Next time there is a boom, we need to make sure all areas benefit.

The news that the growth forecast has been revised down further offers additional evidence that the economy is not currently working (pun intended). The news of continued flat or negative growth is joined by growing inflation, and rising unemployment. These are three factors in a wider set of indicators that are all worrying news. This is in addition to the fact that we are now a net importer of oil, and are thus more exposed to fluctuations in the oil price.

There is one school of thought that says this is a temporary blip caused by the recession, and that growth will return and people will become employed again. But there is also the danger that we face a lengthy period of stagnation, or a jobless recovery. As Victoria wrote recently, the danger is that Wales may not even see the benefits of growth in the south east. This is an additional reason why we should stop thinking of the UK economy as a single entity, and instead look at it a series of interlinked regional economies. In Wales that means that low growth and high unemployment have unfortunately been a feature of our economies for too long.

On Friday we will know whether the Welsh Assembly will be able to go forward with the tools needed to tackle some of these issues, or whether we will be continuing with the small scale work that had initial results but that was undone by the recession.  But what is clear is that even if the overall figures for growth begin to start looking positive, we need to ensure the benefits are more evenly spread.

In the last economic boom, it is clear that the benefits of such growth were concentrated amongst those who owned their own homes and were able to use the rising value of their homes to increase their wealth. Amongst non-home owners, the economic boom simply coincided with being priced out of the housing market. In poorer areas, the boom merely enabled people to move from the unemployment register into work that was often temporary and low paid.

So it is clear that when (or perhaps if) the economy recovers – be it next year or in the next 10 years – there is a need to ensure the mistakes of the past are not repeated. This means the assembly needs to focus on ways of ensuring that we can all benefit from an economy that recovers by ensuring it develops policies that promote permanent employment in skilled industries, spreads the wealth away from the centre so all areas of Wales benefit from growth not just the main cities, and also invests in ensuring Wales never again is so dependent upon decisions made by central government.  This means in May the new assembly administration needs to be making plans to achieve this, hopefully with the tools necessary.