Against a backdrop of mounting pressure on the unity of the United Kingdom caused by Brexit, Theresa May has today signed off on £1.3bn worth of regional investment at Swansea’s Liberty Stadium. As Swansea City fight to avoid Premier League relegation, so too is the Prime Minister striving to maintain the union of our four nations. As Wales and other poorer regions begin to see the taps of EU funding turned off, tensions with Westminster are likely to rise.
Theresa May’s tour of Britain's Celtic nations has been described as an exercise in “engaging and listening to people from right across the nation" before the triggering of Article 50 on March 29. In short, it looks like much-needed hand holding at a jittery constitutional moment. Yet if Theresa May is serious about maintaining the Union, then this has to be just the start of a push to reduce inequality between the nations of the UK.
It is hoped that the plan being unveiled in Swansea might create more than 9,000 jobs, and despite Welsh voters giving their backing to Brexit, they are in danger of feeling the post-EU pinch worst of all.
Wales receives the maximum levels of aid possible from the EU in the West Wales and Valleys “Tier 1” area. As a net beneficiary of EU capital funding, Wales has been estimated to benefit at around £79 per capita from the EU, where UK’s net contribution to the EU is £151 per person.
With Theresa May about to end that arrangement, it’s little wonder that she’s out to steady nerves. There is a danger that Wales, which was sold a dream of economic success once we take back control from the EU, will suffer the nightmare of cuts to investment and economic downturn. Should the UK Government fail to make good on the promises of Brexit, political disillusionment will set in fastest in those areas most badly hurt by the gap between referendum rhetoric and reality.
Ending Welsh reliance on EU funding without a replacement would cause misery
For a long time, Wales has punched well below its weight economically, and both Cardiff and Swansea are currently among the UK cities most reliant upon exports to the EU. While the unemployment rate in Wales is below the UK rate, the Welsh are less than half as rich as Londoners, and even the richest areas in Wales are below the UK average.
For all the billions thrown at Wales by the EU, the situation is far from rosy. In West Wales and the Valleys on the gross value added measure, wealth per person is £16,059 per person or just over 63 per cent of the UK average. A fifth of the Welsh government’s annual budget is spent dealing with the poverty in which almost a quarter of the Welsh population live. Ending Welsh reliance on EU funding without a replacement would cause misery.
There is every chance that the majority in Wales which voted for Brexit may come to regret their votes if Wales continues to underperform or even worsens economically. What could follow is either total political apathy, or a turn to the radical, irresponsible politics of those who offer no real solution, but whose methods are the politics of fear or envy.
Economic pressures can play straight into the hands of those who rely on racial hatred and class warfare to attack mainstream politics, and they could well stoke resentment of the Union and calls for independence.
Of course, these problems set in long before Brexit became an issue. And, to put it mildly, Labour’s governance – it has never not been in government since devolution – has not been a success for the people of Wales. Labour have been the only government in the history of the NHS to cut real terms spending on healthcare, and they did it in Wales.
Further devolution looks set to cause more trouble, rather than alleviate it, as income tax powers are devolved. The Welsh Government is due to gain the power to alter income tax rates, but with the economy and income tax receipts smaller than those of the rest of the UK, there is a danger that the budget will be squeezed.
Peter Hain, the former Welsh Secretary, has warned that: “Wales is being pushed to take a leap into the economic darkness through tax devolution.” Devolution risks compounding a vicious cycle of economic inequality at the very moment we are choosing to end EU funding.
For a country to remain together, there will always need to be a transfer of wealth from the richest areas to the poorest. We have until now allowed the EU to perform this transfer on our behalf, while often attacking it for doing so.
Anyone who believes in the future of the United Kingdom must accept that the UK government must now step up and accept this modestly redistributive role. The alternative is to allow cycles of decline, and the increased flight of talent from the regions. Increased regional inequality would exacerbate tensions, and boost the cause of separatist movements.
Theresa May has faced sustained allegations that she is an unelected Prime Minister who represents only an English-centric ideological right. Nicola Sturgeon has compared the Prime Minister unfavourably with Margaret Thatcher in her “arrogance” towards Scotland.
Welsh First Minister Carwyn Jones has attacked Theresa May’s "tin ear" on matters of devolution, and Sinn Féin leader Michelle O’Neill called Brexit "a disaster for the people of Ireland", while seeking a referendum on Irish unity.
Theresa May’s claim for the new, populist centre of British politics relies on rebuilding our economy into a model that works for everyone around the UK. Those in favour of maintaining the unique achievement of our unity must now accept that we need to take over responsibility from the EU and redistribute wealth to the poorest parts of the UK.
We need to take over responsibility from the EU and redistribute wealth to the poorest parts of the UK
If the Conservative Government can engage seriously with the issue of wealth transfers from England to the other nations, it would show at a critical time that Theresa May is not just about governing England. We must not resent this process, or belittle our neighbours with embittered talk of economic reliance whenever the question of independence comes up.
The UK has chosen to walk our own path in the world, and so we must cheerfully now accept our responsibilities towards tackling excessive inequality that the EU has carried for us, or risk being unfathomably diminished. We may be four nations, but Theresa May must do what she can for us to remain one united people.
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- Theresa May
- Carwyn Jones
- Income tax
- Margaret Thatcher
- Liberty Stadium
- Nicola Sturgeon
- Article 50
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