Cardiff’s Temple of Peace provided a spectacular backdrop to YesCymru’s Economics of an Independent Wales event on Saturday.
With 12 experts in various fields, three-panel discussions compèred by broadcaster Beti George and an audience of close to 150 attendees, discussions centred on the reasons the Welsh economy is in its current state and the radical solutions that could be explored as an independent nation to reshape it.
Guto Ifan – Research Associate at Cardiff University’s School of Law and Politics – kicked things off with a run through the latest analysis of Wales’ public finances from the Wales Governance Centre, released earlier in the year.
The report highlighted how the gap between tax revenue and public spending has decreased in Wales, from £14.7bn (24% of GDP in 2016) to the current figure of £13.7bn (19.4% of GDP). This compares with a deficit of 2% of GDP for the UK as a whole.
It also noted that the tax base in Wales is different to the UK overall, and while Wales comprises 4.7% of the UK’s population it only generates 3.6% of UK tax revenues.
The report confirms all of the UK’s nations and regions are in financial deficit outside of London and its immediate neighbours, with Wales having the second-highest deficit per person behind Northern Ireland.
When asked why the Welsh economy performs so poorly Guto said: “There is an argument I believe to suggest that being tied to a monetary union with England, a much richer economy and a very different economy, has over time disadvantaged the Welsh economy to some degree.
“If you go back to the 1920s when Wales took a much harder hit to its heavy industries, the fact that the currency of Wales, sterling – didn’t adjust at the time to that reality – it essentially made our industry uncompetitive and it led to 400,000 people leaving Wales in the 1920s.
“The economic underperformance goes back decades and at the moment there isn’t any indication that UK economic policy is designed to turn that around or implement change.”
The second session of the day opened with a presentation from Duncan Fisher, who has recently launched a new project to promote local food economies in Wales. He made a powerful case for wellbeing economics to be at the heart of economic policy here, arguing that economic growth has a limited attraction and declining positive impact on the general population beyond a particular point and that misery is a key driver in the growth of populism around the world.
New research has confirmed that measures of stress, misery and anxiety are increasing globally, despite constant economic growth, and the correlations of these measures with populism and civil unrest are clear. He also observed the Brexit vote was preceded by an extended period of increasing misery despite economic growth during the 10 years leading up to the referendum.
He said: “At low GDP, increasing GDP is very important for people to become more happy. But when you get to a certain point and that means where we are now, adding extra GDP doesn’t make us happier. It just tails off.
“You can add GDP more and more but we just don’t get any happier. Just growing GDP for the sake of it is not doing anything for how we feel.
“Misery is much more related to GDP going down than GDP going up. We don’t like getting poorer.”
Arguing that governments should pay more attention to the happiness of their citizens, he illustrated the point with research drawn from recent elections across Europe observing that the strongest correlation for a government to earn re-election was the happiness of voters:
“It’s a stronger correlation than GDP or unemployment or the inflation rate. This is saying this is politically very important and this should be the focus of our economics and politics. People should feel happy.”
After his session was over word filtered through that were Wales were 2-0 up in the Euro 2020 qualifier, perhaps proving his point that happiness isn’t always directly tied to economic forces.
Tegid Roberts and Mark Hooper wrapped up proceedings in the final session of the day. Both are strong supporters of basic income and argued that if this measure was introduced in an independent Wales it would lead to a happier population.
Tegid was also part of a team which recently wrote a report for the Welsh Government on the impact of automation on the Welsh economy and saw opportunities and dangers at the looming prospect.
“There are two ways automation can go. If the companies that are running an automated system are owned by shareholders external to Wales, we have a dystopian future. We will all not be working and we will have a DWP that won’t pay us enough to live on. It’s a totally dystopian future.
“However, if we were to have a future when we owned those assets… If we owned the means of production. So where Wales owned shares in businesses that were based in Wales – very much like Singapore does and Germany and France, then we would be able to benefit from those companies.”
Mark added: “There is an opportunity for an independent country like Wales, that is small enough, to actually start to say that we should no longer be a slave to work.
“There is enough to go around. There is enough wealth.
“There was a report by the Resolution Foundation 18 months ago that showed that Wales had about average wealth compared to the rest of the UK. So, when people say Wales is a poor country they’re wrong. We’re poor when it comes to income but when it comes to the wealth we have about average wealth for the UK.
“What we fail to do is use that wealth for any societal good. So it sits there in wealthy people’s pockets and it does nothing apart from accruing more wealth.
“We could if we wanted to change the whole of that and say ‘there are more important things’. And we could be the people, the country, that welcomes automation more than anywhere else.
“This is a huge challenge, particularly to working-class supporters. Unions for example rail against this. They say ‘we need to have people doing jobs’ that are often dangerous and often poor quality and poorly paid.
“That goes against what they should be doing and emancipation from work is something we could, as a society, decide to do.”