It would be different if popular demands for an English-only polity were advancing, along likes that the Scots and Welsh have enjoyed. But I don’t see many signs of this. Kenyon says there are equivalent versions of autonomy in Europe; but these all happened before ‘globalisation’. The latter has brought a new finality and a kind of permanence to such debates. Only one world, and we’re conscious of its limits (all the more so with global warming); hence ‘for the time being’ is coming to feel like ‘for all time coming’. Make you bid now, in other words, or it may be too late. Scottish popular sovereignty can only bid for its own rights, not for qualified or restrained rights dependent upon the sovereignty of others – least of all that of an English nationality still uneasy and unreconciled to loss and retreat.

The trouble is, in these circumstances no alternative to independence looks possible. A majority is still anxious about it, for sound (though increasingly historical) reasons. They have to be persuaded that Kenyon’s ‘secure’ autonomy – de facto statehood – is the only ay Scots can help build the sort of Kingdom that must replace tat of the 1707 Treaty of Union. Scotland’s resignation of statehood was an odd deviation from what became the norm of nationality-politics. Its resumption may be just as odd. Could things go wrong along such a track?

But they already have gone wrong at the level of the majority state, its collapsing traditions and notoriously unwritten Constitution. Standing by that status quo would merely collude with downfall … as David Cameron’s reform agenda in effect acknowledges. ‘Independence in Europe’, by contrast, offers at least some chance of a new wider deal – and would, incidentally, be very popular in many influential circles of European opinion (not only in France). I suspect it would also appeal to many diaspora Scots, a considerable and potentially influential body that might welcome a new political role. If London tries to rule out a referendum, then such opinion could be made to count: on grounds of sovereignty, the people of Scotland must be allowed to have their say.

The coincidence of a Scottish shift with developments in Wales is also worth stressing. There, a referendum is to be held on enhancing devolved government, something like Calman’s proposals: not independent statehood but much greater autonomy from the foundering Anglo-British state. Just what Northern Ireland will make of such shits I’ve no idea; but the overall perspective of an altering society and state will surely impose itself – and open doors that were for so long bolted up by ‘Great Britain’’ and its interminable decline. Gordon Brown believed the body might yet be reanimated, but we now see that his period in power has merely aggravated its mortality, and brought demise much closer.

Alex Salmond’s government wants to act on all this, and perceives the referendum as the necessary condition for such action. Of course, independence is a good in itself; but it’s surely clear enough here that it will also be for doing other things, including a viable Social Democracy and a new British Isles association – or even a confederation – at home in the European Union but nor confined to it, or to North Atlantic assumptions.

The Scots left the political world at the start of the ‘Age of Nationalism’, and are rejoining the political world as that Age draws to a close, demanding new styles of nationality-politics and different ‘-isms’. This is a great opportunity, surely, and not something to be thrown away by futile clinging to the wreckage of the past.

To put the point in terms of one of the most useful theories of the past century, the Scots need ‘Exit’ from the decrepit UK System, in order to build any new ‘Loyalty’ to something better – a British Isles system worthy of the European and globalizing times ( see Albert O. Hirschman, Exit, Voice and Loyalty, 1970). The population of England need it, too, but hasn’t wakened up sufficiently to the possibility.

There’s northing ‘anti-English about Salmond’s proposal, what its against is the hidebound arrogance and self-satisfaction of the Anglo-British inheritance – something like what the Australians mean by the term ‘Pom’ or ‘Pommy’, a pseudo-ethnic configuration of superiority descended from earlier times and colonialism. Battered and bowed perhaps, but unfortunately not yet dead – in either of the main parties of UK statehood.

• Tom Nairn has been Professor of Nationalism and Cultural Diversity at the Royal Melbourne Institute of Technology, Australia, since 2002. He is also Visiting Professor at the University of Strathclyde. The IWA published is Gordon Brown: Bard of Britishness in 2006.

Rhodri responded by saying he was endlessly fascinated by Wales because it was so fractured and complex. He instanced an e-mail poll of some years ago on who was the most famous Welshmen of all time, which ended up as a contest between Owain Glyndŵr and Aneurin Bevan. People were immensely proud of Owain Glyndŵr whose rebellion between 1400 and 1410 had been the most important ten years in Welsh history before the first decade of the 21^st Century which witnessed the birth of the National Assembly.

On the other hand Aneurin Bevan just pipped him to the post because he represented the impulses of 19^th Century industrial Wales which inspired modern Welsh democracy, socialism and the National Health Service. However, there was a link between the two, and that was Bevan’s first name ‘Aneurin’. Bevan was so named in honour of  Aneirin. A poet in Urien's court, Aneirin was present at the battle of Cattraith, ca. 600 AD in Catterick, Yorkshire, on which he wrote his epic poem Y Gododdin, about the defeat of the Britons against the Saxons. It doesn’t get more complex than that.

And the quiet Celts? Rhodri illustrated this by recalling a time in the 1970s devolution debates when the Scottish MP Tam Dalyell had said that a Scottish Parliament would mean James Naughtie having to be repatriated from the Radio 4 Today programme. Rhodri had tapped him on the shoulder and added that may be it would also result in the programme’s other presenter John Humphreys being returned to Wales. Tam Dalyell looked nonplussed. He had no idea that Humphreys was Welsh.

The Welsh had “needed” devolution, said Rhodri to give them the confidence and self-belief to make their own decisions.  Major arguments against the Assembly had been that it would simply result in scandals and ‘jobs for the boys’ with public appointments going to Labour Party hacks. None 0f this had happened, which he said was perhaps the greatest achievement of Welsh devolution so far.

So, a statue can wait, even a bronze one, as suggested in today’s Western Mail by Llantwit Major sculptor Roger Andrews. There’s life after Rhodri, which is simply more of the same.

·      John Osmond is Director of the IWA.

First, it roots the Scottish Parliament firmly in our historical constitutional tradition. It is in continuity with the 2 previous Claims of Right in our history – 1689, when the then Scottish parliament declared James VII deposed because he had “turned a legal limited monarchy into an arbitrary despotic power and in 1842, when the general assembly of the Church of Scotland issued such a Claim against the right of Westminster to impose patronage on Scotland.

The important principle which unites all three Claims, is constitutional - the rejection of the absolute authority of the Crown, or the Crown in Parliament, to impose policy or governance on Scotland against her will. Lord President Cooper, arguably the greatest Scots lawyer of the last century stated “the principle of the unlimited sovereignty of parliament is a distinctively English principle, which has no counterpart in Scots constitutional law”

That golden thread which runs through our history goes back even further – to the Declaration of Arbroath of 1320. Its stirring call to freedom is often quoted, but for me the most important part of it, which puts it so far ahead of its time, is the clear declaration that even the great Robert the Bruce is “King, not only by right of succession according to our laws and customs, but also with the due consent of us all” and goes on to warn him that should he betray that trust “we would instantly strive to expel him as our enemy and the betrayer of his own rights and ours, and we would choose another king to rule over us who would be equal to the task of our defence”

A Commissioner at the Kirk’s General Assembly in 1989 summed it up more succinctly – “They said to Robert, you might be the King, but ye dae as ye’re telt, or ye’re on the burroo”

The long task of restoring Scotland’s Parliament began not with a political purpose alone, but with a constitutional principle. Our Parliament therefore, enters into this heritage, and will be judged by it.

Why a Claim of Right now?

I am on record as saying that the whole work of the Convention was “a series of minor miracles”. Surely the greatest miracle of all was that so many should commit themselves to a claim of sovereignty that implicitly and definitively denied the absolute authority of Westminster in constitutional matters. It is not surprising that many politicians would dearly love to forget the Claim they signed, and consign it to the dustbin of history. We must not allow that to happen. The Constitutional Commission, of which I am President, is in the process of asking all who signed 20 years ago, and the organisations on whose behalf they signed, to reaffirm their commitment to the claim of sovereignty. It will be interesting to see the result! Although the SNP did not join the Convention, and therefore none of its leading members were there to sign the Claim, I think it is safe to assume that their commitment to the principle of the Claim, the sovereignty of the people of Scotland, is beyond doubt.

The clear motivation for the Claim was not the rejection of any particular policy or party, but the firm rejection of the British political system, and the hope that Scotland could help to reform that system.

If any missed that, they were myopic for it was all there from the start for all to see:

·      It was there in the earlier Claim of Right document of 1988 which should really have been entitled “A Call for a Claim of Right” and which proposed the Convention. They said “Scots can now show enterprise by starting the reform of their own government. They have the opportunity in the process to start the reform of the English Constitution; to serve as the grit in the oyster which produces the pearl.” “The British government is so decayed that there is little hope of it being reformed within the framework of its traditional procedures”

·      It was there in the Church of Scotland Report of 1989 which led the Churches representatives on the steering committee to propose that we begin with the Claim of Right. . They said “It is not possible to resolve the question of the democratic control of Scottish affairs…..apart from a fundamental shift in our constitutional thinking away from the notion of the unlimited or absolute sovereignty of the British parliament towards the historic Scottish and Reformed constitutional principle of limited or relative sovereignty” Any settlement “must be built upon philosophical foundations that are more coherent and credible than the notions which underpin the existing British constitution.”

·      It was there in the rejection by the politicians at that stage of the very word ‘devolution’ with its bad memories of the 1979 referendum, and its implications of continued Westminster sovereignty. The Liberal Democrats called for the Treaty of Union to be renegotiated and their leader Malcolm Bruce declared “Devolution is Dead”. Even the careful Donald Dewar said “Scots are going to have to learn to live dangerously for a while”, and in his address to the first meeting of the Convention – minutes after signing the Claim – he said “The aim must be to give Scots proper independence whilst still retaining our links and making a major contribution to the United Kingdom”. The official Labour Party policy became ‘Independence in the UK’.

The Claim of Right and the Process

The Claim had a profound effect on the way the work was done.

·      The Convention was broadly though not completely, representative of Scottish society, and went far beyond political parties

·      We worked by a consensus method “virtually unique in British politics” which firmly rejected “the ritual confrontations of British politics”

·      We adopted “the principle of subsidiarity” – the limitation and sharing of power at different levels, and therefore wanted entrenchment, “some way of formally embedding the powers and position of Scotland’s Parliament”. This ultimately proved impossible within the British constitutional system.

·      We hoped and planned for “a way of politics radically different from the rituals of Westminster; more participative, more creative, less needlessly confrontational” – a hope only partly fulfilled

·      We planned for a Parliament that would “develop in partnership with Scottish society and with other levels of government, an integrated strategy for sustainable development in Scotland.” This hope seems nearer fulfilment with the widely praised Climate Change legislation in Scotland.

In one crucial area, the Convention failed and was inconsistent – and I deeply regret that I did not make an issue of this at the time. We began with a statement of the sovereignty of the people in constitutional matters, but went on to include these in the list of powers reserved to Westminster. We thus implicitly accepted the right of the UK Parliament to have the final say on our constitutional future and how we are governed – implied by the very use of the word “devolution”. We failed to seize the opportunity to tackle the fundamental problem of the incoherent and undemocratic nature of the unwritten UK constitution.

The Irresistible force of Scotland’s sovereignty met the Immovable object of the British State, - and gave way!

Unfinished Business: the People Decide - But How?

There has never been a better time raise again these fundamental constitutional questions. The last few years have seen a growing conviction that the Scottish constitution must. reflect our freedom from, and possibly our influence on the reform of, a UK constitution manifestly no longer fit for purpose. In 2005, Chris Patten wrote:

“We have an electoral system riddled with unfairness; a bicameral legislative structure that the government reorganises at regular intervals on the back of an envelope; courts whose judges are attacked by the executive because it does no care for the way they seek to protect our liberties; local government gutted by manic centralism; and an executive that displays under both Labour and Conservative leadership the attributes of what Lord Hailsham called ‘an elective dictatorship’.

After 10 years of devolution in Scotland, and in an atmosphere of growing contempt for politics at the UK level, fuelled by the expenses farce, but actually systemic and constitutional, this is surely the time to reassess and choose our future.

Some argue that these concerns about how we are governed are somehow in conflict with the need to tackle the major economic issues. The opposite is the truth. The experience of devolution, however flawed, surely demonstrates that how we are governed deeply affects the ability of our government to deliver in all areas.

There are two major areas in which the sovereignty of the people can be exercised. In major matters of constitutional change, that will be through a Referendum.

In matters of day to day governance and decision and policy making, that will be through developing the structures and institutions of a more participative democracy.

Towards an Effective Referendum

I now want to put to the Scottish government, a clear proposal that would fulfil the intentions of the Claim of Right, and give the people a real choice.

The Government’s intention is to hold a referendum that would in effect offer two alternatives – the Status Quo of Devolution (with whatever of the Calman Report survives) as against Independence. That proposal in my view, does not offer the people a wide enough choice, does not sufficiently honour their sovereignty, and fails to represent the views of many Scots, who want a Scotland beyond Devolution and with substantially enhanced powers, but who do not favour complete independence

Alongside the two options proposed, there should be a third option, with the nature of the Referendum carefully planned to deliver the result which most accurately represents the will of the people (There are useful precedents for this)

Secure Autonomy?

The name I propose for that third or middle option is ‘Secure Autonomy’, though the actual name could be debated.

·      Secure Autonomy would begin with the principle of sovereignty, and therefore reject the name “Devolution”.

·      The powers of the autonomous Scotland would certainly include constitutional matters, and full fiscal autonomy, though much more work needs to be done both on powers and on the implications for the Union.

·      Links with a reformed Union, probably of a neo-federal nature, would be retained (There are comparable constitutional arrangements in Europe).

There can be no illusion that, if this option were successful, Scotland would come up, as we did, against the power and assumptions of the British State – weakened as it now is however by its own internal decay.

We must therefore insist that, whatever option the people choose, in the words of the Claim of Right “We assert the right of the Scottish people to secure its implementation”.

Much can and must be negotiated, but sovereignty is non-negotiable

The Constitutional Commission has already published a draft Constitution for Scotland, and more details of the Secure Autonomy option both prepared by Elliot Bulmer (constitutionalcommission.org) and we would welcome the widest conversation on these ideas .

Towards a Participative Democracy

A second proposal to the government would cover the peoples’ sovereignty in day to day decisions – an area in which the intentions for the Scottish Parliament were only partly realised. I ask the government to set up a small group, including some people from the creative and cultural sector, with the specific task to prepare within a set time, proposals for the institutions, policies and mechanisms that would make Scotland a more genuinely participative democracy.

Scotland is now ready to take that next step which the Claim of Right hoped for but could not achieve. The immovable object is shaky and vulnerable.

·      Canon Kenyon Wright was Chair of the Scottish Convention in the 1990s and today is President of the Scottish Constitutional Commission.

In the evidence presented to the House of Lords the only defenders of the present funding system were the three territorial Secretaries of State, the Treasury Minister and the Finance Minister of the Scottish Executive. Given the excellent deal that Scotland enjoys under the Barnett formula the position of the Scottish Minister is understandable. The Treasury officials in their evidence claimed to have no departmental view but pointed out the ‘administrative convenience’ of the present system.

On 16 December the UK Government published its formal response to the report of the House of Lords Select Committee (Cmmd. 7772). The substantive part of the UK Government’s response is four pages long and essentially takes each of the House of Lords’ recommendations and decides to ignore them whilst confirming that it intends to continue with the current Barnett funding system. Thus the Government intends to continue with a system that the cross party House of Lords Select Committee demonstrated was unfair, not related to relative need and is without any intellectual foundation. It is perhaps not surprising the UK Government’s response was released on the day that Parliament was going away for Christmas.

It will be interesting to see the response of Labour in Wales. If it were to endorse the UK Government’s position it would favour the continued short-changing of Wales. This was conservatively estimated by the Holtham Commission to be £400 million a year and increasing and this at a time when Wales, in common with the rest of the UK, can expect large cuts in public expenditure from 2011 onwards.

What can the Welsh Government do in the face of such stonewalling? At a minimum it needs to ensure that the operation the Barnett formula includes the proper allocations between comparable and non-comparable expenditure which it manifestly does not at present. As the UK Government’s response states, the devolved administrations are consulted on details of what are comparable and non-comparable expenditure items. Publication of the Statement of Funding Principles which is the basis of the operation of the current formula is agreed with the Territorial Secretaries of State.

If there are disputes then they may be remitted to a Joint Ministerial Committee, with representatives from the three devolved administrations and the UK Cabinet Office.  Following this, and if necessary, the Secretary of State can take the matter to the UK cabinet for resolution. As the report notes, “In practice no disputes have been remitted to the Joint Ministerial Committee since devolution”. This is a clear indication that the Welsh Government and successive Secretaries of State have been failing rigorously to scrutinise the details of the funding allocations to ensure that Wales gets a fairer deal within the Barnett formula.

It appears that the Barnett formula will be retained for some time if Labour remains in power at a UK level, for three reasons. It is administratively convenient, in practice it is run by the Treasury, and it favours Scotland which is a Pandora’s box successive UK Governments have favoured keeping well shut. It would be interesting to see the approach of an incoming Conservative Government but perhaps the best chance for change would be a hung Parliament.

·      Eurfyl ap Gwilym sits in the boards of a number of public companies and is a trustee of the IWA.

“Wales has benefited from devolution – a nation quite transformed from the one we all knew twelve years ago. And transformed very much for the better. More self confident. More vocal. More democratic. Welsh identity is flourishing as never before …”

However, in a little noticed passage of his speech (available on the Justice Ministry website www.justice.gov.uk) Straw revealed his underlying attitude. This was when he took on the notion that because the Assembly was moving towards acquiring primary legislative powers the day would come when there will need to be a distinctive Welsh legal jurisdiction, paralleling those that exist in Northern Ireland and Scotland.

Equally important to his stance against separating the legal identities of England and Wales was his insistence that, if demand were to grow in Wales for a distinctive jurisdiction, then a referendum would be required for it to be brought about. This is what he said:

“My strong advice is that there are overwhelming arguments against a move towards separate jurisdictions. No one should underestimate the enormous practical implications. Would decisions of the English courts become merely persuasive in Welsh cases, rather than binding, for example? Would a separate legal profession need to develop, with its own systems of professional regulation? Could Welsh judgments be enforced against English defendants, or Welsh proceedings served in England? Such a large and ambitious project would certainly require primary legislation, and there would inevitably be an expectation for it to be approved by a referendum.”

This insistence on a referendum accompanying what for most people would seem a relatively modest and, indeed, rather obscure constitutional development compared with the move to primary powers, betrays a disturbing latent attitude towards Wales at Westminster. There will be an extreme reluctance to let go, even if the referendum likely to be held next Autumn on moving to Part 4 (legislative) powers under the 2006 Wales Act is successful. Are we to expect a demand  for a referendum every time Wales wishes to make a constitutional step, however, limited that might be?

Certainly, this is something that our new First Minister Carwyn Jones should be pondering, not least because it is he who has been in the vanguard of articulating the need for Wales to develop its own jurisdiction. This is how he put it, writing in this year’s Spring edition of the IWA’s journal Agenda:

“Once the National Assembly is able to exercise primary legislative powers, following a referendum, I think it is inevitable that we will have to consider creating a distinctive legal jurisdiction for Wales. It is a question which neither the Welsh Assembly Government, nor the legal community in Wales can shy away from. It’s worth noting that a separate jurisdiction need not be bound up with future powers. The One Wales agreement between the two parties in the Welsh Assembly Government includes a commitment to consider devolution of the criminal justice system and moves towards the establishment of a single administration of justice in Wales. However, to my mind it is not necessary to first have the devolution of criminal justice before we consider creating a Welsh jurisdiction. In Scotland, for example, employment law and importantly aspects of criminal law are not devolved, yet the jurisdiction is different. So a jurisdiction does not require that the legislature that it oversees has control over all areas of law. The increasing divergence of the law in relation to England and to Wales, and the bilingual character of the legislation produced by both the Welsh Assembly Government and the National Assembly for Wales, has also given impetus to the need for institutions of justice to be managed locally.”

This is a debate we can expect to hear much more about in the coming years. And it makes very timely the announcement by the House of Lords Constitution Committee that it will be conducting an inquiry into the place of the referendum in the UK’s constitutional experience. As its call for evidence states:

“This inquiry aims to tackle this question by analysing: arguments for and against the use of referendums as a democratic and constitutional tool; what place the referendum has or might have in the UK’s system of Parliamentary democracy; the UK’s experience of the referendum; the effectiveness of the Political Parties, Elections and Referendums Act 2000, and the statutory role of the Electoral Commission; international case studies of the use of the referendum; and prospects for the future”.

Evidence has to be tabled by 4 January. In putting forward its response the IWA will be drawing attention to Jack Straw’s suggestion that the referendum should be deployed as a device to frustrate Welsh constitutional aspirations.

·      John Osmond is Director of the IWA.

Feisty Edwina Hart remains at health, but if Leighton Andrews is to be successful then it is difficult to see how health can avoid taking a hit.  The Health and Social Services budget is by some measure the largest and has consistently risen over the past decade at rates well above inflation. In the same period education spending has consistently fallen in relative terms. As the IWA has argued (in the latest Agenda editorial): “The time has come to alter this balance. It is a tough call, but it is time for rigorous controls of health spending to allow education to catch up.” Carwyn Jones appears to agree.

An interesting appointment is that of Newport East AM John Griffiths, the former Minister for Skills, as Counsel General, taking over Carwyn’s old job.  Maybe now, with the accent on moving to a referendum on greater law making powers and the clearing of the lines of demarcation between Whitehall and Cardiff Bay, Carwyn thinks the job does not need a big hitter equivalent to himself.

Carwyn supporter Jane Davidson stays on at Environment, despite the fact that she has announced she will not be standing for election in 2011.  That reflects the powerful profile she has achieved in the job, but also is a foretaste of the difficulties Carwyn may have in finding people of both calibre and experience to form his Cabinet after May 2011

Carl Sargeant, another Carwyn loyalist, gets promotion from Business Manager and Whip to the chunkier job of Social Justice and Local Government. It also gives north Wales a boost in representation.

The junior ministerial appointments are interesting. Wrexham AM Lesley Griffiths, yet another Carwyn loyalist, takes over from John Griffiths at Skills but with, significantly responsibility for Science added. That marks a shift. Previously Rhodri Morgan described himself as the Government’s Science Minister. This change marks a welcome acknowledgement that if Wales is to become the ‘Clever Country’ that all Ministers regularly make speeches about, then science has to feature more prominently.

There’s only one change to the Plaid Cymru portfolio allocation. As a Deputy Minister Jocelyn Davies has had Regeneration added to her Housing responsibility. This is logical but its an important upgrade. The previous Minister for Regeneration, deputising to Plaid leader Ieuan Wyn Jones, was none other than Leighton Andrews.

Finally, Huw Lewis will be disappointed not to get into the Cabinet. He is Deputy Minister for Children. This is the Carwyn show alright.

The full line up is as follows:

Cabinet:

Carwyn Jones - First Minister 


Ieuan Wyn Jones - Deputy First Minister, Economy and Transport 


Jane Hutt - Business and Budget 


Edwina Hart - Health and Social Services


Jane Davidson – Environment, Sustainability and Housing 


Leighton Andrews - Education, Children and Lifelong learning


Carl Sargeant - Social Justice and Local Government


Elin Jones - Rural Affairs


Alun Ffred Jones - Culture

John Griffiths - Counsel General and Leader of the Legislative Programme

Deputies:

Lesley Griffiths - Skills, Innovation and Science


Jocelyn Davies - Housing and Regeneration


Gwenda Thomas - Social Services 


Huw Lewis - Children 


Chief Whip

Janice Gregory

·      John Osmond is Director of the IWA.

No-one should hold their breath but in the meantime how would investors fare if, instead, they merely sought to create their own portfolios of shares in local companies already listed on the main London Stock Exchange (LSE) or on its smaller sister, the Alternative Investment Market (Aim)?

To test this I have created a virtual portfolio of twelve shares and will be following these over the next year to see how investments in a selection of Welsh companies measure against the main indices. In other words would I do better or worse with a simple tracker fund investing in LSE or Aim companies or with my list of Welsh companies? Are Welsh companies performing better, worse or about the same as UK companies as a whole?

The choice of shares available for the portfolio is, sadly, not very great. There are only two large Welsh companies quoted on the main exchange, insurer Admiral and price comparison site Moneysupermarket.com.  Admiral on its own is bigger than the rest of the Welsh quoted company sector put together. As a result the bulk of my selection is drawn from the smaller Aim exchange, which offers listings without the full panoply of requirements for a full LSE quote.

Balance is also a problem for the same reason but the list does have a reasonable spread across the various sectors, with even some international exposure. Apart from the big two mentioned in financial services, my twelve includes three technology companies – lighting specialist, Enfis, semiconductor services company, Pure Wafer and chipmaker, IQE. From the consumer sector I have chosen Redrow, the builder, International Greetings and Finsbury Foods, from resources, the Welsh based oil explorer, Amerisur Resources, agricultural supplies and country retailer, Wynnstay, from media Boomerang Plus and finally Welsh Industrial Investment Trust.

So in their first month to December 5^th, how did my 12 nominal shares to the value of £100 each fare? During this period the three main UK indices, the FTSE100, the FT Mid Cap index and the FT Aim All Share Index, all made minor advances of less than 1 per cent – effectively ending the first month at roughly where they started despite a dip in the middle of November.

Of my share selection six, Amerisur, Admiral, International Greetings, Pure Wafer, Wynnstay and Welsh Industrial Investment Trust, increased in value, with the other six showing a decline. Despite this even balance, however, my nominal portfolio ended up £28.27 down in value at £1,171.73, and if the purchases had been made (rather than imagined) and the various commissions and charges paid, I would have lost even more.

Our one very big quoted company, Admiral, was up slightly, showing a 17p gain to 1076p in what appears to have been a relatively quiet month for the Cardiff insurer. Welsh Industrial Investment Trust rose 13 per cent to 245p but Redrow, which enjoyed a strong recovery during the middle of 2009, has slipped back again and was down a further 8 per cent over the month to 134p. It had a successful rights issue in early November and has begun buying land again for building but its fortunes are tied very much to the housing market where there is no consensus currently on what is likely to happen next year.

The real star was Aim-listed Amerisur Resources, the St. Mellons-based international oil and gas explorer, which focuses on South America. It has recently had good drilling results in Colombia and Paraguay and rose over the month by 45 per cent to 11.2p. Wynnstay has been another good performer this year. Even though it only managed a very small increase to 228p, the company, which supplies farmers with a range of goods, including feeds, as well as having its own retail outlets,  is now trading at near the top of its 52 week range at 239p, up from a low point during the period of 155p. The company has been on the acquisition trail in England and the market clearly approves.

Of the other Aim-listed companies Pure Wafer, which has had a troubled time over recent years, rose nearly 20 per cent from a modest 3.75p per share to 4.5p after reporting some more positive trends for the business. It has been as low as 2p this year and as high as 10p and reported continuing losses to June 30^th. IQE, however, which hit 3p earlier in the 52 week period before recovering to 20p is now at 16.72p, a drop of nearly 10 per cent on a month earlier but it now sees some stiffening of prices in its markets.

My other technology stock, Enfis, has, however, been the main disappointment of the period, losing 60 per cent of its value, with shares dropping from 53p at the beginning of November to only 21p. The Swansea high power lighting specialist has been seeking to reduce overheads to limit the outflow of funds but sees some evidence of investment by its customers in China and Europe. Television production company, Boomerang Plus, announced new contracts during the autumn with S4C and the Royal Welsh Show but this failed to prevent a 13 per cent decline in its share price to 87.15p

Shares in Cardiff cake-maker Finsbury Foods also took a tumble from 26p to 19.6p, because, it seems, the great British public, instead of indulging in comfort eating to ease its recessionary fears, has actually cut back on its cake intake or gone for less expensive options, leading to a profit decrease. International Greetings which has been restructuring itself managed an eight per cent increase in its share price, while Moneysupermarket.com remained much where it was a month earlier at 77.2p.

With only a month under review there are obviously no clear trends to report yet, though clearly conditions have not improved all-round and some companies continue to struggle. December is usually a good month for shares as investor optimism rises in the run-up to Christmas – shares are reported to have risen in 18 of the last 20 Decembers - so we shall see whether this happens again in my next report early in January – and whether it applies to Wales as well as to the indices as a whole.

·      Rhys David is IWA Board Member and former Financial Times Journalist. These observations do not represent the views of the IWA and are not a recommendation to deal in any of the shares mentioned. Any reader interested in buying any of these shares would be well advised to consult a  financial adviser. As my six-six gains and losses split demonstrates, shares can go down as well as up. We will be reporting on the fortunes of these shares at monthly inervals.

This is partly what has been motivating Welsh Secretary Peter Hain in his effort in recent months to kick a referendum into the long grass, and certainly  until after the general election. It was Hain who was behind the Labour Party statement issued just ahead of the Assembly’s initial debate on the Convention report on 24 November. This declared that the party was prioritising the general election and would only get round to considering a referendum once it was over.

Which is where Sir Emyr Jones Parry’s advice comes in. He’s suggested to both Carwyn Jones and Plaid’s leader Ieuan Wyn Jones that, by all means have a vote on the ‘principle’ of a referendum in January, but don’t formally move to a vote on demanding one until the next government is in power. As he put it at last Friday’s conference, “There isn’t much point in dropping the referendum demand on the present Parliament.  Much better to drop it on the next Parliament. I’d want to drop it when I knew the circumstances of the next Parliament. There would still be time to have the referendum in late Autumn 2010.”

This course of action would be a classic compromise. It would reiterate the intention of the One Wales coalition agreement between Labour and Plaid on holding a referendum, but stave off firing the starting pistol for the campaign until May or June. In the process it would help Carwyn Jones’s efforts in achieving unity within the Labour Party arounding fighting a referendum. It would also allay fears held by Ieuan Wyn Jones that a campaigning vacuum between February and May would give the No campaigners an opportunity to steal a march.

“Such a formula could therefore preserve the simplicity and automatic character of the Barnett formula which has been its main justification. Basing the formula on current spending decisions provides a good starting point for political discussion about the relative size of the block grants going to the UK’s devolved authorities and should mean those discussions can be focused and not too drawn out.”

The Commission have attempted a short-form approach to assessing need by using a number of key (or proxy) indicators of need. Their finding is that these factors – different levels of health, different age structures to the population (as old and young people need services more than the middle-aged) and so forth – mean that £115 should be spent in Wales to have an equivalent effect to £100 spent in England on comparable functions. (This mirrors the approach recommended by the Lords Barnett Formula Committee, although that committee didn’t identify specific factors to use or attach any specific values to the amounts payable.)

They also apply their approach to Scotland and Northern Ireland, for which they calculate spending levels of £105 and £121 per £100 in England. The published data don’t make it clear what impact that would have in Scotland.

However, looking at overall public spending (not taking into account the functions that are devolved there and those that are reserved to the UK level) public spending in Scotland was £118 for each £100 in England in 2007-08 (and £125 in Northern Ireland). That implies a significant reduction in public spending in Scotland, with all the political difficulties that entails.

The Commission also appear to recommend using increased incremental payments as the major element of the transition mechanism, to bring the grant for Wales from where it is to where they say it should be. However, it’s dubious how workable this would be given the financial austerity that is coming.

• Alan Trench follows devolution developments on his blog DevolutionMatters.com

However, Professor Hazel believes the Conservatives are thinking in terms of the devolved nations having their representation cut by considerably more to reflect the fact that they have their own Assemblies and Parliament. For Scotland he suggested there could be a cut from 57 to 40, for Northern Ireland from 18 to 12, and Wales from 40 to 22.

This would leave a reduction of only 25 MPs in England to reach the overall cut of 65. But Professor Hazel believes the Conservatives would justify this by saying that England did not enjoy devolved administration and, as a result, the workload of English MPs is higher than those in Wales, Scotland or Northern Ireland. “This is no criticism of MPs from the devolved nations, but the fact is that the heaviest constituency workload comes as a result of issues like health and education, and these are now the responsibility of AMs in Wales, MSPs in Scotland, and MLAs in Northern Ireland,” he said.

Also speaking at the conference were Shadow Welsh Secretary Cheryl Gillan and the Leader of the Conservatives in the National Assembly Nick Bourne but they made no mention of any plans to reduce numbers of MPs at Westminster.

“For obvious reasons we cannot expect the Conservatives to disclose their detailed intentions on this policy ahead of next year’s general election,” said Professor Hazell. However, there was no doubt that they were committed to cutting the size of the House of Commons by 10 per cent. “They believe this will be enormously popular with the public at a time when spending cuts are needed and there is so much sentiment against politicians anyway as a result of the expenses scandal”.

Professor Hazell added that he was dismayed that so little work had been undertaken by political scientists on the relative size of democratic institutions and the optimum number of elected representatives to ensure effective democracy. He said he could envisage the day coming quite soon when he and other political experts would be called into the television studios, asked for their view on reducing the size of the House of Commons and would have no objective basis for assessing how harmful cutting the numbers of MPs would be.

· John Osmond is Director of the IWA.

Marginals where Labour will struggle to survive in 2011 include the Vale of Clwyd, Vale of Glamorgan, Delyn, Clwyd South, Newport East, and Gower. In addition the Mid and West Wales List member Alun Davies has announced he will not be standing there and has opted instead to fight Independent Trish Law in Blaenau Gwent.

In the other parties Mick Bates, the Liberal Democrat member for Montgomery, has announced he will not be standing; the Tories only hold one real marginal, Carmarthen West and South Pembrokeshire; while Plaid Cymru could have two new List members – Dafydd Wigley in North Wales and Adam Price in South Wales West – because the party has changed its rule requiring a woman to be placed first on the Regional Lists.

It seems inevitable, therefore that there will be a major culture shift within the Assembly’s membership following 2011. There will be fewer women to start with, since of the eight Labour members which have announced they will not be standing, five are women and two of these have already been replaced by male candidates. Plaid Cymru are likely to lose two women from their Group who will be replaced by men.

Labour will be the party most affected. It gene pool for selecting Cabinet members will be significantly reduced, both in numbers and experience.

Taken together these changes hold out the promise of renewal in the calibre of the Assembly’s membership, but also underline the vulnerability of an institution which only has 60 members. It is another argument for moving to the 80 members the Senedd has been designed to hold.

•     John Osmond is Director of the IWA.
  

There’s always the possibility that the Welsh media have spent more time thinking about the specific impact of a Cameron Government on Wales than the Tories have. Anyway, here goes with my best stab of what the Tories have in store for us.

ELECTION 2010 – WHAT HAPPENS NEXT?

David Cameron has talked of cutting  the number of Ministers – as well as their pay. But the Wales Office is expected to survive, despite  mooted reductions at the Scotland Office – as LCOs keep the junior Wales Office Ministers – and staff – busier than they’ve been since 1999.

Cheryl Gillan has suggested that a Minister in each department will be asked to look out for Welsh interests –  not a role likely to thrill ambitious junior Ministers but a policy designed to counter perceptions that Whitehall doesn’t get devolution.

THE ECONOMY

George Osborne will hold an emergency Budget within 50 days of the election – before the Commons rises for its summer  recess. David Cameron has said  the number one priority is cutting public debt –  so expect both spending cuts and tax rises. Many would argue both are inevitable whoever wins the election.

The Tories are promising a public sector pay freeze for 2011 – not an obvious election-winning strategy for the 300,000-plus public sector workers in Wales.

GOVERNMENT

The Conservatives say they would – in their first session – take steps to reduce the number of MPs by 10 per cent across the UK. They deny Labour claims that Wales would lose disproportionately – unless the Welsh vote yes to further law-making powers.

The Tories, as we know, won’t block an Assembly request for a referendum – one elephant trap they will avoid. But they’ve agreed to allow their MPs to have a free vote on the issue so with more Welsh Tories at Westminster expect more tensions with their colleagues in Cardiff Bay.

It still remains their intention to implement a system at Westminster of ‘English votes for English laws’, following the recommendations from a policy group chaired by the former Chancellor Ken Clarke. The idea is aimed mainly at the Scots. It is Conservatives’ solution to the so-called West Lothian question which asks why Scots MPs should be allowed to vote on English matters at Westminster when English MPs cannot do the same in relation to Scottish matters which have been devolved to the Scottish Parliament. How English votes for English laws would operate in practice will involve the Speaker in a lot of constitutional ingenuity. It would only impact in Wales once the National Assembly has won greater legislative powers following a referendum.

BARNETT FORMULA

The Conservatives are committed to reviewing the Barnett formula  but it is not a priority. The default (English) Tory perspective at Westminster, for all the commissions and conventions, is that the Barnett formula allows the English to subsidise freebies for the Scots. The Tories say they’ll produce their own White Paper on the funding of the Scottish Parliament, taking account of  the Calman Commission recommendations on giving the Parliament more tax-raising powers. The idea is to make the Parliament more accountable to the voters and reduce its ability to blame Westminster for financial woes. There are senior Labour people – such as Ed Balls – who would be content to see something similar for Wales but I’d guess it will take a few years of complaints about meagre rations from Westminster before a Tory Government would act. And everyone agrees that would require yet another referendum.

TRANSPORT

Will the Conservatives go ahead with plans  to electrify the railway line between London and Swansea? (Will Labour? is another question). Shadow Transport Secretary, Teresa Villiers, said in response to July’s announcement:

"Further electrification of our railways will be an important way to improve efficiency and reduce carbon emissions from transport, but Gordon Brown is living in a fantasy land if he thinks this comes for free, without any cost to the taxpayer. Yet again Labour are maxing out Network Rail's credit card, leaving the taxpayer to foot the bill. After Lord Mandelson announced cuts to the transport budget, how can we believe that Labour can announce £1.1 billion of new spending without impacting on existing transport commitments or putting further strain on public finances already stretched to breaking point?”

Probably not, then?

DEFENCE

The Conservatives are promising a major defence review. There is no evidence of a firm commitment to the Defence Training College at St Athan and given the upfront costs and continuing opposition in some military quarters it looks vulnerable. “It doesn’t look as if it stacks up” as one frontbencher put it.

ENERGY

The days of “Vote Blue, Go Green” seem a long way away. Nuclear is no longer ‘a last resort’ and the Conservatives support Labour (at Westminster) in wanting to build another nuclear power station at Wylfa. The Tories say their support is conditional on there being no public subsidy, a challenge in the current climate, but EDF have apparently said they can do it without subsidy.

The Severn Barrage? I’ve struggled to find any words from Greg Clark, shadow Energy and Climate Change Secretary, on the barrage options.

JUSTICE

A prison in north Wales? Unlikely under Labour. A prison for north Wales? More likely, but built east of the border. What would the Tories do? Do they know? Alan Duncan is still settling into the prisons brief, although he knows of the issue. The Tories have been floating again the idea of prison ships. HMP Holyhead anyone?  There is no obvious public policy commitment on prisons.

WALES

As part of Project ‘We’re not an English party’ Nick Bourne and his colleagues have floated the idea of having a St David’s Day Bank Holiday –  bank holidays are decided by the Treasury. Some Tory MPs find this, frankly, laughable tokenism and it’s a policy that tends to appear in Assembly manifestoes - “seek to establish St David’s Day as a national holiday” – but not in Parliamentary ones. David Cameron could surprise us by offering Wales the chance to replace another holiday with a March 1 day off but I wouldn’t bet on it.

•       David Cornock is BBC Wales’s Parliamentary Correspondent at Westminster.  There are still places at the IWA and Wales Governance Centre conference Life Under the Tories being held at Cardiff University tomorrow. Go to the Events page on this website.
  

The NHS could never claim to be identical in every corner of the UK, but one of the consequences of devolution is that policy and practice continues to diverge as administration are empowered to seek local solutions to local challenges.

Leaving aside UK-imposed commonalities, such as professional regulation, the NHS of today no longer consistently reflects the NHS founded in 1948. Only the main principle, that the service should be free at the point of delivery, remains as an established constant, and even this consistency is under threat with top-up payments for end-of-life cancer medicines.

Devolution has provided the potential for a natural experiment to provide policy lessons, but this is the first time anyone has tried to carry out a systematic comparison of health policy and practice.

The research had two purposes: to uncover differences in policy that might provide lessons for policy makers, and to promote discussion of the bigger questions, including whether innovation is valued, how resources are invested and, most important of all, which actions actually improve health outcomes.

To do this, the research, carried out by IMS Health Consulting, looked at policy and practice in four areas: cancer treatment, cardiovascular disease, healthcare-associated infections and access and investment.

Its findings have been shared with UK health professionals and there has been a chance to compare and contrast the approaches taken in each of the devolved nations — not always a process that has been comfortable.

If the process of devolution is about maturing, from dependence, through independence and on to inter-dependence, then Wales, for instance, is in the middle stage - doing its own thing, but not necessarily doing the right things. The ‘right things’ will come when policy-makers and practitioners start to recognise the inter-dependent nature of NHS policy and provision.

Performance in Northern Ireland is affected both negatively and positively by its size. The research highlighted the benefits of effective clinical leadership and engaging in working partnerships.

Northern Ireland needed to realise the importance and value of cultivating a knowledge economy. And although Northern Ireland performed very favourably compared to the other devolved nations, particularly in oncology, the examples showed that investment in innovation could improve patient care and outcomes.

In terms of access and investment, Scotland, with its Scottish Medicines Consortium (SMC), thought it had the best system for evaluating new medicines. The SMC makes quick decisions compared to England's National Institute for Clinical Excellence (NICE) and scans the horizon for developments. This hasn't necessarily, however, resulted in greater investment in new proven medicines.

Where treatments are not considered cost-effective, they are restricted or denied. The rub comes when SMC and NICE reach different decisions about the same medicine. Even then, there is scope for regional variation within the nations. NICE has one advantage over the SMC, in covering a wider range of technologies, not just medicines.

Given the inter-relation between therapies, some health professionals feel Scotland may have missed a trick when it comes to assessing the cost benefits of other forms of care.

Devolution naturally breeds a desire for locally-accountable bodies and processes, even though this may mean costly duplication. The main points to emerge included the need for better data collection to allow ongoing like-for-like analysis; the necessity for culture change among both clinicians and the public to achieve sustainable improvement; and improved cost analysis of innovations to reflect wider budgetary implications.

Population-based health promotion strategies, while laudable, will take time to reap rewards in terms of health outcomes. Until then, people will still need to be treated, and will rightly expect the best possible preventative care and treatment.

Meeting the costs of innovation will demand improved analysis of the benefits of all treatments and technologies, and a commitment to service change.

Better public understanding of the necessity for that is required, as is strong clinical leadership to make improvement happen.

Equity of access is recognised as a challenge, given the latitude that exists for local decision-making. There were differing views about that, but it was agreed that it is important for the public to be more actively involved in the debate, particularly when there are likely to be increasingly acute financial pressures.

·      Jeremy Felvus is head of UK government affairs at pharmaceutical firm Pfizer and presented a paper on these findings at Cardiff University on 1 December 2009. Earier this year the IWA and Academy Health Wales organised a conference on the findings from this research. A paper based on the conference, Challenges facing the Welsh NHS in tackling cancer, heart disease, and healthcare associated infections is available from the IWA at £5.