Since 2016 the issue of Wales becoming an independent country has been catapulted into the mainstream.
For generations the idea of Wales going its own was a real fringe issue. There were some who passionately believed in this cause but they were few and far between. However a combination of Covid and Brexit has driven support for independence with polls putting it as high as 30%.
Now of course 30% doesn't sound like a lot when you need over 50% for a successful referendum. However, things move very fast in politics. In 2012 Scotland was polling around 30% and just two years later in the Scottish indy referendum Westminster leaders were scrambling to make last minute concessions in the hope of keeping the Scots in the Union.
Unlike Scottish independence, Welsh indy hasn't had nearly the same amount of attention looking into the practicalities. Asking the right questions can be difficult. To try and fill this gap WalesOnline's Welsh Affairs Editor Will Hayward has written a book which helps people form their own view on Welsh independence.
The book concludes with a list of advice on how to form an informed view on Welsh independence. Below are some of these points to help you come to your own informed view on whether Wales should leave the UK. Some are questions that need answering, others are just things to bear in mind when forming your point of view while some are pitfalls to avoid. Essentially it helps you to ask the right question. Remember these are just overviews of complicated issues and is far from an exhaustive list.
What is your currency going to be?
An indy Wales basically has three options when it comes to currency. It can either:
- Keep the pound
- Adopt another currency (likely the euro)
- Create a new Welsh currency
Each one has its own challenges and advantages. Let's take each in turn.
Keep the pound. If you keep the pound you have consistency and less upheaval. You also have the same currency as your biggest trade partner (England/remaining UK) meaning there are no exchange costs or inconveniences when crossing the border.
However there is a massive downside to this. If you keep the pound you have zero control over interest rates or printing money. You are therefore looking at closing Wales' whopping budget deficit using only spending cuts or tax rises. This is simply not credible. Plus the idea of going through all the effort of campaigning for independence to still not have control over monetary policy and have the Bank of England set interest rates is insane.
Adopt the euro. For the same reasons that Sterling isn't a viable option, neither is the euro realistically. At least in the short to medium term.
Create a new Welsh currency. Every credible vision of an independent Wales involves it having its own currency. Let's call it the Punt. However once you decide to have your own currency things get more complicated because you need to decide if you are going to peg or float your currency.
If you float your currency then its value relative to other currencies is constantly changing based on demand. At least initially this will likely mean that Wales' currency will fall like brick. This will be good for exports, because they will be super cheap, but all the food and products we import would become much more expensive. This is to say nothing for the challenges presented for people working cross border (as thousands do). Imagine if you are a nurse living in Chester who works in Wrexham. Your punts will be worth much less than the pound so your salary will not stretch as far. By the same token some living in Wales but being paid in pounds will have more disposable income.
The other option is to peg the punt to another currency (likely the pound). Pegging the punt basically means that it will be matched (aka pegged) to another currency. Ireland’s pound was pegged to the British for about half a century after independence, for example.
This could mean that one Welsh punt equals one British pound. But it could also be fixed at something different, depending on whether you want your exports or imports to be more affordable, such as one punt equals £0.75. You can even have what is known as a ‘peg band’, where your currency can change value but only within a specified range in relation to another. So, you might say a Welsh punt can only be worth between £0.70 and £0.85.
But maintaining a peg is hard. Especially for a new currency. There will be a lot of speculators trying to break that peg. If you want to know what that can lead to, Google "Soros" and "Black Wednesday".
This isn't to say a new currency can't work. Just that you (and the markets) need to be convinced there is a credible economic plan underpinning it.
How is an independent Wales going to pay its way in the world?
An independent Wales will not be a large country. It is never going to produce most of the stuff that it needs. Therefore it is going to have to import. If Wales has to import, it therefore has to export to pay for this. What is that going to be?
This isn't something that can be brushed off simply by saying "we can invest in the industries of the future" or generic phrases like "green energy". What will those industries be? Why is Wales best-placed to deliver them? How long will it take to build them up and what will happen in the mean time? These are serious questions that need credible answers.
If you want Scandinavian-level public services, you have to have Scandinavian-level taxes
It is that simple.
Independent Nation by Will Hayward published by Biteback Publishing £20. Buy your copy here for only £15.99 using promo code WO15.
This is bloody complicated
Don't let anyone tell you otherwise. Wales becoming independent will make Brexit look simple. It is so, so complex. This isn't to say it is or isn't worth it, just that you need to ignore anyone who says anything other that this is going to be hard.
Just take state pensions. There is no UK pension pot. If you have a private pension, you will be used to receiving letters talking about the size of your pot and how much this will entitle you to. You even have the option to cash it in. So who pays the pensions of elderly people in an independent Wales?
Given that people have built their pensions with the UK government, you could argue that it would still be the UK government that owed them that pension. On the face of it, this makes sense. At the moment, if you are a British citizen, the UK government will pay you your pension (providing you have fulfilled the requirements) wherever you live. So, if people living in Spain receive the state pension regardless of whether they choose to retire within the UK, why should people in Wales be any different? However there are issues with this.
In this scenario, you basically have an independent country where the pensions of all their elderly are paid by a foreign state. This means the welfare of some of the most vulnerable people in your society is open to the whims of a parliament in which you have no representation. Your state pension is not fixed; it can be changed by an Act of Parliament in Westminster tomorrow. Just ask the Women Against State Pension Inequality, who saw their age of retirement changed. If you want to make the argument that Wales needs to be independent to forge its own path and be a credible independent nation, you are hard pressed to also argue that your rich ex living next door should pay your pension. So, this means you are going to have to untangle the current pensions and allocate some to Wales and some to the remaining UK.
But then there are further complications. How do you allocate pensions out between Wales and the UK? You could say that everyone who is living in Wales over pension age becomes the responsibility of the new Welsh state. But there are many people who have been living in England all their life who then retire to Wales, is it fair Wales picks up the tab for them?
In 2014 Scotland said it would take over the pensions for everyone living in Scotland. But this isn't fair on the rest of the UK because lots of Scottish people retired abroad and therefore the UK is paying their pension.
Pensions is just one example of how complicated Welsh indy is. It doesn't mean it can't work, just that if you are going support Welsh indy, you need to go in with your eyes open.
Independence is not weird
Independence in principle is not some crazy notion that no-one has ever done before. Look at a map of the world in 1950 and compare it to now. New countries are not a radical concept, it has happened many times before.
That said, there has never been a single case of secession in a well-established democracy (those with at least ten consecutive years of universal suffrage). There is still some debate over this as some argue that Iceland broke the trend.
Typically, it is not necessary to break up established democracies because they should already be responsive to the demands of the citizens. However, there is an argument that the electoral system in the UK means this is no longer the case here. This leads us on to the next point...
What we have now isn't working for Wales
Whatever way you look at the current system, it is clear that it simply isn't working. Not just for Wales, but for England, Scotland and NI for that matter. The first chapter of the book mercilessly breaks down how the current system leaves Wales simultaneously with massive issues with poverty without having any of the tools to actually solve the problem.
The current devolved system is a hodgepodge mess. Boris Johnson is both the Prime Minister of the UK and the equivalent First Minister of England. This is like the governor of California also being President of the USA. There is no doubt that the current system is failing, the only question is how we fix it.
Beware the energy myth
Some supporters of independence are obsessed with the idea that an independent Wales could balance its books on the back of selling energy or water to England. While it is true that Wales is a net exporter of energy and water there are some serious issues with the plan to make serious cash from this.
On water, the Wales Governance Centre has looked at this issue extensively and concluded that for Wales to sell H20 at a price that it would generate significant money, it would actually be more cost effective for England to just remove the salt from sea water.
On electricity Wales does export a lot. In 2018, Wales generated twice the amount of electricity it consumed, and it has the potential to generate even more. However, there are a few issues with this as a tool for balancing the Welsh books. The first is infrastructure. There is no way to send electricity from north Wales to south Wales (or visa versa) without it going into England. That is just how the grid is laid out. So unless you want to spend the huge amounts need to build a Welsh grid, you are going to be integrated with England anyway.
You also need to bear in mind that there are other options for England when it comes to electricity with more links being created to the continent as well. In their analysis, the Wales Governance Centre estimated that the most energy sales could yield is "a couple of hundred million pounds". When you consider that the Welsh deficit is £13.5bn, it is not credible that energy sales will be the answer.
We can fix a lot of things now
Yes there are a lot of things that Wales can't do under the current devolved settlement but there is a hell of a lot of issues we could tackle right now. The Welsh Government is in charge of our schools and hospitals. The Welsh NHS is really struggling at the moment and better governance here in Wales would make a big difference.
Of course you can argue that Westminster is ultimately in charge of the budget the Welsh Gov has to work with but this ignores the fact that many of the issues facing Wales are totally fixable under the current system. This WalesOnline investigation is a great example of this.
The best advert for an independent Wales would be an efficient and functioning Welsh Government. Whether or not you want independence, tackling the problems with the tools we have to tackle it is something we should all aim for.
Remember that having a conversation is good
Real debate, questioning and conversations are incredibly healthy.
There are caveats of course. Social media is often not the best forum for complex debates. Also, Brexit showed what happens when you debate based in inaccuracies or misrepresentations of facts. It settles nothing.
That is why having a Welsh indy debate based on clear facts is so important. Just having this conversation treats the people of Wales like adults, making an informed decision on their future. It doesn't mean they will choose to leave the UK, but having the debate from an informed position means that Wales can become a more prosperous and mature country, whether independent or not.
Independent Nation by Will Hayward published by Biteback Publishing £20.
Buy your copy here for only £15.99 using promo code WO15 https://www.bitebackpublishing.com/books/independent-nation
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