So much for ‘moral purpose’: Throwing Wales under the bus

Published: 23 April 2014

In a piece that examines the implications of Scottish independence for Wales, Richard Wyn Jones makes an impassioned case for a fairer settlement for Wales.

Powers for a Purpose, the product of Labour’s Devolution Commission in Scotland,  sets out Labour’s vision for the future of Scotland and the UK if there is a No in September’s referendum. With Labour the only remaining political party with substantial support and elected representation across Britain, its contents are of great significance to anyone with the slightest interest in the future of the state we inhabit. Especially so for those us who live in the other devolved territories.

Scottish Labour’s Devolution Commission purports to base its recommendations on a clear and principled vision of the purpose of the United Kingdom:

The UK is a “sharing union”, with economic, social, and political aspects, in which risks and rewards are collectively pooled... The justification of each of these parts of the union is to a certain extent instrumental – what is in the interests of Scotland. However it is also principled – what is right for Scotland and the whole UK. It is also...founded on a moral purpose... In this union, we pool and share resources to ensure...those in need have equal economic, social and political rights throughout the entire UK. This is an idea – founded on solidarity, community and fairness – that is much greater than any notion of creating an independent state.

Solidarity; community; fairness: sharing resources in order to support the otherwise weak and disadvantaged. Stirring stuff. But also, unfortunately, hypocritical when seen from a Welsh perspective.

From a Welsh perspective, the detail of what Labour is promising in order to persuade Scotland to stay in the Union is nothing short of disastrous. Despite the high-flown rhetoric about the ‘moral purpose’ of the Union, Scottish Labour seem to have had no compunction about throwing Wales, one of the poorest parts of the Union, under the bus to shore up its own position.

While it may be hard to credit given some of the rhetoric emanating from the No campaign, Scotland is in fact one of the most prosperous parts of the United Kingdom. Though home to pockets of deep deprivation, it is nonetheless one of the few parts of the Union – London is the other, of course – to have proven economically resilient in the face of recession and austerity. For Wales it is, sadly, a very different story. Yet despite this, the Barnett formula – used to calculate funding for the Scottish and Welsh Governments – operates in a way that ensures per capita levels of public spending are far higher for Scotland than for Wales. Broadly speaking, if funding were allocated on the basis of need – surely a sound social democratic principle – then Scotland is over-funded to the tune of some £4 billion a year; Wales is under-funded by some £300 million.

Since the first publication of the findings of the Holtham Commission in 2009, Welsh politicians have united to call for reform of the Barnett formula. Even the Treasury has accepted that Wales is hard done by. Yet to try to persuade Scotland to remain in the Union, Scottish Labour is pledging to retain Barnett – apparently indefinitely. Indeed, the full version of Scottish Labour’s Devolution Commission report explicitly and loftily rejects proposals for a needs-based alternative. In an interview on Newsnight Scotland, Labour’s Scottish Leader, Johann Lamont, claimed that ‘the Barnett formula works for the United Kingdom.’ This can only possibly be true if one’s definition of ‘works’ means sacrificing the interests of the least privileged for the benefit of the better off. So much for solidarity, community, fairness and moral purpose.

The United Kingdom is not a “sharing union”. It is rather a realpolitik union. Those with the loudest voice and (oh, the irony) a credible threat of secession, get to have most influence on how resources are allocated. The publication of Powers for a Purpose marked the moment when Labour sacrificed the long-term interests of Wales in an attempt to shore up an apparently faltering No campaign. According to media reports, Ed Miliband, Ed Balls and the British Labour leadership have signed off on the report. One can only assume, therefore, that they are happy to concur that Wales is worth sacrificing for the cause of Union.

What, then, of Welsh Labour? Thus far, beyond a public comment by First Minister Carwyn Jones reiterating his view that the Barnett formula should be reformed, the party has maintained an embarrassed silence. Which is hardly compatible with the party’s 2011 devolved election slogan of ‘standing up for Wales’. But perhaps the Welsh Labour leadership has decided that it is unlikely to make any headway on the issue until after the referendum is safely negotiated? In a realpolitik Union, a No vote would, of course, substantially reduce Scotland’s bargaining power and ability to maintain its Barnett bonus – especially so if another independence referendum is ruled out for a generation. Welsh Labour may simply be biding its time. Which might be sensible internal party politics, but is hardly satisfactory from the perspective of either the Scottish or Welsh electorates.

Given the sheer size of Scotland’s Barnett bonus, surely Scottish voters need absolute clarity on whether or not the British Labour Party, rather than Scottish Labour alone, is willing to provide cast iron guarantees that Barnett will be retained whatever the present or future objections of the Welsh or, indeed, the English? And if that is indeed the case, then perhaps Scottish and British Labour leaders might deign to explain the ‘moral purpose’ of disadvantaging Wales for the benefit of Scotland? Despite its daunting 297 pages, Powers for a Purpose doesn’t bother to engage in any serious way with the arguments that have been put forward for a needs-based alternative to Barnett. So do please share your thoughts about this one, comrades. For the Welsh, this is a 300 million pound question…

As it stands it appears that the most likely way for Wales to secure fair, needs-based funding mechanism is for Scotland to vote Yes on the 18th of September and remove itself from the Barnett equation. Is that really the best that Labour can do?

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