Interesting article in this morning’s Western Mail, which picks up on my point in another place that the Prime Minister does not understand the Barnett Formula. Chief Reporter, Martin Shipton’s other point is interesting:
In his conference speech on Saturday, Rhodri Morgan allowed his enthusiasm for attacking Plaid Cymru’s launch of a website advocating independence to propel him into a position where he effectively admitted that Wales was being robbed blind by the Treasury.
The admission came in this sentence: “We know that Wales has 5% of the UK’s population, but we only generate 4% of the UK’s taxes and have roughly 6% of the UK’s needs.”
Economic experts tell me that if Wales’ block grant were increased to a needs level based on 6% of the UK, the Treasury would have to send around £1.6bn a year more to Cardiff Bay than it is doing currently.
It’s very nice of the First Minister to share his view of the figures with his conference delegates, but it might have been an idea if Welsh Labour had made a submission along those lines to the commission appointed by the Assembly Government to review the workings of the Barnett Formula.
I have had a brief e-mail conversation with Martin this morning on this issue but remain unconvinced that Rhodri Morgan was doing anything but setting out the status quo, translating what we actually get into what we need to underline his point.
It is common ground between myself and Martin Shipton that the Barnett formula does not reflect need and that if it were amended to do so then Wales would receive a lot more money. However, we already receive 5.9% of the amount that the UK Government spends on devolved matters.
Martin’s point is that we receive 5.9% of expenditure in England (as opposed to the UK) but I would contend that as these are devolved issues then the point is largely academic. We have never received a percentage of all UK expenditure, just that spending for which the Assembly is responsible.
The point that Martin makes is a valid one nevertheless. We are being short-changed and we need to do something about it. Where we disagree is on whether Rhodri Morgan has finally acknowledged that, no matter how inadvertently.
I suspect not and I believe that the outcome of the Holtham Review will be quietly buried by Labour rather than rock the boat with an unsympathetic UK Government who clearly already believe that we are getting what we are due.
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