The Economy

The decade after devolution in Wales has been a turbulent ten years; with the most significant challenges to the local economy being largely beyond the control of the Welsh Assembly Government. Over the last few years the 'real' economy in the UK has been uneasily waiting for the inevitable hard hit that must follow the banking crisis and the new measures to reduce the UK's huge and unprecedented level of debt. Up till 2010 there had been a sense of, if not optimism, then at least hope that Wales's disproportionate share of public sector employment (over 40% of all jobs in North West Wales, Mid Wales and South West Wales) would afford some protection against the inevitable economic shrinkage linked to the widespread withdrawal of borrowing opportunities (on the part of both government and business). The Westminster Coalition, from the outset, has determinedly implemented austerity measures which start with reductions in public sector expenditure, a natural consequence of which will be job losses.

The industrial and physical infrastructure in Wales changed radically in the last two decades of the twentieth century. Undoubtedly, Wales would have been a poorer place without its new industries. However, after 10 years of the new Millennium, and as at 1980, Wales still falls behind other regions of the UK in terms of key indicators such as gross value added(GVA) per capita, average earnings, and activity rates. For example, the latest estimate of GVA per capita in Wales was just 74% of the UK average, while average earnings lag the UK average by around 10%. The changes of the last decade have done little to close the prosperity gap with our regional partners. Moreover, there remain disparities within Wales. On the one hand there is the comparatively prosperous South East centred on Cardiff and Newport. On the other is the doubtful accolade conferred on the industrial South Wales valleys, West Wales and North West Wales, who entered the new Millennium with EU Objective 1 status, and now qualify for Convergence funding, making them comparable with the poorest regions of the European Union.