There are many things to criticize Plaid Cymru for, but the one thing that has disturbed me most is in fact the central plank of their election campaign: namely that they want parity with Scotland both in terms of devolved powers and in terms of funding.
I don't have a particular problem with parity of devolved powers because, as things stand, our National Assembly has fewer powers than the Scottish Parliament, and therefore parity would be a practical first step. I would only qualify this by saying that I wouldn't want the powers of the Scottish Parliament to act as a limit. To give one example: it looks likely that powers to set the rate of Corporation Tax will be devolved to the Six Counties, but not to Scotland. Therefore I would want Wales to have this power too, irrespective of whether or not Scotland gets it.
For me, the principle is that I want everything that is currently decided at Westminster to be decided by our National Assembly ... in other words, independence.
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But I do have a very big problem with the idea that Wales should get parity of funding with Scotland. And I am frankly amazed that Plaid Cymru has abandoned its previous position of wanting fair funding for Wales, and now wants something that is patently unfair.
Of course I understand why and how it happened, but that doesn't excuse Plaid's behaviour. The Holtham Commission did a good piece of work, demonstrating that Wales was underfunded relative to need on the basis of an objective formula. At that time, the block grant to the National Assembly fell short of what we would get by applying this needs-based formula by roughly £300m a year. This was set to get worse because of the Barnett Squeeze, but in fact has not got worse because cuts in public expenditure have put the Squeeze into reverse. However the shortfall will increase again when public expenditure starts to rise over the next few years.
Because of this shortfall, coupled with general discontent with the way Barnett worked anyway with regard to Scotland, there seemed to be consensus among all the parties in the Assembly (the Tories, Labour and LibDems as well as Plaid Cymru) that Barnett had reached the end of its working life and needed to be replaced. The problem is that just before the Scottish independence referendum, those three Unionist parties panicked in the face of closer than expected opinion polls, and made a vow to retain Barnett.
It was at this point that Plaid Cymru panicked ... with the result that they came up with a policy to demand the same amount of funding per head as Scotland gets. Of course not all public spending in Scotland is channelled through the Scottish Parliament (for example most benefits and pensions are paid directly to individuals and families) but if the same "block grant per head" were paid to our National Assembly as is paid to the Scottish Parliament it would indeed, after making allowance for different devolved functions, result in Wales getting something like an additional £1.2bn in block grant.
Now what's wrong with that? Well, to put it bluntly, any child could see what's wrong with it. Why pick Scotland? Why not pick England instead and demand that Wales gets a block grant equivalent to the same level of funding per head as England? Simple, because if Plaid Cymru picked England, Wales would get much less of a block grant than we do now. In other words, picking Scotland is a blatantly biased choice. If the principle you adopt is equal spending per head, then that has to apply across the whole of the United Kingdom—which, by the way, is UKIP's policy—it cannot be applied selectively.
In effect what Plaid Cymru are doing is asking English taxpayers to give Wales much more than we need on any objective basis, and very much more than they give themselves. It is a wicked and stupid idea, and I have to say I'm very glad that I am no longer associated with a party that can come up with something that can only be described as a total perversion of any concept of either fairness or reason.
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In principle there are some very basic rules about how to redistribute funding between different parts of a state. We need to consider two things: how much each part of the state produces in terms of tax revenue, and how much each part of the state needs. One sum will be usually be higher than the other, and an equitable funding formula must be somewhere between the two. It cannot be outside that range.
A needs-based formula on its own will not work because, as the Holtham Commission noted, if it were applied to Scotland, it would result in Scotland getting maybe £4bn a year less in block grant than it does now. However that does not mean that Scotland is over-funded, because Scotland provides more per head in tax revenue to the Treasury than most other parts of the UK. In Scotland's case, the proportion of tax revenue it contributes to the Treasury is more than its relative needs, therefore it is right that Scotland gets more than it needs.
But in the case of Wales, what we produce in tax revenue per head is quite a bit lower than other parts of the UK, and the sum is also lower than what we objectively need, based on the formula used by Holtham (which, by the way, is based on the way money is distributed by departments within England). It is therefore reasonable and justified to say that Wales deserves more money, but only as much as will bring us up towards what we objectively need ... not more than that. To ask for or expect more is nothing but greed. Yet this is what Plaid Cymru have sunk to. It's sickening and shameful.
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It's also deceitful, because it is undeliverable. As I showed in the last post, even if the SNP win upwards of 50 seats on Thursday, they will not get to determine the direction of government. The same would be just as true if Plaid Cymru won 35 seats in Wales. 533 English MPs will never vote to give Wales more than it either contributes to the Treasury or needs.
That's not to say that there are other aspects of the way Wales is funded that can't be improved. In addition to the £300m shortfall in the block grant (or whatever it now is when the Holtham formula is applied) we can rightly call for our fair share of infrastructure investment so that, for example, Wales gets a pro-rata share of rail infrastructure investment or research funding relative to the rest of the UK. But we must make a reasoned and rational case for this, and we weaken any case we make if we, at the same time, are making unreasonable and irrational demands.
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In closing, I would also ask people to consider, in practical terms, what the result of getting more money from England than we either need or contribute to the Treasury would be. How on earth would it help us stand on our own two feet as a nation? It would simply tie us closer into dependency on England. Yet this is party policy ... from a party that supposedly wants independence! Perhaps, under better leadership, Plaid Cymru might become a party that is worth voting for again ... but it certainly isn't worth voting for them now.
