‘Economic Dynamism?’
When I studied for my Economics A-level back in the heady days of the 1970s, the standard ideas we were taught to pay lip service to were of a mixed economy and state planning to overcome the occasional problems of markets and their operation. Regional planning to take jobs to people, particularly with the structural unemployment from the old major industrial job providers, was top of the agenda. Economists like Gunnar Myrdal inhabited our textbooks with talk of how to cope with backwash issues and maintain investment in regional areas rather than have all the benefits rush back into the major conurbations. Those seemed like such good days when you genuinely felt like you were part of a society, and that your family were as well.
Now the CBI has revived my memories of those halcyon days, calling, as it us, for a rebalancing of growth across the whole of the UK economy and not just focused on London. Does this mean a silencing of the siren calls of our financial sector, still deafening our UK politicians despite the experiences of the past five years? Does it mean a move away from the interests of our big businesses centred in London? Whilst the CBI give prominence to Enterprise Zones and Business Rate Retention, the likely Government response may well be predicated on regional pay and benefits and yet another sprint in our race to the bottom. I confess that sometimes I wonder whether our elite politicians and businessmen ever pause to consider who it is who is buying products and services and how they will continue to buy them if current trends continue.
Nonetheless the CBI’s rediscovery of those of us who are not living and working in London is a welcome, if perhaps belated, event. It is interesting it should occur as Cardiff City Council releases its preferred strategy on the local plan seeking a substantial increase in the size of the City to aid its ‘economic dynamism’. Whilst drawing too crude an analogy is obviously dangerous, it is to be hoped that the elite politicians and businessmen of Wales do not see the UK model as one to be followed too slavishly. Certainly, speaking as a resident of the valleys, some serious investment in Cardiff’s northern hinterland would prove very welcome and it would be nice to think that all those MP and AM representatives of the valleys will be doing their utmost to bring this about, although if past form is anything to go by this might be too much to ask for. Similar comments could be made for many other areas of Wales as well.
Ironically, of course, many of those businessmen the CBI are seeking to act as advocates for are dependant on demand outside of the UK, just as many of those who buy our goods are dependant for their jobs on purchases made here. This is why our government has been vociferously complaining about the problems in the Euro Zone, themselves exacerbated by economic policies in Germany and France which have looked remarkably similar to those followed in the UK.
Meanwhile the USA reported unexpectedly healthy growth figures on the back of increased government expenditure, and despite poor harvests. At the risk of sounding partisan, let us hope for all our sakes that this is enough for Obama’s re-election campaign to gain new life and vigour, for if Romney manages to institute the same economic policies that have been followed here and in other major areas of Europe then we should all be fearful. It is one thing to remark on the absurdity and lack of justice and equality in an economy where when most of us are just beginning to bask in some much appreciated warmth a slowdown is engineered to prevent the London area overheating, it is another for the one economy which is really driving activity in the world economy to suddenly draw in its horns and leave us all high and dry. Perhaps in our globalised new world we should all shout: ‘no public expenditure cutbacks without representation!’
Gerald Taylor is a lecturer in social policy at the University of Glamorgan
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