Support our Nation today - please donate here
Opinion

Our people deserve so much more, but are our politicians agile enough to get us where we need to be?

28 Aug 2023 7 minute read
Dublin

Martin Shipton

A think tank report published the other day doesn’t mention Wales once – yet reading it provides important insights into what the Welsh economy needs to make it more successful.

The report, by Oxford Economics, is titled “Lessons from Ireland for Scotland’s Economy”. Yet it might just as well have been “Lessons from Ireland for Wales’ Economy”.

It’s fair to say that we’re used to having our economic performance compared unfavourably with that of other countries and regions. If we weren’t aware that they were usually writing from a compassionate perspective, we could easily draw the conclusion that academics writing about some of our communities’ entrenched poverty were doing so with at least a hint of schadenfreude and sometimes even sadism.

Do we really want to have pointed out to us for the thousandth time how much more prosperous Inner London is than Merthyr Tydfil or Blaenau Gwent? What good does it do us? It’s true now and it was true before we were born. Precious little has changed despite a multitude of reports and promises from politicians over decades.

In the context of the UK, Wales is seen as the poorer Celtic cousin of Scotland. Often such a case is framed in constitutional terms, using the undeniable fact that the Scottish Parliament has more powers than the Senedd. But the weaker economy of Wales usually gets a mention as well.

One thing that’s refreshing about the Oxford Economics report is that Wales, for once, is not portrayed negatively in comparison to somewhere else. (For now, we’ll glide over the fact that this is because Wales isn’t mentioned at all.)

It’s Scotland, as you might have guessed, that’s depicted as the poor relation to Ireland.

Economic success

The report’s opening section compares Ireland’s economic success in recent decades to the markedly less impressive performance of Scotland: “In recent decades Ireland and Scotland have experienced very different economic growth trajectories,” it states. “From independence a century ago until the early 1960s, Ireland’s economy was based largely on farming and food production. It traded its farm output internationally, but only really with its immediate neighbour, the UK.

“But following the publication in 1958 of a seminal report, a clear decision was taken by government to change that pattern, by attracting substantial foreign direct investment into manufacturing, with the aim of exporting much more widely across mainland Europe and beyond.

“The Irish economy prospered, and its increased prosperity fed into a booming property market, and construction sector. Between 1995 and 2007, Ireland’s gross domestic product (GDP) grew by an average 6.9% a year. Meanwhile, Scotland’s growth remained modest, with an average annual rate of 2.5%, tracking very closely the UK total.”

Explaining the success of the Irish economy further, the report states: “Over time, the focus has shifted from low to high value-added activity, and from manufactured products to associated services, such as software development. But a constant thread has been reliance on foreign direct investment (FDI) to make that happen, with a large (and controversial) role being played by the maintenance of a regime of low corporation tax.”

EU membership

Membership of the EU and, from 1993 when it was created, the European single market, was immensely beneficial to Ireland, Between 1973 and 2018, it was the net recipient of over €40bn in EU funds, including capital investment such as roads and other infrastructure, investment in education and research, and support to the agricultural sector through the Common Agricultural Policy.

With this cushion, Ireland was able to develop a new role as a player in global markets, reaching a point where it no longer relies on EU subsidies but is a net contributor to the European Commission’s budget.

Since Brexit, Ireland is the only significant English-speaking nation with full access to the single market. The country is also recognised as one of the most competitive locations for ease of doing business, ranking 11th in the International Institute for Management Development (IMD) World Competition Index and 24th in the World Bank’s Ease of Doing Business index. As a result, Ireland may well be attracting investments from North America and Asia that might otherwise have gone to the UK.

Another important point in Ireland’s favour has been its relatively high birth rate as well as its openness to inward migration.

The report states: “Demographic changes have also played a significant role in driving Ireland’s rising economic prosperity, particularly since the 1990s. In 1981 the fertility rate in Ireland stood at 3.1, compared to 1.8 in the UK. This translated into Ireland growing its workforce substantially. In 1971, 58% of Ireland’s population were of working age. By 1996, this had grown to 65% before peaking at 69% in 2007. It has since fallen away but remains higher than the EU average.

“This growth in Ireland’s population of working age has also been driven by net inward migration, reversing a pattern apparent since the famine of the 1840s. From the mid-1990s Ireland has seen net inflows of people, largely due to the return of many workers who had previously emigrated to the UK and the US. While the inward migration was clearly the result of the growth of employment opportunities in Ireland, it also helped to attract companies to invest in Ireland, in the expectation of finding a young, experienced and cosmopolitan workforce there.”

The situation in the UK is different, in that there hasn’t been a comparable cohort of young people emigrating out of economic necessity who might wish to return. Instead there have been young people from EU countries and further afield who have wanted to migrate here.

Instead of opening our borders to them as a welcome addition to our workforce, the current UK Government has adopted an anti-migrant stance that engenders racism and social division. In Wales the proportion of the population that is of working age was just 61.2% in 2020. We know of the shortages of labour in many industries that are causing problems for our economy.

The Welsh Government has been pilloried by those on the right for its “nation of sanctuary” policy. But maybe it wouldn’t seem such a laughable idea to some if it was promoted not simply as a way of showing compassion to refugees, but as an opportunity to recruit workers for short-staffed industries and to help our economy recover from years of austerity.

Niche industries

A further important lesson from Ireland outlined in the report, which applies just as much to Wales as to Scotland, is the need to pick some niche industries of the future that we can specialise in. That’s something we could certainly pursue more vigorously.

Ireland is an independent country in the EU which has many advantages that the UK has thrown away. At one time Wales had to endure being depicted as a nation of miners wearing pit helmets with soot on their faces singing hymns.

The new stereotype we should all be ashamed of is that of impoverished families relying on foodbanks.

Our people deserve so much more, but are our politicians agile enough to get us where we need to be?


Support our Nation today

For the price of a cup of coffee a month you can help us create an independent, not-for-profit, national news service for the people of Wales, by the people of Wales.

Subscribe
Notify of
guest
13 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Fi yn unig
Fi yn unig
10 months ago

Ireland (most of it) has been free from the British Empire for more than a century. Scotland and Wales are still not nor, by the way, is England. Ireland has been showing us the importance of being in control of its’ own affairs and free to chart its’ own course for its’ own people, (you know, like most other countries do), for all that time yet over this side of the Irish Sea, we all continue to suffer its’ worst excesses, seen at their very worst in the last decade. All of the nations around these islands need to be… Read more »

Rheinallt morgan
Rheinallt morgan
10 months ago
Reply to  Fi yn unig

Before we can do anything we need to build hospitals rather than sponging off our neighbours. We need a functioning airport rather than travelling across the border. we need to show that devolution has brought real tangible progress to Cymru before we can contemplate the next step. We also need to stop demonising tourists.

Fi yn unig
Fi yn unig
10 months ago

We’ll be able to do all of that when Cymru is no longer being extorted like when the Crown Estates become the Cymru Estates.

CJPh
CJPh
10 months ago

The current situation is all you get with devolution. For every minor gain, there is a minor backslide. Being tied to the rUK, none of the things you want can be achieved. “sponging off our neighbours” is what the current devolution settlement is based on. Hell, it’s baked into the very idea of the UK! Your comment is a bit like saying “before you can get your 1st driving lesson, you must first prove that you can drive a car”. I also feel shame at how our politicians have performed over the last couple of decades, as well as how… Read more »

Rheinallt morgan
Rheinallt morgan
10 months ago
Reply to  CJPh

So you are saying that devolution has brought no benefits to Wales? And that’s Westminster’s fault.

CJPh
CJPh
10 months ago

Apart from the somewhat ethereal concept of “greater sovereignty”, mindset and an increased focus on infrastructure here in Wales, not really no. But these concepts aren’t nothing – in fact, they’re vital if we are to survive as a separate polity. Many newly independent nations struggle at first, with Ireland being an excellent example. Had the sorry state of affairs (beyond those directly associated with their struggle for freedom) have continued in Ireland whilst they remained part of the UK, do you think that they would have reached the economic heights they now occupy? Devolution may have been a necessary… Read more »

Alwyn Evans
Alwyn Evans
10 months ago

The UK government has an ‘anti-migrant stance’ yet the numbers of migrants ( not the boat people but those on visas) continues to rise. The greatest number of these come from India, and without them, service industries, and the caring and health services would grind to a stop, as indigenous British people on the whole are unwilling to take jobs in such activities

Ernie The Smallholder
Ernie The Smallholder
10 months ago
Reply to  Alwyn Evans

The UK has problems of its own making.

That is why, as the article suggests, that we must being an independent nation in our own right so we can pursue the policies for the people of Wales.

Rheinallt morgan
Rheinallt morgan
10 months ago

As we do with Health and Education. Top of the class aren’t we?

Richard
Richard
10 months ago

If (according to the article) our politicians rather than the constitutional architecture are the problem, would independence necessarily improve matters?

CJPh
CJPh
10 months ago
Reply to  Richard

As we have always seen with emergent areas of endeavour, new blood always comes forward when presented with opportunity – that is what an independent Wales would be for our people. Even if that does not occur, however, and we find ourselves lumbered with the same slate of politicians, would it not be fair to consider that their performance could improve by dint of having greater responsibility more acutely focused or, if still awful, were more directly accountable because all aspects of governance were in their purview? None of this can occur under the current arrangement. There is a ceiling,… Read more »

Bethan
Bethan
10 months ago
Reply to  Richard

Of course. It’s both. Politicians and the constitutional structure they govern. Wales has been gaslit for so long I think it’s difficult to see the wood through the trees but zoom out and examine how much of a convoluted, tangled rat’s nest the British establishment is. People can’t even agree on *what* the British establishment and I’m quite sure that is by design. Monarchy, Parliament, Senedd, Lords, Commons… You have to ask the question how does the existence of all these different, interconnected but independent institutions make running a nation more efficient? How do they make it easier for the… Read more »

Mab Meirion
Mab Meirion
10 months ago

‘Agile’ at looking out for themselves or savvy in today’s linked-in I’ll scratch your back etc…

Honest, steadfast and dedicated to improving society while possessed of the ability to not be taken in by every wide boy that sees Cymru as a mark to be exploited…hen’s teeth…

Our Supporters

All information provided to Nation.Cymru will be handled sensitively and within the boundaries of the Data Protection Act 2018.