John Osmond hears First Minister saying Whitehall attitudes to Welsh devolution are driven more by contempt than respect
The coming Olympic Games, to be held in London in 2012, have had the by-product of signing the death warrant for the Barnett formula which determines the way the Welsh Government is funded. This is the view of former First Minister Rhodri Morgan, set out at the weekend in a sparkling address to an Edinburgh conference on The Politics of Devolution.
It was an aside in a speech devoted to an overview of the working of devolution over the last ten years, but one that underlined the former First Minister’s conviction that the injustices of Wales’ funding in the wake of the Comprehensive Spending Review should be addressed as a priority.
The Treasury has adjudicated that spending on London’s transport, housing and other infrastructure needs caused by the Olympics, are for the benefit of the UK as a whole. Therefore they should not be calculated as a Barnett consequential in which the Welsh Government and the other devolved institutions would receive a commensurate spending increase. The loss to Wales is estimated at around £100 million.
Rhodri Morgan was scathing in his criticisms of the Treasury, which he said lived in a closed world along with the rest of the political class in London. He said the Holtham Commission, established by the Welsh Government to investigate the workings of the Barnett formula, had demonstrated beyond question its inadequacy. He declared that the report had proved a humiliation for the Treasury, which was, he said, “an incompetent mandarate that can’t do sums.”
Morgan added that it was bizarre that the London Coalition government had agreed to revisit the way Wales was funded but only if there was a Yes vote in the referendum on more powers for the Assembly next March. However, the two issues were entirely unconnected. “Commentators in Wales are baffled at why this connection has been made,” he said
Equally, if a reform went ahead the Coalition government was looking to give Wales a Welsh version of the Calman Commission’s recommendations for Scotland, which simply allowed the London and Scottish government’s to share a proportion of the tax base. Although this would increase accountability it would not address a fairer distribution of funds based on need. “What we want is the Holtham Commission’s proposals for change which would reflect Welsh needs,” Rhodri Morgan said, “Calman would give us the wrong base line.”
He illustrated this by pointing out that while Wales had 5 per cent of the UK population, it had 6 per cent of the needs but only 4 per cent of the income. Compared with Scotland Wales had a higher proportion of young people aged under 16 and a higher proportion of older people over 65, groups that both made relatively high demands on public expenditure. Combined there were 578 per thousand people of these groups in Wales, but only 522 in Scotland. Nevertheless, because the present Barnett distribution formula was crudely related only to population size, it gave Scotland more funding.
Speaking at Aberdeen University’s Irish-Scottish Forum, held in the Scottish Parliament in Edinburgh, Rhodri Morgan said he believed that while the Welsh people had broken through a psychological barrier in accepting devolution, the same could not be said of Westminster which was still reluctant to let go.
At the beginning of the devolution process in 1999 the Welsh people had low expectations, he said. But after ten years people were confident that Wales could make its own decisions without devolution descending into jobs for the boys and scandal. This was in contrast to attitudes in Whitehall where the attitude was one of contempt rather than respect. He cited the recent Comprehensive Spending Review in which Wales had got nothing except a Calman version of reform of Barnett, and then only if we vote yes in the referendum.”
6 thoughts on “Olympic Games sign death warrant for Barnett formula”
But the key is reducing the amount of money going to Scotland. It’s a political decision not an economic one as Gerry Holtham points out. You can’t blame the lack of reform of Barnett on the attitude of civil servants in Whitehall. After all it’s ministers who are supposed to decide policy change not civil servants. Reform based on need might not be easy as anyone familiar with the formula for local government would understand. But if the politicians at Westminster decide that reform should happen then civil servants would produce a formula based on need not population without batting an eyelid. The political problem is that it would lead to a large reduction in the amount of money going to Scotland. No politician from Scotland whatever their political persuasion could ever agree to such a move for obvious reasons. Since Labour would not probably be able to form a government in Westminster without Scottish MPs then this probably means that the Labour Party in practice would be reluctant particularly in the present climate to try to look at reforming Barnett. If no one was prepared to contemplate reform in the years of plenty we are unlikely to see any change in the years of austerity. Although logic would also suggest that the Tories because of their lack of support in Scotland have less to lose politically then Labour from the reform of Barnett. What Rhodri Morgan’s comments again show ,however, is that Wales and Scotland do not have the same interests when it comes to the refom of Barnett. Wales has nothing to gain from hanging on to the coat tails of Scottish politicians such as Alex Salmond. They also conclusively show that linking the idea of extra money to a’yes’ vote next March is really to mislead the electorate. The introduction of a Calman solution for Wales might increase accountability which in itself would be a positive improvement on the present situation but it would not lead to any extra money. The result next March will in practice as Rhodri Morgan quite rightly points out have no effect whatsoever on the amount of money available to the Assembly in the foreseebale future. To suggest otherwise it might be argued is really misleading voters.
It is ironic to see Labour stealing Plaid Cymru’s clothes on this – but only now that they are not in a position to do anything about it!
Why wasn’t Rhodri preaching this doctrine years ago. and taking Peter Hain and the Treasury on head to head, while they were still in power in London?
(Rhetorical question – I think we all know the answer!)
Jeff Jones’s remarks perhaps reveal more than he intended. He says Labour would be reluctant to reform Barnett beacuse of their position in Scotland, and in their own self interest. What are Welsh voters to make of a party which claims that although Wales does not get treated fairly, they will not change things because it might harm their prospects elsewhere? Is this how they represent the interests of their constituents? In reality the Labour Party is, and has always been, prepared to sacrifice fair play for Wales in order to achieve power in Westminster. He is right that Wales and Scotland do not have the same interests in this case, and it is time for Labour Welsh MPs to support the interests of the people of Wales, and demand reform of the Barnett formula (which they have conspicuously failed to do in the past)rather than worry about the concerns of their colleagues in Scotland.
Jeff has rightly pointed out that Labour are hardly likely to snub Scotland when they rely on their MPs. However, this then puts into the spotlight the utter lack of consistency from Labour in Wales, who only appear to stand up for us when they have no influence to do anything about it. Peter Hain has been exactly the same on fair funding.
Surely, this is an argument for more Plaid support as the party claiming to be the true party of Wales (Labour), is clearly compromised by London politics.
Why should the English taxpayer keep funding a failed Welsh leftwing theme park? Its been shown that socialist policies on NHS and schools in Wales give worse performance at greater cost and rather than reform you demand more English money. Grow up !
Man in a Shed
What do reckon went wrong in Mid Staffordshire NHS Trust?
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