Barnett Formula

Debate between Lord Thomas of Gresford and Lord Newby

Tuesday 10th February 2015 Lords Chamber

[Lord Newby]

My Lords, as the noble Lord knows, all-party talks are going on at the moment about future constitutional and other developments in Wales, and funding is one of the items.

[Lord Thomas of Gresford (LD)]

The Minister referred to the Holtham commission. Is he aware that last October all four parties in the Welsh Assembly agreed that in conjunction with the UK Government Holtham should be looked at again? What is the current situation?

[Lord Newby]

My Lords, in terms of what is happening on the ground in Wales, the level of expenditure which Holtham suggested would be appropriate if there was to be a fair allocation is actually being spent.

Barnett Formula

Debate between Lord Thomas of Gresford and Lord Newby

Monday 3rd November 2014 Lords Chamber

[Lord Newby]

My Lords, the noble Lord will be aware that the system for funding across the nations will change as we move to a greater degree of devolution in Scotland and that, when a greater degree of taxation powers is devolved to Scotland, the importance of the Barnett formula will be proportionately diminished. Therefore, it is not as though we are standing still on this; we are making a move in a direction that I hope the noble Lord will support.

[Lord Thomas of Gresford (LD)]

My Lords, I would like to associate these Benches with the tributes that have been paid to Lord Barnett. I used occasionally to share a taxi with him from Euston and he was a delightful person.

Do the Government agree that the cost of providing services to people in Wales on an equal basis is greater than that in England, having regard to relative levels of ill health, poverty and sparsity of population? If so, is not the basic premise of the Barnett formula utterly and fatally flawed?

[Lord Newby]

My Lords, I think that we need to remember that Wales receives greater per capita expenditure support than England; in 2012-13, while in England as a whole the level was just over £6,000, in Wales it was just shy of £7,000.

Wales Bill

Debate between Lord Thomas of Gresford and Lord Newby

Wednesday 15th October 2014 Lords Chamber

[Lord Newby]

The noble Lord has just made my point that they are part of a single market for passengers in south Wales, or there would not have been that bleeding away. Passengers are not bleeding away from south Wales to Manchester airport because it is just too far. The point is that Bristol is within a relatively easy ambit and people are going there. The noble Lord discussed the question of distortion in respect of strict EU law, but the kind of competition we have been debating—and, indeed, his description of what has happened and how he wishes to reverse it—suggests that if we were to devolve this power and APD was reduced it could and probably would contravene the third principle of devolution, which we discussed earlier, that any change in one part of the UK should not be to the detriment of another part of the UK. The noble Lord wants it to be to the detriment of Bristol, so that there will be a balancing away from Bristol towards Cardiff.

[Lord Thomas of Gresford]

If I may interrupt, the noble Lord, Lord Rowe-Beddoe, does not want to do something to the detriment of Bristol—he wants to do something for the people of south Wales so that they have easy access to an airport and do not have to go more than 60 miles down the road to Bristol. I really do not see why it is not possible for the Assembly to have this power of setting a lower airport tax so that it attracts people in. It might then be possible to balance, with the use of that lever, the number of passengers going to Bristol or Cardiff; those coming from Swansea or further west may think, “Well, I’d rather go to Cardiff than to Bristol”. Eventually, you could start equalising the airport tax again, if the economics are correct. I am sorry to repeat myself, but we are talking about putting levers into the hands of the Welsh Government. I should have thought that the Government of the noble Baroness, Lady Morgan, in Wales would welcome levers of that sort to try to do something about the Welsh economy—otherwise we are just stuck with what we have got.

[Lord Newby]

Noble Lords are, as ever, extremely eloquently making a case for preferential treatment for Wales, which would benefit Wales. I am just making the point that it might well benefit Cardiff Airport but that would be to the detriment of Bristol Airport. That only stands to reason. There is not going to be a sudden explosion of long-haul traffic because of a tax change.