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Opinion

Wales can afford to be better

13 May 2023 5 minute read
Cardiff march for Independence 01/10/22 image by Mark Mansfield

Llywelyn ap Gwilym

Can Wales afford to be independent? It is a common question, but not an easy one to answer. The answer depends on the kind of country that we want an independent Wales to be.

The “economy” of a country is not something in and of itself. Instead, a country’s finances reflect the social and political choices made, as well as how such choices are paid for. Therefore, the answer is “yes” because any country can afford to be independent, as long as it makes appropriate choices.

The more relevant question is whether an independent Wales could make similar social and political choices as it does now, and how it would finance them.

This is important since many people consider independence against the status quo: can an independent Wales afford to look as it does now?

A recent paper by think tank Melin Drafod, which pulls together recent academic work in this area, suggests that it can.

The current situation is not encouraging. Office for National Statistics revenue and expenditure estimates for Wales as part of the UK indicate that Wales runs a large nominal budget deficit.

However, it must be recognised that this estimated deficit reflects the choices made today, largely by the UK government in Westminster who control almost all financial levers, and which directs investment to the southeast of England, locking in the need for fiscal transfers to Wales (and most other regions of England).

Therefore, this current situation does not necessarily reflect the finances of an independent Wales making the same social and political choices. An independent Wales could finance these choices differently. Wales’s future position, if independent, will also rely on negotiations with the remainder of the UK.

Deficits

Analysis cited in Melin Drafod’s paper suggests that historical precedents, including those set during the Scottish independence referendum campaign in 2016, imply that Wales’s economic situation post-independence would be much stronger than its current position.

Moreover, negotiations over historical debt or pensions obligations, several areas of “non-identifiable” spending currently allocated to Wales, such as spending on the armed forces, make ONS-estimated deficits look outsized when compared with international comparators.

Taking all these factors into account, the deficit of an independent Wales which makes similar social and political choices to those that it makes today would be 3.1%, which is in line with European peers.

While many of these assumptions are open to challenge, the clear answer is that, yes, Wales can afford to be an independent country which looks very similar to the country that it is today.

However, the question remains, is this what people want?

Many supporters of Welsh independence believe that Wales is not reaching its true potential as part of the UK. Perhaps more pressingly, as part of the UK, Wales is beholden to a government which is increasingly right-wing, resulting in a declining standard of living for the majority, while a tiny minority thrives.

People are struggling to heat their homes, and dependence on food banks has exploded. Inequality has reached levels last seen in the 1920s, suicide rates are increasing, and life expectancy is falling.

The future looks bleak, and it is unclear how or when things will improve for the majority. While it is true that Wales, in its current form, could afford to be independent, this is not a satisfactory conclusion: child poverty still means empty stomachs, regardless of whether the decisions which lead to such poverty are made in Westminster or in Cardiff Bay.

Improvements

Melin Drafod’s paper should be viewed as a starting point rather than a conclusion. By gaining an understanding of the financial landscape of an independent Wales that mirrors today’s Wales, we can begin to consider what improvements Wales could afford to make.

Whether it is a Universal Basic Income or Universal Basic Services or anything else, we can start exploring the benefits and the costs, as well as how we might pay for them.

Moreover, we can begin to rethink our economy and its purpose. In an independent Wales, what would we choose to prioritise?

The “economy” of a country is not something in and of itself. Instead, a country’s finances reflect the social and political choices made, as well as how such choices are paid for.

Therefore, people should not worry about contributing to a healthy economy for the sake of the economy. Instead, we should think about how we can create a happy, confident, welcoming nation, where everyone can prosper.

That is the message from Melin Drafod’s paper: not only can Wales afford to be independent, of course it can, but Wales can afford to be better.

Llywelyn ap Gwilym is a member of Melin Drafod’s national committee. The think tank’s finance discussion paper will be discussed at the policy group’s next public meeting at 7:30pm, 19 May in Tŷ Tawe in Swansea. More information is available at melindrafod.cymru


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Frank
Frank
9 months ago

I sometimes think that because England was so obsessed with conquering us and has been robbing Cymru for centuries they can now keep us. However, independence would be great if we get leaders who will lead without the sole purpose of enriching themselves. We need to draw up a plan of action including a 25% share of UK assets which are currently in the hands of the English.

Riki
Riki
9 months ago
Reply to  Frank

But if you actually look at history, the English never actually “Conquered” us. From 1284 to 1400, about 70% was under control of the marcher lords. For all intensity purposes, it was an occupation akin to that of Afghanistan under the Americans. Then Owain Glyndwr restored autonomy to Wales, which is proven by the later actions of Henry Vll and his Son. Henry the Vll knew he had no right to Wales, his son however didn’t care about the place and it’s people. If Wales were under English control by 1536, what exactly were the English annexing? It would be… Read more »

Twrch ap Trwydd
9 months ago
Reply to  Riki

Why are there monuments to Glyndwr supporters in England?

Kerry Davies
Kerry Davies
9 months ago

When Ireland gained independence it was incredibly poor with incomes below half what they were in the UK and similar to those in Wales. It now has more than double the GNI per capita of the UK and over three times that of Wales.
They were also “too poor, too weak and too stupid” to rule themselves until they did it.

Frank
Frank
9 months ago
Reply to  Kerry Davies

Yes, it would be pretty grim at the initial stage of independence because we would have to undo all the English harm we have endured over the last 800 years. Someone has to do it so let it be us for the sake of the next generations.

Last edited 9 months ago by Frank
Benjiman Angwin
Benjiman Angwin
9 months ago

Ireland, Norway, both got greater wealth through lowering business taxes, getting the global market to come to them. Cymru should look to global trade, outward, rooted in lower business rates here.

Frank
Frank
9 months ago

What we need to lead us into independence is fresh politicians who mean what they say, do what they say, serve the Cymry and Cymru and not be anything like the self-serving bunch we have now.

Riki
Riki
9 months ago

Yes it can, first demand control of our gold mines to be returned to the people of Wales and its representatives. Then secondly, ask the English to stop pretending that they, and Scotland are historically and culturally British, when they aren’t. They didn’t even start to use the term on mass until the Hanoverians wanted the Germanic people to replace the actual Britons. Thirdly, let’s stop referring to the Brythonic flag that features a dragon as “Welsh”. It’s British!

Twrch ap Trwydd
9 months ago
Reply to  Riki

Why did they hold a National eisteddfod in Liverpool England?

June winde
June winde
9 months ago

Wales sill be poorer for many years just as Ireland was.

Hywel
Hywel
9 months ago
Reply to  June winde

But the tools to better ourselves would be in our hands; we wouldn’t be hamstrung by our colonial oppressors.

SundanceKid
SundanceKid
8 months ago
Reply to  June winde

Look at Ireland now.

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