Attention was drawn to this at a meeting organised by the IWA in Cardiff this week, called to discuss the issues facing the Welsh Government's Independent Commission on funding the National Assembly, chaired by Gerald Holtham. A questioner from the floor referred to the Western Mail report and wondered why it had been buried. The Western Mail’s Chief Reporter, Martin Shipton who was sitting on the panel  at the meeting, explained that he had been on holiday in Spain when the story appeared, but would ensure more attention was paid to its contents in the weeks leading up to the general election.

The importance of George Osborne's commitment to replace the Barnett formula with one based on needs can be seen from the findings of a study undertaken by the Holtham Commission that was pubished last December. This provided an analysis of how a needs-based formula would work, based on Whitehall’s current needs-based distribution of funds to the English regions. If applied to the devolved administrations it would give Scotland £105 per head of population compared with a UK average of £100, Northern Ireland £120 and Wales £114.5. Pretty innocuous you might think, until you compare that with the present allocation: Scotland gets  £120, Northern Ireland £124, and Wales £112. It would mean Wales would get an extra £400 million, on top of its £16 billion block, but Scotland would lose a massive £3 billion from its £28 billion.

These are the figures which explain Labour’s reluctance to interfere with the Barnett formula. With the SNP breathing down the neck of many of its Labour MPs the last thing they want is to provide them with the heavy ammunition that a threat to Scottish funding on this scale would mean.

However, with only one Scottish Westminster seat and no hope of gaining more than two or three more in May, the Tories have comparatively little to lose – which presumably explains George Osborne’s willingness to consider changing the funding formula. 

For the record, this is what Osborne told the Western Mail: “My initial look at the formula suggests that Wales might well be missing out under the Barnett arrangements. I think it is in Wales’s interest that we have that needs-based assessment, which is independently done … My view is that you want to move on it pretty quickly, as soon as a new Government is elected.”

·      John Osmond is Director of the IWA.

Nigel Roberts, chair of Cardiff-based Paramount, told the conference that business was disillusioned with the Assembly, that initiatives took forever, that there was a state of “paralysis”, and that “dealing with the Assembly is like punching a sponge”.

The conference had drawn a wide range of top-flight speakers, including the new First Minister, Carwyn Jones, to give Welsh, UK and world perspectives on the economic challenges that face us.

Gerald Holtham, one of the UK’s top investment managers and chair of the Holtham Commission that is examining the Barnett formula and other Assembly funding options, warned us that although growth over the next year could turn out to be better than forecast, we were in for 8-9 years of tight fiscal policy, with those at the bottom of the skills ladder sure to be the hardest hit.

The only silver lining that Holtham could see was the fall in the value of the pound which would help Welsh manufacturing. But since a later speaker, Professor Robert Huggins of the University of Wales Institute, Cardiff, reminded us that Wales is also at the bottom of the export league table, with only 2.16 per cent of Welsh companies exporting, this might not make a huge difference to the overall situation in Wales. 

Concentrating on competitiveness, Huggins reminded us that the low R&D expenditure by business in Wales meant that Wales was more dependent on R&D in the higher education sector than any other UK region. But he also pointed out that the whole of the UK is unbalanced in this regard: only the southeast England ‘super-region’ scores above the UK average for competitiveness, a factor that, he thought might account for the fact that the UK has dropped from 7^th to 12^th in world competitiveness rankings in recent years. The concentration model is not working for the UK, he said.

Within Wales, Cardiff is the only city whose competitiveness is above the UK average. It ranks 12^th, against Newport at 30^th and Swansea at 38^th. Merthyr and Blaenau Gwent are at the very bottom of the pile – 405^th and 407^th out of all UK local authority areas. In the Welsh context Huggins believed that it would make more sense to concentrate resources in regions that are strong – notably the Cardiff-based city-region – a call echoed by several people through the day, but one which runs counter to current political orthodoxy in the Assembly itself.

But the root cause of business frustration may have been identified by Dr. Stevie Upton, the IWA’s own Research Officer. This, she thought, was the information deficit: the fact that, following the absorption of the WDA into the civil service, it is almost impossible now to tell where the money spent on economic development in Wales actually goes. This is all the more important in the light of Upton’s other finding that Wales is spending more per head on economic development than any other UK region - £107 per head, £10 per head more than the north east of England, and £30 more than Scotland. She has been seeking out this information over recent months at the request of the IWA’s recently formed Economy and Finance Study Group.

There is no little irony in the fact that the abolition of the greatest of the Welsh quangos, allegedly in the interest of accountability, has resulted in reduced accountability: no annual reports, no reporting of spend by detailed programme, no external evaluation of the effectiveness of individual programmes. The Welsh Government’s ‘Flexible Support for Business’ scheme, which telescoped several other programmes, was a particular target of criticism throughout the day, because of the way it rolls up so many different programme spends under one heading.

Upton was able to point to figures which, on the face of it, suggest that while the Yorkshire RDA is spending 19 percent of its budget on enterprise, Wales is spending only 9 per cent - a comparison that the Assembly’s Enterprise and Learning Committee might like to explore.   

What the conference audience found most worrying was that this now stands in stark contrast to the situation in Scotland and England. Upton was able to point to an illuminating report, commissioned by the UK Government from PricewaterhouseCoopers, that examined the effectiveness of each of the English RDAs in considerable detail. There has been no comparable external evaluation of the economic development spending and programmes of the Welsh Government. Everyone, including the Assembly’s own scrutiny committees, are in the dark.

The suggestion that this might be an endemic problem was raised from the floor of the conference by Ian Courtney, part of a three man task and finish group, charged by the Welsh Government itself with investigating the commercialisation of intellectual property in Wales. He revealed that, despite being a government-sponsored group, they had had so much difficulty getting information from government departments that they had to threaten the government with the Freedom of Information Act. 

Apart from the lack of external evaluation, Upton detected evidence of risk aversion in the absence of any demanding performance indicators, allied to a too frequent shift to new initiatives, with little innovative thinking and policies too dependent on a changing politics with each Assembly term.

Professor David Blackaby, from Swansea University, made a big plea for improving skills of Welsh workers and managers – a call that struck a chord with a large number. He reminded us that the problem of inadequate skills was apparent at several levels. He pointed out that among the 30 top OECD countries, the UK had the lowest proportion of managers with degrees. He questioned whether education  was currently fit for purpose, which led to some debate about whether university education should be vocationally focused or not. More encouragingly, David Stevens, Chief Operating Officer for Admiral Insurance plc, Wales only FTSE 100 company, said they had built the business largely on home grown talent.

When it came to the question of what to do, Chris Rowlands, the Welsh businessman who last year produced a report on finance for business for No 10, was clear that there was a financing gap to be filled – for investments of between £2m and £10m – that would not be covered by normal debt finance or by private equity and venture capital companies. He accused private equity of being lazy, having concentrated for so many years on the easy pickings of leveraged buy-outs.

There would have to be a major intervention to fill this financing gap. It would need scale – a fund of funds - and a strong risk management function, but would have to be a regionally distributed fund. He did not think there would be any problem of lack of demand from business in Wales, but it would need people on the ground to search out and create opportunities. However it would have to be done on a commercial basis, not by government. It was clear that he would not be averse to a new Welsh banking institution and pointed to plans for Scottish Investment Bank. Could we see a Bank of Wales re-emerge, as many of us have been urging?

There were those who thought that government should not be in the business ‘picking winners’ and should stick to ‘educating people, keeping them healthy and moving them around’. Not unnaturally, this was not the view of speakers who were in government: the First Minister, Carwyn Jones, the UK Trade Minister and former Chairman of Standard Chartered Bank, Lord (Mervyn) Davies.

Lord Davies, who is also Chair of the Council of Bangor University, threw away his prepared text and, once he had excoriated the banks for not learning the lessons of the recent crisis, delivered an impassioned plea for Wales and the UK to concentrate on the industries of the future: IT, mobile technology, medicine and life sciences, education (where the UK has 20 per cent of the world market for students) and the creative industries.

Infrastructure was another priority, and Government faced a huge challenge to find the £450 billion that would be needed for infrastructure investment over the next 15 years: investment in energy security, universal broadband, high speed rail, roads and water.

He also thought it essential to develop long-term strategies that went beyond the five-year political cycle. This argument also applied to Wales, and he urged the Welsh Government to copy Gordon Brown, by bringing business people like himself into government. Carwyn Jones, the First Minister, wasn’t present at this point to respond.

Later, however, Carwyn Jones picked upon on the criticisms of poor delivery and stressed that the last thing he wanted was for government to become ‘a strategy factory’. Asked whether stood by the ‘clear red water’ message of his predecessor, he said it was important that the government believed in reducing inequality, but that did not mean Wales was shut for business.

As for the recent case of health service reform where no redundancies appear to have ensued, he acknowledged that “this cannot go on for ever” and that “voluntary redundancies would have to come”. Faced with criticism of the Flexible Support for Business (FS4B) scheme, he took the line that while this was new to him, if that was the perception he would take it on board. His barrister’s training means that he has little fear of a critical audience, but there were signs that he was in listening mode, and that this honest exchange of views with business at the start of his tenure may have been timely.

·      Geraint Talfan Davies is Chair of the IWA.

On Saturday Ron Davies told Plaid that he had attempted over many years to persuade the Welsh Labour Party that it needed to reform itself in response to devolution, to become a more autonomous institution separated from the English Labour Party and responsible for its own organisation and policy-making. “You can’t take the devolution genie out of the bottle and expect things to be the same, “ he said.

“I thought we might see Labour and Plaid come together as a fusion at the left of centre of Welsh politics along the lines of the Social Democratic Labour Party in Northern Ireland,” he said. “But it was not to be. Labour’s attitude to devolution is grudging, reluctant, and only responds under force. It is not in the DNA of the Labour Party to be interested in what it has created and to take devolution forward.

“Ten years on from the creation of the Assembly the big issues still remained to be settled, in particular devolving full law-making powers and achieving a fair funding formula. Every step of the way is a political arm wrestle,” Davies said. “It now falls to Plaid to carry the National Assembly forward.”

If anyone can prove him wrong it will be Mark Drakeford, who first attempted to get elected for Cardiff Central in 1999, but lost to the Liberal Democrat’s Jenny Randerson. As a key political adviser to Rhodri Morgan over the past ten years, he has been the main inspiration behind the ideas that have most distinguished Welsh from New Labour. Dubbed as ‘Clear Red Water’, after a speech crafted by Drakeford and delivered by Rhodri Morgan in Swansea ahead of the 2003 election, this has thus far emerged as devolution’s most distinctive philosophical approach to service delivery. In an article in the Winter 2006-07 edition of the IWA’s journal Agenda Drakeford described six principles underpinning the approach, which he described as “progressive universalism.” These included the beliefs that the delivery and receipt of pubic services should be regarded as a collaborative rather than quasi-commercial transaction, and that equality of outcomes than that equality of opportunity should be the objective in public service provision.

If the outcome of the next Assembly election is another coalition between Labour and Plaid, and if as now seems likely, Ron Davies and Mark Drakeford emerge as leading figures in the government that results, it will be fascinating to see what emerges in the mix.

• John Osmond is Director of the IWA.

Sources: Department for Business, Innovation and Skills, Scottish Enterprise, Highlands and Islands Enterprise, Department for the Economy and Transport

The intractability of Wales’s economic performance in the face of prolonged investment raises questions about the approach followed by the Welsh Government. Unfortunately, it leads us to conclude that we do not have the sophisticated policymaking capacity needed to effectively develop our economy. The danger for the Assembly as a whole is that this weakness in such a key area could undermine its case for further powers.

Worryingly, the high levels of economic development spending in Wales are not matched by clear lines of public accountability, making any assessment of real progress virtually impossible. At the time of the 2005 quango reforms, the Welsh  Government claimed that the mergers would enhance accountability. In reality, society’s capacity for effective scrutiny has actually been much reduced. Unlike regional development agencies in England and Scotland, the business plans and evaluations of the Welsh Government’s Department for Economy and Transport are not made publicly available.

Also, the reduced detail of published departmental budgets in recent years, coupled with the channeling of funding through a small number of opaquely named programmes – such as ‘Flexible Support for Business’, which now accounts for 40% of the economic development budget – makes scrutinising progress even more difficult.

To our minds, there is a clear lack of strategic direction in the distribution of economic development spending. For example, eighteen months after the publication of the revised Wales Spatial Plan, the promised delivery framework for national priorities is still to be unveiled. It is hard to see how priorities can be coordinated, let alone monies spent, without such medium- to long-term planning at the national level.

The Government is currently preparing an Economic Renewal Programme to rebuild Wales in a post recession environment. This represents a significant opportunity to put in place the strategies and interventions to convert Wales to a more high-performing knowledge-based economy. As part of the process of preparing the Programme, the Government is seeking to undertake substantial consultation with the business community. While this is a worthy and necessary task, one wonders what our policymakers will really learn:

·      Small businesses believe there is too much red-tape?

·      Failing businesses in mature industries think access to public sector funding will change their fortunes?

·      Fast growing businesses believe there to be a lack of suitable office or industrial premises?

·      start-up companies require better access to financial capital?

·      All companies think they pay too much in property rates?

These are undoubtedly key issues for many companies in Wales, but in a sense they are the well-trodden day-to-day operational factors which government needs to address on an on-going basis. They do not to any great extent relate to the strategic vision for the Welsh economy that we so badly require. The role of business managers is to ensure the future competitiveness of their company, and it is right they lobby government as best they can to achieve this aim. However, the role of the Welsh Government is to ensure the future competitiveness of the Welsh economy as a whole, and this requires hard-nosed policymaking that may not always align with the wishes of all businesses.

The Government considers that Wales should seek to specialise in those areas of the economy where it has some potential competitive advantage. We would agree with this intention, but would also point out that as well as providing additional support for these areas, it may also mean no longer supporting some areas of the economy. Although the business voice must be heard, an effective Economic Renewal Programme will require the Assembly Government to formulate a vision of how our economy should look in future, and the strategy for achieving this.

Although many good businesses have been lost in the current recession, the overall global impact of the recession has been to accelerate the flushing out of many companies that are no longer competitive in their chosen markets and industries. The impact of the recession in Wales highlights the invidious position economic policymakers often find themselves in – the requirement for short-term policies to retain jobs (such as the introduction in Wales of the ReAct and ProAct initiatives), as opposed to the long-term policies required to improve future prosperity.

However, these short and long-term requirements are not necessarily incompatible. How is it that the small US state of Rhode Island (a population of approximately 1 million) is able to develop a coherent innovation strategy for building its Green Economy (for those interested, a web search for A Roadmap for Advancing the Green Economy in Rhode Island will take you to the document), whilst Wales appears to be incapable of creating a coherent innovation strategy of any kind?

We consider that gaps in the economic expertise of the Welsh Assembly have made the need for some form of autonomous body/agency, with the necessary capacity we mention, essential if Wales is to move forward. Whilst the Welsh Development Agency undoubtedly had its faults, its arm’s-length status set policy creation and implementation at some remove from the capriciousness of politics.

At the current rate we are in danger of ending up with an Economic Renewal Programme that lacks innovation precisely where it is needed. Given the lack of strategic thinking it’s not difficult to understand why Wales has such a difficult job attracting private sector investment and capital.

·      Robert Huggins is Professor of Management and Policy and at the Cardiff School of Management, UWIC, and is director of the Centre for International Competitiveness. Dr Stevie Upton is Research Officer at the Institute of Welsh Affairs. This is an extract based upon their address to the Institute of Welsh Affairs’ National Economic Conference, being held tomorrow Friday 19 February, at the Parc Hotel, Cardiff. Places are still available at the conference. To book contact Clare Johnson on 029 2066 0820, email wales@iwa.org.uk, or click on the Events button on this website.

As Sir Jon puts it, “Despite its difficult birth, the Assembly in many ways has been a triumph – not least because it has been able largely to surmount the problems caused by its original design and deliver some real and important benefits for Wales.” It might be judged that all this is somewhat self-serving since for during practically the whole of the devolution period as the man leading the Welsh civil service Sir Jon was at the helm.

Nonetheless, he has a good story to tell and one that is little acknowledged at a time when, along with the rest of the political world so much of Welsh politics and governance has been discredited by a few bad eggs at Westminster. Sir Jon lists five main areas of success for devolution in Wales:

1. The Welsh budget has been more effectively spent than previously. This is because it has been subjected to close scrutiny by 60 elected members and the four political parties.  As a result it reflects the needs of Wales much better than under the old system in which budget outcomes were determined by the closed, behind-the-scenes dialogue between the Secretary of State for Wales, his two junior Ministers, and a handful off officials. As Sir John puts it, “This is a huge improvement and one which more than justifies the constitutional change that Welsh devolution represents.
2. Political and administrative decision making has also improved This is simply because the decision-makers are subjected to much more scrutiny than ever they were in the past. Moreover, because they are closer to the people they serve Welsh politicians are not exposed to a wide range of informed views and advice. “It is certainly not the case that civil servants are the monopoly providers of advice to Ministers.”
3. The Welsh Government has gained a reputation for good quality administration and sound financial management. Sir Jon cites its record in making subsidy payments to farmers as amongst the best in the EU. Major capital projects, for example the Senedd building, have been delivered on time and on budget (compare Scotland). Legislation has been well prepared and there have been very few challenges to decisions in the courts. All this is extremely I important for Sir Jon since, as he says, “I was very clear from the outset that, given the very narrow majority in favour of devolution, the fledgling Assembly might well not have survived the kind of scandals that have afflicted Whitehall in recent years.”
4. With the constraints imposed by its lack of primary powers the Welsh Government has embarked on a series of innovative reforms. These include free acess to services, either for all or for particular groups, to public transport, precriptions, hospital parking, and swimming. This is just not a matter of free handouts butpart of a wider strategy of improving thehealth of the nation, rather than merely tackling ill health. The Government has also taken itsown line on education by abandoning much of the testing regime it inherited, introducing the Welsh Baccalaureate, and the radical policy of learning through play in the Foundation phase up to age 7. The Welsh Government has also been willing to confront difficult issues in ways that the UK Government has often avoided, for example with the unpopular decision to cull badgers in carefully defined circumstances.
5. The National Assembly itself, despite having many relatively inexperienced politicians, has successfully operated through coalition arrangements.

All these achievements give Sir Jon the confidence to predict that in time Wales will be granted full parliamentary powers on the Scottish model. However, he is doubtful that this will be achievement in the timetable set by the present One Wales coalition Government between Labour and Plaid – that is, at or before the May 2011 election. Reading between the lines of the article, there is a definite impression that, if he were still in charge at Cathays Park, Sir Jon would be advising First Minister Carwyn Jones that he should first sort out the Welsh Government’s funding arrangements and get the better financial deal it deserves from Whitehall.

• John Osmond is Director of the IWA.

A colleague working for a Welsh owned engineering company based in the Midlands is tendering for work with a local council. He recently attended a week long workshop offered by the council to prepare contractors for the tendering process. In essence, this is a good idea designed to stimulate industrial activity and keep investment local. The council trainer stressed the importance of ‘sustainability’, an essential component of the process, requiring the completion of a complicated and weighty vendor assessment questionnaire. Failure to complete the paperwork to less than complete satisfaction results in the vendor falling at the first hurdle. Previously I’d suggested that he ask the council for clarification of ‘sustainability’ and its application to the service on offer. The council trainer, caught in the headlights of an unexpected, yet obvious question, was embarrassingly unable to define it.

I checked for a definition of sustainability on the Welsh Government website and couldn’t find one In fairness, it might be there. It’s a big site and the detail may be buried. However, I did find a definition of sustainable development which, I was informed , entails::

 “…enhancing the economic, social and environmental wellbeing of people and communities, achieving a better quality of life for our own and future generations:

Ø    In ways which promote social justice and equality of opportunity; and

Ø    In ways which enhance the natural and cultural environment and respect it’s limits - using only our fair share of the earth’s resources and sustaining our cultural legacy.

Sustainable development is the process by which we reach the goal of sustainability’.

Thus we go full circle. Starting with a look at ‘sustainability’, we are led to ‘sustainable development’, before being returned to ‘sustainability’. Not that I wish to single out the Welsh Government for lack of clarity as the sustainable development statement is quite detailed. Nonetheless, indistinct use of the sustainability concept is spreading through public and business life like a virus that’s found a willing and welcome host.

The simple definition of sustainability is the ‘capacity to endure’ a trait efficiently displayed by Japanese knotweed, jingoism, malaria, the beano and BBC repeats of Dad’s Army. I’d recommend shying away from using that one.

Clarification and context is incredibly important as ‘sustainable’ approaches are fast becoming a de-facto requirement of working with local government and CSR (Corporate Social Responsibility) savvy big industry. Organisations lacking the intellectual capital to deal with this issue, including many SMEs, are destined to lose out to PR and ‘greenwash’, demeaning the concept and moving us away from what it is purportedly – I think – trying to do. I presume this is to ensure financially viable goods and services are supplied on a consistent basis, while making positive contributions towards an improved environment and society.

• Simon Nurse is Head of Operations with Cardiff’s Capital Coated Steel and Editor of the Industrial Ecology and Sustainable Business website www.iesme.org

In fact Penarth continues to sustain two jewelers shops and despite the presence of Tesco and a recently added Sainsbury, plus the usual rash of charity shops, the town centre is relatively prosperous. Penarth is, of course a large town by Welsh standards, with a population of around 25,000, with about 8,000 having degrees (according to the 2001 census as reported by Wikipedia). On the other hand Canton, on the western side of Cardiff, is less well off. It has a population of around 13,000 and is one of the most ethnically diverse of the capital’s suburbs, with a significant Asian population.

When it comes to surviving the recession the devil is in the detail. At the heart of the challenge is simply making Wales more business friendly which, as it happens, is the theme of the IWA’s inaugural national economy conference, being held at the Parc Hotel in Cardiff this coming Friday.

A high point of the conference will be a discussion between Brian Morgan, Professor of Economics at UWIC and the First Minister Carwyn Jones on the theme ‘Business and Government – Can they do more for each other?’ The First Minister provided a taster in his interview with Andrew Marr on his BBC 1 Sunday programme yesterday, when he acknowledged that the private sector in Wales was too small:

“We have to do more to unleash the entrepreneurial spirit that does exist in Wales. We have to say to people that devolved government works in Wales. We need to make sure that people feel that business can work in Wales as well. Where people have got ideas we have to build their confidence that they can develop those ideas and have the access to capital they need in order to do it. That’s got to be the next stage for us.”

At our conference on Friday Lord Mervyn Davies, the UK Minister for Trade, Investment and Small Businesses and Gerald Holtham, Chair of the Independent Commission on Financing and Funding for Wales will be assessing the challenges we face in getting out of the recession. Chris Rowlands, former Director of the 3i Group and author of the No 10 commissioned study on Venture Capital in the UK will be talking about business access to investment.

And Nigel Roberts, Managing Director of Paramount, David Stevens, Chief Operating Officer with Admiral Insurance, and Graham Morgan, Director of the South Wales Chamber of Commerce will be discussing how we can make Wales more business friendly from the ground up. Altogether, one not to miss. More details can be found on this website. Just click on the Events button.

• John Osmond is Director of the IWA.

The debate over the need for a scientific advisor started at the beginning of 2006 when the Welsh Government’s consultation document on a Science Policy for Wales met with disappointment and controversy. The Economic Development and Transport Committee, chaired by Christine Gwyther, had already raised the interest of the scientific community in a science policy in July 2005, when she initiated a consultation including a programme of meetings with representatives of learned societies.

However, the Government’s consultation document was not well received by the scientific community. Some thought it was simply embarrassing. Sir John Cadogan criticised sharply the policy in the pages of the IWA’s journal Agenda. A longstanding dissatisfaction with the state of science in Wales resulted in the idea of a Chief Scientific Advisor becoming the symbol of a cause.

In September 2007, at an IWA science meeting held in the Swansea City Museum, First Minister Rhodri Morgan announced that a pathfinder post would be created to examine the case for a science advisor. This task fell to Professor Chris Pollock of the Aberystwyth Grassland Research Institute (IBERS). During the course of his investigation, which lasted the best part of a year, Professor Pollock addressed a further meeting of the scientific community also organised by the IWA, this time at Swansea University.

Much of the debate, developed at more IWA conferences and in the pages of its journal, focused on the following issues:

· A need for someone in government with a knowledge of contemporary science.

· Poor funding levels for University science.

· Lack of scientific research centres in Wales.

· Need to revitalise interest in science and technology in schools and for greater public engagement more widely.

· The invisibility of science in the history and culture of Wales and the need for more organisations to represent science.

The debate has led to action on many of these issues. For example, the Royal Society of Chemistry have mobilised support for a cross-party Assembly Group. Computer scientists have created a British Computer Society in Wales. A new Learned Society for Wales is to be founded to represent and support excellence in the intellectual life of Wales. There are many initiatives to stimulate science in schools. The scientific heritage of Wales is being investigated by historians and scientists across the universities of Wales and at the National Museum. Wales is waking up to science.

Despite these developments our new Scientific Advisor will face some testing times in keeping a focus on science, as a more stringent funding regime kicks in. For instance, only a few days after the announcement of his appointment, IBERS announced that it needs to lose up to 70 full time equivalent posts to close a funding deficit expected to reach £2.4 million by the end of the 2011-12 financial year. IBERS is no ordinary institute. Set up by the University of Wales as the Institute of Grassland Research, taken over by a research council which wanted to move it, and later merged with Aberystwyth University, it is a rare example of a big serious research institute in Wales. Let us hope it has now found a formidable champion with the appointment of Professor John Harries.

· John V Tucker is Head of the School of Physical Sciences at Swansea University, an IWA Trustee and Chair of the IWA’s Swansea Bay Branch.

“It is likely that we will have to narrow the range of academic choices if we are to broaden the vocational agenda, maintain Key Skills and support strategic subjects. We have a clear direction from the First Minister to eliminate unnecessary institutional competition. I do not believe that the current structure of post-16 provision is sustainable as it is currently constituted. I welcome the mergers that have taken place within the FE sector, and I expect that more will happen.” 

The Minister reiterated his determination, outlined earlier this year, that more education investment should reach the front-line of schools and colleges, with the implication that the role of local authorities is being held up to scrutiny. The wide range of funding levels between pupils in Wales and across local authorities is being subject to a review by outside consultants that he has already announced.

But the main focus of his speech yesterday was a wider range of vocational subjects being offered to pupils as a result of Learning and Skills (Wales) measure passed by the National Assembly last year:

 “The Measure secures learner access to a more flexible curriculum that will both better meet their needs, and equip them for high skilled employment or further and higher education. Learners can now choose from a minimum number of courses at Key Stage 4, including vocational options. By 2012 all year 10 pupils will be able to choose their course of study from a local curriculum comprising a minimum of 30 Level 2 course choices. This curriculum must also include a minimum of five vocational course choices, thereby ensuring that there is a real choice of vocational options for learners. 

“The entitlement for Key Stage 4 is being introduced incrementally towards 2012 but I am pleased that 91% of schools met their specified minimum course requirement for September 2009. The minimum course requirement for Post-16 will be rolled out from September 2011….

… In terms of the 14-19 agenda, we want to ensure a wider choice between vocational and academic routes. But I do not want that choice to dilute quality. So if we are to be honest with ourselves, we have to recognise that that broader strategic choice, to open up vocational options alongside the academic, may require us to limit subject choice if we are to ensure strategic subjects are taught and key skills learned.

“And for individuals, having more choice means sometimes difficult decisions for young people. Support from a Learning Coach, together with impartial careers advice and guidance, will help young people make the choices that will give them the best chance of success in the future, and help them realise the choices they have made.”

In all of this the Minister stressed that a key need was to persuade society as a whole of the value of the vocational educational route, calling in aide the words of Raymond Williams, in his Culture and Society, written 50 years ago:

Many highly educated people have, in fact, been so driven in on their reading….that they fail to notice that there are other forms of skilled, intelligent, creative activity: not only the cognate forms of theatre, concert, and picture-gallery; but a whole range of general skills, from gardening, metalwork and carpentry, to active politics. The contempt for so many of these activities, which is always latent in the highly literate, is a mark of the observers’ limits, not those of the activities themselves.

·      John Osmond is Director of the IWA.

In the 1997 referendum the Conservatives led the campaign for a No vote on establishing the Assembly in the first place. Now the party, at least in the Assembly, has swung firmly behind extending the existing powers of the Assembly, producing a consensus that increases the chances of a Yes vote being achieved whenever the referendum is held.

Today’s vote now goes to the Secretary of State for Wales, Peter Hain, to respond - First Minister Carwyn Jones has to notify him of the Assembly's wishes within 14 days by letter. Under the 2006 Government of Wales Act Hain then has 12o days - or until 9 June - before laying a draft order for a referendum before both Houses of the Westminster Parliament seeking assent to the National Assembly’s request for a referendum. Alternatively he has to respond to the National Assembly itself explaining why he is minded not to do so.

The complicating factor is that 120 days takes us beyond the likely date of the forthcoming UK General Election, widely predicted to be held on 6 May. If an order is not laid before that date it will fall to the incoming Westminster government to deal with the National Assembly’s request.

Hain’s position is politically highly sensitive. He has made no secret of his strongly held view that this Autumn would be too soon to hold the referendum. Privately, he believes the Welsh people need to experience a number of years of a Conservative government at Westminster before they can be easily persuaded to agree with more powers being handed down to Cardiff Bay. He may be tempted to delay responding until after the general election. By then, of course, he might be out of office and it could be up to a Conservative Secretary of State to make a decision.

These and other factors could have a significant impact on the timing of a referendum. If there is a minority government at Westminster or a hung Parliament, with no party in overall control, then the prospects for a further general election within a year or even months, as happened in 1974, could get in the way of the Autumn date for the Welsh referendum which is broadly favoured in Cardiff Bay.

Immediately following the vote in the Senedd Peter Hain issued the following Press release, emphasising that his mind was focused on the forthcoming general election:

"Carwyn and I have been working very closely together over the past two months to make progress on this issue. I fully support the First Minister's approach and now look forward to receiving his letter so I can begin the necessary preparatory work to take this forward. In the meantime, as Carwyn and I have said jointly, we both agree that the priority in the coming months will be the General Election, the outcome which will be so important for Wales. We must secure economic recovery for Wales, not choke it off with hasty cuts to Government spending.”

Part of the “necessary preparatory work” will be asking the Electoral Commission to produce ground rules for the referendum, in particular devising a comprehensible but balanced question that will be put in it. The Commission have already indicated that this work will probably involve polling and research with focus groups. All this could be used by Hain as reasons for delaying a response until beyond the general election.

In today’s Senedd debate Cardiff North’s Conservative AM Jonathan Morgan explained most succinctly why his constituents and, indeed his party, had changed their mind on devolution. In the 1997 referendum he said they had voted overwhelmingly against the National Assembly. Yet at a Women’s Institute meeting he attended in Cardiff only two years later he recalled a sense of outrage that the National Assembly had fewer powers than either the Scottish Parliament or the Northern Ireland Assembly. This, he inferred, might be the best way to frame the argument for a Yes vote in the forthcoming referendum.

The only note of disagreement in the debate was between some Plaid and Conservative Members. Plaid Cymru Conwy AM Gareth Jones suggested that what the referendum would in practice be about, moving from Part 3 to Part 4 powers under the 2006 Act, was merely an administrative tidying up exercise. The principle of allowing the National Assembly to pass primary legislation had already been conceded by the 2006 Act. South Wales Central Plaid AM Leanne Wood, questioned whether a referendum was really necessary for so small a change.

However, South Wales Central Conservative AM David Melding took them to task. He stressed the symbolic importance of the National Assembly acquiring full primary powers over its areas of competence without having to go cap in hand to Westminster for permission to legislate, via legislative competence orders. This he said would be a major change, one that would have profound consequences for the constitution of the UK as a whole, and would probably be the last referendum on a change to the operation of the National Assembly for at least a generation.

Other AMs warned that despite the consensus in the chamber there was no such consensus outside in their constituencies across Wales. They would need to work hard, co-operating in a cross-party campaign, to get the arguments across to the people of Wales on how they would benefit in bread and butter terms by voting Yes in a referendum to increase the Assembly’s legislative powers.

· John Osmond is Director of the IWA.

At the count, the first stage is to add up the first preferences for each candidate. If a candidate has a more than 50 per cent votes they are elected straight away. If no candidate has a majority of the vote, the lowest-placed candidate is eliminated and that person’s votes are looked at again to see which candidate each of their supporters marked as their second choice. These second preferences are added to the votes for the remaining candidates. If someone has a majority now, they are elected. If not, the bottom remaining candidate is out of the running, and the process repeats until someone does have a majority of the vote. 

In general, AV would have the effect of hindering the Conservatives in Wales more than in England because of the presence of Plaid Cymru as a left-wing party. Conversely, and in England especially, AV can equally help the Conservatives, since UKIP and BNP are the largest ‘minor’ parties and their transfers will go Tory. Had the 2005 election been run under AV, it is likely that Preseli Pembrokeshire and Clwyd West would have remained Labour.

The effect would probably be weaker in the forthcoming general election in Wales. There would be fewer people determined to keep the Conservatives out, and it’s plausible that Liberal Democrat preferences in Wales would skew more to the Conservatives. Also, the Conservatives are probably going to win more seats with clear margins (as they did in Monmouth in 2005). Given the size of swing to the Conservatives in Wales that people are talking about, AV might save some far-end Labour seats particularly where there is a Plaid vote (possibly the Vale of Clwyd and Delyn)  but perhaps also help the Liberal Democrats against Labour in Newport and Swansea. It might also save Montgomeryshire for the Liberal Democrats.

Under first-past-the-post MPs often only have the support of a minority of the people actually voting in their constituencies. In the 2005 General Election, 220 MPs had the vote of more than 50 per cent of those voting, but 426 did not. Sadly, none at all received the vote of a majority of their constituents. This means that most MPs cannot claim to speak for the majority of their constituents, and sometimes even those who do vote in a constituency end up with an MP most of them do not support or like.

The main improvement under AV is that this doesn’t happen because at least 50 per cent of voters have registered some degree of support for the MP elected. This is a real benefit and has the potential to improve social cohesion and community relations. So, for this reason AV is probably worth taking, but only as a halfway house on the road to radical reform.

Groups such as Vote for a Change, which have been at the forefront of the recent campaign argue that the Single Transferable Vote (STV) system is the only way to secure truly fair representation. At the time of writing, Power 2010’s website shows the introduction of a proportional system of voting as the most popular change to be pressed on candidates at the election. The Jenkins Commission recommended AV+, a variation which contains an “element of proportionality” not dissimilar to the one we know in Wales. AV on its own is not a proportional system and Electoral Reform Society projections have shown that it can work out to be less proportional than FPTP across the UK.

It could be argued, therefore, that although there is a definite dividend for the individual as voter, there is a democratic deficit when it comes to counting up the numbers of MPs and seeing which party forms the Government.

Even before the duckhouse summer, campaigns were up and running to secure a change in the electoral system. First-Past-the-Post is so demonstrably unfair that there will always be campaigns against it, just as there will always be those who claim it is simple and transparent and leads to strong government and is therefore unassailable.

The promise of change was there in the manifesto on which Labour came to power in 1997. Jenkins reported, but the issue was shelved. A desire to push the potentially outgoing government for change before the chance disappeared with the removal van leaving Downing Street began to make itself felt early in 2009. Then came the summer of sleaze, and the need to shake up the system became an imperative, highlighted by the strange outcome of the European elections which were nothing if not a kick at the status quo.

Britain has a democratically elected government, but its legitimacy is strained when turnout falls. Electors see no benefit in voting, do not see their vote reflected in Parliament and are unimpressed by the conduct of the occupants of the green upholstery of the gravy train. To persuade the elector to take up once more the stake in society that less than a hundred years ago some citizens were ready to die for, we have to render the system relevant once more.

·      Annabelle Harle is Head of Office with the Electoral Reform Society Wales.

As the Minister for Children Huw Lewis put it, at a conference organised by the Wales Women’s National Coalition in Llandudno Junction at the end of last week, “We will have a legal requirement for the whole of the public sector in Wales to put children in poverty at the head of the queue.

“There are going to be interesting times ahead  in how this will be interpreted. But I shall be looking to see evidence of changes of resource allocation in response to this legislation.”

Child poverty is climbing higher in the Welsh political agenda with the release of a Save the Children report earlier this month showing that Wales is the worst performing part of the UK. The report, Measuring Severe Child Poverty in the UK, revealed that 15 per cent (or 96,000) Welsh children are living in severe poverty in Wales, compared with just 9 per cent in Scotland, 10 per cent in Northern Ireland and 13 per cent in England.

Commenting on the report Huw Lewis said progress on tackling child poverty has stalled in every part of the UK apart from Scotland and acknowledged that we have to do more in Wales. “What we have been doing has not been as vigorous or as comprehensive as it might have been,” he said. “We need a more integrated and wrapped around approach in which particular families are targeted.

“We need to have a clearer focus on extricating families from poverty rather a more generalised ameliorating approach.”

He said the Welsh Government has just 18 months before the May 2011 election to demonstrate that it was getting a firmer grip on the issue. “You can take it that my appointment as Minister for Children is a signal from the First Minister that this is being taken very seriously. I have a roaming brief across government and we will be seeking a co-ordinated approach.”

Huw Lewis will be launching the Welsh Government’s new Child Poverty Strategy in early March. It is likely that this will concentrate on actions that schools and local authorities can take in working closely with problem families in an effort to drive up the school performance of disadvantaged children.

A number of recent reports have already drawn attention to examples of good practice, including Estyn’s Tackling child poverty and disadvantage in schools, published in January, and a Department of Social Justice report, Tackling Child Poverty: Guidance for Communities First Partnerships, published last October. The challenge is to roll out the relatively isolated examples of good practice highlighted in these reports more widely across Wales. A problem with many schools is that their major focus is on getting good examination results among better performing pupils, leaving the bottom 10 to 20 per cent to languish. However, as the Estyn report underlines, improving the education attainment of the lesser performing and generally more disadvantaged children has the impact of improving the whole of a school’s performance.

·      John Osmond is Director of the IWA.

However, on the day similarities were more obvious than differences, since unlike applications for commercial radio licences, the details of the proposals are not in the public domain. Commercial confidentiality was cited as the reason for this coyness. Yet the rush to get the whole selection process done before the end of March, and the disruption of a General Election, probably has more to do with it. Conservative spokesmen are opposed to IFNCs.

In their seven-minute presentations all three bidders committed to taking on the existing news staff of ITV Wales, to making their news material freely available for re-versioning by others, and to providing ambitious websites as well as to encouraging ‘citizen journalism’ – the last of which mixes the estimable value of participation with inestimable value of being free. The beauty parade was not without its coating of cliché – promotional videos with driving music, big headlines and promises of “fresh and innovative approaches”.  Who would offer ‘stale and boring’ approaches?

Not surprisingly, Tinopolis, the Llanelli-based production company, made much of the fact that it was the only Welsh company bidding, and that it would launch an online service, Wales 24, taking material from reporters and citizens right across Wales. Its presentation also flagged that one of its subsidiaries is the producer of the BBC’s Question Time. Winning this bid would add another significant income stream to its many high volume programme strands in Wales – for S4C - and elsewhere in the UK.

Clive Jones, Chair of Taliesin News, emphasised the busload of Welsh partners in Taliesin’s consortium, carefully masking the fact that the bid is being made by ITN – the other ‘partners’ are not joint owners. (ITN is clearly concerned that any fragmentation of news provision beyond the ITV companies themselves, throughout the nations and regions of the UK, could undermine its own capacity for comprehensive coverage of the UK, with some impact on its own business model.) Taliesin’s reporters would be ‘embedded’ in the newsrooms of the three partner newspaper companies – the South Wales Evening Post, the South Wales Argus, and Tindle Newspapers, owners of several weekly newspapers. It would also deploy a fund to train citizen journalists – a concept beginning to sound strangely like the newspaper ‘stringers’ of old.

UTV, Northern Ireland’s ITV company, and owner of two Swansea radio stations, in a noticeably harder-edged presentation, did not hold back from stressing that its news programme for Ulster is the best performing in the whole of the ITV system, with an audience share of 34 per cent, more than twice the share of the current ITV Wales programme. UTV’s managing director, Michael Wilson, said, rather pointedly, that their programme for Wales would be ‘solid news’ from beginning to end, and we would not being seeing “celebrity interviews after 12 minutes”.

On the money front Clive Jones, for Taliesin, hoped that eventually the service could be self-sustaining. But Ron Jones, Executive Chairman of Tinopolis, disagreed and thought that some element of public funding would be needed in Wales for the foreseeable future. He said there had to be protection against market failure.  Michael Wilson, for UTV, wanted the IFNC in Wales to be able to retain any advertising revenue arising from the Welsh news slot, something ITV is strenuously resisting. “It’s time ITV gave something back,” he said. UTV was also the only one to mention that it would be keen to extend into other programmes if ITV could be persuaded to release more slots in the schedule.

The absence of detail behind the PR presentations, however understandable given the tight timescale, is a major flaw in the process since we have no detailed statements about:

i)     the approach of all three parties to the desirable nature of news coverage in Wales;

ii)   he precise level of resource to be deployed;

iii) the extent of specialist coverage; or

iv)  the ways in which this deployment of public money would strengthen the news infrastructure beyond the winners own programme and related online site.

On the last point the answer may be more obviously implicit in the breadth of the Taliesin consortium, although one of the merits of the IFNC proposal is that, as intended, it creates an open rather than closed system. All kinds of permutations could develop over time regardless of what bidders say at this moment.

Another long term implication is already apparent, which may become more significant than anything else: namely that this may be a first skirmish in a battle for the ITV franchise in Wales, when the current ITV licences come to an end in 2014. For the first time the Digital Economy Bill gives Ofcom the ability to create single licences for Scotland and England. One already exists for Northern Ireland. Although Wales is not specifically mentioned in the bill, a licence for the whole of England might imply a licence for Wales by default. In that situation it is not difficult to foresee a tussle between Tinopolis and UTV for the Welsh licence.

All in all Wales has a clear interest in ensuring that the IFNC concept is not derailed.

·      Geraint Talfan Davies is Chair of the IWA.

Motives behind blogging ranged from the journalistic to the cathartic and even the confessional, but panellists agreed that blogs appear to play an increasingly important role as a forum of public debate with knock-on consequences for the media and politics in Wales. Discussion centred on the importance of blogging as a communication tool – especially in the context of political discourse – and we were soon reminded of its power in having already claimed its first Welsh political scalp.

Panellists commented that blogs often have a loyal and committed following – and a captive audience – but breaking out of small niches to find a wider audience remains a particular challenge.

It was agreed that the traditional media and journalism have entered a period of declining dominance in terms of news, politics and the provision of facts to public debate – and that this will continue unless new business models are developed. The hegemony of conventional journalism as the gatekeeper of news is threatened not just by new technology and commercial and community competitors but, potentially, also by the audience it serves.

This led our panellists to discuss the emergence of citizen journalism and its role in reporting local events. They acknowledged the difficulty of ascertaining the accuracy or even veracity of such reporting, especially when bloggers are pursuing causes. But they also acknowledged that this was also a problem in professional media where there is increasing and worrying trend simply to use or recycle press releases as copy.

Nonetheless, the panel welcomed the concept of citizen journalism as it directly challenges the media’s monopoly on what constitutes news and how it is reported.  It was argued that this monopoly has finally been undermined by the opportunity for anyone with a laptop and the nous for a story to raise issues that the media often ignore – and even in some instances, set the news agenda in what has become a very short news cycle.

It was heartening to hear that our panellists (which included a politician and lawyer) do not feel too circumspect when blogging. Nonetheless, in the ensuing discussion the potential pitfalls inherent in this almost exclusively voluntary and part-time activity were clear for all to see.

The session concluded with a look to the future. The panel foresaw:

·      A continuing media deficit in Wales - evidenced by the fact that nearly 90 per cent of daily newspaper readers in Wales are reading papers with no Welsh content.

·      The spectre of state intervention.

·      The potential for micro publications (possibly using the successful template of the Papurau Bro) and

·      The advent of US style Clogs - Community Blogs.

·      The development of hybrid media with a more systenmatic interaction between the professional journbalists and citizen journalists.

It is commonly asserted that the internet ‘changes everything’. But the general consensus was that nothing fundamentally changes the rules of the game, it just changes the way the game is played. And in a country like Wales, with its obvious deficit in terms of media plurality and news provision, this at the very least raises some interesting (and some might say worrying) questions.

·      Heulyn Davies is a Committee member of the IWA’s Cardiff and Valleys Branch.

The second constitution, the Laws in Wales Act 1536 abolished what remained of the distinctive Welsh legal system and tied Wales into England’s parliamentary system. It was rushed through the English Parliament with the result that after it had had been passed, it was found to contain a number of defects. Consequently, it was necessary to return to the Welsh constitutional question just seven years later. This was our third constitution - the Laws in Wales Act 1543 - which tidied up the system that was established by the 1536 Act and which provided the framework for governing Wales until 1999.

Which brings us to the fourth and fifth Welsh constitutions – the Government of Wales Act 1998 and the Government of Wales Act 2006. As the Presiding Officer said, “The 2006 Act is far superior to any of Wales’s previous constitutions. It is not perfect by any means, but is has a unique quality, in that it has the potential to enable Wales’s constitutional system to evolve according to the will of the people of Wales.”

We will see next Tuesday whether Opposition members in the Assembly will allow that will to be expressed sooner rather than later when they vote on the Government’s motion to trigger a referendum on increased powers.

Meanwhile, only yesterday the Assembly’s Subordinate Legislation Committee decided to re-brand itself as the Constitutional Affairs Committee. The change was explained by the Committee’s Chair, North Wales Plaid AM Janet Ryder in the following terms

“The National Assembly for Wales has undergone many changes since the 2006 Government of Wales Act and its remit has increased greatly as a result of changes put in place after the Act. The committee’s role now goes far beyond technical scrutiny of Subordinate Legislation – it also scrutinises the merits of these laws, any public policy issues that may arise from them and a variety of other matters. It is the only Assembly Committee in a position to look broadly at the developing legal competence of the National Assembly and how those powers are acquired – in short at the Welsh Constitution.”

There it is in a nutshell, our constitution evolving before our very eyes. How far and how fast we evolve will be up to us, whenever that referendum comes. In the words of the poet Antonio Machado (1875-1939), a supporter of the Republic in the Spanish civil war:

“Our footprints are the only road;

nothing else;

we make the road as we travel.”

· John Osmond is Director of the IWA.

There is nothing like a row between different disciplines in the academic world, and there was certainly an edge to Beenstock’s lecture, entitled Global Warming: the Greenhouse Gas Illusion. 

According to Beenstock climatologists are naïve data analysts and more volatile than the climate. “They don’t understand statistics,” he said. Global warming was “a fluke”. The panic about global warming was the result of a “doomwatch psychology” initiated by the Club of Rome 40 years ago. IPCC predictions are “unfounded” he declared, adding that there was “no need for carbon abatement”. The Stern report was “much ado about nothing”. It was “fortunate that Copenhagen had failed”. European carbon policy was a “white elephant”.

His argument was that data from the 20^th Century does not support the greenhouse theory, but that when carbon emissions accelerate, global temperature increases temporarily, but not permanently. “Global warmers have made the simple error of confusing a temporary effect with a permanent one”. 

He was asked why no-one else had spotted this fundamental statistical error. In response he referred to the “tendentious” nature of climatology, and claimed that he was “99.8 per cent” sure of his conclusions – always a dangerous contention. He said he had been attacked for his views “as a simple economist who had strayed out of his area”.

This was an altogether a more no-holds-barred, and political, performance, than Colin Robinson of Surrey University delivered at the same event in 2008, although even he spoke of the climate change lobby as a religious movement that regarded sceptics as heretics. Robinson even quoted the same 1975 Newsweek article that Beenstock cited, worrying about prevalent fears of a new ice age. Both espouse a benign view of the capacity of markets to deal with issues.

The Hodge lectures have often provided a valuable contrast to economic orthodoxy, especially valuable in social democratic Wales. But do I detect a trend in these lectures, and perhaps an orthodoxy of view within the Institute of Applied Macro-economics? Discuss.

·      Geraint Talfan Davies is Chair of the IWA.

Maybe that’s too harsh. Perhaps the business benefits of more socially responsible policies are not immediately obvious. Up to a point I would have some sympathy with that. Businesses exist to make profits and with twenty years in industry behind me I am well aware of the pressures to perform. Jaded business leaders shake their heads at the inability to put the finger precisely on the pounds, shillings and pence that CSR can add to bottom line financial results, despite the suggested benefits. But so what? Should it really be just about that? Do we want to live in a world where extra profit is the only motivation for doing a little bit of good?

Well to prove that exercising social responsibility can give you a little more than a warm fuzzy, the Guardian recently reported (28th Jan) that the chocolate maker Green & Blacks will be switching their entire worldwide beverage range to fair-trade by the end of a next year, the first major company to do so. This commitment is about much more than being charitable. There is money to be earned and Green & Blacks are both exploiting the opportunity (they are not a charity) and sharing the benefit. They are proving it’s possible to have the penny and the organic bun - a fine high profile example of wearing CSR on your sleeve and using it to drive the business forward.

The Green & Blacks initiative will go part of the way to raising fair-trade commerce from £660m in 2009 to an estimated £1 billion in 2010. On top of this the Co-op, arguably the UK’s best example of responsible business, reports that:

“Like-for-like sales (including VAT and excluding fuel) increased by 5.0 per cent in the three-week festive trading period to 2 January, and by 4.8 per cent in the 12 weeks to 2 January. This is the sixteenth consecutive quarter of like-for-like sales growth. In the same 12 weeks, total year-on-year sales (inc. VAT, exc. fuel) grew by 66 per cent, boosted by the acquisition of Somerfield”.

Growth for 16 consecutive quarters would be pretty exceptional even outside of the recent economic turbulence.

Businesses always have and always will exist to make profit. Few would dispute or disagree with that. But rather than pursue relentless growth at all costs – a situation that very nearly delivered financial apocalypse – it is right for companies to work on all aspects of their triple bottom line: human capital, natural capital, and business profit. What I hope to see is a business landscape populated increasingly by organisations that decouple profit at all costs from core management principles and help to drive improvements in our society. After the events of the last few years, a 21^st Century mantra of people, profit, planet is perhaps not a bad one.

·      Simon Nurse is Head of Operations with Cardiff’s Capital Coated Steel and Editor of the Industrial Ecology and Sustainable Business website www.iesme.org 

This shake out in leading Welsh Labour figures that will occur in the next year is unprecedented and adds to the uncertainty and change around the future of Welsh politics. Most observers believe between 10 and 12 Welsh Parliamentary seats will change hands at the general election, expected to be held on May 6. Together with the outcome of the election itself, whether a minority government, hung Parliament, or a narrow lead for Conservatives or Labour, this  will directly affect the prospects for the next Assembly election in May 2011.

In al of this Labour will remain the largest party in Wales but likely to be much reduced from its current crop of 29 MPs and 26 AMs. The number of Welsh MPs and AMs could fall to around 20.

In these circumstances  tremendous amount will depend on the calibre of the candidates Labour chooses to replace those who are standing down. At the Assembly level, the choice of Mick Antoniw, a solicitor with a string campaigning record to fight Pontypridd, and Vaughan Gethin, a prominent trade unionist who has chaired the Wales TUC to fight Cardiff South and Penarth bodes well. If Rhodri Morgan’s former key policy adviser Mark Drakeford is chosen to succeed him in Cardiff West, the party in the Assembly will be strengthened even more.

With the likelihood of a referendum on increasing the Assembly’s powers taking place this Autumn, all these changes mean that Welsh Labour faces an existential choice about what kind of party it wants to be. Does it strike out as a more autonomous organisation, stressing distinctive left-of-centre and more distributivist policies from English New Labour? Or does it opt to emphasise Labour’s essential British identity along with competing for the centre ground with the Conservatives, for example in stressing the outcomes of public service delivery, especially in education? Can it find a different way for framing these debates that unify the party in Wales as well as providing a narrative that can excite activists and attract new voters in an era of coalition politics? None of these are easy questions.

·      John Osmond is Director of the IWA.