Independence – No not like North Korea, or Brexit for that matter...
I think the debate on independence in Wales, and constitutional reform more broadly, is more often than not confused because many, even most of us, are not clear what we mean by independence; and those opposed to the idea often equate it with the most isolationist versions we can see in the world today. Some of us (me included) can end up overcomplicating the question…and the answer. None of this is helpful.
So, at the end of this blog I try to set out, in I hope more simple terms (for me at least!), what independence might mean and its various flavours.
They are perhaps on a spectrum ranging from isolationist North Korean type independence (a bit like Brexit) at one end, through confederalism, federalism to the current arrangements in Wales and then at the other end of the scale a more “colonial” pre-devolution arrangement.
However, I want to start by responding to some of the “reasons” many offer as to why Wales cannot be independent. All of them are flawed – and often based on the premiss that those wanting independence want the “North Korean” option!
Why do you want borders between Wales and England?
Few if any, of those people arguing for constitutional change, are suggesting we need or want a hard border with England. Most mature independent sovereign nations have arrangements with neighbouring countries that attempt to make movement and trade easier. We all know that in the EU there are in effect no borders as a result of the Single Market (SM), Customs Union (CU) and Schengen; people and goods can and should be able to move freely.
People should also recognise that Britain and Ireland have operated a “common travel area” for movement, employment, pensions, etc for decades and which pre-dates the Common Market and the EU. Today, special arrangement has been established for Northern Ireland to retain, in effect, its access to and membership of the European Single Market.
I want open borders with England and Scotland, with Ireland (both bits – but eventually joined!) and with the rest of Europe. In fact, like EU countries experience via the Single Market and Customs Union. Our economies are interlinked and so we have to acknowledge that interdependence (again like in the EU). Brexit is the exact opposite and is much more like North Korea and now many more people can see how utterly irresponsible and economically damaging that con was!
The arrangements now enjoyed by Northern Ireland illustrate what is possible in the short term, even with the UK in its isolationist delusion.
There is too much cross-border Infrastructure for Wales to be independent!
Firstly, does that apply to England as well? Also, anyone who has travelled by train, let alone road, in Europe will quickly conclude such an argument is without substance. For example, just look at Basel, a city not even in the EU, yet its local tram network straddles three countries (two of which are in the EU!)
As in normal elsewhere in the world, where cross border infrastructure exists (and it is pretty normal) the countries involved each share responsibility for its management. This is very different for Wales where much infrastructure here (not just cross border) is the responsibility of politicians and bureaucrats in Westminster/Whitehall and so often overlooked. (This long read re rail really exposes the problem! The UK rail industry, Wales, HS2, Trans Pennine Upgrade, Network Rail spend, etc… – Mark Barry (swalesmetroprof.blog) )
Wales is too small and can’t survive on its own!
Let’s start with some classical data re economics, to head off the “Wales is too poor/small” deceit. Wales’s GDP in 2022 was approximately £85.4 billion, in current prices. That’s approximately £27,500 per capita (or $34,000 per capita) – about 75% of the UK. In comparison, using data from World Bank, Italy was also $34,000, Poland $18,000, Portugal $22,000, Slovakia $19,000 and the world average about $17,000; whereas the UK as a whole is $46,000. Wales also has a trade deficit of about £3bn per year (UK has an £80Bn+ trade deficit).
Wales is clearly not a poor country in global terms and data shows that many other countries have a smaller GDP/capita. I set out some of this analysis (now slightly updated) in a 2022 blog re the failings of Westminster/Whitehall
Using another more local measure, the 2019 Government Expenditure Review Wales (GERW) analysis indicates, that using UK Treasury data of tax and expenditure (which is more of a “management accounting” exercise), that Wales generates tax revenue of £27BN (approx. 36% of GDP ) and has expenditure of £40.1Bn, leaving an implied deficit of £13.7BN.
However, they acknowledged the notional HM Treasury fiscal deficit Wales has with Westminster, whilst material, is also not a true reflection of what Wales as an independent nation with its own tax and spend policies would sustain.
Another analysis provides a contrasting assessment based on an independent Wales. In 2022, Prof Doyle of Dublin city University published a paper setting out how Wales’s fiscal deficit is misrepresented in most debates – and that the fiscal gap is neither as big or unmanageable as some claim. Rather than the £13.5Bn often quoted, Prof Doyle sets out the rationale and supporting data and assumption for a manageable deficit of only £2,5Bn.
As I set out in another blog, the “fiscal deficit” is likely to be materially smaller than many assert, as an independent nation, all relevant tax would be recorded in Wales and costs currently allocated to Wales like HS2 would not, and matters such as Crown Estates and the revenue it generates would be for Wales to manage. I am not underplaying the challenge…but we do need some classical honesty about that challenge, rather than some hand waving gestures and rhetoric insisting that such challenges are some how uniquely insurmountable in Wales.
One also needs to remember that the UK Government, like most independent nations, has its own central bank, and so can “print” money (via the Bank of England) and/or borrow (eg via bonds) and run a large budget deficit. Wales has none of those powers in its current constrained constitutional condition.
For example, over the pandemic the UK Gov (as most nations did) borrowed an estimated £500Bn and public sector net debt , the amount borrowed over the years, was £2.3tn at the end of November 2021, or 96.1% of GDP. That was the highest debt-to-GDP ratio since March 1963, when it was 98.3%.
The simple fact is Wales is not too poor to be independent. In fact, it appears more capable of developing a more inclusive, equitable and sustainable economy and one in balance with nature than many others, if only it had the powers to do so!
Powers
It is also clear that current fiscal powers and their discharge arrangements via Westminster/Whitehall does not serve the UK well. This is unsustainable. Perhaps, the only positive of Brexit is that it exposed how dysfunctional Westminster and Whitehall are from a UK perspective.
For example, it is pretty clear that major investment decisions related to essential economic infrastructure (esp. rail) are made by a small number of senior officials and politicians in and around Number 10, Whitehall and The Treasury. This is one of the reasons I believe, why capital spending per capita is typically higher in London than anywhere else in the UK (and the figures for Wales are overstated). So, it’s no surprise that higher GDP/capita has followed that investment, with everywhere else in the UK appearing to lag behind, so exacerbating national and regional imbalances in the UK economy. However, to note I do have serious concerns about how we calculate GDP – especially the omission of so many damaging negative externalities.
Figure – From HMT Capital Spending per capita
Without localising powers, funding and yes accountability across this Island, we can never “level up” and as Marquand set out in his famous 1936 book, “South Wales Needs a Plan”, the economy of southeast Wales has needed levelling up since the 1930s. I touched on this re rail in a recent blog>> Wales, Metro, TOD & Devolution… – Mark Barry (swalesmetroprof.blog)
From a Welsh perspective, matters re energy, water, rail, the Crown estate, etc need to be devolved and our fiscal systems (which are flawed anyway re GDP calculation) fail to properly show where value is created on this island.
The stark reality is that devolved governments in the UK have very limited power – and then mainly over “spending departments”. For example, WG’s biggest responsibility is for Health, which is well over half its budget and the “needs” of the NHS in Wales are greater than the UK Average (Wales has an older, sicker population and incoming retirees); yet its spend via Barnet is linked to how much UK Gov decides to spend in England. This is suboptimal. WG has virtually no major fiscal levers to really impact its economy or develop more progressive taxes to support more environmentally responsible and sustainable economic growth – or even to influence such on a UK basis.
So, for me.,….
So, what are the options for Wales and what kind of independence is practical. I hope, simply, set out what I think is best below.
But first, worth looking at a very good article by Glyndwr Cennydd Jones that appeared in the Summer 2021 edition of Agenda (IWA) which summates his earlier work and the various constitutional options before us. The Welsh Government also set out some of its thinking re a re-invented union. More recently the Constitutional Commission opined and concluded in January 2024 there were three valid options for Wales; enhanced devolution; Wales in a federal UK; and an independent Wales.
This issue is also alive in the UK Labour party. Gordon Brown visited the question and helped prepare a range of proposals; although I sense they were watered down somewhat by the command-and-control tendencies in the UK Labour party. It was a good attempt, but did not go far enough for Wales and left room for our Constitutional commission to opine.
There is clearly a space, a big space, for a mature discussion to help shape a major constitutional upgrade of Britain. I would argue there is no alternative, given the dysfunction at the heart of the current UK state. As I set out later, this is for me, is entirely consistent with the idea of an independent Wales; it may in fact, be a necessary enabler.
The real constitutional options for Wales…
I also think there is a better way of setting out the options for Wales (including those set out by the “Comisiwn”) and in a way that better delineates what independence means. For me, the constitutional options for Wales can be characterised as follows (and I know that other flavours and interpretations exist):
- Isolationist independence. Like North Korea or perhaps even like Brexit – hard borders, exceptionalism, ethno-nationalist and in the case of Britain also based on the illusory self-congratulation, deference and pageantry of 19th C imperialism
- Confederal Independance – Perhaps like EU member states; so France or Germany, and also smaller comparable countries like Latvia, Lithuania, Slovenia, etc. This is the more mature modern manifestation of independence; nation states working together with collective responsibility, areas of agreed pooled sovereignty, few if any border restrictions re movement, trade, etc and alignment in many policy areas like the environmental protection, fiscal management, social protections, etc. In a reformed UK Union, sovereignty would reside in Cardiff, London and Edinburgh – but pooled where parties agree (and would I suspect cover many areas)
- Federal Structure – Similar to “2”, but all sovereignty resides centrally – in our case in London. This is much more like a US state and other more traditionally federated systems (so like Australian states or German Lander, etc). This would be far better than today and have to include the regions of England as well
- Like the current powers the Senedd and WG enjoy today – very limited administrative devolution in some areas, but no major fiscal or macro-economic powers, and limited influence over many aspects of investment in essential economic infrastructure like rail, energy, water
- No independence at all. Like a colonial outpost – so like pre 1997 devolution Wales and certainly pre-Wales Office of the 1960s.
No-one wants “1”(do they?). Yet many characterise Welsh independence as some sort of exceptionalist wall/barrier building project of that type. For me it’s nothing of the sort and perhaps my views in many ways resonate with, at least in some degree, the model set out recently by Mark Drakeford; sovereignty retained and pooled.
I favour this approach, a confederal “independence” as manifest in “2” above, so that Wales’s relationship with England and Scotland is more like that of France to Germany, Belgium, Lithuania, Slovenia, etc. in the European Union. They are sovereign independent states but have pooled much (and this varies). A single central bank, alignment in some aspects of fiscal, environmental and trade policy, etc and a free trade area called the Single Market and a Customs Union. They have national parliaments and a European parliament. Ideally the constituent members of the UK union can all rejoin the EU on that basis!
I suspect many in both Plaid Cymru and the Wales Labour party support this type of “independence”. But that reality gets lost in semantics. I am also aware there are many in Welsh Labour who want to go no further than today’s suboptimal arrangements. This view fails to recognise, that the UK’s major problem is the overcentralised nature of its governance in London and the powers of the treasury and the civil service in Whitehall. This does not work in the regions of England let alone Scotland and Wales.
On that basis, I also think England needs to restructure so that its regions are more federated like “3” as well, although it is difficult to see how they could go beyond that status? Others can opine on that matter.
So, in this confederated arrangement, Wales gets to decide what “sovereignty” and functions are pooled – at a UK level and later again I hope at a European level. For those worried about the over-centralisation of power in Cardiff I also favour empowering parts of Wales with more locally accountable funding – perhaps via the regions and/or fewer local authorities!
We need this debate about Wales and the UK, about a 21st Century independence which as set out above, is more about cooperation, collaboration and shared values and not the imperialist 19th Century independence which has, in my view, shaped Brexit.
It’s about the kind of Wales that could be created, a positive open relationship with England, Scotland, Ireland and the EU; a forward-looking Wales – not constrained by history, geography or ideology; welcoming to all people from all places, with shared values that do not diminish the rights of anyone.
We also need a Wales couched in the realities of money, affordability and deliverability; about the need for a functioning economy and yes one that can be developed within the constraints of the climate and environmental emergency. I think the discussion and debate is much closer to the beginning than to the end …or even the middle!
But for sure Wales gets to decide what it does on its own, and what it does and share with others. That’s normal.
As a little background these may be of interest…
GDP per capita (current US$) | Data (worldbank.org)
March-2023-PSF-commentary-1.pdf (obr.uk)
Public spending by country and region – House of Commons Library
Country and Region Analysis_2019
What use is GDP on a planet with no trees or bees? – Mark Barry (swalesmetroprof.blog)
Common Travel Area: rights of UK and Irish citizens – GOV.UK (www.gov.uk)
Reforming the Union: Mark Drakeford MS, First Minister of Wales (youtube.com)
UK could break up unless it is rebuilt as ‘solidarity union’, says Mark Drakeford
Labour’s constitutional proposals | Institute for Government
Five things we’ve learned about the Brown Commission on the UK’s future | Institute for Government
Policy making beyond Westminster • Resolution Foundation
The Independent Commission on the Constitutional Future of Wales | GOV.WALES
Independent Commission on the Constitutional Future of Wales: final report | GOV.WALES
UK Government Cock Ups, Wales, Zen and The Art of Independence… – Mark Barry (swalesmetroprof.blog)
What sort of Britain do we want? – Mark Barry (swalesmetroprof.blog)
What sort of Wales do we want? – Mark Barry (swalesmetroprof.blog)
The Environment, Tax and Wales – Mark Barry (swalesmetroprof.blog)
Wales, Metro, TOD & Devolution… – Mark Barry (swalesmetroprof.blog)
UK government borrowing surges again as Covid cases soar | Economics | The Guardian
What use is GDP on a planet with no trees or bees? – Mark Barry’s blog site
Interesting read Mark.
Your article speaks to the problems with independence but not the reasons we should seek it. These would break down into two fundamental areas which align with the challenges you are dealing with here.
We would be better off financially.
We would make better/different spending decisions.
You seem to have skipped past cultural considerations and other flag waving nationalist tendencies which I agree with. After all there is very very little difference between the cultural variations of the Welsh and the other varied regions of England and each other.
Looking at this as a budget and priorities issue, you can test your views on other regions of England to see if they hold true. After all your federal (3) proposal is that what is good for Wales would be good for English regions too.
As a thought experiment we can therefore use the North East of England as a counter example and if it holds true for NEE then it should hold true for Wales. NEE’s GDP is more than double that of Wales so not ‘too small’ to consider for your forms of ‘Independance’.
So, would NEE be better off financially under your concepts of independence? It’s hard to imagine how taxes could be varied significant from the rest of the union without creating a lot of behaviour change which would undermine the process. If every region of the U.K. adopted radically different tax regime’s I can’t imagine it resulting overall in more GDP and more tax for state authorities to distribute. You keep pointing to the Crown Estate but it’s chicken feed in this sort of consideration. I’d be interested to hear what forms of tax policy divergence Wales and NEE could pursue that would be beneficial to their economies? I suspect it’s very marginal and not miles off devolution as it is today or devolution+ at best.
Turning to priorities, and Wales making better decisions than a centralised Gov, by now we should have some evidence of this and it is scant. If the level of autonomy that Wales has enjoyed for the last 25 years had shown improved outcomes I would expect other English regions to be championing the federal mirrored arrangements you set out here, but there isn’t much call for it.
In your view Wales hasn’t had the levers to make a difference, for example in health, in which case presumably health should be a pooled sovereignty issue? I’ve never understood what local differences apply to the provision of a general hospital, there are about 140 in the U.K. and I would guess most voters want them all to be good, offer the same services and be of the same standard. The alternative is to give Wales the levers to make a difference to health, but what is that? Significant tax policy divergence to raise more revenue? Or our own central bank? Neither works in a quasi federal model (2) or (3).
My view is that when you look at it unemotionally the areas which benefit from devolved thinking are quite small. Transport is I know a pet issue of yours and is very likely the key area where we are not devolved enough. This might be lighting your fires for further divergence but is actually a single sector issue.
Climate we all know requires larger block not smaller thinking. The global trend economically is towards consolidation in larger blocks not subdivision into smaller units. Defence and foreign policy will always be a U.K. wide consideration and it’s hard to think Wales needs or wants much divergence in Justice.
In my view the federal approach (3) is likely the right model, but watered down from a US model where most of the ‘states’ in the U.K. would actually be led by Mayors. Getting the right areas of responsibly devolved (planning, transport, local govt, communities, etc) and retaining central control of universal services (health, education, defence etc) makes more sense.
In this model I think the Welsh Govt becomes more like a super council, and indeed I think a lot of what local councils do should be merged into Welsh Gov. The London Mayor has a similar budget to Welsh Gov and other English Regions could also benefit from consolidation of council activities alongside some devolution form london of issues which have a local view as I have set out. These Mayors should also then have a role in a reformed House of Lords etc.
The challenge to all of this pragmatic thinking is always those who want the trappings of independance. I think the debate would be far more effective and useful if Welsh Nationalists spent time devising the best form of devolution for say the North East of England and then challenging themselves as to why this would be any different for Wales.