Welsh fiscal balance

"Estimates consistently find that Wales has a large and persistent fiscal deficit, funded by transfers from rUK." Wales, as well as England, has a fiscal deficit since the public expenditure in both countries exceeds the tax revenue collected. The Welsh government has limited powers over taxation and does not set its own budget. Wales' net fiscal deficit increased from £14.4 billion in 2020 to £25.9 billion in 2021. All countries and regions in the UK had a fiscal deficit in 2021, which included the North West of England at £49.9 billion; Scotland at £36 billion; Northern Ireland at £18 billion; London at £7.2 billion.At £4,300, Wales' fiscal deficit per capita is the second highest of the economic regions, after the Northern Ireland fiscal deficit, which is nearly £5,000 per capita. The total UK public debt exceeds £2 trillion (which is equivalent to 85% of GDP). In 2016, Wales spent £14.7 billion more than it was allowed to gather in local revenue, which decreased to £13.7 billion for the 2018–19 fiscal year, due to a reduction in public spending. Public spending peaked in 2011–12. For the 2018–19 fiscal year, the fiscal deficit is about 19.4 percent of Wales's estimated GDP, compared to 2 percent for the United Kingdom as a whole. Implications Wales spends 11 percent more per person than England. Welsh economist Ed Gareth Poole notes that fiscal transfers between wealthier and poorer parts of a sovereign state are not unusual. == Figure in an independent Wales ==

A 2023 study by three researchers at the Wales Governance Centre at Cardiff University found that the deficit means a "difficult economic outlook for an independent Wales", and recommended that constitutional debate should take into account fiscal realities. Ball also suggests that Wales' £3bn defence cost is excessive and that at 3% of GDP is more than any other country. He also notes that incoming pensioners from England cost £2bn and a further “accounting adjustment” of another £3bn. According to political scientist John Doyle of Dublin City University, the fiscal deficit in the "early days" of an independent Wales would be approximately £2.6bn. This equates to under 3.4% of GDP, which compares to an average of 3.2% for countries in the OECD in 2019. Think tank Melin Drafod suggests that an independent Wales could have a fiscal balance in surplus of £3 billion a year which could be used to fund public services. The think tank says that this revenue could be raise via different taxation and other policy changes. ==See also==