Wednesday, 5 May 2021

Ducking the question


Last week, the Institute for Government published a ‘helpful’ paper setting out the difficulties which independence would bring for Scotland or Wales. Well, ‘helpful’ to unionists who were just looking for a headline figure with which to attack the independence cause. In fairness, the detail of the report does accept that after independence Wales and Scotland might choose different patterns of spending which would affect the calculations and thus the headline figure. And there is some useful analysis of the different pattern of revenues raised by different taxes in the constituent parts of the UK. But the headline figure on which the unionists have seized is very clearly drawn from a number of key assumptions:

·        That the independent administrations continue with the same patterns of taxation and expenditure as at present

·        That the estimates of tax raised and expenditure undertaken are largely correct

·        That fiscal deficits are generally a bad thing and that having a higher budget deficit as a proportion of GDP than the UK currently operates is ‘unsustainable’

·        That independence brings no other economic benefits

·        That the newly ‘independent’ countries continue to use sterling rather than establish their own currencies (not stated, but implied)

It’s easy to see why anyone would use those assumptions as a starting point, because there are at least some known or almost-known figures to use as a basis, but whether precisely aping the current UK’s priorities and approaches really counts as a meaningful form of ‘independence’ is a question which doesn’t really get asked. And starting from those assumptions predetermines the outcome: if the assumptions are all valid it’s hard to argue with the headline conclusion. The question, though, is whether (or to what extent) those assumptions are a valid basis for drawing conclusions about an independent Wales as opposed to a devolved Wales.

There are plenty of examples of English / UK priorities which an independent Wales might choose not to copy. Nuclear weaponry is one of the most obvious examples: the headline conclusion that Wales is unviable without tax increases or spending cuts includes the implicit assumption that an independent Wales would continue to pay for England’s Trident replacement programme. Those who claim Wales is unviable without receiving fiscal transfers from England are, in effect, telling us that an independent Wales couldn’t afford to pay 5% of the cost of England’s nuclear weapons unless England ‘generously’ gave us the money first. “Why on earth would we want to?” is a much more appropriate response than “This proves we need English money”. To generalise the point: we are being told that we can’t afford to pay England for things we neither want nor need unless England gives us the money first. It’s impossible to disagree with that, but it doesn’t do much to advance the state of human knowledge.

It is impossible for anyone to produce an accurate analysis of the fiscal position of an independent Wales, not least because that depends more on the policies adopted by the newly-independent state than on the fact of independence itself. A Labour-run Wales would not be the same as a Tory-run Wales, or a Plaid-run Wales – and the fiscal impact of those different perspectives would only increase over time. (It’s worth noting that the same applies to the UK – no government has shown that it can even accurately predict the fiscal impact of its own policies, let alone those of other parties.) It follows that anyone who claims, with absolute certainty, that Wales would be a basket-case economy – or, alternatively, that it would immediately soar to the top of the world’s rich league – is talking nonsense. They simply cannot know. What we can analyse, with the benefit of hindsight, is the experience of other countries which have become independent and followed their own paths. Unsurprisingly, it’s an overwhelmingly positive picture. What the unionists need to tell us (but can’t) is why they believe that Wales and Scotland are somehow uniquely unable to follow so many other countries of similar size which have become so successful. Using a set of obviously invalid assumptions to predict the future is a woefully inadequate response.


dafis said...

Abandoning all those Westminster driven vanity projects would be a good start for both Wales and the UK. Obviously the UK government in its present mindset is unlikely to ever ditch such gross misdirection of resources so it will be down to an independent Wales to detach itself from these long running fiascos.

HS2 may be good for England but the 3 other nations will get little or no benefit as they would no longer be London centric. If England set about creating better links across its North it too might lose some of that sick dependency on London.

As for Trident well what can we say and the whole macho nonsense that revolves around defence is pretty sickening. I'm not an anti defence peacenik but persistent competition between the 3 forces - Army Navy and Airforce is inflationary in its own right and is out of control, driven by major global defence contractors who seem to work the M.O.D as though they own it.

Anonymous said...

A country that does not have the means to defend itself is not a country.

By all means don't spend on nuclear. But you'll still have to spend a similar sum of money on defence somehow somewhere (even if it's just paying the US to guarantee defence or building up armed forces local conscription).

Seems to me you want an independent Wales in your bedroom only. Love it!

John Dixon said...


Naturally, any country will seek to defend itself, but it's normal to start with answering the simple question "Against what?" Much of the debate about 'defence' seems to bas based on the wholly unrealistic assumption that someone somewhere is just waiting for an opportunity to invade and conquer. That is the mindset of the days of empire, not the twenty-first century.

Your statement "But you'll still have to spend a similar sum of money on defence somehow somewhere..." is, of course, complete nonsense. The amount a country needs to spend on its armed forces is proportionate to its assessment of the perceived risks. There are two reasons for the UK's decision to be amongst the higher-spending states when it comes to armed forces: the first is that it wants to maintain an offensive capability to intervene around the world, and the second is that it is following a foreign policy which opens it to greater risk as a result. Neither of those apply to Wales, which allows different decisions to be taken. But the ultimate guarantee of world peace is more to do with establishing a world order in which might is not assumed to be always right; in that respect the UK's stance is more of a hindrance than a help.

Your final sentence is simply fatuous.

dafis said...

Some of the "bigger" nations just have a seriously inflated view of their place in the world. UK's foray into the US revenge missions after 9/11 is a good example of ill judged strategic thinking. They just bowled in with no real vision of aims, objectives and most important, the end game. They just had no idea of where or at which point they could deem themselves "successful". In Afghanistan they fell into a new variation of the time honoured Afghan trap - no one ever wins in that shithole !So no win even if you stay there ad infinitum.

They doubled up on their daftness by following US into Iraq. Successfully wiped Saddam but failed abysmally to compute what it would take to extract from a country that could be MORE stable, a better place for people to live in. Success ? I suppose they succeeded in alienating much of that country irretrievably, and to the point where the horrors spawned in Iraq spilled over into other adjacent territories. That could be judged as fuckin' brilliant if the aim had been to destabilise an entire sub continent and bring likes of ISIS into this world !

Now we read that UK is tagging along with US France and OTHER minor UN participants in the sub Sahara crisis that now engulfs a big slice of Mali and adjacent spaces. AQ and ISIS along with other dissident derivatives are major problems in that part of Africa. However engaging in further deployments does not bode well given the "highlights" of the last 20+ years of British foreign policy and its military arm in particular.

We are seeing the reversion to some kind of post colonial imperialism where military is deployed to shore up post colonial governments who are often architects of their own discomfort. The word not often uttered is - corruption, and behind it lurks globalist corporations who have their fingers into all sorts of pies. Minerals in West Africa are just as big, maybe bigger, than the oil of the Middle East which caused Dick Cheney to get an almost permanent erection at the thought of controlling it. I wonder who is really behind these moves, yet the bill is landing on the mat at the UK public purse's front door.