Monday, February 21, 2011
PETER HAIN, THE BARNETT FORMULA AND THE LABOUR PARTY
I know he really can’t help himself but surely it is time for reporters in Wales to start questioning the constant stream of distortion that emerges from the mouth of the former Secretary of State for Wales.
Yesterday, he outdid himself when he stated that the issue of under-funding for Wales had only recently become an issue.
“By acknowledging that the Barnett Formula is only now beginning to disadvantage Wales for the first time, it shows we were right to stick with it up until last year. The under-funding we are now seeing is due to the broken promises and inaction of the Tory-led Government.”
So, according to Peter Hain, there has been no disadvantage from the Barnett formula or underfunding in Wales until the current UK Coalition Government came to power.
I know the MP for Neath will never let the facts get in the way of his loathing of any other political party save Labour, but he really should read the findings of the Holtham Commission first before making such crass statements if he to salvage what is left of his political credibility.
For example, the Commission’s first report stated that
“Despite being applied to Wales since 1980, there is not much evidence of a Barnett-driven squeeze in spending prior to the establishment of the National Assembly for Wales in 1999 but there is clear evidence of convergence in recent years. In 1999-00, spending per head in Wales on Barnett-funded programmes was 25 per cent higher than spending per head on comparable programmes in England, or 125 in index notation, where England is set at 100. At present (in 2009-10), Barnett funded expenditure per head in Wales is 113, and is expected to decline to 112 in 2010-11. In other words, the gap in spending per head between Wales and England will have roughly halved since the introduction of devolved government.”
The graph above (which shows Wales’s relative expenditure per head on programmes covered by the Barnett Formula (England = 100) 1994-2011) is a timely reminder that in the period of office between 1997 and 2010, Labour did nothing to change the current funding system. In fact, and despite Gerry Holtham’s review, the evidence suggests that it is highly doubtful that a thorough review of Barnett would have been prioritised by Labour in Westminster if they had won the election.
For example, Liam Byrne, then Chief Secretary to the Treasury went on record in February 2010 to state that Labour had no plans to reform the Barnett formula: “Wales is well funded. Identifiable public spending per head in Wales is 14% above England and in the 2007 Comprehensive Spending Review, the Welsh Assembly Government received an annual average real terms increase of 2.4% compared to the UK average of 2.1%... The Government has no plans to change the Barnett formula."
Carwyn Jones himself admitted that, back in April 2010, that “The (Labour) manifesto doesn’t include a commitment to scrap Barnett.” This is not surprising as the current Shadow Chancellor, Ed Balls, went on record last July ruled out backing a change to the way Wales is funded, stating that the controversial Barnett Formula was not unfair despite experts saying it robs Wales of £300m a year.
In fact, if the Labour Party is so committed to Barnett reform as a key policy priority, then why was it not mentioned once by Ed Miliband in his speech to the Labour Party conference? In fact, Labour's new leader showed his commitment to Wales by using the platform in Llandudno to attack NHS reform in England and demonstrating little understanding of devolution.
It may be easy political points scoring to attack the UK Coalition Government after only nine months in power but Peter Hain and the Labour Party had thirteen years in which to change the Barnett formula and did nothing.
Perhaps it is time for the Welsh media to start reminding him of that simple fact.