The claim
Adam Price is one of the more historically aware Welsh politicians active today, as demonstrated by his elegiac pieces (here and here) on the life and times of Rhys ap Gruffydd. He also supplies today’s claim, voiced on this week’s Dragon’s Eye. He said:
the Welsh economy has been in relative decline compared to England since 1924. Is that because we are predetermined to poverty? I don’t think it is. It’s because we haven’t had the tools in Wales to control our own future.
A two-part claim to explore, then. Has Wales declined and, if so, is it attributable to the factors he describes?
The evidence
Data from Price’s pinpointing of 1924 are hard to come by, at least for this author, as are comparisons with England as opposed to the UK. The nearest interval I have found is 1911,1 at which point Welsh per capita GDP stood at 90.1% of the UK average compared to today’s 75% (GVA).2 A solid decline then, but two caveats are worth noting. The first is that the trend is not continuous. By the mid 1950s the figure had fallen to 82%, but by 1971 it had rallied to 87.5%. Only from here does it begins a more-or-less constant, if gradual decline into the early 80s, before dipping further into the present mid 70s from 1999 onwards.3
The second caveat is that the really long term picture is slightly different. In 1871 (the first year that relevant census data were collected) Welsh GDP was 88% of the UK average – almost identical to a century later. Moreover, since the trend at that time was upwards (in 1881 the figure was 90.6%, by 1891 it reached an all-time high of 96%) in line with the intensifying industrialisation of Wales, it is plausible to suppose that this figure was lower prior to 1871. Rather than a steady decline, we could then just as easily talk of a negligible or even positive net change in relative Welsh per capita GDP merely by choosing a longer run.
But in the long run we’re all dead, and this is not an argument against Price’s second clause. At no time for which records exist does Welsh GDP reach the UK average, so if the Welsh have been relatively poor for at least a century and a half (including during and after the industrial era) does it not show more conclusively that the malaise is attributable to the system of government, at least in part? Let’s look at that element of the claim now.
The story of the Welsh economy from 1924 has already been discussed on this site. A part of Britain more dependent on primary extraction than any other,4 Welsh industry – and in particular coal mining – was allowed to become relatively unproductive by dint of the sheer volume and quality of its produce,5 while at the same time there was little diversification into manufacturing or other sectors that would allow other parts of Britain to recover more quickly. Wales was thus uniquely dependent on the international trade eviscerated by the depression. As if that were not bad enough, the decision to return to the pre-war gold standard – a decision endorsed by the Labour Party – make exports even less competitive.6
Only with the benefit of hindsight is it possible to say that the skids were under the Welsh coal and other extractive industries – at least on anything like the scale they existed – from the early 1930s.7 In addition to a global contraction and London’s fiscal hobbling, oil was supplanting coal as the fuel of choice in shipping. In tinplate and steel production the technological shifts were less pronounced, but the pattern of demand was just as unmistakably downwards. This structural transformation surely appeared more cyclical to politicians and governments of the time, who concocted a variety of abortive and half-hearted schemes to revive industry and, in some cases, diversify the economy. The overall lack of direction was evoked most famously by Edward VIII’s plaintive injunction at Dowlais in 1936.
Following the war more concerted, co-ordinated and successful attempts were made to restructure the economy, resulting – or at least assisting – in the temporary reversal of fortunes observed above. Nationalisation and the creation of the welfare state are the obvious totems. But so too was the conversion of wartime ordnance plants into novel – and massive – industrial estates. In the week that the Hoover plant in Merthyr closed, it is worth noting that it only opened as a result of a government grant designed to induce large manufacturers into coalfield areas.
So does the fact that these were not successful in the longer run8 matter for the purposes of this discussion? Surely what this period evidences is that Adam Price’s “tools” – the levers of power – matter. A succession of governments dedicated to something approaching a coherent industrial policy for Wales (or at least for the parts of Britain with characteristics like Wales) did make a difference in relative wealth levels. The extension, one assumes, is that the more the tools, the greater and more beneficial the effect.
At this point we enter the realms of the counterfactual: would or could have Wales prospered more and suffered less had she enjoyed self government during this era? There is almost no way to answer that question. Though the comparison – until last autumn, at least – was with the Celtic Tiger of Ireland, hers was no example until the late 1980s. Nor is it right to look at the Irish economy in any sort of historical perspective and expect it to yield answers about how an independent Wales may have fared. In place of a natural comparator, the emphasis has been on the success of so-called small countries to establish the case, although Plaid Cymru’s recent inclusion in this list of the Netherlands, a country whose 16 million population is very close to the EU27 average, is perplexing.9
Besides, there are other factors about which even the tools of government can do little. A recent study showed that Wales, along with “declining” English regions, became effectively more peripheral parts of the British Isles during the period, due mainly to the modal shift in goods transportation from rail and sea to road, and the increased costs involved as a result.10 This affected their access to the populous markets of London and the South East, as well as mainland Europe and beyond. It also affected the investment and location choices of organisations. An independent Wales, or one with some devolved powers would presumably have been able to affect this trend at the margins, in a similar way the present WAG is attempting to encourage head office and R&D jobs to be located in Wales. But one also assumes that the fundamentals of a Wales becoming essentially more peripheral to the major markets upon which she depends would have remained.
The conclusion: Defended
With a couple of minor modifications, Adam Price’s narrow claim is correct: the Welsh economy has declined compared to the UK since approximately 1924. One of these modifications is important, for the process of decline has not been continuous, and was reversed for a period following the Second World War. That this reversal was achieved or assisted through concerted government action also gives impetus to Price’s wider argument, that a Wales in greater control of her own macroeconomic and other policies would have been better placed to increase her relative wealth (although a counter argument could also be made that central government action is capable of doing the job).
Earlier, I asked whether it mattered that the polices of successive postwar British governments had failed. The fact is that it does, and not necessarily because it shows that central government cannot do the job. It matters because it shows power may be necessary but not sufficient to take on this task. Regardless of her constitutional position, Wales would have struggled against the forces that eroded her economic foundations and made her more peripheral. The question of whether Wales would have done better over the past 80 years had she been independent or devolved is unanswerable. It is difficult to believe that things would have not worked out at least a little better, but naive to assume it would have been the complete or even major solution.
See also
#7: Gordon Brown and Rhodri Morgan’s leadership is “why Wales is the poorest part of the UK”
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1 Crafts, N., “Regional GDP in Britain, 1871-1911: Some Estimates”, Scottish Journal of Political Economy (2005), 52. It is worth noting that the figures used in this analysis are based upon the Geary-Stark proxy measure of calculating GDP, based on census data on employment and wages, income tax assessments, and estimates of UK output for each industrial sector. No official estimates of Welsh GDP exist prior to 1971.
2 See Regional, sub-regional and local gross value added 2008, ONS
3 See “The Welsh economy”, Digest of Welsh Historical Statistics 1974 – 1996, Welsh Office (1998) for the official and slightly different official calculations
4 In 1911, approximately 1 in 3 of the labour force were employed in mining, a higher proportion than in any other part of the UK
5 A government white paper of 1921 estimated the net cost of a ton of coal in south Wales to be 60s, 9d, compared to a UK average of 38s, 11d. See Morgan, K O (1980)
6 ibid.
7 Though rearmament from 1936 onwards produces a mini-revival in the heavy industries, from which south Wales in particular benefited (ibid).
8 Even the nationalisation of the coal industry did nothing to slow the decline in employment, falling by over 75,000 by 1974, including the closure of 150 pits (ibid)
9 See www.Walescan.com. The inclusion of the Netherlands and Belguim are at odds with an earlier classification by Adam Price identifying these countries as, respectively, large and midpoint. (See Price, A, Wales after Objective One, speech to the west Wales branch of the IWA, Oct 2005)
10 Crafts, N., Market potential in British regions, 1871-1931, (2004) LSE