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What would be the future for Wales if, as many fear, Brexit leads to the break-up of the UK?

Sooner or later, Scotland will have another independence referendum. And in Northern Ireland, the choice of a future in the UK or membership of the EU is very different to that previously faced.

Where would that leave Wales? Does the huge subsidy we receive from Westminster, approaching £15bn every year, mean our options are limited?

Or is there another way?

We spoke to several economists to see if they could see a way for Wales to thrive without the UK.

Danny Blanchflower - former Bank of England rate setter

(Image: Handout)

Professor David Blanchflower came to fame as a member of the Bank of England’s interest rate-setting Monetary Policy Committee.

He is now an economist at Dartmouth College in the USA.

He says Wales might well thrive in the EU without England.

Prof Blanchflower argues that people in Wales may decide they are “better off within the European Union with our friends from Ireland and Scotland and France and the Netherlands”.

The Welsh-educated professor does not think the nation would have a future as an independent state entirely on its own, but suggested one possibility could be “Northern Ireland, Wales and Scotland together as some kind of informal grouping of a disunited kingdom with the European Union”.

He said: “The one thing that you might see if Wales went to be independent is lots of people would move there... People have not considered the possibility that people potentially would move to you who are unhappy with this right-wing nonsense.”

He believes Wales might thrive by “attracting-in the sensible”.

He said: “If you were a firm or a worker in Bristol and this was to happen, you’d suddenly think that Newport and Swansea and Cardiff looked incredibly attractive.”

Wales, he said, could look like “a place of rationality and calm and order amidst the chaos around us” and a “place of attraction for firms running away from the madness”.

Other economists who see challenges ahead for Wales as Brexit looms also stress the difficulty the nation would face if it pursued independence in Europe.

Richard Grossman, Professor of Economics at Wesleyan University and Visiting Scholar at Harvard

Prof Grossman has a grim diagnosis of what Brexit will mean for Wales.

He said: “From an economic perspective, Brexit was a mistake. The UK will not collapse because of it, but it will be less prosperous than it would otherwise have been.

“Wales will also be less prosperous, both because of the net flow of EU funds and because the UK will be less well off.”

The economist does not detect a “great deal of sentiment in favour of independence for Wales at the moment” but said this “could change if Scotland leaves the UK, although the ties of Wales to the UK are older and arguably stronger and devolution in Wales seems to be less pronounced than that of Scotland and Northern Ireland”.

He suggested that if Scotland leaves the UK Wales could “negotiate a better fiscal deal with England” by changing the Barnett formula which is used to allocate Treasury cash to the Welsh Government.

Prof Grossman said it was not the case that Wales “could not” be independent within the EU and noted the nation is “certainly more populous” than EU states such as Latvia, Lithuania and Cyprus.

But he said it was “not clear how a hard border between the EU (assuming Wales could gain entry) and the UK would serve Wales’ interests”.

Jacob Funk Kirkegaard, expert on European economies at the Washington DC-based Peterson Institute for International Economics

This economist, who worked with the United Nations in Iraq, considers Welsh independence within the EU an unlikely prospect.

He said: “I think it is quite a long shot, to be frank. I think everybody agrees with that – even the Welsh nationalists probably agree with that.”

Dr Kirkegaard argued the process of “getting there” would be “a little bit like Greece trying to get out of the euro”.

He said: “In many ways, getting its own currency would be probably good for Greece but the process of doing that would be incredibly painful and therefore it’s a bad idea.”

For Scottish or Welsh independence to be economically and politically appealing, he argued, it would have to be predicated on “the UK economy doing very poorly”.

He said: “In some ways I think the best you can hope for from the perspective of a nationalist party in Wales is perhaps what Gordon Brown and others have been talking about, which is a sort of federalising version of the UK rather than outright independence.”

However, he did not expect securing EU membership would be a major challenge if Wales and Scotland decided to take the plunge.

There had been speculation that Spain would try and thwart an independent Scotland’s efforts to join the EU for fear Catalonia might try to follow its example and cut the cord with Madrid. But Spain’s foreign minister this week said his country would not “initially” block Scotland’s attempt to join the EU club.

Dr Kirkegaard said: “I would wager that if [Scotland] voted to leave they could join quite rapidly. They have the same legislative rules and all that and Spain won’t block it.

“The same would apply for Wales.”

Professor Sir Tom Devine, University of Edinburgh

(Image: Sunday Mail)

The scale of the “adversity” and austerity that Wales and Scotland could face if these nations backed independence was underscored by Professor Sir Tom Devine of the University of Edinburgh.

The professor, who is arguably Scotland’s highest-profile historian, said: “Achieving independence either for Scotland, Wales or Northern Ireland would be challenging.

"Even more so would be the aftermath: possibly years of austerity as the newly independent [countries] struggle to reduce post-union fiscal deficits and confront other problems.”

He added: “There is some evidence that many Scots are now realistic about this but are still willing to vote to leave the union. That political will (or estrangement) has built over several decades.

“I do not detect the same process in Wales, ie to face short-term inevitable adversity for what nationalists in Scotland see as long-term good.”

Professor Calvin Jones, Cardiff University economist

Professor Calvin Jones of Cardiff University’s business school outlined the stark choices he believes Wales must confront if independence is ever to be seriously considered. This will involve facing up to the enduring weaknesses of our economy.

He said it was “not really possible to judge the long term economic sustainability of an independent (or self-financing) Wales” because it has “simply never been tried in the industrial age”.

Wales, he said, has traditionally been a place where corporations have “gone to employ low cost labour and exploit natural resources”.

Describing the effects of low levels of ownership of the economy, he said: “This, together with broader global economic change that has destroyed demand for working class labour and agricultural products has led to disenchantment, disengagement and poverty – of ideas as well as materials – and the dominance of the central state as a crutch.

“The key issue here is that independence would not, per se, change any of this.”

For an independent Wales to “succeed”, he argued, there were two key options.

The first was to “invent a new economy that captured much more value locally” – as well as “re-orienting citizens to be satisfied with lower levels of material prosperity, but perhaps more robust communities in return”. He noted this would be “legally, politically and behaviourally incredibly difficult”.

The second option was to “go cap-in-hand to Brussels as a poor new EU accession country and put up with continued but perhaps more benign statism.”

Eurfyl ap Gwilym, economist and Plaid Cymru representative on the Silk Commission

Eurfyl ap Gwilym, a Plaid Cymru-supporting economist who served on the cross-party Silk Commission on the future of Welsh devolution, does not anticipate an immediate rush to push for Welsh independence within the EU.

He said: “Posing the question as to whether Wales could thrive in the EU as an independent nation state post-Brexit begs too many questions to elicit an authoritative answer at this stage. Too little is known about the explicit form that Brexit will take for anyone to be able to forecast with confidence the future either in terms of the UK and Welsh economies or the constitutional arrangements within the UK.”

But he does expect that the Brexit drama will spur people to think about the country’s future and he can see “dangers and opportunities”.

He said: “We really need to be very agile and alert, I’m sure the Scots will be, to try as much as possible to both defend and promote our own interests.”

The economist spies an opportunity to push for a new relationship between the UK’s nations – confederalism – which would ensure that England with its comparatively giant population did not dominate all decisions.

He said: “I think there could be much more development looking towards a confederal United Kingdom as a stepping stone. That was an idea floated, by the way, by people like Gwynfor Evans in the 1950s and 1960s before we joined what was then the Common Market.”

Could it happen here?

Supporters of Welsh independence were campaigning for their goal long before anyone had heard of the European Union, and they will keep their dream alive whatever happens with Brexit.

Welsh independence may be an idea that today only sets the pulses of the most committed activists racing, but they can take comfort from the fact that a very short while ago the notion of leaving the European Union seemed an extraordinary and far-fetched proposal.

Likewise, people who were devastated when Wales rejected devolution in 1979 refused to give up the fight. Many of them have lived to cheer the foundation of an Assembly in Cardiff Bay with primary law-making powers.