17th October 2007
Follow the money
Who gets what, where and how was Harold Lasswell’s famous distillation of the meaning of politics. And having just heard Benn junior defending the UK Government’s decision to pay foot-and-mouth compensation to English farmers only – despite an earlier draft statement saying they would pay up for Wales and Scotland too, despite previous precedent and despite the outbreak having emanated from a UK Government laboratory – I think I know what he meant. If geo-politics in these islands used to be about ‘who rules’ it’s increasingly about ‘who pays’. We are fast moving from debates about legislative competence to cash: the Barnett Formula, corporation tax powers, borrowing powers, fiscal autonomy, the Oil Fund for Scotland, the peace dividend for northern Ireland.
Alun Michael’s demise at the beginning of this decade over the lack of matching funds for the European Objective One programme was the first political scalp of the new fault line in British politics. What was most striking in the Chamber just now was seeing Welsh and Scottish Lib Dem MPs standing along with my SNP/Plaid colleagues to defend the Welsh and Scottish Governments against Westminster. Politics is becoming more territorial, less ideological. Even Welsh Labour – through the One Wales Government – was markedly more muted than Welsh Secretary Peter Hain about a ‘tight settlement’ for Wales in the CSR - and was happy for Elin Jones, the Plaid Cymru Agriculture Minister to go on the war path about Wales’ missing FMD funds. One thing is clear, at 0.7% real terms growth for Wales for next year the settlement is worse than expected – the worse on record in fact since 1998 when Labour stuck rigidly to William Hague’s spending plans. Arguably, it’s the worse settlement for twenty five years because of the £260 million – a whopping £780 million if you calculate its cumulative effect over three years – stolen from the Welsh budget by ‘fixing’ the baseline. Claiming back money from Wales because English departments failed to spend them is a kind of ‘reverse Barnett’ that has never to my knowledge been tried before. And, as David Cornock from BBC Wales has pointed out, it’s double the money that John Redwood returned to the Tories when he was Welsh Secretary that Welsh Labour MPs are always so fond of reminding everyone.
Scotland and northern Ireland did even worse, of course. Maybe even Unionists soon will see the need to bin the Barnett Formula and replace it with fiscal federalism – as the SNP argue for Scotland – or a needs-based formula as we argue in Wales. After all, we’re all nationalists now.
2 Responses to “Follow the money”
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Rhydian says:
October 17th, 2007 at 7:57 pm
I agree with all that, except the bit about Scotland. First of all, it was a very poor settlement for us - the only, very small, mercy is that it was no worse, as I had been expecting. The tangled web that Gordon Brown has been weaving for the past ten years has caught Labour in a sticky mess of public finances. The levels of borrowing involved in New Labour’s plans have caught up with them - and Wales’ financial problem is of London’s doing. As for Scotland, the Barnett formula underestimates Welsh need, so it may not be entirely true that Scotland did even worse than Wales.
You rightly hope of the replacement of this formula - which has cost over £8bn to Wales since 1999 only - with a needs based formula. And it is true, and rightly so, that we are fast moving towards debates about legislative competence. The next steps for us in Plaid Cymru is to have our internal debates, so that when the real arguments come up, we already have the answer.
alanindyfed says:
October 18th, 2007 at 2:52 pm
You are right in saying that politics is becoming more territorial and less ideological. In my view that is the way it should go, certainly for us in Plaid, as the issues are about Wales, its economy and its infrastructure (what there is of it). The road and rail programme appears to be moving towards patching up and making do rather than the grand vision of national integration and linking the various regions of the nation with efficient road and rail systems. This is what independence has achieved for Ireland and it is still ongoing. Now it is very much a problem of funding. Ideological differences should be put aside in a united push for fiscal justice.