Barefaced Lying Lie of the Day

Tonight I am replacing my occasional series of 'Quotes of the Day' with 'Barefaced Lying Lie of the Day', starting with this corker courtesy of Labour's Pontypridd MP, Owen Smith, just now on 'Dragon's Eye':

"I'm fed up of hearing that lie repeated by the media and by our coalition government in Westminster. We have a deficit not because the legacy of the Labour Party, we have a deficit because we had a global recession which we acted to stop turning into a depression. We didn't have a deficit until 2008/2009 when the global recession struck. Its a lie and I'm fed up of hearing it."

For the benefit of Owen Smith here are Labour government borrowing figures (i.e. 'deficit') from 2002 until 2008, a period during which, according to Owen Smith, we had no deficit:

2002 - £19bn

2003 - £34bn
2004 - £36bn
2005 - £41bn
2006 - £30bn
2007 - £33bn

So, by my reckoning that makes a total of £193bn of cumulated debt ran up whilst Labour went on an unprecedented spending spree during the so called good years -- and long before the first cracks emerged in the UK economy when the government was forced to nationalise Northern Rock in February 2008. Northern Rock, incidentally, was a bank which failed not because of a global recession but mainly because it had seriously overstretched itself with aggressive mortgage sales based an overinflated house price bubble in this country -- not elsewhere in the world. So much for Owen Smith and "we didn't have a deficit until 2008/2009 when the global recession struck".

What we can conclude is this: after undoubtedly being more than partially responsible for running up the largest government debt since the second world war, Welsh Labour figures like Owen Smith now seem content to withdraw from the field and jeer at those trying to tackle it, whilst at the same time telling the rest of us that they had absolutely nothing to do with making the mess in the first place.

How this week's announcements affect Ynys Môn

This week has seen not just the Comprehensive Spending Review but also the the first Strategic Defence Review since 1998 and some significant announcements on energy policy. Lets take a look at them in the whole and see how Ynys Môn has fared:

Energy Policy

Last week the Health and Safety Executive announced a two year extension to the lifetime of Wylfa's existing pair of reactors -- hugely good news for Anglesey. Furthermore, whereas Chris Huhne this week scrapped the Severn Barrier project in South Wales, Wylfa was given Preferred New Nuclear Site status. Ynys Môn couldn't have asked for more.

Strategic Defence Review

Although all three services will be pruned back, the Treasury has confirmed that one of Anglesey's largest employers, RAF Valley, will remain in service. So far so good.

Comprehensive Spending Review

- Welsh Assembly budget 

According to the actual Treasury documents released yesterday the Welsh Assembly budget (excluding depreciation figures) will rise from £13.3bn in 2010/11 to £13.5bn in 2014/15, which is equivalent to a cumulative reduction of -7.5 percent in real terms over that period. Considering that the average departmental cut over the same period was -19 percent, as Betsan Powys says, "there is no question that on the revenue, or day to day spending side, the settlement [for Wales] is better than the scenario they had been planning for". With cuts at less than 2 percent per annum it will now be up to Carwyn Jones and the rest of the Assembly Government to stop whinging and start doing what they are paid for: i.e. governing.

- Public Sector job losses

This may come as a surprise for many readers, but Anglesey actually has a rather well balanced economy in terms of not being overly reliant on just one sector:

Workplace employment by Industry - click to enlarge
source: WAG Regional Economic & Labour Market Profile, Aug 2010

Only 28% of working adults on Anglesey are employed by the public sector -- which makes Anglesey's much less reliant on the public sector than either Wales as a whole (35%) or even the United Kingdom (31%). As a consequence of this, Anglesey's economy will hopefully be far more resilient to any unfortunate public sector redundancies than anywhere else in North Wales bar Flintshire.

- Local Authority Spending

Due to cuts in local authority budgets, BBC News research suggests that Anglesey County Council's current budget shortfall of £3.3m will rise to £10m between 2011-14. It remains to see what effect this will have on council headcount and services, but we should note that this shortfall if true will be the joint smallest in Wales.

With respect to the council I would personally judge that the most significant cause for our concern is the ongoing instability and indecision caused by the political problems at Anglesey County Council. Not only is it not conducive to inward business investment, the absence of a clear planning policy framework is having serious consequences for potential developers with the effect of "locking jobs in filing cabinets". Without up-to-date planning policies Anglesey will continue to stagnate.

- Health

The coalition government has specifically ring-fenced health spending and will ensure it rises above inflation.  However the recently leaked McKinsey report revealed that that Welsh NHS is poorly managed politically, in addition it appears the formation of the Betsi Cadawaladr University Health Board has meant that all North Wales hospitals (including Ysbyty Gwynedd) are now suffering due to the significant budgetary problems at Ysbyty Glan Clwyd. WAG says it may not have the budget to ensure that health spending Wales will be protected -- if so it will be time for it to reconsider whether Wales can continue to afford free prescriptions and so on.

- Incapacity Benefit

The current long-term sick who are paid incapacity benefit if they have paid National Insurance contributions will now only get their benefit for one year before being means tested and either losing all their benefit or moved on to a lower Job Seekers payment. The below diagram compares the current take up of out-of-work benefits throughout Wales (source DWP data here):

Precent of population on out-of-work benefits: click to enlarge

As you can see on these indices Anglesey is pretty much in the centre ground in Wales and faring far, far better than some of the South Wales valleys where almost a third of the population is on some kind of out-of-work benefits. Even so with 8.9 percent of Anglesey residents claiming incapacity benefit, we will have to see what effect this clamp down on incapacity benefit will have here.

- Pensions

By the year 2020 men and women will not receive the state pension until the age of 66. Pensions will be protected and a temporary increase in cold weather payments for pensioners will be made permanent and other payments including free eye tests, prescription charges and bus passes remain. As Anglesey has a larger than average population of retirees, this is a good thing for us.

- Overall

Obviously this is not a comprehensive review of all of yesterday's announcements and there are other spending categories (e.g. policing) for which I have not been able to track down accurate figures yet -- so if you have any more accurate information please do post it below.

As many readers will know I have argued for some time that in order to secure our future economic growth, action needs to be taken to reduce the deficit and tackle our national debt. Accordingly, including the contribution from the permanent levy on banks, I also accept that all regions must bear their fair share of that pain -- including Anglesey. My first impressions are that although yesterday's measures are tough, when we take those decisions in the round and include the recent announcements concerning Wylfa and RAF Valley, it does not superficially appear that Ynys Môn has been disproportionately hit. I could be wrong though and would be interested to hear if anyone does think that Anglesey will be disproportionately affected?

Carwyn Jones fails to practise what he preaches

I will be taking a closer look at how yesterday's Comprehensive Spending Review affects Ynys Môn later on, but I just wanted to make a quick post about First Minister Carwyn Jones' response to it, and in particular this remark:

"[The cuts] will undoubtedly hit Wales harder than other parts of the UK because we are already underfunded, as recently demonstrated by the Holtham Commission."

It certainly true that Gerry Holtham found that the Barnett Formula underfunds Wales to the tune of £300m per year in terms of need compared to an equivalent region in England. Lets put that into perspective though: the Assembly's budget for 2010/11 is £15.12bn -- this means that the £300m of underfunding is the equivalent of 1.9% of that budget. Don't misunderstand me: we definitely want that £300m, and indeed deserve it, but to claim that we in Wales are especially suffering because of this underfunding is an exaggeration -- especially as it is increasingly simply being used by Welsh Labour politicians as a crutch with which to beat the coalition government whilst claiming victimhood. If Mr Jones and his colleagues are so concerned about this underfunding, why didn't Labour use its recent 13 years in power in Westminster, plus a further 11 years in the Welsh Assembly, to rectify it? 

Secondly, it could be argued that to plead underfunding whilst at the same time paying for free prescriptions, free swimming, and free breakfasts for all primary school children sends out something of a mixed message to HM Treasury.

Finally, as it happens WAG has a kind of internal 'Barnett Formula' all of its own for allocating local government grants to Welsh councils -- however this is also based not on need but on on the size of the populations in each council area. As a consequence of this two of the poorest counties in the UK, Anglesey and Conwy, received the lowest settlement rise of just 1 percent from the Welsh Assembly Government this year, compared to, for example, a 2.9 percent rise for the far more prosperous Cardiff City. In actual fact Ynys Môn would have received even less than 1 percent if they had not been able to negotiate a special 'floor'. If the Welsh Assembly believes that Wales should be funded according to need rather than population, then perhaps it would be better if it practises what it preaches? 

Whats ailing Betsi?

The Welsh Florence
Nightingale is ill...

Another day, another Daily Post headline about possible cuts by the Betsi Cadawaladr University Health Board -- today it is about the possible closures of maternity services and children's wards. What are the causes of the need for cuts?

Do they lie with Parliament? Well, as the coalition government has pledged to ring-fence NHS spending and increase it with inflation, its hard to see that Westminster is immediately responsible.

The recently leaked McKinsey report (which WAG Health Minister Edwina Hart attempted to suppress) could provide some clues. It identified the following failures within the Welsh NHS, including that revelation that many initiatives were 'financially unaffordable':

• Strategic objectives in the NHS were too numerous and not prioritised so "none or the wrong ones were implemented";
• objectives were "politically unviable";
• clinical staff did not "own the strategy";
• implementation lacked accountability; and
• initiatives were "financially unaffordable".

Another possibility was suggested by a member of the Druid family who works at Ysbyty Gwynedd, who said that many of the current financial problems are a consequence of large amounts of red ink at the Glan Clwyd Hospital. In the past these budget deficits would have been localised in each Local Health Board, but now that the whole of North Wales has been combined to create Betsi Cadawaladr, all of the North Wales Hospitals are having to be pared back to balance the books.

I wonder if any readers with knowledge of these matters can give us some greater insight?

Wales Audit Office on Anglesey Council: "Yeah but, no but..."

The Wales Audit Office has published their Preliminary Corporate Assessment of Anglesey County Council --  a document which they state is "designed to answer the question: ‘Are the Council’s arrangements likely to secure continuous improvement?’".

Their answer can be paraphrased as, "yeah but, no but...", or as they put it in fluent bureaucratese:

"The Council has responded positively to Ministerial intervention but much work remains to implement plans and then embed the modernisation of its corporate arrangement and to assure the sustainability of improvement."

They go on to say:

"14 The Council’s political leaders and senior managers should therefore draw some satisfaction from the progress made to date, but should be under no illusion that most of the improvement agenda lies ahead; structural and cultural changes remain to be tested in taking the difficult decisions needed in order to address that agenda."

Despite that some areas of improvement have been singled out for particular praise:

"- the working relationship between the Executive and senior management has been restored; and

- procedural improvements to the work of the Planning Committee have increased the transparency of decision-making."

Anyway, here are some of the report highlights (and lowlights) in bite-sized chunks arranged by topic:

On the conduct of councillors:

"22 The conduct of councillors in meetings has generally improved, with less personalised animosity than in the past. Group Leaders have accepted responsibility for the behaviour of their members and have acted robustly when necessary. The action of Group Leaders introduces a necessary element of self regulation into the conduct of Council business.

23 There have also been constitutional changes, including the formation of a new scrutiny committee structure and agreement that opposition groups should chair certain committees. This agreement has the potential to reduce the ‘winner takes all’ culture that had previously tended to marginalise opposition groups and had contributed to the frequent realignment of political allegiances in order to gain power."

On the expulsion of certain Councillors and rifts from the past:

"25 ... there have also been setbacks which have undermined the Council Leader’s position. For the most part, these setbacks have been handled decisively, with two councillors being expelled from what was, until June 2010, the Leader’s group. Other Group Leaders have supported the Leader and the improvement programme by agreeing not to accept the expelled councillors as members of their groups.

26 However, in June 2010, the largest political group within the Council broke in two, with only a small minority of its members remaining loyal to the Leader. This rift suggests that the problems of the past are not yet resolved. Thirty-six of the Council’s 40 members now form six political groups, with the remaining four members being unaffiliated. Four of the six groups now comprise competing factions of independent councillors.

34 The improved group discipline has contributed to better standards of behaviour and quality of debate ... However, there remains some resentment among members of the opposition. This resentment has contributed to the fracturing of the largest political group, with only a small minority remaining loyal to the Leader ... The stability and sustainability of the initial improvements therefore remain in doubt."

On the 'Terms of Engagement' of the Alliance:

"29 These Terms of Engagement have proved controversial. Members of the opposition groups have reported that they are reluctant to express views that are contrary to those of the Executive in case they are branded as troublemakers. Opposition group leaders have received assurance that the aim of the Terms of Engagement is not to stifle legitimate political debate. However, it is too soon to be confident that these new political arrangements are sustainable. The continued oversight of the Recovery Board and the possibility of further Ministerial intervention promote stability but, without these, there is a significant risk that there would be further political changes, absorbing more officer time and deflecting the Council from addressing the issues it faces in modernising its services."

Sections on the interim MD, David Bowles, read like the WAO wants to have his babies:

"30 ... Councillors and senior officers alike have acknowledged the positive role he has played in setting in motion the Council’s recovery.

31 ...The Interim Managing Director has shown both shrewdness and tenacity in his approach to his task.... 

33. The Interim Managing Director has rightly identified the need for councillors themselves to take ownership of this process if improvement is to be sustained, and that the role of the leaders of political groups in maintaining momentum is the key to success. In doing so, he has provided strong support to the comparatively inexperienced Council Leader. With this support, the Leader has taken decisive action against two of his group members and has gained the support of other group leaders to help enforce his decisions. Cross-party support for difficult decisions such as this represents significant progress in developing a Council with the capacity to regulate the conduct of its own members."

On how councillors view their roles:

"35 Members of the Recovery Board have interviewed almost all councillors and have found that many of the views and perceptions that prevailed at the time of the Corporate Governance Inspection persist. Most councillors continue to see their primary role as representing their wards rather than taking a wider, more strategic view of the island as a whole. At the time of the interviews, there remained a widespread perception that councillors were selected for positions of responsibility and the associated allowances on a ‘grace and favour’ basis and without due regard for their skills and experience. The subsequent decision to allocate the chair of some scrutiny committees to opposition members goes some way towards addressing this perception."

On the need for Councillors to issue manifestos at election time:

"49 ... Election results suggest that, like many of its councillors, the island’s public also has a traditional view of local government. There are only two women among the Council’s 40 members. The predominance of independent councillors grouped in increasing numbers of small factions hinders the development of a more modern view because voters have little knowledge of what the various groups stand for at election time or between elections. Voters appear to reward those councillors who have a track record of delivering benefits for their wards and for individuals within it. "

On planning and lack of an LDP:

"51 The Council has made significant progress in improving procedural elements in the way in which it determines planning applications. However, this progress is undermined by the absence of a clear planning policy framework. The Council has neither a Unitary Development Plan nor a Local Development Plan in place, and therefore relies on a range of outdated policies to underpin its decision making. The recent agreement, supported by a member of the Recovery Board, to work jointly with Gwynedd Council in producing a Local Development Plan offers a potential solution, overcoming the Council’s limited capacity to undertake such work alone."

On the council website:

"58 Despite recent improvements to the Council’s website, too much of its content is out-of-date and cumbersome to use for members of the public wishing to access services or to make comments or complaints on-line. The Council has identified the need to improve its website as a corporate priority."

You can read the whole report below:
Isle of Anglsesy County Council Preliminary Corporate Assess Rnglish

Huhne says 'yes' to Wylfa, still says 'no' to subsidies (updated)

Following on from the good news earlier this week that the existing reactor at Wylfa will have its life extended for two more years, the Sunday Telegraph reports that the Energy Secretary, Chris Huhne will announce this week that Wylfa B will be among those sites approved by the Government for a new nuclear power station.

However, this announcement still does not mean that Wylfa B will be built -- it merely provides Government permission for the private sector developer, in this case Horizon Nuclear Power, to build a nuclear power station at that location if they believe there is a viable business case for it. And this is unfortunately were the problems for Horizon start because the Government has not softened its stance on nuclear subsidies: there will still be no government money available to support either the construction or future de-commissioning of any new plants. Horizon has repeatedly asserted that modern nuclear reactors are far more expensive to build than conventional coal and gas-fired stations and therefore need some financial support to be both viable and competitive over the long term. In order to get around the "no government subsidy" policy they have suggested a consumer-funded levy, i.e. a government sanctioned surcharge collected from all energy bills -- however this was seemingly rejected by Chris Huhne last month in favour of simply setting a "minimum carbon price floor" which would make cheaper but higher polluting energy (i.e. that made from coal and gas) more expensive, thus making expensive but cleaner energy (such as nuclear and other renewable sources) more competitive.

Will Horizon be able to proceed on this basis? We don't know -- and as I wrote last month the two German companies (E.on and RWE npower) which own Horizon will anyway be hit by a new German tax on nuclear fuel rods from next year which will anyway seriously impact their profits. As Islanders we will have to now wait with crossed-fingers and see what pronouncements Horizon make following Chris Huhne's official statement next week.

That said, as the excellent Dylan Jones-Evans writes today, there is plenty that the Welsh Assembly Government can be doing in the meantime to move things forward:

"[T]his could mean that there is a great opportunity for Wales to become a real centre of expertise in this sector, and it is now up to the Welsh Assembly Government to ensure that European Structural Funding can be used effectively to help build up value added projects for the new power station. For example, helping to create an energy technology park around the new development and ensuring that the skilled workforce needed for the power station and its construction are sourced locally are just two simple examples on how the project could benefit the Anglesey economy.

I fully expect WAG to announce a detailed strategy for supporting the Wylfa B development and how it will benefit the local economy over the next few months."

Yes, WAG, we will be watching and waiting...

Albert Owen questioning
Chris Huhne

UPDATE: With thanks to 'Avatar' who spotted it, I recommend that interested parties watch this clip (from around 11.41 onwards) of Albert Owen last month questioning Energy Secretary, Chris Huhne, on what does and does now constitute a subsidy for the nuclear industry. To be fair to Albert he asks some good questions -- but does momentarily withdraw back into his famous 'Albert Fantasyland' when he tries to claim that Labour were not against Nuclear subsidies (a tactic he also deployed during the general election) - they were.

Police Authority Chief denies "twisting" results of elected commissioner survey

In response to this post and this post regarding flaws in the North Wales Police Authority's survey on the coalition government's plans to introduce police commissioners, Mr Tal Michael, Chief Executive of the NWPA has now responded in full by commenting on this blog:

"North Wales Police Authority has not received this correspondence. Get in touch and I will be happy to look into what went wrong. Our contact details are as set out on our website.

We have not misrepresented anything. The basis of the survey was made explicit: working with the other Police Authorities in Wales we have given an opportunity for the public to express a view. The timetable for consultation was very short, but this is the fault of the Home Office. We submitted interim results by the Home Office deadline, but then we re-opened the survey so that others can have an opportunity. We have now closed the survey and South Wales Police Authority will be analysing the results so that we can publish them.

There is a difference between consultation and research. “Opinion polls” or “Representative Surveys” use sampling techniques to find out what the general public think. Statistical theory suggests that by setting quotas for gender, age, work status, social class and spreading those selected for interview randomly across an area, we are able to question about 1,000 people across an area and find out what they think with a margin of error up to 2 or 3 percentage points either way.

Consultation is when we invite people to express a view. By its very nature, consultation attracts more responses from those people who take an interest in a particular subject. Those responding will not necessarily be representative of the wider public. 

We never suggested that this was an opinion poll. The press release was explicit: we have invited people to express a view on the Government's proposals and offered to pass this on to Government. The all-Wales analysis undertaken by South Wales Police Authority does not twist the results - we said they showed that "According to the survey, 41 per cent were opposed to the introduction of a commissioner while less than 30 per cent were in favour". You have misinterpreted the results and said that 45 percent are either in favour or somewhat in favour. It would be equally valid to say that 56% of respondents were either against or somewhat against. We have given full information on the respondents including where they live, gender and ethnicity. The information given on ethnicity is the same as the information given on gender.

North Wales Police Authority has been clear about its own views on the Government's proposals. We are not opposed, but we do have serious concerns. We recognise that there is room for improvement and we are open to change, but we believe that changes should be focused on ensuring high quality, accountable policing, with the involvement of a wide range of stakeholders in agreeing policing priorities and agree that this is best achieved through governance arrangements which promote a consensual, involving approach with appropriate safeguards. See www.nwalespa.org for full details."

Whereas I thank Mr Michael for getting in touch via this blog, and am happy to accept his description of the poll as a 'consultation' rather than a 'representative survey', I continue to take issue with this part of his reply:

"The all-Wales analysis undertaken by South Wales Police Authority does not twist the results - we said they showed that "According to the survey, 41 per cent were opposed to the introduction of a commissioner while less than 30 per cent were in favour". You have misinterpreted the results and said that 45 percent are either in favour or somewhat in favour. It would be equally valid to say that 56% of respondents were either against or somewhat against."

Mr Michael's argument entirely rests on how you interpret the following results:

My interpretation is that the number of respondents either "in favour" (29 percent) or "somewhat in favour" (16 percent) comes to a total of 45 percent -- a larger number than those against (41 percent).  However, according to Mr Michael, the pinkish wedge in the top left labeled "somewhat" does not mean "somewhat in favour" but actually "neither in favour or against". Accordingly Mr Michael asserts that it is equally valid to say that the total number of respondents against the proposal is 57 percent, including "against" (41 percent) and "somewhat against" (16 percent). 

I'm sorry, Mr Michael, but this is clearly not the case. Even your own Executive Summary of the survey (page 2) states that the 16 percent figure represents "somewhat in favour":

If, as you assert, I have "misinterpreted the results", then I'm afraid that the author of your own report has also "misinterpreted the results". 

It seems clear to me therefore that my interpretation is the correct one and more respondents favour the proposal for elected police commissioners than are against it -- in direct contrast to how the results are presented. I will leave it to readers to decide whether the SWPA and NWPA have tried to "twist" the results of the survey to create a false impression of the level of support for the Police Commissioner proposals in Wales.

I also note, Mr Michael, that your reply does not address the fact that there was only 82 respondents to the poll from North Wales -- yet following a briefing by the NWPA this is how the Daily Post reported the interim survey results on 18th September:

"OPPOSITION is growing to the idea of having an elected commissioner in charge of police in North Wales. The interim results of a survey show a majority of people are against the proposal which is part of a package of reforms being put forward by the Government"

Can you kindly explain how a survey of just 82 people throughout North Wales -- which shows even according to your own executive summary that more people are either "in favour" or "somewhat in favour" than against -- gets written up as "OPPOSITION is growing to the idea of having an elected commissioner in charge of police in North Wales"?