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Developing an economy that works for everyone

Almost a quarter of the people in Wales live in poverty, and poverty is costing the Welsh Government £3.6bn a year – a fifth of its budget.

Those are the stand-out headline figures from a new report published today by the Joseph Rowntree Foundation and the Bevan Foundation.

The report is published at the same time as the Trussell Trust published its latest figures showing foodbank usage in Wales was on the up,

These stats and headlines should be enough to make anyone angry.

Following the ONS figures showing that income in Wales is considerably lower than the UK average, that we have less spending power than elsewhere, and that we are less productive, it should come as no surprise that so many of our people live in poverty and depend on food banks.

And it’s not right.

But what’s more interesting within the JRT report is that they claim to have a plan showing how to solve poverty in Wales. A bold statement.

The full report goes into some details, but their Press Release covers the basics, and includes five points which, they claim, will abolish poverty.

As we will see, for any of these points to succeed they depend on the other succeeding – in other words politically it means that we require cross-departmental working, with each department within our various strands of Government and each Government working together. This in itself is extremely difficult

Developing an economy that works for everyone.

The first point is probably the most obvious and crucial, headlined “Developing an economy that works for everyone”. It states that we need to “create more high quality jobs through developing industrial strategies for low-paid sectors” and rebalance “the Welsh economy and promote inclusive growth by refocussing Welsh Government business finance to support the creation of good quality jobs where they are most needed.”

And here, straight away, we see the problem with this report. Now don’t get me wrong, this report is to be welcomed, and the stark findings are to be welcomed, but the authors have limited their assessments to the competence of the Welsh Government and the limitations of the Welsh Assembly. This first point we have referred to on Developing the Economy is proof.

Rebalancing the Welsh economy will only take us so far. As we have seen already the wealth disparity within Wales is relatively small. With the exception of Monmouthshire, whose gross weekly income per head per week is significantly more than the rest of Wales, we know that income throughout the rest of Wales is amongst the lowest in the UK.

It is not rebalancing the economy within Wales which is needed, and this report has spectacularly missed the point.

We need to rebalance the economy within the so-called United Kingdom.

Whatever one might think of the Welsh Government, they have no real ability to set economic or fiscal policies which would help increase the Welsh GDP. Yes they could do more, and the suggestions put forward in this report should be looked at. But overall economic and fiscal policies which allows for the creation of wealth, wealth disparity, and poverty are set in Westminster and are currently designed for the benefit of London and the south east of England.

This is where the disparity lies.

Cutting Costs

Similarly the fourth point also fails, which is that policies made in London are damaging Welsh communities.

Cutting costs. Poverty cannot be eradicated if essentials like housing, food and energy are unaffordable for people on low and modest incomes. To control the cost of these essentials, the Government could:

  • prioritise the  building of more genuinely affordable homes and link social rents to local earnings through a Living Rents scheme

  • work with private landlords to improve conditions and affordability in the private rented sectorwork with suppliers to end the poverty premium and make sure that essential services like public transport, the internet and financial products are available to people on lower incomes.

While the Welsh Government can develop policies which can influence these issues to a degree, the fact remains that these are issues which are a consequence of economic policies which are devised not for the benefit of Wales.

Furthermore short term inflation is set by the bank of England and long term inflation is influenced by Government policies. Unless we have control on our own fiscal policies in Wales we have no real chance of influencing on issues such as the cost of living here.

The report throughout misses the whopping elephant in the room, which is Wales’ inability to tackle the issues head on because we lack the powers needed in order to do so.

No amount of fiddling with the very limited budget that we have can rid Wales of poverty. Only by taking control of our own affairs, our own economy, and our own communities directly will we be able to even start to tackle poverty in Wales.

The JRF and Bevan Foundation have done some sterling work bringing these tragic facts and stats together, but if we are serious about getting rid of poverty in Wales we need to tell those in power that the answers lie within us, the people who live in Wales, and that only by allowing us to develop our own policies for the benefit of our communities will we see Wales and her people flourish.

As one twitter user put it,

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