The economy – issues and options

Cornwall’s Gross Domestic Product  [26th March 2012]

Latest figures from Eurostat reveal that Cornwall still lies below the magic 75% threshold below which regions qualify for assistance.

But officials revealed the area’s GDP is still below 75% of the European average, meaning Cornwall and the Isles of Scilly is in line for seven more years of help, worth around £410 million.

Cornwall Council blamed the recession for failing to cross the threshold, and said Brussels aid was helping fuel economic growth only bettered in the UK in central London.    But Lord Robin Teverson, a key player in securing the EU cash, said Cornwall “needed to get off life support” that was administered after the demise of tin mining and fishing.

According to the European Commission, the Gross Domestic Deposit Product (GDP) of Cornwall and the Scillies was 71.9% of the European average in 2009, the latest available figures. The area’s GDP, a measure of overall economic output and wealth, has fallen from a peak of 78% in 2006. But it is above the 66% figure for 1999 when the EU aid tap was turned on.

Across the Tamar, Devon recorded output at 86.5% of the average.   Only West Wales and the Valleys, with GDP at 68.4%, put in a worse performance than Cornwall among regions in the UK. Slovakia and Slovenia are more prosperous than Cornwall according to the figures, as are some regions in Romania, the Czech Republic and Bulgaria.

http://www.thisiscornwall.co.uk/Cornwall-needs-EU-8216-life-support-8217/story-15520451-detail/story.html

 In response business leaders said:

Business  leaders say that Cornwall needs to learn from mistakes made with European funding to ensure that real progress can be made in boosting the county’s economy.

Cornwall Chamber of Commerce said the assessment did not show the true picture of progress being made in the local economy but admitted that it will be a challenge to ensure that Cornwall does rise above the target.

Chamber chief executive, Richard Glover, said: “It is a very great shame that these figures show Cornwall as “underdeveloped”, but our progress is evident. We remain the second-fastest growing area in the UK, behind only central London.    “If there is to be further EU investment we need to learn from the mistakes from the last two programmes. This means being completely honest about our failures as well as talking up our successes.

“Comparing Cornwall’s GDP overall with other regions is irrational, as it presumes that we have the same pattern of businesses as everywhere else. In fact, the EU average GDP is so skewed by the big financial centres that there are no “average” regions – we are all chasing London, Paris, and Rome, etc.

“If we are to really make the best of what Cornwall’s innovative small-to-medium-sized businesses can offer we need to make sure that the targets are sensible and  refer to their motivations. We need to compare Cornwall’s farmers with other farmers, small manufacturers with small manufacturers, designers with designers and so on.”   Mr Glover said he hoped that the newly-formed Local Enterprise Partnership will play a role in any future European funding given to Cornwall to ensure it is used in the right way.

He said: “Part of the reason for relative failure of some Convergence investments is that we are asking the wrong questions and therefore setting up the wrong “help” programmes.   He called for an injection of common sense from a Local Enterprise Partnership.

Mark Stockwood, FSB regional chairman in Cornwall said: “I have always thought that the projects on which European money was spent, while serving a purpose, were not the basic requirement for growth. Long ago I was taught that the basic needs for an all-round successful national economy were the ability to feed itself, the ability to fuel itself and the ability to provide proper communications.

http://www.thisiscornwall.co.uk/Business-chiefs-say-county-learn-mistakes/story-15589305-detail/story.html

Discussion

To what do we attribute the disappointing figures?   Could it be that it will take time for investments to feed through?  Are investments in ‘grand projects’ the way forward?  Would the target be attainable if we did not have high levels of population growth? Is the goal the wrong one?

Further thought is needed on this topic.

Coming soon!

For those interested in economic matters and devolution this is a site to explore!

Jim Cuthbert and Margaret Cuthbert: Website

Papers on the Scottish Economy

 The primary purpose of this website is to bring together, and make easily accessible, most of the articles we have published since 1997. These articles are mainly on the topics of the operation of Scottish devolution, Scotland’s public finances, the Scottish economy, and issues relating to Scottish independence. We are grateful to the editors of the relevant journals for permission to reproduce these articles here.

http://www.cuthbert1.pwp.blueyonder.co.uk/index.html

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s