The past year has seen a hardening of people’s views of Wales’s place within the UK; amongst the Conservative Party in Wales there has been a noticeable swing against the current Devolution settlement, perhaps out of a concern to guard their right flank from the new Abolish the Assembly Party. Meanwhile, the independence movement has a new-found swagger with sharply increasing support, though still with not much being offered in the way of a credible vision of how independence could work.

Therefore it’s a good time to look, with as cool a head as possible, at the form that Wales’s predicament currently takes, and to ask whether going backwards or forwards – back to the old pre-devolution settlement, or beyond devolution all the way to independence – is more likely to solve the underlying problems.

The problems themselves are easy enough to enumerate: Wales is economically stagnant with low growth, poor rates of business formation, low labour-force participation and chronic dependence on low-paid, low-skilled jobs in factories owned by companies from outside Wales. There is a fiscal deficit vastly beyond what any independent country has ever been able to finance. Holding all of it down, we have the dead weight of the Labour Party’s seemingly immovable dominance.

Deeper roots

It’s tempting to see these problems as the fruits of Devolution, and consequently to believe that if Devolution were taken away and direct rule from Westminster resumed, then the problems too would go away with it.

But a moment’s thought reveals that all of these problems existed beforehand. Labour’s unbroken hegemony over Wales started in the 1920s. The policy of relying on inward investment to create employment in Wales also goes back to that time, though it was never pursued more avidly than by Peter Walker’s Conservative Welsh Office in the 1980s.  Many of the weaknesses in the Welsh economy more generally arise from the excessive dominance of nationalised heavy industries over a number of decades from the 1950s onwards – definitely something that originated from Westminster rather than Wales.

Those nationalised industries in turn became the fiefdoms of over-mighty trade unions – often, as in the case of the National Union of Mineworkers, with their power-bases and main interests outside Wales. This prevented the orderly closure of coalmines and steelworks when they became economically unviable in the 1960s and 70s, as happened elsewhere in Europe. There, former coalmining and steelmaking areas such as Luxembourg and the southern Netherlands now have prosperous, highly diverse and very entrepreneurial economies. 

In fact, as an aside, it’s quite wrong to assert that Wales somehow lacks its own entrepreneurial skills or inclinations. Even in the coal industry, the commercial success of Tower Colliery as a private company, for a decade beyond the point where British Coal could no longer run it profitably, bears testimony to that. 

But the main point is that while it’s absolutely the case that Devolution has failed to solve Wales’s burning problems, Devolution is not the origin of them. Their roots go back to a time when Wales was directly ruled from Westminster. For that reason, a return to direct rule from Westminster does not seem remotely likely to make matters any better.

So why might independence be a better solution?

Same shower, more power

One of the things that makes the idea of Welsh independence so terrifying to many people, especially on the Right, is the idea that little would actually change. The country would carry on being mismanaged by permanent Labour governments, only now with fewer constraints – the same shower, but with more power. 

But that’s impossible for two reasons.- Financial markets

Wales’s fiscal deficit has already been mentioned. Its existence, and growth since Devolution from around £3 billion in 1998 to over £13 billion today, is deliberate Labour policy, which achieves the twin objectives that Devolution was designed for by the Blair government: namely, keeping Wales in the UK, and keeping Labour in power. Marketed as “winning more money from Westminster for Wales” and set alongside the country’s slow economic decline due to their constant meddling, it neatly achieves both those objectives.

But an independent country simply could not follow these policies. It would be impossible. If it tried, then it would make the Greek financial crisis of 2009-2015 look like a picnic. Like the rapidly-growing former socialist countries of Central and Eastern Europe, an independent Wales would be forced towards balanced budgets and business-friendly policies.- An end to Toryphobia

Welsh voters don’t particularly like the Labour Party.The Euro elections of May 2019, when Labour were pushed into third place, showed that given half a chance Welsh voters will happily vote for other parties – even ones perceived as being right-wing.

Yet for better or worse, if you ask any Labour voter why they vote as they do, the answer is overwhelmingly likely to be ‘to keep the Tories out’. It is a simple fact that, ideology aside, the Conservative and Unionist Party is deeply unpopular in large areas of Wales. And it’s specifically the party, rather than centre-right politics more generally, that people object to.

Is this fair? Probably not. It goes at least as far back as Winston Churchill, despite that fact that his offence – sending troops in against striking miners in 1911 – happened when he was still a Liberal. But it’s been passed down the generations and it’s a fact of life.

Yet in an independent Wales, there would no longer be a Conservative and Unionist Party to keep out. There will no doubt be a party of the centre-right, with many former Conservative members in it, but it wouldn’t be the bugaboo that forces people into voting Labour for fear of it.

On the other hand, it’s hard to think of anything more likely to drive Welsh voters even more firmly into the Labour Party’s arms than abolishing the Welsh Government and putting Wales once again under the direct rule of a Westminster Government which – we can be certain – will be Conservative more often than not. It would cement Labour in power at council and constituency level for perpetuity.

What’s really important?

Those with a free-market bent and an interest in seeing Wales prosper need to think clearly about this. 

Ultimately, for some, what really matters is keeping Wales as an integral part of the UK. For them, that is an end in itself.Advocacy of free markets, contrasting them with Wales’s deeply broken current economic model, is just a means to that end. We have little to say to such people, except that we think they’re mistaken.

But those who really are driven by economics, and have noticed that free markets are the most effective means known to man for lifting people out of poverty and promoting every other sort of freedom as well, should think seriously about independence.

It’s true that, in Gwlad, we see independence as an end in itself. We’ve previously stated the conservative case for independence in four words: “Wales is a nation”. Yet we’re also committed to free-market economics. We think it’s equally true that (a) free-markets are the best way to make an independent Wales prosperous and successful and (b) independence is the best route for establishing a free market economy in Wales. 

And we’ll carry on making that case to anyone who’ll listen.