Saturday, 15 September 2012

Wales : An Economic Profile VI - Strengths & Weaknesses



"Secure" resources

Industry requires copious amounts of both energy and water. Wales will have both long into the future - as long as the existing resou
rces are not squandered or poorly managed.

I've put "secure" in quotation marks, because fuels like gas (Part I) will need to be supplanted at some point. To paraphrase what MH has said recently on the subject, we need to "use gas more cleverly".

"Secure" also means "safe". Wales is unlikely (but not completely so) to be a target for an act of terrorism, has relatively low crime rates and is in one of the strategically safest places in Europe - if not globally. That could attract some contentious employment – defence research for example, or yes, even nuclear weapons.

An office-based business can base itself anywhere, but this is one of the few trump cards Wales holds over London & SE England. For product development and manufacturing, Wales should be towards the top of many lists, seeing as we have the fundamentals in place. The question now is, what are the other reasons for us not being so?

Relatively high levels of graduates

As I pointed out in Part IV, Wales has a high (by EU standards) percentage of the working age population who have higher education qualifications (though this is still behind the UK average). It's quite likely that many of these are going to be public sector workers, in particular those working in health service professions that require degree-level qualifications (nurses, physiotherapists, radiologists etc.).

Numbers of graduates are likely to have been boosted by
healthcare professions like nursing becoming degree-level jobs.
How can we turn more graduates towards business?
(Pic : BBC Wales)

What this suggests, is that a chunk of Welsh population have a love of learning. What the Welsh Government need to do, is ensure that people are encouraged to aim higher academically for our future economy.

That doesn't mean pushing everybody into the sciences. It also means : better qualified lawyers to scrutinise devolved legislation, better business managers, professionalising the "third sector" (Masters of Social Business Administration), qualified coaches for sport, teachers with higher-level qualifications (Welsh Labour wanted to make teaching a "Master's Level" profession in their 2011 manifesto) and improving skills in the civil service.

I believe that people should learn for its own sake. Although some courses might be "questionable", and going to university shouldn't be seen as a "must", we need to see graduates as a resource. They need to be used effectively in the private sector and not expect the vast bulk of them to go into the public sector.

Cardiff & Deeside

In Cardiff and Deeside, Wales has two significant urban areas which continue to attract significant investment, perhaps for differing reasons. That's not a suggestion that we "put all our eggs in two baskets". We shouldn't ignore the fact that amongst all the doom and gloom, Wales has two well-performing areas economically, even compared to the rest of the UK.

Swansea could easily catch up with the right investment in its city centre, in addition to the university development mentioned in Part IV. There's a strong hub of IT-related companies developing in the Newport/Cwmbran area while Bridgend & Neath Port Talbot have always been major manufacturing centres. Providing better links between the likes of Aberystwyth and Bangor universities and their environs will no doubt boost economies too. There's hope yet.

Good business survival rates

One of the big myths I hoped to bust with this series is the belief that the Welsh are "not entrepreneurial" or "not business-minded". I think we are in a "be your own boss" sense, but Wales doesn't have a big money, individualist, "corporate culture". That can be a good thing, or a bad thing.

Business survival rates might reflect lack of competition
due to fewer enterprises overall, but Welsh survival rates are competitive
at a UK level, and Welsh youngsters are increasingly entrepreneurial.
(Pic : The Guardian)

Although enterprise birth rates in Wales were amongst the lowest in the UK in 2010, enterprise deaths, five-year survival rates and one-year survival rates were either at the UK average or exceeded it. Recently, it's been revealed that young Welsh adults were the most entrepreneurial in the UK.

Maybe this is just because of the plethora of grant and business support schemes offered by the Welsh Government. However, if you start a business in Wales, compared to the vast bulk of the UK, you're more likely to see it last longer and more likely to have your peers starting them too. Add this to the successes in university spin outs (Part IV) and it's safe to say that "failed in Wales" no longer applies.

Strong export record (in goods)

I hate treading old ground, but as I said in Part V if this is a strength of the Welsh economy, then we grasp every opportunity to guide and shape it with both hands.

The only downsides are that many up-and-coming Welsh SME's seem reluctant to look for opportunities beyond the UK, while goods exports are conglomerating in larger groups, becoming less diverse (a point raised in Offa's Gap). These are serious problems that needs addressing, but it's still overall good news.

It's important to note that this is in goods only – physical "things", not services. Wales will need to develop more balance between goods and services if the economy, as a whole, is to function better.


Financial services "blind spot"

Bankers aren't the flavour of the month, but high-end financial services do provide high levels of GVA growth and, more crucially in the independence debate, high levels of tax income (when they pay them). First things first, I'm not advocating a "Welsh RBS". But is it so ridiculous a suggestion to have Welsh banks – based in Wales, investing both here (perhaps in energy projects) and around the world and providing highly paid jobs in Wales?

Wales does have a big success story in Admiral Group, but was it a fluke? Wales needs five or six "Admirals" to close the gap with the rest of the UK. The easy option would be to "bribe" one of the London companies to move to Cardiff. That would be a stop gap. Wales has to play the game (developing new financial service companies) instead of carrying the refreshments (branch functions).

I think insurance is one area Wales could look to build a critical mass in. It's less controversial than banking, we have success stories already, there's guaranteed markets (car insurance is compulsory) and in some cases it's fairly lucrative. Recruitment and training services, as well as niche consumer services like price-comparison websites, are other areas of potential.

Poor infrastructure, poor priorities

This has been done to death, but it needs attention drawing to it again. Wales is probably 20 years away from losing our only major airport if passenger figures continue to slide the way they are. We only have around 75 miles of motorway (though much more is "motorway standard"). We've had to wait God knows how long to have rail electrification put on the agenda. If you can't get goods, people and ideas to major markets quickly and efficiently, you end up being neither heard nor seen. That can even happen within the UK market itself.

The Welsh Government do invest in things like roads
and railways, but are they prioritising things correctly?
(Pic : Abayoflife)

I'm not convinced the UK or Welsh Governments take Welsh infrastructure anywhere near as seriously as they have to. I'm not restricting that to the "obvious things" like roads and railways. It includes all the hidden stuff, like a north-south inter-connector for electricity, 3G/4G coverage (now being addressed by the Welsh Government and the private sector - thumbs up) and even things like the structure and functioning of the civil service.

The Welsh Government's Infrastructure Investment Plan was a damp squib that prioritised waste management ahead of new transport links and energy. Using borrowing powers to fill pot holes/cover revenue spending is also rather silly. Their task in the face of swingeing capital spending cuts isn't easy, I'll acknowledge that, but there's no need to make things worse through their own lack of ideas.

Demographic shift to the economically inactive

This isn't just a case of pensionable-age "incomers" moving to rural Wales. It's also a case of younger people moving out of Wales because that's the only way to provide financial security for themselves. Lose the young, keep the old and immobile, top them up with migrant retirees. Pensioners, "good-lifers" etc. might well bring their savings with them - and they should have the right to move anywhere they choose - but they also have an ongoing cost that wouldn't be there otherwise. Wales can't afford to become a care home colony.

I'm willing to bet, per person in employment, productivity in Wales will be near enough the same as most parts of the UK (outside London and SE England).

If the Welsh Government really wants to improve Welsh economic output, they're going to have to come up with ways to retain talented people under 30 to balance things out a little – especially in rural areas. More people producing, production figures improve – simple.

Wales needs to become "noisier", and subtly discourage people from moving to Wales to seek a "quiet life." One way to do that is ensure there are enough well-paid jobs , social opportunities and affordable housing. And yes, we also have to target the levels of chronic long-term limiting illnesses in some Welsh local authorities – but that's more a health and social justice matter.

Over-reliance on "big branch employers" & lack of innovation

Business demographics statistics (2011), show that while 98% of all enterprises in Wales were in the micro and small band (employ under 50 people), 72% of national business turnover (£68.04billion) came from medium and large companies, with £56.1billion of that coming from just 1,580 large (250+ employees) businesses.

I'm guessing that many of those will be a remnant of the WDA glory days. Well, they're not going to be here forever. With every closure of a big grey box on a valleys industrial estate, a large chunk of GVA and national turnover is going to go with it.

Are these jobs worth it? We don't do very much research and development here. We don't do enough to protect and patent innovations here. I think politicians concentrate on reducing unemployment figures, see someone promising to bring 1,000 jobs - while not considering what those jobs entail or what they are paid – and roll out the carpet. Then they leave a few years later for the next sucker economic region whose production costs can increase the margins for HQ .

Wales needs to come up with the products, patent them/licence them, manufacture them and do all the marketing and back-office/HQ functions. That's the recipe for good GVA growth. In terms of independence, it means loyal Welsh "brands" paying healthy amounts of business and corporation taxes into the national coffers. Saying this is easy, doing it is much harder.

Skills shortages

It's another "old chestnut""Employees lacking the prerequisite skills necessary for the modern workplace blah blah blah." I don't think the situation is as bad as it has been – the numbers of school leavers leaving with no qualifications are falling, the numbers of apprenticeships are rising and as mentioned above Wales has a relatively high proportion of people with advanced qualifications. The issue, is whether all these bits of paper are actually worth anything.

It applies just as much to employers. How many Welsh business people have the requisite skills to expand their companies? Do they have the ambition to do so? How many Welsh business people speak a foreign language? Do they have good management skills?

If the business community are stuck thinking in a dull, "numbers on the balance sheet", conservative way, then the whole of the Welsh economy lacks "spark". I think this can improve - and the Welsh Government are taking steps towards that - but it might be too little, too late. It should've been done in the 1980s and 1990s - the moment Conservative and Labour UK Governments decided heavy industries (coal, then steel) had no future. That's the lasting legacy Maggie, John and Tony left us. Gordon left us the bill and Dave moves everything back to square one, ready to repeat itself.


Universities playing a greater economic role

Universities shouldn't become castles for academia in small towns, they should play an active role in developing the economy of those places in more ways than bringing in student money. The Republic of Ireland managed to build its economy based off a steady stream of graduates coming out of a large number of higher education institutions with technical qualifications.

Does Wales need to bring back the polytechnics? Do we need a "Welsh MIT"? Could industrial estates in university towns be used as enterprise zones for spin-outs?

That leads me nicely into....

Harnessing and developing niche specialisms

The Welsh Government, universities and the Welsh business community need to try and identify areas where Wales can develop a European, or world-leading, specialism based on what we have currently. I don't think this is about backing certain businesses or certain sectors. As highlighted on many occasions, successful individual companies can come from anywhere.

What technologies and innovations will
Wales be helping to develop in the future?
(Pic :

I think this is about taking a long-term view about what products Wales can develop over the next thirty years, and whether we can get there before other parts of the world do, or try to stake a claim with other nations – for example pan-EU initiatives.

What could those specialisms be? Wales already plays a leading role in aerospace and automotives that could be expanded (and enhanced at the likes of the new Swansea University campus). There's materials sciences – looking for environmentally friendly building materials and "smart materials". Energy research is another obvious one. Whoever finds a way to store and produce hydrogen safely as a fuel, without as much energy intensity, is going to become very rich too, I'd imagine.

There are still plenty of options on the table

There are plenty of things the Welsh Government could do, within months even, and without requiring the devolution of further powers.

They could turn Finance Wales into an investment bank or a sovereign wealth fund (though they wouldn't be able to regulate it). They could create a regional exchange to help pump capital into SMEs as a stepping stone to the FTSE.
They could turn Communities First clusters into social enterprises, while professionalising them and (hopefully) reducing corruption due to increased financial scrutiny as a result. There are other things mentioned further down.

Admittedly, none of that would provide a solution by itself. It's still going to have to come down to ambition within the private sector and classic entrepreneurship. But, as we all know, the Welsh Government and civil service like to do things a "certain way".

The co-operative sector providing public services

How do you provide key public services - in particular things like health and social care - in sparsely populated areas with dwindling public funds? One solution might be to enact some of the recommendations in The Collective Entrepreneur report and have some services ran by co-operatives and not-for-profits.

I mentioned above that Communities First projects could become community social enterprises. It's a mooted model for the Welsh railways. You could even go as far as spin the NHS out on the Glas Cymru model.

There have been calls for a "not for profit" company to
run Welsh railways, but does this Glas Cymru model
need to stop at transport and utilities?
(Pic : BBC Wales)

There would be clear advantages and disadvantages. It might bring a business-minded approach to providing services (in terms of competition and waste), with those services remaining free/subsidised at the point of access – but it would still be a privatisation. It could lead to smaller hospitals and care homes being being kept open – but there's always the risk that they could close if they don't cover their costs. It would almost certainly lead to the creation of large companies that can compete on a European level to provide services, but is that what you want public services companies to do?

This would probably be too controversial to consider in the short term. However, if public spending is going to be squeezed, maybe it should be kept on the back burner until more detailed studies are carried out.

Fiscal sovereignty

You'd expect me to list this, wouldn't you? Can you can improve the economy within the current arrangements? The evidence over the last twenty years suggests this is going to be an uphill struggle, and Wales is going to need a significant change of tact. Or, do you need all the tools to create the conditions necessary to improve the economy? There's no guarantee that would work, but at least you'll be able to work to strengths and react quicker to shocks.

These two pieces by Russell Lawson over at the Walesbusiness blog (Wales' way out of the economic mire & Small is beautiful), list : accommodative monetary policy, fiscal policy focused on medium-term consolidation, tight grip on public debt, capital buffers, prudential bank lending policies, regulatory quality, enhanced liquidity in Europe and easing personal debt.

Hardly any of which Wales would be able to do without fiscal sovereignty or Independence – perhaps a separate currency too.


A continuing spiral of peripheral neglect

It's too risky for the UK Government to spend public money when there are no guaranteed of "returns". So instead of investing to provide jobs in Wales, they provide job replacements in the form of JSA and incapacity benefit – then some have the cheek to remind us that we're not pulling our weight.

The Welsh Government in turn acts like a palliative care nurse – focusing on quality of life – accepting that things are never going to improve dramatically economy wise.

Wales needs it, London gets it. It's a familiar story, but
you can't blame the UK Government for wanting returns on
big investments.
(Pic : The Guardian)

Preventing Wales falling into destitution is seen as "better for us" than having a fully functioning economy that can stand on its own legs - even within the UK. It's about stopping things from becoming worse, rather than taking risks (or responsibility) needed to create something better

Despite spending more per head on economic development than other parts of the UK, Wales shows no sign of rising off the bottom of varying "league tables". The likelihood is that it's being spent badly, on the wrong things, for the wrong reasons. I'm no longer convinced it's a money issue anymore, but down to a case of poor economic policy - and that goes for all parties, not just Welsh Labour.

It's always "someone else's problem", and we don't want to take the harder path because we don't know if it'll work or not. That's toxic.

Inward investment drying up

In 2011-12, only 23 inward investment projects, out of 1,406 in the UK, took place in Wales – just over 1.6%. Although these projects seem to be pretty big, protecting/creating some 2,800 jobs (remember what I just said about big employers).

We need a desperate change of tact here. We're so used to "someone else doing it", that we've become timid about going out to other markets, or obsessed with the internal market within the UK. Welsh businesses are probably going to have to do more outward investment, or target new export markets, than expect inward investment to travel very far down the M4 from Heathrow.

Our competitor isn't England, but all those small nations who can take extra steps to attract investment. In the future, we'll need to measure success by looking to Welsh companies taking over English/wherever companies - not the other way round. The question is, are Welsh businesses up to the scale of that challenge? I don't know.

"Mad" economic policy

Economic policy in Wales can be boiled down to a few simple tenets:
  • More jobs, regardless of how well they are paid, highly-skilled or what the job entails, is better than no jobs.
  • It's better to play a bit-part (making components) instead of coming up with new products and IP-protecting them.
  • Everything has to be led by the government because the private sector is too small/can't be trusted.
  • See what England is doing. Ignore what the rest of Europe or the world is doing. Try to copy what England is doing because you have no ideas of your own/it's obviously the "right way". Hilarity ensues.
  • Come up with fantastic new strategies and plans, then when they don't work, rearrange the words slightly.
  • "Insert sector of the economy here" is the future! Then don't look at qualifications, case studies, necessary infrastructure, long-term projections, competition at home and abroad, fast growth businesses within Wales in the sector, constitutional powers, fiscal'll "just happen"! (Yes, I've probably just done that too.)
  • Trying the same thing over and over again and expecting a different result.

Desperation, short-termism and pessimism

Let's say you were the CEO of a foreign business looking to invest in two areas.
The first has good international links, a fairly decent ratio of public spending to GVA and a reasonable level of public sector workers. They have major centres of renown and an ambitious government that presents themselves with confidence. They assure you that you can find everything you need (if you want it). They have established companies is high-value added sectors and have a good track record in economic theory and promoting themselves abroad.
Scotland has managed to become successful within the UK,
and not entirely down to oil. Perhaps we should be asking
questions as to why Wales hasn't?

The other has no solid international links, has as much spent on it by the government as it produces each year and has low numbers of jobs created overall. They have a government either practically begging you to set up there - almost suffocating you with the amount of support or grants – or they hardly make any effort. You're not entirely convinced the government are serious, as they seem just as keen to promote links with other places, than concentrate on their own unique selling points.

One looks like an up and coming, business-friendly destination. The other looks as it it doesn't have any economic mojo at all. Now call them "Scotland" and "Wales".

I'm going to contradict myself, but equally damaging is the belief that we can't do anything right, and that there's something inherently wrong about the Welsh. Anecdotally, that's an incredibly depressing and commonly held belief within Wales – even if the evidence says differently. Talk about a colonial mindset.

Fiscal sovereignty

Having full economic powers is a double-edged sword. I mentioned earlier there would be opportunities, there would also be significant, potentially disastrous, risks too.

Fiscal sovereignty doesn't mean independence. But, with public spending as such cripplingly high levels, any measures that could see a reduction in the amount of pork heading our way would be opposed (see Mike Hedges recent comments on tax devolution). Quality of life could well sharply fall (i.e. harsh reductions in public spending). Though we wouldn't fall into the abyss - as the economy as a whole would likely remain exactly where it is. Public spending isn't the same thing as production.

The risk is this. Wales will have all these wonderful new powers, but then wouldn't use them "correctly". We might create more barriers to business, increase the amount of red tape, screw up business rates reforms or general business taxes (or even shy away from using them) and carries on micromanaging little schemes that they can't bear to put down because they don't want to be seen to be "wrong".

The gap between east and west Wales doesn't narrow, businesses lose confidence in economic prospects as well as the Welsh government, Welsh public policy and our civil service remain stuck in a nepotistic and innovation less-time warp and our economic figures fall through the floor.

It might even go the opposite way and become embroiled in a neo-liberal race to the bottom. It's not too ridiculous a suggestion - considering some of the things that go on here already - that we could end up with a Welsh Charles Haughey or Bertie Ahern.

Theoretically speaking, if that happened post-independence, people like me swing from lampposts or get put up against walls and shot.
Now read that dystopian economic commentary again.

If we wouldn't tolerate it post-independence or under devo-max, why have we tolerated it for the last thirty years?

I hope you've enjoyed this series of blogs. What I wanted to show was that the Welsh economy certainly has weaknesses, but they are not all attributable to the Welsh as a people. We also have many success stories, but we really need to get a grip on these wider issues if Wales is to succeed economically.

That might mean taking more fiscal responsibility for ourselves, it might come down to one person having a brilliant business idea and having the assistance to take it forward.

At some point early in 2013, I'll look at local government and independence, which I was originally going to do so this time around.


  1. An excellent series of posts - you are starting to challenge Syniadau as one of the best Welsh blogs.

    The simple fact is that in order for Wales (whether indpendent or not) to be successful then we have to grow the economy and cut social security costs.

    Keep up the good work.


  2. Penddu - goog points, but we can't make those decisions (cut social security) without independence.

    In fact the Welsh Government has less economic leavers than Powys County Council. It's a lie to say Plaid could change and grow the Welsh economy with the current settlement. It can't. We need independence now to re-address the imbalance in our economy and counter-weigh the London obsession the UK and current Labour Govt in Cardiff.

    Independence is the vehicle for economic change, not an add on. Only independence will create such a jolt to complacent conservative (that the Labour establishment in Wales) that we can get to the roots of our problems and solve them on our terms.


  3. Thanks for the comments.

    I lean towards the argument that Wales needs every option to improve the economy, but it's more logical/rational that the economy (and education system) need to improve before that. It's a frustrating place to be, and I fear that both directions might lead Wales down a blind alley. So we'll end up with another "arf n' arf" fudge that strangles the country's ability to function.

    People would be right to question the Welsh Government's ability to handle more economic levers considering their track record so far. But if they are expecting Westminster to ride to the rescue instead then they can forget it. It's London or bust because that's where the big money makers are. Like I've said, you can't really blame them. I just don't want to see Wales cast off so we can be kept in pocket money in perpetuity until we all age off and die.

    I've been impressed with what Plaid have come up with this weekend. They are starting to come up with credible economic proposals at long last (Energy & rail Glas Cymrus, pension funds investing in Wales, alternatives to oil).

    But my one criticism would be that they placed too much emphasis on small community schemes that are great at giving people their sense of pride back (which is priceless), but are unlikely to create much in the way of employment or growth. These could be scaled up and could be incredibly lucrative.

    Penddu - When I started this blog, I set Syniadau as the benchmark I wanted to aim for in terms of depth and quality. If I'm being mentioned in the same vein, then I know I'm heading in the right direction.

  4. I really enjoyed this series please keep it up .Im indifferent on the question of independence I just want to see Wales lifted from its current state of decline.I dont mind Britain I passionately supported Great Britain at the olympics just as much as Wales in football or rugby but if Wales is to be independent in a few decades then so be it im not scared .But the debate in Welsh politics at the moment isn't and shouldn't be about unionists against nationalists nobody seems interested in independence if you look at the polls we need to evolve our national politics away from westminster we need them to focus and get angry and get people in Wales to cop on to the fact that many of the decisions affecting their lives are now made in Wales by Welsh politicians we have to get rid of this malaise and decline in our economy im so frustrated as a young Welsh person it doesn't need to be this way!

  5. Thanks for the comment, Llantrisant.

    Believe it or not, I used to be indifferent to independence, and even more so towards nationalism in general. If the Blair government wasn't so bad in its second half, and if they had treated the Assembly with a bit more respect from the start, I'd probably be a Labour voter/supporter.

    I still think that a "Better Union" can be forged, but sadly, there doesn't seem to be any will towards creating one, therefore we're going to have to do things ourselves. That doesn't mean independence, it could mean further devolution to a point where we can say "stop, that's fine".

    I think the issues you raise depend on the way the Assembly is presented by the media. Even the BBC can't seem to tell if one thing is devolved or not judging their recent stories on education. The debates are sometimes, to be frank, a bit of a joke and the quality of some of our AM's, especially backbenchers in safe seats, is very poor indeed. I think it'll improve in time as more talent comes through, but I'm not sure we can wait.

  6. The debates are otrocious I watched a bit of FMQ's recently where rail electrification was brought up as a topic, Nick Ramsay made the point that no rail electrification took place under 13 years of Labour then Carwyn replied that 18 years previous to that governemnt the Tories didn't electrify now I would lean more Tory on that issue as during some of the early Blair years I think Welsh Labour were sending something like 30 odd MP's to London and somehow they couldn't lobby for that upgrade? But hang on guys your in the Welsh Assembly representing Welsh constituencies and are supposed to fight for the interests of Wales not trade spin talking points for the benefit of your party at the Westminster level what about fighting for Wales?
    I agree about the BBC whats going on across the border that doesn't affect Wales is often debated on the phone in show on Radio Wales even though it doesn't affect us like when the thing about bringing back O-Levels came up.
    In my ideal Wales we would break Lib Dems,Tory and Labour off from the UK party and change their names that would make get rid of the tribal Labour voting despite their record, ideally then like you mentioned in a previous blog you could have a soft right Welsh nationalist party very pro more powers for Wales but not obsessed by independece like the ones in Catalonia and the Basque country we can all dream?

  7. Well done Owen, an impressive amount of work has gone into this. These are the sort of features that our national media should be running!

    " could have a soft right Welsh nationalist party very pro more powers for Wales but not obsessed by independece like the ones in Catalonia and the Basque country we can all dream?"

    Sounds like David Melding's idea to rebrand the Welsh Tories as a pro-federalist party complete with a new name. Pity it didn't come to fruition.

  8. This is a wonderful series of articles by a hétérodoxe ecomnomist that I haven't managed to work all my way through yet. But will do. I'm sure this work will be brought to the attention of the political parties especially Plaid who as you rightly point out have comme up with some interesting and useful proposals at the conference this weekend. You'ld all be interested to read an article on the regions of England in The Economist this week. This shows that inter alia all the English regions are suffering for the benefit of London and the South East.
    At least in Wales (and in Scotland) we have the possibility of a greater range of devolved powers in the short term and independence within a Europe of regions in the Long term.

    One criticsm of principle, your policy prescriptions / ideas are growth based, that is an old and un sustainable paradigm . This means that the "jolt" that Wales needs will come from unexpected sources.

  9. "ideally then like you mentioned in a previous blog you could have a soft right Welsh nationalist party very pro more powers for Wales but not obsessed by independece like the ones in Catalonia and the Basque country we can all dream?"

    This would be an opportunity. But it would be better off (and more likely) being soft left than soft right. A left-of-centre party on those lines could challenge Labour. Perhaps that is what Plaid Cymru will become. Who knows.

    Melding's idea wasn't for this, in reply to Anon 19:06. They still would have supported Tory UK Governments unequivocally. The stumbling block is the majority of Welsh Conservatives (party members now, not AMs) are not federalists and are even devo-sceptic. Over time i've realised that what Melding was calling for was completely unrealistic. He wanted a new party, not to rebrand the Tories.

  10. Alun - I agree that the whole world is waiting for an economic "paradigm shift". I suspect it'll have something to do with finding a replacement for oil - not just as a fuel, but things like plastics as well.

    There's nothing wrong with "growth" as I see it. The problem is seeing growth as a be-all and end-all, that it can go on forever and seeing recessions as an inconvenience rather than something that happens naturally and needs to be prepared for.

    I suspect we'll shift from a credit-fuelled economy to something based around commodities. It'll become more important for nations to offer something other than services. I suspect big finance is going to fall out of favour in Europe and Asia in the long-term, that's why I focused on exports and innovation.

    Anon 12:19 - The clue's in the name "Conservative" ;) I think all the talk of new parties is premature, even if I've raised it before. None of the Unionist parties will want to sever the apron strings because they rely too much on central organisation and central funds. Plus they still want power in Westminster and don't want to scupper MP's chances of government roles. I suspect that David Melding's ideas are before his time - more fool the nay-sayers in the long-term IMHO.