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Gross Value Added

Volume 768: debated on Wednesday 13 January 2016


Asked by

To ask Her Majesty’s Government what are the latest figures for the gross value added per head in England, Wales, Scotland and Northern Ireland respectively.

My Lords, the latest figures published by the Office for National Statistics show that in 2014 gross value added per head was £25,367 in England, £17,573 in Wales, £23,102 in Scotland and £18,682 in Northern Ireland.

My Lords, last week the Chancellor of the Exchequer boasted in Cardiff about the UK Government’s role in securing a small improvement in the Welsh economy. That being so, do they also take their share of the responsibility, at least, for the fact that the average Welsh income per head is still more than 25% below the average for England? That has stubbornly been the fact for the past three decades. Are the Government totally complacent about that?

My Lords, as the House knows, my right honourable friend the Chancellor is a modest man and will take credit only where it is due. The fact is that since he became Chancellor, some 70,000 jobs have been created in Wales, unemployment has fallen by 30% and we have invested £69 million in rolling out superfast broadband to 500,000 homes and businesses. But as the noble Lord has said, it is also true that since GVA statistics started in their current form in 1997, under all Governments GVA in Wales has been around 70% of that in England every year. Certainly, the Chancellor is not going to take responsibility for all those years, but the good news is that since 2010, Wales’s GVA has grown at a faster rate than England’s.

My Lords, can my noble friend confirm that the figures for Scotland would be disastrously lower had Scotland voted for independence in the referendum, given that the oil price has fallen from what the SNP said it would be, which was $110 a barrel, to $31 today?

Obviously, the premise of the independence party was based to a large extent on the oil price, but as my noble friend has said, it has fallen, from $120 per barrel in 2012, and is predicted to fall as low as perhaps $25. That is a very important factor to take into account.

Does the Minister agree that a similar picture of comparative poverty emerges from tax receipts in Wales? The last figures I saw suggested that only 4,000 Welsh taxpayers are in the top tax band. The question is surely this: what are we going to do about it? Does that not have implications for the Barnett formula, and will the Minister confirm that the comparative position in Wales is deteriorating?

The trouble with comparing England and Wales is that England has a population of about 53 million, while the population of Wales is some 3 million, so it is a difficult comparison to make. A better comparator would be the regional differences in England. But obviously, what we want is for more people to go into higher tax bands in Wales because the economy is booming and we are doing our bit to help that through investment. We hope that, when the devolution settlement is reached under the new Wales Bill, the Welsh Assembly will be able to play their part in growing the Welsh economy.

My Lords, in 1999 the GVA index for Wales was 79.2 as against a UK average of 100. The Labour Government of the day promised to increase it to 90 by 2010, but in fact it has dropped to 71. Perhaps I may employ my family motto, ar bwy mae’r bai—who can we blame?

My Lords, I think we should take a more positive view and work out what we are going to do about it. Certainly in Wales, there is plenty that the Government are doing. For example, capital spend is increasing by £900 million over this Parliament. Infrastructure investment through the block grant in this Parliament will rise by just under 17%, and among other things we would like Cardiff to agree to a city deal which will help its economic growth.

Does my noble friend agree that the economy of Wales would be greatly improved if the Severn barrage project went ahead? What progress has been made on that?

I believe that my noble friend has raised this point before. I am not sure that I can make much more progress, except to say that the Government have started a due diligence process on this project. But it is very important to work out the cost-benefit analysis of tidal lagoon energy. This is an ongoing process. It is important that we understand the costs of this project and the technology in detail, particularly in the broader context of energy needs and prices, and availability.

My Lords, the Minister said that the Chancellor was a modest man. Well, he certainly used to boast about the fact that he was going to achieve a balanced economy in terms of manufacture and finance, as well as regional balance. Since 2009, London’s economy has grown by 20.9% but in one region—Yorkshire and Humberside—the figure is 12.8%. What on earth have the Government got to boast about in achievements in that area, particularly when, for the first time in a decade, wealth inequality in this country has increased? Is it not clear, in this the seventh year of the long-term economic plan, that this Government are utterly incapable of creating fairer growth across the economy and ensuring that all citizens participate to some extent in improving conditions?

The noble Lord should not decry the fact that gross value added wealth creation takes place in the south-east and London: that is obviously a good thing for the country. However, we do want to make sure that that same growth applies to the regions. He is right that it is less in the regions of England and the devolved Administrations than in London, which is bigger by far than the rest of the regions. Of course, we do have a comprehensive plan to rebalance the economy and strengthen every part of the UK. It involves major investment in transport infrastructure, science and skills, and support for local businesses. We have set up the National Infrastructure Commission, for example, which will spend £100 million in this Parliament, of which £61 million will be on transport.