The three nationalist parties now leading Scotland, Wales and Northern Ireland have said they will co-operate on practical issues, including obtaining more money from London.
Wales needs a “fair” financial settlement, according to Plaid Cymru. Scotland is being subjected to “Westminster austerity”, according to the SNP. Sinn Féin’s position is the most interesting: it has spent the past month complaining that Northern Ireland is significantly underfunded compared to Scotland and Wales. The party claims Stormont would have £1 billion (€1.15 billion) more per year if London treated it the same way as Wales and £3 billion more – a 16 per cent budget increase – if it was treated the same way as Scotland.
Sinn Féin’s case is highly debatable and will doubtless provoke amusement at the UK treasury but there is just enough in it to keep the pot boiling.
Wales moved to a new “needs-based” funding formula in 2018, designed to ensure its block grant is always enough to deliver devolved public services to the same standard as in England.
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The formula was developed by an expert commission appointed by the Welsh government a decade earlier. It decided need could be calculated using six socioeconomic and demographic factors, producing a figure of 115 per cent of equivalent spending per head in England. Yet for various reasons, including starting from a higher position, Wales is still receiving about 123 per cent.
Although Scotland has not adopted needs-based funding, the Welsh commission assessed its need relative to England at 105 per cent and it currently receives 125 per cent.
Northern Ireland moved to the needs-based system two years ago. The Welsh method was used to assess its relative need at 124 per cent, exactly what it is receiving. Hence Sinn Féin’s claim that Stormont is missing out.
A more obvious perspective is that Scotland and Wales are receiving too much. A better informed perspective is that this is all sophistry. The formula is meant to bring the block grant gradually into line with need, so the Welsh percentage should continue to fall.
Scotland chose not to adopt the needs-based formula after setting up its own expert commission in 2009. The old system it is retaining, known as the Barnett formula, contains a flaw called the Barnett squeeze that will slowly drive Scotland’s funding down to the same level as England. This effect is so gradual the SNP thinks it is better to stick with it. Stormont’s decision to adopt the needs-based formula was backed by all its main parties, including Sinn Féin.
How is Westminster at fault for these different, well-informed and freely-made choices?
The accuracy of the calculations can also be questioned. All are based on work conducted in Wales 18 years ago, some of which must be out of date. The latest analysis by Cardiff University finds Wales’s funding exactly matches need. The Institute of Fiscal Studies reckons it is “slightly” above. Stormont may not be missing out on anything, even by Sinn Féin’s convoluted definition.
All three nationalist parties have legitimate quibbles about budgets. Wales has been denied equivalent funding for the High Speed 2 railway line, controversially classed by the treasury as serving England and Wales, despite only running through England.
But it is impossible to see how all three parties can press London on money with a consistent set of criticisms, let alone a coherent new vision. Quibbling is all they can do without contradicting themselves and each other.
It is hard not to suspect this is a distraction at best and deliberate stoking of grievance at worst. Nationalist parties have an obvious temptation to blame their shortcomings in office on lack of money from London. If London refuses to give them more it can fire up their voters further. If their demands cause resentment in England, that helps the rhetoric of a disunited kingdom. If Nigel Farage’s Reform UK vowed to cut the devolved governments down to size, cynical nationalists might think they had hit the political jackpot.
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Although this approach has worked for nationalist parties so far, it may suffer diminishing returns. There is evident frustration in the devolved regions about their governments squandering money – the rise of Reform in Scotland and Wales is partly a response.
Nationalist voters are hardly immune to this concern. They may be more frustrated than others if they sense a deflection from their constitutional goals, or a fundamental strategic error: seeking more money from London could undermine the case for independence. As nationalist parties work together, people across the UK could become more aware of their common failings of profligacy and avoidance of unpopular decisions.
At least nobody could say those flaws are unique to nationalism. Had Labour and Conservative governments at Westminster been any better, the SNP would probably not be governing Scotland and Plaid Cymru would certainly not be governing Wales.
