24/05/2012 Dragon's Eye


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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


Join Felicity Evans as she takes a fresh look at politics through the Dragon's Eye.

Whether it is your local council, the National Assembly, Westminster or Europe, Dragon's Eye will be probing, scrutinising and shedding light on our democratic institutions.

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