Monday, April 18, 2011


Last year, the First Minister, in an interview with Andrew Marr, made the statement that "our problem is...that our private sector is too small. We have to do more to unleash the entrepreneurial spirit that does exist in Wales".

As the previous blogpost argues, there seems to be little within the Labour manifesto to "unleash the entrepreneurial spirit" as Carwyn Jones suggests, especially given their new policy focus on large companies in Wales.

Indeed, in previous interviews, he has emphasised the point that, stating that  “It’s sometimes said that the public sector in Wales is too large. I disagree; the public sector appears large because the private sector is too small.”

But what has happened to the private and public sectors during the last Assembly Government?

Examining data for public and private employment in wales shows that during the first three years of the Labour-Plaid administration:
  •  private sector employment in Wales had reduced by 34,000 in June 2010, a fall of 4 per cent as compared to June 2007. The biggest falls were to be found in Blaenau Gwent (-19%), Torfaen (-14 per cent) and Conwy (-11 per cent), all local authorities within the European Union Convergence areas of Wales. 
  • 69.2 per cent of all employees in Wales are to be found in the private sector. The highest proportion of private sector employment by county is to be found in Flintshire, Pembrokeshire, Caerphilly, Newport and Monmouthshire.
  • public sector employment increased during the same period by 11,000 (or 3 per cent). Interestingly, the biggest beneficiaries during this period were not only Ceredigion (21% increase) and Isle of Anglesey (16% increase) but two counties which had seen a fall in private sector employment - Conwy (15% increase) and Blaenau Gwent (15% increase). 
  • Overall, 30.8 per cent of all those employed in Wales are to be found in the public sector in June 2010. The counties with the highest proportion of public sector workers are Ceredigion (35.6%), Isle of Anglesey (35.6%) and Cardiff (35.4%)

So what we find is that the Welsh public sector has continued to grow under the last Assembly Government whilst the Welsh private sector has declined.

If we look at the statistics available for Wales for the period 2001-2010, we see that the private sector in Wales has been declining in relative importance, at least in terms of employment, since the First Assembly Government.

In fact, during the period 2011-2010, the actual number of those employed in the public sector in Wales has increased by 67,000. In contrast, the number employed in the private sector has declined by 12,400.

The First Minister may be correct in saying that the private sector in Wales is too small but, as the statistics above show, there has been little success by successive Labour-led governments in Wales in addressing this issue during the last decade.

Indeed, assuming the premise, from the statements made during the last few weeks- that Labour politicians do not want to cut any public sector jobs in Wales - then to achieve the balance of private:public sector employment last seen in 2001 i.e. ensuring that our private sector is not "too small", the Labour Party would need to create an additional 170,000 private sector jobs over the term of the next Assembly to achieve this.

Unfortunately, there seems to be little evidence within their manifesto that they have any plan to go any way towards making this a reality.