Empowerment and Responsibility: Financial Powers to Strengthen Wales

Lord Elystan-Morgan Excerpts

Tuesday 11th December 2012 Grand Committee

[Lord Elystan-Morgan]

My Lords, I, too, congratulate my noble friend Lord Wigley on achieving this debate. Few people in the past 100 years have contributed as honourably and richly to the cause of Welsh devolution as he has.

The referendum of March last year gave Wales limited but nevertheless very wide-ranging primary legislative powers. It seems to me that the Silk report gives the opportunity to complement those very considerable constitutional rights with fiscal power. Those twin sinews of authority would essentially give Wales a home rule Parliament, something which Thomas Edward Ellis and Lloyd George cherished over a century ago and, indeed, the noble Lord, Lord Roberts of Llandudno, referred to.

I reiterate everything that has been said about the Silk report being very much in the track of history in this context. One should see it in the context of the establishment of the Welsh Office in 1964, the Richard Commission, the 2006 Act, the Holtham report of 2010 and to some extent—we cannot be isolated or insulated from this—the Scotland Act 2012. It is in that devolutionary track that one should see the Silk report. The momentum that has been created is very considerable. I argue that it is a dynamic movement that cannot now be stopped, nor, indeed, essentially decelerated.

I wish to confine my few remaining remarks to the Barnett formula. Barnett, as we know, was a stopgap measure, intended to last perhaps only a year or two. It was a crude mathematical division which was calculated as follows: for any moneys that were invested in England, a sum would be allocated to Wales based on the percentage that the Welsh population bore to the population of England. It was crude and took no account of need. As we know, the Holtham commission clearly proved that as a result of that formula we have lost massive sums of money year by year. The estimated loss by now is £350 million. Indeed, today we have heard a figure of £400 million from the noble Lord, Lord Wigley. I am prepared to accept that figure. That, of course, is what we lose purely on the question of need. Our situation is very different from that of Scotland. In relation to Scotland, we lose more like £700 million per annum. Once Scotland gained a Secretary of State in 1885, the Goschen principles were applied. By various subterfuges all manner of weighting considerations were applied to Scotland, with the result, of course, that it was given massive subventions which Wales does not enjoy.

The First Minister of Wales has made it very clear that any question of varying income tax rates should depend first on the reform of the Barnett formula. That is the heart, core and kernel of the whole situation. It is an annual swindle to which Wales has been subjected for very many years and it must be brought to an end. How do we do that? We do it by exploiting this new feeling of unanimity and unity that has shown itself in relation to the creation and acceptance of the Silk commission. Mewn Undeb Mae Nerth—in unity there is strength. That is our prospect and our salvation. For too long we in Wales have been blighted by the curse of disunity. Now we have a chance to put that right. In relation to the Barnett formula, we must realise that justice delayed is justice denied. A stop has to be brought very quickly; there must be a concentrated campaign in Wales to bring it about.