City regions game changer for Wales

Whilst it’s true that many new policy initiatives are often accompanied by great fanfare and acclaim, some bubble away quietly under the political surface and attract less attention than perhaps they deserve. One potentially game-changing new Welsh policy has been simmering away for some time and could lead to one of the most interesting and innovative changes in economic policy since the abolition of the WDA – the creation of city regions.

Dr Elizabeth Haywood recently produced a report for the Welsh Government which recommended two such city regions be established and developed around Cardiff and Swansea Bay.  The new approach recognises that to a large extent cities and their surrounding regions drive a significant portion of a nation’s economic growth. However, in Wales cities account for just 33 per cent of our national income, a figure significantly lower than other UK nations and regions.

Essentially the report and the wider policy is an acknowledgment that our weak economic performance in terms of productivity and output is in large part down to the fact that our major urban centres are not playing a big enough role in driving forward the growth, innovation and dynamism that a powerful economy needs.

My only concern is that whilst I agree with the overall diagnosis, we risk missing out on the benefits of the prescription if we limit the scope of this policy to the major centres of Cardiff and Swansea.  In rejecting a possible city region for north-east Wales the area risks missing out on the three core benefits of having a city region:

• Ability to create a larger labour market for the benefit of employers and business.
• Scope to develop a larger market for the goods and services our local economy provides.
• Potential for a greater exchange of knowledge ideas, research and innovation that can drive through the economic malaise we are in.

Of course, the blueprint of close collaborative partnership in north east Wales has already been established over many years.  Every key sector of our local economy, from aerospace to construction to car manufacturing has matured in recognition of the very porous border with England. Our local authorities understand the enormous advantages to be gained when transport, housing and infrastructure investment are joined up.

That is why our main airport hubs are Liverpool, Birmingham and Manchester, and our main arteries of economic activity are the A55, A483 and the M56. Many people from north east Wales work and trade in the north west of England.  It’s why the Federation of Small Business, the North Wales Economic Forum, the Creative Industries Panel and local authorities on both sides of the border all support the creation of a unique and dynamic cross border city region in north east Wales. Indeed, with the possibility that 5 per cent of the next round of EU Structural Funds will be top-sliced to encourage a pan-European City Regions approach, this agenda is even more important now than ever.

The concerns most often expressed in regard to cross border collaboration and city regions centre around the suggestion that such an approach would primarily benefit our English cousins through easier access to cheaper housing. In turn that could lead to a dilution and a weakening of our cultural identity.  However, I would say that economic stagnation is a far more corrosive threat to our language, our culture and our communities than the prospect of cross-border collaboration with our near neighbours. We cannot and should not shy away from the world. If we cannot hope to retain our identity when working in partnership with our closest relatives, how on earth can we hope to retain who we are when striving to work with different people around the globe?

City regions have the ability to reshape and transform our understanding of what devolution is about.  For me the creation of the Assembly in 1999 and its subsequent increase of powers in 2007 and 2011 were not an attempt to raise the drawbridge and develop weaker links with other nations of the UK. Rather it was an attempt in areas like north-east Wales, to enhance cooperation and collaboration in areas of mutual interest in order to make our economy more sustainable. The Chair of the City Regions report said in her introduction,

“There is a choice – each local authority, town or small city can shelter within its comfort zone and lag behind, or they can move ahead by sharing power and supporting each other to win economic projects rather than competing against one another and failing.”

I agree with these sentiments entirely. Business and commerce do not respect geographical boundaries and in the global world we live there is no room to withdraw and live in splendid isolation. That is why I am glad the Minister Edwina Hart has asked the Task and Finish Group to go back and re-examine the case for a city region or similar such model in north-east Wales.

Cross-border collaboration is a reality and we need to be bold, confident and secure in what we can gain as a city region. We have an opportunity to develop a bold and bright new future for north-east Wales and we must take it.