Election Special 9: Signs of a maturing approach

Brian Morgan finds a major swing in this election’s manifestos away from promising the earth and pretending that governments can solve every social problem

As Thursday approaches voters are being wooed more assiduously by all the political parties. And, as usual at election time, they are being offered mostly uncosted promises of a better future. However, a novelty in this Welsh Assembly election is an awareness of the economic realities and the extent to which the support of the business community is being sought by all parties.

The Welsh General Election

This is the ninth in a series of articles we are publishing in the run-up to the National Assembly election this Thursday. Later today Geraint Talfan Davies, Chair of the IWA, surveys what the parties have to say on culture, heritage, and broadcasting.

Perhaps this is not surprising at a time when the main economic indicators place Wales squarely at the bottom of the UK prosperity league tables. Against this backdrop, with most parties acknowledging the weak state of the Welsh economy, economic growth is high on the agenda. But the key question is: what are the prospects for real improvements in economic prosperity?

Some of the policy differences highlighted by the parties stem from alternative expenditure priorities. Their plans to raise or cut spending in one area or another is a contentious part of the election debate. But the ability of the next Government to fund and deliver grandiose spending commitments remains in doubt since there is in fact very little budgetary room for manoeuvre. Hence it is not surprising that the actual differences between the main parties in terms of expenditure commitments is only around £250 million – less than 2 per cent of the Block Grant.

Looking at what the money will be spent on, the business community will welcome the enthusiasm of all parties to invest in infrastructure and they will also appreciate the promises to cut business rates. But, thankfully, promises of large increases in public expenditure to stimulate the economy are absent from all the main manifestos.

This in itself is an important step forward because the main drivers of economic growth in small regional economies like Wales are well known. Invest in education and skills, invest in infrastructure, improve the delivery and cost-effectiveness of public services, attract inward investment and encourage and support existing businesses to invest for growth.

What do the manifestos offer in these crucial areas? Although most of the economic drivers are mentioned in the small print of the manifestos, headline pledges by the four main parties have major omissions.

For example, Labour’s main election pledges focus on: more apprenticeships and more funding for schools; better access to GP surgeries; extra police and free childcare. They promise a commission to reshape the civil service and put more emphasis on delivery. They will bring more policy areas under the direct control of the First Minister, including energy where they want to double the production of renewable energy.

Like the other parties, Labour intends to reform the Barnett Formula but they specifically will not seek powers to vary income tax. However, they will look at innovative ways to raise capital. They will not increase tuition fees for Welsh students and protect free bus passes and free prescriptions.

The Conservatives main promises are: invest in education, scrap business rates for small businesses; eliminate child poverty and protect the NHS budget. In addition they would form a public-private-partnership to invest in infrastructure projects.  They propose to increase tuition fees in line with those in England but it is interesting that they will protect free bus passes and free prescriptions.

They too would like to reform Barnett but the Conservatives would also seek powers to vary taxes. Their main promise is to stimulate private sector growth to raise wealth levels in Wales to 85 per cent of the UK average by 2020.

Plaid Cymru’s has four key pledges: ensure that primary school leavers are able to read, write and count; provide more effective healthcare; provide loans to help small businesses to grow, create jobs and improve training; and  connect Wales with better broadband and transport systems. In addition, they promise a ‘decade of delivery’ and propose a not-for-profit company that would invest in public infrastructure projects and create up to 50,000 jobs.

The Liberals will focus on: promoting investment to stimulate growth and reshape the economy; create innovative companies; tackle the skills gap and introduce training grants; reduce Government waste; improve and localise healthcare; and invest in renewable energy, broadband and infrastructure. They would support this programme by establishing a Welsh Stock Exchange, freezing business rates and harnessing private investment to grow the housing sector and other sectors, including tourism.

It is difficult to do justice to all the economic commitments and promises contained in these very long manifestos. Although most commitments are uncosted, there has been a major swing away from promising the earth and pretending that governments can solve every social problem. Indeed, comparing these manifesto commitments with the expensive ones made in 2007 provides evidence that Welsh politics is becoming more mature.

If the arithmetic of the new Assembly proves to be as tight as forecast then it will take strong political leadership to turn these promises and wish-lists into an effective strategy to reshape the Welsh economy and deliver on economic prosperity. Top of the list must be to find ways to fund investment in infrastructure and skills, incentivise business growth and reform the public services to ensure the effective delivery of these policies.

A good start would be for the new government to set out some key performance targets for the main economic drivers and agree to measure and report progress towards them annually. The incoming government would then rise or fall on results. Now that really would be a sign of political maturity.

Professor Brian Morgan is Director of the Creative Leadership and Enterprise Centre in UWIC’s Cardiff School of Management.

Also within Politics and Policy