Devolved Budget for Wales: Inflation

Lord Morgan Excerpts

Wednesday 15th March 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, I reiterate to the noble Baroness—and to the Welsh Government—that the Welsh Government, in the 2021 spending review, received the largest annual settlement in real terms since the devolution Act. I also say to the noble Baroness that, with the inflation that we are facing across the country, the budget is still growing in real terms across the spending review period. The Autumn Statement included additional funding for Wales, and today’s Budget means that the Welsh Government will receive an additional £180 million through the Barnett formula across the next two years. Measures that we are taking across the UK in today’s Budget will benefit Wales: the extension of the energy price guarantee; the freezing of fuel duty; and the doubling of draught relief, which will support more than 2,000 pubs and bars in Wales. There is much to be welcomed in today’s Budget for Wales.

[Lord Morgan (Lab)]

My Lords, is it not the case that Wales has been inadequately funded under both Labour and Conservative Governments? Many reports have been debated in your Lordships’ House. I recall the noble Lord, Lord Forsyth, saying how inadequate it is. The Barnett formula is a fraud; it seriously underfunds Wales. Furthermore, Wales in any case suffers from long-term problems in matters such as housing and education, which relate to the fact that Wales is bracketed with England—a bad idea in the first place. We need something much more substantial than what were—I agree with the noble Baroness—some beneficial points today. Otherwise, Wales will continue to lag behind.

[Baroness Penn (Con)]

I believe the noble Lord was referring to the Lords Committee on the Barnett Formula in 2009, which called for a review of that, including implementing a needs-based factor. That is exactly what we have done through implementing the recommendations of the Holtham commission, which found that the Welsh Government should have at least 15% more per person than equivalent UK government spending to reflect the Welsh Government’s additional needs. In fact, that figure is 20% more per person in the 2021 spending review, which is about £1 million more each year than the Holtham commission indicated and which the Welsh Government agreed was fair for Wales relative to England.

--- Later in debate ---

[Baroness Penn (Con)]

It is a difficult thing, but one that this Government are committed to. That is why I am so pleased to see that as a result of the measures announced in this Budget today, we have seen the OBR adjust its growth forecasts upwards by the largest amount based on supply-side reforms since its establishment in 2010.

[Lord Morgan (Lab)]

My Lords, the noble Baroness mentioned the Barnett formula in terms of great approval. How does one reconcile that with the view of Lord Barnett about his own formula when he said he was deeply ashamed of it? Why are the Government not equally ashamed?

[Baroness Penn (Con)]

My Lords, I believe we are having a whole debate this evening about the Barnett formula. I simply say to the noble Lord that, yes, all allocation systems have strengths and weaknesses. The reforms I spoke about earlier in this Question, introducing a needs-based factor into the Barnett formula for Wales, have addressed one of the major weaknesses that was identified.

Wales: Additional Financial Resources

Lord Morgan Excerpts

Wednesday 18th January 2023 Lords Chamber

[Baroness Penn (Con)]

I do think it is important that, when we look at our public spending, we take into account the needs of the various areas. I have described how we do that when it comes to the Welsh Government. We also have that process when we look at, for example, funding for local government. That is a principle that the UK Government will continue to support in our approach.

[Lord Morgan (Lab)]

My Lords, in addition to the excellent financial points that have been made on both sides of the House, would the Welsh Labour Government not benefit from having greater powers, of the kind of “devo-max” proposed in Gordon Brown’s excellent proposals on the constitutional settlement?

Economic Inequality

Lord Morgan Excerpts

Wednesday 23rd October 2013 Lords Chamber

[Lord Newby]

My Lords, the Government agree with the broad conclusions of the report. As the noble Lord says, there are major problems of deep-seated, regional inequalities and imbalances. However, the Government are committed to tackling these, which explains why we have committed more than £2.6 billion to the regional growth fund, why we are committed to High Speed 2 and why apprenticeships, which now stand at 850,000 in the last academic year—some 370,000 more than in the last year of the Labour Government—are taking place largely outside London and the south-east.

[Lord Morgan (Lab)]

My Lords, the Minister replied about income inequality. Is not the main thrust of the question about inequality of wealth? That has not really been tackled by any Chancellor since David Lloyd George. Should we not deal, particularly, with the question of inheritance and the way in which taxes on inheritance are systematically emasculated or evaded by rich capitalists?

[Lord Newby]

My Lords, there has been a very long-term increase in inequalities in wealth. This is largely based on inequality in housing, which is where the vast bulk of personal wealth belongs. In terms of getting a more balanced economy, whatever we do about wealth and inheritance, which has proved very difficult—and proved very difficult for Lloyd George—the key is to get more people into better paid jobs.

Welsh Government: Comprehensive Spending Review

Lord Morgan Excerpts

Thursday 4th July 2013 Lords Chamber

[Lord Newby]

My Lords, as noble Lords are aware, the Government have made it clear that we will not be reviewing the Barnett formula during this Parliament, at a point when we are sorting out the country’s finances.

[Lord Morgan]

My Lords, do not the Welsh Government desperately need to increase their borrowing capacity and was this not dealt with specifically by the Silk commission report last November? The Government promised their response to the report in the spring. Allowing for the vagaries of our climate, when, please, is spring coming?

[Lord Newby]

As the noble Lord has pointed out, it has been a late spring this year. I can tell him that the result of the Government’s consideration of the Silk review will be published shortly.

Regional Development

Lord Morgan Excerpts

Tuesday 12th March 2013 Lords Chamber

[Lord Newby]

My Lords, as the noble Lord knows, the Barnett formula is much discussed. The Government are not planning to change the Barnett formula during the course of this Parliament. We are trying to find a more constructive way forward. The Secretary of State for Wales is working very closely with the First Minister of Wales, looking at a raft of specific measures—whether it is possible new borrowing powers for Wales or the business case for electrification of the north Wales railway—to bring about specific changes which, it is hoped, will boost growth in the medium to long term in Wales.

[Lord Morgan]

My Lords—

[Lord Barnett]

My Lords, the Barnett formula, which, sadly, bears my name, should have been changed a long time ago, as a powerful Select Committee of this House, chaired by my noble friend Lord Richard, and many other senior Members of the House have recommended. When is that recommendation going to be put into effect by the Government?