Wales ‘a begging bowl’ with an economy surviving due to ‘English subsidies’ says London economist
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“The government should announce that subsidies will be withdrawn over a period of, say, three years so that by then the public sector deficit in Wales is the same as in the UK as a whole.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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