Friday, 6 April 2018

Sharing the eggs between the baskets

Last week, the leader of Cardiff Council told us that the City of Cardiff is ‘Wales's best economic asset’.  As is ever the case, such terms need more precise definition before being accepted uncritically, but in the sense that Cardiff and the area around it is the wealthiest part of Wales and contributes most to GVA, then I agree with the statement.  That isn’t the same as agreeing with the conclusion, however, which seems to be that Cardiff should therefore receive a disproportionate share of future investment to make it even more successful and wealthy.  There are two main reasons for rejecting that conclusion.
The first is that it ignores, or overlooks, the question of how that situation has come about in the first place.  There is nothing inherently special about Cardiff which means that it has become wealthy while the rest of Wales has not (in the same way as there is nothing inherent in being Welsh which dooms us to being one of the poorest parts of the UK).  One of the reasons for Cardiff’s greater success has precisely been that it has already received a disproportionate share of past investment.  Imagine for a moment replacing Cardiff with London, and saying ‘As the result of previous wealth concentration, London is the UK’s best economic asset, therefore future investment should be concentrated there’.  As a statement of current UK government policy, it looks pretty accurate, but most of us in Wales would reject that as a basis for determining future investment strategy.  Why would we want to simply replicate that in Wales?
The second is that, ultimately, such an approach amounts to seeing the future economic growth of Wales in ‘average’ terms.  That is to say that Wales, as a whole, looks better off if the average GVA per head increases, and the easiest way of achieving that might well be to put the investment into those areas where GVA growth is potentially the fastest.  But improving the ‘average’ GVA per head isn’t the same as making everyone in Wales better off.  Indeed, it is perfectly possible in mathematical terms to increase the average whilst decreasing the actuals across most of the country.  And sometimes it even looks as though government policy is to attempt to prove that mathematical theorem in practice.
That isn’t to say that Cardiff shouldn’t receive a ‘fair’ proportion of future investment (although defining ‘fair’ is a major topic in itself, far more complex than mere headcounts).  But any Welsh government which was serious about sharing prosperity would be looking to a strategy which improves life for all the people in Wales.  And that can’t be measured simply in averages.

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