Government of Wales Bill

moved Amendment No. 73:"After Clause 117, insert the following new clause—" ““ALLOCATION OF FUNDS (1)   The Secretary of State shall appoint a panel of not less than four and not more than six experts to recommend the sums of money to be allocated to the Welsh Consolidated Fund. (2)   The Secretary of State shall publish in full the terms of any recommendations made under subsection (1). (3)   The panel shall have regard to— (a)   the principle of fairness, (b)   the principle of transparency, and (c)   the particular needs of Wales.”” The noble Lord said: My Lords, the hour is late. It is particularly unfortunate that we were not able to debate this amendment far earlier in the evening as was our intention. I am sure that that would be the feeling of other noble Lords here tonight. I would like to point out that after the amendment tabled on the allocation of funds in Committee, which was similar to this, I had a discussion with the noble Lord, Lord Barnett, on three separate occasions. In fact, I persuaded him that it was a good idea to participate in the debate. At the time, we felt that the amendment should come up at a more socially convenient hour. However, the noble Lord informed me yesterday that he has a hospital appointment. He sends his apologies, but he also says in a forthright way that he supports the amendment and he wants the House to know that. There is a deal of unfairness in aspects of the Barnett formula, which he himself acknowledges. There are reasons why we have tabled the amendment. As noble Lords will see, it states that,"““The Secretary of State shall appoint a panel of not less than four and not more than six experts to recommend the sums of money to be allocated to the Welsh Consolidated Fund””." That is a formula for Barnett-plus. Subsection (3) states that the panel should have regard to fairness, transparency and the particular needs of Wales. Noble Lords will want to know why we have tabled the amendment. The reasons are transparent. There has been a lower percentage increase in public expenditure in Wales than in England. Having decided the level overall, we find that it is being sadly eroded year on year. In addition, the Welsh Assembly Government had to find match funding for European Union Objective 1 from their own block grant. That also had an impact. For example, that is not the case with Cornwall, which has Objective 1 status but gets its money via another route in England. Between 1999 and 2005, in particular, there has been a Barnett squeeze on Wales. Spending on services such as health and education grew more strongly in England than in Wales, Scotland and Northern Ireland. That was due to the Treasury’s Barnett funding formula, which determines changes in the annual block grant allocated to the devolved Administrations. Wales has lost apportionment to the tune of £1 billion between 1999 and 2005. The amendment would address certain issues. If it were accepted, account would be taken of the variation between allocations for health in England and those for Wales. There has been frequent use of the Barnett bypass in the past five years whereby moneys over and above the Barnett increase were added to the block grants for Wales, Scotland and Northern Ireland, for example when the devolved Administrations were compensated for an above-inflation UK-wide pay increase awarded to the nurses. That sort of thing happens very frequently. It distorts the Barnett formula and results in greater increases in England than in Wales. That occurs year on year, and the problem is compounded. The formula has been applied with full rigour in every comprehensive spending review. The only exception that we have established is where Wales received its EU Objective 1 funding. There was a huge tussle over that and, as we know, a First Minister ran against the rocks on that issue a little while ago. Many issues are involved in the allocation of funds. I have no wish to detain the House for much longer, but I should like the Minister to acknowledge that all is not well with the allocation of funds to Wales. The amendment would put that situation right. I beg to move.