Wales' Deputy Economy Minister Lee Waters has made an astonishingly candid admission – that the Welsh Government has pretended for 20 years that it knows what it is doing on the economy, when the truth is that it doesn’t.

Speaking to leaders of the co-operative sector at a lunch in The Clink restaurant at Cardiff Prison, Mr Waters said: “There’s a degree of disappointment among some people ... who feel that devolution hasn’t achieved its potential.

"For 20 years we’ve pretended we know what we’re doing on the economy – and the truth is we don’t really know what we’re doing on the economy. Nobody knows what they’re doing on the economy.

“Everybody is making it up as we go along – and let’s just be honest about that. We’ve thrown all the orthodox tools we can think of at growing the economy in the conventional way, and we’ve achieved static GDP over 20 years.

“The levels of GVA per head now are the same they were in 1999. And that’s not from a lack of trying. There’s no failure on the part of ministers and civil servants. Boy, have they tried!

“But it’s an approach that has its limits for Wales – and we need to try a different approach.”

GVA – Gross Value Added – is a variation on GDP (Gross Domestic Product), and is used to measure the average contribution per head of individuals to a regional economy. Wales, like Scotland and Northern Ireland, is seen in this context as a region of the UK.

Over the last 21 years, Wales has fallen back slightly meaning economic productivity is now even further behind the UK average than it was in 1998.

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Mr Waters said as part of an alternative approach, Wales needed to experiment, and needed to fail, and say ‘that’s OK’: “We learn from that failure, and iterate and move on,” he said.

He said the Welsh Government has set up a £3m “experimental fund”, while the Cardiff Capital Region (a consortium of 10 local authorities in south east Wales) was looking to have its own £3m fund operating in a different way, which would enable comparisons to be made.

The Welsh Government would be “pump priming” through the experimental fund, which would be open to bids over the summer from the cooperative sector in areas like social care and food procurement for local schools.

Mr Waters added: “What we don’t want is more bloody pilot projects. Devolution has been littered by tool-kits and pilot projects, which then don’t get mainstreamed.

“They’re perfectly worthwhile and successful in their own right, but they have their limits.

“How can we hard-wire? How can we spread and scale success?

“We’re looking at the public service boards set up under the Future Generations Act, which at the moment haven’t scratched the surface of their potential in my view. How can we link them to this agenda and say: ‘Right, run the risk. This is the Future Generations principles in action. Make this happen.’?

“And how can we make sure that the experimental results which are throwing up success stories can be immediately mainstreamed through the delivery of public services? That’s the challenge to them.”

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He said that Preston in Lancashire had made a success of local public procurement, where local businesses were successfully bidding for contracts in areas like school food provision.

“If they can do it in Preston Borough Council – the size of Swansea – we can do it here”, said Mr Waters.

He said there was a danger in focusing too much on inward investment and so-called “anchor companies”, when such firms could “up-anchor” and go elsewhere.

More attention should be given to local firms that were grounded, and provided a foundation for the local economy, he argued.

Mr Waters also joked about his precarious hold on the Llanelli constituency, saying: “As many of you will know, I’ve got the smallest majority in Wales, and no AM for Llanelli has ever been re-elected. So that focuses your mind about what it is you’re here for, and what you can do in the timeframe you have to work within. I’ve got 18 months to make this worthwhile, before I scuttle off and try something else to do, probably.”

In response to this article Mr Waters wrote on Twitter: "My point is that in a rapidly changing environment, with automation and Brexit, no government in the world can claim to be in control of the economy. That's why we need to experiment, learn and scale."

He later added:





A Plaid Cymru spokesperson said: “It is quite remarkable that the Welsh Government’s own deputy economy minister has admitted that Labour hasn’t known what it’s doing on the economy for the past 20 years.

“More remarkable still is the startling acknowledgement that throwing ‘all the orthodox tools [they] can think of’ at growing the economy has achieved static GDP over the last two decades.

"While Lee Waters may find it amusing, we certainly don’t. Stalling growth, increasing child poverty, and life expectancy in decline are no laughing matter.

“In his speech to cooperative sector leaders, Mr Waters said there was ‘a degree of disappointment among some people ... who feel that devolution hasn’t achieved its potential.’

" The truth is that it is his Labour party that has failed. They have run out of ideas, and as Mr Waters himself said, the Labour party is ‘making it up as [they] go along’."

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Tory shadow business minister Russell George AM said: "It’s deeply concerning to hear the team behind Wales’ economy being so blasé about the sorry state of our nation’s economy. Wales has been led by Welsh Labour for over twenty years and in that time we’ve seen failure after failure, and now Labour Ministers are confirming that they knew this all along."