---

Government of Wales Bill

As was pointed out in a debate in another place, the issue of funding for Wales, to which this amendment relates, is inseparable from the issue of public expenditure in the UK as a whole. No rational resource allocation system could ever consider the funding needs of one part in isolation from the whole. It would be quite impossible to manage a budget-setting process in this way. We heard that my noble friend Lord Barnett feels that the Barnett formula is unfair to Wales. I have never heard that point made, and I agree with the noble Lord, Lord Crickhowell, that although the noble Lord, Lord Barnett, has complained about the use of his name in this matter, he has never to my knowledge made a specific comment about Wales. The Barnett formula is operated by the Treasury and determines the funding allocations for Northern Ireland, Scotland and Wales. The ambit of the Bill relates only to Wales. The Barnett formula has served the whole United Kingdom very effectively, working in practice to produce fair settlements for Wales in the past. We will continue to monitor the operation of the current formula to ensure that it is being applied properly and rigorously. The mechanism has some clear advantages for devolved government; it is simple and understandable, and thus provides a degree of stability in the consequential flow of resources to Wales, as well as allowing a very considerable degree of freedom for Administrations to take their own spending decisions. The Government considered the whole matter very carefully and concluded that there was absolutely no advantage in reopening the question of the Barnett formula. I would also draw your Lordships’ attention to the fact that the amendment was debated, voted on and resoundingly rejected by 281 votes to 44 on Report in the Commons. We do not think that the noble Lord’s amendment is either appropriate or required, and invite him to withdraw it.