The Collective Entrepreneur : Social Enterprise & The Smart State

Last March, a joint report was published by Prof. Kevin Morgan of Cardiff University and Adam Price (no not the Borgen creator) entitled The Collective Entrepreneur – Social Enterprise and the Smart State. Backed by Community Housing Cymru and the Charity Bank, the report looked in detail at the opportunities social enterprise, cooperatives and mutualism can bring to the UK (under the banner of the Big Society) as well as a detailed look at Wales. The foreword by Prof. Ian Hargreaves trumpets a "revival of the spirit of Robert Owen."

The reason I'm posting this now, is because in the past few months, "new capitalism", "mutualism" and "cooperatives" have been in the news due to a "decaying case for a monoculture of shareholder-led enterprise". This is embodied by the rise in things like open-source software - given as an example of the rise in mutualism and collaboration in business.

In From the Margins

The fallout from the Credit Crunch "exposed the shortcomings of the traditional business model", particularly the banking sector and credit agencies. However, social enterprises have a "Cinderella status", being a "poor relation to conventional business".


Andrew Haldane of the Bank of England argued that there needed to be "more systemic diversity" in the financial sector because the UK banking industry's over-dependence on share-holder owned PLCs led to a "homogeneity" that "bred fragility". As risk-management at these companies failed the interconnectivity and similarity between individual bank's business models caused the crisis to spread quickly and devastatingly (contagion).

The creation of banking mutuals - like credit unions - in Wales promotes Haldane's "systemic diversity". They also protect consumer choice - something seen as critical to providing more resilience in the financial services sector. The report also says that government needs to realise that social enterprise cannot just be an "arm of the state". The sector needs its own distinctiveness.

The Collective Entrepreneur

Big social changes rarely come about without some sort of crisis. The NHS and welfare state as we know it came about as the result of the Second World War. Also, before this, David Lloyd George's rapid social reforms post World War One could also be an example.

Although not completely diminished, the anger
against the excesses of the free market has been replaced
with disappointment after the Occupy Movement's failure.
(Pic : The Telegraph)

The credit crunch made us "ask questions about the nature and purpose of enterprise". However the momentum was lost. Look at the Occupy Movement – a "popular" cause that lost steam quickly. Were these examinations too uncomfortable for the free-market orthodoxy? Or did we have too many distractions? Phone-hacking, the Olympics, the Royal Wedding, MP's expenses....

The report highlights two different types of entrepreneur. The "Heroic" and the "Collective".

The Heroic Entrepreneur – a neo-liberal, rugged-individualist soldier in a war against state control. Austrian economist Joseph Schumpeter is called the "ambassador" for this type – saying that these individuals are not content with "being ruled", they "break routine" and are visionaries with "mental freedom". Schumpeter also interestingly argued that as socialisation grew alongside innovation and technological developments this "type must diminish".

During the rise on neo-liberalism this "hero" was given a new lease of life as a personification of the free-market. This celebration of the heroic entrepreneur gave the impression that "social inequalities in wealth were the result of individual differences in talent".

However, teamwork is in fact a key to enterprise success - a fact "ignored by centre-right politicians". A study is cited of Wall Street analysts where "star performers" who transferred to a different setting experienced a drop in performance that lasted as long as 5 years.

Collective Entrepreneur – Enterprise is seen as a collective social endeavour where "the team is the hero". Innovative firms aim to create a "corporate community" where workers and managers exchange innovation and ideas freely. Some of the worlds biggest and most innovative companies – Google and Facebook for example – do tend to use this sort of model. Indeed it's very common in "knowledge intensive industries".

Facebook HQ - An example of a new type of workplace hierarchy.
(Pic : Time.com)

This changing nature of authority is said to present problems however. Authority would be based on knowledge instead of a strict, layered hierarchy. That could mean that some workers could be answerable to those "below them" rather than superiors.

Collective entrepreneurship can't be given a singular definition. Indeed the roles of the knowledge economy and the social economy are quite different. The knowledge economy is focused on making profit, while the social economy is about providing a service with a surplus to ensure sustainability. The report argues, however, that many industries not traditionally associated with cooperatives or mutualism still extol the virtues of cooperation and teamwork.

In social enterprises, there's a "strong element of mutual support as a response to social and ecological problems". Robin Murray of the LSE argues that social economy requires "new infrastructures, tools and means of distributing resources services, new forms of organisation and new ways of linking the formal and informal economies".

From Big State to Big Society

At first glance the authors compliment the Conservative Party's Big Society vision. They say that David Cameron draws on a "One Nation conservatism" and that Eric Pickle's Localism Bill could "easily appear word for word in a centre-left manifesto" with its aims to "fundamentally shape balance of power in society....letting councils and communities run their own affairs". David Cameron is said to be trying to reshape the state "in the interests of civil society", undoing the Thatcherite policy of reshaping for market interests.

Cameron's Big Society is the opposite of previous Thatcherite
ideology of what society is and what role the state should play in shaping it.
(Pic : Political Scrapbook)

They are also critical of Labour's state-centric approach which gave the impression that the public sector as "neither democratic nor innovative", when they had in the past looked towards mutualism more.

On a closer examination of the Coalition's deficit reduction programme, it appears to be out of kilter with the Big Society ideals. Local authorities in particular are looking at "27% cuts over the four years to 2015". As a whole, the voluntary sector is reliant on the public sector in the UK, so declining income from state sources would leave "too big a gap to be filled". Of the £12.8bn public money spent on the voluntary sector in 2007-08, 70% of that came from public contracts and the remaining 30% from public grants. Liverpool City Council - one of four pilot councils for the scheme - say it would be "impossible to pursue Big Society aims while absorbing £100m of budget cutbacks".

To counteract this, a Big Society Bank is to be set up, funded by dormant bank accounts as well as donations from the commercial big banks. However, the arrangements and scope of those donations is yet to be decided.

Threats and Opportunities for the Social Enterprise Sector

Opportunities

1. More opportunities for direct service provision as the state cuts back.
2. Social enterprises could receive a proportion of the public money saved as a result of their work (Social Impact Bonds).
3. Community Asset Transfers from public sector to third sector.
4. Up to £236bn (2009-10) in public procurement possibly open to social enterprises.
5. Social enterprise could help public sector meet social and environmental goals as they are dropped due to costs.
6. Skills burden/dearth could be addressed by drawing on pool of unemployed graduates.

Threats

1. Public spending could dry up faster than public markets open to social enterprises.
2. Social enterprises need alternative sources of finance (40% of surveyed social enterprises were reliant on the state).
3. Community Asset Transfers can become a liability if the resources aren't there to maintain them.
4. "Management culture" in the public sector means penalties outweigh awards when risks are taken.
5. Social enterprises need to be able to form consortia to become credible bidders for big contracts.
6. More action is needed from government to develop leadership skills in the third sector.

Wales : The Social Network Nation

Social enterprise in Wales is expected to thrive due to the communitarian values, including the historic "cymortha" tradition of collective harvesting. Wales has historically high reserves of social capital and the Wales Co-operative Centre is said to be the largest co-operative development body in the UK. Wales is also said to be responsible for 8% of UK social enterprise turnover compared to a population share of 5%. However, these statistics are dubbed "questionable" and when compared to general business, the proportion of social enterprises was much smaller.


The longest running co-ops in Wales are agricultural societies, established due to the "dogged determination" of Augustus Brigstocke from Carmarthenshire. These societies had government support, and these models of co-operation in agriculture continues today with the "successful marketing co-ops for Welsh Beef and Lamb". The Miners Institutes of industrial Wales are also given as an example of Welsh cooperative tradition, with many out-surviving the mines they were formed for.

The report outlines three challenges needed to be overcome to sustain the growth of cooperatives in Wales.


1. Social Procurement

The biggest possible consumer for social enterprises is government. However social enterprises "face the same barriers as other small businesses" listed as : too much information, being perceived as high-risk ventures, the lack of trading record, public contracts being too large in scale and a decision process that emphasises cost reduction.

Public bodies have responded to these barriers by using EU procurement "community benefit" clauses to give social enterprises a "hook" with which to win public contracts. An example is given of the One Wales government encouraging the NHS and social landlords to use social enterprises in procurement. Despite this Welsh Government statistics show that their procurement arm, Value Wales, only sought 8% of services from social enterprises.

The report says there needs to be more detailed data on the social market share of government procurement and suggests setting a target of 20% of public procurement from social enterprises by 2020.

Joint purchasing agreements in the public sector created larger contracts than individual social enterprises could realistically provide for. Local authorities - the report suggests - should be given financial incentives to include "community benefit" clauses – for example, by the Welsh Government rewarding organisations that include these clauses in a high percentage of their purchases.

Another, more interesting suggestion - to immediately save up to £30million in procurement costs - is to transfer all major public sector IT contracts to open-source software.

Housing stock transfers have met resistance in Wales, but by transferring social housing to community housing mutuals – these housing associations are said to have become "major players" in themselves. Welsh housing associations have not only sought procurement from other social enterprises but have established their own. Moneyline Cymru – an alternative to doorstep lenders – is given as an example, as is the fuel-efficiency Arbed programme to retrofit social housing – recently given a boost in the Welsh Government's budget deal with the Liberal Democrats.

The report wonders whether the Welsh Government will continue to carry this experiment into services like health and education. Combining the "entrepreneuralism of the private sector with the accountability of public services" can "drive up quality and effectiveness of Welsh public services".

Examples of where this might work is in the reorganisation of rural schools, where parents and teachers form co-operative trusts as an alternative to LEA's.

Co-operatives are cited as being a "bulwark against (the) privatisation" of social care and there are plenty of examples already. The Assembly could aim for social enterprise to be the "biggest supplier of social care within a generation".

Social enterprises are already a part of the healthcare scene - despite the potential for controversy in this area. Children's hospice Ty Hafan is the leading example but there are also others, particularly in mental health and substance misuse. Independent health providers in Wales are said to be "closer to healthcare friendly societies" than outwardly profit-driven health providers.

With the possible future devolution of S4C to the Assembly, Gerry Holtham suggested a mutual solution there too. Viewers could made voluntary contributions to S4C's funding as a "partner" and the S4C Authority would be elected by its membership, which is said would increase accountability. Labour have also suggested that the BBC Trust become a mutual.

2. Scaling up, skilling up

The Welsh Social Enterprise Coaltion is "challenging some cherished beliefs within parts of the social enterprise movement". They call for social enterprise to turn into a "large-scale economic model". Despite these ambitions, RBS says that social enterprise growth in Wales is the slowest in the UK in spite of an inherent "cooperative culture".

The report says that over the next 20 years, Wales should aim to create three "beacon firms" : another Glas Cymru, a financial mutual to rival Principality Building Society and a "Welsh John Lewis" (I recently suggest something similar for Peacocks).

Jeff Skoll, founder of ebay, is quoted as saying that "social entrepreneurs will be the driving force of next 100 years". Wales needs to become its own centre of excellence during this future boom in the social market. It goes onto suggest a "Social Business School", with a Master of Social Business Administration, which would work to build skills in the existing social market as well as disadvantaged communities. The report creates an ambitious future role for Wales, including a "Hay Festival for social enterprise" inspired by the TED movement as well as many more ambitious plans outlined in the next section.

3. Finance is key

Surveys have found that good finance and funding are the greatest enabler of success. Out of the "People's Bank" idea - floated by both Labour and Plaid Cymru - there is a "public appetite for an ethical financial sector".

A Development Bank – Finance Wales would be moved from being a public interest company to once based on the Glas Cymru model. It could be part financed by the creation of Labour-owned investment and pension funds, however this would require central government support and legislative changes (an argument for independence? Wales wouldn't have to wait for "central government support").

The 8 major public sector pension funds in Wales have a collective £6billion under management. Even the diversion of a small amount of this would have a big impact on the capital available to business in Wales. It's said the creation of an "All Wales Pension Fund" would save on administration fees and would focus exclusively on investment in Welsh businesses, regeneration and public infrastructure – especially housing.

Could a "social enterprise square mile" become Wales's niche?
(Pic : Guardian Cardiff)

Mutual Home Ownership – In partnership with Welsh mutuals (Principality, Swansea & Monmouthshire Building Societies), tenants would pay a monthly payment for a share of collective equity funded by a "corporate loan by a social enterprise instead of a personal mortgage".

A not-for-profit rail company – Suggested by Plaid Cymru for when the Arriva Trains franchise ends in 2018.

A Renewable Energy "Glas Cymru" – A public interest corporation investing in locally-owned, community-based energy production or funding larger projects like tidal lagoons and the Severn Barrage. Simon Thomas AM (Plaid, Mid & West Wales) has suggested something similar in a recent short debate in the Senedd in the creation of a "Wealth Fund".

Broadband Mutual – The Dutch town of Nuenen is cited as an example where 95% of the broadband infrastructure is cooperatively owned. It's suggested a scheme similar to this could be rolled out in Wales via Public Bonds (issued presumably by the Development Bank suggested above).

A Savings Super Mutual – This would be a "national umbrella" that would "provide back office functions to Credit Unions" – effectively a "super Credit Union". It's suggested to reduce the risks that this company should start within an existing housing association, then be "spun-out" eventually as an independent company.

A National Trading Bank – This would provide "liquidity, treasury and payment services to local authorities" who currently "receive low rates of return from London-based funds that don't invest in Wales".

A Welsh Wholesale Social Bank – Communities First funding and the money from dormant accounts would be transferred here. It's role would be to "pool capital for social purposes" including a "right-to-buy" for community assets. This is similar to the Big Society Bank mentioned earlier.

The report is grand in it's scale and ambition, saying that a "social square mile" in Cardiff could "steal a march from other financial centres". This "Welsh niche" would also involve hosting a social investment market and a "social stock market" which would trade social impact bonds and other "ethical investments".

The Smart State Strategy

Social enterprise offers opportunities in areas where "neither the market or the public sector offer hope for social innovation and economic renewal". However social enterprise needs "stronger, better and more imaginative nurturing and structure" – a "Smart State Strategy".

The Smart State should:

• Create a "networking culture" where all partners; state, private firms and social enterprises collaborate.
• Use its own powers creatively to boost the social enterprise sector.
• Mobilise other key players like universities and banks to deploy their own resources.
• Deploy public procurement effectively and manage value instead of costs.
• Use new financial instruments (i.e social impact bonds) to mix banking finance with social capital.
• Fashion new training opportunities and university courses to upskill the third sector.
• Create a "social infrastructure" where social enterprises learn from each other.
• Wales in particular needs to prove that its cooperative values are an asset not a "thing of the past".

Conclusion

It's been hard to try and cram a 45 page report into under 3,500 words, so if you're still reading at this point I'm both impressed and gratified. I hope that you now get an idea of the ambition and vision this report – practically ignored by the media – has for the Welsh economy. I hope when you've got the time you'll read it yourself and form your own opinions.

I've always had the impression that social enterprises and cooperatives are only necessary to stave of a business failure. Clearly my thinking is wrong. Although the Welsh Government has a commitment to social enterprise and the "third sector", if we want Wales to achieve anything close to the ambition laid out in the report – a development bank, a "social square mile" and a re-ignition of Wales' "cooperative culture" – then it will not only require the tools but the political will. Independence might be the ultimate way to have all those tools and see this vision though – not having to rely on the UK Government to pass legislation for example, but clearly it's not as simple as that. (You can't blame a nat for making that point can you?)

AWEMA are still trying to defend the indefensible.
Allowing organisations to use "social enterprise" and "good causes" as
a shield to deflect criticism is just asking for trouble.
(Pic : BBC Wales)

In recent months, the Welsh third sector has been rocked by the AWEMA scandal, allegations made by Cllr. Neil McEvoy about Safer Wales and Welsh Women's Aid as well as ongoing concerns about how Welsh housing associations allocate housing. I fear that a small corner of the third sector is in danger of becoming a breeding ground for corruption without the proper skills and without proper oversight.

So I'd include the following "additions":

• The proposed "Social Business School" should be the first step in scaling-up the third sector before anything else. It should be academically rigorous and aim for global respect. Within a generation anyone running a third sector organisation in Wales should be expected to have an "MSBA" regardless of that organisations purpose.
• There needs to be a "third sector watchdog/third sector FSA" to properly audit social enterprises and charities – independent of government. Hiding behind "good work" cannot be used as an excuse for nepotism, embezzlement, incompetence or corruption. AWEMA for example are currently playing the race card with aplomb.
• The third sector should no longer be funded by central government grants - only from the proposed development bank, social market bank or other ethical investments. The links between the state and social enterprise should be broken completely or at very least held at arms-length.

In my personal opinion, transferring public services to a social enterprise or a not-for-profit is still privatisation by definition – just "nicer". I'm not sure what point the authors were trying to make by saying it would be a "bulwark against privatisation" in the cited social care example.

We also cannot ignore traditional enterprise. Profit isn't a dirty word. Although social enterprise might be the best way to reduce Welsh reliance on the public sector - as an employer and as an economic driver – free-market capitalism doesn't look like it's going anywhere soon.

As much as the Welsh Government should support the not-for-profit rail company or the "People's Bank" it needs to support the recruitment company or the fast food franchise. Cooperatives might be a way of making business more palatable to the Welsh people, who have traditionally been (or socially ingrained to be) mistrustful of the capitalist class. However it's going to take patience and time before it replaces the traditional free-market - good or bad - as the major economic model in Wales.

Read More

Senedd Watch - January 2012

I've now added an "Independence Index" page in the top bar which will include my current and future posts relating to nationalism, devolution or Welsh independence categorised by subject matter. It also includes a list of future blogposts I'm yet to write and an expected date for when to expect them.

• Building regulations were devolved to the National Assembly on December 31st. Environment Minister John Griffiths (Lab, Newport East) hopes it will enable the Welsh Government to "deliver a 55% improvement on 2006 [carbon emission reduction] requirements for new homes".
• A row over export figures has broken out, after the First Minister said in a letter to Prime Minister David Cameron that 50% of Welsh exports were to the European Union. Plaid Cymru MP Jonathan Edwards and Conservative economic commentator Prof. Dylan Jones-Evans have both said that exports to the EU amounted to just 39.9% in the final quarter of 2011, while Wales exported significantly more to North America than the UK average.
• Nominations for the next leader of Plaid Cymru opened on January 3^rd and closed on January 26th. Dafydd Elis Thomas, Elin Jones, Simon Thomas and Leanne Wood will be the leadership candidates.
• The Archbishop of Cardiff has criticised the Welsh Government's proposed opt-out organ donation law saying that "our bodies are not the an asset of the state." The Church in Wales held a public debate on the issue.
• Keith Davies AM (Lab, Llanelli) claimed that the A&E department at Prince Phillip Hospital in Llanelli is being "bypassed" by ambulances - suggesting patients are being transported to Carmarthen or Swansea. This comes as Hywel Dda NHS trust undertakes a review of hospital services in Carmarthenshire, Pembrokeshire and Ceredigion.
• The number of district nurses in the Abertawe Bro Morgannwg Health Board have fallen, while the number of patients has risen according to figures obtained by Peter Black AM (Lib Dem, South Wales West). He said he was concerned "increasing workloads will take their toll on the health of district nursing staff".
• UCAS figures show that applications to Welsh universities fell by 9.3% up until December 2011 compared to a whole UK figure of 6.3%. Other figures also suggest that Wales is struggling to retain graduates with 34.6% of new graduates leaving Wales between 2003 and 2007. However the home student rate in Wales was higher than many regions of England.
• The Welsh Government says that the Welsh NHS will remove and replace faulty breast implants of women based on clinical need. The faulty implants were manufactured by a French company and differing government responses to the potential risks, as well as the role of private clinics, had led to confusion.
• Four nations : Botswana, Lesotho, Mexico and Liberia, have chosen Wales as a training base for the London 2012 Olympic Games. Minister for Housing, Regeneration and Heritage Huw Lewis (Lab, Merthyr Tydfil & Rhymney) said that the training camps would "provide opportunities to develop sporting, educational and cultural exchanges with countries that come to Wales and provide opportunities for children and local communities to get involved".
• The First Minister criticised the UK Government's decision to use tunnels to ease concerns about the environmental impact of a £32bn high speed rail network in England in the Welsh Secretary's constituency of Chesham & Amersham. The First Minister said that the £500m cost of the tunnel amounted to "buying off" Cheryl Gillan, who threatened to resign from the Cabinet over the issue.
• The proposed 30 new Westminster constituencies in Wales have been unveiled by the Boundary Commission for Wales. The reduction by 10 MP's is the result of a UK Government decision to equalise Westminster constituency sizes.
• Simon Thomas AM (Plaid, Mid & West Wales) criticised a 500m "no go zone" around the Millennium Stadium during the 2012 Olympics as a missed opportunity to promote Welsh business. The Welsh Government responded by saying they were tied by Olympic rules which protect corporate sponsors and were a condition to allow Cardiff to host events.
• Education Minister Leighton Andrews (Lab, Rhondda) rejected calls by the National Union of Teachers, and Simon Thomas AM, to abandon plans to introduce school banding for Welsh primary schools. Conservative education spokeswoman Angela Burns (Con, Carms. West & South Pembs.) said that while she was not opposed to school measurements, she was "concerned about the way the categories were weighted." He has also been criticised by the Association of Teachers and Lecturers (ATL) for deciding to stop producing figures showing a funding gap between English and Welsh schools. This is due to there no longer being a consistent comparison between the two sets of figures.
• Deputy Minister for Agriculture Alun Davies (Lab, Blaenau Gwent) gave a keynote speech to the National Farmers Union saying that Common Agricultural Policy reform was at the top of his agenda to "meet the needs of farming, of rural communities and Wales as a whole." He also aims to reduce bureaucracy and regulation for the farming industry. He also welcomed the development of a new feed for cows developed at Aberystwyth University that would help produce premium milk all year round. The project will be supported by the Welsh Government via an EU programme.
• Business Minister Edwina Hart (Lab, Gower) has held talks with her UK counterparts relating to a debt crisis at Cardiff-based clothing retailer Peacocks. Peacocks failed to find new investors and entered administration on January 18^th with the loss of 249 jobs. Peacocks is one of Wales's largest private companies, employing 10,000 people in the UK.
• Unemployment in Wales fell by 1,000 to 8.9% in the three months to November 2011. Unemployment across the UK rose by 118,000 to 8.4%.
• There have been calls for Wales to "opt out" of a UK Government proposal for an 80mph speed limit on motorways. Sustainable Transport Cymru says and increase in the speed limit could lead to more accidents and increased carbon emissions.
• A Plaid Cymru review into their poor election performance in last year's Assembly election  made 95 recommendations, including a possible English-name of Welsh National Party, a new Academy for campaigning and organising and clearer leadership and accountability. Dr Eurfyl ap Gwilym, who chaired the review, also criticised the performance of some Plaid spokespeople saying they need to "pull their socks up" and need a "sound understanding of their own brief."
• A Welsh Government report into support for micro-businesses (that employ under 10 people) has concluded that it's "confusing" and that regulation was "overwhelming". It calls for a single-brand for business support. Edwina Hart welcomed the report and said she intends to "take forward their recommendations".
• Minister for Communities & Local Government Carl Sargeant (Lab, Alyn & Deeside) unveiled a Welsh Government target of a 50% reduction in road deaths in Wales - including a 65% reduction in child deaths. High-risk drivers like young drivers will be targeted in particular and officials will launch consultations with road safety organisations and the police.
• Funding for a race body – All Wales Ethnic Minority Association (AWEMA) – was suspended by the Welsh Government after its chief executive Naz Malik was accused of nepotism and corruption in running the organisation. Darren Millar AM (Con, Clwyd West), chair of the Assembly's Public Accounts Committee,  said he would welcome a police investigation due to the nature of some of the allegations.
• A tourism survey by Visit Wales has found that visitors rate Wales highly, scoring 9/10 in many areas including general satisfaction, friendliness and the natural environment. Edwina Hart welcomed the findings and said that she was pleased that Wales "lived up to the promise."
• The First Minister joined school children to celebrate the 90^th year of Urdd Gobaith Cymru at the organisation's centre at Llangrannog, Ceredigion. Special receptions were also held at the Welsh Office and Downing Street by Welsh Secretary Cheryl Gillan and UK Prime Minister David Cameron.
• The Assembly's Petitions Committee will allow opponents of energy schemes to put forward their views in a call for evidence after the committee received three separate petitions relating to waste-to-energy plants.
• The Assembly's Enterprise & Business Committee will launch a high-level inquiry into Wales' airports and seaports. It comes as Cardiff Airport saw a 10% fall in passenger numbers in 2010. Committee chair Nick Ramsay AM (Con, Monmouth) said that "if Wales is unable to to connect to the world through it's ports and airports it makes our ambitions much more difficult to realise."
• School inspectorate Estyn published its annual report and its findings suggest that up to 40% of pupils arrive at secondary school with a reading age below their chronological age. It also found that most pupils feel safe at school, teaching standards were generally good but that disadvantaged and more able pupils were both not achieving as well as they could.

Projects announced in January include : a joint Wales-EU £30million "Skills Growth Wales" fund to improve skills in Welsh companies until 2015, £1.3million towards a flood prevention scheme in Pontypridd, £2million towards the development of a motorsports park in Blaenau Gwent, approval for a £16million revamp of Cardiff Royal Infirmary, a joint Wales-EU £2million fund for "high growth start-up" companies and an £82million fund to train 2,000 non-medical NHS staff.

Read More

Linking north and south Wales by rail

Before I'm accused of being a fantasist, this is a "money no object" idea, not a serious proposal. I need to make that crystal clear. And if you think this post is long - just wait until next week!

The Challenge

The economic difference between the lowland east Wales and the highland west Wales is stark. In the latest figures, East Wales (Cardiff & Vale, E Gwent, Powys and NE Wales) had a GVA per capita that was 91.4% of the UK average. In contrast West Wales & the Valleys was just 62.8%. So while there are clear challenges in catching up with the rest of the UK, we have to remember there's a huge chasm within Wales that needs to be bridged to ensure an equal spread of prosperity.

One of the main reasons for this - in my opinion - is because of the sparsity of population in rural Mid Wales and its lack of connections with the surrounding areas. In a national context, the lack of adequate connections between major centres of the north and north west with the M4 corridor and Deeside reduces social mobility, whilst increasing the gap between the wealthy east and the stunted west. Also, yes from a nationalist perspective it does hinder the "unity" of Wales.

The Welsh rail network has often been described as "extractive". After several line closures, what we were left with were three networks. A south and south west Wales one. A mid Wales one linking Aberystwyth and Pwllheli to Shewsbury and Birmingham (as well as the Heart of Wales line). And the North Wales network - linked heavily to Manchester. All lines head east, and are joined by the Marches Line which acts as a "spine". It wasn't always like this though. There was a time when you could travel by rail between Cardiff and Aberystwyth with no problems and even from Swansea to Wrexham without spending much time in England.

The Current Situation

The Marches Line between Newport and Chester is the de-facto "north south" mainline for Wales. Indeed there are direct services between Cardiff and Holyhead – taking a torturous 4 or 5 hours to complete and not linking sufficiently with the major centre in north Wales – Wrexham. I don't think there's any reason to change its role. Indeed improved services via Wrexham are forthcoming once various improvements are made to track between Wrexham and Chester. The Marches Line should still be the "main" north-south line.

It's central and north west Wales that needs the links to the south. Aberystwyth has no direct rail service to Cardiff, and subsequently neither does Machynlleth, Porthmadog, Pwllheli, Newtown or Welshpool. It's perfectly possible to do this via Shrewsbury, but it would likely be a typically torturous 4 hour journey.

This is a huge swathe of Wales "cut off" from its more prosperous parts and its seat of government. As said before, in my opinion, the lack of major centres in rural parts of Wales is one reason why it's being held back economically. I believe that there are certain towns that could benefit from planned expansion - focusing on retaining young people in particular, and ensuring that in many communities Welsh can remain a living language. If we want the jobs, the services and the investment that rural parts of Wales are crying out for, they're going to need improved links with each other and with "East Wales".

A Proposal for North-South Rail

Back in 2008, community organisation Ein Blaenau put forward a proposal for a north-south rail link (more on that at Prof. Dylan Jones Evans). It was fairly ambitious, but the route was torturous travelling north from Cardiff, through the Brecon Beacons, Mid Wales and on to the north Wales coast via Corwen and Denbigh. Although railways like the Clwyd Valley line should be on the list for reopening in the future I actually think there's an "easier" way to link north and south effectively without having to drive reopened lines through the Brecon Beacons or the Clwydian Range.

I'm outlining five separate "big projects" to hopefully fullfil these strategic aims:

1. Improve links between north east Wales, Merseyside and Cardiff.
2. Directly link major settlements in Mid and North West Wales to the M4 corridor.
3. Directly link major settlements in Mid and North West Wales to Wrexham and Merseyside.
4. Improve connections with major English settlements in the Midlands and North West.
5. Improve rail services for existing settlements in eastern Carmarthenshire, Powys and Ceredigion.
6. Allow direct north-east to south-west rail services (Wrexham-Swansea) not only for passengers but as an alternative freight route (i.e. To/from Milford Haven).

All the screen caps are taken from Google Earth. I'm not an economist, engineer or an accountant so the cost estimates are based largely on existing projects elsewhere.

1. Upgrade to the Welsh Marches Line

• Electrification and track speed upgrades.
• Aim of getting Wrexham-Cardiff journey times to as close to 2hr15m as possible, with knock-on improvements to Holyhead-Cardiff journey times.
• Even better journey times possible with electrification of north Wales coast line.
• Improved journey times between Marches towns (i.e Hereford & Shrewsbury) and Cardiff, expanding Cardiff & Newport's economic catchment area.
• Electrification would allow improved rolling stock (i.e. Penedlino), reduced travel times, less wear on the track and improved passenger experience.
• Possible additional freight or passenger paths.
• Electrification in the Gwent area as part of a "south Wales metro" between Abergavenny, Cardiff Central and Newport.
• Estimated cost - ~£200million (based on £0.8m per km of double track electrified)

2. Swansea District Line – West Wales Line Gorseinon Link

Gorseinon Link (click to enlarge)

• Could be either single or double track, part of the former line between Pontarddulais and Swansea Docks.
• Allows direct services to Swansea from Heart of Wales Line without having to turn back at Llanelli, improving journey times.
• New station at Gorseinon, might require relocation of Gowerton station to allow a new junction.
• Could form part of a wider Swansea/Carmarthenshire metro system including reopening of the Amman Valley line and new stations (i.e. Cockett) pushing Swansea's economic catchment area firmly into eastern Carmarthenshire and southern Powys.
• Part of the line has been built on, CPO issues. Would require a segregated crossing over/under the A484. Would probably require resignalling in parts.
• Estimated costs - ~£50million

3. Rebuilt Mid Wales Railway

Moat Lane - Llanidloes (click to enlarge)

Llanidloes- Nantgwyn (click to enlarge)

Nantgwyn - Rhayader (click to enlarge)

Rhayader - Newbridge on Wye (click to enlarge)

Newbridge on Wye - Builth Junction (click to enlarge)

• Complete reopening of 55km of Mid Wales Railway between Builth Wells and remodelled Moat Lane Junction near Caersws.
• Could be a mix of single track and double track passing loops to improve line resilience.
• New stations at Llanidloes and Rhayader – could negate need for Rhayader Bypass and other road improvements.
• Would allow direct services between Aberystwyth, Pwllheli, Barmouth, Porthmadog and Newtown to Cardiff (via Swansea District Line), Swansea (via Gorseinon Link) and West Wales (via Llanelli).
• Could also allow direct Llandudno-South Wales services via link between Blaenau Ffestinog and the Cambrian Coast line near Penrhyndeudraeth (link here to Syniadau article)
• Drastically improved services to/from larger settlements south of Builth Wells (Llandovery, Ammanford, Pontarddulais, Llandeilo).
• Aim for an Aber-Cardiff journey of 3hrs 20m and Aber-Swansea journey of 2hrs 40m
• Should be built with electrification in mind.
• Would likely require improvements to Heart of Wales Line south of Builth Wells and Cambrian Coast Line, including reinstating some double track, for optimum travel times.
• Direct trains to Cardiff & Swansea shouldn't call at request stops, causing scheduling issues.
• Some major engineering work required, might not follow exactly the same route as former Mid Wales Railway.
• Serious environmental, CPO and private access issues. Would likely be strongly opposed by some, welcomed by others.
• "Nationally and strategically important" but unlikely to have a strong business case.
• Seat of government in Powys (Llandrindod Wells) effectively left out, would require good connections at Builth Wells.
• Would require a new bypass of Llanidloes, easily costing £40million+
• Estimated cost – At the very least ~£400million

4. Rebuilt Gobowen-Welshpool Link

Welshpool - Gobowen link (click to enlarge)

• Reopen 25km of line through Oswestry, Pant and Four Crosses.
• Could be built as single line with passing loop at Oswestry and built with electification in mind.
• A new station at Oswestry (one of the largest towns without a station in the UK), possibly Pant as well.
• Might negate need for A483 upgrades.
• Could form part of a metro system in north east Wales, Cheshire, Shropshire and Merseyside.
• Mainly on the English side of the border, would require cooperation, almost certainly would be entirely funded by Welsh Government as such a link has no strategic value to England.
• Would allow direct services between Cambrian Coast Line and Wrexham (as well as Swansea via Heart of Wales and Mid Wales Line)
• Aim for journey time Aber-Wrexham of 2hr, comparable to Shrewsbury and a Wrexham-Swansea journey time of as close to 3hrs as possible (via Mid Wales Line).
• Estimated cost - ~£60million

5. Reinstated/upgraded Halton Curve

Reinstated Halton Curve (click to enlarge)

• The most likely of these projects to actually happen.
• Entirely within England, no Welsh influence but strategically important to North Wales.
• Would allow direct North-Wales – Liverpool services and possible Cardiff to North West England or Glasgow.
• Should have a direct Cardiff-Liverpool Lime Street (or Cardiff-Manchester) service via Marches Line as the "premier" North-South rail service, complimenting Cardiff-Holyhead service.
• Estimated Cardiff-Liverpool journey time (with upgraded Marches line) ~3hrs Wrexham-Liverpool ~40m
• Estimated cost - £7million (£5m 2004 estimate), more if route is electrified
  

Read More

Science in Welsh schools

Wales has been a branch manufacturing outpost for the best part of 40 years. With ever increasing global competition in terms of wages, production costs and skills – Wales needs to adapt faster than ever before and start to think hard about the quality of the products we produce. If we want Wales to attract, create and retain highly-skilled, high-IP potential, high value added jobs in research & development it has to start at the bottom.

We need a critical examination of the science and technology curriculum in our schools to ensure Wales can remain competitive. From a nationalist perspective, this could also help Wales become ever more self-sustaining economically.

In 2010 the previous Welsh Government announced that a "National Science Academy" would be set up, led by the then Deputy Minister for Skills (and current Health Minister) Lesley Griffiths (Lab, Wrexham). As a scientist (and a day dreaming idealist), I naïvely thought when it was mooted that this would literally be a bricks-and-mortar science academy that would attract the best-of-the-best from within Wales and abroad.

We didn't get that.

What we did get, was a £2million promotion of science subjects in schools.

"Science Academy" is pushing the envelope as a description. A "proper" National Science Academy would've been nice but even I accept that it's unlikely in the face of budget cutbacks.

The good news is that this modest approach does seem to be paying off to a certain extent. The number of separate science GCSE entries in Wales rose in 2010 according to the Western Mail, with the biggest rise in physics. Science of course isn't just confined to the traditional "big three" but can also be expanded to include maths, IT, engineering, (academic) PE and even subjects like geography and economics – so called STEM (Science, Technology, Engineering & Mathematics) subjects.

So what else can be done?

In the critical "middle phase" of Key Stage 3 (years 7-9) science should be as engaging as possible if we want pupils to take science subjects beyond GCSE level. If you lose the pupils here, you lose them for good. At present, the science curriculum includes several cross-cutting skills such as use of ICT (Leighton Andrews has been singing the praises of ICT in schools in Twitter recently), numeracy, literacy & communication, as well as Curriculum Cymreig (which adds a Welsh/everyday life element).

Science also helps in PSE, presumably sex education in the main. At KS3 the main focus of study is on the "interdependence of organisms", "sustainable Earth" and "how things work".

The science curriculum has become more about rote learning facts and ticking learner progress boxes – making the subjects appear an awful lot harder than they actually are. While knowledge of theory and scientific facts is vital, what's also as important is developing practical skills, objectivity, logic and independent thinkers. Science is as much about that than equations, diagrams and periodic tables and probably the only reason it's a core subject at GCSE level anyway. Those skills are also transferable to many other subjects.

Science should attempt to answer questions. Open-ended individual investigations, a scientific "question of the week" and regular practical sessions could be one way to keep interest levels high. Only when the subject is taught in-depth at later stages should a more rigid science curriculum come into play. For example teachers could spend a week on "how mobile phones work" – indroducing wave physics, digital signals & technology and geosynchronisity. Go easy on the box ticking and tests, focus on the knowledge.

Science should be fun and hands-on. Yes that means it should be slightly "dangerous" and exciting. I'm not convinced that pupils need to be wrapped in cotton wool to protect school staff from frivolous law suits. Science teachers already need nerves of steel and the patience of a saint to let teenagers near gas taps, animal parts and chemicals. It might come down to a simple case of schools lacking the right resources, staff and equipment. It's great to have brand new science blocks springing up all over the place but not so if the store cupboards are empty. Developing practical scientific skills is as important as the theory. When I was in school (not so long ago) I don't believe we did anywhere near enough practical work. If practical skills aren't up to scratch by Key Stage 4/GCSE then it does seriously hinder your progress through A-Levels, university and employment. There's no better way of learning anatomy for example than actually feeling the structures and seeing what you are studying instead of a picture in text book or on a computer screen.

Science should develop independent thinkers. Although there are plenty of black-and-white answers in scientific subjects there are also plenty of grey areas. If you can provide thoroughly researched, credible evidence to back up a theory then it's hard to be dismissed out of hand. Those pupils who think "outside the box" or read around the subject, or introduce cross curricular evidence – however wacky - are as good at science as those who know A Brief History of Time by heart. I mentioned open-ended investigations earlier – an approach taken in Scotland – and in younger year groups I think it would be a great way to develop scientific talent and scientific curiosity. That spark of curiosity today could lead to the products that Welsh companies and universities are IP-protecting and exporting around the world tomorrow.

I don't think there's that much wrong with the underlying principles of science education in Wales. At Key Stage 3 , the focus on sustainability and interdependence is very relevant to the modern World and impacts on pupil's everyday lives. But to get kids hooked on science and pursuing science into higher qualifications, the subject needs to be the highlight of the timetable.

Science shouldn't become a subject defined by political objectives (sustainability). It should be felt. It should be smelt. It should inspire and turn kid's natural curiosity into knowledge and equip them for the economic challenges the rest of the 21^st century will throw at their generation and Wales.

Read More

Peacocks in crisis : An opportunity for "new capitalism"

Peacocks faces an uncertain future, but could it be the
test bed for the UK Coalition's recent drive for a "new, responsible capitalism"?
(Pic : BBC)

In one of the biggest blows to the Welsh economy since the collapse of Hyder in 2001, clothing retailer Peacocks entered administration yesterday, threatening as many as 10,000 jobs across the UK and some 2,000 of those in Wales – not only the HQ in Cardiff but at major distribution centres at Nantgarw near Pontypridd and other sites in the Valleys. There'll be 249 immediate redundancies in Cardiff, though for the moment it's "business as usual" in the stores.

In the latest Top 300, Peacocks is listed as the 6^th biggest company in Wales, with an end year turnover of £527m in 2010 and pre-tax profits of near £40m. All of this, however, is submerged in the company's debts. Estimates for the debt hover around the £600m mark with some £240million+ of that being loans at suicidally high rates of interest. Those debts were acquired as the result of a leveraged buy out when Peacocks delisted from the Stock Exchange in 2006 and was "taken private". Another company "enhanced" by private equity.

I'm clearly not an expert, but the underlying business doesn't seem too shabby at all. The Guardian says Peacocks Group had sales of £720m in 2010 and as mentioned the company is still "profitable". The company even reported a increase in like-for-like sales of 17% over Christmas, bucking the general trend. It's only when the company's debts are taken into account do the underlying cash flow problems become apparent – and the losses start to mount.

Royal Bank of Scotland has emerged as the "enemy" in all this, by withdrawing support for a debt restructuring deal (so are we expecting banks to prop up debt-laden businesses now?) However Barclays have said they are still "committed to Peacocks", even RBS are reported in the Western Mail as saying they hope a deal can be done.

Though clearly RBS withdrawing from negotiations was the "last straw" I don't think the banks aren't the "big bad" here. The blame, in my opinion, should fall on private equity and leveraged buy outs. The UK has come close to losing some of its biggest names in previous years - in particular football clubs - thanks to this form of finance. Sometimes it's done with the best of intentions like a management buy-out to save a company, other times for what seems like nothing other than vanity. Load a profitable company with debt then walk away while it burns and creditors sift through the wreckage looking for anything of value.

I'd be astonished if Peacocks went into liquidation, and I don't think anybody is predicting that. It'll still be a player on the High Street. I imagine a slimmed down Peacocks with fewer stores, fewer workers and many bruised egos is the likely outcome. Bad news, but not catastrophic. Of course it could be saved by another company or another buy out but that would likely means profits (and probably the HQ) exiting the Cardiff and Welsh economies.

We've heard a lot about "responsible capitalism" the last few weeks as well as the benefits of cooperatives (I'll be looking in depth at Prof. Kevin Morgan & Adam Price's "The Collective Entrepreneur - Social Enterprise and the Smart State" over the next few weeks).

Perhaps the "New Peacocks" can emerge as a test bed once stabilised– adopting a John Lewis model – to insure that in the future the company's workers benefit from any profit, not hedge funds, private equity firms or banks. Indeed Dr Jonathan Deacon of Newport Business School has suggested to Radio Wales that this could be one route the company could take.

Exactly how this can be done, while easing the debt burden, would be critical. For a back of a fag packet example - employees could "buy into" the company by purchasing a partnership/shares at a fixed price - for arguments sake £10 per share - and the money raised used to pay off a chunk of a renegotiated debt. After that a ring-fenced percentage of post-tax profits can be distributed back to "partners" as a John Lewis style "Annual Bonus" or a commission based on sales performance at individual stores. The running of the company could be democratised in a similar manner.

Read More

Calling Salmond's bluff or Unionist browbeating?

The UK Cabinet met yesterday and the at-some-point-but-we-don't-know-yet referendum (Owen : Alex Salmond has just announced it'll be held in autumn 2014, which I imagine was most people's guess) on Scottish independence was high on the agenda. There are several lines from my last post "Saving the Union – impossible without unity?" that might be relevant and reinforce my own view that creating a New Union – one based on sovereignty at a lower level than Westminster, united by popular consent and a culture shift in unionist thinking - is going to be an uphill struggle for a whole host of reasons.

"There's browbeating of the Celtic Fringe that sounds like the threats a fat, bald, middle-age husband would make to a divorcing wife. "

David Cameron - "....it is unfair on the Scottish people themselves (Won't someone pleeeease think of the children?). It would be desperately sad if Scotland chose to leave the United Kingdom (Go on, see if I care!)....Let's not drift apart....I think he (Alex Salmond) knows the Scottish people at heart do not want a full separation...(Let's give it one last try.)"

DC – "If Alex Salmond wants a referendum on independence, why do we wait until 2014? (You don't tell me what to do! You're not my mother!)"

Danny Alexander - "The idea that we should decide the fate of the UK on the basis of the date of a medieval battle...."

June 24^th is also the anniversary of the English destroying a French fleet at the Battle of Sluys, the start of the Great Siege of Gibraltar, a successful British-Native American victory at the Battle of Beaver Dams in the War of 1812, the preliminary bombardment that starts the Battle of the Somme, the start of the Berlin Blockade and the granting of self-government to Zanzibar by Britain.

Every day is the anniversary of something, Danny.

"There's also those who want to "play the ostrich". It's 'all a diversion from the important issues of the day'. "

DC - "The uncertainty about this issue is damaging to Scotland and Scotland's economy. "

Danny Alexander - "....when we are in the middle of a financial crisis and youth unemployment of one in four would be laughable if it wasn't so serious."

.....damage and crisis of partially your own making guys. Who holds the economic levers again?

"All we're hinted at getting is a typical Westminster fudge that patches over problems until said patches wear out....A British Constitutional Convention – bound to be a needed - could rumble on for years. It would almost certainly open up the whole EU in-or-out debate at some point."

DC - "Then we need a proper debate where people can put forward their views....so let's clear up the legal situation and then have a debate about how we bring this to a conclusion."

"Let's have a debate" – New Labour's favourite line. Not very original, Dave.

There's been an inevitable backlash from the SNP who see Westminster as "dictating" to the Scottish Government and Scottish Parliament. That's a charge David Cameron resolutely denies and he goes further by acknowledging that it'll be the people of Scotland who decide it's future.

The Scottish Parliament has no competence on the constitution. The "Union between Scotland and England" is a specifically reserved matter to Westminster in the Scotland Act 1998. As I post this Scottish Secretary Michael Moore has said that any referendum would require Westminster's authority.

However, as usual, there are potential ways around. All referenda are consultative – so no referendum is ever legally binding. Also, due to parliamentary sovereignty, any action approved via referendum can be repealed (though that's political suicide). The Scottish Parliament does, as far as I know, have the power to carry out consultative referenda. Whether it has the authority to do so on a "reserved matter", without Westminster's say so, is the issue. I don't think David Cameron is suggesting the Scottish Parliament can't press ahead with a referendum, he just wants it done on Westminster's terms to try and regain some control over proceedings.

Most independence referenda usually authorise a negotiation between governments on a settlement that would lead to independence – if there's a yes vote - followed by a confirmatory referendum after those negotiations are completed. So in most cases it's consultative anyway – never a straight case of in-or-out. What's more interesting is if Westminster tries to block, or prevent, the Scottish Government putting a "devo-max" option on the referendum ballot. In my opinion that really would be interfering in Scottish affairs but there's always the threat that a multi-option referendum would confuse the electorate.

I don't think there's any chance of Westminster blocking or changing a consultative referendum on independence or nullify any yes vote for "legal reasons" - the fall out from such a move could have the opposite effect Unionists want. What should worry unionists more in this instance is that a key part of an Act of Parliament (that the constitution and union between Scotland and England are reserved matters) in practice isn't worth the paper it's written on. As a result parliamentary sovereignty and the supreme authority of the UK Government, both cherished by unionists, is undermined just by the Scottish Government considering a referendum, let alone eventually having one.

David Cameron is well within his rights to press the issue but there's not much the UK Government can do in this situation without coming across as arrogant, condescending bullys. Perhaps the SNP will cave in and hold a referendum as early as mid-2013, but perhaps they won't.

I return to another line from my last post.

"It might irk conservatives but some of those cherished traditions might need to go out the window to ensure a New Union happens – in particular Westminster's primacy."

Dave, give it up butt. Stop expecting the worst.

If you love someone, let them go.

Read More

Saving the Union - Impossible without unity?

Carwyn's new relationship with the UK

Back in November, the First Minister gave the Welsh Politics Annual Lecture at Aberytwyth University on devolution (more on this at Borthlas, Welsh Ramblings and Click on Wales). In his speech he said that should the Scottish people vote for independence, then Wales's relationship with the rest of the UK would need to be reformed or reworked.

Carwyn Jones outlined three "tests" that he believes are key considerations to warrant the devolution of further powers:

1. That the new powers are potentially beneficial to the Welsh public

New powers are neither beneficial or unbeneficial to the Welsh public. It's how they are used that determines that - so a matter for individual party policy and subsequent application. The same can be said of a whole raft of constitutional arrangements including independence.

2. That the new powers can be accommodated in the existing Welsh Government structures

Carwyn has a point - but this could automatically rule out new powers that could be beneficial to the Welsh public - like policing - because there's no Welsh "Department of Justice" or legal jurisdiction (yet). It's a bit of a cop-out (excuse the pun).

3. The impact of new powers on the wider UK is limited

Existing devolved powers and policies that are "beneficial" to the Welsh public might not always be beneficial to the rest of the UK or vice versa – free prescriptions, single use bag charges or differing tuition fee policies for example. It also means that Carwyn could technically be ruling out powers over areas like energy, water resources and even the railways (contradicted in part by Network Rail's "devolution" to Wales in the last few months) because of cross-border impacts.

Saving the Union from itself

Nation states made of nations (as opposed to non-national federal units) vary wildly in their longevity - Austria-Hungary, the various pan-Scandanavian unions, Yugoslavia, the USSR, the United Arab Republic, Spain, Belgium....etc.

The constitutional flux the UK is currently in, could be part of a natural "untying" phase peculiar to these nations-of-nations that can lead to various places including : federalism, more formal centralisation (as in France or the UK historically) or independence.

What we now call the UK is radically different from what it was 20 years ago - let alone at the turn of the century. A UK existing at the end of the decade isn't guaranteed - neither is a break up - but in all likelihood, the UK is going to be as different in 2030 compared to the present as it was in 1990. Hardline Unionists are going to have to accept that.

I do believe Unionists are unnecessarily pessimistic and dour - both in terms of how they see the referendum in Scotland going, and the arguments they currently present for Scotland to remain in the Union.

A positive case for union, accompanied by significant changes to the relationship between the Home Nations (including a proper answer to the England Question) can win in Scotland. They can save the Union by transforming it into an ever evolving relationship between sovereign states – a mini-EU on steroids.

Things can't go on as they are. There's browbeating of the "Celtic Fringe" that sounds like the threats a fat, bald middle-age husband would make to a divorcing wife. There's a struggle to define civic "Britishness" due to identity politics - not only in the Celtic Fringe but in England too. Proper "British" institutions seem confined to Auntie Beeb, a distant and haughty Westminster, English benevolence towards sponging Scots and whinging Welsh, the Windsors and an increasingly deified military.

There's also those who want to "play the ostrich". It's "all a diversion from the important issues of the day". Stick your head in the sand if you want, cover your ears going "la la la I'm not listening" but having a well-oiled, properly functioning nation-state certainly helps provide solutions to all those bread and butter issues "ordinary people" concern themselves with. I might be giving them too much credit, but our politicians are smart enough to deal with day to day things alongside the big picture issues.

Throwing "British" into every sentence and Union Flags into every picture with a plodding, middle-of-the-road Elbow soundtrack does not a Union make. The cake, pride of place at the centre of the party - draped in red, white and blue icing - is a lie. It's been hollowed out. What's the point of icing without a delicious cake underneath it?

What a bangin' party! Turn off the Steps Greatest Hits CD, burst the balloons, chuck the sausage rolls in the bin. It's over.

You could blame the chubby, charismatic Scot in the corner with chocolate around his mouth.

You could blame the massive elephant in a St Georges Flag making everyone claustrophobic.

Or you can blame the cooks who took their position for granted, expecting cake to always be under the icing by the grace of God, well away from that cheeky scamp Alex. The cooks can stand around moping and shouting at everyone, steadfastly denying the cake's gone, or they can bake a new one. One the likes of Alex won't try to scoff quite so quickly.

"That'll do" won't do anymore

Wales's foremost federalist - David Melding AM (Con, South Wales Central) - has consistently said that sovereignty over Wales, within the Union, should rest with the people of Wales constitutionally. The Welsh should remain in Union with the Scottish, English and Northern Irish by popular consent, not because of due deference to the tradition of parliamentary sovereignty or because "it's the way it's always been".

In his recent Wales Home article, David Melding says there needs to be a "mega-political big deal". I'd agree that any New Union will need to be "uniquely British" due to the political system and practices. However, I also think it will have to be rigid to a certain extent – perhaps not allowing organic development down certain avenues - or we'll just return to this conversation again at some point in the future. It might irk conservatives, but some of those cherished traditions might need to go out the window to ensure a New Union happens – in particular Westminster's primacy.

There's a stubborn reluctance to properly address England's sheer size and economic clout in the Union, England's constitutional position as well as the status of Cornwall, Greater London and the Crown Dependencies. All we're hinted at getting is a typical Westminster fudge that patches over problems until said patches wear out (English votes for English laws).

Despite all the hard graft David Melding has put into creating a new purpose, vision and underlying justification for a New Union, what he's saying appears to be falling on deaf ears where it matters. I might not agree that the Union - at heart - is really worth saving, but I think he's earned the respect of everyone who ponders these grander constitutional issues by putting in the effort in the first place.

He's one of the cooks who notices a new cake recipe is needed, but sadly, is David Melding the Cassandra of British Unionism?

The reason? MPs and Lords (maybe some devolved politicians too) won't like some of the possible answers to, or fallout from, the following question.

What power should Westminster retain?

There's nothing particularly exciting about constitutional change. With a hollowed out Britishness – and a potential big transfer of sovereignty down to the Home Nations - only a bland, mundane, constitutional, administrative and institutional United Kingdom can really survive. Before Unionists get too depressed, or say it can't work, or that it would dilute "Britishness", I'd say it works brilliantly in Switzerland.

David says that Conservatives and Labour need to unite to provide an "exciting alternative to Celtic nationalism". That makes the job of unionists, and the creation of a New Union, much harder than it need be. Just look at the difference between Carwyn Jones and David Melding on the issue – a box ticking exercise vs a brand new form of federalism. That's just two people. Ask all 60 AMs the same question and you'll probably get 180 different answers from Dafydd Elis-Thomas alone.

Just declaring something a federation doesn't make that so either. The changes will need to be
tangible. The UK might even have to become a confederation rather than a federation (yes, there is a difference) to properly stem nationalism – a seismic change to the UK's constitution and the relationship between the Home Nations. Unfortunately, I don't think that outcome is something many unionists would have the stomach for. Can you picture a scenario whereby Carwyn Jones effectively wields more power than David Cameron within the UK?

That brings us right back to the main question. How does the constitution evolve to keep a strong "core Britain" at Westminster while devolving as much sovereignty as possible to the federal/confederal units to stave off nationalism and secessionism?

How do you get the balance right?

Where do you draw the lines?

David Melding believes that the welfare state led to the centralisation of the UK and "it's multi-national identity subdued". Logic doesn't necessarily follow that welfare be devolved - partially or wholly - within this New Union. However, without considering devolution of the "big time" powers like welfare, wouldn't a unitary state just continue wrapped in name-only federalism? That's just a re-branding exercise (or from a "nat" perspective detoxification) not a grand New Union.

In a 2007 poll by University College London on attitudes to devolution, 59% of respondents said that the Welsh Assembly should make decisions on benefits. The annual St David's Day BBC polls over the last four years suggest that around 60% want the Assembly to have "the most influence over Wales" compared to 25% believing Westminster should. Obviously you can't properly judge public opinion by a small set of polls but the view that Wales should have more sovereignty – but not independence - has some consistency.

Those on the left might oppose devolution of some aspects of welfare – I'd picture Welsh Labour opposing such a move with every fibre of their being. Meanwhile, those on the right might resist certain economic or criminal justice powers being devolved. The Lib Dems have long been supporters of federalism, but the likes of Peter Black have argued - not without reason - that even something as basic as teachers' pay and conditions shouldn't be devolved. Nationalists will always find some powers that "need to be devolved" and are unlikely to stop pressing for secession even in a New Union, although "post-nationalists" might be satisfied with a federation or confederation.

That's just the politicians. Just wait how hard it'll get when the public are asked.

A British Constitutional Convention – bound to be a requirement - could rumble on for years. It would almost certainly open up the whole EU in-or-out debate at some point. Meanwhile Alex Salmond is checking his watch and looking towards the door.

We nationalists often tie ourselves in knots umming and ahhing over the finer points of independence, including trying to decide what the word actually means. Well now it's the Unionists turn. These discussions are an awful lot easier within one party or one movement broadly united around social democractic principles. Where do unionists, from across the political spectrum and not speaking in one voice (ironically), start with this beauty?

Answering the Question


Firstly, I haven't gone all "Dafydd-El" and I still believe that independence is the optimum constitutional settlement for Wales. However if I were to have my own preconditions for a New Union it could be simplified to the outline below.

1. Each of the Home Nations should have the same powers (symmetrical devolution, federalism or confederalism) clearly laid out in a written constitution.

2. Residual reserved powers and budgets directly related to existing devolved areas should be devolved.

For example in health – Abortion, Xenotransplantation, Euthanasia, regulation of health professions.

Peculiar to Wales - the devolution of Network Rail funding in line with Scotland.

3. Reserved powers would be defined as those powers that have to be applied consistently across the whole of the United Kingdom with no scope for variation, using other federal/confederal system around the World as a template.

For example – regulatory bodies, financial regulations, employment law, "federal" voting system, the Supreme Court, weights and measures.

4. The UK should retain powers that have to be applied consistently for the United Kingdom to meet common definitions of a nation state and ensure international obligations are met.

For example – defence, intelligence, immigration & identity, foreign affairs, currency, the constitution, human & civil rights, VAT.

Again what could be included or removed depends entirely on how you would interpret these preconditions. What I've listed isn't set in stone and is just back of a fag packet stuff. It could raise as many questions by itself.

Should Cornwall and the Crown Dependencies be considered separate devolved nations? If not, why not? How would they fit into the constitution? What would be the constitutional status of Greater London? (Conflicts with Precondition 1)

Would devolving "residual powers" in existing devolved areas leave the Federal/Confederal Parliament too weak to hold the union together? (Conflicts with Precondition 2)

Should there be a return to a pan-UK NHS – how would the theoretical "repatriation" of powers from the Home Nations to the UK be handled without fuelling nationalism? (Conflicts with Precondition 3)

Would devolving drug laws (for example) make it hard for the UK to meet international obligations on things like smuggling? (Conflicts with Precondition 4)

Creating a New Union sounds easy enough - but it most certainly isn't.

Read More