Why the narrative of Wales being too poor for independence is false
Elfed Williams – YesCymru Director
The economic case against independence is infected by old thinking.
It has long been assumed, largely without challenge, that Wales is simply too small, too weak and too poor to make its own way in the world.
It follows from this attitude that we are doomed to eke out a living, subsisting and dependent on Westminster subsidies and being told what to do by the London establishment is an intrinsic part of the bargain.
The price of being a perceived subsidy baby is obedience.
Therefore for the most part we do not get to decide our own taxes or our own economic policy. We do not get to decide how swathes of our economy is regulated or how the benefits system operates. We are not in control.
Want taxes to be fairer? Tough. Want the benefits system to be less punitive? Ditto.
Independence
This state of affairs suits the Westminster establishment just fine. Indeed, it works hard to keep it this way. Its minions proactively tell us in Wales that we will never make it on our own. This message has been rammed down our throats for generations.
What they essentially argue is that as a country we would not be able to afford to pay our bills if we were to become independent.
A favourite trick of the establishment to back this up is to point to the deficit.
Now, the deficit is the difference between how much money brings in through taxation and other means, and the money it spends, on things such as public services.
According to previous figures from the Office for National Statistics (ONS) the deficit Wales would incur on day one of independence would stand at £13.5 billion.
However groundbreaking research by Professor John Doyle of Dublin City University strongly suggests that figure is highly misleading.
He concluded the fiscal gap – the difference between raised revenue and government expenditure – would actually be closer to £2.6bn.
Dr John Ball former lecturer of economics at Swansea University would argue the difference between expenditure and revenue would be even smaller.
Taxation
Prof Dyle bases this on the 2019 estimate of total Welsh economic output standing at £77.5bn. This means the deficit would be equivalent to just under 3.4% of GDP, which is a perfectly sustainable figure for a nation-state to manage.
It compares with an average fiscal deficit of 3.2% across all OECD countries in 2019.
To put this in context, the figure is also lower than the UK’s deficit in the financial year 2023/24, which stood at £121bn and is equivalent to 4.4% of GDP.
Yet nobody argues that the UK is too poor to be independent and should therefore be ruled from Paris or Berlin.
For decades Westminster has hidden how much money Wales really has through misleading accounting practices
When it comes to taxation, Prof Doyle argues some of Wales’ tax receipts, such as for corporation tax may be underestimated.
This is because many companies operating in Wales are headquartered outside the country. The money these companies make in Wales isn’t necessarily reported in Wales.
He also suggests an independent Wales could also make savings in a number of areas. One area where Wales could spend much less is on defence.
Pensions
It is highly unlikely that an independent Wales would continue forking out for the hugely expensive Trident nuclear missile system.
Then there is the issue of pensions. In 2018-19 the UK government spent £5.9bn on pensions in Wales.
While it is true that the pension liability would be a matter of negotiation post-independence, Prof Doyle has argued that it is logical for Wales to insist that the UK government should continue to pay the pensions of people in Wales who have contributed to the public purse in taxes and social insurance contributions.
After all, most people in those circumstances would only be getting back the money they have paid in.
When it comes to the question of whether an independent Wales would take over a share of UK public debt, Wales would not necessarily have any obligation to do so.
On top of all this, Prof Doyle also that the fiscal gap Wales would inherit could be closed by a combination of relatively modest economic growth, and changes to tax policy.
Ambition
The whole point of independence is that we can chart our own course. We can do things our own way. We don’t have to shackle ourselves to the failed economic policies of the past that have decimated our communities and stifled our ambitions.
A viable independent Wales is possible. Not only that, it is highly desirable because it’s the best chance we have of ensuring that our people prosper and flourish.
The Westminster establishment hides our money from us, refuses to properly invest in our communities, and then tells us we’re too broke to be independent.
When Wales frees itself from the false narrative that has been peddled we can write a very different story.
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Yeah that’s what the abusive husband says – “you’ll never survive without me” – whilst simultaneously controlling the finances. Walk away, Cymru Fach. Walk away
Referring to this as a Union is like locking a woman and her children in a basement and calling it a family.
The worst part of the myth being peddled, is that the actual people who should know better, blindly regurgitate the lies like good little Robots.
Depends on who will and how will they be leading. At the moment I want to see more engagement from the politicos across the board or we end up with a one trick pony in charge. You need to carry the people with you, not dragged.
It’d be nice to get a clear definition of what will be considered ‘fairer’ taxes, and who gets to decide. Also, which pensions are we talking about negotiating here, and does it include public sector pensions?
You here it from English people all the Time WE KEEP YOU and English people believing that if there was a vote for them to ditch Wales out of the Disunited Kingdom they would vote because the English media tell them a pack of lies and they believe it and my answer to it is IF ENGLAND KEPT WALES THEY WOULD HAVE GOT RID OF US ALONG WITH SCOTLAND AND NORTHERN IRELAND fact is the 3 Celtic nations keep england we have never been treated in this God foresaken union we must get out with a sense of URGANCY
I do laugh, when the English move here, they see how bad they wrecked Cymru.
Also, I just say to those in London, “I can show you in one map how bad it is in Wales” they say go on, I just show them Google maps and the road network and it shows only two major roads and they both leave Wales
‘It has long been assumed, largely without challenge, that Wales is simply too small, too weak and too poor to make its own way in the world.’ An oft-repeated imputation, for sure, but one which as a lazy generalization can be readily dismissed; you only have to look at that small surviving relic of the ‘Holy Roman Empire’ Luxembourg, which is one of the most prosperous countries in Europe. Denmark’s pretty small too, but seems to do well enough. And, closer to home and with something of a similar history to our own here in Wales. there’s the Republic of… Read more »
It took the Irish republic half a century to begin to provide a decent standard of life for its people due to a combination of economic colonisation from Britain due to the Irish pound being linked to sterling until 1979 and a government that was ultra conservative in terms of the economy. It wasn’t until Ireland joined what became the EU in 1973 that its economic fortunes started to improve. For Wales, I think the Nordic model is one that would be my preference, which is particularly aposite for the times in which we live.
Having visited Ireland on numerous occasions – the first time being 1974 just after both the UK and Ireland had joined the EU – my impression coincides completely with what you say here in your post. My second visit to Ireland was in the summer of 1980 when the difference, only six years later, had become palpable.
I recall commenting on this swift change to a farmer in western County Cork, who attributed it, at least in the agricultural sector, to having become part of the Common Market.
Ireland benefitted massively from joining the EEC as it was heavily reliant on agriculture and the EEC was keeping farmers very happy at the time with huge grants that led to massive over-production. Membership allowed Ireland’s farmers to modernise and invest in their farms. One big difference between Ireland and Wales was represntation at EEC/EU level, with Ireland having far more Euro MPs than Wales, despite the populations not being that different. Ireland has 13 MEPs, Wales had four.
Agree absolutely – that was very much my impression too.
So we swap our dependence on Westminster for dependence on Brussels !
Still we get the same tired and weary mendacious Brexiteer blather!
The difference between Westminster and Brussels is that we’re all formally and legally subjects of ‘the Crown in Parliament’ in respect of the former, whereas the UK was a participant in respect of the latter.
And, moreover, as one of the larger member states we had the additional clout which resulted from sheer size, an advantage which politicians of a previous era like Thatcher and Brown were adept in utilizing.
Totally agree with this article. Wales needs to free itself of Westminster and it’s narrative. I look forward to the day when Wales is free to make it’s own way in the world, when the money made in Wales stays in Wales and when we start charging England realistic prices for all the electricity and water we supply them with.
Yes, of course, Cymru could and should be independent. But it really depends on how independent the people of Cymru want to be. Do we want to retain the wholly discredited new-liberal capitalist model and the poverty it engenders, membership of NATO and the EU, nuclear power stations, armaments factories, the Anglo-Graeco-German monarchy, foreign-owned banks, absentee ownership of our land and other assets, the appalling mismanagement of our society and the economy etc? Not to forget the sacrifice of our environment. If so, what’s the point? The first priority is for our citizens to better understand how the economy works… Read more »
In the paper, I also proposed some strategic priorities post-independence…
Ask yourself, can you imagine either the UK Labour Government or its local mini-me, offering these, let alone achieving them?
We need governments that meet real needs, not ones that merely cater to the wants of the already well-endowed or the interests of Big Business.
I would love nothing more than independence for Cymru, making the decisions that are right for us as a country not the UK as a whole allows for us to be much more specific in the course we set ourselves for the future. However, my big worry is the leadership required to take us in that direction. Looking at how Welsh Labour have done since devolution makes me worry we’d have an inept bunch in charge, and have a good chance of bungling it. But you know what, with the start Labour has had taking over from the Tories, I… Read more »
We tend to get the politicians we deserve, in which case it might be an idea to really consider our options more when it comes to vote.
This is another of the myths, that the current political leadership would be the same leadership that ran an indie Cymru. Different political jobs attract different types of politicians. Those happy to decide when your bins are collected are not the same as those who want to negotiate world peace. This is why devomax is needed, whether you support independence or not. More power in Cardiff Bay will attract more ambitious politicians, in many cases from the diaspora who had to leave to satisfy their ambitions.
The Welsh Labour mafia are just as guilty in holding Wales back as the Westminster establishment. Now that Labour are in power on both sides of the M4 there is no excuse for them not to push for the full devolution of wealth creating powers, and economic development. Wales needs capital growth, white collar jobs and not just manual labour and call centre jobs. But then its not in their interests to do that, because they want voters to keep on blaming all their woes on the Tories.
Of course pensions would continue to be paid by the government who collected the contributions. No-one suggests the liability for UK citizens who retire to Spain should transfer to the Spanish government.
Can we afford not to be independent? Since I first voted in 1979 successive British governments (especially Tory ones) have underfunded our public services, dramatically increased the numbers of children living in poverty, and damaged communities across Cymru. In Cymru we lack the knowledge (and interest) in what has been done to us over many years. We are complicit in our own demise (the Welsh Labour party are most guilty of this complicity). It is only a matter of time before the Tories and their entrenched marketisation beliefs are re-elected in Westminster. We need to leave the union NOW before… Read more »
Exactly right, Welsh independence is more a damage limitation exercise.
Financial aspects aside, Britain has turned itself into an international laughing stock on the world stage.
It’s grossly unfair that Wales has to be dragged along with their image.
In which case the Tories have won because entrenched marketisation has been economic orthodoxy since Thatcher came to power in 1979. It’s very clear that the current Labour government in Westminster follows a the same economic philosophy, which is why children still starve and pensioners are about to freeze.
Time to be at the trade table and cut out the middle man