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THE NORTH WALES ECONOMY

Last week, I examined the state of the Welsh economy since the beginning of the last decade. As a gog, I therefore beg your indulgence to examine the state of my own region - North Wales - during the same period.

For those of you who can remember back to 2000, the first decade of the new millennium offered many opportunities for the economy of North Wales.

Apart from the devolution dividend, with Wales having a budget of billions of pounds to spend on economic development and education in the way that its new elected government saw fit, the counties of Anglesey, Gwynedd, Conwy and Denbighshire had also just been given access to £1.2 billion of additional European Objective 1 funds to help their most deprived areas and leave a legacy of regeneration that would help some of the poorest communities in North Wales.

More importantly, for the local economy, North Wales division of the Welsh Development Agency (WDA) was one of its most successful performers, acting almost autonomously of the central base in Cardiff when it came to the vast majority of decisions on the local economy.

Therefore, as for the rest of Wales, the signs looked good for the growth of the North wales economy. However, jumping to 2010, then we see that, unfortunately, it has not fared as well as could have been expected.

In the period 2000-2007, the UK economy grew by 44 per cent and the Welsh economy by 38 per cent. In contrast, the economy of North Wales grew by only 34 per cent and, as a result, it now has three of the poorest counties - Anglesey, Conwy and Denbighshire - in the whole of the United Kingdom.

Indeed, the Objective 1 funding from Europe did little to arrest the decline of the North Wales economy. Even Gwynedd, which received more European funding per head than nearly any other region in Wales, has seen its relative prosperity decline during the last few years.

Worst of all, the economic powerhouse of the region - Flintshire and Wrexham - has suffered the most economically. Despite having the advantage of the presence large companies such as Airbus and Toyota, both counties have grown by only 27 per cent since 2000, which is the worst performance of any part of Wales.

Therefore, the economic position of North Wales has, during the last decade, deteriorated relative to the rest of Wales and the UK, and, worse of all, this happened before the recent recession hit the region hard.

Yet, some of us born and brought up in North Wales still believe that there is hope for the region's economy to bounce back if politicians finally appreciated that it is a distinct region with its own economic needs and requirements.

Despite the loss of thousands of jobs across the region, there remains enormous potential for the development of key sectors such as aerospace, clean energy, advanced manufacturing, optoelectronics, marine engineering and high value tourism.

However, to achieve this, North Wales should be given the opportunity and the funding to deliver its own economic strategy for the region and the Welsh Assembly Government should do everything in its power to facilitate rather than hinder this process.

If we could finally have real devolution in terms of economic development in North Wales that doesn't constantly look to Cardiff Bay for approval, then the new decade could finally herald a renewal in the fortunes of the region's economy.

Comments

tarpoley man said…
Part of the problem with certain parts of the north is they continually whinge about the south, and about the English coming in, instead of getting on with bringing places into the 21century. The look and attitudes of many areas which could be premier tourist places is sadly lacking, everything shuts at 5 pm in Caernarfon for example. If you look at much of the business sector, its owned by non Welsh residents. May be more should be invested in developing some enterprise and allied skills there. I travel from over the border in Cheshire and its like going back 50 years
Anonymous said…
has moving WAgs Enterprise HQ up to St Asaph made any difference?
Illtyd Luke said…
Also in regional planning policies in NE Wales, the policy is to make NE Wales primarily a residential/housing region to support economic growth in the West Cheshire sub-region. Look at the current commuter outflows from Flintshire and Wrexham. It's no surprise that economic performance is slow there as everyone is commuting out of those local authority areas to work in England.
Good piece Dylan, however I would question whether further devolution of decisions on where what little money is available should be spent is the most appropriate solution given that there is some truth in what tarporley man claims is a North Wales affliction, those of us who live in North West Wales would argue that it is specific to this region only and that it is the unique brand nationalist politics which have created it, in my humble opinion it therefore follows that giving these people even more power and money might not be in our collective best interests particularly when the businesses in the area are predominantly run by non Welsh entrepreneurs while the Welsh speaking population are employed almost entirely within the public sector which happens to decide where development should be allowed and for what purpose... the result is stagnation and this is a vicious circle we can't seem to break.
Anonymous said…
What on earth does that have to do with the decline in manufacturing in the region. There has been very little support for the declining industries in the region - just look at Wrexham Industrial Estate.

as for cross-border movement, what about the hundreds of workers that are coming into Airbus and Toyota to work every day - are the nats going to have them as Welsh only jobs

Are you therefore going to stop the free movement of people across the borders between England and Wales. I think the EU would have something to say about that, don't you?
Tarpoley Man - whilst I don't agree with all of your comments, I agree that there needs to be more investment into the region, especially into tourism areas.

I recently compared the investment that has gone into Swansea from EU funds as compared to that in the whole of North West Wales and the figures are startling. That is why I believe we should have more devolved budgeting for economic development in North Wales. Civil servants in Cardiff simply haven't got a clue what is needed for this distinct region.

Valleys Mam - I wouldn't know but I have been told that the team they do have up there are doing their best under a WAG-DET regime that doesn't understand or appreciate enterprise.

Evan - you forget that Flintshire and Wrexham have always been the main driving force behind the industry of the region and it is the relative decline iof this part of the world that has not helped the North Wales economy.

Illtyd Luke - this is very much a half empty view of the current situation. This is what you would expect in any cross border region and it is critical that there is a coherent strategy to get more businesses into the region.

For example, given the large scientific and industrial base of the North West of England, there are real opportunities to offer better industrial facilities in North Wales, especially in areas such as aerospace around Broughton. That could be a massive innovation hub if WAG got its act together and as anon notes, the decline of the Wrexham Industrial Estate, which has decimated the town, has largely happened during the last decade under WAG.
Conwy Man said…
Dylan,
I would be interested in understanding whether there is any connection between the poorest Counties and the Authorities charging the lowest Council Tax.
Conwy, for example, has the third lowest council tax in Wales (fifth lowest in England and Wales). Yet in an recent article we are the poorest and have one of the worst economic growth records.
By having a lower Council Tax it limits the capability of the authority to invest into Business and, I agree with you, Tourism.
I'd be interested in your thoughts.
Conwy Man - I very much doubt it.

Two thirds of Conwy County Council's budget is spent on education, housing and social services.

More importantly, I believe only around 30 per cent comes from council tax payers with the majority coming from WAG's revenue support grant.

The real funding for economic renewal comes from either the Assembly (throuhg capital funding) or the EU.

The millions available from this would dwarf what the local authority has to spend every year, althought he best solution is to get all theree, plus the priavte sector, to bring their funds together for the benefit of the county.

Unfortunately for Conwy, it missed out on around £12 million during the last Objective 1 round of funding

http://aberconwy.blogspot.com/2007/01/conwy-loses-out-on-european-funding.html

and apart from the Furnace Farm project in the Conwy Valley, has not received any major project under Convergence Funding.

Whether that says a lot about the priorities of WAG and the local authority I leave to your judgement.
Anonymous said…
Just interested to know, if you want to suppoer business in the poorer areas of Wales, why did you support transitional rate relief in Wales as this would hit the poorest areas and poorest businesses.
Where is your evidence that transitional relief would hit the poorest parts of Wales? There isn't any at all as the increase in the valuation in business properties has hit the poorest areas of Wales -such as Merthyr and Rhyl - as hard as the more urban areas. Do you really think that the 60 per cent of businesses which are benefiting from the reduced multiplier are all in the poorest parts of Wales? If so, show me the data.
Anonymous said…
Transitional rate relief must be self financing , i.e. businesses whose rateable values have risen by less than the average continue to pay a higher rate to subsidise those whose values have increased by more than the average, so these business would not receive the reductions in rates bills that they should be entitled to following the revaluation.

Valuations are likely to go down because of deteriorating trading circumstances, while valuations go up in good business conditions. It cannot be right that the economically vulnerable should support the economically better off.

Overall it would mean the rates yield from business in poorer performing areas or sectors ,would be maintained at a higher level to fund an overall reduction in yield from more economically vibrant areas.

The effect of TR is a lack of transparency, as it makes it difficult for ratepayers to understand how their bills are calculated, and how they relate to their property values and the multiplier.

In addition, TR is complex and costly for local authorities to administer

Basically, the extra 2-7 million set aside by WAG to increase the thresholds would have gone to the Tescos of the world if a transitional relief scheme was introduced.

This is why the CBI were pushing for the scheme.

Smaller businesses would benefit from higher business rate relief thresholds rather than transitional rate relief.

I would be interested if you disagree with this. Mainly as higher thresholds only benefit smaller businesses as large businesses wont qualify.....whereas transitional relief would apply to large businesses, therefore taking funds away from smaller businesses and giving it to larger businesses.

Basically, small businesses in Conwy will be funding the TR of a large Tesco in Cardiff. I would rather the money go to local businesses in north Wales.
Anonymous said…
Dylan, I really would like to know your vies on the previous post.....
Ak said…
The economy of North Wales is a joke and the current government trend is to try and tie it into the economy across the border in England, with Manchester, Liverpool and Cheshire.

People are put-off from investing in Wales because the stereotype we get across the border is that most of the Welsh are anti-English, and in many cases its true.

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