Is Labour throwing Wales under the bus?

With the post-Thatcher Scottish Conservative Party still a pale shadow of its former self, and with the Scottish Liberal Democrats facing existential crisis as a result of their coalition dalliance with the toxic Tories, Unionist hopes rest squarely on the Labour party. Labour is the only remaining political party with substantial support and elected representation across Britain. So anyone with any interest in the future of the state we inhabit, and Wales’s place within it, should take time to read the report of the Scottish Labour Party’s Devolution Commission, Powers for a Purpose: Strengthening Accountability and Empowering People.

Published exactly six months before the independence referendum (and after intensive and apparently fractious internal debate), Powers for a Purpose sets out a vision for the future of Scotland and the UK if Scotland votes No on September 18th. The report purports to base its recommendations on a clear and principled vision of the purpose of the United Kingdom:

The UK is a “sharing union”, with economic, social, and political aspects, in which risks and rewards are collectively pooled… The justification of each of these parts of the union is to a certain extent instrumental – what is in the interests of Scotland. However it is also principled – what is right for Scotland and the whole UK. It is also…founded on a moral purpose… In this union, we pool and share resources to ensure…those in need have equal economic, social and political rights throughout the entire UK. This is an idea – founded on solidarity, community and fairness – that is much greater than any notion of creating an independent state.

Solidarity; community; fairness: sharing resources in order to support the otherwise weak and disadvantaged. Stirring stuff. But also, unfortunately, hypocritical cant.

From a Welsh perspective, the detail of what Labour is promising in order to persuade Scotland to stay in the Union is nothing short of disastrous. Despite the fine rhetoric about the ‘moral purpose’ of the Union, Scottish Labour seem to have no compunction about throwing Wales, one of the poorest parts of the Union, under the bus to shore up their own position.

Scotland is one of the most prosperous parts of the United Kingdom. Though clearly home to pockets of deep deprivation, Scotland is nonetheless one of the few parts of the Union – London is the other, of course – to have proven economically resilient in the face of recession and austerity. For Wales it is, sadly, a very different story. Yet despite this, the Barnett formula – used to calculate funding for the Scottish and Welsh Governments – operates in a way that ensures per capita levels of public spending far higher for Scotland than for Wales. Broadly speaking, if funding were allocated on the basis of need – surely a sound social democratic principle – then Scotland is over-funded to the tune of some £4 billion a year; Wales is under-funded by some £300 million.

Since the first publication of the findings of the Holtham Commission in 2009, Welsh politicans have united to call for reform of the Barnett formula. Even the Treasury has accepted that Wales is hard done by. Yet to try to persuade Scotland to remain in the Union, Scottish Labour is pledging to retain Barnett. Indeed, the full version of Scottish Labour’s Devolution Commission report – weighing in at 297 pages – explicity and repeatedly rejects proposals for a needs-based alternative. In an interview on Newsnight Scotland, Labour’s Scottish Leader, Johann Lamont, claimed that ‘the Barnett formula works for the United Kingdom.’ This can only possibly be true if one’s definition of ‘works’ means sacrificing the interests of the least privileged for the benefit of the better off. So much for solidarity, community, fairness and moral purpose.

The United Kingdom is not a “sharing union”. It is rather a realpolitik union. Those with the loudest voice and (oh, the irony) a credible threat of secession, get to have most influence on how resources are allocated. The publication of Powers for a Purpose marked the moment when Labour sacrificed the long-term interests of Wales in an attempt to shore up an apparently faltering No campaign. According to reports in the Scottish media, Ed Miliband, Ed Balls and the British Labour leadership have signed off on the report. One can only assume, therefore, that they are happy to concur that Wales is worth sacrificing for the cause of Union.

But what of Welsh Labour? It is surely inconceivable that the Shadow Secretary of State, Owen Smith, will have been unaware of the contents of Powers for a Purpose, and its pledge to retain Barnett while rejecting a needs-based replacement. Yet, thus far at least, he has remained resolutely silent in the face of this assault on the long-term interests of Wales.

At this week’s First Minister Questions, Carwyn Jones assured the National Assembly that he had told Ed Miliband that Barnett should to be reformed. It is not clear, however, whether this was before or after Scottish Labour’s Devolution Commission published its report.  At any rate, Mr Miliband seems not to have taken a blind bit of notice.

Let us be clear that this is not an issue that can wait until after September’s Independence Referendum. In the context of Labour’s pledge to the Scottish electorate to retain Barnett, silence can only be interpreted as acquiescence. For if that pledge remains unchallenged, and Scotland does vote No, on what possible basis could Welsh Labour hope to raise the issue of Barnett reform in future? Barnett will have become nigh-on sacrosant. In the May 2011 devolved election, Welsh Labour presented themselves as ‘Standing up for Wales’. Here’s the acid test of that commitment.