Only a New Deal can stop Wales suffering at the heart of a more unequal and divided UK

Theo Davies-Lewis

Over the last few months, governments across the world have walked a very difficult tightrope.
Co-ordinating the public health response to a novel pandemic and at the same time ensuring that the economy doesn’t totally collapse due to restrictions put in place has been an almost impossible balancing act.

With death and infection rates now falling across the UK – albeit at a different pace in each of our four nations – the attention is increasingly turning to our economic recovery. Boris Johnson’s focus seems to have shifted rather recklessly to the economy much sooner than the Welsh Government. But now, Mark Drakeford, who has for many weeks been commended for his cautious response to lifting restrictions, is the one having to make that same difficult recalibration.

With the success of Wales’ tight lockdown – resulting in the lowest ‘R’ rate across the UK – the First Minister has been under pressure for weeks to open up the Welsh economy. For the former social policy professor, who has so far been right to prioritise the public health concerns over the economy, his new measures announced on Friday would not have not been undertaken lightly. These included the opening of non-essential shops (except restaurants and pubs) tomorrow and the end of the ‘stay local’ guidance early next month.

So, Wales is certainly starting to open up. And this will no doubt provide some reassurance to many businesses up and down the country. But for some sectors, it is already too late.

North Wales Tourism’s recent survey, for instance, has already shown that around 10,500 jobs will be lost in the tourism and hospitality industry in North Wales even if trading resumed on July 1. This is coupled with the ongoing uncertainty for skilled manufacturing jobs in the north and south of Wales, with major employers such as Airbus and TATA suffering immensely due to the impact of the pandemic on their industries.

Throughout this crisis, the UK and Welsh governments have insisted that they have done all they can to rescue jobs. They have been generous in their support so far – with 300,000 jobs in Wales protected by the furlough scheme since the start of the pandemic – but as I argued earlier in this crisis, job losses at any time in communities like Port Talbot are devastating. We also cannot allow jobs to be lost down the line in these areas, and the same goes for those rural communities that are dependent on the tourism and hospitality sectors too.

In unprecedented times, we need unprecedented measures. It will require the Welsh government and Downing Street to work together; a good first step would be to start communicating again. And once that conversation takes place, perhaps Mark Drakeford can encourage the Prime Minister to take inspiration from a statesman of the twentieth century, aside from Winston Churchill, to deliver an economic recovery for the whole of the UK.

 

Infrastructure

As others – including the former Conservative MP Nick Boles – have suggested, the UK government should implement an economic strategy similar to U.S. President Franklin D. Roosevelt’s ‘New Deal’ to steer his country through the Great Depression. Although we must always use historic parallels with caution, it is evident that only FDR-inspired “bold, persistent experimentation” will be able to bring about an economic recovery across Wales and the UK.

By channelling Roosevelt’s pioneering Works Progress Administration to invest in public works projects, we would certainly put people back to work. In Wales, there’s plenty to work on – including the roll-out of broadband infrastructure, building a transport network that is fit for purpose, and investing further in our leading Arts industry. Of course, this will come at a considerable cost to the taxpayer and our financial institutions. But as FDR said in his 1937 inaugural address, progress should be judged on whether a government provides “enough for those who have too little” rather than its support to those who thrive at the top.

The challenge facing the Treasury and the Welsh government is by no means an easy one. But Downing Street should not judge its economic success on how the markets in the City perform in the next few months. We have seen time and again how markets can be out of step with the harsh reality faced by people across the globe. For Boris Johnson, a sign of a successful recovery will be when people who have lost their jobs can start to take-home pay again.

There’s no kidding that Mark Drakeford and Ken Skates will have to work, and possibly fight, the Treasury for every penny for Wales. That is the harsh reality of the situation we are in now. We are facing the imminent prospect of Wales suffering at the heart of an even more unequal and divided Britain for many years, making it all too easy for those who would point to independence as an answer to our looming economic troubles.

The looming prospect of economic inequality is by no means a new one. After all, in 1845 Boris Johnson’s ‘One Nation’ inspiration Benjamin Disraeli feared that Britain was already split into two nations: the rich and the poor.

Almost two centuries later, however, this pandemic threatens to widen the inequality that prevails in Wales and the UK even further. With pressure from the Welsh government, only a New Deal-style recovery will avoid that.