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.