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More please?

Betsan Powys | 00:30 UK time, Friday, 17 July 2009

My mother in law was a pretty cunning big sister.

She'd make herself a glass of orange squash and make one for her little sister at the same time. Her own would always be that little bit fuller. Hang on, said little sis after a while, I'm really thirsty too .Why do you always get a bit more than I do? Big sis would take a big gulp of her own squash, compare the glasses again and tell little sis she'd now got the better deal - so she'd take a small sip of hers just to even things out.

It took little sis a few years before she worked out that she'd have been better off saying nothing - or perhaps making her own squash.

The moral of the story? Never trust your big sister and what you need isn't always what you get.

I used to see those two glasses of squash every time journalists asked the former Secretary of State, Paul Murphy, whether the Barnett formula - the formula that determines the size of the block grant that's paid to the devolved nations - should be revisited. His answer would always be one version or other of 'be careful what you wish for'. Watch it, he'd say. You could end up with less, worse off then you are now. After all on average Wales gets about £7,000 per head in spending compared with just over £6,000 in England. Draw attention to it and you just might find the guys - in England - who make the orange squash decide that's not fair and take a sip of yours.

Last week Gerald Holtham and his team published their take on the Barnett formula. It was, they concluded "arbitrary" and out of date. It ought to be scrapped and a formula put in its place that takes account of need. Such a formula, they said, would be a complex one and it couldn't be introduced overnight but if need was its driving principle that would mean comparatively more squash for Wales, not less.

"In the absence of reform" said chairman Gerald Holtham, "we calculate that by the end of the next decade the Barnett formula could have underfunded Wales by as much as £8.5billion - equivalent to £2,900 per Welsh resident".

Now the House of Lords Committee on the Barnett formula has added "unfair" to "arbitrary". Its time, says the Committee, is over. After over 30 years the formula should be replaced with a different system, one that recognises the per capita need, the changing needs of each of the countries in the UK. Those changes

I haven't read it all yet but one line will jump out at Ministers in Cardiff Bay. It's this one:

"When the Committee considered a range of indicators of need it became clear that Wales and Northern Ireland have greater needs per head of population than Scotland and England - the current allocations made through the Formula give Scotland more funds, per head of population, than appears to be justified when compared to Wales and Northern Ireland and their needs".

In other words give Scotland a bit less but Wales and Northern Ireland? They should get a bit more. Hear hear Ministers will say, though surely not celebrating the conclusion that England and Scotland have "markedly lower" overall needs than we do in Wales.

There's an argument too that finding a different way of delivering the block grant is possible and absolutely desirable. Shaun Woodward, the Secretary of State for Northern Ireland, might think it "would amount to a reinvention of the wheel" says the report. The Committee disagrees.

None of this means Mr Woodward's boss has to scrap the Barnett formula of course. Mr Brown's hand won't be forced by this report and neither would Mr Cameron's either for that matter but it does surely mean the "be careful what you wish for" argument will be considerably harder to make in Wales in future.


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