Welsh economy faces 'major challenges'

Jun 3 2008 by Martin Shipton, Western Mail

THE Assembly Government last night admitted the Welsh economy faces “major challenges”.

It made the statement as it emerged that the nation has had the lowest economic growth rate in the UK during the Tony Blair decade that began in 1997.

Official UK Government figures included in a report on competitiveness in Northern Ireland place Wales at the bottom of the economic performance league behind all other 11 UK regions. The table is headed by London, followed by the south-east of England. Northern Ireland is in third position and Scotland is seventh.

Plaid Cymru’s economic adviser Eurfyl ap Gwilym, who came across the table by chance, said: “This is not a good position for Wales to be in. It’s undoubtedly the case that unemployment levels have come down while the employment rate has gone up.

“But it seems despite all the efforts over the years to get people back to work, many of the new jobs that have been created are low paid, not producing much added value to the economy.

“There is no simple answer, and all the factors that together could provide a solution will only do so in the long term.

“Education performance needs to improve – it’s clear Wales is under-performing in comparison with England and many other countries. Every year we are told exam results are improving, but what matters is how they compare with what is being achieved in other countries.

“There is also a widespread feeling in business circles that a lot of vocational courses taught in further education colleges do not reflect the needs of the jobs to be filled in the Welsh labour market. This has created a degree of tension between the business community and the academic establishment.”

Dr ap Gwilym said he believed there was a case for reducing the amount of public money paid to companies in handouts and diverting the money saved into improving the infrastructure: “Our road network in Wales is not good, and improving it would almost certainly create better job opportunities. We also need to be spending more on science and technology: we are way behind Scotland.”

An Assembly Government spokesman said: “Despite significant progress over the past few years, we fully recognise there are some major challenges to overcome before we achieve the kind of prosperity we want across all parts of Wales.

“That is why we are prioritising programmes to improve the skills of the Welsh workforce, tackling economic inactivity and forging closer links between enterprise and our academic community, maximising the commercial benefits from access to our world-class academic institutions.

“We’ve also taken steps to improve our effectiveness in developing Welsh businesses and attracting global investment by launching an innovative programme for business support in Wales underpinned by the newly created Single Investment Fund.

“The new round of European funding programmes, utilising whenever possible European Investment Bank support, will also provide us with the opportunity to deliver further real improvement across the Welsh economy. These are just a few examples of how we are determined to use every tool at our disposal to create the right environment to help support businesses in Wales to provide high quality, highly skilled and well paid employment opportunities across the country.” The Tories’ Shadow Economic Development Minister David Melding said: “Rhodri Morgan and the Welsh Assembly Government will find this sort of evidence difficult to dismiss. After nine years of devolution there appears to be little prospect of Wales catching up with other parts of the UK, let alone the best performing, when it comes to economic growth.

“The blame for this failure must lie at the feet of Rhodri Morgan and the Assembly Government, who have dictated economic policy in Wales over the last decade.

“We have argued for some time that the Welsh economy needs a larger private sector. The first step towards generating wealth, improving skills, encouraging entrepreneurship, and fostering greater competitiveness is to engage with the business community.

“This should be the Government’s top priority. Without that engagement Wales will remain at an economic disadvantage to the rest of the country.”

Kirsty Williams, Welsh Liberal Democrat spokesperson for Economy, said: “These figures highlight the Welsh Labour Government’s failure to attract the economic prosperity and activity felt across the rest of the UK to Wales. The Labour Government in Wales has year-on-year failed to draw upon the booming economy of the three other nations to mirror the benefits here.

“It is no wonder that Labour voters are turning away in their droves.”

Comment: Euro-handout is Wales' last chance

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