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Tag: Wales
Posted on April 21, 2021 May 26, 2021 by Rhys David
Building a stronger economy is an essential first step writes, Rhys David, in this background paper prepared in June 2020 for the Wales Independence Commission.
Introduction. 3
Faulty Circuits. 5
Lagging Behind. 6
The fiscal gap. 9
Levelling up. 10
A new model 15
Positive and Negative. 18
Wales and the West. 18
Business scale. 20
Welsh strengths and weaknesses. 26
The luck of the Irish. 32
Hard questions. 38
A more business-oriented economy. 39
Building New Connections. 43
Small business support. 45
Private sector resources. 48
Procurement and the Foundational Economy. 49
Smart FDI 51
Reshoring. 53
Exports. 55
Business Intelligence. 56
Capacity. 57
Delivery. 58
Education. 62
Joining the Welsh dots. 66
Can Wales Do it?. 67
Summary and Recommendations. 69
This report sets out to examine why Wales has lagged other parts of the UK and Europe economically and what can be done to rectify this. It is a task that is likely to be more pressing following the damage being inflicted on business and society by the Covid-19 pandemic. Study after study has highlighted Welsh weaknesses – poor productivity, leading to lower levels of output and depressed wage levels, high levels of poverty, disappointing educational performance, and unsatisfactory health outcomes.
The British Government has declared a new willingness to address regional imbalances across the UK and a programme of levelling up measures, including investment in new infrastructure, is promised. This report argues that while this is to the good, a more transforming vision for Wales should be articulated. Wales should not be seen as a perpetually poor relation within an economy dominated by London and the South East and the needs of its financial services industry, but more closely resembling the better balanced economies of other small nations.
Yet, to make moves in this direction it is necessary to understand how far Wales needs to travel. Despite the encouraging growth of new Welsh-owned businesses over recent years, Wales is still a branch plant economy with too few companies owned and controlled from Wales or fully integrated as equal partners in global supply chains. This is in sharp contrast with the Republic of Ireland which in just a few decades has transformed itself into a rich country, home to a host of overseas and especially US companies operating in advanced sectors, and to an impressive cohort of Irish-owned multinationals.
The principal recommendations made at the end of this report are that
The role of the civil service should be re-examined to separate economic policymaking and implementation.
A new agency or agencies should be established to promote small business growth, medium size business development, inward investment, productivity, and export activity.
The extension of state support for key sectors in the form of direct Government stakes should be considered
Greater involvement with the venture capital industry should be sought and a Welsh venture capital trust investing in Welsh start-ups established.
The foundation sector should be put at the centre of policymaking and incentives and penalties to secure greater public sector purchasing put in place.
Support should be given to businesses seeking to re-shore products currently made elsewhere, and further efforts made to ensure Welsh food producers contribute a bigger share of the nation's food purchases.
The Welsh education system should be refocussed on meeting the needs of Wales, and financial and other measures implemented to persuade more students to study in Wales or return to Wales on completing their studies.
Faulty Circuits
In the final section of the report it is argued that a more business-minded approach is needed throughout Welsh society, not unlike that in Ireland, and that new institutions and a new role for Government is needed. Better business intelligence must be at the heart of this and the long-standing debate over the absence of a dedicated agency to deliver these changes needs to be resolved. An economic development body for Wales, similar to those in existence in Scotland, Ireland and most European countries, should be created. This new implementation strategy, taking execution out of the hands of the civil service, should be backed by a greater willingness to use public funds to help shape the Welsh economy so that it best meets Welsh needs and to ensure key sectors grow and thrive.
Wales, for as long as any one of us can remember, has had a weak economy, and to put it bluntly, does not pay its way, raising far less in tax revenue than it consumes – the fiscal gap. Individual studies over time have identified the reasons for the economy's chronic weaknesses as they are seen at the time and have concluded that one or other new technology or strategy will provide an answer.
Foreign direct investment, oil from the Celtic Sea, microtechnology, Japanese just-in-time work practices, technology centres, key sectors, and most recently the wider use of public procurement and the foundational economy have all been called to aid but lasting change capable of elevating Wales from near the bottom of most UK economic league tables – so as to balance its books – has remained a chimaera.
There are indeed successes in growing fields compensating to some extent for weaknesses in other areas. The Welsh Government's 2017 Economic Action Plan (EAP) states grandly that Wales is home to some of the most innovative, dynamic and exciting economic activity anywhere in the world: world-class centres of aerospace engineering and nuclear energy in the north; cutting-edge metallics innovation, marine technology and automotive production in the south; award- winning food producers in rural Wales.
Cardiff University has carved out a strong position in medical research and the city is home to a growing fintech sector. An encouraging number of health-related companies have set up shop in Wales, too, including several that are playing a prominent part in the fight against Coronavirus. Swansea University has developed a range of partnerships with international businesses. Newport has an important semi-conductor industry.
Our two most westerly ports, Milford Haven and Holyhead have established themselves modestly in the cruise ship sector, bringing tourists to enjoy the benefits of improved visitor facilities. Wrexham and Deeside have become modern manufacturing centres well integrated into the UK and international economy.
Welsh Government admits, however, to the extent of the problems: Wales has to face the challenges of deindustrialisation; economic inactivity; unstable and insecure employment; productivity that lags behind the rest of the UK; accelerating technological change; slow diffusion of innovation; costly sickness and in-work illness rates and the challenge of an ageing population. To these can now be added recovery from the Covid-19 pandemic.
The underlying causes have been regularly identified: the loss of many of its brightest individuals, who choose to study in England and never return, part of a broader brain drain affecting England's regions, too, into London and the south east; the regular absorption into larger businesses elsewhere of successful Welsh start-ups and medium size companies, hindering the development of a balanced, and locally owned and managed business economy; the continued underfunding of Welsh infrastructure and other projects because of a Treasury bias towards more heavily populated regions.
Globalisation has had a damaging effect on the least skilled everywhere, enabling their jobs to be exported, or cheaper labour to be imported. It has brought benefits, but these have gone disproportionately to the better-off, perhaps the most important reason for the election of populist leaders in the US and elsewhere and the Brexit vote in the UK.
In Wales it is necessary to look no further than Swansea to see its impact. The entrance into the city from the east used to pass motor industry, engineering and aluminium plants offering skilled and well-paid engineering jobs. Now it is lower-skilled shelf-picking for Amazon, (admittedly adjoining large scale new university facilities). Call centres, valuable as they are as sources of employment, have replaced – with lower wage levels – more satisfying and fulfilling jobs in manufacturing.
Lagging Behind
Against this background output per person in Wales has continued to lag the rest of the UK, which itself has a poor record in comparison with competitor nations, as a recent report from Cardiff Metropolitan University, pointed out.[1] This painted a worrying picture of Gross Value Added per unit of labour, making Wales the weakest of all UK regions and 18 points behind the average for the UK. (The strongest region, London was 40 points above the UK figure.)
The explanation lies in part in the 21st century structure of the Welsh Economy. Much of Welsh business is not just micro, but positively nano in size, where gains in productivity are particularly hard to find.[2] There are too few medium size firms and a decreasing number of large companies as foreign firms have left for lower cost locations. Much Foreign Direct Investment (FDI) has also been branch manufacturing with limited local senior management roles, and answerable to decision-making regional headquarters elsewhere in the UK (or the rest of Europe). Such was the case in the coal and steel era, too.
Table 1. Gross domestic product by UK constituent country and region 2018.
Regions Population Total GDP (£bn.) GDP per head (£)
UK 66.4 2,140.3 31,976
England 55.9 1.84 32,857
North East 2.66 62.6 23,569
North West 7.29 207.4 28,449
Yorks. & Humberside 5.47 141.7 25,859
East Midlands 4.8 124.6 25,946
West Midlands 5.9 159.8 27,087
East of England 6.2 186.4 30,069
London 8.9 487.1 54,686
South East 9.13 311.3 34,083
South West 5.59 158.1 28,232
Wales 3.13 74.9 23,866
Scotland 5.44 161.3 29,660
Northern Ireland 1.88 48.9 25,981
Source: ONS
FDI brings the biggest benefits when accompanied by management and other higher-level functions such as research and development activities and this has generally not happened in Wales. Even if firms with these characteristics move on, there is a much better chance they will leave behind individuals with the knowledge and expertise to start companies in similar or different fields than if the plant has simply been a branch factory.
Percolation through to Welsh businesses of productivity lessons – one of the original hopes pinned on the capture of such firms for the Welsh economy – has therefore, perhaps understandably, rarely happened. Improvements created elsewhere are unlikely to create or drive an innovative culture that will then spread beyond the recipient organisation.
Poorer regions, such as Wales, have a bias anyway towards lower productivity, creating a vicious circle that is hard to break. Individuals will understandably protect themselves in areas where jobs are most scarce, clinging on often for little reward in unviable retail or other businesses, taking market share and profitability from competitors.
Geography, too, is partly responsible for the gap with comparable public services in richer parts of Britain. Transport for Wales can never hope to match the productivity of the commuter train services to London with their much higher passenger numbers. There are other factors which add to the complexity of the problem, for example the balance of sectors within an economy and the shares respectively of the public and private sectors.[3]
Yet, the importance of securing increases in Welsh productivity cannot be under-estimated. Projections show a decline in the numbers of young people entering the working population over the next few decade, so productivity will have to increase merely to maintain current levels of output.[4]
As if these structural weaknesses were not enough a deep recession seems likely after the Covid 19-induced partial cessation of production and consumption across the world in the first few months of 2020. Scary levels of employment loss have been suggested if companies find it impossible to resume operations after months with little revenue. The hit to incomes will impact consumer spending, adding to the problems facing business.
This is even before the challenges of reacting to global warming and moving to a low-carbon economy are considered. The world economy and that of virtually every country within it, including Wales, will be fundamentally changed. Government debt levels have rocketed increasing the burden of debt servicing if, and when, interest rates rise from current historically low levels. A share of this burden will be attributed to Wales, pushing yet further the gap between tax raised in Wales and spending.
It is tempting to say that these problems are inexorable. Welsh people (like their counterparts in most of the English regions), the argument runs, are fortunate to enjoy the benefits of funding from the taxation surplus generated in the south east (and until Brexit from EU finding). Higher tax receipts garnered in London and the South East of England. provide the money for public services, such as health and welfare benefits. These ensure that, despite lower income levels resulting in lower tax revenues, Welsh people enjoy the same level of public services as the rest of Britain.
The fiscal gap
Yet, the size of Wales's deficit is not pre-ordained and is larger than a self-respecting nation should accept as inevitable.[5] In 2018-19, according to the Cardiff University fiscal analysis report, the gap between public spending revenues from Wales and public spending for Wales stood at £13.5bn, equal to 18 per cent of total Welsh gross domestic product or £4,300 per head.[6] Even before Covid-19 and its attendant costs, the resources likely to be made available in the future were not likely to be on the scale needed to transform the Welsh economy, the academics point out, leading possibly to a widening of the gap.[7]
An incipient understanding of this hard reality has resulted in the previously unthinkable beginning to be thought. If Wales is trapped in dependence as part of the union then why not a complete break? If Scotland can consider such a move, then why not Wales? A sharp shock, the marchers on Wales's 2019 independence rallies were perhaps thinking, might hurt but also might lead over the longer term to a healthier independent nation. The question why not has also begun to be asked more widely, including in a recent article in ClickonWales by the main thinker behind plans for the South Wales Metro.[8] Others have seen in the differing responses from Cardiff and Westminster to the Covid-19 crisis evidence that Wales and England are moving apart anyway.
Constitutional debate is taking place in some quarters in Wales even if this has not been noticed yet across the border. Whatever choices are made, however, there is a mountain to climb if Wales is to reduce its current financial dependence. Taxation changes are perilous with unforeseeable consequences whether a choice is made to reduce or increase the burden on individuals and corporations.
The burden of tax in Britain already falls principally on the wealthy, the income tax threshold at which tax starts now standing at £12,500, hence excluding in poorer regions a greater proportion of the population, who will also find themselves less likely to be drawn into the National Insurance net. Though there can be arguments about whether the rich should be taxed more, the system is already progressive, the share increasing as incomes rise. Exacting higher taxes from the wealthy few in Wales would not raise large sums and could act as a disincentive.
Changes to corporation taxes to try to raise more funds are also problematic. The argument for a lower rate in Wales in a bid to drive up corporate activity and profitability has been advanced but the risk that businesses would relocate for this purpose alone, depressing overall revenues, suggests UK Governments would not sanction it. Increases would be counterproductive.
The reality is that unless more people in Wales are drawn into higher income bands, income tax cannot raise substantial extra funds in Wales and help to narrow the country's dependence on resources from outside or make independence a comfortable prospect. Nor will the corporate sector generate significant extra funding unless it increases in size and profitability.
To close the gap between the revenues raised in Wales and the amount spent, the Welsh economy has to grow faster than that of the rest of the UK for a sustained period – generating higher wages and profits – something it has not achieved except for a brief period in the 1950s when male (though not female) full-time employment was high, and demand from the post-war rebuilding of the UK economy and the growth in vehicle ownership and white goods resulted in high levels of demand for coal, steel, and other products.
Levelling up
The commitment the recently-elected Westminster Government has made to levelling up the UK offers some hope that the structural needs of the regional and national economies outside London are going to be addressed with appropriate levels of funding through the new Shared Prosperity Fund – the replacement for EU regional programmes, including Objective One.
The current British model dates to the 1980s when Prime Minister Margaret Thatcher, admittedly in response to severe labour market inflexibilities of the time, and strongly influenced by her Trade Secretary and economic guru, Sir Keith Joseph, chose the free market ideas of the Chicago School monetarists as their principal guiding light. The succeeding decades saw Government gamble on the benefits of growth in the richer financial sector orientated parts of the UK trickling out to the regions.
The policy of the previous four decades, which had seen the use of a variety of sticks and carrots to encourage industry and services to locate in the regions outside London, was dropped. EU funding, much of it directed towards infrastructure improvement, was to undertake the heavy lifting required to raise prosperity levels in the poorer parts of the UK.
The assumption was that rising prices for land, housing, transport, and other services would lead to overspill elsewhere, as companies and individuals moved away in search of lower costs. Instead, the overheating effects on London costs have been offset by increased spending on transport provision, greatly extending London's labour market reach into neighbouring regions, and by large increases in compensatory rewards to professionals in financial and other higher value services.
The phasing out of a previously more active regional policy, a laissez-fair attitude towards the shift of manufacturing to low cost countries and a willingness to allow ownership of UK companies to be transferred to consolidating overseas multinationals has consequently widened the gap between regions.
The results for Wales have been another loss of jobs as serious in some ways as the fall in mining employment in previous decades. The departure from Wales of large scale, multinational companies, such as Alcan, Alcoa, BP, ICI, DuPont, Bosch, Exxon, Amoco, Ford, and RTZ by late 2019 and down-sizing by others such as Sony and Panasonic, have changed the composition of the Welsh industrial base.
Unlike in other countries that have sought to retain domestic ownership, Wales and other regions has had no protection when multi-nationals have moved, in pursuit of lower costs or greater incentives. As a result, fewer people are now employed in companies with more than 1,000 staff and many more in smaller companies and micro companies employing just 1-5 people.
This has had a knock-on effect on the quality of jobs, the availability of training, the introduction of new ideas and technologies, the development of a supporting supplier base, career progression, and the availability of full-time and permanent employment, all of which can be offered more efficiently by larger companies even though numbers in work in Wales and in female employment – much of it in part-time and/or precarious self-employment -have shown increases in recent years.
It also diminishes the revenue capable of being raised in Wales as smaller companies, because of lack of scale, will generally be less profitable than their counterparts. A separate side-effect is that in the absence of any defences and the inadequate provision of safeguards Welsh businesses are more liable to capture by bigger competitors and less able to engage in take-over activity themselves or mount export campaigns.
The UK Government's apparent tilt back towards the policies long championed by Conservative grandee and former Cabinet minister Michael Heseltine, and by One Nation Conservatives in the post-war era, is all to the good, yet a danger also lies herein. The process promised is being seen mainly as a way of revitalising the north of England. Wales, the South West, the East are rarely part of this new conversation, despite in some cases having equal or even greater needs. HS2 is intended to transform the Midlands and the north. it will be accompanied by other infrastructure spending on an upgraded east west rail link, one of the demands being made with increasing insistence and effectiveness by the region's mayors.
A report last year, chaired by the former head of the civil service, Lord Kerslake, outlined a series of measures to deal with what it described as a problem that had persisted for the past 50 years. Suggestions included a new spatial plan for England, and Parliamentary committees and Cabinet positions which recognise and respond to the Powerhouse projects in the North, the Midlands, the South West and South East.[9] Twenty years after devolution new powerfully endowed regional institutions and voices are therefore emerging in England which could be allies but also rivals to Wales for levelling investment.
HS2, with its £100bn and rising price tag may come back under consideration, given the other priorities the Government will have and the vast sums that are having to be deployed in the fight against Coronavirus and in recovery. If it does proceed, however – and the Government confirmed in April 2020 that the first phase to Birmingham would – the boost it will provide across central England could be a negative for Wales, which could become less competitive as a location for investment as a result. The UK Government must be pressed hard to ensure the full consequential of such expenditure is made available in additional regional support finance to enable Wales to continue to invest in its own infrastructure networks, whether road rail or telecommunications.
It will be some months before the shape of the post Covid-19 recovery – a V-shape, straight down and back up again, or a U-shape – possibly a bath shaped U with a prolonged bumping along the bottom as others fear – becomes clear. This will determine how much will be spent on the levelling up programme and over what length of time. Covid-19 recovery Budgets will be forthcoming from the Treasury this year. These will also determine how much will be made available in general funding to Wales.
Whatever shape the recovery takes, the stock of companies in Wales is likely to be affected adversely, with many weaker businesses not surviving. The encouraging growth in activity levels – the proportion of individuals drawn into the labour force – seems likely to be reversed, leading to a return to high levels of unemployment.
How well is Wales prepared to meet the challenge within the scope of the powers available to Welsh Government? In the twenty years since devolution, strategies have come and gone. Policymaking has often been piecemeal, inconsistent, and subject to change, the opposite of the stability which businesses require.
Execution, previously the responsibility of agencies – the Welsh Development Agency (WDA) for industrial development, and the Wales Tourist Board for tourism – has been brought in-house into the civil service, the tasks of promoting Wales abroad being passed to Wales Trade and Industry and of supporting economic development domestically to Business Wales.
This break with the previous system – counter to the arrangements prevailing in many competitor territories, including Ireland and Scotland, where an agency approach has been retained – has been much criticised and the demise of the WDA much lamented by some critics.
Even more importantly, however, policy has continued to address symptoms rather than causes. A break with the past is clearly needed and an effort made to go further back to the root causes of economic weakness, and hence Wales's seemingly unbridgeable fiscal gap.
The emphasis of the past decade has been on supporting sectors: life sciences; financial services; creative industries; energy and environment; advanced materials and manufacturing; and information technology, overseen by sector panels consisting of representatives of the sectors chosen. The industries concerned – because they were in the sectors with the best prospects anyway – have generally prospered but were likely to have done so regardless
The Welsh Government recast its approach to economic policy three years ago. Sectors have not been ditched but its new 2017 Economic Action Plan envisaged a return to a more spatially-based policy – the main thrust of UK regional development efforts for several decades after World War Two until the introduction of more free market policies in the 1980s.
Support is based around three national thematic sectors, plus foundation sectors, to be delivered in conjunction with a new economic contract to be negotiated with business. This is topped by a new division of Wales into three regions, led by chief regional officers.[10]
Key strategic areas of the economy, broadly defined as tradeable services (such as fintech and online insurance), high value manufacturing (examples being compound semi-conductor manufacturing and composites), and enablers (digital, energy efficiency and renewables) will qualify for support within the new regional framework
Decarbonisation, automation, artificial intelligence, and other forms of digitalisation are transforming industries and individual firms, Welsh Government argues, and breaking down the traditional boundaries between different sectors of the economy. At the same time, the opportunities of the data revolution are increasingly driving new collaborations across sectors. The aim will therefore be to re-base support in a way that can help build the industries of the future.
To answer criticisms of the narrowness of the previous canvas "foundation sectors" – care, tourism, food, and retail – have been added into the "strategic areas" listed above. The laudable intention is to embrace parts of the economy where large numbers are employed and which are spread across Wales, including in some of the poorest rural areas.
Through support and partnerships in these areas, Welsh Government hopes the new structure will help small and often fragile enterprises embedded in local communities to increase their productivity, encourage skills progression, and develop more sustainable business models.
There is much to support in this new approach, but the complexity of the delivery arrangements seems to shout red tape. In return for investment and other services provided, businesses will be expected to commit to an economic contract stipulating that they will contribute to Welsh Government objectives. In return for funding they will be obliged to sign up to at least one of five calls to action – decarbonisation; innovation, entrepreneurship and headquarters; export and trade; high quality employment, skills development and fair work; R&D, and automation and digitisation.
The new structure is intermediated through three new regions – North Wales, Mid and South West Wales and South East Wales – headed by three chief regional officers. These regions bear no relation to any existing regional, or local government boundaries or to the new city regions. It is hard to see what holds together a region such as Mid and South West Wales which extends from Fishguard across to Swansea, up to Aberystwyth and on north through the Cambrian Mountains and the Severn Valley to the borders of Wrexham county borough.[11]
Faced with the complexities of this sort it is a fair bet that many businesses, including those with the best growth prospects, will give the initiatives a wide berth and continue to plough a separate furrow. It also fails to offer goals or indicate how the plan will be delivered. In a section entitled How will this work? new ideas are nearly all introduced with the words "We will…" but in only one such sentence is followed by the key word "deliver", and it remains unclear exactly how execution and implementation will be achieved.
A new model
Yet, even if these bureaucratic issues can be overcome, only an optimist would now confidently predict Wales is on the path towards closing the gap with the more prosperous regions of the United Kingdom. So, is now the time to go further and suggest that Wales wants to be a different kind of nation from the prevailing British state, overwhelmingly dominated by London-based services (and especially financial services)? This is a specialisation that works well for London and the south east but clearly not for most of the rest of the country.
A different and broader perspective on Wales' economy that illuminates the chronic problems – leading not just to a large but possibly growing Covid-19 induced fiscal deficit – needs to be articulated. A fuller debate on independence, or other new federal or con-federal arrangements has begun, especially after the immense shock – equivalent to war in many respects – that Covid-19 is delivering to society.
The fate of the idea in the current climate is hard to determine. The public across Britain may see safety in being part of the wider British state because it has the resources to weather such a storm as well as the research needed to provide vaccines or a cure. Equally, many in Wales might conclude that if one of the poorest countries in the EU, Greece, can emerge with one of the lowest death rates, big is not necessarily beautiful.
Whichever is the case a commitment to creating a different Wales, even within the United Kingdom, should be one that will have resonance with large sections of the population. A report for the Scottish Government published in 2018 called for just such an approach, though outside the UK. [12] It pronounced the UK economic model to be wrong for Scotland, claiming policies that led to a concentration of economic activity in London and the South East, low wages, and a large gap between rich and poor could only depress growth and opportunity elsewhere.
It argued instead for a new direction built around good governance, long term cross-partisan strategy, innovation, international investment, exploitation of resources and export-orientation. The arguments are the same for Wales but the mechanisms for achieving them need overhaul or replacement.
As developed since the "Big Bang" opening of the City of London to international ownership in 1987 Britain's largely foreign-owned financial sector has exhibited a much greater interest in raising funds for global companies and governments, and in acting as the world's principal foreign exchange clearing house than in supporting the domestic economy.[13]
The needs of Wales or any other British region have not figured prominently on the agenda at City meetings, and incentives to make this happen do not exist. By contrast, the smaller nations which Wales might aspire to have as its model have not only grown to overtake Wales in wealth since World War Two but are happier as well.
Wales should make clear it is not prospering as it would wish in a UK service-dominated economy in which a disproportionate share of national wealth is generated by an internationally-orientated financial services sector, substantially based in one region, and dependent on vast and ongoing infrastructure spending to bring its workers in from up to an hour or more away in suburbs around London. Within or without the UK, Wales should stake a claim to be different, economically, and socially more equal, and be more insistent in its demand for resources to secure this.
Chronic weaknesses suggest Wales needs a new route out and must use whatever means or policies it can, to develop the more advanced and better-balanced economies that, for example, Ireland and the smaller Scandinavian countries, have created. The group of small nations and regions offering models to which Wales might aspire enjoys a much healthier balance between manufacturing, agriculture, services, and educational activities. They are also much more successful exporting economies, more fully integrated into world supply chains than most of Welsh business. Much smaller gaps exist between the rich and the poor in populations that are much wealthier than Wales. They benefit, too, from strong social cohesion.
They have grown to overtake Wales in wealth since World War Two but are also among the happiest of nations. The recent World Happiness Report, using GDP, income, life expectancy, social support, and freedom from corruption as measures, put Finland (population 5.4m) in top place for the third year running, and it was joined by other smaller countries Denmark 5.7m, Switzerland 8.6m, Iceland 0.34m, and Norway 5.7m in the next four places.[14]
Moderate social democratic systems and policies as practised in Scandinavia, including higher tax and social security spending, are much better aligned, too, with historic Welsh sensitivities than the current centrifugal left and right policies that are the main offerings in Britain.
Positive and Negative
Wales is often compared with the North East England and Northern Ireland, other relatively poor regions of the UK.[15] Yet this habitual linkage is in danger of offering Wales too comfortable a set of comparisons. Wales will sometimes do worse than its fellow-laggards and sometimes better but there is almost a sense of re-assurance that by and large all three remain locked together in their basement status with none capable of advancing to greater prosperity vis à vis the rest of the UK.
In many ways the other two regions have as many differences from Wales as similarities and do not offer what could be a more revealing comparison of Welsh performance. Northern Ireland has a smaller population (roughly half that of Wales), is separated by sea from the rest of the United Kingdom and has a history and politics shaped by sectarian division. It also has a different industrial history, not shaped by coal or steel but by shipbuilding, engineering and textiles, especially linen.
The North East shares much of Wales's industrial heritage as an important coal and steelmaking centre but has also had other staples, such as shipbuilding and boiler making, both absent from Wales. Following investment several decades ago by Japanese carmaker Nissan, the English region has a significant car components and assembly sector. It is geographically different (largely flat) and, to some extent, climatically different (drier and colder) and has neither the heavily indented coastline nor the mountainous nature of Wales. It is further from the south east of England, close to northern Europe across the North Sea and has an even greater share of its population concentrated in two cities and one town along a narrow stretch of coastline.
Wales and the West
There is another much closer region, and in competition with Wales, with which it is rarely compared. The South West (population 5.5m.) shares a west facing attitude, a long, in places rocky and indented coastline, and a similar climate.[16] There are other likenesses that suggest the two regions ought to be broadly comparable or at least more often compared. They are home to large number of retired people and others who have migrated in to lead the quieter life that less densely populated areas can offer. Much of Britain's military infrastructure is in these two parts of the UK: Army training on Salisbury Plain and in the Brecon Beacons, and large defence manufacturers in Bristol, Somerset, and Gloucestershire and in south-east Wales.
The aviation industry is important to both economies. They are home to engineering and food processing and have significant agricultural sectors with an emphasis on dairy and sheep farming, and are heavily dependent, especially in their more westerly parts on tourism.
They have also had areas – West Wales and the Valleys, and Cornwall – that have qualified for EU Objective One support to redress ongoing poverty. Both have infrastructure deficiencies, areas of the South West – parts of North Somerset and Cornwall – being as devoid of rail connections as some areas of Wales. Motorways in both regions extend only so far and miss western extremities. Rail electrification from London stops short in both, too.
There are also substantial differences. The South West has a population more than two-thirds greater than Wales The West does not share Wales's coal and steel industrial legacy (except to a limited extent in Somerset and the Forest of Dean), and has not had to deal to the same extent with the problem of replacing traditional employment mainstays, apart from mining in Cornwall, or, in the case of Plymouth, reduced naval operations.
It also has big population centres in Plymouth, Exeter, Bath, Gloucester, Cheltenham, Bournemouth, Poole, Swindon, and Bristol, plus smaller but still medium-sized market towns, such as Taunton, Devizes, and Salisbury. As such, it enjoys some scale benefits that are not available to Wales, which possesses just four cities and towns of any magnitude. The easternmost parts of the South West also have the advantage of being contiguous with the richer south-east and enjoying shorter travel times to London, forming a part of its wider economy as a result.
Bristol has also long housed a bigger financial and professional services sector than Cardiff, which to some extent also serves the south Wales market, as well as more significant IT and high technology sectors. The West of England's capital, too, by virtue of its advantageous crossroads position on the motorway and rail network (and bigger population than Cardiff) has established itself as the main transport and distribution hub for south west Britain, securing a lead it will now be hard for its Welsh rival to rein in.
Its airport, which until a few decades ago had roughly similar passenger numbers, has begun, as a result of low-cost airlines basing their regional operations there, to dwarf its Welsh rival, climbing to 8m passengers a year, more than four times Cardiff Airport's total. Many of those using the airport travel across the Severn Bridge to take advantage of a much wider range of destinations.
Nevertheless, the similarities between the two areas are enough for it to be important to try to understand why one side of the Severn has prospered while the other has lagged. Why did one achieve a gross domestic product of £28,231, sixth among UK economic planning regions, whereas Wales was in 10th place ahead of only the North East on £23,866?[17]
Table 1. UK Regional GDP 2018
Total GDP £bn GDP per head £ Population m. Rank
UK 2,140.3 31,976 66.4 –
Wales 74.9 23,866 3.1 10
England 1,839.3 32,857 55.9 –
-North East 62.6 23,569 2.7 11
-North West 207.4 28,449 7.3 5
-Yorks. & Humb. 141.7 25,859 5.5 9
-East Midlands 124.6 25,946 4.8 8
-West Midlands 159.8 27,087 5.9 5
-East of England 186.4 30,069 6.2 3
-London 487.1 54,686 8.9 1
-South East 311.3 34,083 9.1 2
-South West 158.1 28,231 5.6 6
Scotland 161.3 29,660 5.4 4
Northern Ireland 48.9 25,981 1.9 7
Business scale
The annual top company listings for Wales and South West England from publisher, Business Insider, provides some clues. The tables and commentary that follow do not make comfortable reading for Welsh people proud of the country's place in industrial history, but they demonstrate just how far Wales has retreated in economic importance, and as such are an indicator of the task ahead if Wales is to grow in line with other more prosperous regions as an advanced industrial economy offering a high standard of living to its inhabitants.
There are some caveats. The Business Insider rankings use a formula that combines turnover and profit to rank companies. As a result, some companies that are going through less profitable times appear lower down the list than their turnover would imply. Dwr Cymru and Deeside food retailer Iceland both fail to appear in the Insider's top 50 because profits in the year under review were low, even though turnover alone would place them in the top 10.[18]
Insider also only lists companies where these figures are broken out for the region concerned. Others that offer consolidated figures are absent – notably in Wales Indian-owned Tata Steel, Toyota's engine plant and Franco-German-Spanish partnership, Airbus (which is listed through its UK headquarters in Bristol). There will also be omissions from the South West list for similar reasons, so the figures present an incomplete but nevertheless broadly equivalent picture of both economies.
As Table 2 shows, however, a wide disparity exists between the size of companies in the two regions. The South West's biggest company is a tobacco and related products multinational, Imperial Brands. It had a worldwide turnover of more than £30bn in its most recent financial year (albeit not in a sector which enjoys general approval). Wales's standard-bearers, Iceland and its only FTSE 100 company, Admiral Insurance, posted much more modest turnover – £3.01bn and £2.53bn, respectively. The South West is also home to no fewer than three more £5bn plus companies, five with a turnover of between £2bn and £5bn and 13 between £1bn and £2bn.
In Wales Admiral and Iceland are followed in size by GE Aircraft Engine Services as the only other £2bn plus company and by Redrow (£1.9bn ) but the drop is then precipitate to two companies with a turnover of between £500m and £1bn (Calsonic and Dow Silicones). A further 24 Welsh businesses within the top 300 report turnover between £200m and £500m, making them substantial but still by international standards modest. In the South West list 12 companies in just the Top 100 have a turnover of between £500m and £1bn and 27 are in the next tier from £200m – £500m
Table 2. Top 20 Companies: Wales and South West
Wales £m Turn-over £m Profit South West of England £m Turn-over £m Profit
1 Admiral 2528 476.2 Imperial Brands 30,524 1823
2 Redrow 1920 380 Nationwide 5.590 833
3 GE Aircraft Services 2383 138.3 Dyson James 4.401 750
4 Wales & West Gas 425 99.5 Sensata Technologies 2773 428.5
5 Moneysupermarket.com 329.7 96.1 Intel Corp 5257 180.6
6 Calsonic Kansei 805.7 18.9 Western Power Distr. 1685 733.2
7 First Hydro 266.48 72.2 Meggitt 2080 216.1
8 Kingspan 351.8 39.7 Merlin Entertainment 1688 285
9 Watkin Jones 301.9 43.3 EDF Energy Nuclear 2446 158
10 Ipsen Biopharm 267.8 52.5 Pennon 1478 260.3
11 Orthoclinical Diagnostics 245.9 54.9 Screwfix[19] 1683 170.1
12 Dow Silicones 518.2 13.6 Spirax Sarco 1153 288.8
13 SPTS Technologies 204.7 69.7 AES Overseas 905.4 319
14 Principality Building Society 233.2 40.7 Cobham 1863 71
15 Vauxhall Finance 184.9 36.6 WH Smith 1262 134
16 Convatec 167.1 43.1 Allstar Bus. Solutions 1852 70.1
17 Day's Property Holdings 210.1 7.1 Zurich Assurance 1013 190
18 Huws Gray 182.7 25.3 Mitie 2221 36.4
19 GoCompare 149.2 34.9 Norton 942.7 74.4
20 Kronospan 360.8 8.8 Arval UK 1132 60.6
Source: Business Insider/Rhys David
Table 3. Turnover at different points in the list
Position In List Wales £m Turn-over £m Profit South West of England £m Turn-over £m Profit
50 MVH 95.6 7.1 West UC 186.5 58.1
100 EKF Diagnostics 41.6 4.3 Wainhomes 82.0 17.1
150 Mayr Melnhof Packaging 56.9 1.1 Interfish 53.6 14.5
200 Dauson Environmntal 25.8 2.0 Good Energy 116.9 2.3
250 BECT Building Contractors 27.6 0.8 Teleperformance 49.5 3.1
300 Carl Kammering 17.8 1.5 DCM (Cornwall) 57.6 1.6
Many of the names in the South West top 20 are global or British brands enjoying widespread recognition – the likes of Nationwide Building Society, Dyson, W.H. Smith, McCarthy & Stone, Screwfix Direct, and US-owned Intel. Further down the list other big companies – Honda, C&J Clark, McCarthy & Stone, and others – with a direct link to the consumer are to be found.
Few in the Welsh list have the same visibility, certainly outside Wales: Admiral in little more than 20 years has built a successful UK and European business; and grocery retailer, Iceland (with a turnover of £3bn), and washroom and hygiene services provider PHS £262m) are omnipresent across much of Britain.
The two Welsh-based builders, Redrow and Watkin Jones operate across England and Wales; Welsh-based companies, such as Castell Howell and Wynnstay have built up operations beyond Wales; there has been UK-wide success in comparison websites (GoCompare, Moneysupermarket.com and Confused.com); JoJoMamanBebe flies the flag in general retail.[20] Beyond these, however, examples are hard to find.
Iceland excepted, there is no Welsh Greggs (from the North East), Morrisons, (Yorkshire), Next (East Midlands) or Stagecoach (Scotland) to name only a few regionally based UK companies with a big national footprint. This absence of Welsh brands with a big market presence is, as a report by academics for the IWA in 2015 noted, quite striking.[21]
The disparity in the size and scope of Welsh and South West businesses is also reflected in public listings (Table 4). Only 16 companies in Wales are listed, five on the main London Stock Exchange and a further eleven on the junior market, Aim, the smallest number for some time.
Only two companies, Brickability in Bridgend, and Diurnal, the Cardiff pharmaceuticals group, have joined Aim in the past year, replacing Amerisur Resources, the Cardiff-based oil exploration company acquired by Latin American company Geopark, and Dee Valley Water, taken over by Severn Trent Water.
Imperial Brands with a market capitalisation at the time of writing of around £20bn has a higher value than all Welsh quoted companies together, and Admiral – market capitalisation around £8bn – exceeds the combined total of all other Welsh listed firms.
Table 4. Listed Companies South West and Wales
South West (Top 100 companies only) Wales (All companies)
LSE AIM LSE AIM
Imperial Brands Wincanton Admiral Watkin Jones
Pennon Hargreaves Lansdown Redrow Wynnstay
Screwfix Direct* McCarthy & Stone Money-supermarket IQE
Spirax-Sarco Mears Finsbury Food
WHSmith Redde Northgate EKF Diagnostics
Mitie Amigo Diurnal
Rotork Avon Rubber Brickability
First Great Western* Bristol Water
Renishaw Ecclesiast. Insurance
Curtis Banks
Gooch & Housego
Cambria Automobiles
There are other important differences. The representation of companies in modern sectors and especially those close to consumers is much stronger in the South West list than in Wales (Table 5). Retail is represented by shoe company C&J Clark, clothiers Superdry, Steinhoff (the firm behind Poundland, Harveys Furniture, Benson for Beds, Pep & Co, and Sleepmasters), and fashion accessories group Mulberry, and food and drink by Neal's Yard, Yeo Valley, Wyke Farms and vintners Matthew Clark Bibendum among others.
The region is the base, too, for leading investment platform, Hargreaves Lansdown, and investment advisers St. James's Place; for other financial services businesses involved in motor leasing (Arval owned by BNP Paribas and Allstar, a subsidiary of Fleetcor of the US); insurance multinational Zurich Assurance, and various investment companies and financial operators not included in the list such as US share registrars, Computershare.
The prominence these service sectors enjoy across the region is important. They support a local ecology of jobs and professions, from designers, marketeers, logistics and distribution specialists, and information technology companies to shopfitters. Higher level financial services, such as investment management, offer high wage employment to talented and skilled graduate employees, able to analyse company performance worldwide and to construct and market portfolios to customers.
Table 5. Wales and the South West's Top 50 business activities
Sector Wales South West
Engineering, Steel Calsonic Kansei, Celsa, Liberty Steel, Ifor Williams Trailers, Cequent Dyson James[22], Spirax Sarco, Rotork, Renishaw, Honda
Other Manufacturing Kingspan, Dow Silicones, Kronospan, GS Yuasa, Notemachine, Advanced Elastomer Systems, Wepa, Panasonic, IG Design, Nice-Pak, Premier Forest Group, Seda. C& J Clark, Norbord, Etex, Corialis
Transport, Distribution First Great Western, Wincanton, Redde Northgate
Defence, Aviation GE Aircraft Engine Services, British Airways. General Dynamics, British Airways Engineering[23] Meggitt, Cobham, Safran Landing Systems, Devonport Royal Dockyard, GE Aviation Systems
Technology SPTS Technologies, IQE, Newport Wafer Fab Sensata, Intel
Health, Pharma, Life Sciences Ipsen Biopharm, Orthoclinical Diagnostics, Convatec, Qioptic Pantheon UK, Accord-UK.
Construction Redrow, Watkin Jones, G. Walters (Holdings)
Utilities, Oil & Gas Wales & West Gas Networks, First Hydro, Dragon LNG, South Hook LNG Terminal. Western Power Distribution, EDF Energy Nuclear Generation, Pennon, Wessex Water, Magnox
Financial Services Admiral, Moneysupermarket.com, Principality Building Society, Vauxhall Finance, GoCompare, Nationwide, Allstar Business Solutions, Zurich Assurance, Arval, Hargreaves Lansdown, Amigo, ALD Automotive, Openwork
Investment, Property Bailey Family Investments, Gwent Holdings, Shaw Healthcare, MVH AES Overseas, Mears, McCarthy & Stone, Norton, Richmond
Outsourcing Mitie, Aspire Defence
Food & Drink, Tobacco Finsbury Food Imperial Brands, Nutricia, Wrigley
Leisure, Media Swansea City FC, Travelbag Merlin Entertainments
Retail, Wholesale Day's Property Holdings, Huws Gray, Wynnstay, Sinclair Motor Holdings, Brotech, Ralawise, Screwifx, WHSmith, Lush Cosmetics, Key West
The same will be true of headquartered companies. Both listed and privately held companies in the South West will generate a demand for the professional services of lawyers, accountants, management consultants, marketing and personnel specialists, and in the case of manufacturing, for transport, logistics and many other services as well, all of which help sustain a thriving, mixed local economy.
With this strong business framework in existence the South West of England has unsurprisingly become the location of choice for the headquarters in south west Britain as a whole of utility companies, including Magnox, Western Power Distribution, Ovo, EDF Energy Solutions, as well as hosting three regional water companies, Wessex Water, Pennon and Bristol Water.
It also has strengths in advanced modern manufacturing, especially aviation and defence, through Airbus, French-owned Safran, Italian-owned Agusta-Westland, Babcock (operator of the Royal Dockyard in Devonport), Meggitt and Cobham, and in engineering (Renishaw) with accompanying senior management roles in most cases. Because of its strong position as a military supplier the region also benefits from strong flows of Government research and development funding. The South West of England also houses the Government Communications Headquarters (GCHQ), a big employer of skilled analysts and support staff in IT and elsewhere. Such a presence helps to attract other well-qualified people to the area and to engender private sector spin-offs.
Welsh strengths and weaknesses
Wales has a growing strength in some of these modern sectors. The digital economy, for example, is calculated by the Welsh Government to employ about 44,000 people. Technology stars include IQE, the products of which are vital to mobile phones, Newport Wafer Fab, and Israeli-owned semi-conductor manufacturer SPTS Technologies. There is a growing expertise in niche areas such as data security.
The increasingly important health sector is also represented through international companies such as GE Healthcare, Thermo Fisher Scientific, and Siemens, domestic champions such as EKF Diagnostics and a growing number of small start-ups and university spinouts. US-owned OrthoClinical Diagnostics has been building antibody tests for Covid-19.
Much of the sector, however, performs basic manufacturing, and offers less than might be hoped in the way of locally centred senior management or research and development. The world's big pharmaceutical companies since the departure of Parke-Davis and Johnson & Johnson are no longer represented in Wales, and the increasing trend is for these big companies to want to be close to world-class research facilities – the Oxford-London-Cambridge arc in the case of the UK, and similar clusters of expertise elsewhere in Europe.
The Fintech sector has grown, too, notably investment manager, Wealthify, (now majority owned by the Aviva insurance group) challenger bank, Starling, Delio, Amplyfi, and others, to complement the main Welsh financial services companies, Admiral, Principality Building Society and Hodge. There are also substantial financial back office operations – insurance group Legal & General and Lloyds Bank Group especially in Cardiff and Newport. Employment in the main financial services centre in Wales – Cardiff – is dwarfed, however, by the totals in Edinburgh, Manchester, or Bristol.
Across a whole range of modern sectors, therefore, Wales faces a considerable task in increasing its representation and in scaling up its businesses. Representation in modern sectors is at best patchy and often unaccompanied by the higher-level ancillary services that come with international or regional headquarters functions and hence less rooted.
Wales has made some progress in recent years in developing such more "grounded" companies – an important ambition of Welsh Government, and financial and other support is now available through Banc, (the Development Bank of Wales), the big banking groups, accountancy firms and consultants to help such companies with growth, succession planning and other issues. (Table 6)[24]
However, only one third of Wales's top 100 companies can be considered as grounded (and remain constantly vulnerable to acquisition by bigger groups elsewhere), compared with more than half of those in the South West list. Wales also has fewer overseas investors from France, Germany, or the US than the South West but two more from Japan.
Table 6. Top 100 Ownership
Wales No. South West No.
Welsh-grounded 34 South West Grounded 53
Rest of UK 10 Rest of UK 6
United States 18 United States 20
Japan 5 Japan 3
France 3 France 6
Italy 3 –
Germany 2 Germany 4
Luxembourg 5 Switzerland 2
Ireland 3 Belgium 2
India 2 Canada 2
Austria, Belgium, Bermuda, Canada, Denmark, Israel, Jersey, Hong Kong, India, Netherlands, Reunion, Qatar, Singapore, Spain, UAE 1 each Ireland Finland 1 each
Few Welsh companies, too, are large-scale employers, in sharp contrast with the picture fifty years ago in 1970 when the coal industry still employed more than 50,000, steel more than 70,000, and many individual mining and steel sites offered work to thousands. There are still substantial concentrations in a few manufacturing companies – Airbus, Tata, Finsbury Food, Calsonic, Celsa and GE Engine Aircraft Services – but many of the previous biggest employers have left.
The Welsh company with the greatest number of employees is Iceland but most of its workforce is based in England in the company's retail outlets. Other concentrations of employment are found in the service sector in Swansea cleaning group, Solo, Cardiff-based UK care home provider, Shaw, hospitality group Brains and in call centres.
More than a quarter of all Welsh workers, however, are employed in the public sector, in the National Health Service, local government and Government agencies such as DVLA, the Business Statistics Office, and HM Revenue and Customs. By their very nature they will not be seeking to increase employment. Computer technology and artificial intelligence will put downward pressure, too, on the number of jobs such institutions will offer in the future, combined with Government efforts to secure ongoing efficiencies. and cut costs.
Table 7. Wales Big Employers
Top 300 Rank Company Sector No. of Employees Location
259 Iceland Retail 15,634 Flintshire
1 Admiral Financial Services 10,199 Cardiff
261 Glas Cymru Utility 3,837 Merthyr Tydfil
284 PHS Group Retail, Services 3,428 Caerphilly
184 Solo Service Group Retail, Services 3,345 Swansea
45 Shaw Healthcare Property 3,272 Cardiff
274 Pioneer UK Midco Health 3,121 Cardiff
38 Finsbury Food Food 2,988 Cardiff
291 Brains Retail 2,460 Cardiff
2 Redrow Construction 2,308 Flintshire
6 Calsonic Engineering 2,161 Llanelli
293 Safran Seats Manufacturing 2,060 Torfaen
4 Wales & West Gas Networks Utility 1,406 Newport
295 Masco UK Window Manufacturing 1,367 Rhondda
28 Celsa Engineering, Steel 1,249 Cardiff
292 J.H. Leeke Retail 1,201 Rhondda
14 Principality Building Society Financial Services 1,151 Cardiff
3 GE Engine Aircraft Services Defence, Aviation 1,138 Cardiff
25 Wynnstay Retail 1,063 Powys
63 Celtic Manor Retail 1,040 Newport
77 HBL Holdings Leisure 1,021 Conwy
Table 8. Welsh Top Companies Employment by Number of Employees
Employees by number 1-50 51-100 101-500 501-1000 1001-10000 10000 n/a
Number in companies Top 100 3 11 42 30 11 1 2
Top 100-300 1,001 -5000 2001-3000 3001-5,000 5001-10,000 +10,000
Though comparisons are not made here with companies in the South West, it is almost certainly the case that the export propensity and overseas earnings of Welsh businesses is significantly lower as Tables 9 and 10 show. Wales's exports to the EU look impressive and on paper Wales has a higher proportion of its trade with the EU than the rest of Britain. The figures are flattered, however, by a small number of high value products such as the export of wings from Airbus's Flintshire plant to France. Indeed, he bulk of Welsh exports are provided by a small number of big companies such as Airbus, Toyota, and soon-to-depart Ford supplying intermediate goods.
Table 9. Wales Top Exporters
Company Export Sales 2019 £m. Export Sales 2018 £m.
GE Aircraft Engine Services 2087.69 2063.77
Calsonic 164.54 166.6
Ipsen-Biopharm 264.7 173.0
Ortho-Clinical Diagnostics 231.1 191.0
Dow Silicones 421.7 462.8
Convatec 105.7 96.8
Kronospan 110.6 111.4
GS Yuasa 149.4 127.4
Celsa 91.0 81.7
Newport Wafer Fab – 120.0
Liberty Steel 190.8 134.9
Premier Forest Group 65.6 56.3
Panasonic 206.4
Nice-Pak 99.4 111.4
Qioptic 62.23 49.7
Ifor Williams Trailers 74.02 –
Cequent 120.1 124.0
Hexion 59.2 42.9
Biomet 90.1 90.8
Aerfin 55.9 57.7
Norgine 63.16 63.01
First Hydro 66.59 52.7
Harris Pye 54.77 59.97
Safran Seats 172.7 161.1
Pioneer Midco 350.24 –
The destinations of Welsh exports (Table 10) suggest some modest successes. Half of Wales's export sales to the Irish Republic, however, come from petroleum products, presumably oil landed at Milford Haven, refined there, and shipped onwards without contributing significantly to Welsh GDP or employment. Altogether a total of 25 companies had export earnings more than £50m but 187 of the Top 300 companies were not engaging in any export activity.
Four products – transport equipment (aircraft wings and seats and vehicle engines predominantly), petroleum, power generating machinery and equipment, and steel – represent more than half of Wales's exports. Medicinal and pharmaceutical products increased by an encouraging 21 per cent between 2018 and 2019 feature in the top ten but food products, another area where a strong Welsh involvement might be expected, do not.
The unpalatable truth is that many of Wales's exports come from sectors that look vulnerable to retrenchment at least, particularly after the pandemic. The impact of Covid-19 on the aviation industry, with demand for flights not expected to return to previous levels until 2023 at the earliest, will affect aircraft orders, as too might departure from the EU, and the Welsh steel industry's future looks precarious if funding from Government is not forthcoming.[25]
Table 10. Wales's main export markets
Country Sales bn 2019 Sales bn 2018 bn Country Sales bn 2019 bn Sales bn 2018 bn
Germany 2.87 3.12 Belgium 541 569
France 2.81 2.68 Spain 464 492
US 2.74 2.44 UAE 463 498
Ireland 1.68 1.51 China 407 379
Netherlands 969 746 Turkey 339 337
Source: Welsh Government/HMRC
Table 11. Wales's main export categories
Product sector 2018 £m 2019 £m
Transport Equipment 4,166 4,207
Petroleum, Petroleum Products 2,226 2,377
Iron & Steel 1,917 2,228
Power Generating Machinery 978 923
Electric Machinery, Apparatus 760 804
Medicinal & Pharmaceutical Products 628 760
Road Vehicles, 594 585
Scientific Apparatus 424 492
Miscellaneous Manufactured Articles 477 435
Chemical Materials & Products 386 427
The switch to electric vehicles – the top two selling cars in the UK in March were electric – does not bode well for Wales's substantial involvement in engines and engine components, or for Aston Martin's car manufacturing operations in St. Athans. Wales is locked into a part of the automotive sector with declining domestic and export opportunities and needs to gain a stake as a participant in one or other of the stages in electric vehicle manufacture or in battery making.[26]
The purpose of these comparisons with the South West and of this analysis of Welsh business scale and constituents is not intended to downplay or disparage the often-heroic efforts of Welsh businesspeople. Different territories have different histories. Bristol has played an important role in the development of the British economy since the 16th century when the city was the second wealthiest (and biggest) after London. It has a history of importing goods such as tobacco, wine and foodstuffs that goes back several centuries and its present pre-eminence in the south west arises out of this legacy. Nevertheless, by examining our neighbouring economy, the length of the road Wales must travel to replicate its success becomes clearer.
Yet, while Wales was much later than Bristol and the South West in becoming a developed economy it still failed to build on the strong global position it had in the late nineteenth and early twentieth century as the then world's energy capital and an exporter to markets across the world. This era did not produce downstream industries or service sectors alongside the dominant coal and steel sectors, or even a modest number of public limited companies. This legacy has remained an influence.
The failure was partly the result of much of the capital, ownership and investment in Welsh resources and the means and drive to exploit them – with a few notable exceptions such as David Davies of Llandinam's Ocean Coal Company – being largely derived from outside Wales. Even today Wales's biggest company, Admiral, has been built in little more than two decades by non-Welsh investors and it is arguable this inherited dependence on external actors that has shaped Wales's present economic structure remains. The absence of a larger coterie of entrepreneurs, or at any rate entrepreneurs who would start and maintain their businesses in Wales has, however, been unfortunate.
The luck of the Irish
Yet, if comparisons with the South West are unflattering to Wales, those with another near neighbour, Ireland, that Wales might aspire to be more like are even more invidious. It is not an unrealistic ambition to want to go further than match the South West but to create a new Wales that will replicate the successes of other smaller advanced industrial nations and regions.
Wales should want to command a much more prominent place on the world stage, as well as offering its people enhanced lives, economically, politically, and culturally. Just how far we are from this is sadly evident from a brief survey of comparable numbers relating to Ireland.
In only 30 years a previously chronically poor Ireland has transformed itself into one of the richest countries in the world (though the crude figures for Irish GDP must be qualified with strong provisos).[27] Success has come through the abandonment of previous self-reliance policies and high levels of public sector employment and the adoption of an open economy approach designed to attract multinationals and promote competition.
This is not to say the Irish economy has not had and continues to have significant weaknesses, including a tendency to boom and bust, and high levels of public and private indebtedness. Before the financial crash of 2008 an emergency package of loans by the EU, and the IMF, (with the UK also contributing) was needed to stave off the collapse of Ireland's banks which had over-extended as a result of loans to the property sector.[28]
Investment in education has been key to Ireland's success, creating a skilled and often language-qualified workforce for incoming companies. Other Irish policies – notably its generous business tax regime – have been at the expense of its EU partners. Since joining the EU it has been allowed to become the world's leading tax haven and as a result has succeeded beyond all expectations in attracting mainly US, high level pharmaceutical, medical device, chemical, computer hardware and software technology, and other groups seeking to shelter their tax from both the US and other countries in which they are based or operate.
The policy over the past decade has been challenged first by Brazil, which blacklisted Ireland, and has also produced pushback from the EU and the US. Washington has changed its own tax laws in response to the loss of tax revenues from some of the country's biggest and most profitable technology and pharmaceutical companies. Ireland has, however, already reaped the benefits. The investing companies have been locked into its economy, their investments including in many cases higher value manufacturing and service activities and not just production from the start.
The first three spots in Ireland's list of top companies are occupied by US technology companies Apple, Google, and Johnson Controls. Other American companies in the top ten are Medtronic, Facebook, Eaton Corporation, Thermo King, and Allergan. Further down the list come a roll call of leading US technology, financial and pharmaceutical businesses – Ingersoll-Rand, Dell, Merck, Oracle, Pfizer, Sandisk, Experian, Boston Scientific, Adobe, Abbott Laboratories, Intel, AirBnb and Amazon. New and existing investors are being drawn through an Advanced Technology Building programme designed to bring jobs to the remoter parts of the country.
Admittedly, some of the investing companies, have a limited impact on the real Irish economy, the operations acting mainly as a means of collecting and transferring revenues from subsidiaries in other parts of Europe. Others, particularly the pharmaceutical companies have chosen, however, to put in place significant research and development activities.
The country's very successful foreign direct investment policies of the past five or six decades have thus succeeded in attracting high-skilled and high wage employment for its relatively young population and in the process slowed down emigration to the UK, the US, Australia and other countries that are home to the large Irish diaspora.
This aggressive use of taxation policy countenanced until recently by a compliant EU has enabled Ireland to build up a huge $1.54 trillion stock of foreign direct investment and become the world's leading destination for high value overseas investment, around 80 per cent deriving from the US. According to OECD estimates foreign multinationals provide 47 per cent of employment in Irish manufacturing and 28 per cent of employment in Irish services.
By turnover 14 of Ireland's top 20 companies are US multinationals, employing a quarter of the private sector workforce and paying 80 per cent of corporation tax. The Irish inward investment agency IDA Ireland estimated in 2017 that multinationals, the vast majority from the US, contributed €28.3bn to the Irish Exchequer in taxes.
Nevertheless, it is not the only leg on which the Irish economy stands. Irish-owned businesses are well spread throughout the list of the 100 biggest companies. Ireland, as Table 12 shows, has spawned its own multinationals, some stemming from the building industry – long a specialisation of the Irish – and others in the agribusiness sector where Ireland has become a world-scale food processor and exporter, with extensive processing facilities turning local produce into food in several other countries, including Wales and the rest of Britain.
The impressive roster of domestically owned Irish companies, many of them quoted on stock exchanges in London, New York and Dublin have been mainly the result of entrepreneurial initiatives by Irish individuals, and in a few cases deliberate action by the Irish Government.
Table 12. Ireland's Top Companies
Rank Company Turnover Euro Bn. Sector Rank Company Turnover Euro Bn. Sector
4 CRH 26.8 Manufacturing 32 Musgrave 3.9 Retail
8 DCC 17.2 Services 44 Glanbia 2.4 Food
15 Smurfit Kappa 8.9 Manufacturing 49 Paddy Power Betfair 2.2 Retail
16 Ardagh Glass 8.1 Manufacturing 50 Ornua 2.1 Food
18 Ryanair 7.6 Transport 53 Dawn 2.0 Food
19 Eirgrid Utility 56 Applegreen 1.9 Retailing
22 Kerry 6.6 Food 65 Greencore 1.6 Agrifood
25 Total Produce 5.0 Food 67 C & C 1.6 Beverages
26 Penneys 4.7 Retail 70 Bwg 1.5 Food
28 Kingspan 4.4 Manufacturing 75 Dunbia 1.3 Food
Source: Irish Times Ireland's Top 1000 Companies
Some sectors have developed, too, outside traditional Irish specialisms. The country is the world's leading lessor of aircraft managing 22 per cent of the fleet of aircraft worldwide, and forty per cent of all those leased (and not owned by the airline companies themselves). Fourteen of the top five lessors in the world are based in Ireland. Ireland's favourable tax regulations have again helped to drive this growth. Most aircraft lessors can reduce or cancel out their Irish taxable profits by use of allowable tax deductions and structuring. The cost of an aircraft can be written-off against tax at a rate of 12.5 per cent over 8 years.[29]
The leading Irish companies have grown to international scale by looking outside the confines of their country's 5m population and by using neighbouring UK as an extension of their home market. The biggest Irish company, CRH (formerly Cement & Roadstone Holdings) has a major presence in Britain through its Tarmac subsidiary, to which it has recently added Welsh civil engineering contractor, Alun Griffiths in 2019.
It has gone much further, too, in its 50 years of existence, becoming the largest supplier of building materials to the construction industry in the US, and operating in Europe and Asia. Dublin-based retailer Penneys (part of British plc Associated British Foods) is the headquarters operation for the successful fashion chain, Primark, with branches in the UK, the US, and other parts of the world.
Ryanair has become basically a British airline domiciled in Ireland, carrying more passengers than British Airways, Air France-KLM, or Lufthansa to become Europe's biggest airline.Two of the biggest Irish agri-foods businesses – Dunbia and Glanbia – process much of Wales's agricultural output, the former (a Northern Ireland company)having bought Wales's biggest sheep processor, Oriel Jones a'i Fab, in Llanybydder.
Irish energy company Petrogas, through its Applegeen subsidiary, now operates petrol stations across the UK through its 55 per cent stake in the Welcome Break chain of motorway service stations, as well as having its own branded outlets on main roads. British motorists filling up at Applegreen's stations, including Welcome Break, are now contributing to Ireland's overseas earnings. It has now expanded across the Atlantic to the US.[30]
In short, Ireland has strong manufacturing businesses, a dynamic food and agribusiness sector, sophisticated health, pharmaceutical, and technology businesses as well as important retailing, transport, and construction businesses – just the sort of profile Wales needs.
Table 13. Employment in Ireland by Key Sector
Sector Nos. Employed Sector Nos. Employed
Aircraft leasing 1,200 ICT 37,000
Alcoholic Beverages 92,000 Medical Technologies 25,000
Engineering 18,500 Pharmaceuticals 50,000
Financial Services 35,000 Software 24,000
Table 14. Business Representation by Sector: Ireland Top 1000
Sector No. of Companies Sector No. of Companies
Retailing 184 Transport 97
Manufacturing 136 Construction 95
Food 125 Pharmaceuticals 86
Business Technology 119 Agribusiness 65
Health 99 Consumer Technology 61
Ireland's exports, too, are hugely impressive. Set against Welsh exports of £17.7bn in 2019 an increase of 3 per cent on the previous year, Ireland two years earlier exported €219.bn worth of goods and services, equivalent to roughly £190bn, from its main sectors, pharmaceuticals, chemicals, computer hardware and software, food products, beverages and brewing and medical devices. Ireland manages to export more than ten times as much as Wales – an alarming disparity given its population is only 60 per cent larger.
To understand how far Ireland has come it is worth noting that in 1962 Ireland imported goods worth £273.6m. against exports of £174m, with live animals (£47m.) and food (£42m) accounting for 40 per cent of the outgoing total. in 2017 Ireland posted its widest ever trade surplus of €45bn, both exports and imports coming in at the highest level on record. The biggest trade surpluses were recorded with the United States, Belgium, Switzerland, the Netherlands, and Germany.
Ireland has used its time in the EU to reduce its dependence on the UK as an export and import partner. The US was its leading market in 2017, taking around one quarter of its exports, followed by Britain with 11.8 per cent, only marginally ahead of Belgium (11 per cent) and Germany 8.2 per cent. The UK accounted for just under a quarter of Irish imports in the same year, only slightly ahead of the US with just over 20 per cent, France (12.5 per cent) and Germany (8.9 per cent). Britain's departure from the EU will as a result harm Ireland much less than would have been the case 20 years ago.
Ireland's success in transforming itself into the 32nd biggest country ranked by GDP in 2019[31] (despite its small population) has been the result of considerable political skill, economic forethought, and some good fortune. Irish companies have become adept at using the UK as part of a wider domestic market to escape the constraints of the Republic's small population in a way few firms in Wales have. From growing a successful business in Britain, they have then gone on to expand across Europe (and the US and Asia) an achievement that that has escaped British manufacturers in similar fields – not just Welsh – in 50 years membership of the EU.
A cadre of competent Irish businesspeople has been created, some of whom have then gone on to run some of the biggest UK and European companies – Willie Walsh of British Airways and Niall Fitzgerald of Unilever being two examples. Less tangible has been the greater confidence shown by Irish individuals vis à vis the British and their role in many sectors of British life, including business, media, and the arts.
Even within the context of a UK economy badly in need of levelling up, therefore, some regions – the South West, for example – have done much better than Wales in adapting and modernising. Ireland, as an independent country is an even more impressive – indeed stark – example. It has been free to make economic policy choices that meet its own needs as an outlying western European country and has had considerable success, even though wealth is not spread evenly across the country but concentrated in the four cities of Dublin, Cork, Limerick and Waterford.
There are some hard questions to answer here even before the issues are considered relating to independence or greater autonomy within the UK as a solution to Wales's economic development. Why do firms retrench from Wales but rarely cut operations elsewhere in favour of Wales? Why have so few firms wanted to headquarter in Wales?
There were high hopes 30 years ago that Cardiff Bay could play this role and attract UK and international corporate offices but the waterfront development in former dockland areas has instead become largely a leisure, restaurant, and residential destination alongside the Senedd and Wales Millennium Centre. The vast sums invested in Cardiff Bay have failed even to make any impact barely more than one hundred yards across Bute Street, the area centred around Mount Stuart Square only limply redeveloped so far and looking much as it did 60 or 70 years ago – rundown and dilapidated – when the local shipping industry largely petered out.
If firms are happy to locate to Gloucester, Cheltenham, and Bristol, why have the extra 30-40 miles proved such an impediment? Why have so few consumer businesses, including retailers, failed to emerge into the daylight in Wales? Peacock, the fashion retailer, flew the flag for several years but is now part of Edinburgh Woollen Mills, leaving Iceland on Deeside and JoJoMamanBebe in Newport as the most prominent UK retailers based in Wales, plus department store group, Leeke.
Why are Welsh firms, apart from a few multinationals so reluctant to seek out export markets? Why have Welsh food manufacturers failed to achieve scale, unlike their counterparts in Ireland or many English regions? Why has even Welsh agriculture dairy and meat produce ended up being processed in Wales by non-Welsh operators, or over the border, with few Welsh firms of scale taking up the challenge?
Rachel's Dairy (now renamed Rachel's to de-emphasise its organic credentials and housed within a French dairy multinational) has been in a game of corporate pass-the-parcel for the past 20 years while its once smaller rival Yeo Valley has become a supermarket shelf staple and remains family-owned. Equally, why are there no listed tourism businesses in Wales or even small hotel chains? Why are Welsh holiday cottages marketed by English-based businesses? These are just some of the building blocks on which a stronger Welsh economy could have been erected.
A more business-oriented economy
Over the longer term, Wales's prosperity will require a more business-oriented economy, attuned to creating greater wealth. A stronger Welsh economy would include a greater number of big, Welsh-owned companies, more medium-sized companies, and more small companies especially those with the potential to become bigger and join the ranks of £100m plus turnover groups. It also needs more overseas and UK businesses willing to commit to a what might be termed a full-scale operation in Wales, managing products and services for the whole of the UK or even European market, rather than simply using Wales as a manufacturing or lower grade service base controlled from elsewhere.
On one calculation, Wales, with 5 per cent of the UK population Wales has only 3 per cent of its SMES. To have proportionately the same as the rest of the UK Wales would need another 60,000 businesses. According to the House of Commons Library, in 2019 Wales with 3.1m people had 222,000 businesses, England (56m) 5.19m, South West England (5.6m) 562,000 and Scotland (5.4m) 334,000.
The number of SMEs has continued to grow year on year, but growth needs to be accelerated and stronger representation sought in higher value goods and services.[32] The number of companies that fail and the number that replace them – is low, another sign of a not very dynamic economy, suggesting the existence of "zombie" companies holding back the rest.
Churn rate is important. Established companies run out of ideas or prefer to do things the way they have always been done, while new businesses often see changes to make. Think of Woolworth on the High Street. Discount shopping has mushroomed in recent years – Wilkinson, Home Bargains, Poundland, B&M – yet the originator of this concept has disappeared. Covid-19 will hasten the departure of many weak companies in Wales and elsewhere. New Welsh companies in sectors that will benefit from changes in business and consumer behaviour are needed.
More and stronger companies would not only increase employment but also generate the income and profits that would enable Wales to reduce its dependence on fiscal transfers to pay for the whole range of services that central Government and Welsh Government provide. A bigger private sector is therefore needed, consisting of more and larger domestically owned and controlled businesses that will be more productive and profitable than the existing base.
It is also important that those companies can move up the value chain, developing new and innovative, IT-enabled products and services, thereby generating greater turnover and profit, and more, and more skilled, employment. Because such companies will make more profit, they will pay commensurately greater amounts of tax. They will pay higher wages, and employees will pay more tax, too, as well as having higher disposable income to spend on goods and services.
Unless Wales is happy to be a "feeder" economy, where businesses are taken over when they grow beyond the small company phase, they need to be given the encouragement and resources to become larger and to avoid simply being acquired by bigger external companies wishing to grow by consolidation. This itself is a main reason for the now well-recognised missing middle. [33] We all know what happens to football's feeder clubs that exist by selling their best players: they stay in League Division One or Two and never compete in Europe.
The natural progression from small to medium-sized is being abruptly cut off, resulting in a dearth of medium-sized firms. Support offered by Welsh institutions can even bring this about. Cardiff-based Pinnacle Document Solutions, a leader in its field, was recently acquired by London company, Ethos. It represented a successful exit for the Development Bank of Wales, which had invested in the company, but meant the loss of a Welsh-based business, even if a stronger united group based outside Wales has been created to the benefit of the UK economy as a whole.
Yet, many Welsh people do have the talent and skill to develop significant businesses, though in many cases this has been done outside Wales. Current examples are the successful outdoor goods shop, Mountain Warehouse, challenger financial institution, Starling Bank, and the food delivery company, Just Eat. Specsavers, too, has a substantial Welsh connection. In Wales companies such as JoJoMamanBebe, Mrs. Bucket, Go Compare, Castell Howell and Oil4Wales also show the ability, commitment, and determination to create strong Welsh companies, and these can be exemplars.
Can lack of finance, poor road and rail infrastructure, a mountainous terrain that separates north and south go on being blamed for Welsh failure to develop as far as is needed in this direction when efforts have consistently been made to address these and other issues? Are we doomed to go on addressing the symptoms and never the underlying causes?
Wales has some catching up to do but is there any reason we cannot make better progress than in the past few decades? What steps might now be taken to improve the performance of the Welsh Economy and its business sector?
Building New Connections
Wales is not prospering under the present arrangements as a devolved region within the UK. It has failed to develop the industry and service sectors that will enable it to match the growth of more prosperous regions and nations.
So, the questions are these. Is there any reason to believe the Welsh economy will grow any faster than it has in the past or that it will improve in future at a faster rate than the rest of the UK? Will the Welsh Government's 2017 Economic Action Plan (EAP) or the UK Government's Shared Prosperity Fund, the replacement for EU funding, bring about the faster growth in new business formation, inward investment, export growth, productivity and output that is needed to catch up? Or, is the Welsh economy persistently going to underperform those of its competitor economies, whether by reason of geography or any other immutable factor?
The Covid-19 pandemic has further weakened the Welsh economy, and the pace of the recovery across society and across the different regions of the UK will not become clear for many months yet. As happened after the financial crisis of 2008, however, it may be the weakest regions that will find it hardest and take longest to recover.
The issues facing Wales have many causes, but one is particularly important. The UK economy has tilted heavily towards services, and London and the South East have secured the bulk of the country's higher level financial and professional services employment, as well as a large share of high technology research and development. The magnetic pull of these sectors has drawn graduates from all over Britain to start and build their careers in London, exacerbating the negative effect for Wales of the significant drift across the border to university courses. Policy at UK and EU levels has sought to mitigate rather than change these circumstances.
Nor is this the only way in which the relationship Wales and other regions have with the South-East of England is economically damaging. The Treasury protocol that insists that capital spending is directed where the greatest returns are made magnifies this effect. It ensures infrastructure developments – HS2, Crossrail, London Airport expansion and the like – take place disproportionally in wealthier and more populous regions, reinforcing the attraction to companies and individuals of work in London.[34]
Central Government is wedded to the principle of 'rewarding success' rather than 'addressing failure'. However, it is the job of the market to do the former, and one of the roles of government to address the latter. Government policy has contributed to a 'positive' feedback loop – exacerbating these market disparities rather than reducing them.
Even well-meaning attempts to locate compensating public sector jobs in Wales can have negative effects, inhibiting rather than promoting growth. The jobs allocated – for example, the DVLA at Swansea, Business Statistics Office at Newport, and Companies House in Cardiff – increase the private-public imbalance. Since their remit concerns the UK and not just Wales top management decisions are often taken elsewhere, usually in London where senior staff remain to sustain close contact with Government and other Whitehall departments.
Public sector jobs paid at standardised rates across the UK may increase wage levels in poorer areas, but this will make jobs in the private sector where wages may be lower than elsewhere less attractive. Crowding-out will occur where well-qualified individuals choose to work in the public sector – cost centres – rather than in the private sector – profit centres.[35] Potential entrepreneurs are diverted into other career paths and inward investment becomes less attractive. It also has the effect of eroding the potential corporation tax structure.
Such jobs are also subject to shrinkage pressures, either because new technologies, such as computer technology enhancements and artificial intelligence, reduce labour requirements, or in pursuit of expenditure cuts. Because of greater dependence on such jobs, the private sector in Wales must grow faster to make up for the absence of growth in the public sector even to keep up with the GDP growth elsewhere.
Which measures are required, therefore, to counterbalance these disadvantages and remedy the underperformance of the Welsh economy? What shape should the institutions that will deliver these enhancements take? How can Wales begin to match the achievements of other countries such as Ireland that have transformed their prospects over recent years. With only some 5 per cent of the UK population the interests of Wales will never be a primary consideration for the London government, nor is it reasonable to expect that this should be the case. The policy approaches need, therefore, to be Made in Wales and implemented effectively in Wales.
However, these issues are resolved, and whether moves towards independence are regarded as the answer or not, some principles need to be enunciated. Before a start can be successfully made on the social, environmental, and other economic changes Wales needs, a bigger, better balanced and more export oriented private sector economy must be built and not just start-ups, however innovative these might be. Even if successful, a policy based on start-ups will take years to bring tangible results to the lives of ordinary people across Wales.
There must be a larger number of small, medium size and big companies, and a bigger proportion headquartered in Wales, or constituted as the regional headquarters of non-Welsh companies originating in the rest of the UK and overseas. Only then can a start be made on reducing the fiscal gap and its consequence, chronic dependence on centrally disbursed funds.
The structures put in place to deliver improvements must be robust, not subject to constant revision, and well resourced. The fresh thinking on the state's role that has emerged since the pandemic should be seized on and Welsh Government must be prepared – using the best advice – to take a much more active role in shaping the Welsh economy, including if necessary through stakes in key businesses considered vital to the growth of a representative and balanced Welsh economy.[36]
How can these aims be achieved when the efforts of the past 20 years and further back have met with mixed success? Support for Welsh-based small and medium size enterprises (SMEs) at various stages of development is delivered through the Development Bank for Wales – Banc to use its short form – created in 2017 with wider powers than its predecessor, Finance Wales.[37] It also provides links with other private sector sources of finance, including banks, crowd funders and business angels. Companies with larger requirements, including potential inward investors from other parts of the UK and the rest of the world, are directed to Business Wales.
Useful as its services are, and experienced and professional as many of its managers are, Banc is set up mainly to react to ideas from those seeking finance rather than as an initiator. The £5m ceiling on the funds it can offer puts a severe limit on the size of operations it can support. It measures success at least in part in exits. These frequently result in successful Welsh businesses being acquired by groups based outside Wales.
An enhanced institution (Bigger Banc) could be tasked with shaping the development of the SME sector so that it plays a more vital role across communities throughout Wales. It could bring Welsh companies together where greater scale would lead to improvements in efficiency and productivity, helping to find new investors where outside capital is required, and promoting new forms of ownership.
An impediment to the onward growth of Welsh companies has often been their acquisition by non-Welsh businesses and a subsequent loss of identity or even the extraction of brands and processes to locations elsewhere. Business owners often have very good reasons for selling – access to large amounts of capital may be needed to sustain growth, family members may be uninterested in taking over a previous generation's business, existing management may not want to step in as purchasers. New mechanisms need to be found to ensure that if these issues do arise a Welsh solution can be explored. Similar measures are needed to ensure more substantial Welsh businesses are created from mergers within Wales.
It could, for example, be a requirement for any company that receives investment from public finance through Banc or other sources that the owners are obliged to offer their shareholdings to an Employees Share Ownership Trust (ESOT) when selling their shares. A new fund could facilitate the purchase by employees of companies based in Wales when the majority owner is looking to exit. The fund should also offer advice and expertise.
In 2012 the then Conservative-Liberal coalition Government declared that it wanted to move employee ownership into the bloodstream of the UK economy, but this ambition seems subsequently to have been lost.[38] It quoted academic research which demonstrated that employee owned firms created jobs faster and were more resilient at a time of economic downturn and encouraged increased employee commitment and dedication.
More comprehensive forms of support for small firms than are currently on offer should be examined. Five years ago, a report by academics offered the Small Business Administration in the US as possible model for Wales. The creation in Wales of an organisation like the Small Business Administration (SBA) in the US was suggested in a report from Cardiff Metropolitan University, and this could be the basis for a new approach.[39]
Established more than 60 years ago it has offered coherence and consistency of support that has not been the case in Wales where new institutions and policies have come and gone. Its focus, the report notes, is the four Cs of Capital (finance), Counselling (business advice, networks and training support, Contracts (public procurement), and Championing.
SMEs in Wales interviewed for the report offered a support wish list which mirrored these activities – financial support to assist growth, increased support for exporting, training, and continued education, and help in developing practical soft skills and networking.
Recommendation One. Banc should expand beyond its current remit, and a review be undertaken of the relevance to Welsh needs of institutions such as the US SBA. Employee Share Ownership Trusts should be actively promoted with a view to making such a required part of any exit strategy for a firm in receipt of public sector funds. The potential for an ESOT fund to facilitate this should be researched.
Private sector resources
Private capital could also play a bigger role in supporting Welsh business if the right connections could be established. Though there are finance houses working in Wales – very often in the role of marriage broker linking Welsh companies with outside buyers – businesses in Wales are rarely the recipients of the venture capital funds that go to support the growth and expansion of start-ups in the south of England and other prosperous regions.
There can be many reasons for this. Applicants in more prosperous regions are very often in new consumer-facing product areas that offer the Venture Capital Trusts (VCTs) the prospect of securing profitable exits, and few of these may be being found in Wales. Other businesses favoured by the VCT houses and other venture capital providers are in new IT-related and healthcare sectors with close links to top research-intensive universities.
Wales does have some businesses, in these sectors – especially healthcare – and it may simply be that the distance from the headquarters of the VCTs in London is a more important factor. A new Welsh venture capital trust that could draw in funds to support Welsh start-ups needs to be created, and efforts made to draw in funds from Welsh investors and others in Wales and beyond.[40] It would need to have the expertise and network to know the VC world in London and elsewhere very well, and to know whom to approach for different opportunities as they arise.
Recommendation Two. Links with London-based venture capital must be strengthened, and a new Welsh venture capital trust be created that could draw in funds from Wales and beyond to support Welsh start-ups should be created.
Welsh investors would most probably be the principal sources of funds (perhaps with some initial Welsh Government funding) and given the likelihood of lower returns than many VC investors would normally be seeking, an appeal to patriotism would also help. Size is one of the several reasons that smaller companies in Wales do not get the attention of London VCTs. It takes almost as much effort to analyse a small company as a big one, so the fees are a larger proportion of a smaller transaction.
Part of this work could be done by Banc or a Welsh Government arm's length entity responsible for preparing companies for market. There is scope here, however, for linking such a project with expatriate organisations such as Global Welsh, and other Welsh networks in the City of London and elsewhere. These will contain within their ranks many individuals with experience in investment and the risk funds for what they might be persuaded is a good cause.
Recommendation Three. Links should be established with Welsh expatriate organisations to tap members' capital and expertise.
Procurement and the Foundational Economy
Could the Welsh SME economy be revivified through new more pro-active organisations as suggested above? Could such measures help to create the more balanced, prosperous, and fairer society that would be the goal? It is a big challenge, but small steps, starting with procurement policy, can set in motion the process of creating a larger cohort of Welsh firms.
Much of the public sector's spending – Government, local government, health, education, defence, and other services – escapes from Wales but with new rules and guidelines for procurement a greater proportion could be retained. The sector has been under pressure for a long time to improve its attempts to source locally and from SMEs, thereby supporting the foundational economy.[41] Progress has been made but in practice public bodies find this much more difficult than sourcing from large companies with multiple resources.
A manifesto by economist and former university vice-chancellor Sir Adrian Webb points out, however, that the foundational economy perspective on economic development fits well with what can be achieved by a small nation with circumscribed powers such as Wales.[42] Though it presents challenges a new focus on the foundational economy – as already advocated widely across the spectrum in Wales, including by the current Labour Government – can work in tandem with other economic development initiatives to create additional growth opportunities.
Alongside a new focus on the foundational economy, and more intelligent procurement rules, there is a need for a mechanism to enable a new commitment such as this to function more effectively. The creation by Government of an entity to which public sector bodies wishing to participate could turn would help. This would do the 'hard lifting' of aggregating SME provision and help with the tender process on their behalf, making the process easier and more cost effective both for the public and the private sector.
A framework also needs to be created through which details of companies offering services can be collated. It is important, too, that these should be delivered within a relatively local area (depending on what the service/product is) to ensure that unnecessary travel and transport is not involved. This would serve wider concerns about climate change and incentivise local producers, possibly also encouraging mergers and acquisitions and the creation of bigger and more viable companies.
Public bodies in Wales would need to be set challenging foundational economy targets with penalties such as those in operation for waste recycling. The latter has already seen impressive increases in the amount of waste being recycled and big declines in the amount going for landfill or export.
Recommendation Four: The foundation economy should be given a better-resourced place in the centre ground of Welsh economic policymaking with incentives put in place to promote much greater take-up by public and private sector purchasers. A wholesaler type body should be created to aggregate private sector provision and support tendering, together with a facility through which companies could make their offering more widely known.
In parallel, policy must be directed into Increasing the contribution Wales makes to feeding itself by investigating import substitution in areas such as vegetables where historic declines need to be reversed. Ireland has become one of the world's biggest growers of mushrooms which it exports to the UK and other markets. This is a product – like many, many others – which could as easily be produced in Wales.
The Netherlands with no better climate than Wales produces 60 per cent of the world's bulbs and commands a big share of the British flower and salad market. Its grip on this market in the UK is firm but it can be challenged. Can Wales not grow more tomatoes and lettuce under cover?
New food-growing technologies are being developed such as the use of underground food production facilities. Do we not have any old mine workings across Wales where this could be tried?[43] Interest is growing in these Controlled Environment Agriculture (CEA) methods, which by their nature do not need to be location specific. Discussions need to start with Welsh food producers to examine which methods might be appropriate in Wales and the funding this would require.
A greater emphasis on Welsh producers feeding Welsh people and exporting to other countries should be attainable. A start could be made if supermarkets could be further encouraged to boost Welsh consumer purchasing decisions. The German supermarket giant, Aldi, which with its compatriot Lidl has taken a huge bite out of their UK competitors market share, emphasises local, including Welsh labelled, products. Though they may be reluctant to admit it, UK supermarkets seem to have been shamed into similar efforts so that the availability of Welsh goods has increased. Welsh food producers need to be of a scale, however, and able to provide a much wider offering to the supermarkets before they obtain shelf space.
In the post-Covid environment there is likely to be a window of opportunity when individuals are much more likely to want to support products, including food, that patently comes from nearer home. Better and bolder labelling, including an asterisk or highlighted text on supermarket bills to indicate local provenance, would help, as would tighter controls on misleading labelling that implies foreign goods have a local source. [44]
Recommendation Five. In the aftermath of the Covid-19 crisis a window for a much greater emphasis on local production and procurement will open and this must be seized. A Welsh Government focus on how to finance and implement growth in sectors such as CEA should be developed.
Smart FDI
Better support for small businesses can be the start but can only provide a partial solution to the weakness of the Welsh economy. Such initiatives will produce few of the large or even medium size companies such as are found in much greater profusion in other regions.
Other initiatives are required to strengthen the Welsh company base, including a renewed drive to bring in companies from outside Wales. The attraction of Foreign Direct Investment (FDI) was a cornerstone of post-war Welsh economic policy, particularly during the lifetime of the WDA. As such, it helped to bridge the gap in employment left by the contraction of steel and the near disappearance of coal mining by the early 1990s
Wales at the time was offering employee-intensive businesses in the motor, engineering, chemical, and pharmaceutical industries a large pool of lower-skilled workers that could adapt easily to factory production and shift working. Because of low wages Wales was a competitive location for labour before the fall of the Berlin Wall and the subsequent integration of the East European economies into the Western World, and later the EU.
A second wave of competition has followed with the emergence of China as the world's workshop, and many of the industrial processes and products previously carried out in Wales have now moved to the East. The African Continent will offer the next big pool of labour for employee hungry businesses, such as textiles, of the future. Because of technological advances most industries – steel being a notable example – also require less labour than previously for equivalent or even greater levels of output.
Wales urgently needs a new smart wave of inward investment. FDI in future, though it may still play a crucial role, will not bring in new businesses on the scale of the past and is likely to consist of much smaller operations than the large plants attracted in the second half of the 20th century, now largely resettled in lower-cost locations. Successful regions in future will consist of businesses special to the region but integrated into global supply chains. Wales needs more of these businesses.[45]
Acquisition of businesses that are integrated into the supply chains of modern processes involves interrogating not just traditional sources but also those areas that have successfully developed new products or processes. Expanding economies such as Israel, Singapore and Taiwan could be looking for a western European base and Wales will need to be making its advantages known. The capacity to unearth such businesses needs to be in place.
The reasons why businesses have come to Wales with modern products, such as Bosch, which invested heavily in the 1990s in an alternator plant near Llantrisant only to leave two decades later, must, however, be uncovered. Cheaper sources of production will often be cited but may not be the only reason and in any case fail to explain the greater success of some regions in retaining their investors. Peripherality can only be one of the factors otherwise Ireland could not have developed such a successful economy.
The most successful new investment of recent times in Wales has been not a manufacturing group but insurance provider, Admiral. As well as employing large numbers of people across a range of skills in Cardiff, Swansea, and Newport it has also been the seedbed for other start-ups by former employees offering a model that needs to be replicated.
Similar individuals with sound commercial ideas will need to be found, and pie-in-the-sky projects that the availability of public funds always attracts avoided. High net worth individuals willing to invest in existing Welsh businesses to help them grow without having to cede control must need be sought out, too.
The list of alumni from Asia and other parts of the world who have studied the sciences or graduated with MBAs and other business degrees at Welsh universities is long. Some will have gone on to found successful businesses and could be encouraged to consider Wales as a base for European operations
Recommendation Six. A new inward investment focus is needed on businesses capable of offering high quality jobs, even if initially in small numbers, in technology, health and sophisticated consumer-facing products. Potential investors in new technology nations need to be cultivated and contact deepened with alumni of Welsh universities overseas.
The length of time it will take for the world economy to recover from Covid-19, and the impact it will have on Wales will only become clear over the next few years but policymakers need to be alive to opportunities. An important focus of inward investment should be finding businesses that will manufacture products which for one reason or another will be better manufactured in the UK than overseas.
Perhaps some beneficial side-effects, especially for the environment, will emerge when life returns to normal post virus. Significant falls have taken place in air pollution in the affected areas where previously high levels may have been a contributory factor in the high number of deaths, compared with less industrialised countries and regions.
Many businesses and educational establishments have learnt during the Covid-19 crisis to operate remotely, but such measures cannot apply to manufacturing, a sector of greater importance to Wales than the richer regions of the UK. There will be manufacturing opportunities in reshoring which could be exploited. For environmental reasons long supply chains involving polluting air and sea transport may fall increasingly into disfavour. Companies serving the British market from within the EU may decide to restart operations.[46]
Britain has found itself severely embarrassed by the necessity to chase around the world to provide its health care sector with supplies of essential equipment and medicines. Health is only one sector that may in future be considered as appropriate for repatriation to ensure national survivability in the event of a resurgence of pandemics such as Covid-19.
Many people who have had to work from home may not want to return to daily commuting and will in future arrange to use PCs and laptops at home for at least part of their working week. If home working replaces the office in some scenarios it may make it easier for individuals to stay in Wales to work, while providing services to the rest of the UK.
Though Wales may lose some population as a result of higher unemployment, there could be a surge in the number of people wishing to settle away from crowded cities, in Wales, Devon and Cornwall, the Lake District and other supposed rural idylls. This could bring talented individuals with new business ideas to Wales. Inquiries to estate agents suggest many are already considering such moves and policy should be developed to manage this effect to the benefit, rather than the detriment, of all parts Wales, including its most fragile areas.
There are likely to be other post-Covid-19 opportunities. Many business travellers may want to rely on videoconferencing rather than face-to-face meetings (though the attraction of international hotels will always be a pull for businesspeople and conference attendees). Long-haul holidays to Asia, South America and other distant parts may seem less attractive, if airlines and especially the low-cost variety are victims of the oncoming recession.
This could create openings for Wales, if it can provide the quality of service and experience now demanded and move away from reliance on serving the lower cost end of the market, a long-held ambition. Air fares, already vulnerable to demands for climate change action, will rise. Innovative services to meet any new needs that arise are likely to be a focus for entrepreneurs and attractive to funders, and should be so to enterprising individuals in Wales, too.
Recommendation Seven. Wales should search for businesses that might be relocated back in Britain for strategic security, environmental or other reasons. Opportunities in other fields including tourism should be exploited.
We need to recognise that the exporting propensity of Welsh businesses is low. On the surface Welsh exports to Ireland look a modestly successful £1.57bn. But drill down into the figures and it appears no less than two-thirds of this is accounted for by petroleum, and related materials – presumably oil refined in Pembrokeshire and shipped onward, contributing minimum added value or jobs to the Welsh economy. Net of this product Welsh exports to Ireland are little more than £500m a year.
Welsh exports are not the result of the combined efforts of hundreds of Welsh companies successfully seeking out overseas markets but depend on a handful of big multinational corporations such as Airbus, Dow, Toyota, and Ford and hence are vulnerable to corporate decisions made elsewhere (and to decampment). Ford's closure of its Bridgend operations is an example. Output at Airbus's Deeside plant will be affected by a decline in air travel and consequent cancellation of orders for the parent's products. Jobs are already being lost.
An expanded team of export advisers and easy to join trade missions will be required to assist Welsh small and medium-sized companies boost sales overseas (and to other parts of the United Kingdom) and to encourage companies that have not exported to get involved. A Wales website where it would be possible to order a variety of things from Wales and have them delivered collectively is one possibility, the Welsh Government working with Welsh transport and distribution companies to set up the logistics and warehousing facilities and payment software.
A greater involvement in export or even the wider British market would bring wider benefits than increased sales. Companies that export are more productive and more efficient because of exposure to higher standards in competitive markets
Companies such as authentically Welsh and Deliver Delicious are already acting as one stop suppliers of Welsh delicatessen and other products and bringing together different food products and suppliers but a bigger effort is required across other sectors. Parallel with this a fresh look is needed at Welsh port facilities and investment encouraged so that Wales can benefit from a likely trade orientation towards westerly facing markets following departure from the EU, and from UK Government freeport plans.
Recommendation Eight. The export propensity of Welsh firms needs to be encouraged and stimulated to increase revenues and help increase the productivity and scale of Welsh business. The potential of Welsh ports to secure an increased share of the UK's trade needs to be explored.
None of this will work unless the capacity to acquire and utilise better business intelligence is developed. The first requirement is to know more about Welsh business needs. In other successful economies, such as Scotland and Ireland, the universities are mobilised to a much greater extent than in Wales to advise on the needs of existing sectors of the economy, and where future growth prospects lie. An example is the role played in Scotland by the Fraser of Allander Institute at the University of Strathclyde.
Established in 1975 it helps to inform decision-making in Scotland. It works with the business community to improve productivity and performance and with the Scottish Government to establish priorities and action plans. It runs the Holyrood Government's £225,000 Economic Futures initiative on behalf of Scottish universities and is also tasked with improving Scottish statistics.
A recent commission by the Holyrood Government in 2019 was a report by Professor Sir Anton Muscatelli of Glasgow University on how Scotland's universities could lead economic growth through industrial partnership and how Scotland could learn from other innovative European countries. [47]
Business in Wales has complained that even in the shaping of policy it has not always been consulted and it appears to lack a go-to institution for the kind of support Scottish firms can get.[48] Wales is awash with statistics illustrating its economic performance but there are deficiencies in the supply of information on business. Economic Intelligence Wales (EIW), a partnership established in 2018 between Banc, Cardiff Business School and the Office for National Statistics, is a welcome addition to business research capability but is very much data-driven and focused on access to finance for small businesses.
An institution like the Fraser of Allander Institute in Glasgow, operating across a much broader canvas, could play a valuable role in advising Welsh economic development officials on economic and business issues. In the interim greater use could be made of the Scottish and other similar institutions alongside EIW and Welsh academic sources.
Ways of funding such an institution and the relationship it might have with existing business schools in Wales would need to be considered. Its independence would need to be guaranteed, ruling out full scale funding by Welsh Government. Support from the Welsh business community or charitable institutions would therefore need to be sought but over time such an institution would be self-sustaining through income generated.
Recommendation Nine. Policymakers need to be equipped with better business intelligence on the needs of the Welsh economy. Welsh Government and business should back the creation of a new university centre for the study of Welsh business and business needs.
These are ambitious proposals which strongly imply the necessity of structural changes in the way economic development policy is delivered under present largely civil service mechanisms. It will be argued that many of the ideas suggested are being done under present arrangements, but the question, given the continued weaknesses of the Welsh economy, is how effectively.
The civil service, despite use of outside consultancy, is perceived by many to be too cautious in its approach, and to be inhibited by silo mentality, each department often interpreting its mission separately from and not in consultation with others. Secondly, there is deemed by many to be an absence of settled delivery mechanisms not subject to change, which work across different Government sectors, including education and training.
Lack of co-terminosity between departments that should be linked, and the overlap of regional structures – city regions, counties, local authority partnership, regional economic offices – further exemplify a lack of integration and cohesion. Perhaps the severest criticism is that the Welsh civil service remains a "money pipe", distributing resources from London and over the course of 20 years failing to develop the capacity to generate lasting and successful new ideas for the economy.
Various studies have claimed that the Welsh civil service – with its much shorter history than that of Scotland – is still too influenced by Whitehall and reluctant to embark on policy-making that strays too far from conventional thinking. Past mistakes – the failure of the Technium project, the still much contested absorption of the Welsh Development Agency, Education and Learning Wales, and the Wales Tourist Board into the civil service – are also considered by commentators to be imposing a burden on the Welsh civil service and ministerial psyche and inducing an action-paralysing fear of taking risks.
This is to some extent understandable. Civil servants should be there to create a framework within which business can flourish. Creating businesses is not their background or expertise, and because they are rightly incentivised to avoid risk, there is no benefit for them when businesses are successful. Welsh civil servants are bound, too, to feel a dual sense of loyalty. They are part of the UK Civil Service and their thinking and career prospects are inevitably bound up with policy approaches that do not necessarily originate in Wales. It would be unsurprising if this did not colour their advice to Ministers.
A fresh look at the role of the Welsh civil service and the demands made on it needs to be undertaken and new more appropriate mechanisms put in place for some of the implementation tasks in economic development and tourism that it carries out.
Recommendation Ten. The role of the civil service needs to be re-considered so that it can best fulfil a mission of developing specific Welsh policies. Departments need to work much more closely together.
There is a growing consensus outside Welsh Government that new institutions free from day-to-day civil service control are required. A much more pro-active risk-taking approach is needed to economic development which will best be delivered by a properly briefed and resourced independent agency.
Back in 2012 the House of Commons Welsh Affairs Committee in a report on inward investment lamented the abolition of the Welsh Development Agency which it said had reduced Wales's visibility in the global marketplace. It pointed out that paradoxically even five years after its abolition the WDA remained one of the most recognised development bodies internationally. It called for a dedicated promotion agency to be re-established and argued that such a body should be equipped with a mix of skills, with an emphasis on private sector experience.
Unfortunately, although the debate has rumbled on over the absence in Wales since the early 2000s of a separate development agency, unlike in many other comparable countries, there have been no signs of a willingness by Welsh Government to alter current arrangements. Indeed, at political and official level there is strong opposition, motivated, it would appear, by a fear of losing control.
The slow progress of recent years, however, makes hard to gainsay the case for change in the complex current structure under which implementation of policies is administered as a Government departmental project. A separation should be introduced into policy making and execution. Cathays Park would set the goals but leave their attainment to professionals appointed and incentivised within a new dedicated agency (or agencies, if a separate body for financing and developing small businesses based around Banc was considered appropriate) tasked with driving economic development.
Such a change would put politicians and civil servants currently fearful of losing control in a stronger position. At present they are jointly held accountable for successes and failures. An independent agency would operate to targets set by Welsh Government but not be under its day-to-day management and control. It would need to be given clear directions but would then handle implementation and be liable for the results. Failure would have consequences for the agency's leaders, if the fault lay in execution, and at the ballot box for the politicians, if the policies had lacked merit.
A new enterprise agency, interposed between Government and business, would take on FDI attraction, export promotion, site provision and other relevant initiatives designed to strengthen the business sector, currently managed through civil service bodies. It would work with Welsh diaspora movements and help create markets for Welsh firms abroad.
The Irish inward investment agency, IDA, offers an example of how successful such an organisation can be. Admittedly helped by Ireland's low (and, even then, widely avoided) 12.5 per cent corporation tax rate, the IDA has managed to attract 210,000 jobs in client companies and a further eight in supporting industries for every 10 introduced into the country. Over recent years employee numbers have been increasing at the rate of 10,000 a year.[49] The IDA's enormous success has resulted in all five top world software companies, 14 of the 15 top medical technology, 18 of the top 25 financial services, all of the top 10 pharmaceutical, and eight of the top ten industrial automation companies having a base there.[50]
Ireland's economic clout has also made it possible to create out of its pension funds the Irish Strategic Investment Fund (isif.ie) which invests on a long-term basis to support economic activity and employment on the island, with the appropriate slogan, Thinking in Decades. It has strong connections with public and private sectors and seeks to drive innovation across multiple industry players.
The ISIF offers an example of how successful an institution of this sort can be, investing outside Ireland and earning rents from abroad. It currently has €4.1bn committed and has brought the Irish Exchequer returns of €0.6bn since 2014 as well as supporting 30,000 jobs. Its Causeway Capital venture capital subsidiary offers sums of between €2.5M and €10m. Last year it came to the rescue of UK restaurant chain, Patisserie Valerie, acquiring the stricken group from the administrators and it has investments in other UK businesses.[51]
It also has stakes in other Irish venture capital funds supporting the country's small and medium size companies. Its stated aim is to accelerate growth through direct equity investment and hands-on management support. The returns from investments of this kind in successful businesses elsewhere go to the bottom line in national accounts, supplementing national income and reducing the need for borrowings.
For an agency operating even on a fraction of the scale achieved over decades by IDA to be put in place in Wales, numbers of appropriate professionals would need to be hired, briefed, and incentivised. The best results, too, are likely to be obtained if those charged with bringing in new business are incentivised in line with results. Targets could be set for example for the growth in the number of public limited companies or in exports.
In tourism, where another independent agency is needed, Wales still attracts far fewer visitors than either Ireland or Scotland, proportionate to its size, despite its manifold attractions and closer proximity to London and other UK tourist centres, and to international airports in London, Birmingham and Manchester. Contracts to develop Welsh tourism could be put out to tender with incentive-driven targets set for the number of overseas visitors, cruise ship calls, increased levels of UK spending, and improvement in facilities.
Recommendation Eleven. New agencies outside civil service structures should be established by an incoming Government to take over the promotion of economic development in Wales. They should be properly resourced and financed and their staff incentivised to produce results.
In the model outlined here, the Welsh Government would stand back from implementing economic development policy, but its resources would be deployed to ensure it has a role in shaping the evolution of the Welsh business sector. Nor would this exceptional in Britain or elsewhere. At UK level deeper Government involvement in managing the business environment is already being proposed because of the Covid-19 crisis where companies have accepted finance to support their activities and ensure survival post Covid-19.
Government funds to help businesses through the crisis, commentators have suggested, may have to be converted into equity in some cases, giving the state a role in the management of key businesses in future.[52] Limitations could also be put on directors' emoluments, dividends, and other decisions. Hints that this may be the direction of policy have come from the Government.
This can give sanction to a more direct role for the state in Wales to help create the framework within which the economy can grow more strongly, and to become more involved in its shaping, intervening when market forces are seen not to be delivering results that are in Wales's long-term interests. These include those instances where a Welsh solution could prevent businesses deemed important for the development of the Welsh economy from being lost through take-over or merger or where management control would move elsewhere.
Recommendation Twelve. While standing back from day to day management of the economic development in favour of a hands-off agency or agencies, the state in Wales should play a more central in determining the direction in which the Welsh economy develops, including where appropriate more direct financial involvement in companies, using strategic shares and other financial mechanisms.
The advisers and executives needed to work with companies in the ways suggested and to ensure implementation also need to be found. They are unlikely to be found in the numbers required within Wales. These individuals would need to be well-paid, including through well-managed and strictly enforced incentives to leave successful careers elsewhere. They would need to be recruited outside Wales as well as within
Substantial investment must go into increasing the availability and take-up of management education. Perhaps the key finding in the Cardiff Metropolitan University report into lagging productivity mentioned earlier was that the quality of management in SMEs was a contributing factor. Lack of training was identified as long ago as the 1970s when a solitary individual tried to rectify it with the creation of the Wales International Management Centre. Five decades later it appears the problem is still widespread.
There are courses in Wales to train those running the nation's businesses, such as the 20Twenty Business Growth and Leadership Programme at Cardiff Met, but these need to be greatly expanded and efforts made to ensure a much higher proportion of Welsh business managers participate and benefit.
The problem extends into public sector where there is a need for better training for civil service and other similar bodies. A bigger cohort of well-trained managers for both central and local government, health and education is needed, and consideration should be given to the establishment of a college, perhaps based in one of the Welsh universities. Lampeter, away from big city distractions, might be thought an ideal location for blue-sky thinking and debate. Integration of career path and training would as a helpful by-product and lessen tension and suspicions with which the two sides of government view each other.
Recommendation Thirteen. The need to improve the management capabilities of business and public sector leaders should be addressed with the creation of new courses and institutions.
The pipeline leading to the creation in this way of a much more successful Welsh economy also needs to be reviewed and overhauled from its roots much earlier in the education system. Welsh Governments in the past have tried understandably to invoke the idea of Wales as a small, smart country but the reality is different.
Reluctant as we may be to admit it, however, our children leave school with lower qualifications than their counterparts in the richer regions of the UK, we have continuing high levels of young people not in education, employment or training (Neets), our universities are at best mid table and at worst in the bottom half of the regular league rankings. We lack, unlike Scotland (St. Andrews and Edinburgh) and the North East (Durham), what might be termed an elite university capable of attracting students with the best examination results.
Moreover, we export large numbers of our most able students to universities in England and elsewhere. Indeed, a Government-backed programme – Seren Network – encourages students to apply for Oxford and Cambridge and other leading English universities, even though most of its beneficiaries will subsequently take up jobs outside Wales. The English regions and Wales are all net exporters of graduates, only a minority of whom return to work or set up businesses in their home areas. As such, Wales is actively helping to promote the growth of the main recipient of these students – London and the South East – to its own detriment.
Those who leave Wales also develop a less positive view of their native country. A recent study into the attitudes of Welsh students studying in Wales and England found a marked difference in opinion whether Wales would be a good place to set up in business.[53] Those studying in England were largely of the view that it would be difficult to do so and showed little knowledge of the help they might receive. By contrast those studying in Wales were much more positive, probably as a result of being exposed to regular information about support for entrepreneurial activities and observing the successes of some of their recently graduated contemporaries who had started up in business.
No-one would wish to deny Welsh young people the opportunity to study at the best universities in England, the US or on the Continent. Indeed, the oldest British universities have been the destination for many Welsh students for centuries. This will continue to be the case. Measures need to be considered, however, that will act as an incentive to young people to stay in Wales to study and the highest levels of student support should be directed to Welsh young people choosing to study in Wales. Corresponding efforts should be made to draw opportunities that might be available to the attention of Welsh students who might want to return to Wales.
The effective privatisation of the university sector has resulted in its transformation in Wales into an export-earner educating large numbers of students from not just the rest of the UK but from China, India, and other Asian countries. Wales is probably the largest "exporter" of higher educational services in Europe if England is regarded as an export market, and it may well be the highest importer of such services as well.
We should not be over dependent on the former, and we should seek to reduce the latter. Dependence on non-Welsh students creates a vulnerability as the cap the Whitehall Government is to put on English students studying in Wales demonstrates. Nevertheless, the fee-paying model gives the Welsh Government an effective means to encourage talented people to remain and return to Wales when the cost of doing so is cheaper than at later stages in their career. There should be significant use of the student loan scheme financial arrangements to ensure that it is advantageous for Welsh students at Welsh universities to remain in Wales after finishing their degrees. This could also extend to returning Welsh students who have taken courses at universities outside Wales. The ability to encourage Welsh students to study at Welsh universities through this means should be examined.
Wales needs a pipeline, propelling students into Welsh business where they will meet companies and advisers who are motivated to improve the economy. If graduates stay in Wales, their student debt should be written off over a period commensurate with the length of their degree. The same could apply to students returning to Wales.
Study in Wales, putting Wales on a similar basis to Scotland where most students do not travel across the border for courses available in their home country, could also be encouraged through the provision of finance for accommodation and living expenses for students with Welsh addresses. There may be regulatory hurdles, but it should be possible to devise a financial framework encouraging study in Wales. Student loan finance provides a means to do so. Shorter two-year degrees, spread over 40-46 weeks a year, should also be considered. This would reduce the costs to students, enable them to enter the labour market earlier, and help to alleviate the decline known to be about to happen in the size of this cohort over the next decade as a result of demographic changes.
Such an approach can only be adopted if the courses in Wales are appropriate to the economy's needs and attractive to students. A full-scale audit of all university and further education courses on offer across the Welsh higher and further education sectors, including apprenticeships, to ensure the needs of the economy are given priority is should be conducted.
Valuable as their role has been in bringing income to Wales through recruiting large numbers of overseas students since the overall cap on numbers was lifted, the primary function of a state-funded sector such as higher education must be to make sure the training that is going to be most relevant to the work force of the future is offered. This must have a central place alongside the liberal education that one of the first literate countries in Europe would want to provide.[54]
Higher education should have a major role in economic and social change in post-Covid Wales, as Rob Humphreys pointed out in a recent article for ClickonWales.[55] HE has a good story to tell in for example its research links with anchor companies, graduate start-ups and integrating employability into the curriculum, but the nexus between private sector and HE needs to be deepened, and HE brought front and centre in policies that promote the foundational economy, he observes. Higher level apprenticeships, and lifelong learning should be brought in from the margins, too.
Recommendation Fourteen. An incoming Government should review the entire Welsh higher education sector to ensure its priority is meeting the needs of the Welsh economy and society. It should set in motion measures to ensure more Welsh students stay in Wales for their degrees and their subsequent careers and that those going elsewhere are encouraged to return.
Joining the Welsh dots
The above focuses very largely on measures that will lead to a more business orientated and hence more prosperous Wales, but it remains important to remember that the creation of a stronger Welsh nation is at the heart of this. Nationhood has been strengthened by the late 20th century burst of institution building – and especially the Senedd – but Wales remains fractured by its lack of inter-connectedness.
Wales has never had a natural capital like London, Edinburgh, Paris, or Berlin, to which all the country's roads have led. For the best part of 1,000 years Cardiff was a county town, an administrative and retail Mecca for Glamorgan and to some extent Gwent but not the north or west. Yet it is the best capital we have got and antagonism towards it is destructive. The importance of big cities in economies everywhere is now established and is not going to wane.
Infrastructure policy must ensure smooth transport links throughout Wales to and from towns and cities where most current and future jobs are located.[56] But, as well as seeking to link up towns and cities all over Wales with their neighbours, policy should have as one of its objectives making it possible for people everywhere to communicate more easily with their capital.
Past practice and policy have tried to ensure road and rail infrastructure delivered Welsh people, and goods, across the border to England. This needs to be counter balanced in future by greater attention to internal and especially north south links. Wales will also need not to be left behind in the roll-out of 5G telecommunications infrastructure which will be a vital tool for businesses and individuals seeking to spend more of their working time at home.
There are other issues that have not been tackled here. It has long been an ambition in Wales to attract more companies using or involved in the development of green technologies and this can also be a valuable route for Wales to take out of the current Covid-19 crisis as well as for the future. The renewables industry has over recent years become much more competitive with oil, where the returns for investors over succeeding decades look much less healthy as the world decarbonises.
The Social Market foundation has called on the UK Government to train those likely to be left jobless by the coming recession to work in the low carbon economy, claiming the sector as a whole could offer new jobs to one half the 1.4m people likely to be left unemployed.[57] Wales should make sure it is part of any such moves.
Recommendation Fifteen. Transport infrastructure policy as well as eliminating local obstacles to travel should incorporate a commitment to creating greater cohesion and ease of travel between all parts of Wales. Wales must be able to match other regions and nations in the quality and competitiveness of its telecommunications infrastructure.
Can Wales Do it?
This paper has attempted to elucidate the underlying problems of the Welsh economy and to offer some suggestions as to how to address them, whether within the Union or outside it. Various studies of the Welsh fiscal deficit and the cost of independence have tried to suggest ways in which Wales could get closer to paying its way. Lower defence spending, a generous settlement for Wales's inherited national debt obligation, resource taxes on exported water and energy might help.
There are also other revenue-raising possibilities (in an independent Wales), such as pylon and pipeline taxes on resources transiting across Wales, or a switch from taxation of cars to a road usage levy. Electronically gathered, like the Dartford Crossing fee and the London congestion tax, this would harvest rent from trucks and other vehicles making regular usage of Welsh roads without contributing to their upkeep, including vehicles travelling along the A55 and M4/A40 to and from Ireland to England and the Continent.
The policies and mechanisms outlined above can be instituted within the existing constitutional dispensation, providing politicians and civil servants are willing to look at new ways of operating, and are prepared to look at new mechanisms for stimulating economic development and shaping the economy.
A stronger and better-balanced Welsh economy, moving in a different direction from dependence on a financial services-dominated South East of England, can generate increasing confidence in doing things differently and a discernible and credible path to independence, if that should be the ultimate wish of the people of Wales.
Wales, and especially its leaders, must, however, undergo a transformation to a much more business-oriented mindset. Herein lies the challenge and the opportunity. The current approach produces a contest between those whose prism is social justice and group rights and those whose basic approach is to maintain a small state and focus on the individual.
There is a third way which would be more appropriate for Wales, which looks at how to improve economic and social justice, based on such measures as are needed to create a stronger economy. The dilemma, however, is whether there is the capacity within Wales to achieve this and if not how, and how quickly, it can be developed.
Summary and Recommendations
People in Wales ought not to be happy about the current state of their nation. We are dependent on others – the richer regions of the UK – for our welfare, and the promises of devolution appear not to have been forthcoming. Admittedly, there have been huge challenges, but in the run-up to the 1997 referendum vote it was argued that if Welsh people were put in charge of their economy, weaknesses, which even then had existed for 50 years or more, could start to be solved.
Though progress since has been considerable and the Welsh Government has been a front-runner in some of the social legislation it has passed Wales still lags behind most other parts of the UK economically, behind an increasingly prosperous Ireland, and risks being overtaken by some of the fast-developing most recent EU entrants. Yet there lurks deep in the Welsh psyche the fear of "leaving nurse in case of something worse" which has perhaps suppressed the willingness to look at radical alternatives.
If solutions were easily accessed, they would have been found many years ago, given the long-standing efforts and the resources that have been deployed in a bid to find them. We have a welter of reports on the problems of the economy dating back over the years since devolution, including the productivity and output gaps with the rest of the UK, and in a recent report from Cardiff University on the size and composition of the Welsh fiscal gap. This offers a sobering view of the extent of our dependence – the failure to raise enough in taxes to pay for all the service received.
This report has sought to set out the background against which decisions about the Welsh economy and Wales's future need to be made. It sets out firstly the context in which Wales now finds itself within an economy heavily dominated by the needs of the financial services industry of the South East of England. It seeks to show that the business structure of two other territories with which comparisons are made, the South West of England and the Republic of Ireland are much stronger, and the latter particularly, better equipped to survive as modern high-technology economies.
Finally, it offers some suggestions for radical policy directions an incoming Welsh Government might take in 2021. It suggests that dealing with the problems Wales suffers from will require the creation of new institutions to handle economic development, a greater readiness on the part of the Welsh Government to shape the economy, including through the use of state funds, and just as importantly a change in mindset to a much more business-oriented way of thinking.
Some of the ideas will be dismissed as too radical. Nevertheless, what is outlined here aims to better inform the debate Wales needs to have and perhaps offer a mirror to the Welsh condition that we have been reluctant to gaze into. Wales needs a stronger economy whatever future direction it takes politically and constitutionally.
Recommendation One. Banc should expand beyond its current remit, and a review be undertaken of the relevance to Welsh needs of institutions such as the US SBA. Employee Share Ownership Trusts should be actively promoted with a view to making them a required part of any exit strategy for a firm in receipt of public sector funds. The potential for an ESOT fund to facilitate this for all companies should be researched.
Recommendation Two. Links with London-based venture capital must be strengthened and a new Welsh venture capital trust that could draw in funds from Wales and beyond to support Welsh start-ups should be created.
© Rhys David
)ct0ber 19th 2020
[1] Managing Productivity in Welsh Firms: Final Report 2020. Hodge Research Project, Cardiff Metropolitan University.
[2] A Strategy for the Welsh Economy. Williams K. et. al. IWA 2015
[3] For a discussion of productivity issues generally see https://www.iwa.wales/agenda/2017/01/chronic-yes-hopefully-not-incurable/
[4] The Cardiff Met report highlights issues Welsh firms should be addressing if the whole gamut of problems surrounding productivity are to be addressed. These include better measuring, strategic planning, and incentivisation to promote innovation. Management capacity and skills, however, are key barriers that will need to be overcome.
[5] Wales' Fiscal Future: A Path to Sustainability? Wales Fiscal Analysis, Cardiff University, 2020
[6] The Welsh dependence on transfers has been analysed before, notably in a 2001 report for the Institute of Welsh Affairs by Professor Ross Mackay of Bangor University. At that time, however, the emphasis was on securing a more just distribution of funds to Wales (compared with Scotland), amid hopes stronger powers in Cardiff with the arrival of the National Assembly would strengthen the Welsh economy and raise income levels. The Search for Balance: Taxing and Spending across the United Kingdom. IWA 2001.
[7] There are gaps between regions and centre in other countries – Co. Donegal in Ireland is much poorer than Greater Dublin – but the UK has some of the widest disparities. Wales has, however, slipped from being ahead of Northern Ireland in GDP until comparatively recently to being stubbornly behind.
[8] What sort of Wales do we want? Mark Barry, IWA March 2020
[9] Fairer and Stronger. The Second Report of the UK2070 Commission.
[10] Prosperity for All: Economic Action Plan. Welsh Government 2017.
[11] A fourth region covering Mid Wales may be added.
[12] Scotland – the new case for optimism. A strategy fort inter-generational economic renaissance. The report of the Sustainable Growth Commission. May 2018.
[13] To this list of externally orientated specialities could be added London's pre-eminence as a legal centre, offering advice on activities as diverse as international mergers and acquisitions and the tax affairs and divorces of global multi-millionaires.
[14] It is fair to point out that the UK was the highest placed large population country at 13th, ahead of Germany 17th, the US 18th, Japan 62nd and China 94th. https://worldhappiness.report
[15] Scotland used to be in this lagging group but, helped in part by oil and strong financial services, educational and tourism sectors, has managed over the past two decades to elevate its position and now ranks among the more prosperous parts of the UK.
[16] The South West of England is defined as the counties of Devon, Cornwall, Dorset, Somerset, Wiltshire, Gloucestershire, and Bristol.
[17] Northern Ireland, despite its many problems has improved its relative ranking over recent years.
[18] A further complication is different year ends, so companies in both listings are compared with others reporting earlier or later in the same or succeeding years. The Western Mail/WalesOnline has produced a different ranking of the top 300 Welsh businesses based on turnover alone for more than two decades. Iceland is ranked at number two in the most recent listing behind Admiral. Dwr Cymru was in fifth place. https://www.business-live.co.uk/economic-development/wales-top-300-2019-biggest-17396726
[19] Part of Kingfisher Group, also owner of B&Q
[20] The company's headquarters are in Newport. Buying, design and marketing are in Battersea, London.
[21] An Economic Strategy for Wales. p17. Williams K., et al. IWA, Cardiff. 2015
[22] Dyson moved its headquarters to Singapore in 2019 but retains 4,500 jobs in the UK, a significant proportion of which are in research and development.
[23] General Dynamics and British Airways Engineering are not included in the Insider Wales Top 300.
[24] Grounded means here a company owned or largely owned and headquartered in Wales offering a range of employment opportunities and motivated to remain and develop as part of the Welsh economy.
[25] An independent Wales would, of course, be able to include England in its export figures but these would have to be balanced against imports coming the other way.
[26] Electric car pioneer, Elon Musk, is reported to be looking for a site for a second so-called giga-factory in Europe to complement his Tesla company's investment in Berlin. Wales could offer itself as a candidate.
[27] Irish GDP is skewed by multinational revenues that in many cases have little direct impact on the economy. The Irish Government in 2017 introduced a new measure, Modified Gross National Income, which reduces real Gross Domestic Product by one third. This still leaves Ireland with output levels roughly equivalent to Germany.
[28] Irish banks' international bond holdings had exploded from €16bn in 2003 to €100bn in 2007 mirroring a similar increase in property lending.
[29]https://www.mooreireland.ie/MediaLibsAndFiles/media/nathansweb.moorestephens.com/Publications/Tax-Treatment-of-Aircraft-Leasing-in-Ireland.pdf
[30] The direction of travel in Wales is different. First was a small Wales-based motorway services group owning Magor and a handful of sites in England but was acquired by Moto, Britain's biggest operator, (itself later sold in a venture capital deal).
[31] GDP per capita 5th of 187 (IMF) 6th of 175 (World Bank)
[32] https://wordpress.com/post/rhysdavid.blog/145
[33] My piece on the missing middle in Agenda
[34] Wales, like other regions waiting for the UK Government's promised levelling-up, is also disadvantaged by an exchange rate effectively set to meet the demands and interests of the financially driven service economy of the south-east of England. Areas such as Wales with a relatively higher share of manufacturing in overall GDP lose the opportunity to price goods more effectively in markets outside the UK. (In the Euro area the currency is similarly over-valued to the benefit of Germany and to the disadvantage of southern member states, a source of growing discontent in recent years.)
[35] This and other points noted here are well made by Madoc Batcup in a private paper, Creating a new Cymru. 2018.
[36] In the EU where opposition to state aid is an article of faith Germany is taking equity stakes in Lufthansa in return for financial support. The same is happening elsewhere.
[37] Critics have claimed the policy has had insufficient input from business itself. The Federation of Small Businesses Wales has argued that debates around business policy often default to the tactical rather than strategic. New structures and new institutions are needed.
[38] Sharing Success: The Nuttall Review of Employee Ownership. 2012
[39] Federation of Small Businesses. Changing the Conversation: Opportunities and Practicalities involved in Establishing a Small Business Administration for Wales. Centre for Enterprise, Cardiff School of Management, Cardiff Metropolitan University 2015.
[40] Vd. also https://wordpress.com/post/rhysdavid.blog/28 for a fuller discussion.
[41] The foundational is generally taken to comprise the production, distribution, and consumption of the necessities of everyday life, food shelter, local financial services, local transport, and local infrastructure.
[42] Towards Inclusive Growth: Economic, Social and Political – a manifesto for a small nation.
[43] If, as is being suggested, demand for meat is reaching a peak in developed and developing nations because of health scares and environmental and climate concern, vegetable production is going to grow in importance. If not produced locally the food will have to be shipped and trucked in.
[44] The Irish have used a scheme that highlights local produce on till receipts.
[45] Henry Wai-chung Yeung. National University of Singapore. Regional Worlds: From Related Variety in Regional Diversification to Strategic Coupling in Global Production Networks. Regional Studies Association. May 2020
[46] An ambition to increase market share in Britain, its biggest European market, when tariffs increase on EU-produced vehicles is reported to be behind Nissan's decision to keep open its plant in Sunderland and close its Barcelona factory. The company has previously only achieved modest sales on the Continent.
[47] Driving Innovation in Scotland: A National Mission. Prof. Anton Muscatelli, Glasgow University.
[48] The next Welsh Parliament needs to prioritise business and the economy. Ben Cottam, ClickonWales
[49] IDA has international offices seeking investment and promoting Ireland in London, Paris, Frankfurt, Sydney, Beijing, Shanghai, Shenzhen, Seoul, Singapore, Johannesburg, Sao Paulo, Istanbul, Moscow, the UAE, plus a further eight across North America, including two in California.
[50] Ireland even has a programme of nine energy efficient Advanced Technology Buildings that looks very much like Wales's Techniums. Located in areas that have not shared in the inward investment boom three have already been taken by US pharma giants. Where possible the ATBs are located close to towns with a technology institute, so a qualified workforce is available.
[51] Whether in the light of the severe downturn brought about by Covid-19 in the hospitality trade this proves to be a sound, or a mistimed, move remains to be seen. The chain has been acquired cheaply, however.
[52] Government was not always so reluctant to support vital sectors. in 1971 the Government's decision to step in to nationalise aero-engine maker Rolls-Royce from bankruptcy was regarded as wholly appropriate.
[53] Author, Dan Roberts
[54] Welsh Government also needs, particularly because of the pressures on finances from Covid-19, to ensure the well-being of our universities at a time when they are facing severe financial pressures…
[55] We need to reinvent HE for a post-Covid Wales. http://www.iwa.wales.gov.uk2020/05/
[56] The French emploi franc scheme which offers subsidies to employers who take on workers from designated districts where opportunities are fewer may be relevant.
[57] Unfortunately, Wales lacks champions in the energy sector, as current assets are almost entirely owned externally. The last vestiges of formerly nationalised South Wales Electricity (later Swalec and later still Scotland-based SSE) now seem set to disappear as new energy supplier, Ovo, the latest owner and itself partly owned by Mitsubishi, retrenches back to Bristol, with jobs in Cardiff among those to be cut.
Posted in Wales, Wales EconomyTagged Economy Independence WalesLeave a comment
Posted on October 22, 2020 May 26, 2021 by Rhys David
The economic arguments for Welsh independence are examined by Rhys David
Chapter Five of the report Towards an Independent Wales, published in September 2020 by the Wales Independence Commission.
Could Wales afford independence? Particularly among young people there has been growing interest in the past year or two, and among the wider population of Wales growing numbers are identifying as "indy-curious" – yet to make their minds up but not automatically opposed.
Of course, there are few countries genuinely wanting independent status that could not make it work one way or another, but the key question is whether Welsh people would be better or worse off compared with the status quo. So, could Wales make a go of it? This is one of the questions examined in the report of the Wales Independence Commission published in September 2020.
Analyses by Wales Fiscal Analysis and the ONS shed light on the current fiscal position of Wales under the current constitutional arrangements where Wales is a region that many consider to be subordinated to the interests of London and the south east of England with its strong emphasis on the provision of financial services. In 2018-19 it was estimated that Wales had a deficit of roughly 18 per cent of GDP or £4,300 per person. In total this amounted broadly to a transfer of £13,5bn over and above taxation raised in Wales to meet Welsh needs. It is, therefore, the headline size of the task.
Such a transfer is not unique, however, to Wales. Only three of Britain's twelve planning regions – London, the South East and East of England – do not require subsidy and are net contributors to the Exchequer. However, the gap between what is raised in revenue in Wales and what is spent on public services is higher than in all but one region. The average is a much more modest £620 per head. So, is our best bet just to plough on and hope we can narrow the gap and reduce this amount over time?
Indeed, do we not need this security to deal with the damaging consequences of the Coronavirus pandemic, the effects of which are likely to be felt strongly in territories such as Wales? Moreover, Wales is deficient in those sectors which have a greater share of the digital and other industries that are likely to benefit as a result of changes due to the pandemic, and more dependent on others, such as tourism, that will be hardest hit. The consequences and costs of the Coronavirus will unfold over many years to come. Would not Wales be better off in a union with the rest of Britain as it adjusts to harsh new realities across the economy and society?
For all that it has bright spots, the Welsh economy has chronic structural weaknesses that have proved hard to overcome for a long time. They include industry structure, external ownership and management, low productivity, a missing middle of medium-sized companies, vulnerability to take-over, a low export propensity, and educational and skills shortcomings. All have combined with poor road, rail, and telecommunications infrastructure to leave Wales among the poorest UK regions and stymied attempts to raise its relative position.
Better, it might be argued, to take the money and rely on a subsidy that enables Welsh people to enjoy household incomes and living standards broadly the same as those of the rest of the UK. Un-supplemented revenues raised in Wales would be enough to pay for the public services offered in Portugal – a much poorer country. Instead, we have roughly the same services as Ireland, a richer country on most measures. Many will argue this is a trade-off too valuable to lose.
Yet, is this the way we want to go on? Do the present arrangements offer a serious prospect of improving our economic and social well-being and reducing the Welsh fiscal gap over time? Could our dependence even be a consequence of continued reliance on subsidy?
The unvarnished truth is that Wales has been sliding backwards in relation to the richer regions of the United Kingdom, and especially London and the South East, for the past fifty years. All pretence that the gap could be closed or even significantly narrowed has now been buried in suggested new formulations of how prosperity should be measured.
This is too seductive. 'Wellbeing' and other similar measurement concepts designed to look at society's health and wealth, other than through the prism of more recognised gauges of wealth, are important. They should not be put up, however, as a way of avoiding problems of poor economic performance and entrenched poverty across a broad section of the population.
Population growth offers one telling proxy for Wales's relative decline. After a sharp decrease in the 1920s because of outward migration, numbers stood at 2.59m in 1931 and rose only by 3,000 in the next 20 years. By contrast Scotland's population grew by 253,415 to 5,095m in 1951, while England recorded an increase of 3.7m to 41,147m. What has happened since, however, is equally interesting. England's population has risen by 37 per cent to 56.29m, Wales's by 23 per cent to 3.2m and Scotland's by an even more modest 7 per cent to 5.46m.
Wales is now down to 4.9 per cent of Britain's population, from 5.3 per cent after the war. Scotland has fallen from 10.4 per cent to 8.4 per cent. Meanwhile, England is three percentage points higher at 87 per cent. If the population of Wales had climbed at the same rate as that of England there would now be 3.56m people living in the country – half a million more. Each of these missing individuals represents a loss, or a potential loss, of employees, output, and creativity.
Would a break with the status quo make sense, therefore, and could it set Wales on a new trajectory that does not presage, as our present does, continued marginalisation within these isles? Could the cold turkey of coming off subsidy be a stimulus to the creation of a new Wales, one confidently able, albeit after a period of adjustment, to join the comity of nations? Other nations with similar numbers prosper, Indeed, a population of 5m, or roughly half as much again as Wales, seems a near optimum – as in Denmark, Ireland, and New Zealand.
As the Coronavirus crisis has shown, these countries may not have the means to develop new vaccines, though Denmark and Ireland do have internationally important pharmaceutical industries. Yet in terms of managing the spread of the virus they have done better than such scientific powerhouses as Britain and the United States. In this crisis, strong and consistent political leadership, and good on the ground public health systems, have been as important in managing the outbreak as world-leading epidemiologists, virologists, medical researchers, statisticians, and disease modellers. Possibly more so.
In other areas, too, small nations can be nimble, and can try different approaches. In an age when territorial aggrandisement is no longer the threat it once was, the defence advantages of being part of a bigger unit are less important. Indeed, the costs of trying to stay at the top table of military powers can be crippling, as the old Soviet Union found.
Trade, too, is now largely under multinational rules, making it more difficult for small nations to be bullied by their bigger neighbours when disputes occur. As the economist John Kay has pointed out:
"…there are few economies of scale in statehood. Size is as much a disadvantage as an advantage when it comes to carrying out the principal functions of modern government: justice, health, education, internal security."[1]
Yet a hard question for proponents of independence to counter is that in the past twenty years, Wales has had more control than ever previously over its economy, transport, health and education systems and has hardly made a good fist of it. Would a step further into the unknown be sensible? Where will the capacity to make the transformational improvements come from?
Yet, it can be argued that it is precisely because we are trapped within an economy overwhelmingly shaped in the interests of the City of London that Wales has failed to make economic progress. Fiscal analyses of the position of Wales as a region of the UK, it is argued, reflects importantly the result of its past and current status within the British state: a 'region' subject to economic policies formulated to serve the interests of the City of London and the South East of England. If nine of the twelve countries and regions of the UK are persistently in deficit, is the fiscal and economic model perhaps broken? It has not, and does not, deliver prosperity to Wales, and offers no expectation of doing so in the future.
A better model
During the past twenty years the Labour Welsh Government's frequently updated plans for boosting the economy have failed to produce the step changes needed in performance. Initiative weariness is being manifested. Leading economists and others have started to ask the independence question: might a new constitutional settlement with the rest of Great Britain deliver the desired results?
In an article in early 2020 Professor Mark Barry of Cardiff University rejected the idea that Wales might be too poor or too small to be independent. If it were true, he said, Wales would be unique globally, the only place where an independent country of 3m people could not exist. The question was could our economy and wellbeing be best served by Westminster/Whitehall or by something more radical and more common across the world.[2]
Yet, how the economy of a successful, independent Wales might function remains hard to delineate. Some clues might be taken from the report of the Sustainable Growth Commission chaired by former member of the Scottish Parliament, Andrew Wilson, which reported to the SNP Government in Edinburgh in 2018. It argued that Scotland has an economic potential that far outstrips its current longer-term performance, and that the ambition for the country should be to perform to the level of the best of the small advanced economies.
The report argues that a centralised 'big country' model which concentrates too much economic activity in London and the south-east region is holding Scotland and the other regions and nations of the UK below their potential. A similar point is made in a separate report by the UK2070 Commission under the chairmanship of Lord Kerslake, a former head of the Civil Service. It observed that 50 years of effort trying to rebalance the UK economy and create a fairer and stronger nation had failed, leaving Britain one of the most unequal and divided countries in Europe. It urged: "We need to adopt a strategy that allows London to sustain its global role whilst at the same time targeting some systematic firepower at raising the economic performance of regional Britain."[3] And it pressed for a change to Treasury rules that made it harder to justify expenditure in less populous areas, thereby favouring London and the South East.
Of course, this is the levelling up process to which the Conservative Prime Minister Boris Johnson is committed. So far it amounts to not much more than increased spending on roads, rail, schools, hospitals, and housing. There is little evidence of deep thinking on how the industrial and employment structure of regions outside London might be reshaped to reduce dependence on low-skilled and often impermanent jobs.
The Scots know what they would like to do differently, with all the powers of an independent state at their disposal. In most respects this represents a programme that a Welsh state would probably also want to follow, though the starting point would be further back in terms of existing economic strengths and institutional structures.
If the Sustainable Growth Commission's findings were implemented, the Scots would work up a model that used the three similarly sized economies of Denmark, Finland, and New Zealand. This, they note, is based on quality of governance, long term cross partisan strategy, a focus on innovation, competitiveness for international investment, exploitation of the country's resource endowment, export-orientation, immigration friendliness, maintenance of a highly skilled workforce and the use of the taxation system as a tool for economic development. For Wales, read Scotland.
The Welsh balance-sheet
Even so, it remains hard not to be brought back down to earth by the short, medium- or even long-term cost implications of opting for independence. Or, by the realisation that greater divergence rather than convergence with the rest of the UK economy may also be the result of maintaining the status quo, despite the Government's promised commitment to regional re-balancing.
Fortunately, reliable information is now available on the Welsh balance sheet through a report in early 2020 by the Wales Fiscal Analysis team at Cardiff University.[4]As a result the options can be considered more realistically than was the case previously. The UK Government's Office for Budget Responsibility has also this year produced its first Welsh taxes forecast. As such, we now have for the first-time detail on Welsh revenue and expenditure and the direction of travel. The stark truth: revenue raised in Wales is not set to show greater buoyancy but is set to decline further as a proportion of the total UK tax take.
However, before going further it is necessary to point out that calculations in these reports are pre-Covid. All predictions regarding the economy of Wales, Britain, Europe, and the rest of the world are guesswork. We can only surmise what shape recovery will take or what industries and regions will suffer most or least, or what the tax take and revenue spending of the UK or Wales, and the consequent fiscal gaps or surpluses will be.
Nonetheless, in March 2020 it was possible for the Cardiff report to state that at £13.5bn in 2018-19, the deficit between revenues raised in Wales and public spending in Wales was the second highest in the twelve UK planning regions after Northern Ireland. Public expenditure levels (outside certain areas such as infrastructure) are not, however, out of kilter with other regions. The Welsh deficit is primarily due to the lower tax revenues. In this respect Wales differs from Scotland where higher public spending accounts for the tax to spending deficit.
This lower Welsh tax take is mainly the consequence of lower wages. The UK income tax system is highly progressive, with by far the biggest share being contributed by higher income earners. Indeed, of the 440,000 additional tax rate payers in the UK, 300,000 are in London and southeast England, compared with only 6,000 in Wales. Analysis by the Office of Budget Responsibility reveals that only 44 per cent of the Welsh population paid any income tax in 2016-17, compared with 47 per cent of the UK population (a bigger proportion of whom will have been paying higher rates).
With just under 5 per cent of the UK population Wales has only 1.4 per cent of additional rate taxpayers earning more than £150,000 a year. Low wage levels also exclude large numbers in Wales from paying national insurance contributions. Welsh residents pay only 2.7 per cent of UK income tax revenues. If tax and national insurance contributions in Wales matched the UK per person average an additional £5.3bn would be raised.
Yet, although high levels of Government spending in Wales on social protection are maintaining living standards roughly equivalent to the rest of the UK, they are not contributing to the extent required to the rebuilding of the Welsh economic base. Infrastructure spending, essential to increasing the productivity and profitability of Welsh businesses, falls well short of spending in London and the South East where it is directed under current Treasury rules, because of the greater returns it will bring.
Thus, transport spending per head in Wales is less than half that in London, which has seen a succession of multi-billion pound rail projects over recent decades. This contrasts strongly with the struggle Wales has had to secure the funding for a potentially game-changing revamping of rail services into Cardiff. The current approach is to reward success in the south east of England rather than remedy under-performance elsewhere, a point also made in the UK2070 report.
Paying our way
How to increase Wales's ability to pay its way, whether inside or outside GB is the challenge. If GDP per person in Wales were to increase from its present level of 74 per cent of the UK average to 80 per cent by 2029-30 the deficit would, the authors of Wales' Fiscal Future estimated, halve to around 9.4 per cent of GDP. Substantial growth in Welsh output, spurred by rapid productivity improvements, must occur for this to happen, but progress on this scale and beyond has proved elusive to date.
Militating against this too is the larger than average share of the Welsh population of people over 65 and therefore not economically active, and a smaller under-16 cohort entering the labour market. Emigration from rural areas and to universities in England never to return and earn the higher wages – and pay higher taxes that their degree would facilitate – add to the problem.
Various reports have suggested that to catch up Wales – irrespective of independence considerations – must adopt radical new policies and adopt a researched strategic approach. This must involve investing heavily in education, research and development, and infrastructure. Rebuilding would place a greater emphasis on local sourcing, the attraction of inward investment from growing sectors, and the maintenance and development of a stronger cadre of Welsh-owned and managed businesses. The attraction of entrepreneurial individuals and the retention or return of Welsh students whose skills are currently lost after graduation in English universities would also be required.
The hope that lies behind the case for status quo – union in a continuing United Kingdom with, or without Scotland – is that the policies outlined in the most recent iteration of Welsh Government economic policies – Prosperity for All, An Economic Action Plan – will work in combination with UK-sponsored 'levelling up'. Government funding will switch away from the South East, and road, rail and broadband infrastructure spending will be concentrated not just in the north of England and other English regions but will be made available to Wales, too.
In this scenario Britain will have other eggs than financial services in its basket and will be making more of the products on which it depends in basic fields from foodstuffs to new areas in high technology and artificial intelligence. Many of the pioneering companies in these fields will decide to build in Wales (and similarly deprived English regions). Matching these developments Welsh schools will perform high up in the OECD Pisa league tables, and Welsh students will be trained in Welsh colleges and universities in the skills that successful economies of the future will depend on. Britain will have acquired once again the much more balanced economy that existed until several decades on after World War Two.
For all the good intentions of recent decades and the recent rhetoric of the UK Government, just how likely is this? The authors of Wales Fiscal Future are sceptical. As they say:
"A key challenge for those who want Wales to remain a part of the UK revolves around the likelihood of Wales's current economic, fiscal and social problems being alleviated under current constitutional arrangements. Given the relative trends in the Welsh economy since 1999, there is room for doubt whether such a relative improvement in Wales's economic performance is possible, let alone likely."[5]
It would mean reversing more than 40 years of a largely laissez-fair approach to regional policy that has seen financial services become the dominant sector supporting the UK economy and allowing other sectors to grow more quickly in future. Moreover, it would be necessary to imagine a Cardiff Bay Government being able to exert considerable leverage on Westminster to secure the transformational expenditure and diversion of resources to Wales that will be needed.
A different sort of union
It is for this reason that independence has been advocated as a breakthrough option. Our Fiscal Future makes clear that wide-ranging changes to both taxation and spending would be required from day one. Without fiscal transfers there would be a big bill to be paid in Wales for social security spending if current levels of service were to be maintained.
These costs will increase significantly over the next decade as a result of the damaging consequences for employment and society generally of the Covid-19 crisis.
Wales would at the same time have to negotiate with the rest of the UK, in effect the Westminster Government, a settlement of the expenditure that would continue to be incurred to service Wales's proportion of inherited UK debt. Other costs, for example on border protection, for belonging to international institutions, paying for overseas healthcare or for culture and recreation services, including the BBC, are attributed proportionately to Wales at present and would either have to continue to be provided centrally and paid for, or replaced with separate Welsh-funded services, depending on the choices made.
The arrangements made with the rest of Britain for defence – whether a continuation of the present system of unified armed services or establishing a separate Welsh force – would also have to be determined and costed. Because many of these items of expenditure would have to be maintained, the savings from leaving the UK might not make much of a dent in the deficit.
One important element in the current deficit may, however, no longer apply. Pension spending represents by far the largest part of UK government spending for Wales and the future financing of state pensions would need to be resolved before state separation. Currently the UK government pays the pension of British citizens who have fulfilled their requirements to receive a state pension, regardless of whether they choose to retire within the UK.
This would be the subject of negotiation between both governments but a continuation of the current practice making payments an obligation of the UK state could initially reduce Wales's deficit by £6 billion a year or around 8 per cent of GDP, although this would gradually taper off as new Welsh pensioners started claiming from the Welsh state.
Borrowing to replace the transfers now financing current account spending on benefits and other social protection would be an option. Because of the current world economic crisis, funds could indeed be obtained cheaply. Interest rates would still likely be higher than the UK is expected to pay, as lenders would factor in the default risks attached to lending to a new and potentially less creditworthy state.
In practice, a new Welsh Government would almost certainly need to put in place fiscal consolidation measures – tax increases and/or spending cuts – with the aim of bringing down debt as a proportion of Gross Domestic Product. The authors of Wales' Fiscal Future argue that closure of the deficit by 1.5 per cent a year would result in the debt to GDP ratio peaking at 73 per cent in 2030-2031. A 3 per cent a year improvement would see the ratio reach 44 per cent by 2026-2027.
The shock to the system could be alleviated if Westminster could be persuaded to continue to make transfer payments tapering down over a period of say 20-25 years. The argument would be that an independent Wales capable of standing on its own feet would emerge, lifting a burden from the rest of Britain, and thus in its interests. Other regions of the UK would, however, have to be convinced and it could be a hard sell.
Whether or not this could be negotiated, what are the prospects of revenues raised internally, matching over time existing subventions from the centre? Wales' Fiscal Future points to some areas where possible additional Welsh tax revenue might be raised, including from water and electricity supplies to other parts of the UK. However, given the competitive nature of the markets in which these utilities operate, it concludes the amounts would not be material. Desalination, in the case of water, and inter-connector supplies from France in the case of electricity would put a ceiling on the price Wales could demand.
A reformed tax system might offer amore promising approach.. An independent Wales would reconfigure the tax system to reflect the needs of the country. Some variations are already in place. Temporary changes made in the light of Covid-19 to the devolved Land Transaction Tax (LTT) raised the threshold in Wales from £180,000 to £250,000, and second homes were not granted this relaxation of the rules.
In England, the equivalent Stamp Duty Land Tax (SDLT) threshold was increased from £125,000 to £500,000 and this applied to all homes including second homes. The resulting change in LTT in Wales applies to ~90 per cent of all transactions but will not stimulate further the second home market. In England it has been estimated that the average saving from the SDLT change will be £646 in north east England, versus £15,000 in London. Once again, a tax policy, in this case for England only, formulated on a 'one size fits all' basis, skewed heavily in favour of London and south east England and in favour of purchasers of second homes.
As matters stand, the composition of the tax take in Wales differs in important ways from UK. Britain's income tax system is highly progressive. The highest earners make the biggest contribution, and this is even more marked in Wales where 46 per cent of the population pays no income tax, five percentage points higher than the equivalent proportion in UK. Higher rate tax is paid by 4.9 per cent of Welsh taxpayers, compared with 8.7 per cent in UK.
National Insurance revenues, another form of income tax levied on employees, are in line with the rest of the country but receipts from corporation tax are lower. Value Added Tax at 22.9 per cent of the total has, recently become the principal revenue raiser in Wales, overtaking income tax, the biggest UK source of revenues accounting for 23.7 per cent of the total.
Higher taxes on high earners could, however, lead to their leakage across the border to England. Higher VAT rates would target spending not income but would affect consumption and in practice add to the tax burden on poorer people not currently paying income tax. Higher tax rates on corporates could cause capital flight. Lower taxes, while potentially reducing revenue, could, however, lead to the attraction of companies (as Ireland has successfully demonstrated).
However, lower taxes might still require the acquiescence of the Treasury in England if retaliatory action was to be avoided. Modest Welsh demands for powers to levy Air Passenger Duty to help Cardiff Airport have been firmly resisted on the grounds that it might harm Bristol, even though its passenger numbers are four times bigger, and has big expansion plans.
Some critics see the projections in Wales' Fiscal Future as too pessimistic. Swansea economist Dr John Ball argues that the corporation tax take attributed to Wales is too low. He also disputes the size of the expenditure allocations, which include, he argues, a share of funding for some schemes that benefit only England.[6]
While inevitable negotiations on tax variance with the rest of the UK would be tough, care would also be needed to ensure at least in the short to medium term that UK-facing public sector offices – the DVLA in Swansea, HMRC and Companies House in Cardiff and the Office for National Statistics in Newport for example – were not stripped away, as English regions might demand. Westminster might be persuaded to allow such agencies to operate outside English borders but only if the services they offered were competitive with rival bidders, and perhaps only if broadly similar systems and services applied in Wales.
Welsh taxes
These dilemmas have led to suggestions of other novel forms of taxation. Wales is a transit route for many of the goods travelling between Britain and Ireland yet provides the roads and other infrastructure for this service at no cost in tax to the user in the case of foreign vehicles. An independent Wales could replace fuel duty with a road pricing scheme. Electronically gathered, like the Dartford Crossing fee and the London congestion tax, this would harvest rent from trucks and other vehicles making regular usage of Welsh roads, including visitors to tourist destinations and vehicles travelling along the A55 and M4/A40 to and from Ireland to England and the Continent. Such a levy would have to be set at a level that did not divert goods traffic to Liverpool and other ports and holidaymakers to other destinations.
A modest tourist tax could also be levied for use locally as happens in many US states and elsewhere. A pipeline tax on gas crossing from Milford Haven and a pylon tax on electricity leaving Wales are other possibilities though neither of these would raise substantial revenue.
Plaid Cymru's leader, Adam Price, has suggested more purposeful use of existing Welsh-managed taxes might be implemented. One suggestion, a Land Value Tax would usefully target a non-mobile asset that, unlike individuals and their businesses, could not up sticks in protest. This could, he argues, generate £6bn on current values at a 3 per cent rate, making possible reductions or replacement of devolved taxes such as business rates and council taxes, and of income taxes (where the Welsh Government already has some limited variation powers).
A study into such a tax has indeed been prepared for the Welsh Government. Reporting early in 2020, it estimated that the total value of residential land in Wales was £113.4 billion, and the total value of land underlying properties which currently pay non-domestic rates was £27.6 billion. A uniform national LVT rate of 1.41 per cent on residential land would be sufficient to raise the same revenues as are currently raised by council tax. A uniform national LVT rate of 3.9 per cent charged on the properties that currently pay non-domestic rates would be sufficient to replace that tax. Higher or lower rates, adjusted to local circumstances, could bring in extra resources or reduce the burden where deemed appropriate.
A UK Common Market
Other issues facing the Scots, and extensively rehearsed during the Scottish referendum campaign in 2014, would be replicated in any new referendum north of the border, and in Wales, which in any case is unlikely to progress towards independence or even a ballot before the Scots. Arguments over currency, trade barriers, monetary policy, and historic debt featured strongly then and would do so again if the SNP Government in Edinburgh were to win a second referendum during the next decade.
In a post-Brexit world the degree of integration of the two countries into the UK economy – the most important export market being England – suggests both (and Wales especially) would find it impossible not to be part of a UK Single Market, rather than standing alone. (Whether or not it would be a Britain and Northern Ireland market will depend on the constitutional and/or trading status of Northern Ireland remaining the same as relations between the UK and the EU bed down post-Brexit.)
Within such a market an independent Wales would not be able to enter separate trade deals with other blocs or nations, and would any way lack the capacity to do so, possibly for many years. It would instead have to adopt arrangements negotiated for the whole market. Wales would be expected to demand representation within negotiating parties but might in practice be in no stronger a position to influence outcomes than it is now.
It is possible to consider the notion of Wales leaving the rest of the UK common trading area and joining the European Union (as the current Scottish Government wishes to do) at some point in the future. However, this could only occur many decades ahead after Wales had engineered a transformation in its trading profile, replacing its closely interwoven trade links with England with similar close links with Benelux, Germany, France, and other EU countries.
Wales has a slightly bigger share of exports heading for the EU than the UK generally, but probably a similar import profile. However, the bulk of these exports are concentrated in a few products and sectors, notably aircraft wings and other aviation components, vehicle engines and refined oil products. Most Welsh businesses are not engaged in exporting. It would be unrealistic, therefore, to suggest Wales, as Scotland envisages, might seek entry to the EU post-independence, if England chose not to do so.
An export growth strategy designed to increase the value of exports, and diversify sources of export income, as the Irish have done, is one of the main recommendations in the Scottish report and would be even more necessary in the case of Wales – which does not have the huge export-orientated whisky sector or even a declining oil asset as a foundation stone of its overseas sales – to reduce dependence on the English market.
There is a parallel here with Ireland, which, as its economy stood at the time, could only follow the lead of the UK when the decision to join the EU was taken by the Conservative government in Britain in 1974. Such was Ireland's dependence on the UK at that stage it would have been impossible for it to join separately, or stay outside once Britain had decided to enter. Over the past 40 years this situation has changed considerably. Ireland has built up an enviable export trade with the EU and the rest of the world in food, pharmaceuticals, industrial equipment, computers, mineral ores, and other products, and can regard Britain's departure from the bloc with equanimity and comfortably remain a member independently.
The long drawn out negotiations over the land border between the Irish Republic and Northern Ireland, resulting in a very unclear arrangement which may not long survive implementation, offer a further caution. The arrangements for trade between Wales in the EU and England outside would be equally if not more difficult to formalise.
Again, links with England make it more difficult to argue the case for a separate Welsh currency. Though countries as small or even smaller than Wales have proved capable of managing a currency of their own, a Welsh currency would impose transaction costs on businesses that would make Welsh operations less competitive than those on the other side of the border with England. However, there are advantages in having a separate currency, not least the ability to revalue as appropriate to reflect changes in competitiveness, but these longer-term benefits would have to be forsaken if immediate damage to Welsh firms was to be avoided.
There are similarities here, too, with Ireland. Before both countries entered the European Communities (as it then was) Ireland was part of the sterling area with the same coins and notes but bearing Irish symbols.
On Irish entry into the Exchange Rate Mechanism in 1979, the Irish punt decoupled from the £ sterling and a separate central bank was created. This allowed the punt to move up and down against sterling, sometimes being more valuable and sometimes less, reflecting the month-by-month competitiveness of the Irish economy vis à vis the UK. (The punt ceased to exist when Ireland joined the Euro.)
These limitations expose a further problem. If a post-independence Wales were to share a common currency with the remainder of the UK it would have to negotiate the right to share in decisions on monetary and interest rate policy. Leverage, however, would rest very heavily with rest of the UK.
So, while independence can be promoted as a way out of Wales's chronic weaknesses economically and socially, there are limitations on the extent of that status. Links with England, in what would remain a union to a lesser or greater extent, would need to be factored in.
A middle way
In the immediate future a two-stage process might be the way ahead. Rebuilding the economy has been a Sisyphean task for the past four generations. It must continue to be a priority of the Welsh Government which should insist it stands at the heart of the UK Government agenda.
Once recovery from the Covid-19 pandemic has taken place and other issues can be brought forward, UK Government must be held to its promises to level up the UK economy in a meaningful way. Even more importantly, the current Welsh Government, and its successor in 2021, needs to ensure that its voice is heard as loudly as that of the Midlands and North of England, now under the leadership of increasingly vocal mayors.
Against Treasury restrictions, the Welsh Government must endeavour to increase its capacity to borrow for capital spending. It must also have more leeway to shape Welsh business to meet domestic needs without any impact on the Treasury block grant Wales receives. These measures will add to the Welsh deficit and to Government debt. However, they will have the effect of reversing rather than ameliorating current economic weaknesses, as the present funding arrangements seek to do. In other words an ambitious investment programme to 'pump prime' the Welsh economy is required: an approach which was abandoned by UK governments when the UK joined the EU.
The key demand must be that additional finance is deployed through borrowing and more importantly through the proposed UK Shared Prosperity Fund. This will need to go beyond the EU funding that is being lost, so that Wales and other regions can protect against climate change and develop the industries needed for this purpose. Wales will want to improve its transport and technological infrastructure, strengthen its local economies, and participate fully in modern business sectors.
Wales must become less dependent on FDI, and branch factories. The needs of its population dictate the necessity of more technologically advanced businesses, more locally owned businesses, more headquarters businesses, better education for work in business, and more effectively trained managers. It wants to be making greater use of its natural resources to develop a strong food and agriculture sector, its creative industries, its financial and professional services, its biosciences, tourism, and leisure activities. More research into the business needs of the Welsh economy is a priority.
In short, Wales needs an economy that is much more like Denmark or Ireland to make independence seem a realistic prospect for the people of Wales. The challenge is to demonstrate the kind of economy and society that Wales would seek to create and ensure it is one that Welsh people would be comfortable to opt for. A significant strengthening of the economy in the short and medium term will improve the lot of Welsh people and, further ahead, put Wales in a position where an independence option can be put forward that would seem less of a risky leap of faith.
Sceptics will still have a field day and in fairness the record to date is not encouraging. Yet, there is a simple question that can be posed. If Ireland had not decided 100 years ago to break with Britain, would it now be among the richest parts of these isles, up there with London and the south East? Or would it be poor old Ireland, down there with Wales as one of the weakest of the twelve UK economic planning regions?
The role of the Welsh civil service should be re-examined to separate economic policymaking and implementation.
A new inward investment focus is needed on businesses capable of offering high quality jobs, even if initially in small numbers, in technology, health and sophisticated consumer-facing products. Potential investors in new technology nations need to be cultivated and contact deepened with alumni of Welsh universities overseas.
The export propensity of Welsh firms needs to be encouraged and stimulated to increase revenues and help increase the productivity and scale of Welsh business. Wales should search for businesses that might be relocated back in Britain for strategic security, environmental or other reasons
The role of the Welsh Development Bank should be expanded to ensure that state support for key sectors can take the form of direct Welsh Government stakes.
The foundation economy should be put at the centre of policymaking and incentives and penalties to secure greater public sector purchasing put in place. A wholesaler type body should be created to aggregate private sector provision and support tendering, together with a facility through which companies could make their offering more widely known.
In the aftermath of the Covid-19 crisis a window for a much greater emphasis on local production and procurement will open and this must be seized. Support should be given to businesses seeking to re-shore products currently made elsewhere, and further efforts made to ensure Welsh food producers contribute a bigger share of the nation's food purchases.
An incoming Government should review the entire Welsh higher education sector to ensure its priority is meeting the needs of the Welsh economy and society. It should set in motion measures to ensure more Welsh students stay in Wales for their degrees and their subsequent careers and that those going elsewhere are encouraged to return.
Policymakers need to be equipped with better business intelligence on the needs of the Welsh economy. Welsh Government and business should back the creation of a new university centre for the study of Welsh business and business needs.
Rhys David was a member of the Independence Commission 2020.
Copies of the full report priced £9.99 can be obtained from the publishers, Y Lolfa, or from bookshops and Amazon. ISBN 978-1-80099-000-5
[1] John Kay, 'Size isn't all that matters for global economies', Financial Times, 26 November 2003.
[2] Mark Barry, 'What sort of Wales do we want?', Nation.Cymru, 8 March 2020.
[3] UK2070 Commission, Fairer and Stronger. Rebalancing the UK Economy, May 2019.
[4] Guto Ifan, Cian Sion, and Ed Poole, Wales' Fiscal Future: A Path to Sustainability? Wales Governance Centre, Cardiff University, March 2020.
[5] Wales' Fiscal Future, op.cit, p. 35.
[6] John Ball, The Economics of an Independent Wales', ClickonWales, 23 January 2020.
To give to street dwellers or not to give? Rhys David reflects on a modern dilemma.
I spoke to Wayne, a homeless man in his 40s, possibly 30s in Cardiff the other day, his time on the streets having made his age impossible to guess accurately. I had just left a local Kaffeehaus where I had enjoyed their Wiener – soused herring and cream cheese on rye bread with red onion – and a Cafetiere, all for £11.
My meal had followed a visit to a piano recital by a brilliant left-handed pianist, Nicholas McCarthy, who had overcome the handicap of being born with only one arm to become a concert performer travelling the world to play his repertoire of Bach, Scriabin, Bellini, and, his piece de resistance, his own transcription for one hand of a well-known sonata by Rachmaninov.
It was humbling enough to think about how much he had achieved and how difficult life must be when even cutting up food or opening a door when you are carrying something, but Wayne was different again.
He cut a pitiful picture standing in the rain just outside the arcade I had been in, opposite the international fashion shops in one of Cardiff's main streets, and close to where a new branch of The Ivy restaurant will open soon. He was dressed shabbily and carrying a threadbare blanket, and crying audibly as he begged, "Help Me". This was not the usual bobble-capped, sad young man, sitting in a doorway with his dog.
I must admit to being usually unsympathetic to beggars, many of whom may have a drug habit to support, but I have been known to pass on bananas, cereal or other chocolate bars rather than money. Wayne, however, looked so needy I felt I had to come up with cash in his case, and I reached not very generously for a £1 coin. Amid his effusive "Thank you, Sir's" I asked him, "How on earth did you get into this situation?"
"Do you know the Sony plant in Bridgend," he asked. I assented. "I lost my job and my house when I was made redundant, my partner was pregnant, and we split up." I did not ask too many further details as it seemed a story I had read before in press coverage of the homeless and it seemed believable. He went on to say he had been begging since the night before, had not eaten since yesterday (it was now 3pm) and was trying to save £17.50 to stay in a hostel where he could get a bath, a meal and a bed. His day's total so far was about £6.
I queried whether it really was the case that he would have to pay for a hostel bed, and he assured me it was just so in three hostels he mentioned in Cardiff, including the Salvation Army. They would turn him away, he insisted, if he was unable to pay. Wayne was fluent, clean and did not smell of drink or have any of the obvious signs of drug-taking so I found myself reaching again into my pocket and this time fetching out a £10 note, which should, I calculated, take him close to his target for the day.
I told him he must see a doctor, but he said he was just regarded as another paranoid schizophrenic. He had started hearing voices since being on the streets, partly because of the rough treatment he received from unsympathetic and especially drunken louts. "I've lost half my teeth from being beaten up (he indeed had) and been weed on," he told me. I also told him to ditch his rag blanket. It was his only possession in the world, I was ashamed to learn.
I pride myself on being nobody's fool and would normally say to myself in such situations that it was much better to give to the relevant charity (as I do), though not in the quantities I perhaps should. Somehow, I could not help believing Wayne and feeling deeply sorry for him.
Was I being conned? Did Wayne live in a modest but reasonable property somewhere, get up each morning, grab his blanket and head off for the city centre, returning at night with his takings? Was he really telling the truth when he told me he had to collect money simply to be given a bed in a hostel, with a lot of other homeless persons? Did he not, as he told me, have a single relative in Bridgend? He was of an age to have aunts and uncles still, and presumably cousins? Would they all slam the door on him? School friends, former work colleagues?
Were his little girl's curls, on which he swore that he was not on drugs, real? Was he avoiding hostels because of debts to drug dealers, as is sometimes said to be the case? Have I unwittingly put profits into a drug dealer's hands and prevented Wayne from being forced though his own impecuniosity to quit and accept treatment? If someone destitute – as Wayne clearly was – presents him or herself to the local council will they not be helped regardless?
I passed Wayne again later by which time he had bought a cup of coffee. I did not blame him for indulging in that little luxury (for him), even though I was intending my funds to secure him a hostel place. He greeted me again with copious Thank You's, all embarrassingly accompanied by the poor man's respectful "Sir". He was looking more cheerful now and I remembered that not having eaten myself before going to my pre-lunch concert I had been into Poundland and bought a £1 nine bar Twix pack, only one of which I had had myself. I took the remaining eight out and gave them to him to have with his coffee.
Perhaps I was naïve, and the authorities know all about Wayne (a small variation on his real name). Whatever the case the £12 that my encounter unexpectedly cost meant nothing to me in the grand scheme of things but was perhaps a welcome sign of kindness in a harsh world to someone else. Anyway, I had another rich man's event to attend, with buffet, at the Royal Welsh College of Music and Drama. Only two thirds of the buffet were eaten, but perhaps it was not wasted as I saw some students being invited to help themselves as we made our way out ……
Posted in Uncategorized, WalesTagged Economy society WalesLeave a comment
Well received on publication in 2014 to coincide with the one hundredth anniversary of the start of World War One, Tell Mum not to Worry: A Welsh Soldier's War in the Near East was based on the letters of Dewi David, a sapper in the Royal Engineers who spent four years from the ages of 17-21 on campaigns which led him to first Gallipoli, then Egypt, the Suez Canal, Sinai and Palestine, culminating in the capture of Jerusalem by British forces under General Allenby in December1917 and the eventual surrender of Ottoman forces. His experiences and the story of the campaigns by British Empire forces in the Near East are told in the book above (ISBN 9 780993 098208). Deffro: Cardiff 2014).
The Dewi David Letters written to his parents and sister are now available to be seen by scholars and other interested parties in the Imperial War Museum, London. Fifty in all and totalling more than 120,000 words they can also be found in published transcript in Tell Mum Not to Worry: The Letters (ISBN 978-0-9930982-1-5). The letters can also be by contacting the author Rhys David on Linked-In.
Posted in World War One, World War OneTagged History Wales World War OneLeave a comment
Why is Wales not a Cricket Nation like Scotland and Ireland?
Posted on July 5, 2019 April 22, 2021 by Rhys David
When a new cricket competition – the European T20 cricket league – is held from 30 August 30th to 22 September 22nd this year, one nation with a long tradition of playing the game will be absent. Current European rugby champions, football's European Cup semi-finalists last time the event was held in in 2016, birthplace of the 2019 Tour de France winner, the highest-paid footballer in the world and of the captain of the last two Lions tours, the proud sporting country of Wales will be on the side-lines.
Cricket in Wales, it would seem, is Glamorgan, or exists to be an "event" that brings people into Cardiff to watch England Test matches or international series, and the club. The Welsh Government seem determined to keep it that way.
The new competition will be similar in style to other well-known T20 leagues around the world, featuring city-based franchise teams (two each from Scotland, Ireland and the Netherlands). The tournament will involve 33 matches across all three countries, featuring a Group Stage followed by semi-finals and a final. Each franchise must have a minimum of nine domestic players, and up to a maximum of seven overseas players within their squads. Of the 11 players taking the field in each match, six players must be domestic cricketers.
The tournament, which International Cricket council (ICC), has helped to develop will be delivered under an initial 10-year agreement with event and funding partners GS Holding and Woods Entertainment, and will be broadcast in cricket markets globally.
So why have Welsh cricketers – whose numbers match or even exceed those of the other three countries – not been invited to join this event and make it a four-way tournament? To understand this, some context is needed. Cricket in Wales comes under the jurisdiction of the England & Wales Cricket Board, (acronym ECB not EWCB), which took over responsibility for the game from the Marylebone Cricket Club (MCC) in 1997.
Within Wales amateur cricket is organised into a North Wales Premier Cricket League and a South Wales Cricket League, both of which consist of 12 teams that play each other every season. Several of these teams have featured prominently over the years in the Village Cricket Cup, competing against 300 teams from across the British Isles to play in the final at the home of cricket, Lord's. Past Welsh winners include St. Fagans, Gowerton, Sully Centurions, Marchwiel, and Ynystawe.
Professional cricket in England and Wales is represented by the 18-team County Championship. Glamorgan has been the sole Welsh member since joining in since 1921, winning the competition on three occasions 1948, 1967, and 1997. Over this period of nearly 100 years more than a dozen Glamorgan cricketers have represented England. One of these Tony Lewis captained the England team on eight occasions, leading the MCC party that toured India, Pakistan and Sri Lanka in 1972-73.
The best-known Glamorgan Test players, apart from Lewis, are Maurice Turnbull, Gilbert Parkhouse, Allan Watkins, Jeff Jones, Greg Thomas, Hugh Morris, Simon Jones, Robert Croft, and Steve Watkin. Wilfred Wooller, the Glamorgan captain in the 1940s and 1950s, was never capped but was an England selector for many years.
It is essentially this status in English cricket that Glamorgan and the Welsh Government are determined to maintain, and which makes them refuse to support the idea of a Welsh team. Glamorgan has consistently opposed the idea of a Welsh team on the grounds that it could compromise its finances and its position within the English County Championship. Cricket Wales has also opposed independent status arguing it is preferable to play a major role within the ECB. Glamorgan chief executive, Hugh Morris, has argued that a Wales national team does not make any sense "financially" whatsoever.
In addition, both Cardiff City Council and the Welsh Government argue inclusion within the ECB is a very useful peg on which to build Cardiff's reputation as a sporting hub capable of attracting large number of high-spending UK and overseas visitors to England matches. These include games in the Ashes series against Australia, and against other full Test sides, in one day internationals, or special events such as the recent Cricket World Cup.
Such events do not come cost-free, however, as the right to stage them must be bid for and won in competition with the main English venues. Making Glamorgan's home at Sophia Gardens in Cardiff fit for international cricket has also proved expensive, not least for the council taxpayers of the city, some of whose loans to the club have had to be written off. A similar strategy has, of course, seen costly efforts put behind attracting other international sporting events, such as European Champions League football, to the Principality Stadium.
The hold that this thinking has on the Welsh Government was made clear in a response to a question in the Senedd from Plaid Cymru AM, Bethan Sayed, in July by Eluned Morgan, Minister for International Relations and the Welsh Language, in whose brief cricket as an "event" project sits.
Noting that any decision to establish a Welsh cricket team (or we can assume by extension to take part in events such as the European T20 league) is a matter for the governing body of Cricket Wales, she said: "Any discussion around this issue would need to be framed by what is best for cricket in Wales on both a participation and an elite level. For Wales to have representative teams of its own, it would have to break with the ECB and become affiliated to the ICC instead. This would have significant funding implications as Glamorgan Cricket Club and Cricket Wales receive funding each year from the ECB. If Wales was ratified as an associate member of the ICC, it may (my italics) expect to receive a significantly smaller grant.
"The reduction of funding would undoubtedly (my italics again) have a significant negative impact on both the professional and recreational game in Wales. Both Cricket Wales and Glamorgan County Cricket Club are of the view that the establishment of a Welsh cricket team would not be of long-term benefit for the growth of the game in Wales."
So, there we are then, except that Cricket Scotland and Cricket Ireland, both of which have grown the game over recent years from a smaller base than existed in Wales appear to take a different view. Here is Malcolm Cannon, Chief Executive of Cricket Scotland: "Cricket Scotland is always looking for more fixtures against high-quality opposition to develop the talent in our national team. The proposal for a six-team European tournament featuring teams from Ireland and Netherlands provides an excellent basis for Scottish cricket to prosper.
"Off the back of our highest ever global T20 ranking of 11th, the tournament comes at a fantastic time for Scottish cricket. The chance to play alongside some of the best in the business will provide a great opportunity for our players to learn and develop their own skillset as we strive to achieve full membership (i.e. Test-playing status) and climb the ICC team rankings.
"The league also comes at an important time of year for Scotland, with the proposed timeframe presenting an opportunity to play quality competitive cricket ahead of the ICC T20 World Cup Global Qualifier in UAE in October. We are excited to bring the global phenomenon of T20 franchise cricket to Scotland, with our vision to have two city-based teams in Glasgow and Edinburgh.
"Not only will the tournament help develop our players and coaches, we hope the tournament will increase public perceptions of the sport as well as engage communities around our franchise teams, with the opportunity to watch top cricketers from across the globe. …Cricket Scotland very much looks forward to watching Scottish cricket evolve over the next 10 years."
Compare and contrast this with Hugh Morris, who has responded in the past to suggestions of a Welsh cricket team operating within the ICC Cricket Board with the somewhat alarmist warning that such a development could threaten Glamorgan's continued existence even. "We would lose our stadium. We would lose our players. I have not seen a business plan to see how it can work. We are very much wedded to the England and Wales Cricket Board in terms of finances", he said.
He went on to declare he could not see how Glamorgan and Wales could be natural bedfellows. Wales, he argued, would be playing in an ICC league with other countries, and at the same time as Glamorgan.
So, what is best for Wales? Staying close to nurse (the ECB) for fear of something worse (the ICC) or taking the bold move of declaring cricket independence? Cricket has been expanding internationally and the number of first-class international sides has grown. Twelve countries have full membership of the ICC – England, Australia, South Africa, India, Pakistan, Bangladesh, West Indies, New Zealand, Sri Lanka, Afghanistan, Ireland, and Zimbabwe. Ireland now plays full Test matches, famously out-playing England in the first two innings of their recent match before falling short on the final day.
In addition, there are 93 associates in countries where cricket is firmly established but not yet ready for full membership. These include Scotland and the Netherlands, both of which regularly host international sides, though generally only for One Day International matches (ODI). Zimbabwe, for example, is touring the Netherlands and Ireland this year and Scotland has played ODIs at home against Sri Lanka and Afghanistan and has fixtures in August against Papua New Guinea and Oman in India.
Before the present arrangements were in place Ireland famously defeated the West Indies side in its pomp at Sion Mills in 1969 and now play in the European Cricket Championship. Ireland and Scotland moved out of the ambit of "English" cricket, where like Wales they had previously existed, in 1993 and 1994 respectively to create separate associations for the development of the game in their countries, Before playing England in July this year, Ireland had already graduated to full Test match status with a fixture against Pakistan and is hence on a journey to appearing regularly at the highest level of cricket.
In Wales we can only look back and reflect that cricket has been played since at least the first recorded match in Pembrokeshire in 1763 (several years ahead of Scotland). There are 230 amateur clubs in Wales compared with 140 in Scotland, (which like Wales has its own league) and an estimated 14,000 Welsh-based players. Yet, the highest level of representation Wales achieves is as "Wales Minor Counties" in the English Minor Counties, Western Division, a sort of second division to the County Championship.
Interestingly, Wales has had international cricket sides at various points throughout the past 100 years and they have had some notable successes. Wales played England three times in 50-over matches between 2002-2004 and even managed to win the first encounter to the amazement of all. A Welsh side also appeared 16 times in the 1920s playing among others New Zealand (drawing) West Indies (winning) and South Africa (losing). A Welsh team also featured in the ICC Trophy in 1979, and in a Triple Crown championship with Scotland and Ireland between 1993 and 2001.
Several attempts have been made over recent years to argue the case for a Wales cricket team, including not surprisingly by Plaid Cymru. In a Senedd debate in 2013 both Conservatives and Labour members lent their support to the idea of a revived Welsh side, and the case was also made again in 2015 by Bethan Sayed. In 2017, First Minister, Carwyn Jones, called for the re-introduction of a Welsh One Day team.
The question is complicated to some extent, it must be admitted, by Glamorgan's position as one of the eighteen first class county sides but would Glamorgan really have to leave or be forced to quit the county championship, as some fear? There are currently non-represented English counties – Devon, Lincolnshire, Cumbria, Cheshire, Berkshire perhaps – which might welcome the chance to take the county's place in the County Championship if Welsh cricket was separated from the English set-up.
This sounds very much like special pleading, however. Wales has an international football side, and this has not prevented Cardiff City, Swansea City, Newport County and Wrexham from playing in the English football professional system so why need Glamorgan lose its place in the county championship?
Again, would Glamorgan necessarily be weakened by the emergence of a Welsh side competing independently? Several decades ago, Glamorgan consisted mainly of Welsh players plus a few overseas stiffeners. Today the side is almost entirely composed of cricketers from outside Wales and a handful of Welsh players, so a Welsh team would hardly be drawing on the same resources. Nor need matches be played in Cardiff in competition with Glamorgan. Swansea has a long tradition of support for cricket and lost out, much to its chagrin, to Cardiff when Glamorgan decided to concentrate most fixtures at Sophia Gardens. Swansea could be the new home of Welsh cricket. Matches could also be played in other venues around Wales, as was previously the Glamorgan practice.)
Surely, with a genuinely Welsh side playing in Wales in fixtures against other nations interest in the game in Wales and participation (by men and women) could only grow? This could ultimately benefit Glamorgan and perhaps generate a larger cohort of players locally who might go on to play professionally for the county.
A Welsh side would also give Welsh-qualified Glamorgan players – and there are still a few despite the internationalisation of the county side in recent years – the opportunity to play international cricket for a Wales team. Though they qualify to play for England at present it is only every few years that a Glamorgan player manages to break into the side and no Welsh player is currently in that position. The very best players might still choose to do so. After all, England's One-Day captain, Eoin Morgan is an Irish national with a Welsh surname.
And let's face it Glamorgan has not been pulling up trees in the English cricket system since it last won the championship more than 20 years ago, finishing bottom of Division Two last year (i.e. eighteenth out of eighteen in English first class cricket) with just two wins all season. Perhaps too much time and effort has been put into creating a stadium fit for Test matches and ODIs to the detriment of cricket in Wales generally. (Thankfully, Glamorgan are doing a lot better this year and if current form is maintained could challenge for promotion to Division One.)
England might stop playing Test matches or ODIs in Cardiff if there were a separate Wales side. But is the role of super-host the best we can hope for when Scotland and Ireland, both with smaller cricket-playing populations, build their game and international reputation? At least some of the revenue that would be turned away if Wales left the England and Wales Cricket Board to set up its own board (and lost the right to host England matches) could be recouped through Welsh international matches.
The recent World Cup which brought together the ten best one day cricket countries, has shown how much pride can be derived by the smaller countries from appearing in tournaments such as these, and occasionally outplaying the more senior sides – Afghanistan came close to winning their match against India. Scottish, Irish and Dutch cricket are also going to gain a lot of media coverage – and income from attendance and sponsorship – from their tournament.
Surely it would be good to see Wales attempting over time to appear in events such as the World Cup or to put forward teams for a league competition, as well as regularly playing versions of the game against comparable countries in Europe and some of the aspiring African and Asian nations? This could serve as an encouragement to young people to take up the game and help to raise performance standards throughout the sport in Wales.
Who knows, one day we might like Ireland give England a run for their money?
Rhys David is Chairman of Nova Cambria
www.clippings.me/rhysdavid
www.novacambria.wales
Posted in UncategorizedTagged Economy Sport WalesLeave a comment
Reshaping transport provision: Time to end Wait and See
Posted on June 20, 2019 April 22, 2021 by Rhys David
The plan by First Group to quit its UK bus operations could release one of the building blocks needed to create a more integrated transport network across Wale.
There is a tendency in Wales in economic matters to wait to see what happens, an expectation that external agents will always determine what happens and that the limit of Wales's influence is to try to ameliorate any ill-effects. Yet, what is needed very often is a much more pro-active approach whereby the initiative is taken in Wales to shape what happens, in the best interests of those involved.
Just such a case has occurred with the announcement by First Group that it is considering selling its UK bus operations to concentrate instead on the US market. Now, it just happens that First Group for better or worse runs the buses in Wales's second city, Swansea, having inherited the operations of the former South Wales Transport and United Welsh, the two previous operators of the bulk of services in the area.
Aberdeen-based First (also operators of the Great Western Railway franchise) has made its intentions to quit the UK bus market following pressure from an activist investor, unhappy after a series of bad rail investment decisions hit profits. In West Wales First Cymru runs local bus services not just in Swansea, its operations extending across to Neath, Port Talbot, Bridgend and Maesteg in the East and Haverfordwest, Tenby and Carmarthen in the west, plus express services to Cardiff.
Various bidders will no doubt emerge for First's operation, including those in Swansea, but it is doubtful if any of them will come from private sector companies within Wales. So, as Plaid Cymru leader, Adam Price pertinently asked in questions to First Minister Mark Drakeford in the Senedd early on June 4th, does this not provide an ideal opportunity to extend within Wales the principle of public ownership of transport services? This could create another building block towards the creation of an integrate transport system in Wales, which could bring together control and management of rail, road and other public transport services. After all, the Welsh Government has taken a step in this direction with the acquisition of Cardiff Airport.
Firstly, however, it is worth offering some background. Britain's bus services were deregulated under the 1985 Transport Act, with the promise of bringing lower fares, new and better services through greater competition, and, in consequence, increased usage. Previously, scheduled bus services had been run by National Bus, (which had brought together a patchwork of state-owned, semi state-owned and private companies), municipal bus companies and a small number of private operators.
At the time of deregulation more than threequarters of bus turnover was in the hands of the public sector but to raise revenue for other purposes many local authorities took the opportunity over succeeding years to sell off their bus operations to private sector companies, principally Arriva, Stagecoach , First Group, Go-Ahead and National Express. Only 12 municipal operations remain, including Cardiff Bus (UK's third biggest) and Newport Bus. Three other local authorities run buses in Wales, Caerphilly, Monmouthshire and Pembrokeshire but only on a very limited number of routes where no alternative provision is available.
The Government held back from deregulating bus services in London. Instead, it vested overall transport powers in Transport for London, which directly runs London Underground, London Overground and Docklands Light Railway, and franchises bus services to ten private operators, including German state-owned Arriva (Deutsche Bahn), Dutch state-owned Abellio, and French state-owned RATP. It is also responsible for Crossrail and London's roads.
Deregulation has failed to deliver its promises and the London model, whereby services come under the office of the Mayor and the London Assembly, has proved much more effective. The 30 year plus period of private operation outside London has created private monopolies rather than genuine competition. The Competition Commission noted in a report the emergence of "geographic market segregation" whereby the big five operators (Arriva, First Group, Go-Ahead, National Express and Stagecoach) leave each other to operate in their chosen territories, undisturbed by competition. [1]
The companies are free to cut services as and when they choose in this unregulated environment and have increasingly been doing so as subsidies from local authorities for uneconomic routes are withdrawn, leaving many parts of the UK, including Wales, with limited or no provision. Services have, nevertheless, been mostly profitable for the operators and fares have increased since1995 by more than 150 per cent against a rise in the cost of living of not much more than half that figure.
The Welsh Government recognised in the case of Cardiff Airport that it was important the facility was in the hands of an operator with a strong public service mission and First Minister Mark Drakeford in his reply to Adam Price indicated there was no current intention to sell the airport back to the private sector.
There is an equally strong case for an early approach to be made now by Welsh Government to establish whether First Group would be prepared, preferably in advance of the wider sale of the subsidiary, to divest First Cymru to a Welsh Government-owned not for profit entity.
The price First Group might demand is not clear and will depend on the profitability of the Welsh operations and the value of the assets (the bus fleet, engineering workshops and depots). First Group might also not want to break up its business before or at sale time, though the transfer of assets between transport companies is an established practice. Though It may not be the best yardstick as it was a much smaller company, ComfortDelgro acquired south Wales bus operator, NAT, which now runs services in Cardiff, Newport and the Vale of Glamorgan, for £14m in 2017.
The mechanisms by which such a transfer to the public sector could be achieved and the structures required will need to be explored but the opportunity has been created for Transport for Wales to be given the wider responsibilities that its title implies. As set up, its remit as a not-for-profit company is to provide support and expertise to the Welsh government on Welsh transport projects. Unlike Transport for London it does not own or manage such projects on a day to day basis. Its role is merely to plan, commission and arms-length manage. It employs only a relatively small staff.
It has a very limited bus remit, its main workload being in the rail sector where it was responsible for procuring the most recent Wales and Borders rail franchise (won by Keolis Amey of France/Quebec. It is also charged with bringing forward the South Wales and North Wales Metros. A current task is to investigate the causes of the decline in bus patronage in Wales, with the aim of proposing a range of solutions and exploring what has worked elsewhere. [2]
Transport for Wales would need to be reconstituted to take on an executive role but a new body with statutory powers could represent a first step towards creating a provider that could work much more effectively to integrate transport in Wales across buses, rail, airports, seaports and roads. Alternatively, as an intermediate step, the Swansea Bay City Region could be given the task of running bus services, putting it on a similar footing to the English cities that have accepted devolution deals, and which now have transport responsibilities in their portfolios.
The example of Cardiff Bus and Newport Bus, both of which run modern fleets could be adduced as evidence of how good public service provision can work and produce returns for the taxpayer rather than profits for the shareholder. Public pressure for moves towards clean air technology is also much more likely to be effective when directed towards operators within the public sector than to those operating as private companies. Since acquiring NAT, ComfortDelgro has chosen to recycle some of its older London buses for use as school transports in Cardiff. Wales, is of course, already familiar with cast-offs from rail companies and the London Underground on its rail network.
There is also a wider economic case. Large sums of money are spent by the Welsh Government subsidising public transport in Wales through the concessionary fares offered to bus pass holders. Bus companies also qualify for a UK Government fuel rebate to help keep services viable. Except in Cardiff and Newport, a proportion of Government bus pass funding is finding its way into the profits of companies based in England, Scotland, France, Germany, the Netherlands and Singapore. It would be much better if this money was recycled in Wales in the creation of better overall transport provision.
The expertise question will no doubt arise, but it has already been demonstrated by the comparative success of Cardiff Airport since it was acquired from its absentee Spanish ownership that public sector control can work in commercial areas. (Local authority-owned Manchester Airport is the prime example of this, turning the northern city into a commercial and financial powerhouse). And unless Wales tries and risks failing, it will never acquire skills of this sort.
If Wales fails to acquire First Cymru in one form or another, the business might well be acquired by Abellio, Arriva, or RATP. Would it really make more sense for Welsh bus operations to be owned by the Dutch, German or French governments than by the Welsh government?
Rhys David is chair of Nova Cambria, the Welsh think-tank
[1] Where competition has occurred, it has usually involved a new entrant seeking to undercut on existing routes rather than developing new ones. This has resulted usually in the incumbent having to cut less profitable services to protect revenue and profitability. In Cardiff Singapore-owned New Adventure Travel, (NAT) has been challenging the municipal operator. Cardiff Bus has recently reported losses and has been forced to re-order its services and schedules.
[2] Keolis Amey Cymru trades under what is in effect a fig leaf name -Transport for Wales Rail Services – which is the branding that has now replaced Arriva Trains Wales on Wales and Border Services. This carries the suggestion of a stronger public sector involvement than is the case.
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A Cardiff Cymro at War: Welsh and British Identity in the Near East Theatre of World War One
Posted on April 14, 2019 April 22, 2021 by Rhys David
Wales was a melting pot at the start of World War One and some soldiers will have had a foot in the prevailing Welsh and English cultures of Wales.
For the first 17 years of his life, leading up to World War One, Dewi David's Sunday routine in the Cardiff suburb of Splott will have been the same: chapel with his parents and Sunday School at Eglwys Jerusalem Methodistiaid Calfinaidd in Walker Road, followed probably by a visit for tea or supper to one of his family's many relatives in the area.[1]
In 1917, however, Dewi's Christmas was spent in another Jerusalem as one of the Welsh soldiers who entered the Holy City two weeks before. The Turks had been forced to surrender their four centuries-old control of Palestine in the face of advancing British Empire forces under the command of General Sir Edmund (later Lord) Allenby. By this time Dewi had been in other ancient settlements familiar in stories to a chapel-attending Welsh young person – Matarieh (where Mary rested on the flight to Egypt), Khan Yunus (where Delilah was born), Gaza (where Samson brought the temple down), Beersheba (where Abraham and Isaac spent time), Hebron (where Sarah died), and Bethlehem (where Christ was born). Sitting in chapel in his early teens he could hardly have dreamt that he would be camped before Christmas 1917 near Calvary and would spend the day itself on the Mount of Olives in a German religious settlement hastily abandoned by retreating German units that had been supporting Ottoman forces.[2]
Our image of Wales in World War One has largely been formed by the heroism of the 38th (Welsh) Division in France and their sufferings in the assault in July 1916 on Mametz Wood near the town of Albert on the Somme. We also know about the horrors of the trenches, particularly once wet weather and consequent mud had set in.[3] Dewi, however, was among thousands of Welshmen who served in other theatres, notably the Middle East (or Near East as the territories closest to Europe were then called). They served in the only other Welsh-designated division, the 53rd, or in other divisions or support units such as the Royal Army Medical Corps.
The 53rd, a Territorial unit that pre-dated its earlier-numbered confrère, was from August 1915 part of the British army that tried to seize the Gallipoli peninsula during the Dardanelles Campaign, a conflict that cost more than 100,000 British, French, Australian, New Zealand, Canadian, and Turkish, German and other lives. The Division went on to defend the Suez Canal against attack by the Central Powers from both east and west,[4] moving later into an offensive phase that took it, fighting its way, across the Sinai Desert, past the stronghold of Gaza and through the Judaean Hills to Jerusalem. Its capture at a difficult time in the war in France was memorably and evocatively described in Parliament by Prime Minister David Lloyd George as a "Christmas present to the British people".
Gallipoli, where action was first seen, was trench warfare as brutal as that encountered in France and Belgium but in even more difficult, precipitous terrain where the enemy occupied the heights and could rain down fire on the men below.[5] The 53rd's later campaigns in 1916 and 1917 were, by contrast, highly mobile desert warfare, accompanied by searing heat, never-ending sand and constant flies, and made worse by severe shortages of food and water. No less difficult scrambles through the Judaean hills followed as the army advanced in the latter half of 1917 deep into Ottoman territory. Many, like Dewi, who joined up as a volunteer on his 17th birthday, St. David's Day 1915, would spend the entire war away from home, not returning until April 1919.
In October 1918, at Megiddo, the ancient Armageddon of the Bible, on a plain that had been the scene over the course of millennia of mighty battles between great empires, the Turks and their Central Powers allies were defeated, shortly before the November armistice in Europe. They were forced out of the war and made to quit their Ottoman territories outside the motherland in a campaign that made Allenby a national hero in Britain and gave him his title, Viscount Allenby of Megiddo. In Wales it was celebrated as a victory in which Welsh units had played a powerful role.[6]
Two issues particularly have interested historians of Welsh involvement in World War One. How great a degree of enthusiasm did Welsh people exhibit for the war, how did this differ across the social and linguistic divides and how did this square with the pacifist tradition that had developed with the growth of Non-Conformity across Wales in the two previous centuries? Secondly, how Welsh were the Welsh-named units that fought in the various theatres and how Welsh did they feel? Which Welsh customs and characteristics did they take with them into war? Did men from different parts of the United Kingdom (and beyond) meld together to form part of a wider British identity?
On the attitude of Welsh people to World War One different lines of evidence have been enlisted to justify often modern beliefs and prejudices. Robin Barlow has argued persuasively that a range of reactions can be discerned in the Welsh response to the war and the call to arms, reflecting significant differences in a then fast-changing society.[7] Attitudes also evolved as the war proceeded, after it had become obvious the quick adventure many had expected was a fantasy. Contrary to previous assertions, Barlow has demonstrated that there was a slightly lower propensity to enlist in Wales than in either England or Scotland. Rural and industrial areas felt differently, as did Welsh and non-Welsh-speaking areas, the former in both cases showing less enthusiasm for the cause.
One of the special factors in Wales was undoubtedly the magnetic appeal of Lloyd George, without whom any Welsh reluctance might have been greater. No doubter himself of the rectitude of a war against German militarism, the one-time Criccieth solicitor skilfully mobilised large swathes of Welsh opinion on the side of the little nations of the world – in this case Belgium, Serbia and Montenegro – who could be presented as being bullied by the bigger boys, the Germany of the unbalanced Kaiser Willem II and Franz Josef's Austro-Hungarian Empire. For Welsh people, although umbilically attached to a benevolent neighbour to their east, the comparison was meaningful.
Already quasi-canonised in Wales for his work as Chancellor of the Exchequer in introducing welfare benefits and for his earlier stand as a young solicitor against malign church practices in Welsh parishes, Lloyd George helped to make pacificism unpatriotic, to the extent that even prominent intellectuals were quick in 1914 to take up the war cause. The Welsh scholar, Sir John Morris-Jones, entered the fray, attacking in bellicose terms "Germany's new religion, the nationalistic creed of Nietzsche",[8] and collecting with fellow Welsh academic, Professor Lewis Jones, tales of Welsh heroism and derring-do for an anthology on Wales's martial past.[9]
Gentry ladies, many of whom had sons who served and were to die in the war also rallied around. Profits from the 2/6d sale of the Morris-Jones's book were donated to the National Fund for Welsh Troops, which sought to provide additional comforts for Welsh regiments at home and abroad. Joining Mrs Lloyd George on the fund committee were, among others, Lady Ninian Crichton-Stuart, Lady Glanusk, Lady Edwards, Lady Beatrice Ormsby-Gore, Lady Herbert, and the Hon. Violet Douglas-Pennant.[10] Even in the avowedly radical south Wales coalfields, Charles Stanton, a firebrand syndicalist and miners' agent, became a dedicated supporter of the war as did the even better-remembered former miners' leader and M.P., William Abraham (Mabon).
Statistics can tell us much about the keenness of different socio-economic groups and ethnicities to join up, and we can also glean much from contemporary utterances by politicians and other opinion-formers, such as churchmen and union leaders, and from newspapers and speeches. We need the testimony of individual soldiers, however, to know more clearly what they thought and felt. This is where 50 surviving letters that Dewi sent home can help.[11] Starting with short, cautious missives confirming he was in good health and spirits, they grew in length under the weight of his experiences to offer in response to his father's and sister's letters a wide range of views, on Wales and Welshness, his native city of Cardiff, conscientious objectors, suffragism and other contemporary issues, as well as the usual soldier's complaints – poor supplies of food and water, inexplicable orders, out-of-touch commanders and favoured treatment of men in other theatres.
As a soldier Dewi was not typical of any one group but crosses several social divides. His family being native Welsh-speakers and chapel-going (his father, Thomas, was a Jerusalem deacon), he came from a tradition that might have been expected to be somewhat more sceptical about the war. He was, however, an urban dweller, living in a significantly "English" Welsh city – Cardiff – which had grown as rapidly as anywhere on earth in the preceding 25 years, drawing in people from all over the United Kingdom.[12] These, it can be inferred, were more likely than the homogeneous rural Welsh to have been fired up to support an Empire war and it was their lead that Dewi seems to have followed.
Unusually, the Davids were almost autochthonous to the region. His parents were from the still largely Cymric Pentyrch and Gwaelod-y-Garth, then outside the city but now incorporated, and spoke the distinctive Glamorgan Welsh dialect. Their neighbours in recently-built Moorland Road, were almost entirely incomers, employed in the largely artisanal jobs that had been created by the city's coal/steel/shipping economy – railway porter, coal trimmer, engineer, carpenter, boilermaker's labourer, engine driver, tailor, flannel merchant, general shop assistant, chef, labourer, goods clerk. Many of them would have had no deep roots in the area and little of the cultural attachment to Wales that he and Welsh soldiers from deeper in Wales would have had.
Dewi had joined because his slightly older friends had also enlisted but virtually all of these were what might also be termed Cardiff English, the sons of individuals drawn into the city in the previous two or three decades. Their names were Mills, Pippen, Somers, Ropke, Hansford, London, Hardcastle and Milner, and not Williams, Davies, Evans and Jones. After elementary education several of these young men had gone on to Cardiff's first "grammar" school, the Municipal Secondary School (the M.S.S.) in Howard Gardens[13]. And, like several of his friends Dewi had joined the General Post Office (GPO) as a messenger boy at 15[14]. As such, these Cardiff individuals will have had much in common with the wider nature of the 53rd Welsh, which included men from Herefordshire, Cheshire and elsewhere, as well as Wales, and would fight in the Near East alongside divisions from London, East Anglia and other parts of Britain as well as Australians, New Zealanders, Newfoundlanders and Indians.
Dewi's letters, 120,000 words in total and now part of the Imperial War Museum's national collection in London, offer evidence of the duality engendered by this foot in both camps, Welsh-Welsh and English-Welsh, proud of Wales and his Welshness but growing up in an environment in which the dominance of English ideas and attitudes was even more prevalent than today. In Cardiff, as in many other cities that had grown with the industrial revolution of the previous century, pro-Empire, Anglo-centric views of the world prevailed and will have been shared by most of the population. [15] The Army, where he will have met men from other parts of Britain for the first time, would be a melting-pot that would only intensify this common sentiment, creating bonds that overrode national identities within the United Kingdom.
This Anglocentric, Empire-oriented view is reflected both in Dewi's choice of language and the expressions he uses. He writes exclusively in English, though he does pepper his writing with Welsh (and the odd French) expressions. Censorship may account in part for this but his English-only education in the MSS is probably more responsible. This was a time when Welsh was being lost and many Welsh speakers, perhaps particularly those who had moved to the big cities, (though not the Davids) were abandoning Welsh for their children as a hindrance to advance in an English-speaking world.[16] The age-old Welsh dread of the threat to the language – a fear expressed a few decades earlier in the last line of the Welsh national anthem – occupies his thoughts in one of his letters.[17] After describing how he had been mixing with good Welshmen in the 158th, he writes:
"You know full well that I'll never lose yr hen iaith [the old language] – leave it to me, I hope I am a genuine Cymro – and, well that's one of his chief duties, isn't it? – "Fy Nuw, f'anwylyd, a'm iaith" [My God, my loved ones, my language]."
Even for a Welshman, however, "England" is used in Dewi's letters as a synonym for "Great Britain" and Ireland, a modern solecism that was probably then widespread (and perhaps offers a partial elucidation of the notorious Encyclopaedia definition). At no point does he use the word Britain, preferring instead the then widespread nickname, "Blighty".
Thus, from Fayoum, in Egypt, he wrote to complain about exorbitant local traders:
"A quid here lasts about as long as five Bob in England."[18]
and later, while on the trek through Sinai to Gaza, musing on his job polishing the equipment of the two horses he was looking after at the time, Cuthbert and Araminta, he writes:
"I am sure my manicurist would weep to see these hands after that sticky duty dubbing but I console myself by thinking that we are but cleaning harness for 'England, Home and Beauty' as they say in the Brasso advertisement."
There are other examples, too. In a complicated reference to George Bernard Shaw's satire, Mrs. Warren's Profession, he observes how women in Egypt usually trail unwearyingly on foot behind a man on an ass:
"It wouldn't do for Miss Warren to preach the new belief of the 'women's rights' creed out here. The men wouldn't take it so calmly as in England."[19]
Dewi's reading at the time was the English-language classics, his requests to his parents being for books by Charles Dickens, Edgar Wallace, Mark Twain, Sir Walter Scott, and the now largely forgotten Ian Hay, and two contemporary periodicals, London Opinions and the Weekly Telegraph. His local and Welsh news came through the long since defunct Cardiff Times. On one occasion he does ask his parents to find him something suitable in Welsh but whether in response they sent him a work by the Welsh Dickens, Daniel Owen, is not known.
His own writing style was humorous and highly literate, and full of references to the Bible, nature, music, history and geography. Yet, for all his serious reading, in speech he grew to be more and more strongly influenced by his companions. As the war proceeded and his tour of duty lengthened, Dewi (and no doubt his brothers-in-arms) filled their conversation and writing with slang phrases such as 'abso-blooming-lutely', 's'welp me', 'kybosh', 'ole chulip', 'fakamajig' and others, and routinely cut words, such as 'them', or 'him' back to a basic understandable 'em' and 'im'. Dewi, too, gradually slips, like many of his contemporaries into the use of Eye Dialect as he becomes more of the old soldier and less the raw and nervous recruit.[20]
It has, indeed, been observed that by the end of the war the default language that many British soldiers spoke was Cockney. Londoners were disproportionately represented in the forces, and their form of slick, urban conversation clearly appealed to the mood of the men and to the camaraderie which long periods of service together engendered and hence quickly spread, even to units such as the 53rd.
Dewi, a good grammar school education behind him, even if of only short duration, was able to add his own compelling metaphor and imagery. In apologising for his failure to find his sister a Christmas present in Jerusalem, he tells her "the miserable paltry specimens of the Birmingham jeweller's art (overseas department, remember)" that he inspected were "a gross insult to the average man's intelligence" and "would not have deceived even the dullest member of a West African missioner's flock"; in recounting his pleasure after eating the contents of a parcel he says he "felt as contented and benevolent as the fattest old alderman who ever sat down to the weightiest table at the Lord Mayor's spread," and he "wouldn't have changed places with a diner at the Carlton"; in thanking them for some glasses he had received, that the "goggles" were "Bond St. fit" and hung on his "nasal promontory" a treat; and that some unwelcome remarks he had heard were "enuff to make a crocodile weep champagne". For Dewi a camel is his "long-faced chum", being sea-sick is "feeding the fishes", a brush is his "trusty desert sweeping instrument", conversation is "chin music" and between you and me is "ongtre-noose".
Yet, while he quickly adopted Army parlance, Dewi found many of the men he met somewhat exotic on first encounter in 1915 and 1916. With gaps sometimes needing to be filled he spent very brief periods with a London Division, where he might have picked up some of his Cockney and with the 54th (East Anglian) Division, "very decent people". He found some of his fellow Welshmen different to himself, too. He is sent "back up the line" in Palestine, he reports in one letter, to the 158th Brigade not his usual 159th and finds himself with a "north Wales crush". "The Fusies, you know, 'rwan' like," he tells his parents.[21] British soldiers named their surroundings after familiar places back home. The North Wales soldiers had followed Army practice in naming areas after similar and familiar places at home. "The Vale of Clwyd is close at hand and we are somewhere near Bettws-y-Coed," he reports of the areas being occupied by the 158th in the hills.
He also tells his parents what he considers to be an entertaining story about a visit from a north Wales preacher at the YMCA while he was with the Royal Welch Fusiliers (RWF), which again emphasises the differences he observed.
"I went over to finish the letter and take advantage of their tables, but I failed to write a word. There was a service on, conducted by a Welsh chaplain from Aberdaron, look you. I quite enjoyed it, and he captivated the hearts of his congregation, especially those who had never heard a 'pregethwr' [preacher]. … He could hardly speak English properly … and the Cymraeg style he had was amusing …. It brought back memories to me of Sundays in the past when I listened to the 'old school'. Tonight, he gives a humorous lecture at the same place and I'll be there. So, you're not the only ones who are privileged with those entertainments, although I'd sooner listen to yr hynod [noted] Kilsby Jones at Jerusalem any day to a lecture on the desert."[22] The language used by this preacher is not clear, but one can guess it was perhaps a mixture of Welsh and English to meet the needs of his congregation.
Unlike fellow soldiers from more rural areas or smaller towns, Dewi will have met people from overseas in his first job as a 15-year-old messenger boy working out of the GPO in James Street in Cardiff's docklands. His day will have been spent taking telegrams to boarding houses calling seamen to their ships or to men on board the many ships thronging the docks. This will have brought him into contact with the many Arabs from the Gulf who joined Cardiff-bound vessels at the Royal Navy coaling station in Aden, many of whom settled in Wales. Whatever the impression he had formed through these no doubt fleeting encounters, abroad the attitudes that shine through his letters are those of the contemporary Briton, and not favourable.
The Greeks, camp followers who set up canteens to serve soldiers at their bases in Egypt, are represented as venal, never losing an opportunity to rook their powerless victims. He thanks his parents for a Postal Order:[23]
"You can't imagine what it is like to have nixes. It will come in jolly handy for such luxuries as are obtainable from the canteen, although it goes against the grain, you bet, to fork out to Greek proprietors. Naturally, or purposely, they don't forget to shove on the prices. I suspect the latter".[24]
The Arabs, too, he believes, are only too willing to do them down in the bazaars, with their "rotten old piastres, worth tuppence ha'penny". Moreover, he doubts their sincerity:
"The Moslems are very pious if taking a praying carpet out in the street and kneeling down bumping your forehead against the pavement has anything to do with it, but I doubt whether they're always so devoted. They seem to like English fags because they always pester us for 'Cigaretta baksheesh Engleezi' which translated from the Ancient Greek means, 'Give us a fag, gratis." [25]
Nor does he approve of their treatment of women.
"The inhabitants of the outlying villages pass along the road by our camp to market in the town and it's always the donkey or the woman who carries the load. The man, her husband, rides on another donk, doing and carrying nothing. Lazy blighters, what?"[26]
On occasion they could be a source of amusement as when he tries to cash a Money Order in a Post Office in Ismailia and encounters a bureaucratic Egyptian counter clerk, who nevertheless knows of Cardiff. He describes how he approached the official and handed over his document:
"'Hi matey, Where's my five quid'." He says, 'Are you Sapper David.' Says I, 'Be'old 'im in the flesh'."[27]
He is sent back twice to get different signatures from the Provost Marshal's office before he receives his money and has the following exchange:
'''Do you leeve in Cardeef'. 'Yes', I said, 'near the biscuit factory on the mud. Can I go now, or do you want to know whether I was born in Upper Zinc Street, or Lower Zinc Street? Come and have a drink with me, will you?' He says: 'I tank you no, I do not drink ze beera' and all the clerks seemed to think it was a huge joke."
Despite in this case finding someone who had heard of his home city, his advice to anyone coming to Egypt, is:
"Bring plenty of 'tin' [money], go to Shepheard's Hotel and stick there.[28] You'll only spoil a holiday coming up the line as far as we are to study the peculiar customs and manners of John Cherry Blossom."[29]
These sentiments – of an 18-year old – would not be appreciated (or openly expressed) nowadays but were no doubt authentic of their times and of soldiers from across Britain.
Nor are the Turks, the main enemy any more highly regarded, though he praises them when back in the hills after the capture of Jerusalem for maintaining a humanitarian approach when it came to water supplies.
"Gosh! I've thanked the Koran many times for giving old Johnny 10 commandments, one of which forbids him to poison water – he sticks to it, too, fair does [do's], which is a jolly lucky job for us. Water. Gosh! D'you know what happened yesterday. There was one biscuit tin of water, three men washed, two men bathed, (one was myself), and then I washed a shirt, towel and socks in it."[30]
The French, as civilised fellow-Europeans and co-combatants are less harshly treated, though there is a hint he saw a certain dandiness in their character. On a rare break in Cairo he decided to visit a French barber, one of the many foreigners then living and trading in Cairo's big European quarter.[31]
"In goes this child to a swell 'coiffeurs and shavers' establishment, where there were about umpteen pier glasses [mirrors] hanging around the walls. Sat down and a Frenchman worked the oracle on me – a proper high-faluted style – Parisian style, you know. 'You want ze moustache to keep, m'sieur', he said, serious as a judge, and, of course, not wishing to insult the poor feller, I kept as straight a face as poss and said polite-like, 'Non, m'sieur, shave the blighter off, he get too much in the way, comprenez?. … Lathered and shaved me OK, with never a pull or a scratch like my old Army pattern [razor] plays on me, and he was as dainty as a blessed girl, s'welp me Bob." Then the blooming ceremony started, which fair startled me – first, he rubbed a block of ice over me dial [face], and then he sprayed about five scents over me and then shampooed me and sprayed some more till I didn't know if I wasn't in for an aquatic gala. For sure, I was some swell by the time I finished in that place, I tell you, cos he brushed my hair and put a blooming fine parting in it – straight as a die and looked the real goods. I don't know how the deuce he managed it, cos blowed if I could ever get one there before. I was so pleased that I gave him 2 piastres for himself and told him on the QT that he was a blooming marvel, only he couldn't comprunny simple language like that. Then he had a bloke there who brushed your togs and chapeau when you left. … Well that little lot cost me 6 piastres but it was worth it every inch. You can judge for yourself how swell it was – I was actually having a shave next chair to a major on the staff – absolutely (Lummy, where's my swagger cane – Swish! Haw! Bar Jove!), and the manager bowed me out too and fairly beamed when I told him it was a trés bon little shanty of his."[32]
Yet, while this Welsh-speaking Welshman could under peer pressure very easily become the archetypal World War One Tommy, acting, thinking, sounding and speaking like his fellow-soldiers from other parts of Britain, a feeling of being distinctively different and Welsh also permeates his letters. In Egypt he describes how he and a few of his Cardiff colleagues share a tent with a postman from Tonyrefail.
"who is my champion when we have good-natured arguments about Wales and Lloyd George and I may tell you that we are able to hold our own".[33]
Dewi himself may well have differed from his colleagues in believing, like many Welsh people, that the Welsh Wizard was the key to victory. And, he evidently followed current developments in the war avidly.
"I have just read Dafydd's speech at the Eisteddfod [in 1916] and really can't find words to express myself. He is a marvel and I think the country need have no doubts as to his ability in the capacity of Secretary for War. Why a man with that spirit – the Welsh yspryd – could overcome any obstacle likely to crop up. I'd back him up against any sausage-eating Bethmann Earwig they like to put up.[34] You can tell he's a Cymro alright by his speech and by Gum! I'm prouder than ever that I am also a Cymro and that the same blood runs in my veins. A Welshman in the field myself, I can only say "Cariwch ymlaen, Dafydd bach, cewch i mewn a ennill i ni".[35]
Dewi was in no doubt either that Welsh soldiers – carrying on the traditions outlined in the anthology, Gwlad fy Nhadau, were among the most martial of Empire troops. When it came to battle, the Germans fighting with the Ottomans are, as they would have been to most British Empire soldiers, "vile Huns", but in Dewi's view they were no match for and indeed in mortal fear of the brave Welsh. Dewi, whose main role was as a Royal Engineers signaller, sending and receiving Morse code messages and laying out cables to forward positions and retrieving it, describes one action in Palestine on the march towards Jerusalem. This to his mind encapsulates the respective fighting qualities of the Welsh and their German and Turkish enemies.
"When the Welsh got to business they were greeted with shouts of 'Come on you Welsh so and so's, not Turks this time, you got Germans'. And, so it was, too, there was a plentiful sprinkling of those vermin in front of us but that only made those mad, reckless, splendid Welsh madder than ever and those Huns ran faster than old Johnny [the Turks]. Y'see they can't skulk in concrete dug-outs here [as in France] – it's all plain fair and above-board hill-scrapping and they don't like that – not they. When they see the Welsh coming up over the hills like cats from stone to stone, with the sun playing on those shining little things [presumably their weapons], it's either 'Kamarad', 'Allah!', 'Allah!', or a sprint towards Constantinople. I simply have to tell you this because the glorious old 53rd gave 'em of their best and you know what that's like – bless 'em. Proud of 'em? Why there's nobody to touch 'em.
"Anyhow, they're wonderful, they're marvels, they're Welsh! If I had my way I'd give 'em all a V.C. and a 1,000 piastre's worth in the canteen. However, directly after the dirty work was done we were relieved and I have been terribly busy, engaged in that pleasant pastime of picking up all our cable. Blooming hard work and worst of all the blessed weather broke again and it simply poured down. When it pours here you can betcher life it does pour some, and there we were washed out of house and home – or rather bivvy – out on some blessed hills trying to pick up blooming cable thro seas of mud and lakes of rainwater."[36]
There is more praise later for his unit after they had been sent down to the plains at Ludd after several months in the hills, only to be told after a two-day trek – "downhill all the way with all brakes on for hours at a stretch" – to turn around and return immediately. The men were left only to speculate on this reversal of fortune but Dewi sees it as evidence of their irreplaceability.
"What benefit can it possibly afford anyone, I would like to know, by heaping ridicule on the heads of us poor innocents. Anyhow, it just goes to prove there's no other boys like our little rascals to scrap in those blamed hills – simply can't do without the old "Fighting 53rd – the flower of the British Army – second to none."[37]
Some exaggerated pride is evident here but Allenby himself was full of praise for his Welsh troops. On their role in the decisive breakthrough at Gaza he wrote:
"When time was ripe, the Welsh Division brilliantly consummated the victory, storming the rocky slopes of Khuweilfeh, and stubbornly maintaining that position against repeated counter-strokes, fiercely pressed all through the first week of November [1917]. … On 9th December 1917 the 53rd and 60th Divisions joined hands to the south and west of Jerusalem. In co-operation, these two Divisions swept the enemy from Jerusalem's precincts, and they share the honour and the joy of having been the immediate agents in setting free the Holy City after continuous bondage. In the battles which scattered her armies and drove out of the War the Turkish Empire, the achievements of the young and inexperienced troops – who formed the majority of the 53rd Division – rivalled the exploits of those veterans who had already set an example which won, and will for ever retain, the Empire's admiration."[38]
But while Welsh soldiers in the Near East, such as Dewi, reflected in most respects the attitudes and even the forms of speech of their fellow-combatants from other parts of Britain, were there other characteristics specific to Wales that survived four years away from home? On the Western Front the authors Siegfried Sassoon and Robert Graves, both officers in the Royal Welch Fusiliers, noted appreciatively the men's love of singing. Graves observed that Welsh soldiers sang hymns, often in Welsh, whereas other regiments were more likely to sing popular music hall numbers of the day.
Though they will have sung Welsh hymns at the service Dewi attended, the more open, desert and hill country spaces in which the 53rd Division operated may have been less conducive to communal hymn-singing than the trenches of the Western Front, where death was an ever-present danger and spirituality probably closer to men's thoughts. The hymns Dewi mentions are Victorian and not popular Welsh favourites – notably Rocked in the Cradle, Here We Suffer Grief and Pain, When He Cometh, and Art Thou Weary – and his references are chiefly intended to raise an ironic point about their experiences out East.
The Welsh love of singing – hymns and airs – could come more easily to the fore once a year, however, on St. David's Day, his birthday. In 1916 in Egypt he reports that some of his colleagues had been for a ride and had brought back a plant that looked like a leek. In 1918 writing to his sister he tells her he has a lump in his throat from hearing the Divisional Band strike up Men of Harlech.
"Now it's Deryn Pur, and here she comes, Rhys ap Thomas, I'm nearly blubbering."[39]
He wishes he had been at home to join them at a concert for St. David's Day but says their band had given them a treat 'with a long programme of those beautiful airs, second to none'.
Even if there is little evidence that men in the East routinely sang hymns, music was still important and soldiers in the Near East probably had more opportunity to create entertainment for themselves than men in France and Belgium. Dewi himself recalls performing songs himself – notably the now largely forgotten but then well-known Tosti's Farewell – at an American lady's house in Cairo to which he and some of his fellow-soldiers had been invited. More importantly, the men of his unit formed themselves into the Palestine Pops, a cross-dressing Pierrot troupe, that specialised in musical numbers of the day and in sketches.
"The funny man comes from our company and he is a genuine card. … As for the pierotte, she looks fine, painted up with rosy cheeks and pencilled eyebrows, and long dark tresses. She brings tears to our eyes (tears of mirth, however) when she sings the poignantly-emotional ballad, 'If You Were the Only Boy' etc. with her partner. The appealing way in which she stretches her arms out and presses her hand on her heart in the song is quite the last word in melodrama. She's got the mezzo soprano falsetto voice absolutely taped off, too. Sometimes it cracks at the critical moment and either goes up or bumps down about two octaves. (In ordinary life this prima donna is a Sapper of R.E.s)"[40]
His favourites, however, were the Welsh Rarebits, a troupe of experienced musicians formed in late summer 1916, pre-dating the official World War Two Entertainments National Services Association (ENSA) by some 23 years. Divisional headquarters during the long trek across the Sinai Desert decided the 53rd should have an official concert party, perhaps recognising the extent of musical ability available and the efforts the men were already making to keep their own morale up.
Wally Bishop, member of a Cardiff musical family serving in the RAMC, was asked by his Commanding Officer in Egypt if he knew any other musicians who could help to form a band. He volunteered a pianist, a violinist, a piccolo player and suggested a choir be formed, too. The eleven founding members met under the shadow of a quince tree at Der el Belah and continued to entertain their fellow-soldiers for the rest of the campaign.[41] The première took place in Sinai's Wadi Ghuzze, a wide dried-up river bed flanked on either side with steep hills. The 5,000 strong soldier audience sat in terraces, watching a stage lit by acetylene floodlights, their cigarettes pinpointing the darkness.[42]
Dewi explains to his sister:
"The Welsh Rarebits were the only demoiselles we've got, barring the charming Buddoo [Bedouin] damsels who are now millionairesses on the 15 tomatoes for 5 piastre touch, and of course it's only natural that a fellow likes to be deceived and feels like straightening his tie and parting his hair before he goes to a concert. Best thing a fellow can do in the EEF where leave is almost as extinct as a rest, eh?"[43]
Given the ubiquity of the piano in Victorian and Edwardian households, and the absence of many of the forms of entertainment that are now available through mass media, it is perhaps not surprising that Bishop was able to put together a concert party that would prove so entertaining. In a distinctively Welsh touch the war's end was celebrated with a concert by the 100 strong 53rd Division Welsh Male Voice Choir at a celebratory dinner at the Metropole Hotel in Alexandria in January 1919. The programme offered several great Welsh favourites: The Sailors' Chorus by the poet, Mynyddog, set to music by Dr Joseph Parry, Myfanwy, Men of Harlech, and Martyrs of the Arena. Supporting acts included vocal, piano and violin solos by serving men.
Dewi, his letters reveal, came from a more Welsh background than many of those with whom he signed up, but was much closer to these fellow Cardiff citizens than to the rural Welsh soldiers from other less populated areas of Wales that he met, especially those belonging to the RWF regiments of the 158th Brigade. His attitudes were those of many young British men brought up on stories of "England's" imperial mission. Like his fellow-soldiers, he had no problem with Empire, accepting without question the British place at the top of the international order and the superiority of Englishmen, Welshmen and Scotsmen over other races. As one midshipman on being posted to HMS Defence in 1914 observed: "I knew little or nothing about foreign policy beyond the fact that the Mediterranean belonged to us".[44] Indeed, though conscription was never introduced in Ireland, tens of thousands of young Irishmen joined up with the same dedication to the cause. Many of their brothers too young in 1914 and 1915 to join up made their way, however, into the Republican ranks that took Britain on in 1916.
Dewi remained throughout his service a proud and patriotic Welshman – stressing the importance of this identity in letters to his parents. He was a fully engaged and unquestioning Briton as well, however, in a society that was less complex and more homogeneous than today. For many men of military age like him, buying into the British view was completely natural, and once enlisted they were not willing to harbour doubts, nor were their parents. Indeed, Dewi reserves some of the few bitter comments he expresses in his letters for those who had not joined up as he did at the first opportunity, and for those with relatively soft jobs in the Army or outside.
Opinions were to change during the war as losses mounted and the impact on families grew. In the post-war world Wales became a centre for peace activities, playing a significant part in the establishment of the League of Nations. Plaid Cymru's formation in 1925 would also create a platform for national sentiments and aspirations to be expressed in a different and more political form. A war to re-establish the status quo was going to leave behind a different world.
These were developments that would follow in the troubled twenties. It is only from the contemporary war letters, such as Dewi's, however, that we can learn why young Welshmen enlisted, their views on their homeland and its place in the world, how they felt about service in the different theatres and about their fellow-soldiers and foes. Dewi David through his innocent and cheerful but copious correspondence offers insights into all these questions.
Cardiff. December 2018
rhys.david@btinternet.com
This article first appeared in the Transactions of the Honourable Society of Cymmrodorion, 2019.
Rhys David is a former journalist with the Financial Times where he held senior editorial positions. He is a Council Member of the Honourable Society of Cymmrodorion, an Honorary Fellow of the Institute of Welsh Affairs, a director of Nova Cambria and a Fellow of the RSA.
[1] Demolished in 1920, Jerusalem M.C. Church was one of three Welsh language chapels in Splott, serving a local Welsh-speaking community attracted to the area after 1888 when Merthyr Tydfil's Dowlais Ironworks (later Guest, Keen & Co.) invested in a new coastal plant in Cardiff docks, the arrival point for the shipments of Spanish iron ore that had begun to replace exhausted local reserves inland. Many of its workers – a significant number of whom had Welsh as their first language – moved to Cardiff to live nearby.
[2] Sanatorium Kaiserin Augusta Viktoria, a guest house built by the architect Robert Leibnitz for Protestant German pilgrims, one of several religious sites constructed by the Germans and others in the Holy Land in the preceding century.
[3] Llewelyn Wyn Griffith and Jonathon Riley. Up to Mametz and Beyond. (Barnsley, Pen & Sword, 2010) passim.
[4] For an account of the war in this theatre, see Stuart Hadaway, Pyramids and Fleshpots, the Egyptian, Senussi and Eastern Mediterranean Campaigns 1914-1916. (Stroud, The History Press, 2014).
[5] John Masefield, Gallipoli (London, William Heinemann 1916). One of the earliest accounts of the horrors of this campaign was written by the Poet Laureate, shortly after the withdrawal of British and Empire forces.
[6] Welsh soldiers were first through the gates of Jerusalem, a source of pride to Welsh families, some of whom like Dewi's parents saw Allenby's entry captured on newsreel in local cinemas. Dewi's father wrote to say they had viewed the footage at the Gaiety Theatre in Cardiff's City Road but had failed to pick him out.
[7] Robin Barlow, Wales and World War One. (Llandysul, Gomer Press, 2014), chaps. 1 & 2.
[8] Writing in the Welsh-language publication, Beirniad in 1915.
[9] Sir John Morris-Jones: Gwlad fy Nhadau, Rhodd Cymru i'w Byddin [Land of My Fathers', Wales Gift to its Army]. London, Hodder & Stoughton, 1915).
[10] Lord Ninian Crichton-Stuart, second son of the Marquess of Bute and Liberal M.P. for Cardiff, Cowbridge and Llantrisant, was killed aged 35 on October 2nd, 1915 at the Battle of Loos, provoking an outpouring of feeling in Wales. His statue by William Goscombe John, stands in Gorsedd Gardens, Cathays Park. Ninian Park, former home of Cardiff City F.C. and Ninian Road are named after him.
[11] Extensive extracts from the letters are included in Rhys David, Tell Mum Not to Worry: A Welsh Soldier's War in the Near East 1915-1919, (Cardiff, Deffro, 2014). ISBN 9 780993 098208. The letters in full are published in a companion volume Tell Mum Not to Worry: The Letters. (Cardiff, Deffro, 2014). ISBN 9 780993 098215.
[12] Cardiff's population had grown from 6,342 in 1801 to 26,630 in 1851 but in the last census before the start of the war in 1911 had reached 209,804.
[13] Cardiff's first "grammar" school, the MSS was founded to bridge the gap identified in learning between the pre-existing school system and the new University College of South Wales and Monmouthshire. Its buildings were destroyed by German bombing in World War Two and it was later rebuilt on another site as Howardian High School (now closed).
[14] In 1913 Dewi achieved the highest marks in the United Kingdom in the civil service examinations for entry into a career in the then Government department.
[15] In the preceding two decades the city named new streets in its Roath suburb after great British triumphs – Waterloo, Blenheim, Marlborough, Kimberley, Ladysmith, Mafeking, Harrismith, Trafalgar, Crecy, among them. Kitchener had already had a school named after him in Canton in the late 19th century. This martial pride continued after World War One with the naming of streets near Roath Park Lake after naval commanders, Cunningham, Jellicoe, and Beatty.
[16] The only Welsh letter Dewi is known to have written was to his Sunday School to thank them for a parcel they had sent. He asked a Bangor man to check his Welsh and was told much to his satisfaction that it was faultless.
[17] Letter. May 28th, 1918.
[18] Letters. April 13th, 1916. "Bob", slang for shilling in pre-decimal currency.
[19] Letters. September 8th, 1916.
[20] "Betcher" is just one example of Eye Dialect where a conventional or colloquial pronunciation is transferred into written language. It is so called because it is seen on paper as well as heard. "Ses", "not 'arf", "nuff" are other examples.
[21] Letters. May 28th, 1918. North Wales Welsh speakers use 'rwan' (abbreviation of yr awr hon") for English 'now', whereas in south Wales 'yn awr' is preferred. Fusies are the Royal Welch Fusiliers.
[22] John Rhys Jones was a leading 19th century Congregationalist minister appointed to churches in England as well as Wales. He became known as Kilsby Jones after serving in the village of that name in Northamptonshire.
[23] As a 17-year old volunteer, (claiming at the recruiting office to be 19) Dewi had voted his Army pay to his mother at home but after several months depending solely on Army supplies and what he could buy with Postal Orders from his parents he rescinded this instruction.
[24] Letters. From Egypt, June 23rd, 1916.
[25] Letters. April 13th, 1916.
[27] November 4th, 1916.
[28] Shepheard's Hotel, established in 1841 by Englishman Samuel Shepheard, became Cairo's leading hotel until destroyed by fire in 1952. It was the headquarters of the British Army in World War One and a meeting place for Allied officers, politicians and spies in World War Two.
[29] Letter. April 13th, 1916.
[30] Letter. June 8th, 1918.
[31] Many Britons who lived in the city will have patronised Welsh-named businesses that appear in advertisements in programmes: sporting goods retailers Roberts, Hughes, (which also boasted branches in Alexandria and Mansourah, and Davies, Bryan, (slogan, Everything for Kit Renewal) with branches in Cairo, Alexandria, Port Said and Khartoum.
[32] Letter. August 25th, 1917.
[33] Letter. November 4th, 1916.
[34] Dewi's name for Theobald von Bethmann Hollweg, the German Chancellor.
[35] Letter. September 8th, 1916. At Aberystwyth Lloyd George had been mobbed by an adoring crowd as he got out of his car to attend the annual festival. In October the same year Lloyd George had been in Cardiff to unveil statues – among them Boudicca, Llywelyn, Owain Glyndwr, and Sir Thomas Picton – in the newly-built City Hall, re-establishing in patriotic Welsh minds the connection between Wales and past military glory.
[36] Letter. March 23rd, 1918.
[38] C.H. Dudley Ward, History of the 53rd (Welsh) Division. T.F. 1914-1918. (Cardiff, Western Mail 1927).
[39] Letters. February 27th, 1918. (The letter will have been completed after March 1st.)
[40] October 10th, 1917
[41] Bishop describes in his autobiography, how the newly formed party agreed on the need to have a "female" member and bought women's clothing – stays, shimmy, petticoat, stockings, gaiters, a low-cut dress in gold and black trimmings, and blonde wig. Another item, bloomers, apparently had to be explained to 22-year old Bishop by one of his married colleagues. Waldini, Front Line Theatre. Front Line Theatre, (Cardiff, Private Publication, 1947).
[42] Son of a piccolo player, Bishop (1894-1966) went on to make music his life. Employed as a cinema organist after the war, he lost his job with the advent of the Talkies and spent several years appearing with unemployed musicians as Waldini and his Gypsy band in Cardiff's Roath Park. During World War Two he was invited by impresario, Jack Hylton, to entertain British and Commonwealth Forces at home and abroad. After the war the group appeared during the summer months at holiday resorts throughout the UK, most notably Llandudno, and Ilfracombe in Devon. For the last two years of his life he toured with his all-girl band The Fabs, entertaining troops again.
Source: Wikipedia.
[43] June 28th, 1918.
[44]Hadaway, Pyramids and Fleshpots, p32.
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Reflections on Plaid Cymru policy paper, Wales 2030: A 10 Point Plan for the Welsh Economy
Posted on April 7, 2019 April 22, 2021 by Rhys David
The wider context
Before Plaid Cymru gets down to policy formulation and manifesto preparation, the wider context in which the next British Parliamentary elections will be held needs to be considered. Over the past two decades we have seen the centre ground abandoned by voters across Europe and the US in what some see as a conscious rejection of "we know best" approaches by a closed-off political elite for whom Davos – not Dowlais, Dartford, or Duisburg – is the lodestar.
In the US this surge in populism or rather nativism[1] as opposed to internationalism has been manifested in Trump's election and in Britain by Brexit, but it is just as prominent elsewhere, even more so in some cases. In Sweden, Netherlands, Denmark, Finland, and Austria, the left has faded, and rival parties of the right have had to tack towards their more right-wing competitors or include them in coalitions. In the Visegrad grouping (Poland, Hungary, Czech Republic and Slovakia) parties that would have been considered far right are now in power and in the first two have even sought to dismantle established liberal norms such as judicial independence, much to the EU's horror.
Even in stable Germany two party politics has weakened under the pressure of the Alternativ fur Deutschland. The traditional centre left and centre right groupings, the CDU and the Social Democrats, have had to govern as a coalition in the last two Parliaments, a breakdown of political alternation that for the 50 years after World War Two characterised much of European politics. Polls have shown support for "strong man" authoritarian, get-it-done rule growing, even in some hitherto stable democracies.[2]
Finally, in France a centrist president, having won barely more votes than his right and left opponents in the first round of France's most recent presidential elections, has become an isolated and embattled figure, struggling over Christmas 2018 to keep the cobblestones in Paris's grand boulevards out of the hands of protesters, and able to secure approval ratings only in the low 20s from a disillusioned populace that has concluded he is not the break with the past he promised to be.
In Britain the rise of UKIP has not been accompanied by representation in domestic Parliaments (except in Wales) but it won the vote for Brexit, persuading a majority to accept its key strategy rather than that of all three traditional UK parties, the SNP and Plaid Cymru. It took more votes than any other party in the most recent European elections. In Scotland the SNP has been the beneficiary of this nativist/populist surge though it presents itself as a bastion of the kind of views the more internationalist-minded support. (Its equally successful counterpart electorally in Catalonia, which won on a nativist platform, has been put down by force by Spain's left-wing populist party, Podemos.)
In Spain, as in Greece populist parties from the ostensibly far left and not the right have been the ones to break open the traditional left-right duopoly of politics, demonstrating that "a curse-on-both-their-heads" movement can win through from both ends of the political spectrum. It can also arise spontaneously without direction or central management – the Gilets Jaunes in France.
Where does Plaid Cymru stand in this modern maelstrom? Plaid has in the past been a populist/nativist party, pursuing Wales First policies (more economic and political powers for its unit, Wales, the creation of jobs for people in Wales, support for the domestic language and bilingual education and usage, and opposition to incomers, especially monoglot non-Welsh-speakers moving into Welsh-speaking areas). In recent years, however, in a tilt away from its north and west heartlands towards more populous and hence vote-rich south Wales, it has sought to portray itself as left of Labour. This policy seemed to work best in 1999 when Plaid was rewarded with its best performance to date in Assembly elections, the public having decided in the referendum two years earlier to go down a populist/nativist route to demand (albeit narrowly) more local control, and evidently concluding that the party that had fought so hard and so long for just such an outcome could best be trusted to manage the process.
This new leftist approach with a strong emphasis on social issues had some logic during the early years of the Blairite New Labour revolution when Labour became an enthusiastic supporter of neo-liberal economic, free market policies. It was closed off firstly by Rhodri Morgan's clear red water philosophy, which began the process of regaining Labour its stranglehold (albeit moderated later by Liberal and Plaid coalition partners). The election of an unashamed Corbynite, Mark Drakeford to Labour's leadership, has now made a more-Labour-than-Labour approach completely unrealistic for Plaid.
So, the questions for Plaid are these. What has it learnt from the rise of populism over the past two decades? Where are the votes of the vast bulk of moderate centre/centre left voters in Wales going to go in forthcoming elections? Will they renew their support for, or return to Labour, confident it will best serve their interests under its new leader? Just as saliently, if Brexit goes ahead and UKIP recedes, having been seen to have largely done its job and not to be able to develop a credible set of policies on other issues (or implodes through internal scandals), will plague-on-all-their-houses forces gather around anti-Assembly advocates? It would be easy to dismiss nascent stirrings as a phenomenon that will quickly evaporate but the same was said two decades ago of UKIP and look what they achieved. Polls already show the antis winning list seats in the Senedd and they could credibly cast Plaid as just another of the old parties. Do we really want this debate to re-open?
This should raise serious warning flags about criticising the Assembly years since 1999, even if this is seen as a way of attacking Labour. The first paragraph of Adam Price's document, Wales 2030: A 10-Point Plan for the Welsh Economy, claims the Welsh economy has remained at a standstill for 20 years at the bottom of the UK's prosperity league, and that, while Scotland has had a devolution dividend, Wales has made no relative progress since 1999. Though the qualifier "relative" is important, the impression that will be picked up is that devolution has failed. This is untrue – there have been gains across many fields.[3].
In employment Welsh activity rates now match those in the rest of Britain – an historic achievement for which both the main parties can perhaps, and certainly will, claim credit, Labour for Assembly policy, the Conservatives for Westminster measures. Rates in Wales have historically been five percentage points lower than the UK and many economists thought the gap would never be closed. We need to know more about the composition of Welsh activity rates before closing the book on this one – full-time, part-time, male, female etc., – but it has happened. Employment has grown to record numbers in a slowly rising population and in some recent months in 2018 Welsh unemployment was lower in percentage terms than that of the rest of the UK.
At the end of Wales 2030 these questions are posed. What has been the dividend? Has it all been made worth it? Again, these questions are put to stress how important the election of a Plaid government in 2021 will be. However, opponents are likely to say that if Plaid – which has had self-government as its raison d'etre for nearly 100 years – now thinks it has been pointless, what use is it to anyone? Save the money by getting rid of the politicians and bureaucrats in unloved Cardiff Bay!
A much better pitch would be – "these are the ways in which Wales is better since 1999 but this is how it could be much better still! Put the government of Wales in the hands of those who fought for it for so long and believe in it wholeheartedly, unlike their opponents, and let's build on progress to date". "Give Wales a Future", "Give Labour a Break – Give Plaid a Chance" encapsulate this. The latter would tie in with the idea that Plaid believes in devolution in a way the other parties do not. It would also stop short of merely indulging in ritual criticism of Labour, by suggesting the party has not totally failed devolution, but is now exhausted and needs time out of office to revive its ideas. It will be tough, but the voters might just be persuaded that alternation of government in Wales could bring better results than one-party rule.
If it is to break through the 10-14 per cent ceiling that has kept it captive for most of the past nearly 100 years, Plaid needs to be able to present itself once again as a new, exciting and insurgent party and not just as a Wales-leaning variant on the London-based parties, and especially Labour. It certainly does not need to be seen criticising the institution the creation of which it spent so long seeking.
Policy Development Implications
Crucially, Plaid must make it clear it is on the side of the communities that make up Wales and of the community that is Wales itself. This may mean de-emphasising and even rejecting much of the rights-based, individualist focus that has dominated the political thinking of all parties over the past few decades, policies that will have little traction with the voting public Plaid is seeking to attract. Greater prosperity for Wales will be achieved, it should argue, through a re-invigorated approach to economic and education policy, drawing on a revivified (and if necessary reformed) administrative machine supporting the Senedd. (It should not be a matter of inventing a host of new institutions and re-booting others. Existing levers, including a not insubstantial civil service, should in most cases be adequate to put in place the changes needed, and if not should be reformed rather than duplicated.)
Policy needs to be more challenging across the whole spectrum of issues and not simply a matter of trying to come up with tweaks to existing economic, educational, social and cultural approaches. Within the economy, a decisive shift away from the cultivation of anchor companies (which seem determined to melt away despite decades of taxpayer support, as in the case of Ford) towards grounded companies as Wales 2030 suggests, is right and should be boldly and clearly stated. A greater role for the state within the private sector, possibly made easier by Brexit, (provided EU state aid rules no longer apply under any new deal) can be justified, too. The "nationalisation" of Cardiff Airport has, for example, preserved civil aviation in Wales where under private sector control the site of this essential modern facility would by now probably be a housing development. This should be a spur to finding other areas where the state can help.
The Guardian columnist Polly Toynbee has written convincingly to show that the role of the state as pump-primer and key shareholder has been important across capitalist economies, including the US, yet it remains anathema to successive UK governments, which have sought instead to diminish its role. (The state of Lower Saxony has a blocking shareholding in Volkswagen, which has survived successive EU legal challenges. France has a 15 per cent stake in Renault. French, Dutch, and German state organisations own a significant share of Britain's energy, water and transport undertakings).
Providing it can find competent managers to fulfil board roles – and this is a big if – a Plaid Welsh Government should look to guide the development of crucial businesses in Wales, intervening where necessary to ensure key locally-owned employers are enabled to stay in Wales. (It is not just in the Missing Middle, however, that policies are needed to ensure the survival and growth of successful local businesses. Our only FTSE company, Admiral, could be subject at any time to a hostile or agreed take-over by a big European or US insurance giant that wants to acquire its customer base. Brains, our biggest food and drink and hospitality company could be sold, like London brewers, Fuller at the start of 2019. Would Plaid have anything to say on issues such as these?)
In transport, a Wales-first approach is also needed and here Labour has taken useful steps that could be built upon. In Transport for Wales we have an embryo Welsh transport authority whose remit could be gradually extended beyond rail to buses and other transport media as well. We still have two public sector bus companies in Wales, Cardiff Bus and Newport Bus, but Cardiff Bus has recently reported a £2m loss. The profitability of its routes is being nibbled at by the blue and white buses of Singapore-owned N.A.T. We need to avoid a trajectory where Cardiff Bus will be so weakened by unnecessary competition in what is a natural monopoly that Scottish-owned First Group or Germany's Deutsche Bahn[4]-owned, Arriva, come riding to the rescue, motoring away again with the profits and Government subsidies generated by Welsh bus passengers, together with the management jobs in the depots of both businesses.
In education the laissez-fair approach that has characterised successive UK Governments' approach to universities for the past several decades, leading to a bloated sector of more than 170 UK institutions, some of poor quality, needs to be reversed in Wales. If universities exist to supply society with the leaders it needs across a range of disciplines, Wales's institutions are not achieving this and, indeed, are not set up to do so – in contrast with those in Ireland and Scotland. Our four top universities equip individuals from England and elsewhere to return to help their home countries thrive and prosper, alongside a minority of Welsh-domiciled students.
They bring income to their host towns and cities both through student spending and relatively highly-paid employment for staff (although at some unquantified cost to the community as well) but if their impact is largely as providers of "offshore" services they are not serving Wales as well as they might and are diverting resources that could be more wisely spent elsewhere in the education system. We have, for example, a weak business sector which could benefit from much closer co-operation with the university sector, yet a few years back the proud claim of Cardiff Business School was that it was the top-rated business school "in India".
No-one would argue that universities – as the name implies – should be anything other than open and outward-looking, but to the extent they are in Wales? This may require much less of a focus in our top universities on attracting other UK and foreign students, itself the unintended and damaging consequence of the conversion of higher technical institutions into "universities" and the lifting of the cap on student numbers.
While a leavening of UK and overseas students and teachers is desirable, we are essentially training citizens of other countries to return and help those countries to prosper. In some ways the techniques used to recruit overseas students differs little from those applied to attracting foreign companies – location (outstanding natural environment), quality of workforce (skilled university lecturers), and community (friendliness of people). Unlike overseas-owned factories, however, which it is hoped will remain, most foreign students will leave after a few years or move to somewhere else in Britain and the EU, without leaving a significant footprint in Wales. A sudden change would clearly be very damaging but a gradual shift, through specifically-designed incentives, towards greater provision for students from Wales is desirable.[5]
The need to rescale and adapt to meet Welsh needs, is nowhere more apparent than in health, where Wales like the rest of advanced-economy Britain is incapable of providing enough medical staff, (GPs, junior doctors and consultants, nurses, physiotherapists, care workers and others) to look after the Welsh population. Instead, Britain strips the countries of Eastern Europe, and Africa and Asia of their doctors, nurses and other health professionals as if Zimbabwe, Thailand and Romania among others were selflessly training far more individuals than they needed themselves and could afford to export medical professionals!
Wales could carve out a new approach for itself by pledging to return our newer universities to (degree-giving) technical college status, concentrating on engineering, Information technology, management and other largely vocational courses. This could give Wales a head-start in the ambition (espoused by UK Governments of all stripes) to rebuild and re-energise Britain's manufacturing sector. Do we need nine institutions styled universities for a population of 3m?
Fetishizing the idea that 50 per cent of the population should go to university, the UK (and Wales) has neglected the more than 50 per cent who currently do not. These are the very individuals for whom the jobs that used to exist in basic industries have disappeared over the past four decades. Policy should seek to support more effectively, and offer equal funding and treatment to, those who do not wish or do not have the aptitude to go to university, but who, just as importantly, may want to live and work in the communities they were born into in Wales. These are the very people who, if neglected, will drift off to the far right, which will be seen, however implausibly, to have a greater understanding of their situation. Voters need to know there is a Welsh party that understands their needs, is firmly on their side and will act.
The aim throughout the education system, starting at school level, should be to create pathways across the whole range of economic and political activities so that the most talented are offered a career in Wales. Our national game, rugby, offers lessons. Most of those who play with distinction for Wales are ordinary men from across (mainly) south Wales. They do not come from privileged backgrounds and they have not (with one or two exceptions) been imported. Most have not been to university.
The school system seems to work well here in filtering through and encouraging those with talent, and the WRU and the four Welsh regional sides are then able to take on talented youngsters and progress them through to cap level at various age grades. Some manage to prosper in this framework while still pursuing academic careers – Welsh players have simultaneously trained to become solicitors and doctors while still playing at the highest level. Even those who do not have a parallel professional route are in many cases able to develop after retirement from the game other Wales-based activities that use the training – hard work, discipline, mastery of technical detail – that comes from playing rugby at a high level.
Music offers a similar example, particularly for Welsh speakers. Schools have sadly cut back music provision but local, Urdd and National Eisteddfods provide a competitive environment that has enabled Welsh musicians and especially singers to succeed in music, both popular and classical. Both these sectors have created pathways so that anyone in Wales can rise to the top, not just in Wales but internationally. This makes both very different from other sectors where people trained in Wales to higher levels are usually only equipping themselves to move outside Wales. We even have programmes making it more likely the most able young people will leave Wales and not return, such as the efforts to get more talented students to apply for Oxbridge!
We have spent a long time tinkering with our education system which until several decades ago was functioning quite well. (It was capable, after all, of propelling a Welsh miner's son from Aberdare into running the Large Hadron Collider at CERN in Geneva, and the son of Polish immigrants from Cardiff to Vice-Chancellor of Cambridge University.) We need to recognise that its failures, such as they are, stem at least in part from the feeling many of those put through it have that they will not find satisfying work at the end, especially if they are unlikely to attend university, and want to stay in Wales. This is at the root of the disaffection with school life of many young people, and especially boys in poorer communities. We should look to the two successful Welsh sectors mentioned above – rugby and music – to see if we can establish similar pathways so that individuals with aspirations in other areas can be channelled from school onwards in directions that will enable them to achieve their goals.
In summary, important as developing a battery of new proposals, Plaid needs to go further and establish itself as the party that is most attuned to what the needs of Wales are and is prepared to elaborate these, however, many sacred cows get slaughtered in the process. Policies need to be radical and daring, simple to enunciate and understand.
The above are just a few areas were radical approaches are needed. They must amount to more than the creation of a host of new institutions. A National Infrastructure Commission, a £2bn National Investment Bank, a National Energy Company, and a Metro Development Corporation may be part of the solution, but they are unlikely to raise more than a sceptical eyebrow across most parts of Wales. Even worse, they will appear just grandiose spending plans, with little of the outlay ever likely from experience to work its way down to meet the needs of the man on the Abercwmboi omnibus (if they still have one).
Plaid needs to show it understands the mood of the public as evidenced not just by Brexit, but by a general disillusionment with politics and politicians. There is no reason why Plaid should not have a whole range of the progressive policies favoured by elites in its locker. The Welsh public has after all been broadly accepting of the social and other changes of recent decades, even if most would be reluctant to stand in the rain in support of them. Let others be in the vanguard – and take the flak – for pushing further on the environment (Greens), minorities (Liberals) and claimants (Labour). These policies need not be the face of Plaid Cymru, which will lack a distinctive position in the political spectrum if it champions others' causes and neglects its own. Plaid has a broader cause to support – Wales and its communities.
A new more nativist approach should be at the heart of Plaid's offer. There is no contradiction, after the gains made in other areas affecting individuals over recent years, in saying a stronger focus is now needed on community rights – the right to a decent job in one's own environment, the right to a decent public realm, the right to good transport and education.
Nor need it imply any lesser commitment to the internationalism that has been a feature of Plaid thinking since its earliest days. Wales's credentials in this area, from the support for the League of Nations through to partnership with Lesotho are strong in any case and not under threat. Welsh people are unlikely to want to offer any less support to people in other nations in future – standing up for one's own society does not mean neglecting one's duty to others.
Indeed, if Wales is to play a fuller part in addressing international needs, it must build a stronger economy at home, using all the tools at its disposal. The strong presence the Irish have built up in international organisations and especially world charitable activity is illustrative as well as admirable. That has followed, rather than preceded the establishment of a strong, confident Irish economy, built on the foundations of decades of Ireland-first polices.
[1] Nativism is defined here as a preference for putting one's own country's interests ahead of internationalism, as represented by globalism, unrestricted immigration and universal human rights. Those holding this view do not entirely reject these trends and processes but would argue they have been placed too far ahead of domestic considerations by an often-unelected elite who stand to benefit most from their adoption.
[2] Even in the US, support for the idea that democracy is the best form of government has been falling.
[3] The Creation of a Wales Transport Authority, the South Wales Metro (when delivered), the re-opening of passenger services (Llantwit Major, Ebbw Vale), the proposed new Cardiff Parkway station; Welsh income tax provision, Land Transaction Tax, eschewal of PPI contracts. In the social sphere, Commissioners for Old People, Well-Being of Future Generations etc, recycling rates, plastic bag tax, separate health service structure.
[4] German state railways
[5] This could be done through h student fee system.
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Mum Can Stop Worrying – It's All Over
Posted on November 13, 2018 April 22, 2021 by Rhys David
For men in distant theatres who had been away for four years or more, the end of the war brought hopes of a return to life as it had been before they left. It was not to be, as Rhys David explains in this talk given in Cardiff Bay on Armistice Day, November 11th 2018
This day, exactly one hundred years ago, will have been one of mixed emotions for people in Wales. Those who had sons, fathers, or husbands who had managed to come through the war will have been looking forward to seeing them home safe. For others the sacrifice their loved ones had made will have been more poignant as they saw the celebrations around them.
Around 272,000 men from Wales joined up for the First World War, of whom 31,000 died and many more were left incapacitated for the rest of their lives. What did they miss most while away and what were the memories of home that they took with them? How different was the city – and the life – to which they returned?
One of the lucky ones who did return – though not until April 1919, such was the time demobilisation took – was Dewi David, a 21-year old from the Cardiff suburb of Splott who had been away for four years without a break. Since signing on at the Drill Hall in Park Street, near the station, he had endured much, though not in France: instead he was in the Near East enduring the horrors of Gallipoli – more than 100,000 dead on both sides – a period on the Suez Canal fending off German and Turkish attacks, a long march through Sinai and three bitter battles for the town of Gaza, and then a push into Palestine through the Judaean Hills.
This culminated in the seizure of Jerusalem in December 1917, the famous Christmas present to the British people, as Lloyd George described it. Then there was a sweeping-up operation to Megiddo in modern Syria where the Ottoman Empire was finally forced out of the war in the last great battle in the conflict in that area.
Dewi is of interest today because while he was away he wrote regular letters home – 120,000 words in total. Soldiers had to sign to say letters included only personal and family matters so there is not a lot in his correspondence about the campaigns as such. He wrote about himself and responded to his family's news about what was happening at home. As such we learn a bit about the campaigns, but a lot more about his attachment to his native city.
We also get a very clear insight into the lives of its lower middle-class residents of that era – what they ate, where they went to have fun, how close their ties were to neighbourhood and family, and just how comprehensively the war affected the lives of everyone. Just to give you one example of how the whole community was involved in this war, when Dewi was confined on one occasion in a field hospital in Palestine he was treated by his family doctor. Dr. Samuel, who had a practice in Newport Road near the Royal Oak, had signed up, too.
First something about DEWI. He was born in 1898, went to Cardiff's first grammar school, the Municipal Secondary School in Howard Gardens, joined the GPO in James Street – the building around the corner from here that has had For Sale/To Let signs up for the past 40 years or so. From age 15 he was a messenger boy delivering telegrams to seamen in the boarding houses of Bute Street, Loudon Square and surrounding areas, and to vessels jam-packed close to each other in the Queen Alexandra, Roath, Bute East and West docks.
He took further studies in Clark's College in Newport Road as part of his training to become a telegraphist. He enjoyed a happy home life in what was then a thriving suburb with his parents – Welsh-speakers from Pentyrch and Gwaelod-y-Garth, and his sister.
And the CARDIFF of that era? It had acquired city status in 1905 after passing the qualifying number – 200,000 population. It was also much smaller in area than nowadays. Its extent in those days meant the main rail line ran through the middle of the city not its lower half as nowadays. The northern limit was where the Gabalfa flyover is, to the west it was Ely Bridge and to the east just beyond the Royal Oak pub. Half the population in those days lived south of the tracks in Butetown, Splott, Adamsdown, Newtown, Riverside, and Grangetown, with the rest in Roath, Cathays and Canton. That was it.
Dewi signed up like many young men because his friends from school and at the Post Office had done so. Their names tell us much about the population of Cardiff at the time: Frank Somers, Aubrey Mills, Pippen, Ropke, Sam Milner, Charlie Hardcastle, Hansford, Hardcastle, Billy and Cecil London, boys whose parents had probably moved to the city in the previous 20 years from surrounding English counties to take advantage of the new opportunities Cardiff was offering. They would all have been inspired to sign on by newspaper stories of German atrocities in Belgium, and in Dewi's case by the oratory of that hero of the Welsh, Lloyd George.
So, what did Dewi and his fellow Cardiffians miss during his four years away from home, unable to pop back whenever they wanted, like today's university students, and what were they looking forward to on their return.
Well, naturally enough, FAMILY was the first thought for all of them and throughout his letters there is a deep longing to be back home with his mother, his father and his sister, three years younger than he was. In various letters he writes to say he hopes this will be the only or the last Christmas he spends away from them or how much he is looking forward to going on holiday with them again. Like most of the men who joined up this will have been his first real experience of being away from south Wales.
This was a 17-year old at the start of his service and I expect the 17-year olds of that era were far less worldly than nowadays. Indeed, he made over part of his 10/- a week Army pay to his mother when he first went out, expecting his needs would be fully catered for by the Army, but he soon had to rescind this as he found he was always broke and unable to afford supplies to supplement Army fare. Early on he writes to his mother – who had perhaps warned him of the temptations he might face, to say. "Your words, Mum, will not be forgotten. I am sure the thoughts of you three would always make me act as you would wish me to." As the war went on he became much more of a Jack-the-Lad, almost cynical, British Tommy, adopting Army slang – much of it Cockney – in his writings.
By today's standards much of what he writes about his parents is very sentimental. His mother is the little woman at home of contemporary popular culture, the homemaker and nurse of every Victorian and Edwardian person's childhood. The typically domestic nature of her life – shopping and cleaning as well as cooking – is made evident in the frequent references he makes to the priority she places on those activities ahead of writing to him.
His sister, Doris, was different, perhaps reflecting societal changes that were already under way. He was very interested in and supportive of his younger sister's career and prospects, and there is every sign her family felt there were few limits on what she, a grammar school pupil like Dewi, could achieve. There were, it seems, opportunities for girls outside the home and marriage. At first she thought of becoming a teacher and he wrote encouraging her and observing all the long holidays she would get. Doris was never to go into teaching, choosing instead a commercial career, the skills in which Clark's also taught. Yet again, Dewi's reaction was positive.
"They do a lot for you, [at Clark's College] and you'll feel mighty pleased with yourself when the result of your examination is announced. Am quite pleased you are going in for commercial work. Perhaps, after all's said and done, the teaching profession is terribly crowded and inadvisable, therefore, to adopt. I rather think you ought to make a good opening in the line of your choice. Girls with their wits about 'em can make some brass at that game nowadays and I do not doubt for one moment you would make an excellent business-woman. Audacity is a valuable asset in the commercial world. You will find that it is necessary to put your nose to the grindstone in working for these particular posts, and I sincerely hope you will concentrate your mind upon your studies. If you do this, I feel confident you will never have cause to regret it, so Good Luck! little girl, go in and top the bill."
Whenever he was in a big city he seems to have made a point of looking for a present for her – usually silk or jewellery – in what we might now regard as a rather remarkable degree of affection for a younger teenage sibling. As he explains, he was not always successful, as when he moved from Egypt -with its opportunities to visit big cities such as Cairo, Alexandria or Ismailia, where he would sometimes find silks or scarves to send home.
From Palestine, he writes:
"These people are miles behind the times, as regards shops and all that. Gave it up as a bad job eventually 'cos, really, the miserable paltry specimen of the Birmingham jewellers' art (overseas department, remember) that I inspected were a gross insult to the average man's intelligence and would [not] have deceived even the dullest member of a West African missioner's flock. Never mind, don't worry, let it slide till I go on leave to Cairo again."
The main thing on his mind, however, was FOOD AND HIS MOTHER'S HOME COOKING – hardly surprising since the men were starving much of the time. The logistics of such an operation to one side, Gallipoli, Egypt, Sinai and Palestine did not offer opportunities to live off the land, as did France, or buy much to supplement their diet, and the Army found it very difficult to get supplies out to the men. German submarines operating in the Mediterranean – tin fish as the men called them – were also responsible for sinking many of the ships carrying food and other goods to the near East.
He writes from Gallipoli:
"There's only one tin of beef paste left now, and that'll go for brekker tomorrow morning. You see we're getting bread now, so it'll go down just A1 on that. Bout time, too, we sure have had our fair share of them hateful H&Ps. Jolly glad I've got a decent set of ivories to tackle em cos fellers with false ones don't half cop out – blooming near starve and got to break em up with pliers to nibble at em."
H & P had the Government contract to make hard tack, the men's emergency supply. Serving men much preferred sweet short bread biscuits ….
"Good old Crawford – back him against those shameful old rascals H & P any day of the week after jerking some of those toothsome dainties back."
It was no better in Egypt and possibly worse – no fewer than 800,000 men were in Egypt at one point – British, Australian, New Zealanders and Indians moving to and fro:
"Scuse me harping on grub but when you've had one piece of camel (I'll swear it wasn't pig) as salt as the Suez for brekker, cup of tea for dinner (could have had marmalade as well but told him to keep it as I was afraid of getting yellow jaundice through the blamed stuff fore long) and skilly for tea (when I had a row with cookie for doing me out of half my regulation issue of potatoes i.e. 2 and 156/164th ozs per man, it sort of haunts one.
"We've had peas(?) twice since we've been here (like marbles) but they only remind me of green peas I uster get. I've kept a few of the former in case I run out of ammunition in a tight corner and will risk breaking The Hague rules about dum-dums
The gap had to be filled by food parcels from relatives and friends, without which the men would have starved:
"We villains are hardened somewhat to such hard times, which are common occurrences in the profession of arms, but I venture to say never have we been so sadly reduced, no, not since the 15s as at present. Consequently, much as it pains me to broach the subject of vittles, allow me to encroach on your generosity by giving a few tips on the next parcels, dear Mum. Please do not imagine me in any way presumptive but somehow or other I am inclined to think you are not utilising as much as I would like the wide scope of your culinary genius. Now I suggest you employ it to make some lap cake, jam roll and Welsh Cakes. Teisen ar y Men, now and again as I know a chap yn yr Aipht who'd go absobloominglutely stark, staring mad with joy to see em turn up. Besides there are lots of other creations in flour, currants and baking powder prone to your art which I can't remember just now. Don't forget, Mum, if it's only compensation for not writing. I know you'd like making cakes better so there's a trump, will you?"
He was always desperate for his mother to write but it seems she largely left this to her better-educated husband and daughter.
We know from a list that his father kept that he received regular food parcels, posted from Carlisle Street Post Office in Splott or the GPO in Westgate Street, the contents of which were faithfully recorded. Altogether, we have records of about 30 parcels sent out to him. Thus, December 14th:
Enamel teapot full of sugar, tea, café au lait, mug, milk, spearmint, clear gums, candles, cigs,
or March 2nd, 1916:
Vermin powder, toffee, mirror, milk tablets, quinine tablets, tea tablets, milk, saccharine, chocs, cake, Pepsin, handkerchiefs, cocoa, cake, shortbread biscuits, toothpaste, cigs.
His requests were quite specific and usually also included other non-food items such as socks, toothpaste, writing paper, envelopes and plenty of other things the Army couldn't or didn't want to supply.
"Any sort of fruit or meat [i.e. in tins] will be OK, but fish is no good in this hot weather. Send plenty of chocolate, big chunks, and toffee from the Market, something to chew. A box of Abdullas [cigarettes] would not go bad either, Virginia … nothing Gippo for me.
"Beef pate like Aunt Janet once sent is the goods (another tip) … Lemon cheese is another excellent commodity, and I thoroughly recommend St. Ivel's cheese, while tinned sausages are a treat. Don't be dismayed I rather think I have acquired expensive taste on active service."
Specific brands he asked for which are still around included:
Sunlight Soap, Rowntree's Fruit Gums, Bournville Cocoa, Ideal Milk, Oxo, Brasso, Cherry Blossom, Pear's Soap, Nestle Café au Lait, Cadbury's chocolate, Johnny Walker.
Other everyday products that he mentions have disappeared.
Keating's Vermin powder
– very important in the desert where the men were crawling most of the time with lice –
Thos. Tickler jams, Batchers marmalade, Pepsin, Everlasting Strips, Remington typewriters and Allenbury's Food.
He responded to the parcels when they arrived with the most elaborate compliments and it would seem the men usually shared their supplies from home with each other, often devouring the contents in one sitting. The post to the Near East was highly erratic and sometimes the men would be left waiting for weeks or months for parcels they had been told about in letters that had got through.
The other great memory of home, and you must remember he was away for four years, was family OUTINGS. Dewi had gone out as a teenager and come back of age but was expecting to pick up some of the pursuits that had marked his younger days.
"One of the things I am dying for is to go off top table once again at Roath Park Lake, Gee Whiz. Not 'arf. "Me'n old Frankie Somers haven't settled that bet yet about first one out to the buoys. "Nights and nights we tried it but blow me we always touched it at one and the same time."
Roath Park was a swimming lake in that era. The authorities were not so worried about what you might catch in the water as they are now, and it probably did not get covered in algae every summer. Indeed, you can still see where the old changing rooms stood opposite the boating area. People used to come from all over the country to take part in an annual race up to the islands and back, the Taff Swim, until the 1950s.
Parents would be worried now but another place for larks – which he recalls with affection – were what was known as the mudflats. It is hard to think now of the area between Splott and the Rumney River where Tremorfa, Pengam – and Tesco – now stand as the wasteland they once were but this is where young teenage lads from Splott used to hang out, fun he recalls on several occasions in his letters. Another pastime he mentions was to head out to still rural Rumney to collect – shock, horror – birds' eggs.
For family outings there were trips to St. Mellons. You could go down to the Royal Oak in summer and book a seat on a charabanc trip out into the countryside to enjoy the innocent pleasure of a picnic in the fields and some games. Or you could pop over for a drink in the pub. Writing from the Suez Canal, Dewi tells his father he is looking forward to visiting the Unicorn in St. Mellons – still there – for bread and cheese and hop bitters. It will make a change, he says, after eating bread and marmalade for dinner and tea full of flies for days on end.
But perhaps chief among the delights he was looking forward to again was – Porthcawl. It might seem a bit tame nowadays when people can fly to the Maldives or the Seychelles but Porthcawl features regularly in his letters as a kind of holiday Mecca
"This place [El Arish] is nothing to go stark staring mad over as a spa and no-one would venture to this lonely spot to take of its waters, unless he was suffering more or less from an attack of "simplicity".… It is saturated with chemicals, disinfectants, etc. etc. which do not make it any the more palatable.
(The Army employed prodigious quantities of disinfectant to prevent the spread of disease in the desert – it was difficult to get rid of human and animal waste and flies were a constant menace for soldiers in this theatre. Dewi talks in his letters about swarms of flies instantly landing on bread and marmalade.)
But back to Porthcawl.
"It [El Arish] cannot be compared favourably with Porthcawl, for instance. The latter place has sand – so has this. The water at both places tastes the same, I expect. But there the comparison ends abruptly. Where are the rest of Porthcawl's delights, the proms, the shows, the green, the rocks, the – grub? Alas, no not here. They're taking a trip to Glamorgan land. Worst luck."
We can see from his letters that families who lived in Cardiff went on excursions frequently, though not more than 50 or so miles from home. The lime-kilns at Tintern, the Wye Valley, Rhossili, Peterston-super-Ely, St. Fagans, Sully, Rhoose, which was then a seaside resort, and Weston-Super-Mare, a boat trip away across the Bristol Channel, are mentioned, though, surprisingly, not Barry.
He is pleased in one of his letters to hear his father has arranged a trip in a motor-cycle sidecar.
"When you talk of St Fagans, Cowbridge etc. It makes me think of green fields and shady lanes and then I'm brought back to the stern reality of miles and miles of hot sand. Just fancy coming back from the beach to tea as we used to and then off for a stroll on the green and Lock's Common" [in Porthcawl]."
Of course, in those days there were trains to all those places. Splott had its own station at the town end of Splott Road near the old Splott cinema. With the new Cardiff Metro railway now about to take shape, we may be getting back there in another decade or so!
One other important thing on his mind was – you may have guessed – GIRLS. There were no Mesdemoiselles from Armentieres for soldiers in the Near East, where cultural practices were, of course, very different from home and women were much more restricted. (Cairo was a bit different but British soldiers were largely priced out of its pleasures by the Australians who were better paid and acquired an appalling reputation for roistering.)
For Dewi and his fellow soldiers stuck on the Canal one of life's treats was seeing girls on ships travelling up the Suez Canal. Perhaps surprisingly passenger-carrying ships made this crossing throughout the war, taking colonial families to and from Australia, New Zealand, India, and other points East.
"We're sort of cut off from the outer world and civilisation … Sometimes a liner comes past and this is one of our keenest delights. You'll see us rush up the bank to see the civvy passengers, like a lot of kids looking at a puff-puff.
"And the boys get quite delirious if there are any white girls aboard. … We're like a lot of savages from the wilds looking at this new device of the white man.
"One boat did chuck a lot of stuff to us castaways once, cigarettes, milk tinned stuff … Pretty exciting too, chaps from both banks racing to the middle for the prizes."
The native inhabitants of the area and especially the women were different, and he regarded them with a mixture of curiosity and European superiority.
"The inhabitants of the outlying villages pass along the road by our camp going to market in the town and it's always the donkey or the woman who carries the load. The man, her husband, rides on another donk, doing and carrying nothing. Lazy blighters, what? Anyhow, 'nuff said about the Arabs, we'll pass on to more pleasant topics, they're a bright lot of 'erbs, I must say."
"It wouldn't do, I am sure, for Miss Warren to preach the belief of the women's rights creed out here. The men wouldn't take it as calmly as in England. These people you see are totally devoid of such foolish customs of civilisation. These are the type of fair sex which disclaim any acquaintance with rouge while the latest hats, fashions, and coiffures from Paris do not interest them. They are never accompanied by Poms or Pekingese …Quite content these ladies are to live and die in the village of their birth tending cows and carrying water pitchers.
"Frequently they are to be seen accompanying their husband and master when he is abroad, trotting unwearyingly on foot behind the ass upon which the latter comfortably rides, yet one never hears of an Egyptian branch of the Women's Social and Political Union."
He was reflecting here Cardiff's reputation as a hotbed of suffragettism before the war, hosting the biggest branch of the Women's Suffrage Union outside London. Indeed, in 1913 Mrs Pankhurst herself had been charged with inciting violence after addressing a rally in the city and imprisoned. There had also been trouble at rallies at the big venue of its day, the Cory Hall opposite Queen Street station. And, of course, in Newport Margaret Haig Thomas, later Viscountess Rhondda, had been prominent in the Votes for Women campaign.
Writing to his sister who had just been to see Kismet, the musical in Cardiff he remarks on the social distinctions he had noticed between upper- and lower-class wome n in Egypt.
"It's quite true about the veils, yashmaks they call them out here, the ladies of the well-to-do class wear them, but the poorer classes don't, instead they wear bangles round their ankles and their feet bare, also they have rings through their noses and are invariably tattooed on the lower lip and chin. It's all very funny at first but you soon get to take no notice of them, instead you stare at any European ladies who happen to pass, which isn't often. As for my taking a liking to any of those young ladies, as you suggested, not me. Wait till I get back to Cardiff. They're the best, can't beat em, Doll."
Soldiers in World War One were not of course plugged into a 24/7 news agenda as nowadays but they were quite well-informed and wanted to know the NEWS from back home. Dewi asks repeatedly for two magazines, Weekly Telegraph and London Opinions to be sent out to him together with the weekly Cardiff Times. He never mentions the Western Mail, South Wales Daily News, or the Echo or Evening Express, the city's four dailies.
He quotes Lloyd George's speeches (approvingly) in his letters and is aware of other campaigns such as the Italian battles in the Alps with the Austrians. He is also familiar with events in France and the impact on local connections of the losses at the Somme and elsewhere. These were close-knit communities where everyone knew the people living not just close by but in neighbouring streets as well. He himself lost cousins in the war and kept coming across friends from home in different regiments when they happened to be posted nearby. He writes home frequently to say how sad events made him.
"Stanley James, another addition to the Roll of Honour"
"Very sorry indeed to hear of little Wally Shipton and your cousin Dad, it is indeed a terrible time for Mrs Shipton"
"Awfully sorry to hear poor old George Butcher has died in action with many gallant lads. There must be awful sorrow in Blighty now"
"I'm was shocked to hear of the deaths of George Daniel and Horatio, and cousin Walter at home an invalid"
"It seems so cruel and the sad news hit me hard. It will be a great consolation to think that they fell like Welsh gentlemen".
In one letter he expresses surprise at meeting up with his next-door neighbour from Moorland Road, a boy several years younger whom he hardly recognised, and is cross when he learns another soldier, Bert Price, probably serving in France, had not been allowed to get home in time before his mother died. There are frequent references, too, to a cousin, Tom, who was badly gassed in France.
Tom has, we learn from one letter, been under the recently invented X-ray
"Now that he will soon have the lead out of his arm we shan't be long before hearing from him."
Later however Tom is soon worse again and has had to be admitted to Splott Hospital – Moorland Road School – for an operation. Various schools and other buildings in Cardiff were requisitioned as hospitals, including Albany Road, Lansdowne Road, and Howard Gardens (the MSS), whose pupils were temporarily moved to Cardiff High School in Newport Road.
Soldiers' families back home also got news of their serving relatives from men who did manage to get home for leave or recuperation. They would often be asked to pop around and see parents or wives and children to tell them how their loved ones were getting on. The cinema newsreel had been invented by that time, so families could see as well as read about the war, though obviously in highly edited form. Thus, in April 1918 writing to his parents about General Allenby's famous entry into Jerusalem in December 1917 he says:
"I was much interested to hear of your having been to see the Entry into the Holy City on the bioscope. Gosh! I should have liked to see that with you and I can quite understand the enthusiasm when the orchestra struck up that very appropriate march. And now you want to know why you didn't see me there.
"Well, that's simply explained. I wasn't there, you see. Nunno, what you saw was all the pomp and ceremony of the official entry of the C. in C. – you didn't see the actual occupation by the old un cant pum deg a naw (159s). I went in there with the boys of the old brigade two days before that and there were no bands playing… Fancy you having seen the Jaffa Gate and the streets I passed along but a few days before and also see the fellers marching in.
"No doubt you went to the Gaiety that night fully expecting to see my ugly dial confronting you on the canvas? Never mind. As long as you see my triumphal entry into the approach via platform No. 3 everything will be OK. Won't it? That's the only entry I'm waiting or troubling about – and a single decker from the Monument."
Dewi was serving with a Welsh Division, the 53rd which meant there were other reminders of home in addition to the companionship of men from Cardiff and the rest of Wales. In their rest period they played football and rugby – there were men among them who had played for first class clubs – and went swimming together in the Suez Canal. One race across the Canal was against the British West Indian Regiment, Blacks v Whites, as it was termed. A very tangible reminder of home came, too, from their concert parties. The men sometimes made up their own troupes, the Kamelerio Sandboys being one:
"A real, tophole stage ([at Wadi Ballut] with quite the latest footlights and lime-light effects – plush curtains – with the arms of the party in gold upon it, two rabbits rampant.
To his sister about soldiers in drag:
"… they do look positively plums, real peaches. Talk about the light fantastic, too … they're real experts at the 'trip it lightly' game and such ankles – sublime, believe me – make many a real demoiselle turn green with envy.
"They have simply forgotten how to walk … a clumsy, slouching forceful tread. … They float along with those ridiculously short steps, like you see in Queen Street any old day of the week."
A professional group, the Welsh Rarebits, was founded by a Cardiff bandleader, Wally Bishop, aka the Great Waldini, who was serving with the RAMC in the Near East. After the war Bishop performed as a cinema musician but when the talkies came along he formed Waldini and his Gypsy Band which played in Romany costumes on the bandstand in Roath Park. He toured again during World War Two with Ensa, entertaining troops at home and abroad and later became a successful Palm Court orchestra leader in Llandudno and Ilfracombe. He died in St. Winifred's in 1966. The Welsh Rarebits, Dewi explains, were
"the only demoiselles we've got, barring the charming Buddoo damsels who are now millionairesses on the 15 tomatoes for 5 piastres touch and of course it's only natural that a feller likes to be deceived and felt like straightening his imaginary tie and parting his hair before he goes to a concert. Best thing a fellow can do in the EEF where leave is almost extinct."
So, what about the Cardiff they returned to?
On Armistice Day itself – a Monday in 1918 – the Western Mail was already anticipating the outcome with stories about the Kaiser's abdication, and revolution in Germany, which at the time was thought likely to go the way of Russia and become a Communist state.
Debate was starting in the papers over the re-employment of returning soldiers, the secretary of the National Union of Railwaymen in Wales, Arthur Williams, warning that, because of the great increase in the number of women who have entered industry and the great increase in labour saving machinery, the number of unemployed is likely to seriously increase". As just one example, Cardiff Corporation Transport Department had found it necessary to employ 25 women tram drivers, as 350 of its 750 employees were away at the war. Women were now firmly in the workplace.
Plans were also afoot for a by-election in Cardiff East. Lord Colum Crichton Stuart, son of the Marquess of Bute and brother of Ninian, killed at the Battle of Loos, would stand for the Conservatives, shipowner Sir William Seager for the Liberals and the NUR's Arthur Williams for Labour. There's a statue of Ninian, whose death caused a great outpouring of grief, in front of the Museum in Cathays Park.
The bells of St. John's Church would be rung as soon as the Armistice came into force and would continue throughout the day, and a procession of docks men would march from the Docks to the City Hall. Tens of thousands indeed joined the march, thronging St. Mary Street, Kingsway and the space in front of the City Hall. Miners would be given a day off as, too, would schools. On November 12th Style & Mantle of St Mary Street were quick off the mark with a Victory Offer on coats, costumes, furs, all at half war prices, "For the Women who Waited." James Howell advertised a clearance sale of furs – rather surprising perhaps in November. The Roath Furnishing Company placed an advertisement to thank our brave soldiers and sailors for their glorious deeds on land sea.
In many other respects, life had been continuing as normal. On November 12th the Western Mail reported on a 0-0 draw in the rugby match that Saturday between Cardiff and Newport, the Park Hall Cinema in Park Place was showing Jules Verne's 20,000 Leagues Under the Sea, and among the news stories was one about three girls who had fallen into the canal at Cathays Park. (It ran past the castle in those days.) They were rescued by a quick-thinking bus passenger who jumped off and dived in.
Amid the celebrations, however, the Western Mail was still carrying a daily two columns entitled Welsh Heroes. In the November 11th issue, Cardiff men who had died or sustained serious injuries included a seaman from Colum Road, soldiers from Eyre Street and East Grove, and four brothers, the Pleasses – one killed, one missing, one home gassed in France and one who had had his foot amputated.
What the men away in the Near East were not aware of was just how close the domestic population had come to starving because of the depredations of German U-boats, forcing the Government to bring in rationing and to require individuals to register with a butcher and a grocer and to drop their consumption by 20 per cent. Food riots had occurred in several places and fights among shoppers, including in Cardiff, were not uncommon. Bad feeling was rife – in Newport the police were accused of seizing butter from the market for their own consumption. Fuel, too, was in short supply, the Royal Navy and industry needing to be prioritised. One of the regular advertisements in newspapers of the era was for Rinso, hailed as the cold-water washer.
Petrol rationing was also brought in and those seen to be misusing the fuel were prosecuted. The actor Fred Terry, brother of the more famous Ellen Terry, and his chauffeur were both fined £5 by Cardiff magistrates, with the alternative of a month in prison, after an eagle-eyed policeman spotted them turning up at their theatrical digs in Tudor Street. They were told they should have caught the train from Cheltenham, the previous stop on their tour. Poor Terry, who said he had a heart condition, asked how he was now supposed to move his car if he wasn't allowed to travel in it and was told in effect by the magistrates, Tough!
Lower down the social scale a Cardiff fish merchant was fined for using his motor bike to collect fish from the docks. It was pointed out to him that a tram passed his house. The other passengers would, I am sure, have been pleased with his load!
Labour disputes were also increasing as a result of these shortages, and the truce that the labour leaders had ordered at the start of the war, promising not to resort to strike action, was proving difficult to sustain. Prices of essentials had risen, and the working population had been under pressure to work long hours for the sake of the war effort.
Dewi was lucky in being able to resume his job in the GPO – this was one of the employers that had kept posts open to returning soldiers. Many men were not able to do so, and race riots occurred in port cities such as Cardiff, Liverpool, London, Tyneside where coloured seamen had settled and were accused of taking the men's jobs. Four people were killed in Cardiff in outbreaks of violence that brought guns on to the streets.
Physically, Cardiff had not changed much during his absence – Zeppelins had never penetrated as far as south Wales so there was no bomb damage. Before the war the City Hall had been completed on land sold to the city by the Marquess of Bute but the rest of the Cathays Park development, including the National Museum, had largely had to be postponed and would not be finished until the late 1920s.
South Wales and Cardiff especially were to suffer over the next ten years because of a steep decline in the demand for coal. German coal was being sent to France as part of war reparations and this supplanted Welsh coal for which there had always been a strong French market. Even more importantly, the Royal Navy and the merchant fleet had begun the transition from coal- to oil-fired boilers, stripping south Wales of the main outlet for its steam-raising coals.
It would be the 1930s before the city started to pick up again with new light industries springing up on its fringes and its boundaries now extended to enable a new housebuilding boom to take place, including on land sold to the city by the Insole family of Insole Court for the building of Western Avenue and its surrounding estates. Other well-known landmarks would also appear in these inter-war years, including the Westgate Street flats and the new double decker stand at the Cardiff Arms Park, long since demolished.
All Dewi and the millions of other men now being demobilised wanted, however, on November 11th, 1918 was to get home and re-join their families and take up, if possible, their old jobs.
As Dewi writes near the end:
"Every other experience which is to be mine in the future will pall before that eventful, thrilling day of days when I shall literally hurl myself from the Paddington express towards that trio which I know will be waiting on No. ….. Oh, never mind the platform. If it's number umpteen, I'll be there, cos I think I've just about paid my fare.
Then I'll stick my chest out and swing my arm and the first frog-hearted, stiff-necked cross between a Spitzbergen sea-cook and a muzzled oyster, mealy-mouthed son of a doormat who cocks his nose at that'll be handed a bunch of double fives good and hard.
This was no longer the tentative lad who had left home four years earlier, promising not to let his mother down and making over his Army pay to her!
Rhys David is the author of Tell Mum Not to Worry: A Welsh Soldier's World War One in the Near East 1915-1919. ISBN 978-0-9-09930982-0-8
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Smoking in Adolescents, then and now
Posted on September 22, 2018 April 22, 2021 by Rhys David
The forbidden fruit of the 1960s schoolboy was smoking, a school magazine of the era reveals. Rhys David reports
Fewer than one in five men and women smoke in Britain and the numbers have been declining year by year. Nor are they smoking as many cigarettes. Only fifty years or so ago, however, a surprising number even of pre-teens from largely middle-class homes had taken up the habit, as a survey in an issue of a school magazine from 1967 illustrates.
Tua'r Goleuni (Towards the Light), the magazine (and the motto) of Cardiff High School for Boys was a conventional magazine of its type, edited by pupils under the guidance of a teacher, full of sports, after-school club and house activities for the preceding year, and enlivened by schoolboy prose and poetry, and quizzes. In 1963 the boys of the upper sixth form had the idea of surveying their younger confreres in the first three forms on their smoking habits and their findings offer an interesting commentary on how times and attitudes have changed.
Year 1967 Smokers Occasional Smokers Never Smoked
1a 2 8 15
1b 6 10 11
1c 2 8 15
2a 5 15 7
2b 7 20 8
2c 5 16 7
In this typical big city grammar school of its time, a total of 171 boys were questioned, sixty per cent of the total across the three year-groups (averaging 30 pupils per class). Their answers tell us much about attitudes across the group, though the veracity of the replies clearly cannot be vouched for. Some allowance needs perhaps to be made for schoolboy braggadocio.
Remarkably, however, 26 eleven-year olds (in the first-year forms) claimed to be regular or occasional smokers, compared with 41 who had not done so. Some will therefore have started even before they left primary school, perhaps, it is suggested in a few cases, as early as age six or seven. Two years later 75 third year boys were smokers (including occasionally) and only 24 had never been tempted.
The differences between the A stream (the more academic pupils) and their peers is not great, it is observed, though for some reason, which perhaps only child psychologists could have answered, the incidence in the B form is highest. The stress of being in the middle, and of falling between the two extremes of A and C perhaps, and of not knowing which would be the direction of travel? Boys in the C form were the more inveterate smokers, however, we are told, averaging four or five cigarettes a week compared with 1 or 2 among the more sensible A streamers.
Non-smokers generally thought smoking bad but mainly because it was a waste of money. About a quarter of this group expected to smoke when older, though one half were sure they would not. Others expressed a preference for a pipe, on the (erroneous) grounds it was healthier. Smokers recognised it was habit-forming, (though not in their case, of course) but several admitted concern at representations of habitual smokers racked with illness, with hardened arteries and stunted growth. The ill health threat could be countered by dropping the practice, many felt, and although the link between excessive smoking and cancer was recognised by many, the habit was conceived as a way to settle nerves or help relaxation, the influence perhaps of contemporary advertising. So perhaps teenage stress at school is not such a new phenomenon after all.
Most significantly, however, in the 1960s having a whiff was seen by most of those who participated in the practice as a way of rebelling. They enjoyed dodging authority by doing something they were not allowed to do, some even saying they would not smoke at all if there were no restrictions. Showing-off was admitted to be another strong motivator, with few claiming to enjoy the activity. Most smoking took place in bedrooms, back streets, parks, football matches and cinemas, often only at weekends or at parties, with only a few saying they were prepared to smoke in streets where they might be recognised.
The thrill of buying cigarettes over the counter meant boys preferred this to using slot machines, though in general they would not buy matches at the same time (presumably as this would suggest they were for personal consumption rather than for an adult who had sent them on an errand). Many only smoked cigarettes offered to them.
Two out of three boys said their parents had spoken about smoking usually to warn against taking up the habit and most thought their parents were ignorant of their sons' actions. Most boys were not critical of their parents for smoking but thought teachers should not do so in front of junior boys and should smoke only in their common room.
In conclusion the authors offer a sanguine judgment, suggesting the warnings by the eminent physician, Sir Richard Doll, who first showed the link between smoking and cancer, had yet to take effect. "It would appear that very little immediate harm can come to schoolboys from the small amount that they smoke. Many of the boys who smoked are members of the rugby and cross-country teams and so far, they have suffered no noticeable effects," they concluded.
Tua'r Goleuni, the Cardiff High School Magazine, June 1963. No. 19. Pps 10-11
Rhys David is an author and economic commentator
www.rhysdavidblog.wordpress.com
Posted in UncategorizedTagged Cardiff society WalesLeave a comment