The impressive performance of Wales’ team in the Rugby World Cup has provided a welcome boost to a nation that otherwise has little to celebrate at the moment. With a bleak outlook for jobs and public services, the Welsh political system – and especially Carwyn Jones’ Labour administration – is under unprecedented pressure, needing to present an alternative to Tory austerity but with limited powers to do so.
With a higher proportion of its workforce employed in the public sector than any other part of the UK except Northern Ireland, Wales was always particularly vulnerable to the Con-Dem cuts. Sure enough, twelve months after Osborne’s June 2010 emergency budget, Wales had already lost 10,000 public sector jobs – with much deeper cuts expected. The Tory theory that the private sector would fill the gap has been demolished by the latest unemployment figures, which show the Welsh jobless total 13,000 higher in June-August 2011 than a year before, taking it from 8.1% to 9% of the economically active population. Only an incurable optimist would have expected the requisite surge in private sector employment, given the extent to which the Welsh economy was laid low by the 2008/09 recession, losing 49,000 jobs (3% of the total), almost 40% of them in manufacturing.
Last year’s Comprehensive Spending Review left the Welsh Government with the toughest budget settlement of any of the devolved administrations: a £1.9 billion (12.4%) real-terms cut by 2014/15. And this was against a background of long-term underfunding, given the Barnett Formula’s increasing incapacity to deliver budget increases proportionate to Wales’ real needs. While publicly berating the UK government for jeopardising economic recovery and social cohesion, Welsh ministers adopted the ‘dented shield’ approach: drawing up a budget that sought to protect the most vital services while spreading the pain around. NHS prescriptions and other services that had been made free at the point of delivery were protected and there was a commitment to avoid compulsory redundancies and work with the unions to manage job cuts and facilitate redeployment.
The Welsh Government has now published its draft budget for 2012/13, which continues largely in the same vein as its predecessor, although this time health and education (together accounting for the lion’s share of the budget) have been protected, at least in cash terms, with money drawn from the government’s reserves. The budget also allocates resources to fund key initiatives announced recently in Welsh Labour’s Programme for Government, such as the creation of a ‘Jobs Growth Wales’ fund to help young people into work or training and the expansion of ‘Flying Start’, which provides free childcare in deprived areas. Unlike last year, when it was in coalition with Plaid Cymru, Labour now governs alone, with exactly half of the Assembly’s 60 seats, so it will need to persuade at least one other party to support its budget or, at least, abstain.
On the left, there are two main responses to the Welsh Government’s efforts to shield Wales from the worst of Westminster’s austerity. For the Wales TUC, dominated by the big three Labour-affiliated unions, all responsibility for the cuts lies with the Con-Dems and the Cardiff administration is effectively beyond criticism (WTUC general secretary Martin Mansfield has even tried to block union demonstrations being organised in Cardiff, lest they be seen as directed against the Welsh Government). At the other extreme, the sectarian far left demands that the Welsh Government sets a ‘needs budget’ and, in effect, spends money it doesn’t have; its failure to do this supposedly demonstrates that Welsh Labour is no better than the Tories and Lib Dems – yet these critics fail to explain where the money will come from if Westminster doesn’t immediately cave in, given that the Welsh Government can neither raise taxes nor borrow (unlike other devolved administrations and local authorities) and its reserves are already dwindling rapidly.
The left needs to develop a coherent position that avoids these two extremes, recognising that Welsh ministers are trying to do their best for the Welsh people with limited options but being willing to offer comradely criticism, to challenge certain choices (big business-friendly policies like the proposed Enterprise Zones, for example, or the Government’s readiness to cut 1,500 of its own staff, albeit on a voluntary basis), and to suggest alternatives. The Welsh Government should be applauded for lobbying Westminster for borrowing powers and reform of Barnett (to be considered by a new Commission) but it also needs to play a genuine leadership role in building a mass anti-cuts movement.
These issues will be debated at a timely AGM of Welsh Labour Grassroots on 5th November at the Welsh Institute of Sport in Cardiff (11.00 am until 4.00 pm). Participants will include Welsh Finance Minister, Jane Hutt, and PCS general secretary, Mark Serwotka. No-one on the Welsh Labour left can afford to miss this key event!
Darren Williams is a Trade Union Full-timer and a member of Cardiff West Constituency Labour Party and Welsh Labour Grass-roots
This article also appears in the November issue of Labour Briefing