Julian Ruck: “No one would argue against the fact that the Welsh economy is in a pretty parlous state, would they?”

Will Hutton: “Yes, yes. That’s true.

“Basically, the Welsh economy is not in wonderful shape but there are pockets that are doing rather well. The University of Warwick has produced an innovation map, it’s very interesting. Starting at Cambridge arching through Oxford and finishing in Gloucester, this arc of innovation goes right down to Bristol but stops at the Welsh border. The thing is, South West Wales has almost no innovative firms.

“It has all the problems of the English rural economy, but this is multiplied because much of the land area, Mid Wales and North Wales, is not great agricultural land. You also have the hangover of industrialisation and the collapse of the old coal and iron industries. I actually think that whether its business starts ups or hotspots of inward investment, there are some good things going on in Wales, particularly with Cardiff University eg the Cardiff Bay development and so on, although I don’t know whether they’ve done it completely right.”

JR: “Do you think that the post-devolution ‘Welshification’ process and promotion of the Welsh language is having a negative impact on the Welsh economy, particularly where the recruitment of outside talent is concerned?”

WH: “My great concern, as an outsider looking in, is that the Welsh government is continuing to try and hold on to what you’ve got. This is not unreasonable, focusing on equality, social justice etc but it seems to me that you are really missing out here, because unless you have some dynamism in the private sector what sort of renewal are you going to have in say, the next twenty years?

“I’m not a nationalist or even an English nationalist for that matter, but if you want to play the nationalist card then I think it’s really important to have imaginative ideas but I’m not sure I see that coming out from Wales.

“The Welsh Labour Party are not recruiting people whose first thought is: How do you create a dynamic private sector? Again, I’m sympathetic to social justice, inequality and so on but you’ve got to think about the economic architecture and framework; you don’t have to be a Thatcherite Tory to recognise that, at best Wales has an economy based on small and medium sized businesses.

“Wales needs excellence in innovation, just as you see in Cardiff. Actually, one does really worry about the future of Wales.”

JR: “Wales is a grant junky Will, no-one farts in Wales unless there is a grant behind it (this got a laugh or two, if you ask LFW, economists are not as dour as one is led to believe!). Just take Cardiff Airport, or Pinewood studios, not to mention all the small business hairdressers and false nail emporiums. It’s in our blood, our business culture.”

WH: “I’m not against trying to trigger activity through grants, it’s whether they trigger any activity and this is the question that must be asked. Then one has to ask, are they well designed and will they create a culture in which the first thought is: Not how do I create a viable business model to start with, but how do I impress the grant giver with my case for getting a grant?”

JR: “The trouble here, is that once the company has had the grant, tax breaks and all the rest, when these run out its bye bye. At least this seems to be the situation in Wales, there are countless examples.”

WH: “Wales has got to think through what its offering. Like I say, this arc of innovation going on in England; the area is going to be extremely prosperous, it’s unbelievable what is going on there. It’s absolutely essential for Wales that it goes along the M4 corridor to Cardiff.

“It’s fundamental and anything that obstructs this has just got to be scrapped, otherwise Cardiff will lose out.

“Where Wales is concerned generally, the first thing you have to do is recognise the problem. You must have a national conversation about it, you have to do something. There will be arguments on the left and arguments on the right about it, but it must be argued about and I don’t think this happening in Wales.”

JR: “Now you mention it, you are right. One rarely hears these matters being properly explored let alone debated in Wales, certainly where the Welsh media and political oversight are concerned, but frankly that’s nothing new.”

WH: “ I’m not saying that good things are not talked about, for example skills, improving the health service, education and all that but the economy doesn’t appear to be located in any bigger narrative, it seems that if you can get health and education right then the rest will follow, well it won’t.”

JR: “Do you think that Welsh nationalism is damaging Wales?”

WH: “Yes. It may also be damaging Scotland too. Investors will be thinking: “Why get stuck into peripheral economies, why bother when you have all this stuff going on in England?

“I’ve lots of Scottish and Welsh friends but because they were born in Aberystwyth or Edinburgh, they think they have something special or distinctive that I haven’t got.”

JR: And hear hear to that! That’s nationalism for you. Are you a left winger Will, truth now?”

WH: “Look, the whole conversation in the UK has become so right wing that actually someone like me seems a man of the left. I’m a child of the European enlightenment and when I see things in capitalism that are not just not working then I will say so. I believe in liberty and equity and looking after other people.”

And on that note, the interview with LFW came to an end. Left or right, Mr Hutton raised some interesting and important points where the economy of Wales is concerned. He also raised them with sincerity and frankness.

For want of writing that most awful of political clichés:

Wake up Wales! ‘Lessons need to be learnt’!

Will Hutton is a political economist, writer, weekly newspaper columnist and former editor-in-chief for The Observer.

Julian Ruck – Editor