The Western Mail’s editorial column on Saturday told us that “…a report from the Wales Governance Centre calculated that an independent Wales would be faced with a £15bn funding gap immediately”. The most charitable interpretation that I can put on that is that the author of the editorial has completely failed to understand the report to which the piece refers – because it told us no such thing, and the authors made that entirely clear at the time.
What it did tell us, assuming that the methodology and figures are broadly correct (a reasonable assumption overall, although the devil is, as always, in the detail), that in the financial year 2014-15, the gap between revenue raised in Wales and the total of expenditure in Wales and expenditure elsewhere which is assumed to be for Wales, there was a deficit of around £15billion. In short, insofar as it demonstrates anything about systems of government, it shows that Wales is performing very poorly under the current system.
The figures are all historical, not projections, so to arrive at any interpretation of what that means for independence we have not only to make the same assumption about the accuracy of the figures and the methodology, we have also to make the following additional assumptions:
1. That Wales had become independent at some point prior to the financial year 2014-15, and
2. That the government of an independent Wales had decided to pursue exactly the same taxation and expenditure problems as the UK Government actually did over that period.
And if we want to project the figures forward – under either scenario – we have to either identify what would be different, or else take the lazy approach of assuming that nothing will change.
The first of those 2 assumptions is obviously untrue. As for the second, well I suppose it’s conceivable that an independent Wales run by the British Labour Party or the Conservatives in Wales might decide that the best way to run Wales is in the interests of the financial services sector in London and the South East of England, but if there was a credible party of government in Wales still taking that view, I somehow doubt that we would be any nearer gaining independence. If we don’t do things differently, what would be the point? It might be argued that, if Wales were suddenly to become independent tomorrow, then we would by definition inherit all existing taxation and revenue policies for the first year, and that, if nothing else changed, then the extent of the fiscal deficit would be roughly the same as it would have been under the current structures. But in the first place that scenario is utterly unrealistic, and in the second, it still requires the assumption that the future is the same as the past - and the GERW report made no attempt to predict the future.
For anyone to turn a report highlighting the extent of Wales’ failure under the current systems and structures into some sort of categorical ‘proof’ that the current system serves us well, and that the alternative would be disastrous, requires that he or she be either daft or else blinded by his or her own commitment to the UK.The first possibility certainly fits with the charitable interpretation that I mentioned above; but the less charitable interpretation is that the statement was a deliberate lie, perhaps based on the belief that if you tell a lie often enough it will be believed.