Wednesday, 30 June 2010

Wales and the Coalition Government

In Mid & West Wales, as an Assembly Member I have been used to working harmoniously with local Liberal Democrat MPs – Roger Williams, Mark Williams and previously Lembit Opik. Before the election I didn’t expect that our parties would be in coalition but close working relationships already exist in Wales, and we have perfectly harmonious relationships in the Welsh Assembly too. Since Kirsty Williams’ glass ceiling breaking rise to the Liberal Democratic Leadership in Wales, we have obviously worked together as Opposition Party Leaders on areas of mutual interest.

Unsurprisingly our political opponents have tried to accentuate differences and have been resolutely negative. No surprise there! You will not be surprised that I want to look at the very positive aspects of what has been happening in Wales over recent months, and there is much good news.

The new coalition government has clearly defined themes against which the legislative programme and the budget have been set.

Prime amongst these has been economic competence and the need to deal with the massive deficit that has been left by the Labour Party after their 13 years of government. They came into power with the outgoing Prime Minister, then Chancellor, promising an end to ‘boom and bust’ and left office with the biggest bust that we have ever seen. Whilst clearly there was an international element to this economic crisis, it is also undeniable that of the major economies we entered the recession first and left it last. Our currency was weaker against the dollar, and weaker against the Euro at the end of Labour’s period of economic turbulence.

The coalition budget, whilst making necessary cuts and increasing taxes in some areas, has introduced some very valuable initiatives and policy changes for us in Wales:-

the re-linking of pensions with earnings, with a floor limit of 2.5% increase if earnings have not grown by that amount in a year is very welcome news for Welsh pensioners;

(ii) the increase of personal allowances that will occur over the Parliament to take more people out of basic rate tax by increasing personal allowances is massively welcome news for Welsh workers; and

(iii) the provision to waive national insurance contributions for a year for businesses outside of London, and outside of the East and South-East of England, is a great boost for the Welsh economy which I hope the Welsh Assembly Government will ensure is fully utilised by the Welsh economy.

A second key theme of the coalition government is the promotion of devolution and localism. In England this is reflected in schools policy with more power being given to individual schools away from local authorities for example. In Wales this is a matter for the Welsh Assembly Government, but ‘local schools’ is a policy that has been espoused and put forward by Welsh Conservatives over a year ago.

At the same time Cheryl Gillan, as Welsh Secretary, has set about delivering the referendum with gusto. A draft question, agreed by the Project Board that she set up, has been submitted to the Electoral Commission as is required by law, and the Welsh Secretary has indicated that she intends the referendum to be held in the first quarter of 2011. This, I believe, is good news for Wales.

At the same time, and for the first time ever, a Westminster government has indicated the need for the Barnett Formula to change. Wales is disadvantaged by the present formula as, indeed, is England. The main beneficiaries are Scotland and, to a degree, Northern Ireland. It is important that the Welsh Nationalist party speaks to the Scottish Nationalists to seek to see if we can have a measure of agreement on how change should be made across the whole of the United Kingdom. At the moment the main bar for any change is Scotland, and in Wales we cannot sit back and see a system where parts of the United Kingdom are disadvantaged unfairly by another part.

The attitude of the coalition government to devolution and the Assembly is important. It is not mere symbolism alone that dictated that David Cameron would be in Wales so quickly after the general election victory of the coalition parties. He had always indicated that that would be the case and, of course, he is no stranger to the Assembly, having visited even before becoming Leader of the Party.

In contrast, Gordon Brown never entered the Senedd nor, indeed, did Tony Blair, though he made one visit at the original opening of the Assembly some 11 years ago. The agenda of respect that has been heralded by the Prime Minister and the Deputy Prime Minister means we enter a new era where there is more effective partnership working between Westminster and the Assembly.

The new Secretary of State, who is determined to tackle the issues in her in-tray, demonstrates this approach. Assembly Members are only too well aware of the approach of her immediate predecessor Peter Hain. A consummate politician though he may be, his visits were characterised by an approach to Assembly business that often appeared 50% pantomime villain, 50% Victorian pater-familias. There certainly didn’t seem to be any desire for dialogue across the party divide.

The Housing LCO is to be delivered too as the coalition government heralded. Procedural difficulties meant that no amendments could be made but the decision of the Secretary of State in those circumstances to agree to the LCO was an instant one, with which I am in total agreement.

I am sure that this close dialogue will continue and be repeated over the next 5 years. It is an approach that has been welcomed publicly by the parties in the Welsh Assembly Government – let’s hope it is not undermined by private, anonymous briefings by some of those who work in the shadows for the Shadow Ministerial team at Westminster or others.

The challenges in Wales, as in the rest of the United Kingdom, are immense. In Wales, whilst protecting our excellent public services, there is no doubt that we need to grow the private sector. The Welsh economy has shrunk relatively against the rest of the United Kingdom during Labour’s period in office and that is not mere political hype, that is based on the Office of National Statistics figures.

We need too to free up our schools so that they are free of local authority control and operate within the parameters set by government but with the ability to use their own budget as they see fit. They know their schools best.

Under the Welsh Conservatives, the health budget would continue to grow. It needs to do so. New drugs are becoming available and we want to make sure that they are available to patients quickly. New treatments are coming on stream and once again patients should benefit from these new treatments.

We need to strip away much of the target philosophy that has been the key feature of the Labour years, and once again to ensure that decisions are taken by clinicians at local level rather than by ministerial dictat from Cardiff.

On the economy we need to ensure resources are used not just to promote the private sector, whether by macro-economic levers of taxation at Westminster, as the Chancellor has already done, or by intervention in Wales itself. By promoting green jobs we achieve not just the important and desirable goal of expanding the Welsh economy, but also the goal of tackling the daunting challenge of climate change.

It is by this imaginative thinking that we need to ensure that we get full value for the Welsh pound in utilising the National Assembly budget. Whatever the short term massive challenges are, and given the national debt approaching a trillion pounds, they are immense, I believe the medium to long term future for Wales is bright, and that the sort of agenda that I have outlined will help us to deliver a brighter future for Wales.

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