Freedom from what?

did Wales ever even exist as a country or is it a construct of the last 150yrs?

I have more in common with someone living in Bristol or Swindon than I do with anyone in Aberystwyth and Bangor.

If we were independent one of the first things we would have to cut would be the massive subsidies for our ancient but useless language. Then would come massive cuts to the NHS - no more free subscriptions paid for by English taxpayers, Council budgets, Armed forces, schools & universities, police. These cuts would be more in line with Greece's austerity than the mild cuts we are currently experiencing.

say good by to jobs at the ONS, Tax offices, DVLA as well.

At least socialists in the rest of the UK think they can tax the wealthy to pay for services for the rest of society. Who the f'{k are we going to tax to pay for our Wales only services?

Oh that's right we will charge money for water - that will solve all our problems.

I really think if plaid members spent more time trying to learn how to use a calculator rather than learning Welsh and making up history you guys would actually come to realise that we are a million miles away from being able to stand on our own feet.

Edit:

Wales share of public sector pension liabilities are actually around 75bn not 150bn. That would mean payments of around 3.75bn per annum ignoring inflation. That is about a quarter of our current tax receipts. We'd also have to pay around 6-8% on our share of net debt of 60bn which is another 4-5bn. We have tax receipts of 18bn and public sector pensions and interest payments make up half of it.

The economic argument really doesn't stack up at all.

Carlos,

Wales has existed as an idea more than a nation from the Saxon invasions. It is how we exists and that is fact. Try going to the National Museum for the answers, it may enlighten you.

You are an individual. Just because you feel more closely related to Bristolians or Switshitians doesn't mean the rest of Wales does, but the opposite is true. But why do you feel closer to them instead of your Brothers from Aberystwyth or Wrexham?

Wales would have it's own taxes to sort out and would cut its cloth accordingly. The Silk commission doesn't even touch upon the profits made by multinationals in Wales such as Costa, Tesco and Starbucks, taxing them would be a mistake and I'm sure Plaid Cymru know this!

ONS, Tax office and DVLA would have Welsh equivalents so what's the problem? You'd move those from the bloated DVLA in Swansea to another public body that Wales would take over from the British Government, cuts would be unavoidable but nowhere near as much as you or Jantra state.

If you actually listen to Plaid, they are not calling for independence now. They are calling to be put into Government so that they can right the wrongs of the previous Governments. Lianne Woood has said that independence is a long term goal not a short term. If you read more of actual papers and not those who suck up to the establishment you'd understand

Just a quick couple of points as I am on holiday, technically

Jantra, your figures for public sector pensions (however much you revise them) reek of the halfwitted propaganda of the corporate whores of the Taxpayers' Alliance. The NHS pension scheme (of which I am a member) is paid for out of current government expenditure, but is more than covered by the contribution of current members. Any issues of future affordability have been met by making the scheme somewhat less generous (changing from RPI to CPI upgrading) and increasing contributions of current members (as I know to my cost). My wife is a member of the Teachers' Pension Scheme, which has had similar changes, and is in surplus.

15,000 seems too high for the Welsh armed forces, Ireland gets by with about 9,500. And I don't anticipate them fighting anybody.

Trots are actually a sub-category of Marxist-Leninists (the main one, these days), so I am not one of them either. I usually consider myself to be a left-wing liberal.

I note with some assumptions that the more vocal on this thread in favour of a left wing independent Wales are probably all public sector workers.

Now I see the importance of a public sector (albeit - a lot smaller)and some of its workers, but do think this leads its members into a bias towards a left high spending government. No surprise there.

What does surprise me is that some of you are calling for independence and this would probably lead to your job being at major risk. I did not think turkeys voted for Christmas.

Jantra- I don't want to be dragged into one of your political fights, but I do want to correct you on one point - you rightly state that EU law prohibits discrimination on national grounds. However it is permitted to place limitations in contracts in order to promote local businesses and it is a widely recognised principle - in fact bodies such as World Bank insist on it as a condition of funding.

It just has to be done properly.

I'm a public sector worker and I'm not in favour of independence or irresponsible spending! Just saying! Happy Easter all

Lyndon

My comments on public sector pensions are based on the Hutton report, the audit commission review of local government pensions and 2010 whole of government accounts.

I suggest you read them. All public sector pensions except the various lgps and university schemes are non funded. Even the funded schemes are heavily in deficit. In 2010 payments were 21bn whereas contributions from employers and employees are 18bn. The 3bn was taken from central reserves. The schemes are most certainly not self funding.

Public sector pensions are a massive debt for this nation. When your contributions are deducted they are not set aside they simply reduce the cash cost the government needs to provide the service you provide in the year it is given. For every £1 set aside the uk generates £7 In liability. That isn't affordable or sustainable. Perhaps you need to read up a few independent reports before commenting further. Yours is the usual left wing syndicalist bluster that is passed as fact when it's as far from the truth as possible.

FAO Lyndon / BLD

when Plaid suggest a new economic model based on co-operatives, do they have something like this in mind?

Welsh Labour twat launches predicatable and hyperbolic attack on welfare changes.

http://www.bbc.co.uk/news/uk-wales-politics-21988839

I actually thought it was a good advert for life in Wales after independence

serious comment now. The annual welfare and benefits bill is £230bn. We in Wales get more than our fair share of this but lets assume we only get 5%. The total cost of welfare and benefits would be £11.5bn. Add on to that the £3.75bn public sector pensions as well as the £4bn or so interest payments for our share of the £60bn of debt and suddenly we don't get much change from the £18bn we collect in taxes.

We have nothing left to pay for education, healthcare, fire, ambulance, police, armed forces or local government.

independence looks great if you're an anarchist.

Surely no-one ever trusts what the BBC says

I must be one of those very few that refuses to pay that BBC tax or, indeed watches it at the time it broadcasts for the simple reason it is so unreliable.

really? I thought the BBC was very impartial and very reliable. probably one of the best sources of information there is

You're not exactly a shining example of political talent and insight yourself, are you sonny?

https://docs.google.com/viewer?a=v&q=cache:s_WoJFKdOAYJ:www.parliament.uk/briefing-papers/sn03281.pdf+&hl=en&gl=uk&pid=bl&srcid=ADGEESiDKMxEtFurw6FCQ8PuuAN2ryED-LiPWZ0tSXBwvs5r7Yn5RL8zQTElYZDCXQdFG5TqCq-5158oH9X3-NwBnP-jm8ROKeW4IYlU4F_6R6bVkO2TtP21yPiFoMYcs9W1bPf3paq9&sig=AHIEtbQXvShBhKAJqU-3jwKGNFggBA49zA

Top of page seven, NHS has run a pension "surplus" for the last 17 years apparently (according to Wikipedia, at least), this was before contributions were increased by 50% last year. More contribution increases this month and next year.

Ending National Insurance contracting out in 2016 raises an additional £3 - 5 billion a year for the Treasury, apparently.

I can believe it - look after themselves before their patients

And I was so impressed by your posts before. Oh dear.

The amount of tax raised in Wales seems to be falling every day.

The benefits bill in Wales was £8.7 billion in 2011/12.

http://statistics.dwp.gov.uk/asd/asd4/index.php?page=medium_term

Also, since the employer's contribution to non-funded public sector pension schemes comes out of the wages bill, you appear to have counted them twice.

Lyndon

Pensions: I've not counted anything twice. According to the Hutton report:

Employers contributions 11bn
Employees contributions 7bn
Total contributions 18bn

Total Payments 21bn

Deficit 3bn paid for from the central reserve

The NHS pension find cannot be in surplus as it is paid for by taxation and not by a fund. Even if it was in surplus as you say, surely increasing the contributions would see a greater surplus as you would have more coming in than going out?

Benefits may be 8bn or so, but welfare - state pensions and child benefit - are another 4bn or so.wales has a total welfare and benefits bill of around 12bn

Lyndon

According to this from the silk commission, Wales collects around £4.8bn in income tax per annum, which is 30% of our total tax take. That would equate to total taxes of £16bn in taxes in total. Under the Barnett formula Wales receives just under £8k per capita or around £23-24bn per annum.

Wales has around 80% of the average UK GDP. Wales has fewer rich people and fewer large businesses. Given the nature of our progressive tax system, you get more tax per capita where there are wealthy persons paying into the system. Wales has higher unemployment than average, earns less and yet takes more.

Those are the facts. Yet somehow you think we are tax neutral. Madness. Wales spends far more than it generates. Independence would see living standards plummet.

Lyndon you little fibber. The NHS pension is unfunded, has no assets and currently has liabilities of around £290bn according to the NAO/NHS Pensions. The teachers scheme is similar but has liabilities of £230bn or so.

You really do swallow all that union and party guff without question. Even BLD has left the thread as he can see the numbers just don't stack up.

You're the one that's being the little fibber!
You can't possibly compared it like that. The NHS pension contributions aren't held in a fund, they're just spent by the government, who then fork out for the pensions.

You can't compare that arrangement with pension funds that have been allowed to mature over decades, with ones which haven't.

of course you can. The schemes have liabilities of the amounts I have given. The issue is that the pension recipients and the tax payer have been naive enough to swallow what successive governments have been doing over the years.

Consider this. A person earns £25k per annum and pays tax of say £5k. They also pay £2k pension contributions. Now ordinarily the employer has to pay £25k of which £5k goes to the government, £2k to the pension provider and £18k to the employee. Well in the case of the public sector worker the government only has to find £18k because it doesn't need the cash to pay the public sector workers tax and it doesn't need the cash to pay the pension either.

So the true cost to the taxpayer is £18k in the year of service and not £25k. It is a way that governments keep the wage bill down however it is now coming back to haunt them. All of those £2k pension book entries add up each year, especially since people are living longer. The cost of paying for those pensions should have been made by the taxpayer in the year the liability was incurred - instead the government hid the true cost by claiming that (i) they were making pension deductions and (ii) the claim that public sector workers pay tax and NI - they don't.

It is totally correct to say the NHS/Teachers have liabilities but no assets because it is true. The government did not set aside any funding at the time the liability was incurred preferring to keep taxes low in an attempt to appear to be prudent. In other words, get tomorrows generation to pay for today's pension costs. It comes back to inter-generational theft

Christ, I gave you the bloody link, can't you read?

NHS Pension Scheme 2012/13 Receipts £8.9 billion, expenditure £7.7 billion.

My employer's contributions come out of their wages bill as current expenditure, there is no "central fund".

I know more about my pension than you do, matey.

You clearly don't understand how it's funded. Yours and your employers contributions are book entries only. The cash cost is made from central taxation when the pension is paid. There is no surplus only deficit. There are no receipts and your employer never had the cash in the first place

Oh good grief. This is total bull! When the governement award a contract, would you then deduct all the employee income tax, national insurance, corporate tax and everything else that's coming their way in when whine about the cost? No! Do the government deduct VAT when they publish the costs of primary care drugs, or the private pharmacy employees' tax and NI receipts? No!
This is just more of your misinformed anti-public sector agenda again. It's just so clueless, not to mention tiresome. You are redifining ceative accountancy!

It's correct that the government use the expenditure, because the interest rate for borrowing is greater than the interest rate for saving. In other words the opportunity cost of not having that revenue immediately available now would have to be taken into account, which would be more than any interest accrued.
Public ssector employees contribute to their pension, it's just that their pensions are not allowed to mature. Using that to pretend that they cost more than they do, is just shameful and deleiberate sleight of hand.

Simon

i think you misunderstand my post. I am saying that HMT does not require £25k cash to pay the public sector worker. It only requires £18k in cash. This does not mean the worker has not provided an employment role worth £25k. What this means is that HMT can fund employment more cheaply than a private sector employer who has no choice but to pay over the PAYE etc. Therefore it is a real cash cost to the private sector employer.

There are no real taxes deducted from the public sector worker. HMT could pay them £25k gross less £5k tax or just pay them £20k net (which is what they do). add on to the additional deduction of £2k for pension and the cash cost in the year the employment is given is £18k and not £25k.

The issue is that the taxpayer should be paying £25k in cash to cover the service, but instead they end up paying £18k - not enough is taxed in the year the service is provided. Hence in later years the government (wrt pensions) have not actually set anything aside so have to pay from central funds. If the £2k was an actual cash cost, charged to the taxpayer in the year of service and dedcuted from the employee then set aside as you are supposed to do with a pension, then each public sector worker would have a pension fund made up of their own contributions. As it stands, any contributions are book entries only and the actual pensions payments are paid from taxation in the year the pension is paid and not in the year the pension liability was incurred. So much for pensions being deferred income - it is anything but in this case.

This is not sleight of hand, legerdemain or creative accounting - it is how HMT pay for the public sector employer. They simply don't need the gross cash amount as they don't need to deduct tax to pay themselves.

The bit about interest rates. I really don't follow. However what is true is that for every notional £1 contribution it costs £7 in payments. That is fact - read the Hutton report.

Public sector workers most certainly do not contribute to their pensions in full. In 2010 the figures were as follows:-

payments £21bn
employer contributions £11bn
employee contributions £7bn
taxpayer £3bn

so the worker only contributes 33% of the total cost - if you can call the book entry a contribution.

As I said, you misunderstand what I am saying. i think it is wrong to use only book entries now and delay the cash cost to tomorrow's taxpayer. it would be much better for HMT to charge £18k salary and £2k pension (£20k in total) in the year the service was provided. That way, the taxpayer who is the recipient of the service pays the majority of the pension costs. As it stands, the £2k is a notional cost that is not picked up by this years taxpayer but by the taxpayer when the pension is paid out. That is wrong.

Lets simplify it.

If everyone who has or currently does work for the NHS lives to the expected age then the government will have to pay out £290 billion (albeit over a long period)in pension. There is no investments or bank accounts holding this money it will come from taxpayers in the future.

Lets say that the contributions of NHS works do go towards NHS pensions - The 'surplus' you speak of is laughable. Expenditure is based on people claiming their pension now who were in the NHS over the last 40yrs. As the NHS is far larger now than it has ever been before (about 1.7 million people) the fact the gap is so small is scary. What happens when this 1.7 million people retire - we will need an NHS of 10 million workers to fund them!

I wish public sector employees had to fund their own pensions it would let the rest of us off the hook.

Note: why does a country of 63 million need 1.7 million public sector health workers. C'mon Georgie boy get the axe out!

@Jantra

You can explain public sector pensions to public sector workers till you're blue in the face. They simply do not understand. A friend of mine in the police service was moaning about the size of his pension contribution at 11% of salary. It took me a very long time to explain that he doesn't have 11% deducted. As you say, it is a paper exercise. They just subtract 11% from what they pay him. Everything is then simply totalled - salaries, pensions, building, uniforms, vehicles, etc., and the resultant 'Global Sum' is what the police service costs for that year.

Like a few on this Board, he simply couldn't believe it!! A friend who was a Police Authority Treasurer once said to me that he wished he could get his hands around the throat of those who,introduced the Police Pension Scheme all those years ago. I suspect there are many public sector 'Treasurers' who feel the same!?

Pretty interesting information given by the writer of this:

http://www.huffingtonpost.co.uk/ramesh-patel/growth-cameron-austerity_b_2007552.html

http://www.walesonline.co.uk/news/business/business-news/wales-should-consider-setting-up-3864139

"Plaid Cymru is proposing a Public Bank for Wales but what is public banking and is it the answer to the challenges facing the Welsh economy?"

Someone asked whether Plaid Cymru was developing policies to improve the economy of Wales. The above is a link to Dr Ian Jenkins proposal. We are working on many more novel solutions. I am lucky enough to share an office with Ian. We have great hopes for this idea and for Wales.

obviously food for thought. The Uk does have similar banking operations like the co-op (although not state owned the surplus is reinvested a bit like the dividend going to the state). however, the co-op just posted record losses.

WG set up Finance Wales. However at the outset its remit was too narrow. the view was just to help Welsh business to help fuel the Welsh economy. however if there were opportunities to fund non Welsh business this would increase profits which bring indirect benefits by way of increased dividends. Finance Wales opened regional UK offices. The reason I say this is that this proposed bank could be doing away with mortgage lending income by only focusing on capital investment business. mortgage lending income is a big earner for banks.

Any bank would need to be completely arms length with absolutely no political interference. It would need to be run on a complete commercial basis free from political influence. it should also be open for business irrespective of geography.

NB using Dakota is a bad example. it has significant oil reserves and a very small population. it is hardly comparable to Wales. This is of course not a reason to ignore the public bank concept. A word of warning, Eric Daniels is from that part of the world (Montana to be precise).

PS don't we already have one public bank and two pseudo public banks in the UK already?

Of course you are right Jantra, and our team of banking experts and BANKERS are wrong. Yes, it's just like the (failing) Co-op bank. Yes we already have banks just like this, RBS and LBG. Yes Wales is nothing like North Dakota so that's a bad example. Thanks for pointing that out, we'd forgotten to do our research. I will point your post out to the boys on tuesday. We will now cancel our planned conference on public banking and our aim to make this official Plaid policy. Cheers

Quality rant. I'm not sure my post warranted it. I was agreeing with you regarding the concept. We just need to Be mindful that political goals can lead to incorrect decisions in commercial operations.

The political goals though, in this case, trump commercial considerations. That's the whole point. This venture wouldn't be interested in being a "commercial operation" - so who cares about any "commercial" aspect here? - That's not the purpose, goal or remote consideration even.

Simon

I disagree. The bank needs to be run on commercial lines otherwise it will fail. You cannot go about just issuing finance to any old business, the case for lending has to stack up. The point about political interference was in relation to Finance Wales original remit to only help businesses in Wales. This resulted in perfectly good business being turned away. This business would have resulted in increased profits for Finance Wales ergo more money for the Welsh Government. By placing such controls over who and what can be accessed indirectly hinders Welsh growth. I am saying that such political considerations need to be carefully placed. Do we really want to turn away good profitable businesses from borrowing off the bank just because the businesses have an English post code? How does that benefit Wales? By all means set up a Welsh bank, but do so be carefully defining its goals (to help Welsh businesses access finance, to be profitable and so on). At that point the politicians should stand well away from it.

Longer term I think it would be great if Wales had its own financial services sector. I’d like to see a bourse here, I’d like to see an indigenous bank (but not one that only focuses on Welsh business thus shunning a chance to increase profits and bring wealth into Wales directly). However, in all of this they need to be competitive. I don’t think having the WG involved in the running of such a bank will allow them to compete on price with the established players.

Jantra, Finance Wales doesn't just operate in Wales it also lends to businesses in England http://www.financewales.co.uk/about_us/key_facts/finance_wales_group.aspx and I read the other day that it was bidding for some sort of finance contact up the North East too.

SP

I am aware of that. perhaps you missed this the first time round

I am saying that at the outset the politicians wanted to assist Wales but defined the terms of reference and how the business should operate. In my view the politicians should define the terms of reference but let the business define its own terms of oeperation. Finance Wales can now write profitable business without geographical constraint. Which politician thought placing a geographical constraint on a business would be good for Wales?

Jantra,
Just because something isn't being run for a commercial objective doesn't mean it must "go about just issuing finance to any old business" - that's a most ridiculous straw man to pull out of the hat.

The objectives would be non-profit, non commercial, and entirely national interest.

Plenty of organisation have objectives that are entirely commercial, and this is often at odds with the national interest. Something which has the latter as the objective instead shouldn't be too much of an alien concept - it's not like it's a first.

if that is the case then this bank is really going to struggle to compete with the existing players. Profits are what generate future investment. how else do you propose a bank to offer free or reduced fee banking if it makes no profits and continually fails to invest in technology infrastructure.

This appears to be more idealogy than anything else. i've never heard of a bank being operated on anything other than commercial lines. Commerce means money, banks are in the business of lending money. Banks need to operate commerically. You cannot operate a bank without adhering to commerical principles.

How would the bank be financed?
how would it pay for its staff? would it pay market rate (commercial principles) or would it pay some other rate?
how would it borrow the money needed to finance its ongoing operations? I assume it would go to the market using commercial principles.
how would such a bank price its products? i assume it woulds price the loans according to tried and tested risk profiling used by all other commercially operated banks.
how will the bank provide ForEx services if it is not prepared to operate on the principles defined by the commercially minded money markets?

can you see that commericality is not just about turning a profit. this is not straw man at all. that is a weak argument. any bank that decides it doesn't want to make a profit (or surplus if you prefer) is going to fail long term.

the co-op is not for profit bank, but they still generate a surplus (other than this year). to suggest they are not run on commercial lines is nonsense. being not for profit doesn't mean you don't operate on commercial principles. you still have to have to have a viable product offering.

You've never heard of The Bank of England then? Unless you think that it sets interest rates, and operates schemes like quantitative easing for its own purposes rather than the national interest(!)

The bank of England is not a commercial bank, it is the governments banker.

Quantitative easing is a method of rebasing a currency downwards to reduce government debt in real terms. Inflation is a mechanism which governments reduce their debt.

Interest rates are a method of controlling the money supply. The bank of England has to ensure the money supply is in line with national output.

Ah, I see. So "not a commercial bank". You know, that thing you said you'd never heard the likes of.


Right, penny dropped for you then?

being pedantic does your argument no good at all. The bank of England is not a bank. it would be better called the Banker of the government of England. it doesn't exist to lend money to others like commerical banks. Its purpose is not to faciliate trade but to enable the governemnt can meet its obligations as they fall due.


no, as I have no idea what you are on about. The BoE is not a bank. It is the governments banker. A bank exists for the purposes of commerce - to faciliate trade. That is what commerce is about. How do you propose the Public Bank of Wales operates if it doesn't intend on trading?

Jantra, have you actual read the article? The Bank of North Dakota receives the taxes levied by the State of North Dakota as deposits and lends them out using fractional reserve banking. Many North Dakotans have current and saving accounts with the BND.
The bank lends to businesses in North Dakota at market rates, its remit is to support North Dakotan businesses and to grow the state's economy. They don't borrow on the money markets or gamble on futures, foreign exchange, commodities or financial instruments. They are profitable.
They pay good salaries to competent bankers. North Dakota has the lowest unemployment rate in the Americas. That is what we want to emulate. Once Wales has tax-raising powers this type of bank could become a reality. Scotland has a similar project which is considerably more advanced in planning than Wales'.

Jantra,

So what? An investment bank doesn't exist to lend money to businesses either. The fact that Investment, Retail and Wholesale banking are all different doesn't make my point pedantic either. The point is that there's nothing particularly unusual to have non commercial organisations (or even businesses) whose motives are exclusively the national interest. I know that the very idea is dirty to some people, but plenty of other nations with their heads screwed on don't have quite such the aversion to the N word (Nationalisation).

so this bank of North Dakato operates using commercail principles then?

splendid!

are you sure about that? what exactly are derivatives if they are not money products?



they are all banks with a purpose of facilitating trade. They operate on a commercial basis. That is what commercial means - trade. The BoE doesn't, it is not a commercial bank. BoE isn't even a bank.


I never said there was. you are putting words in my mouth. What I said was that it is not possible for a bank to exist without it operating on a commercial basis. Commerce means trade. How do you propose The Public Bank of Wales lends money if it doesn't interact with its customers. how is it going to get the money to them? it can't give it a way or leave it on the doorstep of the business. Unless you have a previously unknown way of a bank lending money to its customers, i'd say the bank has to trade with them. Ergo the bank has to follow commercial principles.

Perhaps if you understood what commercial meant then we could avoid this car crash of a discussion. commercial means to trade. nothing more, nothing less.