What Would Brexit Mean For Wales?

Brian Oliphant says there are serious potential risks for Wales where Brexit is concerned.

What would a UK exit from the European Union mean for Wales? The UK has been connected to the EEC since 1973, transitioning into the EU with its formal establishment with the Maastricht Treaty in 1993, and has ever since been deeply linked with the majority of Europe in economic and political matters alike. In recent years however, many in the UK have grown increasingly skeptical of the benefits of this arrangement. The result is that we’re now approaching an official referendum on the possibility of a so-called “Brexit”—the UK’s official exit from the EU. But more often than not, this concept has been considered primarily from an English point of view. Where Wales is concerned, the consequences may be different.

Europe: In or Out?

This week on Click on Wales we are debating whether Wales should remain in Europe ahead of the referendum on June 23rd.

You can read all of the series here.

While immigration and national security have been at the core of many of the debates about the Brexit, the primary focus for a lot of citizens in England and Wales alike is what effect the decision would have on the economy. There’s a belief among some Brexit sceptics that should the UK branch off to create its own economy separate from Europe, it would create widespread job losses and uncertainty. However, the counterargument is that an independent UK economy could afford lower taxes with less of an economic burden stemming from immigration. In Wales specifically, it might not be that simple.

In fact, while Brexit-related polls in England reveal that a significant portion of the population has a Eurosceptic point of view, similar polls in Wales show more sympathy for the EU. This is for several reasons, one of which is deeply rooted in the Welsh identity. The largely social democratic nature of Wales lends itself toward a more liberal and progressive attitude, which generally falls in line with those in favour of the UK’s membership in the EU. Whereas the Brexit, despite being radical in nature, is viewed as a conservative approach to the future. The economic difference between England and Wales also plays a key role. Broadly speaking, Wales stands to benefit from foreign investment under the current arrangement, but a more isolated economy could result in significant struggles for the poorer economy.

More specifically, the agriculture sector of the Welsh economy could see significant problems in the aftermath of a Brexit. Agriculture directly contributes £217 million to the Welsh economy each year, with 4.4% of the total population employed through farming. Those numbers are significant on their own, but when you factor in the broader impact of the farming industry, they grow greater. The Welsh food and drink sector accounts for £2.8 billion (largely as a product of the agriculture industry), and another 17% of people are employed through jobs connected to food and drink. Adding that all up, over £3 billion of the Welsh economy and 20% of the work force can be tied to a farming industry that could be in jeopardy in the event of a Brexit.

In fact, First Minister Carwyn Jones has warned that the farming industry in Wales could effectively come to an end” if the UK does indeed vote to split away from the EU. The comment was made as part of Welsh Labour’s ongoing campaign against the Brexit, and Jones went on to elaborate that he’s sceptical of trade with Europe should the UK become independent. While some believe a free trade agreement would be imminent, Jones isn’t as confident. He believes that, in the interim, Welsh farmers will miss out on a great deal of money needed to keep the farming industry going. Roughly £200 million in European subsidies come into Wales under the EU agreement, but perhaps even more importantly Welsh gains direct access to exporting rights within the union. Without this structure in place, all of the jobs and money connected to Welsh farming would be in danger.

Still, while this sounds like a grim outlook for Wales, it’s important to remember that at this stage it’s all hypothetical. It’s not known what the UK economy would look like following a Brexit, or whether Wales might still be able to enjoy some manner of trade agreement with the remaining EU. However as of now, there are at least serious risk factors for the economic and social identities of Wales where the Brexit is concerned.

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