Wednesday, 16 November 2011

Assembly Budget Deadlock - Who will blink first?

Carwyn, Andrew, Ieuan and Kirsty -budget negotiations continue with no sign of agreement yet

He might not have a magic pot of money. He might be struggling to pass his government's budget. However Carwyn Jones checked his wallet and £38.9million fell out.

Realistically, £38.9million isn't going to go very far, and unlikely to satisfy any of the opposition parties - unless some extra slack is found from the existing budget, perhaps running up to tens of millions of pounds – if not more than that.

The Conservatives are focusing on health, Plaid Cymru have focused on the economy, while the Liberal Democrats have focused on schools. Three big issues in Welsh politics, and a big headache for Labour. Labour can only realistically choose one and it's going to leave them open to attack by the rejected two that Labour are neglecting "their" areas.

Lets start with the non-starter. I don't see any way that Labour would try (or even be seen to try) and "do a deal" with the Evil Tories©. Andrew Davies took up the mantle of the NHS with some gusto before he became Conservative leader, but even then he didn't make it clear what services he would cut to fund his plans and he flubbed it. It might leave an open goal for him in future Senedd debates but Labour should survive that.

The Conservatives simply aren't trusted with the NHS – their Achilles' Heel in Wales - especially with what's currently happening in England. What's surprised me most is that he hasn't called for a Council Tax freeze in Wales, which is how this "magic" £38.9million came down the M4 in the first place.

Plaid Cymru are targeting Labour's economic plans - arguably the best target politically. Plaid's proposals are probably going to require the most radical rethink of the budget. That's something Jane Hutt might not have time, or permission to do. If there were to be a significant change in capital spending then it might see Labour's manifesto pledges evaporate. I think there are only two things that can happen for Plaid back the budget - a watered down Build for Wales, or a coalition once Plaid have elected a new leader.

I don't see either happening, however Gareth Hughes's hunch is that Labour can do a deal with Plaid.

The Welsh Government's move to set up two business funds worth a combined £55million could be seen as an attempt to deal with some issues raised by Plaid - perhaps even placate them - even if it's just a short-term fix.

Plaid will have to spell out in detail what they would cut and what they would do budget-wise. If they can do that with some credibility, then they'll be on to a winner. If, however, they just harangue the Welsh Government from the sidelines, then to the sidelines they shall remain. Unfortunately I can only see the latter, but perhaps I'm doing them a discourtesy.

My hunch is that the party most likely to reach a deal with Labour are the Liberal Democrats. That £38.9million would go some way to achieving their "pupil premium" manifesto pledge, even if only a small slice of it is used as a pilot scheme. They won't need to go into coalition with Labour, but it might make it more likely. Labour won't want a repeat of this every year until 2016, and a coalition would provide a very convenient opportunity for a cabinet reshuffle.

If Labour did that though, then it might hand a huge advantage to Plaid, who are probably going to come out of this process as "winners" one way or another. Education might very well have been a key issue during the election, but with the ongoing depressing economic news it's the economy - which Plaid have visibly pummelled Labour on at late - that's going to be centre stage.

Once Labour's centralisation plans for the NHS come into play, then the Tories, many of whom represent rural constituencies likely to be affected by this, will be able to get stuck in too.

Brinkmanship? Or grown up multi-party democracy with a minority government? You can make your own mind up.

However I'm fairly confident there'll be a budget passed on December 6th and it's likely to be Kirsty Williams smiling at the end of it.

We've been in this situation before. Dim problem.


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