Monday, May 10, 2010

Why does Wales have the lowest Gross Value Added of any region in the UK

The short answer is I don't know beyond "some region has to be the lowest", but it is an interesting question and may issues such as Welsh Independence follow from an understanding of
  • Why it is what it is
  • What is being done now to improve
  • What should Wales stop doing
  • What else needs to be done
I am no economist, so obviously I consulted Wikipedia for a definition
Gross Value Added (GVA) is a measure in economics of the value of goods and services produced in an area, industry or sector of an economy. In national accounts GVA is output minus intermediate consumption; it is a balancing item of the national accounts' production account.
A more interesting link is to the National Statistics Office which states that
The gross value added (GVA) per head of population for the UK as a whole was £20,520 in 2008. London had the highest regional GVA per head of population at £34,786, followed by the South East at £21,688. Wales had the lowest GVA per head of population at £15,237.
I would argue that many parts of Wales have higher social capital than London for example, but you don't pay for schools, hospitals and widening at A487 near Dyfi Junction with feeling part of a community, however much you value it and it adds to quality of life.

Statistics are not everything. Out of context they can be dangerous and misleading and I would like to hear the argument that GVA does not matter or a suggestion that XYZ is a better metric.

The GVA measure taken at face value shows that in Wales is a economic drag on the rest of the UK, whatever the root cause and which door blame should lie are not that interesting a set of discussions. What is more critical is asking are we undertaking the right set of activities to get to average and if not what do we need to stop doing and start doing to make progress.

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