tag:blogger.com,1999:blog-985080357558043054.post7201332581162728917..comments2024-03-27T18:54:46.951+00:00Comments on Syniadau :: The Blog: Borrowing money for the wrong thingsSyniadauhttp://www.blogger.com/profile/13876017048168055247noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-985080357558043054.post-42421086442503515542012-05-20T04:04:57.067+01:002012-05-20T04:04:57.067+01:00I am to submit a report on this niche your post ha...I am to submit a report on this niche your post has been very very helpfull <a href="http://www.arcadiahouseplans.com/" rel="nofollow">home designs</a>hilda dadahttps://www.blogger.com/profile/14687251079178494926noreply@blogger.comtag:blogger.com,1999:blog-985080357558043054.post-68523355313458751492012-05-15T18:10:38.296+01:002012-05-15T18:10:38.296+01:00MH- exactly right. If Wales sets any taxes it will...MH- exactly right. If Wales sets any taxes it will need revenue borrowing powers. Borrowing revenue to deal with cyclical variations is a normal part of managing a national taxation system.<br /><br />Owen's concerns can only be addressed by Wales taking responsibility for itself and for the Welsh electorate to make judgements on performance. We can't seriously say that certain powers being granted to Wales or not should be conditional on how they are used, that is fundamentally unfair and undemocratic.<br /><br />Incidentally it's quite likely that Labour Welsh Governments would be extremely conservative and timid in terms of borrowing. It might be politically convenient to say they would go on a spending spree but I don't see anything in "Welsh Labour's" line up that suggests they are adventurous or reckless. But at least there could be a debate about that.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-985080357558043054.post-28305318701902687442012-05-15T12:04:50.507+01:002012-05-15T12:04:50.507+01:00I'd agree with Anon 10:13 that a government sh...I'd agree with Anon 10:13 that a government should have freedom to borrow as it likes, without restriction. Freedom includes the freedom to make bad decisions; that's what responsibility and accountability to the electorate is about. If this Labour Government does stupid things, it's better that it should be redressed at the ballot box, rather than being restricted by Westminster. As I tried to say in <a href="http://syniadau--buildinganindependentwales.blogspot.com/2012/05/silk-and-possible-referendum.html" rel="nofollow">this post</a> a couple of weeks ago, not having that responsibilty gives Labour an advantage in the polls because they don't have to take responsibility for how the money they spend is raised. They want to be able to point the finger of blame at someone else for that.<br /><br />As for Scotland, it's not just a question of asking. Perhaps it's better to say that because the Scottish Government will now be responsible for roughly half of income tax revenue they, like every other government, will need to have the cushion of short-term borrowing because of possible fluctuations in the tax take over the economic cycle (let's call that between 3 and 7 years) ... though of course the economic cycle can't be separated from the electoral cycle, as every government wants to leave more money in people's pockets just before an election. <br /><br />In our case it's probably fairer to put it the other way round and say that the current Welsh Government is asking only for capital borrowing because it doesn't want major tax-setting powers.MHhttps://www.blogger.com/profile/09329059309196746446noreply@blogger.comtag:blogger.com,1999:blog-985080357558043054.post-46570470527512755992012-05-15T10:13:10.101+01:002012-05-15T10:13:10.101+01:00In fairness Owen the Welsh Government is only aski...In fairness Owen the Welsh Government is only asking for borrowing for capital, not for revenue.<br /><br />The Scottish Government is asking for both.<br /><br />With that said I don't agree that restrictions should be placed on Welsh borrowing, even though we know the current Government is rubbish. They should have the same borrowing powers as Scotland at the very least and comparable sub-state units.<br /><br />Wales has a good record on (not using) PFI and should only borrow prudentially. While not using PFI was a sign of Welsh socialism, it was actually very conservative and prudent to have not used it. But that conservatism and good credit rating if you like, means Wales has a largely deficient infrastructure.<br /><br />We are not looking at a Greece situation being possible where there is spending on pet projects and mass tax evasion. It is vitally important that borrowing is for investment in the economy as Plaid Cymru repeatedly has stated. <br /><br />Scotland is not really a bad model to look at. They are already using local authority borrowing powers. They are getting normal borrowing powers, and they also have a Build for Wales style vehicle called the Scottish Futures Trust. They can pay all of this back because they are fairly funded. <br /><br />Wales isn't in the same boat but we need to get there if our economy is ever going to be remotely fit for purpose.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-985080357558043054.post-36552459722878351812012-05-14T21:10:52.943+01:002012-05-14T21:10:52.943+01:00I couldn't agree with you more, Owen. What...I couldn't agree with you more, Owen. What's particularly upsetting is that we should fall into this trap now when we largely succeeded in bucking the borrowing trend that the rest of the UK indulged in over last decade or so. In terms of devolved PFI exposure, the capital value per head of PFI projects was (in 2008):<br /><br />Scotland ... £1,001<br />England ... £990 <br />Northern Ireland ... £620<br />Wales ... £205<br /><br /><a href="http://www.assemblywales.org/08-005.pdf" rel="nofollow">Source - pp18-19</a> <br /><br />And in terms of non-devolved expenditure through the Wales Office, Wales had only £13m expenditure on PFI, compared with Northern Ireland's £118m, Scotland's £820m and a UK total of £4,466m in 2008-09. Although Wales will have benefited from some expenditure in non-devolved areas such as defence.<br /><br /><a href="http://www.parliament.uk/documents/upload/0807pfi.pdf" rel="nofollow">Source - p4</a><br /><br />Put in blunt terms, we simply didn't build anywhere near the same number of new schools, hospitals and roads using PFI as the rest of the UK did. Instead, we tended to build what we could out of the capital portion of the block grant and therefore are not exposed to the same level of debt as the remainder of the UK ... at least as far as capital expenditure projects are concerned, as PFI was the preferred way of funding them. Obviously we're exposed to a pro-rata level of UK debt for everything else. <br /><br />The sad thing is that Labour will, I'm sure, justify doing what they are now doing by saying that Wales' level of borrowing exposure is only a small fraction of what it is in the rest of the UK, and that we can therefore afford to "catch up".MHhttps://www.blogger.com/profile/09329059309196746446noreply@blogger.comtag:blogger.com,1999:blog-985080357558043054.post-28587899466799665152012-05-14T17:40:26.746+01:002012-05-14T17:40:26.746+01:00This is one of my greatest worries about devolved ...This is one of my greatest worries about devolved borrowing powers. If this, or any future, Welsh Government used borrowing to stave off making cuts/changes to revenue expenditure I'd be furious. There should be strict guidelines on borrowing from day one - that it has to be spent with, as you said MH, the expectation of a return. That's why I would prefer the "Build for Wales"/Infrastructure Bond model for public borrowing in Wales, so it's (in the most part) out of politicians or civil servants hands.<br /><br />Using borrowing to cover revenue spending hints at much deeper economic problems, mainly making up for a lack of tax income to meet spending/political pledges. That's effectively what the UK Government has been doing for the best part of a decade or more - and while the banking crisis was the "tip of the iceberg", the UK's national debt is all the stuff you can't see. All the talk of deficit reduction is just reducing the amount borrowed year on year. It's a disaster waiting to happen. We're just fortunate that the UK isn't a member of the Eurozone and can inflate some of it away.<br /><br />Wales certainly doesn't need to follow suit - devolved or independent.Owenhttp://oggybloggyogwr.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-985080357558043054.post-30264844442508588212012-05-14T15:54:54.605+01:002012-05-14T15:54:54.605+01:00100% agree - it's like a company taking a loan...100% agree - it's like a company taking a loan out so they can have money to re-flower the flower bed.Anonymousnoreply@blogger.com