The Western Mail, at least, made much of Danny Alexander’s appearance before the National Assembly’s Finance Committee today. What’s really interesting, though, is not the fact of the Chief Secretary to the Treasury’s appearance or the ‘grilling’ he got from AMs, but what he appears to have had to say about reforming devolution’s financial arrangements. There’s a report from BBC News here, a piece from Betsan Powys’s blog here, and a report from the Western Mail here. On one hand, he refused to commit to any revision of the basis of the block grant in the foreseeable future. On the other, he accepted that there was a ‘strong case’ for fiscal powers as recommended by the Holtham Commission, if there were cross-party support for that from the National Assembly.
It’s welcome news that Alexander accepts that the case for such devolved powers is a compelling one, and that strengthening devolution is about something more than simply the outcome of the referendum on the Assembly’s legislative powers. The fact that the Treasury, in his person, can accept the case in principle for such powers for Wales as well as Scotland is highly encouraging and suggests that the Coalition’s thinking about devolution finance has made quite some progress since it came to office.
However, it’s regrettable that Alexander doesn’t seem to have understood that the various elements of the Holtham Commission’s recommendations – a needs-related grant, borrowing powers and limited fiscal powers – are linked. ‘Fairness’ can only be delivered by ensuring that public services in Wales overall are properly funded, and by carefully calculating the deduction from the block grant to allow for fiscal powers. These aren’t in fact separate issues – they’re the two ends of a single thread. And as the Assembly has already resolved, unanimously, to endorse the Holtham recommendations (previously discussed HERE), there aren’t really any excuses for inaction.