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A clear choice between economic visions

07/03/2022

Article from Alun Ffred Jones which appeared on WalesHome today.

Plaid Cymru Economy spokesperson Alun Ffred Jones AM looks at the different approaches that the 3 main parties in the Assembly have taken to the Economy and argues in favour strengthening the infrastructure that will help businesses to grow here in Wales.

Last week a parliamentary committee recommended the resurrection of the WDA. That issue certainly sparks some strongly held views within the business community – but it has also succeeded in clarifying the differences in vision that Wales’ political parties have for the future of our economy.

The attitude of the Labour party is very significant. Although the most significant economic levers still lie at Westminster, as the government in Wales, it is their job to set a sustainable course for Wales’ economy. It is Labour that will be accountable for how the private sector does or doesn’t grow from now on. Labour’s tactics however would suggest that they want to downplay responsibility and shift blame on all things to do with the economy to Westminster.
Labour inherited a clear plan to develop our economy – the Economic Renewal Programme (ERP) devised by Plaid’s Ieuan Wyn Jones. It was all about boosting those sectors that provided the best potential growth – and laying the structural foundations that would allow all businesses (indigenous or incoming) to thrive and grow. But the current Labour-only government seems intent on unpicking that plan which was formulated in wide consultation with the business community.

Labour is perfectly content to play the ‘grant administrator’ role, setting up funds to hand out grants to businesses – a far cry from the loan-based approach that the private sector favours. They’ve also expanded (or should we say diluted) the number of key sectors in the ERP – more sectors with no more resources.

In true Labour style, they’ve set off on a strategy binge. One for microbusinesses, one on business rates, and a review of the procurement strategy. Labour must be keeping several strategy factories going on full capacity. Their only real positive emphasis has been on the Enterprise Zones now expanded (diluted) from 5 to 7 zones with investment of just £10m over 4 years. If they see serious merit in the scheme, they should be brave enough to spend serious money on it.

It’s easy to understand why it’s in Labour’s interest to downplay responsibility and shift blame to Westminster. They’ve been burnt in the past when Rhodri Morgan famously tried to take responsibility for the economy, setting a target to grow the Welsh economy to within 90% of the UK GDP average by 2010. It fell to just under 75%.

Labour has refrained from prioritising the economy ever since and it wasn’t until Plaid came to government that a clear economic plan of action was published. Plaid also moved the Transport portfolio in with the economy, acknowledging the link between transport infrastructure and economic growth. That was undone on day one of this new Labour administration.

In short, Labour has decided to try and shirk its economic responsibilities. Content instead to let the economic crisis run its course and capitalise on anti-Tory sentiment - jeopardizing the aims of the ERP and any structural development of the economy.

Not unlike Labour, the Conservatives have been keen to keep their heads down in the knowledge that their public spending cuts are hitting the Welsh economy hard. Their pill isn’t sweetened by announcements of huge capital projects such as High speed rail will have zero benefits for Wales.
The Conservatives’ only original contribution is Mohammad Asghar’s backbench’s Bill attempting to legislate to create enterprise. His strange idea failed even to gain the support of his own party group.

But the report last week giving a positive view of the WDA and inward investment has galvanized the Tory benches who see big government grants to attract multinationals looking for short term foreign investments as their key economic argument. This policy has not served Wales well in the past, and to return to it during a time when public money is in such short supply would kill of any hope of investing in infrastructure for the benefit of all businesses in Wales – large and small.

There is a place for inward investment. It can create employment, enrich the management pool and, in some cases, help develop important industry clusters. That is why it is a valued element of Plaid Cymru’s economic vision, rather than the focus of it.

Plaid Cymru believes that Welsh Government’s economic development budget (and yes, we would prioritise raising more through innovative means such as the bond markets, local authority borrowing and housing association borrowing) should provide a short term stimulus by funding projects which have longer term strategic value. In other words, we’d spend the cash creating jobs and circulating money in the short term, but commissioning projects that will improve the infrastructure and improve competitiveness of the economy in the long term. Plaid Cymru would also provide further assistance to SMEs with their business rates as an additional stimulus and job protection scheme.

The key long term challenges post-economic crisis remain as they were when the ERP was designed - to develop infrastructure and grow key high value-added businesses with targeted support. These ‘big picture’ aims cannot be shelved for another day if the economy is to improve significantly.

Approaching a year since the last Welsh General Election, a clear choice is now emerging between the economic visions each of the main parties has to offer. The current Labour government will never prioritise growth. Its politicians prefer to do what their bosses do in Westminster – focus on their tribal war with the Tories. The Conservatives, on the other hand, have set themselves a course which is anti-business and anti-enterprise – willing to sacrifice the benefits for all businesses in order to secure the big buck for the big players. History’s hardest lessons seem to have been missed by them.

Only Plaid Cymru is able to make tailor-made policies for the benefit of Wales’ economy. In good times and bad – it is our sole focus in order to achieve a more prosperous Wales.