Wales - the poorest nation

Last week, the UK Statistics Authority released their GVA assessments for the UK economy which, in layman’s speak, is the measure of the relative prosperity of each part of the UK.

During the last few years, it has been the one statistic that Assembly ministers must dread more than any other as it shows whether Wales, as an economy, is performing better than the other UK regions.

Unfortunately, as has been the pattern over the last few years, the statistics did not make happy reading.

Yet again, Wales remains the nation with the lowest prosperity per head of population for the whole of the UK. Currently, the level of prosperity is 75 per cent of the UK average, roughly half of that found in London.

Worst still, the gap is actually growing with the other regions and the ‘aspiration’ of hitting 90 per cent of the UK average, as stated by the Assembly Government, is further away than ever before.

More depressingly, this has happened over a time period (2000-2007) when Wales enjoyed massive increases in funding from the Treasury and, more relevantly, over £1.5 billion of funding from Europe to create wealth and employment. With such large amounts of money going into the Welsh economy, you would have thought that Wales would have begun to close the gap in wealth with the rest of the UK.

It clearly shows that the approaches taken by successive Assembly Governments, including the current one, have failed to work and there needs to be an honest reassessment of the way forward for our economy. However, things are not getting better and many businesses tell me that they feel that the process of obtaining support is becoming even more bureaucratic and that they are being shut out of key European funding programmes.

Certainly, the paternalistic approach in Wales that ‘Government knows best’ has clearly been shown to be an abject failure in delivering sustainable economic growth to the Welsh economy and there needs to be a revolution in terms of encouraging the private sector to become more involved in delivering prosperity to Wales.

Recently, some commentators have noted that Wales may be shielded from the worst ravages of the economic downturn by the fact that we are more dependent on the public sector than other parts of the UK. Of course, this conveniently forgets that it is private businesses that generate wealth and this overdependence is probably one of the key contributing factors in ensuring that Wales continues to fall behind the rest of the UK.

Wales must be open for business at all times and we must strive to not only support and build our home grown businesses but to attract the best of global opportunities to Wales. If we are to succeed as a nation, then we must take advantage of every opportunity presented to us. From various conversations with key stakeholders, it is not unfair to say that there are industrial giants who still retain a considerable interest in investing in Wales and we must do everything in our power to encourage them to come here.

During the next twelve months, there will be tens of thousands of jobs lost in the Welsh economy and it is critical that our businesses are fully supported to not only survive the recession but to come out of it stronger and more competitive for the future. To do so successfully, we must redouble our efforts to release the entrepreneurship and innovation which exists within this nation.

Most importantly, we must ensure that the private sector is helped, and not hindered, to achieve its full potential and ensure that we close, and not widen, the prosperity gap with the rest of the UK.

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