We need a £15bn 'Green New Deal' in Wales to rebalance the economy away from London
5 min read
Plaid Cymru MP Jonathan Edwards writes ahead of today's Spring Statement outlining his party's key demands to rebalance the Welsh economy, build real infrastructure and boost skills.
£15bn invested in Wales over the next decade to build the real infrastructure and skills training needed to meaningfully rebalance the economy away from London.
It is difficult to spot a silver lining in Brexit’s grim, grey cloud of constitutional self-harm. Plaid Cymru – The Party of Wales, though, are making the case that this low-point ought to mark the beginning of the end for ‘managed decline’ – which has been British Government since the deliberate de-industrialisation policies of the 1980s - in the majority of the UK’s nations and regions.
In today’s Spring Statement, the Chancellor must recognise and remedy the erosion of ties between the rural and the urban; the low-paid and the high-paid; the precarious and the comfortable. It is precisely this decoupling which created the conditions for Brexit in 2016 and it is this decoupling which will usher in the next crisis if left to fester untreated.
Plaid Cymru are today calling upon Chancellor Phillip Hammond to announce a Rebalancing Green New Deal in his Spring Statement.
We are campaigning for a serious programme of sustainable economic investment to ’kick-start’ economies outside the so-called Home Counties of England - with a specific focus on creating sustainable jobs and infrastructure.
For decades, British Governments – red and blue alike - have tinkered around the edges of our broken economic system without challenging its structural flaws. Indeed, British Governments have been too timid to challenge the economic status quo which prizes debt addiction and the financialisation of the City above the production side of the economy.
The major problem with the British State’s broken economic model is chronic low productivity. This is especially acute in parts of the British State which are underperforming. The easiest and most effective way to boost the economic performance of the British State is to tackle latent productivity in these nations and regions, as opposed to throwing all investment at high performing areas. People in Wales want more than the mere redistribution of cash, we want a real redistribution of power.
London acts as a black hole sucking in talent and investment from the rest of the UK and beyond. Perversely, this inequality further incentivises investment in London from the public and private sectors alike – and so the cycle continues unabated.
Critically for Wales, and especially the communities I represent in the west of my country, it leads to the infamous brain drain, where our brightest and young are lost with tragic economic, social and cultural implications.
A Rebalancing Green New Deal would create jobs in clean energy, technology and new industries by building up physical as well as human capital – constructing railway lines and energy plants while training a new generation of high-skilled experts to run them. Critically it would help address the biggest global challenge of our time – climate change – and create an economy fit for the future.
As countries like Germany have built geographically-balanced economies with healthy mixes of infrastructure and manufacturing in every nook and cranny, the British State has shrugged its shoulders.
Wales along with our friends and allies in Scotland, Northern Ireland and the regions of England outside the Home Counties have come to share a common experience. One of decades-long economic malaise; being left to get on with creaking infrastructure and skills shortages; and watching our young people have to leave to find work.
Under Plaid Cymru plans, the British Government would commit to ring-fencing an additional 1% of annual GDP (approximately £20bn) for infrastructure, R&D and skills investment in places which are in deficit. If implemented, our proposals would see Wales receive a share of Rebalancing Green New Deal investment worth £1.5bn per year on a population basis.
Of the 12 NUTS1 nations and regions of the British State, only 3 (London, south east England and east England) are not in deficit today. At the same time the British Chancellor tells us how we’ve never had it so good. The Party of Wales believes that the majority of UK nations and regions – Wales included - are performing significantly below our true economic potential.
This economic underperformance is more than a line on a graph or figures on a spreadsheet. Without the serious efforts of a Rebalancing Green New Deal, the nations and regions outside of London and the south-east are condemned to lower household incomes, dilapidating high streets, lower life expectancy and declining living standards.
A Rebalancing Green New Deal will create high-paying, high-skilled jobs in our communities. It will open up apprenticeship training and study opportunities to everyone in Wales. It will stymie the outgoing tide of our talented young people breaking ties with their families, friends and communities to seek out opportunities elsewhere.
Our Rebalancing Green New Deal proposal would see £15bn invested in Wales over the next decade to build the real infrastructure and skills training needed to meaningfully rebalance the economy away from London.
In the case of Wales this should be coupled with real fiscal firepower to empower our national government with the necessary job creation leavers. If the British State does end up leaving the Single Market and the Customs Union, we will need to look way beyond the more favourable settlements of Scotland and Northern Ireland to include full corporation tax powers and sales tax.
Westminster trickle-down economics has failed and failed miserably. The time has come for a change of direction.
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