Thursday, 13 December 2012


The 2011 Census results have attracted plenty of interest; one interpretation is the confirmation that Wales is a resource rich country with a poor people. This is something that even unionist opponents of independence would do well to recognise, along with the acknowledgement that we are not predetermined (or doomed) to be poor. Historically our natural resources were largely been exploited by others for the benefit of others. There were scant benefits for the great majority of the Welsh people beyond low pay and dangerous employment in the extractive or manufacturing processes.

Following the almost wilful destruction of the heavier industries, the Welsh Office and then the National Assembly pursued a policy of blindly throwing vast sums of public money towards attracting external industry to Wales by providing relatively cheap labour. This largely short policy known as 'inward investment' by and large failed to secure long term employment or grow small to medium sized indigenous enterprises, which are the key to sustainable prosperity.

I for one am pretty tired of seeing the same old recycled old WDA press release in the Western Mail / Daily Post going on about how this or that development will create 6,000 jobs (again). The Government in Cardiff (even with relatively limited powers and an even more limited imagination) reacted far too slowly to the emerging challenges from Eastern Europe and more distant competitors.

We in Wales have paid the price for that inbuilt smug complacency as between 1998 and 2008, some 171 foreign-owned sites closed, with the loss of 31,000 mostly manufacturing sector jobs. The economic development model as practised by the Westminster Government (and the Welsh Office) before 1997 and by the Welsh Government (save between 2007 and 2011) was fundamentally flawed at a very basic level – focused on the short term and fundamentally dependent upon a combination of relatively cheap labour and other inducements.

Economic development (from the 1950's onwards) was focused on one-off large scale developments (single egg solutions), which promised much and deliver significantly less. The assumption, not entirely incorrect, may have been that other smaller business would develop supply materials, goods and services to the primary larger employer – this happened in part, Llanwern Steel works (before the rundown) being a reasonably good local example.

The problem was that if the larger economy suffered a downturn or caught cold then the smaller firms would suffer with varying degrees of pneumonia. The focus should have been on developing small to medium size local businesses, which are significantly less likely to up sticks and leave for perceived greener pastures and fresh applications of development grants and also tend to trade with each other and other local firms.

The LG development near Newport was a classic example of this flawed economic vision - promising the usual 6,000 jobs – it accrued significant public funding (from the then Welsh Secretary, William Hague) yet never delivered anything like what was promised. Most economists (even Conservative ones) should have had serious concerns about the state of the Korean and the Far Eastern economies and a basic understanding of where technological developments in relation to PC monitor screens were going, enabling them to say hang on a moment.

This combination of fantasy island economic assessments, a fatally flawed business case and a forthcoming Westminster election led to one of the more spectacularly duller decisions of recent years being made, something that ended up costing us millions of pounds worth of public money. The old WDA never delivered anything like long term economic stability and much needed long term job opportunities to our communities – something that it should have done considering the amounts poured into it.

Wales is a recipient of significant quantities of Objective One funding, targeted at the West and the Valleys since New Labour recognised the economic and social affecting those parts of our country. Yet European funding opportunities appears to have been seriously squandered, where are the physical assets, by which I mean the things you can literally put your hand on like improved communications (rail and road), broadband infrastructure, etc - that bring long term real benefits to our communities.

Yes, we have developed a highly profitable training culture (in and around Cardiff) quite exactly what this delivers for the Welsh people is open to question? How much money has been scammed (and scammed may be the key word) into dubious expensive training programmes and questionable educational programmes that fail to deliver the necessary skills that workers and potential workers need to make a decent living in the modern economy?

The Plaid driven One Wales Government (2007 – 2011) made significant efforts to think and act differently when it came to economic development with its focused support for small to medium sized enterprises. The current Labour Party in Wales’s government in Cardiff has simply returned to the failed economic development policies of the past.

Living in the past simply won’t work! The old failed model of going out to attract branch factory operations for a relatively short term period has been rolled out once again. This does little to help develop our economy or equip our people for the twenty first century world of work it merely repeats the costly mistakes of the recent past, but, of course Labour in Wales is far happier living in the past than planning the future for Wales.

1 comment:

  1. Then tell your boss to make Labour your number one enemy so we can get on with making OUR country a place where OUR children will want to live.