Yesterday, Eurostat released the latest data on GDP per inhabitant, expressed in terms of purchasing power standards, in the EU27's regions. The data shows that West Wales and the Valleys has now declined to 71 per cent of the EU average, the lowest of any part of the UK.
In 2000, the level was 76 per cent and since then, we have had the poorer countries of the former Central and Eastern Europe joined the European Union and yet the relative GDP per inhabitant has continued to decrease. Given this, it is likely that West Wales and the Valleys will, for the third time, qualify for the highest level of European Structural Funding.
I have already written on this previously and my answers to the Enterprise and Learning Committee of the National Assembly for Wales last month on the same subject can be seen here.
Whilst some politicians remain in denial about the worsening economic state of West Wales and the Valleys, the map above is testament to the shameful performance of our poorest region during the last decade and the situation we now find ourselves in. All the areas in yellow are poorer than West Wales and the Valleys in 2008 whilst all those in brown are more prosperous.
The question here is where the billions of pounds of public and structural funding in West Wales Valleys has gone over this period and why, despite the membership of poorer regions such as Bulgaria and Romania in 2007, its relative performance continues to fall?
Surely, with all these resources at our disposal, we can do better than this?
7 comments:
How low do we have to go?
Just been listening to Mike Theodoulou on this on Radio Wales
He reckons he led the proposals to establish Finance Wales - did he?
Don't know - but the case was originally made by the FSB, which commissioned a paper from the Welsh Enterprise Institute back in 1998.
Snee, H.R, “An Enterprise Development Bank for Wales”, Enterprise Policy Paper Series, No1, FSB/WEI, June 1999.
Unfortunately, FW did not end up as a Development Bank on the lines of the Canada Model, which has been highly successful
So the data says that Wales is actually better off than Czech Rep, Portugal, Malta, Slovakia, Estonia, Lithuania, Poland, Romania and Bulgaria.
ALl of which are independent countries. I am not saying that Wales is not an economic basket-case, but we are not as badly off as some people would make you believe.
Penddu
So we are now on a par with Central and Eastern Europe. What the hell have the Labour Party done with the Wales economy for the last ten years and why do Plaid insist on propping them up?
According to Professor Robert Huggins of UWIC
"The spend in the current financial year is estimated at £107 per head in Wales with the RDA for the north-east of England, One North East, second at £97. In Scotland it is put at £76. Bottom of the spend league table is the South East England Development Agency at just £20. However, despite the highest spending per head on the key economic wealth measure of GVA, Wales is bottom on the UK league table and near the bottom in terms of competitiveness. For the financial year 2010/11 business support spend by the Assembly is projected at £288m. Although down on this financial year commitment of £319m, it is still significantly higher than 2001-02 when the now defunct WDA had a budget of £144m."
This means that the more that WAG spend, the more they waste. Cut their budget and give the money back to companies as tax cuts.
It should be apparent to all by now, that blanket intervention has no economic mutiplying effect. The only thing that achieves that is entrepeneurial activity; whether small or big companies. At present, small companies are handicapped by the Banks' policies of risk avoidance, and withdrawing capital from them. Larger companies have an easier time with the banks, and greater amounts of retained profits to invest. We have a leadership that seems to be totally incapable of adopting a pro-business orientation. This may be because of the limited powers possessed by the Assembly, but, far more likely, the frame of thinking of our political class, who are so far below the base line it's scary.
I am coming to a growing realisation that too much has been devolved, not too little; giving central goverment every excuse to ignore what is happening in Wales. Especially a Tory adminstration, which is far more interested in the views from Kensington than from Merthyr.
Bern
As someone who led a project that received half a million pounds from the first round of Objective One funding I am familiar with the shortcomings of the delivery and administration of EU funding (though of course things may have improved by now).
I recall Rhodri Morgan saying that Objective One money would not be squandered on village halls, yet much of it was, as in our case. Though, in fairness, ours is a profitable, 7 day a week operation including a cafe, part-time post office and tourist information point; it provides both full-time and part-time jobs that would not otherwise exist in a remote Snowdonia village.
Having said that, too much was wasted on 'community' projects with little or no return in either employment or facilities. And too many of the jobs claimed were in administering the funding.
Having failed twice to make the most of EU funding the next round must be focused more on business and infrastructure projects of wider if not national importance. For this, I feel, has been another failing; the tendency to look for 'local' projects within defined boundaries. The Assembly must look at the bigger picture.
One project worth looking at is a Bangor to Swansea rail link. To begin with, it would give us a genuine north-south railway. It would create jobs. It could ease traffic congestion - especially in summer - thereby lessening the wear and tear on our roads and the need to spend so much on them. And of course its Green credentials are obvious.
For unless there is a radically different approach this time, the money will again be wasted on small local projects trying to please everybody, and achieving nothing. Which means we'll having this same discussion in a few years time.
Post a Comment