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Turning our economic fortunes around

11/01/2022

Plaid Cymru’s Economy Spokesperson Alun Ffred Jones AM looks at the Wales’ economic performance including the recently announced 2010 GVA figures, and the outlook for the economy in the New Year.


One thing we’ve never been great at doing in Plaid Cymru is heralding our own successes. It has often been said that as a party we’re too busy focussing on tomorrow’s challenges to be bothered with celebrating what we’ve achieved today. So forgive me if I take this opportunity to talk about what is one of Plaid’s most significant achievements of our time in Government in Wales.

On the 14th December 2011, the provisional GVA figures for 2010 were released. They show that Wales’ GVA in that year reached 74% of the UK’s GVA. GVA is just one of a number of useful economic indicators, and the merits of measuring Wales’ GVA in comparative terms to that of the UK could of course be debated. However these figures do provide a useful tool that we can use to track Wales’ economic performance over recent years. The story those figures tell is not a good one.

The figures show that since 1997, Wales’ GVA in comparison to the UK’s GVA has been falling. From 78.2% in ’97, the figures dropped steadily year on year. By 2009 the figure had dropped for the 13th year in a row to 73.3%. As well as reflecting the effects of the more recent economic turbulence, the decline suggested systematic failings in the way the Welsh economy has been run.

That brings us back to 2010 - a year which saw the Welsh Government respond admirably to a recession. The Government of that time brought forward capital spending in order to stimulate the economy, worked with business in order to charter a course through the rough times while safeguarding as many jobs as we possibly could. We were responsive to the changing economic climate, eager to engage with business and unions and we were willing to use all available resources in order to help. And we also saw the launch of a new direction for the Welsh Government in the way it approaches economic development. Ieuan Wyn’s Economic Renewal Programme was devised with input from the business community and workers at its heart. It would concentrate government efforts on specific sectors of the economy that had greatest potential for growth, and it focussed resources on improving infrastructure for the benefit of all businesses rather than giving big hand-outs to just a few. Better broadband for example would help all businesses in Wales to grow.

Having witnessed the years of decline from opposition, Plaid Cymru was able to take its opportunity to bring about real change in government.

Now, the latest figures from the ONS suggest that our work really did have an effect. After those 13 long years of falling GVA figures, the decline in 2010 was halted. 0.7% increase may not be much when we look at how much work still needs to be done – and it does start from a low base. But what is significant is that the downward trend has been halted and that we had begun the process of turning our economic fortunes around.

However, 2010 now seems like a different world in economic terms to where we are today. The renewed economic crisis is taking a severe toll in jobs and businesses throughout Wales. The new Labour Welsh Government seems strangely complacent and inactive during these desperate times. We’ve reached the end of 2011 and the Labour Government that was formed in May still cannot point to any new capital projects it has started. Small businesses in particular are struggling to maintain staffing levels and we’ve seen Welsh unemployment reach record levels. Yet Labour refused to implement Plaid’s plan to offer extended help to SME’s via our Small Business Job Protection Scheme. So if the crisis management is good for nothing, what about Labour’s management of the wider economic development plan that had been devised by Ieuan Wyn? Well the Economic Renewal Programme is already a shadow of the carefully balanced approach that was launched.

In true Labour style, they are already trying to fudge it. The 6 priority sectors that had been identified as areas for significant growth have already become 9. What is the point of priority sectors if all sectors are given priority? Resources were already scarce – now there is a real danger that they are spread too thinly to have any impact. And how about the focus on improving infrastructure to benefit all businesses? No news. Apart from the schemes Plaid initiated while in government, this initiative seems to have been put well and truly on the backburner.

My view of this Labour Welsh Government’s inaction is not really the issue here. The issue is that when we step back and look at what the latest GVA figures mean, we can see that the decline in the Welsh economy that has been locked in for so long has now been broken. That 13 year long series of negative figures has been halted and the momentum could now be in favour of positive change.

That momentum cannot be wasted. The Welsh Government has to build upon it and enable the pace of change to gather. It is within their gift to achieve and our expectations of them can be no less.