Our report on ‘The Shape of Wales to Come’ makes grim reading

Published: 1st Oct 2015

Pic of VictoriaThe last seven years has seen the Welsh economy take a battering. The recession saw off thousands of businesses and jobs, from big names like Hoover and Hotpoint to small, family firms. The sluggish recovery has brought mainly part-time, temporary and self-employed work in its wake. Wales is one of the poorest parts of the UK, an unenviable position it has held for some time.

Looking ahead, the economic forecasts, summarised in a recent Bevan Foundation report, The Shape of Wales to Come, make equally grim reading. Those from PriceWaterhouseCoopers, for example, suggest that the gap in Gross Value Added between Wales and the rest of the UK will widen over the next few years, as London and the south-east of England are expected to outpace Wales, as well as the north-east of England and Northern Ireland.

Add into the mix forecasts that much of the increase in employment over the next 5 years will be in part-time or self- employment; that around 70,000 children could leave school without give good GCSEs; and that poverty is likely to rise as the poorest fifth of families with children lose up to £40 a week from benefit cuts, and it is no surprise that Wales’ future has been described as ‘bleak’.

This approach has, in the good times, delivered jobs and businesses on

a plate. But what it hasn’t delivered is lasting, sustainable economic change.

Wales’ relatively weak economic performance to date ought to suggest that something isn’t quite right with its approach to economic development. Yet it’s pretty much business as usual. The Welsh Development Agency – with its glossy inward investment programme and its slightly less glossy advance factories – has long gone, but its legacy remains. Inward investment is still warmly welcomed, whether from overseas or over the border. The Welsh Government still favours physical regeneration over other kinds, at least if measured by the amount it spends. And grants, whether to call centres or financial services companies, continue to trump other sorts of financial instruments.

To be fair, this approach has, in the good times, delivered jobs and businesses on a plate and very welcome they have been too. But what it hasn’t delivered is lasting, sustainable economic change. This weakness is revealed every time the cold wind of recession blows: inward investors up sticks, manufacturing is put on short-time and service businesses slump. With the outlook for the next few years looking to be extremely challenging, it is surely time to recognise that a new approach is needed.

Ironically, the Welsh Government is quite good at talking the talk. It has just passed a ‘Future Generations Act’ to promote sustainable development, it established a Welsh Co-operative and Mutuals Commission and supports a co-operative development centre; and its Social Services and Well-being Act 2014 even requires local authorities to develop social enterprises to provide social care and support services. On top of this, millions of European funding has flowed into social enterprise support services.

And yet, for all the good intentions, Wales is a long way from having a thriving, alternative approach to economic development. There are some great ideas – the ‘deep place’ ideas of Prof Dave Adamson and Dr Mark Lang to regenerate Tredegar is just one example – and some shining, but sadly one-off, examples of doing things differently. But this doesn’t amount to alternative local economics Cymru-style.

It is hard to understand why a nation that likes to boast its collectivist, egalitarian and radical principles is, in my view, a bit of a desert when it comes to alternative economics. It may be that there are issues of scale: Wales is mostly small- and medium-sized towns and villages, and Cardiff, despite being a capital, is a relatively small city – and size does matter. Wales is also not very well connected – it doesn’t even have a truly national newspaper – so good news simply doesn’t travel. Wales’ economic history must also play a part. It has a relatively small pool of entrepreneurs, limited capital and lower average incomes, all factors that might deter risk-taking.

The economic reality today and the forecasts for tomorrow should be a wake-up call. Business as usual is simply not an option. It is time that so-called alternative economic ideas entered the mainstream.

Comments (2)

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This depressingly accurate picture drawn from the Bevan Foundation’s excellent analysis should be a call to arms to all who are concerned with the future of Wales. There should be a resounding rejection of current Welsh Government economic policy which is tied to an outmoded and completely inadequate conception of Wales. It blindly follows policies that continue the downward trends evident for over 20 years. It’s time for an ‘experiment’ of localisation of economic activity embedded in the foundational economy identified by the Prof Karel Williams and his team at CRESC. This can run in parallel with some of the existing strategies where they can be seen to have some likelihood of success. Welsh Government and local government need to get behind a radical rethink of economics that actually does stress, local, collective, mutual and social approaches to the creation of employment, where it is needed in the towns and villages of Wales. The city region approach will founder on Cardiff’s limited size and poor economic performance. South of the railway line it shares the same issues with the Valleys. Well done to Victoria for finally shattering the self-delusion that Wales is a smart, small country.

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markhooper

Absolutely agree, Dave.

Some have done well from this poorly aligned economic policy – they’re the same apologists who criticised the report when it was published. They missed the fact that the report was ‘simply’ a collection of forecasts currently available, and curated in one place.

Vested interests are alive and well in Wales, to the detriment of the country as a whole, and the poorest communities in particular. Shamefully this has been the same for multiple generations….

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