Wednesday, 24 October 2012

An historic agreement?

As the the Spanish would say “mañana”. Sometime, perhaps, the day after tomorrow.This is exactly what was offered in what was trailed as an historic agreement by the Westminster and Welsh governments. 

How many Ministers does it take to make an historic agreement? In this case it took a Liberal Democrat Minister, a Conservative Minister and a Labour minister. Sounds like a joke. But the agreement doesn’t offer much laughs.

So what have both governments signed up to? 
Well, they’ve both agreed that it would be good thing for the Welsh Government to be able to borrow for capital projects. A good thing indeed. 
As Liberal Democrat Chief Secretary to the Treasury, Danny Alexander, said: 
Today’s announcement agrees in-principle to devolved capital borrowing powers for the Welsh Government. This is an important step forward on the devolution journey for Welsh people, and will bring them significant benefits. I am delighted that the two Governments have worked closely together to deliver this good outcome for Wales.”
But despite his warm words there is a slight problem, the Welsh government hasn’t got any means of its own to pay back a loan.  So it doesn’t have a place at the table with the big boys when cash is handed out. Not a great place for bailiffs to plough their trade. 
So despite the warm words the reality, no borrowing without tax raising. Put in language of accountants, there needs to be a revenue stream in place before these powers are granted. 
But Wales unlike Scotland have no powers over tax. So the right to borrow awaits on the Silk Commission deciding whether Wales is worthy of having such rights.  It is not, yet, a done deal.
But not wishing to rain on the trio’s parade let them have their say, I say. 
Labour’s Welsh Government Finance Minister, Jane Hutt, said: “The statement we are publishing today includes a new commitment by both Governments to review the path of  Welsh relative funding  at future Spending Reviews. I welcome the in principle devolution of capital borrowing powers, which should give the Welsh Government an additional lever to generate economic growth.”
What does it mean? It means the government in Westminster will look at Welsh funding every time it’s making a financial settlement. It doesn’t mean that they’ll do anything about it, but they promise to look. 
As the Tory Secretary of State for Wales, David Jones, wished: “I hope that today’s announcement will reassure the people in Wales of the progress both Governments have been making on Welsh funding arrangements.”  
Well, the prospect of jam tomorrow is not a great reassurance.
Today’s agreement is not a a great deal to shout about after twelve months of bilateral talks. Despite the photo opportunity it still very much a work in progress. And a lot more progress is needed before the champagne is taken off the ice. Perhaps it will all have to wait until the Scottish independence issue is resolved before the bubbles flow. If bubbles can flow, that is.


  1. Isn't it time we had a few referenda of our own here in Wales rather than just allowing those in Scotland to have all the fun.

    I'd like to be able to provide answers to the following:

    1. Do we want to keep the Assembly and all its clowns?

    2. Do we want the Assembly to have tax raising powers of any kind, ever?

    3. Do we want to keep the dual language policy?

  2. Clearly Anonymous hasn't clicked that two of the clowns involved here were Westminster MP's. How about binning Westminster and passing all powers to Wales, think of the millions we'd save and could put to use for the benefit of Wales.

  3. Fine, I'd go along with that. But just as long as we don't blow all the money on crackpot schemes promoting 'Welshness' rather than Wales!

    Yes, they are entirely different things.

  4. How embarrassing to have a 'national' assembly that has less powers to vary taxes and borrow money than one of the 22 unitary authories in Wales.

    And the worse bit? Labour doesn't want the power either. Labour want the money but not the responsibility. How humiliating.

  5. The Assembly has fewer powers than a community council - they can raise a precept (a tax) and have borrowing powers. Yet neither Labour nor Tory will allow a national assembly the same powers. Now that is pathetic.