Future of Circuit of Wales thrown into doubt after differenc

I do think sometimes what is the point of living in Wales!

No nuclear power station, lagoon, steel, circuit of wales, whats left?

It's not just Wales! England can't seem to get Hinky Point sorted out without the French. They've lost more of their steel production than us. They're not even interested in a tidal barrage on their side of the Severn. There's just no serious interest in anything but banking.

I think an American friend of mine summed Britain up quite well, when he said London was a first-class world city attached to a 3rd-world country. Now I know there are a lot problem areas in the US, but there's an element of truth to that statement.

Oh come on that's really quite melodramatic. London does dominate the UK in a way few other relatively large countries are dominated by one city. I can think of only France to be honest. But rUK is far from a 3rd world country. The average Yorkshireman or Welshman is considerably better off in real terms than 30 years ago, and far better off than the average citizen of Ghana, India or China (although, strictly speaking the latter would be second world, I guess). Adjusting for the cost of living and accounting for transfer income, the median Welsh household has about 93% of the median UK household, and the median London household something like 105%. (London has rather a lot more rich individuals though, of course - comparisons of the 80th or 90th percentiles would be very different!).

And its clearly not the case that policymakers care only about banking. They really would like a broader based economy - if only because it meant a broader tax base!. A bit of a myth has grown up that the banks continue to be massively favoured. At least in terms of tax, that is not true: the banks (or more correctly their customers, employees and shareholders) are being asked to pay rather a lot more in tax than most other sectors of the economy now: restrictions on loss carry forwards, higher rates of corporation tax, bank levy on domestic balance sheets. Not saying that's bad, but its not recognised by a sizeable swathe of people who just can't seem to get their head around that the banks had to be propped up not to save the bankers, but to save the depositors, and the broader economy. Bankers actually saw pretty hefty job losses and pay cuts.

And I'm not really sure what you think on this issue. On the one hand you seem to think its a travesty there are problems with these big schemes. And on the other that the government would be foolish to financially underwrite them (or at least this one). The reason they are asking for government backing, whether in the form of loan guarantees or guaranteed prices is because either they involve risks that are too big for the private sector, or are more generally economically unviable. It then becomes a question of whether the social, environmental etc benefits make the implicit or explicit subsidy of government backing worthwhile.

And in nuclear, the reason to involve the French is because they have much more experience of nuclear power - generating something like 80% of electricity from it, compared to maybe 15-20% here (in mostly older plants).

For £360 million you could build a geodesic dome over Ebbw Vale and fill it with palm trees. Probably.

Exactly! Think what you could do if you ploughed £360 million into various business schemes in Ebbw Vale alone!

Its probably important to distinguish £360 million of loan guarantees from actual funding. In principle, Welsh Govt could even have made a profit on the deal (provided they were going to be paying something for the loan guarantee, which is typical). But the fact it seems they couldn't get anyone to bite with the Welsh Govt offering 80% loan guarantee suggests that the scheme really did have poor economic fundamentals. No private sector partners could be found to take up to 20% of the total risk?

How did it take so long to realise this? Questions need to be answered there.

How did it take so long to realise this? Questions need to be answered there.

This is the important point. The timing is extraordianry though - for the WG to announce this now rather than delay it until after the election is either very brave or very foolish. Maybe Edwina was trying to stick one to Carwyn as she left.

Here's what I think happened now I've seen the interview Edwina Hart gave.

Edwina Hart is on record saying that "until several weeks ago it was £35 million they wanted from us, then all of a sudden its a guarantee for £360 million". I don't think she would lie about this - it would look pretty bad to be caught out in a lie and it would be quite easy to catch her out. So I believe her when she said this was a fairly recent issue.

So I think whats happened is that the developers and funders were trying to manipulate the Government into providing these guarantees by using the election. A certain amount of momentum had built up behind the project. Money had already been spent by WG (although how it comes to £9million is a bit beyond me). L&G and HotVDC then tell WG that actually they need the project completely under-written with rental income guarantees just a couple of months before the election. They probably thought WG wouldn't want to pull the plug on something like this just before the election - too much political capital invested, a risk to a party already risking a loss of seats in the Assembly.

So I think its good that WG called them on this - and that they did so despite the risk it damages them electorally. And the real question actually comes back to when did the developers/funders know this is what they would ask for? How long have they sat on this in the hope of bumping the WG into funding it just before an election?

[quote"]

I think an American friend of mine summed Britain up quite well, when he said London was a first-class world city attached to a 3rd-world country. [/quote]

You must have the same friend as Stephanie Flanders - the former BBC Economist because I remember her saying this also...

http://www.bbc.co.uk/news/business-21934564

Her source was....an American working in "the City" - so he must know what he's talking about.