Wales : An Economic Profile I - Primary Industries & Energy

I was originally going to take a look at local government reforms in relation to independence this summer. However, I decided to change that.

We won't know where we're heading, or where we could go, economically (union or no union) until we have some idea of where we stand right now. Over the next fortnight, in six parts, I intend to provide an "at a glance" (ha!) look at the fundamentals of the Welsh economy, including : sector profiles, prominent Welsh businesses, opportunities & threats, trade statistics and where Wales' economy is placed at UK, European and global levels.

Firstly, a disclaimer. I'm not an economist, I just consider myself a keen amateur. Any conclusions/conjecture should be considered "educated guesses", not the truth, nor standing up to any significant academic rigour. There will almost certainly be errors, though I'm hoping minor ones.

The first part today looks at the primary sector of the economy and energy production.

Agriculture

Wales might be stereotyped as home to more sheep than
people, but dairy cattle are the more "productive" Welsh livestock.
(Pic : ITV Wales)

Welsh agriculture is dominated by the pastoral (livestock) sector. According to the latest Welsh Government statistics, in 2011 only 7.65% of the 23,135 active farm holdings in Wales were aimed at crops, horticulture or were a mixture of the two. In addition, some 17,765 holdings were "dormant". Wales has 18% of the UK's total supply of permanent pasture land, and 9% of the UK's total supply of general agricultural land.

The livestock estimates for 2011 were:

• 8.6million sheep
• 8.1million poultry (chickens, ducks, geese etc.)
• 1.1million cattle
• 30,000 pigs

Wales, unsurprisingly, is home to more than a quarter of the UK's sheep (27%), and an above population share of cattle (11%). Livestock numbers are lower than 2001, perhaps on ongoing recovery from the 2001 foot and mouth crisis. The sheep population, for example, is recovering, but the population is still lower than in 2001 (9.9million).

The amount of land set aside for agricultural use has slowly increased over the years, from 1.62million hectares in 2001 to 1.71million hectares in 2011. Of that, some 84.5% of it is permanent grassland or rough grazing land.

When it comes to production, Welsh agriculture is dominated, not by sheep, but by cows. 30% of gross output is dairy products, 23% is cattle (presumably beef). Only 19.4% of agricultural output was based around sheep (presumably meat), but this figure doesn't include wool.

Dairy farming is the most "lucrative" element of Welsh agriculture, providing an estimated income in 2011-12 of £63,900 per farm - compared to the all-farm average of £38,200. However, this figure should be treated with caution due to the well-documented issues surrounding the retail price of milk in particular, as well as possible inflation of incomes via grant schemes.

Some £316million of grants were paid to Welsh farmers in 2011, with £263.4million (83.4%) of that being from the Single Payment Scheme, which is part of the EU's Common Agricultural Policy.

Agricultural exports amounted to £166million in 2011, rising steadily over the years from £127million in 2005, dipping during the recession, but experiencing the sharpest rise between 2010 and 2011. This could be due to schemes like Hybu Cig Cymru (Meat Promotion Wales) - a co-operative meat promotion scheme. It may also have aided by the Third Assembly's Red Meat Industry Measure 2010. The measure, introduced by former Rural Affairs Minister, Elin Jones AM (Plaid, Ceredigion), made it a statutory obligation to promote the Welsh red meat industry.

The official export figures could be underestimated. Recent figures suggest lamb & beef exports alone were worth £200million in 2011. However, agricultural exports made up just 1.2% of total Welsh goods exports in 2011.

As an employer, the agricultural sector provided 58,400 jobs in 2011, with around 43% of workers working on a part-time basis.

In my own opinion, one area that could be targeted for further growth in the same way as red meat are processed dairy products. Wales obviously has a ready supply of milk, so why aren't our cheeses - for example - being promoted to the same extent? That's not to mention other potential marketable spin-offs : creams, butter, ice creams, gelatos & yogurts.

Finding alternative incomes (farm diversification) is a goal for many farmers – for example tourism. In 2009-10, some 24% of farms were actively diversifying, compared to 20% in 2006. The Welsh Government has its own Farm Diversification Schemes, one of which provided £1.3million in support to farmers in Powys.

Wales' largest agriculture-related companies (2011)
(Click to enlarge)

If we're looking for specific farming/agriculture success stories, there's one that stands head and shoulders above all others. Llansantffraid-based Wynnstay Group, one of the UK's largest agricultural suppliers, is Wales' 15^th largest company in the Top 300 2011 list, with a turnover of £234million (pre-tax profits of £5.9million), employing around 770 people.

I think we can conclusively say that the Welsh economy is not "reliant on sheep". We can lay that popular tongue-in-cheek myth to rest. It looks like agricultural exports - in particular meat - have a bright future. But we must remember that prices are volatile, and agriculture is still an (unfairly) low-margin, subsidised, low value added sector, with heavy competition from elsewhere for similar products (New Zealand lamb for example).

Farmers could help lead the way in processing, marketing and promoting their goods, more on that in Part II later this week.

Fisheries

Shellfish is a primary Welsh maritime product, finding
ready and willing export markets. However, the overall
fishing industry in Wales is small by UK standards.
(Pic : UK Student Life)

The Welsh fishing industry is tiny by UK standards. According to the Rural Development Plan 2007-2013, only around 1,400 people worked full or part-time in the industry in 2007. Most of the industry is based around Pembrokeshire, Ceredigion, Anglesey and Gwynedd, and has obvious competition from the Irish, the more-developed Cornish deep-water fishing fleet, as well as (infamous) Spanish trawlers.

Having said that, Wales has a plentiful and high-quality supply of shellfish – cockles, mussels, scallops, lobster, crabs, crayfish etc. - but even these are under threat. It's been reported that Welsh restaurants struggle to source local fish as most of it is exported to mainland Europe - especially France and Spain. The Swansea & Carmarthenshire area is also famous for its cockles and laver - what the Japanese would call nori , and a key ingredient in Japanese and Korean cuisine. Some local businesses are already expanding by exporting laver to Japan.

The proposed creation of "Marine Conservation Zones" by the Welsh Government is proving contentious, with Environment Minister John Griffiths (Lab, Newport East) likely to face a legal challenge from commercial fishermen.

With pressure on fishing quotas, a tiny maritime zone, as well as possible pressure from Marine Conservation Zones, you could say that deep-water fishing is under threat in Wales. It's not impossible it could be reduced to nothing more than a cottage industry in the medium to long term. Sadly, the only way I can see a future for commercial fishing in Wales will be via inland/near water "fish farming."

Forestry

In 2010, 14.3% of Wales' total land area was woodland, though only 38% of this is owned by the Welsh Government - and this is increasing steadily. When woodland is lost, more than half of it (85 hectares) was to quarrying and golf courses between 1997 and 2010. Only 6 hectares were lost to wind farms, and 13 hectares to general urbanisation.

Although not entirely related to Welsh forestry, paper & packaging exports were valued at £210million in 2011. According to Forestry Commission Wales, the forestry sector was worth £340million to the Welsh economy, and employs as many as 16,000 people. There are comprehensive plans for marketing and export of timber, and that's before considering Welsh forestry's contribution to tourism and the environment.

According to a woodlands survey for 2011, and 78% of woodland visitors travelled less than 5 miles. Overall visits are increasing, especially for walking and cycling/mountain biking. So you could conclude that Welsh woodlands and forests are a valued local amenity.

Welsh primary sector, paper/packaging and energy exports
from 2005-2011
(Click to enlarge)

Through diversification - such as providing mountain biking facilities - the numbers of tourists from further afield visiting Welsh forests will inevitably grow. This could result in more pressure being exerted to build higher-quality, more comprehensive, tourist facilities in forestry areas (for example in the Afan Valley), which could damage the environment in a way the likes of the Forestry Commission were set up to prevent.

Forestry is a potential "jewel in the crown" for Wales, but it will need to be developed sustainably - whether that's for energy, supplies of timber, or for tourists. When a single environment body is established by the Welsh Government in the the coming years, it'll be down to them to make sure it isn't sold off, under-utilised or, indeed, overdeveloped.

Water

Water is something Wales has plenty of - we all know that - but we need to avoid complacency. Dwr Cymru's Water Resource Management plan estimates that only 3% of rainwater in Wales is utilised for public water supply, compared to 50% in parts of south east England. Due, mostly, to the decline of heavy industry, water demand in Wales is on a steady decline, from 1,090 million litres per day (ML/d) in 1995-96 to around 820 ML/d in 2009-10.

Water company catchment areas are based (largely) on drainage basins of major rivers. Dwr Cymru provides water for the bulk of Wales and Herefordshire, while Severn Trent provides water for north Powys, Wrexham and parts of Flintshire. Dwr Cymru is a subsidiary of Glas Cymru - a company limited by guarantee - based in Nelson, Caerphilly. Glas Cymru is Wales' fourth largest company by turnover - standing at £688million - employing around 3,000 people.

With recent concerns over water shortages in south east  England this spring, it's been suggested that Wales could export more water to England in the future. It's currently unclear how much Wales actually exports – for example, to the West Midlands and Merseyside. It's also unclear how much those exports are worth. John Osmond of the IWA put the figure at £4.5billion per year, while others have suggested a more modest figure of around £100million.That's a big margin for error, though I suspect the latter figure is closer to the truth.

The total cost to supply processed water is currently around 0.2p per litre. The roughly 400million litres per day (20% of Severn Trent's total output) supplied by Dwr Cymru is, notionally, worth around £292million per year (fully processed). There are other companies that use Welsh water too - United Utilities for example.

Unprocessed costs are likely to be much, much lower – judging by the lower end estimates above (£100million), perhaps up to 50% lower. This suggests the value is in providing processed water directly to consumers and businesses and associated services, not the "raw" water itself. So, Wales wouldn't really benefit - economically - from water exports unless a Welsh company, presumably Dwr Cymru, was providing the service themselves.

Even in its unprocessed cost, water exports would certainly provide a "nice little earner", and if transferred via Dwr Cymru onto consumers, might result in lower water bills for their customers. But we shouldn't consider it some magical, lucrative export proposition. We'll probably have to look further afield for that.

Wales' Top 10 Utilities & Energy Companies.
Glas Cymru, based in Nelson, Caerphilly, is #1
*NB - W&W Utilities turnover is £312.8million obviously
(Click to enlarge)

Water is likely to become an increasingly valuable commodity, especially in places like the Middle East, and perhaps even parts of southern Europe. Syniadau wrote on the possibility of exporting water to the Middle East before, citing an example from Flanders.

In simple terms, water's returned in tankers used to carry liquefied natural gas. MH suggested in the comments that there's the potential margin of around $250,000 (~£160,000) per full water tanker returned from Pembrokeshire (where we have an LNG terminal) to the likes of Qatar. That would require investment in new water storage facilities in the area, but with their bottomless pockets, I'm sure the Qatari's would be able to fund such facilities quite easily.

Energy

Wales' non-renewable sources
(Click to enlarge, edited from
d-maps.com)

I'll have to explain my methodology behind this first of all.

There are many different way to measure energy outputs, I've decided to go for the easiest option of simple generating capacity in megawatts (1MW = 1million watts) or gigawatts (1GW = 1000MW). I haven't accounted for energy lost in transmission, and I also haven't counted very small energy schemes, or micro-generation (home solar panels etc.). This is aimed at being a rough guide, mainly focusing on where and how energy/electricity is produced in Wales – not how it's used.


The technicalities of energy policy and independence will have to be revisited another time, but Syniadau has probably done more work than anyone else on this subject and I recommend you look there for more detailed analysis.

Energy is one of the big boys of the Welsh economy, perhaps the single biggest sector. Energy exports - which in 2011 totalled £4.06billion - make up just over 30% of all Welsh goods exports. Is this a good thing? It's a steady export stream, that's for sure. But Wales, of all places, should have learnt by now that putting all your export eggs into few baskets isn't smart – a point raised in the Offa's Gap report.

It's also important to note that it probably includes petrochemicals in that figure, but I'll be looking in a little more detail at that in Part II later this week. This is focusing almost entirely on electricity generation. Actual (physical) oil and gas exports from Wales are minuscule – only £22million worth was exported in 2011.

Energy exports from Wales have more than tripled in value since 2005. But the questions I'm going to attempt to answer now is, where does it come from currently? And where will it come from in the future?

Proportions of non-renewables : current and proposed.
(Click to enlarge)

Although coal played an important role in Wales' industrial past, there are only two coal-fired power stations in Wales (though a few more use some coal) – Aberthaw and Uskmouth B – total generating capacity of 1.89GW.

In terms of fuel, estimates in 2005 suggest there's as much as 250million tonnes of coal reserves left in Wales in 1979 (roughly 50-75 years worth). Small scale mining is still ongoing, but mainly opencast, with some drift mining still being undertaken in the Neath Port Talbot area.

Although coal has other uses – for example steel-making - it doesn't dominate the Welsh non-renewable energy production sector. That honour goes to gas. If/when Wylfa B is built, then there'll also be more nuclear energy produced in Wales than from coal.

There have been hopes that carbon capture and storage based "clean coal" technology could be developed in Wales. Clean coal, for now, is prohibitively expensive and untested, currently at the experimental stage in places like the United States. Perhaps though, some sort of underground coal gasification could be an alternative to shale gas "fracking". However, this still produces high levels of greenhouse gases, and I'm sure the concerns about geological instability will remain.

43% of Welsh energy production is fuelled by gas at present (4.09GW) , with an additional 4.09GW of gas-fired energy projects forthcoming - such as the new/proposed Pembroke and Port Talbot power stations. There's also the £70billion worth of coal shale gas, but for this exercise I've discounted it.

Renewable energy in Wales - current and proposed
(Click to enlarge)

What of renewables? Currently it's dominated not by wind, but by hydroelectricity – big schemes such as Dinorwig in Gwynedd. 87% of current renewable energy in Wales is generated from hydroelectricity, and I think the potential for further hydroelectic power has been ignored in favour of "cheaper" wind schemes.

It isn't a simple case of "build dam, install turbines, get electricity" because of how hydroelectricity is generated and used in the first place (usually to meet a short term spike in demand). The prospect of "drowning" more Welsh valleys would also no doubt be contentious. But what if it were carried out by a Welsh company, under a Welsh Government mandate, instead of foisted on us from elsewhere? Maybe the prospect would be more palatable.

Although somewhat controversial, wind power currently only generates 320MW (13% of renewable energy currently generated in Wales). However, if every single proposed wind scheme is constructed in Wales, or off Wales' coast, then that will rise to 2.7GW (48% of Wales' future renewable energy supply, discounting the Severn Barrage). Wind clearly has a future, but issues remain around wind subsidies and arguments around noise, efficiency and aesthetics. Considering Wales is one of the windiest places in the UK, it would be sensible to make full use of a clean, renewable source on our doorstep.

Wales' renewable sources of energy
(Click to enlarge, edited from d-maps.com)

A lot has been said of waste incinerators, but they're a fairly minor player - even in the future. Of the three schemes currently on track for delivery (Cardiff, Deeside and Hirwaun), they'll only generate around 50MW of energy between them (not counting the Deeside scheme). Whether you would consider these "renewable" or "sustainable" is another matter.

Biomass energy is due to increase in influence over coming years, rising from just 10MW of generating capacity now, to around 730MW from the likes of the Llynfi, Holyhead and Baglan Bay biomass plant schemes. Once again, questions should be asked about how "sustainable" these are considering their fuel is often transported long distances. To prove how up to date this is, I've only included the Chirk biomass scheme this afternoon, but it isn't included in the overall energy totals because I don't know the generating capacity.

Wales isn't associated with sunshine, but a lot of micro-generation in Wales is provided by solar panels. It's hard to quantify how much is produced this way, but there are scaled-up proposals for "solar farms" in Pembrokeshire and Carmarthenshire (combined 8MW) and Sarn on the outskirts of Bridgend (5MW).

Proportions of non-renewables v renewables : current, future
and including the proposed Severn Barrage
(Click to enlarge)

Taking the Severn Barrage out of the equation, although sheer renewable and non-renewable generating capacity in Wales is going to increase over the next decade or so, the proportions aren't going to change dramatically. This is slightly depressing/worrying, as Wales has enough potential to meet twice its own energy needs through renewable energy alone.

It would certainly help things along if we had a devolved government that wanted the power to deal with meaningful-sized energy projects – like Scotland's continuous examples - not muck about with tiny schemes. Is Wales' current policy sacrificing renewable energy targets to prop up exports/attract "investment" in big, new non-renewable power schemes?

Out of date energy consumption and demand statistics (available here, Annex C) suggest that Wales produced 35 Terrawatt hours (TWhrs) in 2005, and consumed 24 Twhrs. Though it's difficult to pin down the exact figures, Wales is clearly a net exporter of energy and energy-related products (petroleum etc.).

More recent figures on Syniadau, suggest that Wales exports 7,092 gigawatt hours (GWh) of renewable electricity to England – almost as much as Scotland.

Most of Wales' generating capacity is in north Wales. Because there's no "north-south" electricity link (more on this, once again, at Syniadau), while north Wales and Wales as a whole are net-energy exporters, south Wales is a net energy importer.

This results in the anomaly of south Wales paying some of the highest energy prices in the UK. This is likely to be offset in future by increased energy generation in the south, but a good "north-south interconnector" is vital – not just to ensure we have appropriate infrastructure, but perhaps to help combat fuel poverty too.

Part II – looking at the secondary sector (manufacturing), IT as well as science & technology - will be posted later this week.

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Senedd Watch - August 2012

• Police are undertaking a review into an anti-poverty scheme in the Cynon Valley, following a referral from the Welsh Government. It's alleged that “financial irregularities” have been uncovered in the Cwmaman Communities First scheme.
• Education Minister, Leighton Andrews (Lab, Rhondda), joined his Northern Irish counterpart in writing to UK Education Secretary Michael Gove, to list objections about proposed changes to the GCSE exam system. Leighton Andrews has already ruled out following suit in Wales, but believed there needed to be “more communication between governments”.
• NHS Wales Chief Executive , David Sissling, unveiled his annual report, which indicated improvements in treating chronic conditions and unscheduled care – including a reduction in emergency admissions and a reduction in hospital-acquired infections.
• The First Minister said that by hosting the National Eisteddfod, the Welsh language will be “boosted in the Vale of Glamorgan”. Meanwhile, Leighton Andrews suggested that the Eisteddfod needed to “modernise” to attract more visitors, which could result in a boost in funding. The National Eisteddfod currently receives around £500,000 in funding from the Welsh Government annually.
• Hywel Dda NHS Board defended its reorganisation plans, which were unveiled earlier this month. The plans will see closures of smaller community hospitals across west Wales, with downgrades to accident and emergency services at Llanelli, while seeing a £40million investment in services across the board.
• The UK Prime Minister insisted that Westminster constituency boundary reforms are going to be delivered, despite serious disagreements within the UK ruling Coalition over constitutional reforms. Welsh Labour said that Welsh Secretary Cheryl Gillan's subsequent plans for changes to Assembly constituencies “are in disarray” as a result.
• Both Plaid Cymru and the Welsh Conservatives called for improvements in foreign language teaching. Leanne Wood (Plaid, South Wales Central) called for Wales to become a “tri-lingual nation”, while Angela Burns AM (Con, Carms. West & South Pembs.) called for foreign languages to be taught from age 7.
• The First Minister launched his search for prospective tenders for a new “Public Policy Institute” which is aimed at improving public policy development, and delivery, by the Welsh Government.
• The Western Mail claims that the First Minister and Communities Minister Carl Sargeant (Lab, Alyn & Deeside) were warned in letters that clauses in the Local Government Byelaws Bill - which amended British Ministers powers - would be illegal. The Bill was referred to the UK Supreme Court in July 2012.
• Health Minister Lesley Griffiths (Lab, Wrexham) launched a new initiative aimed at reducing the number of deaths caused by heart disease. The Cardiac Delivery Plan aims to prevent illness through education, detecting diseases sooner, providing faster treatments and improved on-going care.
• Welsh Conservative leader Andrew Davies (Con, South Wales Central) proposed that the National Assembly be renamed a “Welsh Parliament” as “a statement about the institution which now legislates our great nation.” Nick Ramsey AM (Con, Monmouth) disagreed, saying that the wider party hadn't been consulted on the issue.
• Tributes have been paid to Welsh language campaigner, Eileen Beasley, who died aged 91. She refused to pay local council rates in the 1950s unless they were provided in Welsh, leading the way to wider, organised, Welsh language campaigns through the 1960s.
• First Group won the bid to provide rail services on the West Coast Mainline from 2016 – which includes services between north Wales and London – beating current operator Virgin Trains. On August 28^th, Labour called for the deal to be discussed by the UK Parliament, however UK Transport Secretary, Justine Greening, said that there would be “no delay” to signing the new deal.
• Unemployment in Wales fell by 7,000 in the three months to June 2012, though most of the fall in unemployment, and new jobs created across the UK, were in the London region.
• The numbers of pupils achieving A* and A grade A-levels fell in Wales, England and Northern Ireland. However, the gap between Wales and the rest of the UK narrowed slightly, as there were sharper falls in England. The A*-E pass rate rose from 97.2% to 97.6%. More than 8,200 students were awarded the Welsh Baccalaureate Advanced Diploma - a rise of 20% on 2011.
• The First Minister sent good wishes to Wales' Muslim community, who were celebrating the festival of Eid, saying that,“Wales is a nation with a strong record of embracing different cultures and communities where we live in peace together.”
• Farmers expressed concerns that poor summer weather has damaged crops and grazing ground, which has had a knock-on impact on livestock sales, pushing up food production costs. Deputy Minister for Rural Affairs, Alun Davies (Lab, Blaenau Gwent), said that he would “play my part in slightly lifting the burden.”
• Figures obtained by BBC Wales show an increase in the number of medical negligence compensation payments over the last three years. £38million was paid out in the year to April 2012. The Welsh Government said that “no win, no fee” claims, and longer life expectancies, led to higher value negligence claims.
• The gap between Wales and England & Northern Ireland at the highest graded GCSEs (A*-A) closed from 3.7% to 3.2% in 2012 compared to 2011. However, the percentage of pupils attaining 5 A*-C grades fell from 66.5% to 65.4% - widening the gap. Leighton Andrews accused UK Education Minister Michael Gove of “politicising” GCSEs in England, believing exam boards had been pressured to mark more harshly to curb “grade inflation”.
• Plaid Cymru leader, Leanne Wood, called for control over Welsh resources to be devolved, and that “profits should go into Welsh coffers, not the Treasury's”. Plaid repeated calls for accurate GDP figures for Wales to be produced, expressed their support for same-sex marriage, as well as calling for better regulation of apprenticeships and the voting age to be lowered to 16.
• The Welsh Conservatives urged Welsh Government ministers to “do more to get people off the sofa”, after figures from the 2010 Welsh Health Survey show that up to 38% of adult women, and 32% of adult men, do no exercise whatsoever. In contrast, a similar percentage of adults - and up to 52% of 4 to 15 year olds - do 5+ exercise activities a week. A leading obesity expert warned that Welsh obesity levels were “just behind the US” and are “getting worse”.
• The numbers of prescription items dispensed in Wales rose by 2.6million for 2011-12 to 72.7million. However, the overall cost of prescriptions fell by £7.1million over the same period. Shadow Health Minister, Darren Millar AM (Con, Clwyd West) said that, " when Labour are imposing the deepest cuts in the history of the Welsh NHS....free prescriptions....is increasingly unsustainable.”
• The numbers of workless households in Wales rose by 2% to 21.6% of households compared to 2011. The Welsh Government pointed to “volatile” figures that varied over time.

Projects announced in August include : The start of a £200m+ resignalling programme in the Cardiff area - which will improve capacity and station facilities, Head of the Valleys Development Company has raised £150million towards the development of a race track and motorsports park in Blaenau Gwent and initial/outline plans for an £800million waste-to-energy plant on Deeside.

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Whatever happened to Welsh baseball?

                       

A few weeks ago, I posted on Basketball Wales' rejection of a merger with British Basketball on a permanent basis. Although unrelated, an interesting discussion took place in the comments section on Welsh/British baseball, and I thought it was worthy enough to look again separately.

Historian Dr Martin Johnes from Swansea University wrote on the subject back in 2000 in a paper entitled "Poor Man's Cricket". It's available here, and it's what I'm basing some of the following off. It's well worth a read.

What is Welsh/British baseball?

There are major differences between Welsh/British baseball and the "American/Major League" game:

• The Welsh/British baseball bat is more like a "paddle" than the American long and thin bat.
• Bases are poles rather than mats/bags on the round
• Balls are bowled underarm instead of "pitched"
• Welsh/British baseball has 11 players (MLB – 9 outfield) and uses a lot of cricket terminology (crease, bowling, extras, no-balls)
• The playing kit is very similar to football or rugby (shirt and shorts) with no protection (i.e. helmets)
• There are just two "innings" compared to American baseball's nine
• A run is given for every base reached after hitting the ball, rather than a complete circle of all the bases

The Welsh/British game developed as an improvement of the traditional "rounders" game. Although there were national (UK) competitions at the end of the 19^th century, attempts were made by American sides to promote their own version via tours. Baseball didn't catch on, and became isolated in two main pockets – south Wales and Merseyside.

By 1921 there were "60 clubs and 1,400 players registered by the Welsh Baseball Union", but the sport never spread outside Cardiff and Newport. It was very much a working-class game, heavily associated with the inner-city communities of Cardiff, while rugby and football players would play baseball during the off-season. These were people who simply couldn't afford to play, or weren't interested in, cricket.

Baseball became "established as the predominant summer sport" within Cardiff and Newport, though the rules weren't fully standardised until 1927. Internationals took place between representative sides of England and Wales and still continue until this day. As late as the 1980s, the annual "internationals" even had highlights on the BBC, as exemplified here. You wouldn't picture BBC Wales or S4C doing that now, would you?

How come it never took off?

There are several reasons cited by Dr. Johnes' paper and elsewhere.

Firstly, there's the issue of land. Although baseball didn't require as much room as cricket, in other working-class areas where you would expect the sport to spread to – The Valleys for instance – there weren't the large tracts of flat land available to play on. In Cardiff, baseball clubs were reliant on public space and "applications from baseball clubs to use (public parks) were turned down."

Then there's the issue of money. It might've been cheaper to play than cricket, but the fees and rules applied to baseball clubs that didn't have their own private land were extraordinary. For example the traditional collections, to raise funds for the clubs, couldn't be carried out in public parks. As a result, the baseball clubs "couldn't operate independently from those in power (City of Cardiff Corporation)."

This entrenched the sport's reputation as a "poor man's cricket". Baseball simply couldn't attract the sort of middle-class patronage that cricket, football and rugby enjoyed, and it remained confined within certain communities. The association with Irish Catholics, also led to marginalisation of the sport, at a time when there was a bubbling sectarianism in some Cardiff communities.

Welsh baseball today

The sport in Wales is still governed by the original Welsh Baseball Union established at the end of the 19^th century.

Although there's been some considerable decline in Merseyside (there are, apparently, only four clubs left), the Cardiff and Newport area still has its own local amateur baseball league (with at least two divisions), and even has very active youth and women's competitions.

Grange Albion are probably the most famous and successful Welsh baseball club - winning the championship 33 times since 1921, including this year. Some of the other sides are associated with religious societies or existing sports clubs – like St Peter's and Rumney rugby clubs. Both Newport-based St Michael's and Grange Albion are over 100 years old. Paul Flynn MP (Lab, Newport West) is a noted supporter of the sport.

The internationals between Wales and England national sides (The Gladstone Rose Bowl) are still contested annually as mentioned earlier. Wales also have a considerable lead over England in terms of championships won.

That's not to say the sport is entirely confined to the Cardiff area. I certainly remember playing this during PE lessons during the summer term. There is a campaign, I believe, to reintroduce the sport properly in other schools, presumably starting in its "heartland".

A future for Welsh baseball?

If it's one thing Welsh baseball needs, it's a publicity boost.
With the push for more active children and adults in the wake
of the London Olympics, now is as good a time as any.
(Pic : The Telegraph)

All this leaves you wondering what might've happened had the sport taken off in The Valleys, or if it crossed the River Dee from Merseyside into the Flintshire and Wrexham area. Would Wales now be playing this version of baseball in the summer instead of cricket?

Seeing as the likes of cnapan fell away a long time ago (or simply evolved into our affinity for rugby union), Welsh baseball is probably - bando aside - our equivalent of a "Gaelic sport". By that I mean a largely/uniquely Welsh "folk sport", not any reference to the rules.

Baseball might not enjoy the popularity it once used to, but it's still chugging along. In the face of competition from the likes of cricket, the fact the sport is still going is a magnificent achievement and tells a story in itself about how baseball has been taken to the heart of these communities.

It might not mean much in the grand scheme of things. However, if we lose things like our own version of baseball - harking back to the original post on Welsh basketball - we lose a little bit of ourselves with it – as well as the means to properly support the infrastructure of these sports : coaching, leagues, clubs and school activities.

If baseball is to have a future, it need to continue to attract new players. Getting it back in schools during the summer months is an absolute must – preferably with organised inter-school competitions. It would probably be cheaper and easier for many schools to play than cricket. Seeing as everyone is now clamouring to get kids playing sport off the back of the London Olympics, we in Wales should keep every option on the table.

Exposure is another big problem. Even in Cardiff, although the local media cover it, it's not as well presented or promoted as perhaps it should be. S4C usually fill empty air space with live events, I doubt it would be that big a stretch to cover a game or two. Seeing as everybody is obsessed with celebrities nowadays, perhaps one way to raise awareness is to host some sort of fund raising  game in the SWALEC stadium to raise money for the clubs and leagues.

Should there be a bid for a Commonwealth Games by Wales in the future, perhaps Welsh/British baseball could be included as an exhibition sport.

More on that at the weekend....

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A spunky Welsh Public Policy Institute

Hat tip to A Change of Personnel.

The First Minister launched his government's proposed Public Policy Institute earlier this week. He's initiated a "pre-tendering process" to encourage the "brightest minds" to apply – from academia, presumably parts of the public sector, existing think-tanks and private sector too.

I was pleased when Carwyn Jones first announced a "new deal" with the civil service, of which this forms a part, as it was in the fallout from that Green Investment Bank bid. Anything that would've given the civil service a boost at the time would've been welcomed by me personally with open arms. I thought, "At last! Someone's finally got it!"

What I envisioned, was a Public Policy Institute that would:

• Be a significant non-partisan body. Most "Public Policy Institutes" are completely/mostly independent (even if they are sometimes partisan) – for example, the Institute for Public Policy Research, Institute of Economic Affairs and Institute for Fiscal Studies.
• Focus its attentions on debating public policy decisions in Wales (or UK/EU policies affecting Wales) and help come up with creative new ones.
• Have enough clout (academic/reputation) to give the Welsh Government a clip around the ear every now and again.
• Be the first step in the creation of some sort of "Civil Service Academy"

We need all that if we're ever going to hold Welsh Governments (of all colours) to account effectively, and see a significant shift in public service performance. That would qualify, from a political anorak perspective, as an "exciting development."

Then you look at the detail in this pre-tender.

What the Institute of Public Policy will be expected to do:

• Respond rapidly to the needs of the Welsh Government, including providing short turn-around advice to Ministers, but not commission any research of its own.
• Support the cabinet in highlighting "cross-cutting issues" (screw-ups?)
• Help interpret research for Ministers, and draw lines to dots for them ("make connections between insights and evidence") as well as double check Welsh Government research, looking for gaps.
• Maximise impact with "less emphasis on written reports", and more on "communicating" and "getting the right people together." (Some sort of government PA/gofer?)
• Developing cross-discipline delivery (for example, social justice and health)
• Build partnerships with international think-tanks and universities.
• Working through a "network of authoritative and independent individuals, contributing to the work of the Welsh Government's Knowledge and Analytical Service and (the) Departments' research commissioning, at Ministers request."

All of this is subject to "refinement at the pre-tender stage", so it's not set it stone. It doesn't deserve to be written off before it's even come into being.

I think the role of this body can be simplified even further.

Back in school, there was probably a kid/kids whom lazier classmates used to go to get answers from during difficult lessons? That's what (it looks like) this proposed Institute of Public Policy is going to be – someone to help the Welsh Government and civil service with their homework. Maybe that's not an entirely bad thing thinking about it.

Although this has all the hallmarks of a think-tank (it was described as such when initially launched back in February), it can't "commission any research of its own". It's a think-tank that can't think.

So it's just a "tank" then. Tommy tank.

Then you look at selection criteria : Full grasp of key issues facing Wales, understand practical challenges of policy implementation, build effective relationships with Ministers, civil servants academics....

I'm willing to bet Prof. Brian Morgan's name just popped into your head. Victoria Winckler? Perhaps a former Welsh Government Minister like Andrew Davies? That's not to say they haven't made considerable contributions, but I wouldn't at all be surprised if it's a familiar face(s) coming, probably bringing ideas with them that will be all too familiar as well.

That's not a public policy institute really, but a panel of experts outsourced from the civil service. It also seems to be obliged to respond to requests from Ministers - that's more "footsie under the table" than "arms length from government".

There are crumbs of comfort . Shortlisted candidates will be expected to "focus on delivery." You can't accuse the First Minister of not meaning business there. He deserves credit for trying at least. Developing greater "cross-discipline delivery" and "links with international think-tanks and universities" is also pretty sensible.

The new institute will be transparent too, with its work "published as a matter of routine" – good. But then you notice it says, "unless there are compelling arguments against" (what I presume means "compelling arguments against publishing analyses produced by the institute").

Hmm....if the analysis would be too inconvenient? Who would decide what does or doesn't get released?

The First Minister has been commendably prudent. The contract is only for three years, and its envisaged up to a maximum of £450,000 will be spent on it per annum.

Alas, it'll inevitably disappear in amongst all those initiatives and departments that, perceivably, only exist as lines on the Assembly's annual budget spreadsheets.

There's not much to see here - unfortunately.

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The case for Cornwall

A national flag, or a "regional" one?
(Pic : Via Flickr)

We've often heard that Wales is England's biggest county. It certainly feels like it's treated like that sometimes, but I don't think that quip holds much water anymore other than as a wind-up, especially since devolution – however weak a settlement it is.

There are campaigns for some form of English devolution - and there will have to be movement there at some point in the future. As arguments over the future of the British constitution "rage" (or become totally bonkers in the case of this guy), there are two broad parts of the islands left out of the debate : the Crown Dependencies (which are enjoying what most of us would call "Devo-Max") and the fifth Home Nation – Cornwall.

Wales & Cornwall : Points of divergence

Could this simple act - the creation of a disestablished church - have
changed  Wales' future vis-a-vis Cornwall?
(Pic : Wikipedia)

Wales and Cornwall had a similar relationship with Old England. Both (you could probably expand this to include Devon) were recognised as holding some sort of "separateness" from England proper – both containing the Germanic "wahl" (foreigner) in their adopted names - but being nothing more than vassals to be divided amongst the Norman aristocracy. Subsequent interbreeding with the "natives" created Cambro-Norman and Corno-Norman ruling elites.

Then the Welshman, Owain ap Tudur, managed to play way out of his league. Many years down the line, we ended up with the Tudor dynasty, who centralised rule from London, fully absorbing both Wales and Cornwall into the Kingdom of England.

Both had rebel leaders who wanted to do things differently at varying times – for Owain Glyndwr, see Michael An Gof. Both, however, were fighting powers beyond their control. That power being the carrot dangled in front of our elites that their fortunes could only be made by being fully paid up members of the British project – cemented by the ascension of a Scottish King to the English throne. Both were true to this for some time, being Royalist strongholds through the English Civil War.

Both had their own forms of devolution – the Council of Wales and the Marches, and the Cornish Stannary Parliament. Both were eventually swept away. Both had their own extractive industrial booms – Wales had coal, iron and slate, Cornwall had tin and copper. As a result of industrialisation, both saw increased migration, and both saw the slow decline of the remnant native language and culture. Both were hotbeds of non-conformism and "rural liberalism".

But then something happened that I believe is critical – Wales was treated as a distinct nation. We got our disestablished church and freedom of thought and administration in such matters, while Cornwall was destined to become the "most un-English of English counties." From this, Wales eventually claimed administrative, then legislative devolution. But for Cornwall, the damage had been done.

The Cornish have, to date, never had their "1955 moment". Cornwall isn't widely considered in equal standing with the "four" Home Nations, though attitudes are changing.

Cornwall doesn't have a national rugby team, national football team, Commonwealth Games team, national university....the list goes on. These are things the Welsh take for granted, as they've "always been there", and we couldn't possibly imagine them being taken away now.

Welsh nationalists probably won't admit this, but I'll be honest – Cornwall is a worst case scenario of what Wales could've been. Administratively, Cornwall has been absorbed into England and has had very few, if any, symbols of nationhood besides its flag, the Cornish language and national anthem.

Maybe that's all you do need. A sense, or idea, of nationhood can never be taken away. Cornwall is slowly but surely being revived, and that should enhearten civic nationalists everywhere.

Cultural Revival

The unedifying spectacle of the Cornish flag being taken forcefully from an Olympic torchbearer back in May prompted significant outrage, resulting in an overturning of a ban on the flag of St Piran at the Olympic Games themselves. You've probably noticed yourselves, but this has been extended to Y Ddraig Goch too.

On the civic culture side of things, a Cornish national theatre is proposed by Cornwall Council as part of a wider plan on Cornish culture. Alongside this, a Cornish National Library is also planned to house various documents currently split between several sites. That's a lot of "nation building" there.

The Cornish language (Kernewek, or in Welsh, Cernyweg) is seeing a gradual revival, with between 2-3,000 people estimated to be able to hold a conversation or be fluent in the language. Cornish, Welsh and Breton share a similar Brythonic language family, and although Welsh and Cornish are very similar, they aren't entirely mutually intelligible. UNESCO has Cornish listed as a "critically endangered" language (Welsh is listed as "vulnerable"), but Cornish has, at least, been upgraded from the incorrect "extinct" designation.

Cornwall has always maintained a distinct culture, and
against all odds, a distinct language too.
(Pic : Wikipedia)

Reaching a eventual milestone of, for example, "10,000 speakers" would be remarkable considering where the language was - aided by projects like Radyo an Gernewegva (Cornish-speaking area Radio) and organisations like Maga (the Cornish equivalent of the now-defunct Welsh Language Board). Cornwall is still some way away from becoming a bilingual nation, but keeping Cornish alive in these circumstances is an achievement in itself.

In another big step - literally within the last day or two - Visit Cornwall have dropped references to "England" and "county" from their promotional materials. They're adopting "region" (softly) for now, and will probably keep "Duchy" to spare Chuckle's feelings, but how long until that becomes "country"?

Political Revival

You're right Dave, it might not be the Amazon, but
it's still a national border.
(Pic : National Archives)

There have been three incidents that have provoked Cornish self-awareness in more recent times.

Firstly, the creation of a "Devonwall" constituency in the proposed Westminster boundary reforms. Recent events mean that might not happen now, but it reeks of a decision taken by a government that fails to take local - or in this case, national - opinion into account.

Now, imagine the reaction in Wales if Monmouthshire, or parts of Powys, were partially merged with Marches seats, and the Prime Minister justifying it by saying, "It's the Severn, not the Amazon, for Heaven's sake!" That would be unthinkable, wouldn't it?

The rational reason to oppose such a move would be that, because of devolution, it would make the role of any prospective MPs too complicated – but the obvious, sentimental "heart" reason would stir sentiments more. Cornwall doesn't have that luxury (for now).

Secondly – the proposed "pasty tax". Now the spectacle of politicians of all colours winding themselves up over pastries might have been very "Brass Eye", but the Cornish pasty is an EU-designated protected geographical product. It was estimated by the Cornish Pasty Association that the "pasty tax" would've led to "400 job losses and a £100million hit." The u-turn might well have been a shambles, - leading to unnecessarily complicated rules on VAT - but it could be considered a minor victory for the Cornish food industry.

Thirdly - a sports stadium. A 10,000-capacity stadium for Cornwall was proposed on the outskirts of Truro for promotion-chasing Cornish Pirates RFC (the Cornish like rugby almost as much as the Welsh do) and Truro City FC. Plans have been on and off for the best part of a decade, but in the last few years were revised, not as a "Stadium for Truro", but as a "national", popular campaign for a "Stadium for Cornwall". Although the bid has been put on the back burner due to funding issues, it was a perfect melding of the cultural with the political – a home for, what effectively is, a "national" sports team, and a significant "political" investment in sporting facilities alongside it.

There's one other depressing characteristic Cornwall and Wales share – rural poverty. Cornwall is an Objective One area in the same way West Wales & The Valleys is, with a GVA per capita around 70% of the UK average. However, the Cornish have been partially successful in closing the gap. Can Wales learn from what the Cornish have done there?

Having said that, Cornwall had no sway on Objective One decisions. It was managed within the South West England region, while Wales is a European region of its own and manages European programmes largely by itself.

The creation of Cornwall Council (as a single unitary authority) in 2009 has been viewed quite negatively since it replaced six, smaller, district councils. Maybe this creation of a pan-Cornish institution will make the path to devolution much easier – and the local government situation can always be resolved post-devolution. Indeed, a Government of Cornwall Bill was introduced by a backbench Liberal Democrat in 2009, but nothing came of it.

Cornwall is a traditional Liberal Democrat stronghold (along with much of south west England), with the Tories a competitive second party. Labour are practically non-existent outside of the major population centres. The Cornish Nationalist party, Mebyon Kernow, has been a fully-fledged political party for some 40 years, and has 5 seats in the 123 member Cornwall Council, as well as many representatives at community and parish level. They campaign for Cornish devolution, wishing to create a devolved Cornish Assembly, with the same powers - broadly - as the Welsh Assembly.

A devolved, or de-loved future?

The future "Senedh Kernow"?
(Pic : BBC)

Wales and Cornwall share an awful lot in common, including being caught in Westminster's blind spot when it comes to our more peripheral needs.

But the Cornish shouldn't expect devolution to act as a magic bullet. It'll have its disappointments, and it'll have its triumphs – like all forms of government. It'll probably have to be a process led by the Liberal Democrats if anyone - or, perhaps at some point in the future - Mebyon Kernow MPs.

Cornish Nationalists don't need to be patronised by people like me. They might be starting off the process further behind Wales, but they have more than enough raw material to work with and a strong case to be made for equality with the other Home Nations. It's hard to predict when, or if, Cornwall will eventually become a devolved nation - but a nation they are.

And once a nation stands up and actually acknowledges that fact, who knows where it'll take them....

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Offa's Gap - What? When? Where? & Why?

Offa's Dyke might be nothing more than a ditch, but Offa's Gap is looking distinctively
deeper and wider - and Wales is quickly sinking into the sea on one side of it.
(Pic : Britannica)

Plaid Cymru recently launched a comprehensive discussion paper, co-authored by Dr Eurfyl ap Gwilym and Adam Price, on the "relative health" of the Welsh economy. More on that at Syniadau (where you can find the report itself in English and Welsh), A Change of Personnel and Borthlas.

Despite devolution, European structural funds and the economic boom in the early noughties, Offa's Gap – the gap in productivity between Wales and the rest of the UK – has widened over the years, and now Welsh GVA per capita stands at just 74% of the UK average. The report is a forensic analysis of this relative decline of the Welsh economy, and it makes for rather depressing reading - regardless of your political persuasion.

What are the paper's key findings?

The Welsh Growth Crisis

• For a period of around 20 years (1971-1988), the Welsh economy remained at around 85-90% of the UK average, but in the early 1990s (1992-93), fell dramatically compared to the rest of he UK.
• GVA per capita growth has been "significantly below the UK average apart from two years between 1990 and 2009", with a pronounced deterioration between 1996 and 1999.
• While the UK as a whole experienced resurgences following declines in economic output, Wales has been on a "continuous relative decline" since 1996.
• The average annual growth rate between 1971 and 1990 was almost exactly the same as the UK (1.96%), but since then, a gap of 0.6% opened between Wales and the rest of the UK opened.
• Welsh income growth was just 27% between 1991-2010 compared to 42% for the UK as a whole.
• Although Welsh GVA per capita fell compared to London between 1989 and 2009, possibly as a result of the financial services boom, it also fell relative to the rest of the UK. Most of the decline "is explained by Wales failing to keep pace with the UK as a whole."
• Welsh GDP relative to the EU27 has fallen from 92% in 1994, to 80% in 2009. The EU trend has been for poorer-than-average regions to outperform richer regions. However, this hasn't been the case in Wales. There's a strong argument for Wales "being the worst performing economic region in the entire EU."

The Welsh Growth Collapse (1995-2010)

• It's "only in the last 15 years that Offa's Gap has opened up." Wales hasn't always been as poorly performing as it is now. For most of the 20^th century, Wales kept pace with most of the industrialised world.
• Extrapolated figures for Welsh growth, in terms of purchasing power per capita, show that by 2050, Wales might fall behind Russia, Mexico, Turkey, Argentina and possibly South Africa and China.
• The relative decline in this period is explained by problems in the Welsh business sector. Welsh household consumption declined relative to the rest of the UK, and there was less potential for equity release (which drove the consumption boom) due to lower Welsh house prices.
• When measured by gross output per employee, Welsh productivity was higher than the UK average between 1987 and 1996. When measured by GVA per employee, productivity was lower, but still remained above the UK average.
• There was a "precipitous decline" between 1994 and 1998, according to study by Richard Harris on behalf of the Welsh Government. There was an 18.5% decline in manufacturing GVA, and productivity went from 40% above the UK average to 20% below.
• Gross Operating Surplus (a measure of profitability in business) fell away sharply from the UK average between 1994 and 2001.
• Wales is more vulnerable to export effects on economic growth than the UK as a whole. The Welsh economy is more "open" (share of imports and exports are larger than the UK), and the domestic economy is less important.
• Welsh Government had "access to none of the policy levers available to national governments – currency depreciation, fiscal/monetary stimulus – to respond to an external shock."
• The pound was over-valued in this period, due to exports of financial services from London, leading to a deterioration in the balance of payments at a UK level, and a "hemorrhaging of jobs in the manufacturing sector" – which was still a major part of the Welsh economy (and still is compared to the rest of the UK).

The "Good" News

• Wales' total share of UK exports in goods rose from 4.09% in 1996 to 5.52% in 2011 - bigger than Wales' population share. Wales has significantly outperformed the UK and Scotland in this regard compared to 1996.
• The composition of Welsh exports is less positive. In 1996 17 sectors had an export share of 5% or more, by 2010 that was reduced to just three : petroleum products, power generating equipment and electrical machinery.

The Welsh Growth Enigma

There are two "puzzles" emerging:

1.   Why hasn't the economic decline resulted in a collapse in incomes?
2.   Why hasn't the robust trading in Welsh goods resulted in improved economic growth?

The answer to the first question, is that income falls have been "cushioned by transfer payments" – pensions, social security benefits & tax credits – which acts as a "dampening mechanism", but cannot last as the welfare state comes under more sustained fiscal pressure. (I touched on this a few weeks ago : Cameron on Welfare - Right analysis, Wrong sentiments).

The second question is more complicated to answer. Trade surplus' in exports of goods are likely to be offset by a deficit in trade in services (a shorthand example, would be Welsh people using financial services based in London). Wales' trade deficit with the rest of the UK was estimated to be around £4billion.

The national deficit in taxes, and deficit in imports of goods and services, are said to be "interrelated".

It means the bigger the current account deficit in Wales, the bigger the need for more central government intervention (to offset the economic decline). Levels of economic inactivity and ageing demographics "haven't changed sharply over the last 20 years." Only educated guesses can be made as to "why" this decline has happened, in spite of strong export performance.

Why did Offa's Gap widen?

There was a major "economic shock in the late 1990's" that left long-lasting
damage to the Welsh economy. Was it a hangover from Black Wednesday?
Was Wales' manufacturing base sacrificed to create a City of London cash cow?
(Pic : BBC)

The report highlights a "major economic shock in the late 1990s" that caused Offa's Gap to widen dramatically and "left long-lasting effects". It doesn't, however, give many specifics as to what these were, mainly due to lack of formal evidence and statistics (a Welsh GERS for example). I think this is an important discussion point. Here are a few of my own guesses:

Black Wednesday "freeing" Sterling from EMU – The report says that "blaming the City of London for Wales' woes is misplaced." However, the report does say that over-valuation of the pound, fuelled by the export of financial services by London, caused the gap between the UK and Wales to widen.

This could've been fuelled by Black Wednesday in 1992, which resulted in the value of the pound plunging suddenly. Over subsequent years, Sterling's value was able to rise dramatically, improving the economic performance of The City, which became the UK's "Golden Goose", right through to Labour winning the 1997 General Election and beyond. This dragged the UK average GVA upwards too fast for Wales to keep up. Wales didn't have the financial service industry to match Northern Ireland, Scotland and some other parts of England, which could've been able to take full advantage of this.

Lack of agglomeration & "too many eggs" – The consolidation of exports down the years into fewer sectors exemplifies this. Wales still hasn't seemed to have learned the lesson that being over-reliant on too few sectors can lead to disaster. The lack of major centres also means that there is very little to fall back on. Manchester, Birmingham, Leeds et al. had far more "back up" industries (mainly high-end services) to respond to post-industrialisation that Wales ever did, and probably ever will.

Decline of Steel - The late 1990s/early 00s was to the steel industry in Wales, what the 1980s were to the coal industry - and I think people forget that. The numbers employed in steel fell from around 63,000 in 1996 to around 8,000 in 2010. Steel is still one on Wales' big export categories, and the closure of the likes of the Ebbw Vale plant, and mothballing furnaces, not only impacts jobs, but seriously impacts Welsh GVA and exports. The decline of steel-making jobs in fact, roughly falls in line with the "precipitous decline" in manufacturing outputs in the late 1990s and early 00s. Look up the Mittel Affair too while you're at it - another Adam Price production.

LG Newport shaking faith in "big bang" inward investment – This was an infamous "white elephant", and the swan-song of the big "metal bashing", "branch factory", foreign direct investment (FDI) schemes in Wales. In 1996, it was announced up to 6,000 jobs would be created, off the back of around £150million of public subsidy via the WDA and government, and hardly any of that materialised.

This probably played a big role in the eventual winding up of the WDA, even if I think there was a rose-tinted view of their role and performance. Are we paying the price now for that decision? Should the WDA have been reformed, or given a new function, instead of scrapped?

LG Newport was an example of what was wrong with the WDA:
Excessive optimism,  pork barrel politics, promising too much, and not
taking into account changing trends in the global economy.
(Pic : Llewellyn Lewis Sennick)

Liberalised Eastern European economies – Market reforms in eastern European nations following the fall of Communism, flooded the FDI "market" with nations that had:

• Better skilled, cheaper workforces (a remnant of a command economy)
• Full economic tools being used to promote the free market
• Commercial opportunities provided by "reconstruction efforts" (i.e. East Germany)
• A desire within these nations to become part of the European mainstream.
• A desire on the part of NATO powers to integrate "New Europe" into "The Western Sphere"

Wales suddenly had many more competitors than we were used to. Foreign investors could pick and choose where to plonk their factories. Wales couldn't offer anything compelling anymore.

Instead of competing with NE England, Northern Ireland and the West Midlands, Wales was now up against Poland, Slovenia, Slovakia, Czech Republic - and even the likes of China and India. How could a "region" (with - at the time - no devolution) compete with fully sovereign nations?

Misapplication of European structural funds – It would be unfair to say that no infrastructure/economic development funding has been used in West Wales & The Valleys. However, the vast bulk seems to be directed towards "social schemes" which provide something in the way of personal development, but little in the way of economic development.

EU-funds appear to be used for things like public realm improvements, or incredibly niche schemes, spreading funds far too thinly. In the period 2007-2013, £1.5billion has been spent on the public sector (mainly universities), £99million on the third sector (including ~£6.1million to the likes of AWEMA), and just £23million in the private sector.

Devolution didn't cause the decline, but may have contributed to prolonging it – The start of the decline was before devolution was even re-considered as UK policy – around the 1992 mark – and the severe dip happened around 1995 or 1996, before devolution even came into being. However, related to the EU funds issue, subsequent policies taken by Welsh Governments may well have prolonged the decline, rather than actively turning it around.

For example : scrapping (instead of reforming) the WDA as mentioned further up, spreading public infrastructure investment too thinly, responding too late to shocks (exceptions like ProAct and ReAct), the culture in the civil service (managerialism, fatalism, process over purpose, being "used to being poor") and the old chestnut of relying too much on the public sector to provide economic stimulus in our poorer performing areas.

What can be done?

Wales is a net-exporter of goods. Should any economic growth
strategy be focused on this underlying Welsh economic strength?
(Pic : Commodity Online)

The paper gives three potential policy approaches that could lead to a turnaround.

A growth strategy focused on exports. "Expanding and diversifying the Welsh export base is critical to increasing Welsh economic growth and reducing dependence on budgetary transfers." It goes on to suggest the creation of a business-friendly arms-length agency that would aim to "attract export-oriented investment and support and encourage indigenous-based exporters."

That would be different to the old WDA, which focused on inward investment from foreign companies, rather than this proposal for effectively "outward investment from Welsh companies."

Maximising economic opportunities in England. England is called a "high-value market" with "45million people within 2 hours travelling time of Wales." Welsh businesses are described as failing to take advantage of the changing opportunities within the UK economy – for example, Welsh firms providing English health and education services as the UK Government increasingly privatises them, and publicly-owned Welsh companies bidding for these sorts of contracts. Statkraft (Norway) and Vattenfall (Sweden) are given as examples.

Significant investment in Welsh infrastructure. Transport costs affect regional economic performance, and the low level of investment in transport is "reflected in an completely unelectrified rail system, an ailing national airport, a Severn tunnel that is prone to flooding and a vulnerable two-lane pinch point at Brynglas tunnels." Most of Wales' large bulk exports (chemicals etc.) are transported by sea, but land-based transport could "seriously be affecting the performance of Welsh SME's." This shouldn't be seen as a be-all and end-all. More on that at Borthlas.

School of Hard Knocks, School of Athens and Lazy Big Brothers

So, do you point "sky-wards" to more powers and independence? Or
"earth-wards" to boosting the economy as a pre-requisite, within the current model?
(Pic: Wikipedia)

The paper doesn't provide a cure, just a comprehensive diagnosis of the underlying problems. It made for depressing, sobering, reading. I'd go so far as to say this is the most important paper on the Welsh economy produced since the Holtham Commission, and an absolute must read, despite the obvious agenda/motivation of the authors.

It hits home the near-quixotic task it is to get Wales into a position to move towards independence. That isn't "good news" for unionists though. In fact, it reflects incredibly badly on the UK.

Westminster is the burly big brother that saw their slightly dim, slightly smelly, unpopular little brother kicked in over and over again in the playground, and didn't do anything about it - perhaps even joined in a little bit. Behind all the smiles, denials and promises of action on Wales - past, present and future – we've been betrayed. That goes for you whether you're a nat, Labour, Welsh Tory or even the most ardent of ardent unionists.

This "growth collapse" happened on their watch, and almost entirely their brief. One thing we can say, is Wales can't rely on Westminster at all to dig us out of this. The solution will have to come from within Wales, and unpalatable decisions will need to be taken.

Welsh Labour's (or even the Assembly in general) approach to the economy is the equivalent of the big sister offering a shoulder to cry on. It'll make you feel better, it might even offer a distraction, but it's not going to stop the subsequent beatings the following day, and the day after that, and the day after that, and the day after that....

If this had been produced by an independent think-tank, or another political party, it would've been painful - shutting down this blog levels of painful - but the fact it's Plaid leading this has dulled pain a little bit. It (along with Gerry Holtham's recent musings, albeit with question marks on the numbers) brought us back down to Earth, and I think we (Nationalists) needed that. We've gotten a little carried away with events in Scotland.

I've always realised that Welsh independence isn't on the horizon the same way it is for Scotland. It looks likely I'm going to be another nat who goes to the grave or the crematorium oven never seeing independence - and I'm not even thirty yet. However, "fought the good fight, finished the course" and all that.... This report isn't telling us stuff we didn't already know - but it's not all doom and gloom. Even the most desperate cases can be turned around.

The problem now is the politics and philosophy on the way forward.

We have the slightly more pessimistic, hard-headed, empiricist, "worldly" views of the likes of Gerry Holtham. A conclusion that Wales can only be what it is at present, and the cold hard light of day says a failing nation (economically). This far, no further. But does that, ultimately, also mean "more of the same, please"? And an acceptance of the current failed models?

Meanwhile, nationalists are excessively idealistic, faith-based, "sky-ward" people. A belief that Wales should aspire to be something greater than the sum of its parts, and that it can only be done with full freedom of thought and action. It's more imaginative, significantly more creative, gives you more options, but is in no way grounded in conventional rationality, or more importantly - conventional economics.

The frustrating thing is we all want the same thing – a successful Welsh economy, and a prosperous Wales. We just can't agree on a single way forward without dragging in the "chicken or the egg" re. independence/more powers. We need something to break us out of that thinking.

The question for all of us lay people, the politicians (of all colours), the business supremos, the trade unionists, is what do we do next?

I'm currently working on a "six part special" related to this - on the current status of the Welsh economy - which will be published either later this month, or next month. I'll have some possible answers to that question then, and maybe a slightly more positive outlook.

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