Journal Column – 23rd February

Last week the Welsh Affairs Select Committee travelled to Germany as a part of our Investigation into trade and investment in Wales. The Germans are a world leader in developing their own base of companies who export goods, and in attracting inward investors from across the world. By having a far more geographically and sectorally balanced economy than the UKs, Germany was able to ride the stormy seas of the recent global economic downturn better than us, and have been able to make the most of the subsequent recovery in the world economy, growing at a far faster rate than the UK.

Readers of this column will be aware of my constant criticism of the successive failures of Tory and Labour UK Administrations in relying solely on the financial sector and an unsustainable boom in consumer spending and house prices. The visit confirmed these views. Despite the legacy of reunification following the cold war, wealth polarisation at an individual and regional level is far higher in the UK than in Germany.

Germany Trade and Investment, the body responsible for promoting German industry abroad and in attracting inward investment are specifically charged with promoting the poor parts of the country. Contrast this with UK Trade and Investment which doesn’t even have a presence in Wales at all. The Federal Government also offers a range of financial incentives via tax cuts or grant aid to help attract companies to the poorer parts of the country – much like the countervailing measures I want to see implemented in Wales to help us survive the oncoming onslaught to the public sector – and address decades of over concentration in London and the South East.

The work of German Trade and Investment was supported by a well resourced and comprehensive network of Chambers of Commerce which were located globally as well as the individual networks of individual Landers (Germany is a Federal State made up of 16 States with comprehensive economic powers). North Rhein Westphalia, the Lander for the Rhein area has a budget of 12 Million Euros per annum to promote their indigenous companies and attract foreign companies to locate in that area. Their international offices were primarily located in the so called emerging economies of China, India and Korea to make sure that the region benefits from economic growth in those parts of the world. The Rhein is an area very similar to South Wales. Heavily industrialised – they have phased out the coal and steel industry over a long term period to enable the region to develop other economic sectors. Today no other part of Europe has a higher concentration of European HQs of foreign companies. The contrast with the slash and burn policies our communities are continuously subjected to by the UK Government cannot be any clearer.

Wales has a proud industrial heritage which we need to build on urgently. The UK Government has to be less focussed on the narrow interests of London – however decades of ignorance doesn’t fill me with much hope. We have to create our own future as a people, and that means making sure that our Government in Wales has as much power as possible. A yes vote in the referendum next week will be small step in moving our communities and country forward.

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