24/05/2012 Dragon's Eye

The former leader of Cardiff Council is warning that the

authority's decision to pull plans for a business district could

damage confidence in the city. Rodney Berman, who lost power in

this month's election, says it may be harder to attract financial

companies to the capital unless the new Labour administration

reconsiders. But the council says "the new administration is business

savvy and it will be reviewing all the Council's projects to ensure

that they are fit for purpose and have a real prospect of being

It was said it was a crazy scheme. The government of the day creating

an enterprise zone on the Docklands. 20 Oddy has made a Canary Wharf is

becoming the preferred site for the world's banks. Plans for the

Cardiff District might be less grand. Cardiff's call exchange was

once the centre of commercial life in the city. In more recent times

the capital has been fairly successful in attracting businesses

particularly from the financial services. But the business district

has been put on hold by the newly elected council. Some economists

warned that private business must be involved. If this was purely

backed by council, I don't think it will work. We have to have private

sector investment so other organisations see people are

willing to put their money where their mouth is. That will pump

confidence through the project. It is a bit like Canary Wharf. We have

seen this in Scotland as well. It is led by private sector

development. Cardiff Council will invest millions around this area in

a bid to attract professional services. One of the things we were

developing was a financial model that meant �30 million was going in

from the council and the Welsh Government. That was dependent on

plans we had going for it. If the new administration is not went to

carry on with these plans, if to fulfil some pledges on reducing

council tax, those plans are going to be scrapped. The people of

Cardiff need to know that. But has not made clear when people were

voting in the election. The Lib- Dems reset it as First Minister's

Questions. You government gave a vote of confidence and to the

council for this investment zone. This morning Cardiff council

announced it has scrapped the plans and delaying the creation of those

thousands of new jobs. How will you deliver an enterprise zone in

Cardiff Central business District give Cardiff does not have a

central business district? It has a District business for -- business

District. We will continue to advance Cardiff as a business

district as we have done in the months gone past. The Welsh

Government and Cardiff Council are keen to build on the base the

capital has. Some say the ideas of the enterprise zone and the

business District need to be joined up. You had the Cardiff business

District where we weren't sure if you were going to have enterprise

zones. If the two had come about at the same time this issue will not

be there. We would be singing from the same hymn sheet. Because it was

tacked on after words there is an overlap of when one's

responsibility ends. By that things the new Labour administration's

decision could damage the city. -- Rodney Berman thinks. You don't

want to put a lack of confidence in investors. We also batsman always

envisaged it as a 15 year project. The training floor here may have

long since given way to live music events and functions better it is

traits of a different kind that is coming under the spotlight. If some

are demanding the time is right for a Europe-wide transaction time. UK

Government is fighting proposals from Europe to introduce the tax.

It will hit London but only -- over sent to 5% of transactions occur. -

- over 75%. Can you tell us where you stand on that EU-wide

transaction tax? Are you with Francois Hollande or with the two

leaders of London? It does make sense as long as it is applied as

broadly as possible. It should include North America as well.

have argued that companies will simply move of the tax is applied

only in Europe. Critics say with his is you hovering over the head

of the financial sector if it could make companies less likely to

expand to cities, including Cardiff. It has been compared to inducing

HGVs tax in France. They would never put up with it. If we think

of the income we get from financial services, a significant proportion

of tax come from the sector. Then to be country -- regrowth

Manufacturing, until we have grown other sectors of the economy to

compensate, to think of it financial-services tax is

absolutely mad. If you do decide what kind of society we want to

create a stir up I we're rebuilding the economy with a business-as-

usual approach or a more equity this society? Only working

people,... It seems bizarre to me that speculative behaviour by City

financiers and not curved or taxed in any way. Cardiff may not be able

to rival London for financial- services but it can compete with

other large cities across Europe. Brian Meechan reporting. I spoke to

Mark Barry, an idependant business consultant and transport advisor to

the Cardiff Business Partnership, and business analyst Simon Evans.

What is your reaction to the decision by Cardiff Council to put

their plans for a financial zone on hold? I am quite disappointed. The

eyes of the world around Cardiff as the Olympic torch can see it. At

this is something that was heralded, when it was announced, as a huge

investment into the economy are Cardiff. It was something that was

very much needed. However, what I will temper that with his, the plan

and the project has to be the right one and it has to be a foundation

that is laid for the future not something that is the scheme that

has built for some what is clear. What is clear, private sector

involvement is something that has not been nailed down. Maybe we can

pick up on that in the second. We have seen the Welsh Government

outline its plans for Ray financial zone, we are left with a single set

of plans. There's that makes sense in that way? -- does that make

sense in that way? We could bring ideas and to create a single

function that can deliver for Cardiff. This could be the most

transforming project in the city. It is important. There is time to

reflect on what was proposed before, catch our best batsmen breath and

put it in place. We don't need to rush into this. I am glad we have

this opportunity now to see where - - whether the scheme is not working

as it should be first up the need to see where the private sector can

come in. It is better to know now sue can make sure the scheme works

right in the future. We want something that is good for business

in Wales and something that is good for the economy. How do put your

best foot forward particularly in uncertain times where there seems

to be a lot of business confidence and the reluctance with diseases to

commit money? The challenge is, think where this place could be in

2025. Cardiff will be competing in Manchester, Barcelona, Milan. What

do we have to put in place to eight make it end attracted this is

region? -- to make it unattractive business region. 1.4 million people

can get to work in this location. We have to be internationally

We have access to the city of London. By 2020 we could be saying

Cardiff, it is just under two hours from at Canary Wharf. You can sell

that. Is that how you get businesses involved at ground level

before a brick has been made? Absolutely. Infrastructure and

confidence are key. Businesses have to be involved. We saw the

development of Canary Wharf, there was a key financials institution

who was part of it from the on said. We need the faint -- the same to

happen here in Cardiff. If they knew they had excellent transport

links those things and key for the private sector. Added to that a

great talent of Labour we have in Wales, for them to tap into all of

those things that are important. We need that private sector confidence.

When your company to comment and make sure this scheme can forge

ahead. Do you see an appetite for that? Anyone who is interested in

the city will be interested to contribute to help. It is going to

be vital to have been put in. It is going to be accelerated. You need

to build a team with a capability and expertise and network to talk

to it the professional services, not just in South Wales but in

London, Europe and North America a stop we need to present them with a

compelling offer. We have the time to put the right plan in place.

you share that optimism? I do. We are a proud nation in Wales and we

are going for it. We have the same political colour in Cardiff Bay as

we have in Cardiff centre. That is important. His us likes to see

confidence and stability. -- business. The developmentof the

Welsh and and wider UK economies depends a great deal on what

happens in the Eurozone. Last night EU leaders attended an informal

summit where they were supposed to be talking about how to stimulate

growth, but the uncertainty about Greece and whether it will fall out

of the single currency will have figured largely in discussions.

Michael Arghyrou is an economist at Cardiff Business School.

Welcome. It does explain as you would like what happens in Greece

matters to us in Wales's it is important and I can do you are a

few examples. If this situation continues and escalate, the global

economy faces the prospect of a new credit crunch. Interest rates may

go all up and this will directly affect Welsh businesses, Welsh

mortgages and personal loans. That is the first important challenge

which the Welsh economy will be affected. The second is the

eurozone which is affected by the Greek situation is the UK's largest

trading partner. If that is short of money you will export last. It

will affect job prospects and the Welsh economy, living standards.

What are the likely scenario is facing the eurozone in relation to

the dangers that Greece's posing? There are two possibilities. Their

first is that the Greek elections which will take place on 17th June

will produce a pro-European government. In which case, I would

expect the emergence of a new compromise between Greece and the

you. Police will remain part of the eurozone. We will hope for the best.

It will not solve the situation overnight but it will give them

further time. Where they Greece will take that up is another

discussion. The worst-case scenario is the situation where we have five

they hung parliament off -- or the emergence of a left-wing government.

In which case, negotiations may break down. We will be in uncharted

territory. Greece may leave the eurozone. If Greece were to lead

the eurozone what could that mean? For Greece, it will be very bad.

Although one can make an economic argument a new currency would give

competitiveness, there will be large negative welfare consequences.

The Greek money will be devalued. The Greek state will go bankrupt

and that will cut of credit to the banks. It will be dramatic. For the

eurozone it will be also very difficult because you have a fee of

contagion. The problem is people and Portugal, Spain, possibly Italy

as well, was that if they give Greece have left we may be the next

ones to leave the stock it will bring in uncertainty. A presumably

the governments of the United Kingdom and the difference eurozone

countries will be drawing up contingency plans at this stage to

do with a possibly worse case scenario. At this stage nobody will

confirm officially that these plans are shaped and Abbey worked on. I

would be surprised if those contingency plans went made now.

There are things that the UK Government can do in the event of a

Greek exit from the eurozone or other European countries. I am

pretty sure what the authorities are doing now here will be to

In the meantime, our politicians left crossing their fingers for

that outcome of the elections on 17th June? Yes, they are. Thank you

for joining us this evening. Thousands of families in Wales need

a home, but either can't afford one or fined one suitable. This week,

the Welsh government published its plans to get to grips with the

issue. Part of that included bringing back into use 22,000 empty

homes. To do that, one idea is to that allow local authorities to

charge 200% council tax on any house that has been empty for more

than two years. They are a blight in many towns and

villages. Homes lying empty. There are 22,000 empty homes in

Wales like this one. There was governments say not only are their

untidy, but they are also wasteful. There are thousands of families in

need of a home so ministers have now said that sites like this one

are no longer acceptable. What to do about it is a lot more

difficult. It is a tremendous waste of resources when we realise we

have a shortage of family homes of all kinds, for sale and for rent.

We need to first of all taken interest free loan regime from the

assembly so that the owners of those properties can be assisted

financially to do up those properties for use so that families

can use them. Also we are aware that if that is the carrot, there

may be a necessity for some element of a stick as well. The stick in

question is to give councils the right to increase council tax on

homes like this one which have been empty for over one year.

figures we have looked at in the past has been looking to increase

it up to 200% and that is something that would then provide you with

the finance you require to do the necessary work on the owls. It

would also create a funding stream where this could be an ongoing

thing. You are not talking about one house in one street, but rather

an area or. Some towns and villages have a collection of houses that

need to be tackled. These ideas are outlined in the Welsh government

plan is to give councils the ability to charge up to two men do

percent on homes that have been empty for over one year.

Councils could be able to set their own rates, but the government think

they could raise up to �33 million by doing that which could then be

ring-fenced and the money used to pay for more affordable homes.

Not everyone thinks that is fair. Many thinks it Geoff catch all tax

could do as much harm as good. Recently we have spoken to a family

who have bought her a second home with in their locality purely so

that they can have some were for their children to come back and

live near to them after they finish their studies. There are different

situations. There is also the issue of local families inheriting homes

where they want to retain that home again so that they provide

somewhere for their children to come back to. Council tax go to all

kinds of services, but if a house is empty, you don't use those

services. The point is, you pay your council tax to get services.

If you have an empty home, you are not using services yet still paying

for them. The point is that doubling council tax for up empty

houses is a double tax which will not solve the problems and business

using the tax system. The tax system is there to pay for services

it we use in everyday life, not as a punishment because you are using

your house in the way that the government does not want. The real

problem is not any kind of revenue shortage, it is a shortage of homes.

We don't want to collect council tax on these homes, we want them to

stop being empty and get back into the market or on to the rental

market for used by wealthy families. They have been calls for higher

council tax on second homes as well, even though the government said it

is not included in the White Paper. My discussions with the minister

over recent months is that he did not warm to the idea. Arrested on a

number of occasions and you could see the collaboration between the

ability to raise funds on those houses that I am occupied for large

periods of the year to then produce this fund that will give us the

ability to build affordable homes for local people.

Building more affordable homes is a tricky enough business for councils

like this protest last year demonstrates. More money may help

the local authorities, but even then, convincing people to allow

are affordable homes to be built might be a different matter

altogether. Joining me now, Peter Black of the

Liberal Democrats and the Conservatives Nick Ramsey.

Nick Ramsey, what do you make of the idea of doubling council tax on

NT properties? I find it strange. I concede the principle behind his

white paper and why the government want to have more homes, sadly the

previous government built their Fracture -- fraction of the homes

we need, but doubling council tax risks penalising people rather than

providing extra housing. If you decide that you want to use council

tax in that way, why stick to an arbitrary after 12 months limit and

why stick to 200%? I fear a lot of people will be caught out by this.

Peter Black, what you make of the argument of the misuse of council

tax? I don't accept that it is a misuse of council tax. I think

local authorities need to have a stake to encourage homeowners who

have left house is empty for a substantial period of time. I do

agree that 12 months is too short a period. Councils already have the

power to introduce his after 12 months, but what we need is maybe

after five years. There are a substantial number of properties

made empty for five years that are a blight on the community and are

imposing quite a few problems for the neighbours. In those instances

where the owners of homes have been reluctant to bring them back into

use, having missed it available as a means to encouraging them to do

so is a very useful tool. In those circumstances I would favour of

this provision. Mick, what you make of a five-year threshold? T a prose

it in principle? I agree with Peter that 12 months is too short. As for

five years, I don't think enough analysis has been done to decipher

whether council tax is the right mechanism. Peter calls this a big

stick, it is a massive stake. Where are the government going down the

line of trying to pass regulation, legislation and forcing people who

have empty houses out of their homes by raising council tax. What

they should be doing is liaising with their owners and find out why

the houses are empty and then move forward in a way that is far more

collegiate than this. It is an authoritarian, we don't want you to

have this and we will drive you out. There is a long tradition of using

taxes to us at -- incentive eyes certain behaviours. Labour

governments have used taxes in that way as have Conservative

governments. Not for council tax to be used like that. The purpose of

council tax is a top-up tax to the many that councils get from central

government. Council tax has never been used by this and the point was

made earlier, that if you are using council tax to pay for services, if

a house is empty for a year, then people who are owned that house on

not getting any service. Peter Black, what would you do to try to

tackle the issue of empty houses? A five-year period, some might say,

is too generous for houses sitting empty in communities where there

are people who would love to be able to live but cannot get a house.

I still think there are thousands of homes that can be bought back

into use. We have to allow for the use where people have inherited

houses. We also have to allow for people to improve their homes so it

may remain empty for longer than 12 months, but I do agree, we can't

have this as the only tool in the box. There has to be a proper

strategy are making use of a range of tools including the recyclable

loan scheme. Including the use of compulsory purchase, or and also

having an empty properties officer in every local authority who is

working with owners to bring homes back into use. If all else fails,

we have to have that stick to encourage owners and give them a

little prod to say that if you carry on it will cost you more

money to leave this house empty. I have to tell you that many homes

are Blyton the community and a lot of those have been empty up to 25

years. That is unacceptable when people are looking for a home.

grateful to you both for joining us this evening.

Now, let's move over here and talk to Betsan, our political editor. So,

we are expecting a Green Paper on rearrangement of assembly

constituency boundaries. Give us the background. The UK government

start of it consultation into what the boundaries ought to look like

in Wales. It is not about empty homes, but constituencies that they

think might be to fall or to empty. Looking at Cardiff South, 76 people.

They have to consider that as the argument. The consultation paper

has been revealed. She says she has an open mind and also has in mind

and elegance situation and simple saying it -- solution of 30

constituents rather than the 40 that we have now. And 20 Am's

chosen from the region. 31st past the post Am's. The other parties

all have ideas that are slightly different and ideas as to who

should be making these decisions and the first place. Yes, because

they are claims and counter-claims about what these proposals mean for

different parties interests in terms of electoral success.

Precisely. It is a big if as to whether constituencies for

Westminster will change. If they do, the thought was that she will not

have 40 MPs anymore so that will change to 30, should the Assembly

changed as well? We have Labour and Plaid Cymru saying it is not up to

the UK to -- Westminster to decide this at all. If changed, there

should be 30 constituencies and to first past the palace from those

constituencies. The other parties are saying they are getting rid of

any proportionality, and he will suffer, us. The Lib Dems saying it

proportionality must remain important. He might have a

situation where the assembly changes and the Westminster ones do

not. Then it will get complex. Because of arguments over reform of