The Independent Commission on Funding and Finance for Wales, also known as The Holtham Commission, was established by Rhodri Morgan (First Minister for Wales), Ieuan Wyn Jones (Deputy First Minister for Wales) and Andrew Davies (Minister for Finance and Public Service Delivery), of the Welsh Assembly Government. [1] The establishment of the Commission was a commitment in the One Wales coalition agreement between Labour and Plaid Cymru in June 2007. [2] Based in Cathays Park, Cardiff, the Commission completed its work in July 2010, publishing its findings in a final report: Fairness and accountability: a new funding settlement for Wales. [3]
The remit of the Commission was to look at the pros and cons of the present formula-based approach to the distribution of public expenditure resources to the Welsh Assembly Government; and identify possible alternative funding mechanisms including the scope for the Welsh Assembly Government to have tax varying powers as well as greater powers to borrow. [4]
The Commission comprised:
The Commission began its work in autumn 2008 and published its first report in July 2009. [5] In its first report, the Commission concluded that the Barnett Formula lacked any objective justification and had survived for reasons of political and administrative convenience. The Commission argued that the formula has caused relative funding per capita for devolved activities in Wales to converge towards the average level of funding in England (the "Barnett squeeze") despite relatively higher Welsh needs. The Commission recommended that in the future funding arrangements for Wales should be based on relative needs. As an interim measure, it recommended a modification to the existing formula that would place a "floor" under the block grant, preventing any further convergence towards the average English level of funding per capita. [6]
In its final report, published in July 2010, the Commission recommended that:
Public Finance magazine reported that the Holtham Commission's final report was welcomed by Labour, Conservative and Plaid Cymru politicians – although Welsh Business and Budget Minister Jane Hutt was said to have given a more "muted" response to Holtham's recommendation that the Assembly Government should gain tax-varying powers. [14] Former First Minister Rhodri Morgan opposed this idea, arguing that there was "no mandate" for tax-varying powers in the 1997 devolution referendum. [15]
James Mitchell of Strathclyde University called the Holtham Commission's conclusions "remarkably bold... its proposals on income tax are, in important respects, bolder than those proposed by Calman" (the commission created in 2007 to review Scottish devolution). Mitchell noted that Holtham's critique of the Barnett formula, which he regards as advantageous to Scotland, "ought to be a wake-up call". [16]
The West Lothian question, also known as the English question, is a political issue in the United Kingdom. It concerns the question of whether MPs from Northern Ireland, Scotland and Wales who sit in the House of Commons should be able to vote on matters that affect only England, while MPs from England are unable to vote on matters that have been devolved to the Northern Ireland Assembly, the Scottish Parliament and the Senedd. The term West Lothian question was coined by Enoch Powell MP in 1977 after Tam Dalyell, the Labour MP for the Scottish constituency of West Lothian, raised the matter repeatedly in House of Commons debates on devolution.
The Senedd, officially known as the Welsh Parliament in English and Senedd Cymru in Welsh, is the devolved, unicameral legislature of Wales. A democratically elected body, it makes laws for Wales, agrees certain taxes and scrutinises the Welsh Government. It is a bilingual institution, with both Welsh and English being the official languages of its business. From its creation in May 1999 until May 2020, the Senedd was known as the National Assembly for Wales.
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Welsh devolution is the transfer of legislative power for self-governance to Wales by the Government of the United Kingdom. Wales was conquered by England during the 13th century; the 1284 Statute of Rhuddlan caused Wales to lose its de facto independence and formed the constitutional basis for it as a principality in the "Realm of England". The Laws in Wales Acts 1535 and 1542 applied English law to Wales and united the Principality and the Marches which effectively ended both and incorporated Wales into England. The Wales and Berwick Act 1746 defined "England" to include Wales until the Welsh Language Act 1967, which separated Wales from England within the sovereign state of the United Kingdom.