Wales: Additional Financial Resources

Lord Morris of Aberavon Excerpts

Wednesday 18th January 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, we have a difference of opinion on the figures. That might be because government budgets are routinely translated into real terms using the GDP deflator, by both the Treasury and independent bodies such as the OBR and the IFS. Using those figures, we see that the Welsh spending settlement is still growing in real terms this year and over the spending review period, even after the higher costs, and we believe that the Welsh Government are well funded to meet their obligations.

[Lord Morris of Aberavon (Lab)]

My Lords, have the Government any intention at all of reforming the Barnett formula in this Parliament? Would such a reform not be a levelling up that the Government aspire to?

[Baroness Penn (Con)]

My Lords, the fiscal framework between the UK and the Welsh Governments was agreed in 2016; that added a needs-based factor into the Barnett formula to ensure that Wales receives fair funding. It receives at least 15% more funding per person than the equivalent UK government spending in the rest of the UK. In fact, in the current spending review period, that additional amount is 20%.