Back in September, Plaid Cymru published a report they commissioned into the “Welsh deficit” (pdf).
The deficit is the difference between the amount a country raises in taxes (or other income) and the amount spent by its government (in our case by both the Welsh and UK governments). If spending is higher than the income it results in a deficit. It’s often presented as one of the main arguments against Welsh independence because it supposedly makes independence “unaffordable”.
The report was authored by Prof. John Doyle from Dublin City University’s social sciences department. Prof. Doyle is an expert in diplomacy and conflict resolution and has authored almost identical work on the fiscal impact of Irish reunification (pdf).
The report’s headline finding is that the deficit that would exist on day one of independence – previously estimated to be upwards of £13.5billion (in 2019-20) – could be far more modest at £2.6billion.
Plaid Cymru’s leader, Adam Price MS, has even gone so far as to describe the report as a “game changer” in the case for Welsh independence.
Any statement like that from a politician immediately gets my chin itching.
The most disappointing aspect is that – passing commentary aside – there’s been little to no (semi-serious, let alone serious) examination of the report or its claims. By December 2022 – when I’m publishing this – it’s been quietly buried under other stories.
So I guess it’s my job to be the bad guy again? Thanks.
Before I’m accused of being too cynical, the report is undoubtedly a useful addition and Plaid Cymru were right to commission this kind of work.
Based on the set task – to outline that “an independent Wales wouldn’t inherit as big a deficit as we have now within the UK” – it’s well-argued. Numbers wise it’s perhaps not as great as it’s highly unlikely that every single measure listed to reduce the deficit could happen at the same time or go our way in negotiations.
It certainly isn’t what Plaid Cymru described it as: “a game changer”. It’s more a primer to what would have to be more serious and detailed work. Perhaps it’s a game changer to everyone who saw the headline figure but didn’t read the report. That’s not a criticism of the report itself, but more how it’s been interpreted at face value.
Given the timing of the report’s publication, the sense I get is that there was a desire by Plaid Cymru to “get something out to bolster the case for independence” before the AUOB march in Cardiff this autumn. Get the soundbite; give everyone a morale boost by making them think independence is just around the corner; hope nobody questions it to any great degree.
As Prof. Doyle himself states towards the end:
“It is beyond the scope of this paper to explore either an alternative tax policy or industrial policy for an independent Wales. The underlying economy, taxation system and the type of public services that are provided will be the real determining factors of the costs and benefits of an independent Wales. “
This is a key point neglected for the sake of a headline.
While the “day one deficit” could be as low as £2.6billion, we won’t know what the working/yearly deficit would be until we know what an independent Wales’ economic, monetary policy, tax and spending plans are. Those numbers are far more important. Plaid Cymru and the Greens are jointly working on that, reportedly. Let’s just say that I hope it’s up to the necessary standard.
I’m sure all nationalists have our shopping lists. Basic income, wealth tax, carbon tax, north-south railway, free public transport, subsidised public housing, nationalised utilities, a less punitive welfare system. Need I go on? That £2.6billion figure (itself perhaps optimistic) could rise fairly quickly.
Being the Balloon Popper-in-Chief isn’t a role I relish, but independence isn’t about changing names from Wales to Cymru, sacking the Windsors or some other superficial bollocks. It’s about the long-term prospects, happiness, security, basic rights and livelihoods of 3.1million people. We can’t fuck about.
