In October’s blog we look at some of the recent economic figures for Wales and the UK and the calls for more unorthodox economic policies than those already attempted.
The latest market services figures for Wales and the UK, make for interesting reading. Specifically, they illustrate the “stop-go” nature of the economy in Wales and the UK, perhaps illustrating why experts such as Lord Turner have begun calling for new policies to deal with the economic situation.
Broadly the figures show output from the market service sector in Wales at its highest level since before the recession. Further, over the last year market services have risen by 4.9% in Wales compared with only 1.9% for the UK as a whole.
Simultaneously, however, compared to the previous quarter, services in Wales have grown more slowly than for the UK as a whole. Moreover, this pattern is repeated across a number of the parts of the service economy deemed of particular importance by the Welsh government.
Indeed only for Financial and Insurance Activities and Information and Communication activities has Wales seen year on year and quarter on quarter growth and a superior performance to the UK as a whole. Overall, these figures therefore both relatively good news for the Welsh economy, but also that any economic recovery is likely to be stop-go in nature in the short term at least.
It is therefore unsurprising that Lord Turner, Head of the Financial Services Authority has called for more unconventional policies to stimulate growth. Specifically this is to counteract the negative effects that current trend in simultaneously reducing private, business and government debt are likely to have on demand in the economy both now and future years.
One policy apparently suggested is that the Treasury does not pay back all of the government debt it has acquired using quantitative easing. Effectively this means printing money.
The government has also suggested policies that can be seen as unorthodox, this time on the supply side. The Chancellor’s proposal for employees to have the ability to exchange their employment rights with respect to unfair dismissal, redundancy, flexible working requests, time for training and notice of maternity leave, in return for capital gains tax free shares in the company.
Most encouraging from the Centre for Enterprise’s point of view at least is the news that nearly 5% of university leavers are now going into self-employment, up from only 3% in the middle of the 1990s. This may be partly due to the lack of traditional alternatives in the public sector.
More positively, however, it may indicate a trend that new and innovative policies should look to further promote. In particular policies that acknowledge the increasingly important role for universities, not only in commercialising their own innovation and IP, but also in developing and promoting the innovation, entrepreneurship and commercialisation activities of their graduates would seem to chime with the current times.