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The Richard Commission

 Rt Hon Denzil Davies MP for Llanelli

 

 A note prepared by Denzil Davies for the Commission pursuant to his oral submission to the Commission at 3pm on Friday 11th July 2003 in Caradog House, St Andrew's Place, Cardiff.
1. The Commission has been considering whether or not it is desirable that further substantial powers - and in particular powers of primary legislation - should be transferred from the Westminster Parliament to the National Assembly for Wales.
2. The transfer of further substantial powers would almost certainly have financial and funding consequences. For example, a transfer to the Assembly of the functions, now exercised in Wales by the Home Office would mean that the cost of exercising those functions which now fall on the Home Office budget would then have to be met out of the resources of the National Assembly. If present arrangements were applied the amount of the `block grant' would have to be correspondingly increased.
3. We are reaching a point, I believe, where it is democratically unacceptable that the United Kingdom Parliament should be asked to transfer functions to the National Assembly in circumstances where the cost of exercising those functions effectively falls on United Kingdom taxpayers, but where the democratic representatives of those taxpayers have no say in how those functions are exercised by the National Assembly.
4. It has been estimated that the total revenue raised wholly in Wales falls well short of total Government expenditure in Wales. In January 1997 the then Welsh Office published a paper on Government Expenditure and Revenue in Wales for the year 1994-95. That paper showed a fiscal deficit equivalent to around 20% of Welsh GDP.
5. A few years ago I attempted to extrapolate form the Welsh Office paper what was the fiscal deficit as a percentage of Welsh GDP for the year 1999-2000. I calculated that the figure was 15%:- five times the Maastricht 3%. I doubt whether the fiscal deficit for this financial year will be significantly different.
6. Since Wales comes nowhere near being able to fund from its own resources total government expenditure in Wales, it would not, I believe, be right for the central government to be asked to fund the cost of further devolved functions while being denied any say in how those functions are exercised.
7. My conclusion, therefore, is that if further powers and functions are transferred from the UK government in London to the devolved administration in Cardiff, then the cost of exercising those powers and carrying out those functions should be met out of Wales' own resources and not by an addition to the `block grant'.