Friday, 31 December 2010

Bleak economic outlook for Wales

Yesterdays Western Mail interview with First Minister Carwyn Jones was pretty grim reading for anyone hoping that the Welsh economy might be a priority for the Assembly in the coming years.

Firstly Carwyn seems to think GVA figures have improved over the last 10 years. In fact Wales has been sliding backwards at an alarming pace over that period despite the millions of pounds of extra spending brought about as a result of the additional Assembly related civil service.

Carwyn suggests that he wishes to see the GVA figures improve but like Nerys Evans the day before offers no actual solutions.

He seems to believe that additional law making powers for the Assembly will give him the tools to improve Wales's economic performance.

I am not sure which businesses Carwyn is talking to but I would be amazed if he could find one who believes that more legislation and more regulation is what they need to get their businesses growing. (Other than professionals & consultants who would be leeching more money in return for dealing with the new legislation)

It is clear that the First Minister like the rest of his Party is completely out of touch with the needs of Welsh Business and the Welsh Economy.

When the subject of tax-raising powers was mentioned he immediately talks of trying to increase tax rates, rather that lower them to encourage additional investment and attract new businesses to Wales.

Business responds better to the carrot (tax breaks) than the stick (further legislation) and if we wish to see an improved economic performance in Wales we have to accept that that will mean tax varying powers at some point.

Those in the Assembly who continue to argue for "fair funding" before discussing the issue will soon realise that they are not going to get anywhere. Why should the UK government increase our hand out when, rather that invest the money in economic development we spend it on freebies and tuition fees which are not available to their constituents.

If we want to improve our lot we need to take responsibility for ourselves and have the courage to find suitable long term economic solutions for Wales.

This will inevitably lead to us having less money to spend on health and education in the short term, but will lead to higher revenues in the future allowing Wales to enjoy the benefits of its improved economic performance.

Unfortunately the impotent electoral system in the Assembly means that it is highly unlikely that there will be any change in Government in Wales next May, meaning that the Welsh economic outlook continues to be bleak for at least the next 4 years.

1 comment:

  1. GVA in Wales has grown, year on year. It decreased in 2009 for the first time since devolution began- UK GVA also decreased in that same year.

    "Why should the UK government increase our hand out when, rather that invest the money in economic development we spend it on freebies and tuition fees which are not available to their constituents"

    Because the people of Wales voted for free prescriptions, concessionary bus passes and lower fees, at our own elections? A pretty basic point about democratic accountability!

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