Time to stop obsessing about GVA

Victoria Winckler argues that the Welsh Government should stop worrying about GVA. Instead its priorities should be more and better jobs, a balance across Wales and access to jobs for all groups of people.

It’s more than six years since the Welsh Government published an economic strategy. Indeed it wasn’t even the last government that produced it but the one before! So many things have changed since then that there is a good case for a fresh look at the whole direction of travel and to focus on what really matters.

Our response to the Welsh Government’s consultation on its economic priorities says there are three things it should do.

More and better jobs

Wales has obsessed about its GVA for nearly 20 years. It has been the subject of media headlines, learned papers, conferences and manifestos.  I suspect we have the EU to blame for this focus on a rather simplistic measure of economic output, because it is Wales’ low GVA per head that triggers the release of the Euro millions.

But while GVA might be a useful measure it is only one aspect of Wales’ overall economic well-being. Indeed, it is entirely feasible to have high GVA per head alongside deep poverty – we only have to look at London for the evidence of this. And if GVA grows, it is not uncommon for there to be no increases in employment (so-called jobless growth) or for the jobs to go to people with the strongest skills and ability to travel – people who are not necessarily those who most need a job.

So growing employment and improving the quality of jobs – in terms of their pay, conditions and security – should be the number one priority. To do that means valuing all jobs – whatever economic sector they are in – not just the so-called strategic sectors.

A Geographical Balance through Growth Hubs

The second priority must be getting a better geographical balance to economic growth.  Whether you regard Wales’ recent economic performance as a ‘success’ very much depends on where you stand: in Cardiff and the M4 corridor, you may well look at the cranes and the cars and smile with satisfaction at how well ‘Wales’ is doing. Travel 25 miles north and look at the empty shops and derelict industrial units you may well reach a different view.

Yet Wales’ spatial strategy – if it deserves that name – consists of a plethora of small-scale area designations! So we’re calling for a limited number of bigger enterprise zones coupled with a handful of key growth hubs – one of which should be Merthyr Tydfil.

Social Balance

And last but not least the Welsh Government needs to address the deep social inequalities in the labour market – including the low employment rates of disabled people and people from ethnic minority groups. Carefully targeted and personalised help to support people into work is important, but so too is stamping out discrimination. We’d like to see the Welsh Government and employers do much more.

The Welsh Government has already said it is committed to ‘spreading prosperity’ – although it is far from clear what that means or how it will do it. We hope that our ideas will be taken on board by the new Cabinet Secretary – and that we will  really see inclusive growth at last.

Victoria Winckler is Director of the Bevan Foundation