Swansea railway station. Image: TfW

Mike Hedges – MS for Swansea East

There is a very strong economic case for the United Kingdom, with not only Wales being a net beneficiary of redistribution, but also larger countries can more easily withstand economic storms and support the less affluent parts.

Wales is a net economic beneficiary of the Union. It has substantially more expenditure, including expenditure on people in Wales by Westminster and funding to the Senedd and the Welsh Government than is raised in Wales.

The most recent estimates from the ONS suggest that public expenditure in Wales is about 10 per cent higher than it is across the UK as whole when you include a population share of some of those UK-wide expenses like debt interest, defence and foreign affairs.

10% higher, which is one of the reasons I support the devolution of policing. If it were devolved then the current home office proportion of police spending would increase by at least 10%

Unfortunately, Wales does have lower levels of productivity and lower levels of employment, the tax revenues per person, particularly from income tax and the direct tax are lower and, overall, are estimated to be about 75 per cent of the UK average.

So, if you were to say that Wales keeps its revenues, funds its own public spending and then makes a population-based contribution to the UK-wide situation, at least as it stands, that would lead to quite a large fiscal deficit for Wales.

I think that when we estimated the net fiscal transfer, the difference between Wales’s relative revenues and relative spending, as it stands under current constitutional arrangements and current economic performance, it’s about £12 billion to £15 billion a year.

That estimate is on the low side because it assumes Wales has its population share of corporation tax, dividend income and capital gains tax. Estimates of up to £20 billion have been produced but sticking with £12.5 to £15 billion, put into context  that is the health budget.

There is a debate around fiscal autonomy in Scotland and Wales. In order for that to be a net budget benefit to Wales, you’d need to see a substantial change in terms of economic performance within Wales.

Plaid Cymru have asked for rail to be fully devolved to Wales. This comes a no surprise. Is there an area of Government currently the responsibility of Westminster that they do not want devolved?

How is a commitment to modernise Welsh rail and to support 12,000 jobs across Wales not good news? Of course, an independent Wales could not afford this project.

The Welsh and UK Government’s plan sets out a long-term commitment that will put an end to the previous government’s policy changing and underinvestment that held the country back for too long.

Important for Swansea is electrifying the railway from Cardiff to Swansea which will enable the use of more reliable electric trains that are better for the environment and a smoother ride for passengers. Better performance will also pave the way for reduced journey times on this line.

The Swansea Bay and West Wales Metro will transform the transport network in the region. The  projects will join up the region’s transport options including rail, bus, cycling and walking. It will create a transport network that links together to support those who live and work in the region as well as for visitors.

These plans will boost the local economy by providing better access to work, business and leisure opportunities. The Metro involves the construction of up to seven new train stations to serve the Swansea Bay area including Cockett and Landore along with two new frequent local Metro rail services, initially running two trains per hour but with the potential to increase to four trains per hour.

Investment in electrification would boost the environmental benefits of these routes and would link to the future electrification of the Cardiff to Swansea main line.

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