Vir Cantium

I'm right, you know …

Category Archives: Abroad (Wales)

Misdirected Bleating

The BBC reports:

An influential group of economists are expected to call for the assembly government to be given the powers to borrow money and to vary income tax.

It previously said Wales was losing out on £300m a year because of the way it was funded.

I’m sorry, but how does being funded by a system that doesn’t relate to ‘need’ equate to “losing out” on £300m?

I have Welsh blood - I'm allowed to make tired and predictable references to sheep.

I might need a bigger house so I can store my CD collection and the E-type roadster that I don’t have yet but require in order to satisfy my petrolhead leanings. Does that fact that I don’t have these things, because of the tiresome detail that I can’t afford them right now, mean I am “losing out” on £300k of bricks, mortar and arousingly gorgeous metal?

Of course not.

Even if one were to accept the subjective ‘need’ criteria, I’m unconvinced that it should apply in determining funding for such large political units as Wales, Scotland or Northern Ireland. If the Welsh government wants to re-distribute income then let them do so from the Welsh ‘rich’. Then they might come to understand that to tax the ‘rich’, you have to have some ‘rich’ within your borders to begin with, and that means putting a leash on the class warrior within so that people are able to make real money (not just recycling public spending) to create the wealth which can then be taxed.

Not that I support the Barnett formula; that fudged stop-gap that was put in place to keep the Celtic fringes from storming across Offa’s Dyke or the Tweed and making a ruckus. I would scrap the formula and replace it with … nothing. Scotland, Wales and Northern Ireland do need more autonomy over their finances, but what is suggested is a half-hearted compromise which, like Blair’s wrecking of the Lords, is probably worse than either the starting or ultimate end positions.

Let the other ‘nations’ raise their funding through income tax, VAT, etc, and pay a precept towards defence and other genuine pan-Kingdom (or dare I use the term ‘federal’?) functions.

Like a stopped clock, the economists quoted are right just twice: that the Barnett formula is deeply flawed and that the Welsh Assembly should have more fiscal autonomy.

Yet there’s a real irony here. According to the Welsh Assembly’s own research* (281kb), full fiscal autonomy might just fall foul of the EU’s ‘State Aid’ rules. So, a major move towards autonomy for Wales et al could be scuppered by the lack autonomy of the UK in the EU. Funny old world, eh?

* the contents list says page 19 … it’s page 27 in the pdf – must be a Welsh thing.