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Wales ‘a begging bowl’ with an economy surviving due to ‘English subsidies’ says London economist

03 Mar 2022 3 minute read
The Senedd and John Ormerod (inset). The Senedd. Picture by Senedd Cymru.

An economist and columnist for one of the City of London’s business papers has claimed that Wales has become a “begging bowl” with an economy surviving due to “English subsidies”.

Paul Ormerod, an economist at Volterra Partners LLP and columnist for City AM, pointed to the decision of Gwynedd Council to allow some of their staff an extra bank holiday on St. David’s Day as an example of this dependence on English money.

“Gwynedd council proudly declared in January that it would ‘grant’ this extra holiday,” he said. “All very well and good, except that the taxpayers of London and the South East footed much of the bill.

“This is true for whole swathes of the Welsh economy, surviving thanks to English subsidies.”

Despite “tidal waves of money” flowing across the border “courtesy of the taxpayers of London and the East,” Wales “remains poor” and the money has been used to “prop up the economy rather than transform it,” Paul Ormerod added.

Pointing to a “staggering” fiscal deficit of 19.4 per cent of GDP, he said that the answer was to gradually reduce the amount of money Wales received.

“The dependence of the Welsh public sector on English money makes a mockery of the current arrangement on devolution,” he said.

“The government should announce that subsidies will be withdrawn over a period of, say, three years so that by then the public sector deficit in Wales is the same as in the UK as a whole.

“Genuine devolution requires both give and take. Currently, Wales just takes. They should have powers to raise more taxes to sustain their expenditure, while subsidies are cut to make them a fruitful part of the union.

“Cutting subsidies is desirable. It gives the Welsh an incentive to be more productive so they can afford public services. It would also help restore pride that they are paying themselves rather than holding out the begging bowl in perpetuity.”

Current spending per head in the UK per person is highest in London, according to House of Commons research, at £13,448 per head. Wales has the second-lowest spending of the UK nations at £12,889.

London also has the highest capital spend per head at £2,042 per head compared with £1,333 for Wales.

However, the tax take is higher in England, mainly because of London’s dominant economic position. In April 2021 the Institute for Government estimated that on average each person in England on average benefitted from public spending worth £91 more than the taxes they paid: in Scotland, Wales and Northern Ireland the figures were £2,543, £4,412 and £5,118, respectively.


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Gareth
Gareth
7 months ago

Keep up the good work. The more we hear this type of clap trap, the more English people will be calling for a separate England, and the faster the break up of the UK. It is stuff like this that the right wing Britnat supporter was fed in the run up to the Brexit vote. The Superiority complex of the little Englander will shine through, allowing us to go our own way. Diolch.

Lolly Mountjoy
Lolly Mountjoy
7 months ago

One side of the story yet agai

Dave
Dave
7 months ago

I’ve read his Article and I do not understand how he got to a 20% -ish GDP fiscal deficit, ny comment is that Scotland have the begging bowl out as well using his figures and yet the English Parliament is reluctant to allow #IndyRef2 so I suggest the figures are not as clear as is being claimed #IndyWales is needed to protect the poor of London and the East of England bless them

Gareth Cemlyn
Gareth Cemlyn
7 months ago

Best get rid of these pesky colonies! Usual pro English colonialist propaganda.

Leigh Richardss
Leigh Richardss
7 months ago

Yawn…another graduate from the infamous AA Gill school of Wales haters. Is strange that in a era when denigrating the people of an entire nation is rightly no longer considered acceptable discourse it’s apparently still ok to publicly denigrate and insult the Welsh. No protection for us under hate speech laws it seems…

Mark
Mark
7 months ago

I bet he didn’t mention how much money the crown estate steal from the Welsh economy or how much Wales contributes to HS2 or London’s crossrail project, how about the Welsh government not having its own tax raising powers or Welsh businesses having to register and pay tax into the inglish coffers, How much money do the high street banks remove from the Welsh economy and did he talk about the billions of gallons of water that is taken from Wales for a pittance or the amount of energy that Wales produce for the benefit of ingland, Articles like this… Read more »

Gareth W
Gareth W
7 months ago

Why not? We should then charge for the 2/3rd of electricity we generate and give to England for free, the huge amounts of water we give to England for free, take back the crown lands, stop subsidising HS2, charge for the gas that lands at Milford Haven and ships across Wales for free, keep our corporation taxes, the list goes on. Please let’s do it

Gareth Cemlyn Jones
Gareth Cemlyn Jones
7 months ago
Reply to  Gareth W

The reality is that it serves England well to retain a Welsh subserviance to the UK exchequer. It’s been a classic strategy to keep the ‘colony’ in check and maintain the culture of dependance that prevails in many Welsh communities. People are waking to this and hopefully the next generation will be more forthright in calling for independance and shedding the Saxon yoke.

Gareth David Edwards
Gareth David Edwards
7 months ago

100% agree.

They need us more than we need them. England is totally over-populated and over-developed.

The next 20 years will see drastic changes to The Nation of Wales if we are weak and incompetent.

That is not to say we would have an easy ride upon independence, esp. with the neighbours wanting to put the shoe in during any setback periods/ low points.

True confidence and calm application are the medicines to deal with that.

Cymru am byth

Yma O Hyd

Last edited 7 months ago by Gareth David Edwards
Mab Meirion
Mab Meirion
7 months ago

Norman

R W
R W
7 months ago
Reply to  Gareth W

And don’t forget all those nuclear weapons that we are contributing towards.

jack
jack
7 months ago
Reply to  Gareth W

The infrastructure creating and distributing that electric was paid for by the UK coffers but the jobs are in Wales..The whole of the Elan valley and pipelines was paid for by Birmingham (until it was stolen into government ownership and sold).
Any idea how much money comes into Wales in the form of pensions.?

In 2008 Oxford Economics showed Wales was a net £9bn drain of UK funds, and I very much doubt that has improved since with the constantly falling GDP and WG jobs nearly all created in the public sector,

TWO SIDES TO EVERY COIN!!

R W
R W
7 months ago
Reply to  jack

And how much of those pensions are paid to English people who’ve moved here to enjoy their retirement?

Richard 1
Richard 1
7 months ago

and Land Value Taxation is the tool independent Cymru will use to recoup the outward flow of cash from foreign-owned assets. Well-analysed fiscal instrument, feasible, fair, constructive.

Arwyn
7 months ago

Total, utter, hopeless ignorance. Shambolic. If that exemplifies the thinking within the UK establishment, Wales doesn’t stand a chance. My goodness, independence can’t come soon enough. As Adam Price said, I can’t wait until we’re independent so we don’t have to put up with this cr*p anymore.

We will never thrive economically until we are a sovereign nation electing our own government and free of the abysmal governance of the Tory UK State. I’m a Welshman, get me out of here!

Arwyn
7 months ago
Reply to  Arwyn

Full blog entry here: https://paulormerod.com/its-time-to-give-scotland-and-wales-a-dose-of-financial-reality-and-rethink-the-barnett-formula/ Just drips with bias and chauvinism … as these people ever do. The thing that gets me is the presumption that this “contribution” is in any way helpful. No mention of de-industrialisation. No mention of neo-liberalism. No mention of centralisation vs peripheralisation. Does he not realise that the same UK Govt policies have driven the north of England into the ground too? Does he not recognise the culpability of UK governance or the scale of inequality in the UK? Does he not realise that other European countries do not have the same scale of inequality?… Read more »

Last edited 7 months ago by Arwyn
GW Atkinson
GW Atkinson
7 months ago

We must be the only country in the world that can’t survive without being occupied and stolen from.

Gareth David Edwards
Gareth David Edwards
7 months ago

Paul Ormerod… go f*!k yourself

R W
R W
7 months ago

A familiar story where we are accused of being a nation of leeches living off the English. If they really believe that, then why aren’t they encouraging us to leave the UK and stand on our own two feet? I’d be more than happy to take up the challenge!! 👍👍

Doctor Trousers
7 months ago

If Wales and Scotland are such drains on England’s economy, surely the Westminster establishment should be happy for us to leave?

I.Humphrys
I.Humphrys
7 months ago

One reason, perhaps The reason, is they go from being Gt Britain to England?

Y Cymro
Y Cymro
7 months ago

What this simpleton street corner economist Paul Ormerod from his ivory tower omits in his slight against the Welsh people & nation is that Wales pipes trillions of gallons of our water into English homes, for nothing I might add, as if it were not for our natural resource the English Midlands would be the equivalent of a 3rd world country when it comes to their ability to function.

E J
E J
7 months ago

Should we start making them beg for their water.

Nia James
Nia James
7 months ago
Reply to  E J

Agree. Long thought that we should administer forms of economic insurgency. They only really want to know about the pound in their pockets, so let’s devalue those pounds.

Mab Meirion
Mab Meirion
7 months ago

2030…Wales under Martial Law, fighting intensifies around the main reservoirs and hydro-power stations. Ukraine sends emergency aid…

Brian Clement
Brian Clement
7 months ago
Reply to  Mab Meirion

That is not too far fetched.

Mab Meirion
Mab Meirion
7 months ago
Reply to  Brian Clement

I have a crystal ball…and have been told to avoid contact sports…

Dean Thomas
Dean Thomas
7 months ago

London is the most subsidised part of the UK.

Paul
Paul
7 months ago

Not this again, everyone knows people in Wales, Scotland, and Ni pay no tax of any sort, they have been living free for many years. For God’s sake give it a rest you jumped up English t**t. The peoples of the Celtic nations are sick to death with this rubbish being spewed out over and over, how they all can’t manage on their own what a clown this guy is, for God’s sake wake up and smell the coffee it’s England that is subsided with the resources of the three Celtic nations, shut off the supply and England would be… Read more »

Fiynunig
Fiynunig
7 months ago

The article states ‘tidal waves of money’ flowing across the border and Wales ‘remains poor’ so there is at least one element of truth in here with just one omission. The tidal waves of money flowing across the border are heading EAST!

Argol Fawr!
Argol Fawr!
7 months ago

Regrettably there are many truths in what he says. Our public sector spending is grossly out of kilter to our GDP with efficiencies well below the rest of the UK. (Which is p**s poor to start with). And that’s before self gifted council staff holidays, and possibly now a reduced working weeks. If we seriously want to consider independence, we better start growing up and understand how economies operate in the real world.

Paul
Paul
7 months ago
Reply to  Argol Fawr!

We have a higher GDP per capita than Spain. We are well aware how the ‘grown up world’ operates.

Argol Fawr!
Argol Fawr!
7 months ago
Reply to  Paul

Spain’s economy is a basket case in itself. But anyhow, please point to some figures to support your view.

Leigh Richardss
Leigh Richardss
7 months ago
Reply to  Argol Fawr!
Eifion
Eifion
7 months ago
Reply to  Argol Fawr!

Let’s accept everything you say and also the report above. Then why on earth do the Brits fight to keep their Union in place? It makes no sense!
Surely it would therefore be far more logical for the Brits to try to form an independent England for themselves.

Wrexhamian
Wrexhamian
7 months ago

His turn on the daily anti-devolution rota.

Paul
Paul
7 months ago

Sea level change projections indicate that by around 2150, two thirds of England will underwater. The dump will be in the top three most densely populated places on the planet. Welsh people at that time will take direct ferries from Wrecsam to Oslo…

Mab Meirion
Mab Meirion
7 months ago
Reply to  Paul

And Harlech Castle will once again receive its supplies by sea …

Eifion
Eifion
7 months ago

So, yet another anti Welsh report, what I still can’t fathom is if they do strongly believe in what they say, then why on earth would they want us to stay in their so called union? There’s clearly an underlying hatred of Wales so it’s obviously nothing to do with any fondness of us as a nation. Or do they realise that a number of their major cities are completely reliant on the free water they get from Wales, the balancing of their electricity grid is reliant on our pumped hydro, we provide more renewable power to the grid than… Read more »

Pob lwc
Pob lwc
7 months ago

This Ormerod guy sure knows how to make Welsh Nats throw a tantrum!!

Dave
Dave
7 months ago
Reply to  Pob lwc

No, we always like to know what Brit Nats like you and Ormerod think because it strengthens our resolve!! 💪💪

Last edited 7 months ago by Dave

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