Only self-governance will get Wales out of this economic rut

Picture by Matt Jones (CC BY 2.0)

 

Joe Chucas

We’re too small to make an impact in Westminster. Wales’ 40 MPs and 3 million inhabitants are easily overruled by the UK’s 650 MPs and a population of 60 million.

As a result, we continue to accept the same pathetic ‘common sense’ conservatism that means allowing our country to wallow in poverty while subsidising fossil fuel companies, paying for nuclear weapons we can never use, tax breaks for the rich and reducing benefits for the disabled.

Wales has been in the bottom quartile (3 of 12) of UK regions (in terms of GDP) since 1985. The results are dismal – a quarter of our population live in poverty (as of November 2016), and the average male life expectancy at birth in Blaenau Gwent is 7.5 years lower than in Kensington.

We are the poorest country in the UK, which itself has the lowest rate of economic mobility (a person’s ability to rise in economic status) in Western Europe.

Brexit also means things will get worse before they get better;

  • Two-thirds of our Welsh goods exports currently go to EU member countries outside the UK
  • Wales received £245 million more out than it paid in to the EU.

We have a two-party state intent on closing its borders and stopping the free movement of people, industry, and goods, all on the false premise of ‘caring for our own’.

When they say ‘our own’, they don’t mean us here in Wales.

Little Britain, Littler Wales

How on earth has our country found itself in such a predicament?

Firstly, it is Wales’ inability as a post-industrial region to adapt to the internationalized economy.

This is because the UK Government has prioritized the development of a services-led economy in the South-East of England.

There’s nothing unusual about this. Across Europe and the USA, post-industrial areas have struggled as service-led economies have developed in the cities.

The costs of sickness and unemployment that come in the wake of the demise of industry leads to a vicious cycle.

Post-industrial areas have fewer resources to provide for their youth, who are then incapable of reaching their full economic potential.

Here in Wales, the asymmetric economic shocks of recent public spending cuts and globalization have also produced vicious cycles of losing educated labour and the capital required for innovative products and capital-intensive industries.

We lose university graduates to England, and currently have only 1 FTSE 100 company.

Core

What devolution there has been to Wales so far has been too weak to counter these problems. We are still lacking the primary legislative or tax-varying powers that would allow a greater degree of economic management.

But Westminster has no interest in Wales, and why should it? We have neither much of an economy or that many voters that need courting.

Wales is a postcolonial periphery, in a cultural, political and economic sense.

For the UK parliament, cheaper political gains are to be made by appealing to London and the South East, and so the economic focus is on London and South-East England.

Crossrail, Heathrow Terminal 5, HS2 and the London Olympics all benefit the core region.

Meanwhile, Wales is in the club of three European countries without an inch of electrified rail, along with Albania and Moldova.

Fate

Wales is in a pathetic state.

The monolithic nature of the UK is such that a small region like Wales cannot change, and finds no mobility.

But while our people remain apathetic and wedded to the political status quo, our country’s dire state will not improve.

An improved political settlement of a pluralistic Parliament with legislative and tax-varying powers in Wales is needed to ensure that policy-making tools can be used to create virtuous cycles.

For example, Research and Development tax credit and support infrastructure would create a synergistic feedback loop of improved employment prospects and capital accumulation, thereby improving Wales’ export base.

This would improve sectoral expertise and cultivate a positive environment for innovation and business operations, creating jobs and reversing the outflow of capital and labour.

Technological spillovers could then be absorbed by this business community, through whom joint ventures and regional ownership (potentially with a Welsh Parliament) would be possible.

It is impossible to improve a situation without a degree of control over the factors that influence it. Legislative and tax-varying powers are necessary for Wales to flourish.

Despite the severe limitations of the conferred powers model, the modest success of our own government gives us a glimpse of what could be.

With the modest powers in its possession, the government that has maintained lower tuition fees, managed a 23.8% reduction in end-user greenhouse gas emissions (from 1990-2010) and eliminated the prescription charge.

A brighter future

Wales requires a decentralization of the political processes that determine our future to a Welsh Parliament.

Under a reserved powers model, with the necessary fiscal and legislative powers, it will be possible to adapt.

From this position, it could ideally go onwards to an interdependent state in a looser British politico-economic union (similar to the Benelux Union).

To build a prosperous, fair and open Wales, we need to make our own decisions and thereby be able to walk with our backs a little straighter, and our heads a little higher.

We need to see a future outside being merely a destitute, subservient periphery with a toothless government, going cap-in hand to the Westminster masters.


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W. Habib Steele
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W. Habib Steele

I hear many Welsh people complain about the English government’s control of Wales keeping this country in poverty, but they say that Wales doesn’t have the resources to be independent. Yet Iceland, with a much smaller population and fewer resources does well as an independent country. Could devolution be keeping Wales down? Power devolved is power retained! If Wales were independent, could it develop the resources it has. and find new ones?

Dafydd ap Gwilym
Guest

The British and, they’re way of controlling us, devolution is keeping Wales well and truly down where they believe we belong.

Good article, more self critical ones please of not just the British, but also ourselves here and now, in a modern sense. I say that because recently we have been told we should feel guilty for the slave trade!!! Utter rot! Accept our history right or wrong, but not the sins of our fathers! Just make sure the same mistakes are not repeated.

Dim gorffwys tan annibyniaeth!

Capitalist and Welshnash
Guest
Capitalist and Welshnash

No rest after annibyniaeth either. We face a situation where our language could be headed in the direction the Irish Language is going. And I see little use independence if Wales is destined to become an English-medium country without communities where Welsh is the dominant language. As per the article. Well, yes. We need tax raising powers so we can lower income tax and taxes on home-grown businesses, whilst taxing companies who do not directly boost our economy, who do not use a Welsh human resource base for its white collar jobs, and companies such as Thomas Cook which feed… Read more »

Tellyiesin
Guest
Tellyiesin

Interesting. As per some comments below, what comes of independence is not a socialist paradise with broad sunny vistas and ballet in the evening….not even rest. We won’t win it by advocating a Wales where Welsh is the dominant language and then waiting for that to happen before taking the keys from Westminster. Yes, there must be areas of Wales whereCymraeg is the dominant language. There will be areas of Wales where English is the dominant language. There will be homes in Wales where neither language is spoken. But any kind of independence cannot have the language as its only… Read more »

Richard Jenkins
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Richard Jenkins

Problem is people extrapolate current inaccurate & incomplete economic statistics from GERW to an Independent Cymru’s financial position. Our spend & tax paradigm would be vastly different so the correlation between to two is clearly asinine! We wouldn’t be spending or allocated £1.7Billion pounds on defence when Eire spends £500M! We wouldn’t be allowing construction spend to raise so much less in local growth than it does in rUK. We wouldn’t be contributing £4.6Billion to Trident! How is it other small nations, many smaller thanCymru with with less natural advantages and resources than Cymru do fine thank you very much?… Read more »

Llantrisant
Guest
Llantrisant

If we are going to talk about an economic case for independence then can we be realistic and talk less about this social justice socialist la la la land that will apparently transpire. Countries that have emerged independent in Europe in the last 100 years like Estonia and Ireland very much embrace free markets and smaller government what most Plaidistas derisively call “neoliberalism” and they are better off for it.

Petroc
Guest

A great overview and some strong, clearly made points. On the economic front the point about graduates is key. 50% of our young people will go to University. Since half of the students at older Welsh Universities are English and a similar number of Welsh students study in England we can see this is de facto a major social mixing policy. Friendships, Career paths, settling in a region and finding Life partners are the ‘soft’ byproducts of University education. We export our young people; and on top of that we pay English universities for the privilege. Only a real Welsh… Read more »

sibrydionmawr
Guest

Adapting our university sector to better serve Wales’ needs I think is crucial. Many years ago the now sadly more or less defunct University of Wales was described as England’s university in Wales, which pretty much described it. If the Welsh government had more control, it could retain more Welsh students in Wales through providing bursaries to those students who study in Wales, whilst refusing to fund those students who wish to study similar courses in England, or elsewhere. I’m also very sceptical about the insane, plucked-out-of-thin-air figure or 50% of school leavers going on to university, especially when they… Read more »

Dafis
Guest
Dafis

Lot of ambition in your final paragraph but nothing that can be singled out as daft. Indeed your comment about nursing is bang on the button and the dimwit who felt it necessary to turn nursing into a graduate profession must have spent most of his/her life in solitary confinement away from the realities of delivering healthcare. Nothing wrong with enabling professionally qualified nurses to progress further by acquiring a degree but the emphasis should revert to practical training and experience underpinned with structured scientific study. It reminds me of graduate engineers from Oxbridge many years ago who didn’t know… Read more »

sibrydionmawr
Guest

In terms of naming, whether an institution is called a polytechnic or a university is really just down to semantics, and I just used the terms to emphasise the difference. Polytechnic rushed to become universities awarding their own degrees as soon as they could in order to exploit a perceived hierarchy, as we know. Polytechnics were somehow seen as something less than a university. It’s just snob value. I think reorientating the university sector would work just as well. I’d also be anxious to include an element of arts teaching in all scientific qualification schemes, and and element of scientific… Read more »

kim erswell
Guest
kim erswell

Strange how the British establishment psyche loves the underdog until it comes to, Cymru.

Tame Frontiersman
Guest
Tame Frontiersman

Independence is not an answer in itself to the many challenges facing Wales, but it would give the government of an independent Wales much greater flexibility in regards monetary and fiscal policy and to integrate things like energy projects and infrastructure and regional development where there are both devolved responsibilities and powers reserved to Westminster at the moment

glasiad
Guest

While we remain shackled to a crooked monetary system (in this case the English pound) Wales and northern England will remain drained of sufficient funds for a steady state prosperous economy that provides income security for all. We need to establish an economic plan that would deliver a prosperous Wales – such as: https://freewales.org/independent-wales-prosperous-wales/ Then independence for Wales would be a no-brainer for most people. Arguing for an independent Wales and then trying to justify it through wishy-washy ideas of what how an independent Wales could work is too vague to either catch the public imagination or be sufficiently supported.… Read more »

Bryn-daf
Guest
Bryn-daf

Power + Land (+ education) = Sustainable wealth creation

We must get self rule into communities and individual hands across Wales….not just Cardiff or Westmisnter

M
Guest
M

How much of the land in Wales is owned by the Welsh (registered outside Wales does not count)?