Bewilderment and dismay was the overwhelming response among politicians in Cardiff Bay when Wales voted No in the EU referendum. Their feelings were summed up by ardent pro-European Eluned Morgan, Labour Assembly Member for Mid and West Wales, in a speech at Aberystwyth University in early March. She recalled that during the Brexit campaign she stopped a young woman walking arm in arm with her boyfriend in Swansea.
“I asked her how she was going to vote and she said that she was going to vote to leave because she thought there were too many immigrants. After a bit of a discussion I turned to her shy boyfriend. ‘What about you?’ I asked. He looked at me and clearly did not understand – he was from Poland.”
There are fewer EU migrants in Wales that most parts of Britain, just 2.6% of the population, or 79,100 out of three million. Nevertheless, according to the British Social Attitudes Survey, 71% of Welsh respondents thought EU migrants brought more costs than benefits.
Eluned Morgan says political perceptions are trumping economic self-interest. “My main insight into what is going on is to understand that what we are seeing is the triumph of politics over economics.”
In the referendum Wales voted against its economic self-interest. It is a net beneficiary of EU membership, currently receiving around £680m a year in funding. European and Structural Investment Funds amount to some £370m annually. In addition, Wales receives around £274m each year in direct subsidies from the Common Agricultural Policy. Moreover 67% of Welsh exports go to the EU compared with 48% for the rest of the UK.
The dilemma for Welsh politicians is that when they point out these statistics to the London government they have desperately little leverage. Their nightmare, somewhere down the road, is for them to be left hanging while Scotland and Northern Ireland, which both voted to stay, negotiate preferential deals. Scotland has the threat of calling another independence referendum. Northern Ireland has the border issue. And Wales?
Welsh powerlessness explains why in January the Labour government in Cardiff Bay joined forces with its main opposition party Plaid Cymru in publishing a White Paper, Securing Wales’ Future, laying out their case on European policy. It contains a detailed analysis of the importance of the single market for the Welsh economy, proposals for promoting continued investment, dealing with migration, and continuing with current social and environmental protections emanating from Brussels.
But the most significant parts of the White Paper are its constitutional ideas. It says that European withdrawal will mark a constitutional turning point for the UK. “We believe that the scale of change which will flow from leaving the EU demands that the UK is remodelled around new, more federal, structures.”
Coming as a joint statement by Labour and Plaid Cymru this is a significant intervention. However, it will receive short shrift in Westminster until such time as it is seen as a positive answer to Scottish independence.
Meanwhile, the imminence of Brexit is requiring new thinking in Wales. This was acknowledged by Eluned Morgan in her speech. Widely seen as a successor to Labour’s First Minister Carwyn Jones, she said Wales had to turn a difficult situation into an opportunity.
“We must come up with a proactive interventionist economic policy and break our long term dependence on the state and reinvent ourselves as wealth creators,” she said.
“We must use this time also to prepare for the next economic revolution with the onset of automation and ensure that we equip our people with a range of adaptable skills. None of this is going to be easy. I predict at least a decade of social and economic instability. But once Article 50 is triggered we will have no choice but to walk this difficult obstacle course.”
The last Labour politician in Wales to talk about overcoming a dependence culture was Ron Davies in the 1990s. That was in the run-up to the 1997 devolution referendum when, as Secretary of State, he reached out to other parties to join him in driving Wales forward. The reward was a political opening. Twenty years later some in Welsh Labour are hoping that the Brexit crisis will provide an equivalent opportunity.
Edited by Hugo Dixon