A belated weekly round-up, 21 June 2011

Last week included a number of significant events that were easy to overlook.

In the Lords, there was a debate on the Barnett formula triggered by the embarrassed Lord Barnett (embarrassed by the continued use of the formula that bears his name), on Wednesday 15 June.  The contributions largely trod now-familiar ground in their Lordships’ house, of calling for a needs-based approach to the allocation of funding, from a mixture of peers with English, Welsh or Conservative connections, coupled with hedging or dodging ones with Scottish ones and the UK Government.  The Hansard record of the debate can be found here.  The speech by Lord de Mauley, for the government at the close (at col 868) is a masterpiece of Treasury stonewalling.  And while some speakers did mention of the Scotland bill, there’s little consideration here at all of the wider fiscal debates, or of the complex issues that arise if one is to seek to balance UK-wide equity with devolved autonomy.

Meanwhile, Cheryl Gillan, the Welsh Secretary, repeated her view that the Barnett formula is ‘coming to the end of its useful life’ at Commons Welsh Questions on 11 May (not a new position – she’s been saying this more or less since she took office), but with no offer of any immediate action.  That was echoed by David Cameron at a press conference on 21 June.  Given the UK Government’s fragmented approach to funding the devolved government, and the looming ‘Calman-style Commission’ for Wales, one wonders if a review of Barnett for Wales alone might not end up being on the cards.  That would put an end to the principle of UK-wide equity in public spending, but solve several political problems for the UK Government at minimal cost.

Meanwhile, George Osborne followed David Cameron in visiting Northern Ireland.  In Osborne’s case, discussions appear to have focussed on the devolution of corporation tax, on which we’re told that a decision will be taken in the autumn, that the amount of the reduction in the block grant if it is devolved will need to be £385 million and that this is not negotiable (which seems only to have encouraged the start of a negotiation).  The amount in reduction of the block grant would not necessarily be the same as any cut in public spending, of course, as money transferred from London would be replaced by revenues generated in Northern Ireland, but any cut in the rate of tax would be at the expense of current public spending.  There are difficult technical issues about how much corporation tax is currently raised from Northern Ireland, of course, but EU state aid rules there can be no room for argument about the size of the cut when that has been worked out.

In Wales, the new Welsh Government announced its legislative programme.  The programme includes bills addressing social care,  education and allotments, ones reshaping the Wales Audit Office and the Higher Education funding Council for Wales, as well as bills regarding cycle paths and an opt-out system for organ donations.  This is a taster, with the full legislative programme to come on 12 July.  The last two proposed bills were both the subject of proposed LCOs in the last Assembly, so the issues concerning them are pretty well known.  Many of the others are perhaps unexciting, but reshaping how the public sector works is a classic use of statutory powers at Westminster.  It has been attacked by the opposition parties as thin and unimpressive, but as this is a government determined to focus on ‘delivery’ it would be odd for it also to come up with a packed legislative programme.

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4 Comments

Filed under Devolution finance, Northern Ireland, Scotland, Wales, Westminster

4 responses to “A belated weekly round-up, 21 June 2011

  1. Pingback: The Scotland bill passes the Commons, and moves to the Lords « Devolution Matters

  2. Pingback: Financing Welsh devolution: the Welsh Government’s proposals « Devolution Matters

  3. Pingback: Click on Wales » Blog Archive » Welsh taxation as an economic lever

  4. Pingback: Flawed fiscal thinking in Wales | Public Finance Opinion

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