Monday, January 29, 2018


You can argue that one definition of taxation is that it’s the fair dues we all (well most of us) pay to participate in our society – to fund significant projects that benefit us all collectively and to provide a safety net for society. Tax is, has and probably always will be (and probably always has been) a subject that stirs people up. Things are not helped by the fact that we in the old West have been collectively been sold a pup when it comes to taxation.

Now, lets be honest, the first step towards noticing that you have been sold a pup, is to actually to notice. The problem is that, the Party formally known and New Labour, the Conservatives and the Lib Dems have been hooked on the idea that either by cutting, reducing taxation for the rich (and corporations) or even perhaps by turning a blind eye to tax evasion, avoidance, etc - that wealth will trickle down from the top to the rest of us. 

This somewhat questionable theory was pumped out by Ronald Reagan (and Mrs Thatcher) in the 1980’s is still pretty dominant; it is not a new theory. US Presidential candidate William Jennings Bryan (in 1896); who noted ‘that if you will only legislate to make the well-to-do prosperous, their prosperity will leak through to those below’. 

The ‘Trickle-down theory’ first appeared in the 1932 US Presidential campaign, when Democrats used it to hammer Republican Herbert Hoover’s plan to engineer economic recovery by making the rich richer into the ground.  Some fifty years later even Ronald Reagan’s supporters struggled to sell the idea to their own party, even George Bush (Senior) openly and publically mocked Reagan’s theories of supply-side economics as ‘voodoo economics’ at least until he got the Vice Presidential slot. 

On this side of the pond there were some monetarists who told Mrs Thatcher straight that the idea was nonsense and that it would not deliver results  - naturally she did not listen. Reagan’s first budget brought in a moderate reduction in the basic tax rate, this was followed by the a drastic reduction of the top tax rate from 70 to 50 percent and later still to 28 percent. 

If the theory was correct then, the public coffers should have swelled with enough extra revenue to balance the budget within one to two years. Unfortunately, the theory was incorrect, within the eight years of Reagan’s Presidency the total Federal deficit soared from around $900 million to some $3 trillion dollars.

What followed has been described as an orgy of speculation in stocks, shares and real estate (this was the era of ‘Greed is good’), ordinary Americans stopped saving and started spending. Through the 1980’s there was a near continuous decline in long-term capital investment – on which economic growth and jobs were dependent.  

To make matters worse the USA went into recession and the Federal Reserve had to raise interest rates to hold down the inflationary consequence of the tax cuts. By the winter of 1981/1982 the unemployment rate in the USA had risen to 10% for the first time since the aftermath of the great depression in the 1930’s.

The gulf between the wealthy elite and the rest of the population now became (and has remained) a chasm, the rich got richer and parallels have been drawn between the 1980’s and the Gilded Age of the 1870’s (income tax was abolished in the US and was only reintroduced during the First World War).  The 1980’s for the mega rich in the USA was an era of conspicuous consumption and extravagance – yet oddly enough very little of this prosperity tricked down to the American middle and working classes.

Interestingly enough average US family incomes did not return to the level they were at in the 1970’s until 1987. While the theory may have sounded good, the harsh economic reality was that Americans were now working harder and longer – in 1973 an average American worker had 26.2 hours of leisure time per week, by 1987 this was down to 16.6 hours per week.

One result was that jobs were also now less secure, Americans now worked on short-term of temporary contracts in increasingly un-unionised working environments. For blue-collar workers the 1980’s were a disaster, wages fell through the decade as employers threatened to move production overseas because the workers had priced themselves out of employment. During the same period in the UK well paid and well pensioned heavy industrial jobs were sacrificed and replaced (to a degree) with less well paid less secure poorly pensioned jobs.  

The right wing, in the US and here in the UK crowed about how government should not interfere with (or regulate very much) the ‘free market’.  This hands off attitude was also duly applied to the US savings and loan industry, laying the groundwork for the collapse that was to follow in 2007. The only exception being that if things went really pear shaped then it was expected that Government would collect the tab. One side effect of all this was fraud, 650 savings and loan companies collapsed, with the $1.4 trillion dollar tab being picked up by the US government.

On this side of the pond, building society after building society were floated on the stock market – and within a few years were readily absorbed by increasingly greedy banks.  In the US, exploitative working practices and sweatshops reappeared encouraged by the effective withdrawal of regulation and inspection. The 1980’s also saw the growth of increasingly powerful media empires and a concentration of power in fewer and fewer hands despite much reputed mantras from government about greater competition and choice for consumers.

We are all still living with the consequences of that period in the 1980’s when an ideologically driven obsession with the ‘free market’ and ‘privatisation’. Heaven help anyone who dare question these sacred truths – the very heavens may fall. The problem is that the market was rather than being ‘free’ it was pretty much increasingly unregulated as Governments in the USA and the UK largely looked the other way – tax collections fell and ironically tax evasion soared.

This state of affairs was tolerated by the long time dying Major Government and largely encouraged by the former New Labour governments of Tony Blair and Gordon Brown and barely mentioned by the former Con Dem government. Even the crash has not really changed things - while there was some talk about tacking tax evasion it was followed and matched by continuing (significant) staff cuts to HMRC.

It is interesting because tax evasion and tax avoidance, at least outside of the UK, is rarely out of the headlines with many heavily indebted governments being particularly keen to hunt down every tax dollar / euro / pound that is owed by tax evaders avoiding (unlike the rest of us) paying their fair dues to society. 

The Westminster elite privately at least regardless of whatever they say publically, appear to pay scant respect to the idea of fair taxation and fair representation. The British state (pre and post Brexit) now appears to be as close as possible to being governed by the sons of bankers and the sons of the City in the interests of the City (of London).

This reluctance to deal with the issue of tax evasion and the questionable money management activities of the city and elements of the elite and the prospects of Europe wide transparency and action against money laundering may have provided the motivation to develop a distracting and ultimately successful anti European campaign (via the well read tabloids) that ultimately led to the Brexit vote. 

The real problem remains that the current UK Government is, like pretty much all previous Westminster governments since the end of Empire, remains in up to its neck when it comes to tax evasion. The UK Westminster government is heavily involved in aiding and abetting tax evasion worldwide. British Overseas territories, including the Cayman Islands, help to hide around trillions from pounds from the different nation’s tax authorities.

Our biggest problem is that deep in the belly of the Westminster beast lies the two way relationship between Westminster and the City of London. This may go a long way towards explaining why the former New Labour governments, the former Con Dem coalition government and the current now weak and wobbly Conservative government (were and) remain reluctant to do anything about the problem of taxation.  

A few but not all of the city banks have been exposed as being are hand in glove with drug dealers, dictators, rogue states and terrorists when it comes to money laundering. The British Overseas territories lie at the heart of a web of money laundering and tax evasion, the inertia or reluctance to do anything about the problem may well be explained by the lure of comfy lucrative seats on the board for former Westminster politicians.

Saturday, January 27, 2018

Saturday, January 13, 2018


Our small businesses in Wales make a vital contribution to our economy and account for 95% of all businesses in Wales; it is vital we support this sector. Business rates still account for a significant part of operating costs for small businesses and as a result prevent businesses from growing, from investing in themselves and in many cases, creating more jobs. 

We need to remove the burden of business rates and allow our private sector to flourish and create employment opportunities.  Small businesses are vital for our economy, they form the backbone of our economy and they are vital in terms of spreading economic growth beyond our cities and towns into our smaller towns and communties. 

If we truly want our country to be thrive, then we have to support and develop our small businesses. Business rates are a burden – they account for a far greater proportion of operating costs for a small business than they do for large businesses. Plaid Cymru has long championed the importance of local economies when it comes to generating national wealth. 

Plaid wants to see the Welsh Government introduce permanent business rate relief for 90,000 small businesses – 20,000 more than the Welsh Government is offering – and to give more public sector contracts to local business. At the moment Welsh Government says 50% of £6 billion public procurement is sourced from Welsh Companies – Plaid would like to see that increased to 75%, putting another £1.5 billion into the pockets of Welsh companies.

In the New Year, we have a perfect opportunity to support local businesses, as shoppers, we have enormous buying power. Every £1 we spend in a local shop is worth 63p to the local economy and small firms generate 58% more economic benefit for local economies than large firms. As long noted by the Campaign for the Preservation of Rural England, every £10 pound spent in a local business circulates at least three times before it leaves the local economy rather than vanishing when spent in the branches of chains. 

Now it should not all be simply down to us; the Welsh Government should be leading on this and could do much more to support Welsh businesses. A solid step to boost our small to medium sized businesses would be to ensure that the Welsh Development Bank given an extra £500 million to plug the funding gap by using the Financial Transaction monies recently transferred from Westminster, and seed the development of a new network of community banks on our high streets.

Tuesday, January 9, 2018


An economically important bridge fully administered by Highways England
The Severn toll bridges have gone back into public ownership, and the toll price has been cut as the UK Westminster government has removed VAT.  As Highways England take charge of the M4 and M48 bridges – there are new reduced tolls: Cars £5.60 (from £6.70) Small buses/vans £11.20 (from £13.40) Lorries/coaches £16.70 (from £20) – this the first time the tolls have been reduced.

It remains Westminster’s intention that the tolls be removed by the end of 2018. In the meantime the tolls will fund the annual maintenance and operational costs average £15 million between both bridges and the UK Westminster government has said the continuation of tolling will help pay for their upkeep.

Naturally this good news has been accompanied by whining from the usual Labour suspects, who did little during the 13 years of Labour government’s in Westminster to alleviate the plight of commuters and businesses who had little choice but to cough up the ever increasing toll fee to get to work or to do business.

While the long suffering commuters who have been taxed for going to work, and many businesses are looking forward to the demise of the Severn Bridge tolls, there will be consequences for all of us, who are becoming increasingly second class subjects, in an increasingly unequal union. It may well be the estate agents and house builders who really cash in. Once the tolls go house prices and the pressure to build new houses to deal with the demand for cheaper housing from across the bridge.

Simply building houses in south Monmouthshire, Newport and Torfaen to cash in on the projected housing shortage in the Bristol area is not acceptable; it fundamentally fails to solve the local housing shortage. I have no doubt that local residents will be effectively priced out of the market. As any proposed houses will be priced to maximise profits and effectively marketed and sold in Bristol.

Wales needs to have substantially more affordable housing otherwise an entire generation will miss out on the reasonable expectation of having a decent home. The supply of more affordable housing should be met through a combination of bringing empty properties back into use, and new developments of mixed housing in the social and private sectors, but only, when local needs and environmental sustainability have been taken into account.

Our country would be well served by the establishment of a National Housing Company, which could borrow against rents to build a new generation of public rental housing in Wales limited in number only by demand. Whatever Government holds power in Cardiff Bay should support Local Authorities that wish to build new Council Housing.

Local Authorities should be expected to agree targets for supplying affordable housing, including new social housing, with the Welsh Government, but should be given the flexibility to decide how they would achieve this based upon the needs of their area. Local Authorities will be able to develop joint plans with neighbouring local authorities, or work through housing associations or the National Housing Company, if they believed this was the best way to meet the needs of their areas.

We need to look at championing the development of new homes in small-scale housing developments in both rural and urban Wales on ‘exception sites’, where land plots, not covered by general planning permission, will be capped at an affordable price designed to benefit those in local housing need with family and work ties to the area, and whose sale will be conditional on these houses continuing in local ownership in perpetuity.

I have no problem with the scrapping of the Right to Buy scheme, its from another time, and is no longer fit for purpose. What’s left of our social housing stock needs to remain intact in order to meet the demand for homes. Along with developing social housing stock there is a need to introduce a more rigorous system in the allocation of social housing to give priority to those in local housing need.

Local democracy has been undermined, as developers (and here we are not just talking about housing) simply appear to carry on appealing until they get their way or get their development retrospectively approved at a higher level. Or the process of land acquisition literally begins before the proposal even goes to inquiry almost as if the decision has already been made.

Local government officers will (and do) advise local councillors not to turn down developments (whatever the grounds) because the developers will simply appeal until the cows come home and that local government just does not have the finances to cope with this situation.

Part of the problem is that our planning system, along with our almost nineteenth century local government setup is not designed to coexist with devolution or for that matter to deliver planning decisions with real and lasting benefits for local people and local communities. There is a real need for root and branch reform and reorganisation of our planning system; the Welsh Government’s simply decided to tinker and tweak with existing out-dated legislation rather than reform it.

Our current planning system remains far too focused on railroading through large housing developments that bring little benefits for local people and local communities and often fail to resolve real and pressing local housing needs. We need a fundamental change in planning culture to encourage appropriate and sustainable smaller scale housing developments, which are based on good design and actively promote energy efficiency and good environmental standards.

Our planning system and planning processes are too slow, too bureaucratic and too unresponsive to real local needs and local opinions. The current system is based on the post-war Town and Country Planning Act from 1947 and is simply out-dated; our country needs a modern planning system that meets the needs of modern Welsh society. In line with the realities of devolution our country needs an independent Planning inspectorate for Wales as the old single planning inspectorate for England and Wales is increasingly unsustainable.

What we badly need is a sensible properly planned housing strategy, not just for south Monmouthshire, the rest of the former county of Gwent and Cardiff, but also for the rest of our country. When it comes to large-scale housing developments, based on previous observations, we can pretty much predict what happens next.

If a planning inquiry come out against a proposed development then there will be another appeal to Cardiff – where I have little doubt that proposals will be rubber stamped by the Labour in Wales Government in Cardiff (while many things may have changed this mirrors pretty much exactly what went on when Wales was run by the old Welsh Office).

Westminster ministers during the heady days of the Con Dem coalition favoured changing the planning rules (in England) to boost house building to revive the economy. The Labour in Wales Government in Cardiff naturally favoured changing to planning rules in Wales to ‘tilt the balance in favour of economic growth over the environment and social factors’.

Ironically that sentiment was perhaps aimed specifically at overturning those few occasions of late when our Local Authorities have rejected some developments (often at the behest of concerned local residents) rather than simply putting economic needs ahead of economic, environmental benefits and community cohesion.

Over the medium to long term this is fundamentally bad news for those residents of south Monmouthshire, or residents of Torfaen, who have fought the plan and the good citizens of Abergavenny who fought to retain the livestock market. Not to mention the concerned residents of Carmarthen who have worries about the impact of over large housing developments or the residents of Holyhead who opposed a planned new marina development

We in Wales, need to think outside the box, and look seriously look at the release of public land as self-build plots for affordable homes, to buy and to lease, and allow housing associations to build their own high-quality prefabricated homes as the Accord Housing Association successfully does in Walsall. This would also break the link between housing companies making fact profits and local government approved over development in and around our communities.

Our communities have been consistently (and continue to be) ill served by the planning system, by our local authorities (via the flawed system of Unitary Development Plans) and more recently by the Labour in Wales Welsh Government in Cardiff. With increasing pressure from over development community cohesion is under threat, along with increased demand on overstretched local amenities, our NHS and our green spaces.

An opportunity to address the shortage of affordable housing, to encourage more small-scale renewable energy projects, and to actively support small businesses in relation to the Planning Bill has been missed. It is time to start the process of actually addressing the flawed LDP (Local Development Plan) system, which does not deliver for local communities and fails to serve our national interests.

Perhaps before constructing large numbers of new houses which often fail to tackle local housing needs we needs to take a long hard look at the number of empty properties something that remains largely unaddressed in many of our communities. We need a planning system that takes account of local housing needs, the environment (and seeks to create protected green belt land around and within our large and small urban communities).

We also need to holistically plan and act for the whole of Wales – something that is not happening effectively at present. All of these things are something we just won’t get without fair funding for Wales, a full range of powers to shape and move our economic leavers and to be honest will go no where fast without Labour significantly losing in the next set of National Assembly elections.

Tuesday, January 2, 2018


Once again our rail fare are rising with the regular post Christmas ramp up of rail fares. Welsh commuters travelling on Great Western Railway lines will have to pay 3.1% more for their tickets. Many annual season tickets prices have increased yet again e.g. a season ticket between Neath to Cardiff, has gone up by £56 to £1,708.

The idiots (some of whom may have found themselves well paid handsomely salaried executive employment post rail privatization) who decided that privatisation of the railways was a good idea – have left us with an overly expensive and fragmented rail network.

Personally I don’t trust Westminster (or the Labour Party) to run our railways, look at the mess they made last time and the mess they made privatizing our chronically underinvested railways. Barely concealed behind the fare rises Westminster is not so quietly washings its hands of investing in our railways and shoving the costs of investment onto rail users and the franchise holders.

Effectively unrestrained and largely unsupervised, the rail companies have been continuing to ramp up rail fares again, while running often minimal rail services, all with the tacit co-operation of the Westminster Government’s, the Department for transport (in London).

Here in Wales it did not help much when both Welsh Labour and Welsh Conservative MPs at Westminster voted against the devolution of that portion of rail track within Wales – something that would have enabled work on our railways to be planned and actually carried out. 

Arriva (Deutsche Bahn) withdrawal from bidding for the next Wales franchise won’t solve our problems with our poorly developed and badly fragmented rail network. Not when Netherlands State Railways, French State Railways and Hong Kong State Metro are waiting in the wings; as the three remaining contenders for the franchise.

With the best will in the world we may end up with more of the same as all of whom (just like most of the other franchise holders) will rake in the profits to fund investments and cheap rail fares in their home countries.  Think on that when we are rattling along in our over crowded ancient but relabeled / rebadged rail franchise.