Brian Morgan calls for a realistic assessment of the Welsh economy:
Benchmarking the economic performance of the Welsh economy and the related question of the level of prosperity in Wales is very important. As a famous American coach once said ‘If winning isn’t important, why do we bother to keep score?’ Benchmarking, or keeping score, is a way of determining how well our economy is performing compared with other similar countries. It sets our measures of performance in a broader context. It gives us an idea of what is “best practice” and what economic targets we should be aiming at.
Statements like “ the Welsh economy has expanded by x per cent” only give an absolute measure of performance, whereas what we need is a relative measure alongside our main competitors. If our competitors are expanding by 2x per cent (i.e. double the Welsh rate) then the Welsh economy is clearly not performing well enough. It is no good saying that the Welsh rugby team scored 25 points, but omitting to say that England scored 50 points!
However, the key point is that to develop meaningful and realistic measures we have to compare ourselves with similar (i.e. comparable) countries and regions – we have to compare like with like. In the UK context that could mean excluding regions like the South East of England and similar high rolling regions from the comparator group. But if we do this and benchmark ourselves only against the other poorer regions of the UK and Europe then the Welsh economy still compares unfavourably over the past twelve years – because we have simply been slipping down every league table in terms of prosperity.
Even more worrying, if, in line with the First Minister’s comments, an adjustment is made with regions such as the North East and South West for factors such as the cost-of-living and quality life, the Welsh economy continues to perform relatively poorly.
It’s interesting that the First Minister is willing to benchmark the Welsh economy over time. For example, Rhodri Morgan states “Wales was 50 per cent better off than ten years ago”. But what does that statement actually mean? How is it being measured? Presumably it can only be measured by using the regional GVA figures that the First Minister is criticising! But, however prosperity is measured, if the West Midlands are 100 per cent better off than ten years ago, would we happy with Welsh performance?
No! It is simply not good enough to say that GVA comparisons are a meaningless exercise – simply because they paint a picture that we would rather not see. Discussing these issues with another professor in UWIC he pointed that there has been considerable work undertaken on things like Social Welfare Functions to model some of the concepts that Rhodri Morgan wants included….”but I’m pretty sure they also show Wales in a poor light. Perhaps if you have a safe job and live in a cottage on the Gower you are “happier” than better paid, similar people living in Basingstoke – but try arguing that with the population of Ammanford just 10 miles north!
