Wed, 30 Nov 2011 at 22.50pm CF99

Welcome to the programme.

We're not in CF99 tonight,

as the Assembly building is closed due to the strike.

So here we are in CF5.

Tonight we're discussing the effect of the strike.

A hard kick for the Government or a pointless protest?

And as the Chancellor predicts some very lean years for the economy,

when and how will the silver lining come for Wales?

The four joining us tonight are the Plaid Cymru AM Jonathan Edwards,

who is in Carmarthen,

Llyr Roberts from Cardiff Business School,

Elaine Edwards from the teachers' union UCAC,

and Iestyn Davies of the Federation of Small Businesses.

Welcome to you all.

More than 1500 schools closed and 500 operations postponed or cancelled.

Some libraries, courts, councils and roads closed.

These are some of the effects of the strike in Wales today.

David Cameron said the action was "irresponsible,"

but the unions' message is that public sector workers

should not have to pay more, accept less and work longer for their pension.

Here's Elliw Gwawr.

Protesting to protect their pensions.

Across the public sector, from teachers to bus drivers,

health workers to librarians, there is discontent with the UK Government's plans

to make changes to pensions.

The Government is asking workers to pay more into their pensions,

and to work longer and retire later.

They've also linked the growth in pensions after the person retires

with the less generous measure of inflation, the CPI, rather than the RPI.

Despite the fact that unions and the Government have been in discussion since the summer,

they have not yet managed to reach an agreement.

These workers are marching through the city today to make it clear to the Government

that they are not happy with its plans to change their pensions.

I have spoken to a number of people who say they are very angry with the plans,

and that if they must, they're prepared to strike over and over again.

The Government has forced teachers and unions to go on strike today,

since they've refused to negotiate on so many areas of the plans.

They're asking teachers to pay 50% more every month into their pension,

and work for years longer, and at the end of it,

accept on average some 50% less.

The Prime Minister argues that the changes will still mean they get the best possible pensions.

Pensions which, they say, are still much better than those in the private sector.

In the private sector, employers only pay half into the pension

what public sector employers do.

But you could say that the best thing would be to raise that level in the private sector

to match that of the public sector.

But firstly, the private sector cannot afford that,

and it's now clear that the public sector can't afford it.

The unions say that George Osborne's decision

to limit public sector pay rises to 1% for another two years

will make it harder still to come to an agreement.

And as both sides' viewpoints become more entrenched,

it's possible that this is only the beginning.

Elliw Gwawr.

Well, Elaine Edwards, as one of the unions on strike today,

David Cameron called it a damp squib.

Well, I have to say that it wasn't a damp squib in Cardiff today,

nor throughout the rest of Wales, I would say.

With that many schools closed,

the effect can be seen clearly, of course.

For anyone at the rally in Cardiff today,

the strength of feeling and unity between the unions

and the individuals there, some on strike for the first time for more than 30 years,

their feelings were strong enough to send a strong message to the Westminster Government.

The strike is about pensions, of course.

But is there a wider context,

that these public sector workers have seen their salaries effectively frozen,

an announcement again that they will be frozen or kept down over the next few years,

reducing in real terms - is there a more general anger?

I think our members are very aware that whatever happens to pensions,

it could affect future recruitment for the sector.

It will have an effect in the future on the profession and future pupils, too.

It is also a fact that freezing salaries for two years, and now the announcement yesterday,

1% at most in the future, and a review of public sector salaries,

that will mean that people find their salary has been cut in real terms, once again,

and it will be impossible for them to afford the extra contributions.

Iestyn, as someone representing the private sector here,

do you have any sympathy for people like Elaine?

I do.

We have to accept the fact that anyone losing out

on a salary or a pension will feel that way.

But the truth is that we are all facing the same situation.

We're in a very difficult situation.

By now, people in the private sector have seen the same kind of situation.

I know the unions will say, why can't everyone be treated the same,

why must everyone suffer?

So we need to find a positive way forward.

We need to find a new way of having these discussions.

Striking doesn't work, we all know that.

It's an old technique that has had its day.

Jonathan, strikes don't work, what will the implications of today be?

Who has done best out of today?

Well, my father, during his career, was a shop steward,

and his nickname was "John Strike."

So I was very supportive of today's protest.

It's about more than pensions, I think.

It's about creating a fairer society,

and there are wider implications to that.

But in terms of pensions, the Public Accounts Committee in Parliament

has just reported that they are sound, the Hutton Report said the same thing,

and the National Audit Office as well.

So there's no reason to make these cuts.

I asked a question in Parliament a couple of weeks ago about the Teachers' Pension Scheme,

asking when they made the last valuation.

The Government hasn't looked at the pension since 2004, so how can they say that they're unsustainable?

But what has been achieved by the strike today?

Haven't parents and children...

They've had to find something to do with their children, they've had to take a day off work,

people like that are affected.

The division line, in my opinion,

isn't between ordinary people in the private sector and public sector workers,

but between ordinary people and the super-rich.

I've been putting measures down in Parliament,

raising questions, along with working with charities like ActionAid,

who show that 98 out of the 100 FTSE 100 companies use subsidies in tax havens,

so as not to pay tax.

That's where the Government should be aiming the axe,

not at ordinary people.

Llyr, if we look at what's been going on here,

as Jonathan suggested, the coffers are meant to be relatively healthy.

What happens, in reality, is a kind of additional tax of 3% on the public sector,

to help clear the deficit.

It's got nothing really to do with pensions.

Hmmm... For me personally, I work partly in the private sector

and partly in the public sector.

I have sympathy for both sides.

But we have to accept that the population is ageing,

and in the long term, we can't afford...

We'll have to take this hit,

and the private sector, unfortunately, has taken the hit.

But wait a second, what happens to those people in the private sector,

and what will happen to the people in the public sector,

is that the state will have to pick up the tab whatever,

through pension credits, if they fall below the threshold,

the state will have to pay anyway.

There's certainly an argument in that,

but in the end, I'm not enough of an economics expert to have all the details on that.

But to me, whichever way I look at it, everyone...

Unfortunately, we're all going to be poorer over the next few years.

We're all going to have to sacrifice some amount of our wealth.

There are huge myths, aren't there? We talk about the super-rich, but where are these super-rich people?

Do they work in the private sector?

No, they don't. They more than likely work in the public sector, and those who...

We're talking about bankers, aren't we?

And unfortunately there aren't many bankers in Wales, are there?

So these people earning extremely high salaries,

they don't, as such, belong to the private sector, especially here in Wales.

But, Iestyn, many voices from workers in the private sector today

were supporting the strike, saying, we sympathise,

and that private sector pensions should perhaps rise rather than bringing public sector pensions down.

That doesn't answer the real question you have asked.

The question is, how do we fund pensions in the long term

for an ageing population.

That's the question that no-one has really answered yet.

We have to consider as well, yes, the population is ageing,

but if you expect people to work until they're 67 or 68

before they can get full access to their work pension,

that means you're looking at an older workforce.

You then have to consider what happens in terms of the standards of work when people get older.

Some will be able to do their work the same as usual,

but some will be ready to leave work,

because their energy has gone and their perseverance in the job, perhaps, has gone.

And what happens to young people who want to come in and start a career?

Do you accept, Elaine, at least,

that the days when people were more or less forced to stop work when they were 60 in some sectors,

that those days have gone?

-And perhaps if people want to continue working, they should be allowed to.

-Oh, definitely.

If someone feels healthy and able enough to keep on with their work,

but there are jobs here that have big challenges to them,

and you also have to consider the young people who will be wanting to start a career.

What happens?

40% of teachers who left university last year haven't managed to find a permanent job.

In one year, they are newly qualified teachers.

What will happen when the teachers who are currently in the profession

have to work for eight more years?

Llyr, we've talked about bed-blocking in hospitals,

what about job-blocking?

That's certainly a point, but you also have to remember, those are the young people

who'll be paying the tax to pay for these pensions.

-It's a balance in that.

-Well, if they get work, that is.

-Well, yes...

This is a very thorny issue, but in the end, the present situation,

I think the gap between conditions and pensions in the public sector

and those in the private sector has got too big and is unsustainable.

The danger is that we create great ill-feeling in the rest of society,

who are feeling, we are struggling, why should we be paying so much towards pensions?

Why don't we have our own pensions?

-Many people working for Welsh small businesses, for example, have no pension.

-Thanks, for the moment.

Well, according to George Osborne, the situation in the nation's coffers is even worse than expected.

Government public spending cuts will continue longer,

and more public sector workers will lose their jobs as a result.

The economic research group IPPR North has told CF99

that it expects the Welsh economy to suffer worse than any other part of the UK.

Here's Arwyn Jones.

As autumn turns to winter,

as the temperatures start to drop and the days shorten,

it is perhaps inevitable that only the dogs are still lively at this time of year.

And the forecasts for the future aren't too hopeful, either.

Our debt challenge is even greater than we thought,

because the boom was even bigger, the bust even deeper,

and the effects will last even longer.

After the Chancellor's statement yesterday,

we now expect still more public sector workers to lose their jobs over the next few years -

700,000, rather than the 400,000 originally predicted by the UK Government.

So for the economy, just like the weather at the moment,

there are lean times on the horizon.

And according to economic research group IPPR North,

there's a very stormy decade ahead for the Welsh economy.

They say that the number of people in work in Wales

will fall by 46,000 by 2020 compared to 2008.

If you look at the sorts of jobs that people tend to do in those places,

those areas are much more reliant on the public sector,

they're much more reliant on manufacturing

in order to provide jobs, and those are areas of employment

that we know have been hit very hard during the recession, and as part of the austerity measures.

And you're seeing the effects of that.

As a result, the recovery is going to take longer in those places.

So what's likely to happen to all these public sector workers who are going to lose their jobs?

well, the UK Government hopes and expects that as we come out of the economic crisis,

the economy will be stronger,

and the private sector will be able to step into the breach and create more jobs.

But is there another answer, as well?

One economist's answer would be for public sector workers to put their unemployment benefit to work.

What we don't know, of course, is what people in the public sector will do.

Some of them might be quite happy to start a business or do something.

If the Welsh Government was able to help those who are going to lose their jobs start a business,

that might be a way out of this problem.

There was a glimmer of good news for Wales from the Chancellor yesterday.

£216 million, which could be used for building schools, hospitals or even roads.

One thing we don't see is,

no railway project at all has been announced.

These's nothing referring to the Severn Bridge,

even though they're going to halve the toll over the Humber Bridge

in the north of England.

Every cloud has a silver lining, as the old saying goes,

and the green shoots of recovery are hoped for.

But for Wales, the economic darkness could continue for years to come.

Arwyn Jones there.

Jonathan Edwards, why don't we start with those IPPR figures.

Do you share the vision that things will be much worse in Wales than the rest of Britain?

We've been warning of this

ever since the austerity programme was announced.

If you withdraw public money at the current level,

it will obviously affect areas of the state

that are more dependent of public sector money.

So everything we have been predicting since 2008 is coming true, unfortunately.

That gives me very little pleasure.

Yesterday's OBR figures were alarming.

Then in the Autumn Statement, we saw a number of policies being recited as a sort of panic,

to try to cover up those figures.

The signature policy, of course, was the Capital Investment Programme,

Arwyn spoke about it just then, £30 billion worth for the Government,

£5 billion from the Treasury, £25 billion from pension funds,

but, of course, the only part of that that affects the funding of the Welsh Government

is the £5 billion from the Treasury, which means that we'll only get £200 million,

instead of the £1.5 billion we're supposed to get.

It's disgraceful that the Welsh Government has been boasting and talking up this money

in the days leading up to the Statement.

And on that point, you as a party here in Cardiff have been putting pressure in Carwyn Jones's government

to spend and invest more in building projects and so on.

Yesterday, to all intents and purposes, George Osborne announced exactly what you've been calling for.

Well, exactly.

He announced our policy going into the Assembly elections,

which was Build for Wales, using money from pension funds,

and using it for measure of investment in infrastructure.

That then creates demand in the economy.

The big problem we have at the moment is that there's no demand in the economy.

This is the only way of doing it.

The disgrace is that this hasn't been adopted earlier by the Welsh Government.

The Welsh Government itself

was having these discussions with the Treasury before the Assembly elections.

The Labour Party denied that during the elections and tried to undermine the policy,

and they've sat on their hands ever since then.

What's happened now is that England is ahead, and we're not getting our fair share of funding from it,

and the Welsh Government is trying to make out that they've had some kind of special deal

when the UK Government was completely pulled the wool over their eyes.

Llyr, another piece struck me from the Chancellor's statement.

He said that the economy needs to be rebalanced in those areas of Britain

where the public sector was too strong and the private sector too weak.

He obviously means Wales, and possibly also north-east England.

And the suggestion of how to do that was through introducing regional salaries.

That is, the idea that Welsh public sector salaries

would be lower than, say, those in the south of England.

What do you make of that?

Well, in the long term,

the only way we'll get ourselves out of this tangled hole we're in

is through making things.

Over the last decade, we've moved too far into the financial sector and the public sector.

We've stopped manufacturing.

Somehow, we need to start to compete again.

I'm sorry if we have to make salaries more flexible

just to make ourselves more competitive internationally, but we have to look into it.

But how does cutting the salaries of tax workers in Llanishen in Cardiff,

compared to tax workers in Brighton, stimulate the manufacturing industries of Wales?

That's a completely unfair situation, isn't it?

I was glad to see Carwyn Jones saying he'd then have to look at the situation

and perhaps expect to have the pay and conditions of Welsh public sector workers devolved to Wales.

We as a union for teachers have been calling for that since we were established,

and we're disappointed that no Welsh government thus far has had the guts, to be honest,

to take that responsibility.

We feel that leaving the responsibility in the hands of people in Westminster

is dangerous at the moment.

Michael Gove wants to see every headteacher determining what individual teachers will be paid.

We feel that that is dangerous.

Do you really feel that if the whole thing was devolved, and Leighton Andrews has been picketing today,

which implies that he would support you, that a government here could safeguard your salaries?

What's happened to further education lecturers -

it is devolved to Wales there in terms of their local situations.

They are now in a better situation than those in England.

So there are way of safeguarding, and they're not as safe at the moment in Westminster's hands.

Iestyn, from the point of view of small businesses,

is that the way to get thousands of new businesses blooming in Wales, cutting public sector salaries?

It's certainly more complicated than that, of course,

but it's an economic theory.

If you pay people in the public sector less,

there's less of a challenge to pay people in the private sector,

because people don't want to move from a high salary

to a smaller one in the private sector, as happens.

That's the theory.

The truth is, and we have to be straightforward here,

is that too many people work in the public sector in Wales, we all accept that.

The question is whether we accept the fact that something needs to be done about it,

and are we willing to swallow this bitter pill with its unpleasant taste,

or are we going to keep persuading ourselves that we can carry on the same way?

There's no way in that.

Does the private sector take the strain, if you like?

Does it expand? No, it doesn't, Llyr.

The private sector competes on an international level now.

We're competing with China and Brazil.

We have to use every weapon we have to transform our economy.

It's a huge challenge, but we have no choice.

Otherwise it will just worsen and we'll get poorer and poorer over the next decades.

Jonathan Edwards, do we have to accept this bitter pill of regional salaries?

I think it's a disgraceful policy.

The Labour party introduced it, of course, for court workers during their last reign,

and it's come back to bite us.

Are we really saying that private sector workers in London

earning on average twice the salary of the private sector in Wales,

that public sector workers in London are going to get twice the salary

of public sector workers in Wales?

IN an area like London, although it's the richest area in the EU,

where per capita public spending is much higher than in Wales.

It's disgraceful, and it would only entrench the regional and individual wealth inequalities

that exist in the UK.

And Jonathan, in his statement yesterday the Chancellor said that it is bleak, of course,

but this depends on the future of the Euro and the discussions there,

and if they fail, it could be much worse.

What do you predict?

Certainly, if things go wrong in the Eurozone, it will have huge consequences for us.

But this is what is so wrong with the UK Government's economic policy -

it's been modelled on what happened in the 1990s,

and at that time, the US economy was flying,

so they could have that export-led recovery.

IN our case, the trading partners of the UK are in Europe, of course,

and they're in a worse mess than us.

So this whole programme of cutting public spending as fast as he has decided to do

is completely irresponsible.

Iestyn, do you get the feeling that I sometimes get,

that no-one quite knows where the hell we are or what the hell we're doing?

Well, I have no hard and fast answers either.

Yes, to some extent, but the truth is

that since we've all bought into the capitalist economic system we have,

the only way out of this at the moment, unless we bring in a different system,

is the kind of system we're talking about.

Cutting salaries, making ourselves much more competitive here in Wales

than the economy in other places in Europe.

That's how the system works.

So if we buy into that system and appreciate what that system has brought us,

as individuals and a nation, we have to accept those rules.

A very quick word, Elaine, to close. More cuts, more strikes?

Well, We're going to return to the negotiating table now,

-and what I think we're certain of - I don't agree that strikes don't work -

-Right.

-They have put pressure on the Government.

-OK.

Well, thanks very much to all four of you.

That's all for tonight.

Join us back at the Senedd next Wednesday night at 10:20pm.

-From CF5 2YQ, good night.

-Good night.

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