Economic Development in Wales

A recent poster campaign by the Welsh Assembly’s development agency summed up all that is wrong with economic policy in Wales. At one site, in Abergavenny, potential entrepreneurs were urged to set up their own businesses. My objection – the poster was entirely in Welsh in the heart of the most anglicised part of the principality! It might have pleased the Welsh Language lobby, not mention the advertising industry, but a serious entrepreneur would have concluded that those responsible know nothing about researching your target market.

Across the world there is a growing acceptance about the role of government in developing an economy. In summary this should be about putting in place a decent infrastructure – transport links, IT connections and so on.

Ensuring that the available workforce are healthy and well educated, that reasonable standards for employees are complied with, and reducing taxation to a level which encourages existing businesses to expand and outside companies to relocate.

Short term state help for those wanting to set up businesses is also important but will only be effective if the above conditions already exist.

Policymakers in Wales have largely ignored the most important conditions and AMs demonstrate their fragile grasp of basic economics on a regular basis. One day they will call for more to be done in the third world. The next day the same AMs will be condemning a bank for moving a call centre to India.

Let us ignore the fact that the jobs created in the third world by outsourcing are responsible for the increased living standards which politicians claim to want. Instead let us remember that companies go to India and China because they offer a better climate in which to do business.

In Wales major road building projects are on hold. The health service is a disgrace, well run local schools are being shut down and we are turning out an army of graduates who can now get a degree in “surf studies” but are unable to understand basic maths.

Company taxation levels are far lower across the Irish sea something which has surely played a far greater role in Ireland’s economic success than it’s membership of the Euro.

Here we have opted to keep taxes high and spend spend spend in the public sector. The workforce of the Welsh Development Agency alone has doubled over the last few years. Ministers believe that more “advisors” and “consultants” will equal more jobs.

This has appeared to work. Many jobs have been created in the last five years, but almost all of them are in the public sector and being paid for by the dwindling number of people who are actually contributing something tangible to the economy.

To be clear we should support and increase in teachers nurses and policemen who make a very important contribution to the economy for reasons already explained. But there is plenty of scope for saving money which could be spent improving the infrastructure, educating the workforce and cutting taxes, allowing Wales to compete with the rapidly emerging economies of Eastern Europe and China.