The downtrodden Welsh

#Don't the Welsh do downtrodden well.

Wales is the poorest of the UK nations.  indeed the poorest of the UK regions.  Wages less than the UK average,  productivity lower and profitability of Welsh businesses lower. Wales so poor that it has handouts from Europe.

Never mind it could be worse.

Well not much. 200000 Welsh children in poverty.  30000 in extreme poverty.  Education standards below average.  Local councils closing amenities.  Homelessness and rough sleeping.  The problems with the health service and social care.

I know,  but its the economy.  What can you do?

Doesn't it drive you crazy.

Why this passive acceptance?

#Wales the last Colony.

They take resources that could have been used at home
They make laws on our behalf.
Their people cross our borders without control.

They decide the direction of our lives.

The only answer is to take back control.

Familiar. The arguments for Brexit

No. This is Wales relationship with England.
The difference is that Wales has never had control to take back.
Wales has always been subservient to England.
Wales is England's last colony.

But Wales has its own government. So did the colonies, as with Wales, overseen by Westminster.
Wales sets its own budget. So did the colonies, as with Wales, within an allocation from Westminster.
Wales can make its own laws, So did the colonies, as with Wales, only those allowed by Westminster.

Wales functions within rules dictated by Westminster.
Wales has its own Colonial Governor. Who could doubt the Secretary of State, was Westminsters representative in Wales, rather than Wales advocate in Westminster. The present one is still practicing  three steps behind.

Ha! but Wales is a partner in the United Kingdom.
There is no partnership. There is no United Kingdom. There is England and the rest.
The UK is governed from London, the capital of England.
The UK laws are made in London, the capital of England.
The financial  centre of UK is in London, the capital of England.
England has 533 members of the UK government. The rest has 117.
England has a population of 56 million. The rest has a population of 10 million,
lets stop fooling ourselves. As the advert says, you do the maths.

The colonies have broken away now. Except for Wales.
Of the UK countries Scotland and N Ireland have get out options. Sadly not so Wales.
Scotland has legal routes to independence.
N Ireland has the option to unite with Eire to separate from UK, if its people so wish.
Wales has no such route.

However all is not lost. The colonies gained freedom against much resistance. To join them Wales must desire it. Have different horizons. Greater ambitions. Confidence.
It must aim for the best health care, instead of just muddling along. That the children in education in Wales can look other countries children in the eye, rather than looking up to them. That earnings in Wales are no longer at the bottom of the league and Wales industry can compete with the best, rather than languishing with worse.

Wales cannot have these ambitions as a colony.
We start by demanding rather than pleading. By having rights rather than offerings.
By having the confidence that we can make it on our own, just as others have done before us.

Wake up Wales.

It will take more than marches to bring Welsh Independence.

Scotland has a nationalist party in government, supported by a pro Independence Green Party.

There is constant polling close to a majority by Scottish voters.

The subject of Independence is rarely off the agenda in Scotland.

Contrast this with Wales.

An anti Independence, pro Unionist Wales government.

A stagnant and ineffective opposition in the ‘  pro Independence ‘ Plaid Cymru.

The main campaigning group, Yes Cymru, with one full time employee, no office and no HQ.

A largely apathetic public.

What hope for Independence in Wales.?

In spite of this, support for Independence remains remarkably strong.

The problem remains of how to build on it.

In search of a Unicorn. Seeking a federal UK!

Some in the Wales political elite are fearful of Welsh Independence. They have no confidence in Wales and the abilities of its people.

They still need the comfort of Wales dependent on the UK.

They cling to the illusion that Wales can negotiate this halfway house of federalism, in which Wales can reach its economic and social potential, no longer needing the begging bowl, but just in case, it has the federal UK to hold it's hand.

One Welsh Labour minister called Independence ' a dream '. preferable to the nightmare of a federal UK.

In this search for ' federalism ' and before the arguments on a constitution, on representation, on powers and responsibilities, on finance and legislation. Before we find how to start and agree a process and get agreement of the proposed parties. And while we contemplate the unimaginable time scale. There is a difficulty to overcome.

England must become a nation.

Rape of the Fair Country. The next episode

We take a short interlude from the marathon that is an Independent Wales economy, just to take a quick look at the latest attempt to exploit Wales.

Renewable energy.

The latest, in a long line of industrial exploitation of Wales workers and resources.

Rape of the Fair Country, a 1959 tale by Alexander Cordell, describes the iron industry in the 19th century.

An industry that left a few, the iron works owners, very rich and the workers  poor. With no wealth gain to Wales.

It was for Wales only a  job creation scheme.

Then came the steel and coal era.

Wales was a leading world industrial powerhouse.

Steel and coal made a few, the coal and steel owners, very rich and after nationalisation, made huge profits for the UK government, but left Welsh workers poor.and no wealth gain to Wales

It was for Wales, only a job creation scheme

The economy of an Independent Wales.

Wales wealth and how to get it,

Wales' abundance of energy. And its part in the economy.

Energy.

To recap.

An Independent Wales can raise the money to invest in its future Plan, by running a deficit.

It can sustain that deficit as a sovereign nation, with a sovereign currency.

As such, it can guarantee its financial commitments.

But not any old deficit, but managed spending to specific aims that will improve the Welsh economy and the wellbeing of its people.

Energy is the first area that government spending is to be directed.

Not just energy, but green renewable energy.

We start here for two very good reasons.

It is central to an Independent Wales economy.

The natural resources to generate such energy, exist in abundance in Wales.

This from the Engineer, a leading UK engineering publication,

The Celtic Sea and coastal water around Wales have a higher concentration of renewable energy resources, than perhaps anywhere else on the planet……..

Wales' geography, particularly tidal resources, means that every form of marine energy is abundant.

This is reinforced by initial studies by Carbon Trust, Marine Energy Wales and THe Crown Estates, which found that 14 GigaWatts of capacity was available through, Offshore Wind [ 2 GigaWatts ] Marine and tidal resources [ 8 GigaWatts ] and floating turbines [ 4 GigaWatts ], while, the Crown Estates finds, a further 20 GigaWatts potential from floating turbines by 2045.

So 14 GigaWatts  capacity were already identified before Independence. That is 50% more than Wales total energy usage, from all sources.

Wholesale energy prices fluctuate daily, the average price projection by Statsta 2024 to 2040 shows a price of £80 per MegaWatt/hr, over that period.

That would value our 14 GigaWatt capacity at £10 billion per year.

The economy of an Independent Wales.

Wales wealth, How to get it. How to spend it ?

Wales currency and how to get the money to start?

In earlier posts, initial , but not comprehensive areas were identified to kick start the Wales economy and grow its wealth. 

Energy, research, development and innovation, together with technology and skills training were targeted for initial areas of investment.

In addition, public services and affordable housing were also prioritised as necessary for the nation's welfare and to start the improvements to the public well being.

The choice of these areas is not to minimise the importance of issues such as the environment, state pensions,welfare, taxation changes and more.

As we shall see the money spent in the identified areas, does not exclude spending elsewhere.

The new Plan for Wales is not based on outdated policy thinking.

Wales currency.

The economy of an Independent Wales

Wales wealth. How to get and how to spend it

Wales currency and how to pay for the investment.

[ The cost of border and trade and currency transaction costs ]

So if you have been following, a £31 billion investment commitment.

Before we get to that however, the remaining costs of Independence.

Border and trade costs.

It often appears as headline news when someone offers a report, usually an ‘ academic ‘ report,  into the costs of Independence.

There is however a noticeable, or perhaps not so noticeable, shyness about extolling the very many benefits of Independence.

There are so many figures, by so many different ‘ studies ‘  with so many assumptions,  membership of the EU, or maybe not, will there be a hard border, what trading group will Wales belong to and with what tariffs.

So many assumptions as to make these studies at best questionable

The economy of an Independent Wales

Wales wealth. How to get and how to use it,

A Wales Plan.

A major contribution to the SNP losing the 2014 referendum, was confusion in its future plans.

In the face of coordinated attack from the Westminster government, the media and vested commercial interests, it often showed a lack of clarity.

While a majority of the SNP membership wanted Scotland to have its own currency, the leadership, particularly Alex Salmond, argued for Scotland to retain the pound.

This uncertainty was unhelpful in a close campaign, it caused some in the financial sector to threaten to move from their Scottish bases and it handed the negotiating initiative to the UK Treasury.

The other problem was the Scottish government placing oil at the centre of its economic plan

The opposition to Independence made issues of the ownership and revenues from North Sea oil, the volatility of prices and the future of supplies and the future demise of fossil fuels.

All playing into the anti Independence narrative. 

 

Recently another ‘ academic study ‘, this time into the costs of Ireland unification.

The costs, they say, would be between £7 billion and £17 billion, although with such a variance you would think any respectable  academic wouldn't want it published

It is arrived at using the same unreliable and implausible  data that puts  N.Ireland, with 2.9% of the UK population, responsible for 23.7%  of the UK budget deficit.

£9.4 billion against £39.7 billion [ 2020 Government Expenditure and Revenue figures ]

The study also failed to take into account the savings of one united government, no border costs, a single financial and taxation system and the ability of the N.Ireland economy to grow in line with the Republic, rather than being restricted by a failed UK system.

No matter the veracity of the headlines, these are the forces coming Wales way as it nears its bid for Independence.

So ignore the doubters, the hesitaters and the users of dodgy data. Wales has a plan, a credible plan, a considered plan and a transparent plan.

A Plan to benefit Wales.

The economy of an Independent Wales                       

Wales wealth. How to get it and how to use it.

The New  Wales economy. How to start.

Wales has had its referendum, next is the transition.

The transition period, two years, was agreed between Scotland and the UK government, prior to their referendum.

This transition is when Wales draws up its necessary initial legislation in areas such as, currency, Central Bank, taxation. Although many others will be a continuation until a later date.

It will also be the time in which any agreements with the remaining UK [ UKr ] will be made.

This is a time for lawyers, civil servants and the politicians.

These posts concentrate on post transition. When Wales becomes Independent.

How does Wales start its economic journey?

Prior to the declaration of Independence.

Prior to the transition or referendum, Wales would have set out its economic plan.

How else would it have won a referendum?

This blog's suggestion is that it would go something like this

The economy of an Independent Wales

                or.

Wales wealth, how to get it and how to use it,

Currency and the Federal Bank.

Before Currency and the Federal Bank, we need to look once again at Wales ‘ so called ‘ budget deficit, for they are connected.

Wales budget deficit. Does Wales have one, how much is it and does it really matter.

With regard to the first two, no one really knows.

As we have previously seen, but briefly repeat here, the data upon which Wales deficit is based is decidedly untrustworthy.

The deficit repeatedly cited is based on a financial report by the Wales Governance Centre.

That, in turn, uses the data of the Government Expenditure and Revenue Wales

[ GERW ]

The authors concede that very little financial data is collected on a Wales specific basis, but rather England/Wales, or UK wide.

GERW is not a conventional accountancy process, indeed it is argued that 90% of the figures used have no verifiable audit trail. 

Spending for Wales is generally allocated on a population share basis, whether or not that can be justified.

Revenue income is collected on a UK wide basis by HMRC. It is then disaggregated to get Wales figures by, in the words of HMRC, using estimates, assumptions and adjustments.

HMRC concedes that Wales revenue figures are an underestimate, as some taxes, mainly corporate taxes,of businesses in Wales, have been allocated to the HQs, many of whom are outside Wales.

They however have failed to estimate the loss to Wales revenues.

The government may argue that GERW is an approved system, but as Prof Murphy of Tax Research argues, if the figures used by the system are suspect, then the outcomes must be suspect.

In Wales' case, indeed they are.

The outcome frome Wales financial analysis, by these methods, find that Wales has a budget deficit of £13.7 billion.

In the same period the UK budget deficit was £39.7 billion.

This means that Wales, with 4.8% of the UK population, is responsible for 35% of the UK deficit.

It makes no sense.

The economy of an Independent Wales.

                       or

Wales wealth, how to get it, how to use it.

It's the economy stupid. So said James Cavelle, Bill Clinton's campaign manager, when asked what they should be stressing.

So it is with Wales in Independence

Wales punches above its weight in many areas.  It can point to world champion fighters,Olympic and world athletic medalists. cycling champions and grand slam rugby champions.

It offers to the world the very best in music, arts and culture

It has stunning scenery, beaches, mountains, rivers and lakes.

It has innovative and resourceful people. 

In spite of all that. Wales suffers economic and financial shortcomings.

Its people are suffering from poor public services, health and social care, education, housing and low wages.

Its businesses from lack of investment and poor productivity

The Welsh government is powerless to change this dire situation.

All the improvements Wales seek cannot be enacted in the present system

It needs more money. It needs to grow the economy..

Under the present system of devolution, the Welsh government cannot grow the economy, they can only manage it. [ The Silk Commission on Devolution ].

Devolution cannot grow the Welsh economy.

An Independent Wales can.

This will show you how.

The Future of Wales Report. [ Or take your pick ]

The Independent Commission on Wales Future Constitution, has issued its final report, so we can all stop holding our breath.

It's a wordy document. 135 pages

It has an impressive bibliography referencing a seemingly endless supp;y of publications.

It has had contributions from an equally impressive list of worthies.

And it has an expert panel

It was enough to almost overwhelm. Almost, but not quite.

What was striking, that in spite of this, they were unable to come to conclusions.

Not just that they were unable to come down just a teeny bit in favour of one option, but in most areas.

The report is heavy, to use the phrase of the economist Arun Bose, on errors of reasoning.

It also contained a fair share of contradictions and also, I'm afraid, substantial errors.as we shall show.

It is beyond the scope of this modest piece to analyse in detail and the intention is to concentrate on the Commission's approach to the Independence option, but it would be remiss not to have a little comment on the other options and the shortcomings of the report.

As the report is 135 pages long, with apologies, the response is inevitably lengthy.

How can Welsh Labour govern, if it doesn't understand the basics.

A lifetime of being a very small part of the UK. A very small part of UK Labour. And for the trade unionists, a very small part of the UK trade union movement, has led Welsh Labour to the mindset of being very small.

The government of Wales, which has been exclusively Welsh Labour. No more than that of running a county council [ no offence to county councillors ].

.

They are given a grant together with limited ability to raise finance. Just like a county council.

They set up little committees to divide it up. Just like a county council.

They share it between areas for which they have responsibility. Just like a county council.

And for their peace of mind they have someone above them to blame. Just like a county council.

 

They have persuaded themselves, or have been persuaded, that Wales cannot survive on its own

They argue that Wales is only safe if it is ‘ protected ‘ by belonging to the UK Union.