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Low pay, high dependency

In these posts here and here we discussed the wealth disparity between Wales and the rest of the UK, most notably London.

We looked at wealth creation and disposable income.

But what about the actual amount of money our workers take home each week?

Luckily this week the Office of National Statistics released their ‘Annual Survey of Hours and Earnings: 2016 provisional results’.

The headline figure is stark. If you work full-time in Wales you will be earning nearly £3,000 a year less than the UK average, or over £9,000 less than the London average.

As one twitter user put it,

Now this isn’t a case of lies, damned lies, and statistics. It’s not an average figure based on everybody of a working age in Wales. These are figures that the ONS have drawn together from the number of actual full time workers.

71.3% of all of those working in Wales work full-time, compared to the UK average of 72%, and 72.3% in England.

That one percent difference might seem trivial. But that one percent represents 8,200 workers in Wales (Wales has 1,150,000 people in work, 820,000 of them in full-time employment).

The average full-time gross pay in Wales, based on £492.40 a week is £25,604.80 – well below the Higher Rate of Taxation, let alone the Additional Rate. With tax free allowance currently at £11,000, that would mean the individual’s tax pay (income and NI contribution) would be in the region of £5,000 and the employer’s contribution around £2,400 – a total of £7,400 (averages).

That one per cent difference in full-time employment between Wales and England therefore represents £60,000,000 lost in taxation from Wales.

Again, this £60m might seem trivial considering the £15bn budget at the Welsh Government’s disposal, and the circa £10bn deficit, based on current UK Fiscal policy.

But add to this the fact that just under a third of the working age population in Wales do not work – with 25% considered economically inactive, the highest in the UK except for the north East of England and northern Ireland – and 5.9% unemployed (ONS) and you’ll realise that our outgoings per head of the population is far more than the UK average, and our income per head is far less.

Also, in Wales 28.7% of the working people work part-time earning an average of £179.80 a week. That’s an annual income of £9,349.60, well below the tax free allowance, and so low in fact that many require in work benefits to top-up their income in order to make ends meet.

Truth be told, Wales is sadly not alone in the part-time low paid work UK league table. Part-time workers (at least those who are forced into part-time work) are being screwed right across the UK, with the highest paid part-time work unsurprisingly to be found in London, at £191.60 a week (median average), or £9,963.20 a year.

Wealth InequalityFinally it’s worth noting that the area recognised as West Wales and the Valleys – one of the most deprived regions in the whole of the European Union – continues to suffer amongst the lowest wages anywhere in the UK.

Of the 430 Local Authorities listed, these are all in the bottom 100:

Blaenau Gwent, £433.90 p/w

Gwynedd, £439.70 p/w

Merthyr Tydfil, £447.80 p/w

Pembrokeshire, £459 p/w

Ceredigion, £462.20 p/w

Denbighshire, £468.90 p/w

Anglesey, £469 p/w

Newport, £470.30 p/w

Swansea, £470.80 p/w

Neath Port Talbot, £480.80 p/w

Caerphilly, £483.90 p/w

Conwy, £485.50 p/w

 

Contrast these to the top 100.

at 100, East Northamptonshire, £585.80 p/w

at 50 Epping Forest, £636.30 p/w

and the top 15,

  Uttlesford 704.8
  Kingston upon Thames 705.5
  Islington 710.5
  Bromley 715.6
  Elmbridge 715.7
  Kensington and Chelsea 733.9
Wokingham UA 741.0
  Camden 751.3
  Brentwood 756.6
  Wandsworth 758.9
  Waverley 775.6
  Westminster 784.7
  St Albans 785.0
  Richmond upon Thames 785.1
  City of London 1,034.4

In addition to this our rural regions are far more dependent on part-time work (Pembrokeshire – 37.5% part-time, Powys – 37.5% part-time, Ceredigion – 33% part-time, Denbighshire 31.4% part-time, Gwynedd – 30.7% part-time).

This isn’t the politics of envy.

Wales doesn’t need to be another London or a Monaco.

But the low-pay compared to the cost of living, coupled with the high number of people who are economically inactive means that we are consequently dependent on grants from Westminster. We don’t want it to be like this.

Both the economic and fiscal policies of Westminster are not designed to match the strengths and needs of Wales.

Westminster policies work exceedingly well for London and the south east of England. These figures show that clearly. But they are working against Wales and our interests.

There’s nothing innate in Wales to say that we should suffer economically.

If Wales were given the powers to develop her own fiscal and economic policies, then taxes, spending, investment, could be set according to the needs of our communities.

Is it right that 15,000 people in Pembrokeshire are earning only £177 per week? Pembrokeshire has so much going for it with it’s mixture of industry, agriculture and tourism. Yet the wealth that flows into Pembrokeshire flows straight back out.

Is it right that those working full-time in Blaenau Gwent are today earning only £433 per week, when previously it had such a wealth of natural resources which could have been invested in developing industry for the future, but which instead made a very few families extraordinarily wealthy?

Where are the policies to suit our economic needs in Wales?

Are we envious of London’s wealth? Speaking personally no, not particularly. But we are envious of the fact that they have a Government willing to develop policies to suit them, and focused on ensuring their economic success.

Wales’ needs are different to the needs of London and the south east of England.

An independent Wales would not threaten London’s financial hegemony (Brexit is already threatening that, in any case). But given the correct powers we could develop an economy here which could complement that of the rest of the UK.

With Wales being an exporting nation, a strong Welsh economy would also benefit the regions of England, improving their wealth and status. It would mean that instead of concentrating on the strengths of one small region of what is currently the United Kingdom (London and the SE) other parts would also strengthen, benefitting the whole.

Welsh independence would be good not just for Wales, but also for our brothers and sisters in England.

 

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