What price Independence?

One of the major arguments against an Independent Wales is that of ‘affordability’, with pro-Union supporters claiming that Wales could not afford independence.

 

Indeed if you are sad enough to read the comments section of papers like the Mail and Express (like i occasionally find myself doing!) you’ll see that it seems to be a commonly held belief that England subsidises everything in Wales. Dr Eurfyl ap Gwilym countered this argument brilliantly in his never to be forgotten tête-à-tête with Paxman on Newsnight.

 

However there are many within the Welsh national movement, many good friends of mine, who continue to argue that we cannot contemplate independence until we resolve what is called the ‘funding gap’, that is the gap between our income and expenditure.

 

Furthermore we are constantly told, by people in my own party as well as others, that Wales has become poorer over the years with our GDP falling.

 

I am very uncomfortable with these arguments.

 

Firstly the funding gap.

 

Do we seriously believe that Tom Clarke, Sean McDermott, Patrick Pearse, Joseph Plunkett, James Connolly and other leaders of the Easter Rising in Ireland discussed the planning of the Easter Rising then said “Hold on, how do we resolve the funding gap? Let’s wait a generation”, or more relevant maybe what if Vaclav Havel and the student movement in the then Czechoslovakia decided to hold off the velvet revolution for a generation because of the ‘funding gap’?

 

They didn’t because there was a fundamental principle at play, that of the right to self-determination (Copyright David Cameron vis-à-vis The Malvinas/Falkland Islands).

 

And in any case, what about the funding gap? It is said to be somewhere in the region of £6bn in Wales.

 

Firstly the simple way to resolve any funding gap is to increase income or lessen expenditure…or both. There is no doubt that an Independent Wales’ expenditure would be significantly less than our current proportion of UK expenditure. We wouldn’t have Trident for one thing. It is likely that our military spend would be significantly less overall. We wouldn’t be subsidising London either. Neither would we have to pay back for enormously expensive English PFI projects. Looking at the political make-up of Wales today we can confidently say that Wales wouldn’t have developed a PFI policy – an exorbitant credit card scheme. And what about the UK’s light touch regulation of the financial sector and the public bailout? Would we allow this? But the most important point is that an Independent Wales would develop policies suitable for the Welsh economic climate. This would mean Wales developing tax policies suitable for Wales. Who knows what this would result in! However we can be certain that it would not be any worse than the current economic mess simply because there is NO economic policy for Wales. All this would result in a completely different Welsh economy relative to the state.

 

It also means that we are setting the bar extraordinarily high for ourselves. If producing a budget surplus is the definition of a free and independent state, then where does that leave The United States of America? Turkey? France? Or even our beloved United Kingdom? All of which are heavily indebted. The UK is the single most indebted state in the world according to consultants Mkinsey. OK, much of this debt also includes personal debts, but who now has to pay back the debts of the banks? Us, of course. The simple truth is that the UK cannot afford to be ‘independent’, yet there is no doubting that it is (unless you’re a member of UKIP).

 

Wales, like all other countries, would borrow money. Yet we also seem to be hung up about the levels of any proposed borrowing compared to our income and expenditure. But this is not how debt is measured. A state’s debt is measured based on it’s GDP. But we don’t know what the Welsh GDP is. Those figures aren’t available. A £6bn debt as a percentage of Wales’ GDP could be anything – we simply don’t know. But we do know what the Welsh GDP is as a percentage of the UK average.

 

And this brings me on to my final point. We always seem to measure ourselves against England. We go on about Wales having become poorer because our GDP has fallen. But have we? Seriously?

 

Pre 1989 Wales GDP bounced around the 85% of the UK average.  However post 1989 we have seen a steady decline, and today we are hovering around the 70% mark. But I would content that while statistically we might have become poorer relative to the UK average in this time, in real terms we have become slightly wealthier. The reason that Wales’ GDP has fallen dramatically in this period is because London has become significantly wealthier. Welsh GDP average as a percentage of the UK happened after what is commonly called the Big Bang – the de-regulation of the city and the creation of the Masters of the Universe, which has seen the City Of London sucking in wealth not only from the rest of the UK but also from across the world.

 

If you take London out of the equation then it is more than likely that Wales’ GDP comparative to the rest of the UK would probably continue to bounce around the 85% mark if not higher – again we simply don’t know.

 

The effect of this however is to play Wales down, and to feed into the UK unionist narrative that Wales is lacking in entrepreneurial spirit and couldn’t go it alone.  

 

If we keep comparing ourselves with England (UK averages) then we will never raise our confidence and start convincing our people that Wales could become a successful independent nation state.

 

We need to start gathering accurate Welsh data.

 

Finally, regardless of Wales’ natural wealth which no one has properly valued (unlike, say, Scottish gas), our single most valuable resource is our people (as was argued by Leopold Kohr many decades ago) and no one can put price on the value of the people of Wales pulling together to build Wales up.

 

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13 thoughts on “What price Independence?

  1. “We need to start gathering accurate Welsh data.”
    Start Mabon?! Are you saying that this is not being done in Plaid by Eurfyl ap Gwilym et al already?

  2. I should have been clearer Neilyn. The stats/info isn’t collated by any official body in order for us to know what the Welsh GDP is. Until then Eurfyl and eveybody else can only use what information is available.

    I know Gwynfor used his first four years in Parliament just asking questions about statistics from Wales because back then there was absolutely no information directly related to Wales available – he asked more questions than any other MP. While things have improved, it shows th British authority and it’s puppet parties contempt towards Wales that we still lack real data about our economy.

    • I’m surprised this information isn’t available by now through the offices of the EU. If they don’t have reliable key economic performance indicators for Wales and the other “regions” of member states (especially the “motor regions” of which Wales is or was one?), then how have they calculated that Wales qualifies for Objective 1 structural funding, and how much?

      As for London – would the Freedom of Information Act not come in handy?!

      Just asking!

    • In order to go a long way to solving the above problem I have created this. https://www.assemblywales.org/epetition-list-of-signatories.htm?pet_id=827

      It’s a petition on the Senedd site calling for the setting up of a Government Expenditure Revenue Wales report just like the GERS up in in Scotland. All the Welsh Government has to do is ask the office of national statistics for this info just as the Scottish Government do.

      You have to wonder why they haven’t done this already?

  3. I agree but I wouldn\’t accept independence now if it were offered on a plate. We should move towards it slowly, by devolving tax raising powers etc, and making sure we have all the relevant data. We should take things one step at a time, rather than diving down the stairs and breaking a metaphorical leg.

    I think there\’s a slight contradiction in this article. One the one hand you argue that we need independence to improve Wales\’ economy, on the other you argue that Wales\’ economy isn\’t as bad as made out in the first place. I think the Plaid report showed that things are bad and are getting worse. Of course the Welsh economy is improving, the point I think is that it\’s happeining at a much slower rate than everywhere else.

    It\’s a bit of a Catch-22 situation – ond the one hand we need independence to improve the Welsh economy, on the other the funding gap means that independence would at first lead to a painful economic contraction. The answer is some kind of devo max – the power to influence the economy for our benefit, while staying dependent on the UK Treasury fr the time being until we can close the funding gap. Having our cake and eating it, perhaps, but that\’s what Scotland are doing.

  4. Erthygl teg Mabs, Mae rhaid cofio hefyd nad oes buddsoddiad wedi bod mewn cynyddu gwerth Cymru, Mae dwr ac ynni yn ddwy esiampl hawdd o le allai Cymru fod gwerth tipyn mwy gyda chynllunio gwell.

  5. Neilyn – There arecertainly some figures out there, and I would certainly be interested to see them together – that’s something I might well try and collate over some time. However we don’t know what the Welsh GDP is and what any Welsh national borrowing in ordr to meet our costs would be as a percentage of that national gdp. Maybe we and others could work on something to patch this information together.

    IMJ – I think it’s generally accepted that the independence march is a process, and I’m not overly concerned about the potential scenario of dealing with it tomorrow. Unlike other nations who decided to take the initiative and take control of the process, we seem to be content on letting our next door neighbours and northern Scottish neighbours to make the decision for us – it’s likely that Wales will find itself Independent despite teh Welsh!

    I don’t think that there’s any contradiction here though. I’m not arguigthat Wales needs independence to improve our economy – though I am aying that I believe this would be the result of independence. I’m saying that our economy and economic potential isn’t as bad as people lad us to believe, thus creating a downward spiral of dispair. To my mind the Piad report showed that the gap with England was increasing – but I think that’s unfair – tha gap with London is increasing yes, but so too is the gap between the city of London and almost every other ‘region’ in Erope and the world. My point is that we shouldn’t copare ourselves to England. Cameron’s happines indicator will be a far more worthwhile index of ‘success’ to policy makers than the UK GDP averages which are skewed because of the City.

    Instead of increasing the wealth of Wales we should concentrate on lifting our people out of real poverty and giving them hope.

  6. The union with England is the cause of Wales poor economic state. Our currency has been grossly over valued for years making our exports uncompetitive. We need independence with our own currency and central bank. There will never be a “right” time for independence. We must go for it now.

  7. Great piece Mabon.

    Two points:

    1 Agree with Ifan’s comment about the ‘Catch 22′. If you argue Wales ‘cannot afford independence’, you are arguing that Wales can/should NEVER get richer – that argument collapses as soon as you talk about Wales becoming more prosperous, i.e. if Wales became richer than the UK average, presumable such detractors would no longer oppose independence.
    2. One aspect missing from this debate is that GVA/GDP is a poor measure of prosperity and should not be used as the basis for arguments about Wales’ future, in my opinion. Using GVA results in bizarre scenarios e.g. higher GVA when there is war or illness.

    Quote from Robert F Kennedy:

    “Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross national product … if we should judge America by that – counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children.

    “Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans.”

    For an alternative view of what real prosperity looks like, check out Prosperity Without Growth:

    http://www.sd-commission.org.uk/publications.php?id=914

  8. Richard – agree entirely. GDP is a very poor measure of prosperity.
    Thanks for Kennedy’s quote – excellent! And thanks too for the link.
    Diolch eto.

    • Agree with the nonsense of comparing ourselves with London or England, or worse still, allowing others to set the agenda on that score. We should be comparing and contrasting Wales’ fortunes with small, ‘successful’ states that consistently score higher on global ‘quality of life indices’ than the ‘big, important, globally influential’ states such as UK. The challenge is to get a clear and convincing message across to people, one that opens their eyes for good and leaves London-controlled Unionism floundering. If the SNP can do it then so can Plaid, but so far it hasn’t happened.

  9. There is another side to this which brings in (I hesitate to use the terms, but can’t think of a better way to phrase it) cultural vs civic nationalism.
    Basically if we achieved independance in our present state, and we may well be able to afford it, we’d have the powers to change things for the better (or make them worse of course!), but this would take time and I don’t think there’s anyone seirously arguing there wouldn’t be a tough period where we’d have to make some tough savings in the immediate aftermath. Tough cuts are on their way anyway but I think most people agree, if not by the extent, that the cuts would be deeper if overnight we became independant.
    All this is fine from a strictly civic nationalist point of view, we’d back ourselves that we’d make the right policy choices etc. for ourselves and our economy and quality of life would improve over time.
    The problem as I see it is where those immediate cuts would fall. They would likely be sweeping and include many areas but one obvious candidate would be the language. The language is in a perilous position as it is with its present level of funding and were it to be cut I genuinely believe it would lead it’s slow drawn out demise. Heb iaith heb genedl? What Wales would it be without the language and the culture that goes with it? You refer to Ireland in your article but just look at the state of the language there compared to the begining of the 20th century. Sanders Lewis basically referred to the same sort of thing when (to paraphrase) he said that the language’s future needed to be secured before Wales could become independant. If the Welsh language dies it’ll be the Welsh that preside over its demise and no-one esle for us to blame.

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