Turning Cardiff into a hot city

John Osmond reports on Rhodri Morgan’s recommendations for a successful Welsh economy

Former First Minister Rhodri Morgan made a call last night for a direct rail link from Wales to Heathrow. In an IWA Cymmrodorion lecture in the Pierhead Building in Cardiff Bay, he declared, “This would be the single most important piece of infrastructure investment for turning Newport, Cardiff, and Swansea into hot cities.”

In a wide ranging analysis of the future of the Welsh economy, looking beyond the impact of the next three or four years of spending cuts, the Cardiff West AM identified skills, infrastructure and quality of life as being key elements around which to build success.

He said that during the first decade of devolution when he had been at the helm of the Welsh Government Wales had been squeezed between the Irish Celtic tiger to the west and Poland, Slovakia, the Czech Republic and other emerging economies to the east. “Slovakia acquired three car assembly plants in the last five years when we didn’t get one in the last fifty,” he said. Meanwhile, “Ireland with its low corporation tax specialised in software and the life sciences.” In this highly competitive environment, and with relatively poor communications, Wales had been squeezed.

But looking ahead Rhodri Morgan said success would come to those socieities that created what he called a hot economy, capable of generating and keeping talent. Currently Wales was a net exporter of people in their twenties. A key challenge was to create  an attractive society in terms of culture and quality of life that would lure them back. He suggested that the success of John Lewis in Cardiff was worth more than a whole array of government-led inward investment inducements.

Cardiff would be increasing its population substantially in the next few decades, from today’s 325,00 to 450,000 by 2050. A key planning decision was whether this would be concentrated to create a metropolis, or dispersed into the mouths of the Valleys. Which would create the better quality of life?

First class communications was presently holding the Welsh economy back. Unlike the north south Wales does not have ready access to an international airport, which was why a direct rail link to Heathrow was so important, along with electrification of the line.

He compared western Britain, Cardiff and Bristol, with the Rennes and Nantes region of western Brittany. Benefiting from direct TGV access to Paris, and from much lower housing and development costs, and a good quality of life, Rennes and Nantes were the fast growing French region. With a fair wind there was no reason why Wales could not find itself in a similar position in ten to 20 years time.

But he was rather more downbeat about the immediate future. He said the forthcoming public spending cuts threatened to make the private sector look bigger in Wales just because of the shrinkage of the public sector. Currently 24.7 of Welsh jobs were in the public sector, compared with 20.7 per cent in the UK. That wasn’t a huge difference and in any event was only the case because Wales has a relatively small private sector compared with the UK as a whole. It also reflected the fact that Wales has an older population and privately-led health and education are small.

If as a result of the forthcoming public sector cuts, Wales’s private sector artificially grew by comparison, that would be his worse nightmare.” It would be an operation without an anaesthetic,” was how he put it.

John Osmond is Director of the IWA.

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