I think the rule is if what was said at the time was in the present, e.g. “it’s fairly good”, then you use the present tense (“Dwedest ti …”, after all, makes it clear that you are talking about something said at an earlier time). If what was said at that earlier time was talking about some time previous to that, e.g. “it was fairly good”, then you use the past. Hope that’s helpful
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Anyone reading this who knows better, please correct. The following is just my understanding as a beginner learner (albeit seasoned linguist 
).
@JohnLever John, you mentioned it yourself, and that’s exactly the point: in the examples, it isn’t about past actions. It’s the English which is doing a great job at confusing us here.
So, Sir Cuthbert Higglesbottom comes out with: “The current government is complete rubbish.” (A statement about a present state of affairs.)
Now you want to report this via indirect speech. Sir Cuthbert Higglesbottom said that the current government …
The Welsh language doesn’t see a need to change the tense in what comes next. And why should it? You’re just going from direct to indirect speech, that’s all there is to it.
Whereas English has something called “sequence of tenses” or sometimes “backshifting”.
Sir Cuthbert says that the current government is complete rubbish.
Sir Cuthbert said that the current government was complete rubbish.
That the tense is changed in the second example has nothing to do with the statement itself (which remains, ahem, true in the present), but with the tense of the introductory clause. As also in the following:
Sir Cuthbert says that the previous government wasn’t much better.
Sir Cuthbert said that the previous government hadn’t been much better.
Sir Cuthbert says he will move to Andorra if things don’t get better.
Sir Cuthbert said he would move to Andorra if things didn’t get better.
Confusing, isn’t it? Trust me, it’s worse in German, where you’d start using the subjunctive in some of these … So Welsh has a beautiful simplicity here.
Edited to add: @johnwilliams_6 has overtaken me and explained it a lot more concisely!
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Yes really helpful - seems v sensible - are you a learner or speaker from birth ?
John
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Thanks for that - really useful. But I have noticed that the SSIW is not consistent on this ie sometimes uses the present and sometimes the past in a phrase after a bod ( that ) - where according to both your and John’s reasoning the present should have been used ? I suppose some ambiguity is possible so long as the meaning remains clear ?
Happy New Year
John
By the way - I do agree with what Sir Cuthbert is saying - croney’s beware !
John
Diolch @JohnLever. I was just reflecting (I hope! ) what Gareth King (@garethrking) says in his excellent Modern Welsh: A Comprehensive Grammer - I’m a learner too
Love the Modern Welsh Dictionary - did not realise there was an accompanying grammar book - will try to get it.
John
But I have noticed that the SSIW is not consistent on this ie sometimes uses the present and sometimes the past in a phrase after a bod ( that ) - where according to both your and John’s reasoning the present should have been used ?
I had some confusion myself a while ago, where I thought the original statement to have been in the past. See here:
Do you have more examples?
By the way - I do agree with what Sir Cuthbert is saying
The point here is that bod, as a VN, has no tense - and that’s why there’s no sequence of tenses in Welsh…it’s not needed!
We might also bear in mind (this is partly relevant here at least, I think) that generally Welsh doesn’t like using two actual verbs with endings in the same sentence or clause when both refer to the same subject - the second is usually turned to a VN. This is exactly what’s happening with Dwedodd hi bod hi’n moyn… instead of (the incorrect) Dwedodd hi oedd hi’n moyn…, which is really modelled on the English arrangements, which do not have the benefit a verbnoun (well, not like what lucky Welsh-speakers enjoy, anyway). The principle is extended, in the case of ‘that’-clauses, to instances where the subjects are different in the two parts - so we also say Dwedodd hi bod nhw’n moyn… She said that they wanted…
Now I agree that you can have a ‘that’-clause where the second verb does have endings - this happens with the particle y, and we have things like
Dwedodd hi y dylen ni fynd
She said that we should go
Dwedodd hi y basai fo’n deall
She said that he would understand
but these are rarer cases involving tenses (after the ‘that’) that are not present or past.
There’s a great grammar whose title momentarily escapes me that has all this stuff in it. And there’s a new book not long out whose title momentarily escapes me that deals with bod, y and all the other pesky little ones for ‘that’ in quite astonishing detail. 
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@garethrking I have a copy of that book from the future © 2021 sitting next to me now (Working Welsh: a Guide to the Mechanics of the Language, for those looking to treat themselves after an abstemious Christmas) .
Honestly I think it should come with a government health warning: may lead to serious addiction, frequent page turning and "Let me just check one more thing. . . " 
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Ah yes, that’s the one! A book from the future for The Language of the Future!
Thanks Gareth, very helpful. You’ve lost me here though:
but these are rarer cases involving tenses (after the ‘that’) that are not present or past.
So not the past? What about someone saying
Ges i wydred neu ddau gyda Carol Vorderman neithiwr
and you’re reporting this? Wouldn’t it be
Dwedodd Aran (y) gaeth e wydred neu ddau …?
Or also the so-called imperfect?
O’n i’n ofnadwy o drist ar ôl y refferendwm. >> Dwedodd Susanne (y) oedd hi’n drist …? Not correct?
There’s a great grammar whose title momentarily escapes me that has all this stuff in it.
You’re being facetious and talking about your own book, right? I have it. If, however, I misunderstood and there actually is another comprehensive grammar you can recommend, I’d be much indebted if you could remember the title. I tend to collect this kind of stuff.
Hi Susanne,
I was being careless with my use of the word ‘past’, there - if the Welsh clause that is being reported is in the preterite (like your examples there), then you would say (again using the VN instead of a verb with endings)
Dwedodd Aran iddo gael gwydred…
OR you can switch to the wedi-tense, which can of course convert to bod:
Dwedodd Aran fod e wedi cael gwydred…
Both these ways are fine - the bod wedi method probably more common in normal speech.
Yes, not correct - or at least stylistically extremely dodgy (dodji i’r eitha).
Dwedodd Susanne bod hi’n drist… OR Dwedodd Susanne iddi fod yn drist…
Yes. And good. 
That is greatly to your credit. I tend to as well.
@Susanne I’m going to take a punt on answering even though @garethrking is about to give you the correct answer more clearly, just to see if I can play it back correctly.
I think with the past we don’t need to specify the tense/time period of the subordinate clause at all. We just derive that from the tense of the main clause and use tenseless bod just to specify person. [OK correction having read Gareth’s reply, I think I’m right about not needing to specify the tense but wrong about specifically using bod ]
NB I believe this is different with relative where we would use sy or oedd depending on the time period of the relative clause.
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Another couple of examples:
I heard that the train left three hours ago
Glywes i i’r trên ymadael dair awr yn ôl
or
Glywes i fod y trên wedi ymadael dair awr yn ôl
Aran told us that the war began in 1939
Dwedodd Aran wrthon ni i’r rhyfel ddechrau ym 1939
or
Dwedodd Aran wrthon ni fod y rhyfel wedi dechrau ym 1939
Now I’m not saying that you can’t use y and say
Dwedodd Aran wrthon ni y dechreuodd y rhyfel ym 1939
but I am saying that you don’t often hear it - actually the fod wedi method is by far the most likely, and natural-sounding for these preterite ‘that’-clauses.
For the future and conditional, however, y is normal and required:
Dwedodd Aran wrthon ni y bydd y parti’n dechrau am wyth
Dwedodd Aran y basai’r parti’n dechrau am wyth
Ditto the modals like gallu and dylwn:
…y gallwch chi dalu’n ddigyswllt
…that you can pay contactless
…y gallen ni aros
…that we could wait
…y dylech chi ailfeddwl
… that you ought to reconsider
Ah, Caroline, you’ve just given me a light bulb moment! I’d felt so sure I’d heard the imperfect in a content clause in the challenges (I’m at Level 1, Ch. 22). Now I realise it must have been in a relative clause, perhaps something like Wnes i gwrdd â rhywun oedd yn moyn … And also preterite, possibly? … rhywun dwedodd wrtha i …? Thanks!
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Thanks a lot Gareth - looking forward to seeing your Modern Welsh Grammar book - just ordered it after someone quoted it in response to my original question. I must admit the idea of a verb/noun with no tenses just has never been a consideration in my learning so far - but now I can start to see how it is important in this sense - and probably also in other areas I am not yet aware of.
Regards,
John
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I hope you enjoy it, John.
Correct! 