World Data Lab

“Regions Caesar never knewThy posterity shall sway.”

(William Cowper 1782, on the statue “Boadicae and her daughters” by Thomas Thornycroft, opposite the British Houses of Parliament)

In the Brexit referendum of June 23, 2016, Scotland mostly voted to remain in the European Union (a majority of +60%), whereas Wales voted to leave (a majority of 50-55%). As these two regions of the United Kingdom are two of the four main Celtic regions in Western Europe (the others being Ireland and Northern Ireland, and Brittany in France), World Data Lab is taking the opportunity to analyze the consumption spending power of these two regions and compare them both to Brittany (Bretagne) in France and to Ireland and Northern Ireland.

The Celtic Nations are territories in western Europe where Celtic languages or cultural traits have survived. The six territories which are widely considered Celtic nations are Scotland (Alba), Brittany (Breizh), Wales (Cymru), Ireland (Éire), Cornwall (Kernow), and the Isle of Man (Mannin or Ellan Vannin).

Among the Celtic Nations, Wales is doing best in terms of per capita annual spending power. This year, a Welsh person, on average, will be able to spend almost $23,500 (in 2011 PPP) per year while a Scot will be able to spend on average $21,100. While Scotland is currently second based on this measure, they will lose their position in 2024 to Brittany and will be overtaken the following year by Ireland. Nevertheless, by 2031, Scots will still have a higher average spending power than their Northern Irish counterparts, but with prevailing framework conditions, the Scottish economy (which our calculations on spending power development are based on) will have the lowest growth rates in terms of a 15 years average from 2016 to 2031. Scotland will grow by an annual average of 0.92% whereas the UK in total will average annual growth rates of 0.97% from 2016 to 2031. Excluding the region of Greater London from our estimates, this rate will average 0.93%.

Considering that Scottish growth rates will be lower than the UK average – even without London – the vision of Scotland becoming a Celtic Lion seems to be farfetched. Ireland, on the other hand, will witness an annual average growth of its per capita spending power of 1.92%. Wales will grow by an annual average of 1.11%, Northern Ireland, by 1.12%, and Brittany by 1.40%.

Hence, by 2031, an average Welsh person will have $27,115 per year to spend, and a Scot, $23,796. In Brittany, this will be $24,575 and the UK average with London will be $27,655 and without, $26,840. Wales is comparable to the UK average (especially when excluding the British capital region) and will by 2025 have more to spend than UK average. The Welsh region’s average growth rates are 0.4 to 0.8 percentage points higher than the UK’s in general. Also, Northern Ireland is expected to increase its average annual spending power at a higher pace than the UK, but is starting from a lower level.

Celtic Regions

On a regional level, Brittany has the highest total spending power with $68 million in 2019, followed by Eastern Scotland (with Edinburgh) with almost $43 million. On the lower end are the Scottish Highlands and Islands with $8.4 million and Cornwall and the Isles of Scilly with $9 million in 2019. In per capita terms, the regions’ annual spending power per person amounts to $19,400 and $18,200 respectively. Cornwall and Isles of Scilly thus represent the region in our Celtic sample with the lowest spending power in 2019, followed by Western Scotland (with Glasgow) with $18,800. At the higher end, Northeastern Scotland (Aberdeen and Aberdeenshire) is the region where citizens can spend almost $30,200 per person per year and is followed by East Wales (with Cardiff) with $27,400.

No economic correlation with Brexit behavior

As mentioned above, while Wales voted in favor of Brexit, Scotland did not. Neither did Northern Ireland. On a more granular level, the urban centers were in favor of remain. In Wales, only two regions in Western Wales (Gwynedd, 58.1% remain, and Ceredigion, 54.6% remain) and one in Eastern Wales (Cardiff, 60% remain) voted against leaving the EU. Southeast Scotland including Edinburgh (74.4%), Southwest Scotland including Glasgow (66.6%), and Aberdeen (61.1%) voted to remain as well. In comparison, regions around Belfast and North Antrim (37.8%) voted for leave while the West of Northern Ireland (and the rest of the country) voted to remain. Cornwall voted (56.5%) in favor of Brexit.

Comparing the annual per capita spending capabilities of the different regions in 2016, we could not find a pattern to explain voting behavior on Brexit. Also, the average growth rate of spending power development within 15 years does not correlate with Brexit voting behavior. For example, East Wales has the highest anticipated growth rates of all selected regions within the UK until 2031, but it still voted for Brexit. Scotland (especially the North) and Northern Ireland have similar growth rates but voted for remain. In the end, outside of the UK, we find that both Ireland and Brittany (our comparable samples from outside the UK) have higher growth rates of annual per capita spending power than any of the Celtic regions within the UK.