What would the economic opportunities and benefits look like for an independent Wales? Last week saw the unveiling of a governmental budget for Québec, the only officially French-speaking province of Canada. The Parti Québécois released its forecast of the revenues and expenditures Québec would expect in the first year after declaring independence from Canada.
The publishing of such a fiscal document in Québec should raise more attention in Wales, especially as it shows that Québec would find itself in a comfortable, even slightly better, financial position if it were to separate from Canada. Independence is not only viable in its case. It also presents an opportunity for Québec to reinvest in local services rather than fund federal government projects, often misguided or misdirected in relation to the needs of the Québécois. But what about Wales?
Québec compared to Wales
Analogies between the Québécois and the Welsh are inexact. While both have achieved legislation recognising their languages, Québec is the better off of the pair. Québec has policy and (limited) fiscal control over its energy sector, forestry, agriculture, fishing, mined resources, health services, education, and immigration. Québec is also federally recognised as a nation, distinct from the other provinces of Canada.
For Wales, some marginal policy autonomy has been granted to the Senedd over the years. But taxation and revenue retention are either the jurisdiction of the Treasury in London or the UK sovereign’s Crown Estate.
In its published budget, the Parti Québécois has demonstrated that an independent Québec would be a nation of a fiscal size comparable to Norway, Sweden, or even Switzerland. An independent Wales would not be. But what could it be?
An independent Wales
Those who wish to see a brighter future for Wales, in which it sculpts its own path in the world, and paddles its own canoe, are familiar with the accusation that Wales is “too small and too poor” for self-governance. The former is a non-issue, given that Wales is the 27th largest country by population when compared to the 44 sovereign European nations. But is there a case to answer for the latter, that we could not afford an independent Wales?
Wales has a GDP of over £75bn. The UK treasury assigns an annual grant to the Senedd of only £24bn, but attributes expenditure on Wales as totalling £45bn. As evidenced through the misassigned £5bn to Wales of HS2 – a rail project that goes nowhere near Wales – the UK treasury is, at best, guilty of some dubious accounting.
All this underhanded shuffling of money by the UK government results in cash made in Wales potentially being spent on the construction of a new gigafactory in Somerset, or invigorating the steel industry of North East England. This is doubly infuriating as Wales has the highest rates of child poverty in the UK, and could clearly benefit from reinvesting its money in local services, to better the lives of its people.
Beggar thy neighbour
Taking back control of money currently being sent to London would boost Wales’ finances. If an independent Wales were to shoulder a proportion of the UK’s £2.5tn debt, the country would acquire a national debt of £123bn.
Assuming GDP remains stable and the new Welsh Government increases spending to cover this debt, inflation, and ongoing commitments from the Senedd and UK Treasury, Wales would, in only eight years, have an economy comparable to the EU member nations in the Baltic. Despite starting off in debt, in less than a decade an independent Wales could reduce its deficit by balancing the proportion of its debt to its economic output. This is not the definition of “too small and too poor”.
Sovereignty is not only relevant to the betterment of the economic life of people living in Wales, it has become an urgent necessity. Nobody would ask their neighbour to manage their family budget, while being aware that the neighbour might be stealing from them. So why does Wales continue to permit this of England?
An independent Wales taking charge of its own finances and economy is a sovereign nation making a choice based on its own interests.
