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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15 Comments

  1. 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?

    • 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

        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 a continual attack upon our Welsh-speaking heartlands.

        • 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 cause. That will be one of many equally important reasons that will include self-determination, control of our economy and others. We will however have an education system that becomes progressively more successful at delivering opportunities for our children to become fluent and comfortable in both our languages and we may see that we go beyond the sterile bilingualism that Fin McLeod was talking about a few days ago.

          There will have to be a practical advantaging of companies and institutions who value our language and there will have to be sanctions against those who devalue it. On the one hand we want a country where Welsh becomes a language of public discourse and we want a culture where we should expect others to be able to converse in Welsh if they wish to join in our national conversation. On the other hand, the recent series of anti Welsh journalism has shown that racism is plainly institutionalised in some parts of society and it cannot go unchallenged and un punished.

          The trickier and I think, in the end more rewarding part of independence will be aiming to find a humane way of tackling the invasion of “English” as a language. We all know parts of our cultural discourse that have changed to English or adopted other priorities as a matter of politeness and they have all remained English language forums. We cannot forget that English is spoken by people and people have rights as well as responsibilities. We have all read that if the same proportion of Europeans came to England to retire as we’ve had here (the equivalent of all the pensioners of Netherlands and Belgium combined) settled in Englands countryside, effectively crippling its rural health services, removing affordable housing for young people who leave and kill the village, refusing to join their Councils till they speak Dutch to them, taking over the local pubs, shops and other retirement wheezes, then the story as reported in their Redtops would be a different thing. And yet they are people. We can’t just rob them of their homes or deny them the right to visit a doctor no matter how tempting that is after closing time. And whilst if they don’t like it, the road east is always open we can’t force them to join in without a carrot

          Reforming property ownership, rental and inheritance may be one key in unlocking rural sustainability. As will reforming how capital and business can behave. I am red as a red -lettered stick of rock with Commie written through it but not every body is. And whilst many newly independent companies have jumped to the right (understandable given they are mostly ex-Soviet empire) few have successfully embrace the red-in-tooth-and claw- neoconservatism of Friedman, Trump and Rothschild. When the Irish and Icelandic bankers gambled the family jewels and lost they went to jail, not the Cayman Islands. Many countries have a progressive taxation system to curb the extremes of wealth and poverty. They have schools and health services free at the point of use (and do please remember that England does not). They have laws that enforce the moderation of profit and that wealth is distributed.

          We will also need to look at an economic policy that values social health as well as financial value. There is no point in the struggle for independence only to find like Zimbabwe and South Africa that we are as poor and as unhappy or poorer and unhappier. Again I am no expert but controls over exploitation are only a part of the problem.

          Oh! Tourism. It doesn’t have to be shit if we don’t let the shits run it. AS engineers say, “shit in, shit out!” The #anusofthenorth. Is proof if we needed it again that there are huge parts of our own fucking government and civil service who do not value us as people but as units in some kind of bollock measuring contest. The point of tourism for us will have to be a polite and respectful way of taking dollars, pounds, euros and any other currency you like in exchange for experiencing our culture, landscape and hospitality. It is not to invent a fake “often difficult […to sell according to CADW and Visit Wales] history” or to dress old women from Birmingham up in bizarre “Welsh Costume” to sell a ten minute tour of a one-up-one-down house on the quay of Conwy. Scandinavians, whom we should emulate in everything except preserved herring, have the idea of sensory tourism. Walk in the landscape, sing our songs, eat our food, buy our produce and remain our friends.

  2. 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?
    We must st stop being Saturday afternoon Welshmen and stand tall & free!

  3. 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.

  4. 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 HE system can ensure that 90% of our Welsh students stay within Wales. We could even have our own Vet School at Aberystwyth- and a Welsh Medium Medical School at Bangor. Indeed the pitiful progress in Welsh Medium higher education shows a lack of imagination and ambition. Providing Welsh medium Medical Schools, Dentistry, Vet Training, Pharmacists, Nurses, Physiotherapists and other health professions in Wales could provide over 1000 new full time students – at no extra cost – as they have to be trained anyway. THis could solve the crisis of NHS recruitment and the loss of young welsh speakers – at almost zero net cost.

    • 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 are in subject areas, such as nursing, where an academic approach is the height of insanity, as nursing isn’t an academic subject: most of it is practical. This is not to suggest in any way that nursing is somehow sub-par to other degree subjects, but it seems, (I have evidence from a niece who is training to be a nurse, and she is hyper-critical of the approach where the emphasis is on the academic, rather than the practical) bizarre in the extreme that such an important vocation is subject to such a dysfunctional training regime. I think that as part of a more relevant higher education system, Wales would need to reintroduce polytechnics, as they seemed to be a far better fit when it comes to providing higher education with a vocational focus. Perhaps it’d be a good idea to resurrect the University of Wales while we are at it, and make it obligatory that all higher education in Wales is federated to it. It might stymie individual universities’ global status ambitions, but what does that matter when the primary focus of a national university should be the nation itself? I’d of course be very much in favour of Wales’ university sector forging links with developing countries, as I’d very much hope that an independent Wales would strive to position itself at the forefront of humanitarian endeavour.

      • 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 one end of a machine from another yet felt “destined to lead ” .
        This links into your comment about polytechnics although I believe that a reorientated university sector should be able to deliver multiple streams of education and training, part and full time and by distance learning, enabling some to follow a “conventional” degree programme while others might travel a HND > B.Sc/B.A pathway, and perhaps onwards to postgrad/vocational accreditations. The key point is that the system should be focussed on meeting the nation’s needs, not playing some global marketing game where more energy is spent on the marketing posture and not a lot on delivery of excellence in teaching and research. By getting our local needs sorted in a lasting,coherent way that in due course would stimulate the interest of other countries who might wish to attend our institutions.

        • 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 teaching in all arts qualification schemes.

          I’d also like to see the inclusion of an intensive Welsh language course in the first year of all higher education studies that is biased towards spoken fluency, and for which a pass is a compulsory requirement. That the higher education sector in Wales itself should become a sector where the Welsh language increasingly predominates should provide an ideal environment for the consolidation of Welsh language skills for those unfamiliar with the language.

          I agree wholeheartedly with your last point, by our university addressing our own local needs, much of which are identical to the local needs of any country anyway, or are easily adaptable, our universities could well be well placed to attract students from other countries. In terms of our universities, and what their focus should be, in terms of Wales’ needs, I think would place them in a pretty unique position with Wales on the one hand located politically in the First World, but economically somewhere in the Developing World. We would quite likely see ourselves forging important links with much of Africa and Central and South America, with mutual benefits.

  5. kim erswell

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

  6. 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

  7. 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.

    If Plaid Cymru adopted a much need monetary reform policy they could have electoral success in south Wales and take Wales out of the UK. Unfortunately they remain deeply entrenched in the status quo. I gave up on them years ago.

  8. Power + Land (+ education) = Sustainable wealth creation

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

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