waiting for the train that never comes

devolution and the economy of excuses

(Posting might be skewed this week, I am up an Alp with questionable signal. The fact that I am making excuses for reduced productivity is a harmony of form and content, read on). This is something I think might need to be considered if the UK is really moving in the direction of “Andynomics” – that sometimes what you need to promote regional growth is not investment from the centre at all, but occasionally a bit of tough love.

While I was growing up in North Wales, we all knew that there was one big piece of development policy that was crucial to the economy – the electrification of the coastal railway. This was the big thing that would have revolutionised transport links and allowed our little rural outpost to be dragged into the second half of the twentieth century. It was a shocking betrayal by Westminster that we never got it, almost as bad as (various grievances relating to the Welsh language and the flooding of Capel Celyn).

I ended up thinking, though, that the concentration of Plaid Cymru and the local Labour Party franchises on the Great Big Investment that we needed was a blight in itself.

For one thing, it sucked the oxygen out of local politics. It was always there, tantalisingly close, looking like it might just be one more feasibility study or round of grant applications away. And so everything concentrated on that – effort was diverted from things which might have had a more immediate return at a smaller scale, and which might actually have happened.

But for another, “planning blight” doesn’t just apply to negative externalities of construction. One of the things you learn at business school – but which, like most such things, is really a codification of the sensible instincts of business people – is that in periods of uncertainty, the option to wait and see is valuable. Electrifying the North Wales Coast railway would very much change the relative attractiveness of different investment projects, particularly in tourist infrastructure. So if it was just about to happen (or not happen), you could minimise your regret by keeping your money in your pocket for the meantime.

And that’s what people seemed to do. For years and years.

Later on, I got to thinking that something like this might have been at the root of the extraordinary divergence in outcomes between the two ends of the Holyhead – Dun Laoghire ferry trip. The Celtic Tiger economy began with the generation that David McWilliams calls “the Pope’s Children”, born around the time of the papal visit in 1978. Ireland didn’t have a baby boom, because it wasn’t involved in the second world war in the same way, so this was the generation that just decided that it wasn’t going to settle for rural mediocrity any more. That’s basically the story of Ireland – a huge increase in the labour force with women coming into the workforce, a generation of educated young people that was possibly a little too big to all emigrate, but really, the 1990s were the years when Ireland just basically sat up and decided something like “let’s go for it”.

I think one important factor in that decision was that Ireland understood that nobody else was going to do it for them. Irish governments have always been quite good at extracting money from EU development programmes (holding on to their Objective One status as an underdeveloped region well past the point of ridiculousness), but the thing about EU funding is that it always came on a matched basis; you get supported for things you are willing to do for yourselves. Welsh local government didn’t have the ability to do that because of the centralisation of infrastructure investment in the UK, so they were always diverting their energy into working the Westminster machine.

I’ve said before on this blog that one of the great benefits of devolution and independence is that it gets rid of one of the most insidious obstacles to development – that of “having someone else to blame”. If we’re going to do devolution, and I think we really should, we need to make sure that we’re doing it properly, in a way that facilitates Ireland-like outcomes and doesn’t create situations where local state capacity is purely focused on its relationship with the central funding source. So maybe not “tough love”, but a more sensible parenting strategy, aimed at building autonomy.