Cameron rules out funding changes for Wales

David Cameron’s ongoing battle over the future of devolution continues unabated as he opens yet another area of tension, this time with Wales.

David Cameron’s ongoing battle over the future of devolution continues unabated as he opens yet another area of tension, this time with Wales.

Speaking to BBC Wales, the prime minister has made clear that there are no plans to make changes to the way the Welsh government is funded in the wake of the Scottish referendum.

In 2009, a commission led by Gerald Holtham, a visiting Professor at Cardiff Business School, reported that under the current Barnett Formula, used to determine levels of funding across the devolved nations, Wales loses out to the tune of £300 million a year.

The coalition agreement indicated a long-term ambition to reform the funding system for Wales whilst Lord Barnett, the former Labour chief secretary to the treasury who came up with the formula in the 1970s, has made clear that it is now way past it’s sell by date.

However, following the vow made by the leaders of the three main UK parties to Scotland, which included  a commitment to retaining the Barnett formula, the prime minister has made clear that the UK government will not be seeking to change it, instead turning the tables on the Welsh first minister for refusing to take advantage of new powers to hold a referendum on devolving some control over income tax.

Cameron told BBC Wales:

“There aren’t plans for some huge change in the formula distribution.

“It’s up to different parties to make clear what happens next. For my part, as a Conservative, I want the Welsh assembly to have these powers in order to do more for the Welsh people.”

He continued:

“I do not really understand the first minister’s thinking here, because surely it makes more sense for the Welsh assembly, whatever the level of grant it gets, to have the power to be able to raise and spend more of its own money?

“It sounds like he is making quite a political argument rather than just thinking: ‘These are separate issues, let us do the right thing for the Welsh people and have devolution’ – which is my view.”

First minister Carwyn Jones has repeatedly ruled out a referendum until reforms are made to the Barnett Formula.

Responding to the prime minister’s comments, a spokesperson for the first minister has said:

“This is the exact sort of U-turn we warned against following the referendum in Scotland. The prime minister previously said he would address the fair funding issue, and now he appears to be going back on that.

“What he is proposing would leave Wales worse off, and we cannot accept that. We know that we are being underfunded by £300m a year and this must be addressed without further delay.”

The latest spat between Westminster and Cardiff Bay comes as the four party leaders in the Welsh Assembly prepare to meet today to seek a united front on the extra powers they feel that Wales should have.

Meanwhile, Lib Dems meeting in Glasgow will today debate an emergency motion on the constitution. Proposed by the Scottish secretary Alistair Carmichael, the motion includes a call for the UK government to “empower a constitutional convention, with a citizens’ jury at its core, to produce a new written constitution for a Federal United Kingdom, and to further shape new institutions for England”.

Such calls for a constitutional convention mirror the suggestion made by Labour, and will make any potential talks next year between the Lib Dems and Tories on a second coalition (if that’s the way the votes go) extremely difficulty given that the vast majority of Conservatives would prefer to see more decisive action on the English question rather than a drawn out convention.

Ed Jacobs is a contributing editor to Left Foot Forward

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