Europe, Collaborate or Collapse

It is not just Brexit – Europe faces even more serious problems, or so Dr Ian Kearns, author of Collapse: Europe after The European Union believes.  Kearns, a former specialist adviser to the Joint House of Commons/House of Lords Committee on National Security Strategy delivered his chilling assessment in a recent talk to the RSA in London on the theme Can the EU Survive in the Age of Trump?

https://soundcloud.com/the_rsa/can-the-eu-survive-in-the-age-of-trump

Kearns thesis is that because of recent geopolitical trends there is a realistic prospect the EU could collapse and that it is possible to identify certain trigger scenarios. Such a collapse would be a disaster, leading to economic chaos, nationalist scapegoating, protectionism, and the destruction of Nato. This would lead to a major increase in the influence of Russia and China, and a big advance in the politics of reactionism and authoritarianism.

The threats to the European Union come first from the East, from a resurgent Russia, which only this week has been branded a rogue state by senior politicians following its reckless use of deadly chemicals to attack its enemies and its criminal cyber warfare activities in Britain, the Netherlands and elsewhere. Added to this there is the potent threat from the South to European unity, from the mass migration of individuals from poverty-stricken countries in Africa and the war-torn Middle East. This has put a strain on the politics of countries across Europe struggling to cope with the influx, leading to the rise of anti-immigrant right-wing groups almost everywhere.

Just as importantly, Kearns outlines, in the podcast above, threats from the West, in the form of Trumpism. Under the 45th president the US commitment to Nato and its allies has come under its most severe questioning since the end of World War Two. Trump, Kearns notes, is openly hostile to the EU, regarding it is a vehicle for German interests that compete with those of the US. The possibility that the US could pull back from the defence of Europe is, therefore, now a real one.

Just as damagingly, his foreign policy has been incoherent, with a failure to plan adequately to deal with the turmoil in the Middle East, leaving a vacuum into which Russia and other regional players, such as Turkey and Iran, have stepped.   Trump has also shown himself hostile to a range of international institutions, such as the World Trade Organisation, preferring to fall back on a protectionist agenda. His hostility to the WTO, creating the real risk it could be side-lined poses a special threat to the UK, Kearns argues, as Britain hopes to rely much more heavily in its post-Brexit future on WTO rules.

The EU has hobbled itself, according to this view, by adopting Eurozone straitjacket rules and regulations that have forced austerity on weaker members. As a result, the centre ground in European politics has been hollowed out, with populists on the right and left saying the same – that they alone are offering a solution that is different and will work.

In this perilous situation the EU has balked at introducing the reforms needed to ensure it can take more effective action economically and politically, and in defence. It has not been able to achieve internal agreement on, for example, sanctions against Russia, or on how to deal with migration crisis. On defence it brings together nations which do meet their spending commitment to Nato, such as Britain and Greece, with others, such as Germany, that do not, and includes some nations – Ireland and Finland, for example – that, while relying on the Nato umbrella for their ultimate defence, have opted for neutrality.

The triggers for the possible collapse Kearns fears are worryingly many. Turkey is currently being paid to stop the flow of migrants into Europe but its authoritarian President Erdogan could re-open the taps if the EU displeases him. This could lead to more barriers being thrown up at the borders in the affected countries on the route into the prosperous northern EU members and to a resurge in populism across the Continent.

There could also be further advances for Euroscepticism in core EU countries, as in Italy where the new governing parties are decidedly less enthusiastic about the European project than their predecessors. The Italian Government is being put under extreme pressure by the European Central Bank to keep its budget within Eurozone borrowing rules but may decide not to. If it fails to do so, Italy may find itself unable to borrow in the markets and might be forced out of the Eurozone, triggering a collapse of its highly vulnerable banks with consequences for the banking system in other countries as well.

The Catalan crisis, too, remains to be resolved and if secession again becomes a possibility this could have a very serious impact on the Spanish economy, which relies heavily on Catalonia, the wealthiest part of Spain. The Madrid government could then find it, too, would be shunned by the markets and unable to borrow at reasonable rates.

The Domesday scenario is an unmanageable rout spreading through Europe and in its wake the serious undermining of liberal values and democracy as populists begin to argue that it is pluralist institutions that have led to the crisis, and that stronger more authoritarian rule is required (as in countries that have concentrated power in dominant leaders such as China, Russia and Turkey).

If all this happens, the Nato community might not be able to respond to threats to the territorial integrity of the block. Countries might not be willing to go to each other’s aid in cases where they have already accepted significant financial or other support from Russia or China. Greece, for example has become heavily dependent on China for the rebuilding of its infrastructure and there is sympathy with Russia within Italy’s ruling parties. Even Germany might find itself compromised because of the heavy dependence it is developing on Russia to meet its energy needs.

These pressures, coupled with the assaults being made on international organisations such as WTO, could take the world back to the power-based politics setting one nation against another which caused so much trouble in the 20th century.

We may, of course, muddle through as so many times in the past. Nevertheless, whatever view is taken on Brexit and its part in Europe’s current woes, Kearns’ warnings should be heeded by policymakers before it is too late.

 

Rhys David, October 5th 2018

 

 

 

 

 

Smoking in Adolescents, then and now

The forbidden fruit of the 1960s schoolboy was smoking, a school magazine of the era reveals. Rhys David reports

Fewer than one in five men and women smoke in Britain and the numbers have been declining year by year. Nor are they smoking as many cigarettes. Only fifty years or so ago, however, a surprising number even of pre-teens from largely middle-class homes had taken up the habit, as a survey in an issue of a school magazine from 1967 illustrates.

Tua’r Goleuni (Towards the Light), the magazine (and the motto) of Cardiff High School for Boys was a conventional magazine of its type, edited by pupils under the guidance of a teacher, full of sports, after-school club and house activities for the preceding year, and enlivened by schoolboy prose and poetry, and quizzes. In 1963 the boys of the upper sixth form had the idea of surveying their younger confreres in the first three forms on their smoking habits and their findings offer an interesting commentary on how times and attitudes have changed.

 

Year 1967 Smokers Occasional Smokers Never Smoked
1a 2 8 15
1b 6 10 11
1c 2 8 15
2a 5 15 7
2b 7 20 8
2c 5 16 7
3a 4 20 8
3b 9 20 7
3c 8 14 9

 

In this typical big city grammar school of its time, a total of 171 boys were questioned, sixty per cent of the total across the three year-groups (averaging 30 pupils per class). Their answers tell us much about attitudes across the group, though the veracity of the replies clearly cannot be vouched for. Some allowance needs perhaps to be made for schoolboy braggadocio.

Remarkably, however, 26 eleven-year olds (in the first-year forms) claimed to be regular or occasional smokers, compared with 41 who had not done so. Some will therefore have started even before they left primary school, perhaps, it is suggested in a few cases, as early as age six or seven. Two years later 75 third year boys were smokers (including occasionally) and only 24 had never been tempted.

The differences between the A stream (the more academic pupils) and their peers is not great, it is observed, though for some reason, which perhaps only child psychologists could have answered, the incidence in the B form is highest. The stress of being in the middle, and of falling between the two extremes of A and C perhaps, and of not knowing which would be the direction of travel? Boys in the C form were the more inveterate smokers, however, we are told, averaging four or five cigarettes a week compared with 1 or 2 among the more sensible A streamers.

Non-smokers generally thought smoking bad but mainly because it was a waste of money. About a quarter of this group expected to smoke when older, though one half were sure they would not. Others expressed a preference for a pipe, on the (erroneous) grounds it was healthier. Smokers recognised it was habit-forming, (though not in their case, of course) but several admitted concern at representations of habitual smokers racked with illness, with hardened arteries and stunted growth. The ill health threat could be countered by dropping the practice, many felt, and although the link between excessive smoking and cancer was recognised by many, the habit was conceived as a way to settle nerves or help relaxation, the influence perhaps of contemporary advertising.  So perhaps teenage stress at school is not such a new phenomenon after all.

Most significantly, however, in the 1960s having a whiff was seen by most of those who participated in the practice as a way of rebelling. They enjoyed dodging authority by doing something they were not allowed to do, some even saying they would not smoke at all if there were no restrictions. Showing-off was admitted to be another strong motivator, with few claiming to enjoy the activity. Most smoking took place in bedrooms, back streets, parks, football matches and cinemas, often only at weekends or at parties, with only a few saying they were prepared to smoke in streets where they might be recognised.

The thrill of buying cigarettes over the counter meant boys preferred this to using slot machines, though in general they would not buy matches at the same time (presumably as this would suggest they were for personal consumption rather than for an adult who had sent them on an errand). Many only smoked cigarettes offered to them.

Two out of three boys said their parents had spoken about smoking usually to warn against taking up the habit and most thought their parents were ignorant of their sons’ actions. Most boys were not critical of their parents for smoking but thought teachers should not do so in front of junior boys and should smoke only in their common room.

In conclusion the authors offer a sanguine judgment, suggesting the warnings by the eminent physician, Sir Richard Doll, who first showed the link between smoking and cancer, had yet to take effect. “It would appear that very little immediate harm can come to schoolboys from the small amount that they smoke. Many of the boys who smoked are members of the rugby and cross-country teams and so far, they have suffered no noticeable effects,” they concluded.

Tua’r Goleuni, the Cardiff High School Magazine, June 1963. No. 19. Pps 10-11

Rhys David is an author and economic commentator

rhys.david@btinternet.com 

www.clippings.me/rhysdavid

www.rhysdavidblog.wordpress.com

September 2018

 

 

 

 

A New Way to get money to Small Business Wales

The Development Bank of Wales has been up and running since the middle of last month, blessed with £440m to invest and a further £100m of borrowing available to it. A welcome development which will carry high hopes that as the successor to the largely unloved Finance Wales it can really make a difference in all those areas identified for action by the nine different named Funds it manages.
All the deficiencies that are considered to have held back Welsh entrepreneurial initiative over decades are assumed to have been covered. Lack of capital at initial concept stage? There’s the £7.5m Wales Technology Seed Fund. No-one for the retiring owner to hand the business on to except perhaps the management? How about the £25m Wales Management Succession Fund. Sole trader seeking to expand? Try the £18m Wales Micro-Business Loan Fund. And so on.
It appears comprehensive: it’s well funded; it has private sector partners; there will be 54 people in the offices where the various assistance packages will be decided; and the railway lines between Cardiff and Wrexham, where it will be headquartered in a nod to intra-Wales devolution, will be gaining a lot of new passengers. But necessity being the mother of invention it is very much a public-sector body dependent on Welsh Government finance, even if the partners range from Santander and Barclays to Oxford Capital, venture capitalists Venrex, and the British Growth Fund.
So far, so good but It would be even better, if, as both a competitor and a bureaucracy benchmark, the private sector venture capital industry could be persuaded to become more involved independently in financing Welsh growth businesses. This does not, however, mean the big US and UK venture capital houses buying up and trading Welsh businesses with no discernible long-term benefits to the Welsh economy. There is a different vehicle, the Venture Capital Trust (VCT), that does offer an alternative approach, providing benefits to both investors and investees, but conspicuous by its absence in Wales.
VCTs have over the best part of 20 years built up a powerful record of supporting some of Britain’s brightest new start-ups in Aim- and non-Aim-listed companies across a range of businesses from retailing and restaurant chains to high tech, from recruitment to the oil service industry. They are run by professional managers who are paid to get it right, picking companies that are going to be successful, from which they can at some point make a successful and profitable exit. They ensure this by good judgment and close supervision of the investee companies, offering them non-executive directors, where appropriate, and advice and consultancy.
Hundreds of millions of pounds are raised annually by these trusts – names such as Baronsmead, Amati, Mobeus, and Foresight – from private individuals keen to take advantage of the tax breaks offered in return for accepting a higher risk than is carried by money in savings accounts or shares. The breaks have indeed been very good – tax-free dividends, and tax relief on the initial investment of 30 per cent (reduced only in the past few years from an original 40 per cent. This means that an initial investment of say £10,000 will have an effective cost of £7,000 so that if a dividend of 5p is paid the yield will be 500/7000ths or 7.14 per cent, not the taxable 500/10000ths or 5 per cent that would be gained on such a sum in a savings account which would then itself be subject to tax.
The disadvantages are the risks run when investing in small companies and start-ups, and the lack of liquidity – VCT shares can generally only be sold at a discount and must be held for a minimum of five years by law to preserve the tax advantages. Nevertheless, the gains investors have been able to make usually result in new offers being quickly taken up and oversubscribed. Moreover, the managers of these funds have over the years honed their skills in selecting companies and have kept their failure rate within bounds.
Yet, while the sector now occupies a sizeable niche as a provider of “patient capital” to unquoted and Aim-listed companies, they have done nothing to narrow the North-South divide. Indeed, in some ways they are simply perpetuating it by helping modern, often higher technology, high productivity businesses in relatively limited areas of the country to prosper. |
A quick analysis of the portfolios of some of these VCT providers shows a heavy concentration on the south east of England and a total absence of Wales as a location for investments. Of the 70 investee companies held by Baronsmead, 28 were in London, a further 11 in the rest of the South-East, and 31 in the rest of the country, mainly the Midlands and South. In Foresight’s case 60 per cent were in London and the rest of the south east. Mobeus has a more promising 60 per cent away from the capital and its surrounds but in none of these examples is there evidence of support for companies from Wales. With some variations this pattern is reflected in the investment preferences of other leading VCTs.
Now there could be an element of chicken and egg here. Is the absence of Welsh investee companies due to a lack of start-ups and growing companies worth investing in (a possibility that should not be discounted instantly as outrageous) or is the relative dearth in Wales of highly successful quality start-ups itself the result of the lack of private sector backing and in consequence a much greater dependence on the public sector?
It is a difficult question to answer without detailed research but let’s think positively. How can we persuade VCTs to examine more Welsh businesses with a view to increasing their representation in portfolios? Perhaps this is too tough an ask. If they can find enough opportunities closer to London, why devote time and energy to Wales? If there are prejudices against Welsh businesses as investment opportunities, they are not going to be easily overcome.
So why not a Welsh VCT, raising funds in Wales or more widely, with an objective of investing say perhaps 75 per cent of funds in Wales with the rest going to promising businesses elsewhere. Again, it may be argued that the expertise does not exist in Wales for such an exercise or if it does it is already housed in the new Development Bank of Wales.
There is one option, however, that might be best of all. Why not a Welsh VCT run out of an existing VCT house by one of their investment teams. In this way it could draw on experienced VCT professionals in London (and Edinburgh) who had been invited to pitch to run a Welsh VCT. Its own success parameters could be set for such a VCT (recognising the likely higher risk), which the appointed managers could help to set and have as their target.
We rely too much on the public sector to lead in Wales. Here is an opportunity to start something outside its hegemony. Any takers?
Rhys David
rhys.david@btinternet.com
http://www.clippings.me/rhysdavid

May 2018

Whatever happened to planning?

The vision that led to the creation of Cardiff’s outstanding city centre more than 100 years ago has sadly gone missing in recent decades and an incoherent jumble has been created, Rhys David argues.

One of the joys of watching Michael Portillo’s Great Railway Journeys series on television – especially those focusing on the Continent and the US – is the sight of the magnificent railway stations he visits. National or provincial capital, big town or small, the arrival of the railway has usually been celebrated with an impressive building that could make a statement about the destination the visitor had arrived at.

In most cases the station main entrance leads out into a central square where civic pride could be further demonstrated with an open public space or small park, perhaps surrounded by dignified municipal or commercial properties. In Cardiff, too, the station was built to project pride in the growth of the new coal metropolis. Isambard Brunel even went to the trouble of moving the River Taff to get the right alignment for his railway through south Wales. The Great Western Railway put up a building in 1934 which has received perhaps the ultimate accolade – inclusion and three-star status in Simon Jenkins’ most recent buildings blockbuster, Britain’s One Hundred Best Railway Stations.

The work by architect Percy Culverhouse is described by Jenkins as clean and confident, and a rare example of proto-art deco. It captures, he claims, the moment when neo-Georgian was flirting with new decorative forms, its finest feature being the main concourse’s superb display of modulated art deco, its space lit by a superb sequence of hanging lights.

It dominated its location when constructed, the only other tall buildings in sight being Charles Bernard’s 1868 Royal Hotel in St. Mary Street and Henry Tanner’s General Post Office in Westgate Street. The new Cardiff General (now Cardiff Central) faced on to a square, originally the grid pattern working class streets of Temperance Town. This was bounded by Wood Street, the river and the rear of lower St. Mary Street. Following demolition of the properties, it was first an open space, and then the city’s bus station.

No longer. The area is named Central Square, but the description does not hold.  Into it have been crammed a series of concrete and glass monoliths that completely bully the station and fail to make the slightest nod to the history of the area and its original form. Government and commercial offices, lawyers, university departments, as well as the BBC’s Wales headquarters are being crammed into this area together with a token bus station for long-distance coaches.

Further development is planned on the other side of the station on the extensive Brains brewery and adjoining sites. The result: thousands of people, many of whom will want to be mobile during the day will arrive by car every weekday into an already heavily congested area, effectively accessible only along the bus-clogged Westgate Street and the Wood Street bridge over the Taff. It is little wonder the Royal Hotel has protested that existing high levels of atmospheric pollution can only increase.

The massing of the BBC building along Wood Street, whatever its modish green credentials, overwhelms its surroundings and joins several other uninspiring blocks completed or due for construction that look like they have been dropped in randomly from above. A corridor running through to the Principality Stadium tells you where priorities for the redevelopment lie – ensuring rapid access and egress to the stadium on rugby and pop concert days. Don’t be surprised if this processional way – and much of the rest of the Central Square environment becomes an unpleasant wind tunnel on winter days. The station frontage, too, is set to lose its clean, unobscured lines, buried under a steel and glass canopy for new retail – the obsession of Britain’s station owners. If money is to be spent on the station, how much more sensible and convenient it would be for passengers just to cover the exposed, elevated platforms against wind, rain and seagulls!

Cardiff’s planners have fallen in love with the idea that a landscape dotted with mini-skyscrapers equals prosperity so that it would seem anyone with a plan for a multi-storey building is shown the red carpet.  A towering stump has now emerged to overpower the former Pembroke Terrace Presbyterian Church of Wales in Churchill Way, catering for the latest developers’ fad – student accommodation. Another student block developer was sufficiently emboldened to put forward plans for a corner of Park Place previously occupied by solicitors, Blake Morgan, which would ruin the setting in which Cardiff’s most important ensemble of buildings – the City Hall, Museum, and Law Courts sits.

As marketing expert Roger Pride has recently pointed out, by contrast the few fine old buildings Cardiff possesses lie neglected and he rightly calls for more imaginative uses for architectural gems, particularly around St. Mary Street and not yet more bars and restaurants. He lamented the loss of Cory Hall opposite Queen Street Station and the neo-classical fire station in Westgate Street (now the site of a hideous car park). He could have mentioned others that have gone, including the old Taff Vale Railway’s Queen Street Station itself, Ebenezer Welsh Congregational chapel, (swallowed by Marks & Spencer) and the vast Wood Street Congregational Church (where Southgate House stands).

Other historic buildings have languished for decades in a state of decrepitude, bridesmaids at the redevelopment wedding but never the bride: the GPO building in James Street and the adjoining Cory’s Building, or the buddleia-bestrewn Bute Street (Cardiff Bay) Station, believed to have been the work of Brunel. The GPO in Westgate Street, too, lies empty, and House of Fraser’s James Howell store awaits an uncertain fate. In case it does not continue in something like its present use, have the city’s planners even thought about an action plan to try to find an appropriate use for this iconic building or will developers determine what happens to it?

The student block bubble could, too, be about to burst, as declining student numbers suggest. Some developers have been trying to escape the conditions under which planning permission was granted, seeking temporary dispensations to let the apartments to non-students until demand catches up. This brings with it the danger that Cardiff – and many other university cities – will be left with unsuitable buildings that because they were meant for students have been built to much lower standards than is required for normal domestic occupation. If too many are built, or student numbers fall, they will need to be adapted for other uses or will remain empty.

It must be said, of course, that Cardiff is a succes d’estime.  The chefs Sarit Packer and Itamar Srulovich, writing in the Financial Times this summer, seem to have been blown away by their first visit, loving the Castle Arcade, the animal wall at Cardiff Castle, and the buzzing atmosphere. Indeed, Cardiff has established itself as a visitor destination, able, like historic Bath, Bruges and Bologna to support Hop-On Hop-Off buses around its attractions. Visitors, drawn to a weekend break or to attend a sports fixture, opera or a pop concert, seem impressed. As a city it punches above its weight.

One cannot help thinking, however, that not a huge amount of thought has gone into how the city’s constituent parts should be organised, what concentrations of activity should be allowed where, and what is appropriate in which place, leaving it with what the visitor stepping out of that art deco concourse at Cardiff Central might now regard as a bit of a (congested) mess. Nearly 20 years ago the distinguished architectural critic, Deyan Sudjic described the Cardiff Bay redevelopment as a sad example of a city that, given a choice between the second rate and the excellent, had no hesitation in grabbing the former with both hands. Plus ça change.

 

Rhys David is an author and economic commentator. This article also appeared on the website http://www.WalesBusiness.org

August 22nd, 2018

 

Chronic yes, but hopefully not incurable

 

Can Prime Minister Teresa May’s new industrial strategy break Britain’s cycle of low productivity and acute balance of payments deficits? Rhys David looks at the issues.

 At first sight it all seems rather paradoxical.  Britain, in many ways, seems a much more efficient country than our Continental neighbours and, on occasions the US. We have led the way in many modern banking developments, including credit and debit card usage, and more recently in contactless payment – to the extent that some banks have now decided to print bank statements on both sides of the paper for the declining number of individuals requiring hard copies, such are the number of non-cash transactions these days. They are also threatening to cut the number of cash point machines, so many people are buying even a cup of coffee with a card and need less change.

 

Our transport ticketing systems, too, are often surprisingly far ahead of those in many other countries. Home ordering (and printing in some cases) of tickets is now routine for bus, rail and air journeys. Even suburban rural stations with relatively small numbers of passengers boast machines that will enable you to buy a ticket for distant destinations, and across London the queues at underground stations are now for the ticket machines not the clerks’ windows. These changes, it can be argued, are merely transferring the cost of purchasing services from the operator, through reduced labour costs, to the user purchasing a service at home. They are still improvements to the efficiency of the enterprise’s operations and hence productivity.

 

There are other examples. We were able to go into Prêt à Manger or one of its competitors and buy packaged sandwiches, paninis, wraps and salads in multiple varieties when in New York the consumer still had to wait while the fillings were added. And who after coming from seven-day, sometimes 24-hour, shopping in Britain has not been frustrated to find that on certain days and times on the Continent retail has shut up shop? Why has the same apparent efficiency not happened as widely as we might hope, including where it perhaps matters most – in the things we make?

 

Many of the developments described above merely reflect that Britain is a very tech-savvy place, as the transformed area around Old Street in London demonstrates. Once among the grimmest of London’s thoroughfares, its crossroads with Moorgate is towered over these days with crazily-shaped and coloured blocks housing the world’s internet giants. Amazon, Intel, Google and Cisco are among those that have flocked to Silicon Roundabout and surrounding East London to be part of a community of more than 50,000 people in 3,000 companies. They have been drawn from countries across the world by the opportunity to work in this creative environment. Indeed, the proportion of the UK economy now accounted for by technology – 12.6 per cent – is more than twice that of the rest of the G7.

 

So, to return to the question. Why do we languish sixth out of seven among the G7 world’s richest countries in growing our output per person?  And, it might be asked, if Britain is growing faster than most of its neighbours (though not the US) does it matter?  The answer to the second point is key.  Britain’s growth is heavily dependent on consumer demand fuelled by debt, leading to a serious balance of payments deficit which perhaps vainly it is hoped the recent devaluation of sterling will help to rectify as our exports become less expensive to overseas buyers and imports are deterred by price. Our deficit itself has to be financed by overseas borrowings which can be secured at reasonable rates of interest only as long as lenders continue to have confidence in our ultimate ability to repay. Britain’s economy needs to shift from this paradigm sooner rather than later and this can only be achieved if the economy becomes more genuinely productive. More productive companies with faster-growing output can afford to pay higher wages, which in turn means higher tax revenues for Government and an improved capacity to pay for the social and other services now demanded.

 

So, what has been tried? Post-war efforts to raise UK productivity began seriously with Harold Wilson’s creation of industrial champions in electrical equipment (merger of English Electric/AEI/GEC), in motors (the 1968 BMC/Leyland merger), steel (the creation of the nationalised British Steel Corporation   in 1967 with plans to expand production to 35m tonnes a year), and in aluminium (new smelters for RTZ/BICC/Kaiser, British Aluminium and Alcan).

 

Joining the European Community in 1974 was part of this same process but Britain, as a whole, continue to lag behind continental rivals in overall productivity even as the City of London has roared ahead as Europe’s financial capital.  Even on the way out of the financial crash of 2008 the economy’s recovery has been sluggish to the extent that it has only recently grown past the point it had reached eight years earlier. Leaving the EU and concentrating on global markets is seen as another magic bullet but is it any more likely to  hit its  target than previous policy projectiles?

 

Productivity is to a greater or lesser extent a problem across most Western economies and, according to some economists, reflects a slowing pace of change over recent decade, in spite of all the apparent advances we see around us. On this analysis, the western world went through a prolonged period of fast productivity growth from 1870-1970 brought about by changes from the late Victorian period which were much more fundamental than the IT revolution of the past 30 years. This was the period when the rail network was laid down, when plumbing and piped water reached homes, shops and factories, when electricity took over from less efficient means of power generation, when towns and cities brought industry and people together often to specialise in a particular form of commerce, the telephone replaced the telegraph, and disease control reduced mortality. It was also the period when agriculture’s dominance of the economy – from 70 per cent in Victorian times to a figure of only around 1 per cent in Britain today occurred, releasing large quantities of labour to fill burgeoning factories. If this is so it explains the Solow computer paradox, the remark by economist Robert Solow   in 1987 that: “You can see the computer age everywhere but in the productivity statistics”.

 

There are, of course, other explanation . Economists may be mis-measuring productivity – we are doing much better in Britain than we think and are understating productivity growth. The problem appears to have persisted for so long, however, this seems unlikely. The post-crash policy of the Government could be perpetuating the problems.  As Vince Cable, the former Liberal Democrat business secretary in the 2010 coalition admits, Government priority in the aftermath of the 2008 crisis was to ensure unemployment did not surge. Countries that have enjoyed the highest productivity growth in subsequent years are those where the greatest number of workers lost their jobs and now have very high unemployment, often among the youngest. Policies that have encouraged companies to hold on to and recruit low-cost labour (in many cases from outside the UK) have inevitably delayed or made unnecessary the introduction of new labour-saving technologies in the UK.

 

By keeping interest rates at very low levels for the longest period in history the necessary elimination from the economy of “zombie” companies that would not otherwise survive, has also been thwarted. As a result, their more successful rivals have not been able to grow as they might and secure the productivity gains that come when weaker competitors are removed. Or it could be the finance system itself is not working as well as it should, particularly when it comes to channelling resources to small and medium-sized businesses. Hence, the measures the Government has set in train to create new challenger banks and new financial institutions.

 

It is hard not to believe, however, that important as some of these factors have been, something more deep-rooted in the way in which British business operates is at work. In the bigger companies, too much of the surplus generated from activities is going into dividends (and executive salaries, which have now reached vast multiples of average earnings within the same companies). Investment by manufacturing in new equipment and processes has long been neglected, leaving far too many people doing low productivity work where they need more equipment at their elbows if they are to compete with rivals in other countries.

 

One consequence has been to accelerate the decline in the share of manufacturing in total gross domestic product – now down to only about 10 per cent compared with a figure of 33 per cent in 1970. This has left an economy heavily skewed towards services where because of the nature of the work it can be very difficult to secure meaningful productivity gains. If a coffee chain reduces staff by 10 per cent it will save on its wage bill but it is unlikely to be able to find machines that will serve drinks and food as efficiently or clear tables, so customers will be lost. Nor can health care, personal care, education or tourism easily yield productivity gains and these are some of the staples in the British regions where productivity is the biggest problem.

 

The quality of management in much of business is not as good as in some of our competitor countries, a problem which the business education explosion that got under way in earnest in the 1970s has failed successfully to address.  Many of the institutions and courses that have been created since then dedicated to this purpose have now become dependent for survival on the provision of training for the future managers of our competitors in Asia and elsewhere.

 

The incentive schemes available within companies, particularly the largest, may also be perverse in rewarding those nearest the top rather than those more at a more mundane level on whom the implementation of changes in work practices will depend and who may think of useful innovations in the first place.  It may be, too, that the brightest and best-educated Britons are not finding their way into manufacturing or even some sections of the service economy. This may be the legacy of the long period of poor industrial relations that beset British manufacturing from the 1950s through to the 1980s. In this period, it was still common for Britain’s big companies to trawl universities for the best graduates but the brightest since then have often chosen to go instead into service professions such as law, accountancy and management consultancy where the work may be hard but the headaches of dealing with what had become perceived to be difficult unions and labour relations do not exist.

 

Like the previous efforts to raise productivity, Brexit will be seen as the latest opportunity to rebuild a new balance between the different parts of the economy and the different regions. It will not achieve this on its own, however.  And, neither will a greater emphasis on infrastructure, including the digital economy, though this will be important too. The gap between the tech-savvy in Britain and the rest will need to be closed so that more individuals who can operate effectively within the modern labour market can be come forward.  There will need to be investment, too, in improving the skills of managers so that they are better able to carry forward projects that will enable their companies to grow organically and through acquiring other businesses. Large chunks of British industry have already passed into the ownership of multinational corporations outside Britain by business boards with limited interest in any other priority (salary and bonuses apart) than maximising returns to shareholders. Incentives need to be put in place to ensure Britain secures representation in many of those sectors that advanced nations consider to be essential but which in Britain are now controlled from abroad.

 

It will not be easy. Britain will continue to need foreign direct investment even as it tries to rebuild some of its own domestically-owned manufacturing strength. Overseas companies bring with them new products, processes and ideas and play an important part in raising the standards of home-grown competitors, as Japanese, German, and US investors have done over the past 50 years. Nor will it happen quickly.   Unless plans of this sort are embarked upon we are likely to be looking again before long for yet another solution to our industrial balance, productivity and balance of payments – or, chasing   another hoped-for remedy. 

 

 

Rhys David is a writer and journalist  and an Honorary Fellow of the Institute of Welsh Affairs in Cardiff

 

January 20th 2017

 

 

 

 

A Walk on the Wild Side – in Wales

Glyndwr’s Way
Rhys David finds solitude and interesting signs of a new vitality on a trek through the middle of Wales
“Of all the beautiful sights in the world, I am not sure if there is anything more lovely than the Welsh hills. It is as if the character of the nation – its under-rated strength and vitality – is contained and channelled in those meadows and rolling slopes.” (The Times June 6th 2016). These comments by Matthew Syed, sports writer and diarist, earlier this month (June) had a particular resonance for those like myself walking those very hills when the article appeared in the best weather window in months.
There is something magical and even reassuring about being a short distance from a sizeable settlement, such as Shrewsbury and the neighbouring West Midlands, and yet in countryside so remote the number of people to be seen during the day can be counted in single figures, with possibly even fewer cars. Instead, one’s constant companions almost everywhere on the horizon and sometimes much closer in this part of the world are sheep in their thousands.
This is the evocatively-named Glyndwr’s Way, a 135-mile long wishbone shaped trail from Knighton to Machynlleth, with a return leg back to Welshpool, the 80 mile first section of which my party of two men and three women covered. Opened in 2000 Glyndwr’s Way purports to follow the route taken by the legendary Welsh hero Owain Glyndwr. Supported at one stage by French forces who marched to within eight miles of Worcester, Glyndwr inflicted several crushing defeats on his English opponents in the early 15th century – notably at the Battle of Pilleth near Knighton in 1402 – before mysteriously disappearing without trace in 1413 but not from Welsh people’s memory.
Today’s route is just a convenient fiction for although Wales’s Braveheart controlled the area for long periods there is more to connect him with the various towns – notably Machynlleth, which he made his capital and seat of his Parliament in 1404 – than with the trail that bears his name. The linking of various UK national trails to historical figures has been a shrewd marketing initiative, however, and one that can probably claim some credit for the growing popularity of long distance walks. Our group walked another such route – St. Cuthbert’s Way from Melrose in the Scottish Borders to Holy Island off Northumberland last year and there are plenty more to choose from, including Wales’s other eponymous trail, Offa’s Dyke. After all, who wants to walk just from A -B, struggling to follow footpaths through remote fields, even for one’s health’s sake, when you can retrace the (supposed) steps of a hero along a scrupulously waymarked route, pointing you in the right direction at every unclear fork or open vista.
But it is not just walkers who have cause to rejoice at the spread of new national trails. Walkers have brought trade and led to facilities being put in place along the routes in towns, villages and other smaller settlements where there was previously not a lot on offer to the outsider (or even the insiders sometimes). Abbey Cwm Hir, one of our stops, is about as remote as it gets yet now boasts a splendid B&B, and walkers are a new potential market for the owners of a quirky country house, Abbey Cwm Hir Hall, built for London lawyer, Thomas Wilson on the site of a Tudor house in in 1833 and purchased four years later by Francis Phillips, a Lancashire landowner and businessman.
Renowned as a roadbuilder (on which subject he published) Phillips is assured of a minor place in history for catching Spencer Percival, the only British Prime Minister ever to be assassinated, as he fell to his knees dying from shotgun wounds in the House of Commons in 1812. The hall’s latest owners have opened it to the public for viewing the series of quirkily eclectic collections they have put together. The nearby ruins of Wales’s biggest abbey, are getting more visitors, too, and educating new generations in Welsh history. Wales’s last native Prince, Llywelyn ap Gruffudd, is reputedly buried here – minus his head which stayed in London where it had been on grisly display following his defeat at Cilmeri in Breconshire in 1282. There are signs of new business in other points along the route. Restaurants have sprung up to serve a growing market in Knighton; a pub has re-opened in another tiny place, Llangunllo; the community shop and café at Llanbadarn Fynydd is getting a few more customers; and there is more business, too, for the teashops, restaurants and mini-markets in Llanidloes and Machynlleth.
Knighton, in particular – once one of the biggest sheep markets in Britain – has gained a new lease of life. It benefits from being not just the starting point for the Glyndwr Way, accessible from the Swansea or Shrewsbury directions on the very scenic Heart of Wales railway line, but from its position near the centre of the much older Offa’s Dyke path. It hosts the visitor centre for this trail. Traditionally very much a border town of divided loyalties, its main street now vies to be the most patriotic in Wales, bedecked with the flag of Glyndwr (four lions passant guardant, red and gold quartered and counter-changed). Having besieged the town’s castle in 1402 and then destroyed it and much of the town, Glyndwr would no doubt now have been giving a wry smile of satisfaction.
These and other developments form part of a more general welcoming feel throughout the area, or so it seemed from our admittedly brief observations. At Velindre, our first stop, the owner of the holiday accommodation we stayed in drove us several miles to the nearest pub serving food and picked us up later. Our host at the Lion Hotel in Llanbister, (who proudly claimed his family had farmed the area for 1,000 years and had the records to prove it!) picked us up from several miles away on the route at the end of one day and took us back the next morning. (His was the nearest accommodation.) At remote, remote Cwm Biga Farm, near the Clywedog reservoir and now self-catering accommodation, the owner had taken over an historic Welsh mixed farm, owned successively by the Welsh prince Gruffudd ap Gwenwynwyn, the monks of nearby Abbey Cwm Hir, and (after the dissolution) Robert Dudley, Earl of Leicester. Chancellor of Oxford University, he passed it on his death in 1588 to University College, which held it until 1920. After a short period in private ownership it was requisitioned by the Forestry Commission in 1939 on the outbreak of World War Two and its 1,300 acres largely planted with conifers. Having semi-retired the new owner like many in the area now has a portfolio career, providing financial, environmental and IT advice to local businesses and groups as well as cooking for guests if required
There are other signs of a new entrepreneurialism. Public road transport was never plentiful in this area and has now largely disappeared but a small network of taxi companies will ferry people about – and just as importantly take walkers’ luggage from one night’s stay to the next. This was a service we used. (We did meet more hardy walkers, such as Elvira, a Swiss living in the south east who was walking the full 135 miles stretch in nine days with what looked like a 30-40lbs backpack.) The same minibus taxis take children to school helping people to stay in the area, as does another relatively new service, the Post Office Travelling Shop. We came across the familiar red livery in Llangunllo, a van equipped inside to sell stationery, greetings cards and other similar items, as well as offering bank cash withdrawals and, of course, selling stamps and taking parcels. The van travels around to different small communities, parking for an hour or so in each on set days each week, providing services which in some cases, such as simple banking, will have never been seen in the village or settlement before.
Other services are not so available. Mobile phone coverage is patchy, though the extent differs from provider to provider, depending on the area. I did receive one call on the roof of Wales between Llanidloes and Machynlleth where there was not a settlement in sight. “Hi, I’m ‘Alex’”, an Indian voice announced, “and I’m calling you from Windows Technical Department about your computer”. The scammer, to paraphrase Stanley Baldwin’s famous comment in 1932 will always get through, I suppose.
It barely does justice to mid Wales to say the scenery is breath-taking and the weather on our walk was ideal – 20-25 degrees with a slight breeze. After you have ascended from the valley towns at the start of each day most of the walk is at between 1,000 – 1,500 feet over rich green hills just asking to be climbed over, or around at a lower contour level, if you are lucky. The odd farm or other building has to be passed through and there are short stretches of stone track or even road but overwhelmingly the terrain is grass or narrow trackway.
The sights, too, were magnificent and accompanied by a constant chorus of birds, with cuckoos particularly prominent throughout the area. Kites have, of course, remained native to this region even when they had been driven out elsewhere and are relatively common alongside buzzards, and plenty of other smaller birds – curlew, dipper, skylark, meadow pipit, wheatear and redstart to name a few.
There are occasional small rocky gashes in the hills where stone has been taken, probably to build the nearby farmhouse, but the main sign of former industrial activity is at the huge Clywedog dam, near the walls of which is an old lead processing works, one of several dating back to the 19th century in this area. In the tributaries that run into this giant reservoir with its 235-ft high concrete buttress, river trout dart about, their presence one of the reasons for the re-establishment of the osprey in the area. A pair can be viewed from a hide alongside the 11 billion-gallon reservoir where Natural Resources Wales have set up a special telescope to enable visitors to see the female on the nest and her partner nearby.
How tough is the walk? The ground everywhere apart from a few very small, somewhat boggy patches, is good and firm, and clear of obstruction. There are some steep climbs but most of the inclines are relatively gentle, if rather frequent. Weather is, however, all-important. Over much of the area there is relatively little cover once up in the hills. The walk can, of course, be taken in stages – one long walk for the fittest, and section by section, if this is more appropriate.
The growth of interest in this type of get-away-from-it-all holidays has led to the emergence of a number of companies that will make all the necessary bookings. We used The Walking Company, based in Monmouth, which took our proposed itinerary and booked the various hotels and B&Bs, and the taxi luggage transport, as well as providing a comprehensive guidance kit consisting of the excellent Harvey map and Cicerone booklet, and other valuable advice and information.
There is perhaps one other invaluable companion on such a trip, George Borrow, the nineteenth century East Anglian author of Lavengro and The Romany Rye was devoted to Wales and in 1854 tramped over most of Wales with his wife and daughter, wondering at the scenery, talking to local people, and learning about the country’s myths and history, all faithfully recorded in his masterly tome, Wild Wales.
http://www.thewalkingholidaycompany.co.uk/
http://www.harveysmaps.co.uk http://www.cicerone.co.uk

Rhys David is the author of Tell Mum Not to Worry. A Welsh Soldier’s World War One in the Near East. ISBN 978-0-9930982-0-8

In Northern Ireland, history repeats itself

As another crisis threatens to destroy hard-won progress, Rhys David looks back to the resignation of Chief Minister Brian Faulkner in May 1974

Here we go again, or so it would seem. Not for the first time a painfully-constructed power-sharing government in Belfast teeters, bringing back memories of the occasion the province had to be returned to direct rule more than 40 years ago.

In May 1974, it had been a difficult few months and an even more difficult few weeks for the recently established Government led by Ulster Unionist chief minister, Brian Faulkner, and containing some of the best-known Republican-sympathising politicians of the time, including John Hume, Paddy Devlin and Gerry Fitt as well as representatives from the cross-community Alliance Party. It had come into being despite considerable opposition from the more extreme wings of Loyalism and Republicanism. Yet, it was slowly establishing its authority and demonstrating the two sides could work together for the good of the troubled province, at that stage nearly 10 years into what were euphemistically called the Troubles and the more than 3,000 deaths they would ultimately bring.

The UK election called by Edward Heath in May 1974 on the question “Who Runs the Country”, – the Government or striking coal miners – drove the Conservative party from power, ushering in five years of Labour administration under Harold Wilson and later James Callaghan, and paving the way for a further showdown with the miners in the 1980s under Margaret Thatcher. In Northern Ireland, however, it brought by way of Westminster seats a sweeping endorsement of Loyalist opposition to the power-sharing executive established after long negotiations at Sunningdale a few months earlier.

The Ulster Workers’ Strike that followed brought Northern Ireland to a standstill. Factories and shops were intimidated into closure, barricades closed roads, and the authorities were at a loss how to respond without seeming to give in to what was in effect an attempted putsch. Electricity supplies were reduced to a trickle, making it quite an effort without a lift to go up and down to the rooms – numbers 510 and 512 – which had been my home for more than a year as the Financial Times Northern Ireland correspondent. The Europa’s manager, the legendary Harper Brown, did his best to look after guests in these circumstances, driving south to the Republic to pick up large tins of ham to put on the table in the absence of hot food. Press, radio and television gathered from all over the world to see what would be the outcome of this stand-off.

Faulkner’s power-sharing executive pleaded with the UK authorities for decisive police or Army action to break the strike and restore public order but this never came. Instead, a newly-appointed Northern Ireland Secretary, Merlyn Rees, vacillated in the face of this early challenge so soon into his assumption of the role.

The crucial day turned out to be Tuesday May 29th 1974. With civil servants advising that hospitals would have to shut down and that raw sewage could flood low-lying parts of Belfast, the executive split on the issue of whether it should negotiate with the unelected, self-appointed Ulster Workers Council. The Ulster Unionist members, led by Faulkner, decided they had no option other than to resign and ask Merlyn Rees to take back control.

Summoned to a press conference together with the rest of the press corps I arrived at Stormont after driving past shuttered shops, along roads strewn with makeshift roadblocks, and littered with other debris of civil unrest. Hooded paramilitaries patrolled the roads. After clearing security at the entrance to the long drive and parking outside the monumental Parliament building I decided I would go inside and see what was happening.

As I walked along one of the corridors I came across Brian Faulkner and his entourage proceeding towards me. After trying a few questions, I turned and followed him out to where the rest of the reporters and film crews following the crisis were gathered. Brian Faulkner, a decent man who managed through his efforts to become even less liked on his own side than among his enemies, duly announced his resignation to us and the world and Northern Ireland returned to direct rule until the next set of negotiations led to the Good Friday agreement 20 years later.

Without the UK election, the power-sharing executive would, I believe, have gradually won the support of the people of the province, saving the expenditure of much blood and treasure over the next couple of decades. The misinformation that the Loyalists spread without effective rebuttal about the Council of Ireland, one of the planks of the previous autumn’s Sunningdale Agreement, had been allowed to take root, depriving the executive of the opportunity to win community support.

The situation in 2017 is, of course, very different. Community relations, while still strained are better and previous levels of violence are no longer being recorded, though occasional incidents involving extremists on one side of the other still occur. Nor is the crisis this time a constitutional one, as in 1974 when the prospect of any involvement by the Irish state in Northern Ireland’s affairs was anathema to fierce Loyalists led by Ian Paisley. Yet, the relatively centrist parties led by Faulkner and Hume have lost influence in the interim with the Republican Sinn Fein, and the Loyalist Democratic Unionist Party now the dominant forces in the Northern Assembly and the Government. The once all-powerful Ulster Unionist Party and the Social Democratic and Labour Party have been largely reduced to a watching role.

The next few weeks will be crucial. Sinn Fein has said it will trigger an election now its leader Martin McGuiness is no longer in place as deputy first minister, an outcome that could harden positions on both sides and make it difficult post-ballot to create a new administration that can agree a programme. There could yet be more talks between the two parties to avoid an election. Or it might be necessary to revert to direct rule from London

The concern must be that at a time when ministers in Northern Ireland – and London – need to be concentrating on the Brexit negotiations, they will be seriously distracted by instability in the province. The consequences will be even more serious if politicians and public return to their silos and focus more on blaming each other and point-scoring than on trying to ensure a peaceful transition to further power-sharing. The further possible consequences are obvious.

Karl Marx observed that history is repeated first as tragedy and then as farce. That years of painfully-orchestrated co-operation since the Good Friday agreement should founder on the costly mishandling of an unsound renewable heating scheme suggest history this time, however, is being repeated first as farce. It is in everyone’s interest Marx’s other formulation does not now follow.

Rhys David is a writer and journalist. He was Northern Ireland Correspondent of the Financial Times 1973-1974 rhys.david@btinternet.com

 

 

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

 

 

 

 

 

 

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 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