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WALES POST COVID-19: Time for a New Approach

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This report was written by Michael Plaut OBE, a Welsh businessman and a former Chair of CBI Wales and Dr Meirion Morgan, who has co-founded a number of businesses, worked extensively in the financial services sector, and teaches mathematics and business. He is on the board of a number of not for profit organisations and is Chair of Gorwel.

Gorwel is an independent, Welsh, non-party political, think tank. Gorwel publishes papers and research that can help stimulate topical debate on a variety of issues central to the future prosperity and good governance of Wales.


As we noted in the introduction to our initial paper, “Time for a realistic perspective on Wales”, Wales is not just a beautiful country but one with huge potential. Economic and social challenges have existed for decades, but the profound effects of Covid-19 offer us a golden opportunity to refresh our policies and reshape our institutions to build for the future.  Wales’ need for social cohesion and a functioning economy will require difficult but essential choices.

We have a stark choice: we can either as a country choose to do little, and see Wales suffer as the economic and social challenges of a post Covid-19 world impact, or we can decide to  be courageous and adopt new ways of thinking and new policies to help build a new Wales.

We hope this paper acts as a catalyst for discussion and debate.

“We are too great a nation to limit ourselves to small dreams.”

ECONOMIC GROWTH

Covid-19 has severely damaged the Welsh economy and there are whole swathes of activity where there is no certainty of recovery.  Yet, without a thriving private sector Wales risks becoming a poor, high unemployment backwater of the UK. With strategic investment required, is it time the Welsh Government establishes an economic and restructuring agency to provide a framework that maximises the chances of success before any public money is spent?

It is imperative Wales has a pro-business attitude, one where the Welsh Government does not seek to micro-manage the economy. We need the Welsh Government to put its resources in providing an environment that is business friendly – good infrastructure, low taxation, appropriate regulation and a skilled, educated workforce.

In addition there are a number of key issues that we need to address. How do we maximise public procurement opportunities for Welsh firms? How do we build stronger links with the much larger economies that border Wales? How can we properly utilise the strength of our universities to create new businesses? How do we benefit from the Welsh diaspora?  Should any public money to help Welsh businesses to survive and grow be by way of equity investment rather than loan or grant? We should seek answers to these questions expeditiously.

WELL BEING OF FUTURE GENERATIONS

It is very difficult to say anything about the Well Being of Future Generations Act without being heavily criticised; but we believe that as such a central and important building block for the future it does warrant constructive discussion and debate in order for it to succeed in its aims.

If we are to lead the world with this ground-breaking legislation, we need to demonstrate that the Act supports and enables a prosperous Welsh economy in practice as well as on paper. We also need to encourage the Commissioner to take the lead, and actively champion large /scalable businesses and sectors to ensure that Wales can have a thriving economy going forward.

How do we in Wales ensure that the Act becomes an enabler to help Welsh businesses create jobs and generate prosperity in a financially viable, responsible and forward-looking manner? Which industries should we be championing? How do we become leaders in these sectors?

INFRASTRUCTURE

In order for Wales to thrive we are going to need an infrastructure that provides a springboard for growth; we need our utilities, telecoms and transport to be fit for purpose. We are going to have to be sensible and selective in choosing how and what we invest in.

We must ensure it is easy for people, data and goods to travel into, out of, and around Wales, and we need places for people to live and work. We need planning structures and systems that incentivise, not impede. We also need “spade ready schemes” that can begin the moment money is available.

What bold steps have to be taken in Wales so decisions on crucial elements of infrastructure do not require decades of deliberations? We have an Infrastructure Commission in Wales, but if it is going to make a difference it has to be given a deliverable remit, with additional powers. At present it does not seem to the enabler so many of us wanted it to be. How can this be changed?

DEVOLVING POLITICAL POWERS AND FUNCTIONS TO THE MOST APPROPRIATE LEVEL

We recognise that devolution is a process, not an event. However, how Wales is governed must be sensitive to the needs and demands of Wales’ population, a population that ultimately seeks social and economic progress from the opportunities appropriate devolution brings.

We need to find solutions to competing jurisdictions, duplication of overhead, and a lack of accountability.  We need to ensure Wales’ structures and processes are efficient, effective and easily understood.  This becomes more urgent as we seek to deal with the constitutional issues that are arising from the repatriation of powers from Brussels.

It is time for us to revisit some of the unanswered questions, including which powers are best vested in Westminster, or Cardiff Bay or at a Local Government level?

WELSH PARLIAMENT

Much was spoken on the creation of the Assembly of the desire for openness and transparency. With the Assembly now the Welsh Parliament we have the opportunity to refresh our democracy and recapture some of the original aspirations.

Accountability is an issue and one suggestion would be for each Minister to publish an action plan for their department, with key performance metrics to help improve transparency and delivery.

We need to demonstrate an open and functioning democracy that welcomes a wide range of opinions. At present there is limited appetite amongst some for new ideas and new approaches and this reluctance does not always serve Wales well. Should we look to limit the number of terms a Member can serve to constantly refresh the talent pool? Whilst we have some excellent Members and Ministers, what can we do to attract Members with life experiences from outside politics?

REVITALISING THE CIVIL SERVICE

Covid-19, Brexit, technological change and increased public expectations will create challenges of complexity and capacity in Wales’ Civil Service in the years ahead. With these in mind, a comprehensive review of the Civil Service may be timely to ensure our many good civil servants can focus on delivery.

We need to ensure that our Civil Service has in place structures, practices, and benchmarking to best serve the people of Wales.

Other countries benefit from public-private collaboration, why can’t Wales? How do we encourage a focus on delivery? Can we encourage more two-way personnel transfers between business and the Civil Service to continually refresh thinking and experience?

LOCAL GOVERNMENT

Whatever the political challenges, Local Government reform cannot continue to be postponed indefinitely, as post Covid-19 we are going to need to prioritise many of the services delivered by it.

We have some well-run Local Authorities with many good leaders and members, but the relatively small size of Local Authorities limits economies of scale and effective service delivery for the people of Wales. The Williams Commission noted six years ago that “good practice is a bad traveller” and there remains little evidence to the contrary.

With a population of 3.1 Million how many Local Authorities does Wales really need? Can we move from the current 22 to 4 or is that too few? How do we redraw boundaries to ensure that other statutory bodies share the same geographical footprint?  We owe it to the people of Wales to ensure that our Local Government is the best it possibly can be.

TAXATION

Post Covid-19, less money will flow through the economy and the Welsh Government may well be tempted to raise taxes where its powers permit, something we would caution against. One only needs to look at another small country, New Zealand, to see how tax reform aimed overall at lowering tax rates has benefited economic growth. The same with our neighbour, Ireland.

Wales needs to use taxation as an enabler to economic development and it’s far from a given that higher tax rates will achieve it or increase the amount of revenue raised.

We would urge the Welsh Government to model changes to any taxation policy carefully. An attractive level of taxation may yield significant benefit in inwards migration of skilled professionals and business investment; helping both the public and private sectors.

CONCLUSION

Among all the challenges posed by Covid-19, Wales has an unprecedented opportunity to re-shape its future.

Let us be courageous and adopt new ways of thinking and new policies to help build a Wales that we can all be proud of.

“The future of Wales doesn’t belong to the faint hearted, it belongs to the brave.”

While the opinions and questions raised in this report are of its authors, not Gorwel, they have been informed through input from experienced people across Wales. Like the authors, they are all passionate in their desire to create a cohesive, prosperous Wales.