The UK is a state of inequality

Rhun ap Iorwerth calls for a fundamental change in UK political and economic models

The UK is a state of inequality. Despite some headline figures on spending per head, disproportionate investment between the ‘haves’ and ‘have nots’ tell the story of an unequal union.

Take research and development (R & D) spending for example.

As Plaid Cymru’s Chief Advisor on the economy, Eurfyl ap Gwilym, points out in his article The UKs broken Economic and Fiscal model the world is changing and the economy is changing with it. The knowledge economy is becoming more and more important, and in that context investing in research and development will be vital. After all, that’s how we generate new ideas and new technologies, and roll out new skills that will be the basis for a new generation of businesses.

There are a number of sources for R&D investment, including business, higher education, government and research councils. Business is by far the biggest source of R&D expenditure. It tends to be concentrated in certain sectors – such as defence and pharmaceuticals, and geographically.

But spending on R&D in Wales is staggeringly disproportionate.

Recent annual figures show UK higher education research and development spend in total of around £6.5 billion. Break that down and we see spend per person in Wales to be £86. In London and the home counties of England, it’s £275 per head. That means that almost 60 per cent of the total R&D spend in higher education happens in the south-east of England.

Institutions in the so-called ‘golden triangle’ between Oxford and Cambridge and the London universities, can highlight their track record in R&D and in doing so they’re able to beat off much of the competition and claim a lion’s share of funding.

But it would be wrong to suggest that Welsh Government couldn’t influence how much more money we could draw into Wales. Perhaps it is time now that Welsh Government really started to make the case for creating a Welsh pool of R&D funding for Wales – a protected fund – into which our universities could apply for funding in order to increase expenditure in this sector in Wales.

But it’s not just education.  Let’s look elsewhere. Let’s look at direct UK Government R&D spend in Wales.

In 2016, of the £2.2 billion spent on research and development by UK Government, £54 per person was spent in London and the Home Counties, just £5 per person was spent in Wales.

Yes, you read that correctly. £5 per person was spent in Wales on research and development by UK Government.

R&D spend as a percentage of GDP was 1.69 % for the UK, 1.04% for Wales and 2.07% for the EU. In other words Wales funds R&D at a level which is half the EU average.

Yes, this shows that successive Labour and Conservative UK Governments have failed to direct investment to Wales. But it tells me also that the Labour Welsh Government is failing to make the case for Wales’s share of R&D funding to the detriment of Wales and Welsh jobs.

This distorted pattern of public expenditure has persisted for many decades. Examples of the much higher spending in London over the past fifty years include: the Victoria and Jubilee underground lines; the M25 orbital motorway; HS1 which is soon to be followed by HS2; the Docklands Light Railway; and Crossrail 1 which is due to open in 2019 and is expected to be followed by Crossrail 2.

London stands out like a sore thumb with much higher GVA per head allied to high public spending.

We need to be aiming for parity with other parts of the UK.

The principal economic levers that affect Wales are, to the extent that any level of government controls them, in the hands of the UK Government. Such levers include: target inflation rates (set by the UK Government and implemented by the Bank of England); the structure and levels of taxation; and public expenditure including capital investment. However, Welsh Government must accept its responsibilities in university funding, skills development, public procurement, and facilitating the provision of funding for Welsh business.

Another role for the Welsh Government is working in close collaboration with the Wales Office to ensure that Wales receives a proportionate share of spending in those areas not devolved to Wales but allocated directly to the nations and regions of the UK by UK Government. Evidence suggests they are both falling short in this vital task.

If those advocating Brexit really believe the UK will be economically better off, their challenge is to formulate and implement an economic strategy that ensures much greater economic equity across the nations and regions of the UK.

However, many of us fear that the consequences of Brexit are likely to push regional policy even further down the priorities of any post-Brexit UK Government.

I and my Plaid Cymru colleague Ben Lake MP recently launched a report on safeguards that should be built into UK Government’s so-called ‘Shared Prosperity Fund’, and I intend shortly to say more on the issue of potential future models.

Without a fundamental change in UK political and economic models we can expect little improvement in the relative performance of national and regional economies outside London and its immediate hinterland. While Brexiteers may proclaim their aim of stopping the UK becoming a ‘vassal state’ of the EU are they content for much of the UK, including Scotland and Wales, to remain in such a position within the union?

All articles published on Click on Wales are subject to IWA’s disclaimer.

Rhun ap Iorwerth is Shadow Economy Minister

6 thoughts on “The UK is a state of inequality

  1. Rhun: you are part of a political class and a damaging divisive wasteful political ideology which keeps shooting the people of Wales in the foot – then you complain when it hurts! We’ve had decades of this kind of low-grade politics of envy which simply does not stand up to scrutiny. Almost all of Wales’ problems are of ‘our’ own making. You wanted it, now you’ve got it, so diddums… Sadly, so have the rest of us. Stop blaming everybody but yourselves because the buck stops with people like you.

    The problem in Wales is not poverty, or lack of funding, it is poverty of ideas and a cross-party consensus which is guaranteed to fail. For the last 20 years the funding which comes to Wales has been top-sliced by a new cabal of political and establishment parasites who have succeeded only in keeping Wales at, or near, the bottom of almost every NUTS1 league table going. You are the problem – not London or the South East which are the only two NUTS1 Regions which actually output more than they consume so the three NUTS1 Regions with an unnecessary extra layer of legislative devolution, and already high to excessive funding per capita relative to similar English Regions which does not include London which is a national hub, can continue to keep their failed political and executive classes in the style to which they have regrettably become accustomed.

    The funding pouring into Wales is not being used primarily for the benefit of the people or in ways which look to have much added value to create a sustainable economy. Rather the opposite since policies in Wales appear to be driving sustainable investment away. Bribing a few firms with a history of loss-making into Wales does not add up to rebuilding the economy. Most of what I see is unnecessary duplication and vanity projects – most of which have failed. I include the promotion and facilitation of the Welsh language in with the vanity projects – based on the Irish estimates it probably accounts for ~£600 million a year of uncosted and unaudited (at cost centre level) public expenditure while you complain about just about everything else. The monetary cost could be much higher though the cost of education decline can never be costed. The link between WM education and decline is now so well documented that it can no longer be ignored. Nations stand or fall on the quality of their basic education and Wales is failing. I derive no satisfaction from continually having to say this but, who would commit large sums to R&D in a Region with basic education which cannot stand up to international comparisons? Investing in, say, Estonia makes sense but not in Wales…

    Would you agree with me, and almost everybody else I know, that it is time an independent public inquiry was launched into the true monetary cost of the Welsh language and into its apparent negative effect on education? You claim to care about how public expenditure is allocated but you appear to be selectively blind when it suits you. I know; that’s politics!

    Investment in infrastructure and R&D in London, the SE, and the Oxbridge belt actually delivers. The already high funding per capita in Wales has delivered little except thousands more unproductive mouths to feed. Wales, under current management, is the economic equivalent of a black hole! Funding is not being well spent!

  2. “Institutions in the so-called ‘golden triangle’ between Oxford and Cambridge and the London universities, can highlight their track record in R&D and in doing so they’re able to beat off much of the competition and claim a lion’s share of funding.”

    Well…yes Rhun; that “golden triangle” can highlight their track record because…they have an exemplary track record. What do you suggest? Do you think that we should market our own golden triangle. That would be Glyndwr University, Bangor, Trinity St David’s? We have one top university in Cardiff and one up other major university in Swansea and I’m not aware that either is a cutting edge research organisation.
    London is a huge driver of the economy; it has a population of just short of £9 million or three times the Welsh population. It is a young, multicultural , highly educated and dynamic population. Perhaps it is a little uncomfortable to admit it but London and the South East actually supports Wales.
    In much the same way Cardiff and the South East of Wales has a younger, more highly educated workforce and draws the lion’s share of infrastructure funding. It’s what cities do.
    Here in Anglesey (yes, I am one of your constituents) We have a brand new, £22 million, science park which has allegedly created 24 new jobs although apparently the bulk of the people working in M-sparc have moved just a few miles from the rapidly emptying, similarly conceived, high-tech centre in Parc Menai Gwynedd which the Local Authority would like to sell perhaps.
    The young talent that we generate in Anglesey and Gwynedd does one of two things; if they are Welsh speaking they can easily gain employment in the public sector locally or in the South east. If they are not fluent Welsh speakers they will leave and most likely they will leave for England where, hopefully, they will be successful and help drive the UK economy.

    Try NOT playing the pathetic, boring, “poor us” victim=hood card.

  3. I agree with Karen that JRW has put on record the views of many people who do not wish for further welsh introspection and this constant ‘rubbish’ about welsh funding by our near neighbours. I do believe that Wales will in near future get more ‘powers’,particularly after Brexit,however the funding from England will reduce as they will seek to invest in their OWN communities rather than the pesky celts who never seen satisfied.We have had devolution for 20 years and who has benefitted in major structural/technical changes carried out by WAG,rather than the increase of funding given by the Blair government which was wasted on pet projects and nation building!!

  4. I was a little premature in including Bangor University in my potential “Welsh Golden triangle”. It seems that they have dropped their Chemistry department entirely as they had previously dropped Physics and Mathematics. Medical Science is also in line to be culled.
    This raises a question about what exactly we (Wales) deserve in terms of R&D funding rather than what Rhun ap Iorwerth and Eurfyl ap Gwilym believe that we are entitled to.
    There are many clues as to the shortcomings in Welsh education in science and technology; take this for instance, from the Analysis of High and low performers in PISA 2015:-
    https://gov.wales/sites/default/files/publications/2018-04/171205-pisa-2015-high-and-low-achievers-en.pdf
    Outcomes in PISA science scores.
    ” Whilst England
    has seen almost no change in its share of low-achievers over time (17 per
    cent in 2006, 15 per cent in 2009, 15 per cent in 2012 and 17 per cent in
    2015) and Northern Ireland has seen a slight decrease (from 20 per cent in
    2006 to 18 per cent in 2015), Wales has seen a steady increase in its share of
    low-performers. This has meant an increase of four percentage points from 18
    to 22 per cent.”
    And, more importantly, whereas in England, the percentage of high achievers in science which was at 14% in 2006 has remained at a steady 12% in the three subsequent PISA studies, here in Wales we have seen the percentage of high achievers in science fall from 11% in 2006 to 8% in 2009 then 6% in 2012 and 5% in 2015.
    If Wales is going to produce the outstanding scientists and engineers who deserve funding then we have to look at our standards of education first rather than just bleat about those rotters to the East.
    There is one other thing that needs some thought:-
    ” results for Wales. Similarly to Northern Ireland,
    59 per cent of high-achievers in Wales are boys. Interestingly, this gender
    disparity is present in Wales and Northern Ireland, but not in England. The
    picture for socio-economic status is similar across all three countries, with
    nearly half of high-achievers in Wales coming from an advantaged
    background (47%) and only 10 per cent of high-achievers being FSM eligible.
    Whilst the proportion of English medium pupils across high-achievers and
    non-high-achievers in Wales is similar, the proportion of Welsh medium pupils
    amongst high-achievers is five percentage points lower than amongst non high-achievers (12% versus 17%).”

    The story is the same when you look at pupils achieving 5 A*-A grades at GCSE in 2018. When similar (SES) Welsh medium schools and English medium schools are compared, 5% fewer Welsh medium pupils achieve 5 A*-A grades and fewer go on to study STEM subjects at A level.
    This is the future for Wales; rapid expansion of Welsh medium schooling for ideological reasons coupled with an equally rapid decline in excellence in science and technology. I assume that the wailing and bleating about the injustice of it all will similarly crescendo alongside our falling level of education.

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