30th April 2009
The Long Arc of Insolvency
In the 1997 St David’ Day Debate Denzil Davies, the former Labour MP for Llanelli, argued that an independent Wales would have a 15% fiscal deficit and that this meant that Wales could not be independent:
“We are talking about a deficit of 15 per cent. for the Welsh economy, and that is on favourable assumptions. I do not believe that any country in the western world could survive with such a deficit. It would be impossible to fund a deficit of 15 per cent. Who would fund it? The banks certainly would not fund it, nor would major international corporations. The International Monetary Fund would not fund it without substantial cuts in public expenditure. It just would not happen.”
Rhodri Morgan seemed to agree with him:
“Mr. Denzil Davies: For the record, my remarks were not made in the context of a Maastricht debate. I said that a country with a fiscal deficit of 15 per cent. could not exist as an independent country.
Mr. Morgan: I paraphrased my right hon. Friend wrongly. He is right. He specifically excluded Maastricht. He used the figures in his argument against the hon. Member for Ynys Mon (Mr. Jones). How does the conclusion in the Secretary of State’s booklet that Wales has only 4 per cent. of Great Britain’s GDP and 5 per cent. of its population fit the picture painted in his speech? We must say, “Hang on a minute, Secretary of State. Where is this land of milk and honey with its vast numbers of jobs that you are claiming to be leading, indeed to have created?”
It’s a figure that Denzil Davies ghas repeated time and time again like an article of faith. Now the IMF is predicting a UK fiscal deficit of over 11%, we are within 4% of the UK ceasing to be an independent country according to Labour’s logic. Or is it OK for Britian to run a double digit deficit, just not OK if it’s Wales.
Figures prepared by Plaid economics guru Eurfyl ap Gwilym show just how profligate New Labour have been: in the decade 1999-2009 the economy grew by 52.4% (in cash terms), government expenditure grew by 92.3% but tax only grew by 52.4%. No wonder we are in a mess. Can anyone honestly say that a Welsh Government could have done any worse?
So much for Rhodri’s “great mutual insurance scheme”. They haven’t been paying the premiums.
2 Responses to “The Long Arc of Insolvency”
Leave a Reply
You can comment on this article. but you must register first.
Your reply will be moderated and not appear immediately.
You can prepare your text in a word processor before pasting it into the box, but formatting such as bold and colour will not appear.
You must be logged in to post a comment.
MH says:
April 30th, 2009 at 9:55 pm
Have you got a link to Eurfyl’s figures?
leighrichards says:
May 2nd, 2009 at 11:25 am
would be interesting to see what those figures for taxation revenues would look like if the uk had had a top tax rate of 50 percent for the highest earners?
It is interesting to see how the super rich are mobilising against this after having had it easy in the uk since lawsons budget in the 80s! As i think in a self governing wales we woud need a top tax rate of at least 50 percent !
I know sweden - which i like to think of as being a model for the kind of wales i would like to see - has a much higher rate for high earners