Barnett Formula: Wales

Lord Brennan of Canton Excerpts

Wednesday 12th November 2025 Lords Chamber

[Lord Wilson of Sedgefield (Lab)]

I think it is fair to reiterate to the noble Lord what I have already said: Wales is receiving a massive uplift in its budget via the Barnett formula. It is the biggest increase since 1998, and I think we should welcome that. As I said earlier, we are looking at the Barnett formula again, with the devolved Administrations, to find other ways we can improve it and make it work better.

[Lord Brennan of Canton (Lab)]

My Lords, the noble Lord, Lord Wigley, for whom I have a great deal of respect, neglected to mention, when he talked about the report A Decade On: Reforming Wales’ Fiscal Framework, recently published by Cardiff University, that it described tax devolution and the extra needs-based formula that was negotiated by Mark Drakeford as Finance and First Minister as an “unequivocal budgetary success”, because it has added £1 billion by 2027-28 to the Welsh budget. However, while making that point, I also emphasise to my noble friend the Minister the need for extra flexibility on borrowing. I very much hope that will come out of these discussions.

[Lord Wilson of Sedgefield (Lab)]

I thank my noble friend for that question. I like to think that all the avenues of approach he has mentioned will be looked at and discussed at the ministerial meeting at the beginning of next year. It is also important to point out that there is direct funding to Wales, which includes 160,000 workers in Wales who have benefited from a direct pay rise due to the increase in the minimum wage and the national living wage.