Earlier this week, the UK Competitiveness Index, compiled by academics at UWIC, suggested that Wales was the 'least competitive' of any of the regions in the United Kingdom. Rather than welcoming the report as a useful contribution to the debate on the state of the Welsh economy, the response from the Welsh Assembly Government’s spokesman was predictable, dismissing it as “incomplete’ and suggesting that other indicators, such as overall increases in employment and household income per head since devolution suggested a more “positive picture”.
Sadly, such comments only reinforce the picture of a bunker mentality within certain corridors of power in Wales.
Worst of all, if there was ever any indication as to why the much-vaunted Economic Renewal Programme may fail to achieve its targets, this was it.
Yet again, the response demonstrates that some of those charged with running the Welsh Assembly Government simply do not understand the dire state of our economy in key areas such as enterprise, innovation and competitiveness.
Indeed, I find it hard to believe that the Minister for Economy and Transport would have approved such a statement, given his call for an open dialogue on the Welsh economy, a call that seems to have been ignored by his own officials.
Not that the UK Competitiveness Index needs defending, given its academic rigour and detailed analysis.
However, as there seems to be an opinion amongst some that everything is rosy in the economic garden, let us examine a number of other key indicators about the state of the Welsh economy since devolution.
During the first Assembly Government, a target was set to increase Wales's prosperity to 84 per cent of the UK average by 2002 and to 90 per cent by 2010.
At the beginning of devolution in 1999, Wales had 77.4 per cent of the UK’s prosperity levels.
However, rather than closing the gap, the policies of successive governments have resulted in a widening prosperity gap. The latest data shows that Wales’ position relative to the rest of the UK stood at 74.3 per cent, the lowest of any UK region.
So, despite having two rounds of billions of pounds of European funding for our poorest areas, Wales has fallen further behind the rest of the United Kingdom. Depressingly, recent data from the European Union suggests that West Wales and the Valleys may well qualify for a third round of European funding as the only region in the whole of the UK that is below 75 per cent of the EU average prosperity.
Has the same been true of other areas that have been in receipt of European funding?
If we examine the three other areas that, alongside West Wales and the Valleys, received Objective 1 funding between 2000 and 2006, we find that South Yorkshire is now at 90 per cent of the EU average, Merseyside is at 83.2 per cent and Cornwall at 75.2 per cent. In contrast, West Wales and the Valleys is at 73.4 per cent of the EU average of 25 nations, which now includes the former communist countries of Central and Eastern Europe.
Let us also look at the performance of manufacturing, once the powerhouse of the Welsh economy. Since 1999, its contribution to the Welsh economy has declined from 25 per cent to 18 per cent, with tens of thousands of well paid jobs lost across the country in this key sector.
In addition, Wales has experienced the lowest increase in average full time weekly earnings of any UK region since devolution. As a result, whilst people in Wales earned £2500 less than the UK average in 1999, this difference had increased to £4200 by 2009.
Even if we examine those statistics quoted by the Welsh Assembly Government’s spokesman, we find that whilst employment levels are higher than in 1999, other poor regions such as Northern Ireland, Scotland and the North East of England have shown a larger percentage increase in employment than Wales during this period. We also have 30,000 more people unemployed in Wales than eleven years ago.
Whilst household income has increased we still remain second to bottom in the UK, after the North East of England.
Many of us who believe in devolution do so because we think that, with the right approach, more powers to Wales can make us more enterprising, more innovative and more competitive than the other parts of the UK.
If all the strategies, initiatives and projects that have spent billions of pounds of taxpayers money have made no real difference to the state of the Welsh economy, then why on earth are we carrying on with ‘business as usual’ if it is doing little to help the relative prosperity of this nation?
At a time when the public is demanding frankness from its elected politicians, we need our government to stop being in denial and to start to finally be honest about the state of our economy.
Rather than criticising individuals such as Professor Robert Huggins, author of the competitiveness report, for showing a refreshing candour about the state of the Welsh economy and what needs to be done about it, the Welsh Assembly Government should be embracing the opinions of such individuals and using them to help guide their strategy for the future.
Unfortunately, its latest response to unfavourable economic data suggests that, for the foreseeable future, there is a greater chance of the devil wearing iceskates than for our politicians and civil servants to accept external advice from individuals who actually know what they are talking about and have the facts to support their arguments.
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