Sunday, March 07, 2010

Barnett Formula Again.

Forgot to mention the late fringe meeting, arranged by Positif Politics in my conference round-up. Speaker was Gerry Holtham, who has a nicely relaxed manner, as well as being expert on how Treasury funding is allocated to the devolved nations and the English regions. There were so many questions I'd like to have asked. Got in just one. Top table was too big for a fringe meeting. It should never be more than two, or the audience has little chance to engage.

I've blogged on this issue before - after reading reports of Gerry Holtham's appearance at the Plaid Cymru Conference a few weeks ago. Won't go through the figures again - except to note that Treasury subventions to Wales are a bit on the low side, to Northern Ireland are a bit on the high side, and massively, humongously generous to Scotland - when compared with what it would be if it was all based on the same 'needs' distribution formula that the Treasury already uses in England. The figures also make it clear that England as a whole is underfunded - though its not clear by how much.

The obvious way to sort the problem out is a simple redistribution of the money. But the hit on Scotland would be too great, and could lead to the happy Scots going their own way. I would not like to see that - but I do wish the SNP wouldn't whinge so much. They've got a very good deal indeed. Gerry Holtham's answer to this (actually, I'm being a bit previous here, because its not yet a finalised report) is to transfer some tax raising powers to Wales. This is what has been proposed for Scotland by the Calman Commission, so its more a 'natural progression' rather than 'new thinking'.

What bothers me here is that the imbalanced funding is there now, and it will take years to agree on a satisfactory way of transferring the tax raising powers - if ever. It also seems to me a hugely complex solution (tax raising powers) to what is a simple problem (unbalanced devolved budgets). But it will serve one purpose. Gerry Holtham has taken away Plaid Cymru's 'victim suit' by his calculation about current expenditure patterns, but has given them a new 'cause' which could go on for years - and which no-one would understand. A win-win position for them. There is one good argument for tax raising powers though. It would increase accountability. It would consign the begging bowl to the recycling bin for ever.

7 comments:

ROMAN JONES Esq. said...

The way I see it, there are two ways forward from this Barnett Forumla impass. The first is to create an English Parliament, totally separate from Westminster - maybe not even in London, with tax raising powers. Do the same for the Senedd in Cardiff. All internal expenditure on health, schools, infrastructure etc comes from the tax base of each country - raised in place of council tax. You then have an over-arching government in Westminster that has its income from a reduced % level of income tax and other taxations. The 'propping up' of parts of Britain that are in greater need comes from central govt. redistributing funds from it central income tax pot, but England, Wales, Scotlands, Ulster's internal spending is unaffected. It is little wonder that our English cousins feel resentful. Not only do they pay the most, and get the least back - but they are hit again by NOT having their own democratic control with Scottish and Welsh MPs voting on England only issues. People may say that they do not need another tier of govt in England, but if we abolish the English regions and withdraw from the EU, that would remove those levels to compensate. The alternative to the above is to scrap all devolution and make the UK a single unitary state where there is a much difference between Anglesey and Kent as there is between Kent and Sussex. Universally fair, but very unpopular. By giving the English their rights back, we protect our own future here in Wales!

Tcoah said...

"Barnett Formula Again."

I don't know if the "Barnett Formula" is turning into a yawn*yawn big turn-off to voters like Obama's Health Care plan is to the majority of American voters (despite the biased reporting of much of the British media Obama's ‘leadership’ is becoming as popular as a fresh pile of human excrement on a hot humid day inside a packed police cell).

*just wondering 'is all'*

Let's just say there isn't going to be a "hung Parliament" in the House (House of Representatives) - more specifically, Pelosi will be gone in November.

Tcoah said...

Footnote: then First Minister Rhodri Morgan mocked John McCain who actually spoke up for Airbus being in the running for the "$35bn (£23.3bn)" to replace the American fleet of 179 mid-air refueling planes - Obama has let the steam run out of EADS/Airbus bid for the contract that would have guaranteed thousands of jobs in the UK (especially at the North Wales wing plant).

I mentioned John McCain favoured an open honest bidding process a few times during the run up to the Nov 2008 election - but hey, Welsh politicians like Rhodri Morgan didn't want to know. Protectionism Obama style is now a reality and it is proving costly on Welsh jobs.

PS I am hearing 'from the grapevine' that there's an enquiry in the works on another WAG agency ... this time concerning contracting. "Tell me it ain't so".

Glyn Davies said...

Roman - The case for English control of devolved policy areas in England is unanswerable in my opinion - though personally I prefer the idea of English MPs sitting as an English Parliament on one day per week rather than establishing a new body.

Tcaoh - The Barnett Formula has always been a big yawn. Even now, not many people know what it's purpose is. But it's of interest to me, and so it features from time to time.

The British media is beginning to report the disillusionment that is developing in the US towards Obama. But they went so overboard about him that it will take some time before the scale of it is fully reported. Maybe the next set of elections will do it.

ROMAN JONES Esq. said...

My fear is that if there is no English Parliament, then we still have a lop-sided arrangement in the UK that can be seen as unfair both sides of Offa's Dyke. The English are under-represented, but we in Wales have an extra bureaucratic layer they don't have. It must be fair across the UK.

Tcoah said...

No comment Glyn on EADS/Airbus at Broughton, North Wales losing out on the huge mid-air refueling aircraft deal?

John McCain favoured a fair process - Obama’s team anything but.

This Obama mania has now cost Wales’s jobs - BIG TIME.

As per prediction.

McCain got Airbus back in the running - Obama has let it be known that Airbus and more particularly their American partner should butt out.

Their American partner was told on the QT that they would be better off getting out of the bidding process - or face possible losses on other Pentagon projects.

So much for "politics we can believe in" - Obama is delivering behind closed door arm wrestling and this has cost North Wales hundreds if not thousands of jobs.

That contract would have meant work for years to come at the Broughton wing plant.

This is not a trivial matter.

I doubt that the Welsh press will comment much on it at all.

You are dead right Glyn, the British Media (and certain Welsh politicians, Rhodri Morgan among them) went overboard on Obama. I still remember Rhodri Morgan's partisan speech at the British Embassy - it was shocking. Rhodri Morgan showed his true colours there.

PS Didn't the British press pick up that Obama refused to attend the EU/US summit this year? Even Bush attended them.

ROMAN JONES Esq. said...

What's with all the Obama posts?

Anyway, my beef with him and Billary Clintstone are how they are making sympathetic noises towards Argentina over the Falklands. FOR %@$%£ SAKE! It shows their true gratitude for Afghanistan and Iraq!