More evidence of the scale of Welsh public sector spending and the need for a bigger private sector

Yesterday the Centre for Economic and Business Research published its ‘State of the Nation’ report looking at how public money is spent is the nations and regions of the UK.

From a Welsh perspective three things stand out

Firstly the report says ‘The analysis shows that public expenditure as a share of GDP in two parts of the country (Northern Ireland and Wales) is about 70% of GDP.’ – hardly a favourable comparison as Northern Ireland has been through four decades of sectarian violence so there are at least reasons for their figures.

Secondly that ‘Public spending as a share of GDP has risen very sharply in 2009/10 as a result of the recession and the rise in public spending. In 2008/09 spending was 43.9% of GDP for the UK; in 2009/10 it has jumped to 48.1% on this definition and is likely to rise slightly more in 2010/11 to 48.4%.’

This jump has been exaggerated in the high spending regions of the UK. In Wales public spending rose last year from 62.8% to 68.8%; in Northern Ireland from 64.8% to 71.3%.’

And thirdly that ‘Table 2 shows a huge gap in the movements in public spending as a share of GDP between regions. In Wales the rise since 1998/99 is more than 18 per cent; in the South West the share has actually fallen, while in the South East the rise has been only just over 5%’.

No doubt WAG will have a pre-pared answer to this report that will say that Wales’s public sector is not too big and doesn’t hamper private sector growth, followed by something like the public sector needs protecting at all costs because of the scale of cuts that are coming Wales way after the General Election and to a point its true, but it misses the bigger point, a bigger private sector could take some of the strain of the massive job losses we in Wales will see over the next few years.

The sad thing is that WAG could do things to stop the dole cues getting longer in the coming months and inflicting the same misery on individuals, families and communities that many in Wales haven’t fully recovered from after the last recession because they refuse to accept what umpteen reports have said over the years, that more home grown private sector businesses would increase wealth and create jobs and be more of a protection in an economic downturn – How long before they get the message?Any source