Plaid Cymru MP Ben Lake on what needs to happen for the Welsh economy to recover from the impact of Covid-19
AS WE move from the immediate Covid-19 health crisis to managing its economic repercussions, we must be clear that in this national and global reset we cannot return to business as usual.
Instead, we must use this critical moment to reconfigure our economy to prioritise local economic development and ownership as we attempt to build a more sustainable relationship with the global market.
After a disappointing Budget for Wales in March, the Chancellor will today take to the dispatch box to outline his early vision for the UK’s postCovid economic recovery.
To be even remotely credible, the statement must not only outline measures to support employment across the UK, but also clarify how we will rebuild a more resilient and sustainable economy.
Plaid Cymru and I believe to realise a response built around a local recovery, learning the lessons of the last crisis – which outsourced our economic recovery to distant companies, decision-makers and beneficiaries – will be key.
We would incorporate the need for resilience in our supply chain, recognise the strength of targeted state intervention, and above all appreciate the value of local experience and knowledge in identifying opportunities to get the best value for tax-payers’ money.
After the human tragedy of Covid19 and the sacrifices of lockdown, it would be all too easy to rush to rebuild the pre-Covid economy, mistaking it for a success story that it never was.
In reality the pre-Covid UK economy was in crisis, riven by the worst regional inequality in Europe, hampered by low productivity, and growth which offered little improvement in living standards.
To use the bombastic rhetoric of Number 10, while Westminster believes it has won its war with Covid, in truth we are still on the battlefield.
The key challenges facing the UK economy remain – the need to raise productivity, to improve stagnating living standards, and to transition to a low-carbon economy.
In Wales, Covid-19 has seen Welsh communities rally behind our political institutions even as the UK Prime Minister imposed borders between England and the rest of the British Isles. Wales has come out of this crisis politically more cohesive, but economically precarious.
Our chronically investmentdeprived economy, a situation the Chancellor has so far failed to rectify, is ill-equipped to manage the more damaging aspects of globalisation, and is poised on the precipice with over a quarter of Welsh workers furloughed.
Key sectors like aerospace, car manufacturing, and steel production are in flux as the global economy struggles to steady itself in the wake of Covid-19.
In today’s announcement, the Chancellor is likely to announce welcome measures to support a green recovery and employment, including a green housing scheme and support for our disproportionately affected young workers.
It is, however, a shame that measures in support of the latter have taken so long to emerge, after all, Welsh youth unemployment is already at 12% and has been above the UK average since 2017.
Ultimately, the fault lies in the UK’s highly centralised structure centred in the corridors of Whitehall.
For too long, we have seen a onesize-fits-all approach to economic development which has marginalised whole communities and institutionalised a core-periphery economic model.
Instead, Plaid Cymru wants to make the most of Wales’ comparative strengths.
We would build upon the record and ambitions of Welsh local authorities such as Carmarthenshire and Ceredigion which have championed local procurement strategies as well as methods of local ownership, ranging from renewable energy generation to community buildings.
With my colleague Llyr Gruffydd MS, I have championed a Buy Local campaign for our great food and drink sector, but we need to be even more ambitious for our economy.
This could include using tools such as local sourcing obligations in public tenders, committing to local ownership schemes, and ensuring that green interventions like insulating our homes involves local employers.
The Welsh public pound also needs to go further than the economy of today by supporting innovation which will support our green transition.
With nearly half of UK research and development expenditure centred in London, Oxford and Cambridge, we would support the creation of publicly seeded innovation funds to link our fantastic universities with Welsh businesses so that together they can develop solutions to the challenges of tomorrow.
A recovery that builds back better in partnership with Welsh businesses and communities will also make us more capable partners internationally.
With a stronger and more resilient domestic economy built around local supply chains and ownership, we will be a more cohesive, capable, and purposeful trade partner on the world stage.
Ultimately, this recovery must learn from the past and rebuild from the bottom up to take advantage of the under-utilised wealth of expertise, talent and resources that we have in Wales.
By building a local recovery we can both help drive productivity gains and provide a test-bed for innovation, while also learning from the lessons of the past – and the political realities of the present – to ensure our recovery ushers a lasting, positive legacy for our communities.
■ Ben Lake is MP for Ceredigion