Huw Irranca-Davies
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Barnett Floor (Wales)
Huw Irranca-Davies Excerpts(9 years ago)
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Huw Irranca-Davies (Ogmore) (Lab)
May I take my hon. Friend’s thoughts back to 2008, when I was a Wales Office Minister? The budget for Wales had gone up from £7 billion to £14 billion; by the time we left office, it was £16 billion. It has now decreased significantly. Any false arguments over additional tax-raising powers are nothing compared with the fact that we now need the Barnett floor. When Labour was in government, it was Barnett-plus; we now need a Barnett floor.
Nick Thomas-Symonds
My hon. Friend makes a powerful point. Record investment in public services in Wales was made under the Labour Government. Indeed, the Conservatives were so impressed that in September 2007 the then shadow Chancellor of the Exchequer—now Chancellor—adopted our spending plans for the next couple of years. That is how impressed they were, although these days they seem to be taking a different view of that record investment.
The Barnett floor works by multiplying positive funding increments to Wales not only by the comparability factor and population share, but by a further percentage increment. The qualifier is that the formula is not intended to work in reverse, with negative funding increments, because that would simply widen the underfunding gap.
In October 2010, the National Assembly for Wales unanimously endorsed a motion for the implementation of a funding floor, to be followed by wider funding reform. Nevertheless, the coalition Government of 2010 to 2015 did not deliver.
Alun Cairns
The specifics on that point will be outlined in the comprehensive spending review by my right hon. Friend the Chancellor.
Alun Cairns
With the greatest respect, I need to make some progress in the limited time remaining.
Last month, we published the draft Wales Bill, a key part of providing a clearer devolution settlement. We all want a funding floor for Wales, and it is right that that is accompanied by the devolution of income tax powers, because, by raising more of the money they spend, the Assembly Government will be more accountable to the people of Wales. Since 2010, Wales has recorded the fastest growth per head in the UK outside London, demonstrating the dynamism of the funding and spending position. Wales had the joint fastest growth of all the regions and devolved nations in 2013, with gross value added growing by 3.4%, well ahead of the figure for the UK. It is now time to move the debate forward and encourage the Welsh Government to use both the powers they already have and the new ones they are gaining to drive further growth in the Welsh economy.
Some specific points were raised on funding for local authorities. That is a matter for the Welsh Government—they decide how much money should be distributed to local authorities. I know that many in my constituency complain about how the cake is sliced in Wales, but that is the responsibility of the Welsh Government and it would be improper were this Government to intervene in those sorts of issues.
I underline that this Government are absolutely committed to introducing the funding floor as stated in the St David’s day agreement. We will introduce it as part of and alongside the comprehensive spending review.
Question put and agreed to.