Well, bright and sparkly though Cardiff may be, the only reason Cardiff has been able to reinvent itself from steel-making, rail and docks centre to public administration centre and capital has been public money. No other city or town in Wales has been so fortunate as to have billions on such a make-over, and no other city or town in Wales is so well off either. 

The idea that Cardiff’s advantage should be perpetuated, in the hope that the rest of Wales will somehow benefit from trickle-down, aka crumbs off the table, is all about protecting its privileged status. I have yet to see any evidence that Cardiff’s growth benefits anywhere else in Wales, other than those from adjoining areas who hop over Cardiff’s very tightly-drawn boundaries to work.

Just as active steps need to be taken to spread the UK’s propserity outside the south-east of England so Wales’ economic strategy needs to encourage development throughout – be it north Wales, rural Wales, west Wales or the Heads of the Valleys.  Otherwise, Cardiff may well be a jewel, but in a crown we should be ashamed of.

‘Cobblers’ cries Iain Dale in return:

If the Tories lose this election to a Lib/Lab coalition, the first thing a new government would do is to introduce PR. Not just AV, but full STV. Clegg would demand it and Brown would have to agree. And if that happened the British people can look forward to a semi permanent left of centre government.

Similarly I’ve heard the view expressed on the left that David Cameron’s policy of cutting the number of MPs by 10% would result in redrawn constituency boundaries that would favour the Tories and rule out a Labour Government for a generation.

After the 1992 General Election anonymous Government Ministers were quoted as saying that it would have been better had they lost and let Neil Kinnock face the ERM meltdown. And detached observers are saying similar things about this election.

But despite the intense economic and social pressures that the next Government will face tribal instincts on both sides run so deep that they find it impossible to take such a detached view.

The current opinion polls beggar belief. Never underestimate the common sense of the public it is often said. And though I can understand the desire for a ‘balanced’ Parliament, I can’t help but feel that what’s about to hit is us going to be so destabilising that a stable Government is essential to withstand it.

Of course, as coalitions in the National Assembly demonstrate, stability is not always synonymous with one party rule. Stable Governments can be forged from cross-party co-operation. But whether they’ll have the authority to re-write the rules of the game is yet to be determined.

At a meeting in Plaid Cymru’s conference in Cardiff Holtham disarmingly pulled apart many of the assumptions of his hosts.  Every time Helen Mary Jones or Dafydd Wigley lit a flame of hope, Holtham gently placed his fingers on the wick and extinguished it.

A fair share for Wales?  You’ll be lucky.  Though Wales is £300m under-funded by his calculations the Treasury say that’s within the margin of error and would quickly disappear with a different set of assumptions.  But the real problem is that using the same calulation Scotland gets £4.2bn-a-year more than it would if every part of the UK was treated the same as an English region.  With the SNP running strong the Treasury won’t consider change: ”If you think they’re going to change that, forget it” (quotes courtesy of Tom Bodden).

A fairer income tax regime in Wales?  Not on your nelly. The high earners would flee across the border: ”You would get virtually no revenue from the upper rate of income tax and if you raise it too far you would probably lose it…If you want to maximise revenue you would cut the upper rate of income tax, [and] put a penny on basic rate…How you explain that to the Welsh electorate I don’t know.”

How about a tax on natural resources then?  Small change.  Even if you could overcome the barriers a tax on water exported from Wales would only raise about £30 Million a year – and the Treasury would probably deduct it from the Welsh block in any event.   Not worth the grief.

But Helen Mary Jones refused to be sidetracked, this simply confirms that Wales needs to flex our muscles more she said.  The Scots have shown that extra support for the SNP gives the country greater leverage (though Plaid’s affection for the SNP may not last long if there’s a hung Parliament.  Dafydd Wigley said they’d be working at cross purposes and should hold separate negotiations with the Tories).

Helen Mary went on to say that the Conservatives might not mind “annoying the voters of Scotland” because they have so few votes there.  But I don’t buy that.  My reading of the Conservatives is that they see the generous Barnett settlement for Scotland as a price worth paying for keeping the Union together.

But Gerald Holtham did give leave his audience with some cause for hope. The Calman Commission in Scotland suggested extending the tax-raising powers on the grounds of accountability.  Without a stake in revenue raising the Executive will have too easy an excuse to blame London for not providing sufficient funds.  The UK Treasury have accepted his argument.  “That’s boxed me in” Holtham explained.  ‘How can I not recommend tax raising powers now’ he mused…

Earlier this week Kraft increased its offer to Cadbury’s shareholders, the Board recommended the deal to shareholders and another British company has passed into history. It may come as a surprise to some of you that ultimately, even if indirectly, the owners of the business were you and me. Cadbury’s shareholder register include the names Legal and General and Standard Life. If you have a savings arrangement, such as a pension or a life policy, with these institutions they will be managing and investing those monthly contributions on your behalf. These institutions have a powerful role as the providers and custodians of capital, the very lifeblood of our economic system. Some serious questions need to be asked as to quite how they see themselves executing their responsibilities as business owners of businesses and in particular how their actions align with the interests of their savers and the wider community. Their recent record gives scant grounds for confidence. Many of the very same institutions held positions in the banks at the time when their rampaging activities were bringing the system to its knees. One might reasonably have expected them to consider it their duty to exercise a restraining influence on excessive behaviour. If nothing else perhaps it is about time they recognise more clearly they are paid by and are therefore agents of British savers.

So how does this tie in with the performance of the Welsh economy. Takeover history tends to show that the majority of acquisitions destroy value and wealth in the long term because of the difficulties in effectively merging different operations and approaches to business. As an aside all too often takeovers are fuelled by the corporate ego of senior managers and the fee generating instincts of professional advisors, for instance close to home think about the Welsh Water and SWALEC deal nearly a decade ago, who no matter what the consequences for the rest of us, always walk away with a handsome return (for an iconic insight see this link to Where are the customers yachts? – http://www.moneyweek.com/investment-advice/how-to-invest/moneyweek-book-review-where-are-the-customers-yachts.aspx ) . Kraft is funding its acquisition by raising loans and these have to be serviced. Inevitably that means savings and potentially job losses. Cadbury owns a cocoa processing plant near Wrexham, whose future must be shrouded in uncertainty at a time when Welsh manufacturing is under the cosh.

I will leave the final comment on corporate events to a spokesperson for Cadbury’s second largest investor Legal and General. “We believe the increased and final offer for Cadbury by Kraft Foods fails to fully reflect the long-term value of the company. “We are disappointed management have recommended the offer for this iconic and unique British company, but are grateful for the constructive way they have engaged with us.”

Using the Freedom of Information Act, Sion Barry its Business Editor has identified bonus payments for the last financial year made to civil servants in the upper echelons of WAG. I am not sure what signals this sends out but at best it seems the payments are badly timed.

It also raises wider questions about the need for remuneration structures to include this element of incentivisation. There was a time when people in all walks of life did their job and were compensated accordingly. The price of continuous failure was inevitable and the reward for success was the respect of colleagues, appreciation from your employer and enhanced self-esteem in the knowledge of a job well done. At some stage this all changed.

From memory it seems to have been associated with the self-justifying claims on the part of large corporations that to remain internationally competitive the best people needed to be brought in and they needed to be compensated appropriately. Nothing wrong with that but maybe a better approach would be to establish the right level of expectation and set the pay level in accordance with this.

Which brings me back to the world of banking. That notorious Welsh-man Lord Griffiths of Fforestfach, Vice Chairman of Wall Street investment bank Goldman Sachs recently defended the banking bonus culture by suggesting the British public should “tolerate inequality as a way to achieve greater prosperity for all.” This is an interesting point of view and needs to be contrasted with the news in Friday’s Financial Times that Moody’s, the ratings agency, has suggested UK banks are expected to experience further writedowns of between £130 and £250 billion over the next few years.

If this proves to be true there are numerous implications from this. One of them should be the cancellation of bonus-time and a stinging rebuke from the mouth of Lord Griffiths to those contemplating being rewarded for failure.

Personally, I welcome this campaign and think its a great idea. There are plenty of misconceptions about the Valleys out there and its good to see a focused campaign intent on tackling those head on. It’s an area of Wales that I’ve only recently started getting to know, and I must admit I’ve been impressed by the surprising beauty as well as the warmth of the people. It’s about time the rest of Wales and the world saw a different side to the Valleys as well.

Obviously, I’d like to see tourism develop in Wales as a whole and I would personally dispute that the Valleys are the ‘heart and soul’ of the country. I think every single area in Wales has an unique contribution to make to the essence and spirit of the country. But as a marketing campaign, I think it’s clever. Let’s just hope it has a positive impact and attracts more people to visit Wales, thus giving a much needed boost to the local economy.

Everyone has a story to tell about how A.N. Other widget ltd would not have relocated had it not been for a few quid to support job creation, but overall the evidence for any real impact of grants on overall economic prosperity is weak.  It seems that the money will be spent instead on R&D instead.  

As well as this, a significant chunk of the money saved also needs to go into good quality, long term skills training and on regenerating disadvantaged areas.  Otherwise, money will simply reinforce the advantages of the already well off parts of Wales.

It was only our lamentable economic performance that saw us narrowly qualify for the current round of Convergence funding.  The enlargement of the EU to include even poorer areas than our own is likely to mean that in 2013 we’ll have to learn to live without the top level of European structural funding.

What the BBC failed to ask was, is that a bad thing?

Clearly £1.2 Billion over seven years is not to be spurned, £171 Million pounds a year clearly matters.  But in the context of the annual WAG budget of over £16 Billion a year, it is relatively small.

More important to my mind is the opportunity cost incurred trying to spend the EU grant available to Wales.  Over the last decade Welsh public servants have learned a whole new language – Eurospeak.  It is a secret code.  They talk of the intervention rates which they can draw down EDRF to match funds – and that’s the intelligible bit.

Civil servants, Quango staff, Local Government officers and voluntary sector workers have become very creative in piecing bits of funding together to access European money.  But it has a distorting effect on the way public services are designed and delivered in Wales.

The amount of time, effort and imagination that is being absorbed by tapping into a relatively small funding stream must have a considerable opportunity cost.  Time spent on finding ways round opaque EU funding rules is time not spent on thinking new thoughts.

Looking back the debates of ten years ago about ‘match funding’ seem rather quaint.  Anyone with a rough working knowledge of way the Structural Funding is working in practice knows that genuine ‘match funding’ is a myth.  But the amount of energy exerted keeping the myth alive is considerable.

In a contracting public spending environment losing access to any top-up cash is regrettable, but it is a far more nuanced picture than the reports suggest.