‘The British state is failing Wales’ says Plaid Cymru, as new figures show £13.7 billion fiscal gap

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Plaid Cymru has said that the ‘British state is failing Wales’, following the publication of new figures from the Wales Fiscal Analysis research team at the Wales Governance Centre today (Tues 2 July).

The figures, which will be discussed at a conference at Cardiff Bay’s Pierhead Building, show that Wales’ net fiscal balance – the difference between total public spending for Wales and estimated public revenue – amounted to a £13.7 billion deficit.

The deficit, known as the fiscal gap, amounts to 19.4% of estimated GDP. The comparable figure for the UK as a whole is just 2%.

The research also found that overall spending per head in Wales is significantly lower than in England, with spending on UK Government programmes in Wales other than social security significantly lower than comparable spending in England.

Startlingly, the report found that capital spending – such as on new public infrastructure – is lower in Wales, particularly in transport and science and technology (76% and 75% of the UK average respectively).

Plaid Cymru’s Shadow Economy and Finance Minister Rhun ap Iorwerth AM has said that ‘Wales is behind held back from reaching its potential’ under the current set-up of the UK, and has accused the UK Government of either forgetting about Wales or ‘wilfully under-investing’ in Wales as a ‘way of keeping us in our place’.

Mr ap Iorwerth warned that the situation would only get worse under either of the two candidates to be the next Tory prime minister, and would be particularly bad in the event that Wales leaves the European Union.

The findings released today come in advance of the publication of Government Expenditure and Revenue Wales 2019 later this month, and a further report in the autumn on how Wales’ fiscal gap may be narrowed.

Plaid Cymru’s Shadow Economy and Finance Minister Rhun ap Iorwerth AM said:

“These figures paint a dim picture of Wales’ place in the United Kingdom. What the figures show is that the current set-up of the British state is failing Wales, and our nation is being held back from reaching its potential.

“As if we needed any further proof of how low down the Westminster pecking order Wales really is, this report shows that we receive just 76% of the UK Government’s average spending on transport.

“The report’s authors say that the main driver of Wales’ £13.7 gap between the amount of public spending in Wales and the amount of money that’s brought in is not higher spending, but lower revenues, such as from taxation.

“It is common sense that capital investment in public infrastructure creates jobs and prosperity – and thereby increases revenue. And yet the UK Government’s infrastructure spending in Wales is drastically lower than in England.

“At best, the British state, via the UK Government, has simply forgotten about Wales. At worst, it is wilfully under-investing in our nation as a way to keep us in our place. This will only get worse under either of the two candidates to be the next prime minister, and certainly if Wales is taken out of the European Union.

“As an independent nation at the heart of Europe, we would have a full complement of tools at our disposal to invest in infrastructure and grow our economy. We would also have full control over our own natural resources, such as electricity and water.”

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