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Thursday, August 16, 2007

Independence or bust?

Although she does not state it explicitly, Leanne Wood today implies that Wales' Constitutional Convention, agreed under the One Wales pact, is just the first step in a process that will take us all the way to independence. No wonder some Labour figures are unhappy. They are more concerned with what will happen to the can of worms they are opening than with the thought that Wales might achieve parity with Scotland.

Writing in the Western Mail, Leanne adopts the language of the SNP to suggest that the Convention will enable the Welsh government to begin a conversation on our future as a nation. In reality it is there to build a consensus in the run-up to a referendum on full law-making powers, or is it? Perhaps in the light of this article, Rhodri Morgan needs to clear that up.

She asks why it is that other parties often argue that Wales is too small to make decisions for itself, but half the members of the UN are smaller than, or the same size as Wales. The simple answer is that we do not. As she, herself, points out, there is cross-party support for a successful outcome to a referendum on law-making powers. Mixing up arguments for different outcomes in this way does not enhance her case, it makes Plaid appear disingenuous.

What many do not support is full economic and political independence, whatever that means, because unlike those other countries we are starting from a different place in which our prosperity is inter-dependent with England and our tax-take does not meet our out-goings. Leanne fails to point out that the cost of living in countries such as Iceland, Ireland and Malta is very high and it is only because they have been able to sustain a good GVA that their citizens have been able to live with this. Indeed it took decades of struggle and not-insubstantial European funds, for Ireland to reach its present position as the 'celtic tiger'.

Economic success is not forever, as Japan has illustrated, and in our case, where we start with a below-European average GVA, the impact of economic independence could be disastrous unless we have built up a strong niche for ourselves in World markets so as to sustain an economy capable of supporting our spending on key public services.

The fact remains that it is not just the other political parties who are unconvinced by the independence argument, it fails to resonate with the electorate as well. It is not enough to argue for constitutional change on the basis of national pride and envy, there have to be very real benefits as well if Plaid are to convince people of their case. So far the nationalists have failed to answer the fundamental question of 'what is in it for us?'
Bethan Jenkins also blogs of how “the One Wales Government should be looking with interest to what is happening in Scotland at the moment” and the commitment to setting up a referendum by 2011.

She acknowledges that “It will be a challenge, especially with tensions in the Labour ranks.”

Those tensions are unlikely to go away, and surely it must lead to even more unrest within the Plaid camp as they have to be wondering more and more if they have sold out to the Labour Party for a prize that is not going to be forthcoming?
I would not in principle disagree about gaining Independence myself, but Plaiud Cymru takes the biscuit in gross hypocrisy. Only the other day PLAID CYMRU WERE TOTALLY AND UTTERLY DENOUNCING THE BIG "I" WORD. They just sicken me! Anyway, Leanne Wood and Bethan Jenkins cannot climb out of fresher style of Student Union Politics - so who is going to listen to them? Those two are more like naive schoolgirls politically. Maybe an audience with the Queen would do them good.
The comments by Leanne Wood will sadly make it even harder for those who support more powers for the Assembly to win any future referendum. Unfortunately there are some in Plaid who have been carried away both by the coalition agreement and the media reaction to Salmond's first 100 days in Scotland. There is now a real danger that the whole issue of good governance for Wales will become caught up with the argument about independence. The danger is that there will now be some anti devolutionists who will argue for a referendum sooner rather than later on the basis that as Don Touhig rightly argues there is no evidence of a real appetite for more powers amongst the electorate. The political naivety of Leanne Woods and some of her colleagues in Plaid just beggers belief.
Any coalition between Plaid and any other party was always at some point going to come up against the "Leanne Factor". It will be interesting to see how loud and how shrill she becomes over the next six months.

You might want to invest in some earplugs Peter! :)
Peter - i could not agree more with your comments.
I love the way Peter says that our tax take does not match our outgoings. Does "our" mean the UK which has a massive public sector borrowing requirement? In other words UK tax take does not meet its outgoings.

Given that nobody knows how much tax Uk wide companies like Marks and spencer etc would pay in Wales if we had our own government and that the records for many indirect taxes dont include "regions" its not suprising if Welsh nationalist take a positive view and british nationalists a negative one.

Becoming Independent but remaining within the EU would mean there was no problem having much of our economy linked to England. Much of the Danish Dutch and Belgian economies are linked to germany and France.Thats how things work in the modern world.
I could not disagree with you more Peter. I think that Leanne Wood should be praised to the hilt for putting the case for independence for Wales on the political map.

The argument that Wales could not afford to pay its way. Even you have to admit that there are small independent countries which have a higher GDP per capita than the UK. There is no doubt that Wales could do it.

You say that we would have a budget deficit if Wales were independent tomorrow. Well, let me give you a few facts to help you. For 13 out of the last 16 years the UK has had a budget deficit. It has had a budget deficit for every year since 2001/2. Does that mean that the UK cannot afford to be independent within Europe, as Leanne Wood argues for Wales?
Absolutely Mark

Two oil companies in Milford Haven pay enough corporation tax to fund the entire Welsh NHS. (Of course, after independence they would immediately relocate to Walsall!)

"Our" spending includes, for example, the £20 billion which the UK government will spend on Trident. Notionally about one billion of this spending is "ours". I suspect we could do without it.

Ditto the Dome, the London Olympics.

The tired argument about Ireland having got where it is only through Euro money is a tad old now and never represented the whole picture.

Of course euro money played a part but there's far more than that to it.

Obviously Mr Black works on the old saying - "half a truth is like half a brick - always more forceful than a whole one"
Karen- I am not naive in acknowledging that there are challenges ahead with regards the referendum on a Parliament for wales, but it is one that I am looking forward to. We have to show that we have the confidence to move forward. I wasn't talking about Independence for Wales in my blog, but how we can look to Scotland for lessons as to how they operate currently, and how far advanced they are in terms of embracing devolution.

Again, it is easy for people to class Leanne and I as student politicians. Yet, we are talking about the issues, surely if we were quiet that would be far worse than trying to answer awkward questions and to tackle issues head on.
I wonder whether, if there were a chance of a referendum in Wales,the LDs here would follow their Scottish cousins and take a very illiberal undemocratic line? I hope not - you can't be all for self-determination by small nations, excpet if they're called Scotland or Wales!
There is nothing illiberal about the party's position in Scotland. You have to remember that there has just been an election there in which two thirds of Scots voted for parties opposed to Independence and there is a similar majority against in opinion polls.

What the Scottish Liberal Democrats are calling for is a new constitutional convention, independent of Government and Parliament, to find a way forward.

A referendum would waste millions of pounds of taxpayers money and give people the idea that this is a unionist versus nationalist argument when it is nowhere near that black and white. At least with a new convention there is a real chance that progress can be made in getting greater powers for the Scottish Parliament, something that voters there do want.

With thanks to James Graham who explains it much better on his Quaequam blog.

As for the argument that the UK has a budget deficit and therefore Wales can live with one too, I am not sure that is a surefire winner in convincing voters. The item of expenditure that Welsh taxes definitely cannot afford to fund at the present level is social security payments, or is it being argued that we can do without them too.

The economic arguments being presented here for independence in these comments are financially illiterate. The fact is that Leanne has not put a case for independence in her article, she has confused a number of arguments for extra powers with a desire for autonomy and mixed them up with a half-hearted plea to patriotism and a half-baked comparison with countries that have nothing in common with Wales other than their size.

My point is that if you want independence then convince us that it is desirable and advantageous. That is not me dismissing the case it is asking those in favour to make one. I am still waiting.
Bethan I didn't suggest you wre 'naive' in fact I admire you for having the guts to say what you think which cannot be easy especially as a new AM.

I am merely saying that I think this issue is going to be one of if not the major areas of conflict.

Many Labour party members do not want the referendum, and their AMs will be under increasing pressure over the issue. As more and more Plaid people realise this then I think it will cause greater divisions in your ranks too.
I very much agree with Peter on this one.

Independence for Wales (and I want an independent Wales) can only be considered if the Welsh economy is able to sustain Wales.

Imho (and we have hacked this to death already), one way forward is to harness Welsh intellectual property (IP). Wales can't compete with China on cost grounds, but Wales can easily compete if it harnessed its universities in an entrepreneurial way and that is STILL NOT HAPPENING. I have recently compared protected IP output in the form of issued patents for the whole of Wales compared to a single university in a former third world city-state which has about three thousand fewer post-grad research students than all the universities in Wales combined (including affiliate Cardiff University (with the Medical School), Swansea, Aberystwyth, Bangor, University of South Glam, Newport) and guess what, the former third-world university has more issued U.S. patents than all of the universities in Wales combined. I am going to send the results to each Welsh university for comment and will adjust the figures if the university lists other patents that my research did not throw up), and the results will be published in a national Welsh newspaper – the journalist who wanted this story about the time I met F2F with Professor Phil Williams is getting the story.

The need for beloved Wales to develop an economy to allow it to become independent is too great for me to remain worried about embarrassing the various universities in Wales.

It is pretty clear that the best performing university is Cardiff whereas the best performer before the School of Medicine in Cardiff merged with Cardiff University was the School of Medicine, so Cardiff is getting a tow from the medical school.

Swansea University has a supercomputer so one would expect to see some action on the IP protection front.

Btw, the university I am comparing all the universities in Wales with has ‘enterprise’ in its motto.

How do you know if Wales can afford social security payments or not? You have no idea what the Welsh "tax take" is and neither does anyone else on either side of the argument because the full data does not exist.

The secret to Wales being able to pay its way is for it to become a net exporter of energy. We should be looking at all possible energy sources to achieve that being dependent on gas, coal and uranium from eastern europe/eurasisa is not a smart move and Wales is well placed to meet all its own energy needs and export the "extras".

When i was talking about the PSBR I was not talking about what would appeal tot eh electorate but to the reality of government.
I think you will find that the figures are available for tax take. If you are not be thinking about what appeals to the electorate then that is a problem. After all you have to win a referendum and convince people why Wales should be independent before you can achieve it. So far all you have are a series of half-cock platitudes.
Peter, it is surprising and disappointing to hear you argue so weakly on this point.

You say: "As for the argument that the UK has a budget deficit and therefore Wales can live with one too, I am not sure that is a surefire winner in convincing voters. The item of expenditure that Welsh taxes definitely cannot afford to fund at the present level is social security payments, or is it being argued that we can do without them too."

Well, with all due respect this is an absurd argument. You seem to accept the figures about the UK budget deficit. The generally accepted annual current budget deficit would be approximately between one and two billion pounds if Wales were independent tomorrow. That is an estimate that the Labour Party has accepted. That includes all government expenditure, social security included.

The argument is not that the UK has a budget deficit, therefore Wales could live with one. Rather it is that Wales, like the UK, has a budget deficit now, but could, in the future, balance its budget while providing the current or higher levels of public services/expenditure.

A Welsh one to two billion budget deficit is a deficit just like the UK's cyclical budget deficit.

At this point you have a series of arguments open to you, including:

(i) it is not possible for Wales to balance it's budget under any circumstances;

(ii) it is possible for Wales to balance its budget, but only by either raising taxes above UK levels or cutting public expenditure;

(iii) Wales could balance its budget without introducing the measures in point (ii) by introducing a series of fiscal measures (possibly including cutting corporation tax levels) which would raise Wales’ GDP; Wales’ GDP per capita and Welsh GDP relative to the UK;

To me (and incidentally I don't necessarily expect you to agree) it's obvious that point (iii) is possible. We can argue about the likelihood, but if we don't accept that then we are admitting that no government can improve the economy of its nation. It would be both to ignore economic history and common sense.

Even Rhodri Morgan has argued that Welsh GDP per capita relative to the UK could grow to 90% from its levels when he launched his Winning Wales document in 2000 or 2001 (I think it was). Of course, he failed, but the point is he was implicitly accepting the point that Wales’ economy could grow at a rate above UK levels. We can catch up. If we could reach 90% of the UK’s GDP per capita, can we reach 100%? or 110% The answer must be yes.

For me, the question is therefore, not: “could an independent Wales be an economic success?”, but rather, do we want to be?
I believe that a deficit of one to two billion pounds is on the low side and I would want some proof that Labour have accepted this figure. The last time I heard a Labour politician quote a figure it was £5 billion. But you are missing the point and that is that you need to make the case for independence. So far all we have is wishful thinking.
I have to agree with Peter - the case for independence is wishful thinking and will remain so until the politicians running Wales finally grasp the nettle and, for example, turn hundreds of millions of university funding into protected IP. Our performance on this front is just plain bad and the lost opportunities in terms of wealth and job creation and loss of taxation is MEGA-HUGE. Until we fix this issue we will continue as a weak nation, indecisive, and reliant on hand-outs from the EU (Objective One Funding) and from London. The solution is there.
Now that Glyn Davies has come out in tentative favour by saying that "Wales would survive and flourish as an independent country" isn't it time that the Lib Dems spokesmen did the same? Otherwise they may be left out in the growing consensus for independence. The scaremongering myths are being demolished one by one (see my blog) and it cannot be said that Plaid are not addressing the economic and viability issues. There are leading economists who support Plaid. There is also tacit support on all sides of the Assembly for steps towards independence which is more than can be said for the opposition parties' stance in Scotland.
Glyn can of course defend himself, and he has, on his blog. However, you are misrepresenting him if you are implying that he is in favour of independence. He is not. The Welsh Liberal Democrats are not either. Putting aside the failure to answer the economic arguments, the main issue surely has to be that no compelling case has yet been put for independence that has convinced people that it is to their advantage.

The tacit support from all sides in the Assembly is not towards independence but towards a Scottish-style Parliament. Don't make the mistake Leanne has made and confuse the two.
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