Monday, February 28, 2011


I have just finished Martin Shipton’s new book “A Poor Man’s Parliament”, a chronological history of the National Assembly for Wales from our leading political journalist.

It is an excellent read and is highly recommended to anyone with even just a passing interest in Welsh politics.

However, it is also a largely depressing account, especially in terms of the stories of incompetence, misadministration and bullying amongst our political classes during the last twelve years.

Clearly, the National Assembly is no longer the new shining democracy that we all wanted to see flourish in Wales after 1999.

Unless I have read the book incorrectly, much of the blame for the way that the Assembly has turned out is laid firmly at the door of the Labour Party in Wales, whose leaders have put their own internal political needs before those of the nation.

Time and time again, Martin demonstrates how Labour were more interested in balancing the internal divisions between different factions rather than focusing on what could transform the nation for the better.

The original vision of “the brightest and the best” seems to have been largely replaced by one of incompetent mediocrity both within the political classes and the civil service with predictable results for the health, education and economy of this nation.

However, the most telling phrase in the whole book, and one which demonstrates the bunker mentality of the last three Labour-led Governments, is the one in which Martin discusses the culture of fear which exists amongst those who deal with the Assembly Government.

“Too many people were frightened to criticise the Assembly Government openly, either because they thought their organisations would be victimised financially or that they themselves would be branded as mavericks or troublemakers, possibly to their material disadvantage.”

Is that really the sort of Stalinist nation we want to live in?

In my opinion, any Minister who abuses their position in such a way should be immediately sacked. The stocks would be too good for anyone who abuses the democratic rights of the citizens of Wales to express their opinions without fear of reprisals. However, as Martin demonstrates in the case of at least one Minister, the punishment rarely fits the crime.

Voltaire’s dictum (“I disapprove of your views, but would fight to the death for your right to express them”) should be a key component of the Ministerial Code and imprinted in large letters above every entrance to the Assembly Debating Chamber. It is something that very few in the Labour Party in Wales seems to have practiced, at least during the last twelve years of devolution.

A Poor Man’s Parliament is one that is well worth reading but more importantly, it emphasises the importance of a strong and independent press and the fearless approach of rare individuals such as Martin Shipton.

Read it if you can.

Saturday, February 26, 2011


For the last two years, I have been chairing the Welsh Conservatives’ Economic Commission.
This was created to develop policies that would drive forward the economy of Wales, currently languishing at the bottom of the UK prosperity league table.

During the Commission’s period of review, the UK economy was hit by the deepest recession since the 1920s, with over 88,000 private sector jobs lost in Wales during this economic downturn.

The Commission therefore had to change its focus not only on revitalising the economy of Wales but also on examining how the business sector could be supported to recover from the recession.

Last week, the Commission published its set of recommendations, aptly called “The Challenge” which it believes could make a real difference to the overall economy of Wales over the next decade.

The overriding philosophy of our approach is that the Welsh economy must be driven by the private sector and every business in Wales has a vital part to play in that.

That is why the Commission believes that business rates should be permanently abolished for the majority of small firms across Wales and that any financial levers, such as grants, to encourage business growth should be available to all firms, regardless of the sector in which they operate.

After the failure of three successive Assembly Governments led by Labour, we need to encourage entrepreneurship and innovation to create a flourishing Welsh economy that is driven by the skills and talents of its people.

In particular, we need to maximise the potential of the SME sector in Wales, from the small local corner shop that may benefit from lower business rates and take on an extra employee to a new high technology spin-off that is selling its products internationally.

We also need to ensure that large businesses attracted to Wales, especially those from the manufacturing sector, are firmly embedded within a new innovation ecosystem.

We are recommending that Welsh Conservatives should lobby for the new high speed rail link to be built from London to South Wales and that there may be a better case for this line to be upgraded prior to the proposed Birmingham-Manchester high speed line.

Wales also needs to ensure that it fully takes advantage of the benefit obtained from any UK Government support for superfast broadband infrastructure.

We believe that business development and skills should be directed by one Minister so as to ensure a clear direction for the development of the Welsh economy, one that hitherto has been missing from government.

More relevantly, that provision must ensure that any form of business development or support mirrors the needs of the business and is flexible enough to be able to respond to the dynamic that comes with an enterprising culture.

However, our main recommendation is that the reduction of corporation tax for Welsh businesses which we believe is the radical step required following years of economic decline.

In order to spur investment by Welsh-based companies and attract high value added foreign direct investment, we believe that the UK government should be lobbied for a reduced corporation tax rate for Wales as this is the only major economic structural change that can lift the Welsh economy from the bottom of the UK prosperity league table.

Recently, there have been calls from the private sector for corporation tax to be reduced within another devolved region of the UK.

Last year, the Northern Ireland Economic Reform Group of senior economists, accountants and business interests launched a major report on reduced corporation tax for the province.

It concluded that “reduced corporation tax is the fastest way we know to revitalise the Northern Ireland economy” and estimated “that more than 90,000 extra jobs could be created over 20 years and that the subvention could be cut at a relatively small cost to public expenditure”.

This was followed by a further study from the accountants PWC that noted that “as economies with relatively large public sectors in an environment where UK public spending is to be cut, the status quo with respect to policy (including continuation of the Treasury’s traditional one size fits all approach to taxation across the UK) will simply doom Northern Ireland, Scotland and Wales to fall further behind the UK average”.

The UK Coalition Government has already indicated that it may be willing to consider a regional tax approach after offering new firms based outside the three most prosperous regions in the UK a £900 million tax break i.e. any company set up outside London, the South East of England and East England will not have to pay employer National Insurance contributions (NICs) for the first ten employees taken on during its first year in business.

Given that the reduction in NICs for new firms has been regionally focused, there is no reason as to why other future tax measures may also focus on those parts of the UK in greatest need of support i.e. those areas that are overly dependent on the public sector and desperately need private sector jobs.

With Wales remaining at the bottom of the UK prosperity league table, any measure that directly helps those running Welsh businesses cannot come quickly enough.

The Commission therefore proposes that the next Welsh Assembly Government should seek immediate and urgent discussions with the UK Government and the other devolved administrations about the feasibility of reducing corporation tax in Wales to encourage investment and create vital employment at a time when the economy is recovering from recession.

This, in the opinion of the Commission, is the only major policy that can engender the massive step change needed to turn around the nation’s economic fortunes and ensure that Wales stops propping up the UK economic league table.

Thursday, February 24, 2011


Yesterday, Eurostat released the latest data on GDP per inhabitant, expressed in terms of purchasing power standards, in the EU27's regions. The data shows that West Wales and the Valleys has now declined to 71 per cent of the EU average, the lowest of any part of the UK.

In 2000, the level was 76 per cent and since then, we have had the poorer countries of the former Central and Eastern Europe joined the European Union and yet the relative GDP per inhabitant has continued to decrease. Given this, it is likely that West Wales and the Valleys will, for the third time, qualify for the highest level of European Structural Funding.

I have already written on this previously and my answers to the Enterprise and Learning Committee of the National Assembly for Wales last month on the same subject can be seen here.

Whilst some politicians remain in denial about the worsening economic state of West Wales and the Valleys, the map above is testament to the shameful performance of our poorest region during the last decade and the situation we now find ourselves in. All the areas in yellow are poorer than West Wales and the Valleys in 2008 whilst all those in brown are more prosperous. 

The question here is where the billions of pounds of public and structural funding in West Wales Valleys has gone over this period and why, despite the membership of poorer regions such as Bulgaria and Romania in 2007, its relative performance continues to fall? 

Surely, with all these resources at our disposal, we can do better than this? 

Tuesday, February 22, 2011


Today, the Welsh Conservatives' Economic Commission releases "The Challenge", its report on the future for the Welsh economy.

The Commission was established in 2008 to develop policies that would drive forward the economy of Wales, currently languishing at the bottom of the UK prosperity league table.

During the Commission’s period of review, the UK economy was hit by the deepest recession since the 1920s, with over 88,000 private sector jobs lost in Wales during this economic downturn.

The Commission therefore had to change its focus not only on revitalising the economy of Wales but also on examining how the business sector could be supported to recover from the recession. Therefore,  the recommendations contained in this document reflect the main priorities that the Commission believes could make a real difference to the overall economy of Wales over the next decade.

Over the next few days, I will be posting more details of the individual recommendations from the report. The Western Mail has already gone big on the main recommendation today. However, for now, here is the summary of what we think should be implemented to revitalise the Welsh economy:

CORPORATION TAX - If elected, the Welsh Conservative Party should seek immediate discussions with the UK Government and the other devolved administrations about the feasibility of reducing corporation tax in Wales to encourage investment and create vital employment at a time when the economy is recovering from recession.

BUSINESS RATES - A part of the economic development department's budget should be used to directly support rate reductions for the vast majority of small firms in Wales. This will ensure that no small business having a rateable value of less than £12,000 will pay business rates in Wales.

BUSINESS PARTNERSHIP COUNCIL – The BPC should be reformed and made formally responsible for agreeing and measuring strategic economic development objectives. The First Minister and a senior representative from the Welsh community would jointly chair it, demonstrating the importance of government and business working together for the future of our economy.

WORKING WITH THE PRIVATE SECTOR - The Welsh Assembly Government must ensure that the private sector is fully involved in delivering its strategies. Opportunities should be created for Welsh businesses to work more closely with the public sector and ensure that the private sector can play a major role in improving public services and, more importantly, create wealth and employment in the economy as a result of this involvement.

FUNDING FOR SMALL BUSINESS - Unlike the narrow sectoral approach of the current Labour-Plaid Government, the Welsh Conservative Party should make the new repayable grant system available to all sectors of the Welsh economy and all sizes of businesses.  It is vital, as the nation struggles to come out of recession, that every business that needs finance to grow and create employment within their local economies is given every opportunity to do so. However, this should not mean abandoning SMEs within our poorest communities and, in particular, there will still be a need for grants in the Convergence region of Wales, especially for start-ups and for innovation-based projects that are higher risk and would not be in a position to agree terms on repayable loans.

PUBLIC PROCUREMENT - A proactive culture of preference for Welsh companies should be encouraged within public procurement practices to help develop the indigenous SME sector.  The Commission therefore recommends that WAG should set targets, as the US Federal Government has done through its Office of Government Contracting, for spending its annual budget with local small firms.

SMALL BUSINESS SUPPORT - All business support services should be contracted out but those deliverers should fully accountable for results and contracts withdrawn if they are not delivered.  All support to business will also be merged into one central contracting service, such as the human resource development advice that is currently based in DCELLS and the support for tourism businesses that is currently within the Department for Heritage. This will minimise duplication of business services and cut down on red tape.

ENTREPRENEURSHIP – The private sector led Entrepreneurship Action Plan should be reintroduced to act as a focal point for encouraging new business start-ups across Wales and in developing social enterprise as a key part of the delivery of that strategy.

REVITALISING MANUFACTURING - The Commission believes that a coherent approach by WAG could herald a revival for manufacturing again, especially if companies have the right management, the right products and the right skills in place, and the exchange rate remains competitive to drive export activity. The Welsh Conservatives should therefore look to implement the manufacturing strategy for Wales immediately and provide support for the manufacturing sector to develop in the future.

STIMULATING INNOVATION - If Wales is to improve its innovation performance over time then the sum of the parts – government, industry and academia – must be greater than the whole. Therefore, the Welsh Conservatives should look to establish a Welsh regional innovation system, which will be directed under a separate private sector led Innovation Council for Wales.

GOING INTERNATIONAL - New policies in Wales should be developed to identify and map key global communities of practice, and then make companies better aware of these communities. International network development should be supported and there should also be an increased focus on internationalisation as the economy needs more firms to consider markets outside Wales if they are to grow, including greater co-operation with UKTI.

SKILLS - Business development and skills should go hand in hand within any enterprise support network and there should be a seamless approach by government to the delivery of support in this area. The Welsh Conservatives should therefore create a new Department for Business and Skills that will enable a clear strategic approach to be adopted.

HIGH SPEED RAIL LINKS - Given the years of underinvestment into the rail network in Wales, the Commission believes that the Welsh Conservatives should work alongside colleagues in the South West of England to lobby the government to make the Great Western line a priority for new high speed infrastructure investment.

HIGH SPEED BROADBAND - It is critical that the Welsh Assembly Government ensures that every community in Wales receives the promised UK Government funds to build a "digital hub" with a fibre optic internet connection in every community by 2015. WAG should also explore a number of options to deliver super broadband solutions across Wales, such as working alongside smaller companies in the marketplace, many of whom can offer a more competitive price than telecommunications giants, especially if they are allowed to run their own cables through existing ducts and telegraph poles.


Earlier this month, this blog examined the current state of European Structural Funding in Wales.

As the Welsh Assembly Government’s own data suggested, the £1.9 billion funding still has a long way to go to make a real step change to the economy of Wales, especially within our poorer communities.

However, whilst much of the policy focus in Wales on European grants has been on Convergence funding, there has been little focus on the multi-billion pound programmes run centrally by the European Commission.

That is why the recent inquiry by the National Assembly for Wales’ European and External Affairs Committee into Welsh participation in European Union programmes is to be welcomed. Focusing on the 7th Framework Programme for Research and Technological Development (FP7), the Lifelong Learning Programmes and the Competitiveness and Innovation Framework Programme, the committee examined how Wales was utilising the 60 billion euro budget available for these three key initiatives between 2007 and 2013.

As someone who has previously been involved in managing projects funded by these programmes, this report is long overdue. Having worked in Ireland in the 1990s, I saw, at first hand, how Irish business and academia took seriously the opportunities presented by these initiatives, especially in boosting their competiveness through research and innovation.

So what has been the performance of Wales within these programmes? Are we really taking advantage of the funding that could be made available to help the economy?

Unfortunately, the data seems to suggest that whilst has received 39 million euros under the FP7 programme, this amounts to only 2.1 per cent of the total funding received by organizations in the UK.

If Wales had received the amount of funding that it should get as proportion of it population, then another 50 million euros would have been allocated to research projects within Wales.
One could argue that Wales may be handicapped by being a small region and that it could not compete with the more prosperous parts of Europe where there is a higher concentration of research active organizations able and willing to take advantage of such funding.

Yet, research into the previous round of the Framework programme showed that whilst the amount of EU funding per head of population received by Wales was 16 euros, in Catalonia it was 185 euros and for Brittany, it was 218 euros. Flanders, with a population just over twice that of Wales, received three and half times more funding through the 6th Framework programme, an amount equivalent to 352 million euros.

Why is this happening? Why is Wales not taking advantage of this multi billion pound funding opportunity?

One of the key issues recognised by the Committee is that collaboration between industry and academia appears relatively weakly developed in Wales. In particular, the so called “triple helix” model – where government, academia and industry work closely together - and which is strongly advocated within programmes, is found to be a very rare occurrence within the Welsh economy.

Another suggestion as to why Wales is punching well below its weight could be, paradoxically, the access to European Structural Funding and the report points out that there has been a tendency to concentrate on Structural Funds as opposed to transnational EU programmes. For example, Swansea University has only received £4.1 million from FP7 as compared to £55 million from Convergence funding.

So what were the key recommendations from the committee as to how Wales can help can take full advantage of this funding to help develop the economy?

The most relevant, and obvious, suggestion is that there needs to be a far more strategic approach to how Wales can access all programmes funded by the European Union. Clearly, the Welsh Assembly Government can influence this process but so can the six new industry panels formed under the Economic Renewal programme, all of which have the clout to focus on the multi-billion pound programmes that directly affect their sectors.

In addition, the committee suggested that there seemed to very little information on EU funding opportunities available to potential bidders and, more relevantly, very little support to help applicants through the labyrinth of documents that make up the administration of many EU programmes.

Certainly, I believe that given the European programme expertise that already exists within many higher education institutions in Wales, this role could be taken on by the universities that could be far more proactive in helping local businesses to access these programmes.

However, the most important issue for anyone involved in any EU programmes is the issue of partnership, as most programmes have to have participants from at least two EU countries.
This is where the Welsh Assembly Government could also play a role, by identifying similar regions across Europe and developing formal partnerships that, together, could bid for the billions of pounds of European support.

After all, if Wales doesn’t get it act together to bid for this multi billion pound pot of money in the future, other parts of Europe certainly will.

Monday, February 21, 2011


Why does the Welsh press bother reporting anything that Peter Hain says any more?

I know he really can’t help himself but surely it is time for reporters in Wales to start questioning the constant stream of distortion that emerges from the mouth of the former Secretary of State for Wales.

Yesterday, he outdid himself when he stated that the issue of under-funding for Wales had only recently become an issue.

To quote,

“By acknowledging that the Barnett Formula is only now beginning to disadvantage Wales for the first time, it shows we were right to stick with it up until last year. The under-funding we are now seeing is due to the broken promises and inaction of the Tory-led Government.”

So, according to Peter Hain, there has been no disadvantage from the Barnett formula or underfunding in Wales until the current UK Coalition Government came to power.

I know the MP for Neath will never let the facts get in the way of his loathing of any other political party save Labour, but he really should read the findings of the Holtham Commission first before making such crass statements if he to salvage what is left of his political credibility.

For example, the Commission’s first report stated that

“Despite being applied to Wales since 1980, there is not much evidence of a Barnett-driven squeeze in spending prior to the establishment of the National Assembly for Wales in 1999 but there is clear evidence of convergence in recent years. In 1999-00, spending per head in Wales on Barnett-funded programmes was 25 per cent higher than spending per head on comparable programmes in England, or 125 in index notation, where England is set at 100. At present (in 2009-10), Barnett funded expenditure per head in Wales is 113, and is expected to decline to 112 in 2010-11. In other words, the gap in spending per head between Wales and England will have roughly halved since the introduction of devolved government.”

The graph above (which shows Wales’s relative expenditure per head on programmes covered by the Barnett Formula (England = 100) 1994-2011) is a timely reminder that in the period of office between 1997 and 2010, Labour did nothing to change the current funding system. In fact, and despite Gerry Holtham’s review, the evidence suggests that it is highly doubtful that a thorough review of Barnett would have been prioritised by Labour in Westminster if they had won the election.

For example, Liam Byrne, then Chief Secretary to the Treasury went on record in February 2010 to state that Labour had no plans to reform the Barnett formula: “Wales is well funded. Identifiable public spending per head in Wales is 14% above England and in the 2007 Comprehensive Spending Review, the Welsh Assembly Government received an annual average real terms increase of 2.4% compared to the UK average of 2.1%... The Government has no plans to change the Barnett formula."

Carwyn Jones himself admitted that, back in April 2010, that  “The (Labour) manifesto doesn’t include a commitment to scrap Barnett.” This is not surprising as the current Shadow Chancellor, Ed Balls, went on record last July ruled out backing a change to the way Wales is funded, stating that the controversial Barnett Formula was not unfair despite experts saying it robs Wales of £300m a year.

In fact, if the Labour Party is so committed to Barnett reform as a key policy priority, then why was it not mentioned once by Ed Miliband in his speech to the Labour Party conference? In fact, Labour's new leader showed his commitment to Wales by using the platform in Llandudno to attack NHS reform in England and demonstrating little understanding of devolution.

It may be easy political points scoring to attack the UK Coalition Government after only nine months in power but Peter Hain and the Labour Party had thirteen years in which to change the Barnett formula and did  nothing.

Perhaps it is time for the Welsh media to start reminding him of that simple fact.

Friday, February 18, 2011


Has the HE sector now finally been sorted out in Wales?

Last week, we had the merger agreement between Trinity St David’s, Swansea Metropolitan University, UWIC and the University of Wales announced to the surprise of many in the sector.

Then, in an interview in the Daily Post, the new Vice Chancellor of Bangor, John Hughes, stated that

“What we're currently doing and the steer we've been given from the department and HEFCW is that we should be forming a strategic alliance with Aberystwyth but short of a merger”.

And today, it has been reported that Glyndwr University is exploring the potential for greater partnerships with further education colleges across North Wales.

That, therefore, leaves the fate of four universities undecided.

For Newport, there are a number of options open, which include joining the new University of Wales, replicating Glyndwr’s link with further education in Gwent or, as is probably likely, merging with the University of Glamorgan.

If all these mergers and alliances go ahead as planned, Swansea University will become the smallest university in Wales.

So, as some have been whispering in the corridors of higher education, one of the few options left could be a strategic link up with Cardiff University, on the lines of the Bangor-Aberystwyth alliance, to create a major research-led powerhouse in Wales.

That would then leave five university groupings in Wales (albeit with seven vice chancellors) although given last week’s historic decision on the new University of Wales which caught policymakers and politicians by surprise, anything could yet happen over the next few weeks.


Yesterday, the Labour Party in Wales “pledged to create 4,000 jobs placements a year to ensure there will be no “lost generation” in Wales as the nation struggles with the impact of the recession and public spending cuts.”

According to a report in the Western Mail, the Welsh Jobs Fund promises to offer “a real job” to the hardest-hit young people who are struggling to find work.

Allegedly, Huw Lewis, the Labour AM for Merthyr Tydfil and Rhymney, “punched the air” with excitement when he head about the policy. He said: “I thought ‘This is fantastic. It’s just the sort of thing a constituency like mine is crying out for.’”

Yet whilst Labour tries to paint the issue of youth unemployment as something that is a direct result of recent UK Government policies, the statistics show a very different picture.

The graph below shows the proportion of 18-24 year olds that make up the claimant count in Merthyr Tydfil.

It demonstrates that, contrary to the views of the Welsh Labour Party, there has always been a major problem with youth claimant counts in the constituency.

More relevantly, there has been, under the last three Labour-led Assembly Governments, a policy failure in dealing with this issue. In fact, the current rate of 33.4 per cent for January 2011 is in stark contrast to the 42.8 per cent recorded in May 2007. There are also 190 fewer young people as claimants in Merthyr in January 2011 as compared to September 2009.

I do not doubt Huw’s passion for his constituency and his campaign for the Labour leadership had more ideas that the other two candidates put together. But these statistics show, as they do for the whole of Wales, that this is not something that has happened overnight.

In fact, there has been a systemic failure to deal with the problems of youth unemployment in Wales over a number of years.

One could argue that, despite having access to billions of pounds of European funding, there has been a failure to make any real difference to constiutencies such as Merthyr Tydfil with high levels of deprivation.

Given this, I would suggest that Huw should have a word with the Deputy First Minister on why only 95 gross new jobs have been created in his constituency since 2007 through the use of European Structural Funding and only 67 businesses assisted.

That is the real failure within Merthyr Tydfil.

Wednesday, February 16, 2011


So it would seem that, in the early hours of this morning, the House of Lords finally passed the bill introducing a referendum on the alternative vote by 221 to 153.

As well as ensuring that a vote takes place on May 5th on the voting system in the UK, the bill has also ensured the number of MPs in the House of Commons will also be reduced from 650 to 600.

In Wales, this will mean that the number of parliamentary constituencies will be reduced by 25 per cent.

Of course, during the last few weeks, we have seen a parade of speeches by Welsh Labour MPs against the bill which, given that they have the most to lose, will not have shocked anyone.

However, given the growing importance of the National Assembly for Wales, the question is what the consequences of this bill will be for our fledgling democracy?

If the number of parliamentary "first past the post" seats is reduced to thirty, then it makes sense for the same reduction to take place within the Assembly so as to maintain the link between representation in both elected bodies.

However, that can only mean that the number of regional seats across Wales will have to increase to compensate for this change. As a result, each of the five regional constituencies will gain two further members.

What effect will this have on democracy in Wales?

Will this give opportunities to smaller parties, such as the Green Party or UKIP, to gain their first seats in the National Assembly via the regional lists? More worryingly, could the BNP, make a breakthrough via this system?

Overall, given that it is parties other than Labour that have done well out of the regional seat arrangement, could it mean that the Labour Party will never again achieve a majority in the Assembly and that coalition government in Wales will become a permanent feature of the National Assembly?

It would seem that the referendum bill may have far more consequences for Wales beyond the reduction in the number of Labour MPs.

Monday, February 14, 2011


Last Thursday, I was asked before the Assembly’s Enterprise and Learning Committee to give a paper on the implementation of the 2007-13 European Structural programmes.

During the session, I not only reviewed the performance of the current programmes of Convergence and Competitiveness funding received by Wales for the period 2007-13, but also the previous programme of support that was available during the period 2000-06, especially the Objective One programme for West Wales and the Valleys.

While some politicians would like to think that the management of the Objective One programme has been a unqualified success, the statistics show that, despite £2bn of European and public money being spent in the region over seven years, its economic performance relative to the rest of the UK declined by 3.1%.

In contrast, the other three UK regions in receipt of Objective One funding grew over the same period – Cornwall increased its relative prosperity by 9%, South Yorkshire by 1.9% and Merseyside by 0.3%.

Given this, it was not surprising that West Wales and the Valleys qualified for a second round of European funding for the period 2007-13.

In addition, the rest of Wales also qualified for so-called competitiveness funding to help develop business and skills within the more prosperous areas of the nation. In total, this amounts to around £1.9bn of European funding across Wales, to be matched by private and public finance.

So what has been the progress of these new funding programmes? Are they having a real effect on the performance of Wales plc?

According to the Welsh European Funding office (WEFO), a total 208 projects have been approved to date, which are able to draw down EU funds of £1.47bn. This represents a total project investment of more than £3bn.

However, allocating money to projects is one thing. Making sure that money has a real effect on the economy of Wales is another.

For example, WEFO’s latest data shows that 5,343 jobs have been created as a result of European Structural Funds. Of these, 3,956 jobs have been created in the Convergence region and 1,387 jobs in the Competitiveness region. However, this is compared to an overall target of 35,540 new jobs i.e. after four years of the programme, only 15% of the jobs target has been reached by the projects funded.

Of course, it is generally appreciated that the programme has been extremely slow in getting projects approved and most of the initiatives funded have only just started to be delivered. Nevertheless, it means that, during the next five years, more than 30,000 jobs remain to be created by the various projects approved.

However, the job creating performance across Wales is not even.

For example, the Competitiveness Fund for East Wales – which covers areas such as Cardiff, Wrexham, Flintshire, Powys and Newport – has hit 66% of its gross jobs created target as compared to only 10% for the Convergence Programme. Indeed, while East Wales only has access to 6% of the funding available to West Wales and the Valleys, the Competitiveness programme has generated a quarter of all the jobs supported by European money (with 361 jobs created in Cardiff alone).

Within the Convergence region itself, 476 jobs have been created in Swansea (or 12% of the total). In contrast, the Convergence counties with the lowest level of job creation to date are Merthyr Tydfil (95 jobs), Conwy (102 jobs) and Blaenau Gwent (126 jobs)

A similar result is found in relation to new business creation.

To date, 1,304 enterprises have been created across Wales as a result of European Structural Funds as compared to an overall target of 5,544 new enterprises. Of these, a third (439 new firms) have been created in the Competitiveness area, with Cardiff, Newport and Powys in the five top counties for new enterprises. Again, we see a major difference in performance with East Wales already achieving 86% of the target for enterprises created as compared to 17% for West Wales and the Valleys.

Within the convergence region, Swansea has created the most businesses (117), and the counties with the worst entrepreneurial performance are Blaenau Gwent (23 new firms) and Denbighshire (32).

Therefore, much remains to be done in terms of job creation and entrepreneurial performance of our poorest region, especially as European funding seems to be utilised far more effectively in the more prosperous parts of Wales.

It could be argued that this difference in performance reflects the capacity of both parts of Wales to be able to utilise the funds effectively.

On the other hand, differences in the types of programmes supported and the way they are implemented within each region could be having an effect.

Whatever the explanation, such a massive difference in performance should give Welsh policymakers cause for concern, especially as it is critical that this funding should be having a real and positive effect on our most deprived communities.

Friday, February 11, 2011


The University of Wales was invited to attend an OECD workshop last year on the role of universities and strategic partnerships in the local and global context.

Some of the themes discussed included how to successfully manage opportunities; threats in public and private funding; attractiveness and internationalisation; and how to balance global linkages with local success.

Dr Niall Mackenzie, Research Fellow at the University of Wales and Director of the Institute for Innovation Studies, contributed to the programme.

His discussion can be seen 2 minutes and 40 seconds into the video.

Thursday, February 10, 2011


To donate to the "A Star For Burton" Appeal Fund, go to the and search for Star for Burton. This will take you to the website for the campaign which will guide you on how to make an online donation.

More details on the Star for Burton campaign can found at

Monday, February 7, 2011


There is clearly a battle being conducted for the hearts and minds of the general public when it comes to which strategy should be adopted to deal with the economic problems currently facing this country as it emerges from the aftershocks of the last recession.

Whilst most of the business community is broadly supportive of the UK Government’s decision to focus on reducing the deficit, it is becoming clear that the trade union movement is quickly becoming the vocal opposition to the reductions in government expenditure.

Of course, the problem is that when political imperatives take over from the reality of the situation, it can result in some disputable and emotional claims being made by both sides of the argument.

Take, for example, a press release that was distributed by the GMB Union last week.

Quoting an analysis of the latest data on youth unemployment, it stated that Wales had proportionally more young people claiming benefit than any other region of the UK i.e. for Wales as a whole there were 70,065 claimants of all ages in December 2010.

Of these, 23,150 claimants were aged between 18 and 24 (which equates to 33 per cent of all claimants).
The fact that a third of all those claiming job seekers allowance were young people could be argued to be news in itself but the GMB then went on to claim that “young workers are the real economic victims of this banker’s (sic) recession with the government in denial that it is deliberately causing unemployment”.

That is a very bold statement to make but, unfortunately, just didn’t ring true.

So, I therefore went back to the Office for National Statistics to compare these figures with previous years for youth unemployment.

What I found was startlingly different to the claims of the GMB.
18-24 year olds as a proportion of claimant count May 1997-Dec 2010, Wales.
According to official government statistics, there has actually been a gradual increase in the proportion of young people in Wales that make up the claimant count register since 2005, reaching a peak of 38 per cent in September 2008 under the last Government.

However, it has been falling since the general election and the 33 per cent recorded in December 2010 is lower than for any month between December 2004 and May 2010.

The same trend can be seen nationally at a UK level.

There are currently 92,905 fewer young claimants than the peak of 491,925 recorded under the Labour Government in February 2010.

In addition, the number of young claimants in the UK has been falling since it rose briefly in the summer of 2010 and there are currently 23,455 fewer claimants in the UK aged between 18 and 24 than recorded three months ago.

Just in case these findings were a blip in the statistics, I also examined how many young people had been claiming benefit for more than six months in both the UK and Wales.

The statistics show that this reached a UK peak of 119,010 on February 2010 and, since then, this has been almost halved to 61,575. In Wales, 10 per cent of all those claiming benefit in March 2010 were young people although it has now been reduced to 5 per cent in December 2010.

What also was of interest was the claim by the GMB that "Rhondda Cynon Taff (RCT) tops Wales league with 37.4 per cent of unemployed claimants aged between 18-24”.

Whilst this is factually correct, the GMB does not mention that, for every month between December 2004 and December 2008, over 40 per cent of claimants in RCT were young people, peaking at 45.3 per cent in July 2007.

Given the way that their risk-driven strategies have partly led to the current economic situation, I have little love for some of the banks and their behaviour, especially over bonuses.

However, it has become all too convenient, in some quarters, to condemn them for all of our current economic ills.

Certainly, the statistics show that, unlike the GMB’s assertion, the proportion of young claimants was higher under the Labour Government for three years prior to the recession. Given this, who should the GMB blame for the higher levels of young claimants prior to the economic downturn?

In fact, an alternative headline could be that "Coalition Government halves youth unemployment in the UK" although I doubt if that will be on any press release in the future!

Despite being proportionally lower than at any time under the last Labour administration, it would be foolhardy of anyone to say that unemployment amongst young people is not a major issue within the economy.

And by trying to pin responsibility on the banks alone for this problem, all the GMB has done is taken the focus away from addressing the other key factors that have led to high levels of youth unemployment within some of our poorest communities.

There is still much that remains to be done to make sure that the private sector, hopefully in partnership with the trade unions, starts to create jobs for young people across the country.

If such a critical issue is to be resolved, then let’s at least have a rational debate based on the facts of the matter, and not on the selective use of statistics that have very little to with a solution to the problem and more about political grandstanding.

Saturday, February 5, 2011

Understanding Loans That are Unsecured

Understanding unsecured loans and debt is a key part of healthy personal finance.

Loans that are not secured do not have a guarantee backed by an asset of comparable value like secured loan does. This means that debt which is unsecured carry more risk for creditors than a comparable secured loan. Thus a unsecured loan carries less of a risk for the borrower. Following this logic, unsecured loans are more costly for consumers.

Creditors that lend via unsecured loans set higher interest rates and sizable fees that the borrower will have to pay. The lender asks for more to hedge the increased risk involved in investing in unsecured debt. If the borrower does not repay the loan as agreed creditors will not be able to seize or collect any type of collateral if the loan is no secured by an asset.

The comparably higher risk associated with unsecured debt derives from two fundamental notions.

  1. The borrower will elect to pay secured debt before unsecured debt.
  2. There is no collateral guarantee to hedge the risk of default.

Types of Unsecured Loans

Below you can find a list of typical unsecured  lending products

  • Personal Loan 
  • Credit Card Accounts
  • Peer to Peer Lending
  • Debt Consolidation Loan
  • Store Financing Loans
  • Some Small Business Loans
  • Some Corporate Loan Debt

Related Articles

Friday, February 4, 2011


I have, along with my fellow authors Piers Thompson and Caleb Kwong, had a paper published in the Regional Studies journal.

Entitled "Entrepreneurship amongst minority language speakers: the case of Wales, Regional Studies" this paper uses data from the Global Entrepreneurship Monitor (GEM) survey to explores the entrepreneurial characteristics of Welsh speakers who live both inside and outside Welsh language clusters, focusing on the extent to which they follow those patterns predicted by theories drawn from the ethnic entrepreneurship field.

The results indicate that whilst fluent Welsh speakers are more likely than non-Welsh speakers to perceive opportunities for business starts and be involved in business starts in non-Welsh-speaking areas, this can be largely explained by differences in environmental and personal characteristics (Regional Studies, Volume 45, Issue 2 February 2011, pp: 219 - 238).

Thursday, February 3, 2011

The Amputee Rap by Josh Sundquist

Hey Guys

This video is really something.

I watched it a few times right from the get go. The guy is a skier, and a published author. Pretty sweet. He has another funny yet dramatic vid in which he turns the first chapter of his book into a self animated cartoon that is pretty well developed as far as YouTube goes.

I really like this guy and think he is someone worth knowing, listening, and watching.

Buy his book!!!!

Wednesday, February 2, 2011


Today, we are launching an appeal to recognise of one Wales' favourite sons, Richard Burton.

This the piece that is appearing in the Western Mail today.

Please give generously.

"His raw talents combined with his famous rich voice made Richard Burton one of the world’s finest – and most famous – actors.

Now, more than a quarter of a century after his death, the celebrated Welshman is finally set to get a star in his honour on the iconic Hollywood Walk of Fame.

A major fundraising campaign is being launched at the Millennium Stadium tomorrow (4th Feb) during the Wales v England Six Nations opener in a bid to get the project off the ground.

Money raised through the “A Star For Burton” Appeal Fund will also go towards creating scholarships for future students of the Royal Welsh College of Music and Drama, where a new theatre has been named in Burton’s honour.

Visited by more than 10 million people every year, the Hollywood Walk of Fame is a series of sidewalks in California honouring the entertainment industry. Brass stars are laid to commemorate actors, musicians, directors, producers, musical and theatrical groups, fictional characters, and others for their entertainment contributions.

The first permanent star to be unveiled was in 1960 for director Stanley Kramer and one of the latest recipients was British actor Colin Firth, whose star was unveiled last month.

Despite Burton’s incredible success both on stage and on the big screen, for which he received seven Oscar nominations, he’s yet to be recognised on the boulevard.

Now the Western Mail has teamed up with the Welsh Rugby Union and the Principality Building Society in a bid to see him commemorated posthumously.

The campaign has already received backing from major Welsh stars, including Hollywood actor Matthew Rhys, and Burton’s actress daughter Kate, who said “I am delighted to support this campaign to recognise my father’s place in Hollywood history. I’m particularly excited that the fundraising will also support scholarships at the Royal Welsh College, particularly as much of that training will centre around the new theatre that will bear his name.”

The campaign is the brainchild of Professor Dylan Jones-Evans, Director of Enterprise and Innovation at the University of Wales and Western Mail columnist.

He said: “After visiting the States a couple of years ago, we were discussing with some friends the Hollywood Walk of Fame. When we discovered that Richard Burton was not honoured it was a big shock. Along with Sir Anthony Hopkins, he's the biggest actor that Wales has produced. I felt that if Burton also had a star it would not only honour the great Welshman but also raise the profile of Wales as millions of people would see it.”

The Hollywood Walk of Fame committee is currently seeking nominations for June, when it will consider who should the new batch of stars. Around 20 are selected from the nominations, including one posthumous honour.

But those behind the nominations must pay $30,000 (around £18,000) which funds installation and maintenance costs.

The Western Mail is now launching a £40,000 fundraising drive – half of the money raised will go towards Burton’s star and the other half will support scholarships at the Royal Welsh College of Music and Drama.

Professor Jones-Evans was keen that any additional money raised was used to help young Welsh talent.
“If Richard Burton were alive today, he would want to support young people from Wales to follow in his footsteps,” he said.

Hilary Boulding, Principal of the Cardiff-based conservatoire, said: “The college is delighted to be a part of this campaign. It seems only fitting that one of Wales’ most famous sons should also have a star on Hollywood Boulevard, while at the same time creating student scholarships in his name for future students at the college.”

The campaign will be launched at the Millennium Stadium tomorrow (February 4th) when collections will be taken at the gates for the A Star For Burton Appeal Fund. A short film about Burton will also be shown to the 72,000 rugby fans before kick off.

It was felt apt that the appeal should be launched at the Six Nations opener as passionate Welshman Burton was a massive rugby fan.

He once famously said: “I would rather have played for Wales at Cardiff Arms Park than Hamlet at the Old Vic.”

Burton was born in Pontrhydyfen, near Port Talbot, in 1925 into a working-class, Welsh-speaking
family and went on to become one of the greatest stage actors, playing everything from Hamlet to Othello, before conquering Hollywood.

His leading roles included My Cousin Rachel, Under Milk Wood and Cleopatra, when he famously met his future wife, Elizabeth Taylor.

How to donate to the A Star For Burton Appeal Fund

By post:
Cheques need to be made payable to: ‘Principality Building Society re: Star for Burton Appeal’. They should be sent to:

Linda Martin, A Star for Burton Appeal Fund, c/o Media Wales, 6 Park Street, Cardiff, CF10 1XR

In person:
You can visit any of the 64 Principality Building Society outlets across Wales and the Borders and tell a member of staff you would like to make a donation to the A Star For Burton Appeal Fund. Once again, cheques need to be made payable to: ‘Principality Building Society re: Star for Burton Appeal’.

Go to and search for Star for Burton. This will take you to the website for the campaign which will guide you on how to make an online donation.

You will need to quote the following details:

Sort code: 20-18-15
Account number: 90653535
Reference: 123943909

It is important to quote the reference number when making an internet transfer.

Tuesday, February 1, 2011


Is Wales taking advantage of opportunities within the fast growing green economy?

According to a survey of 103 businesses across Wales by the Carbon Trust, it seems not.

Their research showed that:

  • while 75% of decision makers considered enhanced corporate reputation as the major company benefit of the green economy, only 30% expected it to increase profits.
  • only 27% of businesses in Wales are currently investing money in research and development of green products and services.
  • when asked what businesses need to have in place to ensure they can harness green growth as a commercial opportunity, the most important factor is visionary leadership, with 63% of business leaders saying its essential.
  • access to investment capital was also viewed by 44% in Wales as a critical determining factor.
  • the majority of Welsh decision makers think legislation to reduce energy consumption and carbon emissions is needed (72%). Increasing consumer demand for eco friendly products and services (63%) and advances in new green technology (62%) are seen as other important drivers for the green economy.

These are mixed results at best, especially as Carbon Trust Wales argue that “the low carbon market, already worth £3 trillion a year globally, is set to increase by 25% over the next four years.”

This is not too surprising to those of us that follow trends in the green industry. For example, a  recent report by GreenBiz showed ten major trends by US companies:

  • Consumer Giants Awaken to Green — big push by consumer package good companies to make bold sustainability commitments
  • Companies Aim for 'Zero' — growth of zero-waste goals and achievements by big companies
  • The Developing World Yanks the Supply-Chain — key issues like "conflict minerals" and sustainable palm oil rattling supply chains
  • Greener Transport Gains Speed — new green technologies coming to market — not just electric vehicles and plug-in cars, but also trucks, trains, and planes
  • Sustainable Food Sourcing Becomes Palatable — more commitments by big companies, led by Walmart
  • Metrics and Standards Become the Rule — a surge of interest on sustainability standards and on standardizing metrics for assessing companies
  • Greener Chemistry Comes Out of the Lab — combination of toxics headlines around the world and surge of new products from Big Chemical makes this a mainstream market
  • Companies Learn to Close the Loop — the growth of new products made from recycled materials
  • Water Footprinting Makes a Splash — the growth of methodologies and technologies for understanding the footprint of a product, facility, or company
  • Bioplastics Become Material — a steady flow of new materials emerges, made of corn to coconut to cashews.

In addition, China’s central government is currently thrashing out details of how best to steer towards greener growth as part of closed-door discussions aimed at finalising the country’s 12th Five Year Plan (2011-2015), which will be announced in March. According to reports, "The plan is expected to become China’s first national plan to shift the development agenda decisively toward a pattern of green growth, accelerating the country’s efforts at green modernization. Expect ‘establishing a low carbon society’ to be a key political slogan over the next five years."

Therefore, if the two major economies of the World are driving forward with green initiatives at both a government and business level, then surely we must be taking advantages here in Wales?

Yet one has to wonder why there is no significant support programme to support the development of a greener Wales. If there is a need for access to investment capital, is there a priority given by the Finance Wales managed JEREMIE fund to green project applications for financial support?

Surely this should have been a priority for European structural funding in Wales and yet, with the exception of the Low Carbon Research Institute which is largely a university project, there has been no significant programme developed to ensure that businesses are incentivised to become greener?

It would seem that, to date there has been far too much rhetoric on green issues by the Assembly Government and very little action. If Wales is to take advantage of the massive opportunities being created by the expansion of the green economy, then more must been done to ensure that our business sector is at the forefront of any new developments.


No of enterprise births in Wales 2002-2009
Last week, I tweeted on the latest enterprise data for Wales.

Fortunately, I have now been able to get some time over the weekend to examine the more detailed longitudinal data for Wales between 2002 and 2009.

The picture, I am sad to say, is not good for the Welsh economy.

During the period 2002 and 2004, the number of new enterprise births in Wales went up from 8,970 to 11,525, an increase of 28 per cent.

In contrast, in the period 2004-2009, there has been a 28 per cent DECREASE in the number of new businesses being created in Wales.

As I have said before, surely it is not a coincidence that the Entrepreneurship Action Plan, with its strategy for increasing entrepreneurial activity, was at its zenith during this period before being abolished in 2005.

So what is the impact on the Welsh economy?

Let’s look at the scenario where Wales could have maintained the 2004 level of new enterprise creation supported by an Entrepreneurship Action Plan that was the envy of the rest of Europe.

This would have resulted in 9,540 more business births in Wales over the period 2004-2009.

Assuming enterprise survival rates over this period and that all of these reach the VAT threshold for sales in the first year (£70,000), then it would have resulted in a minimum £500 million in additional sales in the Welsh economy in 2009, much of it spent within local communities.

One would also assume that each business would also be employing at least one person as well as the entrepreneur.

Now I am sure that the cynics amongst you will argue that it would have been difficult to maintain that level of enterprise birth during this period BUT it is worth noting that during the period 2004-2009, the number of new businesses in Scotland grew by 2 per cent.

Clearly, something has gone drastically wrong for Wales to go from having one of the most admired entrepreneurship strategies in Europe (which was copied by the European Commission itself) to having one of the worst performances for business start-ups in the UK.

One can only hope that the next Assembly Government, if it serious about revitalising the Welsh economy, makes the development of a supportive environment for entrepreneurs a key priority.