Timid tinkering isn’t enough – we need bold new ideas to tackle Wales’ economic challenges

Adam Price, Plaid Cymru Leader

“It’s the economy, stupid.”

It wasn’t designed as a campaign slogan, but the words of Bill Clinton’s strategist, James Carville have forever led us to the nub of political thinking.

The economic challenges facing Wales are numerous but not insurmountable.

Those who defend the constitutional status quo impetuously, even gloatingly, highlight the fiscal gap as a reason why we can’t control our own affairs.

Wales is not unique. Across the UK, nine of the 12 Territorial Unit Regions for the purposes of statistics are persistently in deficit. Addressing this issue is not simply a fiscal or economic matter but has a wider impact on the health and well-being of society.

In our 21st year of devolution, timid tinkering will only entrench the societal divides which are so prevalent in our communities.

As we build a movement to capture the moment, we need to ask the most searching of questions to understand the challenges we face.

Levelling up to give everyone a leg up go hand in hand – but which toolbox do we open? This debate is long overdue and in the words of our late friend Steffan Lewis, we should make the solution more memorable than the problem.

Nowhere is this truer than in the case of our education system.

The new curriculum requires a step-change in everyone’s approach. Pupils will need to think for themselves, a culture of creative thinking will be encouraged, and teachers must be supported.

The evidence of a strong link between human capital and economic development is bad news for Wales.  Because what we may have thought was a source of strength – given the historic importance placed on education – is actually a source of weakness.

Wales is 10% behind Scotland when it comes to the proportion of the adult population with an NVQ Level 4 qualification – 34% versus 44%.  That’s equivalent to 180,000 extra people with a NVQ Level 4 qualification.

There is, therefore, a strong case that low skills and under-investment in education is a major contributory factor in poor economic performance.

Progressive

So what will be those memorable solutions?

We have two major sources of potential future growth.  The diaspora promising more immediate returns if we can attract them back, and the next and current generations of workers offering more medium and longer-term returns on investment.

The question is how can you fund the latter without disincentivising the former?

£300 million would represent around a 10% increase in the education budget – a significant rise – and a 1p rise in income tax would deliver that.

But then why work or set up business in Cardiff, when you can do the same in Bristol at a lower rate of tax for yourself and your employees?

So, we need to get a little creative.

We could, for example, scrap business rates and council Tax – both badly designed and unfair levies in their own ways, and replace them with a new Single Property Tax – allowing us to cut income tax while investing in education.

It would be socially progressive and would provide a financial incentive for young workers to return or stay in Wales, and for entrepreneurs to base their businesses here.

The seeds of our disappointments in Wales have been in our eagerness to do a little bit of everything at the expense of concentrating on the major challenges.

By acting fast and smart we can build a strong future by investing in the skills of the present.

The new Wales cannot be built with the old tools and the old ideas. To build it, we will have to be bold.