Examination of Witnesses (Questions 240
- 258)
WEDNESDAY 11 FEBRUARY 2004
PROFESSOR GRIPAIOS
Q240 Albert Owen: You said it is
too early to evaluate it and you have seen the interim paper looking
at it. Do you agree with me that a full 12 months were wasted
squabbling over matched funding rather than getting projects up
and running?
Professor Gripaios: There did
seem to be a lot of argument about trying to get the matched funding
to do that. My own view is that in all these things it is easy
to cave in to the pressure, particularly from newspapers which
say you are not spending the money and you have all this money
from Brussels. Sometimes there is a tendency to rush projects
through at the beginning and then, when you get really good ones
at the end, you have no money left, so there are difficulties.
Q241 Mrs Williams: Complaints that
we have had from some people in Wales are that they have been
too cautious and it has taken too long to process.
Professor Gripaios: I think there
are two sides to that question. The important thing is to look
at the quality of the projects which are being given the money.
I think you would be more encouraged if, after all that squabbling,
the right decisions were made. The issue then is whether the right
decisions have been made. That mid-term evaluation did not seem
entirely complimentary in that regard.
Q242 Hywel Williams: May I say that
your memorandum was interesting, clear and quite startling, particularly
in respect of the non-identifiable government spending? I saw
the point you made that there is eight times the level of expenditure
on defence and regional preferential assistance in the South West
as compared with Wales and we are not doing very well in that
respect. We have heard quite a lot about defence spending this
afternoon. My question is: what difference would an equitable
spend of defence expenditure make to regional prospects, in terms
of GVA and knock-on effects on R&D and all of that which seems
to go down to the South West and does not seem to come up to Wales?
Professor Gripaios: That is coming
back to the question of Bristol. That is definitely part of the
equation. The move of MOD procurement was a massive boost to the
Bristol economy, massive boost to the traffic there as well. Bristol
has really moved away from Cardiff and other areas in the last
10 years. That is an important part of it and because procurement
is there and you get lobbyists from Lockheed who also set up offices
in the locality, there is no doubt that the South West and Bristol
in particular have been very, very major beneficiaries of defence
spending. Wales does far less well in that regard. I might draw
your attention to the fact—no-one seems to have realised
this—that the government actually put out what they called
experimental accounts about a year ago. These do allow for all
aspects of spending, whereas the ones the Treasury put out are
about identifiable spending that is for the benefit of Welsh people,
as opposed to all spending which may be for the benefit of all
people of the UK, it does not make much difference. Defence spending
is not in the identifiable spending but it actually creates jobs
and so on. If you look at those figures then Wales only gets about
4% more than the UK average spending, whereas if you look at identifiable
spending it is 13% more. It is already considered by most people
who have looked at it, that in terms of the degree of need in
Wales, it is not an outlier; it justifies the 13% more. It is
Scotland, Northern Ireland and London who get far more than their
fair share. Certainly if you look at that second lot of statistics,
it looks as though Wales does not do very well. It does in terms
of the headline stuff: it gets Objective 1, its gets regional
preferential assistance, but in terms of the real meat, it does
not do too well.
Q243 Mr Evans: It is all a bit depressing,
is it not?
Professor Gripaios: You could
say that not just for Wales, but for the North East, which is
another very disadvantaged area. You could say the same thing
for Camborne and Redruth. It is not unique.
Q244 Mr Evans: Somebody who is trying
to make the comparison between other regions—because we
know the South East particularly well—between Wales and
the North East or the North West—the North East I suspect
more than the North West—is that the best comparison?
Professor Gripaios: I guess it
is a more tightly drawn area. Yes, the North East does particularly
badly as well out of government spending.
Q245 Mr Evans: As far as the non-apportioned
spending is concerned, things like research monies being channelled
through universities, is Wales getting its fair share of that?
Professor Gripaios: Definitely
not, but hardly anywhere is. Nearly all of it is going to a handful
of institutions all of which are in the South East.
Q246 Mr Evans: What can we do then
to harness our universities better?
Professor Gripaios: There is an
argument—and it is not up to me to go into that—that
it is absolutely crucial that there probably is a scale economy.
It is important that Cardiff does end up as one of the Russell
group, because I do think there is going to be disproportionate
spending. That may not go down too well in constituencies in North
Wales, but Cardiff is in the Russell group at the present time
and you really have to make sure that it stays there.
Q247 Mrs Williams: If I may go off
topic slightly for a moment, I wonder whether you could tell us
a little about your unit's involvement in the Regional Observatory
in the South West, how it all fits together, what your objectives
are, funding and that sort of thing. Is it working effectively
would you say?
Professor Gripaios: I have to
be very careful here. We actually run the business and economy
module for the Regional Observatory, so we do modelling work for
them and we have done a lot of reports for that observatory. I
am not closely involved with it; I do not go to the meetings.
It would seem to me that the problem is that it is rather disparate.
There is a lot of very different things: planning; environment;
the NHS; the economy. The danger with all that, if you cast the
research so wide, is to find the focus. It certainly would seem
to me that the focus for RDAs and the Welsh Development Agency
is on the economic aspects. The other thing I would say about
the observatory is that it does not actually do any research,
it just commissions it. I always feel a bit uncomfortable. I think
it would benefit from some core expertise and research facilities
of its own.
Q248 Albert Owen: How has the devolution
settlement for Wales affected the UK Government's attitude towards
economic development for Wales? What is your impression of the
DTI's relationship with the economy in Wales?
Professor Gripaios: I could not
answer that. I honestly do not know. I have not looked at that.
It is the sorts of things which are partly anecdotal and I am
sure the Committee know much more about this than I.
Q249 Albert Owen: Do you think the
DTI should be more hands-off now that we have the Assembly and
the Assembly is responsible for economic developments?
Professor Gripaios: I have given
talks at the Welsh Assembly and various places. The worry I have
with that when I go back is that I am struck by the extent to
which a Fortress Wales policy seems to be developing from within.
What is the Welsh economy? North Wales fits in with the North
West and South Wales has to fit in with the South West. It does
not pay to look in isolation at this thing called the Welsh economy.
That is my concern.
Q250 Albert Owen: On the day we are
discussing regional assemblies in the House, how do you feel about
RDAs and how do you think that would affect Wales if the RDAs
were to be answerable to regional assemblies?
Professor Gripaios: Inasmuch as
it has benefit—and we have said already today that it does
in terms of certain funding—it has definitely benefited
from the fact that it is a separate entity and has a voice in
Cabinet and there is a lot of ill-feeling about that among the
English regions and there has certainly be a lot of ill feeling
about it in Bristol when LG was going to go to Newport. The reality
was of course that a lot of the work would have been straight
back over the bridge to Bristol, but there was a lot of ill-feeling
about that. It may well be that Wales will lose its special status
and will have to struggle far more for resources than it has in
the past.
Q251 Albert Owen: Do you support
a regional assembly for the South West?
Professor Gripaios: The jury is
still out on that one. I would be more supportive if I thought
a tier of local government were going.
Q252 Mr Evans: Do you think there
is resentment against having a separate and distinct voice for
Wales?
Professor Gripaios: We have gone
on the record, we have tried to put the record straight in the
South West and been very unpopular for saying the sort of thing
I said to you about defence, that Wales does not do that well
and the South West does pretty well indeed, if you take it in
the round. It does not matter. People do not look at the statistics.
We are back to hearts and minds.
Q253 Mr Evans: Do you think it will
have mellowed now or is there indeed resentment? You said that
Wales had its own distinct voice around the CARAD table and now
it is merged in with the Leader of the House of Commons and Wales
has its own Assembly. Is there no resentment about all of that,
that Wales is doing rather well, thank you?
Professor Gripaios: I think there
is resentment, but I can only talk in the way you can talk about
people you meet in rugby clubs and so on. There is definitely
a feeling and people say "Let them get on with it".
Q254 Dr Francis: You talk in paragraph
12 about the intriguing possibility that Wales may be too distinctive.
That follows up on your point about Fortress Wales in a sense.
It reminds me of back in the 1920s when there was a writer who
said that there was no such thing as one Wales. There are three
Wales: there is British Wales, which is the north coast and greater
Cardiff; there is Welsh Wales which he defined as the Valleys;
Cymric Wales which is the Welsh-speaking Wales. Those divisions
exist today in a sense.
Professor Gripaios: Yes, they
do.
Q255 Dr Francis: Can you elaborate
a little on this notion that we are now selling a different notion
of Wales which is so distinctive that it actually puts people
off in terms of investment?
Professor Gripaios: It may. Culturally
there are three different Wales and there may be more than that.
There may be a difference between mid Wales and north Wales. Some
of you round the table can advise me on this rather than me advise
you. In terms of the economic powerhouse of Wales, it is definitely
the South East, whatever way you look at it. To me that is part
of the continuum which goes along the M4 corridor. That would
seem to be an image which Wales could perhaps sell far more than
it has. Instead of distinctiveness, perhaps they should be saying
they are part of the M4 corridor. In a way, coming back to Objective
1, you could argue that it would have been better if the funds
could have been spread outside Wales sometimes than all inside
Wales. It is very important to the Welsh economy that there are
fast rail links to Heathrow, into London and so on and possibly
a straight link from Reading to Heathrow and some of these things
are arguably more important than improving roads in West Wales.
They ought at least to have been considered.
Q256 Dr Francis: Are you suggesting
a wrong sort of mindset? Historically we have always valued that
relationship with London and somehow or other it is not perceived
as a problem rather as a challenge and an advantage.
Professor Gripaios: That is a
possibility.
Q257 Mr Caton: You described this
as an intriguing possibility. Is there any evidence that you are
aware of that what you call the emphasis on distinctiveness is
sending out this wrong image and therefore deterring people from
England from investing in Wales?
Professor Gripaios: I have not
looked at that. I would be an interesting piece of research which
perhaps could be done.
Q258 Dr Francis: Looking at Wales
now, and you described yourself as an expatriate Welshman, how
would you characterise that distinctiveness? How do you perceive
it? How is Wales being sold?
Professor Gripaios: I could not
answer that in terms of the publicity of the Welsh Development
Agency because what gets directed at me, clearly gets directed
at people outside. I am not sure there is a Welsh distinctiveness
which can be sold in the way perhaps there is an Irish distinctiveness
which can be sold in America. As far as I am ware, there was no
big wave of Welsh migration to America in the way that there was
an Irish one and a Scottish one. If we are looking at FDI coming
in from outside this country, I am not sure it would mean that
much to people to focus on "We're Wales. We're special".
I do not think that would be terribly convincing. I come back
to the same point and I would make the same point with regard
to encouraging FDI from England.
Chairman: No further questions. Thank
you very much Professor Gripaios for giving your time this afternoon.
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