Sunday, 13 September 2009

There may be trouble ahead

Posted on This is My Truth on 13 September

So Gordon Brown will tell the TUC this week that we are "on the road to recovery".

I think not.
Even if the economy does pick up the impact on public spending over the next ten years is going to be profound. And last time I looked at the figures on the reliance of the Welsh economy on the public sector they left an impression on me that it was kind of important.

The point doesn't seem to have been lost on the TUC. And clearly Brown is road testing his election strategy by painting the Tories as the slash and burn agents who will put the recovery at risk.

But putting all that aside, let me be parochial for a moment. The impact of the cuts are going to have far reaching consequences for the Assembly Government, and indeed the future of the Assembly.

For all the manoeuvring going on to replace Rhodri Morgan the overriding issue is how the WAG manages the huge reduction in public finances this Autumn and next following the Westminster election. As an old sage reminded me this week, this more than anything else will determine the shape of things post-Rhodri.

As the Holtham report found, the Assembly's finances are already under strain. Even in times of plenty the Welsh bank account was not getting a fair share from our Treasury masters. But it is about to get a lot worse. "Unmanageable", according to my friendly sage.

So what could the political fallout be?

How will the new Labour leader navigate the massive cuts, laden down with promissory notes made to Trade Unions others made during the leadership election?

How it will play out within Plaid? Will the coalition survive this Autumn's budget round? My friendly sage thinks it will survive this autumn's negotiations but is clear that it "definitely" won't survive next Autumn's. It could be a messy divorce. And this in turn raises very interesting questions about the All-Wales Convention and the timing of any referendum. Do we really want to be making the case of moving from Part Three to Part Four of the Government of Wales Act against the backdrop of eye-watering public spending cuts and the lingering smell over MPs expenses? And if not how will the inevitable disappointment be manged within Plaid (in other words can Ieuan Wyn get Adam Price on board)?

The Tories in Wales are already worried about how the new crop of MPs will react to the LCO process, added to that they will have some difficulty navigating between a kind of the "one nation" approach in Wales and what is bound to be a savage attack on public expenditure and services should the Tories win the UK election. Phrases like "now that we have really been able to look at the books the situation...etc", will help Nick Bourne and his group for a while but it wont cut it for long. All of that points to the Tories in the Assembly having already reached their high water mark for the foreseeable future.

But someone somewhere has to come up with a model of public service delivery in Wales that will be truly responsive to people's needs, fairer in terms of accessibility and affordable - especially in the next five to ten years. There is little sign of anyone engaging in such thinking.

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