Measuring Wealth and Poverty

John Osmond on how the First Minister is putting faith in the Assembly Government’s new Foundation Phase early years education curriculum to tackle child poverty

First Minister Rhodri Morgan signalled today that bringing Wales’s economic output per head up to the UK average, a major objective at the start of devolution a decade ago, is permanently off the radar.

He declared that measuring Wales prosperity on the basis of comparative average GVA (gross value added) across the UK was a meaningless exercise, because it did not compare like with like. It did not take into account difference in population structures, such as numbers of retired and older people, children, the economically inactive, and cost of living differences from one region and another.

Speaking at a Cardiff seminar to launch a Rowntree Foundation report on Understanding attitudes to tackling economic inequality the First Minister said the fact was that, despite its GVA declining in relative terms compared with the UK as a whole, Wales was 50 pr cent better off than ten years ago.

“GVA is not a good measure” he said. “We only cling on to it because it is the standard used across the European Union to calculate eligibility for Convergence Funding, and of course we in Wales benefit from that.”

During the first year of devolution the Assembly Government’s declared aim was to increase the Welsh GVA from 77 per cent to 90 per cent of the UK average within a decade. However, it very soon abandoned this objective and our GVA has actually declined to 75 per cent in 2007 (the latest year for publication of the statistics) – that is, a full 25 per cent below the UK average.

Rhodri Morgan said he would like to see a better measure of comparability based on factors such as sustainability and quality of life. However, he did not see such measurements emerging to replace GVA for at least 20 to 30 years because Wales had to be able to put forward comparable statistics in the international context, especially in relation to the European Union and United Nations.

He said the Assembly Government’s flagship policy for reducing child poverty was its new Foundation phase curriculum for thee to seven-year-olds, which was introducing a Scandinavian-style play-based education curriculum for the early years. This was designed to tackle the situation which, as he put it, under the previous nursery education system, “dull middle class children” overtook “bright working class children” by the time they were six.

“The learning through play model is an attempt to break this cycle, and provide working class children with a sense of confidence and engagement to take with them through the rest of their education. In the long-term I believe the pay off will be bigger than anything else we can do, even in terms of taxation.”

John Osmond is Director of the IWA.

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