Part of the debate – in the Senedd at 3:09 pm on 17 January 2017.
I thank the Llywydd and the Cabinet Secretary for his statement this afternoon, and I would also like to thank the Chair of the Finance Committee for the opportunity to see the transcript of the recent meeting that they held. There is a great deal to be welcomed in this new framework, but in the time available to me, I want to focus on three specific issues, namely: the operation of the Barnett formula; the approach to revising the Welsh block grant in relation to new taxation; and the process of dealing with any conflict or dispute.
Now, as has already been said, there is a new mechanism in the framework—a Barnett floor of 115 per cent in terms of changes to the block grant. I wonder whether the Cabinet Secretary could tell us a little more as to why that particular figure was chosen. We will recall in Gerry Holtham’s report that there was a range proposed in terms of calculating the needs of Wales from 114 per cent to 117 per cent, and this figure is closer to the bottom of that range. Bearing in mind, of course, that we are talking here about a framework that will remain in place for decades, could he perhaps tell us a little about the process of review if Wales’s position in terms of its needs should change? Of course, Gerry Holtham, in coming to that figure, had set out the various different factors, and it’s possible—or, it is likely, in fact—that that situation will change over time. So, what process is anticipated for a review, should a review be required?
Now, in terms of the situation with changes to the block grant, the Wales Governance Centre has pointed to the negative impact in terms of the situation with SDLT, and that is reflected within the agreement between the two Governments on the very low comparative level of 25 per cent. There was a suggestion in the governance centre report as to how the situation could be more equitable by exempting the property market in London and the south-east, which actually skews these figures. Why didn’t the Government insist that that suggestion, or other suggestions to deal with these kinds of factors, should have been included in the agreement? The Government was successful in gaining other concessions, so why leave ourselves open to negative fiscal impacts as a result of the failure to do that?