The Crisis in Wales: A Close Examination
The Welsh valleys bear the brunt of economic hardship, showcasing some of the highest rates of incapacity benefits in the UK. In towns such as Abertillery, Maesteg, and Merthyr Tydfil, nearly a quarter of the working-age population is unemployed, largely due to long-term health issues.
If the government genuinely aimed to tackle the escalating welfare bill, addressing these regions—the most affected by deindustrialization—should be paramount. However, rather than investing in regional revitalization, Labour's policy shifts signal a retreat from previously established support mechanisms.
The Gutting of Regional Support
Recently, Labour has clandestinely dismantled job creation funds, an initiative inherited from the Conservatives. The stark truth exposed in the recent report by Steve Fothergill, director of the Industrial Communities Alliance, reveals that for decades, local economies in less prosperous regions have relied on governmental support to bolster growth and reduce unemployment.
“The remarkable thing about the demolition of regional policy is that it has never been a deliberate political decision,” Fothergill observes. “Rather, it has developed incrementally, influenced by both Conservative and Labour governments.”
This incremental erosion of support affects not just Wales, but also areas within Scotland and northern England. After the abolition of the assisted areas—regions qualifying for special economic help—Labour has failed to reinstate this vital status, instead opting to shrink regional economic funding.
Funding Cuts and Their Repercussions
The transition from EU support to a UK shared prosperity fund was expected to provide stability for struggling areas. However, the latest budget cuts have slashed this fund by a staggering 40% for 2025-26, decreasing the annual allocation from £1.5 billion to £900 million.
Moreover, local growth funds introduced have drastically lessened financial impact, leading to a 76% reduction in funding for regions in England and a 50% cut for Wales. Labour's economic strategy must be questioned as rising unemployment accompanies stagnating economic growth.
Comparative Analysis: Growth Strategy vs. Reality
Labour's insistence that the entire economic strategy seeks universal benefit through faster growth does not hold water when we analyze the current state of affairs. Historical evidence shows that previous governments have recognized the necessity of regional assistance, even amidst hopeful narratives of economic uplift.
“A rising tide may lift all boats, but some boats are lifted higher than others,” I argue. The practical outcomes reveal that regional inequalities continue to widen, echoing sentiments that the north-south divide is at its most pronounced since the 1930s.
While local authorities receive a more favorable settlement, they face the brunt of pressing demands that stretch finances thin. In light of these challenges, funds are likely to be diverted towards social services rather than job creation initiatives, further undermining economic recovery in impoverished areas.
Neighborly Initiatives: A Palliative but Insufficient Approach
Labour's new neighbourhood programs, like Pride in Place, cannot substitute broader regional policies. They may beautify beleaguered high streets but fail to address the fundamental issues sustaining economic dilapidation.
The Future of Regional Policy: A Call to Action
Is there still room for an effective regional policy? The answer must be yes. History teaches us that when the government discriminates in favor of struggling regions, it mitigates the degradation faced by communities.
Post-Brexit, we have an opportunity to shape a more robust regional policy—one capable of reinstating assisted areas throughout the UK. The economic disparity between regions underscores the urgency of this review, reminding us that the status quo is unacceptable.
- A way forward hinges on Labour acknowledging the necessity of these investments and recommitting to restoring the balance in regional support mechanisms.
Conclusion: Reclaiming Our Future
The growing unrest in Britain's old industrial heartlands is a rallying cry for a return to active regional policy. A resurgent Labour government must seize this opportunity to craft a fairer economic landscape, redefining what support means in today's context.
It's time for us all to demand accountability, to question the decisions that buried vital support under layers of bureaucratic indifference.
The Big Pit National Coal Museum in Blaenavon, Wales. Photograph: Sam Jones/Alamy
Source reference: https://www.theguardian.com/commentisfree/2025/dec/11/labour-economic-policy-struggling-regions-wales
