A new study of the UK's regional accounts has revealed that serious flaws and discrepancies in the data led to a serious understatement of income levels in the south east of England and overstatement of incomes in poorer regions. Because of these flaws, areas such as West
Wales and the Valleys may have missed out on EU Objective 1 status between 1994 and 1999, under which it could have qualified for structural funds worth£130m.
The analysis by Gavin Cameron and John Muelbauer, economists at Nuffield College, Oxford, published today in the Journal of the Royal Economic Society, will spark calls in parliament for an overhaul of regional economic data and fuel the controversy over the
The inaccurate data, say the authors, 'will have misinformed public debate and public policy towards the English regions, Wales, Scotland and Norther Ireland. This should be of serious concern in a democracy'.
According to their analysis, 'serious biases' in the data arose because the Inland Revenue was unable to locate the region of residence for about 12% of a sample of tax records used to
distribute national estimates of income from employment and salaries across the regions.