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Wales is an energy colony – we’re poor because our dividend is drained out

14 Apr 2019 5 minute read
Photo by Constellate on Unsplash

Jonathan Edwards, MP for Carmarthen East and Dinefwr

The idea that Wales is too poor to be independent has been ingrained in the Welsh national consciousness as a result of years of the both Tories and Labour repeating a condescending narrative.

According to them, Wales is an economic basket case who is lucky to receive the crumbs offered to us by Westminster.

Looking at the fiscal deficit that we face in Wales – that is the gap between the money we bring in through taxes and our reliance on transfers from Westminster via a highly centralised taxation system – it’s easy to make such an argument.

Of course, the hypocrisy at the heart this claim is that the failed economic model of the British State is the direct cause of the situation we are currently in.

When Labour and Tory politicians tell us that Wales is too poor, too small and too stupid to be an independent country, what they are telling us is that the people of Wales are destined to endure relative poverty for eternity.

The real message is: vote Labour and Tory to keep Wales skint.

Over the years, I have lost count of the conversations I have held with people bemoaning the pillage of our country’s resources. As the great Phil Bennet roused the Welsh national team before the Grand Slam decider against England in 1977:

“They’ve taken our coal, our water, our steel. They buy our homes and live in them for a fortnight every year. What have they given us? Absolutely nothing.”

The common perception in Wales is that post-industrialisation has led to the destruction of economic wealth in Wales, reflected in our current GDP statistics.  Sadly, it is not hard to highlight this point when we know that the communities in the west of our country are designated amongst the poorest in the whole of the European Union, whilst inner London, at the other side of the M4, is the richest by a country mile.

However, none of this is inevitable.


We often, quite legitimately hear about monetising Welsh water exports, but let’s look at another example – Wales is the fifth largest exporter of electricity in the world.

In 2016 Wales generated 38.8 TWh of electricity and only consumed 16.1 TWh. This means that we exported 22.7 TWh – that’s just less than what the whole of Scotland consumes in a year.

Furthermore, Wales is well on the path to reaching its target of 70% of electricity consumption from renewable sources.

Canada is the world’s largest exporter of electricity at 64 TWh; Germany 51 TWh; Paraguay 48 TWh; France at 42TWh.Then comes Wales, placed above energy rich Norway and its $1 trillion sovereign wealth fund built on surpluses from its energy policy.

The British State as a whole isn’t even in the top ten. The reality is that most other countries are net importers of electricity or produce little for export.

The fundamental problem is that our success in producing vast amount of electricity has no monetary value for our people – again, much like our water exports. We are therefore effectively just a giant electricity power plant for another country.

The only economic value for Wales comes from construction, operational and maintenance jobs, with the real dividend being drained out of our country with the end-product.

The time has come for Wales to use our strength and gain control over all aspects of energy policy. The first draft law I moved when I became an MP called for this, which was ruthlessly voted down by Labour and the Tories at the first hurdle.

It’s time we made our strength in electricity production work for us. With a bit of vision, we could combine a radical agenda aimed at tackling climate change, economic regeneration and social inequality.

Dead hand

A fundamental question Labour and Tory politicians must answer is how can a country ranked fifth in the world in terms of electricity exporting see a third of its people live in fuel poverty? If that isn’t a legacy of colonialism and exploitation, I am not sure what is.

The one snag in the plan is that none of the generation assets – in other words, the power plants – are currently owned by the people of Wales via our own national government. This must change.

Plaid Cymru’s proposed Ynni Cymru model would provide the vehicle for monetising assets either via taking control of existing electricity generating assets or building new ones.

Let’s just take our 22.7 TWh of currently exported electricity – at a wholesale price just shy of £64.76 per MWh (that’s a millionth of a TWh) this electricity could be worth millions to the Welsh economy, if the assets were owned by the people.

Even if we don’t nationalise existing assets, the potential wealth of our natural renewable resources is huge.

Take the much-mooted tidal lagoon in Swansea, for example. The Welsh Government could directly fund its development, as opposed to begging the British Government to finance the scheme via the private sector, which ends up fleecing consumers.

If it’s a choice between a new M4 or a series of tidal lagoons in the hands of the public – it’s a no brainer. The environmental, social and economic benefits would be huge.

There is a radical and bold alternative path for Wales if we show confidence in our collective ability as a nation.

It’s time for the people of Wales to remove the dead hands of both Labour and the Conservatives. The salvation of our own country is in our own gift, if only we would open our own eyes.

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