Tory propaganda deludes Welsh public
THE letter from Graham Simmonds (“Devolution hasn’t failed – Labour has”, WM, September 5) is a perfect example of how the Welsh public, through no fault of their own, are deluded by questionable Tory propaganda, and a London-dominated media, into believing that the essence of the Welsh political scene is purely one of Westminster bailing out an inefficient Welsh Senedd with “unprecedented” levels of funding.
The UK is an integrated economy where every region, including Wales, pays most of its tax revenue into Her Majesty’s Treasury which then has the power to redistribute
such revenues as they see fit. In the case of Wales this incorporates an annual block grant to fund the devolved government’s activities, plus expenditure by Westminster departments which handle areas of government not devolved to Cardiff. This talk of receiving “billions from England every year” is actually the recycling of funds which are justifiably ours in the first place. But it is the Treasury which decides these amounts, not the Welsh Government.
And over and above this, Cardiff has no powers to print or create monies. It therefore has no say in the size of its budgets, only how to use them.
The Barnett Formula, also referred to by Mr Simmonds, only relates to additions to the block grant (about a third of the Welsh budget) designed to match any extra English spend. Wales currently receives these so called “consequentials” pro rata, the difference in population plus 5%. The £4bn coronavirus funding quoted by Graham Simmonds is actually the Barnett proportion (about 4 to 5%) of an across-UK expenditure. However, when England spent less, as in the austerity budgets after 2010-11, the application of the Barnett Formula produced a decline in the Welsh block grant in real terms for the next five years.
It is true that total Welsh spend per household is usually greater than the English figure, but this is probably because of the high proportion of pension payments required by an ageing population. Wales, however, has less capital expenditure than
England, especially on transport, and science and technology, and especially versus London.
And Wales can’t increase these amounts, because some are in Westminster’s remit, and there are limits to how much we are allowed to borrow, and how much we can spend without asking Westminster’s permission. The decision to abandon the Swansea Lagoon was made by Westminster. Unfortunately the M4 relief road was Mr Drakeford’s decision.
The £13,795.7bn figure quoted by Mr Simmonds I presume is Wales’ fiscal deficit. We do not collect enough tax to fund our activities. This is, however, also true of every English region outside of London and the south east, of the UK in total, and more often than not, England. Essentially too much money goes into London.
In comparison to other European countries, Wales doesn’t overspend. It actually needs more not less investment to improve its GDP and hence its revenue to cover expenditure. But Westminster departments won’t spend money on Wales, and there are limits to what we can borrow and what we can invest.
So, the Labour Government in Wales may not be spending funds wisely, but Westminster must take far more responsibility for the poor state of the Welsh economy. Whether or not devolution has been a success is a meaningless question. Westminster clearly won’t allow it to succeed.
Peter Daniels Llantwit Major