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Tuesday, June 19, 2007

Financing the Assembly

The Welsh Liberal Democrats take the debate about how the Assembly is funded into Plenary tomorrow with a motion calling for the creation of an independent commission. In the past such a motion would attract the support of Plaid Cymru but would founder on the rocks of Labour and Conservative opposition.

Wednesday, however, may be different. That is because the very commission that we are calling for is already the subject of negotiations between Labour and Plaid Cymru, with the First Minister having agreed to its establishment. The Commission is also in the rainbow accord document endorsed by the Welsh Conservative Party. Will we get unanimity on this issue for the first time in eight years? We will see.

In many ways the reform of the Barnett formula has become a touchstone issue for a number of politicians. Some will use it at every opportunity to justify why the Assembly cannot deliver a particular policy objective. Others will argue that it is the key to the promised land. In the sense that more money means that we can do more things then they are right, but we must not allow the argument to stymie our agenda or to limit our ambitions. We have to work within the boundaries of the possible and deliver the best possible services on the present settlement until and if we can do better.

We must also be realistic about what a Commission will deliver. Many are assuming that the rational reform of the Barnett formula will deliver more cash for Wales. They may be right. But until we have the evidence, until we have put together a formula that is acceptable to everybody then we cannot be certain.

It may well be that negotiations between Wales, Northern Ireland, Scotland and the Treasury on funding formulas are too difficult and that agreement becomes impossible. It could be that we cannot even agree on a federal funding commission similar to that which delivers money to the various federal elements of Australian democracy.

In any debate on funding formulas we have to recognise that there will be winners and losers. In these circumstances it tends to be the losers who dig in their heels. No amount of righteous indignation at the injustice of it all will shift positions if that happens. We may have to keep the Barnett formula after all.
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