THE leader of Plaid Cymru has said he would like to work with the SNP to make funding for devolved nations fairer across the UK.
Rhun ap Iorwerth – who took over as leader of the party from Adam Price last year – announced in a lecture last week proposals to introduce an Economic Fairness Bill to the UK Parliament to throw out the “outdated” Barnett Formula and bring in a more needs-based funding model.
And he has now told The National he would seek to gain support from Plaid Cymru’s “sister” party, the SNP, to try and ensure such legislation succeeds.
The Barnett Formula – introduced in the 1970s - is used by the UK Treasury to calculate annual block grants for the Scottish, Welsh and Northern Irish governments and is based on population size as well as the range of public services in each nation.
It calculates devolved budgets by using the previous year’s budget as a starting point, and then adjusting it based on increases and decreases in comparable spending per person in England.
But the system is often called out for not meeting the needs of each of nation, with Kate Forbes calling Scotland’s fiscal framework a “straitjacket” last month.
For Wales, problems with the formula were laid bare when the UK Government scrapped the northern leg of HS2 last year.
The initiative was regarded as an “England and Wales” project” with the assertion there would be benefits to parts of Wales including reduced journey times when the £180 billion project reached Crewe.
But in the end, with the northern leg ditched, opposition politicians argued Wales missed out on £5 billion in rail infrastructure investment having received no Barnett consequentials while Scotland and Northern Ireland did.
Ap Iorwerth said he recognises there can be “friction” between Scottish and Welsh politicians on the Barnett Formula, but believes the two parties should work together to change it in the interests of fairness for all.
'A short-term mechanism'
In an exclusive interview, he told The National: “The Barnett Formula was only meant to be a short-term mechanism and [Joel] Barnett himself said fairly early on that it had reached its sell by date and needed to be replaced.
“We’ve been arguing ever since that there needs to be a needs-based formula that really ensures that Wales gets its fair share of the cake.
"It is clear from UK Government actions that fairness isn’t happening on its own so we need a law to make it happen."
Asked if he would seek support from SNP colleagues on an Economic Fairness Bill, he said: “Yeah. I recognise there are some frictions between Welsh and Scottish outcomes to reviews of funding within the UK.
“The Barnett Formula has been kinder to Scotland than it has to Wales and the fact it has been kind to Scotland has in some ways been a barrier to it being changed in a way that would benefit Wales.
“Now, I have no interest taking away from funding that goes to Scotland, I want to make sure Scotland also gets its fair share of funding, but it’s no surprise that my focus is on making sure Wales has its fair share too.
“So hopefully we can all agree as Welsh and Scottish politicians that fairness overall is vital in the way the UK Treasury deals with public spending across these islands. On the issue of fundamental principles of fairness, absolutely let’s work together.
“I am always in the business of working as closely as I can with SNP colleagues on issues that are of mutual interest to us.”
A needs-based approach
Ap Iorwerth said he would expect any new legislation to reflect some Barnett-type processes but he would envisage a new system measuring need and not just population.
“We need to make sure that it measures properly where benefits are felt in some parts of the UK and where consequentials absolutely have to be paid. We have made arguments up to now but we haven’t got law on our side,” he said.
Power over tax bands
Another thing the Senedd member hopes can come out of fresh legislation is the power for Wales to introduce tax bands, as Scotland has been able to do for some time.
Currently the Welsh government can only vary the rates the UK Government sets, whereas Scotland has used powers to create new tax bands to adjust how much people pay according to how much they earn.
He said: “What Scotland has done shows what should be possible for Wales.
“We need to have that ability in Wales too because we have a very blunt set of tools.”
As well as wanting the tax powers Scotland has, Ap Iorwerth is hopeful Wales can one day have power over welfare benefits, as he revealed to The National last year he would like to see an equivalent to the Scottish Child Payment brought in to tackle poverty.
Striving for independence, fighting for more powers
On the subject of Welsh independence – which sits at the heart of Plaid Cymru’s mission – support has been steadily growing in recent years.
A Redfield and Wilton Strategies poll showed last August that 38% of people would vote yes to independence in Wales when don’t knows were removed, and that’s without the natural catalyst of any referendum campaign having been held.
Ap Iorwerth said he ultimately does not want to be campaigning for fairer funding for Wales and instead wants full powers over the country’s destiny.
But while Wales remains part of the UK, he believes he has to fight for as much as he can for the best deal.
“As long as we remain in the UK, which we are told is an insurance policy for us, then it is absolutely a duty of mine to put pressure on the powers that be at Westminster to make sure that fairness is seen in practice,” he said.
“I work every day to build a better Wales in the here and now, with the settlement we have, while always looking to the future and what it could be.”
