BANKING ON A RECOVERY THAT'S NOT THERE

We all know that times are tough.  The Welsh Assembly Government has had to make some difficult decisions, but has tried to defend front line services, and by that, I mean the things that matter most.  The Government in London, however, are intent on slashing things that mean a lot to people all for the sake of pleasing those who support them.

The last recession was caused by a dramatic fall in Government incomes right across the world following the bail out of the banks during the banking crisis.  Because people were not paying tax, shortfalls appeared.  Gordon Brown's Government, along with several others around the world, bailed out the banks in order to avoid a complete collapse.  The alternative would have meant people having all of their money wiped out, much the same as happened in the 1930's.

The aftershocks from the global crash are being felt now.  The British Government's income is still not as high as it could be, not as high as it was for most of the last decade and not as high as it needs to be in order for us to afford all the things we want.  In situations like this, there are always choices.  And we are currently seeing the Conservatives and Liberal Democrats making the wrong one.

The Tory approach has always been to let the market make the running.  In that they may be wrong, but at least they are consistent.  David Cameron and George Osborne are simply pursuing an extension of Margaret Thatcher's unpalatable economic medicine that was so despised at the time and didn't work then.  It succeeded in making millionaires out of a few champagne-quaffing City dealers, while hard working families had to deal with job insecurity, house prices spiralling and the massively unfair Poll Tax.  Here we go again!

The Liberal Democrats, however, should know better.  If you believe anything they have said for the last twenty years, that is.  They have constantly talked about investing in the economy, making education a priority (remember the 1p on income tax to fund education?) and delivering services for those who need them most.  Now that they are in the grip of politicians who would be better suited to being Conservatives, all this has been casually forgotten.  George Osborne speaks, Danny Alexander and Chris Huhne tug their forelocks.  It's worth recalling what John Maynard Keynes, the great liberal economist said in his work "Essays in Persuasion" about a Conservative-led coalition in the 1930's.  He said: "They offer me neither food nor drink, neither intellectual nor spiritual consolation."  Present day Liberals would do well to take note rather than blindly following the Tory lead.

So is there an alternative to letting the market decide?  Of course there is.  We have two contrasting economic policies which have given dramatically different results.  When Alistair Darling was Chancellor, he cut VAT, introduced policies such as the car scrappage scheme and put in place policies to help people get back to work.  As a result, the economy started to grow again.  This meant that more people were working, businesses were making money again and the Government income started to look healthier.  If this happens, libraries stay open, meals on wheels get delivered and young people receive the financial support they need to attend college.  In the US, pursuing such policies, 3.5 million jobs have been created since President Obama came to power.  Here, the Conservatives, however, have pulled away the ladder that Alistair Darling built just to satisfy their political ends, such as the scrapping of the Future Jobs Fund.  the Welsh Labour Assembly Government will therefore bring in its own Welsh jobs fund to create 4000 new jobs during its next term in office.  The Conservatives, however, would prefer the figures to look good straight away in order (as they see it) to get elected next time around.  As a result, support has disappeared for the economy, investment has been slashed and the economy is shrinking.  Businesses are going bust, unemployment is rising and Government income is dropping.  And what is the result?  Libraries close, pensioners don't receive their meals or cannot turn on their heating and young people cannot afford to go to college.  Rocket science it certainly is not.

So what can we expect from the immediate future?  Well, unless the ConDems perform a dramatic U-turn, more of the same.  Unemployment will rise, services will be cut and more misery will be heaped upon already hard-pressed families.  I'm not holding my breath.  Thankfully, here on this side of the border, Labour in the Welsh Assembly has the opportunity to soften the blow for ordinary, hard working people.

Cutting Chepstow Jobs Is An Expensive Political Game

Hidden away an obscure Home Office publication last month is a tiny financial detail.  It wasn't even announced to the House of Commons during George Osbourne's budget last week.  You may be forgiven for thinking that it is insignificant, a minor financial footnote.  It's not.  It's a bombshell.  What is more, it effects huge swathes of Monmouthshire and will cost the area jobs, prosperity and incomes.  The worst part of it is that it's all ideological.

The Forensic Science Service (FSS) has supplied evidence in many high profile criminal cases in recent years.  Such evidence has been key to convictions being secured in some of the most gruesome crimes committed in modern times, from Soham to Ipswich.  Despite these crucial successes, however, the Conservative led Government has announced that the service will close.  What they have not said publicly, though, is that closing the service will cost £70 million pounds.  That's right, £70 million to cut 1,600 jobs across the country, including 166 in Chepstow.

Before the last election, the Labour Government became increasingly alarmed at the costs the FSS was piling up.  Several ideas were put forward for debate, one of which was the closure of the FSS.  Ministers studied each proposal in detail, against a backdrop of the FSS losing a reported £2 million per month.  Closing the service was quite rightly considered and quite rightly ruled out.  Instead, a 'rationalisation' plan was put into place, which concentrated on how the service could save as much money as possible without harming service provision.  By consulting with management, Unions and service users, a plan was put into place which would cut the losses and maintain the FSS crucial role in the criminal justice system.

The change of Government last May, however, has dealt a severe blow to the FSS.  The Conservative led Government has announced that they would be axing the FSS, with it's functions either being privatised or bought in from the existing private sector.  Tory Ministers seized on the figure of £2 million per month to portray the service as wasteful and inefficient.  No mention was made of the restructuring plan and the savings that were coming on stream.  The Tories were determined to press ahead with another ideological privatisation, going further than Margaret Thatcher had ever dreamed.  The closure was dressed up as necessary, in relation to savings and efficiency.  But thanks to the obscure Home Office document, such claims can be seen as being a complete sham.

In trying to privatise the FSS, the Government are putting 166 people in Chepstow on the dole.  Add on the knock on effects, of 166 fewer families with incomes, spending less money in their local community and the problems grows ever bigger.  Does it have to happen?  No.  A thousand times no.  Why is it happening?  Because this Government is determined to privatise wherever it can - and as we recently saw with Nick Clegg, they will play fast and loose with the truth when trying to justify their actions.

Sneaking out unpopular news like this is no better than the 'burying bad news' scandal under Labour.  I condemned it then and I will condemn it now.  Politics must be transparent, especially where public money and people's jobs are concerned.  By trying to hide the huge cost of closing the FSS in an obscure document, the Government are taking us for fools.  Their decisions to close public services for political reasons and blame the deficit is low.  Hiding the true costs of their actions is lower still.

Tories Feed The Future On Starvation Rations

At the risk of sounding like Witney Houston, the future of Wales and the rest of the UK can be found in school, Sixth Form, FE and University classrooms up and down the country.  Nurturing talent is a long process and needs time, patience and, above all else, proper resources if it is to flourish.  Occasionally a green shoot can be spotted in a desert, but most of the time anything that grows needs the right environment if it is to reach its full potential.

Thirty years ago, Britain suffered from an extraordinary attack.  Before the Argentinian Junta even contemplated invading the Falklands, young British people were pounded mercilessly by vicious public spending cuts that damaged their primary and secondary education, closed their colleges and decimated their higher education funding.  The result of this was the biggest waste of a generations talent ever seen in this country.  Margaret Thatcher built a boom on sand, with financial traders and merchant bankers enjoying a champagne lifestyle.  At the same time, our engineers, IT innovators and inventors had to either look elsewhere for work or cope with research and development budgets slashed to ribbons.  The result of this was that innovative British companies like Acorn were starved of funding then subsequently dwarfed and swallowed up by giants such as IBM.  Fast forward to today and we face the same situation again.  Either David Cameron is determined to take up Thatcher's unfinished business, or it is an act of class warfare by the Old Etonians, trying to prevent as many working class children from getting on as possible.

As our focus shifts once more from domestic policy to military action in the Middle East, we are reminded that, whatever one may think of Tony Blair's intervention in Iraq, we can also remember that he presided over the largest increase in University places on record.  Comprehensively educated young people at last had a real chance of going on to earn a degree rather than find themselves at the back of a queue made up predominantly of privately educated pupils.  One of the reasons the staying on rate increased so dramatically was EMA, the Educational Maintenance Allowance.  No longer did young people have to give up their hopes and aspirations in order to bring a few vital extra pounds into the household.  At last, they could afford to study safe in the knowledge that were able to afford their bus fares, lunches and stationary.

Now EMA is to be no more.  This ConDem government clearly believes that 16 to 18 year olds are to blame for the country's economic ills and have punished them by removing their meagre allowance.  As for those University students, they are even more to blame - triple their fees and make sure they finish their degree £45,000 in debt.

Naturally, Monmouth's M.P. David Davies is more than happy about this.  He has stated, on at least two occasions, that too many people are going to University, insinuating that current students study 'Mickey Mouse' courses and having an 'easy life'.  If such ignorant and misleading remarks are typical of Monmouth's Conservatives, no wonder voters are moving away from them in their droves.

Of course students do not have an easy life and it is incredibly crass and out of touch to suggest otherwise.  University life is different now.  Modern students are acutely aware of the need to compete in the job market and are far more switched on about life than students of previous eras.  That is why pass rates have soared and drop-out rates have fallen in recent years.  Students know what is important for them.  They need bone headed remarks like those of Mr Davies like they need - well, like they need a £45,000 debt.

Going back to my Witney-esque thoughts at the beginning, I will admit to being slightly confused about one thing.  We are constantly told that Bankers bonuses are justified because if they were not paid them, they would go off and work elsewhere.  But surely, if we want the best young brains to work in this country, the same logic should apply?  Obviously not.  The best Dentists, Chemists, Writers, Designers, Planners and Economists will all have to pay more and more rather than enjoy fat cat rewards.  Perhaps the logic is that, by the time they graduate, they will barely be able to afford a tank of petrol, let alone a ticket to leave the country.

Charity Begins At Home - But Ends At The Bank

There once was a time when the sight of someone rattling a charity tin in the town centre or the pub would send your hands delving into your pocket or purse to fish out any loose change you might have. You knew that your money would be going to a good cause, be it Guide Dogs, Dr Barnardo or Oxfam. Most charities relied on this form of donation and I cannot remember anyone ever objecting to it.

Of course, methods changed as times changed. We are more likely to set up a Direct Debit to give Save the Children or the RNLI our five pounds per month these days, but the principle remains the same. People in Monmouthshire are like any other part of the country. We want to help fund charities and we want our money to make a difference in our chosen area.

Recently, however, a far more sinister force has entered into the equation. The so-called 'Big Society' has cast a shadow over the future of charitable donations and is seriously threatening the goodwill of the British people. Let me explain.

David Cameron has a Big Idea (which admittedly not many people understand). It involves services which were previously run in the public sector being managed by collections of volunteers, charities and 'third sector' groups. The state will not fund these services in the way it did - it will be up to the groups themselves to finance them. However, 'Call me Dave' isn't going to allow these groups to fend for themselves - he's going to set up a bank to help them.

Now, I know what you're thinking, what a wonderful idea. Given people's current attitude towards financial institutions, setting up a new bank is a bit like eating your own foot. It makes no sense and people will think there's something seriously wrong with you. Perhaps David Cameron is hoping that the Big Society Bank will generously fund the Conservative Party like so many others do!

There is something far more sinister behind these negotiations, though, something which shows the Conservative Party's real aims and desires.

The 'Big Society Bank' is funded by what we know as 'Clearing Banks' - High Street Banks, in other words. These banks are commercial entities - set up to make a profit. Recent history has shown us that they seem to be able to privatise any profit and nationalise any debt. If they make money, it funds massive bonuses for their bosses. If they make losses, we pick up the tab.

The negotiations about the 'Big Society Bank' culminated with a massive cave-in from Chancellor George Osborne. He agreed to allow the banks to charge commercial interest rates to any groups borrowing money to run services previously in the public sector. While this may not sound too horrific, consider this scenario:

Lets say Monmouth has a Youth Group called 'YP1'. Lets imagine that this used to be funded by the County Council, but funding has been withdrawn because of Central Government cuts. A registered charity called 'Young People Action' come forward and offer to run the group. To do this, YPA need to borrow £200,000 from the 'Big Society Bank'. YPA are given the loan, but charged an interest rate of 5%. Over the two years of the project, the banks charge YPA an extra £10,000 in interest. This is £10,000 which is not going into helping the young people of Monmouth, but into the profits of the banks. Even worse than this, YPA raise money from donations. The people of Monmouth are reaching into their pockets to give to charity, just to see part of that cash siphoned off to boost the profits of banks. The ultimate indignity is that many banks use their profits to pay obscene bonuses to their senior management, such as that which was widely condemned as 'pure greed' earlier this week.

In this scenario, for every £1 dropped into the charity tin, 5p goes straight into the pockets of the bankers. Of course, there is no 'YP1' and no 'YPA'. They are made up. But the scenario isn't. It is very, very real. This is not a soothsayer-style warning, but an accurate description of what is going to happen.

Of course 'The Big Society' is not just a cover for cuts in public services. It's also a cover for banks to make excessive profits, pay eye-watering bonuses and allow them to make more huge donations to the Conservative Party. We shouldn't be surprised. The Tory Government is constantly telling us that the defecit is all Labour's fault and allowing the banks to escape the blame that is rightfully theirs. In return, the banks are going to escape the regulation they deserve and be allowed to run riot once again. With this amount of back-scratching happening, I'd be very surprised if anyone in the banks or the Tory party have any fingernails left.