About the courage of Spanish politicians (and the timidity of Welsh ones)

I previously wrote nice things about the tram network in Valencia and I had the opportunity to visit the southern part of the region a couple of weeks ago. Alicante is a sea side town with a lovely old city centre and sprawling modern outskirts. If Spain is in a recession, the more touristic cities along the coast  do not show it, which does not mean that the people there don't hurt.

However, coming from Wales, it was interesting to me how the region solved its public transport problem. The coast line has long been connected via an old diesel train all the way to Valencia. The track was narrow gauge and single file. In a sense this was all that is needed and the region decided in 2003 to update the network. What they did was smart and on the cheaper side of the usually grandiose transport investments in Spain that contributed so much to ruining the Spanish regions' finances.

In effect, they kept the single file tracks, electrified the network and replaced the rolling stock with trams. No guessing where those trams come from: only the finest from Bombardier (Canada). The result is a reliable regional transport network that connects Alicante with Benidorm, and two underground city stops in Alicante itself which allow future lines to be built.

A product of political courage - Alicante tram

Now for the politics of it. The investment in public transport in Spain was made mainly by the regions and it crippled many of them. Some even had to mothball their rolling stock or lease it to other countries. Yet, some regions have maintained their new transport networks and the improvements will give them an additional advantage once Spain's economy recovers. In a sense, it took guts to make those investment decisions, and you may say that it ruined a few political careers of regional politicians along the way.

Yet, then again, look at the dithering of the Welsh politicians when it comes to the modernisation of the valley lines. There is nothing they could not do what Spanish regional politicians did. But Carwin Jones and his bumbling cabinet will always lack the guts to spend political capital on large transport infrastructure projects. Instead, they look to London whilst accusing London at the same time for meddling in Welsh affairs.

I guess a country gets the politicians it deserves. And sometimes it takes a politician to put his political career on the line for a project he believes in. We know political courage is not Carwin Jones' strength. But if not for improving the lives of the people in Wales, what was his political life for?

Why Wales is so far behind

I am in Spain at the moment, in Valencia, to be precise. Spain consists of largely autonomous regions and Valencia is the capital of one of those. This makes Valencia roughly comparable to Cardiff in Wales. It has a regional government with a parliament, and decides most of its own affairs, from health to local government.

Taking the train here in Valencia to a nearby city however reminded me once again what's wrong with Wales. Leaving the main central station here in Valencia, the train quickly gathered speed, and arrived at the next stop without any hitch. You think this would be how it is in Wales as well, but far from it. Regional trains in Spain are electrified, whilst Welsh trains run on diesel engines, most of them built in the 1980s. Take the train from Cardiff to Holyhead and you know why most Welsh politicians (who can afford it since they claim it on their expenses) prefer to take the plane if they want to get from South Wales to North Wales.

But it gets worse. Arriva Wales Trains which won the contract for Wales also runs the regional connections to the valleys. I am not sure if you have ever experienced any of the valley trains but if you have you know what I am talking about. The trains are filthy, slow and break down frequently. Not that Arriva Trains would care about the dire service. Their investment in the rolling stock and train stations (in an abysmal state, up and down the country) has been practically zero since they won the franchise in 2003.

Arriva Wales Train in the Welsh valleys

This contrasts starkly with Spain. There are some gaps in the high speed railway network yet overall the trains here are fast, reliable and clean.

This is what you would get if you took a train in Valencia

So why is Wales so far behind? People cite usually two reasons. First, transport policy is not a prerogative of the Welsh Government but decided in London. Second, the geographical terrain in Wales makes fast trains difficult.

Both reasons border on feeble excuses. Transport policy does not differ in Spain from the UK. Most decisions are taken by the centre, that is in London or Madrid respectively. Yet, nothing prevents Carwin Jones and his Welsh Government to build a strong regional alliance of local councils to make a case in London for electrification and investment in Welsh trains. So far, his only response to the dire state of the Welsh railways has been: silence.

The second reason is even more spurious. It seems to me Swiss engineers may face even more difficult challenges in terms of terrain yet the Swiss railways are electrified at 100%. Yes, all of the Swiss railways are electrified which makes them one of the most reliable train networks in the world.

You may say this is all about to change since the Welsh Government has just announced that it will take a more robust stance in transport policy. But not so fast. After almost 15 years of silence on the issue, what did Carwin Jones decide to focus on? Cardiff Airport.

He wants to spend more than £20 million of the Welsh budget to buy (yes you are reading right: 'buy') the moribund Cardiff Airport. This is just the purchase price for an Airport that is practically dead in the water. Why? Since many of the ministers in his government have a constituency in the north of Wales it is essential that they can fly from Holyhead to Cardiff Airport. If Cardiff Airport would shut (which it is about to do) they would have to take the train. God forbid!

So, there we go again. The Welsh Government will spend £20 million on a dead airport with no transport links while we can hop on and off filthy trains in the valleys. That's transport priorities of Labour for you.

Universal benefits to go?

Britain has a long tradition of universal benefits. Whilst some of those are rightly celebrated as a means to lift some people out of poverty and provide a unifying thread across all sections of society, some of them have become a serious challenge to the public purse.

Politicians who question the usefulness or wisdom of universal benefits, such as free bus passes for all pensioners, run into two problems. First, they sound as if they grudge some of the poorest in society the most minimal types of support. And, second, they need to explain how universal benefits can be re-designed in such a way that they are targeted at the most in need. Means testing, the conventional form of targeting benefits to particular social groups, is an expensive bureaucratic exercise whose cost often exceeds the potential savings.

Whilst universal benefits are only minor expenditure items in large budgets (such as that of Central government or England's), for the devolved administrations in Cardiff, Edinburgh and Belfast some universal benefits constitute a major item of expenditure simply because their devolved budgets are smaller and predominantly in those areas that 'host' universal benefits such as bus passes or prescription charges.

The former Scottish Auditor General has now raised some serious concerns about the culture of 'freebies' from devolved governments. In a BBC interview he argues that the demographic changes over the last 2 decades makes a strong case for reviewing some universal benefits. future projections of the costs of universal benefits support his argument. In the long term, some of the universal benefits are simply unsustainable and it appear also morally questionable why millionaires in Wales or Scotland should receive free prescriptions for medication.

The Scottish Labour leader has also floated some controversial ideas about universal benefits, the first time a Labour leader has ventured into this territory. The Welsh government under Carwin Jones has strongly rejected her argument and insists that universal benefits are here (in Wales) to stay. Yet, the Welsh government's case is even weaker than that of the other devolved governments. With a yawning gap in the budget for the NHS (this year alone about £240 million need to be found to save NHS health boards from bankruptcy), and no new funding settlement for Wales in sight, Carwin Jones hopes for a balanced budget are fast disappearing. So far, he has managed to lay all blame on everyone else but the profligacy and mismanagement of his own government, but he wont be able to do this much longer.

Revisiting the extent and usefulness of universal benefits may just be a starting point to reduce the gap in the Welsh budget. The biggest hurdle for this however may not have anything to do with the number crunching, but with Carwin Jones' character. Looking at universal benefits takes political courage and that is not something the Welsh Labour leader is known for.

What's wrong with Wales?

The Welsh economy has been in decline for the last 4 years. Not only that Wales has been hit hard by the recession since 2008, it also seems to be caught in a vicious cycle. Since inward investment is difficult to come by, economic activity in general is low in Wales which makes it an unattractive place for any investor to be. On top of that, the economic policy of the Welsh Government does not help. The Labour government under Carwin Jones has mainly one objective: to keep the public sector as large as possible since it is public sector jobs that form the main electoral pool for his party, and because public sector employment is often the only mechanism to address structural unemployment in some areas with low economic activity.

The result of this devastating policy and the long term structural problems of the Welsh economy are reflected in the economic figures. In almost all indices of economic activity Wales lags behind all other regions, whilst it leads the four home nations in almost all statistics of government expenditure. Government spending in Wales as a share of GDP has been 57.4% in 2007/8. The comparable figure for London (with plenty of government activity!) was 37%. That's a 20 percentage point gap between the two areas.

But look more closely and the figures reveal an even more shocking picture. Wales also lags behind in terms of productivity. The gross added value in Wales compared to the whole of the UK (100) is 74, leaving Wales way behind any other region as one of the least productive of the UK.

How difficult it is to break out of this vicious cycle of enormous government expenditure and low economic activity has sparked a lively discussion amongst economists and policy makers. The only person who seems to show little interest in tackling the deep seated problems of Wales is the First Minister himself, Carwin Jones, who explained in a recent interview with the BBC that, I paraphrase, everything is just peachy and, once Wales will have internet broadband in 2015, she will pull ahead of the other home nations (at 43 mins into the interview).

The poor performance of Carwin Jones as a First Minister and his government is widely acknowledged amongst commentators and reveals one fact above all. They still have no strategy how to pull Wales out of this mess which they have permitted to develop over the last 12 years in power. There are plenty of possible solutions. None of them however appeal to Labour politicians since they would damage their long term electoral strategy in Wales. The most attractive way out of the situation would of course be to shrink the public sector and to free up governmental expenditure to invest in the upgrading of infrastructure in Wales. There can be no doubt that the current ratio of governmental spending stifles private investment and economic activity. The state in Wales has become the Leviathan that devours all else.

The other way to improve Wales' economic future would be to stop introducing petty legislation through the Welsh Assembly. Since the Labour dominated Welsh Assembly has been created it has either idled its way through the decade or engaged in matters, at best, peripheral to the state of the economy, at worst, detrimental to its growth prospects. Part of the explanation is that Welsh Assembly members of all parties are of fairly low calibre. Any politician with political talent tries to get a Welsh seat for the House of Commons rather than wasting their time in the Welsh Assembly. With a severely restricted talent tool for the Welsh Assembly, debates are often either painfully partisan and tribal, or focussed on politicians' pet projects such as the organ donor legislation or legislation to make it compulsory to install sprinkler systems in newly built houses. Needless to say that neither of those are of any consequence to the Welsh economy.

The main response of the Welsh Government so far has been to blame others for the state of Wales. Carwin Jones and his Labour ministers are habitually pointing the finger at Westminster when they are criticised for their poor performance. It is London, so their story goes, who should shoulder the blame. The statistics however belie this argument as a cheap attempt to avoid taking responsibility for their own actions. Wales receives much more from the treasury than it puts into the coffers of the chancellor. In 2006/7, according to official figures, £19.3 billion were raised in taxes and duties in Wales, whilst governmental spending reached £28.2 bn in the same year. Which makes Wales a net recipient of public money.

It seems that as long as the Welsh Government is in denial about its own responsibility for the devastating economic situation in Wales and as long as the Labour party clings to the mirage that public sector employment is the only way to tackle socio-economic deprivation, little will change in the land of Glyndwr.