Vote Yes and get more money

An insight into how the Welsh Government will be making its case in the forthcoming referendum on more powers for the National Assembly

John Osmond is Director of the IWA

First Minister Carwyn Jones dropped a broad hint last night of how he intends to play the forthcoming referendum on more powers for the National Assembly. “If the people vote Yes we get more money,” was the way he put it.

He was speaking alongside Deputy First Minister Ieuan Wyn Jones at an event in the Pierhead Building in Cardiff Bay to mark the third anniversary of the One Wales coalition agreement that Labour and Plaid Cymru signed in the summer of 2007.

Responding to a question of how they would run a Yes campaign Carwyn Jones quoted the recent coalition agreement between the Conservatives and Liberal Democrats in Westminster which rejected any immediate review of the way the Assembly is funded. This, it said, had “await the stabilization of the pubic finances”.  However, it went on to add, “Depending on the outcome of the forthcoming referendum, we will establish a process similar to the Calman Commission for the Welsh Assembly”.

Carwyn Jones rightly interprets this to mean that, if there is a Yes vote the London government will set up a review along the lines of the Calman Commission which has examined the Scottish Parliament’s funding and the case for taxation powers. Such a review would have to revisit the Barnett formula which calculates the distribution of the block grant to the devolved administrations.

The Welsh Government’s own Holtham Commission has already definitively demonstrated that Wales has been losing out by at east £300 million a year as a result of the way the Barnett formula works. This is because it is calculated largely on the basis of a population count rather than taking need into account. The Holtham Commission has worked out that Wales would be entitled to more money if devolution was funded on a needs-based system analogous to the one used by the Treasury to distribute money to the English regions.

Hence Carwyn Jones’s mantra – “Vote Yes and get more money”. Although, of course, there is no logic to the case for tying Wales’s claim for extra funding to a Yes vote on more legislative powers. Why should the two be linked? The only answer is that this is the way the politics of devolution works. As with Scotland, London only takes notice of Wales to the extent that it presents some kind of threat or looks like wanting to wield a bit more power. Its an obvious lesson but we in Wales are slow learners.

Last night Carwyn Jones and Ieuan Wyn Jones were fulsome in their praise of the way the One Wales agreement has worked out and of the trust they have found in each another. Carwyn said they made a good doubles act though, as he put it, when it came to singles – as it would in the Assembly election next year – they would play hard ball.

In his speech Ieuan Wyn Jones went through some of the 237 specific commitments made in the One Wales agreement. He said that, with 36 of the 46 months of the agreement having been completed, 156 of the commitments had been delivered, which left 81 outstanding. Of these, 64 were scheduled for completion by May 2011, and the remaining 17 would “be completed during the next Assembly”.

After his speech I asked him to explain further what the outstanding 17 were, why they would not be fulfilled before next May, and whether the reference to them being carried out in the Assembly’s next term implied he was assuming that the Labour Plaid coalition would be continuing.

Naturally he side-stepped the last part of the question, saying it would be up to the voters to decide. The main issue that was unresolved, he said, was the One Wales commitment to pursue full employment in Wales, defined as being 80 per cent of the population with a job. Given that the Welsh Government doesn’t have control of the main economic levers – over macro-economic policy and fiscal powers – this was a pretty heroic aspiration anyway. But Ieuan Wyn Jones said that before the recession kicked in they had been making good progress, edging into the low 70s in terms of percentages. Currently the figure stands at 69 per cent.

If you want to examine the Welsh Government’s full end of term report on its performance go to www.wales.gov.uk/onewales

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