Comments On Welsh Politics
Les Broad
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Copyright 2011 Les Broad
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COMMENTS ON WELSH POLITICS

WHAT IS WRONG WITH WALES?
A Personal Opinion Of The Principality's Economic Development Strategies In Action
Wales is not a rich country. It has riches in its countryside, its scenery and its coastline, it is home to the Welsh who are a warm and hospitable people but its economic performance leaves much to be desired. The withdrawal of The Children's Society, although not a business, from Wales typifies attitudes as it was met by wailing, gnashing of teeth and at least one high profile resignation instead of anyone recognising the move as an implication of devolution and grasping it as an opportunity - after all the Society's infrastructure in Wales still existed and that infrastructure could have been taken over by a separately registered charity with identical aims and the same staff and financial supporters (by now probably lost to Wales).
The incident demonstrates all too clearly that Wales is simply too used to playing the victim and receiving handouts; it doesn't have the mindset to run its national affairs as a cohesive whole. The purpose of these thoughts is to offer, from a personal perspective, some circumstances which might contribute to this, and what might be done to make things a little better.
There are restrictions imposed by geography and the existing communications infrastructure. Mountains, by and large, tend to stay where they are - movement on geological timescales is of no great value to the present population - and any grand design for the future of the country should recognise this. Wales is, partly as a result of its geography, not well served by road or rail. The A55 from the English border to Holyhead is a fine artery, when great chunks of it aren't closed, and industrial development is creeping along the North Wales corridor. That will bring its own problems as imported management puts pressure on a housing market already inflated by what might clumsily be called the non-indigenous population. The authorities in Wales, however, seem blinkered and only capable of seeing this influx of population as a problem, ignoring the opportunity that it represents. Many of these people have spare capital and ways can be found - can be quite easily found - to encourage investment of part of that spare capital in the stock of locally owned small businesses.
The transport links are primarily the already mentioned A55, the M4 corridor across South Wales and the central routes to Aberystwyth and Cardigan Bay. Anyone who has ever driven from one end of Wales to the other knows that it is not easy - England has the M1, M6 and A1, dualled from London to the Scottish border, and Scotland has its share of equally good roads. Even the A9 has enough dualled sections to make it a pleasure to use. Wales has the A470, for most of its length no better than a country lane. Rail links in Wales are slow and expensive, and most unlikely to improve, and the country is really too small to make regular air transport worthwhile. Unless, that is, some really determined entrepreneur can duplicate the sort of services that island-hop in various parts of the world.
If Wales is going to see a significant increase in its gross domestic product it is going to be by playing to its strengths, by embracing new ways of doing business and by adopting a "yes we can" spirit instead of the woefully prevalent "there's a rule that says we can't" attitude. There are plenty of budding entrepreneurs in Wales, just as many as anywhere else, and all they need is a little help.
The obvious question is where is that help coming from? Much has been made of the Objective 1 funding that Europe has seen fit to give us. But let us think about this carefully, and in particular where all those pounds came from, perhaps by following the route of just one pound. We'll start, by way of an example, with a publican in, let's say, Bala. He makes a profit and pays some tax to the UK Government, including that pound. Next, the Government passes it on, with millions of others, to the European Union (when exactly did we the people authorise Government to do this?). At the same time Wales, or at least a large part of Wales, has applied for and been given Objective 1 status. At this point we should sit back and reflect for a moment. While that pound was in the publican's hands he had a perfectly free choice of what he could do with it. He could have spent it on his business, or given it to charity. He could have invested it, perhaps in a way that would have won him a tax advantage. Instead it went in tax. But now that pound has come home to Wales as part of the Objective 1 package. So, we seem to be back where we started, don't we?
Absolutely not. All this European money comes with conditions. It can only be used for certain things, and some really useful things are totally forbidden. To see what the practical effects are for someone wanting to start a business we must think about what he needs to get that business started. Underpinning everything is money. But Europe says its money, which now seems to fund every one of the myriad schemes on offer, cannot be used for working capital. And what is every entrepreneur's biggest problem?
Working capital. Objective 1 money might be a coup for the country, but it isn't going to provide direct help to those with the ideas that will increase our stock of small businesses.
So our budding entrepreneur is left with the business support agencies that proliferate in Wales, and comes up against all sorts of problems. First, we should try to establish who these organisations are, and what their role is perceived to be. Sitting at the top of the tree is the imperious Welsh Development Agency, affectionately (or otherwise) known as the WDA. Its staff have been known to say some weird and wonderful things, such as "the Agency isn't really geared to support small businesses" or, remarkably "the best business advice I can give you is to go to Sunderland". Really. It does all the headline-grabbing work in organising major inward investment projects, which create lots of jobs and have spin-off socio-economic benefits to the area in which these investments are located. But the cost per job created is usually high, the company moving in is rewarded with all manner of grants and other financial help and there is usually a need to import senior and (at best in the short term) middle management. Despite these downsides inward investment is perceived, politically, to be a good thing. And so it is, all the time that the global economy is in a fit enough state for our inward investors to thrive.
When those conditions change our inward investors must look at their production capacity. We can imagine the scene in some far-flung boardroom, say Tokyo, Munich or New York. The sales director insists the market for whatever their product might be is diminishing and the company is overproducing. The chairman dictates that capacity must be cut and wants to know where. The finance director announces "Well, we invested twenty billion yen in our Japanese plants, half a billion dollars in our US plants and millions of marks in Germany. But those nice people in Wales gave us the factory and lots of subsidies, so we'll close that one". We've seen this happen in Wales and elsewhere in the UK; surely the economic development of Wales is too important to be decided in a German, Japanese or American boardroom? There is also the question of retention of profit. It isn't exactly rocket science to devise an international corporate structure that circumvents our somewhat simplistic corporate tax regime, so while the UK Government might collect lots of tax and National Insurance from the employees of our inward investor the corporation tax is unlikely to be a realistic proportion of profits derived from UK activities.
For all its faults the WDA does offer some constructive help through various programmes. It doesn't market those programmes terribly well and keeping track of what's available and what's closed down is pretty nearly impossible. The Agency also has an unfortunate history of supporting lame ducks. It's not so very long ago that a quite well known Welsh theatre company adapted a play to make it more topical and as a result it included, as a reply to a question about the health of a business, the immortal line "well, the WDA gave us a grant. We've closed down now."
We used to have, working alongside the WDA, the Training and Enterprise Councils.
Nobody ever managed to discover what these entities were supposed to be doing so they were swept away and replaced by ELWa. Nobody knows what they are for, either. For all practical purposes this institution can be ignored since it seems to have no practical purpose.
We still have the Local Enterprise Agencies (each referred to as an LEA as civil servants are so fond of mnemonics) and the County Council Economic Development Departments, and if there ever was a case of policy implementation gone completely and utterly insane these institutions are its incarnation. Wales is not a large country and has a population not dissimilar to a middle ranking English conurbation. Yet in each of the many counties in Wales there is at least one LEA and an Economic Development Department operating a range of schemes devised to attract business to a county in preference to its neighbours. It is quite obvious to even the meanest intellect that this involves absurd levels of duplication of roles, massive expenditure and, most unforgivably, confusion for the end user of the system, the entrepreneur. Take, for example, a simple trip from Holyhead to Wrexham. It's really not very far but it necessitates passing through no less than six counties and consequently the catchment areas of scores of so-called business support people. Perhaps we have simply lost sight of the plain fact that business people make money and part of that money pays for the politicians and civil servants who between them produce nothing. The difference between earning and merely being paid is not, one feels, appreciated in the corridors of power.
A few examples of these agencies in action might be illuminating. A marketing grant application was made to Denbighshire, and had to be made quickly as the county's allocation of funds for the year in question was almost fully accounted for. Bearing in mind that the application was made on 10 April and the year began only on 6 April several questions beg to be asked, such as what, exactly, do all these people do all year? Anyway, the application was refused, on the grounds that the supplementary questions had not been answered. On enquiry it was discovered that those supplementary questions were contained in a letter that had not been sent to the applicant. On a separate occasion an enquiry was made by telephone to a council economic development department to see if there would be any grant aid in a particular situation. The answer was negative. But, a few short hours later the associated LEA called back and advised that for the claim to be dealt with a meeting with the LEA's Chief Executive was necessary. The applicant drove to the meeting, a round trip of 28 miles, merely to be told in person that no help was available. On yet another occasion, seduced by the details in an explanatory leaflet, an application was made for an employment grant. It was declined on the grounds that "job" meant someone employed by the business, the partners in the business apparently not having "jobs" within the meaning of the scheme although this was very carefully not explained in the leaflet. The reason for this is really quite clear: at the end of the year or whatever the relevant period might be, the scheme administrator could say to his superiors "we had hundreds of applications and gave the money to these five cases." In this way he has, in his own civil service mind, justified his time and his very comfortable salary, whereas had the leaflet explained all the conditions he would have been forced to say, at the end of that same period, "er, we only had five applications all year and approved them all in no time."
There is a very strange qualification criterion for grant aid, and that is that the business must demonstrate that it will not go ahead without that aid. Fair enough, one might think, given that it is taxpayers' money and it should be applied where it's most needed. But grants are paid retrospectively. Thus they can only be paid once the business is up and running. These two states are mutually exclusive and therefore, logically, it is impossible to qualify for any grant.
Even when there is allegedly beneficial communication between agencies the end user is unlikely to benefit. Take the example of a food business wanting a loan. On applying to the WDA the business was told that, yes, the WDA had a loan scheme and lots of money, but it didn't cover food businesses. But Denbighshire had a loan scheme that did cover food businesses. An application to Denbighshire led to the revelation that the scheme existed but didn't have any money. The loan was never received. As an aside, that same business applied to the WDA for funding when an expansion opportunity arose. The business was in some difficulty but taking advantage of that opportunity would have opened up economies of scale and it would have survived, safeguarding 24 jobs, and created at least 12 new jobs. Funding was refused as it was required for working capital, according to the WDA's definition, when it was actually required for the purchase of machinery. The firm closed a few weeks later and 24 jobs were lost. The wholesale customers transferred to other producers, who did not make any increases in their workforces, while the retail customers simply had to make do with supermarkets where no extra jobs were created. Of the 24 employees, some are still unemployed while others have found employment. Some of the most skilled employees have taken jobs in different fields and their skills have been lost.
So where does all this leave our entrepreneur? Well, it depends on where he is and where he wants his business to be. If he wants to run his business locally, he can access the business support organisations easily enough, although the chances of finding just one person capable of telling him what he wants to know are, frankly, nil.
He'll be told about courses, about whatever financial help might be available, but he won't be told about all the conditions, at least until he's built the availability of grant aid into his financial projections. Then he'll find out that he can't have any money after all.
He might get some help with preparing a business plan, but he would be wise not to rely on that help being worthwhile - he should ask whoever is helping him about their history.
It's unlikely that he'll find someone who has ever run a business. We can add another to the list of improbable but true quotes: "I know what I'm talking about, I've been a business adviser all my life" being something once said by someone who had never known anything other than salaried employment. After all, if the adviser has never experienced the elation of success in business, or the stomach-churning that comes with not being able to meet bills or pay the wages how can he possibly be of any help to someone entering that daunting arena for the first time? Given the quality of people occupying positions within the business support organisations our man will be lucky if he's not completely confused and put off by the experience. Indeed, it is not unknown for people to conclude that the entire system exists (a) to explain why there's no help available, and (b) to deter anyone from creating a new business.
Of course, if he lives in, say, Conwy and wants to establish his business in some other place, let's say Cardigan, the local people won't have the slightest interest in helping him. It's also likely that those in his chosen area won't be too enthusiastic because it's hard when someone isn't in a position to react to a summons to the adviser's office. If he's in this situation he's on his own.
We might spend a moment thinking about what our man definitely won't be told. He's unlikely to have the insurance requirements of his proposed business explained to him (and who is going to explain the basics of, among other things, public liability insurance, much less the ridiculous length of time he's going to be required to retain the certificate of insurance?), nor is he going to be told about how to find the right solicitor. And he absolutely will not, under any circumstances, be told to get himself a good accountant because good accountants are so much better at giving business advice than business advisers. If our man thinks about accountants at all he'll probably find somebody cheap, which might well be why, among the few firms of good ones, there are so many accountants in North Wales who do more harm than good.
Latterly we have seen the introduction of Finance Wales plc, administered from Cardiff but we'll let that pass for now. What a golden, golden opportunity this was to get it right, but how very, very wrong it's been got. All that has been done is to introduce a raft of new schemes with complex new rules to add to all the other schemes with equally complex rules that we've already got. As a result, looking at the situation from the end user's perspective which those in charge of our business support network have clearly never done nor been able to do, there is yet another tier of confusion to add to that which already existed. By way of an example let us look at a typical - and real - new business to see who in the business support network that particular budding entrepreneur, we'll call him David, has had to deal with. Firstly there's a Business Support Executive from the WDA (1) who has really contributed little. The there's the manager of the appropriate WDA technical assistance programme (2) who has engaged a consultant (3) who can only operate once the go-ahead has been given by a faceless, behind-the-scenes official (4). The LEA provided a business adviser (5) who proved worse than useless, prompting a complaint to the LEA's Chef Executive (6) and was replaced by another business adviser (7) whose function it is to guide a grant application through to approval by the county council economic development department's rubber stamping official (8). David was guided towards an application for a specific WDA grant and this involved a meeting with a local adviser (9), who said he thought approval would be a formality, and correspondence with someone else in Cardiff (10) who said David couldn't have it. An application was also made to Finance Wales for a loan, declined by the manager (11) because his fund couldn't lend to service businesses (but since every business must provide service this neat little get-out must be very useful). Thus there have been no less than eleven people paid from the public purse whose joint contribution to the development of David's business has fallen a very, very long way short of justifying their existence.
A word should be said about the timescales that these people work to, bearing in mind that an LEA business adviser will happily arrange two meetings when one would suffice as this helps him meet his client contact targets. David, in common with others in a similar position, needed action to be taken quickly - a reaction time from these people measured in minutes would have been ideal, hours a realistic compromise. But it was not minutes, nor hours, nor even days.
Weeks of inactivity passed. The timescales were such that the word that should be said is this one - geological.
How, then, should Finance Wales have been structured? Perhaps because the simplest structure is usually best it would be ignored by politicians and those who enact what they perceive to be the will of politicians, who see beauty only in complexity, complexity that they no doubt hope will bamboozle the rest of us. So let us define that simple structure.
First, the WDA should have been slimmed down (a lot) and had its role defined as managing inward investment projects and promoting Wales overseas. It is still a broad remit.
Second, the remaining parts of the WDA and all the LEAs and council economic development departments should have been scrapped, legislation being enacted to stop the counties reintroducing them.
Third, the staff of these scrapped institutions should have been evaluated carefully so that the talented were retained while the empire builders, the clockwatchers and the downright incompetent were consigned to oblivion.
Fourth, Finance Wales itself should have been an institution where anyone, our friend David for instance, dealt with a single person, a case officer with a small portfolio whose task it would have been to focus the efforts of others in the organisation to achieve his client's objectives. In order to do this, Finance Wales would have needed to create a range of aid packages including soft loans on negotiable terms, but not with the level of risk aversion we find in the clearing banks. It should of course have subscribed to the DTi's Small Firms Loan Guarantee Scheme. It would have needed equity finance packages encompassing what Xenos now provides, plus venture capital funds reaching down to the very lowest level and structured to provide equity finance to unincorporated businesses. A model for such a scheme already exists in the private sector which was rejected out of hand without proper examination when it was offered to Finance Wales.
Fifth is a negative. There should be no grant schemes. These may have a place in certain areas, such as charitable or home improvement grants, but they have no place in economic development. When a grant is given the money is gone for ever, whereas if an equivalent amount is invested by way of equity finance in an applicant business it should be recovered, with a worthwhile profit, to be recycled into more small businesses.
Sixth, the staff should have been trusted enough for management to have faith in their ability to make decisions, in particular decisions involving quite high degrees of perceived risk. At the moment rule books govern everything and those rule books should have been thrown out so that those in the business support network with talent could use their discretion instead of only their ability to read rules.
Seventh, given that Finance Wales would offer a range of equity finance packages at all levels from microbusinesses upwards, the fact would have had to be faced that it is one thing putting money in to a business, and quite another getting it out. An exit route needs to be planned for at the same time as the input. To this end, there is no reason why, given the political will, Finance Wales could not have been a market maker, operating a mini stock market for Welsh businesses through which stakes in large, medium and small businesses in the Principality could be bought and sold. Properly structured and marketed, it would have been a major benefit to growing Welsh businesses.
Eighth, each of our counties has certain financial obligations to meet annually, one of which is insurance which can be used as an example of what might be achieved. Denbighshire, for instance, spends a considerable sum on economic development of the county every year but fails to practice what it preaches - it places all its insurance through a Manchester-based insurance broker. In the unlikely event of there not being a broker in Denbighshire, or come to that Wales, capable of handling Denbighshire's account it is surely not beyond the bounds of possibility for economic assistance to be given to a Welsh brokerage to headhunt the necessary staff. Finance Wales could, however, have gone a stage further. It could have passed all the insurance requirements of all the counties in Wales (and those of the National Assembly) through an offshore captive insurance company through which the reinsurance market could be accessed. A simple feasibility study would demonstrate the cost savings of doing this and Finance Wales would be the obvious vehicle.
But so many opportunities have been lost. We still have a confusing business support system. We are still giving money away in grants instead of investing in businesses. We don't have an exit route for private investors in unquoted Welsh businesses. We don't have equity investment schemes that are nearly far-reaching enough. We are throwing money away in duplication of effort, much of which is counter-productive. We can rationalise costs across Wales, insurance being one example, but have not done so.
Instead of adding tiers to an already complex bureaucracy we should be simplifying but we are not. We spend six figure sums on promoting the Welsh language in South America when people in Wales are desperate for funds to start businesses. The National Assembly spends six figure sums on job advertisements in newspapers, aided by employment agencies not even based in Wales. The country will not stand on its own feet while we continue to shoot ourselves in the foot - when will those pontificating in the Assembly's debating chamber realise this?
(Written 12 November 2001 – things have changed since, but not for the better.)

THE WELSH ASSEMBLY ELECTIONS 2003
A PERSONAL VIEW OF THE RESULTS
(I stress that this is a personal view that I put forward simply to state a case and it is written with only newspapers and TV news broadcasts as sources of information.)
Now that the dust has had a month or so to settle after the Assembly (I simply cannot
find it within myself to call it the Welsh Assembly Government – it sounds too ludicrous) elections some quiet reflections might be appropriate. Firstly, I think I disagree with a comment made by Peter Hain on election night: the low turnout may mirror the situation in other parts of the UK and further afield, as he says, but it is – or certainly should be – a cause for concern here in Wales where we were voting people into an institution created after a referendum in which only one person in three out of the Welsh electorate indicated their desire for its existence. The dismal turnout of 37.7%, according to the figures published in the Daily Post newspaper and using an estimate of the size of the electorate in Blaenau Gwent which wasn’t included in those figures, is the clearest possible indication that the Assembly has achieved, or is perceived to have achieved, nothing. Indeed, the principal memories of its first term will be of much unseemly wrangling over its desire to spend huge sums on an unnecessary new building and an endless succession of advertisements for well paid and largely Cardiff-based jobs. I doubt if those jobs would have been created had the Principality still been under the aegis of the Welsh Office; I have even more doubt about whether their impact would have been much missed.
Second, and of more immediate relevance, is that the Labour Party have 30 out of 60 seats and (with a neat piece of sleight of hand in the matter of the appointment of a Presiding Officer and his Deputy) a working majority despite having secured only 14.8% of the available votes, representing much less than half of the votes actually cast. If this is democracy in action it seems to fall a little short of the ideal. Although I, personally, am some way removed from being a supporter of the Labour Party I have a great deal of respect for Rhodri Morgan as an individual, but he would do well to remember, when he pontificates at home or on the travels in which he will inevitably indulge at our expense, that he speaks for less than 15% of the Welsh population. Perhaps an acknowledgement of this fact would have been in order instead of the rather dictatorial offerings in the hours following the results; “we’ve won the election and can do what we like with the country” is not what most people want to hear. Our current Prime Minister Blair is trying it on from No. 10 and will end up falling flat on his face; Rhodri Morgan is twice the man that Blair could ever hope to be and has at least some acquaintance with truth and realism so his failure to admit the real position is a little disappointing.
Presumptuous though it may be, perhaps a mere voter can offer a few words of advice, with which I freely concede others may disagree, to those returning to the ivory tower in Cardiff, those going there for the first time and the comfortably remunerated droves of staff who do whatever it is that they do to justify their salaries. I offer the following few simple points.
(1) Businesses create wealth, politicians and quangos do not.
(2) There is a difference between earning and merely being paid.
(3) The people of Wales are more important than its politicians.
(4) Those employed by the Assembly are civil servants, and should be reminded from time to time what those words actually mean. Try looking them up in a dictionary.
(5) The Assembly was supported in the referendum by only one person in three, and the controlling faction has the support of only half that number.
I also have to ask myself if, given all the circumstances, the Assembly has a big enough mandate to justify its continued expensive existence, or should it be replaced by, for instance, a body made up as the UK Independence Party suggests. Expecting a collection of individuals whose first post-election acts were to ladle more taxpayers’ money into their pension pot and to devise ways of adding extra chunks to their salaries, already running at well over eight hundred pounds per week and practically unmatchable anywhere in North Wales, to declare themselves surplus to requirements is, I acknowledge, an idiotic notion but the question has to be asked. Were I to answer my own question I would be forced to conclude that no such mandate exists. Does the average person in the street really want to pay tax to his County Council, more tax and national insurance (tax by another name) on what he earns and VAT on what he spends, assuming he has anything left to spend, and ultimately Inheritance Tax on what he leaves behind when he dies to finance legislatures in Brussels, Westminster, Cardiff and his local county town, all telling him what he can and can’t do? Does the average businessman want to pay colossal sums in business rates, tax on his profits, tax on the payroll, VAT, tax and national insurance on whatever is taken out of the business in salary and tax on the income in his pension fund to fund four armies of busybodies to tell him how to run his business? If the answer to either question is ‘yes’ I think I’m living on the wrong planet. I know we have, at the moment, a Prime Minister who is hell-bent on solving part of this problem by devolving power to assemblies in Edinburgh and Cardiff while at the same time letting sundry Europeans take away the rest of Parliament’s power but it isn’t the right way to go. His mammoth ego-trip at the expense of the British people will anyway take years to correct once he’s gone and if we don’t do it we’ll end up having Latvians telling us how to live our lives – anyone who remembers the American TV show ‘Taxi’ should recoil in horror at that prospect.
So, if the Assembly has managed to prove, in its short existence, both its profligacy and pointlessness, what should come into being to replace it? It’s an interesting question.
There is a case to be made for a county-based entity since county infrastructures already exist. They may not be brilliantly run, but some functions of some counties are run well while other parts of other counties (or, indeed, the same counties) are little better than shambolic. It wouldn’t be beyond the wit of those in high places within the existing counties to work together, hand in hand with the Welsh Office, with the objectives of making all our counties reasonably efficiently run, creating a cohesive strategy for Wales and taking a unified voice to Westminster. It might even have the beneficial side-effect of eliminating a lot of the wasteful duplication of effort that afflicts the six North Wales counties, which seem to be competing with each other rather than working together. Competition or co-operation? I know which I’d take in this instance, given the choice. It doesn’t take long to drive from Wrexham to, say, Llangefni but in that short distance you’d pass through the catchment areas of six (yes, six) local authorities – Wrexham, Flintshire, Denbighshire, Conwy, Gwynedd and Ynys Mon – all busy duplicating what the other five are doing. Madness, isn’t it?
Having said all this, what do the Assembly election results really tell us? Firstly, I suppose, those results suggest that there probably is a left-of-centre leaning in the political scene in Wales, Plaid Cymru being of that persuasion as well as Labour. Plaid took a bit of a beating, for which there was no obvious reason except the possibility that a lot of their supporters stayed at home (maybe in protest at being governed from Cardiff, that epicentre of the Welsh language). While we’re on the subject of Plaid Cymru, isn’t it about time they took their election posters off the many trees and telegraph poles they nailed them to? The Conservative voter is under-represented, even taking into account the bizarre voting system that lets a losing candidate, polling a mere couple of thousand votes, get his (or her) hands on a forty grand a year job. The Liberal Democrats seem to have a bit of support even though nobody has ever known what they stand for.
Secondly, the results say plainly that few people believe the Assembly can affect them.
Does this view reflect the truth? Does it say that the institution is doing good work but has a PR problem? Does it say that the ordinary voter has a problem with an individual of no great renown getting a seat in Cardiff and suddenly becoming a Minister of this or that, and pontificating like an expert?
Thirdly, the re-election of John Marek tells us that voters like a politician (inasmuch as anyone does actually like politicians) who does his bit to look after his constituents and that enough of them can see through dirty tricks campaigns to unseat a good man.
Fourthly, and I admit this is speculation on my part, those results highlight the bits that were missing from the ballot papers. By that I mean the options that weren’t there – the ‘positive abstention’ option (‘none of the above’), which would have given voters the chance to express dissatisfaction with the quality of the candidates, and the ‘close the whole place down’ option which would have given those who object to the Assembly’s existence a voice. If those choices had been included and the turnout had still been the wrong side of 40% the bulk of the electorate would have surrendered its right to complain. As things stand, though, those who simply couldn’t be bothered to find their Polling Station rank equally with those who didn’t vote for a specific reason. ‘I’m not voting because doing so gives the Assembly credibility’ is a view I’ve heard expressed by more than a few people.
Anyone who has read this far is probably thinking, whether he agrees with anything I’ve said or not, ‘so who did this bloke vote for?’ I’m not ashamed to say I voted against the creation of the Assembly in the referendum and I’m still against its existence. Generally speaking, I don’t like politicians, I can’t see the logic in wanting to create another lot of them and I don’t like the con-trick played on us when we were told (as if anyone would believe it) that the Assembly would be of no net cost to Wales. By my arithmetic, 60 members getting paid forty grand a year each equals ?2.4 million, plus the extra payments to Ministers, and if we didn’t have the Assembly that money wouldn’t have gone into the pockets of those people. The Assembly building no doubt costs a great deal of money to run and the civil servants’ salaries will add more millions to the bill. Only one party campaigned on the scrapping of the Assembly and they don’t have any representation at all. You work it out.
Ah, I can hear voices saying, what about getting all that Objective One money from Europe? Wasn’t that a triumph for the Assembly? ‘Probably not’ is my answer as I am of the opinion that it could have been achieved even if it had been Westminster driven (the Government managed it with Merseyside) and it’s not such a triumph anyway. In my earlier publication ‘What Is Wrong With Wales’ I argued (quite well, I thought) that if we weren’t in the European Union or whatever the EEC happens to be calling itself at the moment all that money would have stayed within the UK, we wouldn’t be supporting a ridiculously expensive European legislature and, imminently, a bunch of lame duck Eastern European economies and could have done what we liked with the money which ‘Europe’ has squandered. Instead we got some of our own money back with conditions it didn’t have before we gave it away and have a whole army of people to watch over what we do with it. I don’t call that a triumph.
I believe that if it is to be a credible institution, bearing in mind the referendum result and the 2003 election turnout figures, the Assembly should run itself as any business would.
Financial stability is a necessity, and no business will survive if its primary concerns are creaming off huge sums to line the pockets of its principals and to fund unnecessary capital expenditure on itself of no real benefit. It must also make its position in the massed ranks of government bodies dictating to the citizens of the country plain to those citizens. I ask therefore that these questions be answered:
1. What aspects of our lives are dictated by Brussels and what governmental or quasi-governmental bodies exist to provide data on which decisions are based, to implement policy decisions and to enforce legislation?
2. What aspects of our lives are dictated by the UK Government and what governmental or quasi-governmental bodies exist to provide data on which decisions are based, to implement policy decisions and to enforce legislation?
3. What aspects of our lives are dictated by the Welsh Assembly and what governmental or quasi-governmental bodies exist to provide data on which decisions are based, to implement policy decisions and to enforce legislation?
4. What aspects of our lives are dictated by Local Authorities and what governmental or quasi-governmental bodies exist to provide data on which decisions are based, to implement policy decisions and to enforce legislation?
5. What bodies exist that are answerable to no elected body, what are their roles, how do they gather information on any decisions made and how do they implement and enforce their decisions?
6. How much does each of the various bodies referred to in the answers to the foregoing questions cost annually (in pounds sterling) and what does that figure equate to per head of adult population in Wales?
7. How much reliance can be put on the answers given?
The true cost of Government is not a well-known figure, but perhaps the disinterest in politics which leads to such low turnouts on election days is partly accounted for by the absence of information such as this. Perhaps if the voter realised just what proportion of his working week was devoted to earning money to pay for Government he might be more interested in exactly who was doing the governing.
As I may have said once or twice already, other people may disagree with what I’ve said; after all, it’s a free country which gives us all the privilege of advancing an opinion. If you, as a reader of this article, feel that you should, for instance, put forward a reasoned argument for the National Assembly’s existence or you want to take issue with anything else in this or my previous article let me know. After all, my opinion is no more valuable than yours, is it?
(Written June 2003; the ludicrous institution is still there and still pontificating as if it's important.)

ENDOWMENT MORTGAGES: A TESTAMENT TO GREED?
A Personal View
In recent weeks and months the financial pages of the newspapers have been full of stories about endowment policies, intended to repay the mortgages to which they were linked, failing to live up to the promises made for them - in some cases, wildly extravagant promises. Sometimes, the subject has even crept out of the financial section and on to the main news pages. Naturally, the providers of these products, our fine and noble insurance companies, are simply shrugging their shoulders and saying, in effect, “not our fault, not up to us to put it right, nothing we can do” and similarly phrased attempts to abdicate responsibility for another mess created by the industry of which they are such an integral part.
This latest example of the financial services industry refusing to accept any  responsibility for its past actions demonstrates yet again that it is populated - one is tempted to say exclusively populated – by people to whom the possession of either scruples or a conscience is an entirely alien concept and that it is ‘regulated’ by others who are woefully inadequate for their allotted task. That the industry is both unwilling and unable to put its mistakes right is, by now, quite plain.
So how did this latest mess come about, and is it entirely the fault of the industry’s profit-orientated product developers and commission-hungry sales people?
Many a long year ago buying a house, unless you were fortunate enough to be able to pay cash, meant taking on a mortgage - that much has never changed. But the nature of the package of financial products bundled together to form what we commonly know as the “mortgage” has changed; it has changed a great deal and not necessarily for the better.
In those early days you took out a loan and paid it off in monthly instalments over a period of years, chipping away at the capital so that the amount outstanding gradually decreased. If you were prudent you covered the possibility of death during the currency of the mortgage by buying life assurance and the cheapest way of doing that was by using “decreasing term assurance” where the sum you were insured for fell with the outstanding balance of the mortgage. There was nothing at all wrong with that system and it worked perfectly well.
Disaster, in the shape of the financial services industry, was just around the corner. One day one bright spark, secure in the knowledge that an army of sales people remunerated by commission (and therefore driven to sell, sell and sell again) would turn his idea into a brilliant success, realised that his industry would be a lot better off by offering an alternative. The grand plan was to keep the outstanding balance of the loan at its original level throughout its term and have the borrower pay into an endowment policy that would, at the end of the term, pay off the mortgage and put a substantial sum into the borrower’s pocket. It couldn’t fail, could it? After all, insurance companies invested in stock markets and had professional managers to make them huge returns, didn’t they? The lenders would be pocketing vast amounts more in interest and not getting their money back piecemeal over a period of decades, so they’d like the idea too, wouldn’t they?
The problem was that this great new idea cost the borrower a lot more money every month. So it wasn’t going to be the great cash cow that the industry expected. Still, it was a good idea, fundamentally, wasn’t it? So surely it could be refined a bit to make it more, well, affordable? Cue a fanfare of trumpets for the “Low Cost Endowment Mortgage”!
Endowment policies, by way of explanation for those who feel they need it, traditionally have bonuses added to their value every year, the amount of the bonus being dependent upon the investment return achieved by the insurance company, and also collect, and the end of their allotted lifespan, a so-called terminal bonus the calculation of which is not fully understood by any human being living or dead. Less traditionally, policies can be ‘unit-linked’, which is merely a different way of attributing investment growth to individual policies. The only practical difference, even if it is one that on occasion assumes monumental importance, is that if the value of an insurance company’s investments falls that loss in value is immediately reflected in the value of unit-linked endowment policies whereas a bonus, once added to a traditional policy, can’t be taken away. It’s not a surprise, therefore, that the unit-linked policies were pushed to the sales forefront, is it?
Nobody would have ever bought one of these “Low Cost Endowment Mortgage” packages if they’d known what they were actually getting, but there is a mantra in the financial services industry that says ‘sell the benefits, not the product’. As a result of consumer ignorance and commission-driven sales people, hordes of consumers got sucked into buying a package of different products which consisted of:
First, a fixed loan on which interest only was to be paid;
Second, an endowment policy with a sum payable on death set at such a level that it, plus bonuses accruing through the term of the mortgage, would pay off that mortgage: the initial sum assured would be far lower than the amount outstanding; and
Third, a term assurance policy designed to cover the shortfall between the outstanding mortgage and the amount of life assurance cover provided by the endowment policy should the borrower die during the term of the mortgage.
It’s important to get a sound grip of that second point: at the outset on a mortgage advance of, say, fifty thousand pounds the endowment policy might have a sum insured, being the amount it would pay out on death, of only perhaps twenty thousand. The difference was to be accounted for by the return the insurance company was going to get by investing the premiums that it received every month. It’s starting to look dodgy already, isn’t it?
Just for a moment, let’s take an objective look at the real situation. You, as the borrower in this hypothetical example, have spent sixty thousand on your new piece of suburban real estate and have borrowed fifty thousand to fund the purchase. In 20 years’ time you’re still going to owe that fifty thousand. You’ve got an endowment policy that’s worth exactly nothing because you’re alive but would cough up twenty thousand if you die. Why is it worth nothing? Because for the first couple of years all your premiums are going to be soaked up in charges levied by the insurance company, that’s why. That commission has to be paid from somewhere, and you didn’t really think it would be paid by anybody except you, did you? You’ve also got another insurance policy, that you probably don’t know you’ve got, that covers the difference between what your endowment policy’s worth and what you owe your lender. If you knew you had it, but you didn’t, you could safely bet that if you died 20 years down the line that policy wouldn’t pay up nearly enough unless the endowment policy had grown in line with those rosy forecasts that the salesman was so confident about, which it wouldn’t have done. Of course, by the time that your dull little brain works out that you’ve got a problem big enough to make you homeless the insurance company has had years to think up its excuses, that salesman has swapped his white socks for a camel hair coat and is flogging dodgy used cars or maybe second rate double glazing to vulnerable pensioners, and you are left on your own to sort the mess out.
It would have been easy to forecast steady growth in value of the endowments thus sold, and salesmen (and women, of course) had that irresistible carrot - they could say that the growth rates needed were so very conservative, they would easily be exceeded, there would be a big lump sum to go to the borrower at the end of the term. You see, you were seduced by that, weren’t you?
It might be reasonable to ask if the legal profession, whose members enjoy the benefit of generous fee income, could have done more to protect their conveyancing clients from this tortuously hybrid arrangement. Did nobody in that profession bother to ask his clients if they actually understood what they were doing before pocketing a big fat fee?
One can imagine the scene in the office of the expensively remunerated genius who dreamt up this arrangement on that late spring day - for surely it must have been spring, that season of unjustified optimism - as he foresaw the profits rolling in for decades to come. But he didn’t take into account the simple fact that he was asking a huge number of potential customers to put their faith in anonymous, faceless fund managers and in their ability to manage huge sums invested in the stock markets of the world in such a way that the predictions on which their complex ‘mortgage’ products were based would become reality. He didn’t take into account the simple fact that markets go up and down, and sometimes they go down a long way over a long time. He similarly didn’t take into account that anyone managing a fund which represents a sizeable chunk of a stock market, and whose investment decisions in consequence affect that market, simply would not be able to protect his profits in a falling market; it simply isn’t possible to liquidate a billion pound fund, just like that. So, when stock markets fell, so did the value of those precious endowments. The chances that thousands, even millions, of customers would be left facing a financial black hole, which were unacceptably high when this horror product was first devised, increased with every downturn. A messy, unpleasant outcome became even more inevitable.
Not content with this horrific bit of financial meddling, the industry started linking mortgages to all sorts of things as alternatives to the endowment policy, which it was finding very unexciting. Once your mortgage is tied to a politically generated, here-today-gone-tomorrow product, like Personal Equity Plans, disaster is only just over the horizon. Mortgages linked to pensions are no better; the fact that when the mortgage deed is executed the borrower has a pension plan that provides a lump sum on retirement out of which the mortgage is to be repaid might be so at that time, but politicians are notorious for changing rules. There is no guarantee that the predicted lump sum is ever going to be received, even disregarding the rather obvious problem that pension funds are invested by insurance companies just like endowment funds and are susceptible to the same market forces.
It might be thought that the villains of the piece are the insurance companies who rake in the premiums, collect massive profits but aren’t actually very good at looking after customers’ money. But the lenders must take their share of the blame because, firstly, they sold these arrangements like there was no tomorrow (presumably unaware at the time that there was indeed not to be) and were paid handsomely for doing so, and then they covered themselves in glory by failing to make any sort of check that their borrowers were actually paying the premiums. It’s all very well having an insurance policy assigned to a lender, but if the borrower doesn’t pay the premiums, for whatever reason (and when times get a little bit hard it‘s easy to decide not to pay the endowment premium for a month or two but very difficult to remember to restart the payments), the assigned policy is merely a worthless piece of paper. There are thousands of mortgages in existence for which the lenders fondly believe a fund is being built up, at least in theory and subject to the skills of the insurance companies to deal with the vagaries of stock markets, out of which the debt will be repaid but which, in reality, have no current repayment vehicle. It is another disaster waiting to happen.
Nor should the consumer escape criticism. Seduced, as we have already seen, by sharp-suited salesmen (far too many of whom do indeed wear those tell-tale white socks) into thinking that by simply signing on a couple of dotted lines a huge wad of cash will drop into their hands at a future date, they allowed greed to crush any remnants of common sense into the carpet. Now facing the harsh reality of what a combination of ignorance and greed can do they look around, desperately searching for someone - anyone - on whom the blame can be pinned.
Despite all that has already been said about insurance companies (an appropriate collective noun for which should perhaps be “robbery”, as in ‘a robbery of insurance companies’) there is such a thing as taking responsibility for one’s own actions, even if this is an unfashionable, even outdated, view in our burgeoning compensation culture. It’s rather like miners fighting tooth and nail to keep pits open, then suing the Government (or more accurately you and me, the taxpayers) because they’ve got health problems when it has been obvious for decades that working in a coal mine is injurious to long term health. Those people who now scream about their mortgage problem are in that position because they signed up for a product they didn’t understand, seduced by the vague promises of riches in the future. 
The Courts have a term for it - ‘contributory negligence’.
Blame must still rest mainly with the insurance companies, firstly because they released into the world sales people who probably didn’t understand how (or why, it‘s not the same thing) their products worked (or didn’t, as it’s turned out) because they weren’t trained properly, and, secondly, because they created this horror hybrid just to make money for themselves. It’s a classic case of creating a solution to a problem that didn’t exist. But the buyers must accept partial responsibility. By and large too dim to realise the extent of their own ignorance, their pupils in their eyes turned into pound signs as the sales patter washed over them. Did any of them bother to find out exactly what they were being sold? Of course not!
To answer the question posed in the title, yes, these accursed things are a lasting monument to greed, that of the insurance companies who wanted ever-greater profits, that of the sales people hungry for every extra pound of commission and to hell with the consequences, and that of the consumers selling their souls for that bag of gold at the end of the rainbow.
There’s a follow-up question, of course, which is this: what should be done about it? The first thing to be made clear is what shouldn’t be done. The cry has gone up “the Government should do something”. No, it shouldn’t, at least not in the way these strident voices want. There is no argument to justify the great mass of the population paying taxes to make the dreams of these gullible souls come true. All that any Government can do is to ensure, by legislation if necessary, that traders deal fairly with their customers.
It tried, with the Financial Services Act and all the associated bits and pieces, but it was a miserable failure because it relied on the innate honesty of the insurance companies, other financial services organisations and the staff of these entities. But there is a limit to how far even Government should go to protect the individual from his own gullibility. The answer really must be that those who profited from the sales of these nasty hybrid products must take responsibility, subject to what has already been said about the apportionment of blame, and that means the insurance companies, mortgage lenders and all those intermediaries who did so nicely out of selling the things. It would hit profitability, of course, and that will affect those investing in these businesses. But anyone making an investment should be aware of the downside risk of that investment and that includes being aware that an entity that creates or sells products with a long life, such as products that are mortgage related, can be made to pay for its misdeeds long after committing them.
So there we are. It just goes to show that if you dangle the promise of money under somebody’s nose he’ll lose his rationality, assuming he had any in the first place. The seller knows it and should proceed cautiously; not to do so is indefensible but the indefensible has happened. Greed met greed; chaos resulted.
(Written in 2004 but long before that year and many times since the financial services industry has shown its incompetence and woefully uncaring vattitude to its customers.)

ABOUT THE AUTHOR
Les Broad is originally from the deep south eastern corner of England but insists that at least a quarter of him - the left arm, perhaps including the shoulder - is by historical accident Welsh. He says that his affection for the written word has its roots in a schooldays French lesson one wet winter Wednesday: that lesson included an introduction to the writing of Albert Camus and it has been but a short step, accomplished in a mere four decades, from that point to becoming a writer himself.
His first love might be science fiction, albeit the sub-class of the genre that he calls 'believable sci-fi', but he has on occasion strayed into other areas and even into quite serious matters.
The point has been reached in his life where, whenever he is passed by a big, slow-moving, black, estate car, he asserts that he actually feels quite jealous of whoever is lying down in the back. If, therefore, he is to attain his ambition of being an answer to a crossword clue in one of the better Sunday newspapers he really needs you and all your friends to buy copies of this book!
Until the point arrives where he actually gets his ride in that big black car he expects to carry on living in North Wales, where his life is dominated by a wife and lamenting the loss of his border collie bitch.