Politics

Dan Boucher: Welsh Labor had twenty-four years to change the economy – and it failed

Dr. Dan Boucher is a former Assembly and British Parliament candidate. He lives in Swansea with his family.

The British political party with the longest term in office in modern times is the Welsh Labor. Given that they ruled Wales before decentralization from May 1997, when the people of Wales vote on May 6th this year, we will be ruled by Labor in many key areas of our lives for twenty-four years! You have enjoyed an opportunity no other modern British party has had. How did you use it?

In November 1998, just months before the first general election, I participated in the publication of the seminal book The National Assembly Agenda by the Institute of Welsh Affairs in Cardiff. The chapter on economic development began: “Of all the measures by which the National Assembly will be judged, none will be as important as the challenge of increasing economic well-being. Much more concerted and dynamic action can bring about much Welsh standards ”.

In 2001 the Welsh Labor Government launched its first major economic development consultation, A Winning Wales, proposing a national strategy for economic development. Realizing that Welsh GDP per capita was only 80 percent of the UK average, they set a goal of closing the gap by 10 percent to 90 percent over the next decade. In meeting this challenge, it was very exciting to know that under Labor we qualified for a huge injection of EU regional aid (not an achievement in itself). There was a real expectation that this would transform the Welsh economy like that of the Republic of Ireland. We too would become a Celtic tiger!

For the next decade, Welsh Labor failed to fill the gap by one percent, much less by 10. Despite regional EU aid, Welsh GDP per capita fell even further to the low 1970s, which it has remained since then . In this context, Wales qualified for a second round of EU regional aid. Today we represent five percent of the UK’s population but generate only 3.4 percent of its wealth.

The last government to control economic development policies and oversee an increase in Welsh GDP per capita was the Conservative one between 1985 and 1990. Also, under their leadership between 1986 and 1996, Wales was one of the few places in Britain and indeed Europe to increase employment and productivity in manufacturing. In 1995, Wales manufacturing productivity rates were better than any other part of the UK, with the exception of the south-east of England, which was only slightly ahead.

These years also saw a “golden age” of foreign investment in Wales. In 1996-1997 the Welsh Development Agency (WDA) was credited with creating 18,000 new jobs, 15,000 through foreign investment. In contrast, the Welsh government was only able to create 2,738 jobs through foreign investment between 2019 and 2020.

At a lecture I helped organize in 2016, a former Director General for Economic Development at the Ministry of Foreign Affairs in Seoul expressed his shock at the low level of foreign investment between South Korea and Wales. In all of this, Labor’s decision to abolish the Welsh Development Agency and take over its role in the Welsh government has not helped us. Brian Morgan (one of the authors of the 1998 National Assembly Agenda) said “history will likely go down as the worst political decision made in Wales’ vivid memory”.

As economic development evolves, the most successful framework for this in Wales has been created by the UK Conservative government’s City Deal program, which resulted in the creation of the Cardiff Capital Region City Deal, the Swansea Bay City Deal, and North Wales Growth Deal Mid Wales Growth Deal. Under Welsh Labor, business rates in Wales are now the highest in Britain.

Welsh Labor took twenty-four years to transform the Welsh economy and it has failed. May 6, 2021 will be an important day in our history. We cannot afford what would happen for 30 years of uninterrupted Labor government. What makes this change particularly critical now is Brexit. After EU membership and massive EU regional aid have not been so transparent about how they will fare in a context where they are clearly deeply uncomfortable in a context they have passionately believed in , despite the fact that the people of Wales voted for Brexit by more than nine times the majority to found the Welsh Assembly.

We now urgently need a Welsh Conservative government in Cardiff Bay to work with the UK government to increase productivity and living standards and to make the most of the Brexit trade deals for all parts of the Welsh economy.

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