Embed Size (px)
Citation preview
www.weru.org.uk
Holtham: The Right Answer to the Wrong Question?
Dr Calvin JonesWelsh Economy Research UnitCardiff Business School
Financing Devolved Government Pierhead Building, Cardiff, January 21st 2011
www.weru.org.uk
Rule 1
Get your apologies in first
www.weru.org.uk
Contention
The Holtham Report and the form of governance it represents are deeply flawed in their conceptual approach, and in ways which ensure devolution can never fully play its part in maximising the welfare of the citizens of Wales.
www.weru.org.uk
The Cheek! Why?
The Commission’s terms of reference were to:
i) look at the pros and cons of the present formula-based approach to the distribution of public expenditure resources to the Welsh Assembly Government; and
ii) identify possible alternative funding mechanisms including the scope for the Welsh Assembly Government to have tax varying powers as well as greater powers to borrow.
www.weru.org.uk
The Cheek! Why?
The Commission’s terms of reference were to:
i) look at the pros and cons of the present formula-based approach to the distribution of public expenditure resources to the Welsh Assembly Government; and
ii) identify possible alternative funding mechanisms including the scope for the Welsh Assembly Government to have tax varying powers as well as greater powers to borrow.
www.weru.org.uk
The Conceptual Approach
Implication that Barnett matters greatly to Wales (cf. level of resources & political capital employed)
Lack of focus on likely welfare impacts of (slightly) greater fiscal devolution
Where’s the hypothesis and research question?
Incrementalism
v
‘preferred future’
www.weru.org.uk
The (understandable) Limitations of Holtham
Do we now know…
What is the ‘best’ form of government for Wales?
Is Holtham (phase 1&2) implementation the end of the process or an important way-station?
Is ‘a bit more’ accountability better than none (evidence on fiscal decentralisation & full fiscal devolution)?
How does Holtham link to settlements in other parts of the UK?
Was the commissioning of Holtham tactically astute?
www.weru.org.uk
The More Worrying Limitations of Incrementalism
Q: What is Wales’ preferred future?
www.weru.org.uk
www.weru.org.uk
www.weru.org.uk
www.weru.org.uk
www.weru.org.uk
Funding & Welfare
Probably none of the foregoing can be delivered under the current tax & spend regime, or any small variant of it,
The Holtham brief did not extend to considering how current settlement impacts on policy delivery
A priori, there is a disconnect between stated goals and available levers that Holtham does nothing to consider or solve…
www.weru.org.uk
Ah, you say, that’s Someone Else’s Problem*
Funding Settlement
Two year, high profile Commission involving internationally renowned economists inc. member of MPC, and with substantial support from WAG to deliver thoroughgoing, detailed & defensible report on status and options.
Energy Policy
© Douglas Adams
www.weru.org.uk
Ah, you say, that’s Someone Else’s Problem*
Funding Settlement
Two year, high profile Commission involving internationally renowned economists inc. member of MPC, and with substantial support from WAG to deliver thoroughgoing, detailed & defensible report on status and options.
Energy Policy Devolution
We asked.
They said no.
We asked again.
They said no again.
© Douglas Adams
www.weru.org.uk
So what if we get Holtham?
£300m + per annum
~2% of the devolved budget
£100 per man, woman and child
50% more than ERDF Objective 1/Convergence Funding
www.weru.org.uk
So what if we get Holtham?
£300m + per annum
~2% of the devolved budget
£100 per man, woman and child
50% more than ERDF Objective 1/Convergence Funding
Insignificant? No. Transformative? No.
www.weru.org.uk
OK, Enough of the Negativity: What is to be Done?
Welfare-increasing Policy Objective
Cut child deaths & SI from road traffic accidents by 90%
Evidence based required action
20mph blanket urban limit, 50mph rural
Implications, cost/benefit & barriers?
Electoral, time costs competitiveness, NHS savings, ethical etc.
Do we have the guts?
Revise policy
Fully devolved?
Save lives
Constantly, visibly hassle
Westminster &
Whitehall
www.weru.org.uk
OK, Enough of the Negativity: What is to be Done?
Welfare-increasing Policy Objective
Decarbonise Energy & economic production
Evidence based required action Carbon tax
Implications, cost/benefit & barriers?
Loss short term competitiveness /employment. Medium/long term competitive climate, & fuel poverty /security advantages
Do we have the guts?
Revise policy
Fully devolved?
Go green
Constantly, visibly hassle
Westminster &
Whitehall
www.weru.org.uk
Conclusion
Holtham has had so much traction & attention because it matters to politicians, the Welsh intelligentsia & ‘civil society’. i.e. us.
Elevation of devolution/funding issues (& here subsuming of important economic issues into political context) risks further disconnect & less focus on how settlement impacts on regional welfare.
www.weru.org.uk
Conclusion
Simultaneously, austerity™ has reinforced a focus on ‘frontline’ service provision at the expense of the economic and environmental/energy interventions and infrastructure development that might serve to protect welfare into the medium term
Excessive focus on funding of devolution (& now lawmaking powers) distracts from impact and potential for devolution – which may be large
www.weru.org.uk
[email protected] www.weru.org.uk
“We know what happens to people who stay in the middle of the road. They get run
down.” Aneurin Bevan
Thanks for listening
