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South East England subsidises Wales

A report released today by Oxford Economics shows that the wider South East (Greater London, the South East and the Eastern Region) made a positive net contribution, of £37.7 billion to the UK public finances in 2006-07.

For Wales it shows that whilst the Government spends £28.4 billion, tax revenues of only £19.3 billion were raised in 2006-07 - a net drain of minus £9.1 billion.

Of course, these are the headline figures and I am waiting for a full copy of the report before examining this in further detail but it does show that fiscal autonomy for Wales may not be feasible unless real structural changes are made in the UK economy, and certainly not in the foreseeable future.

Comments

Anonymous said…
Wales being a drain on the UK and our economy being so tied into the England's that substantial economic progress would be almost impossible to make is hardly breaking news.

While i agree that structural changes are needed, its far more about the cultural changes that are needed in Wales for the economy to flourish as we all know. We have a Political class and Civil Service in Cardiff whose focus and purpose runs counter to the pressing needs of Wales and any serious economic progress, so the arguments about fiscal autonomy to them are irrelevant and will be for the foreseeable future, and for this reason those politicians who believe in fiscal autonomy need to start listening to those who have the experience and could offer the most helpful advice.
Anonymous said…
The English have paid for Dafydd El's Chapagne for years. Why break a habit of a lifetime !
Anonymous said…
I think Frustrated Economist means when we get the chance we're going tax you till you bleed.
Anonymous said…
I think frustrated economist is asking for reality and expertise in dealing with our economy.
Just look at all the red tape and micro management of those trying to create wealth and jobs - that will tell a truer tale
Anonymous said…
Of course, we wouldn't have to worry too much if Adam Price and his mates got into power as they made it absolutely clear, in their manifesto of 2005, that they wanted to see a "50% rate of tax on incomes above £50,000 a year".

If that ever happens, would the last entrepreneur to leave the country switch off the lights.
Anonymous said…
Fair enough, Valley's Mam.
I take back what I said, Frustrated Economist, if thats what you mean.
But I agree also with Anonymous. For many people, like me, not bound apart from by tradition and heritage to Wales would be forced out.
But we need a wake up call here. Wales is a small country with world class health, education and adminstrative systems. But, that its economy is lagging behind the sout east should be no surprise. Why should we think of ourselves as any different that north east or the de-industrialised areas of say France.
I don't believe I'm defeatist but just recognising the starting point for the future. We've got be careful that misguided politicians don't use the situation to whip up support for personal gain and idealogical goals.
Anonymous said…
my comments were in relation to Dylan's post about structural changes which i agree with him are part of a solution to the bad performance of the Welsh Economy but the cultural change or maybe i should have said mind set change which is far more important that i was talking about was the need for recognition among our Politicians and Civil Servants which has been missing for 20 odd years that the economy is as vitally important as health and education and businesses of all sizes need the right environment to grow and to be supported and not hampered as Valleys Mam said, nothing to do with plaid cymru or nationalism as some people seem to think i'm saying.
Unknown said…
Dylan, can you link to my blog? www.welshramblings.blogspot.com
Lenin Cymru. Happy to do so - it's given me the opportunity to clean up those blogs that have no reference to this one.

By the way, you have an interesting entry on the Welsh Conservatives view on devolution. As someone who made a contribution to the review, I believe your perception is off the mark. Certainly, I am giving a speech at the Eisteddfod next week which will give my own personal opinion on further powers and which is quite different to your impression of Conservative ideals on deveolution.
Anonymous said…
Ok, frustrated economist, I've got the picture now. Sorry for misinterpreting what you said first post. I agree completely with what you say now.
Whilst we have to strike the right balance between helping those that need it (believe me I speak from experience, more details if anyone wants them) and not creating a dependancy culture. A succesful economy is a pre-requisite to a progressive social policy.
I stick to my guns about politicians. It's our job (the electorate and interested observers like us) to keep their wilder ambitions in check, inevitably leading to confontation on occasions; but I do respect them and for putting themselves forward. Sounds ambiguous? Well that's life.
Anonymous said…
It won't be a surprise to anyone that Wales doesn't presently turn over a profit to the UK economy. But is there not a deliberate policy in centralised states to draw wealth away from the peripheries towards the centre?

Without oil, wouldn't Scotland's profile be similar (we already see this in NW and NE England)?

And finally, is there even an agreement that Wales needs to become a net contributor? It would certainly seem that over our history of industrialisation we have given more to the UK economy than we have taken.

What seems clear to me is that Wales doesn't at all have the ability to decide its own economic policy in the way that other countries do.

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