Top Welsh Labour figure says promised economic benefits of devolution remain undelivered

Martin Shipton

One of Welsh Labour’s most senior figures in the early years of devolution has accused successive Welsh governments of failing to deliver the economic benefits the Senedd was intended to bring to Wales.

Andrew Davies was part of the core team that organised Labour’s campaign in the 1997 referendum that resulted in the creation of the National Assembly two years later. He was elected to be the first Assembly Member for Swansea West and later served as Economy Minister.

He left the Assembly in 2011 and is now an honorary professor at Swansea University.

Damning

In a damning paper published by the National Institute of Economic and Social Research (NIER) that he wrote with Professor Jonathan Bradbury, also of Swansea University, Prof Davies has analysed the economic policies pursued by Welsh governments since what is now the Senedd was set up, and concluded they have failed to produce greater prosperity because of policy shortcomings..

The paper states: “The Welsh economic development strategy since devolution has been limited in coherence and consistency. The four economic development strategies published by the Welsh Government since 1999 have contained some continuities, but they have not sustained a clear long-term set of aims and objectives and means of achieving them.

“Welsh economic development strategy since devolution has developed many ambitious aims, but this has not been matched by a strong and consistent focus on how to implement them. This reflects the lack of a clear set of means and performance indicators for achieving the Welsh Government’s broader Wellbeing of Future Generations goals of a more prosperous, resilient and equal Wales.

“Welsh Government approaches on transport, renewable energy and public procurement all provide examples of where the Welsh Government has struggled to develop long-term policies to support a transformation of the Welsh economy. All too often it is also presumed that passing a new law or developing a new policy is enough to initiate change, and there remains an implementation gap.

“The development and governance of economic development policy in Wales has in practice been marked by limited mechanisms of accountability. Currently, much of the development of policy has been passed to consortia of local councils and regional officers, working in a relatively closed policy arena away from public view.

“Compared to other devolved jurisdictions Wales lacks a culture of diverse and effective challenge to government policy. There is a predominant public sector ethos, and voluntary sector and civil society organisations are very dependent upon the state.”

Assumption

Considering the argument that economic development in Wales has been hampered by the centralisation of the UK economy, the paper makes the point that it was the theoretical assumption of the presumed advantages of devolution which sustained the economic case for devolution in Wales in the late 1990s.

The paper continues: “To a large extent they still do, and they also make analysts of English regionalism look to places like Wales for lessons. Consequently, faced with the reality of relatively weak Welsh economic performance, the existing views in the literature focus to a considerable extent on blaming a range of external constraints or contingent factors for preventing devolution from having these positive economic effects.

“However, it is deeply questionable whether such explanations by themselves are plausible. It is true that Wales’ relatively poor economic performance should be seen in the context of the UK having higher long-term levels of regional inequality than any other large wealthy country, but the principal inequality is the considerable gap between London and South East England and the rest.

“Wales has in fact experienced long-term problems very similar to many other parts of the UK outside London and the South-East. Consequently, other things being equal, one would expect Wales to gain advantage from the potential afforded by devolution, but in practice it has experienced little success in achieving relative improvement even against fellow regional strugglers.

“This is reflected in an indifferent performance in productivity levels, GDP per capita, research and development, unemployment rates and poverty levels.

“In truth, Wales has experienced the same economic trends as the rest of the UK outside London and South East England. There are some indicators of improvement but very few of relative improvement.

“The question is why has elected devolved government in Wales not made more of a demonstrable difference to meeting similar challenges to those faced by large parts of England which have not enjoyed political devolution?

“In this context it is plausible to reframe analysis of economic performance in Wales to focus more on how actors at the devolved level have approached regional development, rather than on external constraints and contingent factors.”

Prosperity

Asked by Nation.Cymru how he would respond to the suggestion that as a former Economy Minister himself, he could be seen as part of the problem, Mr Davies said it was a fair question and one that any politician was likely to have asked of them. He said: “Firstly, those of us – the relatively few – who argued and campaigned for devolution in the 1990s and in the 1997 Referendum said it would bring greater prosperity for Wales, improved public services, greater accountability and transparency for decisions affecting Wales as well as a stronger voice for us in Europe. All of this was reflected in Ron Davies’ 1997 White Paper, A Voice for Wales.

“Over 20 years later it’s difficult to see to what extent those ambitions have been met and I think we need an open and honest appraisal of progress and also why those ambitions have largely not been achieved. Jonathan and I attempted to do this in our NIER economic development article.

“And we are also looking more widely at other devolved areas such as education, health and social care, the environment, local government, the state and civil society in Wales as well as Wales’ engagement with Europe in our book about devolution.

“Perhaps more than most, it’s beholden on those of us who fought so hard for devolution in the 1990s and then subsequently sought to make it work, to be honest about progress and seek to improve things in Wales. After all, it’s a basic principle of accountability to do so. And as someone who has been very active at a fairly high level in Welsh Labour politics and public life in Wales for over 30 years, including serving as a Welsh Government minister for over 10 years alongside Alun Michael and Rhodri Morgan and then chairing a large health board for six years, I hope I can use that experience to contribute to the wider debate in civil society in Wales. I’ve done that on many occasions, up until now primarily in discussions about the health and social care system in Wales.

“But as you know from your own experience, being the boy that points out the emperor has no clothes is not always welcomed in a small country like Wales and can be an uncomfortable position to take, certainly given the dominant political culture we describe in our article. Nevertheless, having been so critical of what I’ve described as the ‘Client State’ in Wales, to then sit back and not seek to take part in any debate and seek to improve the situation smacks of hypocrisy.

“I would also say that the National Institute of Economic and Social Research is a prestigious organisation, the oldest and one of the most highly respected economic UK think tanks and it wouldn’t publish a partisan puff piece. The article also came out of a UK-wide NIER workshop in November 2020 on The Political Economy of Devolution and Secession in the U.K, which included contributions from academic colleagues from all parts of the UK as well as the Irish republic.

“Indeed, we were required to have our NIER article peer reviewed and one of the initial challenges from the reviewers was precisely that my views could potentially be interpreted as self-justification by an active participant and such a temptation would need to be avoided. Even if I was so minded, Jonathan Bradbury as a respected academic wouldn’t have allowed this to happen anyway and we both strove to take an evidence and research-based approach to our work, and also to take a comparative perspective by looking not only at other parts of the UK but also other regions in Europe.

“In the early 1990s I worked in the Ford Motor Company in Wales and it was a powerful lesson for me in how a huge company like Ford dealt with intense global competition from other car manufacturers. This was largely done on the basis of seeking to change the culture of the organisation to become a learning organisation, with a huge investment in skills development but above all by focusing on quality and continuous improvement. (Incidentally, not only was it an invaluable experience, I believe I was the only Assembly Member in 1999 who had any private sector manufacturing experience, even including the Conservative members.) I believed and still do that government and public services can and should apply this approach and these principles and I tried to do so when I was a minister. It’s what drove my approach as both economic development and finance & public services minister, eg abolition of the quangos. Unfortunately, however, my attempt at reform based on these principles didn’t last behind my tenure.

“I’m very aware of the danger that retired politicians seek to justify and defend their actions, often through the writing of their memoirs. If I was seeking to be mischievous, you could describe this as Spike Milligan’s ‘Adolf Hitler: My Part in His Downfall’ approach! It is certainly not an avenue I’ve ever been interested in pursuing and I also suffered from or was afflicted by a lack of personal ambition – perhaps a fatal flaw in a politician.

“I’ve always been more interested in trying to identify the challenges we face in Wales and solutions to those problems. After all, one definition of insanity is doing the same thing over and over again and expecting different results …

“And finally, of course, I’m not the only ‘retired’ politician who has commented on events in the recent past and tried to be honest about their own and other’s failings. Gordon Brown, George Osborne and Ed Balls are amongst those who have all done so in their post-ministerial lives.

“For example, only last autumn, four previous Prime Ministers admitted that failure to reduce the huge regional inequality that exists in Britain has been one of the major failings of all governments and public policy in the last 40 years. If that’s not a pretty major mea culpa I’m not sure what is!”