Thursday, 16 September 2010

Mixed Messages?

Last week, Dylan Jones Evans posted on an internal WAG document which seemed to be indicating that grants would, after all, still be available for inward investment projects, which is not quite entirely in accord with the impression given when the ERP was launched. Having seen the document to which he was referring (thanks to Dylan for sharing that), it seems to me that it backs up the interpretation which he placed upon it. That interpretation is given further credence by the article by David Rosser in yesterday’s Western Mail.

Leaving aside the issues of politics, spin, and mixed messages (which are unfortunate to say the least), the real question surely has to be whether what is proposed is right or not. When I gave a broad welcome to the ERP, I made the point that, whilst in principle the withdrawal of grants for businesses seemed to be the right thing, we do need to be careful about whether Wales will lose its edge as a result, particularly in the case of those businesses which have a choice of location. That’s exactly the point which the CBI make, of course.

It’s an issue on which I’m something of an agnostic. On the one hand, using grants to attract jobs carries the danger of different parts of the UK (and the wider world) getting into a bidding war to see who can give most public money to a private business. On the other, we want the jobs, and not being prepared to engage in the realities of the market place might be short-sighted.

And it still leaves the question of whether inward investment will therefore get a better deal than indigenous investment. Or even worse, whether local companies will threaten to locate any expansion plans elsewhere so that they too can be treated as ‘mobile’.

The basic principles underlying the ERP still seem sound to me, but ultimately it will be judged by results.

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