Welsh economy ‘lagging rest of the UK’

Chris Haines ICNN Senedd reporter

An ailing Welsh economy continues to trail every other part of the UK, with fewer jobs, lower wages and stalled growth, the Senedd heard.

Samuel Kurtz warned that the latest Office for National Statistics labour market overview should serve as a wake-up call for Wales.

The Conservatives’ shadow economy secretary said the unemployment rate has risen for seven months running to 5.6%, the highest in the UK.

He told the Senedd: “Compared to the UK average of 4.4%, it is clear that Wales is falling behind. Employment figures paint an equally troubling picture.

“Wales’ employment rate has dropped to 70%, the lowest across the United Kingdom, and nearly 5% behind the UK average.”

‘Spluttering’

Leading a debate on January 29, Mr Kurtz warned the economic inactivity rate stood at a “staggering” 25.6%, compared with a UK average of 21.6%.

“Our economic engine is sputtering,” he said. “Like a neglected car engine, Labour has failed to maintain it. They skipped the oil change, ignored the warning lights and left it running on empty and, as a result, it’s now slow, sluggish and struggling to get out of first gear.”

He added: “The consequences are clear: fewer jobs, lower wages and stalled growth, which leaves Wales lagging behind every other part of the United Kingdom.”

Mr Kurtz, who represents Carmarthen West and South Pembrokeshire, set out the Tories’ plan for the Welsh economy.

He said his party would restore rate relief to 75% for the retail, hospitality and leisure sectors; abolish rates for small business; and distribute investment more fairly across the country.

‘Stagnation’

But Plaid Cymru’s Luke Fletcher criticised the Tories’ record on the economy

He said: “Wage stagnation for 14 years, 900,000 children into poverty, average wages just £16 a week higher in real terms than in 2010. That on its own isn’t a record to be proud of.”

Mr Fletcher described the latest economic figures as a damning trend as he accused the Welsh Government of trying to brush issues under the carpet.

He urged ministers to establish an economic development agency in the mould of the Welsh Development Agency which was wound up after 30 years in 2006.

Mr Fletcher, who represents South Wales West, called for a cross-party talks to find a resolution on “clearly unfair” business rates.

‘Devastating’

The Conservatives’ Peter Fox criticised the new UK Government’s “damaging” policies, warning the economy is slipping with large businesses leaving the UK.

“Rachel Reeves’s national insurance tax rise is a case in point,” he said. “It was not just the breaking of a manifesto pledge but it is a direct tax on business growth.”

But Labour’s Hefin David accused the Tories of talking down the economy, pointing to the “devastating” impact of austerity on Wales since 2010.

Dr David said: “My side is basic Keynesian economics, and in 2010 the … lesson was you invest when the economy’s underperforming: you invest to build and grow, which is where we are now with the Labour UK Government.

“What David Cameron and George Osborne did in 2010, with the support of the Liberal Democrats, was the opposite.”

‘Misleading’

Responding for the Welsh Government, Rebecca Evans pointed to a £22bn “black hole” in the UK’s public finances “covered up” by the previous Tory UK Government.

Wales’ economy secretary raised issues with the reliability of the Labour force survey and comments from the Welsh Government’s chief statistician.

She said: “The Office for National Statistics … no longer designates the data referred to by the Conservatives this afternoon as accredited official statistics. They’re now official statistics in development until further review, with caution recommended when interpreting the data.”

Ms Evans added: “The Welsh Conservatives either aren’t paying attention or they’re deliberately misleading people, and either way it’s not good.”

Senedd members voted 38-13 against the Tory motion, with Plaid Cymru and Welsh Government amendments also falling.