Averaging the averages

Tweet The idea of ‘city regions’ as some sort of solution to Wales' economic woes has taken far too strong a hold amongst the political classes.  It’s not often that I hear doubts being expressed, so this article on the Bevan Foundation blog earlier this week was more than a little welcome.  Not least, it’s a counterpoint to the interview with the chair of the Cardiff City Region a few days ago, in which he said that Cardiff is the “priority for driving Wales forward”.

It’s hard for those of us who are sceptical about the city region concept, and the emphasis being placed on it, to argue the case without sounding like we’re opposed to economic success in Cardiff.  I’m certainly not opposed to that, but I do want to see economic success in the north, and down here in the west as well.  The question is how we achieve that without competing and arguing with each other.

I’ve never been convinced by the argument that creating wealth in one place means that it somehow ‘trickles down’ to other places; if that were true, we wouldn’t have seen such a huge concentration of wealth and income in one small corner of the UK.  It often seems that policy in Wales is trying to ape that of the UK as a whole, and merely exchanges the south east of Wales for the south east of England.

But I’ve also wondered whether it’s not at least in part a result of politicians failing to understand that increasing the average income per head in a country is not the same as increasing the income of the average person.  Maths is not often their strongest point.

I have no doubt that increased economic success in Cardiff could lead to an increase in average GDP per head when looking at the figures for Wales as a whole.  But the point is that it could all too easily do that without there being any change at all in the average GDP per head outside Cardiff.  Improving things for a few only looks like an improvement for the many when people fall back on the use of unqualified averages.

Yet it is often those overall averages – or rather the misuse of them – which fuels much of what passes for debate about economic ‘success’.  Just think of the headlines comparing Welsh averages with English averages, with no serious consideration of whether the comparison is a valid one.  And I fear that may be part of what is driving Welsh Government policy – a need to be seen to be improving the figure for average GDP per head, without worrying too much about how that is achieved or what it means for all the people of Wales. 

It’s the wrong starting point – and people who start out in the wrong place rarely end up in the right one.