Wales will bear the brunt of Brexit as Westminster scrambles to protect London at all costs

Blaengwynfi (left). Picture by Biggs (CC BY 2.0). The City of London (right).

Jonathan Edwards MP

Two years ago the then UK Chancellor, George Osborne, began delivering his Spring Budget Statement:

“Mr Deputy Speaker, today I report on an economy set to grow faster than any other major advanced economy in the world.”

Yesterday, the current UK Chancellor, Phillip Hammond gave his Spring Statement, confirming that the UK economy is now the slowest growing advanced economy in the world.

What a difference a Brexit makes.

The Chancellor’s statement revised down growth for 2017 from 1.8 percent to 1.7 percent and confirmed that growth will be even lower than that in every single year from now until 2022, when we’ll finally get back to current levels.

While the Chancellor celebrates 1.7 percent growth, the Republic of Ireland’s economy is growing by 7.3 percent. And in Wales, 1.7 percent will be more like 1 percent – shackled as we are to Brexit Britannia.

What that means for our citizens is that we’ll have less money in our pockets, and any money we do have will be worthless. Our standard of living will continue to be squeezed.

What is perhaps even more concerning is that the Office for Budget Responsibility’s (OBR) forecasts are based on Theresa May’s fanciful scenario of ensuring the UK retains its full free trade arrangements despite leaving both the Single Market and Customs Union.

This is a scenario every sane person knows is complete fantasy. The reality will be much bleaker than even these already bleak figures suggest.

Wales stands to lose

Let’s consider the UK Government’s own analysis of the impact of different Brexit scenarios on the UK economy.

If we take estimated growth in UK GDP over the next fifteen years to be twenty-five percent in real terms – the equivalent of 1.5 percent per year – the reduction in such growth arising as a result of a no-deal Brexit would be 7.7 percent, or £158 billion.

To put that into perspective, the whole of the Welsh Government’s budget, including everything it spends on the NHS, schools, local government and everything else, is £15 billion a year.

Most of that reduction will be as a result of trade barriers being placed between us and our important trading partners and therefore the brunt of the £158 billion will be felt in those areas where trade forms a bigger proportion of the economy – areas like Wales.

London, with its reliance on business and financial services, will prove resilient whereas Wales, with a much higher proportion of its exports going to the EU and its reliance on manufacturing sectors, stands to lose.

The end result of all of this is that the whole of the UK – Wales, Scotland and the manufacturing regions of England will all become yet more dependent on the financial services sector in London – a sector that will itself become weaker.

Wakeup call

The only alternative for us is to take control over our own economy, like Ireland has done. We have to have the whole portfolio of economic powers in Wales so that we can get on with the job of building a brighter future for our people.

It is not sustainable for us to continue to accept an economic programme built to suit the needs of another country. We need to build our economy on our strengths.

All Welsh taxes should stay in Wales and used to fund Welsh public services. Corporation Tax, Income Tax, VAT and Air Passenger Duty must all be devolved to Wales.

If we leave the Single Market and Customs Union, there’ll be no excuse for Westminster to keep its hands on Welsh taxes.

The Chancellor might well be celebrating, but the reality is these figures should be a wakeup call for us in Wales.

Westminster-rule has failed and it is only going to get worse as Whitehall Britocrats scramble to protect the City of London at all costs, while our manufacturers and exporters are left to wilt.

It shows just how important it is that we resist Westminster’s attempts to roll back devolution through the Withdrawal Bill and why my colleague, Steffan Lewis’s Continuity Bill is a necessary step to ensure Westminster doesn’t gain an inch on our hard-won right to run our own affairs.

Jonathan Edwards is Plaid Cymru’s Treasury spokesperson and MP for Carmarthen East & DInefwr

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  1. Richard Perkins

    Yes it is important to resist powers reverting to Westminster should Brexit proceed. However outside the European Union, Wales like the rest of the United Kingdom will be diminished no matter what powers are reserved to Cardiff. Only thwarting leaving Europe will save London, the goose that lays the golden egg and the other parts of the UK and especially Wales from a poorer future. All members of the Westminster Parliament against a hard Brexit should insist on having the final say on the United Kingdom leaving the European Union and should follow their reason and conscience and do everything to thwart an act of self-immolation.

  2. Liberals Cymru

    Growing up in America in the 90s, I never had an American Dream. I had a European Dream.

    Back then I wanted Swedish furniture, Britpop music, German cars, and I fancied French tennis players while having grown up around Spanish language and food.

    Europe, not America, was were I could get an university education, a good job and a house.

    Wales was the part of Europe I chose as my European home. I came here and made my home, and now Im having that dream taken from me.

    • Y Ferch Ddarogan

      The EU is a Capitalist tool erected by Thatcher incarnate to rob us. As we are. SOCIALIST country, we must free ourselves. No banks, no control by the puppet master Fatcats. The EU is Capitalist, Wales is Socialist!

    • JR Humphreys

      Perpignon could be one choice, be sad to see you go though, wait a while yet. (But Swedish furniture? Finnish or Italian, and artemide lamps, surely!)

  3. CambroUiDunlainge

    They do seem intent on a hard Brexit at this point. They don’t have a democratic mandate for it though – as the referendum did not include whether we should leave the EUCU. They said it did but surely if it did then the 260,000 people in Crown Dependencies (IoM, Channel Islands) would have also gotten a vote – they’re not EU members no, but they are in the Customs Union and they will be affected by Brexit. They don’t have MP’s so no voice at all in any of this.

    Or am I talking crap and missing something here?

  4. sianiflewog

    Annwyl Jonathan, yn anffodus, nid ydych yn deall o gwbl:

    your old mate, Miguel, here, you know Miguel Mirage, i once was leader of EUkip – d’you remember. Now, what you forget about Brexit is that we who have voted for England to leave the EUK (geddit, my little joke) have made a leap of faith in Schroedinger’s Quantum Cat. This feline is both dead and alive at the same time. Likewise, just as i promised on the side of my bus, England’s economy will both miraculously improve, whilst appearing, falsely i assure you, that it is failing.

    So, poor old Johny Foreigner will never understand our latest weapon in our anti – EU armory, namely the Quantum Cake: it persists indefinitely even after being eaten. I tell you poor old Franz en Kraut ‘ll never work that one out. And we’ll be winning all the way to my foreign banc account. i’m quidz in wotever happens.

    Toodle pip, Jonners, see you down the Quant ‘n’ Cat for a pint, a fag and a murdered fish


  5. That’s Blaengwynfi not Merthyr Tydfil, pals.

  6. Graham John Hathaway

    The matters associated with the withdrawal from the EU, and its effect on Wales have yet to be fully understood. I suspect not anywhere near to the initial and prolonged hit on Welsh life and future prospects. You simply cannot factor into the anticipated deficite the knock on effects to the supply chains and fall in confidence that others in the city and across the world will profit from. That’s how big business can make a fortune on the backs of a failing Country. Our politicians are marginalised, more than usual, and through Steffan Lewis’ Continuity Bill at least a little resistance. But sadly easily swallowed along with our Assembly by a simple repeal of our Wales Act. Politics are in a state of turmoil, and Westminster is on the prowl.

    It seems to be falling to Plaid only to fight the corner for Wales. Again. And a fear that what we haven’t sufficient awareness of the needs of Wales amongst the scrum of demands from much stronger voices.

  7. In my opinion the issue for us in Wales is that we have no independent economy, there are few businesses based here & I suspect there are more people not working than are working. We need representatives in Westminster to help change this for us- not sure Plaid Cymru has any idea how to do this?! Invest the money we do have in building our country & providing opportunities rather than making everything bilingual & messing up our education system. Look forward!

    • You were doing very well until “rather than making everything bilingual & messing up our education system”. Promoting one of the country’s two official languages cannot be construed as a waste of money, by any stretch of the imagination. For wasted money, look instead at the Third Sector.

      • Graham John Hathaway

        I think I would have stopped earlier, in the flow, Wrexhamian, that started like a well informed patriot. And then the drag into culture and history. But my most sensitive side of me see the battle of the most precious thing that identifies you and glue you to nationality such as language and which has created so much beautiful literature and Art, still vulnerable from life in a colony, and conditioning.

        That aside, and in the state of influential politics and who calls the shots, then I’m mystified that firstly we dismiss the efforts made by Plaid as the only credible alternative with just 4 MPs at Westminster and punching always above it’s weight, again. And the reference to the making most of the money we do have, then in comes the Assembly. If you are going to criticise then at least direct it at those responsible. Justified or not. There is cause too.

        • Fair enough, Graham; Plaid did a great job over this, as I’ve said in my reply to your next comment below. Okay, mentally move my criticism of her comments a few notches back to include “not sure Plaid Cymru has any idea how to do this”. Chwarae teg, they got this right, yn ddi-os.

      • Graham John Hathaway

        I too felt the dagger glinting in the eyes of the blue corner, over their denial of the need for a Continuity Bill, to protect the integrity of the Senedd. Steffan Lewis’ s bill has been highly regarded and a consummate piece of legislation. But I was pondering how the UKIP members there decided to vote in support. But that might be for another day. Let’s say most welcomed.

        I’m reminded of a famous Shakespearian quote, ‘ hell is empty, and all the devils are here.’ It must feel that way sometimes when you are fighting for you dear political sovereignty.

        But your assessment that the EU are out to punish us ( UK) is becoming the mood music. But their declarations over the rights of the Catalonia people does leave me wondering just where the smaller countries play out in their bigger picture of a united Europe. Large and small.

        I’d settle for adoption of the customs union plus environ legislation and protection of minority languages. Um!

        But suggesting the idea that MPs at Westminster are going to support Wales is highly unlikely, by current standards, including our Welsh reps. from the major parties.

        • Hamilton said he’d been against devolution in 1997, but, now that it was here, he felt obliged to stand up for it (well, he would, wouldn’t he — no Senedd means no cushy job for Hamilton and no lap of luxury for his wife).

          Although I don’t like the direction the EU has taken, I’m now beginning to wish that Wales had voted Remain, because it would have pitted the Celts in direct opposition to the neighbour from hell and forced a constitutional crisis to the advantage of the former. I agree that we’ll be even poorer, Graham. All that Wales can do at present is to try and hang on to the few paltry powers it has.

          What makes me so digalon at the moment is the lack of interest and knowledge many Welsh people have in the Welsh political situation.

  8. JR Humphreys

    Where is everyone? Are they on hols or simply entranced, by jingo, at the current brexitocracy wanting to send gunboats up the Neva?

    An Exitbrexit campaign might shake things up, but it has to be all Wales, and PC must get real and become a wide ranging movement.

    • Graham John Hathaway

      The enemy has been spotted, ‘man the ramparts ‘ ‘send for the cavalry’ help is desperately needed. Yet we still march in Wales to a drum beat not ours. It beggars belief. The biggest single political act imagined of self harm, I have never witnessed. Yet muted comments or silence. Hello who is batting for Wales.
      Is Plaid the only party interested in the realised consequences of unchallenging the Westminster power grab.

      We are in danger of relegation into serious levels of unemployment and poor finances where it’s future as a Nation is in doubt. Subsumed. Is this what is planned. So do we care enough. Are we that flattened into obedience. Has the projected down turn in Welsh affairs not been made clear enough. I’m devastated that only Plaid Cymru seems aware to our dangers of the potential of political wasteland. An economic impact greater than that seen only after World wars. A consequence of other parties wedded to Westminster, to lie still.

      Plaid Cymru has been true to its core of putting our interests above party politics and besides the Steffan Lewis’ Continuity Bill, a call by PC for UK nationals to retain EU citizenship after Brexit has been passed by MPs without a vote. The first time one of its motions has been passed by the House of Commons. Yet still this result is not binding on the UK Govt.

      There is a clear need to remain in the single market as said in the post, and how much a blow this will be to our export market. To say the future is uncertain is an understatement, to say Wales will be one of the most disadvantaged of the home Nations is a foregone conclusion. Yet with no influence, one that matters anyway, is a tragedy. Well and truly kippered. And unheard.

      • Yes, Plaid has emerged very well from this. The blue corner, in contrast, voted against the Continuity Bill, showing where their loyalties really lie, while Hamilton & Co. reluctantly voted in favour of the Bill.

        I never voted to join a European superstate, but I agree that Wales is fucked if we don’t stay in the Customs Union. That’s what people voted for under Wilson in 1975, when it was called the Common Market. Junker and his team won’t let us stay in it, though, They’re out to punish the UK, and for the present that means Wales, too.

  9. Our country in our hands

    We definitely need full tax raising laws and that money has to stay in Wales. Basically we need independence to try and rectify the economic catastrophe that Brexit will cause – it’s as simple as the that.

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