There are of course other options. In the absence of a currency union so-called sterlingisation would be an alternative, certainly in the short term. In this scenario the pound would remain the currency but used without the consent of the Bank of England. The major weakness would be no Central Bank to act as lender of last resort and no control over interest rates — although the latter would still apply with a currency union. Interestingly, there is an argument that such an arrangement would work over the longer term, as is the case with some Latin American countries that use the US Dollar.
There is of course the option of a new, separate currency. This is not as fanciful as it may seem. Wales would be fully responsible for its own future, policy priorities and choices. Such a system would allow control of both fiscal and monetary policy instruments fundamental to driving economic growth and heaven knows we need that! Many small countries that have emerged over the past century — and for that matter only since the end of empire and the Soviet Union — developed and use their own currencies.
In his contribution earlier this year, Mike Hedges pointed to the relative ease with which the former two nations of Czechoslovakia launched their own, separate currencies. There will be a need for a new central bank. Since the end of the second world war no fewer than 25 new central banks have been established, many in Europe.
The role of a central bank — inter alia — is to set the interest rate and act as a lender of last resort. This latter responsibility of course requires that such a fund be available.
How this figure was arrived at is at best unclear as indeed were his comments during that campaign. Whilst there will be the need for such a fund, it will not of course be required from day one. The existing clearing banks — all of which are required to hold their own reserves — would be required to register as separate, Welsh businesses probably within a Wales Stock Exchange.
This is what happens in other European states. He mis-states the concept of GDP. It is not a summation of final goods production but of value added in the production of all goods and services including intermediate ones. The only exceptions are imports and exports which are gross production quantities, including material content. There is no great field of economic activity in Wales excluded from national accounting. The main unrecorded activities are criminal: the production and distribution of illegal drugs and prostitution.
No doubt welfare would be enhanced if these were legalized, regulated and taxed but doing so would not come near closing the budget deficit. Note that estimates of Welsh GVA are made purely on the income side and do include a certain amount of imputation; there are no expenditure estimates of GVA. We certainly do need better statistics but we would have to pay for them. Other scale economies in governance would be lost too. We would have to set up departments to raise taxes and administer all surviving forms of social security.
We would have to pay for our own police but that is included in the deficit figures. JB is a rather insouciant about borrowing. The divorce settlement with the U. His thoughts on tax, however, are uniformly misleading. Water is a hopeless tax base.
What sort of tax rate could you levy — 1 or 2 per cent? We could tax water exports at a higher rate but very much higher would be regarded as blackmail. England could retaliate in numerous ways: electricity grid, road links to Europe etc. Not a good fight to pick. Land tax: this base is already exploited via council tax and business rates — both highly unpopular.
Recovery started later in Wales, and structural changes left a legacy of high unemployment amongst older men, especially in the Valleys.
Today, Wales remains a lagging region within the wider United Kingdom economy. Over the long term, output and productivity growth in Wales has been broadly in line with the UK and the developed world as a whole, although there are some unexplained gaps in particular service industries. What has marked Wales out is a low activity rate compared to other parts of the UK.
Average farm size is 30—40 hectares, small by UK standards, and dominated by family-run enterprises. The Welsh fishing industry is the smallest in the UK, with about 1, full-time and part-time fishermen. The minor role that the Welsh industry holds is largely due to its geographical isolation, weak distribution networks and the demise of the Wales distant-water fleet from the s onwards.
Wales has a diverse manufacturing sector. Heavy industry, once a mainstay of the Welsh economy, has largely been in decline over the past century but is still very apparent. Metal ore refining is a long established industry in Wales. Nearly all the tinplate and much of the aluminium produced in the UK are made in Welsh plants. Milford Haven has two oil refineries : around a fifth of United Kingdom capacity. Wales is an important producer of automotive components: Ford has a major engine plant at Bridgend , and BorgWarner has a major components plant in Kenfig, South Wales.
Timet has a plant in Waunarlwydd, Swansea , which is one of the world's major suppliers of titanium for jet engine blades and medical applications. During the s and s, a major growth sector in manufacturing was the electronics industry with over North American and 35 Japanese companies establishing operations in Wales. However, this is a characteristic of a "branch factory" economy where routine production is located in one region while higher skill activities are located in another.
As part of the United Kingdom and the European Union, Wales fully participates in the single market and free trade area which exists across all EU member states and regions. Recently, with the high rates of growth in many emerging economies of southeast Asia and the Middle East such as China, UAE and Singapore, there has been a drive towards marketing Welsh products and manufactured goods in these countries, with China and Qatar entering the top ten destinations for Welsh exports in In recent years, the service sector in Wales has seen above average growth; however in its share of GVA was small compared with most other regions of the UK.
This site uses animations - these my cause issues for some people and can be turned off. Sub sections Investment. A thriving enterprise Find out about Wales' rich history of innovation and the thriving culture of enterprise.
Topics: Overview. Exports from Wales. See more of Wales' exports. Topics: Made. North Wales. Welsh Produce. Wales is once again least productive of the UK nations and regions, according to the latest figures on the economy. GVA calculates the value of what we produce in terms of services we give and the things we make at work. The GVA in Wales grew by 2. They help tell us more about how people in different areas are fairing in terms of their opportunities and living standards.
As the figures calculate the value of the work that people do at their place of work - it does not tell us where the wealthiest people live. Although Anglesey has the lowest GVA for Wales there are many people living there with high household incomes. So, if they work in Bangor or Manchester, the value of their work will be calculated there. The island also has a higher proportion of retired people, so will see its average GVA fall as those people may not be generating value directly on Anglesey.
But when we look at employment figures for Blaenau Gwent -
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