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To emphasize the point during the election campaign against George HW Bush, Bill Clinton famously said ‘’it’s the economy stupid!’’ While noting that we are not living in the 1990’s or America, strong economic foundations are a vital component when it comes to building a prosperous Wales. A Living Wage makes economic sense due to the fact it would mean that workers are paid a proper wage to reflect their work, and will be able to live on what they earn.

Plaid Cymru wants to see an end to poverty pay - which is why the Living Wage is one of our key pledges going in to next year's Westminster General Election. New figures published by the Living Wage Foundation (on Monday 3rd November) have revealed that 24% of Welsh workers (that’s almost 261,000 people) actually earn less than the Living Wage. The worst performing regions in Wales are Conwy and Powys where 32% of employees are earning less than the Living Wage. 

It should be scandalous that many workers in the UK live with in-work poverty, in one of the world's wealthiest countries. Particularly as the UK Westminster government subsidises big business to pay poverty wages, by setting the minimum wage too low and then topping them up with tax credits to enable people to afford basic provisions. The Living Wage makes sense on a social and economic level. With 1 in 4 Welsh workers earn less than the Living Wage.

If the Living Wage became a legal requirement, over 250,000 Welsh workers would receive a pay rise, leaving them with more money in their pockets to spend locally. Plaid Cymru's focus is a Welsh economic recovery driven by investment and job-creation with those jobs paying enough for people to live on.

In-work poverty is a scandal that should not be blighting one of the world's richest nations. This contrasts with Labour's pledge for £8.00 per hour minimum wage by 2020  - an annual rate of increase worse than that between 1999 and 2014 - and it is clear which party is standing up for Welsh workers. 

Despite the myths peddled by much of the media, the majority of people receiving benefits are actually in work. This is a damning reflection of successive Labour and Tory Government's failure to ensure that earnings aren't outstripped by the daily cost of living. A decent day's pay for an honest day's work - that is what Plaid Cymru believes in and that is what we will be fighting for between now and next May.

TIME FOR A LIVING WAGE

Plaid Cymru has unveiled its first signature policy for the 2015 General Election Campaign - a Living Wage that would secure a pay rise for more than 250,000 Welsh workers. A Living Wage would improve living standards, help create jobs, and boost local economies due to people having more money in their pockets to spend. 

The policy was just one of many Plaid Cymru proposals to help businesses and employers alike such as cutting VAT in the tourism sector, offering SMEs lower business rates, and developing a Welsh Bank to lend to small business. 



Hywel Williams MP, Plaid Social Security spokesperson speaking ahead of the policy launch said:

"Plaid Cymru believes that nobody in Wales should be paid less than they need to live upon. That is why we pledge to give more than 250,000 Welsh workers a pay rise by making the Living Wage a key commitment for the 2015 General Election campaign. 



"In a time when City fat cats are rewarded for failure, and ordinary families are suffering a slump in living standards, this is a policy aimed at tackling the UK's "most unequal state in Europe" status. 



"Currently the UK Government subsidises big business to pay poverty wages by setting the minimum wage too low and then topping them up with tax credits to enable people to afford basic provisions. 


"By raising the minimum wage to be in line with the Living Wage, we will be able to raise living standards and boost local economies as people will have more money in their pockets to spend. 



"Analysis shows that it is more commonly women, the under 30s and part-time workers who suffer most from low wages. A Living Wage would ensure that none of these groups are left behind and improve the lot of entire households, not just individuals. 



"This is just one of a wide range of Plaid Cymru policies designed to help employers and workers alike. These include cutting VAT for the tourism industry, cutting business rates for SMEs, and establishing a Bank of Wales that would lend to small businesses. 



"While Labour, Tories and Lib Dems join in the desperate scramble to save the Union and putting Wales' best interests on the back burner yet again, Plaid Cymru is getting on with the job of delivering a more just and prosperous Welsh nation."


TALKING THE TALK...

The Wales Bill 2014, despite its flaws, will go some way (despite Peter the Pains selective moaning) towards strengthening our fledgling democracy.  That said, having read through the draft bill and its amendments I find myself left thinking that the bill remains a missed opportunity when it comes to making devolution work for Wales.

The London based parties having repeatedly and regularly stated that they are committed to further meaningful devolution, yet they have failed to demonstrate any real ambition for Wales. So it comes as no surprise that Labour in Westminster, nominally a party that makes much of its claims to be focused on strengthening the Welsh economy, has tabled nothing but wrecking amendments.

It should have been possible to suggest relatively widely supportive and positive changes which could have delivered some of the tools to do the job of making Wales a more prosperous place. Plaid tabled a wide variety of amendments to improve and strengthen the bill including:

·        Devolving control over setting the number of Assembly Members,

·        Reforming the UK funding formula which sees Wales lose out on £400m a year, and

·  Granting the Welsh Government the power to issue bonds (similar to the Scottish Government).

Most reasonable observers would probably agree that the National Assembly needs more powers to help deliver a sustainable recovery for the Welsh economy and ensure that it becomes a more accountable institution. Whatever is said about the current Wales bill when it is eventually passed it will deliver some more powers, but, nowhere near enough to deliver the real and significant economic change that Wales needs.

Too many powers still remain with Westminster and too many aspects of Welsh people's lives are decided by largely indifferent Westminster based and Westminster focused political parties. We in Wales have to jump through far too many hoops (and there may be many more hoops yet to come) simply to gain the tools needed to deliver for our country economically. 

The Wales Bill could have been Labour in Westminster’s opportunity to show its support for devolution. The choice was a simple one either stands up for Wales or supports the Con Dem Government's attempts to dismantle our welfare state, justice system and meddle with other matters that remain controlled from London. 

THE DRAFT WALES BILL

Plaid Cymru has responded to the publication of the Wales Bill by pledging to table amendments that would preserve the integrity of the Silk Commission’s recommendations on devolving further powers to Wales.

Hywel Williams MP, who sat on the Welsh Affairs Committee scrutinising the Draft Wales Bill, expressed disappointment that the UK Government had “cherry-picked” some Silk’s recommendations and that his party would seek to put this right so that the transfer of new fiscal powers will bring maximum benefits to the Welsh economy. Mr Williams added that any votes on the amendments would be “a test of Labour’s priorities” given the clear split in opinion between the party’s members in London and Cardiff over granting Wales more job-creating powers

Speaking shortly after the Bill was published, Hywel Williams MP said:

"Plaid Cymru has been united and consistent in making the case for the transfer of job-creating and economy-boosting financial powers from Westminster to Wales.

"We therefore welcome the publication of the Wales Bill that will seek to implement some of the recommendations of the cross-party Commission on Devolution chaired by Paul Silk.

"However, our goal from the start has been to preserve the integrity of the Commission's original recommendations and it is disappointing to see that they have been cherry-picked in this way.

"We will aim to put this right by tabling amendments to the Wales Bill with a view to scrapping the lockstep - a roadblock that would limit the Welsh Government's income tax-varying powers and was not part of the original recommendations. We will also seek to amend the Bill so that Air Passenger Duty is devolved to Wales as per the Silk Commission report.

"Having labelled the lockstep a "Tory trap" and having bought Cardiff airport, it would be a huge embarrassment for the First Minister of Wales - as the most powerful member of the Labour Party in the UK - if he fails to convince Labour MPs in Westminster to support these amendments which are so crucial to boosting the Welsh economy.

"The Wales Bill will therefore be a test of Labour's priorities.

“Overall, the Bill represents a lost opportunity to include the recommendations of the second report of the Silk Commission which indicated that wider powers such energy, transport, and policing should be transferred to Wales. There is plenty of time in the parliamentary calendar given that the Coalition Government has run out of substantive things that they can agree on to legislate. We could have had a full and comprehensive Wales Bill.”

COMPLACENCY OR COMPLICITY?

The latest GVA figures (released on 11^th December) don’t make pleasant reading, one interpretation is that the Labour in Wales Welsh Government and Con Dem Westminster Governments have allowed the Welsh economy to enter a spiral of decline and they continue to offer no meaningful route to recovery. The Chancellor's remains unhealthy fixated with obsessively investing in London and the South East, something that is reflected in the dire GVA figures which not unexpectedly reveal the vast wealth gap between the English capital and many other parts of the British State.

The figures are the latest reminder that Westminster austerity isn't working for Wales and that a lethargic Labour in Wales Government in Cardiff is continuing to fail to protect Welsh people from the Coalition's damaging policies, let alone allegedly stand up for Wales. The GVA figures showing that parts of West London are a 12 times wealthier than parts of Wales.  Clearly Westminster austerity isn't working for Wales and the Labour in Wales Welsh Government's inertia and complacency are only making matters worse.

As long as the Chancellor still remains fixated with a recovery focused on London and the South East, what we increasingly urgently need is a Westminster Economic Fairness Bill to rebalance the economy and bring prosperity to other parts of the UK. Plaid Cymru has always argued that the only real route to recovery is investment in vital infrastructure projects such as schools, hospitals and railways that would generate jobs and growth. This is something that cannot be achieved in our country unless vital job-creating powers are transferred from Westminster to Wales.

We have reached the point where almost any progress on implementing the Silk Commission's recommendations should be welcomed but Labour in Wales must not back themselves into the anti-devolution corner by dragging their heels over the issue of an income-tax referendum. An income-tax sharing arrangement is necessary it is a vital tool which could be used to deliver  real and meaningful investment powers. The time for dithering and self induced inertia is past and the economic interests of the Welsh people need to come before narrow political self interest.

THE WAY TO GO

The news that the number of new limited companies registered in Wales has gone up by more than 20% is good news. Companies House say 469 new firms were registered with them in 2012, when compared with 386 in 2011. This increase is actually higher than the UK average but it has to be balanced by the sobering news that the number of company failures in Wales also rose when they fell on average across the UK.

A number of my friends run their own businesses, so I am fully aware of the pitfalls and the opportunities that can await anyone who goes into business for themselves. With a good idea, a sound business case, timely support and advice it can work out. Our small businesses can create wealth and sustainable employment opportunities for local people and play a significant role at the heart of our communities. Their profits and investments tend to stay within the communities where they are based.

For too many years economic development in Wales has been focused on large scale development of what can be best described a single egg solutions. They promise much in the short to medium term yet often deliver significantly less over the long term, if they survive. The latest figures show that Wales saw a 191% rise in the number of projects, by way of comparison with a 41% increase in Northern Ireland, a 16% rise in Scotland and a 10% increase in England (outside of London).

The statistics have been released by UK Trade andInvestment (UKTI), the Westminster government department responsible for exports and inward investment. There is no breakdown of the number of jobs created or safeguarded (in Wales) by these projects; the BBC says that Welsh government says they created of 2,605 jobs and safeguarded another 4,442 in the 2012/13 financial year.

Despite rise in the number of projects, Wales' share of the UK total inward investment accounts for 4%, is much lower than the high point of the 1980s and 1990s. Now this is good news, but, our focus should be on developing small to medium size local businesses, which are significantly less likely to up sticks and leave for perceived greener pastures and fresh applications of development grants.

We are still too focused on attracting large scale single enterprises, which promise much but deliver significantly less than anticipated. The LG development near Newport, is a good example of an expensive white elephant which promised the usual total of 6,000 jobs and accrued significant public funding (£376 million pounds at the last count) which was committed by the then Welsh Secretary, William Hague.

The promises and the pledges and the public funding  never quite managed to deliver anything like what was promised. While anyone with a basic  understanding of the state of the Korean and the Far Eastern economies at the time that, let alone a basic understanding of where technological developments was going in relation to PC monitor screens, would have put their hands up and said hang on a moment.

What can best be described as a combination of fantasy island economic assessments, a fatally flawed business case and the prospect of looking good with a forthcoming Westminster election looming led to one of the spectacularly duller decisions of recent years being made. The old WDA had in truth never really consistently delivered anything like long term economic stability and much needed long term job opportunities to our communities that it should have done.

The European funding opportunities available to Wales (as a result of economic mismanagement on the part of successive Westminster governments) may well turn out to have been squandered on schemes that fail to deliver measurable results yet manage to deliver fat salaries to the managers. Much of the money has been scammed into dubious schemes and training programmes that fail to deliver the necessary skills that workers and potential workers need to make a decent living in the modern economy.

Anyone who has visited Spain and Ireland prior to the self inflicted banking crash will have seen (and can see) the results of years of European regional investment the question we should be asking is where are the physical assets? By this I mean the things you can literally put your hand on like improved communications (rail, railway stations, etc), broadband infrastructure, etc?

The Westminster, Welsh Office, WDA model of concentrating on attracting branch factory operations of a relative short term duration has failed to develop and sustain our economy. Back between 2007 and 2011 the Plaid driven One Wales Government made significant efforts and tried to think and act differently when it comes to economic development and support for small to medium sized enterprises.

Small businesses should be the life blood of our urban centres, yet, the Federation of Small Businesses (FSB) has long noted that the UK is losing around 2,000 local shops every year and that of this rate of loss is dangerously unacceptable. In a few years unless things change there will be precious few no independent retailers left in business, something that will hammer both consumers and our communities hard as they lose any real choice in the marketplace and lose potential job opportunities.

Now as someone who now and then takes the bus to work and walks through streets that were once the retail heart of Newport (nominally Wales’s third largest city) I can see with my own eyes the economic realities of our situation. Over the last twenty five years the commercial heart of many of our communities has been shattered as a result of a combination of aggressive policies pursued by the larger retail chains, exceptionally poor decision making on the part of local government and central government indifference.

This combined with the rapid growth of unsustainable, ill-thought out of and edge of town retail developments has effectively left no place for the smaller local businesses and retailers. When you factor in parking charges, business rates and the effect of the closure of high street banks and post offices in many of our communities then you can begin to see why many of our smaller businesses and local shopping centres are up against it.

Local small businesses as well as trading with us the consumers, also trade with each other - so the community gets twice the benefit. Money spent by and in local businesses spends on average three times longer in the local economy than that spent with chain stores which is instantly lost to the local economy which in times of recession our communities can ill afford. We really do need to think differently and focus economic development priorities on developing and supporting smaller local businesses who will be rooted in our communities and offer more flexible employment opportunities too our people.

The Welsh Government needs to have the power (and the vision) to remove or reduce business taxes to help boost our businesses, to encourage investment in skills, technology and  workers. If we are going to make Wales a nation of aspiring entrepreneurs and to encourage and enable them, our communities and our economy to flourish we also need to encourage the development of community owned social enterprises.

A few years ago the Rowlands review into the provision of growth capital recognised that an economical vibrant SME sector is vital for economic growth. There has been a lack of provision for companies in Wales who were looking for between £2 and £10 million pounds in capital, this has to change if we are to encourage sustainable economic growth and development.

It’s pretty clear that the present financial market and its institutions have failed to supply sufficient venture capital for the SME sector in Wales. We need a venture capital fund for Wales, which should be established by, but independent of the Welsh Government. Such an independent venture capital fund could raise capital and deliver investment through a co-investment model, with approved private sector partners to our SME sector, where such investment would make a real difference.

Despite nearly 15 years of devolution much of the same old mid to late twentieth century economic thinking lingers at the heart of the Welsh Government when it comes to economic development. There is still far too much focus on vastly expensive one egg, one basket schemes to generate the seemingly standard figure of 6,000 jobs which seems to haunt government press releases whether we are talking about the Severn Barrage, the Severnside airport , the M4 relief road or whatever.

We badly need new ideas not just talk, we need some concrete steps to encourage growth, boost manufacturing industry, support and develop  our small to medium sized enterprises. One positive step would be to end business rates and that's just to start with... otherwise it will just be a case of same old twaddle which will do nothing to help our communities and our economy.

MAKING LOCAL GOVERNMENT WORK FOR WALES

Let's be brutally honest many of our smaller communities, our small and large towns and our cities have suffered in the past from ill-thought out developments and questionable short term economic thinking. Our local small to medium retailers, local businesses and local consumers have suffered accordingly and we the consumers have paid the price with a loss of local services and choice.

Many people have real and serious concerns about the economic future and the character of their communities. We need to ask ourselves some serious questions about who these decisions in relation to redevelopment are being made for? And do our communities really benefit, locally or otherwise, certainly at times it is not us the customers? In the not so recent past local government has hindered economic growth and has damaged the economic vitality of our communities, but, it does not have to be this way.

One way that local government can help, rather than hinder, our small to medium sized enterprises and our communities is by improving procurement practice something that helps create and sustain local jobs. Plaid has called for legislation to be used to ensure that Welsh public sector contracts are allocated wisely to maximize job creation and investment opportunities here in Wales. The Welsh Government has previously announced a National Procurement Service, Plaid Cymru has rightly warned that unless further concrete action is taken then we in Wales will see savings but we will not see the full benefits.

The Party of Wales leader Leanne Wood said:

“Procurement is one of the successes of the National Assembly. By ensuring that Welsh public money is spend in the Welsh economy then we can create and support employment. A Plaid Cymru government would work towards achieving a target of 75% local procurement in Wales because we know that this could create 46,000 jobs here. That would make a huge dent in the unemployment figures.

“Spending that money with local companies in our local communities can also have a significant knock-on investment effect. By creating the demand we will also be improving the skills of our workforce, will be increasing the number of jobs, and will be supporting our local and national economies.

“Many businesses have told us that the process of bidding for work needs to be simplified, and for that reason, at a local government level in particular, we have argued for contracts to be unbundled. We have also worked to remove barriers to make it easier for small, local firms to apply for contracts. It’s about supporting our companies and sustaining our economy.

“Procurement is one way in which Plaid Cymru has made a real difference to employment levels and economic performance, and we will continue to make the case for ensuring that the money of Welsh taxpayers is used as wisely as possible, for the sake of our communities.”