Barnett Formula: Wales

Lord Forsyth of Drumlean Excerpts

Wednesday 12th November 2025 Lords Chamber

[Lord Wilson of Sedgefield (Lab)]

I thank the noble Baroness for that question. It is true that the UK and devolved Governments have agreed to undertake joint working to look at ways of improving the operation of the Barnett formula, to report at the next meeting of the finance Interministerial Standing Committee, expected in early 2026. Just to reiterate, they have had a 20% uplift in their budgeting from the Barnett formula, which is equivalent to £4 billion this year.

[Lord Forsyth of Drumlean (Con)]

My Lords, does the Minister recognise that this is not actually about the amount of funding going to Wales but about fairness? I draw his attention to the 2009 report of this House’s Select Committee on the Barnett Formula, which clearly showed that Wales loses out and that we should move to a funding system based on need. Surely that would be fairer to the people of Wales. Simply citing numbers does not deal with the problem, which is the basic unfairness in the way the Barnett formula has operated towards people in Wales.

[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.