba or the Maldives, or a visit to family in Australia or New Zealand.

Yet, the picture the British visitor conjures up from travelling through eerily quiet, shuttered town and village centres might not be the right one. Though the stone cottage or farmhouse may have to wait for another change in holiday fashion or a new wave of outside investors, there is an unseen vitality in many of France’s communes and a strong desire among those who have stayed to secure a future.  In Mouliherne a small town I have known (as a visitor not an owner!) over the past 16 years, much has changed, on the surface at any rate. The restaurant there in 2000 has gone, La Poste has moved from its Napoleonic villa style building, complete with a row of serious-looking clerks behind metal grilles, to a modest bureau run on an agency basis next to the Mairie, the fancy goods shop has closed, and the church now only has services once a month. School buses apart, there is virtually no public transport.

With a population of between 900 and 1,000 – less than half the figure immediately before World War One, the town centre now only supports one boulangerie, the other having closed long ago but there is a reasonably well-stocked village shop trading under the Viveco brand (a French Spar equivalent) and a long-standing bar, intermittently open and patronized entirely by locals. There is, too, a high quality butcher and charcutier selling local meats, though he only opens in the mornings, trading during afternoons at one or other of the local village markets.

It is what happens beneath the surface, where the visitor rarely penetrates, that is most interesting, and which perhaps offers some insights that could be valuable to our own policy-makers keen to find solutions to rural problems in Wales and elsewhere. In super-efficient but paradoxically low productivity Britain there would be gasps of horror at the thought that Mouliherne operates at the fifth tier of local government – a commune in the canton of Longue, in the arrondissement of Saumur, in the Department of Maine et Loire, in the Region of Pays de Loire. Yet, M. le Mayor Rene Louvet and his community council have considerable powers and responsibilities and a budget that would make bigger British community councils weep with envy.

There are eight commune employees and they look after the streets and sanitation, the green spaces and public buildings, the school canteen and school support services, the post office and local admin at the Mairie. (How strange that Veolia, as the former French water company Compagnie Generale des Eaux is now known, carries out local government services such as rubbish collection even for big cities in Britain while in France it is a local matter.) A few minor services are being added, too, following a reform and regrouping of some local government in the area. The commune has also recently taken over responsibility for a town website started by a local IT club and developed it into an interactive facility for communicating information on local developments and enabling residents to make their views known.

This fits with the priority identified by the mayor and his council of sustaining a viable village, and the choices made at the Mairie meetings reflect this. When officials in faraway Nantes decided in 2014 to cease to operate the previously state-licensed Tabac in Mouliherne, the commune decided its bar and restaurant were too important a local amenity to allow to disappear. The building was bought and refurbished by the commune using local and regional funds at a cost of nearly €150,000 and a local entrepreneur and chef found to run the new Sur Votre Route, the name an acknowledgment of the town’s role as a crossroads on the old Gallo-Roman roads linking Tours and Angers and Le Mans and Poitiers.  In its first six months it served 4,000 meals and has been judged a success.

The next project to be funded, again drawing on local and regional resources is a Salle de Sport. The local Community of Communes is making available €4m over five years on facilities in a number of small towns locally and when completed in late 2016 Mouliherne’s new hall will offer indoor tennis, badminton, volleyball, basketball, football and handball. The commune already supports an extensive open-air facility, the La Louisière Plan d’Eau, one of the many bodies of water found on the outskirts of small French towns for aquatic-based activities, and a Salle des Loisirs next to the Mairie for indoor events and official gatherings.

Mouliherne has also instituted a new farmers’ market, currently held once a month with the aim of supporting local producers and ensuring that money earned in the area is re-circulated there, too. The district’s main industry is forestry but it also has mixed farms and a large enough acreage of apple orchards on its outskirts to justify the holding annually in October of a big regional Foire des Pommes.

Yet, it is not just the initiatives directed by the commune that are contributing to the re-invigoration that seems to be taking place. There is a volunteer-organised after school club, parent teacher association, old people’s club, two types of boule, yoga, IT, a fishing club, a theatre group, seniors football and horticultural, floral, canine, and walking groups. The efforts seem to be working, too. Over the last eleven years there have been 45 marriages, 100 births – 15 more than the number of deaths so a small increase in population may be occurring if incomers are also balancing departees. The annual birth rate means a small primary school with a modest 70 pupils is being sustained.  Though there are other similarly small centres nearby and a bigger centre at Baugé, ten miles distant, consolidation of classes elsewhere has not taken place.

Attracting more tourists appears not to be a priority. It has a fine Mairie, a 13th century church with a twisted spire typical of the Baugé region and outside a Lanterne des Morts built on an old ossuary, a prayer place and a beacon for travellers high above the town.  It also boasts a preserved communal lavoir where clothes washing in the town’s River Riverolle took place. Nevertheless, Mouliherne’s attractions merit only a mention and not even a star in Michelin. Its charm is in part its ordinariness and with second home owners retreating It seems to have set its hopes on renewed growth from within.

Whether all its activity amounts to more or less than is achieved in a similarly-sized small town in say Powys or Cumbria would require a full scale academic study comparing and contrasting. The differences between Britain and France in culture, history and organization, particularly the role of the state and local government are enormous. Nevertheless, to the outsider it does look as though rural France is giving survival a good shot. When we leave the European Union it would be good to think we do not cease to look outside our borders for examples of just the sort of good practice that could bring improvements within our own communities as well.

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Rhys David is an author and Honorary Life Fellow of the IWA.

Brexit: Seminal Event or Secular disaster?

Brexit could be a turning-point in more ways than one but much will depend on implementation and what follows, Rhys David suggests.

Peak oil, when the maximum rate of extraction, followed by decline, is reached, keeps getting pushed back but does the Brexit vote suggest peak globalisation – the progressive breaking down of barriers to global free trade – has been reached or perhaps faces a significant pause?

Economists have been worrying about a slowing down in the process for some years and their fears will certainly have been given momentum. Even before Brexit the signs were there in a slowing down in merchandise trade compared with the two decades leading up to the financial crisis of 2008. China, the export industries of which have been the driver behind the rapid growth in trade since the 1990s, has slowed down and is seeking to re-orient its investment towards the domestic market; and trade deals such as the Transatlantic Trade and Investment Partnership (TTIP) have become more difficult to negotiate in the face of opposition from trade unions and others in Europe. They fear further marketization of the European economy, including cherished sectors such as healthcare.

Following the June 23rd vote Britain now needs to negotiate its own trade deals outside the EU in a world where multilateral organisations set up to promote freer trade, such as the World Trade Organisation, have been losing their potency and becoming increasingly side-lined by the spread of bilateral deals. Across developed economies the impact of austerity is, too, continuing to be felt with some economies, such as Italy, unlikely to reach pre-crisis levels and hence consumer demand for internationally traded products until the 2020s.

How could this threat to what has seemed an inevitable progression have come about when so many people across Europe, including Britain, have benefitted greatly from freer trade? The price of those two human necessities – food and clothing – has fallen in recent years, helping to keep inflation at near record low levels. The previously inexorable rise in the price of running a car or a vehicle fleet has dropped as a result of an oil glut. Every imaginable commodity can now be summoned to the door with a few computer keystrokes from the mega-warehouses deployed across the Continent by Amazon and its competitors. In recent months British airports have been reporting record numbers of Britons flying away to take advantage of cheap flights and accommodation. Are we now be entering a period when barriers could creep up again?

Britons, albeit with a small majority, appear to have rejected the very instrument that has brought about these trading benefits – the EU. Why? Is there not a safety net for those poorer areas that have suffered from the global economic transformation brought about by the interaction of two factors – the standard shipping container and information technology, the combination of which lies behind today’s almost instant servicing of consumer needs and desires? What about all those blue signs proudly crediting the EU for the roads, bridges, arts centres and other projects in Britain’s poorer regions?

All true but if the British public has shot itself in the foot (and if some in other Continental nations are tempted to do the same) it could have done so in the true sense of the expression rather than the one in which it is now usually used. Like the World War One soldiers who carried out this act, it could be because they actively wanted to avoid something worse (going into battle in the case of the poor bloody infantry) rather than as an act of unintended self-harm. It could be that in rejecting the EU market vision, they are saying they also want a different kind of Britain.

At a recent finance conference in London in the immediate aftermath of the Brexit vote there was a sheepish acceptance on the part of several speakers that while Joe Public had indeed sprung an unwelcome surprise, the elite classes as represented by the overpaid denizens of the City of London had in large measure brought it on themselves. One admittedly pro-Brexit speaker at the FT’s Festival of Finance suggested neo-liberal policies as favoured by the EU had been oversold, with promises made that we would be moving into a period of permanent prosperity. The medicine globalisation would force on ordinary citizens would, like castor oil, taste horrible, they had been told, but it would be good for them in the end.

Instead, it had proved hard to swallow and had not made most feel any better. Wages for many people, including the middle classes had stayed the same or got worse; houses had become unaffordable and young people were unable to leave home to set up on their own; neighbourhoods where individuals had grown up and where parents and grandparents had lived before them now seemed unfamiliar as a result of large numbers of migrants moving in; schools with scores of languages being spoken were making people feel uncomfortable about the impact on their children’s educational prospects; moreover, austerity policies as a result of the financial crises of 2008 and its consequences had torn away large parts of the social security safety net on which the poor relied.

In a perceptive piece written four months before the Referendum vote the left-wing commentator John Harris writing in The Guardian could see what was coming, declaring that, although a Remain supporter himself, he had respect for the Leavers. On the Conservative side David Cameron had famously described UKIP as “fruitcakes, loonies and closet racists”, and one of his colleagues saw them as “mad, swivel-eyed loonies”. On the left, Harris noted, millions of Britons were seen as “gullible, if feeling charitable; as nasty and bigoted, when things turn cruel”. Harris had visited parts of Britain – the small towns of the agricultural East -where free movement was a reality, and where as a result, he argued “people had a feeling that huge and rapid social changes had been imposed on them by a power beyond anyone’s reach”.

In other parts of the country, too, there has undoubtedly been a feeling in older working class areas for some time that the system was rigged against them. The Brexit vote was a way of saying enough was enough. Literally billions have been spent in the south east on shiny infrastructure projects – Crossrail, Thameslink 2000, a £900m new station at Reading, with Heathrow’s new runway or some alternative still to come. Wales, by contrast, struggles to put together the funding to finance a relief road around Newport to remove M4 bottlenecks without breaking the budget, or to create a modest metro system on existing rail-tracks to better connect Cardiff with the poorer valleys that surround it.

People have tired of being told that spending on Heathrow, Crossrail or wherever will really benefit them 200 or 300 miles away because of some long-promised but never-delivered trickle-down effects. Nor is there much confidence HS2 will make Britain less centripetally focused on London. Yet, the concentration of infrastructure spending in the southeast has been rendered necessary because of a heavily over-stimulated finance sector much of which has largely detached itself from the rest of the British economy in order to service the needs of the multinational corporations central to global capitalism.

Other examples of unfairness can be cited. Agonised discussions over ways of relieving the pensions liabilities at Tata as a means of saving the company’s British jobs contrast powerfully with the sweetheart tax deals that British Governments over recent years have offered multinationals such as Google and Amazon, the latter itself responsible for changes in retailing that have destroyed thousands of jobs on British High Streets.

And, of course, there is the issue of executive pay. UK chief executives, backed by self-serving remuneration committees have become the beneficiaries of absurdly high pay packages and bonuses which often seem to bear no resemblance to performance. At the same time to reward shareholders, companies have chosen to retain profits and hire cheaper labour rather than share the benefits with their employees or invest in new technology that would help to boost Britain’s poor productivity record. Trade unions and many of their members have begun to realise that the vastly bigger labour market which employers could choose to dip into is not, as they had hoped and been promised, going to produce a one-off jolt to workers in industries across Britain but a permanent and long-lasting negative impact on their wages and their prospects.

To this extent the momentous decision taken by a small majority of the British people is not anti-immigrant per se or anti-Europe but a sign that sometimes ordinary people can see more clearly than their “betters” and, called upon to speak, have said, “All this is wrong. You promised us that globalisation/EU membership would bring prosperity but where we once made goods or delivered services we could be proud of we now despatch orders for products made half way around the globe to wealthy customers from an Amazon warehouse where our every activity is tracked and monitored.”

It will be argued that these examples of unfairness felt by ordinary people up and down the country could all be put right within the existing British political structure while retaining EU membership. After all, Government can still, despite the EU, legislate on executive pay, choose more broadly where to place infrastructure spending, and impose higher taxes – particularly on excessive rewards – to fund more generous social security payments It has not, however, happened.

Likewise, if there are aspects of the EU that we find unacceptable – its lack of accountability, its overweening bureaucracy, or perceived democratic deficiencies – we should, it will be argued, stay in and press for reform. The counter to this, however, is that campaigners have been calling for reform for most of the 40 years Britain has been a member with few tangible results. This in itself is hardly surprising, given that agreement has to be achieved on every occasion among 28 members, possibly to be joined by others in the years ahead. It is not hard to argue that the EU has become just too unwieldy for its own good or that even more importantly that it can never resolve its serious internal economic problems unless it proceeds to full political as well as economic union – a process Britain has always resolutely opposed.

Though the EU has always muddled through this fundamental structural weakness was identified a very long time ago and has been repeated many times since. Writing in the London Review of Books in October 1992 before the introduction of the Euro, the economist, Wynne Godley pointed out: “What happens if a whole country – a potential region in a fully integrated community- suffers a structural setback? So long as it is a sovereign state it can devalue its currency. It can then trade successfully at full employment, provided its people accept the necessary cuts in their real incomes. With an economic and monetary union this recourse is entirely barred and its prospect is grave indeed, unless federal budgeting arrangements are made which fulfil a redistributive role …There has to be quid pro quo for giving up the devaluation option in the form of fiscal redistribution…If a country or region has no power to devalue, then there is nothing to stop it suffering a process of cumulative and terminal decline, leading in the end to emigration as the only alternative to poverty or starvation.” One example of the distortions EU policies are creating will suffice. In 2016, as The Guardian reported a few weeks back there are 25,000 Greek doctors in Germany. Surely Greece did not unwittingly train 25,000 more doctors than it needed?

It is some of these central issues relating to the EU, international capitalism and globalisation which the public in their wisdom have grasped well ahead of their politicians. So it is interesting that in her manifesto ahead of winning the job Theresa May the new Prime Minister made tackling one of these – executive pay – one of her first promises, called for employee and consumer representation on boards, spoke up for the defence of important industrial sectors, and made the moral case for taxation. Following her appointment, she has gone further, declaring her government will be driven not by the interests of the few but by those of ordinary people. Implementation – and there will be many opponents in business and elsewhere –  must follow but if it does they are changes that could bring reality to all the previous pledges made by Governments of all hues to tackle imbalances and inequalities in society.

It will only become apparent over a period of time whether Brexit will prove a turning point for globalisation as a whole, with other countries looking to adopt an as yet largely ill-defined British model, much as privatisation swept the world in the era when neo-Liberal policies were gaining ascendancy in the 1980s. As the days pass, however, it is starting to look more like a seminal event and perhaps not the secular disaster many had predicted.

 

Rhys David

July 13th 2016

 

 

 

For steel, read chemicals

Retiring Welsh economy minister Edwina Hart has a difficult last month in office trying to sort out the Tata mess and will perforce be leaving her successor an unenviable portfolio. My assessment of her record in office – she has been in every Welsh cabinet in a variety of posts from health to finance to economy since 1999 – appeared in the latest edition of Agenda, the magazine of the Institute of Welsh Affairs and can be found at www.clippings.me/rhysdavid

Surprisingly no link has been made by commentators between what has happened at steel with the similar fate a decade back of the British chemical industry. Remember ICI?  A company that went from being Britain’s biggest to complete disembowelment in a matter of years. Or for that matter Courtaulds, Fisons, Albright & Wilson et al. Britain was still among the top ten world producers of chemical products in 2014 but only just – at number nine just ahead of Italy. China is now responsible for nearly half world chemical output by value, well ahead of the US on 21 per cent. The UK industry is now little more than half the assize of that of South Korea with only wo per cent of output by value.

Devolution: Wales’s smouldering settlement

Why has devolution caught fire in Scotland but only smouldered in Wales?

Two similar countries but two apparently very different responses to the devolution process set in train with the establishment of the Scottish Parliament and Welsh Assembly 16 years ago in 1999. In the one a momentum that could lead to independence, in the other a cautious step-by-step acceptance of the new institution and a reluctance to move too quickly to the assumption of new powers. On the surface it might seem puzzling, yet Wales has come further than people realise in that period. Moreover, there is a debate going on in Wales on wider constitutional matters that is rarely heard in England. Yet, the issues are of importance to the whole of the UK.

National feeling has been strong in both Wales and Scotland for a very long time but “nationalism” – which, of course, I do not want to equate directly with devolution – has arguably been a stronger force in Wales over much of the past 150 years than in Scotland. Indeed, in some respects and at times Welsh nationalism has had similarities with Irish nationalism, though it has never been as violent. This is perhaps because the British Empire – the historical project which helped to unite our four nations for the 200 years or so until the post WW2 period – was always much more an Anglo-Scottish creation, delivering more to those two nations and attracting greater participation from their citizens than from Ireland and Wales, even though both those latter countries also enjoyed its benefits.

A minority in Wales, however, has always wanted the country to stand apart. There was a vigorous Home Rule movement in Wales – taking its cue from that in Ireland – at the end of the 19th century, with Lloyd George, among its leaders. It is often forgotten now that this is how he sprang to prominence.

And, just as in Ireland a difference of religion produced a sense of detachment from the broader state’s aims and objectives, so, too, in Wales a separate language – spoken in the late 19th century by half Wales’s inhabitants and subject, like Roman Catholicism, to discrimination – cultivated a sense of distinctiveness.  National sentiment, already spreading across much of Europe, grew under these influences in Wales resulting in the late 19th century in a period of institution-building – from national university, library and museum to international football and rugby status. The Home Rule impetus of the previous decades petered out, however, in the years leading up to and including WW1. In Wales its most tangible legacy was not independence and civil war, as in Ireland, or even what we would now call devolution, but the still quite important (for Welsh people) disestablishment of the Anglican Church in 1920.

Nevertheless, nationalism in Wales did not die and Plaid Cymru was actually founded – in 1925 – nine years earlier than the Scottish National Party in 1934. It also elected the first Nationalist MP since the Irish Nationalists – Gwynfor Evans in 1966, one year ahead of the SNP’s Winnie Ewing in 1967. There was also a long-running, if generally low-key, campaign of violence in support of broadly nationalist objectives in Wales across several decades. In the 1930s three leading figures in Plaid Cymru – all of them academic, and including its founder– were tried and jailed for blowing up an RAF bombing school being established in the deepest of Non-Conformist, pacifist, Welsh-language strongholds, the Llŷn peninsula. They were all gaoled, including Saunders Lewis, one of the founders of Plaid Cymru, and a leading Welsh scholar and playwright. (By contrast the theft of the Stone of Scone in 1950 from Westminster Abbey seems a little tame.)

The 1960s and 1970s were characterised by a recurrence of direct action. Bombs damaged public buildings such as tax and other Government offices in Cardiff and elsewhere, and targeted reservoir pipelines carrying water to Liverpool and Birmingham, the former city being seen as having acted in a colonial, undemocratic way in expropriating Welsh land to collect water for its citizens, even though its Parliamentary Act was opposed by every single Welsh MP bar one – and he abstained. The 60th anniversary of this event has been commemorated this month in Wales with rallies, newspaper and broadcast stories. Indeed, in nationalist circles the outrage it generated is credited with setting Wales on the road to devolution some 40 years later.

Long before Johnny Rotten and the Sex Pistols outraged public decency with his famous anti-royal version of God Save the Queen, the Royal Family was being mocked in Welsh pop songs, notably in the run-up to the 1969 investiture of Prince Charles, as Prince of Wales. Bombs went off before the ceremony, and there were casualties including one death, causing considerable anxiety on the part of the authorities, concerned as to the safety of the Royal Family on the day.

For a prolonged period, too, from the 1960s through to the 1980s the second homes of English people who had bought country cottages in Wales were being attacked and in some cases burnt down by the Meibion Glyndwr (Sons of Glyndwr) movement. Much of this – like the daubing of monolingual English road signs and protests against the lack of official status in public life and the legal system for Welsh – was, of course, language-oriented rather than directly political. Language protest and nationalist sentiment at this time did, however, share common boundaries and supporters.

So, why has Scotland leapfrogged Wales in pressing its demands? Why has the core independence vote in Wales never moved outside the 10-15 per cent range whereas in Scotland at the referendum last year it was up to 45 per cent? To some extent the language concessions that followed the earlier protests – which included a threat of a hunger strike to death by Gwynfor Evans leader of Plaid Cymru, if the Thatcher Government elected in 1979 reneged as it intended on a pre-election pledge to set up a Welsh language television channel – have taken the sting out of more extreme nationalist sentiment. And, could it be the Welsh are relatively happy with the degree of devolution and the incremental improvements in the settlement that have been achieved since 1999?

It is probably a bit more complicated. Scotland is a very different country from Wales with a different history. In recent times it has had the benefit of oil revenues that it could claim as its own, giving it a degree of assurance that if it did become independent it would not find itself significantly poorer and could perhaps even be better off. It goes back further, however, than the perhaps artificial boost to confidence that being an oil producer has given. It had its own separate monarchs for 350 years longer than Wales and retained institutions dating back in time, such as its legal and educational systems. It has memories of its important role in the European Renaissance and of diplomatic relations with other states.

Wales was, by contrast, united with England by force, firstly by Edward I and then under the Acts of Union of the 1530s under Henry VIII. I think this has left Welsh people instinctively less confident and more embattled in their mentality. The country has wrestled for many years with adaptation away from basic industries, giving Welsh people much less confidence that they could afford to contemplate ending their financial link with the British purse without the comfort of oil revenues, and thus much less willing to contemplate political independence

Thus, in the first devolution in 1979 towards the end of the Callaghan Government, only 20 per cent of those who voted said yes to the limited devolution on offer, despite promising opinion polls for several years previously. In Scotland there was a majority but because it did not reach the 40 per cent of the electorate threshold set by the Bill, the devolution mechanism was not implemented.

The opposition in Wales in 1979 was led by Neil Kinnock and the backbench MP, Leo Abse, inheritors of the Labour Party’s tradition of internationalism, espoused earlier among others by Aneurin Bevan. This scorned support for national causes in Wales as parochial, insisting efforts to improve the lot of the working man and woman everywhere should have priority. The No campaign, which also enjoyed strong support from the south Wales press, raised fears that Wales could not afford devolution, that any settlement would profit Welsh-speakers at the expense of monoglots, and that Wales was divided anyway between north and south and that the latter would stand to gain most.

Yet, within a few years the devolution campaign was up and running again and enjoying much wider support. The galvanising factor was the assumption of office by Margaret Thatcher and the subsequent miners’ strike and pit closures Heavy rounds of steel redundancies also affected Wales in the 1980s. This led to a change of view on the part of many of the more influential members of the Labour Party who concluded Wales might just as well have more control over its own economic and social affairs, if the alternative was Conservative Government in Britain. (Labour has won 21 elections in a row in Wales!) A new solidarity across Wales also emerged from the strike, rendering arguments about a north-south divide less cogent. Changing attitudes were reflected in the media, too, with the national newspaper, the Western Mail, previously an opponent of devolution, changing sides and the television media becoming interested in Welsh identity issues and putting on programmes that reflected this.

Large parts of the perennially dominant Labour party were, however, still unenthusiastic and reluctant to the end to join with other groups to campaign for a Welsh Assembly, making it always likely the vote in Wales would be close. The Scots, by contrast, had been much more united in wanting greater powers. Following the failure of the 1979 referendum prominent individuals north of the border from across a wide spectrum resumed the campaign with the publication of a Claim of Right, a device from the 14th century Declaration of Arbroath, declaring that Scottish people had the right to choose their own form of government.

This evolved into the Scottish Constitutional Convention, which brought together Labour, Liberal Democrats, Greens, Communists, the Scottish Council for Development and Industry, the Small Business Federation, the Church of Scotland, the Roman Catholic Church, and, initially, the SNP, to draw up a blueprint that eventually became the basis for the eventual Scottish Parliament. (The SNP later withdrew when the Convention declined to feature full independence as one of the options.)

In Wales there was no similar organisation working well ahead and bringing all parties together, and Labour largely left it to Plaid Cymru and the Lib Dems to get the vote out on referendum day in 1997. Significantly, the prospect of a referendum had not been welcomed by the pro-camp in Wales, knowing how easily the public could be influenced by scare stories. The initial intention merely to legislate without a public vote being was dropped because the Prime Minister, Tony Blair, was fearful that the proposal to give Scotland tax-raising powers would affect the UK’s budgetary balances. He insisted that a vote on tax raising powers be included on the referendum paper in Scotland alongside the basic devolutionary proposal. So, by default, if Scotland had a referendum, Wales would have to have one, too. These factors combined to result in a decision by the narrowest of margins in favour of devolution. In 1999 the Queen opened the new Assembly.

So, what did Wales inherit? The Government’s nervousness about granting devolution in any form in Wales – and there were still strong opponents in Labour, particularly among MPs who feared they would be marginalised by any new institution and that their numbers would be reduced – led the Labour government of the day to give Wales a decidedly inferior new constitutional arrangement, and this explains many of the subsequent problems. The model in Scotland was reserved powers – everything devolved except those powers retained in Westminster. Wales only received devolved powers, with all other powers retained at Westminster. So, in the one case, everything devolved except what is retained, in the other everything retained except what is devolved.

Secondly, the Assembly was set up as a corporate body without separation between the executive and members, a largely unworkable arrangement designed to prevent a body that might call itself the Government of Wales from emerging. Instead of a Cabinet Government drawing up policies, these were expected to emerge organically from groups within the chamber. (Needless to say the Assembly soon converted itself into a de facto Parliamentary structure with a Cabinet and an Opposition.)

Thirdly, devolution in Wales has been crippled by having a chamber of only 60 members, one of the smallest democratic chambers anywhere in the world, and a real constraint on proper scrutiny, given that a large proportion of the members will be ministers or their shadows.

Perhaps most importantly, under the original Act the Assembly could not make law and to all intents and purposes existed primarily to decide on how monies voted by Westminster as part of the Welsh block grant should be spent, with discretion to switch spending between priorities and to differ from England. As hitherto, new Welsh law could only be created at Westminster at the instigation of the UK Government in accordance with its own priorities or in response to lobbying by the Assembly or other outside interests.

These deficiencies in the architecture of the new structure have resulted in much of the past 16 years being taken up in discussions on process rather than policy, and the impact the Assembly might make has as a result been hindered. So, within three years of its establishment the Assembly had asked Labour grandee, Lord (Ivor) Richard, to examine the powers and electoral arrangements of the National Assembly and the way Wales was to be governed. His commission reported two years later in 2004 called for an 80 member Assembly and law-making powers but stopped short of suggesting tax-raising powers, as some had requested.

Even Richard’s widely accepted recommendations were to prove too much, however, for Westminster. Instead, Peter Hain, the then Welsh Secretary – and, incidentally, one of the heroes of devolution – brought in a new Government of Wales Act in 2006 which was intended to offer a half-way house towards legislative powers. Under Section 3 of this Act the Assembly could pass “measures” on specific “matters” within 20 designated “fields” where it had been given competence.  Additional legislative powers could be obtained through legislative competence requests, but these were subject to the veto of the Secretary of State for Wales, the House of Commons or House of Lords. To pass into law measures requested by the Assembly had to be tacked on to another Bill on a related issue passing through Parliament, or Westminster could itself hand over new powers by making it a clause within a new Bill.

Because of its cumbersome nature and the difficulties of securing time within the congested Parliamentary timetable, this arrangement predictably failed to work well but there was another provision in the Government of Wales Act 2006 – Section 4 – which allowed the Assembly to acquire full law-making powers if endorsed in – yes – another referendum.

The response was another Commission, this time led by the former diplomat, Sir Emyr Jones-Parry, set up by the Labour-Plaid Cymru coalition elected in 2007. This was tasked with reviewing Wales’s constitutional arrangements and spearheading the campaign to increase the powers of the Assembly to a full legislative Parliament similar to that in Scotland.   A key part of its remit was to gauge the Welsh public’s enthusiasm for such a move, and in doing so another lobbying body Cymru Yfory – Wales Tomorrow, this time led by the Archbishop of Wales, Dr Barry Morgan, strove to keep the Jones-Parry commission’s feet to the fire.

This referendum held in 2011 did indeed endorse law-making powers and by the biggest pro-devolution majority yet in Wales – 64 per cent to 36 per cent, with all authority areas voting Yes with the exception of Monmouthshire, where there was a virtual dead heat. The Assembly can now legislate without having to consult the UK Parliament or the Secretary of State for Wales in the 20 areas that are devolved. A remarkable result given what some might consider the mental cruelty imposed on the Welsh people with all these Commissions of inquiry and referenda. Yet another commission, headed by economist, Gerald Holtham, looked into the financial aspects of devolution, reporting in 2010.

Issues between Wales and Westminster were still hardly settled. The UK Government referred the first Welsh Act under the new arrangements to the Supreme Court, claiming the Cardiff Assembly had acted ultra vires – and lost. Two other Acts were also nearly referred but the Westminster Government backed down.

You can, therefore, probably guess what happened next – another commission this time under Paul Silk, a former House of Commons clerk, charged with reviewing the case for the devolution of fiscal powers and the means for improving the financial accountability of the Assembly. Reporting in 2013 and 2014, it recommended powers to raise around 25 per cent of the Welsh budget, and the devolution of responsibility for a number of powers including water, broadcasting, transport regulation, criminal justice, policing, youth justice, and medium scale energy projects. It also recommended a reserved powers model and an increase to at least 80 members.

In its response the Government promised in this year’s Queen’s Speech a Bill offering Wales the following powers.

  • Decisions over energy projects generating up to 350 megawatts of power on or offshore larger projects to remain the responsibility of the UK government
  • Transport – responsibility for ports, taxi regulation, registration of bus services and speed limits
  • Fracking – licensing for all onshore oil and gas exploration in Wales, including shale oil and gas
  • Elections – whether 16 and 17-year-olds should vote in assembly and local council elections
  • Assembly affairs – control over its name, size and the system used to elect its members
  • Permanence of the assembly and the Welsh government to be enshrined in law
  • Reserved powers model outlining the list of policies that remain under UK government control, with all other matters considered devolved.

Most of these provisions have now been included in a draft Wales Bill published on October 20th 2015, which is now out for consultation until the final Bill is brought forward in February 2016

So, the direction of travel within Wales has clearly been in favour of devolution and of increased powers, despite the obstacles. Polling suggests no more than 20 per cent now say they would abolish the Assembly, (the exact opposite of the 1979 referendum vote when an 80 per cent No vote was recorded,) 10 per cent wanting independence and the remaining 70 per cent generally in favour of the status quo or wanting a law-making Parliament like that in Scotland.

What has been ushered in during the sixteen years has been a second great phase of institution-building, a kind of Welsh Renaissance. The Wales Millennium Centre has given Wales a performance space that is a source of pride to all Wales as is one of its main tenants, Welsh National Opera; the National Museum has been transformed to give it a much bigger role as a centre for great art and host to a major international art event, Artes Mundi; and across the public and voluntary sector, and to a lesser extent the commercial sector, too, organisations have reshaped their Welsh activities to relate to the new political and administrative structures. In many cases, these had previously simply added areas of Wales to their nearest operations to the east in England. A notable example of the change has been the creation for the first time of an all-Wales rail franchise which has made it possible to develop a wider range of services connecting different parts of Wales. Previously, Welsh operations had been run out of Stoke-on-Trent with a different and less sympathetic set of priorities.

These developments have received little coverage in the British media, however, and there is little, too, on the new powers Scotland will be given in its new devolution legislation. In Wales a debate has been taking place over the future of the Union but that, too, has not been replicated elsewhere. In responding to Scotland’s Joan of Arc, Nicola Sturgeon, we have a bidding war taking place with offers being tossed out, rejected, improved and offered again without any attempt at a wider consideration of what might be in the best interests of Britain as a whole – the prerequisite I would have though for maintaining the Union, if that is what the people of England, Wales, Scotland and Northern Ireland want.

We already have what might be described as asymmetrical devolution in Britain – different systems in Wales, Northern Ireland, Scotland and England – to which we are now adding health service and other expenditure devolution to Manchester, special funding to other big cities, including even to Cardiff and Glasgow in the devolved territories, all on top of a local government structure which varies from place to place, single tier here and two tier there. Following the Parliamentary vote this month on the Government’s proposal to introduce a separate committee stage for English Bills we now have the prospect, too, of a divided House of Commons where only English MPs will vote on certain matters.

Should we perhaps at long last be moving to a federal constitution such as serves Germany, Canada, Australia and other countries well – a proposal that has been around since the debates on Irish Home Rule starting in the 19th century? This is the suggestion made by David Melding, the deputy counsel-general of the Welsh Assembly in an important book, The Reformed Union: Britain as a Federation.

 At the very least it needs a debate not driven by considerations of party political advantage in which all the peoples of the United Kingdom join in. Otherwise we risk drifting into another set of ad hoc solutions to the national aspirations of Wales, Scotland, Northern Ireland, and, indeed, England, that will prove no longer-lasting than the settlements of 1999 and their subsequent revisions.

These observations were delivered at a Centre for Social Policy seminar at Somerset House, London, October 20th 2015.

 

 

The seminar text can be seen at www.clippings.me/rhysdavid

Other talks given lately have been to Cardiff Castle Probus on the 53rd (Welsh) Division’s campaigns in the Near East (Gallipoli, Egypt, Sinai and Palestine) in World War One. Based on my book Tell Mum Not to Worry (ISBN: 978-0-9930982-0-8) this will also be the theme of future talks to a U3A group (November 18th) and the London Welsh Family History Society (November 21st), and the South Wales branch of the Western Front Association (February 5th, 2016).

rhys.david@btinternet.com

My reflections on the difficulties of getting food to soldiers in the Near East in World War One have just been published in Oxford Today Online and can also be seen on the above website, or alternatively at http://www.oxfordtoday.ox.ac.uk/features/cigarettes-bully-beef-and-camel-meat-how-first-world-war-soldiers-survived-near-east