It’s essential Wales has a Secretary of State that will fight its corner
Business editor Sion Barry on why we need a Secretary of State for Wales playing a smart game to get the best outcome possible for Wales and its economy
WHO is the most important person in Wales? A rather sweeping question granted, but if distilled down to the economy, then the field narrows.
Those brilliant entrepreneurs trying to keep businesses alive during the pandemic, and of course the hundreds of thousands of workers in the NHS, social care, shops and supermarkets, whose worth and importance was so undervalued before Covid-19, go without saying. But let’s get down to individuals. There’s First Minister Mark Drakeford at the helm of a Welsh Government with devolved powers from economic development to health, where on the latter he and his cabinet are responding to the pandemic.
The Welsh Government has an annual budget of around £19bn.
Some taxes are devolved, but the reality is, while we can argue about the effectiveness of policies where it has control, that it just doesn’t have the financial firepower of the UK Government to raise hundreds of billions in debt through bonds and its own central bank, like the Bank of England, which though independent can provide stimulus through quantitative easing.
So, the real money, which Welsh taxpayers and businesses contribute towards, sits in London.
And while intergovernment discussions take place regularly, there is a Welsh voice right at the heart of the UK Government, in the Secretary of State for Wales. The current holder of the post is MP for Carmarthen West and South Pembrokeshire Simon Hart.
Mr Hart, who took up his role in December, can play a smart game over the next few years, he can, in my view, take the crown of being the most important person in Wales in relation to its economy.
He is a cabinet minister, and yes it’s a crowded table, whose job is the push the case for Wales; granted based on influence with no budget. It could be argued that the political arithmetic is against the Welsh voice being heard in London. However, when the UK Government talks of levelling up the economy, with no real details yet on how this can be achieved and measured, then investment in the ‘north’ has to mean Wales too, which has the unhealthy tag of having not only some of the most disadvantaged communities in the UK, but also in Europe.
The Welsh voice has been drowned out in recent years by the deafening decibels coming from those with sharper elbows in Scotland and Northern Ireland.
The DUP through its confidence and supply arrangement which for a while propped up Theresa May’s disunited minority government, ensured £1bn of additional funding for Northern Ireland.
In Scotland, which receives more per head as a result of the Barnett Formula than Wales, the call for a second referendum just isn’t going to go away, despite Mr Johnson refusing to agree to a second vote.
So, you can see more investment from Westminster flowing north of the border as a price for trying to keep the union together. I am not sure that Celtic bonding would extend to the Scottish Government giving its backing to a more equitable funding arrangement in relation to Wales.
There are also competing calls for increased investment in the English regions which gets significant airtime through high profile mayors like Andy Street for Birmingham and Manchester’s Andy Burnham.
Next year the Senedd Election could see, if latest polls are to be believed, the Tories knocking on the door (or at least being on the driveway leading up the house) of power for the first time since the advent of devolution.
But with a Tory Government in Cardiff, even a minority one propped up by cross-party opposition, and Plaid Cymru might not come to their aid, would this see more funding flowing down the M4?
Well, I am not sure that would necessarily be the case.
That’s why Wales needs, arguably more than it ever has with the economic challenges ahead, an effective Secretary of State influencing and making the case for Wales, not just around the cabinet table, but with senior civil servants and advisers too.
In short, it has be far more meaningful than just patting on its way the latest Barnett Formula consequential for the Welsh Government to decide how to spend it as a result of increased UK Government investment in devolved areas.
Mr Hart needs to be able to articulate a coherent investment and funding pitch for Wales and one that resonates with Mr Johnson and key adviser Dominic Cummings, so that Wales is at the heart of the levelling agenda, regardless of the devolution arrangement.
However, it is not just about new funding, but Wales getting its fair share of what’s already, like getting the UK Government’s economic development bank the British Business Bank to establish an equity fund to invest in Welsh firms and Wales getting a bigger slice of UK Government funding on R&D investment.
London and the south East of England continue to take the lion’s share of R&D funding.