If an Independent Wales is to succeed, then we have to develop a stronger economy. I believe that employment activities can be broadly classified into three types:
A: Wealth Creators
B: Wealth Distributors
C: Wealth Consumers
The Wealth Creators are those jobs that result in something physical being produced – these include the older traditional industries such as coal and steel, as well as manufacturing, agriculture and construction, etc. These jobs are the engine that drives the economy – for every job created here, one or more are typically created elsewhere in support industries. We should do everything in our power to encourage and develop these ‘Type A’ jobs, but which should generally be provided by the private sector. This should include distribution of grants but I would prefer to give tax-breaks instead – give new enterprises a 5 year holiday against corporation tax. This tax loss would be offset by taxes paid by new jobs created elsewhere in the economy.
The Wealth Distributors are those jobs that do not make anything physical, but support the Wealth Creators – these include transport, financial services, IT, retail, etc. These are real, valuable jobs, but they simply move existing money around – they do not create any new money. These jobs do not directly add anything to the economy, and are dependent on the Wealth Creators for their success – they follow the economy – they do not drive it. The creation of ‘Type B’ jobs should be only passively encouraged and facilitated, for example by the removal of red-tape. However, they should not receive any precious grants, and tax-holidays should be limited to say 2 years.
The biggest legacy of the Thatcherite years was her policy of eradicating the Wealth Creators in favour of the Wealth Distributors. This worked well in the City of London, where the distribution is on a global level – but has resulted in the devastation of many Welsh communities. I am not advocating reopening the mines, as there were underlying reasons for their closure – but we have to replace them with real jobs – that are wealth creating and will encourage the creation of others, for example in manufacturing and construction.
The Wealth Consumers are those jobs that do not directly contribute to the economy, and are generally funded as public services – these include health, education, government etc. Despite their negative name, these jobs are an essential part of our society, without which the economy can not operate. But we can only afford a limited number of these jobs, and must ensure that these deliver value for money. I consider these jobs to be broken down into a further 3 types:
C1: Service Providers
C2: Service Supporters
C3: Service Passengers
The Service Providers are the front line jobs – the teachers, doctors, even our AMs. To provide these services effectively we must establish service levels (eg the right to a doctors appointment within 24 hours) and ensure that we provide the right resources to meet these service levels (eg one dentist per 10,000 population). These service levels should become manifesto commitments for our politicians and they should be judged against them.
The Service Supporters are those essential support staff, without whom the Service Providers can not function, eg school secretaries, hospital cleaners. We must develop ways to ensure that these support services are provided in the most efficient manner, using benchmarking to compare different service providers (eg Hospital A costs £x per patient to clean – Hospital B only costs £y – how can Hospital A match the Hospital B level?). This is not a question of ideology but of efficiency. I do not advocate that all such positions should be in the private or public sector – simply that we must spend our limited money wisely to ensure that our service target levels are met.
The Service Passengers are those staff that exist but which do not directly contribute to meeting any agreed service level, for example management, administration, compliance officers etc. While some of these staff are necessary, others clearly are not, and some hard questions need to be asked - Why does Powys County Council need a Communications Manager? Why does Bridgend Council employ an IT Manager to read staff’s e-mails? Why do some councils want to employ race relations compliance officers? What would happen if these positions simply ceased to exist ?? Some of these positions are a necessary evil, but many are simply jobs for the boys, and usually highly paid ones.
I suggest that we should grade every job in our local councils and public sector bodies as either C1, C2 or C3, and publish annual statistics on the percenteage of such jobs, and their cost.
The harsh reality is that in Wales we have become too dependent on such Wealth Consuming jobs, and that there are too many Service Passengers. Of course, this issue is not related to Welsh Independence, and can be adressed at any time. But this issue will become critical following Independence as we will have limited resources, and we will have to carefully prioritise our spending.