Recently elected First Minister and leader of Welsh Labour Eluned Morgan has claimed that Starmer and the Labour government are in “listening mode” when speaking about any possible change in budget for the Senedd, alluding to a possible strutural change and an increase in funding flowing from Westminster following the ending of expensive government projects such as HS2. Morgan and her colleagues have come up with the number of £350m, a significantly smaller number than the members of Plaid Cymru have put out there, which sits at around £4bn. It was actually back in March of 2023 where current Shadow Secretary of State for Scotland, John Lamont, suggested Wales should actually get £5b in HS2 funding, this is after it came out Wales would only be getting 1.5% of rail enhancement investments for 5% of the UK population.
This brings light to Plaid Cymru and the Welsh Conservatives’ recent criticism of Welsh Labour, claiming they have “gone soft” on funding issues now that it is Labour in power. However, the First Minister rightly claimed that Wales does not have devolved power over rail, and that all decisions are made in London by UK government, stating that the UK government will spend when it can, opposed to giving more funding to Wales for rail development. This, however, is not the issue where the main calls of criticism are drawn to, that would be Welsh Labour’s, so far, broken promise to tackle the Barnett Formula.
The Barnett Formula, devised in 1978 by its namesake Joel Barnett, is the system that allocates the public spending levels of the three devolved states, Wales, Scotland, and Northern Ireland. Spending is allocated based on population and central government spending in key departments. For example, an increase of £20bn in Health spending in England would hypothetically leave Wales with £1b to spend within their own Health department.
The Formula has drawn heavy criticism, with an independent commission from Cardiff University’s very own Gillian Bristow suggesting the formula lacks transparency in spending and fails to actually meet the spending needs of the Welsh population. When questioned by the leader of Plaid in regard to the Barnett Formula, the First Minister stated “the Barnett Formula was a discussion we’ve already had with the new chancellor.” This suggests that a structural change to Senedd funding is not off the cards for the new Labour government.