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.
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
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.
Just look at all the red tape and micro management of those trying to create wealth and jobs - that will tell a truer tale
If that ever happens, would the last entrepreneur to leave the country switch off the lights.
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.
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.
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.
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.