UK Politics

Reality Check: Is Wales worse off after devolution?

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Claim: "A more responsive body will be better placed to promote economic prosperity and quality of life across Wales," stated the White Paper before the devolution vote.

Reality Check verdict: In the twenty years since the vote for devolution Wales has fallen behind in terms of productivity, wages and household income when compared with the UK has a whole. Of course, no one knows if Wales would have fared even worse without devolution.

One way of measuring economic success is to look at how productive a nation is.

In the UK, the productivity of devolved nations and the regions of England can be compared by looking at what's called Gross Value Added (GVA). Like Gross Domestic Product (GDP) it measures the value of goods and services produced, but GVA is calculated before tax is applied.

Between 2014 and 2015 (the latest figures available), only the north west of England experienced stronger productivity growth than Wales. But this has bucked the longer-term trend.

In 1997, Wales was the least productive region of the UK, and since then it has has fallen from 86.8% to 80.6%.

So is devolution a factor? Well, in Scotland which also had powers devolved, productivity has risen from 94.8% to 98.3%.


The good news for Wales is that there's a higher proportion of people working than 20 years ago.

And the unemployment rate - which was was nearly twice the UK rate - is now equal at 4.3%. Scotland's unemployment rate is slightly lower, at 3.8%.

With more people in Wales working than in 1997, you might wonder why productivity levels haven't reflected that.

It's because the value of what's produced in Wales has fallen relative to the UK, suggesting that a larger proportion of Welsh jobs are lower skilled.

And that is reflected in wages. Welsh earnings have fallen relatively since devolution.

Whereas average wages were equal in Scotland and Wales in 1997, earnings in Scotland are now £42 a week higher than in Wales.

Only in the east Midlands do middle earners now have lower wages than in Wales.

But wages don't tell the whole story. Whether people feel more prosperous is better calculated by looking at household income (Gross Disposable Household Income).

This also includes income which doesn't come from working - like pensions, investments and benefits.

In 1997 household income in Wales was 87% of the UK average. It has now fallen to 85.5%.

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Image caption The Gwent Valleys is still the area with the lowest disposable income

The area of Wales where households are living on the smallest incomes has not changed in twenty years, and remains the Gwent Valleys. There, heavy industry declined in the 1980s and early 1990s and has not been replaced .

In 1997 the highest average household incomes were found along the North Wales coast in Conwy and Denbighshire, where many people had chosen to retire.

In contrast the latest figures show that the area with the highest average household income is in and around Newport in south east Wales.

This area has seen strong economic growth but is also attractive to people who work across the border in Bristol, but can't afford the higher house prices there.

UK comparison

So, several indicators suggest that Wales has fallen further behind the UK average in the last twenty years.

It is often argued that London and the south east of England push up the UK averages.

So perhaps it's fairer to compare Wales with Scotland, which voted for devolution at the same time, albeit for a different model. But on these key economic factors at least, Scotland has fared better.